THE HIDE MARKET – NOVEMBER 5, 2018
Last week’s hide market was pretty boring. There was some trading, but it was not notably voluminous nor did the transactions move hide values much. The U.S. Steer hides that were traded were done at either steady prices or, in the case of Heavy Native Steer hides, down slightly from last traded levels. The number of U.S. Cow hides that were traded last week was also limited, while the sales were concentrated on the Dairy Cow hide selection. The sale prices for those Dairy Cow hides were steady or a little higher. If a U.S. hide supplier still had product available for arrival China prior to the first of the year, then that supplier could find plenty of buyer interest. Toward the end of the week, there were rumors floating around China that there was progress being made in the trade talks between the U.S. and China. Whether or not this is true, some Chinese tanners were saying they would now look at accepting December shipment hides. U.S. hide suppliers, on certain good grading selections, like Holstein Steer and Cow hides, continued to find plenty of interested buyers in Asia, Mexico and domestically to keep themselves well sold ahead. And, prices for those selections remained steady to slightly higher. The weekly cattle slaughter here in the U.S. continues to run at between 630,000 to 650,000 head, which is considered by most to be full capacity, or close to it. Even with lower hide values U.S. beef packers are making record per head profits. As both beef demand domestic and export, alone with a plentiful supply of market ready cattle work in their favor. The Export Sales number reported last week by the USDA for the 7-day period ending October 25th was not a positive for sellers but, shipments (actual exports) were positive.
Following are our quotes for the FOB plant values for the seasonal average weight Big Packer Steer hide selections as of last Friday are for:
- Heavy Native Steer hides between $52.00 and $53.00 per piece, down $1.00 for the week.
- Butt Branded Steer hides at $43.00 and $44.00 per piece, down $.50 for the week.
- Heavy Texas Steer hides at between $32.00 and $34,00 per piece, down $.50 for the week.
The Export Sales Report released by the USDA on November 1, 2018, for the week ending Thursday, October 25th stated that 403,600 whole cattle hides, and wet blue equivalents were sold for export during the period. China was the number one buyer, taking 191,300 of the pieces sold. Mexico was the next biggest buyer with 48,700 pieces purchased. Italy with 43,600 units purchased, all wet blue hides, was the third largest buyer.
The USDA estimated the U.S. Federally Inspected Slaughter, (FIS) for the week ending Saturday, November 3, 2018, was 643,000 cattle. This number was up from the prior week’s 633,000 head harvested. Year-to-date the FIS remains up 658,000 head or 2.5% from last year’s level.
The U.S. Cattle slaughter number will remain at its current capacity level this week before moving lower next week as we approach our November 22nd Thanksgiving holiday. We expect U.S. hide suppliers will be offering December / January shipment product this week and asking for steady to higher prices, depending on selection and origin. We think any change in U.S. hide prices most likely hinge on news regarding trade negotiations between the U.S. and China. Not only are Chinese tanners watching this situation closely, but so are all other buyers/users of U.S. hides. We must think many of these users are standing on the side lines, curtailing their U.S. hide purchases, until the trade and tariff issues are clarified. President Trump mentioned toward the end of last week that progress was being made between the two side. Hopefully that is the case and we hear some positive news soon. MARKETS NEVER LIKE UNCERTAINTY.
COMMENTS HEARD ON THE COURSE FROM GOLFERS OF DIFFERENT PROFESSIONS
– Garbage hauler hitting a fairway shot over the green: “Mon back, ’mon back”
– A dentist setting up for a twenty-foot putt: “Open just a little wider please.”