THE HIDE MARKET – DECEMBER 11, 2017
Things were slow for the U.S. hide market last week, but the lack of volume did not hurt U.S. Steer hide values. One of the reasons for the lack of trading was the fact that there were not many Steer hide offerings made by suppliers. The reason that U.S. Steer hide suppliers were not offering much of anything was that they all entered the week well sold ahead. The Heavy Native and Butt Brands Steer hides that did sell were gobbled up by the auto upholstery tanners who, as a group, have kept the market for these items cleaned up for some time now. And, this fact has pushed other Steer hide tanners to use the Heavy Texas and the other branded Steer hide selections which has pushed suppliers forward sold positions on all Steer hide selections out further. A fact that may have attributing to the lack of reported hide sales here in the U.S. was that a good number of U.S. hide suppliers were traveling in Asia last week. The group included representatives from three of the big four packers. No doubt those visitors made some sales during their travels that had not yet been reported here by the close of business last Friday. Weekly Cattle slaughter numbers (FIS) continue to run ahead of a year ago levels, but that has not had any recent effect on hide prices. Seems that supply and demand for U.S. Steer hides is staying pretty much in balance but favoring suppliers maybe just a little. We keep hearing form Asia that U.S. hide prices cannot go higher, that leather demand and leather prices cannot justify higher hide prices. But, there is no doubt that U.S. Steer hide prices have advanced over the 6 weeks or so and look solid for now. Part of reason for this could be that tanners feel current hide prices are reasonable and that they should own some. Even if they do not have leather orders in hand now they may well be expecting them to come. And, the current production is the last before winter hits and high quality can decline. In spite of the apparent decline in the number hides traded last week, based on the sales that were reported, we are pushing our price quotes on the Big Packer and equivalent Steer hide prices up. We are calling the FOB plant value for the seasonal average weight Heavy Native Steer hide up to $64.00 to $66.00 per hide. Also, we are moving our Big Packer Butt Branded Steer hide FOB plant price to $61.00 per piece which is up $1.00 from our week ago quote. The range of sale prices reported last week for the Big Packer seasonal average Heavy Texas Steer hide selection was again wide coming in at between $49.00 to $55.00 per piece plant basis.
The Export Sales Report released by the USDA on December 7, 2017 for the seven-day period ending Thursday, November 30th showed that a net 507,600 whole cattle hides, and wet blue equivalents had been sold for export during the period. This number includes sales for shipment in both 2017 and 2018.
Federally Inspected Slaughter, (FIS) for the week ending Saturday December 9, 2017, was estimated 633,000 cattle. Year to Date FIS for cattle is estimated 29,959,000 head which is up 1.541,000 or 5.4 percent higher than the same period a year ago.
We look for any, and there will not be many, Steer hides that U.S. suppliers have on the offer list this week to be at higher asking prices. Will tanners follow these higher prices? Well if they want to buy hides this week or next they will have to pay higher money to secure them. We say this because we think that all Steer hide marketers have comfortable sold ahead positions and can basically go a few weeks with few sales. Although U.S. Cow hides producers have improved their positions somewhat over the last few weeks they still need to sell produce and will be pushing to do so this week. In their favor is that current Cow hide prices are low.
“How can they beat me? I’ve been struck by lightning, had two back operations, and been divorced twice.”
– Lee Trevino, on his prospects for winning the 1983 British Open