THE HIDE MARKET – APRIL 16, 2018
U.S. Raw Hide prices moved lower again last week. Steer hide values were lowered by $0.50 to $1.00 per piece, depending on selection, were all the U.S. Cow hide selections. There were more tanners in the market last week, and the return of bids from Chinese tanners was a notable footnote. There were repetitive reports from China about pollution-related government closures in northern China and the plight of the shoe leather business. There is no question that these factors have affected the value of U.S Cow hides and some Steer selections as well. There were also the continuing tales of U.S. Big Packers making volume sales to some of the large tanners in Asia at drastically reduced prices. There must be some questions as to the validity of those rumors regarding both the quantities and price levels rumored. Auto upholstery tanners continued to be in the market for U.S. Heavy Native Steer and Butt Branded Steer hides, keeping the price decline for these selections minimal. Sale prices for the Branded Steer hide selection, including the Heavy Texas Steer hides, continued to be more under pressure than the Native and Butt Brand selection reflecting the depressed demand for shoe leather.
The U.S. Cow hide market has become even more confusing over the last couple of weeks. The price spreads of reported or rumored sales within any of the various Cow hide selections are unusually wide. Price spreads within a Cow hide selection, related to origin and production, are always present, but the width of these price spreads is unusually large. Large to the extent that they make one wonder about the validity of some of these rumors/reports. Despite all the clamoring by tanners that hide prices should move lower the Export Sales Reports issued by the USDA over the last few weeks show that sales have be hefty. The shipment numbers in those reports have also been respectable. Makes one wonder!
Based on what we saw in the market last week, we’re once again lowering some of our FOB plant price quotes for the Big Packer Steer hide selections. We are calling the Heavy Native Steer hide value a weak $63.00 per piece, while we are taking our quote for the Butt Branded Steer hide selection down to between $56.00 to $57.00 per hide. It is our understanding that selling price on Big Packer Heavy Texas Steer hides ranged from $48.00 to $50.00 per piece plant basis.
The Export Sales Report released by the USDA on April 12, 2018, for the seven-day period ending Thursday April 5th showed that a net 720,800 whole cattle hide, and wet blue equivalents were sold for export during that week. This number is up from the 616,800 pieces reported as sold the prior week. Exports/actual shipments during the week ending April 5th were reported to be a healthy 702,300 pieces.
Federally Inspected Slaughter, (FIS), for the week ending Saturday April 14, 2018, was an estimated 605,000 cattle. The prior week’s estimated slaughter number was 615,000 head. Year to Date FIS for Cattle is up an estimated 951,000 head of or 2.7 % from the same period a year ago.
There were more tanners in the market last week and our feeling is that a good round of business was put together during the week. For sure, the Export Sales numbers reported by the USDA over the last three weeks are encouraging to U.S. hide suppliers. Additionally, several of last week’s tanner/buyers were asking for prompt shipment of their purchases which was also encouraging to sellers. U.S. cattle hides should be attractive to tanners with the Steer price being off by 15-30% and Cow prices down by more than a third from a year ago. For this week we look for U.S hide prices to remain steady at worst.
“When I could hear my drives land.”
– Gary Player explaining how he knew it was time for him to stop playing in the Masters as a past winner.