THE HIDE MARKET – OCTOBER 15, 2018
For what seems like several weeks now, the hide market has been in somewhat of a holding pattern. Last week was no different, with prices continuing to hold steady at current levels. China was back with plenty of interest, if suppliers could ship the goods in November for December arrival in China. Fears of a tariff increase in January are still very real and affecting Chinese tanners’ buying decisions. Currently, the Chinese government has not announced any further increase in tariffs, but that has not curbed tanners’ fears. With the announcement that Presidents Donald Trump and Xi Jinping will meet next month at the G20 conference, some are hopeful that a resolution to the trade war can be found. With all this, last week found a sizable amount of buying interest, but packers and processors were not successful in raising prices, so and again it was a week of steady trading. This was not only the case for the U.S. Steer hide market, as both Plump and Dairy Cows found more buyers as well. The plump Branded Cow market still finds itself at nearly unprofitable levels, but we feel its downward slide has stopped. As for the U.S. slaughter, all indications still point to the current levels staying unchanged with margins well in the black for beef packers once again.
As you may have guessed, we are going to leave the quotes for the FOB plant values for seasonal average weight Big Packer Steer hide selections unchanged as follows:
- Heavy Native Steer hides at between $54.00 and $55.00 per piece, unchanged from the prior week.
- Butt Branded Steer hides at between $44.00 and $45.00 per piece, unchanged from the prior week.
- Heavy Texas Steer hides at between $33.00 and $34.00 per piece, unchanged from the prior week.
The Export Sales Report released by the USDA on October 4, 2018, for the week ending Thursday October 10th stated that 202,500 whole cattle hides, and wet blue equivalents were sold for export during that period. Of note for this report was the cancelation of 147,500 wet blue hides that was a big part of the 187,400 pieces of wet blue hides that had been reported to have been sold to the Dominican Republic during the prior week. China, was the biggest buyer, purchasing 237,700 pieces.
The USDA estimated the U.S. Federally Inspected Cattle Slaughter, (FIS) for the week ending Saturday, October 13, 2018, to be 639,000 head. This number is down from the previous week’s 643,000 head harvested. Year to date the FIS is up 2.5 % from last year’s level.
For the first time in several weeks, there are no Asian holidays on the calendar with any of our trading partners. So, will we see a change in the market this week? We can’t say yes with any confidence, but we still feel prices are cheap enough that they will not go lower. As we get further into October we might see some small price increases on any selection that can be shipped promptly and avoid any possible increase in tariffs. As we look back on these last several weeks, we think it is safe to say that prices this week will, for the most part, remain steady. After the hide market took a beating these last 18 months, everyone in the hide trade is happy to see a stable, albeit rocky, hide market.
Quotes from Jack Nicklaus
Although I have great affection for the Masters, as far as pure gold I’d rather play in the British Open than any other event.
To me, winning by one is the same as winning by 10.