What started as a quiet firm week in the U.S. hide market last week changed to a crazy-like hot market by week’s end. Offers were scarce and demand just marginal, but when one large packer offered HTS and Butts at the market on Wednesday night, there was suddenly more demand for those hides than offered, the market got cleaned up, and prices jumped again. Heavy Native Steer hides sold as high as USD 44.00 per piece FOB plant, while Heavy Texas and Butt Branded Steer hides sold at USD 43.00 per piece FOB plant. Colorado Branded Steers sold out at USD 36.00 per piece. Cow hide sales were minimal last week. There were a few sales of Holstein Cow hides made last week at USD 1.00 to USD 2.00 higher. It appeared to us that Branded Cow hide offers were plentiful with only a few sales being reported.

The USDA Export Sales Report issued on July 10, 2009 for sales made during the week ending Thursday July 2nd showed a total of 531,400 net hides and wet blue equivalents sold for export. China /Hong Kong was the largest buyer taking 283,200 pieces, with Korea the 2nd largest buyer with purchases of 70,900 pieces.

The Federally Inspected Slaughter (FIS) for the week ending July 11, 2009 was a holiday-reduced 628,000 head, which is the same as last week. Some packers took Friday as the holiday while others took Monday, so we had two holiday-shortened weeks in a row. The slaughter number for the same week last year was 699,000 head.

Like everyone else, we are confused by the obviously strong demand for hides that keeps surfacing every week. While we keep getting comments from tanners overseas that leather business is not that great, and that they also are confused by the level of demand, the market continues to get stronger. The sudden jump in hide values last Thursday caught everyone by surprise. As a result, whatever hides were being offered by packers and processors were taken off the market immediately, so by the end of the week there were no Steer hides for sale. The big question now is where do we go from here? Certainly, whatever few offers are put out this week will be priced at higher levels. While we may feel it will be hard for tanners to step forward and pay the higher asking prices of USD 2.00 or more per hide, we have been wrong in the past in assuming that tanners would not be that desperate. It will be interesting to see if demand will run rampant again this week.

GOLF QUOTE FOR THE WEEK

“While playing golf today, I only hit two good balls. That was when I was in the trap and stepped on the rake.” Henry Youngman