With the U.S. hide market remaining in the doldrums last week and showing little signs of life, we found time to read David Peters’ blog regarding the state of the international hide and leather markets. Everyone involved in the U.S. hide and leather industries surely knows David well, and we think most involved in the global hide industry know David as well. If you have not read his recent blog, then you should- it can be found at www.LeatherBiz.com. There are some efforts being made to address what David points out as the main problems facing the hide and leather industries, and solutions to those problems are being worked on. Leather Naturally, which is in its infancy, is one those efforts, but it will take time and money before we may see progress. The time it will take for Leather Naturally to reach its goals will in big part be related to the funds they have available to achieve those goals. Who is to gain from these efforts? All those in the beef supply chain- ranchers, feeders, and beef packers- are all affected by leather’s decline. Based on the information published on The Jacobsen sheet, U.S. Steer/Heifer hide value have dropped by about 70% or $77.00 per piece over the last 5 years. U.S. Cow hides have fared even worse, losing 86% or $71.00 of their value over the last five years. These losses filter back down the beef industry supply chain, so those effected, and their trade associations, should all be financially supporting the efforts of Leather Naturally. Individual packers, who from all reports are currently doing very well, could belly-up some funds and how about NAMI, the NCBA and so on? The U.S. Big Packer Steer hides that were sold last week were done at prices that were on an average down $2.00 per hide. There were rumors of large volume sales of U.S. Steer hides being made by some U.S. Big Packers at prices that down more than $2.00 per piece from their last traded level. Again, these are rumors. U.S. Cow hide sellers had mixed results with some Dairy Cow hide productions selling at steady levels and others being moved at prices down $1.00. Plump Native Cow hide prices were down $1.00 while Plump Branded Cow hide values were unchanged.
The FOB plant prices for seasonal average weight Big Packer Steer hides were down again last week:
- Heavy Native Steer hides at $40.00 to $42.00 per piece, were down $1.50 for the week.
- Butt Branded Steer hides at $35.00 per piece, were down $2.00 for the week.
- Heavy Texas Steer hides at $25.00 to $27.00 per piece, were down $1.50 for the week.
The USDA Export Sales Report released on Thursday, April 18th. for the week ending Thursday, April 18th. indicated that 429.600 raw and wet blue U.S. hides were sold for export during that 7-day period. China booked 229,400 or about 54% of the pieces sold. Korea purchased 58,500 units, all of which were raw hides.
The USDA estimated the U.S. Federally Inspected Slaughter, (FIS) for the week ending Saturday, April 27, 2019, was revised to 643,000 cattle. That number is real cslose to the prior week’s estimated 641,000 head.
The Chinese tanners remained on the sidelines again last week. Their absence from the market is noticeable to all U.S. raw and wet blue hide suppliers. The tanners tell us that the shortage of finished leather orders is the reason they have not purchased more hides. We understand what are saying. And we understand that they have lost market share to competing substitute materials. With price being a very big part of the competition the fact that hide prices are currently very low will make tanners leather more competitive and they will win back a larger share of the market. But that will take time.
GOLF ONE LINERS
Q: Why do golfers travel with two pairs of pants?
A: In case they get a hole in one!