It is safe to say that there were not enough hides sold in the U.S. market to cover a week’s production. Sales prices for U.S. Steer hides were mixed, but to our knowledge none of the Steer hide selections fetched higher prices. Butt Branded, Heavy Texas and Branded Steer hide prices were pretty much unchanged from their most recently sold levels. Heavy Native Steer hides on the other hand in our eyes slipped by $2.00 per piece. U.S. Cow hide values, like the various Branded Steer selections, were unchanged for the most part. There were some reports of Plump Cow hides, both Native and Branded, trading down $1.00 last week. While Dairy Cow hides saw more demand the Plumps and were moved at prices that were marginally better than last booked levels. On the positive side for the U.S. Hide Market were reports from some of the Chinese upper (shoe) leather tanners that they have seen leather orders pick up recently. On the negative side was that those same tanners also said those orders are below last year’s both in volume and price. There was also a bit of optimism among the Chinese tanners that the U.S. and Chinese threatened January 1, 2019 tariff increase will either be pushed off into the future or canceled. This thinking is the result of rumors circling around the Chinese tanning industry that ongoing meetings between the U.S. and China governments representatives are making progress on a new trade agreement. USDA’s Export Sales Report released last Friday for the week ending Thursday, November 8th was a lower number than was reported the prior week. The exports/actual shipments number reported for the period ending the 8th was a robust one. That shipment number is the result of Chinese tanners and U.S. hide suppliers trying to get U.S. raw and wet blue hides into China prior to January 1, 2019. Last week’s Federally Inspected Slaughter (FIS) number for Cattle came in at a level that was steady with what we have seen for the last three to four weeks.
Following are what we see as the FOB plant values for the seasonal average weight Big Packer Steer hide selections at the close of business last week:
- Heavy Native Steer hides at between $48.00 and $49.00 per piece, down $2.00 for the week.
- Butt Branded Steer hides at between $42.00 and $43.00 per piece, down $.50 for the week.
- Heavy Texas Steer hides at between $32.00 and $34.00 per piece, unchanged for the week.
The Export Sales Report released by the USDA on November 16, 2018, for the week ending Thursday, November 8th, stated that 390,800 whole cattle hides and wet blue equivalents were sold for export during that 7-day period. China was the number one buyer, purchasing 218,400 pieces. Korea was the second largest buyer taking 86,000 units sold, of which all were whole cattle hides.
The USDA estimated the U.S. Federally Inspected Slaughter, (FIS) for the week ending Saturday, November 17, 2018, was 641,000 cattle, which was 1,000 head above the prior week’s number. Year-to-date the FIS is up 686,000 head or 2.4% from last year’s level.
China’s President Xi and President Trump will meet face to face this week, and we hope they come away with some good news regarding the ongoing trade talks between the two countries. Spitting back and forth by increasing tariffs does not seem like it could be good for either country. Both countries need each other, and orderly trade between the two largest economies is important to other nations as well. We are hoping that some positive progress will be made in the trade talks this week which will make for a good Thanksgiving Day in the U.S. for all of us involved in the hide business, as well as for all involved in the tanning and leather goods industries in China.
WISDOM FROM JACK NICKLAUS
“I believe the Ryder Cup is an exhibition by some of the best golfers in the world, great entertainment and an exercise in sportsmanship, camaraderie and goodwill. The individual performances, good or bad, don’t determine who the best players in the world are. Nor does the side that happens to win determine on what side of the Atlantic the best golf is played. Too many people believe otherwise, and that helps make the matches too contentious among the teams and their fans.”