The United States hide market last week had many in the industry feeling like it was 2017 again, with tanners of all sizes entering the market and bidding on a wide variety of items. It feels like years since tanners were in the market looking to buy small packer and lower grading items. We can’t quite figure out, other than price, the exact reason why it is just now that these items are of interest since the prices have been cheap for a long time. Regardless of the reason, it is good to see these items starting to move, the key will be if this trend continues. We all know that one week does not make a market. It was not only these items that found interest this week, the big packers enjoyed plenty of interest in their steer hide offerings. Though, many of those bids on big packer steer hides came with the caveat that shipment must arrive in China before the possible December 15th tariff increase, so that could explain a lot of the demand, as that deadline is quickly approaching. Many could speculate as to the reasons for the demand this week, but regardless of the reason, we again feel that a week’s production of big packer steers was sold. Overall the market prices for the big packer steer hides were steady to slightly firm. Cow hide buyers were also active this week showing continued interest on both Dairy and Plump Cows. Dairy Cow demand was enough this week to keep prices steady. The poorer grading origin Plump cow hides, both branded and native, also benefitted from the interest mentioned at the top of this report. The result were small increases from the last booked prices, unfortunately the current prices still do not cover processing costs, so these selections continue to result in a loss to packers and processors.
Below is our feeling as to the current FOB plant values of seasonal average weight Big Packer Steer hides:
– Heavy Native Steer hides at $39.00 per piece, unchanged for the week.
– Butt Branded Steer hides at $36.00 per piece, unchanged for the week.
– Heavy Texas Steer hides at $27.00 per piece, unchanged for the week.
The USDA’s Export Sales Report for raw and wet blue cattle hides was released last Thursday, September 26th for the week ending Thursday, September 19th. The report showed that 586,700 pieces were sold for export during that week. This number is down slightly from the 607,700 pieces reported sold the prior week. China was again the number one buyer taking 349,700 of the pieces sold.
The USDA estimated Federally Inspected Slaughter (FIS), for the week ending Saturday, September 28, 2019, was 648,000 head of cattle. This number is down from the 658,000 processed during the like week a year ago. Year to date the estimated FIS is up 1.1 % from a year ago.
This week is Golden Week in China from October 1-7th so we must expect a rather quiet week as our biggest buyer of US hides celebrates their countries Independence Day. As is usually the case, some tanners will still be available during the holiday so we do expect there will be business done this week. The previous three weeks saw respectable export sales numbers and we expect that trend will likely continue since it seems tanners still need to fill some raw hide inventory needs. That and the fact that packers/processors find themselves with well sold ahead positions, give us confidence to say that the hide market will show no sign of weakness this week even in the face of the Chinese holiday week.
A guy returns home from having played eighteen holes and is beaten up badly.
“What the hell happened to you? Asks his wife.
“It was my day to keep score!”