The All China Leather Fair is now behind us, so we can ask ourselves what did we come away with as far as knowledge about where the leather business and hide market are headed this fall? Well, we can not say we know much more than we did prior to the ACLE. Reports from the show, and immediately after, varied depending who you spoke with. Some of the U.S. hide suppliers saw the show as fairly-well attended and active, others did not think either was the case. The variance in these perceptions most likely had something to do with what type of hides the purveyor had to offer. If one were a supplier of U.S. Steer/Heifer hides, or some of the more highly thought of Native Dairy or Fed Plump Cow hides, then he found interested parties. That’s not to say that any of those parties had interest in paying higher prices, but there was interest to buy. On the other hand, if the individual was offering less desirable Branded Cow hide origins or lower quality material, such as Small Packer or Number Three grade hides, he found fewer- if any- tanners showing buying interest. Overall, it did not appear that a big number of hides changed hands last week, either at the show or elsewhere. The business that was put together last week was done at steady money. Of course, there were reports of some U.S. Steer hides being moved at slightly higher prices and some that were done at prices that could be called down $1.00. Before the show, many tanners said they would hold off buying any hides until after the ACLE. As they explained, they were hoping to get a better idea about the finished leather business before purchasing any raw material. U.S. Steer hide sellers for their part seemed to be content with that approach by tanners, not showing any push to move product.
The following is our take on where the FOB plant prices for some of the seasonal average weight Big Packer Steer hide selections finished up last week.
- Heavy Native Steer hides at between $55.00 and $56.00 per piece, down $1.00 from the prior week.
- Butt Branded Steer hides at $45.00 per piece, down $1.00 from the prior week.
- Heavy Texas Steer hides at between $34.00 to $37.50 per piece, up $.75 for the week.
The Export Sales Report released by the USDA on August 30, 2018, for the week ending Thursday August 3rd stated that 546,400 whole cattle hides, and wet blue equivalents were sold for export during that week. This number is up from the 440,500 pieces reported to have sold during the prior week. China was the big buyer purchasing 298,800 pieces of raw and wet blue hides which amounted to 55 percent of the sales. Even more positive for U.S. suppliers was the export/shipment number which came in at a healthy 678,800 units.
The estimated Federally Inspected Slaughter, (FIS) of cattle in the U.S. for the week ending Saturday, August 25, 2018, was put at 635,000 head, almost identical to the prior week’s 636,000 head processed. Year to date FIS is up 2.9% from a year ago.
Some U.S. hide suppliers will still be traveling in Asia this week after attending the All China Leather Exhibition (ACLE). Maybe they will have better luck selling their wares than those calling on tanners before the ACLE. That could well depend on how their tanner customers feel about their finished leather business as they return to their offices after the Shanghai show. On the supply side, we expect no meaningful change in U.S. weekly cattle slaughter number for the near term. We expect no changes in the offering prices that tanners will receive from U.S. raw and wet blue hide suppliers this week. Our feeling is that the values of the U.S. Steer hide selections will remain unchanged for the most part. On the other hand, we feel that the U.S. Cow hide selections have a good chance of moving up at bit from their currently low levels. Hoping tanners do feel better about their business and that all those still traveling return home safely.
“To control your mind and body throughout a round of golf with all its pressures and frustrations is probably the single biggest challenge in golf.
– Greg Norman