We can’t say exactly what created more interest in U.S. Branded Cow hides, but the interest was there last week. All involved in the hide and leather business know that the FOB plant value of some of the Branded Cow hide productions has been, for months, below processing costs. Over the last couple of weeks tanners have come into the market and as a result raised the FOB plant value of those Branded Cow hides up to breakeven levels. The U.S. hide market was active last week, but the week’s sales of the raw and wet blues did not match production from what we could tell. That was the result of a very good-sized weekly slaughter number which was one of highest reported this year. There has been a balance between supply and demand which has kept the plump steer hide prices within a narrow trading range and last week was no exception. This balance of supply and demand is the only plausible explanation that we can come up with to explain this phenomenon. As we have mentioned before commodity markets like to move up and down, not be static. Decent demand for U.S. Dairy Steer and Cow hides continued last week but, outside of a few cases in which suppliers could get small increases, sale prices were what we would call steady with last traded levels. On a whole, tanners everywhere do concede that their business is a little better. The auto upholstery tanners say things are a little slower for them and they expect that trend to continue into nest year while furniture, handbag and shoe upper tanners say business has picked up a little for them as of late. However, they caution that they expect things to slow the first part on next year. Last week’s USDA’s Federally Inspected U.S. Slaughter number for Cattle was a slightly larger number than the week before last’s and one of the biggest.
Our current per piece FOB plant price quotes for seasonal average weight Big Packer Steer hides are as follows:
- Heavy Native Steer hides at $38.00 per piece, unchanged for the week.
- Butt Branded Steer hides at $35.50 per piece, unchanged for the week.
- Heavy Texas Steer hides at $26.00 to $27.00 per piece, unchanged for the week.
Last Thursday the USDA released its Export Sales Report on U.S. Cattle hides for the week ending Thursday, December 12th. The report stated that combined U.S. export sales, for shipment this year and next, to be 483,300 raw and wet blue U.S. cattle hides. This number is down considerably from the 706,800 pieces reported to have been sold during the prior week. China remained the number one buyer, booking 340,700 or about 56 percent of the sales.
The USDA estimated Federally Inspected Slaughter (FIS), for week ending December 21, 2019 to be 668,000 cattle. That number was up a tad from the previous week’s estimate of 662,00 head. Year to date, FIS is an estimated 32,361,000 cattle which is 1.1 percent above last year’s level.
We look for this week to be a slow one for the U.S. hide market. It’s a holiday week and all hide suppliers here and many of the customers/buyers of our U.S. origin hides will also be down for all or a good part of the week. It also appears from the most recent offer lists that most U.S. hide suppliers are in well sold ahead positions and will feel no real pressure to move product during this holiday week. Due to the holidays this and next week slaughter numbers will be down, again reducing pressure on sellers to move hides. Merry Christmas/Happy Hanukkah to all.
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