Business in the U.S. hide market picked up a bit last week after a rather slow New Year’s holiday-shortened week. Buyer interest was spread over a good number of destination countries, an encouraging fact to suppliers. The interest was pretty much across the board, meaning for all selections. After the normal back and forth between buyers and sellers, one asking for higher prices and the other bidding lower than the last traded level, some business was put together. Sale prices on the Packer Plump Branded Steer hide selections remained in their prior trading ranges. But, suppliers of Plump Heavy Native Steer hides saw more interest last week. As a result, those suppliers were able to move the value of the Native Steer up just a touch. Dairy Steer and Dairy Cow hides remained in good demand. However, with most suppliers in well sold ahead positions, not much business was put together on either selection. And, the few Dairy type hides that were sold were all booked at prices steady to up $1.00 from their last contract prices. Trading of Plump Native and Branded Cow hides seemed to be subdued, mostly because suppliers who claim to be well sold would not accept tanners steady bid prices. Sellers of the poor grain quality Branded Cow hides, whose market values have not covered their processing and handling cost for some time now, were able to get some tanners to increase the prices paid for those hides. In some cases, those sale prices came up to levels which would cover those costs of production. Beef packers per head profit margins continued their downward movement last week. But, that decline in margin did not appear to have an effect on the week’s cattle slaughter number as reported by the USDA. As for the USDA’s last week’s report of Export Sales for raw and wet blue U.S. hides for the week ending Thursday, January 2nd we found it too confusing to be of value.
Our current per piece quotes for the FOB plant prices of seasonal average weight Big Packer Steer hides are as follows:
- Heavy Native Steer hides at $39.00 to 40.00 per piece, up $0.50 for the week.
- Butt Branded Steer hides at $36.00 per piece, unchanged for the week.
- Heavy Texas Steer hides at $26.00 to $28.00 per piece, unchanged for the week.
Last Thursday the USDA released its Export Sales Report for the 7-day period ending January 2, 2020. The report was so convoluted that we could not make any sense of it. So, we are unable to give you, at this time, the net export sales of raw and wet blue hides, made during that period.
The USDA estimated Federally Inspected Slaughter (FIS), for the week ending January 11, 2020 was 640,000 cattle. That number is up from the previous holiday shortened week’s estimate of 546,000 head processed.
Many of the Chinese tanners began their Lunar New Year holidays as of this week and many will not open their factories until the week of February 3rd. Other Asian countries, Taiwan, Korea and others will also be shutting down for the holidays next week as well. On whole, U.S. hide suppliers claim to be comfortably sold ahead and well prepared for the expected slowdown in market activity over the next few weeks. That does not mean that there will not be hides traded during these holidays. The individuals in charge of raw material buying for these tanneries will, for sure, be in contact with suppliers. We believe they will at least be watching the hide market, looking for a opportunity to cover their future needs.
“Golf may be … a sophisticated game. At least, it is usually played with the outward appearance of great dignity. It is nevertheless, a game of considerable passion, either of the explosive type, or that which burns inwardly and sears the soul.”
– Bobby Jones