Last week started out as a wind-down week for all who participated in the North American hide market. With the Chinese and most of the other Asian tanners shutting down or preparing to shut down for their Lunar New Year holidays, things were bound to slow. Offerings from U.S. raw and wet blue hide suppliers went out as normal last Monday and Tuesday. The majority of those offer lists contained fewer-than-normal items/selections/quantities, with shipment periods far out. Tanners’ initial reactions to those offerings were limited. There were far fewer tanners submitting bids, and if any of those bids were at higher than last quoted levels, they were few and far between. Then, by last Wednesday, the news about the coronavirus outbreak in China began to become an international issue. By the end of the week, Chinese officials had quarantined 35 million of their citizens to contain the virus. The Chinese government also announced they would be extending the official New Year holiday by another week to February 6th. With all businesses being closed in China, Korea, Taiwan and Thailand by last Thursday and Friday for the Lunar New Year holidays, we heard little to nothing from tanners in those countries by the end of last week. Last week’s cattle slaughter number here in the U.S. remained well above the 600,000-weekly number and Packer profit margins improved from the prior week. Last week’s report from the USDA’s on the number of U.S. raw and wet blue hides that were traded during the week ending Thursday, January 16th. was a big one. This, we believe, is at least partially the result of late reporting caused by the Christmas and New Year’s holidays here in the states.
Here are our current per piece FOB plant price quotes for Big Packer Hides of seasonal average weight:
- Heavy Native Steer hides at $39.00 to 40.00 per piece, unchanged for the week.
- Butt Branded Steer hides at $36.00 to $36.50 per piece, up $ .25 for the week.
- Heavy Texas Steer hides at $27.00 to $28.00 per piece, up $ .50 for the week.
USDA released its Export Sales Report last Friday for the 7-day period ending Thursday January 16, 2020. The report showed that a net 645,500 raw and wet blue U.S. hides sold during that week. That number is up from the 391,800 pieces reported to have sold the prior period. China was the biggest buyer destination booking 267,600 pieces or 41.5 percent of the total sales. Italy was the second-place buyer purchasing 104,000 units, most of which were wet blues. The period’s exports/actual shipments came in at 630,200 pieces.
The USDA estimated Federally Inspected Slaughter (FIS), for the week ending January 25, 2020 was 647,000 cattle. That number was up from the prior week’s estimate of 631,000 head. Year to date FIS is down 3.2 % from last year.
This week, activity in the U.S. hide market will, for sure, start off at a slow pace. Most of the Asian tanners will remain closed, for at least the first couple of days this week, in order to wrap up their Lunar New Year holidays. The holidays in China will keep most of the tanneries there closed all the week. That does not mean that those in charge of buying raw material for tanneries won’t be watching the hide market, and there is nothing the winding down of the holidays that would keep them from entering the market, if they were so inclined. This week’s big unknown is the coronavirus. We are hoping and praying that world’s health officials can get their arms around this virus, and quickly.
“When people ask me my address, I tell them 747 Boeing.”
- Robert Trent Jones, on traveling around the world designing new golf courses.