Things did not go smoothly in the U.S. Hide Market last week. It will be interesting to see the USDA Export Sales report this coming Thursday for hides and wet blue sales contracted last week. There seemed to be wide price ranges for a good number of sales reported or rumored sold. Sellers for the most part were more concerned with shipping product sold, than they were interested in new sales. There were many cases in which shipping outstanding contracts and new sales were closely connected. The noise coming out of China was the same old tune that we have been hearing for weeks on end. Poor domestic leather business, cash flow, and bank credit problems, along with a weak split market were the main complaints. It has to be believed that a good portion of the crying is understandable and undoubtedly due to the market related issues. By weeks end, there were also a good number of questionable claims and L/C opening delays being accredited to Korean buyers, who seem to have learned from their Chinese counterparts. At the end of the week the reported FOB plant price for Big Packer Heavy Native Steer hides, depending on origin, was between $ 80.00 and $ 85.00 per piece. Big Packer Butt Branded Steer hides were quoted at between $ 78.00 and $ 82.00 per hide FOB plant basis, while the various Big Packer productions of Heavy Texas Steer hides were said to have sold at levels between $ 70.00 and $ 72.00 per piece FOB plant. Cow hide sales seemed to be limited in number, particularly for the Plump selections. The Dairy Cow hide selection did attract some buyer interest with a fair number of sales consummated; however, prices were $ 2.00 to $ 3.00 per piece lower than prior week’s levels.
The Export Sales Report released by the USDA on June 25, 2015 for sales made during the week ending June 18, 2015, showed that 548,200 cattle hides and wet blue equivalents were sold for export. This number was up 13 percent from the previous weeks reported sales of 477,100 pieces. China was the big buyer, purchasing 385,200 units.
The Federally Inspected Slaughter (FIS) for the week ending Saturday June 27, 2015 was estimated to be 555,000 cattle, up slightly from the previous week’s estimated FIS of 549,000 head. The FIS for that same week last year was 614,105 animals. Year to date the FIS is down 7.5 percent or 1.109 million head.
This will be a shortened sales week, with Friday being designated as a National Holiday here in the U.S.A. observance of our July 4th, Independence Day. However, we expect that more than selling hides, U.S. hide producers, processors, and traders will be more interested this week in getting shipping schedules confirmed, and buyer’s L/Cs opened. It is reported that the U.S. cattle slaughter number (FIS) peaked last week at an estimated 555,000 head, down more than 10 percent from the same week a year ago. This week’s FIS of course will be down dramatically due to the National Holiday here. Further we understand that going forward, well through the summer months, the FIS will remain well below a year ago levels. So, any further decline of hide prices will be directly related to demand. The contractual performance by some Chinese tanners and less reliable Korean tanners may also affect the market. We all know that markets fluctuate both up and down, but the fact remains that there are fewer suppliers of U.S. cattle hides than there are buyers.
- It’s as easy to lower your handicap as it is to reduce your hat size
- One birdie is a hot streak
- The putt breaks the other way