After a pretty good run over the last 4-6 weeks, activity in the U.S. Hide Market slowed last week. For weeks prior to last, there were a good number of U.S. raw and wet blue hides sold by suppliers. That run of business had been verified by the recent Export Sales numbers which are released by the USDA weekly. A good portion of those recent sales are attributed to the Chinese shoe leather tanners as they have been working their way through their annual, historically, busy period. That business, in our mind has been the stimulus for the very steady U.S. Plump Branded Steer/Heifer hide prices we have witnessed over the last eight to ten weeks. But, over the past 2 weeks, we have begun to see demand from the Chinese shoe leathers start to slow. Sale prices for the Plump Branded Steer hides that were sold last week were steady to down a maximum $1.00 per piece. We did see good buyer interest in Holstein Steer hides this past week. However, suppliers have stated they are too far oversold on this selection and did not offer any Holstein Steer hides. As far as we know, they turned down any unsolicited bids without so much as countering. U.S. Cow hide values remained unchanged last week. Producers of Holstein Cow hides saw enough interest in their productions to enable them to keep their sale prices steady to slightly higher. US Plump Cow hide prices remained pretty much unchanged on fair interest. Still there were tanners bidding on Branded Cows at levels that really felt like they were on fishing expeditions, and suppliers did not accommodate such prices. The Export Sales number for U.S. raw and wet blue hides released last week was another good number to add to the run of good sales numbers the last several weeks. Due to a lack of activity last week, when the export sales numbers are released, they won’t be as good as we’ve seen the previous 4-6 weeks. Beef packers’ per-head profit margins increased last week as Federally Inspected cattle slaughter came in at a number that we do not expect to be equaled for the rest of this year.
Following are what we are calling the per piece FOB plant prices for seasonal average weight Big Packer Steer hides:
- Heavy Native Steer hides at $38.00 per piece, down $ .50 for the week.
- Butt Branded Steer hides at $35.00 to $36.00 per piece, down $ .50 for the week.
- Heavy Texas Steer hides at $26.00 to 27.00 per piece, unchanged for the week.
The USDA, last Thursday, released its Export Sales Report for the week ending Thursday, November 7th. The report stated that 603,100 raw and wet blue cattle hides were sold for export during that week. This number is somewhat higher than the 567,400 pieces reported to have been sold the previous week. China was credited with buying 398,700 of the pieces sold. This translates to about two third of the pieces sold during the period, which is a big chunk.
The USDA estimated Federally Inspected Slaughter (FIS), for the week ending Saturday, November 16, 2019, came in at 657,000 head of cattle. This number is higher than the 651,000 head reported harvested during the prior week.
Our expectations that the U.S. hide prices could move a little higher last week, just did not occur. This week cattle slaughter here in the U.S. will decline. We are heading towards our Thanksgiving Day holiday here in the States next week and normally during the week prior to this holiday the cattle slaughter declines. Not that we expect that a lower slaughter number will set the hide market on fire, but it can’t be a negative for hide values. Hoping all have a great week.
CADDIE TO GOLF
“Your game was so bad today that if it had been a prizefight, they would have stopped it.”