We expected activity in the U.S. Cattle hide market to pick up last week, and it did to a small degree, but we did not see as much trading as we thought would take place. Most of the European tanners, raw material suppliers, and others who exhibited at or attended the Lineapelle Fair in Milan were back at their desks last week. Chinese tanners also returned to their offices on Tuesday after wrapping up their week-long “National Day” holidays. Korean tanners were closed last Wednesday observing their “National Language Day” holiday, but the one-day shutdown should not have affected their hide procuring intentions to any degree. Taiwan was on holiday Thursday and Friday of last week, but they have not been a major factor in the hide market for years now. Tanners will admit that they can make profits on the finished leather they sell. They preface that statement by saying that, because of the lack of finished leather orders, they are running at levels far below full production. The fact remains that the current level of demand for leather does not match the current worldwide supply of hides. We don’t know what percentage of the world’s cattle hide production is not turned into leather, but the number of hides disappearing from the market is still growing. By the end of last week, there were a fair amount of U.S. raw and wet blue hide sales confirmed. Prices on U.S. steer hides were mostly steady, but any trade that was not steady was down slightly. U.S. Cow hide suppliers who did sell hides last week, like U.S. Steer hide sellers, found no buyers last week willing to pay more than last traded levels.
The Export Sales Report released last week by the USDA for the 7-day period ending Thursday, October 3rd was a very respectable number when one considers the fact that it was a big holiday week in China and Korea.
Following are our quotes for the current FOB plant prices for the seasonal average weight Big Packer Steer hides:
– Heavy Native Steer hides at $39.00 per piece, unchanged for the week.
– Butt Branded Steer hides at $36.00 per piece, unchanged for the week.
– Heavy Texas Steer hides at $27.00 per piece, unchanged for the week.
The USDA’s Export Sales Report for raw and wet blue cattle hides was released last Thursday, October 10, 2019 for the week ending Thursday, October 3rd. The report showed that 539,100 pieces were sold for export during that week. This number was down from the 786,600 pieces reported sold during the previous week. The big buyer was China purchasing 216,200 or 40 percent of the pieces sold. Number two buyer was Korea with 76,330 pieces booked.
The USDA estimated Federally Inspected Slaughter (FIS), for the week ending Saturday, October 12, 2019, was 645,000 head of cattle. This number is down from the 647,200 head processed during the corresponding week a year ago. Year to date the estimated FIS is up 1.0 % from its year ago level.
On Friday of last week there was some encouraging news reported regarding the trade negotiations between the U.S.A. and China. As we understand it, the tentative agreement includes the delaying of the scheduled October 15th tariff increase, which bodes well for the December 15th tariffs that would affect hides, which may also be delayed. This progress can only be a positive for the U.S. hide market. The effects of this information may not be seen immediately, but it will come in time and will be a positive. Have a great week.
Golfer to his partner who just lost another ball in the water hazard:
“Too bad you don’t sink putts as well as you sink your drives!”