With China on holiday all last week as they celebrated the 70th anniversary of the Peoples Republic of China, and with Korea closed last Thursday for its National Foundation Day, things were slow for the U.S. hide market. U.S. raw and wet blue hide suppliers did put out their offering lists last week as they normally do on Mondays or Tuesdays. Some of those lists contained fewer selections while others showed more items. The pricing on those lists also varied from supplier to supplier, and in some cases the asking prices were down to levels that were closer to actual market prices. The market prices have not changed to any degree over the last 6 to 8 weeks. Despite the holidays at the number one and number two export destinations for U.S. raw and wet blue hides, there were bids placed by tanners in those countries. From our vantage point, it appeared that most of those bids were not up to last traded levels, and with suppliers being comfortable with their sold ahead positions they passed those lower bids. We for sure do not think a lot of U.S. hides changed hands last week but any business that was put to together we suspect was done so at steady prices. The Export Sales Report released last week by the USDA for the 7-day period ending Thursday September 26th was one of the largest of the year. That reported number was bolstered by Chinese tanners purchasing U.S. raw material that was to be delivered to China prior to December 15th , the date the threatened Chinese additional 5 percent import tariff on U.S. hides is scheduled to take effect. The reports from Milan regarding this week’s Lineapelle Fair were mixed, good attendance, with tanner’s booths being busy. But tanners continue to share that leather orders so far this fall are below their hoped-for expectation.
Below is our feeling as to the current FOB plant values of 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 3, 2019 for the week ending Thursday, September 26th. The report showed that 786,600 pieces were sold for export during that week. This number is up from the 586,700 pieces reported sold the prior week. China was again the number one buyer taking 495,500 or 63 percent of the pieces sold. Korea was the next biggest purchaser for the period with 97,000 units purchased. In third place was Mexico which booked 70,500 pieces.
The USDA estimated Federally Inspected Slaughter (FIS), for the week ending Saturday, October 5, 2019, was 639,000 head of cattle. This number is down from the 648,000 processed the prior week. Year to date the estimated FIS is up 1.1 % from a year ago.
Although Korea will be shut down on Wednesday as they observe their National Language Day holiday and China is still down today as the take the last day of the National Day holidays, we still expect the U.S. hide market will be much more active this week than last, when China was on holiday all week. We look for this week’s supplier offer lists to mirror their last week’s lists. Tanner’s responses to those offers is a little more difficult to predict, but we do expect a good deal of trading to take place. Have a great week.
“It’s a marriage. If I had to choose between my wife and my putter—I’d miss her.”