United States – Sales and prices are flowing, but downhill
Published: 18 Mar, 2020
The slaughter production rates continue unabated, unlike other major beef producing nations who have cut back on production until normal service can be restored with China and other Asian countries. This causes a major headache for the hide industry, with China bidding lower all the time and Italy now cutting back production as the country is placed into lock-down, suppliers are fast running out of destinations to sell their material at levels that make many grades economically viable. As is to be expected there are plenty of rumours circulating about the prices that have been taken. Reports in China are that heavy Texas steer hides have been sold between US$20-25/piece; on the other hand there are reports that butt branded steer hides have been sold in good volumes at over US$30.00/hide. The one thing that all can agree on is the price of cows, which had steadily risen from the lows of 2019, now find themselves plunging back towards those levels. Tanneries in the Hebei province of China, have reportedly been buying U.S. cowhides this week in large volumes, as they see value in the current price and need to re-stock their inventories.
The on-going problem of securing letters of credit are reported to be another headache for traders, which Chinese banks being particularly slow to process due to a back-log of work built up during their enforced close-downs. Some cowhide selections are once again teetering on the edge of not being economical to trade, so it could be we see a return to more of these and the lower grade male hides being sent to render or landfill.
Wet-blue pricelists have seen further downward adjustments, with another US$2/hide shaved off the previous level across the board. Since mid-January, that is before the Chinese New Year holidays and the news of the Covid-19 reaching the market, quotations have come down US$7-9/hide on all selections, losing about 13-15% of their value. To read more click here.