HIDE MARKET UPDATE
Comparing Real and Faux Leather
Below you will find a snippet from an Ebay write up discussing real leather versus faux. (Full article here) Each type has many different qualities with both advantages and disadvantages. At Grand Rapids Hide we strive to educate our customers with not only hide updates but any pertinent information related to our industry. When considering a leather purchase ensure you know all the facts. Cheers!!
Advantages of Authentic Leather
There is nothing like the smell and feel of real leather. Real leather gives an aura of luxury and prestige. Because no two animal hides are exactly the same, each piece of authentic leather has unique natural characteristics. The leather becomes softer and more attractive over time, which makes it more comfortable. Leather also has a soft, yet strong texture, making it hard-wearing. Many real leather products are also treated to help prevent stains. Leather is easy to take care of when maintained properly; it only needs a regular wiping with a clean, damp cloth.
Disadvantages of Authentic Leather
Real leather is much more expensive than its counterpart. If leather is in constant sunlight, the color may fade. Leather is very porous and absorbent, so drops of liquid will quickly soak into the item if not wiped up promptly. If the leather is not protected, this can result in a stain.
Advantages of Faux Leather
Faux leather has a similar look and feel to genuine leather, while being much more affordable. Some people prefer faux leather simply because no animals are harmed in the making of the material. Faux leather is made from a machine, which ensures that the fabric has an even, consistent color throughout. It can also be dyed into many different colors, and is usually fade resistant.
Disadvantages of Faux Leather
Faux leather has about a third of the life span of real leather. It cracks and splits much easier than real leather, and becomes more uncomfortable over time. It does not develop luster like real leather. Faux leather is very thin and does not offer the warmth of real leather. It also smells like plastic or rubber.
August End 2018
Beef Market: The beef market continues to drift in a sideways pattern. We are praying the bottom is here and prices will firm up as we move into the fall season.
Deer Market: The deer market typically develops every year around the January time frame. It is very early, but our best guess after talking with the remaining buyers of deer hides in the world, is that prices will be 2-3 dollars less than last years' mark. Rumor has it that China is imposing a tax on deer hides and will not allot raw hides into the country from the US. If this is true it presents a major challenge for us all, especially on all "off" deer grades. We will update you as this important issue unfolds.
Also an important note: We have been in the deer hide business for many years and traditionally the grade board for hides has always been 7.5 square feet for a #1 Deer hide. This year our spec will be moving to a grade board of 8 square feet for a #1 Hide. The new standard will be recognized by the buyers of deer hides around the world.
It seems we have been combating down prices all summer and will continue to scratch and claw our way through this bearish market. We are hopeful that prices will eventually stabilize, but news that China will potentially be imposing a 5% tariff on all imported beef hides puts a slight damper on our optimism. We will be monitoring the market closely to see what impact this has, if any in the weeks to come. On a positive note, it seems that leather orders have picked up slightly. With luck perhaps this trend will continue.
The hide market continues to slowly unwind this summer in search of a price bottom. The largest user of leather is the footwear industry accounting for over 50% of leather demand. The root of the problem seems to be the end user. Ethically conscious shoppers are choosing leather alternatives in the form of synthetic cloths, faux leather and various plastic products. Dress codes also continue to loosen allowing for a more casual look in the work place. This in turn has consumers getting away from leather dress shoes and utilizing more sneaker type shoes which contain more synthetic materials. We hope and pray that leather shoe designers will get creative with new leather shoe designs that will appeal to the ever-changing trends of the retail consumer. We are confident the market will bounce back, but it is a question of when? A nice article by Bloomberg was written in June that helps summarize the current situation.
Beef: The beef hide market continues to drift lower in search of a bottom. Hopefully the Asian leather show which is currently in progress in Hong Kong will give us some direction in future pricing. The issues we were facing last fall are still relevant.
Beef / Post Hong Kong Leather Show: In our opinion, sales at the Hong Kong leather show could be summed up in one word; disappointing! bids were $3.00 to $5.00 dollars less than they were before the show! We believe the hide market is still in a corrective phase and it may continue for quite some time. One Tanner informed us they were buying South American salted hides for$17.00 U.S. Dollars. If this is the case we are a long way from the bottom. He further stated that his finished leather customers could deal with the quality issues for the price difference.
"Fake" Leather also continues to be substituted for "Real" leather. "Fake" leather is uniform and free from defects such as "score" marks.
In summary we continue to believe at some point the hide market will reach a bottom and reverse course. At what level is the real question?
We have yet to experiece the traditional "Fall hidemarket rally". This is due to several factors:
USDA reported kill numbers from large packers are still running above normal.
Imitation leather continues to gain market share.
People are wearing cloth tennis/sport shoes instead of leather, or penny loafer style footwear.
Our curent relationship with China and North Korea is a bit strained. Currently a large share of our production is going to Mexico.
Our forecast for the near term is that prices will drift lower or at best, move in a sideways direction until demand for tanned leather exceeds the supply of raw hides.
Deer: Currently the deer hide is in the very early stages of being developed. Preliminary reports indicate that "at best" prices will be sideways or in the "worst case" they will be two dollars down. We hope the Italians will come back in the market this year. If they do not, we will be at the mercy of the Chinese who have ample inventory left over from last year. Our biggest opportunity this year is to give the "high end buyers" a "score free" hide. This is an option they have wanted for years. If you can produce a "score free" hide by using a puller or your elbow and being very careful with the knife on the belly, rump, and neck, you will receive "top market pricing"! The buyers who produce premium deer skin want to start with a premium "score free" hide. Other hides will fall into shoe and gloving leather and be tanned in China. Please call us if you have any questions regarding this option.
Contact us for more information.
BEEF: Beef hide prices have continued to drift lower in July and August. The tanneries continued to blame lack of demand
as the primary reason for lower prices and on small packer selections, heat damage to hides was an
issue. During July prices dropped one to two dollars. We expect prices to continue to drift sideways, but hopefully Fall will put some life back into the hide market.
Deer: We have started to receive a few inquires about speculative pricing for this falls deer hide market. As of right now the market has not show any sign of where demand for deer hides will be. We will keep up on any updates and inform you as soon as we have information.
Notice: The DNR has released important new regulations on out of state hunting and bringing big game back into Michigan. Here is the link.
NOTICE: Attention all Deer Processors: The national resources commission signed a new order in June of 2017 that requires any commercial processor who excepts wild game for processing and storage to register for a free permit. To register please visit: www.michigan.gov/wildlifepermits For questions or help with registration please call 517-284-9453.
Casey M. Reitz / DNR Wildlife division permit specialist
NOTE: We have just shipped our last load of deer out of the warehouse and will no longer be excepting deer until next Fall. Thank You for a wonderful season!
Last Week we witnessed the largest one week drop in large packer beef hide prices in modern history. Bids for large packer steers dropped three to five dollars. Weekly sales were up as large packer slaughter houses began to sell their existing hide inventory. There are several reasons for the decline.
- Demand for leather has slowed while man made leather continues to gain market share.
- Many tanneries in China are being forced to shut down or close to upgrade as the China EPA equivalent imposes the new Chinese regulations on them.
- Global shipping rates have increased.
The market currently has a bearish tone to it and we see more weakness for the short term.
At this point, our buyers still have ample inventory of tanned deer hides from last year. As a result of the large inventory carry over from last year, we anticipate prices to be a couple of dollars less this year. Tanneries find it hard to justify paying $11.00 for a deer hide with a hole in it when they can purchase a good calf hide for $5.00. This is not good news but it will give processors time to review processing fees and adjust them if necessary.
The Shanghai Leather Show is over with fewer attendees than last year and it is back to business as usual. As far as pricing is concerned, it was a “non-event”. Synthetic leather, lack of demand for finished goods, ample supply of raw material and the Chinese economy have held raw hide prices in a narrow trading range. We have been pleasantly surprised by the demand for raw beef hides from Mexico this summer. Shipments to Mexico have replaced some of our Chinese business. Mexico has a stable shoe leather market and their auto industry has experienced strong growth. The only near term challenge with the Mexican market is the weak peso. On a global basis, especially South America, there is an ample supply of beef hides at very reasonable prices for tanneries to choose from. Our market has been in a sideways trading pattern all Summer and we anticipate this pattern to continue into the Fall season.