HIDE MARKET UPDATE
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 hideprices 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.
May 8 2017
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.
August 29th 2017
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
October 16 2017
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 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.
11/21/17 Winter Market update
Beef: The beef hide market continues it's downward trend in search of a bottom. The market is still waiting for finished leather sales to improve.
Deer: We are still waiting for the market to develop. We anticipate the market to open within a dollar of last year.