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The Week at a Glance

• Zero orders for cows and bulls. Southern German cows at €0.70/kg, bulls at €0.90/kg
• Price of Irish 36+ is €0.65/kg
• Dutch calf ranges between €3.50 and €4.50/kg
• Raw stock week 21. Sharp drop in work, some tanneries cut work shifts by half, others leave employees at home. Automotive under 30%, and worse for fashion and furniture. Requests to review already signed contracts.
• Currency market: $1.090/Euro, £0.894/Euro on 05/22
• Global – Consumption will start again with social shops
• Italy – Roberto Cavalli, transfer from Florence to Milan begins
• Italy – Mandarin bought ABC
• France – Dior requests patent for saddle bag
• Italy – Furniture’s Luxury Living Group sold to Lifestyle Design
• Italy – Cucinelli relies on a couple of CEOs
• Italy – Micam to be held in September
• France – Renault plans to close 4 French facilities

 

Click on a headline to go directly to that item

Click here to read this report in Italian

 
 

 

 

PRICE SURVEYS

 
 

Survey of UK and Irish Ox/Heifers

*UK prices in GBP, Irish Prices in Euros, delivered North Italian tannery, payment terms 30 days

	This Week		Last Week 05/15/2020
OX/HFRS	UK	Ireland	UK	Ireland
36.00 and up	0.70-0.75	0.65-0.70	0.70-0.75	0.65-0.70
31.00 – 35.50	0.80-0.85	0.75-0.80	0.80-0.85	0.75-0.80
26.00 – 30.50	0.90-0.95	0.85-0.90	0.90-0.95	0.85-0.90
25.50 and under	1.00	0.95-1.00	1.00	0.95-1.00

 
 
 

Survey of the European Cow Markets

*All prices quoted in Euros/kg. on 30/32kgs. delivered North Italian tannery, payment 30 days

Cows	This Week	Last Week 05/15/2020
N. German 25 kg and up	0.45	0.45
N. German 15-24 kg	0.50	0.50
S. German 40 kg and up	0.70	0.70
S. German 30-39 kilos	0.65-0.70	0.65-0.70
French Bretagne 32 kg and up	0.85-0.90	0.85-0.90
French Bretagne 32 kg and under	0.80-0.85	0.80-0.85
Central French 32 kg and up	0.65-0.70	0.65-0.70
Central French under 32kg	0.60	0.60
Italian	0.30-0.35	0.30-0.35
Dutch	0.45	0.45
Poland 26/27 kg*	0.45-0.50	0.45-0.50
Sweden*	0.70	0.70
Spain*	0.55	0.55
Finland*	0.50	0.50
Norway 17+ (av 24 kg)–*	ND	ND

*delivered Northern Italian tanneries
 

Heifers	This Week	Last Week 05/15/2020
N. German 25 kg and up	0.65	0.65
N. German 15-24 kg	0.70	0.70
S. German 40 kg and up	0.80-0.85	0.80-0.85
S. German 30-39 kilos	0.90	0.90
S. German 24-30 kilos	1.10	1.10
S. German 15-24 kilos	1.15	1.15

 
 
 

Survey of Dutch Veal Skin Market

*All prices quoted in Euros/kg. delivered North Italian tannery, payment 30 days

Weight	This Week	Last Week 05/15/2020
14.5 kgs	3.00-4.00	3.00-3.50
16.5 kgs	3.50-4.50	3.30-3.60

 
 
 

Survey of French Veal Skin Market

*All prices quoted in Euros/kg. delivered North Italian tannery, payment 30 days

Weight	This Week	Last Week 05/15/2020
13+ kgs (Luxury)	5.50-5.80	5.80-6.00
13+ kgs (Black and White)	4.50-5.00	4.50-5.00
8-12kgs (Luxury)	4.60-5.20	4.60-5.20
8-12kgs (Black and White)	4.00-4.50	4.00-4.50

 
 
 

Survey of Italian Veal Skin Market

Weight	This Week	Last Week 05/15/2020
18kg and up	2.50-3.00	2.50-3.00
18kg and under	2.20-2.50	2.20-2.50

 
 
 

Survey of European Bull Markets

*All prices quoted in Euros/kg. delivered North Italian tannery, payment 30 days

Origin	Avg. Green Wt.	This Week	Last Week 05/15/2020
French – Central French – Bretagne	37 kilos and down 37 kilos and down	0.85-0.90 1.00-1.05	0.85-0.90 1.00-1.05
French – Central French – Bretagne	37 kilos and up 37 kilos and up	0.90 1.05-1.10	0.90 1.05-1.10
N. German	30.0 – 39.0 kgs	0.60-0.65	0.60-0.65
N. German	40.0 – 49.0 kgs	0.65-0.70	0.65-0.70
S. German	40.0 – 49.0 kgs	0.85	0.85
S. German	50.0 kilos and up	0.90	0.90
Benelux	30.0 – 39.0 kgs	0.60	0.60
Benelux	40.0 – 49.0 kgs	0.65-0.70	0.65-0.70
Italy	40 kg and up	0.50-0.55	0.50
Spain	40 kg and up	0.70	0.70
Poland*	40 kg and up	0.70	0.70
Sweden*	34 kg and up	1.20	1.20
Norway*	34 kg and up	1.75	1.75
Finland*	34 kg and up	1.00-1.05	1.00-1.05

*delivered Northern Italian tanneries

 
 
 

Survey of Spanish Lamb/Sheep Markets

*Prices are ranged to reflect the different regions in Spain, from lower end to top end quality.
**Prices quoted basis fob origin on euros per piece basis (5.5-7ft range, 6.5ft avg.)

Category	This Week	Last Week 05/15/2020
Entre Fino doubleface	11.00	11.00
Entre Fino nappa	10.50	10.50
Merino doubleface	11.50-12.00	11.50-12.00
Merino 80/20 1st/2nds	11.00	11.00
Merino 2nds	7.70	7.70
Lachaune Lechal 90/10 % 1st/2nd	6.50	6.50
Lechal aprox 40% P+SP balance rasato
100% 1st	4.00	4.00
90/10 % 1st/2nds	3.00	3.00
Tigrados original	1.50-2.00	1.50-2.00

 
 
 

Survey of United Kingdom Lamb/Sheep Markets

*Prices quoted in GBP/pce.

Category	This Week	Last Week 05/15/2020
Sheep skins	No Value	No Value
Hoggets	0.00-0.50	0.00-0.50
New season lambs	NA	NA

 
 
 

Survey of Greek Lamb/Sheep Markets

*Prices quoted in USD/dz (pickled)

Category	This Week	Last Week 05/15/2020
Lamb skins (70/20/10)	50	50
Lamb skins (C2)	30	30

 
 
 

Survey of New Zealand Lamb/Sheep Markets

*Prices quoted in USD/dz (pickled)

Category	This Week	Last Week 05/15/2020
Lamb skins (standard)	55	70
Lamb skins (C grade)	20-25	15-20

 
 
 

Survey of Australian Markets

AUSTRALIA Wet blue, ox, USD/piece

Grade A	This Week	Last Week
6-14 kg	15	15
14-18 kg	25	25
18-23 kg	36	36
23-27 kg	45	45
27-31 kg	53	53
31kg and up	NA	NA

 

Grade B	This Week	Last Week
14-18 kg	20	20
18-23 kg	28	28
23-27 kg	36	36
27-31 kg	45	45
31kg and up	NA	NA

 

Grade C	This Week	Last Week
14 kg	NA	NA
14 -18 kg	NA	NA
18-23 kg	18	18
23-27 kg	27	27
27-31 kg	35	35
31 kg and up	44	44

 
 
 

Survey of New Zealand Markets

NEW ZEALAND Wet blue ox, selection 80%-20%, USD/piece

	This Week	Last Week
20-24 kg	50-51	50-51
24-27 kg	60	60
27+ kg	71-72	71-72

NEW ZEALAND Wet blue heifers, selection 80%-20%, USD/piece

	This Week	Last Week
14-18 kg	40	40
18-23 kg	50	50

NEW ZEALAND Wet blue cows, selection 80%-20%, USD/piece

	This Week	Last Week
14-18 kg	28	28
18-23 kg	34	34

 
 
 

Split report (wet blue)

*Prices quoted in $/kg.

Origin	This Week	Last Week
USA	NA	NA
Brasil	NA	NA
Argentina	NA	NA

 
 

 

 

RAW HIDE MARKETS ACROSS EUROPE

 
 

UK/Irish Ox/Heifers: Five cents less for Ireland

If last week Irish sellers could try to bring home €0.70/kg for the 36+, this week they can’t get more than €0.65. Irish hides are generally worth 10% less than English hides given the lower quality, but now the differential has essentially doubled. This is also due to the devaluation of the pound, which made British hides more competitive. A sale at €0.65/kg corresponds to 0.58 pounds in pounds sterling, while the same British hides sell around £0.70/kg. The same thing is happening to all other sizes as well.
 

Forecast

Complex weeks are expected for English sellers. Despite poor slaughter, demand is unable to absorb the entire availability of hides offered on the market and buyers expect, for some reason, a further drop in prices.
 
 
 

European Cows: No conclusions for German hides

Prices are unchanged due to the absence of negotiations. Southern German cows, therefore, remain at the levels of last week, when they were sold at €0.70/kg, while the reference price for central French cows remains around €0.65. There is no demand for footwear, something has been produced for leather goods but it is a few if compared to February’s activity. In this situation, tanneries carry on with the initial stages of production but are unable to operate in the finishing phase, and therefore must manage some critical issues due to excess stocks of wet blue. Complicating the situation is the collapse in demand for furnishings from non-EU customers, on the one hand, and the sale of Brazilian Tr1 of more than moderate quality at $0.45/sf on the other.

Forecast

In addition to the drop in demand from the sofa factories, tanneries specializing in furniture must also face a lack of outlets for the residual materials destined for automotive steering wheels. The prospects for recovery are rather far off and prices could continue their decline.
 
 
 

Veal Skins: Netherlands up and down>

There are discussions about Dutch prices. Some sellers managed to tick the same price as Lineapelle, which is €4.50/kg, at a time when the price lists for cows have been halved compared to the February values. However, there are also rumors of contracts closed at €3.50, one euro less for the same origins. What is the right price? Both are fine. The difference not only depends on the quality level of the lot, which affects the evaluation, but also on the urgency of the sellers to close the contracts. In general, sellers have no urgency because few skins are available.

Forecast

Demand is reduced, like supply. The strongest position continues to be that of those who sell, because the average quality of European calves in the spring harvest is high and functional for the production of top leather goods. We expect stability for prices, with a gap between minimums and maximums, however high.
 
 
 

European Bull Market: No sales

This has been a very bad week. No sales, requests for postponed delivery, pessimism and distrust on the part of the tanneries: This is the climate around which the bull game was played. We confirm last week’s prices: €0.65-0.70 for large sizes from northern Germany, €0.90 for the best grades in southern Germany, €0.65/kg in the Netherlands, €0.70 in Poland, central France at €0.90 and Italian bulls at €0.50-0.55/kg.

Forecast

Sellers have no intention of giving in on prices. Current prices certainly do not satisfy them, and furthermore, there has been an additional drop in slaughter especially in Germany, mostly linked to problems with contagion in some slaughterhouses. The drop in demand, or rather the failure to restart it, in the automotive sector acts as a counterweight. The sum of two weaknesses should allow prices to remain stable.
 
 
 

Lamb and Sheep Market: Deliveries just for old orders

The skin economy is living in a period called “disorienting” by operators. European tanneries are carrying on production linked to some orders that arrived before the forced closures, but there are no signs of new orders and the prospects are far worse than those at the present. The orders, which in this area are mostly made through warehouses of imported skins, are limited to a few high-quality lots. Meanwhile, for the medium and medium/low range, it is complete darkness. If sheepskin tanneries are operating below 50% capacity, for goat specialists the work is practically zeroed.

Forecast

By now even the most optimistic seem resigned to the idea that the real restart will not happen before August-September. The month of August in Italy could become a month of work to compensate for a part of spring losses. From then on, it will be necessary to see who will be able to resist the crisis. However, prices are not destined to drop significantly.
 
 

 

 

REFLECTIONS OF THE WEEK

 
 

Raw stock week 21. Sharp drop in work, some tanneries cut work shifts by half, others leave employees at home. Automotive under 30%, and worse for fashion and furniture. Requests to review already signed contracts.

That the restart would have been difficult, one could already imagine. The reality of the facts turned out to be in line with expectations, and for some, even worse. In Arzignano, the leading leather district in Europe, several tanneries have chosen to undertake a partial restart, halving working hours or, in other cases, operating only three days a week instead of five or six, as was the case before the crisis. In addition, the layoff used during the lockdown has returned and several companies are using it. Across Europe, the moment is complicated because leather for footwear and leather goods has no orders. Furniture depends heavily on the United States and the automotive industry has reduced orders by a further 30% at this time compared to the already reduced pace of the first two months. The most significant tensions this week are related to furnishings because there are realities, especially in Arzignano, which are affected by the crisis that hit HTL in Singapore. This is a crisis that has reduced orders, although there should be no bankruptcy complications because the most exposed company belongs to an investment fund and therefore enjoys excellent financial health. However, it certainly is an additional destabilizing element in an already critical overall situation. Thus, for furnishings, all tanneries linked to non-EU orders (China, Thailand, USA, Canada) are faced with a zeroing of orders which certainly cannot be compensated for by the high-quality Italian sofa producers, who in turn are suffering because of their lack of retail customers. Coming to prices, the situation is basically stable with some possibility of obtaining discounts (maximum  5 cents) in case of orders. But the result of the past week has been almost zero. If something had been done in the previous week, there were no contracts in the one just ended. On the contrary: The only relevant fact is the request to postpone the deliveries of purchases that were concluded during Lineapelle, with some tanneries forced to ask for a price review because, in turn, the tannery was asked to review the contracts signed by its customers.

The difficult availability of skins

Sheep prices have decreased, but the drop is much more contained than that recorded for cows in the post-Lineapelle period. The reasons are clear enough. First of all, for European origins, the drop in slaughter was particularly high because restaurants are the prevalent destination for sheep-meat, so there was little demand for skins but also little supply. In addition, shipments to Europe have slowed down from Iran and therefore Iranian skins are few or, in some cases, because of the cheaper grades, are not delivered, because there is no demand for low grades in Europe. The least affected by the downturn are Southern African origins, which are also hardly available due to the effect of the production lockdown. Then there is a rather important problem that affects Nigeria. Some luxury brands, in particular those of the Kering Group, reportedly have decided not to purchase this origin, as the country is on a blacklist. This fact could push demand toward more western nations, such as the Ivory Coast or Burkina Faso, depressing Nigerian prices, which have already fallen for the best grades, while the lower grades no longer have a market in Europe.
 
 
 

Upcoming European Trade Show Events

PITTI UOMO	Florence, Italy	POSTPONED September, 2020
EXPO RIVA SCHUH	Riva del Garda, Italy	CANCELED
FREIBERG LEATHER DAYS	Freiberg, Germany	CANCELED

 
 

 

 

INDUSTRY NEWS

 
 

World – Consumption will start again with social shopping

Zuckerberg goes to meet small businesses by launching his Facebook shop. The closure of physical stores has pushed many to try bringing their business online and according to Technavio, the London-based research firm, by 2021 the social commerce market will reach a turnover exceeding $165 billion. Hence, the idea of ​​making shopping more immediate, allowing anyone, from the small business owner to the global brand, to use the app of the famous social network to connect with their customers, investing in new features that can inspire people in their shopping while making online commerce easier. Designed to help companies create a single online store, which customers can access on both Facebook and Instagram, Facebook shops are simple and free. Companies can choose the products they want to include in their catalog and customize the look and feel of the shop with a cover image and colors that reflect their brand. This means that any entrepreneur, regardless of the size of his company or budget, can bring his business online and connect with customers where and when they prefer. Facebook shops will be available on a company’s Facebook page or Instagram profile, but also in stories or advertisements starting in the coming months.
 
 
 

Italy – Roberto Cavalli begins transfer from Florence to Milan

The management of the Roberto Cavalli fashion house has officially notified the unions that it will transfer to Milan of its Sesto Fiorentino headquarters, including the 170 employees. It aims to close the facility starting with September, according to the ANSA agency. “In the digital and COVID-19 era, the new Roberto Cavalli is the only company in the country that thinks it is strategic to transfer 170 families from Florence to Milan, because the management of digital services is there,” said the secretaries of trade unions Femca-CISL and Filctem-CGIL Firenze, Mirko Zacchei and Luca Barbetti. “We believe, although we are not entrepreneurs, that all companies are saying the opposite: Thanks to digital technology, and for the needs induced by this particular situation, the value and importance of remote work is being valued.” The company had also anticipated its intention to guarantee to all workers the treatments, terms and conditions provided for by the relative national collective contracts transfers, giving full continuity to all employment relationships.” The company’s plan is based on a clear strategic direction, namely that Roberto Cavalli has today and will increasingly have a prevalent commercial vocation in the future. The decision to aggregate all the commercial and administrative functions at the Milan office is therefore primarily physiological: The city is the reference point for national and international investors and customers,” said Cavalli.
 
 
 

Italy – Mandarin bought ABC

Creating an Italian hub of suppliers for luxury companies is the objective of the private equity fund Mandarin Capital. Through its subsidiary Margot, it has completed another acquisition, ABC Morini, a Scandicci-based company with more than 50 years of history that specializes in accessories for leather goods. Mandarin Capital Partners III bought Eurmoda last November. The closing of the transaction led to the creation of the Margot holding company (which Eurmoda controls), which is controlled 70% by the fund and 30% by Marco Vecellio, formerly CEO of Eurmoda. Just in November, with the Eurmoda deal, Andrea Tuccio, partner of Mandarin Capital Partners III, explained that, “the idea is to invest in complementary small and medium-sized enterprises, which often work with the big brands, and to make them grow nationally and internationally, also focusing on new technologies.”
 
 
 

France – Dior requests patent on its Saddle bag

Twenty years after its launch, Dior turns to the US Patent and Trademark Office to register the design of the iconic ‘Saddle’ bag. The request includes the configuration of the product —  its particularly recognizable shape — that identifies and distinguishes the bag introduced by John Galliano during the S/S 2000 season when he was creative director of the house. The Saddle bag was brought back to the fore by Maria Grazia Chiuri, at the helm of the brand since 2016, who proposed it again starting from the F/W 2018-19 collection adding new details, prints and materials to the accessory that incorporates the profile of a saddle. The Italian designer has also reintroduced the characteristic oblique pattern with the logo of the fashion house created by Marc Bohan in 1967 (creative director from 1961 to 1989), combined precisely with the Saddle.
 
 
 

Italy – Furniture, Luxury Living Group sold to Lifestyle Design

Haworth Inc, through its Lifestyle Design division (which includes brands such as Poltrona Frau, Cassina, Ceccotti, Cappellini, Janus, Karakter, for the retail division Luminaire and Dzine), has reached an agreement to acquire 100% of Luxury Living Group (LLG). The closing of the transaction, which awaits antitrust approval, is scheduled for the end of June. The aim of the deal is to restore strength to the company that has produced and distributed licensed products for international luxury brands for 30 years, including Bentley Home, Trussardi Casa, Bugatti Home and Fendi Casa, which represents more than half of the turnover of the LLG group. Once the acquisition process is complete, the first projects planned for the following semester will be the reopening of the completely renovated Paris showroom, the reopening of the London space and the finalization of the opening in San Francisco. Haworth’s commitment will be to restore LLG’s economic/equity balance through a structured debt reduction process. LLG will maintain its independence as management will be confirmed in the figures of Roberto Spada president, Olga Vignatelli vice president, and Renato Preti, chief executive officer. The management will be assisted by the Lifestyle Design team which, under the leadership of CEO Dario Rinero, has grown in the past ten years to exceed a turnover value of over €500 million.
 
 
 

Italy – Cucinelli relies on a couple of CEOs

Last year, Brunello Cucinelli communicated his intention to take a step back from the role of CEO of the Umbrian brand of high-end clothing and accessories for men, women and children that he founded in 1978. Now, the renewal of corporate positions was ratified at the shareholders’ meeting that approved the 2019 financial statements. The Italian entrepreneur will now be joined by two co-CEOs. At the meeting, the newly-elected 12-member Board of Directors conferred responsibility for style, creativity and communication to Executive Chairman Brunello Cucinelli, confirming him in the role of Creative Director, and appointed Luca Lisandroni and Riccardo Stefanelli as new Chief Executive Officers, making Luca Lisandroni the head of Markets and Riccardo Stefanelli of Products and Operations. Stefanelli is the husband of the entrepreneur’s eldest daughter, Camilla Cucinelli, and has 14 years of experience within the company, while Lisandroni joined the company 4 years ago, coming from Luxottica.
 
 
 

Italy – Micam to be held in September

The international footwear exhibition Micam confirms the dates of its September edition, which will take place from 20 to 23 September at Fiera Milano Rho. It also communicates the desire to start again, which emerged from a survey commissioned to test the mood and needs of the sector in the post coronavirus period. “In a moment of great uncertainty for our sector due to the current global health crisis, we have listened to the needs of companies and buyers and we are ready to be by their side to start again,” said Tommaso Cancellara, CEO of Micam and General Manager of Assocalzaturifici. “The operating machine is already at work and the September edition will be a fundamental event for everyone to re-establish ties with the market and create new opportunities in total safety. We are also negotiating and defining a commercial agreement with one of the most important players in the world in digital services, to offer all Micam exhibitors a new B2B digital sales channel. We will divulge more details in the coming weeks.”
 
 
 

France – Renault plans to close 4 French facilities

Renault is considering closing four factories in France under its new business plan which will be presented in late May. According to several newspapers, three small plants and especially the historic Flins factory just outside Paris, are at risk. The closures, still under discussion and therefore not entirely definitive, would fully fall within the strategic plan, which will be unveiled on May 29 and will include the objective, already indicated in February by the interim CEO, Clotilde Delbos, of generating cost savings of at least €2 billion by 2022. The downsizing program should begin with the Choisy-le-Roi component plants (in the suburbs of Paris) and Caudan (Brittany) in the first phase and the Dieppe plant (Upper Normandy) dedicated to Alpine models. Within a few years, Flins will have the same fate, and in this case the decision will concern a plant that, together with the production complexes of Volkswagen in Wolfsburg and Fiat in Mirafiori, has made the history of the European automotive sector.

 

We remind readers that all price tables that we drafted are intended as a basis to illustrate the trends. Our prices quoted do not reflect quality changes present between one and the other source. Hidenet.com recognizes that there is a variety of factors able to determine different prices for similar materials.

The Week at a Glance

 

• Brazilian prices lower
• Argentina’s market unchanged
• Paraguay TR1 lower
• APLF presents series of webinars to connect industry
• 1,300 Argentine shoe factories are at risk
• Brazil’s March leather exports down in volume, value
• Central American footwear imports increase
• Léon’s Leather Zone stores turn to e-commerce
• Uruguay slaughter plummets in recent weeks

 

Click here to read the report in Spanish

 

 

 

 

Raw/Fresh Skins

This week in Brazil, the real closed at R$5.2371 against the US dollar compared to R$5.0773 in the previous period. The average price of fresh hides dropped to close at R$0.49 per kilo.

Zebu hides also saw a decline and are selling at R$0.45 to $0.60/kg (with hump) and Gaucho hides also at R$0.45 to $0.60/kg. (without hump). There is one region with slightly varying prices, but in terms of the best sources, this is the price range.

Sources in Argentina say that the situation there is very bad, as the main markets for exports have shut down. Mexico is closed as is Europe and India. Therefore, not only are new orders not arriving, but previous orders are being postponed or canceled. Although China is starting to work, it’s only the factories that produce for the domestic market and the prices offered are much lower than needed.

Some tanneries in the country have closed for several weeks while others are working at 20% or 30% capacity to make some wet blue to keep in their warehouses. Others are only producing what they have to for orders, and that is not much.

The kill remains strong, even considering that some slaughterhouses are closed due to COVID-19 issues. Still, there are no prices. Some people may be getting hides for free and others paying for some categories.

In Uruguay, INAC reports that slaughter dropped by 20.3 percent but for the month of April, the total number has plummeted by 70 percent due to several factors.  See the expanded report in Industry News below.

 

 

 

Wet Blue & Crust

Brazil’s domestic market was unchanged during the week due to the lack of demand. On the global front, the activity of the leather industry and those that use this material for their products is returning in China and other Asian countries. Luxury sales are recovering in China. For example, on the day that the Hermès’s store in Guangzhou reopened, it logged $2.7 million in sales on one day. Guangzhou is the capital of Guangdong province, the richest area in China. In Europe, the resumption begins, albeit at a lower level. Brazil is seeing similar movement, but there is a problem: To whom to sell what is manufactured? This recovery will take a little longer. TR1 is selling at US$0.57/sq ft and extra heavy at US$0.60.

Regarding hide and leather Brazilian exports, in the second week of April, shipments had a daily average of US$3.4 million, well above the US$2.8 million recorded in the previous week.

In Paraguay, everything is slowed by the COVID-19 quarantine so the slaughter in the refrigerators is still reduced. Companies not in the agricultural sector or in its supply chain, are closed. New leather business is not strong and the offering is TR1 at US$0.62/0.65, TR2 at US$0.52/0.55 and TR3 at US$0.45.
 

 

 

 

PRICES IN BRAZIL

 

 

WEEKLY PRICES PER US$/CFR (except raw material)

 

 

FRESH HIDES US$/Kg	This Week	Last Week
	US$0.09	US$0.11

 

WET BLUE WHOLE HIDES FULL SUBSTANCE	This Week	Last Week
Grade TR1 23Kgs+	0.53	0.57
Grade TR2 22Kgs+	0.43	0.57
Grade TR3 21Kgs+	0.33	0.37
Grade TR4 19Kgs+	0.25	0.27
WET BLUE WHOLE HIDES  20 mm+
Grade TR1  47/52ft	0.43	0.47
Grade TR2  47/52ft	0.33	0.37
Grade TR3 45/50ft	0.25	0.30
Grade TR4  45/50ft	0.20	0.25
WET BLUE  SIDES  24mm+
Grade AB  22/26ft	0.46	0.50
Grade C  22/26ft	0.46	0.40
Grade D  22/26ft	0.26	0.30
Grade E  20/26ft	0.20	0.20
Grade F  20/26ft	–	–
WET BLUE SPLITS
6/9 Kgs (Glove standard)	0.25	0.25
7/10Kgs	0.30	0.35
10/12Kgs	0.40	0.45
14 kg+	0.55	0.55
CRUST ( UPHOLSTERY ) 0.9/1.1 mm Stucco & Buffed
TR 01	0.73	0.75
TR 02	0.63	0.65
TR 03	0.53	0.55
CRUST ( AUTOMOTIVE O&M ) 0.9/1.1 mm
TR 01	0.87	0.90
TR 02	0.77	0.80
TR 03	0.67	0.70
CRUST ( AUTOMOTIVE O&M ) 01.1/1.3 mm
TR 01   Vacuum Dry	1.02	1.05
TR 02   Vacuum Dry	0.92	0.95
TR 03    Vacuum Dry	0.82	0.85
CRUST SIDES FOR SHOE UPPER BLACK DYED THRU
ABC 12/14 mm 14/16 mm	0.87	0.90
D 12/14 mm 14/16 mm	0.77	0.80

 

 

 

 

PRICES IN ARGENTINA

 

 

Buenos Aires

Steers	$0.05
Cows	NA
Heifers	$0.10

 

ARGENTINA		This Week	Last Week
Raw hides (W/S)
Steers		0.05	0.60
Cows		NA	0.10
Heifers		0.10	0.80
Crust for shoe upper, 1.2/1.4 mm, black dyed thru*	ABC	1.85-2.00	1.85-2.00
	CDE	1.45-1.55	1.45-1.55
Crust whole hides for upholstery 0.9/1.1 mm**	Auto	1.35-1.50	1.35-1.50
	Furniture
Wet blue drop splits, average 9/11 kg, selection TR***	Auto	0.95-1.05	0.95-1.05

**Usually for full grain selections.
*The selection composition determines the price.
 

 

 

 

Prices in Uruguay

Fresh	US$0.15
Salted	US$0.25
Wet Blue 14/16 TR1	US$0.90
Wet Blue 14/16 TR2	US$0.70
Wet Blue 14/16 TR3	US$0.60
Crust 10/12 TR1	US$1.10
Crust 10/12 Auto	US$1.30
Crust 10/12 Auto (Vacuum Dry)	US$1.50

We remind readers that all price tables are intended as a basis to illustrate trends. Our prices quoted do not reflect quality changes present between one and the other source. Hidenet.com recognizes that there is a variety of factors able to determine different prices for similar materials.
 

 

 

 

INDUSTRY NEWS

 

 

GENERAL

 

 

 

APLF presents series of webinars to connect industry

Given the challenges related to the pandemic, ALPF has established a number of online tools for connecting industry members during this uncertain time. A series of webinars is one of the tools being presented. Experts and professionals from different industries will focus on Sustainable Fashion, Technology, Trends Forecast, and Hides & Skin Production.

In April, two webinars are planned, and you can see all the online events here lekarna-slovenija.com.

Beef and Leather in Latin America: Eliminating Deforestation from Supply-Chains
Presented by Mauricio S. Bauer
Moderated by Rafael Andrade
National Wildlife Federation
21 Apr 2020    |    7-8 pm HKT (check your time zone)

International Wildlife Conservation is the international program of the National Wildlife Federation. With over 30 years of experience, the International Wildlife Conservation program combines expertise in the fields of natural resource economics, remote sensing and GIS, international law, and tropical ecology to advance market-based solutions and public policy to eliminate the loss of tropical forests around the world.

We promote “zero deforestation” agriculture production in the tropics, focusing on the commodities that have the greatest impacts on forests and wildlife, such as beef, leather, soy, palm oil, and biomaterials. Our work also focuses on advancing strong and comprehensive international agreements that protect forests and our climate.

This webinar will be presented in English. Save Your Seat.

How can Digital Design, Artificial Intelligence, Digitalized Supply Chains and Smart Factories Become the Main Strategy for Brands and Suppliers in the Post COVID Era?
Presented by Andrey Golub
CEO of Else Corp
28 Apr 2020    |    5-6 pm HKT (check your time zone)
We expected Fashion, Footwear and Leather to become sustainable in the near future. We talked a lot about adapting Digital Design, Smart Manufacturing, and even Artificial Intelligence to those sectors, but just as an option, a privilege for important and well-structured companies.

We dreamed about Digital Supply Chains, B2B platforms… And now we see how quickly COVID-19 is changing the industry from inside out, making “high-tech strategy” the only way to survive. Are we ready? Do we know and understand well enough the technological landscape? Can we filter the buzz and think of the impact on our business?

This webinar will be presented in English. Save your seat.
 

 

 

 

ARGENTINA

 

 

 

1,300 Argentine shoe factories are at risk

FashionNetwork.com
 

Argentina’s 1,300 footwear factories are at risk due to the COVID-19 pandemic, involving more than 60,000 jobs, according to Laura Barabas, manager of the Chamber of Footwear Industry (CIC).

“At least until April 26, 100% of the industry is paralyzed. Factories are not working and neither are the shops, and online purchases are not being sent, ”Barabas told FashionNetwork.com. For the footwear sector, this is a big problem because its product is seasonal and winter products are made in March. Despite some companies’ e-commerce efforts, sales are still difficult.

The CIC is working online with the Argentine Confederation of Medium-Sized Enterprises (CAME), the Argentine Chamber of Commerce and Services (CAC) and the Argentine Industrial Chamber of Clothing (CIAI) on a plan for the gradual restart of the industry, while maintaining strict sanitary protocols.

“We speak with the entire value chain, but the reality is that all that is being done is accompanying companies to receive aid. We are all going to have to give up something financially in order to get out of this situation, ”said the CIC manager.

“We are focusing on obtaining credits to pay salaries, subsidies, interest waivers. All the measures have to do with helping the SME to get through this season,” she added.

Barabas also noted that the sector is worried about a flood of imports as other strapped countries try to export their products.
 

 

 

 

BRAZIL

 

 

 

Brazil’s March leather exports down in volume, value

CICB
Hide and leather exports presented by the SECEX (Secretariat of Foreign Trade) of the MDIC, in March 2020 had a total value of US$97.2 million, which is an 18.3% decrease compared to the same month last year, when US$118.9 million were exported. It is also a 0.9% reduction in relation to February, when exports were US $98.1 million.

As for the total exported in square meters, 15.8 million were shipped in March, 13.2% less than in the same month of 2019, and 1.7% less than February, when the total was 16.1 million m2.

There are the following variations in Brazilian exports of bovine hides by stage in the quarter of 2020, compared to 2019:

• Salted with a 34.0% decrease (before -51.3%) in value, but an increase of 34.3% (+ 13.8%) by weight;
• Wet Blue with a reduction of 37.2% (-34.2%) in value and 23.1% (-18.5%) in area;
• WB shave with an increase of 11.3% (+ 20.6%) in value and 12.2% (+ 23.2%) in area;
• Crust with an increase of 9.1% (+ 9.3%) in value and 17.1% (+ 20.4%) in area;
• Finished with a reduction of 9.8% (-8.7%) in value, but an increase of 1.9% (+ 3.9%) in area.

For the first quarter of 2020, these are the results for the three main markets for Brazilian leather.

• China, with a share of 23.5% in value and 30.5% in area, fell by 14.4% in commercialized area (-6.7% in February) and by 18.4% in value (-11.6%);
• USA, with a share of 20.9% in value and 11.4% in area, increased by 22.0% in area (+15.9%) and 10.9% in value (+3.1%) ;
• Italy, with a share of 15.4% in value and 19.2% in area, decreased by 17.1% in commercialized area (-9.2%), and by -31.7% in value (-27.6%).

Among the main destinations, the US remains the only one to show improvements in volumes and imported values. Performance for China and Italy are worsening every month.

Analyzing the other countries considered important players in the leather trade, we highlight the following:

• Vietnam, in fourth place in the ranking (6.3% share value), increased by 42.3% in area and decreased by 9.7% in value;
• Hong Kong, with a share of 4.6% in value, continues with significant growth in area of ​​51.2%, but a decrease in value of 25.3% (-17.2%);
• Germany, returning to fifth position, now with a 4.6% share, shows a reduction of 25.1% (- 19.5%) in value and 12.5% ​​in area; and, finally,
• Mexico, with a 4.4% share, maintains an increase of 66.6% (+92.0%) in area and 52.3% (+67.8%) in value.
• It is important to highlight exports to Macau, which will become a destination in 2020 for Brazilian leather, being an alternative to enter mainland China, given the problems presented by Hong Kong in recent years.

Brazil’s states show the following highlights:

In an analysis of the ten states with the highest exports in the country, Minas Gerais, which until February showed a recovery in value, now presents stable indexes, with only +0.6%. All others show declines. If we consider commercialized area, four had a positive performance in the quarter, being: Mato Grosso do Sul (+17.3%), Bahia (+13.6%), Minas Gerais (+8.3%) and Pará (+0.6%).

•  Still among the ten largest, the most significant drops in value were: Ceará, with -28.1% (before -37.2%); Goiás, with -24.7% (-24.0%); Pará, with -22.9% (-9.2%); Bahia, with -18.6% (-5.1%); Santa Catarina with -18.5% (-14.0%); and Paraná, with -17.1% (-1.2%).
• Despite the drop in value and area, Rio Grande do Sul remains the leader in shipments abroad, with a share of 26.8% and 21.8%, respectively. Paraná remains in second place in value, with a share of 15.1%, but now in fourth in volume, with 12.8%; São Paulo remains in third place, with a share value of 14.4%, and returns to second place in area, with 16.1%; Goiás, therefore, is fourth in value and third in area.
• In this quarter, the highlight in increasing value and exported area goes to Rondônia, which surpassed Rio de Janeiro and occupies the 12th position, with an increase of 319.4% in value and 586.7% in area.

The volumes exported in March are beginning to demonstrate a worrying scenario, where the stability that until then was apparent, starts to give rise to stronger declines, mainly in Wet Blue leather. Raspa WB still maintains growth in value and volume in the quarter, however, in March it had the biggest declines. The growth in the volume of finished and semi-finished leathers, in the latter also in terms of value, started to decrease or even negate, having a strong impact on total exports. The daily average of exports decreased, but the greater number of working days in March favored the total. With the fall of WB, finished leather started to recover its share in value and volume, showing that the stability of exports at this stage still tends to be secure. The indicators of low raw material prices and a valued dollar are no longer determinants for maintaining volumes. Everything becomes a matter of demand. The coming months will be decisive in the year’s results, as tanneries and manufacturing are already feeling the strong impacts of the pandemic.
 

 

 

 

 

Minerva cuts slaughter, rotates suspensions

Abrafrigo
Minerva Foods, one of the largest beef producers in Brazil, is already preparing to alternate slaughter operations between the States, in the event of a possible infection by coronavirus in employees that leads to the closing of any unit of the company

“We are all getting ready in case this happens, replacing (slaughtering in) one factory with another, as far as possible,” said Minerva’s Institutional Relations Director, João Sampaio, in a webinar on Tuesday. In addition, Sampaio said that the company reduced the total number of animals slaughtered because preventive measures also led to fewer workers in the units.

“In the factories, we reduced the number of people working and the number of animals that can be slaughtered. We had several plants inspected by the Public Ministry,” he said, without specifying the actual reduction in slaughter.

In the middle of last month, Minerva announced the suspension of slaughter operations in four units in Brazil, as a preventive measure against coronavirus and for logistical issues also related to the disease. Such stoppages, according to the company at the time, would last up to 15 days. The company has a dozen refrigerators in Brazil and units in Argentina, Chile, Colombia, Paraguay and Uruguay, which are part of the subsidiary Athena Foods.

So far, no company employee has tested positive for COVID-19, he said.
 

 

French VERT brand has Brazilian origins

Assintecal
 

Founded in 2004, the VEJA brand, distributed in Brazil since 2013 under the name VERT, is considered one of the brands most concerned with the way its products are manufactured and marketed worldwide.

Innovation, fair trade, social development, transparency and upcycling (reuse of materials) are fundamental themes for a brand that has been produced in Brazil for over 15 years and distributed to more than 60 countries.

Assintecal recently interviewed Beto Bina, coordinator of the brand’s production, about branding, purpose and sustainability.

Bina said that the brand finds everything it needs in Brazil: raw materials, structured factories and a socially responsible and quality workforce. “In 2013, we started commercial operations in Brazil, with the VERT brand. The relationship between the France and Brazil teams is great. Overall the team is multicultural and we really like this mix.”

With regard to the challenge of sustainability, Nina had this to say: “For us it is something natural. Those who follow our work from the beginning know that each collection brings a new material, an innovative technology, or makes improvements to the materials and products in the collection. WE pose our own challenges.  Sustainability is a medium in constant transformation. We don’t think it is right to say 100% sustainable, because nothing is 100%. We try to be the best we can, within the existing limits.”

VERT has been working on a Vegan line, which he says is part of the company’s desire to diversify the use of responsible materials, but without losing quality. Currently, the brand works with CWL, a material made from corn and cotton and which has the visual characteristics of leather, in addition to synthetic suede and organic cotton canvas.

“The interesting thing is that although we have 35% of the collection with Vegan products and a growing audience, the sales of these products are proportionately lower than leather products.”

Read the entire interview on the Assintecal website.
 

 

 

Cattle market update

The evolution of beef exports coincides with the improvement in meat quality for the Brazilian consumer. Livestock started to be organized in the mid-90s, when there was an improvement in food security. In 1997, about 50% of beef was of uncontrolled origin. In 2019, the proportion of uncontrolled meat fell to less than 22%. In the same period, exports increased almost 12 times, from 160,000 tons in 1997 to 1.86 million tons in 2019. Export revenue jumped from US$460 million to US$7.6 billion between 1997 and 2019.  Also, 60% to 70% of beef production with federal supervision is already boned in the industry itself, reducing the risk of contamination before it reaches the consumer. Last week, industries that work in partnerships and whose slaughter schedules are calm test the market in an incisive way, offering prices much lower than the refrigerators that are with short schedules. There is no expectation of an increase in red meat consumption for the short term.
 

 

 

 

CENTRAL AMERICA

 

 

 

Central American footwear imports increase

In the first nine months of 2019, companies in the region bought sports footwear abroad for $42 million, 5% more than reported in the same period in 2018. Imports to Panama, Nicaragua and Guatemala, account for the increase.

Comparing the first nine months of 2018 and the same period in 2019, the total value of sports footwear imports into Central America registered a 5% increase, rising from $39.8 million to $41.7 million.

Four of the six countries recorded year-on-year increases in their purchases. In Panama, imports increased 43%, while in Nicaragua, Guatemala and El Salvador the increases were 25%, 14% and 2%, respectively.

Costa Rica and Honduras were the only markets to register negative variations, which amounted to -20% and -39%, respectively.

From January to September last year the main buyer in the region was Guatemala with $15 million, followed by Panama with $10 million, El Salvador with $7 million, Costa Rica with $5 million, Honduras with $3 million and Nicaragua with $1.1 million.

In the first nine months of 2019, 26% of the value imported into the region came from China, 10% from Vietnam, 5% from Indonesia and 4% from the USA.

China is the market of origin of imports that has decreased the most for the period in question over the past eight years, since in 2012 it represented 47% of purchases in Central America, and in 2019 that proportion fell to 26%.

See more at

Central American Data.
 

 

 

 

MEXICO

 

 

 

Léon’s Leather Zone stores turn to ecommerce

The more than 4,500 tenants in the Leather Zone who had to close their businesses due to the COVID-19 pandemic are offering their products online, reports El Sol de Léon. The website is zonapielleon.com and the Zona Piel León mobile app is available for Android or IOS.

The Leather Zone is made up of more than 22 commercial squares distributed across 85 hectares and is a source of income for thousands of families from León.

 

 

 

 

URUGUAY

 

 

 

Uruguay slaughter plummets in recent weeks

Cattle slaughter was the lowest in a very long time at just 16,680 heads, which is 17.7% less than in the previous week’s very low total of  20,269 cattle.

The collapse in the total is due to three factors: a decrease in the supply of livestock, lower production partly due to the Easter holiday and partly due to a meatworkers’  strike that took place  April 1 to 8, and lower demand, both internationally and domestically.

If last week’s slaughter (16,680 animals) is compared to that of the same week in 2019, the decrease is a formidable 31.53%.

Always based on official data, so far in 2020 489,520 cattle were slaughtered, 31.3% less compared to the same period in 2019 (then it had reached 712,428 heads). The most intense fall is seen in the cows category, with 38.3%, while in steers the drop is 29.1% and in heifers is 14.9%, to cite the three categories with the highest volume.

Of the slaughtered this year, 46% are steers, 37% cows, 15% heifers, 1.53% bulls and 0.49% calves.
 

 Week at a Glance

• African markets unchanged
• Argentina’s Senasa urges tanneries to normalize removal of hides
• Australian hide sellers see customers withdraw
• Brazil’s prices steady
• European Cows: Prices down, €0.50 in Northern Germany
• European Bull Market: Automotive stop causes a drop
• Japan reports monthly hide import statistics
• Pakistani leather exports higher in first 8 months
• Spain’s footwear, leather industry down 6.8% in January
• US Heavy Texas Steers weakly steady

 

Click on a specific headline to go directly to a particular story.

Click here to view all the charts for international selections.

 
 
 

 

 

 

Africa

 
 
 

South African lamb markets firm

*Prices quoted in USD/dz

Category	This Week	Last Week 03/20/2020
Lamb I-III top quality	250-260	250-260
Lamb IV B	210-215	210-215
Lamb HS1	170-180	170-180
Lamb HS2	135-140	135-140
Lamb TRA	105	105
Lamb TRB	65	65

 
 
 

Central African lamb, sheep markets remain unchanged

*Prices quoted in USD/dz (crust)

Category	This Week	Last Week 03/20/2020
Goat skins (Mali, Iv. Coast)	70	70
Lighter goat skins (Mali, Iv. Coast)	60	60

 
 
 

Northern African calves hold stable

*Prices quoted in USD/dozen (pickled), 5 sqf

	This Week	Last Week
TR (I-III)	50	50
TR (IV-VII)	25	25

 

 
 

Made in Africa Leather MOU signed

African Leather and Leather Products Institute and African

At the African Union Headquarters, on the sidelines of the 33rd Ordinary Assembly of African Union Heads of State and Government, the CEO and Chairman of the AeTrade Group, Mulualem Syoum and the Executive Director of the African Leather and Leather Products Institute (ALLPI), Prof. Mwinyikione Mwinyihija, signed an MoU in the presence of the COMESA Secretary General and the AU Commissioner for Trade and Industry during a press conference.

The CEO and Chairman of the AeTrade Group welcomed the opportunity to work with the regional bodies established by COMESA to enable the implementation of the Boosting Intra-African Trade, SME development and Industrialisation efforts.

AeTrade Group already signed a memorandum of understanding with the African Standards Organisation, which will be a critical partner in this collaborative framework. The African leather sector will benefit tremendously as the two organizations join forces to harness their technical capacities to boost the competitiveness of the sector. Through digital capacity building and access to markets across the continent and globally, the number of SMEs and jobs created will increase significantly.

Leather and Leather products are among the most widely traded agro-based commodities in the world. The sector has the longest value chain and is fully integrated into millions of African households. In Sub-sharan Africa, in the leather sector, SMEs represent more than 95% of enterprises and the sector is male dominated with gender balance of Male 66.7% to 86.6% and Females 13.4%. to 33.3% at different stages of the value chain.

Africa Continent’s Hides & Skins, Leather and Leather Products import and Export values in 2018, were, respectively, US$5.45 and US$2.55 billion, of which the share of intra traded value is only 9.44%. The estimated potential of the sector is up to US$40 billion. The AeTrade Group keenly wishes to support ALLPI’s strategic plan to boost intra-African trade and enhance Africa’s share in the global market. Therefore, the Ae Trade Group and ALLPI will jointly develop relevant training materials for the digital platform that is customized for this sector. ALLPI being the first mover, will promote awareness to all SMEs about the benefits of trading on the Ae Trade platform, which will be disseminated through the success stories that will be published through different, digital media. Other sectors such as Agriculture, Distribution and Logistics, Finance, Tourism, and all sectors will be included based on the value chain approach.

 

 

 

Leather industry holds promise in Niger

Zouha Mohammed is studying the intricate skill of stitching leather, which can take months to learn. But with that expertise at hand, she now has the opportunity to generate income from her creations, items like purses, bags and keychains.

Mohammed took a course in the craft in Niamey, Niger, and can make as much as 35,000 cfa (US$58) if she sells one of her bags. She said she hopes this extra cash can translate into greater financial independence.

“Many women are active in the leather and hide processing sector in Niger. This economic participation allows them to increase their income and provide for their families,” said Abdou Adamou of the Enhanced Integrated Framework (EIF) in Niger.

“The leather and hides sector plays an essential role in Niger’s economic and social development. The country has an important capacity for processing hides in rural areas and a significant production potential for small ruminants such as goats.

Mohammed was part of a group of more than 125 women trained in leatherwork, and over 600 people involved in the livestock side were trained in the proper production of hides and skins and eco-friendly tanning techniques. In addition, tanneries and women’s organizations were provided with needed equipment like sewing machines, wheelbarrows, desks, boots and more.

Approximately 80% of the country’s total production is exported, and exports go mainly to Nigeria. In 2015, animal and animal-based products made up approximately 3% of GDP.

Read the entire feature.

 
 

 

 
 

Argentina

In Argentina, meatpackers are working full speed as the food industry does not stop. The problem is that at the end of last week tanneries were not allowed to work and there was no home for the hides. Now, tanneries are working with minimal staff to receive these hides, but there are still a lot of problems. Even if the hides are free, there is no capacity to salt so many hides. The country’s hide and leather industry is going week by week because the demand in any particular sector is unclear.  One source noted that “We only hear about cancelations and reductions.”
 
 
 

Buenos Aires

Steers	$0.60
Cows	$0.10
Heifers	$0.80

 

 

 

Senasa urges tanneries to normalize removal of hides

El Litoral

Carlos Paz, head of the National Service for Agrifood Health and Quality (Senasa), has sent a note to tanneries requesting that they resume the normal flow of hide removal, or “the corresponding measures will be taken to guarantee it.”

The Argentine Chamber of Slaughterers and Suppliers had warned that the tanneries were not complying with the withdrawal of the by-product, which could cause “not only increases in production costs, but may in the short term cause paralysis of the industry, with the consequent shortages, speculation and price increases.”

Along these lines, the Argentine Chamber of the Refrigeration Industry (CADIF) reported that the closing of last week found them “in an operational emergency and on the verge of paralysis, due to the lack of destinations for the hides from slaughter.” If this problem continues, the organization warned that “the regular supply of meat to the population would be prevented.”

Senasa noted that “not collecting or removing the hides resulting from the process of slaughter is causing severe inconvenience in the processes of such establishments” and insisted that “we are all making a great effort without regard to the costs that this emergency means.”

 
 
 

 

 

Australia

 
 
 

Australian markets hold firm

AUSTRALIA Wet blue, ox, USD/piece

Grade A	This Week	Last Week
6-14 kg	18	18
14-18 kg	28	28
18-23 kg	39	39
23-27 kg	47	47
27-31 kg	55	55
31kg and up	NA	NA

 

Grade B	This Week	Last Week
14-18 kg	22	22
18-23 kg	30	30
23-27 kg	38	38
27-31 kg	48	48
31kg and up	NA	NA

 

Grade C	This Week	Last Week
14 kg	NA	NA
14 -18 kg	NA	NA
18-23 kg	20	20
23-27 kg	28	28
27-31 kg	36	36
31 kg and up	45	45

 
 
 

Slaughter jumped last week

Beef Central reports that Easter states cattle slaughter jumped a surprising 17 percent last week, despite continuing downward pressure on finished cattle prices. The five-state weekly total to Friday was up to 140,944 head, up about 20,000 head more than the week before, with all states but South Australia contributing.

Trade talk this week suggests that the US port system is beginning to face similar challenges as China did earlier in the year, with waterfront disruptions caused by lack of labor and workplace restrictions causing container holdups in some ports.

 

 

 

Australian hide sellers see customers withdraw

Beef Central
 

International buyers and traders have more or less withdrawn from making offers on Australian hides, according to Beef Central.

With Italy having stopped leather goods manufacturing and tannery operations, that takes a major buyer out of the market. The other big customer — China — is also still affected.

“The good news was that the world was starting to embrace leather again, for fashion, furniture and vehicle seats. But this epidemic has brought it all to a screaming halt – so much so that I’m concerned now that the entire trade in hides out of Australia could be held up, for maybe a month or two,” said Northern Cooperative Meat Co chief executive Simon Stahl said.

That left only two options: stockpiling, or disposal as landfill.

Hides industry spokesman Victor Topper, president of the Australian Hides, Skin and Leather Exporters Association, said hides in Australia this week were basically ‘unsaleable.’

Read the entire feature
 
 
 

 

 

 

Benelux

 
 
 

Benelux bull markets decline

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
Benelux	30.0 – 39.0 kgs	1.00	1.10
Benelux	40.0 – 49.0 kgs	1.00-1.05	1.15-1.20

 
 
 

 

 

 

Brazil

Last week in Brazil, the real closed at R$5.1270 against the US dollar compared to R$5.0241 in the previous period. The dollar rates are still helping the leather industry to recover some space in the global leather market despite the lower bids that are being offered. The average price of fresh hides did not change and closed at R$0.81 per kilo. Raw material is under pressure and the Brazilian leather sector is evaluating the better way to keep going compared with the hides from other countries. TR1 remained steady at $0.65

 
 
 

 

 

 

Canada

Canada’s federally inspected slaughter for the week ending March 21st, 2020 was 69,859, up incrementally from the previous week’s 61,819. For the same week in 2019, slaughter was 61,631. Year-to-date Canadian cattle slaughter is 698,331 compared to 2019 when it was 688,875, an increase of 1.4%.

 
 
 

 

 

 

Finland

 
 
 

Finnish cow markets drop 10 cents

Cows	This Week	Last Week 03/20/2020
Finland*	0.70	0.80

 
 
 

Finnish bull markets stable

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
Finland*	34 kg and up	1.25-1.30	1.25-1.30

 
 
 

 

 

 

France

 
 
 

Veal Skins: Relative hold

There is also a price drop in calf, but not at the pace of the cows or the bulls and this for reasons that are quite clear. First of all, there is less availability and the slaughterhouse at this stage prefers to process dairy cows, also because the demand for milk is falling sharply, as the demand for catering for fresh cheeses has ceased to exist. And then, when the market starts again it will need a lot of hides because strong demand is expected. Tanneries, therefore, continue to buy and prices, from The Netherlands to France, are down slightly.

*All prices quoted in Euros/kg. delivered North Italian tannery, payment 30 days

Weight	This Week	Last Week 03/20/2020
13+ kgs (Luxury)	6.10-6.40	6.20-6.50
13+ kgs (Black and White)	4.80-5.30	5.00-5.50
8-12kgs (Luxury)	4.60-5.20	4.80-5.30
8-12kgs (Black and White)	4.40-4.70	4.50-4.80

 
 
 

French cow markets see overall decline

Cows	This Week	Last Week 03/20/2020
French Bretagne 32 kg and up	1.05-1.10	1.15-1.20
French Bretagne 32 kg and under	1.00-1.05	1.10-1.15
Central French 32 kg and up	0.80-0.85	0.90-0.95
Central French under 32kg	0.75	0.85

 

 

 

French bull markets also see overall decline

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
French – Central French – Bretagne	37 kilos and down 37 kilos and down	1.00-1.05 1.20-1.25	1.15-1.20 1.35-1.40
French – Central French – Bretagne	37 kilos and up 37 kilos and up	1.10-1.15 1.30-1.35	1.20-1.25 1.45-1.50

 
 
 

 

 
 

Germany

 
 
 

European Cows: Prices down, €0.50 in Northern Germany

European cows weaken due to the absence of requests. Everything is stopped in the field of footwear and leather goods. Activities are continuing by Central European tanneries, which however, have difficulties in dealing with retailers at the moment. The cancellation of Salone del Mobile will also affect activity in the second half of the year, therefore the prospects are negative. The prices of German origins have seen a drop of 10 to 15 cents, and consequently, 25+ northern German cows drop to €0.50, northern Italian to €0.45 and southern German selections lost up to 15 cents.

Cows	This Week	Last Week 03/20/2020
N. German 25 kg and up	0.50	0.55-0.57
N. German 15-24 kg	0.55	0.60
S. German 40 kg and up	0.80-0.85	1.00-1.05
S. German 30-39 kilos	0.75	0.90

 
 
 

German heifer markets weaken

Heifers	This Week	Last Week 03/20/2020
N. German 25 kg and up	0.85	0.90
N. German 15-24 kg	1.15	1.20
S. German 40 kg and up	1.10	1.15-1.18
S. German 30-39 kilos	1.05	1.10-1.13
S. German 24-30 kilos	1.15	1.20-1.22
S. German 15-24 kilos	1.25-1.30	1.30-1.35

 
 
 

European Bull Market: Automotive stop causes a drop

The week has been very confusing for bulls. Most of the European car manufacturers have stopped production: It has stopped in France, Spain and Italy. It continues in Germany where, however, Volkswagen has blocked everything and is ready to convert production for making ventilators. Leather prices started to drop on Wednesday, when there was a 20- to 30-cent drop for Southern German bulls, which were not substantially more quotable on Friday: There was talk of offers at half price for the US market. In general, we can say the last week is not very indicative for a real price trend.

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
N. German	30.0 – 39.0 kgs	0.80-0.95	1.00-1.05
N. German	40.0 – 49.0 kgs	0.90-0.95	1.00-1.05
S. German	40.0 – 49.0 kgs	1.15-1.20	1.35-1.40
S. German	50.0 kilos and up	1.10-1.15	1.35-1.40

 
 
 

 
 

 

Europe

 
 
 

Female Hides Report

Scroll cursor over the chart to view a year to year comparison.

 
 
 

European Bull Market

Scroll cursor over the chart to view a year to year comparison.

 
 
 

Lamb and Sheep Market

Scroll cursor over the chart to view a year to year comparison.
 
 
 

 
 

 

Greece

 
 
 

Greek lamb, sheep markets continue to hold firm

*Prices quoted in USD/dz (pickled)

Category	This Week	Last Week 03/20/2020
Lamb skins (70/20/10)	65	65
Lamb skins (C2)	35	35

 
 
 

 

 
 

India

 
 
 

Indian buffalo markets remain unchanged

*Prices quoted in USD/sf (crust)

Category	This Week	Last Week 03/20/2020
Crust, 1.2-1.5 mm	0.50-0.55	0.50-0.55
Crust, 0.9-1.1 mm	0.40-0.45	0.40-0.45

 
 
 

 
 

 

Iran

 
 
 

Iran mutton/goat markets hold stable

*Prices quoted in USD/dz (pickled)

Category	This Week	Last Week 03/20/2020
Muttonskins (AB)	90-100	90-100
Muttonskins (2B)	60-65	60-65
Muttonskins (super)	40-50	40-50
Goatskins medium	25-30	25-30

 
 
 

 
 

 

Italy

 
 
 

Italian veal skin markets remain steady

Weight	This Week	Last Week 03/20/2020
18kg and up	3.00-3.30	3.00-3.30
18kg and under	2.70-3.00	2.70-3.00

 
 
 

Italian cow markets decline

Cows	This Week	Last Week 03/20/2020
Italian	0.45	0.50-0.55

 
 
 

Italian bull markets also decline

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
Italy	40 kg and up	0.85-0.90	0.95-1.00

 
 
 

 
 

 

Japan

 
 
 

Japan reports hide imports, exports

 

 

 
 
 

 
 

 

Netherlands

 
 
 

Dutch veal skin markets continue to fall

*All prices quoted in Euros/kg. delivered North Italian tannery, payment 30 days

Weight	This Week	Last Week 03/20/2020
14.5 kgs	3.30-3.80	3.50-4.00
16.5 kgs	3.70-4.30	3.80-4.50

 
 
 

Dutch Cow markets drop

Cows	This Week	Last Week 03/20/2020
Dutch	0.50-0.55	0.55-0.60

 
 
 

 
 

 

New Zealand

 
 
 

New Zealand markets flat

NEW ZEALAND Wet blue ox, selection 80%-20%, USD/piece

	This Week	Last Week
20-24 kg	52-53	52-53
24-27 kg	62	62
27+ kg	73-74	73-74

NEW ZEALAND Wet blue heifers, selection 80%-20%, USD/piece

	This Week	Last Week
14-18 kg	42	42
18-23 kg	52	52

NEW ZEALAND Wet blue cows, selection 80%-20%, USD/piece

	This Week	Last Week
14-18 kg	30	30
18-23 kg	36	36

 
 
 

New Zealand Lamb markets hold firm

*Prices quoted in USD/dz (pickled)

Category	This Week	Last Week 03/20/2020
Lamb skins (standard)	70	70
Lamb skins (C grade)	15-20	15-20

 
 
 

 
 

 

Norway

 
 
 

Norwegian cows, bulls remain flat

Cows	This Week	Last Week 03/20/2020
Norway 17+ (av 24 kg)–*	1.65-1.70	1.65-1.70

 

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
Norway*	34 kg and up	1.75-1.80	1.75-1.80

 
 
 

 

 

 

Nigeria

 
 
 

Nigerian Lamb markets hold steady

*Prices quoted in EUR/sf, crust

Category	This Week	Last Week 03/20/2020
Cross lamb A	2.40	2.40
B	1.90	1.90
C	1.40	1.40
L1	0.90-1.00	0.90-1.00
L2	0.60-0.70	0.60-0.70

 
 
 

Nigerian goat markets remain flat

*Prices quoted in EUR/sf, crust

Category	This Week	Last Week 03/20/2020
ABC	1.25	1.25
D	0.95	0.95
E	0.70	0.70
F	0.60	0.60
L	0.50	0.50

 
 
 

 

 

 

Pakistan

 
 
 

Pakistani buffalo markets remain unchanged

*Prices quoted in USD/sf (crust)

Category	This Week	Last Week 03/20/2020
Crust, 1.3-1.5 mm	0.55	0.55
Crust, 0.9-1.1 mm	0.50	0.50

 
 
 

Pakistani leather exports higher in first 8 months

Lefaso
 

From July 2019 to February 2020, exports of Pakistani leather goods increased by 11.17% over the same period last year.
According to the Associated Press, Pakistan, leather exports in the first eight months of the current fiscal year reached US$361,921 million compared to US$325,543 million.

Pakistani Statistical Office data showed that leather apparel exports reached US$198,965 million, up 13.35% compared to US$175,536 million in the same period last year.

Leather glove exports reached US $155,289 million, up from US$142,573 million, and exports of other leather goods increased to US$7,667 million from US$7,434 million in the same period last year.

 
 
 

 

 

 

Poland

 
 
 

Polish cows weaken

Cows	This Week	Last Week 03/20/2020
Poland 26/27 kg*	0.65-0.70	0.70-0.75

 
 
 

Polish bulls drop

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
Poland*	40 kg and up	1.15-1.20	1.25-1.30

 
 
 

 
 

 

Spain

 
 
 

Lamb and Sheep Market: Unchanged by force

The management method of sheepskin tanneries in Europe is such that the problems of the cattle sector do not arise immediately. This is primarily because tanneries do not operate from fresh hides. Consequently, there has not yet been an impact on the sales prices of raw material. Activities have stopped, but expectations for the time of reopening do not appear particularly negative. It’s just a matter of time.

*Prices are ranged to reflect the different regions in Spain, from lower end to top end quality.
**Prices quoted basis fob origin on euros per piece basis (5.5-7ft range, 6.5ft avg.)

Category	This Week	Last Week 03/20/2020
Entre Fino doubleface	12.00	12.00
Entre Fino nappa	11.50	11.50
Merino doubleface	12.50-13.00	12.50-13.00
Merino 80/20 1st/2nds	12.25	12.25
Merino 2nds	8.00	8.00
Lachaune Lechal 90/10 % 1st/2nd	7.00	7.00
Lechal aprox 40% P+SP balance rasato
100% 1st	5.00	5.00
90/10 % 1st/2nds	3.50	3.50
Tigrados original	2.00	2.00

 
 
 

Spanish cow market down 5 cents

Cows	This Week	Last Week 03/20/2020
Spain*	0.60	0.65

 
 
 

Spanish bull markets drop

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
Spain	40 kg and up	1.00-1.05	1.10-1.15

 
 
 

Spain’s trade balance of leather over the last decade

Lederpiel
 

The Spanish tanning sector sells more than half of its annual leather production abroad. Last year alone, national exports of semi-tanned and tanned leather generated a total of more than €578 million. Imports of hides and leather in 2019 amounted to €461.5 million. If we analyze the evolution of both exports and imports of hides and leather in our country during the last decade, we find that throughout these 10 years, Spain has always sold more raw hides than it bought abroad, contrary to what has happened with semi-tanned hides, whose imports have always been much higher than exports. As for tanned leather, it is noted that only since 2016 sales of this type of leather exceed purchases.

By sub-sector, exports and imports of raw hides between 2010 and 2019 have evolved evenly. Although purchases of this type of leather abroad have remained unchanged for the last decade, sales do show a clear downward trend since 2013. Spanish exports of raw leather in 2019, compared to 2013, show a drop of 54.6 percent less.

Regarding foreign trade in semi-tanned hides, we found that both exports and imports of this type of hides reached their lowest values ​​of the entire decade last year, even more than in 2012, a year of marked falls for this sub-sector of skins.

Finally, in relation to the international trade in tanned leather, it is worth highlighting how exports of this type of leather have remained almost unchanged, at around €375 million. On the other hand, imports, after reaching a peak in 2015, has chained in recent years a series of declines that have meant that it has lost, in the last four years, 39.4 percent of its value.
 
 
 

Spain’s footwear, leather industry down 6.8% in January

The income of the textile industry is again down. The Business Turnover Index (ICN) for the sector ended January with a year-on-year drop of 5.7%, according to data from the National Statistics Institute (INE). In December, the decrease was 4%.

In the case of clothing, the sector changed its sign in January, with an increase of 12.8%, leaving behind the setbacks of previous months. For its part, the leather and footwear industry closed the first month of the year with a decrease in its turnover of 6.8%.

 
 
 

 

 
 

Sweden

 
 
 

Swedish cows see decline

Cows	This Week	Last Week 03/20/2020
Sweden*	1.15-1.20	1.20-1.25

 
 
 

Swedish bulls stable

Bulls	Avg. Green Wt.	This Week	Last Week 03/20/2020
Sweden*	34 kg and up	1.55-1.60	1.55-1.60

 
 
 

 
 

 

United Kingdom

 
 
 

UK/Irish Ox/Heifers: Down 5-10 cents

Britain eventually opted for a lockdown, but it currently applies to schools, public places and service activities, while non-food production continues. However, the abundance of slaughter and the general context did not protect British hides which lost on average 5 to 10 cents in pounds and, as far as Ireland is concerned, in euros. The price for the British 36+ is £0.75-0.80/kg and unfortunately, the prospects are not improving.

*UK prices in GBP, Irish Prices in Euros, delivered North Italian tannery, payment terms 30 days

	This Week		Last Week 03/20/2020
OX/HFRS	UK	Ireland	UK	Ireland
36.00 and up	0.75-0.80	0.80-0.85	0.83-0.88	0.90-0.95
31.00 – 35.50	0.85-0.90	0.85-0.90	0.90-0.95	0.95-1.00
26.00 – 30.50	0.95-1.00	0.95-1.00	1.00-1.05	1.00-1.05
25.50 and under	1.05-1.10	1.00-1.10	1.10-1.15	1.10-1.15

 
 
 

United Kingdom Lamb/Sheep markets hold steady

*Prices quoted in GBP/pce.

Category	This Week	Last Week 03/20/2020
Sheep skins	No Value	No Value
Hoggets	0.00-0.50	0.00-0.50
New season lambs	NA	NA

 
 
 

 
 

 

United States

 
 
 

Heavy Texas Steers weakly steady

Despite record low prices, trading in Texas was scant during the week. Sales of 62/64 lb. averages were reported at $15.00 and $16.00. Looking at the price chart, today’s sales level is half of what it was at this time last year and down 25 percent from the 2019 low point. Heavier 74/76 lbs. sold for $20.00.

 

 

 

LHCA warns that hide waste will continue in 2020, LHCA warns

The Leather and Hide Council of America (LHCA) has warned that the phenomenon of cattle hides going to waste rather than being made into leather will continue in 2020.

In its outlook for the year, LHCA said: “The leather industry has experienced an extremely tough market for the last several years, which will likely continue in 2020. Plastic synthetic alternatives that look like leather but are not leather have taken significant market share away from the material in consumer product areas such as footwear and automobile upholstery. The situation is so dire that some lower-quality hides and skins are being composted and destroyed rather than processed into leather, a trend that will continue in 2020.”

Hide supplies are likely to stay high in the US. LHCA said an expansion of the US cattle herd, which began in 2014, appears to have leveled off. However, it said it expects slaughter levels to slow only slightly in the first half of 2020.

 
 

THE DAY AT A GLANCE

 

 

• Bids low in volume and price
• Butts $22.00
• Natives $24.00
• USDA slashes meat production forecast
• Alberta NDP, union urges shutdown of Cargill High River plant
• Yue Yuen April sales down 19%
• Xingye Q1 performance loss related to pandemic
• Sellers holding firm

 

 

 

 

BUTT BRANDED STEERS

 

 

1. 62/64 lbs. sold for $22.00.

 

 

HEAVY NATIVE STEERS

 

 

1. Seasonal weights were heard to sell at $24.00.

 

 

HEIFERS

 

 

1. A sale of seasonal weight brands was reported at $15.00 but sources called the price higher than the real market.

 

 

 

 

INDUSTRY NEWS

 

 

 

USDA slashes meat production forecast

In its monthly outlook, the USDA has cut its annual forecasts for pork, beef and chicken production due to Coronavirus outbreaks among plant workers.

The unprecedented U.S. processing disruptions have brought cattle and hog slaughter numbers down by more than 30%.  Across the top four proteins, the USDA reduced estimates by about 4.7 billion pounds from last month.

Total U.S. pork output is forecast at 27.45 million pounds for this year, down from 27.65 million in 2019. Beef production is expected to be 25.83 million pounds, down from 27.221 million in 2019. The USDA predicts that production of each protein will rebound in 2021.

“For 2020, the total red meat and poultry production forecast is reduced from last month as the sector adjusts to COVID-19 and economic uncertainty,” the agency said. “Beef production is reduced as lower expected cattle slaughter more than offsets heavier carcass weights. Pork production is forecast lower on a slower expected pace of slaughter.”
 

 

 

Alberta NDP, union urges shutdown of Cargill High River plant

Financial Post
 

Alberta’s Opposition NDP and union leaders are calling on the province to shut down a Cargill meat-packing plant so it can be determined whether the company is meeting legal obligations to involve workers in safety concerns.

An Occupational Health and Safety report says Cargill didn’t include workers in an internal review last month of circumstances that led to about 950 confirmed cases of COVID-19 in employees at the plant in High River, Alta.

The department has given the plant, which has 2,000 workers, a week to make that happen.

“Unfortunately, one death reported over the weekend was an employee from Cargill who fell ill last month,” said Dr. Deena Hinshaw, chief medical officer of health. “Although we are speaking about this today, the individual was hospitalized about a month ago.”

The union said more employee involvement is needed to make sure the slaughterhouse is safe.

Christina Gray, labour critic for the NDP, told a news conference it’s frustrating that the United Conservative government hasn’t guaranteed the safety of Cargill workers.

“This is not a safe work environment. We believe the government is responsible and the employer is responsible and there must be a public inquiry after the emergency has ended, but that will be a ways away,” she said.

The plant processes about 4,500 head of cattle a day — more than one-third of Canada’s beef-packing capacity. It shut down for two weeks in April because of the outbreak, but reopened last week. The province said Monday there are 36 active cases among workers from the plant, and 911 have recovered.

On Sunday, another Cargill plant south of Montreal announced it will temporarily close its doors after at least 64 workers there tested positive for COVID-19.

A Cargill statement said the OHS has given the company more time to complete its investigation into the High River plant and to further involve the facility’s joint health and safety committee.
 

 

 

Yue Yuen April sales down 19%

Yue Yuen Industrial Ltd., the world’s largest sports footwear manufacturer, reported April revenues of $710 million, down 19.1 percent from $877.9 million in the same month a year ago.

In the four months, sales were down 20.3 percent to $2.68 billion from $3.36 billion in the same period a year ago.

Pou Sheng International Ltd., the retail subsidiary of Yue Yuen, reported revenue of ¥2.2 billion in April against ¥2.48 billion a year ago, a decline of 11.2 percent. Sales in the fourth months were down 21.2 percent to ¥7.15 billion from ¥9.07 billion a year ago.
 

 

 

Xingye Q1 performance loss related to pandemic

Panorama
 

Xingye Technology held its 2019 annual performance briefing on the Panorama Network on Monday. Company’s president Sun Huiyong said that the company’s operating performance has improved significantly since 2018. The company will further adjust its customer structure and product structure according to market demand, actively develop new products and increase the added value of products. On the basis of ensuring the upper leather market, it will actively expand new leather applications and develop new markets. The company has changed from the original single-selling leather to providing a total natural leather material solution according to customer needs, using technology and service as an entry point, and establishing a close cooperative relationship with customers. The company’s first-quarter performance loss was mainly affected by the epidemic and the related production and sales declines.
 

 

 

 

MARKET OBSERVATIONS

 

 

1. Sellers say bids on steers this week are largely $2.00 to $3.00 below last sales.
2. Buyers are walking away from countered bids.
3. Sources note that business in Korea is reportedly very bad and that warehouses in Thailand and Taiwan are full of inventory.
4. Shipping difficulties have eased a bit with vessel space a little easier to come by. Equipment is still a challenge in some areas.
5. Reports of buyers refusing older, more expensive contracts continue to grow.

 

 

 

 

FEDERALLY INSPECTED SLAUGHTER

 

 

Today	91,000
Last week	82,000
Last year	122,000
Week to date	266,000
Last week	237,000
Last year	363,000

 
Tuesday’s slaughter included 65,000 steers/heifers and 24,000 cows and bulls.
 

 

 

 

PRICES AT THE CLOSE OF TRADING TODAY

 

 

SELECTION	WEIGHT	PER PC FOB	LAST WEEK	LAST YEAR
Heavy Texas Steers	64-66	$15.00–16.00	$15.00–16.00	$23.00-24.00
Heavy Texas Steers (Heavy)	76-78	$19.00-20.00n	$19.00-20.00n	$32.50-33.50
Branded Steers	64-66	$13.75–15.00	$13.75–15.00	$22.00-23.00
Branded Steers (Heavy)	76-78	$21.50-22.50n	$21.50-22.50n	$33.00-34.00n
Colorado Steers	64-66	$13.75–15.00	$13.75–15.00	$22.00-23.00
Butt Branded Steers	64-66	$21.00–22.00	$20.00–21.00	$32.00–33.00
Butt Branded Steers (Heavy)	76-78	$23.00-24.00n	$23.00-24.00n	$38.00–40.00n
Heavy Native Steers	64-66	$23.00-24.00	$23.00-24.00	$37.00-38.00
Heavy Native Steers (Heavy)	76-78	$26.00-27.00	$26.00-27.00	$43.00-44.00
Heavy Native Heifers	52-54	$12.00-13.00	$12.00-13.00	$25.00-26.00
Branded Heifers	52-54	$9.50–10.50	$9.50–10.50	$18.00-19.00
Heavy Native Cows	52-54	$2.00-5.00	$2.00-5.00	$11.00-12.00
Branded Cows	52-54	$1.00–2.00	$1.00–2.00	$5.50–6.50
Holstein dairy cows	52-54	$5.00-10.00	$5.00-10.00	$18.00-19.00
Native Bulls	110-120	$8.00-9.00n	$8.00-9.00n	$22.00-24.00 n

 
 

PLEASE NOTE:  Regular reports include interactive price charts for major selections. These have been disabled in the sample reports. To see price charts and spreadsheets, you must sign up for a free trial subscription.

 

 

 

The Week at a Glance:

• Prices stabilize
• APLF presents series of webinars to connect industry
• JBS Pennsylvania beef plant to reopen on Monday
• COVID-19: Cargill meatpacking plant in Fort Morgan scales back
• Perdue aims to reassure as COVID-19 shuts down more meatpacking facilities
• Cattle industry losses expected at $13.6 billion
• Thirty workers at Tyson Pasco plant positive for COVID-19
• JBS Colorado plant closed for at least 2 weeks over COVID-19
• Cargill Canadian facility cuts production to one shift
• Tyson Foods issues Q&A on use of walk-through temperature scanners
• Container volume at major Chinese ports dropped last week
• Pou Chen production in Vietnam temporarily suspended
• Lear takes additional steps to address COVID-19 impact
• Combined export sales 723,600
• Combined shipments 466,700
• Combined outstanding 4,552,200
• Sales exceed slaughter, shipments below slaughter
• Forecast: Neutral
• Market Observations: Not impressed

 

 

 

 

Heavy Texas Steers higher

Again this week, little trading was reported in Texas, which was not surprising given packer positions and lower slaughter. Selections averaging 62/46 lbs. sold higher than last reported at $16.00.
 

 

Branded Steers steady

Branded steers/Colorados were one of the few selections to see much of any active trading this week. Sales were reported in a range similar to last, from a low of $12.50 to a high of $15.00 for 62/64 lb. averages.
 

 

Butt Branded Steers gain $1.00

What trading in butts was reported during the period was generally steady and in some cases, a dollar higher. Averages of 62/64 lbs. sold for $19.00 early in the week but by Thursday sold for $21.00. Some buyers who received bids at the low end of the range countered, holding out for $21.00, given the reduced supply.
 

 

Heavy Native Steers steady

Few natives were available this week given packer positions and the lack of offers. A carryover sale of 62/64 lbs. was reported at $23.50. At the end of the week, a sale of $25.00 for 62/64 lb. averages was reported, but most said it does not necessarily indicate a higher market just yet.
 

 

Heifers

Seasonal weight brands were reported to sell for $10.00. No sales of natives were reported.
 

 

Plump Cows

Buyers looking for even better bargains were numerous this week, with some fishing for anything they could get under $10.00 c&f. After the large sales of the past two weeks, little trading was reported. No sales of cows were reported this week.
 

 

Holsteins

Dairy cows averaging 52/54 lb. sold at $9.50 and $10.00. No sales of dairy steers were reported and packers say that premium types are well sold.
 

 

INDUSTRY NEWS

 

 

 

APLF presents series of webinars to connect industry

Given the challenges related to the pandemic, ALPF has established a number of online tools for connecting industry members during this uncertain time. A series of webinars is one of the tools being presented. Experts and professionals from different industries will focus on Sustainable Fashion, Technology, Trends Forecast, and Hides & Skin Production.

In April, two webinars are planned, and you can see all the online events here.

Beef and Leather in Latin America: Eliminating Deforestation from Supply-Chains
Presented by Mauricio S. Bauer
Moderated by Rafael Andrade
National Wildlife Federation
21 Apr 2020    |    7-8 pm HKT (check your time zone)

International Wildlife Conservation is the international program of the National Wildlife Federation. With over 30 years of experience, the International Wildlife Conservation program combines expertise in the fields of natural resource economics, remote sensing and GIS, international law, and tropical ecology to advance market-based solutions and public policy to eliminate the loss of tropical forests around the world.

We promote “zero deforestation” agriculture production in the tropics, focusing on the commodities that have the greatest impacts on forests and wildlife, such as beef, leather, soy, palm oil, and biomaterials. Our work also focuses on advancing strong and comprehensive international agreements that protect forests and our climate.

This webinar will be presented in English. Save Your Seat.

How can Digital Design, Artificial Intelligence, Digitalized Supply Chains and Smart Factories Become the Main Strategy for Brands and Suppliers in the Post COVID Era?

Presented by Andrey Golub
CEO of Else Corp
28 Apr 2020    |    5-6 pm HKT (check your time zone)
We expected Fashion, Footwear and Leather to become sustainable in the near future. We talked a lot about adapting Digital Design, Smart Manufacturing, and even Artificial Intelligence to those sectors, but just as an option, a privilege for important and well-structured companies.

We dreamed about Digital Supply Chains, B2B platforms… And now we see how quickly COVID-19 is changing the industry from inside out, making “high-tech strategy” the only way to survive. Are we ready? Do we know and understand well enough the technological landscape? Can we filter the buzz and think of the impact on our business?

This webinar will be presented in English. Save your seat.
 

 

JBS Pennsylvania beef plant to reopen on Monday

Seeking Alpha
The JBS Foods Souderton, PA beef production facility, which closed on March 31 after a number of management team members became ill, will reopen Monday. Seeking Alpha cites a Bloomberg story.

The Souderton plant, with a capacity of 2,500 head per day, is the largest beef facility east of Chicago. Before shutting down, it had added a “Saturday kill” to keep up with strong demand by grocery stores.

 

 

 

COVID-19: Cargill meatpacking plant in Fort Morgan scales back

The Denver Post reports that Cargill’s meatpacking plant in Fort Morgan is scaling back operations to protect workers after one employee died from COVID-19 and as many as 18 others have contracted the disease.

Fifteen employees have tested positive for the virus, while three others are considered probable cases, according to data released Wednesday by the Colorado Department of Public Health and Environment.

In a statement, Cargill Protein’s North America Lead Jon Nash said the company is reducing shifts at the plant in order to minimize COVID-19’s impact.

“We’ve taken extra steps to focus on safety and remain operational – including temporary wage increases, bonuses and waiving co-pays for COVID-19 testing,” Nash said. “We also implemented additional safety measures like temperature testing, enhanced cleaning and sanitizing, prohibiting visitors, adopting social distancing practices where possible and offering staggered breaks and shift flexibility. Our facility will be back to operating at full capacity as soon as is it is safe to do so.”

Cargill eliminated the second shift because so many workers were calling out, afraid to come to work, said Steve Vairma, principal executive officer at Teamster Local 455. By eliminating that shift, the company will be able to better clean the facility before workers come back, he said.

“Their representation has been that they’re putting safety ahead of profits and production and that seems to be the case,” Vairma said, noting a shipment of masks is on its way, as well as some of the other health guidelines the company is adopting. “They seem to be putting an effort on this, unlike some other facilities.”
 

 

Perdue aims to reassure as COVID-19 shuts down more meatpacking facilities

Politico reports that the White House appears to be growing more nervous about the increasing press coverage of COVID-19 shutting down major meat plants. US Secretary of Agriculture Sonny Perdue made a rare appearance in the Rose Garden on Wednesday for the daily pandemic briefing to remind food industry workers to comply with public health guidelines.

“We need our local health authorities and our state health authorities to do everything they can to balance the demand of keeping our facilities operational and our critical industries going, while at the same time keeping the health and safety of employees as a top priority as well as our communities,” said Perdue.

Meanwhile, the crisis is growing in South Dakota: One of the largest U.S. pork processing plants reported 518 infections among its employees and another 126 in people connected to them as of Wednesday, according to the Associated Press. That makes the now-shuttered Smithfield Foods plant in Sioux Falls the epicenter of one of the largest clusters of infections in the country.

The South Dakota Smithfield plant accounts for about 5 percent of the country’s pork processing and the mounting list of closures is being felt across the industry. Hog farmers are considering euthanizing animals to deal with the backlog of pigs, reports Pro Ag’s Liz Crampton.

Canadian capacity is also under threat. Cargill reduced production at one of the largest beef-packing plants in Canada this week after several dozen employees fell ill, according to Reuters.

The meatpacking industry is reassuring shoppers that there’s no indication food will become scarce, but if outbreaks worsen and more plants shut down, consumers could see emptier shelves at grocery stores. At the news conference, Perdue reiterated that there is enough food to feed people, it’s just taking some time to sort out the retail supply chain. “I want to be clear, the bare store shelves you may see in some cities in the country are a demand issue, not a supply issue,” he said.
 

 

Cattle industry losses expected at $13.6 billion

Drovers
A new study estimates cattle industry losses as a result of the COVID-19 pandemic will reach $13.6 billion. The study was commissioned by NCBA and conducted by a team of industry-leading agricultural economists led by Derrell Peel, Breedlove Professor of Agribusiness and Extension Livestock Marketing Specialist at Oklahoma State University, to assist USDA in determining how best to allocate CARES Act relief funds to cattle producers.

The study shows cow-calf producers will see the largest impact, with COVID-19-related losses totaling an estimated $3.7 billion, or $111.91 per head for each mature breeding animal in the United States. Without offsetting relief payments, those losses could increase by $135.24 per mature breeding animal, for an additional impact totaling $4.45 billion in the coming years.

View the executive summary here.
View the full economic assessment here.
 

Thirty workers at Tyson Pasco plant positive for COVID-19

Drovers reports that dozens of workers at Tyson Foods’ beef plant near Pasco, Wash., have tested positive for COVID-19. The Walla Walla County Department of Community Health (WWCDCH) said Monday 30 cases were detected among Tyson employees.

Tyson’s Pasco plant is one of the few facilities located in the northwestern U.S., with harvest capacity of 2,300 cattle per day. The plant employs about 1,400 workers.

WWCDCH officials said they are confident Tyson is “taking necessary precautions to prevent, or mitigate, additional spread” of the virus. Tyson has not announced any plans to close the plant.
 

 

JBS Colorado plant closed for at least 2 weeks over COVID-19

Colorado Public Radio
Colorado state health officials have closed the JBS meatpacking plant in Greeley after dozens of workers there contracted COVID-19.

There are 43 confirmed positive cases among JBS workers. A second plant employee died last week, according to the Weld County Department of Health and Environment.

A new health department order published Monday instructs the plant to stay closed until it finishes testing its thousands of employees, disinfecting the facility and implementing social distancing practices. The plant will be closed for at least two weeks, JBS announced Monday, but the closure could extend longer if the company doesn’t meet all the requirements.

Weld County health officials will be conducting random inspections of the plant to ensure the company is complying with the order.

“While the Greeley beef facility is critical to the U.S. food supply and local producers, the continued spread of coronavirus in Weld County requires decisive action,” said Andre Nogueira, the U.S. CEO of JBS, in a news release. “As a leading member of this community, we believe we must do our part to support our local health professionals and first responders leading the fight against coronavirus.”

The company closed its plant in Pennsylvania last week because management employees there were showing flu-like symptoms, according to a company spokesperson.

National Beef closed its Iowa Premium plant in Tama after several employees became infected with the virus. It became the second Iowa meat processing plant to suspend operations after Tyson Foods idled its Columbus Junction pork plant.

Kansas City-based National Beef purchased the Tama plant last year where it employs about 850.
 

 

 

Cargill Canadian facility cuts production to one shift

Cargill’s High River, Alberta., beef harvest facility has slowed to one shift beginning this week, according to RealAgriculture.com. The publications said that the plant will decrease to one shift, with the daily cattle harvest cut down to roughly 1,500 per day from the usual 4,000 to 4,500 per day with two shifts.

Jon Nash, Cargill Protein – North America Lead, said in a statement: “As we continue to prioritize the health and safety of Cargill employees, we have decided to temporarily reduce shifts at our High River protein plant. This will allow us to minimize the impact of COVID-19 and continue to follow health department guidelines. This was a difficult decision for our team, but our values are guiding our actions.

“We want our employees and the community to know we care. We’ve taken extra steps to focus on safety and remain operational – including temporary wage increases, bonuses and waiving co-pays for COVID-19 testing. We also implemented additional safety measures like temperature testing, enhanced cleaning and sanitizing, prohibiting visitors, adopting social distancing practices where possible and offering staggered breaks and shift flexibility. Our facility will be back to operating at full capacity as soon as is it is safe to do so,” Nash said in the statement.

The CBC reported the United Food and Commercial Workers Canada Union local 401 was demanding a two-week closure due to health risks to workers after dozens of positive cases at the plant.
 

 

 

Tyson Foods issues Q&A on use of walk-through temperature scanners

In a news release posted via Globe Newswire, Tyson Foods announced that it has purchased more than 150 infrared walk-through temperature scanners to help ensure a safe workplace for employees during the COIVID-19 pandemic.

So far, four Tyson facilities have the scanners: pork plants in Iowa and Indiana and poultry plants in Arkansas and Georgia. We expect that eventually every one of our food production facilities will have at least one in place.

No beef packing facilities have the scanners as of yet, according to the release.

Read the entire Q&A here.
 

 

 

Container volume at major Chinese ports dropped last week

Seatrade
 

The container volume of China’s eight major ports declined 4.4% for the past week, which is the first weekly decline since the middle of February this year. Affected by the shortage of cargo resources, the average container cargo volume at major Chinese ports declined in the past week, especially the ports at Pearl river delta. Recent weeks have seen major lines starting to blank large numbers of sailings between Asia and Europe/US as the COVID-19 pandemic impacts demand in Western countries.

China Ports & Harbors Association warns of severe challenges for the container sector due to the spread of COVID-19 globally. The association forecasts a 10 to 15 percent decline of container throughput at foreign-trading hub ports in the second quarter of this year.
 

 

 

Pou Chen production in Vietnam temporarily suspended

Citing Vietnamese state media, Reuters reports that Pou Chen Corp, the world’s largest manufacturer of branded athletic and casual footwear for the likes of Nike and Adidas, was ordered to suspend production at its Pouyuen Vietnam facility over COVID-19 concerns.

Pouyuen Vietnam must suspend production for two days from Tuesday after failing to meet local rules on social distancing according to the newspaper Tuoi Tre. The report said the company, which has about 70,000 employees, failed to keep its workers from gathering and keeping a safe distance from one another.
 

 

 

Lear takes additional steps to address COVID-19 impact

Lear Corporation announced it is taking new measures to address industry conditions created by the COVID-19 pandemic.

In addition to previously announced actions to further strengthen its balance sheet and improve financial flexibility, Lear will be implementing the following compensation-related actions, effective April 16:

• There will be a temporary 20% salary deferral for all U.S. and Canadian salaried employees.
• In addition to a 20% salary deferral, Lear CEO and President Ray Scott’s salary will be reduced by 10%, and other named executive officers’ salaries will be reduced by 5%, in both cases for the remainder of 2020. Deferred compensation for the CEO and other named executive officers will not be paid until certain financial targets are achieved by the Company or before all other employees have been paid all owed deferred compensation. Reduced salary will not be paid at a later date.
• Lear Board of Directors cash retainer fees will be reduced by 25% for the remainder of 2020.

 

 

 

Latest US Drought Monitor

This U.S. Drought Monitor week saw drought expansion across portions of the South (Louisiana, Mississippi) and Southeast (Florida) where warm and dry conditions prevailed during the past 90-day period causing declines in soil moisture and streamflow levels. In Texas, significant rainfall across parts of the state led to improvement in drought-related conditions in South Texas and the Hill Country while areas along the Texas Gulf Coast missed the heavier accumulations. In the northern Plains, record-breaking cold affected the region including eastern portions of Wyoming and Montana. Further West, another series of Pacific storms delivered beneficial rainfall to coastal areas and valley locations in California and Oregon while significant mountain snowfall was observed across the Sierra Nevada, Trinity Mountains of northern California, Cascades, and the northern Rockies. For the month of March, the contiguous U.S. experienced its 30th wettest on record as well as its 10th warmest including record-warmth observed in areas of Texas, Louisiana, Mississippi, Alabama, Georgia, and Florida.
 

 

 

 

EXPORTS

 

 

 

Raw hide sales down 19%

Net sales of hides and skins for the week ending April 9th were 695,800 pieces. This is down 19 percent from the previous week’s 858,800 but up 19 percent from the prior 4-week average. Two weeks ago, total sales were 619,300.

Destinations were:

China	620,500
Korea	43,300
Turkey	23,500
Japan	4,200
Mexico	2,000
Indonesia	1,600
Italy	1,400
Thailand	1,400
India	500
Taiwan	-400

Shipments of 411,600 pieces reported for the week ending April 9th. This is up 2 percent from the previous week’s 402,100 and 13 percent from the prior 4-week average. Two weeks ago, shipments were 368,200.
 

 

Wet blue sales down 79%

Net sales of 27,800 wet blues for 2020 were reported for the week ending April 9th. This is down 79 percent from the previous week’s 129,300, and 71 percent from the prior 4-week average. Two weeks ago, sales were 55,600.
 

Destinations were:

Italy	23,500
China	4,300
Taiwan	100

Shipments of 55,100 wet blues were reported for the period, which is down 54 percent from the previous week’s 118,700 and 60 percent from the prior 4-week average. Two weeks ago, shipments were 153,500.
 

 

 

Combined Outstanding up 6%

 

 

 

Combined Shipments down 10%

Combined wet salted and wet blue shipments for the period ending April 9th were 466,700. This is down 10 percent from the previous week’s 520,800. Two weeks ago, shipments were 521,700.
 

 

 

Sales exceed slaughter, shipments below slaughter

Federally inspected slaughter for the week ending April 11th was 536,000. Combined export sales during the like period were 723,600. Adding an estimated domestic consumption of 35,000 brings total sales to 758,500. Combined export shipments were 466,700. Therefore, sales exceeded slaughter by 222,500 and but slaughter surpassed shipments by 69,300.
 

 

 

Wet Blue Splits

Total net sales of 16,100 splits were for Vietnam.  Exports of 329,900 pounds were to Vietnam (322,700 pounds) and China (7,200 pounds).

 

 

 

 

FORECAST

 

 

 

Neutral

For the time being, the decline in prices has been halted due to lower supply. Sellers should be able to hold levels steady in the coming week, leaving us with a neutral bias.
 

Tale of the Scale

The pressure on producers to sell has eased due to the COVID-related slaughter decrease. At the same time, there’s no demand and buyers from China are only looking for bargains. With neither side in urgent need, we are putting the scales in balance this week.

 

3.20.20

3.27.20

4.3.20

4.10.20

4.17.20

 

 

 

How was last week’s forecast?

Meh. We predicted that prices would remain soft and that any changes will be downward. We didn’t foresee the increase in packer plant closings that affected slaughter and helped stabilize prices.
 

 

 

And for the coming week

Prices will be relatively stable.

 

 

This is a temporary lull in the decline growl the bears. Sure, slaughter is down and the market has racked up a few weeks of good sales, but in the end, demand is the only thing that will improve the situation. All those bargain shoppers in China have stocked up on hides and if the orders don’t come, they won’t need to make purchases for quite some time.

 

The bulls are feeling a little less depressed this week. Sales in the past few weeks have been high and slaughter has dropped by 25 percent over that time. This will stop the bleeding in the US hide market — at least in the short term. With COVID-19 infections still not under control in the meat plants, slaughter numbers will likely remain below par, moderating the supply of hides during this time of globally stunted demand.
 

 

 

MARKET OBSERVATIONS

 

 

 

Not impressed

Being a “glass is half-full” optimist in the current pandemic-driven environment can be hard to handle. The same can be said for dealing with the hide market. Discussions this week have led to a few comments that are particularly salient.

Since the start of the year, prices have been sliding, but plummeting slaughter numbers in the past couple of weeks have given packers a breather and stabilized prices for likely a short period of time. But, as one source put it, “Leather orders are the cure for what is going on — the kill does not matter.” He’s right.

Slaughter is down and has more than likely given packer positions a boost, but it can’t last without improvements in demand. As we wrote last week, the sales feeding frenzy is driven by bargain prices not the need for hides. Moreover, a seller noted that the dip in slaughter and lower hide availability “has failed to impress the Chinese,” who, by the way, bought the lion’s share of US hides again last week. Without orders, it’s unlikely that they will keep buying if prices firm up. This is especially true because many tanners are experiencing delayed payments from leather buyers, which creates cash flow issues for them.

The bottom line is that until economies start to phase back into life, the orders won’t come and the market won’t improve. Another tanner told us this week that “the worst is yet to come with regard to damage to our industry.” Unfortunately, he’s probably right too.
 

 

 

 

 

Federally Inspected Slaughter down 6%

 

Federally inspected slaughter for the week ending Saturday, April 18th is estimated to be 502,000. This is 6 percent lower than last week’s 536,000 and the lowest non-holiday week total in decades. For the year to date, FIS is 9,697,000. This is 0.2 percent lower than last year’s 9,715,000.
 

 

 

 

Quotes for Success

“Endurance is one of the most difficult disciplines, but it is to the one who endures that the final victory comes.”
― Gautama Buddha

 

 

 

 

PRICES AT THE CLOSE OF TRADING

 

 

SELECTION	WEIGHT	PER PC FOB	LAST WEEK	LAST YEAR
Heavy Texas Steers	64-66	$15.00–16.00	$12.00–14.00	$25.00-26.00
Heavy Texas Steers (Heavy)	76-78	$19.00-20.00	$19.00-20.00	$33.00-34.00n
Branded Steers	64-66	$12.50–15.00	$12.00–15.00	$28.00-28.50
Branded Steers (Heavy)	76-78	$21.50-22.50	$21.50-22.50	$33.00-34.00
Colorado Steers	64-66	$12.50–15.00	$12.00–15.00	$28.00-28.50
Butt Branded Steers	64-66	$19.00–21.00	$19.00–21.00	$37.00–38.00
Butt Branded Steers (Heavy)	76-78	$26.00-27.00	$26.00-27.00	$43.00–44.00
Heavy Native Steers	64-66	$23.50-25.00	$22.00-23.50	$42.00-44.00
Heavy Native Steers (Heavy)	76-78	$31.00–32.00	$31.00–32.00	$48.00-49.00n
Heavy Native Heifers	52-54	$16.00-17.00	$16.00-17.00	$28.00-29.00
Branded Heifers	52-54	$9.00–10.00	$10.50–15.50	$21.00-22.00
Heavy Native Cows	52-54	$1.00-2.00	$1.00-2.00	$13.00-14.00
Branded Cows	52-54	$1.00–2.00	$1.00–2.00	$7.50–8.50
Holstein dairy cows	52-54	$9.50-10.00	$8.00-9.00	$21.00-22.00
Native Bulls	110-120	$8.00-9.00	$8.00-9.00	$22.00-24.00 n

PLEASE NOTE:  Regular reports include interactive price charts for major selections. These have been disabled in the sample reports. To see price charts and spreadsheets, you must sign up for a free trial subscription.

 

 

 

The Week at a Glance:

 

• Prices lower
• Pollution issues continue to plague Chinese tanneries
• Trickle down effect of Payless bankruptcy
• Combined wet salted/wet blue export sales 442,300
• Combined wet salted/wet blue shipments 609,400
• Combined wet salted/wet blue outstanding 3,208,300
• Slaughter exceeds sales/shipments ahead
• Forecast: More of the same
• Market Observations: How long will the buyers market continue?

 

 

 

Heavy Texas Steers mixed

 

 

Texas steer prices attracted the most attention, after dropping  precipitously at the APLF in Hong Kong last week. As the trade dispersed on Friday, the price range on 62/64 lbs. was $68.00 and $69.00 lbs or $75.00 or less c&f.

This week, one packer managed to achieve a sale at $70.00 but this was the exception rather than the rule The bulk of sales, like in Hong Kong, were between $68.00 and $69.00. 74 lb. minimum averages sold at $71.00,  also steady to Hong Kong. One reported  trade at 70 lbs. and up at $75.00 was not deemed to be market indicative according to some members in the trade. Over-all volume appeared to be moderate.
 

 

Branded Steers lower

Most of  the business in this category was in Colorados. However, one  selection that contained some natives traded at $71.00 after rejecting bids at $68.00 up to $70.00 on seasonal weights. Trading posted on Colorados typically sold at $64.00 and $64.50 on averages between 62 and 66 lbs.
 

 

Butt Branded Steers down $1.00-$2.00

Buyer interest on butts was decent but only at lower prices. The highest level posted was at $73.50 on seasonal weights early in the period. Most trades were consummated by mid week at $73.00 on 62/66 lb. averages. A reported trade at $72.00 could not be confirmed. A sale on 68/70 lbs. was heard at $80.00
 

 

Heavy Native Steers down $2.00

Native steer sellers were forced to succumb to lower bids as the week wore on. Early in the period sales were made at $77.00 generally on 62/66 lb.wight, but by today, some bookings were seen down to$75.00 on the same or similar averages. 68/70 lbs. were posted at $83.50, up from last weeks nominal quote.
 

 

Heifers $1.00-$2.00 lower

Heifer trading appeared to have picked up a bit this week. Heavy native heifers sold at $57.00 on 50 lbs. and up and brands were posted at $54.50.
 

 

Plump Cows down $1.00

 

 

The cow sector was not immune to declines in steers and heifers. We did not have any confirmed sales of heavy native cows but brands sold down to $38.00 and $39.00 on seasonal weights.
 

 

Holsteins nominally lower

The same slow down in furniture upholstery demand in China, and elsewhere has affected tanner interest for dairy cows at previous levels. Dairy cows were essentially unquoted by producers but rumors were heard of sales down several dollars from Hong Kong levels. As usual premium productions were dollars higher.

 

 

 

BULLS

Natives with a small brand percentage sold at $55.00 Laredo on seasonal weights. 100/110 lb. Midwestern brands were available at $50.00 Laredo.
 

 

SMALL PACKERS

60/62 lb. natives sold at $44.00. There seemed to be more supply available than tanners interested in buying at current levels.

INDUSTRY NEWS

 

 

Pollution issues continue to plague Chinese tanneries

Chinese tanners and their municipalities are on guard for the countries EPA equivalents which could come at anytime without warning. If not complaint, they are apt to be immediately closed. This is one reason a number of tanners want to have only minimal raw stock inventory to tan. The Shangdon and Fujian areas are said to be vulnerable targets. We have been advised that sometime local EPA authorities will even go around and make “night checks” on suspected non-compliant tanneries.

There have already been multiple tannery closings in some area’s such as Hebei, and contract tanners are operating on a volume basis to provide blue for those that have closed.
 

 

Payless Bankruptcy trickle down affects

The filing for Chapter 11 bankruptcy by Payless Shoe stores is likely to have a negative effect on the tanning industry in China and elsewhere. The Company has listed creditors mostly made up of footwear industry players but as one tanner said today, if these shoe factories that we sell can’t pay us because they lost too much on Payless, how can we continue to operate??

EXPORTS

 

 

 

Raw Hides sales down 40%

Net sales of raw hides for the period ending Marc 30th were 225,900.  This is down 40% from last weeks 376,700 pieces  and 34% below the previous four week average.

Exports of 470,100 pieces reported. This was up 14% from the previous week and 18% from the prior 4-week average. Destinations were:

 

China	119,400
Korea	31,300
Taiwan	30,900
Mexico	30,100
Brazil	5,900
Vietnam	4,100
Japan	3,400

 

 

Wet Blue sales jump

Net sales of  216,400 were more than double last weeks 107,000 and were up 74% from the previous four week average.  Destinations were:

 

China	84,500
Italy	72,900
Mexico	31,400
Thailand	12,600
Taiwan	10,400
Vietnam	4,700

 

Exports of 139,300 wet blues for 2017 were down 14% from the previous week, but up 1% from the prior 4-week average.
 

 

Combined outstanding down 5%

 

 

Combined raw and wet blue outstanding for the reporting period ending March 30th totaled  3,208,000.  This is down 5% from last weeks 3,374,100 pieces. Two weeks ago, 3,471,300 were outstanding.

 

 

 

Combined Shipments up 6%

 

Combined raw and wet blue shipments for the period were 609,400. This is up 6% from last weeks 575,800. Two weeks ago, shipments were 530,200

 

 

 

Slaughter exceeds sales/shipments above

Export sales totaled 442,300, Adding an estimated 35,000 hides consumed domestically and the total becomes 477,300. Slaughter for the relative period was 593,000. Shipments for the like period were 609,400.

Therefore, slaughter surpassed sales by 115,700 pieces but shipments exceeded slaughter by 16.400 pieces.
 

 

Wet Blue Splits

Net sales of splits totaling 176,800 pounds  resulted as increases for China (180,300 pounds) were partially offset by reductions for Vietnam (3,400 pounds). Exports of 54,000 pounds were down 92% from the previous week and 91 % from the prior 4-week average. The destinations were China (50,000 pounds) and South Korea (4,000 pounds).

 

FORECAST

 

 

After all of the travel and the excitement of the APLF , we still see ample supplies of  hides for sale this afternoon. This leaves us with a bearish bias.
 

 

Tale of the Scale

We are again leaving the scale of supply and demand titled to the left again today.  Unless we see some surprisingly strong export numbers released by the USDA next Thursday, our impression remains that producers typically need to sell more hides and blue than tanners need to buy.

 

3.10.17

3.17.17

3.24.17

3.31.17

4.7.17

 

 

 

How was last week’s forecast?

Excellent. We correctly foresaw lower prices on all selections and that’s what occurred
 

 

And for the coming week

We again think that will see lower prices on just about all selections in the week ahead

 

 

The bears continue to smile as prices declined again this week They say that kills that are about to significantly increase. The winding down of the footwear selling season, as well as some accessories, is creating a supply surpassing demand situation, and with it lower prices to continue.

 

The bulls say the current decline, often known as the Hong Kong dip will soon run it’s course and prices will stabilize. There is still a good demand for hides  as too many tanners have been cautious in their buying and are still in need of inventory. In short, latent demand is abundant

MARKET OBSERVATIONS

 

 

How long will the buyers market continue?

Tanners appear to be firmly in control of the current market. Our impression is that there are few if any who want any hide inventory coming into the summer months. and why should they?

This is why the term “Hong Kong Dip’” gained notoriety some years, ago, but it really has nothing to do with the APLF Fair in Hong Kong. It’s merely coincidental that prices tend to fall as  the primary leather buying season for footwear brands especially, (still about 55% of leather consumption) slows down in late Spring and early summer. As one pundit notes, the hides that will be made into footwear for the back to school/fall selling season are already in the process of being transported to and being processed by tanneries to make into leather to supply shoe makers.

This year there is more rationale for tanners, in China  to operate conservatively for fear of government crackdowns  on pollution issues .Those that are complaint should be ok for the time being, but there are  many who cannot afford to do so and they are at risk

Finally, it takes a strong conviction to buy a single more hide than is needed when prices are falling. Buyers typically have the mindset to believe that prices will continue to  fall so their logic is why rush to buy until they turn around again. Of course that’s the time when the market bottoms and all those in need rush to buy.

Regardless, this is why we think that tanners are in control of the market be it in China or elsewhere. Prices are still not historically cheap and leather business while not bad, is far from booming in most sectors. We feel that while  many tanners have a reasonable open to buy position, they find no reason to participate in the current price climate.
 

 

Federally Inspected Slaughter

 

 

Federally inspected slaughter for the period ending April 8, 2015 is estimated to be 573,000. This compares to last weeks 593,000 head  For the same week a year ago, FIS was 536,000. Year-to-date slaughter is 8,170,000,000 or 6.1% above 7,710,000 a year ago. This means that there have been 46,900 more hides placed on the market so far this year, than last.

Quotes for Success

Spend eighty percent of your time focusing on the opportunities of tomorrow rather than the problems of yesterday.”
–Brian Tracy

 

 

 

PRICES AT THE CLOSE OF TRADING

 

 

SELECTION	WEIGHT	PER PC FOB	LAST WEEK	LAST YEAR
Heavy Texas Steers	62-66	$68.00-70.00	$68.00-69.00	$65.00 – 66.00
Heavy Texas Steers (Heavy)	70-74	$70.00-71.00	$76.00-77.00 n	$71.00 – 74.00
Branded Steers	62-66	$65.00-66.00 n	$66.00-67.00 n	$62.00 – 63.00
Branded Steers (Heavy)	70-74	$72.00-72.50 n	$72.00-72.50	$68.00 – 70.00
Colorado Steers	62-66	$64.00-64.59	$65.00-67.75	$60.00 – 61.00
Colorado Steers (Heavy)	70-74	–	–	–
Butt Branded Steers	62-66	$72.00-73.00	$74.00-75.00	$71.00 –  73.00
Butt Branded Steers (Heavy)	70-74	$80.00- 83.00	$78.00 – 83.00 n	$74.00 –  $7600
Heavy Native Steers	62-66	$74.00-75.00	$76.00 – 78.00	$73.00  –  74.00
Heavy Native Steers (Heavy)	70-74	$80.00-83.50	$79.00  – 80.00 n	$79.00 – 80.00
Heavy Native Heifers	50-54	$56.00-57.00	$59.00 – 60.00	$59.00 – 60.00
Branded Heifers	50-54	$54.00-54.50	$55.00 – 56.00	$57.00 – 58.00
Heavy Native Cows	50-54	$48.50 –50.00	$48.50 – 50.00	$42.00 – 43.00
Branded Cows	50-54	$38.00 –39.00	$39.00 – 40.00	$33.00 – 35.00
Holstein dairy cows	50-54	$58.00-60.00 n	$61.00 – 62.00	$52.00 –  55.00
Native Bulls	100-110	$54.00- 59.00 n	$54.00- 59.00 n	$51.00 – 54.00