US Perspective—02.11.10
03/11/2010
The market is steady with prices holding. Generally, most people are saying there is more interest and tanners continue to complain about prices. There were a moderate number of sales reported today with several prices showing upward movement. On the high end, BBS and HTS sold for $74, both prices recorded in the last week. Packer HNS sold for $75; HNH, $64; and HBH, $62? which were new highs. Some people were less bullish towards the end of the week, indicating that business was down and anything over $80 C&F was not attainable.
USDA export sales report for week ending 10/21 has another strong week of both sales and shipments, which surprised a number of people in the trade. For the week combined sales of hides and wet blue were 673,500 and shipments 622,400. Both sales and shipments are greater than their yearly averages of 576,123 and 599,326 and have been so for most of the past several weeks. These higher results confirm reports from suppliers that their forward sales positions are positive and likely have much to do with the market’s firmness.
Wet blue sales and shipments last week were 145,800 and 123,700 with the largest destination being Italy with 49,400 net pieces. Year-to-date wet blue sales and shipment totals were 5.62 million or 133,800 average weekly and 5.8 million or 138,095 respectively.
This year through week 42, shipments of cattle, hides, and wet blue are lagging behind slaughter by 2 million or 47,600 pieces weekly. The 2010 numbers for slaughter, sales and shipments are 27,180,000; 24,197,195 and 25,171,700. The numbers for the same week in 2009 were 26,674,000; 25,716,500 and 26,708,000. Those for 2008 were 27,650,000; 25,782,800 and 26,608,400.
There are a number of people indicating they will wait out the high hide prices and stay on the sidelines and some are expected to buy limited quantities. Suppliers in general are saying they are well sold and are intent on holding prices. Once again, it is business as usual as the dance begins.
On Friday of last week, the USDA released the Livestock Slaughter Report for September 2010. The report continues to illustrate the trend of higher-than-normal cow and heifer slaughter this year. As more breeding stock is killed off, it will eventually decrease the available cattle for slaughter?and ultimately the resulting hides supply.
Over the first nine months of this year, total cattle slaughter was 25.194 million head, with 7.49 million heifers and 2.629 million fat cows. This compares to last year with 24.67 million total, 7.294 million heifers and 2.371 million fat cows. Year-on-year, slaughter is up 519,000 head, with the majority comprised of 200,000 heifers and 258,000 fat cows. Compared to last year, slaughter of fat cows is up 10.9%.
This past September, the pattern continued for cows. While overall slaughter was down 61,000 or 2% from August, fat cow kills were up 18,000 at 303,000 or 6.33%. In September 2009, fat cow slaughter was 271,000, making this September’s breeding cow kill 32,000 or 11.8% greater.
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