US Perspective—07.12.10
07/12/2010
Courtesy of www.thejacobsen.com
The hide market last week was quiet. Prices remain steady-to-firm as tanners brace themselves to do business in a bullish environment. Besides tanners struggling with higher prices, higher hide costs are increasing the capital requirements for traders and processors, which increases exposure and operating expenses. This is a problem that is becoming bigger for more people in tight capital markets.
The amount of interest shown by buyers was mixed, depending on who you talk to. Interest at the start of the week ranged from “decent for this time of week” on one end of the spectrum to “very slow” on the other end. A packer HTS was sold for a new high of $75, while other sales all traded in the past week’s range.
The average “guestimated” slaughter forecast for this past week according to the Urner Barry poll of industry respondents is 664,444. This number is a little over 26,000 more than last year’s actual slaughter for the same period at 638,366. The previous week’s Thanksgiving holiday-reduced estimated federally inspected slaughter to 582,000.
Prices were steady or within the previous week’s trading ranges.
Livestock slaughter through October this year continues to trend with higher fat cow and bull slaughter than last year. In the recently released USDA report, total federally inspected slaughter through October was 28.0036 million, up 2% from the same period last year. Other cow or fat cow slaughter for the period in 2009 was 2.691 million or 9.8% of the kill compared to 2.995 million or 10.6% this year. Bulls were 1.7% of the slaughter in 2009 compared to 1.9% this year.
In October, the push of cow slaughter continued with 11.6% this year compared to 11.3% in 2009. Bulls at 1.9% this October were the same for both years. Reasons for the increase in cows killed this year include higher cost of feeds and higher prices for cows and bulls.
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