German Perspective - 26.06.18
26/06/2018
It sounds easy but this is not really the case. In many regions an adequate infrastructure to handle the problem does not exist. The beef industry is still looking for other options and many will remember the old saying that a hide will never be dumped or destroyed. Consequently there are efforts to look at all other possible options to use the hide in case this trend in the industry continues. Collagen, gelatine, pet food and even human consumption are options, but nobody is prepared for this.
This does not mean that manufacturing stops or the end of tanning. It just means that the gap that has opened up with the substitution of leather has to be closed. We need to redirect just a certain part of production until leather demand picks up and offers a better revenue than any of the alternatives. The road towards achieving this is long and painful.
In Europe we still have a long way to go. We still have plenty of scope for going lower in prices and before the worst case scenario is reached a lot of other hides from other origins would fall off the stage. However, a fair analysis of the quality and price ranking of the individual grades is certainly recommended.
In the meantime we have to deal with the weekly realities and business opportunities as they are. They reflect the present situation. Regular grades for regular clients find their level and even if prices continue to be under pressure, sales and clearance of stock is guaranteed. For any surplus, or grades that do not have a steady customer base, the situation is different. Interest is not plentiful and it is not easy to find the right price. Whatever one asks, on the basis of regular sales and the relative prices at the abattoirs, it will bear no relation to what the casual client, mainly from Asia, will have in mind. When you receive any interest, it is not an option to negotiate as we all used to; you can take it or leave it.
We have not seen any overseas buyer for a long time who has been desperate to cover raw material needs or nervous about shipping time. It seems that even if they fail in their price ambitions there is either no need or plenty of other options to work on.
This week was pretty much the same. Apart from regular European bids, which had still to be done prior to the holidays, there were a few bids for cow hides from Asia. Buyers bid far below the asking price and claimed that there was somebody from somewhere who had bought at this price already and therefore this was the price they were prepared to pay.
The firmer US dollar helped a bit, but any kind of attempt to ask for improvements in price were in vain and so from the few bids, very few ended in a sale. The only realistic options were in heavier and better type cows; there was no chance for any light or third-grade hides. Even in the most depressed conditions in the market, some of these bids were absolutely unacceptable. Adding the weekly sales up it was once again a pretty disappointing week. Prices for cows were once again about 3% down for the few hides sold.
The kill: The weather has changed a bit; we have had rain and colder temperatures. However, this has not changed anything in regard to the kill. Numbers and weights are low, which is good in terms of numbers, but bad for our calculations, looking at the weights.
What do we expect: We can skip this section for a while. We remain in a downward trend and are not able to create a solid enough plateau for demand, price and business levels. So, it will continue to be a challenging summer watching the World Cup.
| Type | Weight range | Avg. green weight | Salted weight | Avg. weight salted | Price per kg green weight | Trend |
| Ox/heifers | 15/24,5 kg | 22,0/23,5 kg | 13/22 kg | 20/21 kg | € 2,10 |
Stable |
| 25/29,5 kg | 27,5/28,5 kg | 22/27 kg | 25/26 kg | € 1,15 |
Weak |
|
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ n.a |
Weak |
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 0,90 |
Weak | |
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 0,85 |
Weak | |
| Bulls | 25/29,5 kg | 27,5/28,5 kg | 22/ 27 kg | 25/26 kg | € 1,70 |
Weak |
| 30/39,5 kg | 36,0/37,0 kg | 24/34 kg | 31/33 kg | € 1.65 |
Stable |
|
| 40/+ kg | 45,0/48,0 kg | 34/+ kg | 38/40 kg | € 1.55 |
Stable |
|
| Thirds | 15/+ kg | 25,0/27,5 kg | 13/+ kg | 24/26 kg | € n.a. |
Weak |
| Thirds bulls | 30/+ kg | 38,0/40,0 kg | 24/+ kg | 33/36 kg | € 1.00 |
Steady |
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