What happened this week: The Easter break in most countries came at a good time. An extra day’s  holiday was required to relax after the big challenges of the weeks before. In many countries, governments had promised new decisions with regard to the coronavirus restrictions and politicians were also benefited from having a few days off to think, discuss and decide. 

In most countries the decisions were pretty much the same. Some fractional and small easing, but in general there is common position that only the freezing of public life can be effective to act against further threat. There is hardly anyone in the world who is critical of these decisions. Only a few voices are left openly discussing if the price of the safety of some and the economic consequences for most people can justify a decision for all. One has to assume that many books will be written about all these ethical and moral questions when the corona crisis has passed and a full evaluation of the damage and casualties can be made. One thing is certainly sure already today: it is going to be a very hefty dispute and it is unlikely that it’s going to reach any consensus.

In the meantime people and businesses continue to struggle. One can sense how serious the long-term consequences are going to be and it wouldn’t be a surprise if most people’s standard of living took a hit. At the moment there are promises of all kinds of money being spent, but one day we will be back to the question of how all this is going to be repaid, if ever. Many countries around the world were already struggling with national debt; it is definitely beyond most people’s imagination to work out how this might be managed with the new numbers that are going to accumulate in the near future. Rising taxes might be the least of the action taken.

We are dealing with a lot of questions. For how long will the lockdown remain in place, when can production and retail return to ‘normal’ and, the biggest question of all, how is the consumer going to react and how much money will be available to be spend with rising unemployment?

In the coming months, many family budgets will welcome the restrictions of summer travel, but this is going to be bad for countries that depend on tourism. However, it will leave more money in people’s pockets for other things. Falling gas prices and reduced driving will create a massive saving in many wallets. This could be one of the few hopes for the leather industry. When people need to stay more home they might be willing to spend more on quality furniture. Some may treat family members with some other small item made from leather too.

Business this week was a bit of a reflection of the week before. In northern Europe the active tanners continue to fill their drums on a week-to-week basis. Production seems to be somewhere around 60%. Italy is still closed and will only slowly return at the beginning of May. How many tanneries will open then is still the big unknown. China was the most active market this week and, in sympathy with the wave of purchases of hides from the US, some special interest was also directed at Europe. A few cowhides sold with the main interest from China and the focus on the better and heavier types. The hype about the interest from the collagen industry faded.

The kill: The shortened week reduced the kill and, in general, business is being reported as less than satisfactory. The kill continues to drop and so far there is no end to the trend in sight. Feedlot cattle will have to be slaughtered sooner or later while cows and heifers are preparing to re-enter the fields. 

What we expect: We are interested to know if the Chinese buying is going to continue. The return to normal there seems to trigger the idea that no one should miss any cheap hides whether they have received leather orders or not. Let us hope this spills into Europe too.

Share this story: