US Perspective – 11.08.20
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Packers entered last week in possession of offer lists that were as large as they had been for several weeks. In spite of an increase in the number of selections offered, packers also appeared as if they were in the mindset to obtain higher prices and the majority of selections offered started at levels roughly fifty cents to $1 higher than the week prior.
Most members of the trade enjoyed a noticeable improvement in the number of bids they saw last week, although we did speak to a handful of sources who shared that they were not nearly as fortunate. Interest appeared to be fairly broad-based and not predominantly just from tanners in China.
We can attest to sellers having a decent week of sales, and popular opinion of many pundits is that it is likely packers at least sold their production, if not more. Meanwhile, as to trading levels, the consensus of the trade is that prices were roughly a dollar higher than the previous week, while there were even a few isolated incidents of some packers achieving even higher prices.
Elsewhere, reports from the cowhide trade claim offer lists from producers last week were not as populated. Sales were not as plentiful as in the past couple of weeks and it appears producers were successful in obtaining higher prices.
Packers were forced to pay more for cattle for the fifth consecutive week, while obtaining any appreciable increase in box beef prices has not been an easy task, reducing what had been some rather lucrative margins.
It will certainly be interesting to see how large offer lists are this week, especially keeping in mind that most producers have been touting that they enjoyed a decent week of sales last week. In addition, it will also be interesting to see if producers attempt to raise asking prices again this week.
Meanwhile, the $69,000 question is how is business for tanners, and especially shoe tanners. We are already aware of reports of automotive and furniture tanners appearing as if their business has improved. However, with the shoe and handbag business still having the lion’s share of leather demand, if we are going to see any further appreciable demand in hide prices we need some sustained demand from side leather tanners.
