What happened this week: Despite all problems and concerning news the trade is slowly beginning to regain the normal pattern of activity and production. Premium tanners are gathering speed, although not in all markets and not for all products. The trend has not yet reached the mainstream and the general mood remains damped. The upholstery business is lagging the most. The phenomena of the production cycle resuming later each year after summer holidays has been accelerated this year with a shift of production to China. These periods of uncertainty and interruptions are hard for the raw material markets and for suppliers who are not tied into regular supply chains, weighing on the general mood. Yet the role of psychology, substantial in the past markets, is fading more and more today. Short term directions can still be changed and short term movements created but, looking at the events of 2004 - BSE in the USA and an uncertain summer - neither excitement nor pessimism have had a major impact on the prices. The real volatility of prices over the past nine months shows there has rarely been a period in history before where real revenues have been as stable as this year. What does not fit in anymore are the prices at the abattoirs which have risen steadily over the year and no longer reflect the market situation. The balance between raw material supply and demand has been globally intact at a given price level but there is a chance that part of it was created by the production overcapacity in China. It can be assumed that we will soon know more about it. At the moment the decision is put on hold until tanners know if they can fill their drums with orders and decide how they are going to handle the results. Until then – and this could mean even mid October – the market will continue to be driven by uncertainties and individual decisions. Sales during last week have been increasing further mainly thanks to old clients in Europe and the Middle East but not from the Far East. Prices were more or less steady but below asking levels. Cow sales were quiet due to the absence of Chinese and Italian buying. Isolated trades were more coincidental than planned and slightly reduced levels had to be accepted. The kill: The kill improved again a little during last week after the lower level from the week before. Prices for live cattle are currently attractive for farmers. In view of the changes in the subsidy policy the appeal of cash before the weather deteriorates might be the reason for it. What do we expect? Everyone awaits the return of the Asian cow buyers. Although tanners feel that waiting might save them some money, the attempt to hit the bottom has failed many times. We still think that the price range for 2004 remains intact and business will recover when we have adjusted again to the lower levels of the range. In mid October the air should be clear again.
|
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 |
€ 1,55 |
Steady |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,45 |
Weaker |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,55 |
Weaker |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,45 |
Weaker |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,30 |
Weaker |
|
Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
25/26 kg |
€ 1,52 |
Steady |
|
|
30/39,5 kg |
36,0/37,0 kg
|
