What happened this week: What was difficult last week became easier this week. Most of the regular sales of bulls were concluded. The abattoir buying for December was disappointing at the end and the expect sharp declines finished in only marginal declines and in some cases even at unchanged money. So even with sales concluded most of the price reductions we had to take come out of the processors pocket and let margins erode again. At the end sales numbers were very good considering, that we are mid December. Beside the regular sales of bulls to the European customers we had more inquiry for dairy cows again and sales to Italy and also to the Far East were concluded on full asking levels. We are and were impressed by the enormous volume of shipments we can still generate and next will be one of the most active shipping weeks of the year. Extremely unusual as normally tanners wind their business down and push shipments into the next after week 50. All this is to the discomfort of our office staff, which will be busy until the very last moment prior to Xmas. However, from the business perspective it is quite comfortable and confirms, that many tanners business cant be so bad. One could even assume, that they take the hides for tax reasons, what would consequently mean that the economical result of the year hasn’t been too bad. However, the year is now reaching its final lap. Apart from the day to day business one has to look into next year and the greatest worry is the supply side. There are talks, that many farmers have used the last weeks to sell their disposable bulls, because the combination of reasonable cattle prices plus the EU-subsidies with their pay-out at the end of the year add up to acceptable returns. This would explain the high slaughter numbers of the past weeks, but would also mean, that we have to expect a sharp drop beginning of January. From the demand side business can be expected to be slow in the first half of January and might see a stronger pick up in the second half when European and also Far Eastern tanners should be active again for various reasons.

The kill: The kill continued on the steady high levels. Our expectation for a continuation of the high levels seems to be true. The take-over of the Moksel group by Dutch B.V. Sopel might have influences on structure of the German beef industry in the medium term.

What do we expect? We would be surprised if next week will be an active week. We have to finalize a few pending issues, but we don’t see anyone who still needs to act. From what we know everyone has concluded what needed to be done. European prices look now quite attractive in the international price structure and so no price movements can be anymore expected until mid January 2003 when more news about kill, price and currency changes are available.