What happened this week: Not too much, as always at this time of the year. Europe has now almost completely closed down and is not delivering any further activities or news. Hence the only communication left is dealing with overseas customers and opening the morning mail. L/C and shipping matters dominate the work at the moment. There is some market activity left and bids are still coming in decent numbers, however, what all sellers around the globe already realise is the increasing resistance against the present market levels. Any interest coming in at the moment is either well below the market prices, and cannot even be compensated by the higher dollar value, or it is asking for cheap stocks. The volume of mail asking for cheap, low grade material has been great. It includes not only inquiries from regular contacts but also from destinations normally not dealt with. What does this mean? In our opinion it is just another confirmation that prices have reached their upper end for the moment, not in Germany and Europe alone, but also in other markets of the world. We think that this is even more dominant in cows than bulls. The price level which we have reached for females is close to historic high levels. Previously, when this level for cows was reached, the market ran out of steam and corrected itself. We have not quite reached the full level yet but we are nearing it and the risk is rising. Bull hides are still priced at a fair level but they continue suffering from limited outlet opportunities in the Far East and, at least for the heavier end, are still under the control of European customers. We are in a difficult situation because leather business remains quite good and tanners have to buy but cannot, in most cases, afford the present raw material levels. This cannot last very long and the tensions will be resolved in one way or another. The classic scenario is a decline in demand, quite likely in the coming weeks, and an increase of supply guaranteed from September onwards. The present firmer trend of the dollar will help to reduce the pressure on prices but don’t expect it to absorb everything. More important now is to get abattoir prices back under control, as they have run high in the last months and need to be adjusted to safe levels before the higher slaughter begins. Keeping a real and active market environment leaves everything open for emotions, guesses and speculation, making the situation difficult. The kill: The kill will continue to be very low since we are in the peak season of holidays. More surprising are the very low average weights. This would have been more normal in June and at the beginning of July but not at the end of July and August. We hope numbers and weights are going to increase soon. In the next 6 to 8 weeks we shall also be in the position to tell how the kill will react to the new subsidy policy in the EU. What do we expect? We think that, with most players on holidays, the market will remain steady on paper with hardly any activity around. Patchy sales to Asia might be the only activity ahead. Prices should stay steady in euro terms but we might see the erosion of the dollar.
|
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 |
€ 1,40 |
Steady |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 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 |
€ 1,43 |
Steady |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,25 |
Steady |
|
Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
|
