What happened this week: The market continues in an indifferent state, which we have now witnessed for several weeks. Most trade finds it extremely difficult to understand why activity is so volatile at a time of the year when business is normally at its most active and good both on the demand and supply side. October and November of 2004 have shown quite a reverse trend with business activity failing to reach levels normally expected after the summer. Everything seems to be in the process of restructuring. The beef business in Europe is preoccupied with butchers fighting for survival and has dragged the by-product industry with it. The tanning industry is facing a similar period of consolidation and shifts of productions, both playing havoc with the order the entire supply chain is used to. Sales this week have brought no sought-after breakthrough and have been rather sporadic with interest mainly in light and very cheap material. Orders for the next summer season, particularly for those articles, seem to be reasonably good. There has been isolated interest in dairy cows from the Far East but the total volume of sales remains unsatisfying. The demand for dairy cows from Italy can be at best called coincidental. Interest for bull hides and ox/heifers has improved a little bit but failed to impress due to reduced production in automotive leather. On the whole, most of the interest this week has focused on abattoir buying, the biggest headache of all, where substantial reductions needed to give the market a solid footing have not been achieved. Butchers claim both their business and margins are pretty poor and that they are fighting for every penny obtainable from by-products. As a result, buying prices once again do not reflect the present market situation and hide processors’ margins remain as squeezed as before. In addition to the problems of the daily trading, we also believe that the shipment of material is no longer as smooth as it should be. Letter of credits have not been arriving on time and the number of complaints from the trade is on the increase. All this clearly reflects a hide market struggling to get back into balance. Higher seasonal kill, particularly of cows, is not making things easier and everyone should already be preparing for a substantial decline of slaughter in 2005, something few worry about today. Prices have not reacted much and sales ranged at levels of the previous weeks or just slightly below. The kill: With the nights getting colder the kill remains at normal and high seasonal levels. The slaughter of cows is as high as one expected but, surprisingly, we are still missing the higher numbers of males expected at the end of the year. Many now believe that, if at all, the higher kill of males will not arrive before mid December. What do we expect? In the forthcoming week we do not expect a change in the market pattern. Unless we see a recovery in the value of the dollar, prices will continue to ease further. As always, cows will suffer more than males which will experience moderate corrections as the market trend stays soft.
|
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 |
€ 1,50 |
Pressure |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,38 |
Pressure |
|
Dairy cows |
15/24,5 kg |
22,5/23,5 kg |
13/22 kg |
20/21 kg |
€ 1,42 |
Pressure |
|
|
25/29,5 kg |
27,5/28,5 kg |
22/27 kg |
25/26 kg |
€ 1,34 |
Pressure |
|
|
30/+ kg |
33,5/35,5 kg |
27/+ kg |
29/31 kg |
€ 1,16 |
Pressure |
|
Bulls |
25/29,5 kg |
27,5/28,5 kg |
22/ 27 kg |
25/26 kg |
|
