What happened this week: In the two weeks following Bologna, trading activity was reasonably quiet. Yet last week, sales activity picked up again and the total number of hides sold was satisfying and sufficient. We try not to complain about margins but, once again, it was almost impossible to convert improved interest into sufficient selling prices. This is nothing new and the trade has to accept that the margin problem is entirely related to the purchasing prices of hides.

Interest was spread across the board but – as usual – the selling of bulls, and in particular of ox/heifers, has been substantially easier than the sales of cows. The inquiry for heifers remains impressive. Shoe and automotive tanners show a particular need for this type of material which now is, unfortunately, in the lowest production season of the year, so many had to leave unsatisfied. The price spread between heifers and cows is consequently widening further, reflecting the current leather market situation where standard upholstery leathers are still in the doldrums. Dairy cows needed the seller’s full attention for hides to be moved and one can only hope that shipments will be made according to the contracts, ensuring a secure product flow over the next few months.

We are still affected by the difficulties in obtaining acceptable price levels. Taking the official price levels of US dairy cows into consideration, one should have been able to get about 10% more for the hides that were finally obtained. So, selling prices are stuck in the middle of the normal trading range of $45-50 for standard products and weights. Fortunately, the currency was not an added burden which made the ‘take it or leave it’ decision a little easier. As a result, we still have no answer to the question whether the European cows are too cheap or the US dairy ones too expensive. At least one can sense that some of the less preferred European origins are disposing of reasonable unsold inventories as they are getting a bit more nervous with the summer holidays approaching fast.

Good quality extra heavy weight cows face fewer problems and are still well received by European upholstery tanners. There was also considerable interest in cheap and light kips. Although always a price and quality battle, one can generally find a number of interested parties to choose from, in particular from Italy. The only other interesting market news was the finally confirmed bankruptcy of a small German processor and the changes in management staff in one of the leading names of the German hide and leather trade. Neither can be seen as a positive sign and highlight the problems that companies currently have to deal with. 

The kill: The kill remains steady but at low levels. A holiday last Monday cut into the total production again and average weights, especially for bulls, are falling rapidly. These developments are not helping the current situation. We have a good reason to believe that in the coming weeks there will be no improvement in numbers.  

What do we expect? For over eight months we have not seen a price variation of more than 5% and there is no reason why this should change in the forthcoming weeks. While bulls and heifers continue to stay on rock solid ground, cows remain below 40 kg under latent pressure which is only eased by the firmer US dollar. The battle here is fought between the European sellers and Asian tanners, as we no longer expect any movements from Europe. The situation is bound to remain difficult.

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	Steady
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.35	Steady
Dairy cows	15/24.5 kg	22.5/23.5 kg	13/22 kg	20/21 kg	€ 1.45	Weaker
	25/29.5 kg	27.5/28.5 kg	22/27 kg	25/26 kg	€ 1.28	Weaker
	30/+      kg	33.5/35.5 kg	27/+   kg	29/31 kg	€ 1.18	Weaker
Bulls	25/29.5 kg	27.5/28.5 kg	22/ 27 kg	25/26 kg	€ 1.52	Share this story: Leatherbiz.com cannot be held responsible for content if the language setting is changed from English. The translations provided by Google Translate are automated and therefore might not be accurate and may contain incorrect, offensive or misleading language. We offer this facility as a guide only.