With all the hype seen in the US market, most players here had to understand that this was not a general move, and dairy cows never really participated in the market advances. Consequently, any requests for price increases on dairy cows in China have been completely in vain for some time. So, this has to be taken from revenues in € and this has not reflected in the abattoir market for some time. With the upholstery tanners in Europe also being stubborn, the only loophole left for heavy material was in the vegetable section, where a certain type of heavy cow was still able to find a home. For the rest of the market the motto was ‘take it or leave’ it once again.

The vegetable leather business is still the shooting star, and there were more inquiries for suitable hides this time, with good volume from the Middle East. This also explains why UK/Irish heavy hides are firmish and why their lighter weight colleagues are suffering and even had to make some further price concessions. However, most tanners from the Middle East looking for supply were disappointed not to find any material that really fitted into their desired price ranges. However, sales in males for the shoe and leathergoods section remained steady and good, despite a lot of grumbling tanners around the globe buying the hides and paying the present market levels.

If there was any really good news this week, it was that more interest was finally seen for sheepskins and a lot of sampling was requested. Whether this is just a flash-fire, or whether this very cheap raw material has now finally been discovered by the industry, still remains to be seen in the first quarter when the real season starts. As far as sales were concerned, most hides – with some effort – were cleaned up again, perhaps with one exception: lighter weight cows. Either suppliers tried to mix more in their deliveries into Italy or one has to take the present (insufficient) price ideas of the Asian clients which look even worse today due to the weak $. Despite all the sales and market activity, the private discussions about the future of the market continue and more people are worrying about payment issues, at least in Europe. Everybody knows that struggling enterprises in the present financial community, such as banks or underwriters, will not be rescued anymore. While certain small incidents have already taken place this year, everyone is hoping that nothing too serious is going to hit the trade.

The kill: The kill now remains steady at the increased levels. Weights have climbed up and the slaughter mix is seeing more, and heavier, heifers. This has been appreciated as there is much more demand for them in the maket than for cows. The abundance of rain this week is starting to push the last of the cattle off the fields and the present slaughter levels should remain steady for several more weeks.

What do we expect: At least in some areas of our market, the $ exchange rate has had an effect. This applies for all hide types which normally find homes in Asia. The 3-4% drop in recent weeks has not yet been reflected at the abattoirs, but it cannot be ignored forever. As soon as the sales positions into Italy have dried up, this will need to be considered in the abattoir prices.

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