US Perspective—19.08.08
Big packer hide prices in the States have become somewhat vulnerable since our last report and are off anywhere from fifty cents to a dollar depending on the selection. Given the general sentiment in the trade some additional corrections are more than likely. HNS are trading at between $67 and $69 depending on the selection and origin, while HTS are struggling to bring levels of $67.50, although packers still insist they can trade at $68.
BS, on the other hand, appear as if they have suffered the most with reports that many packers are willing to trade at $65.50 this week. Heifers have not been able to escape the downward pressure; we have reports of HNH at $59, while HBH are only able to bring levels close to $56.50.
The cow hide market is in shambles with prices anywhere from $2 to $5 off last month’s trading levels, depending on the selections. Sources are saying that HNDC are struggling to bring levels of $52, while we have confirmed reports that HNC are no better than $45-$47. Meanwhile, HBC appear to have suffered the brunt of the pressure. There have been reports that numerous sellers are contemplating bids at $40-$42 delivered and, if our sources are correct, we suspect there will be some volume done yet this week at these levels. Bull hides have also been unable to escape the downward pressure. We have reports on Natives struggling to trade at levels of $57.50, while Brands are barely able to trade higher than $50-$51.
Meanwhile, the nation’s slaughter is hovering at around 665,000 head as supplies of live cattle are tightening and this has forced packers to pay more for cattle in the past couple of weeks. And, although packers have been able to stop the decline of box beef prices and obtain more money for boxed beef in the last week to ten days, packers have seen their margins slashed in half and are now putting roughly $25-$30 per head into their pockets. Looking ahead, with the traditional end of the summer grilling season coming swiftly to a close and the back-to-school season fast approaching, we are expecting beef demand to follow its usual seasonal trend and slowly decrease moving forward.
