‘Staggering decline’ in the hide’s share of cattle value
The Leather and Hide Council of America (LHCA) has said the consequences of the covid-19 pandemic are proving to be “particularly acute” for the US hide and leather industry.
In comments on May 5, LHCA said the hide and leather section in the US was already having to contend with weaker global demand and declining prices, as the sector is in most markets around the world. One of the consequences in the US, though, is that hides now account for a tiny proportion of the overall value of the animals the beef industry sends to slaughter.
All by-products from the slaughter of a steer have traditionally accounted for between 8% and 10% of the total value of the animal. This is known as the total drop credit value of the animal, comprising all of the non-meat by-products of beef production. The hide has typically brought the largest share of this by-product benefit, reaching between 6% and 8% of the total value of the animal.
Between 1980 and 2011, hides averaged 58.3% of the total value of cattle by-products for a steer weighing around 1,000 pounds or 450 kilos, LHCA said. This reached a high of 67% in 2000. In 2015, hides accounted for approximately 48% of total by-product value and by 2019, hides comprised nearly 37% of the total drop credit. That figure stood at an estimated 27.7% on March 31, 2020.
At the end of April, a US steer hide had a value closer to 1% of the entire value of the animal. LHCA said this may be the lowest percentage on record.
The price of steer hides has fallen by as much as 49% compared to April 2019. “This has further eroded the hide’s once-dominant share of the steer’s drop credit value,” LHCA said. “Hides presently constitute only 15%-20% of the total by-product value of the animal, a staggering decline from 50% a few years ago.”
