USDA expecting further high slaughter numbers

Published:  15 August, 2017

The USDA projects for the week ended on August 5 an output of 634,000 head, followed by 641,000 head the week after which, if confirmed, would be the highest number in the past four years.

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Hope of a correction in German prices

Published:  15 August, 2017

Slaughter is at its seasonal low, and expected to climb in a couple of weeks, as the average weight of cowhides is low, in part linked to the improved conditions in the milk industry.

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Sauer index shows price uplift for sheepskins

Published:  15 August, 2017

For the small skins indexes we report an unchanged situation for goatskins and prices have in general remained at the same levels as a month ago. For sheepskins, the recovery in prices continues and most origins report an uplift in prices, especially for skins destined for doubleface or wool-on applications. Nappa demand remains weak but it appears to be in a better place than it has been for some time, or maybe it should be said that it is not as bad as it was rather than saying the market is better. The sheepskin market has been strengthened by an improving picture in the Turkish tanning sector and better relations with Russian buyers. In addition, Chinese buyers have been more active and going forward much will depend on the winter weather and if sheepskin leather can become more fashionable again. To see the latest Sauer Report Indexes click here

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Weaker peso helping Argentina's tanners

Published:  07 August, 2017

The Argentinean peso weakening against the US$ is said to be helping local tanneries regain competitivity, but the other costs that they have to sustain locally, still keep them much on the margins of international trade. The difficult situation in the internal market is also unhelpful in uplifting prices, with business described as sluggish. 

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U.S. hide prices not bottomed yet

Published:  03 August, 2017

The first signals that the market has not found a bottom yet came from the early trades this week, with yet another raft of prices moving down across the board. As the week progresses these signals are confirmed, as more reductions in the region of US$1.50-2.50/hide are reported on a cross-section of hides encompassing steers, heifers and cows.

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Brazilian market weakens

Published:  02 August, 2017

The market in Brazil is reported as weakening further in the past couple of weeks, with wet-blue quotations sliding another US¢5/sq ft on average. This comes following recent price drops in the U.S., including those for wet-blue, where Brazilian tanners have to compete in the current tight market. 

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Belgian trader margins squeezed

Published:  27 July, 2017

Cows 24/26 kg are still priced US$55-56/hide, but due to the drop of the exchange rate between euro and US$, their profitability has sensibly reduced. In general, traders see their margins squeezed by the high prices of cows at the abattoir and aggressive low bids from customers, compounded by an unfavourable exchange rate when hides are sold in US$.

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Winter change over in Australia

Published:  27 July, 2017

As we enter the winter changeover period between shorn lambs and spring lambs, prices remain stable in Australia. With a number of meat plants still on long term closure, others are closed for winter maintenance or on reduced production for maintenance and upgrades. Accordingly, supply is further down and supporting prices. 

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Stronger currency hits Brazilian exporters

Published:  24 July, 2017

The recent recovery of the real, due to perceived improvements in political stability, is widening the gap further. Downstream, the real appreciation will reflect negatively on the leather exporters margins, as the international conditions leave little room for higher prices. However, the ample retreat of the raw hides prices witnessed in recent months should provide sufficient cushion for tanners to withstand the challenge. Currently, due to the holiday period in Europe, Chinese buyers are said to bolder in their downward bids, against a market that remains sluggish and not responding to seasonality with prices falling worldwide.

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Indian demand drop hits Kenyan exporters

Published:  20 July, 2017

The demand for low-grade hides out of Kolkata, India, was possibly one of the few segments in the hide market functioning until recently. It was helping the exporters in Kenya withstand an otherwise difficult situation and encouraged them to tan more raw hides.

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Strong wet-blue exports from Brazil

Published:  20 July, 2017

A look at Brazilian export data for the first semester of the year, reveals how most export items from the tanning industry are suffering from a decrease in both volume and value compared with last year. It can be as bad as 42% less by value as in the case of crust, or moderately better for finished leather, with a 7% fall. The only notable exception is wet-blue (excluding splits), which has shown quite positive numbers for the first half, up 23% in value, to US$306 million and 34% in volume, to 33.3 million sq m. June monthly results were particularly good, with a year-on-year increase of 115% and 73% volume and value, respectively. 

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An improving picture in Turkey

Published:  18 July, 2017

As the climate in the local leather pipeline has improved compared with a year ago, two issues that are now affecting the local hide trade. The first, in counter-trend with most countries, is the increase in the price of hides. Somewhat shielded by a stronger Turkish lira just recently, the upward drift taking place in the last few months has shifted prices up.

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Hide market under pressure

Published:  18 July, 2017

July has seen the hide market under real downward pressure. Chinese buyers returned low bids to the offer lists that the big processors and U.S. hide dealers sent out.

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Growing interest in German low grades

Published:  11 July, 2017

tivity on the hides market drags on with a limited number of sales and the usual limited volume. An unanticipated amount of interest is reported around lower grades and cheaper selections. This is interpreted negatively though, meaning either (or both) that the better grades are uncompetitive in the current market or that the prices of leather remain under so much pressure and buyers are chasing less expensive raw materials. 

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Brazilian hide prices still showing weakness

Published:  11 July, 2017

The price of green hides continues to sink to new lows, by ceding another R$0.08/kg over the past week. This means an almost 18% slide since the peak recorded at the beginning of March, with the heightened international competition along the whole leather value-chain and the weakness of the internal market playing key roles. 

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U.S. slaughter numbers remain high

Published:  11 July, 2017

The week ended on June 24 proved to be another peak for U.S. slaughter, with the total figures keeping very close to those of the week before and just below the 639,000 head. The slightly lower numbers of steers (355,000 or 10,000 less than the week before), were compensated by an equal increase of heifers culled, at almost 161,000. Cows, at 110,000 head were slaughtered in almost the same numbers as the week before.

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French market quietening down

Published:  11 July, 2017

The hide market has largely quietened down in recent days, with sales in the past few weeks almost exclusively towards European tanners. Asian customers remain 'window shoppers', preferring cheaper alternatives such as U.S. or even UK origins. Despite that, prices remain relatively firm at French abattoirs, with big packers better positioned to resist against lower bids, due to their sold forward positions. The bull hide market is reported as unchanged, with regular demand for quality material from the big car upholstery tanners showing no signs of weakness.

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U.S. slaughter numbers remain firm into June

Published:  16 June, 2017

The USDA weekly slaughter figures for the week ending June 3 show that 562,533 head were killed. Considering it was a short working week (4 days) the figures are quite impressive and not far from the full weekly numbers that were reported last year. 

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Tanners resistant to higher U.S. prices

Published:  16 June, 2017

As theSauerReport forecast earlier this week, it seems that tanners are not willing to enter the market and purchase hides at current prices unless absolutely necessary. Any ideas of further increases are being rejected and prices remain generally static. There has been some marginal softening of Northern spready dairies by half a dollar and branded steers are up by the same amount. 

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Some auto tanners cutting back August soaks

Published:  16 June, 2017

There has been confirmed reports of cow hide sales to China in the past week at slightly increased prices of $1. This has put a floor on the value of cows but has meant that traders and, of course, abattoirs who salt their own production having to realise the losses on cows will hit their bottom line. However, this turns out to be nothing but a small crumb of comfort as automotive tanners have cut back in their soaking plans for July and August. 

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Weak hide prices in Argentina

Published:  09 June, 2017

Much like in neighboring countries, neither the internal demand nor the international markets seem to support an improvement in raw hide prices, which remain at the bottom with no clear sight of an improvement in the short term. The storm involving JBS, which operates several plants in the country, has so far failed to impact the hide market. After the announcement of the takeover from another Brazilian giant, Minerva Foods, of five JBS plants in Argentina, any shock coming from this side appears even less likely.

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The Sauer Indexes updates and analysis

Published:  07 June, 2017

The four Sauer Report indexes for bovine (general), goat, sheep and bovine upholstery have been updated and confirm that in general the price of bovine hides has declined over the past month whereas goatskin prices have remained largely static and for sheepskins the new seasonal demand for doubleface items in particular has lifted average prices. 

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Dutch calf prices hold firm

Published:  06 June, 2017

The short-lived recess of calfskins sales seems to have ended already, with major producers affirming they are well sold-forward for the summer, and are already closing contracts for delivery after the holidays in August. Under the current market situation, prices will likely remain stable, unless an unanticipated number of early-movers will put pressure for their rise.

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Demand for German heavy hides remains

Published:  06 June, 2017

The situation in Germany resembles that seen in other European countries except for the heavy hides, which enjoy good demand in the European market. The cheaper American hides and the favourable dollar exchange rate continue to keep Asian markets out of reach for German sellers. On the other hand, the scarcity and ease of selling heavy hides has embolden abattoirs in keeping their lists largely unchanged even for types less in demand, such as lighter bulls, heifers and cows. 

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JBS scandal affecting hide prices

Published:  02 June, 2017

After holding out for a few weeks, the pressure on the price of raw hides resulted in yet another down-tick, marking a new low in recent history. According to CICB, the average price of raw hides slid by 3% in week 21. For reference, the current price is around 7% below the average level which held for most of autumn and up to the end of January, and 13% below the peak reached at the end of February.

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Steadier U.S. prices as sellers resist

Published:  02 June, 2017

By several accounts, last week and the first part of the current one were far less active than the previous week, which was the top of a three-week rally in terms of sales. Prices of both raw and wet-blue hides have largely remained unchanged since. The improved position of sellers allowed them to resist the incoming lower bids, reportedly between US$1-3/hide below the previous level, and business was concluded at steady prices.

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Australian prices beginning to fall

Published:  02 June, 2017

Weekly hide supply in the Eastern States is holding at more than 130,000 which is similar to March levels, but higher than would have been expected at this time of year, as we head into winter. Numbers will logically fall in the next few weeks.

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Prices falling in UK and Ireland

Published:  02 June, 2017

The climb-down of UK prices continues at steady pace, both at the abattoir gates and on traders’ pricelists. The main problem remains the lack of demand due in part to the seasonal ebb, but also to the negative repercussions of the competition. US prices have stabilised over the past week, but large volumes have changed hands in recent weeks, flooding markets traditionally in the domain of other suppliers, such as the U.K. One case in point is Italy, where recent numbers from the USDA confirmed such a scenario. This has left U.K. traders with no option but to try to catch up with the developments.

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Moderate improvements in Turkey

Published:  23 May, 2017

Different indicators point to the improved state of affairs, among which rising raw hide prices, also due to lower local slaughters.

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