Higher weekly cull signals a stress test for the supply chain

Worldwide
Published:  11 June, 2020

The latest weekly cattle slaughter figures in the U.S. showed that over 636,000 head was reached in early June and the upcoming weekly cull figure is expected to be over 650,000 head according to USDA figures. With this increase comes the moment that many analysts in the hide and skin business had been expecting and will have an impact on raw materials prices.

According to Ian Banks, Editor of the raw materials for leather pricing and market analysis website, theSauerReport; “This really will be a stress test for the industry, for not only are hide numbers in the U.S. rising but also across Latin America and parts of Europe as the lockdowns are eased. After the huge buying sprees by tanners in April, there has been a downturn in demand from leather makers in China and other Far East countries. Now with this increase in supply, tanners will be able to pick and choose like never before, at prices they desire. With European tanners struggling to get their businesses back off the ground, this really is open season for tanners with orders in the pipeline. But, it must be remembered that without finished leather orders, then even a hide at a zero price level is expensive. This for sure is going to be interesting times for suppliers from the U.S. and elsewhere, both those that sell in the raw (wet salted) and wet-blue.”

The concern is that for many of the less desirable raw material selections or lower grades, the market price will be uneconomical for sellers and will lead to perfectly usable hides and skins being landfilled. 

To find out more about theSauerReport visit theSauerReport.com website, or email Clare Worton: clare@edifydigitalmedia.com