United Kingdom

A hide trader reports this is the quietest December for throughput of volume in memory. Two cut-price supermarkets, Aldi and Lidl, are bringing in cheap meat from Eastern Europe and demand for the more expensive UK products has diminished as normal people feel the pinch of the austerity measures. All but one of the abattoirs report lower numbers this month. One reports to be killing normal numbers (we shall see if the next official Defra numbers when published confirm this). All talk of decreasing herd sizes and the newspapers write about dairy farmers closing. Whether this is balanced by rising numbers in Eastern Europe is not known. Maybe this backs up those who talk of hide price rises in Jan/Feb when supply shortages may take centre stage again. Also, what people perceive and what actual official data shows may be two different things. — Lambskin prices are slowly rising and sales have been reported. As was explained not so much because of sudden demand but in order to build some inventory for when the (expected) demand shows up.

Lamb-sheep

The shoe trade media report that footwear is on high on the Christmas present list in the USA. Various UGG products are mentioned as absolute bestsellers in Australia. This could have a strong influence on demand for Australian (and South African) skins shortly. To be monitored closely by those interested.

Mexico

The Mexican hide trade seems in turmoil. A strong reduction in activity because of the Christmas holidays, the weakening world markets, the lower prices from the USA in both raw and wetblue have all led to prices in North Mexico dropping some 10%. But in Central Mexico they remained unchanged while in Southern States they even went up. Hard to explain! Offers from the US are lower but the dollar rate is up and hence American hides did not get that much cheaper (if at all). However this did not seem to have increased demand for domestic hides either. The shoe industry is continuing its fight against cheap imports from Asia and although a lot of help is received from the government this war is still not won. The car industry to the contrary continues to expand and will support the car leather industry even more.

United States

Steer hide prices continue to fall and one begins to wonder how far down it can still go. Heifer prices remained unchanged and in the cow hide sector there seems to be some stabilization or at least a slow down in reductions. The lower prices bring sales however but one supposes that quantities will be limited since there are no signs that hides cannot cost less again in the days to come. Most tanners will continue to bid down and take what is accepted or withdraw and try again a few days later.

France

The cattle kill in France is considered normal for the time of the year and unlikely to change shortly. The kill does not produce a reason to change prices. The hide trade is slow with prices that can always be a little bit (not much) negotiated. Basically tanners who still buy are tanners who are in real need and cannot wait. Most others already have what they need and can afford to wait till mid January.

Hide price corrections

An interesting presentation by an international trader about present hide price developments. He says that in the run up to this summers record prices over the last couple of years many people started buying to make sure they had material without keeping a keen eye on the price versus quality relation at the same time. At a certain moment everything was ok and sold. Now that the market seems to turn around, people see the mountains of material of inferior quality left over from previous production series and hard to sell. They now decide to buy far more selective in the future. Our man says that therefore what we see today is not a general fall in prices but a return to a correct price/quality relation. And that that is why the best calfskins and hides are much more able to stock to their high prices and allow only minimal reductions when necessary while the bigger price drops concern all material that is not really that good.