Business remains at a standstill

Autumn typically carries with it both a renewed spirit for tanners and an influx of leather orders for the tanning industry in Mexico. This represents that time which most Mexican tanners have been looking forward to all year. That time when all tanners alike can recoup their costs for what the prior months have generally considered a sluggish business, mediocre, at best. However, even now, when certainly tanners are more optimistic and business is generally better, the Mexican tanning community continues to be plagued by both internal and external factors, which are causing the business to remain at a lackluster standstill. While the usual main factor driving the business continues to be the stability of the currency, it is also now facing uncertainty with regards to other key issues. Yes, the peso/dollar relationship is under control for now, however liquidity still remains a certain hiccup. But for even those tanners who manage to overcome this consistent scenario, a reduced cattle kill in the United States is also now majorly affecting exports into Mexico. There are those medium to larger sized tanneries which are being faced with reduced kills of those specific items necessary to make the fall season a success. Small packers and renderer kills usually demonstrate an increase following the summer months. However, for what is considered average to normal this precise time of year for those items, their kills are nearing all time lows here in the US. No. 3 cattle hides, mainly renderer and the machine-damaged type, appear to be plentiful. Yet, interestingly enough, this particular item is becoming less and less attractive to the Mexican tanner, who is requiring an increased quality for a demanding consumer and market, in general. Additionally, Canada, also considered a major exporter of conventional cattle hides of all selections to Mexico, continues to struggle with BSE detected in late May of this past year. Although the export of cattle hides is permitted across the US/Canadian border, the export of live cattle is not. This situation is only adding to the already reduced live cattle kills in the United States, certainly contributing to the Mexican tanners' ability to fully appreciate the local demand for finished leathergoods as well as to fulfill already placed Christmas and end-of-year orders. Without a doubt, the Mexican leather business is sizzling at the moment. While visiting León last week, it is clear tanners are strategically positioned not only to contract, but to immediately liquidate truckloads of varying cattle hide grades. The issue at hand today lies exclusively on the supply side. Ana Veloso Barrett Hides Inc