Prices firm on low slaughter

USDA figures show that the cattle inventory for January 1, 2006, was 2% up at 97.1 million. Cows and heifers that have calved were 1% up at 42.3 million against 41.9 million a year earlier.

A joint report from USDA and Statistics Canada show the Canadian inventory as being down 2% at 14.83 million. Cows and heifers that have calved were down 1% at 6.33 million.

Trade got off to a slow start due to the Lunar New Year holidays as buyers from China and Taiwan and other Asian countries stayed away from the market.

Korean tanners were prompt to return but business was insufficient to mop up all the hides that were produced.

According to the National Cattlemen's Beef Association, consumer demand for beef fell by 3.6% in 2005, reversing a previously upward trend when Americans showed an increased preference for eating beef.

They blame part of the fall on the fact that 2004 saw a surge in beef demand to the tune of 8%. Overall the beef demand index has increased by 20% since 1998 when a long decline in beef eating was reversed. Most of the increase has occurred since 2001.

Tyson Foods, parent of former IBP, have reported a drop in earnings. Sales from the most recently ended quarter amounted to $6.5 billion while net profits fell a massive $10 million from $48 million to $39 million. John Tyson said that beef lost $64 million, compared with a loss of $16 million a year earlier.

Tyson have also announced that they are to close their slaughter and processing facilities in Norfolk and West Point, Nebraska. They say that their new plant in Dakota City will increase efficiency and capacity and that productivity should go up by 6%. This makes the closures 'the right strategic decision'.

Reports from the Las Vegas Furniture Show were optimistic about the amount of leather upholstery being ordered. They go so far as to say that it accounts for 25% of the American market and is expected to grow further.

Lear Corp have lost their contract to supply interiors for the next generation Dodge Ram pick-up truck. The contract was estimated to be worth $400 million. Lear fell out with Chrysler when they threatened to stop supplying unless Chrysler allowed them to pass on price increases from their own suppliers.

Chrysler took them to court in December to force Lear to continue to honour the terms of their contract. The case has now been settled out of court but the terms have not been disclosed. However, Lear and other similar suppliers can consider themselves well and truly warned.

US raw hides sold for export in the four-week period to February 9 saw China again in pole position with 980,000, followed yet again by Korea with 559,200. Taiwan was in third place with 165,800 followed closely by Mexico with 130,500 and Hong Kong with 113,600.

This gives China and Hong Kong a combined total of 1,093,600. Thailand came in sixth place with 58,100, then Japan with 50,900. Italy purchased 31,000, Vietnam 16,000, and the Dominican Republic 9,600.

Smaller quantities went to Canada with 4,000, Spain 1,500 and Bulgaria 1,000.

The Domenican Republic also bought 34,200 calf and kip, Italy 33,200, Taiwan 6,500 kip, Japan 4,100, India 1,400 and Mexico 2,900 kip.

On the wet-blue front, Hong Kong took 86,000, Mexico 51,200, Italy 45,800, Domenican Republic 40,100, China 31,000, Korea 27,900, Taiwan 27,600, Thailand 12,600 and Indonesia 12,000.

Wet-blue splits were apportioned 1,713,700lb to Hong Kong, 1,277,200lb to China, 524,100lb to Italy, 215,000lb to Indonesia, 213,700lb to Mexico and 44,000lb to Taiwan.

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