Kill increase fails to materialise

11 January 2010

This meant that there were fewer than expected animals required for slaughter and this helped keep cattle prices towards the bottom end of the price range.
This turned out to be agreeable to the farmers because the mild September and October has meant that the grass continued to grow and they were able to keep their cattle out in the fields without incurring any extra feed costs.
Furthermore, the farmers’ press advised their readers that they believed that cattle prices would rise by the end of the year and for the farmers to hold on to as many cattle as they could. This has resulted in the farmers only bringing in cattle that were ready for slaughter and had to be moved off the farm and this has been evident in the weight of hides coming to the yards.
On the sales front there has been pressure on lighter weight hides from Italy and there has been a definite slowing up in the opening of letters of credit from China.
Indeed there have been some problems with acceptance of L/Cs by the Chinese banks that have not arisen before. This may be an indication of the tightening up of money supply within the Chinese banking system. The uncertainty in the Italian market is further compounded by the arrests of some tanners for alleged tax offences and all the rumours that are swirling through the market place.
Life on the procurement front in Ireland has also been difficult for the past two months as new competitors have entered the market place and driven up raw prices sharply to the point of rendering the hide and skin business unprofitable.
This situation will continue for the forseeable future until the new entrants tire of overpaying for raw material. We have seen this all before and we will see it again sometime in the future.
In the international market place the developments in the beef sector in South America will have a knock on effect in the European market eventually, especially if South American tanners concentrate on processing their home production and stop sourcing hides from the UK and Ireland.
For many years the South Americans have bought top quality hides from the UK and Ireland. Indeed there has been some speculation that the beef industry in those countries could become attractive to the big groups from South America. A number of the big meat companies in the UK and Ireland are under the control of the men who started up the businesses and who are now approaching, or who have passed, retirement age.
This actually reflects the age profile of the average farmer in Ireland from whose ranks these men came from. Therefore, they might be interested in a hefty cash offer for their business. If that happened there would be huge changes in the hide and skin trade in the UK and Ireland.
So we have our problems, the new ones outlined above and, of course, our usual ones such as currency fluctuations and honouring of contracts. Prices for hides seemed to operate within a range and at the end of October were generally as follows:
36 kg+..........................70-72p ($1.09-$1.13)
31/35.5 kg....................78-79p  ($1.22-$1.24)
26/30.5 kg    85/86p ($1.33-$1.35)
Cows went for £19/£20 ($29.83-$31.40). All prices are ex yard.
Skin prices firmed on longer wool length on the skins. We are now in the fellmongering season and China is the main market. Prices at the end of October were £4 ($6.28) per skin ex yard.

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