View from the US25 September 2023
After weeks of stagnant prices and what sources called a “boring” market, US hide sellers managed to start pushing steers a little higher at the end of July. While demand was still not up to par in most segments, packers were well-positioned enough to hold out for higher levels. By the first week of August, however, customers were seriously pushing back against rising hide prices.
The price of heavy Texas steers firmed, with seasonal weights hitting a high of $27.00, a couple of dollars better than our last report. Colorados also saw prices rise, with 62/64lb selections selling for as much as $26.00 at the start of August.
Hide selections for the automotive sector saw the most interest as production had ramped up and buyers were actively purchasing. Heavy native steers, which were in short supply, saw prices go up by as much as $4.00 to a high of $37.00 for seasonal weights.
In the cow market, interest was healthy enough to keep prices relatively steady; however, any price improvements were hard-won and incremental.
In July, weekly rawhide sales averaged 396,150, 5% lower than the June average. Compared with July 2022, the figure is 15% higher. With regard to rawhide shipments, they averaged 398,625 in July, down just 1% from June but incrementally higher than the same month last year.
Weekly wet-blue sales averaged 132,900 in July, up by 14% from the June average and 38% higher than in July 2022. The month’s average wet-blue shipments were 117,650. This is 10% higher than the June average but 17% lower than in July 2022
July cattle inventory down 3%
All cattle and calves in the US on 1 July 2023 totalled 95.9 million head, 3% below the 98.6 million head on 1 July 2022.
All cows and heifers that have calved totalled 38.8 million head, 2% below the 39.6 million head on 1 July 2022. Beef cows, at 29.4 million head, down 3% from a year ago. Milk cows, at 9.40 million head, were unchanged from the previous year.
Cattle and calves on feed for the slaughter market in the US for all feedlots totalled 13.1 million head on 1 July 2023, down 2% from the previous year. Cattle on feed in feedlots with capacity of 1,000 or more head accounted for 85.5% of the total cattle on feed on 1 July 2023, up slightly from the previous year. The total of calves under 500lb and other heifers and steers over 500lb (outside of feedlots), at 34.4 million head, down 4% from the 35.7 million head on 1 July 2022.
The 2023 calf crop in the US is expected to be 33.8 million head, down 2% from last year. Calves born during the first half of 2023 are estimated at 24.8 million head, down 2% from the first half of 2022. An additional nine million calves are expected to be born during the second half of 2023.
US cattle on feed down 2%
Cattle and calves on feed for the slaughter market in the US for feedlots with a capacity of 1,000 or more head totalled 11.2 million head on 1 July 2023. The inventory was 2% below July 1, 2022. The inventory included 6.73 million steers and steer calves, down 3% from the previous year. This group accounted for 60% of the total inventory. Heifers and heifer calves accounted for 4.47 million head, unchanged from 2022.
Placements in feedlots during June totalled 1.68 million head, 3% above 2022. Net placements were 1.61 million head. During June, placements of cattle and calves weighing less than 600lb were 390,000 head, 600–699lb were 275,000 head, 700–799lb were 380,000 head, 800–899lb were 368,000 head, 900–999lb were 185,000 head, and 1,000lb and greater were 80,000 head.
Marketings of fed cattle during June totalled 1.96 million head, 5% below 2022. Other disappearance totalled 69,000 head during June, unchanged from 2022.
Through most of July, the US hide market was rather lifeless in addition to being hard to understand. Prices were steady as they had been for many weeks. Sellers were well positioned, and they could keep material moving, but the price levels were weak and improvement was next to impossible.
Hide market Through most of July, the US hide market was rather lifeless in addition to being hard to understand. Prices were steady as they had been for many weeks. Sellers were well positioned, and they could keep material moving, but the price levels were weak and improvement was next to impossible.
By the start of August, steers were well sold and packers were trying to get more. They had been able to firm prices over the course of a couple of weeks but could not really move the overall market higher. Small price improvements were still challenging to accomplish, and it was a battle over $0.25–0.50 to close a sale at higher levels.
Ultimately, some selections managed to make gains. Butt branded steers and heavy native steers rose in price by a few dollars. This was thanks to automotive sector customers who increased their purchases, but other steers selections remained steady and did not come up in price that much. Overall, business to buyers in Mexico for automotive was very good, also boosted by the stronger peso against the dollar.
Purchasing for some other sectors had picked up a little, although how much was for orders and how much for warehouses was the big question. As always, China has been the biggest buyer, accounting for about 80% or more of rawhide export sales for several weeks. In this case, one source said that “money is cheap and so are hides”, which could be driving the sales of good quality hides at still-low prices.
Sources pointed out that the price of cured hides also depends on the quality of the selection and even the plant of origin as well as the buyer. As is the case everywhere, low-quality material is tough to sell and faces a lot of competition from South America and other regions.
With regard to wet-blue, those purchases were also higher in July, but as one seller pointed out, the year-to-date total is still lagging.
In addition to good forward positions, sellers could also thank lower slaughter for the firmer market. As noted above, the US cattle herd is smaller and cattle on feed numbers are lower. Moreover, beef prices were declining, putting packer margins in the red, so they were not motivated to increase weekly slaughter.
As Europe departed for vacation and the US market entered its usual period of summer doldrums, sources felt that prices would consolidate over the coming weeks. The next indications for market changes would likely come from the results off the All China Leather Exhibition at the end of August.