What happened this week: We are heading again into a difficult situation. At all ends of the markets business is like pulling teeth. Butchers took a very firm position, negotiations were extremely tough and so one was only able to reduce purchasing prices for October marginally. Even by today not all trades had been concluded as various butchers still believe, that there is no need to lower their prices to market levels. Sales were more on a stop and go. One day plenty of orders and the next very slow. While males traded again in good volume and most of the larger program deals were finally concluded, remained cows on the difficult side. Asia was quiet on dairy cows and Italy is depressing the market more and more every day – and they are the masters of the system. Prices were moderately lower on males, while cows see more pressure with customers and sellers ideas drifting more and more apart. If selling prices are eroding further, margin problems are going to return soon.

So reviewing the market situation it was or is the logic extension of the previous weeks. We complained already for some time about problems in the mass production upholstery and garment business and this is now finally reflecting in the raw material markets. Further pressure is created by low and falling prices out of Ireland and the UK, what becomes already a seasonal tradition at this time of the year. Apart from the general market pressure there were also some bright spots. Lower grade hides are facing better demand and the top quality end is also reporting steady order intake and an order book what last today until the end of the year. So, despite the general gloomy outlook for the world economy some sectors continue to be doing fine and tanners and manufacturers who have done their homework already sometime ago enjoy today success in their business. If this is the  true judgement of the situation we have to expect a further increase in spread between hide prices – at least from the

top to the rest of the market  until the gap is wide enough.  The kill: The kill is getting slightly higher, but we have two more weeks of school vacations. With the temperature now being reasonably low we expect, that kill now increasing further – at least for the cows and heifers which is the field cattle. On males the improvement will remain limited without any subsidized   export beef business. And here EU beef will have a difficult time with cheap beef from South America being on the market. What do we expect? Much the same as last week, with the exception, that one can be a bit more positive for low grade hides. However, the trend is down and we expect further erosion in prices. May be males can hold better due to the fact that not too many hides will be on the market and sellers can protect their positions but cows and ox/heifers will continue their erosion now. It would require a strong recovery in sales of cows to stem against the development. We might see this direction to continue until mid November when often it is the time to reverse again.