What happened this week: The week was determined by the last round of pre-holiday buying and the record lows in the kill. Sales were up to expectations and tanners realized, that the sharp correction, turmoil and volatility seen in the month of June and in part even into July has  – at least for the moment – ended. It just would not have made much sense trying to bet and fight for further massive price declines. Price levels – at least in our case – are now fairly valued and with the sharp gains in the USD rate, prices for most grades fit presently very well into the international structure. Consequently most tanners took a similar view on the situation and bought their regular needs for the coming 6-8 weeks. Problematic is this year the massive compression of the annual holidays. While normally Northern Europe was on holiday in July and Southern Europe in August, this year the holidays haved moved almost everywhere into the first weeks of August, so that activity is coming close

to a standstill except sales and shipments to Asia. What affects the tanning industry affects also the kill and we are presently confronted with one of the lowest kills seen in history. This week and next week almost all major abattoirs in our region declared shutdowns for Monday and/or Fridays not considering their low production levels the remaining time. Fortunately enough, at least the chilled hide just-in time deliveries will be cut due to holidays as well, so that major bottlenecks hopefully can be avoided. Apart from the regular sales of bulls in Europe we had beginning of the week another round of interest for dairy cows from Asia and the sharply higher USD helped to lock some of the deals successfully in. As we expected in our last weeks report, still remains the USD 50,00 mark for standard dairy cows a massive obstacle and business can only be concluded when prices remain below the critical level. Consequently export business has become more a currency gamble rather than a hide business. The todays auction in Zurich was

only moderately weaker and declined consequently less than expected considering, that the last event was already more than a month ago. Summarizing, the expected market consolidation has taken place and the low kill and the firmer USD are offering even more support. The kill: See above. We are very worried about the next weeks. Due to the holiday situation it does not seem, that we have a fair chance to see any increase in slaughter numbers until mid August. What do we expect? Next week might be the last one with any kind of activity in Europe. The following two weeks we don’t expect any trading at all. Overseas interest will be consequently the only option for business for the next period. However, there are hardly any hides left for sale. Regarding prices we still don’t expect any major change until activity resumes. With the low kill the market has a solid base and is protected against declines. However, attempts to increase prices short term will also fail for the simple reason, that clients are missing to pay them. However, in total  things look much more positive now.