Market Report 15.11.2025

What happened this week

Anyone who deals honestly with the situation must acknowledge the reality that, at least in Europe, we are facing a fundamental restructuring of the cattle hide supply chain. What used to be referred to as “the market” in its traditional form simply no longer exists. Why is that? The reason is relatively straightforward: there is no longer a linear supply chain, and the value of the hide is no longer determined solely by sales to the various leather manufacturers around the world. As a result, the so-called “market and price reports” – including our own – now represent only a small excerpt of a much larger picture. In our view, we are once again experiencing a disruptive phase, similar to those that historically occurred almost every ten years, though in the past they were driven exclusively by production costs and the geographical migration of finished product manufacturers. The leather industry follows their clients. This typically meant that tanneries in certain regions were forced to close, while their production capacity was re-established elsewhere by new players. Global economic growth and a fundamentally rising demand for leather over three decades interrupted these cycles for almost thirty years. At every level of production costs and price, there was sufficient market potential, and companies that were well managed found enough opportunities—despite typical fluctuations—to grow successfully. This situation has changed significantly for quite some time now, and the pace of change has accelerated dramatically over the past two years, particularly for the European leather industry. We have now reached a point where the necessary adjustment processes would have to occur faster than they can realistically be implemented. One reality remains unchanged: when a slaughterhouse produces meat, it must find a way to handle the by-products, even if—worst case—they would have to be destroyed. We are, however, still far from that scenario, though redirecting operations and accurately assessing future developments will require major shifts and courageous decisions. Another signal of this shift is the widely discussed decision of a well-known European tannery to cease its activities on the continent in the coming months. Rumors are increasing that several other companies are currently debating similarly far-reaching decisions for the future. This broader assessment is possible because day-to-day market activity remains limited. European tanneries will take an extended Christmas break this year, and redirecting material during this time will be difficult. The few sales still being closed are distributed across significantly reduced regular programs, occasional transactions in Asia, and the rerouting of lower-priced hides into the protein industry. Beyond market activities, logistics have become an even greater challenge; virtually every aspect of transporting and delivering hides worldwide has become more complicated. Shipping lines are increasingly unreliable, seasonal disruptions around Christmas in Europe and Chinese New Year are barely manageable, costs are rising, and government agencies around the world seem to operate in their own fantasy world—creating an increasingly unstable environment, especially for agricultural commodities. Sales volumes this week were limited. Prices for lower-grade hides remain stable, while higher-priced, heavy male hides are very difficult to sell without concessions. The core problem remains that price formation at slaughterhouses is increasingly driven by political and strategic considerations within the meatpacking industry and its subsidiaries—rather than by a factual and objective assessment of the hide itself. This will further accelerate the sector’s transformation.