Market Report 22.09.2023

Osterhorn, Friday, 22.09.2023

The US $ in EURO: 1,0660

What happened this week

Of course, the focus this week was on the fair in Milan, from which so much had been unspokenly promised, and in the end it was, as so often: a renewed celebration for leather as a product, its beauty and elegance, its many possibilities in production and presentation, and as a marketplace for those who continue to be enthusiastic about this material. Even if you have been visiting the fair for many years, sometimes for decades, it is inspiring again every six months that the tanners do not run out of ideas and they still find ways to produce something new and even more beautiful – in that sense, everything would be perfect if only this could also be found in the mass markets. Leather continues to be eagerly copied with plastic and other materials, but the original is simply no longer desired by the volume manufacturers. The reasons for this have been discussed often enough and in many ways the futility explained and documented, but change continues to be a long time coming. At this fair, too, an inflation of certifications could be seen on the stands, an inflation of references to environmentally friendly production, the recurring reference that this is also wanted and desired by the brands. This may be true, but unfortunately fulfilling the requests it does not sell a single square metre of leather more, but makes the product considerably more expensive. Otherwise, little has really changed. The number of visitors may have been somewhat increased by the return of the Asians, but somehow there were not as many as one might have expected. As a result, it can perhaps be summarised that all the small specialists and high-quality manufacturers were very busy and had no complaints about business. However, the more the exhibitor depends on the mass business, the more one saw bigger worries. The shoe industry and the retail trade are suffering from too much stock, the car industry is continuing to turn away from leather altogether, the furniture industry in Europe is weakening everywhere and that really only left the leather goods and bag manufacturers as a pillar of demand. The bottom line then was that even among the biggest optimists, concerns about the market development of male hides, which are still relatively expensive, increased strongly. All the information about too high prices, larger stocks and an unbalanced demand pattern that had been swept aside again and again in recent months simply could no longer be ignored in the multitude of conversations. Even if the insights increased, opinions about the possible solutions still diverge widely and these are precisely shaped by the individual situations of the market participants. Without a clear strategy for a solution, one may have to continue to wait and see how long it will take for the market to find the right conclusions. We do not believe that in the end very many and extensive sales were made at the fair. A lot is always claimed and little can be proven, but from our position we assume that the volume of sales was on a smaller scale, mostly only due to the connection to the customer and, last but not least, did not bring about any really big price changes. The market for cows is currently determined by Asia and both prices and volumes are currently sufficient to trigger little movement up or down. For males, while the price changes may not yet truly reflect reality, the volumes are not really enough to speak of a secure market level. The big phantom hovering over the market are the stocks of semi-finished goods, which will probably tip the scales at some point in the end.

The kill

The kill continues to change very little. In our regions this is certainly due to the very, very good weather. This inhibits both meat consumption and the farmers’ willingness to sell livestock. The weather forecasts for the next few weeks do not indicate any great change in this situation. This is not good news for the meat industry.

What do we expect

In any case, the fair in Milan did not yet bring the big change or the big trigger for significant price changes for the commodity market. As already mentioned at the beginning, the market for female hides is stable at the current price level and does not need any major changes. It would probably also be very sensible not to look for any challenges. For male types, we remain convinced that there will never be a problem to place them on the world market in sufficient quantities as long as we are guided by the price realities and the value of the hide. We continue to believe that at current price levels, fully successful marketing of all male hides cannot really be guaranteed. This can only be solved if there is either a significant increase in demand for leather in the near future, or if prices are adjusted in such a way that they can be used to regain globally corresponding market shares. We leave it to our inclined readers to decide which of the two alternatives they consider the more likely for the next few months.

Price Table

Type Weight range Avg. green weight Salted weight Avg. weight salted Price per kg Trend
Ox | Heifers 15/24,5 kg 22,0/23,5 kg 13/22 kg 20/21 kg € 1,10 Stable
25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,75 Stable
Dairy cows 15/24,5 kg 22,5/23,5 kg 13/22 kg 20/21 kg € 0,65 Stable
25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,65 Stable
30/+ kg 33,5/35,5 kg 27/+ kg 29/31 kg € 0,65 Stable
Bulls 25/29,5 kg 27,5/28,5 kg 22/27 kg 25/26 kg € 0,90 Stable
30/39,5 kg 36,0/37,0 kg 24/34 kg 31/33 kg € 1,05 Stable
40/+ kg 45,0/48,0 kg 34/+ kg 38/40 kg € 1,00 Stable
Thirds 15/+ kg 25,0/27,5 kg 13/+ kg 24/26 kg € 0,45 Stable
Thirds bulls 30/+ kg 38,0/40,0 kg 24/+ kg 33/36 kg € 0,50 Stable