This Friday marks the end of the first half of 2023. Individual opinions about the situation in the leather industry will probably continue to diverge widely – and that has always been the case. Basically, however, it will probably still be the case that the majority of market participants are very likely neither satisfied nor can be satisfied with the situation and the development. We also feel this way, and more and more the feeling is developing that the old times have come to an end. It is certainly difficult to define where and when the actual break was, but hardly anyone will deny that the lively, creative and active leather community has been lost at some point and somehow. In the end, it depends a lot on how long one has been involved and what experience one has gained. In addition, of course, a very important parameter is the position you find yourself in, both as a company and as a person in the environment. It is certainly indisputable that leather has lost its position in almost all areas as a generally accepted material. In the same way, qualified communication between the different levels has also suffered considerably. Everyone is really only concerned with his or her own current problem and day-to-day business, while the general discussion that goes beyond the horizon has been lost. At best, googled findings are passed on, strategic positions are taken that are no longer corrected and opinion beats facts. In the past, one adapted one’s position quickly and flexibly to the situation, and today the situation is supposed to adapt to the position and strategy. That it is certainly a direct result of the rising dominance of large

entities and their organisations that has replaced smaller and fragmented structures on both the supply and demand side. We do not believe that it has benefited the position and reputation of leather in any way to date. The supply chain and the production of leather simply do not lend themselves to standardised, industrial structures in their entirety. No matter how hard corporations, investors and modern educated management try. And thus, much will continue to change or will have to change. There was a lot of time to philosophise, because this week the activities on the market were once again very small. On the one hand, this is due to the limited demand, but on the other hand, it is also due to the paralysis caused by the fact that the business has become very static and in Europe it is really only dragging on from price negotiation to price negotiation at the slaughterhouses. Without lively activity from overseas markets, the business is otherwise almost completely asleep. This week there was some activity for cows from Asia, but once again the only question is whether to accept the price offers or wait until the next opportunity. In China they were not prepared to accept counter offers and so business remained very limited. In Europe, the new price negotiations for July are due within the next two weeks and only then when new price levels form and make larger deals possible.

The kill

There was no change in the kill, but one is beginning to notice that the dry weather and the possible feed problem are making one or two farmers think twice. In terms of meat demand, however, this has no significance. The livestock census in Germany for May 2023 yielded 10.9 million head, which was only a moderate decline. However, the decline in dairy cows was disproportionate.

What do we expect

Market situation remains difficult and demand unstable. There is little or perhaps nothing to suggest higher prices, while the meat industry continues to do all it can to avoid further price declines. Of course, the reference to low numbers in summer carries little weight, because on the one hand it happens every summer and on the other hand a large part of the leather industry in Europe also goes on holiday. With this break and the resulting consequences, it has always been and remains a very difficult task to find a market balance. There are many good reasons why a significant price correction would be in line with the market, but as already described above, those involved no longer react to the market, but orient themselves to strategy. That means for the meat industry: hold prices by all means, no matter what happens later.