Market report | 11.02.2022
Osterhorn, Friday, 11.02.2022
The US $ in EURO 1,1400
What happened this week
As expected after last week, a difficult phase is developing. The heavy bullhides are at the centre of the discussion and, as is so often the case, it is the eternal struggle to find a reasonable balance for this less flexible market. With the high proportion of fresh, chilled product preferred by both sellers and buyers, there is little to balance differences between supply and demand. While in the last months of the year more is usually slaughtered than can be continuously absorbed by the industry, in the first half of the year it is often rather the other way round. Due to the extremely high prices for live cattle and a relatively low supply, quite little heavy male stock is offered at the moment. However, and this also plays an important role at the moment, demand is also below average and individual situations are more decisive, but not the standard. Overall, it does not seem at the moment that the market is undersupplied, but some suppliers are hopeful that individual supply gaps might exist. Of course, this leads to the eternal question of whether ten loads can determine the price for a hundred. There is certainly not enough demand for the total quantity, no matter how small it may be, at significantly higher prices. The problem that always goes hand in hand with such a situation is that often the prices are supposed to pull all the other hide types along with them. That it is certainly almost hopeless in the international market nowadays. Even if prices in the USA have allegedly found a bottom, the price difference to our hides is still so great that higher prices are not
enforceable internationally at the moment. In addition, there is the perennial question of how the leather business is really doing. In any case, there is no one to suggest that the demand for leather could exceed the total supply of raw material in the next few months. In this overall situation, activity this week was well below average. Some are blaming it on the holiday season in Asia, but we all know that if there is demand there, they know how to write a messenger message or an email. All in all, it is probably fair to say for this week that people in our markets on both sides of the table decided to wait and see and who is going to blink first. Overall, it was also clear that the enthusiasm for significantly higher prices for heavy goods cooled down considerably as the week progressed. In Asia, many had already returned from their holidays and demanded an update of the offer lists, but at the end the offers were merely noted and not rewarded with great interest. Thus, business this week was once again limited to special items and overall concentrated on special low grades and very light calfskins. For all other items the talks were postponed until next week and we would not take a bet today that they will really be conducted and brought to a conclusion by then.
Everyone is talking about extremely low slaughter. We can’t really confirm that, except that we have a little less production, which is actually quite normal for this time of year. It is true that the share of males is below average and that business in the meat industry is very problematic due to a lack of sufficient supply of live cattle and very difficult price negotiations for beef. The farmers at least are pleased by prices not seen for a very long time.
What do we expect
Our assessment from last week can be repeated again this week. Due to the fact that the slaughter and leather industries have very different ideas at the moment, pricing is once again extremely difficult. This is especially true for heavy, male goods and much less so for all other types where the spread of opinions is much smaller. Another very problematic aspect is that individual situations with tanners and regional influences on slaughtering could possibly be determining without being truly representative of the overall situation. Not a good starting point for a balanced and controlled market situation and it would not be surprising if this remains the case until the fair in Milan.
|Type||Weight range||Avg. green weight||Salted weight||Avg. weight salted||Price per kg
|Ox | Heifers||15/24,5 kg||22,0/23,5 kg||13/22 kg||20/21 kg||€ 1,25||Stable|
|25/29,5 kg||27,5/28,5 kg||22/27 kg||25/26 kg||€ 1,00||Stable|
|Dairy cows||15/24,5 kg||22,5/23,5 kg||13/22 kg||20/21 kg||€ 0,90||Stable|
|25/29,5 kg||27,5/28,5 kg||22/27 kg||25/26 kg||€ 0,88||Stable|
|30/+ kg||33,5/35,5 kg||27/+ kg||29/31 kg||€ 0,78||Stable|
|Bulls||25/29,5 kg||27,5/28,5 kg||22/27 kg||25/26 kg||€ 1,20||Stable|
|30/39,5 kg||36,0/37,0 kg||24/34 kg||31/33 kg||€ 1,50||Stable|
|40/+ kg||45,0/48,0 kg||34/+ kg||38/40 kg||€ 1,45||Stable|
|Thirds||15/+ kg||25,0/27,5 kg||13/+ kg||24/26 kg||€ 0,50||Stable|
|Thirds bulls||30/+ kg||38,0/40,0 kg||24/+ kg||33/36 kg||€ 0,55||Stable|
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