Details as follows:
Heavy Texas up $2.00 over
holiday’s
After closing before
Christmas at a low of $70.00, heavy Texas steer prices rallied up to $72.00
before the New Year. This week, while trading was light, due in large part of
well sold producers not offering, prices paid were steady to last at $72.00. Some
producers said there were volume bids at $71.00 but regardless, none were
accepted by packers. Heavy selections averaging over 72 lbs. were offered,
albeit without success, at $75.00.
Seller attempt to push Asian
tanners to pay $80.00 were in vain with the highest price heard at $79.00
c&f. Heavier averages above 72 lbs. were offered up to $85.00 but the best
bids seen were at $82.50 c&f. Wet blue Texas are said to be having
difficulty in obtaining $90.00 c&f, much as they were before Christmas.
Branded steers up $1.00+
over holiday’s
While not seeing the demand
like Texas, branded steers managed to trade in enough volume to alleviate any
pressure on the part of sellers. Prices seen were a low of $69.00 and up to a
high of $70.50 on seasonal averages. This compares to pre Christmas low’s of
some at $68.00 but mostly at $69.00. Jumbo branded steers averaging 80 lbs.
with some native content, were available at $76.00 but there were not any sales
reported.
Colorado steers continued to
trade in and around the low’s seen prior to the holiday’s at $66.00 with the
high’s seen this week at $67.00. In the Far East, relatively small volumes were
done on branded steers between $75.50 and up to $77.00 c&f depending on
terms and conditions.
Butt branded +$2.00 in two
weeks
Butts found unusually strong
demand for what is normally a somewhat neglected item. The highest prices heard
this week were at $73.00, or a dollar over Texas which is a rarity, but most
business was at $72.00, all on 64/68 lb. averages. Prices over-seas were seen
at up to $80.00 c&f. We would think that producers became quite far forward
sold given a relative lack of offers and the sudden surge in buyer interest.
Heavy Native Steers work
higher
Prices on natives fluctuated
between $71.50 and $73.00 during the week with $72.00 being the most commonly
quoted price. These prices were up from $71.00 during the days before
Christmas.
Plump cows up 2.00+
Demand remained keen over the
holiday’s as producers remained very well forward sold. As a result they were
able to push prices higher. Some of the best quality northern native cows
attained $56.00 and equivalent brands sold at up to $45.00. In less desirable
regions, prices were seen at $42.00. In all cases, averages were in excess of
50 lbs. and approached 55 lbs. in many instances. There appears to be a good
deal of short covering going on which has helped to support prices even in the
face of continually large production
Holstein’s up $2.00-$3.00
+
Tanner interest was quite
good over the holiday period in this selection as well. The lowest prices heard
for southern type processor cows was at $59.00 but for the most favored origins
one trade was posted at $64.00. Buyer resistance however remained with bids in
some volume seen between $60.00 and $66.00 c&f for northern types, which
were ignored by sellers.
Bulls move up
Demand for native bulls fed
into well-sold producers, which pushed prices higher since our last report. The
lowest prices seen this week were at $64.00 and one premium producer said he
sold some at $68.00. Demand for brands did not seem to be as keen, with prices
generally in like with mid December.
Small Packers still in
short supply
While there was some fairly
good interest seen from the Far East this week, prices were considerably below
what well forward sold produces were willing to consider. A bid at $56.00 was
countered at $61.00 c&f.
Low grades
Trading was slow. No 1&2
renderers were offered at $52.00 and equivalent 3’s were bid at $34.00 and
countered at $37.00 in one case.
INDUSTRY NEWS
Yuen Yuen annual sales up
profits down
Yue Yuen revenues for the
year ended Sept. 30 rose 21.7% to $7.04 billion, while net profit decreased by
6.2% year to approximately $449.8 million
During the year under
review, the Group increased the number of production lines by 16.7% to 537.
Most of these new lines were allocated among its three key production bases:
China, Indonesia and Vietnam. The pairs of shoes made by the Group during the
year amounted to 326.6 million, an increase of 14%.
Sales of athletic shoes, the key product
category for the Group, grew by 20.1% year on year. The category with the
strongest sales momentum, casual outdoor shoes, grew by 31.4% year on year.
Leading brand name customers in both categories were able to launch a series of
new models with innovative designs to capture consumer attention and boost
sales. Retail sales were also up year on year as China had solid GDP growth and
consumers in China continued their purchases of well known brand name athletic
footwear and apparel
Shoe Carnival forecasts lower sales on
warm weather boot declines
Shoe Carnival said poor boot sales,
largely due to warm weather so far this winter season. In the fourth quarter of
fiscal 2010, comparable store sales increased 4.6%.
For fiscal 2011, the company expects net
sales to be in the range of $761 to $762 million and comparable store sales to
increase approximately 0.7%. For fiscal 2010, comparable store sales increased
8.2%
Speaking on the results for the quarter,
Mark Lemond, president and chief executive officer, said, "Our fourth
quarter sales and earnings results have been significantly affected by a
decline in the sale of boots, particularly women's boots. Our boot sales in the
first two months of the fourth quarter last year increased 20% on a comparable
basis, whereas this year boot sales have declined 15% in our comparable stores.
We attribute this decline in large part to unseasonably warm weather.
EXPORTS
Click on chart to view underlying data.
Raw hide
sales
Net sales
for the period ending December 29th were 362,900 for 2011 and 2012 shipment.
185,000 sold for 2011 shipment, a marketing year low. This total was down 8%
from last week and 60% under the previous four-week average. However, another
177,900 pieces sold for 2012 delivery. Combined destinations were:
|
China
|
158,200
|
|
|
Korea
|
148,700
|
|
|
Canada
|
16,600
|
|
|
Mexico
|
9,000
|
|
|
Taiwan
|
5,200
|
|
|
Turkey
|
2,500
|
|
|
Vietnam
|
1,500
|
|
|
Japan
|
1,000
|
|
|
Italy
|
1,000
|
|
Weekly
shipments against previous sales were 442,000, up 27% from last week but down
1% from the previous four-week average. Outstanding sales were 3,241,900.
Wet blue
Net sales
of wet blue hides for the period were 9,600 for 2011 and 59,800 for 2012 or a
total of 69,400. Destinations were:
|
Italy
|
31,900
|
|
|
China
|
14,000
|
|
|
Mexico
|
10,800
|
|
|
Thailand
|
5,700
|
|
|
Dom Rep
|
5,000
|
|
|
Thailand
|
6,300
|
|
|
Japan
|
(1,800)
|
|
Shipments
for the period were 148,100. Outstanding sales still to be shipped totaled
342,800 as of the 29th.
Combined
raw and wet blue outstanding
Click on chart to view underlying data.
The
combined total of raw and wet blue hides outstanding to be shipped totaled
3,584,700 pieces.
Sales
below slaughter/shipments above
Click on chart to view underlying data.
Including an estimated 35,000 domestic hides consumed
each week (no doubt less during the last holiday two weeks of the year); total
raw and wet blue sales were 467,300. Export shipments for the same time frame
totaled 590,100. Slaughter for the holiday shortened like period was 539,000.
Wet blue
splits
Sales of
wet blue splits for the period were 85,300 lbs. for both 2011 and 2012
delivery. Taiwan took 64,900 lbs. and Hong Kong 39,900 lbs. and 13,500 were
reported to Korea. But at the same time, cancellations/adjustments were noted
at 32,700 lbs. for Hong Kong and 4,800 lbs. to Korea.
Shipments
during the period were 43,100 lbs. and outstanding sales totaled 2,209,800 lbs.
at year end.
FORECAST
FRIDAY AFTERNOON FACTOR
We have to end this week with
a somewhat bullish bias based on supply. For buyers of seasonal average heavy
Texas steers, there are less offered than they would like. The same can be said
for butts and to some extent other steer selections as well. Cows are
definitely in short supply. On the other hand, especially with Lunar New Year
holiday’s soon to commence (January 23rd) and slaughter to resume some
normality after U.S. holiday closings, supply and demand look like they could
become more in balance. Having said this however, the over-hang of wet blue has
still not dissipated, regardless of the market coming off its bottom. This is
certainly a bearish factor.
TALE OF THE SCALE
Given the situation in the
Factor, and a lack of follow thru to last week’s gains, we are putting the
scale of supply and demand in balance today.
12.9.11
|
12.16.11
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12.23.11
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12.30.11
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1.6.12
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Our Tale of the Scale FORECAST is proven to be accurate more than 85% of the time!
How was our last forecast?
Not good. Our last report of
2011 on December 16th called for steady prices through the holiday
period. We were quite wrong on just about every selection.
And for the coming week?
After speaking to a number of hide buyers this week,
we learned of some significant sales made to the Far East last week. As one
pointed out, they had received a good number of leather orders in December and
sensing the market at or near a bottom, elected to step in and obtain some
coverage.
Producers say there is good
interest and we tend to agree. However, we think it is only at current prices
and below, not above. With the rapidly approaching Chinese New Year shutdowns,
and the resistance seen this week by tanners to packer’s price demands, our
guess is to see a generally steady market in the coming week.
What’s ahead for 2012?
Will we see the volatility
seen in 2011? We think not as the conditions existing twelve months ago with
respect to retail sales of leather goods, tanner inventories and the economy in
general are not anticipated to generate any dramatic gains or losses.
What we will see are more
changes in how the trade operates. One of the countries largest meat packers is
now putting hides in bags as opposed to just pallets as before, and they plan
on expanding this in 2012. The CLIA along with cooperation from the USHSLA is
already developing a “black list” of suppliers and especially tanners who did
not honor their contractual commitments as prices fell in 2011. Another large
steer producer is planning on putting more of their production into wet blue
sometime this year.
Will we see an increase in
leather consumption now that prices have declined so dramatically in 2011? We
don’t think this market share over synthetics will be seen in the first half of
2012 and quite likely for the whole year, as designers do not make changes like
that very quickly.
And for prices? Our
guesstimate, and please don’t hold us to it, is for hides to trade in an
approximate $10.00 range from where they are today.
FEDERALLY INSPECTED
SLAUGHTER
Click on chart to view underlying data.
Federally inspected slaughter
as of January 7th 2012, is estimated to be 560,000. Last week’s total was 539,000
and for the same period last year 640,000.
QUOTES FOR SUCCESS:
"Most successful men have not achieved their distinction by having some new talent or opportunity presented to them. They have developed the opportunity that was at hand." - Bruce Barton
|
PRICE GUIDE
| SELECTION |
WEIGHT |
PER PC FOB |
LAST WEEK |
LAST YEAR |
| Heavy Texas Steers |
64-66 |
$72.00-73.00 |
$70.00-71.00 |
$76.00-76.50 |
| Branded Steers |
64-66 |
$69.00-70.00 |
$68.00-69.00 |
$75.00-75.50 |
| Colorado Steers |
64-66 |
$66.00-68.00 |
$66.00-68.00 |
$72.00-73.00 |
| Butt Branded Steers |
64-66 |
$72.00-73.00 |
$70.00-71.00 |
$76.00-76.50 |
| Heavy Native Steers |
64-66 |
$72.00-73.00 |
$71.00-72.00 |
$76.00-77.00 |
| Heavy Native Heifers |
50-52 |
$61.00-62.00 n |
$61.00-62.00 n |
$67.00-68.00 |
| Branded Heifers |
50-52 |
$58.00-60.00 n |
$58.00-60.00 |
$65.00-66.00 |
| Heavy Native Cows |
50-52 |
$52.00-55.00 |
$50.00-53.00 |
$51.00-53.00 |
| Branded Cows |
50-52 |
$42.00-45.00 |
$40.00-43.00 |
$42.00-44.00 |
| Spready Dairy Cows |
50-52 |
$61.00-64.00 |
$59.00-61.00 |
$57.00-58.00 |
| Over-weight Kip |
25-35 |
$70.00-72.00 n |
$70.00-72.00 n |
$68.00-69.00 |
| Native Bulls |
100-110 |
$64.00-68.00 |
$63.00-66.00 n |
$58.00-61.00 |
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