Weekly beef export sales sagged in the latest reporting week with whole muscle cut sales for 2014 delivery at 12,000 tonnes, down 2% from the previous week, and down 7.7% from the prior four-week average of 13,000 tonnes, according to the USDA’s Foreign Agricultural Service.
US export sales of whole muscle cuts for 2015 delivery were reported at 500 tonnes, with Canada booking 300 tonnes and Mexico taking 200. Total 2015 sales now amount to 3,000 tonnes, FAS said.
Outstanding sales for this year amounted to 88,200 tonnes, down from 101,400 a year ago
For the year, the export sales pace is falling behind. Cumulative sales for the year were listed at 592,700 tonnes, down 4.1% from last year.
WHOLE HIDE EXPORTS STRONG
Hide export sales remain strong. While most in the industry know most US hides are exported, few follow it closely. Ironically, many of these hides will be exported back to the US in the form of finished products like shoes, clothing, furniture and car upholstery.
The FAS reported net export sales of whole hides (excluding wet blues) at 405,800 pieces, up 38%, from the previous week and 22% from the four-week average. Sales of 386,500 pieces were primarily bound for China, South Korea, Taiwan, Indonesia and Mexico.
Net sales of 161,200 wet blues for 2014 were down 58% from the previous week but were up 60% from the prior four-week average. Increases were reported for Italy, China, Vietnam and Mexico. Exports of 227,600 were primarily to China, Italy, Vietnam and the Dominican Republic.
HIDE, OFFAL SALES IMPORTANT TO PACKERS
Hide and offal sales account for a significant portion of packer income, and hides make up the largest portion of the mix. The Livestock Marketing Information Center’s compilation of USDA and Agricultural Marketing Service data show that steer hide and offal values for the third week of September amounted to $16.53 per cwt, down from the record high of $16.74 set the previous week. The latest value is $2.49, or 18.6%, above last year’s $13.94 and is $4.79, or 43.0%, above the previous five-year average of $11.74.
A chart of steer hide and offal values shows an unevenly rising trend for the year with all values well above last year and the average. The average trend shows a marked decline starting in late September, so the latest decline may be the start of this seasonal falling away. Last year, the hide and offal value began to decline in mid-summer but bounced in October.
CASH CATTLE MARKETS REMAIN QUIET
Meanwhile, cash cattle markets remain quiet after a very subdued trade last week. Some sources initially expected an early week trade this week as packer buyers and feedlots alike needed to do some business.
However, with bids nearly absent and asking prices around $164 per cwt on a live basis and $255 dressed, no trades were reported through Thursday. Trading is expected today, but with estimated packer losses of around $75 a head, packers appear to be dug in over price.
The problem for packers is that futures prices are up this week, steeling the resolve of cattle feeders to avoid that prospect. The Oct contract settled Thursday at a record-high $161.75.
The problem for feeders is that open interest also is declining, and the combination of rising prices and declining open interest suggests the gains are based on short covering, possibly hedge lifting and the result of option expiration, and not rising demand. Such markets are technically weak.