Hide market softens

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High supplies and low demand have seen hide prices track lower for the past four consecutive months, according to the monthly MLA co-product market report.

In 2014, following historically high slaughter, the value of cattle hide exports (may include equine and buffalo hides) increased 13% year-on-year, to $606 million (GTA/ABS) – 64% above the five-year average and comparable to the value of total Australian beef exports to China ($655 million).

However, with slaughter so far this year remaining elevated and with reduced demand from China, hide values in Queensland, NSW and Victoria are currently about $10/hide below where they were in February. In June, Queensland tick-free hides averaged $45/hide, while those from tick areas averaged $37.50/hide ex-works. In NSW, hides averaged $51.25/hide, while in Victoria they made $58/hide ex-works (quotes are from 280-350kg cwt beasts).

With over 80% of Australian raw hides shipped to China for further processing, recent increased environmental regulations in China have reportedly reduced processing capacity. In addition, reports from the trade have indicated selling conditions have been difficult with some buyers pulling out of contracts.

For the full MLA co-product market report, which also details trends in offal and rendered product prices, please click here.