Kill above average31 October 2008
Kills in Ireland were above average in July and around 30,000 cattle per week. This larger than normal supply of hides combined with the reduced demand from Italy to put pressure on prices.
Indeed, looking forward it appears that the effects of the credit crunch are beginning to filter into the leather market. Italy has definitely got a lack of interest in buying hides and all payments from Italy have slowed up right across the board. Italy is still the largest market for the European hides and when Italy sneezes, hide processors catch a cold. There has been renewed interest from China but not enough to take up the slack from Italy. Some elements of our trade are hoping that once the Olympics finish in China the pollution restrictions that have closed so many tanneries will be lifted and business will pick up again. To that end the fair in Shanghai in early September will be a good indicator of how strong demand from China will be for the rest of 2008. On the meat front abattoirs are reporting that the sales of loin and fillet steaks are well down and that supplies are building up as consumers refuse to pay the high prices for these cuts. Demand has switched to the lower priced cuts of beef. Furthermore there has been a marked decline in the restaurant business which traditionally used a lot of the expensive steak cuts. The credit crunch is affecting every part of our business. In Ireland another one of our regular price wars has broken out and processors are paying too much money for green hides from the slaughterhouses. The end result will see further changes in the hide and skin processors in the Republic of Ireland with possibly one new player from the UK taking over from an established Irish hide and skin trader. At the time of writing details were not finalised but some changes are expected. Abattoirs are welcoming the proposed changes as they believe that this will keep the prices for hides and skins up. Time will tell if they are correct. Prices in early August were as follows: 36kg+ 75p 31/35.5kg 78p 26/30.5kg 83p 22/25.5kg 97p Cows were under pressure and fell to £24. Lamb kills have been much reduced this year leaving much fewer new season doubleface on the market than expected. Consequently prices rose on demand from China and Irish doubleface went for £3.50 ex yard. English doubleface were offered at £3.25.