U.S. Cattle Hide Value Declines Significantly in Wake of COVID-19
The global outbreak of the COVID-19 virus has hit almost every market fast and hard. The United States Hide, Skin & Leather Association has reported an alarming impact on both the hide and leather industry, as well as agriculture. Before the crisis, the supply chain was already dealing with a lull in demand and declining prices, but the credit value for animal by-products, particularly hides, has now dropped to an all-time low.
The main cause of this significant drop in 2020 is the uncertainty the outbreak brings. Demand drops as adjacent industries have come to a grinding halt and the future may be very different. This contributes to the already significant insecurities face due to the changing markets. The actual drop in value has been extreme, even for the already present market. Where the price per hide in $ per cwt (cwt or hundredweight is a measurement unit based on 100 pounds) was still up to $9.00 in January, in April, it dropped to $6.50. That’s a 30% drop.
Skin and hide prices have been decreasing in value over the last three decades. The average value in 2014-2018 was still up to $12.50 per cwt. Right now, the value of the hide represents only 1% of the total steer’s value. The question about leather being made from a or a co-product would seem mute at this point. As a way of comparison, the hide represented 67% of the total value of steer by-products back in 2000.
The question currently on everyone’s mind is of course, what will happen once this crisis is over. Will we return to our previous bad practices of using more plastics or opt for natural, circular materials?
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