Steer prices for jumbo weight material fell $0.50 – $2 today on strong supply of this weight of cattle in the US market. Delivery to Mexico is operating smoothly, but delivery to Asia is not guaranteed. If they haven’t already, Asian tanneries are at risk of shutdown because of the lack of raw materials.

Federal Reserve Economic Data for November auto production were released reporting 173.3 million units. Production is down 25 percent from the prior three-year average. Historically, production decreases have accelerated into the end of year before rebounding to highs in March and May. Data on automotive production are expected to show an exacerbated downward trend due to a tight supply of computer chips used in auto manufacturing. Wider usage of chips has created a highly competitive market and automakers have struggled as of late to secure adequate supply. A number of plants around the globe have had their production schedules interrupted in December and January. Additionally, COVID-19 cases are tightening the labor supply and slowing output. The slowing manufacturing combined with an unemployment rate in the US of 14.7 percent offer suggest near term risk for lower hide prices basis a reduction in demand for automotive leather.

Figure 1.

Today’s Trades

Packer Sales

HNS 70 MIN @ $42.00 OR 0.4675
HTS 70 MIN @ $30.00
HTS 62/64 @ $27.00
BBS 70 MIN @ $37.00 OR 0.4125
CBS 70 MIN @ $26.00 OR 0.2900

Processor Sales

HNS 70 MIN @ $38.00 OR 0.4225
HTS 62/64 @ $21.00
HTS 70 MIN @ $24.50
BBS 70 MIN @ $31.00 OR 0.3450
CBS 70 MIN @ $19.00 OR 0.2125

Industry Retirements

Randy Geist, JBS USA

After 45 years in the industry, Randy Geist is retiring from JBS USA. Randy started his career at Monfort in 1975 and has held a number of roles in the four and a half decades since. Randy played an integral role in growing JBS USA’s byproducts business from a one plant operation into what is today — one of the largest byproducts businesses in the country. More impressive than this accomplishment, however, is how Randy did it. During his career, few people were kinder or more willing to share their knowledge and expertise. Randy and his wife Penni have four children and six grandchildren.

Industry People on the Move

Dan Johnson, JBS USA

Dan Johnson now oversees the entire JBS USA byproducts team. Dan joined JBS USA in 2019 and has more than 15 years of experience in trading, operations and management in various commodity-based roles.