Do You Contribute to Quality Hides for the Leather Industry?
Although hides and other by-products are not the primary determining factor for cattle prices, they do have an impact on prices in general and the overall value of livestock. Previously, beef by-products accounted for about 10% of fed cattle prices, according to Derrell Peel, extension livestock marketing specialist with Oklahoma State University. However, that value has fallen to an average of 7.2% for the first 29 weeks of this year. This value includes hides as well as edible and non-edible by products.
According to Peel, hides comprise the single largest part of by-product values, however weak global demand for hides has pushed these values lower. In 2018, hides represented 45.6% of by-product value with an average price of $47.93/piece. However, values have been on a steady decline averaging $34.46/piece in early 2019, down to $27.60 this summer.
Hides with damage from brands or insects are not usable for high quality leather products. Although the National Beef Quality Audit in 2016 showed fewer people are branding calves, brands and damaged hides still represent lost opportunities in the market. Hide discounts attributed to branding costs the industry $29.24 million, according to the most recent Beef Quality Assurance manual.
“The side is absolutely the worst location for a brand,” said Ty Lawrence, Ph.D, professor at West Texas A&M University. “It ruins a large section of the hide on the side. Shoulder brands also take a big piece out of the hide. No brand is preferred, and a butt brand by the tail head would be the best. That’s why the M brand for Mexican cattle goes there.”
University of Nebraska educator Tom Field, Ph.D. authored an extension publication titled “Maximizing the Value of Beef Cattle Hides.” In that, Field recommends branding should be restricted to breeding stock, and multiple brands should be avoided to minimize effects on hide value.
Field also said insect and parasite damage can contribute significantly to the loss of hide value. “Insect and parasite damage may be manifested in the hide as discoloration, alteration of grain pattern, various sized pits, holes and other texture irregularities.”
The defects caused by parasites are problematic to tanners and users of raw leather products because of problems with grain patterns or uniform dying.
Lawrence said often the insect damage is not apparent until the color of the hide is changed. “Horn flies can cause quite a bit of damage, and warts don’t tan properly,” he explained.
Producers have dual incentives to follow Beef Quality Assurance guidelines and treat for external parasites. Not only does that help insure the quality of hides resulting in a better product for the leather industry, but treatment also keeps parasites like lice or grubs in check. Research shows lice infestation cost the U.S. cattle industry more than $125 million annually. Moderate to heavy lice infestations can significantly reduce gain as much as 9.2%.
Another hit to hide values can come in the form of mud and manure. According to Field, mud locks are a problem to the tanner because the hide may be penetrated or gouged as it passes through the fleshing process, resulting in a lower quality hide. Feeders should be particularly aware to maintain drainage and pen management to reduce mud.
Although many cow/calf and stocker producers don’t see a direct correlation between the quality of the hides on their animals and the price they get for their cattle, they should be aware of the issues with the by-product. According to Peel, current U.S. beef by-product values are reducing fed cattle values by over $110/head compared to peak by-product values five years ago.