Hide and Leather Situation

Cattle slaughter under Federal inspection in the first half of this year was about 5 percent above 1962. Current estimates indicate this higher rate will continue for the remainder of 1963. Cattle slaughter for the year is expected to supply the largest volume of hides ever produced—about 4.5 percent to 5.0 percent above the 26.9 million hides in 1962. Domestic consumption of cattle hides in the first 6 months of 1963 was down from a year earlier. Leather shoe production, which customarily consumes 85 percent of the leather supply, was down about 9 percent. Estimated leather shoe production in the first half amounted to 297 million pairs compared with about 321 million pairs a year earlier. Because of increased hide production and decreased leather shoe production, hide prices have declined to the pre-war levels. Hide futures are at their lowest point in 25 years. Heavy native steer hide prices (Chicago basis) have fallen 4-5 cents a pound from the 1962 average of 15.3 cents a pound. Some other classes of cattle hides have had similar price declines since January; trade sources indicate that some country-locker-butcher hides are difficult to move even at 6 cents a pound f.o.b.