GREEN shoots are starting to emerge in what has been one of the most gutted beef commodity markets in recent times, cattle hides.
European fashion houses are putting leather back into production cycles for coming seasons and one of the country's largest tanneries, the Northern Co-operative Meat Company's Casino Hide Tanners in July moved product for the first time in months, albeit below the cost of production.
The hide market has been severely depressed for a number of years but came to a screaming halt when coronavirus took hold in Europe and China, two key markets for Australian hides.
Italy is the largest market for wet blue leather, which the Casino operation specialises in.
NCMC chief executive officer Simon Stahl said orders dropped to zero.
The wet blue process provides the opportunity to preserve for a number of years and the Casino operation made the decision to stockpile product, although it has investigated other markets, including rendering.
"Our rendering trials have been very successful but it doesn't really add much value to a hide and we are hopeful about the prospects for leather demand now coming out of Europe," Mr Stahl said.
"The information we are getting is that people are starting to buy leather-based goods again as the realisation that leather is a sustainable product, a reusable byproduct of beef production, sets in.
"Certainly it a more sustainable option than the oil-based leather alternatives which were displacing it."
The rock-bottom price of leather has also likely enticed fashion houses.
"The hide market was looking at turning the corner at the start of this year, then COVID hit. But the fact we are now shipping is optimistic. We're by no means out of the woods but it has given us hope and think it will improve as the year goes on," Mr Stahl said.
"Rendering was the plan b and while we will always be looking at alternatives, we are confident leather as a product has stood the test of time and will rebound."
The latest hide prices in Meat & Livestock Australia's July Co-Product Report are a horror story - numerous product categories from NSW, Queensland and Victoria at zero and many others at less than a dollar a piece.
All are between 80 and 100 per cent back on this time last year, which itself was a very depressed hide market report.
The best performers were the heavy hides but even those are making only a few dollars each.
Australian Hide Skin and Leather Exporters president Victor Topper confirmed demand was starting to come back online across the board, with lockdown restrictions in key overseas markets easing.
Tanneries were reporting the lift in demand was, interestingly, across all consumer sectors, from furniture and car upholstery to shoes and fashion, he said.
Sales for lighter hides were still struggling but heavier ones were moving, he said.
Beef offal prices across the board were reasonably steady, according to the July Co-products Report, with the exception that omasum and tripe sold on a softer market whilst thick skirt and thin skirt were considerably firmer.
Rendered meal prices also eased, despite reduced production.
The price for 50pc protein meat bloodmeal softened $96 a tonne from last month, averaging $569/tonne, which was still above year-ago levels.
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