Prices for cattle hides are on the rise as leather demand rebounds and global supplies fall, boosting the returns of meat packers and cattle producers.
Federal data show hide prices are at the highest level in nearly a decade, jumping 24% in the last year to $82/hide. Further gains are likely this year as U.S. supplies begin to shrink and consumer demand for leather continues to recover, says John Reddington, president of the U.S. Hide, Skin and Leather Association, an industry trade group.
He also expects lower supplies from Australian producers struggling with the aftermath of drought and floods.
Helping to fuel the jump in prices has been a growing middle class in China, Vietnam and other Asian countries where consumers are buying leather goods as incomes rise. As economies around the world recover from deep recessions, consumers are again shelling out for luxury leather goods.
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