Most hides exported to China come from cattle raised in America’s heartland with Texas and Nebraska as the largest suppliers.There are basically four parties involved in the business:(1) meat packers; (2) hide processors; (3) traders (dealers) and brokers: and (4) agents.
In the States, packers can be fully integrated meaning they own the feedlots, slaughter facility as well as hides processing plant.There are four fully integrated U.S. companies that process 85 percent of the hides.
Other packers may not own feedlots and sell live animals to the processor.At the slaughter house, hides are separated from the meat.Some slaughter houses process the hides themselves while others sell them to processors. Most packers flesh and cure, but if not, then the processor does it.
When a processor buys packer hides, they are typically sent to him “green,” meaning just off the kill floor.He puts them in his raceway/brine tank.Most hides for export are sold in a brine cured state and shipped to China or other export destinations.
Traders (dealers) buy from the packer, take ownership of the hides and sell to the processor.By comparison, brokers act as an agent, but don’t take ownership of the hides.He earns a commission by putting buyer and seller together.U.S. processors may deal directly with Chinese tanneries or through sales agents, traders and/or brokers.
The U.S. exporter pays the sales agent in China and elsewhere a commission on what is sold to support sales efforts.Chinese tanners may call the agent for service if there are any issues or concerns.
The types of hides sold to China include branded steers, branded heifers, butt branded (brand placed on butt rather on the side as is the usual practice which gives more useable surface area) or Number 3 Packer Hides (some damage on hide from cow that’s scraped itself; by fleshing machine or during slaughter.These are not wounded animals.)Hides from branded steer are used to make shoes as they are thicker and heavier.Furniture uses hides from dairy cows that have more surface area.Car seats can use lower graded leather.
U.S. suppliers usually transport their hides to China in shipping containers from the west coast (California, Washington, Oregon). Shipping time generally takes three weeks to China and runs about $2,000 per container.Freight charges continually increase due to a monopoly by steamship companies and rising fuel costs.Major ports for the mainland include Qingdao, Shanghai, Hangzhou, Guangzhou, Xiamen, Shenzhen and Hong Kong. Depending on the size of a hide, containers hold around 640 to 680 steer hides or 880 branded heifers.