Slump in sales of sheepskins and cow hides hits abattoirs

A once lucrative by-product for abattoirs is increasingly becoming a cost for the sector, with sales of sheepskins and cow hides still struggling to recover to pre-pandemic levels.

Demand has reportedly been sluggish due to increased labour and energy costs associated with processing skins and competition from faux-leather products.

Exports from the UK have been muted for several years, and some abattoirs have even been known to make a loss, treating skins as a waste product.

See also: Fat cattle in short supply as prices lift back above 480p/kg

Generally, both finished beef and sheep prices have been well supported so far this year.

However, any increases in demand for by-products from the slaughtering process such as skins, hides or fifth-quarter cuts help to add additional value for the industry and would further support farmgate prices.

The UK Leather & Leather Goods Industry in 2023 report showed declines in value and volume of both exports and imports last year, with export values down by 14.5%.

“The UK is not unique in this current difficult situation with national industry associations across the globe, and Europe in particular, reporting very difficult trading conditions,” the report said.

Hannah Clarke, senior red meat analyst at AHDB, said the European market was in its summer season, with some tanners on holiday, so demand could consequently be somewhat subdued.

She added: “Recent reports from the Chinese market suggest the sluggish economy is affecting businesses’ cashflow and weakening offering prices.

“This is against a backdrop of tighter UK sheep supply and forecast future tightening in cattle numbers, which would limit supply of the raw product.

“However, reports of weaker finished-leather orders generally appears to be balancing, if not outweighing, this from a price perspective.”