Fur is Not a Commodity

When wild fur prices are on the rise, it generates a great deal of talk. When they tank, and they always seem to do this after a dramatic climb, that too is the topic of conversations among trappers and fur buyers.

Some articles go up in price rather rapidly, while other species demonstrate a slow, yet steady escalation over a protracted period of years. Muskrat prices, for example, quickly saw astronomical prices, only to tank the following year. Then they started the long, slow upward trek.

After the recovery from the ’87 crash started — and that did not begin until several years after the downfall of the Soviet Union in 1990 — raccoon prices embarked on a slow, yet steady increase in demand. Prices responded. And, more trappers followed. There were some good seasons and some not so good, but those were mostly attributed to mild winters.

Gray fox caught on. The rapid rise was quick and noticeable. Even considering the new focus by trappers, supplies did not seem to meet the demand. Prices continued to escalate. Competition among buyers for the available offerings became fierce.

Heavy shearable beaver, again an alternative to the sameness of mink, was doing extremely well, that was until the global financial meltdown. Luxury goods took it on the chin, particularly those slightly outside of the mainstream.

Luxury furs imported into the U.S. for this selling season are down between 25 percent to 30 percent according to the Department of Commerce. Our domestic retail furriers indicate their inventories of unsold garments from last year remain a problem. Deep retail discounts are becoming commonplace.

Wild fur prices are driven from the bottom up. When there is a demand and good movement of the low grades and smaller sizes it throws a stronger demand on the better grades and larger sizes. The top looks to the bottom for price indications. Higher prices follow. When there is virtually no demand for these low grades, the better collections suffer accordingly.

Presently, there is little, if any, market for low-grade and small raccoon and ordinary coyote pelts are not finding many willing buyers either. Luckily, the meat market for raccoon is holding and, if anything, getting stronger and more widespread. The owner of two fish markets in Memphis commented, “I take all I can get and still run out.”
I visit with a great many trappers and fur buyers. All too often, they refer to their fur collection as a “commodity.” I let that statement slide. Fur is no more of an actual commodity than say, diamonds. And, even the lowest grade of diamond dust has a value. It’s used in files. Low-grade furs, well, that’s a different matter. They become a liability the minute you own them.

Say you buy a couple thousand low-grade and small raccoon pelts at rock bottom prices. What do you do with them? Invest more money and have them dressed waiting on a developing market. For how long? What about long-term storage? What does that cost? And, for how long? How about insurance?

No, furs are not a commodity, not by a long shot. Certainly not in the same game as oil, corn, soybeans and even the major currencies. There is no “futures” market for furs. I wish there was. I would “short” low-grade raccoons for January 2011 (the market will likely be flooded by then) and take a “long position” on martens for the same delivery (there is not likely be any available that are not contracted. I’d be holding a contract, and I’ve only invested 10 percent). OK, I’m a gambler.

The actual futures markets — commodities — are a serious gamble. This is not a game for the faint of heart. Yet, this year, our few country fur buyers still participating in the market are just that, speculators. Buying raw fur is a far greater gamble than say, buying soybean futures. The odds are better in Las Vegas. God bless these country buyers. Let’s wish ’em luck.

In financial circles there is a vague area called “physical commodities.” The closest items considered physical commodities to fur are cow hides and raw wool. Again, there is no futures market for these “commodities.” They are worth no more than a willing buyer is willing to pay. These too are not doing well.

No, there is no futures market in furs, but there certainly is a past. If we look to the past, we see a bright future down the road. It has happened time and time again, and it will happen this time. As the economies recover — and they will — the demand will be even greater for our natural, wild furs. During this downturn, the consumer demand is building. They simply do not have the cash or the credit, yet.

While digging around in my archives looking for the fur markets historical ups and downs, I ran across a price list for wild furs I believe will be of interest to readers of this space.
The time frame is important. The price list was published by Funsten Brothers in St. Louis, Missouri on Feb. 27, 1926, three years before the stock market crash of 1929. It was intended for trappers and fur buyers in West Virginia.

The “Roaring Twenties” and the iconic ’coon-skin coat that was so popular with the affluent college crowd drove fur prices to astronomical levels. A respectable catch of 50 raw raccoon pelts sent to St. Louis, at $12 a copy, would buy you a new Model “A” Ford.
With only a few minor changes, their price list for 1927 could be republished today. Funsten was offering $15 for mink, $2.85 for muskrats, $28 for otters and $12 to $14 for red foxes. A week’s groceries for an affluent family was about $5. For a trapper’s family, the food bill was significantly less.

But then the stock market crashed on Black Monday in October 1929. Their fur price list changed. The stock market came back, as did the fur market. We’ve seen this before, and we’ll see it again. According to my archives, in 1982, a season’s catch of 25 nice, pale, well-spotted, high-country bobcats would buy you a new CJ-7 Jeep.

The world’s a big place. There are a lot of consumers out there and more entering their ranks each year. As capitalism spreads through the free-market systems now being enjoyed in China, Russia and Eastern Europe, demand for our wild furs will continue to grow.

We’ll get through this rough spot. We always have.

Please FAX regional fur auction results to Parker at (501) 262-1582. Or, e-mail results to HeTraps@aol.com.

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