Fur Market Will Recover

For those of you hitting the trapline this season, more good news; fuel prices have been tracking downward for some months now. Yet, the U.S. dollar is also tracking downward. Since all furs — at least for the time being — are traded in U.S. dollars, this might add a dollar or two to the fur check.

Several analysts closely monitoring the current global economic crisis seem to agree that recovery to pre-crisis levels will begin in 2012. How the typical Russian fur consumer plays into this recovery will likely take a bit longer. But, it will occur.

Don’t expect your local fur buyer to be excited about the early furs you drag in the door of the fur house. He has no idea what market he is buying for, what is it worth or even if he can sell it.

Furs are not expected to ride in on the first wave of economic recovery, that’s just the way it is with non-essential items. But in Russia, furs will be far closer to the top of the list than say, Japan. If for no other reason, the winters in Russia can be harsh; furs are often viewed as a necessity.

When the recovery does come, those who own furs that are older or out of style will be looking for replacements, while a whole new crop of Russian consumers will be entering their ranks.

One thing we can be sure of; once you’ve enjoyed the warmth, durability and comfort of real fur, you’re not likely to give it up. In time, our fur markets will recover and grow.

MARKET BRIEFS

BEAVER: The larger sizes and degree of primness will be the key. Since the market downturn, the smaller goods are being ignored. The harvest is expected to be down significantly. A somewhat weaker U.S. dollar might help a little. Early retail sales, particularly in Eastern Europe and Russia, will determine the depth of the market. The demand for the large, heavy, shearable goods from Northern regions will depend on early movement of luxury goods in the fashion centers of Western Europe and North America. Predictions for the luxury markets and high fashion items are not encouraging. Northern buyers indicate a bit more interest in taking on carcass goods in hopes of putting together a collection of castor glands. Well handled, plump castor could reach $40 per pound or more.

MUSKRAT: China will take the vast majority of the goods offered. They are tough traders, but competition among the growing number of Chinese buyers is expected to keep prices reasonable, considering the current market conditions. If at all possible, let the market settle down — January — before selling. You’re not likely to see any $5 ’rats this season, but they are easy to catch and put up. If the numbers are available in your area, a nice collection of good winters will be worthwhile. There could be some pleasant surprises later in the season.

WILD MINK: Dollar for dollar, you’ll do better targeting this article than raccoon. This is particularly true for trappers in the Southern and Southeastern regions. Prices will be low, but buyers expect to see future sales. China’s increasing demand for mink, especially cheap goods for internal consumption, is expected to keep demand at the present level. Mink hats, trimmed garments and novelty items are reportedly hot sellers in China. Sure, mink will be cheap, but I believe saleable. You can’t say this for some species.

RACCOON: This mainstay of the modern fur trade has been hit hard by the downturn in the Russian economy. That’s always a problem when you have all your eggs in one basket. Right now, our basket has a big hole in it. Fur buyers are understandably nervous. There are still hundreds of thousands of unsold pelts from last season. Some of these are smalls, early pelts and low grades, but a large number are the better collections waiting on a price. If you don’t have a meat market, it would be a good idea for trappers and hunters to pass up or turn loose the smalls. Beyond the largest heavies from Regions 12 and Eastern Region 10, very few skins will be traded above $10. Sure, you’ll find some buyers offering a tops of $12, possibly $15, or even $18, but watch the averages. Expect to see the toughest grading system ever. Due to these factors, averages will be very low. Many wet or those on the carcass will be discounted $4 or $5, making them nearly valueless.

OTTER: The large, darker, northern goods are about the only ones finding any interest. This is not likely to change anytime soon. Southern goods, with the typical thick leather, pale colors and uneven guard hair will be difficult to market. The best blacks and dark browns with thin leather and silky fur will likely continue to be snapped up by Canadian makers of exclusive fashion garments. Few fall into this category. China is back in the otter market, but it is far different than when Tibet was clamoring for pale otter. The Chinese are seeking darker skins with a lot of square inches of fur.

RED FOX: This market has been weak for a number of seasons and is headed into an even weaker demand this year. Only the very best “cherry reds” will find any real interest, and even then they will need to be large and fully prime. Red fox is used almost exclusively as a trim item. When the market is flooded with trim goods, there is not much interest unless they can be bought very cheap. Pales, smalls and flat goods will go looking for takers. The Scandinavian fox ranchers saw their crop dumped on the market and below production cost. Reportedly, they are significantly cutting production. This might help several years down the road.

GRAY FOX: Greece and Turkey were major players in this market, but the finished goods were intended for the Russian market. When the bottom fell out of the Russian retail fur market, this article was hit just as hard as the raccoon markets. A number of buyers I have visited with are still holding goods from last season, particularly with Southern and some Western collections. Presently, buyers in Regions 1, 2 and Eastern 11 are talking about opening levels in the range of $10 to $12. But remember, they were able to move most of last season’s heavy collections. Not so in the South and West.

COYOTE: There’s not much positive that can be said about the future of this market, certainly in the short term. There remains a significant carryover of some pretty nice collections. There are tens of thousands of unsold pelts scattered around the country. A buyer needs to see interest in the goods he’s holding and some firm information before jumping in and pushing coyote prices when he still has goods from previous seasons. Buyers are expected to closely watch the early international auctions (FHA Jan. 9 and NAFA Jan. 11) before showing any interest in this market. These early sales might give them some indication of retail activity, but not much.

BOBCAT/LYNX-CAT/LYNX: Certainly a tough call. Last season closed out on something less than a positive note. Country buyers are expect to be very gun shy about the early offerings. Look for the buyers of the high-value ’cats to be late entering the game. Speculation will be the name of game. It will continue to remain that way until there is some indication of the movement of the retail luxury fur trade; that likely will not be known until late January. Then too, there is a carryover of goods from last season scattered around still looking for takers. You’re not likely to see any $500 or even $400 pelts, and few, if any, over $350…and then they will have to sparkle.

Buying this article against a down market is dangerous. Too much money is tied up in an unknown. Expect the lower-grade goods from the Southern and Eastern regions to be about 50 percent less than last season, at least with the early sales.

MARTEN: There was very good clearance last season. Now the question is how strong will retail activity be this coming season. Possibly, the first early indication will be the Russian Sable auction hosted on Dec. 16 by Sojuzpushnina in St. Petersburg. While these goods cannot be compared with American/Canadian Sable, it will give fur traders some clues as to the strength and depth of the high-end luxury markets. In today’s market, the vast majority of skins will be used in the more upscale trim trade. The darker colors and larger sizes (22 to 23 inches and above) will see the highest prices. Early country buying will likely start slow due to the unsettled nature of the overall market.

FISHER: This article will most likely continue trading at reasonable levels. Don’t expect a replay of last season, as there will surely be some downward adjustments early in the season. Buyers are expected to impose a somewhat tighter grade. Since the item is now used exclusively in the trim trade, size will be a major factor. The more square inches the better. There will more interest in skins 26 to 28 inches or larger. The darker the better. Pale skins will be cheaper. Buyers that pushed country prices last season saw averages fall by the time the market developed. They are expected to be more cautious this season until retail activity has been established.

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