Fur Market Report: November 2006
By Parker Dozhier
It’s taken a couple of years, but most carry-over raccoon inventories have finally been depleted. North American Fur Auctions’ late-September sale reported 100 percent clearance of lots containing pelts from sundry shippers. About the only unsold raccoon still waiting for buyers are large collections controlled by dealers.
Don’t view these carry-over dealer lots as a drag on the market. Dealer lots often have unreasonably high limits — especially at this time of the year, just before the fresh goods become available.
Some years, this type of market speculation pays off. Other years, it doesn’t. However, some fur buyers use this tactic as a bargaining tool — claiming they are still holding “20,000 from last season.” It is not an uncommon buying ploy.
Starting in late August, then really picking up through September, private treaty sales of raccoons at both auction houses were robust.
Don Rumford of Fur Harvesters Auctions said the sales have been all over the map.
“We’ve had the Russians and Greeks looking for heavy goods, the Turks wanting the semi-heavies and the Chinese buying the coat types,” he said.
Demand for fur in Russia and China continues to grow. And it was evident at the recent late-season ranch fur auction in Copenhagen. The late-season auction usually consists of breeder mink and foxes, and low-grade goods that have been passed over at previous sales.
Remarkably, prices advanced 20 percent over the June offering. In fact, ranch mink prices have more than doubled since 2003. The market advance is attributed solely to the increasing demand from the Russians and Chinese.
The upbeat activity in the ranch fur industry is beginning to have a direct impact on wild fur prices. We have already seen the effect on the muskrat market. The recent NAFA sale featured a small offering of 23,000 spring muskrats. Averages on late-harvested region 1 and 2 goods should have dropped a dollar or two, simply because of the springy nature of the collection. But that didn’t happen. Averages for the spring goods were in line with the more seasonable good winter collections.
An increasing number of high fashion designers are seeking a new look. They are finding it in marten, fisher and spotted cats. Now, they need to discover raccoon, red fox, coyote and wild mink.
To address the growing interest in wild fur, NAFA will soon announce the opening of the NAFA Design Centre in Toronto. According to Tina Jagros, executive director of the North American Fur Association, the school is tailored toward introducing fur users who are unfamiliar with wild furs to the many uses of these items. It will focus on uses beyond garments.
The challenge facing those involved in the wild fur harvest is in meeting the needs of increased usage by designers. When prices are suppressed, or collections are carried over from one season to the next, some trappers lament that we have overproduced. Nothing could be farther from the truth.
Last season, the ranch fur industry marketed 36 million mink — not including the internal production in China, believed to be in excess of 15 million. Yet ranch mink remain in short supply and prices continue to advance.
Admittedly, wild furs have a much narrower appeal than ranch mink. But the fact remains: The larger the offerings, the more international buyers the offerings will attract. Major Chinese users of muskrat, for example, would be reluctant to travel halfway around the world to attend a sale offering only 25,000 skins. But they would come ready to buy at an auction offering 300,000 or more.
The more wild fur we produce, the more users and buyers we will attract. A fur garment designer working for a major manufacturing company will not use a fur available in only limited quantities.
Roughly 25,000 otters remain unsold, awaiting further developments in China. It could be a long wait. Reportedly, NAFA agents in China are holding unofficial discussions with Chinese government leaders. The problem is truly a basket of snakes. There is the tariff imposed on importing otters into China. Plus, once in China, the otters are subject to the highly punitive Value Added Tax.
As if these taxes were not enough to dampen the trade, add the problems associated with CITES regulations. Simply stated, most Chinese customs officials can’t tell a shipment of our legal river otters from a boatload of sea otters. So rather than attempt to learn the difference — it is certainly not that difficult — they keep all otters from entering the country. According to a spokesman with the U.S. Fish & Wildlife Service, the identification problem is being addressed.
The Canadian government’s failure to fully fund an adequate staff of CITES enforcement agents is another problem.
Otter collections have been mainly withdrawn from the international auctions since May. A small number of darks have moved to Russia and Europe. Apparently, auction officials in Canada are rethinking the pricing structure of otters in light of these punitive taxes and burdensome regulations. They are preparing to see what can be sold, and at what price, at the February sales.
Fur buyers will certainly be watching the weather, particularly in Russia and Eastern Europe. Another mild winter in Russia would put the brakes on the immediate demand for raccoon and soften markets for other wild furs. However, a typical harsh winter, Russia’s expanding economy and the free flow of goods into the country could boost prices later in the season.
Each year, the amount of wet fur and green goods sold on the carcass at trapper-hosted auctions appears to be increasing. No doubt, this is because of the time involved in fleshing and stretching, or simply the lack of experience and equipment. Understandably, this usually results in a significantly lower price than the prevailing market.
Bob McQuay, spokesman with NAFA, points out that selling wet or on the carcass might not be a bad idea for some harvesters.
“If the fur can’t be finished right, it’s best to let someone who knows how do it, do the work,” he said.
That’s a good point. An otherwise perfectly good pelt that is improperly finished will be listed as damaged if it shows signs of excessive grease.
Participation in the fur harvest is expected to increase a little this season. Expect to see a few new faces attracted by somewhat higher prices, but not many.
Regardless of the size of the harvest this season, it will still be minuscule compared to the harvest 20 years ago. During the early 1980s, we produced 5 million raccoons, 10 million muskrats and 80,000 bobcats and lynx each season. I doubt we’ll harvest even close to a million raccoons this season.
If we are guilty of anything, it’s not harvesting enough fur.