When my grandfather, Max Ohsman, started in the hide trade in 1891, he was quoted as saying, “As long as babies are born with two feet, there will always be a hide business.” Little could he or anyone else ever imagine that synthetics could replace one of the oldest commodities in the history of man. In my more than 50 years of being involved in the hide market, I cannot recall the low demand for leather affecting the raw material market as we are seeing today.
One reason is that synthetics have been so successful in producing leather substitutes that the average consumer is unaware that a product does not contain any leather. Some months ago, a friend took me for a ride in his new Tesla. I noticed that the interior was some sort of synthetic material made to look like leather. When I told my friend his seats were plastic, he was shocked. He was incredulous that his new luxury car had leather only on the steering wheel.
Just last night, a dinner guest showed me his new suede shoes that he bought at a flea market. They did look like suede, and were made by Crocs. He paid $20.00 and bought several pair. Of course these shoes were made with a synthetic suede copy.
Hide prices have been this low before. The most recent example was in 2009, when heavy Texas steers were even lower than they are now, and they didn’t bounce back overnight then either. However, I cannot recall when demand for leather footwear was as low as it is today. The leather upholstery segment, while not booming, is still doing ok, and luxury leather goods such as ladies handbags and boots are selling quite well. For footwear however, which accounts for a little over 50% of leather consumption, tanners say it’s not even a matter of price.
Let us not forget that less than 4 years ago, the demand for leather was so strong that prices for US steer hides rose to over $100.00/piece. Looking back on the Hidenet price charts, one can see how in 2009, Texas steer prices went from a low of $26.00 in the Spring to $64.00 by the end of the year.
In my opinion, current hide/leather prices will eventually be recognized as a bargain. Stylists and brands will be able to put new footwear designs on retailers’ shelves and websites at prices very competitive to synthetics and in some cases even cheaper. Consumers will always be attracted to the latest, greatest models of anything, especially when the price is low. This may take another season or two to develop, but regardless of leather substitutes that continue to improve, prices will ultimately recover.
By Don Ohsman – Publisher & CEO Hidenet