Post by Decatur on Oct 1, 2009 21:42:54 GMT -5
Fur Market Forecast
By Parker Dozhier
For several years now my crystal ball has been becoming increasingly cloudy. Obviously, it was time for it to be restored, so I shipped it back to the factory — Merlin’s Crystal Balls, Tarot Cards and Tea Leaves. Merlin sent a note saying he was three years behind with orders — mostly from oil speculators — and that I was on my own. So, here goes.
Last season our wild furs destined for the high-fashion markets sold at reasonable levels considering the global economic upheaval. While prices for the better ’cats, marten, fisher and select beaver fell, it was certainly not as dramatic as the low offers on raccoons, coyotes and gray and red foxes. Moreover, international clearance was better on the high-fashion goods.
My first stop was to pick up a copy of the Fall issue of Vogue. No doubt this publication is the “Gold Standard” for those with obscene wealth. I say this because anyone who would pay $5,000 to $10,000 for a handbag simply to carry around an American Express Card, well, you get the idea.
The first thing I noticed was the weight — a lot lighter than recent years. Last year’s fall issue weighed in at 5 pounds. Not this year.
Could this be an important indicator to the near future for our better, select wild furs?
During other economic ups and downs, it was a long held assumption that the “Super Wealthy” were, for the most part, immune. Their lifestyle was unaffected as well as their spending patterns.
Digging still deeper, The Wall Street Journal reports a full page ad in Vogue sells for $120,000. There are a lot fewer ads this year.
In another Journal article, Rebecca Lindland, an analyst who’s focus is on the high-end luxury markets, is quoted as saying, “Conspicuous consumption is no longer in.”
Do these marketers of expensive clothing, accessories, furs and beauty aids know something we don’t? Are these early indications that the luxury markets are anticipating a serious downturn? How will this impact the movement of our better ’cats, marten and fisher?
We can be certain there will be very little interest shown by most fur buyers when the season kicks off. Why should they take a substantial risk when they have no firm information regarding retail activity?
Retailer furriers are just as uncertain. The domestic furriers I have visited with admit to operating with dramatically reduced inventories.
“We can get overnight delivery from our wholesale vendors if a customer is looking for an item we don’t have in stock,” said the buyer for Benski/Fletcher Furs.
Incidently, the only wild furs they stock are sheared beaver and red fox.
In Russia, our primary customer for wild furs, the situation is compounded by restrictions on consumer credit cards and banks withdrawing lines of credit to merchants.
Speculation is not a game for the faint-of-heart. Most who engage in speculation during this current economic environment are looking for quick profits, but a short turn-around. Today, there are no short turn-arounds in the wild fur trade.
During the actual “Fur Boom” of the late ’70s and early ’80s, a quick turn-around was the order of the day. A small country fur buyer could put together $5,000 or $10,000 worth of fur and sell his collection in a matter of days to a major regional collector. Sure, the profit might be only a couple of bucks a pelt, but volume and quick turn-round made it a worthwhile business.
That is no longer the case. Most fur buyers today are buying with their own reserves — money they are willing to invest, often for an extended period of time, to make a marginal profit. They don’t know how long that wait will be in today’s market.
But, this too was profitable for a few years during the recent “Fur Bubble.” A bubble with all of the oxygen pumped in was coming from Russian consumers. The problem associated with a bubble is that you will never know when it will burst. This was the case with Beanie Babies and Hula-Hoops, and it was certainly true with our wild furs.
The early Scandinavian ranch fur auctions have often been considered the first indication of future demand. Country fur buyers and international auction officials monitored the activity closely for clues as to the viability of the market.
In today’s economic environment, with China dominating the ranch fur markets, the information gleaned from early auctions seem to be of little value as related to wild fur markets.
A number of Chinese fur makers — particularly those new to the trade — are reported to be in serious financial trouble. Evidently, they extended substantial lines of credit to
Russian fur retailers anticipating another robust year. Obviously, that didn’t happen. It is quite possible this will become an issue for mink ranchers.
Oh sure, if ranch mink prices continue to advance and demand is high, wild fur buyers might take a little stronger position on early muskrats. Nice, heavy, shearable beaver might find some added attention, but beyond that not much will be learned.
Your early pelts might find a willing buyer. If you like the offer, take it. If you don’t, turn it down and keep trying to find a satisfying offer. It might get better or worse. The buyers have no more information than you.
Let’s just get out there and trap. Do what we love. What we know. There is no outdoor experience that equals trapping. We’re there, day in and day out. We live in the real world. No one can be any closer to nature than a trapper. The sun rising over a marsh, with the ducks headed South in the morning mist. What’s around the next bend in the stream or the next turn on the trail?
The important thing is that we keep the tradition alive.
Oh yeah, I wrote Merlin back and told him to keep the crystal ball. I don’t need it, I’ve got the Wall Street Journal and Vogue.
MARKET BRIEFS
BEAVER: Early offers will be based solely on speculation. There remains a limited demand from high fashion fur makers in Montreal and New York with some going to designers in Europe. Those users will be looking for the heavy shearable goods.
Russia, a prime taker of long hairs used natural, will be slow coming into the market. Retail sales in Russia will be the key and that is not expected to develop early, if at all.
Expect buyers to be highly selective, grading very tight and ignoring wet goods. Early highs of $20 will be few and rare. Due to the volatility of market, the harvest is expected to be very low. castor prices will likely see advances due to the short harvest.
MUSKRAT: A great deal will depend on the early ranch mink sales. Should they go well, with good clearance — not likely — advances might be in order.
Buyers willing to speculate on early goods will most likely attempt to average $2 or less to start. After retail activity in China has been assessed, advances might be coming. The harvest will continue to be a mere fraction of the historic highs. With both China and Korea developing as the major takers, there could be some added competition later in the season.
WILD MINK: Most will be dyed and used as trim or for constructing hats. This is one article that buyers will not be reluctant to take on, but at very low prices. Last season clearances on the international auctions was reasonably good, considering the overall general condition of the fur trade, but prices were disappointingly low.
The very best from the Northern tier regions will continue to go to Italy, but again look for early offers in the range of $12 to $14 tops.
RACCOON: This is almost exclusively a Russia item. Until there is a major turnaround in the economic situation there, expect weak markets. There is massive carryover out in the country and at the international auction facilities. While an exact inventory would be impossible to determine, something close to a half million skins are setting unsold at various locations. Until these goods from previous seasons have been absorbed, expect very little buyer interest in most collections.
The very best of the Jumbos and XXXLs from the North central regions will still be marketable, but at prices less than half of those paid two years ago. The best and brightest of those larges will likely see early offers of $15 to $18. At this point, the majority of buyers have no firm information, so they will either simply not buy the early goods, or offer low prices to discourage the sellers from taking the offer.
Semi-heavies in the larger sizes will still find buyers, but again at low prices. Coat types will be difficult to move unless large with bright colors.
OTTER: Considering the limited numbers being taken, some buyers indicate a willingness to speculate, offering $25 or so for the better darks. The trophy market and taxidermy trade offers an alternative outlet. Typically, most taxidermists prefer to do their own skinning, so freeze whole.
If the retail trade becomes active, a late-season market could develop with prices moving upward; toward $40 or a little more for the darks. Pales will be cheap; around $15 to $20.
There was good clearance last season. Now we’ll have wait to see if those goods move on to the consumers.
RED FOX: The deep cherry reds from along the Atlantic Seaboard are expected to see the best action; possibly $15 to $20. The darks from the Pacific Northwest will also be saleable. These better colors will likely open around $20. Most of the pales, those with frosty rumps and the flatter skins will either be turned away or see offers of $5 to $8.
Until there is some firm information regarding consumer activity in Russia, Korea and China, country buyers will be reluctant to invest in collections without knowing when they will be able to sell them.
GRAY FOX: This article was introduced to the upwardly mobile Russian buyers and acceptance, while slow to develop, was certainly noticed when it occurred. Prices, which had been depressed for many years, saw dramatic increases each season. It seems we are back where we started.
Look for early offers of $5 to $8, some possibly a bit more. There is a very large carryover at the various collection points. These will need to be absorbed into the trade before buyers will show any interest in the fresh goods.
Gray fox make and interesting habitat mount. Inquire with the area taxidermists for an alternative outlet.
COYOTE: There are large collections of this article scattered about the U.S. and Canada, many from a couple of years ago. These unsold goods will continue to dampen any interest in fresh goods. Some of the very best from the High Country will find a little interest, but the vast majority will be turned away.
The world is awash with trim goods at low prices. Ranch fox prices have been falling. Due to the high production of trim goods and weak markets, the Scandinavian fox ranchers are cutting herd size. It will take several years after the economic recovery to see any improvements in this market.
BOBCAT / LYNX-CAT / LYNX: This is a very difficult item to make predictions on regarding movement, demand and prices. Prices fell last season across the board, but the best of the best saw only a 50 percent decline. These selects sold well internationally at the lower prices. Clearance was somewhat better than expected.
No doubt, this activity was to replace inventories of garments sold the previous season and before the economic upheaval that shook the world. How these replacement inventories are selling now is the burning question. Clearance of the lower grades was acceptable, considering the economic conditions, but that is possibly due to fashion makers looking for a lower cost alternative.
Now the movement of expensive, high-fashion items this coming season is a big unknown. How well will these replacement inventories sell this winter even at a lower retail price? That answer will be not come to light until sometime around late January or February of next year.
High fashion retailers and fur salons will not be in a hurry to replace stocks if sales are off considerable this coming winter. Don’t be in a hurry to sell unless necessary. However, on the other side of the coin, well-financed speculators (gamblers) might see an opportunity here for a profit and offer prices only slightly lower than last season.
MARTEN: The harvest from last season is sold out. Considering the current economic meltdown, prices held up well. How well these goods, now in the form of finished garments, will sell this coming winter will be the key to the prices paid for the fresh raw skins. Buyers, understandably, will be cautious at the beginning of the season. Again, China will likely set the tone.
Sojuzpushnina, St. Petersburg, Russia will conduct a sable auction on Dec. 14 to 16 this year. While impossible to compare Russian Sable with our marten, this early sale might shed some light on the viability of the high fashion trade. I expect early offers will vary greatly as buyers have little, or no, firm information to base prices on.
FISHER: Most of the goods offered on the international auctions are sold out. Prices averaged slightly over $35. A reasonable average and good clearance considering conditions.
Most prime skins will likely trade in the $25 to $30 range until demand is established. That will most likely not be known until late January or February. China is expected to be the major taker and will probably be bargain shopping early.
By Parker Dozhier
For several years now my crystal ball has been becoming increasingly cloudy. Obviously, it was time for it to be restored, so I shipped it back to the factory — Merlin’s Crystal Balls, Tarot Cards and Tea Leaves. Merlin sent a note saying he was three years behind with orders — mostly from oil speculators — and that I was on my own. So, here goes.
Last season our wild furs destined for the high-fashion markets sold at reasonable levels considering the global economic upheaval. While prices for the better ’cats, marten, fisher and select beaver fell, it was certainly not as dramatic as the low offers on raccoons, coyotes and gray and red foxes. Moreover, international clearance was better on the high-fashion goods.
My first stop was to pick up a copy of the Fall issue of Vogue. No doubt this publication is the “Gold Standard” for those with obscene wealth. I say this because anyone who would pay $5,000 to $10,000 for a handbag simply to carry around an American Express Card, well, you get the idea.
The first thing I noticed was the weight — a lot lighter than recent years. Last year’s fall issue weighed in at 5 pounds. Not this year.
Could this be an important indicator to the near future for our better, select wild furs?
During other economic ups and downs, it was a long held assumption that the “Super Wealthy” were, for the most part, immune. Their lifestyle was unaffected as well as their spending patterns.
Digging still deeper, The Wall Street Journal reports a full page ad in Vogue sells for $120,000. There are a lot fewer ads this year.
In another Journal article, Rebecca Lindland, an analyst who’s focus is on the high-end luxury markets, is quoted as saying, “Conspicuous consumption is no longer in.”
Do these marketers of expensive clothing, accessories, furs and beauty aids know something we don’t? Are these early indications that the luxury markets are anticipating a serious downturn? How will this impact the movement of our better ’cats, marten and fisher?
We can be certain there will be very little interest shown by most fur buyers when the season kicks off. Why should they take a substantial risk when they have no firm information regarding retail activity?
Retailer furriers are just as uncertain. The domestic furriers I have visited with admit to operating with dramatically reduced inventories.
“We can get overnight delivery from our wholesale vendors if a customer is looking for an item we don’t have in stock,” said the buyer for Benski/Fletcher Furs.
Incidently, the only wild furs they stock are sheared beaver and red fox.
In Russia, our primary customer for wild furs, the situation is compounded by restrictions on consumer credit cards and banks withdrawing lines of credit to merchants.
Speculation is not a game for the faint-of-heart. Most who engage in speculation during this current economic environment are looking for quick profits, but a short turn-around. Today, there are no short turn-arounds in the wild fur trade.
During the actual “Fur Boom” of the late ’70s and early ’80s, a quick turn-around was the order of the day. A small country fur buyer could put together $5,000 or $10,000 worth of fur and sell his collection in a matter of days to a major regional collector. Sure, the profit might be only a couple of bucks a pelt, but volume and quick turn-round made it a worthwhile business.
That is no longer the case. Most fur buyers today are buying with their own reserves — money they are willing to invest, often for an extended period of time, to make a marginal profit. They don’t know how long that wait will be in today’s market.
But, this too was profitable for a few years during the recent “Fur Bubble.” A bubble with all of the oxygen pumped in was coming from Russian consumers. The problem associated with a bubble is that you will never know when it will burst. This was the case with Beanie Babies and Hula-Hoops, and it was certainly true with our wild furs.
The early Scandinavian ranch fur auctions have often been considered the first indication of future demand. Country fur buyers and international auction officials monitored the activity closely for clues as to the viability of the market.
In today’s economic environment, with China dominating the ranch fur markets, the information gleaned from early auctions seem to be of little value as related to wild fur markets.
A number of Chinese fur makers — particularly those new to the trade — are reported to be in serious financial trouble. Evidently, they extended substantial lines of credit to
Russian fur retailers anticipating another robust year. Obviously, that didn’t happen. It is quite possible this will become an issue for mink ranchers.
Oh sure, if ranch mink prices continue to advance and demand is high, wild fur buyers might take a little stronger position on early muskrats. Nice, heavy, shearable beaver might find some added attention, but beyond that not much will be learned.
Your early pelts might find a willing buyer. If you like the offer, take it. If you don’t, turn it down and keep trying to find a satisfying offer. It might get better or worse. The buyers have no more information than you.
Let’s just get out there and trap. Do what we love. What we know. There is no outdoor experience that equals trapping. We’re there, day in and day out. We live in the real world. No one can be any closer to nature than a trapper. The sun rising over a marsh, with the ducks headed South in the morning mist. What’s around the next bend in the stream or the next turn on the trail?
The important thing is that we keep the tradition alive.
Oh yeah, I wrote Merlin back and told him to keep the crystal ball. I don’t need it, I’ve got the Wall Street Journal and Vogue.
MARKET BRIEFS
BEAVER: Early offers will be based solely on speculation. There remains a limited demand from high fashion fur makers in Montreal and New York with some going to designers in Europe. Those users will be looking for the heavy shearable goods.
Russia, a prime taker of long hairs used natural, will be slow coming into the market. Retail sales in Russia will be the key and that is not expected to develop early, if at all.
Expect buyers to be highly selective, grading very tight and ignoring wet goods. Early highs of $20 will be few and rare. Due to the volatility of market, the harvest is expected to be very low. castor prices will likely see advances due to the short harvest.
MUSKRAT: A great deal will depend on the early ranch mink sales. Should they go well, with good clearance — not likely — advances might be in order.
Buyers willing to speculate on early goods will most likely attempt to average $2 or less to start. After retail activity in China has been assessed, advances might be coming. The harvest will continue to be a mere fraction of the historic highs. With both China and Korea developing as the major takers, there could be some added competition later in the season.
WILD MINK: Most will be dyed and used as trim or for constructing hats. This is one article that buyers will not be reluctant to take on, but at very low prices. Last season clearances on the international auctions was reasonably good, considering the overall general condition of the fur trade, but prices were disappointingly low.
The very best from the Northern tier regions will continue to go to Italy, but again look for early offers in the range of $12 to $14 tops.
RACCOON: This is almost exclusively a Russia item. Until there is a major turnaround in the economic situation there, expect weak markets. There is massive carryover out in the country and at the international auction facilities. While an exact inventory would be impossible to determine, something close to a half million skins are setting unsold at various locations. Until these goods from previous seasons have been absorbed, expect very little buyer interest in most collections.
The very best of the Jumbos and XXXLs from the North central regions will still be marketable, but at prices less than half of those paid two years ago. The best and brightest of those larges will likely see early offers of $15 to $18. At this point, the majority of buyers have no firm information, so they will either simply not buy the early goods, or offer low prices to discourage the sellers from taking the offer.
Semi-heavies in the larger sizes will still find buyers, but again at low prices. Coat types will be difficult to move unless large with bright colors.
OTTER: Considering the limited numbers being taken, some buyers indicate a willingness to speculate, offering $25 or so for the better darks. The trophy market and taxidermy trade offers an alternative outlet. Typically, most taxidermists prefer to do their own skinning, so freeze whole.
If the retail trade becomes active, a late-season market could develop with prices moving upward; toward $40 or a little more for the darks. Pales will be cheap; around $15 to $20.
There was good clearance last season. Now we’ll have wait to see if those goods move on to the consumers.
RED FOX: The deep cherry reds from along the Atlantic Seaboard are expected to see the best action; possibly $15 to $20. The darks from the Pacific Northwest will also be saleable. These better colors will likely open around $20. Most of the pales, those with frosty rumps and the flatter skins will either be turned away or see offers of $5 to $8.
Until there is some firm information regarding consumer activity in Russia, Korea and China, country buyers will be reluctant to invest in collections without knowing when they will be able to sell them.
GRAY FOX: This article was introduced to the upwardly mobile Russian buyers and acceptance, while slow to develop, was certainly noticed when it occurred. Prices, which had been depressed for many years, saw dramatic increases each season. It seems we are back where we started.
Look for early offers of $5 to $8, some possibly a bit more. There is a very large carryover at the various collection points. These will need to be absorbed into the trade before buyers will show any interest in the fresh goods.
Gray fox make and interesting habitat mount. Inquire with the area taxidermists for an alternative outlet.
COYOTE: There are large collections of this article scattered about the U.S. and Canada, many from a couple of years ago. These unsold goods will continue to dampen any interest in fresh goods. Some of the very best from the High Country will find a little interest, but the vast majority will be turned away.
The world is awash with trim goods at low prices. Ranch fox prices have been falling. Due to the high production of trim goods and weak markets, the Scandinavian fox ranchers are cutting herd size. It will take several years after the economic recovery to see any improvements in this market.
BOBCAT / LYNX-CAT / LYNX: This is a very difficult item to make predictions on regarding movement, demand and prices. Prices fell last season across the board, but the best of the best saw only a 50 percent decline. These selects sold well internationally at the lower prices. Clearance was somewhat better than expected.
No doubt, this activity was to replace inventories of garments sold the previous season and before the economic upheaval that shook the world. How these replacement inventories are selling now is the burning question. Clearance of the lower grades was acceptable, considering the economic conditions, but that is possibly due to fashion makers looking for a lower cost alternative.
Now the movement of expensive, high-fashion items this coming season is a big unknown. How well will these replacement inventories sell this winter even at a lower retail price? That answer will be not come to light until sometime around late January or February of next year.
High fashion retailers and fur salons will not be in a hurry to replace stocks if sales are off considerable this coming winter. Don’t be in a hurry to sell unless necessary. However, on the other side of the coin, well-financed speculators (gamblers) might see an opportunity here for a profit and offer prices only slightly lower than last season.
MARTEN: The harvest from last season is sold out. Considering the current economic meltdown, prices held up well. How well these goods, now in the form of finished garments, will sell this coming winter will be the key to the prices paid for the fresh raw skins. Buyers, understandably, will be cautious at the beginning of the season. Again, China will likely set the tone.
Sojuzpushnina, St. Petersburg, Russia will conduct a sable auction on Dec. 14 to 16 this year. While impossible to compare Russian Sable with our marten, this early sale might shed some light on the viability of the high fashion trade. I expect early offers will vary greatly as buyers have little, or no, firm information to base prices on.
FISHER: Most of the goods offered on the international auctions are sold out. Prices averaged slightly over $35. A reasonable average and good clearance considering conditions.
Most prime skins will likely trade in the $25 to $30 range until demand is established. That will most likely not be known until late January or February. China is expected to be the major taker and will probably be bargain shopping early.