IN THE good times, a hide can add 10 per cent to the value of a steer.
For some processors, during those times, the hide can cover the cost of processing a carcass.
The last good time was in September 2007.
Even though the Australian dollar was trading at a relatively high US85c, exporters were paying salted hide rates of between $40, off a small domestic steer, and $100, off a big export bullock.
A year later, the financial world collapsed. But more important, for the cattle hide market, was the collapse of the luxury end of the US automotive sector and the Italian leather-goods accessory markets.
Leather demand for fashion accessories and car upholstery is a very good barometer of the share and financial markets.
Although salted hides can be held unprocessed for several months, they can't be stockpiled.
Last December prices for cattle hides hit a low and have struggled to recover, until recently.
Domestic hides in Victoria, which in September last year traded for about $30, fell below $10 during the first half of this year.
Ian Stokes-Blake, of AI Topper and Co, one of Australia's largest exporters of hides, said the Chinese could name their price.
Mr Stokes-Blake said there was a lot of contract renegotiations as the Chinese attempted to cope with supplies outstripping demand.
He said the US car market and then the fashion accessories market were the major factors in the collapse of the hide market.
Mr Stokes-Blake said the footwear sector took up much of the over-supply.
Last month, in line with the recovery of the financial market, cattle hides were also on the up.
Mr Stokes-Blake said Australian prices should be considerably higher, but for the strength of the Australian dollar.
He said Italy was now back in the market, and demand from Chinese processors was particularly strong at the moment as they upped their output prior to the Chinese New Year.
Mr Stokes-Blake was confident prices should hold, although he said much would depend on the exchange rates.
But despite the volatility of the export hide market, local specialist tannery Greenhalgh, at Haddon, near Ballarat, believes its business has remained very viable this year - no doubt capitalising on a period of cheaper hides.
Ross Greenhalgh said local demand for saddlery leather had remained very solid.
Part of the reason is that Greenhalgh specialises in traditional vegetable tanning, using either local wattle bark, or wattle-bark extracts from South Africa.
Mr Greenhalgh said vegetable-tanned leather remained the leather of first choice for saddlers.
