North American Fur Auctions has provided a couple of recent updates on the state of the wild fur market amidst a great deal of talk about a huge drop off of last year’s high fur prices.  Here’s the latest from NAFA’s Herman Jansen:

Wild Fur Update December 24, 2013

Now that we have had the results of the Kopenhagen and Helsinki December auction sales, it is time to reflect on these results.

Mink is coming off a very high and very profitable level and it is of no surprise to many that we are seeing a decline – China’s mild weather, together with some transportation problems being the main reason. Russia all along has found the recent price levels too high for its consumers. As mentioned earlier, over the last 10 years the December and January auctions have seen the lowest prices of the season. We still have 5 weeks of important retail left in China and in our traditional markets we have cold weather which should result in higher fur retail, although this is mostly in trim.

Our ace in the hole for wild fur is the trim trade, which has, up until now had a very good selling season. Yes, we will see a reduction from last year’s very high prices, but with NAFA scheduling 3 major auctions in 2014, we have enhanced our trapper producers’ chances of maximizing their return. The increased auction schedule comes at an absolutely perfect time for all of us. Many of you will recall why we no longer hold auctions in December and January. Quite simply, the timing is wrong. Manufacturers and retailers are still selling last year’s inventory and until the current retail season is over, are not ready to purchase for the next retail season.

As it looks right now, there will be a reduction in price levels for most furs, but on the positive side, this will attract new consumers that were unable to buy furs because of last year’s high prices. The correction in the market highlights that very commercial and lower end goods will be in for a bigger decline than better qualities. We believe we will see this throughout the selling season. Good quality, well handled skins will still bring very respectable prices to our producers…………..

Click here to read the full December 24th update.

Wild Fur Update December 27, 2013

We have been receiving a lot of calls from our producers asking about the situation in China and also what sale they should offer their skins in.

As your auction company, it is our job to make sure that we maximize the return on your skins in every auction. In the fur market it has always been exceptionally difficult to predict which sale is going to be the best and this year is no exception. You may be hearing the doom and gloom stories being circulated by certain fur buyers. These are being used to try and buy your skins now, at heavily discounted prices. It is their prerogative – after all we believe in freedom of speech. Here at NAFA, as in previous years, we have sold and paid out 100% of all the skins we received last year, so our track record speaks for itself. We are confident in the market and we believe our clearances will be excellent again this year. We have added 50% more space to our auction room and all this has been done because we truly believe in our future.

NAFA has a dedicated marketing team of 14 staff worldwide, whose job it is to gather sales and marketing information and promote NAFA’s product to our customers. They also report back to us on the market conditions in each of their markets. We gather this information and pass it on to you as best we can. Right now we are still in the middle of the retail season in our biggest market of China, and Russia’s retail season is still ongoing, so it is too early to tell you how successful the retail season has been. What we do know however, is that besides the transportation problems in China, they have had a warmer than usual November and December, which has had a negative effect on retail. Apparently it is now beginning to turn colder so we will have to wait and see what January brings.

This year we have added the April sale to our schedule because of the increased quantities that we will be selling. We have spread our three auctions out evenly so that starting in February, every 7 weeks or so we will have a major, attractive auction. This is better for everyone. For our producers it makes life easier by adding one significant sale. For our buyers it allows them to even out their purchases, helping with their cash flow.

Today, China manufacturers nearly 80% of all the fur garments in the world. It buys the skins at the auction; it dresses the skins in China; it manufactures the garments in China; and then, quite often, especially in the case of wild fur, it re-exports them to Russia, Europe and North America. In the trimming business, which is wild fur’s biggest buyer, China also has a very important role, but it is not as dominant in manufacturing as it is in the garment business. Ranch raised mink has a higher dependency on China, whereas the trimming business has a wider range of customers worldwide. For example, in North America there are several very large winter coat manufacturers that are using fur trim on hoods and sleeves, etc. Coyotes and raccoons are the favorite trim.

Click here to read the full December 27th update.