A smaller than ever beef cattle herd has created higher prices in the grocery store, but another product in our every day lives is feeling the pinch, too: leather.
Beef hide prices have more than quadrupled from March 2009 to early November of this year, when they reached a price of $119.50. Last month's peak was the highest it's been since at least 1997, when the USDA began tracking those numbers. Prices for hides have risen 17 percent in the past 12 months alone, according to a recent Bloomberg article.
About half of all leather from hides is used in footwear. Another 30 percent is used for automobile interiors and furniture, and the rest goes into apparel and accessories. One hide can produce enough leather for 11 cowboy boots, 20 footballs or one bucket seat in a car.
A shrunken inventory is one reason for the leather price hike, but intensifying demand also plays a role. The American middle class will continue to grow, and consumers will spend an estimated $21.58 billion on leather goods and luggage this year, according to industry researcher IBISWorld. That will be the most spent on this cattle by-product since at least 2000.
Worldwide demand for leather is also mounting. Global car sales alone rose 5 percent last year and are up another 2.7 percent the first three quarters of this year.
This trend is particularly apparent in China. Auto sales of new vehicles in the Asian country were 1.8 million in all of 2003. By March of 2014, sales reached an all-time high of 2.6 million sold in one month. China will sell an estimated 10 million more vehicles than the U.S. this year.
The need for leather will grow beyond automobiles. With China's middle class representing more than 300 million people, the nation's demand for leather products of all varieties is only likely to accelerate.
