The traditional August holiday period is upon the fur trade. China does not usually participate in this tradition. Factories in China have run full tilt in past years when demand for full length mink garments was at its peak. This year is a glaring exception as mink factories remain idle with few orders for the coming season.
As a result, panic mode has set in among ranchers, auction houses and veteran traders.
Ranchers who remained flush with cash following many years of record profits have finally succumbed to the realities of a brutal ranch mink market. Most ranchers saw light at the end of the tunnel in September of 2016. However it now appears as if we could put in a new bottom in September of 2017. In addition, nobody knows if it might go still lower.
The Kopenhagen sale of September 2017 will be a very pivotal sale for most ranchers. They will need to make very serious decisions on the continuation of operations. Anecdotal evidence would suggest another drop will result in a very meaningful peltdown among the mostly smaller and older ranches. However, a new bear market will make even larger, more efficient operations take notice. Too many mink in the world is obviously the problem, but losing mink ranches in this country where the industry is already a shadow of its former self is a sad commentary.
International auction houses are in a vicarious position. They want to solicit and sell mink but must embrace the fact that there are simply too many mink in the world. Aggressive competition to sell the western world’s mink production must be tempered with realism.
Auction houses can no longer in good faith promote unfettered production increases amongst ranchers. The world no longer needs 100 million mink and the auction houses must adjust their attitudes considerably if they want a healthy industry in the future. Some auctions are still living in an alternative reality where the people with the mink made the rules. The people wanting to buy the mink are now in the position of power. Ranchers must raise fewer, better and bigger mink. This mantra is not yet being embraced by most auction houses and will continue to hurt Ranchers and wild fur producers alike until it changes.
I have not ever witnessed a more pessimistic tone among veteran fur traders and industry insiders like I am right now. I have been in the business for 35 years and it is truly depressing. The wild fur business is definitely better than the ranch mink business at this point. Beaver, coyote, bobcats and muskrat remain quite salable and are at semi-attractive prices for most trappers. Even raccoon is possibly better property than ranch mink. There could be some unexpected upsides. Russia could surprise, but it is becoming increasingly unlikely as the political situation worsens. We are preparing for a very difficult year and will be ready if anything positive happens. I realize this blog is very mink-centric, but ranch mink prices dictate our wild fur market, and I am constantly trying to gauge that market, which is important for you. We will also be blogging weekly to keep you the trapper informed.