With fewer cows, leather bags cost more

Beef lovers aren't the only ones with sticker shock from the shrinking U.S. cattle herd. Fewer cows also mean tighter supply of hides used in luxury car upholstery, handbags, shoes and Anita Dungey's dog collars. "The last couple of years have been horrendous," said Dungey, the president of Auburn Leathercrafters, a collar and leash maker in Auburn, N.Y. Her leather costs rose 83 percent in two years to $8.25 a foot. "It's been hard to keep up," forcing Auburn to boost prices by as much as 10 percent, the most in at least three decades, she said. While ranchers raise cattle mostly for meat, a single hide can produce enough leather for 11 cowboy boots, 20 footballs or one bucket seat. The herd began the year as the smallest since 1951, after record feed costs and drought over the past decade. Output is dropping just as Americans boost spending on leather goods and luggage to the most in at least 14 years. The cost of U.S. beef has surged to a record this year, and leather isn't far behind. Heavy native steer hides rose 17 percent in the 12 months through Nov. 8 to $122.30, the highest since the government began tracking the benchmark in 1998. Global demand is growing with improved sales of cars and luxury items, especially in China. Boot-maker Wolverine World Wide Inc., which bought $300 million of leather last year, says prices will remain near all-time highs...more