The boys of summer are safe this year, but that could change by the 2002 baseball season if leather prices continue upward in response to Europe's cattle woes.
"We've seen prices rise due to the foot-and-mouth scare," Rawlings Sporting Goods chief Steve O'Hara says. If hide prices keep going up, he says, Rawlings may raise the price of balls and gloves it started making in 1888.
Rawlings isn't alone: Whether it's bomber jacket or boot makers, couch or car interior companies, manufacturers say Europe's problems with foot-and-mouth and mad cow disease have pinched leather supplies. That came on top of a 79 percent increase in demand for leather clothing last year spurred by fashionistas.
Heavy Texas steers, a kind of raw hide, sold for 63 cents a pound last year and go for 85 cents today, with a 20 percent spike in recent weeks. The upshot:
New Hampshire boot and apparel manufacturer Timberland warned investors "there could be an adverse impact on the company's financial performance" should hide prices continue to rise next year.
At Hartmann Luggage in Lebanon, Tenn., purchasing manager Jimmy Kemp says, "It's a never-ending juggling act" to decide whether to lock in hide prices and supplies today or wait for the market to settle back.
Marketing vice president Joe Cooley says it's much the same at Garden State Tanning in King of Prussia, Pa., which makes leather interiors to ship to Japan for Toyota's top-of-the-line Lexus luxury sedans.
"We're not dealing with shortages; we're dealing with a perception of shortage that says the price will go up even though Europe's 79 million cattle are a tiny portion of a world cattle population of 1 billion plus," says Charlie Myers, president of Leather Industries of America, a Washington trade association.
"Those sad English farmers who treat their cows as pets show up on the news after they killed Bossie and put her on the funeral pyre, and it's easy to forget only 90,000 cattle have died so far to contain foot-and-mouth there," Myers says.
Foot-and-mouth is a nonfatal but disfiguring infection that spreads rapidly among cattle, sheep and other cloven-hoofed animals if not eradicated by killing the animals and burning their carcasses.
Mad cow, by contrast, is a fatal brain disease that is believed to be transmissible to beef-eating humans. That's why mad cow worries have helped halve Europe's appetite for beef, so that instead of providing 17 percent of the world's yearly harvest of hides, Europe may provide less than 10 percent.
The upshot: Leather buyers are bidding up hide prices from other sources, including the United States, Latin America and Asia.
However, marketing experts question the extent to which the price of raw hides will result in sticker shock when there's more than a little wiggle room on price for the 1.2 billion pairs of shoes the U.S. imports annually from China, where the wholesale price averages $7 a pair.
Nor will a slight price rise for a $3,000 leather sofa or $600 leather coat deter today's "core leather customer" when it comes to upscale goods, says consumer shopping analyst Britt Beemer of America's Research Group. "If the sofa costs $3,100 instead of $3,000, a determined buyer isn't going to be deterred," he says.
Gucci chief executive Domenicio de Sole, for one, confidently predicted the Italian leather-and-luxury clothing house won't see scaled-back growth in 2001 despite a slowing world economy and rising leather costs.
As for baseball gloves, half Rawlings' market is vinyl and synthetic gloves beloved by Little Leaguers. The price is affected by what OPEC charges for oil, not what cattle hides cost.
The other half are gloves crafted of steer hide that Major League players use. These gloves — made at Rawlings' Ada, Ark., plant — go for as much as $250.
Rawlings has finished its 2001 production run and has hides to last through part of 2002, but it's keeping an eye on world prices because today's price spike could signal long-term supply problems or simply be "a momentary blip," O'Hara says.
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