Auction Prices Dented by Economic Turmoil
The National Agricultural Statistics Service (NASS) of the US Department of Agriculture has issued its latest annual report on mink production in the U.S., up to the 2008 crop year, sold at auction in February and May of 2009. (Click here for the latest NASS stats – PDF format.) Released on July 10, the report includes statistics on mink pelt production, females bred by color class, the number of mink farms, and the average price and total market value of pelts. (See also US Mink: State of the industry – 2009, FCUSA commentary, June 23, 2009)
According to NASS, mink production in the US totaled 2.79 million pelts in 2008, down 1.5% from the year-before level of 2.83 million, which in turn was down 1.4% from the previous year. These small declines really reflect a boost in production in 2006, and in the context of the last decade are still above average. Between 1999 and 2008, annual output averaged 2.68 million. The 3 million mark was last achieved back in 1991.
The sustained resurgence of interest in fur, and competition among apparel manufacturers for limited supplies of premium North American mink, helped prop up prices at auction, but against the backdrop of global economic turmoil, no one expected a repeat of the record-breaking auctions of 2007.
When the 2008 crop came under the hammer this spring, it earned $115.6 million, down from $185.8 million the year before, and the poorest result since 2003 ($102.2 million).
The average pelt price also fell to $41.50, down sharply from the all-time high of $65.70 set a year earlier. Viewed in a longer-term context, however, this is almost certainly reflective of the troubled economic times, rather than any waning in demand for premium furs. The average price for US pelts over the five-year period 2004-08 still came to $52.74, up 53% from the $34.34 average over the preceding five years.
Pelts Per Breeding Slip Back
Females bred to produce kits in 2008 totaled 691,300, for an average of 4.03 kits per breeding surviving to pelting time. This was down from 4.06 in 2007, and represented a set-back from the upward trend of recent years that saw 4.37 in 2006.
Meanwhile, NASS reports that the number of females bred to produce kits in 2009 was down sharply at 659,400. If the same number of pelts per breeding is achieved this year as last (4.03), this will result in total production of 2.66 million pelts, or a drop of about 4.7% from 2008.
Shrinkage of Farm Numbers Resumes
Starting in the late 1980s, the US mink farming sector began changing its structure and means of production. The number of farms began declining, but efficiency was increasing as farms sought out economies of scale, such as merging with other farms, and pooling resources in feed and processing cooperatives. Advances in animal husbandry, meanwhile, meant that even though the number of pelts produced fell slightly, individual farms were producing more pelts overall, and more per female bred, and the pelts were improving in quality while getting ever larger.
NASS data do not reflect the mergers that took place between farms, nor the increase in pelt sizes. Nonetheless, they are good indicators of the contraction and consolidation phase of the industry, and the dramatic improvements in efficiency and productivity.
Between 1988 and 1998, the total number of farms fell from 1,027 to 438, and the decline continued until 2005 when just 275 reported to NASS.
Then the numbers edged up to 283 in 2007, suggesting a possible new period of expansion buoyed by strong pelt prices. But in 2008, the number of reporting farms slipped back again to 274.
Meanwhile, farms that have stayed in the business continue to out-perform their predecessors.
In 2008, the average farm produced 10,170 pelts, up from 9,993 the year before. Though there have been both ups and downs, this was in keeping with a steep upward trend over the long term. In 1999, the average farm produced 7,066 pelts, and in 1989, just 4,897.
Over the five-year period 2004-2008, the number of mink farms fell by almost 8%, while average pelt production per farm rose more than 17%.
Wisconsin, Utah Continue Domination
Starting this year, NASS will no longer be reporting annually on the number of mink farms by state, but will instead publish these statistics in conjunction with the Census of Agriculture every five years. The next Census will be conducted in 2012.
In last year’s survey, for the second year in a row the leading state by number of farms was Wisconsin with 71, while 65 farms responded from former front-runner Utah.
In this year’s survey, Wisconsin continued to hold top spot in pelts produced, but recorded its first drop in output, albeit of only 0.5%, since it began expanding at the beginning of the century. In 2008, it produced 910,000 pelts, compared with 672,000 in 2001.
Meanwhile the margin between Wisconsin and its closest rival continues to grow. In 2008, Utah saw production slip for the second year in a row, by 8.3%, to 549,700. Its highest output this century was achieved in 2006, with 622,890 pelts.
These two states continued their long-standing domination of US mink production, accounting for 52.4% of total output, down just 0.9% from the year before. The next four largest producers, Oregon, Idaho, Minnesota, and Iowa, accounted for a combined 31.1%.
Black Mink Popularity Rises Further
Relative outputs of individual color phases by and large followed the same pattern as in previous years, but the dominance of black (formerly known as “standard”) continues to grow.
In 1998, black accounted for 40.5% of output, following which its relative importance declined to as low as 37% in 2002. But in 2008, it accounted for 53.7%, up 3% from 2007, which in turn was up 3% from the year before that.
Other major colors produced were mahogany at 21.7% of the total, blue iris 9.6%, demi/wild 4.1%, sapphire 3.4%, and pastel 2.2%.
