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WILD FUR MARKET UPDATE

January 30, 2015

January 30, 2015

We have just concluded our limited offering, January 2015 wild fur sale, which included Coyote, Raccoon, Muskrat, Red Fox and Beaver and it received mixed results. Articles that are used for trim, like Coyotes, saw outstanding demand with prices higher than last year for better Western Sections, while articles that are traditionally used by the Russian market, like Raccoon and Beaver, either were withdrawn or met with price resistance.

Muskrats sold 100%, predominantly to China, at price levels easier than our September Sale. These skins will be made into belly plates for liners and back plates for trimming and hopefully sold to the fashion industry in Korea. It would appear that the Koreans are no longer buying muskrats directly, as they have done for the past two years, but would instead prefer to buy the plates already made up from the Chinese. The lack of Korean participation in the auction room is the primary reason for the adjustment in the price of Muskrat from last season.

Beaver sold approximately 65% with a limited quantity of heavier, better quality shearing types selling reasonably well, while commercial quality, straight haired types sold at disappointing levels. The smaller size Beavers were not offered due to reduced demand and prices at the present time.

Red Fox sold 70% with premiums being paid by the trim trade for better qualities and colours, while commercial qualities and flatter sections met with resistance.

Raccoon were mainly withdrawn, primarily due to uncertainty created by the current political and economic conditions in Russia. This country has been a very important market for this article, whether it is purchased by the Russians for domestic consumption or purchased by the Chinese for export into the Russian market. We sold 350,000 Raccoon in our September Sale, which was a pleasant surprise to all. These are all scheduled for next season’s manufacturing and therefore the current market is not ready to purchase the fresh crop. As a result, we made the decision to adopt a strict selling policy to protect the price structure of our Raccoon assortment. Looking to our large wild fur offering in the March Sale, we will develop our selling policy based on market conditions at that time. This article is very attractively priced, which should make it very appealing to the Russian market given the current value of the ruble. However, the sale of this article will have to be properly managed, based on the purchasing patterns of the Russian and Chinese markets.

Looking ahead to our March Sale, other than articles impacted by lack of Russian support, we expect most wild fur articles will see satisfactory results. Trimming goods such as Coyote and Red Fox, and high fashion goods like Fisher and Sable, should be in good demand and sell well. Short haired articles should benefit from the increased price of Ranched Mink and improved demand from China.

We have just concluded our January Sale in which over 3 million ranched mink sold 100% at advancing prices for all colour phases and types. These mink were purchased predominantly by China, which shows the incredible buying power of the largest fur market in the world. With the development of China’s cold winter and outstanding retail in the past six weeks, it is expected that China will sell 80% of the garments that were available at the retail level; this compares to only 50% sold last year.

Given the current market conditions and the situation in Russia, our Wild Fur promotional department will concentrate on the articles that previously had sold into this market. As your auction company, we have been through and successfully navigated these difficult market conditions before. You can rest assured that we will do everything within our power to produce the most competitive prices possible for our shippers.