Umm…well. Maybe. Maybe. I’m not so sure, though.
First, the price of the hide is a truly miniscule portion of the price of the animal. Beef price fluctuations from day to day are vastly greater than the value of the hide. So any effect is going to be extremely minimal to begin with.
Second, farmers can’t “raise the price of meat”, unless we’re in some fantasy world, or you’re talking about extremely low volume farmgate sales. Nearly all beef is sold at auction to packing plants. Farmers take what they get. The only time they set the price is if they have a couple animals custom slaughtered and sell the meat to acquaintances, but this is (1) necessarily low volume, and (2) irrelevant to the price of meat generally, because by cutting out distributors and retailers, the farmer gets a much higher price and the consumer gets a much lower price than the going rates.
In the real world, at auction, the price is dictated largely by the volume of cattle available as compared to the slaughter capacity of packing plants. Eventual retail price of beef is almost completely unrelated to the live price. For example, because of the American import ban on Canadian beef due to the BSE scare, the price of beef on the hoof has fallen dramatically, from 20-30% in the case of prime finished steers to 50-90% in the case of cows (i.e., culled milkers and beef breeders). According to conventional economic theory, this should have resulted in a lower retail price and greater demand, but that hasn’t happened. The retail price of beef hasn’t budged. The slaughterhouses, obviously, have been making out extremely well in Canada recently. Because there is relatively little competition between packers, they have the ability to set prices that have no particular relation to their inputs. Farmers, on the other hand, take whatever price they’re given, until the margin becomes simply too thin to stay in business, and they go under. In real life, most farmers stay in business even after the margin is too thin, and get by with off-farm income.
So what happens if the packing plants can’t sell as many hides to tanners as they used to? Not much. Their margins get a bit thinner. The retail price won’t change, because the packers don’t want to impact their volume. If corporate profitability demands it, they’ll bid lower at auction, and the farmer’s margins will take a tiny little hit (say, $2/head - last price I heard for a hide was $8), and life will go on completely unchanged. $2/head is nothing. Less than nothing.
So, I stand by my assertion that Mercedes buying less or no leather will not save the life of a single cow.