Where it comes from
Nearly every land animal above ground leaves leather, small ones included, and so do the cave hunters: cave pouncers, Pitcoils, Riftstalkers, Vaultmaws and Earwights. The bats leave a scrap of wing, from Mossflits and Cinderfangs and Dripwings. Frontier raiders always drop it. See Wildlife.
Flame destroys hide, so a creature that dies burning leaves none.
What it is for
Leather goes into the Bedroll and sleeping at the Pack tray, the leather vest at the Sword bench, and the iron axe, iron sword, bellows, honing post and other iron-age gear. See Forge.