Global AgriTrends

06.26.25

By-Product Values Weaken

Rendering is the process of converting animal by-products (bones, fat, offal, blood) into usable materials like tallow and protein feed meals. The process typically includes heating to separate compounds followed by drying and refining into finished products. Rendered products include a host of new marketable products including tallow, fats, protein feed additives, energy products, pet food, soap, lubricants, pharmaceuticals, fertilizers, and hundreds of other products.

While some consider it the “less sexy” side of the meat and livestock industry, rendering is actually the recycling sector for items that would end up as waste. And it creates considerable value, driving packer / processor margins and ultimately adding value to the livestock and poultry sectors. Global rendering value is estimated to be around US$23 BILLION annually.

An approximate average by-product return per large fed steer for by-products is about 15% of the animal value (or around US$535/head today). Chilled/frozen offal accounts for less than half of the value, with tallow at 38%, meat and bone meal at 9%, and hides at a meager 4% of the total byproduct value.

Steer hides have fallen to record lows recently due to a fall in the international value of leather. Hides, which were once a significant driver of by-product values, are now one of the smallest contributors to livestock drop values. China is the primary global buyer of hides, and demand there is being hampered by tariffs (on hides to China and leather from China), trade disruptions, and stronger environmental regulations that are affecting small tanneries.

Brett Stuart