Rendering is an integral part of global meat and livestock values and mar
gins.
Global meat and poultry processor margins often rise and fall based on prices of the “drop” (U.S.), the “fifth quarter” (South Africa), or the offal and blood/feather/bone meal values (universal). This category is often referred as “by-products” including bones, fat, and the unmentionable pieces and parts not marketed as edible meat cuts or primals. Rendering is the process of converting animal by products (bones, fat, offal, feathers) into useable 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 are 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 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. The general rule is that the lighter the animal, the less the return on offal items. The U.S. rendering industry processes ~56 billion pounds of raw materials annually, producing ~22 billion pounds of fats and proteins, contributing $10 billion to the U.S. economy.
These tallow policies are under review with the U.S. EPA, which is currently preparing new blending mandates under the RFS (Renewable Fuel Standard) that will govern volumes for the next two to three years, along with the program’s multibillion-dollar compliance credit market. The net effect is that any changes to tax credits, tariffs, and regulations could impact the competitiveness of imported feedstocks, such as those from Australia, New Zealand, or South America, including tallow.
Rendering provides a backstop value for products not marketable elsewhere. Trade disruptions can lead to increased rendering. For example, China’s ban on U.S. beef and tariff disruptions of U.S. pork saw many of these previously exported items destined for rending. While offal exports to China are typically around US$1.00/lb, the sale of these items for rendering is closer to US$0.15/lb a sizable devaluation to processor margins. But when exports fail, rendering provides the next option.
Export markets and rendering compete for offal.
“Offal” is the term used to describe livestock and products that are not part of a carcass prior to fabrication. It includes the “drop” (organs), head, feet, and tails. Some of those items are typically deemed inedible such as lungs. But many derive high values in overseas markets, typically China. Cattle and hog items like stomach, intestines, tails, ears, and feet can all be exported at prices well above domestic rendering bids. But trade disruptions can send them to rendering.
The combined total beef and pork offal exports were US$7.6 billion last year. Global beef offal exports totaled US$3.8 billion last year, led by the U.S. ($909 million), Australia (US$703 million) and Brazil (US$385 million). Global pork offal exports topped US$3.7 billion last year lead by the EU (US$2.2 billion, the U.S. (US$943 million, Canada (US$292 million) and Brazil (US$133 million).
This chart at the right shows the global trade matrix of beef and pork offal. China is the largest market by a wide margin followed by Japan, Vietnam, and Mexico. The exporter market shares for each supplier are shown.
This next table shows the average export price of offal from each key exporter to each key destinations. The Weighted Average line at the bottom shows that there is wide disparity in offal trade. China buys the cheapest offal at an average US$0.89/lb, while Japan buys the highest at US$3.80/lb. China is buying mainly hog feet, intestines, ears, tails, and beef omasum (stomach), while Japan is buying mainly beef tongues at much higher values.
In summary:
Offal exports comprise 7% of global meat and poultry export value and 30% of export tonnage. The opportunity for processors to fetch these higher overseas prices versus rending values that can sit as low as US$0.15/lb provides much more profitability.
China’s recent tariff spat with the U.S. saw a halt on pork offal to China for 6 weeks in April/May of 2025 as tariffs surged above 160%. With tariff reductions (now 57%) that trade has resumed and hog margins have improved.
Pork offal exports are estimated to derive around US$9/head in the U.S. while beef offal exports derive around US$45/head according to the U.S. Meat Export Federation.
In Summ