meal production was 616,600 metric tons, both 1.4 percent higher than 2012. Total protein meal production was 4.0 million metric tons in 2013 valued at around $2 billion. Demand The rendering industry produces products for the feed, pet food, energy, and oleochemical industries. In 2013, renderers saw prices back off a bit as global supplies of competing products like palm oil and soybeans were plentiful. According to Alltech’s 2014 Global Feed Survey, the United States produced 168.6 million metric tons of feed last year, the second largest feed producer behind China. This production is nearly flat from 2012. In addition to weaker growth in the domestic feed industry, lower corn prices, and increased biodiesel demand, rendered fat use in US feed, industrial, and food markets in 2013 was fairly flat over 2012. However, tallow consumption in these same markets increased by nearly four percent, to approximately 1.6 million metric tons. Domestically processed animal protein meal consumption last year was down slightly from 2012, to 2.9 million metric tons while domestic feather meal consumption was down over 15 percent to 438,000 metric tons. The biggest domestic growth market for rendered products in 2013 was, again, biodiesel. One industry analyst reported that biodiesel and China are the two big drivers for US agriculture and there is a lot of truth to that. Dictated by the Environmental Protection Agency’s (EPA’s) Renewable Fuel Standard (RFS), the inclusion level for biodiesel in domestic diesel was initially set at 800 million gallons in 2011. In 2012, the mandate was increased to one billion gallons and for last year, EPA set the obligation volume at 1.28 billion gallons. In 2013, consumption of all rendered fats in US biodiesel production grew slightly less than 20 percent from 2012 to just over one million metric tons. This accounts for 25 percent of total fat produced by the rendering industry, up from 21 percent in 2012 and 14 percent five years earlier. The use of animal fats in biodiesel production increased by just over six percent, to about 490,000 metric tons and within that category, tallow and white grease grew the most over 2012, increasing by 17 and 14 percent, respectively. Recycled cooking oils saw the biggest increase in biodiesel consumption in 2013 at over 33 percent, with yellow grease use growing by 45 percent to 443,000 metric tons of the 581,100 total metric tons in that category. With rendered fat use in the domestic feed, industrial, and food market being relatively flat, the supply for biodiesel came directly from the US export market. Exports of rendered fats continued to decline with the increase in domestic biodiesel demand. In fact, the growth in consumption by the biodiesel industry over the last five years has almost precisely mirrored the decline in US exports of around 500,000 metric tons over that period. Exports of rendered products in 2013 were approximately 1.5 million metric tons, down five percent from 2012. The US rendering industry exported approximately 18 percent of all production in 2013, down slightly from 19 percent in 2012. This decline in exports was mainly due to the major reduction in fat exports as mentioned previously. Rendered fat exports in 2013 totaled 773,000 metric tons, down approximately 20 percent from 2012 and 39 percent from 2011. This decline in exports follows the upward trend in the domestic use in biodiesel. However, 2013 and the latter part of 2012 also saw a glut of cheap palm oil on the global scene that further priced US tallow and greases out of the export market. Prices of animal fats and yellow grease were down across the board in 2013; choice white grease was down nine percent while tallow, yellow grease, and poultry fat were each down eight percent over 2012 prices. Edible fat prices declined the most, with lard dropping 15 percent over 2012 levels. Animal protein prices were also off slightly; ruminant meat and bone meal was down two percent over 2012 to an average of $421 per metric ton and porcine meat and bone meal dropped five percent to $478 per metric ton. Feed grade poultry meal was down two percent to $528 per metric ton and pet food grade poultry meal decreased 11 percent to $745 dollars per metric ton. Feather meal prices averaged $636 per metric ton in 2013, down two percent from the previous year. It must be noted that the softening of prices in the protein meal segment came after record high prices in 2012. Continued on page 13 Table 1. Average annual prices of select rendered products, 2008-2013 (per metric ton) % Change Product (Location) 2008 2009 2010 2011 2012 2013 12/13 Fats Beef tallow, packer (Chicago) $753 $553 $737 $1,095 $963 $887 -7.9 Choice white grease (Missouri River) $729 $511 $657 $1,020 $926 $846 -8.6 Edible tallow (Chicago) $840 $608 $775 $1,176 $1,068 $946 -11.4 Edible tallow (Gulf) $751 $606 $787 $1,180 $1,034 $966 -6.6 Lard (Chicago) $445 $631 $849 $1,093 $1,279 $1,081 -15.5 Poultry fat (Mid-south) $709 $510 $628 $992 $864 $793 -8.2 Yellow grease (Missouri River) $604 $448 $577 $932 $788 $727 -7.7 Protein meals Blood meal, ruminant (Missouri River) $815 $752 $742 $861 $1,018 $1,118 9.8 Blood meal, porcine (Midwest) $985 $884 $850 $950 $1,101 $1,187 7.8 Feather meal (Mid-south) $483 $539 $490 $513 $649 $636 -2.0 Meat and bone meal, ruminant (Missouri River) $361 $368 $330 $375 $429 $421 -1.9 Meat and bone meal, porcine (Missouri River) $385 $400 $351 $419 $501 $478 -4.6 Poultry by-product meal (57% protein) $486 $460 $406 $475 $539 $528 -2.0 Poultry by-product meal (67% protein) (Mid-south) $678 $690 $673 $721 $834 $745 -10.7 Source: The Jacobsen. www.rendermagazine.com Render April 2014 11
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