The beef industry produces an enormous set of products. Among the thousands of different products are a wide range of edible and inedible byproducts. USDA reports byproduct values in several daily and weekly reports for steers, cattle and cows. There are additional reports for detailed variety meat, hide and tallow values.
Over the last fifteen years, steer byproduct values have averaged $11.77/cwt on a liveweight basis. That is roughly $165/head, or about 9.5% of the total value of a fed steer. In the 2009-23 period, steer byproduct values have varied from a monthly low of $5.90/cwt to a high of $16.59/cwt (Figure 1). As a percent of total fed steer value, the byproduct value has varied from a low of 6.2% to a high of 13.1%.
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The set of products included in total byproduct values is quite varied and includes edible offals, inedible offals, meat. bone and blood meal, edible and inedible tallow, hides and pharmaceutical products. Edible beef byproducts include a variety of muscle and organ meats (e.g. liver, tongue, tripe, tripas, heart, oxtail, sweetbreads, edible tallow, and cheek and head meat, much of which is exported or used in processed products.
Edible tallow is used for cooking and processed foods and bones are the source of gelatin used in many products (think gummy bears). Some tallow that is equivalent to edible grade is also used for cosmetics and soaps.
Organs that are inedible are used primarily for pet food, including lungs, trachea, inedible livers and melts (spleen). Inedible tallow is used for industrial use and, more recently, for biodiesel production. Hides are a significant part of the total byproduct value of cattle. Most hides are exported. Some products, such as gallstones and fetal blood serum, are harvested infrequently but have very high values.
Each of the many byproduct items operates in a separate market with variable values and market conditions. These impact the total byproduct value over time. For example, the high byproduct values in 2014-15 (Figure 1) were largely driven by very strong hide values. The more recent high prices in 2021-22 were the result of very strong demand for tallow used for biodiesel production.
The steer byproduct value for March 1 was $11.64/cwt and shows that tallow is the largest contributor to byproduct value at 20.3% of the total, hides were second at 18.4%, tongues at 15.2% and tripe at 11.9% of the total byproduct value. These total to roughly two-thirds of the total byproduct value.
Current byproduct values represent about $165/head of total fed cattle value. With tight supplies driving beef and cattle prices higher, byproducts currently represent a smaller percentage of total cattle value (6.4%) than the long-term average (9.5%).
Byproducts are a significant value component for the cattle and beef industry. Byproduct markets are varied and complicated and typically require significant volume. Capturing the value of byproducts is challenging, especially for small packers. When byproducts cannot be captured for value, they typically represent an additional cost for disposal. — Derrell S. Peel, Oklahoma State University Extension livestock marketing specialist
