Co-product prices skyrocket in 2021

Reduced cattle slaughter has pushed the price of beef co-product up substantially this year. Similarly, the prices of sheep hearts and runners have also risen substantially for the past 12 months to June. In contrast, tripe prices for both sheep and beef have slightly declined on year-ago-levels. 

The key driver of high beef offal prices is reduced slaughter throughput in key producing countries such as Australia, Brazil and Argentina. 

For beef, the highlight performers have been hides. Tallow and foetal calf blood prices have both performed solidly on the back of reduced slaughter. Foetal calf blood, a pharmaceutical product, has risen $45/litre year-on-year to average $460/litre. 

The price for some hides has increased over 8,100% in the past twelve months, going from 25¢ each to $20.50 each. In 2020, many hides were of low or no commercial value due to COVID-19 and its impact on retail leather demand.  

Fast forward to 2021 as global discretionary spending is picking up, and strong demand from the upholstery and automotive sectors has pushed the price for hides to these levels. Some from Victoria are now commanding $49 each. These high hide prices have received some degree of resistance from buyers. 

From a sheep perspective, the increase in offal prices is occurring in runners and hearts. Runners are used for sausage casings. Interestingly, domestic consumption of sausages has not increased since the start of COVID-19.

For more information, read MLA’s co-product report. 

© Meat & Livestock Australia Limited, 2021