Tallow prices performing well

Tallow

The latest MLA Co-product report shows that in 2020 the tallow market has continued to perform strongly in an otherwise mixed year for Australian offal products.

All tallow prices firmed in July, with the price of 1% FFA tallow averaging $973/tonne, up $49/tonne from June and $131/tonne above year-ago levels. The price of 2% FFA tallow averaged $963/tonne, up $41/tonne compared to June and $118/tonne above year-ago levels.

Demand for biodiesel in Singapore has helped support these prices, as tallow is a raw material for biodiesel production. Maintenance at the Singapore biodiesel plant, the largest of its kind worldwide, is nearing completion, with this also underpinning a lift in prices.

The demand for biofuel is anticipated to increase in the coming years, in part due to high oil prices, albeit the recent oil price crash has held back the upside for tallow prices. A focus on reducing greenhouse gas emissions is also expected to increase demand. However, Australian tallow production is anticipated to decline in the short-term due to lower domestic turnoff

Hides

The hide market remains under extreme pressure. Despite being open, the markets in China and Italy remain subdued as they are reluctant to purchase until sales contracts for finished leather are confirmed. Demand is also extremely soft due to the impacts of COVID-19. Nearly all hides from cattle under 350kg carcase weight are making less than $1/hide, with many small or poor condition hides holding no market value.

Beef Offal

Beef offal prices have been mixed, as offshore demand for lower value red meat products remains strong. In July, prices for premium items such as thickskirt eased 15% month-on-month to average $9.05/kg. However, lower-cost products such as cheek meat and liver increased by 3.7% and 8.5% month-on-month to $7.26/kg and $1.28/kg, respectively.

Offal exports

Australian beef offal exports followed a similar trend to overall exports in July, declining 6% from June volumes to 13,120 tonnes shipped weight (swt). For the calendar year-to-July, beef offal exports are reported 4% below year-ago levels, at 94,275 tonnes swt, as lower cattle turnoff has impacted the availability of product for export.

Click here to view a statistical summary of Australian offal exports.

© Meat & Livestock Australia Limited, 2020