Mixed month for Australian co-products
21 January 2021
- Beef offal prices firmed across several categories this month
- The hides market is showing signs of recovery, with prices elevated across the eastern states
- Sheep offal prices remain steady on last month but have pushed higher than year-ago levels.
The latest MLA Co-product report shows a mixed month for Australian offal prices in January, following on from the unprecedented year that was 2020.
Offshore demand for lower value red meat products held strong in the second half of 2020, and has continued into 2021. In combination with a tighter supply of slaughter ready cattle, offal prices across several categories rallied this month. Halal kidneys saw the strongest growth, tracking up 93% on the opening month last year, while lungs and hearts lifted 45% and 28%, respectively.
Inversely, premium products such as tongue, thickskirt and rumen pillars failed to find support, easing 20–40% across all categories. With most of Australia’s offal products being exported, prices could continue to fluctuate as end markets move through different stages of their COVID-19 recoveries.
Hides have also seen remarkable growth in January, with Victorian hide prices surging up to 133% on last month. NSW saw the largest year-on-year growth, at 325%, albeit up 21% on last month, while the Queensland hides market lifted 71% on year-ago levels. Current prices reflect the ongoing recovery in the cattle hides market, finding support in the return of upholstery and automotive industries in China and Italy. Hide prices were under extreme pressure last year, falling to $1/hide, as excess inventory and tannery closures drove subdued buying activity.
Most sheep offal prices remained steady on last month, however, elevated on year-ago levels. Sheep runners saw the largest movement, tracking up 104% on the same month last year, with lab runners following similar trends, lifting 45%. Tight supplies have largely driven these price movements, with the national sheep flock shifting towards a rebuild phase in 2020 following excessive turnoff in 2019.
© Meat & Livestock Australia Limited, 2021