Co-product market report released
07 July 2022
The June Co-product market report was released on Monday 4 July 2022, highlighting the growing interest in this area due to its value-adding capacity for the red meat industry. With increases in inflation, the price of meat and key inputs such as fertiliser, more people are turning to products that may have been considered waste in the past, showing the full potential of second processing.
The latest report has showed a strengthening of tendon prices by 21.4% year-on-year. Tendons are used in many of Asia’s key dishes. Tendon prices dropped when China closed during their latest COVID-19 scare in March and have since rebounded to A$10.40.
Figure 1: Price of tendons since 2019.
This trend has also been observed in other regions overseas. Despite a slight softening in export volume, 2022 has seen a 6% annual increase in revenue from offal as prices rise. In 2022 so far, the average price of frozen beef offal has sat at A$6.27/kg, a 32% increase from 2021.
While traditional key markets such as Indonesia and Japan remain crucial destinations for exporters, Australian offal is also reaching new markets in considerable volumes. The fifth largest market this year has been the Philippines, while exports to South Africa have increased by 6% in volume terms, to become our ninth biggest offal market.
The prices for these frozen co-products are detailed in the Co-product market report and reflect the increase in quantity of chilled product coming from processors and a strengthening of demand by consumers.
The supply of sheep moving through processing facilities has been steady this year. The seasonal dip usually seen at this time of year during joining and lambing has not been as severe. This has resulted in an increase in supply of sheep co-products moving through the system.
The prices for bloodmeal have been increasing due to the rising prices of fertiliser. In this month’s report, it averaged $1,297/tonne, $228 stronger year-on-year and $17 higher month-on-month, as consumers turn to replacements for expensive inputs.
Figure 2: Bloodmeal prices since 2019.
Tallow prices have also been increasing along with the prices of biofuel. Tallow is a key component of biofuel and has strengthened 2.6% month-on-month and 55.1% year-on-year, to reach $2,450. Other high-end products, such as foetal blood, have been seeing an increase in demand.
Hides have eased since July 2021, when they reached a high of $48.50/kg in Victoria when the world re-opened after COVID-19. The recent easing in prices occurred due to increased supply from the herd rebuild and reduced demand from the fashion and automotive industries among others, which have been struggling.
Larger issues around processing capacity and labour shortages are hindering some processing facilities from being able to provide these products to meet demand. The increase in interest around co-products and their value-adding capacity for the red meat industry is a space to watch in the future.
Access the latest Co-product market report here.
