Beef, Pork Byproduct Values Up

The value of the often overlooked byproducts of beef and pork slaughter is rising seasonally, but this return on investment to beef packers is about to reach a seasonal leveling point.

“Byproduct,” “drop value,” “drop credit” and “offal” all refer to the same products and represent an important revenue source for packers.  Aggregate values for all of these products thus far in the year are moving higher

Beef byproducts consist of cheek meat, hearts, livers, tripe, tongues, bone meal, tallow, hides and several other products.

Pork byproducts have a similar list with the addition of white grease and blood meal.

Byproduct values are driven by international markets, since domestic use is relatively low.  US consumers shy away from eating tongues and hearts, and few relish a plate of liver, even if it’s drowning in onions.

US 2016 byproduct export volumes are expected to improve from 2015’s depressed levels, and annual prices are expected to rise as well.




The most current beef byproduct values available were at $11.49 per cwt the week of April 22.  This was $2.31, or 16.7%, below year ago and $2.19, or 16.0%, below the previous five-year average of $13.68.

Historically, the beef byproduct value ranges between $13 and $14 per cwt as seen in this Livestock Marketing Information Center graph of USDA Agricultural Marketing Service data.


Although byproduct values still are tracking below average, prices have risen $0.84 since the first of the year.

The main contributor to the beef byproduct value is the hide.  Currently, a Butt Branded steer hide is worth about $72.00.  A year ago, it was $95.00, and the previous five-year average was about $90.00.  Economic slowdown in China, along with the increased value of the US dollar hurt hide buying from those markets.

Byproduct values increased dramatically in the second half of 2014 and the first half of 2015 because of a shortage in supply.  Mid-June was when significant declines began.

If international demand improves even marginally this year, beef byproduct values could post year-over-year increases during the second half of 2016.




Pork byproducts have also been hurt by slower world economies and a rise in the value of the greenback.

Recently, though, prices have shown strength.  As of April 22, pork byproduct values were $3.61 per cwt, $0.07, or 1.98%, above a year ago but still $1.63, or 31.1%, below the previous five-year average of $5.24.

Historically, pork byproduct values range from $5.00 to $6.00 per cwt.




Cash cattle markets Tuesday remained quiet with bids of $192.00 per cwt on a dressed basis turned away by sellers.  Other sellers were asking $130 on a live basis with no bids reported

Cash markets last week traded at $127 per cwt on a live basis, down $7 to $8.  In dressed markets cattle traded at $200 to $201.50, down $14 to $15.

The USDA’s choice cutout price Wednesday was down $3.76 per cwt at $214.81, while select was off $4.79 at $205.59.  The choice/select spread was $9.22 with 144 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Tuesday was $146.62 per cwt, up $0.04.  This compares with the Apr CME settlement Wednesday of $146.30, down $0.27.