Tallow and Greases

Tallow and grease are derived from processing (rendering) the fat of cattle. Tallow is used to produce both edible and inedible products. Edible tallow products include margarine, cooking oil, and baking products. Inedible tallow products include soap, candles, and lubricants. Production of tallow and greases is directly related to the number of cattle produced. Those countries that are the leading cattle producers are also the largest producers of tallow. The American Fats and Oils Association provides specifications for a variety of different types of tallow and grease, including edible tallow, lard (edible), top white tallow, all beef packer tallow, extra fancy tallow, fancy tallow, bleachable fancy tallow, prime tallow, choice white grease, and yellow grease. The specifications include such characteristics as the melting point, color, density, moisture content, insoluble impurities, and others.

Prices – The monthly average price of tallow (inedible, No. 1 Packers-Prime, delivered Chicago) in 2006 fell –3.3% yr/yr to 16.89 cents per pound. That was further below the record high of 21.60 cents posted in 1979. The wholesale price of edible tallow in 2006 fell –1.9% yr/yr to 18.63 cents per pound from 18.99 cents in 2005, and remained well below the record high of 30.25 cents per pound posted in 1981.

Supply - World production of tallow and greases (edible and inedible) in 2005, the latest available reporting year, fell by –0.6% yr/yr to 8.200 million metric tons, down from the record high of 8.251 million metric tons posted in 2004. The world’s largest producer of tallow and greases by far is the US with 44% of world production, followed by Brazil with 7%, Australia with 6%, and Canada with 4%.

U.S. production of edible tallow in 2005 fell –4.2% yr/yr to 1.741 billion pounds, down from the 2002 record high of 1.974. US production of inedible tallow and greases in 2006 rose by +4.1% yr/yr to 6.460 billion pounds, which was well below the record high of 7.156 billion pounds posted in 2002.

Demand – US consumption of inedible tallow and greases in 2006 rose +5.4% yr/yr to 2.589 billion pounds, of which virtually all went to animal feed. US consumption of edible tallow in 2005 fell –12.5% yr/yr to 1.449 billion pounds, down from the 2004 record high of 1.656. US per capita consumption of edible tallow fell –15.0% to 3.4 pounds per person per year, down from the 2000 and 2004 record high of 4.0.

Trade - US exports of inedible tallow and grease in 2006 rose 25.2% yr/yr to 346.0 million pounds, and accounted for 4.7% of total US supply. US exports of edible tallow in 2004 rose +13.7% yr/yr to 290 million pounds, and accounted for 16.4% of US supply.