April 2001

Glancing Back: Production Doubled From 30 Years Ago…But Not Prices

By Tina Caparella

Thirty years ago, the rendering industry was virtually invisible. Today, stories about the rendering industry grace the pages of The Wall Street Journal, Time, and other major publications and are being reported on the major network’s evening news, thrusting the invaluable service renderers provide into the limelight. Locally, cities are outgrowing their boundaries and forging into the rural landscape where renderers once quietly existed, causing conflicts with processing plants that have been in existence sometimes for nearly a century.

But how did the industry get to where it is today? How has the use of rendered products and the supplies of raw material changed over the past 30 years? And how have the rendering companies themselves transformed over that same time?

Production
In the early 1970s, 30 billion pounds of animal by-products were processed each year in the United States into nearly 9.5 billion pounds of rendered products, primarily tallow and grease for soap and high protein meat and bone meal for animal feeds. In fact, 603 million pounds of tallow was used in soap production, although a drop from the 1.1 billion pounds used 20 years earlier. Other end-use products included fatty acids used in the chemical and plastics industries and special lubricants and oils employed in a wide variety of ways. Of that total production 30 years ago, 3.5 billion pounds represented meat and bone meal while some six billion pounds represented the yield in tallow and grease. About 2.5 billion pounds of tallow was used domestically; the rest was exported.

Today, those numbers are impressive. In 2000, it is estimated that 52 billion pounds of animal by-products were recycled into 18 billion pounds of rendered products, now primarily used in animal feed and greases. Only 145 million pounds of tallow was used in the United States for soap production, obviously a declining market. Of the more than 18 billion pounds of rendered products, just over half, or 9.2 billion pounds, was tallow, a drop from 30 years ago when tallow accounted for 67 percent of rendered products. What has increased though is meat and bone meal production, with 8.8 billion pounds being produced last year, of which the majority was consumed domestically. Approximately 4.4 billion pounds of tallow was used in the United States with the balance being exported.

Prices
Renderers have seen prices for their products over the past 30 years act like a roller coaster ride – up and down as markets and conditions fluctuated. While researching the prices rendered products were fetching in 1971, the closest time period found was for 1973.

Tallow prices reported for the first nine months in 1973, which only included bleachable fancy at Chicago, ranged from a low of 7.7 cents a pound to a high of 25.1 cents, averaging 16.6 cents in October 1973. Compare that to last year’s average for renderer bleachable tallow at Chicago of 10.5 cents.

During the same time period in 1973, meat and bone meal averaged $182.50 per ton, although prices had dipped as low as $115 per ton in January 1974. Not much different than last year’s average of $174 per ton.

Company Transformation
Rendering companies have also seen their share of change over the past 30 years. There’s no argument that rendering companies today range from very small (one plant) to very large, as they did three decades ago. But many companies no longer exist, being acquired by larger independent renderers, or simply going out of business.

Thirty years ago, Render reported that the largest independent renderer was Darling & Company of Chicago, IL, who had facilities scattered throughout the United States and Canada. National By-Products of Des Monies, IA, ranked second followed by Corenco of Boston in third place. Both Darling and National By-Products still exist today while Corenco was purchased by Baker Commodities in 1979. Other highly ranked independent renderers in the early 1970s included Los Angeles-based Peterson Manufacturing Co., fourth, and Carolina By-Products, fifth. Both renderers at the time were subsidiaries of Kane-Miller of New York, NY.

What criteria was used back then to determine ranking of independent renderers is unknown, but if we went by number of U.S. plants, today’s list wouldn’t be much different. Darling International holds the number one position with over 25 plants in the United States. For second place, it’s a toss-up between Griffin Industries, Inc. and Valley Proteins, Inc., which now owns Carolina By-Products. Both companies list 15 plants. The third position goes to National By-Products with 12 plants, followed by Pascal Enterprises, which owns nine independent rendering facilities. The fifth spot is held by Baker Commodities with eight processing plants.

Some things, though, remain the same. Renderers in the early 1970s struggled to ensure they were good neighbors, spending hundreds of thousands of dollars on odor control systems. Over a 10 year period, Peterson Manufacturing spent more than three quarters of a million dollars in modifying its Los Angeles plant to make it a good neighbor and allocated $75,000 a year to eliminate any sources of pollution from the same facility.

It’s apparent that the next 30 years will continue to hold challenges for renderers.