Animal and Marine Fats and Oils

SIC 2077

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing animal oils (including fish oil and other marine animal oils) and fish and animal meal, together with those rendering inedible stearin, grease, and tallow from animal fat, bones, and meat scraps. Establishments primarily engaged in manufacturing lard and edible tallow and stearin are classified in meat-producing industries; those that refine marine animal oils for medicinal purposes are classified in SIC 2833: Medicinal Chemicals and Botanical Products; and those manufacturing fatty acids are classified in SIC 2899: Chemicals and Chemical Preparations, Not Elsewhere Classified.

By the late 2000s, the majority of this industry was engaged in the manufacture of feed and fertilizer by-products. Domestic rendered production and exports were down in the middle of the decade due to decreased production in the U.S. livestock industry as well as concern over avian influenza, which influenced a decrease in poultry consumption and the culling of flocks in some countries. However, by 2009 the rendering industry was showing small increases in production, partly due to the increased use of animal fats and greases in the production of biodiesel fuels.

According to the U.S. Department of Agriculture (USDA), 34.3 million head of cattle were slaughtered in 2008, down from 32.4 million in 2005; commercial hog slaughter totaled 116.4 million head, an increase from 103.6 million in 2005; and commercial poultry slaughter consisted of approximately 9.0 billion chickens and 271.2 million turkeys, with chickens comparable to 2005 at 8.9 billion and turkeys up significantly from 2005 figures of 246 million. Rendered product from this meat production totaled 8.5 million metric tons (MMT) in 2008, as compared to 8.1 MMT in 2005. Domestic consumption also rose slightly, from 5.5 MMT in 2005 to 5.8 MMT in 2007. USDA figures showed that U.S. consumption of rendered products increased almost 4 percent between 2002 and 2007. Meanwhile, U.S. exports of rendered products increased 17 percent during the same period, reaching 1.7 MMT in 2007. Furthermore, production of animal fats and greases, as reported by the U.S. Census Bureau, increased slightly during the twenty-first century's first decade, reaching almost 4.5 MMT in 2008. Poultry fat and grease comprised a majority of the total.

According to the USDA, 1.6 MMT of the 6.5 MMT of inedible tallow and grease produced in the late 2000s was exported. Mexico continued to be the leading market for U.S. exports in this industry. Turkey was the second largest market for inedible tallow, and Venezuela was second largest for grease.

The output quantities for meat meal and tankage were much larger than those for fish meal and oil in this industry in the 2000s. However, the growing aquaculture industry consumed 70 percent of the global production of fish oil and 34 percent of total fish meal in 2003. These products provide food sources for farmed salmon and trout. An estimated 80 million metric tons of wild ocean fish are caught annually, and more than one-third of this total is used to make fish meal and fish oil.

There were several companies of significant size engaged in this industry in the late 2000s. Darling International Inc., based in Irving, Texas, was the largest independent rendering operation in the United States. The publicly traded company had 2008 revenues of $807.5 million. Darling acquired a major competitor, National By-Products Inc., based in Des Moines, Iowa, for $141 million in 2005. American Proteins Inc., based in Roswell, Georgia, processed poultry by-products in the world's largest poultry protein and lipids conversion operation, annually producing more than 750,000 tons of pet food and feed grade poultry protein meal and poultry fat, as well as feather meal. Other industry leaders included Griffin Industries of Cold Spring, Kentucky, which posted $103.6 million in 2008 sales; SANIMAX of Green Bay, Wisconsin, with $250 million in sales; and Valley Proteins of Winchester, Virginia, with $300 million in sales.

While trade in animal fats and oils was flat, rendered product output was projected to remain steady in the near term and rise to more than 8.3 million metric tons by 2013. Additionally, tallow, lard, and chicken fat have fatty acid compositions similar to palm oil, the largest single source of fatty acid methylesters (FAME) in the world. Palm-based FAME is used to make biodiesel fuel in several countries.

Biodiesel is produced from vegetable oils and animal fats through a refinery process whereby alcohol is used to remove glycerin, a by-product of biodiesel production. To ensure performance, fuel-grade biodiesel is produced to strict industry specifications. The National Biodiesel Board estimated that 75 million gallons of biodiesel fuel was sold in 2005; by 2008, an estimated 700 million gallons of biodiesel was being produced in the United States, making it the second largest producer of biodiesel in the world, after the European Union. Animal fats and greases constituted about 32 percent of the raw materials used to make biodiesel in the United States in 2008, according to the National Renderers Association.

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