The rising value of beef byproducts is one bright spot in an otherwise lackluster beef market, as prices have improved significantly this summer. Beef byproduct prices depend on a variety of domestic and international demand trends. Export demand is critical for organ meats such as beef hearts and livers, as they hold little value domestically. Tallow prices are linked to trends in the oil and feed markets, and hide values depend largely upon global demand for luxury items such as leather car seats.
The Livestock Marketing Information Center notes that high oil and feedstuff prices helped support byproduct values at record highs last summer, but when the economy crumbled last fall so did the prices for these non-meat items. As reported by USDA-AMS, last year, the steer byproduct value soared to record highs, nearly topping out at $12 per cwt. on a live steer basis in July 2008. But by December 2008, the monthly byproduct value tumbled to about $6 per hundredweight, and it stayed below $7 through the first seven months of 2009. However, in June and July the byproduct value surpassed $7.00 per hundredweight each week and by late July was over $8. During the second week of August, the steer byproduct value averaged over $9 per hundredweight, the highest since early last November, although still well below values near $12 one year ago.
Among the many non-meat items that comprise the byproduct value, all items on average through July were still below year ago, according to LMIC. However, many items have improved since June, in particular the hide. In the month of May, baseline hide values surpassed the $30 per hide level, by mid-July prices climbed above $45. By early August, hide values were about $55 per hide, the highest since last fall.