VALUE OF ANLMAL BY-PRODUCTS*
. .
D B FZRGUSON
S w i f t & Company
Chicago, I l l i n o i s
The t o p i c assigned t o me w a s simply "Value of Animal By-Products.''
Like many other English words, t h e word value can have s e v e r a l
meanings. However, based on t h e p o s i t i o n of t h i s paper i n t h i s morning's
session, I came t o t h e conclusion the program committee wanted someone
t o b r i n g i n t o perspective t h e magnitude of t h e animal by-product business,
and not n e c e s s a r i l y j u s t i n d o l l a r terms. After a l l , how long i s a
dollar a dollar?
By-products a r e an important p a r t of t h e packing house business.
After a l l , every head of c a t t l e t h e industry k i l l s has a hide. The
c a t t l e and c a l f k i l l last year w a s 46.1 million head. Sheep and lambs
a l l produce wool or s h e a r l i n g p e l t s . Hogs produce l a r d and a l l t h e
species that we c a l l v a r i e t y meats--hearts, l i v e r s , e t c
And then, of
course, t h e r e a r e the raw materials f o r pharmaceuticals.
.
The d o l l a r value of anirnal by-products i n t h e l a s t few years has
been highly dependent upon w h a t day you a r e t a l k i n g about. L e t me give
you a few examples of w h a t I mean. About a year ago when t h e cow
slaughter was increasing and boneless cow meat was a t r e l a t i v e l y low
p r i c e l e v e l s , t h e r e was a premium f o r pork f a t t h a t had a l i t t l e lean
attached t o mix with t h e lean beef f o r processed meats. This shortened
t h e l a r d supply and t h e p r i c e of prime steam l a r d went as high a s 38-39
c e n t s . Recently it has been priced under 16 cents a pound. There a r e
a number of i n t e r r e l a t e d reasons f o r t h e p r i c e changes such as t h e
supply and p r i c e of competing vegetable o i l s that I won't go i n t o , but
t h e value of l a r d per head of hogs has changed v i o l e n t l y i n t h e last
year or two.
Another example--beef h e a r t s normally s e l l a t a premium t o pork
h e a r t s . They a r e a lean meat item high i n p r o t e i n . Last year, i n a
world s a i d t o be r e l a t i v e l y s h o r t of p r o t e i n , beef h e a r t s could hardly
be s o l d . T r u e , t h e supply w a s up with t h e record c a t t l e k i l l , but when
pork h e a r t s were s e l l i n g f o r 23 cents a pound, beef h e a r t s were quoted
a t 12 c e n t s . Millions of pounds sold a t t h i s p r i c e before foreign and
domestic demand picked up. Recently they have been quoted up t o 42
cents a pound. These a r e simply examples of t h e v o l a t i l i t y of today's
markets and, t h e r e f o r e , of by-product d o l l a r values.
*
Presented a t t h e 29th Annual Reciprocal Meat Conference of t h e American
Meat Science Association, 1976.
L e t me t r y t o put t h e importance of by-products i n t o perspective
f o r you i n t h i s way. For c a t t l e , i f we s t a r t with a 1000 pound animal
we g e t about a 600 pound carcass hanging i n t h e cooler. So t h e r e a r e
400 pounds t o account f o r i n some way. About 70 pounds of t h i s is
represented by t h e hide and about 55 pounds p o t e n t i a l l y a r e v a r i e t y
meats. The balance of 275 pounds i s r a w m t e r i a l f o r rendering. This
r a w m a t e r i a l produces about 50 pounds of inedible tallow, about 1 5
pounds of edible tallow, about 35 pounds of dry rendered tankage and
10 pounds of d r i e d blood.
The above rendered m a t e r i a l i s from t h e k i l l i n g operation alone.
The breaking and c u t t i n g operations, although not always done a t t h e
same location as t h e k i l l , may produce another 12 pounds of t a l l o w and
8 pounds of meat and bone meal.
The industry i n t o t a l produced about 5.2 b i l l i o n pounds of inedible
tallow and grease i n 1975. Roughly 40 percent of t h i s went i n t o t h e
export market. This, of course, helped with our balance of t r a d e - o f f s e t t i n g some of the petroleum purchases.
Domestically t h e r e a r e many uses f o r t h e inedible tallow and
grease. Last year about 37 percent went i n t o animal and p e t foods.
A t current p r i c e r e l a t i o n s h i p s , inedible t a l l o w i s an economical energy
source i n c a t t l e f e e d l o t r a t i o n s . It i s used extensively i n p e t foods.
About 30 percent vas used i n t h e production of f a t t y chemicals. Anothe
2 1 percent was used i n t h e production of soaps and 4 percent went i n t o
l u b r i c a n t s . Probably t h e j e t plane you rode on t o t h i s conference w a s
l u b r i c a t e d i n p a r t with a tallow based l u b r i c a n t . They have a s p e c i a l
property needed by t h e j e t s . The balance o r 8 percent went i n t o other
uses.
The rendering process a l s o t u r n s out around 3 b i l l i o n pounds of
meat and bone meal a year. This, of course, is t h e by-product from
a l l s p e c i e s - - c a t t l e , hogs, sheep and lambs. This product l a r g e l y i s
used domestically. Broiler and turkey feeds take t h e b i g p a r t of t h e
production these years. But p e t foods in t h e l a s t year or two have
been growing r a p i d l y i n t o a major part of t h e market. You may have
noticed how t h e dry p e t foods have been t a k i n g over more of t h e shelf
space from t h e canned pet foods i n t h e s t o r e s . Some of t h e s e a r e as
high as 80 percent meat and bone meal.
Everyone; of course, i s aware that c a t t l e and c a l f hides a r e a
major by-product of t h e beef industry. Their green weight last year
a l s o approached t h e 3 b i l l i o n pound l e v e l . Like many of t h e other
by-products of t h e animal industry, they vary considerably in p r i c e
from year t o year. You a r e a l l familiar with t h e government's series
on leading economic i n d i c a t o r s . Those measures of t h e economy that
together a r e supposed t o s i g n a l t h e d i r e c t i o n and t u r n s of t h e h e a l t h
of our economy. When t h e s u b j e c t of hides comes up, I a m always
reminded of a statement a professor of a course on p r i c e s made years ago.
H i s statement was t h a t t h e p r i c e of hides and t h e p r i c e of black pepper
were two of t h e b e s t leading indicators of t h e d i r e c t i o n of wholesale
p r i c e s he knew o f . They were both world traded commodittes and as such
perhaps r e f l e c t e d changes in wor Id economic conditions quicker than
predaninantly domestically traded commodities.
Hog and p i g skins perhaps a r e l e s s w e l l i d e n t i f i e d with everyday
products t o t h e average consumer. However, they have a wide range of
uses. Over t h e years t h e pork skin has been l e f t on t h e carcass through
t h e c u t t i n g operation. This meant t h e skin, i f saved, w a s i n pieces
and parts of t h e s k i n u s u a l l y moved t o t h e rendering tank. More r e c e n t l y
t h e r e has been some whole hog skinning. This produces skins which when
cured and tanned make up i n t o f i n e jackets, e t c . I ’ m sure you a r e
familiar with t h e shoes made from pig s k i n and we have had p i g s k i n
gloves f o r y e a r s .
Pork skins are a major source of g e l a t i n production which is used
in many foods including i c e cream, canned meats, marshmallows and
g e l a t i n d e s s e r t s . Som of t h e skins a r e used by t h e “poppers11i n
making those t a s t y snacks sold i n cellQphane packages.
Lard production which i s one of t h e major by-products of hog
slaughtering has declined i n r e l a t i v e W r t a n c e Over t h e years.
Twenty years ago t h e industry produced about 33 pounds of l a r d per head
slaughtered. I n 1975, t h e average was about 14.5 pounds per head.
Hogs have been bred t o produce l a r g e r hams and l o i n s and l e s s back f a t .
They a r e leaner hogs. Whereas l a r d production i n 1952 amounted t o 2.9
b i l l i o n pounds it had dropped t o about 1.2 b i l l i o n pounds i n 1975.
P a r t of t h i s was due t o t h e reduction i n nunibem slaughtered, b u t t h e
b i g d i f f e r e n c e was i n t h e type of hog.
E a r l i e r I s a i d t h e r e was a p o t e n t i a l of about 55 pounds of v a r i e t y
meats per 1000 pound c a t t l e . The industry probably f a l l s s h o r t of
achieving t h i s y i e l d . P a r t of those 55 pounds find t h e i r way t o t h e
rendering tank because a t times t h e expense of saving t h e v a r i e t y meat
item m y be g r e a t e r than t h e market value f o r it.
We f i n d v a r i e t y meat products saved per head v a r i e s considerably
between our p l a n t s . There appear t o be a number of reasons f o r t h i s
variance. The q u a l i t y of t h e aninvzls and of t h e v a r i e t y meats from t h e
a n h l s v a r i e s by s e c t i o n s of t h e country. The productiveness of t h e
labor v a r i e s between p l a n t s . Our p l a n t layouts a r e not a l l t h e same,
which a f f e c t s t h e c o s t s .
And t h e r e is v a r i a t i o n f r a n year t o year in t h e amounts produced
per head depending on t h e r e l a t i o n s h i p between t h e changes i n m r k e t
p r i c e s and c o s t s . If t h e y a r e not saved as e d i b l e v a r i e t y meats because
of p r i c e , t h e n t h e y f i n d t h e i r way t o t h e rendering tank and become a
by-product under a d i f f e r e n t category.
Again, t o give you some perspective on t h i s , our production of
beef v a r i e t y meats amunted t o about 43 pounds per head i n 1974 and
dropped to about 36 1/3 pounds i n 1975 as p r i c e s dropped. Sales
d o l l a r s i n 1974 were about $14 per head b u t had dropped t o $9 per head
i n 1975. You understand that these d o l l a r values were a f t e r t h e
expense that we had put on them. The value t o t h e l i v e a n i m l ,
t h e r e f ore, w a s lower.
Nevertheless, many times we see t h e d i f f e r e n c e between a plant
being p r o f i t a b l e or not, whether it be a beef p l a n t or a pork plant,
m y depend on how they handle t h e i r v a r i e t y mats. Whether o r not
t h e y obtain g o d y i e l d s and produce them e f f i c i e n t l y .
Let's look a t t h e r e l a t i v e importance of t h e v a r i e t y meats from
another angle. The per c a p i t a consumption f i g u r e s that most of you
a r e familiar with a r e based on carcass weights f o r beef, l a m b and v e a l
and on pork carcass weights excluding t h e l a r d f o r pork.
.
The per c a p i t a consumption figure f o r pork last year was estimated
by t h e U.S Department of Agriculture a t about 55 pounds. To my
knowledge, t h e r e a r e no production f i g u r e s collected on edible v a r i e t y
meats, but based on our experience I would estimate that t h e per c a p i t a
consumption of them from pork amounted t o about 4 pounds last year.
For beef, t h e consumption i n t h e U.S. i n 1975 w a s about I20 pounds
per c a p i t a carcass w e i g h t basis. In addition, I would estimate t h e
e d i b l e v a r i e t y meat consumption added another 5 t o 6 pounds. Much of
t h e v a r i e t y meat consumption i s in t h e form of processed meats of one
kind o r another.
Some of t h e most valued a n i m l b y - p r o d u c t s have t o be those used
i n t h e pharmaceutical industry. Since you have a speaker l a t e r t h i s
morning on t h i s s u b j e c t , I'll n o t go f a r t h e r .
A s a conversation piece, w e do save beef g a l l stones when possible.
Our l a s t s a l e w a s a t $1400 per pound. They go t o t h e Chinese who grind
them up and use them in ways peculiar t o us.
In surmnary then t h e animal by-product business is a tremendously
important part of the meat business. It involves b i l l i o n s of pounds
of product valued i n t h e hundreds of millions of d o l l a r s annually.
Whereas meat is t h e s i n g l e major product from each species, with r e a l l y
one use as food, t h e multitude of a n i m l by-products have a myriad of
uses that a f f e c t our everyday l i v e s more than w e might r e a l i z e .
160
Harold Herring:
of four.
L e t t h e record show t h e r e a r e f i v e papers instead
D r . Ferguson has consented t o a discussion, s o if t h e r e a r e any
questions of t h i s paper, l e t ' s have them a t t h e present time.
Audience:
W h a t d i d t h e Chinese use g a l l stones f o r ?
Donald Ferguson: I c a n ' t t e l l you w h a t a l l t h e uses a r e , b u t one
use, I understand, is t h a t a woman a t c h i l d b i r t h puts a l i t t l e b i t of
t h i s on t h e end of her tongue. I t ' s supposed t o prevent some of t h e
pain. I t ' s a l s o supposed t o be a n aphrodisiac.
Tony Kotula, USDA: I wonder how t h e q u a l i t y of v a r i e t y meats from
t h e United S t a t e s a r e comparing t o t h e v a r i e t y meats that a r e on t h e
market i n o t h e r a r e a s from a t h e r sources. Now, about f i v e years ago,
t h e v a r i e t y meats t o Great B r i t a i n from t h e United S t a t e s were very
poor i n q u a l i t y and t h e B r i t i s h published a r e p o r t saying t h e United
S t a t e s could export a g r e a t e r amount of v a r i e t y meats i f they would
improve t h e i r q u a l i t y . Do you have any information on that?
Donald Ferguson: This had been t r u e i n t h e past. Basically, not
because of t h e manipulation on t h e handling of t h e product a t t h e
packing l e v e l s here, but w h a t happened t o it i n t h e interim; t h e thawing,
t h e improper handling and storage a t p o r t s overseas. So when it a c t u a l l y
got t o t h e end user, they s a i d , "If t h i s is r e p r e s e n t a t i v e of w h a t t h e
United S t a t e s i s sending, we don't want it." It has improved considerably.
We're p u t t i n g it i n smaller boxes. We're doing a b e t t e r job of educating
t h e people about how we put it up here and making them i n s i s t upon g e t t i n g
it i n t h e same form t h e r e .
Don Kinsman, Connecticut: Do they save hair b a l l s from c a t t l e and
calves, and if so, for w h a t purpose?
Donald Ferguson:
No, I don't believe so.
Tom Bidner, ISU: HOW'S t h e p r i c i n g s t r u c t u r e s e t up, say f o r example,
on v a r i e t y meats? What determines t h e price? HOW'S t h e s t r u c t u r e s e t up?
Donald Ferguson: I guess t h e only way I can answer t h a t would be
t o say that it i s determined t h e same way that t h e p r i c e s f o r a l l t h e
other meats a r e determined, by supply and demand b a s i s . We t r y t o s e l l
them f o r t h e highest p r i c e that w e can g e t f o r them and t h e r e t a i l e r
t r i e s t o buy them a t t h e lowest p r i c e . So, we negotiate a p r i c e . Now,
t h i s example I used on t h e h e a r t w a s a very p e c u l i a r s i t u a t i o n , because
normally t h e s e c a t t l e h e a r t s w i l l s e l l a t q u i t e a premium over pork.
For some reason, a t a time last year they dropped c l e a r under. For
everything we could do, we couldn't g e t more money f o r them. F i n a l l y ,
we developed t h e overseas demand and then our own domestic demand seemed
t o pick up. But it is a negotiated p i c e .
Don Kropf, Kansas S t a t e : With a v a r i e t y of meats where you have a n
option of e d i b l e or inedible, how much more per pound does it c o s t t o
make it e d i b l e and t o meet t h e s a n i t a t i o n requirements and w h a t other
requirements do you haxe?
161
Donald Ferguson: Well, t o be honest with you, i t ' s a l i t t l e out of
my f i e l d . I couldn't give you a r e a l good answer on that. It depends-it does c o s t more t o meet e d i b l e requirements, of course, and some of
them are inedible because t h e y a r e condemned as they go down t h e slaughter
l i n e . But I don't have a good answer f o r you. I ' m s o r r y .
A 1 Pearson, Michigan S t a t e : Are d o m s t i c lamb p e l t s t h e same as
f o r making c e r t a i n items i n t h i s country7 The New Zealanders, I know,
save large q u a n t i t i e s and s h i p them t o Boston f o r m k i n g c e r t a i n items.
Donald Ferguson:
from time t o time.
A 1 Pearson:
I t ' s not a constant t h i n g then?
Donald Ferguson:
A 1 Pearson:
From time t o time we save them here, but only
No.
It depends on t h e price7
Donald Ferguson:
Right
Ray F i e l d , Wyoming: With t h e p o s s i b i l i t y of mechanical deboned
meat increasing, it could cause meat and bone meal t o decrease t h e
amount of scrap a v a i l a b l e f o r it
Have you considered t h i s , and what
would be your p r e d i c t i o n as f a r as t h e p r i c e of meat and bone meal i f
t h e r e were less raw material available?
Donald Ferguson: No, I haven't project& t h e p r i c e s . I t h i n k I
would look a t it t h i s way, that t h e meat and bone meal i s t i e d s o c l o s e l y
p r o t e i n supplements, soybean meal and so on, that it would
t o your ut&
increase it no doubt. But I don't t h i n k it wbuld be a question of going
through t h e rope t o s e e i f your poultry feed, and s o on, w i l l s t a r t
s u b s t i t u t i n g t h e s e other proteins when they g e t t o o f a r out of l i n e .
So, undoubtedly, it would r a i s e t h e p r i c e of m e a t and bone meal. But
it s t i l l would come t o a balance between that and our other p r o t e i n
substitutes.
Harold Herring:
Thank you very much, Dr. Ferguson.
Our next t o p i c is on t h e Use of Plasma i n Edible Meat Products, t o
He's a native
of Greenville, South Carolina. He has h i s Bachelor's from Baria College,
h i s Master's from North Carolina State, and h i s Ph.D. from North Carolina
S t a t e i n Food Science, where he spent four years. He then moved t o t h e
University of Nebraska, where he was Assistant and Associate Professor
f o u r years. He then moved t o Texas A & M University, where he is
presently Professor i n Animal Sciecce Department. H i s research areas
include Food Chemistry. H i s research i n t e r e s t s include ultra-high
temperature systems f o r processing f l u i d products, spoilage and d e t e r i o r a t i o n
i n food lipkds, f l a v o r properties of foods, and protein recovery including
t h e preparation of food grade protein from a n h l blood. This c e r t a i n l y
makes him w e l l q u a l i f i e d t o address t h i s t o p i c . D r D i l l .
be presented by C. W . D i l l of Texas A & M University.
.