Global Market Overview National Renderers Association 2015 IPPE, Atlanta Georgia, January 29, 2015

Kent Swisher

National Renderers Association

Overview

• Products, Uses, Production

• Production/Consumption Overview – Global

• Market Overview – Global

• Market Specific Reviews

• Outlook

Value Chain

Livestock Slaughter

Rendering Industry

Livestock Production

Rendering Industry – Products

• Processed Animal Protein Meals

– Meat and Bone Meal, Meat Meal

– Poultry By-Product Meal

– Feather Meal

– Blood Products

– Hides and Skins

• Fat and Grease

– Tallow, Poultry Fat, Yellow Grease, Used Cooking Oil, Choice White Grease, Lard, Edible Tallow

Rendering Industry – Product Uses

• Livestock Feed

• Aquaculture Feed

• Pet Food

• Soap, Cleaning Agents

• Biofuels

• Lubricants

• Fertilizer

• Oleochemicals

U.S. Production Proteins

NRA Estimates, Render Magazine, Market Report, April 2014

U.S. Production Fat

NRA Estimates, Render Magazine, Market Report, April 2014

Rendering Industry – Global Overview - Fat

NRA, ABRA, ARA, EFPRA, Global Trade Atlas

Rendering Industry – Global Overview - Fat

NRA, ABRA, ARA, EFPRA, Global Trade Atlas

Supply/Demand U.S. Biodiesel Market

Rendering Industry – Global Overview- Proteins

NRA, ABRA, ARA, EFPRA, Global Trade Atlas

Global Tallow Exporters

Global Trade Atlas, NRA Estimates

Global Tallow Importers

Global Trade Atlas, NRA Estimates

Global Protein Meal Exporters

Global Trade Atlas, NRA Estimates

Global Protein Meal Importers

Global Trade Atlas, NRA Estimates

Market Review - China

Source: Global Trade Atlas

Market Review - Singapore

Global Trade Atlas

Singapore – Renewable Fuel Demand

Global Trade Atlas

Singapore – Renewable Fuel Demand

Singapore – Renewable Fuel Demand

According to Forbes Magazine, no one

customer should exceed 20 percent of a

company’s business

Declining Export Markets

Declining Export Markets

Excess Supply of Competing Products

Excess Supply of Competing Products

Excess Supply of Competing Products

Source: USDA/FAS PS&D

Outlook

• Low commodity prices

– Oversupply/OPEC

• Increased profitability in the livestock sector means – increased raw material for rendering

• Low prices should help re-establish export markets for fat

• The renewable diesel/biodiesel sector will remain an important new growth market

• Threats from disease outbreak

Outlook - Threats - Disease Outbreak Potential

Outlook • HPAI - ?

– Currently the only major market to close to poultry by-product meal/feather meal is China

– OIE – products should be cooked « 30 minutes at 56 degrees celsius »

• China should open for U.S. tallow soon – with restrictions

• EU lifting feed ban restrictions – can feed non ruminant meals to Aqua

• Fishmeal prices should help support processed animal protein meal demand

Value Chain

Livestock Slaughter

Rendering Industry

Livestock Production

Rendering - Value to the Livestock Industry

USDA/AMS Drop Value (steer) January 28, 2015

Steer:

• Drop value for tallow, MBM, and blood meal - $33.68 per head

• Drop value for hide – $105.05 per head

• Yearly Value (based on annual slaughter) >$1 billion

USDA/AMS Drop Value (hog) January 23, 2015

Hog

• Drop Value - $4.24 per head

• Yearly Value (based on annual slaughter) $500 million

ALAPRE Meeting 2014