By Jennifer Whitlock
Field Editor

Last year’s COVID-19 pandemic sent shockwaves through the beef cattle industry, including shakeups in the fast-growing beef byproduct sector.

“When packers experienced line disruption in 2020, many plants changed fabrication methods to keep more whole muscles or primals intact and keep less offal to maximize line speed,” Dr. Brenda Boetel, livestock economist at the University of Wisconsin-River Falls, wrote in a recent Livestock Marketing Information Center (LMIC) report.

The decrease in offal provided fewer opportunities for exports, and hide and leather markets suffered, too.

Data from LMIC show byproducts accounted for just 7 percent of total carcass value in April 2020, and U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) reports indicate byproduct values had decreased to just $6.79 per cwt in May 2020.

But with continued recovery from COVID-19 disruptions, Boetel said byproduct production has mostly returned to pre-COVID-19 levels.

Now, although beef variety meat exports are down slightly so far in 2021, beef byproduct values continue to make gains and support overall beef export values.

The hide and offal value of a typical slaughter cow accounted for about 20 percent of the export value in 2020, according to Boetel.

Current data from AMS show cattle byproducts drop value, which includes cattle hides, variety meats, blood meal and tallow, is $12.79 per live hundredweight (cwt) for the week ending March 26. That works out to about $179 per a 1,400-pound steer, which Boetel noted reflects levels not seen since 2018.

“Given the relatively fixed pounds of byproducts per 1,400-pound steer, the byproduct drop value contributions have been increasing due primarily to changes in demand. International destinations provide markets for products not typically consumed in the U.S.,” she said. “Japan and Mexico are the leading importers of U.S. variety meats, importing $369 million and $228 million worth of variety meats in 2020. Japan is the leading importer of beef tongue, while Mexico leads in beef tripe. As their import levels of variety meats change, so does the value contribution of tongue and tripe change in the overall byproduct value calculation, which ultimately will impact the finished steer price.”