Tallow and Grease
In 1999, tallow and grease prices fell to 9-year lows and caused the value of U.S. exports to decrease 28 percent. U.S. exports to Asia have been driven by Chinas substantial jump in imports over 1998 levels and Koreas continued dependence on imports to satisfy demand.
Tallow and grease production in 1999 for the countries covered in this report increased 3 percent from 1998 to 8.6 million tons. The United States and China accounted for the majority of the increase while other regions remained mostly unchanged. In 2000, production is forecast to decrease 3 percent to 8.3 million tons.
Total exports rose 4 percent to 2.1 million tons in 1999. Import volumes rose by 7 percent in 1999, and China is projected to almost double its imports of tallow and grease in 2000 over 1998.
In 1999, U.S. tallow and grease production rose by 4 percent, mainly due to higher slaughter rates and higher average weights. U.S. exports in 1999 were unchanged from 1998, but are expected to dip 4 percent in 2000. Imports fell by 7 percent over 1998 and are expected to remain steady in 2000.
Chinas consumption of tallow and grease is forecast to grow at a respectable 6-percent rate in 2000, having experienced a 17-percent increase in consumption in 1999 over the previous year. Along with the consumption increase comes a jump in imports of 10 percent to 350,000 tons in 2000. These increases are caused in large part by relatively high prices in Chinas protected vegetable oil market, and also by a longer term trend of Chinese livestock producers gaining a better understanding of how to profitably use tallow in their rations.
Korea remains a sizable importer of U.S. tallow and grease, having seemingly recovered from the effects of the Asian financial crisis. Its U.S. exports to Korea jumped by 87 percent on volume from 1998 to 1999. Korean consumption in 1999 was up 21 percent over 1998 levels, with a modest 1 percent increase forecast for 2000.
Mexicos imports from the United States are forecast to remain unchanged in 2000. Overall consumption in Mexico, after remaining flat between 1998 and 1999, is expected to rise by a modest 1 percent to 355,000 tons in 2000.
Russia is a growing importer of U.S. tallow and grease, taking in almost six times as much product in 1999 as in 1998, from 4,499 tons to 26,638 tons. This increase can be partially explained by an increase in soap production, in which tallow is a major ingredient. U.S. exports to Turkey have decreased sharply, down 16 percent in 1999 over 1998 levels to 103,000 tons, after experiencing a 13 percent drop from 1997 levels down to 123,000 tons in 1998.
Note: Beginning with publication of the October 2000 "Livestock and Poultry: World Markets and Trade", commodity and country analysis and tables for tallow and grease, hides and skins, and sheep will be discontinued. This decision was made in response to discussions with the relevant U.S. industries, surveys of FAS overseas offices, and other feedback. The Dairy, Livestock and Poultry Division will continue to monitor and analyze market developments relating to these commodities and will continue to publish the results of our analysis through International Agricultural Trade Reports and other means. The latest information will be posted on the DLP Home Page: www.fas.usda.gov/dlp/dlp.html
For further information, contact Michael Riedel at (202) 690-3129.