MethodologyContact usSupportLogin
The global animal fats and proteins market is undergoing a structural shift. From tightening livestock cycles and fragmented protein supply chains to the growing dominance of biofuel demand, the rules of engagement have fundamentally changed.
To unpack these dynamics, Fastmarkets recently hosted a multi-region webinar featuring Ryan Standard (Editorial and Pricing Director, Agriculture and Biofuels), Chloe Krimmel (US animal proteins), Veronika Prykhodko (European animal fats and proteins), and Sarah Schneider (US animal fats).
Chloe Krimmel opened with a clear message: the US animal proteins market is no longer uniform. Species, origin, and quality now matter far more than they used to.
On the ruminant side, heavier cattle weights helped offset lower head counts through 2025, but that buffer is not expected to hold into 2026. The result has been a pronounced have-and-have-not dynamic – some plants sitting on excess supply while others face acute tightness – keeping price ranges unusually wide between mixed-species and pure beef meat and bone meal.
Meanwhile, the traditional soybean meal pricing benchmark is losing its grip. As soybean meal has become increasingly driven by crush margins and oil economics, different protein sources have stopped moving in tandem. The market is shifting toward valuing ingredients on a dollar-per-unit-of-protein basis – a more direct cost comparison across all available sources. This shift accelerated as feed margins tightened in 2025 and formulations built solely on soybean meal relativity began to break down.
On the supply side, poultry remains the most flexible segment. Byproduct production rose nearly 9% in 2025, partially offsetting a 3.6% drop in meat meal output – equivalent to around 159,000 metric tons. Cattle supply, by contrast, has a structural problem. With an 18–22 month market-ready cycle, the reduced heifer slaughter of 2025 won’t translate into additional supply until 2027. Disease risk, including screwworm impacts on Mexican cattle imports, is adding further pressure to already depleted head counts.
Veronica Prykhodko outlined a European market shaped by BSE-era regulation, shifting slaughter trends, and growing cost advantages for locally produced animal proteins.
Around 80% of European rendering raw material is Category 3 certified. Total annual production stands at approximately 6.3 million metric tons of animal fats and proteins. Category 3 proteins flow primarily into pet food – accounting for 70% of use – followed by fertilizer, animal feed, and aquafeed. Category 1 and 2 fats go almost entirely into biofuel production under the EU’s Renewable Energy Directive (RED III).
At current freight rates and supply conditions, European Category 3 meat and bone meal holds a meaningful cost advantage over imported soybean meal. European poultry meal, while rising in price due to raw material shortages and avian influenza disruptions, is still priced below US levels – giving European-origin cargoes a potential freight advantage into Southeast Asian markets. Export volumes from Europe rose 6% year-on-year in 2025, with Vietnam, the Philippines, Thailand, and Chile among the key growth destinations.
Policy uncertainty remains a drag, particularly around RED III implementation delays in the Netherlands and Germany, which have suppressed biofuel demand for animal fats and left producers uncertain about the transition from double-counting to a greenhouse gas savings score system.
Sarah Schneider led with her main key takeaway: the US fats and oils market no longer behaves like a byproduct market. It is priced like an energy feedstock.
Biofuels now account for an estimated 40–50% of total US fats consumption, with renewable diesel the primary driver since capacity expanded rapidly in 2020–21. Under the 45Z tax credit, lower carbon intensity feedstocks – including tallow and used cooking oil – earn greater value than crop-based alternatives, accelerating their pull into fuel production. In March 2026, geopolitical tensions pushed crude oil and soybean oil sharply higher, with tallow and choice white grease reaching near 8-month highs and Gulf used cooking oil approaching 4-year highs.
Fat supply, however, cannot respond to price signals – it is tied directly to meat production cycles. Cattle slaughter was down more than 6% in 2025, and Q1 2026 is running nearly 8% below the prior year. When demand is expanding and supply is inelastic, price is the only adjustment mechanism.
Imports have historically filled the gap, but are increasingly unreliable. A 50% tariff on Brazilian tallow – since reduced to 10% – and 45Z’s restriction of credits to North American feedstocks have made imported material significantly less competitive. The policy picture, combining CI-based credits with growing renewable volume obligations, is one where demand is being amplified by mandate inside an already supply-constrained system.
This summary covers only the headline findings. The full recording includes detailed price charts, regional comparisons, export flow data, and a live Q&A covering topics including palm oil substitution, soy protein concentrates, and the impact of EUDR on European animal fat demand.