Animal protein market coverage: Launch of new price assessments

Key takeaways:

• Fastmarkets broadened animal protein market PAPs pricing to more regions and products including poultry meal meat and bone meal bloodmeal and fishmeal.
• Europe’s animal protein market totals ~6.58m tonnes annually with ~3m tonnes of safe Category 3 proteins dominating output.
• In the animal protein market Category 3 use is led by pet food at ~70% with ~12% each to aqua feed and fertilizer while stakeholders push to relax Category 2 rules and exports.

Fastmarkets expands PAPs pricing coverage across regions

The newly launched animal protein market prices expand the geography of Fastmarkets’ existing PAPs coverage in North and South America, Asia, Australia and New Zealand for such products as porcine, bovine, ovine, ruminant meat and bone meal, poultry meal, feather meal, porcine, poultry and ruminant bloodmeal as well as fishmeal.

Animal protein market size and production in Europe

The size of the animal by-products market in Europe is around 6.58 million tonnes, including 3.9 million tonnes of PAPs and 2.68 million tonnes of animal fats produced annually, according to European Fat Processors and Renderers Association (EFPRA) data.

Annual input of animal raw material is around 18-20 million tonnes, the data shows.

Safety categorization post-BSE and its impact on the animal protein market

As a result of the Bovine Spongiform Encephalopathy (BSE) outbreak in the 1980-1990s, all animal by-products were categorized according to a hazard risk to control the use of certain types of animal materials and avoid disease spread and cross-contamination in the animal industry and food for humans.

Category 3, safe for both human and animal consumption, animal proteins amount to the largest share of the market, with around 3 million tonnes rendered annually, while the total volume of category 1 and 2 material is just under 1 million tonnes.

Category 3 utilization: Pet food leads, aqua feed and fertilizer follow

In terms of consumption, around 70% of all category 3 animal proteins are used in the pet food industry, followed by around 12% each in the aqua feed and fertilizer industries.

The rest of the volume, around 5%, goes into animal feed production and combustion.

Category 1 and 2 animal proteins are forbidden in any food and feed use, with 752,000 tonnes used in combustion, while 157,000 tonnes go into fertilizer production.

Policy shifts and intraspecies recycling in the animal protein market

Given a practical absence of BSE cases in Europe, market participants have called for policy changes in category 1 and 2 PAPs usage and exports.

Market participants demand authorization of category 2 PAPs for use in animal feed and a relaxation of export restrictions for use in any industry, not only fertilizers.

Another point made by industry representatives during the latest EFPRA congress in Riga in June was the need for intraspecies recycling in Europe, which will allow feeding porcine PAPs to birds and poultry PAPs to hogs.

Fastmarkets’ weekly price assessment for category 3 poultry meal, 65% pro, exw Eastern Europe was €525 ($606) per tonne on Friday November 7, while that for category 3 mixed meat and bone meal, 50% pro, exw Eastern Europe was €230 per tonne on the same day.

What are processed animal proteins and how do they fit in the food and feed supply chain? Read our insights article to find out.