What are processed animal proteins and how do they fit in the food and feed supply chain?

Processed animal proteins (PAPs) are derived from animal parts through the process of rendering, where animal fats and proteins are separated via the heating of the raw materials.

The biggest share of animal fats is used to produce sustainable fuels; the main industry using PAPs is pet food, followed by animal and aqua feed and fertilizer.

In Europe, all animal by-products are divided into three categories, depending on the raw material hazard level. Category 3 material is produced from disease-free animal parts and is qualified as safe for food and feed consumption, while category 1 and 2 animal by-products can only be used in biofuels production in the case of fats and in the fertilizer industry and combustion for PAPs.

The categorization was implemented in the EU to avoid contamination after the Bovine Spongiform Encephalopathy (BSE) outbreak was first recorded in the 1980s.

What are the new European PAPs prices announced by Fastmarkets?

Fastmarkets currently covers PAPs markets in the US, South America, Asia and Australasia, with more geographical expansion demanded by market players – the need for market transparency and for risk-management tools is growing.

To satisfy the needs of European subscribers, Fastmarkets has decided to launch a category 3 poultry meal and a category 3 mixed meat and bone meal price. Further product expansion is planned, subject to market liquidity and price launch feasibility, over the coming years.

By pioneering PAPs price assessments in the European market, Fastmarkets will be able to provide risk-management tools to many different market participants, including renderers, pet food producers, animal and aqua feed producers, fertilizer industry representatives and traders. 

The new prices will also align with existing assessments for other origins and destinations – Fastmarkets also covers poultry, bovine, porcine, ovine and fish animal by-products.

Who should be interested in the launch?

Primarily, the launch should be of interest to those in the rendering sector and end users of animal by-products, particularly rendering plants representatives, producers of pet food, animal and aquaculture feed compounds, along with animal nutrition specialists, traders, risk analysts, banks and other participants in the food and feed market.

Why should they be interested?

The lack of price assessments in the European PAPs market at present leaves market participants without tools to manage their price risks. Fastmarkets’ main objective is to contribute to market transparency by providing timely news and pricing information, assisting market participants in the decision-making process. 

What is the methodology behind the Fastmarkets spot PAPs price assessments?

Poultry meal and mixed meat and bone meal will be physical prices, assessed by price reporters, based on information gathered from market participants, including trades, offers, bids and price ideas reported by producers, end consumers, traders and brokers.

Who can I reach out to if I have further questions?

If you have any questions relating to this proposal, please contact us via the pricing.ags@fastmarkets.com email address.