Cheek meat and Halal co products reach record prices in Australia
Cheek meat has been one of the co-products that has been consistently hitting records since July. In September, prices jumped another 23% month-on-month to $13.50/kg. This product is mostly exported to South Korea and Japan, but has been gaining popularity on the domestic market as well.
In August, beef lips hit their second highest price. This month, prices have softened 7% to $4.60/kg. Most of these products are exported to Indonesia but demand in the USA and Mexico has seen prices hold steady for some time.
Noticeable premiums are awarded to Halal co-products on the market.
In September, Halal omasum fetched a 20% premium over non-Halal omasum. The Halal omasum prices has also increased 53% year-on-year, while non-Halal omasum has only increased 12%. Evidently, demand for Halal products in Middle Eastern countries such as Saudi Arabia and Egypt are putting pricing pressures on these co-products. Some of the higher value co-products are bringing in significant additional profit to processors, offering welcome relief considering the current price of inputs. Many of these products, such as foetal blood, tallow and bloodmeal have been holding firm in their pricing. Foetal blood, which is selling for $615/L, is used in the medical industry for use in growing bacterial cultures. Meanwhile, tallow is used as a component of biofuels and bloodmeal is used in some fertiliser products. These co-products were trading at $2,437/tonne and $1,329/tonne respectively.
On the other hand, hide prices continue to soften with global economies falling and reduced demand for luxury products using leather, such as cars and high-end fashion. Some prices have come back 71% on year-ago prices.
The co-product space is a promising area that can add a lot of value to the industry moving forward.
Into the future, processors will have to decide which products are worth processing for the demand in the market.
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