The importance of strong domestic beef demand and U.S. beef exports to U.S. cattle markets has been well documented. Beef exports on a volume and value basis were record high in 2022 with record U.S. beef production, but have declined since. Headwinds include declining U.S beef production and record-high U.S. beef prices.

Beef byproducts are less glamorous and their importance sometimes overlooked by cattle producers. However, the value of byproducts, sometimes referred to as “offal or drop value,” also plays an important role in cattle prices.

Beef byproducts include all items, both edible and inedible, from harvested cattle that are not part of the dressed carcass. Hides were historically the most valuable byproduct, but have been overtaken by beef tallow and tongues. Other beef byproducts include livers, hearts, oxtails, tripe, and meat and bone meal. Edible byproducts are often referred to as “variety meats.” Inedible byproducts are used for a wide variety of pharmaceutical, cosmetic, household and industrial products.

The value of beef byproduct exports also reached record-high levels in 2022 and have declined. However, beef byproduct values declined 12.7% compared to beef exports declining 21.2%

Values for individual beef byproduct items are influenced by many fundamental supply and demand factors. The United States is the world’s largest beef producer and beef byproduct producer.

So, export demand is especially important because the amount of U.S. byproducts produced is large in comparison to domestic demand.  

Tastes and preferences for traditional beef cuts and variety meats differ throughout the world. Some foreign customers prefer variety meats such as livers and hearts, unlike many U.S. consumers. Tongues, for example, are popular in Japan. In some countries particular variety meats are preferred over traditional meat cuts or even used for medicinal purposes. In others, a variety meat may be a cheaper source of protein for lower-income consumers. 

Byproduct value

The USDA Agricultural Marketing Service (AMS) publishes a daily By-Product Drop Value (Steers) report for fed cattle. It is available at 
www.ams.usda.gov/mnreports/ams_2829.pdf.

AMS reports the quantity, price and value for a number of the most important byproducts for a typical 1,400-pound (lb.) steer. Values are reported on a per-hundredweight (cwt.) live basis.

Currently, the byproduct value for a 1,400-lb. steer was $14.18 per cwt. or $198.52 per head. AMS reported the market value of an average live steer at $258.50 per cwt., so byproducts amounted to about 5.5% of the steer value. Values of selected individual byproduct items included packer tallow at $3.66 per cwt. ($51.24 per head), tongues at $1.77 per cwt. ($24.78 per head), and steer hides at $1.43 per cwt. ($20.02 per head).

The weekly value of beef steer byproducts has risen rather sharply in 2026 from just over $11 per cwt. to start the year to just over $14 per cwt.

The main driver of the increase has been packer tallow values, which increased from $2.24 per cwt. ($31.36 per head) to the current $3.66 per cwt. 

The tallow market follows the energy market due to its use for renewable biofuels. The increase in crude oil prices due to the war in Iran has supported tallow prices.

An increase in export demand for livers has also lent support to byproduct values. Liver values started the year at $0.27 per cwt. ($3.78 per head) and have risen to $0.83 per cwt. ($11.62 per head).

Hide values, once the leading byproduct value, have continued to decline in 2026, extending a several year decline. Many hides are exported to overseas customers to be processed into leather products. The substitution of synthetics for leather has hurt hide demand. 

Both domestic and export supply and demand factors will affect beef byproduct values in 2026. Projected lower U.S. fed cattle and cow slaughter, and demand for tallow and export demand for variety meats such as livers and tongues should support byproduct values in 2026.

However, ongoing trade negotiations with major beef byproduct importing countries could affect demand.  

Editor’s note: Tim Petry is a livestock marketing economist with the North Dakota State University Extension Service.