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Carcass Valuations Could See Permanent Shift

21 January 2013

GLOBAL – The importance of animal by-products to the global meat industry is expected to alter carcass valuation long term after a change of consumer demand has headed a matrix of factors shifting carcass valuation from prime cuts to processing cuts, a Rabobank report has suggested.

Fast rising economic welfare, the status of offal as an Asian delicacy, new applications for off cuts, the growth of convenience products and lower availability of sow meat from the US and EU have all been identified as reasons for a shift in animal carcass valuation by food and agri-business experts.

The transition from valuing slaughtered animals around prime meat prices has been observed since 2009. This change could force the processing industry to look at longer term contracts to ensure supply and alter the criteria for sourcing meat.

Processors dedicated to animal by-products may see a change in market competition and Rabobank have predicted that such companies will be prompted to strengthen their position in the supply chain.

“The impact of this shift in carcass valuation will be different for slaughterhouses, the further processing industry and dedicated companies active in the different parts of the by-product industry”, said Rabobank analyst, Albert Vernooij.

“For slaughterhouses, the focus will increasingly move towards capturing the value of fifth quarter products, which might lead to forward integration in these activities”.

Due to the strong offal market in asia the alteration is expected to be permanent.

ThePigSite News Desk

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