A sizeable percentage of the product is truly recycled. The tallow derived from animals or the fat of animals is fed right back to other animals as ingredients in animal feeds. The same is true of the protein which is fed to livestock and poultry as a portion of their growing rations. The balance of the tallow produced by US renderers becomes a vital and raw material for many hundreds of industrial or consumer uses as you saw earlier today.
It's hard to find the actual date in the first development of rendering, but there's a story about the Roman historian Pliny in 78 AD that describes the origin of soap. The story goes something like this. On Saple Hill near Rome on sacrificial and feast days, fatted calves and lambs are sacrificed as burnt offerings to Roman deities. The melted tallow from the slaughtered animal mixed with the ashes from the burned woods and rains would pack this mixture together and run down the hill. Below the hill there was a small creek. Well, it was there that many of the women from town came out and did their laundry and found that the clothes got cleaner in this particular area. So, a thinking man immediately began to figure out ways, or to see what was going on in this area. They called this packed mixture with the dirt and the tallow and the ashes, saple. It's really from that term that saponification -- because Saple Hill was the area that it came from, so that's where the term saponification came from. So, it evolved to the point where they realized dirt didn't need to be a part of it, but soap started to be made from animal fats being mixed with the wood ashes.
Another part of the early development of the rendering industry was candle making. Starting with primitive tallow dips and rush lights, candle making became a widespread industry. The tallow candle came to an end roughly at about the 1850s and salt making became a growing industry on its own when a Frenchman by the name of Michel Chavreul demonstrated that fats were fat triglycerides. This is what we had talked about a little bit earlier and I'm not going to get real hung up on the technical aspect. But the fact is, the finished tallow or fat is a triglyceride that when separated, produces glycerin and the different fatty acids.
Just a couple of the fatty acids and a little discussion when we talk about some of the quality characteristics it will be important. There are saturated and unsaturated fatty acids and the difference is whether there's double bonds involved in them or not. The species as well as the part of the animal that the fat comes from will determine the different makeup of the fatty acid composition.
The industry as we know it today came into being with the discovery that it was easier and more profitable to produce tallow and sell it to salt manufacturers rather than to have the salt manufacturer produce their own tallow and sell the soaps. The early history of rendering is not well documented, however, many cities had a local cheese maker, a brewery and a rendering company. It was really a family business. As you can see, transportation left a little bit to be desired at the time.
Open kettle rendering was a process used in early days. Fat was put in a pot over an open fire where it melted. The tallow would rise to the top and was skimmed off. The remaining solids were air dried and sold as animal feeds. Technological advances in the rendering industry progressed to where batch cookers became a viable means of processing raw materials.
Along came World War II and along with it, many changes to the industry. The war effort created serious demands for tallow. Remember, tallow is a triglyceride or a molecule made up of glycerin attached to the fatty acids. It took ten tons of tallow to produce one ton of nitroglycerin. The war effort also increased the demand for stearic acid which was used for the manufacture of rubber and was a major lubricant used in drying metal for shell casings.
Synthetic detergents were invented to replace the use of tallow. So, after the war, other outlets were needed to be developed. In the 1960s, the first continuous rendering system, such as a Dupps Cooker and a Carver/Greenfield Evaporator Systems came into being. There were also improvements to efficiencies for batch cooking systems.
Since that time, there's been dramatic consolidation in the industry. In the 1960s, there were over 1,000 rendering plants in the United States and the majority were independent, not related to a packing house, and were primarily smaller family businesses with two to four batch cookers. There were a few larger companies at the time, but they were very small. You can see today, there are 292 plants that process over 30 billion pounds a year. Out of the 292 plants, approximately half of them are non-captive renderers, which means that they are not affiliated with a specific packing house, and the other half are packer renderers, or as was referred to earlier, captive renderers.
So, what we're going to do now is go from the history and really go into a little bit of the details of what rendering actually is, or a rendering school. When you fry bacon, you end up with three products: the liquid which is a tallow or grease, the solids which are the protein, and the moisture which is evaporated. In its simplest form, this is rendering. Animal by-products are cooked causing the moisture to be driven off and the fats separated from the animal tissue. So, it is with this analogy that we'll start our discussion on the business of rendering.
To understand a little bit about rendering, I thought it would be best to talk about the quality of the finished products and then we'll digress from that to go through the process itself. But on the handouts that you have, I've identified different quality terms and we're going to go through these real quickly one-by-one.
Titre is a measurement of the hardness or softness of the fat and it's determined by recording the melting point. Under accepted US trading rules, titres at less than 40 degrees Centigrade are greases and those with titres above 40 degrees are tallows. The difference comes about from the different fatty acid composition. Tallows would come primarily from cattle or sheep material, and the greases would come from hog material or poultry material.
Iodine value is another measure of the hardness. It's really done by measuring the chemical and saturation of the fat and the results are expressed in the number of grams of iodine absorbed by a hundred gram of fat sample. So, it's just another method of measuring the hardness of the fat.
The raw color, or as it's referred to is FAC, the abbreviation for the Fat Analysis Committee -- it's a color standard that runs from one to 45 using odd numbers, with one being the lightest and 45 the darkest. A sample of fat after it's produced, or a sample of tallow is filtered and is compared with a color slide standard that's mounted on a circular aperture. What you do is you just compare the color of the sample to a different color that's in the slide itself. The refined and bleached color is used by certain people that we sell the tallow to. The soap industry and others have characteristics that they're looking for, what kind of color you get after it's refined and bleached. This analysis determines the Lovibond color after treatment with alkali and a specified bleaching earth. The Lovibond color is a much finer color, really, compared to the FAC color standards. It is product that has been processed under good conditions and usually very fresh material that have the lowest RMB colors.
Free fatty acids are pretty self explanatory. It's a measurement of the amount of the free fatty acid in the tallow.
MIU stands for moisture, impurities and unsaponifiable matter. Moisture and fat arises from slight emulsification during processing. Impurities could be solids remaining in the tallow after rendering. The unsaps are any material in the tallow that will not saponify when mixed with an alkali. The MIU on tallows, the maximums you'll see is less than one percent and normally runs less than a half a percent with the impurities being probably .1 to .15 in most tallows.
Grade of filtration is another quality item that certain industries are concerned about. It's a method based on the volume of sample size that will filter in specified times under a certain temperature condition.
Peroxide value is a measurement that's used to determine rancidity. Rancidity is caused usually by oxidation. The method of assessing oxidation is by determining a peroxide value which is used primarily with edible oils and sometimes also with the use of fats or tallows in the feed industry.
Pesticide residue -- it's not really a quality characteristic, but it's definitely something that the rendering industry does. Use gas chromatographs to analyze tallows that are produced for any concerns or any residues of pesticide that could be in it.
These are the AFOA specifications for different tallows and greases. You can see there's edible tallow with a titre at 41, FFA max at .75, and FAC color of three, and minimal if any MIU. You can see that there is no RMB listed, or the MIU is negligible. The independent, street renderer and the captive renderer that are now producing edible tallow are probably either producing an all-beef packer tallow, or a bleachable fancy tallow. Or depending on the source of raw materials, they could be down in the special tallow area. But I think for our purposes, we're going to talk about bleachable fancy tallow or packer tallow.
With a titre of 40½ to 42, maximum FFA on the packer tallow is two percent, unbleachable is four percent. FAC on the packer and bleachable is none. It's really more an RMB. Color is used so it's .5 or 1.5 for the bleachable, and a one percent maximum MIU. Choice white grease, which is hog grease, and could also be used in different products. Major difference is the titre, 36 versus 41. However, the rest of the specifications are very close to the bleachable fancy tallow.
Very briefly, just for your reference, I have included a couple of slides in the handout also that talks about animal protein. We don't just produce tallow and we don't just produce protein. When we go through the process, both products are produced. There are a few quality terms and then I also put together a little slide for reference that talks about different animal proteins that are available and then the characteristics of these different quality items in them.
Now, we're going to talk a little bit about procurement and raw materials and how that actually fits into what the renderer does. This slide highlights nine different types of raw materials. There are literally hundreds of raw materials that are processed by renderers in the United States, but in the interest of time we'll look at these just to get an idea of the concept of yields and different characteristics. The reason that the renderer is so concerned about yields is because this is really the backbone of our business. To understand our business, you need to know how raw material values are calculated and the effect these values have on the operation. Now you'll notice that shop fat and caul fat -- they're both fat products. They both have the same amount of units of protein in the finished meal, but there's a significant difference in the yield of the products. Shop fat would be the trimmings from a grocery store or a butcher shop and you'll end up maybe with a yield of 60 percent tallow and ten percent meal. Caul fat is taken from the stomach of the animal, has a much higher yield -- about 81 percent tallow and four percent meal. The difference between the 70 percent total yield and the 100 percent -- 30 percent is moisture that's in the product that's removed.
So, you can just see from these nine products, bones have about a 60 percent total yield -- only 15 percent tallow, 45 percent meal. The offal can be variable, maybe 14 percent tallow, 16 percent meal. Dead stock, ten and 22 and blood is negative tallow and 15 percent protein produced, so, only about a 13½ percent yield.
The calculation of raw material values, and this is what I talked about. To understand our business, this is a little bit of background. I won't spend much time, but just a little bit to give you an idea as to how we look at deciding values of raw materials.
We'll assume the tallow market is 16 cents a pound and meat and bone meal market is $180.00 a ton, or nine cents a pound. The fat that we saw, the yield was 60 percent tallow and ten percent protein times these values of 16 cents and $9.90 because there's 55 units of protein says that every 100 pounds of raw shop fat is worth $10.59. Assuming you have a handling cost for processing and transportation and administration of $5.00, that would allow you about $5.59 a hundred weight to pay for that product. There's about 70 pounds per head that's generated out of a normal animal.
Shop bones yield at 15 and 45 times their respective markets gives you a value of about $5.80, less the handling costs -- it's only about 80 cents a hundred weight value with about 150 pounds per head of material generated per animal. The offal, or the beef sets which are the heads, the feet and the stomach has a yield of about 14 and 16.6, so you can see that value is $3.73. If you have a cost of $5.00, there's a negative value to the offal. So, if you take the total evaluation of all of the three different items times their weights and values, you see that a carcass is probably worth somewhere in the area of $1.50 to $2.00 to the renderer in its form of all these different products together. That depends on the different raw material sources, the different costs in doing it, but this is really the bottom line as to how we look at the values of products and values for payment.
Got a little bit of background here as to the makeup of raw materials. In general, all three of these next slides are going to show that packers and fabricators generate the large percentage of material and are processing more and more of it. Yesterday -- I think this represents about 1968 -- a 1,000 pound steer had about a 662 pound carcass. A lot of the carcass beef went to fabricators or grocery store chains where it was processed. Packer renderers processed about 36 percent of the raw material and independent renderers processed about 70 percent.
Today, you can see that steers have gotten heavier, about 1,114 pounds and there's very limited carcass beef that goes to grocery stores any more. Out of that, they generate about 714 pound carcass, but there's a trend towards leaner beef and total volume for the renderer is down. In 1978, there were 24 billion pounds of beef. In 1988, it's 23.4 billion pounds of beef and that trend is continuing. So, there's a shift of about 3 to 6 billion pounds of raw material annually away from non-captive renderers. You can see the packer renderer has increased dramatically from 36 percent processed up to about 70 percent processed in 1988, and the independent is about 30. The trend is expected to continue where packer renders will probably be about 85 percent of the processing and independents will be about 15.
With pork, the same trends have started and are continuing. Not quite to the same extent because the packers were probably higher 20 years ago. But lean is still the key. There's less fat for the renderer and you can see that it has gone from 59 percent for packer renderers up to 64 with a projection at about 70 percent.
Poultry material: it's very evident that there's been a dramatic shift also. Same types of situations, plus the poultry processors have gotten much larger and are more fully integrated. The packer renderers which were only 25 percent in the past are roughly about 65 percent today will probably reach about 70 percent, where the independent will be 30 to 35 percent processing at that time.
On an input basis packers and fabricators generate about 52 percent of the raw material. Butcher shop chains and grocery stores generate about 22 percent. Miscellaneous products and dead stock are about six percent. Fast food restaurants are about 18 percent, and DAF and trap grease are about two percent.
There's another slide that I put in your handout that you can use for reference. It talks about trends in another way. But rather than take the time to go through that, that's just there for reference for you also.
Now we'll go on to the rendering process itself. No matter what type of system is being used, a simple description of the rendering process is raw material grinding, moisture removal and finished product separation. So, as we go through the different processes, in its simplicity, this is really what's being done by all the different systems.
I'm not an edible renderer so I'm not going to proclaim to be an expert. But I've got a little bit of background information and hopefully, I'll be able to answer any questions that you have. But an edible rendering system, as you can see, raw materials -- and as they were identified this morning, are primarily products that are taken from edible processing plants. One comment I would like to make, it was mentioned this morning that only captive renderers have edible processing. That's not totally true. There are non-captive renderers also that procure material from inspected plants and have inspection at their facility to make sure that these raw materials are being handled properly. So, there could be captive or non-captive renderers that are in the edible business.
The raw material is ground and is put into an agitated tank that's heated to about 120 degrees. From this, the material goes through a disintegrator which is a grinder and goes through mechanical separation or centrifuging. The solid portion is a product that could be sold edible and as beef tissue. The liquid portion goes through another pump where steam is injected and the temperature at this point gets up to 220 or 225 degrees before the final separation and polishing of a vertical centrifuge. After that time, the fat is processed and is ready for sale as edible tallow. Edible tallow can be used either for edible or inedible. It can't go the other way. Inedible can not be used for edible, but edible tallow can go either direction. That does happen from time-to-time.
Batch cooking is a process that's been used for inedible processing for quite a while. It begins with an accumulation of raw materials in a raw material receiving hopper. Normally, these come in large trucks. They're dumped into these pits which could hold anywhere from 40 to 120,000 pounds. They're commingled, so it's not just a specific raw material. Captive renderers have a raw material mix that's pretty consistent if it comes from a beef kill operation. There's a certain amount of bones and a certain amount of the offal and fat that's mixed together and it's pretty consistent. Independent renderers, however, more-or-less have available the products that are in their specific area and it could be a commingling of any of the hundreds of different types of raw materials that we talked about.
From the raw material receiving area, it is ground and is loaded into the cooker. The cooker itself is a cylindrical vessel approximately five foot in diameter and 12 foot long. There's a shaft that runs through the center and has paddles connected to it that are used to agitate the raw materials inside. There's a jacketed shell around this cooker into which steam is injected. The heat transfer is accomplished when the raw material comes in contact with the jacketed cooker shell. As the cells burst, the moisture is removed through a condenser and the finished product -- which would be coming out is in a slurry at that point -- goes into a percolator drain pan. It's a slurry of tallow and protein together.
The protein portion, or the solids which are still somewhat greasy, go through a screw press where more of the finished tallow is extracted. The dry product, or the protein that's being processed is ground and screened and is sold as the meat and bone meal. The screwed pressed fat goes back and is mixed with the free fat that comes off the percolator into a tallow work tank. From there it goes through either centrifuge or a filter press, or both. It is then ready for sale as inedible tallow.
Temperatures in the batch cooker range from about 240 to 270 degrees. Time of process, depending on raw materials, is usually two to three hours.
This is a schematic of two different processes. One is a continuous cooking system such as a Dupps cooker or a stored cooker, as well as a restaurant grease operation and I'll go through each of these. The raw material, again, comes into the collecting hopper. It's ground and sized. The difference between this and a batch cooker is the fact that it is continuous. There is continuous material being put into the cooker and continuous finished product being brought out of the cooker.
Temperatures in the continuous cooker roughly range the same as the batch, probably 240 to 270 depending on which raw material is being used. The retention time is approximately 30 to 40 minutes. The same thing happens. As the product is cooked, the further it gets towards this end, the further processed the material is. The vapor is taken off, goes through a condenser, and the water goes to the waste water treatment system. The finished product comes out and goes through the drainer screen where the liquid tallow goes to the tallow processing and the solid portions go to the presses. The excess tallow is pressed out of the material, as well as some tallow off the drainer screen and they go for centrifuging and/or filtering or both, and go to the finished product storage where they're ready to be sold.
Restaurant grease is brought in either in bulk or in barrels and processed in different ways where it is cooked or heated. The finings from that product are settled out. The grease itself is also centrifuged and/or filtered, and the yellow grease goes to storage where it's ready for sale as primarily animal feed.
This is another type of a continuous cooking system. This is an evaporator system. It's a little more complicated to follow, but we'll try and get through it in a very quick means here. Raw material comes through a raw material pit. It goes through many different grinding processes. For the other two systems, it's ground to probably three-quarters of an inch to an inch. With this type of a system, you're grinding probably to an eighth or a half-of-an-inch. The reason for that is that you're pumping material through the whole system for processing. Once you get through the disintegrators or the small grind, the product is mixed at a ratio of about one percent raw material to five parts of finished tallow and are started to be pumped through the process.
These are falling film evaporators and each of the evaporators has many tubes in it that are an inch-and-a-half to two inches in diameter. There's live steam injected on the second stage -- and when I'm talking about a lot of tubes, there could be 750 to 1,200 tubes in each of these different evaporator stages. The live steam is injected and heats the outside of these tubes. The raw material slurry is pumped through the center of these tubes, comes out and falls down into the vapor chamber. The finished product or slurry goes this direction and is pumped to the second stage. The waste heat from this first stage -- or from the second stage, I'm sorry, goes to the first stage and is used to pre-heat the raw material. Temperatures in the first stage are approximately 140 to 150 degrees, but this whole system -- you can see there's vapors that are being drawn to the condenser -- is under a vacuum. There's roughly 24 to 28 pounds or inches of pressure on this stage, so the boiling actually occurs in the first stage with the waste heat. The second stage has live steam on it, as I said, and is also under a vacuum. These temperatures in the second stage reach 240 to 270 degrees. Retention time in this system is about 20 to 25 minutes.
After enough moisture has been removed, it is then pumped to the centrifuges or static screens for the separation of the solids and the liquids. The liquid portion goes to the work tank. The solid slurry still needs to have more fat pressed out of it. It goes to the presses. The extra fat that comes off, or tallow at that point, also goes to the work tank. The finished protein goes off for grinding and the tallow that's in the work tank is centrifuged and filtered and ready for sale.