Premium tallow, lard prices increase, aligning with broader fats market trends

Source: Fastmarkets Animal Fats prices

Prices for premium-grade tallow increased Feb. 14, with 10 railcars of technical tallow trading at 56 cents per pound Chicago and 10 railcars of edible tallow at 57.5 cents per pound, closing the week on a firm note.

Lard also gained, with one railcar trading higher at 52 cents per pound Chicago.

This increase was largely expected, following earlier strength in the renderer bleachable fancy tallow (BFT) market this week, which in turn helped support higher Gulf tallow prices.

By Feb. 14, renderer-grade BFT finished 2.07 percent higher on the week, while Gulf tallow rose 1.36 percent from last Friday’s average.

Throughout the week, while market sentiment remained somewhat varied, most participants pointed to strong demand continuing to outweigh available supply, keeping conditions tight.

Others pointed to rising prices for imported material into the West and Gulf coasts—driven by increased interest in tallow imports as imported used cooking oil (UCO) is no longer eligible under 45Z—as additional factors supporting the market.

Elsewhere, after a somewhat directionless week, the nearby soybean-oil market was up by 0.48 percent compared with last week’s average, which helped support higher distillers corn oil (DCO) and UCO prices throughout the week.

UCO prices in the delivered Gulf market continued to inch higher on Friday, settling at 52.5 cents to 53 cents per pound and lifting the week’s average by 1.77 percent.

The only other notable trade reported on Friday was DCO trading higher at 51.25 cents per pound FOB Nebraska for March delivery.

Other week-on-week average price increases were led by choice white grease in the Missouri River market, which posted the largest gain at 3.87 percent, followed by DCO rising 1.86 percent and yellow grease rising 1.52 percent.

In market news, the U.S. Energy Information Administration lowered its 2025 forecast for biodiesel and renewable diesel production in its latest Short-Term Energy Outlook released Feb. 11.

The agency now expects U.S. biodiesel output to average 103,000 barrels per day (bpd) in 2025, a 2,000-bpd drop from January’s estimate, with 2026 slightly higher at 103,000 bpd.

Renewable diesel production is forecast at 233,000 bpd in 2025, also down by 2,000 bpd from the prior outlook, while the 2026 projection remains at 253,000 bpd.

EIA anticipates total biomass-based diesel production to reach 339,000 bpd in 2025—up by 7 percent year on year—with renewable diesel accounting for 69 percent of output.

Total production is expected to rise to 355,000 bpd in 2026, representing a 5 percent increase, with renewable diesel’s share climbing to 71 percent.

Meanwhile, biodiesel and renewable diesel consumption forecasts for 2025 were also adjusted down slightly, reflecting cautious market expectations.