Commercial Classification of Animal By-products

When a livestock animal is processed, meat accounts for roughly 60-65% of its total weight. The remaining 35-40%-hides, bones, organs, blood, horns, hooves, and fat-does not go to waste. Instead, it enters a well-defined commercial system that channels these materials into industries ranging from fashion and food to pharmaceuticals and construction. At the heart of this system is a straightforward but economically significant framework: the commercial classification of animal by-products into primary and secondary categories. Understanding this classification is key to appreciating how the livestock industry maximizes value from every part of an animal.

What are animal by-products? 🔗

According to the European Food Safety Authority (EFSA), animal by-products are materials obtained from animals that are not intended for direct human consumption. This broad category includes slaughterhouse waste such as skin, bones, horns, hooves, blood, fat, and offal, along with materials like feathers, wool, and eggshells produced by live animals. The USDA defines them more specifically as products harvested or manufactured from livestock other than muscle meat. In both definitions, the common thread is clear: these are materials that remain after the primary purpose of animal processing-obtaining meat or another main product-has been fulfilled.

Crucially, the term “by-product” does not mean inferior or unimportant. These materials are the raw foundation of several major global industries. The commercial classification system organizes them based on their position in the processing chain: are they taken directly from the animal, or are they manufactured from materials that were first taken from the animal? This distinction defines the two core categories.

Primary by-products: the raw materials 🔗

Primary by-products are materials obtained directly from the animal with minimal or no further processing. They represent the first stage in the by-product value chain and serve as the raw inputs for a wide range of downstream industries. The most commercially significant primary by-products include the following.

Hides and skins 🔗

Hides and skins are among the most economically important primary by-products. The export value of hides and skins exceeds $5 billion annually, and hides from cattle, sheep, goats, and other animals supply tanneries around the world. The quality of a hide-its thickness, grain pattern, and freedom from brands or scars-directly determines its market price, making proper animal husbandry and careful hide removal critical to commercial value.

Bones 🔗

Bones contain valuable components including calcium phosphate, collagen, and the precursors to gelatin. They are collected at slaughterhouses and sold as raw primary by-products to processors who then manufacture a range of secondary products. Bones from younger animals are especially sought after because their higher collagen content makes them better suited for gelatin extraction.

Horns and hooves 🔗

Horns and hooves are rich in keratin, a structural protein. As primary by-products, they are collected and sold to processors who convert them into a variety of manufactured goods. EFSA notes that blood, horns, hoof cuts, and raw milk from live animals that show no signs of communicable disease are all classifiable as standard animal by-products with well-established commercial pathways.

Blood and organs 🔗

Blood collected during slaughter is a protein- and iron-rich primary by-product that must be handled quickly under strict sanitary conditions to retain its commercial value. Organs and glands-including the liver, heart, kidneys, and various endocrine glands-serve both the food market and the pharmaceutical sector. These are primary by-products in their raw state, and their transformation into finished goods defines them as secondary.

Fat and tallow 🔗

Animal fat recovered during processing is another major primary by-product. In its raw form, it is sold to rendering plants and processors. It ultimately finds its way into soaps, lubricants, biodiesel, and food ingredients-all of which are secondary by-products manufactured from this primary raw material.

Secondary by-products: manufactured goods from primary materials 🔗

Secondary by-products are finished or semi-finished products manufactured by processing primary by-products. They represent value addition: the transformation of raw animal materials into products with higher commercial utility. This is where the real economic leverage of the classification system becomes visible.

Leather from hides 🔗

Leather is the most prominent example of a secondary by-product. The tanning process-which converts raw hides into durable, flexible leather-transforms a primary by-product into one of the world’s most traded commodities. The leather industry produces approximately 23-24 billion square feet of leather annually, with an estimated value approaching $50 billion. The International Council of Tanners reports that 65% of finished leather is consumed by the global footwear sector alone, with the remainder going into clothing, automotive interiors, bags, and furniture.

The hide does not become leather on its own. It must pass through beamhouse operations, tanning, post-tanning treatments, drying, and finishing before it qualifies as leather. This multi-step manufacturing process is precisely what distinguishes a secondary by-product from its primary source material.

Gelatin from bones and hides 🔗

On a commercial scale, gelatin is made from by-products of the meat and leather industries, most commonly from pork skins, pork and cattle bones, or split cattle hides. It is produced through a process of hydrolysis-breaking down collagen with heat, acid, or alkali solutions-and then drying and purifying the extracted protein. The resulting gelatin is used extensively in the food industry (confectionery, desserts, dairy products), the pharmaceutical industry (capsule shells, drug delivery systems), and the cosmetics sector. This makes gelatin a textbook secondary by-product: a manufactured good created by processing the primary by-products of bones and hides.

Glue and adhesives from hide trimmings 🔗

Hide trimmings-scraps and lower-grade portions of hides not suitable for leather production-serve as raw materials for animal-based adhesives. Hide glue is made from animal hide and is widely used in woodworking, instrument making, and restoration, prized for its reversibility and strength. The bones and skin of calves, cattle, and pigs are used for the production of gelatin and bone glue, with the acid and alkaline processes determining the type and quality of glue produced. These adhesives are classified as secondary by-products because they are manufactured outputs from primary hide and bone materials.

Bone meal and fertilizers 🔗

Bones that are not directed toward gelatin production can be processed into bone meal-a fine powder rich in calcium and phosphorus-used as a fertilizer and animal feed supplement. This is a secondary by-product manufactured from the primary by-product of raw bones. The processing step that converts a raw bone into a standardized, quality-controlled powder is what defines it as secondary.

Pharmaceutical products from organs and glands 🔗

Various glands and organs undergo sophisticated processing to extract hormones, enzymes, and other bioactive compounds used in medications and health supplements. Insulin derived from pancreatic tissue and heparin extracted from intestinal mucosa are classic examples of secondary by-products manufactured from primary organ materials. These high-value pharmaceutical outputs demonstrate how the secondary classification can encompass products of very high economic and medical significance.

Processed fats: soap, tallow, and biodiesel 🔗

Raw animal fat-a primary by-product-is rendered and refined into tallow, which then becomes a secondary by-product used in soap manufacturing, lubricants, and increasingly in biodiesel production. Animal fat and vegetable oil can be used in the production of alternative energy sources such as biodiesel or renewable fuels, reflecting the expanding economic potential of secondary by-products in the energy sector.

Why the primary-secondary distinction matters commercially 🔗

The commercial classification of animal by-products is not merely a labeling exercise. It has direct implications for how industries are structured, how prices are set, and how businesses plan their investments.

Primary by-products are typically traded as commodities with relatively stable, predictable supply. A meat processing plant can forecast with reasonable accuracy how much hide, bone, and fat it will generate per animal processed. These materials tend to have lower unit profit margins but move in high volumes. Secondary by-products, by contrast, require capital investment in processing facilities, specialized knowledge, and quality control infrastructure. A tannery, a gelatin plant, or a pharmaceutical extraction facility represents a significant commitment-but the margins on finished leather, pharmaceutical-grade gelatin, or bioactive compounds are correspondingly higher.

Leather alone accounts for up to 26% of major slaughterhouses’ earnings globally, illustrating the economic leverage that secondary processing creates. Without the leather industry converting raw hides into finished products, slaughterhouses would face the cost of disposing of millions of hides, directly increasing the cost of meat for consumers. The same economic logic applies across the full range of secondary by-products.

The role of quality in commercial value 🔗

Within each classification, not all materials are equal. The commercial value of a primary by-product depends on several factors that determine its suitability for secondary processing. For hides, the animal’s age, breed, diet, and how carefully the hide was removed and preserved all affect price. A young, grain-fed animal whose hide was cleanly removed and quickly preserved will command premium prices in the leather market, while a damaged or poorly handled hide may only qualify for lower-value secondary uses such as glue production.

For bones, freshness and collagen content are the key variables. For blood and organs, speed of handling and sanitary conditions are critical. These quality considerations directly link the primary and secondary classifications: the better the quality of the primary by-product, the higher-value the secondary product it can yield.

Global regulatory frameworks and commercial classification 🔗

Commercial classification also intersects with regulatory systems. In the European Union, animal by-products are further classified under Regulation (EC) 1069/2009 into Categories 1, 2, and 3, based on public and animal health risk. Category 3 materials-which include hides, skins, horns, and bones from healthy animals-are the primary by-products most commonly entering the commercial processing chain for secondary product manufacture. This risk-based regulatory classification works alongside the commercial primary/secondary framework to govern how materials are handled, transported, and processed.

As defined by AAFCO, a by-product is essentially what remains after the intended product has been made-and many raw commodities, when processed, result in a primary product for human consumption and secondary products for animal consumption or industrial use. This definition aligns well with the commercial classification framework and reflects how the primary-secondary distinction is recognized across different national and international regulatory contexts.

Economic and environmental significance 🔗

The commercial classification system does more than organize materials-it creates value and reduces waste simultaneously. More than 15 million tonnes of animal by-products are produced annually in Europe alone, and directing these materials into structured commercial pathways-rather than treating them as waste-has significant economic and environmental implications. Every tonne of hide converted into leather, or bone converted into gelatin or fertilizer, represents both a revenue stream and a reduction in disposal burden.

The leather industry alone keeps millions of hides out of landfills annually. According to the Leather and Hide Council of America, not processing and using animal hides would result in 33 million unused hides in the US alone and an estimated 6.6 million tons of greenhouse gas emissions annually. This underscores that the commercial classification framework is not just a business tool-it is central to sustainable resource management in the livestock sector.

What do you think? Given that secondary by-products like leather and gelatin add far more economic value than their raw primary sources, should the livestock industry invest more systematically in secondary processing infrastructure-especially in developing countries where much of the raw material is generated? And as biotechnology opens new ways to extract high-value compounds from primary by-products, how might the boundary between primary and secondary classifications evolve in the next decade?

References

1. https://www.efsa.europa.eu/en/topics/animal-by-products
2. https://en.wikipedia.org/wiki/Animal_product
3. https://www.libertyleathergoods.com/leather-industry/
4. https://leather-council.org/introduction-to-leather/perspective-on-leather-its-place-in-the-world/
5. https://www.businessresearchinsights.com/market-reports/leather-market-109199
6. https://en.wikipedia.org/wiki/Gelatin
7. https://en.wikipedia.org/wiki/Animal_glue
8. https://www.shop-schilbach.net/en/c/hide-glue-gelatines-and-co
9. https://faunalytics.org/the-leather-industrys-impact-on-the-environment/
10. https://inspection.canada.ca/en/animal-health/terrestrial-animals/exports/export-policies/2009-9
11. https://www.aafco.org/consumers/understanding-pet-food/byproducts/
12. https://www.sfridoo.com/en/blog/animal-by-products-categories/
13. https://cosh.eco/en/articles/navigating-natural-leather