Cargill studies beef tallow for Brazil biodiesel as US tariffs bite

• U.S. tariffs on Brazilian beef tallow currently stand at 10% but could rise, prompting Cargill to seek new domestic uses for the feedstock
• One of Cargill's three Brazilian biodiesel plants acquired from Granol in 2023 previously used tallow, indicating operational feasibility exists
• Beef tallow ranks third among Brazil's biodiesel feedstocks after soybean oil, with Cargill's trader noting tariffs 'opened eyes' to finding new markets beyond U.S. exports

Summary: Cargill Explores Beef Tallow for Brazil Biodiesel Amid U.S. Tariff Pressures

Key Development:

Cargill is evaluating the feasibility of using beef tallow as a feedstock for biodiesel production in Brazil, responding to U.S. tariffs that have diminished the attractiveness of exporting the animal fat to American markets.

Key Facts:

• The U.S.-based agricultural giant does not currently use beef tallow for biodiesel but has initiated a viability assessment project
• Cargill trader Paulo Cardoso confirmed the study at a São Paulo event on June 16
• One of three biodiesel plants Cargill acquired from Brazilian firm Granol in 2023 previously processed tallow, demonstrating operational capability
• U.S. tariffs on Brazilian beef tallow currently stand at 10%, with potential increases ahead according to meat packers association Abrafrigo

Market Context:

• Soybean oil remains Brazil's primary biodiesel feedstock, while beef tallow ranks third nationally
• Cargill's Brazil division previously served as a major tallow exporter to the United States
• According to Cardoso, U.S. taxation has "opened eyes" to the necessity of diversifying tallow markets beyond American exports

Implications:

This strategic pivot reflects broader trade tensions affecting agricultural commodities and renewable fuel markets. The shift could strengthen Brazil's domestic biodiesel sector while reducing reliance on U.S. export markets. For Cargill, utilizing existing infrastructure to process tallow domestically represents a practical response to changing trade dynamics, potentially creating new revenue streams in Brazil's growing renewable energy market.