Lard

Lard Global Market Outlook:

• Lard constitutes about 33.3 percent of the total animal fat production and about 6 percent of the global production of fats and oils. Global lard production has increased at a CAGR of about 2.6 percent over a five-year period. Demand has been driven by the preference for lard in place of butter in baked goods by consumers in rapidly growing regions, like APAC

• Lard utilized for biodiesel in the US accounts for about 2 percent of the biodiesel feedstock, which amounts to approx. 11,642 MT in 2021–2022 E. This is about 3.2 percent of the total lard production in the US. Within the EU, categories 1 and 3 animal fats are preferred for use as biodiesel feedstock. Germany is the major region in the EU, utilizing lard for biodiesel

Global Supply–Demand Analysis on Lard 

• The global lard production has risen at a CAGR of approx. 4 percent over a five-year period. Lard constitutes to approx. 6 percent of the global production volume of oils and fats

• Demand has been driven by preference for lard, in place of butter, in baked goods by consumers in rapidly growing regions like the APAC

• Lard as a category of animal fat constitutes 6 percent of the volume of global fats and oils production

• In the EU, pig meat production declined, due to a decrease in slaughter rates. Germany experienced the biggest year-over-year decline in 2022, falling 10.1 percent

• This shut down has equated to 5-8% of the total pork production wiped off in the USA. Few small slaughterhouses also closed for maintenance.

Porter's Analysis on Lard 

Supplier Power

• Pig farmers are the suppliers of pigs for slaughter and rendering into lard

• Most major lard suppliers are either vertically integrated or contract pig farmers to ensure sustained supply

• Due to the relative abundance of pig farmers in major lard producing countries, supplier power is low

Barriers to New Entrants

• The US and EU lard markets are fairly consolidated by key suppliers, like Darling Ingredients, Ten Kate, and Saria Industries

• The Asian market could be more fragmented, but acquisitions and mergers by top suppliers are also likely to take place

• The Asian market represents the region with the most potential for entry of new suppliers; so, barriers to entry are moderate

Intensity of Rivalry

• The primary end-use of lard is in the food industry, particularly for baking, as a cooking fat or spread for breads

• Lard is also utilized as biodiesel, but this application is limited

• Supply of lard for the food industry is high, due to high pork demand, the former being a by-product of the latter

• There can be competition between different buyers within the bakery industry, but intensity of rivalry is low

Threat of Substitutes

• Butter and oils are substitutes for lard within the food industry

• Several crops, like soybean and animal fats like tallow, white choice grease, and others, are substitutes for lard as biodiesel feedstock

• Lard accounts for about 4.1 percent of fats and oils produced globally

Buyer Power

• Supplier market for lard is fairly consolidated in the US and EU

• The availability of substitutes for lard in addition to potential fragmented suppliers in APAC weakens the supplier power

• Buyer power can be considered moderate