Having worked in a meat processing plant, I can assure you that no humans would want to eat anything that goes into "rendering" for use in pet food.

I'm not talking about offal, tripe, small goods, etc., all of which have markets for human consumption. Some of those items are high margin, too.

There are markets somewhere in the world for just about every last bit of an animal. The only stuff that goes into pet food is stuff that has been contaminated or that has no higher margin use in other applications. Basically, pets get the waste.

Fun fact -- The highest margin product in a beef house is fetal calf blood. It typically goes for about $400/liter and can sometimes spike up to $1000/liter.