That's a very good question. It seems that every scrap of an animal is today used for some purpose: meat, hide for leather, bones ground for various puposes. The only part I could think must be waste is the large intestine and perhaps blood; since madcow disease perhaps CNS/brain. But yes, I think a large incinerator would be necessary for some entrails that cannot be rendered into anything useful.
I have driven past a feedlot / slaughterhouse way out in the country many times. They have a small hotel, restaurant and landing strip. People actually fly in to eat the "freshest steaks anywhere!" I could never eat or stay there because even in winter cold, the smell of the air for miles is horrible. It is not just condensed urine + manure + mud, nor is it death or decomposition, or anything I could ever specify. I think you may have identified it, it is likely the smell of an industrial incinerator burning entrails and parts.