Tallow is created by using the 'render fat' job at a kitchen and is made from fat created from butchered animals. Tallow is used to make soap, and can also be cooked into prepared meals. Since tallow does not have quality levels, rendering fat is a good, but slow, way to train a cook. However, this also means that forbidding tallow from the kitchen menu is a must for players looking to create expensive Lavish Meals to trade or to help keep dwarves happy.
Note that although fat will be created as a stack, the 'render fat' job will only render one piece of fat at a time, effectively splitting the stack into a bunch of single pieces of tallow.
It is stored in food stockpiles and found under fat. Tallow can be stored without a container, but if barrels are available dwarves will fill up to 10 units of random tallow in one barrel.