By Tina Caparella
The Pacific Coast Renderers Association (PCRA) honored their alumni in February during the 71st Annual Convention in Carmel, CA. While the past members enjoyed reminiscing with the group during a dinner celebration, they also closely examined the challenges renderers face today during the association’s meeting.
Rich Matteis, California Grain and Feed Association, and registered lobbyist for PCRA, started off the day by discussing legislative activities in the state.
“We did have one piece of legislation this year sponsored by PCRA,” Matteis began, explaining an amendment to the California rendering law that was passed now clarifies rendering to mean “all recycling processing, and conversion of animal and fish materials and carcasses and inedible kitchen grease into fats, oils, proteins, and other products that are used in the animal, poultry, and pet food industries and other industries.”
Another regulatory issue Matteis discussed was California’s sales tax exemption for agriculture, of which renderers are covered as a food processor. He explained that diesel fuel used to bring materials and supplies to a food processing site or used on-site may be exempt from state sales tax.
“So if you’re delivering a finished product to Foster Farms, that movement could be diesel sales tax exempt,” Matteis said, adding that sales tax exemption forms are available from diesel distributors. He further explained that renderers should keep documentation of the diesel use that is exempt, or make estimates on what percentage of product movement and on-site use is exempt.
“As a food processor, you’re allowed to get materials to your facility for processing so that diesel would be sales tax exempt,” commented Matteis. “If you’re using front end loaders or diesel generators, or some folks have diesel-fired boilers, all that diesel would be sales tax exempt.” Although the legislation was approved in July 2002, the effective date of the exemption is September 1, 2001, allowing refunds for use dating back to then. Renderers must go through their diesel distributor to file for sales tax refunds.
Switching to a more serious matter, Matteis discussed the challenges in eradicating exotic Newcastle disease (END) in southern California.
“It is in the opinion of all veterinarians that we have never had an animal disease outbreak like this before, of this characteristic,” said Matteis, who estimated there to be three million backyard poultry on 50,000 to 60,000 premises, most of which are game fowl used for illegal activity such as cock fighting.
“Our state veterinarian, Richard Breitmeyer, believes that the disease increased geometrically after Thanksgiving because that’s the start of the big fighting season, which we did not know,” he added. “At that time, a lot of movement of birds, lots of people-to-people contact and bird contact, just spread the disease everywhere.” Estimates are that in order to completely eradicate the disease, it will take $200 million and 3,000 to 3,500 people to visit all the premises and depopulate.
Matteis explained the various sources of contamination, which ranges from people such as visitors, employees, and suppliers, to equipment like trucks and hammers.
“It only takes one contact to bring the disease to your facility,” he warned. “There has to be an intervention.” Figures presented at the meeting have 1,600 state and federal employees working to eradicate the disease that has affected 1,800 backyard and 19 commercial premises totaling nearly three million layers.
“California was the third largest producer of eggs,” commented Matteis. “Now, just because of this quarantine in six weeks, we’ve dropped to the fifth largest producer and I expect we will see other finds in commercial flocks.” He stressed that there is a need for biosecurity and that the U.S. Department of Agriculture is providing pressure washers at no charge while supplies last.
Although the disease has not been detected in central and northern California, Matteis said the area is definitely at risk and that surveillance testing of backyard flocks near commercial poultry operations is being conducted. Currently there is no timetable for disease eradication, but the last END outbreak in the 1970s lasted two-and-a-half years.
Matteis next discussed upcoming issues, which included new proposed fees for confined animal feeding operations and other agriculture entities, a repeal of the agriculture sales tax exemption, and concern about agriculture fund reserves, including the grease theft program, being targeted for other uses. He said the Republicans in California’s legislature are working at delaying what they call “job killer” bills that relate to workman’s compensation and the 40-hour workweek (in California, a law has been passed to require employers to pay overtime after eight hours in a work day as opposed to federal regulation that requires overtime after 40 hours in a week).
The Homeland Security Act was addressed, including the provision that those who sell food or feed must register with the federal government.
“There is significant document reporting requirements that you would have to keep track of,” Matteis said. “We will be filing comments on the federal proposal.”
Gary Conover, Western United Dairymen (WUD), spoke next. He began by voicing concerns over a California senator’s approach to improving the air quality in the state’s central valley.
“We do have an air problem, we’ve known that for a long time,” Conover stated. “One of the solutions that the legislature appears to believe is that it is ag’s responsibility to take care of cleaning the air, not so much the automobile.” He explained that the nitrogen oxide emissions from the multitude of vehicles in the valley are far worse than any farm equipment. WUD is posting the 10 bills addressing the air quality issue on their Web site at www.westernuniteddairymen.com.
“The way I read this…it requires the district to follow-up on a complaint regarding a nuisance odor emanating from an agricultural operation,” added Matteis. “It may impact a lot of you.”
Conover added additional comment on California’s legislative activities, including proposed new discharge fees that could affect the nearly 300,000 discharge points in the state. He said there are 33 new state legislators this year that require educating and touched on the various bills that have been introduced that could affect the dairy industry.
According to Conover, the dairy industry is receiving less money for its product, even though the number of milk cows nationally, the amount of milk from each cow, and milk prices in the stores have all increased. He shared a new program WUD has developed that educates future dairy leaders on pooling and pricing, state and federal politics, environmental issues, and biotechnology and labeling issues. The program just graduated their first class last year.
“We sent these young people back to their ranches with more information than they even knew was out there,” Conover stated. “What we’re finding we’ve known for a long time – that we need to educate our own producers as to some of the issues coming down.”
Dennis Thompson, California Department of Food and Agriculture (CDFA), next examined the past year’s activities of the state’s rendering/grease theft program, including a case involving a U.S. Department of Agriculture-inspected meat processing plant that was illegally disposing of their by-products into the trash. Initially, it was proposed to fine the company $1,000 and place them on a three-year probation, but the company finally agreed to a $14,000 fine with no probation. Thompson also spoke of an investigation into two counties in southern California that were receiving livestock into their landfills. The CDFA informed the landfills of state law prohibiting that practice and it was immediately stopped.
One of the biggest activities in the past year of special interest to renderers, according to Thompson, is the collaboration of CDFA and the Grease Transporters Task Force, which is an organization comprised of representatives from various county health and environmental departments, the California and U.S. Environmental Protection Agencies, and a number of county district attorney offices.
“They’ve been focusing on companies that pump traps and are highly suspected, and in some cases been caught and convicted, of illegally dumping,” Thompson commented. “They came to us because they knew we regulated many aspects of the rendering industry and those involved with kitchen grease. They’ve been consulting us pretty regularly.
“As a result of their activities, there have been some convictions,” he continued. “In one case, the company was fined $27,000 and had to pay $7,700 in restitution costs for illegally dumping into public waterways. The employee who was most heavily involved in those actions was also sentenced to 90 days in jail and had to pay a $13,500 fine.” He explained another company was also prosecuted and convicted, resulting in a $54,000 fine and reimbursement of costs and the employee again being sentenced to 90 days in jail.
“This task force continues to meet and continues to scrutinize companies that are pumping traps,” Thompson commented. “They have a lot of clout and a lot of interest and they’re highly suspicious and have reason to believe that there is a lot of illegal dumping of what’s pumped out of traps. They’re determined to change that.”
Thompson said licensing fees for the grease program have once again been reduced due to a large surplus in the program’s fund, which has an annual budget of $176,000. The fees that took effect January 1, 2003, are $750 per renderer, $375 per collection center, plus $75 per vehicle up to a maximum of $750, and $75 per vehicle for transporters.
END was addressed next, with Thompson stating, “I think it’s very safe to say that the United States has probably never had an epidemic like this to address before.” He commented that the enormous backyard bird population and the underground movement of trading and selling those birds make the situation more difficult.
“Past epidemics were difficult enough to address where we had commercial operations that were well defined and you could find out everything about what comes in and what goes out,” Thompson said. “That just isn’t true with what’s going on in this epidemic.” An incident command post has been established in Modesto in California’s central valley as a preventative measure and officials are working on establishing inspection stations along Interstate 5, the state’s major north/south corridor, in an effort to keep backyard birds from being transported out of the quarantined area.
Thompson shared information on another animal disease in California that has received little publicity – bovine tuberculosis, which has been detected in three central valley herds. He reported that as of February 16, 2003, over 167,000 cattle had been tested. Despite a number of CDFA resources being devoted to the tuberculosis epidemic, a lot more would be working on the situation if not for the END outbreak.
Ross Hamilton, Darling International, Inc., followed with a presentation on animal by-product and dead stock disposal issues. He addressed the challenges, which include biosecurity issues, feed use controls, consumer bias against meat and bone meal, and a smaller amount of by-products being received by renderers due to economics and finished product restrictions. Hamilton cited a Sparks Companies study that determined restricted-use meat and bone meal makes up the largest category of protein produced each year in the United States, and pointed out that a recently published poll in Feed Management magazine shows meat and bone meal use among U.S. feed mills is declining (see “Meat and Bone Meal Use Plummets”). Exports of product, however, increased last year, he stated.
With regards to disposal options, Hamilton touched on the various methods being used or considered, which include rendering, composting, incineration, and landfilling.
“Rendering, I think, is still generally listed first in most states,” he commented. “In some cases, landfilling has been added. Most landfills really don’t want the material, but it seems to be almost a company-by-company issue.” He stressed that by using disposal methods other than rendering, which is state and federally regulated, there is no conformity in the disposal.
“We’re seeing methods that could be acceptable being shortcutted by the individuals performing them,” Hamilton stated. “Our bottom line is if it’s going to these alternatives and not rendering, then they’re not uniformly regulated across the country.” He touched on the implications of composting, which is being promoted by university extension programs as cheap and easy but is often not done properly.
Hamilton explained that rendering is uniquely structured to handle materials safely and responsibly, killing pathogens quickly with its heat treatment process as determined in a 2001 study by the University of Illinois. He highlighted a United Kingdom Department of Health study conducted after that country’s outbreak of foot and mouth disease. It concluded rendering is the optimal disposal method.
As for non-feed uses of rendered products, Hamilton touched on markets such as industrial and biofuels for extracted tallow, and incineration for fuel or landfilling for defatted residue. He briefly touched on a fluidized-bed technology that may be useful for burning carcasses to generate energy.
“Rendering is the best available control technology for addressing disposal of animal by-products and mortalities,” commented Hamilton. “But a significant shift in raw material disposal where it’s not going into rendering rates some very valid biosecurity and environmental issues. I maintain we’re part of the solution.”
Hamilton next addressed an Animal and Plant Health Inspection Service advance notice of proposed rulemaking (ANPR) that addresses disposal of downer cattle and dead stock. He highlighted several key questions the ANPR asks, including whether rendering is an effective and safe disposal method for these products.
“It is a very complex request,” Hamilton said. “There are a lot of questions in this ANPR.” The deadline for comments to the ANPR was March 24, 2003.
Tom Cook, National Renderers Association (NRA), further added comment on the proposed regulation.
“We have a story to tell with this ANPR,” he stated. Cook then switched the topic to the European Union (EU) animal by-products regulation scheduled to take effect May 1, 2003. At the request of NRA, Agriculture Secretary Ann Veneman wrote a letter to the EU addressing renderers’ concerns about the regulation, which would basically cut off exports of U.S. rendered products to the EU.
Another EU topic Cook addressed was the geographical bovine spongiform encephalopathy (BSE) risk (GBR) category system, which categorizes countries based on their BSE risk. NRA sent a coalition letter signed by 13 agriculture organizations to Veneman requesting the U.S. government establish its own numerical GBR category system.
“I’m not sure it’s a doable thing, but it sounds good, it feels good, and I think it will push our government to go to the OIE [Office International des Epizooties] and get an international system in place that will preempt the European’s attempt to do that,” Cook added.
Turning back to U.S. issues, Cook said NRA recently submitted comments to a Food and Drug Administration (FDA) ANPR on the feed ban, has met with FDA Deputy Commissioner Dr. Lester Crawford and Center for Veterinary Medicine Director Dr. Stephen Sundlof on chronic wasting disease policy, and is anticipating the release of a fuel switching technical guideline paper from the Environmental Protection Agency at any time. NRA is also awaiting publication of a final rule for the fiscal year 2003 U.S. Department of Agriculture Bioenergy Program. Cook stated that over 2,000 comments were submitted, including NRA’s that sought equity in treatment of feedstocks.
Jim Rudbeck, NRA International Programs, started his presentation by exclaiming, “This past year was a super year for exports!” He pointed out that exports rose by 25 percent, thanks to better acceptability of U.S. products in markets such as Asia and some economies that are favorable to trade. Rudbeck pointed out that another key to the upswing is that Australia and New Zealand are suffering a drought so U.S. renderers have picked up some of their markets.
“Meat and bone meal exports are getting as important as tallow,” commented Rudbeck, who highlighted that Asia accounted for 60 percent of meat and bone meal exports. He provided additional export figures, including those countries where meal exports have dropped, such as Japan where they have “closed the door” on meat and bone meal since discovering BSE in their herds.
“This has been a particular blow to our friends in Canada,” Rudbeck stated. Tallow markets were covered next, where Canada has doubled their exports to China. He then thanked the PCRA and its members for their support of the International Market Development Committee (IMDC), which has received $1.5 million in matching government funds, with half being spent on the promotion of rendered products in the Asian market.
Humphry Koch, NRA chairman, started with a little humor, sharing a comment he received recently when explaining to a golf professional what he did for a living.
“Rendering takes a lot of guts,” was the young fellow’s thought, said Koch. On a more serious note, he recognized the hard work Cook and Rudbeck perform on behalf of the NRA members and recognized new NRA staff members Peter Nersessian, Scientific Services, and Kent Swisher, who is filling Rudbeck’s position upon his March retirement.
“I am proud of our industry, our association, and its people,” commented Koch. He addressed the various challenges the industry faces, including a requirement by the U.S. government for domestic and international producers of food and animal feed to register by the end of the year.
“The implications could be significant if one poses to consider how we collect our raw material,” Koch stated. “We will need to keep a careful watch of what unfolds.”
The afternoon session began with a discussion by Tony Cone, Westhoff, Cone, Holmstedt, on tax exempt bonds for solid waste projects. He said the program allows a company to borrow low-interest money for the purchase of most depreciable assets with a minimum cost of $2 million.
“It represents an opportunity for this industry that I don’t think any renderers have taken advantage of,” commented Cone.
Wrapping up the day was PCRA’s business meeting. Ray Kelly, Baker Commodities, brought to the members’ attention a letter submitted by the CDFA to FDA in response to its feed ban ANPR. The wording was of concern to renderers, which read in part similar to comments submitted by the Association of American Feed Control Officials to the same ANPR. Kelly stated that a group of various industries, including rendering, has assembled to address the letter.
Jeanette Caito, PCRA secretary, introduced new PCRA members: Alfa Laval; Caito Fisheries; Harris Bank; SCEC Air Quality Specialists; Superior Jali International; Transworld Systems; and Westhoff, Cone, Holmstedt. Cook spoke about the value of renderers participating in NRA’s upcoming Third Congressional Fly-In in Washington, DC, and it was decided PCRA would arrange a similar visit to California’s capitol to educate the state’s legislators on the industry.
As was done last year, a large number of PCRA member companies donated a total of $17,500 to the IMDC.
Next year’s convention is scheduled for February 20-22, 2003, in Carmel, CA.
April 2003 Render