It was difficult to find a dry eye the first morning of the National Renderers Association (NRA) 68th Annual Convention in October. Before a smaller than usual crowd tackled some tough industry issues, a touching patriotic presentation reminded all in attendance of the tragic terrorist events that struck the United States on September 11, 2001. A salute by a color guard, recitation of the Pledge of Allegiance, and playing of the national anthem while a video recaptured the moments of and after the attacks were all a moving tribute to a moment in time that will never be forgotten.
“September 11 was a defining moment in our lives and by being here today we are all demonstrating the resolve necessary to get on with our lives and support our governments in their determination to root out and defeat the terrorists,” Humphry Koch, NRA first vice chairman, stated after the opening tribute. “The conduct of normal business shows that we will not be intimidated by rabble who live in caves and who treat women like chattels. It is important that we remain steadfast to the end.”
And that is what renderers who traveled to Naples, FL, committed themselves to doing during three days of intense meetings that addressed the many challenges currently being faced by the industry. At times, it was evident that some are frustrated with the uncertainty of the industry’s future and the continued examination and regulation of animal by-products by the U.S. and European governments. But convention speakers provided opportunities and hope in what appears to be a turbulent future.
Opening Session
After Koch welcomed the nearly 200 convention attendees, Mike Langenhorst, NRA chairman, said that no matter the circumstance, there are always hidden opportunities in a crisis.
“What other industry can you think of that’s been subjected to the scrutiny, the ridicule, and the scorn that we have?” Langenhorst questioned. “How many other industries have, in a matter of days, lost markets, not because of economic factors, but because of misinformation and government regulations? I doubt anyone here would not deny that what our industry has gone through is an industry crisis.
“So what are the hidden opportunities?” he continued. “We have relationships with regulators…and have influence on our future. We’ve become recognized as a necessary service industry. And whether it’s burning oil or grease for burner fuel, burning protein meal for steam generation, or producing biodiesel, non-feed uses have become a very viable alternative for our rendered products.”
Langenhorst added that the greatest change he has seen is the joining of forces among the various rendering associations in Europe, Australia, and the United States, and the increase in membership among those associations.
“We must do what’s right for the group, rather than for the individual,” he encouraged.
Mary Chambliss, deputy administrator, Export Credits, Foreign Agriculture Service, next discussed international trade and the relationship the industry has shared with the U.S. Department of Agriculture (USDA).
“Your organization has a long and distinguished history with our Department of Agriculture,” she began. “It is one that we are most proud of. The NRA and USDA have worked together in a collaborative effort to promote exports since 1956.
“Trade is critically important to the long term economic health and prosperity of our food and agriculture sector and your industry,” Chambliss stated. She commended the group on the formation of the World Renderers Organization (WRO) and suggested that renderers inform the public about the valuable service the industry provides.
Chambliss shared what she called “a remarkable achievement,” which is the increase of animal protein exports to China 10-fold in the last five years. She added that the biggest challenge now is to convince other countries that U.S. rendered products are bovine spongiform encephalopathy (BSE) free. USDA is assisting in that area by assembling a team, which will include former U.S. Ambassador Clayton Yeutter, to visit Japan and educate them on the importance and safety of U.S. animal proteins.
USDA’s bioenergy program and government subsidies for the soybean industry were addressed. Currently, soybeans receive a 13 to 14 cents per pound subsidy toward biodiesel production, while rendered products do not.
“Our message is we don’t want subsidies, but we want a level playing field,” Langenhorst told Chambliss.
International issues continued to be the focus with a presentation by Dirk Dobbelaere, European Fat Processors and Renderers Association (EFPRA). He discussed the European renderers view on the current issues, the temporary European Union (EU) ban on feeding animal proteins to all farm animals, and a proposed permanent EU ban on animal proteins in feed processed from animals not fit for human consumption.
Dobbelaere shared with attendees new EU legislation that categorizes raw material and provides the reintroduction of animal proteins processed from animals fit for human consumption in feed. He said EFPRA is pushing for the inclusion of a time and temperature processing statement in the new legislation.
Doug Ward, chairman, WRO, covered BSE issues in Europe.
“The Germans were adamant that they’d never get BSE,” Ward stated. “Now they have over 100 cases.” He praised the U.S. industry for taking the approach that measures are in place to prevent BSE and that no cases have been discovered, and refraining from stating that the United States would “never get it.”
Ward informed attendees that Europe is not a major yellow grease producer and that currently, meat and bone meal in Europe must be incinerated, which creates a hardship in some countries. In Ireland, meat and bone meal is sent to Germany for incineration for environmental reasons at a cost of $200 to $300 a ton. In the United Kingdom, they are finally at a point where more meat and bone meal is incinerated than is being produced.
In regards to EU regulations, Ward warned, “As long as the guy with the problem makes the rules, we are all affected.”
Attendees were treated to a luncheon that featured an inspirational talk by Orion Samuelson, WGN Radio. He told the story of his grandmother who was sent to the United States from Norway by her parents at the age of eight in order that she may have a better life. Samuelson also shared the tale of a young woman he met in June who traveled from Siberia to the United States just to work as a maid in a resort town.
“We are still that land of promise,” he stated.
The afternoon session began with a look at the economic affect further U.S. feed regulations could have on the industry (see Industry Faces Catastrophe If Additional Feed Regulations are Implemented on page 10). Mark Jekanowski, economic consultant, Sparks Companies, illustrated that the 47 billion pounds of raw material processed in 2000 translated into 6.6 billion pounds of meat and bone meal and 226 million pounds of blood meal that could be in jeopardy of being eliminated from animal feed. He discussed three potential regulatory scenarios and the costs associated with them, not only to renderers but also to the livestock industry and consumers.
“Any new regulation could fundamentally change the rendering industry from a value added supplier to a waste removal service,” Jekanowski said.
Closing out the first day’s meeting was a presentation by Mark Purdy, a United Kingdom dairy farmer whose research proves to him that animal proteins are not the cause of BSE. He shared the reasons for his theory, which center around high manganese/low copper levels and oxidizing agents that cause Creutzfeldt-Jakob disease in humans. Purdy’s research gave attendees some ideas for thought, including Don Franco, NRA vice president, scientific services, who stated prion diseases, which BSE has been classified as, could be associated with a co-factor.
“I think your theory is worth further examination based on the co-factor theory,” Franco told Purdy and the audience. Franco added that there is no correlation between BSE and chronic wasting disease.
International Arena
Day two began with an overview of international markets for U.S. renderers. Jim Rudbeck, NRA vice president, International Programs, provided several reasons to export, beginning with that fact that the United States is a mature market. He stated that over the past 10 years, tallow use in soap has dropped 61 percent and use in fatty acids has dropped 17 percent.
Rudbeck’s second reason to export is that 96 percent of the world’s population lives outside North America. He informed attendees that the top 10 export markets for rendered fats and proteins were Mexico, China, Middle East, Japan, European Union (fats and greases), Indonesia (strictly meat and bone meal), Central America/the Caribbean, Taiwan, Russia, and Venezuela/Columbia.
Alberto Celis, NRA regional director, Latin America, provided statistics on Latin American countries, including the amount of rendered products produced and imported. He said the goals of his office are to increase demand for U.S. product in Mexico, Central America/the Caribbean, and Columbia; maintain demand for protein in Venezuela; and to solve governmental issues on fats in that country.
“The problem is we are not only facing disruption in the market, but culture too,” Celis explained. He added that he plans to explore the feasibility for edible fats in Mexico and new uses for U.S. rendered products in the region.
Dr. Yu Yu, NRA regional director, Asia, discussed the opportunities available in his part of the world. He said key factors in this market are biosecurity and economic stability. Yu emphasized that the focus needs to be on steady markets in Asia such as aquaculture, protein supplements, and the pet food industry. He added that the Philippines, Japan, Thailand, Malaysia, and Korea are sensitive to BSE issues because of their large cattle population.
So how should BSE concerns be addressed? Yu suggested U.S. renderers maintain that their products are different, emphasize the firewalls that are in place, and present well-defined scientific research.
“Asia’s government must be assured about the safety of North American meat and bone meal,” Yu stated. He added that aquaculture is an opportunity for two million tons of animal proteins.
“The market [in Asia] is still very good and very bright, but we need to adapt,” he concluded.
Addressing Europe, Africa, and the Middle East was Neville Chandler, NRA director for that region. He began with an explanation of how to market and export a commodity.
“The demand can either be known or one that hasn’t been recognized by the consumer but still needs to be satisfied,” Chandler said. He examined the market in Turkey, where 100,000 metric tons of tallow is being used in the industrial sector.
“The large companies have this perception that using tallow works better [than palm oil] and they like using it,” Chandler stated. “In this case, it’s working for us.” In regards to the feed sector, he believes there is a better market for poultry by-product meal because, “they feel if they took ruminant meat and bone meal, they can’t control it in the feed mill so they don’t take it at all.”
In South Africa, there is competition in the industrial sector from countries such as Australia and New Zealand that have a freight advantage. Chandler added that due to scrapie concerns in the region, meat and bone meal must be certified by the U.S. government to be free of sheep material.
When exporting to Europe, Chandler offered this advice.
“We do have to be in there punching, and I mean punching their lights out,” he emphasized. “Every market we let go without a fight is a market we never seem to regain.” Chandler explained that when dealing with EU regulations, you are actually talking about the European Commission, who are non-elected officials.
Doug Ward made another appearance, this time to present the events at a joint meeting in June of the World Health Organization, the Food and Agriculture Organization, and the Office International des Epizooties (OIE). He pointed out that renderers should not blame the EU for BSE risk category classification since it was developed by the OIE.
“The scientists want this formula,” Ward stated. He also recapped the new EU regulation on labeling animal by-products into three categories, which Ward added was developed using a precautionary principle.
“Everyone still wants to keep animal by-products as an ingredient for safe feed,” he said.
Rudbeck wrapped up the morning’s session by emphasizing the need for the U.S. Congress to approve Trade Promotion Authority and encouraged renderers to contact their representatives about this issue.
“We have to try and change some thinking and educate so these [EU] ideas don’t spread around the world,” Rudbeck said.
All Politics
After a luncheon featuring an entertaining speech by Tom McEwen, a retired sports editor of the Tampa Tribune, convention attendees gathered to discuss the political horizon for the industry.
Joe Jobe, executive director, National Biodiesel Board (NBB), explained the current biodiesel market. He said that there are nine producers on NBB, five of which produce biodiesel from yellow grease. Jobe informed the audience that a new American Society for Testing Materials’ standard on biodiesel was due in December and that the demand for the alternative fuel is increasing.
“Biodiesel has seen a dramatic increase in the number of customers in just the past few years,” he stated, adding that in March 1999, just three fleets were using the fuel. Now there are over 100, many of which are government owned. In 1999, 500,000 gallons of biodiesel was sold; one year later that number jumped to five million gallons. Jobe estimated that 20 million gallons of biodiesel would be sold in 2001. Currently, most of the biodiesel produced is soy-based.
Jobe discussed the properties and environmental issues of biodiesel, including the challenge that cold flow characteristics of biodiesel are inferior to petroleum diesel.
“But that can be changed,” he informed the crowd. Jobe shared the various state legislations that were introduced this year, including a bill in Minnesota that was a blow to rendered products – animal fats were eliminated from the legislation. The session closed before the bill was passed.
Steve Kopperud, senior vice president, Policy Directions, Inc., provided a review of the current political activity in Washington, including the farm bill.
“The farm bill right now is probably as confused as it ever was,” he stated. Kopperud had encouraging words on biodiesel, stating that government agencies working on the president’s energy plan will meet with NRA to ensure animal products are included in alternative energy legislation.
Kopperud said that since the terrorist attacks, “biosecurity” is a new key word in Washington and that the feed and dairy industries are creating “biosecurity task forces” as a precautionary measure.
Dr. John Thorne, managing director, Capitolink, LLC, informed members that he is working with NRA on getting the Environmental Protection Agency (EPA) to approve allowing renderers to use rendered products such as yellow grease as a burner fuel in place of diesel.
“Our goal is to get them to issue a public statement to the states that it is okay for you to switch from diesel fuels to rendered products under certain circumstances,” Thorne said. He explained the three options the industry is considering: 1) a full federal rule making; 2) issuance of a guidance document; or 3) publication of EPA’s position in the Federal Register.
Thorne added that according to EPA, a determination on this issue should come around Thanksgiving.
Ray Kelly, Baker Commodities, Inc., rounded out the day with a discussion on various legislative activities the Pacific Coast Renderers Association (PCRA) has worked towards in California. He emphasized that there are two things to keep in mind when dealing with legislation: don’t get too greedy and work as an association, not individual companies.
“Probably the biggest benefit from these [legislative] activities is the people we’ve met,” Kelly said. “They have found out who we are and support us when they know the situation is right.”
Kelly shared his experience at the NRA Congressional Fly-In earlier this year.
“Out of 14 meetings, 13 people were extremely interested,” he said. “Eighty percent of those didn’t know anything about the rendering industry. I think the key thing is they now have a file on the industry.”
Business Matters
NRA committee meetings were held on the third day of the convention.
It was announced that EPA was still a month away from deciding what direction to go on the Effluent Limitation Guidelines issue. The agency is very receptive to the rendering industry putting voluntary best management practices in place to address some of EPA’s concerns and avoid a regulation. Thorne told the committee he would not be surprised if a proposed rule was issued with many options. That would allow EPA to receive comments and then choose one or two options as a final rule. He explained a proposed rule was expected sometime in December and that several more proposals could come to play before a final rule is issued, which Thorne estimated to be in December 2002.
The Legislative Action Committee discussed holding an annual Congressional Fly-in, a bill addressing additional feeding bans sponsored by Senator Durbin of Illinois that is currently on hold, and the FDA’s hearing on October 30 regarding current feed regulations. One question FDA is asking at the hearing is whether renderers should be federally licensed. The committee was mixed.
“I think licensing takes it from a reactionary level to a proactive reaction,” Langenhorst suggested. Canadian renderers offered their opinion.
“It’s been a positive experience in Canada to be a licensed rendering facility,” Andre Couture, Sanimal, Inc., said.
But several California renderers were hesitant about being federally licensed and felt state licensing was sufficient. Ray Kelly provided one reason.
“From California, it’s a long way to Washington, DC,” he stated.
In the end, all but one committee member voted to support FDA licensing of rendering facilities.
The International Market Development Committee (IMDC) decided to develop education materials to assist NRA regional directors in the promotion of tallow for soap and industrial sectors. Committee Chairman Mike Reiser, Valley Proteins, thanked Birmingham Hide and Tallow, G.A. Wintzer and Sons, PCRA, and the Eastern Region for contributions to the IMDC.
NRA will hold their spring meeting in Vancouver, BC, Canada, April 24-26, 2002, and their next annual convention October 22-26, 2002, in Santa Barbara, CA.
December 2001 Render