By Tina Caparella
What a difference a year makes.
When renderers gathered in October 2005 for the National Renderers Association (NRA) annual convention, they fervently hashed out how best to respond to a newly released Food and Drug Administration (FDA) proposed rule to amend the agency’s animal feed regulations. A year later, after an updated Informa Economics survey and industry comments were submitted in response to the FDA proposal, renderers were more optimistic about the future of their industry as they met in the picturesque coastal town of Laguna Niguel, CA, for NRA’s 73rd Annual Convention in late October.
“That which seemed so eminent just one year ago may now never see the light of day thanks to the industry’s efforts working with the NRA,” David Kaluzny II, NRA Chairman, stated at the convention’s opening session. “They [FDA] have admitted that the rendering industry’s data pointed to flaws in the FDA studies and their subsequent proposed rule. The FDA is now back to square one, so to speak, re-evaluating with a new study of their own. Given how many times we felt a final rule was just around the corner, this is good news.” (Kaluzny’s entire opening remarks can be read on page 18, “From the Association.”)
The industry believes, however, that FDA not taking any action on the proposed rule is not acceptable and makes it difficult for renderers to move forward with capital improvements and finding solutions to situations such as the disposal crisis in California over the summer. Industry leaders don’t think there is any pressure on FDA to go forward with their rule just because Canada recently banned specified risk materials (SRMs) from cattle in all animal feeds, pet food, and fertilizer.
As for the effect the new impending Canadian SRM ban will have on Canadian renderers, Humphry Koch, West Coast Reduction, provided some insight. SRM material will have to be separated and destroyed, preferably by incineration even though there is currently no capacity in Canada. SRM material can be landfilled, but since landfills fall under provincial jurisdiction, that option may not be available in some provinces. Other disposal options are on-farm composting and alkaline hydrolysis. The preferred option that Canadian renderers have put forth is that all SRMs be rendered and then disposed of by landfill, but so far the industry’s recommendation has not received much support.
“It will be interesting to see what happens come July 12 [2007],” Koch commented. The regulation provides for $80 million (Canadian) in funds to assist with compliance, but there has been no announcement on how companies will qualify for the financial assistance.
Feed bans weren’t the only issue addressed at this year’s convention.
Steve Kopperud, Policy Directions, informed the Environmental Committee that three significant agriculture groups – the National Association of State Departments of Agriculture, the U.S. Animal Health Association, and the National Association of State Public Health Veterinarians – have all agreed that the U.S. Department of Agriculture must head a joint effort with other government agencies on addressing a national animal disposal policy. Kopperud also noted that the Environmental Protection Agency has recently revised the national air quality standards (see “Newsline,” page 8), the “most expensive, most sweeping reg EPA has ever done.”
Kopperud emphasized the importance of next June’s NRA congressional fly-in due to the November 2006 election bringing in many new members of Congress that need to be educated on the rendering industry.
“Your faces in Washington, talking to your representatives, is critical,” he stated.
One issue that drew more questions than answers was a new alternative fuel mixture program that could provide tax credits for renderers who use yellow grease or tallow as a burner fuel. Rich Little, Internal Revenue Service (IRS), tried to explain the program and its strict requirements. Besides a credit for biodiesel that meets ASTM International Standard D6751, the program provides a credit for any alternative fuel – rendered fats, greases, and oils qualify as a liquid hydrocarbon derived from biomass – that is blended with a taxable fuel such as gasoline, diesel, and kerosene. Before the credit can be taken, producers, importers, and blenders must register with the IRS on one of a number of forms. Since the program became effective October 1, 2006, the IRS has received numerous questions from the rendering industry and is trying to sort out the answers.
Continuing the focus on alternative fuels was Joe Jobe, chief executive officer, National Biodiesel Board (NBB), who shared some facts on biodiesel:
• 86 plants are currently in operation, with most (34) being small facilities producing less than five million gallons per year;
• 65 additional plants are under physical construction; and
• Iowa, Texas, and Minnesota are the top three producing states, with Iowa and Texas battling it out for the number one position.
NBB is “harping” on the importance of their BQ-9000 certification because they believe it is necessary at this stage of the industry for quality assurance. There are currently 14 companies certified in the quality program. To help ensure fuel quality at the state level, NBB is training state weights and measures personnel on enforcing biodiesel producers to meet the ASTM International standard for biodiesel. Jobe also reminded renderers that in order to be eligible for the IRS’s tax credit on biodiesel, the fuel must be certified that it meets ASTM standards.
Agroterrorism and animal diseases were also addressed at the convention, beginning with Dr. David Meeker, NRA Scientific Services, who informed attendees that since the terrorist attacks of September 11, 2001, agroterrorism is getting a lot more attention within government. Although there have only been 12 documented agroterrorism cases since 1912, there have been 30 major terrorist attacks since September 2001. While there is currently no actual threat, there is healthy skepticism to secure funding for animal disease infrastructure and needed research. (See “Agroterrorism, Does It Impact Rendering?” on page 16.)
Lester Crawford, former FDA commissioner, discussed the future of food and feed regulations as they relate to animal diseases. He said there are 13 different countries that have bovine spongiform encephalopathy (BSE) and that the disease cannot be forgotten about in the United States. Crawford explained that chronic wasting disease is highly infectious and is a disease that needs to be managed. Other issues he advised renderers to watch were antibiotic resistance, cloning, and organic foods.
“I am amazed, always, how this [organic foods] crops up,” Crawford commented. “But I feel it is here to stay.”
Inspirational Motivators
Besides hashing out important issues, renderers listened to some impressive leaders from other industries. National Cattlemen’s Beef Association (NCBA) President Mike John talked about changes in the beef industry, not only within the United States, but globally.
“Everything that happens in the world has relevance in the price and the probability of our production and we just can’t ignore it,” John stated. With regards to animal identification, NCBA’s policy is that the industry will move cautiously and it needs to be a free enterprise with cattlemen governing themselves. John said USDA is very slowly agreeing to NCBA’s ideas on animal identification.
In the political arena, John pointed out that there is not one U.S. congressional district where the majority of the population is rural.
“That ought to scare the heck out of some of us,” John remarked. “That is the dilemma we face on Capitol Hill.” He also emphasized to renderers that he is their champion in the beef industry.
Trent Loos, a Nebraska rancher, radio show host, and the convention’s keynote speaker, spoke passionately about the agriculture industry and how consumers have to be told about the safety of the food they eat.
“The average consumer today will take the time to read a bumper sticker, not a 17-page science report,” he said. “So our challenge truly is, if we are going to educate 300 million Americans, we better learn how to do it in the form of a bumper sticker, not a 17-page science report.” Loos declared that the greatest products renderers produce are not the animal proteins or fats, but the young people.
“How many of you are third, fourth, fifth generation renderers in this country because you understand the pride that your family has had in this business of contributing something that is of value, something that people need, our communities need?” he asked. “Kids that come from these families that are centered around what’s really important are the most valuable product we produce.” Loos is a sixth-generation U.S. farmer.
Another inspirational speaker was Tom Buchino who used his experiences from 23 years serving in the U.S. Army Special Forces as examples of how to create leaders using these four cornerstones: courage, competence, candor, and commitment.
“Develop your team in the likeness of yourself,” Buchino encouraged, but then warned, “It takes a long time to build your reputation as a leader and about 30 seconds to lose it.”
An Overview of Overseas
The international market is important to the rendering industry, whether through exports or regulatory influences, and a team of experts provided some insight into what is happening in other parts of the world.
Niels Leth Nielson, president, European Fat Processors and Renderers Association (EFPRA), said there has been an increase in the use of protein meals in pet food and fertilizer over incineration in the European Union (EU), and that there is a market for tallow use in biodiesel. But the reintroduction of non-ruminant protein meals in farm animal food in Europe won’t be easy.
Discussing issues down under was Paul Stenzel, president, Australian Renderers Association, who explained that China is Australia’s biggest growth market, but that Australian renderers need to determine why exports to its two primary markets, Indonesia and Vietnam, have dropped off so significantly this year.
Stenzel did not have good news about Australia’s biodiesel industry, which is no longer the favorite fuel down under. One reason may be that tax credits for biodiesel used in agriculture ceased several months ago and there is no reinstatement foreseen in the near future.
NRA Regional Director Neville Chandler revisited the ups and downs of the European market, including the increase in tallow imports in Nigeria. However, the Egyptian market remains a challenge now that avian influenza has emerged in that country. Rumors have spread in Egypt that the cause of the disease was from imported poultry meal, soybean meal, and possibly from some imported U.S. poultry. A high level Egyptian delegation was scheduled to visit the United States at the end of November to examine how avian influenza and BSE are handled in this country.
“I think it’s important that we show these people what we do here and clarify a few issues,” Chandler commented. On an up note, there are opportunities in Iran where six million metric tons of animal feed is produced annually.
Chandler also touched on the European biodiesel market, where yellow grease does not fall under the animal by-products regulation requirements when it is imported as a biodiesel feedstock. The driving force behind the increase in biodiesel production is the usage target put in place by the European governments: 5.75 percent by 2010. Chandler estimates a potential of 14 plants from nine companies in the EU that would use yellow grease and/or tallow for biodiesel production.
Shifting to the Latin American market was NRA Regional Director German Davalos, who sees an increased opportunity for U.S. rendered products in the aquaculture industry due to the high price of fish meal. Several industry presentations in such areas as Bogata, Panama City, and Peru have resulted in an increased interest in rendered proteins.
Asia was highlighted next as NRA Regional Director Dr. Yu Yu declared that Indonesia is open to almost all rendered products, but China remains the most difficult market to reopen to U.S. proteins and fats. He, too, emphasized the opportunities in the aquaculture market, this time in Asia. Vietnam is joining the World Trade Organization in 2007 so they can export more seafood, and there is a requirement in China for four million metric tons of fish meal per year, most of which is imported. China produced nearly 70 percent of the global aquaculture in 2004.
At the association’s board meeting, praise was given to the NRA staff for their dedication and hard work for the good of the industry, especially educating the U.S. government on the economical impacts of additional feed regulations and actively cultivating international markets for U.S. rendered products. The NRA will hold its next annual convention October 23-27, 2007, in Miami, FL.
December 2006 Render