While seeming to acknowledge the apparent extremely low incidence of BSE in the United States, the FDA bowed to pressure to “do something” and proposed to prohibit brains and spinal cords from cattle 30 months of age or older from being used in all animal feed, including non-food animals (see December 2005 Render). They also proposed to ban all dead and downer animals (referred to as “cattle not inspected and passed for human consumption”) from any feed unless the brains and spinal cords are removed. FDA termed these materials “cattle materials prohibited from animal feed,” or CMPAF – a “subset of SRMs [specified risk materials].”
The FDA seemed to want to make people on both sides of the issue happy by focusing on brain and spinal cord removal as an effective approach for achieving additional animal and public health protection while minimizing the economic, environmental, and public health concerns associated with disposal of the full list of SRMs. One positive part of the official action was to allow 75 days to prepare comments on the proposal.
If finalized as written, the proposed rule would also require tallow derived from CMPAF materials and used for feed to meet the World Organization for Animal Health, or OIE, standard for global trade of 0.15 percent maximum insoluble impurities, require separate equipment or containers to handle prohibited material once it has been separated from other cattle materials, require labeling of CMPAF materials with the statement “Do not feed to animals,” require marking (with dye) CMPAF materials, and force renderers to establish and maintain records sufficient to track the prohibited materials.
Plate waste, blood and blood products, gelatin, milk and milk products, and poultry litter are all permitted in cattle feed now and the proposed rule did not address these items, though the FDA asked for comments on that decision as well.
The FDA acknowledged most of the National Renderers Association’s (NRA’s) comments on the 2004 ANPR and used part of the received data in their justification of the “short list” of materials to be banned. However, their estimates greatly differed from NRA’s on percentage of cattle currently rendered and volume of prohibited materials. The biggest discrepancy is the amount of CMPAF material that will need to be disposed of under the proposed rule. NRA has maintained that renderers would be able to remove brains and spinal cord from very few dead and downer cattle so almost all of them would be diverted to alternate disposal methods. NRA disagreed with FDA’s statement that the proposed rule will “not trigger wider, rippling effects through the renderers’ situation.”
NRA took issue with FDA’s analysis and the NRA Transmissible Spongiform Encephalopathy (TSE) Committee once again swung into action and committed funds to contract a study by Informa Economics to gather the most current and accurate data possible with which to dispute what were thought to be erroneous assumptions. Informa Economics had done an economic analysis on the impact of regulations in 2004 and a major study of the rendering industry in 2002 when they were known as Sparks Companies. Informa Economics used a survey of the rendering industry to collect essential data on the volume of ruminant material now processed and what impact further restrictions would have on this essential public health service. The survey was sent to 52 rendering companies (many with multiple plants) that are members of NRA and 22 non-members, which, taken together, represent virtually all of the rendering capacity in North America and is truly representative of the industry. Informa independently collected, compiled, and analyzed the information from the survey under strict confidentiality to ensure that no proprietary information was compromised.
In addition to setting the Informa survey and analysis in motion, NRA started work on a point-by-point, comprehensive response to the FDA proposal. Discussions started with the NRA TSE Committee, continued with a broad discussion at the NRA annual meeting in October, and included the reading of many drafts by NRA leadership. The association also worked with other segments of agriculture to make them aware of the serious unintended consequences of the FDA proposal. There were various different levels of concern with what was proposed by FDA, but all of agriculture was united in telling FDA that the disposal problem was not adequately addressed.
Survey Gives the Big Picture
The Informa Economics study was done just in time to be included in NRA’s response to FDA before the December 20, 2005, deadline for comments. New findings estimated the direct economic impacts faced by the rendering industry and livestock producers due to the loss of existing channels for cattle and calf deadstock processing to be more than $127.7 million per year. In addition, costs for slaughter facilities to handle and dispose of CMPAF material and the significant capital investment that must be made by renderers and meat processors to handle, process, and dispose of all material identified by this proposed rule would almost certainly exceed $150 million per year.
Other important conclusions of the Informa analysis include:
• The proportion of deadstock cattle and calves rendered in the United States far exceeds the 17 percent assumed by FDA. The 45 firms collecting dead cattle in 2005 process more than half of all adult cattle mortalities and nearly 40 percent of calf mortalities, accounting for about 45 percent of all dead and downer cattle in the United States. These data support past rendering industry studies and information submitted by NRA.
• The proposed rule will severely reduce the number of dead and downer cattle and calves rendered in the United States. The number of cattle and calf mortalities no longer accepted by renderers would decline in volume nearly 24 percent (across all categories) and the remaining volume would decline by another 43 percent due to producers being unwilling to pay higher collection fees.
• Costs of deadstock disposal faced by livestock producers could increase by up to $112 million per year under the proposed rule.
• The reduced availability of deadstock collection services by renderers and higher fees will create a high potential for adverse environmental consequences. Faced with collection fees that could double or triple overnight, even the best-intentioned livestock producers will likely be tempted to overlook some environmental concerns in order to save thousands or tens of thousands of dollars. Without enforceable regulation of mortality disposal, unapproved and dangerous methods could find widespread use.
• Disposal of CMPAF material generated by meatpackers and renderers will be costly, and no universally appropriate methods of handling and disposal have been identified. Since state regulations often prohibit disposal of this type of material in landfills, and since many other landfills would likely refuse to accept it even if regulations allowed, there is a high likelihood that all of this material will ultimately need to be rendered prior to disposal, greatly increasing the overall cost of disposal beyond FDA’s estimate.
• The capital investment required by renderers and meatpackers to comply with this proposed rule would be significant. The industry-wide capital investment required would be $80 million. Annualizing this over 10 years at a seven percent discount rate suggests annual capital expenditures of $11.3 million.
• Reduced sales of meat and bone meal and tallow from the loss of deadstock rendering volume will exceed $15.7 million per year, at least 15 times larger than suggested by the FDA.
NRA Argues Rule Not Warranted
The backbone of the NRA argument was that no additional regulation is needed. NRA stated that FDA’s preliminary conclusion to remove cattle brains and spinal cord and rendered dead animals from all animal feed is not warranted, and this action aimed at removing a very minute risk of BSE will increase risks from other diseases, cause environmental degradation, and cost much more than can be justified. NRA emphasized that the 1997 feed rule is working well and compliance with existing regulations is extremely high. The U.S. Department of Agriculture’s enhanced BSE surveillance testing program has found only one indigenous cow that tested positive for BSE out of more than 548,786 surveillance samples from high risk cattle and 21,216 healthy cattle over the past 15 months, showing the incidence of BSE in the United States to be near zero.
In its comments, NRA strongly made the point that even under the most conservative assumptions, the impact of the proposed rule would be more than $150 million per year, exceeding the current threshold in Section 202(a) of the Unfunded Mandates Reform Act of 1995, which, after adjustment for inflation, is $115 million. Federal law thus requires an assessment of anticipated costs and benefits before the proposed regulation can be finalized. If FDA is forced to comply with this law, it could delay final implementation of the rule, or the assessment could expose that the benefit of the proposed rule is minuscule compared to the cost.
Another major point made by NRA in dispute of FDA statements was on the feasibility of SRM removal from deadstock. The Informa survey analysis showed the average percentage of cattle in good enough condition at the rendering plant to remove the brain and spinal cord to be 54.4 percent and the average volume to be 54.8 percent. Starting with nearly half of all current deadstock collected by renderers deteriorated to the point where brain and spinal cord removal is infeasible or impractical, it would be necessary to either remove a significantly greater volume of material from each dead bovine collected or for renderers to refuse to collect a significant proportion of the current volume of cattle and calves processed. Either way, the volume of material requiring disposal by alternative means and the potential losses to the rendering industry would increase greatly under the proposed rule, and be much higher than estimated by FDA.
NRA emphasized the important role of rendering in animal and public health in their response. When rendered, materials otherwise “filthy, putrid, or decomposed substance, or otherwise unfit for food” (as FDA described raw materials for rendering in their noting of their “enforcement discretion” concerning the rendering industry) are broken down to basic protein, fat, and mineral components that are safe and useful for feed. The rendering process inactivates virtually all harmful bacteria, viruses, and parasites. Compared with landfills and burial, rendering is effective at controlling biological hazards, including food pathogens (such as E. Coli, Listeria, Salmonella, and Campylobacter), organisms that cause diseases (such as anthrax, botulism, leptospirosis, bovine tuberculosis, plague, and tetanus) and surface and ground water pathogens (cryptosporidium and giardia). Changing how these materials are handled will do more harm than good.
Regulation Must be Based on Science
NRA continues to support scientifically based animal feeding regulations to restrict the use of certain animal proteins derived from mammalian tissues used in ruminant feeds, and agrees that animal feed regulations need to be reviewed from time to time if new risks are identified or new, relevant science is brought to light. However, to overreact to very few U.S. cases of BSE, especially in light of a massive testing program that shows BSE to not be a problem, invites tremendous expense to the rendering and producing sectors and will eventually lead to poorer animal health across the board, and ultimately higher food prices. Still, there is tremendous pressure on FDA to “do something.” Some consumer groups and other interests are criticizing the proposal for not going far enough to reduce risk. NRA must maintain a strong position that any time regulation strays from scientific risk/benefit analysis it is on shaky ground.
February 2006 Render