A Little Investment Goes a Long Way

By J.J. Smith, Vice Chairman, Fats and Proteins Research Foundation

In 2004, the Fats and Proteins Research Foundation (FPRF) entered into an exciting long-term relationship with Clemson University to primarily fund research into new uses for rendered products. The Animal Co-Products Research and Education Center (ACREC) was founded to provide this on-going and comprehensive research. The intent of this initiative is to better leverage the foundation’s research funding by investing in an institution with broad expertise that should allow each research project to more effectively build upon prior research.

FPRF committed to invest $800,000 in ACREC’s first three years, including $400,000 in the current fiscal year. During the past two years, when the commitments were only $150,000 and $250,000, FPRF expended approximately $300,000 of its $1.1 million reserve to fund ACREC. During its October 2007 meeting, the FPRF Board of Directors determined that the foundation must seek increased contributions from those associated with the rendering industry to fund ACREC.

Currently, total FPRF contributions are approximately $550,000 annually, with 55 percent of these donations provided by just three companies. Viewed on a per plant basis, this support represents, nationally, slightly more than $2,000 per rendering plant, about $.02 per raw ton and just over $.055 per finished ton. It also represents only .01 percent of the industry’s revenues! Few industries invest so little in research and development.

The FPRF board believes that this is an excellent time to ask renderers to increase their investment in FPRF for the following reasons:

• The markets for rendered products are at an all-time high, which has resulted in one of the most profitable periods ever for the U.S. rendering industry.

• The industry has enjoyed very strong prices, in part due to the new and developing markets for biofuels. FPRF has funded research for various biodiesel and boiler fuel projects over the past several years that has helped the industry establish this market and to obtain permits to allow fats to be used for fuel products.

• The premiums for pet food grade poultry meal in 2007 have been at all-time highs due to the developing markets in aquaculture. FPRF has expended significant sums to provide information proving the value of these products as replacements for fish meal.

Many FPRF members are investing significant funds in the foundation to support this investment in ACREC due to their long-term concerns regarding the market for animal protein products into commercial feeds. The year 2007 clearly illustrates the value of having two outlets for fats and being less reliant on the animal feed market. FPRF contributors believe we can realize similar accomplishments with animal proteins. We envision significant increases in protein values in the future, or at least developing new uses for animal proteins should public perception and/or government regulations cause the loss of the only significant existing market for proteins.

FPRF is asking renderers to significantly increase their contributions and is suggesting a guideline of $.10 per finished ton. This amount will not only help the foundation meet its commitments to ACREC and Clemson University, but also to significantly fund increased spending into research for the new uses for rendered products, especially animal proteins.

When you are contacted about your investment in FPRF, please give generously to support the future of your business.

Newsline – December 2007 RENDER | back