Forging Ahead in a Time of Change

By Michael Koewler, Chairman, National Renderers Association

Editor’s Note – The following is a speech given by Michael Koewler, Sacramento Rendering Company, at the National Renderers Association 75th Annual Convention in October.

The more things change, the more they stay the same.

In this political year, the word “change” is passed around too often and too loosely. However, change can be meaningful, as new ideas are anticipated and adopted. We in the rendering industry have and continue to adapt to the many changes in and out of our control.

Markets, for one, have forced us to rethink global strategies, which we have done by overcoming obstacles designed to restrict products that the rendering industry has traditionally supplied. The National Renderers Association (NRA) – through the efforts of Kent Swisher, vice president of NRA International Programs, and members of the International Market Development Committee – has done an outstanding job in not only preserving markets that the industry has served for many years, but also in developing new markets by making the case that rendered products are both safe and valuable.

The products that we manufacture have and will continue to change. Tighter specifications on tallow and greases have forced us to change the way we process. Protein meals have, in many instances, become specialized and are processed for specific specie formulations. The Fats and Proteins Research Foundation (FPRF), under the direction of Sergio Nates, has brought a new focus to product development and specialized applications. The FPRF’s recently formed alliance with the Animal Co-Products Research and Education Center at Clemson University is building a foundation on which we hope to bear the fruits of new rendered product application in areas that years ago we could only dream of.

Regulation has been and continues to be the most challenging dynamic that the rendering industry faces. Local, state, and federal laws, with the backing of environmental extremists, all constructed in the spirit of public health and safety, more often than not have unintended consequences that force our industry to rethink our operations and business models. A poor understanding of the rendering industry’s value to society has led many local-level officials to make irrational decisions that have applied pressure on plant operations and made businesses invest huge and oftentimes unnecessary capital.

At the state level, regulators have made expansion and modernization difficult by delaying permit approvals and creating expensive investment hurdles. In most recent years, federal regulation has been created to thwart the miniscule risk of bovine spongiform encephalopathy. The rendering industry has adapted, made the necessary modifications for compliance, and forged ahead. The most recent rule will no doubt force changes, but as always, we will adapt and look forward. The effects of this rule on the rendering industry have been minimized because of the leadership of Dr. David Meeker and the NRA membership, who have rolled up their sleeves and worked with the regulators at the Food and Drug Administration. No one likes all these new rules and we would all like to invoke Jim Andreoli’s (Baker Commodities) famous words, but the membership has risen to the occasion to preserve an important raw material source.

With all the changes that are going on in the rendering industry and in the global business environment, what hasn’t changed are the successes of the NRA. Under the guidance of President Tom Cook, and with the support of all the committees and the overwhelming participation of the NRA membership, we have managed the changes around us and postured ourselves to not only deal with these changes, but to prosper amidst them. Over the years, Cook and his team have built coalitions with allied industries, enhanced the rendering industry’s credibility with regulators and legislators, and have, in effect, transformed our industry from “invisible” to “essential” recyclers.

The original recycler, now the original green industry, with our new eco-friendly NRA logo, has truly changed the dynamics of the debate regarding our mission. The millions of tons of would-be waste products recycled into hundreds of usable everyday products are a testament to the industry’s importance in the green debate.

My comments have been positive on the changes our industry has made to meet the challenges of the past. As for the future, we may be confronting our ability to change quickly as we experience lower commodity prices, particularly corn at $4.20 to $5.20 per bushel and soybeans dropping to between $9.60 and $11.00 per bushel next year. Looming on the horizon are higher operating expenses, more Conservation Reserve Program land being placed in crop production, a worldwide economic slowdown, and significant reductions in U.S. livestock and poultry producing operations due to overwhelming losses. In conclusion, the changes that we decide to incorporate in our 2009 business plan may be the most crucial in recent history.

Remember, Iowa doesn’t get flooded every year.

From the Association – December 2008 RENDER | back