Australian Rendering Industry in Good Shape

By Tina Caparella

Although it seems like a world away, Australia is no less immune to global issues such as the economy, regulations, and climate change. And while the rendering industry down under has been enjoying healthy prices and demand for their products in recent years, those attending the Australian Renderers Association 10th International Symposium in Cairns, Queensland, in mid-July were told they mustn’t get complacent.

Gary Burridge, Northern Cooperative Meat Company, provided statistics on Australia’s red meat industry, which produces 2.2 million metric tons of beef and veal per year, and 435,000 metric tons of lamb. He said total raw material has remained steady since 2006 and is projected to remain so through 2010-2011, but Burridge doesn’t believe it will be as stable as indicated due to global factors such as the financial crisis, climate change, and human/animal health.

Fortunately, Australia hasn’t been affected by the global recession as much as other parts of the world have, such as the United States. However, of particular concern to the Australian animal agriculture community is the country’s proposed Carbon Pollution Reduction Scheme (CPRS) that would require facilities to reduce carbon pollution by 25 percent of 2000 levels by 2020, set a 25,000 metric ton emission threshold for facilities, and set prices for carbon permits at various levels from year to year. Burridge estimated the potential monetary impact would be a 200 percent increase in electricity costs, and a 10 to 20 percent jump in chemical, freight, and fuel prices.

“The cost of this thing is huge,” he warned. “Have a close look at this because it’s bloody serious.” Australia has signed onto the Kyoto Protocol, which does not give credit for carbon sequestration. Burridge advised renderers to lobby regulators as part of a coalition with the animal agriculture industry to ensure a scheme that is workable for all.

As for human and animal health, Burridge forewarned that statistics indicate within the next 20 years, a major global pandemic will cause significant loss of human life. He also shared his belief that the current H1N1 flu has infected the world’s population before because of the high number of cases and deaths in young people compared to the few cases in elderly persons who are usually more susceptible to flu viruses.

Burridge cautioned renderers that community values and expectations are changing, with the focus being on global warming, animal welfare, and the depletion of the rainforest. Greenpeace has targeted the cattle industry in Brazil for causing the deforestation of the rainforest, leading to a recently signed environmental agreement between Brazilian meat processing giant JBS S.A. and U.S. retail giant Wal-Mart.

“Community values and expectations are there and will change our industry,” Burridge stated. “Be very careful on how you handle community values or they could come back and bite you.”

Kent Swisher, National Renderers Association, updated Australian renderers on the changes the U.S. rendering industry is facing, particularly with the new Food and Drug Administration enhanced feed rule. He explained that losses due to the new rule are uncertain at this time and that each renderer will make its own decision on how to handle prohibited material, if at all. However, industry estimates put meat and bone meal losses at $12 million per year and tallow losses at $17 million per year.

“Our industry has always supported the 1997 feed ban and that’s been and continues to be our position,” Swisher commented. Several bright spots in the United States include 400,000 metric tons of animal fats and waste vegetable oil being used in domestic biodiesel production, and a strong demand for animal proteins in fish feed. However, the biggest challenge for U.S. renderers remains sanitary issues, such as bovine spongiform encephalopathy (BSE), avian influenza, and the H1N1 flu virus. Swisher advised Australian renderers to have an action plan in place just in case an animal disease is ever discovered, and to be proactive, especially with international groups such as the World Renderers Organization (WRO) that can help ensure decisions affecting rendered products worldwide are based on sound science. He predicted the next few years will be bumpy, but that long-term demand for rendered products will remain strong.

Render’s editor, Tina Caparella, presented Australian renderers with some ideas on how to best promote the valuable service they provide to the animal agriculture industry and the environment. Various messages that could be marketed include “rendering is an essential industry” that sanitizes a waste material that could potentially be harmful to the environment and “rendering was green before green was cool.” Awareness should also be made to rendered products’ role in alternative energy and the reduction of greenhouse gas (GHG) emissions. Most of all, renderers need to be proactive and take control of their visibility and publicity before someone else does.

Protein meal use in animal feeds highlighted an afternoon session at the symposium, beginning with an examination of the aquaculture industry by Rhys Hauler of Skretting. China is the largest aquaculture producer in the world with a rapidly growing animal feed manufacturing sector. Hauler said the key attributes of using animal proteins in aquaculture feeds are high nutrient density and lack of anti-nutrients, with the key requirements being stable crude composition, and improved digestibility and freshness.

Greg Hargreave, Baiada Poultry, said that with Australia producing about 9.5 million birds per week, there is the potential to use 300,000 metric tons per year of rendered products in the Australian poultry industry. Chicken producers are also facing environmental issues such as GHG emissions and use of resources such as energy, water, and land. As for the value of animal proteins in poultry feed, meat and bone meal is higher in protein than soybean meal, but amino acid levels are lower, particularly for digestible amino acids. On the other hand, mineral (calcium and phosphorus) and energy content is higher in meat and bone meal versus soybean meal. Hargreave said challenges remain with protein variability between plants and suppliers, and microbiological contamination of animal proteins. He emphasized that rendered products should be considered part of the food chain, not just the feed industry, and that more specialization, such as species specific ingredients, is being demanded.

John Seletto, Pet Food Industry Association of Australia, said 350,000 metric tons of dry pet food is manufactured in Australia annually and is the biggest user of poultry meal in the country, about 35,000 metric tons, over one-third of Australia’s production. Seletto informed renderers that palatability is the driver for assessing raw materials in the pet food industry with the focus being on suppliers with the shortest time from slaughter to processing, usually less than eight hours. Other key parameters required in animal proteins are digestibility, stability, and product safety. Seletto added that a significant percentage of Australia’s pet food is exported, primarily to Asia, and with Mars and Nestle continuing to build pet food manufacturing plants in Asia, more meals and fats will be exported directly to these new production facilities.

Focusing on the global rendering situation was Alan von Tunzelman, New Zealand Renderers Association and PVL Proteins, Ltd., who said complications in Europe are enormous, with so many countries and two presidents of the European Union. He emphasized, though, that it is important to watch Europe because any regulations imposed in the region could ultimately be adopted internationally. Tunzelman also highlighted the importance of the WRO, which is in its 10th year, and that Australia and New Zealand renderers are seen globally as honest and well-respected traders.

A technical session focused on environmental issues and biodiesel, with John Constable, JJC Engineering, opening the second day of the symposium with the results of the company’s cleaner production project funded by several government agencies and agriculture research entities. The project’s objective was to reduce water, wastewater volume and load, energy, and solid waste to landfill and was conducted at four abattoirs and four rendering facilities throughout Australia. Constable admitted that reducing waste is an ongoing process and provided a laundry list of opportunities where waste could be eliminated, such as not adding water in the cooker, closing the loop on vacuum pump seals, minimizing sludge resistance time, and evaporating stick water. He added that an important step to reducing waste is getting management and operators involved in the process.

Focusing back on climate change was Stewart McGlashen, Johns Engineering, who tried to decipher the complicated CPRS, which has not yet been set as legislation and is different than Australia’s National Greenhouse and Energy Reporting Scheme (NGERS), which is already in place. The CPRS is a cap and trade scheme where the government sets limits on permitted emissions (cap) and allocates rights (allowance to emit below expected emissions levels), which can be given for free or auctioned (trade). Emitters can then cut production, invest in cleaner technology, or buy allowances to cover the shortfall. McGlashen warned that one of the real dangers of this program is indirect costs, and advised renderers to minimize their exposure/risk by purchasing carbon permits, running an efficient plant, and changing fuel source.

On the other hand, Australia’s NGERS is a single national reporting framework that meets Australia’s international obligations under Kyoto and looks at energy use and GHG emissions, including wastewater emissions. Under the NGERS, the threshold for individual facilities is 25,000 tons of carbon dioxide equivalents, or 125,000 metric tons per company, with the threshold reducing on an annual basis. McGlashen predicted Australian renderers are likely to be caught in one scheme or the other.

Tunzelman returned during the session to present innovations the New Zealand rendering industry has gone through over the past 30-plus years. In the late 1970s, early 1980s, the country’s renderers began using new technology and have enjoyed continuous refinement since. New Zealand renderers have also forged a closer relationship with the Food Safety Authority, providing a mutual respect for both regulators and rendered products. Tunzelman said carbon credits are inevitable and that research and development is critical to a continuation of innovation.

Dean Twist, Biodiesel Producers, provided hands-on knowledge of using tallow to produce biodiesel. The 60 million liter (15.8 million gallon) plant began operating in November 2007 and to date has used 30,000 metric tons of tallow using BioDiesel International technology geared for animal fat and waste cooking oil. Twist said many clients are increasingly becoming feedstock savvy and specifically requesting non-food sources, while many myths about tallow-based biodiesel are being dispelled. He predicted that within one to two years, biodiesel will become more mainstream in Australia.

Critical issues for producing biodiesel from rendered fats include plastics and moisture, impurities, and unsaponifiables. Twist believes Biodiesel Producers has been successful over other biodiesel businesses in Australia because of the quality of the fuel, which meets the Australian standard for 100 percent biodiesel published in 2003. The industry down under is currently working on a standard for a six to 20 percent biodiesel blend.

Robert van Barneveld, Australian Pork, Ltd., opened the third day of the symposium with an outlook on the Australian pork industry, which is doing quite well despite other countries struggling. Currently, Australia has 265,000 sows, down from about 300,000 previously, with half located in Queensland and New South Wales combined. The country’s biggest challenge is the rapid increase of pig imports due to the exchange rate, mostly from Canada, Denmark, and now the United States. Barneveld said 70 percent of Australia’s pork production is imported, but anything with a bone is Australian meat.

Rendered proteins from a nutritional standard are excellent, Barneveld stated, are highly valued by the pork industry, and there are no plans to exclude rendered proteins from swine diets. One product the pork industry would like to use more of is spray-dried porcine plasma for piglets. Currently there is limited use in diets because of the industry’s nervousness about quality. Barneveld contributed his opinion on the CPRS, commenting that “this is a tax,” and it does not provide incentives to reduce carbon emissions. The scheme will represent an added cost for the pork industry, but it will have a minimal impact on ingredient use.

Sergio Nates, Fats and Proteins Research Foundation (FPRF), shared with the group an article published in the Journal of Alzheimer’s Disease that inaccurately stated eating farmed fish could transmit infectious prions from cows with BSE to humans.

“This is the craziness we have to deal with sometimes,” he commented. With assistance from the Global Aquaculture Alliance, Nates was able to convince a large grocery chain that fish fed meat and bone meal are safe and there was no need to pull their products from shelves after concerns were raised over the article’s statements. He warned that the World Organization for Animal Health, or OIE, will, in about two years, begin to regulate ingredients in aquaculture diets. Abstracts of FPRF research projects are available to the public on the foundation’s Web site at, while full project reports are only available to members.

Tallow use in the domestic market was examined by Connie Pisa, Symex, which is the largest user of tallow in Australia. The 150-year-old company uses high pressure and temperature to produce fatty acids without chemicals, which are then used in every day products that are primarily exported to Asia since Australia isn’t a big enough market. Pisa said tallow-based fatty acids and oleic acids are preferred by the metal working fluid industry and Japanese importers, respectively.

Stephen Cooke, Craig Mostyn Group, posed the subjective question, “can meat meal reach $1,500 a ton?” Cooke was optimistic in his yes answer, given that Australia ovine meal has already reached that level and poultry meal is not far behind at $1,150 a ton. He clarified that renderers must market their products as species specific “ingredients” instead of “commodities” to attain the higher price level, and promote ingredient specifics, such as “bovine meat and bone meal” along with a list of its nutrient characteristics. Cooke predicted poultry meal (as opposed to poultry by-product meal) could reach the $1,500 per ton level in 2012, porcine meal in 2015, and bovine meal perhaps in 2020.

Julius Rath, Peerless Foods, wrapped up the symposium with a recap of the three days. He reminded renderers that customers still demand consistency and quality ingredients that are free of pathogens and contaminants.

“We need to be focused on meeting our customers’ needs,” Rath commented.

ARA’s next symposium will take place in 2011.

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August 2009 RENDER | back