A regulation amending the mammalian-to-ruminant feed ban introduced July 25, 1997, by the Canadian Food Inspection Agency (CFIA) was published in the Canada Gazette on July 12, 2006, and is referred to in this review as the enhanced feed ban (EFB) regulation. The new regulation took effect July 12, 2007.
The EFB defines specified risk material (SRM) as (a) the skull, brain, trigeminal ganglia, eyes, tonsils, spinal cord, and dorsal root ganglia of cattle aged 30 months or older; and (b) the distal ileum of cattle of all ages. The regulation specifically prohibits the inclusion in animal feed of any protein derived from SRM and tallow that may include fat from a ruminant and exceeds 0.15 percent insoluble impurities. Dead stock is effectively treated as SRM although dead stock may be used in the manufacture of meat and bone meal providing SRM is removed.
The introduction of the EFB in Canada on July 12, 2007, has impacted renderers throughout the country in different ways. This review is written with a western bias as the author has direct knowledge of the impact of the feed ban in western Canada and only anecdotal knowledge of what has taken place in the rest of the country.
Canada’s beef industry is pre-dominantly located in the three prairie provinces of western Canada and in Ontario. Alberta’s beef processing capacity and its feed lot industry account for the largest percentage of Canada’s beef production, while Quebec’s dairy industry accounts for a significant percentage of the over 30-month slaughtered cattle in Canada.
Prior to the EFB going into effect, Canadian renderers had already taken steps to restructure their operations in response to the discovery of bovine spongiform encephalopathy (BSE) in a Canadian cow in May 2003. The response of Canadian renderers at that time was driven by the closure of the U.S. border to Canadian beef and live cattle, and to the U.S. requirement that all non-ruminant derived proteins be produced in rendering plants certified by the U.S. Department of Agriculture as being free from ruminant products.
In order to keep markets open for Canadian protein meals derived from non-ruminants, Canadian renderers, without regulatory incentive or compulsion, dedicated many of their plants as species specific, distinguishing, in particular, between ruminant and non-ruminant plants, with further refinements performed as deemed necessary to meet market requirements. This initial restructuring of the Canadian rendering industry occurred without government financial assistance at a time when the Canadian cattle industry received approximately $400 million (Canadian) to alleviate the effects of the U.S. border closure to Canadian beef and cattle. Some of this money was spent on increasing beef processing capacity, including the construction of new processing plants. Several of these new processing plants have failed and the Canadian meat packing industry has recently experienced both contraction and consolidation.
In order to comply with the EFB, a second restructuring of the Canadian rendering industry took place and is ongoing as the risks associated with handling SRM become increasingly apparent. In practical terms, under the new regulation Canadian renderers have either ceased handling SRM, treat all ruminant material as SRM, or have instituted measures to separate SRM from SRM-removed material (called “clean”) for separate processing. The EFB requires any person or entity handling SRM to separate the material and keep it separate from all other material prior to destruction or containment in a permitted facility.
Beef packers are either federally (CFIA) or provincially inspected and under the regulation are required to be permitted and remove SRM at source. SRM intended to be processed by renderers is dyed and placed in dedicated, clearly labeled containers at source. SRM containers are then removed and SRM is rendered in dedicated lines into an un-ground dried state referred to as crax, which is then loaded into dedicated and labeled trucks or trailers for transfer to a CFIA-permitted landfill.
In some very limited instances, landfills have permits from CFIA to receive raw SRM; however, this is not a favored method of disposal although it is the only currently practical solution available to small packers not serviced by a renderer willing to render and dispose of SRM crax for a fee. Tallow derived from SRM is considered a generic commodity and, providing it meets the EFB insoluble impurity requirement of containing less than 0.15 percent of insoluble impurities, can be used in animal feed.
The intent of the EFB is to accelerate the time period it will take for Canada to once again be regarded as a BSE-free country. The regulation enjoyed early support from most cattle and beef industry participants as there was a general consensus that after the introduction of the EFB, markets for Canadian beef products would reopen and be expanded. This has not happened. The consensus was not shared by the Canadian Renderers Association (CRA), which warned that the costs and difficulties associated with its introduction would outweigh its perceived benefits. The CRA instead argued to no avail that the 1997 feed ban regulation as enhanced by the voluntary and unilateral actions of CRA members to safeguard their markets for rendered products was sufficient to achieve stated CFIA objectives.
Prior to the effective date of the EFB, Canada’s federal government introduced a federal-provincial cost sharing program designed to assist all industry participants affected by the regulation to implement the structural changes deemed necessary to ensure the successful implementation of the EFB. The federal contribution to the SRM program amounted to $80 million (Canadian) and provincial contributions varied from province to province. Allocations of federal money to the provinces depended upon the levels at which individual provinces were prepared to contribute and each province entered into a confidential cost-sharing agreement with the federal government. Under the program, approximately $120 million (Canadian) has been allocated toward the cost of implementing the EFB. A significant portion of this grant money has been allocated to renderers and is currently being applied toward the costs of building separation infrastructure, including dedicated SRM rendering lines.
The EFB gave rise to many questions surrounding the meaning of separation and dedication, and since its implementation, the ban has raised questions surrounding accidental mixing of ruminant SRM with clean ruminant material. It should be noted that SRM must be contained or destroyed while clean ruminant material may be used to manufacture meat and bone meal, a protein product that can still be used as a feed ingredient in non-ruminant feed.
Some of the major issues flowing from the implementation of the EFB are discussed below.
Interpretation of the Regulation
Prior to the EFB going into effect, questions were raised by beef industry participants regarding implementation of the ban. A task force was established by the CFIA under the auspices of the Beef Industry Roundtable, which was lead by a CFIA official and included participants from all industry sectors, including renderers. Up until the time of EFB implementation, a multitude of practical considerations were raised and dealt with in a spirit of cooperation. Protocols dealing with specific situations were established and by implementation date, holders of SRM permits had a good idea of what was expected of them under the ban.
Infrastructure Changes and Grant Applications
Renderers were early identifiers of the infrastructure changes needed for the successful implementation of the regulation and many other industry participants looked, and continue to look, to renderers for assistance in determining infrastructure requirements for separation of clean ruminant material from SRM. Major infrastructure changes included the establishment of transfer stations; the identification of suitable permitted landfills; the separation of ruminant rendering operations, when possible, between SRM and clean ruminant material; the construction of new rendering lines when separation was not possible at existing dedicated ruminant facilities; and the introduction of increased polishing capacity to deal with the insoluble impurity requirements applicable to animal fats derived from ruminants.
Grant applications were submitted to help finance the cost of infrastructure changes and because of delays in the approval process directly affected by the speed with which federal provincial agreements were reached, infrastructure projects were delayed. Many of these projects remain to be completed and cost savings that may result from infrastructure changes are not yet universally available to beef processors.
Costs and Charging
The necessity to separate SRM from clean ruminant material has inevitably led to a reduction in economies of scale. Where SRM is rendered, separate lines are now needed for SRM and clean ruminant material, respectively. SRM crax resulting from the rendering process has to be separately stored, trucked, and contained, and all costs associated with dealing with SRM have to be recovered. Protein derived from SRM is not milled, but is instead loaded in its un-ground dried rendered state into designated trucks that transfer the crax to permitted landfills for containment. Landfills fall under provincial jurisdiction and are generally reluctant to apply for a federal permit to accept SRM.
Large volumes of SRM and clean ruminant material emanate mainly from federally inspected packing plants. Provided that volumes are sufficiently large, it makes economic sense to separate at source, to truck separately, and to render separately.
Small volumes emanating from both federally and provincially inspected plants can be costly to truck since separate trucking arrangements have to be made for SRM and clean ruminant material. Small volumes do not support the operation of a dedicated SRM rendering line.
Some Canadian renderers that previously processed small volumes of ruminant material have chosen not to accept SRM and have ceased to render ruminant material altogether. In such instances, provincial governments have been forced to designate provincial landfills to accept raw ruminant material, including SRM. Other renderers have designated small volumes of ruminant material as SRM since collection of small separated volumes is not economical.
Dead Stock Collection
The implementation of dead stock service charges and/or an increase in dead stock service fees has led to a noticeable decline, in the range of 50 percent, in the amount of dead stock material being collected.
In theory, clean ruminant material can be separated from SRM in dead stock, but a veterinarian’s certificate concerning age and cause of death is first required before clean ruminant material can be salvaged from a dead ruminant. Practical and economic considerations have led to most Canadian renderers treating dead ruminants as SRM. However, if volumes are sufficiently large and prices for meat and bone meal and tallow are sufficiently high, it is conceivable that some Canadian renderers may look for efficient ways to separate SRM from dead ruminants.
At present, the favored disposal option for SRM is to first render the material and then landfill the derived crax. Small amounts of raw ruminant material are being disposed of in permitted landfills and small volumes of SRM are being incinerated. Composting is also an option some have considered for small volumes of ruminant material. However, restrictions are placed on the use of compost made from material containing SRM.
In the author’s experience, grants have been made for exhaustive studies to research alternative disposal methods that are more cost-effective than existing SRM disposal methods. To date none of these studies has produced a reliable and more cost-effective disposal alternative for large volumes of SRM than the rendering, then landfill option presently employed.
An alternative being considered for the disposal of rendered SRM crax is the use of crax as fuel in cement plants. This is a proven destruction alternative currently used in Europe. However, implementation of this alternative in Canada has, to date, been inhibited by cost factors and environmental permitting requirements.
Meat and Bone Meal
After the discovery of BSE in May 2003, Canadian meat and bone meal became virtually worthless and more than 2,000 metric tons were dumped before the market recovered. By the time the EFB came into force, meat and bone meal markets had been re-established, although prices for Canadian meat and bone meal were significantly less than prices for other Canadian rendered protein meals.
Since the EFB went into effect, approximately 70,000 metric tons per year of SRM crax, previously sold as meat and bone meal, has been destroyed or contained and removed from the Canadian supply chain. The effect of this mandated reduction in meat and bone meal volume has been to increase prices and reduce price differentials between Canadian produced meat and bone meal and other rendered non-ruminant protein meals. The EFB has not had the effect of opening any new markets for Canadian produced meat and bone meal.
Markets for tallow have not been impacted in any significant way by the EFB. However, the cost of producing tallow for feed has increased as a result of the regulatory requirement that bans the feeding of ruminant fats containing more than 0.15 percent of insoluble impurities, since most tallow now has to be polished to achieve the standard set by the regulation.
Inspection and Compliance
All Canadian rendering plants operate under permits renewed annually by the CFIA, and CFIA inspectors are now permanently located at Canadian rendering plants processing SRM. Permitted SRM handlers are required to report compliance breaches with reactions to those breaches dealt with by CFIA officials working in cooperation with industry. Protocols with respect to compliance breaches are evolving based on experiences to date, some of which have proved to be very costly and extremely disruptive to all affected parties.
The risks associated with handling SRM are significant to renderers in the event of compliance failures. In particular, the mixing of SRM or prohibited finished product with non-ruminant finished product can be exceptionally damaging to a rendering company. Accidental mixing can lead to product recall and destruction, and if cattle feed contains accidentally mixed ruminant meat and bone meal or SRM, then the quarantine and destruction of affected cattle becomes a distinct possibility. By operating separate ruminant and non-ruminant plants, Canadian renderers have taken an important step towards safeguarding themselves against the eventuality of accidental mixing of SRM or meat and bone meal with non-ruminant rendered protein meal. The risks associated with accidental mixing are generally not insurable.
The mixing of SRM with separated clean ruminant material can take place without the renderer’s knowledge or can be reported sometime after the separated clean ruminant material containing accidentally mixed SRM has been rendered and sold as meat and bone meal. This form of accidental mixing is beyond the renderer’s control, but it is the renderer who bears the consequences of such accidental mixing, particularly if it involves a small supplier of limited means.
The Canadian rendering industry has undergone significant structural change since the discovery of BSE in May 2003. The implementation of the EFB has increased the complexity of rules under which the industry operates. It has also increased the costs of rendering to suppliers of raw materials and the risk of catastrophic loss to Canadian renderers. At the same time, prices and volumes remain primary concerns of renderers, who see themselves as the solution to the problem of dealing with SRM under the EFB.
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International Report – August 2009 RENDER | back