What a Difference a Year Makes

By Tom Cook, President, National Renderers Association

The above saying couldn’t be any truer than now as we begin a new year. Since a year ago, there have been dramatic changes both politically and economically.

It is difficult to look into the crystal ball and predict the future with any assurances. It will be a challenging year for the National Renderers Association (NRA), as it will be for its member companies. But I am regularly reminded that with challenges come opportunities.

Politically, we face a new Democratic administration in Washington, DC, after eight years of Republican leadership. This means getting acquainted with a new cast of players in the various departments and agencies that impact the rendering industry. Most individuals have not even been appointed yet. Once the cabinet appointments are complete, there are literally hundreds of other political appointments at the subcabinet and agency levels that need to be made. It will be well into the spring before many of these people will be in their new positions.

The uncertainty will be learning the Obama administration policy priorities and how they will be implemented. There was a lot of rhetoric during the presidential campaign and already there are some campaign promises that are not likely to be kept. The reality is that campaigning is a lot different than governing.

The good news is that the rendering industry has a positive story to tell. We truly are the original recyclers. We make a positive contribution to society. The NRA’s task is to get the industry’s story in front of the policy and decision makers. With the success of NRA’s annual Washington fly-ins, we have enjoyed a good relationship with both Democrats and Republicans in Congress. We will build on these relationships with the new 111th Congress.

The new Obama administration will come forth with several ambitious initiatives. The first will be a stimulus package that is expected to cost close to a trillion dollars. Much of the details were not known at press time, other than some proposed tax cuts. It will be interesting to see if Congress attempts to lade it with additional pork barrel and earmarked programs than what President Barack Obama proposes. Alas, Congress just can’t help itself and will try.

With the enormity and projected price tag it is uncertain just what will be included in the stimulus package that will impact renderers. Will it include additional incentives for alternative fuels? Will it affect existing programs like the U.S. Department of Agriculture Foreign Market Development and Market Access Programs, which are so beneficial to the NRA’s international marketing activities?

After a stimulus package, initiatives in health care, energy, and climate change can be expected, for starters. Every new administration must move quickly on its priorities if it wants to succeed. After the first year, members of Congress get in a re-election mood and these grand initiatives aren’t so grand anymore so it is important for Obama to move quickly on these programs if he wants results.

A carryover issue from last year is the implementation of the changes to the Food and Drug Administration (FDA) feed rule. The new changes go into effect on April 27, 2009. While the NRA opposed these changes vigorously, the FDA prevailed and published the rule as final in April 2008. With this reality, NRA set out to work with its members and the FDA in an attempt to make the implementation of the rule workable. There was good cooperation on both sides and many of the industry’s questions and concerns have been addressed.

The one sticking point in the rule is the handling of cattle over 30 months of age that die on the farm. In order for these animals to be rendered, the brains and spinal cords must be removed and segregated from other rendered materials. Renderers are making individual company decisions based on their own circumstances on how to address dead stock over 30 months of age. These decisions are being made based on economics, geography, and the practicality of removing these materials from the animal.

Many renderers have already notified their customers what they intend to do to comply with the new rule. In cases where the renderer has decided to either discontinue picking up dead animals over 30 months of age or discontinue picking up dead animals altogether, there has been a considerable outcry from farmers, markets, and other customers. While we have been opposing this rule for over three years, many are just learning of it and its implications.

However, many renderers are already implementing or exploring ways to process animals over 30 months of age that includes the removal of the brains and spinal cords.

Renderers generally are trying to work with their customers in providing some form of disposal service even if it means collecting the dead stock and taking it to a landfill instead of rendering. But, of course, these services will come with an added cost and it is not yet certain how much the owner of the dead stock is willing to pay for the service.

The bottom line is that the primary burden for compliance with the new rule falls on the renderer, providing a hardship to many of them. It is not easy to make a decision on the best way to comply. It will take several months to see how the new rule will work and what impact it will have on the rendering and livestock industries. It is the intent of renderers to continue to provide their services in a manageable and economical manner.

As stated earlier, challenges often bring opportunities. The rendering industry will be tested this year, but I am confident we will rise to the occasion.

From the Association – February 2009 RENDER | back