Presenting the Sustainable Industry

By Tina Caparella

In 2015, the National Renderers Association (NRA) formed a committee to examine how best to present the North American rendering industry as the sustainable industry it is to regulators, customers, world leaders, and the general public. Over the past year, committee members have worked diligently to develop parameters that best depict the four main principles of rendering sustainability:
1. Produce safe animal food.
2. Practice environmental stewardship and operate efficiently.
3. Care for local communities and employees.
4. Help feed a hungry world by providing nutritious feed ingredients for animal production by recycling responsibly.

The steps taken to show the industry’s sustainability were presented in October at NRA’s 83rd Annual Convention on Amelia Island, Florida. They comprise of promoting industry-wide data on rendering’s low carbon footprint, joining the U.S. Sustainability Alliance, and working with livestock groups to ensure rendering is included in their sustainability models. Dr. David Meeker, NRA scientific services, suggested that renderers track their own data using tools NRA has developed to confirm improvement in their own sustainability goals and then promote the results. NRA has developed a white paper on the industry’s sustainability for renderers to share (posted here).

As part of meeting the socially responsible aspect of sustainability, NRA once again held an auction at the convention to raise funds for Canine Companions for Independence, a non-profit organization that provides assistance dogs to United States (US) war veterans across the country. A variety of items were available for bidding and at the close of the auction, $25,000 was raised for the Canine Companions for Independence Wounded Veterans Initiative.

One growing area of interest where rendering already plays a sustainable role is in reducing food waste. NRA President Nancy Foster informed members that legislation has been introduced in Congress that would provide loans and grants to municipalities for anaerobic digestion and composting of food waste. Although the bills most likely won’t advance this year, NRA educated one bill’s author, Maine Representative Chellie Pingree, about rendering who appreciated the knowledge and decided to reintroduce her bill next year. NRA has vowed to work on providing assistance on drafting any food waste bill.

“Also expect to see food waste addressed in the next farm bill in 2018,” Foster warned.

Michael Koewler, Sacramento Rendering Company, informed convention attendees that the California Department of Resources Recycling and Recovery, or CalRecycle, has earmarked $100 million per year for the next 10 years aimed at reducing methane and food waste in the state through anaerobic digestion. California renderers have told CalRecycle that rendering already reduces both but since the agency does not regulate rendering, renderers cannot partake in the subsidized program.

Other matters discussed at the convention included the US Environmental Protection Agency’s (EPA’s) waters of the US rule. Steve Kopperud, SLK Strategies, shared with the NRA Environmental Committee that Congress has tried six times to force EPA to withdraw the rule and rewrite it, but President Barack Obama has said he would veto any bill as this is part of his legacy on environmental issues. Many states and industry groups have sued EPA over the intrusive regulation.

“We will continue to fuss about it but the rule will end up in the Supreme Court next year,” warned Kopperud.

NRA’s Biofuels Committee Chairman Doug Smith, Baker Commodities Inc., noted that continued low heating oil prices have kept biodiesel producer profits down while the industry awaits EPA’s final rule on Renewal Fuel Standard volume requirements for 2018. The rule is currently at the Office of Management and Budget and was expected to be published by the end of November. Kopperud predicted that Congress will pass a biodiesel tax extenders bill tacked onto another bill by the end of this year as has happened in the past.

“Don’t expect to see any major changes, like making it a producer’s credit,” he commented. Foster alerted renderers to a bill introduced in Congress by the oleochemical industry that would exempt animal fat from the biofuels tax credits. NRA opposes the bill as it is discriminatory and is concerned it might slip in at the last minute attached to another bill.

Meeker updated members of the Animal Protein Producers Industry Committee (APPI) on the Food Safety Modernization Act (FSMA) that saw its first compliance date in September. He said of the 6,000 animal feed and feed ingredient facilities registered with the Food and Drug Administration (FDA), just over 1,000 individuals have been certified as “preventive control qualified individuals” as required by FSMA. Within the rendering industry, over 100 individuals have been certified to date out of 250 facilities.

APPI Committee Chairman Dr. Ansen Pond, Darling Ingredients Inc., said training of FDA and state inspectors is of utmost importance but the agency has only held one training thus far. FDA asked to conduct a joint training with industry so committee members voted to invite federal/state FSMA inspectors to APPI’s North American Rendering Industry Code of Practice training session in June 2017.

Pond developed several white papers on thermal validation explaining why rendering process temperatures are appropriate to destroy Salmonella and other pathogens. NRA is looking to have these papers published in a peer-reviewed journal. Pond also wants to identify the benefits APPI brings to the rendering industry and develop a strategic plan for the next four to five years.

“It is a very different environment than it was 10 years ago,” he noted, especially with FSMA now in place.

An Interrogator, Farmer, and Meat Producer Went to a Rendering Convention
NRA’s convention featured several notable guest speakers, including Eric Maddox who, as a staff sergeant in the US Army, conducted over 300 interrogations in Iraq in 2003 and collected intelligence that directly led to the capture of Saddam Hussein. He explained that his interrogation technique is about listening.

“When you sit across from a human and can increase your ability to really listen, you become the ultimate problem solver,” Maddox shared, adding that a person only listens to 25 percent of what they hear primarily due to internal and external distractions. The biggest distraction is listening to respond.

“We need to learn to listen through empathy without distraction,” Maddox stated.

Chuck Conner, National Council of Farmer Cooperatives and former deputy secretary of agriculture, discussed three issues and the “elephant in the room”: genetically modified organisms (GMO), trade, regulations, and the 2016 presidential election. He noted that the agriculture industry is only about two percent of the US population but was instrumental in guiding a workable GMO bill through Congress.

“Senate Bill 764 was a victory for science over social media,” Conner declared. As for the election, he said the biggest challenge for the next president will be the budget. The US Congressional Budget Office and the Office of Management and Budget predict that by the year 2031 just four programs will consume the entire budget of the US government: Medicare/Medicaid, subsidized healthcare, social security, and interest on the nation’s debt.

“Entitlement reform is a must,” Conner declared.

Randy Blach, CattleFax, presented his annual US and global livestock industry report that renderers look forward to at each convention. The past year presented no big surprises in US raw material supplies with the cattle market able to maintain its current inventory going into 2017. Blach showed that beef production is up 5.8 percent from last year, poultry production up 3.0 percent, and pork production up 1.2 percent. He remarked that late 2012 going into early 2013 was a tough time for livestock producers because of porcine epidemic diarrhea virus, the drought, and $8-a-bushel corn, but cattle inventory is now on the rise with total herd size forecasted to be nearly 8 million head larger by 2018-2019 than in 2014. Cattle weights continue to be higher but are moderating at an average 893 pounds. Regionally, cattle on feed is shifting away from the Southwest and California and moving into the central region, especially into Kansas.

Blach pointed out that US pork exports are up 4 percent with a lot of new pork processing plants coming online, increasing 6 percent by the fall of 2017 and 8 percent by 2018.

“Those are big numbers,” he stated. Poultry exports are also up 4 percent. “The poultry side has been pretty consistent and has gained a huge share of the beef market in the past 25 years,” Blach commented, adding that meat and poultry consumption overall continues to rise in the United States.

As for global livestock production, beef has seen slow growth over the past 10 years but is forecasted to increase 1.4 percent next year while poultry production will be up 2.6 percent and pork up 1.0 percent. The United States is the largest poultry and beef producer followed by Brazil. Collectively, both countries produce nearly 48 percent of all global protein. Although China is the number one pork producer, the country’s production is on a downward trend while other regions (Brazil, European Union, Russia, and United States) are slightly higher.

Blach finished up by mentioning that crude oil and tallow prices are still tracking together, although tallow is higher. With crude oil inventories plentiful, he doesn’t see prices going above $60 per barrel in the foreseeable future.

Barry Carpenter, North American Meat Institute (NAMI), focused on challenges the meat industry is facing, including recent studies declaring that red meat causes cancer and processed meat “probably” causes cancer.

“These conclusions are hazard analysis-based, not risk analysis-based,” Carpenter stated. Another challenge is the use of antibiotics in food animals as consumers lump all antibiotics into one group. Some in the industry are moving away from antibiotic use but NAMI supports the prudent and judicious use of antibiotics in food animal production to maintain the highest standard of animal welfare practices.

“There is a real need to educate the consumer on antibiotics,” Carpenter noted. “That is a tough challenge.” NAMI is working on building industry transparency to reach millennials and squash some of the bad myths about meat production by posting educational videos on YouTube, social media interaction on Facebook and Twitter, and creating infographics.

Trade is critical to meat producers and agriculture as it keeps industry on a level playing field with foreign competitors, Carpenter commented. Currently, US beef has a 38 percent tariff imposed by Japan, dropping to 9 percent in 16 years, while Australia already enjoys a lower 11 percent tariff.

Around the World
Overseas markets are important to US renderers as another outlet for their finished products besides domestic consumption. NRA’s International Market Development Committee focused on various trade issues at the convention beginning with Kent Swisher, NRA international programs, reporting that Singapore is the biggest global importer of tallow and Australia is the largest exporter of tallow at 473,800 metric tons. US tallow exports are down by over half from 2010 highs at 407,000 metric tons in 2015 but are now being shipped to Singapore for Neste’s renewable fuels facility. Swisher said that use of rendered fats and greases as feedstock in biodiesel and renewable diesel across the globe is growing. In 2010, 2.2 million metric tons (MMTs) were used in the European Union, United States, Brazil, Canada, and China. Forecasts for 2016 show about 6.6 MMTs will be used worldwide with Europe consuming nearly 3.2 MMTs, the United States using 1.2 MMTs, and China turning 1.1 MMT of used cooking oil into biodiesel. In the United States, 80 percent of used cooking oil/yellow grease production was used in global biofuels in 2015.

Peng Li, NRA regional director for Asia, announced that the first shipment of US tallow has arrived in China after the market reopened earlier this year, but more effort is needed for registration of renderers, importers, infrastructure for storage and transportation, and end users such as soap manufacturers. In Taiwan, a ban remains on ingredients from meat, bone, and blood of all species of terrestrial animals in countries with bovine spongiform encephalopathy; however, US feather meal and tallow are allowed to be imported and US porcine plasma is exempt from the ban. Li pointed out that Indonesia is a stable and important market for US renderers who export.

German Davalos, NRA regional director for Latin America, said the association is working with two large feed groups in Mexico to export US ruminant meat and bone meal into the country. The pet food and poultry markets are growing in Mexico so imports of competitively-priced feed ingredients are needed as the country is deficient in raw materials. Costa Rica is now allowing imports of US ruminant meat and bone meal while other Central American countries are still working on regulations to formally do so. Davalos stated that exports of US animal protein meals to Latin America have increased 227 percent since 2003, from 64,492 metric tons to 211,000 metric tons in 2015.

Bruce Ross, Ross Gordon Consultants, reported that the Federation of Oils, Seeds, and Fats Associations (FOSFA) in Europe has put used cooking oil and used cooking oil methyl esters on its list of “banned immediate previous cargos.” The federation claims the action is over concern on the “lack of transparency and traceability of used cooking oil origination.” NRA protested the action to FOSFA, which was rejected. In addition, changes to Europe’s Renewable Energy Directive after 2020 would most likely eliminate the double-counting of waste oils such as used cooking oil. NRA is now working with US allies to ensure the best market conditions for used cooking oil as a feedstock for biofuels in Europe. US renderers exported 150,000 metric tons of used cooking oil to the region in 2014, 130,000 metric tons in 2015, and 113,000 metric tons in the first nine months of 2016.

Reports from other parts of the world provided US renderers with a snapshot of the global industry. Niels Nielsen, president of the European Fat Processors and Renderers Association, reported that renderers in Europe are still struggling due to a feed ban. Presently, only non-ruminant processed animal proteins can be fed to fish. Before proteins can be included in poultry or swine diets, the European Commission wants a reliable method to test finished feed, although renderers want protocols in place to test feed ingredients. Andy Bennett, Australian Renderers Association, explained that China has not yet lifted its ban on Australian poultry meal following an avian influenza outbreak in the country three years ago. In addition, a concern in the Indonesian market is a decree deeming the use of European Union processing conditions for all animal protein meals.

“If this was implemented, the majority of [Australian] traders would be unable to supply product,” Bennett announced. He then confirmed that Neste’s renewable fuels refinery in Singapore has become the major destination for Australian tallow followed by China, Taiwan, and Pakistan. Australia is seeing a slight drop in beef and sheep slaughter due to drought while poultry and pork production is higher because of increased consumption.

Lucas Cypriano, Associacao Brasileira de Reciclagem Animal (ABRA) in Brazil, shared that it has been a busy year in his country with the Olympics held this past summer, ABRA celebrating its tenth anniversary, and corruption in politics being eliminated.

“It’s a completely new country, changed by the people,” he declared. “We’ve learned that complaining works.” On meat production, in 2015, beef dropped 3.1 percent while poultry increased 3.6 percent and swine rose 6.2 percent with forecasts for slight increases in all meat segments this year. Brazilian renderers currently process 12.3 MMTs of raw material – 57.6 percent beef, 32.2 percent poultry, 6.8 percent swine, and 1.2 percent fish – into 2.0 MMTs of fat and 3.3 MMTs of protein meals. Although 141,000 metric tons of Brazil’s meals are forecasted to be exported in 2016, very little animal fat is since it is used in biodiesel, currently mandated at a 7 percent blend rate with Brazil’s petroleum diesel and scheduled to increase to 8 percent in March 2017.

Cypriano has been working on an animal carcass collection program with Brazil’s government for more than three years that is finally moving forward. The earliest the program could be implemented is in 2018 with the potential of 1.7 MMTs of raw material available. There is much support from Brazil’s agriculture department, livestock producers, and the biodiesel industry, which could benefit from more than 300,000 liters of fat per year from these animals. The challenge is whether the government will allow the resulting protein meal to be used in animal feed or if the collection of carcasses will be only a public service.

NRA’s next convention will be held October 23-27, 2017, in San Juan, Puerto Rico.

December 2016 RENDER | back