Challenges Loom in the Year Ahead

By Nancy Foster, President, National Renderers Association

January means a new year with all its possibilities. Unanticipated events will challenge and test the rendering industry so now is the time to take stock and look at what is ahead in the next 12 months. Solid groundwork was laid in 2015 for what the National Renderers Association (NRA) expects to work on in the coming year. Of course, even with the best planning, “expect the unexpected” and NRA will be prepared to meet it.

The association’s core purpose is to deliver value to the North American rendering industry so rendered products can be marketed domestically and internationally without undue burdensome and restrictive regulations and laws. NRA members recognize the need for a strong industry voice.

NRA’s mission in its new strategic plan is to advocate for a sustainable food chain, public health, and the environment through the production and marketing of rendered products and services. To accomplish this, NRA:

• promotes effective public policy, regulation, and technology;
• encourages responsible business practices;
• supports free movement of rendered products in domestic and international markets; and
• improves stakeholder awareness and understanding of the value of rendering.

For the past 81 years, NRA has represented and stood up for the industry, sometimes against great odds. Today, it is the only national industry organization dedicated exclusively to the interests of the rendering industry.

Renderers face numerous challenges: some are the same while new ones keep coming up. The industry’s platter is always full.

This year began with a challenging business and political environment. Product prices are not nearly where renderers would like them to be. Congress has great difficulty getting its approved bills signed into law and an activist Obama Administration is using executive orders to implement its agenda, bypassing Congress. National elections are this fall and the United States (US) electorate is deeply divided. President Barack Obama will attempt to cement his “legacy issues” into regulation this year, such as climate change, gun control, immigration, healthcare, the environment, and the Trans-Pacific Partnership free trade agreement. Add specific rendering issues to this mix, including large corn stocks, tight beef raw materials, plentiful competing fats and oils, a strong US dollar, and foreign trade barriers, and 2016 will be a challenging year.

New rules to implement the Food Safety Modernization Act (FSMA) continue to be a high priority for NRA. With the final regulation issued last year, 2016 will see Food and Drug Administration require compliance starting this fall. NRA is working with the agency to help develop training materials for plant inspectors to ensure they understand rendering. By law, large companies must comply with FSMA’s Current Good Manufacturing Practices for animal food products by September 18, 2016, small operations by September 18, 2017, and very small companies by November 16, 2018. NRA is a great resource to answer questions to help renderers become compliant.

FSMA is a good example of how NRA remains constantly vigilant on regulatory and legislative efforts at the national and state level. The association provided input into the process and shared its policies and positions with key officials.

NRA has updated the Animal Protein Producers Industry (APPI) North American Rendering Industry Code of Practice to include changes required by FSMA so renderers certified under the code’s new standards will know they are in compliance with the law. NRA also collaborated with the American Feed Industry Association (AFIA) to align the Code of Practice with AFIA’s Safe Feed/Safe Food program so that one audit will receive both AFIA and APPI certification.

The best way for renderers to prepare for FSMA requirements is to attend the upcoming NRA/APPI Code of Practice training in June and have rendering plants audited. The training includes what renderers need to know and do to comply with the new regulations. Details will be sent out to NRA members soon.

Growing and maintaining the export market for rendered products is an important role for NRA. Exports are vital, with 19 percent of total production exported (over 18 percent of animal proteins and 20 percent of fat). Top markets are Mexico, China, Indonesia, Canada, the European Union (EU), and Singapore.

NRA operates 45 projects in 57 countries, two overseas offices (in Hong Kong, China, and Mexico City, Mexico), and nine consultants in aquaculture, poultry, pet food, and EU policy. This strong outreach is funded jointly by NRA and the US Department of Agriculture (USDA). Each year, NRA receives approximately $1.7 million from two USDA programs – Foreign Market Development and Market Access Program. NRA is required to contribute sizeable funds to cost-share its activities with USDA as a condition of receiving these federal grants. NRA’s overseas programs enable the industry to have a unified effort to grow its exports. The association will continue to urge Congress to fully fund USDA’s export programs this year.

Overseas sales of rendered products – and resulting domestic disappearance – benefit the entire rendering industry, even those not directly involved in exports. Gaining market access by reducing foreign trade barriers is a top NRA priority. Rendered products face numerous non-tariff technical trade restrictions often based on questionable science driven by political expediency. NRA works closely with USDA, the Office of the US Trade Representative (USTR), and other government agencies to press trade negotiators to open markets so renderers have a fair opportunity to compete.

To start the new year and his new NRA chairmanship role, Tim Guzek, Sanimax, came to Washington, DC, to work on lifting two important trade barriers to rendered product exports. He and NRA staff met with USDA Chief Veterinarian John Clifford to urge approval of a draft small ruminant rule to allow US imports of small ruminants and their products in compliance with World Organization for Animal Health standards. Without this rule, imports of these animals and products from countries affected by bovine spongiform encephalopathy (BSE) and/or scrapie are severely restricted. This means renderers from Canada who might have small ruminant material in their yellow grease and/or tallow cannot export to the United States. USDA’s draft small ruminant rule is at the Office of Management and Budget for review. Once approved, USDA will publish the proposed rule for public comment, hopefully later this year.

Another non-tariff technical trade barrier facing the US rendering industry is the inability to export tallow to the EU for industrial purposes due to Europe’s concerns about BSE. This tallow would not be used for feed, but instead for biodiesel and oleochemicals. During his visit to Washington, DC, in early January, Guzek and NRA staff met with USTR to emphasize the importance of opening up the EU market during current negotiations on the Transatlantic Trade and Investment Partnership free trade agreement. The industry’s negotiators are in full support and will press the case during talks with the EU. This represents a $200 million-plus market opportunity for US rendered fats.

Since the biomass-based diesel market has become important for rendered fats and oils, it is a priority for NRA. Renderers supply 22 percent of the feedstock for US biodiesel and renewable diesel. Over the past two years, NRA emerged with a clear position in support of biomass-based diesel that enabled the association to advocate in favor of a strong Renewable Fuel Standard (RFS) and biodiesel tax credits in Congress. In late 2015, NRA was encouraged the Environmental Protection Agency (EPA) established a positive RFS for the next several years and Congress extended the tax credits through the end of this year. NRA continues to partner with the National Biodiesel Board to support biomass-based diesel.

Renderers also continue to be challenged by new environmental regulations on water and air that could increase operating costs. For example, EPA’s recent rule on waters of the United States represents a vast expansion of federal authority. NRA opposes such unreasonable regulations.

Food waste is becoming a national issue. Renderers in some states, such as California, already face the challenge of retaining meat and bone for rendering rather than losing it to subsidized composting or anaerobic digestion. The Food Recovery Act has been introduced in the House of Representatives to reduce the amount of food wasted each year. The bill would establish composting as a conservation practice eligible for financial and technical support under USDA programs. An infrastructure fund would also be established to support construction of large-scale composting and food waste-to-energy facilities in states restricting food waste going to landfill. NRA is working to educate decision-makers about the higher value end product from rendering compared to composting and anaerobic digestion. The concern is that with incentives to divert produce and other food waste to these alternative disposal means, grocery stores may also add meat and bone that should go to rendering.

Within NRA this year, staff will work on implementation of the new strategic plan that was adopted by the NRA Board of Directors last fall. Sustainability, increasing awareness about the value of rendering, encouraging markets here and abroad, and promoting product safety are major focus areas.

Another NRA priority this year is to continue enhancing coordination with the Fats and Proteins Research Foundation to ensure cross-pollination of ideas and scientific information.

As you plan your 2016, be sure to include NRA meetings on the calendar. All members are welcome to attend. NRA’s spring meeting of the board of directors and committees is April 19-21 at Reynolds Plantation at Lake Oconee in Greensboro, Georgia. NRA’s annual Washington, DC, Fly-in is June 13-15 with policy briefings by senior government officials and congressional meetings on rendering issues while the Code of Practice workshop is June 21-23 in Denver, Colorado. NRA’s widely attended annual convention is October 17-21 in Amelia Island, Florida. I encourage you to join us.

If you are not a member of NRA, why not? I have been here over two years now, not long enough to know all the reasons companies choose not to join or renew their memberships, but that was then and this is now. The association is looking forward with energy and enthusiasm to 2016 and is committed to serving every member of NRA. We must all join together to have a stronger industry.

February 2016 RENDER | back