In today’s society of the “conscious consumer,” sustainability of companies and industries is paramount. Fortunately, as recyclers of animal by-products where every part of a food-producing animal is used, rendering is one of the most sustainable industries and has been for generations. Yet renderers aren’t getting credit for their important role in society. It’s time for them to tell their story.
This was the message repeatedly heard by over 300 industry representatives who attended the National Renderers Association (NRA) 84th Annual Convention in Santa Barbara, California, in October. The group’s communications committee is working on talking points to help tell their good story, such as:
• Consumers use rendered products every day in soaps, paints, varnishes, cosmetics, and pharmaceuticals, just to name a few.
• The rendering process’ intense heat promotes biosecurity, making animal food ingredients safe for livestock and pets.
• A third of the biofuels produced in the United States (US) use animal fats and recycled oils as a feedstock.
• Rendering of animal by-products sequesters at least five times as much greenhouse gases as it emits and produces far fewer emissions than landfilling or composting.
• Rendering companies support their communities with jobs, taxes, and involvement.
Other individuals also believe renderers have a valuable story to tell. Damian Mason, a speaker on business and agriculture, told convention attendees that renderers give Americans the lifestyle they want by recycling the meat by-products they don’t consume.
“The good news is that only two percent of Americans are vegetarians so people still want meat,” he revealed. Mason encouraged renderers to view themselves as a product and a brand, and promote themselves as the American businesses they are that provide good paying jobs and a service to animal agriculture. He also urged them to look at their industry creatively much like other industries have, such as Starbucks reinventing how consumers drink coffee and the way Uber and Lyft have provided alternatives to taxis.
“Renderers need to jump on the food waste movement as 44 percent of all food is wasted,” Mason added. “Don’t be afraid to try something new. It will not kill you!”
Highlighting demographics was Ken Gronbach, KGC Direct LLC, who informed renderers that the 86 million millennials (ages 18 to 32) are the “generation of pets,” animals that need food that rendered ingredients provide. This generation also makes purchases based on cause and will embrace rendering’s green story. Gronbach noted that generation X (ages 33 to 52) has more than nine million fewer people than the baby boomers (ages 53 to 62) so embrace these employees or your competitor will steal them.
Trent Loos, Loos Tales and a rancher from Nebraska, said rendering adds value to the food chain and reiterated that consumers make purchasing choices based on how it makes them feel.
“The answer to telling rendering’s story is to tell your story over and over and over again,” Loos commented. “Become your own ambassador. You add value to every bit of the animal.”
Randy Blach, Cattlefax, is always a favorite speaker at NRA’s conventions and he brought good news, showing how the US cattle inventory is rebounding and animals are continuing to get heavier. Commercial cow slaughter is projected to increase by one million head through 2020 while steer and heifer numbers are slated to grow by nearly three million head over a four-year period to levels not seen since 2007.
“These numbers mean continued material coming to your rendering plants the rest of the decade,” Blach stated. However, with no new packing plants of scale coming online soon, current capacities will be tested.
On the pork side, four million more pigs – resulting in 126 million head – are expected to be slaughtered next year. Since 1980, pork production has increased 1.3 percent per year on average. Total commercial broiler slaughter is predicted to be over nine billion head next year, up nearly two percent from 2017. Since 1980, poultry production has seen a 3.6 percent annual growth rate.
“We love protein,” said Blach. “Numbers show substantial growth in all meat sectors with lots of raw material and tremendous opportunity for growth.” However, exports will be key moving forward and animal agriculture is concerned about North American Free Trade Agreement (NAFTA) negotiations. US meat and poultry exports total 15.8 billion pounds valued at $15 billion with 40 percent of all meat exports going to Mexico and Canada.
“NAFTA is a big deal,” Blach confirmed.
NRA also conducted business meetings during the convention, focusing on the challenging export markets for rendered products, government support to help grow the biofuels industry, and hurdles to meeting new requirements under the Food Safety Modernization Act (FSMA).
David Meeker, NRA scientific services, said the direction of the Animal Protein Producers Industry was established long before FSMA and has proven beneficial toward complying with the regulation. One concern under the act is that required hazard disclosure statements can often conflict with the rendering process.
“Rendering controls the hazard but rendering does not control the recontamination,” said Ansen Pond, Pilgrims. “The end goal is to produce a safe product and rendering does that.”
Steve Howell, M4 Consulting, told members of NRA’s Biofuels Committee there is currently a biodiesel plant in almost every state in the country providing production capacity of nearly four billion gallons. He explained the trade case filed earlier in the year by the National Biodiesel Board coalition was not so much about imports of biodiesel but about creating a fair market as inputs for fuel produced in Argentina and Indonesia are cheaper than US producers can make the alternative fuel. Nearly one-third of biodiesel consumed in the United States in 2016 was imported. Howell declared that the biodiesel industry should be inclusive of all feedstock as all fats and oils are needed in order to advance the industry.
Steve Kopperud, Policy Directions, believes there is a very good chance the biofuel tax credits that expired at the end of 2016 will not be renewed by Congress any time soon.
“If you want it, find a way to pay for it,” is the tax reform mentality among legislators, he stated. Members of the NRA Legislative Committee expect less tax reform and more tax cuts coming from Congress, and support House of Representatives Bill 2946 that aims to repeal the 12 percent excise tax on heavy trucks, trailers, and tractors, the highest excise tax on any one industry or item.
Reports from around the world highlighted the challenges and opportunities faced by renderers in other countries. Niels Leth Nielsen, European Fat Processors and Renderers Association, shared that although there are only a few cases of bovine spongiform encephalopathy in Europe, the government has accepted there will continue to be a low level of spontaneous or atypical incidents in the region. Andy Bennett, Australian Renderers Association, reported that renderers down under continue to have market issues with poultry meal in China and Indonesia despite Australia not having a case of avian influenza in years. Tallow prices and production in Australia are down due to a drop in beef slaughter while poultry is experiencing higher growth in consumption. Bennett revealed that in New Zealand four rendering plants have closed in the last two years due to diversification and consolidation as more production moves to independent rendering companies.
Lucas Cypriano, Associacao Brasileira de Reciclagem Animal (ABRA) in Brazil, showed how beef and poultry production have dropped slightly over the past two years while pork has increased by 2.5 percent and 5.1 percent in 2015 and 2016, respectively. Brazil has created a national biodiesel program that has inflated tallow prices significantly, from $350 per metric ton (MT) to nearly $900 per MT. Started in 2003, the program has set biodiesel inclusion rates in the nation’s diesel pool from a mandatory two percent in 2008 to the current eight percent inclusion rate.
“In my opinion, this tallow price is not sustainable,” Cypriano commented. “But the policy is good for renderers and there is hope it will stay in place.” The mandate increases to 10 percent in March 2018 with thoughts that a higher inclusion rate of 15 percent is possible. Brazil’s rendering industry is still emerging with a lot of raw material currently not collected.
NRA regional directors shared conditions around the world affecting US rendered product exports. Kent Swisher, NRA international programs, reported that animal protein and tallow exports so far in 2017 are trending upward, with Singapore’s imports of US tallow jumping 195 percent due to renewable diesel producer Neste.
German Davalos, NRA regional director for Latin America, said members of a fish-free feed challenge see an urgent need to find alternative sources of protein in order for the aquaculture industry to further develop. He showed that between 2001 and 2016, Latin America’s pet care industry grew at an average rate of six percent and that Mexico is the second largest producer of pet food after Brazil at 930 million MT per year. In 2016, Mexico saw 11 percent pet food growth in volume and 10 percent in value.
Peng Li, NRA regional director for Asia, divulged that Indonesia is the largest and most important market for animal proteins as its total feed production in 2016 was 18.8 million MT and total aqua feed production was 1.6 million MT. China soap industry imports of US tallow continues to remain stable at 1 million MT per year.
Bruce Ross, Ross Gordon Consultants SPRL, said a new proposed renewable energy directive in the European Union (EU) does not include the current 10 percent mandate in transportation fuels after 2020 nor does it include double-counting for waste fats and oils used in renewable fuel production. This proposal means an uncertain future for used cooking oils and fats in EU biofuels and leaves renewable fuel decisions up to individual member countries. Currently, the EU biodiesel industry is in the “doldrums,” Ross commented, operating at 55 percent of capacity, a situation that will not improve due to recently reduced duties on imported biodiesel from Argentina.
Overall, the mood of US renderers at NRA’s convention was encouraging with many new faces attending for the first time as the industry continues to provide valuable and sustainable services and products to the livestock industry, feed manufacturers, and renewable fuel producers.
December 2017 RENDER | back