Innovation in the Rendering Industry

Home , Animal fat, Reduction (cooking)

Overview of the Rendering Industry Kemin Symposium, August 13, 2019 David L. Meeker, Ph.D., MBA Senior Vice President, Scientific Services National Renderers Association Director of Research Fats and Proteins Research Foundation The State of the Rendering Industry

• Growth of Animal Ag • Volumes Up • Prices Down • Demand Good • Bumpy Global Trade The State of the Rendering Industry

Many Challenges

• Anti by-products bias Ample Opportunities • Salmonella • Sustainability message • Oxidation • Pet food market • ASF, other diseases • Exports • Regulation NRA Member Rendering Plant Locations 2017 The Rendering Industry (U.S. and Canada) • 170 facilities in the U.S. and 10 in Canada • $10 billion annual revenue (at least, depending…) • 27.5 MMT (62 billion lb) raw material each year • 77 million kg raw material each day U.S. Animal Agriculture Annual Production

• 29.3 million cattle (49% of live wt. not used for human food) • 115.5 million hogs (44% not used for human food) • 2.3 million sheep and lambs (46% not used for human food) • 8.8 billion chickens (37% not used for human food) • 232.4 million turkeys (36% not used for human food) • 27.7 million ducks (30% not used for human food)

More than 56 billion lb. rendering raw material produced in the U.S. More than 6 billion lb. produced in Canada.

2015 USDA slaughter numbers data; dressing percentage estimates from literature. Processing methods vary. The industry converts more than 27.5 MMT (62 billion lb.) of animal by-products into usable commodities annually. More than 5 MMT each: • Highly valued protein supplements for livestock, poultry, pets • Tallow and animal fats for the manufacture of fatty acids and as a source of energy in feed rations. Raw Materials

• Offal • Bones and fat • Blood • Feathers • Animals dead on arrival, in transit or on farms • Restaurant grease • Recalled meat • Outdated retail meat • Butcher shop scraps Turning This: Into This: Examples of Animal Fat and Protein Products Examples of Animal Fat and Protein Products Rendering is Cooking and Drying

• Continuous flow or batch • Steam cookers • 115º to 145º C. for 40 to 90 minutes (245º to 290º F.) • Inactivation of bacteria, viruses, protozoa, and parasites. U.S. Animal Agriculture Annual Production

More than 56 billion lb. rendering raw material produced in the U.S. More than 6 billion lb. produced in Canada.

2015 USDA slaughter numbers data; dressing percentage estimates from literature. Processing methods vary. Global Demand for Meat and Eggs, 2005 vs 2050 (in million metric tons)

181 2005 2050 143

106 100 102 82 64 62

25 13

Beef Sheep Pork Poultry Eggs

Total Meat Annual Growth 1.3% to 455 MMT in 2050

Source: Food and Agriculture Organization of the United Nations, ESA Working Paper No.12-03, p. 131 World Production of Red Meat and Poultry Meat

Million metric tons 500 450 400 350 Projected 300 250 200 150 1996 2003 2010 2017 2024 2031 2038 2045 2050

FAOSTATS, http://www.fao.org/faostat/en/#data/TP U.S. Red Meat and Poultry Production

Billion pounds

40 Broilers

35 30 Beef 25 20 Pork 15

0 1990 1995 2000 2005 2010 2015 2020 2026

Source: USDA/ERS U.S. Rendered Production Projections to 2027

Thousand Metric Tons 7000 Projected Growth in Rendered Fats 2018 to 2017 is 6.7% 6500

6000

5500

5000 Projected Growth in Rendered Proteins 2018 to 2017 is 6.9% 4500

4000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Source: Projections based on USDA ERS Projections and USDA NASS production reports International Trade Agreements

• NAFTA worked well for renderers • Rendered product exports since 1990: – + 460% to Canada – + 180% to Mexico • New USMCA - Congress must approve • Gained opening for U.S. ruminant MBM into Mexico ($30 mil market) – Details underway Global Production, Consumption, Exports of Fishmeal (1987-2017)

Source: USDA/FAS PS&D Aquaculture Production

Source: 2016 State of the Worlds Fisheries and Aquaculture, FAO U.S. Exports of Rendered Animal Proteins U.S. Exports of Tallow

* Neste, The world’s largest biodiesel plant is in Singapore U.S. Exports Used Cooking Oil and Yellow Grease Global biofuel production from 2000 to 2018 (in thousand metric tons of oil equivalent)

100,000

80,000

60,000

40,000

20,000

Source: Statisica 2019 U.S. Biodiesel Production

Million Gallons 2000 1800 1600 1400 1200 1000 800 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: U.S. Energy Information Administration Commodity Prices of Several Rendered Protein Meals

Prices in U.S. Dollars per Metric Ton 1,650

1,450

1,250

1,050

850

650

450

250 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Porcine Blood Meal Ruminant Blood Meal Feather Meal Meat and Bone Meal (Porcine) Meat and Bone Meal (Ruminant) Poultry By-Product Meal (57% Protein) Poultry By-Product Meal (67% Protein) Reference: Render Magazine, April 2019 Rendering Industry Trends

• Species separation into dedicated lines or plants • Lines or plants dedicated to fallen stock • Lines or plants dedicated to pet food ingredients • Additional specifications common • New premium animal protein definitions desired FSMA—What is FDA Looking For • Food safety plan • Hazard analysis • Required records • Preventive controls o Cooker validations, operations, records o Pentobarbital prevention • Supplier approval program • BSE, CGMP, HA/PC inspections all together • Sanitary transportation readiness Renderers’ Job With FSMA

• Train employees (and document training) • Re-emphasize and enhance Current GMPs • Build a strong and positive food safety culture • Re-evaluate current FDA-compliant food safety plans to ensure effectiveness when necessary • Keep records that prove food safety and corrective actions NRA Resources

• Cooker Validation (Provided by FPRF Research) • Example Food Safety Plan • “Inspection Smarts” video • Salmonella Training Kit • APPI Rendering Code of Practice/PCQI Training • Assist renderers with hazard analysis Cooking and Drying Works

• Continuous flow or batch steam cookers • 245º to 290º F for 40 to 90 minutes • Inactivation of bacteria, viruses, protozoa, and parasites Validation of Rendering as a kill-step

• Validating that Salmonella, Clostridium perfringens, E. Coli are killed during rendering • Building a database of thermal validation information for determining necessary thermal processing temps. • Clemson, Texas A&M, Colorado State, Texas Tech African Swine Fever threat

• Pork industry concern o Possible feed risks o Safety of rendered ingredients not in doubt o Biosecurity of farms, transport, visitors • USDA concern o Disposal of infected or non-infected animals • Rendering industry concern o Stigma of ASF on by-products o Return to normal operations after quarantine o Planning ahead with USDA NRA Pentobarbital Response • No renderer ever purchased or used pentobarbital • NRA Petitioned FDA for:  More veterinary education, awareness  Tolerance or action level  Withdraw approval for horses, cattle • NRA Pentobarbital Response Kit for members • Assure pet food industry it can be controlled • Work to preserve dead stock services FPRF Pentobarbital Response

• Research on quick tests  If successful, the test kits would be used by renderers to test deadstock animals which may have been euthanized using pentobarbital and reject those containing residues.

• Data to assist renderers with hazard analysis  A thorough literature review --information necessary for renderers to conduct hazard analysis and apply preventive controls required under FSMA  Could provide a basis for a tolerance level to be established Fats and Proteins Research Foundation

• Founded in 1962 • Direct and manage a research process that results in an enhanced current usage and the development of new uses for rendered animal products – Nutrition, biosecurity, food safety, non-feed uses, biofuel • Completed more than 660 projects Innovation in the rendering industry

• Robust research program • Funding streams • At-large • ACREC • Targeted • New ways Important Areas of Research for the Rendering Industry

• Food safety • Animal nutrition • Sustainability • Novel technologies • Rendered products in pet food Current Projects

• Animal Fats for Pig and Poultry Nutrition • Avoiding Residues in Rendered Products • Odor Control Using Biodegradable Microparticles • Making Omega-3 Fats From Rendered Fats • Improving Waste Water Treatment • Novel Uses for Rendered Products • Joint projects with: – Pet Food Institute – National Pork Board – Poultry Proteins and Fats Council – American Feed Industry Association Rendered Products in Pet Food

• While food safety and animal nutrition are very important to the use of rendered products in pet food, the area of pet food functionality deserves its own research emphasis area − Fast growing pet food market, high value category − Value added opportunities for rendered products • Opportunities: − Control of oxidation − Extending shelf life − New ingredients extracted from by-products − New consumer-friendly ingredient definitions • Recent meeting June 26-28, 2019 in Colorado Key Pillars of the FPRF/CSU Pet Food Alliance

• Focus on uniting members of the pet food and rendering industries • Engage a with and encourage widespread participation from additional industry members • Facilitate research guided by industry input to address real-world industry challenges • Establish multidisciplinary collaborations with academia and industry • Proactively engage in building industry sustainability, across all efforts Alliance Action Items for 2019 • Oxidation and Maintenance of Product Quality - Determine why PV is utilized and what threshold is used - Investigate better methods, decrease variation • Salmonella and Other Threats to Product Safety - Gather information industry practices - Develop GMPs around transportation and storage (Best Practices) - Gather info about human supply chain—do they follow the same rules? - Research mitigants of Salmonella in pet food • Consumer Perception - Engage AAFCO to set the stage for change - Invite more pet food companies to PFA Meetings - Better understand the market • Industry Sustainability - Generational engagement of undergraduate fellows/interns - Identify model for bridging generations and transitioning into new eras Rendering Is Sustainability Rendering Helps Feed the World by Recycling Responsibly

220 pounds of animal by-products per person per year is recycled by rendering.

Rendered fats and proteins used for animal feed ingredients replace corn and soybeans from 7.5 million acres of average quality U.S. crop land. Rendering Is Sustainability Rendering Practices Environmental Stewardship

• Rendering sequesters 5 times more greenhouse gas (GHG) emissions from the environment (such as carbon dioxide) than it emits—equivalent to removing more than 12 million cars from the road each year.

• Rendering evaporates 4 billion gallons of water a year from animal by-products during cooking. This water meets federal, state and local standards for quality and safety when returned to rivers and streams. Rendering Is Sustainability Renderers Care for Their Communities and Employees

• More than $500,000 invested annually in FPRF research to improve rendering processes, products, and efficiencies.

• Rendering provides jobs, supports charities, offers essential recycling services, and improves the quality of life.

• Pickup of used cooking oil protects sewer and wastewater systems and water quality. Rendering Is Sustainability Every Person Can Improve Sustainability!

• Buy pet products containing meat by-products. • Avoid food fads that lack scientific grounding, such as animals fed strictly vegetarian diets. • Support food waste and cooking oil recycling that puts these resources to the highest value use, such as use in animal food. Sustainability Basics:

• Use all of every animal for the highest purpose • Stop “badmouthing” by-products • Stop “badmouthing” meat by-products in poultry and livestock diets • Produce efficiently and conserve resources • Respect the environment • Treat people right • Tell your story Sustainability Metrics:

• Tonnage rendered o GHG avoided o Water recycled o People employed o UCO collected • Ingredients made, where sold o Pet food sustainability o Livestock and poultry feed sustainability o Biofuel produced, used • Impact of trends, changes Sustainability and Economic Data Projects

• Pet Food Ingredient Study (3-way partnership with PFI and AFIA) o Rendered products used in pet food- quantity and form o Non-rendered meat by-products used in pet food- quant & form o Other ingredients, substitutes • Rendering Study (phase 1) o Types and volumes of raw materials rendered o Markets and values- all sectors-feed, biofuel, fertilizer, etc. o Value to animal production o Threats Sustainability and Economic Data Projects

• Rendering Study (phase 2) o Types and volumes of energy used in rendering o Extent of use of renewable fuels in rendering o Extent of services to restaurants, food service, groceries, food processing, farmers o Capital spent for air, water quality and energy efficiency o Annual maintenance for air, water quality and efficiency o Data such as reduction in carbon footprint, air & water qual Sustainability and Economic Data Project Costs

• Pet Food Ingredient Study (3-way partnership) o NRA, PFI, AFIA- $33,417 each • Rendering Study (phase 1) o NRA- $108,500 • Rendering Study (phase 2) o NRA- $38,000 Sustainability Contact [email protected]