Overview of the Rendering IndustryKemin Symposium, August 13, 2019

David L. Meeker, Ph.D., MBASenior Vice President, Scientific Services

National Renderers AssociationDirector 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

Many Challenges • Anti by-products bias• Salmonella• Oxidation• ASF, other diseases• Regulation

The State of the Rendering Industry

Ample Opportunities • Sustainability message• Pet food market• Exports

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

• 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.

U.S. Animal Agriculture Annual Production

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in transit or on farms• Restaurant grease• Recalled meat• Outdated retail meat• Butcher shop scraps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.

• 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.

U.S. Animal Agriculture Annual Production

Global Demand for Meat and Eggs, 2005 vs 2050 (in million metric tons)

64

13

10082

62

106

25

143

181

102

Beef Sheep Pork Poultry Eggs

20052050

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

Total Meat Annual Growth 1.3% to 455 MMT in 2050

World Production of Red Meat and Poultry Meat

150200250300350400450500

1996 2003 2010 2017 2024 2031 2038 2045

Million metric tons

FAOSTATS, http://www.fao.org/faostat/en/#data/TP

2050

Projected

U.S. Red Meat and Poultry Production

0

5

10

15

20

25

30

35

40

45

1990 1995 2000 2005 2010 2015 2020 2026

Billion pounds

Broilers

Beef

Pork

Source: USDA/ERS

Source: Projections based on USDA ERS Projections and USDA NASS production reports

U.S. Rendered Production Projections to 2027

4000

4500

5000

5500

6000

6500

7000

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

Thousand Metric Tons

Projected Growth in Rendered Fats 2018 to 2017 is 6.7%

Projected Growth in Rendered Proteins 2018 to 2017 is 6.9%

• 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

International Trade Agreements

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)

20,000

40,000

60,000

80,000

100,000

Source: Statisica 2019

U.S. Biodiesel Production

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Million Gallons

Source: U.S. Energy Information Administration

Commodity Prices of Several Rendered Protein Meals

250

450

650

850

1,050

1,250

1,450

1,650

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Prices in U.S. Dollars per Metric Ton

Porcine Blood Meal Ruminant Blood Meal Feather MealMeat 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

• 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

Rendering Industry Trends

• Food safety plan• Hazard analysis• Required records• Preventive controls

o Cooker validations, operations, recordso Pentobarbital prevention

• Supplier approval program• BSE, CGMP, HA/PC inspections all together• Sanitary transportation readiness

FSMA—What is FDA Looking For

• 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

Renderers’ Job With FSMA

• 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

NRA Resources

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 concerno Possible feed riskso Safety of rendered ingredients not in doubto Biosecurity of farms, transport, visitors

• USDA concerno Disposal of infected or non-infected animals

• Rendering industry concerno Stigma of ASF on by-productso Return to normal operations after quarantineo 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

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 Helps Feed the World by Recycling Responsibly

Rendering Is Sustainability

• 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 Practices Environmental Stewardship Rendering Is Sustainability

• 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.

Renderers Care for Their Communities and Employees

Rendering Is Sustainability

Every Person Can Improve Sustainability!

Rendering Is 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

• Tonnage renderedo GHG avoidedo Water recycledo People employedo UCO collected

• Ingredients made, where soldo Pet food sustainabilityo Livestock and poultry feed sustainabilityo Biofuel produced, used

• Impact of trends, changes

Sustainability Metrics:

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 formo Non-rendered meat by-products used in pet food- quant & formo Other ingredients, substitutes

• Rendering Study (phase 1)o Types and volumes of raw materials renderedo Markets and values- all sectors-feed, biofuel, fertilizer, etc.o Value to animal productiono Threats

Sustainability and Economic Data Projects

• Rendering Study (phase 2)o Types and volumes of energy used in renderingo Extent of use of renewable fuels in renderingo Extent of services to restaurants, food service, groceries, food processing,

farmerso Capital spent for air, water quality and energy efficiencyo Annual maintenance for air, water quality and efficiencyo 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

dmeeker@nationalrenderers.com