United States-New laws hit rendering industry.
UNITED STATES-ADDED COSTS ON BY PRODUCTS.
The Food and Drug Administration’s final expanded feed ban rule is no doubt causing a lot of headaches in the beef and dairy industries, from producers to packing plants to rendering companies. But, for at least one renderer, the ruling has created opportunity to develop new value-added products.
The final FDA ruling, which goes into effect April 27, prohibits the use of brain and spinal cord material from all beef and dairy cattle older than 30 months in feed and food, including pet food and feed for poultry, swine, and other non-bovine livestock. The purpose of the ruling is to protect the livestock industry from bovine spongiform encephalopathy (BSE, or Mad Cow Disease), says Sam Holland, DVM, South Dakota’s state veterinarian.
"We don’t have BSE or Mad Cow," he says. "This is a just a safeguard, similar to import policies and the surveillance program."
However, there is concern as to how the forced changes in the way carcasses of these older animals are to be handled, will affect particularly producers and small packing plants, Holland said.
"I’d say, that’s probably the biggest and most difficult part of this," agrees Curt Zimmerman, livestock development supervisor for the Minnesota Department of Agriculture.
Initially, the concern centered on whether rendering companies would continue to accept animals older than 30 months, Holland said. In order to comply with the FDA ruling, most renderers must choose to remove the brain and spinal cord from these animals before processing, which proves cost-prohibitive for many plants. And if renderers do continue processing these older animals, a portion of that added cost from handling and age verification will almost certainly be passed down to the producer and packing plants.
"Can we afford these additional fees?" Zimmerman asks.
Fuel Opportunity
This is one reason why Zimmerman is excited to see the direction southwest Minnesota’s Central Bi-Products is taking in finding new ways of using the products that can be rendered from the carcasses of cattle older than 30 months, with the hope to lessen the effects of the FDA ruling on the company itself as well as producers. With facilities in Redwood and Long Prairie, Central Bi-Products is a division of Farmer’s Union Industries LLC, and serves the southern half of Minnesota and eastern South Dakota.
Don Davis, president/CEO of Farmer’s Union Industries, says the company has explored many ways of handling cattle older than 30 months. Removing the brain and spinal cord is not a cost-effective option for Central Bi-Products. However, neither is discontinuing pick-up of these older animals.
Central Bi-Products will be leaving the brain and spinal cord intact but diverting these carcasses to an isolated part of its complex to ensure no co-mingling between older and younger animals. Here, in isolation, "the older animals will be rendered just like usual" in an existing cooker moved to that location, Davis said.
Because none of the final products can be used in feed, the animal fat will be used in the plant’s boilers as replacement for natural gas - which is already being done at Central Bi-Products, Davis said. The question-mark rests with what to do with the protein.
"We’re not 100-percent sure what we’re going to do with the protein," says Davis. "We’re talking with a couple companies that could use it as fuel. But, we need to determine its BTU [a measure of energy] first. We’re also looking at burning it ourselves for energy, landfilling it, or making fertilizer."
That Central Bi-Products will continue serving South Dakota "is very good news," Holland says. And Zimmerman comments that he hopes Central Bi-Products "will be able to come up with other products."
However, passing along some of the additional cost, mostly in transporting the animals to the isolated facility, to producers and packing plants is unavoidable. Starting April 1, Central Bi-Products will be charging $35 per animal older than 30 months or for animals whose age cannot be verified, Davis adds.
Zimmerman has organized a rendering study group, which is discussing financial assistance for producers, but said this possibility mainly pertains to alternative on-farm carcass disposal options such as burning, burying, and composting. Another disposal option available to producers is using regional landfills, Holland says, although this includes a charge to the producer.
