On Sunday, May 18, 2003, Humphry Koch was called to the telephone to receive a call that would change his livelihood.
The voice on the phone asked Koch, a top executive at one of Canada’s largest rendering companies, to participate in an urgent, “highly confidential” conference call sponsored by the federal government.
The executive vice-president of Vancouver- based West Coast Reduction Ltd. was about to learn that Canada had a case of bovine spongiform encephalopathy.
Two days later, Ottawa announced publicly that BSE had been found in an Alberta cow, a diagnosis that was confirmed by scientists in Winnipeg and Weybridge, England.
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The North American business of cattle production, meat processing and byproduct rendering was changed forever.
Koch, who at the time was president of the North America-wide National Rendering Association, learned that a BSE-infected carcass had entered Canada’s non-ruminant feed supply.
That meant that Canadian meat and bone meal and products produced from animal byproducts were no longer allowed to move freely across international borders.
Canadian renderers were faced with a loss of markets and a growing stockpile of rendered material.
The industry proposed that the federal government purchase all surplus meat and bone meal from the companies affected “so as to limit the disruption to existing payment patterns within the cattle industry.”
But Koch would later tell National Rendering Association members that government involvement was not in the cards.
“No financial assistance was forthcoming and very quickly we realized we were on our own,” he said.
Canadian renderers, which before May 20 had purchased 2.6 million tonnes of dead stock and slaughter house waste from packers and producers annually, were reviewing their business models.
Change was looming in the rendering industry.
Within months, the practice of paying for animal byproducts and dead stock had ended. Instead, producers and livestock feeders were paying for dead stock removal services.
“Payments for raw materials have ceased,” said Glen Gratton, who operates the Winnipeg arm of Rothsay, a Maple Leaf Foods-owned renderer.
“We can no longer pay because our markets have collapsed for rendered proteins and fats. We are now a disposal service to the livestock and meat industry. We haven’t changed what we do, just the way we do it.”
In Manitoba, bovine waste is being disposed of in landfills because there is no way to separate bovine byproducts from those of other species as is required under new regulations.
“We slaughter very few cattle in Manitoba,” Gratton said. “That is done in Saskatchewan and Alberta or in Ontario and Quebec, so it isn’t a big concern here.”
But it is a big concern in Alberta, where large cattle packers dominate the western Canadian livestock industry.
Cargill’s Robert Meijer said that company’s cattle slaughter facility at High River, Alta., was quickly faced with the reality that it didn’t have markets for meat and bone meal in the animal feeding industry.
“This was an international product. The U.S. border was suddenly closed to us,” he said.
Livestock feed scientists said there is no risk of passing BSE to non-ruminants through meat and bone meal but public opinion and concerns among retailers dried up the market for traditional animal-based feed ingredients.
Eduardo Beltranena, a pork scientist with Alberta Agriculture, said there is no scientific reason to ban meat and bone meal from feeds destined for another species, but it is a complicated message that the public may not be willing to digest.
“There are plant-based alternatives and right now they are replacing the animal proteins and fats,” Beltranena said.
Koch said renderers are adjusting to the new realities.
“Because of the loss of foreign markets, some (Canadian) renderers are taking meat and bone meal to the landfill and prices are rock bottom,” he told the NRA convention in Arizona recently.
Meat and bone meal was selling for $280 per tonne into the swine and poultry markets in April, just before the BSE announcement. In mid-November the price was $40 per tonne.
Meijer said there is some limited uptake on the product by hog and poultry feeders but “unfortunately we are shipping a portion of it to the landfills along with the specific risk materials.”
After BSE was diagnosed in Canada, regulations came into effect that placed greater restriction on the handling of specific riskmaterials, or SRMs, including a requirement that cattle brain, brainstem, spine, nerves from the spine and tonsils be removed and not placed into the rendering chain because there is a chance that these tissues may contain the prion that causes BSE.
Because there are few ways to ensure the destruction of the prion other than high-temperature incineration, SRMs cannot be included in raw rendering materials.
In addition, producers accustomed to receiving nominal payments to have dead stock removed must now pay to have animals picked up.
An average 600-sow hog barn faces an additional $4,300 per year in costs or about 43 cents per finished hog to cover the five cents per pound removal cost.
In Canada, West Coast Reductions Ltd., Rothsay and Sanimal are the biggest names remaining in a rendering industry that has 27 plants nationwide.
The industry has consolidated rapidly over the past two decades due to smaller margins, larger, centralized packers, more sophisticated animal feed and industrial fat and oil products and tighter regulations.
Tougher legislation and an emphasis on animal traceability became hallmarks of the global industry in 1996, when it became clear that BSE, a disease with links to the human brain disorder variant Creutzfeldt-Jakob Disease, was more than just an isolated problem in the United Kingdom.
About 180,000 cases of BSE were diagnosed in the U.K. and a few thousand more were confirmed in continental Europe and around the world.
Japan, a country that has banned Canadian beef since May, has confirmed numerous cases. Most experts agree they are a result of Japan’s reliance of British meat and bone meal that was used in domestic livestock feeding before 1996.
In Canada, rendering is a $400 million a year business that Koch feels will continue to succeed “under a different business model.”
Gratton, meanwhile, said the industry’s future is closely tied to the development of new fuels and agricultural products.
“Our own industry people are working on new uses. Biodiesel could be a big part of the business for the oils and new fertilizers that are being developed from the proteins,” he said.
Koch doesn’t feel that banning rendered products will serve the livestock or meat industries.
Instead, they need a new set of science-based standards, “that recognize the inevitability of occasional cases of BSE and that safeguard human health without unnecessarily jeopardizing trade in meat and rendered products.”