Current Topics – Perfect Storm Current Topics – Perfect Storm? March 4, 2017 PCRA Meeting Carmel Valley, CA

Food Safety Modernization Act FSMA Basics Food Safety Modernization Act We make Animal Food according to FSMA. FSMA defines Animal Food as: “Food for animals other than man and includes pet food, animal feed, and raw materials and ingredients.”

Perfect Storm Brewing for Rendering? Export requirements dictated by importing country Trends: No By-Product All Veg diets Food Waste Perfect Storm Brewing for Rendering? FSMA FDA Ingredient Review AAFCO definitions & inspections The point is… FSMA is not the only issue that is changing our business.

More markets for US products needed Export Issues More markets for US products needed Ruminant MBM continues to be banned in key markets, such as Mexico Indonesia & APHIS approval needed China – documentation burdensome and invasive Antibiotic residue-free Occurrence of reportable animal diseases FSMA – retaliation Foreign Supplier Verification Program?

Trends May be driven by marketing Counterintuitive Sustainability is a trend but many marketing strategies conflict with sustainability Shape consumer perception while ignoring science/nutrition No By-Products in Pet Food All vegetarian diets fed to poultry and swine “Feather meal” from poultry fed no ruminant proteins 4D/3D-free animal proteins and fats Repercussions from law suits over marketing claims PCR testing to show purity or exclusions Sensitive – need to have tolerance Veterinarians not understanding process controls Assume rendered products spread disease without facts to support assumptions Reduce material going to land fills

The Pack is not always headed in the right direction

Some trends don’t make sense

FDA Ingredient Review Verify safety of approved ingredients May require New Animal Feed Application Want label transparency Buyer needs to know what he is buying Focus on adulteration – product safety and economic Driving AAFCO definitions Redefined animal fats Deleted Fat product Feed grade Modified Animal Fat definition Tallow = Beef fat White Grease = Pork Fat Used Cooking Oil Yellow Grease (Animal Fat + UCO) Trap Grease prohibited in animal feed Protein meals???? Opportunities???

Animal Food Safety Plan Required by FSMA Is More Than HACCP – Now HARPC Hazard Analysis Preventive Controls Personnel hygiene & training Plant Ops, maintenance & grounds Holding & distribution Processes & controls Equipment & utensils design, use & maintenance Holding & distribution of human food for animal food CGMP Food Safety Plan Recall Plan Process Control Other Controls Supplier Programs Sanitation Control Other Controls are CGMPs & Other Prerequisite Programs required to make safe animal food. CGMP – Current Good Manufacturing Practice

FSMA NRA doing good job helping industry prepare New Acronyms CGMP – Current Good Manufacturing Practices FSP – Food Safety Plan PC – Preventive Controls QI – Qualified Individuals PCQI – Preventive Control Qualified Individuals HA - Hazard Analysis RA – Risk Assessment HARPC – Hazard Analysis Risk-Based Preventive Controls How will customers react when we cannot guarantee salmonella free? § 507.36 - Disclosure in shipping documents that the animal food is “not processed to control [identified hazard]” Requirement to obtain written assurance that customer has procedures to minimize or prevent the identified hazard delayed.

AAFCO Definitions and Inspections AAFCO feed definitions Process flawed Does not follow rulemaking process Consensus (influenced by FDA) driven Lack scientific or nutritional basis “By-Product” label Poultry Meal Not superior to Poultry By-Product Meal except on perception & price Some in pet food industry hope NRA will drive revising definitions for animal proteins i.e. byproducts are OK States adopting FSMA regulations

What do these threats have in common? All require greater assurance of: Transparency Traceability Product safety Controls over process & RM Disease control Awareness of what rendering does

Industry Issues to Address Potential changes in FDA compliance policy 3D and 4D material Driven by pentobarbital recall of dog food. FD&C Act does not permit in animal food FDA uses regulatory discretion to allow if processed with heat Driver may be controlling chemical rather than microbial hazards CVM or DO approval required before diverting adulterated human food to animal food USDA relies on rendering to address condemned/recalled/contaminated meat Would Hazard Analysis and Risk Assessment identify these as hazards requiring a preventive control? With FSMA, are changes in policy warranted? Food Waste reduction legislation – Federal and state

Fixes? NRA lead coalition to fix inaccurate or misleading ingredient definitions/names Encourage FDA to allow certain raw materials and/or adulterated human foods to be used in animal feed with evidence an appropriate food safety plan is in place. Delay requirement for disclosing hazards not controlled until certification that customer is able to control the hazard is required. Target industry compliance to FSMA to meet or exceed level achieved for BSE Industry standards for facility biosecurity to reduce chance of spreading animal disease from the rendering plant to feed mills/customers. Educate legislature that meat and UCO waste is not a part of the food waste issue.