Extra Income

By Deborah R. Huso
Progressive Farmer Contributing Editor

Once a stepchild of the industry, the business of recycling agricultural byproducts has found new relevance today in a culture increasingly focused on sustainable agriculture and reducing waste.

"Rendering places a lot of commercial value in agriculture," said J.J. Smith, president of Valley Proteins, Winchester, Virgina. "There is no other industry where you put this much value back into livestock. For a beef producer, for example, a lot of his profit or loss can be dependent on what he gets for his byproducts."

According to one 2012 study, U.S. beef producers see $16 per head of value added to their per-head production because of the tallow used in biodiesel production.

On first glance, or perhaps one should say first smell, there isn't a lot of evidence that Valley Proteins is a rendering plant. But it is a big player in the industry. Valley Proteins, with 14 plants in 10 states, including New Mexico, Oklahoma and Texas, processes about 100 million pounds of animal byproducts weekly. The company collects used cooking oil from 55,000 restaurants around the country. The vast majority of the oil processed at its Winchester plant comes from area poultry producers. Red meat and restaurant grease make up the remainder.

SMELL SCRUBBERS

If the business is more accepted these days, it also does not smell like it once did. Environmental regulations require plants that process animal byproducts to condense their steam and "scrub" it to reduce odor. For the industry, regulation is a double-edged sword, Smith said. On the one hand, regulation has increased the cost of doing business. On the other, it caused many rendering plants to sell out or shut their doors. The latter is a result that has allowed Valley Proteins to grow. The company has purchased most of the plants it runs today.

Valley Proteins grosses more than half a billion dollars a year and holds 10% of the industry's U.S. market share. Rendering is part of an industry that's critical -- and growing more critical every year -- to agricultural and environmental sustainability. World meat production could grow as much as 200 million tons annually by 2050, concludes a new report released earlier this year for the National Renderers Association (NRA). That will tremendously increase the need for safe disposal of animal waste.

The U.S. livestock sector today already slaughters more than 150 million head of cattle, calves, hogs and sheep, and more than 55 billion pounds of poultry annually. That system produces an enormous stream of byproducts that become 20 billion pounds of feed and industrial fats, and proteins. "A lot of what is perceived today as sustainable we've been doing for years," Smith noted, pointing out that between 30% and 40% of the animal is thrown away as inedible in livestock and poultry processing.

That's a lot of waste and could be both a huge and dangerous drain on the nation's landfills were it not for companies like Valley Proteins. Smith said rendering plants reduce landfill tonnage by 25% annually and also prevent disease-carrying rodents and insects from being attracted to waste sites.

WHERE DO ALL THESE AG BYPRODUCTS GO?

Rendering is a process that cooks byproducts from slaughterhouses and meat-processing plants, fryer grease from restaurants and supermarket waste. The process separates fats from proteins and then turns the fat into liquid and the protein into a powder with the texture of sand.

From there, the processed products go into everything from commercial feed for chickens and protein supplements for cattle in the U.S., to calorie supplements for chickens in South and Latin America, and for biodiesel fuel to power vehicles in Germany. About 10 million tons of rendered products are made annually in the United States and Canada, with 31% of rendered proteins and 15% of rendered fats used as pet-food ingredients, finds the study completed for the NRA.

CHEESE FOR ICE

One small waste stream has been diverted for snow and ice removal in Wisconsin. Normally, processing plants pay to discard the cheese brine used in the processing of cheeses like mozzarella and Parmesan. The city of Milwaukee recently began treating icy streets with a mixture of cheese brine and rock salt. In Polk County, on the other side of the state, the local highway department has been using cheese brine to treat roads since 2009.

Remarkably, Polk County Highway Department operations manager Emil Norby said the cheese brine "goes to colder temperatures than standard salt brine" before it freezes. The brine has 22% to 24% salinity.

"It's the optimum product," Norby added. "I don't have to do anything to it." When he tested it on his own back porch, Norby found it took two days of 20ËšF temperatures before it froze.

Using cheese brine saved the county $40,000 the first year. "That's because the byproduct is free, and it's replacing magnesium chloride, which we have to pay for," Norby explained.

Last winter, he said Polk County used 68,000 gallons of cheese brine on area roads. Applied as a liquid on salt, it sticks to the road, keeping the salt from being sprayed into ditches by road traffic and cutting down salt usage by 30%.

It's nearly impossible today to build a new rendering plant because of the extensive permits and regulation required. For Valley Proteins' Smith, that's something of an irony. "Rendering was recycling before there was recycling," he said of the company his grandfather founded more than 60 years ago. Rendering began 150 years ago as soon as large-scale livestock processing began.

"People did it out of necessity more than economics," Smith said. One had to do something with all the waste left behind from slaughterhouses and butcher shops.

While none of this "recycling" is new to Smith or his co-owner brother, Michael, the popular view of the rendering industry as contributing to environmental sustainability is important to the future of the industry.

Smith has seen his market expand. "Ten years ago, there was no market for fats as biodiesel," he explains. Today, 20% to 30% of fats industry-wide goes into biodiesel in Europe and the U.S.

All in all, Valley Proteins manufactures more than 1 million tons of value-added feed ingredients on an annual basis and sells its products to customers in the U.S., Canada, Latin and South America, Europe, Africa and Asia. The company's largest buyer of poultry proteins is China.

"The public view of our industry these days is really changing," Smith said. "We've always been the bad guys. But now, for the first time in my career, we've gotten to wear white hats because we don't throw things away."

(VM/CZ)

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