International Rendering Symposium,

2016 International Poultry Expo

Global Market Report: Opportunities

and Risks

January 28, 2016

Atlanta, GA

Kent Swisher

Overview

• Where We Are – Domestic Markets

• Global Markets

• Markets – Risks and Opportunities

Where We Are - Markets

Where We Are - Production

Where We Are - Production

Where We Are - Consumption

• U.S. Consumption of Processed Animal Protein

Meals by Sector – 2010 Informa Study

Cattle

6%

Poultry

39%

Swine

9%

Pets

31%

Fish

3%

Export

8%

Other

4%

Where We Are - Consumption

Where We Are Fats - Trend

Where We Are Proteins - Trend

Conclusion

• Production is declining but is expected to rebound

with the cattle cycle

• Biofuel use continues to replace fat exports while

domestic use is stable

• Processed animal protein exports are becoming

more important and have grown 46% in the last 5

years

Domestic Risks and

Opportunities

• Renewable Fuel Standard (RFS)

• Food Safety and Modernization Act (FSMA)

• Disease Fears

• Perception – Pet Food

• Animal Byproducts and/or Coproducts?

• Sustainability

• Production and Consumption Statistics –

USDA/NASS

Strategic Intention - Global

• Domestic and international markets – Promote

the demand and market access for rendered

products to domestic and international customers.

Secure adequate resources from key strategic

partnerships (members, federal government and

strategic allies).

Global Markets - Feed

Global Markets - Protein

Global Markets - Tallow

Top 4 Rendering Industries

Rendered Fat – Risks and

Opportunities

• 25% of U.S. domestic rendered fat production

now goes to biofuel.

• The largest importer of tallow is now Singapore –

renewable diesel.

• The largest importer of UCO/yellow grease is now

the EU.

• 19% of U.S. rendered fat exports go to biofuel

production overseas.

• Renewable fuel producers – large scale.

U.S. Exports – Processed Animal

Protein Meals

Rendered Protein Meals – Risks

and Opportunities

• Globally – Poultry and aquaculture sectors drive

demand (Asia, Mexico, and Chile!).

• Ruminant MBM markets are still lacking due to

BSE constraints.

• Avian influenza – risk for exports.

• Other disease risks.

• Perception.

• Additional EU meals entering the market place.

Risks and Opportunities

Supply – Risks and Opportunities

Risks and Opportunities

Risks and Opportunities

Risks and Opportunities

Trade Weighted US Dollar Index 2005 to Present (TWEX)

Key Constraints to Market

Access

• Disease related issues - either perceived or real.

• Currency issues – strength of the dollar.

• Non tariff trade barriers.

• Commercial disputes.

• Education.

• Competing products – palm oil, soybean meal.

U.S. and Brazilian Soybean

Exports

Source: USDA FAS: Oilseeds: World Markets and Trade

Things We Can Change

• Domestic and international markets – Promote

the demand and market access for rendered

products to domestic and international customers.

Secure adequate resources from key strategic

partnerships (members, federal government and

strategic allies).

Key Strategic Partnerships

• World Organization for Animal Health (OIE) –

Terrestrial Animal Health Code – AI and BSE

• Private certification entities

– World Wildlife Fund – Aquaculture Stewardship

Council (WWF, ASC)

– Global Aquaculture Alliance – Best Aquaculture

Practices (BAP)

• U.S. government – USDA/FAS, APHIS, USTR

• Rendering industries - Latin America, Australia,

New Zealand, Europe

• Other?

Things We Can Change

• Perception

• Global standard setting bodies (OIE, FAO,

CODEX)

• Government policies/procedures

• Certification standards effecting rendered

products

• Trade negotiations

• Commercial disputes

• Export demand through U.S. food donation

programs – Food for Peace, Food for Progress

Specific - Initiatives

• US/EU Free Trade Agreement (TTIP)

– Market Access UCO and Tallow

• NOM 60 Mexico

• Food For Peace/Food For Progress

– Ghana, Dominican Republic – Tallow and Yellow

Grease approved

– Efforts to get MBM in programs

Market Access - China

Promote the Demand and Market

Access of Rendered Products