Meeting Public Comments

Savonne Caughey [Pet Food Institute]

Dear Chair Hein, Vice Chair Nordman, and Members of the Committee: The Pet Food Institute (PFI) appreciates the opportunity to provide comments regarding HSB 594.Established in 1958, PFI is the trade association and the voice of U.S. cat and dog food and treat manufacturers. Our members account for the vast majority of pet food and treats made in the United States and feed 180 million pets in U.S. households. Our members operate under regulations issued by the U.S. Food and Drug Administration and enforced by both federal and state officials. This means dog and cat owners throughout the United States and around the world benefit from sciencebased regulations that provide the safest animal food supply available globally.PFI recognizes and supports responsible efforts to address climate change and utilize additional energy sources that reduce carbon emissions. However, we have serious concerns that government incentives and mandates promoting renewable fuel growth have created unintended consequences in supply and demand for animal and plantbased oils and fats. Renewable fuel tax credits and mandates for biodiesel create an unfair governmentdriven market advantage to the energy sector and a disadvantage to companies purchasing ingredients for pet food. Tax credits that favor fuel production over food production create market distortions, producing one problem in a heavyhanded attempt to address another. While other industries reap tax credits for their commodities use in renewable fuel, the feed industry bears the brunt of this disadvantaged domestic supply, facing significant burdens of cost and sourcing for these critical ingredients. Our members have seen notable input price increases we believe are attributable in large part to the competition for grains by both food and fuel producers.Renewable fuel demand, particularly renewable diesel, has spiked the price for animal and plantbased oils and fats to two times their current market value, thus drastically increasing the cost of critical ingredients that pet food makers source for the nutrition and palatability of cat and dog food. Pet food makers rely on the essential fatty acids, found in oils and fat, to formulate foods that deliver nutrients that perform key functions in dog and cat immune and visual systems, as well as supporting a healthy skin and coat. Our members commitment to long and healthy lives for pets means that they rely on access to dozens of animal and plantbased oil and fat ingredients. This access is threatened by increased competition for animal protein byproducts, grains and grain byproducts as a result of tax incentives and mandates.PFIs members report facing an unprecedented increase in the price of plantorigin ingredients, such as soybean oil, that we believe is attributable to the competition for grains from renewable fuel producers. Our members also reported dwindling access to these ingredients in 2021. While the U.S. historically was able to meet domestic soybean oil needs, our country alarmingly became a net importer of soybean oil in September and October of 2021, and food makers have been forced to import foreign soybean oil, which is more expensive due to heavy tariffs.Left unchecked, these incentives and drivers for growth of demand for renewable fuels will continue to distort markets for food inputs, effectively making these critical pet food inputs inaccessible for many pet food makers and forcing companies to develop product formulations primarily based more on ingredient access than on ideal complete and balanced formulation considerations.Now more than ever, it is important to people in the U.S. and around the world to find comfort and companionship with their pets. The humananimal bond is the documented occurrence of a positive connection established between you and your pet, that benefits both of you. In addition to providing companionship, numerous studies have documented the positive effects of the humananimal bond, which provides profound mental, social and physical health benefits for both owners and their companion animals. For example, studies indicate that sharing your life with a dog or cat can help reduce blood pressure and reduce levels of stress, and data indicate that animals can play a role in managing depression.The last two years have been very challenging, and 2022 will continue to present significant sourcing challenges for pet food makers, including our members who have four facilities in Iowa and employ over 1,300 Iowans. Now is not the time to favor the energy sector and disadvantage the feed industry by increasing ingredient costs, risking supply shortages, and adding another layer of stress to pet food makers, pet parents and the pets they love. PFI respectfully requests that the committee reject tax incentives and mandates for biodiesel fuels that use or include animal and plantbased oils and fats that are historically used in human and pet food.On behalf of PFI members, whose nearly 25,000 employees in 32 states provide safe food for the 180 million pets across the U.S., we thank you for the opportunity to share our views. I would be happy to discuss this issue in more detail.Sincerely,Savonne CaugheySenior Director of Advocacy and Government RelationsPet Food Institute