Inside This Issue 1 AAFCO Meeting Focuses

on FSMA Implementation

2 Arbitration Decisions

3 Upcoming Events

4 TPP Negotiators Fail to

Reach Agreement

5 NGFA’s New Director of

Communications and

Digital Media

6 FDA Proposes User Fees,

Draft Guidance Document

7 OSHA Revises Policy for Ag

Retail Facilities that Handle

Chemicals

9 PNW Industry Workshop

9 Elevator Design Conf.

Attracts Over 300

12 Short-term Patch to

Highway Bill

13 DOL Revises Overtime Pay

Regulations

14 Updated Guide to OSHA

Training Requirements

15 6th Annual Feed/Pet Food

Conference

Volume 67, No. 16 | August 7, 2015

ngfa.org/newsletter | ngfa@ngfa.org | 202.289.0873

AAFCO Meeting Focuses on FSMA Implementation Issues

By David Fairfield, Vice President for Feed Services

The meeting of the Association of American Feed Control Officials (AAFCO) on Aug. 3-5 in Denver, Colo., was dominated by a variety of issues related to the Food and Drug Administration’s (FDA) implementation of the Food Safety Modernization Act (FSMA) and its anticipated impacts on the animal feed and pet food industries.

Dr. Dan McChesney, director of the Office of Surveillance and Compliance at FDA’s Center for Veterinary Medicine, Rockville, Md., told attendees during the meeting’s opening session that the agency is on track to publish by Aug. 30 its final rule that will establish new requirements for current good manufacturing practice (CGMP) and preventive controls for animal feed and pet food. Under the new rule, affected facilities will be required to adhere to specified good manufacturing practices and to develop and implement a written food safety plan in which the facility implements controls to prevent significant hazards from causing feed/pet food products to be adulterated or misbranded. The new requirements will apply to feed and feed ingredient manufacturers, pet food manufacturers, and grain processors and biofuels producers manufacturing co-products – such as distillers dried grains – for use as feed/pet food ingredients. Significantly, grain elevators that are engaged solely in storing and distributing raw agricultural commodities – such as grains and oilseeds – would be exempt from the rule’s requirements.

With FDA’s work on publishing the major FSMA-related rules largely completed, the agency’s efforts have turned to implementation issues related to compliance and enforcement of the impending requirements. As such, McChesney provided

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the following insights on how FDA intends to structure its FSMA-related inspectional activities:

• Inspector Specialization: FDA plans to initiate training programs so that its inspectors will be better qualified to conduct commodity-specific inspections. FDA’s goal in doing so is to minimize potential inconsistencies during inspections and create cadres of inspectors that have specific expertise in interacting with certain types of facilities.

• Streamlined Decision-Making: FDA is working to better establish clear roles and responsibilities for its inspectional activities so as to streamline its decision-making process. FDA believes that more efficient decision-making will help to address uncertainties about compliance obligations when questions arise.

• Inspection Approach: FDA will conduct inspections using a “system’s approach,” rather than an “observation’s approach.” This means FDA inspectors will be asking a facility for more information about the practices and procedures it has implemented to ensure the safety of the products it produces. In contrast, FDA’s current inspections place more emphasis on identifying potential violative conditions and products at the facility.

• Performance Metrics: FDA will develop program metrics to evaluate the effectiveness of its inspection activities. Such metrics would provide data to inform FDA whether its inspectional activity is improving regulatory compliance and reducing the incidence of distribution of adulterated or misbranded products.

Meanwhile, NGFA Vice President of Feed Services David Fairfield during the opening session provided an update on the Food Safety Preventive Controls Alliance’s activities to develop training and guidance materials to assist firms in complying with the requirements to be established by FDA’s CGMP and preventive controls regulations for animal feed and pet food. The Alliance’s goal is to make the training and guidance materials available by March 2016. Fairfield currently serves as chair of the Alliance’s animal feed/pet food-related activities.

AAFCO is the professional organization of federal and state feed regulatory officials, with which the NGFA interacts extensively. Among other things, NGFA feed industry members and NGFA staff serve as non-voting advisers to key AAFCO committees, and participated actively in the meeting.

Other Issues: Other significant issues addressed during the AAFCO meeting included the following:

Arbitration Decision

Case No. 2602 – Cargill, Incorporated (Minneapolis, MN) v. L&R Farms Partnership and James Steven Lewis (Memphis, TN)

This and all NGFA Arbitration Committee decisions and default judgments are accessible at ngfa.org/decisions.

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Upcoming NGFA Events

Sept 13-14 Board Meeting Napa, Calif. The Meritage Resort Save the Date

Sept 29-30 Feed and Pet Food Joint Conference Columbus, Ohio Hyatt Columbus Registration

Dec 6-8 Country Elevator Conference and Trade Show Kansas City, Mo. Sheraton at Crown Center

Save the Date

For a full listing of events, go to ngfa.org/events

• AAFCO Model Bill and Regulations: During the meeting of the Model Bill and Regulations Committee, a workgroup was established to evaluate how the AAFCO Model Bill and Regulations could be revised to incorporate FDA’s CGMP and preventive controls regulations once promulgated. The NGFA will serve as a member of the workgroup.

• Feed Inspector Training: The Education and Training Committee continued its work in implementing the Animal Feed Regulatory Program Standards – a program designed to improve competencies and skills of state/federal inspectors to enhance the consistency of inspections. Currently, 21 states are participating in the program, which represent 60 percent of the states that have contracts with FDA to conduct federal inspections.

• Feed Ingredient Definitions and Approvals: The AAFCO membership voted to publish in the AAFCO Official Publication tentative definitions for: 1) distillers oil - feed grade; 2) L-Methonine; and 3) Molasses Hydrolyzed Yeast. In addition, the Ingredient Definition Committee established new tentative definitions for: 1) poultry by-product meal; 2) poultry by-products; 3) poultry; 4) poultry meal; 5) dehydrated alfalfa meal or pellets; 6) direct dehydrated alfalfa meal or pellets; 7) pulse protein (wet milling); and 8) pulse starch (wet milling). Significantly, the committee also voted to delete the existing official definition for 33.5 Fat Product Feed Grade.

• Feed/Pet Food Labeling: The Feed Labeling Committee continued its work to develop the program for a workshop to explain requirements associated with labeling medicated feeds. The workshop is scheduled to be conducted in conjunction with the 2016 AAFCO mid-year meeting scheduled for Aug. 1-3 in Pittsburgh, Pa. In addition, AAFCO is planning to conduct a pet food labeling workshop in conjunction with its 2017 mid-year meeting.

• Feed Manufacturing: The Feed and Feed Ingredient Manufacturing Committee continued its work to update the guidelines for contaminant levels permitted in mineral feed ingredients that are published in the AAFCO Official Publication. It is anticipated that final proposed guidelines will be considered during the committee’s next meeting to be conducted in January.

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Trans-Pacific Partnership Negotiators Fail to Reach Agreement in Hawaii By Randy Gordon, President

The 12 countries currently negotiating a Trans-Pacific Partnership (TPP) trade agreement announced late on July 31 that they had failed to reach a final agreement, with dairy and sugar policy representing two of the major impediments still to be resolved.

“We’ve made significant progress and will continue work on resolving a limited number of remaining issues paving the way for the conclusion of the (TPP) negotiations,” the ministers said in a brief joint statement. “In this last stage of negotiations, we are more confident than ever that TPP is within reach and will support jobs and economic growth. The progress made this week reflects our longstanding commitment to deliver an ambitious, comprehensive and high-standard TPP agreement that will support jobs and economic growth across the Asia Pacific region.”

But U.S. Trade Representative Michael Froman hastened to add that, as with all trade negotiations, “nothing is agreed to until everything is agreed to.”

The trade ministers worked through a number of issues during the week-long series of meetings, including intellectual property rights for pharmaceuticals and other products, geographical indicators and other topics.

Concerning dairy, New Zealand Trade Minister Tim Groser said the ministers had agreed on providing “commercially meaningful access,” but said that phrase will need to be defined during further negotiations.

On sugar, Australia Trade Minister Andrew Robb, who has been advocating improved access to U.S. markets, said progress had been made on both sugar and dairy, but more work needed to be done. “To get one set of rules across 40 percent of the world’s gross domestic product (and) 30 percent of world trade” is difficult,” Robb said. “(But) we’re all better off as a consequence.”

Froman said the countries have not set a date yet for the next negotiating session, but would engage in “intensive” one-on-one discussions “to find common ground,” as well as work to formalize “achievements” made during the Hawaii talks.

In addition to the United States, countries involved in the negotiations are: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

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Sarah Gonzalez to Become NGFA’s New Director of Communications and Digital Media

The NGFA is extremely pleased to announce that Sarah Gonzalez, currently associate editor at the widely respected agricultural news organization, Agri-Pulse, will become the Association’s new director of communications and digital media, effective Aug. 24.

Gonzalez, a native of Elburn, Ill., was hired by Agri-Pulse Editor Sara Wyant to operate the news organization’s Washington bureau in 2011, and in the ensuing years has had extensive reporting, writing and video news interview experience focusing on a wide range of agricultural issues. Her assignments have included covering hearings conducted by congressional committees, White House events, speeches and press conferences conducted by Agriculture Secretary Tom Vilsack and other administration officials, as well as events and meetings hosted by farm and agricultural organizations. She also produces Agri-Pulse’s “Daily Harvest” morning summaries of the previous day’s most important agricultural news. Gonzalez also has done electronic and social media work for Agri-Pulse’s website.

She is a journalism graduate from Iowa State University, where she received cum laude honors while also earning an undergraduate minor in biology. She wrote extensively for the Iowa State Daily covering the university’s science departments and developments in plant science and biotechnology, meteorology, chemistry and physics. She also spent a year working in the Public Relations/Marketing Department of the Iowa State Daily. She also worked for a year with the Iowa State Agricultural Extension Service as a communications intern after receiving her college degree prior to joining Agri-Pulse in July 2011.

Gonzalez also is involved in several volunteer service organizations, including the Wounded Warrior Project.

“We’re extremely pleased to have a person of Sarah’s considerable talents, dedication and energy join our staff team,” said NGFA President Randy Gordon in announcing the selection. “I’ve personally followed and been impressed by her reporting and news coverage for several years. She has a tremendous work ethic and well-earned and widely recognized reputation for accuracy, ethics and fairness. She also has a deep passion and commitment to agriculture, and keen interest in the kind of policy and operations issues important to NGFA member companies. I’m excited about the strengths she’ll

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bring to NGFA’s communications, media and public policy outreach and advocacy efforts to serve our members and the industry.”

Gonzalez fills the staff vacancy created by the departure of Communications Director Heather McElrath, who in June took a new position with a financial literacy and education nonprofit organization in the Washington area.

FDA Proposes User Fees and Issues Draft Guidance Document to Establish Program for Accrediting Third-Party Auditors/Certification Bodies

By David Fairfield, Vice President of Feed Services

The Food and Drug Administration (FDA) on July 24 published a proposed rule and draft guidance document to support a new program mandated by the Food Safety Modernization Act (FSMA) to assist eligible foreign entities in demonstrating that imported foods meet U.S. food safety requirements.

Once the new program is in place, importers will be able to voluntarily use audits and certifications of eligible foreign entities to apply for expedited review of foods – including raw agricultural commodities, animal feed, feed ingredients and pet food products – through the Voluntary Qualified Importer Program (VQIP) authorized under the law. In addition, FDA may require such audits and certifications as a condition of granting imported food admission into the United States when the agency has identified certain food safety risks.

Pertaining to VQIP, FSMA requires FDA to establish a voluntary, fee-based program for the expedited review and importation of food from importers who achieve and maintain a high level of control over the safety and security of their supply chains. This control includes importation of food from foreign facilities that have been certified under FDA’s third-party accreditation regulations, when finalized, as well as other measures that support a high level of confidence in the safety and security of the imported food. Under the program, the potential for expedited food entry is intended to provide an incentive for importers to adopt a robust system of supply chain management. Further, it is envisioned that the program will allow FDA to focus its resources on imported food entries that pose a higher risk to public health.

FDA’s proposed rule would establish user fees for participation in the program created by the agency’s proposed rule for Accreditation of Third-Party

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Auditors/Certification Bodies, which is scheduled to become final on or about Oct. 31, 2015. The Accreditation of Third-Party Auditors/Certification Bodies proposed rule was issued on July 29, 2013, and details how the agency would recognize certification bodies that would accredit third-party auditors to conduct food/feed safety audits and issue certifications. FDA’s July 24 proposed rule does not respond to, or reflect input from, comments received by the agency on the 2013 proposal. Instead, the July 24 proposal outlines how FDA would establish and implement user fees associated with the program for accredited third-party auditors and certification bodies. Under the proposal, both third-party auditors/certification bodies and accreditation bodies participating in the program would be assessed fees based on the average cost to FDA of performing certain activities for the program (such as application review and monitoring).

FDA’s draft guidance contains the agency’s recommendations – Model Accreditation Standards – on third-party auditor/certification body qualifications, including recommendations based on relevant provisions in the proposed rule. When finalized, the Model Accreditation Standards will serve as a companion guidance document to the Accreditation of Third-Party Auditors/Certification Bodies final rule.

FDA has provided a 75-day public comment period on the proposed rule and draft guidance that ends Oct. 7. The NGFA will be reviewing the proposal and draft guidance carefully, and providing comments as warranted.

OSHA Revises Policy for Ag Retail Facilities that Handle Chemicals

By Jess McCluer, Director of Safety and Regulatory Affairs

On July 22, the Occupational Safety and Health Administration (OSHA) issued a revised interpretation of its Process Safety Management (PSM) standard for highly hazardous chemicals.

The PSM standard contains an exemption for retail facilities. Through a letter of interpretation, OSHA defined a retail facility as one that derived more than 50 percent of its income from direct sales of highly hazardous chemicals to the end user, otherwise known as “the 50 percent test.”

Under its revised interpretation, OSHA has rescinded all prior interpretations, including the 50 percent test, and now will interpret the retail facility exemption in

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accordance with the North American Industry Classification System (NAICS) Manual, which states:

“Only facilities, or the portions of facilities, engaged in retail trade as defined by the current and any future updates to sectors 44 and 45 of the NAICS Manual may be afforded the retail exemption.”

Further, since the revised policy is limited specifically to retail facilities, it does not affect facilities engaged in distinctly wholesale activities, such as grain handling facilities.

In addition, OSHA says it believes that nearly all affected facilities currently regulated by the Environmental Protection Agency (EPA) as a Risk Management Program (RMP) Level 2 facilities. RMP 2 requires employers to develop and execute a safety management system that addresses eight of the 13 OSHA PSM elements. Activities necessary to comply with PSM may be minimal, but individual employers are required to ensure that they have addressed all OSHA PSM elements and sub-elements.

This will mean that facilities now will be regulated under the RMP Program Level 3 (a review of EPA’s level programs can be found here.)

OSHA has explained that during the first six months following the change in the interpretation of the rule, it will focus on providing compliance assistance to affected facilities. A copy of OSHA’s PSM Retail Exemption Interim Enforcement Policy can be found here.

For affected facilities, the primary concern is that the revised policy will place an undue regulatory compliance burden in terms of both costs and regulatory hurdles in a short time frame.

OSHA’s revision is in response to the ammonium nitrate explosion that occurred in West, Texas, in 2013. Following the incident, President Obama issued Executive Order (EO) 13650 “Improving Chemical Facility Safety and Security,” which focused on reducing risks associated with hazardous chemical incidents to owners and operators, workers and communities by enhancing the safety and security of chemical facilities.

The NGFA is working with the Agricultural Retailers Association, The Fertilizer Institute and the National Council of Farmer Cooperatives in developing informational outreach materials to make the organizations’ respective members aware of the updated policy and available resources that can be used to implement the PSM.

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NGFA NAEGA, PNWGFA to Host PNW Industry Regional Workshop on Aug. 27

By Jess McCluer, Director of Safety and Regulatory Affairs

Grain industry representatives in the Pacific Northwest region are invited to attend a workshop hosted by the National Grain and Feed Association, the North American Export Grain Association, and the Pacific Northwest Grain and Feed Association on Thursday, Aug. 27 from 7:30am to 4:30pm at the Merchants Exchange of Portland, 200 SW Market Street in the Large Conference Room (Lobby Level).

The workshop will focus on several issues relevant to managers who operate facilities in the Pacific Northwest, including: 1) key regulatory and legislative topics such as biotechnology and legislation reauthorizing the official grain inspection service; 2) navigation issues on the Columbia River; 3) an update from the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service on international phytosanitary topics, including those associated with Canada and China; and 4) an update from USDA’s Federal Grain Inspection Service on grain inspection and grain quality issues.

The workshop agenda is available here. The cost for attending is $50, which includes a continental breakfast and lunch. We encourage NGFA and NAEGA members to invite others who also would benefit from attending.

If you have any questions or need additional information, please contact NGFA Director of Safety and Regulatory Affairs Jess McCluer at (202) 888-1102 or Pacific Northwest Grain and Feed Association Director Margerie Sedam at (503) 227-0234.

NGFA-Grain Journal Elevator Design Conference Attracts Over 300

By Jess McCluer, Director of Safety and Regulatory Affairs

More than 300 grain, feed and grain processing industry professionals and exhibitors participated in the second NGFA-Grain Journal Magazine-sponsored Elevator Design Conference conducted July 28-30 in Kansas City, Mo.

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The tailor-made program provided participants with the latest information and work practices on applying new technologies and best practices at today’s grain handling facilities. Topics addressed at the conference included: 1) considerations for retrofitting; 2) environmental permitting; 3) energy savings strategies; 4) truck scale automation; 5) avoiding workers compensation pitfalls; 5) hazard monitoring systems; 6) receiving and reclaim systems; 7) managing construction contractors; 8) finding and keeping good employees; 9) electrical system design; and 10) complying with the Occupational Safety and Health Administration’s revised hazard communication standard.

In addition, a tabletop trade show featured products and services showcased by 93 companies. The speaker’s PowerPoint presentations may be accessed by clicking here.

More than 300 grain, feed and grain processing and exhibitors participated in the second NGFA-Grain Journal Magazine Elevator Design Conference conducted July 28-30 in Kansas City, Mo.

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Ninety-three exhibitors participated in the conference trade show; which added value by showcasing safety- and operations-related products and services available to the industry.

A panel focusing on attracting, retaining and training good employees featured (seated, from left) Brett Myers, director of human resources and development, Mid Kansas Cooperative (MKC), Moundridge, Kan.; Jessica Johnson, talent acquisition manager for Lansing Trade Group, Overland Park, Kan.; and Jason Klootwyk, director of interior assets, Bunge North America, St. Louis, Mo. Moderating the session was Katie Squibb of West Central Cooperative, Ralston, Iowa.

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A panel discussion focusing on hazard monitoring systems was moderated by Roger Holdeman, JBS United, Gridley, Ill., (left) and featured Mike Anderson, project manager, The Scoular Company, Omaha, Neb.; Brian Grimm, director of safety at Bartlett Grain Co., Kansas City, Mo.; and Jake Long, project manager at Bartlett Grain Co.

Short-term Patch to Highway Bill

By Max Fisher, Director of Economics and Government Relations

President Obama signed a 3-month extension of the so-called “Highway Bill” on Friday July 31, 2015. The $8-billion infusion into the Highway Trust Fund marks the 34th extension for the fund dating back to 2008, and will continue funding until October 29. However, there is hope in Washington that the House and Senate will be able to come to terms on a long-term bill before the end of 2015.

NGFA will be advocating for the long-term highway bill to include language that would allow state governments to have more control over the interstate truck weight limits in their respective states. This would allow for greater transportation efficiency by enabling state governments to increase interstate weight limits within their state boundary to match their state road weight limits. NGFA will also be advocating for the federal age limit for Commercial Driver’s Licenses (CDL) to be consistent with the states' age limit, which is 18. Currently, CDL drivers over age 18, but under 21, may drive trucks within state borders, but may not cross into neighboring states until they reach age 21. Finally, NGFA will urge Congress to include language that would prohibit the Administration from continuing a rulemaking process that would increase the current $750,000 in minimum financial responsibility that for-hire motor carriers must carry.

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Department of Labor Revises Overtime Pay

Regulations

By Jess McCluer, Director of Safety and Regulatory Affairs

On July 6, the Department of Labor’s (DOL) Wage and Hour Division published its proposed rule that amends regulations under the Fair Labor Standards Act (FLSA) governing the “white collar” exemption from overtime pay for executive, administrative and professional employees.

The proposed rule from DOL:

• would double the salary threshold for employees who are eligible to receive overtime pay – from $23,660 to $50,440. DOL also proposes to update this salary threshold every year through a notice in the Federal Register.

• does not propose regulatory changes to the duties tests, which require employees to perform certain primary duties to qualify for an overtime exemption. However, DOL is seeking feedback on whether these duties tests should be revised.

DOL estimates that this rule would:

• directly affect 4.6 million U.S. workers. Total direct employer costs for Year 1 are estimated to amount to $592.7 million dollars.

• cost each small business, on average depending on the number of workers covered by the regulation, $100 to $600 in direct costs and $320 to $2,700 in additional payroll costs to employees in the first year after the promulgation of the proposed rule.

• cause each small business to spend one hour of time for regulatory familiarization; one hour per affected worker in adjustment costs; and five minutes per week scheduling and monitoring each worker expected to be classified as overtime eligible as a result of the proposed rule.

Comments are due to DOL on Sept. 4, 2015.

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Updated Comprehensive Guide to OSHA Training Requirements Now Available

By Jess McCluer, Director of Safety and Regulatory Affairs

Many Occupational Safety and Health Administration (OSHA) standards explicitly require employers to train employees in the safety and health aspects of their jobs.

Meanwhile, other OSHA standards make it the employer’s responsibility to limit certain job assignments to employees who are “certified,” “competent,” or “qualified.”

In addition, OSHA requires employees to be trained on certain topics annually, and others need to be repeated when a process change occurs in the facility or operation.

Because of these varying requirements, OSHA has posted a fully updated version of its guide to all agency training requirements to assist employers, safety and health professionals, training directors and others in complying. Training Requirements in OSHA Standards organizes the training requirements into five categories: General Industry, Maritime, Construction, Agriculture and Federal Employee Programs.

OSHA highlights the specific training requirements for the Grain Handling Standard (29 CFR 1910.272) on pages 77-78 in the revised publication.

Topic Training Refresher Training

Grain Handling Facilities 29 CFR 1910.272(e)(1), (g)(5)

All employees: Before starting work, training in the general procedures, safety precautions, specific procedures and safety practices applicable to assigned tasks

Annually; or when exposed to new hazards

Employees assigned special tasks: Train to perform assigned special tasks safely, such as bin entry and handling of flammable or toxic substances.

Observer: Train in rescue procedure.

For a list of educational materials available from OSHA, please visit the Publications webpage.

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6th Annual Feed & Pet Food Conference

Coming Soon! …Early-Bird Registration Rates End on Sunday!...

One of the hallmarks of the thriving strategic alliance between the NGFA and the Pet Food Institute (PFI) will be on display this fall – the sixth annual Joint Feed and Pet Food Conference.

WHEN: Sept. 30 – Oct. 1

WHERE: Hyatt Regency in Columbus, Ohio

WHO: Designed for employees of feed manufacturers and pet food makers, the conference annually delivers both executive-level business information and key sessions for technical and regulatory staff.

REGISTER NOW: Conference registration is ongoing, but take note that early-bird rates expire on Sunday, Aug. 9. After that, the cost will increase by an extra $65 per person!

Key sessions include:

• FSMA: The Move from Rulemaking to Implementation – Dr. Dan McChesney, Director, FDA Center for Veterinary Medicine Office of Surveillance and Compliance (confirmed)

• FSMA: Preparing for Compliance – Scott MacIntire, Director, FDA Division of Enforcement, Office of Enforcement and Import Operations (invited)

• Evaluating Food/Feed Ingredient Suppliers - How We Do Business in the Supply Chain – Rosalind Zils, Director, External Supply Chain Quality, Land O Lakes (confirmed);

• Antimicrobial Resistance and the Veterinary Feed Directive - Impacts on the Feed Industry

In addition, a special workshop, included in the conference registration fee, will be conducted the morning of Oct. 1:

• CGMPs and Preventive Controls: Understanding the New Animal Food Requirements and How to Demonstrate Compliance – Greg Aldrich, Research Associate Professor and Pet Food Program Coordinator, Kansas State University; Matt Frederking, Vice President, Regulatory Affairs and Quality Assurance, Ralco Animal Nutrition

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Click here to access the complete conference program, where you also can access the registration form from the PFI website.

For more information on Trade Show exhibit space, email Todd Kemp at tkemp@ngfa.org.

Sponsorship opportunities are available! Contact Rebecca Grubbs at rgrubbs@ngfa.org.