On the Money

What is really in the food your dog or cat is eating?

Bad pet food
Bad pet food

For most Americans, pets are like family.

The rate at which U.S. consumers open their wallet to feed their furry companions has become big business: Pet food alone is now an industry worth more than $26 billion and growing, according to IBIS World figures.

That has led some experts to question the regulations that safeguard the industry—and ingredients being used.

"No one's really minding that store right now… It's left up to the consumer to know that it's safe," said Joseph J. Wakshlag, a veterinarian specializing in nutrition at Cornell University, told CNBC's "On the Money" in an interview.

In the past 2 months, two brands of canned dog food, Evanger's Dog and Cat Food, and Cocolicious, made by Party Animal, were found to contain a drug called pentobarbital that's used to euthanize animals. One dog died, while others were sickened.

Evanger's is now suing a supplier, saying the meat which was labeled, "inedible hand boned beef," actually contained pentobarbital-tainted horse meat.

"Evanger's will never purchase from this beef supplier ever again. We immediately initiated even more new testing methods and are testing every single beef product before being shipped.," said Holly Sher, Evanger's owner and president, in a statement e-mailed to CNBC.

In a statement posted on their website, Party Animal said, "The safety of pets is and always will be our first priority. We sincerely regret the reports of the discomfort experienced by the pet who consumed this food….Party Animal wishes to emphasize that we have submitted many recent lots of our beef flavors for testing and all have tested negative for any pentobarbital."

Susan Thixton, a consumer advocate, has been fighting for 25 years to change the pet food industry after she believes her dog died from poorly made pet food.

Who is regulating the pet food industry?

"Pet food isn't food. Pet food is feed," said Susan Thixton, a consumer advocate and author of Truthaboutpetfood.com.

The Food and Drug Administration (FDA) regulates pets food as animal feed—the same regulations for animals produced for meat and eggs—instead of overseeing the sector as it does food for humans. While the FDA has oversight of pet food, they let the Association of American Feed Control Officials (AAFCO), a private group, set the standards for ingredients and labeling.

In order to get a complete copy of those rules, AAFCO charges $100.

"There is no required testing of product by pet food manufacturers…. Pet food manufacturers are responsible for taking appropriate steps to ensure that the food they produce is safe for consumption and properly labeled," the FDA said in a statement e-mailed to CNBC.

"Safety is a priority for our members of course because if you think about it, producing 98 percent of the food and treats on the market, we are feeding the vast majority of America's 180 million cats and dogs," said Cathy Enright, the Pet Food Institute president and CEO. Evanger's and Party Animal are not members of the Pet Food Institute.

"That's a tremendous responsibility that of course our members take very seriously. So they have safety plans that go from A-to-Z," she added.

Thixton has been fighting to change many of the pet food industry's practices. Twenty-five years ago, her dog suddenly came down with bone cancer, which she said her veterinarian at the time linked to a chemical preservative in her dog food.

"I had no idea what shelf life was, [and I] called the pet food company…They proudly told me this pet food would stay fresh for 25 years," Thixton told CNBC. "That was … three times longer than my dog lived."

That preservative, called ethoxyquin, is still allowed by the FDA, and it's just one issue that Thixton wants addressed.

"Who would think that FDA allows a dead animal that laid in the field for three days to be recycled into pet food," she said.

According to the FDA's website, "The pet food canning industry utilizes undecomposed animal and marine tissues from various sources. These include … occasionally meat from animals that may have died otherwise than by slaughter."

In a statement e-mailed to CNBC, an FDA spokesperson said, "The FDA is aware of the sale of dead, dying, disabled, or diseased (4-D) animals to salvagers for use as animal food."

What's in your pet food?

If the label says meat meal or another ingredient that ends in meal, it can contain non-slaughtered animals. The products usually come from a render, or a salvage plant that accepts leftovers and by-products from the livestock industry, then turns them into ingredients for pet food, among other uses.

"The AAFCO Official Feed Ingredient Definitions for animal products include that are produced through the rendering process …[are] typically identified as "meals" as part of the ingredient name," AAFCO said in a statement e-mails to CNBC.

Cornell's Wakshlag said that consumers are the ones who must call the company to inquire about the presence of meat meal, and where it comes from. "And those are the things we just don't really know and understand very well," he said.

I think the consumer has to start asking the questions and the questions have to be about ingredients and the quality control measures that are in place to ensure that it's a safe food
Joseph J. Wakshlag

Another transparency issue Thixton would like to see changed is private labels. Some grocery stores now sell their own branded pet food, but keep the actual manufacturer private.

"I contacted Whole Foods and asked them, 'Who manufactures your pet food for you?' And they told me it was proprietary," she said. Whole Foods does not disclose the manufacturer of any of its private label products.

Costco and Trader Joe's also sell private label pet food. Costco declined to comment and Trader Joe's did not respond to inquiries from CNBC. The FDA and AAFCO, however, said third party manufacturers must meet the same standards.

Black and tan Jack Russell puppies eat from a food bowl.
Tim Graham | Getty Images

"I think the consumer has to start asking the questions and the questions have to be about ingredients and the quality control measures that are in place to ensure that it's a safe food… if they can't really tell you exactly what they're doing, then you probably should be looking for another pet food company," Dr. Wakshlag said.

Dr. Wakshlag has seen an increase of pet owners home-making pet food, but warned consumers need to work with a vet to ensure their pets are getting the right nutrients.

"There are vitamins and minerals that are sort of essential, particularly during a growth period for dogs and cats. And that's where we see a lot of our problems from people who feed from the table or home cook," he said.

Thixton recommends buying food labeled human grade. "When it states human grade on the label, that pet food is actually a food and not a feed. And it abides by all food laws."

On the Money airs on CNBC Saturdays at 5:30 am ET, or check listings for air times in local markets.