BILLING CODE: 3410-34-P

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Parts 93, 94, 95, and 96

\[Docket No. APHIS-2006-0041\]

RIN 0579-AC01

Bovine Spongiform Encephalopathy; Minimal-Risk Regions; Importation of
Live Bovines and Products Derived from Bovines

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

SUMMARY: We are amending the regulations regarding the importation of
animals and animal products to establish conditions for the importation
of the following commodities from regions that present a minimal risk of
introducing bovine spongiform encephalopathy into the United States:
Live bovines for any use born on or after a date determined by the
Animal and Plant Health Inspection Service to be the date of effective
enforcement of a ruminant-to-ruminant feed ban in the region of export;
blood and blood products derived from bovines; and casings and part of
the small intestine derived from bovines. We are making these amendments
after conducting a risk assessment and comprehensive evaluation of the
issues and concluding that such bovines and bovine products can be
safely imported under the conditions described in this rule. This
document also removes the delay in applicability of certain provisions
of a final rule published in January 2005.Number range CHAPTER

EFFECTIVE DATE: \[[Insert date 60 days after date of publication in the
Federal Register]{.underline}\].

FOR FURTHER INFORMATION CONTACT: For information regarding ruminant
products, contact Dr. Karen James-Preston, Director, Technical Trade
Services, Animal Products, National Center for Import and Export, VS,
APHIS, 4700 River Road Unit 38, Riverdale, MD 20737-1231; (301)
734-4356.

For information concerning live ruminants, contact Dr. Lee Ann Thomas,
Director, Technical Trade Services, Animals, Organisms and Vectors, and
Select Agents, National Center for Import and Export, VS, APHIS, 4700
River Road Unit 38, Riverdale, MD 20737-1231;

\(301\) 734-4935.

For other information concerning this proposed rule, contact Dr. Lisa
Ferguson, Senior Staff Veterinarian, National Center for Animal Health
Programs, VS, APHIS, 4700 River Road Unit 43, Riverdale, MD 20737-1231;
(301) 734-6954.

SUPPLEMENTARY INFORMATION:

Purpose

This document makes final a proposed rule that the Animal and Plant
Health Inspection Service (APHIS) of the U.S. Department of Agriculture
(USDA or the Department) published in the [Federal]{.underline}
[Register]{.underline} on January 9, 2007 (72 FR 1101-1129, Docket No.
APHIS-2006-0041). Additionally, it removes the delay of applicability of
certain provisions of a final rule APHIS published in January 2005. The
removal of delay is discussed below under the heading "Removal of
Partial Delay of Applicability of Provisions of January 2005 Final
Rule."

In our January 2007 proposed rule, we proposed to amend the regulations
in 9 CFR parts 93, 94, 95, and 96 to establish conditions for the
importation of the following commodities from regions that present a
minimal risk of introducing bovine spongiform encephalopathy (BSE) into
the United States: Live bovines for any use born on or after a date
determined by APHIS to be the date of effective enforcement of a
ruminant-to-ruminant feed ban in the region of export; blood and blood
products derived from bovines; and casings and part of the small
intestine derived from bovines.

In this document, we respond to public comments received on the proposed
rule and its underlying risk assessment and other supporting analyses.
Additionally, we discuss below the history of APHIS rulemaking related
to BSE minimal-risk regions.

Background

APHIS regulates the importation of animals and animal products into the
United States to guard against the introduction of animal diseases. The
regulations in 9 CFR parts 93, 94, 95, and 96 (referred to below as the
regulations) govern the importation of certain animals, birds, poultry,
meat, other animal products and byproducts, hay, and straw into the
United States in order to prevent the introduction of various animal
diseases, including BSE, a chronic degenerative disease affecting the
central nervous system of cattle.

With some exceptions, APHIS' regulations prohibit or restrict the
importation of live ruminants and certain ruminant products and
byproducts from the following three categories of regions with regard to
BSE: (1) Those regions in which BSE is known to exist (listed in

§ 94.18(a)(1) of the regulations); (2) those regions that present an
undue risk of introducing BSE into the United States because their
import requirements are less restrictive than those that would be
acceptable for import into the United States and/or because the regions
have inadequate surveillance (listed in § 94.18(a)(2) of the
regulations); and (3) those regions that present a minimal risk of
introducing BSE into the United States via live ruminants and ruminant
products and byproducts (listed in § 94.18(a)(3) of the regulations).

Chronology of Federal Register Publications Regarding BSE Minimal-Risk
Regions

We added the § 94.18(a)(3) category (BSE minimal-risk regions) to the
regulations in a final rule published in the [Federal]{.underline}
[Register]{.underline} on January 4, 2005 (70 FR 459-553,

Docket No. 03-080-3). In the final rule, we specified which commodities
may be imported from BSE minimal-risk regions and under what conditions,
and recognized Canada as a BSE minimal-risk region. (At this time,
Canada is the only recognized BSE minimal-risk region.)

The January 2005 final rule was based on a proposed rule we published in
the [Federal]{.underline} [Register]{.underline} on November 4, 2003 (68
FR 62386-62405, Docket No. 03-080-1). On December 25, 2003, less than 2
weeks before the close of the comment period for our proposed rule, a
case of BSE in a dairy cow of Canadian origin in Washington State was
verified by an international reference laboratory.

In response to comments from the public requesting an extension of the
comment period and in order to give the public an additional opportunity
to comment on the proposed rule in light of this development, on March
8, 2004, we published a document in the [Federal]{.underline}
[Register]{.underline} (69 FR 10633-10636, Docket No. 03-080-2)
reopening the comment period.

On January 4, 2005, along with the final rule, we published in the
[Federal]{.underline} [Register]{.underline} a notice (70 FR 554, Docket
No. 03-080-4) announcing the availability of, and requesting comments
on, a final environmental assessment (EA) regarding the potential impact
on the quality of the human environment due to the importation of
ruminants and ruminant products and byproducts from Canada under the
conditions specified in the final rule. On January 21, 2005, we
published in the [Federal]{.underline} [Register]{.underline} a notice
(70 FR 3183-3184, Docket No. 03-080-5) announcing the availability of a
corrected version of the EA for public review and comment. On April 8,
2005, we published in the [Federal]{.underline} [Register]{.underline} a
finding (70 FR 18252-18262, Docket No. 03-080-7) that the provisions of
the final rule would not have a significant impact on the quality of the
human environment.

On March 11, 2005, we published a document in the [Federal]{.underline}
[Register]{.underline} that gave notice that the Secretary of
Agriculture was delaying until further notice the implementation of
certain provisions of the final rule with regard to certain commodities
(70 FR 12112-12113, Docket No. 03-080-6).

On November 28, 2005, we published in the [Federal]{.underline}
[Register]{.underline} an interim rule (70 FR 71213-71218, Docket No.
03-080-8) that amended certain provisions established by the January
2005 final rule. The interim rule broadened the list of who is
authorized to break seals on conveyances and allows transloading under
supervision of products transiting the United States.

On March 14, 2006, we published in the [Federal]{.underline}
[Register]{.underline} a technical amendment (71 FR 12994-12998, Docket
No. 03-080-9) that clarified our intent with regard to certain
provisions in the January 2005 final rule and corrected several
inconsistencies within the rule.

On August 9, 2006, we published in the [Federal]{.underline}
[Register]{.underline} a proposed rule (71 FR 45439-45444, Docket No.
APHIS-2006-0026) that proposed to amend the provisions established by
the January 2005 final rule by removing several restrictions regarding
the identification of animals and the processing of ruminant materials
from BSE minimal-risk regions, and by relieving BSE-based restrictions
on hide-derived gelatin from BSE minimal-risk regions. We solicited
comments concerning our proposal for 60 days ending October 10, 2006. On
November 9, 2006, we published a document in the [Federal]{.underline}
[Register]{.underline} (71 FR 65758-65759,

Docket No. APHIS-2006-0026) reopening and extended the comment period
until November 24, 2006. We received a total of 10 comments by that
date. We are considering the issues raised by the commenters and will
address them in a separate rulemaking document.

Scope of the January 2005 Final Rule

The regulations established by the January 2005 final rule and
subsequent amendments have allowed the importation from BSE minimal-risk
regions of live bovines that are under

30 months of age when imported and when slaughtered and that have been
subject to a ruminant feed ban equivalent to that in place in the United
States.

We did not attempt, for that rulemaking, to assess the BSE risk
associated with the importation of live bovines 30 months of age or
older from a BSE minimal-risk region. Our March 8, 2004, document that
reopened the comment period on the November 2003 proposed rule stated
that APHIS was evaluating the appropriate approach with regard to the
importation of live animals 30 months of age or older from BSE
minimal-risk regions, and would address that issue in a supplemental
rulemaking proposal in the [Federal]{.underline} [Register]{.underline}.
The provisions in our January 9, 2007, proposed rule regarding live
bovines were the result of that evaluation.

The regulations established by the January 2005 final rule also provided
for the importation of the following commodities derived from bovines of
any age: (1) Meat, meat food products, and meat byproducts; (2) whole or
half carcasses; (3) offal; (4) tallow composed of less than 0.15 percent
insoluble impurities that are not otherwise eligible for importation
under

§ 95.4(a)(1)(i) of the regulations; and (5) gelatin derived from bones
of bovines that is not otherwise eligible for importation under §
94.18(c) of the regulations.

The January 2005 final rule and subsequent amendments did not change the
regulations concerning the importation of blood and blood products from
regions listed in § 94.18(a); the requirements for the importation of
blood and blood products from BSE minimal-risk regions remain the same
as the requirements for importation of blood and blood products from
other regions listed in § 94.18(a)--only serum and serum albumin have
been eligible for importation. The January 2005 final rule also did not
change the regulations concerning the importation of bovine casings
(defined as intestines, stomachs, esophagi, and urinary bladders) from
regions listed in § 94.18(a); the requirements for the importation of
bovine casings from BSE minimal-risk regions remain the same as the
requirements for importation of bovine casings from other regions listed
in § in 94.18(a)--only bovine stomachs are eligible for importation.

The January 2005 final rule and subsequent amendments allowed trade to
resume in many, but not all, of the commodities that had been prohibited
importation from Canada following detection of a BSE-infected cow in
Canada in May 2003. Following our January 2005 final rule, we continued
to consider the BSE risk associated with older bovines and other bovine
products from BSE minimal-risk regions\--and Canada in
particular\--including bovine blood and blood products, bovine small
intestine other than the distal ileum, and bovine casings, and

included provisions in our January 2007 proposed rule for the
importation or those

commodities.[^1]

Peer Review of APHIS' Risk Assessment

As part of this rulemaking, APHIS conducted an assessment that evaluated
the animal health risk to the United States of BSE\-- i.e., the
likelihood of establishment and the potential impacts of cases that may
occur even without establishment---as a result of importing the bovine
commodities considered in this rule (APHIS 2006b). Our assessment
concluded that, over the 20 years of the analysis, the BSE risk to the
United States is negligible. We made the risk assessment available for
public review and comment at the time the proposed rule was published.

In addition to making the risk assessment available for review and
comment by the general public, we requested an external, formal,
independent peer review of the assessment by recognized experts in the
field, consistent with guidelines of the U.S. Office of Management and
Budget (OMB 2004). The objective of the peer review was to determine
whether the risk assessment was scientifically sound, transparent, and
consistent with international standards (e.g., those by the OIE); the
application of external assessments or models was appropriate; and the
assumptions were justified, supported and reasonable. Comments submitted
by the public on the proposed rule were submitted to the peer reviewers
for their consideration. The peer review process was coordinated by an
independent private contractor.

The full peer review report may be viewed at
http://www.aphis.usda.gov/peer_review/peer_review_agenda.shtml.
Additionally, we have included below, under the heading "Final Report
from Peer Review of APHIS' Risk Assessment and Responses to Peer
Reviewer Questions and Recommendations," APHIS' responses to reviewer
comments that we consider representative of the content-related
questions and recommendations of the report, and our response to those
questions and recommendations. In summary, the reviewers found that the
methods used in the risk assessment were scientifically rigorous in
terms of using existing literature and models appropriately and making
sound assumptions and that the risk assessment itself adhered to
international risk assessment standards. The reviewers also agreed with
the conclusion that the likelihood of establishment of BSE in the U.S.
cattle population is negligible.

In addition to being supportive of the methods, evidence, and
conclusions presented by APHIS in the risk assessment, the reviewers
made several useful suggestions for its improvement. We made several
clarifications and updates in consideration of these comments. While we
expect that the changes improve the transparency and accuracy of the
document, they do not alter our conclusion that the risk to the United
States of BSE---i.e., the likelihood of establishment and the potential
impacts of cases that may occur even without establishment---resulting
from the changes outlined in the proposed rule is negligible.

Removal of Partial Delay of Applicability of Provisions of January 2005
Final Rule

Our January 2005 final rule made eligible for importation from Canada
meat that is derived from bovines slaughtered in BSE minimal-risk
regions, as well as certain other specified commodities derived from
such bovines, provided certain specified risk-mitigating conditions have
been met. The risk analysis we conducted for that rulemaking indicated a
low BSE risk from such commodities derived from bovines of any age if
certain conditions are met (APHIS 2004). These conditions include the
removal Number range CHAPTERof those tissuesNumber range CHAPTER
considered at particular risk of containing the BSE agent in infected
animals (specified risk materials, or SRMs). In that rulemaking, we
discussed regulatory requirements implemented by FSIS in 2004 that
banned SRMs from the human food supply in the United States, and we
stated that Number range CHAPTERthe Canadian Government had established
similar safeguards in Canada.

Consequently, we provided Number range CHAPTERthat meat, meat
byproducts, meat food products, and offal derived from bovines are
eligible for importation from BSE minimal-risk regions if the following
conditions, as well as all other applicable requirements of the
regulations, are met:

● The commodity is derived from bovines that have been subject to a
ruminant feed ban equivalent to the requirements established by the U.S.
Food and Drug Administration at 21 CFR 589.2000;

● The commodity is derived from bovines for which an air-injected
stunning process was not used at slaughter; and

● The SRMs and small intestine of the bovines from which the commodity
was derived were removed at slaughter.

Additionally we provided that tallow composed of less than 0.15 percent
insoluble impurities that is not otherwise eligible for importation
under 9 CFR 95.4(a)(1)(i), and gelatin derived from bones of bovines
that is not otherwise eligible for importation under 9 CFR 94.18(c) are
eligible for importation from BSE minimal-risk regions, provided certain
specified conditions are met.

In the economic analysis we conducted for the January 2005 final rule,
we evaluated the potential economic effects of implementing that
rulemaking, including implementation of the provisions allowing the
importation of meat and other commodities derived from bovines
slaughtered in BSE minimal-risk regions (APHIS 2004a).

In March 2005, APHIS published a document in the [Federal]{.underline}
[Register]{.underline} that, pursuant to an announcement by the
Secretary of Agriculture on February 9, 2005, delayed the applicability
of the provisions in our January 2005 final rule as they apply to the
importation from Canada of the following commodities when derived from
bovines 30 months of age or older when slaughtered: (1) Meat, meat food
products, and meat byproducts other than liver; (2) whole or half
carcasses; (3) offal; (4) tallow composed of less than 0.15 percent
insoluble impurities that is not otherwise eligible for importation
under 9 CFR 95.4(a)(1)(i); and (5) gelatin derived from bones of bovines
that is not otherwise eligible for importation under 9 CFR 94.18(c).

In his February 9, 2005, announcement, the Secretary stated that because
ongoing investigations into recent finds of BSE in Canada in animals
over 30 months of age were not complete, he felt it prudent to delay the
effective date for allowing imports of meat from bovines 30 months of
age and over. He also indicated that the delay of applicability would
address concerns that the January 2005 final rule allowed the
importation of beef from bovines 30 months of age or older, while
continuing to prohibit the importation of live cattle 30 months of age
or older for processing in the United States. The Secretary stated that
the Department would consider and develop a plan---based on the latest
scientific information and with the protection of public and animal
health as the highest priority\--to allow imports of live bovines 30
months of age or older as well as beef from animals 30 months of age and
older.

Since the date of the partial delay of applicability of our January 2005
final rule, we have obtained additional information regarding all
aspects of the issues that prompted the delay of applicability and have
conducted additional analyses in line with the plan as described. The
risk assessment for this final rule demonstrates the negligible BSE risk
from the importation of additional classes of live cattle, including
those 30 months of age or older. This includes acknowledging the
potential risk pathway that could be available if the SRMs from infected
imported cattle entered the ruminant feed supply in contravention of
current feed regulations. The negligible risk from the importation of
live older cattle therefore gives further support to the conclusion of
the risk analysis conducted for our January 2005 final rule regarding
meat and meat products derived from bovines of any age in BSE
minimal-risk regions. Specifically, the risk is even lower for the
importation of meat and meat products, as the SRMs will be removed in
accordance with the regulations, than for live bovines.

Therefore, this document will remove the partial delay of applicability
of the January 2005 final rule. The removal of the partial delay of
applicability will become effective on the date that the other
provisions of this document become applicable. Including the removal of
the partial delay of applicability in this final rule and making it
effective along with the other provisions of this rule will enable APHIS
to more efficiently communicate the necessary implementation
instructions to U.S. Customs and Border Protection and to APHIS field
personnel. Additionally, it will provide commercial entities more
flexibility in carrying out import planning based on the relative
economic merits of importing live bovines or meat and other products
derived from bovines.

Because, for reasons of efficiency for APHIS and the regulated
community, the Secretary has decided to remove the delay in
applicability as part of this document, we looked at the economic
effects of doing so in combination with allowing the importation of
bovines born on or after March 1, 1999. Although we previously analyzed
the economic effects of allowing the importation of meat and other
products derived from bovines 30 months of age or older, the economic
analysis for this rule provides an updated analysis.

Public Comments on the January 2007 Proposed Rule

We solicited comments concerning our January 2007 proposal for 60 days
ending March 12, 2007. We received close to 400 comments by that date.
The commenters included cattle industry and farm bureau associations,
consumer groups, representatives of the Canadian Government and other
foreign countries, State Departments of Agriculture, food processing
companies, individual cattle producers, and other members of the public.

Subjects of Comments Received

A number of commenters supported the rule and recommended no changes to
the proposed provisions. Other commenters supported the rule in general
but recommended certain changes or actions. Others comments consisted
only of recommended changes, objections to the rule in general or to
specific provisions, or requests for clarification. We discuss below by
topic the issues raised by commenters and our response to those
comments.

General Opposition to Imports

[Issue]{.underline}: A number of commenters expressed general opposition
to the importation of any bovines or bovine products from BSE
minimal-risk regions.

[Response]{.underline}: It appears to us that these commenters are not
addressing just our January 2007 proposed rule, but, rather, also the
January 2005 final rule that recognized the category of BSE minimal-risk
regions and established conditions for the importation of certain
ruminants and ruminant products from such regions.

As we discussed in the January 2005 final rule, the comprehensive
analysis and evaluation we conducted for that rulemaking led to the
conclusion that the conditions specified in that rule for the
importation of ruminants and ruminant products from BSE minimal-risk
regions would be effective and would therefore protect against the
introduction of BSE into the United States. Our January 2007 proposed
rule considered expansion of the types of commodities allowed
importation from BSE minimal-risk regions, based on an evaluation of the
risk (i.e., the likelihood of establishment and the potential impacts of
cases that may occur even without establishment) of importing from
Canada live animals, blood and blood products, and the small intestine
excluding distal ileum.) Given the determination of negligible BSE risk
associated with the provisions of this final rule, and the findings
associated with our 2005 final rule, there is no scientific basis for
increasing restrictions from those already in effect or being
established in this rule.

[Issue]{.underline}: A number of commenters expressed opposition,
without further explanation, to the importation from BSE minimal-risk
regions of live bovines 30 months of age or older and to the importation
of products derived from such bovines.

[Response]{.underline}: We discussed in our January 2007 proposed rule
the rationale for our proposal to allow the importation, under certain
conditions, of live bovines 30 months or older from BSE minimal-risk
regions. We discussed further the assessment of the disease risk of
allowing such imports that we conducted before issuing our proposal. It
is not clear to us which factors in our risk assessment or discussion of
rationale were being addressed by those commenters who expressed general
opposition to the importation of live bovines 30 months of age or older.
We continue to consider the BSE risk from importing live bovines under
the conditions specified in this rule to be negligible.

[Issue]{.underline}: Several commenters who expressed opposition to the
proposed rule expressed concern that the agent that causes BSE has yet
to be fully characterized. The commenters stated that what we know about
BSE is mostly supposition, which should be a compelling reason not to
allow the importation of cattle from a region of known BSE outbreaks.
One commenter stated that research recently conducted at Yale University
suggests that one of the agents that activates BSE may be viral, which,
according to the commenter, implies that a feed ban is effective only
when the virus is not present or active.

[Response]{.underline}: As one of the commenters noted, some researchers
(Manuelidis [et]{.underline} [al]{.underline}., 2007) suggest that
diseases characterized as transmissible spongiform encephalopathies
(TSEs), such as BSE, may be caused by viruses, although, at this point,
no infection-specific nucleic acids have been identified.

Experimental data and epidemiological studies strongly suggest that
contaminated feed containing ruminant proteins derived from infected
animals was the source of the epidemic, and that the epidemic was
perpetuated through the use of these materials in ruminant feed. APHIS
considers that regardless of the characteristics of the BSE causal
agent, it is clear that the epidemic was sustained and amplified by the
recycling of BSE infected cattle into cattle feed. Despite the
difficulty in definitively determining the causal agent of BSE, risk
factors for transmission of the agent have been identified. The
identification and characterization of these risk factors through
epidemiological and experimental study have allowed the development of
effective mitigations to prevent BSE spread. The development and
demonstrated effectiveness of those mitigations does not require
identification of the agent itself. We consider mitigation measures that
address the risk factors for BSE to be effective regardless of the
precise nature of the BSE agent.

Prevalence of BSE in Canada

Although the provisions of this rule apply to any region recognized by
APHIS as a BSE minimal-risk region, at present APHIS recognizes only one
country, Canada, as such a region. Therefore, in evaluating the BSE risk
of implementing this rule, we conducted an assessment of the risk of
importing bovines and bovine products from Canada under the provisions
of our proposed rule (APHIS 2006b). In our risk assessment, we laid out
the likely risk pathway (i.e., a series of occurrences or steps
necessary for disease to enter and become established).

In conducting our risk assessment, one of the factors we took into
account was the prevalence of BSE in Canada, since prevalence is one
factor that affects the likelihood of a BSE-infected bovine being
imported into the United States. We received a number of comments from
the public that addressed our estimate of the prevalence of BSE in
Canada. Although some of the comments supported our estimate of BSE
prevalence in Canada, in general the commenters maintained that such
prevalence is either higher than we estimated, may be increasing, or is
uncertain, or that our methods of estimating it were flawed. The
methodology we used to arrive at such estimates is discussed in detail
in our risk assessment. However, to provide some context for the issues
raised by commenters and discussed below, we summarize here the models
that we used in conducting our assessment.

The number of BSE cases detected through surveillance understates the
disease prevalence because exposed animals may be incubating disease and
carrying infectious material in their tissues without presenting
clinical symptoms. Like many transmissible spongiform encephalopathies
(TSEs), BSE has an incubation period of several years. Therefore, the
disease is not detectable in its early stages with current technology.
Moreover, surveillance will miss a proportion of detectable cases.
Therefore, we applied statistical methods to the available epidemiologic
and surveillance data to estimate, with attendant uncertainty, the
prevalence of BSE in Canada.

We used two related, but distinct, methods to estimate BSE prevalence in
Canada: the BSsurvE model and the Bayesian Birth Cohort (BBC) model.
Given its international prominence, we used the European Union (EU)
BSurvE model (Wilesmith [et]{.underline} [al]{.underline}., 2004, 2005),
recently developed for the purpose of estimating BSE prevalence in
national herds. The BSurvE model is noteworthy for its sound
epidemiologic structure, including stratifying cattle by age and cause
of death (i.e., healthy slaughter, fallen stock, casualty slaughter, or
clinical suspect) and accounting for the relative likelihood of
detecting BSE in various strata (EFSA 2004). The BSurvE model structure
calculates BSE surveillance point values (random sample size
equivalents) represented by targeted Canadian sampling of certain groups
of cattle in which BSE cases are more likely to be detected. This
approach allows for the inclusion of infected, but undetected, cases
(such as young animals in the early stages of incubation) in the
estimate, which would be ignored by conventional methods.

The other prevalence estimation model that we used is the BBC model.
This model uses the BSurvE model structure and incorporates additional
information. Unlike BSurvE, the BBC model adopts a Bayesian statistical
framework to incorporate prior information about the decreased incidence
of BSE observed in animals born after a feed ban equivalent to the
initial ruminant-to-ruminant feed ban introduced in the United Kingdom
in 1988.

[Issue]{.underline}: One commenter stated that BSE has become "firmly
established" in Canada.

[Response]{.underline}: We disagree with the comment, which we consider
to erroneously equate disease presence, which may be transient, with
disease establishment. In epidemiology, an infectious disease has become
established in a population when the disease is perpetuated in the
population without the need for reintroduction from an external source.
For example, OIE's sister agency, the international Commission on
Phytosanitary Measures (CPM) defines plant pest establishment as "the
perpetuation, for the foreseeable future, of a nonindigenous biological
agent within an area after entry" (CPM 2001). With the implementation
and continuation of a feed ban in Canada, all evidence points toward
eventual eradication, rather than perpetuation of BSE in that country.

[Issue]{.underline}: One commenter stated that, since the time APHIS
published its January 2005 final rule classifying Canada as a BSE
minimal-risk region, the Agency has presented no new evidence that would
support allowing the importation from Canada of the additional
commodities discussed in the proposed rule. In fact, stated the
commenter, evidence points to Canada having a higher prevalence of BSE
than APHIS had previously determined.

[Response]{.underline}: As discussed in our January 2007 proposed rule,
we revisited our earlier conclusions and policies by conducting a
rigorous risk assessment based on current available scientific knowledge
of the disease. We used peer reviewed risk assessment models in our
analysis to estimate the prevalence of the disease in Canada and to
analyze the likelihood of BSE establishment in the United States and the
potential impacts of cases that may occur even without establishment as
a result of the importation into the United States of the bovine
commodities considered in this rule. The risk assessment itself was peer
reviewed by experts in the field. As noted above, the reviewers agreed
with the conclusion that the risk of establishment of BSE in the U.S.
cattle population is negligible and noted that several assumptions in
the risk assessment actually over-estimate the risk, so the overall
finding that the BSE risk is negligible is reasonable. Based on the
results of the risk assessment, we concluded that we could safely import
Canadian cattle born on or after March 1, 1999, blood and blood
products, and small intestines, excluding the distal ileum.

[Issue]{.underline}: Several commenters raised questions about the
ability to statistically determine BSE prevalence "trends" in Canada,
but reached different conclusions. Some commenters stated that the
trajectory of BSE prevalence in Canada cannot be determined by available
surveillance data and that, therefore, BSE prevalence in Canada may be
increasing. On the other hand, another commenter requested that APHIS
make clear that, despite the Agency's use of the BSurvE Prevalence B
estimate, prevalence should not be assumed constant over time. The
commenter requested that APHIS emphasize that lack of statistical
evidence that prevalence

varies from cohort to cohort is likely the result of inadequate
statistical power,[^2] and that, nevertheless, BSE prevalence in Canada
is most likely decreasing.

[Response]{.underline}: In our risk assessment for this rule, we
acknowledge that, given the rarity of BSE cases in Canada, the
surveillance data are unlikely to provide adequate statistical power to
detect any trend. However, as discussed in the risk assessment, we
consider it likely that the prevalence of BSE in Canada will decrease
over time. With so few total BSE cases observed in Canada, the
statistical power to detect differences in prevalence between cohorts is
low. The peer reviewers of our risk assessment concur with our
conclusion. (RTI 2007, pp. 6-26, 6-27).

[Issue]{.underline}: One commenter estimated the Canadian BSE prevalence
to be 6.4 cases per million cattle. Further, the commenter stated that
this prevalence estimate is smaller than the risk estimate provided by
one of APHIS' own risk assessments for a more pessimistic value of the
misfeeding rate. The commenter suggested that this discrepancy reflects
optimistic modeling assumptions in APHIS' risk assessment.

[Response]{.underline}: We disagree with the commenter's analysis.
Although the commenter's alternative prevalence estimate, based on a
simple extrapolation method, falls within the 90 percent confidence
interval[^3] of APHIS' BSurvE Prevalence B estimate (2.4 to 6.8 cases
per million adult cattle) with an expected value of 3.9 per million case
per million adult cattle (APHIS 2006c, table 5), it is based on
different assumptions. Based on an analysis of BSE testing in the EU in
2001 and 2002, the commenter's prevalence estimate assumes that targeted
"risk cattle" are only 10 times more likely to test positive for BSE
than non-targeted routinely

slaughtered cattle. Considering the BSE testing conducted in the EU
during 2001-2004 (EC

2005a, table 3, p. 23), cattle in the European BSE risk animals category
(emergency slaughter,

clinical suspects, and fallen stock) are 22 times more likely to test
BSE positive than cattle in the

healthy slaughter category. Using the commenter's simple extrapolation
method and these more

up-to-date data on BSE test positive ratio, the resulting BSE prevalence
estimate would be 2.9 per million cattle. Although actually lower than
the expected value for the BSurvE estimate, this value also falls within
the 90 percent confidence interval of the Agency's BSurvE Prevalence B
estimate, described above. APHIS calculated both the BSurvE Prevalence B
estimate and the Bayesian Birth Cohort (BBC) prevalence estimate, but
judged the latter to better characterize the BSE prevalence in Canada
over the next 20 years, due to the expected downward pressure exerted on
the disease by a feed ban.

With regard to the commenter's suggestion of a discrepancy, the
commenter provides no specific reference to "the risk estimate provided
by one of APHIS' own risk assessments," but appears to refer to the main
body of the 2005 report of Cohen and Gray (available at

http://www.fsis.usda.gov/PDF/BSE_Risk_Assess_Report_2005.pdf), which was
prepared for the USDA's Food Safety and Inspection Service (FSIS). Cohen
and Gray (2005) do not estimate Canadian BSE prevalence, but rather the
effect of introducing 500 BSE-infected cattle into the United States,
and the pessimistic misfeeding assumption estimates that introduction
would result in an expected 2,600 new cases over 20 years. There is no
discrepancy because this aspect of the Cohen and Gray 2005 report is not
relevant to our estimate of Canadian BSE prevalence.

[Issue]{.underline}: Based on APHIS' statements that animals are
infected within their first year, and that feed produced prior to the
feed ban would not be available for longer than a year, one commenter
stated that additional undetected infected animals must have existed and
been rendered in order to provide infectivity to detected cases.
Therefore, stated the commenter, adding in these "undetected" animals
raises the number of Canada's known and measurable BSE cases rises from
10 to 14, and APHIS' estimate of BSE prevalence in Canada based on 10
animals is low.

[Response]{.underline}: We disagree with the commenter's analysis and
conclusion, which assumes that we did not take into account the
possibility of undetected cases of BSE in arriving at our prevalence
estimate. APHIS' estimate of the prevalence of BSE in Canada was
adjusted to account for cases that would not be tested and for false
negative test results. Also, although the bulk of feed will be consumed
within a year after it is produced, residual infectivity may remain in
the feed supply chain for an extended period. For example, examination
of BSE cases in animals born in the United Kingdom after the 1996
"reinforced feed ban" suggests that these animals may have been infected
from the persistence of the BSE agent in residual feed in storage bins
(SEAC 2005).

[Issue]{.underline}: One commenter suggested that it is likely that
Canada has numerous cattle over 30 months of age that are presently
incubating the BSE disease, rather than just a few (4.1) as suggested by
APHIS.

[Response]{.underline}: The estimate of 4.1 BSE-infected animals in the
standing Canadian adult cattle population was based on the expected BSE
prevalence in Canada under the BBC model. Using the estimated prevalence
under BSurvE Prevalence B resulted in an estimate of 23.2 BSE-infected
animals in the standing Canadian adult cattle population. Although,
quantitatively, our risk assessment did not assume a decline in BSE
prevalence over the next 20 years, we qualitatively consider such a
decline to be likely because of continued compliance with the feed ban.
Therefore, in assessing the BSE risk associated with imports from Canada
over the next 20 years, we consider the result of the BBC model to be
the more applicable prevalence estimate for use in our quantitative
exposure model.

[Issue]{.underline}: One commenter indicated that although it is unclear
whether the APHIS estimates of Canadian BSE prevalence included the BSE
case confirmed on August 23, 2006, the APHIS estimates certainly do not
take into account the case confirmed on February 7, 2007.

[Response]{.underline}: We estimated Canadian BSE prevalence based on a
7-year surveillance period through August 15, 2006. This surveillance
period included the detection of nine BSE cases of Canadian origin
reported through August 2006. Through surveillance conducted from August
16, 2006, through April 2007, Canada detected one BSE case born in 2000
and another born in 2001 (CFIA 2007). The BSE prevalence estimation
methods used by APHIS (2006a) require detailed data to stratify tested
cattle by age and cause of death (healthy slaughter, fallen stock,
casualty slaughter, or clinical suspect) that are unavailable for the
more recent surveillance period. However, we can assess the sensitivity
of our previous Canadian BSE prevalence estimates by adding the two
additional cases without changing the BSE surveillance points
accumulated by Canada during the 7-year surveillance period through
August 15, 2006 (APHIS 2006a, table 4)[^4]. This approach results in a
revised table of BSurvE points and BSE cases by birth year cohort that
reflects a total of 11 BSE cases of Canadian origin reported through
April 2007 (APHIS 2007, table i).

Using the same methods described in USDA's estimate of BSE prevalence in
Canada (APHIS 2006c), we obtain updated Canadian BSE prevalence
estimates:

• BSurvE Prevalence B: 90 percent confidence interval = 3.0-8.0 cases
per million adult cattle

• Bayesian Birth Cohort (BBC, Winbugs): 90 percent confidence interval =
0.47-1.2 cases per million adult cattle

Because the updated confidence intervals contain the previous expected
value estimates of 0.68 per million (BBC) and 3.9 per million (BSurvE
Prevalence B) (APHIS 2006c), we conclude that the prevalence estimate is
not sensitive to the addition of the two additional BSE cases discovered
in Canada in August 2006 and February 2007.

[Issue]{.underline}: One commenter stated that APHIS' expectation that
the prevalence of BSE in Canada will continue to decline from its
present minimal level does not acknowledge that the

prevalence of BSE in Canada right now is very uncertain. The commenter's
independent estimate of the current Canadian BSE prevalence is "on the
order of 4-6 per million."

[Response]{.underline}: APHIS' risk assessment addresses the uncertainty
in the prevalence of BSE in Canada by considering estimates that differ
by more than a factor of five (APHIS 2006b). The BBC prevalence estimate
has an expected value of 0.68 cases per million adult cattle.[^5] The
BSurvE Prevalence B estimate has an expected value of 3.9 per million.
The commenter's own method of estimation--"on the order of 4-6 per
million"\--provides an estimate on the same order of magnitude as the
BSurvE Prevalence B estimate of current prevalence. In either case,
prevalence is extremely low.

[Issue]{.underline}: One commenter stated that, although APHIS estimates
that BSE prevalence in Canada is about 6.8 or more times greater than in
the United States (0.68 vs. 0.1 per million), this does not adjust for
the important fact that the first BSE case in the United States was
imported from Canada.

[Response]{.underline}: The APHIS October 2006 estimate of BSE
prevalence in Canada is based on the nine BSE cases of Canadian origin
that had been confirmed in North America as of August

23, 2006. This total includes a case of BSE that was confirmed in
Washington State on December 25, 2003 (APHIS 2006c, p. 1). The estimate
of BSE prevalence in the United States excludes this case.

[Issue]{.underline}: One commenter stated that the calculation of BSE
prevalence in Canada used in APHIS' risk assessment excluded the
European-born case detected in 1993.

[Response]{.underline}: The 1993 Canadian BSE case of European origin
was likely part of the original exogenous source of BSE infectivity
introduced into Canada that caused the subsequent generation of
indigenous cases. Imported cases of BSE reflect an exposure to the
disease that occurred elsewhere, and, therefore, are not generally
included in estimates of prevalence that reflect native exposure.
Similarly, when APHIS estimated the prevalence of BSE in the United
States, the BSE-infected cow of Canadian origin that was detected in
Washington State in December 2003 was excluded from the analysis,
because it was an imported animal. In addition, as noted in APHIS'
estimation of BSE prevalence in Canada (APHIS 2006c, p. 5), in
accordance with OIE guidelines (which indicate that surveillance points
totals taken into account in assessing a country's BSE risk be
accumulated over a maximum of 7 consecutive years), the estimated
prevalence of BSE in Canada is based on surveillance data accumulated
over a 7-year period beginning August 16, 1999. The 1993 case predates
the OIE 7-year period.

[Issue]{.underline}: One commenter indicated that APHIS should not take
action on the proposal until real surveillance data (not model-based
predictions) show that the BSE problem has abated. The commenter stated
further that denying Canada's BSE problem, or assuming it away with
unvalidated and incorrect risk modeling assumptions, does not
responsibly manage BSE risks to the United States.

[Response]{.underline}: We disagree with the commenter. In low BSE
prevalence populations such as Canada, surveillance at levels that meet
or even greatly exceed OIE guidelines provide insufficient statistical
power to reliably detect changes in BSE prevalence over time. In other
words, starting with a very low number of infected animals makes it very
difficult to statistically demonstrate decreases in that number, even
when testing a relatively large number of animals

The OIE Guidelines for BSE Surveillance (Type A) call for countries to
accumulate 300,000 BSE surveillance points over 7 consecutive years in
order to detect with 95 percent confidence a prevalence level of at
least one case of BSE per 100,000 animals (OIE 2006, Appendix 3.8.4).

To illustrate the comparative difficulty in demonstrating trends in low
versus high prevalence populations, consider two hypothetical countries
that have accumulated 1 million BSE surveillance points for each of two
cohorts: Animals born before and animals born after the introduction of
a ruminant-to-ruminant feed ban. Under this scenario, sampling levels in
both countries far exceed the OIE guidelines. Assume, however, that the
two countries differ with respect to their initial prevalence--i.e., the
initial prevalence in "Country A" is 1 infected animal per 10,000
animals, while that in "Country B" is 1 infected animal per 100,000
animals.

For a given surveillance level, the statistical power of a hypothesis
test can be evaluated as a function of the supposed change in BSE
prevalence between cohort 1 (pre-feed ban) and cohort 2 (post-feed ban).
The conventional minimum statistical power criterion is 80 percent. In
other words, the probability that a statistical analysis will detect a
true difference across groups should be at least 80 percent. The
conventional significance level is 5 percent, meaning that we would
conclude that a result was nonrandom if it were 5 percent or less likely
to occur by chance alone. In our hypothetical scenario, the power of the
surveillance in the country with higher prevalence, Country A, to detect
a 50 percent decline in BSE prevalence is 98 percent. In comparison, the
power of the surveillance in the lower prevalence Country B to detect a
50 percent decline in BSE prevalence is only 25 percent. In other words,
if the Country B feed ban actually led to a 50 percent decline in BSE
prevalence and the equivalent of 2 million random samples were collected
(6.7 times the level under the OIE guidelines), there would still be a
75 percent chance of concluding that the prevalence was unchanged from
its initial level of 1 infected animal per 100,000 animals.

An important implication of the low statistical power of sampling in low
prevalence populations is that BSE surveillance data are unlikely to
provide a purely statistical basis for making a determination about the
date when a specific intervention (e.g., a ruminant-to-ruminant feed
ban) becomes effective, even when large amounts of surveillance data are
available. For example, according to the OIE (2007a), the annual
incidence of reported BSE cases in the Netherlands dropped from 13.2 to
0.8 per million adult cattle from 2001-2005[^6]. Despite the EU BSE
surveillance requirements for testing all risk animals over 24 months of
age and all healthy slaughter cattle over 30 months of age, Figure 1
shows that application of the BSurvE (Prevalence A) model to Netherlands
BSE surveillance data does not yield sufficient statistical power to
draw clear distinctions among birth year cohorts as prevalence declines
(Figure 1).

Figure 1. Application of BSurvE to Netherlands BSE surveillance data

![](media/image1.wmf){width="5.125in" height="3.0in"}

Source: Heres [et]{.underline} [al]{.underline}. (2005, table 4.1)

Note that, in figure 1, there is a decrease in estimated prevalence
between 1998 birth-year cohorts and 1999 birth-year cohorts, while, at
the same time, there is an increase in the upper confidence limit. This
apparent paradox is indicative of another shortcoming of relying on
surveillance data alone to determine whether BSE prevalence has been
reduced. Because fewer animals from the most recent birth year cohorts
are tested when sent to slaughter, uncertainty about the prevalence in
the most recent cohorts is much greater than in older cohorts.
Furthermore, the lower likelihood of detecting BSE in young infected
animals means that the young animals that are tested contribute
relatively little to reducing uncertainty in the true (as opposed to
apparent) BSE prevalence. These two sources of uncertainty in young
birth cohorts (low numbers of animals tested, and little value in the
surveillance data that are gathered from them) cause an asymmetrical
increase in the upper limit of the confidence interval compared to the
lower confidence limit. This effect on the upper confidence limit on BSE
prevalence is most pronounced for the most recent birth year cohorts
which are less likely to be tested and will not have lived long enough
to manifest BSE, even if they have been infected. Wilesmith
[et]{.underline} [al]{.underline}. (2004, figure 3) further illustrates
this same concept.

Consequently, if the effectiveness of a country's safeguards against BSE
amplification were determined strictly by setting a tolerance for the
upper confidence limit on BSE prevalence associated with the "real
surveillance data," one might reach the incorrect conclusion that
prevalence is increasing, when in actuality, the result is simply due to
testing fewer and younger animals in the most recent birth year cohorts.
Finally, relying solely on surveillance data fails to account for under
reporting of disease due to the lack of diagnostic sensitivity to detect
BSE at an early stage of disease. By accounting for the possibility of
false negative test results, epidemiologic models such as BSurvE are
recognized as providing a more accurate estimate of true BSE prevalence
than the apparent prevalence measured by surveillance data alone.

[Issue]{.underline}: One commenter stated that the output from the
BSurvE model used by Canada in 2005 grossly underestimated Canada's 2006
and 2007 BSE prevalence and, therefore, the BSurvE model is unreliable
for estimating Canada's BSE prevalence. The commenter stated further
that, at the minimum, APHIS should determine the erroneous inputs that
resulted in the failed prediction in 2005 and correct them.

[Response]{.underline}: In the risk assessment conducted for this
rulemaking, APHIS used its own prevalence estimate, not that of the
Canadian Food Inspection Agency's (CFIA's) 2006 prevalence estimate,
which was not based on BSurvE, but on a modified version that appears
similar to the APHIS BBC model. The commenter cites CFIA's Assessment of
the North American BSE Cases Diagnosed from 2003--2005 (Part II), which
states that "when the BSurvE model was recently applied to Canada's
statistics and adjusted to account for the effectiveness of the 1997
feed ban (based on experiences with the 1988 feed ban in the United
Kingdom), the resulting prediction was that it could be expected that
three infected animals remain within the national herd" (CFIA 2006, p.
13).

APHIS' estimation of BSE prevalence in Canada (APHIS 2006c) is that the
expected prevalence values under the BBC and BSurvE Prevalence B models
correspond to an expected number of BSE-infected animals in the standing
Canadian adult cattle population of 4.1 and 23.2, respectively. APHIS
further explains that it is important to note that this range of
prevalence estimates represents uncertainty and not variability.
BSE-infected animals are recruited into and exit from the adult cattle
population over time, but at a given point in time, the number of
infected animals in the population is a fixed but uncertain value.

Assuming the overall probability of infection remains constant over
time, the actual number of infected cattle in the population at any
given point in time would still vary randomly about the mean. This
variability is incorporated in the model supporting the exposure
assessment for live bovines by means of the Poisson variability
distribution. Assuming a fixed mean prevalence of 4.1 and 23.2 BSE
infected animals in the standing adult cattle population in Canada, the
95th percentile of the Poisson distribution are 7 and 31 BSE-infected
animals in any given year, respectively. We note that these numbers are
greater than the five BSE cases detected in Canada in 2006, which means
that the greatest number of Canadian BSE cases identified in a single
surveillance year is lower than even the 95th percentile of
distribution.

[Issue]{.underline}: One commenter stated that, if the United States
were finding BSE cases at the same rate as in Canada, this would
translate into roughly 40 BSE cases detected in the United States since
January 2006, which would be regarded as a large number. The commenter
stated further that, at this time, the BSE situation in Canada does not
appear to be improving.

[Response]{.underline}: We do not agree with the commenter. The
commenter's conclusion appears to be based on a cursory estimate and
does not provide an accurate comparison of BSE cases detected in Canada
with a comparable number that would have been detected in the United
States, given the larger U.S. cattle population. The commenter's
comparison fails to take into account other years of surveillance, as
well as the age and surveillance stream of tested animals. These data
are extremely important for estimating BSE prevalence. A comparison
based solely on the number of detected cases ignores infected animals
with unapparent or undetected infections.

Table 1 provides a direct comparison of the estimated BSE prevalence in
the current standing adult cattle population of the United States and
Canada, respectively, using identical estimation methods (APHIS 2006a;
2006c).

Table 1.\--[Comparison of estimated BSE prevalence in the current
standing adult cattle population of U.S. and Canada]{.underline}

  ---------------- ---------------------------------- -------------------
  Country          BSE Prevalence Estimation Method   

                   BSurvE Prevalence B                BBC

                   Expected Value                     

  US               0.18 x 10^-6^                      0.10 x 10^-6^

  Canada           3.9 x 10^-6^                       0.68 x 10^-6^
  ---------------- ---------------------------------- -------------------

Despite the higher estimated BSE prevalence in the current standing
adult cattle population in Canada compared to the prevalence of BSE in
the standing adult cattle population in the United States, APHIS finds
that, because of the extremely low BSE prevalence in Canada and the high
levels of BSE controls in both Canada and the United States, the risk to
the United States (i.e., the likelihood of establishment of BSE in the
United States and the potential impacts of cases that may occur even
without establishment) as a result of importing from Canada the bovine
commodities considered in this rule is negligible (APHIS 2006b).
Furthermore, as stated in our risk assessment, we expect that the
prevalence of BSE in Canada will decrease continuously over the next
several years. Peer reviewers of our risk assessment agreed (RTI 2007).

[Issue]{.underline}: One commenter stated that Canada's ratio of
positive cases per 10,000 cattle tested exceeds the ratio of 22 of the
25 EU-member countries; that only the ratios for the United Kingdom,
Portugal, and Spain exceed Canada's 2006 ratio. The commenter noted
further that even the countries of Ireland, Germany, and France, each of
which are considered to have had widespread BSE exposure, have a lower
ratio for positive cases detected per 10,000 head tested than does
Canada. Another commenter stated that Canada's BSE prevalence is higher
than that for Denmark, Belgium, and Austria, and is comparable to the
rate in Germany. This commenter, who estimated the Canadian BSE
prevalence to be 6.4 cases per million cattle, stated further that no
one considers countries with a reported BSE rate of 1 to 2 cases per
million animals (e.g., Denmark, Belgium and Austria) to have a minimal
BSE risk, and that Canada is not a BSE minimal-risk region in any
ordinary sense.

[Response]{.underline}: The commenters' statements ignore important
differences in BSE surveillance and cattle populations among countries,
and a comparison based simply on the proportion of positive cases per
number of cattle tested is inconsistent with the prevalence estimate
approach taken by one of the commenters, as well as the prevalence
estimate used by APHIS. Although calculating the proportion of infected
animals detected per number of tested animals can serve as a useful
tool, depending on the purpose for the calculation, it is not an
estimate of prevalence. Rather, prevalence is defined as the number of
infected animals in the total population at a given point in time. On
the other hand, the calculation conducted by the commenter who referred
to the ratio of positive cases per 10,000 cattle tested is similar to
that conducted by the U.S. Department of Health and Human Services,
Centers for Disease Control and Prevention (CDC). In May 2007, using
data similar to that analyzed by APHIS for this rulemaking, CDC
calculated the proportion of Canadian-born BSE cases identified by
Canadian authorities in relation to the total number of animals tested
in that country. CDC then made a like calculation regarding BSE cases in
U.S.-born cattle and compared the Canadian and U.S. results (CDC 2007).
Unlike the estimate used by APHIS in the risk assessment for this rule,
the CDC calculation is not an estimate of the prevalence of BSE in
Canada, nor of the prevalence in the United States. Although the type of
calculations conducted by CDC can be useful in comparing relative
proportions of BSE detections per number of cattle tested, they do not,
as noted above, constitute an estimate of prevalence.

The number of disease detections per total number of animals tested can
be influenced by the criteria used for choosing animals for testing. For
instance, Canada, like the United States, conducts targeted BSE
surveillance, sampling those animals where disease is most likely to be
detected if present. In contrast, EU countries routinely test large
numbers of healthy animals at slaughter. Approximately 80 percent of
cattle tested for BSE in the EU during 2001-2004 were healthy
slaughtered animals, but "risk animals" were 22 times more likely to
test positive (EC 2005a). One study (Giovannini [et]{.underline}
[al]{.underline}., 2005) estimates the true prevalence of BSE infection
in several EU countries. Based on BSE testing in 2001, although Denmark,
Finland, and the Netherlands had a lower proportion of positives per
test than Canada, the estimated prevalences from this study for those
three countries were higher than the expected values of our Canadian BSE
prevalence estimates using the BBC estimation method (0.68 cases per
million adult cattle) or BSurveE Prevalence B (3.9 cases per million
adult cattle). Giovannini [et]{.underline} [al]{.underline}. (2005)
estimated the following 90 percent confidence intervals for the
prevalence of BSE infection: Denmark, 9 to 38 cases per million animals;
Finland, 29 to 110 cases per million animals; and Netherlands, 8 to 34
cases per million animals. The methods used by APHIS to estimate
Canada's BSE prevalence, including the BSurvE model developed by the EU
Transmissible Spongiform Encephalopathies Community Reference
Laboratory, account for the cattle population demographics, the age and
surveillance category of animals tested, and the insensitivity of BSE
diagnostics with regard to detection of the disease at an early stage of
development.

The comments are based on an inappropriate comparison of a statistical
estimate of the true BSE prevalence in Canada to the crude rate. Table 2
below compares the crude reported BSE rates in all five countries in
2005. Comparing the reported BSE rate of Canada to those of the
countries listed by the commenters shows that Canada's reported rate is
at least an order of magnitude below that of the others.

Table 2.\--[Reported BSE rates in 5 Countries]{.underline}

+--------------------+-------------------------------------------------+
| Country            | Reported BSE cases per                          |
|                    |                                                 |
|                    | million adult cattle - 2005                     |
+--------------------+-------------------------------------------------+
| Canada             | 0.145                                           |
+--------------------+-------------------------------------------------+
| Denmark            | 1.289                                           |
+--------------------+-------------------------------------------------+
| Belgium            | 1.448                                           |
+--------------------+-------------------------------------------------+
| Austria            | 2.114                                           |
+--------------------+-------------------------------------------------+
| Germany            | 4.965                                           |
+--------------------+-------------------------------------------------+

Source: OIE (2007a)

The problem with comparing the crude reported rate of BSE detection to
the estimated true BSE prevalence is illustrated by the situation in
Belgium. The reported rate of BSE in Belgium peaked in the 2001
surveillance year at 28.22 cases detected per million adult cattle (OIE
2007a). In comparison, Saegerman [et]{.underline} [al]{.underline}.
(2004) applied the BSurvE model to the Belgian BSE surveillance data and
estimated that the actual BSE prevalence in Belgium peaked at
approximately 400 cases per million adult cattle in the 1995 birth year
cohort. (The lag between the 1995 birth year and the 2001 surveillance
year is consistent with the long BSE incubation period.)

With regard to the comment that countries with 1 to 2 cases per million
animals are not considered to present minimal risk, APHIS notes that,
prior to the 2005 revisions in the OIE guidelines on BSE, countries with
a reported BSE rate of 1 to 2 cases per million animals could satisfy
the prevalence criterion for the pre-2005 OIE BSE minimal-risk
classification. Under the 2004 OIE Terrestrial Animal Health Code
(Article 2.3.13.5), the criteria for a BSE minimal-risk country included
a reported rate of less than two cases per million during each of the
last four

consecutive 12-month periods within the cattle population over 24 months
of age. The OIE Code was modified in 2005 to include a revised country
categorization system which more accurately reflected current scientific
understanding of BSE. These modifications streamlined the number of
country categories to three (negligible, controlled, or undetermined BSE
risk) and also eliminated the numeric prevalence criteria for
classifying the BSE risk status. The previous OIE minimal-risk category
is now incorporated into the controlled risk category. We note that in
2007, the OIE recognized Switzerland as a BSE controlled risk region.
Switzerland had a reported rate of 5.4 BSE cases per million adult
animals in 2006 (OIE 2007a), greater than the 1 to 2 cases per million
animals cited by the commenters.

APHIS disagrees with the commenter's statement that Canada does not
qualify as a BSE minimal-risk region. APHIS regulations at § 94.0 define
the standards for a region to be designated as a minimal-risk region.
These include the standard that the region maintain "risk mitigation
measures adequate to prevent widespread exposure and/or establishment of
the disease." Canada continues to meet this standard. The commenters
provided no specific evidence to document how or why Canada does not
meet the APHIS standards.

[Issue]{.underline}: One commenter stated that the prior information
\[information using data from the United Kingdom feed ban\] incorporated
into the Bayesian models used to estimate prevalence of BSE-infected
cattle in Canada may have resulted in estimates that are biased downward
(to a limited degree) from the true burden. However, stated the
commenter, the Bayesian models used to estimate prevalence in Canada (as
of August 2006) are basically sound and a better approach than relying
on the BSurvE Prevalence B estimate. Further, said the commenter, given
the proviso that the models could overestimate the effectiveness of the
feed ban, it is most likely that the actual prevalence of infected
animals is between 0.68 and 3.9 animals per million adult cattle. The
commenter stated that because it is likely that the Canadian feed ban
was at least as effective as the initial United Kingdom feed ban, and
based on available data, the true BSE prevalence in Canada is probably
substantially closer to 0.68 cases per million animals than to 3.9 cases
per million animals.

Conversely, several commenters suggested that APHIS rejected the higher
prevalence estimate of the BSurvE model for the lower prevalence
estimate of the BBC model, and that the BBC model prevalence estimate is
not realistic in light of recent data.

[Response]{.underline}: Although APHIS considered the results of both
the BSurvE and the BBC prevalence estimation models, we consider the
result of the BBC model as the more likely prevalence estimate to apply
to the assessment of BSE risks associated with imports from Canada over
the next 20 years in our quantitative exposure model, for the following
reasons. APHIS estimated Canadian BSE prevalence based on surveillance
conducted through August 15, 2006. (Note: This time period includes all
cases of Canadian origin reported through August 2006 (APHIS 2006c).)
From August 16, 2006, through April 2007, Canada accumulated
approximately 44,980 additional BSE samples and detected two BSE cases
(one confirmed on February 7, 2007, and another confirmed on May 2,
2007). Based on the negative binomial likelihood ratio, which considers
the number of negative tests prior to one or more positives, the BSurvE
Prevalence B estimate (with expected value of 3.9 cases per million
animals) is indeed far more likely to be true than is the BBC prevalence
estimate (with an expected value of 0.68 cases per million animals) for
the current standing Canadian cattle population. However, the

primary purpose of characterizing BSE prevalence in Canada's current
standing herd (APHIS 2006c) was not to discuss or assume its
implications for the present, but rather, to estimate prevalence for use
as an input for the Harvard exposure model used in the Exposure
Assessment of the analysis. Because BSE has a long amplification cycle
(it takes an average of 7 years from the time that one animal is
exposed, to the time that another might be exposed from infectivity
produced by the first animal), the Harvard model is typically run with
20-year simulations to include roughly 3 amplification cycles. The
prevalence estimates contained in APHIS' estimation of BSE prevalence in
Canada (APHIS 2006c) are applied, unchanged, to the cattle imports
projected over the next 20 years (2007-2026). Since we expect that the
true prevalence will drop from its current level (whatever that may be),
we anticipate that the lower, BBC estimate is a more realistic
prediction (or even an overestimate) of average prevalence levels over
this time frame. Consequently, APHIS considers the result of the BBC
model, which incorporates the effect of a feed ban, to be better for
application to the quantitative assessment of BSE risks associated with
imports from Canada over this time period. In order to determine the
impact of this assumption on the results, we applied the BSurvE estimate
to the exposure model. We note that the likelihood of BSE establishment
remained negligible (R~0~ of 0.079, which is far less than 1), as did
the potential impact of cases even without establishment (less than 4
clinical cases) over the 20 years of the analysis.

[Issue]{.underline}: One commenter suggested that the APHIS risk model
is not trustworthy because it

has not been shown to have predictive validity and does not explain or
predict a sustained flow of BSE cases from one geographic area (the
Alberta region in Canada).

[Response]{.underline}: It is not clear to us from the comment which
model the commenter is referring to. Consequently, in this response, we
discuss the Harvard model and the prevalence models used by APHIS. In
either case, we disagree with the commenter's conclusion that the APHIS
risk model is not trustworthy. The plausibility of the Harvard model was
established by comparing its predictions for Switzerland against the
observed progression of BSE within that country's cattle herd (Cohen
[et]{.underline} [al]{.underline}., 2003). It is not clear from the
comment how the predictive validity of an infectious disease model is to
be demonstrated over a 20-year time horizon, or how the model has failed
to explain or predict the observed data. Regarding a sustained flow of
BSE cases from one geographic area, assuming a constant proportion of
BSE infected cattle in the herd, more BSE cases are found where large
cattle populations exist.

As we discuss above in response to another issue raised by commenters,
APHIS' estimation of BSE prevalence in Canada (APHIS 2006c) concludes
that the expected prevalence values under the BBC and BSurvE Prevalence
B models correspond to an expected number of BSE-infected animals in the
standing Canadian adult cattle population of 4.1 and 23.2, respectively.
Further, the prevalence estimates represent uncertainty and not
variability. At any given point in time, the number of infected animals
in the population is a fixed (although uncertain) value, although over
time the actual number of infected cattle in the population would vary
randomly about the mean of the probability distribution, as BSE-infected
animals are recruited into and exit from the adult cattle population
(i.e., some are newly infected and some die). Even assuming that the
probability of infection remains constant, over time the actual number
of infected cattle in the population would vary. This variability is
incorporated in the model supporting our exposure assessment for live
bovines by means of the Poisson variability distribution. Assuming a
fixed mean prevalence of 4.1 and 23.2 BSE-infected animals in the
standing adult cattle population in Canada, the 95th percentile of the
Poisson distribution is respectively 7 and 31 BSE-infected animals in
any given year. As we noted above, these numbers are greater than the
five BSE cases detected in Canada in 2006, which means that the greatest
number of Canadian BSE cases identified in a single surveillance year is
lower than even the 95^th^ percentile of distribution. While this
observation does not statistically validate (confirm) the APHIS
estimates of Canadian BSE prevalence, neither does it invalidate them,
as the commenter seems to suggest. Furthermore, the prevalence estimates
are applied not only to the current standing population, but also to the
next 20 years.

BSE Data from the United Kingdom

In our January 2007 proposed rule and its supporting risk assessment, we
discussed data associated with a ruminant-to-ruminant feed ban in the
United Kingdom and indicated that experience in the United Kingdom
demonstrates that implementation of a ruminant-to-ruminant feed ban
causes BSE prevalence to decrease. We noted that animal feed
restrictions were implemented in the United Kingdom in 1988, when the
use of ruminant MBM in ruminant animal feed was banned. In September
1990, the use of specified bovine offals was banned for use in any
animal feed. This ban prohibited the use in any animal feed of bovine
tissues with the highest potential concentration of infectivity. In
1994, the use of mammalian protein--not just ruminant protein--was
banned from ruminant feed. In 1996, feeding of any farmed livestock,
including fish and horses, with mammalian MBM was completely banned. As
a result of reducing the recycling of infectivity, the annual incidence
of BSE fell by 99.4 percent, from 36,680 in 1992 to 203 in 2005 (DEFRA
2006b). There is, therefore, every reason to expect downward pressure on
the prevalence of BSE in any country that implements a feed ban.

[Issue]{.underline}: One commenter stated that, of 180,986 confirmed
cases of BSE in Great Britain, the year of birth of the infected animal
is unknown in 43,342 cases, and the large percentage of animals whose
birth year is unknown casts doubt on the ability to determine the
timeframe of an effective feed ban and, and further, makes it doubtful
that all BSE-infected cattle in Canada are going to show clinical signs
of the disease only if they were born before March 1, 1999. The
commenter also stated that Japan has reported cattle as young as
possibly 20 months of age or younger as testing positive for BSE.

[Response]{.underline}: It is not clear to us how the information
presented by the commenter supports the conclusions the commenter
reached. However, we consider it useful to provide some clarification
regarding the information presented. With regard to the proportion of
BSE cases in Great Britain for which the date of birth is unknown, our
risk assessment included a sensitivity analysis that takes into account
that general source of uncertainty. (Sensitivity analysis evaluates the
degree to which changes in the assumptions used in a model affect the
model's results.) We made no assumptions as to whether Great Britain's
feed ban is or has been effective, but applied the same proportional
drop in cases observed in the United Kingdom to the Bayesian analysis
that was performed to estimate BSE prevalence in Canada's standing
cattle herd.

The commenter's statement that it is doubtful that only animals born
before March 1, 1999, would show clinical signs of BSE indicates a
potential confusion between the likelihood of exposure as expressed in
terms of the date of the effectively enforced feed ban (and, thus, the
potential for exposure) and the likelihood of an exposed animal
developing clinical signs (which is based on age and amount of exposure,
and the amount of time that has elapsed since exposure). In neither our
risk assessment nor our proposed rule do we conclude that only infected
animals born before March 1, 1999, would show clinical signs of the
disease. Based on Canada's system of regulations, compliance and
enforcement, and the length of time we expect pre-feed ban feed to
persist in the system, we conclude that animals born on or after March
1, 1999, have an extremely low likelihood of exposure to BSE. Any
animal, however, exposed to an infectious dose of the BSE agent and
allowed to live to the end of its incubation period, would likely
exhibit clinical signs.

Regarding the age of cattle diagnosed with BSE in Japan, the comment did
not contain sufficient information for us to determine and respond to
the relevance of the statement to the remainder of the comment.

[Issue]{.underline}: One commenter questioned the effectiveness of
APHIS' use of United Kingdom surveillance numerators to estimate
Canada's BSE prevalence. Specifically, the commenter stated that
"Nowhere...is incidence reported. Cases (without reference to a
population at risk) are used. This may be important because the manner
in which BSE cases were counted changed over time in the \[United
Kingdom\]."

[Response]{.underline}: We acknowledge that changes over time in BSE
surveillance and in the size and demographics of the cattle population
do contribute to the uncertainty about the efficacy of the initial,
ruminant-to-ruminant feed ban introduced in the United Kingdom in 1998.
However, the United Kingdom's Department for Environment, Food, and
Rural Affairs (DEFRA) does not report BSE surveillance results by birth
year and surveillance class (e.g., active or passive surveillance,
animal health status). Ideally, such data could be entered into BSurvE
or a similar model to estimate true BSE prevalence for all United
Kingdom birth year cohorts since the onset of the epidemic. This process
would permit not only an improved estimate of the effect of the initial
feed ban but also of the incremental impact of additional measures that
were subsequently introduced. DEFRA has reported back-calculation model
estimates of true BSE prevalence in cohorts born after 1995 to assess
the effects of the "reinforced feed ban" introduced by the United
Kingdom in August 1996 (DEFRA 2005, 2006b). However, we are unaware of
any published estimates of true BSE prevalence in the United Kingdom for
the 1987-1995 birth year cohorts based on up-to-date surveillance
results.

[Issue]{.underline}: One commenter stated that APHIS is wrong to assume
that the United Kingdom data regarding the effectiveness of the feed ban
can be applied directly to the situation in Canada.

[Response]{.underline}: We acknowledge that the applicability to Canada
of the data from the initial United Kingdom ruminant-to-ruminant feed
ban is uncertain. Nonetheless, the United Kingdom's experience and data
are important and useful to our risk assessment and analyses. In
addition, the Peer Review Report (RTI 2007, p. ES-2) noted that "\[all
reviewers\] agreed that the evidence from the United Kingdom\...and
Europe that the feed ban is effective is reasonable to consider in the
case of Canada."

[Issue]{.underline}: Several commenters noted the differences in the
feed bans in the United Kingdom and Canada in stating that it is not
valid to draw conclusions about the likely prevalence of BSE in Canada
by extrapolating from the rate of decline in BSE cases in the United
Kingdom following implementation of a feed ban there. The commenters
noted that (until expanded this July) the feed ban in Canada prohibited
the feeding of ruminant material to ruminants. In contrast, said one
commenter, significant declines in the number of confirmed BSE cases in
the United Kingdom did not occur until the United Kingdom took stronger
measures, ultimately banning the feeding of all mammalian protein to
food animals in 2001. The commenter suggested that the United Kingdom's
experience in particular clearly shows that ruminant-to-ruminant feed
bans do not drastically curtail the number of confirmed BSE cases and
that much stronger measures are needed to eradicate the disease.

[Response]{.underline}: The comments appear to confuse the absolute
level of BSE in the United Kingdom with its rate of decline. The
comments also ignore the BSE incubation period and the effects of other
concurrent measures, trends, and events in the United Kingdom. The
number of BSE cases in United Kingdom birth year cohorts (all cattle
born in a given year) has continued to decline since peaking in 1987.
With the exception of the 1996 birth year cohort, it is not readily
apparent that there has been any significant change in the rate of
decline in birth year cohort prevalence after the United Kingdom
introduced the initial ruminant-to-ruminant feed ban in 1988 (figure 2).
As of March 1, 2007, the United Kingdom had confirmed two BSE cases in
animals born after 2001, but due to the long BSE incubation period, it
is reasonable to expect that ongoing surveillance may detect additional
cases in animals born after 1998.

Figure 2.\--[Reduction in BSE cases in the United Kingdom by birth year,
1987-2002]{.underline}.

Source: DEFRA 2007a.![](media/image2.wmf){width="5.322222222222222in"
height="2.9583333333333335in"}

Shortly after the emergence of vCJD was publicly recognized in March
1996, the United Kingdom introduced several BSE-related measures,
including the ban on the use of mammalian MBM in feed for all farm
animals (the "reinforced feed ban"), a selective cull, and the
over-30-month rule limiting the age of animals that could be slaughtered
for food. As shown in figure 3, the size of the United Kingdom cattle
population began a marked decline in 1996, punctuated by a drop
associated with the foot and mouth disease (FMD) outbreak in 2001.

Figure 3.\--[United Kingdom Cattle Population, 1987-2002]{.underline}

![](media/image3.wmf){width="5.114583333333333in"
height="2.9583333333333335in"}

Source: DEFRA (2007b).

In addition to the declining cattle population size, other confounding
variables, such as changes in cattle population demographics and BSE
surveillance practices, make it difficult to ascertain the independent
or marginal effect of any single measure on the decline of BSE in United
Kingdom birth year cohorts. At this time, it appears that the confluence
of events and measures of 1996 may have hastened the waning of BSE in
the United Kingdom, but the decline was underway in 1988.

[Issue]{.underline}: One commenter indicated that scientific studies in
France and Britain have found that, after a ruminant-to-ruminant feed
ban was put into place, the subsequent incidence of BSE was correlated
to pig density, and that the new Canadian BSE feed rule, to be
implemented in July 2007, is, according to the commenter, similar to,
but weaker than, the September 1990 United Kingdom SBO \[Specified
Bovine Offals\] ban. The commenter stated that, by not following the
lead of the United Kingdom \[and banning the feeding of all mammalian
protein to food animals\], the proposed CFIA SRM ban may reduce but will
not eliminate the risk of BSE in Canada.

[Response]{.underline}: Two studies--Abrial [et]{.underline}
[al]{.underline}. (2005) and Stevenson [et]{.underline}
[al]{.underline}. (2005)--indicate a correlation between cases of BSE
born after a ruminant-to-ruminant feed ban was implemented and areas of
higher pig density in France and Britain. These studies indicate the
potential for cross-contamination of livestock feeds after
ruminant-derived protein was excluded from ruminant feed. Eventually,
each country and the EU adopted regulations prohibiting the inclusion of
any animal protein in livestock feed. At this time, however, it is not
possible to ascertain the extent, if any, to which establishment of a
more restrictive feed ban had any impact on the rate of BSE decline in
EU Member States beyond the feed controls already in effect.

As discussed previously, the number of BSE cases in United Kingdom birth
year cohorts began to decline in 1988, the year the initial
ruminant-to-ruminant feed ban was introduced. Although France initially
introduced a ban on mammalian MBM in cattle feed in July 1990--not a
ruminant-to-ruminant feed ban\--the European Commission Scientific
Steering Committee concluded that the French feed ban adopted in 1990
"was likely not effectively enforced until 1994/1995." (ECSSC 2000, p.
30). Based on testing in 2001-2002, Bonnardiere [et]{.underline}
[al]{.underline}. (2004) found a significant increase in French BSE
prevalence between the July 1993--June 1994 and July 1994--June 1995
cohorts, followed by a significant decrease in BSE prevalence in birth
cohorts born in France after June 1995. More recently, active
surveillance during 2001-2005 also indicates that the number of BSE
cases per cohort peaked in France in the 1995 birth year cohort and
declined thereafter (EC 2006, table B20).

In Europe more generally, based on active surveillance during 2001-2005,
the number of BSE cases per birth year cohort in the original EU Member
States (EU 15), excluding the United Kingdom, was on the decline after
the 1995 birth year cohort. In June 1994, the EU banned the feeding of
mammalian MBM to ruminants. However, among EU members, only Belgium,
Germany, Greece, Italy, Luxembourg, and Spain had no feed ban in place
prior to the 1994 EU-wide measure (Court of Auditors 2001). In June
2005, the European Commission issued the "Report on the Monitoring and
Testing of Ruminants for the Presence of Transmissible Spongiform
Encephalopathy in the EU in 2004" and observed that the impact of the
2001 "total feed ban" (EU Regulation 999/2001) cannot yet be assessed
due to the long BSE incubation period. As noted in the discussion of the
decline of BSE in the United Kingdom, it is reasonable to expect that
ongoing surveillance may detect additional cases in animals born after
1998.

The conclusion of our risk assessment that, over the 20 years of the
analysis, the risk to the United States (i.e., the likelihood of
establishment and the potential impacts of cases that may occur even
without establishment of BSE) as a result of importing from Canada the
bovine commodities considered in this rule is negligible, is not
predicated on the eradication of BSE in Canada.

Figure 4.\--[Year of birth distribution in BSE cases detected in the
EU-15 (excluding United Kingdom) during 2001-2005]{.underline}

![](media/image4.wmf){width="5.114583333333333in" height="2.8125in"}

Source: EC (2006, table B20).

[Issue]{.underline}: One commenter indicated that year-of-birth data
collected by the EU shows that, based on the number of BSE cases
detected in the United Kingdom since 2001, there was a steady increase
in the number of BSE-positive cattle born in the United Kingdom after
its 1988 feed ban, beginning with cattle born in the year 1990.

[Response]{.underline} We disagree with the commenter. Since July 2001,
when the EU-wide active BSE surveillance program commenced, an
increasing proportion of the total BSE cases in the United Kingdom have
been detected as a result of targeted (active) surveillance (DEFRA
2006b, figure 4.3). However, as shown by the EC (EC 2006, chart B1), the
vast majority of BSE cases in the United Kingdom were detected by
surveillance prior to 2001. Based on all available United Kingdom BSE
surveillance data (DEFRA 2007), the number of BSE cases in United
Kingdom birth year cohorts began to decline in 1988, the year the
initial ruminant-to-ruminant feed ban was introduced.

For the reasons discussed above, we continue to consider it appropriate
to apply our estimates of BSE prevalence in Canada to our risk
assessment. As noted above, we used two related, but distinct, methods
to estimate BSE prevalence in Canada, and addressed the uncertainty in
the prevalence of BSE in Canada by considering prevalence estimates that
differ by more than a factor of five. Although we consider the BSurvE
Prevalence B estimate to be far more likely to be true than is the BBC
estimate for the current standing Canadian cattle population, we
consider the result of the BBC model as the more likely prevalence
estimate to apply to the assessment of BSE risks associated with imports
from Canada over the next 20 years.

Feed Ban in Canada

As discussed above, in our January 2007 proposed rule, we proposed to
allow the importation of live bovines from BSE minimal-risk regions if
the animals were born on or after a date determined by APHIS to be the
date on and after which a ruminant-to-ruminant feed ban in the region of
export has been effectively enforced. We noted that experience around
the world in countries with BSE has demonstrated that feed bans are
effective control measures, and that the incidence of BSE worldwide
continues to decline because of these measures (OIE 2007a).

We indicated that, because of the demonstrated efficacy of an
effectively enforced feed ban in reducing the possibility of exposure of
cattle to the BSE agent, the OIE provides guidelines for trade in live
cattle from regions that have reported BSE if such regions have an
effective feed ban in place, provided the cattle were born after the
date when the feed ban was effectively enforced (OIE [Terrestrial Animal
Health Code,]{.underline} Chapter 2.3.13). We proposed to consider March
1, 1999, as the date on and after which a feed ban has been effectively
enforced in Canada. A number of commenters addressed Canadian
enforcement of its feed ban, and also addressed the date we proposed to
consider as the date of effective enforcement of a feed ban in Canada.
Although some commenters specifically supported March 1, 1999, as the
date of effective enforcement of a ruminant-to-ruminant feed ban in
Canada, a number of other commenters disagreed that Canada was
effectively enforcing a feed ban as of that date. Some commenters
suggested alternative dates or time frames.

[Issue]{.underline}: Several commenters stated that APHIS'
determinations of the level of compliance with the Canadian feed ban and
the time at which compliance was achieved are arbitrary and
scientifically indeterminable.

[Response]{.underline}: We disagree with the commenters. In January
2005, USDA sent a team to Canada to assess Canada's feed ban and its
feed inspection program to determine whether the control measures put in
place by the Canadian Government were achieving compliance with that
country's regulations. APHIS conducted an extensive review of the feed
ban in Canada. As part of its review, APHIS analyzed CFIA's description
of past cases of BSE in Canada, as well as historical inspection and
compliance data related to the feed ban for the previous 3 years,
educational materials, published notices, and the report of the
International Review Team that was submitted to the U.S. Secretary of
Agriculture in February 2004. Additionally, the U.S. team accompanied
the CFIA inspection staff on inspections of randomly selected commercial
feed mills and rendering facilities. At the facilities, the U.S. team
observed the application of the inspection standards, observed
manufacturing techniques, and discussed processes with facility
personnel involved in various steps of feed manufacturing. In its
report, the team concluded that Canada has a robust inspection program,
that overall compliance with the feed ban in Canada is good, and that
the feed ban is reducing the risk of transmission of BSE in the Canadian
cattle population (USDA 2005). The team's findings support our
conclusions regarding the level of compliance with the feed ban in
Canada.

[Issue]{.underline}: In our January 2007 proposed rule, in discussing
our rationale for considering March 1, 1999, to be the date of effective
enforcement of a feed ban in Canada, we stated that a 12-month period
would generally be sufficient to allow purchased feed products that may
contain MBM to be completely used. One commenter expressed uncertainty
about that estimation and suggested that it might be advisable for APHIS
to conduct a quantitative assessment of compliance with the feed ban to
determine the date of its effective enforcement.

[Response]{.underline}: We recognize uncertainty regarding the precise
date on which Canada achieved effective enforcement of it feed ban, but
we note that, given the extremely low prevalence of BSE in Canada along
with the safeguards in the United States, the impact on the overall risk
of a slightly earlier or later date would be minimal. Although reducing
uncertainty can, at times, be achieved by performing more rigorous
quantitative analyses, before attempting to reduce the uncertainty
regarding any given factor or parameter\--such as the precise date on
which Canada achieved effective enforcement of its feed ban---it is
important to examine the significance of the parameter to the overall
risk result.

[Issue]{.underline}: Several commenters stated that APHIS' calculation
of the amount of time necessary for ruminant feed to cycle through the
Canadian feeding system is irrelevant in the absence of effective
enforcement of feed-ban regulations in Canada. The commenters stated
that it was not until between 2000 and 2002 that Canada implemented
inspections of feed and rendering facilities.

[Response]{.underline}: The commenters' statement is not accurate.
Inspections of rendering facilities and feed mills in Canada began
immediately with the implementation of the feed ban in that country in
August 1997. Rendering facilities were required to obtain an annual
permit to operate, and issuance of a permit required an inspection of
the facility. In addition, CFIA immediately began a program for
inspection of commercial feed mills. All commercial feed mills were
inspected in the first year after the implementation of the feed ban,
with none of the feed mills found to be including prohibited material in
ruminant feed. Thereafter, feed mills were on a 3-year inspection
interval until 2002, when annual inspection of commercial feed mills was
initiated.

[Issue]{.underline}: A number of commenters stated that the diagnosis of
BSE in cattle born after the establishment of a feed ban in Canada
demonstrates that Canada's feed ban is either ineffective or not
effectively enforced.

[Response]{.underline}: We disagree with the commenters' conclusion. The
commenters suggest that, in order for the Canadian feed ban to be
considered effective, BSE surveillance data would have to demonstrate
that the likelihood of BSE transmission in that country has been
eliminated. However, as noted in our risk assessment, Canadian BSE
surveillance data do not provide a statistical basis for distinguishing
BSE prevalence among birth year cohorts (APHIS 2006b, p. 12); the
overall prevalence is so low that distinguishing any difference is
nearly impossible. In other words, the data cannot distinguish any
significant difference in prevalence among animals born in different
years, which would have been one way to demonstrate the effect of a feed
ban (e.g., if the feed ban were implemented at the beginning of 1997,
surveillance data showing a higher BSE prevalence in animals born in
1996 than in animals born in 1997 would support the effectiveness of the
feed ban). However, in the absence of a feed ban that reduced exposure
to BSE, we would expect the prevalence of the disease to increase over
time. We have no evidence that such an increase has occurred, but we do
have data that the feed ban is being enforced.

Furthermore, as we discussed in our risk assessment, detection of BSE in
an animal born after the date a feed ban was implemented does not
indicate an overall failure of the measures in place to stem
transmission of the disease in that country. Most other countries that
have experienced cases of BSE, have reported similar cases. Of 25
countries that have reported indigenous BSE cases, only 4 reported no
cases in 2005-06 (OIE 2007). Human error is expected, which is why the
feed ban is comprised of a number of interrelated measures that have a
cumulative effect. Our risk assessment does not assume 100 percent
compliance with all measures all of the time. We discussed factors
related to the feed ban in Canada since before its implementation in
1997. We considered activities related to inspection and compliance with
the feed ban, the rendering industry, the risk of cross-contamination,
education activities and industry awareness, and on-farm practices that
might contribute to the efficacy of the feed ban. In addition, we
highlighted the fact that since the implementation of the feed ban on
August 4, 1997, CFIA has continued to revise and strengthen its
processes and procedures to further enhance the effectiveness of the
feed ban. Canada's July 2007 modification of its feed ban to remove SRMs
from all animal feeds, pet food, and fertilizer is a good example of
such enhancements. We concluded that compliance with the feed ban
measures in Canada continues to increase as the program evolves and that
all of these factors have resulted in a cumulative reduction in the risk
that Canadian cattle will be exposed to the BSE agent.

[Issue]{.underline}: Several commenters stated that Canada cannot
demonstrate that it has effectively prevented the feeding of ruminant
material to cattle over the past 8 years. Commenters stated that eight
or nine Canadian feedlots were discovered to still be feeding banned
bone meal products, and that, because of their violations of the feed
ban, 30,000 Canadian cattle were under quarantine. Additionally, one
commenter stated that in March 2007, nine farms in Saskatchewan and as
many as 8,000 cattle, deer, and other ruminants were quarantined after
ruminant MBM was accidentally shipped to those farms from a Saskatoon
feed mill. Another commenter stated that, in December 2006, Canada's
Minister of Agriculture and Agri-Food acknowledged that up to 10,000
head of Canadian cattle on 113 different farms in the Provinces of
Ottawa and Quebec had recently been fed feed contaminated with ruminant
material.

> [Response]{.underline}: APHIS is aware of the incidents reported in
> late 2006 and in March 2007 and considered such incidences very
> carefully in its evaluation of the effectiveness of the feed ban.
> However, it is not clear to us what the commenters are referring to
> regarding 30,000 Canadian cattle under quarantine.
>
> It should be noted that the use of the term "contaminated" above
> refers to the potential inclusion in ruminant feed of MBM derived from
> ruminants, but not to the feeding of known BSE-contaminated material
> to ruminants. Feed control systems, including those in the United
> States, are inherently subject to human error such as occurred in
> these incidents. These compliance errors require follow up and
> correction by CFIA, just as in the United States such incidents would
> necessitate follow-up by the U.S. Human Health and Services, Food and
> Drug Administration (FDA). Following detection of these occurrences,
> CFIA conducted a detailed investigation and traced all potentially
> contaminated feed. CFIA accounted for and disposed of all feed that
> did not enter the distribution channels, and feed already distributed
> to farms was removed, disposed of, and replaced. CFIA conducted risk
> assessments to help evaluate the possibility that new cases of BSE
> would occur due to the contamination of feed with prohibited material,
> and concluded that the overall risk was negligible. Even though this
> finding indicated that it was highly unlikely that animals exposed to
> the involved feed would develop BSE in the coming years, in those
> instances where exposure to the feed could not be ruled out, the CFIA
> has excluded these animals and their meat and byproducts from export
> eligibility. This measure was established to meet the technical
> requirements of various trading partners and does not affect the
> movement or marketing of these animals within Canada. These findings,
> together with Canada's rapid and comprehensive response to the
> incidents, reinforces our confidence in the effective enforcement of
> Canada's ruminant feed ban[^7].

[Issue]{.underline}: Some commenters questioned the effectiveness of
Canada's feed ban, given evidence of contamination of ruminant feed with
MBM derived from ruminants. One commenter stated that, in the five cases
of cattle born after March 1, 1999, where investigations of BSE in
Canadian cattle have been completed, the reported cause of BSE
infectivity centered on ruminant MBM used in non-ruminant feeds
cross-contaminating ruminant feeds, either during processing at the feed
mill or during transport. Given that four animals were born after March
1, 1999, the commenters indicated that great care must be given to the
analysis of these animals in the risk assessment and did not feel that
APHIS thoroughly examined the cases.

[Response]{.underline}: We agree with the commenters that the
investigations of BSE in animals born in Canada in 2000 and 2002 suggest
that these animals were most likely exposed during their first year of
life to feed contaminated during processing (CFIA 2006a). Reports of the
investigations identified incidents of concern in which ruminant feed
was processed or transported immediately following the handling of
nonruminant feed containing prohibited material. Such incidents were in
contravention of Canadian regulations, which require flushing and/or
clean-out between batches if ruminant feed is processed on the same
lines as feed containing prohibited material.

We considered the issue of cross-contamination and concluded that Canada
has implemented measures to prevent cross-contamination of ruminant feed
with prohibited materials in the rendering and feed manufacturing
industries are essential for implementation of an effective feed ban. We
also considered other factors--including the regulatory actions taken to
implement the feed ban, education and industry awareness efforts,
inspection and compliance activities, and on-farm feeding practices--in
our overall evaluation to determine the date the feed ban was
effectively enforced in Canada and, based on those factors, identified
March 1, 1999, as the date of effective enforcement of the feed ban.

APHIS did not specifically address each individual case of BSE in Canada
in the risk assessment, as the available details of each epidemiological
investigation did not contribute to the overall risk estimation. The
risk estimation was based on consideration of all factors relevant in
the risk pathway. These included consideration of the current Canadian
feed ban, with explicit recognition that cases born after the feed ban
was implemented in August 1997, or after the March 1, 1999, date have
occurred and could continue to occur. The prevalence estimate
acknowledges that BSE is present in Canada, albeit at a very low level.
The risk reduction factors in the United States, including feed ban
regulatory activities similar to those in Canada, were considered in the
exposure assessment. The combination of all of these factors, including
recognition that human error can occur in any step of the pathway,
supported the conclusion that the risk to the United States of
BSE---i.e, the likelihood of establishment and the potential impact of
cases that may occur even without establishment---as a result of
importing from the Canada the bovine commodities considered in this rule
is negligible.

[Issue]{.underline}: One commenter stated that Canada has experienced an
increase in the number of BSE cases since it instituted a feed ban in
1997.

[Response]{.underline}: It appears that the commenter is equating the
number of detected cases of BSE with the number of infected animals in a
national herd. However, an increased number of detections of BSE does
not necessarily mean an increase in prevalence. A BSE detection rate is
dependent not only on prevalence, but also on intensity of surveillance.
An increased number of BSE cases have been detected in Canada as that
country has increased surveillance for the disease. As noted above, an
APHIS analysis of the Canadian BSE surveillance data found did not find
a statistical basis for distinguishing BSE prevalence among birth year
cohorts.

[Issue]{.underline}: A number of commenters referred to the number of
BSE cases in cattle born in Canada after March 1, 1999, as evidence that
the date should not be accepted as the date of an effectively enforced
feed ban. Commenters requested that APHIS reassess the proposed rule in
light of recent diagnoses of such cattle.

[Response]{.underline}: In the assessment of potential BSE risk we
conducted for this rulemaking, we concluded that there is an extremely
low likelihood that cattle born in Canada on or after March 1, 1999,
will have been exposed to BSE. This conclusion does not mean that
effective enforcement necessarily equals no instances of contravention
of the feed ban, either accidentally or intentionally, just as isolated
transgressions of U.S. laws do not necessarily constitute ineffective
enforcement of those laws.

While specific incidents of cross-contamination can, and most likely
will, happen, since no regulatory effort can ensure 100 percent
compliance, the detection of BSE in several bovines in Canada born after
March 1, 1999, does not negate the overall effect of the feed ban in
decreasing the opportunities for transmission of disease. Empirical
evidence from the United Kingdom has demonstrated, and simulation
studies have reinforced, that implementation of a ruminant-to-ruminant
feed ban leads to continued decrease in prevalence over time (Cohen,
[et]{.underline} [al]{.underline}., 2001; 2003; DEFRA 2006, EC 2003;
2005). Similar effects of a feed ban have been seen in other countries
in the EU, where there have been continued detections of BSE in cattle
born after a feed ban is initially implemented. At the same time,
however, the apparent number of cases of BSE identified in the EU-15
Member States has decreased every year since 2001. The available
evidence leads firmly to the conclusion that animals born after the date
of implementation of a ruminant-to-ruminant feed ban are far less likely
to be exposed to the BSE agent (Heim and Kihm, 2003).

[Issue]{.underline}: A number of commenters recommended various
alternative dates or timeframes for consideration as the date of
effective enforcement of a feed ban in Canada. Most of the commenters
who recommended an alternative date expressed concern regarding the
detection of BSE in bovines born in Canada after March 1, 1999.

The recommended alternative dates or timeframes included the following:
July 1, 2007; the date of birth of the youngest bovine in Canada that
has been determined to be BSE-positive; May 1, 2002; 5 to 7 years after
the most recently diagnosed case of BSE in Canada; whenever Canada can
verify 100 percent compliance with its ruminant-to-ruminant feed ban; a
staggered system of dates that would increase the allowable age of
bovines intended for importation from Canada as time progressed with no
additional diagnoses of BSE in Canada.

Some of the commenters who suggested July 2007 as the date of effective
enforcement based their recommendation on the fact that on July 12,
2007, Canada expanded its feed ban to prohibit the inclusion of SRMs in
any animal feeds, pet foods, or fertilizers. One commenter asked how
APHIS can be satisfied that the United States would be importing a safe
product if Canada itself was not satisfied with the safeguards in place
at the time the proposed rule was published, and subsequently took
additional measures to strengthen its feed ban. A number of commenters
recommended that the provisions of the proposed rule not be implemented
until Canada bans all feeding of animal material to food animals. One
commenter stated that July 2007 would be an appropriate point to begin
the importation of breeding animals that have had exposure to processed
animal feed, and that March 1, 1999, would be an acceptable date for
bovines that have not been exposed to processed animal feeds\--such as
bison maintained by Parks Canada.

Several commenters, who expressed no animal health concerns with
identifying March 1, 1999, as the date of effective enforcement of a
feed ban in Canada, recommended that APHIS consider harmonizing the date
chosen with the date Canada has identified as the effective date of a
ruminant-to-ruminant feed ban in the United States, January 1, 1999.

[Response]{.underline}: In prior rulemaking (APHIS 2005), we evaluated
evidence (regulations in place based on statutory authority, adequate
infrastructure to implement the regulations, and evidence of
implementation and monitoring) in making the determination that
compliance with the feed ban in Canada is good and concluded that the
feed ban was effectively enforced. In our process of identifying the
date of effective enforcement of a ruminant-to-ruminant feed ban in
Canada, we considered Canada's implementation guidance and policies. For
example, we considered the allowance of grace periods for certain
aspects of the industry, in determining the practical implementation
period for the feed regulations. Then we considered a sufficient time
period subsequent to this implementation period to allow most feed
products to cycle through the system, given the management practices in
the country. We concluded, based on the above evaluations, that cattle
born in Canada on or after March 1, 1999, can be imported into the
United States with an extremely low likelihood that they have been
exposed to the BSE agent.

As noted, a number of commenters recommended that APHIS consider July
2007, when Canada expanded its feed ban, as the date of effective
enforcement of the Canadian feed ban. We consider the July 2007
expansion of the Canadian feed ban to be an enhancement of an already
effective ban. CFIA, in explaining its rationale for the enhanced ban,
emphasizes that, although surveillance results and investigations of BSE
cases indicate that the feed ban in Canada has effectively reduced the
spread of BSE since being implemented in 1997, even compliance with the
ban's requirements left limited opportunities for contamination during
manufacture, transportation, and storage that CFIA considered worth
eliminating. In addition, the accidental misuse of feed on farms with
multiple species could not be discounted. With the enhanced ban, CFIA
projects that the eradication of BSE in Canada will be accelerated.
Following such a regulatory path does not indicate that the feed ban in
Canada prior to July 2007 was not effective or effectively enforced.

With regard to the recommendation that the date of effective enforcement
of the Canadian feed ban be identified as the date of birth of the
youngest bovine in Canada that has been determined to be BSE-positive,
we do not consider such a change to be necessary or justified. The risk
assessment we conducted for this rulemaking acknowledged that BSE exists
in Canada and that there would likely be additional cases detected.
March 1, 1999, was never intended to be an absolute cut-off point after
which no new cases of BSE would be acceptable. The risk assessment
concluded that, despite the likelihood of additional diagnoses of BSE in
Canadian cattle, the proposed amendments would pose negligible risk to
animal health and food safety in the United States. If an infected cow
were to be imported into the United States, a series of strong
safeguards would have to fail--in sequence--for that animal to pose any
risk.

With regard to the recommendation that APHIS harmonize its
identification of the effective enforcement date of a Canadian feed ban
with the date identified by Canada as the date of effective enforcement
in the United States, we do not agree that such a change would be
appropriate or necessary. APHIS arrived at the March 1, 1999, date for
effective enforcement of the feed ban in Canada by considering not only
the date the feed ban was established in that country, but also
information provided by Canada regarding its implementation timetable,
as well as feeding practices in that country. It does not necessarily
follow that implementation events in the United States followed
precisely the same track as those in Canada.

[Issue]{.underline}: In our January 2007 proposed rule, we discussed the
diagnosis of BSE in cattle in Canada born after March 1, 1999, and
stated that "such isolated incidents are not epidemiologically
significant and do not contribute to further spread of BSE, especially
when considered in light of the entire risk pathway and its attendant
risk mitigations."

Several commenters took issue with APHIS' description of the cases as
"isolated." Some commenters stated that "isolated" implies a solitary or
separated condition, which cannot be said of the BSE cases recently
confirmed in Canada. Further, other commenters stated the cases are
linked by a trend in geographic location, with the last three cases
occurring in the Province of Alberta. One commenter stated that of the
nine cases of BSE detected in Canada, four occurred in cattle born after
March 1, 1999, and that four of nine cases--or 44 percent--do not
represent isolated cases and strongly disagreed that this date
corresponds to when Canada's feed ban became effectively enforced.

[Response]{.underline}: We disagree with the comments, although we
acknowledge that the term "isolated" could be interpreted in several
ways. The use of the term in our proposed rule was not intended to imply
that the cases were "solitary or separated." Our use of the term
"isolated" was intended to characterize the cases as being small in
number and not indicative of a systemic failure of the feed ban in
Canada, but rather the result of individual instances of error in
contravention of the feed ban (e.g., inadequate cleaning between
handling of feed for non-ruminants and feed for ruminants).

For the reasons discussed above, we consider our determination that
March 1, 1999, be deemed the date of effective enforcement of the feed
ban in Canada to be reasonable, grounded firmly in the regulatory basis
and operations of the ban in Canada, and entirely consistent with the
science and with OIE guidelines. Accordingly, we are making no changes
based on the comments.

Likelihood of Exposure of Cattle in the United States to BSE

The assessment is designed to estimate the likelihood of each of the
multiple steps. Although we analyzed the likelihood of each individual
step in the process occurring, we interpreted its significance in the
context of the entire process.

As part of the risk assessment we conducted for our January 2007
proposed rule, we evaluated both the likelihood of "release" of the BSE
agent into the United States and the likelihood of susceptible animals
being exposed, given such release. We evaluated the pathways by which
infected Canadian cattle, if imported, might expose U.S. cattle to BSE,
and the likelihood that these pathways might lead to the establishment
of the disease in the U.S. cattle population.

Several steps must take place for BSE to be transmitted to cattle in the
United States from a bovine imported live from another country. A
BSE-infected bovine must be imported into the United States; the
infected bovine must die or be slaughtered; tissues from that animal
that contain the infectious agent must be sent to a rendering facility;
the infectivity present in these tissues must survive inactivation in
the rendering process; the resulting meat-and-bone meal (MBM) containing
the abnormal prion protein must be incorporated into feed; and this feed
must be fed to cattle at a level adequate to infect the cattle. (The
amount of infectious material required in feed for cattle to become
infected is dependent on the age of the cattle; younger cattle are more
susceptible to BSE and require less BSE-contaminated feed to become
infected (Arnold and Wilesmith, 2004). We indicated in our risk
assessment that the nature and likelihood of these pathways depend in
large part on mitigations acting in series and in parallel that reduce
the likelihood that BSE will be established in the United States.

A number of commenters addressed the issues of the likelihood of release
of the BSE agent into the United States and the likelihood of exposure
of U.S. cattle to BSE due to the importation of bovines from Canada. In
general, the commenters said that we had underestimated the likelihood
of release and/or exposure, or questioned one or more elements of our
assessment.

[Issue]{.underline}: One commenter, whose statements were referenced and
supported by a second commenter, discussed the geographic distribution
of BSE cases in Canada and expressed concern that Canada's experience
demonstrates that certain locations in the United States might be more
susceptible to BSE establishment than others. The commenter stated that
events in Canada indicate that an average risk estimate is meaningless
for BSE and demonstrates how "hot spots" (i.e., locations that are more
susceptible to spread of disease and, therefore, that have a localized
higher BSE prevalence) allow BSE to propagate and spread. The commenter
stated that the model-based predictions in APHIS' risk assessment are
useless because the models do not account for geographic and other
sources of heterogeneity and pointed to Alberta as a BSE hot spot.
Further, the commenter indicated that the APHIS risk assessment has not
provided any real data or relevant analyses related to BSE hot spot
development and that APHIS has not quantified the risks that imports
will create localized BSE hot spots in the United States. The commenter
calculated that, if 5 percent of U.S. locations are potential hot spots,
and 1 million animals are imported each year with six of them
BSE-positive, the expected probability of at least one hot spot being
activated in the United States is at least 77.7 percent.

[Response]{.underline}: We disagree with the commenters. The available
evidence provides no basis for distinguishing BSE prevalence among
Canadian provinces. The commenter who singled out Alberta provides no
analysis to support the hypothesis that the BSE prevalence in Alberta is
higher than in other provinces. Through May 2007, reported BSE cases
have originated in three western Provinces: Alberta (8 cases), British
Columbia (2 cases), and Manitoba (1 case). No cases have been reported
through May 2007 in the eastern Provinces. Intuition might suggest that
the BSE prevalence is higher in Alberta. However, Alberta contains
approximately 40 percent of the Canadian cattle herd. Other factors
being equal, BSE is more likely to be detected in regions with large
cattle populations.

Apart from the detected cases, geographically disaggregated data on BSE
surveillance and Canadian cattle population demographics are not
available. However, assuming that the total BSurvE points accumulated
through August 15, 2006 (APHIS 2006c, table 4) were collected
proportionally to the cattle population size in each province, table 3
presents the allocation of the random sample size equivalents (BSurvE
points).

Table 3. Allocation of BSurvE Points among Provinces Proportional to
Herd Size

+-------------------------+-----------+--------+------------+--------+
| Province                | Cattle    | P      | BSurvE     | BSE    |
|                         | (000)\*   | ercent | Points     |        |
|                         |           |        |            | Cas    |
|                         |           |        |            | es\*\* |
+-------------------------+-----------+--------+------------+--------+
| Alberta                 | 6,300.0   | 38.8%  | 594,858.4  | 7      |
+-------------------------+-----------+--------+------------+--------+
| Manitoba                | 1,720.0   | 10.6%  | 162,405.8  | 1      |
+-------------------------+-----------+--------+------------+--------+
| British Columbia        | 830.0     | 5.1%   | 78,370.2   | 1      |
+-------------------------+-----------+--------+------------+--------+
| Saskatchewan            | 3,450.0   | 21.2%  | 325,755.8  | 0^+^   |
+-------------------------+-----------+--------+------------+--------+
| Ontario                 | 2,203.9   | 13.6%  | 208,096.6  | 0      |
+-------------------------+-----------+--------+------------+--------+
| Quebec                  | 1,455.0   | 9.0%   | 137,384.0  | 0      |
+-------------------------+-----------+--------+------------+--------+
| Nova Scotia             | 107.0     | 0.7%   | 10,103.2   | 0      |
+-------------------------+-----------+--------+------------+--------+
| New Brunswick           | 90.5      | 0.6%   | 8,545.2    | 0      |
+-------------------------+-----------+--------+------------+--------+
| Prince Edward Island    | 84.5      | 0.5%   | 7,978.7    | 0      |
+-------------------------+-----------+--------+------------+--------+
| Newfoundland and        | 9.1       | 0.1%   | 859.2      | 0      |
| Labrador                |           |        |            |        |
+-------------------------+-----------+--------+------------+--------+
| Total                   | 16,250.0  |        | 1,534,357  | 9      |
+-------------------------+-----------+--------+------------+--------+

\*Source: Statistics Canada (2007)

\*\*BSE cases reported through August 2006 were included in APHIS
(2006c)

^+^The BSE case confirmed in May 2003 was born in Saskatchewan but
reported in Alberta.

Based on this allocation of evidence, a binomial likelihood ratio test
(Fleiss [et]{.underline} [al]{.underline}., 2003) fails to reject the
hypothesis that the provinces have the same BSE prevalence. That is, the
result provides no basis for concluding that BSE prevalence varies among
provinces. Depending on the method used to estimate provincial BSE
prevalence, the test indicates that 11 to 20 BSE cases would have to
have been observed in Alberta (or 4 to 7 cases in British Columbia)
before rejection of the hypothesis.

The commenters provide no data or analysis related to BSE hot-spot
development. APHIS' risk assessment discusses the apparent geographic
clustering of Canadian BSE cases reported through August 2006 in three
western provinces: Alberta, British Columbia, and Manitoba (APHIS 2006b,
pp. 12-13). (In addition, the May 2003 case reported in Alberta was born
in Saskatchewan.) However, APHIS also noted that the Manitoba BSE case
was phenotypically different than the previously detected BSE cases of
Canadian origin (APHIS 2006b). In addition, in its risk assessment,
APHIS considered the CFIA report (CFIA 2006) that discusses geographic
and temporal BSE clustering theories. APHIS concluded that the detection
of further clusters (i.e., linked cases) that might be defined in the
future cannot be ruled out and did not assume that any Canadian
provinces are BSE-free. While BSE case investigations may reveal
associations among individual cases, such as a common feed source, the
question of clustering is scale dependent. At a local scale, there may
be associations between individual cases, but at a regional or national
scale, the clusters themselves may be geographically dispersed. In
addition, the geographic disease dispersal pattern may change over time
due to the movement of cattle.

Further, the commenter provides no evidence or analysis to support the
hypothesized sources of heterogeneity. On the contrary, disaggregating
the available surveillance data into numerous strata to account for
hypothetical sources of heterogeneity (geography, market class, etc.)
generates substantial uncertainty within strata by diluting the sample
size. One consequence of this practice (commonly called
over-stratification) would be to inflate the upper confidence level risk
estimates within putative strata (e.g., Alberta beef cattle).

With regard to quantifying the likelihood of imports creating localized
hot spots in the United States, the commenter provides no data or
analysis, and cites no existing scientific literature, in support of the
hypothesis that some U.S. cattle producing areas are--on average--more
susceptible than others to the establishment of BSE. While such spatial
heterogeneity is theoretically plausible, APHIS is unaware of any
empirical data that would provide a statistical basis for distinguishing
BSE susceptibility among U.S. cattle-producing locations. Although the
commenter claims that the APHIS analysis represents an average risk
estimate, the assessment does consider random variability on the
national scale in the BSE reproductive rate (R~0~) and the number of
infected animals under each scenario or set of assumptions (APHIS
2006b). In essence, the commenter argues for a more disaggregated risk
model that has random variability at the local level (in which regions
are assumed to vary significantly from one another) rather than at the
national level, but the comment does not provide any evidence in support
of the hypothesis that such local differences (spatial heterogeneity)
either exist, can be distinguished from a random distribution, or are of
sufficient magnitude that they need to be accounted for by the model.

Finally, the commenter's calculation of a 77.7 percent probability of at
least one U.S. hot spot being activated rests on two assumptions. First,
the commenter assumes that the prevalence of BSE in Canada exceeds the
APHIS prevalence estimate by a factor of 10. There is no evidence to
support this assumption. Second, the commenter assumes that there is a 5
percent probability that Canadian cattle would be introduced into
pockets within the United States where R~0~ exceeds unity. (If R~0~
exceeds unity (one), the disease will tend to spread. Conversely, if
R~0~ is less than unity, the number of cases will tend to decline over
time, and ultimately the disease will die out.) Other than asserting the
existence of such pockets and that 5 percent of U.S. locations may be
hot spots, the commenter provides no evidence to support this
contention. Even if the comment did provide such evidence, it would have
to show that in such pockets the value of R~0~ substantially exceeds 1
in order for there to be evidence that a substantial impact is likely.
For example, if R~0~ = 1.1 and each generation of the disease (i.e., the
time between infection of an animal and that animal's subsequent
infection of another animal) lasts just 2 years, it would take 40 years
for the disease prevalence to climb from 1 animal to 7. Finally, the
commenter's suggestion supposes that no action would be taken to address
vulnerabilities in a susceptible pocket if BSE did materialize. This
assumption is inconsistent with APHIS' policy and record.

[Issue]{.underline}: One commenter asked whether the expected number of
imported animals by class (i.e., the intended use of the animal, such as
for breeding, immediate slaughter, or feeding and then slaughter) needed
to be validated or explored in the sensitivity analysis.

[Response]{.underline}: We projected the expected number of imported
animals by class because an animal's usage will govern at what age it
goes to slaughter. How long a bovine lives will, in turn, have an effect
on the animal's likelihood of developing detectable levels of BSE
infectivity. The projected numbers of imports by age and use class used
in our risk assessment were prepared for APHIS by USDA ERS. These values
are based on USDA baseline projections, with specific factors considered
based on the regulatory changes proposed. Additional details are
provided in Appendix 1 of the Regulatory Impact Analysis and Final
Regulatory Flexibility Analysis.

Although these estimates cannot be entirely certain, they are based on
the input of experts in the fields of commodity projection and cattle
markets iteratively refined with estimates from widely accepted models.
Therefore, alternative plausible assumptions for the number of imported
animals by class would not likely vary substantially from those based on
the most current inputs. Hence, the import projections do not contribute
significantly to uncertainty in the total estimated rate at which BSE
may be introduced into the United States from Canada. In any case, new
economic information based on market forces and age verification
described above indicates that, compared to those used in the published
risk assessment, the import projections should be revised downwards,
especially estimates for the projected number of older cull animals. As
a result, any potential release of BSE-infected animals should be lower
than previously estimated. In addition, the key determinant of the
impact of an introduction of BSE into the United States is its
propensity to spread within the cattle herd. The risk assessment results
indicate that, because the reproductive constant, R~0~, remains
consistently less than one, prevalence in the United States will tend to
fall over time. (In order for the disease to spread, R~0~ must exceed
unity (one).)

[Issue]{.underline}: One commenter stated that the incidence rate among
just the older cattle covered by the proposed rule would be expected to
be even higher than the overall incidence for all Canadian cattle
slaughtered, thereby making the likely risk even greater.

[Response]{.underline}: We are not certain what the commenter is
referencing as "overall incidence for all Canadian cattle slaughtered."
We note that APHIS estimated the prevalence of BSE in the standing adult
cattle population in Canada, not the BSE incidence in all Canadian
cattle slaughtered. The Canadian BSE surveillance data provide no
statistical basis for concluding that one birth-year cohort has a higher
or lower BSE prevalence than another. Therefore, we assumed for our risk
assessment that all animals in the current standing Canadian cattle
population, including animals 30 months of age and older that are
eligible for importation under this rule (as well animals that are not
eligible for importation under this rule due to the birth-date
requirement) have the same probability of BSE infection. However, it
would not be surprising if animals born at an earlier date (i.e., either
before or around the time the feed ban was implemented) have a greater
likelihood of exposure to contaminated feed, and therefore could have a
higher prevalence of BSE than animals born in later years. For this
reason, we are restricting imports of live bovines from Canada to those
born after the date when the country had an effectively enforced feed
ban--which we have determined to be March 1, 1999. Additionally, of the
live bovines we project will be imported following the effective date of
this rule, greater than 80 percent of the animals are expected to be
younger than 2 years of age at the time of importation.[^8] Therefore,
even if older animals had some significantly higher level of BSE
prevalence (which is already reflected in the standing herd estimates),
the fact that this rule excludes the importation from Canada of bovines
born before March 1, 1999, along with the fact that the large majority
of animals are expected to be young, would tend to decrease, rather than
increase the overall risk from that which we have estimated.

[Issue]{.underline}: One commenter indicated that Canada's BSE
prevalence rate essentially guarantees (probability greater than 98
percent) that some BSE-positive cattle will enter the United States.
Another commenter suggested that there is a 99.75 percent chance that
one or more cattle that would test positive for BSE will be imported
into the United States among the first million cattle that would be
imported after adoption of the proposed rule.

[Response]{.underline}: We note that prevalence refers to the proportion
of BSE-infected animals, not the proportion of animals that would test
positive for BSE. BSE-infected cattle are unlikely to test positive
unless they are tested at a late stage of disease incubation.

Nevertheless, the commenter's estimated likelihood of entry of
BSE-infected cattle is consistent with the APHIS risk assessment. The
risk assessment clearly acknowledged the possibility of importing
infected animals. Given the estimated current prevalence in Canada,
table 7 in the risk assessment presents the projections for imports in
the first year of implementation, including infected animals.

[Issue]{.underline}: One commenter expressed doubt regarding the
conclusion reached by the APHIS risk assessment that\--because Canada's
BSE prevalence will likely decrease over time, and because of the
barriers to BSE transmission in the United States\--the likelihood of
BSE exposure and establishment in the U.S. cattle population as a
consequence of the proposed rule is negligible. The commenter stated
that the overlapping safeguarding measures described in the risk
assessment have not prevented the continued spread of BSE in other
countries (including Canada) that have relied on similar measures. The
commenter further suggested that the measures have not been empirically
tested or validated and cited the four Canadian BSE cases born in the
years 2000 and 2002 as evidence that the measures are, in fact,
ineffective to either reduce or prevent BSE infection.

[Response]{.underline}: We disagree with the commenter's statements.
Various data--epidemiological, modeling, and experimental\--clearly
demonstrate that the barriers discussed in the risk assessment and the
proposed rule will decrease the risk of the introduction of BSE and its
amplification. These barriers have been used internationally as
strategies for the control and prevention of BSE. Furthermore, the
barriers have demonstrated a striking effect in curtailing the epidemic
and are responsible for the downward pressure on the prevalence of BSE
observed in the United Kingdom and Europe. As described in the risk
assessment: (1) Slaughter controls prevent the recycling of infectivity
into human food and cattle feed; (2) rendering processes contribute to
the inactivation of the BSE agent; and (3) feed controls prevent the
recycling into cattle feed. In addition, there is epidemiological
evidence of an age-related susceptibility to infection, which implies
that the animal not only needs to be exposed to the BSE agent to become
infected, but needs to be exposed with a sufficient dose at the time in
its life that it is susceptible. For disease transmission to occur, the
following events must happen in sequence: An infected animal dies or is
slaughtered at a sufficiently late point in the incubation period to
have significant infectivity present in certain tissues; those tissues
go into the rendering system; some level of infectivity remains after
the rendering process; the resulting protein is included in feed; and
feed is fed to a ruminant in a sufficient amount at an age when it is
susceptible. Although this could occur, the likelihood of it happening
repeatedly is negligible. This fact is demonstrated in the quantitative
exposure model used in our risk assessment--i.e., transmission can
occur, but it is not sufficient to sustain the disease (R~0~ remains far
less than one).

We reviewed Canada's feed production process (e.g., regulations in place
based on statutory authority, infrastructure to implement the
regulations, and compliance with the regulations). We used a
peer-reviewed model to estimate the prevalence and determined that the
prevalence in Canada is extremely low. We also used a peer-reviewed
exposure model in our assessment of the risk (Cohen [et]{.underline}
[al]{.underline}., 2001; 2003). This model takes into consideration
several parameter values that are based on experimental and
epidemiological information related to BSE. These parameters represent
key epidemiological elements related to the mechanisms by which BSE is
transmitted. As we indicate in the exposure assessment, that assessment
demonstrated that, because we expect Canada's prevalence to decrease
over time, and because of the barriers to BSE transmission in the United
States, the likelihood of BSE establishment in the U.S. cattle
population is negligible. We reach the same conclusion even without
assuming a drop in Canada's BSE prevalence over the next 20 years.

[Issue]{.underline}: One commenter, in addressing risk mitigation
measures in place in the United States, stated that several loopholes
remain in the U.S. feed ban through which BSE infectivity could be
introduced to cattle, despite recommendations from an APHIS TSE Working
Group.

[Response]{.underline}: APHIS has proceeded in a thorough and
deliberative manner, in cooperation with FSIS and FDA, to determine the
steps necessary to continue to protect animal and public health. APHIS
has used a peer-reviewed model to assess the likelihood of exposure of
cattle to BSE as a result of importing live cattle from Canada under the
proposed rule (Cohen [et]{.underline} [al]{.underline}., 2001; 2003).
This model takes into consideration several parameter values relevant to
the cattle production process, including what the commenter refers to as
loopholes in the feed ban regulations. Even after considering these
features of the U.S. system, the results indicate that the likelihood of
BSE exposure and establishment in the U.S. cattle population as a
consequence of infectivity introduced via imports from Canada is
negligible.

[Issue]{.underline}: One commenter stated that the models that Canada
and the United States used in estimating BSE risk are not validated and
have no predictive value. The commenter stated further that the
predicted risks from the Harvard model would increase almost 15-fold if
compliance is less than assumed in the base case.

[Response]{.underline}: We disagree with the commenter's assessment of
the quantitative exposure model we used in developing our risk
assessment. As noted earlier, the plausibility of the model was
established by comparing its predictions for Switzerland against the
observed progression of BSE within that country's cattle herd (Cohen
[et]{.underline} [al]{.underline}., 2003). Although the model's
performance in the United States has not been empirically evaluated
(because there have been too few cases in the United States to do so),
the use of models to characterize future risks is well-accepted in the
scientific community.

The commenter cites an FSIS risk assessment (Cohen and Gray, 2005),
which uses a version of the Harvard model, to argue that, if the
misfeeding rate parameter is highly uncertain, the resulting range of
results generated by the simulation model is likewise wide. As explained
in the APHIS risk assessment, new information indicates that the
original range of estimates for the misfeeding rate in the Harvard model
as originally developed in 2001 were overly pessimistic. APHIS obtained
new data and, using these new data in the Harvard model, reduced the
range of the original estimates. Therefore, in APHIS' evaluation, the
impact of misfeeding on the output of the model is much more modest.

[Issue]{.underline}: One commenter asserted that APHIS' risk assessment
model predicts low or "negligible" risks only if optimistic assumptions
are made.

[Response]{.underline}: APHIS disagrees with the commenter. The
commenter simply cites the results of APHIS\' own sensitivity analysis
using \"pessimistic\" assumptions and provides no evidence or analysis
demonstrating that the APHIS \"base case scenario\" assumptions are
optimistic. APHIS combined qualitative and quantitative methods in its
assessment of risk from live cattle. We qualitatively evaluated what we
expect as the most likely scenario\--prevalence drops in Canada over the
next 20 years, resulting in decreases in potential release and exposure.
While the commenter may consider this expectation an optimistic
assumption, we do not and we note that this assumption is based on
evidence from countries around the world that a feed ban provides
continuous downward pressure on prevalence.

However, APHIS also considered other less likely (more pessimistic)
scenarios, for which we assumed that the prevalence in Canada remained
constant over the next 20 years, using a quantitative exposure model.
The quantitative exposure model simulates the cattle management system
in the United States, with assumptions made for certain variables, or
parameters as input to this system. These parameters include BSE
prevalence in Canada, which is an exogenous variable (and therefore,
external to the U.S. system of mitigations), and many endogenous, or
internal parameters. The endogenous parameters include various aspects
of compliance with the FDA feed ban, how many carcasses enter the
rendering system, what rendering processes are used, how rendered
protein is incorporated into feed, and many other factors that can
contribute to the spread of BSE. The values for each of these parameters
basic assumptions that are meant to represent the most plausible and
realistic representation of the U.S. system are reflected in the \"base
case scenario.\"

Assumptions regarding those parameters for which we have the least
information (or the most uncertainty) were changed to more pessimistic,
but still plausible, values in the sensitivity analysis, to evaluate the
degree to which these changes would affect the results as compared to
the base case. Given that at least one significant parameter\--the
constant prevalence of disease in Canada\--was pessimistic even in the
base case, we do not agree with the commenter\'s assertion that the
quantitative model predicts low or negligible risk only if optimistic
assumptions are used. Moreover, even under the more pessimistic scenario
examined in the senstivity analysis, the reproductive rate of BSE (R~0~)
remains far below 1, indicating that the disease would not become
established in the United States.

[Issue]{.underline}: Several commenters stated that APHIS has not
adequately considered the risk that imperfect compliance with U.S. SRM
removal policies would have once we allow the importation of cattle over
30 months of age from Canada. One of the commenters stated further that
APHIS provided no data or analysis in the proposed rule to address this
series of known incidences of noncompliance.

[Response]{.underline}: We disagree with the commenters. As noted in our
risk assessment, the quantitative exposure model assumes that SRMs are
effectively removed 99 percent of the time. This assumption is based on
FSIS summaries of Noncompliance Records (NRs) performed from January
2004 to May 2005 in about 6,000 federally inspected meat and poultry
establishments. Based on these records, FSIS estimated that
noncompliance with respect to SRM-related regulations had a frequency of
less than 1 percent.

To explore the possible impact of assuming an arbitrary decrease
(compared to the results of our exposure model) in SRM removal
compliance on the availability of infectivity for human consumption, we
can discuss the significance of an order of magnitude increase in
available infectivity compared to our model's findings. First, we
consider the results of that model, which used the unlikely assumption
that prevalence in Canada (and thus the proportion of infected animals
imported from Canada) remained constant over the next 20 years. In the
model's scenario, the total amount of infectivity potentially available
for human consumption over the 20 years of the analysis is 45 cattle
oral infectious dose-50 units (ID~50~s). (BSE infectivity is expressed
in terms of cattle oral ID~50~s. A cattle oral ID~50~ is defined as the
amount of infectivity required to cause infection in 50 percent of an
exposed cattle population (APHIS 2006)).

The significance of cattle oral ID~50~ units to human exposure and
susceptibility is not known; however, various studies suggest that the
infectious agent may be 10 to 10,000 times less pathogenic in humans
than in cattle because of a species barrier (EC SSC, 2000). Thus, if the
cattle−human species barrier were 100, it would mean that 100 times more
infective material would be required in order to have a similar
probability of infecting a human as a bovine. Comer and Huntly (2003)
estimated, after an evaluation of available literature, that 54 million
bovine oral ID~50~ units were available for human consumption in Great
Britain from 1980 to 2003. This extremely large amount of available
infectivity has resulted in 165 cases of vCJD identified in the United
Kingdom through April 2007, plus a few additional cases identified in
other countries but attributed to exposure in the United Kingdom. When
compared to the United Kingdom's BSE experience and the associated
estimate of available bovine oral ID~50~ units, the expected, or average
value of 45 cattle oral ID~50~ indicates that only a miniscule amount of
the BSE infective agent that could possibly be available for potential
human exposure in the United States over a 20-year period (APHIS 2006).
(The potential for human exposure under this scenario is estimated at
1,200,000 times less in the United States than what the United Kingdom
experienced during its BSE epidemic.) Even if compliance with the SRM
ban were not as high as the 99 percent estimated in our exposure model,
and we were to assume that the infectivity available for human
consumption were increased by an order of magnitude (10x), it would
still be far less than that estimated to have circulated in the United
Kingdom and, we conclude, not to be of significance to human health.

[Issue]{.underline}: One commenter stated that, although APHIS assumes
that removal of SRMs from a bovine carcass will effectively shield
consumers from exposure to BSE, numerous studies have demonstrated
limitations on mitigating the risk of BSE exposure via SRM removal. In
particular, the commenter stated that APHIS did not appropriately
consider several studies (Buschmann, 2005; Iwamaru [et]{.underline}
[al]{.underline}., 2005; Hoffman, 2006) related to the distribution of
SRMs, and that APHIS failed to explain why these uncertainties and
concerns do not undermine its almost exclusive reliance on SRM removal
requirements to protect American public health from potentially
hazardous Canadian imports.

[Response]{.underline}: We are aware of the studies cited by the
commenter and do not agree that they question the efficacy of SRM
removal. We acknowledge that studies using new methods that provide
increased sensitivity will probably demonstrate the presence of PrP^BSE^
(the abnormal form of the prion protein) in various tissues. However,
demonstrating the presence of PrP^BSE^ does not necessarily indicate the
presence of BSE infectivity, especially if no infectivity is
demonstrated via the most sensitive method available: Cattle-to-cattle
exposure via intracerebral transmission. Therefore, one cannot
automatically assume that a finding of PrP^BSE^ in a tissue means the
tissue should be defined as an SRM. The OIE made this particular point
in the [Terrestrial Animal Health Standards Commission Report, October
2006--Supporting Document for Chapter 2.3.13. Of the Terrestrial Animal
Health Code on Bovine Spongiform Encephalopathy]{.underline}, as
follows:

> The availability of experimental infectivity data has significantly
> increased in recent years. During the same interval, extremely
> sensitive tests have been developed, including those employing highly
> sensitive transgenic mice strains and potentially more sensitive
> laboratory PrP detection methods. With the development of such highly
> sensitive methods, the probability of detection of PrP^BSE^ in tissues
> that are not currently listed as infectious is increasing. However,
> such findings need to be considered in context, and their relevance to
> establishing risk to consumers evaluated carefully when the quantity
> of PrP^BSE^ detected is potentially below the limit of detection of
> intracerebral (i.c.) cattle to cattle bioassay. By April 2007, 165
> variant Creutzfeldt-Jakob Disease (vCJD) cases had been detected in
> the United Kingdom, a country where most probably the majority of the
> population was exposed to the BSE-agent. The latest models of the vCJD
> epidemic estimate that the potential scale of the clinical epidemic
> arising from food-borne exposure is unlikely to exceed 400 future
> cases in the United Kingdom (Clarke and Ghani, 2005). The relatively
> low number of predicted vCJD cases in relation to the massive exposure
> to the BSE agent is suggested to be due mainly to a significant
> species barrier between cattle and humans (Comer and Huntley, 2004;
> Bishop [et]{.underline} [al]{.underline}., 2006).

APHIS is familiar with the results of the study (Buschmann, 2005) cited
by the commenter in which tissues from a BSE-diseased cow were
inoculated into genetically engineered (transgenic) mice that are highly
susceptible to BSE and which over-express the bovine prion protein.
Using this extremely sensitive mouse assay, this study demonstrated low
levels of infectivity in the peripheral nervous system (e.g., facial and
sciatic nerves) of the infected cow. APHIS discussed these findings in
its risk assessment and concluded that "\[g\]iven all these factors
there is not sufficient information to alter our understanding of the
epidemiologically significant distribution of BSE infectivity in
cattle." APHIS also acknowledges the results of Japanese studies in
which PrP^BSE^ has been reported in the peripheral nerves of a case of
BSE (Iwamaru [et]{.underline} [al]{.underline}., 2005) and in some
peripheral nerves of cattle slaughtered at abattoirs in Japan (Iwata
[et]{.underline} [al]{.underline}., 2006) by Western blot analyses.
APHIS has also reviewed the German study in which infectivity was
detected in the brainstem of an animal at 24 months post-infection
(Hoffman, 2006). We have carefully considered all of these findings.
USDA reviews and takes into consideration all BSE research for the
definitions of SRMs, as does Canada and other countries internationally.
As noted in the quote above, international policies regarding SRM
removal have not changed based on the results of the studies discussed.
Both the U.S. and Canadian policies regarding SRM removal are consistent
with international standards.

[Issue]{.underline}: One commenter referenced an FSIS study that found
that the removal of SRMs can reduce human exposure to BSE by about 80
percent. The commenter stated that this level of protection is clearly
inadequate to protect the United States from risks associated with the
importation of older cattle from Canada that represent an inherently
higher risk for BSE. The commenter then referred to the sensitivity
analysis APHIS conducted as part of its risk assessment, which
incorporated a higher value for Canada's BSE prevalence than in the more
likely base-case scenario. The commenter expressed concern that the
sensitivity analysis revealed that 108 BSE infected cattle could be
imported into the United States over the next 20 years and result in 12
new BSE cases in the United States.

[Response]{.underline}: We disagree with the commenter regarding the
significance and applicability of the cited study. In this response, we
present a more appropriate study from which to draw useful inferences
regarding the impacts of SRM removal.

The 2004 FSIS document referred to by the commenter\--"Preliminary
Analysis of Interim Final Rules and An Interpretive Rule to Prevent the
BSE Agent From Entering the U.S. Food Supply"--is an analysis intended
to evaluate the major impacts of measures contained in the FSIS interim
final rules published and implemented in January 2004. FSIS used the
Harvard model in this analysis to estimate the benefits of these
measures, specifically "those \[benefits\] resulting from the reduction
in human exposure to BSE infectivity." FSIS used this model to create a
baseline estimate of potential human exposure and then evaluated three
scenarios of risk mitigation options (e.g., SRM removal) for comparison
to the baseline. In each simulation, FSIS assumed that five infected
animals were introduced into the United States in 2003, and then
simulated the spread of BSE infectivity until 2020. The simulations of
the risk mitigation measures were run assuming that the mitigations were
implemented in 2004, i.e., approximately 12 months after the
introduction of infected animals. While the commenter is correct that
this analysis demonstrated a reduction in potential human exposure of 80
percent, the comment does not accurately portray the context of this
result. Given the assumptions used in the simulation (i.e., the risk
mitigation measures, including SRM removal, were not implemented until
12 months after introduction of infectivity), a certain amount of
infectivity would have become available for human exposure before the
mitigations measures were implemented in the model scenario. Therefore,
the mitigation measures could never eliminate all of the infectivity
available. Since all scenarios included at least some time in which the
mitigations were not implemented, under the simulations, a certain
amount of potential infectivity was allowed into inappropriate channels,
such as human food. Because none of these scenarios incorporated the
more realistic assumption that the mitigations were implemented (even
imperfectly) throughout the simulation period, it is inappropriate to
use this analysis as a citation for the level of public health
protection provided by risk mitigation measures in place in the United
States.

A more appropriate analysis for understanding the role of SRM removal in
potential human exposure to BSE infectivity would be the FSIS update of
the same Harvard simulation model that was available for public comment
in 2006. APHIS cites the analysis in the risk assessment conducted for
this rulemaking as Cohen and Gray (2005). This updated model used the
"base case" as the circumstances in the United States prior to December
2003, and simulated the response of the U.S. system for 20 years
following the import of BSE-infected cattle. FSIS' updated model
estimated the impact of various risk management measures, including
measures that were adopted, considered, or proposed by various agencies
and groups. These simulations, where the risk mitigation was applied
during the entire simulation, as opposed to the simulation in the
analysis cited by the commenter (in which it was not), indicated that
removing SRMs, as currently defined by FSIS, reduced potential human
exposure by more than 99 percent, on average. This report also stated
that "\[i\]t is worth noting that these measures reduce what is already
a small exposure in absolute terms."

[Issue]{.underline}: One commenter stated that SRM removal requirements
have not been in place long enough for an effect to be determined, due
to the exceedingly long incubation periods assumed for humans. The
commenter stated further that the experience of other countries in which
BSE has been detected (except for Canada) cannot be used to demonstrate
that SRM removal is highly effective, because other countries have more
stringent SRM removal requirements than do Canada and the United States
and their experience is not applicable for predicting risk in the United
States.

[Response]{.underline}: The commenter appears to be questioning two
points--first, whether SRM removal is actually highly effective in
protecting public health, and second, whether experience in Europe can
be used as a comparison for expectations in North America.

The commenter is correct in that there has been no specific controlled
study that clearly and unequivocally demonstrates the effectiveness of
SRM restrictions on protecting public health. The absence of such a
study does not negate the fact, however, that substantial
epidemiological and case evidence clearly indicate the success of such
control measures. It is widely and generally accepted internationally,
including by such international bodies such as the World Health
Organization (WHO) and the OIE, that the primary public health
protective measure regarding BSE is the removal of SRMs from the human
food supply (WHO, 2002).

The OIE Scientific Revue notes the following: "Excluding SRM from the
human food chain effectively minimizes the risk of human exposure and is
the most important measure taken to protect consumers. Failure to remove
SRMs would probably expose a large number of consumers to an unnecessary
risk." (Heim and Kihm, 2003). This point is also widely acknowledged in
scientific literature, including articles cited by the commenter. For
example, Bradley and Liberski (2004) conclude that "risks to humans from
infected cattle are now remote so long as the \[bans on the use of SRMs
in human food\] are rigorously enforced." Fox and Peterson (2004)
conclude that "\[a\]doption of the human \[specified bovine offal\] ban
in the United Kingdom in 1989 is probably the only example in the BSE
story of a government going beyond expert opinion in taking a
precautionary measure. It turned out to be the correct decision, and
likely saved thousands of people from exposure to the disease."

Simulation models and analysis conducted in the United Kingdom support
the assumption that primary exposure sources for people were SRMs in the
food supply prior to imposed restrictions. These models have been
updated and revised repeatedly since the original identification of vCJD
and the link to BSE in cattle (Ghani and others, 1998, 2000, 2001, 2003,
2005). They incorporate assumptions for all the parameters that could
influence the course of vCJD in the United Kingdom--including
assumptions about primary exposure from dietary sources, calculations
about how many infected cattle may have been slaughtered at different
points in time, what tissues from those animals were available for
consumption, and what restrictions were imposed on the tissues and types
of products available for consumption. The models are updated routinely
to incorporate new information about vCJD cases as they are reported.

These models have been used to predict the course of the vCJD epidemic
in the United Kingdom. Initially, the projections were fairly high with
considerable uncertainty. As more information is incorporated into the
models, these projections continue to decline and the uncertainty levels
also decrease. The number of clinical cases of vCJD in the United
Kingdom has continued to decline since an apparent peak in 2000
(Andrews, 2007). This decline is consistent with projections made from
the models, thus validating some of the assumptions used in the models.
As an example, Cooper and Bird (2003) assume that the primary sources of
exposure are the consumption of meat products--including mechanically
separated meat and head meat--that were most likely contaminated with
SRMs such as spinal cord, dorsal root ganglia, and brain. Restrictions
on the inclusion of spinal cord and brain, among other tissues, were
initially imposed in the United Kingdom in 1989. Restrictions on the
production of mechanically separated meat, which included a significant
level of infectivity from dorsal root ganglia, were imposed in the
United Kingdom in 1995. Cooper and Bird (2003) concluded that "\[t\]here
is remarkable similarity between the age distribution and gender of
simulated and observed vCJD patients, which supports (but does not
prove) our assumption about the primary sources of exposure to BSE."

The commenter notes the "exceedingly long incubation periods assumed for
humans." More recent updates of the models described previously have
included estimates of the mean incubation period for vCJD (Ghani
[et]{.underline} [al]{.underline}., 2003) and estimated the mean
incubation period for vCJD at 12.6 years when using the accumulated case
data from confirmed vCJD cases. When additional information was added
from results of a screening study performed on appendix and tonsil
tissues, the mean incubation period was 16.7 years when fitted to this
data. From this evidence, we can conclude that even the longer mean
incubation period of 16.7 years would allow sufficient time to
demonstrate the effect of SRM restrictions on the outbreak, since the
initial SRM restrictions were imposed in 1989. We note that all vCJD
cases that have been genotyped to date, with one exception, have been of
the homozygous methionine (MM) genotype at codon 129 of the human prion
protein gene. It is estimated that approximately 40 percent of the
Caucasian population is homozygous methionine, with approximately 10
percent valine homozygous, and the remaining 50 percent heterozygous.
While the effect of genotype on vCJD is still unknown, we can evaluate
scenarios in the MM genotype as an example of epidemic progression,
because this genotype may be the most susceptible and/or have shorter
incubation periods than other genotypes.

The second point the commenter raises is whether there would be
significant differences in potential public health exposure due to the
different definitions of SRMs in Europe and North America (Canada and
the United States). While these definitions identify essentially the
same tissues, European regulations define tissues such as brain and
spinal cord as SRMs in animals greater than 12 months of age, where
North American regulations define these tissues as SRMs in animals
greater than 30 months of age.

In the past few years, significant consideration has been given to the
age limits on SRMs and their appropriateness. Additional information
obtained from new research findings has contributed to these
evaluations. Scientists in Europe have specifically examined these
findings as part of their consideration on the age limit in cattle for
the removal of SRMs (EFSA, 2005; 2007). In each of these opinions, they
conclude that any likely detectable infectivity in the central nervous
system (CNS)--including the SRMs in question--appears at about 75
percent of the incubation time. These opinions also note that the
experimental low-dose scenarios are more likely to resemble the actual
field exposure. The low-dose research scenarios are those in which
calves were exposed orally to 1 gram of highly infective brain tissue,
rather than the 100 grams used in the high-dose scenario. Experimental
attack rate studies indicate that the incubation period for the low-dose
scenario has a mean of 60 months, with a range of 45 to 73 months (Wells
[et]{.underline} [al]{.underline}., 2007). Using the low end of this
range of incubation period, and assuming that infectivity is present in
the CNS at 75 percent of the incubation period, they predict that
infectivity would be sub-detectable or still absent in CNS in cattle
aged 33 months.

In the United Kingdom, even including cases from the height of the BSE
epidemic there, which are believed to have had shorter incubation
periods than more recent cases, the peak age at onset of clinical signs
was 5 to 6 years. This age of clinical onset is consistent with an
assumption that the average incubation period in the United Kingdom has
been about 60 months. The average age of animals identified with disease
in the EU is higher than this--the average was 86 months in 2001 and has
increased since then. This evidence indicates that considering certain
tissues in bovines 30 months of age or older to be SRMs, and removing
and disposing of those tissues, would eliminate the majority of
infectivity present, and removing and disposing of these same tissues
from bovines between 12 and 30 months of age would not provide any
significant additional protection.

This same point is illustrated in various models. Comer and Huntly
(2003) modeled the potential human exposure available in the United
Kingdom from 1980 through 2002. They concluded that an estimated total
of 54 million bovine oral ID~50~ units could have been consumed in that
timeframe. This period included both the beginning of the epidemic in
cattle, before the disease was recognized and public health control
measures were established, and later in the epidemic when control
measures were developed and instituted. Comer and Huntly also concluded
that 99.4 percent of this estimated exposure was from animals older than
30 months of age. Therefore, SRM restrictions from animals greater than
30 months would reduce the vast majority of potential exposure.

In summary, we are in agreement with the conclusion that has been widely
reached and that has generally been accepted internationally, that the
primary public health protective measure regarding BSE is the removal of
SRMs from the human food supply.

[Issue]{.underline}: One commenter stated that APHIS' assertion that the
rendering process is important in the inactivation of the BSE agent is
overstated.

[Response]{.underline}: As we stated in our January 2007 proposed rule,
we recognize that standard rendering processes do not completely
inactivate the BSE agent, and that rendered protein such as MBM derived
from infected animals may remain contaminated. However, the rendering
process is an important factor in BSE risk reduction for two reasons.

First, standard rendering processes will inactivate significant levels
of any BSE infectivity that might remain in materials sent to rendering
by subjecting the material to intense heat and pressure. The risk
assessment conducted for this rulemaking noted that the rendering
process has proven to be effective in reducing the level of infectivity.
This is based on data regarding inactivation by various rendering
methods (Taylor [et]{.underline} [al]{.underline}., 1995; Taylor
[et]{.underline} [al]{.underline}., 1997). The assumptions on this point
used in the quantitative exposure model have been previously explained
(Cohen [et]{.underline} [al]{.underline}., 2002, 2003) and include a
range from 0 logs reduction in infectivity in a vacuum rendering system
to 3.1 logs reduction in a batch system. The proportions of cattle
rendered in the various systems were also explained, with the majority
of rendering (90 percent) done in either a continuous/fat-added system
(providing a 2.0 log or 99 percent reduction) or a
continuous/no-fat-added system (providing a 1.0 log or a 90 percent
reduction). On average, the rendering process inactivates 1.4 logs of
infectivity, or greater than 97 percent.

Additionally, rendering serves as a critical control point in
redirecting ruminant proteins away from cattle feed. In the risk
assessment we conducted for this rulemaking, we explained that the
rendering process will contribute to the prevention of BSE as part of a
series of sequential barriers, rather than as an independent barrier.

[Issue]{.underline}: One commenter expressed concerns about plate waste
as a potential pathway for BSE infection of U.S. cattle, because the
proposed rule did not prohibit the feeding of plate waste, including
beef, to cattle. The commenter referred to APHIS' risk analysis that
accompanied the rulemaking related to the importation of boneless beef
from Japan (70 FR 73905-73919, Docket No. 05-004-2), which concluded
that the plate-waste pathway did not present a significant BSE risk, and
stated that the conclusion reached in that risk assessment would not be
applicable regarding beef from Canada, because the expected amount of
product from Canada would be much greater than that projected for
importation from Japan.

[Response]{.underline}: We do not agree with the commenter that plate
waste is a potentially significant BSE pathway due to this rule. In the
risk analysis we conducted for the rule related to the importation of
boneless beef from Japan, we discussed direct and indirect exposure
pathways by which such beef might expose U.S. cattle to BSE if the
product contained the BSE agent. In addition, we stated in unequivocal
terms that the primary factors limiting the likelihood that whole cuts
of boneless beef imported from Japan would expose the U.S. cattle
population to BSE are (1) the inherently low risk of the product, (2)
measures to prevent contamination, which would be the same for any beef
from cattle from Canada that might become plate waste, and (3) the fact
that the product is unlikely to be fed to cattle.

Although we recognized in our rulemaking for boneless beef from Japan
that the product (inherently low-risk boneless beef) is not intended for
animal consumption, we evaluated pathways by which some small fraction
of the product might inadvertently be fed to cattle. We considered the
possible pathways to include restaurant trimmings and plate waste, and
the direct feeding of human food waste to cattle. We further evaluated
pathways by which home food waste and plate waste can be fed directly to
cattle, and we did not identify any epidemiologically significant
pathways for exposure of the U.S. cattle population. Specifically for
plate waste, which is allowed to be incorporated into ruminant feed, we
considered that the amount of meat in the plate waste would be
insignificant (Cohen [et]{.underline} [al]{.underline}., 2001; 2003).
Furthermore, because FDA requires that the plate waste be further heat
processed for feed, it may be subject to rendering processes that will
inactivate significant levels of the agent, further reducing the level
of infectivity in the rendered product. (Cohen [et]{.underline}
[al]{.underline}., 2001; 2003).

The inherent (low risk) characteristic of the product imported under the
Japan rule, coupled with the measures to prevent contamination of the
product and the fact that the product is unlikely to be fed to cattle,
were the primary factors in our evaluation. We did not dismiss any risk
based on quantity. We considered the level of imports specifically under
that rule as an additional limiting factor for any infectious material,
if present, in the product.

Canadian cattle imported under this final rule will be slaughtered for
edible meat production at slaughter plants within the United States and
would be subject to FSIS' slaughter restrictions. These restrictions
include ante-mortem inspection and prohibition of the slaughter of
downer animals. In addition, FSIS requires the removal of SRMs, which is
a critical risk measure preventing contamination of edible meat with BSE
infectivity. We consider these measures, combined with the fact the
edible meat is inherently low risk for the BSE agent, to be sufficient
to mitigate the risk of exposing U.S. cattle to the BSE agent, if
present, via plate waste.

[Issue]{.underline}: One commenter noted that a peer reviewer of the
2005 Harvard Risk Assessment of Bovine Spongiform Encephalopathy Update:
Phase IA suggested lowering the estimate that, at ante-mortem
inspection, a Federal inspector will identify BSE symptoms in infected
animals 90 percent of the time. The commenter stated further that the
Canadian BSE cases have not been clinical suspects.

[Response]{.underline}: The FSIS revision of the ante-mortem assumptions
demonstrates that the assumed ante-mortem detection rate does not
strongly influence the results of the analysis. The commenter noted that
cutting the detection rates to 50 percent (ambulatory animals) and 25
percent (non-ambulatory animals) increases the projected number of
infected animals by approximately 5 percent. Importantly from the
perspective of APHIS, this revision had a limited impact on R~0~. The
revised FSIS assessment (dated December 26, 2006) included several
changes relative to the original FSIS assessment (dated October 31,
2005)[^9]. The mean value of R~0~ increased from 0.24 in the original
FSIS assessment to a mean value of 0.27 in the revised FSIS assessment.
The 95th percentile estimate for R~0~ increased from 0.45 in the
original FSIS analysis to 0.48 in the revised FSIS analysis. In
conclusion, the FSIS analysis indicates that changing the ante-mortem
assumptions does not appreciably alter the projected spread of BSE.

On the basis of the FSIS finding, APHIS concludes that a change in the
ante-mortem detection rate of this magnitude does not qualitatively
alter APHIS' conclusions, and therefore does not merit revision to the
simulation model.

[Issue]{.underline}: One commenter cited published literature described
in the risk assessment to point out the levels (in grams) of highly
infective brain tissue that resulted in infection of calves following
experimental oral exposure. The commenter then asked if, after gauging
what dosage is necessary to transmit BSE orally, the risk to each animal
should be calculated based on the number of times it has a feeding.

[Response]{.underline}: There is no need to revise the model in response
to this comment for the following reasons. First, the model does not
assume any threshold below which exposure to BSE would pose zero risk of
infection. Second, and as a result of the first point, the model assumes
that every exposure event incrementally contributes to the risk of
infection.

[Issue]{.underline}: One commenter noted that the number of infected
animals that survive sufficiently long enough to develop clinical
disease is always small in the exposure assessment (even under very
pessimistic assumptions), and that, presumably, clinical animals will
come primarily from those animals characterized as "beef repro" and
"dairy" (APHIS 2006b, table 5). The commenter questioned whether the
estimates of animals imported in these classes of animals and their
time-dependent removal (death, slaughter, and cull) rates from the
population before clinical signs develop were realistic and validated.

[Response]{.underline}: This comment appears to consist of two parts. In
the first, the commenter asks if the estimates of numbers of imported
breeding animals are realistic and valid, and in the second, the
commenter asks if the time-dependent removal of these animals is
realistic and valid. Because different sources of evidence support these
two components of the question, we address them individually in the
following discussion.

As we explained in response to another comment, our estimates of imports
of all cattle classes, including breeding animals, were developed by
USDA, ERS. They are based on a well-accepted, iterative method involving
expert opinion and country-commodity specific modeling. Based on the
above description of this process, we expect that alternative plausible
assumptions for the number of imported breeding animals would not likely
vary substantially from those based on the most current inputs.

With regard to the commenter's questions about time-dependent removal of
these animals (i.e., at what point animals are removed from the cattle
population by, e.g., slaughter) APHIS notes that imported animals are
integrated into the U.S. herd and thus are removed (slaughtered) using
the same distribution used for native-born U.S. cattle. The slaughter
parameter used in the Harvard model (Cohen [et]{.underline}
[al]{.underline}., 2003) "represents the probability that cattle will be
sent to slaughter. This probability depends on the \[animal\'s\] type of
production, age, and gender (e.g., steers and heifers are sent to
slaughter earlier than dairy cows or reproductive beef animals)." The
developers of the model based the associated assumptions for the
parameter on the following sources, listed in Cohen [et]{.underline}
[al]{.underline}. 2003: USDA (U.S. Department of Agriculture 1998a),
Radostits [et]{.underline} [al]{.underline}., 1994, and several personal
communications (Clay 2001; Crandall 2001; Pinter 2001). The model and
its parameters have been subject to previous peer review and have been
found to be realistic.

[Issue]{.underline}: One commenter expressed concern that, if an
undetected BSE-infected cow were imported into a family herd and, upon
becoming incapacitated, were sent to a local small rural facility to be
processed into beef for the cow's owners, BSE could enter the food
chain.

[Response]{.underline}: The commenter seems to be concerned about the
possibility of BSE entering the human food chain after a cow is
slaughtered for personal use at a custom slaughter facility. However,
such usage would be in contravention of FSIS regulations. FSIS
prohibitions on the use of SRMs for human food apply to cattle
slaughtered for personal use at custom facilities, as does FSIS'
prohibition of the use of all non-ambulatory disabled cattle in the
human food chain (FSIS 2007).

[Issue]{.underline}: A number of commenters recommended that the
provisions of the proposed rule not be implemented unless focused
testing for BSE of cattle imported from a BSE minimal-risk region is
carried out at slaughter. A number of commenters recommended that any
bovine 30 months of age or older imported into the United States from a
BSE minimal-risk region be tested for BSE before being used for food.
Several commenters recommended that USDA require testing for BSE of all
cattle imported to the United States from countries in which BSE has
been diagnosed, such as Canada. One commenter recommended that the
proposed rule not be implemented until rapid-test technology for BSE is
provided to all U.S. slaughtering facilities. Another commenter
recommended that USDA allow slaughter establishments to conduct
additional tests to satisfy consumer demands.

[Response]{.underline}: Our peer-reviewed risk assessment concluded that
the likelihood of BSE release from cattle imported from Canada is likely
to be extremely low because (1) the prevalence of BSE in Canada is
extremely low, and (2) measures requiring imported animals to be born on
or after March 1, 1999, will further decrease the likelihood that those
animals had been exposed to infectious material. Moreover, the exposure
assessment for live animals qualitatively indicates that because of the
barriers to BSE transmission in the United States, the likelihood of BSE
exposure and establishment in the U.S. cattle population as a
consequence of infectivity introduced via imports from Canada is
negligible.

Further, although we understand the interest expressed by some
commenters in testing certain cattle for slaughter, such comprehensive
testing would not necessarily yield accurate or useful results. Current
testing methodology can detect a positive case of BSE only a few months
before the animal begins to demonstrate clinical signs. The incubation
period for BSE--the time between initial infection and the manifestation
of clinical signs--is generally very long\--on average about 5 years,
which means that there is a long period during which testing an infected
animal would produce negative but incorrect results, especially if the
animal is clinically normal. The import projections anticipate that the
majority of animals imported for immediate slaughter and/or for feeding
and subsequent slaughter are young animals, generally slaughtered at
less than 30 months of age. Since current tests only determine the
presence of BSE shortly before the likely onset of symptoms, testing
young, apparently normal animals is not an effective use of the tests.
In addition, since SRM removal requirements are in place, testing
apparently normal animals at slaughter does not provide any significant
additional public health protective measure. Heim and Kihm (2003) note
that it is questionable whether testing all animals at slaughter
provides any measurable increase in consumer safety. Additionally, they
note that such testing can be counter-productive since measures such as
SRM removal may not be sufficiently emphasized due to the perceived
total reliability of the testing. Given that testing of clinically
normal, apparently healthy cattle does not provide meaningful data,
combined with the conclusions of the risk assessment concerning the
extremely low likelihood of release and negligible likelihood of
exposure and establishment in the U.S. cattle population, testing these
animals at slaughter as commenters suggest is not appropriate at this
time.

[Issue]{.underline}: A number of commenters stated that APHIS should not
expand the types of bovines allowed importation from a BSE minimal-risk
region until it can be shown that the current U.S. regulations are being
adequately enforced. Several commenters cited as an example of
inadequate enforcement an incident involving the importation and
movement to slaughter in the United States of Canadian cattle over 30
months of age. Of those commenters, some expressed concern regarding the
time it took to trace the animals back.

Several commenters stated that records from Washington State suggest
that Washington and several other States are having difficulty tracking
hundreds of cattle that arrive from Canada each week. Other commenters
stated that a number of cows entered the United States from Canada
without ear tag identification or certificates of health, or had eartag
identification that did not match the accompanying health certificate.

[Response]{.underline}: The commenters referenced an alleged violation
of the regulations in which imported Canadian feeder cattle were
reportedly sold through an auction market in the United States. A
detailed investigation into the incident demonstrated that the animals
in question were legally imported for immediate slaughter.

Commenters also referenced issues that State authorities identified in
tracking imported animals. Certain States instituted policies or
regulations that required additional movement controls and verification
beyond the APHIS import requirements. In these instances, it is the
responsibility of the State authorities to monitor compliance with their
regulations and to follow up on any reported violations. APHIS can
assist in resolving issues if requested.

APHIS port veterinarians inspect all live animal shipments entering the
United States. These inspections include careful review of the health
certificate accompanying the animals and a visual inspection of the
animals. Live cattle presented at the port of entry with no accompanying
valid health certificate are denied entry. We are not aware of any
instances where shipments of cattle have entered through a designated
port of entry without a health certificate. We recognize that animals
can lose eartags at various points in the process and have established
procedures to reapply eartags with appropriate documentation. In
addition, apparent transposition of digits or similar errors in
recording eartag numbers can often be addressed during consultation with
CFIA and/or the private veterinarian involved.

APHIS is not aware of significant or repeated violations of the existing
APHIS import regulations, and no evidence of such violations has been
provided by the commenters concerned. Individual instances of errors or
violations can, and have, occurred. These are investigated and dealt
with appropriately. At no time have any of these errors presented a
significant threat to animal or public health.

[Issue]{.underline}: One commenter stated that the animal health risk
assessment does not address the risks to the U.S. cattle industry, or to
human health, of having additional BSE cases discovered in the United
States.

[Response]{.underline}: We disagree with the commenter. In our risk
assessment, we addressed both the likelihood and the consequences of the
adverse event of concern. We examined the likelihood of BSE becoming
established in the United States, as well as the incremental
consequences that may occur for every additional case that might be
detected as a result of implementing the proposed rule. As discussed in
the consequences section of the risk assessment, based on the responses
to cases discovered in the United States since the initial finding of
BSE in Canada in 2003, we do not expect additional costs (such as
further closure of export markets or reduction in domestic consumption).
When combined with the expected number of clinical cases, the resulting
risk estimation is negligible, as discussed in the risk estimation
section of the risk assessment. Determining what portion of the finding
of negligible risk might be borne by the U.S. cattle industry, as the
commenter requests, is unnecessary for the purposes of our risk
assessment. Because we have determined the overall risk to be
negligible, we do not consider it warranted to subdivide what is already
a negligible risk in assessing its potential impact on various sectors.

The overall economic consequences of the proposed rule on trade were
addressed by the Preliminary Regulatory Impact Analysis that was
conducted for the proposed rule. That document concluded that, although
larger net welfare benefits may be realized under the scenario of no
restriction by date of birth on live bovine imports, the proposed rule
is preferable because it would pose a lower risk of BSE infectivity
entering the United States via imports of live bovines from Canada. In
response to public comments, the revision of this analysis published
with the final rule has further examined the welfare effects on certain
sub-categories of the cattle industry.

As noted, the risk assessment specifically examines animal health, not
human health. However, there would be no impact of detected cases on
human health, because such animals would be removed from the human food
supply. The risk assessment did, however, note the following and
indicated that additional discussion of the human health aspects were
included in the environmental assessment. "Thus, although human health
is not the focus of this assessment, we note that, even our quantitative
model, which includes multiple sources of risk over-estimation,
indicates that, over the 20 years of the analysis, only 45 cattle oral
infectious dose-50 (ID~50~) units will be available for human exposure."
In comparison, as discussed above, Comer and Huntly (2003) estimated
that 54 million bovine oral ID~50~ units were available for human
consumption in Great Britain from 1980 to 2003. This extremely large
amount of available infectivity has resulted in 165 cases of vCJD
identified in the United Kingdom through April 2007, plus a few
additional cases identified in other countries but attributed to
exposure in the United Kingdom. When compared to the United Kingdom's
BSE experience and the associated estimate of available bovine oral
ID~50~ units, the expected, or average value of 45 cattle oral ID~50~
would result in a miniscule amount of the BSE infective agent that could
possibly be available for potential human exposure in the United States
over a 20-year period (APHIS 2006). The potential for human exposure
under this scenario is estimated at 1,200,000 times less in the United
States than what the United Kingdom experienced during its BSE epidemic.
Whereas potential human exposure to infectivity is expected to be
miniscule and epidemiologically insignificant, exposure (and hence
potential human health impacts) due to detected cases would be
nonexistent; detected cases of BSE are removed from the food supply.

OIE Guidelines

The OIE is recognized by the World Trade Organization (WTO) as the
international organization responsible for development and periodic
review of standards, guidelines, and recommendations with respect to
animal health and zoonoses (diseases that are transmissible from animals
to humans). The OIE guidelines provide a science-based reference
document for international trade in animals and animal products. The OIE
guidelines for trade in terrestrial animals (mammals, birds, and bees)
are detailed in the Terrestrial Animal Health Code (OIE, 2006a). The OIE
guidelines on BSE are contained in Chapter 2.3.13 of the Terrestrial
Animal Health Code and are supplemented by Appendix 3.8.4 of the Code.

Some commenters stated that our proposed rule was inconsistent with OIE
guidelines. We discuss below those areas addressed by the commenters.

[Issue]{.underline}: Several commenters stated that the proposed rule is
inconsistent with OIE guidelines because it did not require--as the
commenters stated OIE guidelines recommend\--that for countries that do
not have an effectively enforced feed ban that is reducing the incidence
of BSE, the vertebrae and all other SRMs be removed from cattle over 12
months of age.

[Response]{.underline}: The OIE-recommended guidelines regarding BSE
contain criteria for categorizing the risk of a country as either
negligible risk, controlled risk, or undetermined risk. The basis for
categorization encompasses several factors, including a risk assessment,
surveillance efforts, regulatory structure for notifiable diseases, and
education and awareness efforts. Canada has an effectively enforced feed
ban. Further, Canada has been categorized by the OIE as controlled risk
(OIE 2007b), rather than as undetermined risk as implied by the
commenters. The OIE guidelines recommend that certain SRMs be removed
from cattle over 30 months of age for exports from countries that are
considered controlled risk, and cattle over 12 months of age for exports
from countries that are considered undetermined risk.

[Issue]{.underline}: Several commenters stated that the proposed rule
did not comply with OIE guidelines for either controlled risk or
undetermined risk countries regarding the birth date of cattle in
relation to the date of effective enforcement of a feed ban. The
commenters stated that the OIE recommends that cattle not be exported
from a country of undetermined risk for BSE, which the commenters stated
Canada qualifies as, unless the cattle were born at least 2 years after
the feed ban was effectively enforced. Nor, said the commenters, did the
proposed rule meet the OIE guidelines that cattle not be exported from a
controlled risk country until after the date a feed ban was effectively
enforced.

[Response]{.underline}: We disagree with the commenters. As noted
previously, the OIE has categorized Canada as controlled risk. Our
proposed changes are consistent with the OIE guidelines for trade in
live animals from a controlled risk region. As part of the risk analysis
that APHIS conducted in conjunction with its January 2005 final rule
that recognized Canada as a BSE minimal-risk region, Number range
CHAPTERAPHIS evaluated a series of measures introduced in Canada to
prevent the feeding of ruminant proteins to ruminant animals. USDA
considered the compliance activities reported by CFIA as well as
epidemiological information in concluding that compliance with the feed
ban was good, and that the feed ban was effectively enforced.

The OIE guidelines do not define how to determine the date the feed ban
was effectively enforced. APHIS identified March 1, 1999, as the date of
effective enforcement of the feed ban in Canada based on a careful
evaluation of the full panoply of features employed by the feed ban and
consideration of regulatory enforcement actions (i.e., a practical
implementation period) and sufficient additional time to allow
previously manufactured feed to cycle through the system.

[Issue]{.underline}: Several commenters stated that APHIS published the
proposed rule despite the fact that Canada does not meet OIE guidelines
for testing for BSE, and requested that APHIS withdraw or delay this
rulemaking until Canada significantly increases its BSE testing. One
commenter stated that, to meet OIE testing guidelines, Canada needs to
test with negative results 187,000 consecutively targeted cattle with a
BSE risk equal to that in the casualty slaughter age between 4 and 7
years, in order to be confident that the BSE prevalence in Canada is not
more than 1 in 100,000. However, said the commenter, Canada tested only
143,528 total cattle in the period from 2004 through February 12, 2007,
with 8 positive cases found during that period.

[Response]{.underline}: We disagree with the conclusions and assertions
of the commenters. The OIE Terrestrial Animal Health Code, 2006,
Appendix 3.8.4, contains guidelines for BSE surveillance. These
guidelines describe a weighted points system for BSE surveillance
samples and suggest total points targets for what is considered as
either Type A or Type B surveillance. As noted in the Code, "The
application of Type A surveillance will allow the detection of BSE
around a design prevalence of at least one case per 100,000 in the adult
cattle population in the country, zone or compartment of concern, at a
confidence level of 95 percent." Based on this definition, we assume the
comments described above refer to Type A surveillance. The points target
for Type A surveillance in a country such as Canada with an adult cattle
population of more than 1,000,000 is 300,000 points, to be obtained over
a 7-year period.

Under the OIE guidelines, specific "point values" are assigned to each
sample, based on the surveillance stream or subpopulation of animals
from which it was collected, as well as the likelihood of detecting
infected cattle in that subpopulation. Table 4, below, outlines the
point values for samples obtained from the different surveillance
streams:

> [Surveillance point values for samples collected\
> from animals in the given subpopulation and age category]{.underline}

  ------------------- ------------- ------------------- -----------------
  Surveillance                                          
  subpopulation                                         

  Routine\            Fallen\       Casualty\           Clinical\
  slaughter           stock         slaughter           suspect

  Age \>1 year and                                      
  \<2 years                                             

  0.01                0.2           0.4                 N/A

  Age \>2 years and                                     
  \<4 years (young                                      
  adult)                                                

  0.1                 0.2           0.4                 260

  Age \>4 years and                                     
  \<7 years (middle                                     
  adult)                                                

  0.2                 0.9           1.6                 750

  Age \>7 years and                                     
  \<9 years (older                                      
  adult)                                                

  0.1                 0.4           0.7                 220

  Age \>9 years                                         
  (aged)                                                

  0.0                 0.1           0.2                 45
  ------------------- ------------- ------------------- -----------------

 

As demonstrated in table 4, a sample from the specific surveillance
subpopulation where BSE is most likely to be detected--i.e., a middle
adult clinical suspect--provides the most surveillance points.
Conversely, a sample from the subpopulation where BSE is least likely to
be detected\--generally routine slaughter--provides the least points.

It appears that the commenter calculated the number of samples necessary
from an assumed surveillance subpopulation. That is, if a country
samples only middle adult casualty slaughter animals at 1.6 points per
sample, it would need to sample 187,000 cattle in this specific
subpopulation to obtain 300,000 points.

However, it is inaccurate to compare such a calculation to Canada's
surveillance efforts.

The commenter referred to surveillance conducted in Canada from 2004
through February 2007--a period of slightly more than 3 years. However,
as noted, the OIE guidelines provide for points targets to be met over a
7-year period. Therefore, a valid comparison of the OIE guidelines and
the testing conducted in Canada would need to be based on surveillance
totals from, e.g., January 2000 through December 2006.

More significantly, the commenter appeared to assume that Canada is
sampling only one specific surveillance stream--casualty slaughter
animals from 4 to 7 years of age. Attachment 1 of the risk assessment
conducted for this rulemaking-- "Estimation of BSE Prevalence in Canada
(APHIS 2006c)"--contains tables that allocate Canadian surveillance
samples into the different surveillance streams. In every year from 1999
through August 2006, animals from three different surveillance
streams--fallen stock, casualty slaughter, and clinical suspect--of all
ages were sampled. Therefore, the points value for each sample will vary
in line with the previously provided table. A summary of OIE points can
be calculated from the information provided. For example, data from
surveillance conducted in Canada in 2005 for only one surveillance
stream--clinical suspect--show that, in that year, 2 clinical suspects
less than 2 years old were sampled (0 points), 43 clinical suspects 2 to
3 years of age were sampled (11,180 points), 120 clinical suspects 4 to
6 years of age were sampled (90,000 points), 68 clinical suspects 7 to 8
years of age were sampled (14,960 points), and 194 clinical suspects
greater than 9 years of age were sampled (8,730 points). Testing of the
194 clinical suspects sampled in 2005 provided a total of 124,870 points
for this 1 surveillance stream in 1 year. The total number of OIE points
accumulated by Canadian surveillance over the 7-year period ending at
August 2006 is 922,176. This far exceeds the OIE point target of 300,000
points for Type A surveillance.

[Issue]{.underline}: Several commenters stated that the proposed rule
did not comply with the OIE guidelines with regard to the importation of
SRMs. The commenters stated that the OIE recommends that SRMs not be
imported for feed or fertilizer and the proposed rule would allow SRMs
to be used for non-ruminant feed and fertilizer.

[Response]{.underline}: The commenters are correct that the OIE
guidelines recommend that certain tissues-- SRMs--should not be traded.
Specifically, the guidelines recommend that SRMs "should not be traded
for the preparation of food, feed, fertilizers, cosmetics,
pharmaceuticals including biologicals, or medical devices." It also
states that "protein products, food, feed, fertilizers, cosmetics,
pharmaceuticals or medical devices prepared using these commodities
(unless covered by other Articles in this Chapter) should also not be
traded." However, the Code also includes guidelines for trade in live
cattle--from which such materials could be derived after export to the
recipient country\--from countries of any risk status, thus creating an
apparent contradiction in recommendations.

We recognized in our risk assessment that SRMs from live cattle imported
under these conditions could enter the U.S. system, similar to SRMs from
U.S. cattle. The assessment acknowledges that SRMs from imported
animals--just as those from domestic animals--can enter the rendering
system in the United States, and the quantitative exposure model in the
risk assessment specifically simulates this situation.

Certain rendered protein products--bone meal, for example--can be
included in fertilizer. However, this is not a common practice in the
United States, as the vast majority of rendered protein products are
sold for use in animal feed. Raw or untreated tissues are not generally
used as fertilizer, and in fact are often prohibited from being spread
on land. Therefore, any consideration of risk from fertilizer would be
an evaluation of the risk of cattle exposure to oral consumption of
fertilizer that contains in part rendered protein.

Our quantitative exposure model evaluates the potential oral exposure of
cattle to feed containing infected rendered protein products. It does
not specifically model potential exposure through fertilizer. However,
it assumes that all rendered ruminant protein products are sold for feed
use. Therefore, any of the infectivity contained in rendered ruminant
protein is simulated through the potential for direct feed
exposure--either through misfeeding, cross-contamination, or poultry
litter. Feed constitutes a more significant pathway than potential
consumption of a component of a fertilizer product after it is spread on
a pasture. Therefore, any potential exposure through fertilizer would be
assumed to be far less than exposure through feed, which is modeled in
the risk assessment.

For the reasons discussed above, we disagree that this rule is
inconsistent with OIE guidelines. In those cases where one might see in
the OIE guidelines an internal contradiction, that contradiction is much
more apparent then real, and we consider this rule to be consistent with
the intent and objectives of the guidelines. Therefore, we are making no
changes based on the comments.

International BSE Classification of Canada and the United States

[Issue]{.underline}: At the time APHIS was accepting public comments on
its January 2007 proposed rule, the OIE was in the process of completing
its evaluation of countries internationally to determine which BSE risk
category would be appropriate to each country evaluated. Several
commenters recommended that our proposed rule be delayed until the OIE
released its determinations. Commenters stated that waiting for release
of the OIE designations would allow the U.S. categorization of BSE
minimal-risk regions to be made consistent with OIE guidelines.
Additionally, stated some commenters, the proposed rule could negatively
influence the OIE's BSE risk categorization of the United States. One
commenter recommended that the rulemaking be postponed until the
European Food Safety Authority (EFSA) announced its BSE risk
categorization of various countries, including Canada.

[Response]{.underline}: Under the OIE risk classification system, a
country can be considered to be "negligible risk," "controlled risk," or
"undetermined risk" with regard to BSE. Based on the risk classification
of a country, the OIE provides guidelines for the safe trade of cattle
and cattle products. As noted above, at the May 2007 annual General
Session of the OIE International Committee, a list of countries
recognized as being BSE controlled risk or negligible risk was
confirmed. Both the United States and Canada were confirmed as BSE
controlled risk countries (OIE 2007b).

Request to Allow Imports from the European Union

[Issue]{.underline}: One commenter requested that APHIS implement OIE
import guidelines regarding BSE or, alternatively, recognize the
European Union as a BSE minimal-risk region.

[Response]{.underline}: As noted above, it is APHIS' intent to develop
rulemaking that would incorporate OIE guidelines.

Commodities Eligible for Importation under this Rule

We proposed to allow the importation, under certain conditions, of live
bovines for any use born on or after a date determined by APHIS to be
the date of effective enforcement of a ruminant-to-ruminant feed ban in
the region of export; blood and blood products derived from bovines; and
casings and part of the small intestine derived from bovines.

Although commenters addressed the provisions of our proposed rule
regarding each of these commodities, the great majority of commenters
focused on the potential importation of live bovines. We discuss below
first the issues raised concerning live bovines, then the commenter
issues regarding bovine blood and blood products and then those
regarding the small intestine, including casings derived from the small
intestine.

Those commenters who addressed the importation of live bovines discussed
which bovines should be eligible for importation with regard to usage
and date of birth, identification of the animals, verification that the
animals are imported in compliance with the regulations, sealing of
means of conveyance carrying the animals, and monitoring of imported
cattle once in the United States.

Live Bovines

[Date of Birth Eligibility]{.underline}

[Issue]{.underline}: A number of commenters questioned how it will be
determined whether a bovine intended for importation from Canada was
born on or after March 1, 1999. The commenters stated that it will not
be feasible to use dentition to determine the age of imported bovines,
particularly in animals over 4 years of age. In many cases, said the
commenters, Canadian veterinarians would have to accept producers'
statements as the only source of verification of the age of the cattle.
The commenters stated that the Canadian national cattle identification
program was not made mandatory until 2002, and that it is still not
mandatory in Canada to enter the entire birth date information into the
database. Several commenters stated that it is nearly impossible to
verify the actual age of older Canadian cattle, because the Canadian
animal identification requirement applies only to cattle that leave the
farm.

[Response]{.underline}: The provisions in § 93.436(a)(3) and (b)(4) of
this rule provide that bovines are not eligible for importation from a
BSE minimal-risk region unless they are accompanied by certification
that, among other things, the animals were born on or after March 1,
1999. As provided in § 93.405(a), such certification must be issued by a
full-time salaried veterinary officer of the national government of the
region of origin, or by a veterinarian designated by the national
government of the region of origin and endorsed by a full-time salaried
veterinary officer of the national government of the region of origin,
representing that the veterinarian issuing the certificate was
authorized to do so. It is incumbent upon the individual issuing or
endorsing the certificate to ascertain whether an animal's date of birth
can be determined with the accuracy necessary for such certification. As
the commenters imply, dentition can be used to adequately determine the
birth date of animals below about 4 years of age. Specifically, if an
animal does not have all of its permanent teeth erupted, it is less than
4-5 years of age and therefore was born after March 1, 1999. However, if
all permanent teeth are present and in wear, dentition does not provide
an estimate of birth date specific enough to support certification that
the animal was born on or after March 1, 1999.

We recognize that Canada's mandatory identification requirements did not
take effect until 2002, and also that these requirements do not mandate
that birth date information be entered into the database. However, we
also note that provisions have been established for birth date
information to be entered at any time, with appropriate documentation
available to support such information. The number of these
age-verification entries continues to increase, with over 3.5 million
birth dates submitted to the Canadian Cattle Identification Agency
(CCIA) database by late 2006 (CCIA, 2006). We recognize that it is
likely that owners of some bovines may not be able to provide the
documentation regarding an animal's birth date that is necessary for the
required certification. In those cases, even if an animal was born on or
after March 1, 1999, the animal would not be eligible for importation
into the United States.

[Permanent Identification of Country of Origin]{.underline}

[Issue]{.underline}: Under the provisions of the proposed rule, cattle
imported from Canada for other than immediate slaughter would have to be
permanently and humanely identified before arrival at the port of entry
with a distinct and legible mark identifying the exporting country. As
proposed, acceptable means of permanent identification would include a
mark applied with a freeze brand, hot iron, or other method; a tattoo
applied to the inside of one ear of the animal, or other means of
permanent identification if deemed adequate by the Administrator. For
bovines imported from Canada, a brand would have to read "CN" and a
tattoo would have to read "CAN."

A number of commenters addressed the issue of permanent identification
of bovines as to the country of export. Several commenters recommended
that the regulations require that such identification be applied with a
hot-iron brand, and that a "hair brand" not be considered acceptable
means of identification.

[Response]{.underline}: A hair brand would not meet the requirements of
the regulations, in that it could not be depended upon to provide
permanent identification of the animal's country of export. However, we
do not consider it necessary to list in the regulations all the forms of
identification that would not be considered adequate to meet the intent
of the regulations.

[Issue]{.underline}: Several commenters addressed the requirement for
permanent identification of the country of export as it would apply to
bison. The commenters stated that a brand on the right hip or an ear
tattoo are not the preferred alternatives, because of unnecessary stress
on the animals and handlers. The commenters stated that a more humane
means of bison identification, such as electronic tags (dual tags if
necessary), could readily meet the need of tracking the origin of the
bison and the movement patterns in Canada and the United States.

[Response]{.underline}: The type of identification recommended by the
commenters would provide the individual unique identification required
by the regulations to facilitate traceback of the animal. Although the
current regulations in § 93.436 require that such identification be
provided by an official eartag of the country of origin, in August 2006
we have proposed to allow for forms of individual identification other
than eartags[^10].

However, we consider it necessary that the animal also be marked in some
permanent and easily visible way as having been imported from a BSE
minimal-risk region. In the case of bison from Canada, this would be a
brand or other permanent "CN" mark on the right hip, an ear tattoo with
the letters "CAN," or some other means of permanent identification if
deemed adequate by the Administrator to humanely identify the animal in
a distinct and legible way as having been imported from the BSE
minimal-risk exporting region. The type of identification recommended by
the commenters would not allow for easily visible identification of the
country of origin.

[Issue]{.underline}: A number of commenters disagreed that an ear tattoo
would be an effective permanent means of identifying the country of
origin of a bovine. The commenters stated that tattoos applied inside an
animal's ear frequently become illegible after a period of time, and
further, that tattoos may not be visible without catching the animal and
examining it in a chute or

other restraint system. The commenters recommended that, if tattoos are
allowed, the regulations require that animals so identified be
restrained and examined in the country of export to confirm that the
tattoo is legible and permanent, and that such confirmation be indicated
on signed documentation accompanying the animals to the United States.

[Response]{.underline}: As discussed in our proposed rule, we agree that
tattoos might not be the most readily visible means of identification of
live animals in groups of animals. However, the purpose of requiring
permanent identification of the animal's country of export is to
expedite initial identification of an animal's country of export in the
event the animal is diagnosed with BSE. Such a diagnosis cannot be
confirmed on a live animal. Once the animal has been euthanized or has
otherwise died, an ear tattoo will be an effective means of
identification.

[Issue]{.underline}: Several commenters stated that the APHIS
Administrator should be required, upon request, to evaluate alternative
means of permanent identification and, if they are functionally
equivalent to the existing methods, be required to approve them.

[Response]{.underline}: Paragraph (b)(2)(iii) of § 93.436( of this rule
provides for such approval by the Administrator of alternative means of
permanent identification.

[Issue]{.underline}: Several commenters recommended that a hot-iron
brand on the right hip be required on all cattle crossing the U.S.
border.

[Response]{.underline}: As noted above, we proposed to require a
permanent mark identifying the animal's country of origin only for
cattle imported from a BSE minimal-risk region for other than immediate
slaughter. We do not consider it necessary for cattle imported from a
BSE minimal-risk region for immediate slaughter to be permanently
identified as to country of export. Such animals will be moved to the
slaughtering establishment in a group and the movement documentation
accompanying such animals will be sufficient to provide ready
identification of the animals' country of origin.

[Issue]{.underline}: One commenter recommended that the regulations
require that each animal entering the United States have permanent
identification by which the animal could be traced back to its farm of
origin.

[Response]{.underline}: The commenter's recommendation refers to two
types of identification that are already addressed by this rule. In this
rule, paragraphs (a)(2) and (b)(3) of § 93.436 already require each
bovine imported into the United States from a BSE minimal-risk region to
be officially identified with an official eartag that provides unique
individual identification that is traceable to the premises of origin of
the animal. (As noted above, we have proposed to allow for forms of
individual identification other than eartags). This rule requires,
further, that no person may alter, deface, remove, or otherwise tamper
with the official identification while the animal is in the United
States or moving into or through the United States, except that the
identification may be removed at the time of slaughter.

In addition to the individual identification that allows for traceback
to the animal's premises of origin, the regulations also require that
all cattle imported from a BSE minimal-risk region be permanently
identified as to country of origin as described above. As discussed
above, we do not consider it necessary for bovines imported for
immediate slaughter to have this additional permanent identification as
to country of origin.

[Issue]{.underline}: One commenter requested that APHIS provide details
of its protocol and criteria for ensuring that all live cattle imported
from Canada have permanent identification maintainable until harvest.

[Response]{.underline}: In § 93.436(b) of this rule, we give examples of
means of permanent identification that would be considered acceptable.
Acceptable types of permanent identification include a mark applied with
a freeze brand, hot iron, or other method, or a tattoo applied to the
inside of one ear of the animal. Any other types of permanent
identification approved by the Administrator would have to be as
effective as the examples cited in providing a permanent, distinct, and
legible mark.

[Individual Identification of Bovines]{.underline}

[Issue]{.underline}: One commenter recommended that all cattle imported
from Canada that are not moved directly to slaughter be required to be
identified by a low frequency ISO compliant radio frequency tag placed
in the left ear.

[Response]{.underline}: As noted above, we have proposed to provide for
forms of individual identification other than eartags, provided the
identification can be used to trace the animal back to its premises of
origin. We do not consider it necessary to mandate the use of any
particular technology for meeting that criterion.

[Issue]{.underline}: One commenter recommended that the regulations
require that animals intended for importation into the United States
from a country with a verified case of BSE be enrolled in a third-party
source and age identification program that uses individual electronic
identification devices.

[Response]{.underline}: With regard to bovines intended for importation
into the United States from a BSE minimal-risk region, the regulations
already require that such animals be individually identified with unique
identification that enables traceback to the premises of origin of the
animal. Additionally, under this rule, bovines imported from Canada must
be accompanied by certification issued or endorsed by the Canadian
Government that the animals were born on or after March 1, 1999. After
having evaluated the veterinary infrastructure of countries wishing to
import animals and animal products into the United States, APHIS accepts
official certification from those countries that commodities intended
for export to the United States are in compliance with U.S. import
regulations, just as U.S. trading partners rely on official U.S.
certification that products exported from the United States meet the
recipient country's requirements.

[Sealing of Means of Conveyance]{.underline}

[Issue]{.underline}: The regulations for importing live bovines from BSE
minimal-risk regions have required that the bovines be imported in a
means of conveyance sealed in the region of origin with seals of the
national government of the region of origin. In our proposed rule, we
proposed to remove the requirement that bovines imported into the United
States from BSE minimal-risk regions for other than immediate slaughter
enter the country in sealed conveyances. We additionally proposed to
remove the requirement that means of conveyance carrying bovines into
the United States from minimal-risk regions for immediate slaughter be
sealed in the region of export and to require instead that means of
conveyance carrying bovines into the United States from Canada be sealed
at the U.S. port of entry with seals of the U.S. Government.

Several commenters specifically supported the proposed change to require
sealing of means of conveyance at the port of entry, rather than in the
country of export.

One commenter stated that the proposed change to require sealing at the
port of entry would allow APHIS less oversight of shipments and less
opportunity to ensure that each animal in the shipment is accurately
identified and of the appropriate age.

Several commenters recommended that APHIS specify which country or
agency will be responsible for sealing a means of conveyance at the port
of entry.

[Response]{.underline}: We disagree that requiring sealing of means of
conveyance at the port of entry will allow APHIS less oversight of
shipments or cause decreased ability to ensure that the animals are
being shipped in compliance with the regulations. The primary
verification that the animals meet the requirements of the regulations
will remain as it has been--i.e., certification by the country of export
that the requirements of the regulations have been met.

However, we believe it is necessary to continue to require sealing of
means of conveyance transporting bovines from Canada to immediate
slaughter as a mitigative measure against diseases other than BSE.
Cattle imported from Canada for immediate slaughter are not subject to
tuberculosis and brucellosis testing requirements that would otherwise
be applied to animals imported into the United States. Therefore, we
would continue to require that such cattle be moved directly to
slaughter in a sealed means of conveyance. (APHIS had been requiring
such sealing at the port of entry even before our November 2003 proposal
regarding BSE. However, the requirement for sealing was being done as
APHIS policy, and was not specified in the regulations.)

As the commenters noted, this rule will remove the requirement that the
sealing of the means of conveyance be done in the region of export. That
requirement was included in the January 2005 final rule in response to
comments from members of the public who expressed concern that requiring
sealing at the port of entry could be harmful to the welfare and quality
of the animals, due to delays at the port of entry. Under the provisions
of this proposed rule, however, we do not expect undue delays of
shipments at the port of entry. When a means of conveyance carrying
bovines for immediate slaughter arrives at the U.S. port of entry, APHIS
inspectors would confirm that the animals are as described on the
certificate that must accompany the animals being imported, but
generally would not require that the animals be offloaded from the means
of conveyance. Therefore, requiring that the sealing of the means of
conveyance take place at the port of entry would not cause measurable
delay of the shipment. Further, sealing at the port of entry rather than
in the region of export will reduce the time the animals will need to be
contained in a sealed means of conveyance and reduce the likelihood that
a seal will need to be broken between the time it is applied and the
arrival of the animals at a slaughtering establishment.

We do not consider it necessary to specify which agency will seal means
of conveyance at the port of entry with seals of the U.S. Government. In
each case, the means of conveyance will be sealed by an APHIS employee.

[Movement of Cattle for Other than Immediate Slaughter]{.underline}

[Issue]{.underline}: Some commenters who opposed allowing the
importation from Canada of bovines 30 months of age or older urged the
continuation of the current restrictions on movement in the United
States of cattle moved to a feedlot, as well as continuation of the
current requirements regarding sealing of conveyances carrying such
animals and the requirement that the animals be accompanied by an
APHIS-issued movement permit.

[Response]{.underline}: The sealing and movement restrictions referred
to by the commenters were included in our January 2005 final rule to
ensure that live bovines from BSE minimal-risk regions were imported and
slaughtered before the age of 30 months. At the time we published that
final rule, we had not formally assessed the disease risk of allowing
the importation of live bovines 30 months of age or older from BSE
minimal-risk regions. Since that time, we have conducted an assessment
of the risk of such importations, which we discussed in our January 2007
proposed rule and made available with that proposed rule. Our risk
assessment indicates that there is a negligible likelihood of U.S.
cattle being exposed to BSE and of BSE becoming established in the U.S.
cattle population as a consequence of this rule.

Under this final rule, bovines from a BSE minimal-risk region will not
have to be imported and slaughtered before they are 30 months of age.
Therefore, it is not necessary to retain provisions in the regulations
that were designed to help ensure that bovines imported from a BSE
minimal-risk region are moved directly to a feedlot and then to
slaughter as an easily identifiable group.

[Request to Exempt Cattle for Immediate Slaughter from Birth Date
Requirement]{.underline}

We proposed to require that live bovines imported from BSE minimal-risk
regions have been born on or after the date recognized by APHIS as the
date of effective implementation of a ruminant-to-ruminant feed ban in
the region of export. We proposed to apply this requirement to all
bovines imported from a BSE minimal-risk region, whether they are
imported for immediate slaughter or for some other usage.

[Issue]{.underline}: A number of commenters stated that the eligibility
of cattle to be imported for immediate slaughter should not be dependent
on when the animals were born. The commenters stated that such animals
do not present a BSE risk justifying such a condition, and that APHIS
has not demonstrated such a risk. Several commenters stated that the
risk assessment APHIS conducted for the proposed rule is based on the
premise that slaughter cattle will be eligible for importation from
Canada no matter what their date of birth.

Additionally, commenters argued that requiring cattle moving directly to
slaughter to have been born on or after March 1, 1999, would be
inconsistent with the January 2005 final rule, which provided for the
importation of beef derived from cattle of any age if requirements for
the removal of SRMs are met. The commenters stated that allowing the
importation of beef from cattle of any age while prohibiting the
importation of cattle born before March 1, 1999, suggests that SRM
removal can be accomplished more effectively in a foreign country than
in the United States.

Commenters stated further that scientific evidence overwhelmingly
demonstrates that the safety of food products derived from cattle is not
dependent on the age of the animal, but on whether SRMs have been
removed and disposed of. The commenters stated that complete control of
cattle imported from BSE minimal-risk regions can be assured by
requiring movement under Government seal, as we proposed. As an
additional safeguard, stated the commenters, USDA regulations require
that if an animal showing clinical signs of BSE risk is tested for the
disease at slaughter, the carcass and parts derived from the animal
cannot enter the food supply unless the animal tests negative for BSE.

[Response]{.underline}: The commenters who recommended allowing the
importation of cattle of any age from BSE minimal-risk regions,
regardless of date of birth, raised several distinct issues in support
of their recommendations. We agree with the commenters who stated that
the removal and disposal of SRMs is the key factor in the food safety of
products from bovines used for human consumption. However, the risk
assessment conducted for the proposed rule specifically addressed the
risk to animal health. The risk of transmission to U.S. cattle occurs
when infectious tissues---most likely SRMs---inadvertently and/or in
contradiction to U.S. feed regulations are rendered and included in
ruminant feed and fed back to cattle. The risk of BSE-infected SRMs
being present in the United States, while minimal, might be increased to
some extent if cattle from BSE minimal-risk regions were allowed to be
imported for immediate slaughter regardless of date of birth. The
commenters are incorrect that our risk assessment did not take into
account the date of birth of slaughter cattle. As described in the risk
assessment, the requirement that animals for import be born after a
certain date is one mitigation step that helps reduce the risk that
infected animals will be imported, and therefore helps reduce the
possibility that their SRMs will be incorporated into the ruminant feed
chain in the United States.

[Request for Restrictions on Use of Imported Cattle]{.underline}

[Issue]{.underline}: As discussed above, we proposed to allow the
importation of bovines from BSE minimal-risk regions for any use,
provided the animals were born on or after the date recognized by APHIS
as the date of effective implementation of a ruminant-to-ruminant feed
ban in the region of export. This provision allows bovines to be
imported for immediate slaughter or for some other usage, such as
breeding or feeding and then slaughter. It differs from the regulations,
that have been in place, which have limited the importation of bovines
from BSE minimal-risk regions according to both the age of the animal
and the intended usage of the animal in the United States (only those
animals moved to immediate slaughter, or to one feedlot and then
directly to slaughter, have been eligible for importation).

A number of commenters opposed the proposed removal of restrictions on
how cattle imported from BSE minimal-risk regions may be used. Although
most of these commenters did not object to the importation of cattle
born on or after the date of effective implementation of a feed ban if
the cattle were moved in a sealed means of conveyance directly to
immediate slaughter, or to a single feedlot and then to slaughter, they
expressed concern regarding the potential importation of cattle intended
for breeding or as replacement animals in dairy herds.

Some of the commenters stated that BSE-infected cattle imported from BSE
minimal-risk regions for breeding or herd replacement may not show
clinical symptoms of BSE infection for many years, allowing BSE to
incubate in U.S. cattle herds, and that an outbreak of BSE in the United
States due to such imported cattle would be devastating to the U.S.
dairy industry.

A commenter stated that, at the 95th percentile confidence for model
simulations of

Canadian BSE prevalence in the APHIS risk assessment, 180 new BSE cases
occur over 20 years, and that 90 percent of these new cases would be
expected to be in animals already infected with BSE when imported from
Canada. Therefore, stated the commenter, almost all new cases of BSE
expected in the United States will be from BSE-infected cattle imported
from Canada and that any U.S. born cases will be the result of importing
breeding animals. Commenters stated further that, according to USDA,
younger cattle are more susceptible to BSE and require less
BSE-contaminated feed to become infected, and that since it is likely
that younger cattle will be the ones imported for breeding or
replacement purposes, the chance of introducing BSE into the United
States from Canada is magnified.

Commenters stated that, although a series of risk mitigations are in
place, these are different when it comes to animals imported for
breeding versus those going directly to slaughter.

[Response]{.underline}: The risk of BSE transmission to U.S. cattle
occurs when infectious tissues\-- most likely SRMs\--inadvertently
and/or in contravention of U.S. feed regulations are rendered and
included in ruminant feed and fed back to cattle. This risk is the same
whether the animals were imported for immediate slaughter or were
imported for breeding and are slaughtered later, and the series of risk
mitigations or steps that prevent the transmission of BSE are the same,
regardless of the purpose of the imported animal. While it is true that
the level of infectivity in a BSE-infected bovine has been shown to
increase as an animal ages, the amount of infectivity in, for example, a
7-year-old cow infected at 1 year of age would be the same at slaughter
whether it was imported as a 1-year-old infected cow and used for
breeding in the United States until it was 7 years old, or whether it
was imported as a 7-year-old cull cow for immediate slaughter.

The U.S. feed ban prohibits the use of most mammalian protein in
ruminant feed. The mammalian protein referenced could be derived from
slaughterhouse offal--including SRMs--from animals imported for
immediate slaughter, or from slaughterhouse offal derived from animals
imported for breeding that have reached the end of their useful life in
the United States. The protein could also be derived from the carcass of
an animal imported for breeding that died other than by slaughter. The
feed restrictions on the use of rendered protein derived from any of
those scenarios would be exactly the same.

The commenters are correct that BSE-infected cattle may not show
clinical signs for many years, due to the long incubation period for
this disease as explained in the risk assessment. However, as long as
the animals were born on or after March 1, 1999, the likelihood of any
individual animal having been exposed to and infected with BSE, and
subsequently releasing BSE infectivity into the United States, is
negligible. There is no expected difference in the likelihood of BSE
infection in two animals born on or after March 1, 1999, and raised in
Canada, one imported into the United States as a young animal for
breeding purposes and slaughtered at the end of its productive period,
and one used as a breeding animal in Canada, and exported for immediate
slaughter in the United States at the end of its productive period.
Furthermore, BSE is not a contagious disease and does not spread by
casual animal contact. Therefore, while an individual animal in a herd
may be infected, that does not mean that other animals in that herd are
at risk of becoming infected via spread from that animal.

Regarding the commenter's reference to our model simulation, we believe
the commenter did not correctly interpret the results from the
simulation. For sensitivity analysis 5 (pessimistic value for assumed
BSE prevalence in Canada), the 95th percentile value for total infected
cattle in the United States over a 20-year period amounts to 180
animals. The 95th percentile value for endogenous BSE-infected cattle
over that period is 75, suggesting that 180-75 = 105 BSE cases are
imported over that period, not 160 animals, as suggested by the
commenter[^11].

Also, although our quantitative exposure models project that new cases
of BSE in the United States would be transmissions secondary to the
importation of infected cattle from Canada, we note that the United
States has identified two indigenous cases of BSE. Given this fact, one
cannot categorically state that any such cases identified "will be from
BSE-infected cattle directly imported from Canada."

We explained in the risk assessment that there is an apparent
age-susceptibility in regard to BSE, specifically noting that
susceptibility in cattle declines with age. However, we disagree with
the commenter's conclusion that, based on this fact, importing younger
animals-- specifically breeding animals as they are generally imported
at less than 2 years of age\--presents a magnified risk. Susceptibility
is not the same as likelihood of being infected. As an example, the
commenter's conclusion means that any animal born within the past 2
years would have a higher likelihood of being infected than an animal
born 6 years ago. Given equal exposure, a younger animal may be more
susceptible to infection. However, as noted in the risk assessment, the
overall prevalence in Canada is extremely low and BSE controls such as
the feed ban are effectively enforced, so the chance that a given animal
of any age had been exposed to an adequate amount of infectivity at a
susceptible age (i.e., the likelihood of being infected) is extremely
small.

Monitoring of Imported Cattle

[Issue]{.underline}: A number of commenters expressed concern that the
proposed rule did not explicitly provide for a system to monitor the
movement in the United States of cattle imported from BSE minimal-risk
regions, specifically Canada. Some commenters limited their discussion
to cattle 30 months of age or older. Commenters recommended that the
regulations include an accounting procedure capable of monitoring the
movement of imported animals from entry into the United States until
slaughter, including changes in ownership of the animals.

[Response]{.underline}: The regulations currently include movement
conditions for bovines from BSE minimal-risk regions imported for other
than immediate slaughter. Such bovines must be imported in a sealed
conveyance and be moved directly from the port of entry to a feedlot
identified on APHIS Form VS 17-130 or other movement documentation
required by the regulations. The APHIS Form VS 17-130 or other movement
documentation must identify the physical location of the feedlot, the
individual responsible for the movement of the animals, and the
individual identification of each animal. The bovines must remain at the
feedlot until transported from the feedlot in sealed conveyances to a
recognized slaughtering establishment for slaughter. While being moved
to slaughter, the bovines must be accompanied by APHIS Form VS 1-27 or
other movement documentation deemed acceptable by the Administrator,
which must identify the physical location of the recognized slaughtering
establishment, the individual responsible for the movement of the
animals, and the individual identification of each animal.

In our January 2007 proposed rule, however, we proposed to remove each
of the above requirements from the regulations. The requirements
described above were implemented solely to help ensure that cattle
imported from BSE minimal-risk regions were slaughtered at less than 30
months of age--i.e., to preclude any diversion of the bovines to other
uses in the United States that would result in slaughter at some age 30
months or older.

We did not attempt, for that rulemaking, to assess the BSE risk
associated with the importation of live bovines 30 months of age or
older from a BSE minimal-risk region. However, as discussed in our
January 2007 proposed rule and in this final rule, for this rulemaking
we did assess the BSE risk associated with the importation of such
animals, and concluded that the resulting BSE risk from the importation
from Canada of bovines born on or after March 1, 1999--whether or not
the bovines are 30 months of age or older when imported and
slaughtered\--would be negligible. Therefore, in our January 2007
proposed rule, we proposed to remove the requirement in § 93.436(a)(1)
of the current regulations that live bovines imported from BSE
minimal-risk regions be less than 30 months of age when imported into
the United States and when slaughtered.

With the removal of the less-than-30-month age restriction on the
importation of bovines from BSE minimal-risk region, any cattle imported
from Canada--once certification has been presented to APHIS that the
animals were born on or after March 1, 1999--will be able to be moved
and handled in the United States in the same way as U.S.-born cattle.

Scientific evidence strongly indicates that BSE, unlike most
transmissible diseases of cattle, is not transmitted from live animal to
live animal. BSE is not a contagious disease and, therefore, is not
spread through casual contact between animals. Scientists believe that
the primary route of transmission requires that cattle ingest feed that
has been contaminated with a sufficient amount of tissue from an
infected animal. Therefore, even a BSE-infected bovine poses no BSE risk
to other bovines unless those other bovines are fed BSE-contaminated
materials from the infected animal. This route of transmission can be
prevented by excluding potentially contaminated materials from ruminant
feed, as is required in the United States. If a bovine imported from a
BSE minimal-risk region were diagnosed as being infected with the
disease, from a biosecurity standpoint, it would not be necessary to
know its record of movement while in the United States. However, we
would proceed to trace the bovine back to its herd of origin, in order
to identify birth cohorts of the animal. Traceback to the animal's
premises of origin would be facilitated by the animal's unique
individual identification, which is required under the current
regulations and continues to be required by this rule, and which must be
traceable to the premises of origin of the animal.

[Issue]{.underline}: Several commenters stated that imports of bovines
under the proposed rule should not be allowed until a mandatory cattle
and premises identification program is implemented throughout the United
States. At the minimum, stated one commenter, USDA should amend the
National Animal Identification System policy to allow for and integrate
with mandatory identification when required for animal health programs.

[Response]{.underline}: As discussed in the preceding response, one of
the requirements for the importation of bovines from BSE minimal-risk
regions is that each animal have unique individual identification that
is not removed from the animal, except at slaughter. Such identification
is in addition to any cattle or premises identification that might be
carried out under the U.S. national animal identification system, and
would facilitate tracing an imported bovine that is determined to be
infected with BSE to its herd of origin.

For the reasons discussed above, we are making no changes based on the
comments regarding the monitoring and identification of cattle imported
into the United States from a BSE minimal-risk region.

Feed Cohorts of BSE-Infected Animals

[Issue]{.underline}: Several commenters stated that the regulations
should specifically prohibit the importation from BSE minimal-risk
regions of feed cohorts of BSE-infected cattle.

[Response]{.underline}: We do not consider it necessary to add such a
provision to the regulations and are making no changes based on the
comments. Our definition of a BSE minimal-risk region in § 94.0 of the
regulations includes a requirement that such regions conduct an
epidemiological investigation following detection of BSE sufficient to
confirm the adequacy of measures to prevent the further introduction or
spread of BSE, and continue to take such measures. We described such
investigations in our January 2005 final rule, as well as in the
proposed rule and the risk analysis for that rulemaking. This
description noted that CFIA conducts comprehensive epidemiological
investigations, and one component of these investigations is to trace
feed cohorts of confirmed BSE-positive cattle, in accordance with OIE
guidelines. As a result of these traces, feed cohorts that remain alive
are euthanized and tested for BSE. Therefore, since such animals would
be euthanized, there is no need to specifically prohibit their
importation.

Maternal Transmission of BSE

[Issue]{.underline}: One commenter stated that APHIS' policy of
destroying progeny of BSE-positive cows, in accordance with OIE
guidelines, demonstrates that APHIS acknowledges there is some risk of
maternal transmission of BSE. The commenter expressed the opinion that
APHIS' conclusion expressed in the proposed rule that infectivity is
unlikely to localize to the fetal blood is based on scant scientific
evidence that remains equivocal. The commenter stated that APHIS does
not prescribe any action to mitigate the additional risk pathway of the
importation of pregnant cattle and fetuses from pregnant cattle.

[Response]{.underline}: We disagree with the commenter and are making no
changes based on the comment. In the proposed rule, we pointed out that,
based on scientific and epidemiological data, maternal transmission of
BSE is unlikely to occur at any appreciable level. In fact, maternal
transmission can be ruled out in the majority of the cases born after
the 1996 ban in the United Kingdom of all animal protein from livestock
feed (DEFRA 2007b). Additionally, modeling studies using data obtained
from the United Kingdom epidemic show that even if maternal transmission
occurred at very small levels, it could not sustain an epidemic.

The commenter states that the OIE continues to recognize the risk of
maternal transmission. However, we note that the 2006 OIE guidelines
contain no specific recommendations regarding the destruction of
offspring of infected animals as part of an epidemiological
investigation. These recommendations were removed after recognition that
the possibility of maternal transmission is very low. In addition, the
2006 guidelines with regard to trade from controlled risk regions for
BSE contain no specific restrictions regarding progeny of positive
animals. While the 2006 guidelines did contain a restriction for progeny
of positive animals with regard to trade with undetermined risk regions
(i.e., "cattle selected for export\...are not the progeny of BSE suspect
or confirmed females"), this reference was removed in the 2007 OIE
general session. Therefore, all restrictions on the trade in progeny of
BSE-positive animals have been removed from the current OIE guidelines.
APHIS believes the weight of the scientific information and scientific
consensus reflected in the OIE international guidelines support the
conclusion that maternal transmission of BSE is unlikely to occur at any
appreciable level, and that specific regulatory measures are not
necessary or warranted.

SRM Removal

[Issue]{.underline}: One commenter stated that USDA regulations should
require the removal of all SRMs from cattle imported from Canada at 30
months of age or older.

[Response]{.underline}: FSIS regulations require the removal of all SRMs
from cattle slaughtered in the United States, regardless of the country
of origin of the cattle. Therefore, the action requested by the
commenter is already included as a requirement in USDA regulations for
any cattle 30 months of age or older that would be imported from Canada.

Ports of Entry

Some commenters addressed the regulations that have required that live
bovines imported from Canada enter the United States only through ports
of entries listed as authorized ports in

§ 93.403 of the regulations. Some commenters expressed concern about the
ability of the ports to handle shipments from Canada, while other
commenters requested that the list of authorized ports be expanded.

[Authorized Ports of Entry]{.underline}

[Issue]{.underline}: Several commenters stated that the proposed rule
should not be implemented until sufficient personnel, quarantine
facilities, and testing capabilities are available at the U.S.-Canadian
border to monitor imports and detect suspect animals.

[Response]{.underline}: APHIS regulations require that live ruminants
imported into the United States from Canada come through the border
ports listed in § 93.403(b) (except as provided in special cases in §
93.403(f)). APHIS lists ports in § 93.403(b) only after determining that
they have sufficient personnel and facilities to accommodate
importations of live animals from Canada.

[Border Ports in Alaska]{.underline}

[Issue]{.underline}: Several commenters noted that none of the border
ports listed in § 93.403(b) are on the border of Alaska and Canada and
requested that the regulations provide for such a border port.

[Response]{.underline}: The volume and frequency of live animal imports
though the ports listed in

§ 93.403(b) justifies making Federal inspectors available on a regular
basis. As noted above,

§ 93.403(f) of the regulations provides for the designation by the
Administrator of other ports in special cases as necessary.

Historically, the volume and frequency of imports of ruminants from
Canada directly into Alaska has not made it resource-effective to
provide the Federal inspectors for such importations on a regular basis.
Imports of bovines from Canada into Alaska under this rule will continue
to be handled by special arrangements on an as-needed basis.

For the reasons discussed above, we are making no changes based on the
comments.

Blood and Blood Products

Paragraph (a) of § 94.18 lists regions from which imports of ruminants
and ruminant products are prohibited or restricted because of BSE. Those
regions in which BSE is known to exist are listed in § 94.18(a)(1);
those regions that present an undue risk of introducing BSE into the
United States because their import requirements are less restrictive
than those that would be acceptable for import into the United States
and/or because the regions have inadequate surveillance are listed in §
94.18(a)(2); those regions that present a minimal risk of introducing
BSE into the United States via live ruminants and ruminant products and
byproducts are listed in § 94.18(a)(3).

The requirements for the importation of blood and blood products from
BSE minimal-risk regions have been the same as the requirements for
importation of blood and blood products from other regions listed in §
94.18(a)--only serum and serum albumin have been eligible for
importation. In our January 2007 proposal, we proposed to allow the
importation of blood and additional blood products from BSE minimal-risk
regions provided certain conditions were met regarding the health of the
animal from which the blood or blood products were derived, or\--in the
case of blood collected from a fetal calf\--the health of the dam; the
method of slaughter; the process of collection of blood; and
certification of compliance with the regulations.

We received comments regarding the importation of bovine blood and blood
products from BSE minimal-risk regions. Most of the commenters
addressing this topic expressed concern regarding such importation,
while others sought clarification as to allowable methods of collection
of bovine blood intended for importation as blood or blood products into
the United States.

[Issue]{.underline}: Several commenters stated that the regulations
should not allow the importation of cattle blood for use as animal feed.
One commenter stated that a number of studies have shown prion
transmission through blood, that there is evidence that TSE diseases are
capable of crossing the species barrier, that the EU has banned all
animal protein except meat and eggs from use in feed for any animal that
enters the human food chain and the United States should do the same,
and that what the commenter referred to as the EC report on the
assessment of BSE risk in the United States specifically condemned the
practice of intraspecies recycling of ruminant blood and blood products.
Some commenters specifically expressed concern about the potential use
of blood protein as a milk replacement or as animal feed, and the
production of spray-dried blood plasma or blood meal for use in feed.

[Response]{.underline}: As we discussed in detail in our risk
assessment, in experiments examining tissues from BSE-infected cattle,
no BSE infectivity was demonstrated in cattle blood or any tested
derivatives (EC SSC 2002). Also as discussed in our risk assessment, the
Scientific Steering Committee of the European Commission concluded that
the finding of BSE infectivity in the blood of sheep could not be
extrapolated to BSE in cattle (EC SSC 2002a). Further, the available
evidence indicates that TSEs in other species, when found in the blood,
are localized primarily to the cellular fractions. Although BSE has
never been detected in any bovine blood or blood product, we expect even
further risk reduction after removal of cellular fractions in the
preparation of the most commonly imported bovine blood commodities. In
addition, the mitigations included in this rule help prevent
contamination of bovine blood and blood products with infectious tissues
such as SRMs. Thus, there is no reason to prohibit the importation of
cattle blood for use in animal feed. (We note that FDA has
responsibility for determining which materials may be used in animal
feed.)

Finally, as discussed in our risk assessment, infection with BSE via the
oral route is less efficient than by subcutaneous or intramuscular
injection. Given that we have concluded that there is a negligible risk
for exposure to bovine blood and blood products via the injectable
route, the same conclusion holds for exposure via the oral route.

[Issue]{.underline}: One commenter cited a report (Castilla
[et]{.underline} [al]{.underline}., 2005) regarding the first detection
of scrapie prions in hamster blood, using a biochemical technique called
protein misfolding cyclic amplification (PMCA).

[Response]{.underline}: APHIS is making no changes in response to this
comment. The study cited by the commenter does not present evidence
about BSE infectivity in bovine blood. The cited study presents a
technique for the rapid amplification and detection of scrapie prions in
hamster blood. The study is notable because the novel detection method
could be useful in the development of diagnostic methods. Previously,
only the prion concentration in the brain and some lymphoid tissues was
high enough for detection by routine biochemical detection.

However, APHIS does not assume that finding the presence of abnormal
prion protein in a given tissue, especially at low levels, is equivalent
to demonstrating infectivity of the tissue. APHIS notes that there are
very sensitive bioassays in live animals for determining the infectivity
of various tissues, such as that for BSE using intracerebral inoculation
of transgenic mice expressing the bovine PrP. These methods, recently
used by authors of the cited study and others (Espinosa [et]{.underline}
[al]{.underline}., 2007; EC SSC 2002) have reliably determined that,
unlike sheep, mouse, and hamster blood, bovine blood from BSE-infected
animals does not have demonstrable infectivity.

[Issue]{.underline}: One commenter stated that the reference APHIS used
in its risk assessment in discussing the lack of TSE infectivity in
bovine blood--the European Commission Scientific Steering Committee
report, 2002--is dated.

[Response]{.underline}: We note that, in addition to the 2002 European
Commission Scientific Steering Committee report the commenter refers to,
a more recently published study (Espinosa [et]{.underline}
[al]{.underline}., 2007) provides evidence of lack of TSE infectivity in
cattle blood. The 2007 study found that orally inoculating asymptomatic
cattle with BSE resulted in BSE infectivity restricted to the nervous
system, Peyer's patches, and tonsils, as had been reported previously
for clinically affected cattle. The study involved collection of tissue
at 20, 24, 27, 30, and 33 months post-challenge. Infectivity in
brainstem and sciatic nerve was detectable only after 27 months, whereas
Peyer's patches and tonsils were positive at every time point tested.
Blood, urine, spleen, and skeletal muscle were negative for detectable
infectivity throughout the study, using the very sensitive bioassay,
intracerebral inoculation of transgenic mice expressing the bovine PrP,
to assess infectivity.

[Issue]{.underline}: In order to guard against BSE contamination of
blood intended for importation into the United States from BSE
minimal-risk regions--or blood products derived from such blood\--we
proposed to require that the blood be collected in a closed system (in
which the blood is conveyed directly from the animal in a closed conduit
to a closed receptacle) or in an otherwise hygienic manner that prevents
contamination of the blood with SRMs.

Several commenters stated that, because of current line speeds in beef
slaughter facilities, a closed collection system is not practical and
would be cost prohibitive for production of spray- dried blood plasma or
blood meal. The commenters stated that industry associations of both
renderers and spray-dried blood and plasma producers in the United
States and Canada have developed and implemented guidelines and a code
of practice designed to minimize the risk of contamination. One of the
commenters stated that the manufacture of spray-dried blood products
involves concentration of the liquid plasma with reverse osmosis or
ultra-filtration, followed by atomization of the concentrated liquid in
a heated drying container. According to the commenter, because the
filtration and spray drying equipment will operate inefficiently if the
feed liquid contains particulate material, a number of pre-filtration
steps to remove particulate contamination are included in the production
of spray-dried blood products. The commenter stated that the combination
of the filtration system with manufacturing standards results in a
system that meets the requirements of the regulations for collection "in
an otherwise hygienic manner that prevents contamination of the blood
with SRMs."

Several other commenters recommended that the regulations specifically
provide for the adoption of alternative, less restrictive mitigation
measures should the Administrator determine they are scientifically
justified.

[Response]{.underline}: As noted above, our proposed rule provided for
collection in an otherwise hygienic manner that prevents contamination
of the blood with SRMs, in lieu of using a closed system for the
collection of blood. APHIS will determine whether an alternative process
collects blood in a hygienic manner that prevents contamination of the
blood with SRMs upon request by a party that such a determination be
made. The request for determination must include a description of the
proposed alternative method of collection.

Based on information received from the industry and an evaluation of
industry capabilities, APHIS would consider the following to be an
example of an acceptable alternative collection process at a slaughter
facility: After the animal has passed ante-mortem inspection and is
stunned, a long midline cut is made in the skin on the ventral part of
the neck. A specially designed bucket\--with two barbs that allow it to
hang on the hide and that has been treated with anticoagulant prior to
use\--is inserted into the cut, so that the opening of the bucket, an
oval-shaped area that conforms to the shape of the cut, is essentially
inside the skin. As the animal moves down the line, another cut is made
with a clean knife inside the skin opening, cutting the arteries and
veins through the thoracic inlet for exsanguinations. The carcass
travels down the rail while the blood drains. The bucket is mechanically
removed by a conveyor at the end of this line. The conveyor carries the
bucket into a separate room (separate from the kill floor), and empties
the bucket into a vat with a screen to pick out any clots. The blood in
the vat is then centrifuged, and the cells are piped to a dryer in
another part of the plant, while the plasma is held in large
refrigerated vats prior to transfer to another processing facility. The
empty bucket travels through a pre-wash that removes any remaining
blood, then through a disinfectant wash. Before reentering the
collection process, the cleaned and disinfected bucket is treated with a
measured amount of anticoagulant.

For the reasons discussed above, we are making no changes based on these
comments to the proposed requirements for importing blood or blood
products.

Small Intestine

The regulations in § 94.19 have required that meat, meat byproducts, and
meat food products derived from bovines that have been in a BSE
minimal-risk region be derived from bovines from which the SRMs and the
small intestine were removed at slaughter. The regulations at § 95.4(g)
have applied this same requirement to offal derived from bovines from
BSE minimal-risk regions. Section 94.0 defines SRMs as "those bovine
parts considered to be at particular risk of containing the bovine
spongiform encephalopathy (BSE) agent in infected animals, as listed in
the FSIS regulations at 9 CFR 310.22(a)."

The regulations require removal of the entire small intestine, even
though only part of the small intestine (the distal ileum) has been
determined to be an SRM, to ensure removal of the distal ileum.

In our January 2007 proposed rule, we proposed to remove the
requirements for removal of the entire small intestine. We proposed,
instead, to require removal of 80 inches of the uncoiled and trimmed
small intestine, as measured from the cecocolic junction, unless the
processing establishment has demonstrated that an alternative method is
effective in ensuring complete removal of the distal ileum. We explained
that this proposed change is consistent with the definition of SRMs in
the FSIS regulations at 9 CFR 310.22(a).

Some commenters who addressed the topic of the removal of the distal
ileum and other parts of the small intestine requested that the
regulations be made more stringent than at present, while others
expressed the view that our proposed regulations were too restrictive.

[Issue]{.underline}: Several commenters addressed our proposed change
regarding removal of the small intestine. One commenter recommended not
only that the regulations continue to require the removal of the small
intestine, but that we require that the large intestine be removed as
well. The commenter stated that the European Commission Scientific
Steering Committee stated that, because slaughterhouse contamination of
other intestinal areas with matter from the distal ileum cannot be
avoided, it is prudent to remove the entire small and large intestines.
Additionally, stated the commenter, the International Review Team (IRT)
that issued a report to the U.S. Secretary of Agriculture in February
2004 called for the banning the entire intestine\--from anus to
pylorus\-- from human and animal food, from cattle of any age.

[Response]{.underline}: The issue of how much of the intestines should
be removed to ensure removal of the distal ileum to prevent
contamination with the BSE agent was also raised in response to
rulemaking documents published in the [Federal]{.underline}
[Register]{.underline} by FSIS and FDA. The agencies' responses to those
comments were published in interim final rules published in the
[Federal]{.underline} [Register]{.underline} on September 7, 2005. (FSIS
Docket No., 03-025IFA, 70 FR 53043-53050, and FDA Docket No. 2004N-0081,
70 FR 53063-53069). We concur with FSIS and FDA that, although the EU
prohibits the entire intestine from use in food, the data we are aware
of indicating BSE infectivity along the entire intestine is from other
species, and may not represent the distribution of infectivity in cattle
infected with BSE, as evidenced by studies with bovine tissues.

In cattle, infectivity has been found in the distal ileum in tissue
assay from cattle experimentally given BSE (Wells [et]{.underline}
[al]{.underline}., 1994). In such cattle, positive Peyer's patches were
found by immunohistochemistry only in the distal ileum, and in cattle
with naturally occurring and experimental BSE, positive myenteric plexus
neurons were found only in the distal ileum (Terry [et]{.underline}
[al]{.underline}., 2003). The duodenum of cattle experimentally given
BSE has not demonstrated infectivity when tested by mouse bioassay and
has been negative for the presence of abnormal prions when examined by
immunohistochemistry during all stages of the pathogenesis of the
disease (Wells, 1994). Few samples of jejunum have been tested, but
those that have been tested were negative for the presence of abnormal
prions when examined by immunohistochemistry (Terry [et]{.underline}
[al]{.underline}., 2003). In a bioassay of tissues from cattle with
naturally occurring BSE, no infectivity was found in the splanchnic
nerve, rumen, omasum, abomasum, proximal small intestine, proximal
colon, distal colon, and rectum, or in the distal small intestine (EU
SSC 2002).

The study by Terry and others indicated that the myenteric plexus of the
distal ileum contained some abnormal prion protein in neurons (Terry
[et]{.underline} [al]{.underline}., 2003). Since the myenteric plexus
extends throughout the small intestine, we acknowledge the possibility
that infectivity might exist in the myenteric plexus of the jejunum or
the duodenum. However, if infectivity in intestinal tissues (other than
distal ileum) exists, it is below the level of detection by both mouse
and cattle bioassay. Given the relative efficacies of these experimental
modes of transmission compared to oral exposure at doses estimated to
have occurred in the field, we conclude that intestine other than the
distal ileum is highly unlikely to contain epidemiologically significant
levels of infectivity, if any infectivity is present at all.

We do not agree that slaughterhouse contamination of other intestinal
areas with matter from the distal ileum cannot be avoided. FSIS is
responsible for ensuring the adequacy and effectiveness of procedures
for removing the distal ileum in slaughterhouses. The FSIS regulations
require that establishments develop, implement, and maintain written
procedures for the removal, segregation, and disposition of SRMs, and
that they incorporate these procedures into their HACCP (Hazard Analysis
and Critical Control Point) plans, sanitation standard operating
procedures, or other required programs (9 CFR 310.22(d)(1)). These
procedures must ensure that SRMs, including the distal ileum, are
completely removed from the carcass, segregated from edible products,
and disposed of in an appropriate manner as prescribed by

9 CFR 314.1 and 9 CFR 314.3 (i.e., used for inedible rendering,
incinerated, or denatured). Regions wishing to export meat and meat
products to the United States must follow processing practices
equivalent to those of FSIS.

With regard to the IRT report referenced by the commenter, the
recommendation for removal of the entire intestine, from anus to
pylorus, was meant to apply in the United States only if the risk of BSE
had not been determined to be minimal, based on aggressive surveillance.
Aggressive surveillance conducted in both the United States and Canada
indicate a very low prevalence of BSE. Therefore, the recommendation of
the IRT for removal of the entire intestine of all cattle does not
apply. As discussed above, scientific evidence does not support the
designation of the entire intestine as an SRM.

[Issue]{.underline}: Several commenters stated that the regulations
should require that only the distal ileum be removed, rather than an
additional 80 inches of small intestine. The commenters stated that
APHIS has not established that it is necessary to excise so much
additional intestine. At a minimum, stated the commenters, the
regulations should allow the Administrator to approve effective
alternatives in ensuring complete removal of the distal ileum.

[Response]{.underline}: As discussed in our proposed rule, removal of
the distal ileum as well as an additional portion of the small intestine
is consistent with FSIS and FDA requirements to ensure removal of the
distal ileum. APHIS concurs with FSIS and FDA that, unless demonstrated
otherwise, to ensure complete removal of the distal ileum, it is prudent
to require removal of 80 inches of the uncoiled and trimmed small
intestine as measured from the cecocolic junction. We concur that this
standard will ensure removal of the distal ileum despite differences in
length of the intestinal tract or its segments between breeds or
variations from animal to animal of the same breed. However, we
recognize, as do FSIS and FDA, that alternative means of ensuring
removal of the distal ileum may exist, and current APHIS regulations
provide for such alternative means.

For the reasons discussed above, we are making no changes based on these
comments to the proposed requirements regarding removal of part of the
small intestine.

Bovine Tongue

[Issue]{.underline}: One commenter stated that USDA's assumption that
removal of a fraction of the small intestine and the tonsils removes any
potential for transmission to humans is unjustified, given that APHIS
has not evaluated the potential for contamination of tongue with tonsil
tissue. The commenter also stated that APHIS claims this possibility is
eliminated by current slaughter techniques, and stated further that such
an assumption is contradicted by facts ( i.e., scientists who examined
over 250 bovine tongues intended for human consumption found tonsillar
tissue in the vast majority\--in some cases, "even after the most
rigorous trimming of the root of the tongue" (Wells [et]{.underline}
[al]{.underline}., 2005). The commenter stated that APHIS cannot simply
assume this risk away by stating, without record support, that it is
eliminated.

[Response]{.underline}: We are making no changes based on the comment.
Wells [et]{.underline} [al]{.underline}. (2005) state the following:

However, the trace level of infectivity so far detected in tonsillar
tissue and the localization of the lingual tonsillar lymphoid tissue,
together with the current SRM legislation for the removal of tonsil from
cattle carcasses and the low and diminishing prevalence of BSE in the UK
suggest that the risk of human exposure to infected tonsil is now
remote. It seems likely that under these circumstances any additional
trimming of the tongue would result in an immeasurable reduction in the
risk ...

In other words, the study cited by the commenter does not present a
strong case for additional risk measures. The study, in fact, indicates
the opposite conclusion.

Moreover, even before the SRM requirements were implemented in January
2004, FSIS did not consider tonsil to be edible tissue--it was
previously required to be removed. As noted in FSIS Notice 50-04:

In the preamble to 9 CFR 310.22, FSIS stated that tonsils of all
livestock species, including cattle, were already required to be removed
and were prohibited for use as ingredients in meat food products under 9
CFR 318.6(b)(6). The accepted practice for removing the tonsils from
livestock has been to remove all visible tonsils. In cattle, this
includes separation of the palatine tonsils and lingual tonsils from the
tongue (in establishments that harvest the tongue for human food) by a
transverse cut caudal (just behind) the last vallate papillae.... FSIS
expected that establishments would continue to remove tonsils from
cattle in accordance with the procedures that they had implemented to
comply with 9 CFR 318.6(b)(6).... Establishments that slaughter cattle
should have been following these practices before tonsils were
designated as SRMs." (FSIS, 2004).

APHIS' quantitative exposure model included an update that acknowledged
the potential infectivity in tonsils and clearly added these as an SRM,
with the acknowledgment that they could still be potentially available
for human consumption. In fact, the output tables from the model runs
show the potential ID~50~s derived from tonsils and available for human
consumption over the 20-year period of the analysis. These values are
obviously very low, ranging from 0.026 ID~50~s in the base case scenario
to 0.16 ID~50~s in sensitivity analysis 6 (in which all uncertain
parameters were simultaneously set to their corresponding pessimistic
level). Such very small values are not surprising given the low
likelihood of infectivity in the tissue itself. These possible exposure
routes were therefore explicitly modeled and not "assumed away."
Moreover, although our model predicts a vanishingly low level of
possible human exposure via tonsils, we have not stated that the risk is
"eliminated," as was suggested in the comment.

[Issue]{.underline}: A number of commenters urged that, before this rule
is implemented, a plan should be in place for the removal and mitigation
of any potential risk factors that might arise from the introduction of
the BSE agent into the United States because of the importation of a
BSE-infected cow.

[Response]{.underline}: We are making no changes based on the comments.
The safeguards in the United States regarding any BSE-infected cow that
might be imported from a BSE minimal-risk region are the same that are
in place to deal with a BSE-infected cow of any source, including any of
U.S. origin that might be detected. These mitigations are simulated in
the quantitative exposure model used in the risk assessment for this
rule.

The primary animal-health mitigation measure is the feed ban implemented
by the FDA in 1997. This feed ban is the most important measure to
prevent the transmission of disease to cattle. In addition to the
regulatory restrictions imposed by the feed ban, other industry
practices\--such as rendering processes that inactivate a significant
proportion of BSE infectious agent present in raw material--and
biological processes--such as age susceptibility to infection--also help
to mitigate the transmission of disease to animals.

Public or human health protective measures are maintained by both the
FSIS and the FDA. The most important public health protective measure is
the removal from the human food supply of SRMs. Other controls include
prohibiting air-injection stunning of slaughter cattle; requiring
additional process controls in advanced meat-recovery systems;
forbidding the use of mechanically separated meat in human food; and
prohibiting nonambulatory disabled cattle from the human food chain.
Additionally, protection from BSE and other disease is achieved through
ante-mortem inspection of slaughter cattle and the exclusion of animals
with any clinical signs of neurological disease or other abnormalities.

If a BSE-positive bovine were identified in the United States, APHIS
would lead an epidemiological investigation that would include the
tracing of birth cohorts of the infected animal. Birth cohorts are those
animals that could have been exposed to the same feed as the infected
animal, and include those bovines that were born on the same premises as
the infected animal during the 12-month period immediately before the
birth of the infected animal or during the 12-month period immediately
after the birth of the infected animal. They would also include other
bovines raised on the premises at the time the infected animal was
there. Any birth cohorts located would be prevented from entering the
human or animal feed chains. In addition to the APHIS epidemiological
investigation, FDA would conduct an extensive feed investigation to help
determine the potential source of the infection.

With regard to commodities eligible for importation from BSE
minimal-risk regions under this rule, we have concluded that such
commodities can be imported with a negligible BSE risk to the United
States.

The Role of States

Several commenters discussed the role U.S. States should play regarding
bovines imported from BSE minimal-risk regions.

[Issue]{.underline}: Commenters stated that CFIA and APHIS should
provide the State veterinarian in the U.S. State that is receiving such
bovines with all animal health and identification documentation before
the animal is imported. Commenters requested further that the
regulations require all importers of cattle over 30 months of age from
BSE minimal-risk regions to report all movements of the animal to the
department of agriculture of the recipient State before the animal is
moved into or through the State.

[Response]{.underline}: As noted above, the purpose of the current APHIS
regulations with regard to BSE, and those in this rule, is to allow the
importation into the United States of commodities that can be imported
with a negligible likelihood of the BSE exposure and establishment in
the U.S. cattle population as a consequence of eligible imports from
Canada. We do not consider the extensive recordkeeping and paperwork
requirements suggested by the commenters to be warranted or justified by
science and are making no changes in response to the comments.

[Issue]{.underline}: Commenters recommended that APHIS authorize each
State Veterinarian to ensure that the animal health and identification
requirements of the APHIS regulations are met, and recommended further
that, in the event the State determines noncompliance with the APHIS
regulations, USDA support the enforcement actions of the State
officials.

[Response]{.underline}: APHIS has a historical and ongoing working
relationship with State animal health officials to protect livestock in
the United States from both foreign diseases and diseases endemic to the
United States. This ongoing cooperation has enabled the United States to
protect this country's livestock from a variety of diseases, including
BSE. It has not been necessary to specify this working relationship in
the APHIS regulations, and we do not consider it warranted to do so for
any one disease. However, APHIS emphasizes that it values highly its
cooperative efforts with State animal health officials and welcomes a
continuing exchange of information and support in carrying out our
mutual missions.

Potential Economic Effects of the Proposed Rule

A large number of commenters addressed the potential economic effects of
the proposed rule. Most of these commenters expressed concern that the
proposed rule would have an unacceptable negative impact on U.S.
entities. Some of the commenters took issue with the economic analysis
we conducted for our proposed rule.

[Issue]{.underline}: Many commenters recommended that APHIS withdraw or
restrict implementation of this rule because of its potential negative
economic effects on the U.S. livestock and livestock product industry,
due to the potential significant influx of cattle from Canada over a
short period of time. A number of commenters requested that the rule not
take effect until USDA has developed and implemented an orderly market
transition plan to reduce the negative effect of the rule on U.S. cattle
producers. One commenter stated that such a plan should include
gradually accepting imports, so as not to overload the U.S. cattle
supply and crash those markets. Further, commenters recommended that
APHIS delay implementation of the rule until all U.S. export markets
that were closed due to the December 2003 detection in an imported cow
in Washington State are reopened.

[Response]{.underline}: APHIS does not have the statutory authority to
restrict trade based purely on its potential economic impact, market
access effects, or quantity of products expected to be imported. Under
the Animal Health Protection Act, the Secretary of Agriculture may
prohibit or restrict the importation or entry of any animal or article
when the Secretary determines it is necessary to prevent the
introduction or dissemination of a pest or disease of livestock. This
authority has been delegated to APHIS.

We note that this rule, and our January 2005 final rule, do not make any
commodities eligible for importation from Canada that were not already
allowed importation prior to May 2003, when a BSE-infected cow was
diagnosed in Canada. One difference between the current situation and
pre-May 2003, however, is that certain of the commodities that are now
eligible for importation, or that will become eligible when this rule
becomes effective, are subject to risk mitigating importation conditions
appropriate to the fact that BSE has been detected in Canada and that we
consider that country a minimal-risk region for BSE. As noted above,
both Canada and the United States have been classified as controlled
risk countries for BSE under the OIE guidelines. Additionally, even
under these rules, there are some commodities (e.g., cattle born before
March 1, 1999) that continue to be ineligible for importation into the
United States. Nevertheless, this rulemaking and our January 2005 final
rule represent to a great extent a return to trade patterns that existed
between the United States and Canada for many years previously. As
discussed in the January 2007 proposal for this rule, in this final
rule, and in the risk assessment for this rule, we have determined that
the commodities eligible for importation from Canada under this
rulemaking can be imported into the United States under the conditions
specified with a negligible BSE risk to the United States.

With regard to exports markets that were closed to U.S. beef following
the December 2003 detection of BSE in a cow of Canadian origin in
Washington State, U.S. Government agencies are actively negotiating with
trading partners to reestablish our export markets. After the 2003
detection of an imported BSE-infected cow in Washington State, many of
the 114 nations that imported U.S. beef banned our beef and live
animals, despite the apparent lack of scientific basis for such
measures. The efforts of multiple U.S. Government agencies have
succeeded in removing bans in over half of those markets, including our
largest export market, Japan. U.S. Government agencies continue to work
to reopen or further open markets where restrictions remain; the results
of these negotiations are posted on the USDA APHIS web site
(www.aphis.usda.gov).

[Issue]{.underline}: Some commenters took issue with the economic
analysis that we conducted for our January 2007 proposed rule. One
commenter stated that the economic analysis ignored any multiplier
effects (i.e., the impact of a change in the level of economic activity
in one sector on other sectors of the economy and on households in terms
of employment and income) that would come from the broader economic
impacts on the beef wholesale sector.

[Response]{.underline}: We used the multi-sector model in our economic
analysis to examine impacts for the major vertically linked marketing
channels for beef and other livestock products. We estimate consumer
surplus for the beef sector will increase by 1 to 1.3 percent at the
retail level in scenario 3 of the economic analysis. Indirect downstream
effects on income and employment are not modeled; however, we do not
believe APHIS is required to analyze the impacts of regulation on every
sector of the economy that may be indirectly affected by these changes.
As in many regulations, opportunity costs imposed on one sector of the
economy are often passed on to other sectors of the economy. We
anticipate that there may be indirect economic benefits to communities
where, for example, cull cattle imported from Canada result in increased
slaughter plant employment. In other communities, there may be income
and employment losses due to reduced spending by producers who face a
fall in prices for cull cattle. These impacts are expected to be small
on a national basis, although they may show some geographic
concentration. Overall, the effects of this rule are expected to reflect
a return to trade circumstances similar to those that existed prior to
May 2003.

[Issue]{.underline}: One commenter indicated that APHIS acknowledged the
sensitive nature of the results of the economic analysis based on the
parameters (elasticities) used to drive the economic model and requested
public comment on those parameter assumptions. The commenter stated that
APHIS should have done a literature search for studies that report on
these parameters and should have made those reported parameters
available, in order to provide policy analysts with fuller knowledge to
assess the accuracy of the results reached by APHIS.

[Response]{.underline}: APHIS agrees that this would be useful
information to provide for those interested in the impact analysis. The
two tables that follow summarize our overview of demand and supply
elasticities estimated or used in published research. The referenced
sources are

identified in a footnote following the tables[^12]. The elasticities we
use in the economic analysis fall within a reasonable range of the
elasticities found in these various sources.

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[Issue]{.underline}: One commenter stated that the type of "welfare"
analysis APHIS used in its economic analysis is invalid because it
relies upon the unscientific concept of interpersonal utility
comparison.

[Response]{.underline}: We disagree. Our economic analysis does not
attempt to make interpersonal utility comparisons. We recognize that an
additional dollar of income provides a different level of utility to
every individual. APHIS uses techniques that are quite standard in
welfare and trade economics; we estimate changes in consumer and
producer surplus that may result from projected changes in cattle and
beef imports from Canada under different scenarios. For a given
transaction, consumer surplus refers to the value that the purchase of
the good provides the buyer over and above its price. Producer surplus
refers to the value that the sale of the same good provides the seller
over and above the lowest price at which he would have been willing to
sell it.

The estimated changes in welfare and prices are generalized across all
entities that would take part in transactions concerning the particular
commodity at hand, such as the purchase and sale of cull cattle. We make
no attempt to evaluate impacts on income distribution or the utility
gained or lost by individual market participants. In a transaction, the
buyer and the seller both gain utility, as individually determined,
compared to their next best alternatives. Otherwise the transaction
wouldn't occur. But for some entities, the "gain" in utility may be, in
fact, a smaller welfare loss than the participant anticipates would be
incurred without the transaction (e.g., selling a cull animal rather
than keeping it past the optimal point of sale, even though the price
has declined). Commodity-wide changes in welfare (changes in consumer
and producer surplus) reflect the changes in utility across all buyers
and sellers of the commodity.

The common measure of value and, therefore, of changes in welfare is, of
course, the dollar. Our analysis appropriately uses changes in consumer
and producer surplus, expressed in dollars, to evaluate net benefits of
this rule and other scenarios considered. As pointed out in the Office
of Management and Budget's Circular A-4, a distinctive feature of
benefit-cost analysis is that both benefits and costs are expressed in
monetary measures, which allows a common measure for evaluation of
different regulatory options.[^13]

[Issue]{.underline}: One commenter stated that the economic analysis for
the proposed rule is invalidated by its assumption that import numbers
will be exogenous, rather than determined within the context of a
dynamic North American livestock market.

[Response]{.underline}: APHIS disagrees. We agree that the North
American livestock market is a dynamic system, with the interplay of
changing prices and changing supply and demand quantities continually
redefining market equilibria. The projected imports from Canada may be
exogenous to the particular model we used to estimate domestic impacts;
however, they are derived from USDA baseline projections and anticipated
market changes that reflect the fluidity of interacting markets. In
other words, the impacts were not modeled as external exogenous shocks,
but rather as rational responses to changing market conditions. We also
note that every model is an abstraction from reality that relies upon
selected exogenously determined values and parameters. Our import
projections are well based in theory and market considerations. Imports
of Canadian cull cattle will be newly reestablished by the rule, and
effects for the other modeled commodities will derive from the
resumption of the cull cattle imports. The principal model we

use to evaluate expected effects of the rule is a net trade model, and
its operation is driven by

projected changes in net trade.

[Issue]{.underline}: One commenter stated that our economic analysis
overstates consumer benefits associated with the availability of cull
cattle for slaughter in the United States, because it does not
adequately account for substitution among the modeled products in both
the United States and Canada.

[Response]{.underline}: Consumer welfare benefits are expected to be
gained under the rule by buyers of processing beef at the wholesale
level. Lean processing beef from cull cattle and trimmings from fed beef
are complementary goods that are combined to produce ground beef. At the
level of the retail shopper, there is a degree of substitution between
ground beef and fed beef cuts, but this relationship is not expected to
significantly influence the estimated consumer benefits attributable to
the rule.

As part of the economic analysis for the final rule, we simulate
substitution among livestock products in response to relative price
changes. The simulations yield measures of consumer welfare changes at
the retail level. Results of this analysis indicate that, with the rule
under scenario 3 as discussed in our economic analysis and in the
summary of that analysis in this document (entry of Canadian cattle born
on or after March 1, 1999, and resumption of imports of beef from
Canadian cattle slaughtered at 30 months of age or older), consumer
surplus for the beef sector at the retail level will increase by 1 to
1.3 percent compared to a 2006 baseline.

[Issue]{.underline}: One commenter stated that, based on normal culling
rates, the January 2007 herd size, the modernization and expansion of
Canada's slaughter plants, and the increased use of Canadian beef in the
Canadian domestic market, the number of animals that might be available
for export is considerably lower than the number estimated by USDA. The
commenter calculated that the number of older, age verified, beef and
dairy animals that might be eligible for export would total about
471,000 head annually, consisting of approximately 250,000 dairy cows,
154,000 beef cows, and 67,000 bulls. The commenter noted that the
estimate of 471,000 head should be viewed as an upper bound and that, if
confirmation of an animal's age proves to be a complex procedure, that
number would be reduced.

One commenter stated that, in assessing the potential economic effects
of this rulemaking, the use of any historical references regarding trade
flows and regional basis levels to assess potential impacts are not
likely to be of much use, due to changes in cattle usage. The commenter
stated that the vast majority of Canadian cull cows and bulls will be
converted into beef in Canada, and, after subtracting the elimination of
the supplemental tariff rate quota (TRQ) supplies, the balance could be
exported to the United States depending on the influence of the exchange
rate. ("TRQ" is the total annual quantity of a commodity that can be
imported at a lower tariff rate, excluding imports from NAFTA countries.
Canada's supplemental TRQ beef supplies were quantities of beef above
the tariff rate quota that were allowed by Canada to enter at the lower
tariff rate. In eliminating supplemental TRQ certificates---that is, by
not allowing additional beef imports at a lower tariff rate, Canada is
relying to a greater extent on domestic production and less on imports.)

[Response]{.underline}: We have considered these observations carefully
and reassessed the proposed rule import projections and, as a result,
have revised our economic analysis based on a smaller quantity of cull
cattle projected to be imported from Canada. Although the modernization
and expansion of Canada's slaughter plants and increased reliance on
Canadian beef in the Canadian domestic market will tend to dampen cull
cattle imports from that country, we expect the major reason for a
smaller number of imports will be the requirement that the cattle be
verified as having been born on or after March 1, 1999. In the
preliminary regulatory impact analysis (RIA) we conducted for our
January 2007 proposed rule, we projected that cull cattle imports from
Canada in 2008, for example, would total 657,000 head (586,000 cows and
71,000 bulls and stags). In scenario 3 of the final RIA, however, we are
projecting cull cattle imports in 2008 totaling 75,000 head (63,000 cows
and 12,000 bulls and stags). We believe that the commenter who estimated
that there would be approximately 471,000 older cattle eligible for
import from Canada, and who acknowledged that number was an upper bound
estimate, did not fully consider the extent to which the age
verification requirement would reduce the number of eligible cattle. Of
the cull cattle that might be imported by the United States if there
were no age restriction and no age verification requirement, only about
one-fourth are expected to be eligible for importation in 2008 under
this rule, and only about one-half may be eligible by 2012.

[Issue]{.underline}: One comment stated that APHIS did not provide an
explanation in its economic analysis for the different percentages of
cattle over 30 months of age and of such cattle plus beef from cattle
over 30 months of age assumed to displace other processing beef imports.

[Response]{.underline}: We agree that it is reasonable to expect, for
all of the scenarios set forth in the economic analysis, that a
consistent percentage of Canadian imports across the scenarios would
displace other imports. We have revised the final RIA accordingly. In
this final rule, we estimate that 25 percent of cull cattle imports from
Canada (scenarios 1 and 2 in our economic analysis) and 25 percent of
cull cattle and beef derived from cattle 30 months of age or older (OTM
beef) from Canada (scenario 3 in our economic analysis) will displace
U.S. processing beef imports from elsewhere. The estimate of 25 percent
comes from simulations of the multi-sector model and takes into account
interactions of the processing beef sector with the beef cattle and
dairy cattle sectors. The model allows cattle prices to adjust to an
increase in beef imports from one source (in this case, cull cattle and
OTM beef imports from Canada), spreading the market response across both
beef and cattle. This interaction dampens the beef price decline and
reduces the amount of displacement below that would be expected to occur
by considering only the market for processing beef. We also examine the
sensitivity of the impacts to changes in the quantities of cull cattle
and processing beef imported from Canada that displace processing beef
from elsewhere: The RIA presents results assuming 50 percent of the
imports from Canada displace imports from elsewhere as well as results
assuming none of the imports from Canada displace other imports.

[Issue]{.underline}: Several commenters, in addressing the potential
economic effects of this rulemaking, stated that the time of year a
final rule would go into effect is an extremely important variable in
assessing its initial economic impact. One commenter stated that U.S.
cull cow marketings are highly seasonal because the majority of calves
are born in the spring and the decisions to retain cows are generally
made during the fall. As a result, the months of October, November,
December, and January are typically lowest for cull cow prices. Another
commenter stated that implementation of the rule in the fall of 2007
(post-weaning) would likely result in a larger impact on U.S. cull cow
prices in the very short term.

[Response]{.underline}: We agree with the commenters that, in the short
term, the timing of the resumption of imports of cull cattle and
processing beef from Canada could have an impact on producers' monthly
revenues. Historically, cull cow slaughter in the United States is
highest in the months of October, November, December, and January. As
the commenters noted, because of this, cull cow prices are typically
lower in these months. Limited data prevent analysis on a monthly basis
of price changes in response to projected cull cattle imports from
Canada. However, we do acknowledge that, because of the larger number of
cull cattle marketed per month, during October through January, a slight
price decline during this period would result in larger total monthly
revenue losses for U.S. producers than during the other months of the
year. This seasonal difference in monthly revenue losses would not be
large on an annual basis.

This outcome is demonstrated in research conducted at Montana State
University (Brester [et]{.underline} [al]{.underline}., 2007). This
study examined effects of additional cull cattle slaughter using two
scenarios: One in which Canadian cull cattle imports return to pre-2003
levels and do not displace beef imports from other countries, and a
second in which 50 percent of cull cattle and processing beef imports
from Canada displace beef imports from Uruguay. The changes in U.S. cull
cattle prices estimated for these two scenarios are declines of \$1.55
per cwt and \$0.78 per cwt, respectively. The average of the price
changes reported in the Montana State study, \$1.17 per cwt (2.5 percent
of the 2006 average U.S. cull cow price of \$47.56 per cwt), would
correspond to 25 percent of imports from Canada displacing processing
beef imports from other countries, which is the percentage share used in
the economic analysis for this final rule.

As reported by Brester [et]{.underline} [al]{.underline}. for the
period, 2000-2006, monthly cull cattle sales averaged 488,000 head,
October through January, compared to an average of 434,000 head per
month, February through September. Based on the Montana State study
results, a 25 percent level of displacement would correspond to a
decrease in total monthly revenue for cow-calf producers of \$5,956,500,
October through January, and \$5,297,000, February through September. In
other words, there would be an additional revenue loss of \$659,000 (12
percent) per month, October through January.

We project in our economic analysis a baseline for beef and dairy cow
slaughter in 2008 totaling 5,084,000 head, and a nominal 2008 price of
\$54.19 per cwt. Based on an average live slaughter weight of 1,050
pounds, total baseline gross revenue from the sale of cull cows in 2008
would be \$2.89 billion. The increase in producer losses because of
increased cull cattle sales occurring during the months of October
through January, rather than during the months of, February through
September, based on the Montana State study results, would total less
than 0.1 percent of the projected baseline annual revenue from cow
slaughter.[^14]

While we recognize that the timing of the resumption of cull cattle
imports from Canada may influence the size of the short-term impacts for
producers, differences in revenue losses due to the timing of the
implementation of the rule are considerably smaller when considered on
an annual basis. Our analysis is in terms of annual cattle import
projections and, therefore, yields annual price and welfare effects. The
within-year distribution of effects is smoothed in the annual estimate.

[Issue]{.underline}: Many commenters addressed the issue of the
potential economic impact on U.S. cattle producers should a bovine of
Canadian origin be diagnosed in the United States as BSE-infected. A
number of the commenters expressed general concern regarding such a
potential impact, and suggested that APHIS' analysis of the potential
economic effects of the proposed rule was incomplete because it did not
consider such impacts. Commenters stated that such impacts have been
large in other countries and could overwhelm the effects estimated by
APHIS if a BSE-infected animal imported into the United States under the
provisions of this rule caused the spread of BSE in the United States,
and that a comprehensive economic analysis should include consideration
of the demand reactions that would be triggered by identification of
additional Canadian-born BSE cases in the United States, even at the low
levels projected in APHIS' risk assessment.

Other comments stated that the cost associated with the projected
importation of up to 160 BSE-infected cattle into the U.S. (based on
APHIS' estimate for the 95th percentile of confidence) over 20 years, or
the projected 2 to 20 U.S.-born infected cattle, should have been
considered. Several commenters expressed concern that the existence of
21 to 180 cases of BSE-infected animals could substantially undercut
demand for beef, as it has done in Europe, or dairy, if the public
begins to identify BSE with the older dairy breeding stock that are most
at risk of manifesting the disease.

A number of commenters expressed concern regarding the potential
economic impact of the detection in the United States of a Canadian-born
BSE-infected cow on U.S. export markets. Commenters stated that the
reaction of the beef markets to the first U.S. case of BSE---despite
that cow's being of Canadian origin---demonstrates the very substantial
potential costs to U.S. cattle industries of introducing even a limited
number of infected animals into the U.S. herd. Commenters stated that
APHIS should examine such potential economic impacts.

[Response]{.underline}: Expected economic impacts if new cases of BSE
were to occur in the U.S. cattle population because of the rule are
addressed in the consequence assessment portion of the risk assessment
we conducted for this rulemaking. The consequence assessment notes that
effects of BSE include a variety of costs. Some costs are long-term;
others are one-time costs uniquely associated with new cases.

The major long-term cost for the United States due to the diagnosis of
BSE in a cow of Canadian origin in Washington State in December 2003 has
been reduced access since then to beef export markets. Principal Asian
markets, in particular, remain largely restricted. In 2003, the value of
U.S. exports of beef and beef by-products (as measured by the 33 "beef
only" Census Bureau categories) totaled over \$3.9 billion, of which the
value of sales to Asian markets totaled \$2.4 billion. In 2004, these
totals had fallen to \$863 million and \$16 million, respectively. In
2006, the value of U.S. beef and beef byproduct exports worldwide was
\$2.1 billion, and exports to Asia were valued at \$197 million.[^15]

Trade impacts tend to decline over time as exporting and importing
countries find ways to resume mutually beneficial trade while
maintaining the safety of the beef supply. The OIE has developed
international science-based animal health standards to permit safe
international trade in beef from countries that have BSE, based on the
risk level of such countries. The OIE has classified both the United
State and Canada as controlled risk countries for BSE.

We anticipate that the economic impact of any additional cases of
BSE-infected cows

imported from Canada will likely be minimal. As noted above, after the
2003 detection of BSE in Washington State, many of the 114 nations which
imported U.S. beef banned our beef and live animals, but over
half--including our largest export market, Japan\--have resumed
importing U.S. beef (USDA 2006)[^16]. The joint U.S.-Japan press
statement for resuming trade in beef and beef products after market
closures in response to finding BSE in the United States noted that the
United States has a "robust" food safety system, and stated that
"identification of a few additional BSE cases will not result in market
closures and disruption of beef trade patterns without scientific
foundations" (USDA 2004). Adherence to science is imperative to
expanding trade opportunities and maintaining existing market access.
Continued import bans by other

countries without sufficient scientific basis to warrant such measures,
and maintained without adequate assessment of specific risks, may not be
consistent with international trade obligations, and U.S. Government
agencies continue to work to reopen such markets.

One of the potential incremental costs of the detection of BSE in an
imported cow is the regulatory expense of investigating such cases and
paying indemnity for animals that are destroyed. Based on the U.S.
experience with native BSE cases that have been detected, the regulatory
costs per case total approximately \$250,000 for epidemiological
investigations and indemnification of depopulated animals.

The potential domestic market effects of any new cases of BSE are
difficult to predict. However, as described in the consequence
assessment in our risk assessment, there is little

reason to expect that additional U.S. cases of BSE would have a
significant impact on U.S. beef consumption, based on past experience.

Although the first U.S. discovery of BSE, a cow of Canadian origin,
resulted in major restrictions on U.S. beef exports, that case and
subsequent cases have not, to use the commenter's term, "substantially
undercut" U.S. demand for beef or dairy products. Studies show that any
negative consumer response to the discoveries of BSE in Canada and the
United States in May and December 2003, respectively, was neither
significant nor long-lasting.

Consumer opinion surveys as summarized by Coffey [et]{.underline}
[al]{.underline}. (2005) indicated that between 14 and 29 percent of
respondents reported reducing their beef consumption. However, as
Kuchler and Tegene (2006) point out, survey responses may systematically
differ from actual market behavior. Coffey [et]{.underline}
[al]{.underline}. found that, in the months following the December 2003
BSE discovery, consumer demand for beef increased.

Vickner, Bailey, and Dustin (2006) analyzed weekly grocery store
purchases, from

May 9, 2004, to May 1, 2005. The authors studied the impact of BSE
announcements on consumer demand for beef in Utah over this time period
and found that Utah consumers were not responsive to BSE announcements
during that period. Kuchler and Tegene found similar results on a
national scale. The authors studied three separate markets, including
fresh beef from grocery store meat counters, frozen beef, and
frankfurters. The study concluded that the announcement of the finding
of BSE in a Washington State cow may have reduced purchases of fresh and
frozen beef over a 2-week period, but had no impact on purchases of
frankfurters. A similar announcement for the finding of BSE in Canada
had no noticeable impact on beef purchases in the United States.

Although various consumer studies have concluded that discovery of
additional cases of BSE in the United States may lead to decreased
consumption of beef, the market has not substantiated this conclusion.
In the first year after the December 2003 BSE discovery, beef
consumption increased. While consumption in 2005 was above 1998 levels,
consumer demand started to decline. This decline was likely due to a
combination of factors, including increased supplies of poultry and a
slowing of growth in consumers' disposable incomes (Mintert, 2006).
There is no evidence to suggest a decline in consumption related to the
confirmation of additional cases of BSE in the United States.

[Issue]{.underline}: Several commenters stated that APHIS' economic
analysis does not consider potential demand changes regarding exports of
U.S. beef that could result from implementation of the proposed rule. A
number of commenters expressed concern that the rulemaking would
exacerbate the limited access of U.S. beef to world markets and harm the
ability of the United States to restore lost export markets. Commenters
stated that imports of Canadian cattle and beef are currently banned by
35 countries, including the important U.S. export markets of the
Republic of Korea, Singapore, and Taiwan, and that APHIS should not
consider relaxing its BSE import restrictions in light of ongoing
international concerns regarding the safety of Canadian beef and cattle.
Other commenters stated that the United States should allow imports only
of classes of cattle and beef that U.S. export markets are willing to
accept from the United States.

Several commenters expressed concern that, should Mexico cease accepting
imports of cattle and beef from Canada, the commingling of Canadian and
U.S. cattle and beef products would negatively affect the reopening of
Mexico to U.S. live breeding cattle and the present export of processed
beef to Mexico.

[Response]{.underline}: The commenters raise the concern that, by
allowing Canadian cattle born on or after March 1, 1999, to be imported
into the United States, U.S. beef export markets will become more
restrictive. Various countries have enacted different levels of
restriction on beef imports from the United States and Canada. However,
we expect any restrictions placed on beef from the United States and
Canada by an importing country to become more uniform, as discussed
below, and, therefore, for the rule to have little effect on U.S. beef
export markets.

The reason for the expected uniformity is the May 2007 OIE decision to
classify both Canada and the United States as BSE controlled risk
countries. By this decision, the OIE recognized the effectiveness of the
science-based mitigations and interlocking safeguards in both countries.
This classification is expected to help the beef industries in both the
United States and Canada to expand their access to export markets.

[Issue]{.underline}: One commenter stated that APHIS' economic analysis
does not truly analyze the potential 'consumer welfare' of the
rulemaking. The commenter stated that the closest the analysis gets to
considering the consumer is its consideration of wholesale buyers of
processing beef and fed beef--whom the commenter stated APHIS should
identify as the primary beneficiary of the rule.

[Response]{.underline}: The principal model that we use to estimate
welfare effects resulting from the rule does not extend beyond the
wholesale level to retailers and end buyers of beef. We acknowledge this
modeling choice in our discussion of sector impacts in the analysis for
the final rule, and note that benefits received at the wholesale level
can be expected to be at least partly distributed downstream to
retailers and final buyers, depending on the levels of competition.
Nevertheless APHIS believes this modeling choice is consistent with
standard RIA practices, as recommended by OMB Circular A-4, and that it
adequately identifies the impact of this regulatory action.

APHIS agrees, however, that some indication of the distribution of
benefits in different product markets would be an interesting addition
to the model. As part of the economic analysis for the final rule, we
simulate substitution among livestock products in response to relative
price changes using a multi-sector model. Although meant simply to be
illustrative and subject to considerable uncertainty, included in the
simulations is a derivation of consumer welfare changes at the retail
level. Results of this analysis suggest that consumer surplus for buyers
of beef at the retail level may increase by 1.0 to 1.3 percent compared
to a 2006 baseline.

[Issue]{.underline}: One commenter stated that APHIS should also broaden
the model used in the economic analysis to account for cull animal
producers, so that welfare implications to producers of U.S. cull
animals and processing beef could be separated from those of the
packers. The commenter stated that APHIS' analysis includes no single
estimate of the economic impact of the rule on cow-calf producers
resulting from the change in value and demand for U.S. cattle.

A number of cow-calf producers provided estimates of the potential
economic impact of the proposed rule on their individual operations.

[Response]{.underline}: In our regulatory flexibility analysis for this
final rule, we present a sector-based analysis that includes a separate
consideration of impacts of the rule for the cow-calf and dairy sector.
The sector analysis uses the measures of welfare change estimated for
cull cattle/processing beef, feeder cattle, fed cattle, and fed beef,
distributing these changes among the commodities' principal buyers and
sellers.

Concerning the numerous comments we received regarding economic impacts
of the rule on individual livestock producers, we acknowledge that
analysis does not fully identify the distribution of all of the possible
effects on the vast array of different types of entities that comprise
the cattle and beef industries. Because of the different choices made by
market participants, it would be difficult, if not impossible, to design
such an analysis. For example, some large firms likely also act as
wholesalers and distributors, and may be participants in fed cattle,
feeder cattle, and other markets. The analysis APHIS has produced does
identify the direct impacts of the regulation on the industry; the
results of our analysis are based on baseline quantities and prices and
import projections that are well supported by historical trends and
economic research. The models that we use to estimate price and welfare
effects are also well-grounded in theory and utilize methodologies
widely accepted by economists. We are confident that the results of the
analysis appropriately depict expected net effects of the rule for the
modeled commodities.

[Issue]{.underline}: Commenters noted that APHIS estimated that 46,800
Canadian dairy breeding animals could be imported annually into the
United States as a result of this rulemaking. The commenters expressed
concern that these animals would have a negative impact on the
effectiveness of the Cooperatives Working Together (CWT) herd retirement
program, which the commenters noted is funded by voluntary dairy
producer assessments. (CWT is a national program, organized by dairy
farmers, with the goal of reducing milk supply and demand imbalances
and, in doing so, of delivering a significant return on farmers'
investments through higher, more stable, milk prices.)

The commenters stated that the proposed rule would have the effect of
having U.S. dairy farmers assessed to reduce the U.S. dairy cattle herd,
while, at the same time, cattle are being imported from Canada to
replace those animals.

One commenter stated that APHIS should have made the effort to
incorporate "expected future net returns," as well as impacts on milk
prices, into an analysis of breeding cattle imports, and that the
economic analysis should have modeled impacts on the milk market, and
resulting impacts on producer incomes and the price of milk cows.
Commenters expressed the opinion that APHIS failed to meet its
obligations under Executive Order 12866 and the Regulatory Flexibility
Act in its economic analysis by not performing the required analyses
regarding imported dairy replacement animals.

[Response]{.underline}: We do not expect imports of dairy animals from
Canada to add significantly to the U.S. national herd, but, rather, to
serve as an additional source of replacement animals. Dairy breeding
cattle replacements imported from Canada during 1992 to 2002 represented
about 1.1 percent of U.S. dairy heifer replacements over this period. We
have no reason to expect the supply of Canadian heifer replacements to
be greater than historical levels. In fact, the numbers of dairy heifer
replacements present on all cattle operations in Canada have been in
decline in recent years, from 512,000 on January 1, 2003, to 476,300 on
January 1, 2007. The number of operations that specialize in raising
heifers has also decreased. In Ontario and Quebec, there

were 487 of these operations on January 1, 2003, and only 296 on January
1, 2005.[^17] The

currency exchange rate is also less favorable to Canadian exports than
it was prior to 2003.

There is no evidence that imports of dairy cattle from Canada have
historically had any significant effect on the U.S. cow herd, U.S. dairy
heifer prices, or U.S. milk prices. The U.S. milk herd declined from
about 9.7 million head in 1992 to about 9.1 million in 2002. The number
of U.S. milk cow replacements[^18] remained essentially steady,
fluctuating between 4 million and 4.1 million head over that same time
period.[^19] An empirical investigation by Mussell, [et]{.underline}
[al]{.underline}. (2006)[^20] concluded that imports from Canada prior
to 2003 had no statistically significant impact on the U.S. dairy herd.
Imports of dairy heifers from Canada were also found

to have no statistically significant impact on U.S. heifer prices in the
United States, nor on U.S. milk prices.

As noted by commenters, a producer dairy herd retirement initiative
called CWT is currently underway.[^21] The number of imported dairy
breeding cattle projected in our economic analysis for the proposed rule
was based on historical import levels prior to formation of CWT. Imports
of dairy heifers are driven by the demand for replacement animals,
relative prices, and the exchange rate. If dairy farmers are dedicated
to reducing the national dairy herd, they may purchase fewer replacement
animals and the import projections may be overstated. However, if a
replacement dairy heifer from Canada can be purchased at a lower price
than a domestic one, then it is to the producer's (and industry's)
advantage for the Canadian replacement to be purchased and a
domestically raised animal to be retired. Therefore, APHIS disagrees
with the commenters' claims that dairy producers will somehow be worse
off with this rulemaking. As a lower priced replacement heifer would
represent a lower priced input into the production of dairy products,
standard economic theory indicates that producers and consumers will be
better off.

[Issue]{.underline}: One commenter stated that APHIS' economic analysis
indicates that imports of dairy cattle from Canada would be expected to
represent "only" 1.1 percent of the annual U.S. dairy heifer crop. The
commenter stated that, although APHIS labels this percentage as small, a
short-term change in the milking herd of 1 percent can change milk
prices by 10 percent or more.

[Response]{.underline}: We agree that a 1 percent increase in the
national dairy herd (and a corresponding increase in milk production)
may result in a decline in milk prices. However, as

we discuss above, imports of dairy animals from Canada that occur should
serve as an additional source of replacement animals, rather than adding
entirely to the national milking herd. First, we would reiterate that
imports are voluntary; we believe any projected imports of dairy heifers
would be undertaken because the cost saving associated with the import
would be greater than any decrease in revenue due to relative price
declines resulting from higher production and lower prices. We further
note that we believe the comment overestimated the expected price
declines due to this regulatory change. The projected number of imported
dairy cattle is equivalent to 1 percent of the dairy heifer crop and not
1 percent of the entire milking herd, which is more than twice the size
of the annual dairy heifer crop. Projected imports of dairy heifer
replacements and other breeding cattle represent approximately 0.45
percent of the milking herd.

In 2006, the farm-milk supply produced from 9.1 million dairy cows was
181.8 billion pounds of milk (19,951 pounds per cow) at an all-milk
price of \$12.90 per cwt, which is a weighted average of the fluid grade
milk price of \$12.92 per cwt and the manufacturing grade milk price of
\$12.21 per cwt. An increase in the size of the milking herd would
increase milk production.

If all 47,800[^22] dairy heifers projected to be imported from Canada
were to constitute an addition to the U.S. milking herd, they would
represent a 0.5 percent increase over the 2006 U.S. herd size. This
increase would correspond to a change in milk production of
approximately 0.5 percent.[^23] We would expect the short-run effects
(more inelastic supply) of such an increase in

the U.S. milking herd to be larger than the longer term effects (more
elastic supply). Assuming a short-run supply elasticity of milk of 0.15
and a demand elasticity of -0.30,[^24] a 0.5 percent increase in milk
production is estimated to decrease the milk price by 15 cents per cwt.
This translates into a 1.2 percent price decline. As supply becomes more
elastic, the price decline resulting from a 0.5 percent increase in
production becomes smaller. Assuming a longer run supply elasticity of
0.50 would lead to an estimated decline in price of 9 cents per cwt, or
0.7 percent.

This example of potential effects on milk prices due to changes in the
size of the U.S. milking herd assumes that the projected imports of
Canadian breeding cattle would be absorbed into the U.S. milking herd in
their entirety, thereby slightly expanding the overall size of the U.S.
milking herd. An analysis of scenario 3 as discussed in our economic
analysis and in the summary of that analysis in this document (entry of
Canadian cattle born on or after March 1, 1999, and resumption of
imports of beef from Canadian cattle slaughtered at 30 months of age or
older) using the multi-sector model indicates that dairy producers may
experience price declines of 1.3 to 1.7 percent for dairy cattle, due to
the small number projected to be imported from Canada. These imports
translate into an increase in U.S. milk production of 0.1 percent or
less, and a decline in the price of milk and increase in consumer
surplus of less than 0.1 percent. [Issue]{.underline}: One commenter
noted that the importation of live animals from Canada has

enabled many U.S. plants to better utilize their slaughter capacity,
allowing them to maximize plant efficiencies. The commenter stated that
allowing the resumption of imports of older animals to the United
States, as envisaged in the proposed rule, might enable some previously
closed plants to reopen.

[Response]{.underline}: The resumption of cull cattle imports from
Canada will provide increased throughput for U.S. slaughter plants,
especially those that principally slaughter and process cull animals.
While the cattle from Canada will enable these businesses to more fully
utilize their available capacities, we do not anticipate the effects to
be highly significant. Nor are we aware of plants that have closed and
will be reopened due to reestablished cull cattle imports. Our analysis
for scenario 3 as discussed in our economic analysis and in the summary
of that analysis in this document (entry of Canadian cattle born on or
after March 1, 1999, and resumption of imports of beef from Canadian
cattle slaughtered at 30 months of age or older) indicates that the
additional numbers of cull cattle marketed over the 5 years, 2008-2012,
will not increase substantially. Compared to projected U.S. baseline
slaughter numbers averaging 5.4 million head of cows and 570,000 head of
bulls and stags over the 5-year period, imports of Canadian cows and
bulls/stags are projected to average 89,400 head and 16,600 head over
the same period, representing 1.7 percent and 2.9 percent of the
baseline quantities. These percentages in fact overstate the expected
impact of the rule in terms of cull cattle slaughter because they do not
take into account the effect of expected price declines on domestic
sales. Notwithstanding this cautious assessment of the extent to which
the rule will benefit U.S. facilities, the slaughter industry is
expected to benefit from improved operating efficiencies.

[Issue]{.underline}: One commenter stated that APHIS' economic analysis
for the proposed rule did not consider the economic implications of the
combination of the rule and Canada's implementation of its expanded feed
ban on July 12, 2007, which bans the inclusion of SRMs in any animal
feeds, pet foods, and fertilizers. The commenter stated that, under the
expanded Canadian feed ban, SRMs in Canada will have little or no
economic value. Instead, said the commenter, the materials will generate
a disposal cost, thereby providing increased incentive for Canadian
producers to "send all their cattle over 30 months of age to the U.S.
for slaughter where the SRMs can continue to be used as ingredients in
other U.S. animal feed, pet food, and fertilizer.... The result would be
an even greater supply of imported Canadian cattle than what APHIS
presently predicts and a correspondingly greater decline in U.S. cattle
prices."

[Response]{.underline}: We acknowledge that Canada's July 2007 expansion
of its feed ban eliminates the value of SRMs for producers of cattle
slaughtered in Canada, and we agree that the continued use of SRMs in
the United States for rendered purposes other than as a component of
ruminant feed will contribute to a difference in prices paid for cattle
at slaughter in Canada and the United States. Because SRMs are defined
more broadly for cattle 30 months of age or older than for animals under
30 months of age, this effect on relative prices in the two countries
will be more notable for cull cattle. For all cattle, the tonsils and
distal ileum are considered SRMs, whereas for cattle 30 months of age or
older, SRMs also include the brain, skull, eyes, trigeminal ganglia,
spinal cord, vertebral column (excluding the vertebrae of the tail, the
transverse processes of the thoracic and lumbar vertebrae, and the wings
of the sacrum), and dorsal root ganglia.

However, even for cull cattle, the value of rendered SRMs is relatively
minor in comparison to the total value of the slaughtered animal. In a
2005 analysis of economic impacts of alternative FDA animal feed
regulations, the value of SRMs was estimated using a 4-year average of
byproduct market prices.[^25] For cattle slaughtered at greater than 30
months of age, the value of SRMs used in MBM products was valued at
\$2.35 per animal, and the value of SRMs used for tallow was valued at
\$2.19 per animal. Thus, the total value of SRMs from cull cattle used
as rendered byproducts is estimated to be less than \$5 per animal.
Given a projected 2008 nominal value of about \$569 per cow, the income
from SRMs gained by selling the animal in the United States rather than
in Canada will represent less than 1 percent of the projected price of
the animal at slaughter.[^26] Canada's July 2007 feed ban may make the
U.S. market more

attractive, but not appreciably.

[Issue]{.underline}: One commenter stated that APHIS' analysis of the
projected economic effects of the rule should be revised to take into
account the handling of increased amounts of SRMs.

[Response]{.underline}: In the regulatory impact analysis we conducted
for this rule, projected prices for processing beef and fed beef
incorporate animal slaughter and meat packing costs, including costs of
handling SRMs. Costs and returns per animal of handling SRMs are not
expected to change for slaughtering facilities because of the rule and
therefore do not require specific analysis. Copies of the full amended
analysis may be viewed on the APHIS Web site
(http://www.aphis.usda.gov/newsroom/hot_issues/bse/index.shtml), or be
obtained by contacting the person listed under FOR FURTHER INFORMATION
CONTACT.

[Environmental Assessment for the Rulemaking]{.underline}

Consistent with the National Environmental Policy Act of 1969 (NEPA), as
amended (42 U.S.C. 4321 [et]{.underline} [seq]{.underline}.),
regulations of the Council on Environmental Quality (CEQ) for
implementing the procedural provisions of NEPA (40 CFR parts 1500-1508),
and APHIS' NEPA implementing procedures (7 CFR part 372), we prepared an
environmental assessment (EA) regarding the potential impact on the
quality of the human environment due to the

importation of live bovines and products derived from bovines under the
conditions specified in

our proposed rule. We made the EA available to the public and accepted
public comment on its

provisions. We discuss below the issues raised by commenters who
addressed the EA.

[Issue]{.underline}: One commenter stated that the EA that APHIS
conducted for the proposed rule did not adequately discuss the impact of
air emissions from additional truck round-trips entering the United
States that would result from importation of cattle 30 months of age and
older from Canada. The commenter stated that USDA apparently did not
consider the fact that these emissions would be concentrated in
relatively small parts of the country. Further, said the commenter, the
EA's discussion of air pollutants and mitigation measures is limited to
those pollutants regulated under the Clean Air Act and does not
recognize what the commenter described as substantial emissions of
greenhouse gases that could result from the additional truck trips.

[Response]{.underline}: Our EA estimated that the number of additional
cattle that would be available for importation into the United States as
a result of this rule would result in a 0.05-0.16 percent increase in
truck transports, compared to the annual truck transport baseline,
discussed below. However, more recent data from ERS indicate that the
number of additional cattle that would be available and eligible for
import from Canada as a result of this rulemaking initially will be less
than the number we used in the calculations for our October 2006 EA.
Consequently, the estimated number of truck transports initially will
also be less, as will the emissions generated by such transports.

In the finding of no significant impact (FONSI) (APHIS 2005a) that APHIS
made in conjunction with our January 2005 final rule, we discussed truck
transports for cattle under 30 months of age. Prior to implementation of
that final rule, the projected number of imports of cattle under 30
months of age would have caused the resumption of about 35,000 truck
transports. The FONSI for our January 2005 final rule determined that
the result of environmental impacts from resuming 35,000 trucks
transports would be [de]{.underline} [minimus]{.underline}. Afterward,
based on a decrease in the projected number of available imported
animals under 30 months of age, the estimated number of truck transports
projected to be resumed was adjusted downward to range between 19,460 to
22,140 annually.

As discussed in the EA for this final rule, for cattle born on or after
March 1, 1999, cattle import numbers are projected to range between
130,000 to 446,000 over a 20-year period after implementation of this
rule. The number of associated truck transports that would resume for
this rule would range from 2,600 to 8,920. When added to the truck
transports resumed as a result of our January 2005 final rule, the total
number of projected resumed truck transports is still within the amount
described in the FONSI for our January 2005 final rule as
[de]{.underline} [minimus]{.underline}. Additionally, that projected
number is within the number of truck transports for cattle trade that
occurred between Canada and the United States before such trade was
temporarily halted in May 2003.

As we stated in our EA, the transport of cattle could occur through any
of 20 U.S.-Canadian border ports specifically equipped to handle cattle.
These ports are not confined to one region of the United States, but
stretch across nine northern border States from Washington to Vermont.
Market patterns and geographic issues can cause fluctuations in the
availability and importation of cattle. Availability of cattle for
importation also can vary depending upon the time of year and geographic
location. For example, most feeder cattle are imported through certain
western ports from areas with the highest cattle population in Canada,
and more feeder cattle may become available in the fall when ranchers
wean calves and sell them. Cull cattle for immediate slaughter
historically have come through different ports than feeder cattle,
including some eastern ports. Emissions from trucks importing cattle
from Canada could affect any of the 20 locations at the U.S.-Canadian
border and any location between transport origination and destination.

In determining if the impacts from truck transport emissions from
carrying additional cattle as a result of this rule could result in a
significant impact on the environment, a baseline of the annual overall
truck transports was used. In this case, the baseline used for
comparison was for all incoming trucks from Canada to the United States
through 20 approved ports of entry where cattle can transit to determine
whether the increase in the numbers of imported cattle would cause a
significant increase in air emissions. The comparison of the baseline
(the average number of heavy-duty truck crossings annually between the
U.S.-Canadian border) to the number of truck transports estimated for
cattle 30 months of age and older that would be available to be imported
from Canada annually shows that the increase in the number of truck
transports would not be significant.

To a great extent, projecting the specific air emissions that would
result from implementation of this rule would be speculative. Emissions
vary according to many different factors, including type of truck
engine, the year the engine was manufactured, fuel properties, the type
of hauler and weight of the load, the grade of the highways on the
transport routes, the distance traveled, speed and acceleration, and the
amount of wait time at the border ports. Due to the comparatively small
amount of truck transports (ranging from 2,600 to 8,920) that are
projected to result from this rule in relation to the baseline,
speculating on the specific air emissions that would result from this
rule would not result in information indicating that the indirect
impacts, unassociated with the scope of this rule, would contribute to
significant adverse impacts on the environment from resuming imports
from Canada of cattle over 30 months of age born on or after March 1,
1999.

The method of transporting cattle and the type of vehicle to be used are
not mandated by APHIS regulations. Emissions from the transport of
cattle, or of any commodity moved by modern transport methods, are
unavoidable. However, measures to reduce the impacts from vehicle
emissions are enforced by environmental statutes, such as the Clean Air
Act, at both the State and Federal levels and have been reported to be
effective in regulating and decreasing vehicle emissions. Mitigations
for vehicle emissions are under the jurisdiction of the U.S.
Environmental Protection Agency and State government agencies and are
outside of the mission of APHIS.

The commenter is correct that the EA did not discuss the contribution of
greenhouse gases from the transport trucks that would be used to import
cattle and did not discuss mitigation measures for greenhouse gases. We
note that draft guidance provided to Federal agencies from the Council
on Environmental Quality with regard to consideration of global climatic
change in environmental documents calls for consideration, in the
context of NEPA, of how major Federal actions could influence the
emissions and sinks of greenhouse gases and how climate change could
potentially influence such actions.[^27] We interpret that this guidance
does not apply to this rulemaking because it is not a major Federal
action that could influence the emissions and sinks of greenhouse
gases[^28].

[Issue]{.underline}: One commenter stated that APHIS' EA did not assess
the environmental impact of holding and feeding in the United States
each year hundreds of thousands of Canadian cattle 30 months of age or
older.

[Response]{.underline}: Approximately 34 million head of cattle are
slaughtered in the United States each year. Approximately 0.13 to 0.45
million additional head of cattle would be available annually and
eligible for importation from Canada under this rulemaking. The majority
of cattle that we anticipate being imported from Canada and held in
feedlots will be cattle under 30 months of age that are already allowed
importation from Canada under our January 2005 final rule. The majority
of additional cattle that we expect to be imported as a result of this
rulemaking would consist of cows, bulls, and stags imported directly for
slaughter that would remain in a holding facility of the slaughter
facilities for approximately 1 to 2 days before slaughter. A small
percentage of the remainder of the cattle that we expect to be imported
as a result of this rulemaking would consist of breeding cattle (for
example, dairy or beef cows and heifers and bulls) that would be
integrated into a cattle herd for an indefinite period of time. Thus,
for purposes of the EA, the cattle that would be imported would not be
held in feedlots for a long duration and would not contribute to an
increase to the baseline of the number of cattle produced in the United
States and held and fed in feedlots each year.

Pollutant discharges and emissions from holding cattle in feedlots are
unavoidable; however, measures to reduce the impacts from feedlot
discharges and emissions are enforced by environmental statutes, such as
the Clean Water Act and the Clean Air Act, at both the State and Federal
levels. Requirements for mitigating pollutant discharges and emissions,
under the jurisdiction of Federal and State government agencies, are
intended to protect the human environment of the United States.

[Issue]{.underline}: One commenter expressed the opinion that our EA was
inadequate because, according to the commenter, it failed to explain why
the potential for widespread distribution of infectious BSE prion
proteins is not a significant environmental impact. The commenter
expressed concern that blood and SRMs that will be collected when cattle
of Canadian origin that are over 30 months of age are slaughtered can be
used as fertilizer and be spread on the ground (and ingested as well as
running off into streams) on farms throughout the United States. The
commenter stated further that the EA did not assess the environmental
impact of distributing infectious BSE prion proteins in animal feed that
will be used (and spilled, disposed of, and excreted) on farms across
the United States. The commenter stated that OIE guidelines prohibit
trade in SRMs for use in fertilizer, as well as trade in fertilizer
contaminated with SRMs.

[Response]{.underline}: The commenter did not specify, and it is not
clear to us, in what manner the commenter anticipates prions being
widely distributed through animal feed and fertilizer and having a
significant impact on the quality of the human environment. Scientists
believe that the primary route of BSE transmission in cattle requires
that an animal ingest feed that has been contaminated with a sufficient
amount of tissue from an infected animal. In humans, vCJD, a chronic and
fatal neurodegenerative disease of humans, has been linked via
scientific and epidemiological studies to exposure to the BSE agent,
most likely through consumption of cattle products contaminated with the
BSE agent. Therefore, our assumption is that the commenter's primary
concern regarding the potential impact of feed and fertilizer on the
environment is the potential consumption of BSE-contaminated feed or
fertilizer by ruminants or humans. We also consider it possible that the
commenter is concerned about the potential for the BSE agent to be
consumed by animals other than ruminants, excreted by those animals, and
subsequently consumed by ruminants or humans.

The commenter stated that APHIS inadequately assessed the potential
environmental impact of contaminated feed and fertilizer. We disagree
with the commenter. Our EA evaluated the potential impact of the
proposed rule on the physical environment, public health, and endangered
species, as well as cumulative impacts of any of the above. The EA
referenced and discussed the conclusions of the risk assessment we
conducted for this rulemaking, in which we assessed the likelihood that
U.S. cattle would be exposed to the BSE agent as a result of this rule.
Our risk assessment examined the likelihood of exposure of ruminants to
BSE via feed.

Our evaluation of risk included an understanding that SRMs from live
cattle imported under the conditions of the proposed rule would enter
the U.S. rendering system, in the same fashion that SRMs from cattle of
U.S. origin are generally disposed of. The protein products from the
rendering system could then be incorporated into either animal feed or
fertilizer. We assumed in the risk assessment that the vast majority of
rendered protein products are sold for use in animal feed. The commenter
makes this assumption as well, stating that "...SRMs can be used as a
protein source for animal feed other than ruminant feed, and it is
reasonable to assume that they will be, given the favorable economics of
this use as compared to SRM disposal."

The quantitative exposure model used in the risk assessment specifically
simulated potential exposures through feed\--either through ruminant
feed that was mislabeled or cross-contaminated, through other animal
feed that was misfed to ruminants, or directly through poultry litter
that could contain spilled feed and be fed back to cattle. These
pathways are the most direct exposure of cattle that could occur.

We disagree with the commenter's assertion that APHIS did not consider
"spilled, disposed of, or excreted" animal feed as a potential pathway
of BSE transmission. The poultry litter pathway modeled in the
quantitative exposure model specifically addresses spilled and even
undigested excreted feed, with very conservative assumptions about
potential infectivity retained in such feed. The issue of feed being
"disposed of" is addressed through the misfeeding component of the
model, which incorporates situations where non-ruminant feed is fed
directly to cattle. These situations would include those where a
producer either mistakenly or intentionally feeds non-ruminant feed to
ruminants. Mislabeling and misfeeding components would include
situations where non-ruminant feed is sold for salvage value. We are not
aware of similar situations where litter or waste from other
species--for example, swine litter--that contains quantities of either
spilled or undigested feed is routinely used for cattle feed. Further,
there is no evidence to date of environmental contamination (e.g., via
fecal or other bodily excretions) being a route of transmission of BSE.
Therefore, we do not consider there to be potentially significant
pathways for exposure of susceptible animals to BSE-contaminated feed
that were not considered in the risk assessment.

With regard to potential exposure of humans to the BSE agent, there is
no evidence, anecdotal or otherwise, to suggest any likelihood of
BSE-contaminated animal feed, spilled or excreted, being consumed by
humans, and we consider the risk of such exposure to be negligible.

The commenter also stated that the EA should have examined the potential
impact on the environment of BSE-contaminated fertilizer. As noted
above, although rendered protein can be a component of fertilizer, such
usage is not common because most rendered proteins are sold for use in
feed. Any consideration of animal health exposure from fertilizer would
be an evaluation of the risk of cattle exposure to BSE through oral
consumption of fertilizer that contains rendered protein. Our
quantitative exposure model evaluates the potential oral exposure of
cattle to feed containing such rendered protein. It does not
specifically model potential exposure through fertilizer. However, it
assumes that all rendered ruminant protein products are sold for feed
use. Therefore, any of the infectivity contained in rendered ruminant
protein is already simulated through the potential for direct feed
exposure. This is a more direct pathway than any potential consumption
of a component of a fertilizer product, some undefined time after it was
spread on a pasture. Therefore, any potential exposure through
fertilizer would be assumed to be far less than the exposure the model
already takes into account through the consumption of feed.

It appears that the commenter is suggesting that raw, untreated SRMs
might be spread directly on land as fertilizer. Raw or untreated tissues
are not generally used as fertilizer, and, in fact, are often prohibited
from being spread on land through environmental regulations on
carcass/offal disposal and solid waste disposal. Therefore, this risk
pathway was not considered in our risk assessment.

With regard to the likelihood of exposure of humans to the BSE agent
through fertilizer, we are assuming the commenter is not referring to
potential consumption by humans of fertilizer, and is referring instead
to some other method of BSE transmission to humans through fertilizer.
As noted above, there is no evidence to date of environmental
contamination being a route of transmission of BSE.

Regarding the commenter's statement that OIE guidelines recommend that
trade not be carried out in SRMs for use in fertilizer, as well as trade
in fertilizer contaminated with SRMs, the primary purpose of such
guidelines is to reduce the possibility of the consumption by cattle of
such product due to mislabeling or misdirection of shipments--e.g.,
through having SRM-derived protein for fertilizer mistakenly sent to a
feed mill.

Other Issues

A number of commenters raised other issues that did not address the
provisions of the proposed rule.

[Requests Regarding the Importation of Additional
Commodities]{.underline}

We received comments that requested that bovine commodities not
specifically addressed in our proposed rule be made eligible for
importation into the United States.

[Issue]{.underline}: Several commenters requested that U.S. regulations
with regard to BSE allow the importation of the same commodities that
Canada considers eligible for importation from the United States.

[Response]{.underline}: Although, in most cases, Canadian and U.S.
import restrictions regarding BSE are comparable, we do not consider it
practical or advisable to attempt to mirror the regulations of another
country, given differences in regulatory approach, structure, and
authority.

[Issue]{.underline}: Commenters requested that the current regulations
be amended to allow the importation from BSE minimal-risk regions of
rendered feed products--including bovine-derived meat-and-bone meal and
blood meal--that are manufactured in compliance with U.S. regulations if
the products can be determined to meet the health protection objectives
of the recommended standards of the OIE.

[Response]{.underline}: The recommended standards of the OIE clearly
state that ruminant-derived rendered protein should not be traded from
either controlled risk or undetermined risk countries.

For the reasons discussed above, we are making no changes based on these
comments.

[APHIS' Use of the Term "Minimal-Risk Region"]{.underline}

[Issue]{.underline}: Several commenters requested that APHIS discontinue
classifying and referring to countries as "BSE minimal-risk regions."
The commenters stated that APHIS' definition of "minimal-risk regions"
does not follow the scientific terminology of the OIE, which classifies
countries with regard to BSE risk as "negligible," "controlled," or
"undetermined." One commenter stated that APHIS' classification of BSE
minimal-risk regions may create confusion and be seen as not accepting
the OIE categorization criteria.

[Response]{.underline}: At the time APHIS published its January 2005
final rule to recognize a category of BSE minimal-risk regions, the OIE
guidelines regarding BSE provided for five possible BSE classifications
for regions. For each classification, the guidelines recommended
different export conditions for live animals and products, based on the
risk presented by the region. Although APHIS did not incorporate the
text of OIE's BSE guidelines into its January 2005 rule, the agency
based its standards regarding BSE minimal-risk regions on these
guidelines. Although we are making no changes based on the comments, it
is APHIS' intent to develop rulemaking that would more closely employ
terminology used in the current OIE standards.

[BSE Surveillance in the United States]{.underline}

[Issue]{.underline}: Several commenters expressed general concern with
the effectiveness of the current BSE testing program in the United
States. One commenter stated that a report issued by the U.S. Office of
the Inspector General (OIG) called into question USDA's ability to
adequately detect BSE, even before the most recent reduction in the U.S.
surveillance program. The commenter stated that an OIG report pointed to
the voluntary nature of the surveillance program and the program's
sampling protocols as indicators that the surveillance program may not
have been providing an accurate picture of BSE prevalence in the United
States. The report also noted that the surveillance program, which
focused on high-risk cows, did not account for emerging evidence that
BSE has been detected in seemingly healthy animals.

[Response]{.underline}: We assume the commenters are referring to an OIG
audit report issued in August 2004. This audit was conducted prior to
the implementation of the enhanced surveillance program and, therefore,
was limited in the conclusions that could be made about the performance
of that effort. The report stated the following: "Our review was limited
because implementation plans have not been finalized and APHIS has not
yet been able to address some of the questions we have raised."
Nevertheless, APHIS responded to the recommendations provided by OIG and
addressed the issues raised. A second audit report was issued in January
2006, covering both the surveillance program and FSIS' controls on SRM
requirements and advanced meat recovery products. This report included a
recommendation, among others, for transparency in the analysis and
conclusions derived from the data obtained during the surveillance
efforts. APHIS has subsequently completed and released a detailed
summary of the data obtained during the enhanced surveillance effort,
and an estimate of the prevalence of BSE in the United States adult
cattle population. This analysis concluded that the prevalence of the
disease in this country is extremely low, less than 1 case per million
adult cattle. Two models were used to estimate the prevalence, and the
most likely values calculated by these models for the estimated number
of cases were 4 or 7 infected animals out of 42 million adult cattle.
APHIS' analysis was submitted to the scrutiny of a peer review process,
and the expert panel agreed with the appropriateness of APHIS'
assumptions and the factors it considered, as well as with the estimate
of BSE prevalence.

[Country-of-Origin Labeling]{.underline}

A number of commenters recommended that APHIS postpone implementation of
this rule until mandatory country-of-origin labeling, as prescribed by
the 2002 Farm Bill, is in place in this country.

[Response]{.underline}: On May 13, 2002, President Bush signed into law
the Farm Security and Rural Investment Act of 2002, more commonly known
as the 2002 Farm Bill. One of its many initiatives requires country of
origin labeling (COOL) for beef, lamb, pork, fish, perishable
agricultural commodities and peanuts. On January 27, 2004, President
Bush signed Public Law 108-199 which delays the implementation of
mandatory COOL for all covered commodities except wild and farm-raised
fish and shellfish until September 30, 2006. On November 10, 2005,
President Bush signed Public Law 109-97, which delays the implementation
for all covered commodities except wild and farm-raised and shellfish
until September 30, 2008. As described in the legislation, program
implementation is the responsibility of USDA\'s Agricultural Marketing
Service.

The COOL program, when fully implemented, will address the concerns
raised by commenters with regard to APHIS' proposed rule. APHIS does not
consider it necessary to delay implementation of this rule until those
labeling provisions are implemented. In its October 30, 2004 proposal,
AMS noted, in discussing Section 10816 of Public Law 107-171 (7 U.S.C.
1638-1638d) regarding COOL that the "intent of the law is to provide
consumers with additional information on which to base their purchasing
decisions. It is not a food safety or animal health measure. COOL is a
retail labeling program and as such does not address food safety or
animal health concerns."

[Comments on Other Issues Outside the Scope of this
Rulemaking]{.underline}

A number of other comments also addressed topics outside the scope of
the proposed rule. These comments included the following issues: Concern
that the examination and euthanization of cattle be carried out in a
humane fashion; a request to extend the U.S. ban on the slaughter of
nonambulatory cattle to include all livestock species; recommendations
regarding the type of penalties USDA should impose for noncompliance
with the regulations; comparison of U.S. and Canadian regulations
regarding the rendering of cattle slaughtered on-farm; the importation
of composted bovine manure from BSE minimal-risk regions; a request to
allow the importation of breeding stock and embryos of small ruminants,
such as sheep; a request that the USDA allow the importation from BSE
minimal-risk regions of up to 5 kilograms of bovine meat and meat
products for personal use without certification; and concerns regarding
diseases other than BSE.

For the reasons discussed above, we are making no changes to the
proposed rule based on these comments.

Final Report from Peer Review of APHIS' Risk Assessment and Responses to
Peer Reviewer Questions and Recommendations

As discussed above under the heading "Peer Review of APHIS' Risk
Assessment," we requested an external, formal, and independent peer
review of our risk assessment by recognized experts in the field. The
objective of the peer review was to determine whether the risk
assessment was scientifically sound, transparent, and consistent with
international standards (e.g., those developed by OIE); the application
of external assessments or models was appropriate; and the assumptions
were justified, supported and reasonable. In summary, the reviewers
found that the methods used in the risk assessment were scientifically
rigorous in terms of using existing literature and models appropriately
and making sound assumptions and that the risk assessment itself adhered
to international risk assessment standards. The reviewers also agreed
with the conclusion that the likelihood of establishment of BSE in the
U.S. cattle population is negligible. They also asked a variety of
questions and suggested minor refinements. APHIS' full response to the
comments and recommendation of the peer reviewers may be viewed on the
APHIS Web site
(http://www.aphis.usda.gov/newsroom/hot_issues/bse/index.shtml).

Some of the questions raised by peer reviewers were also posed in public
comments on our proposed rule and are addressed above in our responses
to public comments. In addition, we set forth here certain other
questions and recommendations from peer reviewers that we consider
representative of the content-related questions and recommendations of
the report, and our response to those questions and recommendations.

[Issue]{.underline}: A reviewer suggested that we more explicitly list
the specific risks to be addressed in the assessment.

[Response]{.underline}: The risk of BSE evaluated in the assessment is
the expected impact of importing from Canada live animals, blood and
blood products, and small intestines excluding distal ileum. These
impacts include the potential for establishment of BSE in the United
States and the projected consequences of any additional cases that might
occur even without establishment. The risk was evaluated qualitatively
for all commodities and also quantitatively for additional live animal
import scenarios. For the latter, the likelihood of establishment is
measured by the disease reproductive rate (R~0~). We also simulated the
total number of animals in the United States that might become infected
with BSE as a result of the importation of live bovines from Canada over
the 20 years. Of the infected animals, those that we assumed might have
economic impacts were only the animals expected to live long enough to
display clinical signs, as these are the most likely to be detectable
with current testing methods. We have added this clarification to the
Introduction of the revised risk assessment.

[Issue]{.underline}: A reviewer suggested that the analysis needs to
acknowledge the exogenous sources of BSE into Canada. As phrased by the
reviewer:

> For the assumption that BSE prevalence in Canada would decrease over
> the next 20 years until the disease is eradicated, the authors relied
> on compelling evidence from the U.K. experience with the ruminant feed
> ban and the resulting dramatic decrease in BSE prevalence in cattle.
> However, this did not address any issues associated with exogenous
> sources of BSE into Canada (imports from other BSE-affected
> countries). The Canadian prevalence model used for this analysis
> appears to assume no new exogenous sources of BSE. The dilution of
> risk due to current practices that reduce the likelihood of spread of
> prions through the Canadian cattle herd make this risk minimal at
> best, but it should be addressed for the sake of completeness.

[Response]{.underline}: The prevalence estimation models use BSE
surveillance data (test results from dead or slaughtered cattle) as
inputs and therefore cannot differentiate whether the source of
infectivity is endogenous (recycled) or exogenous (introduced). Also,
because they are based on actual surveillance data, they cannot attempt
to predict any changes in Canadian BSE prevalence over the next 20
years. The qualitative prediction of a drop in prevalence is based on
the experience in the United Kingdom and does not assume that no
additional infectivity can be introduced. In addition, the results of
the U.S. Harvard model presented in our risk assessment illustrate that,
despite the recurrent release of "exogenous infectivity" (in this case,
from Canada), the reproductive constant, R~0~, remains well below one,
indicating that the mitigations in place (particularly the ruminant feed
ban) are effective in driving disease prevalence downward. Since the
feed ban in Canada is very similar to that in the United States, we
expect that any additional infectivity that may potentially enter Canada
would fail to alter our predictions of a decrease in prevalence over
time. For these reasons, we do not explicitly address the source of BSE
infectivity in Canada as either endogenous or exogenous.

[Issue]{.underline}: A reviewer suggested that we address the amount of
uncertainty that is associated with the conclusion that the likelihood
of releasing BSE into the United States from Canada via importation of
live bovines is extremely low. He suggested that we report and use the
95^th^ confidence levels throughout the assessment.

[Response]{.underline}: Uncertainty between prevalence estimation models
(BBC or BSurvE) is greater than the statistical uncertainty within
prevalence estimation models (represented by confidence levels for a
given model). Therefore, uncertainty about prevalence is addressed by
considering the two expected (average) prevalence estimates obtained
with different models. The reviewer also commented that the expectation
that prevalence remains stable at the lower level estimated by the BBC
model over the next 20 years is "a very pessimistic assumption."
Similarly, another reviewer stated that it is "very reasonable" to
assume that BSE prevalence in Canada will decrease over the next 20
years until the disease is eradicated . If these assertions are correct,
then assuming that prevalence remains stable at the 95 percent (or 99
percent) confidence level estimated by the BSurvE model over the next 20
years would simply result in a more extremely pessimistic assumption. A
reviewer commented: "It should...be pointed out that the other
pessimistic assumptions in the Exposure Assessment model (for example no
decrease in BSE prevalence over the next 20 years) would likely override
any underestimate of the present BSE prevalence due to using the mean
BBC prevalence estimate." For the reasons noted above, we have elected
not to rerun the exposure model using the 95 (or 99) percent confidence
level.

[Issue]{.underline}: A reviewer commented that "\[o\]ne argument that
might be made is that introduction will not lead to an establishment of
a cycle of infection but may extend the temporal occurrence of the
number of cases of BSE in the U.S. Are there any adverse economic
effect\[s\] associated with this outcome? One possibility is that
testing levels might need to be maintained for a longer time than if
there were no more introduced and detected BSE cases. Market access and
prices for beef and beef products might also be adversely affected."

[Response]{.underline}: The APHIS risk assessment did not consider
endogenous levels of BSE in the U.S. cattle herd; however, continuous
exogenous inputs of BSE infectivity from Canada (as is assumed in the
less likely quantitative scenarios of the risk assessment) or any other
source would extend the time to eradication of the disease in the United
States. Although the incremental duration of the extended time to
eradication is unknown, we expect that it would have little or no
practical effect on the potential economic impacts of BSE in the United
States. We note that the exposure model, which incorporates several
risk-inflating assumptions, estimates that, over the 20 years of the
analysis, there will be less than one clinical case of BSE in the United
States as a result of the cattle imported from Canada. Given that the
United States has already detected three BSE cases (two in native
cattle), we do not expect any incremental impact (from a lengthened
period of testing or from additional market impacts) of this very small
number of potential additional cases. This point is described in detail
in the consequence section of our risk assessment.

[Issue]{.underline}: One reviewer requested greater attention to
uncertainty throughout the document. The reviewer stated, in reference
to our risk assessment, that "uncertainty is consistently underplayed if
not ignored" and "it would perhaps be useful to actually list the
sources of uncertainty in each of the sections. Another commenter
suggested that we list all the model inputs considered to be variable.

[Response]{.underline}: We disagree with the reviewers. Though not
always addressed as distinct lists, uncertainty and varibiality are
incorporated throughout the risk assessment. The models used in the risk
assessment are complex with a large number of inputs, which, as for most
models, may be somewhat uncertain and/or variable. However, preparing a
comprehensive list of uncertain and/or variable risk assessment model
inputs is not necessary. In our judgment, the inputs are better
discussed in the context of how they are used in the model.

All of the BSE prevalence estimation model inputs represent best
available estimates of either a variability distribution (e.g., BSE
incubation period, cattle age structure) or a parameter value (e.g.,
number of adult animals in the herd, age of a BSE tested animal).
Consequently, the calculated confidence intervals represent statistical
uncertainty about current BSE prevalence related to random sampling
error. The major source of uncertainty regarding BSE prevalence in the
current standing cattle population was considered to be the effect of
the Canadian feed ban. This uncertainty was addressed by considering two
BSE prevalence estimation models: The BBC model, which incorporates an
estimate of the effect of the feed ban based on evidence from the United
Kingdom, and the BSurvE Prevalence B model, which makes no assumptions
about the effect of the feed ban. Variability also entered into the
prevalence calculation in that the BBC prevalence model assumes that
birth year cohort prevalence declined during the first five years after
Canada introduced a feed ban in 1997. Thereafter, both the BBC and
BSurvE models were used to obtain the expected proportion of BSE
infected animals, which is assumed to remain constant over time in the
quantitative risk analysis.

Another component of the release assessment, for which uncertainty has
not been addressed, is the projection of imports. These projections were
prepared by USDA ERS and were based on USDA baseline projections and a
broad array of expert opinion. Because they are projections, they are
uncertain. This uncertainty has been reduced somewhat by incorporating
more recent data into the 2007 import projections, prepared for the
final rule. Based on these updates, we expect lower numbers of older
animals to be imported in the early years of the rule's implementation.
The total imports over the entire 20 years of the analysis are only
slightly (125,000 animals) higher than the original and so do not confer
significant additional magnitude of release (125,000\*0.68\*10^-6^=0.085
cases; 125,000\*3.9\*10^-6^=0.49 cases). Therefore, although the import
projections are somewhat uncertain, reduction of this uncertainty has
not significantly changed our release estimates or conclusions.

The projections used in the original analysis incorporated temporal
variability across years due to the cattle cycle. The variability
considered did not include possible but less likely extremes (shocks),
such as a temporary spike in slaughter rates due to severe weather.

The parameters for the exposure model have been described in earlier
documents (Cohen, [et]{.underline} [al]{.underline}., 2003). These
documents explicitly examined the effects of uncertainty in key
parameters in their respective sensitivity analyses. The version of the
Harvard model performed for this rule included a sensitivity analysis to
examine the uncertainty of several parameters -- some of which were
included in earlier models, and some of which were new parameters (e.g.,
the amount of chicken litter incorporated into ruminant feed) and the
Canadian BSE prevalence estimate) (APHIS 2007a). Of the uncertain
parameters examined, Canadian BSE prevalence over the next 20 years was
the most significant source of uncertainty for the model. This
uncertainty contains two components: the estimate of prevalence in
Canada's current standing cattle population, and how prevalence of BSE
in Canada will change over time. This latter component was not treated
quantitatively, and its uncertainty was therefore not explicitly
analyzed in the sensitivity analysis. Variability in this parameter was
addressed, however. Assuming constant prevalence over the next 20 years,
the simulated number of BSE infected cattle imported each year still
varies, because it is a combination of the predicted import volume
(which varies as described above), and the sampling variation (using a
Poisson distribution) about the expected prevalence value. This source
of variation has already been described in the risk assessment.

In conclusion, rather than perform a comprehensive uncertainty analysis
in which all model inputs are treated as statistical distributions, we
identified and evaluated the potential contributions to variability and
uncertainty that we deemed most relevant to our analysis. Given that the
uncertainty about the key inputs to the risk assessment models has been
considered, we agree with the reviewers that further uncertainty
analysis will not affect the conclusions of the risk assessment.

Adoption of this Final Rule

Therefore, for the reasons given in the proposed rule and in this final
rule, we are adopting the proposed rule as a final rule, without change

Applicability of the March 1, 1999, Date to Imports of Beef

[Issue]{.underline}: Several commenters stated that it was not clear
from the proposed rule whether the March 1, 1999, date of birth
requirement for live bovines imported into the United States from Canada
would apply as well to frozen beef products derived from cattle
slaughtered in Canada and shipped to the United States. If the same
effective date does not apply, stated the commenter, USDA should specify
what date would be used for imported frozen beef products. One commenter
stated that, in addition to prohibiting the importation of beef from
cows born before March 1, 1999, the regulations should limit the
importation of beef from BSE minimal-risk regions to that derived from
cows slaughtered no earlier than March 1, 1999.

[Response]{.underline}: We do not consider it necessary to address the
importation of beef from BSE minimal-risk regions in this rulemaking,
because the importation conditions for meat, meat byproducts, and meat
food products derived from bovines were addressed in the rulemaking for
our January 2005 final rule (in which we added the category of BSE
minimal-risk regions to the regulations and specified which commodities
may be imported from such regions). The risk analysis we conducted for
that rulemaking indicated a low BSE risk from such commodities derived
from bovines of any age if certain conditions are met. In that
rulemaking, we discussed regulatory requirements implemented by FSIS in
2004 that banned SRMs from the human food supply in the United States,
and we stated that Number range CHAPTERthe Canadian Government had
established similar safeguards in Canada.

Consequently, we provided in § 94.19 of the regulations Number range
CHAPTERthat meat, meat byproducts, and meat food products derived from
bovines are eligible for importation from BSE minimal-risk regions if
the following conditions, as well as all other applicable requirements
of the regulations, are met:

● The commodity is derived from bovines that have been subject to a
ruminant feed ban equivalent to the requirements established by the U.S.
Food and Drug Administration at 21 CFR 589.2000;

● The commodity is derived from bovines for which an air-injected
stunning process was not used at slaughter; and

● The SRMs and small intestine of the bovines from which the commodity
was derived were removed at slaughter.

Because there is negligible risk from bovine meat, meat byproducts, and
meat food products that meet the above requirements, there is no
science-based reason to require that such commodities be derived from
bovines born on or after March 1, 1999. As long as the commodities meet
the conditions listed above (with the exception of the condition
regarding small intestine as discussed in this rule), the regulations
will allow for their importation into the United States. We note that
the OIE guidelines for trade in fresh meat and meat products from cattle
from controlled risk regions (both Canada and the United States are
classified as BSE controlled risk regions under the OIE guidelines)
recognize the negligible risk presented by such products as long as SRMs
are removed, and, therefore, the guidelines do not recommend that the
date of birth of the animal from which the commodity was derived be a
condition for such trade.

Comments Regarding the Partial Delay in Applicability of the January
2005 Final Rule

[Issue]{.underline}: As discussed above in this document, in March 2005,
APHIS published a final rule in the [Federal]{.underline}
[Register]{.underline} that, pursuant to an announcement by the
Secretary of Agriculture in February 2005, delayed the applicability of
the provisions in our January 2005 final rule as they apply to the
importation from Canada of meat, meat food products, and meat byproducts
(other than liver) when derived from bovines 30 months of age or older
when slaughtered, as well as certain other bovine products when derived
from bovines 30 months of age or older.

A number of commenters either questioned whether the delay in
applicability would be lifted if our January 2007 proposed rule were
made final, or requested that the delay be lifted.

[Response]{.underline}: As discussed above, it is the Secretary's intent
to remove the delay in applicability when this rule becomes effective.

Number range CHAPTERExecutive Order 12866 and Regulatory Flexibility Act

This rule has been reviewed under Executive Order 12866. The rule has
been determined to be economically significant for the purposes of
Executive Order 12866 and, therefore, has been reviewed by the Office of
Management and Budget.

We have prepared an economic analysis for this rule. The economic
analysis provides a cost-benefit analysis as required by Executive Order
12866 and a final regulatory flexibility analysis that examines the
potential economic effects on small entities as required by section 604
of the Regulatory Flexibility Act. The economic analysis is summarized
below. Copies of the full analysis may be viewed on the APHIS Web site
(http://www.aphis.usda.gov/newsroom/hot_issues/bse/index.shtml), or be
obtained by contacting the persons listed under FOR FURTHER INFORMATION
CONTACT.

This rule will allow the importation, under certain conditions, of the
following commodities from BSE minimal-risk regions (currently only
Canada):

• Live bovines that were born on or after March 1, 1999;

• Bovine small intestines, minus the distal ileum;

• Bovine casings; and

• Bovine blood and blood products.

APHIS has determined that the previous restrictions are not warranted by
scientific research and evidence, and that they are unnecessary for
maintaining a negligible risk (i.e., the likelihood of establishment and
the potential impacts of cases that may occur even without
establishment) to the United States via imports of live bovines and
bovine products from such regions.

Additionally, this rule removes the delay of applicability of provisions
of our January 2005 final rule regarding the importation of meat, meat
products, and meat byproducts derived from bovines in Canada that were
30 months of age or older when slaughtered.

This regulatory impact analysis (RIA) addresses expected economic
effects of allowing resumption of imports from Canada of the above
commodities. Expected benefits and costs are examined in accordance with
Executive Order 12866. Expected economic impacts for small entities are
also evaluated, as required by the Regulatory Flexibility Act. Our
analysis indicates that benefits of the rule will exceed costs overall.
Effects for Canadian and other foreign entities are not addressed in
this analysis. However, the Agency expects reestablished access to U.S.
markets to benefit Canadian producers and suppliers of commodities
included in the rule.

[Analytical Approach]{.underline}

The approach and models used in this analysis are the same as were
applied in the preliminary RIA that we prepared for our January 2007
proposed rule. Impacts for cattle for feeding or for immediate slaughter
and impacts for beef are quantitatively modeled. Impacts for other
affected commodities---breeding cattle including dairy, vealers and
slaughter calves, bison, bovine casings and small intestine products,
and bovine blood and blood products---are examined largely
qualitatively. For the modeled cattle and beef, we project a 5-year
baseline, 2008-2012, against which we measure expected price and welfare
effects of projected levels of cattle and beef imports from Canada. We
evaluate price and welfare effects for the three scenarios that were
considered in the preliminary RIA, as follows:

-   Scenario 1: Allow imports of Canadian cattle born on or after March
    1, 1999;

-   Scenario 2: Allow imports of Canadian cattle unrestricted by date of
    birth; and

-   Scenario 3: The same as scenario 1, with the addition of the
    resumption of imports of beef from Canadian cattle slaughtered at 30
    months or older (called over-30-month, or OTM beef).

As a fourth scenario, we consider imports of Canadian cattle
unrestricted by date of birth, with the resumption of OTM beef imports.
Projected imports under this scenario 4 are described, but the expected
impacts are not evaluated, for reasons explained below.

Beginning with baseline quantities and prices, we compute effects of the
projected changes in imports from Canada for four commodity categories:
Cull cattle/processing beef, feeder cattle, fed cattle, and fed beef.
The resumption of cull cattle imports is expected to affect the
slaughter mix in Canada, and that change in the slaughter mix will be
reflected in changes in the mix of exports to the United States.

As part of this adjustment, for example, we expect that more fed steers
and heifers will be slaughtered in Canada and fewer will be exported to
the United States than if cull cattle imports were not reestablished.
Canada's cattle inventory increased rapidly following the diagnosis of
BSE in a Canadian cow in May 2003 and Canada's subsequent loss of export
markets for cattle and beef. In response, Canada's slaughter capacity
expanded. Beginning in July 2005, with the resumption of imports by the
United States of Canadian feeder cattle and fed cattle, some Canadian
plants continued to utilize their expanded slaughter capacity by
shifting to increased cull cattle slaughter. Canadian cull cattle
slaughter would likely continue to expand if the United States were to
remain closed to imports of Canadian cull cattle. However, with this
rule, we can expect some substitution in Canada of cull cattle slaughter
by fed cattle slaughter.

Importation of fewer fed cattle from Canada, all things equal, will
cause the price of fed cattle in the United States to rise. We estimate
the expected increase in price and, because of the price rise, the
decrease in the quantity of fed cattle demanded by U.S. slaughter and
packing establishments and the increase in the quantity of fed cattle
supplied by U.S. feedlots. The analysis yields measures of welfare
change, which in this example are in terms of surplus losses for U.S.
buyers and surplus gains for U.S. sellers of fed cattle.

For each of the first three scenarios, we compute impacts for the
modeled commodities using the Baseline Analysis System (BAS) model.[^29]
Impacts are also summed for each scenario. The BAS model is a net trade,
non-spatial partial equilibrium model. Partial equilibrium means that
the model results are based on maintaining a commodity-price equilibrium
in a limited portion of an overall economy. Commodities not explicitly
included in the model are assumed to have a negligible influence on the
results. The simple summation of the separate partial equilibrium
results using the BAS model does not take into account market dynamics,
but does provide a reasonable approximation of the combined welfare
effects for each scenario.

We also examine impacts more broadly using a multi-sector model that
takes into account substitution among livestock products in response to
relative price changes.[^30] This model maps interactions among the
grain, animal, and animal products industries. It takes into account
substitution among livestock products in response to relative price
changes, incorporates foreign trade, and yields expected price and
revenue effects. The simulated multi-sector impacts tend to be smaller
than the BAS model results because the model linkages specified between
the

livestock production and processing sectors capture at least some of the
flexibility that industry enterprises exhibit when adjusting to supply
shocks. These results support our expectation that broader impacts of
the rule will be limited.

Baseline quantities and prices and imports from Canada have been
projected by staff of USDA ERS, Market and Trade Economics Division,
Animal Products, Grains, and Oil Seeds Branch, based on their expert
knowledge and reference to "USDA Agricultural Baseline Projections to
2016," United States Department of Agriculture, Interagency Agricultural

Projections Committee, Baseline Report OCE-2007-1, February 2007.[^31]

[Projected Imports from Canada]{.underline}

[Scenario 1]{.underline}. Table A shows the projected changes in cattle
and fed beef imports from Canada under scenario 1 (in which imports of
Canadian cattle born on or after March 1, 1999, are allowed). Under this
scenario, cull cattle imports from Canada are projected to total 104,000
head in 2008 and average 147,800 head over the 5-year period of
analysis. These import numbers are considerably smaller than were
projected in the preliminary RIA because we now have a better
understanding of the extent to which the birth-date restriction and
age-verification requirement may limit the number of cull cattle
eligible for import. Annual declines in feeder cattle and fed cattle
imports are projected to average 6,800 head and 56,800 head,
respectively. These declines correspond to projected changes in the
overall Canadian cattle inventory, with the import volumes for fed
cattle further adjusted downward to reflect greater competition from
Canadian packers due to the resumption of U.S. imports of cull cattle.
Yearly fed beef imports are projected to increase by an average of 45.8
million pounds, carcass weight equivalent.

All of the changes under scenario 1 are small when compared to the
commodities' projected U.S. baseline supplies. The changes in imports
for feeder cattle, fed cattle, and fed beef imports, in particular, are
projected to be only fractions of 1 percent of baseline supplies. Under
scenario 1, the number of cull cattle projected to be imported in 2008
is less than 2 percent of projected U.S. baseline cull cattle slaughter
quantities. Over the period of analysis, cull cattle imports are
projected to average 2.5 percent of baseline quantities. Cull cattle
imports are projected to increase in the latter years of the analysis,
and even more so in subsequent years, as higher percentages of Canada's
cull cattle inventory are able to be verified as having been born on or
after March 1, 1999. A relative increase in the number of cull cattle
imported over time is projected to be associated with, in turn, a
relative decrease in the quantity of fed cattle imports and a relative
increase in the quantity of fed beef imports.

Baseline projections over the 5-year period, 2008-2012, show the United
States importing a little over 40 percent of its supply of processing
beef. A share of the cull cattle imported from Canada will yield
processing beef that will substitute for processing beef that otherwise
would be imported from other countries, while a share of the imported
cull cattle will yield processing beef that will replace a quantity of
processing beef that would otherwise be domestically supplied, as U.S.
producers respond to lower prices. The remaining share of cull cattle
imports will yield processing beef that will represent a net increase in
U.S. processing beef supplies.

We use 25 percent as the percentage of cull cattle imports from Canada
projected to displace U.S. processing beef imports from elsewhere. The
25 percent share is estimated using the multi-sector model and takes
into account the interactions of the beef processing sector with the
beef cattle and dairy cattle sectors. For comparison, we also compute
price and welfare effects assuming that 50 percent of cull cattle
imported from Canada displace processing beef imports, and assuming,
alternatively, that none of the imported cull cattle displace processing
beef imports.

[Scenario 2]{.underline}. In Table B, we show the projected changes in
cattle and fed beef imports from Canada under scenario 2 (in which
imports of Canadian cattle unrestricted by birth date are allowed).
Under this scenario, imports of cull cattle and changes in imports of
fed cattle and fed beef are all projected to be much larger than in
scenario 1. Feeder cattle imports are projected to be the same under all
of the scenarios. Projected cull cattle imports in scenario 2 average
459,800 head per year over the period of analysis, or 7.8 percent of
U.S. baseline slaughter quantities. This amount is more than three times
cull cattle imports projected in scenario 1. The fed cattle and fed beef
changes remain a fraction of 1 percent of the U.S. baseline supplies,
but are also larger. The increased number of cull cattle imported in
this scenario is projected to be associated with larger declines in fed
cattle imports and larger increases in the fed beef imports. We again
estimate that 25 percent of cull cattle imports from Canada under this
scenario displace processing beef imports from other sources. Price and
welfare analyses assuming that 50 percent of the imported cull cattle
displace processing beef imports and that none of the cull cattle
displace processing beef imports are also presented.

[Scenario 3]{.underline}*.* Table C shows the projected changes in
cattle and beef imports from Canada under scenario 3 (in which imports
of Canadian cattle born on or after March 1, 1999, are allowed and
imports of OTM beef resume). In scenario 3, impacts derive from the
resumption of OTM beef imports as well as the cull cattle imports from
Canada. Projected cull cattle imports are lower than in scenario 1
(averaging 106,000 head per year over the 5-year period, compared to
147,800 head) because of the entry of OTM beef. Similarly, changes in
projected fed cattle and fed beef imports are somewhat smaller than the
changes projected in scenario 1. Processing beef imports from Canada
under scenario 3 are projected to average 254.6 million pounds per year,
carcass weight equivalent, or about 4.1 percent of the U.S. baseline
supply. The quantity of processing beef imported is projected to decline
and the quantity of cull cattle imported is projected to increase in the
latter years of the 5-year period, as an increasing number of cull
cattle become eligible for importation---i.e., can be verified as having
been born on or after March 1, 1999. Under scenario 3, and considering
imports of cull cattle (based on the cattle's processing beef
equivalence) and processing beef as a single market, 77 percent of cull
cattle and processing beef imports from Canada are projected to enter
the United States as OTM beef over the 5-year period of the analysis,
while 23 percent of these imports are projected to enter as cull cattle.
Consistent with scenarios 1 and 2, we use 25 percent as the share of the
cull cattle and OTM beef imports from Canada that displaces processing
beef imports from other countries. We also present the price and welfare
effects assuming that either 50 percent or none of the cull cattle and
OTM beef imports from Canada displace processing beef imports from
elsewhere.

[Scenario 4]{.underline}*.* In table D, we show the projected changes in
cattle and fed beef imports from Canada under scenario 4 (in which
imports of Canadian cattle unrestricted by birth date are allowed and
imports of OTM beef resume). As in scenario 2, imports of cull cattle
and changes in imports of fed cattle and fed beef are all projected to
be larger than in scenarios 1 and 3.

Projected cull cattle imports in scenario 4 average 328,200 head per
year over the period of analysis, or 5.5 percent of U.S. baseline
slaughter quantities. The fed cattle and fed beef changes remain a
fraction of 1 percent of the U.S. baseline supplies.

  ------------ ------------------------- -------------------- -------------------- -------------------- -------------------- --------------------
  Table A.                                                                                                                   
  Projected                                                                                                                  
  changes in                                                                                                                 
  imports of                                                                                                                 
  cull cattle,                                                                                                               
  feeder                                                                                                                     
  cattle, fed                                                                                                                
  cattle, fed                                                                                                                
  beef, and                                                                                                                  
  processing                                                                                                                 
  beef from                                                                                                                  
  Canada under                                                                                                               
  scenario 1,                                                                                                                
  and                                                                                                                        
  projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada as a                                                                                                                
  percentage                                                                                                                 
  of the                                                                                                                     
  projected                                                                                                                  
  U.S.                                                                                                                       
  baseline                                                                                                                   
  supplies,                                                                                                                  
  2008-2012                                                                                                                  

                                         [2008]{.underline}   [2009]{.underline}   [2010]{.underline}   [2011]{.underline}   [2012]{.underline}

                                                                                                                             

  Projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada                                                                                                                     

               Cull cattle (thousand     104                  110                  113                  187                  225
               head)                                                                                                         

               Feeder cattle (thousand   -1                   9                    -5                   -16                  -21
               head)                                                                                                         

               Fed cattle (thousand      -30                  -4                   -43                  -93                  -114
               head)                                                                                                         

               Fed beef (million pounds, 24                   3                    35                   75                   92
               carcass weight                                                                                                
               equivalent)                                                                                                   

               Processing beef (million  0                    0                    0                    0                    0
               pounds, carcass weight                                                                                        
               equivalent)                                                                                                   

                                                                                                                             

  Projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada as a                                                                                                                
  percentage                                                                                                                 
  of the                                                                                                                     
  projected                                                                                                                  
  U.S.                                                                                                                       
  baseline                                                                                                                   
  supply                                                                                                                     

               Cull cattle               1.8%                 1.9%                 1.9%                 3.1%                 3.7%

               Feeder cattle             nil                  nil                  nil                  nil                  -0.1

               Fed cattle                -0.1%                nil                  -0.1%                -0.3%                -0.4%

               Fed beef                  0.1%                 Nil                  0.2%                 0.3%                 0.4%

               Processing beef           0                    0                    0                    0                    0
  ------------ ------------------------- -------------------- -------------------- -------------------- -------------------- --------------------

  ------------ ------------------------- -------------------- -------------------- -------------------- -------------------- --------------------
  Table B.                                                                                                                   
  Projected                                                                                                                  
  changes in                                                                                                                 
  imports of                                                                                                                 
  cull cattle,                                                                                                               
  feeder                                                                                                                     
  cattle, fed                                                                                                                
  cattle, fed                                                                                                                
  beef, and                                                                                                                  
  processing                                                                                                                 
  beef from                                                                                                                  
  Canada under                                                                                                               
  scenario 2,                                                                                                                
  and                                                                                                                        
  projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada as a                                                                                                                
  percentage                                                                                                                 
  of the                                                                                                                     
  projected                                                                                                                  
  U.S.                                                                                                                       
  baseline                                                                                                                   
  supplies,                                                                                                                  
  2008-2012                                                                                                                  

                                         [2008]{.underline}   [2009]{.underline}   [2010]{.underline}   [2011]{.underline}   [2012]{.underline}

                                                                                                                             

  Projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada                                                                                                                     

               Cull cattle (thousand     459                  459                  459                  460                  462
               head)                                                                                                         

               Feeder cattle (thousand   -1                   9                    -5                   -16                  -21
               head)                                                                                                         

               Fed cattle (thousand      -119                 -91                  -129                 -161                 -173
               head)                                                                                                         

               Fed beef (million pounds, 96                   74                   105                  131                  140
               carcass weight                                                                                                
               equivalent)                                                                                                   

               Processing beef (million  0                    0                    0                    0                    0
               pounds, carcass weight                                                                                        
               equivalent)                                                                                                   

                                                                                                                             

  Projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada as a                                                                                                                
  percentage                                                                                                                 
  of the                                                                                                                     
  projected                                                                                                                  
  U.S.                                                                                                                       
  baseline                                                                                                                   
  supply                                                                                                                     

               Cull cattle               8.2%                 7.8%                 7.6%                 7.6%                 7.6%

               Feeder cattle             nil                  nil                  nil                  nil                  -0.1

               Fed cattle                -0.4%                -0.3%                -0.4%                -0.5%                -0.6%

               Fed beef                  0.4%                 0.3%                 0.5%                 0.6%                 0.6%

               Processing beef           0                    0                    0                    0                    0
  ------------ ------------------------- -------------------- -------------------- -------------------- -------------------- --------------------

  ------------ ------------------------- -------------------- -------------------- -------------------- -------------------- --------------------
  Table C.                                                                                                                   
  Projected                                                                                                                  
  changes in                                                                                                                 
  imports of                                                                                                                 
  cull cattle,                                                                                                               
  feeder                                                                                                                     
  cattle, fed                                                                                                                
  cattle, fed                                                                                                                
  beef, and                                                                                                                  
  processing                                                                                                                 
  beef from                                                                                                                  
  Canada under                                                                                                               
  scenario 3                                                                                                                 
  and                                                                                                                        
  projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada as a                                                                                                                
  percentage                                                                                                                 
  of the                                                                                                                     
  projected                                                                                                                  
  U.S.                                                                                                                       
  baseline                                                                                                                   
  supplies,                                                                                                                  
  2008-2012                                                                                                                  

                                         [2008]{.underline}   [2009]{.underline}   [2010]{.underline}   [2011]{.underline}   [2012]{.underline}

                                                                                                                             

  Projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada                                                                                                                     

               Cull cattle (thousand     75                   79                   81                   134                  161
               head)                                                                                                         

               Feeder cattle (thousand   -1                   9                    -5                   -16                  -21
               head)                                                                                                         

               Fed cattle (thousand      -23                  4                    -34                  -80                  -98
               head)                                                                                                         

               Fed beef (million pounds, 18                   -3                   28                   65                   79
               carcass weight                                                                                                
               equivalent)                                                                                                   

               Processing beef (million  277                  273                  272                  234                  217
               pounds, carcass weight                                                                                        
               equivalent)                                                                                                   

                                                                                                                             

  Projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada as a                                                                                                                
  percentage                                                                                                                 
  of the                                                                                                                     
  projected                                                                                                                  
  U.S.                                                                                                                       
  baseline                                                                                                                   
  supply                                                                                                                     

               Cull cattle               1.3%                 1.3%                 1.3%                 2.2%                 2.7%

               Feeder cattle             nil                  nil                  nil                  nil                  -0.1

               Fed cattle                -0.1%                nil                  -0.1%                -0.3%                -0.3%

               Fed beef                  0.1%                 Nil                  0.1%                 0.3%                 0.3%

               Processing beef           4.7%                 4.5%                 4.4%                 3.7%                 3.4%
  ------------ ------------------------- -------------------- -------------------- -------------------- -------------------- --------------------

  ------------ ------------------------- -------------------- -------------------- -------------------- -------------------- --------------------
  Table D.                                                                                                                   
  Projected                                                                                                                  
  changes in                                                                                                                 
  imports of                                                                                                                 
  cull cattle,                                                                                                               
  feeder                                                                                                                     
  cattle, fed                                                                                                                
  cattle, fed                                                                                                                
  beef, and                                                                                                                  
  processing                                                                                                                 
  beef from                                                                                                                  
  Canada under                                                                                                               
  scenario 4,                                                                                                                
  and                                                                                                                        
  projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada as a                                                                                                                
  percentage                                                                                                                 
  of the                                                                                                                     
  projected                                                                                                                  
  U.S.                                                                                                                       
  baseline                                                                                                                   
  supplies,                                                                                                                  
  2008-2012                                                                                                                  

                                         [2008]{.underline}   [2009]{.underline}   [2010]{.underline}   [2011]{.underline}   [2012]{.underline}

                                                                                                                             

  Projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada                                                                                                                     

               Cull cattle (thousand     328                  328                  327                  328                  330
               head)                                                                                                         

               Feeder cattle (thousand   -1                   9                    -5                   -16                  -21
               head)                                                                                                         

               Fed cattle (thousand      -86                  -58                  -96                  -129                 -140
               head)                                                                                                         

               Fed beef (million pounds, 70                   47                   78                   104                  114
               carcass weight                                                                                                
               equivalent)                                                                                                   

               Processing beef (million  94                   94                   94                   94                   95
               pounds, carcass weight                                                                                        
               equivalent)                                                                                                   

                                                                                                                             

  Projected                                                                                                                  
  changes in                                                                                                                 
  imports from                                                                                                               
  Canada as a                                                                                                                
  percentage                                                                                                                 
  of the                                                                                                                     
  projected                                                                                                                  
  U.S.                                                                                                                       
  baseline                                                                                                                   
  supply                                                                                                                     

               Cull cattle               5.8%                 5.6%                 5.4%                 5.4%                 5.4%

               Feeder cattle             nil                  nil                  nil                  nil                  -0.1

               Fed cattle                -0.3%                -0.2%                -0.3%                -0.4%                -0.5%

               Fed beef                  0.3%                 0.2%                 0.3%                 0.5%                 0.5%

               Processing beef           1.6%                 1.5%                 1.5%                 1.5%                 1.5%
  ------------ ------------------------- -------------------- -------------------- -------------------- -------------------- --------------------

[Effects for Commodities Not Analyzed Using the BAS Model]{.underline}

Five categories of commodities that will be affected by this rule have
not been included in the modeled quantitative analysis described above.
They are: Breeding cattle, including dairy; vealers and slaughter
calves; bison; bovine casings and small intestine products; and bovine
blood and blood products. Projected imports of breeding cattle including
dairy, and projected changes in imports of vealers, slaughter calves,
and bison, are relatively small, suggesting that impacts on affected
U.S. entities will not be significant. For bovine casings, small
intestine products, and blood and blood products, the analysis is
constrained by a scarcity of information about the quantities that would
be imported and levels of U.S. production and consumption.

With regard to dairy producers, we do not expect imports of dairy cattle
from Canada to add significantly to the U.S. herd, but rather to serve
as an additional source of replacement animals. From 1992 to 2002, U.S.
producers annually raised about 4.1 million dairy replacement heifers
and about 5.9 million beef replacement heifers. The average number of
Canadian breeding cattle imported during that period (including bulls)
totaled only 0.5 percent of these combined quantities. The breeding
cattle imports from Canada during this period represented about 1.1
percent of dairy heifer replacements and less than 0.1 percent of beef
heifer replacements. Imports of dairy cows and heifers from Canada are
projected to be similar to their historic levels, 1992-2002, averaging
47,800 head per year over the period of analysis in all of the
scenarios.

Analysis using the multi-sector model indicates that, in scenario 3,
dairy producers may experience price declines of 1.3 to 1.7 percent for
dairy cattle due to the small number projected to be imported from
Canada. These imports translate into an increase in U.S. milk production
of 0.1 percent or less, and a decline in the price of milk and increase
in consumer surplus of less than 0.1 percent. As sellers of cull cattle,
dairy producers as well as beef producers are expected to be negatively
affected by the price decline for cull cattle due to this rule.

We expect market effects for vealers and slaughter calves to be
insignificant, given the small change in the number projected to be
imported from Canada. The decline in imports is projected in scenario 3
to average only 6 percent, or 3,000 head per year.

A larger number of bison are projected to be imported than was projected
in the preliminary RIA. Reestablished imports of Canadian breeding bison
will be the principal impact of this rule for that industry. Yearly
imports of breeding bison are projected to average 1,200 head, and are
expected to represent about 1 percent of U.S. breeding bison, assuming
the composition of the national bison herd is similar to that of the
national cattle herd.

This rule may directly affect the U.S. supply of bovine casings and
small intestine products through resumption of imports from Canada, and
may affect it indirectly through changes in U.S. cattle slaughter
numbers and the reestablished importation of Canadian bovine small
intestines, minus the distal ileum. For scenario 3, the annual supply of
bovine casings produced from additional U.S. cattle slaughter is
projected to increase on average over the period of analysis by less
than 0.2 percent.

Fetal bovine serum (FBS) is the most important blood product that will
be affected by this rule. Resumption of commercial imports of FBS from
Canada, directly as serum and indirectly through increased U.S. pregnant
cow slaughter, is expected to benefit FBS users, given current strong
demand for this blood product in the United States.

[Expected Impacts for Modeled Commodities]{.underline}

In this summary, prices and welfare impacts are expressed in 2007
dollars; price and quantity averages and percentage averages are over
the 5-year period of analysis, 2008-2012; annualized values are
discounted at 3 percent; and beef prices and quantities are in carcass
weight equivalent. Percentage changes in prices and estimated welfare
effects are shown in

table E.

[Scenario 1]{.underline}*.* In this scenario, buyers of cull cattle and
processing beef can be expected to benefit from welfare gains and
sellers of cull cattle and processing beef can be expected to bear
welfare losses due to the cull cattle imports. For this commodity, the
estimated annualized consumer gains are \$90.3 million, producer losses
are \$53.2 million, and net benefits are \$37.1 million.

Welfare changes for the cull cattle/processing beef category dominate
the modeled effects in all of the scenarios. The relatively large
impacts are not unexpected, given that this is the one modeled commodity
category for which imports from Canada would be newly reestablished and
projected changes from the baseline are much larger than for the other
commodities. The numbers of cull cattle projected to be imported in
scenario 1, averaging 124,800 cows and 23,000 bulls and stags per year,
are much larger than the projected average annual declines in imports of
Canadian fed cattle (56,800 head) and feeder cattle (6,800 head).

Another reason the welfare effects computed for the cull
cattle/processing beef category are large is the inelastic demand
(-0.40) compared to the price elasticities of demand---i.e., buyers'
responsiveness to changes in price\--for the other modeled commodities
(feeder cattle,

-0.88; fed cattle, -0.76; fed beef, -0.60). In the preliminary RIA, we
examined the significance of processing beef's more inelastic demand by
considering welfare changes for the cull cattle/processing beef category
when a price elasticity of demand of -0.60 is used, that is, the same
elasticity as for fed beef. This exercise found that all
impacts---consumer gains, producer losses, net benefits, and price
declines---are reduced by nearly one-fifth when a price elasticity of
demand of -0.60 is used in place of -0.40. The price elasticity of
demand is an important determinant of the magnitude of welfare and price
changes for the cull cattle/processing beef category.

Lastly, the large difference between consumer welfare gains and producer
welfare losses for the cull cattle/processing beef category can be
attributed to the fact that the United States is projected to import
about 40 percent of its supply of processing beef over the period of
analysis. In modeling the welfare effects, demand (defined as U.S.
consumption) is much larger than supply (defined as U.S. production
minus exports). Consequently the change in consumer surplus is large
compared to the change in producer surplus because the effects are
estimated only for U.S. entities.

Slightly fewer feeder cattle are projected to be imported from Canada in
scenario 1 than would otherwise enter, and the analysis indicates small
gains in producer welfare (higher prices and less competition from
Canadian suppliers) and small losses in consumer welfare for this
commodity (higher prices and fewer feeder cattle available for
purchase). Estimated annualized values are producer gains of \$3.6
million, consumer losses of \$3.8 million, and net losses of \$0.2
million.

As with feeder cattle, fewer fed cattle are projected to be imported
under scenario 1 than would otherwise be imported. Once again, producers
(sellers of fed cattle for slaughter) would benefit from welfare gains
and consumers (buyers of fed cattle for slaughter) would bear welfare
losses. Estimated annualized values are producer gains of \$43.6
million, consumer losses of \$44.7 million, and net losses of about
\$1.1 million.

Scenario 1 is projected to result in increased imports of Canadian fed
beef ranging from an additional 3 million pounds in 2009 to 92 million
pounds in 2012. Estimated annualized values are consumer gains of \$48.8
million, producer losses of \$46.8 million, and net gains of \$2
million.

The analysis shows annualized combined welfare changes under scenario 1
as consumer gains of \$90.6 million and producer losses of \$52.7
million, yielding net benefits of \$37.9 million. As can be seen in
table E, the combined annualized values of consumer welfare losses for
feeder cattle and fed cattle are similar to the consumer welfare gains
for fed beef. Combined consumer welfare gains are very similar to the
consumer welfare gains estimated for the cull cattle/processing beef
category. A similar but opposite outcome is evident with respect to
producer welfare changes, with combined gains for feeder cattle and fed
cattle somewhat larger than the producer welfare losses for fed beef.
The result is combined producer welfare losses that are close to the
producer welfare losses estimated for cull cattle/processing beef. Under
scenario 1, the combined annualized net welfare benefits, \$37.9
million, are only slightly more than the \$37.1 million in net benefits
estimated for cull cattle/processing beef.

+-----------+--------+----------+------------+-----------+-----------+
| Table E.  |        |          |            |           |           |
| C         |        |          |            |           |           |
| omparison |        |          |            |           |           |
| of        |        |          |            |           |           |
| p         |        |          |            |           |           |
| ercentage |        |          |            |           |           |
| price     |        |          |            |           |           |
| changes   |        |          |            |           |           |
| and       |        |          |            |           |           |
| a         |        |          |            |           |           |
| nnualized |        |          |            |           |           |
| welfare   |        |          |            |           |           |
| effects   |        |          |            |           |           |
| for       |        |          |            |           |           |
| scenarios |        |          |            |           |           |
| 1, 2, and |        |          |            |           |           |
| 3 by      |        |          |            |           |           |
| commodity |        |          |            |           |           |
| category, |        |          |            |           |           |
| 2         |        |          |            |           |           |
| 008-2012, |        |          |            |           |           |
| d         |        |          |            |           |           |
| iscounted |        |          |            |           |           |
| at 3      |        |          |            |           |           |
| percent,  |        |          |            |           |           |
| 2007      |        |          |            |           |           |
| dollars   |        |          |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+
| Commodity | [Sce   | Pe       | Change in  | Change in | Net       |
| [Cat      | nario] | rcentage | Consumer   | Producer  | Welfare   |
| egory]{.u | {.unde | Change   | [          | [We       | [C        |
| nderline} | rline} | in       | Welfare]{. | lfare]{.u | hange]{.u |
|           |        | [Pr      | underline} | nderline} | nderline} |
|           |        | ice]{.un |            |           |           |
|           |        | derline} |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+
|           |        |          | \-\-\      |           |           |
|           |        |          | -\-\-\-\-\ |           |           |
|           |        |          | -\-\-\-\-\ |           |           |
|           |        |          | --Thousand |           |           |
|           |        |          | Doll       |           |           |
|           |        |          | ars\-\-\-\ |           |           |
|           |        |          | -\-\-\-\-\ |           |           |
|           |        |          | -\-\-\-\-- |           |           |
+-----------+--------+----------+------------+-----------+-----------+
|           |        |          |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+
| Cull      |        |          |            |           |           |
| cattle/   |        |          |            |           |           |
|           |        |          |            |           |           |
| P         |        |          |            |           |           |
| rocessing |        |          |            |           |           |
| beef      |        |          |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+
|           | 1      | -1.4%    | 90,307     | -53,207   | 37,100    |
+-----------+--------+----------+------------+-----------+-----------+
|           | 2      | -4.5%    | 286,936    | -165,615  | 121,320   |
+-----------+--------+----------+------------+-----------+-----------+
|           | 3      | -4.5%    | 286,912    | -165,603  | 121,308   |
+-----------+--------+----------+------------+-----------+-----------+
| Feeder    |        |          |            |           |           |
| cattle    |        |          |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+
|           | 1      | nil      | -3,795     | 3,605     | -190      |
+-----------+--------+----------+------------+-----------+-----------+
|           | 2      | nil      | -3,795     | 3,605     | -190      |
+-----------+--------+----------+------------+-----------+-----------+
|           | 3      | nil      | -3,795     | 3,605     | -190      |
+-----------+--------+----------+------------+-----------+-----------+
| Fed       |        |          |            |           |           |
| cattle    |        |          |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+
|           | 1      | 0.1%     | -44,703    | 43,636    | -1,066    |
+-----------+--------+----------+------------+-----------+-----------+
|           | 2      | 0.3%     | -107,513   | 105,101   | -2,412    |
+-----------+--------+----------+------------+-----------+-----------+
|           | 3      | 0.1%     | -36,263    | 35,388    | -874      |
+-----------+--------+----------+------------+-----------+-----------+
| Fed beef  |        |          |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+
|           | 1      | -0.1%    | 48,800     | -46,757   | 2,044     |
+-----------+--------+----------+------------+-----------+-----------+
|           | 2      | -0.3%    | 117,459    | -112,426  | 5,033     |
+-----------+--------+----------+------------+-----------+-----------+
|           | 3      | -0.1%    | 39,791     | -38,131   | 1,660     |
+-----------+--------+----------+------------+-----------+-----------+
| C         |        |          |            |           |           |
| ategories |        |          |            |           |           |
| combined  |        |          |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+
|           | 1      |          | 90,609     | -52,723   | 37,888    |
+-----------+--------+----------+------------+-----------+-----------+
|           | 2      |          | 293,087    | -169,335  | 123,751   |
+-----------+--------+----------+------------+-----------+-----------+
|           | 3      |          | 286,645    | -164,741  | 121,904   |
+-----------+--------+----------+------------+-----------+-----------+
| The three |        |          |            |           |           |
| import    |        |          |            |           |           |
| scenarios |        |          |            |           |           |
| c         |        |          |            |           |           |
| onsidered |        |          |            |           |           |
| in this   |        |          |            |           |           |
| table are |        |          |            |           |           |
| (1)       |        |          |            |           |           |
| Canadian  |        |          |            |           |           |
| cattle    |        |          |            |           |           |
| born on   |        |          |            |           |           |
| or after  |        |          |            |           |           |
| March 1,  |        |          |            |           |           |
| 1999; (2) |        |          |            |           |           |
| Canadian  |        |          |            |           |           |
| cattle    |        |          |            |           |           |
| unr       |        |          |            |           |           |
| estricted |        |          |            |           |           |
| by date   |        |          |            |           |           |
| of birth; |        |          |            |           |           |
| and (3)   |        |          |            |           |           |
| Canadian  |        |          |            |           |           |
| cattle    |        |          |            |           |           |
| born on   |        |          |            |           |           |
| or after  |        |          |            |           |           |
| March 1,  |        |          |            |           |           |
| 1999,     |        |          |            |           |           |
| plus      |        |          |            |           |           |
| r         |        |          |            |           |           |
| esumption |        |          |            |           |           |
| of        |        |          |            |           |           |
| imports   |        |          |            |           |           |
| of meat   |        |          |            |           |           |
| from      |        |          |            |           |           |
| Canadian  |        |          |            |           |           |
| cattle    |        |          |            |           |           |
| sl        |        |          |            |           |           |
| aughtered |        |          |            |           |           |
| at 30     |        |          |            |           |           |
| months or |        |          |            |           |           |
| older.    |        |          |            |           |           |
| The       |        |          |            |           |           |
| p         |        |          |            |           |           |
| ercentage |        |          |            |           |           |
| change in |        |          |            |           |           |
| price is  |        |          |            |           |           |
| the       |        |          |            |           |           |
| average   |        |          |            |           |           |
| annual    |        |          |            |           |           |
| change    |        |          |            |           |           |
| over the  |        |          |            |           |           |
| 5-year    |        |          |            |           |           |
| period.   |        |          |            |           |           |
| Welfare   |        |          |            |           |           |
| changes   |        |          |            |           |           |
| may not   |        |          |            |           |           |
| sum due   |        |          |            |           |           |
| to        |        |          |            |           |           |
| rounding. |        |          |            |           |           |
+-----------+--------+----------+------------+-----------+-----------+

[Scenario 2]{.underline}*.* Because of the significantly larger number
of cull cattle projected to be imported in scenario 2, the estimated
price and welfare effects are also much larger than for scenario 1.
Table E shows these differences, with the percentage changes in price
about three times greater in all cases (other than for feeder cattle,
for which imports are projected to be the same in all scenarios).
Whereas the combined net benefit in scenario 1 is estimated to be an
annualized \$37.9 million, in scenario 2 it is \$123.8 million.

As described in the risk assessment, transmission of BSE requires that
bovines ingest feed that contains the infectious agent. The OIE
establishes standards for the international trade in animals and animal
products. It recommends that cattle be imported from a controlled risk
region for BSE only if the cattle selected for export were born after
that date from which a ban on the feeding of ruminants with
meat-and-bone meal and greaves (the residue left after animal fat or
tallow has been rendered) derived from ruminants had been effectively
enforced. In May 2007, the OIE classified both the United States and
Canada as BSE controlled risk regions.

On August 4, 1997, Canada issued regulations prohibiting the use of
mammalian protein in ruminant feeds. Implementation of the feed ban was
a gradual process, with producers, feed mills, retailers, and feed
manufacturers given grace periods before they were required to be in
full compliance with the regulations. It is believed that this
implementation period may have lasted 6 months, making February 1998 a
more realistic date on which the ban can be considered to have gone into
effect.

APHIS considers that a period of 1 year following the full
implementation of the feed ban allowed sufficient time for the measures
taken by Canada to have their desired effect. Therefore, APHIS concludes
that there is an extremely low likelihood that cattle born in Canada on
or after March 1, 1999, will have been exposed to the BSE agent via
feed. Therefore, these animals have an extremely low likelihood of being
infected and can be imported into the United States for any purpose.

We do not have a quantitative estimate of the additional risk posed by
importation of Canadian cattle born before March 1, 1999. The importance
of a feed ban as a risk mitigation measure is demonstrated in science
and experience, and is incorporated into the OIE guidelines. We conclude
that there could be some degree of increased likelihood of BSE
infectivity entering the United States via imports of live bovines from
Canada under scenario 2, compared to the very low likelihood posed in
scenario 1, because of the greater likelihood of cattle born prior to
the effective enforcement of a feed ban having been exposed to
infectivity.

[Scenario 3]{.underline}*.* The price and welfare effects under scenario
3 are similar to the effects under scenario 2 for cull cattle/processing
beef, but more like the scenario 1 effects for fed cattle and fed beef
(table E). This outcome is expected because scenario 3 includes
reestablishment of OTM beef imports from Canada. Combined net welfare
benefits for scenarios 2 and 3 are very similar, with the projected cull
cattle imports in scenario 2 and the projected imports of cull cattle
and OTM beef in scenario 3 both based on cattle and beef import
quantities prior to May 2003. The additional quantities of cull
cattle/processing beef in scenarios 2 and 3 are essentially the same,
entering as live cattle in scenario 2 and as beef in scenario 3.

The BSE risk mitigations under scenario 3 are comparable to those under
scenario 1. The restriction on live bovine imports by date of birth, age
verification, and other safeguard measures are the same in both cases.
Consequently, as in scenario 1, the likelihood of BSE infectivity
entering the United States via imports of live bovines from Canada in
this scenario is extremely low. Resumption of OTM beef imports from
Canada will not affect the likelihood of BSE infectivity entering the
United States because SRMs will be removed and disposed of in Canada.

[Scenario 4]{.underline}*.* A fourth scenario, as indicated above, would
be to allow entry of Canadian cattle unrestricted by birth date, along
with resumption of OTM beef imports from Canada. A quantitative analysis
of expected price and welfare effects for this particular scenario was
not performed. When we compare projected imports under this scenario
with those projected for scenario 3, we find the differences in combined
cattle and beef imports to be very small and conclude that the welfare
effects for this scenario would be very similar to the effects of
scenario 3.

Cull cattle imports from Canada are projected to average about 328,000
head per year under scenario 4, compared to 106,000 head per year under
scenario 3. Conversely, annual processing beef imports under scenario 4
are projected to average 94 million pounds, carcass weight equivalent,
compared to 255 million pounds for scenario 3.

Similar differences between the two scenarios are projected for fed
cattle and fed beef imports. The larger number of cull cattle that would
be imported from Canada under scenario 4 could be expected to be
associated with increased fed cattle slaughter in Canada, with fewer fed
cattle and more fed beef exported to the United States. Under scenario
4, fed cattle imports from Canada are projected to average about 624,000
head per year, compared to 679,000 head per year under scenario 3.
Annual fed beef imports under scenario 4 are projected to average 992
million pounds, compared to 947 million pounds for scenario 3.

The average annual net difference between scenarios 3 and 4 in projected
cull cattle and processing beef imports from Canada, after converting
the cull cattle to processing beef, is about 700,000 pounds (330.8
million pounds in scenario 3, and 330.1 million pounds in scenario 4).
This amount represents about 0.2 percent of projected cull
cattle/processing beef imports under scenario 3. For fed cattle and fed
beef imports from Canada, the average annual net difference between
scenarios 3 and 4 after converting the fed cattle to fed beef, is about
1.3 million pounds (1,483.7 million pounds in scenario 3, and 1,485.0
million pounds in scenario 4). This amount represents about 0.1 percent
of the projected fed cattle and fed beef imports under scenario 3.
Hence, we conclude that the overall welfare effects of scenario 4 would
be very similar to those for scenario 3.

[Effects on Small Entities]{.underline}

There were no significant issues raised in public comment on the initial
regulatory flexibility analysis (RFA) for this rulemaking. However, as
described below, the majority of businesses that may be affected by this
rule are small entities. Therefore, while none of the comments received
on the proposed rule raised specific issues regarding the initial RFA,
comments on the preliminary RIA can be inferred to express small-entity
concerns.

Topics that received public comment and that concerned the estimated
economic impacts of the proposed rule included modeling issues; the
timing of the rule's implementation; consequences of a BSE occurrence;
and impacts of the rule for consumers, cow-calf producers, the dairy
industry, and the packing industry, and on beef exports. These comments
are addressed in the Agency's responses that are included as part of the
final rule.

Small entities comprise the majority of the establishments engaged in
the production, processing, and sale of the commodities affected by this
rule. These small entities number at least in the hundreds of thousands,
with cow-calf and dairy producers comprising the largest single industry
sector share. The entities are classified within the following
industries according to the North American Industry Classification
System: Beef Cattle Ranching and Farming (NAICS 112111), Dairy Cattle
and Milk Production (NAICS 112120), All Other Animal Production (NAICS
112990), Cattle Feedlots (NAICS 112112), Animal (except Poultry)
Slaughtering (NAICS 311611), Meat Processed from Carcasses (NAICS
311612), Meat and Meat Product Merchant Wholesalers (NAICS 424470),
Supermarkets and Other Grocery (except Convenience) Stores (NAICS
445110), Meat Markets (NAICS 445210), In-Vitro Diagnostic Substance
Manufacturing (NAICS 325413), and Biological Product (except Diagnostic)
Manufacturing (NAICS 325414).

We are unable to determine the extent to which cull cattle prices may
fall because of the rule. Assuming that the price decline for cull
cattle is proportional to the estimated price decline for processing
beef, cow-calf and dairy producers in scenario 3 may experience a fall
in price for cull cattle of 4.7 percent in 2008, and an average price
decline of 4.5 percent (\$4.61 per cwt). To place this average price
decline in perspective, we consider the effect it may have on gross
earnings of small-entity cow-calf operations. Based on data from the
2002 Census of Agriculture, the average value of cattle and calves sold
by small-entity beef cow operations was about \$26,600.[^32] The
projected 2008 price for a culled cow is \$54.19 per cwt.[^33] Assuming
the cow weighs 1,100 pounds, its price in 2008 would be \$596.09 per
head. A 4.7 percent decline would result in a price of \$568.07.
Presumably, most of a cow-calf operation's revenue is earned

from the sale of calves. If one-half of an operation's revenue were to
derive from the sale of cull cattle, the reduction in revenue
attributable to the decline in the price of cull cattle in scenario 3
would total about \$625 for the year.[^34]

For dairy enterprises, the expected price decline for cull cattle
because of imports from Canada is expected to have a small effect on
their incomes because most revenue (over 86 percent in 2002) is earned
from the sale of milk and other dairy products.[^35] The average per
animal value of cattle and calves sold by small-entity dairy cow
operations in 2002 was about \$453. A price decline of 4.7 percent,
notwithstanding the fact that not all of the animals sold would be cull
cattle, would mean a decrease in annual revenue for the average
small-entity dairy operation of about \$1,040, assuming no change in the
number of cattle sold.[^36] This forgone income would represent a
decline in average revenue of about 0.6 percent.[^37]

The scenario 3 analysis indicates that decreases in the price of fed
beef due to increased fed beef imports from Canada are expected to be
very small, resulting in a loss for the average meat packing and
processing establishment of less than 0.2 percent of average revenue (18
cents per cwt, with projected baseline fed beef prices averaging
\$151.80 per cwt). Effects for those packers and processors that utilize
processing beef will be larger, due to the resumption of cull cattle and
OTM beef imports from Canada. Annual prices of processing beef are
expected to fall

by an average of \$4.61 per cwt in scenario 3. This decline in price
will benefit establishments that use processing beef to produce ground
beef for the wholesale market. Conversely, establishments that sell
processing beef will be negatively affected by the expected price
decline.

In response to public comments on the preliminary RIA, we include an
evaluation of welfare effects by industry sector for scenario 3. While
this evaluation is admittedly broad, it provides an indication of the
extent to which major sectors of the cattle and beef industries may be
affected. We group the entities that we expect to be directly affected
into four generalized categories: cow-calf and dairy producers, feedlot
establishments, slaughter and packing establishments, and wholesaler and
successive establishments. Admittedly, this simple categorization does
not capture the many complexities of the cattle and beef industries, but
it does provide a level of specification sufficient for examining
expected effects for the industries' principal stages of economic
activity. In reality, businesses combine the slaughter, packing,
processing, and wholesaling functions in various ways. This
consideration of sector-level effects indicates that cow-calf and dairy
producers and slaughter and packing establishments are expected to incur
net welfare losses, while feedlots and wholesalers are expected to
accrue net welfare gains.

Currently, bovines imported from Canada are restricted to animals that
are slaughtered at less than 30 months of age. Bovines not imported for
immediate slaughter must be moved from the port of entry to a feedlot in
a sealed means of conveyance and from the feedlot to a recognized
slaughtering establishment again in a sealed means of conveyance. The
animals may not be moved to more than one feedlot. With this rule, these
movement restrictions will no longer be imposed. Canadian bovines
imported other than for immediate slaughter will be able to be moved any
number of times to any destinations in unsealed means of conveyance.

Under this rule, feeder bovines imported from BSE minimal-risk regions
will not need to be accompanied by APHIS Form VS 17-130, which currently
is used to identify the feedlot of destination. (The name of the
individual responsible for the movement of an imported animal and
individual identification of the animal will still be required
information on the accompanying health certificate.) APHIS estimates
that the time saved by entities no longer needing to acquire APHIS Form
VS 17-130 will total approximately 40,000 hours per year.[^38] Also
under this rule, bovines of Canadian origin moved from a U.S. feedlot to
a slaughtering establishment will not need to be accompanied by APHIS
Form VS 1-27. APHIS estimates the same total time savings by entities no
longer needing to acquire APHIS Form VS 1-27: 40,000 hours per year.

Removal of these movement and paperwork requirements will benefit buyers
and sellers of Canadian-origin bovines. Many of the beneficiaries are
likely to be small entities, given their predominance among beef and
dairy operations and feedlot establishments. Affected businesses will be
able to take advantage of a broader range of transactional opportunities
than previously. For example, the sale of a young steer first for
backgrounding, then for confined feeding at one or more facilities, and
finally for slaughter may enable the original and subsequent owners of
the animal to better maximize returns compared to current marketing
possibilities. While we are not

able to quantify impacts of removing current movement restrictions on
Canadian cattle imports,

we expect their removal will benefit the cattle industry
across-the-board.

The Agency has identified alternatives to the rule and analyzed them in
this RIA. We

have found that the chosen alternative (scenario 3) best strikes the
balance of continuing to provide an acceptable level of protection
against BSE infectivity entering the United States via imports of live
bovine and bovine product imports, while removing unnecessary
prohibitions on the importation of certain commodities from Canada.
Without this rule, restrictions on U.S. importation of certain Canadian
bovine commodities that are without scientific merit would continue.
With this rule, importation of these Canadian commodities will be
allowed to resume under certain conditions and the BSE risk to the
United States via imports of live bovines and bovine products from
Canada will be negligible.

Small Business Regulatory Enforcement Fairness Act of 1996

This rule has been designated by the Administrator, Office of
Information and Regulatory Affairs, Office of Management and Budget, as
a major rule under the Small Business Regulatory Enforcement Fairness
Act of 1996 (5 U.S.C. 801-808). Accordingly, the effective date of this
rule has been delayed the required 60 days pending congressional review.

Executive Order 12988

This final rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule: (1) Preempts all State and local laws and
regulations that are inconsistent with this rule; (2) has no retroactive
effect; and (3) does not require administrative proceedings before
parties may file suit in court challenging this rule.

National Environmental Policy Act

An environmental assessment and finding of no significant impact have
been prepared for this final rule. The environmental assessment provides
a basis for the conclusion that the importation of live bovines and of
bovine products as specified in this rule will not have a significant
impact on the quality of the human environment. Based on the finding of
no significant impact, the Decisionmaker of the Animal and Plant Health
Inspection Service has determined that an environmental impact statement
need not be prepared.

The environmental assessment and finding of no significant impact were
prepared in accordance with: (1) The National Environmental Policy Act
of 1969 (NEPA), as amended (42 U.S.C. 4321 [et]{.underline}
[seq]{.underline}.), (2) regulations of the Council on Environmental
Quality for implementing the procedural provisions of NEPA (40 CFR parts
1500-1508), (3) USDA regulations implementing NEPA (7 CFR part 1b), and
(4) APHIS\' NEPA Implementing Procedures (7 CFR part 372).

The environmental assessment and finding of no significant impact may be
viewed on the APHIS Web site
(http://www.aphis.usda.gov/newsroom/hot_issues/bse/index.shtml), or be
obtained by contacting the person listed under FOR FURTHER INFORMATION
CONTACT. Copies of the environmental assessment and finding of no
significant impact are also available for public inspection at USDA,
room 1141, South Building, 14th Street and Independence Avenue SW.,
Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday,
except holidays. Persons wishing to inspect copies are requested to call
ahead on (202) 690-2817 to facilitate entry into the reading room. In
addition, copies may be obtained by writing to the individuals listed
under FOR FURTHER INFORMATION CONTACT.

Paperwork Reduction Act

This final rule contains no new information collection or recordkeeping
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
[et]{.underline} [seq]{.underline}.).

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List of Subjects

9 CFR Part 93

Animal diseases, Imports, Livestock, Poultry and poultry products,
Quarantine, Reporting and recordkeeping requirements.

9 CFR Part 94

Animal diseases, Imports, Livestock, Meat and meat products, Milk,
Poultry and poultry products, Reporting and recordkeeping requirements.

9 CFR Part 95

Animal feeds, Hay, Imports, Livestock, Reporting and recordkeeping
requirements, Straw, Transportation.

9 CFR Part 96

Imports, Livestock, Reporting and recordkeeping requirements.

Accordingly, we are amending 9 CFR parts 93, 94, 95, and 96 as follows:

PART 93\--IMPORTATION OF CERTAIN ANIMALS, BIRDS, AND POULTRY, AND
CERTAIN ANIMAL, BIRD, AND POULTRY PRODUCTS; REQUIREMENTS FOR MEANS OF
CONVEYANCE AND SHIPPING CONTAINERS

1\. The authority citation for part 93 continues to read as follows:

Authority: 7 U.S.C. 1622 and 8301-8317; 21 U.S.C. 136 and 136a; 31
U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.

§ 93.405 \[[Amended]{.underline}\]

2\. In § 93.405, paragraph (a)(4) is amended by removing the words
"feedlot or recognized slaughtering establishment" and adding in their
place the words "destination".

3\. Section 93.419 is amended as follows:

a\. Paragraphs (b) and (c) are revised to read as set forth below.

b\. Paragraph (d) is redesignated as paragraph (e).

c\. A new paragraph (d) is added to read as set forth below.

d\. In newly redesignated paragraph (e)(2), the reference to "paragraph
(d)(7)" is removed and a reference to "paragraph (e)(7)" is added in its
place.

§ 93.419 [Sheep and goats from Canada]{.underline}.

\* \* \* \* \*

\(b\) If the sheep or goats are unaccompanied by the certificate
required by paragraph (a) of this section, or if they are found upon
inspection at the port of entry to be affected with or exposed to a
communicable disease, they shall be refused entry and shall be handled
or quarantined, or otherwise disposed of, as the Administrator may
direct.

\(c\) Any sheep or goats imported from Canada must not be pregnant, must
be less than 12 months of age when imported into the United States and
when slaughtered, must be from a flock or herd subject to a ruminant
feed ban equivalent to the requirements established by the U.S. Food and
Drug Administration at 21 CFR 589.2000, and must be individually
identified by an official Canadian Food Inspection Agency eartag,
applied before the animal's arrival at the port of entry into the United
States, that is determined by the Administrator to meet standards
equivalent to those for official eartags in the United States as defined
in § 71.1 of this chapter and to be traceable to the premises of origin
of the animal. No person may alter, deface, remove, or otherwise tamper
with the individual identification while the animal is in the United
States or moving into or through the United States, except that the
identification may be removed at the time of slaughter. The animals must
be accompanied by the certification issued in accordance with § 93.405
that states, in addition to the statements required by § 93.405, that
the conditions of this paragraph have been met. Additionally, for sheep
and goats imported for immediate slaughter, the certificate must state
that the conditions of paragraphs (d)(1) through (d)(3) of this section
have been met, and, for sheep and goats imported for other than
immediate slaughter, the certificate must state that the conditions of
paragraphs (e)(1) and (e)(2) of this section have been met.

\(d\) [Sheep and goats imported for immediate slaughter]{.underline}.
Sheep and goats imported from Canada for immediate slaughter must be
imported only through a port of entry listed in

§ 93.403(b) or as provided for in § 93.403(f) in a means of conveyance
sealed in Canada with seals of the Canadian Government, and must be
moved directly as a group from the port of entry to a recognized
slaughtering establishment for slaughter as a group. The sheep and goats
shall be inspected at the port of entry and otherwise handled in
accordance with § 93.408. The seals on the means of conveyance must be
broken only at the port of entry by the APHIS port veterinarian or at
the recognized slaughtering establishment by an authorized USDA
representative. If the seals are broken by the APHIS port veterinarian
at the port of entry, the means of conveyance must be resealed with
seals of the U.S. Government before being moved to the recognized
slaughtering establishment. The shipment must be accompanied from the
port of entry to the recognized slaughtering establishment by APHIS Form
VS 17-33, which must include the location of the recognized slaughtering
establishment. Additionally, the sheep and goats must meet the following
conditions:

\(1\) The animals have not tested positive for and are not suspect for a
transmissible spongiform encephalopathy;

\(2\) The animals have not resided in a flock or herd that has been
diagnosed with BSE; and

\(3\) The animals' movement is not restricted within Canada as a result
of exposure to a transmissible spongiform encephalopathy.

\* \* \* \* \*

4\. Section 93.420 is revised to read as follows:

§ 93.420 [Ruminants from Canada for immediate slaughter other than
bovines, sheep, and goats]{.underline}.

The requirements for the importation of sheep and goats from Canada for
immediate slaughter are contained in § 93.419. The requirements for the
importation of bovines from Canada for immediate slaughter are contained
in § 93.436. All other ruminants imported from Canada for immediate
slaughter, in addition to meeting all other applicable requirements of
this part, must be imported only through a port of entry listed in §
93.403(b) or as provided for in § 93.403(f) to a recognized slaughtering
establishment for slaughter, in conveyances that must be sealed with
seals of the U.S. Government at the port of entry. The seals may be
broken only at a recognized slaughtering establishment in the United
States by an authorized USDA representative. The shipment must be
accompanied from the port of entry to the recognized slaughtering
establishment by APHIS Form VS 17-33, which must include the location of
the recognized slaughtering establishment. Such ruminants shall be
inspected at the port of entry and otherwise handled in accordance with
§ 93.408.

(Approved by the Office of Management and Budget under control number
0579-0277)

5\. Section 93.436 is amended as follows:

a\. Paragraphs (a) and (b) are revised to read as set forth below.

b\. In paragraph (c), the reference to "§§ 93.419(c) and 93.420\" is
removed and a reference to \"§§ 93.405 and 93.419\" is added in its
place.

§ 93.436 [Ruminants from regions of minimal risk for BSE]{.underline}.

\* \* \* \* \*

\(a\) [Bovines for immediate slaughter]{.underline}. Bovines from a
region listed in § 94.18(a)(3) of this subchapter may be imported for
immediate slaughter under the following conditions:

\(1\) The bovines must have been born on or after a date determined by
APHIS to be the date of effective enforcement of a ruminant-to-ruminant
feed ban in the region of export. For bovines imported from Canada, that
date is March 1, 1999.

\(2\) Each bovine must be individually identified by an official eartag
of the country of origin, applied before the animal's arrival at the
port of entry into the United States, that is determined by the
Administrator to meet standards equivalent to those for official eartags
in this chapter and to be traceable to the premises of origin of the
animal. No person may alter, deface, remove, or otherwise tamper with
the official identification while the animal is in the United States or
moving into or through the United States, except that the identification
may be removed at the time of slaughter;

\(3\) The bovines must be accompanied by a certificate issued in
accordance with § 93.405 that states, in addition to the statements
required by § 93.405, that the conditions of paragraphs (a)(1) and
(a)(2) of this section have been met;

\(4\) The bovines must be imported only through a port of entry listed
in § 93.403(b) or as provided for in § 93.403(f). The bovines shall be
inspected at the port of entry and otherwise handled in accordance with
§ 93.408;

\(5\) The bovines must be moved directly from the port of entry to a
recognized slaughtering establishment. Bovines imported from Canada must
be moved to the slaughtering establishment in conveyances that are
sealed with seals of the U.S. Government at the port of entry. The seals
may be broken only at the recognized slaughtering establishment by an
authorized USDA representative; and

\(6\) The bovines must be accompanied from the port of entry to the
recognized slaughtering establishment by APHIS Form VS 17-33.

\(b\) [Bovines for other than immediate slaughter]{.underline}. Bovines
from a region listed in § 94.18(a)(3) of this subchapter may be imported
for other than immediate slaughter under the following conditions:

\(1\) The bovines must have been born on or after a date determined by
APHIS to be the date of effective enforcement of a ruminant-to-ruminant
feed ban in the region of export. For bovines imported from Canada, that
date is March 1, 1999.

\(2\) The bovines must be permanently and humanely identified before
arrival at the port of entry with a distinct and legible mark
identifying the exporting country. Acceptable means of permanent
identification include the following:

\(i\) A mark properly applied with a freeze brand, hot iron, or other
method, and easily visible on the live animal and on the carcass before
skinning. Such a mark must be not less than 2 inches nor more than 3
inches high, and must be applied to each animal's right hip, high on the
tail-head (over the junction of the sacral and first cocygeal
vertebrae). Bovines exported from Canada so marked must be marked with
"CN";

\(ii\) A tattoo with letters identifying the exporting country must be
applied to the inside of one ear of the animal. For bovines exported
from Canada, the tattoo must read "CAN";

\(iii\) Other means of permanent identification upon request if deemed
adequate by the Administrator to humanely identify the animal in a
distinct and legible way as having been imported from the BSE
minimal-risk exporting region.

\(3\) Each bovine must be individually identified by an official eartag
of the country of origin, applied before the animal's arrival at the
port of entry into the United States, that is determined by the
Administrator to meet standards equivalent to those for official eartags
in § 71.1 of this chapter and to be traceable to the premises of origin
of the animal. No person may alter, deface, remove, or otherwise tamper
with the official identification while the animal is in the United
States or moving into or through the United States, except that the
identification may be removed at the time of slaughter;

\(4\) The bovines must be accompanied by a certificate issued in
accordance with § 93.405 that states, in addition to the statements
required by § 93.405, that the conditions of paragraphs (a)(1) and
(a)(2) of this section have been met; and

\(5\) The bovines must be imported only through a port of entry listed
in § 93.403(b) or as provided for in § 93.403(f).

\* \* \* \* \*

PART 94--RINDERPEST, FOOT-AND-MOUTH DISEASE, FOWL PEST (FOWL PLAGUE),
EXOTIC NEWCASTLE DISEASE, AFRICAN SWINE FEVER, CLASSICAL SWINE FEVER,
AND BOVINE SPONGIFORM ENCEPHALOPATHY: PROHIBITED AND RESTRICTED
IMPORTATIONS

6\. The authority citation for part 94 continues to read as follows:

Authority: 7 U.S.C. 450, 7701-7772, 7781-7786, and 8301-8317; 21 U.S.C.
136 and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.

§ 94.19 \[[Amended]{.underline}\]

7.  Section 94.19 is amended as follows:

```{=html}
<!-- -->
```
a.  By removing the words "and small intestine" each time they appear in
    paragraphs (a)(2), (b)(2), and (f).

b.  By removing the Note to paragraph (a).

c.  By removing the Note to paragraph (b).

d.  By removing the Note to paragraph (f).

PART 95--SANITARY CONTROL OF ANIMAL BYPRODUCTS (EXCEPT CASINGS), AND HAY
AND STRAW, OFFERED FOR ENTRY INTO THE UNITED STATES

8\. The authority citation for part 95 continues to read as follows:

Authority: 7 U.S.C. 8301-8317; 21 U.S.C. 136 and 136a; 31 U.S.C. 9701; 7
CFR 2.22, 2.80, and 371.4.

9\. Section 95.4 is amended as follows:

a\. The section heading and paragraph (a) introductory text are revised
to read as set forth below.

b\. Paragraphs (a)(1)(ii) and (a)(1)(iv) are revised to read as set
forth below.

c\. In paragraph (b), the words "paragraphs (d) and (h)" are removed and
the words "paragraphs (d), (e), and (i)" are added in their place.

d\. Paragraph (d) introductory text is revised to read as set forth
below.

e\. The "Note to paragraph (f)" and the "Note to paragraph (g)" are
removed.

f\. Paragraphs (e) through (h) are redesignated as paragraphs (f)
through (i), respectively.

g\. The "Note" currently following newly redesignated paragraph (f) is
redesignated as "Note to paragraph (f)".

h\. New paragraph (e) is added to read as set forth below.

i\. In newly redesignated paragraph (h)(1)(i), the words "and small
intestine" are removed.

j\. In newly redesignated paragraph (i) introductory text, the words
"paragraphs (h)(1) through (h)(3)" are removed and the words "paragraphs
(i)(1) through (i)(3)" are added in their place., and the words
"paragraphs (h)(1) through (h)(4)" are removed and the words "paragraphs
(i)(1) through (i)(4)" are added in their place.

k\. In newly redesignated paragraph (i)(4)(iii), the reference to
paragraph (h)(2) is removed and a reference to paragraph (i)(1) is added
in its place.

§ 95.4 [Restrictions on the importation of processed animal protein,
offal, tankage, fat, glands, certain tallow other than tallow
derivatives, and blood and blood products due to bovine spongiform
encephalopathy]{.underline}.

\(a\) Except as provided in paragraphs (c) through (i) of this section,
the importation of the following is prohibited:

\(1\) \* \* \*

\(ii\) Glands, unprocessed fat tissue, and blood and blood products
derived from ruminants;

\* \* \* \* \*

\(iv\) Derivatives of glands and blood and blood products derived from
ruminants.

\* \* \* \* \*

\(d\) Except as provided in paragraph (e) of this section, the
importation of serum albumin, serocolostrum, amniotic liquids or
extracts, and placental liquids derived from ruminants that have been in
any region listed in § 94.18(a) of this chapter, and collagen and
collagen products that meet any of the conditions listed in paragraphs
(a)(1) through (a)(3) of this section, is prohibited unless the
following conditions have been met:

\* \* \* \* \*

\(e\) Bovine blood and blood products that are otherwise prohibited
importation under paragraph (a)(1) or (d) of this section may be
imported into the United States if they meet the following conditions:

\(1\) For blood collected at slaughter and for products derived from
blood collected at slaughter:

\(i\) The blood was collected in a closed system in which the blood was
conveyed directly from the animal in a closed conduit to a closed
receptacle, or was collected otherwise in a hygienic manner that
prevents contamination of the blood with SRMs.

\(ii\) The slaughtered animal passed ante-mortem inspection and was not
subjected to a pithing process or to a stunning process with a device
injecting compressed air or gas into the cranial cavity;

\(2\) For fetal bovine serum:

\(i\) The blood from which the fetal bovine serum was derived was
collected in a closed system in which the blood was conveyed directly
from the animal in a closed conduit to a closed receptacle, or was
collected otherwise in a hygienic manner that prevents contamination of
the blood with SRMs;

\(ii\) The dam of the fetal calf passed ante-mortem inspection and was
not subjected to a pithing process or to a stunning process with a
device injecting compressed air or gas into the cranial cavity;

\(iii\) The uterus was removed from the dam's abdominal cavity intact
and taken to a separate area sufficiently removed from the slaughtering
area of the facility to ensure that the fetal blood was not contaminated
with SRMs when collected.

\(3\) For blood collected from live donor bovines and for products
derived from blood collected from live donor bovines:

\(i\) The blood was collected in a closed system in which the blood was
conveyed directly from the animal in a closed conduit to a closed
receptacle, or was collected otherwise in a hygienic manner that
prevents contamination of the blood with SRMs;

\(ii\) The donor animal was free of clinical signs of disease*.*

\(4\) Each shipment to the United States is accompanied by an original
certificate signed by a full-time salaried veterinary officer of the
national government of the region of origin, or issued by a veterinarian
designated by or accredited by the national government of the region of
origin, representing that the veterinarian issuing the certificate was
authorized to do so. The certificate must state that the requirements of
paragraph (e)(1), (e)(2), or (e)(3) of this section, as applicable, have
been met.

\* \* \* \* \*

PART 96--RESTRICTION OF IMPORTATIONS OF FOREIGN ANIMAL CASINGS OFFERED
FOR ENTRY INTO THE UNITED STATES

10\. The authority citation for part 96 continues to read as follows:

Authority: 7 U.S.C. 8301-8317; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80,
and 371.4.

11\. In § 96.1, definitions of [Food and Drug
Administration]{.underline} and [Food Safety and Inspection
Service]{.underline} are added, in alphabetical order, to read as
follows:

§ 96.1 [Definitions]{.underline}.

\* \* \* \* \*

[Food and Drug Administration]{.underline}. The Food and Drug
Administration of the United States Department of Health and Human
Services.

[Food Safety and Inspection Service]{.underline}. The Food Safety and
Inspection Service of the United States Department of Agriculture.

\* \* \* \* \*

12\. In § 96.2, paragraph (b) is revised to read as follows:

§ 96.2 [Prohibition of casings due to African swine fever and bovine
spongiform encephalopathy]{.underline}.

\* \* \* \* \*

\(b\) [Ruminant casings]{.underline}. The importation of casings, except
stomachs, from ruminants that originated in or were processed in any
region listed in § 94.18(a) of this subchapter is prohibited, except as
provided in paragraphs (b)(1) and (b)(2) of this section:

\(1\) Casings that are derived from sheep that were slaughtered in a
region listed in

§ 94.18(a)(3) of this subchapter at less than 12 months of age and that
were from a flock subject to a ruminant feed ban equivalent to the
requirements established by the U.S. Food and Drug Administration at 21
CFR 589.2000 may be imported.

\(2\) Casings that are derived from bovines that were slaughtered in a
region listed in

§ 94.18(a)(3) of this subchapter may be imported, provided, if the
casings are derived from the small intestine, the casings are derived
from that part of the small intestine that is eligible for use as human
food in accordance with the requirements established by the Food Safety
and Inspection Service at 9 CFR 310.22 and the Food and Drug
Administration at 21 CFR 189.5.

\(3\) Casings imported in accordance with either paragraph (b)(1) or
(b)(2) of this section must be accompanied by a certificate that:

\(i\) States that the casings meet the conditions of this section;

\(ii\) Is written in English;

\(iii\) Is signed by an individual eligible to issue the certificate
required under § 96.3; and

\(iv\) Is presented to an authorized inspector at the port of entry.

\* \* \* \* \*

13\. In § 96.3, paragraph (d) is revised to read as follows:

§ 96.3 [Certificate for animal casings]{.underline}.

\* \* \* \* \*

\(d\) In addition to meeting the requirements of this section, the
certificate accompanying sheep casings from a region listed in §
94.18(a)(3) of this subchapter must state that the casings

meet the requirements of § 96.2(b)(1), and the certificate accompanying
bovine casings from a

region listed in § 94.18(a)(3) of this subchapter must state that the
casings meet the requirements of § 96.2(b)(2).

\* \* \* \* \*

Done in Washington, DC, this \_\_\_\_\_\_\_day
of\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ .

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

Under Secretary for Marketing and Regulatory Programs.

[^1]: ^?^ The regulations regarding BSE minimal-risk regions apply to
    bison as well as cattle. In

    §§ 93.400, 94.0, and 95.1 of the regulations, [bovine]{.underline}
    is defined as [Bos taurus]{.underline}, [Bos indicus]{.underline},
    and [Bison bison]{.underline}. Although the research and other data
    cited in this rulemaking refer to bovines other than bison (i.e., to
    "cattle"), there is no evidence to indicate that the BSE
    susceptibility of bison differs from that of cattle. We therefore
    assume that our conclusions based on cattle-specific evidence
    discussed in this rulemaking are also applicable to bison. Given
    that no cases of BSE have been detected in bison, this is likely a
    conservative assumption. The provisions of this rule apply to
    bovines as defined in the regulations, which include bison.

[^2]: ^?^ The power of a statistical test is the probability of
    rejecting the null hypothesis when it is false. The power depends on
    the test level of significance, the magnitude of effect under the
    alternative hypothesis, sample size, and variability in the
    population. Rice (1988, pp. 361-364) describes the calculation of
    statistical power for comparing two independent samples.

[^3]: ^?^ A confidence interval is a statistical range with a specified
    probability that a given parameter lies within the range. For
    example, the 90 percent confidence interval of a distribution
    indicates the range of values that we are 90 percent certain include
    the parameter value of interest. It extends from the 5^th^
    percentile, or 5 percent confidence level, at the low end of the
    distribution to the 95^th^ percentile, or 95 percent confidence
    level at the high end of the distribution. Similarly, a 95 percent
    confidence interval would extend from the 2.5 percent confidence
    level to the 97.5 percent confidence level.

[^4]: ^?^In the BsurveE model, specific "point values" are assigned to
    each test sample, based on the surveillance stream or subpopulation
    of animals from which it was collected, as well as the likelihood of
    detecting infected cattle in that subpopulation. A sample from the
    specific surveillance subpopulation where BSE is most likely to be
    detected--i.e., a middle adult clinical suspect--provides the most
    surveillance points. Conversely, a sample from the subpopulation
    where BSE is least likely to be detected\--generally routine
    slaughter--provides the least points.

[^5]: ^?^The BBC model provides a more precise estimate of BSE
    prevalence in Canada by combining the epidemiologic theory and
    application of surveillance data underlying the BSurvE model with
    additional information about the effect of the feed ban on
    prevalence.

[^6]: ^?^ The OIE Terrestrial Animal Code (Chapter 1.1.1., Article
    1.1.1.1) defines incidence as "the number of new cases or outbreaks
    of a disease that occur in a population at risk in a particular
    geographical area within a defined time interval (OIE 2006b).

[^7]: In the rulemaking for our 2005 final rule establishing criteria
    for recognition of a region as a BSE minimal-risk region, we
    discussed in detail our evaluation of Canada's veterinary
    infrastructure; disease history; practices for preventing widespread
    introduction, exposure, and/or establishment of BSE; and measures
    taken following detection of the disease (APHIS 2005).

[^8]: As discussed in the regulatory impact analysis APHIS conducted for
    this rule, most steers and heifers are ready for slaughter between
    16 and 24 months of age, feeders are generally ready between 9 and
    15 months of age, and vealers and light calves are slaughtered
    between less than 3 months and 8 months of age. In our analysis, we
    project that the total number of projected imports from Canada for
    these three categories of cattle in 2008 will be 987,000. This
    represents about 88 percent of the overall number of cattle
    projected to be imported from Canada in 2008. This percentage does
    not include imported replacement heifers and other breeding stock
    younger than 2 years of age.

[^9]: The original and the revised FSIS assessments may be viewed at

    http://www.fsis.usda.gov/Science/Risk_Assessments/index.asp.

[^10]: We proposed (71 FR 45439-45444, Docket No. APHIS-2006-0026) to
    allow the individual identification to be provided with some form of
    identification other than an eartag. We solicited comments
    concerning our proposal for 60 days ending October 10, 2006. On
    November 9, 2006, we published a document in the
    [Federal]{.underline} [Register]{.underline} (71 FR 65758-65759,
    Docket No. APHIS-2006-0026) reopening and extended the comment
    period until November 24, 2006. We received a total of 10 comments
    by that date. We are considering the issues raised by the commenters
    and will address them in a separate rulemaking document.

[^11]: ^?^ Note that this estimate for the 95th percentile for imported
    cases (105) is approximate. The 95th percentile values for the total
    number of infected animals (180) and the number of endogenous cases
    (75) are estimated independently. In particular, all of the trials
    are first ranked according to the total number of endogenous cases,
    allowing identification of the 95th percentile value. The same is
    then done in order to identify the 95th percentile value for the
    total number of BSE cases. As a result, the 95th percentile values
    may be selected from different simulation trials. Because the number
    of endogenous cases influences the number of total cases, these two
    quantities are (imperfectly) correlated, however. That is,
    simulation trials that project a large number of endogenous cases
    also project a large total number of BSE cases. Hence, the actual
    95th percentile value for the total number of imported BSE cases is
    likely to be similar to 105.

[^12]: ^?^Arnade, C.,and K. Jones. "Modeling the Cattle Replacement
    Decision." Paper prepared for presentation at the [American
    Agricultural Economics Association Meeting]{.underline}, Montreal,
    Canada, July 27-30, 2003.

    Brester, G.W., J.M. Marsh, and V.H. Smith. "The Impacts on U.S. and
    Canadian Slaughter and Feeder Cattle Prices of a U.S. Import Tariff
    on Canadian Slaughter Cattle." [Can. J. Agr. Econ.]{.underline}
    50(March 2002), pp. 51-66.

    Brester, G.W. "Estimation of the U.S. Import Demand Elasticity for
    Beef: The Importance of Disaggregation." [Rev. Agr.
    Econ.]{.underline} 18(January 1996), pp. 31-42.

    Brester, G.W., and M.K. Wohlgenant. "Estimating Interrelated Demands
    for Meats Using New Measures for Ground and Table Cut Beef." [Amer.
    J. Agr. Econ]{.underline}*.* 73(November 1991), pp. 1182-94.

    Marsh, J.M. "Impacts of Declining U.S. Retail Beef Demand on
    Farm-Level Beef Prices and Production." [Amer. J. Agr.
    Econ.]{.underline} 85(November 2003), pp. 902-13.

    Marsh, J.M. "Estimating Intertemporal Supply Response in the Fed
    Beef Market." [Amer. J. Agr. Econ.]{.underline} 76(August 1994), pp.
    444-53.

    Marsh, J.M. "USDA Data Revisions of Choice Beef Prices and Price
    Spreads: Implications for Estimating Demand Responses." [J. Agr. and
    Res. Econ.]{.underline} 17(December 1992), pp. 323-34.

    Wohlgenant, M.K. "Demand for Farm Output in a Complete System of
    Demand Functions." [Amer. J. Agr. Econ.]{.underline} 71(May 1989),
    pp. 241-52.

[^13]: ^13^ Office of Management and Budget, Circular No. A-4,
    Regulatory Analysis, September 17, 2003.
    http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf

[^14]: ^14^ An additional revenue loss of \$659,000 per month, October
    through January, multiplied by the four months, yields an additional
    annual revenue loss of \$2,636,000. This amount divided by the total
    baseline revenue from cow slaughter projected in the regulatory
    impact analysis of \$2,892,770,580 (5,084,000 cows slaughtered, at a
    price of \$54.19 per cwt and an average weight of 1,050 pounds)
    yields an additional revenue loss on an annual basis of 0.09
    percent.

[^15]: Compiled by APHIS using data from the Department of Commerce,
    U.S. Census Bureau, Foreign Trade Statistics.

[^16]: The temporary closure of the U.S. export market to Japan in
    January 2006 was in response to a specific commodity concern and not
    to the likelihood of BSE infection in the U.S. herd.

[^17]: ^17^ Ontario and Quebec account for approximately two-thirds of
    the dairy cattle inventory in Canada. Source: Statistics Canada, as
    cited in Al Mussell, Graeme Hedley, Don Ault, and David Bullock,
    "Role and Impact of Renewed Canada -- US Trade in Dairy Heifers and
    Dairy Breeding Stock," George Morris Centre, Informa Economics,
    February 2006. http://www.informaecon.com/

[^18]: ^18^ Heifers 500 pounds and over kept for milk cow replacements.
    Source: Agricultural Statistics, National Agricultural Statistics
    Service, USDA.

[^19]: ^19^ In table 17 of the preliminary Regulatory Impact Analysis
    that accompanied our January 2007 proposed rule (Docket No. APHIS
    2006-0041), under column 'Average Annual U.S. Heifer Replacements'
    the numbers for Beef and Dairy were transposed.

[^20]: Mussell, [et]{.underline} [al]{.underline} (February 2006).

[^21]: ^21^www.cwt.coop

[^22]: ^22^ Projected annual imports 2008-2012.

[^23]: ^23^Assuming the additional heifers produce milk at the same
    average rate reported for the US herd in 2006.

[^24]: ^24^Milk supply elasticities of 0.12 in year 1 and 2.46 in year
    10 are cited in Chavas, J.P., and R.M Klemme, Aggregate Milk Supply
    Response and Investment Behavior on U.S. Dairy Farms," [American
    Journal of Agricultural Economics]{.underline} 78 (February 1986). A
    total dairy product demand elasticity of -0.31 is cited in
    Haidacher, R.C., J.R. Blaylock, and L.H. Meyers. "Consumer Demand
    for Dairy Products, A Summary Analysis." USDA Economic Research
    Service, Agriculture Information Bulletin 537 (March 1988).

[^25]: ^25^ "Economic Impacts of Alternative Changes to the FDA
    Regulation of Animal Feeds to Address the Risk of Bovine Spongiform
    Encephalopathy: Final Report." Submitted by Eastern Research Group,
    Inc. to the Office of Policy and Planning, Food and Drug
    Administration, July 25, 2005.

[^26]: ^26^ Boning utility cow, Sioux Falls, price of \$54.19 per cwt,
    multiplied by an average weight of 1,050 pounds yields an average
    value of \$569 per animal. Assuming a total value per cow for
    rendered

    SRMs of five dollars: \$5/\$569 = 0.0088.

[^27]: Memorandum to All Federal Agency NEPA Liaisons, dated October 8,
    1997, from Dinah Bear, General Counsel, Executive Office of the
    President, Council on Environmental Quality, with attached draft
    memorandum from Kathleen A. McGinty, Chairman, on Guidance Regarding
    Consideration of Global Climatic Change in Environmental Documents
    Prepared Pursuant to the National Environmental Policy Act.

[^28]: A sink is, simply speaking, the converse of a source. Instead of
    releasing carbon into the atmosphere as is done when fossil fuels or
    wood are burned, sinks absorb carbon and lock it in. The most
    obvious examples are trees and other plants.

[^29]: A complete description of the model is provided in: Forsythe,
    K.W. \"An Economic Model for Routine Analysis of the Welfare Effects
    of Regulatory Changes.\" V3.00. U.S. Department of Agriculture,
    Animal and Plant Health Inspection Service, Veterinary Services,
    Centers for Epidemiology and Animal Health. April 20, 2005 (draft).
    http://www.aphis.usda.gov/peer_review/content/printable_version/bas_model_econOnly_apr20.pdf

[^30]: Four examples of studies based on this type of model are:
    Paarlberg, P.L., A.H. Seitzinger, and J.G. Lee, "Economic Impacts of
    Regionalization of a Highly Pathogenic Avian Influenza Outbreak in
    the United States," *Journal of Agricultural and Applied Economics*,
    forthcoming. Paarlberg, P.L. "Agricultural Export Subsidies and
    Intermediate Goods Trade," *American Journal of Agricultural
    Economics*. 77, 1(1995): 119 - 128. Paarlberg, P.L., J.G. Lee, and
    A.H. Seitzinger. "Potential Revenue Impact of an Outbreak of
    Foot-and-Mouth Disease in the United States," *Journal of the
    American Veterinary Medical Association*. 220, 7(April 1, 2002):
    988 - 992. Sanyal, K.K. and R.W. Jones. "The Theory of Trade in
    Middle Products," *American Economic Review*. 72(1982): 16 - 31.

[^31]: http://www.usda.gov/oce/commodity/ag_baseline.htm

[^32]: USDA, NASS. 2002 Census of Agriculture, Volume 1, Chapter 1,
    Table 16. The \$26,000 average is for operations with fewer than
    1,000 head. http://www.nass.usda.gov/Census_of_Agriculture/index.asp

[^33]: Boning utility cow (Sioux Falls) nominal price.

[^34]: (\$26,600 / 2) (0.047) = \$625.10.

[^35]: USDA, NASS, 2002 Census of Agriculture, Volume 1, Chapter 1,
    Table 17. For small-entity producers, revenue from cattle and calf
    sales totaled \$1.7 billion and revenue from dairy product sales
    totaled \$11.2 billion.
    http://www.nass.usda.gov/Census_of_Agriculture/index.asp

[^36]: In 2002, the average revenue from cattle sales for small-entity
    dairy operations was \$22,197 (\$453 per head multiplied by 49
    head). (\$22,197)(0.047) = \$1,043.26.

[^37]: \$1,043 divided by \$175,912 (average income for small dairy
    farms from combined dairy product and cattle sales) equals 0.59
    percent.

[^38]: This approximation is based on 1,000 entities filling out Form VS
    17-130 on 20 occasions per year, with each form requiring two hours.
    The estimated total time saved by not having to complete Form VS
    1-27 is calculated on this same basis.