Analysis in Support of Certification that the Rule will not 

have a Significant Economic Impact on a Substantial 

Number of Small Entities 

Proposed Rule 

Importation of Live Birds, Poultry, Eggs for Hatching, and Poultry 

Products from a Region in the European Union 

APHIS-2009-0094 

U.S. Department of Agriculture

Animal and Plant Health Inspection Service

June 2010, Updated April 2011
2 

Summary 

This analysis provides the basis, as required by the Regulatory Flexibility Act, for 

certification by the APHIS Administrator that the proposed rule, if promulgated, would not have 

a significant economic impact on a substantial number of small entities.

The analysis examines impacts for U.S. small entities of a rule that would amend 

9 CFR 94.6 by adding a region comprised of the 25 Member States that constituted the European 

Union in 2006 (EU-25) to the list of regions considered to be free of Newcastle disease and 

highly pathogenic avian influenza (HPAI). This region would be designated as a single region, 

the European Union Poultry Trade Region (EU-PTR), for which import restrictions for live birds 

and poultry, hatching eggs, poultry meat, and other poultry products, including eggs (other than 

hatching eggs), and egg products would be uniformly applied. If outbreaks of either disease 

were to occur, this proposed rule would facilitate the continuation of imports from regions within 

the EU-PTR free of Newcastle disease and HPAI. 

We expect the proposed rule to have negligible economic effects for U.S. entities, large 

or small, because of the relatively small quantities of poultry and poultry products likely to be 

imported from the EU-PTR. In addition, the poultry industry in the United States is highly 

concentrated and vertically integrated, with extensive use of contractual agreements for 

production, an industry structure that will tend to mitigate any economic effects of the rule for 

small entities. The United States is the world’s largest producer and exporter of poultry meat; 

about 20 percent of U.S. poultry production was exported in 2009. Imports from the EU-PTR 

would face a highly competitive U.S. market. 

The EU-25 region is a large producer of live poultry, poultry meat and other poultry 

products, but two-thirds of the region’s trade in poultry and poultry products is between Member 
3 

States; 13 of the 25 Member States had a within-region trade of 70 percent or more. More than 

half of the Member States are net importers of live poultry and poultry products (13 are net 

importers of live poultry, 16 of poultry meat, and 17 of hatching eggs). 

Nine Member States are currently recognized by APHIS as free of Newcastle disease; 

however, the quantities of poultry or poultry products exported to the United States are small. In 

aggregate, only 40 metric tons (MT) of poultry meat were exported to the United States in 2009, 

led by France. The 40 MT comprised only 0.07 percent of poultry meat imports by the United 

States in 2009. U.S. imports of live poultry and hatching eggs from EU-25 Member States has 

been sporadic and at insignificant levels. Over 99 percent of live poultry import, 97 percent of 

poultry meat imports, and 91 percent of hatching egg imports were imported from Canada in 

2009. 

To quantify the effects of potential levels of poultry meat exports to the United States 

from the EU-PTR, we model three scenarios based on the Member States’ combined average 

annual global exports of 3,116,400 MT (the sum of exports within and external to the EU-25 

region, 2007-2009): (1) an amount proportional to the average percentage of France’s global 

poultry meat exports sent to the United States (0.045 percent); (2) an amount proportional to the 

highest single-year percentage of France’s global poultry meat exports sent to the United States 

(0.098 percent); and (3) an amount equal to 0.5 percent of the total global poultry meat exports 

by the EU-PTR countries. Amounts of poultry meat shipped to the United States under the three 

scenarios would be 1,402 MT, 3,054 MT, and 15,582 MT. 

In all three scenarios, consumer welfare gains slightly outweigh producer welfare losses. 

Even in the third scenario, in which we assume the EU-PTR would export 15,582 MT to the 

United States, the decline in producer welfare would represent less than 0.1 percent of revenue 
4 

received from the sale of domestically produced poultry meat. The price decline in this third 

scenario would also be less than 0.1 percent. The price and welfare effects are likely to be even 

smaller than are indicated by the three scenarios, to the extent that poultry meat imports from the 

EU-PTR displace poultry meat imports from other countries. 

The quantity of poultry and poultry products expected to be imported from the EU-PTR 

is not significant. We do not expect the proposed rule to have any appreciable impact on U.S. 

poultry and egg producers, regardless of the size of their operations. Therefore, the proposed 

rule will not have a significant economic impact on a substantial number of small entities. 
5 

Introduction 

This analysis provides the basis, as required by the Regulatory Flexibility Act, for 

certification by the APHIS Administrator that the proposed rule, if promulgated, would not have 

a significant economic impact on a substantial number of small entities. The analysis examines 

impacts for U.S. small entities of a rule that would amend 9 CFR 94.6 by adding a region 

comprised of the 25 Member States that constituted the European Union in 2006 (EU-25) to the 

list of regions considered to be free of Newcastle disease and highly pathogenic avian influenza 

(HPAI).1

APHIS received a request from the European Commission (EC) to recognize the EU-25 

as free of Newcastle disease and HPAI. The agency conducted a risk evaluation that concluded 

that the region is free of both Newcastle disease and HPAI and has an adequate veterinary 

infrastructure in place to prevent, control, and manage Newcastle disease or HPAI outbreaks 

should they occur. EC animal health regulations are uniformly applied and harmonized across 

all EU-25 Member States. These measures include surveillance, epidemiological investigations, 

diagnostic capability, and emergency response capacity, which APHIS recognizes as sufficient to 

identify poultry diseases rapidly, establish appropriate control zones, and implement all measures 

 This region would be designated as a single region, the European Union Poultry Trade 

Region (EU-PTR), for which import restrictions for live birds and poultry, hatching eggs, poultry 

meat, and other poultry products, including eggs (other than hatching eggs), and egg products 

would be uniformly applied. The rule is part of a continuing program to allow the importation of 

foreign agricultural products that APHIS has determined are without significant risk of 

introducing exotic animal diseases into the United States.

 1 The EU-25 Member States are Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, 

Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, 

Malta, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, the Netherlands, and the United 

Kingdom. 
6 

necessary to effectively limit spread of the disease out of the affected zone. Nevertheless, 

APHIS would apply the movement restrictions found in 9 CFR 92.3 to recognize the quarantine 

restrictions established by the EC in the EU-PTR, with the additional requirement that no 

regulated articles from a restriction zone implemented by the EC because of an outbreak of 

Newcastle disease or HPAI in domestic poultry would be imported until 90 days following 

depopulation, cleaning, and disinfection of the last affected premises. If outbreaks of either 

disease were to occur, this rule would facilitate the continuation of imports from regions within 

the EU-PTR free of Newcastle disease and HPAI. 

The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their 

proposed and final rules on small businesses, small organizations, and small governmental 

jurisdictions. Section 603 of the Act requires an agency to prepare an initial regulatory 

flexibility analysis that describes the expected impact of the rule on small entities and any 

significant alternatives to the proposed rule which accomplish the stated objectives and that 

minimize any significant economic impact of the proposed rule on small entities. In place of the 

IRFA, the head of the agency may certify that a rule will not have a significant economic impact 

on a substantial number of small entities. This analysis provides the factual basis for 

certification of this rule. 

As background, we provide a brief overview of poultry production and trade by the 

United States and the EU-25 Member States. This is followed with an estimate of price and 

welfare effects of the rule based on assumed levels of poultry and poultry product imports from 

the EU-25. We then describe the expected impact on small entities.
7 

U.S. Poultry Industry

Production 

The United States is the world's largest poultry producer, the second-largest egg 

producer, and second-largest exporter of poultry meat. U.S. poultry meat production totals over 

43 billion pounds annually; over four-fifths is broiler meat, most of the remainder is turkey meat, 

and a small fraction is other chicken meat. Cash receipts from sales of poultry and eggs 

(broilers, farm chickens, eggs, turkey, ducks, and other poultry) were $36.8 billion in 2008, 

about 13 percent more than the previous year.2

Broiler production is concentrated in a group of States stretching from Delaware, south 

along the Atlantic coast to Georgia, then westward through Alabama, Mississippi, and Arkansas. 

The top broiler-producing State is Georgia, followed by Arkansas, Alabama, North Carolina, 

Mississippi, and Texas. Operations in these States account for over 65 percent of broiler cash 

receipts. 

 Of this total, 63 percent was from the sale of 

broilers, 22 percent from eggs, 12 percent from turkeys and 3 percent from other poultry. 

Most U.S. broiler production is conducted under contract with broiler processors. The 

grower normally supplies the grow-out house with all the necessary heating, cooling, feeding, 

and watering systems. The grower also supplies the labor needed in growing the birds. The 

broiler processor supplies the chicks, feed, and veterinary medicines. The processor schedules 

transportation of the birds from the farm to the processing plant. In many cases, the processor 

also supplies the crews who place broilers into cages for transportation to the slaughter plant. 

 2

 USDA/ERS, Farm Income: Cash Receipts, 2000-2008 

(http://www.ers.usda.gov/data/farmincome/finfidmuxls.htm). 
8 

The U.S. turkey industry produces over one-quarter of a billion birds annually, with the 

live weight of each bird averaging over 25 pounds. Production of turkeys is somewhat more 

scattered geographically than broiler production. The top five turkey-producing States are 

Minnesota, North Carolina, Missouri, Arkansas, and Virginia. The United States is by far the 

world's largest turkey producer, followed by the European Union. Even though exports are a 

major component of the U.S. turkey industry, the United States consumes more turkey per capita 

than any other country. 

U.S. egg operations produced over 90.4 billion eggs annually. Over 85 percent of egg 

production is for human consumption (the table-egg market). The remainder of production is for 

the hatching market.3

 These eggs are hatched to provide replacement birds for the egg-laying 

flocks and broiler chicks for grow-out operations. The top five egg-producing States are Iowa, 

Ohio, Pennsylvania, Indiana, and California.4

A measure of the industry’s changing structure has been the decreasing number and 

increasing size of chicken hatcheries. In 1973, there were 989 facilities that hatched chickens in 

the United States. Those hatcheries had the combined capacity to incubate 436 million eggs at 

one time, for an average capacity of 440,849 eggs.5

 3

 USDA/NASS, Chickens and Eggs: 2009 Summary, February 2010 

(http://usda.mannlib.cornell.edu/usda/current/ChickEgg/ChickEgg-02-25-2010.pdf). 

 In 2009, there were 317 chicken hatcheries, 

with a combined incubator capacity of 898.2 million eggs and an average capacity of 2.83 

million eggs. Similarly, there were 203 turkey hatching facilities in 1973, with the capacity to 

incubate 45 million eggs at one time and an average capacity of 221,675 eggs. In 2009, there 

4

 USDA/ERS, Livestock, Dairy, and Poultry Outlook/ LDP-M-190, April 21, 2010 

(http://www.ers.usda.gov/Publications/LDP/2010/04Apr/LDPM190.pdf). 

5

 USDA/Statistical Reporting Service, Hatchery Production, Annual Revisions 1974 

(http://usda.mannlib.cornell.edu/usda/nass/HatcProdSu//1970s/1975/HatcProdSu-03-18-

1975.pdf)
9 

were 51 turkey hatcheries, with an incubator capacity of 38.3 million eggs and an average 

capacity of 750,980 eggs.6

In terms of tonnage, poultry meat production and trade exceeds that of beef or pork. For 

instance, in 2009, the U.S. produced 41.2 billion pounds of poultry meat compared with 26 

billion pounds of beef and 23 billion pounds of pork. Additionally, the U.S. also produced 6.5 

billion dozen eggs. Poultry meat per capita consumption (95.5 pounds in 2009) exceeds per 

capita consumption of both beef (61.2 pounds) and pork (50 pounds). Furthermore, the U.S. 

exports more poultry meat (7.4 billion pounds) than beef and veal (1.9 billion pounds) and pork 

(4.1 billion pounds) combined.7

As shown in table 1, both U.S. poultry meat production and consumption have fluctuated 

over recent years. The most recent data show production and consumption averaged 

18,533,197 MT and 15,429,543 MT, respectively, between 2003 and 2009. U.S. imports 

increased from 16,076 to 59,183 MT, while exports increased from 2,651,068 to 3,738,457 MT. 

Table 1--U.S. Poultry Meat: Supply, Utilization and Price, 2003-2009 

Year

Production 

in 1,000 

Metric Tons

Consumption 

in 1,000 

Metric Tons

Wholesale 

Price in $ 

per MT

Exports in 

Metric 

Tons 

Imports in 

Metric 

Tons 

2003 17,414 14,479 1,367 2,651,068 16,076

2004 17,761 15,248 1,634 2,534,689 21,306

2005 18,538 15,812 1,561 2,752,326 26,476

2006 18,680 15,934 1,420 2,784,256 38,209

2007 19,089 15,819 1,684 3,318,818 48,238

 6

 USDA/NASS, Hatchery Production 2009 Summary, April 2010 

(http://usda.mannlib.cornell.edu/usda/current/HatcProdSu/HatcProdSu-04-16-2010.pdf). 

7

 USDA/ERS, Livestock, Dairy and Poultry Outlook/LDP-M-190/April 21, 2010 

(http://www.ers.usda.gov/publications/ldp/2010/04Apr/ldpm190tables.pdf).
10 

Year

Production 

in 1,000 

Metric Tons

Consumption 

in 1,000 

Metric Tons

Wholesale 

Price in $ 

per MT

Exports in 

Metric 

Tons

Imports in 

Metric 

Tons

2008 19,574 15,718 1,757 3,929,986 54,533

2009 18,676 14,997 1,711 3,738,457 59,183 

7-Year 

Average 

(2003-2009) 18,533 15,469

 

1,591 3,101,371 37,717

Sources: USDA/ERS, Livestock, Dairy, and Poultry Outlook, LDP-M-190, April 21, 2010, for 

production, and wholesale price data; export and import data are from USDA FAS’s Global Agricultural 

Trade System (GATS), http://www.fas.usda.gov/gats/default.aspx (5/14/10). Consumption data is 

computed as production plus imports minus exports.

Trade 

As can be seen from table 1, the United States was a net exporter throughout the period 

with average annual exports (3,101,371 MT) dwarfing imports (37,717 MT). Imports of poultry 

meat represent less than 0.3 percent of consumption. Similarly, U.S. exports of live poultry, 

hatching eggs, and eggs other than hatching eggs are by far larger than imports of these products. 

As stated above, the United States is the world's second-largest exporter of poultry meat. 

Annual poultry meat exports totaled about 3.7 million MT in 2009, which is about 20 percent of 

U.S. production. Demand for U.S. poultry meat products has fluctuated over the last several 

years due to changing economic conditions and currency exchange rates in major importing 

countries. Exports are widely distributed. The largest importers of U.S. broiler products are 

Russia, China, Mexico, Canada, Ukraine, Hong Kong, and Taiwan. Together, these markets 

accounted for over 73 percent of U.S. poultry meat exports in 2009, on a quantity basis. 

The United States imported about 59,000 MT of poultry meat in 2009, the equivalent of 

less than four-tenths of a percent of domestic production. Over 84 percent of imports in 2009 

came from Canada and 14 percent from Chile. 
11 

As in the case of poultry meat, U.S. exports of live poultry, fresh shelled eggs and 

hatching eggs are widely distributed and significantly outweigh imports of these products. The 

U.S. exported 73.8 million and imported 11.1 million live poultry in 2009. Imports were from 

Canada (99.88 percent) and the United Kingdom (0.12 percent). Export destinations included 

Canada, China, Mexico, Brazil, Indonesia, Thailand, Peru, Philippines, Egypt and Japan. These 

countries accounted for 60 percent of the total live poultry exports. 

The U.S exported 894 million and imported 36 million table eggs in 2009. Major 

destinations of table eggs included Canada, Hong Kong, United Arab Emirates, China, Mexico, 

Bahamas and Israel. These countries together accounted for about 89 percent of U.S. egg 

exports. All of U.S. table egg imports were from Canada, China, New Zealand, Taiwan and 

Thailand. The U.S. also exported 138 million and imported 14 million hatching eggs in 2009. 

Major destinations included Canada, Mexico, Jamaica, United Kingdom, Trinidad and Tobago, 

Saudi Arabia, Dominican Republic, Nicaragua and Guatemala. These countries accounted for 77 

percent of U.S. total hatching egg exports. U.S. hatching egg imports came from Canada (over 

90 percent), France, Australia, Germany, the United Kingdom, and the Netherlands.

8

EU-25 Poultry Industry

The EU-PTR region, in aggregate, is one of the largest producers of live poultry, poultry 

meat and other poultry products. The region has the third largest poultry stock (1,381 million), 

and is the second largest producer of eggs in shell (105 billion), and third largest producer of 

poultry meat (10.23 million MT). Although over 90 percent of production is for domestic 

consumption by the EU-25 Member States, the region is the largest exporter of eggs in shell and 

 8

 Global Trade Atlas, 2010 (http://www.gtis.com/gta/secure/gateway.cfm)
12 

the third largest exporter of poultry meat. Also, the region is the largest importer of poultry 

meat.9

Two-thirds of EU-25 trade in poultry and poultry products is within the region, and 13 of 

the 25 countries had a within-region trade of 70 percent or more. More than half of the Member 

States are net importers of live poultry and poultry products (13 are net importers of live poultry, 

16 of poultry meat, and 17 of hatching eggs). In poultry meat trade, 6 countries (the 

Netherlands, France, Germany, Belgium, the United Kingdom and Poland) account for about 80 

of the export trade of the region. Most of the remaining trade is with other European countries, 

Russia and Middle Eastern countries. The larger Member States have a more diversified export 

trade than do the smaller ones.

 

10

 Currently, only a few EU-25 Member States export poultry or poultry products to the 

United States and the quantities exported are small. The United States imported 11,104,806 live 

poultry, 14,040,288 hatching eggs and 59,183 MT of poultry meat in 2009. Of these total 

imports, over 99 percent of live poultry, 97 percent of poultry meat and 91 percent of hatching 

eggs were imported from Canada. Included among the remaining quantities were imports from 

nine EU-25 Member States. Several EU-25 Member States were sources of hatching eggs, and 

four were sources of live poultry and poultry meat. Over 99 and 97 percent of poultry meat and 

hatching eggs, respectively, exported to the United States from EU-25 Member States came from 

France. All live poultry exports came from the United Kingdom. 

 

Imports from the EU-25 Member States in 2009 were very small compared to U.S. stocks 

of live poultry (2.3 billion), hatching eggs (12.7 billion), and total poultry meat production (18.7 

 9 UN/FAO, Trade (FAOstat@fao.org)

10 Global Trade Atlas, Global Trade Information Services, Inc., country edition, May, 2010.
13 

million MT).11

Although consumers would benefit from any increase in imports from the EU-25 in terms 

of greater choice, they are expected to gain little from lower prices. With respect to live poultry 

imports, there also may be long-term benefits that arise from genetic diversification.

 In many cases, imports from the EU-25 Member States may not be competitively 

priced, but rather supplying niche markets at prices two or three times higher than comparable 

domestic products. 

Potential Economic Impact of the Rule

Imports of live poultry and hatching eggs are likely to remain sporadic even with the 

expansion of EU-25 potential sources. Imports of breeding stock and hatching eggs are often 

one-time events from a specific source. That is, once a producer’s needs for breeding stock are 

met during a given period, the producer may not be in the market again for several years. Import 

data reflect this sporadic pattern. For example, during the ten-year period 2000 to 2009, there 

were live poultry imports from Spain (2001), France (2004), and the United Kingdom (between 

2005 and 2009). The amount imported from each country varied year-by-year. There was a 

similar pattern for hatching egg imports. 

Imports of poultry meat have been somewhat more regular. France exported poultry 

meat to the United States each year (2000 to 2009), and we assume a continuing yearly flow of 

poultry meat from the EU-PTR. Therefore, this analysis of potential economic effects of the rule 

relies on poultry meat trade data. We estimate the impact of poultry meat imports from the 

EU-PTR on U.S. production, consumption, and prices using a non-spatial partial equilibrium 

model. The data used were obtained from the USDA Foreign Agricultural Service, the Global 

 11 USDA/NASS, Chicken and Eggs: 2009 Summary, February 2010 

(http://usda.mannlib.cornell.edu/usda/current/ChickEgg/ChickEgg-02-25-2010.pdf); UN/FAO, 

Trade (FAOstat@fao.org).
14 

Trade Atlas, and FAOSTAT. The demand and supply elasticities used are -0.56 and 0.65, 

respectively.

12

We model three potential levels of poultry meat exports to the United States from the 

EU-PTR, based on the Member States’ average annual global exports of 3,116 thousand MT (the 

sum of exports within and external to the EU-25 region, 2007-2009): (1) an amount proportional 

to the average percentage of France’s poultry meat exports that was sent to the United States 

(0.045 percent); (2) an amount proportional to the highest one-year percentage of France’s global 

poultry meat exports sent to the United States (0.098 percent);13

Table 2 presents the changes resulting from the assumed U.S. poultry meat imports from

the EU-PTR. These include annual changes in U.S. consumption, production, wholesale price, 

consumer welfare, producer welfare, and net welfare. Our medium level of poultry meat imports 

of 3,054 MT (assuming poultry meat imports proportional to the highest single-year imports

from France) would result in a decline of $0.25 per metric ton in the wholesale price of poultry 

 and (3) an amount equal to 0.5 

percent of global poultry meat exports by the EU-PTR countries. Notwithstanding a history of 

imports from France, poultry products from the EU-25 Member States are generally priced 

higher than domestically produced poultry meat, but for this analysis we assume that poultry 

meat imports from the EU-PTR would be competitively priced. Amounts of poultry meat 

shipped to the United States under the three scenarios would be 1,402 MT, 3,054 MT, and 

15,582 MT. 

 12 Global Trade Atlas, Global Trade Information Services, Inc., country edition, May 2010; John 

Sullivan, John Wainio, and Vernon Roningen. A Database for Trade Liberalization Studies, 

#AGES89-12, March 1989; and UN/FAO, FAO stat data (http://faostat.fao.org). 

13 France’s poultry industry is export-oriented, has FSIS equivalence, and supplied poultry meat 

products to the United States in each year during the period between 2000 and 2009. The 

hypothetical import levels based on France’s exports may overstate potential shipments to the 

United States from the EU-PTR.
15 

meat and a fall in U.S. production of 1,639 metric tons. Consumption would increase by 1,415 

metric tons. Producer welfare would decline by about $3.915 million and consumer welfare 

would increase by about $3.925 million, yielding an annual net benefit of about $10,000. 

Table 2: Estimated Impact on the U.S. Economy of Poultry Meat Imports from EU-PTR for 

Three Import Scenarios

Assumed annual poultry meat

imports from the EU-PTR 1,4021 3,0542 15,5823

Change in U.S. consumption, 

MT 650 1,415 7,221 

Change in U.S. production, MT -752 -1,639 -8,361 

Change in wholesale price of 

poultry meat, dollars per MT -$0.12 -$0.25 -$1.29 

Change in consumer welfare 

($1,000) $1,802 $3,925 $20,030 

Change in producer welfare

($1,000) -$1,797 -$3,915 -$19,971 

Annual net benefit $4,475 $9,957 $58,910 

Note: The baseline data used are seven-year annual averages for production, consumption, prices, exports 

and imports, as reported in the last row of table 1. The demand and supply elasticities used are -0.56 and 

0.65, respectively (USDA/NASS, Chicken and Eggs: 2009 Summary, February 2010 

(http://usda.mannlib.cornell.edu/usda/current/ChickEgg/ChickEgg-02-25-2010.pdf); UN/FAO, Trade 

(FAOstat@fao.org)). 

1

An amount proportional to the average percentage of the France’s global poultry exports sent to the 

United States (0.045 percent). 

2

An amount proportional to the highest single-year percentage of France’s global poultry meat exports 

sent to the United States (0.098 percent). 

3

An amount equal to 0.5 percent of the total global poultry meat exports by the EU-PTR countries. 

In all three scenarios, consumer welfare gains slightly outweigh producer welfare losses. 

Even in the third scenario, in which we assume EU-PTR would export 15,582 MT to the United 

States, the decline in producer welfare represents less than 0.1 percent of revenue received from 

the sale of domestically produced poultry meat.14

 14 $20 million divided by $21.8 billion equals 0.092 percent. 

 The price decline in this third scenario is also 

less than 0.1 percent. The price and welfare effects are likely to be even smaller than are 
16 

indicated by the three scenarios, to the extent that poultry meat imports from the EU-PTR

displace poultry meat imports from other countries. 

Potential Impact on Small Entities

As a part of the rulemaking process, APHIS evaluates whether regulations are likely to 

have a significant economic impact on a substantial number of small entities. The Small 

Business Administration (SBA) has established guidelines for determining the number of firms 

considered small under the Regulatory Flexibility Act. Entities that may be affected by the rule

include ones engaged in the production of breeding stock, hatchery operations, and producers of 

table-egg layers. There are four major firms that produce breeding stock of egg-type chickens, 

three breeders of meat-type chickens, two breeders of turkeys, and one firm producing breeding 

stock of both egg-type and meat-type chickens.15

Since the analysis is of potential effects of poultry meat imports from the EU-PTR, we 

consider possible effects for broiler and turkey farms and other poultry meat producers, as well 

as poultry processors. The SBA defines small poultry processing plants as those plants with no 

more than 500 employees.

 All of these firms have multiple facilities 

headquartered in the United States and operating in domestic and international markets. They do 

not qualify as small entities. 

16

 15 Mary E. Delany, Genetic Diversity and Conservation of Poultry, p.261, in W.M. Muir and S. 

E. Aggrey, Poultry Genetics, Breeding and Biotechnology, August 2003; Susanne Gura, 

Livestock Genetics Companies: Concentration and Proprietary Strategies of an Emerging Power 

in the Global Economy (hhtp://pastoralpeoples.org/docs/Livestock_genetics.pdf) 

 According to the 2002 Economic Census (most recent data on 

establishment sizes), there were 536 poultry processors with annual total sales of about $38 

billion and average annual sales of $70 million. Of the above number of establishments, about 

16 Small Business Administration, http://www.SBA.gov/size. Small poultry processing 

operations (NAICS 311615) include establishments engaged in slaughtering poultry and small 

game and/or preparing processed poultry and small game meat.
17 

64 percent had fewer than 500 employees. Small operations had total sales of $8.17 billion (21 

percent), with average annual sales of $24 million, while large operations had sales of $29.5 

billion (78 percent), with average annual sales of about $154 million. 

Broiler operations (NAICS 112320), turkey operations (NAICS 112330), hatcheries 

(NAICS 112340), and other poultry operations (NAICS 112390) may be affected indirectly by 

the supply of breeding stock from the EU-PTR. These operations are considered to be small if 

they have annual sales of $750,000 or less.17

 According to the 2007 Census of Agriculture (most recent data on farm sizes), a total of 

27,091 farms sold 8.9 billion broilers.

 Commercial egg producers (NAICS 112310) are 

considered small if they have annual sales of not more than $12.5 million. 

18 Of these farms, 15,747 operations (58 percent) that sold

nearly 1.0 billion birds (11 percent) are considered small entities, with average sales of about 

64,128 birds and average annual gross receipts of about $155,665. The remaining 42 percent of 

the farms had total sales of 7.9 billion birds. These larger entities averaged sales of 696,845 

birds and average annual gross receipts of about $1.7 million. Thirty-six percent of broiler 

operations (9,743 operations) sold fewer than 2,000 broilers and other meat-type chickens, on 

average, for average annual gross receipts of $294. In sum, a majority of the farms that could be 

affected by this rule are small according to SBA guidelines, while bearing in mind that vertically 

integrated production systems account for about 90 percent of poultry sales.

19

The 2007 Census of Agriculture also contains data on certain sub-categories of poultry 

operations, namely, small family farms including limited resource farms, and farms having 

 

 17 U.S. Small Business Administration Table of Small Business Size Standards 

(http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf). 18 http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_ 

US/st99_1_027_028.pdf

19 Contracts and vertical integration account for over 90 percent of broiler, turkey, and egg 

production. (http://www.ers.usda.gov/AmberWaves/June03/findings/USHogandPoultry.htm) 
18 

operators who belong to socially disadvantaged groups.20

Table 3 shows that among the 148,911 farms that produced poultry and eggs in 2007, 

119,815 (over 80 percent) were small family farms. It is notable that the combined number of 

retirement farms (20,017 farms) and residential/lifestyle farms (54,500 farms) accounted for 

almost half of all poultry and egg farms. 

 Most farms that produce poultry 

qualify as small family farms (gross farm sales of less than $250,000), and many also qualify as 

limited resource farms (gross farm sales of not more than $100,000 and low household income). 

Categories of socially disadvantaged operators are women, persons of Hispanic origin, American 

Indian or Alaska Native, Asian, African American, and Native Hawaiian or other Pacific groups. 

A poultry and egg producer may qualify as a small family farm and also be counted among those 

for which one or more of the operators belong to a socially disadvantaged group. Any economic 

impacts of the rule for operations categorized as small family farms including limited resource 

farms, or farms having operators who belong to socially disadvantaged groups would be 

insignificant, given the small quantity of poultry meat expected to be imported from the EU-PTR

compared to domestic production and current imports. 

Table 4 shows the number and percentage of poultry and egg farms that had operators belonging 

to socially disadvantaged groups in 2007. There were 27,950 poultry and egg farms (18.8 percent) for 

which the principal operator was a woman. In terms of ethnicity, 5,133 poultry and egg farms (3.4 

percent) were operated by Hispanics and 4,655 poultry and egg farms (3.1 percent) had an operator who 

was American Indian or Alaskan Native. The percentage of poultry and egg farms operated by African 

Americans was 1.2 percent.

 20 For definitions and information, see: USDA ERS. Structure and Finances of U.S. Family 

Farms: Family Farm Report, 2007 edition, EIB-24.
19 

Although most poultry and egg operations are small family farms and significant 

percentages of poultry and egg operators belong to socially disadvantaged groups, economic 

effects of the rule for these farms are not expected to differ from the effects for poultry and egg 

producers generally. We do not expect the proposed rule to have any appreciable impact on U.S. 

poultry and eggs producers regardless of the size of operation or operator classification. 

Based on the above information and analysis, the proposed rule will not have a 

significant economic impact on a substantial number of small entities, regardless of the size of 

the operation or whether the operators belong to socially disadvantaged groups. The quantity of 

poultry and poultry products expected to be imported from the EU-PTR is not significant.
20 

Table 3. Number and percentage of small family poultry and egg farms, 2007 

Limited 

Resource 

Farms

Retirement 

Farms

Residential/ 

life Style 

Farms 

Farming 

Occupation/Lower 

Sales

Farming

Occupation/ 

Higher Sales

All 

Small 

Family 

Poultry and 

Egg Farms

All 

Poultry and 

Egg Farms

Number 22,719 20,017 54,500 17,884 4,695 119,815 148,911 

Percentage 15.3 13.4 36.6 12.0 3.2 80.5 100% 

Source: USDA NASS, 2007 Census of Agriculture. 

Note: A limited-resource farm is a small family farm that has gross sales of less than $100,000 (indexed after 2003), and a household 

income less than the poverty level for a family of four with two children or less than half the county median income. A retirement farm is a 

small family farm whose operators report they are retired (excludes limited-resource farms operated by retired farmers). A 

residential/lifestyle farm is a small family farm whose operators report a major occupation other than farming (excludes limited resource 

farms whose operators report a major occupation other than farming). A farming occupation/lower-sales farm is a small family farm with 

sales less than $100,000 whose operators report farming as their major occupation (excludes limited-resource farms whose operators report 

farming as their major occupation). A farming occupation/higher-sales farm is a small family farm with sales between $100,000 and 

$249,000 whose operators report farming as their major occupation. 
 21 

Table 4. Number and percentage of poultry and egg farms with operators belonging to socially disadvantaged groups, 2007 

Farms 

where the 

Principal 

Operator is 

Female

Farms 

where an 

Operator reports 

Spanish, 

Hispanic, or 

Latino origin

Farms 

where an 

Operator 

reports race as 

American 

Indian or 

Alaska Native

Farms 

where an 

operator 

reports race 

as Asian

Farms 

where an 

operator 

reports race as 

Black or 

African 

American

Farms 

where an 

operator 

reports race as 

Native 

Hawaiian or 

Other Pacific 

Islander

All 

Poultry and 

Egg Farms

Number 27,950 5,133 4,655 1,591 1,797 238 148,911

Percentage 18.8 3.4 3.1 1.1 1.2 0.2 100% 

Source: USDA NASS, 2007 Census of Agriculture. 

Note: For the ethnic/racial categories, farms reported for their top-three categories. An operator may report as belonging to more than one 

ethic/racial category, and a farm may report having operators belonging to more than one category.