i 

United States 

Department of 

Agriculture 

Animal and 

Plant Health 

Inspection 

Service 

March 2012 

Regulatory Impact Analysis and Analysis in 

Support of Certification that the Rule will not 

have a Significant Economic Impact on a 

Substantial Number of Small Entities 

Final Rule 

APHIS-2007-0039 

RIN 0579-AC61 

Recordkeeping for Approved Livestock 

Facilities and Slaughtering and Rendering 

Establishments 

Policy & Program Development 

Policy Analysis & Development
i 

Summary 

This rule will amend the regulations regarding the interstate movement of livestock to 

require approved livestock facilities and listed slaughtering and rendering establishments to 

maintain certain records for 5 years. Currently, approved livestock facilities are required to 

retain certain records for 2 years. No record retention provisions currently apply to listed 

slaughtering and rendering establishments. 

For some livestock diseases, the incubation period (the time from when an animal 

becomes infected until the disease is evident) can last for years before clinical or behavioral 

signs become apparent. A prime example is bovine tuberculosis, a contagious disease of both 

animals and humans caused by specific types of bacteria that are part of the Mycobacterium 

group. The incubation period for bovine tuberculosis can range from months to years. By 

requiring record retention for 5 years, the rule will benefit APHIS and State animal health 

authorities, the operators of livestock, slaughtering, and rendering facilities, and livestock 

producers, generally, in the event that a traceback is required to locate the source herd of an 

animal discovered to have a disease such as bovine tuberculosis. 

The rule is not expected to result in significant costs for the affected entities. An analysis 

of similar recordkeeping costs expected to be incurred because of a recent Food Safety and 

Inspection Service rulemaking found the costs to be minimal. For approved livestock facilities 

that are already required to retain records for 2 years, and rendering facilities that are currently 

maintain relevant records per Food and Drug Administration requirements, the costs will be 

smaller still. 

The alternative to the rule would be to leave the regulations unchanged. In doing so, 

possible reductions in losses associated with animal diseases that have long incubation periods 
ii 

would not be realized. The rule is preferred to the current regulations, given the relatively minor 

recordkeeping costs that would be incurred to achieve improved traceback capabilities. 

The benefits of the rule will justify its costs. There were no comments received on the 

economic analysis prepared for the proposed rule, nor were other significant economic issues 

raised. While the majority of approved livestock facilities, slaughtering establishments, and 

rendering establishments are small entities, costs incurred because of the rule are also expected 

to be small. The Administrator of the Animal and Plant Health Inspection Service has 

determined that this action will not have a significant economic impact on a substantial number 

of small entities. 

 
iii 

Table of Contents

Summary .............................................................................................................................. i

Introduction ......................................................................................................................... 1

Benefits of the Rule ............................................................................................................ 2

Costs of the Rule ................................................................................................................. 3

Alternative to the Rule ........................................................................................................ 4

Potential Impact on Small Entities ...................................................................................... 4
1 

Introduction 

This analysis examines economic impacts of a rule that will require approved livestock 

facilities and listed slaughtering and rendering establishments to maintain certain records for 5 

years. Currently, approved livestock facilities are required to retain certain records for 2 years. 

No record retention provisions are required of listed slaughtering and rendering establishments. 

Benefits and costs of the rule are examined in this analysis in accordance with Executive 

Orders 12866 and 13563, and the benefits are expected to justify the costs. Possible impacts on 

small entities are considered in accordance with the Regulatory Flexibility Act. 

An approved livestock facility is defined in the Code of Federal Regulations (9 CFR 

§71.1) as a stockyard, livestock market, buying station, concentration point, or any other 

premises under State or Federal veterinary supervision where livestock are assembled and that 

has been approved under §71.20. These establishments range widely in size and function, 

although the tendency is toward increased industry concentration. There are about 1,500 

approved livestock facilities (“markets”) listed by APHIS. 

The 2007 Economic Census reports that there were 1,597 animal (except poultry) 

slaughtering establishments that year. At all federally inspected slaughter facilities, USDA’s 

Food Safety and Inspection Service conducts carcass-by-carcass inspections and verifies that the 

establishments follow all food safety and humane handling regulations. In the United States in 

2009, there were 34.3 million cattle and calves, 113.6 million hogs, and 2.5 million sheep and 

lamb commercially slaughtered. 

There were also 228 rendering and meat byproduct processing establishments in 2007, 

according to the Economic Census. Renderers provide an essential service to the increasingly 

competitive U.S. animal and meat industries, in converting dead livestock into a variety of 
2 

materials, including edible and inedible tallow and lard, and proteins such as meat and bone 

meal. In 2004, it was reported that rendering establishments annually convert 47 billion pounds 

or more of raw animal materials into approximately 18 billion pounds of products.1

APHIS has a listing agreement for slaughtering and rendering facilities; however, it is not 

currently required that operators agree in writing to meet the requirements in § 71.21 of the 

regulations for becoming a listed establishment. Under this rule, they will have to agree in 

writing to meet the requirements in § 71.21 of the regulations to become a listed establishment. 

To the extent that these operations already follow listing requirements, there should not be any 

cost associated with signing a listing agreement. Requiring operators to agree in writing to meet 

the requirement for an approved slaughtering or rendering facility will increase accountability. 

Benefits of the Rule 

Efficient animal disease traceback capabilities are critical to successfully maintaining the 

health of the Nation’s livestock resources. Epidemiological investigations of occurrences of 

bovine tuberculosis (TB) demonstrate the importance of recordkeeping at livestock facilities and 

slaughtering and rendering establishments. 

Traceback of animals found infected at slaughter is still the main method used to locate 

TB-affected herds. In fiscal year (FY) 2010, 13 TB-affected cattle herds were confirmed in the 

United States, in Colorado (2), Kentucky (1), Michigan (5), Mississippi (1), Nebraska (1), Ohio 

(1), and South Dakota (2). The States of Kentucky, Mississippi, Ohio and South Dakota had 

held accredited free status for TB for over 20 years. All affected herds identified in FY 2010 

were depopulated with Federal indemnity except for two beef herds in Michigan that are 

 1 Becker, Geoffrey S. “Animals and Rendering: Economics and Policy.” CRS Report for Congress, Order Code 

RS21771, updated March 17, 2004. 
3 

undergoing test-and-remove herd plans. The Ohio herd was detected during a dispersal sale and 

is no longer in existence. 

During the first half of FY 2011, six TB-affected cattle herds were confirmed in the 

United States. TB-affected herds were identified in Colorado (4), Indiana (1), and Michigan (1). 

All the affected herds in Colorado have been depopulated with Federal indemnity, and the 

disposition of the herds in Indiana and Michigan are pending. Without recordkeeping, these 

tracebacks from slaughter could not have been accomplished. 

By requiring record retention for 5 years, the rule will benefit APHIS and State animal 

health authorities, operators of livestock, slaughtering, and rendering facilities, and livestock 

producers, generally, in the event that tracebacks are required to locate the source herds of 

diseased animals ill from diseases that have long incubation periods, such as TB. 

The rule will enable more focused tracebacks for animal diseases with long incubation 

periods. Federal and State authorities will benefit from more efficient investigations and 

resulting resource savings. Livestock industries will benefit from traceback investigations that 

require information on animal movements through approved livestock facilities that took place 

between 2 and 5 years before the present, and movements to slaughtering and rendering 

establishments that took place up to 5 years before the present. The rule will also help to retain 

access to international markets in the aftermath of disease outbreaks through more rapid 

conclusion of traceback investigations. 

Costs of the Rule 

The rule is not expected to result in significant costs for the affected entities. For 

approved livestock facilities that are already required to maintain records for 2 years, and for 

slaughtering and rendering facilities that are already voluntarily maintaining records, the costs 
4 

will be smaller still. A recent rulemaking by USDA’s Food Safety and Inspection Service 

provides insight regarding the magnitude of costs of recordkeeping.2

 The economic analysis for 

the FSIS rule estimated recordkeeping and storage costs (labor and materials) for one year, for 

6,300 establishments, to total about $83,000, or less than $15 per establishment. When these 

costs were extended for a total of 5 years, the estimate totaled $130,000, that is, less than $21 per 

establishment. 

The FSIS rule concerned recordkeeping needed for required notification when an 

adulterated or misbranded meat or poultry product had entered commerce. The analysis for the 

FSIS rule suggests that recordkeeping costs attributable to this rule will be relatively minor. 

Alternative to the Rule 

The alternative to the rule would be to leave the regulations unchanged, that is, continue 

to require approved livestock facilities to retain records for 2 years and not require slaughtering 

and rendering establishments to maintain records. In doing so, possible reductions in losses 

associated with animal diseases that have long incubation periods would not be realized. The 

rule is preferred to the current regulations, given the relatively minor recordkeeping costs that 

would be incurred to achieve improved traceback capabilities. 

Potential Impact on Small Entities 

The Regulatory Flexibility Act requires that agencies consider the economic impact of 

rule changes on small businesses, organizations, and governmental jurisdictions. Section 604 of 

the Act requires agencies to prepare and make available to the public a final regulatory flexibility 

analysis (FRFA) describing any changes made to the rule as a result of comments received and 

the steps the agency has taken to minimize any significant economic impacts on small entities. 

 2

 Federal Register, Volume 75, No. 57, Thursday, March 25, 2010, pp. 14361-1468. 
5 

In place of the FRFA, 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. 

The Small Business Administration (SBA) has established guidelines for determining 

which firms are considered small under the Regulatory Flexibility Act. This rule will affect 

approved livestock facilities, which are defined as stockyards, livestock markets, buying stations, 

concentration points, or any other premises under State or Federal veterinary supervision where 

livestock are assembled and that have been approved under § 71.20. Many of these entities are 

classified by the North American Industry Classification System as Livestock Merchant 

Wholesalers (NAICS 424520), for which the small-entity standard is not more than 100 

employees. According to the 2007 Economic Census, of a total number of 1,012 establishments 

in this industry, only 2 of them had 100 or more employees.3

As another indication that most approved livestock facilities qualify as small entities, the 

U.S. Department of Agriculture’s Grain Inspection, Packers, and Stockyards Administration 

(GIPSA) recorded a total of 1,209 posted stockyards,4 for which the APHIS employees who 

work closely with GIPSA estimate the majority of these industries qualify as small entities under 

the SBA standard. 

Establishments primarily engaged in operating stockyards for transportation rather than 

for buying, selling, or auctioning livestock are classified within NAICS 488999, All Other 

Support Activities for Transportation, for which the small-entity standard is annual receipts of 

not more than $7 million. While we do not have sales data for entities within this industry that 

 3

 U.S. Census Bureau, 2007 Economic Census. http://factfinder.census.gov/servlet/IBQTable?_bm=y&-

fds_name=EC0700A1&-_skip=3100&-ds_name=EC0742SSSZ2&-_lang=en

4

 USDA GIPSA, 2010 Annual Report, March 2011, http://archive.gipsa.usda.gov/pubs/2010_psp_annual_report.pdf
6 

will be directly affected by the rule, the 2007 Economic Census reports that the annual revenue 

for the industry totaled $1.65 billion. Based on a total of 1,418 establishments, the average 

revenue per establishment was less than $1.2 million, well below the small-entity standard.5

Livestock slaughtering and rendering facilities are classified, respectively, within Animal 

(except Poultry) Slaughtering (NAICS 311611) and Rendering and Meat Byproduct Processing 

(NAICS 311613). For both of these industries, the SBA small-entity standard is not more than 

500 employees. 

According to the 2007 Economic Census, there were 1,597 animal (except poultry) 

slaughtering establishments, of which 1,466 (92 percent) had fewer than 100 employees.6 

Similarly, for rendering establishments in 2007, of a total of 228 establishments, there were 208 

(91 percent) that had fewer than 100 employees.7

It is evident that most of the businesses that will be directly affected by the rule are small 

entities. However, costs incurred because of the rule will also be small. Approved livestock 

facilities are already required to retain for a period of 2 years documents such as weight tickets, 

sales slips, and records of origin, identification, and destination that relate to livestock that are or 

that have been in the facilities. Incremental costs for these facilities of continuing to retain the 

documents for an additional three years will be minor. Many slaughtering and rendering 

facilities are also already voluntarily maintaining such records. 

Requiring the retention of certain records for 5 years will allow tracebacks further into 

the past than is currently possible, thus providing the opportunity to locate potentially infected or 

exposed livestock that might otherwise remain unidentified. There were no comments received 

 5 U.S. Census Bureau, 2007 Economic Census. http://factfinder.census.gov/servlet/IBQTable?_bm=y&-

fds_name=EC0700A1&-_skip=1900&-ds_name=EC0748SSSZ1&-_lang=en 

6 U.S. Census Bureau, 2007 Economic Census, http://factfinder.census.gov/servlet/IBQTable?_bm=y&-

fds_name=EC0700A1&-geo_id=&-_skip=0&-ds_name=EC0731I1&-_lang=en 

7

 Ibid. 
7 

on the economic analysis prepared for the proposed rule, nor were other significant economic 

issues raised. Based on the information presented, the Administrator of the Animal and Plant 

Health Inspection Service has determined that this action will not have a significant economic 

impact on a substantial number of small entities.