### United States

Department of Agriculture Animal and Plant Health Inspection Service July 2014 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 09 - 083 - 3 RIN 0579 - AD22

Brucellosis Class Free States and Certified Brucellosis - Free Herds; Revisions to Testing and Certification Requirements

Policy & Program Development Policy Analysis & Developmenti



### Summary
On December 27, 2010, APHIS published in the Federal Register an interim rule with the overall objective of refocusing resources to control and prevent the spread of brucellosis. One of the changes that the 2010 interim rule made to the brucellosi s regulations contained in 9 CFR part 78 was to require that all sexually intact cattle and bison 6 months of age and older be included in all herd blood tests. Th is final rule change s the age at which all sexually intact cattle and domestic bison are inc luded in herd blood tests from 6 months to 18 months

. With this rule, producers will forgo payment of testing fees for sexually intact animals between 6 and 18 months of age when performing whole herd tests. For both elective and
program - required herd blo od tests, increasing the minimum testing age will benefit producers by (i) reducing the number of animals required to be tested and therefore the time and labor expended in gathering and handling animals for testing, and (ii) eliminating any stress

- induced weight loss related to herd blood testing of sexually intact animals between 6 and 18 months of age. In recent years, about one

- half million head of cattle have been included in herd blood tests annually. Approximately 70 to 80 percent of this testing h as been elective. Based on Small Business Administration standards and data from the 2012 Census of Agriculture, the majority of beef and dairy operations are small. This rule will result in cost savings for many of these operations, and will not have a significant economic impact on a substantial number of small entities.ii



### Table of Contents Summary

................................ ................................ ................................ .............................. i Introduction

................................ ................................ ................................ ......................... 1 The Cattle, Bison, and Dairy Industries

................................ ................................ .............. 1 Potential Impacts

................................ ................................ ................................ ................. 31



### Introduction
On December 27, 2010, APHIS published in the Federal Register an interim rule with the overall objective of refocus ing resources to control and prevent the spread of brucellosis. One of the change s that the 2010 interi m rule made to the brucellosis regulations contained in 9 CFR part 78 was to require that all sexually intact cattle and bison 6 months of age and older be included in all herd blood tests

. Prior to this change, sexually intact cattle and bison that had b een vaccinated were only required to be included in herd blood tests if they were 20 months of age or older and a dairy breed, or 24 months of age or older and a beef breed.
Th is rule change s the age at which all sexually intact cattle and domestic bison a re included in herd blood tests from 6 months to 18 months, except when conducting herd blood tests as part of affected herd investigations or other epidemiological investigations or when the Administrator determines testing at a younger age is necessary t o prevent the spread of brucellosis. 1 This analysis provides the basis, as required by the Regulatory Flexibility Act, for certification by the APHIS Administrator that the rule will not have a significant economic impact on a substantial number of small entities. 

### The Cattle, Bison, and Dairy Industr ies
The structure of the cattle industry continues to change, with a greater proportion of cattle being raised on fewer and larger farms. Modern beef production in the United States is a highly

s pecialized s ystem ranging from cow

- calf operators that graze pastureland to cattle feedlots focusing on

1 V accinated cattle and bison of any age that are parturient or post

- parturient will continue to be included in herd blood tests

.2

finishing cattle on grain for slaughter. 2 The total number of cattle operations in the United States in
20 12 was 91 3 , 246, of which 7 77 , 943 were cow - calf operation s. 3 Over the p ast 30 years, the number of all cattle operations in the United States declined by 33 percent, while beef cow operations declined by 1 9 percent. 4 During this time, the average number of cattle per operation has increased by 22 percent to nearly 100 head. In 20 12 , operations with 500 or more head accounted for over 50 percent of the total cattle inventory, compared with only 29 percent in 19 82

. There were 162,110 head of bison on 2,564 farms and ranches in the United States in 2012, according to the Census of Agriculture. A total of 1,187 farms and ranches sold 57,335 head of bison valued at about $94.8 million. 5 South Dakota has the most farm

- raised bison with 33,637 head on 104 farms. 6 As with the beef cattle industry, t h e dairy industry in the United States has also

u ndergone significant structural change. 7 The farm value of milk production is second only to beef among livestock industries and is equal to corn. Milk is produced in all 50 States, with the major producing S tates in the West and North. Dairy farms, overwhelmingly family

- owned and managed, are generally members of producer cooperatives. The industry has seen a consistent decline in number of operations, matched by a rise in number of cows per operation.

2 USDA

- NASS, Overview of the United States Cattle Industry , Washington, D.C.: National Agricultural Statistics Service. Released December 17, 2010

. http://usda01.library.cornell.edu/usda/current/USCatSup/USCatSup

- 12

- 17

- 2010.pdf

. 3 USDA

- NASS, Census of Agriculture , 2012.Washington , D.C.: National Agricultural Statistics Service. http://www.agcensus.usda.gov/Publications/2012/Full_Report/Volume_1,_Chapter_1_US/st99_1_012_013.pdf 4 USDA

- NASS, Census of Agriculture , 1982.Washington , D.C.: National Agricultural Statistics Service. http://usda.mannlib.cornell.edu/usda/AgCensusImages/1982/01/51/121/Table

- 22.pdf

5 USDA

- NASS, Census of Agriculture, 20 12

. Washington, D.C.: National Agricultural Statistics Service. http://www.agcensus.usda.gov/Publications/2012/Full_Report/Volume_1,_Chapter_ 1_US/st99_1_034_036.pdf 6 USDA

- NASS, Census of Agriculture, 20 12 . Washington, D.C.: National Agricultural Statistics Service. http://www.agcensus.usda.gov/Publications/2012/Full_Report/Volume_1,_Chapter_2_US_State_Level/st99_2_023_ 023.pdf 7 Overview of the United States Dairy Industry , released September 22, 2010

. http://usda.mannlib.cornell.edu/usda/current/USDairyIndus/USDairyIndus

- 09

- 22

- 2010.pdf3

Betw een 200 2 and 20 12 , the number of dairy operations with 500 or more head increased by 13 percent, from 2, 902 to 3 , 344 establishments

. The number of enterprises with 1 ,000 or

more head of dairy cows increase d by more than 30 percent, rising from 1,256 to 1,807 operations. While the number of larger operations ha s grown , smaller operations have declined in number. Operations with fewer than 500 head fell from 8 9, 087 in 200 2 , to 6 0 , 754 in 20 12 , a decline of 3 2 percent. P roduction per cow for both larger a nd smaller operations continues to increase as lower

- producing cows are culled from herds and less efficient operations exit the industry. 

### Potential Impacts
With this rule, producers will forgo payment of testing fees for sexually intact animals between 6 and 18 months of age when performing whole herd tests. For both elective and
program - required herd blood tests, increasing the minimum testing age will benefit producers by (i) reducing the number of animals required to be tested and therefore the time and labor expended in gathering and handling animals for testing, and (ii) eliminating any stress

- induced weight loss related to herd blood testing of sexually intact animals between 6 and 18 months of age. In recent years, about one

- half million head of cattle have been included in herd blood tests annually. Approximately 70 to 80 percent of this testing has been elective. The primary entities that will be affected by this rule are cattle operations . Entities in the industry categories of beef cattle r anching and farming (NAICS 112111) and dairy cattle and milk production (NAICS 112120) are considered small if their total annual sales do not exceed $750,000. Based on Small Business Administration standards and data from the 2012 Census of Agriculture, the majority of these entities are small , despite the increase in the percentage of larger operations as described in the previous section . Ninety

- nine percent of the 619,172 farms4

classified under beef cattle ranching and farming had annual sales of less than $750,000. Seventy

- three percent of the 46,005 farms classified under dairy cattle and milk production are classified as small. T his rule will result in cost savings for many of the se operations , and will not have a significant economic impact on a substantial number of small entities.