United States 

Department of 

Agriculture

Animal and 

Plant Health 

Inspection 

Service

May 2011

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-2008-0043

RIN 0579-AD20

Importation of Live Swine, Swine Semen, 

Pork, and Pork Products; Estonia, Hungary, 

Slovakia, and Slovenia

Policy & Program Development

Policy Analysis & Development
i

Summary

The rule will allow the importation of live swine, swine semen, pork, and pork products 

from Estonia, Hungary, Slovakia, and Slovenia. Pork imports from these countries will compete 

with imports from Canada and Denmark, currently the United States’ largest suppliers of pork. 

Given the United States’ position as one of the largest pork exporters in the world, the market 

impacts resulting from the small amount of imports expected to come from the four countries 

will likely be minimal.

We analyze the potential effects of the rule by modeling three levels of pork imports from 

Estonia, Hungary, Slovakia, and Slovenia. Estimated impacts include annual changes in U.S. 

consumption, production, the wholesale price, consumer welfare, producer welfare, and net 

welfare. We estimate that pork imports of about 10,000 MT per year from the four countries—

10 percent of their combined global exports—would result in a decline of $0.93 per MT (0.06 

percent decrease) in the wholesale price of pork and a fall in U.S. production of 5,350 MT (0.05 

percent decrease). Consumption would increase by 4,836 MT. Producer welfare would decline 

by about $7.8 million and consumer welfare would increase by about $8.2 million, yielding an 

annual net welfare benefit of about $0.4 million.

For each of the assumed levels of pork imports, consumer welfare gains would outweigh 

producer welfare losses. Even in the described scenario, the decline in producer welfare would 

represent less than six-hundredths of one percent of cash receipts from the sale of hogs in 2009. 

A majority of enterprises that could be affected by the regulation are small entities. 

Entities in the category Hog and Pig Farming (NAICS 112210) are considered small if their 

annual sales do not exceed $750,000. According to the 2007 Census of Agriculture, over 89 

percent of swine operations are classified as small and had average yearly sales of about 
$44,680. Entities in the category Animal (Except Poultry) Slaughtering (NAICS 311611) are 

considered small if they have not more than 500 employees. As reported in the 2007 Economic 

Census, over 90 percent of 1,597 establishments in the industry classification that includes hog 

slaughtering facilities had fewer than 100 employees. 

The impact of the rule for the U.S. pork industry is expected to be insignificant; we 

estimate that the average decrease in welfare for small-entity producers for the highest assumed 

level of imports (about 10,000 MT) would be less than $15 per small entity, that is, about 0.03 

percent of average annual sales. Based on the factors presented, the rule will not have a 

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

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.

This analysis examines impacts for U.S. small entities of potential pork imports from four 

countries—Estonia, Hungary, Slovakia and Slovenia—newly recognized as low-risk regions for 

classical swine fever (CSF) and as free of swine vesicular disease (SVD), but subject to the 

restrictions listed in 9 CFR 94.13. The rule will also recognize Slovenia as free of foot and 

mouth disease, but subject to the restrictions listed in 9 CFR 94.11. Quantities of swine, swine 

semen, ruminants, and ruminant products imported from these countries, if such imports were to 

occur, are likely to be very small. Therefore, this analysis addresses only expected effects of the 

rule with respect to pork.

We provide an overview of the swine and pork industries in the United States and in the 

four subject countries. In support of the certification statement, we estimate price and welfare 

effects of the rule based on assumed levels of pork imports.

The U.S. Swine Industry

The U.S. swine industry plays an important role in the U.S. economy. Cash receipts from 

marketing meat animals were about $14.4 billion in 2009 (average between 2004 and 2009 was 

$14.8 billion).1 Additionally, swine and related product exports generated over $2.5 billion in 

sales that year (USDA/NASS 2010, USDA/FAS 2010). At present, U.S. livestock exports 

proceed without CSF or SVD restrictions. Maintaining such favorable conditions depends in 

part on continued efforts to prevent transmission of foreign diseases to U.S. swine. 

 

1

http://usda.mannlib.cornell.edu/usda/current/MeatAnimPr/MeatAnimPr-04-29-2010.pdf
As shown in table 1, U.S. pork production increased from 8,596 thousand metric tons 

(MT) in 2000 to 10,437 thousand MT in 2009, an annual growth rate of about 2.1 percent. 

Similarly, consumption increased from 8,455 thousand MT to 8,975 thousand MT. During the 

same period, U.S. exports increased from 584 thousand MT to 1,872 thousand MT, far outpacing 

imports. Net exports increased from 146 thousand MT to 1,494 thousand MT.

Table 1. U.S pork production, consumption, price, exports and imports, 2000-2009

Year

Production 

in 1,000 

Metric 

Tons

Consumption 

in 1,000 

Metric Tons

Price

per 

Metric 

Tons

Exports in 

1,000 

Metric 

Tons

Imports in 

1,000 

Metric 

Tons

Net 

Exports in 

1000 

Metric 

Tons

2000 8,596 8,455 $1,413 584 438 146

2001 8,691 8,389 $1,473 707 431 276

2002 8,929 8,685 $1,179 731 486 245

2003 9,056 8,816 $1,298 779 538 241

2004 9,312 8,817 $1,621 989 499 490

2005 9,392 8,671 $1,562 1,207 464 743

2006 9,559 8,640 $1,491* 1,359 449 910

2007 9,962 8,964 $1,489* 1,424 439 985

2008 10,599 8,806 $1,462* 2,117 377 1,740

2009 10,437 8,975 $1,270* 1,872 378 1,494

5-Year 

Average 

(2005-

2009)

9,983 8,815 $1,455 1,596 421 1,175

Sources: USDA/FAS, PS&D Online, <http://www.fas.usda.gov/psdonline/circulars/livestock_poultry.pdf; prices, 

reported as $/100 pounds for yearly pork carcass cut-out values, are converted to dollars per metric ton, and are 

taken from Red Meat Yearbook (94006), <http://usda.mannlib.cornell.edu/usda/ers/94006/wholesaleprices.xls. 

* These prices are from ERS/USDA, Agricultural Outlook: Statistical Indicators, 

http://www.ers.usda.gov/publications/agoutlook/aotables/2010/04Apr/aotab16.xls (accessed on 7/13/10). 

http://www.ers.usda.gov/publications/ldp/2009/08Aug/ldpm182tables.pdf

Net exports are calculated as the difference between exports and imports for each year.

The Swine Industry in Estonia, Hungary, Slovakia and Slovenia

Estonia, Hungary, Slovakia and Slovenia together produced an average of 720,500 MT of 

pork between 2003 and 2009, with shares of 7 percent, 69 percent, 16 percent, and 8 percent, 
respectively.

2

 Estonia, Slovakia and Slovenia are net importers of pork, while Hungary is a net 

exporter. Altogether, they had a five-year (2003-2009) average level of global pork exports of 

101,863 MT and an average level of imports of 165,212 MT, yielding average net imports of 

63,349 MT.3

Impact of Potential Pork Imports

We estimate the impact of pork imports from Estonia, Hungary, Slovakia and Slovenia 

on U.S. production, consumption, and prices using a net trade welfare model. The data for 2008 

used were obtained from the USDA Foreign Agricultural Service, the Global Trade Atlas, USDA 

Economic Research Service Meat Yearbook and FAOstat. The demand and supply elasticities 

used are -0.86 and 1, respectively.

4

We model three potential levels of pork exports to the United States from Estonia, 

Hungary, Slovakia and Slovenia, based on the four countries’ combined average annual global 

exports of 101,863 MT (2003-2009): (1) an amount proportional to the percentage of the EU27’s pork exports sent to the United States (1.06 percent); (2) an amount proportional to the 

percentage of Denmark’s pork exports sent to the United States (3.51 percent);5and (3) an 

amount equal to 10 percent of total global pork exports by the four countries. Amounts of pork 

shipped to the United States under the three scenarios would be 1,080 MT, 3,575 MT, and 

10,186 MT. 

Table 2 presents the changes resulting from the assumed U.S. pork imports from Estonia, 

Hungary, Slovakia and Slovenia. These include annual changes in U.S. consumption, 

 

2 UN/FAO, http://faostat.fao.org/

3 The Global Trade Atlas 2010

4

Sullivan, J., J. Wainio, and V. Roningen. A Database for Trade Liberalization Studies. Washington, DC:

USDA Economic Research Service, 1989.

5 Denmark’s pork industry is export-oriented, and it is the second largest supplier of pork products to the United 

States, after Canada. Although we use this basis for our middle level of hypothetical imports, it likely overstates 

potential shipments to the United States from the four countries.
production, wholesale price, consumer welfare, producer welfare, and net welfare. Our medium 

level of pork imports of 3,575 MT (assuming pork imports proportional to those received from 

Denmark) would result in a decline of $0.33 per metric ton in the wholesale price of pork and a 

fall in U.S. production of 1,878 MT. Consumption would increase by 1,679 MT. Producer 

welfare would decline by about $2.7 million and consumer welfare would increase by about $2.9

million, yielding an annual net benefit of about $0.2 million.

Table 2. Potential impacts of pork imports from Estonia, Hungary, Slovakia and Slovenia on the 

United States economy, based on three hypothetical levels of importation

Column 1 Column 2 Column 3

Assumed pork imports, metric 

tons 1,0801

3,575210,1863

Change in U.S. consumption, 

metric tons 513 1,679 4,836

Change in U.S. production, 

metric tons -567 -1,878 -5,350

Change in wholesale price of 

pork, dollars per metric tons -$0.10 -$0.33 -$0.93

Change in consumer welfare $867,509 $2,871,808 $8,183,900

Change in producer welfare -$825,336 -$2,731,802 -$7,781,924

Annual net benefit $42,173 $140,006 $401,976

Note: The baseline data used are five-year annual averages for production, consumption, price, exports and imports 

as reported in the last row of table 1. The demand and supply elasticities used are -0.86 and 1, respectively. 

1Calculated by multiplying the total global exports of Estonia, Hungary, Slovakia, and Slovenia, 101,863 MT, by the 

proportion (1.06 percent) of EU-27’s global export sent to the U.S. EU-15 countries including Denmark exported 

48,075 MTs to United States from their global exports of 4,521,555 MT.

2Calculated by multiplying total global pork exports of Estonia, Hungary, Slovakia and Slovenia by the proportion 

(3.51%) of Denmark’s export sent to the United States, 40,174 MT out of 1,143,900 MT. 

3Ten percent of the total global pork exports for the four countries.

In all cases consumer welfare gains would outweigh producer welfare losses. Even in the 

third scenario in which we assume imports would equal 10 percent of the combined global 

exports of the four countries, the decline in producer welfare would represent less than six-
hundredths of one percent of cash receipts from the sale of hogs in 2009.

6

 As noted above, the 

four countries as a group are large net importers of pork, so it is unlikely that the rule, by itself, 

will generate significant growth in the four countries’ hog and pork industries. Based on this 

analysis, the rule will not have a significant economic impact on a substantial number of U.S. 

entities, large or small. 

Potential Impact on Small Entities

Based on data from the 2007 Census of Agriculture and Small Business Administration 

(SBA) standards, we expect a majority of the enterprises that could be affected by the regulation 

to be small entities.7 Entities in the category Hog and Pig Farming (NAICS 112210) are 

considered small if their annual sales do not exceed $750,000.8 Over 89 percent of swine 

operations (66,798 farms) are classified as small and had total sales of 25.9 million (about 12.5 

percent of animals sold) and an average inventory of 388 hogs. Large operations (7,991 farms) 

had sales of 180.9 million hogs (about 87.5 percent) with an average inventory of 22,637 hogs. 

Based on inventory share, small operations had annual sales of $3 billion and an average income 

of $44,680, while large operations had sales of $15 billion with an average income of 

$1,886,150.

Entities in the category Animal (Except Poultry) Slaughtering (NAICS 311611) are 

considered small if they have not more than 500 employees. As reported in the 2007 Economic 

 

6

$7.8 million divided by $14.8 billion equals less than 0.06 percent.

7 The 2007 Census of Agriculture is available online at 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/index.asp. The SBA Table of Small Business Size 

Standards is also available online at 

http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.

8

SBA, Small business Size Standards matched to North American Industry Classification System 2007, Effective 

August, 2008, (<http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf, accessed 

on 8/4/10).
Census, over 90 percent of 1,597 establishments in the industry classification that includes hog 

slaughtering facilities had fewer than 100 employees.9,10 

As shown in table 3, the impact of potential pork imports on U.S. producers as a result of 

this rule will be small. The decrease in producer welfare per small entity for the highest assumed 

level of imports is estimated to be about $15, that is, about 0.03 percent of average annual sales 

by small entities. 

Table 3. Economic impact of potential pork imports from Estonia, Hungary, Slovakia and 

Slovenia for small-entity producers, 2009 dollars. 

Change in producer welfare1-$7,781,924

Decrease incurred by small entities2$972,740

Average decrease per head of inventory, small entities3$0.04

Average decrease per small entity4$14.60

Average decrease as % of average sales, small entities50.03%

1

From table 2.

2 Change in producer benefit multiplied 12.5 percent (see text).

3 Decrease in producer benefit for small entities divided by 25.9 million (see text).

4 Average decrease per head of inventory multiplied by 388 (see text).

5 Average decrease per small entity divided by $44,680 (see text).

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

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

operators who belong to socially disadvantaged groups.11 Most farms that produce swine qualify

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

farms also qualify as limited resource farms (gross farm sales of not more than $100,000 and low 

 

9 The 2007 Economic Census is available online at 

http://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=ECN&_tabId=ECN1&_submenuId=datasets

_4&_lang=en&_ts=264361774447. Note the detailed statistics by employment size for the Manufacturing sector 

have not been released for the 2007 Economic Census.

10 2002 Economic Census is available online at http://www.census.gov/econ/census02/.

11 For definitions and information, see: USDA ERS. Structure and Finances of U.S. Farms: Family Farm Report, 

2010 edition, EIB-66, July 2010. http://www.ers.usda.gov/Publications/EIB66/EIB66.pdf
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. As described above for small swine farms generally, any economic 

impacts of the rule for operations categorized as small family farms or farms having operators 

who belong to socially disadvantaged groups will be insignificant, given the small quantity of 

pork expected to be imported from Estonia, Hungary, Slovakia and Slovenia compared to 

domestic production and current imports.

Table 4 shows that among the 74,789 farms that produced swine in 2007, 48,943 (over 65

percent) were small family farms. It is notable that the combined number of retirement farms 

(8,532 farms) and residential/lifestyle farms (21,256 farms) accounted for almost 40 percent of 

all swine farms.

Table 5 shows the number and percentage of swine farms that had operators belonging to 

socially disadvantaged groups in 2007. There were 7,230 swine farms (9.7 percent) for which 

the principal operator was a woman. In terms of ethnicity, 1,545 swine farms (2.1 percent) were 

operated by Hispanics and 1,747 swine farms (2.3 percent) had an operator who was American 

Indian or Alaskan Native. The percentage of swine farms operated by African Americans was 

1.8 percent.

Although most swine operations are small family farms and there are swine operators

who belong to socially disadvantaged groups, economic effects of the rule for these farms are not 

expected to differ from the effects for swine producers generally. We do not expect the rule to 

have any appreciable impact on U.S. swine and pork producers regardless of the size of 

operation or operator classification.
Based on the above information and analysis, the rule will not have a significant 

economic impact on a substantial number of small entities. The quantity of pork expected to be 

imported from Estonia, Hungary, Slovakia and Slovenia is not significant; and any effect on 

prices will be insignificant.
Table 4. Number and percentage of small family swine farms, 2007

Limited 

Resource Farms

Retirement 

Farms

Residential/ lifestyle 

Farms 

Farming 

Occupation/Lower 

Sales

Farming 

Occupation/ Higher 

Sales

All 

Small Family

Swine Farms

All 

Swine Farms

Number 9,006 8,532 21,256 7,635 2,514 48,943 74,789

Percentage 12.0 11.4 28.4 10.2 3.4 65.4 100%

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. 
1

Table 5. Number and percentage of swine 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 

Swine Farms

Number 7,230 1,545 1,747 248 1,372 117 74,789

Percentage 9.7 2.1 2.3 0.3 1.8 0.2 100%

Source: USDA NASS, 2007 Census of Agriculture.

Note: For the ethnic/racial categories, farms reported for their top-three operators. 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.

Under these circumstances, 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.