United States 

Department of 

Agriculture

Animal and 

Plant Health 

Inspection 

Service

August 2011

Analysis in Support of Certification that the 

Rule will not have a Significant Economic 

Impact on a Substantial Number of Small 

Entities

Interim Rule 

2011-0075

Modify Zone Sizes for Michigan Bovine 

Tuberculosis Status

Policy & Program Development

Policy Analysis & Development
i

Summary

Michigan currently has a split State status for bovine tuberculosis (TB) with an 

Accredited Free (AF) zone, a Modified Accredited Advanced (MAA) zone, and a Modified 

Accredited (MA) zone. This interim rule will reclassify the status of 55 counties from MAA to 

AF; portions of Iosco and Ogemaw counties that are currently classified as MAA as well as the 

portions of Iosco and Ogemaw counties that are currently classified as MA will be advanced to 

AF, and the status of Presque Isle County will be advanced from MA to MAA. MA status 

imposes various requirements for TB testing of cattle. Reclassification to AF removes all 

movement restrictions and reclassification from MA to MAA reduces requirements. The 

Regulatory Flexibility Act (RFA) of 1980 (Public Law 96-354) requires agencies to evaluate the 

potential effects proposed and final rules on small businesses, small organizations, and small 

government jurisdictions. Section 605 of the RFA allows an agency to certify that a rule will not 

have a significant impact on substantial number of small entities. 

Advancement of status for these counties will allow producers to move their cattle with 

fewer pre-movement testing requirements, saving time and money. Because few producers will 

be affected, these savings are expected to be relatively small. This action will not significantly

change program operations and will have no significant effects on other Federal agencies, State 

governments or local governments. Michigan animal health authorities have a plan and the 

capability to maintain separate TB status within their State with separate requirements and 

border controls.

The Administrator of the Animal and Plant Health Inspection Service (APHIS) has 

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

of small entities.
1

Introduction 

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

certification by the APHIS Administrator that the interim rule will not have a significant 

economic impact on a substantial number of small entities.

Bovine tuberculosis (TB) is a contagious disease which can infect all warm blooded 

vertebrates. The Cooperative State-Federal Tuberculosis Eradication Program, which began in 

1917, has been administered by APHIS of the U.S. Department of Agriculture, State animal 

health agencies, and U.S. livestock producers, and has nearly eradicated bovine TB from the 

Nation's livestock population. The disease's presence in humans has been reduced as a result of 

the eradication program, advances in sanitation and hygiene, discovery of effective drugs, and 

pasteurization of milk.

APHIS has established five status stages (or levels) for States and zones based upon the 

prevalence of bovine TB within cattle and bison. These five stages are: non-accredited, 

accredited preparatory, modified accredited, modified accredited advanced, and accredited-free.

Michigan is regionalized into three zones (AF, MAA, MA) and the zone boundaries were 

last updated in an interim rule published in the Federal Register December 18, 2009. Michigan

has asked to adjust the boundaries of its zones under the National Bovine Tuberculosis 

Eradication Program. Fifty-five counties in the Lower Peninsula as well as portions of Iosco and 

Ogemaw counties that are currently classified as MAA as well as the portions of Iosco and 

Ogemaw counties that are currently classified as MA will be advanced to AF status, and Presque 

Isle County will be advanced to MAA status. 
2

Potential Impact on Small Entities

The cattle industry plays an important role in Michigan’s economy. There were 14,454 

cattle and calf operations in Michigan in 2007 with a total inventory of 1.05 million head.1 

State-wide cash receipts from cattle and calves and dairy products totaled $343 million and $1.5 

billion, respectively, in 2007. Eight-year average cash receipts for cattle and calves and dairy

products (2000-2007) were $262 million and $952 million, respectively.

2

 

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

which businesses are considered small. According to SBA size standards for beef cattle ranching 

and farming (NAICS 112111) and for dairy cattle and milk production (NAICS 112120), 

operations with not more than $750,000 in annual sales are considered small entities. For cattle 

feedlots (NAICS 112112), operations with not more than $2.5 million in annual sales are 

considered small entities. The vast majority of beef operations in Michigan are considered small, 

as are most dairy operations. In 2007 more than 98 percent of cattle and calf farms generated 

less than $500,000 in cash receipts and less than 1 percent generated $1 million or more. About 

67 percent of dairy farms generated less than $500,000 in cash receipts and about 15 percent

generated $1 million or more. More than 99 percent of cattle feedlots were considered small in 

2007.3 The composition of Michigan’s cattle inventory is shown in table 1.

 

1

2007 Census of Agriculture. National Agriculture Statistics Service, USDA.

2 USDA/ERS Cash Receipts, by Commodity Groups and Selected Commodities, United States and States, 2000-2007.

http://www.ers.usda.gov/Data/farmincome/FinfidmuXls.htm

3

2007 Census of Agriculture. National Agriculture Statistics Service, USDA.
3

Michigan currently has three TB status zones: an AF, a MAA and a MA zone. This rule 

will reclassify 55 counties in the Lower Peninsula from MAA to AF, portions of two counties 

from MAA to AF, portions of the same two counties from MA to AF, and one county from MA 

to MAA. The elevation of an area to AF status removes all movement restrictions. However, 

movement restrictions in MAA zones have already been suspended under Federal Order. The 

elevation of an area to MAA or AF status from MA status removes TB testing requirements on 

cattle owners. The MA restrictions include a negative TB test within 60 days of the interstate 

movement of cattle and bison from a herd without accredited status, except for cattle moving 

directly to slaughter. The MA restrictions also include a whole herd test within one year for 

intact cattle moving interstate from a herd without accredited status, unless the cattle are moving 

to an approved feedlot or directly to slaughter. In addition, dairy herds in a MA zone must have 

an annual whole herd test in order to comply with movement restrictions and with the 

Pasteurized Milk Ordinance (PMO).4 The elevation of an area to MAA status removes most of 

these requirements and the remaining restriction on cattle moving out of a MAA zone has been 

 

4 U.S. Food and Drug Administration, Center for Food Safety and Applied Nutrition.

TABLE 1. Michigan Cattle Inventory, January 1, 2011

Type Number Percentage of Total

Beef cows 99,000 8.6%

Milk cows 361,000 33.0%

Heifers

Beef cow replacements 27,000 2.5%

Milk cow replacements 148,000 13.8%

Other heifers 50,000 4.7%

Total heifers 225,000 21.0%

Steers 190,000 17.3%

Bulls 15,000 1.4%

Calves 200,000 18.7%

TOTAL 1,090,000

Source: National Agriculture Statistics Service, USDA.
4

suspended under Federal Order. None of these testing requirements apply to cattle moving out 

of an AF zone. 

Cattle herd owners in the portion of two counties being upgraded from MA to AF status, 

and those in the one county being upgraded from MA to MAA status will see a reduction in TB 

testing requirements as a result of this rule, and will therefore benefit from reduced costs 

associated with that TB testing. Note that cattle herd owners in the 55 counties being upgraded 

to AF status from MAA status and in the portions of the two counties being upgraded to AF 

status from MAA status will not see an actual reduction in testing because a Federal Order 

previously suspended testing requirements in MAA zones. There are about 120 cattle herds in 

the areas being elevated from MA status, with about 4,950 cattle. The cattle in these areas 

account for less than 0.5 percent of the cattle in Michigan.5 

TB testing within 60 days of interstate movement of cattle for feeding will no longer be 

necessary for non-accredited herds in the Presque Isle County based on MAA status and in 

portions of Iosco and Ogemaw counties based on AF status. Tuberculosis testing, including

veterinary fees, costs about $10 to $15 per head. While no cattle moved interstate from these 

areas in 2010, there were about 675 cattle that moved from these areas to other zones in 

Michigan. Michigan is enforcing regulations that impose restrictions on intrastate movement 

that are substantially the same as the federal restrictions. Based on the above range in testing 

costs per animal, we expect annual cost savings associated with reduced testing of feeder cattle 

moving out of from portions of Iosco and Ogemaw counties, and Presque Isle County to total 

between $6,750 and $10,125. The more a herd owner in the affected areas engages in the 

 

5Michigan Department of Agriculture; personal communication.
5

interstate movement of feeder cattle, the greater will be the savings associated with the reduction 

in movement restrictions. 

Owners of non-accredited herds in Presque Isle County and portions of Iosco and 

Ogemaw counties could also benefit from reduced costs associated with annual TB testing. A

negative whole herd test within 12 months of the interstate movement of intact cattle from a herd 

without accredited status is no longer needed. In addition, the annual whole herd test for dairies

is not necessary to meet movement restrictions or the PMO for herds in a MAA or an AF zone. 

A whole herd test requires the testing of all animals in a herd that are 12 months of age or 

older at the time of the test. In 2010, beef and mixed beef in the affected areas of the three 

counties had an average of 35 head. With TB testing costs of $10 to $15 per head, annual whole 

herd testing costs average between $350 and $525 for a herd of this size. Dairy herds in the 

affected areas of the three counties had an average of 72 head. With TB testing costs of $10 to 

$15 per head, annual whole herd testing costs average between $720 and $1,080 per herd. These 

cost estimates per herd may be high because the cost of whole herd testing on a per-animal basis 

is generally less than the cost of testing animals individually, and it assumes that all animals in 

the average herd are at least 12 months of age. 

The State of Michigan has estimated that there are 117 dairy, beef and mixed herds in the 

affected areas of the above three counties. Based on the above estimates of the average cost of a 

whole herd test, and assuming that all of the non-accredited beef and mixed herds move cattle 

interstate, the annual cost savings associated with the removal of this whole herd testing 

requirement could total between $50,000 and $75,000.

Cattle herd owners in the areas being elevated from MA status will see a reduction in TB 

testing requirements as a result of this rule, and will therefore benefit from reduced costs 
6

associated with that TB testing. Total cost savings could be between $57,000 and $85,000. 

However, cattle herds in these counties account for less than 1 percent of cattle operations and 

less than 0.5 percent of the cattle in the State of Michigan. In addition, TB testing costs are small 

when compared to the value of the cattle tested, and the expected savings therefore are also 

relatively small. On January 1, 2008, beef cattle in Michigan had an average per animal value of

$1,330.6The average value of dairy cattle is considerably higher, given the value of milk 

produced. The savings in TB testing costs represent no more than about 1.1 percent of the

average per-head value of beef cattle in Michigan ($15/$1,330) and an even smaller percentage 

of the average value of dairy cattle in the State. 

Conclusion

Michigan currently has three TB status zones: an AF, a MAA and a MA zone. This 

interim rule will reclassify the status of 55 counties from MAA to AF; portions of two counties 

will be advanced from MAA to AF, portions of the same two counties will be advanced from 

MA to AF, and one county from MA to MAA. MA status imposes various requirements for TB 

testing of cattle. Reclassification to AF removes all movement restrictions and reclassification 

from MA to MAA reduces some restrictions. Cattle herd owners in the portion of two counties 

being upgraded from MA to AF status, and those in the one county being upgraded from MA to 

MAA status will see a reduction in TB testing requirements as a result of this rule, and will 

therefore benefit from reduced costs associated with that TB testing. Cattle herd owners in the 55

counties and portions of two counties that are being upgraded to AF status from MAA status will 

not see an actual reduction in testing because a Federal Order previously suspended testing 

 

6 Meat Animals Production, Distribution and Income Final Estimates 2003-2007. May 2009. NASS, USDA. Statistical Bulletin 

Number 1026. http://usda.mannlib.cornell.edu/usda/nass/SB995/sb1026.pdf
7

requirements in MAA zones. Cattle herd owners in the areas being elevated from MA status will 

see a reduction in TB testing requirements and therefore benefit from cost savings. The total 

expected savings will be relatively small, between $57,000 and $85,000. The affected cattle 

herds account for less than 0.5 percent of the cattle in the State of Michigan. In addition, TB 

testing costs are about one percent or less of the value of the cattle tested. 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.