### United States Department of Agriculture Animal and Plant Health Inspection Service September 2011 Analysis in Support of Certification that the Rule W ill N ot H ave a Significant Economic Impact on a Substantial Number of Small Entities

Interim Rule APHIS

- 2011

- 0 100
Tuberculosis in Cattle and Bison; State and Zone Designations; Minnesota

Policy & Program Development Policy Analysis & Developmenti Summary Minnesota currently has a split State status for bovine tuberculosis (TB) with an Accredited Free (AF) zone and a Modified Accredited Advanced (MAA) zone . This interim rule will reclassify the status on of the MAA zone, consisting of parts of four counties from MAA to
AF

. MA A status imposes various requirements for TB testing of cattle

. Reclassification to AF removes all movement restrictions . The Regulatory Flexibility Act (RFA) of 1980 (Public Law
96

- 354) requires agencies to evaluate the potential effects of 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 parts of four counties will eliminate testing requirements, saving cattl e producers 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 gove rnments or local governments.
T he 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.1 

### Introduction
This analysis provides the basis, as required by the Regulatory Flexibility Act, for certification by the APHIS A dministrator that the interim rule will not have a significant economic impact on a substantial number of small entities. Bovine tuberculosis is a contagious and inf ectious granulomatous disease caused by the bacterium Mycobacterium bovis . Although commonly defined as a chronic debilitating disease, bovine tuberculosis can occasionally assume an acute, rapidly progressive course. While any body tissue can be affecte d, lesions are most frequently observed in the lymph nodes, lungs, intestines, liver, spleen, pleura, and peritoneum. Although cattle are considered to be the true hosts of M

. bovis , the disease has been reported in several other species of both domestic and nondomestic animals , as well as in humans

. The Cooperative State

- Federal Tuberculosis Eradication Program, which beg a n in 1917, has been administered by the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture, State animal health agencies, and U.S. livestock producers . This
program 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 a nd hygiene, the 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,

ac credited preparatory, modified accredited, modified accredited advanced, and accredited

- free.
Mi nnesota is regionalized in to these two zones (AF, MAA ) and the zone statuses last updated in an interim rule published in the Federal Register October 1, 2010

. Mi nnesota has asked to advance the status of its MAA zone under the National Bovine Tubercu losis Eradication2 Program. Parts of four counties in the northwestern portion of Minnesota will be advanced to
AF status. 

### P otential Impact on Small Entities

T he cattle industry plays an important role in Mi nnesota ’s economy. There were 24,685 cattle and calf operations in Mi n n esota in 2007 with a total inventory of 2.39 million head. 1
State

- wide cash receipts from cattle and calves and dairy products totaled $1. 2 billion and $1.45 billion, respectively, in 2010

. The t en - year average cash receipts for cattle and calves and dairy products ( 2001

- 2010 ) were $1. 01 billion and $1. 30 billion , 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 ranchin g 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 entiti es. The vast majority of beef operations in Mi nnesota are considered small

. In 200 7 , 98 perce nt of cattle / calf farms and 84 percent of dairy farms generated less than $500,0 00 in cash receipts and less than 1 percent generated $1 million or more

. 3 The composition of Minne s ota’s catt le 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 Commod ities, 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 Mi nnesota currently has t wo TB status zones: an AF a nd MAA zone. This rule will reclassify parts of four counties in the northwestern portion of Minnesota from MAA to AF. The elevation of an area to AF status removes all movement restrictions

. While m ovement restriction s on cattle from MAA zones have been generally suspended under Federal Order , annual whole herd testing has occurred in the MAA zone, in addition to individual testing of cattle within 60 days of movement from a special management sub

- zone within the MAA as a result of a memorandum of understanding (MOU) between the State of Minneso ta and APHIS

. No testing is require d for cattle moving out of an AF zone. Cattle herd owners in the parts of the four counties being upgraded to AF from MAA
status will see an actual reduction in testing . Testing that occurred under the MOU will no long er be required

. T h ere ar e about 254 cattle herds with about 10,771 cattle in the area being elevated from MA A status

. This includes 20 cattle herds with a total of 1,441 animals w ithin the

s pecial m anagement zone . A total of 413 sexually intact animals moved out of the special TABLE 1. Mi nnesota Cattle Inventory, January 1, 20 11 Type Number Percentage of Total Beef cows 360 ,000 15.1 % Milk cows 470 ,000 19.7 % Heifers Beef cow replacements 90 ,000 3.8 % Milk cow replacements 290 ,000 12.2 % Other heifers 190 ,000 7.9 % Total heifers 570 ,000 23.9 % Steers 470 ,000 19.7 % Bulls 3 5,000 1.4% Calves 475 ,000 19.9 % TOTAL 2,380 ,000 Source: National Agriculture Statistics Service, USDA.4 management zone in fiscal year 2010. Of these animals, 257 head required 60

- day movement test, as per MOU

. The remaining 156 head moved on a whole herd test that was valid as a 60

- day movement test

. 4
Cattle herd owners in the areas being elevated from MA A to AF status will see a reduction in TB testing, and will therefore benefit from reduced costs. TB testing including veterinary fees , costs about $10 to $15 per head

. The annual cost savings associated with the removal of the annual herd testing requirement for the 254 herds in the affected area are expected to be between $107,710 and $161,565. In addition, w e expect annual cost savings associated with reduced movement testing to total between $2,570 and $3,855 in the special management

zone. The total cost savings associated with the reduction in testing will be positive, but small

. In addition, the testing costs are small when compared to the value of the cattle tested. On
Ja nuary 1, 2010 , all cattle and calves in Mi nnesota had an average per animal value of $ 870

. 5



### Conclusion The savings in TB test ing costs represent no more than about 1.7 percent of the average per - head value of cattle in Mi nnesota ($15 / $ 870 ).

Mi nnesota currently has t wo TB status zones: an AF a nd MAA zone. This interim rule will reclassify the status for parts of four counties from MAA to AF which will remove all movement restrictions

. Cattle herd owners in parts of the four counties being upgraded to AF status from MAA status will see an actual reduction in testing

. E ven though a Federal Order has

4 Personal Communication with C. William Hench, DVM USDA

- APHIS

- Veterinary Services

5 2010 Agricultural Statistics Annual, Chapter 7 , Table 7

- 3 http://www.nass.usda.gov/Publi cations/Ag_Statistics/2010/Chapter07.pdf5 suspended tes ting requirements in MAA zones , testing has occurred in the MAA zone as a result of a MOU between the State of Minn esota and APHIS

. Th e total expected savings will be relatively small, between 110,280 and $ 16 5,420 . T he affected cattle herds account for less than
0. 5 percent of the cattle in the State of Minnesota . 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 , if promulgated, will n ot have a significant economic impact on a substantial number of small entities.