### Regulatory Impact Analysis and Analysis in Support of Certificati on that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities
Final Rule Commercial Transportation of Equines to Slaughter APHIS–2006–0168

U.S. Department of Agriculture
Animal and Plant Health Inspection Service April 2011i 

### Summary
This final rule amends the regulations regard ing the commercial transportation of equines to slaughter by making equines deliv ered to intermediate points en route to slaughter subject to the same regulations as those moved directly to slaughtering establishments. The purpose of the rule is to ensure the humane treatment of equi nes bound for slaughter that are moved first to an assembly point, feedlo t, or stockyard. The regulations require that the equines have access to food, water and the opportunity to rest for at least 6 hours prior to transit and fo llowing 28 consecutive hours or more of transit; adequate space during transit to prevent injury or discomfort; segregation of stallions or other aggressive equines; use of elect ric prods only in life-threatening situations; and certification of each equine’s fitness to travel, including notation of any special handling needs. Since 2007, no commercial equine slaughter faciliti es have operated in the United States. However, the amended regulations will apply to en tities that transport equines within the United States for slaughter in Canada or Mexico. Shippers who transport equines from farms or feedlots to intermediate points en route to slaughter ar e likely to be largely in regulatory compliance voluntarily. They have an incentiv e to provide the animals with f ood, water, and care as required by the regulations because healthy equi nes have increased slaughter value. The rule will ban the use of double-deck traile rs, as is currently the case when equines are transported directly to slaughter . Double-deck trailers have a greater carrying capacity (45 equines) than single-deck tra ilers (38 equines). Fewer equines per conveyance will mean increased transportation costs on a per animal basis. Commercial transporters typically charge a flat rate per shipment, and shoul d be little affected by the ban on double-deck trailers. However,ii businesses that rely on their ow n or hired double-deck trailers to transport equines will be negatively affected by the reduced number of animals that can be transported per trip. Notwithstanding the prevalence of small entit ies among businesses that may be affected, the effects of the rule are expected to be rela tively minor. The rule wi ll not have a significant economic impact on a substantial number of small entities.iii 

### Table of Contents Summary ....................................................................................................................... ....... i Introduction .................................................................................................................. ....... 4 Costs of the Rule ............................................................................................................. .... 3 Benefits of the Rule .......................................................................................................... .. 5 Alternative to the Rule ....................................................................................................... . 6 Affects for Sm all Entities.................................................................................................... 6iv 

### Introduction
APHIS regulations in 9 CFR part 88 are desi gned to help ensure the humane commercial transport of equines to slaughter. Specif ically, the regulati ons require that:
(1) For a period of not less than 6 consecutiv e hours immediately pr ior to the equines being loaded on the conveyance for transpor t, each equine be provided access to food and water and the opportunity to rest; (2) Any equine that has been on the conv eyance for 28 consecutive hours or more without food, water, and the opportunity to rest be offloaded and, for at least 6 consecutive hours, provided with food, wa ter, and the opportunity to rest; (3) Each equine be provided with enough space on the conveyance to ensure that no animal is crowded in a way likely to cause injury or discomfort; (4) Stallions and other aggressive equines be segregated from each other and all other equines on the conveyance; (5) Electric prods be used only in life-threatening situations; and (6) An owner-shipper certificate be completed for each equine prior to departing for the slaughtering facility. Among other things, th e certificate must certify the equine's fitness to travel and note any special care and handling needs during transit. 1 Currently, the regulations apply only to equines moved directly to slaughtering establishments, and not to equines bound for sla ughter but moved first to an assembly point, feedlot, or stockyard. This rule amends th e regulations to make equines delivered to intermediate points en route to slaughter subject to the same regulations as those moved directly to slaughtering establishments. From 2003 through 2008, the number of equine s slaughtered at federally inspected facilities grew rapidly and then fell to zero in the latter months of 2007, when a Federal district court ordered USDA to stop inspecting horse slaughter faci lities (table 1).

1 An equine is considered fit to travel if it: (1) can bear we ight on all four limbs; (2) can walk unassisted; (3) is not blind in both eyes; (4) is older than 6 months of age; and (5) is not likely to give birth in transit. Affected owners or commercial shippers must sign the certificate, and it mu st accompany the equine to the slaughtering facility.2 Table 1. Equine slaughter at fede rally inspected facilities, 2003-2008

___________________________________________________________ Year Number 2003 50,062 2004 66,183 2005 94,037 2006 104,899 2007 29,767 2008 None

___________________________________________________________ Source: USDA NASS Livestock Slaughter Summaries. http://usda.mannlib.cornell.edu/MannUsda/viewDoc umentInfo.do;jsessionid=611C2AA64B513A419C890 89657E4766B?documentID=1097 USDA statistics repor t that from 2001 through 2009, the average number of horses slaughtered in North America each year was 97,954. 2 Slaughter in Canada and, especially, Mexico has increased substantially following th e discontinuation of slaughter in the United States. USDA estimates that U.S. export of e quines for slaughter in Canada rose from 24,866 head in 2006, to 49,895 head in 2008. U.S. expor t of equines for slaughter in Mexico has increased at an even greater rate. As of December 20, 2007, there were 44,475 horses transported to slaughter in Me xico that year, compared to 10,783 horses transported during the same time period in 2006. 3 This rule will help to ensure the humane tr eatment of equines deliv ered to intermediate points en route to slaughter in Ca nada and Mexico. Benefits and costs of the rule are examined in accordance with Executive Order 12866, and the benefits are expected to justify the costs overall. This analysis also provides the basis, as required by the Regulator y Flexibility Act, for certification by the APHIS Admini strator that the rule will not have a significant economic

2 http://www.avma.org/onlnews/javma/may10/100515o.asp 3 http://www.avma.org/onlnews/javma/jan08/080115a.asp3 impact on a substantial number of small entities. No significant issues were raised during the public comment period concerning the economic analysis for the proposed rule. 

### Costs of the Rule
A typical path for equines to move to slaught er is for source suppliers (farms, ranches, boarding facilities, etc.) to transport their equi nes from the point of origin to local auction markets. At the auction markets, the equines are so ld to persons, referred to here as traders, who purchase the equines for the specif ic purpose of selling them to a slaughter facility. Because the traders usually cannot purchase enough slaughter-quality equines at any one auction to make it economically feasible to ship the equines directly from the auction site to the slaughter facility, they transport the equines to an assembly point (feedlot or holding pen) where the animals are kept until more equines are purchased from ot her auctions. The assembly point may be a trader’s own farm. When enough equines have been purchased to comprise a shipment, the traders arrange for the transport of the equines to Canada or Mexico. In an estimated 75 percent of the cases, traders hire commercial shippers; in the remain ing estimated 25 percent of the cases, traders transport the equines to slaughter in their own conveyances. We expect the rule to have little impact on traders who purchase e quines at auction markets and transport them to intermediate points en route to a sl aughter facility. The requirement that equines have access to food, water, and rest for at least 6 consecutive hours immediately prior to the anim als being loaded on the conveyance should not be a problem for traders who transport equines fr om auction sites. Sell ers at auction markets have an incentive to provide equines with food and water because malnourished equines have a reduced slaughter value. Furthermore, most slaught er equines tend to be in their pens at auction4 markets for at least 6 hours, since it usually takes at least that long for them to be sold. Indeed, it is not uncommon for slaughter equines to be so ld at the end of an auction session, after the saddle horses are sold. Traders typically purchase e quines at auction markets that are in relatively close proximity to their farms or other assembly points. It is unlikely that equine s acquired at auctions will have to be offloaded for feeding, rest, etc ., while en route to a trader’s farm or other assembly points, since it is unlikely that th e trip will take long er than 28 hours. The rule will require that, during transport to intermedia te points, the equines are provided enough space to ensure that they are not cr owded in a way that is likely to cause injury or discomfort. The rule specifi cally bans the use of double-deck trailers for such transport. Double-deck trailers have a grea ter carrying capacity ( 45 equines) than single-deck trailers (38 equines). Fewer equines per conveyance means increased transportation costs on a per animal basis. Commercial transporters typically charge a flat rate per shipment, and should be little affected by the ban on double-deck trailers. Howe ver, traders who rely on their own or hired double-deck trailers to transport equines will be negatively affected by the reduced number of animals that can be transported per trip. This negative effect may be mitigated somewhat by certain factors. Double-deck trailers can be used to transport other liv estock and produce. Trailers w ith adjustable deck flooring (or floating decks) can be converted for other purposes. The average cost of a double-deck livestock trailer ranges between $42,000 and $48,000, compar ed to $38,000 to $42,000 for a single-deck trailer, depending on the model, c onstruction type, and optional featur es. The useful life of the trailers also varies, but it is not uncommon for both types of tra ilers to have 10 to 12 years of useful life.5 Although separating stallions and other aggressi ve equines is already a common transport practice, it requires transporters to spend more time and effort loading and unloading animals. Most trailers are equipped with devices, such as swing gates, that facili tate separating animals. Traders have an incentive to ensure that aggre ssive equines are segregated since equines that arrive at the slaughter facilities that are injured as the result of biting and kicking en route receive lower prices. However, relatively few stallions are transported for slaughter. When federally inspected facilities were opera ting in the United States, USDA personnel estimated that no more than about 5 percent of the equines arriving fo r slaughter were stallions. Accordingly, the requirement that stallions and ot her aggressive equines be segr egated during transport is not likely to have a significant impact on trader s who purchase equines at auction markets. The restriction on the use of electric prods should not pos e a burden either because effective, low-cost substitute s are available for use in non-lif e-threatening s ituations. For example, fiberglass poles with flags attach ed, which cost no more than about $10 each, are
considered to be an effective al ternative to electric prods. (A ny current use of electric prods by transporters of slaughter equine s probably derives from the trad itional use of these devices to assist in moving other livestoc k, such as cattle and swine.) 

### Benefits of the Rule
The principal benefit of the ru le will be the greater assuran ce that equines transported to intermediate points en route to slaughter are humanely treated. Equines being transported may endure stress, weight loss, and dehydration, especi ally when transported over long distances. Horses transported for extended periods of time may suffer weight loss of as much as 8 to 106 percent. 4 The provisions of the rule will help to minimize if not eliminate these and other illeffects of transport. Traders may also benefit from the rule in terms of higher prices paid by the slaughter plant for higher weights and better quality meat b ecause of healthier equines. Prices received for the equines at slaughter facilities (the price varies in relation to the weight of the equine and the quality of the meat), together with transportatio n and other operational costs, determine the range in prices that traders pay fo r equines at local auctions. 

### Alternative to the Rule

An alternative to the rule would be to l eave the regulations for equines to slaughter unchanged. In doing so, traders who transport eq uines to intermediate points en route to slaughter would be able to continue to circum vent regulations designed to ensure the humane commercial transport of these animal s. Double-deck trailers could continue to be used, and there would be no regulatory restraint on potential abus e in terms of insufficient resting periods, feeding periods, and space during transport. The status quo alternative is rejected in favor of providing equines transported to intermediate points the same welfare safeguards that currently ensure the humane treatment of equine s transported directly to slaughter. 

### Affects for Small Entities

APHIS estimates that there were no more than 100 entities in the United States involved in the commercial transportation of equines to sla ughter prior to the closur e of U.S. facilities in

4 T. H. Friend. A review of recent research on the transportation of horses, Journal of Animal Science, 2001. 79:E32-E40. http://jas.fass.org/cgi/reprint/79/E-Suppl/E32.pdf7 2007. 5 Based on the average annual number of equi nes slaughtered in the United States between 2003 and 2006 (approximately 79,000) and the estimated number of shippers at that time, the average number of equines transported annua lly per shipper was pr obably about 800 head. 6
APHIS does not have information on the curren t number of traders who ship horses to intermediate points en ro ute to slaughter. Although the number and size of these entiti es are unknown, it is reasonable to assume that most are small by U.S. Small Business Admini stration (SBA) standards. This assumption is based on composite data for esta blishments that provide the sa me or similar services, as categorized in the North American Industry Cla ssification System (NAICS). In 2007, the most recent year for which data are available, th ere were 33,865 specialized freight local trucking establishments (NAICS 484220) and 11,391 spec ialized freight long-distance trucking establishments (NAICS 484230). 7 Average gross receipts of es tablishments in these industry classifications, including busin esses engaged in the transpor tation of livestock, were $930,000 and $2.6 million, respectively. These average receipts are well below SBA's small-entity threshold of $25.5 million. Similarly in 2007, ther e were 765 establishments categorized as other farm product raw material merchant whol esalers (NAICS 424590), a category that includes horse dealers. For establishments included in th is industry classification, the average number of employees was fewer than 9, well below the SB A's small-entity threshold of 100 employees. 8 Clearly, most if not all of the businesses that ma y be affected by this rule are small entities. Notwithstanding the prevalence of small entit ies among businesses that may be affected, negative effects of the rule are e xpected to be relatively minor. Costs of the ban on the use of

5 Based on the APHIS VS-1013 database. 6 Based on data reported annually by USDA NASS. 7 U.S. Census Bureau, 2007 Economic Census. 8 Ibid

.8 double-deck trailers, perhaps the most burdens ome regulatory change, will be mitigated by a five-year phase-in period following promulgation of the final rule. Based on this information, the Administrator of the Animal and Plant Health Inspection Serv ice has determined that this action will not have a significant economic impact on a substantial number of small entities.