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Animal and Plant Health Inspection Service

Economic Analysis and Certification Statement

Proposed Rule: Recognition of the Brazilian State of Santa Catarina as free of foot-andmouth disease, rinderpest, swine vesicular disease, classical swine fever, and African 

swine fever to allow importation of live ruminants, live swine, and their products from 

Santa Catarina

Docket No.: 09-034-1

July 1, 2009

This analysis provides a factual basis for certification by the Administrator of the 

Animal and Plant Health Inspection Service, as required by section 605 of the Regulatory

Flexibility Act (RFA) that the proposed rule, if promulgated, will not have a significant 

economic impact on a substantial number of small entities.

APHIS currently recognizes the Brazilian State of Santa Catarina as an area where 

foot-and-mouth disease (FMD), rinderpest, swine vesicular disease (SVD), classical 

swine fever (CSF), and African swine fever (ASF) exist. However, APHIS is proposing 

to amend the regulations in 9 CFR part 94 to add Santa Catarina to the list of regions 

considered free of FMD, rinderpest, SVD, CSF, and ASF. A risk analysis conducted by

APHIS concludes that Santa Catarina is free of these diseases. Based on this conclusion, 

the proposed change would allow the importation of live ruminants, ruminant semen, 

ruminant meat, ruminant products, live swine, swine semen, pork meat, and pork 

products from Santa Catarina.

The proposed rule is not expected to have a significant economic impact on a 

substantial number of small entities due to the fact that it is not expected to result in beef 

or other ruminant meat exports to the United States of any appreciable quantity, and trade 

effects for pork products are likely to be insignificant. As noted in the risk evaluation for 

this rule, Santa Catarina contains less than three percent of Brazil’s cattle, most of which 

are dairy animals. Brazil’s sheep and goat populations are also concentrated in parts of 

the country other than Santa Catarina, and their products are nearly entirely destined for 

the domestic market. 
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Santa Catarina accounts for approximately one-fourth of Brazil’s pork production 

and one-third of Brazil’s pork exports. As projected by ABIPECS, the Brazilian Pork 

Industry and Exporter Association, the rule is expected to result in average pork exports 

from Santa Catarina to the United States of 10,000 metric tons (MT) per year over five 

years. This level of U.S. pork imports by the United States would be equivalent to about 

two percent of Brazil’s annual pork exports (510,000 MT), three percent of annual U.S. 

pork imports (309,000 MT), and one-tenth of one percent of annual U.S. pork production 

(10,281,000 MT), based on data averaged over the years 2007 and 2008. As underscored 

by the last statistic in particular, we do not expect economic impacts of the proposed rule 

to be significant.

Pork Production in the United States

Consolidation in the pork industry has resulted in a shift in the size and number of 

operations. Compared to historical production, more pigs are being produced by fewer 

operations. Additionally, this industry has been marked by increased concentration 

(vertical integration) in that many slaughter firms own the pigs from the time they are 

born until slaughter, relying on contracting arrangements with growers to manage the 

daily care of the animals throughout the different production phases. Most hogs are 

produced in some type of confinement facility, which allows for year-round production. 

Approximately 53 percent of all production sites are classified as total confinement.1

The United States is a net exporter of pork (table 1) and has been the second 

largest exporter of pork, trailing the European Union, in recent years. In 2008, the United 

States surpassed the European Union as the largest pork exporter. Other major exporters 

include Canada and Brazil. Historically, Japan, Mexico and Canada are the primary

markets for U.S. pork exports (table 2), accounting for 63 percent of average exports

from 2004 to 2008. However, U.S. pork export markets may be shifting. In 2008, Hong 

Kong and Russia together received 20 percent of U.S. pork exports, accounting for a 

larger share than Canada, whereas the five-year average market shares for Hong Kong 

 

1 APHIS-VS-CEAH-NAHMS. October 2007. Part I: Reference of Swine Health and Management 

Practices in the United States, 2006, National Health Monitoring System. #N475.1007. Fort Collins, CO.
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and Russia were five percent and seven percent, respectively. The marked increase in 

exports to these countries is likely due to beneficial trade agreements and market forces.

Table 1– U.S. pork production, exports, and imports, 2004-2008

Production Exports Imports

1,000 Metric Tons

2004 9,311.80 989.07 498.71

2005 9,391.18 1,209.33 464.41

2006 9,558.96 1,358.55 448.91

2007 9,962.02 1,424.82 439.28

2008 10,599.05 2,117.51 377.32

Source: Livestock Marketing Information Center Database, USDA 

data compiled by LMIC, converted to metric tons.

Table 2– U.S. pork exports by country, 2004-2008

2004 2005 2006 2007 2008 Average

1,000 Metric Tons, Carcass Weight Equivalent

Japan 417.7 474.4 460.6 486.6 600.4 488.0

Mexico 241.6 244.1 276.2 204.8 305.7 254.5

Canada 106.3 137.1 147.4 166.7 191.6 149.8

Russia 30.4 42.7 94.7 110.8 195.1 94.7

Hong Kong 14.6 10.6 22.6 57.6 222.2 65.5

Source: ERS CWE calculations using data from U.S. Department of 

Commerce, Bureau of the Census, converted to metric tons.

Potential Impacts

Imports of pork from Santa Catarina are expected to be 50,000 MT over a fiveyear period, assuming imports of 10,000 MT on a yearly basis. This annual level of 

imports would be equivalent to approximately two percent of average U.S. imports over 

the period 2004 to 2008. Additionally, imports from Santa Catarina would compete with 

imports of pork from Canada and Denmark, the United States’ two largest suppliers of 

pork.

The proposed rule would have potential implications for swine producers and 

slaughter facilities. Based on data from the 2007 Census of Agriculture and Small 

Business Administration (SBA) guidelines, we expect a majority of those affected by the 
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proposed regulation to be small entities.2 Entities in the category hog and pig farming 

(NAICS 112210) are considered small if their total annual sales do not exceed $750,000. 

Data from the Census of Agriculture indicate that 82 percent of hog and pig operations 

are classified as small; of the 74,789 farms classified under the hog and pig farming 

category, 61,101 operations had annual sales of less than $500,000. Entities in the 

category hog feedlots are considered small if they have total annual sales of not more 

than $750,000. These operations are classified under the same code as hog and pig 

farming (NAICS 112210). Thus, we expect the majority of entities classified as hog 

feedlots are small. Entities classified as animal (except poultry) slaughtering (NAICS 

311611) with not more than 500 employees are considered small by SBA standards. The 

2007 Economic Census reports 1,597 establishments in this category.

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 Of this number, 

1,466 establishments (92 percent) had fewer than 100 employees. In similar data from 

the 2002 Economic Census, 96 percent of 1,869 establishments had fewer than 500 

employees.4 Thus, the majority of slaughter establishments are considered small under 

SBA guidelines.

Summary

The rule is not expected to result in beef or other ruminant meat exports to the 

United States of any appreciable quantity, and trade effects for pork products are likely to 

be insignificant. The United States is a net exporter of pork. Pork imports from the State 

of Santa Catarina in Brazil are expected to be equivalent to approximately three percent 

of average U.S. fresh pork imports. These imports would compete with imports from 

Canada and Denmark, currently the United States’ largest suppliers of pork. Taking into 

consideration probably partial displacement of pork imported from these countries by

 

2 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.

3 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.

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2002 Economic Census is available online at http://www.census.gov/econ/census02/.
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projected pork imports from Santa Catarina, the net increase in imports is expected to be 

less than three percent.

The majority of swine producer and slaughter facilities are considered small under 

SBA guidelines. However, 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 Santa Catarina are likely to be minimal.

Based on the factors presented above, APHIS certifies that the proposed rule, if 

promulgated, will not have a significant economic impact on a substantial number of 

small entities.