United States 

Department of 

Agriculture

Animal and 

Plant Health 

Inspection 

Service

July 2012

Regulatory Impact Analysis &

Final Regulatory Flexibility Analysis

Final Rule

APHIS-2009-0091

RIN 0579-AD24

Traceability for Livestock Moving Interstate

Policy & Program Development

Policy Analysis & Development
1

Summary

APHIS is establishing general traceability regulations for livestock moving interstate. 

The purpose is to improve APHIS’ ability to trace livestock in the event disease is found. In this 

analysis, we examine expected benefits and costs of the rule in accordance with Executive 

Orders 12866 and 13563. Benefits are expected to exceed the costs overall. Possible impacts on 

small entities are considered in accordance with the Regulatory Flexibility Act.

While the rule applies to cattle and bison, horses and other equine species, poultry, sheep 

and goats, swine, and captive cervids, the focus of this analysis is on expected economic effects 

for the beef and dairy cattle industries. These enterprises are likely to be most affected 

operationally by the rule. For the other species, APHIS will largely maintain and build on the 

identification requirements of existing disease program regulations.

Costs for cattle producers are estimated in terms of activities that will need to be 

conducted for official animal identification and issuance of an interstate certificate of veterinary 

inspection (ICVI), or other movement documentation, for livestock moved interstate. 

Incremental costs incurred are expected to vary depending upon a number of factors, including 

whether an enterprise does or does not already use eartags to identify individual cattle. For many

operators, costs of official animal identification and ICVIs will be similar, respectively, to costs 

associated with current animal identification practices and the inshipment documentation

currently required by individual States. Existing expenditures for these activities represent cost 

baselines for the private sector. To the extent that official animal identification and ICVIs will

simply replace current requirements, the incremental costs of the rule for private enterprises will

be minimal. 

 
2

There are two main cost components for the rule, using eartags to identify cattle and 

having certificates for cattle moved interstate. Approximately 20 percent of cattle are not 

currently eartagged as part of routine management practices, and an estimated 45 percent of 

cattle are identified for management purposes other than by using official identification. Annual 

incremental costs of official identification for cattle enterprises are estimated to total from $12.5

million to $30.5 million, assuming producers who are not already using official identification

will tag their cattle as an activity separate from other routine management practices. More 

likely, some producers who are not already using official eartags can be expected to combine 

tagging with other routine activities such as vaccination or de-worming, thereby avoiding the 

costs associated with working cattle through a chute an additional time. Under this second 

scenario, the total incremental cost of official identification will range from $8.9 million to $19.7

million. 

All States currently require a certificate of veterinary inspection, commonly referred to as 

a health certificate, for the inshipment from other States of breeder cattle and 48 States require a 

health certificate for feeder cattle. Annual incremental costs of the rule for ICVIs are estimated 

to range between $2 million and $3.8 million. If States currently requiring documentation other 

than ICVIs such as owner-shipper statements or brand certificates continue to accept these 

documents in lieu of an ICVI, as permitted by this rule, the ICVI requirement in this rule will not 

result in any additional costs.

The combined annual costs of the rule for cattle operations of official identification and 

movement documentation will range between $14.5 million and $34.3 million, assuming official 

identification will be undertaken separately from other routine management practices; or 
3

between $10.9 million and $23.5 million, assuming that some producers will combine tagging 

with other routine management practices that require working cattle through a chute. 

Currently, States and Tribes bear responsibilities for the collection, maintenance, and 

retrieval of data on interstate livestock movements. These responsibilities will be maintained

under the rule, but the way they are administered will likely change. Based on availability, 

Federal funding will be allocated to assist States and Tribes as necessary in automating data 

collection, maintenance, and retrieval to advance animal disease traceability.

Direct benefits of improved traceability include the public and private cost savings 

expected to be gained under the rule. Case studies for bovine tuberculosis, bovine brucellosis, 

and bovine spongiform encephalopathy (BSE) illustrate the inefficiencies currently often faced 

in tracing disease occurrences due to inadequate animal identification and the potential gains in 

terms of cost savings that may derive from the rule. 

Benefits of the traceability system are for the most part potential benefits that rest on

largely unknown probabilities of disease occurrence and reactions by domestic and foreign 

markets. The primary benefit of the regulations will be the enhanced ability of the United States 

to regionalize and compartmentalize animal health issues more quickly, minimizing losses and 

enabling reestablishment of foreign and domestic market access with minimum delay in the 

wake of an animal disease event. 

Having a traceability system in place will allow the United States to trace animal disease 

more quickly and efficiently, thereby minimizing not only the spread of disease but also the trade 

impacts an outbreak may have. The value of U.S. exports of live cattle in 2010 was $131.8 

million, and the value of U.S. beef exports totaled $2.8 billion. The value of U.S. cattle and calf 

production in 2009 was $31.8 billion. For tagging cattle, the estimated incremental costs of the 
4

rule for cattle enterprises—between $14.5 million and $34.3 million, assuming official 

identification is a separately performed activity, and between $10.9 million and $23.5 million, 

assuming official identification is combined by some operations with other routine management 

practices that require working cattle through a chute—represent about one-tenth of one percent

of the value of domestic cattle and calf production. If there were an animal disease outbreak in 

the United States that affected our domestic and international beef markets, preservation of a 

very small proportion of these markets would justify estimated private sector costs attributable to 

the animal disease traceability program. 

Most cattle operations in the United States are small entities. USDA will ensure the 

rule’s workability and cost effectiveness by collaborating in its implementation with 

representatives from States, Tribes, and affected industries.

In the table on the following page, we summarize expected benefits and costs of this rule.
5

Summary table of expected benefits and costs of the animal disease traceability 

rule with respect to the cattle industry

Benefits

• More effective tracing of animal disease discoveries, that is, traces 

successfully accomplished more quickly than at present, with 

fewer private entities needing to be included in the traces; public 

resource savings. 

• Reduced risk of disease spread following an animal disease 

discovery, including discoveries where the disease has a long 

latency period, due to timely location of all animals that may have 

been infected or exposed; prevention or mitigation of negative 

domestic and international market impacts of disease occurrence. 

Annual Costs

 Private Sector Official 

Identification ICVI Total

----------Million Dollars----------

Scenario 1, official 

identification undertaken 

separately from other 

management practices by 

producers not already 

using official ID

12.5 to 30.5 2.0 to 3.8 14.5 to 34.3

Scenario 2, official 

identification combined 

with other management 

practices by some 

producers not already 

using official ID

8.9 to 19.7 2.0 to 3.8 10.9 to 23.5

 States

Automation of data systems to provide electronic retrieval of ICVI data; 

incremental cost dependent on status of States’ existing animal disease 

traceability systems and availability of Federal funding. USDA expects 

that the States will match approximately 20 percent of Federal money 

provided to them, either through State funding or in-kind contributions. 

 U.S. Government

$14.2 million in FY 2012, for IT assistance to States ($1.9 million), field 

implementation ($9.6 million), and program administration ($2.7 million).
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Table of Contents

Summary............................................................................................................................. 1

Introduction......................................................................................................................... 8

The Need for Regulatory Action..................................................................................... 8

Response to Comments..................................................................................................... 11

Alternatives to the Final Rule ....................................................................................... 19

U.S. Cattle Production ...................................................................................................... 21

Expected Costs.................................................................................................................. 22

Cattle Enterprises.......................................................................................................... 23

Animal identification and certification currently practiced ...................................... 23

Unit costs .................................................................................................................. 26

Total costs................................................................................................................. 33

Interstate Movement of Horses and Poultry ................................................................. 37

States and Tribes........................................................................................................... 40

Federal Funding ............................................................................................................ 42

Rule Elements that will lessen the Cost Burden for Producers .................................... 43

Expected Benefits ............................................................................................................. 45

Private and Public Sector Cost Savings........................................................................ 46

The trace process....................................................................................................... 47

Current animal diseases of concern in cattle............................................................. 53

Animal disease traceback investigations .................................................................. 56

Benefits of effective traceability to producers.......................................................... 61
7

Comparison to traceability for sheep and goats........................................................ 63

Concluding observations........................................................................................... 64

Market Effects of Improved Traceability ..................................................................... 65

Final Regulatory Flexibility Analysis............................................................................... 68

Reason Action is Being Considered ............................................................................. 68

Objective of and Legal Basis for the Rule .................................................................... 69

Potentially Affected Small Entities............................................................................... 69

Projected Reporting, Recordkeeping, and Other Compliance Requirements............... 72

Duplication, Overlap, or Conflict with Existing Rules and Regulations...................... 72

Alternatives to minimize Significant Economic Impacts of the Rule........................... 73

References......................................................................................................................... 74
8

Introduction

APHIS is establishing general traceability regulations for livestock moving interstate. 

Under this rule, unless specifically exempted, livestock moved interstate will have to be 

officially identified and accompanied by an interstate certificate of veterinary inspection (ICVI)

or certain other documentation. The purpose of this rule is to improve APHIS’ ability to trace 

livestock in the event disease is found. 

In this analysis, we examine expected benefits and costs of the rule in accordance with 

Executive Orders 12866 and 13563. Benefits are expected to exceed the costs overall. Possible 

impacts on small entities are considered in accordance with the Regulatory Flexibility Act.

The Need for Regulatory Action

Preventing and controlling animal disease is the cornerstone of protecting American 

animal agriculture. While ranchers and farmers work hard to protect their animals and their 

livelihoods, there is never a guarantee that their animals will be spared from disease. To support 

their efforts, the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of 

Agriculture (USDA) has promulgated regulations to prevent, control, and eradicate disease. 

Traceability does not prevent disease, but knowing where diseased and at-risk animals are, where 

they have been, and when, is indispensible in emergency response and in ongoing disease control 

and eradication programs.

The United States does not currently have an overarching animal disease traceability 

program integrated to meet the needs of all species and disease programs. Many of our animal 

disease program regulations, such as those for bovine tuberculosis and brucellosis, contain 

components of a traceability program, e.g., requirements for an animal moving interstate to be 
9

officially identified and accompanied by documentation recording, among other things, the 

animal’s official identification number and the locations from and to which it is being moved. 

Such requirements, however, do not apply to all livestock or to all interstate movements. This 

rulemaking is intended to address animal disease traceability gaps in the regulations and enhance 

our ability to safeguard animal health.

We are particularly concerned with current inadequacies in disease tracing capabilities in 

the cattle industry. Previously, many cattle received official identification through USDA’s 

vaccination program for brucellosis, which requires that certain young female cattle and bison 

(aged 4 to 12 months) moving into and out of States or areas designated as Class B or Class C for 

brucellosis be vaccinated for the disease. These vaccinated calves must be permanently 

identified by means of a tattoo and either an official vaccination eartag or other official eartag if 

one is already attached to the animal (9 CFR part 78). Our eradication efforts have been

tremendously successful, and now all 50 States are brucellosis-free. While this is certainly a 

positive development, it has resulted in a steep decline in the number of officially identified 

cattle. In 1988, when there were only 27 Class Free States and many more calves were subject to 

those requirements, 10 million calves were officially identified, but by 2010 that number had 

fallen to 3.1 million. 

As a result of decreasing levels of official identification in cattle, the time required to 

conduct disease investigations is increasing. For example, investigations for bovine tuberculosis 

frequently now exceed 150 days, as USDA and State teams spend substantially more time and 

money in conducting tracebacks. The decreased level of official identification has resulted in an 

expansion of the scope of investigations needed to identify suspect and exposed animals,

requiring the testing of thousands of cattle that would otherwise not have needed to be tested.
10

While the rule will apply to cattle and bison, horses and other equine species, poultry, 

sheep and goats, swine, and captive cervids, the focus of this analysis is on expected economic 

effects for the beef and dairy cattle industries. These enterprises will be most affected 

operationally by the rule. For the other species, APHIS will largely maintain and build on the 

identification requirements of existing disease program regulations, as discussed in the 

Supplemental Information to the rule. Most poultry moved interstate is already officially 

identified in accordance with the National Poultry Improvement Plan regulations or as agreed to 

by State animal health officials and the rule will allow for a group/lot identification number to be 

used. Consequently, we do not expect that there will be large incremental costs associated with 

this provision for poultry farms already in compliance with NPIP. Poultry moved interstate to 

live bird markets will need to have an ICVI or other documentation as agreed to by the shipping 

and receiving States. For equines, this rule is consistent with current industry practices for 

identification related to testing for equine infectious anemia. Horses and other equine species

moved interstate will be required to be accompanied by an ICVI or other interstate movement 

document, as agreed to by the States or Tribes involved in the movement. For swine, sheep and 

goats moved interstate, this rule will not change currently required official identification devices 

or methods or movement documentation. 

The rule has been developed in consideration of existing disease-specific livestock 

movement regulations and of what was learned from the National Animal Identification System 

(NAIS). The latter was initiated in 2004, as a means by which livestock producers could

participate in national animal health safeguarding efforts. A benefit-cost study was

commissioned by USDA, to comprehensively and quantitatively examine the program’s 
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expected economic worth (NAIS Benefit-Cost Research Team 2009).

1

 Although the regulatory 

approach taken in this rule differs from prior implementation strategies, parts of the benefit-cost 

study remain relevant and help inform our understanding of the costs and benefits of animal 

disease traceability. 

Broad participation at public meetings has underscored the need for USDA to continue to 

maintain close collaboration with States, Tribes, and producers in the development of this rule. 

Based on input from these entities, the animal disease traceability program will rely on widely 

used and cost-effective methods to identify livestock moved interstate. The rule represents a 

flexible yet coordinated approach to animal disease traceability that will be outcome-based, 

empowering States, Tribes, and producers to determine the means of traceability that work best 

for them.

Response to Comments

It was claimed by some commenters that the regulatory impact analysis published in 

conjunction with the August 2011 proposed rule (preliminary RIA) grossly underestimated the 

economic cost that would be borne by U.S. cattle producers. Some commenters expressed the 

view that we did not properly account for the cost of Phase 2. The final rule provisions related to 

cattle will apply only to cattle over 18 months of age. Provisions for cattle under 18 months of 

age that were part of the planned Phase 2 are not included in this final rule. If USDA determines 

that there is a need to include cattle under 18 months of age in the animal disease traceability

program, action will be undertaken through a separate rulemaking.

 

1 Hereafter referred to as “the benefit-cost study.”
12

In the preliminary RIA, we estimated the additional costs expected to be incurred due to 

the provisions of the proposed rule. We acknowledged that a significant portion of the cattle 

industry already uses some method of identification, as reported in the National Animal Health 

Monitoring System 2007 and 2008 surveys. We noted that two-thirds of the beef operations and

90 percent of dairy operations use some method of identification.

Additionally, for beef operations, over 60 percent of the calves had some form of 

individual identification. Consideration of these existing practices is important when estimating 

new costs that may be attributed to the traceability requirements, as we believe that official 

eartags, in many cases, will likely be applied at the same time at which cattle are already being 

tagged or worked through chutes for other management purposes. Additionally, with an array of 

official eartags, producers may choose a single eartag that meets both management and official 

identification needs.

We expect the additional cost of official eartags will be small. Likewise, we believe that 

producers will continue to develop tagging practices that minimize the cost of applying official 

eartags. Producers that are not able to tag their own cattle may find a tagging site to be the most 

practical option for meeting the official identification requirements. We believe that the 

preliminary RIA accurately identified tagging costs that may occur at tagging sites. We 

acknowledge that our estimates for the number of animals moved interstate that would require 

official identification is based on several assumptions and that the estimation of costs involves 

many variables. 

Regarding ICVI costs, we noted that most States already require ICVIs for many 

interstate movements. Thus, we do not believe the overall volume of ICVIs issued will increase

significantly as a result of this rule. In this final rule, the exemption that allowed other 
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documentation to be used in lieu of an ICVI, provided that the shipping and receiving States or 

Tribes agreed, for cattle and bison under 18 months of age moving interstate has been extended 

to cover all ages and classes of cattle and bison. This revision will likely make the potential 

increase in the volume of ICVIs issued less than originally anticipated. In the preliminary RIA, 

we did account for the costs associated with these documents that are currently not required in 

two States for feeder cattle. Overall, we believe that estimates used in the preliminary RIA are 

reasonably accurate in describing expected cost impacts for producers. 

One commenter asserted that the likely cost of the proposed rule to producers would

range from $1.2 billion to $1.9 billion. The commenter cited testimony before the U.S. 

International Trade Commission (ITC). We believe that the costs described in that testimony 

included activities not associated with the provisions of the proposed rule. The estimated costs 

per calf cited in the U.S. ITC testimony included $5 for tags, data management, and verification; 

$7 for working calves, tag placement, and documentation; and $8 for feedlot and harvest data 

collection and chute fees. The U.S. ITC testimony cited estimated losses due to shrinkage as $10 

to $20 in lost income potential per calf. The U.S. ITC testimony was also based on an electronic 

animal identification system involving data management and verification activities at the 

producer level. 

We are not disputing the cost factors for the practices referenced in the U.S. ITC report. 

However, we do not believe they reflect management practices necessary for producers to 

comply with the identification requirements of the traceability rule and, therefore, do not believe 

those cost factors are applicable in our economic analysis. 

One commenter estimated the number of cattle moving interstate to be much higher than 

the 30 million estimated in the preliminary RIA. Our estimate of 30 million cattle moving 
14

interstate uses data published by the USDA National Agricultural Statistics Service (NASS) in 

“Meat Animals Production, Disposition, and Income Summary”.

Commenters stated that we ignored the cost to distribute official identification devices 

and collect and maintain data on people receiving them and animals moved with them. It was 

stated that we also ignored the costs of official tags bearing the required emblem, the costs of 

replacing existing tag systems with official tags, the costs of equipment to read the tags, the costs 

of configuring corrals and handling facilities to allow for collection of identification information, 

and the costs associated with technology problems when tags are not read.

We included information in the preliminary RIA about the cost of the tags, the cost of the 

labor to work the cattle in chutes and apply the tags, and the cost of the ICVI when the official 

identification information is recorded. Since the U.S. Shield has been imprinted on the NUES 

tags obtained by APHIS for disease-control programs for many years, we do not agree that the 

standardized use of the official eartag shield will increase the cost of official eartags. This 

rulemaking is designed to allow producers to use tags that do not require any electronic or 

special equipment to read the official eartags.

As described in the preliminary RIA, States and Tribes would bear responsibility for the 

collection, maintenance, and retrieval of data on interstate livestock movements. Federal 

funding, as available, would be allocated to assist States and Tribes in meeting program goals. 

Additionally, APHIS continues to provide information systems that States and Tribes may elect 

to use at no charge.

Some commenters stated that we underestimated the cost to producers of the rulemaking 

because we did not factor in the costs of buying chutes in calculating the costs of tagging. 
15

As stated previously, in the preliminary RIA, we attempted to determine only the costs 

and benefits that were associated with the provisions of the proposed rule. While we included 

estimated costs for chute operations for tagging, we did not include the entire costs of buying or 

renting chutes because we were only trying to determine the costs associated with the rule. If an 

operation does not currently own equipment needed for tagging, such as chutes, we note that 

tagging may take place at an approved tagging site. We do realize that some operations may 

elect to purchase a chute that will allow them to tag their own animals. However, we do not 

believe the investment in the chute will be made solely for applying the official eartags to the 

operation’s cattle. Rather, the chute is likely to be used for many other management practices. 

Therefore, we believe that analyzing the cost of tagging animals at tagging sites provides a more 

reliable basis for a reasonable estimate of producer costs for tagging animals than would 

including the entire costs of buying or renting chutes in such an estimate. 

Commenters stated that we did not adequately account for the added costs to producers, 

sale barns, veterinarians, and veterinary clinics that would be associated with our proposed ICVI 

requirements. 

As mentioned previously, many States already require ICVIs for interstate movements of 

livestock covered in the traceability rule. Therefore, we do not believe the volume of ICVIs 

issued is likely to change significantly. We did, however, attempt to account for an increase in 

these costs to producers, which were projected to range from $2.0 million to $3.8 million. In this

final rule, as we have already noted, the exemption allowing the use of other documentation in 

lieu of ICVIs has been extended to all ages and classes of cattle and bison when agreed to by the 

receiving and shipping States and Tribes, thus limiting the increase in the number of ICVIs 

issued. If sale barns and veterinarians are providing services associated with the rulemaking, we 
16

anticipate that they will charge an appropriate price for those services. Costs that could be 

incurred by producers as a result were estimated in the preliminary RIA. 

One commenter stated that our preliminary RIA grossly underestimated the costs of 

ICVIs for horse owners. Another stated that the increased costs for the ICVI would place a 

greater burden on the horse industry than on the cattle industry because horses move more 

regularly. 

The preliminary RIA included information about estimated costs for equines. We

estimated the incremental cost of an ICVI for most horses moved interstate to range between 

$4.00 and $7.50, based on the cost of testing for EIA. We estimated that the total additional cost 

for the equine industry could range from $8.8 million to $16.5 million, given the current number 

of EIA tests per year. 

Many commenters expressed concerns about the potential economic burdens on small 

producers and livestock markets, arguing that the rulemaking favored larger, vertically integrated 

entities. 

While APHIS is sensitive to these concerns, many commenters did not provide specific 

information to support these claims or provide traceability solutions that would be more cost 

effective. While larger, vertically integrated entities may realize economic benefits due to the 

size of their operations, those benefits will result from market forces and are not due to specific 

provisions of this rulemaking. However, in this final rule, we did add exemptions in response to 

comments from small poultry producers for certain movements, so as not to put such producers 

at a disadvantage. In particular, we exempted from the official identification requirements 

chicks moving interstate from a hatchery to a poultry producer or redistributor. 
17

It was stated that the rulemaking would disadvantage U.S. producers because they would 

be required to meet our traceability requirements when moving cattle across State lines, while we 

would place no such requirement on foreign producers.

The official identification and documentation requirements for imported livestock are 

well established through 9 CFR part 93 and are not affected by this rulemaking. The 

requirements in part 93 are at least equivalent to those specified in this rulemaking, so domestic 

producers will not be placed at a competitive disadvantage. 

It was stated that the proposed rule was unfair in that it would only regulate interstate 

movement. As a result, producers may choose to take cattle to in-State markets that are farther 

away, thus incurring increased transportation costs, in order to avoid the cost and burden of the 

proposed requirements. Producers and markets located in the interiors of States may be given an 

unfair competitive advantage by not having to comply. 

We realize there are many factors that producers will consider when marketing their 

animals. While the cost of officially identifying animals moved interstate to a market may be 

considered, there are many other economic factors associated with marketing decisions, 

including, but not limited to, transportation costs and the availability of local and out-of-State 

buyers. 

Many commenters viewed the proposed traceability program as an unfunded mandate. 

For example, it was said that State agencies would have to build database storage, management, 

and retrieval systems, which could strain their budgets. It was suggested that we provide funds 

to help States modernize and upgrade their data systems and train people to use them.

The preliminary RIA discussed the estimated Federal funding available to support animal 

disease traceability. A significant portion of the budgeted funds are targeted to field 
18

implementation. However, APHIS has taken the position that it will not fund the development of 

duplicative information systems, as such investments cannot be justified. Rather, APHIS will 

provide information systems that the States and Tribes may use at no charge. If a State or Tribe 

elects to develop its own system, however, it will have to cover the cost. Federal funds, 

however, may be used for the overall administration of the local traceability activities.

It was stated that our proposed traceability system would enhance the bargaining power 

of packers at the expense of producers. The commenters who expressed this view did not 

describe how the proposed rule would alter the relative bargaining power of packers at the 

expense of producers, and we are unable to determine how this point is applicable to the 

rulemaking.

Many commenters noted that our preliminary RIA did not include a cost analysis for 

poultry producers. The preliminary RIA noted that there would be no additional costs for poultry 

enterprises that participate in the National Poultry Improvement Plan (NPIP). Participation by 

commercial poultry producers in NPIP is very high. As noted earlier, a primary concern about 

the cost of identifying individual birds, in particular chicks shipped from hatcheries, has been 

accounted for in the exemption from the official identification requirements for such poultry 

shipments. Likewise, it has been clarified that interstate movements to a custom slaughter 

facility are exempt from these traceability regulations. Poultry moved interstate to live bird 

markets would need to have an ICVI or other documentation as agreed to by the States. States 

have the option of maintaining current requirements for movement documentation, in which case 

no additional costs will be incurred.

It was stated by some commenters that the preliminary RIA indicated that the primary 

benefits of this rulemaking would be to minimize losses and enable the reestablishment of 
19

foreign and domestic markets. This rationale was questioned. A commenter requested more 

detailed information on tuberculosis traceouts in the last 5 years and how animal identification 

has contributed to successful or unsuccessful traceouts. The commenter also requested data on 

foreign market access lost due to tuberculosis and brucellosis. Some other commenters stated 

that the discussion of benefits focused too much on the benefits of exports. It was maintained 

that, while exporters would likely benefit from the proposed rule, the costs would mainly be 

borne by domestic producers and related businesses.

The ability of U.S. producers to export affects all producers, even those who do not 

directly sell to an international market. Trade restrictions lead to products intended for the 

export market being diverted to the domestic market. An increase in the supply of a product that 

otherwise may have been exported on the domestic market may lead to lower prices in the short 

run. In the event that exports cannot be re-established, the likely result is a smaller domestic 

herd.

A commenter stated that since the potential cost-benefit ratio of the rule could not be 

determined, the costs should be borne by the Federal Government. The preliminary RIA 

provided our estimate of who would bear the costs and the amount of those costs. In cases where 

we cannot quantify benefits or costs, we have described those benefits and costs qualitatively.

The benefits of an efficient system for tracing animal disease occurrences, as set forth in the 

proposed rule and in this document, would accrue directly to the livestock and meat industries 

and indirectly to other sectors of the economy.

Alternatives to the Final Rule

The National Animal Identification System (NAIS) was one alternative to the rule 

considered by APHIS. Although more than 500,000 livestock producers took part in NAIS, 
20

these producers represented only 36 percent of livestock enterprises. This limited participation in 

the identification of livestock operations, which did not include animal identification, would 

have many omissions of records necessary to achieve timely traceability for an effective 

program. 

As USDA considered alternatives to NAIS, we collaborated with industry to obtain their 

input on what options for identification and traceability they felt would work the best. As a 

result, and in contrast to NAIS, the rule will require traceability only for livestock moving 

interstate. It will also encourage the use of low-cost technology, such as metal eartags, for 

identifying livestock. Moreover, while the rule lists methods and devices approved by APHIS 

for identifying species of livestock covered by the rule, it will allow alternative means of 

identification, such as branding, as agreed upon by animal health officials in the shipping and 

receiving States or Tribes involved in an interstate movement. 

The rule also stands in contrast to NAIS in terms of providing an adaptable approach that 

embraces the strengths and expertise of States, Tribes, and producers, while being less federally 

dictated. States and Tribes will be able to establish systems for tracing the interstate movement 

of livestock that work best for them. APHIS intends through future rulemaking to establish 

performance standards for States and Tribes, but will not require a one-size-fits-all approach.

Within the animal disease traceability framework, APHIS also considered (i) fully 

implementing official identification for all cattle upon promulgation of the final rule, or (ii) 

phasing in official identification of cattle under 18 months of age only after certain traceability 

performance criteria for older cattle are first met. Both of these alternatives were rejected. 

Instead, the provisions of this final rule for cattle will only pertain to those cattle over 18 months 
21

of age. If USDA determines that there is a need to include cattle under 18 months of age in the 

animal disease traceability program, action will be undertaken through a separate rulemaking.

U.S. Cattle Production

Cattle production is one of the most important industries in the United States, generating 

$43.8 billion in cash receipts during 2009 (USDA NASS 2010a). The structure of the cattle 

industry continues to change, with a greater proportion of cattle being raised on fewer and larger 

farms. The total number of cattle operations in the United States in 2009 was 950,000, of which 

753,000 were cow-calf operations. During the last 20 years, the number of all cattle operations 

in the United States has fallen 28 percent, while beef cow operations have declined by 21 

percent. Over this period, the average number of cattle per operation has increased by 36 percent 

to nearly 100 head for all cattle operations. In 2009, operations with 500 or more head 

accounted for 47.7 percent of the total cattle inventory, compared to 38.0 percent in 1999.

Although the total cattle inventory fell by 15 percent between 1979 and 2009, 

commercial beef production grew by 22 percent. The decline in cattle inventory has been offset 

by a 23 percent increase in the average dressed weight of federally inspected cattle. 

The dairy industry in the United States has also undergone significant structural change 

(USDA NASS 2010b). Total milk cow operations have declined significantly, while the number 

of large operations has increased. There were 65,000 milk cow operations in 2009, compared to 

97,460 in 2001, a decline of 33 percent in 8 years. Despite the large decrease in milk cow 

operations during this time period, milk cow numbers rose 1 percent (to 9.2 million head in 

2009) and milk production increased by 15 percent (to 189,320 million pounds in 2009).

Between 2001 and 2009, the number of dairy operations with 500 or more head increased 

by 20 percent, from 2,795 to 3,350 establishments. The number of enterprises with 2,000 or 
22

more head showed the greatest percentage increase (128 percent), rising from 325 to 740 

operations. While the number of larger operations has grown, smaller operations have declined 

in number. Operations with fewer than 500 head fell from 94,665 in 2001, to 61,650 in 2009, a 

decline of 35 percent. Production per cow for both larger and smaller operations continues to 

increase as lower-producing cows are culled from herds and less efficient operations exit the 

industry. 

In sum, greater concentration and operational efficiencies characterize both the beef and 

dairy cattle industries. In this environment, operators rely increasingly on interstate movement 

of their livestock to achieve their marketing objectives. The traceability requirements will

further assure market participants that disease outbreaks can be contained without undue delay,

minimizing market disruptions domestically and internationally. 

Expected Costs

We address expected costs of the rule for the primary private and public entities that will

be affected: cattle enterprises, equine and poultry enterprises, States and Tribes, and the Federal 

government. With respect to cattle producers, we provide general estimates of the costs of 

principal activities that will be required. For many operators, costs of official animal 

identification and interstate movement documentation under the rule will be much the same, 

respectively, as the costs associated with current herd management practices involving 

eartagging and State-required inshipment documentation. Incremental costs for most equine and 

poultry enterprises are expected to be minimal due to current identification requirements related 

to, respectively, testing for equine infectious anemia and National Poultry Improvement Plan 

movement documentation. The vast majority of the commercial poultry industry participates in 

NPIP. We address concerns raised by backyard poultry growers by exempting chicks that move 
23

interstate from hatcheries, and clarify that all livestock moved to custom slaughter are exempt. 

These adjustments ensure that the rule will result in minimal cost, if any, to the backyard poultry 

growers. Impacts of the rule for States and Tribes are considered in terms of the need to upgrade 

data maintenance and retrieval capabilities in order to carry out the activities needed to trace 

livestock. Lastly, preliminary projections are presented of Federal funding that will be needed to 

implement the rule.

Cattle Enterprises

Unless specifically exempted, livestock moved interstate will have to be officially 

identified and accompanied by an ICVI or other acceptable documentation. Types of official 

individual animal identification numbers and group/lot identification numbers (GIN) are 

specified in the Animal Disease Traceability General Standards document that accompanies this 

rule. Cattle and bison required to be officially identified for interstate movement will be 

identified with either an official eartag or a GIN when appropriate.

Animal identification and certification currently practiced 

An indication of the prevalence of current animal identification practices for adult cattle 

is provided in APHIS surveillance data for 2009 and 2010. Of a total of 156,952 cattle included 

in the survey (45,489 beef and 111,463 dairy), 46 percent had some form of an official USDA 

identification eartag (35 percent of beef cattle and 50 percent of dairy cattle surveyed). In 

addition, the survey noted a number of other types of identification used, including owner 

eartags, back tags, slaughter tracking eartags, and FSIS condemnation eartags.

Recent surveys by APHIS Veterinary Services, National Animal Health Monitoring 

System (NAHMS) regarding herd management practices of beef and dairy cattle producers also 

provide information on operators’ current animal health monitoring and recordkeeping. The 
24

NAHMS cow-calf survey (USDA APHIS 2008) found that two-thirds of operations used some 

form of individual animal identification on at least some cows, and nearly 80 percent of cows 

had some form of individual identification. Plastic eartags were the most common single type of 

individual cow identification for operations and individual cows (50.4 and 57.5 percent, 

respectively). Electronic identification or microchips were used on 0.8 percent of operations and 

1.2 percent of individual cows.

The proportion of cow-calf operations that used any form of individual animal 

identification ranged from 59.3 percent of operations with 1 to 49 cows, to 89.1 percent of 

operations with 200 cows or more. Plastic eartags were the most common type of individual

animal identification across all herd sizes.

Nearly half of cow-calf operations (46.7 percent) used some form of individual animal 

identification on at least some calves, and 64.8 percent of calves had some form of individual 

identification. The most common type of individual calf identification was a plastic eartag for

operations (37.7 percent) and individual calves (50.2 percent). Electronic identification or

microchip responders were used for calves on 0.7 percent of operations and 2.9 percent of 

individual calves.

About 40 percent of cow-calf operations with 1 to 49 cows used individual animal

identification on at least some calves, compared with about 60 to 70 percent of operations in the

other herd-size categories. As with cows, a plastic eartag was the most common type of 

individual animal identification for calves across all herd sizes.

The NAHMS dairy survey (USDA APHIS 2007) found that over 90 percent of dairy 

operations used some form of individual animal identification, and almost all cows (97.4 

percent) had some form of individual animal identification. Most operations (86.5 percent) used 
25

eartags on cows as a form of individual identification, and most cows (94.0 percent) had 

individual eartags. Various methods of electronic identification were used on 4.1 percent of 

dairy operations, accounting for 9.0 percent of cows. On operations that used individual animal 

identification, evaluating milk production and genetic improvements were the two most common 

reasons given (38.1 and 30.4 percent of operations, respectively).

These statistics on current animal identification practices support the expectation that 

incremental costs of official animal identification will be minimal for the majority of cattle 

enterprises. 

We are unable to determine the number of cattle for which official identification will be 

required. Relevant sources (Shields and Mathews 2003, USDA NASS 2010c) do not provide 

information on interstate livestock movements specific to the categories of cattle that will be 

directly affected by the rule. Livestock marketing information includes animals shipped to 

slaughter. While data on States’ inshipments exclude animals brought into a State for immediate 

slaughter, they include feeder cattle, which will be exempted from the identification 

requirements. In 2009, inshipments totaled 19,790,000 head; the Nation’s cattle and calf 

inventory totaled 93,701,200 head on January 1, 2010. We note that this estimate includes beef 

cattle younger than 18 months and excludes cattle moved interstate directly to slaughter. 

Under current regulations, animals are usually required to be accompanied by a shipper 

statement or health certificate when moving interstate. An APHIS or State representative or 

accredited veterinarian responsible for issuing a certificate of veterinary inspection must forward 

a copy of the certificate to the State animal health official in either the State of origin or the State 

of destination. Many States also require entry permits, which can be oral or written.
26

An ICVI, like animal health certificates currently required in the CFR, is to have the 

following information: certificate number, species, number of animals, purpose of movement, 

address at which the animals were loaded for interstate movement, destination address, names of 

the consignor and the consignee and their addresses if different from above, and official 

identification number of each animal or group of animals moved that is required to be officially 

identified (or if the sending and receiving States/Tribes have agreed upon an alternative form of 

identification, a record of that identification). If animals moving under a GIN also have 

individual official identification, only the GIN will have to be listed on the ICVI.

All States already require a certificate of veterinary inspection for breeding cattle 

received from other States, with the information required including, as a minimum, the items 

described above for an ICVI. The ICVI requirements will simply replace existing interstate 

movement documentation requirements. Currently 48 States use ICVIs for feeder cattle.

Unit costs 

The Federal government will supply metal eartags and eartag applicators to States or 

Tribes free-of-charge for distribution to cattle operations, if resources allow.

2

 An eartag 

applicator can last for several years. Table 1 shows the incremental, or additional, costs of 

official animal identification for enterprises that either do or do not already identify animals 

using eartags as a part of their routine management practices. For producers currently using 

official identification, there will be no additional cost. Approximately 35 percent of beef cattle 

currently have official identification. These producers are referred to as Group 1 in Table 1.

 

2 The FY 2012 President’s Budget requests funding to pay for the eartags. The cost of an eartag is about 10 cents. 

An estimated 30 million cattle are shipped interstate per year , including 19.5 million that are shipped without 

official identification (see table 3). We therefore estimate the total cost of official eartags needed because of the rule 

to be $3.0 million per year. This cost will be offset to some extent by reduced costs to animal disease programs that 

currently pay for tags for cattle. If in the future, federally appropriated funds were not available to purchase these 

additional eartags, those producers not currently using official identification will purchase eartags, which will 

increase total producer costs by about $1.95 million. 
27

An estimated 45 percent of beef cattle have some type of identification for management purposes 

other than official identification. These producers are referred to as Group 2 in Table 1. The 

only additional costs for producers who are already tagging their cattle, but not using official 

identification, will be the labor required to attach the official animal identification during the 

same tagging event. As shown in table 1, this incremental cost is estimated to be $0.18 per head. 

Chute operation costs, as well as costs of shrinkage and possible human or animal injury, are 

costs that the producer will bear in any case. Management style, working weights, and other 

factors can contribute to variations in costs, including shrinkage costs, from operation to 

operation.

The age at which cattle are identified using eartags, for those operations that do so, varies 

from one enterprise to the next. For management purposes, some producers tag young calves or 

heifers just before they are bred, while other producers do not tag their cattle until they are nearly 

ready for sale. Operations that tag calves at birth will have considerably lower costs associated 

with shrinkage compared to operations that tag their cattle just before the time of sale. The rule 

does not specify at what age cattle will need to be officially identified, only that it be 

accomplished prior to interstate movement for those animals that will require official 

identification. Official identification could provide additional benefits to an operator, depending 

on the type of managerial information included on the eartag beyond the requirements set forth 

in the Animal Disease Traceability General Standards document.

For the remaining 20 percent of cattle that will not be eartagged if it were not required by 

the rule, the chute operation costs and the costs of shrinkage and possible injury (as well as the 

cost to attach the eartag) are fully attributable to the rule. These producers are referred to as 

Group 3 in Table 1. The cost per head of official animal identification is estimated to range 
28

between $1.68 and $4.68. The cost of tagging may be somewhat underestimated, since some 

period of time (5 to 15 minutes set-up time) will be needed to prepare for tagging. These cost 

estimates represent the cost if tagging were carried out independent of other cattle management 

activities. In practice, producers could choose to combine tagging with routine activities such as 

vaccinating or de-worming cattle. By combining tagging with other activities, producers will

incur costs similar to Group 2 producers, $0.18 per head. We anticipate that a significant portion

of Group 3 producers will choose to change their management activities in this manner.
29

Table 1. Estimated producer incremental cost of official animal identification for 

cattle 

Group 1: 

Incremental cost 

if official 

identification is 

currently used1

Group 2: 

Incremental cost 

when incorporated 

into routine 

management 

practices2

Group 3: 

Incremental cost 

when not 

incorporated into 

routine management 

practices3

Per Head

Metal eartag4 Zero Zero Zero

Eartag applicator5 Zero Zero Zero

Chute operation6 Zero Zero $1.00 to $2.50

Labor to attach the 

eartag7

Zero

$0.18 $0.18

Shrinkage and 

injury8

Zero Zero $0.50 - $2.00

Total Zero $0.18 $1.68 to $4.68

1 Estimated to comprise 35 percent of beef cattle. 2 Estimated to comprise 45 percent of beef cattle. 3 Estimated to comprise 20 percent of beef cattle. 4 Metal tags with numbers conforming to the National Uniform Eartagging System 

(NUES) will be provided at the direction of State and Tribal animal health officials. 

5 Eartag applicators will also be provided to producers for NUES tags.

6Based on data presented in the benefit-cost study. For establishments that do not 

routinely eartag livestock, tagging may take place at an approved tagging site. 

7 Based on a median farm worker’s hourly wage (farm and ranch animals) of $10.42, and 

assuming 1 minute is required to tag 1 animal (U.S. Department of Labor, 

http://www.bls.gov/oes/2009/may/oes452093.htm).

8 Assumed upper-bound shrinkage cost is $1.90, based on a weight loss of about 0.2 

percent, or about 2.5 pounds for a cow weighing 1,270 pounds, and a price of $950 

(http://www.ams.usda.gov/mnreports/gl_ls132.txt). Potential injury costs comprise the 

balance of this cost category. A range of $0.50 to $2.00 is used, allowing for subsequent 

gain by livestock on feed. Shrinkage may be less of an issue for replacement breeding 

stock, but potential injury costs will be an issue in all instances. 

The rule will establish the ICVI as the primary document for the interstate movement of 

livestock. Other documentation for interstate movement, as agreed upon by two or more 

States/Tribes, will be acceptable. The rule will also define the minimum information required to 

be on an ICVI, as described above. 
30

An ICVI will be issued only by a State, Federal, or accredited veterinarian. A copy of the 

ICVI (or other interstate movement document used in lieu of an ICVI or permit) will be required 

to be forwarded by the veterinarian to the State animal health official of the State of origin within 

5 working days. The State of origin, then, will be required to forward a copy of the ICVI to the 

State of destination within 5 working days.

Table 2 compares the incremental cost of acquiring an ICVI by enterprises that are 

already using certificates of veterinary inspection for moving cattle interstate other than for 

immediate slaughter and enterprises that are not doing so. For the former group, the incremental 

cost may be additional charges by the veterinarian who is issuing the ICVI, if more time is 

required than when currently certifying livestock for interstate movement to meet States’ 

requirements. Currently all 50 States require a certificate of veterinary inspection for breeder 

cattle and 48 States require one for feeder cattle. We estimate the incremental cost per head to 

range between zero and $1.00.

For operations that will not otherwise have cattle certified for interstate movement, there 

will be the chute operation costs and the costs of shrinkage and possible injury for animals that 

will need individual animal identification recorded on the ICVI, as well as the costs of an 

accredited veterinarian. We estimate the incremental cost per head to range between $4.00 and 

$7.50 for cattle that need individual official identification recorded and between $1.00 and $3.00 

for animals not required to have their identification recorded.

Cattle and bison under 18 months of age (excluding sexually intact dairy cattle, cattle and 

bison used for rodeo, exhibition, or recreational purposes) will not need to be identified, but will

still require an ICVI for interstate movement. The ICVI will state the number and type of 
31

animals (e.g., 40 mixed steers and heifers) and include a statement such as, "No official 

identification required at this time."

Table 2. Estimated producer incremental cost of interstate certificate of veterinary inspection

(ICVI) for cattle 

Incremental 

cost for enterprises 

already utilizing 

certificates of 

veterinary inspection 

for moving cattle 

interstate other than 

for immediate 

slaughter

Incremental 

cost for enterprises 

not already utilizing 

certificates of 

veterinary inspection 

for moving cattle 

interstate other than 

for immediate 

slaughter

Per Head

Issuance of ICVI, 

including recording of 

the animal’s official 

identification number1

Zero to $1.00 $1.00 to $3.00

Chute operation2 Zero $1.00 to $2.50

Shrinkage and injury3 Zero $0.50 - $2.00

Total Zero to $1.00 $1.00 to $7.50

1 Issued by an APHIS representative, State or Tribal representative, or accredited veterinarian.

2 Based on data presented in the benefit-cost study. This cost only applies to cattle that will need to 

have individual animal identification recorded on the ICVI.

3 Assumed upper-bound shrinkage cost is $1.90, based on a weight loss of about 0.2 percent, or 

about 2.5 pounds for a cow weighing 1,270 pounds, and a price of $950 

(http://www.ams.usda.gov/mnreports/gl_ls132.txt). Potential injury costs comprise the balance of 

this cost category. This cost only applies to cattle that will need to have individual animal 

identification recorded on the ICVI. A range of $0.50 to $2.00 is used, allowing for subsequent gain 

by livestock on feed. Shrinkage may be less of an issue for replacement breeding stock, but 

potential injury costs will be an issue in all instances. 

The unit costs shown in tables 1 and 2 are generalized but indicative of their likely 

magnitude. Importantly, there are economies of size for both animal identification and ICVI 

activities. Costs per head will decrease as the numbers of animals officially identified and for 

which ICVIs are issued increase. Cattle enterprises range widely in the equipment that they will

have available for the animal restraint necessary for eartagging and recording animal 
32

identification for the issuance of an ICVI. Larger operations that regularly tag cattle for 

management purposes are more likely to have permanent chutes, and smaller operations may 

make use of portable chutes or take their cattle to a tagging site when it is necessary to acquire a 

movement certificate. If States currently require documentation other than ICVIs such as ownershipper statements or brand certificates and continue to accept these documents in lieu of an 

ICVI, as permitted by this rule, the ICVI requirement in this rule will not result in any additional 

costs.

As mentioned, USDA will bear the cost of the eartags and the eartag applicators as 

resources allow. The 10-cent metal eartags reflect USDA’s intent to rely on low-cost 

technology. Although the metal tags are inexpensive, they are more labor-intensive than 

electronic systems when reading and recording animal identification data. Depending on an 

operator’s management objectives, a different type of eartag, including ones that support 

automated data capture, may be chosen. 

Unit charges for the services of an accredited veterinarian for issuing an ICVI will vary, 

depending on the number of ICVIs issued at a particular location and the travel time required. 

The incremental cost ranges shown in table 2, up to $1.00 for enterprises already using

certificates of veterinary inspection for moving non-slaughter cattle interstate and from $1.00 to 

$3.00 for enterprises not already doing so, represent the additional inspection and ICVI recording 

costs that may be charged in most instances. 

Costs of retagging of cattle moved interstate will be much the same as the tagging costs 

shown in table 1. A State or Tribal animal health official or an area veterinarian-in-charge can 

authorize the replacement of lost eartags or ones that have deteriorated or are otherwise not 

usable. To facilitate traceback, records will need to be kept when official identification devices 
33

are replaced under such circumstances. We observe that since most beef cattle under 18 months 

will be exempt from the traceability regulations, the need to retag cattle received by 

backgrounding operations may be relatively infrequent.3

Producers with only several head of cattle have various options to align with the 

identification requirements and to minimize their costs. Some may elect to officially tag calves 

at a young age when tagging can be done before a chute and corrals are needed to work the 

animals. When calves are older, many producers will likely officially identify their calves when 

they work the animals for other routine management practices such as vaccinating or deworming. Producers that sell at markets within their State can determine if they want to assume 

the responsibility of having their cattle eligible for interstate movement. If so, producers unable 

to tag their own animals may have calves tagged at a market that provides tagging services. The 

tagging and related marketing arrangements provided by auctions and markets to consigners will 

likely vary among regions of the country.

Total costs

Enterprises having the estimated 35 percent of cattle currently official identified will not 

incur any additional costs of tagging. Operators having the estimated 45 percent of cattle 

currently identified with some type of tag other than official identification will incur an estimated 

cost of $0.18 per head. The remaining 20 percent of operations that do not currently use eartags

will incur an estimated cost of $1.68 to $4.68 per head. As an example, if an operator were to 

move 20 head interstate, there will be no additional identification cost if the cattle are already 

 

3 Backgrounding refers to an intermediate stage of beef production that lasts for several months before the cattle are 

moved to a feedlot. During the backgrounding period—when the animals eat roughage and/or light energy rations 

or graze pasture (native grass or winter wheat)—producers decide when to place them in feedlots to fatten for 

slaughter, based on market conditions and forage availability. 
34

officially identified. If they would normally be tagged but not officially identified, the total 

incremental cost is estimated to be $3.60 for a herd of 20 head. If the operator would not 

otherwise tag the cattle as a routine management practice, then the total incremental cost of 

official identification is estimated to range from $33.60 to $93.60 for the 20-head herd. The 

latter group of operators could improve the health and value of their herds by conducting other 

management practices that require using a chute, such as vaccinating and de-worming, at the 

same time that the cattle are officially identified. 

For the same example, if the 20 head of cattle were already being moved interstate with a 

certificate of veterinary inspection, then the total incremental ICVI cost is estimated to range 

from between zero and $20. If the cattle will not need a certificate of veterinary inspection for 

interstate movement if it were not for the rule, the total incremental cost will range between an 

estimated $20 and $150. The high-cost estimate will be incurred only if animals need to be 

worked in a chute specifically for the purpose of issuing an ICVI. Clearly, expected impacts of 

the rule depend on current identification practices and movement documentation. These costs 

could be different for cattle moved from and to States or Tribes that accept documentation other 

than ICVIs.

About 74 million cattle and calves were sold in 2007. Approximately 20 million head 

move interstate as breeding animals and feeders. Only a portion of the 20 million head will be 

affected by this rule, because cattle under 18 months of age will not require official 

identification. Conservatively, however, we include the full 20 million head in our cost

calculations, given the uncertainty surrounding these statistics. We do not have information on

the number of cattle moved interstate directly to slaughter, but estimate it to be about 10 million 

head, based upon USDA NASS “Meat Animals Production, Disposition, and Income 2009 
35

Summary” data. Thus, a total of 30 million head or about 40 percent of cattle and calves sold are 

assumed to move interstate. Based on this quantity, we estimate total costs of official 

identification.

Table 3 shows the estimated total costs if all producers were to continue current 

management practices. For the operations already using official identification, there will be no 

additional animal identification cost attributable to this rule. For the 45 percent of operations 

using some tagging method but not using official identification, we estimate the incremental cost 

of tagging to be $2.4 million. For the 20 percent of operations that do not currently use any 

tags, we estimate the incremental cost of tagging will range from $10.0 million to $28.1 million

if they were to conduct tagging as an activity separate from other routine management practices. 

Total annual costs of official identification for cattle are estimated to range between $12.5 

million and $30.5 million.

 

Table 3. Estimated costs of official identification with current management practices

Estimated 

Number of Cattle 

Moving Interstate

Incremental 

Cost, Low Estimate1

Incremental 

Cost, High Estimate

Using Official 

ID 10,500,000 $0 $0

Tagging but not 

using official ID 13,500,000 $2,430,000 $2,430,000

Not tagging 6,000,000 $10,080,000 $28,080,000

Total 30,000,000 $12,510,000 $30,510,000

1 The incremental costs are those costs of official identification that are attributed to this rule.

Table 4 shows the estimated total cost of official identification with modified 

management practices. As discussed in the Unit Costs section, a significant portion of the 
36

producers who are currently not tagging can reduce the cost of tagging by combining it with 

other routine cattle management activities. Under modified management practices, producers 

will choose to combine tagging with other routine activities such as vaccinating or de-worming 

cattle, thereby avoiding the costs associated with working cattle through a chute an additional 

time. After considering public comments, we have increased the estimated cost of this second 

scenario in this Final Regulatory Impact Analysis. We recognize that all producers may not

combine tagging with other management activities and therefore some will continue to incur 

higher costs.

Table 4. Estimated costs of official identification with modified management practices

Estimated 

Number of Cattle 

Moving Interstate

Incremental 

Cost, Low Estimate1

Incremental 

Cost, High

Estimate

Using Official 

ID 10,500,000 $0

Tagging but not 

using official

ID

13,500,000 $2,430,000

Not currently 

tagging 

Incorporate 

Tagging 2,400,000 $432,000 $432,000

Use tagging 

service 3,600,000 $6,048,000 $16,848,000

Total 30,000,000 $8,910,000 $19,710,000

1 The incremental costs are those costs of official identification that are attributed to this rule.

The additional cost of ICVIs in a traceability system will be minimal because all 50 

States currently require a certificate of veterinary inspection for breeder cattle and 48 States 

require a certificate of veterinary inspection for feeder cattle. The rule will impose no additional 
37

costs for an ICVI for breeder animals, which make up about 56 percent of the national herd 

(2007 Census of Agriculture). For feeder cattle moving to any State other than California or 

Texas, there will be no additional cost for ICVIs. Approximately two million cattle are moved

into California and Texas. If cattle shipped into these two States required an ICVI, the additional 

cost will range from an estimated $2.0 million to $3.8 million, if the individual animal 

identification number is recorded. We anticipate that States not currently requiring ICVIs may

continue to accept other documentation such, as owner-shipper statements or brand certificates, 

as permitted by this rule, in which case there will be no additional costs for movement

documentation. However, we include these possible additional costs of movement 

documentation in our private-sector total cost estimates. 

As stated previously, cattle and bison under 18 months of age (excluding sexually intact 

dairy cattle, cattle and bison used for rodeo, exhibition, or recreational purposes) will not need to 

be identified, but will still require an ICVI for interstate movement. The ICVI will state the 

number and type of animals (e.g., 40 mixed steers and heifers) and include a statement such as, 

"No official identification required at this time."

The combined annual costs of the rule for cattle operations of official identification and 

movement documentation are estimated to range between $14.5 million and $34.3 million, 

assuming official identification will be undertaken separately from other routine management 

practices; or between $10.9 million and $23.5 million, assuming that some tagging will be 

combined with other routine management practices that require working cattle through a chute.

Interstate Movement of Horses and Poultry 

There are approximately 4.3 million on-farm horses and other equines (2007 Census of 

Agriculture). USDA does not count horses and other equine species on nonfarm operations. The 
38

American Horse Council Foundation published an estimate of the U.S. horse inventory for 2003 

based on a survey conducted by Deloitte Consulting, LLC. The Deloitte estimate was a total of 

9.2 million horses.4

 Among livestock, horses are unique in that they live longer, are generally 

more valuable, and are transported interstate more often. Many horses are routinely identified 

for breed registries, horse identification services, or to ensure the integrity of the racing industry. 

There are approximately 2.2 million tests conducted annually for equine infectious 

anemia (EIA). Testing for EIA is a State requirement for all interstate movement and in some 

States for intrastate movement as well. Horses must be identified on the requisite EIA testrelated paperwork. When horses move interstate to attend shows or exhibitions, registration is 

required upon entry. Accordingly, event officials are able to track horses moving interstate to 

the farm of origin. 

In this rule, horses and other equines moved interstate will be required to be accompanied 

by an ICVI or other interstate movement document, as agreed to by the States or Tribes involved 

in the movement. Because horses moving interstate must already be tested for EIA and be 

identified in the test-related paperwork, the change from current to the requirements will be 

relatively small. In some cases the additional cost may be zero. In other cases, the additional 

cost of the ICVI may range from an estimated $4.00 to $7.50. If 2.2 million additional ICVIs 

were issued in addition to the EIA paperwork, the total additional cost could range from $8.8 

million to $16.5 million. The 2007 Census of Agriculture estimates the market value of horses 

and equines sold to total $2 billion. This understates the total value of horses and other equine 

species since it only considers those animals sold.

 

4 The large difference between the USDA-NASS estimate and the Deloitte estimate derives from differing listdevelopment procedures and adjustment procedures for missing data. 
39

In 2009, total U.S. production of broiler meat was 35.5 billion pounds with a retail value 

of $44 billion. Poultry moved interstate will be required to be accompanied by an ICVI unless

they are from a flock participating in the National Poultry Improvement Plan (NPIP) and are 

accompanied by the documentation required under the NPIP regulations or they are moved

directly to a recognized slaughtering establishment. An ICVI will not be needed if the poultry

are moved from the farm of origin for veterinary medical examination, treatment, or diagnostic 

purposes and either returned to the farm of origin without change in ownership or euthanized and 

disposed of at the veterinary facility. 

The documentation requirement will not result in any additional costs for poultry 

enterprises that participate in NPIP. Poultry moved interstate to live bird markets (LBM) will

need to have an ICVI or other documentation as agreed to by the States. Live bird markets are 

concentrated in the Northeast, specifically in New York and New Jersey. There are about 109 

LBM’s in New York and New Jersey with 191 suppliers located in 12 different States. Both 

New York and New Jersey currently require movement documentation for poultry moving to 

live bird markets. Southern California has the second biggest concentration of LBM’s. There 

are about 35 LBM in southern California and fewer than 50 in the entire State. It is estimated 

that there are 12 to 15 producers who supply poultry for LBM in southern California. Other 

areas of the country have few live bird markets. 

The period of highest LBM demand is from November through February. In New York

and New Jersey, approximately 700,000 birds circulate through the market during that time. By 

comparison, the southern California LBM handles about 30,000 birds in that same time. During 

non-peak months, the daily population of birds in Southern California LBM is approximately 

8,300 live birds (Cardona et al. 2009).
40

APHIS does not have an estimate of the possible costs of the rule for enterprises that 

move poultry interstate to the live bird markets if ICVIs were to be required. If New York and 

New Jersey maintain current requirements for movement documentation, the rule will not result 

in additional costs. 

States and Tribes

Expected costs of the rule for States and Tribes are related to changes in their animal 

disease traceability activities. States and Tribes bear responsibilities for the collection,

maintenance, and retrieval of data on interstate livestock movements. While these 

responsibilities will be maintained under the rule, the way they are administered will likely 

change. Federal funding, as available, will be allocated to assist States and Tribes in making the 

necessary data collection, maintenance, and retrieval advancements. 

Under the rule, after receiving a copy of an ICVI forwarded by the APHIS or State 

representative or accredited veterinarian who issued it, the State animal health official of the 

State of origin will be required to then forward a copy to the State animal health official of the 

State of destination within 5 working days. The 5-day limit for forwarding is intended to 

facilitate a traceback and/or trace forward investigation if an animal moved interstate in 

accordance with the regulations were found to be suspect or affected.

This rule will require that any State, Tribe, accredited veterinarian, or other person or 

entity who distributes official identification devices maintain for a minimum of 5 years a record 

of the names and addresses of anyone to whom the devices were distributed. We will also 

require that approved livestock facilities keep for a minimum of 5 years any ICVIs or alternate 

documentation used in lieu of an ICVI, for covered livestock that enter the facilities. The 5-year 

requirement for maintaining records of official identification devices and ICVIs or other animal 
41

movement documents is necessary because certain animal diseases, such as tuberculosis and 

bovine spongiform encephalopathy, have very long latency or incubation periods, which can 

make traceback efforts quite challenging. Such diseases may not manifest themselves until 

several years after it was officially identified and/or moved interstate. The recordkeeping 

requirements will enhance our ability to conduct traceback investigations of infected and 

exposed animals, even in cases where the disease that the animal has contracted or been exposed 

to has a very long latency period. 

Current bovine tuberculosis regulations require dealers who purchase, deal in, or sell 

cattle or bison; or who act as a commission representative or broker; or who operate and conduct 

an auction in which cattle or bison are sold to maintain records for a period of 5 years.5 Because 

they have an existing recordkeeping system, we do not anticipate significant costs for 

maintaining a record of ICVIs or alternate documentation. We anticipate that accredited 

veterinarians will charge a price for their services that is adequate to cover the cost of any 

recordkeeping they do with respect to distribution of official identification devices. Federal 

funding (described below) will be available to States and Tribes to develop and implement an 

animal traceability approach. These funds may be used to enhance recordkeeping if needed. 

Improvement by States and Tribes of their animal disease traceability capabilities, as 

envisioned, will require resources to increasingly automate their data systems to provide 

electronic retrieval of ICVI data, which will result in major advances in animal disease 

management. Data-entry costs will be incurred, but systems will be able to better facilitate the

rapid retrieval of animal movement information, in contrast to the relatively inefficient, paperbased process that is now found in many States.

 

5 USDA APHIS 91-45-011 Bovine Tuberculosis Eradication Uniform Methods and Rules, Effective 

January 1, 2005, pg. 11-12.
42

Federal resources will be used to fund cooperative agreements with States and Tribes to 

implement the animal disease traceability plan. USDA expects that the States will match 

approximately 20 percent of the funds provided to them either through funds or in-kind 

contributions. For FY 2012, the projected appropriated Federal funding is $14.2 million (table 

5). Of this amount $1.9 million is for information technology and $9.6 million is for field 

implementation. A 20-percent share from the States will be about $2.3 million. These funds will

finance information technology improvements, field implementation, and program 

administration. With Federal assistance, gains from increased efficiencies of animal disease 

traceability by States and Tribes are expected to outweigh State- and Tribe-incurred costs. 

In accordance with the Paperwork Reduction Act, the preamble to the rule describes the 

information collection or recordkeeping requirements contained in the rule. These requirements 

will be primarily borne by State, Tribal, and territorial animal health officials; accredited 

veterinarians; livestock market operators; and harvest facility employees. The Paperwork 

Reduction Act section estimates the time required to meet the requirements of the rule and asks 

for public comment.

Federal Funding

Table 5 shows the estimated Federal spending plan to develop and implement the animal 

disease traceability approach for fiscal year 2012, which includes carryover funding from 

previous years. These estimates are Federal costs only, and a significant portion of these funds 

will be provided to the States and Tribes. As mentioned, USDA expects that the States will

match approximately 20 percent of the funds provided to them either through funds or in-kind 

contributions. This assumption is based on contributions of States toward current and past 

cooperative agreements in support of animal disease traceability.
43

Table 5. Projected Federal appropriated funding for supporting animal disease 

traceability activities, fiscal year 2012

FY 2012

System funding (information technology) $1,900,000

Field implementation $9,611,600

Program administration $2,729,400

Total $14,241,000

 

Among implementation costs will be the recording of animal identification numbers 

retired at slaughter. In estimating this cost, we assume eartag numbers will be entered at a 

federally funded central tag processing center. APHIS estimates the cost of tag retirement and 

data entry will be about $0.24 per tag. The aggregate cost is estimated to be $1.7 million per 

year.6 

Rule Elements that will lessen the Cost Burden for Producers

Enterprises that move their cattle interstate will bear certain costs when the rule becomes 

final, although, as noted, incremental costs for many operations may well be minimal. We 

identify here several elements of the rule that will further lessen the cost burden. A central tenet 

of the regulatory philosophy that underlies this rule—namely, allowing States, Tribes, and 

producers to find and use the approaches to traceability that work best for them—will enable 

entities to seek and employ low-cost means of achieving the rule’s objectives. For example, any 

two or more States or Tribes will be allowed to agree upon and use any form of animal 

identification for interstate movement of cattle under the regulations.

The collaborative manner in which the rule’s implementation is intended to advance will

also help to minimize operational burdens. An advisory group that includes representation from 

 

6 The cost of $0.24 is for manual data entry with double entries to reduce errors. The estimated number of 

tags retired each year is 7 million, including slaughtered and rendered cattle.
44

APHIS, States, Tribes, and industry will offer recommendations on issues relating to traceability

and provide feedback on the effectiveness of various elements of the traceability program.

In addition to individual identification of cattle and bison by means of official eartags, the 

rule will allow for the use of a group/lot identification number (GIN) when cattle or bison are 

eligible for interstate movement using group/lot identification. It will not be necessary to have 

the GIN attached to each animal, a provision in keeping with the rule’s emphasis on allowing for 

maximum regulatory flexibility.

The cost burden will also be lessened by the phase-in of the rule’s newly-defined 

identification numbers and systems and their similarity to existing numbers and systems. For 

example, the animal identification number (AIN) definition is similar to that in existing 

regulations. APHIS will phase-out existing AIN formats in order to achieve greater 

standardization of this numbering system, while providing producers with adequate notice of the 

change so they can work through existing inventories of eartags. This requirement will apply 

only to animals tagged one year or more after the effective date of the final rule. Producers will

not have to retag animals that had been officially identified using the USA or manufacturer's 

code AIN prior to that date. 

Existing regulations allow for the use of premises-based numbering systems on official 

eartags. Numbering systems using a premises identification number and a producer's production 

numbering system will continue to be allowed under the rule, but APHIS will expand the range 

of allowable location identifiers by defining a location-based numbering system.

There are two situations that are exempt from the traceability requirements: movement 

entirely within Tribal land that straddles a State line and the Tribe has a separate traceability 

system from the States in which its lands are located; and movement to a custom slaughter 
45

facility in accordance with Federal and State regulations for preparation of meat for personal 

consumption.

There are also several instances in which cattle and bison could be moved interstate 

without an ICVI. These situations include:

• Movement as part of a commuter herd 7with a copy of the commuter herd agreement;

• Movement directly from one State through another State and back to the original State; or

• Movement to an approved tagging site, provided that the cattle and bison are officially 

identified there before they are commingled with cattle and bison from other premises.

Expected Benefits

The purpose of the rule is to improve livestock traceability in the event that disease is 

found. Benefits of improved tracing capabilities will extend to private producers in terms of the 

health of their own animals and the preservation of domestic and international markets. States, 

Tribes, and the Federal government will benefit from reduced animal disease management 

expenditures when there is a disease outbreak, as well as through general gains to the economy 

that derive from the establishment of improved animal health safeguards.

In the first section that follows, we examine the direct benefits of improved traceability 

by considering public and private cost savings expected under the rule. The tracing process is 

described. Given the variety of diseases traced, case studies are presented to illustrate the types 

 

7 In this rule, a commuter herd is defined as a herd of cattle or bison moved interstate during the course of normal 

livestock management operations and without change of ownership directly between two premises, as provided in a 

commuter herd agreement. A commuter herd agreement is defined as a written agreement between the owner(s) of a 

herd of cattle or bison and the animal health officials for the States and/or Tribes of origin and destination specifying 

the conditions required for the interstate movement from one premises to another in the course of normal livestock 

management operations and specifying the time period, up to 1 year, that the agreement is effective. A commuter 

herd agreement will be subject to annual renewal. Meeting commuter-herd requirements in lieu of official

identification requirements will still provide adequate traceability in our view. 
46

of costs currently borne, their magnitudes, and potential savings. Due to the lack of specific 

information on economy-wide disease spread and impacts, the case studies illustrate the disease 

spread and economic impacts for selected instances where reliable information is available.

A second section highlights the market-related gains expected to be attributable to the 

rule. Improved animal disease traceability will help ensure that negative domestic and 

international market reactions to animal disease occurrences are minimized through efficient and 

quickly concluded epidemiological investigations.

Private and Public Sector Cost Savings 

The time required to trace an animal’s history of movement when there is disease 

discovery can largely determine the private and public costs that may be incurred. The 

traceability regulations will help to significantly reduce the amount of time needed to fully 

identify the number and location of animals that have been in contact with an infected animal. 

The longer it takes to complete the epidemiological investigation, the greater the number of 

entities and animals affected and the greater the geographical scope of an outbreak. It is critical 

that the tracing of animal movements be accomplished as quickly as possible.

Three cattle diseases are described and specific occurrences are used to demonstrate the 

benefits of traceability that will result from the rule. Specific disease occurrences are used to 

depict actual instances in which the tracing capability was hindered due to a lack of information

required by epidemiologists when conducting disease investigations. This is not to suggest that 

all disease investigations are inefficient due to a lack of information, but to reflect how these 

investigations become more complicated and affect more producers when good information is 

not readily available. Most concerning are outcomes when an investigation cannot quantify or 

specifically account for all at-risk livestock.
47

The specific characteristics of diseases lead to differences among epidemiological 

investigations. Knowing the history of the animal is critical when dealing with a highly 

contagious disease, in particular its prior locations and contacts with other animals. The type of 

information and its completeness affect how the disease investigation is conducted. Complete 

information can help animal health officials to minimize the number of herds tested. When 

information is limited or vague, the testing of herds is expanded to ensure all possible herds are 

included. When the herd owner cannot provide information indicating the source herd of an 

animal of concern, the herds of all potential suppliers of the subject animal must be tested. 

Numbers of animals needing to be tested can rapidly multiply as all potential sources are 

considered. With official identification and good records, tracing can be restricted to a specific 

herd(s).

The trace process

In order to fully appreciate the costs and benefits of animal disease traceability, it is 

important to understand how a trace is conducted and the critical points that determine the length 

of time a trace will take. Time is the critical factor in a disease investigation. The more time it 

takes, the more herds and animals become infected or exposed, the more man-hours are needed 

to respond, and the more the industry suffers from the loss or delay of sales. Illustration 1 

depicts a flow chart for a “typical” disease traceback of an infected animal from the point of 

slaughter. Keep in mind that there are myriad variables in tracing and every trace is unique. 

This illustration is intended to give the reader a basic understanding of the steps that are taken in 

a trace process that involves the cooperative efforts of State, Tribes, and Federal agencies.

The box at the top left represents an animal at an abattoir. At the plant, animal health 

officials spend a good deal of time collecting information and matching the information with 
48

samples that were positive. Records of the animals that were killed are examined, including 

physical descriptions of the live animals, carcass weights, body scores, the order in which the 

animals were processed, and prices paid.

One of the key pieces of information is the approved USDA backtag. This is very 

important in tracing animals to the last herd of residence and allows the investigation to proceed 

towards the herd of origin. Most adult animals presented for slaughter within one week of 

tagging have official backtags at the time of slaughter. If the movement to slaughter takes more 

than a week, the majority of the backtags are lost. Yet, the value of backtags is apparent, as an 

estimated 90 percent of adult animals arrive at slaughter with USDA approved backtags. When 

an official USDA backtag is correlated with the animal of interest, the investigators can quickly 

identify the livestock market or dealer that supplied the animal to the abattoir.

If the backtag is not available, abattoir records are used to try to determine who supplied 

the animal. If the animal of interest was part of a group of animals from a single source that 

were penned together and slaughtered at the same time, the whole group can be traced back to 

the supplier. If the animal was commingled with animals from a variety of sources, the 

investigation must consider multiple potential suppliers.

At the livestock market or dealer, the time required to determine who the consignor of the 

animal was and where the animal resided prior to sale depends on the availability of appropriate 

records. If weight tickets, sales slips, and records of origin, identification, and destination are 

available, it can take one hour or less to complete the visit if a backtag is available, and a few 

hours if not. Currently, markets are required to maintain records of livestock transactions for 2 

years. Some of our traces involve movements through markets that took place more than 2 years 

prior. If the market records are not available or incomplete, the investigator may need to 
49

examine additional records and go to other sources of information including banks, post offices, 

county assessor offices, brand inspection offices, and law enforcement. In this case, the last herd 

of residence is found only after days, weeks, or not at all.

Another critical piece of information to aid in a disease investigation is the official eartag. 

If available, the eartag number can be traced to the herd in which the tag was applied and allow 

the investigation to proceed towards the animal’s place of termination. The length of time 

required varies from minutes to days depending on how the records of official eartags are 

maintained. Regardless of how the records are kept, the information provides another means of 

locating additional herds that may be affected. When an animal has both an approved backtag 

and an official eartag, an investigation can proceed from two different directions simultaneously 

and reduce the total time required by half.

When animals are tested for official disease control program purposes, an official eartag 

is required and recorded on the test chart. Similarly, when adult animals are moved interstate, 

the official eartag is typically recorded on an ICVI. Examination of these types of records may 

identify additional herds in which the animal of interest resided.
50

Illustration 1. Cooperative Federal, State, Tribal tracing with official identification, backtag, and 

records

Illustration 2 shows that, without an official eartag, the only route for an investigation to 

take is through the livestock market. If records are not available, the source herd may never be 

found. Even if the herd is found, the time required to conduct the trace is expected to be at least 

twice what it would be if there were an official eartag because tracing forward from the source is 

not possible. It is clear that additional investigation routes through the use of eartag records and 

internal databases are essential.
51

Illustration 2. Cooperative Federal, State, Tribal tracing without official identification

and records

To summarize, the critical points in the investigation include:

1. Is an official backtag available?

a. If “yes” 

i. The time to trace to the market is minimal.

ii. An investigative route to the last herd of residence is possible

iii. The time at the market determining the last herd of residence is less than 

an hour.

b. If “no” 

i. The time to trace to the market is longer.

ii. The time at the market is at least several hours.

2. Is an official eartag available?

a. If “yes” 

i. An investigative route to the herd where the tag was applied is available
52

ii. An investigative route to additional herds via internal database records is 

available.

b. If “no” these routes are not available and the time to conduct the trace could be 

doubled.

3. Are good market records available?

a. If “yes” the time at the market is less than an hour.

b. If “no” the time at the market is hours and other external sources of information 

may be required increasing the time to days or weeks.

4. Are records of official eartag distribution, official tests, and ICVIs easily searchable?

a. If “yes” the time to find additional herds may be minutes or hours.

b. If “no” the time to find additional herds may be hours, days, or weeks.

The rule will require all cattle over 18 months in interstate movement with some 

exceptions to be identified with official eartags. This will lead to an increase in the number of 

cattle with official identification at slaughter and provide animal disease investigators with the 

traceability route to additional herds. This addresses critical point #2.

One exception in the initial phase of implementing the rule is to allow USDA-approved 

backtags in lieu of official eartags for cattle moving directly to slaughter. This approach will 

help facilitate the use of backtags so cattle arriving at slaughter can be traced to the last herd of 

residence. This addresses critical point #1.

The rule has a recordkeeping requirement of 5 years for markets and slaughter 

establishments. The current requirement is 2 years. Cattle have a life span of several years. The 

new requirement will allow for more tracing information to be reported. This addresses critical 

point #3.
53

The rule includes the requirement for States and Tribes to maintain a record of official 

eartag distribution for at least 5 years. That will help our disease investigators quickly determine 

the herd in which an animal of interest was identified. Similarly, the rule will require States and 

Tribes to maintain a record of ICVIs issued for 5 years. These two requirements will address 

critical point #4.

Current animal diseases of concern in cattleTuberculosis

Tuberculosis (TB) is a disease of concern today and provides a good reference to 

demonstrate the need for traceability. TB is a contagious disease of both animals and humans. 

Bovine TB can be transmitted from livestock to humans and other animals. No other TB 

organism has as great a host range as bovine TB, which can infect all warm-blooded vertebrates. 

Bovine TB has affected animal and human health since antiquity. Once the most prevalent 

infectious disease of cattle and swine in the United States, bovine TB caused more losses among 

U.S. farm animals in the early part of the 20th century than all other infectious diseases 

combined.

TB eradication efforts have been quite successful in the United States. Still, since 2002 

the United States has spent over $200 million on indemnities and control activities for diseased 

or suspect cattle and that amount is expected to rise as eradication efforts continue. In Michigan, 

the disease has seriously affected the State’s livestock industry. The projected impact of the 

disease on Michigan’s producers is estimated at $121 million over 10 years. 

In fiscal year (FY) 2010, 13 TB-affected cattle herds were confirmed in the United States. 

TB-affected herds were identified in Colorado (2), Kentucky (1), Michigan (5), Mississippi (1), 

Nebraska (1), Ohio (1), and South Dakota (2). The States of Kentucky, Mississippi, Ohio and 

South Dakota held accredited free status for TB for over 20 years. All affected herds identified 
54

in FY 2010 were depopulated with Federal indemnity except for two beef herds in Michigan that

are undergoing test-and-remove herd plans. The Ohio herd was detected during a dispersal sale 

and is no longer in existence.

From October 2010 through March 2011, six TB-affected cattle herds were confirmed in 

the United States. TB-affected herds were identified in Colorado (4), Indiana (1), and Michigan 

(1). All the affected herds in Colorado have been depopulated with Federal indemnity, and the 

disposition of the herds in Indiana and Michigan are pending.

The epidemiological investigation of animals found infected at slaughter is still the main 

method that is used to locate TB herds. Traceback investigations are conducted from the 

slaughter plant.

Brucellosis

Brucellosis is a contagious disease, caused by bacteria of the genus Brucella that affects 

both animals and humans. The disease mainly affects cattle, bison, and swine; however, goats, 

sheep, horses, and humans are susceptible as well. In its principal animal hosts, it causes loss of 

young through spontaneous abortion or birth of weak offspring, reduced milk production, and 

infertility. There is no economically feasible treatment for brucellosis in livestock. In humans, 

brucellosis initially causes flu-like symptoms, but the disease may develop into a variety of 

chronic conditions, including arthritis. Humans can be treated for brucellosis with antibiotics.

All 50 States have been officially classified Class Free for bovine brucellosis since July 

2009, despite recent detections in a few States. During FY 2011, brucellosis was detected in four 

domestic cattle and bison herds in two States in the Greater Yellowstone Area (GYA)—two 

affected cattle herds and one affected privately owned bison herd in Wyoming, and one affected 

privately owned bison herd in Montana. All four herds are under quarantine with affected-herd 

plans, and intensive epidemiological investigations, including testing of area herds, are in 
55

progress. No epidemiological links have been identified among these herds. Brucellosisaffected wild elk may be the most likely source of infection for these herds.

In late January 2011, Texas disclosed a brucellosis-affected cattle herd, the first detection 

of brucellosis in a cattle herd in Texas in over 5 years. This herd was depopulated, and a 

thorough epidemiological investigation is in progress. The GYA remains our primary focus for 

brucellosis in livestock because the disease is endemic in GYA wild elk and bison. There is no 

indication that brucellosis has spread outside the GYA.

Bovine Spongiform Encephalopathy

Bovine spongiform encephalopathy (BSE), widely referred to as "mad cow disease," is a 

chronic degenerative disease affecting the central nervous system of cattle. BSE is a progressive 

and fatal neurological disease of cattle caused by an unconventional transmissible agent. BSE 

belongs to the family of diseases known as transmissible spongiform encephalopathies.

The incubation period (the time from when an animal becomes infected until it first 

shows disease signs) averages 4 to 6 years, although the period can be longer or shorter. 

Following the onset of clinical signs, the animal's condition deteriorates until it either dies or is 

destroyed. The process of deterioration usually takes from 2 weeks to 6 months. Currently, 

there is no test to detect the disease in live cattle; veterinary pathologists confirm BSE by 

postmortem microscopic examination of brain tissue or by the detection of abnormal prions in 

brain tissue. 

Four cases of BSE have been detected in the United States. The first case was in a cow in 

Washington State in 2003 that had been imported from Canada. BSE was subsequently detected 

in a 12-year-old beef cow in Texas in 2005, and in a 10-year-old beef cow in Alabama in 2006. 

Both of these indigenous cases were animals born before the feed ban implemented by the U.S. 

Food and Drug Administration in 1997. On April 24, 2012, USDA confirmed the nation’s fourth 
56

case of BSE in an animal that was sampled for the disease at a rendering facility in central 

California.

APHIS conducted BSE enhanced surveillance from 2004 to 2006. More than 830,000 

samples were tested. This was a one-time effort to detect BSE at a very low-level and to provide 

information about prevalence. The results indicated that the prevalence of BSE in the United 

States was low—less than 1 infected animal per million based on a population of 42 million adult 

cattle.8

The ongoing BSE surveillance program was launched in 2006 and has continued. The 

goal of this program is not only to meet the World Organization for Animal Health (OIE) 

benchmark of detecting 1 case of BSE in 100,000 adult cattle with 95 percent confidence, but 

also to meet the higher U.S. standard of detecting 1 case of BSE in 1 million adult cattle with 95 

percent confidence. Populations of cattle at higher risk for BSE have been targeted for 

surveillance, including but not limited to animals with central nervous system (CNS) signs and 

animals over 30 months of age condemned ante mortem at slaughter for CNS signs. More than 

40,000 samples have been collected and tested in each year of the ongoing BSE surveillance 

program. This sampling strategy has far exceeded the level of testing required to meet OIE and 

U.S. internal surveillance goals.9

Animal disease traceback investigations 

The following three tables summarize specific investigations for TB, brucellosis, and 

BSE occurrences.

 

8 http://www.aphis.usda.gov/publications/animal_health/content/printable_version/fs_BSE_ongoing_vs.pdf

9 http://www.aphis.usda.gov/newsroom/hot_issues/bse/surveillance/ongoing_surv_results.shtml
57

Table 5. Bovine tuberculosis 

Date Investigation Opened: March 2010 Investigation Status: Ongoing

Incident An adult cow (approximately 3.5 years) was slaughtered. The animal was part of a 

consignment from an auction market two days prior. On post mortem examination, the 

FSIS inspectors noticed lesions suggestive of a TB infection. The carcass was retained, 

tissues were collected, and tests were conducted. Four days later, National Veterinary 

Services Laboratories published a histopathology analysis with the diagnosis of 

Mycobacteriosis-compatible. The herd that marketed the animal before slaughter was 

found to be infected with TB. 

Method of 

Identification 

The only identification available on the infected animal was a backtag collected at 

slaughter that had been applied at the auction market.

Methods of 

Tracing

The auction market back tag was used to determine the consignor and in turn, the last farm 

location of the infected cow (or the index herd). Herd records of the index herd were

examined for the two-year period prior to the detection of infection to determine what 

animals had left the farm. Three markets were the primary means for the owner to dispose 

of his cull animals. As a result, most of the adult animals that left this herd were identified 

by a backtag that had been applied at one of the three livestock markets. Herd records, 

while limited, where used to help determine movement of young animals sold from the 

herd.

Investigative 

Summary

The index herd consisted of approximately 900 animals. A caudal fold test was conducted 

on some of the animals: 48/168 (29 percent) heifers and 165/498 (33 percent) cows were 

positive. A gamma interferon test was conducted on 165 heifers, and 105 of them were 

positive. The herd was depopulated and samples were tested, confirming the previous 

tests. 

A thorough review of available herd records determined that a total of 1,627 adult animals 

left the index herd as culls being sold at one of the three auction markets during the 

previous two-year period. Using the backtags applied at the markets, 1,505 (92.5 percent) 

adult animals reported slaughtered out of State were verified. The other 122 (7.5 percent) 

adult animals were only reported as slaughtered, but could not be verified due to lack of 

permanent identification. Without verification, the possibility remains that some of the 122 

adult animals may have been diverted from slaughter channels back to a farm.

Epidemiological tracing was conducted using the animal identification information 

recorded on the herd test chart to determine where animals that entered the herd came from. 

Official eartags from 5 States were noted. Subsequent tracing through those States 

provided evidence of animals of interest having been in 5 additional States for a total of 10 

States. Due to limited records, it was difficult to determine the locations of breeding and 

feeding animals from the index herd.

The tracing of one- to five-day-old calves proved to be much different. Owner records 

indicated that 259 calves had been sold from the premises during the two previous years, 

and they all lacked any type of identification. The movements were documented on a 

brand inspection form completed by the owner and did not contain addresses, descriptions 

and in many cases, the total number of animals removed from the premises on a specific 

date. The brand authority intended for producers to utilize tracking methods on these 

animals and to record them; however, this was not the case. 

In total, 57 of the 259 calves (22 percent) were located at other farms. These calves were 

disposed of and tested for TB. Five of the 57 calves each located on a different farm were 

found to be positive for TB. This resulted in those five farms being declared infected 

premises and subsequently depopulated. 
58

To date, the investigation has involved 426 locations in 12 States with 6 infected premises 

found.

Cost The disease investigation resulted in the depopulation of 1,139 animals on 6 infected 

premises including the index premises. USDA has paid $741,700 to producers for 

destroyed animals involved in this investigation. There were additional dollars paid for 

trucking and disposal that were not available. Estimated testing costs exceed $2 million.

It is estimated that this incident required an Animal Health Technician’s time two days per 

week for the past year. This time could easily have been reduced by 50 percent with 

adequate identification and records.

Testing costs in this case will exceed $2 million. We believe improved traceability as a 

result of the rule will reduce costs by between $600,000 and $1 million.

Impact As of March 2011, this incident was still ongoing. There were 426 different locations

investigated with approximately 10 percent of the locations having herds that were tested 

for TB. In some cases, the tracing was stopped due to the lack of adequate identification 

and movement records. This is unfortunate because of the nature of this aggressive strain 

of TB, and the fact that infected herds were found. 

There are still 122 cull breeding animals that are unaccounted for. We do not know if they 

were slaughtered as expected or if they returned to a livestock operation. The uncertainty 

undermines the credibility of traceability efforts.

Only 57 of the 259 calves (22 percent) were successfully traced, but they led to 5 infected 

premises. The inability to trace the remaining 198 calves causes serious concern and begs 

the questions: “What happened to the other 198 calves (88 percent), how many infected 

premises are left undetected, and how far has the infection spread?” While the cost of the 

investigation to date is significant, the inability to answer these questions quickly and 

accurately means sizable additional negative impacts as well as higher associated costs are

likely to result from this case.

Comparison with 

Rule on 

Traceability

The rule will require the identification of all dairy cattle moving interstate, regardless of 

age. Adult dairy cattle will be required to have the official eartags recorded on an ICVI. 

Producer and livestock markets will be required to keep a copy of movement records for 5 

years for all animals moving interstate. The amount of official identification and tracing 

information will increase significantly due to these activities.

There has been an average of 31 positive cases for the past 5 years. On average, one 

million animals are tested annually for TB. If testing for TB could be better targeted to the 

herds that had actual contact with animals of interest provided by identification and 

records, the system will be more accurate and efficient. Only the known herds of interest 

will need to be tested. If the number of animals tested was reduced, we estimate the 

government and producer sectors’ combined dollar savings associated with the testing 

alone will be between $1.17 million (25% reduction in testing) and $3.51million (75% 

reduction in testing) annually. (State and Federal costs are shown below; producer costs 

are detailed in Table 8.)

An animal disease traceability program allows for a more efficient use of resources as 

herds are tested based on clear documentation of their connection to the index animal. 

USDA or State employees perform most of the testing. As a result of fewer herds/animals 

tested, resource efficiencies are gained, and these employees will be available to fill 

mission critical activities in other areas. The potential values of these efficiencies are 
59

summarized in the following table based at differing levels of projected reductions in the 

number of animals requiring testing for TB.

Costs to States and the Federal Government

Average number of TB trace tests per year10 260,000

Average cost per head to test (requires handling animals twice) $10.0011

Estimated cost of TB testing (State and Federal) $2,600,000

Value associated with reduced number of animals requiring 

testing due to improved animal disease traceability 

 25% reduction $650,000

 50% reduction $1,300,000

 75% reduction $1,950,000

Table 6. Bovine brucellosis 

Date Investigation Opened: January 2011 Investigation Status: Ongoing

Incident Due to targeted animal disease surveillance, an adult bull at processing, moved interstate to 

an abattoir, was determined to be a reactor for bovine brucellosis. A disease investigation 

was initiated due to the classification of the official blood test.

Method of 

Identification 

The animal lacked an official animal identification number at the time of sampling. The 

bull was identified by carcass tag number on the slaughter plant kill sheet and associated 

with an owner.

Methods of 

Tracing

Kill sheet information provided at the abattoir served as the sole basis for conducting the 

investigation. In this case, the animal’s owner was also the feedlot owner where the animal 

was in residence prior to processing.

Investigative 

Summary

The investigation involved 155 bulls from two pens in one out-of-State feedlot that sourced 

animals from two different livestock markets in two additional States. 

As noted, the bulls had no official identification at processing and, correspondingly, the 

feedlot had no list of official animal identification for these animals. Brand inspection 

records retained by the feedlot accounted for 57 different brands for 149 of the bulls and 6 

animals with no brands. Feedlot records indicated the 155 animals could have been 

sourced from 4 different livestock markets. As a result, the 4 involved livestock markets 

have identified 40 potential source locations in one State and another 17 potential source 

locations in yet another State. Because the five involved States (one State was mistakenly 

involved initially) are large beef-producing States, and with an assumption of 125 head 

herd size, the investigation will potentially involve testing at least 7,100 head of cattle for 

bovine brucellosis. The investigation remained open as of March 23, 2011.

Cost Final costs have not been tabulated as the investigation is ongoing. With an estimated $20 

per head testing and personnel costs, this investigation will cost nearly $150,000, assuming 

no additional positives are found. This estimate does not include producer costs. If the 

reactor animal had been officially identified and the number recorded at the time of 

processing, the investigation could have been more focused with a potential cost savings of 

$120,000.

 

10 USDA, APHIS, Veterinary Services data for 2010. 11 Based on funds paid for fee-basis testing.
60

Impact More herds than needed were tested and the cost of testing alone is significant. The added 

cost to producers may be even greater in terms of gathering the herd to be tested and 

restricted opportunities to conduct business as usual. 

Comparison with 

Rule on 

Traceability

The rule will require cattle 18 months-of-age and older to be officially identified and 

accompanied by an ICVI when moved interstate. This will provide the tools to accurately 

and efficiently investigate the incident and conclude it with minimal impact to producers 

and taxpayers.

On average, 477 brucellosis reactor cattle have been identified annually for the past 5 years 

in the United States. Approximately 25 percent, or 120, of these cases require a similar 

degree of investigation to this case. Based upon BSE surveillance data referenced in table 

9 of this document, approximately 60 percent of adult cattle lack official identification. It 

is estimated that 72 comparable brucellosis investigations are conducted annually without

information readily available for effective and efficient official animal identification. This 

example shows an investigation that had potential costs savings of $120,000. 

Conservatively assuming that 72 comparable investigations could save half that amount, 

the estimated savings would be $4.32 million (72*$60,000). Additional savings to the 

cattle industry as well as States and Tribes will also be realized, should official 

identification of adult cattle be routine. The benefit to bovine brucellosis disease 

investigations for the cattle industry, States and Tribes, and USDA could easily exceed $5 

million annually.

Table 7. Bovine spongiform encephalopathy 

Date Investigation Opened: March 15, 2006 Investigation Status: Closed May 1, 2006 

Incident A confirmed positive of a previously inconclusive bovine spongiform encephalopathy 

(BSE) sample from a 10-year-old cow in Alabama was made on March 15, 2006. The goal 

of the epidemiological investigation was to locate at-risk animals besides the index cow:

• Two most recent progeny of the index cow

• Birth cohorts of the index cow that were born and raised on the same farm (herd 

of origin) 1 year before and 1 year after the index cow was born.

Method of 

Identification 

• No official identification

• No tattoo, no management eartag, and no brand

• Other alternatives used: 

− Color – Red

− Age – Estimated to be 10-years-old

− Sale weight when purchased by index herd

Methods of 

Tracing

The process of tracing the animals of interest was based on interviews with current and 

previous owners, stockyard sales records, phenotype, age, stage of pregnancy, and 

deoxyribonucleic acid (DNA) genetic matching. 

Investigative 

Summary

The positive cow had no tattoo, no eartag, and no brand. Thirty-seven farms were 

investigated (involving the use of DNA), to identify a herd of origin. This included two 

farms where the index cow resided, and 35 other farms that might have supplied the index 

cow to the farms where the index case resided. 

The index case did not have unique or permanent identification, and its size and color are 

common in the southern United States. Due to the unremarkable appearance of solid red 

cows, it is not easy for owners to remember individual animals. In the southern United 
61

States, it is common business practice to buy breeding age cows and keep them for several 

years while they produce calves. Most calves produced are sold the year they are born, 

whereas breeding cows are often sold when there is a lapse in breeding, which can occur 

multiple times in a cow’s life. 

For these reasons, USDA could not locate the herd of origin and the inconclusive 

investigation was closed after 48 days. 

Cost The estimated cost of the investigation was $40,000. This included State and Federal field 

resources to conduct interviews, review records with herd owners and market operators, 

travel, and DNA testing. 

Impact While the overall market impact cannot be defined, this case reflects the inability of the 

United States to trace the movement history and herd where the animal at a young age was 

exposed to the disease. 

Comparison with 

Rule on 

Traceability

An official identification tag from the index animal would have facilitated traceability, with 

minimal interviewing, to the farm of tagging within one day with cooperative participation.

As described in the discussion of private sector costs of the rule, the estimated cost of an 

identification tag is $0.18 per animal for producers that already tag and $1.68 to $4.68 for 

producers who do not tag their animals. This incremental cost includes all associated costs 

of working an animal merely for tagging purposes. Many operators already tag their cattle 

as part of routine management activities.

Benefits of effective traceability to producers

As discussed above, disease investigations that lack complete information and official 

animal identification are frequently expanded to involve more herds than will otherwise be 

necessary. This practice ensures the farm location that might have held the subject animal or 

other potentially exposed animals can be “ruled out” as being infected. More complete records 

and official animal identification allow investigations to focus on specific locations that are 

known to have had the animal of concern. In lieu of complete information, animal health 

officials must broadly “blanket” their herd reviews and testing to all possible locations. 

As the investigation broadens in scope to ensure the disease occurrence is fully examined, 

more producers are required to have their herds involved in the investigation. Producers that are 

included in a disease investigation incur disruption to their operation and have associated costs, 

including:
62

• Time spent with animal health officials to review records needed for the 

investigation as well as locating historic records called for during the investigation.

• Assembling the herd for testing. This includes labor costs, time, and the 

inconvenience of testing when other critical farming operations need to be done.

• Costs associated with testing. These include shrinkage, injury, loss of production 

(especially in dairy herds), and labor. The costs are double for TB because each herd test 

involves handling the animals twice in a 72-hour period.

Generalized private sector costs of TB and brucellosis testing and potential cost savings 

due to improved traceability are summarized in table 8.

 

12 USDA, APHIS, Veterinary Services data for 2010. 13 Based on estimated chute costs to producers of $1.68 to $4.68 per head, times two because each animal must be 

handled twice.

14 USDA, APHIS, Veterinary Services data for 2010.

Table 8. Summary of producer costs for TB and brucellosis testing 

and potential savings from improved traceability 

Bovine Tuberculosis 

Average number of TB trace tests per year12 260,000

Average cost of producers’ time, labor, etc. (per 

animal) 

$6.0013

Cost of TB testing $1,560,000

Value associated with reduced number of animals 

requiring testing due to improved animal disease 

traceability

 25% reduction $390,000

 50% reduction $780,000

 75% reduction $1,170,000

Bovine Brucellosis

Average number of brucellosis trace tests per year14 252,000

Average cost of producers’ time, labor, etc. (per 

animal)

$3.00

Cost of brucellosis testing $756,000

Value associated with reduced number of animals 

requiring testing due to improved animal disease 

traceability

 25% reduction $189,000

 50% reduction $378,000

 75% reduction $567,000
63

In addition, there are other costs that are difficult to value, such as the loss of revenue 

when there is a "hold order" in place preventing the movement of animals into or out of a herd 

while a test is pending. This can delay the sale of calves, breeding stock or fed cattle, resulting 

in additional feed costs and missed opportunities to take advantage of favorable market 

conditions.

Comparison to traceability for sheep and goats

The benefit of traceability, achieved primarily through official identification, is well 

demonstrated in the sheep and goat industry. In September 2001, the scrapie regulations were 

revised to require the official identification of sheep and goats not in slaughter channels (except 

low-risk commercial goats) and any sheep over 18 months-of-age in interstate commerce. In 

addition, the revision required States to implement and enforce official identification of most 

sheep and goats upon change of ownership in intrastate commerce. 

Official identification means to apply an official identification number to an animal using 

an approved device or method. It also requires creating and maintaining (for 5 years) a record 

linking the identification number to the owner of the flock of origin/birth of the animal, if other 

than the person to whom the official identification numbers were issued. 

APHIS maintains a database in which tag manufacturers enter the distribution records for 

official eartags. Most eartags are distributed directly from the tag manufacturer to the end-user. 

Some tags are redistributed by State or Federal offices who record the end-user in the database. 

Since implementation of the Federal identification requirements for sheep and goats, only 

12 percent of the positive animals identified through slaughter surveillance that did not have 

official identification were successfully traced to the flock of origin, whereas 94 percent of the 
64

positive animals that were officially identified were successfully traced to the flock of origin. In 

FY 2010, estimates indicate that 93 percent of all mature sheep were officially identified when 

they arrived at slaughter establishments.

As a result of our ability to effectively traceback diseased animals, scrapie prevalence has 

decreased from 0.2 percent in 2002-2003 to 0.03 percent in FY 2010, a decrease of 85 percent.

Concluding observations

Official animal identification provides key information resulting in improved traceability. 

The low level of official 

identification in the cattle industry 

is well-documented. For example, 

2007-2011 data from bovine 

spongiform encephalopathy (BSE)

surveillance, summarized in table 

9, show that on average less than 

40 percent of the animals had an official identification eartag. These data findings are similar to 

those from USDA APHIS (2008) that indicate that 41 percent of beef cattle and 16 percent of 

beef calves are identified with an official eartag.

The current low level of official identification in the cattle sector often impedes tracing 

capability. In comparison, successful traceability in the sheep industry is a direct result of high 

levels of official identification. 

The objective of the rule is to improve traceability, in particular, in the cattle industry. 

While the rule will only require official identification for animals moving interstate, it is likely 

that many livestock enterprises will routinely officially identify all of their animals in 

Table 9. Summary of BSE Surveillance Samples

Year

Number of 

Cattle 

Sampled

Number of Cattle 

with Official 

Identification 

Eartags

Percent of Cattle 

with Official 

Identification 

Eartags

2007 13,192 4,684 36 percent

2008 44,855 18,429 41 percent

2009 45,499 18,217 40 percent

2010 45,251 17,102 38 percent

2011 8,155 2,840 35 percent

2007-

2011 156,952 61,272 39 percent
65

anticipation of future, out-of-State marketing opportunities. As a result, we anticipate the level 

of official identification increasing significantly in the cattle sector. 

Market Effects of Improved Traceability

There are also benefits to improved animal traceability if barriers to trade exist or if such 

barriers would be erected in the case of an animal disease outbreak contingent on there not being 

such traceability requirements in place. Animal diseases occur unexpectedly. This lack of 

predictability prevents a straightforward evaluation of the benefits of the traceability regulations. 

A recent study from Kansas State University points out that export restrictions due to the 

discovery of a single cow with bovine spongiform encephalopathy (BSE) in 2004 resulted in 

losses to the U.S. beef industry ranging from $3.2 billion to $4.7 billion in 2004.15 They argue 

that cattle traceability would limit the amount of time market access is lost following an outbreak 

of some disease. Similar findings presented in a study by researchers at Montana State 

University, Kansas State University, and Colorado State University, illustrate the magnitude of 

the potential trade benefits by comparing hypothetical consequences of a disease outbreak under 

different animal identification capabilities.16 That study found that preventing the loss of exports 

to a large beef importing country such as South Korea (approximately 7% of U.S. beef export 

demand), could result in long-term losses to the beef sector of nearly $70 million annually. 

 

15 Shroeder, T.C. and G. T. Tonsor (2011) “Cattle Identification and Traceability: Implications for United States 

Beef Exports,” Kansas State University Report (September, available online at http://krex.kstate.edu/dspace/bitstream/2097/13089/1/CattleIDSchroederTonsor.pdf). 16 Brester, G., K. Dhuyvetter, D. Pendell, T. Shroeder, and G. Tonsor. 2011. “Economic Assessment of Evolving 

Red Meat export Market Access Requirements for Traceability of Livestock and Meat,” U.S. Meat Export 

Federation Report (March; available online at http://www.usmef.org/downloads/USMEF-Final-Project-ReportTonsor-et-al.-03.30.20111.pdf).
66

Another study by some of the same authors in 2007 simulated the trade impacts of an 

outbreak of foot and mouth disease in Kansas.17 In this simulation, the number of animals 

destroyed decreased as the level of tracing and surveillance increased. The amount of time to 

eradicate the disease was also reduced with improved traceability. It was estimated that with 90-

percent traceability, producer surplus would be $4.5 billion (present value over 10 years) larger 

than if there were 30-percent traceability. The benefits primarily derive from access to beef 

export markets expected to become more restricted if 30-percent traceability prevailed. The 

study also found that consumer surplus would be less with 90-percent traceability than if there 

were 30-percent traceability, by about $800 million (present value over 10 years). The reason is 

that under 30-percent traceability, beef that would have been exported had there not been a FMD 

discovery remains on the domestic market, depressing prices and increasing consumer surplus. 

The analysis concludes that the net benefit or societal gain of having 90-percent traceability as 

compared to 30-percent traceability if there were a contained FMD outbreak in Kansas, based on 

the model’s assumptions, could total $3.7 billion (present value over 10 years).

While such studies do not specifically model conditions that may exist under the rule, 

they do provide indications of the magnitude of potential trade benefits that are expected to 

derive from having a traceability program in place when there is a disease outbreak. As pointed 

out in the benefit-cost study, the benefits of a traceability system are for the most part potential

benefits that rest on largely unknown probabilities of disease occurrence.

Having a traceability system in place will allow the United States to trace animal disease 

more quickly and efficiently, thereby minimizing not only the spread of disease but also the trade 

 

17 Schroeder, T.C., and D.L. Pender (2007) “Value of Animal Traceability Systems in Managing Contagious Animal 

Diseases,” Report to the Program of research on Economics of Invasive Species Management (October, available 

online at http://krex.k-state.edu/dspace/bitstream/2097/4166/1/SchroederTraceability2007.pdf).
67

impacts an outbreak may have. Major beef-exporting competitors of the United States, including 

Australia, Brazil, and Canada, have traceability systems.

The value of U.S. exports of live cattle in 2010 was $131.8 million, and the value of U.S. 

beef exports totaled $2.8 billion. The value of U.S. cattle and calf production in 2009 was $31.8 

billion.18 Annual incremental costs of the rule for cattle enterprises are estimated to be between 

$14.5 million and $34.3 million, assuming official identification will be undertaken separately 

from other routine management practices; or between $10.9 million and $23.5 million, assuming 

that some tagging will be combined with other routine management practices that require 

working cattle through a chute. The upper range of these costs represent about one-tenth of one

percent of the value of domestic cattle and calf production. In other words, if there were an 

animal disease outbreak in the United States that affected our domestic and international beef 

markets, preservation of a very small proportion of these markets would justify estimated private 

sector costs attributable to the animal disease traceability program.

The primary benefit of the regulations will be the enhanced ability of producers, State 

and Tribes, and the Federal government to regionalize and compartmentalize animal health 

issues more quickly, minimizing losses and enabling reestablishment of foreign and domestic 

market access with minimum delay in the wake of an animal disease event. 

Benefits Summary 

The three case studies presented illustrate how the Federal government, States and Tribes, 

and producers can directly benefit from the animal disease traceability system. For producers 

affected by a disease traceback, the traceability system will mean that fewer tests will need to be 

carried out (and therefore fewer animals will need to be worked through a chute) and livestock 

 

18 http://www.ers.usda.gov/news/BSECoverage.htm
68

sales and other farm operations will not be disrupted. Under the traceability system, there will be 

an increased likelihood that all exposed animals will be found. Tracebacks that cannot be 

successfully concluded because of incomplete records contribute to uncertainty about supply and 

prices. 

In addition to the direct benefits to producers, the traceability system will provide added 

assurance that APHIS has the capability to respond to a foreign animal disease outbreak such as 

foot and mouth disease quickly and efficiently. As described in the foregoing example, effects 

for producers due to changes in prices and international market access could be dramatic, in this 

scenario resulting in a $3.7 billion net benefit to society because of improved animal disease 

traceability. 

Final Regulatory Flexibility Analysis

The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their 

final rules on small businesses, small organizations and small governmental jurisdictions. 

Section 603 of the Act requires agencies to prepare and make available for public comment a

final regulatory flexibility analysis that describes expected impacts of a rule on small entities.

Reason Action is Being Considered

APHIS enacts regulations to prevent, control, and eradicate diseases of livestock 

(including poultry), thereby increasing foreign and domestic confidence in the safety of U.S. 

farm-raised animals and their products. Many animal disease program regulations, such as those 

for bovine tuberculosis and brucellosis, contain components of a traceability program, e.g., 

requirements for certain animals moving interstate to be officially identified and accompanied by 

documents recording, among other things, the animals' official identification numbers and the 

locations from and to which they are being moved. However, the United States does not 
69

currently have an overarching animal disease traceability program integrated to meet the needs 

of all species and disease programs. This rulemaking is intended to address animal disease 

traceability gaps in the regulations and enhance our ability to safeguard animal health.

Objective of and Legal Basis for the Rule

This rule will establish minimum traceability requirements, namely, official identification 

of livestock moved interstate unless specifically exempted and issuance of an interstate 

certificate of veterinary inspection (ICVI) or other acceptable movement documentation. The 

rule reflects a flexible yet coordinated approach that will enable States, Tribes, and livestock 

producers to use means of traceability that work best for them. The objective is to improve 

APHIS’ ability to trace livestock in the event disease is found.

In accordance with the Animal Health Protection Act (7 U.S.C. 8301 et seq.), the 

Secretary of Agriculture has the authority to promulgate regulations to prevent the introduction 

into the United States or dissemination of any pest or disease of livestock.

Potentially Affected Small Entities

As explained in the Supplemental Information for this rule, APHIS expects the cattle 

industry will be the livestock sector principally affected by this rule. Cattle enterprises that move 

cattle interstate will be directly affected.

Existing animal identification requirements for the interstate movement of farm-raised 

animals largely satisfy the official animal identification and ICVI requirements. Cattle moving 

interstate are often required to be accompanied by a health certificate under current regulations. 

Some diseases require specific statements and tests as part of the certificate. In addition, nearly 

all States require a certificate of veterinary inspection for breeder and feeder cattle entering from 

another State. 
70

Table 10 shows cattle industries that will be affected by the rule, as categorized by the 

North American Industry Classification System, and sales and employment information that

underscores the prevalence of small entities among establishments that comprise these industries. 

We note that numbers of establishments shown include ones that may not be directly affected by 

the rule, in particular, those that do not move cattle interstate. 

Table 10. Small-entity representation in cattle sector industries that may be affected by the rule, 

2007 

Industry 

(NAICS code)

Number of 

Establishments 

SBA SmallEntity Size 

Standard

Average Value of 

Establishments’ 

Annual 

Sales1

Number of 

Establishments 

with fewer than 

100 Employees

Beef cattle 

ranching and 

farming 

(112111) 

656,475 < $750,000 

annual receipts $43,197

Dairy cattle and 

milk production 

(112120)

57,318 < $750,000 

annual receipts $611,773

Cattle feedlots 

(112112) 31,065 < $2,500,0000 

annual receipts $977,048

Animal (except 

poultry) 

slaughtering 

(311611)

1,597 < 500 

employees 1,466

Rendering and 

meat byproduct 

processing 

(311613)

228 < 500 

employees 208

Sources: USDA NASS, 2007 Census of Agriculture, 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_1

_062_062.pdf; U.S. Census Bureau, 2007 Economic Census, 

http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-ds_name=EC0731I1&-

_lang=en. 

1

Includes government payments.
71

The Census of Agriculture allows further examination of small entities that could be 

affected by the rule, namely, small family cattle enterprises and cattle enterprises for which one 

or more of the principal operators belong to a socially disadvantaged group. Small family farms 

are defined by USDA as family farms with gross sales of less than $250,000 (USDA ERS 2010). 

(Any farm where the operator and persons related to the operator own a majority of the business 

is considered a family farm.) In 2007, nearly 88 percent of farms with cattle and calf inventories 

were small family farms.

Small family farms are further divided into retirement farms (operators reporting they are 

retired), residential/ lifestyle farms (operators reporting a major occupation other than farming), 

and farming-occupation farms (operators reporting farming as their major occupation). Farmingoccupation farms are classified as low-sales small family farms (sales less than $100,000) and 

high-sales small family farms (sales between $100,000 and $249,999). A fifth category of small 

family farms are limited resource farms, which have sales of not more than $100,000 and a total 

household income at or below the national poverty level for a family of four, or less than 50 

percent of county median household income.

The Census of Agriculture indicates that in 2007, 40 percent of small family cattle 

operations were residential/lifestyle farms. With regard to the other categories of small family 

cattle enterprises, over one-fourth of the owners reported that they had already retired, limited 

resource farms and the low-sales farming-occupation farms each comprised about 15 percent of 

the operations, and about 6 percent were high-sales farming-occupation farms. 

Socially disadvantaged groups are ones that historically have been subjected to bias and 

prejudice. They include women, persons of Hispanic origin, American Indians or Alaska 

Natives, Asians, African Americans, and Native Hawaiians or other Pacific Islanders. These 
72

farm operators, themselves, may not have experienced bias or prejudice, but they identify with 

one or more of these gender, ethnic, and racial groups.

For more than 8 percent of cattle operations in 2007, the principal operator was a woman. 

About 5 percent of cattle operations had a person of Hispanic heritage and/or an American 

Indian or Alaskan native as one of their top-three operators. Fewer than 2 percent of cattle 

operations have an African-American as a top-three operator.

Most cattle enterprises are small family farms. As is true for other cattle operations, 

incremental costs of the rule for these farms will depend upon whether official animal 

identification will be incorporated into ongoing, routine management practices, and whether the 

enterprise is already moving cattle interstate other than for immediate slaughter.

Projected Reporting, Recordkeeping, and Other Compliance 

Requirements

Reporting and recordkeeping requirements associated with the rule are discussed in the 

rule under the heading "Paperwork Reduction Act." APHIS will require that any State, Tribe, 

accredited veterinarian, or other person or entity who distributes official identification devices 

maintain for a minimum of 5 years a record of the names and addresses of anyone to whom the 

devices were distributed. APHIS will also require that approved livestock facilities keep for a 

minimum of 5 years paper or electronic records of any ICVIs or alternate documentation used in 

lieu of an ICVI for livestock that enter the facility on or after the effective date of this rule. If an 

animal loses an official identification device and needs a new one, the person applying the new 

one will have to record information about the event and maintain the record for 5 years.

Duplication, Overlap, or Conflict with Existing Rules and Regulations

APHIS has not identified any duplication, overlap, or conflict of the rule with other 

Federal rules.
73

Alternatives to minimize Significant Economic Impacts of the Rule

APHIS has developed this rule intent on minimizing costs that the private sector may

bear. Incremental costs of official animal identification will be minimal for many cattle 

operations that will incorporate this activity into current herd management practices involving 

eartagging. Similarly, current movement documentation required by nearly all States for 

inshipments of breeding and feeder cattle is much the same as the ICVI; incremental costs for 

operations that already move cattle interstate other than for immediate slaughter will be minimal.

The collaborative manner in which the rule’s implementation is intended to advance, with 

representatives from States, Tribes, and the affected industries advising APHIS on the 

effectiveness of various elements of the traceability program, is also expected to help minimize 

operational burdens.
74

References

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influenza?” Poultry Science 88:856-959.

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Identification System, 2009

http://www.aphis.usda.gov/traceability/downloads/Benefit_Cost_Analysis.pdf

Shields, Dennis, and Kenneth Mathews, Jr. 2003. Interstate Livestock Movements, USDA ERS, 

LDP-M-108-01, June 2003. 

http://www.ers.usda.gov/publications/ldp/jun03/ldpm10801/ldpm10801.pdf 

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