Analysis in Support of Certification that the Rule will not 

have a Significant Economic Impact on a Substantial 

Number of Small Entities

Final Rule

National Poultry Improvement Plan and Auxiliary Provisions

09-031-2

U.S. Department of Agriculture

Animal and Plant Health Inspection Service

December 2010
SUMMARY

The Regulatory Flexibility Act requires that agencies consider the economic impact of 

their rules on small entities. The Small Business Administration has established guidelines for 

determining which types of firms are to be considered small under the Regulatory Flexibility 

Act. The main entities that will be affected by the rule are those engaged in production of 

poultry breeding stock. Currently there are three major firms that produce primary breeding 

stock of egg-type chickens, three breeders of meat-type chickens, two breeders of turkeys, and 

one firm producing breeding stock of both egg-type and meat-type chickens. All of these are 

large facilities headquartered in the United States that operate in domestic and international 

markets, and will not be considered small entities. Few, if any, small producers would be 

directly affected by this proposed rule.

Broiler operations (NAICS 112320), turkey operations (NAICS 112330), hatcheries 

(NAICS 112340), and other poultry operations (NAICS 112390) may be positively affected 

indirectly by the supply of improved and healthy breeding stock. All of these farms are 

considered to be small if they have annual sales of $750,000 or less. Commercial egg producers 

(NAICS 112310) are considered small if they have annual sales of not more than $11.5 million.

This rule would introduce a set of minor changes to the NPIP and would not involve 

significant changes in program operations. These changes are in line with the industry’s best 

practices and would likely involve no additional costs in order to meet these requirements. 

Additionally, the NPIP is a voluntary program established between the industry and State and 

Federal governments. Any person producing or dealing in products may participate in the NPIP 

when he or she has demonstrated that his or her facilities, personnel, and practices are adequate 

for carrying out the applicable provisions of the NPIP. NPIP participation allows for greater ease 
in moving hatching eggs/live birds within a State, across State lines, and into other countries. 

Most countries will not accept hatching eggs/live birds and commercial poultry from a U.S. 

operation unless it can be shown to be a NPIP participant. The poultry industry plays a very 

important role in the U.S. economy and the amendments will help to ensure the safety of the 

industry and benefit the economy. APHIS does not expect the rule to have a significant 

economic effect on a substantial number of small entities.
Introduction 

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

certification by the APHIS Administrator that the proposed rule, if promulgated, would not have 

a significant economic impact on a substantial number of small entities.

This proposed rule will amend the provisions of the National Poultry Improvement Plan 

(NPIP) to reflect the changes approved by voting delegates at the Plan’s 2008 biennial 

conference in Portland, Oregon. This rule is designed to introduce a series of minor changes to 

the NPIP and does not involve significant changes in program operations. The changes include 

new or amended language in the following areas: definitions, the U.S. Avian Influenza Clean and 

U.S. H5/H7 Avian Influenza Clean programs for breeding poultry, adding pullets to the U.S. 

H5/H7 Monitored program for table-egg layers, and updating testing and laboratory procedures

for Mycoplasma and Salmonella. The changes also establish provisions specific to meat-type 

breeding waterfowl. 

These changes are in line with the industry’s best practices and would likely involve no 

additional costs in order to meet these requirements. Additionally, the NPIP is a voluntary 

program established between the industry and State and Federal governments. Any person 

producing or dealing in products may participate in the NPIP when he or she has demonstrated 

that his or her facilities, personnel, and practices are adequate for carrying out the applicable 

provisions of the NPIP. NPIP participation allows for greater ease in moving hatching eggs/live 

birds within a State, across State lines, and into other countries. Most countries will not accept 

hatching eggs/live birds from a U.S. operation unless it can be shown to be a NPIP participant. 

The poultry industry plays a very important role in the U.S. economy and the proposed 

amendments would help to ensure the safety of the industry and benefit the economy. 
As background, we provide a brief overview of the U.S. poultry and egg industries and 

trade in these products. We then describe the expected impact on small entities.

The Poultry and Egg Industries

Production 

The United States is the world's largest poultry producer, the second-largest egg 

producer, and largest exporter of poultry meat. Cash receipts (see table 1) from sales of poultry 

and eggs (broilers, farm chickens, eggs, turkey, ducks, and other poultry) were $32.5 billion in 

2009.

1

 Of this total, 67 percent was from the sale of broilers, 19 percent from eggs, 11 percent 

from turkeys and 3 percent from other poultry.

In terms of tonnage, poultry production and trade exceeds that of beef or pork. For 

instance, in 2009, the U.S. produced 41 billion pounds of poultry meat compared with 26 billion 

pounds of beef and 23 billion pounds of pork. Additionally, the U. S. also produced 6.4 billion 

dozen eggs. Poultry meat per capita consumption (972 pounds in 2009) exceeds per capita 

consumption of both beef (61.2 pounds) and pork (50.1 pounds). Furthermore, the U.S. exports 

more poultry meat (7.4 billion pounds) than beef and veal (1.9 billion pounds) or pork (4.1

billion pounds).2

Table 1--Cash receipts for Poultry and Eggs, United States, 2004-2009

Commodity 2004 2005 2006 2007 2008 2009

$ Millions

Total poultry and eggs 29,514, 28,727 26,459 32,607 36,771 32.463

Broilers 20,446 20,877 17,739 21,460 23,112 21,813

Farm chickens 58 65 54 51 62 65

 

1 USDA/ERS, Farm Income/Cash receipts, 2000-2009, 

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

2 USDA/ERS, Livestock, Dairy, and Poultry Outlook. 

http://www.ers.usda.gov/Publications/LDP/2010/11Nov/ldpm197tables.pdf
Chicken eggs 5,239 4,007 4,432 6,678 8,226 6,156

Turkeys 2,996 3,108 3,574 3,711 4,478, 3,573

Ducks 21 22 13 14 17 15

Other poultry 755 648 648 693 864 842

Source: USDA/ERS, USDA/ERS, Farm Income/Cash receipts, 2000-2009,

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

Broiler production is concentrated in a group of States stretching from Delaware, south 

along the Atlantic coast to Georgia, then westward through Alabama, Mississippi, and Arkansas. 

The top broiler-producing State is Georgia, followed by Arkansas, Alabama, North Carolina, 

Mississippi, and Texas. Operations in these States account for over 65 percent of broiler cash 

receipts. 

Most U.S. broiler production is conducted under contract with broiler processors. The 

grower normally supplies the grow-out house with all the necessary heating, cooling, feeding, 

and watering systems. The grower also supplies the labor needed in growing the birds. The 

broiler processor supplies the chicks, feed, and veterinary medicines. The processor schedules 

transportation of the birds from the farm to the processing plant. In many cases, the processor 

also supplies the crews who place broilers into cages for transportation to the slaughter plant.

The U.S. turkey industry produces over one-quarter of a billion birds annually, with the 

live weight of each bird averaging over 25 pounds. Production of turkeys is somewhat more 

scattered geographically than broiler production. The top five turkey-producing States are 

Minnesota, North Carolina, Missouri, Arkansas, and Virginia. The United States is by far the 

world's largest turkey producer, followed by the European Union. Even though exports are a 

major component of the U.S. turkey industry, the United States consumes more turkey per capita 

than any other country. 
U.S. egg operations produce over 77 billion eggs annually. Over three-fourths of egg 

production is for human consumption (the table-egg market). The remainder of production is for 

the hatching market. These eggs are hatched to provide replacement birds for the egg-laying 

flocks and broiler chicks for grow-out operations. The top five egg-producing States are Iowa, 

Ohio, Pennsylvania, Indiana, and California.3

A measure of the industry’s changing structure has been the decreasing number and 

increasing size of chicken hatcheries. In 1973, there were 989 facilities that hatched all chickens 

in the United States. Those hatcheries had the combined capacity to incubate 436 million eggs at 

one time, for an average capacity of 440,849 eggs.4 In 2009, there were 317 chicken hatcheries, 

with a combined incubator capacity of 898 million eggs and an average capacity of 2.8 million 

eggs. Similarly, there were 203 turkey hatching facilities in 1973, with the capacity to incubate 

45 million eggs at one time and an average capacity of 221,675 eggs. In 2009, there were 51

turkey hatcheries, with an incubator capacity of 38 million eggs and an average capacity of 

745,000 eggs.5

Trade 

The United States is the world's largest exporter of poultry meat. Annual poultry meat 

exports totaled about 7.4 billion pounds in 2009, which is about 18 percent of U.S. production. 

(All trade statistics in this and the following paragraph are for 2009.) Demand for U.S. poultry 

meat products has fluctuated over the last several years due to changing economic conditions and 

currency exchange rates in major importing countries. The U.S. exported 8,217 million pounds 

 

3

USDA/ERS, Livestock, Dairy, and Poultry Outlook. 

http://www.ers.usda.gov/Publications/LDP/2010/11Nov/ldpm197tables.pdf

4 USDA/Statistical Reporting Service, Hatchery Production, Annual Revisions 1974 

(http://usda.mannlib.cornell.edu/usda/nass/HatcProdSu//1970s/1975/HatcProdSu-03-18-1975.pdf)

5 USDA/NASS, Hatchery Production 2009 Summary, April 2010 

(http://usda.mannlib.cornell.edu/usda/current/HatcProdSu/HatcProdSu-04-16-2010.pdf).
of poultry meat in 2009. Exports are widely distributed. The top ten importers of U.S. broiler 

products are China, Russia, Mexico, Hong Kong, Cuba, Canada, Iraq, Ukraine, Angola, and 

Taiwan. Together, these markets accounted for over 73 percent of U.S. poultry meat exports, on 

a quantity basis. The United States imported 130 million pounds of poultry meat and represents 

less than three-tenths of a percent of domestic production. Over 84 percent of imports came 

from Canada in 2009. The rest came from Chile, Israel, and France.

As in the case of poultry meat, U.S. exports of live poultry and exports of fresh shelled 

eggs are widely distributed and significantly outweigh imports of these products. The U.S 

exported 1,504 million eggs and imported 50 million in 2009. Top destinations are Canada, 

Hong Kong, Jamaica, Mexico, United Arab Emirates, Trinidad and Tobago, China, Russia, and 

Guyana. They together imported about 75 percent of U.S. egg exports. All of U.S. egg imports 

were from Canada, Chile, Israel and France. 

The U.S. exported 73.7 million live poultry and imported 11.1 million live poultry. The 

top ten destinations include Canada, China, Mexico, Brazil, Indonesia, Thailand, Peru, 

Dominican Republic, Philippines, and Egypt. These countries accounted for 70 percent of U.S. 

total live poultry exports. All U.S. live poultry imports came from Canada, and the United 

Kingdom.6

Potential Impact on Small Entities

As a part of the rulemaking process, APHIS evaluates whether regulations are likely to 

have a significant economic impact on a substantial number of small entities. The Small 

Business Administration has established guidelines for determining the number of firms 

considered small under the Regulatory Flexibility Act. The main entities that would be affected

 

6 Global Trade Atlas, 2010 (http://www.gtis.com/gta/secure/gateway.cfm)
by the rule are those engaged in production of breeding stock, hatcheries, and table-egg layers. 

Currently there are four major firms that produce primary breeding stock of egg-type chickens, 

three breeders of meat-type chickens, two breeders of turkeys, and one firm producing breeding 

stock of both egg-type and meat-type chickens.7 All of these are large facilities headquartered in 

the United States that operate in domestic and international markets, and would not be 

considered small entities. Few, if any, small producers would be directly affected by this 

proposed rule.

The SBA defines small poultry processing plants as those plants with no more than 500 

employees.8 It is unclear how poultry processing plants may be indirectly affected by the rule, 

and of those, the number that would be considered small entities.

Broiler operations (NAICS 112320), turkey operations (NAICS 112330), hatcheries 

(NAICS 112340), and other poultry operations (NAICS 112390) may be positively affected 

indirectly by the supply of improved and healthy breeding stock. All of these operations are 

considered to be small if they have annual sales of $750,000 or less.9 Commercial eggs 

producers (NAICS 112310) are considered small if they have annual sales of not more than 

$12.5 million. 

The broiler industry has evolved from small backyard flocks to less than 50 highly 

specialized agribusiness firms. The poultry companies/integrators that own the birds are all

large, vertically integrated companies that do not meet the Small Business Administration (SBA) 

 

7 Mary E. Delany, Genetic Diversity and Conservation of Poultry, p.261, in W.M. Muir and S. E. Aggrey, Poultry 

Genetics, Breeding and Biotechnology, August 2003; Susanne Gura, Livestock Genetics Companies: Concentration 

and Proprietary Strategies of an Emerging Power in the Global Economy 

(hhtp://pastoralpeoples.org/docs/Livestock_genetics.pdf)

8

Small Business Administration, http://www.SBA.gov/size. Small poultry processing operations (NAICS 311615) 

include establishments engaged in slaughtering poultry and small game and/or preparing processed poultry and 

small game meat.

9 U.S. Small Business Administration Table of Small Business Size Standards 

(http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf). 
small-entity criterion. According to the 2007 Census of Agriculture, 24,971 farms sold 195 

million layers. 10 Of these, 21,323 (or 85 percent) sold fewer than 3,200 layers 20 weeks old and 

older. Farms with sales of fewer than 3,200 birds accounted for a total of 1,272,433 birds sold, 

or 0.7 percent. In 2007, a total of 27,091 farms sold 8.9 billion broilers. Of these, 9,743 (or 36 

percent) sold fewer than 2,000 broilers and other meat-type chickens. Out of the 8.9 billion 

broilers sold, farms with sales of fewer than 2,000 broilers accounted for 1.2 million birds sold or 

approximately 0.001 percent. These figures give a rough estimate of the numbers of farms that 

might qualify as small entities. Many of the farms that would be indirectly affected by this rule 

are likely small according to SBA guidelines, while bearing in mind that vertically integrated 

markets account for about 90 percent of poultry production.

11

 . 

Participation in National Poultry Improvement Plan (NPIP) program is a voluntary 

decision. Individual producers will continue to participate in the NPIP program only if the 

benefits they receive from participation outweigh the costs. Over 99 percent of poultry breeders 

and hatcheries are plan participants.

The benefits of flock participation include: member recognition in the official NPIP 

Directory of Participants; an approval number that may be used on shipping labels, certificates, 

invoices, and other documents for identification purposes; free listing in various State fair 

brochures; and automatic notification of emergency disease management updates. Furthermore, 

being a member of NPIP allows for greater ease in moving hatching eggs/live birds within a 

State, across State lines, and into international markets. As noted, most countries will not accept 

hatching eggs/live birds and commercial poultry unless they can be shown to be from a NPIP 

 

10 http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_1_027_028.pdf

11 By 1977, contracts and vertical integration accounted for over 85 percent of broiler, turkey, and egg production. 

Today, these arrangements account for over 90 percent of production in each of the three sectors. 

(http://www.ers.usda.gov/AmberWaves/June03/findings/USHogandPoultry.htm)
participant. Importers can be confident that commodities traded by NPIP participants have been 

produced following international animal health guidelines.

Any increased cost to NPIP participants due to the proposed rule would be minor 

compared to the expected benefits of the proposed program changes. The proposed rule would 

codify in the CFR activities already practiced by the industry. Most of the participants have 

already been implementing the proposed changes for several years. Even if additional testing 

were required, the number of birds affected would be very small compared to the average size of 

flocks in the industry. 

Under these circumstances, the Administrator of the Animal and Plant Health Inspection 

Service has determined that this action would not have a significant economic impact on a 

substantial number of small entities.