United States

Department of

Agriculture

Animal and

PlantHealth

Inspection

Service

July 2013

Regulatory Impact Analysis & 

Final Regulatory Flexibility Analysis 

Final Rule 

APHIS 2008-0010 

RIN 0579- AC68 

Bovine Spongiform Encephalopathy; Importation of 

Bovines and Bovine Products 

Policy & ProgramDevelopment  

Policy Analysis &Development
i

Summary

This rule will make our bovine and bovine product import restrictions related to bovine 

spongiform encephalopathy (BSE) more reflective of current scientific thinking while continuing 

to guard against the introduction of BSE. The process for classifying regions with respect to 

BSE risk will be based on the comprehensive review of relevant, internationally accepted 

scientific literature and will be consistent with the process employed by the World Organization 

for Animal Health (OIE). The rule will also remove BSE-related restrictions on the importation 

of live cervids and camelids and their products. 

While benefits of the rule are expected to justify its costs, effects on U.S. imports are 

expected to be minimal. Potential impacts of the rule on U.S. export markets, by influencing 

trading partners’ import policies, are not considered in this analysis. 

Live Bovines (Cattle and Bison) 

Essentially all U.S. imports of cattle and bison are from Canada and Mexico. Over the 10 

years 2002-2011, the only live bovine imports that did not come from Canada or Mexico were 33 

animals from Australia, 12 from New Zealand, and 1 from Guatemala. APHIS is classifying 

Canada and Mexico as countries of controlled risk for BSE (their classification by the OIE). 

Imports from Canada will be unaffected by this rule because the requirements will cause 

no change in the number or type of animals that are eligible for importation, based on Canada’s 

status as a BSE minimal-risk region. Imports from Mexico also will be essentially unaffected, 

since nearly all cattle imported from Mexico (98 to 99 percent) are estimated to be less than 24 

months of age; with this rule APHIS is establishing November 30, 2007, as the date of effective 

enforcement of a ruminant-to-ruminant feed ban in Mexico (the earliest date that bovines 

imported from Mexico could be born). 
ii

Products Derived from Bovines 

Six countries, Argentina, Australia, Brazil, Canada, New Zealand, and Uruguay, 

accounted for 91 percent of all U.S. bovine product import volume (and 90 percent of the import 

value) over the five-year period 2007-2011. Imports from each of the six countries should 

continue essentially unchanged and without interruption under the rule, because the protocols in 

place in these countries are already in full compliance with the rule’s criteria. Argentina, 

Australia, New Zealand, and Uruguay will be classified by APHIS as negligible risk regions for 

BSE; they have never reported a case of BSE. Canada and Brazil, which will be classified by 

APHIS as controlled risk regions for BSE, already satisfy FSIS inspection requirements and 

prohibitions on certain animal stunning or pithing and mechanically separated meat. 

Imports allowed by the rule from the 36 (primarily European) countries listed in 9 CFR 

§ 94.18 as prohibited from shipping bovine products to the United States likely will be 

insignificant. In none of the years from 1990 through 1996, that is, prior to the prohibition on 

ruminant product imports from all of Europe in 1997, did the volume of U.S. bovine product 

imports from the 36 countries account for more than 0.6 percent of imports of these products. 

Nor does recent EU trade in bovine products suggest a significant volume of imports 

from the 36 countries in the future, at least in the near term. While the nominal value of bovine 

product exports by the European Union (EU-27) increased more than four-fold in five years, 

from $0.36 billion in 2007 to nearly $1.57 billion in 2011, the value of bovine product imports by 

EU-27 member countries in 2011 ($2.42 billion) exceeded the value of their bovine product 

exports by more than $850 million. The EU-27 continues to be a large net importer of bovine 

products overall. Emerging markets, such as Russia, are likely to take a growing share of 

Europe’s bovine product exports. 
iii

Bovine product imports from other countries that are not currently subject to BSE-related 

restrictions are not expected to be significantly affected. Over the five years 2007-2011, annual 

imports from such countries as a group averaged 8 to 9 percent of all U.S. bovine product 

imports by volume (10 to 11 percent by value), with over 95 percent of these products coming 

from Mexico, Nicaragua, and Costa Rica. Imports from Mexico already meet the requirements 

of a region of controlled risk for BSE largely by way of FSIS requirements. The potential impact 

on imports from Nicaragua and Costa Rica, which APHIS is classifying as regions of 

undetermined risk for BSE, should be minimal at most. Almost all imports from those two 

countries are of boneless beef that already satisfy the rule’s requirements, again, largely by way 

of FSIS requirements. 

Live Cervids and Camelids and their Products 

Removal of the prohibition on the importation of live cervids and camelids and their 

products from the 36 countries listed in 9 CFR § 94.18 will likely have little or no impact. The 

United States has not imported any live cervids or camelids from these countries since at least 

1990. In none of the years from 1990 through 1996, before the prohibition of ruminant meat, 

meat products, and other edible products from all of Europe in 1997, did the volume of U.S. 

imports of meat and edible offal of deer from the 36 countries account for more than 3.3 percent 

of total imports. Over the five years 2007-2011, more than 99 percent of U.S. imports of meat 

and edible offal of deer have come from New Zealand, and that country’s dominance of this 

market is unlikely to change as a result of this rule. The volume of U.S. imports of camelid 

products is very small. Their annual value averaged less than $50,000 over the five-year period 

2006-2010 (most recent data available), and 90 percent of those imports were supplied by 

Canada and China. 
iv

Benefits, Costs, and Alternatives 

Consumers benefit from imports to the extent that consumer choice is broadened and the 

increased supply of the imported commodity leads to a price decline. We anticipate that the rule 

will have little impact on consumer choice or import volumes, and therefore little or no impact on 

U.S. businesses as well. 

Although the impact of this rule on U.S. consumers and producers is expected to be 

minimal, the benefits of the rule are expected to justify its costs. Leaving the bovine regulations 

unchanged would be unsatisfactory because it would perpetuate the current situation in which 

our BSE-related import conditions are not fully supported by scientific evidence. Additionally, 

by maintaining the status quo APHIS would forgo the opportunity to establish a process for 

classifying a region’s BSE risk status in a more timely fashion than is possible under current 

regulations. 

Another alternative, amending the BSE regulations related to the importation of bovines 

and bovine-derived products to match precisely the OIE Code without allowing for modification 

deemed necessary by APHIS, would also be unsatisfactory; it would not allow APHIS to 

independently interpret the scientific literature and findings that underlie OIE risk categorization 

recommendations. Making no changes to the regulations that govern the importation of cervids 

and camelids would also be unsatisfactory because it would perpetuate an unnecessary constraint 

on trade in those commodities. 

Effects for Small Entities 

Small entities prevail among the industries that may be affected by this rule, including 

cow-calf producers, cervid and camelid producers, feedlot establishments, slaughtering 

establishments, meat packing and processing establishments, meat wholesalers, importers and 
v

exporters, grocery stores and meat markets, and manufacturers of cosmetics and 

pharmaceuticals. However, as has been described, any changes because of this rule in U.S. 

imports of live bovines, cervids, camelids, or their products are expected to be minor. U.S. small 

entities are unlikely to be significantly affected. This rule contains no mandatory reporting, 

recordkeeping, or other compliance requirements for U.S. entities. 
Table of Contents

Summary ............................................................................................................................ i

Introduction ....................................................................................................................... 1

Expected Effects of the Rule on U.S. Imports ................................................................... 2

Live Bovines and Bovine Products ............................................................................... 2

Cervids and Camelids and their Products ................................................................... 12

Expected Benefits and Costs, and Alternatives to the Rule .............................................. 13

Final Regulatory Flexibility Analysis .............................................................................. 14
1

Introduction 

APHIS is amending the regulations that govern the importation of live bovines and 

products derived from bovines with regard to bovine spongiform encephalopathy (BSE). We are 

basing importation conditions on the inherent risk of BSE infectivity in specified commodities, as 

well as on the BSE risk status of the region from which the commodities originate. We are 

establishing a process for classifying regions as to BSE risk that is consistent with the process 

employed by the World Organization for Animal Health (OIE), the international standard-setting 

organization for animal health. 

APHIS conditions for the importation of specified commodities are based on 

internationally accepted scientific literature and, except in a few instances, are consistent with the 

OIE Code. With this rule, we are classifying certain specified countries as to BSE risk and 

removing BSE restrictions on the importation of cervids and camelids and products derived from 

such animals. 

This economic analysis provides a cost-benefit analysis, as required by Executive Orders 

12866 and 13563, which direct agencies to assess all costs and benefits of available regulatory 

alternatives and, if regulation is necessary, to select regulatory approaches that maximize net 

benefits (including potential economic, environmental, public health and safety effects, and 

equity). Executive Order 13563 emphasizes the importance of quantifying both costs and 

benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The economic 

analysis also examines the potential economic effects of this rule on small entities, as required by 

the Regulatory Flexibility Act. 
2

Expected Effects of the Rule on U.S. Imports 

This rule’s expected economic impact stems from its potential effect on certain animal 

and animal product imports that are regulated because of BSE.

1

 For reasons discussed below, we 

expect any effect on U.S. imports will be minimal at most. We discuss first the anticipated 

impact on imports of live bovines and their products, followed by the anticipated impact on 

imports of live cervids and camelids and their products. 

Live Bovines and Bovine Products 

Live Bovines (Cattle and Bison) 

Essentially all U.S. imports of cattle and bison come from Canada and Mexico. Over the 

three years 2009-2011, the United States imported an average of 2.2 million live bovines per 

year, valued at $1.5 billion and all from Canada and Mexico.2 Over the 10 years 2002-2011, the 

only live bovine imports that did not come from Canada or Mexico were 33 animals from 

Australia, 12 from New Zealand, and 1 from Guatemala. 

Imports from Canada, which is classified by the OIE as a country of controlled risk for 

BSE and which APHIS likewise is classifying as controlled risk, will be unaffected by the rule; 

the requirements will cause no change in the number or type of animals that are eligible for 

importation based on Canada’s status as a BSE minimal-risk region. Importation of live bovines 

from Canada is limited to those born on or after the date a ruminant-to-ruminant feed ban was 

                                                            

1

 The rule has the potential to expand the U.S. export market, to the extent that it influences changes in our trading 

partners’ import policies. Because predicting if and when other countries will make changes to their trade policies is 

highly speculative, this analysis assumes no import policy changes by foreign countries as a result of the rule and 

therefore no impact on U.S. exports. 2

 Unless otherwise indicated, all trade data in this analysis are from the Department of Commerce, U.S. Census 

Bureau, as reported by Global Trade Information Services, Inc. 
3

effectively enforced in that country.

3

 Imports of live bovines from Canada will continue to be 

subject to that requirement. Canada is already satisfying requirements relating to the 

identification of live bovines from regions of controlled risk for BSE; current regulations require 

that all imports of cattle and bison from Canada be individually identified and ones not for 

immediate slaughter be permanently identified as originating in Canada.

4

We expect that the rule will have, at most, minimal impact on the number and type of 

bovines imported from Mexico. Mexico, like Canada, is classified by the OIE as a country of 

controlled risk for BSE and APHIS is likewise classifying Mexico as controlled risk for BSE. 

Currently, there are no BSE age-related restrictions on cattle from Mexico. As a region of 

controlled risk for BSE under this rule, Mexico will be allowed to export to the United States 

only those live bovines born on or after the date a ruminant-to-ruminant feed ban was effectively 

enforced in that country. In this rule, APHIS is establishing November 30, 2007, as the date of 

effective enforcement of a feed ban in Mexico. Nearly all cattle imported from Mexico (98 to 99 

percent) are estimated to be less than 24 months of age.5 Bovine imports from Mexico therefore 

will be essentially unaffected since Mexico’s feed ban has been effectively enforced for more 

than five years. 

                                                            

3

 The effective enforcement date in Canada was March 1, 1999. 4

 Under the rule, live bovines from Canada for immediate slaughter will not be subject to the country of origin 

identification requirement 

5

 Data on the age of cattle imported into the United States from Mexico are not available. This estimate of the 

percentage of animals less than 24 months of age was provided by USDA’s Economic Research Service. It is 

consistent with anecdotal evidence, including the observations of APHIS port veterinarians. It is also consistent with 

trade statistics that classify cattle imports by the animals’ weight, thereby providing a strong clue as to their age. In 

2010, for example, 56.0 percent of all cattle imports from Mexico weighed less than 200 kilograms (KG), a weight 

category likely to be comprised almost entirely of cattle less than 12 months of age. Cattle imports from Mexico in 

2010 weighing from 200 KG to less than 320 KG, which accounted for 42.6 percent of all cattle imports from 

Mexico that year, are likely to be comprised almost entirely of cattle between 12 and 24 months of age. Many cattle 

weighing 320 KG or more (1.4 percent of all 2010 imports from Mexico) are also likely to be less than 24 months of 

age. 
4

Nor should the requirements relating to animal identification pose a significant problem 

for Mexican exporters. As with imports from Canada, current regulations require that all imports 

of cattle from Mexico be individually identified. Current regulations also require that all steers 

and spayed heifers from Mexico be permanently identified as originating in that country. 

Virtually all U.S. imports from Mexico in past years have been steers and spayed heifers that are 

not for immediate slaughter. Because opportunities for feeder cattle sales within Mexico are 

limited, cattle imports from that country tend to be lighter cattle for stocker operations and 

eventual finishing in U.S. feedlots. Most, or all, of the few imports that are not steers and spayed 

heifers are also permanently identified as originating in Mexico, by way of requirements 

established by the importing States bordering Mexico. 

We anticipate that this rule is unlikely to have a significant impact on imports of cattle 

and bison into the United States from countries other than Canada and Mexico. Such imports 

have been extremely limited in the past, primarily because exporters in geographically distant 

countries are at a significant competitive disadvantage in the U.S. livestock market, given the 

added cost of transporting the animals to the United States. The rule will not remove that 

disadvantage. Therefore, we believe importation of more than a minimal number of live bovines 

from countries other than Canada and Mexico is highly unlikely, with or without the rule in 

effect.

6

 Nearly all of the 36 countries subject to the BSE ban on live bovines are located in 

Europe. 

                                                            

6

 Imports of live bovines from regions classified as being of undetermined risk for BSE will be prohibited under this 

rule. Therefore, some regions that are not currently subject to any BSE-related restrictions under APHIS regulations 

will be prohibited from shipping live bovines to the United States. However, the prohibition should have little or no 

practical impact, as the United States has imported only one live bovine since 1996 from any region currently 

classified by the OIE as undetermined risk (from Guatemala in 2002). 
5

Products Derived from Bovines 

The potential for increased U.S. imports of bovine-derived products under this rule is 

greater than that for live bovines, if for no other reason than the former can be shipped more 

easily and at less cost. For foreign exporters of bovine products, geographical proximity to the 

U.S. market is not necessarily predictive of export potential, as evidenced by imports from 

Australia and New Zealand. Nevertheless, any impact of the rule on bovine product imports will 

likely be at most minimal. 

We expect that this rule will have little or no impact on imports from Argentina, 

Australia, Brazil, Canada, New Zealand, and Uruguay. These six countries have been the source 

of most U.S. imports of bovine products in recent years.

7

 Over the five-year period 2007-2011, 

they accounted for 91 percent of all U.S. bovine product import volume (and 90 percent of the 

import value).

8

 Imports from each of the six countries should continue essentially unchanged 

and without interruption, because the protocols in place in those countries are already in full 

compliance with the criteria established by this rule. In this regard, for imports from Argentina, 

Australia, New Zealand, and Uruguay—countries that APHIS is classifying as negligible risk for 

                                                            

7

 Unless noted otherwise, “bovine products” in this analysis includes commodities categorized by the Harmonized 

Tariff Schedule (HTS) as meat of bovine animals (fresh/chilled, frozen); bovine edible offal (fresh/chilled, frozen); 

bovine meat and edible offal, cured; beef sausage and similar products; and bovine meat and edible offal, not 

elsewhere specified, prepared or preserved. The HTS does not offer the level of detail necessary to identify all of 

the products specified in this rule. It does not, for example, allow for the disaggregation of imports of meat and meat 

products derived from animals over and under 12 months of age at the time of slaughter, a factor affecting certain 

imports from OIE countries of undetermined risk. Nor does the HTS allow for the identification of imports of 

ruminant meat and bone meal (MBM), or products that contain ruminant MBM as an ingredient, possibly including 

some pet foods. To the extent that the volumes and values shown in this analysis for U.S. imports of bovine 

products include products unaffected by this rule, or exclude products affected by this rule, those data overstate or 

understate imports of affected commodities. However, any such overstatement or understatement is minor relative 

to overall U.S. bovine product imports 

8

 During the 5-year period 2007-2011, U.S. imports of bovine products from all sources averaged 0.86 million 

metric tons annually. 
6

BSE and that have never reported a case of BSE—the product import conditions related to a 

ruminant-to-ruminant feed ban will not be a factor.

9

Imports from Canada and Brazil, both of which we are classifying as controlled risk 

regions for BSE, already satisfy, by way of FSIS requirements, the requirement that products 

from regions of controlled risk for BSE not contain mechanically separated meat from the skull 

and vertebral column of animals over 30 months of age. Also by way of FSIS requirements, all 

six countries already satisfy the requirement for satisfactory ante- and post-mortem inspections, 

and Canada and Brazil already satisfy the provisions prohibiting the export of certain animal 

tissues and certain animal stunning or pithing.

10

 The volume of imports from the 36 (primarily European) countries prohibited from 

shipping bovine products to the United States will be likely insignificant. (Most of these 

countries are classified by the OIE as either controlled or negligible risk for BSE.) Even prior to 

the prohibition on ruminant meat, meat products, and other edible products from all of Europe in 

1997, U.S. imports of bovine products from the 36 countries were negligible when measured 

against total U.S. imports of those commodities.

11 In none of the years from 1990 through 1996 

did the volume of U.S. bovine product imports from all 36 countries account for more than 0.6 

percent of the volume of those imports from all countries combined. In 1996, the year 

                                                            

9

 For negligible risk regions that have never reported a case of BSE, there will be no product import conditions 

related to the date of a feed ban. However, in countries of negligible risk for BSE where there has been an 

indigenous case of BSE, the commodity will be required to be derived from bovines that passed ante-mortem and 

post-mortem inspection and were subject to a ban on the feeding of processed animal protein derived from 

ruminants to ruminants. 

10 With certain exceptions, the prohibition on animal tissue imports from countries of controlled risk for BSE covers: 

(a) tonsils and distal ileum from animals of any age; and (b) brains, eyes, spinal cord, skull and vertebral column 

from animals over 30 months of age at the time of slaughter. For countries of negligible risk for BSE such as 

Argentina, Australia, New Zealand, and Uruguay, such provisions will not apply. 11 BSE-related restrictions on imports of ruminant products were first established by APHIS in 1991, but the 

restrictions did not prohibit beef imports if certain conditions were met. In late 1997, APHIS prohibited ruminant 

and ruminant product imports from all of Europe. (Imports from Japan were prohibited in September 2001 but the 

prohibition was lifted—for whole cuts of boneless beef only—in December 2005.) 
7

immediately prior to the prohibition of most ruminant commodities from all of Europe, U.S. 

imports of bovine products from all 36 countries combined totaled 1,146 metric tons, with a 

value of $5.4 million. By comparison, overall U.S. imports of bovine products that year totaled 

730,270 metric tons, with a value of $1.38 billion.

12

In 1996, U.S. imports of bovine products from all 36 countries were spread over 11 

different product categories. In none of those categories did the volume of U.S. imports from all 

36 countries combined exceed 828 metric tons; for 9 of the 11 categories, the volume of U.S. 

imports from all 36 countries combined was 87 metric tons or less. Moreover, for each of the 

two categories that did exceed 87 metric tons—bovine cuts with bone in (fresh/chilled) at 119 

metric tons and bovine meat (prepared/preserved) at 828 metric tons—the volume of imports 

from the 36 countries accounted for less than two percent of the volume of U.S. overall imports 

of these commodities. For 9 of the 11 categories, the 36 countries’ combined share of total U.S. 

imports was no higher than 7.8 percent; for beef sausages (canned) and beef sausages (in airtight 

containers, but not canned), the 36 countries’ combined share of total U.S imports was 77 percent 

and 100 percent, respectively, but the volume of imports of those products was miniscule.

13 

These data indicate that, in the past, the 36 countries have not been a source of significant 

quantities of bovine products for the U.S. market. 

Nor does recent EU trade in bovine products suggest a significant volume of imports 

from the 36 countries in the future, at least in the near term. While the nominal value of bovine 

product exports by the European Union (EU-27) increased more than four-fold in five years, 

from $0.36 billion in 2007 to nearly $1.57 billion in 2011, the value of bovine product imports 

                                                            

12 Department of Commerce, U.S. Census Bureau, as reported by USDA Foreign Agricultural Service. 

13 Ibid. In 1996, the U.S. imported 22 metric tons of beef sausage (canned) and 0.1 metric ton of beef sausage (in 

airtight containers, not canned) from all sources, including the 36 countries. During the period 2007-2011, Brazil 

was the source of 94 percent and Canada was the source of 2 percent of U.S. imports of all beef sausage (including 

sausage not in airtight containers). Annual imports over these five years averaged 791 metric tons. 
8

by EU-27 member countries in 2011 ($2.42 billion) exceeded the value of their bovine product 

exports by more than $850 million.

14 The EU-27 continues to be a large net importer of bovine 

products overall. Emerging markets, such as Russia, are likely to take a growing share of 

Europe’s bovine product exports.15

Over the five years 2007-2011, EU-27 bovine product exports averaged about 247,900 

metric tons. Even if it is assumed that 5 percent (12,395 metric tons) of those exports were 

diverted to the U.S. market as a result of the rule, imports from the EU-27 countries would be 

equivalent to only about 1.5 percent of total U.S. bovine product imports, which averaged 

approximately 856,500 metric tons over the same period. 

Imports of boneless beef from Japan, which is classified by the OIE as a country of 

controlled risk for BSE and which APHIS likewise is classifying as controlled risk for BSE, will 

be unaffected by the proposal.

16 This is because those imports already satisfy, largely by way of 

FSIS requirements, the requirements for imports from regions of controlled risk for BSE. Any 

new imports from Japan, which is allowed to ship whole cuts of boneless beef to the United 

States under certain conditions, will likely be miniscule. Over the 15-year period from 1990 to 

2004, Japan’s exports of bovine products worldwide never exceeded 772 metric tons in any one 

                                                            

14 Data for the EU-27 members exclude intra-EU trade. While member countries of the European Union for the most 

part match the European regions listed in 9 CFR § 94.18, for which importation of meat and edible products from 

ruminants are restricted due to BSE, there are some differences. EU-27 members not listed in § 94.18 are Cyprus, 

Estonia, Latvia, Lithuania, and Malta. European regions listed in § 94.18 that are not EU-27 members are Albania, 

Andorra, Bosnia-Herzegovina, Croatia, the Federal Republic of Yugoslavia (now Kosovo under UN Security 

Council Resolution 1244, Montenegro, and Serbia), the former Yugoslav Republic of Macedonia, Liechtenstein, 

Monaco, Norway, San Marino, and Switzerland. 

15 The nominal value of Russian Federation bovine product imports rose 38 percent over the five-year period 2007-

2011, from $1.90 billion to $2.63 billion. 

16 Over the five-year period 2007-2011, Japan’s annual exports of boneless cuts to the United States averaged 175 

metric tons, less than 0.03 percent of all U.S. boneless cut imports. Beef imports from Japan are a unique product 

that serves a high-priced specialty market. The specialty meat, called "Wagyu beef," comes from cattle genetically 

predisposed to intense marbling. The term “Kobe beef” refers to Wagyu beef that is produced in the Kobe area of 

Japan. 
9

year.

17 Given the aforementioned factors, as well as U.S. import history, this rule is unlikely to 

result in a significant volume of imports from the 36 countries listed in 9 CFR § 94.18. 

Finally, although this rule may affect imports from countries other than Argentina, 

Australia, Brazil, Canada, New Zealand, Uruguay, and the 36 countries listed in 9 CFR § 94.18, 

we believe that any such impact will be minimal. Imports from such other countries are not 

currently subject to BSE-related restrictions under APHIS regulations, but will be subject to 

BSE-related restrictions under this rule. Over the five years 2007-2011, annual imports from 

such other countries as a group averaged 8 to 9 percent of all U.S. bovine product imports by 

volume (10 to 11 percent by value), with over 95 percent of these products coming from Mexico, 

Nicaragua, and Costa Rica. Imports from Mexico, which we are classifying as a region of 

controlled risk for BSE, will likely be unaffected because such imports already meet the 

requirements of the rule largely by way of FSIS requirements. 

The potential impact of this rule on imports from Nicaragua and Costa Rica, which we are 

recognizing as regions of undetermined risk for BSE, should be minimal at most. This is 

because almost all imports from those two countries are of boneless beef that already satisfy the 

rule’s requirements, again largely by way of FSIS requirements.

18

The rule’s potential impact on imports from other countries in this grouping (i.e., other 

than Mexico, Nicaragua, and Costa Rica) is uncertain. As regions of undetermined risk for BSE, 

they will be required to certify that the bovines from which certain commodities intended for 

export were derived were not fed processed animal protein derived from ruminants, a 

requirement they are not subject to now. Whether these other countries will be able to make such 

                                                            

17 United Nations Statistics Division. Japan’s exports of beef sausages, if any, are not included. 18 Over the five-year period 2007-2011, boneless products comprised over 99 percent of Nicaragua’s and Costa 

Rica’s bovine product exports to the United States (USDA FSIS Office of International Affairs). 
10

a certification is unknown. Also, as countries of undetermined risk for BSE, these other 

countries will be prohibited from exporting products that contain mechanically separated meat 

from the skull and vertebral column of animals over 12 months of age. Currently, they are 

prohibited from exporting products that contain mechanically separated meat from the skull and 

vertebral column of animals over 30 months of age.

19 Under this rule, these other countries will 

have the option of requesting that APHIS conduct an evaluation to determine if they qualify for a 

BSE risk classification other than undetermined. However, even if shipments from these other 

countries were to cease altogether under the rule, the impact on the overall volume of U.S. 

bovine product imports would be insignificant, given their extremely small share (0.4 percent by 

volume and 0.6 percent by value, 2007-2011). 

In sum, we believe that any impact of this rule on imports into the United States of 

products derived from bovines will be minimal at most. In this regard, a very possible scenario 

is one in which a small volume of new imports (from the 36 countries listed in 9 CFR § 94.18) is 

offset entirely or in large part by a small decline in the volume of imports from other countries 

subject to new restrictions. 

A commenter on the proposed rule stated that adopting the proposed changes could result 

in BSE-infected cattle entering the United States and cause the loss of export markets. Another 

commenter expressed concern that detection of BSE in imported cattle could cause domestic 

consumers to lose confidence in beef, resulting in economic harm to the U.S. cattle industry. 

                                                            

19 In addition to the feed ban certification for certain products and the prohibition on products that contain 

mechanically separated meat from the skull and vertebral column of animals over 12 months of age, the conditions 

for imports from BSE-undetermined risk regions: (1) require satisfactory ante- and post- mortem animal inspections; 

(2) prohibit the import of certain animal tissues; and (3) prohibit the import of products derived from animals 

subjected to an air- or gas-injected stunning process or a pithing process. With certain exceptions, the OIE 

prohibition on animal tissue exports from undetermined risk countries covers: (a) tonsils and distal ileum from 

animals of any age; (b) brains, eyes, spinal cord, skull and vertebral column from animals over 12 months of age at 

the time of slaughter; and (c) nervous and lymphatic tissues exposed during the deboning process. 
11

We disagree with the commenters. We are confident that the risk mitigation measures in 

this rule will be effective at preventing BSE-infected cattle from being imported into the United 

States. We note that economic effects of the most recent BSE case in the United States, 

confirmed on April 24, 2012, in a dairy cow in California, were not significant, as evidenced by 

U.S. beef price levels and beef and cattle exports. Monthly retail prices of choice beef averaged 

$4.93 per pound for the 12 months between April 2011 and March 2012.20 For the following 12 

months, April 2012 through March 2013, the average monthly retail price of choice beef was 

$5.03 per pound. Comparing narrower time frames, for the 4-month period January 2012 

through April 2012, the average monthly retail price was $5.04 per pound, compared to an 

average monthly price of $4.96 per pound for the 4 months between May 2012 and August 2012; 

that is, choice beef prices over the 4 months following the BSE discovery were less than 2 

percent lower than prices during the 4 months preceding the discovery. A variety of marketing 

factors influence price movements, and this percentage decline in 4-month average price levels is 

well within normal market fluctuations. 

With respect to U.S. beef exports, for the 12 months before the BSE discovery, monthly 

exports averaged about 71,500 metric tons (MT), valued at about $383 million, compared to a 

monthly average of about 64,300 MT, valued at about $391 million, during the 12 months 

following the discovery. It appears unlikely that much of this year-on-year quantity decline can 

be attributed to the BSE discovery when one compares average monthly U.S. beef export levels 

during the 2 months before and 2 months after the BSE discovery. The quantity of beef exported 

by the United States in March and April, 2012, averaged about 63,800 MT per month, valued at 

about $384 million, compared to an average for May and June 2012 of 65,700 MT per month, 

valued at about $394 million. 

                                                            

20 http://www.ers.usda.gov/data-products/meat-price-spreads.aspx 
12

U.S. monthly cattle exports averaged about 16,700 head, valued at $32.4 million, during 

the year preceding the 2012 BSE discovery, compared to a monthly average of about 15,100 

head, valued at $30.9 million, during the year following the BSE discovery. Again, this 

difference falls well within the range of monthly variation. Considering only the 2 months 

before and 2 months after the BSE discovery, exports for March and April 2012 averaged about 

12,100 head per month, valued at $20.9 million, compared to about 17,900 head per month for 

May and June 2012, valued at $39.0 million. 

Cervids and Camelids and their Products 

Live Cervids and Camelids 

Under this rule, the removal of the prohibition of the importation of live cervids and 

camelids from the 36 countries listed in 9 CFR § 94.18 will likely have little or no impact. 

Cervids and camelids are not typically imported into the United States from those countries. The 

trade data indicate that the United States has not imported any live cervids or camelids from the 

36 countries since at least 1990. Furthermore, nearly all of the 36 countries subject to the ban are 

located in Europe, a situation that puts potential exporters in those countries at a significant 

competitive disadvantage in the U.S. market compared to neighboring countries, given the added 

cost of transporting the animals to the United States. This rule will not remove that 

disadvantage. Importation of more than a very small number of live cervids and camelids from 

the 36 countries, therefore, is highly unlikely, with or without this rule. 

Products Derived from Cervids and Camelids 

We anticipate that the volume of imports from the 36 (primarily European) countries 

listed in 9 CFR § 94.18 of products derived from cervids or camelids will likely be insignificant 

under the rule. Before the prohibition of ruminant meat, meat products, and other edible 
13

products from all of Europe in 1997, U.S. imports of meat and edible offal of deer from the 36 

countries were negligible when judged against total U.S. imports of those commodities.

21 In 

none of the years from 1990 through 1996 did the volume of U.S. imports of meat and edible 

offal of deer from all 36 countries exceed 23 metric tons or account for more than 3.3 percent of 

the volume of those imports from all countries.

22 For the five years 2007-2011, annual U.S. 

imports of meat and edible meat offal of deer averaged 994 metric tons, valued at $10.95 million. 

Over 99 percent was supplied by New Zealand. 

The volume of U.S. imports of camelid products is very small. Their annual value 

averaged less than $50,000 over the five-year period 2007-2011, and 90 percent of those imports 

were supplied by Canada and China.

23

Expected Benefits and Costs, and Alternatives to the Rule 

 As discussed, this rule is expected to have, at most, a minimal impact on U.S. imports of 

live bovines, cervids, camelids, and their products. Consumers benefit from imports to the extent 

that consumer choice is broadened and the increased supply of the imported commodity leads to 

a price decline.

24 We anticipate that the rule will have little impact on consumer choice or import 

volumes. Likewise, we anticipate little or no impact for U.S. businesses because of changes in 

import volumes. 

                                                            

21 A search of the trade data shows that since 1990, U.S. imports of cervid and camelid products from all sources 

have been in three different product categories: (1) meat and edible offal of deer; (2) deer skins; and (3) camel hair. 

Only meat and edible offal of deer will be affected by this proposal; APHIS regulations do not currently restrict or 

prohibit the importation of deer skins or camel hair. 

22 Department of Commerce, U.S. Census Bureau, as reported by USDA Foreign Agricultural Service. 

23 Ibid 

24 Imports of a commodity generally serve to increase net social welfare, with gains in consumer surplus 

outweighing losses in domestic producer surplus. (Consumer surplus is the difference between the amount a 

consumer would be willing to pay for a good and the amount actually paid. Producer surplus is the difference 

between the amount a seller actually receives for a good and the amount he would be willing to receive.) 
14

Although the impact of this rule on U.S. consumers and producers is expected to be 

minimal, the benefits of the rule are expected to justify its costs. Leaving the bovine regulations 

unchanged would be unsatisfactory, because it would perpetuate the current situation in which 

our BSE-related import conditions are not fully supported by scientific evidence. Additionally, 

maintaining the status quo would not provide an opportunity to recognize a region’s BSE risk 

status in a more timely fashion than is possible under current regulations. Another alternative, 

amending the BSE regulations related to the importation of bovines and bovine-derived products 

to match precisely the OIE Code without allowing for modification deemed necessary by 

APHIS, would also, we believe, be unsatisfactory, because it would not allow APHIS to 

independently interpret the scientific literature and findings that underlie OIE risk categorization 

recommendations. Making no changes to the regulations that govern the importation of cervids 

and camelids would also be unsatisfactory, because it would perpetuate an unnecessary 

constraint on trade in those commodities. 

Final Regulatory Flexibility Analysis 

The Regulatory Flexibility Act (RFA) requires agencies to evaluate the potential effects 

of their proposed and final rules on small businesses, small organizations and small 

governmental jurisdictions. Section 604 of the Act requires agencies to prepare a final regulatory 

flexibility analysis that describes expected impacts of a rule on small entities. 

The purpose of the rule is to amend the import regulations related to BSE such that they 

continue to sufficiently guard against the introduction of BSE into the United States, while 

making the bovine and bovine product import restrictions more reflective of current scientific 

thinking. The process for classifying regions as to BSE risk will be based on a comprehensive 

review of relevant, internationally accepted scientific literature and will be consistent with the 
15

process employed by the OIE. The process will use risk categories for bovines and bovine 

products (negligible, controlled, and undetermined) and criteria that are also used in the OIE 

Code. Whether a bovine or a bovine-derived product is eligible for importation into the United 

States, and under what conditions, will in many cases be determined by the BSE category of the 

region from which the animal or product originates. We are also removing BSE restrictions on 

the importation of cervids and camelids and products derived from such animals. The objective 

is to bring the import regulations related to BSE into closer alignment with our scientific 

understanding of this disease. 

No significant issues were raised by public comment in response to the initial regulatory 

flexibility analysis. Also, no comments were filed by the Small Business Administration’s 

Office of Advocacy in response to the proposed rule. 

Trade in live bovines, cervids, and camelids, and their products, has the potential to affect 

U.S. entities engaged in the production, processing, and sale of those commodities. They include 

cow-calf producers, cervid and camelid producers, feedlot establishments, slaughtering 

establishments, meat packing and processing establishments, meat wholesalers, importers and 

exporters, grocery stores and meat markets, and manufacturers of cosmetics and pharmaceuticals. 

Sales and employment information confirms the prevalence of small entities in the industries 

potentially affected, as categorized by the North American Industry Classification System 

(NAICS). The small-entity estimates are based on U.S. Small Business Administration (SBA) 

size standards. 

In terms of numbers of entities, beef cattle ranching and farming (NAICS 112111) is the 

largest single industry that could be affected. In 2007, there were 656,475 establishments in this 

industry, and their average annual sales were less than $42,000, significantly below the small- 
16

entity standard of not more than $750,000.

25 That same year, there were 57,318 entities engaged 

in dairy cattle and milk production (NAICS 112120), and their average annual sales were about 

$606,000, much higher than for beef producers but still well below the small-entity standard of 

$750,000.

26 In 2007, there were 31,065 cattle feedlots (NAICS 112112). Average receipts for 

these establishments were $974,000, compared to the small-entity threshold of $2.5 million.

27

For the industries, animal (except poultry) slaughtering (NAICS 311611) and meat 

processed from carcasses (NAICS 311612), the small-entity standard is not more than 500 

employees. Based on numbers of full-year establishments in these industries in 2007 (1,597 and 

1,379, respectively), 92 percent and 80 percent of the establishments employed fewer than 100 

employees.28

The small-entity standard for meat and meat product merchant wholesalers (NAICS 

424470) is not more than 100 employees. Of the 2,295 full-year establishments in this industry 

in 2007, over 96 percent were small according to this criterion.

29 For supermarkets and other 

grocery (except convenience) stores (NAICS 445110), there were 55,926 establishments that 

operated throughout 2007 and their average receipts were $8.2 million, significantly below the 

small-entity threshold of $30 million.

30 The small-entity standard for meat markets (NAICS 

                                                            

25 Animal products such as gelatin are used in the manufacture of cosmetics and pharmaceuticals. 26 USDA NASS, 2007 Census of Agriculture. 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_1_046_04 6.pdf 27 Ibid. 

28 Ibid. 

29 Department of Commerce, 2007 Economic Census. http://factfinder.census.gov/servlet/IBQTable?_bm=y&-

geo_id=&-ds_name=EC0731I1&-_lang=en. 

30Department of Commerce, 2007 Economic Census. http://factfinder.census.gov/servlet/IBQTable?_bm=y&-

geo_id=&-fds_name=EC0700A1&-_skip=2900&-ds_name=EC0742SSSZ2&-_lang=en 
17

445210) is annual receipts of not more than $7 million; average receipts for the 5,108 

establishments in this industry in 2007 were about $1 million.

31

Clearly, most businesses that may be directly affected by the rule are small. However, as 

has been described, any effects in terms of changes in U.S. imports of live bovines, cervids, 

camelids, or their products are expected to be minor. This rule contains no mandatory reporting, 

recordkeeping, or other compliance requirements for U.S. entities. 

The RFA requires agencies to identify, to the extent practicable, any Federal rule that may 

duplicate, overlap or conflict with this rule. APHIS has not identified any duplication, overlap, 

or conflict of this rule with other Federal rules. 

Finally, the RFA requires agencies to describe steps taken to minimize significant 

economic impacts of the rule on small entities. As indicated above, APHIS considers it unlikely 

that the rule will have a significant economic impact on small entities. 

                                                            

31 Ibid.