### United States Department of Agriculture Animal and Plant Health Inspection Service July 2014 

# USDA Analysis in Support of Certification that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities Interim Rule 2014-0058 Advance seven Michigan Counties to Accredited Free TB Status

Policy & 

### Program Development PolicyAnalysis & 

### Development

### Summary Michigan has submitted a request for split-State bovine tuberculosis (TB) status that will advance seven counties onthe LowerPeninsulaofMichigan (Antrim, Charlevoix, Cheboygan, Crawford, Emmet, Otsego, and Presque Isle) from modified accredited advanced to accredited free status. This status advancement will eliminate pre-movement testing requirements for producers in the seven counties, saving them time and money. Based onnational statistics and Small Business Administration size standards, most ifnot all ofthe cattle and dairy operations affected are likely to be small entities. The number ofherds in the seven counties that require surveillance testing will be reduced from about 390 to less than 120. TB testing, including veterinary fees, costs about $10 to $15 perhead. Based onan estimated 33 head perherd, total annual cost savings are expected to range between $90,000 and $135,000 yearly in the seven counties. The average value ofcattle and calves in Michigan is about $1,100 perhead. Thus, the savings by forgoing TB testing represent about 1.3 percent ofthe average value ofthe animals. This action will not significantly changeprogram operations and will have no significant effects
onotherFederal agencies, State government orlocal governments. The Administrator ofthe Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number ofsmall entities.

### Table of Contents Summary
..............................................................................................................................i Introduction
......................................................................................................................... 1 Potential Impact on Small Entities
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### Introduction This analysis provides the basis, as required by the Regulatory FlexibilityAct, for certification by the APHIS Administratorthat the interim rule, ifpromulgated, will not have a significant economic impact ona substantial number ofsmall entities. Bovine tuberculosis (TB) is a contagious and infectious granulomatous disease caused by the bacterium Mycobacterium bovis. Although commonly defined as a chronic debilitating disease, bovine tuberculosis can occasionally assume an acute, rapidlyprogressive course. While any body tissue canbe affected, lesions are most frequently observed in the lymph nodes, lungs, intestines, liver, spleen, pleura, and peritoneum. Although cattle are consideredto be the true hosts ofM. bovis, the disease has been reported in several other species ofboth domestic and nondomestic animals, as well as inhumans. The Cooperative State-Federal Tuberculosis Eradication Program, which began in 1917, is administered byAPHIS, State animal health agencies, and livestock producers. This program has nearly eradicated bovine TB from the Nation's livestock population. Transmissionto humans has beenreduced as a result ofthe eradicationprogram, advances in sanitation and hygiene, the discovery ofeffective drugs, and pasteurization ofmilk. Based upon the prevalence ofbovine TB in cattle and bison and the number ofherds found to be affected, the bovine tuberculosis regulations (9 CFRpart 77) classify States into five status stages. These five stages are: non-accredited, accreditedpreparatory, modified accredited, modified accredited advanced, and accredited free. Lower status translates into more restrictive movement requirements. Additionally, a zone with a different status can be formed within a State
on a case-by-case basis (commonlyreferred to as "split-State status").

1The State ofMichiganhas asked that the TB status ofseven counties (Antrim, Charlevoix, Cheboygan, Crawford, Emmet, Otsego, and Presque Isle) be advanced from modified accredited advanced to accredited free. APHIS has determined that Michigan's applicationto change the TB status ofthe seven counties meetsprogram standards. 

### Potential Impact on Small Entities The cattle and dairyindustries play importantroles in Michigan's economy. In 2012, there were 10,677 cow-calffarms with a total of 1.1 million head. 1These totals remained largely unchanged in 2013. Sales bythe State's beefand dairy sectors totaled $603 million and $1.5 billion, respectively.2 This rule will directly affect very small shares ofthese sectors. The Small Business Administration (SBA) has established guidelines for determining which businesses are considered small. According to SBA size standards for beefcattleranching and farming (NAICS 112111) and for dairy cattle and milk production (NAICS 112120), operations with not more than $750,000 in annual sales are considered small entities. Nationally in 2012, 98 percent ofcattle and calffarms and 73 percent ofdairy farms generated less than $500,000 in cash receipts.3 Based onthese national statistics and the SBA size standards, most if not all ofthe cattle and dairy operations affected are likely to be small entities. Herd owners inthe seven counties advanced from modified accredited advanced to accredited free TB status will save time and money due to elimination ofpre-movement

12012 Census ofAgriculture- State Data and NASS statistics Livestock, Dairy and Poultry http://www.nass.usda.gov/Statistics by State/Michigan/Publications/ Annual Statistical Bulletin/stats13/li vestock.pdf 2 2012 Census ofAgriculture- State Data http://www.agcensus.usda.gov/Publications/2012/Full Report/Volume I, Chapter 2 US State Level/st9 9 2 002 002.pdf 3 2012 Census ofAgriculture table 66 http://www.agcensus.usda.gov/Publications/2012/Full ReportNolume 1, Chapter l US/st99 1 066 066 .pdf 2surveillance testing requirements. However, the cost savings will be small. TB testing costs are low compared to the value ofcattle, and relatively few producers will be affected. The number ofherds in the seven counties thatrequire surveillance testing will be reduced from about 390 to less than 120. TB testing, including veterinary fees, costs about $10 to $15 perhead. Based onan estimated 33 head perherd, total annual cost savings are expected to range between $90,000 and $135,000 yearly in the seven counties. The average value ofcattle and calves inMichigan is about $1,100 perhead. Thus, the savings by forgoing TB testing represent about 1.3 percent ofthe average value ofthe animals. This action will not significantly change program operations and will have no significant effects
on otherFederal agencies, State government orlocal governments. TheAdministrator ofthe Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number ofsmall entities

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