33030 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Parts 16 and 118 

[Docket No. FDA–2000–N–0190] (Formerly 

Docket No. 2000N–0504) 

RIN 0910–AC14 

Prevention of Salmonella Enteritidis in 

Shell Eggs During Production, 

Storage, and Transportation 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is issuing a final 

rule that requires shell egg producers to 

implement measures to prevent 

Salmonella Enteritidis (SE) from 

contaminating eggs on the farm and 

from further growth during storage and 

transportation, and requires these 

producers to maintain records 

concerning their compliance with the 

rule and to register with FDA. FDA is 

taking this action because SE is among 

the leading bacterial causes of 

foodborne illness in the United States, 

and shell eggs are a primary source of 

human SE infections. The final rule will 

reduce SE-associated illnesses and 

deaths by reducing the risk that shell 

eggs are contaminated with SE. 

DATES: This final rule is effective 

September 8, 2009. The Director of the 

Office of the Federal Register approves 

the incorporation by reference in 

accordance with 5 U.S.C. 552(a) and 1 

CFR part 51 of certain publications in 

new 21 CFR 118.8 as of September 8, 

2009. Please see section II.C of this 

document for the compliance dates of 

this final rule. Submit comments on 

information collection issues under the 

Paperwork Reduction Act of 1995 by 

August 10, 2009 (see the ‘‘Paperwork 

Reduction Act of 1995’’ section of this 

document). 

FOR FURTHER INFORMATION CONTACT: John 

Sheehan, Center for Food Safety and 

Applied Nutrition (HFS–315), Food and 

Drug Administration, 5100 Paint Branch 

Pkwy., College Park, MD 20740, 301– 

436–1488. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

A. FDA’s Proposed Rule 

B. What Are Salmonella and SE Infection? 

C. What Is the Connection Between 

Salmonella and Shell Eggs? 

D. The U.S. Egg Industry 

E. Current On-Farm Practices 

F. Voluntary EQAPs 

G. The Food Code 

H. Rationale for the Final Rule 

II. Highlights of the Final Rule and Summary 

of Significant Differences Between the 

Proposed and Final Rules 

A. Highlights of the Final Rule 

B. Significant Differences Between the 

Proposed and Final Rules 

C. Compliance Dates 

III. Comments on the Proposed Rule 

A. General Comments 

B. Comments on ‘‘Persons Covered by the 

Requirements in This Part’’ (Proposed 

and Final § 118.1) 

C. Comments on ‘‘Definitions’’ (Proposed 

and Final § 118.3) 

D. Comments on ‘‘Salmonella Enteritidis 

(SE) Prevention Measures’’ (Proposed 

and Final § 118.4) 

E. Comments on ‘‘Environmental Testing 

for Salmonella Enteritidis (SE)’’ 

(Proposed and Final § 118.5) 

F. Comments on ‘‘Egg Testing for 

Salmonella Enteritidis (SE)’’ (Proposed 

and Final § 118.6) 

G. Comments on ‘‘Sampling Methodology 

for Salmonella Enteritidis (SE)’’ 

(Proposed and Final § 118.7) 

H. Comments on ‘‘Testing Methodology for 

Salmonella Enteritidis (SE)’’ (Proposed 

and Final § 118.8) 

I. Comments on ‘‘Administration of the 

Salmonella Enteritidis (SE) Prevention 

Plan’’ (Proposed and Final § 118.9) 

J. Comments on ‘‘Recordkeeping 

Requirements for the Salmonella 

Enteritidis (SE) Prevention Plan’’ 

(Proposed and Final § 118.10) 

K. Comments on ‘‘Registration 

Requirements for Shell Egg Producers 

Covered by the Requirements of This 

Part’’ (Final § 118.11) 

L. Comments on ‘‘Enforcement and 

Compliance’’ (Proposed and Final 

§ 118.12) 

M. Comments on Request for Comments as 

to Whether FDA Should Mandate 

Special Requirements for Certain Food 

Establishments That Serve Highly 

Susceptible Populations 

IV. Legal Authority 

V. Analysis of Economic Impacts—Final 

Regulatory Impact Analysis 

A. Introduction 

B. Need for Regulation 

C. Comments on the Preliminary 

Regulatory Impact Analysis in the 

Proposed Rule and Responses 

D. Economic Analysis of Potential 

Mitigations: Overview 

E. Summary of Costs and Benefits of 

Regulatory Options and the Rule 

F. Benefits and Costs of Potential SE 

Prevention Measures: Detailed Analysis 

G. Summary of Benefits and Costs of the 

Final Rule 

VI. Final Regulatory Flexibility Analysis 

A. Introduction 

B. Economic Effects on Small Entities 

C. Regulatory Options 

D. Description of Recordkeeping and 

Recording Requirements 

E. Summary 

VII. Unfunded Mandates 

VIII. Small Business Regulatory Enforcement 

Fairness Act 

IX. Paperwork Reduction Act of 1995 

X. Analysis of Environmental Impact 

XI. Federalism 

XII. References 

I. Background 

A. FDA’s Proposed Rule 

On September 22, 2004, FDA 

proposed a rule to prevent SE 

contamination in shell eggs during 

production (the proposed rule) (69 FR 

56824). The proposed rule set out 

several measures to be taken by egg 

producers to prevent the contamination 

of shell eggs with SE during egg 

production, such as implementation of 

biosecurity and pest control programs, 

environmental and egg testing 

requirements, and requirements 

concerning refrigerated storage of eggs at 

the farm and diversion from the table 

egg market of eggs from flocks in which 

SE has been detected (69 FR 56824). 

In addition, in the proposed rule we 

solicited comments on whether we 

should include additional requirements 

in the final rule, particularly in two 

areas. First, we asked whether we 

should expand the proposed 

recordkeeping requirements to include a 

written SE prevention plan and records 

documenting compliance with the SE 

prevention measures (69 FR 56824 at 

56825 and 56841 through 56842). 

Second, we asked whether the safe egg 

handling and preparation practices in 

FDA’s Food Code (see http:// 

www.cfsan.fda.gov/∼dms/fc05-toc.html 

(accessed December 14, 2006)) should 

be federally mandated for 

establishments that specifically serve a 

highly susceptible population (such as 

nursing homes, hospitals, and daycare 

centers) (69 FR 56824 at 56825 and 

56849 through 56852). 

The proposed rule had a 90-day 

comment period, which ended on 

December 21, 2004. To discuss the 

proposed rule and solicit comments 

from interested stakeholders, FDA held 

three public meetings in 2004. Based on 

comments received in response to the 

proposed rule, FDA reopened the 

comment period on May 10, 2005, for 

the limited purpose of receiving 

comments and other information 

regarding industry practices and 

programs that prevent SE-monitored 

chicks from becoming infected by SE 

during the period of pullet rearing until 

placement into laying hen houses (70 

FR 24490). The term ‘‘pullet’’ refers to 

a chicken less than 20 weeks of age. On 

May 24, 2005, FDA received a request 

for an extension of the reopened 

comment period from two of the major 

trade associations representing egg 

producers and others affected by this 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33031 

rule. We agreed to extend the reopened 

comment period until July 25, 2005. 

B. What Are Salmonella and SE 

Infection? 

As we described in greater detail in 

the proposed rule (69 FR 56824 at 56825 

through 56827), Salmonella 

microorganisms are ubiquitous and are 

commonly found in the digestive tracts 

of animals, especially birds and reptiles. 

Human illnesses are usually associated 

with ingesting food or drink 

contaminated with Salmonella, 

although infection also may be 

transmitted person-to-person through 

the fecal-oral route where personal 

hygiene is poor or by the animal-to-man 

route (Ref. 1–2). 

All people are at risk for 

salmonellosis, although the severity of 

the infection is influenced by a person’s 

age and immune status. Salmonella 

infections are characterized by diarrhea, 

fever, abdominal cramps, headache, 

nausea, and vomiting. Symptoms 

usually begin within 6 to 72 hours after 

consuming a contaminated food or 

liquid and last for 4 to 7 days. Most 

healthy people recover without 

antibiotic treatment; however, the 

diarrhea can be severe, and the person 

may be ill enough to require 

hospitalization. In some patients, the 

infection can spread into the 

bloodstream, then to other areas of the 

body, such as the bone marrow or the 

meningeal linings of the brain. This 

infection can lead to a severe and fatal 

illness (Ref. 2). These complications 

associated with an infection are more 

likely to occur in children, the elderly, 

and persons with a weakened immune 

system. 

In addition, about 2 percent of those 

who recover from salmonellosis may 

later develop recurring joint pain and 

reactive arthritis (Ref. 3, 4). 

Salmonellosis is a serious health 

concern. It is a notifiable disease, i.e., 

physicians and health laboratories are 

required to report cases (single 

occurrences of illness) to local health 

departments in accordance with 

procedures established by each State. 

These cases are then reported to State 

health departments, and the Salmonella 

isolates are referred to State Public 

Health laboratories for serotyping (a 

method of distinguishing related 

organisms by their antigens). Each case 

and each serotyped isolate is reported to 

the U.S. Centers for Disease Control and 

Prevention (CDC). These reports are 

made only for diagnosed cases of 

Salmonella infection. 

A case of illness is confirmed as 

salmonellosis only if an isolate is 

confirmed by a laboratory as being 

Salmonella. Although all cases may not 

be confirmed, all confirmed cases are 

associated with isolates of Salmonella. 

Reported cases are likely to represent 

only a small portion of the actual 

number of illnesses that occur because 

of the following reasons: (1) Ill 

individuals do not always seek care by 

medical professionals, especially if the 

symptoms are not severe; (2) medical 

professionals may not establish the 

cause of the illness but may simply treat 

the symptoms; and (3) medical 

professionals do not always report 

Salmonella cases to public health 

officials. CDC estimates that there are 38 

cases of salmonellosis for every reported 

culture-confirmed case (Ref. 5). The 

overall burden of salmonellosis in 2001 

was estimated to be 1,203,650 cases, 

including 14,000 hospitalizations, and 

494 deaths (Refs. 6 and 7). Updated 

Salmonella surveillance data for 2004 

indicate that the burden of 

salmonellosis in 2004 was somewhat 

higher, estimated to be 1,376,514 cases, 

including 14,264 hospitalizations, and 

427 deaths (Refs. 5 and 8). 

CDC surveillance data list close to 600 

different Salmonella serotypes that have 

caused illness in the United States. 

Since 1995, Salmonella enterica 

serotype Enteritidis (SE) has been the 

second most frequently reported cause 

of Salmonella infection (Ref. 9). CDC 

reported that in 2008 SE was the leading 

reported cause of Salmonella infections, 

accounting for 20.1% of all of the 

Salmonella isolates that were serotyped 

(Ref. 10). The rate of SE isolates 

reported to CDC increased from 0.6 per 

100,000 population in 1976 to 3.6 per 

100,000 population in 1996 (Ref. 11– 

12). In 2001 the isolation rate for SE was 

2.0 per 100,000 population, and the 

annual contribution of SE (corrected for 

underreporting) to salmonellosis was 

estimated to be 193,463 illnesses, 

including 2,004 hospitalizations and 60 

deaths (Refs. 5 and 8). Estimated 

incidence of Salmonella infection in 

2008 did not change significantly 

compared with estimates for the 

preceding 3 years, and in particular the 

apparent increase in Salmonella 

infections was not significant. However, 

the incidence of SE did increase by 19% 

(CI = 3%–39%) (Ref. 10). These data 

confirm the continued significance of 

SE as a cause of human infection in the 

United States. 

In 1985, States reported to CDC 26 SErelated outbreaks (i.e., occurrences of 2 

or more cases of a disease related to a 

common source); by 1990 the number of 

SE-related outbreaks reported to CDC 

had increased to 85. The number of 

outbreaks began declining in the 1990s; 

in 1995 there were 56 confirmed 

outbreaks of SE infection, in 2000 there 

were 50, and in 2002 there were 32 (Ref. 

13). The number of outbreaks has 

remained roughly constant since 2002; 

in 2004 there were 28, in 2005 there 

were 35, and in 2006 there were 26 SE 

outbreaks in the United States (Ref. 13). 

Although these data indicate that there 

has been a decrease in reported 

outbreaks (and associated illness) linked 

to SE infection since the mid-1990s, the 

incidence of SE infection in the United 

States remains much higher than in the 

1970s (Ref. 14), and the decrease in 

reported outbreaks of SE illness since 

1999 has appeared to slow or stop 

compared to decreases seen in the mid1990s (Ref. 15). CDC recently reported 

that, of the four pathogens with HP2010 

targets, Salmonella, with 16.2 cases per 

100,000 in 2008, is the farthest from its 

2010 target (6.8) (Ref. 10). If current 

trends continue, we will fall short of the 

public health and foodborne illness 

gains required to meet the Healthy 

People 2010 goal of a 50 percent 

reduction from the 1997 baseline in 

both the number of SE foodborne 

outbreaks and the rate of isolation in the 

population of foodborne Salmonella 

infections (Ref. 16). 

C. What Is the Connection Between 

Salmonella and Shell Eggs? 

CDC established an epidemiological 

and laboratory association between eggs 

and Salmonella outbreaks in the mid1980s (see 69 FR 56824 at 56826 

through 56827). Shell eggs are the 

predominant source of SE-related cases 

of salmonellosis in the United States 

where a food vehicle is identified (a 

food vehicle is identified in 

approximately half of the outbreaks of 

illness associated with SE). Between 

1985 and 2002, a total of 53 percent of 

all SE illnesses identified through CDC 

outbreak surveillance are attributable to 

eggs. Where a vehicle of transmission 

was identified, 81 percent of outbreaks 

and 79 percent of illnesses identified 

through outbreaks were attributed to 

eggs (Ref. 17). These data are in accord 

with a published analysis by CDC 

researchers reporting that between 1990 

and 2001, 78 percent of vehicleconfirmed SE outbreaks were associated 

with eggs, primarily raw or 

undercooked (Ref. 15). Over that 

decade, 14,319 illnesses were attributed 

to SE associated with shell eggs (Ref. 

15). Most of these attributed illnesses 

occurred before 1995 (10,406 illnesses), 

but 3,913 occurred during 1996 through 

2001. We believe egg quality assurance 

programs (EQAPs), consumer and 

retailer education, and Federal 

regulations requiring egg refrigeration 

have contributed to the decrease in SE 

mstockstill on DSKH9S0YB1PROD with RULES2

33032 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

illness since the mid-1990s, but that 

further reductions in SE illness and 

foodborne salmonellosis cannot be 

accomplished without additional 

Federal measures to address SE 

contamination of shell eggs. 

The surface of an egg can become 

contaminated with any microorganism 

that might be excreted by a laying hen 

or through contact with contaminated 

nesting materials, dust, feedstuff, 

shipping and storage containers, human 

beings, and other animals. The 

likelihood of trans-shell penetration 

increases with the length of time that 

the eggs are in contact with 

contaminating materials. This 

mechanism of contamination was 

previously considered the source of all 

SE contamination of eggs. 

However, while environmental 

contamination is still a route for 

Salmonella contamination, SE experts 

now believe that the predominant route 

through which eggs become 

contaminated with SE is the 

transovarian route. Although the 

mechanism is still not well understood, 

SE will infect the ovaries and oviducts 

of some egg-laying hens, permitting 

transovarian contamination of the 

interior of the egg while the egg is still 

inside the hen (Refs. 18 and 19). The 

site of contamination is usually the 

albumen (the egg white). 

Researchers believe that only a small 

number of hens in an infected flock 

shed SE at any given time and that an 

infected hen may lay many 

uncontaminated eggs (Ref. 20). In a 

farm-to-table risk assessment of SE in 

eggs which was conducted by FDA and 

the U.S. Department of Agriculture’s 

(USDA’s) Food Safety and Inspection 

Service (FSIS) (‘‘the 1998 joint SE risk 

assessment’’) (Ref. 21), we estimated 

that of the 47 billion shell eggs 

consumed annually as table eggs (eggs 

consumed as shell eggs, as opposed to 

eggs that are used to make egg 

products), 2.3 million are SE-positive, 

exposing a large number of people to the 

risk of illness (Ref. 21). FDA and FSIS 

updated this risk assessment in 2005 

and derived this same estimate (Ref. 22). 

This figure is based on data compiled 

from 1991 to 1995 (Ref. 23). 

D. The U.S. Egg Industry 

On a per capita basis, Americans 

consume about 234 eggs per year (Ref. 

24). U.S. production is relatively stable 

and has increased only slightly over 

time. For example, it was at about 60 

billion eggs in 1984 and at 67.3 billion 

eggs in 1998 (Ref. 25). Generally, about 

70 percent of the edible shell eggs 

produced are sold as table eggs, while 

the remainder are processed into liquid, 

frozen, or dried pasteurized egg 

products. The majority of egg products 

are destined for institutional use or 

further processing into foods such as 

cake mixes, pasta, ice cream, 

mayonnaise, and bakery goods. 

Geographically, commercial egg 

production in the western United States 

is concentrated in California, and in the 

eastern United States is centered in 

Ohio, Indiana, Iowa, and Pennsylvania. 

Other States in which major producers 

are located include Texas, Minnesota, 

and Georgia. Over 4,000 farm sites have 

3,000 or more egg-laying hens, 

representing 99 percent of all domestic 

egg-laying hens and accounting for 99 

percent of total egg production. There 

are an additional 65,000 farms with 

fewer than 3,000 egg-laying hens, 

accounting for the balance of eggs 

produced (Ref. 26). 

E. Current On-Farm Practices 

In the proposed rule we described in 

detail current farm practices to address 

the risk of SE contamination (69 FR 

56824 at 56830 through 56831). Most of 

the information we provided came from 

a 1999 study (the Layers 99 study) (Refs. 

27, 28, and 29) by USDA’s Animal and 

Plant Health Inspection Service (APHIS) 

National Animal Health Monitoring 

System (NAHMS), as well as 

information on voluntary EQAPs, which 

are discussed more fully in section I.G 

of this document. 

The Layers 99 study was designed to 

include information from States that 

account for at least 70 percent of the 

animal and farm population in the 

United States (Refs. 27, 28, and 29). 

Each operation participating in the 

study had more than 30,000 laying hens. 

The study found that egg laying 

operations varied considerably in size 

and style of poultry house; 

approximately 34 percent of the houses 

had fewer than 50,000 layers, 29 percent 

had 50,000 to 99,999 layers, 20 percent 

had 100,000 to 199,999 layers, and 17 

percent had 200,000 or more layers. 

One-third of farm sites surveyed had 

only one layer house, while 16.5 percent 

had six or more layer houses. The study 

also found wide variability within the 

poultry houses with respect to style of 

housing and number and level of cages, 

although less than one percent were 

cage-free. Manure handling varied with 

house style and also varied regionally. 

The study found that, when a poultry 

house is repopulated with new laying 

hens (also known as ‘‘layers’’), most of 

the new layers come from a pullet 

raising facility. Less than 10 percent of 

layer farms raised pullets at the layer 

farm site, although some layer farms had 

their own pullet-raising facilities at 

other locations. Most (95 percent) of 

pullets in pullet-raising facilities came 

as chicks from National Poultry 

Improvement Plan (NPIP) monitored 

breeder flocks. USDA’s NPIP is a 

cooperative Federal-State-industry 

mechanism intended to prevent and 

control egg-transmitted, hatcherydisseminated poultry diseases. NPIP has 

monitoring programs for many avian 

diseases and pathogens, including SE. 

Chicks are SE-monitored if they are 

hatched from eggs from flocks that are 

certified through NPIP as ‘‘U.S. S. 

Enteritidis Clean’’ breeder flocks (9 CFR 

145.23(d)). 

Many pullet-raising facilities in the 

Layers 99 study had their own programs 

for SE monitoring. In the West region, 

83 percent of farms obtained layers from 

SE-monitored pullet facilities, and 70 

percent of layers on all farms came from 

SE-monitored pullet facilities. Pullet 

facilities used one or more of the 

following methods to monitor SE: (1) 

Dead chick/chick paper testing, (2) 

environmental culture, (3) bird culture, 

and (4) serology. Some pullet facilities 

used competitive exclusion products 

and/or vaccines to protect pullets 

against SE. 

The study found that in 1997, the 

average flock was placed for its first 

production cycle at 17.5 weeks of age. 

Flocks in their first production cycle 

reached peak production around 29 

weeks of age. At peak production, the 

average maximum number of eggs 

produced was 90 eggs per 100 hens per 

day. Induced molting was used on many 

farms (83 percent of farm sites). In the 

West and Southeast regions, 95 percent 

or more of farms molted birds, while in 

the Central region just over half (57 

percent) of the farms molted birds. On 

average, molted flocks ended 

production at 111 weeks of age, while 

non-molted flocks ended production at 

74 weeks of age. 

Approximately two-thirds of farms 

had biosecurity measures that did not 

allow visitors without a business reason 

to enter poultry houses. Sixty-two 

percent of farms that allowed visitors 

allowed business visitors provided they 

had not been on another poultry farm 

that day. Of the farms that allowed 

visitors in the layer house, most farms 

(76 percent) required that visitors wear 

clean boots. The majority of farms 

prohibited employees from being 

around other poultry and from owning 

their own birds. 

With respect to pest control, the 

Layers 99 study estimated that rodents 

and flies had access to feed in feed 

troughs on nearly all farms. Fly control 

was practiced on 90 percent of all farms; 

baiting was the most common form of 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33033 

fly control (72 percent of farms). 

Essentially all farms used some type of 

rodent control. Chemicals and baits 

were used for rodent control by 93 

percent of farms. Professional 

exterminators were used on less than 15 

percent of farms that used rodent 

control. Producers rated almost 30 

percent of farms as having a moderate 

or severe problem with mice and almost 

9 percent as having a moderate or severe 

problem with rats. 

The Layers 99 study found essentially 

all farms emptied feeders, 91 percent 

emptied feed hoppers, 81 percent 

flushed water lines, 79 percent dry 

cleaned cages, walls, and ceilings, and 

71 percent cleaned fans and ventilation 

systems. Approximately one-third of 

farm sites never cleaned or disinfected 

egg belts/elevators between flocks. 

Down time between flocks varied 

regionally; most farms had a down time 

of more than 11 days, although some 

were down for less than 4 days. 

The Layers 99 study showed that, in 

1997, 58 percent of farms tested for SE. 

The number of farms testing for SE 

varied by region. The number and 

regional distribution of farms doing 

testing for SE is very similar to the 

number and distribution of farms 

participating in an EQAP. 

F. Voluntary EQAPs 

The Layers 99 study found that 51 

percent of all farm sites participated in 

an EQAP sponsored by a State or 

commodity group (e.g., United Egg 

Producers). The Salmonella Enteritidis 

Pilot Project (SEPP), begun in 1992 by 

USDA with special funding from 

Congress, was one of the first EQAPs in 

the United States (in 1994, SEPP became 

the Pennsylvania Egg Quality Assurance 

Program (PEQAP)). Currently, there are 

at least nine voluntary EQAPs operated 

and administered by States or other 

organizations (Refs. 30 through 36). In 

addition, certain egg companies operate 

an EQAP within their own facilities 

(Ref. 28). 

Currently, EQAPs are voluntary for 

producers. These programs have similar 

requirements, but vary in how they 

implement these requirements. All 

programs require use of NPIP ‘‘U.S. S. 

Enteritidis Clean’’ chicks or equivalent, 

biosecurity, rodent control, and cleaning 

and disinfection of poultry houses. 

Although most programs require some 

environmental testing, the amount 

varies from once to four or five times 

during the life of a flock. If an 

environmental test is SE-positive (i.e., 

SE is detected at any level in any 

sample), several programs require egg 

testing, with diversion if the egg testing 

is SE-positive. Several programs also 

have State government oversight and 

recordkeeping requirements. All 

programs have some educational 

programs for participants. 

G. The Food Code 

FDA regularly publishes the Food 

Code, which provides guidance on food 

safety, sanitation, and fair dealing that 

can be uniformly adopted by State and 

local governments for the retail segment 

of the food industry. The Food Code 

provisions are not Federal requirements; 

however, they are designed to be 

consistent with Federal food laws and 

regulations. The Food Code is written so 

that all levels of government can easily 

adopt its text into a legal requirement. 

Beginning with the 1993 edition, the 

Food Code was issued in its current 

format and was revised every 2 years. In 

2002, with the support of the 

Conference for Food Protection, FDA 

decided to move to a 4-year interval 

between complete Food Code revisions. 

FDA published the 2005 Food Code, 

which is the first full edition to publish 

since the 2001 edition. During the 4- 

year interim period, a Food Code 

Supplement that updated, modified, 

and clarified certain provisions was 

made available. The provisions relevant 

to egg safety at establishments serving 

highly susceptible populations can be 

found in the 2001 Food Code in sections 

3–202.11(C), 3–202.13, 3–202.14(A), 3– 

401.11(A)(1)(a) and 3–801.11(B)(1), 

(B)(2), (D)(1), (D)(2), (E)(1), and (E)(2). 

These Food Code provisions include the 

use of pasteurized eggs in recipes where 

eggs are raw or undercooked (e.g., 

Caesar salad, hollandaise sauce, 

eggnog), and if eggs are combined, 

unless the eggs are cooked to order and 

immediately served or combined 

immediately before baking and 

thoroughly cooked. The 2001 provisions 

all substantively remain the same in the 

2005 Food Code, but sections 3– 

801.11(D)(1) and (D)(2) are now 

designated as 3–801.11(C)(1) and (C)(2), 

and sections 3–801.11(E)(1) and (E)(2) 

are now designated as 3–801.11(F)(1) 

and (F)(2). In addition, FDA amended 

the definitions of ‘‘Eggs’’ and ‘‘Egg 

Products’’ in the 2005 edition of the 

Food Code to clarify the difference 

between ‘‘egg’’ (shell egg) and ‘‘egg 

product’’ (liquid, frozen, or dry egg). 

Also, FDA clarified that baluts and 

reptile eggs are excluded from the eggrelated provisions of the Food Code. 

Through careful examination of State 

retail food codes, FDA has identified 47 

States and territories (out of 56 States 

and territories) that have either adopted 

the 2005 Food Code or provisions that 

require the same prevention measures 

for highly susceptible populations (Ref. 

37). 

H. Rationale for the Final Rule 

This rule is the most recent in a series 

of farm-to-table egg safety efforts begun 

by FDA and FSIS in the 1990s. These 

efforts are described in more detail in 

the proposed rule (69 FR 56824 at 56827 

through 56829). Among these initiatives 

was the FDA and FSIS 1998 joint SE 

risk assessment (Ref. 21), discussed in 

detail in the proposed rule (69 FR 56824 

at 56829), which concluded that a 

broad-based policy, encompassing 

interventions from farm to table, is 

likely to be more effective in eliminating 

egg-associated SE illnesses than a policy 

directed solely at one stage of the 

production-to-consumption continuum. 

In 2004, after FDA’s proposed rule was 

published, FSIS published a draft risk 

assessment for SE in shell eggs and 

Salmonella spp. in egg products. This 

risk assessment was then published as 

final in October 2005 (Ref. 22). 

There are currently several Federal 

regulations related to egg safety at the 

food service level. These regulations 

include a final rule issued by FSIS for 

refrigeration and labeling of eggs during 

transport and storage when packed for 

the ultimate consumer (63 FR 45663, 

August 27, 1998) and an FDA final rule 

that requires labeling of eggs and 

refrigeration of eggs at retail 

establishments (65 FR 76092, December 

5, 2000). However, this is the first and 

only Federal rule that addresses the 

introduction of SE into the egg during 

production. Interventions that can 

reduce the number of SE-contaminated 

eggs at the production phase are of 

particular interest. Because progress in 

reducing the number of illnesses and 

outbreaks appears to have slowed or 

stopped, these additional preventive 

measures are needed to reduce further 

the risk of SE illnesses and meet our 

public health goals. Because eggs 

remain the primary source of SE 

infections, continued actions to improve 

egg safety are the most effective way to 

reduce the overall number of SE 

infections and outbreaks and to achieve 

our public health goals. 

II. Highlights of the Final Rule and 

Summary of Significant Differences 

Between the Proposed and Final Rules 

A. Highlights of the Final Rule 

The provisions in the final rule are 

described briefly in the following 

paragraphs, and are discussed in more 

detail later in the preamble of this 

document. 

• Persons who produce shell eggs 

from a farm operating with 3,000 or 

mstockstill on DSKH9S0YB1PROD with RULES2

33034 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

more laying hens, unless that farm sells 

all of its eggs directly to consumers or 

does not produce shell eggs for the table 

market, are subject to this final rule (21 

CFR 118.1(a)). 

• Shell egg producers need only 

comply with refrigeration and 

registration requirements if all of their 

shell eggs from a particular farm receive 

a treatment as defined in the final rule 

(§ 118.1(a)(2)). 

• Persons who transport or hold shell 

eggs for shell egg processing or egg 

products facilities are required to 

comply with the refrigeration 

requirements of this final rule 

(§ 118.1(b)). 

• Shell egg producers are required to 

use the following SE prevention 

measures: 

• Have and implement a written SE 

prevention plan that includes all 

mandatory SE prevention measures (21 

CFR 118.4); 

• Procure pullets that are SEmonitored, or raise pullets under SEmonitored conditions (§ 118.4(a)); 

• Use a biosecurity program, meaning 

a program that includes limiting visitors 

on the farm and in poultry houses; 

maintaining personnel and equipment 

practices that will protect against crosscontamination from one poultry house 

to another; preventing stray poultry, 

wild birds, cats, and other animals from 

entering poultry houses; and prohibiting 

employees from keeping birds at home 

(§ 118.4(b)); 

• Use a program to control rodents, 

flies, and other pests that includes 

monitoring for pest activity and 

removing debris and vegetation that 

may provide harborage for pests 

(§ 118.4(c)); and 

• Clean and disinfect poultry houses 

before new laying hens are added if an 

environmental or egg test was positive 

for SE during the life of the flock; 

cleaning and disinfecting must include 

removing all visible manure, dry 

cleaning to remove dust, feathers, and 

old feed, and disinfecting (§ 118.4(d)). 

• Shell eggs being held or transported 

are required to be refrigerated at or 

below 45 degrees Fahrenheit (°F) 

ambient temperature beginning 36 hours 

after time of lay (§ 118.4(e)). 

• Shell egg producers must conduct 

environmental testing for SE when 

laying hens are 40 to 45 weeks of age 

and 4 to 6 weeks after molt (21 CFR 

118.5). 

• Shell egg producers must conduct 

egg testing for SE when an 

environmental test is positive for SE (21 

CFR 118.6). 

• Administration of the SE 

prevention measures requires having 

one or more supervisory personnel, who 

do not have to be onsite employees, who 

are responsible for ensuring compliance 

with each farm’s SE prevention plan (21 

CFR 118.9). 

• Shell egg producers must maintain 

a written SE prevention plan and 

records documenting compliance with 

the requirements in the plan (21 CFR 

118.10). 

• Shell egg producers must retain 

records for 1 year after the flock to 

which they pertain has been taken 

permanently out of production 

(§ 118.10(c)). 

• Shell egg producers must make 

records available within 24 hours from 

the time of receipt of the official request 

(§ 118.10(d)). 

• Shell egg producers must register 

with FDA (21 CFR 118.11). 

B. Significant Differences Between the 

Proposed and Final Rules 

The final rule reflects the following 

significant changes from the proposed 

rule: 

• Persons who transport or hold shell 

eggs for shell egg processing or egg 

products facilities must comply with the 

refrigeration requirements. Only shell 

egg producers were subject to the 

proposed refrigeration requirements. 

• Shell egg producers are required to 

have and implement written SE 

prevention plans. 

The proposed rule did not require that 

plans be written. 

• The requirements for protective 

clothing and sanitizing stations have 

been removed from biosecurity program 

requirements. 

• The requirement to ‘‘wet clean the 

positive poultry house’’ has been 

removed. 

• Egg processors are now permitted to 

equilibrate refrigerated eggs to room 

temperature just prior to processing. 

• The requirement to begin egg 

testing within 24 hours after notification 

of a positive environmental test has 

been changed to require that results of 

egg testing be obtained within 10 

calendar days after receiving 

notification of the positive 

environmental test. 

• The required time period to perform 

environmental testing for SE after 

molting has been changed from 20 

weeks to 4 to 6 weeks after molt. 

• Diverted eggs must have labeling on 

the shipping container, and all 

documents accompanying the shipment 

must state ‘‘Federal law requires that 

these eggs must be treated to achieve at 

least a 5-log destruction of Salmonella 

Enteritidis or processed as egg products 

in accordance with the Egg Products 

Inspection Act, 21 CFR 118.6(f).’’ 

• The requirement that one onsite 

supervisor at each farm be responsible 

for administration of the SE prevention 

measures has been changed to allow for 

more than one supervisor and for offsite 

supervisors to be responsible. 

• Shell egg producers must document 

that pullets were SE-monitored or raised 

under SE-monitored conditions. 

• ‘‘SE monitored’’ has been defined to 

mean that pullets are raised under SE 

control conditions that prevent SE, 

including the following: (1) 

Procurement of chicks from SEmonitored breeder flocks that meet 

NPIP’s standards for ‘‘U.S. S. Enteritidis 

Clean’’ status (9 CFR 145.23(d)) or 

equivalent standard, (2) environmental 

testing, and (3) cleaning and 

disinfection of the environment as 

needed based upon the results of the 

environmental testing. 

• Shell egg producers must maintain 

records documenting compliance with 

each of the SE prevention measures. 

• Shell egg producers must maintain 

records documenting review and 

modifications of the SE prevention plan 

and corrective actions. 

• Shell egg producers must register 

with FDA. 

C. Compliance Dates 

The compliance date is July 9, 2010; 

except that, for producers with fewer 

than 50,000 but at least 3,000 laying 

hens, the compliance date is July 9, 

2012. The compliance date for persons 

who must comply with only the 

refrigeration requirements is July 9, 

2010. 

III. Comments on the Proposed Rule 

FDA received approximately 2,000 

timely submissions in response to the 

initial comment period on the proposed 

rule. In addition, approximately 20 

timely submissions were received in 

response to the reopened comment 

period. The majority of submissions 

came from individuals and groups 

advocating animal welfare issues that, 

for reasons discussed later in this 

document, are outside the scope of this 

rulemaking. The remaining comments 

came from various trade associations, 

State government agencies, industry, 

consumer groups, scientific 

associations, and individual consumers. 

These comments raised approximately 

60 major issues. To make it easier to 

identify comments and our response to 

the comments, the word ‘‘Comment’’ 

will appear in parentheses before the 

description of the comment, and the 

word ‘‘Response’’ will appear in 

parentheses before our response. We 

have also numbered each comment to 

make it easier to identify a particular 

comment. The number assigned to each 

comment is purely for organizational 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33035 

purposes and does not signify the 

comment’s value or importance or the 

order in which it was submitted. 

A. General Comments 

1. Enforcement by Voluntary EQAPs 

(Comment 1) Several comments stated 

that FDA should implement what some 

comments referred to as a ‘‘recognition 

regime,’’ under which parts of the final 

rule would not apply to (or would be 

presumptively complied with by) State 

and industry EQAPs with standards 

equivalent to the Federal rule. Some 

comments suggested that all shell egg 

producers should be subject to the 

testing and diversion requirements of 

the final rule, but that egg producers 

participating in recognized EQAPs 

would have to meet only the on-farm SE 

control measures specified by the 

EQAP. The comments suggested that, as 

part of the recognition of the EQAPs, 

FDA should also recognize audits and 

inspections conducted by State agencies 

to measure compliance with those 

programs, rather than conducting 

separate Federal inspections. 

(Response) FDA recognizes that 

existing voluntary EQAPs have been 

successful in reducing SE 

contamination in poultry houses in 

certain States (see discussion in section 

I.G of this document). However, for 

several reasons, we do not agree that 

States with EQAPs that are recognized 

by FDA should not be subject to this 

rule. 

First, as discussed, these programs are 

not uniformly administered or equally 

comprehensive in their prevention 

measures. In addition, currently the 

EQAPs that exist are voluntary for shell 

egg producers. Although the existing 

EQAPs all have similar requirements, 

they vary in how those requirements are 

implemented. This rule will establish 

uniform, nationwide requirements to 

prevent SE in shell eggs during 

production, storage, and transportation. 

FDA believes that these requirements 

will further reduce SE illness and 

deaths associated with egg 

consumption. 

On the other hand, we agree that we 

can enlist the assistance of existing 

EQAP organizations and officials in 

implementing FDA’s regulation. The 

rule provides that a State or locality 

may, in its own jurisdiction, enforce this 

rule by carrying out inspections under 

§ 118.12(b) (21 CFR 118.12(b)) and by 

using the administrative remedies in 

§ 118.12(a) unless FDA notifies the State 

or locality in writing that its assistance 

is no longer needed. FDA plans to 

provide guidance to States and localities 

through an enforcement and 

implementation guidance subsequent to 

this final rule. 

2. Vaccination of Layers Against SE 

(Comment 2) Some comments agreed 

with FDA’s conclusion, discussed in the 

proposed rule, that there is insufficient 

scientific support for a requirement that 

layers be vaccinated against SE (69 FR 

56824 at 56847). Some of these 

comments stated that FDA should 

encourage voluntary vaccination efforts 

by, for example, allowing producers that 

can demonstrate the effectiveness of 

their vaccination programs to follow an 

alternative protocol for environmental 

testing before depopulation. One 

comment encouraged the use of SE 

vaccinations as an added prevention 

measure against SE contamination of 

shell eggs and recommended that an 

option of using a vaccination program 

should be available to shell egg 

producers. In support, the comment 

stated that data exists from the United 

States and Europe that the comment 

said demonstrates the efficacy of 

vaccination programs. The comment did 

not provide additional data in support 

of these statements. 

Another comment stated that the 

available research and field evidence 

support a conclusion that vaccines used 

with other SE control measures will 

reduce SE. 

(Response) FDA agrees with the 

comments supporting only voluntary 

vaccination of layers. As we stated in 

the proposed rule, there are insufficient 

data on the efficacy of vaccines, 

particularly data reflecting field trials 

under ‘‘real world’’ conditions, to 

support a mandatory vaccination 

requirement (69 FR 56824 at 56847). We 

also believe that data on the efficacy of 

vaccines are insufficient to allow 

substitution of vaccination for any of the 

SE prevention measures required in this 

final rule. If individual producers have 

identified vaccines that are effective for 

their particular farms, we encourage the 

use of the vaccine as an additional SE 

prevention measure. 

3. Delegation of Inspection 

Responsibilities to Other Federal or 

State Agencies 

(Comment 3) Two comments urged 

FDA to delegate farm inspection 

responsibilities to USDA’s FSIS and 

Agricultural Marketing Service (AMS) 

or the State Departments of Agriculture, 

because these agencies are already 

involved in oversight of various aspects 

of egg production. Similarly, another 

comment stated that APHIS and FSIS 

are more qualified than FDA to address 

disease and pathogen risk reduction in 

live animal production operations. 

(Response) FDA disagrees with the 

suggestion that we should delegate 

inspection responsibilities under this 

rule to USDA or the States. Although we 

coordinate our respective egg safety 

efforts with FSIS and AMS, each agency 

has distinct responsibilities and skills, 

all of which benefit consumers of shell 

eggs and egg products. These 

responsibilities and skills do not 

necessarily overlap as a practical matter 

(for example, AMS personnel are in 

certain shell egg packing plants, but not 

in the layer houses). Furthermore, the 

rule provides that any State or locality 

that is willing and able to assist FDA in 

enforcing the rule may do so in its own 

jurisdiction. 

4. Induced Molting 

(Comment 4) Several comments 

responded to the request in the 

proposed rule for comment and data 

concerning induced molting (69 FR 

56824 at 56846 through 56847). We 

received a number of comments 

encouraging FDA to ban induced 

molting of laying birds. These 

comments stated that this practice 

stresses the immune function of 

chickens, resulting in the promotion of 

SE contamination in shell eggs and egg 

products; that it leads to plucking and 

consumption of feathers that may be 

contaminated with Salmonella; and that 

the plucking may itself also stress the 

immune system. The comments 

provided some references for these 

assertions. Another comment stated that 

USDA supports elimination of forced 

molting to reduce SE contamination and 

that the American Veterinary Medical 

Association also opposes the practice. 

Other comments supported the 

absence in the proposed rule of 

provisions addressing molting. These 

comments stated that the research on 

which claims about post-molt SE shed 

are based have primarily been 

laboratory, rather than field research, 

involving large challenge doses of SE 

that would not be duplicated in the field 

and strains of chickens different from 

those common in commercial laying 

operations. The comments stated that 

there is only emerging research into 

how to use a variety of diets to control 

the natural process of molting in the egg 

production setting. 

(Response) We addressed the issue of 

induced molting at length in the 

proposed rule (69 FR 56824 at 56846 

through 56847). We discussed the 

limitations of studies cited to support 

the assertion that induced molting 

increases SE contamination of eggs and 

stated that we did not believe that we 

had adequate data upon which to rely 

for a final decision on the issue of the 

mstockstill on DSKH9S0YB1PROD with RULES2

33036 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

1Under the Animal Health Protection Act, USDA 

is required to compensate the owner for any animal, 

article, or means of conveyance that the Secretary 

of Agriculture requires to be destroyed (7 U.S.C. 

8306(d)). Under the Plant Protection Act, USDA is 

authorized to pay compensation to any person for 

economic losses incurred as a result of action taken 

by the Secretary of Agriculture under a declaration 

of extraordinary emergency (7 U.S.C. 7715). 

relationship between induced molting 

and SE contamination of the 

environment and of eggs. Although the 

proposed rule specifically requested 

comment and data related to our 

discussion of induced molting, we did 

not receive any new data on the 

relationship between induced molting 

and SE contamination of the laying 

environment and of eggs. As a result, we 

do not have adequate evidence to 

support including a prohibition on 

induced molting in the final rule. 

5. Indemnification 

(Comment 5) One comment suggested 

that we research whether the Public 

Health Service Act (the PHS Act) would 

allow us to indemnify persons whose 

economic interests are adversely 

affected by this rule, for example, as a 

result of diversion of shell eggs to 

breaker facilities. The comment 

suggested that, should we conclude that 

we lack such legal authority, we should 

consider whether to request it from 

Congress. Another comment suggested 

that a Federal compensation package 

may be needed for smaller producers 

that lack pasteurization capability. 

(Response) Unlike APHIS, FDA is not 

required or explicitly authorized by 

Federal statute to compensate persons 

whose economic interests are adversely 

affected by certain Agency actions.1

Further, FDA notes that although some 

producers will face economic costs from 

the diversion of eggs to the table market, 

as discussed in section V of this 

document (Analysis of Economic 

Impacts), the economic benefit from 

illnesses averted is expected to greatly 

exceed the cost of this rule. The 

suggestion that FDA seek statutory 

authority to pay compensation to 

indemnify producers is outside the 

scope of this rule. 

B. Comments on ‘‘Shell Egg Producers 

Covered by the Requirements in This 

Part’’ (Proposed and Final § 118.1) 

Exemption of Producers With Small 

Flocks 

(Comment 6) Several comments 

addressed our proposed exemption of 

shell egg producers with small flocks, 

defined as flocks of less than 3,000 

laying hens at a particular farm. Most of 

these comments argued that these small 

flocks are less likely to have adequate 

SE prevention measures and that 

excluding them would be contrary to 

the public health goal of the rule. The 

comments suggested that smaller 

facilities are less likely to have adequate 

refrigeration capacity, effective rodent 

control, an effective biosecurity 

program, measures in place to limit 

laying hens’ exposure to manure on 

building floors and exposure to the 

outdoors; that they may pose a greater 

risk that they will transport and hold 

eggs without proper refrigeration; and 

that they may be less likely to obtain 

replacement pullets or chicks from 

breeders who participate in the SE 

prevention programs. One comment 

similarly suggested that eggs from these 

smaller producers might be associated 

with a disproportionate share of 

sporadic illnesses and even some 

outbreaks. The comments did not 

provide data to support these concerns; 

one comment from one of the larger 

trade associations stated that it was not 

aware of research that would support 

any conclusion that smaller operations 

would be either more or less likely to 

have an SE problem than larger, 

commercial operations. 

One comment proposed that FDA 

reduce the exemption to producers with 

less than 500 chickens or require all 

producers not selling directly to 

consumers to comply with the rule. This 

comment suggested that FDA may not 

be aware of outbreaks associated with 

eggs from these producers because the 

eggs are not likely to be shipped 

interstate. 

One comment cited our $1.01 per hen 

($0.05 per dozen) estimate of the cost to 

farms with between 3,000–19,999 layers 

as an illustration of the large financial 

burden that the rule imposes on these 

farms. 

(Response) We do not believe that 

there is at this time sufficient evidence 

to warrant extending the rule’s coverage 

to producers with fewer than 3,000 

laying hens. As we explained in the 

proposed rule (69 FR 56824 at 56832), 

because producers with fewer than 

3,000 layers do not contribute 

significantly to the table egg market, 

imposing any one or all of the 

restrictions on them will have little 

measurable impact on the incidence of 

SE. We have no information 

documenting that there is an elevated 

risk of sporadic illness or outbreaks 

associated with eggs sold directly from 

farmer to consumer or from a producer 

with fewer than 3,000 laying hens. 

FDA disagrees with the statement that 

we may be unaware of outbreaks 

associated with eggs from small 

producers because these producers are 

less likely to ship eggs interstate. The 

outbreak data relied on by FDA is in 

general submitted by State Departments 

of Health to CDC. As noted earlier, cases 

of salmonellosis must be reported to 

local health departments, who in turn 

provide information to States and to 

CDC. 

FDA recognizes that the cost per hen 

is higher for smaller farms. However, 

though not specifically broken out in 

the regulatory impact analysis, for farms 

with between 3,000 and 19,999 layers, 

the public health benefits of the rule 

exceed the costs by more than $90 

million annually and costs do not 

exceed benefits for any of the individual 

provisions of the rule. There are a 

number of features of the rule itself and 

in our plans for implementation to 

facilitate smaller farms’ compliance 

with the rule. For example, this final 

rule has a staggered compliance 

schedule, which provides smaller egg 

producers (those with between 3,000 

and 49,999 layers) 3 years to comply 

with the final rule. FDA will continue 

to evaluate the impact of this rule on 

smaller farms and will consider taking 

appropriate steps to mitigate those 

impacts, where it is possible to do so 

without reducing safety. In addition, 

FDA intends to provide guidance on the 

recordkeeping and other provisions of 

the rule, including small entity 

compliance guidance. We plan to use 

guidance, to the extent feasible, as a 

vehicle to identify areas where 

compliance could be achieved via 

flexible approaches that would mitigate 

the financial impact while preserving 

the public health benefits of the rule. 

We plan to solicit public and industry 

input on this guidance. 

Therefore, FDA has retained the 

exemption from all provisions of this 

final rule for farms with fewer than 

3,000 layers. 

C. Comments on ‘‘Definitions’’ 

(Proposed and Final § 118.3) 

1. Poultry House 

(Comment 7) One comment 

questioned the proposed definition of a 

poultry house, which requires that 

different sections of a single building 

separated by walls be considered as 

separate houses. The comment noted 

that the definition would not address 

the risk of airborne transmission of SE. 

The comment stated that ‘‘there is 

considerable evidence that SE can be 

transmitted through dust and other 

airborne particles,’’ citing three 

references in support. The comment 

noted that the proposed rule did not 

require that separate sections in a 

building have separate ventilation 

systems, but did require biosecurity 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33037 

procedures to ensure that there is no 

introduction or transfer of SE from one 

section to another. The comment 

suggested that the definition of a poultry 

house should clarify that the biosecurity 

procedures should include transfer 

through airborne particles. 

(Response) FDA recognizes that SE 

may be transmitted through dust and 

other airborne particles. However, FDA 

does not believe that separate 

ventilation for each section of a house 

should be mandated because there is 

great variation in design and placement 

of houses and ventilation systems, and 

separate ventilation may not be 

necessary in every circumstance. 

Depending on the layout of a farm and 

the type and number of houses, a 

producer should decide whether 

ventilation needs to be addressed as part 

of farm-specific biosecurity measures to 

prevent the introduction or transfer of 

SE from one section to another. 

The proposed definition of ‘‘poultry 

house’’ stated ‘‘For structures 

comprising more than one section 

containing poultry, each section is 

enclosed and separated from the other 

sections, and each section has a 

biosecurity program in place to ensure 

that there is no introduction or transfer 

of SE from one section to another.’’ 

(Emphasis added.) The final phrase has 

been removed from this section and 

added as an introduction to § 118.4(b) 

(biosecurity) to make clear that you 

must ‘‘take steps to ensure that there is 

no introduction or transfer of SE into or 

among poultry houses,’’ and that 

‘‘[a]mong such biosecurity measures you 

must, at a minimum’’ include a number 

of specific measures in the biosecurity 

plan. If the design of a farm and its 

poultry houses needs an additional 

measure of ventilation to prevent crosscontamination, then such a measure 

should be added to the biosecurity plan. 

In addition, in the final rule we have 

revised the definition of ‘‘poultry 

house’’ to clarify that ‘‘[f]or structures 

comprising more than one section 

containing poultry, each section that is 

separated from other sections is 

considered a separate house.’’ 

2. Treatment 

(Comment 8) Some comments stated 

that a survey of egg processors to 

determine their current pasteurization 

practices supports a 5-log reduction, 

although many processors achieve a 

substantially greater pathogen 

reduction. The comments stated that the 

survey indicated that 50 percent of 

survey respondents reported that they 

achieve a 5-log reduction, and the other 

50 percent reported a 7-log or greater 

reduction. The comments stated that the 

current 5-log reduction requirement 

appears to provide an adequate margin 

of safety, because specified 

temperatures and holding times do not 

take into account the additional kill 

achieved in the product while it is 

heating up to, and cooling down from, 

the pasteurization temperature. 

(Response) FDA agrees with the 

comments that a 5-log reduction in SE 

via pasteurization or an alternative 

approach or the processing of egg 

products to achieve an equivalent level 

of protection is appropriate to ensure 

the safety of shell eggs. Therefore, we 

have retained the definition for the term 

‘‘treatment’’ (or ‘‘treated’’) in § 118.3 of 

the final rule as ‘‘a technology or 

process that achieves at least a 5-log 

destruction of SE for shell eggs, or the 

processing of egg products in 

accordance with the Egg Products 

Inspection Act. We established this 

standard in 1997, in response to a 

USDA/AMS request to FDA on criteria 

for shell egg pasteurization. AMS then 

published this standard in its Federal 

Register notice on official identification 

of pasteurized shell eggs on September 

24, 1997 (62 FR 49955). 

Additionally, both FDA and FSIS are 

evaluating additional measures to 

improve egg safety, and FSIS intends to 

issue proposed rules in the near future 

for egg products plants and egg 

handlers, including egg handlers who 

operate in-shell pasteurization 

treatments. FDA and FSIS will continue 

to work closely together to ensure that 

our egg safety measures are consistent, 

coordinated, and complimentary. 

D. Comments on ‘‘Salmonella 

Enteritidis (SE) Prevention Measures’’ 

(Proposed and Final § 118.4) 

1. Chicks and Pullets (§ 118.4(a)) 

FDA reopened the comment period on 

May 10, 2005, to seek further comment 

and information on industry practices 

and programs that prevent SEmonitored chicks from becoming 

infected by SE during the period of 

pullet rearing until placement into 

laying hen houses (70 FR 24490). We 

received approximately 20 submissions 

that provided additional information 

and data on the specific questions that 

FDA presented. 

(Comment 9) Several comments stated 

that on-farm prevention practices must 

address each stage in the life of laying 

flocks, including the pullet-rearing 

stage. These comments stated that 

applying the FDA-mandated practices to 

layers only after they have been placed 

in layer hen houses may be too late to 

ensure protection against SE, as the 

layers’ ovaries may already be 

contaminated with the pathogen. The 

comments urged FDA to make clear in 

the rule that all of the SE prevention 

practices apply to both pullet rearing 

houses and layer houses. The comments 

noted that this approach would be 

consistent with the practice of existing 

EQAPs SE prevention measures that are 

applicable specifically to pullets. 

Many comments suggested that FDA 

add a new requirement that producers 

certify that pullets they procure have 

come from a facility that has an SEmonitoring program. The comments 

recommended that pullet houses 

undergo environmental tests for SE for 

each flock at approximately 10 weeks of 

age. The comments stated that, if the 

test is positive, the producer could still 

accept the pullets, but the producer 

should be required to test 

environmentally after placement. In 

addition, the comments suggested that 

FDA require that pullet houses should 

be cleaned and disinfected prior to 

placement of the next pullet flock. 

Finally, the comments suggested that 

FDA require testing for layers used to 

backfill (replacing dead or diseased 

layers with other layers) and older 

flocks that are moved to another facility. 

(Response) We agree that SE 

prevention measures should be in place 

during the pullet phase of shell egg 

production and have modified the rule 

accordingly. We believe this will reduce 

the risk of placing infected birds into 

poultry houses. The final rule requires 

producers to procure pullets from 

sources where the environment has 

been tested and found environmentally 

negative prior to introduction into the 

laying flock. The environmental testing 

is required of pullets at 14 to 16 weeks 

of age and cleaning and disinfection of 

the pullet environment is required if the 

environmental test is positive. The 

cleaning and disinfection procedures 

include removing all manure, dry 

cleaning the positive pullet house to 

remove dust, feathers, and old feed, and 

following cleaning, disinfecting of the 

positive pullet house with spray, 

aerosol, fumigation, or another 

appropriate disinfection method. 

Additionally, if the environmental test 

is positive for SE, producers must begin 

egg testing within 2 weeks of the start 

of egg laying. The requirements also 

include procuring chicks from SEmonitored breeder flocks that meet 

standards set by NPIP for ‘‘U.S. S. 

Enteritidis Clean’’ status or equivalent 

standard. 

FDA does not agree that a specific 

requirement is needed to test birds used 

to backfill and to test older flocks that 

are moved to another facility. Section 

118.5(a) of the final rule requires 

mstockstill on DSKH9S0YB1PROD with RULES2

33038 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

producers to perform environmental 

testing for SE in a poultry house when 

any group of laying hens constituting 

the flock within the poultry house is 40 

to 45 weeks of age. Therefore, any layers 

used to backfill and older layers moved 

into a poultry house will be, or would 

have been, environmentally tested at 40 

to 45 weeks of age, as are all other 

layers. 

(Comment 10) Several comments 

supported the proposed requirement 

that all pullets and chicks be procured 

from a hatchery or breeding flock that 

participates in NPIP. These comments 

noted that NPIP participants have 

developed effective strategies that have 

reduced the prevalence of many poultry 

diseases including SE. 

(Response) We have retained the 

requirement that pullets that are 

purchased be procured as chicks from 

SE-monitored breeder flocks that meet 

NPIP’s standards for ‘‘U.S. S. Enteritidis 

Clean’’ status or an equivalent standard. 

2. Biosecurity (§ 118.4(b)) 

(Comment 11) Some comments stated 

that FDA should revise its biosecurity 

requirements to allow egg producers 

greater flexibility. In addition, some 

comments challenged specific 

biosecurity measures as being 

insufficiently supported by data 

demonstrating their effectiveness in 

controlling or preventing SE 

contamination. Specifically, comments 

questioned the value of requiring 

personal protective equipment and 

sanitizing stations between houses on 

one farm, limiting visitors, controlling 

movement of workers from house to 

house, preventing employees from 

having poultry at home, and preventing 

stray poultry, wild birds, and other 

animals from entering the grounds. 

According to the comments, on a farm 

it is the presence of mice near chickens 

that maintains the SE infection and 

contributes to SE spread from building 

to building. One comment asserted that 

biosecurity efforts on the farm should be 

focused on ‘‘rodents and other issues 

threatening to introduce or maintain 

SE.’’ The comment does not explain 

what ‘‘other issues’’ the commenter is 

referring to. The comment also asserted 

that PEQAP does not have a biosecurity 

requirement. 

(Response) FDA agrees with the 

comments that biosecurity measures 

could be more flexible in the final rule 

without jeopardizing the effectiveness of 

the SE prevention measures. 

Specifically, we believe egg producers 

may be able to devise and implement 

effective means other than protective 

clothing and sanitization stations to 

prevent cross-contamination between 

houses. For example, in some 

circumstances placing footbaths and 

farm-specific footwear at the entrance to 

a complex, maintaining house specific 

equipment, or using non-street clothing 

in the layer houses may be sufficient to 

prevent cross-contamination between 

houses. Therefore, we have removed 

from the biosecurity provisions the 

requirements for the use of protective 

clothing and sanitizing stations between 

houses. This change addresses the 

diverse poultry housing situations that 

exist throughout the country by 

allowing each producer to implement 

biosecurity practices and procedures 

appropriate for a particular farm and 

situation. We also agree that it is 

impractical to require egg producers to 

prevent stray animals from entering the 

grounds. Therefore, we have narrowed 

the provision for stray animals to apply 

only to the poultry houses. 

However, FDA disagrees with the 

comments questioning the value of 

other specific biosecurity requirements. 

As discussed in the proposed rule (69 

FR 56824 at 56835), limiting visitors on 

the farm and in poultry houses, 

maintaining practices that will protect 

against cross-contamination when 

persons move between poultry houses, 

and prohibiting employees from keeping 

birds at home are all vital biosecurity 

provisions that are commonly in use. 

According to the Layers 99 study (Ref. 

29), 66 percent of farm sites already 

practice some form of biosecurity; that 

study found that poultry houses where 

visitors were not allowed were less 

likely to test positive for SE. 

Biosecurity is a critical part of a 

farm’s SE prevention measures. You 

must implement these biosecurity 

measures to prevent the introduction or 

transmission of SE into or between 

poultry houses. Furthermore, contrary 

to the comment, PEQAP requires all 

participants to maintain an acceptable 

biosecurity program (Ref. 30). As 

discussed in section I.G of this 

document, all current EQAPs require 

use of NPIP ‘‘U.S. S. Enteritidis Clean’’ 

chicks or equivalent, biosecurity, rodent 

control, cleaning and disinfection of 

poultry houses, and many programs 

require some environmental testing as 

well. 

We will make further specific 

recommendations for biosecurity steps 

and options for achieving these steps, 

based on current science and best 

practices, in a guidance that we plan to 

issue subsequent to this final rule. We 

emphasize, however, that biosecurity is 

an important and integral part of any 

poultry farm’s SE prevention program, 

and that the biosecurity requirements in 

the final rule are minimum standards; 

egg producers may incorporate 

additional biosecurity measures into 

their SE prevention plans if they believe 

such measures are warranted. 

(Comment 12) One comment stated 

that if FDA insists on a biosecurity 

requirement, it should address the 

movement of pullets, spent hens (hens 

that have permanently ceased egg 

production), people, equipment, eggs, 

flats (a receptacle for storing or 

transporting eggs most often constructed 

of cardboard or plastic), and egg shells. 

(Response) The comment was not 

specific as to how these matters should 

be addressed and did not provide any 

supporting data concerning the need for 

particular requirements. However, it 

was not our intention that the proposed 

rule’s biosecurity provisions addressing 

the risk of cross-contamination from 

visitors or the movement of 

‘‘equipment’’ be interpreted as an 

exclusive list of measures to take to 

prevent the introduction of SE into or 

among poultry houses. We have 

amended § 118.4(b) to make this clear, 

by adding general introductory 

language, moved from the proposed 

definition of ‘‘poultry house,’’ that 

producers must ‘‘take steps to ensure 

that there is no introduction or transfer 

of SE into or among poultry houses.’’ 

(Comment 13) One comment 

suggested that the proposed rule is 

premised on a mistaken belief by FDA 

that biosecurity alone can prevent the 

introduction and spread of SE. 

(Response) As reflected in the rule, 

FDA understands that biosecurity is 

only one element of the measures that 

a producer must have to prevent SE. 

Producers must follow additional SE 

prevention measures, including pullet 

measures; rodent, fly and other pest 

control; cleaning and disinfection; and 

refrigeration. 

(Comment 14) One comment 

questioned whether organic poultry 

producers would be able to comply with 

the requirement in the proposed rule 

(§ 118.4(b)(4)) that requires egg 

producers to ‘‘prevent stray poultry, 

wild birds, and other animals from 

entering grounds and facilities.’’ The 

comment stated that this requirement is 

in conflict with a requirement under the 

USDA National Organic Program (7 CFR 

part 205) that organic poultry producers 

must provide outside access for all 

livestock. The comment also stated that 

farms that are based on a pastured 

poultry system, which typically 

provides a substantial percentage of the 

birds’ diet from pasture, would have 

difficulty complying with this 

requirement. 

(Response) We agree that it would be 

difficult to prevent stray poultry and 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33039 

other animals from entering the grounds 

of the farm, and we believe it is 

sufficient to keep stray animals out of 

the poultry house. Therefore, in the 

final rule, we have changed the 

requirement for stray animals so that it 

applies only to poultry houses rather 

than the entire grounds. Further, we 

have consulted with AMS, which 

administers the National Organic 

Program, and AMS has informed us that 

this requirement would not make it 

impossible for eggs to qualify as organic 

(Ref. 38). 

3. Pest Control (§ 118.4(c)) 

(Comment 15) Some comments 

supported the rodent control program 

requirement in proposed § 118.4(c)(1), 

but questioned the role of flies in the 

spread of SE and recommended 

elimination of the pest monitoring 

under proposed § 118.4(c)(2). The 

comments further stated that if 

measured outside the poultry house, the 

fly count might reflect flies that are 

present from external locations, such as 

animal housing at adjacent properties. 

(Response) FDA disagrees that the 

provision for monitoring flies in 

§ 118.4(c)(2) should be removed or 

modified. In the proposed rule we 

described research by FDA and others 

showing that flies harbor SE within the 

poultry house environment (69 FR 

56824 at 56835). According to the 

Layers 99 study, flies, like rodents, have 

access to feed troughs on nearly all 

farms. Further, the fly monitoring 

procedure can be performed inside the 

layer house, thus creating an accurate 

reflection of the presence of flies there. 

For clarification, FDA has replaced 

the term ‘‘pest’’ in § 118.4(c)(2) in the 

final rule with ‘‘flies’’ because ‘‘pest,’’ 

which is defined to mean any 

objectionable animal including, but not 

limited to, rodents, flies, and larvae, is 

too broad in the context of this specific 

provision. 

(Comment 16) One comment stated 

that PEQAP addresses rodent control, 

but does not address fly control. The 

comment recommended that fly control 

be included in the FDA regulation, but 

that the States individually and 

independently decide the number of 

flies allowed for maintaining 

compliance with the regulation. The 

comment suggested that under State or 

local requirements or when a farm has 

a problem, the spot cards be used to 

determine the numbers and, therefore, 

the appropriate control program. 

(Response) FDA disagrees with the 

comment that the States should 

individually and independently decide 

the number of flies allowed for 

maintaining compliance with the 

regulation. This rule establishes 

minimum national standards based on 

measures that have been shown to 

prevent SE. The comment did not 

provide any rationale for addressing 

flies on a State-by-State basis. Further, 

the rule provides flexibility in how fly 

presence is determined, allowing not 

just spot cards, but also Scudder grills, 

sticky traps, or other appropriate 

monitoring methods. FDA intends to 

publish guidance on the requirement to 

monitor for flies and on the level of fly 

activity considered acceptable. 

The literature suggests that 50 or 

fewer hits on a spot card or sticky trap 

per week or a count of less than 20 on 

a Scudder grill indicate satisfactory fly 

control ((Refs. 39 and 40). 

4. Cleaning and Disinfection (§ 118.4(d)) 

(Comment 17) One comment 

suggested that mandatory cleaning and 

disinfection measures should not 

require removal of ‘‘all visible manure’’ 

in a hen house following a positive 

environmental test and depopulation, 

but should allow for flexibility with 

respect to manure removal. The 

comment stated that complete removal 

of all manure would destroy biological 

controls for flies (such as parasitic 

wasps). The comment also argued that 

this requirement is impractical, because 

many producers only remove manure 

from the houses during those times of 

year when they can immediately apply 

it to fields. Several comments stated that 

the requirement to remove all visible 

manure is impractical for large, complex 

poultry farming operations, because 

commercial in-line, multi-tiered cage 

layer houses with related accessories 

and equipment for watering, feeding, 

egg collection, manure deflection, 

storage, and removal might be 

impossible to bring into compliance. 

The complex machinery (some 

electrical) is very difficult to clean at 

best and is just not compatible with wet 

cleaning. It would also be difficult to 

accomplish this cleaning in very cold 

climates because of freezing, in that the 

layers were an important source of 

house heat until they were removed for 

replacement. The comment also noted it 

might be difficult to enforce a 

requirement such as ‘‘removal of all 

visible manure.’’ 

(Response) We disagree that flexibility 

should be allowed with respect to 

manure removal after a positive 

environmental test. First, even if it is 

true that complete removal of all 

manure would ‘‘destroy biological 

controls for flies’’ (presumably, by 

removing parasitic wasp larvae), the 

wasp population could be restored by 

the firm, if biological controls are an 

intended and effective component of the 

firm’s fly control efforts. Data available 

to FDA indicate that there are nonbiological methods of control available 

to producers (i.e., chemical and 

mechanical methods) and that these 

methods are used by most laying hen 

houses. Moreover, the available data 

indicate that the role of parasitic wasps 

in controlling flies is currently being 

debated in the scientific literature, with 

most of the work being done in cattle 

feedlots. Meyer et al. (1990) (Ref. 41) 

and Andress and Campbell (1994) (Ref. 

42) found parasite treatments had no 

apparent affect on adult fly populations, 

while Weinzierl and Jones (1998) (Ref. 

43) concluded that parasitism 

significantly reduced the fly population. 

In the one study we are aware of 

concerning the use of parasitic wasps to 

control flies in the context of poultry 

facilities, variable results were obtained 

(Kaufman et al., 2001) (Ref. 44). 

Furthermore, limited data suggest that 

total cleanout of manure is feasible even 

where parasitic wasps are used to 

control flies. A study by Hinton and 

Moon (2003) (Ref. 45) on the effect of a 

total cleanout on fly control in chicken 

houses compared the effect of a total 

cleanout of manure from chicken houses 

to two partial cleanout methods. 

Initially, the increase in flies was 

greatest in those houses with total 

cleanout, but subsequent differences 

between the three cleaning methods 

were small and the fly densities 

remained relatively stable for 3 months 

in all houses. Although this study did 

not specifically evaluate parasitic 

wasps, it supports a finding that total 

cleanout of poultry houses will not 

adversely affect fly control efforts (Ref. 

45). 

Second, the fact that manure cannot 

always be applied to fields does not 

mean that it should not be removed 

from poultry houses. Manure removed 

from a house can be composted, stored 

in a manure barn, or spread on a field 

depending on the time of year that it is 

removed. 

Finally, we do not understand why 

manure removal at a large operation 

would be impractical. We acknowledge 

that a large operation has more manure 

to handle, but FDA has visited large 

operations that do clean out the manure, 

and we are unaware of any unique 

problems for such operations. 

Because manure is a reservoir of SE 

that has been shed by infected laying 

hens, once a poultry house has had an 

SE-positive environmental or egg test, it 

is important that all visible manure be 

removed. Removing all visible manure 

before new laying hens are placed into 

a house will help to prevent the SE from 

mstockstill on DSKH9S0YB1PROD with RULES2

33040 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

infecting the replacement flock via the 

manure and rodents. 

Therefore, FDA concludes that, to 

prevent the spread or perpetuation of SE 

from one flock to another, a producer 

must remove all visible manure from a 

poultry house before new laying hens 

are added to the house when an 

environmental test was positive for SE 

at any point during the life of the flock 

that was housed in the poultry house 

prior to depopulation. The agency 

realizes that the floor in a concretefloored house could appear light gray, 

but we do not expect to see any 

accumulation of manure in a house that 

has had the manure removed, and we do 

not anticipate practical difficulties in 

our ability to enforce this requirement. 

We plan to publish guidance on 

acceptable manure removal subsequent 

to this final rule. 

(Comment 18) Several comments 

objected to the wet cleaning 

requirement in the proposed rule and 

suggested alternatives such as allowing 

flexibility so long as the cleaning and 

disinfection procedures are sufficient to 

eliminate SE. The comments stated that 

wet cleaning is impractical during the 

coldest months in some States; that it 

can encourage the growth of SE by 

creating an environment for growth of 

microorganisms in the poultry house; 

and that wet cleaning will harm some 

mechanical and electrical parts of 

equipment and cages. The comments 

argued that there is no scientific 

consensus in favor of wet cleaning. 

(Response) We agree that wet cleaning 

may not be practical in all situations 

and have removed the requirement from 

the final rule. As discussed in the 

proposed rule (69 FR 56824 at 56836), 

it is important that, once a poultry 

house has had an SE-positive 

environmental or egg test, a producer 

make every effort to rid the environment 

of SE before new laying hens are placed 

into that house to prevent the SE 

problem from being perpetuated in the 

replacement flock. The final rule retains 

the requirement in this circumstance to 

dry clean the poultry house to remove 

dust, feathers, and old feed prior to the 

addition of new laying hens to the 

house and following cleaning, to 

disinfect the positive poultry house 

with spray, aerosol, fumigation, or 

another appropriate disinfection 

method. 

5. Refrigeration (§ 118.4(e)) 

(Comment 19) Several comments 

raised concerns about the requirement 

in § 118.4(e) of the proposed rule that 

egg producers should refrigerate shell 

eggs if they are held longer than 36 

hours. Some comments urged FDA to 

change the time at which refrigeration is 

required to 72 hours after production. 

The comments noted that 72 hours 

would accommodate shell egg 

production over weekends and smaller 

producers that have pickups less 

frequent than daily, while at the same 

time ensuring that eggs are not 

accumulated and held over long periods 

without refrigeration. 

One comment argued that the 

requirement to refrigerate eggs within 36 

hours could actually be counterproductive with respect to the safety of 

eggs destined for use in the table 

market. The comment reasoned that 

more checks and cracks will occur when 

previously refrigerated eggs are washed 

due to the greater change in 

temperature. The comment 

recommended that FDA not set a 

prescriptive time requirement for 

refrigeration of table eggs unless further 

research justifies the need, but that if a 

time limit for refrigeration must be set, 

it should be set at 72, not 36, hours. 

(Response) We disagree that eggs 

should remain unrefrigerated for up to 

72 hours after laying. Our proposed 

requirement that eggs be refrigerated if 

stored more than 36 hours was based on 

data indicating that, although fresh shell 

eggs provide an inhospitable 

environment for Salmonella to multiply, 

the chemical and physical barriers 

against bacterial movement and growth 

in shell eggs degrade as a result of the 

time and temperature of holding (69 FR 

56824 at 56836 through 56887). As they 

degrade, shell eggs provide an 

increasingly more hospitable 

environment for the growth of SE. 

Studies have shown that SE, when 

inoculated into the albumen (whites) of 

whole shell eggs, multiplied to high 

numbers if the eggs were not properly 

refrigerated (Refs. 46, 47, and 48). 

The 36-hour limit for unrefrigerated 

holding is supported by a model, 

contained in the 1998 joint SE risk 

assessment (Ref. 21), which was 

developed to examine the relationship 

among holding time, holding 

temperature, and yolk membrane 

breakdown as an indicator of SE risk. 

(The yolk membrane separates the 

nutrient-rich yolk and any SE bacteria 

that might be present in the albumen; 

breakdown or loss of the yolk membrane 

results in rapid growth of SE present in 

the albumen.) The model showed that, 

at 70 to 90 °F (i.e., temperatures that 

might be observed in unrefrigerated egg 

holding areas in farms or warehouses or 

in transport vehicles), there was much 

less breakdown of yolk membrane in 

eggs held no longer than 36 hours than 

in eggs held no longer than 72 hours. 

According to the model, eggs held at 70 

°F will experience at least a 16-percent 

breakdown of yolk membrane after 36 

hours and a 25-percent breakdown after 

72 hours. Eggs held at 80 °F will suffer 

at least a 22-percent breakdown after 36 

hours and a 39-percent breakdown in 

the yolk membrane at 72 hours. At 90 

°F, there is at least a 33-percent 

breakdown after 36 hours and at least a 

62-percent breakdown of the yolk 

membrane after 72 hours. In the 2005 

FSIS risk assessment (Ref. 22), 

refrigeration was modeled again; this 

risk assessment found that limiting eggs 

to just 12 hours without refrigeration, 

the shortest timeframe between laying 

and refrigeration that was evaluated, 

provided the greatest public health 

benefit among the time frames studied. 

Although, as we stated in the 

proposed rule, we believe that it is very 

important that eggs be placed into 

refrigerated storage as soon as possible 

after they are laid, we recognize that this 

may not be practical for all producers. 

It may take several hours or longer after 

the eggs are laid before they are 

collected or picked up for transport. 

According to the Layers 99 study (Ref. 

28), almost half of the farm sites 

surveyed had egg pickups every 1 to 2 

days. In light of all of these data, we are 

retaining in the final rule the 

requirement of 36 hours as the 

maximum amount of time eggs may be 

held unrefrigerated on the farm. 

(Comment 20) Several comments 

questioned the proposed refrigeration 

temperature requirement of 45 °F. One 

comment stated that holding eggs at 45 

°F would result in two problems related 

to egg quality and safety. First, the 

comment stated that ambient moisture 

would condense on the cold eggs and 

cause them to ‘‘sweat’’ before they are 

washed/sanitized, increasing the chance 

of surface contamination penetrating the 

eggs. Second, the comment stated that 

when cold eggs are moved into the egg 

washer, which uses hot water, checks or 

cracks can develop in the shell, 

lowering the quality of the egg and 

increasing the risk of future surface 

bacterial or fungal contamination getting 

into the interior of the eggs. 

(Response) FDA does not agree that a 

45 °F refrigeration requirement is too 

low. This requirement is consistent with 

FDA’s final rule on refrigeration of shell 

eggs at retail (65 FR 76092), and like 

that requirement, the rule is based on 

research demonstrating that 

Salmonellae do not grow well or rapidly 

at temperatures less than or equal to 45 

°F. FDA finds that the scientific 

evidence on the growth of SE in eggs 

shows that control of storage 

temperature of shell eggs can 

significantly reduce the rate of 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33041 

multiplication of any SE present (Refs. 

46, 47, and 48). 

FDA agrees that there can be quality 

and safety problems such as thermal 

checks (hairline cracks in the shell) 

associated with refrigerating eggs 

immediately prior to processing into 

either table eggs or egg products. 

Therefore, FDA is modifying the rule to 

allow an equilibration step (a step 

during which the eggs reach room 

temperature) before eggs are processed. 

Specifically, under § 118.4(e) of the final 

rule, shell eggs that have been 

refrigerated may be held at room 

temperature for no more than 36 hours 

just prior to processing to temper them, 

which will reduce the risk of hairline 

cracks in the shell that could contribute 

to bacteria entering the egg during 

washing if the egg is too cold. We 

believe the benefits of refrigeration 

accompanied by equilibration outweigh 

any possible risk associated with 

sweating of the eggs. 

(Comment 21) One comment stated 

that the rule is silent on the refrigeration 

of eggs that are segregated at the grading 

operation for processing at egg products 

plants. These are the eggs that do not 

meet grade requirements, are checked 

(that is, the shell is cracked, but the 

shell membrane is intact), or have dirt 

on the shell. The comment explained 

that the last two types of eggs pose a 

significant food safety risk if handled 

improperly and can be processed only 

in a USDA-inspected egg products 

plant. Additionally, the comment stated 

it may take several days to accumulate 

a quantity of checked and dirty eggs for 

shipment. Similarly, the comment 

stated that surplus eggs produced by 

hatchery flocks are accumulated and 

sent to egg products plants for 

processing and could present a hazard 

if not properly refrigerated. The 

comment noted that most shell egg 

packers and hatcheries currently 

refrigerate these eggs, but the comment 

urged FDA to amend the proposed rule 

to require that eggs segregated at grading 

operations and at hatcheries and 

intended for further processing also be 

subject to the refrigeration requirements 

proposed for on-farm storage. 

Another comment noted that USDA 

only requires refrigeration at the 

packer’s facility after packing for the 

consumer. The comment stated that nest 

run eggs (eggs that are packed as they 

come from the production facilities 

without having been washed, sized, 

and/or candled for quality) and 

restricted eggs, (eggs whose use is 

limited by FSIS under the Egg Products 

Inspection Act because they are, for 

example, checked or dirty) are not 

required to be refrigerated. This 

comment further stated that to maintain 

the maximum benefit of SE illness 

reduction from refrigeration, eggs 

should be refrigerated throughout the 

distribution chain. 

(Response) We sought comment in the 

proposed rule on whether to require 

refrigerated transport of shell eggs not 

already required by regulation or within 

USDA’s jurisdiction; for example, 

transport of shell eggs from a farm or a 

packer to a food manufacturing facility. 

We further stated that we would 

consider putting into place 

requirements similar to those we 

finalized for refrigerated storage of shell 

eggs at retail (i.e., transport of shell eggs 

at or below 45 °F ambient temperature). 

FDA agrees with the comment that the 

refrigeration requirement in the 

proposed rule only addresses eggs held 

at the farm for more than 36 hours after 

time of lay. The proposed requirement 

does not address nest-run eggs, surplus 

hatching eggs sent to the table egg 

market, eggs shipped to egg products 

facilities and then sent to the table egg 

market, or any other eggs that are held 

or transported at locations other than at 

the producer’s layer farm. Holding or 

transporting these eggs without 

refrigeration allows growth of any SE 

that may be present in the eggs. We also 

agree with the comment that, to 

maintain the maximum benefit of SE 

illness reduction from refrigeration, eggs 

should be refrigerated throughout the 

distribution chain. Therefore, to reduce 

this potential growth of harmful 

bacteria, we have modified § 118.4(e) in 

the final rule to require refrigeration 

during all storage and transportation 

beginning at 36 hours after time of lay. 

Following are three examples of eggs 

requiring refrigeration under the final 

rule, which would not have required 

refrigeration previously: (1) Unwashed 

eggs more than 36 hours old from a farm 

with 3,000 or more layers that have left 

the producer’s farm and are being 

transported to or are at a shell egg 

processing facility or are being held in 

a warehouse; (2) eggs from a farm with 

3,000 or more layers that are more than 

36 hours old and are being shipped from 

an egg products facility (USDAinspected plant) to a shell egg 

processing facility; and (3) eggs from a 

hatchery that are more than 36 hours 

old, were never used for hatching, and 

are now being transported to a shell egg 

processing facility. For clarification, in 

the final rule we are defining ‘‘egg 

products facility’’ as ‘‘a USDA-inspected 

facility where liquid, frozen, and/or 

dried egg products are produced,’’ and 

‘‘shell egg processing facility’’ as ‘‘a 

facility that processes (e.g., washes, 

grades, packs) shell eggs for the table 

egg market.’’ 

In addition, as discussed in response 

to comment 20, for those eggs to be 

processed as table eggs but which are 

not processed for the ultimate consumer 

within 36 hours from the time of lay and 

therefore are required to be held and 

transported under refrigeration, we are 

permitting an equilibration step. 

E. Comments on ‘‘Environmental 

Testing for Salmonella Enteritidis (SE)’’ 

(Proposed and Final § 118.5) 

(Comment 22) Several comments 

challenged the proposed requirement 

that egg producers conduct 

environmental testing when a flock has 

reached 40 to 45 weeks of age, and if the 

flock has molted, 20 weeks after the end 

of the molting process. The comments 

suggested that instead FDA follow the 

practice of some EQAPs, which require 

testing of the layer house environment 

at the end of the laying period, prior to 

depopulation. One comment stated that 

environmental samples should be 

obtained anytime within the time period 

of active production, or between the 

40th and 60th week of production. In 

addition, the comment stated that if the 

environmental samples taken at this 

time are negative there is no need to 

conduct additional samples for those 

birds that have undergone an induced 

molt. 

Another comment stated that the 1998 

joint SE risk assessment (Ref. 21), as 

well as draft 2004 USDA risk 

assessment (Ref. 49) support a revision 

to the proposed testing time for postmolt layers from 20 weeks, as proposed, 

to a 4 to 6 week range post-molt. In 

support of this suggestion, the comment 

noted that the 2004 FSIS draft risk 

assessment finds the greatest risk of 

infected eggs immediately after molt, 

but at this time hens are laying few eggs. 

As a result, the comment estimated that 

if the increased risk used in the draft 

risk assessment is multiplied by 

expected lay post-molt, the greatest 

number of infected eggs from infected 

molted flocks will occur between 4 to 6 

weeks post-molt. 

(Response) We do not agree that the 

timing for environmental testing of 

unmolted flocks should be modified. As 

stated in the proposed rule, 

environmental testing for SE is an 

indicator of whether SE prevention 

measures are working effectively. 

Testing provides an opportunity for 

producers to evaluate the SE status of 

their poultry houses and to take 

appropriate action if their prevention 

measures are not preventing SE. 

Information from an EQAP with a 

testing protocol indicates that the 

mstockstill on DSKH9S0YB1PROD with RULES2

33042 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

highest numbers of positive 

environmental samples are found when 

laying hens are 40 to 45 weeks of age 

(Ref. 50). Additionally, the Layers 99 

study found that flocks less than 60 

weeks of age (younger flocks) were five 

times more likely to test positive for SE 

than older flocks (Refs. 27 through 29). 

In the absence of any new data, we are 

retaining in the final rule the 

requirement that environmental testing 

for SE be conducted for the flock in each 

poultry house when each group of 

laying hens making up that flock is 40 

to 45 weeks of age. An SE-positive 

environmental test at the 40 to 45 week 

time period notifies a producer that 

there is a problem with SE 

contamination. At this point, action can 

be taken to determine if there are SEcontaminated eggs and to keep SEcontaminated eggs out of the table egg 

market. Additionally, a positive 

environmental test during the 40 to 45 

week period (just after peak lay) gives a 

producer sufficient notice to make 

arrangements for cleaning and 

disinfection of the contaminated poultry 

house at depopulation. 

FDA does, however, agree that the 

post-molt environmental test should be 

moved from 20 weeks post-molt to 4 to 

6 weeks post-molt. As the comment 

noted, the FSIS 2004 draft risk 

assessment (Ref. 49) (as well as the final 

version of the risk assessment, Ref. 22, 

published in 2005) described research 

by Ebel and Schlosser (Ref. 23) that 

indicated that ‘‘[e]vidence from field 

studies suggests that molted flocks, in 

the first 20 weeks of post-molt 

production, will produce SEcontaminated eggs more frequently than 

non-molted flocks’’ (Ref. 22 at page 29). 

As FSIS explained in the draft and final 

risk assessments, ‘‘[t]he stress of molting 

is thought to result in an increased 

susceptibility of hens to SE infection’’ 

(Id.). FSIS relied in its analysis on data 

contained in the ‘‘Salmonella Enteritidis 

Pilot Project Progress Report’’ (Ref. 51) 

and the study by Holt on immunological 

factors in laboratory hens (Ref. 52), 

which were referenced in the proposed 

rule. As we stated in our response to 

comment 4, the data underlying the 

FSIS risk assessment, which we 

reviewed in the proposed rule, do not 

support a prohibition on induced 

molting. However, these data do suggest 

that there may be some elevated risk 

that hens may become infected with SE 

in the post-molt period, before 20 weeks 

have passed. In light of these studies, 

we have decided that it would be 

prudent to conduct environmental SE 

testing earlier post-molt than was 

proposed. Therefore, to evaluate the 

status of a laying hen house post-molt 

to determine the effectiveness of SE 

prevention measures during the postmolt laying cycle, we have amended 

§ 118.5(b) to require an environmental 

test at 4 to 6 weeks after the end of any 

molting process. 

(Comment 23) Several comments 

suggested that FDA revise the proposed 

rule to make the environmental 

sampling plan flexible. 

In support of this suggestion, some 

comments stated that because the rule 

would cover very diverse egg laying 

facilities in the United States (e.g., freerange farms and confinement operations 

using cages or nesting boxes), one single 

sampling plan would not be effective. 

One comment recommended a different 

sampling plan requirement for each 

operation type. The comment suggested 

that all confinement ‘‘barns’’ could be 

sampled under the same plan, and 

recommended that for such operations 

FDA require that a minimum of one 

manure drag sample be obtained from 

each bank of cages. The comment stated 

that more research is needed to 

determine the most appropriate sample 

sites for operations that are cage-free, 

pasture-raised, or free-range. Another 

comment noted that the sampling plan 

should also be flexible because of 

variations in operations within 

geographic areas and across geographic 

regions, for example, difference in 

manure collection/disposal systems. 

(Response) FDA agrees that because 

the final rule covers very diverse egg 

laying facilities, the same sampling plan 

may not be practical for all operations 

and that the sampling plan requirement 

should be flexible to accommodate 

variations in housing styles. The 

proposed rule did not specify a 

particular plan; rather it provided at 

§ 118.7(a) that ‘‘[w]ithin each poultry 

house, you must sample the 

environment using a scientifically valid 

sampling procedure.’’ In the final rule, 

to make more clear that the 

appropriateness of a sampling plan 

depends on the house being sampled, 

we have modified the language in 

§ 118.7(a) to require ‘‘a sampling plan 

appropriate to the poultry house 

layout.’’ Specific sampling instructions 

have been incorporated into the 

environmental testing method, 

‘‘Environmental Sampling and 

Detection of Salmonella in Poultry 

Houses.’’ 

(Comment 24) One comment 

questioned whether FDA could 

appropriately determine whether a 

producer is using a ‘‘scientifically valid 

sampling procedure,’’ as required in 

proposed § 118.7(a). The comment 

suggested that, for example, there might 

be no reason to believe that sampling 

every cage row is more effective than 

sampling 32 random sites in a laying 

house. Another comment stated that the 

only ways to generate drag samples that 

can be compared across the various 

types of poultry house are the two 

discussed in the proposal: Drag 

swabbing the aisles (the ‘‘whole aisle’’ 

method) and swabbing a certain number 

of feet of egg belt (the ‘‘limited feet from 

32 sites’’ method) because eggs are 

collected by hand in only a few houses. 

Another comment stated that while the 

procedure for sampling manure pits in 

a high rise facility with caged layers is 

fairly straightforward, nonconfinement 

operations do not have a clear direction 

on what is the most appropriate 

sampling site. The comment asserted 

that it would be unreasonable to expect 

an operation with 10,000 layers to 

develop a scientifically valid sampling 

program when FDA cannot define what 

is scientifically valid. 

(Response) In the proposal FDA 

described the ‘‘whole aisle’’ and 

‘‘limited feet from 32 sites’’ swabbing 

methods and acknowledged differences 

in the types of poultry houses and the 

challenges involved in sampling all 

houses representatively and 

consistently. We asked for comments 

about the appropriateness of different 

methods of drag swabbing and received 

no comments that would support one 

method over the other. To specifically 

acknowledge differences between 

poultry houses, the rule now requires ‘‘a 

sampling plan appropriate to the 

poultry house layout.’’ FDA believes 

that there are sufficient data for 

producers to develop sampling plans for 

all poultry environments. Over the past 

ten years, FDA has performed 

environmental sampling in a variety of 

poultry houses, which have contained 

from 3,500 to 250,000 birds and have 

varied from high rise to shallow pit to 

sunken water pit houses. The results of 

this sampling indicate that the manure 

area and eggbelts are the two best areas 

to sample (Ref. 53). FDA has 

incorporated specific sampling 

instructions into the environmental 

testing method, ‘‘Environmental 

Sampling and Detection of Salmonella 

in Poultry Houses.’’ 

(Comment 25) One comment stated 

that because it is common for producers 

in Hawaii to have multi-age flocks in 

one poultry house, it would be difficult 

to perform SE testing for specific flocks 

that reach the age at which testing is 

required. The comment further stated 

that if there is an environmental 

positive test result for a typical farm in 

Hawaii (5 to 10 acres), there would be 

no space to store the eggs to wait for egg 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33043 

test results. The comment argued that a 

positive environmental test result could 

mean depopulation of the entire farm 

and, even if the egg tests are negative, 

it could still mean the end of the farm. 

(Response) The comment reflects a 

misunderstanding of the rule. Section 

118.5 requires environmental testing of 

the entire poultry house when any 

group of laying hens in that house is 40 

to 45 weeks of age. If multi-age flocks 

are housed in the same poultry house, 

egg producers must perform 

environmental testing on the entire 

house whenever any group of laying 

hens in that house reaches 40 to 45 

weeks of age. Furthermore, upon finding 

an environmental sample positive for 

SE, there is no requirement to store or 

otherwise hold the eggs. The eggs from 

a flock in a house that has tested 

environmentally positive for SE may 

continue to be marketed as table eggs 

until the producer is notified that an egg 

test is determined positive for SE. At 

that point, the producer must divert 

those eggs to treatment. 

(Comment 26) One comment argued 

that a testing regulatory scheme would 

not be effective in preventing illnesses 

from SE. This comment stated that 

environmental and egg testing only 

indicates the status of the house at the 

time of the test. 

(Response) Environmental and egg 

testing alone do not prevent SE, but 

instead serve as an indicator and 

verification step that the SE prevention 

plan is working properly. Further, a 

positive egg test can prevent 

contaminated eggs from reaching 

consumers and thereby protect the 

public health. 

Diversion (§§ 118.5 and 118.6) 

(Comment 27) We received many 

comments on our proposed requirement 

that eggs from a SE-positive layer house 

environment must be diverted to 

pasteurization, unless testing of four 

pools of 1,000 eggs each yields SEnegative results. One comment 

supported the diversion requirement as 

a reasonable way to keep higher-risk 

eggs out of the table egg market, but 

stated that the requirement could pose 

an economic risk to shell egg producers 

that do not have their own egg 

pasteurization capabilities. Other 

comments similarly noted that this 

requirement could have an economic 

impact on egg producers that lack ready 

access to egg pasteurization facilities, 

because they will have to sell their eggs 

to ‘‘breakers’’ who already have an 

adequate supply of eggs (through 

ownership of laying houses or preexisting contacts with such houses). As 

a result of this arrangement, egg 

producers will have to take whatever 

price they can get from the breakers and 

the price will inevitably be much lower 

than the price they would have gotten 

if the eggs had not come from an SEpositive layer house. Some comments 

expressed concern that egg product 

buyers might not want to purchase 

product known to have come from eggs 

diverted because of SE, further reducing 

the breaker’s incentive to buy the 

diverted eggs. 

Thus, these comments expressed 

concern that this diversion would result 

in a cost to the industry much greater 

than that projected by FDA in the 

proposal. One comment stated that, 

even if they were willing to buy the 

diverted eggs, breakers might offer a 

price too low to make it economically 

feasible to retain the flock. That same 

comment noted that diversion to the pet 

food supply chain would not be an 

option because SE-positive eggs would 

have to be run through the processing 

plant, and stated that destruction may 

be the only alternative in most cases. 

(Response) FDA recognizes that 

diversion of eggs may be expensive or 

impracticable. We do not agree that we 

have underestimated these costs. 

Further, these costs are outweighed by 

the public health benefit realized by 

diverting contaminated eggs. 

In addition, FDA believes there may 

be some confusion about the diversion 

requirement. Under the rule, diversion 

is required under the following three 

scenarios: (1) When the environment 

tests positive for SE, and the producer 

chooses not to test eggs from that house 

to determine whether the eggs are also 

positive; (2) when the eggs in a house 

test positive for SE; and (3) by order of 

an FDA, State, or local representative 

after a finding that shell eggs have been 

produced or held in violation of this 

regulation. 

(Comment 28) One comment 

requested that FDA include hard 

cooking as an acceptable method of 

diversion. 

(Response) If diversion is required, 

you do not necessarily have to send the 

eggs to a breaker. You may instead 

divert them to an alternative process 

that achieves at least a 5-log reduction 

in SE, using, for example, in-shell 

pasteurization of shell eggs or hard 

cooking of shell eggs. 

In the proposed rule, FDA defined 

treatment as ‘‘a technology or process 

that achieves at least a 5-log destruction 

of SE for shell eggs, or the processing of 

egg products in accordance with the Egg 

Products Inspection Act.’’ We have 

retained this definition in the final rule. 

Thus, as long as the hard-cooking 

process achieves at least a 5-log 

destruction of SE, it is an acceptable 

method of diversion. 

(Comment 29) One comment stated 

that Hawaii has no egg breaking 

facilities, and that the costs of shipping 

diverted eggs to breaking facilities in 

California or elsewhere in the 

continental United States would be 

prohibitive. The comment also noted 

that in the past some breaking facilities 

on the West coast have refused to accept 

eggs from Hawaii. The comment 

requested that the rule be made more 

flexible to address the situation facing 

Hawaii and other States with inadequate 

or no egg diversion capacity. 

(Response) FDA recognizes that there 

is regional variation in the cost of 

diversion for eggs. For a full discussion 

of this variation, see section V.F of this 

document. We understand that there are 

currently no breaking facilities in 

Hawaii and that it may not be 

economically feasible to ship diverted 

eggs to the continental United States or 

Canada. For egg producers in Hawaii, 

and for others also unable to avail 

themselves of breaker facilities, the cost 

of diversion per egg is the lost value of 

a table egg. In the proposed rule, we 

estimated that the price to a producer 

for one dozen diverted eggs in Hawaii 

is $0.53, or $0.044 per egg. We recognize 

that this cost is more than double the 

cost of diversion for egg producers in 

other regions; however, per our usual 

approach for public health regulations 

promulgated under the FFDCA and the 

PHS Act, we are establishing minimum 

national standards that will equally 

apply to all States. We acknowledge that 

diversion for egg producers in situations 

such as those in Hawaii may be 

particularly financially challenging. As 

discussed above, we will use guidance 

as appropriate to mitigate the impacts 

associated with implementation of the 

rule. 

F. Comments on ‘‘Egg Testing for 

Salmonella Enteritidis (SE)’’ (Proposed 

and Final § 118.6) 

(Comment 30) One comment agreed 

with the sampling protocol established 

in § 118.6(c) for egg testing for SE, but 

stated that 24 hours is not a practical 

timeline to begin egg testing after a 

positive environment is found. The 

comment suggested that § 118.6(c) 

require egg producers to immediately 

notify the appropriate state agency of 

the positive environmental findings and 

that egg sampling commence within 2 

weeks after the environmental test 

results are received. Another comment 

suggested that FDA revise the time 

period allowed between receiving a 

positive environmental sample and 

conducting the required egg testing from 

mstockstill on DSKH9S0YB1PROD with RULES2

33044 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

24 to 72 hours to allow for weekends or 

holidays when laboratory facilities 

would most likely not be available to 

complete the tests. Several comments 

further argued that the 24-hour 

requirement for initiating egg testing is 

impossible, as even collecting the eggs 

within 24 hours might be difficult at 

times. In addition, the comments argued 

that to arrange testing for 1,000 eggs 

requires scheduling of several items, 

including people, labs, and media, and 

cannot be done in 24 hours. 

(Response) For the reasons identified 

in the comments, FDA agrees that 24 

hours may not be practical to begin egg 

testing. Therefore, we have modified 

§ 118.5(a)(2)(ii) and (b)(2)(ii) in the final 

rule. Rather than setting a time when 

egg testing must begin, the rule 

establishes a deadline for conducting 

and completing such testing and 

receiving the results. The final rule 

requires that the results of egg testing for 

the first 1000 eggs must be obtained 

within 10 calendar days of receiving 

notification of the positive 

environmental test. This time period 

allows for the farm to obtain a 

laboratory to do the work and collect the 

eggs and for the laboratory to perform 

and complete the tests. 

(Comment 31) Two comments stated 

that the egg sampling procedure should 

be witnessed by a regulatory agency, 

such as a State Department of 

Agriculture. 

(Response) FDA disagrees. Other FDA 

regulations, such as Hazard Analysis 

and Critical Control Point (HACCP) 

Procedures for the Safe and Sanitary 

Processing and Importing of Juice (21 

CFR part 120) and Procedures for the 

Safe and Sanitary Processing and 

Importing of Fish and Fishery Products 

(21 CFR parts 123 and 1240), do not 

require sampling and other testing to be 

overseen by FDA or State officials to be 

effective. The egg sampling requirement 

is expected to be routine and a regular 

component of the on-farm plan to 

prevent SE. 

Furthermore, to assist FDA in 

ensuring compliance, the final rule 

requires that each facility establish and 

maintain records of plan activities, 

including egg sampling. Such records 

will assist FDA in determining whether 

sampling was performed appropriately. 

G. Comments on ‘‘Sampling 

Methodology for Salmonella Enteritidis 

(SE)’’ (Proposed and Final § 118.7) 

(Comment 32) One comment stated 

that FDA should distinguish between a 

sampling plan used to verify or monitor 

an on-farm program and a sampling 

plan used for an SE outbreak trace back. 

The comment also asked for 

clarification of the scientific 

justification for the requirement in 

§ 118.7 that egg producers pull a 1,000 

egg sample, regardless of the size of the 

operation. The comment questioned 

whether sampling for monitoring 

purposes needs to be as extensive as 

that undertaken for outbreak trace back 

situations. 

Another comment noted that due to 

potential breakage, a sample size of 

1,050 eggs would eliminate the problem 

of having to use cracked or broken eggs 

(i.e., the laboratory can select 1,000 eggs 

from this 1,050 egg pool). 

(Response) The rule requires egg 

testing after receipt of notification of a 

positive environmental test (unless the 

eggs are treated). Sampling after a 

positive environmental test is intended 

to effectively detect SE-positive eggs 

from a flock. 

The rule requires that egg producers 

collect and deliver for testing a 

minimum of 1,000 intact eggs 

representative of a day’s production four 

times at 2-week intervals, resulting in a 

total test of 4,000 eggs over an 8-week 

period. This sampling scheme is based 

on data from the SE risk assessment 

indicating that an SE-contaminated 

flock may be producing SEcontaminated eggs with a prevalence of 

1 in 1,400 (Ref. 54). The sampling 

scheme would result in a 95 percent 

probability of accurately detecting an 

SE-positive egg from a flock producing 

contaminated eggs with the prevalence 

calculated in the risk assessment (Ref. 

54). 

We agree with the potential for 

breakage raised in the comment 

concerning the sample size for egg 

testing and have modified § 118.7(b) in 

the final rule so that the requirement is 

to ‘‘collect and deliver for testing a 

minimum of 1,000 intact eggs 

representative of a day’s production’’ 

(Emphasis added). 

With regard to the comment regarding 

making a distinction between a 

sampling plan for monitoring SE on the 

farm and for an SE outbreak trace back, 

FDA notes that this final rule does not 

address SE outbreak trace backs and is 

solely designed for the prevention of SE 

in shell eggs during production, storage 

and transportation. SE outbreak trace 

back is beyond the scope of this 

regulation and will not be addressed 

here. 

H. Comments on ‘‘Testing Methodology 

for Salmonella Enteritidis (SE)’’ 

(Proposed and Final § 118.8) 

(Comment 33) One comment 

recommended that FDA modify its 

required environmental testing method 

to conform to the methods currently 

being used by the industry, states and 

laboratories. One such method is that 

used by the NPIP. The comment stated 

that the proposed environmental testing 

method requires the use of an extra 

selective agar, bismuth sulfate (BS) agar, 

which has not been proven to be 

effective in isolating SE from 

environmental samples. The comment 

argued that BS agar is the agar of choice 

for isolating S. Typhi from clinical 

samples, but that it is not effective for 

environmental samples of SE. The 

comment suggested that the isolation 

with BS agar is an unnecessary step that 

should be eliminated from the method. 

(Response) The method we proposed 

for environmental testing is set forth in 

‘‘Detection of Salmonella in 

Environmental Samples from Poultry 

Houses,’’ which was proposed for 

inclusion in FDA’s Bacteriological 

Analytical Manual (BAM), or an 

equivalent method with respect to 

accuracy, precision, and sensitivity in 

detecting SE. The environmental testing 

method FDA proposed was very similar 

to the NPIP environmental testing 

method. For example, it included the 

same pre-enrichment and enrichment 

broth. It was different only in that it 

specified what specific plating agars 

should be used, and it required the use 

of three, not two, plating agars. The 

selective plating agars identified in the 

proposed rule method were brilliant 

green with novobiocin (BGN), xyloselysine tergitol 4 (XLT4), and BS. BGN 

and XLT4 are two of the selective 

plating agars that have been used by 

some laboratories using the NPIP 

method. 

With respect to the use of BS, FDA 

has performed additional plating with 

layer house environmental SE colonies 

on BS agar and has reconsidered the 

method for conducting environmental 

testing. As a result of this review FDA 

has eliminated the use of BS for 

environmental testing in the final rule 

and has changed the method to reflect 

the elimination of the BS agar. The 

method specified in the final rule, 

‘‘Environmental Sampling and 

Detection of Salmonella in Poultry 

Houses,’’ requires only two agars, BGN 

and XLT4. 

The comment did not challenge the 

specification that BGN and XLT4 be the 

plating agars used, and we have not 

changed this specific requirement in the 

final rule. As in the proposed rule, if 

other methods are at least equivalent to 

the specified method in accuracy, 

precision and sensitivity in detecting 

SE, they may be used instead of the 

method specified. 

(Comment 34) With respect 

specifically to environmental testing, a 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33045 

comment noted that the test does not 

allow for pooling of samples, which the 

comment stated would reduce the 

number of samples the laboratory would 

have to run with no loss in sensitivity 

of the test. The comment stated that 

pooling would reduce costs by 75 

percent. 

(Response) Although there are data 

showing that pooling of food samples, 

under specified conditions, does not 

compromise method sensitivity, we are 

not aware of any data, and the comment 

did not provide any such data, to 

support pooling for environmental 

sampling. Until such data become 

available, it would be imprudent of FDA 

to specify a test that includes 

compositing of environmental swabs. 

(Comment 35) One comment raised 

concerns about the proposed egg testing 

method. The comment stated that the 

method proposed by FDA differs from 

the method used by APHIS, as well as 

other methods used by industry, states 

and laboratories. In addition to the 

concern that the method that we 

proposed is not the same as that used by 

APHIS, the comment identified two 

other specific concerns with the 

proposed egg testing method. First, the 

comment stated that the proposed egg 

testing method requires the use of BS, 

an isolation media that is the media of 

choice for isolating Salmonella Typhi 

from clinical samples. Second, the 

comment stated that only two selective 

agar plates should be inoculated (BGN 

and XLT4) instead of the five proposed 

in the method for egg testing. 

(Response) Neither the description of 

the method discussed in the preamble of 

the proposed rule nor the reference to 

the method contained in the codified 

portion of the proposed rule are correct 

for the egg testing methodology. The 

method referred to in the codified 

portion of the proposed rule was 

actually a comparison study involving 

varying media and pre-enrichment. The 

method for testing eggs adopted in the 

final rule is the method in the BAM, 

chapter 5, ‘‘Salmonella.’’ 

Addressing the comments in turn, we 

disagree that we should adopt the 

APHIS egg testing method. Like the 

BAM method, the APHIS method first 

involves the disinfection of eggs and 

then the cracking, pooling and mixing of 

eggs. The two methods diverge at the 

third step, which is incubation: In the 

BAM method the pools are incubated at 

room temperature for 96 hours, while in 

the APHIS method the pools are 

incubated for only 72 hours. 

The two methods also are different in 

subsequent steps. In the BAM method, 

there is a pre-enrichment step in which 

a portion of the egg pool is enriched 

with trypticase soy broth supplemented 

with ferrous sulfate and incubated for 

24 hours, after which the pre-enriched 

sample is placed into 2 selective 

enrichment broths (tetrathionate and 

Rappaport-Vassiliades), and subsequent 

inoculation onto three selective media: 

BS, xylose lysine desoxycholate (XLD), 

and Hektoen enteric (HE). In the APHIS 

method, there is no pre-enrichment 

step. Instead, egg samples from the 

incubated eggs are inoculated onto 2 

selective agars (brilliant green and XLD). 

In both methods colonies that grow on 

the agar plates are sampled to 

characterize the organism as Salmonella 

by the reaction on two agar slants. 

FDA believes that, for the purposes of 

this final rule, its method is preferable 

to the APHIS ‘‘Egg Sampling Method’’ 

(58 FR 41048, August 2, 1993). First, the 

addition of ferrous sulfate at the preenrichment step in FDA’s method 

provides iron, which is needed by 

Salmonella for growth and which may 

not be present in sufficient quantity in 

the egg; thus, this step may increase the 

likelihood of detection. Second, the two 

selective enrichment media 

(tetrathionate and RappaportVassiliades) used in FDA’s method 

contain agents that are selective 

(inhibitory) against the non-Salmonella 

organisms. The inhibition of nonSalmonella organisms enhances the test 

by reducing competition and possible 

overgrowth from other organisms. 

Third, the use of three, rather than two, 

selective plating agars maximizes the 

possibility of detecting as many SE 

strains as possible. We note that the 

APHIS egg sampling method was 

developed and has been in use since 

1993. While it has been and remains a 

valid sampling method, the FDA 

method is more sensitive and can better 

detect the presence of Salmonella in 

food, and our adoption of this newer 

and more sensitive test will better 

support the public health goals of this 

rule. In summary, FDA believes that the 

specific method prescribed for egg 

testing in this final rule is tailored to the 

goals of the rule. 

With respect to the two more specific 

comments, FDA does not agree with the 

recommendation to eliminate BS in the 

method for egg testing, for the reasons 

explained in the previous paragraphs. 

Nor do we agree that the other two 

selective agar plates should be BGN and 

XLT4, rather than HE and XLD. In a 

comparison study of selective plating 

agars using selected high moisture foods 

(Ref. 55), the newer selective plating 

agars performed comparably with the 

BAM recommended agars (BS, HE, and 

XLD) but offered no advantage. The 

BAM is a collection of procedures 

preferred by analysts in FDA 

laboratories for the detection in food 

and cosmetic products of pathogens and 

microbial toxins. With some limited 

exceptions, these methods have been 

used and peer reviewed by FDA 

scientists as well as by scientists outside 

FDA. A new agar such as that proposed 

in the comments would be added to the 

BAM only after research indicated 

superior performance in the context of 

a variety of foods, and where the agar 

has been validated by collaborative 

studies. Therefore, the final rule does 

not deviate from the proposal in 

recommending the use of the BAMrecommended plating agars. However, 

we note that another test that is 

equivalent to the specified test in 

accuracy, precision and sensitivity for 

detecting SE may be used. 

(Comment 36) One comment 

recommended that FDA allow for 

improvements in the methodology for 

Salmonella testing to be easily and 

quickly adopted by the industry upon 

validation of the new method, and that 

FDA work with other Federal agencies 

with approved testing methods, such as 

APHIS and FSIS, to facilitate approval 

of methods and to reduce the need for 

one facility to use several different 

methods for Salmonella testing. The 

comment stated that APHIS, FSIS, and 

scientific organizations all have 

approved methods for detecting 

Salmonella and SE. The comment 

further stated that methods need to 

provide consistent results, yet be 

flexible enough to allow the industry to 

adapt quickly when improvements are 

made. For example, rapid testing 

methods are available and approved by 

some Federal agencies (e.g., FSIS). The 

comment argued the current proposed 

rule would not allow a producer to use 

a rapid method for testing of 

environmental or egg samples. The 

comment recommended that FDA 

conduct a literature review and, if 

necessary, additional research to 

determine what methods are 

appropriate to detect SE in the 

environment and egg samples, with the 

goal of identifying methods that are 

appropriate for the purpose of the 

testing and less costly (in both time and 

money) to the industry. 

(Response) In the final rule, FDA is 

allowing for other methods to be used 

for both environmental and egg testing, 

provided they are equivalent to the 

methods we specify in accuracy, 

precision, and sensitivity in detecting 

SE. 

mstockstill on DSKH9S0YB1PROD with RULES2

33046 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

I. Comments on ‘‘Administration of the 

Salmonella Enteritidis (SE) Prevention 

Measures’’ (Proposed and Final § 118.9) 

(Comment 37) Several comments 

suggested that FDA modify the 

requirement in proposed § 118.9 that 

one qualified individual at each farm 

have training equivalent to a 

standardized curriculum recognized by 

FDA or be otherwise qualified through 

job experience to administer the SE 

prevention measures. The comments 

proposed instead that FDA require 

training of a qualified individual 

responsible for each farm, even if that 

person is not an onsite employee. These 

comments noted that many producers 

employ one individual to oversee 

multiple farm locations, and that this 

person generally has more experience 

and training than the onsite employees 

and can provide better oversight on 

developing and implementing SE 

prevention measures. 

(Response) We agree and are 

amending the language in § 118.9 in the 

final rule to allow for one or more 

supervisory personnel, who do not have 

to be onsite employees, to be 

responsible for ensuring compliance 

with each farm’s SE prevention 

measures. 

(Comment 38) One comment 

expressed concern about the burden 

small producers may experience in 

complying with the proposed 

requirement that at least one individual 

at each farm must successfully complete 

standardized FDA-curriculum or 

equivalent training of up to 2 to 3 days 

on SE prevention measures for egg 

production. The comment requested 

that FDA consider developing a training 

program that could be implemented 

without requiring travel from the egg 

operation. Further, the comment 

requested that FDA not impose 

deadlines for such training that could be 

difficult for such small producers to 

meet. 

(Response) FDA plans to work with 

trade associations, State regulatory 

officials, and academia/extension 

officials to develop and offer training 

opportunities at venues that should 

satisfy the needs of small, medium, and 

large size facilities. Further, in the final 

rule, FDA has reduced the burden of the 

training requirement by allowing one or 

more supervisory personnel to serve as 

the trained administrator for all of the 

firm’s facilities rather than requiring a 

dedicated, trained individual at each 

facility. FDA believes this will 

substantially reduce the burden for 

small producers to comply. Finally, 

FDA notes that the rule provides that 

equivalent job experience can be 

substituted for training. 

J. Comments on ‘‘Recordkeeping 

Requirements for the Salmonella 

Enteritidis (SE) Prevention Measures’’ 

(Proposed and Final § 118.10) 

(Comment 39) In the proposed rule, 

FDA proposed certain recordkeeping 

requirements and solicited comments 

on whether additional recordkeeping 

measures should be required for a 

comprehensive SE prevention plan, and 

whether a written SE prevention plan 

should be required. Several comments 

supported the proposed recordkeeping 

requirements but did not comment on 

expanding them; one comment stated 

that there is no need for FDA to expand 

its recordkeeping requirements beyond 

those proposed. In addition, several 

comments supported expanding the 

proposed recordkeeping requirements to 

include a written SE prevention plan 

and records for compliance with SE 

prevention measures. Several comments 

noted that such records have been very 

useful in conducting inspections of 

facilities to determine compliance with 

the egg quality assurance program 

requirements and for identifying 

problems in the producer’s SE 

prevention plan when a test is positive. 

Another comment stated that records 

documenting compliance with all 

aspects of the SE prevention plan will 

be essential for a producer to determine 

if their plan is effective and in making 

adjustments to improve their plan. One 

comment opposed the requirement of a 

written SE prevention plan, stating that 

while a written plan would 

undoubtedly be an important 

management tool, and indeed many 

operations have such a plan, it is not 

necessary for FDA to mandate such a 

document. The comment stated FDA 

should not place undue emphasis on 

paperwork, as opposed to actual results. 

The comment suggested that FDA work 

with interested parties to develop a 

model SE prevention plan that could be 

provided to egg producers for their use. 

(Response) FDA agrees with the 

comments that the final rule should 

require a written SE prevention plan as 

well as records to document the 

effective implementation of that plan. 

This written SE prevention plan will set 

forth a producer’s plan to implement the 

regulation’s prevention, testing, and 

diversion measures. A written plan is 

necessary for producers to ensure that 

they have effectively and consistently 

implemented SE prevention measures. 

Further, a written plan greatly facilitates 

FDA inspection. SE prevention 

measures may be quite different among 

farms, given different facility design and 

size, and yet be equally effective in 

preventing SE contamination. 

Knowledge of the specific prevention 

measures taken on a farm, as discussed 

in an SE prevention plan, will assist 

FDA to assess compliance with the 

prevention measures. 

In addition, reviewing records of 

implementation of a facility’s specific 

SE prevention measures is the best 

mechanism for FDA to use to determine 

whether preventive measures have been 

implemented over a period of time. 

These required documents include 

records of implementation and 

compliance with all SE prevention 

measures. Such documents, for 

example, would include documents that 

pullets were SE monitored or raised 

under SE monitored conditions, records 

of SE environmental and egg testing, 

and records of activities required by the 

rule, such as treatment or diversion of 

eggs, as well as records indicating 

review of the plan and any changes or 

modifications made to the plan. Keeping 

careful written records will help 

producers ensure that they have 

effectively and consistently 

implemented SE prevention measures 

and will also assist FDA in determining 

whether the plan is being followed and 

in identifying problems in the 

producer’s plan when a test is positive. 

If changes or modifications need to be 

made, recording such changes or 

modifications will help ensure such 

changes are implemented. 

Therefore, under § 118.10, FDA is 

requiring that egg producers covered by 

all of the requirements in the rule 

(§ 118.1(a)(1)) maintain the following 

records documenting their SE 

prevention measures: (1) A written SE 

prevention plan; (2) documentation that 

pullets were ‘‘SE-monitored’’ or were 

raised under ‘‘SE-monitored’’ 

conditions, including environmental 

testing records for pullets; (3) records 

documenting compliance with the SE 

prevention measures; and (4) records of 

review and of modifications of the SE 

prevention plan and corrective actions 

taken. FDA intends to issue guidance 

regarding the recordkeeping 

requirement. 

(Comment 40) Two comments stated 

that FDA should require purchasers of 

diverted eggs (e.g., egg breaking 

facilities, shell pasteurization facilities, 

hard-cooked operations, or other 

facilities where the eggs could be 

treated) to maintain records indicating 

that the diverted eggs have been treated. 

These comments, submitted by an 

agricultural department and poultry and 

livestock commission of two major shell 

egg producing states, argued that 

without records there would be no 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33047 

ability to ensure the purchaser would 

treat the eggs and not simply divert 

them back to the table egg market. 

(Response) FDA agrees with the 

comments’ concern that purchasers of 

diverted eggs might resell them for the 

table egg market without treating them 

and that buyers might not know that the 

eggs must receive a treatment. To 

address this concern, FDA has modified 

this final rule by adding § 118.6(f), 

which requires that when shell egg 

producers divert eggs, the pallet, case, 

or other shipping container must be 

labeled and all documents 

accompanying the shipment must 

contain the following statement: 

‘‘Federal law requires that these eggs 

must be treated to achieve at least a 5- 

log destruction of Salmonella Enteritidis 

or processed as egg products in 

accordance with the Egg Products 

Inspection Act, 21 CFR 118.6(f).’’ The 

statement must be legible and 

conspicuous. FDA believes this 

additional requirement will help reduce 

the likelihood that these eggs will end 

up on the market without having been 

treated. We note that USDA–FSIS, not 

FDA, regulates egg-breaking facilities 

under the Egg Products Inspection Act 

(21 U.S.C. 1031 et seq.). 

The costs and benefits of this 

provision are addressed in section V of 

this document, Regulatory Impact 

Analysis. 

(Comment 41) One comment 

questioned the proposed rule to the 

extent it did not require an SE 

prevention plan until a producer has a 

positive environmental test. The 

comment stated that this delay increases 

the risk of producing SE-positive eggs 

that are distributed into the table egg 

market prior to the test and increases 

the difficulty of the producer reducing 

or eliminating SE from the environment 

and the flock. 

(Response) The assertion in the 

comment that the proposed rule did not 

require an SE prevention plan until a 

producer has a positive environmental 

test is incorrect. Neither the proposed 

nor final rules make having an SE 

prevention plan contingent upon a 

positive environmental test. 

(Comment 42) One comment 

commended FDA’s statement that ‘‘we 

intend to consider records that come 

into our possession under this rule as 

generally meeting the definition of a 

trade secret or commercial confidential 

materials’’ (69 FR 56824 at 56841). 

However, the comment requested that 

FDA identify in the final rule what 

information will be considered 

confidential commercial information 

(CCI) or a trade secret, and under what 

legal authority FDA will defend this 

designation against any legal challenges. 

(Response) FDA’s regulations in 21 

CFR part 20 govern the disclosure of 

information under the Freedom of 

Information Act (FOIA), including the 

disclosure of CCI and trade section 

information. The agency’s general 

policies, procedures, and practices 

relating to the protection of confidential 

information received from third parties 

apply to information received under this 

rule. It is not necessary that FDA 

designate information upfront as CCI or 

trade secret because these 

determinations can be made before 

releasing any information. If FDA denies 

a request under FOIA, it will rely on the 

provisions in that statute which permit 

the agency to withhold information. 

(Comment 43) One comment 

questioned FDA’s assertion that section 

361 of the PHS Act (42 U.S.C. 264) gives 

it legal authority to inspect records. The 

comment argued that FDA’s reliance 

upon section 361 of the PHS Act is 

misplaced and cannot be used to impose 

records inspection on food 

establishments where, according to the 

comment, such inspection is not 

allowed under section 704(a) of the 

Federal Food, Drug, and Cosmetic Act 

(FFDCA) (21 U.S.C. 374(a)). 

(Response) In the final rule, FDA 

relies on sections 402(a)(4) and 701(a) of 

the FFDCA (21 U.S.C. 342(a)(4) and 

371(a)) and sections 311, 361, and 368 

of the PHS Act (42 U.S.C. 243, 264, and 

271) to require access to certain records. 

FDA does not rely on section 704(a) of 

the FFDCA for authority to access 

records in this rule. Furthermore, the 

PHS Act provides authority for records 

access that is independent of the 

FFDCA. Specifically, section 361 of the 

PHS Act authorizes the Secretary of 

Health and Human Services (the 

Secretary) to make and enforce such 

regulations as ‘‘are necessary to prevent 

the introduction, transmission, or 

spread of communicable diseases from 

foreign countries into the States * * * 

or from one State * * * into any other 

State.’’ The basis for the recordkeeping 

requirements in the final rule is further 

explained in section IV of this 

document, Legal Authority. 

(Comment 44) One comment 

encouraged FDA to incorporate an 

automated recordkeeping requirement 

into the proposed rule. The comment 

stated that an automated system would 

enhance and support the recordkeeping 

requirements outlined in the proposed 

rule. The comment argued that such a 

system could provide farm-specific data, 

and an efficient, cost-effective way to 

research compliance. The comment 

stated that an automated system would 

greatly reduce the recordkeeping burden 

placed upon egg producers as well as 

the time, frequency, and cost associated 

with FDA inspections. 

(Response) FDA believes that the least 

burdensome way of implementing the 

recordkeeping requirements is to specify 

the information that must be contained 

in the records, but not the format in 

which the records are kept. Automated 

technology may not be available or 

within the means of all producers 

covered by the rule. We note that egg 

producers may choose to use automated 

recordkeeping as long as they maintain 

all of the required records. 

K. Comments on Registration 

Requirements for Shell Egg Producers 

(Final § 118.11) 

(Comment 45) In the proposed rule 

(69 FR 56841 at 56841 through 56842), 

FDA solicited comments about whether 

we should require that shell egg 

producers register with FDA. Several 

comments supported requiring 

registrations by egg producers covered 

by the SE prevention measures. These 

comments stated that registration of all 

producers covered by any of the SE 

prevention measures would be the most 

efficient method of obtaining the 

information needed to conduct annual 

inspections and allocate resources. 

Further, several comments stated that 

such a requirement should be consistent 

with the program developed under the 

agency’s bioterrorism regulations. The 

comments further stated that by 

identifying each farm’s location and 

size, a registration requirement would 

enable more efficient inspection, as well 

as better management and oversight of 

a shell egg recall. 

One comment stated that, to create a 

level playing field across the United 

States, registering all producers is 

necessary and that FDA may be able to 

cooperate with USDA/APHIS, which is 

presently developing a premises 

identification program for all animal 

premises in the United States. 

(Response) FDA agrees with the 

comments and is requiring that egg 

producers who must comply with all of 

the SE prevention measures in this rule, 

and also those producers who must 

comply only with the refrigeration 

requirements in this rule, register with 

FDA and provide information on the 

name of each farm, its location, layer 

capacity, and the number of houses. 

Persons who transport or hold shell eggs 

for shell egg processing or egg products 

facilities but who are not egg producers 

are not required to register with FDA, 

although they are subject to the 

refrigeration requirements in § 118.4. 

mstockstill on DSKH9S0YB1PROD with RULES2

33048 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

FDA intends to conduct inspections 

of egg farms to ensure that shell eggs are 

being produced under controls that will 

prevent SE contamination and reduce 

the likelihood that SE-contaminated 

eggs will cause foodborne illness. We 

will use the producer registration 

information to create a database used to 

efficiently conduct inspections and 

allocate inspection resources. Covered 

egg producers must register within 30 

days of becoming an egg producer or, if 

already an egg producer, by the 

applicable effective date of the rule. 

Additionally, registered egg producers 

are required to notify FDA within 120 

days of ceasing egg production 

(excluding seasonal egg producers or 

those who temporarily cease operation 

due to labor disputes, fire, natural 

disasters, or other temporary 

conditions). 

Producers can register online via the 

Internet, by completing a paper form 

and mailing or faxing it to FDA, or by 

sending a CD–ROM containing the 

relevant registration information to 

FDA. If ceasing egg production, 

producers can notify FDA either online 

via the Internet or by completing a 

paper form and mailing or faxing it to 

FDA. 

(Comment 46) One comment objected 

to requiring producers who pack eggs to 

register, stating that every producer with 

packing facilities is registered with the 

FDA under the registration rule and 

should not be required to register a 

second time. The comment agreed that 

producers that do not pack eggs, but sell 

eggs that will ultimately go into the 

table egg market, should be registered so 

that FDA can ensure these firms are 

following the on-farm production and 

testing requirements of the SE rule. 

(Response) Farms are not required to 

register under FDA’s Registration of 

Food Facilities regulation (21 CFR 

1.226(b)). If a farm also has a packing or 

processing facility, then only the 

packing or processing facility is 

required to register under the 

registration rule if those packing and 

processing activities do not qualify 

under the farm exemption (see ‘‘farm’’ 

definition for activities that are covered 

in the farm exclusion under 21 CFR 

1.227(b)(3)). Because the packing/ 

processing facility registration 

information may not fully identify the 

farm location, FDA is requiring that 

information in this regulation. If the 

information that would be provided by 

an egg producer during registration has 

already been provided under the 

registration regulation, the producer 

may submit its registration number 

rather than registering again. 

(Comment 47) One comment objected 

to the proposed registration requirement 

as an unnecessary burden and an 

unreasonable invasion of privacy. The 

comment argued that FDA only should 

check for compliance. The comment 

further argued that ‘‘unexpected visits 

are not appropriate as a respect for other 

people and the reality is that no one can 

hide what you want to see in 24 hours.’’ 

The comment further argued that 

registration will result in a loss of 

privacy for the producer and is 

unnecessary for the success of the 

program. 

(Response) FDA disagrees with this 

comment. As stated above, registration 

will aid in the identification of egg 

producers for inspection and 

compliance purposes. We will use the 

producer registration information to 

create a database that we will use to 

efficiently conduct inspections and 

allocate inspection resources. With 

regard to ‘‘unexpected visits,’’ section 

704 of the FFDCA (21 U.S.C. 374) 

authorizes FDA inspections without 

advance notice and FDA’s practice of 

making such inspections precedes this 

rule and is independent of whether 

registration is required. 

(Comment 48) One comment 

expressed concern that information 

submitted to register facilities would be 

subject to the Federal Freedom of 

Information Act (5 U.S.C. 552), and that 

public release of this information could 

result in a decrease of security at the 

producer sites. The comment stated that 

FDA has other means at its disposal to 

learn the site information needed to 

administer this program and still respect 

the need for security at the producer 

sites. 

(Response) FDA recognizes that this 

information may be subject to disclosure 

under FOIA, unless there is statutory 

authority there or elsewhere that 

protects it. However, we disagree that 

the risk of such disclosure outweighs 

the public health benefits of collecting 

this information. As stated previously, 

registration will facilitate FDA’s 

identification of egg producers for 

inspection and compliance purposes. 

We will use the producer registration 

information to create a database that we 

will use to efficiently conduct 

inspections and allocate inspection 

resources. 

L. Comments on ‘‘Enforcement and 

Compliance’’ (Proposed and Final 

§ 118.12) 

There were no comments on this 

section. 

M. Comments on Request for Comments 

as to Whether FDA Should Mandate 

Special Requirements for Food 

Establishments That Specifically Serve 

Highly Susceptible Populations 

(Comment 49) We received a number 

of responses to our request in the 

proposed rule for comments on whether 

the current FDA Food Code system 

(under which states may adopt and 

implement provisions of the FDA Food 

Code) is adequate to protect highly 

susceptible populations from 

salmonellosis, or whether instead we 

should establish mandatory Federal 

standards for food establishments that 

serve eggs to highly susceptible 

populations, such as the elderly. Several 

of these comments supported the 

Federal codification of the egg-related 

Food Code provisions for food 

establishments specifically serving 

highly susceptible populations, and one 

comment opposed codification. 

One comment supporting codification 

stated that egg producers do not have 

full control or responsibility for egg 

safety, and that food establishments and 

consumers must share in the 

responsibility for egg safety. The 

comment opposed to setting Federal 

standards stated that the egg safety goal 

cannot be achieved through mandatory 

Federal requirements at the food 

establishment level. The comment 

recommended continuing mandatory 

on-farm efforts while continuing 

educational efforts at retail and 

consumer levels. 

(Response) FDA agrees that food 

establishments that specifically serve 

highly susceptible populations can play 

an important role in egg safety As we 

discussed in section I.H., a majority of 

states and territories have adopted into 

their own retail food codes the relevant 

egg-associated provisions of the FDA 

Food Code (sections 3–202.11(C), 3– 

202.13, 3–202.14(A), and 3–801.11(B)(1) 

and (B)(2), (C)(2), (E), and (F)(1) and 

(F)(2) of FDA’s 2005 Food Code (see 

discussion under section I.H of this 

document regarding the changes made 

from the 2001 Food Code)). In addition, 

other state, local, Federal, or voluntary 

standards applicable to these facilities 

may have similar egg safety provisions, 

although we were not able to identify or 

quantify all such standards. We agree 

with the comment that encouraged us to 

continue education efforts at the retail 

and consumer levels. We also agree that 

codification of the FDA Food Code 

provisions is not a necessary exercise of 

our authority. Instead, we have 

determined that we will continue to 

encourage states to adopt the relevant 

provisions of the FDA Food Code. 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33049 

(Comment 50) One comment 

suggested that we make mandatory 

those parts of the Food Code related to 

the pooling of eggs in all institutions, 

including but not limited to those 

serving specifically at-risk populations 

in section 3–8 of the Food Code. The 

comment stated that many of the large 

outbreaks have been related to 

commercial or government institutions 

that misuse eggs, especially when they 

break and pool large numbers of eggs. 

The comment stated that even if the 

eggs are delivered SE-free, the hand 

breaking and pooling of eggs can result 

in a contaminated pool due to 

inadequate hand washing, unclean 

utensils, temperature abuse during the 

breaking process and crosscontamination from other raw foods. 

The comment also stated that the FDA 

Food Code should be modified to 

incorporate a requirement that 

pasteurized egg products be substituted 

for shell eggs if the eggs are to be 

pooled, as a model for States to follow. 

(Response) FDA has determined that 

the relevant egg safety provisions of the 

Food Code should not be mandatory, for 

the reasons discussed in the preceding 

response, including those provisions 

related to the pooling of eggs. 

The comment concerning 

modification of the FDA Food Code is 

beyond the scope of this rule. 

IV. Legal Authority 

As outlined in section II.B of this 

document, after considering comments 

received in response to the proposal, 

FDA made changes in the final rule, 

including the addition of some 

requirements. The proposed rule 

contained an explanation of its legal 

basis under authorities in sections 311, 

361, and 368 of the PHS Act (42 U.S.C. 

243, 264, and 271) and sections 

402(a)(4) and 701(a) of the FFDCA (21 

U.S.C. 342(a)(4) and 371(a)). The PHS 

Act authorizes the Secretary to make 

and enforce such regulations as ‘‘are 

necessary to prevent the introduction, 

transmission, or spread of 

communicable diseases from foreign 

countries into the States * * * or from 

one State * * * into any other State’’ 

(section 361(a) of the PHS Act). This 

authority has been delegated to the 

Commissioner of Food and Drugs. 

Under section 402(a)(4) of the FFDCA, 

a food is adulterated if it is prepared, 

packed, or held under insanitary 

conditions whereby it may have been 

contaminated with filth or rendered 

injurious to health. Under section 701(a) 

of the FFDCA, FDA is authorized to 

issue regulations for the efficient 

enforcement of the FFDCA. These 

authorities, as well as others specified 

in the following paragraphs, support the 

new requirements in the final rule. 

Section 118.4(e) requires that persons 

who transport or hold shell eggs for 

shell egg processing or egg products 

facilities must comply with refrigeration 

requirements. It is well documented that 

shell eggs may contain Salmonella, 

including transovarian transmitted SE, 

which can result in serious, lifethreatening illness. Temperature abuse 

of shell eggs, such as by failing to 

refrigerate eggs as required by the rule, 

can lead to the multiplication of SE in 

shell eggs, and thus, increase the 

likelihood of illness if the eggs are not 

thoroughly cooked. The refrigeration 

requirement in § 118.4(e) prohibits food 

from being held under insanitary 

conditions and allows for the efficient 

enforcement of the FFDCA (21 U.S.C. 

342(a)(4) and 371(a)). Further, this 

requirement is necessary to prevent the 

spread of communicable disease from 

one state into another state. (42 U.S.C. 

264). 

Section 118.10 requires that egg 

producers have written SE prevention 

plans and maintain records 

documenting compliance, as well as 

records of review and modification to 

the plan and any corrective actions 

taken. Through records maintenance 

and review, an egg producer can, over 

time, develop a comprehensive picture 

of its prevention measures and identify 

shortcomings or potential shortcomings. 

A written plan and records 

documenting implementation of that 

plan are necessary for producers to 

ensure that they have effectively and 

consistently implemented the plan. For 

example, without records documenting 

environmental sampling procedures, a 

producer cannot ensure that the 

environment was sampled using a plan 

appropriate to the poultry house layout. 

Similarly, records maintenance and 

access provide FDA with the 

opportunity to oversee, in a 

comprehensive way, the 

implementation of the producer’s SE 

prevention plan, thereby preventing SE 

contamination of eggs. SE prevention 

measures may be quite different among 

farms, given different facility design and 

size, and yet be equally effective in 

preventing SE contamination. 

Knowledge of the specific prevention 

measures taken on a farm, as specified 

in an SE prevention plan, will assist 

FDA to assess compliance with the 

prevention measures. In addition, 

reviewing records is the best mechanism 

for FDA to use to determine whether 

preventive measures have been 

implemented over a period of time. 

Because the preventive measures are 

essential to the production of safe eggs 

as a matter of design, the statutory 

scheme is benefited by agency access to 

records that demonstrate that these 

measures are being systematically 

applied. 

By requiring records, we will be able 

to ensure that producers follow the SE 

prevention measures so that eggs are 

prepared, packed and held under 

sanitary conditions (21 U.S.C. 342(a)(4) 

and 371(a)) and in a manner designed to 

prevent the spread of communicable 

disease via SE-contaminated eggs (42 

U.S.C. 264). 

Section 118.11 requires registration by 

egg producers who must comply with 

either all of the SE prevention measures 

or only with the refrigeration 

requirements. It is essential that we 

know, via registration, certain 

information about egg producers, such 

as whether a producer has 3,000 or more 

laying hens at a particular farm, so that 

we can identify and inspect those farms 

subject to the rule. Inspection is 

necessary to ensure that shell eggs are 

being produced in compliance with SE 

prevention measures, thereby reducing 

the likelihood of foodborne illness. 

Therefore, the registration requirement 

is necessary to prevent the spread of 

communicable disease from one state 

into another state. (42 U.S.C. 264). 

Section 118.6(f) requires that for 

diverted eggs, the pallet, case, or other 

shipping container must be labeled and 

all documents accompanying the 

shipment must contain the specified 

statement to indicate that the eggs must 

be treated to destroy SE. This 

requirement is supported by sections 

201(n), 403(a)(1), and 701(a) of the 

FFDCA (21 U.S.C. 321(n), 343(a)(1), and 

371(a)) and sections 311, 361, and 361 

of the PHS Act. Under section 403(a)(1) 

of the FFDCA, a food is misbranded if 

its labeling is false or misleading in any 

particular. Section 201(n) of the FFDCA 

provides that in determining whether 

labeling is misleading, the agency shall 

take into account not only 

representations made about the product, 

but also the extent to which the labeling 

fails to reveal facts that are material in 

light of such representations made or 

suggested in the labeling or material 

with respect to consequences that may 

result from use of the product under 

conditions of use prescribed in the 

labeling or under customary or usual 

conditions of use. FDA previously has 

relied on these authorities when it 

required label statements on shell eggs 

not processed to destroy all viable 

Salmonella (65 FR 76092, December 5, 

2000). 

The rule requires eggs to be diverted 

in certain circumstances, including after 

a positive egg test, to ensure that SE will 

mstockstill on DSKH9S0YB1PROD with RULES2

33050 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

2For example, although many consumers may be 

generally aware of the association between shell 

eggs and SE, they may not know that a few common 

methods of preparing eggs for consumption will not 

eliminate SE in a contaminated egg. 

be destroyed before the eggs are 

consumed. Without treatment, these 

eggs would present the greatest risk of 

causing SE illnesses. As discussed in 

section V of this document, the eggs that 

must be diverted to a treatment are 

worth less than eggs that may be used 

for the table egg market. This creates an 

economic incentive to send the eggs to 

the table egg market. Further, without 

labeling, a purchaser might not know 

that particular eggs are subject to the 

diversion requirement. Therefore, the 

agency concludes that information that 

the eggs must be treated to destroy SE 

is material information that must be 

provided on the shipping container and 

accompanying documentation and that 

the requirement is necessary to prevent 

the spread of communicable disease 

from one state into another state. (42 

U.S.C. 264). 

As explained in the proposal, 

activities that are intrastate in character, 

such as the production and final sale of 

shell eggs to an institution for ultimate 

consumption by a consumer within one 

State, are subject to regulation under 

section 361 of the PHS Act (State of 

Louisiana v. Mathews, 427 F. Supp. 174, 

176 (E.D.La. 1977)). The proposed rule 

explained FDA’s reasoning for 

tentatively determining that the SE 

prevention measures in this rule must 

apply to producers of shell eggs who 

sell their eggs intrastate, other than 

directly to consumers. For the reasons 

discussed therein, we are making that 

determination final. 

V. Analysis of Economic Impacts— 

Final Regulatory Impact Analysis 

A. Introduction 

FDA has examined the impacts of the 

final rule under Executive Order 12866, 

the Regulatory Flexibility Act (5 U.S.C. 

601–612), and the Unfunded Mandates 

Reform Act of 1995 (Pub. L. 104–4). 

Executive Order 12866 directs agencies 

to assess all costs and benefits of 

available regulatory alternatives and, 

when regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety, and other advantages; 

distributive impacts; and equity). The 

agency believes that this final rule is an 

‘‘economically significant’’ regulatory 

action as defined by Section 3(f)(1) of 

the Executive Order. 

The Regulatory Flexibility Act 

requires agencies to analyze regulatory 

options that would minimize any 

significant impact of a rule on small 

entities. Using the Small Business 

Administration (SBA) definitions of 

small for chicken and egg producers, 

FDA estimates that more than 99 

percent of all egg farms are small. 

Though more than 45,000 farms with 

less than 3,000 layers are exempt from 

all provisions of the rule, the agency 

certifies that the rule will have a 

significant economic impact on a 

substantial number of small entities. 

This is discussed further in section VI 

of this document. 

Section 202(a) of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies prepare a written 

statement, which includes an 

assessment of anticipated costs and 

benefits, before finalizing ‘‘any rule that 

includes any Federal mandate that may 

result in the expenditure by State, local, 

and tribal governments, in the aggregate, 

or by the private sector, of $100,000,000 

or more (adjusted annually for inflation) 

in any one year.’’ The current threshold 

after adjustment for inflation is $130 

million, using the most current (2007) 

Implicit Price Deflator for the Gross 

Domestic Product. FDA expects this 

final rule to result in 1-year 

expenditures that would meet or exceed 

this amount. This is discussed further in 

section VII of this document. 

B. Need for Regulation 

Private markets operating within the 

framework of the legal system promote 

the health and safety of consumers. 

Limitations of both the marketplace and 

the legal system, however, can result in 

inadequate control of some health and 

safety hazards, and reduce societal 

welfare. 

In a perfectly competitive market in 

which consumers and producers both 

have sufficient information, the optimal 

level of production of eggs will be 

provided at an optimal level of safety. 

In the egg market, however, consumers 

and producers do not have sufficient 

information on the SE status of 

particular eggs. In the case of SEcontaminated eggs, although farmers 

and producers do have an incentive to 

put safety programs into place, the lack 

of awareness and information about the 

risk suggests that an inefficiently high 

demand exists for eggs that are 

produced without using adequate 

measures to prevent SE.2 Because the 

demand for specific eggs is not 

sufficiently affected by safety 

considerations, the farmer’s incentive to 

invest in safety measures is diminished. 

Consequently, the market does not 

provide the incentives necessary for 

optimal egg safety. 

With sufficient information for 

consumers and producers, a legal 

system that awards compensation for 

harm done due to SE-contaminated eggs 

has the potential to remedy market 

imperfections by providing producers 

with incentives to provide the level of 

safety that is best for society. The legal 

system does not ensure the optimum 

level of shell egg safety because 

consumers who become ill due to SE 

contamination often do not know the 

reason for, or source of, their illness. 

Even in cases where consumers are 

aware that their illness was contracted 

from eggs, imperfect information makes 

it difficult to determine who is 

ultimately responsible for their illness, 

since the particular source of the SE 

contamination of the eggs is not known 

in many circumstances. 

In sum, the imperfect information 

about the risk associated with SE from 

particular shell eggs means that neither 

the legal system nor the marketplace 

may be able to provide adequate 

economic incentives for the production 

of eggs sufficiently free of SE 

contamination. The Government may 

therefore be able to improve social 

welfare through targeted regulation. In 

what follows, we will look at the costs 

and benefits of the provisions in the rule 

and comments addressing the benefits 

and costs of options presented in the 

proposed rule. We will also look at the 

costs and benefits of other measures to 

control SE that we considered, but did 

not include in this final rule. 

C. Comments on the Preliminary 

Regulatory Impact Analysis in the 

Proposed Rule and Responses 

(Comment 51) One comment agreed 

that FDA should exempt small 

producers generally from the final rule, 

but suggested that the proposed testing 

and diversion requirements should 

apply to all egg producers, regardless of 

size. The comment argued that testing of 

the environment and shell eggs provides 

verification that on-farm sanitation 

programs are effective in controlling SE 

and allows for preventive measures 

including diversion if a positive test 

occurs, which could prevent illnesses 

and outbreaks. The comment suggested 

that imposing testing and diversion 

requirements on small producers would 

limit the burden on these small 

businesses without reducing the public 

health benefit from the final regulation. 

(Response) Some benefits would be 

derived by requiring farms with less 

than 3,000 layers to divert potentially 

positive eggs upon both a positive 

environmental and a positive egg test. 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33051 

However, the cost per case averted on 

farms with less than 3,000 layers, 

producing less than 1 percent of the 

shell eggs on the market (accounting for 

300 to 1,000 SE-related illnesses per 

year and less than 1 death per year), is 

approximately $205,000 per case 

averted, which would not be a costeffective public health intervention on 

over 45,000 very small egg farms. 

(Comment 52) One comment noted 

that, over the last several years, 

numerous shell egg production facilities 

in the United States were built to 

produce eggs only for processing into 

egg products; these facilities may divert 

eggs for sale as table eggs when market 

conditions or seasonal production 

patterns warrant. The comment stated 

that this diversion is done when 

demand for egg products is weak and 

the producer can avoid or minimize 

potential economic loss by moving 

temporary surpluses to the table egg 

market. The comment stated that, 

although under the proposed rule 

producers whose entire production will 

be processed into egg products need 

comply only with the refrigeration 

requirements for on-farm storage, these 

producers who may divert their eggs to 

the table egg market must comply with 

all of the egg production requirements 

when any part of their production is not 

processed into egg products or does not 

receive a treatment that achieves at least 

a 5-log destruction of SE. The comment 

stated that, while many firms that 

produce shell eggs for use primarily in 

the manufacture of egg products now 

have extensive on-farm programs to 

ensure the safety of eggs and egg 

products, some of these producers will 

need to impose additional food safety 

measures at the production site in order 

to be able to continue to occasionally 

divert eggs to the table egg market. The 

comment questions whether the agency 

considered these expenditures in 

determining total costs of the proposed 

rule on the egg industry. 

(Response) Those farms that produce 

only a portion of their eggs for sale on 

the table egg market have been covered 

within the scope of this rule and their 

costs are included in the costs and the 

benefits analysis of the final rule. 

(Comment 53) One comment states 

that the requirement that eggs be 

refrigerated at a temperature of no 

greater than 45 °F within 36 hours of 

laying is not realistic. The comment 

recommended instead that the rule 

require that eggs held at the farm be 

refrigerated at a temperature no greater 

than 55 degrees, provided the eggs are 

not to be stored on the farm for more 

than 4 days. The comment states that 

eggs are generally held in on-farm 

coolers for a relatively short period of 

time; that there is evidence that any low 

level of SE within a naturally infected 

egg will not undergo significant 

multiplication until the albumen begins 

to degrade; and that, even at room 

temperature, significant growth may 

take several weeks. The comment stated 

that the cost involved in remodeling and 

operating on-farm coolers to maintain a 

45-degree ambient temperature, rather 

than a 55-degree ambient temperature, 

would not show a reasonable cost/ 

benefit ratio. 

(Response) Not all farms will need to 

remodel their on farm coolers to 

maintain a 45-degree ambient 

temperature. However, many will, and 

the costs associated with that 

remodeling are significant. In the 

analysis detailed in section V.F of this 

document, FDA estimates annualized 

costs for farms that build cooling 

facilities from scratch, remodel existing 

cooling facilities, use extra power to 

reduce temperature, use refrigerated 

shipping, and use refrigerated 

preproduction storage, to be $20.1 

million using a 7 percent discount rate 

and $16.4 million using a 3 percent 

discount rate. Using the 2005 FSIS risk 

assessment (Ref. 22), FDA estimated that 

the refrigeration at 45 degrees within 36 

hours of lay through the preproduction 

stage, in the absence of the other 

provisions in the final rule, would 

reduce the number of annual SE related 

illnesses by nearly 45,000. With all 

provisions in the final rule fully 

implemented, refrigeration would 

reduce the number of SE related 

illnesses by nearly 29,000. Including all 

costs of egg-related SE illnesses (i.e., 

both mild cases and the less frequent 

though more severe ones including 

hospitalization, chronic arthritis, or 

even death), FDA estimated the average 

cost of an SE illness to be $17,900. This 

provision, when implemented with the 

rest of the final rule, is estimated to 

provide nearly $520 million in benefits 

annually and nearly $500 million in 

annual net benefits. 

(Comment 54) One comment stated 

that, for environmental testing, 

consideration should be given to the 

sampling of a given proportion of 

available sites as opposed to a given 

number of samples regardless of the size 

of the flock or the number of houses. 

The comment stated that a farm may 

have a single age group in more than 

one house. 

(Response) This comment reflects a 

misunderstanding of the proposal. 

Sampling is performed on a per house 

basis. Section 118.7(a) requires that an 

environmental test must be done for 

each poultry house in accordance with 

§ 118.5(a) and (b). Within each poultry 

house, you must sample the 

environment using a sampling plan 

appropriate to the poultry house layout. 

We agree that sites/houses are the 

appropriate sampling location. Costs 

and benefits of environmental sampling 

are calculated on a per house basis. 

(Comment 55) Several comments 

stated that breaker eggs will sell for a 

lower price than table eggs, that 

diversion costs will vary by region, and 

that breaker eggs from SE-positive flocks 

will sell for even less than normal 

breaker eggs. One comment stated that 

the cost estimated for normal breaker 

eggs is underestimated in the analysis of 

the proposed rule. Data were provided 

to support the comment. One comment 

stated that processors are likely to refuse 

eggs from SE-positive flocks. 

(Response) We agree with the 

comments and recognize differences 

exist regionally in the price received for 

eggs, in the price of breaker eggs, and in 

the price of eggs from SE-positive flocks. 

All of these costs, including regional 

differences in diversion costs, and the 

adverse effects of bad publicity, are 

discussed in the analysis. The 

additional data the comment provides 

are considered in the final rule. The 

expected cost of a diverted egg has 

increased in the new analysis to $0.23 

per dozen eggs (drawn from a uniform 

range of $0.13 to $0.33 per dozen eggs) 

from the proposed rule’s estimate of 

$0.17 per dozen (drawn from a uniform 

range of $0.13 to $0.21 per dozen). The 

analysis and new results are detailed in 

table 22 and section V.F of this 

document. 

FDA does not agree with the comment 

that processors will refuse eggs from 

positive flocks. FDA is aware of at least 

one processor that will purchase eggs 

from SE-positive flocks, and FDA 

believes others will as well because the 

pasteurization process for breaker eggs 

is designed to achieve at least a 5-log 

reduction in any SE that may be in eggs. 

However, because of the restrictions 

placed on eggs from SE-positive flocks, 

these eggs are intrinsically less valuable 

than normal shell eggs. This decrease in 

value, and cost burden likely to be 

transferred from egg processor to 

producer through a discount on eggs 

purchased from SE-positive flocks, is 

considered a cost of this rulemaking and 

is accounted for in the analysis and 

detailed in section V.F of this 

document. 

(Comment 56) One comment stated 

that, to replace diverted eggs for a farm’s 

existing markets, other eggs would need 

to be purchased, probably at an inflated 

price. 

mstockstill on DSKH9S0YB1PROD with RULES2

33052 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

3An example of substitute components would be 

rodent poisons and traps. By themselves rodent 

poisons and traps may reduce the problem of SE 

contamination by X percent and Y percent, 

respectively. However, when used together the 

effect on SE contamination will be somewhat less 

than X percent + Y percent (though still higher than 

each component alone). When prevention measures 

are complements, the total prevention from using 

the two measures that reduce risk by A percent and 

B percent separately is greater than A percent + B 

percent. 

4All data for the calculations in this paragraph 

and the following paragraph are from Meade (Ref. 

6) and CDC (Refs. 8, 11, 15, and 56). 

(Response) Although FDA recognizes 

this effect is possible in the rulemaking, 

it is a within-industry transfer of burden 

and is not counted as a cost in the 

analysis (the costs net out between 

producers). 

(Comment 57) One comment 

questioned the presumed number of 

houses on the ‘‘larger than 3,000 hens’’ 

farms, although the comment 

recognized that the number was 

estimated using the National Animal 

Health Monitoring System (NAHMS) 

study. 

(Response) The number of houses was 

estimated using the best data available, 

which the comment correctly identified 

as the NAHMS study. 

(Comment 58) One comment stated 

that all cost calculations are broken 

down by house capacities. Results are 

applied to each size category with no 

acknowledgement that within each 

category, considerable variation still 

exists. 

(Response) FDA agrees. There will be 

considerable variation of costs within 

groups. Costs in most cases will be 

smaller than average for the smaller 

than average farms within a size 

category and larger than average for 

larger than average farms. For rodent 

and other pest control, within group 

variation from the mean estimation is 

due to uncertainty about the extent to 

which current farm practices are 

adequate to meet the rule’s requirements 

and costs of inputs, and due to variation 

in the number of houses. The variation 

is driven by the number of houses on a 

farm, so larger farms within a given size 

category will incur higher costs. The 

same is true for the biosecurity and 

cleaning and disinfecting provisions. 

Within group variation for the 

refrigeration provision is driven 

primarily by the variance in egg 

production and compliance. Farms that 

produce more eggs will require the 

construction of larger and more costly 

egg rooms than average. For testing and 

diversion, the within group variation is 

driven by the number of houses and egg 

production. Farms with more houses 

will have higher environmental testing 

costs, and farms with higher egg 

production per house will have a higher 

cost of diversion. 

(Comment 59) Several comments 

stated that the cost of testing eggs is 

underestimated in the proposed rule 

analysis. One comment noted that, 

although in the proposal FDA estimated 

lab costs at $30, the pilot project lab cost 

relied on in developing that estimate 

were for direct plating from the egg pool 

onto two plates, not for the testing 

proposed of one pre-enrichment 

followed by two enrichments followed 

by five plates for each enrichment broth 

and then inoculation onto two 

differential media. 

One comment stated that there would 

be start up costs for new labs entering 

the market due to increased demand for 

testing as a result of the rule. 

(Response) FDA agrees that the costs 

estimated in the proposed rule analysis 

refer to the costs of the testing regime 

outlined in the pilot project, a less 

intensive regime than the one required 

in the proposed and final rules. These 

cost estimates have been corrected in 

the analysis of the final rule. A detailed 

description of the analysis is located in 

section V.F of this document. 

We do not include start up costs for 

labs that enter the market or increase 

capacity due to increased testing 

demand as a result of the rule. The lab 

fees are set up by these firms to cover 

both the initial set up costs and the 

costs of each test. Counting these costs 

in addition to lab fees charged to egg 

producers would be double counting. 

D. Economic Analysis of Potential 

Mitigations: Overview 

We considered many possible SE 

prevention measures. Because of the 

large number of provisions considered 

(and the large number in the rule) we 

begin our analysis in this section with 

an overview of our methods of 

estimating the benefits and costs of the 

various measures to control SE in shell 

eggs. In section V.F of this document, 

we summarize the benefits and costs of 

the rule and regulatory options. In 

section V.G of this document, we 

present the detailed analysis of SE 

prevention measures we considered 

(including both those included and not 

included in the final rule). 

1. Measuring Benefits 

a. Modeling benefits. The primary 

benefit of the provisions in this rule 

(and the other possible measures) would 

be an expected decrease in the 

incidence of SE-related illnesses. The 

benefits will be calculated using the 

following model: 

Benefits = base line risk × % risk 

reduced (C1, C2, C3, * * *) × value 

of risk reduced 

Where: 

• Benefits = annual health benefits realized 

due to this rule. 

• Base line risk = the base line level of risk 

facing consumers today, expressed as the 

number of SE cases attributable to shell 

eggs consumption 

• Risk reduced (C1, C2, C3, * * *) = the % 

of risk reduced from the baseline due to 

changes in production (C1, C2, C3, 

* * *) 

• Value of risk reduced = the social cost of 

one representative case of salmonellosis. 

This cost includes medical costs, the 

value of lost production, and the loss of 

welfare the individual experiences due 

to pain and suffering and lost leisure 

time. 

We write the risk reduced component 

of the benefits equation in a general 

functional form rather than an additive 

form because combinations of the rule’s 

components (C1, C2, C3, * * *) will 

usually not result in linear, proportional 

reductions of risk. Instead, we assume 

that some components are partial 

substitutes for one another while others 

complement each other.3 The total risk 

reduction will not be the sum of the 

individual components; the 

effectiveness of the rule could be less 

than or greater than the sum of its parts. 

b. Base line risk from SE in eggs. We 

estimated the reduction in SE illnesses 

by applying the percentage prevention 

to the base line number of illnesses. We 

estimated the base line levels of egg 

contamination and the number of 

human illnesses that result from such 

contamination. 

The Centers for Disease Control and 

Prevention (CDC) passive surveillance 

system recorded 6,740 illnesses due to 

SE in 2006. Using the CDC multiplier 

(used to estimate total cases based on 

ratio of total to reported cases) derived 

by Voetsch, et al. (Ref. 5) of 38 (with a 

90 percent confidence interval of 23 to 

61), we estimated the number of 

illnesses due to SE to have been 256,120 

in 2006 (ranging between 155,020 and 

411,140).4 Because SE is not unique to 

eggs, not all of the 256,120 illnesses due 

to SE in 2006 can be attributed to 

domestic shell eggs. CDC estimates that 

16 percent of the cases reported were 

acquired outside of the United States. 

Consequently, the base line level of 

domestic SE cases is 215,140 (ranging 

between 130,220 and 345,360). Between 

1985 and 2002, a total of 53 percent of 

all SE illnesses identified through CDC 

outbreak surveillance are attributable to 

eggs. Where a vehicle of transmission 

was identified, 81 percent of outbreaks 

and 79 percent of illnesses identified 

through outbreaks were attributed to 

eggs (Ref. 17). The midpoint between 

the lower bound (53 percent) and upper 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33053 

5 In the proposed rule, we adjusted the estimated 

number of cases downward to account for the 

projected effects of the refrigeration and labeling 

rule. After that rule took effect in 2001, the 

estimated number of SE illnesses in the United 

States in 2002 decreased by nearly 9 percent. 

However, since then the rate has remained 

relatively steady, implying that at least the short 

term effects of the refrigeration and labeling rule 

have been realized. We therefore do not adjust for 

the effects of the refrigeration and labeling rule in 

this final rule. 

6We use recent data from CDC to estimate the 

relative prevalence of illnesses of different 

severities (Ref. 57). The expected duration of illness 

for each category of severity is taken from Zorn and 

Klontz (Ref. 4). 

bound (79 percent) estimates is 66 

percent, which we assume to be the 

mean percent of domestic SE illnesses 

attributable to eggs. Using these figures 

we calculate a lower bound estimate of 

69,020 (53 percent × 130,220) and an 

upper bound estimate of 218,260 (79 

percent × 345,360) cases due to SE in 

eggs. The CDC method generates a mean 

point estimate of 141,990 (66 percent × 

215,140) cases for 2006.5 Table 1 of this 

document illustrates how we arrived at 

our base line. 

TABLE 1—BASE LINE EGG-RELATED Salmonella Enteritidis (SE) CASES

Low estimate Mean High estimate 

2006 Passive Surveillance Cases ................................................................................... 6,740 

Multiplier ........................................................................................................................... 23 38 61 

Estimated SE Cases in 2006 .......................................................................................... 155,020 256,120 411,140 

Cases from Outside the United States ............................................................................ ¥16% 

130,220 215,140 345,360 

Percent of SE cases from eggs ...................................................................................... 53% 66% 79% 

Egg Related SE cases in 2006 ....................................................................................... 69,020 141,990 272,830 

c. Measuring the health benefits from 

preventing salmonellosis. 

i. The economic impact of illness from 

SE in eggs. In measuring the economic 

impact of illness due to the 

consumption of SE-contaminated eggs, 

it is important that we include all of the 

effects of SE on human health. These 

effects include both monetary and 

nonmonetary losses and are both acute 

and chronic in nature. 

ii. The consequences of SE illness. We 

outline the consequences of SE illnesses 

in table 2 of this document. Table 2 

includes the medical outcomes of SE 

illness, the duration of conditions 

acquired due to SE illness, and the 

probability of occurrence for each 

condition with a given level of severity.6

The acute illness that accompanies SE 

generally causes gastrointestinal 

symptoms, which might be mild. 

However, SE infections can be severe 

and result in death, especially for the 

elderly, immunocompromised, and 

children (Ref. 58). Finally, a small 

percentage of all SE infections result in 

chronic reactive arthritis (Ref. 4). 

TABLE 2—CONSEQUENCES OF SE INFECTION

Condition and severity Outcome Duration 

(days per year) Percent of cases 

Gastrointestinal Illness: 

Mild ................................................................... No physician visit ..................................................... 1 to 3 ................ 90 .7 

Moderate ........................................................... Physician visit .......................................................... 2 to 12 .............. 8 .1 

Severe ............................................................... Hospitalized .............................................................. 11 to 21 ............ 1 .2 

Arthritis: 

Short-term ......................................................... Waxing and waning, eventually resolved ................ 1 to 121 ............ 1 .3 

Long-term .......................................................... Chronic arthritis ........................................................ 365 ................... 2 .4 

Death ........................................................................ Death ........................................................................ ........................... 0 .04 

We classify the gastrointestinal illness 

caused by SE illness as mild, moderate, 

or severe. A mild case of SE is defined 

as a case that causes gastrointestinal 

symptoms, but is not severe enough to 

warrant visiting the doctor. An 

individual with a mild case of SE illness 

will be ill for 1 to 3 days. A moderate 

case of SE illness lasts for 2 to 12 days 

and is characterized as a case severe 

enough to necessitate a trip to the doctor 

or other health care professional. A 

severe case of SE illness results in 

hospitalization and typically lasts from 

11 to 21 days. 

We do not have direct estimates of the 

distribution of outcomes of SE illnesses 

separate from the outcomes of illnesses 

for all nontyphoidal Salmonella. In the 

absence of better information we assume 

that all Salmonella serovars will result 

in similar distributions of illness 

severity. We therefore use information 

that applies either to all 1,400,000 

estimated annual cases of salmonellosis 

or to the 1,340,000 estimated annual 

foodborne cases of salmonellosis. Using 

general results for all diarrheal illnesses, 

CDC has estimated that 113,000 of the 

1,400,000 Salmonella illnesses in 1997 

could have resulted in physician office 

visits, a rate of 8.1 percent (113,000 ÷ 

1,400,000) (Ref. 15). CDC also has 

estimated that foodborne Salmonella 

cases lead to about 15,600 

hospitalizations per year, which is about 

1.2 percent (15,600 ÷ 1,340,000) of 

annual foodborne cases (Ref. 6). Based 

on this we can calculate that the 

remaining 90.7 percent of 

gastrointestinal illness cases occur 

without a visit to the doctor; that is, 

they are mild. 

SE may also result in reactive 

arthritis. This illness can manifest itself 

either as a relatively short-term bout of 

joint pain or as a chronic condition. 

mstockstill on DSKH9S0YB1PROD with RULES2

33054 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

7CDC updated the estimate of the overall burden 

of salmonellosis in 2004. The rates of death for both 

salmonellosis and SE were estimated to be 0.03 

percent, a decrease of one one-hundredth of a 

percent from the 1999 estimate. The rate of death 

may vary slightly from year to year. A decrease in 

the rate of death from SE by 0.01 percent would 

decrease the baseline mean estimated number of 

deaths related to consumption of eggs containing SE 

from 44 to 32. Mean estimated annual benefits 

would decrease by roughly $35 million. 

8Although some QALY estimates include the 

value of medical expenditures, particularly QALY 

estimates derived from survey data, the QALY 

estimates used in this study do not. 

9The Cutler and Richardson approach has several 

advantages over the Kaplan, Anderson, and Ganiats 

approach. However, it is not clear that this 

approach is appropriate for valuing acute illnesses. 

Therefore the Kaplan, Anderson, and Ganiats 

approach is used for acute illnesses and the Cutler 

and Richardson approach is used for chronic 

conditions. See Scharff and Jessup for a discussion 

of the pros and cons of each approach (Ref. 60). 

Studies of outbreaks imply that shortterm reactive arthritis may last from 1 

day to a total of 121 days. Chronic 

reactive arthritis can last from the time 

of onset until death. Overall, we 

estimate that 1 to 10 percent of SE 

infections lead to some form of reactive 

arthritis. We expect two-thirds of these 

to be long-term and one-third to be 

short-term (Ref. 4). 

The most severe potential result of SE 

infection is death. CDC estimated in 

1999 that 553 deaths occur annually due 

to foodborne Salmonella (Ref. 6). The 

estimate suggests that about 0.04 

percent (553 ÷ 1,340,000) of foodborne 

cases of Salmonella result in death.7

iii. Quality adjusted life years 

(QALYs). The benefits from this 

regulation will be presented in both 

monetary and nonmonetary terms. In 

section V.G of this document, the 

benefits will be expressed in illnesses 

and deaths averted by each regulatory 

provision under consideration. In the 

summary of benefits due to the 

regulation, we present both a cost 

effectiveness framework (cost per illness 

averted and cost per QALY saved) and 

a monetary benefits estimation. 

One approach to estimating health 

benefits involves the use of QALYs. 

QALYs can be used to measure the loss 

of well-being that an individual suffers 

due to a disease or condition. QALYs do 

not include the value of health 

expenditures caused by the condition in 

question; we estimate health 

expenditures separately.8 QALYs range 

from 0 to 1 where 0 is equivalent to 

death and 1 is equivalent to perfect 

health for 1 year. 

A number of methods have been 

constructed to measure QALYs. One 

class of methods uses surveys to ask 

doctors and the general population to 

use a QALY scale to estimate how much 

someone else who is afflicted with a 

given symptom or condition will suffer. 

This direct survey approach has been 

used widely, partly because surveys of 

QALY values for a large variety of 

symptoms and functional limitations 

have been published (Ref. 4). An 

alternative method used by Cutler and 

Richardson uses regression analysis to 

estimate the effect of particular 

conditions on overall health status (Ref. 

59). In our analysis, we use both 

methods where appropriate.9

In table 3 of this document, we 

present estimates of the number of 

quality adjusted life days (QALDs) lost 

due to SE. Total QALDs lost are derived 

by dividing the estimated number of 

QALYs lost by 365. Then, to calculate 

the disutility per day, or 1 QALD, we 

multiply by the average duration of the 

illness. Like QALYs, QALDs range from 

0 to 1 where 0 is equivalent to death and 

1 is equivalent to perfect health for 1 

day. We report the loss in QALDs 

because most of the illnesses associated 

with SE last days rather than years. The 

QALD values listed for mild, moderate, 

and severe cases of SE infection were 

estimated by Zorn and Klontz using data 

from Kaplan, Anderson, and Ganiats 

(Ref. 4). This approach calculated that 

the acute effects of food poisoning 

(vomiting, diarrhea, and general 

gastrointestinal illness) lead to a loss of 

QALDs greater than 0.5 for each day of 

illness. Furthermore, these lost QALDs 

persist for 2 to 16 days. Thus, the total 

loss of QALDs from gastrointestinal 

illness is calculated to be 1 to 10. 

TABLE 3—LOST QUALITY ADJUSTED LIFE DAYS DUE TO SE 

Severity 

Disutility per day (QALDs lost) 

Total QALDs 

lost per illness Functional Symptom Total Average days 

Ill 

Illness: 

Mild ............................................................................... 0.44 0.08 0.053 2 1 

Moderate ....................................................................... 0.44 0.08 0.053 7 4 

Severe ........................................................................... 0.53 0.09 0.062 16 10 

Reactive Arthritis: 

Short-term ..................................................................... ........................ ........................ 0.22 25 5 

Long-term ...................................................................... ........................ ........................ 0.14 18,250 2,613 

For reactive arthritis, we used the 

regression approach of Cutler and 

Richardson (Ref. 59). The regression 

approach yields estimates of losses per 

day of 0.22 for short-term reactive 

arthritis and 0.14 for long-term reactive 

arthritis. We estimate that short-term 

reactive arthritis results in a loss of 5.4 

to 10.8 QALDs while long-term reactive 

arthritis results in a loss of 2,613 to 

5,223 QALDs. 

We do not present the estimated 

QALYs saved for each provision 

considered in this analysis. Instead, we 

present benefits by provision in an 

‘‘illnesses averted’’ metric for each 

option and provision. This practice 

allows us to calculate cost per illness 

averted by each provision. In the 

summary we present the result of 

alternate valuation methods that do and 

do not rely on QALY estimates. Because 

a large portion of the loss due to chronic 

reactive arthritis is due to pain and 

suffering not associated with direct 

medical expenditures, it is difficult to 

capture the full economic loss due to SE 

related reactive arthritis without using 

QALYs or some other measure of 

morbidity effects. Benefit estimates not 

relying on QALY estimates will 

necessarily be significantly lower than 

estimates with QALYs. The results of all 

methods of valuation are presented in 

section V.F of this document. 

iv. Valuation of SE illnesses. Table 4 

of this document illustrates how we 

calculate the dollar value of a typical 

case of SE. The first column of table 4 

lists the type of ailment. The second and 

third columns of table 4 are taken from 

tables 2 and 3 of this document. The 

health loss per case is calculated by 

multiplying the value of a QALD by the 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33055 

10As with the CDC data, we assume that the 

characteristics of SE-related illnesses are similar to 

those of Salmonella in general. 

11This is based on the fact that in 1992 there were 

$64.8 billion in costs due to arthritis, 24 percent of 

these costs were medical costs, and there were 40 

million arthritis sufferers. This yields $389 per 

arthritis sufferer in direct medical costs. Discounted 

at 7 percent, the present value of medical 

expenditures for 50 years with reactive arthritis is 

$5,370. 

actual number of QALDs lost, and then 

discounting where appropriate (only 

values of chronic cases of reactive 

arthritis are affected by the discount 

rate). The values in this column will 

vary depending upon the particular 

estimates of the value of a statistical life 

(VSL), the value of a QALY, and the 

discount rate. The fifth column of table 

4 shows the annual medical costs of 

each condition that is caused by SE 

infection (long term reactive arthritis is 

the only condition where the afflicted 

will incur medical costs for more than 

a single year). The sixth column of table 

4 shows the weighted dollar loss per 

outcome caused by SE. The probability 

that a case of SE infection results in a 

given outcome (column 2) is multiplied 

by the sum of the average health and 

medical costs per case. The weighted 

dollar values in column 6 are summed 

to calculate the total expected loss 

associated with a typical case of SE. We 

present the range of estimates of dollar 

losses per case in table 5 of this 

document. 

TABLE 4—VALUING OF A TYPICAL CASE OF SE1, 2

Type and severity 

Case 

breakdown 

(percent) 

Total QALDs 

lost per illness 

Health loss 

per case 

Medical costs 

per case 

Weighted 

dollar loss 

per case 

Illness: 

Mild ............................................................................. 90 .7 1.05 $864 $0 $780 

Moderate ..................................................................... 8 .1 3.68 3,025 92 250 

Severe ......................................................................... 1 .2 9.99 8,208 9,257 210 

Arthritis: 

Short-Term .................................................................. 1 .26 5.41 4,442 139 60 

Long-Term .................................................................. 2 .40 2,613.12 592,411 9,536 14,460 

Death .................................................................................. 0 .04 18,250.00 5,000,000 ........................ 2,140 

Total expected loss per case .............................. .......................... ........................ ........................ ........................ 17,900 

1The value of a typical case will actually vary widely depending on the values used for the VSL, QALY, and the discount rate. The figures presented here are based on VSL = $5 million, QALY = $300,000, and a discount rate of 7%. 2 ‘‘Health Loss per Case’’ and ‘‘Weighted Dollar Loss per Case’’ for ‘‘Death’’ are calculated using a VSL = $5 million. If we use the QALD calculation, assuming the average decedent loses 50 years of life, the Health Loss per Case is $4.14 million and the Weighted Dollar Loss per 

Case is $1,773. 

Cost of illness estimates usually 

include the medical costs associated 

with SE. For example, Buzby et al. 

produced a summary of medical and 

other costs for U.S. salmonellosis cases 

(Ref. 58).10 The figures they estimated 

include the lost productivity of workers 

due to salmonellosis. Because we 

account for lost productivity separately, 

we must net out these costs. 

For mild SE illnesses, we assume that 

most persons will not obtain medical 

services. The cost estimated for this 

category chiefly reflects lost 

productivity (Ref. 58). 

For medical costs for those who 

contract moderate illnesses, we use 

figures from Williams (Ref. 61) updated 

with medical cost indices. In 1996, the 

average total cost of treatment for a nonurgent medical problem, including 

physician’s fees and medication, was 

$62. We adjust these numbers to 

account for the increased cost of 

medical care since 1996. The consumer 

price index (CPI) for medical services 

rose from 228.2 in 1996 to 323.8 in 2005 

(Ref. 62). 

The data for the medical cost of a 

severe case of SE was obtained from the 

Health Cost and Utilization Project’s 

Nationwide Inpatient Sample (Ref. 63) 

and updated to 2005 constant dollars 

using the CPI. Medical costs due to 

reactive arthritis are based on Zorn and 

Klontz (Ref. 4). Zorn and Klontz 

estimated that short-term reactive 

arthritis medical costs were 

approximately $100 per case in 1998. 

We adjust these numbers to account for 

the increased cost of medical care since 

1998. We estimate that long-term 

reactive arthritis costs had a present 

value of $5,370 in 1992.11 We use the 

CPI for medical care in general to 

update this cost to current dollars. 

Between 1992 and 2005, the CPI for 

medical services rose from 190.1 to 

323.8. 

FDA uses a range to estimate the 

value of an additional year of life to 

reflect the uncertainty in the literature. 

As a low estimate, FDA uses $100,000 

per QALY. Cutler and Richardson (Ref. 

59) use a similar estimate, and Garber 

and Phelps (Ref. 64) conclude that 

estimates of the value of a life year are 

about twice the level of income, though 

they present a broad range to reflect 

uncertainty associated with risk 

aversion and discount rates. Updating 

Garber and Phelps’ estimates suggests 

that $100,000 per life year is a 

reasonable estimate, given that median 

family income in 2002 was about 

$51,000 (Ref. 65). Moreover, this 

estimate is close to the estimate used in 

FDA’s economic analysis of the 

regulations implementing the Nutrition 

Labeling and Education Act of 1990. To 

reflect other underlying literature, and 

following suggestions from other 

Federal agencies, we begin with an 

estimate of the VSL of $6.5 million. This 

estimate is consistent with the survey by 

Aldy and Viscusi (Ref. 66) on the 

premium for risk observed in labor 

markets. Annualizing this value over 35 

years at 3 percent and at 7 percent 

discount rates implies estimates of a 

value of an additional year of life of 

about $300,000 and $500,000. 

Therefore, calculations for estimated 

benefits will reflect three estimates of 

the value of a statistical life year 

(VSLY): $100,000, $300,000 and 

$500,000, for both of the methods of 

estimating gains in life years. Total 

benefits differ from mortality-related 

benefits by including the value of 

reduced morbidity and health care 

costs. Furthermore, FDA uses values of 

a statistical life of $5 million and $6.5 

million. This range of VSL estimates is 

consistent with a reasonable 

interpretation of studies of willingness 

to pay to reduce mortality risks (Refs. 66 

and 67). FDA uses the lower value to 

reflect the fact that many of the 

estimates of willingness to pay to reduce 

mortality risk from papers not surveyed 

by Aldy and Viscusi are relatively low. 

mstockstill on DSKH9S0YB1PROD with RULES2

33056 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

12The use of centrifuges would cause this to 

occur. 

13Most modern egg washing machines are spraywashers (63 FR 27502 at 27505, May 19, 1998). 

Migration of SE through the eggshell is more 

commonly associated with immersion washing (Ref. 

70). 

14Economies of scope occur when more than one 

activity can be more efficiently performed at the 

same time, rather than one at a time. 15Where economies of scope with regard to SE 

mitigation occur, we observe that the incremental 

cost of one provision decreases with the 

implementation of another provision. For example, 

if rodent control decreases the chance of SE 

detection through environmental testing, we would 

expect the amount (and the cost) of follow-up egg 

testing to decline. 16A detailed breakdown of the estimated impact 

of each provision were they required for farms with 

less than 3,000 birds can be found in section VII 

of this document. 

17The NASS Census of Agriculture uses farms 

with 3,200 birds as its cutoff point for 

categorization. FDA uses 3,000 birds as its cutoff 

point for small versus large farms, because this is 

the measure that is used in other egg and poultry 

regulations. To adjust the NASS data, FDA assumes 

that all flocks are uniformly distributed across the 

400 to 3,200 bird category. Using this assumption, 

7.1 percent (200 ÷ 2,800) of these farms fall in the 

over 3,000 bird category while the remaining 92.9 

percent fall in the small farm category. 18Based on assumptions that industry experts 

(Refs. 72, 73, and 74) validated as plausible, we 

have calculated that approximately 2,860 farms sell 

eggs via retail channels other than farmers markets, 

roadside stands, and neighborhood sales. Many of 

the remaining 91,400 very small farms sell their 

eggs to consumers indirectly at roadside stands or 

farmers markets (Ref. 71). In the absence of better 

information, we assume that half of those remaining 

91,400 very small farms sell eggs indirectly to 

consumers. 

In table 5 of this document the value 

of a typical case of SE under different 

assumptions is shown. 

TABLE 5—VALUE OF A TYPICAL CASE OF SALMONELLA ENTERITIDIS UNDER DIFFERENT ECONOMIC ASSUMPTIONS1, 2, 3

Discount rate = 3 percent Discount rate = 7 percent 

VSL = $5 million VSL = $6.5 million VSL = $5 million VSL = $6.5 million 

VSLY = $100 thousand ........................................... $11,900 .................................. $7,600 ..................................

VSLY = $300 thousand ........................................... 30,400 31,000 17,900 18,500 

VSLY = $500 thousand ........................................... .................................. 49,500 .................................. 28,800 

1VSL means value of a statistical life. 

2VSLY means value of a statistical life year. 

3Values are only reported for most likely combinations. A VSLY of $100,000 is not consistent with a VSL of $6.5 million, and likewise, a VSLY 

of $500,000 is not consistent with a VSL of $5 million. 

The expected value of a typical case 

of SE varies greatly depending on the 

estimates used. The lowest expected 

value for a case of SE, $7,600, occurs 

when we use a VSL of $5 million, QALY 

of $100,000, and a discount rate of 7 

percent. The highest expected value for 

a case of SE, $49,500, occurs when we 

use a VSL of $6.5 million, a QALY of 

$500,000, and a discount rate of 3 

percent. For purpose of this analysis, we 

have chosen to use $17,900 per case as 

a central estimate. This value 

corresponds to where the VSL is $5.0 

million, a QALY is valued at $300,000, 

and the discount rate is 7 percent. 

d. Other benefits. Pathogens other 

than SE have been associated with eggs. 

In particular, Campylobacter (Ref. 68) 

and non-SE Salmonella (Ref. 20) have 

been found on the shells of eggs. The 

presence of pathogens on the eggshell 

may be harmful to humans if one of two 

scenarios occurs. First, under certain 

conditions, pathogens may migrate 

through the shell of the egg to infect the 

egg’s contents (Ref. 69). Second, 

eggshell contamination could result in 

the contamination of egg contents if eggs 

are broken in such a way that the shell 

of the egg comes into contact with the 

contents of the egg (Ref. 69).12 Pathogen 

migration is unlikely given current 

USDA standards and industry 

practices.13 Regarding egg breaking, 

current USDA washing and sanitizing 

standards are designed to reduce 

pathogens on the exterior of the egg. 

Consequently, we do not expect benefits 

from the reduction of illnesses due to 

pathogens other than SE to be large. 

2. Measuring Costs 

We measure costs based on the best 

available information from government, 

industry, and academic sources. 

Furthermore, we assume that total costs 

are typically the sum of the costs of 

individual provisions. What this 

assumption means is that, unlike 

benefits, the cost of one provision is 

generally independent of the cost of 

other provisions. Where economies of 

scope 14 with respect to SE mitigation 

exist, we adjust the costs downward to 

account for the economies.15

3. Coverage of the Analysis 

Two major sectors are affected by this 

rule: Farms that produce eggs for the 

retail markets and farms that raise 

pullets that become layers. We estimate 

costs and benefits of changing practices 

in each of these sectors separately. 

We estimate costs and benefits of 

potential prevention measures for all 

farms that produce eggs for distribution 

in retail markets. Because the rule 

exempts very small farms (< 3,000 

layers) from all provisions, wherever the 

data permit, we calculate costs and 

benefits separately for both very small 

farms and for larger farms (≥ 3,000 

layers). The separation of costs and 

benefits by size of farm allows us to 

measure the regulatory relief provided 

by the exemption for very small farms.16

Farmers who sell all of their eggs 

directly to consumers are exempt from 

all provisions. Sales of eggs directly to 

consumers include sales of a farmer’s 

own eggs to neighbors, at farmers 

markets, and at roadside stands. 

Farmers that sell their eggs to another 

person for distribution or resale are not 

assumed to be exempt from the listed 

provisions. We do not anticipate any 

control measures for farms that sell all 

of their eggs directly to consumers, so 

we exclude them from the analysis. 

We estimate that approximately 3,300 

farm sites with roughly 7,400 poultry 

houses will be covered by some or all 

parts of the rule. These figures are 

calculated as follows: 

• We use the National Agricultural 

Statistics Service (NASS) 2002 Census 

of Agriculture to determine the number 

of farm sites with layers on hand. NASS 

estimated that there are 98,315 farms 

with layers over 20 weeks old in their 

inventory (Ref. 71). 

• Next, we adjust for the fact that a 

large portion of farms with fewer than 

3,000 layers either sell their eggs 

directly to consumers or do not sell 

their eggs at all. We estimate that, of the 

approximately 94,300 farms with fewer 

than 3,000 layers,17 over 48,600 of these 

farms sell their eggs, but not directly to 

consumers.18

• NASS data suggested that 83 

percent of layers are table egg layers 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33057 

19 Data from the Layers study are used throughout 

this document. We acquired the data either directly 

from the NAHMS Web site or through direct 

correspondence with Lindsey Garber, Centers for 

Epidemiology and Animal Health, Veterinary 

Services, APHIS, USDA. 

20Comments received on the number of pullet 

houses came primarily from large farm 

representatives. Farms with less than 3,000 layers 

are not covered by this provision, so the pullet 

houses from which they procure their layers will 

either not be covered (if they sell only to farms with 

less than 3,000 layers) or will be covered by virtue 

of selling to larger farms. Therefore, FDA uses the 

number of houses located on farms with 3,000 

layers or more to calculate the number of pullet 

houses affected by the provision. 

(Ref. 75). For those farms with more 

than 3,000 layers, we adjust the 

estimated number of farms affected by 

the NASS estimate. The resulting 

estimated number of farm sites is 

illustrated in the first column of table 6 

of this document. 

• The estimated number of houses 

per farm site is broken down by size 

category in table 6 of this document. We 

use data from the 1999 Table Egg Layer 

Management in the U.S. Survey (Refs. 

27 and 28) to estimate the number of 

houses per farm site for those farms 

with more than 3,000 layers.19 For those 

farms with fewer than 3,000 layers, we 

assume that there is only one house per 

farm site. 

• We calculate the total number of 

poultry houses that will be affected by 

this rule by multiplying the adjusted 

number of farm sites by the expected 

number of houses per farm site. 

As Table 6 of this document 

demonstrates, the majority of the houses 

are on farm sites with fewer than 3,000 

layers. 

TABLE 6—FARMS POTENTIALLY COVERED BY THE RULE

Farm size (number of layers) 

Adjusted 

number of 

farm sites 

Number of 

houses per 

site 

Total number 

of houses 

Total number 

of eggs 

produced 

(in millions) 

3,000 to 19,999 ................................................................................................ 1,746 1.4 2,445 5,607 

20,000 to 49,999 .............................................................................................. 925 1.4 1,295 6,886 

50,000 to 99,999 .............................................................................................. 248 2.4 595 4,662

100,000 or more .............................................................................................. 409 7.4 3,024 54,958 

Total potential coverage ........................................................................... 3,328 2.2 7,359 72,113 

We also estimate the costs and 

benefits of prevention measures on 

farms that raise pullets. Comments to 

the proposed rule stated that there are 

roughly one third as many pullets as 

there are layers at any given time. 

Further, there are roughly one third as 

many pullet houses as there are layer 

houses. FDA therefore estimates that 

2,453 pullet houses (7,359 layer 

houses/3) will be covered under this 

provision.20 Some of the pullet houses 

are located onsite at layer farms and 

others are located on pullet growing 

facilities. 

E. Summary of Costs and Benefits of 

Regulatory Options and the Rule 

In this section we summarize the 

costs and benefits of the rule and the 

regulatory options. In section V.F of this 

document, we provide a detailed 

analysis of the costs and benefits of all 

of the SE prevention measures we 

considered, both those in and those not 

in the final rule. 

We considered a number of regulatory 

options that may be used to prevent the 

problem of SE in eggs, including no new 

regulatory action, classification of SEpositive eggs as restricted or SEpositive, HACCP, the final rule, more 

extensive on-farm prevention measures, 

less extensive on-farm prevention 

measures, and the inclusion of 

mandatory food establishment 

prevention measures. 

1. No New Regulatory Action 

One possible alternative to the rule is 

to rely on current Federal, State, and 

industry efforts to control SE in shell 

eggs. These efforts include relying on an 

FDA final rule for labeling and 

refrigerating shell eggs, FDA educational 

programs, and the growth of 

membership in State and industry 

quality assurance programs. We believe 

these methods of control, while 

valuable, are unable to fully address the 

problem of SE contamination of shell 

eggs. 

FDA issued a related rule designed to 

help prevent the growth of SE in eggs by 

requiring refrigeration of shell eggs at 

retail and by requiring shell egg labeling 

(65 FR 76092, December 5, 2000). As 

part of that rule, we set refrigeration 

temperatures to reduce the potential 

growth of SE inside shell eggs at the 

retail level, and, to inform consumers, 

required safe handling instructions on 

all cases and cartons of shell eggs. 

Nevertheless, labeling and refrigeration 

standards do not prevent or limit the 

growth of SE while eggs are in 

production. 

FDA also is pursuing a program 

designed to inform consumers about 

microbial hazards in egg preparation. 

The nationally distributed ‘‘Fight BAC!’’ 

program targets children in schools and 

television audiences with a more 

general food safety message that likely 

results in better egg handling practices. 

This program, although useful, does not 

prevent the initial contamination of eggs 

with SE. 

Several of the large egg-producing 

States and industry groups have 

encouraged producers of eggs to follow 

on-farm practices aimed at preventing 

SE in their flocks. One of the first States 

to implement a structured quality 

assurance program was Pennsylvania. 

Though voluntary, the implementation 

of the PEQAP has been accompanied by 

a significant decrease in SE-related 

illnesses in those areas where eggs from 

Pennsylvania are marketed. Industry 

groups also have drawn up quality 

assurance plans as guidelines for their 

members to follow. The voluntary 

programs have achieved some success 

in reducing SE contamination in eggs, 

and the more comprehensive plans 

contain many preventive measures 

similar to those in this rule (Ref. 76). 

These voluntary programs have now 

been in operation for many years and 

are well-known throughout the 

industry. Although the State and 

industry programs are potentially 

effective, many producers choose not to 

participate. As data from CDC show, SE 

illnesses continue to be associated with 

shell eggs even in those areas where 

voluntary programs are in place (Ref. 

56). Option 1, relying on current 

Federal, State, and industry efforts to 

control SE in shell eggs, will be used as 

a baseline for the rest of the analysis. 

mstockstill on DSKH9S0YB1PROD with RULES2

33058 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

21The discount rate is used here to annualize the 

costs of refrigeration equipment, plan designs, and 

training. For simplicity, subsequent summary tables 

will only include figures reflecting the discount rate 

of 7 percent. Those interested in the total cost 

number reflecting a 3-percent discount rate should 

subtract roughly $5 million from the calculations 

performed with a 7-percent discount rate. The exact 

difference is shown in section F of this document. 

2. HACCP 

We could, in theory, require that a 

HACCP system be implemented on layer 

farms. Although the general sanitation 

and hazard control measures in the rule 

are similar to aspects of existing HACCP 

programs in other areas, the agency has 

decided not to mandate HACCP on layer 

farms. To be effective, a HACCP system 

must be based on a foundation of 

prerequisite programs that provide basic 

environmental and operating 

conditions. Thus, to be technically and 

scientifically feasible for egg 

production, a HACCP system would 

require adoption of basic measures such 

as those required in this final rule, as 

well as several additional measures. 

Even if FDA were to provide less detail 

as to its expectations for compliance in 

the regulation and to require a HACCP 

plan rather than an SE prevention plan, 

these measures would certainly be 

required for producers to effectively 

prevent SE contamination of eggs. 

Furthermore, we are not aware of any 

precedent for use of a HACCP approach 

on egg farms, either voluntarily 

developed by individual businesses or 

required by states, and we note that 

FDA did not receive any comment 

suggesting that it attempt to apply a 

HACCP approach to egg farms. 

FDA considers that the level of 

scientific and technical knowledge 

needed to identify the range of possible 

hazards reasonably likely to occur and 

the critical control points needed for 

eliminating those hazards from shell 

eggs may not always be readily available 

on layer farms. Moreover, we believe 

that the HACCP plans that most layer 

farms would develop, if required to do 

so, would contain many if not all of the 

measures in this rule. We believe the 

targeted SE-prevention measures 

required by this final rule are as 

effective as any conceivable HACCP 

system, and avoid imposing on each 

layer farm the burden of developing 

scientific and technical knowledge 

required to develop an individualized 

HACCP system. 

3. The Final Rule 

The rule includes the following 

requirements for farms with 3,000 or 

more layers that do not have all of their 

eggs treated or do not sell all of their 

eggs directly to consumers: Rodent and 

other pest control, biosecurity, cleaning 

and disinfecting, use of SE-monitored 

chicks and pullets, testing and 

diversion, refrigeration during holding 

and transport, registration, and records 

with respect to compliance with each 

provision. Farms where all eggs are 

treated need only comply with the 

refrigeration requirements. 

The benefits from the SE prevention 

measures in the rule would take time to 

be fully realized, but the costs would be 

more immediately incurred. Table 7 of 

this document shows the initial costs 

and benefits and the eventual costs and 

benefits following implementation of 

the rule.21 Following are the detailed 

calculations underlying table 7, in 

section V.F. of this document. 

TABLE 7—FINAL RULE ANNUAL COSTS AND BENEFITS

Total costs 

(in millions) 

Illnesses 

averted 

Cost per illness averted Total benefits 

(in millions) 

Initially (first four years):1

Discount Rate = 3% ................................................................................. $83 68,790 $1,200 $1,231 

Discount Rate = 7% ................................................................................. 88 68,790 1,300 1,231 

Eventually (after four years):1

Discount Rate = 3% ................................................................................. 76 79,170 1,000 1,417 

Discount Rate = 7% ................................................................................. 81 79,170 1,000 1,417 

1As explained in the detailed analysis in section V.F., some of the provisions, particularly rodent and pest control, will take up to 4 years to become fully effective. The effectiveness of the provisions affects the prevalence rate and thus affects both benefits and costs of each provision. 

Therefore, the costs and benefits are presented over two time frames: ‘‘initially’’ assuming an average effectiveness over the first 4 years, and 

‘‘eventually’’ assuming full effectiveness after 4 years. 

4. More Extensive On-Farm SE 

Prevention Measures 

FDA could issue a rule that is broader 

in scope and has more extensive 

provisions including: (1) Does not 

exempt farms with fewer than 3,000 

layers from any provisions and (2) 

includes more on-farm provisions than 

those in the rule. Additional on-farm 

provisions include requiring the use of 

SE-negative feed and vaccinating flocks 

against SE. 

Such extensive controls would lead to 

total eventual costs of $274.0 million 

per year and eventual expected number 

of illnesses averted of 80,777, per year. 

This approach increases costs by more 

than $175 million, while only 

increasing the number of illnesses 

averted by 556 cases (valued at a total 

of $10.0 million). These more extensive 

controls would result in a marginal costeffectiveness of more than $315,000 per 

additional illness averted and a decrease 

in net benefits of over $100 million. The 

main reason for the small increase in 

benefits relative to costs is that much of 

the increase in costs comes from adding 

farms with fewer than 3,000 layers. The 

large number of such farms (over 

45,000) means that requiring them to 

comply with all provisions of the rule 

would greatly increase costs. These 

farms, however, account for less than 1 

percent of egg production. Requiring 

them to comply with all of the SE 

prevention measures would have a 

small effect on the volume of shell eggs 

that could be contaminated with SE. In 

addition, including these very small 

farms likely would result in the 

cessation of egg production at a large 

number of these farms. For these 

reasons, FDA has decided not to pursue 

this option. 

5. Less Extensive On-Farm SE 

Prevention Measures 

We could also require fewer controls 

than are in the rule. Several provisions 

could be combined to provide a less 

extensive set of controls than in the 

rule. Many of the prevention measures 

could be put forth as stand-alone 

regulations. We have not presented each 

of these prevention measures as a 

separate option, but the reader can see 

the individual effects of the various onfarm prevention measures in table 28 of 

this document. As documented in table 

28, the various individual measures 

would, by themselves, generate lower 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33059 

22Only operations with 30,000 or more layers are 

included in the Layers study (Refs. 27 and 28). 

net benefits than the integrated program 

outlined in the rule. 

6. Include Mandatory Provisions 

Applicable to Food Service 

Establishment Serving Highly 

Susceptible Populations 

We could require certain safe egg 

handling and preparation practices for 

food establishments that serve highly 

susceptible populations as part of 

custodial care, health care, assisted 

living, or nutritional or socialization 

services. These provisions would affect 

nearly 40,000 such establishments. In 

place with the other provisions of the 

final rule, the provisions pertaining to 

food service establishments serving a 

highly susceptible population would 

prevent 1,052 illnesses annually at a 

cost of $16,700 per illness and $1.2 

million in annual net benefits (Ref. 77). 

As we discussed in section I.G., a 

majority of states and territories have 

adopted into their own retail food codes 

the relevant egg-associated provisions of 

the FDA Food Code. With most states 

adopting as mandatory the relevant 

sections of the FDA Food Code (or 

similar safety standards), FDA believes 

it would be an unnecessary exercise of 

authority to codify the FDA Food Code. 

We will continue education efforts at 

the retail and consumer levels. Further, 

we will continue to encourage states to 

adopt the relevant provisions of the 

FDA Food Code. 

F. Benefits and Costs of Potential SE 

Prevention Measures: Detailed Analysis 

In this section, we describe the SE 

prevention measures that we 

considered, including provisions that 

were not included as requirements or 

that were only required for certain 

producers in the rule. 

For the costs and benefits of the 

provisions of the rule, we examine a 

number of on-farm measures including 

the following: 

• Rodent and other pest control, 

• Biosecurity measures, 

• Cleaning and disinfecting of layer 

houses between flocks, 

• Refrigeration of eggs, 

• Layer house environmental testing, 

• Follow-up egg testing, 

• The diversion of SE-positive eggs, 

• The use of SE monitored chicks or 

pullets, and 

• Other provisions, including the use 

of SE negative feed, and vaccinating 

flocks against SE. 

For each of these on-farm measures 

we estimate the costs of the following 

administrative measures: Registration, 

training, plan design, and 

recordkeeping. 

1. On-Farm SE Prevention Measures 

a. Interdependence of on-farm 

measures. Rodent and other pest 

control, biosecurity, and cleaning and 

disinfecting all have a role in 

eliminating SE in the poultry house. 

Although the actions taken under each 

heading may be distinct, the effects of 

each action are related. For example, a 

biosecurity plan may include provisions 

to limit standing water and high grass in 

areas adjacent to the poultry house. 

Although categorized as biosecurity 

measures, these practices also help 

control both rodents and pests. 

Similarly, cleaning and disinfecting 

remove not only SE, but also rodents 

and pests. 

This interdependence means that the 

total efficacy of on-farm controls cannot 

be determined by adding the effects of 

each provision (as determined by 

studies that focus on each provision 

separately). The measurement difficulty 

arises for two reasons. First, when two 

practices substitute or complement one 

another, the efficacy of the first practice 

is affected by the introduction of a 

second. Throughout the analysis, results 

for benefits calculations are presented 

for each provision standing alone as 

well as in the presence of all other 

provisions. Therefore, a provision that 

occurs later in the production chain 

than a provision that has already 

reduced the prevalence of SE will have 

less of an impact on total illnesses 

averted than if that provision stood 

alone. The hierarchy of provisions (first 

in production chain to last) is as 

follows: 

(1) Chicks and pullets procurement. 

(2) Testing, cleaning, disinfection of 

chicks and pullets. 

(3) Rodent control, biosecurity, 

cleaning and disinfection in layer 

houses. 

(4) Testing and diversion in layers. 

(5) Refrigeration. 

Second, a simple comparison of farms 

that use one given practice with farms 

that do not use that practice is 

insufficient in measuring the 

effectiveness of that individual practice. 

The use of one good practice tends to be 

positively correlated with the use of 

other good practices, and therefore a 

simple comparison between farms will 

overstate the effectiveness of any one 

practice. For example, those houses that 

use the best rodent control practices are 

also likely to be using other SE controls 

as well, so a measure of rodent control 

effectiveness is likely to pick up the 

effects of good biosecurity, pest control, 

and cleaning and disinfecting practices. 

On the other hand, a simple farm to 

farm comparison of practices that are 

correlated with lower prevalence of SE 

may understate the effectiveness of the 

practice. For example, a group of farms 

may have practices in place because 

they are part of a voluntary SE 

prevention plan, which may have been 

put in place in areas because they had 

higher than average prevalence of SE. In 

this case the practices would appear to 

be correlated with higher than average 

prevalence. 

b. Organization of economic analysis 

of potential provisions. FDA has 

considered a number of on-farm, 

administrative, and institutional SE 

prevention measures. The provisions 

that we considered are examined below. 

We have included some, but not all, of 

these provisions in the rule. 

Marginal costs and benefits are 

calculated for farms with less than 3,000 

layers, although these farms are exempt 

from the final rule. These results are 

presented in section VI of this 

document, where relief for small 

businesses is discussed. 

The costs and benefits of the 

provisions of the final rule as written 

are summarized in table 34 in section 

V.G of this document. 

c. Control of rodents and other pests, 

biosecurity, and cleaning and 

disinfection.—i. Rodent and other pest 

control provisions. One requirement of 

this final rule is that each layer house 

be under a pest control program. Such 

a program could include the use of traps 

or poisons to reduce rodents and other 

pests. Each farm must have a written 

control plan for rodents and other pests, 

and pest control records must be kept to 

verify that the program is accomplishing 

its goals. 

ii. Current industry practices—rodent 

and other pest control. Most farms 

currently address rodent and pest 

control problems to some extent. 

However, if SE-positive eggs are 

required to be diverted, there will be a 

financial incentive to find ways to 

prevent SE in poultry houses. As a 

result, the effectiveness of rodent and 

pest control in eliminating SE in the 

poultry house will lead many farms to 

institute rodent and pest control 

programs that are more stringent than 

those currently in place in order to 

achieve a higher level of rodent and 

other pest control. 

Currently, 99.2 percent of all 

commercial farms with more than 

30,000 layers use some form of rodent 

control, but not all methods of rodent 

control are compatible with the goal of 

eliminating SE in poultry houses.22 In 

mstockstill on DSKH9S0YB1PROD with RULES2

33060 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

23Our primary source for on-farm practices 

related to SE prevention measures is the Layers 

study (Refs. 27 and 28). As the only major current 

survey of the industry, this study has provided us 

with data that has allowed us to characterize the 

industry. The study, however, does not fully 

represent the industry. A total of 526 farm sites 

responded to the first part of the survey and 252 

responded to the second part of the survey. 

Furthermore, only operations with more than 

30,000 layers were included in the survey. 

Consequently, we approximate the practices of 

smaller farms based on a limited amount of 

information. Nonetheless, the Layers study has 

added greatly to our understanding of the industry 

and its practices. 

24Beetles have also been shown to be a reservoir 

for SE (Refs. 80 and 81). Beetle populations can be 

controlled primarily by the removal of all visible 

manure upon a house cleaning, the costs and 

benefits of which are discussed later in this 

document. Other costs of control, as well as 

benefits, are assumed to be accounted for in the 

analysis of fly control. 

25All cost estimates in this section are from data 

supplied to the FDA through a contract with 

Research Triangle Institute. Derivations of estimates 

are described more fully in a memorandum to the 

particular, we believe that biological 

predators, such as cats, should not be 

used as a method of rodent control 

because cats can be vectors for SE 

contamination. 

Table 8 of this document illustrates, 

by farm size, the number of programs 

that would satisfy the rodent control 

provisions in the rule. Farms that do not 

use rodent controls as specified in this 

provision (e.g., many farms primarily 

use cats as a rodent control measure) are 

counted as having unacceptable rodent 

control programs. Based on data from 

the Layers study (Refs. 27 and 28), we 

estimate that the number of farms with 

unacceptable rodent control programs 

will range from 1.8 percent for farms 

with over 100,000 layers to 21.0 percent 

for farms with 20,000 to 49,999 layers.23

Furthermore, we believe that the 

potential costs of diversion of SEpositive eggs will encourage farmers 

currently using a level of rodent control 

that would satisfy the provision to 

increase their rodent control efforts. 

Without better information about the 

number of farms that would increase 

rodent control efforts, we assume the 

true number will lie between 0 percent 

and 100 percent of those currently using 

an acceptable level of rodent control. 

TABLE 8—RODENT CONTROL

Farm size (number of layers) 

Unacceptable 

rodent control 

(in %) 

Number of farms 

with unacceptable 

rodent control 

Number of farms 

increasing effort 

3,000 to 19,999 .......................................................................................................... 19 328 709 

20,000 to 49,999 ........................................................................................................ 21 194 365 

50,000 to 99,999 ........................................................................................................ 4 9 119

100,000 or more ........................................................................................................ 2 7 201 

All farms with 3,000 layers or more ................................................................... .............................. 539 1,394 

We assume that between 25 percent 

and 75 percent of very small farms 

(those with fewer than 3,000 layers) are 

using an acceptable level of rodent 

control. 

Pests, other than rodents, commonly 

found in poultry houses include flies, 

mites, beetles, and ants (Ref. 78). 

However, we chiefly are interested in 

the presence of flies and fly control 

because they have been implicated in 

the transmission of Salmonella (Ref. 

79).24

The survey used to develop the Layers 

study asked questions about on-farm fly 

control practices (Refs. 27 and 28). 

Using these data, we estimate that over 

90 percent of those farms with over 

3,000 layers use some form of fly 

control. Some of these methods, 

however, are not permitted by the final 

rule. In particular, the rule does not 

allow the use of biological predators, 

such as wild birds, for fly control 

because these predators may themselves 

be vectors for SE transmission (Ref. 79). 

TABLE 9—FLY CONTROL

Farm size (number of layers) 

Unacceptable 

fly control 

(in %) 

Number of farms 

with unacceptable 

fly control 

Number of farms 

increasing effort 

3,000 to 19,999 .......................................................................................................... 27 470 638 

20,000 to 49,999 ........................................................................................................ 18 162 382 

50,000 to 99,999 ........................................................................................................ 12 29 109 

100,000 or more ........................................................................................................ 22 89 160 

All farms ..................................................................................................................... .............................. 750 1,289 

All farms with 3,000 or more layers ................................................................... .............................. 750 1,289 

Table 9 of this document shows the 

number of farms with unacceptable (not 

sufficient to satisfy the rule) fly control 

programs. Farms that do use fly control 

or that use biological predators, such as 

birds, as their primary method of fly 

control, are not using acceptable 

methods. We estimate that a total of 750 

farms with 3,000 or more layers are 

using unacceptable methods of fly 

control. 

The actual number of farms that are 

using unacceptable methods of fly 

control is likely to be higher than the 

estimates in table 9 of this document 

would suggest. The fact that a particular 

method is used does not automatically 

guarantee that it is used at its optimal 

level. As with rodent control, even 

farmers in compliance with the 

provision would be likely to increase 

their use of fly controls. In order to 

estimate the costs, we assume that the 

number of farms using acceptable fly 

control methods but will increase their 

fly control efforts is uniformly 

distributed between 0 and 100 percent. 

Consequently, at the mean estimate of 

50 percent, an additional 1,289 farms 

will increase their fly control efforts. 

iii. Costs of rodent and other pest 

control.25 We estimate the cost of rodent 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33061 

record (Ref. 82). Where applicable, costs are 

changed to year 2005 constant dollars using the 

Gross Domestic Product (GDP) deflator. 

26Severity level is self-assessed by respondents to 

the survey. 

27To determine the percent of houses affected, 

the percent of farms with a given rodent problem 

was weighted using the number of houses in each 

size category. The number of birds affected was 

determined by weighting the percent of farms with 

a given rodent problem in each size category by the 

number of birds in each size category. 

and other pest control to farms in table 

10 of this document. We assume that a 

farm with an adequate control program 

for rodents and other pests will be using 

a combination of control measures. 

Included in the cost of rodent control 

are the costs of setting up and 

maintaining bait stations and of rodent 

indexing. The annual cost of rodent 

control ranges from $680 for the average 

farm with between 3,000 and 20,000 

layers to $5,860 for the typical farm 

with over 100,000 layers. The costs of 

limiting rodent access to feed and 

patching holes in the walls of poultry 

houses are not included in our 

estimates. 

Pest control measures include the cost 

of sprays, baits, fly monitoring, and 

manure pit fans. We expect the annual 

cost of pest control to range from $4,600 

for farms with between 3,000 and 

20,000 layers to $77,660 for farms with 

more than 100,000 layers. 

TABLE 10—COST OF RODENT AND OTHER PEST CONTROL

[In thousands] 

Farm size (number of layers) 

Rodent control Pest control 

Total Unacceptable 

controls 

Increased 

effort 

Unacceptable 

controls 

Increased 

effort 

3,000 to 19,999 .................................................................... $222 $240 $2,160 $1,467 $4,089 

20,000 to 49,999 .................................................................. 157 148 1,355 1,597 3,256 

50,000 to 99,999 .................................................................. 12 76 460 859 1,408 

100,000 or more .................................................................. 43 588 6,887 6,212 13,730 

All farms with 3,000 or more layers ..................................... 434 1,052 10,861 10,136 22,483 

The total cost of rodent and other pest 

control shown in table 10 of this 

document, is found by multiplying the 

cost per farm by the number of farms 

affected. Some farms are already using 

acceptable rodent and other pest control 

methods, but they will increase their 

rodent and other pest control efforts in 

order to reduce the subsequent expected 

costs of testing and diversion. We 

estimate that their cost of rodent and 

other pest control enhancements will be 

approximately half of the cost of farms 

with unacceptable controls. This 

provision results in costs of $22.5 

million for the effected farms. 

iv. Benefits of rodent control. Rodent 

control appears to be effective in 

controlling SE. As a critical vector, 

rodents may spread SE throughout a 

given poultry house and between 

houses. Rodents spread the disease 

through their droppings, which often 

are consumed by layers. In this section 

of the document, we merge field data 

with estimates of the current level of 

rodent infestation on farms to assess the 

benefits from increased rodent control. 

We used the Layers study (Refs. 27 

and 28) to determine the magnitude of 

the rodent problem on farms. The first 

four rows of table 11 of this document 

show the percentages of farms in four 

size categories with four severities of 

mouse or rat infestation.26 Table 11 

shows that larger farms are generally 

more likely to experience moderate or 

severe rodent problems. The greater 

prevalence in the larger houses means 

that, while only 17 percent of houses 

have moderate or severe rodent 

problems, 33 percent of all layers are 

currently in houses with moderate or 

severe problems.27

TABLE 11—SEVERITY OF RODENT PROBLEM

Severity in % Number of 

houses in 

Severe Moderate Slight None category 

Farm Size (Number of Layers): 

< 20,000 ................................................................ 0 14 .8 81.7 3 .5 48,145 

20,000 to 49,999 ................................................... 9 .1 13 .2 70.1 7 .6 1,295 

50,000 to 99,999 ................................................... 1 .2 28 .4 52.3 18 .1 595 

100,000 or more ................................................... 1 .5 32 .1 60.1 6 .3 3,024 

Percent of houses affected .......................................... 0 .5 16 .9 78.7 3 .8 

Percent of layers affected ............................................ 2 .9 31 .4 60.2 5 .5 

Risk ratio ...................................................................... 4 .2 3 .1 2.1 1 Total 

Percent of layers in houses with positive environments ........................................................................ 19 .2 14 .3 9.5 4 .6 11 

Maximum expected SE reduction from increased rodent control 1 ............................................................ 38 .1 34 25.8 0 27 .3 

1These values are calculated using the following equations: 

Severe: [( 19.2¥4.6) ÷ 2] ÷ 19.2 = 38.1%. 

Moderate: [( 14.3¥4.6) ÷ 2] ÷ 14.3 = 34.0% 

Slight: [( 9.5¥4.6) ÷ 2] ÷ 9.5 = 25.8%. 

None: [( 4.6¥4.6) ÷ 2] ÷ 4.6 = 0.0%. 

mstockstill on DSKH9S0YB1PROD with RULES2

33062 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

28A total of 84 flocks were examined in 

Pennsylvania (Ref. 83). 

29The third part of the Layers study (Ref. 29) 

provides estimates for the prevalence of SE on 200 

farm sites with different management practices. For 

many of the variables analyzed, however, the 

sample size was too small for statistically 

significant differences to be measured. 

30The standardized rodent index is calculated as 

(number of rodents trapped) × (7 ÷ number of days) 

× (12 ÷ number of functional traps). The index 

standardizes the number of rodents trapped to the 

equivalent of having 12 traps function for 7 days 

(Ref. 29). 

31See also Olsen (2000) (Ref. 85). 

32Use of biological predators is not seen as an 

effective pest control technique because the 

predators may themselves become a vector for SE 

transmission. 

33Nominal 1987 dollars are converted to 2005 

constant dollars by multiplying the amount as 

estimated in 1987 by the ratio of the GDP deflator 

in 2005 to the GDP deflator in 1987 ($2.18 × 

113.386/65.958). 

Henzler (Ref. 83) examined the link 

between rodents and SE, and found that 

environmental tests of manure in houses 

with large rodent populations were 4.2 

times more likely to be positive for SE 

than similar tests in houses with small 

rodent populations.28 We assume that 

the risk ratio for SE can be linearly 

extrapolated between 1 for those farms 

with no rodent problem and 4.2 for 

those farms with a severe rodent control 

problem. This extrapolation is presented 

in table 11 of this document along with 

the estimated level of rodent infestation 

for farms of different sizes. 

The third section of the Layers study 

(Ref. 29) 29 supports the Henzler study. 

The Layers study finds that farms with 

a rodent index of at least 20 mice have 

an SE prevalence rate of 10.1 percent, 

while farms with a rodent index of less 

than 20 mice have a prevalence of SE of 

only 2.0 percent.30 This difference is 

statistically significant. 

Using data from the Henzler study, we 

estimate the base level of environmental 

SE prevalence for houses without rodent 

problems to be 4.6 percent when the 

overall prevalence of SE-positive houses 

is 11 percent. We calculated the base as: 

Base = Overall ÷ [(preventionSEV × 

BirdsSEV) + (preventionMOD × 

BirdsMOD) + (preventionSLT × 

BirdsSLT) + (preventionNON × 

BirdsNON)]; 

Where: 

• ‘‘Base’’ is the base level of prevalence for 

a rodent free house, 

• ‘‘Overall’’ is the total prevalence for all 

houses, 

• ‘‘prevention’’ is the risk ratio for each level 

of rodent infestation, and 

• ‘‘Birds’’ is the percentage of layers in 

houses with a given rodent problem. 

The subscripts SEV, MOD, SLT, and 

NON refer to the cases of severe, 

moderate, slight, and no rodent 

problems, respectively. 

The percentage of layers in houses 

with environments positive for SE is 

found by multiplying the SE risk ratio 

times the base level of risk. Houses with 

severe rodent control problems are 4.2 

times more likely to be positive for SE 

than houses with no problems (19.2 

percent versus 4.6 percent). 

In the last row of table 11 of this 

document, we estimate the expected 

reduction in SE due to increased rodent 

control. If rodent control were wholly 

effective, we would assume that it 

would result in a drop in SE from 

current levels to 4.6 percent, the level 

associated with no rodent problem. For 

a severe rodent infestation, rodent 

control would therefore result in a 76.2 

percent decline in SE, but such a large 

decline is not likely for most farms. 

Severe rodent infestations are probably 

caused by more than just the failure to 

have a rodent control program. House 

design (open walls, dirt floors, and other 

features), unfavorable location (near 

other rodent-infested entities, climate, 

and so on), and lack of knowledge 

regarding proper rodent control 

techniques are additional factors likely 

to diminish the effectiveness of rodent 

control. Consequently, we assume that 

the effectiveness of rodent control for a 

particular farm will be uniformly 

distributed between no reduction and 

reduction to an SE risk of 4.6 percent. 

Overall, this leads to an estimated 

average 27.3 percent reduction in SE, as 

shown in table 11. 

Based on information from the egg 

industry, we believe that rodent control 

may take up to 4 years to be fully 

effective. During the 4-year transition 

period, we assume that the effectiveness 

of rodent control will average 13.7 

percent, half of the eventual 

effectiveness. 

We use the baseline number of SE 

cases due to eggs and the value of a 

typical case of salmonellosis to estimate 

the value of rodent and other pest 

control benefits. On the affected farms, 

rodent and other pest control results in 

expected annual benefits of 19,433 

illnesses averted initially to 38,954 

illnesses averted eventually. 

The narrow definition of rodent 

control is limited to direct methods of 

catching, killing, and blocking rodents 

from entering a poultry house. Measures 

such as pest control, biosecurity, and 

cleaning and disinfecting also affect 

rodent control. Cleaning and 

disinfecting a house, when done 

properly, removes rodents and their 

nests from an infested house. Similarly, 

biosecurity makes rodent penetration of 

a house more difficult. As a result, the 

benefits estimated for rodent control are 

partly due to the adoption of other 

measures that may be required. We 

therefore believe that the expected effect 

of rodent control by itself (assuming no 

other control measures) would be 

smaller than our estimates suggest. 

v. Benefits of other pest control. Pests 

other than rodents also have been 

shown to be vectors in the spread of SE. 

In particular, Davies and Wray showed 

that the ingestion of SE-contaminated 

maggots by a chicken protects 

Salmonella from the stomach acids of 

the chicken and aids in the 

establishment of SE in the chicken’s gut 

(Ref. 84).31 Beetles and wild birds have 

also been implicated in the transmission 

of SE (Ref. 79). Wild birds currently 

have access to layer feed troughs on 23.5 

percent, and flies have access to layer 

feed troughs on 91.3 percent, of farms 

(Refs. 27 and 28). 

Despite the high prevalence of pests 

other than rodents on farms, most farms 

attempt to limit their presence. For 

example, approximately 82 percent of 

farms currently use fly control methods 

other than the use of biological 

predators (Refs. 27 and 28).32

The third section of the Layers study 

(Ref. 29) illustrates the effect of other 

pest control. On those farms in which 

pests have access to feed storage sites, 

the prevalence of SE is estimated to be 

higher than on farms where pests do not 

have access to feed in storage. Because 

the practices and effects of other pest 

control are highly correlated with 

rodent control we do not estimate the 

benefits separately. 

vi. Other benefits of rodent and other 

pest control. The rodent control 

provisions are expected to decrease the 

rodent population in poultry houses. 

Because rodents consume large amounts 

of feed, this reduction will benefit 

producers by lowering their feed costs. 

The Cooperative Extension Service of 

Oklahoma State University estimated 

that each rat in a poultry house 

consumed $2.18 worth of feed annually 

(Ref. 86) in 1987. This amount is 

equivalent to $3.75 in the year 2005 

constant dollars.33 Because mice eat 5 to 

10 percent as much as rats (Ref. 78), the 

expected annual loss of feed for each 

mouse in a house is estimated to cost 

$0.19 to $0.38. 

We estimate that an infested house 

may have over 1,000 mice (Ref. 83). This 

infestation will cost a farmer 

approximately $285 for that house 

(1,000 × $.285). A house infested with 

rats may have as many as 700 rats (Ref. 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33063 

34All data in this section are from the Layers 

study (Refs. 27 and 28). 

87). In this case, the infestation costs the 

farmer $2,625 (700 × $3.75). 

TABLE 12—FEED SAVINGS FROM RODENT CONTROL

Problem Rodents in a 

house 

Feed savings 

per house % of houses 1 Houses in 

classifiction 2

Cost to 

houses in 

classification 

Mice: 

Severe ................................................................. 1,000 $285 2.4 105 $30,000 

Moderate ............................................................. 500 143 25.5 1,118 159,800 

Slight ................................................................... 250 71 62.4 2,735 194,200 

None ................................................................... 0 0 9.7 425 0 

Rats: 

Severe ................................................................. 700 2,625 1.6 70 184,100 

Moderate ............................................................. 350 1,313 6.9 302 397,100 

Slight ................................................................... 175 656 43.7 1,915 1,256,500 

None ................................................................... 0 0 47.8 2,095 0 

Total cost of rodents .......................................................................................................................................................................... 2,221,700 

Expected savings from control (assumes 50% reduction) ................................................................................................................ 1,110,850 

1The percentages are from the Layers study (Refs. 27 and 28). 

2Because rodent populations are estimated for large houses only (over 54,000 layers), we estimate the number of houses to be the number of 

large house equivalents. This implies that two 27,000-bird houses are counted as one house in this analysis. 

The total feed savings from rodent 

control are illustrated in table 12 of this 

document. If rodent control leads to just 

half of all rodents being eliminated, the 

savings in lost feed from rodent control 

are estimated to be more than $1.1 

million annually. 

vii. Biosecurity provisions. We have 

examined the effects of several 

biosecurity provisions. These include 

the following effects: (1) Limiting visitor 

access; (2) avoiding the movement of 

contaminated equipment between 

poultry houses; (3) ensuring that 

employees are hygienic; (4) keeping 

stray poultry, birds, and other animals 

from entering poultry houses; and (5) 

prohibiting employees from keeping 

birds at home. 

The first biosecurity measure we 

examine is the limitation of visitors’ 

access on poultry farms. Limiting a 

visitor’s access may include prohibiting 

a visitor from entering a house on one 

farm if that person has already entered 

a house on another farm. Also, visitors 

may be banned from entering poultry 

houses altogether. 

Contaminated equipment can also 

spread SE on a farm. One way to 

mitigate this problem is to ensure that 

equipment that is used in multiple 

houses (such as forklifts and manure 

removing equipment) is kept clean. 

The hygiene of persons moving 

between houses affects the likelihood of 

cross-contamination. To protect against 

cross-contamination, farms may require 

that employees and visitors use 

footbaths, change their clothing, or use 

protective clothing when on the farm. 

Farms also may choose to require that 

their employees work on only one farm 

site on a given day. Although it is 

impossible to predict what measures 

each farm will take to guarantee the 

hygiene of persons moving between 

houses, for the purposes of calculating 

the costs of this provision, discussed in 

detail in the following paragraphs, we 

assume that farms will use footbaths 

and have visitors wear protective 

clothing. 

Stray poultry, wild birds, cats, and 

other animals must also be prevented 

from entering the farm’s poultry houses. 

This may be done by keeping grass and 

weeds cut, minimizing the existence of 

standing pools of water near poultry 

houses, repairing holes on poultry 

houses, and keeping doors closed on 

poultry houses. 

Finally, biosecurity precludes 

employees of the farm from keeping any 

birds as domestic animals at home. 

viii. Current industry practices; 

biosecurity. Most farms already practice 

some form of biosecurity.34 Roughly 

68.1 percent of farms do not allow 

nonbusiness visitors and 22.1 percent 

do not allow business visitors into 

poultry houses. Of those that do allow 

visitors to enter, 65.6 percent have 

biosecurity rules for nonbusiness 

visitors and 69.5 percent have 

biosecurity rules for business visitors. 

Farms use different methods to keep 

employee, contract crew, and visitor 

hygiene at an acceptable level. The 

Layers study estimates that 24.5 to 24.6 

percent use footbaths, 3.9 to 4.8 percent 

require showers to be taken, and 17.6 to 

32.0 percent require persons to change 

clothes or wear coveralls. 

Many farms use biosecurity measures 

aimed at keeping stray poultry, birds, 

and other animals away from the 

poultry houses. While data on the 

number of farms that trim grass and 

discourage standing pools of water are 

not available, the Layers study did 

estimate that fencing is currently used at 

26.7 percent of farms. 

Finally, 75.7 percent of farms do not 

allow employees to keep their own 

layers at home. 

ix. Costs of biosecurity. It is difficult 

to quantify many of the costs of 

biosecurity. This is especially true 

because the biosecurity measures may 

be implemented in different ways, 

allowing each farm to adapt the 

measures to their operation, as 

appropriate. However, a few of the costs 

can be quantified. 

First, the cost of restricting visitors 

can be estimated as the cost of 

monitoring and providing protective 

clothing to visitors who are allowed on 

the farm. The cost of monitoring visitors 

includes the cost of posting signs asking 

visitors to check in, the cost of having 

visitors sign in, and the cost of 

accompanying visitors around the farm. 

One estimate of protective clothing 

found costs of $102.75 for a box of 25 

disposable coveralls and $112.97 for a 

box of 200 plastic shoe covers (Ref. 88). 

Because farms will choose to implement 

this part of biosecurity in different 

ways, it is impossible to determine what 

the actual cost will be. 

The cost of cleaning contaminated 

equipment is uncertain because we do 

not know how individual farmers will 

mstockstill on DSKH9S0YB1PROD with RULES2

33064 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

35This estimate is based on the following 

assumptions: (1) The plastic vessel costs $5 and is 

replaced annually; (2) bleach costs $1 a gallon; a 

gallon is used per footbath, and it is changed once 

a week; (3) there are two footbaths per house; (4) 

labor costs $9.56 an hour (Ref. 89) plus 50 percent 

to include overhead; and (5) changing the bleachwater mixture takes 10 minutes. The estimate in the 

text is calculated as 2 × [($5 × 1) + ($1 × 52) + 

($14.34 × 0.167 × 52)] = $360 per year. 

36A number of State extension services have 

written extensively about the importance of 

biosecurity (Refs. 79, 80, and 90). 

choose to do this. We assume that the 

amount of equipment that needs to be 

kept clean increases linearly with the 

number of houses on a farm. In 

particular, we assume that a farm with 

two houses requires 1 hour of cleaning 

per week, a farm with three houses 

requires 2 hours, and so on. Using data 

from the Layers study, we find that the 

average farm will devote 69 labor hours 

annually to cleaning equipment. At a 

labor rate of $9.56 per hour (Ref. 89), 

plus 50 percent to include overhead 

costs, the total expected labor cost of 

this provision is $990 per farm, or $3.3 

million for all affected farms. 

The cost of chlorine footbaths also can 

be estimated. We calculate the cost of a 

footbath as the sum of the cost of the 

plastic vessel, the cost of bleach, and the 

cost of the labor needed to fill footbaths. 

We estimate the total cost per house to 

be $360 per year.35 Because only 24.6 

percent of houses currently use 

footbaths, the total annual cost of 

footbaths is estimated to be (100 ¥ 24.6 

percent) × 7,359 houses × $360 per 

house = $2.0 million. 

Finally, the cost of preventing stray 

poultry, wild birds, cats and other 

animals from entering poultry houses 

already is accounted for under rodent 

and other pest control costs. The 

estimated cost for a complete rodent and 

other pest control program includes all 

biosecurity measures that contribute to 

rodent and other pest control. 

The total measured costs of 

biosecurity provisions are $5.3 million 

for affected farms. 

x. Benefits of biosecurity. The 

importance of biosecurity in the 

reduction of disease transmission is 

well established.36 For example, the 

Layers study (Ref. 29) estimates that 

farms allowing nonbusiness visitors 

onsite are five times more likely to test 

positive for SE than farms that ban such 

visitors. Farms allowing nonbusiness 

visitors have a prevalence of SE of 17.0 

percent while farms that do not only 

have an SE prevalence of 3.6 percent. 

We include the benefits from 

biosecurity with those of rodent control, 

because the practices and effects are 

highly correlated and cannot be 

estimated separately. 

xi. Cleaning and disinfecting 

provisions. Specific cleaning and 

disinfecting provisions include the 

removal of all visible manure, and a dry 

clean and disinfection of the house. 

xii. Current industry practices; 

cleaning and disinfecting. To a large 

extent the layer industry already 

performs adequate cleaning and 

disinfecting procedures. For larger 

houses, the Layers study (Refs. 27 and 

28) estimates that, every year or two, 

manure is removed from 100 percent of 

houses, 80.5 percent of houses are dry 

cleaned annually, 53.6 percent of 

houses are wet cleaned annually, and 

65.1 percent of houses are disinfected. 

The prevalence of these practices on 

affected farms is illustrated in table 13 

of this document. 

TABLE 13—CURRENT CLEANING AND DISINFECTING PRACTICES

Manure 

removal (%) Dry clean (%) Wet clean (%) Disinfect (%) 

Between each flock (cleaned annually) ........................................................... 96.6 79.4 30.6 44.5 

After two or more flocks (cleaned occasionally) .............................................. 3.4 1.1 23 20.6 

Never ............................................................................................................... 0 19.5 46.4 34.9 

xiii. Costs of cleaning and 

disinfecting. The cost of cleaning and 

disinfecting houses is illustrated in table 

14 of this document. For each 

component of cleaning and disinfecting, 

we estimate the annual cost as the 

number of houses that this provision 

will affect each year times the cost per 

house. We calculate the number of 

houses affected as the product of the 

percent of houses not using a practice 

(100 minus the percent using the 

practice in table 14 of this document), 

the probability of a positive flock, and 

the number of affected houses (7,359, 

calculated from data in table 6 of this 

document). 

TABLE 14—COST OF CLEANING AND DISINFECTING HOUSES ON AFFECTED FARMS

Houses using 

practice (%) 

Probability of a 

positive environmental test 

(%) 

Number of 

houses 

affected 

Cost per 

house 

Cost to 

industry 

Dry clean .............................................................................. 79.8 8.4 125 $1,200 $130,300 

Disinfect ............................................................................... 51.4 8.4 300 600 152,300 

Total cost ...................................................................... ........................ ........................ ........................ ........................ 282,600 

The percentages of houses engaged in 

the different cleaning and disinfecting 

practices (the first column of numbers 

in table 14 of this document) is based on 

the first two rows of table 13 of this 

document. In table 14 we calculate the 

percent as follows: 

CA + (CO × PC), where 

CA is the percent of farms that are cleaned 

and disinfected annually, (see table 13 of 

this document) 

CO is the percent of farms that are cleaned 

and disinfected occasionally, (see table 

13), and 

PC is the probability that a farm that is 

cleaned occasionally would have been 

cleaned in a year that it had a positive 

environmental test. We assume that PC 

is distributed uniformly between 0 and 

0.667, with a mean value of 0.333. 

The per-house cost for each 

component is taken from Morales and 

McDowell (Ref. 91) and is converted to 

year 2005 constant dollars using the 

GDP deflator. We assume that the true 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33065 

37Current industry practices and the costs of egg 

transportation are based on information gained from 

telephone conversations between FDA, an egg 

processor, and a shipper. 38See table 16 of this document. 

cost of each component is distributed 

uniformly between the low and the high 

estimates given. 

xiv. Benefits of Cleaning and 

Disinfecting. Cleaning and disinfecting 

is another tool that may decrease or 

eliminate SE in an infected house. 

Schlosser et al. estimate that cleaning 

and disinfecting a house reduces by 50 

percent the probability that a previously 

infected house will test positive (Ref. 

92). Because they do not address crosscontamination, the 50 percent reduction 

is likely to be an overestimate of the 

actual efficacy of cleaning and 

disinfecting. Furthermore, the same 

study estimates that 28 percent of 

negative houses tested positive after 

cleaning and disinfecting. 

The Layers study (Ref. 29) finds that 

farms that are cleaned and disinfected 

are less likely to be contaminated with 

SE. No surveyed farms that performed 

washes of houses between flocks were 

found to be positive. By contrast, houses 

that neither wash nor fumigate between 

flocks had SE prevalence rates of 12.2 

percent. These results suggest that 

cleaning and disinfecting a layer house 

is negatively correlated with SE 

prevalence. However, because the 

practices and effects of cleaning and 

disinfecting are highly correlated with 

rodent control we do not estimate the 

benefits separately. 

xv. Total and net benefits of rodent 

and other pest control programs, 

biosecurity, and cleaning and 

disinfecting. The total annual cost for all 

three provisions is $28.1 million. 

As discussed in detail under rodent 

control, the benefits of these provisions 

are highly correlated. The data 

attributing a correlation between any 

one practice and a decrease in SE 

prevalence is probably overstating the 

effect because, for instance, farms with 

a good biosecurity system tend to have 

good rodent and other pest control 

programs. In order to avoid the double 

counting of benefits, we use only the 

benefits estimated for rodent control as 

a proxy for the benefits of all three 

provisions implemented correctly. 

Therefore all three provisions 

implemented together are estimated to 

reduce the number of SE related 

illnesses every year by nearly 39,000 for 

total estimated annual benefits of more 

than $697.3 million. The provisions 

would cost about $690 per illness 

averted and have net benefits of about 

$675.9 million. 

If we account for estimated reductions 

in SE prevalence due to the chick and 

pullet provisions (an estimated decrease 

of 0.23 percent, discussed in detail in 

section V.F.1.i), occurring earlier in the 

production cycle, these three provisions 

would prevent about 90 less illnesses 

than they would standing alone ((1– 

0.0023) × 39,000 illnesses). Costs would 

only decrease slightly, as cleaning and 

disinfecting costs are the only ones that 

are a function of SE prevalence. In place 

with the other provisions of the final 

rule, these three provisions will cost 

about $700 per illness averted and have 

net benefits of about $674.3 million. 

d. Refrigeration.—i. Refrigeration 

provisions. This rule requires that shell 

eggs being held or transported must be 

refrigerated at or below 45 °F ambient 

temperature beginning 36 hours after 

time of lay. 

ii. Current industry practices; 

refrigeration. Because eggs packed on 

the farm do not have to be transported 

to a packing plant, we assume that eggs 

on these farms are packed for sale 

within 36 hours of lay. Accordingly, we 

assume that this provision would 

impose additional costs only on those 

farms that do not pack their eggs for the 

ultimate consumer, are currently storing 

their eggs for longer than 36 hours, and 

currently do not refrigerate their eggs at 

an ambient temperature at or below 45 

°F, either on-farm, during shipment, or 

during holding before shell egg 

processing or entering egg products 

facilities. We use data from the Layers 

study (Refs. 27 and 28), shown in table 

15 of this document, to determine the 

percentage of farms affected by the onfarm storage temperature requirements. 

TABLE 15—FARMS AFFECTED BY ON-FARM EGG STORAGE TEMPERATURE REQUIREMENTS

Farm size (number of layers) 

Packed 

off-farm 

(%) 

Stored 

longer than 

36 hours 

(%) 

Temp > 

45 °F 

(%) 

Percent of 

farms 

affected 

Number of 

farms 

affected 

3,000 to 19,999 ........................................................................................ 98.3 98.2 78.1 75.4 1,317 

20,000 to 49,999 ...................................................................................... 96.3 100 75.8 73.0 675 

50,000 to 99,999 ...................................................................................... 83.1 83.4 92.1 63.8 158 

100,000 or more ...................................................................................... 65.6 75 72.6 35.7 146 

Total .................................................................................................. 81.2 87.3 81.2 57.6 2,296 

The first three columns of table 15 of 

this document are taken directly from 

data collected for the Layers study. The 

percentage of farms affected (fourth 

column) is the product of multiplying 

the first three columns. The number of 

farms affected (final column) is 

estimated by multiplying the percent of 

farms affected by this provision by the 

total number of farms covered by the 

provision. 

Due to current rules on refrigeration, 

most farms currently ship eggs from the 

farm in refrigerated freight at 45 °F, even 

though they are not required to do so 

until the eggs have been packaged or 

further processed.37 Farms with more 

than 10,000 layers are likely to be 

currently in compliance with this 

provision. Some smaller farms, those 

with 10,000 layers or less, which 

account for roughly 5 percent of current 

egg production, may be out of 

compliance. It is unlikely that even the 

smallest farms that are currently 

refrigerating eggs onsite would ship eggs 

on unrefrigerated trucks. As a high 

estimate of the costs of this provision, 

FDA assumes that producers with 

10,000 layers or less, who are currently 

not in compliance with the on-farm 

refrigeration part of this provision (all 

farms with less than 3,000 layers and 

75.4 percent of farms with between 

3,000 and 20,000 layers) 38 are not in 

compliance with the refrigerated 

shipping requirement. 

There are 514 producers, packers, and 

grading stations that will be affected by 

this provision (Ref. 93). While the 

majority of eggs in the United States are 

processed within 2 to 3 days, some 

cases arise where eggs are held longer. 

Seasonal fluctuations in demand or 

within industry egg trading, at times 

causes eggs to be held for more than 36 

mstockstill on DSKH9S0YB1PROD with RULES2

33066 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

39Within industry egg trading refers to trading 

between firms to meet unexpected demand or get 

rid of excess supply. 

40All cost estimates regarding on farm storage are 

from data supplied to FDA through a contract with 

the Research Triangle Institute. Derivation of 

estimates is more fully described in a memorandum 

to the record (Ref. 95). 

41We recognize that some of these farms may 

require additional refrigeration units to achieve the 

45 °F threshold. However, because we do not 

currently have information that allows us to 

estimate how many farms fall into this category, we 

assume that the only cost facing farms that use an 

inadequate level of refrigeration will be the cost of 

increased energy usage. As such, actual 

refrigeration costs will be higher than estimated. As 

most farms currently using refrigeration will simply 

have to increase their energy usage, we believe the 

difference between actual costs and costs estimated 

using energy usage as a proxy is small. Furthermore 

the underestimate will be at least somewhat offset 

by the use of newer, more efficient equipment, and 

overestimates in other parts of this calculation (see 

footnote 44 of this document). 

42 (4.83 + 1.73) kilowatt hours used per hour × 15 

hours of operation × $0.057 per kilowatt hour used 

× 30 days. 

43 (4.83 + 1.73) kilowatt hours used per hour × 18 

hours of operation per day × $0.057 per kilowatt 

hour × 30 days. 

44 In actuality, the relationship between 

refrigeration and cost is increasing at an increasing 

rate, so that our use of a linear relationship 

somewhat overstates the cost of lowering 

refrigeration temperatures. 

hours between lay and processing 39

(Ref. 94). 

There is currently no regulation 

requiring a specific temperature for 

preprocessed eggs. Eggs are typically 

held between 55 and 

60 °F (Ref. 94). FDA believes most 

producers will have to decrease the 

holding temperature for their eggs. 

iii. Cost of on-farm refrigeration.40

The refrigeration provision will cause 

producers to choose to perform one of 

the following tasks: (1) Turn down the 

thermostats in their coolers, (2) install 

new refrigeration, or (3) renegotiate their 

shipping contracts to require more 

frequent pickup of unpacked eggs. In 

addition, producers that do not 

currently ship in refrigerated freight will 

need to do so. Furthermore, producers, 

packers, and egg grading stations will 

have to refrigerate eggs at no more than 

45 °F if they hold the eggs for more than 

36 hours prior to processing. 

In table 15 of this document, we 

estimate that almost 2,300 farms do not 

meet the on-farm standards set by the 

refrigeration provision. Of these farms, 

some are currently using refrigeration, 

albeit at higher temperatures than the 

provision would permit. Others do not 

have any refrigeration installed on their 

farms. We assume that those farms that 

report storing their eggs between 45 and 

60 °F already have refrigeration 

installed. For these farms, the cost of 

complying with the refrigeration 

provision is the cost of increasing 

electricity usage to further cool their 

eggs. For farms that store their eggs at 

a temperature greater than or equal to 

60 °F, we assume that no refrigeration 

is currently installed. The cost to these 

farms includes the cost of installing an 

insulated egg room with refrigeration 

units. 

In table 16 of this document, we use 

data from the Layers study to determine 

how many farms will have to install 

refrigeration and how many will only 

have to reduce the temperatures in their 

egg rooms. The majority of smaller 

farms lack refrigeration facilities, while 

larger farms are more likely to use 

refrigeration at an inadequate level. 

The cost of this provision to farms 

that are using refrigeration at an 

inadequate level is assumed to be the 

cost of increased energy usage.41 If 

temperatures in egg rooms on these 

farms are uniformly distributed between 

45 and 60 °F, the average reduction in 

temperature is 7.5 °F. If the electricity 

rate is $0.057 per kilowatt-hour (Ref. 

96), farms will spend between about 

$130 for farms with between 3,000 and 

20,000 layers to a little over $1,400 for 

farms with more than 100,000 layers. 

These estimates are based on the 

assumption that refrigeration must be 

run 18 hours a day to achieve the 45 °F 

mark, while it must be run 15 hours a 

day to achieve the 60 °F mark. We 

estimate that the average farm with 

20,000 to 50,000 layers would need to 

run one 5-horsepower refrigeration unit 

and one 1-horsepower unit to 

sufficiently cool its egg room. A 5- 

horsepower unit uses 4.83 kilowatt 

hours per hour of operation, while a 1- 

horsepower unit only uses 1.73 kilowatt 

hours. Therefore, the cost of cooling to 

60 °F is about $168 per month, or about 

$2,020 per year.42 The cost of cooling to 

45 °F is about $202 per month, or about 

$2,420 per year.43 The resulting cost of 

decreasing the ambient temperature in 

the egg cooler by 15 °F is approximately 

$400. Using a linear relationship 

between refrigeration and cost gives us 

an estimate of approximately $200 for a 

7.5 °F reduction.44

TABLE 16—ANNUAL COST OF ON-FARM REFRIGERATING AFFECTED FARMS

Farm size (number of 

layers) 

No refrigeration Inadequate refrigeration Total cost 

(in thousands) 

Number 

Cost per farm 

(7% discount 

rate) 

Cost per farm 

(3% discount 

rate) 

Number Cost per farm (7% discount 

rate) 

(3% discount 

rate) 

3,000 to 19,999 ............ 720 $6,979 $5,074 597 $128 $5,102 $3,730 

20,000 to 49,999 .......... 201 13,793 9,779 474 203 2,868 2,062 

50,000 to 99,999 .......... 65 26,359 18,500 93 352 1,746 1,235 

100,000 or more .......... 32 112,681 78,595 114 1,413 3,767 2,676 

The fixed cost of new refrigeration 

includes the cost of constructing an egg 

room, insulating that room, and 

installing refrigeration units. Storage 

rooms and their insulation are assumed 

to last 30 years. Refrigeration units last 

from 10 to 20 years. Using these values, 

along with a 7 percent discount rate, we 

estimate that the annualized cost of 

installing new refrigeration would be 

about $1,300 for a farm with 20,000 to 

50,000 layers. 

The cost of constructing an egg room 

equals the number of square feet 

required times the construction cost per 

square foot. The number of square feet 

required is estimated as the number of 

square feet required per 1,000 dozen 

eggs (294 square feet) times the number 

of eggs produced in a 24-hour period 

(1,700 dozen eggs) times the number of 

days the eggs are expected to be stored 

(about 4 days). The average cost of 

construction per square foot has been 

estimated to be between $50 and $75. 

Therefore, for the average farm with 

20,000 to 50,000 layers the cost of 

construction is $125,000. The amortized 

cost over 30 years at 7 percent is 

approximately $10,050. 

The cost of insulating an egg room 

equals the number of square feet to be 

covered times the insulation cost per 

square foot. Insulation costs $13.38 for 

a 32 square foot sheet. For a farm with 

20,000 to 50,000 layers requiring 3,670 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33067 

45As noted previously, for a farm with 20,000 to 

50,000 layers the annualized cost of cooling an egg 

room to 45 °F is (4.83 + 1.73) kilowatt hours used 

per hour × 18 hours of operation per day × $0.057 

per kilowatt hour × 30 days ≈ $202 per month, or 

about $2,420 per year. Using similar calculations, 

average annual energy costs for refrigeration on 

farms that previously did not use refrigeration are 

estimated to be $1,540 on farms with 3,000 to 

19,999 layers, $4,230 on farms with 50,000 to 

99,999 layers, and $16,950 on farms with 100,000 

layers or more. 

46Using a calculation similar to the one 

illustrated in the discussion of the costs of 

inadequate refrigeration for farms with 20,000 to 

50,000 layers, average annual energy costs for farms 

with inadequate refrigeration are estimated to be 

$130 on farms with 3,000 to 19,999 layers, $350 on 

farms with 50,000 to 99,999 layers, and $1,400 on 

farms with $100,000 layers or more. 

47For ease of explanation, the total new burden 

of the refrigeration requirement is assumed to be 

carried by the farmers. In reality, this burden, 

although equal in total, might be spread among the 

farmer, shipper, producer, retailer, and consumer. 

48This estimate assumes a 7-percent discount 

rate. 

49 In the proposed rule, molted flocks were to 

undergo environmental testing at 20 weeks post 

molt. Changing the time from 20 weeks to 4 to 6 

weeks post molt increases the costs to farms that 

test environmentally positive, egg positive, and 

continue to test egg positive. For these farms, earlier 

testing means more eggs diverted over the life of the 

flock and more egg tests. However, the benefit of 

diverting more potentially positive eggs is greater 

than the additional costs. 

square feet of insulation, the expected 

cost of insulation is therefore $1,540. 

The annualized cost of insulation 

(amortized over 30 years at 7 percent) is 

$125. 

The fixed cost of refrigeration for an 

egg room is the cost of buying and 

installing refrigeration units. We assume 

that installation costs are approximately 

5 percent of the purchase price of the 

unit. For a farm with 20,000 to 50,000 

layers, the cost of refrigeration is the 

purchase price for needed refrigeration 

units ($10,300) plus the cost of 

installation ($10,300 × 5 percent) for a 

total of $10,816. Amortizing this cost 

over 15 years at 7 percent yields an 

annual cost of $1,190. 

The total annualized cost of installing 

a refrigerated egg room on a farm with 

20,000 to 50,000 layers is estimated to 

be approximately $11,350. Including the 

cost of energy increases the total cost to 

$13,800. 

For all types of refrigeration, there 

also will be a cost associated with the 

use of electricity to run the cooling 

units. Given that electricity costs $0.057 

per kilowatt-hour, we estimate that 

farms not currently using refrigeration 

will spend an additional $1,500 to 

$17,000 annually for power.45 Farms 

that currently use refrigeration, but at 

higher temperatures than 45 °F, will 

spend an additional $130 to $1,400 

annually for power.46

The cost of this provision to a farm 

without any refrigeration in place is 

estimated to range from about $7,000 for 

farms with between 3,000 and 20,000 

layers to over $112,600 for farms with 

more than 100,000 layers. The cost of 

this provision to a farm with adequate 

refrigeration is simply the cost of the 

additional energy, ranging from about 

$130 for farms with between 3,000 and 

20,000 layers to over $1,400 for farms 

with more than 100,000 layers. 

iv. Cost of refrigerated shipping. The 

average cost of refrigerated shipment at 

45 °F is $0.12 per dozen eggs. 

Unrefrigerated shipments cost 20 

percent less than refrigerated shipments. 

Therefore, the difference in cost 

between refrigerated and unrefrigerated 

shipments is $0.024 per dozen eggs. 

Since farms with 10,000 layers or less 

produce roughly 1.5 percent of the eggs 

sold annually (93 million dozen eggs), 

the additional cost of refrigerated 

shipping on these farms is $1.7 million 

(93 million dozen eggs × $0.024 × 0.754 

not in compliance). 

v. Cost of preprocessing storage. The 

cost of this provision to facilities 

holding eggs at above 45 °F for shell egg 

processing or before entering egg 

products facilities is assumed to be the 

cost of increased energy usage. If 

temperatures in egg rooms at these 

facilities are uniformly distributed 

between 55 and 60 °F, the average 

reduction in temperature is 7.5 °F. If the 

electricity rate is $0.057 per kilowatthour, facilities holding 100 dozen eggs 

at a time will spend $35 annually while 

facilities holding 1,000 dozen eggs at a 

time will spend nearly $20,000 

annually. Using calculations similar to 

those described previously for on-farm 

holding, it is estimated that the average 

annual cost of additional refrigeration is 

about $9,700 per facility. The total 

annual cost for the 514 facilities holding 

eggs at above 45 °F is expected to be $5 

million. 

vi. Total cost of refrigeration 

provisions. The total cost of the 

refrigeration provision, using a 7 

percent discount rate, is approximately 

$20.2 million.47 Using a 3 percent 

discount rate, the cost is approximately 

$16.4 million. However, some farms 

will choose to increase the frequency of 

egg pickups instead of installing 

additional refrigeration to remain in 

compliance with the provision. If more 

frequent egg pickups are a lower cost 

alternative to refrigeration installation, 

the previously mentioned figures may 

overstate the actual cost of increased 

refrigeration. 

vii. Benefits of refrigeration. The 

probability that an individual will 

become ill from an SE-contaminated egg 

depends, among other things, on the 

number of bacteria within the infected 

egg. Refrigeration of eggs at 45 °F 

significantly slows the reproduction of 

the SE bacteria (Ref. 22). This provision 

would require that eggs that are stored 

for more than 36 hours after laying be 

refrigerated at 45 °F through the 

preproduction stage. We use the USDA 

SE risk assessment model (Ref. 22), a 

model designed, in part, to estimate the 

effects of refrigeration on the number of 

SE illnesses. The FSIS risk assessment 

estimates that if all eggs on farms 

affected by the final rule are refrigerated 

at 45 °F within 36 hours of lay to the 

time they were processed, we would see 

a 31 percent decline in annual SE 

illnesses. This translates to nearly 

45,000 illnesses avoided annually, or 

about $800.6 million in annual benefits. 

Standing alone, the refrigeration 

provisions would cost about $450 per 

illness avoided and provide $780.4 

million in net benefits. 

If we account for estimated reductions 

in SE prevalence due to the provisions 

pertaining to chicks and pullets, rodent 

and pest control, biosecurity, cleaning 

and disinfecting, and testing and 

diversion (a 35 percent reduction in 

prevalence when all provisions are in 

place and fully effective), all occurring 

earlier in the production cycle, the 

refrigeration provisions would provide a 

20 percent decline in SE illness, 

preventing about 29,000 illnesses 

annually ((1–0.35) × 45,000 illnesses). 

Costs of refrigeration are not a function 

of SE prevalence and remain constant. 

In place with the other provisions of the 

final rule, the cost per illness averted on 

farms with more than 3,000 layers is 

estimated to be roughly $700.48 The 

annual net benefit of the provision is 

$496.9 million. 

e. Routine environmental testing. 

Environmental testing does not serve 

directly as an SE prevention measure. 

Testing serves primarily as an indicator 

of the effectiveness of the SE prevention 

measures. 

i. Environmental testing provision. 

This provision would require every farm 

to routinely test the environment of 

their layers for SE. For flocks that do not 

undergo a molt, this requirement would 

be limited to a test for SE in the 

environment when each group of layers 

in the flock is 40 to 45 weeks of age. For 

those flocks that do undergo a molt, 

testing would be required when each 

group of layers is 40 to 45 weeks of age 

and 4 to 6 weeks after molting for each 

group is completed.49

Environmental sampling would be 

accomplished by a method such as 

swabbing manure piles in the poultry 

mstockstill on DSKH9S0YB1PROD with RULES2

33068 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

50 (15 ÷ 60) × $14.34. 

house and then culturing those swabs 

using a primary enrichment testing 

method. We consider variants of 

sampling protocols that are currently in 

use. The California Quality Assurance 

program currently requires a sampling 

plan that relies on randomly swabbing 

30-foot sections of the poultry house 

(Ref. 97). To obtain a 95 percent 

probability of finding a house that is 10 

percent infected, we estimate that 32 

samples would have to be taken. Many 

other State quality assurance plans, 

including Pennsylvania’s, require the 

span of each row of the layer house to 

be swabbed with one swab, regardless of 

row length (Ref. 92). 

ii. Current industry molting practices. 

Molted flocks face additional testing 

under this provision. Overall, 62 

percent of all large flocks are molted 

once and 12 percent are molted twice 

before depopulation (Refs. 27 and 28). 

Industry molting practices, however, 

vary by region and by farm size. 

Farms in the Central and Great Lakes 

regions are least likely to molt their 

flocks while farms in the Southeast and 

West are most likely to use molting as 

a practice. See table 17 of this 

document. 

TABLE 17—REGIONAL MOLTING PRACTICES 1

Region 

Times molted 

0 1 2 

Great Lakes ............................................................................................................................................. 30% 65% 5% 

Southeast ................................................................................................................................................. 7% 80% 13% 

Central ..................................................................................................................................................... 49% 51% 0% 

West ......................................................................................................................................................... 18% 50% 32% 

1 Layers study data provided by APHIS. 

Molting practices also vary by farm 

size. As table 18 of this document 

illustrates, smaller farms are less likely 

to molt their layers than are larger 

farms. While almost 85 percent of all 

farms with 50,000 or more layers molt 

their layers, only 28 percent of farms 

with fewer than 20,000 layers molt their 

flocks. This disparity plays a significant 

role in the determination of the 

expected cost of testing and diversion. 

TABLE 18—MOLTING PRACTICES BY FARM SIZE 1

Farm size (number of layers) 

Times molted 

0 1 2 

Fewer than 20,000 ................................................................................................................................... 72% 28% 0% 

20,000 to 49,999 ...................................................................................................................................... 35% 54% 11% 

50,000 to 99,999 ...................................................................................................................................... 14% 68% 18% 

100,000 or more ...................................................................................................................................... 16% 72% 12% 

1 Layers Study data provided by APHIS. 

iii. Current environmental testing 

practices. According to the Layers 

study, approximately 52 percent of all 

farms with more than 30,000 layers 

currently conduct some routine 

environmental tests for SE (Refs. 27 and 

28). The vast majority of these 

producers are also members of formal 

quality assurance programs. 

iv. Environmental testing costs. The 

cost of routine environmental testing 

depends on how many samples are 

tested, the labor cost of collecting the 

samples, the cost of shipping the 

samples to a laboratory, and the 

laboratory cost per sample tested. 

We estimate that it will take 

approximately 15 minutes to collect and 

pack each sample. Because the wage for 

a typical livestock and poultry worker is 

approximately $9.56 per hour (Ref. 89), 

after adding 50 percent to reflect 

overhead costs, we assume that the cost 

of labor is $3.59 per sample collected.50

The cost of shipping samples will 

vary by the weight of the shipment. We 

assume that a swab, with its packing 

material, weighs approximately 1 

pound. To calculate the cost of 

shipping, we estimate the average 

number of swabs sent per shipment and 

use rate tables (Ref. 98) to determine the 

cost of shipment. 

We estimate the laboratory cost of 

testing for SE that has been collected 

from the environment to be 

approximately $36.00 per sample (Ref. 

99). 

The average cost of routine testing for 

SE in a given house is determined by 

multiplying the number of tests required 

for that house by the expected cost per 

test. For any plan that is used, the per 

house cost of testing is estimated to be 

Cost = SWABS × (LABOR + MAIL + 

LAB) 

Where: 

SWABS is the number of required swabs, 

LABOR is the cost of labor per test, 

MAIL is the cost of shipping samples to a lab, 

and 

LAB is the laboratory costs of testing for SE. 

To determine the testing cost of the 

row-based plan, we multiply the cost 

per test by the estimated number of 

rows that will have to be swabbed. We 

assume that all farms that are currently 

conducting routine testing (52 percent) 

(Refs. 27 and 28) are using a row-based 

plan. 

The number of rows that will have to 

be swabbed in larger houses is estimated 

in table 19 of this document. 

Information for the first three columns 

is drawn from the Layers study (Refs. 27 

and 28). We estimate the number of 

houses affected by the provision (the 

fourth column) by multiplying the 

number of large houses (7,315) by the 

percent of houses affected by the 

provision (48 percent), and then 

multiplying the product by the percent 

of houses in the given category. We 

estimate the number of rows that will 

have to be swabbed because of the 

provision as the number of rows per 

house times the number of houses 

affected by the provision. We estimate 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33069 

51The cost of shipping 12 swabs (12 pounds) 

overnight is estimated to be between $25.58 and 

$70.73, including pickup charges (Ref. 98). We 

divide the average cost of shipping by 12 to obtain 

the cost per swab ($3.98). 52The cost of shipping 32 swabs (32 pounds) 

overnight is estimated to be between $42.10 and 

$114.65, including pickup charges (Ref. 98). We 

divide the average cost of shipping ($77.44) by 32 

to obtain the cost per swab ($2.42). 

53Under the provision on diversion, farms that 

test positive for SE in their eggs would be required 

to divert their eggs for treatment until they are able 

to show via testing that SE is not present in the eggs 

produced in the infected house. This is discussed 

in detail in the following section on diversion costs. 

that a total of 21,325 rows would have 

to be swabbed due to this provision. 

TABLE 19—NUMBER OF ROWS TO BE SWABBED

[Houses with 3,000 or more layers] 

Number of rows or batteries of cages 

Average 

number of 

rows 1

Percent of 

houses 

Number of 

houses 

affected 

Number of 

rows affected 

1 ....................................................................................................................... 1.0 1.9 67 67 

2 to 3 ................................................................................................................ 2.5 12.5 442 1,105 

4 to 5 ................................................................................................................ 4.5 50.8 1,794 8,073 

6 or more ......................................................................................................... 10.0 34.2 1,208 12,080 

Total .......................................................................................................... 6.1 ........................ 3,511 21,325 

1The average number of rows per house is estimated as the midpoint of the range estimated by Layers study. For the ‘‘6 or more’’ category 

we assume that these houses have an average of 10 rows each. 

Because each row has two sides, each 

of which we assume will have to be 

swabbed, the total number of swabs 

required is estimated to be 

approximately 42,650. On average, 12.2 

swabs will be used for each house with 

more than 3,000 layers. The total cost of 

testing the average large house is $532 

(12.2 swabs × ($3.59 labor + $3.98 

shipping + $36.00 lab culture)) when 

two swabs are used per row.51

The random swabbing plan requires 

that 32 samples be taken per house. 

Although 52 percent of houses conduct 

some routine environmental testing, far 

fewer are likely to follow the random 

swabbing plan. In the absence of better 

information, we assume that between 0 

and 52 percent (uniformly distributed) 

of large houses that are currently testing 

use random swabbing plans. The cost 

per swab under the random swabbing 

sampling plan is about $42 ($3.59 labor 

+ $2.42 shipping 52 + $36.00 lab 

culture). The total cost of one round of 

testing under the random swabbing plan 

is calculated to be $1,344 per house, 

regardless of size (32 swabs per house 

× $42 cost per swab). 

f. Follow-up egg testing.—i. Egg 

testing provisions. Follow-up egg testing 

would occur if an environmental test is 

positive for SE. If egg testing is 

triggered, the following protocol must 

be followed. First, the farmer must 

submit 1,000 eggs to a lab both initially 

and subsequently every 2 weeks for a 

total of 4,000 eggs. Consistent with the 

method described in chapter 5 of FDA’s 

Bacteriological Analytical Manual 

(BAM) the eggs that are submitted for 

testing may be pooled in samples of 20 

eggs each. If pooled into samples of 20 

eggs each, a total of 200 egg tests are 

conducted. If any of these egg tests are 

positive, the farm will be required to 

divert its eggs until four consecutive 

rounds of egg tests are found to be 

negative. Furthermore, a farm that has 

had a positive egg test must continue to 

test 1,000 eggs each month for the life 

of the flock. 

If the cost of egg testing is high 

enough, however, the farmer may 

simply choose to forego egg testing and 

divert all eggs for the life of the flock.53

ii. Current industry practices; Followup egg testing. We assume that those 

farms currently under a recognized 

quality assurance plan that mandates 

egg testing following a positive 

environmental test are currently in 

partial compliance with this provision. 

Of the major plans, only the 

Pennsylvania and Maryland plans have 

follow-up testing provisions that are 

largely the same as this provision (Ref. 

76). According to ‘‘Chicken and Eggs’’ 

(Ref. 75), egg production in Maryland 

and Pennsylvania accounted for 9.7 

percent of the U.S. total. Only 85 

percent of the eggs in these States fall 

under the State quality assurance 

programs. We therefore estimate that 8.2 

percent (9.7 percent × 85 percent) of all 

eggs are currently in partial compliance. 

Because farms with fewer than 3,000 

layers are not currently in these quality 

assurance programs, we assume that no 

farms with fewer than 3,000 layers 

conduct follow-up egg tests. 

Farms using the number of eggs for 

sampling required by the Pennsylvania 

and Maryland plans are sampling fewer 

eggs than are required by this rule. 

Specifically, this provision would 

require that batches of 1,000 eggs be 

tested if egg testing is required, while 

the Pennsylvania and Maryland plans 

only require 480 eggs to be tested in 

each batch. Farms on either the 

Pennsylvania or the Maryland plans are 

only 48 percent (480 ÷ 1000) in 

compliance with the provision. 

Furthermore, the testing protocol used 

in Pennsylvania and Maryland is less 

rigorous than the one prescribed by 

FDA. Therefore, farms currently testing 

under the Pennsylvania and Maryland 

plans will also have to change their 

testing protocol. Because these farms are 

already paying for egg testing, however, 

not all costs of the new testing plan will 

be new costs. The tests under the 

Pennsylvania plan cost about 71 percent 

as much as the test required under the 

FDA plan. 

These numbers suggest that the 

current net level of compliance with the 

provision is 2.8 percent (8.2 percent 

under state quality control plans × 48 

percent as many eggs tested as required 

by this rule × 71 percent the cost of FDA 

test) for farms with more than 3,000 

layers. 

iii. Egg testing costs. The cost of 

follow-up egg testing is composed of the 

following: (1) The labor cost of 

collecting the eggs, (2) the value of the 

eggs being tested, (3) the cost of 

shipping the eggs to a qualified 

laboratory, and (4) the lab costs of 

testing the eggs. The cost of collecting 

the eggs is the hourly cost of labor times 

the number of hours spent collecting the 

eggs. We estimate that it will take the 

typical farmhand approximately onehalf minute per egg to select eggs for 

testing, so the labor cost of egg testing 

is $119.50 per 1,000 eggs tested (50 

samples × 20 eggs per sample × 0.0083 

hours per egg × $14.34 dollars per hour) 

(Ref. 89). 

The lost value of the eggs used for 

testing is the number of eggs tested 

mstockstill on DSKH9S0YB1PROD with RULES2

33070 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

54Using the producer price of the egg may 

slightly underestimate the value of the lost egg. 

Although much of the price increase between 

producer and consumer includes transfers, there is 

real value added during some processing. 

55The following calculation is used to reach this 

figure. [(74 percent of eggs not diverted × $0.43 per 

dozen table eggs) + (26 percent of eggs diverted × 

$0.26 per dozen diverted eggs)] ÷ 12 eggs in a dozen 

= $0.03215 per egg. 

56The cost of shipping a 60-pound package 

overnight is between $67.35 and $191.70, including 

pickup charges (Ref. 98). We multiply the average 

cost of shipping ($129.52) by 2 to obtain the total 

cost of $259.05. 

57For the testing method FDA prescribes, the lab 

cost per 20 egg pool is $35 initially and an 

additional $30 for confirmation if the pool tests 

positive (Ref. 100). Upon an environmental 

positive, eggs will test positive at a rate of 2.75 per 

10,000 (Ref. 92). Therefore the probability of a pool 

of 20 eggs testing negative is 99.45 percent ((1 ¥ 

(2.75/10,000))¥20). Conversely the probability of a 

pool testing positive is 0.55 percent. So the 

expected cost of a test is $35.16 (($35 × 0.9945) + 

($65 × 0.0055)). 

58 In table 20 of this document, the number of 

eggs produced includes hatching eggs as well as 

table eggs. Because most hatching eggs are 

produced in the South and hatching eggs do not go 

to breaker plants, the percentages of eggs going to 

breaker plants are biased downward for the 

southern regions. 

59Shipping grains from the Midwest to the West 

Coast by rail car cost over $1 per bushel (Ref. 102). 

times the producer price of an egg.54 To 

avoid double counting of the cost of 

diversion (for those eggs being tested), 

we modify this value to account for the 

fact that as many as 26 percent of eggs 

being tested may be required to be 

diverted at the time of testing. The price 

that the typical producer receives for 

table eggs is about $0.43 per dozen, 

while the price a producer receives for 

diverted eggs is about $0.26 per dozen 

eggs (see table 21 of this document). The 

expected value of a tested egg is the 

weighted average of the value of a table 

egg and a diverted egg, or about $0.03 

per egg.55 The value of the eggs tested 

is the value per egg times the number 

of eggs tested. The value of every 1,000 

eggs tested is $32.15. 

Eggs that are collected will have to be 

shipped to a laboratory for analysis. The 

cost of shipping these eggs depends on 

the weight of the eggs being shipped. 

We estimate that 1,000 large eggs weigh 

approximately 111 pounds. The cost of 

shipping these eggs in two 60-pound 

packages (including packing) to the 

laboratory is approximately $260.56

The largest cost of egg testing is the 

laboratory; we estimate the average lab 

cost for 1 batch of 20 eggs to be 

$35.16.57 Hence, for 50 tests the 

laboratory cost of eggs testing is $1,758 

per 1,000 eggs tested (50 batches × 

$35.16 per test). 

The total cost of egg testing is the sum 

of each of the previously stated costs. 

Therefore, the cost of egg testing is 

$2,169 per 1,000 eggs tested ($119.50 

collection costs + $32.37 lost income 

from egg sales + $259.05 shipping costs 

+ $1,758 lab costs). 

g. Diversion.—i. Diversion provisions. 

Under this provision, farms that test 

positive for SE in their eggs would be 

required to divert their eggs for 

treatment until they are able to 

determine via testing that SE is not 

present in the eggs produced in the 

infected house. Both the expected level 

of diversion and the expected cost of 

diversion will vary by each operation’s 

location and size. 

ii. Regional differences in the cost of 

diversion. Regional differences in the 

cost of production have led to the 

centralization of the breaker industry in 

the North Atlantic and North Central 

regions of the United States. As table 20 

of this document shows, these regions 

are responsible for only 52 percent of 

overall egg production, but over 86 

percent of breaker eggs.58 The 

centralization of the breaker industry is 

even more clearly illustrated in the 

fourth column of table 20. While 36 to 

44 percent of eggs make it to breaker 

plants in the northern regions, the 

corresponding figures for the West and 

South are only 10 percent and 6 to 7 

percent. The primary purpose of breaker 

plants outside of the North appears to be 

as an outlet for eggs not suitable for 

retail sale as table eggs. 

TABLE 20—PRODUCTION AND BREAKING OF EGGS

Region 

Eggs produced Eggs broken Percent of 

eggs produced 

that are 

broken 

Millions of 

eggs1 Percent Thousands of dozens 2 Percent 

North Atlantic ....................................................................... 10,106 12.3 300,406 17.1 35.7 

North Central ........................................................................ 32,869 40.0 1,212,758 69.1 44.3 

South Atlantic ....................................................................... 13,979 17.0 69,774 4.0 6.0 

South Central ....................................................................... 14,512 17.7 84,071 4.8 7.0 

West ..................................................................................... 10,636 13.0 87,662 5.0 9.9 

Total .............................................................................. 82,102 100.0 1,754,671 100.0 25.7 

1 National Agricultural Statistical Services (NASS) (Ref. 75). 

2 NASS (Ref. 101). 

To predict how the industry will 

respond to a provision mandating 

diversion, it is important to consider the 

following information: (1) Why the 

breaker egg industry is regionally 

concentrated while the shell egg 

industry is distributed more evenly 

throughout the United States and (2) 

Why the concentration has occurred in 

the northern regions of the United 

States. 

There are several reasons why the 

breaker industry is centralized and the 

shell egg industry is not. First, it is 

much more expensive to transport shell 

eggs than it is to transport egg products. 

Shell eggs are relatively bulky and are 

susceptible to breakage in transit. 

Second, shell eggs are ultimately 

delivered directly to consumers in their 

natural state, while egg products are 

often used as ingredients in large-scale 

food manufacturing operations. Because 

processed foods are less costly to 

transport than are their ingredients, it 

makes sense to locate processed food 

facilities in areas where ingredients are 

locally available. To the extent that 

these ingredients are available in the 

northern regions, processed food plants 

will locate there. Consequently, it makes 

sense to locate breaker plants in this 

region as well. 

If centralization of breaker plants is 

going to occur, it will likely occur in the 

northern regions, for several reasons. 

The cost of egg production is lowest in 

the north, partly because feed grains 

(such as corn and wheat) are locally 

available at low prices in this region.59

Also, farms in the north are more likely 

to be characterized by large in-line 

houses (up to 250,000 layers). These 

houses take advantage of economies of 

scale to produce more eggs more 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33071 

60Filling orders for table eggs when eggs from one 

house must be diverted. 

61Eggs are typically shipped on palates holding 

900 dozen eggs. The palates are shrink-wrapped. 

Diverted eggs will need to be marked somewhere 

on the shrink wrapping. Based on FDA’s estimate 

of 474 million eggs diverted annually (discussed in 

detail in section F.1.h of this document), between 

45,000 and 60,000 labels would have to be affixed 

to palates each year. This estimate accounts for the 

fact that some shipments may use partially full 

palates. The labels themselves will cost about 

$0.025 each and require less than 30 seconds to 

apply. Thus, a conservative estimate puts the cost 

at less than $8,000 annually across the entire 

industry, or less than two one-thousandths of a cent 

additional cost per egg. Each farm will need to buy 

a label gun for a one time cost of approximately 

$100. Amortized over 10 years, this cost is less than 

$15 per year, per farm. The cost of stamping the 

accompanying documents is discussed in the 

recordkeeping section F.2.a of this document. 

cheaply. Furthermore, because the 

demand for egg products is higher in the 

northern regions, breaker plants can 

avoid the high transportation costs of 

shipping to food processors by locating 

closer to their customers. 

The implication of the industry 

structure is that there are likely to be 

regional disparities in the cost of 

diversion. Egg products and, hence, 

breaker egg prices are not expected to 

vary regionally by as much as shell egg 

prices. Where the cost of egg production 

and freight for diverted eggs is relatively 

high (such as in California), the cost of 

diversion is likely to be high. Similarly, 

where the price of egg production and 

freight is low (such as in Ohio and 

Pennsylvania), the cost of diversion is 

likely to be low. Furthermore, there are 

some remote areas, such as Hawaii, 

where the absence of breaker plants 

makes local diversion impossible. 

Because it is not economical to ship 

these eggs to breaker plants in the 

continental United States, the cost of 

diversion is simply the lost value of a 

clean table egg. 

FDA met with industry 

representatives in each of the previously 

mentioned regions and was given 

estimates of diversion costs that are 

consistent with the above reasoning. 

The diversion cost per dozen eggs in 

Pennsylvania was estimated to be 

insignificant while the diversion cost in 

California was estimated to be $0.21 to 

$0.42 per dozen. 

iii. Effect of operation size on 

diversion costs. Operation size can have 

a significant effect on average diversion 

costs for a given producer. A large 

producer is less likely to be affected by 

an individual house that tests positive, 

because the cost is generally spread 

across many houses and farm sites. 

Furthermore, in areas where it is 

economically feasible to produce eggs 

that are dedicated to breaker plants, 

large operations are less likely to have 

contract problems 60 because they can 

substitute SE-positive eggs for the eggs 

that originally were contracted to go to 

the breaker plant. By contrast, the 

economic losses from a positive house 

may cause a small farm with one house 

to incur significant losses for that farm. 

iv. Effect of SE-positive status on 

diversion costs. It has been suggested 

that eggs from an SE-positive flock will 

command a lower price at the breaker 

than will other eggs. The pasteurization 

process for breaker eggs is designed to 

achieve at least a 5-log reduction in any 

SE that may be in eggs. Further, the 

actual cost of marking the shipments 

and stamping documents accompanying 

diverted eggs as ‘‘these eggs must be 

treated to achieve at least a 5-log 

destruction of Salmonella Enteritidis or 

processed as egg products in accordance 

with the Egg Products Inspection Act’’ 

will be insubstantial.61 However, 

because these eggs are limited in how 

they may be used, SE-positive eggs are 

intrinsically less valuable than SEnegative eggs. 

v. Cost of a diverted egg. Given all of 

the factors stated in the previous 

paragraphs, we estimate that, on 

average, breaker eggs from an SEpositive flock will command a price 

below that received for shell eggs. Table 

21 of this document illustrates the 

prices that producers receive for shell 

and breaker eggs by region. As expected, 

the north-central region, with its 

proximity to inexpensive feed and a 

large food processing industry, has the 

highest level of production, the lowest 

prices for eggs, and the lowest cost for 

diversion. The West, with its higher 

feed costs and smaller layer houses, has 

the highest prices for eggs and the 

highest cost of diversion. We find the 

weighted average cost of diversion to be 

between $0.13 and $0.23 per dozen 

eggs. If there is an additional discount 

for those eggs with SE, the total cost 

could rise as high as $0.33 per dozen 

eggs. 

TABLE 21—TOTAL COST OF DIVERTING EGGS

Region Regional weight 

(in %) 

Shell egg price 

to producer 1

Breaking eggs 

(nest run) 2

Cost of diversion 

(nest run) 

North-Atlantic ................................................................................. 12 .3 $0.42 $0.31 $0.11 

North-Central ................................................................................. 40 0.39 0.30 0.09 

South-Atlantic ................................................................................. 17 0.43 0.31 0.12 

South-Central ................................................................................. 17 .7 0.47 0.30 0.17 

West ............................................................................................... 13 0.53 0.31 0.22 

Average Cost of Diverting Eggs 3 .................................................................................................................................................... 0.13–0.23 

Additional Discount for SE+ Eggs 4 ................................................................................................................................................. 0.00–0.10 

Total Cost of Diverting Eggs ........................................................................................................................................................... 0.13–0.33 

1The shell egg price paid to producers for the north-central region was estimated as equivalent to the prices AMS reported as paid in Iowa, 

Minnesota, and Wisconsin. For regions other than the north-central region, the shell egg price to the producer was calculated by discounting the 

price to retailer by a percentage equal to the percent difference between the price to the producer and the price to retailer in the north-central region. All figures were taken from AMS data accessed through The Institute of Food and Agricultural Services at the University of Florida (Ref. 

103). 2All figures are from AMS data accessed through the North Carolina Department of Agriculture (Ref. 104). 

3The lower bound of this range is the average cost of diverting eggs calculated as described above, and is weighted by regional production 

(Ref. 75). The upper bound of this range is calculated using data from comments to the analysis of the proposed rule, suggesting that the difference between the value of shell eggs and breakers has been greater recently. Because prices tend to fluctuate, and therefore differences in 

the price between shell eggs and breaker eggs fluctuate, the full range of estimated price differences is used in the calculation of the total cost of 

diverting eggs. 4 Ref. 91 and comment to analysis of the proposed rule. 

mstockstill on DSKH9S0YB1PROD with RULES2

33072 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

62For a detailed look at the mathematical model 

for this stage, see Ref. 106. 63A further refinement of the model would be to 

include the option of depopulating the flock and 

starting over with a new flock. There is a large 

degree of uncertainty over whether this is feasible 

given that the growing cycle of chicks and pullets 

must be coordinated with the laying cycle of flocks. 

Therefore, we did not include this option in our 

analysis. We invited comment on the feasibility of 

this option in the analysis of the proposed rule but 

did not receive any responses. 

64Tables 22 and 23 of this document present the 

cost estimates for houses based on the current 

estimated prevalence of SE. In the total cost tables 

(24 and 25 of this document), we also present an 

estimate that reflects the expected prevalence 

following the full implementation of this rule. 

65 It is never in the interest of the smallest farms 

to test eggs because the expected cost of testing 

exceeds the revenue loss from simply diverting all 

eggs for the life of the flock. 

vi. Expected cost of diversion. The 

expected cost of diversion is determined 

by the cost of diverting an egg, the 

number of eggs in commerce affected by 

the provision, and the probability that a 

given egg will be diverted. 

h. A model of testing and diversion 

costs.—i. The model. We use a dynamic 

model for estimating testing and 

diversion costs. We model these costs as 

depending on the probability of SE 

detection, farm size, molting practices, 

and the farmer’s choice between 

conducting follow-up egg tests and 

diverting until depopulation of the 

contaminated house. 

In the first stage of the model, we 

estimate the probabilities associated 

with environmental and egg tests. For 

environmental tests, we estimate that 

9.7 percent of all flocks currently test 

positive. We then adjust this estimate 

downwards to 8.4 percent initially and 

7.0 percent eventually to account for the 

expected reduction of SE on the farm 

due to the adoption of other provisions 

of the rulemaking to reduce SE. In the 

experience of Pennsylvania, a flock with 

at least one environmental positive is 

likely to have at least one egg test 

positive 26 percent of the time (Ref. 

105). We do not know if the experience 

of Pennsylvania is representative of the 

nation as a whole. In the absence of 

better information, we use the 

Pennsylvania figure. 

In the next stage of the dynamic 

model, the expected cost of testing and 

diversion is calculated for farms in each 

of the five size categories used 

throughout this analysis. There are two 

reasons why this is a necessary step. 

First, the estimation of cost for different 

size categories allows for the explicit 

representation of the fact that both the 

number of tests required and the cost of 

diversion are directly related to the 

number of layers on the farm. Second, 

using different size categories facilitates 

an algebraic model design that uses 

logical operators to allow farmers (in the 

model) to make the low cost choice 

between egg testing and diversion. 

Molting practices are accounted for in 

the next stage. The different testing 

protocols for molted and non-molted 

layers make it necessary to look at the 

cost of testing and diversion separately 

for each of these types of flocks. At this 

stage of the model, we set out the 

possible scenarios for testing and 

diversion, derive the expected cost of 

each scenario, and calculate the 

statistical probability that each scenario 

will occur.62

In the final stage of the testing cost 

model, we insert logical operators into 

the model in such a way that farmers are 

given the choice of diverting rather than 

testing eggs when it is cost-efficient to 

do so. Failure of the model to give the 

farmer this choice may lead to estimated 

costs that are up to double the actual 

expected costs.63

ii. The costs of testing and diversion. 

The model described in the previous 

paragraph produces estimates of the 

annual expected cost of testing and 

diversion for layer houses. Estimates are 

obtained for each of the size categories 

by molting practice. 

As tables 22 and 23 of this document 

illustrate, the expected costs of testing 

and diversion for a poultry house range 

from $160 to over $5,500, depending on 

house size, environmental testing 

protocol, and molting practices.64 The 

low figures in the environmental testing 

and total cost columns represent costs 

given the row-based sampling scheme, 

while the high estimates represent the 

random swab sampling method. The 

costs for molted houses are annualized 

for the purpose of comparison. 

TABLE 22—COST PER HOUSE

[Non-molted flocks] 

Farm size 

(number of layers) 

Environmental 

testing Egg testing Diversion Dynamic total cost Static total cost 

Fewer than 3,000 .................................................. $150 to $1,340 ... $0 $6 $156 to $1,346 ... $1,313 to $2,503. 

3,000 to 19,999 ..................................................... $530 to $1,340 ... 843 311 $1,684 to $2,494 $1,885 to $2,695.

20,000 to 49,999 ................................................... $530 to $1,340 ... 843 722 $2,095 to $2,905 $2,140 to $2,950. 

50,000 to 99,999 ................................................... $530 to $1,340 ... 1,124 556 $2,210 to $3,020 $2,352 to $3,162. 

Over 100,000 ......................................................... $530 to $1,340 ... 1,124 1,288 $2,942 to $3,752 $3,223 to $4,033 

TABLE 23—COST PER HOUSE

[Molted flocks] 

Farm size 

(number of layers) 

Environmental 

testing Egg testing Diversion Dynamic total cost Static total cost 

3,000 to 19,999 ..................................................... $530 to $1,340 ... $1,378 $537 $2,454 to $3,314 $2,522 to $3,332. 

20,000 to 49,999 ................................................... $530 to $1,340 ... 1,597 766 $2,893 to $3,703 $2,955 to $3,765. 

50,000 to 99,999 ................................................... $530 to $1,340 ... 1,597 1,129 $3,256 to $4,066 $3,315 to $4,125. 

Over 100,000 ......................................................... $530 to $1,340 ... 1,597 2,618 $4,745 to $5,555 $4,793 to $5,603 

The inclusion of a choice to opt out 

of egg testing also results in egg testing 

costs that increase with farm size. The 

choice to opt out of egg testing 

significantly increases diversion costs 

for smaller farms while having a limited 

effect on larger farms.65 This difference 

is apparent in the comparison between 

dynamic total costs and static total 

costs. If the option to switch from egg 

testing into diversion were removed, the 

costs incurred would be the static total 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33073 

66This conclusion assumes that the farmer will be 

paying all of the costs of testing and diversion. 

67This assumption is based on the fact that the 

number of outbreaks in the Northeast (where 

Pennsylvania is located) has fallen to a level 

equivalent with the rest of the nation (Ref. 11). 

costs. Nonetheless, diversion costs also 

generally rise with farm size. 

Whether or not a farmer chooses to 

molt the flock also has an effect on cost. 

The annual cost of testing and diversion 

for a molted flock is greater than that for 

a non-molted flock, largely because a 

molted flock forced to divert for the life 

of the flock is expected to experience 

diversion for a longer time. In the 

dynamic model, where the farmer can 

opt out of testing, molting has a 

secondary effect of increasing eggtesting costs due to the high expected 

cost of opting out. 

For comparison with dynamic costs, 

the static cost of testing and diversion 

is included in the final column of tables 

22 and 23 of this document. As 

expected, when the producer is given 

the choice of opting out of egg testing 

the total cost of testing and diversion 

falls. The savings to the farmer are 

greatest on the smallest farms, where 

expected costs may fall by over 60 

percent.66 On the largest farms, it is less 

economical to divert, and thus the cost 

savings can be insignificant. 

To obtain the total cost of testing and 

diversion for all houses on all farms we 

multiply the cost per house in each 

category by the number of houses in 

each category and the percentage of 

houses that would be affected by the 

provision. These costs are summarized 

in tables 24 and 25 of this document. 

TABLE 24—TOTAL COST OF TESTING AND DIVERSION: ROW-BASED SAMPLING

[Thousands of dollars] 

Farm size (number of layers) Number of 

houses 

Percent 

molted 

Environmental 

testing Egg testing Diversion Total cost 

Fewer than 3,000 ..................................... 45,700 0 $6,798 $0 $271 $7,069 

3,000 to 19,999 ........................................ 2,445 28 617 2,357 839 3,813 

20,000 to 49,999 ...................................... 1,295 65 327 1,675 892 2,894 

50,000 to 99,999 ...................................... 595 86 150 886 574 1,610 

Over 100,000 ........................................... 3,024 84 763 4,476 6,687 11,926 

Farms with ≥ 3,000 layers, Initially .................................................................. 1,857 9,393 8,992 20,242 

Farms with ≥ 3,000 layers, Eventually ............................................................ 1,857 6,812 6,512 15,181 

TABLE 25—TOTAL COST OF TESTING AND DIVERSION: RANDOM SWAB SAMPLING

[Thousands of dollars] 

Farm size (number of layers) Number of 

houses 

Percent 

molted 

Environmental 

testing Egg testing Diversion Total cost 

Fewer than 3,000 ..................................... 45,700 0 $61,425 $0 $271 $61,696 

3,000 to 19,999 ........................................ 2,445 28 2,432 2,357 839 5,627 

20,000 to 49,999 ...................................... 1,295 65 1,288 1,675 892 3,855 

50,000 to 99,999 ...................................... 595 86 592 886 574 2,051 

Over 100,000 ........................................... 3,024 84 3,008 4,476 6,687 14,171 

Farms with ≥ 3,000 layers, Initially .................................................................. 7,319 9,393 8,992 25,704 

Farms with ≥ 3,000 layers, Eventually ............................................................ 7,319 7,319 7,319 21,958 

As shown in table 24 of this 

document, the estimated eventual total 

cost of testing and diversion is 

approximately $15.2 million when rowbased sampling is used. When we 

assume that a random swab method of 

environmental sampling is used, as in 

table 25 of this document, the eventual 

estimated costs increase to $22.0 

million. 

iii. Benefits of testing and diversion. 

While the primary purpose of testing is 

to obtain an indication of the 

effectiveness of the farm’s SE prevention 

measures, the testing and diversion 

program would also directly reduce SE 

infection by preventing SE-positive eggs 

from reaching consumers. To the extent 

that SE-positive eggs are diverted for 

treatment, the number of these eggs that 

reach the consumer in an untreated 

form will decline. We estimate the 

benefits from diversion using the 

experience of the states. 

The first key measure to be 

determined is the probability that the 

environment of a flock will test positive. 

We used two sources to estimate the 

current prevalence of SE-positive 

houses. Our first source is the Layers 

study (Ref. 29), which recruited 200 

farm sites to be tested across the United 

States. We also use estimates based on 

the experience of testing under quality 

assurance plans. 

The Layers study estimates that 7.1 

percent of all houses are positive for SE. 

Regionally, SE prevalence ranges from a 

low of 0 percent in the Southeast to a 

high of 17.2 percent in the Great Lakes 

region. Nonetheless, because only 200 of 

an original sample of 526 farm sites 

chose to participate in this phase of the 

study, we are hesitant to rely solely on 

this figure for SE prevalence (for 

example, those that chose to participate 

may be a biased sample who are more 

likely to have cleaner houses). 

Regional quality assurance programs 

have also collected data on SE 

prevalence on farms. As an upper 

bound, Pennsylvania experienced a 

prevalence of 40 percent in the early 

1990’s (Ref. 107). As a lower bound, we 

use 1 to 3 percent, which is the current 

prevalence of houses with SE-positive 

environments in Maine (Ref. 108). We 

believe that Pennsylvania’s current 

prevalence of 7 to 9 percent (Ref. 105) 

is a mode for the nation as a whole.67

When we put this data into a Beta-Pert 

probability distribution using a uniform 

distribution over 1 to 3 percent as the 

lower bound, 40 percent as the upper 

bound, and a uniform distribution over 

7 to 9 percent as the mode, or most 

mstockstill on DSKH9S0YB1PROD with RULES2

33074 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

68The total cost of diversion is divided by the 

cost of diversion per egg to obtain the number of 

eggs diverted. 

69The percent of shell eggs that are diverted is 

determined by dividing the number of eggs diverted 

by the total number of shell eggs produced (90,772 

million) as published in the USDA’s Chicken and 

Eggs report (Ref. 75). 

70NPIP certified or the equivalent. 

71 If monitoring costs $0.003 per layer, the total 

cost is 7,606,080 layers × $0.003 = $22,820. If 

monitoring costs $0.02 per layer, the total cost is 

7,606,080 layers × $0.02 = $152,120. The average of 

these two figures is $87,470. 

72The data for this paragraph is drawn from 

Rhorer (Ref. 110). 

73Under the NPIP program a flock only loses its 

certification as a NPIP SE-monitored flock if birds 

test positive. 

74The Layers study estimates that 38.2 percent of 

farms obtain pullets from multiple sites (Refs. 27 

and 28). 

75The following example illustrates this point. If 

a farmer obtains pullets from two different flocks, 

each of which has a 0.2 percent chance of having 

SE-positive birds, the probability that the farm will 

obtain SE-positive birds is 0.2 percent + 0.2 percent 

¥0.04 percent = 0.36 percent. 

likely value, we estimate a national 

prevalence rate of 12.3 percent. 

We consider that the Layers study and 

quality assurance program estimates are 

equally likely to be valid. Therefore, we 

put these values in a uniform 

distribution (7 to 12.3 percent) to 

estimate that an expected 9.7 percent of 

farms would currently test SE-positive. 

Based on the experience of 

Pennsylvania, we estimate that 26 

percent of houses that are 

environmentally positive also will have 

eggs that test positive (Ref. 105). 

These figures imply that 469 million 

eggs from affected farms,68 or 0.5 

percent of all shell eggs,69 would be 

diverted initially following the initial 

effective date of the provision. Of these 

eggs, we expect eggs to be positive at a 

rate of 2.75 per 10,000 (Ref. 92). 

Consequently, we estimate that an 

average of 129,000 SE-positive eggs 

would be diverted annually. Given a 

total estimated number of positive eggs 

of 1.5 million, we estimate that 

diversion would initially decrease the 

number of SE-related illnesses by 10.8 

percent. This translates to potentially 

15,300 illnesses (valued at $274.1 

million) prevented each year. Standing 

alone, the testing and diversion 

provisions would cost about $1,300 per 

illness avoided and provide about 

$261.6 million in net benefits. 

If we account for estimated reductions 

in SE prevalence due to the provisions 

pertaining to chicks and pullets, rodent 

and pest control, biosecurity, and 

cleaning and disinfecting, (a 28 percent 

reduction in prevalence when all 

provisions are in place and fully 

effective), all occurring earlier in the 

production cycle, the refrigeration 

provisions would provide a nearly 8 

percent decline in SE illness, preventing 

about 11,000 illnesses annually ((1– 

0.28) × 15,300 illnesses). Because the 

baseline SE prevalence will be reduced 

by other provisions, FDA expects that 

over 40 million less eggs will be 

diverted once the rule is fully effective. 

Furthermore, less egg tests will be 

necessary. Therefore we expect annual 

costs to decrease by $3.5 million once 

all provisions are fully effective. In 

place with the other provisions of the 

final rule, the cost of testing and 

diversion is about $1,900 per SE case 

prevented. The eventual net benefits of 

testing and diversion are about $189.6 

million per year. 

i. SE-Monitored chicks and pullets.— 

i. Chick and pullet provisions. Under 

the final rule, farms must procure 

pullets that are SE monitored or raise 

pullets under SE monitored conditions. 

Pullets to be used as layer hens must be 

raised under SE control conditions that 

prevent SE, including (1) procurement 

of chicks from SE-monitored breeder 

flocks,70 (2) cleaning and disinfection, 

and (3) environmental testing at 14 to 16 

weeks of age. If the environmental test 

is negative, the farm will not need to 

perform any additional testing of those 

birds or their environment until the 

environmental test at 40 to 45 weeks of 

age. If the 14 to 16 week environmental 

test is positive, farms must begin egg 

testing within 2 weeks of the start of egg 

laying. A positive egg test triggers 

diversion. 

ii. SE-Monitored chicks. Farms must 

procure pullets that have been raised 

from chicks from SE-monitored breeder 

flocks that meet the NPIP’s standards for 

‘‘U.S. S. Enteritidis Clean’’ status (9 CFR 

145.23(d)) or equivalent standard. 

iii. Current industry practices—SEmonitored chicks. According to the 

Layers study (Refs. 27 and 28), 94.6 

percent of farm sites representing 94.5 

percent of layers received their chicks 

from flocks that were bred under the 

NPIP program. Furthermore, NPIP has 

successfully integrated all of these 

layers into the NPIP U.S. Salmonella 

Enteritidis monitored program (Ref. 

109). 

NASS estimates that a total of 

138,292,380 chicks were sold in 1997 

(Ref. 26). If 94.5 percent of these birds 

were purchased from breeder facilities 

that are NPIP SE monitored, then 5.5 

percent (7,606,080) of chicks are not 

currently monitored for SE. 

iv. Costs of SE-monitored chicks. We 

do not have data for the cost of 

monitoring chicks for SE. However, 

Morales and McDowell (Ref. 91) 

estimated that pullets monitored for SE 

cost approximately $0.003 to $0.02 more 

per pullet. If we assume the cost 

difference is the same for chicks, the 

total increased annual cost of requiring 

SE-monitored chicks is estimated to be 

about $87,000.71 This cost would be 

borne by pullet growers but could be 

passed on to egg farms depending on 

market conditions. 

v. Benefits of SE-monitored chicks. 

The prevalence of SE in breeder flocks 

is relatively low.72 Between 1994 and 

1996 only 2 out of 847 breeder flocks 

(0.2 percent) had layers that tested 

positive for SE. For our estimate of 

benefits, we used this figure because 

breeders under the NPIP program must 

destroy their flocks when layers test 

positive.73

The 0.2 percent estimate understates 

the probability that a farm not currently 

using NPIP SE-monitored layers will 

test positive. To the extent that farmers 

obtain their chicks from multiple 

sources,74 we would expect the 

probability that a farm obtains SEpositive chicks to be greater than the 

underlying prevalence of SE in hatchery 

flocks.75

We calculated the expected benefit of 

this provision using the percentage of 

farms affected by the provision 

multiplied by the probability of a 

positive test. Because only 5.5 percent 

of farms receive birds from breeder 

flocks that are not SE monitored, the 

expected effect of this provision on SE 

contamination on the farm and, hence, 

human illness, is projected to be slightly 

greater than 0.01 percent (5.5 percent × 

0.2 percent). This percent translates into 

an expected benefit of 14 illnesses 

averted on affected farms (valued at 

about $0.3 million). This provision 

attempts to bar the introduction of SE 

onto the farm. SE can be difficult to 

control once it has been introduced onto 

a farm, but if SE is never introduced, it 

is impossible for it to spread. For this 

reason, effective SE control in chick 

populations has been cited as critical. 

vi. Cleaning and disinfecting, and 

environmental testing in pullet houses. 

To ensure that pullets about to begin the 

laying cycle are SE free, egg producers 

must only use pullets whose 

environments were tested for SE when 

the pullets were 14 to 16 weeks old. 

There are two consequences to a 

positive environmental test. First, an egg 

producer who uses those pullets must 

begin egg testing on the positive flock 

within 2 weeks of the start of egg laying. 

Second, the pullet house must have all 

manure removed, and be cleaned and 

disinfected before a new flock is added. 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33075 

76For a detailed breakdown of per house 

environmental testing costs, see section V.F.1.e of 

this document. 

77For a detailed discussion of cleaning and 

disinfecting costs, see previous section on cleaning 

and disinfecting costs for layer houses. 

78The choice on whether to destroy the flock or 

move it to the layer house is also included in the 

pullet section of the testing and diversion model. 

However, except for very small flocks not covered 

by this rule, the cost of flock destruction, including 

the cost of disposal, bird replacement costs, and lost 

production, is much greater than the costs of egg 

testing and diversion. Therefore, FDA believes 

nearly all farms covered by this rule will choose to 

test eggs rather than destroying the flock upon and 

environmental positive in the layer flock. 

vii. Current industry practices— 

Cleaning and disinfecting, and 

environmental testing in pullet houses. 

FDA does not have detailed information 

on SE monitoring practices in pullet 

houses. However, comments from state 

run programs and industry stated that 

pullet houses are typically subject to the 

same provisions as layer houses under 

state Egg Quality Assurance Programs 

(EQAPs) and other programs for egg 

farmers. Therefore, FDA estimates that 

pullet houses will be in compliance 

with these provisions at the same rate as 

estimated for layer houses in previous 

sections of this analysis. 

FDA does not have specific data on 

the number of pullets and pullet houses 

there are in the United States. However, 

multiple comments stated that there are 

roughly one-third as many pullets as 

there are layers at any given time. 

Further, there are roughly one-third as 

many pullet houses as there are layer 

houses. FDA therefore estimates that 

2,453 pullet houses (7,359 layer houses 

covered/3) will be covered under this 

provision. Some of the pullet houses are 

located onsite at layer farms and others 

are located on pullet growing facilities. 

viii. Costs of environmental testing in 

pullet houses. Because the requirements 

for tests will be the same for both pullet 

and layer houses, per house costs are 

calculated the same way. As in layer 

houses, the cost of routine 

environmental testing in pullet houses 

depends on how many samples are 

tested, the labor cost of collecting the 

samples, the cost of shipping the 

samples to a laboratory, and the 

laboratory cost per sample tested.76 The 

total annual cost of environmental 

testing in pullet houses is estimated to 

be $1.3 million. 

ix. Costs of cleaning and disinfecting 

in pullet houses. The rule requires a 

similar cleaning and disinfecting 

routine for both pullet houses and layer 

houses. Therefore, the per house costs 

and the number of houses affected are 

calculated similarly to the costs for 

cleaning and disinfecting a layer house. 

We calculate the number of houses 

affected as the product of the percent of 

houses not using a practice (100 minus 

the percent using the practice in Table 

14 of this document), the probability of 

a positive flock, and the number of 

pullet houses.77 The total annual cost of 

cleaning and disinfecting pullet houses 

that test environmentally positive is 

$226,000. 

x. Follow-up egg testing and 

diversion. Upon an environmental 

positive, farms must begin egg testing on 

the positive flock within 2 weeks of the 

start of egg laying. Farms that test 

positive for SE in their eggs would be 

required to divert their eggs for 

treatment until they are able to show via 

testing that SE is not present in the eggs 

produced in the infected house. 

xi. Current Industry Practices— 

Follow-up egg testing and diversion. 

Comments to the proposed rule suggest 

that farms do not typically test eggs 

when a pullet house tests positive for 

SE. FDA therefore estimates that all 

pullet flocks in houses that test 

environmentally positive will be 

affected by this provision. 

xii. Cost of egg testing and diversion. 

Total costs are estimated once again 

using the testing and diversion model 

described in section V.F.1.l of this 

document. The model takes into 

account prevalence of SE in the 

environment and the farmer’s decision 

between egg testing and immediate 

diversion to minimize costs.78 The 

prevalence of SE in pullet flocks is 

relatively low compared to layer flocks. 

Data gathered from comments, citing 

PEQAP and CEQAP databases, show 

that the environmental prevalence of SE 

in pullet houses ranges from 0 to 1.5 

percent. We use a uniform distribution 

bound between 0 and 1.5 percent to 

estimate that 0.75 percent of pullet 

houses would currently test 

environmentally positive. 

The per test cost of egg testing is 

discussed in detail in section V.F.1.f of 

this document. The cost of diverted eggs 

is discussed in detail in section V.F.1.g 

of this document. To summarize, we 

find the weighted average cost of 

diversion to be between $0.13 and $0.23 

per dozen eggs. If there is an additional 

discount for those eggs with SE, the 

total cost could rise as high as $0.33 per 

dozen eggs. 

To obtain the total cost of testing and 

diversion for all houses on all farms, we 

multiplied the cost per house in each 

category by the number of houses in 

each category and the percentage of 

houses that would be affected by the 

provision. These costs are summarized 

in tables 26 and 27 of this document. 

TABLE 26—TOTAL COST OF TESTING IN PULLET HOUSES, FOLLOW-UP EGG TESTING, AND DIVERSION: ROW-BASED

SAMPLING

[Thousands of dollars] 

Farm size (number of layers) Number of 

houses 

Environmental 

testing Egg testing Diversion Total cost 

3,000 to 19,999 .................................................................... 815 $58 $53 $50 $161 

20,000 to 49,999 .................................................................. 432 31 47 18 96 

50,000 to 99,999 .................................................................. 198 14 22 12 48 

Over 100,000 ....................................................................... 1,008 72 111 144 326 

Farms with ≥ 3,000 layers ............................................................................... 174 233 225 632 

mstockstill on DSKH9S0YB1PROD with RULES2

33076 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

79These figures are correct if the chick 

procurement provisions and the pullet provisions 

are put in place simultaneously, so the costs and 

benefits of the pullet provisions are net the effect 

of the change in SE prevalence due to the chick 

procurement provision. Because the chick 

procurement provisions alone only reduce 

prevalence by about 0.01 percent, the difference, if 

calculated separately, is less than 1 illness per year. 

TABLE 27—TOTAL COST OF TESTING IN PULLET HOUSES, FOLLOW-UP EGG TESTING, AND DIVERSION: RANDOM SWAB

SAMPLING

[Thousands of dollars] 

Farm size (number of layers) Number of 

houses 

Environmental 

testing Egg testing Diversion Total cost 

3,000 to 19,999 .................................................................... 815 $811 $53 $50 $914 

20,000 to 49,999 .................................................................. 432 429 47 18 495 

50,000 to 99,999 .................................................................. 198 197 22 12 231 

Over 100,000 ....................................................................... 1,008 1,003 111 144 1,258 

Farms with ≥ 3,000 layers ............................................................................... 2,440 233 225 2,897 

Table 26 of this document shows that 

the estimated eventual total cost of 

testing in the pullet house and diversion 

is approximately $0.6 million when 

row-based sampling is used. If a random 

swab method of environmental 

sampling is used, as in table 27 of this 

document, the estimated costs increase 

to $2.9 million. 

xiii. Benefits of SE-monitored chicks 

and pullets. While the primary purpose 

of an SE monitoring program is to 

ensure that pullets entering layer houses 

producing table eggs are SE free, testing 

and diversion will also directly reduce 

SE infection by preventing SE-positive 

eggs from reaching consumers. 

Furthermore, cleaning and disinfecting 

a house after an environmental positive 

will help ensure SE does not spread and 

infect current and future flocks on the 

same farm. 

As stated in the previous section, FDA 

estimates that the national prevalence of 

SE in pullet houses varies uniformly 

from 0 to 1.5 percent, for an average of 

0.75 percent. As with layer houses, we 

estimate that 26 percent of houses that 

are environmentally positive also will 

have eggs that test positive (Ref. 105). 

These figures imply that 12 million 

eggs from affected farms would be 

diverted due to environmental testing in 

the pullet house and follow-up eggs 

testing and diversion. We expect eggs to 

be positive at a rate of 2.75 per 10,000 

in an SE-positive house (Ref. 92). 

Therefore, we estimate that an average 

of 3,200 SE-positive eggs would be 

diverted annually. Given a total 

estimated number of positive eggs of 1.5 

million, we estimate that diversion 

would decrease the number of SErelated illnesses by 0.2 percent. This 

translates to potentially 306 illnesses 

(valued at about $5.5 million) prevented 

annually. 

The chick and pullet program will 

potentially prevent 320 illnesses per 

year, for a total benefit of about $5.7 

million. The total annual cost per illness 

of the program is $6,500. The annual net 

benefits for the chick and pullet 

provisions are $3.6 million.79

j. Summary of costs and benefits of 

on-farm SE prevention measures. Table 

28 of this document summarizes the 

costs and benefits of the on-farm SE 

prevention measures. In this paragraph 

we emphasize some of the key features 

of these summary estimates. First, 

because the effectiveness of rodent and 

other pest control is strongly linked to 

biosecurity and cleaning and 

disinfecting practices, we estimated the 

benefits of these provisions jointly. 

Second, we derive benefits without 

taking into account the interdependence 

of all provisions. Therefore, table 28 

reflects the incremental effects of each 

provision starting from a baseline of no 

new regulation. The benefits reported 

for the provisions in table 28 can be 

added together, mixed and matched, to 

achieve a rough upper bound estimate 

of the effectiveness of different 

combinations of provisions. Because 

some of the provisions are substitutes in 

benefits, particularly diversion and 

rodent and other pest control, the actual 

benefits of combinations of provisions, 

as well as the final rule, will be 

somewhat smaller than what is reflected 

in table 28. A rough lower bound 

estimate of the incremental effect of 

each provision when combined with 

another is shown in table 33 of this 

document. 

TABLE 28—SUMMARY OF ANNUAL COSTS AND BENEFITS OF ON-FARM MEASURES

Costs (millions 

of dollars) 

Cases of SE 

averted 

(eventual) 

Cost per case 

of SE averted 

Total benefits 

(millions of 

dollars) 

Net benefits 

(millions of 

dollars) 

Rodent and Pest Control 4 ................................................. $21 .4 38,954 $529 $697.3 $675.9 

Biosecurity .......................................................................... .......................... _ _1 _ _1 _ _1 _ _1

Cleaning and Disinfecting .................................................. 0 .3 _ _1 _ _1 _ _1 _ _1

Refrigeration ....................................................................... 20 .2 44,727 451 800.6 780.4 

Environmental Tests (average) .......................................... 4 .6 _ _2, 3 _ _2, 3 _ _2, 3 _ _2, 3

Egg Tests ........................................................................... 9 .7 _ _2 _ _2 _ _2 _ _2

Diversion ............................................................................ 12 .5 15,312 1,343 274.1 261.6 

SE Monitored Chicks and Pullets ...................................... 2 .1 320 6,494 5.7 3.6 

1Estimated rodent control benefits also include benefits from biosecurity and cleaning and disinfecting. 

2The benefits from all elements of the testing and diversion program are reported jointly under diversion. 

3The environmental testing cost number reported is the average of the costs of the random swab and row based sampling methods. 

4This calculation nets out feed savings. 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33077 

80The low estimate is likely to underreport the 

number of mills producing layer feed because most 

firms did not report to Dun’s Market Identifiers 

what kinds of feeds they produced. 

81This is the cost of an Association of Official 

Analytical Chemists test for Salmonella genus and 

a serotype test at Silliker Laboratories (Ref. 99). One 

option that mills have is to initially test for the 

genus of Salmonella ($28.00) and then, if the test 

is positive, follow through with a test for the 

serotype enteritidis ($33.00). We assume that mills 

will not choose this option because Salmonella 

positive feed is considered adulterated and firms 

will not want to test to see if their feed is 

adulterated unless mandated to do so by FDA. 

82The cost of shipping a 2-pound package 

overnight in the United States ranges from $21.15 

to $39.25. These figures include a $6 pickup charge. 

The average charge is estimated to be $30.20 (Ref. 

98). 

83This is based on a per layer cost of $0.035 for 

vaccine plus $0.10 for labor (Ref. 115), adjusted for 

inflation. 

84These costs are recalculated in terms of year 

2005 constant dollars using the GDP deflator. 

k. Other on-farm prevention measures 

considered. This section analyzes the 

costs and benefits of two prevention 

measures, SE-monitored feed, and flock 

vaccination, considered by the FDA, but 

not required by the final rule. 

i. SE-negative feed provisions. We 

considered requiring the use of feed that 

meets the standards for SE-negative 

feed, as defined by FDA’s Center for 

Veterinary Medicine (CVM). CVM 

defines SE-negative as 10 subsamples 

that are negative for SE (measured using 

the BAM method) collected for a lot of 

feed (60 FR 50098, September 28, 1995). 

Composite samples may be used to 

reduce testing costs. We received 

comments that SE-negative feed is not 

currently available commercially. 

ii. Current industry practices—SE 

monitoring of feed. The layer industry 

obtains feed from both independent feed 

mills and from egg farmers that produce 

feed in their own mills. The Economic 

Research Service report on the feed 

manufacturing industry estimates that 

egg producers operated a total of 144 

feed mills in 1984 (Ref. 111). In the 

absence of more recent data, we assume 

that they operated the same number in 

2006. To isolate the number of 

independent feed mills operating in the 

United States, we used the July 2000 

version of Dun’s Market Identifiers (Ref. 

112). Using this database, we were able 

to isolate 210 mills that primarily 

produce poultry and chicken feeds. This 

figure is our low estimate of the number 

of independent feed mills producing 

layer feed. For a high estimate, we 

assume that all 2,459 establishments 

that Dun’s Market Identifiers reports as 

producers of animal feed produce layer 

feed.80 This estimate is similar to the 

1984 Economic Research Service 

estimate of 2,432 primary feed 

manufacturers. Assuming that the true 

number of feed mills producing layer 

feed is uniformly distributed between 

the low and high estimates, we estimate 

that approximately 1,300 feed mills 

produce layer feed. 

iii. Costs of monitoring feed for SE. 

The cost of this provision to a feed mill 

would be the sum of the labor, 

laboratory, and shipping costs for 

testing, multiplied by the number of lots 

tested. In addition, SE-positive feed 

would have to be treated or destroyed. 

The laboratory cost per test has been 

estimated to be approximately $61.00 

per sample.81 In addition, we estimate 

that the collection and preparation of 

each subsample will take approximately 

10 minutes. Given an hourly wage of 

$15.51 for production inspectors at 

grain and feed mills (Ref. 113), plus 50 

percent to include overhead costs, we 

estimate the cost of labor to be $38.78 

($23.27 x 1.667 hours) for each full 

sample. The cost of shipping each 

sample to a lab is estimated to be 

$30.20.82 The total cost per composite 

sample is about $130 ($61.00 + $38.78 

+ $30.20). 

Samples must be taken for each lot of 

feed. We expect that, because of limited 

storage space for finished feed, a lot of 

feed will not exceed 3 days worth of 

production for most large mills. For 

some small mills, however, a lot may be 

a week’s worth of production; for some 

large mills a lot may be a day’s worth 

of production. Given these parameters, 

we assume that the frequency of feed 

testing will be distributed uniformly 

between once a week and five times a 

week with a mean frequency of three 

times a week. Consequently, the 

expected annual cost of testing for a 

typical feed mill is calculated to be 

approximately $20,300 ($130 per 

sample × 52 weeks × 3 times a week). 

The cost of testing all of the 

approximately 1,450 entities that 

produce feed is estimated to be $29.4 

million. If these costs are passed on to 

farmers at a rate proportional to the 

number of layers on the farm, the total 

cost to affected farms would be $29.2 

million. 

In the event of a positive feed test, 

feed mills would have to treat or destroy 

the suspect feed. It is also likely that the 

mill would take action to address the 

problem at its source. Furthermore, we 

assume that the mill would recall this 

feed and treat or dispose of it, which 

could be very costly. 

iv. Benefits of monitoring feed for SE. 

Feed contaminated with SE is 

theoretically also a vehicle for the 

introduction of SE on the farm. Testing 

for SE in finished layer feed at mills has 

almost never yielded positive results. 

However, SE has been isolated in 

ingredients at feed mills so SE 

contamination of feed is a potential 

problem (Ref. 114). 

If finished feed is contaminated with 

SE, the consequences for human health 

are potentially large. A feed mill that 

does not test feed for SE and becomes 

contaminated with SE could deliver a 

large number of shipments of 

contaminated feed before the problem is 

uncovered. The potential financial 

consequences to the farms using the 

feed include costs due to increased 

cleaning and disinfecting, egg testing, 

and diversion of eggs. Also, there likely 

would be adverse health effects from the 

consumption of SE-positive eggs. 

v. Vaccination provision. Inoculating 

layers with vaccines is another potential 

way of preventing the growth of SE in 

layers. FDA could mandate that all 

layers be inoculated against SE. 

vi. Current industry practices; 

vaccination of flocks. The Layers study 

(Refs. 27 and 28) estimates that at least 

14.6 percent of all layers on farms with 

3,000 or more layers are vaccinated 

against SE. 

vii. Cost of vaccinating flocks. 

Estimation of vaccination costs range 

from approximately $0.13 per layer (Ref. 

115) to $0.15 per layer 83 for an 

inoculation. The average of these 

estimates is an expected vaccination 

cost of $0.14 per layer for an 

inoculation.84 Given 272.1 million 

layers on larger farms and 1.4 million 

layers on smaller farms, we expect that 

this provision would result in 232.2 

million new vaccinations on larger 

farms and 1.4 million new vaccinations 

on smaller farms. Consequently, the cost 

of vaccination on farms with at least 

3,000 layers would be $31.2 million. 

viii. Benefits of vaccinating flocks. 

While vaccines have shown some 

promise in the lab, there is insufficient 

evidence from field trials about their 

efficacy to estimate any benefit from 

their use. 

In a controlled environment vaccines 

were found to reduce incidence of 

intestinal colonization and mean 

number of SE shed in the feces. Further, 

in a controlled setting, the same 

vaccines have been shown to reduce the 

number of SE-positive eggs laid when 

compared to non-vaccinated controls 

(Ref. 116). Hens were vaccinated at 38 

weeks of age followed by a booster 4 

weeks later and subsequently 

challenged intravaginally 2 weeks later. 

Despite the high level of SE recovery 

from cloacal and vaginal swabs of 

vaccinated and unvaccinated hens, 

vaccination resulted in a significant 

mstockstill on DSKH9S0YB1PROD with RULES2

33078 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

85We do not have data on participation by farms 

with fewer than 3,000 layers. We assume that none 

of these farms are currently members of recognized 

quality assurance programs. 

decrease in the number of SE-positive 

eggs when compared to non-vaccinated 

controls (19 percent versus 37 percent, 

respectively). The degree of protection 

was only partial though, because more 

than half the population was still 

shedding SE at a high rate (Ref. 116). 

However, the primary test for efficacy 

of a vaccine is a field trial, and it is 

common for vaccines to be effective in 

the laboratory but fail to perform up to 

expectations under field conditions. In 

a series of Pennsylvania field studies, 

despite the use of SE vaccine, 63.6 

percent of the houses had SE-positive 

environmental cultures and 100 percent 

of the flocks had SE organ positive 

birds. With regard to all parameters 

tested, there were no statistical 

differences between vaccinated or 

unvaccinated controls—indicating the 

ineffectiveness of either commercially 

available bacterins or autogenously 

manufactured SE vaccines (Ref. 117). 

Lab results show promise for vaccines to 

become a useful tool in fighting SE 

transmission to eggs in the future. 

However, currently, there is no vaccine 

that has been shown to be efficacious in 

the field. Therefore, FDA is not 

requiring vaccination in this final rule. 

2. Administrative Measures 

a. Plan design and recordkeeping.—i. 

Plan design and recordkeeping 

provisions. Each farm site with 3,000 or 

more layers that sells raw eggs to the 

table egg market, other than directly to 

the consumer, and does not have the 

eggs treated, must design and monitor 

an SE prevention plan. This prevention 

plan includes all measures the farm is 

taking to prevent SE in its flock. The 

following information includes 

potential components of the plan: (1) 

Chicks and pullets, (2) biosecurity, (3) 

rodent and other pest control, (4) 

cleaning and disinfecting, (5) 

refrigeration, and (6) testing and 

diversion. Records are also required for 

review and of modifications of the SE 

prevention plan and corrective actions 

taken. Farms are required to have a 

trained or experienced supervisor that 

would be responsible for overseeing the 

plan. 

ii. Current industry practices; plan 

design and recordkeeping. We assume 

that those farms that are currently 

operating according to recognized 

industry or State quality assurance 

plans are already largely in compliance 

with the plan design and recordkeeping 

provisions discussed in this section, and 

therefore would not experience 

additional costs to comply with record 

keeping provisions. Using data from the 

Layers study (Refs. 27 and 28), we find 

that 59 percent of farms with more than 

50,000 layers are currently members of 

State or industry quality assurance 

plans. Fewer than 8 percent of farms 

with fewer than 50,000 layers are 

currently members of quality assurance 

plans.85 The estimated number of farms 

and houses affected by plan design and 

recordkeeping provisions is shown in 

table 29 of this document. 

TABLE 29—FARMS AFFECTED BY PLAN DESIGN AND RECORDKEEPING PROVISIONS

Farm size (number of layers) Number of 

farms 

Houses per 

farm 

Percent of 

farms on a 

quality assurance program 

Farms affected 

by the rule 

Houses 

affected by the 

rule 

3,000 to 19,999 .................................................................... 1,746 1.4 4.9 1,661 2,325 

20,000 to 49,999 .................................................................. 925 1.4 27.7 669 936 

50,000 to 99,999 .................................................................. 248 2.4 58 104 250 

100,000 or more .................................................................. 409 7.4 59.7 165 1,219 

All farms ............................................................................... 3,328 1.4 21.9 2,599 4,730 

As table 29 of this document shows, 

we expect that a total of 2,598 farm sites 

with 4,730 poultry houses would be 

affected by plan design and 

recordkeeping provisions. 

iii. Plan design costs. The per 

provision plan design cost is calculated 

in table 30 of this document. Because 

information on the costs of designing 

the SE prevention plan for eggs is not 

available, we base these costs on 

assumptions used to analyze the design 

of HACCP programs (63 FR 24253 at 

24275 to 24285, May 1, 1998). In 

particular, we assume that each plan 

component will take approximately 20 

labor hours to design. We add 50 

percent to the cost of labor for designing 

the plan to account for overhead. The 

cost of designing a plan with one 

component is expected to be $560 

($27.98 × 20) (Ref. 89). Amortized over 

10 years at 7 percent, the total cost of 

plan design will be about $207,000 ($80 

per farm) per provision. Amortized over 

10 years at 3 percent, the total cost of 

plan design for all farms will be about 

$171,000 ($66 per farm) per provision. 

For six provisions (rodent and other 

pest control, biosecurity, cleaning and 

disinfecting, chick and pullet 

procurement, refrigeration, and testing 

and diversion), the total cost of the plan 

design would be $1.2 million when 

amortized over 10 years at 7 percent 

($1.0 million when amortized over 10 

years at 3 percent). 

TABLE 30—COST OF PLAN DESIGN PER PROVISION

Farm size (number of layers) 

Farms affected 

by the 

proposal 

Cost per farm 

Total costs 

(in thousands 

of dollars) 

3,000 to 19,999 ............................................................................................................................ 1,661 $560 $930 

20,000 to 49,999 .......................................................................................................................... 669 560 375 

50,000 to 99,999 .......................................................................................................................... 104 560 58 

100,000 or more .......................................................................................................................... 165 560 92 

All farms ....................................................................................................................................... 2,599 560 1,455 

Amortized over 10 years at 7% ................................................................................................... ........................ ........................ 207 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33079 

86 Including stamping documents accompanying 

diverted egg shipments. The cost of the actual 

rubber stamp is assumed to be negligible. 

87The cost of environmental tests to pullet houses 

is discussed in a separate paragraph. 

88This may tend to overstate costs because farms 

with 3,000 layers or more have on average more 

than one house per farm. Some of the 459 (0.097 

× 4,730 houses) houses expected to test positive 

initially could be located on the same farm and test 

positive at roughly the same time as one or more 

other SE-positive houses. This would require only 

one review and modification of the entire plan. 

iv. Recordkeeping costs. We assume 

that the time required for recordkeeping 

is roughly equivalent to the time 

necessary to monitor and document the 

food safety provisions of a HACCP plan 

(63 FR 24253 at 24275 to 24286). 

Because the HACCP time estimate upon 

which we are basing our estimate 

involves multiple control points and 

monitoring, this assumption tends to 

overstate the cost of recordkeeping for a 

provision of this final rule. In particular, 

we expect that, for each house affected, 

recordkeeping will take one half hour 

per week per required provision for 

provisions that would require weekly or 

daily monitoring. Records kept for 

biosecurity measures, rodent and other 

pest control and refrigeration are 

assumed to be recorded on a weekly 

basis. 

The cost of weekly recordkeeping for 

biosecurity and rodent and other pest 

control, assuming $18.65 an hour for 

labor, plus 50 percent to reflect 

overhead costs, would be $727 ($27.98 

× 0.5 hours × 52 weeks) per record, per 

house. The total annual cost for all 

houses for these two records is $3.4 

million ($27.98 × 0.5 hours × 52 weeks 

× 4,730 houses). Refrigeration records, 

collected weekly on a farm-by-farm 

basis, rather than by-house, will cost 

$1.9 million annually ($27.98 × 0.5 

hours × 52 weeks × 2,598 farms). 

Environmental and egg sampling and 

testing, diversion and treatment 

records 86 together have daily, weekly, 

and monthly aspects, in the event of an 

environmental positive. In the case of an 

environmental positive, the records’ 

annual cost is assumed to be similar to 

the cost estimated for the weekly 

records discussed previously, $727 per 

record, per house. However, as 

discussed previously in this document 

FDA estimated that 9.7 percent of 

houses will test environmentally 

positive initially and 7.0 percent will 

test positive after the provisions of this 

rule have taken effect. Additionally, 

farms would have to keep records of egg 

testing, diversion, and treatment if they 

receive pullets from a house that has 

tested environmentally positive; FDA 

estimated that pullet houses will test 

positive 0.75 percent of the time. The 

cost for houses that test negative would 

be similar to keeping an annual 

record 87; at a half hour per record the 

annual cost would be $14 per record, 

per house. The initial total annual cost 

of the environmental and egg testing, 

diversion, and treatment records is $0.4 

million (((0.097 × $727) + (0.903 × $14) 

+ (0.0075 × $727)) × 4,730 houses). The 

eventual total expected cost of the 

environmental and egg testing, 

diversion, and treatment records is 

about $0.3 million (((0.070 × $727) + 

(0.930 × $14) + (0.0075 × $727)) × 4,730 

houses). 

Records of chick and pullet 

procurement and records of cleaning 

and disinfection will take one half hour 

each, per year, per house. At a half hour 

per record, the annual cost will be $14 

per record, per house. These two 

records will cost farms $0.1 million (2 

records × $14 × 4,730 houses). 

In the event of an environmental 

positive, the farm must review and 

modify as necessary its plan design. 

FDA estimates this will take roughly 

half the time (10 hours per provision) 

than it took to originally draft the plan. 

To calculate how many farms will need 

to review their plans, the estimation of 

9.7 percent of houses testing positive 

initially and 7.0 percent of houses 

testing positive eventually is applied.88

The initial total expected cost of the 

plan design review and modification 

records is $0.8 million (0.097 × ($280 × 

6 provisions) × 4,730 houses). The 

eventual total expected cost of the plan 

design review and modification records 

is $0.6 million (0.070 × ($280 × 6 

provisions) × 4,730 houses). 

We assume that pullet growers will 

keep a record of each environmental test 

performed on a per house, per flock 

basis. Each house can hold 

approximately 3 flocks per year and, as 

comments to proposed rule state, there 

are roughly one third as many pullet 

houses as there are layer houses. At a 

half hour per record, the annual cost 

would be $42 per pullet house ($14 × 3 

records annually). The total annual 

expected cost of environmental testing 

records for pullet houses is $66,200 ($42 

× 1,577 houses). 

The calculation of the initial and 

eventual costs of $10.2 million and $9.8 

million, respectively, for all records for 

affected farms is shown in table 31 of 

this document. 

TABLE 31—TOTAL COST OF ON-FARM RECORDKEEPING

Record kept 

Total cost 

(in thousands of dollars) 

Initial Eventual 

Chick and pullet procurement .......................................................................................................................... $66 $66 

Rodent and pest control .................................................................................................................................. 3,440 3,440 

Biosecurity ....................................................................................................................................................... 3,440 3,440 

Cleaning and disinfection ................................................................................................................................ 66 66 

Refrigeration .................................................................................................................................................... 1,890 1,890 

Testing, diversion, and treatment .................................................................................................................... 419 328 

Design plan review and modification ............................................................................................................... 770 556 

Environmental testing for pullet houses .......................................................................................................... 66 22 

Total .......................................................................................................................................................... 10,158 9,809 

b. Training. The person responsible 

for overseeing the SE prevention 

measures will have to be trained or have 

equivalent job experience. Under the 

final rule, one person may oversee the 

SE prevention measures on more than 

one farm. Alternatively, more than one 

person may be trained to oversee a 

single farm. The latter is likely on some 

of the larger operations. FDA assumes 

that, on average, one person will need 

to be trained to oversee preventions 

measures on each farm covered by the 

rule. A training course would last 2 to 

3 days. The cost of taking a course 

mstockstill on DSKH9S0YB1PROD with RULES2

33080 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

89The cost of a similar 3-day HACCP training 

course for egg processors was advertised to be $450 

to $550 in 2000 (Ref. 119) and was offered through 

the U.S. Poultry and Egg Association. It is no longer 

offered. The course sited above is a course geared 

towards meat processors. In a conversation with the 

International HACCP Alliance, FDA confirmed that 

a similar course geared towards egg farmers, if 

offered today, would cost roughly the same amount 

($600 to $650). 

90The number of hours is estimated as 24 hours 

of class time plus 8 hours of travel time. 

91Farms are not required to register under FDA’s 

Registration of Food Facilities regulation (68 FR 

5378 at 5392 to 5403). If a farm also has a packing 

or processing facility, then only the packing or 

processing facility is required to register under the 

registration rule (68 FR 5378 at 5392 to 5403). If the 

information that would be provided by an egg 

producer during registration has already been 

provided under the registration regulation, the 

producer may submit its registration number rather 

than registering again. 

consists of tuition, the cost of the 

supervisor’s labor while in class 

(opportunity cost), and any travel 

related expenditures that may be 

incurred. 

The cost of a recent 3-day HACCP 

training course was advertised to be 

$600 to $650 (Ref. 118).89 The cost of 

the supervisor’s labor is estimated to be 

$895 (32 hours 90 × $27.98 an hour). 

Travel expenditures consist of 

transportation, hotel, and miscellaneous 

expenses. These costs range from 

insignificant (reimbursement for 

minimal mileage) to $1,000 ($400 airfare 

+ $400 hotel expenses + $200 expenses). 

We believe that most training will be 

relatively close to where producers are 

located. In addition, training is likely to 

take place in rural areas where lodging 

is relatively inexpensive. Therefore, we 

estimate that the most likely travel 

expense will be roughly $200 to $300. 

We use a Beta-Pert distribution to 

estimate that the expected cost of travel 

is $330. 

The average cost of attending a 

training class is estimated to be $1,850 

($625 tuition + $895 labor + $330). Not 

all producers will have to send a 

supervisor to a class. The 12 percent of 

large farms with established quality 

assurance programs will have a trained 

supervisor already running the program. 

Of the remaining farms, some have 

experienced personnel who do not need 

formal training. Without better 

information, we assume that the true 

number of establishments that will need 

to formally train a supervisor will be 

uniformly distributed between 0 and 

100 percent for all sizes of farms. 

Therefore, we expect 1,299 farms with 

3,000 or more layers to incur training 

expenses. This cost will have to be 

incurred only at the outset of the 

program, and then again when a farm 

loses a trained supervisor. The total cost 

for all farms training a supervisor every 

10 years, whether amortized at 7 percent 

or 3 percent, is estimated to be $0.3 

million. 

c. Registration.—i. Registration 

provision. Under this provision, all 

farms covered by any part of the rule are 

required to register with FDA. 

Registration of all producers covered by 

any of the SE prevention measures will 

enable more efficient inspection, as well 

as better management and oversight of 

a shell egg recall. 

ii. Current industry practices— 

registration. FDA assumes that no farms 

are currently registered with the FDA.91

Therefore, this provision will affect all 

farms with 3,000 or more layers. 

iii. Registration costs. We assume that 

the time required for registration under 

this rule is roughly equivalent to the 

time necessary to register a domestic 

facility under the Registration of Food 

Facilities under the Public Health 

Security and Bioterrorism Preparedness 

and Response Act of 2002 rule (68 FR 

5378 at 5392 to 5403, February 3, 2003) 

(BT registration rule). In particular, FDA 

expects that it will take farms with 

access to the Internet, either through 

their own computer, or through a friend, 

public library, or internet cafe ́, 2 hours 

to research the requirements, fill out the 

form and send it in. We expect that for 

farms without easy access to the 

Internet, due to increased time for 

research and to send the documents, the 

process will take 3 hours. 

FDA assumes the number of farms 

with easy access to the Internet is 

similar to the number used in the BT 

Registration Rule (68 FR 5378 at 5392 to 

5403), that is, 71 percent of farms. This 

number has two potential biases. The 

first is that the 71 percent of farms used 

in the BT Registration Rule is related to 

small businesses in general, not 

specifically to farms. Because farms are 

typically rural, whereas small business 

in general may be rural or urban, the 

estimate for all small businesses may 

overstate the Internet access for farmers. 

That being said, FDA believes that the 

small business estimate is a good proxy 

for farms, and it is the most detailed 

data available. The second bias comes 

from the fact that the survey data used 

in the BT regulations is relevant to the 

year 2002. Internet access has certainly 

increased since that particular data was 

published. 

We estimate that approximately 3,328 

farms with 3,000 or more layers are 

covered by a registration provision. We 

assume the value of labor is $18.65 per 

hour, plus 50 percent for overhead 

costs, for a total cost of $55.95 per 

producer with Internet access and 

$83.93 for producers with no Internet 

access. The total one-time cost to the 

industry is $0.2 million (($27.98 × 3,328 

farms) × ((0.71 × 2) + (0.29 × 3))). 

Amortized at 7 percent, the annual cost 

of one-time registration is $30,400. 

Amortized at 3 percent, the annual cost 

of registration is expected to be $25,000. 

d. Summary of costs and benefits of 

administrative provisions. The costs of 

administrative provisions are 

summarized in table 32 of this 

document. These provisions do not have 

independently quantifiable benefits. 

The provisions would be likely to 

generate benefits because administrative 

provisions are essential for farmers to 

effectively implement SE prevention 

measures. Further, the administrative 

measures are critical for FDA to be able 

to ensure compliance, and thus for the 

benefits of the SE prevention measures 

to be realized. 

TABLE 32—ANNUAL COST OF

ADMINISTRATIVE PROVISIONS

[Thousands of dollars] 

Plan design ........................... $1,243 

Recordkeeping ...................... 9,809 

Training ................................. 343 

Registration ........................... 30 

Total ............................... 11,425 

G. Summary of Benefits and Costs of the 

Final Rule 

In the previous section of this 

document, we described and estimated 

the benefits and costs of all of the SE 

prevention measures we have 

considered. Here, we summarize and 

estimate the benefits and costs of the 

final rule. 

1. Coverage 

All of the on-farm SE prevention 

measures in the final rule apply to farms 

with at least 3,000 layers that do not 

have all of their eggs treated, do not sell 

all of their eggs directly to consumers, 

and produce shell eggs for the table 

market. Only the refrigeration and 

registration requirements apply to farms 

whose eggs all receive a treatment to 

destroy SE. Only the refrigeration 

requirement applies to persons who 

transport and supply shell eggs for shell 

egg processing or egg products facilities. 

2. Provisions of the Final Rule 

a. On-Farm preventive controls. Many 

of the on-farm preventive controls 

examined previously are included in 

this final rule. Provisions included in 

the final rule are rodent and other pest 

control, biosecurity, cleaning and 

disinfecting, and procurement of chicks 

and pullets from SE-monitored breeders. 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33081 

92QALDs were converted back to QALYs for each 

possible outcome by multiplying by 365. Annual 

QALYs lost for a case of chronic arthritis (0.14) and 

for death (1.0) were summed and subsequently 

discounted (at 3 percent and 7 percent) over 50 

years. 

b. On-Farm SE prevention measures. 

The rule also contains most of the onfarm SE prevention measures described 

previously. In particular, the 

refrigeration, sampling, testing, and 

diversion provisions are included in the 

final rule. 

c. Administrative provisions. All of 

the administrative provisions discussed 

in this analysis are required by the final 

rule. In particular, the rule requires that 

producers maintain records for chick 

and pullet procurement, biosecurity, 

rodent and other pest control, cleaning 

and disinfecting, refrigeration, and 

testing and diversion. 

Farms are required to use SE 

prevention measures and are required to 

have a written SE prevention plan. Each 

farm is required to have a trained or 

otherwise qualified individual to 

administer the prevention measures 

required by the final rule. 

Furthermore, all farms covered by any 

part of the rule are required to register 

with FDA. 

3. Summary of Costs and Benefits 

In table 33 of this document, we 

summarize the costs and illnesses 

averted of this final rule and its 

provisions. After the on-farm 

adjustment phase (up to 4 years), we 

expect costs to fall and illnesses averted 

to increase. Eventually, the final rule 

will prevent approximately 79,170 cases 

of SE per year at a cost of $1,000 per 

illness averted. This value is less than 

the lowest estimate of the expected 

value of an SE related illness, shown in 

table 5 of this document. Furthermore, 

table 34 shows the cost per estimated 

QALY saved. Assuming a 7-percent 

discount rate, we estimate the rule will 

save approximately 5,055 QALYs 

annually. Assuming a 3-percent 

discount rate, the estimated number of 

QALYs saved annually is 8,708. This 

translates to $16,100 per QALY saved 

using a 7-percent discount rate and 

$9,300 per QALY saved using a 3- 

percent discount rate.92 Either estimate 

falls well below our most conservative 

estimate of $100,000 for the value of a 

quality adjusted statistical life year. 

mstockstill on DSKH9S0YB1PROD with RULES2

33082 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

BILLING CODE 4164–01–C 

TABLE 34—COSTS PER QALY SAVED

Eventual costs 

(millions of 

dollars) 

QALYs saved Cost per QALY saved 

(thousands of dollars) 

Discount rate 3% 7% 3% 7% 

Provision 

On-Farm Measures 

Rodent and Pest Control 1 ................................................... $21.4 4,275 2,481 $6.3 $10.9 

Biosecurity ............................................................................ 5.3 _ _1 _ _1

Cleaning and Disinfecting .................................................... 0.3 _ _1 _ _1


mstockstill on DSKH9S0YB1PROD with RULES2ER09JY09.001</GPH>
Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33083 

TABLE 34—COSTS PER QALY SAVED—CONTINUED

Eventual costs 

(millions of 

dollars) 

QALYs saved Cost per QALY saved 

(thousands of dollars) 

Discount rate 3% 7% 3% 7% 

0.0 

Refrigeration ......................................................................... 20.2 3,177 1,844 6.3 10.9 

Environmental Testing (Average) ........................................ 4.6 _ _2, 3 _ _2, 3

Egg Testing .......................................................................... 7.0 _ _2 _ _2

Diversion .............................................................................. 9.0 1,221 708 16.9 29.0 

Procurement of SE-Monitored Chicks and Pullets .............. 2.1 35 20 59.0 101.7 

On-Farm Administrative Measures 

Plan Design .......................................................................... 1.2 

Recordkeeping ..................................................................... 9.8 

Training ................................................................................ 0.3 

Registration .......................................................................... 0.0 

Total .............................................................................. 81.2 8,708 5,055 9.3 16.1 

1Estimated rodent control benefits also include benefits from biosecurity and cleaning and disinfecting. 

2The benefits from all elements of the testing and diversion program are reported jointly under diversion. 

3The environmental testing cost number reported is the average of the costs of the random swab and row based sampling methods. 

The mean estimated dollar values of 

the benefits, the complete range and 

discussion of which is shown in table 

37 of this document, range from $228 

million to over $9.5 billion, depending 

on the uncertainty in the efficacy of the 

provisions and baseline number of 

illnesses, and the assumptions made 

about VSL, QALY, and the discount 

rate. The lowest estimate of annual 

benefits is well above the high estimate 

of $117 million estimated annual costs 

of the rule. Using the assumption set 

resulting in our central estimate (VSL of 

$5 million, a VSLY of $300,000, and a 

discount rate of 7 percent) gives us 

estimated benefits of $1.5 billion, or net 

benefits in excess of $1.4 billion. 

Considering the widest range of benefits 

and costs, net benefits of the final rule 

could be as low as $111 million 

annually and as high as $9.4 billion 

annually. 

The benefits of some provisions in the 

final rule are slightly lower in table 33 

of this document than are the benefits 

listed in the analysis of potential 

provisions. This difference arises from 

the fact that each provision in the rule 

reduces the base line number of 

illnesses that is used to estimate the 

benefits of the next provision in the list. 

In this way, table 33 can also be used 

to illustrate the costs and lower 

incremental benefits of individual 

provisions or combinations of 

provisions. Because table 33 shows the 

effects of each provision when all are 

enacted, and the interdependence of 

each is accounted for, these estimates 

can be added together, or mixed and 

matched, to achieve a rough estimate of 

the lower bound effects of different 

combinations of provisions. Between 

table 28 of this document and table 33, 

a bounded estimate of the incremental 

effect of each provision is achieved. 

Table 33 illustrates that we have not 

explicitly determined the benefits for 

the administrative provisions. The 

administrative provisions enhance the 

effectiveness of the SE prevention 

measures mandated by the rule, and the 

benefits are therefore embedded in the 

benefits estimates for each control 

measure. 

4. Analysis of Uncertainty 

In table 33 of this document and 

elsewhere we present the expected 

effects of the final rule as point 

estimates. While this is a convenient 

way to summarize the effects of 

individual provisions and alternative 

regulatory options, the use of point 

estimates neglects the large degree of 

uncertainty intrinsic to the underlying 

analysis. In table 35 of this document, 

we present the results of a Monte Carlo 

simulation of uncertainty for the 

eventual annual costs of the rule. 

Results are reported for the 5th and 95th 

percentiles, as well as for the mean 

value. Because many uncertainties 

could not be measured, this table should 

not be seen as a complete 

characterization of the uncertainty 

underlying the analysis. Nonetheless, 

table 34 is a good illustration of the 

effect of the uncertainties we know to 

exist. Based on the data for which we 

have been able to characterize 

uncertainty, we believe that the 

eventual annual cost of the final rule 

will lie between $57.5 million and 

$116.5 million. A complete description 

of the distributions underlying the 

estimates of uncertainty can be found in 

Ref. 106. While some of the range is 

driven by uncertainty in unit costs of 

adopting the provisions, much of the 

range is a product of uncertainty in 

baseline practices. Indeed, the largest 

contributor to the range in total cost, the 

uncertainty in the cost of the rodent and 

pest control provisions, is due in large 

part to the uncertainty in the current 

baseline practices and extent of current 

rodent and pest problems. 

mstockstill on DSKH9S0YB1PROD with RULES2

33084 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

TABLE 35—COSTS OF THE FINAL RULE: ANALYSIS OF UNCERTAINTY

[Millions of dollars] 1

On-farm measures 5th Percentile Mean 95th Percentile 

Rodent and Pest Control ............................................................................................................. $12.0 $22.5 $36.1 

Biosecurity ................................................................................................................................... 4.9 5.3 5.7 

Cleaning and Disinfecting ............................................................................................................ 0.1 0.3 0.5 

Refrigeration ................................................................................................................................ 15.6 20.2 24.7 

Environmental Testing ................................................................................................................. 3.4 4.6 5.7 

Egg Testing .................................................................................................................................. 4.6 7.0 12.1 

Diversion ...................................................................................................................................... 4.9 9.0 16.1 

SE Monitoring of Chicks and Pullets ........................................................................................... 1.9 2.1 2.2 

On-Farm Administrative Measures .............................................................................................. 10.0 11.3 13.2 

Total Costs of Final Rule ...................................................................................................... 57.5 82.2 116.5 

1See Ref. 106 for a description of the distributions underlying this table. 

In tables 36 and 37 of this document, 

we characterize the uncertainties 

associated with the benefits of the final 

rule. The expected annual benefits in 

terms of illness averted from the final 

rule range from nearly 30,000 SE 

illnesses averted to over 191,000 cases 

of SE illnesses averted. 

TABLE 36—ILLNESSES AVERTED BY THE FINAL RULE: ANALYSIS OF UNCERTAINTY1

Provision on-farm measures 5th Percentile Mean 95th Percentile 

Rodent and Pest Control ............................................................................................................. 6,405 38,866 123,772 

Biosecurity ................................................................................................................................... Included in Rodent and Pest Control 

Cleaning and Disinfecting ............................................................................................................ Included in Rodent and Pest Control 

Refrigeration ................................................................................................................................ 9,305 28,888 73,724 

Testing and Diversion .................................................................................................................. 3,382 11,096 46,634 

SE Monitoring of Chicks and Pullets ........................................................................................... 21 320 1,233 

Total ...................................................................................................................................... 29,853 79,170 191,273 

1See Ref. 106 for a description of the distributions underlying this table. 

Table 37 of this document shows the 

estimated annual benefits in constant 

2005 dollars range from $228 million to 

$9.5 billion. A complete description of 

the distributions underlying the 

estimates of uncertainty can be found in 

Ref. 106. The large range is due in great 

part to the uncertainties underlying the 

economic assumptions and number of 

baseline illnesses. The range is also 

affected by the uncertainty that 

expected target efficacies are met (e.g.: 

rodent and pest control, biosecurity, and 

cleaning and disinfecting, and 

refrigeration), the underlying prevalence 

of SE (e.g.: testing and diversion), and 

the uncertainty in baseline practices of 

all provisions. Under very reasonable 

economic assumptions, the expected 

benefits of the final rule exceed the 

expected costs, regardless of uncertainty 

in efficacy of the provisions, the 

underlying prevalence of SE on farms, 

baseline practices, or even the 

uncertainty inherent in the estimation of 

baseline number of illnesses. 

TABLE 37—ESTIMATED VALUE OF ALL ILLNESSES AVERTED, GIVEN DIFFERENT ECONOMIC ASSUMPTIONS

[Millions of dollars] 1, 2, 3, 4

Discount rate = 3% 

VSL = $5 million VSL = $6.5 million 

5th Percentile Mean 95th Percentile 5th Percentile Mean 95th Percentile 

VSLY = $100 thousand ........................... $355.9 $943.8 $2,280.2 _ _ _ _ _ _ 

VSLY = $300 thousand ........................... 907.5 2,406.7 5,814.6 926.7 2,457.6 5,937.5 

VSLY = $500 thousand ........................... _ _ _ _ _ _ 1,478.3 3,920.5 9,471.9 

Discount rate = 7% 

VSL = $5 million VSL = $6.5 million 

5th Percentile Mean 95th Percentile 5th Percentile Mean 95th Percentile 

VSLY = $100 thousand ........................... $227.6 $603.5 $1,458.1 _ _ _ _ _ _ 

VSLY = $300 thousand ........................... 534.4 1,417.1 3,423.8 553.6 1,468.0 3,546.7 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33085 

Discount rate = 7% 

VSL = $5 million VSL = $6.5 million 

5th Percentile Mean 95th Percentile 5th Percentile Mean 95th Percentile 

VSLY = $500 thousand ........................... _ _ _ _ _ _ 860.4 2,281.7 5,512.5 

1See Ref. 106 for a description of the distributions underlying this table. 2VSL means Value of a Statistical Life. 

3VSLY means Value of a Statistical Life Year. 

4VSL and effects of long term arthritis are annualized over 50 years. 

Tables 35 through 37 of this 

document show that the range of 

potential costs is much narrower than 

the range of potential benefits. The 

monetary estimates of benefits cover a 

broad range largely because of the 

different values placed on cases of 

chronic reactive arthritis that result 

from SE illness. The higher the VSLY 

used to value the health effects of 

chronic reactive arthritis, the higher the 

estimated monetary benefits of this final 

rule. 

Even the lowest 5th percentile of 

estimated benefits, under the most 

conservative reasonable assumptions, 

exceeds the 95th percentile of estimated 

costs. 

5. Rule as Final Versus Rule as Proposed 

Table 38 of this document shows the 

estimated costs and benefits of the final 

rule versus the proposed rule. The 

proposed rule estimates have been 

updated to correct model errors, add 

new data, and express costs and benefits 

in terms of 2005 constant dollars. 

TABLE 38—SUMMARY OF ANNUAL COSTS AND BENEFITS AS ESTIMATED FOR THE FINAL AND PROPOSED RULES

[Millions of dollars] 

Provision 

Costs Illnesses averted Total benefits Net benefits 

Final Proposed Final Proposed Final Proposed Final Proposed 

On-Farm Measures 

Rodent and Pest Control 1 ............................... $21.4 $21.4 38,866 38,950 $695.7 $697.2 $668.7 $659.3 

Biosecurity ........................................................ 5.3 13.7 _ _1 _ _1 _ _1

Cleaning and Disinfecting ................................ 0.3 2.8 _ _1 _ _1 _ _1

Refrigeration ..................................................... 20.2 13.5 28,888 20,286 517.1 363.1 496.9 349.6 

Environmental Testing (Average) .................... 4.6 4.6 _ _2, 3 _ _2, 3 _ _2, 3

Egg Testing ...................................................... 7.0 6.9 _ _2 _ _2 _ _2

Diversion .......................................................... 9.0 8.0 11,096 9,541 198.6 170.8 178.1 151.4 

Procurement of SE-Monitored Chicks and Pullets ................................................................ 2.1 0.1 320 14 5.7 0.3 3.6 0 

On-Farm Administrative Measures 

Plan Design ...................................................... 1.2 1.2 _ _ _ _ _ _ 

Recordkeeping ................................................. 9.8 9.8 _ _ _ _ _ _ 

Training ............................................................ 0.3 0.3 _ _ _ _ _ _ 

Registration ...................................................... 0.03 0 _ _ _ _ _ _ 

Total .......................................................... 81.2 82.2 79,170 68,791 1,417.1 1,231.4 1,335.9 1,149.1 

1Estimated rodent control benefits also include benefits from biosecurity and cleaning and disinfecting. 

2The benefits from all elements of the testing and diversion program are reported jointly under diversion. 

3The environmental testing cost number reported is the average of the costs of the random swab and row based sampling methods. 

The annual costs are about $1.0 

million higher for the final rule, as 

provisions were added that were not 

included in the proposed rule; the most 

notable additions are the additional 

refrigeration provisions. However, some 

costs associated with the biosecurity 

and cleaning and disinfecting 

provisions decrease between the 

proposed and final rule. Cost decreased 

because, as suggested by comments to 

the proposed rule, some of the more 

prescriptive or less effective elements of 

the provisions were removed. 

Illnesses averted (and therefore total 

benefits) as well as net benefits are 

much higher in the final rule, due 

mainly to increased refrigeration 

provisions and the earlier required 

environmental test for flocks post-molt. 

We estimate that the final rule will avert 

about 10,400 additional illnesses 

annually and provide for more than 

$185 million in additional annual net 

benefits, when compared to the 

proposed rule. 

mstockstill on DSKH9S0YB1PROD with RULES2

33086 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

93Please refer to Table 6 for a breakdown of the 

size of layer farms affected by the rule. 

94FDA does not know the exact percentage of 

production that comes from farms with more than 

1.1 million layers, since the NASS Census of 

Agriculture (Ref. 71) does not include detail on the 

industry above 100,000 layers. For the purpose of 

this calculation, we assume that half of the eggs 

produced on farms with more than 100,000 layers 

are produced on farms that are small by SBA 

definition. 

95The costs calculated for layer farms in Table 39 

include the costs to chick and pullet farms, 

transport companies, and holding facilities. FDA 

believes that layer farms will absorb much of the 

costs associated provisions affecting these other 

entities. 96NASS does not break pullet farms down by size 

of operation. The 25,624 pullet farms listed in the 

2002 NASS (Ref. 71) are roughly one fourth the total 

number of layer farms listed. For the purposes of 

this analysis, we used data received from public 

comment that indicated there are roughly one third 

as many pullet farms as there are farms affected by 

the rule. 

97FDA only estimated the number of new 

refrigerated shipments necessary due to the final 

rule. There are nearly 57,000 general freight 

trucking establishments (ref. 121). More than 47,000 

of these are small by SBA definition. We do not 

have information on the number of trucking 

companies that specifically ship eggs from farms 

with 3,000 or more layers and will therefore be 

affected by the final rule. 

Table 38 of this document shows the 

benefits of the rules, with all provisions 

in place simultaneously. This is worth 

noting because it appears that the rodent 

and other pest control, biosecurity, and 

cleaning and disinfecting provisions are 

less effective in the final rule. However, 

this is simply because the chick and 

pullet provision is more effective in the 

final rule, so the baseline SE prevalence 

in flocks upon entry to the layer house 

is lower in the final rule than in the 

proposed rule. For the same reason, 

table 38 likely understates the 

effectiveness of the refrigeration, and 

testing and diversion, and other 

provisions if they were implemented on 

their own. 

VI. Final Regulatory Flexibility 

Analysis 

A. Introduction 

The Regulatory Flexibility Act 

requires agencies to analyze regulatory 

options that would minimize any 

significant impact of a rule on small 

entities. The agency believes that this 

final rule will have a significant 

economic impact on a substantial 

number of small entities. The comments 

received concerning the Initial 

Regulatory Flexibility Analysis (IRFA) 

and Proposed Regulatory Impact 

Analysis (PRIA) are contained in 

Section V.C. 

B. Economic Effects on Small Entities 

1. Regulated Entities 

a. Number of small entities affected.93

The Small Business Administration 

(SBA) defines chicken and egg 

producers to be small if their total 

revenues are less than $11.5 million 

(Ref. 120). A producer that receives 

$0.45 per dozen eggs and has layers that 

produce 265 eggs per year would have 

to have over 1,100,000 layers in 

production to earn revenues of over 

$11.5 million. Because only about 400 

farms fall into the category of 100,000 or 

more layers, more than 99 percent of the 

farms with more than 3,000 layers are 

considered small by SBA standards, and 

account for roughly 60 percent of all 

production.94

b. Costs to small entities. The final 

rule will result in costs to small 

businesses. These costs are presented in 

Table 39 of this document. For the 

industry as a whole, the average annual 

cost of the final rule is estimated to be 

about $24,100 per farm site covered by 

the rule. This translates into an average 

cost of $0.30 per layer. Because almost 

all farms are defined by SBA to be 

small, these overall industry costs are 

representative of the average costs to 

small farms. 

TABLE 39—DISTRIBUTION OF COST BY FARM SIZE, AND AS A PERCENTAGE OF REVENUE

Farm size (number of layers) 

Annual per 

farm cost of 

rule 1

Annual per 

layer cost of 

rule 

Cost as a 

percentage of 

revenue 2

Less than 3,000 ........................................................................................................................... $0 $0 $0 

3,000 to 19,999 ............................................................................................................................ 12,295 1.01 7.95% 

20,000 to 49,999 .......................................................................................................................... 13,899 0.49 3.86% 

50,000 to 99,999 .......................................................................................................................... 25,794 0.36 2.83% 

100,000 or more .......................................................................................................................... 96,847 0.19 1.50% 

All farms ....................................................................................................................................... 24,130 0.30 2.36% 

1These figures are derived from calculations made in the Regulatory Impact Analysis (RIA). 

2The average revenue between 2001–2008 was $12.40 per hen. For the purposes of calculating cost as a percentage of revenue, before dividing categorical costs by average revenue, FDA adds the average per hen cost to the average per hen revenue. Thus, we implicitly assume 

that the costs of the rule will be passed on to the consumer. Although not quantified, it is possible that revenues actually increase after the publication of the rule, as consumers perceive eggs to be safer. 

2. Other Affected Entities 95

a. Number of small entities affected. i. 

Introduction. The final rule requires that 

layer farms use layers that were raised 

in SE-monitored chick and pullet flocks 

and that they hold and ship shell eggs 

under proper refrigeration. In addition 

to affecting layer farms, the final rule 

will likely have an impact on some 

small chick and pullet farmers, trucking 

companies, and holding facilities. 

ii. Chick and pullet farms. As with 

layer farms, nearly 100 percent of all 

chick and pullet farms are considered 

small by SBA definition. We were 

unable to break out the number of chick 

and pullet farms by data from NAICS or 

NASS,96 but, based on comments 

received, we estimate that there are 

roughly one third as many pullet-raising 

farms and chick-raising farms as there 

are layer farms affected by the rule. Also 

from comments, we learned that pullet 

farms participate in state EQAPS at the 

same rate as layer farms. Accordingly, 

approximately 1,000 pullet houses will 

be affected by the rule. Because nearly 

all chicks are currently raised as 

certified SE-monitored (95 percent), 

some 50 or fewer of these facilities will 

be affected. 

iii. Trucking companies and holding 

facilities. SBA defines trucking 

companies and holding facilities for 

farm products to be small if their total 

revenues are less than $23.5 million 

annually (Ref. 120). By this definition, 

FDA estimates that over 80 percent of 

trucking companies and over 60 percent 

of holding facilities are small (Ref. 121). 

Thus, more than 300 holding facilities 

that are affected by the final rule are 

small by SBA definition.97

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33087 

98To see the effects of the costs if passed 

completely to layer farms, please refer to Tables 39 

and 33. 

99An exemption for farms with fewer than 3,000 

birds is consistent with the exemption given by the 

EPIA for egg farms that are also egg processors. 

b. Costs to small entities. i. Chick and 

pullet farms. We do not have data for 

the cost of monitoring chicks for SE. 

However, Morales and McDowell (Ref. 

91) estimated that pullets monitored for 

SE cost approximately $0.003 to $0.02 

more per pullet. If we assume the cost 

difference is the same for chicks, the 

total increased annual cost of requiring 

SE-monitored chicks is estimated in the 

RIA for this rule to be about $87,000, for 

a cost of about $1,700 per chick farm if 

roughly 50 are affected. This cost will be 

borne by pullet growers but could be 

passed on to egg farms depending on 

market conditions. 

In addition, pullet houses must be 

tested for environmental SE before the 

pullets are transferred to the layer 

houses. If the environment tests 

positive, the house must be cleaned and 

disinfected before another flock enters 

the house. Furthermore, upon an 

environmental positive in the pullet 

house, layer farms must begin egg 

testing on the positive flock within 2 

weeks of the start of egg laying. Farms 

that test positive for SE in their eggs 

would be required to divert their eggs 

for treatment until they are able to show 

via testing that SE is not present in the 

eggs produced in the infected house. 

The cost of the additional steps, 

cleaning and disinfecting, and egg 

testing and diversion, depends on the 

prevalence of SE in pullet houses. From 

data gathered from comments, FDA 

estimates that the prevalence of SE in 

pullet houses is 0 to 1.5 percent. Based 

on these factors, as shown in detail in 

the RIA for this rule, FDA estimates the 

total costs generated by the provisions 

addressing pullets is about $2 million 

annually, or about $2,000 per pullet 

farm, per year. FDA expects that some 

of these costs could be passed on to the 

layer farms.98

ii. Trucking companies and holding 

facilities. Based on the cost per cubic 

foot of extra refrigeration necessary to 

meet the 45 °F threshold, FDA estimates 

that the refrigeration requirement will 

cost the smallest holding facilities less 

than $500 annually and the largest 

holding facilities (those holding more 

than 1 million eggs at a time) more than 

$18,000 annually, for an industry 

average of nearly $10,000 in increased 

costs per facility each year. If we assume 

that the costs for increased refrigeration 

are proportional to revenues (because 

costs are directly proportional to the 

volume of eggs held) the smallest 60 

percent of holding facilities will incur 

increased annual costs of between $500 

and $11,000. The larger numbers in this 

range will be incurred by the larger 

facilities still meeting SBA’s definition 

of small. 

FDA does not have information on the 

cost of the refrigeration provision to 

trucking companies. However, FDA 

estimates that the large majority of eggs 

are currently shipped in refrigerated 

trucks. For eggs that are not currently 

shipped at 45 °F, FDA estimates that the 

provision will cost approximately $0.02 

per dozen eggs shipped, or $1.7 million 

across the industry. 

C. Regulatory Options 

1. Exemption for Small Entities 

i. One possible approach to reduce the 

impact on small entities would be to 

exempt all small entities from the rule. 

Although this would significantly 

reduce costs, it would also significantly 

reduce benefits. As mentioned 

previously, under the SBA size 

standards the vast majority of entities 

affected by this final rule are small. 

Small farms include not only farms with 

a few hundred layers, but also some 

larger farms with over 100,000 layers. 

An alternative approach, 

implemented in the final rule, exempts 

producers with fewer than 3,000 layers 

at a particular farm.99 While over 90 

percent of farm sites have fewer than 

3,000 layers, less than 1 percent of the 

eggs produced in the United States are 

produced on these farms. 

FDA has decided to exempt all farms 

with fewer than 3,000 layers and those 

farms that sell all of their eggs directly 

to consumers. 

By exempting these farms, we reduce 

expected benefits by less than 1 percent 

while reducing expected costs by more 

than one half. Table 40 of this document 

shows a detailed breakdown of the 

potential costs and benefits of regulating 

farms with less than 3,000 layers. 

TABLE 40—SUMMARY OF ANNUAL COSTS AVERTED AND BENEFITS FOREGONE BY EXEMPTING FARMS LESS THAN 3,000 

LAYERS

[Millions of dollars] 

Costs Illnesses 

averted Total benefits Net benefits 

Provision 

On-Farm Measures 

Rodent and Pest Control 1 ................................................................................. $16 .0 189 $3.4 ¥$21.5 

Biosecurity ......................................................................................................... 8 .3 _ _1 _ _1 _ _1

Cleaning and Disinfecting .................................................................................. 0 .5 _ _1 _ _1 _ _1

Refrigeration ...................................................................................................... 6 .1 147 2.6 ¥3.5 

Environmental Testing (Average) ...................................................................... 6 .8 _ _2, 3 _ _2, 3 _ _2, 3

Egg Testing ........................................................................................................ 0 .0 _ _2 _ _2 _ _2

Diversion ............................................................................................................ 0 .3 198 3.6 ¥3.5 

Procurement of SE-Monitored Chicks and Pullets ............................................ 2 .3 21 0.4 ¥1.9 

On-Farm Administrative Measures 

Plan Design ....................................................................................................... 10 .9 _ _ _ _ _ _ 

Recordkeeping ................................................................................................... 56 .9 _ _ _ _ _ _ 

Training .............................................................................................................. 6 .7 _ _ _ _ _ _ 

Registration ........................................................................................................ 0 .42 _ _ _ _ _ _ 

mstockstill on DSKH9S0YB1PROD with RULES2

33088 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

100 In table 7 of this document, describing the 

total costs of the rule, costs are annualized. When 

costs are not annualized, particularly the first year 

costs of refrigeration, the total initial costs are 

clearly more than $127 million. 

TABLE 40—SUMMARY OF ANNUAL COSTS AVERTED AND BENEFITS FOREGONE BY EXEMPTING FARMS LESS THAN 3,000 

LAYERS—Continued 

[Millions of dollars] 

Costs Illnesses 

averted Total benefits Net benefits 

Total ............................................................................................................ 115 .3 556 9.9 ¥105.3 

1Estimated rodent control benefits also include benefits from biosecurity and cleaning and disinfecting. 

2The benefits from all elements of the testing and diversion program are reported jointly under diversion. 

3The environmental testing cost number reported is the average of the costs of the random swab and row based sampling methods. 

The exemption of farms with less than 

3,000 layers carries over to entities 

potentially affected by, but not directly 

regulated by, the rule. Pullet farms 

supplying layer farms with less than 

3,000 layers, will not necessarily need 

to prove SE-monitored status. Trucks 

and storage facilities holding eggs only 

for farms with less than 3,000 layers 

need not be refrigerated at 45 °F. 

2. Longer Compliance Periods 

We recognize that it may be more 

difficult for some small farms to learn 

about and implement these SE 

prevention measures than it will be for 

other farms. Because of this, FDA is 

giving farm sites with 3,000 or more, but 

fewer than 50,000 layers, 3 years (as 

opposed to 1 year for larger farm sites) 

to comply with this rule. The longer 

compliance period also affects chick 

and pullet flocks supplied to farms, and 

the shipment and storage of eggs for 

farms with between 3,000 and 50,000 

layers. 

FDA will continue to evaluate the 

impact of this rule on smaller farms and 

will consider taking appropriate steps to 

mitigate those impacts, where it is 

possible to do so without reducing 

safety. Further, FDA will publish 

guidance for all covered egg producers, 

and small entity compliance guides, 

which will help inform and educate 

small businesses on the requirements of 

the rule. We plan to use guidance, to the 

extent feasible, as a vehicle to identify 

areas where compliance could be 

achieved via flexible approaches that 

would mitigate the financial impact 

while preserving the public health 

benefits of the rule. Stakeholder 

participation in these documents will be 

solicited and considered. 

D. Description of Recordkeeping and 

Recording Requirements 

The Regulatory Flexibility Act 

requires a description of the 

recordkeeping required for compliance 

with this final rule. Each farm site that 

sells raw (untreated) eggs to the table 

egg market, other than directly to the 

consumer, must design and monitor an 

SE-prevention plan. This prevention 

plan includes all measures the farm is 

taking to prevent SE in its flock. The 

following elements must be included in 

the plan: (1) Chicks and pullets, (2) 

biosecurity, (3) rodent and other pest 

control, (4) cleaning and disinfecting, 

(5) refrigeration, and (6) testing and 

diversion. Records are also required for 

review and of modifications of the SEprevention plan and corrective actions 

taken. Farms are required to have a 

trained or experienced supervisor that 

would be responsible for overseeing the 

plan. Furthermore, all farms covered by 

any part of the rule are required to 

register with FDA. The cost of 

recordkeeping is exhibited in Table 41 

of this document. We detail in section 

V.F of this document how 

recordkeeping costs are calculated. 

TABLE 41—COST OF RECORDKEEPING BY FARM SIZE

Farm size (number of layers) 

Per farm 

cost of 

recordkeeping 

Per layer 

cost of 

recordkeeping 

Less than 3,000 ....................................................................................................................................................... $0 $0.00 

3,000 to 19,999 ........................................................................................................................................................ 2,070 0.17 

20,000 to 49,999 ...................................................................................................................................................... 2,070 0.07 

50,000 to 99,999 ...................................................................................................................................................... 3,143 0.04 

100,000 or more ...................................................................................................................................................... 8,509 0.02 

All Farms .................................................................................................................................................................. 2,941 0.04 

E. Summary 

FDA finds that, under the Regulatory 

Flexibility Act (5 U.S.C. 605(b)), this 

final rule will have a significant impact 

on a substantial number of small 

entities. More than 1,000 small farms 

will be affected by the final rule. 

VII. Unfunded Mandates 

Section 202(a) of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies prepare a written 

statement, which includes an 

assessment of anticipated costs and 

benefits, before proposing ‘‘any rule that 

includes any Federal mandate that may 

result in the expenditure by State, local, 

and tribal governments, in the aggregate, 

or by the private sector, of $100,000,000 

or more (adjusted annually for inflation) 

in any one year.’’ The current threshold 

after adjustment for inflation is $127 

million, using the most current (2006) 

Implicit Price Deflator for the Gross 

Domestic Product.100 FDA has 

determined that this final rule is 

significant under the Unfunded 

Mandates Reform Act. FDA has carried 

out the cost-benefit analysis in 

preceding sections. The other 

requirements under the Unfunded 

Mandates Act of 1995 include assessing 

the rule’s effects on: 

• Future costs; 

• Particular regions, communities, or 

industrial sectors; 

• National productivity; 

• Economic growth; 

• Full employment; 

• Job creation; and 

• Exports. 

The issues listed above are covered in 

detail in the cost benefit analysis of the 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33089 

preceding sections, with the exception 

of the trade effects of this final rule, 

which we will discuss here. 

Given the fragile and highly 

perishable nature of table eggs and the 

restrictions imposed by USDA to ensure 

safety of imported animals and animal 

products (9 CFR part 94), few eggs are 

imported into the United States. Only 

three countries, Canada, Mexico, and 

New Zealand are permitted to export 

shell eggs to the United States. Further, 

since 2004, only New Zealand continues 

to send shell eggs to the United States 

(Ref. 122). In 2006, a firm from New 

Zealand shipped 55,112 dozen eggs to 

the United States. These eggs originated 

from a single farm in New Zealand with 

a little more than 3,000 layers (Ref. 122). 

These eggs represent about one onethousandth of the eggs produced in the 

United States annually. 

In order to qualify to export eggs to 

the United States, New Zealand egg 

production is already highly regulated. 

Therefore, it is unlikely the farm that 

produces the exports to the United 

States would bear even the average cost 

estimated for a similar sized farm in the 

United States. However, if we assume 

the costs are similar across countries, 

the final rule would cost the New 

Zealand farm, or similar exporting 

farms, about $3,000 annually, or about 

$0.04 per dozen eggs produced. 

VIII. Small Business Regulatory 

Enforcement Fairness Act 

The Small Business Regulatory 

Enforcement Fairness Act of 1996 

(Public Law 104–121) defines a major 

rule for the purpose of congressional 

review as having caused or being likely 

to cause one or more of the following: 

An annual effect on the economy of 

$100 million or more; a major increase 

in costs or prices; significant adverse 

effects on competition, employment, 

productivity, or innovation; or 

significant adverse effects on the ability 

of United States-based enterprises to 

compete with foreign-based enterprises 

in domestic or export markets. In 

accordance with the Small Business 

Regulatory Enforcement Fairness Act, 

the Office of Management and Budget 

(OMB) has determined that this final 

rule is a major rule for the purpose of 

congressional review. 

IX. Paperwork Reduction Act of 1995 

This final rule contains information 

collection provisions that are subject to 

review by OMB under the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501– 

3520). A description of these provisions 

is given in the following paragraphs 

with an estimate of the annual 

recordkeeping and reporting burdens. 

Included in the estimate is the time for 

reviewing instructions, searching 

existing data sources, gathering and 

maintaining the data needed, and 

completing and reviewing each 

collection of information. 

FDA invites comments on: (1) 

Whether the proposed collection of 

information is necessary for the proper 

performance of FDA’s functions, 

including whether the information will 

have practical utility; (2) the accuracy of 

FDA’s estimate of the burden of the 

proposed collection of information, 

including the validity of the 

methodology and assumptions used; (3) 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and (4) ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques, 

when appropriate, and other forms of 

information technology. 

Title: Prevention of Salmonella 

Enteritidis in Shell Eggs During 

Production, Storage, and 

Transportation—Recordkeeping and 

Registration Provisions Under 21 CFR 

Part 118. 

Description: FDA is requiring shell 

egg producers to implement measures to 

prevent SE from contaminating eggs on 

the farm and from further growth during 

storage and transportation. Each farm 

site with 3,000 or more egg laying hens 

that sells raw eggs to the table egg 

market, other than directly to the 

consumer, and does not have all of the 

eggs treated, must design and monitor 

an SE prevention plan. This prevention 

plan includes all measures the farm is 

taking to prevent SE in its flock. Records 

are also required for each of the 

provisions included in the plan and for 

plan review and modifications if 

corrective actions are taken. 

Furthermore, all farms covered by any 

part of the rule are required to register 

with FDA. 

We have concluded that 

recordkeeping is necessary for the 

success of the SE prevention measures. 

Written SE prevention plans and 

records of actions taken due to each 

provision are essential for farms to 

implement SE prevention plans 

effectively. Further, they are essential 

for FDA to be able to determine 

compliance. 

Description of Respondents: 

Businesses or other for-profit 

organizations. 

FDA estimates the burden of this 

collection of information as follows: 

TABLE 42—ESTIMATED ANNUAL RECORDKEEPING BURDEN 1, 6

21 CFR section 

Number of 

recordkeepers 2

Annual 

frequency of 

recordkeeping 

Total annual 

records 

Hours per 

recordkeeper Total hours 

118.10(a)(1) 5 ....................................................................... 2,600 1 2,600 20 52,000 

118.10(a)(2) ......................................................................... 4,731 1 4,731 0.5 2,366 

118.10(a)(3)(ii) ..................................................................... 4,731 52 246,012 0.5 123,006 

118.10(a)(3)(i) ...................................................................... 4,731 52 246,012 0.5 123,006 

118.10(a)(3)(iii) 5 .................................................................. 459 1 459 0.5 230 

118.10(a)(3)(iii) ..................................................................... 331 1 331 0.5 166 

118.10(a)(3)(iv) .................................................................... 2,600 52 135,200 0.5 67,600 

118.10(a)(3)(v) through (a)(3)(viii) 3, 4, 5 ................................ 471 52 24,492 0.5 12,246 

5,837 1 5,837 0.5 2,919 

118.10(a)(3)(v) through (a)(3)(viii) 3, 4 .................................. 343 52 17,836 0.5 8,918 

5,965 1 5,965 0.5 2,983 

118.10(a)(4) 5 ....................................................................... 459 1 459 10 4,590 

118.10(a)(4) ......................................................................... 331 1 331 10 3,310 

Total hours for first year ............................................... ........................ ........................ ........................ ........................ 387,962 

Total recurring hours .................................................... ........................ ........................ ........................ ........................ 331,354 

1There are no capital costs or operating and maintenance costs associated with this collection of information. 

2Some records are kept on a by-farm basis and others are kept on a by-house basis. See section V.F of this document for a detailed description of the breakdown. 3The annual frequency of records kept for this provision depends on whether the house actually tests positive for SE. 

mstockstill on DSKH9S0YB1PROD with RULES2

33090 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

101As discussed in section V.F.1.i of this 

document, the pullet houses are estimated to test 

positive at only a rate of 0.75 percent. 

4 Calculations include requirements for pullet and layer houses. 

5First year burden. 

6 Calculations include the burden on foreign firms. FDA identified a single farm with more than 3,000 layers in New Zealand that exports shell 

eggs to the United States. 

FDA estimates the recordkeeping 

burden of this final rule to be 387,962 

hours in the first year, and 331,354 each 

year thereafter, as shown in table 42 of 

this document. 

The number of recordkeepers 

estimated in column 2 of table 42 of this 

document are based on estimates of the 

total number of layer and pullet houses 

affected by this final rule from statistics 

obtained from the Layers study, NASS, 

and comments to the proposed rule. We 

assume that those farms that are 

currently operating according to 

recognized industry or State quality 

assurance plans are already largely in 

compliance with the plan design and 

recordkeeping provisions discussed in 

this section, and therefore would not 

experience additional costs to comply 

with recordkeeping provisions. Using 

data from the Layers study (Refs. 27 and 

28), we find that 59 percent of farms 

with more than 50,000 layers are 

currently members of State or industry 

quality assurance plans. Fewer than 8 

percent of farms with fewer than 50,000 

layers are currently members of quality 

assurance plans. The estimated number 

of layer farms incurring a new 

recordkeeping burden because of this 

rule is 2,600, and the number of houses 

affected is 4,731. A detailed breakdown 

of this estimation is shown in table 29 

of this document. 

Plan design (§ 118.10(a)(1)) and 

refrigeration records (§ 118.10(a)(3)(iv)) 

will be kept on a per farm basis, so the 

number of recordkeepers for these 

provisions is 2,600. Plan design is a first 

year burden only. 

Records of chick and pullet 

procurement (§ 118.10(a)(2)), rodent and 

other pest control (§ 118.10(a)(3)(ii)), 

and biosecurity (§ 118.10(a)(3)(i)) will be 

kept on a per house basis, so the number 

of recordkeepers for these provisions is 

4,731. 

Records of cleaning and disinfection 

(§ 118.10(a)(3)(iii)) will also be kept on 

a per house basis, but will only need to 

be kept in the event that a layer house 

tests environmentally positive. Design 

plan and review (§ 118.10(a)(4)) will 

also need to be performed every time a 

house tests positive. As discussed in 

section V.F of this document, FDA 

estimates that 9.7 percent of houses will 

test environmentally positive initially 

and 7.0 percent will test positive after 

the provisions of this rule have taken 

effect. Therefore, the number of 

recordkeepers for these provisions is 

estimated to be 459 (4,731 houses × 

0.097) in the first year and 331 (4,731 

houses × 0.070) annually after the first 

year. 

Records of testing, diversion, and 

treatment (§ 118.10(a)(3)(v) through 

(a)(3)(viii)) will be kept on a per house 

basis and will include records on flocks 

from pullet houses. From data provided 

by comments, FDA estimates that there 

are one third as many pullet houses as 

there are layer houses. Therefore the 

total number of recordkeepers for these 

provisions is 6,308 (4,731 + (4,731/3)). 

The number of annual records kept 

depends on whether houses test positive 

for SE or not. This is further discussed 

in the following paragraphs. 

Because information on the costs of 

designing the SE prevention plan for 

eggs is not available, we base these costs 

on assumptions used to analyze the 

design of HACCP programs (63 FR 

24253 at 24275 to 24285). In particular, 

we assume that each plan component 

will take approximately 20 hours to 

design. In the event of an environmental 

positive, the farm must review and 

modify as necessary its plan design. 

FDA estimates this will take roughly 

half the time (10 hours per provision) 

that it took to originally draft the plan. 

We assume that the time required for 

recordkeeping is roughly equivalent to 

the time necessary to monitor and 

document the food safety provisions of 

a HACCP plan (63 FR 24253 at 24275 to 

24286). Because the HACCP time 

estimate upon which we are basing our 

estimate involves multiple control 

points and monitoring, this assumption 

tends to overstate the cost of 

recordkeeping for a provision of this 

final rule. In particular, we expect that, 

for each house affected, recordkeeping 

will take one half hour per week per 

provision that would require weekly or 

daily monitoring. Records kept for 

biosecurity measures, rodent and pest 

control, and refrigeration are assumed to 

be recorded on a weekly basis. 

Records for chick and pullet 

procurement and cleaning and 

disinfection will only have to be 

collected roughly once per year and are 

assumed, as above, to require one half 

hour to produce each record. 

Environmental and egg sampling and 

testing, diversion and treatment records 

together have daily, weekly, and 

monthly aspects, in the event of an 

environmental positive. In the case of an 

environmental positive, the record’s 

annual burden is assumed to be similar 

to the burden estimated for the weekly 

records discussed previously. If a house 

tests environmentally negative, the 

burden is similar to the yearly burden 

estimated above. In the first year, 471 

layer and pullet houses ((4,731 layer 

houses × 0.097) + ((4731/3 pullet 

houses) × 0.0075)) are expected to test 

positive and 5,837 are expected to test 

negative ((4,731 layer houses × 0.903) + 

((4731/3 pullet houses) × 0.9925)). In 

following years 343 layer and pullet 

houses ((4,731 layer houses × 0.070) + 

((4731/3 pullet houses) × 0.0075)) are 

expected to test positive 101 and 5,965 

are expected to test negative ((4,731 

layer houses × 0.930) + ((4731/3 pullet 

houses) × 0.9925)). 

The reporting burden due to the 

registration requirement is shown in 

table 43 of this document. 

TABLE 43—ESTIMATED ANNUAL REPORTING BURDEN 1, 4

21 CFR section FDA form No. Number of 

respondents 

Annual frequency 

per response 

Total annual 

responses 

Hours per 

response Total hours 

118.11 3 FDA 3733 2 3,329 1 3,329 2.3 7,657 

1There are no capital costs or operating and maintenance costs associated with this collection of information. 

2The term ‘‘Form FDA 3733’’ refers to both the paper version of the form and the electronic system known as the Shell Egg Producer Registration Module, which will be available at http://www.access.fda.gov per § 118.11(b)(1). 3First year burden. 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33091 

4 Calculations include the burden on foreign firms. FDA identified a single farm with more than 3,000 layers in New Zealand that exports shell 

eggs to the United States. 

The registration requirement will be a 

new, one time reporting burden for all 

farms with more than 3,000 layers. FDA 

used NASS to estimate that there are 

3,329 such farms, as detailed in section 

V.D of this document. Using experience 

gained from implementing section 415 

of the FFDCA (21 U.S.C. 350d), FDA 

estimates that listing the information 

required by the final rule and presenting 

it in a format that will meet the agency’s 

registration regulations will require a 

burden of approximately 2.3 hours per 

average facility registration. As detailed 

in section V.F of this document, FDA 

expects that it will take farms with 

access to the Internet 2 hours to register 

and for farms without easy access to the 

Internet it will take 3 hours to register. 

FDA assumes the number of farms with 

easy access to the Internet is similar to 

the number used in the BT Registration 

Rule (68 FR 5378 at 5392 to 5403), that 

is, 71 percent of farms. The average 

facility burden hour estimate of 2.3 

hours takes into account that some 

respondents completing the registration 

may not have readily available Internet 

access (29 percent). 

In compliance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), the agency has submitted the 

information collection provisions of this 

final rule to OMB for review. Interested 

persons are requested to fax comments 

regarding information collection by (see 

DATES), to the Office of Information and 

Regulatory Affairs, OMB. To ensure that 

comments on information collection are 

received, OMB recommends that written 

comments be faxed to the Office of 

Information and Regulatory Affairs, 

OMB, Attn: FDA Desk Officer, FAX: 

202–395–6974. 

Prior to the effective date of this final 

rule, FDA will publish a notice in the 

Federal Register announcing OMB’s 

decision to approve, modify, or 

disapprove the information collection 

provisions in this final rule. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless it 

displays a currently valid OMB control 

number. 

X. Analysis of Environmental Impact 

The agency has determined under 21 

CFR 25.30(j) that this action is of a type 

that does not individually or 

cumulatively have a significant effect on 

the human environment. Therefore, 

neither an environmental assessment 

nor an environmental impact statement 

is required. 

XI. Federalism 

FDA has analyzed this final rule in 

accordance with the principles set forth 

in Executive Order 13132 on federalism. 

We have examined the effects of the 

requirements of this rule on the 

relationship between the Federal 

Government and the States. The agency 

concludes that preemption of State or 

local rules that establish requirements 

for the prevention of Salmonella 

Enteritidis (SE) in shell eggs during 

production, storage, or transportation 

that are less stringent than those in this 

rule is consistent with this Executive 

order and has added § 118.12(d) to the 

rule to reflect this preemptive effect. 

Section 3(b) of Executive Order 13132 

recognizes that Federal action limiting 

the policymaking discretion of States is 

appropriate ‘‘where there is 

constitutional and statutory authority 

for the action and the national activity 

is appropriate in light of the presence of 

a problem of national significance.’’ The 

constitutional basis for FDA’s authority 

to regulate the safety and labeling of 

foods is well established. 

Section 4(a) of Executive Order 13132 

expressly contemplates preemption 

where the exercise of State authority 

conflicts with the exercise of Federal 

authority under a Federal statute. 

Moreover, section 4(b) of Executive 

Order 13132 authorizes preemption of 

State law by rulemaking when the 

exercise of State authority directly 

conflicts with the exercise of Federal 

authority under the Federal statute or 

there is clear evidence to conclude that 

Congress intended the agency to have 

the authority to preempt State law. 

State and local laws and regulations 

that would impose less stringent 

requirements for prevention of SE in 

shell eggs during production, storage, 

and transportation would undermine 

the agency’s goal of ensuring that shell 

eggs are produced, stored, and 

transported using measures that will 

prevent their contamination with SE. 

These requirements are the minimal 

national prevention measures that we 

believe are necessary to ensure safety. 

However, the requirements of this final 

rule do not preempt State and local 

laws, regulations, and ordinances that 

establish more stringent requirements 

with respect to prevention of SE in shell 

eggs during production, storage, or 

transportation. 

Section 4(e) of the Executive order 

provides that, ‘‘when an agency 

proposes to act through adjudication or 

rulemaking to preempt State law, the 

agency shall provide all affected State 

and local officials notice and an 

opportunity for appropriate 

participation in the proceedings.’’ As 

required by the Executive order, FDA 

provided the States and local 

governments with an opportunity for 

appropriate participation in this 

rulemaking when it sought input from 

all stakeholders through publication of 

the proposed rule in the Federal 

Register on September 22, 2004 (69 FR 

56824 at 56889). In the proposal, FDA 

specifically described this preemptive 

effect. The proposal stated that, through 

this notice of proposed rulemaking, 

State and local governments have a 

chance to participate in the proceedings, 

and that in addition, ‘‘appropriate 

officials and organizations will be 

consulted before this proposed action is 

implemented; the agency plans to have 

public meetings specifically addressing 

the issue of implementation of these 

proposed regulations.’’ 

The agency consulted with a working 

group comprised of State officials in 

developing the provisions of that 

proposed rule. In addition, we sent 

facsimiles of a Federal Register 

document announcing a public meeting 

of egg safety and the availability of egg 

safety ‘‘current thinking’’ documents 

prepared by FDA and USDA to 

Governors, State health and agriculture 

commissioners, State attorneys general, 

and State food program coordinators. 

Further, subsequent to the publication 

of the proposed rule, the agency held 

three public meetings to discuss the 

provisions of the rule, answer questions, 

and solicit comments from stakeholders. 

Meetings were held October 28, 2004, in 

College Park, MD; November 9, 2004, in 

Chicago, IL; and November 16, 2004, in 

Los Angeles, CA. Additionally, 

presentations on the proposed rule were 

made to the following groups: Iowa Egg 

Industry Symposium in Ames, IA, on 

November 10, 2004; Central Atlantic 

States Association of Food and Drug 

Officials Meeting in Laurel, MD, in 

December 2004; Agricultural Research 

Service—Food Safety and Inspection 

Service Joint Food Safety Meeting in 

Shepherdstown, WV, in Spring 2005; 

National Egg Regulatory Officials 

Meeting in Orlando, FL, in March 2005; 

National Egg Quality School in 

Indianapolis, IN, in May 2005; and 

National Egg Regulatory Officials 

Meeting in Oklahoma City, OK, in 

March 2006. Both State and local 

government officials attended and 

participated in these meetings. 

mstockstill on DSKH9S0YB1PROD with RULES2

33092 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

As a result of the extensive outreach 

FDA conducted during the proposed 

rule notice and comment period to 

provide State and local officials with the 

opportunity for meaningful input, we 

received comments from numerous 

State government agencies. Many of the 

comments support FDA in developing a 

national standard for the prevention of 

SE in shell eggs during production, 

storage, and transportation. In fact, one 

State agency commented that ‘‘we 

completely agree with proposed 

regulations that make measures already 

taken by many producers voluntarily, 

mandatory for all producers * * *.’’ 

Another State agency stated that, 

‘‘Overall FDA’s proposal to require SE 

prevention measures for egg production 

would provide for an effective 

nationwide program to reduce SE. The 

prevention measures outlined in the 

proposal have proven to be effective in 

the existing State programs.’’ 

FDA recognizes that existing 

voluntary State programs using egg 

quality assurance plans (EQAPs) have 

been successful in reducing SE 

contamination in poultry houses in 

certain states, as discussed in section I.G 

of this document. However, as 

discussed in response to comment 1 in 

section III of this document, these 

programs are not uniformly 

administered or equally comprehensive 

in their prevention measures. In 

addition, currently the EQAPs that exist 

are voluntary for shell egg producers. 

Although the existing EQAPs have 

similar requirements, they vary in how 

those requirements are implemented. 

This rule will establish uniform, 

nationwide requirements to prevent SE 

in shell eggs during production, storage, 

and transportation. FDA believes that 

these uniform, nationwide requirements 

will further reduce SE illness and 

deaths associated with egg 

consumption. 

Although comments received from the 

State agencies agreed that uniform, 

nationwide requirements would be most 

effective, many States commented that 

inspections and enforcement by State 

Departments of Agriculture would be 

the most effective method of 

implementing these nationwide 

requirements. They commented that 

many States have been conducting 

similar inspections to ensure 

compliance with state EQAPs and have 

the expertise and knowledge to conduct 

inspections for FDA. We agree that we 

can enlist the assistance of existing 

EQAP organizations and State and/or 

local officials in implementing FDA’s 

regulation. The rule provides that a 

State or locality may, in its own 

jurisdiction, enforce this rule by 

carrying out inspections under 

§ 118.12(b) and by using the 

administrative remedies in § 118.12(a) 

unless FDA notifies the State or locality 

in writing that its assistance is no longer 

needed. FDA plans to provide guidance 

to States and localities through an 

enforcement and implementation 

guidance subsequent to this final rule. 

In conclusion, the agency has 

determined that the preemptive effects 

of this final rule are consistent with 

Executive Order 13132. 

XII. References 

The following references have been 

placed on display in the Division of 

Dockets Management (see ADDRESSES) 

and may be seen by interested persons 

between 9 a.m. and 4 p.m., Monday 

through Friday. (FDA has verified the 

Web site addresses, but FDA is not 

responsible for any subsequent changes 

to the Web site after this document 

publishes in the Federal Register.) 

1. Centers for Disease Control and 

Prevention, ‘‘Fact Sheets: Salmonella,’’ 

Office of Communication Media 

Relations, July 16, 1999. 

2. Centers for Disease Control and Prevention 

Memorandum from Chief, Foodborne 

Diseases Epidemiology Section, February 

8, 1996. 

3. Swerdlow, D.L., L.A. Lee, R.V. Tauxe, N.H. 

Bean, and J.Q. Jarvis, ‘‘Reactive 

Anthropathy Following a Multistate 

Outbreak of Salmonella typhimurium 

Infections,’’ Abstract 916, Thirtieth 

Interscience Conference on 

Antimicrobial Agents and 

Chemotherapy. 

4. Zorn, D.J. and K. Klontz, Appendix: The 

Value of Consumer Loss to Foodborne 

Reactive Arthritis (63 FR 24253, May 1, 

1998). 

5. Voetsch, A.C., T.J. Van Gilder, F.J. Angulo, 

M.M. Farley, S. Shallow, R. Marcus, P.R. 

Cieslak, V.C. Deneen, R.V. Tauxe, for the 

Emerging Infections Program FoodNet 

Working Group. FoodNet estimate of the 

burden of illness caused by 

nontyphoidal Salmonella infections in 

the United States. Clinical Infectious 

Diseases 2004; 38 (Suppl 3): S127–34. 

6. Mead, P.S., L. Slutsker, V. Dietz, L.F. 

McCaig, J.S. Bresee, C. Shapiro, P.M. 

Griffin, and R.V. Tauxe, ‘‘Food-Related 

Illness and Death in the United States,’’ 

Emerging Infectious Diseases 5:607–625, 

1999. 

7. Centers for Disease Control and 

Prevention, Salmonella Surveillance 

Annual Tabulation Summary, 2001. 

8. Centers for Disease Control and 

Prevention, Salmonella Surveillance 

Annual Tabulation Summary, 2004. 

9. Centers for Disease Control and 

Prevention, Salmonella Surveillance 

Annual Tabulation Summary, 2005. 

10. Centers for Disease Control and 

Prevention, Preliminary FoodNet Data on 

the Incidence of Infection with 

Pathogens Transmitted Commonly 

Through Food—10 States, 2008. MMWR 

2009; 58:333–337. 

11–12. Centers for Disease Control and 

Prevention, ‘‘Outbreaks of Salmonella 

Serotype Enteritidis Infection Associated 

with Eating Raw or Undercooked Shell 

Eggs—United States, 1996–1998’’, 

MMWR 2000; 49:73–79. 

13. CDC memorandum, Frederick J. Angulo 

to the Record, July 10, 2007. 

14. Mishu, B., J. Koehler, L.A. Lee, D. 

Kodrigue, F., Hickman Brenner, P. Blake, 

and R.V. Tauxe, ‘‘Outbreaks of 

Salmonella Enteritidis infections in the 

United States’’, 1985–1991, Journal of 

Infectious Disease 169: 547–552, 1994. 

15. Centers for Disease Control and 

Prevention, ‘‘Outbreaks of Salmonella 

Serotype Enteritidis Infection Associated 

with Eating Shell Eggs—United States, 

1999–2001’’, MMWR 2003; 51:1149– 

1152. 

16. U.S. Department of Health and Human 

Services, Healthy People 2010: 

Understanding and Improving Health. 

2nd ed. Washington, DC: U.S. 

Government Printing Office, November 

2000. Accessed online at http:// 

www.healthypeople.gov/Document/ 

tableofcontents.htm#under, June 

26,2009. 

17. Memorandum of estimates presented by 

Christopher Braden of Centers for 

Disease Control and Prevention at the 

public meetings for ‘‘Prevention of 

Salmonella Enteritidis in Shell Eggs 

During Production; Proposed Rule’’, Oct. 

28, 2004, Nov. 9, 2004, and Nov. 16, 

2004. 

18. Keller, L.H., C.E. Benson, K. Krotec, and 

R.J. Eckroade, ‘‘Salmonella enteritidis 

Colonization of the Reproductive Tract 

and Forming of Freshly Laid Eggs of 

Chickens,’’ Infection and Immunity 

7:2443–2449, 1995. 

19. Snoeyenbos, G.H., C.F. Smyser, and H. 

Van Roekel, ‘‘Salmonella Infections of 

the Ovary and Peritoneum of Chickens,’’ 

Avian Diseases 13:668–670, 1969. 

20. Humphrey, T.J., ‘‘Contamination of Egg 

Shell and Contents with Salmonella 

enteritidis: A Review,’’ International 

Journal of Food Microbiology 21:31–40, 

1994. 

21. Baker Jr., A.R., E.D. Ebel, R.M. McDowell, 

R.A. Morales, W.D. Schlosser, and R. 

Whiting, Salmonella Enteritidis Risk 

Assessment Team, Salmonella 

Enteritidis Risk Assessment: Shell Eggs 

and Egg Products, Washington, DC: 

United States Department of Agriculture, 

June 12, 1998. 

22. Coleman, M., E. Ebel, N. Golden, A. 

Hogue, A. Kadry, J. Kause, H. Latimer, H. 

Marks, N. Quiring, W. Schlosser, and C. 

Schroeder, Risk Assessments of 

Salmonella Enteritidis in Shell Eggs and 

Salmonella spp. in Egg Products, 

Washington, DC: United States 

Department of Agriculture, October 

2005. 

23. Ebel, E. and Schlosser, W. ‘‘Estimating 

the annual fraction of eggs contaminated 

with SE in the U.S.’’ International 

Journal of Food Microbiology. 61:51–62, 

2000. 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33093 

24. American Egg Board, ‘‘Egg Industry Facts 

Sheet,’’ February 3, 2000. 

25. National Agricultural Statistics Service, 

United States Department of Agriculture, 

Layers and Egg Production 1998 

Summary, January 1999. 

26. National Agricultural Statistics Service, 

‘‘Table 20. Poultry Inventory and Sales: 

1997 and 1992,’’ 1997 Census of 

Agriculture: United States Summary and 

State Data, vol. 1, part 51, U.S. 

Department of Agriculture, Accessed at 

http://www.agcensus.usda.gov/ 

Publications/1997/Vol_1_Chapter_1_

U._S._National_Level_Data/us-51/us1

_19.pdf, June 2009. 

27. National Animal Health Monitoring 

System, Animal and Plant Health 

Inspection Service, United States 

Department of Agriculture, ‘‘Layers ’99, 

Part I: Reference of 1999 Table Egg Layer 

Management in the U.S.’’ October 1999. 

28. National Animal Health Monitoring 

System, Animal and Plant Health 

Inspection Service, United States 

Department of Agriculture, ‘‘Layers ’99, 

Part II: Reference of 1999 Table Egg 

Layer Management in the U.S.’’ January 

2000. 

29. National Animal Health Monitoring 

System, Animal and Plant Health 

Inspection Service, United States 

Department of Agriculture, ‘‘Layers ’99: 

Salmonella enterica serotype Enteritidis 

in Table Egg Layers in the U.S.’’ October 

2000. 

30. Pennsylvania Poultry Federation, 

‘‘Pennsylvania Egg Quality Assurance 

Program,’’ revised April 1997, 500 N. 

Progress Ave., Harrisburg, PA 17109. 

31. California Egg Industry, ‘‘California Egg 

Quality Assurance Program,’’ California 

Department of Food and Agriculture, 

1220 N Street, rm. A–107, Sacramento, 

CA 95814. 

32. New York State, ‘‘New York State Egg 

Quality Assurance Program,’’ 1 Winners 

Circle, Albany, NY 12235. 

33. Maryland Department of Agriculture, 

‘‘Egg Quality Assurance Program,’’ April 

2, 1997, 50 Harry S. Truman Pkwy., 

Annapolis, MD 21401. 

34. Ohio Poultry Association, ‘‘Ohio Egg QA 

Program,’’ 5930 Sharon Woods Blvd., 

Columbus, OH 43229. 

35. United Egg Producers, ‘‘UEP 5-Star Total 

QA Program,’’ 1303 Hightower Trail, 

suite 200, Atlanta, GA 30350. 

36. United States Animal Health Association, 

‘‘National Standardized Salmonella 

Enteritidis Reduction Program for Eggs,’’ 

8100 3 Chopt Rd., suite 203, P.O. Box 

K227, Richmond, VA 23288. 

37. E-mail Correspondence between J. 

Bradley Brown, FDA, and Jim Austin, 

June 21 and October 13, 2005. 

38. E-mail memorandum dated February 16, 

2007 from Barbara Robinson of 

Agricultural Marketing Service to John 

Sheehan of Center for Food Safety and 

Applied Nutrition. 

39. Axtell, R.C., ‘‘Integrated Fly-Control 

Program for Caged-Poultry Houses,’’ 

Journal of Economic Entomology 63:400– 

405, 1970. 

40. Scott, H.G. and K.S. Littig, ‘‘Flies of 

Public Health Importance and Their 

Control, Training Guide-Insect Control 

Series,’’ U.S. Department of Health, 

Education, and Welfare, Public Health 

Service, Communicable Disease Center, 

Atlanta, GA 30333. 

41. Meyer, J.A., B.A. Mullens, T.L. Cyr, and 

C. Stokes (1990) Commercial and 

Naturally Occurring Fly Parasitoids 

(Hymenoptera: Pteromalidae) as 

Biological Control Agents of Stable Flies 

and House Flies (Diptera: Muscidae) on 

California Dairies, Journal of Economic 

Entomology 83(3):799–806. 

42. Andress, E.R. and J.B. Campbell (1994) 

Inundative Releases of Pteromalid 

Parasitoids (Hymenoptera: Pteromalidae) 

for the Control of Stable Flies, Stomoxys 

calcitrans (L.) (Diptera: Muscidae) at 

Confined Cattle Installations in West 

Central Nebraska, Journal of Economic 

Entomology 87(3):714–722. 

43. Weinzierl, R.A. and C.J. Jones (1998) 

Releases of Spalangia nigroaenea and 

Muscidifurax zaraptor (Hymenoptera: 

Pteromalidae) Increase Rates of 

Parasitism and Total Mortality of Stable 

Fly and House Fly (Diptera: Muscidae) 

Pupae in Illinois Cattle Feedlots, Journal 

of Economic Entomology 91(5):1114– 

1121. 

44. Kaufman, P.E., S.J. Long, D.A. Rutz, and 

J.K. Waldron (2001) Parasitism Rates of 

Muscidifurax raptorellus and Nasonia 

vitripennis (Hymenoptera: Pteromalidae) 

After Individual and Paired Releases in 

New York Poultry Facilities, Journal of 

Economic Entomology 94(2):593.598. 

45. Hinton, J.L. and R.D. Moon (2003) 

Arthropod Populations in High-Rise, 

Caged-Layer Houses After Three Manure 

Cleanout Treatments, Journal of 

Economic Entomology 96(4):1352–1361. 

46. Kim, C.J., D.A. Emery, H. Rinkle, K.V. 

Nagaraja, and D.A. Halvorson, ‘‘Effect of 

Time and Temperature on Growth of 

Salmonella enteritidis in Experimentally 

Inoculated Eggs,’’ Avian Diseases 

33:735–742, 1989. 

47. Humphrey, T.J., ‘‘Growth of Salmonellas 

in Intact Shell Eggs: Influence of Storage 

Temperature,’’ The Veterinary Record, 

126:292, 1990. 

48. Bradshaw, J.G., D.B. Shah, E. Forney, and 

J.M. Madden, ‘‘Growth of Salmonella 

enteritidis in Yolk of Shell Eggs from 

Normal and Seropositive Hens,’’ Journal 

of Food Protection 53:1033–1036, 1990. 

49. Coleman, M., E. Ebel, N. Golden, A. 

Hogue, A. Kadry, J. Kause, H. Latimer, H. 

Marks, N. Quiring, W. Schlosser, and C. 

Schroeder, Draft Risk Assessments of 

Salmonella Enteritidis in Shell Eggs and 

Salmonella spp. in Egg Products, 

Washington, DC: United States 

Department of Agriculture, October 22, 

2004. 

50. Memorandum from Richard Wood, Food 

Animal Concerns Trust, to Lou Carson, 

Food and Drug Administration, August 

25, 2000. 

51. United States Department of Agriculture, 

PA Poultry Producers, PA Poultry 

Federation, Egg Association of America, 

PA Department of Agriculture, PA State 

University, and the University of PA, 

‘‘Salmonella Enteritidis Pilot Project 

Progress Report,’’ May 22, 1995. 

52. Holt, P.S., ‘‘Effect of Induced Molting on 

the Susceptibility of White Leghorn Hens 

to a Salmonella Enteritidis infection,’’ 

Avian Diseases 37:412–417, 1993. 

53. United States Food and Drug 

Administration, Center for Food Safety 

and Applied Nutrition, Balmer, M.F., 

‘‘Traceback and On Farm Investigations 

of Salmonella Enteritidis Outbreaks,’’ 

1996 to 2003. 

54. FDA memorandum, Qian Graves to the 

Record, September 9, 2004. 

55. Relative Effectiveness of Selective Plating 

Agars for Recovery of Salmonella 

Species from Selected High-Moisture 

Foods, P.S. Sherrod, R.M. Amaguana, 

W.H. Andrews, G.A. June and T.S. 

Hammack, Journal of AOAC 

International Vol. 78, No. 3, 1995. 

56. Centers for Disease Control and 

Prevention, Salmonella Surveillance 

Annual Tabulation Summary, 2000. 

57. FoodNet, Foodborne Diseases Active 

Surveillance Network, 1999 Surveillance 

Results: Preliminary Report Centers for 

Disease Control, March 2000. 

58. Buzby, Jean C., T. Roberts, C.T. Lin, and 

J.M. MacDonald, Bacterial Foodborne 

Disease: Medical Costs & Productivity 

Losses, Washington, DC: Economic 

Research Service, U.S. Department of 

Agriculture, 1996. 

59. Cutler, D.M. and E. Richardson, 

‘‘Measuring the Health of the U.S. 

Population,’’ Brookings Paper, 

Microeconomics 1997, pp. 217–271. 

60. Scharff, R.L. and A. Jessup, ‘‘Valuing 

Chronic Disease for Heterogeneous 

Populations: The Case of Arthritis,’’ 

working paper, 2000. 

61. Williams, R.M., ‘‘The Costs of Visits to 

Emergency Departments,’’ The New 

England Journal of Medicine 334(10): 

642–646, 1996. 

62. Consumer Price Index—All Urban 

Consumers, Bureau of Labor Statistics, 

accessed online October 26, 2005. 

63. Healthcare Cost and Utilization Project, 

Nation Inpatient Sample (NIS)—2001, 

Washington, D.C., Agency for HealthCare 

Research and Quality, 2003. 

64. Garber, A.M. and C.E. Phelps, ‘‘Economic 

Foundations of Cost-Effectiveness 

Analysis,’’ Journal Health Economics, 

vol. 16, pp. 1–31, 1997. 

65. U.S. Census Bureau, Statistical Abstract 

of the United States, pp. 413–416 and 

436, 2002. 

66. Viscusi, W.K. and J.E. Aldy, ‘‘The Value 

of a Statistical Life: A Critical Review of 

Market Estimates throughout the World,’’ 

AEI–Brookings Joint Center for 

Regulatory Studies, January 2003. 

67. Alberini, A., M. Cropper, A. Krupnick, 

and N.B. Simon, ‘‘Does the Value of a 

Statistical Life Vary with Age and Health 

Status? Evidence from the United States 

and Canada,’’ Resources for the Future, 

Discussion Paper 02–19, April 2002. 

68. Campylobacter FAQ Page, New Mexico 

Department of Health, accessed online 

August 11, 2000. 

69. Humphrey, T.J., ‘‘Contamination of Eggs 

and Poultry Meat with Salmonella 

Enterica Serovar Enteritidis,’’ in 

Salmonella Enterica Serovar Enteritidis 

mstockstill on DSKH9S0YB1PROD with RULES2

33094 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

in Humans and Animals, Iowa State 

University Press, Ames, IA, 1999. 

70. Stadelman, W.J., ‘‘Chapter 4: The 

Preservation of Quality in Shell Eggs,’’ in 

Egg Science and Technology, Fourth 

Edition, Food Products Press, NY, 1995. 

71. National Agricultural Statistics Service, 

‘‘Table 27. Poultry Inventory and 

Number Sold: 2002 and 1997,’’ 2002 

Census of Agriculture: U.S. National 

Level Data, vol. 1, chapter 1, U.S. 

Department of Agriculture, Accessed at 

http://www.agcensus.usda.gov/ 

Publications/2002/ 

Volume_1,_Chapter_1_US/ 

st99_1_027_029.pdf, June 2009. 

72. E-mail Correspondence between Robert 

Scharff, FDA, and Deanna Baldwin, May 

31, 2000. 

73. E-mail Correspondence between Robert 

Scharff, FDA, and Michael Opitz, June 1, 

2000. 

74. E-mail Correspondence between Robert 

Scharff, FDA, and Phillip Debok, June 1, 

2000. 

75. National Agricultural Statistics Service, 

Chicken and Eggs, Washington, DC, 

United States Department of Agriculture, 

accessed online, February 20, 2007. 

76. PA Poultry Federation. ‘‘Comparison of 

PEQAP and Other Programs,’’ 500 N. 

Progress Ave., Harrisburg, PA 17109. 

77. FDA Memorandum, J. Bradley Brown to 

the Record, July 16, 2008. 

78. Hoelscher, Clifford E., ‘‘Poultry Pest 

Management,’’ Texas Agricultural 

Extension Service, The Texas A&M 

University System, 1997. 

79. ‘‘Biosecurity for Poultry,’’ Publication 

408–310, Virginia Cooperative Extension 

Service, 1989. 

80. Halvorson, David A., Good Management 

Practices for Salmonella Risk Reduction 

in the Production of Table Eggs, 

University of Minnesota Extension 

Service, 1997. 

81. Evans, S.J., R.H. Davies, and C. Wray, 

‘‘Chapter 28: Epidemiology of 

Salmonella Enterica Serovar Enteritidis 

Infection in British Poultry Flocks’’ in 

Salmonella Enterica Serovar Enteritidis 

in Humans and Animals, Iowa State 

University Press, Ames, IA, 1999. 

82. FDA Memorandum, Research Triangle 

Institute to the Record, June 18, 2002. 

83. Henzler, D.J. and H.M. Opitz, ‘‘Role of 

Rodents in the Epidemiology of 

Salmonella Enterica Enteritidis and 

Other Salmonella Serovars in Poultry 

Farms,’’ chapter 30 in Salmonella 

Enterica Serovar Enteritidis in Humans 

and Animals Epidemiology, 

Pathogenesis, and Control, Editor A.M. 

Saeed, Iowa State University Press, 

Ames, IA, 1999. 

84. Wray, C. and R.H. Davies, 

‘‘Environmental Problems in Poultry 

Production: Dust and Pests,’’ 

International Symposium on Food-Borne 

Salmonella in Poultry, Baltimore, MD, 

July 25–26, 1998. 

85. Olsen, A.R. and T.S. Hammack, ‘‘Isolation 

of Salmonella spp. from the Housefly, 

Musca domestica L., and the Dump Fly, 

Hydrotaea aenescens (Wiedemann) 

(Diptera: MU.S.C.idae), at Caged-Layer 

Houses,’’ Journal of Food Protection 

63:958– 960, 2000. 

86. Berry, Joe, ‘‘Rodent Control in the Poultry 

House’’ Cooperative Extension Program, 

Division of Agriculture, Oklahoma State 

University, June 1987. 

87. Thornberry, Fred D., ‘‘Pest Control,’’ 

Texas Agricultural Extension Service, 

The Texas A&M University System. 

88. Leonard Safety Equipment Catalog, 

accessed online, October 18, 2006. 

89. Bureau of Labor Statistics, 2005 National 

Occupational Employment and Wage 

Estimates, Washington, DC, U.S. 

Department of Labor, accessed online 

October 16, 2006. 

90. Carey, J.B., J.F. Prochaska, and J.S. Jeffrey, 

Poultry Facility Biosecurity, Texas 

Agricultural Extension Service, 1997. 

91. Morales, R.A. and R.M. McDowell, 

‘‘Chapter 25: Economics Consequences 

of Salmonella Enterica Serovar 

Enteritidis Infection in Humans and the 

U.S. Egg Industry’’ in Salmonella 

Enterica Serovar Enteritidis in Humans 

and Animals, Iowa State University 

Press, Ames, IA, 1999. 

92. Schlosser, W.D., D.J. Henzler, J. Mason, 

D. Kradel, L. Shipman, S. Trock, S.H. 

Hurd, A.T. Hogue, W. Sischo, and E.D. 

Ebel, ‘‘The Salmonella Enterica Serovar 

Enteritidis Pilot Project,’’ Chapter 32 in 

Salmonella Enterica Serovar Enteritidis 

in Humans and Animals Epidemiology, 

Pathogenesis, and Control, Editor A.M. 

Saeed, Iowa State University Press, 

Ames, IA, 1999. 

93. FDA Memorandum, Conversation with 

Roger Glasshoff about egg processor 

statistics, October 24, 2006. 

94. FDA Memorandum, Roger Glasshoff, 

United States Department of Agriculture 

to the Record, November 2, 2006. 

95. FDA Memorandum, Research Triangle 

Institute to the Record, September 3, 

2000. 

96. Energy Information Administration, 

Average Retail Price of Electricity to 

Ultimate Consumer by End-Use Sector, 

Energy Information Administration, 

accessed online, October 17, 2006. 

97. Riemann, H., S. Himathongkham, D. 

Willoughby, R. Tarbell, and R. 

Breitmeyer, ‘‘A Survey for Salmonella by 

Drag Swabbing Manure Piles in 

California Egg Ranches,’’ Avian Diseases, 

vol. 42, pp. 67–71, 1998. 

98. Federal Express, FedEx Standard 

Overnight Per-Pound Rates, Federal 

Express, accessed online October 24, 

2006. 

99. Memorandum to the record of phone 

conversation between J. Bradley Brown, 

FDA, and Silliker Laboratories, October 

23, 2006. 

100. E-mail Correspondence between Wallace 

Andrews, FDA, and Michele Smoot, 

September 29, 2005. 

101. National Agricultural Statistics Service, 

Egg Products (issues covering January 

through December 1999), Washington, 

DC: U.S. Department of Agriculture, 

accessed online February 2, 2000. 

102. Agricultural Marketing Service, Grain 

Transportation Report, United States 

Department of Agriculture, January 4, 

2000. 

103. Agricultural Marketing Service, USDA 

AMS, Poultry Market News, data 

accessed online through the Institute of 

Food and Agricultural Sciences, 

University of Florida, April 24, 2000. 

104. Agricultural Marketing Service, USDA 

AMS, Poultry Market News, data 

accessed online through the North 

Carolina Department of Agriculture & 

Consumer Services, Division of 

Marketing, Market News, April 24, 2000. 

105. Memorandum of estimates given by 

Phillip Debok at the Egg Safety 

Workshop, January 10–14, 2000. 

106. FDA Memorandum, A detailed look at 

the testing and diversion model and 

underlying distributions behind 

uncertainty and variability analysis, 

January 19, 2007 

107. Hogue, Allan, Chairperson, Salmonella 

Enteritidis Review Team, Salmonella 

Enteritidis Review Team Report, 

Washington, DC: Food Safety Inspection 

Service, U.S. Department of Agriculture, 

January 18, 1997. 

108. Memorandum of estimate given by 

Michael Opitz at the Egg Safety 

Workshop, January 10–14, 2000. 

109. E-mail Correspondence between Robert 

Scharff, FDA, and Andrew Rhorer, 

August 15, 2000. 

110. Rhorer, A.R., ‘‘Chapter 27: Control of 

Salmonella enterica Serovar Enteritidis 

Under the National Poultry Improvement 

Plan’’ in Salmonella enterica Serovar 

Enteritidis in Humans and Animals, 

Iowa State University Press, Ames, IA, 

1999. 

111. Economic Research Service, The 

Formula Feed Manufacturing Industry, 

1984, Washington, DC: U.S. Department 

of Agriculture, accessed online August 

21, 2000. 

112. Dun and Bradstreet, Dun’s Market 

Identifiers, The Dialog Corp. Mountain 

View, CA, August 22, 2000. 

113. Bureau of Labor Statistics, 2005 

National Occupational Employment and 

Wage Estimates, Washington, D.C., U.S. 

Department of Labor, accessed online 

October 23, 2006. 

114. McChesney, D.G., G. Kaplan, and P. 

Gardner, ‘‘FDA Survey Determines 

Salmonella Contamination,’’ Feedstuffs 

67, February 13, 1995. 

115. Wood, Richard, ‘‘The Comments of the 

Food Animal Concerns Trust About the 

Egg Safety Action Plan,’’ Food and Drug 

Administration Docket No. 00N–0504. 

116. Gast, R.K., H.D. Stone, P.S. Holt, 

‘‘Evaluation of the Efficacy of OilEmulsion Bacterins for Reducing Fecal 

Shedding of Salmonella Enteritidis by 

Laying Hens,’’ Avian Diseases 37: 1085– 

91, 1993. 

117. Miyamoto, T., D. Kitaoka, G.S.K. 

Withanage, T. Fukata, K. Sasai, and E. 

Baba. 1999. ‘‘Evaluation of the Efficacy 

of Salmonella Enteritidis Oil-emulsion 

Bacterin in an Intravaginal Challenge 

Model in Hens.’’ Avian Diseases. 43:497– 

505. 

118. International HACCP Alliance Training 

Activities, HACCP Alliance, accessed 

online, November 14, 2004. 

119. U.S. Poultry & Egg Association 

Educational Programs, U.S. Poultry and 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33095 

Egg Association, accessed online August 

8, 2000. 

120. Small Business Association, ‘‘Small 

Business Size Standards by NAICS 

Industry’’, United States Small Business 

Association, accessed online via GPO 

Access, October 4, 2007. 

121. Small Business Association, ‘‘U.S. 

receipt size of firm by major industry 

group, 1997 & 2002’’, United States 

Small Business Association, accessed 

online, October 4, 2007. 

122. FDA Memorandum, On U.S. shell and 

egg product imports, November 20, 2007. 

List of Subjects 

21 CFR Part 16 

Administrative practice and 

procedure. 

21 CFR Part 118 

Eggs and egg products, Incorporation 

by reference, Recordkeeping 

requirements, Safety. 

■ Therefore, under the Federal Food, 

Drug, and Cosmetic Act and the Public 

Health Service Act, and under the 

authority delegated to the Commissioner 

of Food and Drugs, 21 CFR parts 16 and 

118 are amended as follows: 

PART 16—REGULATORY HEARING 

BEFORE THE FOOD AND DRUG 

ADMINISTRATION 

■ 1. The authority citation for 21 CFR 

part 16 continues to read as follows: 

Authority: 15 U.S.C. 1451–1461; 21 U.S.C. 

141–149, 321–394, 467f, 679, 821, 1034; 28 

U.S.C. 2112; 42 U.S.C. 201–262, 263b, 364. 

■ 2. Section 16.5 is amended by adding 

paragraph (a)(5) to read as follows: 

§ 16.5 Inapplicability and limited 

applicability. 

(a) * * * 

(5) A hearing on an order for 

diversion or destruction of shell eggs 

under section 361 of the Public Health 

Service Act (42 U.S.C. 264), and 

§ 118.12 of this chapter. 

* * * * * 

■ 3. Part 118 is added to read as follows: 

PART 118—PRODUCTION, STORAGE, 

AND TRANSPORTATION OF SHELL 

EGGS 

Sec. 

118.1 Persons covered by the requirements 

in this part. 

118.3 Definitions. 

118.4 Salmonella Enteritidis (SE) 

prevention measures. 

118.5 Environmental testing for Salmonella 

Enteritidis (SE). 

118.6 Egg testing for Salmonella Enteritidis 

(SE). 

118.7 Sampling methodology for 

Salmonella Enteritidis (SE). 

118.8 Testing methodology for Salmonella 

Enteritidis (SE). 

118.9 Administration of the Salmonella 

Enteritidis (SE) prevention plan. 

118.10 Recordkeeping requirements for the 

Salmonella Enteritidis (SE) prevention 

plan. 

118.11 Registration requirements for shell 

egg producers covered by the 

requirements of this part. 

118.12 Enforcement and compliance. 

Authority: 21 U.S.C. 321, 331–334, 342, 

371, 381, 393; 42 U.S.C. 243, 264, 271. 

§ 118.1 Persons covered by the 

requirements in this part. 

(a) If you are a shell egg producer with 

3,000 or more laying hens at a particular 

farm that does not sell all of your eggs 

directly to consumers and that produces 

shell eggs for the table market, you are 

covered by some or all of the 

requirements in this part, as follows: 

(1) If any of your eggs that are 

produced at a particular farm do not 

receive a treatment as defined in 

§ 118.3, you must comply with all of the 

requirements of this part for egg 

production on that farm. 

(2) If all of your eggs that are 

produced at the particular farm receive 

a treatment as defined in § 118.3, you 

must comply only with the refrigeration 

requirements in § 118.4(e) for 

production of eggs on that farm and 

with the registration requirements in 

§ 118.11. 

(b) If you transport or hold shell eggs 

for shell egg processing or egg products 

facilities, you must comply with the 

refrigeration requirements in § 118.4(e). 

This section applies only to eggs from 

farms with 3,000 or more laying hens. 

§ 118.3 Definitions. 

The definitions and interpretations of 

terms in section 201 of the Federal 

Food, Drug, and Cosmetic Act (the 

FFDCA) (21 U.S.C. 321) are applicable 

to such terms when used in this part, 

except where they are redefined in this 

part. The following definitions also 

apply: 

Biosecurity means a program, 

including the limiting of visitors on the 

farm and in poultry houses, maintaining 

personnel and equipment practices that 

will protect against cross contamination 

from one poultry house to another, 

preventing stray poultry, wild birds, 

cats, and other animals from entering 

poultry houses, and not allowing 

employees to keep birds at home, to 

ensure that there is no introduction or 

transfer of Salmonella Enteritidis (SE) 

onto a farm or among poultry houses. 

Egg products facility means a USDAinspected egg products plant where 

liquid, frozen, and/or dried egg products 

are produced. 

Farm means all poultry houses and 

grounds immediately surrounding the 

poultry houses covered under a single 

biosecurity program. 

Flock means all laying hens within 

one poultry house. 

Group means all laying hens of the 

same age within one poultry house. 

Induced molting means molting that 

is artificially initiated. 

Laying cycle means the period of time 

that a hen begins to produce eggs until 

it undergoes induced molting or is 

permanently taken out of production 

and the period of time that a hen 

produces eggs between successive 

induced molting periods or between 

induced molting and the time that the 

hen is permanently taken out of 

production. 

Molting means a life stage during 

which hens stop laying eggs and shed 

their feathers. 

Pest means any objectionable animal 

including, but not limited to, rodents, 

flies, and larvae. 

Positive flock means a flock that has 

had an egg test that was positive for SE. 

A flock is considered positive until that 

flock meets the egg testing requirements 

in § 118.6(c) to return to table egg 

production. 

Positive poultry house means a 

poultry house from which there has 

been an environmental test that was 

positive for SE at any time during the 

life of a group in the poultry house until 

that house is cleaned and disinfected 

according to § 118.4(d). 

Poultry house means a building, other 

structure, or separate section within a 

structure used to house poultry. For 

structures comprising more than one 

section containing poultry, each section 

that is separated from the other sections 

is considered a separate house. 

Producer means a person who owns 

and/or operates a poultry house 

containing laying hens which produce 

shell eggs for human consumption. 

Shell egg (or egg) means the egg of the 

domesticated chicken. 

Shell egg processing facility means a 

facility that processes (e.g., washes, 

grades, packs) shell eggs for the table 

egg market. 

Treatment (or treated) means a 

technology or process that achieves at 

least a 5-log destruction of SE for shell 

eggs, or the processing of egg products 

in accordance with the Egg Products 

Inspection Act. 

§ 118.4 Salmonella Enteritidis (SE) 

prevention measures. 

You must follow the SE prevention 

measures set forth in this section. In 

addition, you must have and implement 

a written SE prevention plan that is 

mstockstill on DSKH9S0YB1PROD with RULES2

33096 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

specific to each farm where you produce 

eggs and that includes, at a minimum, 

the following SE prevention measures: 

(a) Pullets. You must procure pullets 

that are SE monitored or raise pullets 

under SE monitored conditions. ‘‘SE 

monitored’’ means the pullets are raised 

under SE control conditions that 

prevent SE, including: 

(1) Procurement of chicks. Chicks are 

procured from SE-monitored breeder 

flocks that meet the National Poultry 

Improvement Plan’s standards for ‘‘U.S. 

S. Enteritidis Clean’’ status (9 CFR 

145.23(d)) or equivalent standard; 

(2) Environmental testing. 

(i) The pullet environment is tested 

for SE when pullets are 14 to 16 weeks 

of age; 

(ii) If the environmental test required 

in paragraph (a)(2)(i) of this section is 

negative, you do not need to perform 

any additional testing of those birds or 

their environment until the 

environmental test at 40 to 45 weeks of 

age specified in § 118.5(a); and 

(iii) If the environmental test required 

in paragraph (a)(2)(i) of this section is 

positive, you must begin egg testing, as 

specified in § 118.6, within 2 weeks of 

the start of egg laying. 

(3) Cleaning and disinfection. If the 

environmental test required in 

paragraph (a)(2) of this section is 

positive, the pullet environment is 

cleaned and disinfected, to include: 

(i) Removal of all visible manure; 

(ii) Dry cleaning the positive pullet 

house to remove dust, feathers, and old 

feed; and 

(iii) Following cleaning, disinfection 

of the positive pullet house with spray, 

aerosol, fumigation, or another 

appropriate disinfection method. 

(b) Biosecurity. As part of this 

program, you must take steps to ensure 

that there is no introduction or transfer 

of SE into or among poultry houses. 

Among such biosecurity measures you 

must, at a minimum: 

(1) Limit visitors on the farm and in 

the poultry houses; 

(2) Maintain practices that will 

protect against cross contamination 

when equipment is moved among 

poultry houses; 

(3) Maintain practices that will 

protect against cross contamination 

when persons move between poultry 

houses; 

(4) Prevent stray poultry, wild birds, 

cats, and other animals from entering 

poultry houses; and 

(5) Not allow employees to keep birds 

at home. 

(c) Rodents, flies, and other pest 

control. As part of this program, you 

must: 

(1) Monitor for rodents by visual 

inspection and mechanical traps or 

glueboards or another appropriate 

monitoring method and, when 

monitoring indicates unacceptable 

rodent activity within a poultry house, 

use appropriate methods to achieve 

satisfactory rodent control; 

(2) Monitor for flies by spot cards, 

Scudder grills, or sticky traps or another 

appropriate monitoring method and, 

when monitoring indicates 

unacceptable fly activity within a 

poultry house, use appropriate methods 

to achieve satisfactory fly control. 

(3) Remove debris within a poultry 

house and vegetation and debris outside 

a poultry house that may provide 

harborage for pests. 

(d) Cleaning and disinfection. You 

must clean and disinfect the poultry 

house according to these procedures 

before new laying hens are added to the 

house, if you have had an 

environmental test or an egg test that 

was positive for SE at any point during 

the life of a flock that was housed in the 

poultry house prior to depopulation. As 

part of the cleaning and disinfection 

procedures, you must: 

(1) Remove all visible manure; 

(2) Dry clean the positive poultry 

house to remove dust, feathers, and old 

feed; and 

(3) Following cleaning, disinfect the 

positive poultry house with spray, 

aerosol, fumigation, or another 

appropriate disinfection method. 

(e) Refrigeration. You must hold and 

transport eggs at or below 45 °F ambient 

temperature beginning 36 hours after 

time of lay. If the eggs are to be 

processed as table eggs and are not 

processed for the ultimate consumer 

within 36 hours from the time of lay 

and, therefore, are held and transported 

as required at or below 45 °F ambient 

temperature, then you may then hold 

them at room temperature for no more 

than 36 hours just prior to processing to 

allow an equilibration step to temper 

the eggs. 

§ 118.5 Environmental testing for 

Salmonella Enteritidis (SE). 

(a) Environmental testing when laying 

hens are 40 to 45 weeks of age. As one 

indicator of the effectiveness of your SE 

prevention plan, you must perform 

environmental testing for SE (as 

described in §§ 118.7 and 118.8) in a 

poultry house when any group of laying 

hens constituting the flock within the 

poultry house is 40 to 45 weeks of age. 

(1) If an environmental test at 40 to 45 

weeks is negative and your laying hens 

do not undergo induced molting, then 

you do not need to perform any 

additional environmental testing within 

that poultry house, unless the poultry 

house contains more than one group of 

laying hens. If the poultry house 

contains more than one group of laying 

hens, then you must perform 

environmental testing on the poultry 

house when each group of laying hens 

is 40 to 45 weeks of age. 

(2) If the environmental test at 40 to 

45 weeks is positive, then you must: 

(i) Review and make any necessary 

adjustments to your SE prevention plan 

to ensure that all measures are being 

properly implemented and 

(ii) Begin egg testing (described in 

§ 118.6), unless you divert eggs to 

treatment as defined in § 118.3 for the 

life of the flock in that poultry house. 

Results of egg testing must be obtained 

within 10-calendar days of receiving 

notification of the positive 

environmental test. 

(b) Environmental testing after an 

induced molting period. If you induce a 

molt in a flock or a group in a flock, you 

must perform environmental testing for 

SE in the poultry house at 4 to 6 weeks 

after the end of any molting process. 

(1) If an environmental test at 4 to 6 

weeks after the end of the molting 

process is negative and none of your 

laying hens in that poultry house is 

molted again, then you do not need to 

perform any additional environmental 

testing in that poultry house. Each time 

a flock or group within the flock is 

molted, you must perform 

environmental testing in the poultry 

house at 4 to 6 weeks after the end of 

the molting process. 

(2) If the environmental test at 4 to 6 

weeks after the end of a molting process 

is positive, then you must: 

(i) Review and make any necessary 

adjustments to your SE prevention plan 

to ensure that all measures are being 

properly implemented; and 

(ii) Begin egg testing (described in 

§ 118.6), unless you divert eggs to 

treatment as defined in § 118.3 for the 

life of the flock in that poultry house. 

Results of egg testing, when conducted, 

must be available within 10-calendar 

days of receiving notification of the 

positive environmental test. 

§ 118.6 Egg testing for Salmonella 

Enteritidis (SE). 

(a)(1) If the environmental test for 

pullets at 14 to 16 weeks of age required 

by § 118.4(a) is positive, you must divert 

eggs to treatment (defined in § 118.3) for 

the life of any flock or conduct egg 

testing within 2 weeks of the start of egg 

laying, as specified in paragraphs (b) 

through (e) of this section. 

(2) If you have an SE-positive 

environmental test at any time during 

the life of a flock, you must divert eggs 

to treatment (defined in § 118.3) for the 

life of the flock in that positive poultry 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33097 

house or conduct egg testing as 

specified in paragraphs (b) through (e) 

of this section. 

(b) Eggs must be sampled as described 

in § 118.7 and tested using methodology 

as described in § 118.8. 

(c) You must conduct four egg tests, 

using sampling and methodology in 

§§ 118.7 and 118.8, on the flock in the 

positive poultry house at 2-week 

intervals. If all four tests are negative for 

SE, you are not required to do further 

egg testing. 

(d) If any of the four egg tests is 

positive for SE, you must divert, upon 

receiving notification of an SE-positive 

egg test, all eggs from that flock to 

treatment (defined in § 118.3) until the 

conditions of paragraph (c) of this 

section are met. 

(e) If you have a positive egg test in 

a flock and divert eggs from that flock 

and later meet the negative test result 

requirements described in paragraph (c) 

of this section and return to table egg 

production, you must conduct one egg 

test per month on that flock, using 

sampling and methodology in §§ 118.7 

and 118.8, for the life of the flock. 

(1) If all the monthly egg tests in 

paragraph (e) of this section are negative 

for SE, you may continue to supply eggs 

to the table market. 

(2) If any of the monthly egg tests in 

paragraph (e) of this section is positive 

for SE, you must divert eggs from the 

positive flock to treatment for the life of 

the flock or until the conditions of 

paragraph (c) of this section are met. 

(f) If you are diverting eggs, the pallet, 

case, or other shipping container must 

be labeled and all documents 

accompanying the shipment must 

contain the following statement: 

‘‘Federal law requires that these eggs 

must be treated to achieve at least a 5- 

log destruction of Salmonella Enteritidis 

or processed as egg products in 

accordance with the Egg Products 

Inspection Act, 21 CFR 118.6(f).’’ The 

statement must be legible and 

conspicuous. 

§ 118.7 Sampling methodology for 

Salmonella Enteritidis (SE). 

(a) Environmental sampling. An 

environmental test must be done for 

each poultry house in accordance with 

§ 118.5 (a) and (b). Within each poultry 

house, you must sample the 

environment using a sampling plan 

appropriate to the poultry house layout. 

(b) Egg sampling. When you conduct 

an egg test required under § 118.6, you 

must collect and test the following 

number of eggs from the positive 

poultry house: 

(1) To meet the egg testing 

requirements of § 118.6(c), you must 

collect and deliver for testing a 

minimum of 1,000 intact eggs 

representative of a day’s production. 

The 1,000-egg sample must be tested 

according to § 118.8. You must collect 

and test four 1,000-egg samples at 2- 

week intervals for a total of 4,000 eggs. 

(2) To meet the monthly egg testing 

requirement of § 118.6(e), you must 

collect and deliver for testing a 

minimum of 1,000 intact eggs 

representative of a day’s production per 

month for the life of the flock. Eggs must 

be tested according to § 118.8. 

§ 118.8 Testing methodology for 

Salmonella Enteritidis (SE). 

(a) Testing of environmental samples 

for SE. Testing to detect SE in 

environmental samples must be 

conducted by the method entitled 

‘‘Environmental Sampling and 

Detection of Salmonella in Poultry 

Houses,’’ April 2008, or an equivalent 

method in accuracy, precision, and 

sensitivity in detecting SE. The April 

2008 Environmental Sampling and 

Detection of Salmonella Web site is 

located at http://www.fda.gov/Food/

ScienceResearch/LaboratoryMethods/

ucm114716.htm, current as of June 26, 

2009. The Director of the Federal 

Register approves the incorporation by 

reference of ‘‘Environmental Sampling 

and Detection of Salmonella in Poultry 

Houses,’’ April 2008, in accordance 

with 5 U.S.C. 552(a) and 1 CFR part 51. 

The FDA will request approval to 

incorporate by reference any updates to 

this Web site. The FDA will change the 

date of the Web site in this paragraph 

with each update. You may obtain a 

copy from Division of Microbiology 

(HFS–710), Center for Food Safety and 

Applied Nutrition, Food and Drug 

Administration, 5100 Paint Branch 

Pkwy., College Park, MD 20740, 301– 

436–2364, or you may examine a copy 

at the Center for Food Safety and 

Applied Nutrition’s Library, 5100 Paint 

Branch Pkwy., College Park, MD, 301– 

436–2163, or at the National Archives 

and Records Administration (NARA). 

For information on the availability of 

this material at NARA, call 202–741– 

6030, or go to: http://www.archives.gov/ 

federal_register/code_of_federal_

regulation/ibr_locations.html. 

(b) Testing of egg samples for SE. 

Testing to detect SE in egg samples must 

be conducted according to Chapter 5 of 

FDA’s Bacteriological Analytical 

Manual (BAM), December 2007 Edition, 

or an equivalent method in accuracy, 

precision, and sensitivity in detecting 

SE. Chapter 5 of FDA’s Bacteriological 

Analytical Manual, December 2007 

Edition, is located at http://www.fda.

gov/Food/ScienceResearch/Laboratory

Methods/BacteriologicalAnalytical

ManualBAM/ucm070149.htm, current 

as of June 26, 2009. The method is 

incorporated by reference in accordance 

with 5 U.S.C. 552(a) and 1 CFR part 51. 

The FDA will request approval to 

incorporate by reference any updates to 

this Web site. The FDA will change the 

date of the Web site in this paragraph 

with each update. You may obtain a 

copy from Division of Microbiology 

(HFS–710), Center for Food Safety and 

Applied Nutrition, Food and Drug 

Administration, 5100 Paint Branch 

Pkwy., College Park, MD 20740, 301– 

436–2364, or you may examine a copy 

at the Center for Food Safety and 

Applied Nutrition’s Library, 5100 Paint 

Branch Pkwy., College Park, MD, 301– 

436–2163, or at the National Archives 

and Records Administration (NARA). 

For information on the availability of 

this material at NARA, call 202–741– 

6030, or go to: http://www.archives.gov/ 

federal_register/code_of_federal_

regulation/ibr_locations.html. 

§ 118.9 Administration of the Salmonella 

Enteritidis (SE) prevention plan. 

You must have one or more 

supervisory personnel, who do not have 

to be on-site employees, to be 

responsible for ensuring compliance 

with each farm’s SE prevention plan. 

This person must have successfully 

completed training on SE prevention 

measures for egg production that is 

equivalent to that received under a 

standardized curriculum recognized by 

the Food and Drug Administration or 

must be otherwise qualified through job 

experience to administer the SE 

prevention measures. Job experience 

will qualify this person to perform these 

functions if it has provided knowledge 

at least equivalent to that provided 

through the standardized curriculum. 

This person is responsible for: 

(a) Development and implementation 

of an SE prevention plan that is 

appropriate for your specific farm and 

meets the requirements of § 118.4; 

(b) Reassessing and modifying the SE 

prevention plan as necessary to ensure 

that the requirements in § 118.4 are met; 

and 

(c) Review of records created under 

§ 118.10. This person does not need to 

have performed the monitoring or 

created the records. 

§ 118.10 Recordkeeping requirements for 

the Salmonella Enteritidis (SE) prevention 

plan. 

(a) Records: You must maintain the 

following records documenting your SE 

prevention measures: 

(1) A written SE prevention plan 

required by § 118.4; 

mstockstill on DSKH9S0YB1PROD with RULES2

33098 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

(2) Documentation that pullets were 

‘‘SE monitored’’ or were raised under 

‘‘SE monitored’’ conditions, including 

environmental testing records for 

pullets, as required by § 118.4(a)(2); 

(3) Records documenting compliance 

with the SE prevention measures, as 

follows: 

(i) Biosecurity measures; 

(ii) Rodent and other pest control 

measures; 

(iii) Cleaning and disinfection 

procedures performed at depopulation, 

when applicable; 

(iv) Refrigeration requirements; 

(v) Environmental and egg sampling 

procedures, when applicable, performed 

under § 118.7; 

(vi) Results of SE testing, when 

applicable, performed under § 118.8 as 

required in §§ 118.4(a)(2), 118.5, and 

118.6; 

(vii) Diversion of eggs, if applicable, 

as required in § 118.6; and 

(viii) Eggs at a particular farm being 

given a treatment as defined in § 118.3, 

if you are a producer complying with 

the requirements of this section as 

described in § 118.1(a)(2). 

(4) Records of review and of 

modifications of the SE prevention plan 

and corrective actions taken. 

(b) General requirements for records 

maintained by shell egg producers. All 

records required by § 118.10(a) must 

include: 

(1) Your name and the location of 

your farm, 

(2) The date and time of the activity 

that the record reflects, 

(3) The signature or initials of the 

person performing the operation or 

creating the record. The written SE 

prevention plan must be dated and carry 

the signature(s) (not initials) of the 

person(s) who administers the plan as 

described in § 118.9, and 

(4) Data and information reflecting 

compliance activities must be entered 

on records at the time the activity is 

performed or observed, and the records 

must contain the actual values observed, 

if applicable. 

(c) Length of time records must be 

retained. You must retain all records 

required by this part at your place of 

business, unless stored offsite under 

§ 118.10(d), for 1 year after the flock to 

which they pertain has been taken 

permanently out of production. 

(d) Offsite storage of records. You may 

store the records required by this part, 

except for the written SE prevention 

plan, offsite. You must be able to 

retrieve and provide the records at your 

place of business within 24 hours of 

request for official review. Electronic 

records are considered to be onsite if 

they are accessible from an onsite 

location. 

(e) Official review of records. You 

must have all records required by this 

part available for official review and 

copying at reasonable times. 

(f) Public disclosure of records. 

Records required by this part are subject 

to the disclosure requirements under 

part 20 of this chapter. 

§ 118.11 Registration requirements for 

shell egg producers covered by the 

requirements of this part. 

(a) Shell egg producers covered under 

§ 118.1(a) of this part are required to 

register their farms with the FDA within 

30 days of becoming an egg producer or, 

if already an egg producer, by the 

applicable effective date of this 

regulation. 

(b) Shell egg producers may register 

their farms by any of the following 

means: 

(1) Electronic registration. To register 

electronically, you must register at 

http://www.access.fda.gov, which will 

be available for registration 24 hours a 

day, 7 days a week beginning May 10, 

2010. This Web site is available from 

wherever the Internet is accessible, 

including libraries, copy centers, 

schools, and Internet cafes. 

(i) An individual authorized by the 

owner or operator of a farm, such as an 

agent in charge, may also register a farm 

electronically. 

(ii) FDA strongly encourages 

electronic registration for the benefit of 

both FDA and the registrant. 

(iii) Once you complete your 

electronic registration, FDA will 

automatically provide you with an 

electronic confirmation of registration 

and a permanent registration number. 

(iv) You will be considered registered 

once FDA electronically transmits your 

confirmation and registration number. 

(2) Registration by mail or by fax. If, 

for example, you do not have reasonable 

access to the Internet through any of the 

methods described in paragraph (b)(1) of 

this section, an individual authorized by 

the owner or operator of a farm, such as 

an agent in charge, may register by mail 

or fax. 

(i) You must register using FDA Form 

No. 3733. You may obtain a copy of this 

form by writing to the U.S. Food and 

Drug Administration, 10903 New 

Hampshire Ave., Silver Spring, MD 

20993, or by requesting the form by 

phone at 1–888–INFO–FDA (1–888– 

463–6332). 

(ii) When you receive the form, you 

must fill it out completely and legibly 

and either mail it to the address in 

paragraph (b)(2)(i) of this section or fax 

it to the number on the form. 

(iii) If any required information on the 

form is incomplete or illegible when 

FDA receives it, FDA will return the 

form to you for revision, provided that 

your mailing address or fax number is 

legible and valid. When returning a 

registration form for revision, FDA will 

use the means by which the form was 

received by the agency (i.e., by mail or 

fax). 

(iv) FDA will enter complete and 

legible mailed and faxed registration 

submissions into its registration system, 

along with CD–ROM submissions, as 

soon as practicable, in the order FDA 

receives them. 

(v) FDA will then mail to the address 

or fax to the fax number on the 

registration form a copy of the 

registration as entered, confirmation of 

registration, and your registration 

number. When responding to a 

registration submission, FDA will use 

the means by which the registration was 

received by the agency (i.e., by mail or 

fax). 

(vi) If any information you previously 

submitted was incorrect at the time of 

submission, you must immediately 

update your facility’s registration. If any 

information you previously submitted 

that was correct at the time of 

submission subsequently changes, you 

must update your facility’s registration 

within 60 calendar days. 

(vii) Your facility is considered 

registered once FDA enters your 

facility’s registration data into the 

registration system and the system 

generates a registration number. 

(3) Registration by CD–ROM for 

multiple submissions. If, for example, 

you do not have reasonable access to the 

Internet through any of the methods 

provided under paragraph (b)(1) of this 

section, you may register by CD–ROM. 

(i) Registrants submitting their 

registrations in CD–ROM format must 

use ISO 9660 (CD–R or CD–RW) data 

format. 

(ii) These files must be submitted on 

a portable document format (PDF) 

rendition of the registration form (FDA 

Form No. 3733) and be accompanied by 

one signed copy of the certification 

statement that appears on the 

registration form. 

(iii) Each submission on the CD–ROM 

must contain the same preferred mailing 

address in the appropriate block on FDA 

Form No. 3733. 

(iv) A CD–ROM may contain 

registrations for as many facilities as 

needed up to the CD–ROM’s capacity. 

(v) The registration on the CD–ROM 

for each separate facility must have a 

unique file name up to 32 characters 

long, the first part of which may be used 

to identify the parent company. 

(vi) You must mail the CD–ROM to 

the U.S. Food and Drug Administration, 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33099 

10903 New Hampshire Avenue, Silver 

Spring, MD 20993. 

(vii) If FDA receives a CD–ROM that 

does not comply with these 

specifications, it will return the CD– 

ROM to the submitter unprocessed. 

(viii) FDA will enter CD–ROM 

submissions that comply with these 

specifications into its registration 

system, along with the complete and 

legible mailed and faxed submissions, 

as soon as practicable, in the order FDA 

receives them. 

(ix) For each facility on the CD–ROM, 

FDA will mail to the preferred mailing 

address a copy of the registration(s) as 

entered, confirmation of registration, 

and each facility’s assigned registration 

number. 

(x) If any information you previously 

submitted was incorrect at the time of 

submission, you must immediately 

update your facility’s registration. If any 

information you previously submitted 

that was correct at the time of 

submission subsequently changes, you 

must update your facility’s registration 

within 60 calendar days. 

(xi) Your facility is considered 

registered once FDA enters your 

facility’s registration data into the 

registration system and the system 

generates a registration number. 

(c) No registration fee is required. 

(d) You must submit all registration 

information in the English language. All 

information must be submitted using 

the Latin (Roman) alphabet. 

(e) Each registrant must submit the 

following information through one of 

the methods described in paragraph (b) 

of this section: 

(1) The name, full address, and phone 

number of the farm; and 

(2) The average or usual number of 

layers of each house and number of 

poultry houses on the farm. 

(3) A statement in which the shell egg 

producer certifies that the information 

submitted is true and accurate. If the 

individual submitting the form is not 

the shell egg producer in charge of the 

farm, the registration must also include 

a statement in which the individual 

certifies that the information submitted 

is true and accurate, certifies that he/she 

is authorized to submit registration, and 

identifies by name, address, and 

telephone number, the individual who 

authorized submission of the 

registration. Each registration must 

include the name of the individual 

registering the farm submitting the 

registration, and the individual’s 

signature (for paper and CD–ROM 

options). 

(f) Registered egg producers must 

submit an update to a registration 

within 60-calendar days of any change 

to any of the information previously 

submitted by any of the means as 

provided in § 118.11(b). 

(g) Registered egg producers must 

notify FDA within 120 days of ceasing 

egg production by completing sections 

1b, 1c, and 2 of Form 3733. This 

notification is not required if you are a 

seasonal egg producer or you 

temporarily cease operation due to labor 

disputes, fire, natural disasters, or other 

temporary conditions. 

§ 118.12 Enforcement and compliance. 

(a) Authority. This part is established 

under authority of the Public Health 

Service Act (the PHS Act). Under the 

FFDCA, the Food and Drug 

Administration (FDA) can enforce the 

food adulteration provisions under 21 

U.S.C. 331 through 334 and 342. Under 

the PHS Act (42 U.S.C. 264), FDA has 

the authority to make and enforce 

regulations for the control of 

communicable diseases. FDA has 

established the following administrative 

enforcement procedures for the 

diversion or destruction of shell eggs 

and for informal hearings under the PHS 

Act: 

(1) Upon a finding that any shell eggs 

have been produced or held in violation 

of this part, an authorized FDA 

representative or a State or local 

representative in accordance with 

paragraph (c) of this section may order 

such eggs to be diverted, under the 

supervision of said representative, for 

processing in accordance with the Egg 

Products Inspection Act (EPIA) (21 

U.S.C. 1031 et seq.) or by a treatment 

that achieves at least a 5-log destruction 

of SE or destroyed by or under the 

supervision of an officer or employee of 

FDA, or, if applicable, of the State or 

locality in accordance with the 

following procedures: 

(i) Order for diversion or destruction 

under the PHS Act. Any district office 

of FDA or any State or locality acting 

under paragraph (c) of this section, 

upon finding shell eggs that have been 

produced or held in violation of this 

regulation, may serve a written order 

upon the person in whose possession 

the eggs are found requiring that the 

eggs be diverted, under the supervision 

of an officer or employee of the issuing 

entity, for processing in accordance 

with the EPIA (21 U.S.C. 1031 et seq.) 

or by a treatment that achieves at least 

a 5-log destruction of SE or destroyed by 

or under the supervision of the issuing 

entity, within 10-working days from the 

date of receipt of the order, unless, 

under paragraph (a)(2)(iii) of this 

section, a hearing is held, in which case 

the eggs must be diverted or destroyed 

consistent with the decision of the 

Regional Food and Drug Director under 

paragraph (a)(2)(v) of this section. The 

order must include the following 

information: 

(A) A statement that the shell eggs 

identified in the order are subject to 

diversion for processing in accordance 

with the EPIA or by a treatment that 

achieves at least a 5-log destruction of 

SE or destruction; 

(B) A detailed description of the facts 

that justify the issuance of the order; 

(C) The location of the eggs; 

(D) A statement that these eggs must 

not be sold, distributed, or otherwise 

disposed of or moved except as 

provided in paragraph (a)(1)(iv) of this 

section; 

(E) Identification or description of the 

eggs; 

(F) The order number; 

(G) The date of the order; 

(H) The text of this entire section; 

(I) A statement that the order may be 

appealed by written appeal or by 

requesting an informal hearing; 

(J) The name and phone number of 

the person issuing the order; and 

(K) The location and telephone 

number of the office or agency issuing 

the order and the name of its Director. 

(ii) Approval of District Director. An 

order, before issuance, must be 

approved by FDA’s District Director or 

the Acting District Director. If prior 

written approval is not feasible, prior 

oral approval must be obtained and 

confirmed by written memorandum as 

soon as possible. 

(iii) Labeling or marking of shell eggs 

under order. An FDA, State, or local 

representative issuing an order under 

paragraph (a)(1)(i) of this section must 

label or mark the shell eggs with official 

tags that include the following 

information: 

(A) A statement that the shell eggs are 

detained in accordance with regulations 

issued under section 361(a) of the PHS 

Act (42 U.S.C. 264(a)). 

(B) A statement that the shell eggs 

must not be sold, distributed or 

otherwise disposed of or moved except, 

after notifying the issuing entity in 

writing, to: 

(1) Divert them for processing in 

accordance with the EPIA or by a 

treatment that achieves at least a 5-log 

destruction of SE or destroy them or 

(2) Move them to another location for 

holding pending appeal. 

(C) A statement that the violation of 

the order or the removal or alteration of 

the tag is punishable by fine or 

imprisonment or both (section 368 of 

the PHS Act (42 U.S.C. 271)). 

(D) The order number and the date of 

the order, and the name of the 

government representative who issued 

the order. 

mstockstill on DSKH9S0YB1PROD with RULES2

33100 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 

(iv) Sale or other disposition of shell 

eggs under order. After service of the 

order, the person in possession of the 

shell eggs that are the subject of the 

order must not sell, distribute, or 

otherwise dispose of or move any eggs 

subject to the order unless and until 

receiving a notice that the order is 

withdrawn after an appeal except, after 

notifying FDA’s district office or, if 

applicable, the State or local 

representative, in writing, to: 

(A) Divert or destroy them as 

specified in paragraph (a)(1)(i) of this 

section, or 

(B) Move them to another location for 

holding pending appeal. 

(2) The person on whom the order for 

diversion or destruction is served may 

either comply with the order or appeal 

the order to the Regional Food and Drug 

Director in accordance with the 

following procedures: 

(i) Appeal of a detention order. Any 

appeal must be submitted in writing to 

FDA’s District Director in whose district 

the shell eggs are located within 5- 

working days of the issuance of the 

order. If the appeal includes a request 

for an informal hearing, the hearing 

must be held within 5-working days 

after the appeal is filed or, if requested 

by the appellant, at a later date, which 

must not be later than 20-calendar days 

after the issuance of the order. The order 

may also be appealed within the same 

period of 5-working days by any other 

person having an ownership or 

proprietary interest in such shell eggs. 

The appellant of an order must state the 

ownership or proprietary interest the 

appellant has in the shell eggs. 

(ii) Summary decision. A request for 

a hearing may be denied, in whole or in 

part and at any time after a request for 

a hearing has been submitted, if the 

Regional Food and Drug Director or his 

or her designee determines that no 

genuine and substantial issue of fact has 

been raised by the material submitted in 

connection with the hearing or from 

matters officially noticed. If the 

Regional Food and Drug Director 

determines that a hearing is not 

justified, written notice of the 

determination will be given to the 

parties explaining the reason for denial. 

(iii) Informal hearing. Appearance by 

any appellant at the hearing may be by 

mail or in person, with or without 

counsel. The informal hearing must be 

conducted by the Regional Food and 

Drug Director or his designee, and a 

written summary of the proceedings 

must be prepared by the Regional Food 

and Drug Director. 

(A) The Regional Food and Drug 

Director may direct that the hearing be 

conducted in any suitable manner 

permitted by law and by this section. 

The Regional Food and Drug Director 

has the power to take such actions and 

make such rulings as are necessary or 

appropriate to maintain order and to 

conduct an informal, fair, expeditious, 

and impartial hearing, and to enforce 

the requirements concerning the 

conduct of hearings. 

(B) Employees of FDA will first give 

a full and complete statement of the 

action that is the subject of the hearing, 

together with the information and 

reasons supporting it, and may present 

oral or written information relevant to 

the hearing. The party requesting the 

hearing may then present oral or written 

information relevant to the hearing. All 

parties may conduct reasonable 

examination of any person (except for 

the presiding officer and counsel for the 

parties) who makes any statement on 

the matter at the hearing. 

(C) The hearing shall be informal in 

nature, and the rules of evidence do not 

apply. No motions or objections relating 

to the admissibility of information and 

views will be made or considered, but 

any party may comment upon or rebut 

any information and views presented by 

another party. 

(D) The party requesting the hearing 

may have the hearing transcribed, at the 

party’s expense, in which case a copy of 

the transcript is to be furnished to FDA. 

Any transcript of the hearing will be 

included with the Regional Food and 

Drug Director’s report of the hearing. 

(E) The Regional Food and Drug 

Director must prepare a written report of 

the hearing. All written material 

presented at the hearing will be attached 

to the report. Whenever time permits, 

the Regional Food and Drug Director 

may give the parties the opportunity to 

review and comment on the report of 

the hearing. 

(F) The Regional Food and Drug 

Director must include as part of the 

report of the hearing a finding on the 

credibility of witnesses (other than 

expert witnesses) whenever credibility 

is a material issue, and must include a 

recommended decision, with a 

statement of reasons. 

(iv) Written appeal. If the appellant 

appeals the detention order but does not 

request a hearing, the Regional Food 

and Drug Director must render a 

decision on the appeal affirming or 

revoking the detention order within 5- 

working days after the receipt of the 

appeal. 

(v) Regional Food and Drug Director 

decision. If, based on the evidence 

presented at the hearing or by the 

appellant in a written appeal, the 

Regional Food and Drug Director finds 

that the shell eggs were produced or 

held in violation of this section, he must 

affirm the order that they be diverted, 

under the supervision of an officer or 

employee of FDA for processing under 

the EPIA or by a treatment that achieves 

at least a 5-log destruction of SE or 

destroyed by or under the supervision of 

an officer or employee of FDA; 

otherwise, the Regional Food and Drug 

Director must issue a written notice that 

the prior order is withdrawn. If the 

Regional Food and Drug Director affirms 

the order, he must order that the 

diversion or destruction be 

accomplished within 10-working days 

from the date of the issuance of his 

decision. The Regional Food and Drug 

Director’s decision must be 

accompanied by a statement of the 

reasons for the decision. The decision of 

the Regional Food and Drug Director 

constitutes final agency action, subject 

to judicial review. 

(vi) No appeal. If there is no appeal 

of the order and the person in 

possession of the shell eggs that are 

subject to the order fails to divert or 

destroy them within 10-working days, 

or if the demand is affirmed by the 

Regional Food and Drug Director after 

an appeal and the person in possession 

of such eggs fails to divert or destroy 

them within 10-working days, FDA’s 

district office or, if applicable, the State 

or local representative may designate an 

officer or employee to divert or destroy 

such eggs. It shall be unlawful to 

prevent or to attempt to prevent such 

diversion or destruction of the shell eggs 

by the designated officer or employee. 

(b) Inspection. Persons engaged in 

production of shell eggs must permit 

authorized representatives of FDA to 

make, at any reasonable time, an 

inspection of the egg production 

establishment in which shell eggs are 

being produced. Such inspection 

includes the inspection and sampling of 

shell eggs and the environment, the 

equipment related to production of shell 

eggs, the equipment in which shell eggs 

are held, and examination and copying 

of any records relating to such 

equipment or eggs, as may be necessary 

in the judgment of such representatives 

to determine compliance with the 

provisions of this section. Inspections 

may be made with or without notice and 

will ordinarily be made during regular 

business hours. 

(c) State and local cooperation. Under 

sections 311 and 361 of the Public 

Health Service Act, any State or locality 

that is willing and able to assist the 

agency in the enforcement of §§ 118.4 

through 118.10, and is authorized to 

inspect or regulate egg production 

establishments, may, in its own 

jurisdiction, enforce §§ 118.4 through 

mstockstill on DSKH9S0YB1PROD with RULES2

Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Rules and Regulations 33101 

118.10 through inspections under 

paragraph (b) of this section and 

through administrative enforcement 

remedies specified in paragraph (a) of 

this section unless FDA notifies the 

State or locality in writing that such 

assistance is no longer needed. A state 

or locality may substitute, where 

necessary, appropriate State or local 

officials for designated FDA officials in 

this section. When providing assistance 

under paragraph (a) of this section, a 

State or locality may follow the hearing 

procedures set out in paragraphs 

(a)(2)(iii) through (a)(2)(v) of this 

section, or may utilize comparable State 

or local hearing procedures if such 

procedures satisfy due process. 

(d) Preemption. No State or local 

governing entity shall establish, or 

continue in effect any law, rule, 

regulation, or other requirement 

regarding prevention of SE in shell eggs 

during production, storage, or 

transportation that is less stringent than 

those required by this part. 

Dated: July 2, 2009. 

Jeffrey Shuren, 

Associate Commissioner for Policy and 

Planning. 

[FR Doc. E9–16119 Filed 7–7–09; 1:30 pm] 

BILLING CODE 4164–01–P 

mstockstill on DSKH9S0YB1PROD with RULES2