[Federal Register: August 27, 1998 (Volume 63, Number 166)]
[Rules and Regulations]
[Page 45663-45675]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27au98-1]
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Rules and Regulations
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DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
7 CFR Part 59
[Docket No. 97-069F]
RIN 0583-AC04
Refrigeration and Labeling Requirements for Shell Eggs
AGENCY: Food Safety and Inspection Service.
ACTION: Final rule and request for comments.
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SUMMARY: The Food Safety and Inspection Service (FSIS) is revising its
regulations governing the inspection of eggs and egg products to
implement 1991 amendments to the Egg Products Inspection Act (EPIA).
These amendments require that shell eggs packed for consumer use be
stored and transported under refrigeration at an ambient temperature
not to exceed 45 deg.F (7.2 deg.C). In addition, the amendments require
that these packed shell eggs be labeled to state that refrigeration is
required. Finally, the amendments require that any shell eggs imported
into the United States packed for consumer use include a certification
that the eggs, at all times after packing, have been stored and
transported at an ambient temperature of no greater than 45 deg.F
(7.2 deg.C).
DATES: Effective Date: The effective date of the final rule is August
27, 1999.
Comment Date: As noted below, the proposed rule concerning
refrigeration and labeling requirements for shell eggs was published on
October 27, 1992. Because the proposed rule was published approximately
six years ago, FSIS is requesting comments on this final rule. FSIS
requests comments on the economic impact analysis in these regulations
and on options for monitoring compliance with the refrigeration and
labeling requirements. Comments must be received on or before October
26, 1998.
ADDRESSES: Send an original and two copies of comments to: FSIS Docket
Clerk, Docket #97-069F, Room 102, Cotton Annex, 300 12th Street, SW,
Washington, DC 20250-3700. Reference material cited in the document and
any comments received will be available for public inspection in the
FSIS Docket Room from 8:30 a.m. to 4:30 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Ms. Patricia F. Stolfa, Assistant
Deputy Administrator, Regulations and Inspection Methods, Food Safety
and Inspection Service, U.S. Department of Agriculture (202) 205-0699.
SUPPLEMENTARY INFORMATION:
Background
In 1991, as part of the Food, Agriculture, Conservation and Trade
Act Amendments of 1991 (Pub.L. 102-237) (hereafter referred to as ``the
1991 EPIA amendments''), Congress amended the EPIA to require that egg
handlers store and transport shell eggs destined for the ultimate
consumer under refrigeration at an ambient temperature of no greater
than 45 deg.F (7.2 deg.C) (21 U.S.C 1034(e)(1)(A)). (See also 21 U.S.C.
1037(c)). The 1991 EPIA amendments specify that these refrigeration
requirements apply to shell eggs after they have been packed into a
container destined for the ultimate consumer. The 1991 EPIA amendments
also require that egg handlers label the shell egg containers to
indicate that refrigeration is required (21 U.S.C. 1034(e)(1)(B)). In
addition, these amendments require that any eggs packed into a
container destined for the ultimate consumer and imported into the
United States include a certification that the eggs have, at all times
after packaging, been stored and transported at an ambient temperature
that is no greater than 45 deg.F (7.2 deg.C) (21 U.S.C. 1046(a)). The
1991 EPIA amendments specify that these requirements become effective
12 months after promulgation of final regulations implementing the EPIA
amendments (21 U.S.C. 1034 note).
The Agricultural Marketing Service (AMS) proposed a rule in 1992 to
implement the 1991 EPIA amendments (57 FR 48569, October 27, 1992);
however, AMS never published a final rule incorporating these
amendments into the regulations governing the inspection of eggs and
egg products. Following enactment of the Federal Crop Insurance Reform
and Department of Agriculture Reorganization Act of 1994 (Pub.L. 103-
354; 7 U.S.C. 2204e), food safety issues were consolidated in FSIS.
Because these statutorily mandated requirements are intended to improve
food safety, FSIS, rather than AMS, is promulgating this final rule to
revise the regulations governing the inspection of eggs and egg
products to implement the 1991 EPIA amendments. By January 1, 1999,
FSIS and AMS will publish revisions to the regulations transferring the
provisions concerning refrigeration and labeling of shell eggs from 7
CFR, Chapter I, to 9 CFR, Chapter III, so that these provisions will be
in the same title as the Federal meat and poultry products inspection
regulations.
The 1998 Appropriations for Agriculture, Rural Development, Food
and Drug Administration, and Related Agencies (1998 Appropriations)
(Pub.L. 105-86) provides that $5 million of FSIS' annual appropriation
will be available for obligation only after the Agency promulgates a
final rule to implement the refrigeration and labeling requirements
included in the 1991 EPIA amendments. The Agency is thus revising its
regulations to implement these requirements. FSIS is adopting the
proposed regulations published in 1992 concerning refrigeration and
labeling of shell eggs with some technical changes based on its review
of the proposed rule and the comments on that proposal.
In addition to the refrigeration and labeling requirements, AMS's
proposed rule included revisions to 7 CFR Part 56, Grading of Shell
Eggs and U.S. Standards, Grades, and Weight Classes for shell eggs.
FSIS is publishing this final rule on the refrigeration and labeling
requirements but is not revising part 56.
Under the 1991 EPIA amendments, USDA is responsible for enforcing
the refrigeration and labeling requirements at storage facilities and
transport vehicles of shell egg packers (21 U.S.C. 1034(e)(1) and (2)).
The Secretary of Health and Human Services is responsible for enforcing
the labeling and refrigeration requirements at food manufacturing
establishments, institutions, and restaurants, other than plants
packing eggs (21 U.S.C. 1034(e)(3)).
[[Page 45664]]
On May 19, 1998 (63 FR 27502), FSIS and the Food and Drug
Administration (FDA) published an advance notice of proposed rulemaking
(ANPR) concerning Salmonella enteritidis (SE) in eggs. Through this
notice, the Agencies are seeking to identify farm-to-table actions that
will decrease the food safety risks associated with shell eggs. The
ANPR may result in additional Agency actions concerning shell eggs.
Although this final rule may bring about a small reduction in SE risk,
it does not address many of the underlying food safety problems posed
by eggs. These problems can only be dealt with in the context of a
broader process that examines a variety of food safety issues in
addition to ambient air temperatures. Through the ANPR, FSIS and FDA
are looking at how best to address the food safety concerns of shell
eggs as part of their mutual farm-to-table HACCP strategy. Any
additional actions that may result from this process will be considered
in light of identified public health risks and available alternatives.
On June 12, 1998, FSIS completed a risk assessment concerning SE in
shell eggs and egg products in response to an increasing number of
human illnesses associated with consumption of shell eggs (FSIS,
Salmonella Enteritidis Risk Assessment, Washington, DC, June 12, 1998).
The objectives of this risk assessment are to: establish the
unmitigated risk of foodborne illness from SE, identify and evaluate
potential risk reduction strategies, identify data needs, and
prioritize future data collection efforts. This risk assessment
developed a model to assess risk throughout the egg and egg products
continuum. The risk assessment model was used to estimate the possible
benefits of this rule, as discussed below.
Comments
One hundred and fifty-nine comments were submitted in response to
the proposed rule. Thirty-one commenters, including private citizens,
State departments of agriculture, several trade associations, and
several members of the egg industry, supported the proposal. The
remainder of commenters opposed the proposed rule or suggested
alternatives to it. Commenters opposed to the rule included private
citizens, trade associations, and members of the egg industry. The
majority of comments from the egg industry opposed the rule and
suggested alternatives to it. Six comments were received after the
close of the comment period. All of these comments were generally
opposed to the proposed rule.
Size of Establishments Required to Comply With the Rule
Several small producers recommended exempting from the
refrigeration and labeling requirements producers with flocks of 5,000,
10,000, or 50,000 hens, or exempting producers that marketed a
specified number of cases of eggs or a specified number of eggs per
week, such as 500 cases per week or 1,200 eggs per week. These
producers wanted an exemption from the refrigeration requirements
because, they stated, the high costs of complying with the
refrigeration requirements would effectively force them out of
business. In contrast to these comments from small producers, several
other producers and several associations stated that all egg industry
members should be treated equally, and that no producers should be
exempt from the refrigeration and labeling requirements.
Several commenters stated that they had flocks of less than 3,000
layers but packed eggs from other producers. These commenters asked
whether the refrigeration and labeling requirements would apply to
them.
Consistent with current regulations that exempt from inspection egg
handlers with flocks of 3,000 or fewer birds (see Sec. 59.100), the
1991 EPIA amendments specify that any egg handler with a flock of 3,000
layers or less is not subject to inspection for purposes of verifying
compliance with the refrigeration and labeling requirements (21 U.S.C.
1034(e)(4)). Given this consistency, FSIS is responding to Congress's
clear intent and limiting the exemption from the refrigeration and
labeling requirements in Sec. 59.50 to egg handlers with flocks of
3,000 or fewer layers (Sec. 59.50(c)).
In response to the comments suggesting that the refrigeration and
labeling requirements should apply to all producers, the Agency points
out that the statute provides that the refrigeration and labeling
requirements in the 1991 EPIA amendments are not applicable to any egg
handler with a flock of 3,000 or fewer layers. FSIS concludes that, for
clarity, it is appropriate to reflect this fact in its regulations with
an exemption.
Egg packers who obtain eggs from other producers will not be exempt
from the refrigeration and labeling requirements. The exemption will
only apply to egg handlers with a flock of 3,000 or fewer layers who
pack eggs from their own flock. This exemption is consistent with the
exemption from registration requirements for producer-packers with an
annual egg production from a flock of 3,000 hens or less (see
Sec. 59.690).
Costs of the Rule
Approximately half the commenters stated that the rule would impose
major costs on the industry. Many small businesses stated that the
compliance costs associated with this rule could force them out of
business.
Several commenters stated that they believed that the cost
estimates in the 1992 proposed rule were too low and provided their own
cost projections. For example, one small producer stated that it would
cost its family-owned business approximately $200,000 to comply with
the requirements. One association that represents the poultry, egg, and
allied industry received information from its members on the price of
refrigerated trucks: One member estimated that a new 26 foot
refrigerated tractor trailer would cost $92,000, and another producer
stated that a used refrigerated trailer portion costs $25,000. The
association stated that, on the basis of this information, the cost of
replacing and modifying the industry's fleet might exceed the estimates
made by the Department.
In addition, several commenters stated that costs would be
particularly high because at the time the proposed rule was published,
the Environmental Protection Agency (EPA) was revising laws concerning
refrigerants. These commenters believed that, subsequent to purchasing
new refrigeration equipment to comply with the 45 deg.F refrigeration
requirements, they would again be required to replace refrigeration
equipment once the new EPA laws regarding refrigerants went into
effect.
Five members of the industry stated that the proposed rule would be
extremely costly to the entire shell egg industry. These commenters
stated that the cost analysis included in the 1992 proposed rule
ignored major costs, such as new higher powered refrigeration units for
both warehouses and vehicles, greater insulation requirements for
warehouses and vehicles, ongoing depreciation expenses per year on the
new refrigeration equipment, replacement costs of new equipment after
its useful life, yearly maintenance costs, much higher ongoing yearly
energy costs required for higher powered refrigeration units, and the
effects of inflation. These commenters stated that compliance costs
would outweigh any benefits of reducing cases of salmonellosis. In
addition, these commenters stated that the increased compliance costs
would force smaller producers and smaller distributers out of business,
resulting in layoffs and
[[Page 45665]]
higher rates of unemployment. In addition, they stated that the higher
cost of compliance would result in higher consumer prices for eggs.
The same five commenters discussed in the preceding paragraph
stated that the requirements for imported eggs could also have a
negative impact on international trade. These commenters stated that
food products prepared with shell eggs abroad may not meet the U.S.
refrigeration requirements for shell egg production. Thus, they
maintained, the refrigeration requirements would lead to restrictions
on imports of foreign food items prepared with shell eggs if
refrigeration requirements in a particular country did not meet U.S.
standards.
Finally, one association suggested costs to the industry might
increase because of increased taxes on energy consumption.
Although the Agency agrees this rule is likely to result in an
increase in costs to the industry, the 1991 EPIA amendments and the
1998 Appropriations require that FSIS promulgate this final rule. The
Agency's current cost impact analysis is discussed below, under the
heading, ``Incremental Social Costs.'' The original analysis of the
costs of the regulation was conducted in 1992. The current analysis
updates the 1992 cost estimates for inflation and changes in the State
regulatory environment. The comments submitted in response to the
analysis in the proposed rule were based on 1992 costs. For these
reasons, the Agency is providing opportunity for comment on the updated
economic impact analysis.
In the discussion of the cost to the industry, the Agency notes
that many States already have enacted laws that require ambient
temperatures of 45 deg.F for shell egg storage and transportation. As
explained below, producers in these States may not incur any
significant costs as a result of this rule. In the other States, there
is likely to be some increase in costs to the industry.
In regard to EPA laws concerning refrigerants, FSIS notes that
those laws are in effect. At this time, the industry will have met
these EPA requirements. Therefore, these regulations will not affect
industry compliance with EPA requirements.
In response to the comments on international trade, it should be
noted that the requirements in these regulations apply to imported
shell eggs that are not imported under disease restriction and are
destined for the ultimate consumer. The requirements do not apply to
other imported processed food products containing eggs.
Finally, with regard to costs that may be imposed due to taxes on
energy consumed, no significant new taxes have been imposed based on
energy consumed.
Transportation
Many comments from members of the egg industry concerned problems
with complying with the proposed transportation requirements. Some
commenters stated that the cost of complying with the transportation
requirements would be extremely high for them. Others stated that
maintaining 45 deg.F during transportation would not be possible. For
example, one company stated that its trucks average sixteen deliveries
per load, and, in certain situations, the truck doors remain open for
ten to fifteen minutes during delivery. Therefore, the company
explained, on a warm day, it is impossible to maintain the 45 deg.F
temperature in the truck. Another commenter stated that producers
servicing family-owned markets and restaurants use a truck with less
than one ton capacity, and that a truck of this size is not made with a
refrigeration unit with enough cooling capacity to maintain 45 deg.F.
One association explained that many of its members believed that the
constant opening and closing of the truck's storage compartment during
local deliveries would prevent the truck from reaching an ambient
temperature of 45 deg.F.
About 20 commenters offered a variety of alternative options for
exempting small producers from the requirement that shell eggs remain
refrigerated during transportation. These alternative options included
exempting from refrigeration requirements eggs delivered within a
certain radius of the packing facility, eggs delivered in a certain
size truck, and eggs delivered within a certain specified delivery
time.
The specific requirement of the 1991 EPIA amendments is that shell
eggs be refrigerated at 45 deg.F during transportation. Other than the
exemption for egg handlers with 3,000 or fewer layers, the statute does
not provide any exemptions from the requirement that shell eggs be
refrigerated during transportation. Therefore, the Agency has no
discretion concerning this requirement and is not making the changes in
the regulations that were requested by the commenters.
Alternative Temperature Requirements
About 15 commenters suggested that eggs should be held at
temperatures above 45 deg.F, such as 50 deg.F, 55 deg.F, or 60 deg.F.
One commenter noted that the current voluntary grading program
regulations require that eggs be kept at 60 deg.F, and that a change to
45 deg.F would be a significant change. Several commenters stated that
refrigerating eggs at 45 deg.F would cause them to ``sweat'' when they
are exposed to non-refrigerated conditions. These commenters stated
that wet eggs can allow the passage of waterborne bacteria into the
egg.
Several commenters offered suggestions for additional refrigeration
requirements. One member of the industry suggested that the rule might
be enhanced if it specified the time allowed for the shell eggs to
reach an internal temperature of 45 deg.F. Several other commenters
recommended establishing refrigeration requirements that would apply to
eggs prior to packing. For example, one State department of agriculture
suggested that shell eggs should be refrigerated at 55 deg.F or lower,
within 24 hours of being laid, until the egg is washed and packed.
The statute specifically requires that eggs packed for consumer use
be stored and transported at 45 deg.F. Therefore, the Agency has no
discretion concerning the required temperature.
In response to the suggestions concerning additional refrigeration
requirements, the 1991 EPIA amendments do not specify requirements
concerning the internal temperature of eggs or an ambient temperature
requirement for eggs that are not yet packed. However, these actions
may be considered as part of the review that flows from the joint FSIS/
FDA ANPR. FSIS or FDA may take further action in response to these
comments at a later time.
Benefits of the Regulation
Approximately 50 commenters questioned whether this regulation
would result in any health benefits. Commenters stated that safety
problems related to eggs are caused by inadequate food preparation in
restaurants and hotels, and that refrigeration by the producer will not
remedy this problem. Similarly, several commenters noted that problems
often arise because of mishandling by the consumer. Other commenters
stated that the Agency should focus efforts on specific egg production
establishments or particular regions where Salmonella has been
detected.
Five comments from members of the shell egg industry stated that
there was inadequate scientific evidence to justify the proposal, and
that available studies show that relatively few salmonellosis cases can
be attributed directly to shell eggs. Therefore, these commenters
asserted, there is a need for more complete epidemiological studies and
[[Page 45666]]
documentation of actual salmonellosis cases that are directly linked to
inadequate refrigeration of shell eggs held by producers and
distributors. These commenters noted that studies show no growth of SE
in eggs with an internal temperature of 45 deg.F; however, the
commenters explained that the internal temperature of eggs will not
reach 45 deg.F as soon as they are stored under refrigeration. They
also argued that packed eggs may never reach this temperature
throughout the distribution process. Similarly, another commenter
stated that commercial processing plants will be unable to bring eggs
to 45 deg.F before they are transported, especially when they are
packed in cartons, cased, and stacked on pallets. This commenter also
questioned whether the ambient temperature refrigeration requirements
would improve the safety of shell eggs.
In contrast, several commenters stated that they believed that
these regulations would improve the safety of shell eggs. For example,
one medical association stated that existing scientific evidence
provides a sufficient basis for requiring that shell eggs be stored and
transported in refrigerated trucks at an ambient temperature of 45
deg.F, and that this refrigeration requirement would control the
replication of SE. This commenter stated that, once the rule is
effective, reported cases of SE in humans will be markedly reduced. An
epidemiologist employed by a Federal agency stated that most human
outbreaks of SE in which shell eggs were the probable source could have
been prevented if time and temperature abuse had not taken place.
Although there is no consensus concerning the level of health
benefits these regulations may achieve, the 1991 EPIA amendments and
the 1998 Appropriations require that FSIS promulgate this final rule.
In response to concerns regarding food safety problems because of
mishandling of eggs at retail establishments, FDA may propose a rule
addressing refrigeration of eggs at retail, as discussed in the ANPR.
With regard to public education efforts, the Food Safety Education
and Communications Staff within FSIS provides information to the public
concerning numerous food safety issues, including egg-related food
safety issues. This office provides food safety education information
through USDA's Toll-Free Meat and Poultry Hotline (1-800-535-4555),
through public service announcements, printed materials, and a variety
of communication channels. In addition, FSIS makes this information
available over the Internet (URL: http://www.fsis.usda.gov/).
Finally, as noted under the heading, ``Incremental Social
Benefits,'' the Agency has estimated that these regulations would
result in a mean reduction of 1.54 percent in salmonellosis cases
related to SE in shell eggs. To estimate the reduction of the number of
salmonellosis cases that would result from the implementation of these
regulations, FSIS's risk assessment model, discussed below, was
adjusted so that all eggs were exposed to ambient temperatures of 45
deg.F or lower after packing. The risk assessment predicts that
additional measures would result in greater benefits than would result
from the ambient temperature requirements in this rule. For example,
the risk assessment predicts that maintaining ambient temperatures of
45 deg.F throughout processing and distribution (that is, from
processing through retail) will result in an eight percent average
reduction in human SE illnesses. In addition, the risk assessment model
predicts that maintaining internal temperatures of eggs at 45 deg.F
would result in a twelve percent decrease in human SE illnesses (FSIS,
Salmonella Enteritidis Risk Assessment, Washington, DC, June 12, 1998:
26-27). The Agency recognizes that requiring an internal shell egg
temperature of 45 deg.F (7.2 deg.C) would result in greater benefits
than an ambient temperature requirement; however, the statute provides
for an ambient temperature requirement only, and any such additional
requirement will have to be considered in response to the ANPR.
Labeling Requirements
Approximately 30 commenters were opposed to the labeling
requirements. Some of the commenters mistakenly believed ``warning
labels'' would be required. Others stated that the labeling provisions
were unnecessary because they believed consumers know that eggs should
be refrigerated. Finally, many of these commenters believed the
labeling requirements would be costly for producers, and that increased
costs would be incurred by consumers.
Several commenters who supported the labeling requirements
suggested requiring additional information on egg containers, such as a
``pull date'' or expiration date; a statement identifying the flock
that produced the eggs in the container; the phrase, ``keep
refrigerated at 45 deg.F or below''; and the packing date and the
packing plant number.
Three comments were from companies promoting time/temperature
indicators. The companies explained that these indicators are labels
that act as temperature recording devices and change color to indicate
the temperature at which the carton is held and the length of time the
carton is held at a particular temperature. These commenters suggested
that time/temperature indicators should be affixed to egg cartons.
Establishments can meet the labeling requirements adopted in this
rule (see Secs. 59.50(b), 59.410(a), 59.950(a)(4), and 59.955(a)(6))
simply by including the phrase, ``Keep Refrigerated,'' or words of
similar meaning, on the egg containers. Therefore, the labeling
provisions do not require a warning statement. The Agency has
determined that adding this phrase to shell egg labeling will result in
only minimal costs for producers that do not currently include this
labeling on egg cartons. Furthermore, many producers are currently
labeling egg cartons to indicate that the product should be kept
refrigerated.
With regard to the recommendations for additional labeling
requirements, the statute does not specify any additional labeling
provisions, and the Agency is not including additional labeling
requirements in these regulations.
Implementation Details
Several commenters questioned how the rule would be implemented and
provided suggestions concerning methods for measuring the temperature
in transportation vehicles and storage facilities. For example, several
commenters questioned the particular location an inspector would use
inside a cooler or a truck to obtain the ambient temperature. One
commenter recommended that the temperature should be checked at least
10 minutes after all doors are closed. One commenter asked what would
happen during a mechanical breakdown, and whether producers should use
recording thermometers both in cooler rooms and trucks. One association
suggested that inspection of coolers be handled on a case-by-case basis
because, the association explained, no two coolers are alike, and their
configurations and holding capacities differ. The association also
recommended that cooler doors be closed for at least five minutes
before temperature readings are taken, and that readings be taken in at
least three locations. This same commenter recommended that truck
inspections be limited to trucks on property not being loaded, and that
inspection of trucks occur before loading, with the door closed for at
least five minutes and refrigeration equipment operating. Finally, this
same commenter stated that when plants are
[[Page 45667]]
found to be out of compliance with the temperature regulations,
consideration should be given for re-inspection within the annual
quarter before a citation is issued.
Several commenters questioned the intent of proposed
Sec. 59.134(b). They were concerned that the provision stating that
``the perimeter of each cooler room * * * shall be made accessible''
would require that they create a walking aisle around the cooler room,
or that the entire perimeter would need to be accessible for
inspection. The commenters explained that to make the entire perimeter
accessible to an inspector would result in reduced storage capacity and
increased costs.
In response to the concerns about accessibility of the perimeter of
the cooler room, the Agency advises that it does not intend that
producers would be required to reduce storage space or create a walking
aisle. The Agency is specifying that the perimeter must be accessible
because it may often be the warmest area in the cooler, and because the
center of the cooler room is typically accessible. An establishment
could comply with the requirement that the perimeter of the cooler room
be made accessible to inspectors by locating thermometers along the
perimeter or allowing inspectors to use extension devices with attached
thermometers to obtain the temperature along the perimeter.
The rule will not be effective until a year after the publication
date. The Agency is currently considering various policy options for
monitoring industry compliance with the rule. In response to the
question concerning whether producers should use recording devices in
cooler rooms and trucks, producers may install thermometric equipment
and temperature recording devices; however, these regulations do not
require that producers do so. FSIS requests comments on implementation
of this rule.
Longer Phase-In Period
Several commenters recommended that the Department implement the
rule over a phase-in period (two commenters suggested a three-year
phase-in period), explaining that a phase-in period would provide
producers adequate time to bring their equipment into compliance.
Similarly, a small producer that expressed general support for the rule
argued that the effective date for the final rule should be extended
beyond a year from publication to allow the industry more time to meet
the refrigeration requirements.
The EPIA specifies that the refrigeration and labeling requirements
become effective 12 months after promulgation of final regulations
implementing the amendments (21 U.S.C. 1034 note). Therefore, the
Agency does not have the authority to provide for an extended phase-in
period.
Technical Suggestions
A State department of agriculture commented that the proposed
definition of ``immediate container'' is confusing and recommended
changing the phrase ``not consumer packaged,'' as used in the proposed
definition, to ``not packaged by the consumer.''
In response to the comment concerning the definition of ``immediate
container,'' the Agency points out that the phrase, ``not consumer
packaged'' refers to eggs packed for a buyer, such as a restaurant or
hotel, that buys containers of eggs larger than those for household
consumers. This definition simply provides that an immediate container
could be a carton for household consumers or a larger container for a
restaurant or other institution. To clarify the definition, FSIS has
revised it to read, ``Immediate container means any package or other
container in which egg products or shell eggs are packed for household
or other ultimate consumers.''
One commenter questioned the intent of the provision in proposed
Sec. 59.132, which stated that ``access shall not be refused at any
reasonable time to any representative of the Secretary to any plant,
place of business, or transport vehicle subject to inspection.'' This
commenter suggested wording that would provide that access be provided
to any representative of the Secretary at any time business operations
are being conducted.
In Sec. 59.132, as well as in Sec. 59.760, FSIS has removed the
phrase ``at any reasonable time,'' which the commenter questioned, for
greater consistency with the EPIA, which does not limit Agency access
to establishments (see 21 U.S.C. 1034). FSIS is also making these
changes for greater consistency with the Federal meat and poultry
inspection regulations (see 9 CFR 381.32 and 9 CFR 306.2), which do not
restrict Agency access to establishments.
The Final Rule
When these regulations become effective, egg handlers with flocks
of more than 3,000 layers will be required to comply with the new
refrigeration and labeling provisions. Consistent with current
regulations that exempt from inspection egg handlers with flocks of
3,000 or fewer birds (see Sec. 59.100), the 1991 EPIA amendments
specify that any egg handler with a flock of 3,000 layers or less is
not subject to inspection for purposes of verifying compliance with the
refrigeration and labeling requirements (21 U.S.C. 1034(e)(4)).
To monitor temperatures in storage rooms and transport vehicles,
egg handlers with flocks of more than 3,000 layers may choose to
install thermometric equipment and temperature recording devices;
however, these regulations do not prescribe the means by which egg
handlers are to comply with these provisions or to monitor their
compliance. These regulations allow establishments the flexibility to
determine how to meet the statutory requirements and how to monitor and
ensure their compliance. U.S. Department of Agriculture (USDA)
inspectors will verify that storage facilities and transport vehicles
are refrigerated at or below 45 deg.F (7.2 deg.C).
In Sec. 59.5, FSIS is adding new definitions to the regulations to
reflect the terminology in the 1991 EPIA amendments. AMS proposed
adding all of these definitions in the 1992 proposed rule. FSIS has
added the term ``ambient temperature,'' as used in the 1991 amendments,
to clarify that the 45 deg.F (7.2 deg.C) refrigeration requirement
refers to the air temperature maintained in a shell egg storage
facility or transport vehicle.
The regulations include a definition for ``ultimate consumer'' that
reflects how this term is used in the 1991 amendments. The Agency has
defined the ``ultimate consumer'' as any household consumer,
restaurant, institution or any other party who has purchased or
received shell eggs or egg products for consumption. In 1992, AMS
proposed to define this term as a household consumer, retail store,
restaurant, institution, food manufacturer or other interested party
who has purchased or received shell eggs or egg products for use or
resale. After review of the proposed language, FSIS determined that an
ultimate consumer should be defined as a party that purchases shell
eggs or egg products for consumption, rather than for use or resale.
Therefore, FSIS determined that a retail store or food manufacturer
would not be considered an ultimate consumer and has modified the
definition accordingly. The term ``ultimate consumer'' is used in the
existing regulations, and each time it is used, examples of ``ultimate
consumers'' follow the term. As was proposed, FSIS has revised
Secs. 59.28(a)(1) and 59.690 to remove these examples, because the term
will now be included in the definitions section.
[[Page 45668]]
The 1991 EPIA amendments specifically refer to eggs that have been
packed into a ``container'' and establish refrigeration requirements
for shell eggs after packing (21 U.S.C 1037(c)). To implement these
amendments, this final rule adds new language to the definition of
``container or package'' to refer to shell eggs in containers destined
for the ultimate consumer. The current definition for ``container or
package'' does not provide specific examples of a container or package
for shell eggs. Therefore, as was proposed, FSIS has revised the
definition of ``container or package'' to distinguish between
containers for egg products and containers for shell eggs. In the
definition of ``immediate container'', FSIS has modified the language
proposed in 1992 to clarify that an immediate container means any
package or other container in which egg products or shell eggs are
packed for household or other ultimate consumers. The labeling
requirements would apply to all types of containers (that is, both
immediate containers and shipping containers).
As was proposed, FSIS has revised the definition of the term ``egg
handler'' to clarify that the ultimate consumer is not considered an
egg handler.
As was proposed in 1992, FSIS is incorporating the refrigeration
and labeling requirements prescribed by the 1991 EPIA amendments for
domestic shell eggs into its regulations by adding Secs. 59.50 and
59.410(a). In these sections, FSIS has made only minor revisions to the
provisions proposed in 1992. Section 59.410(a) provides that all shell
eggs packed into containers destined for the ultimate consumer be
labeled to indicate that refrigeration is required and includes an
example of labeling that would meet this requirement, ``Keep
Refrigerated.'' The provision also allows establishments to use other
words of similar meaning.
To reflect the fact that the 1991 amendments specify that egg
handlers with flocks of 3,000 or fewer layers are not subject to
inspection for purposes of verifying compliance with refrigeration and
labeling requirements, Sec. 59.50(c) includes new language that
clarifies that producers-packers with a flock of this size are exempt
from these refrigeration and labeling requirements.
As was proposed in 1992, FSIS is amending Secs. 59.132, 59.134, and
59.760 to clarify that inspectors must be granted access to transport
vehicles and cooler rooms to verify that any shell eggs packed into
containers for the ultimate consumer are stored and transported at an
ambient temperature of no greater than 45 deg.F (7.2 deg.C). Transport
vehicles that would be subject to inspection would include containers
holding eggs that are attached to railroad cars or semi-trailer
chassis.
As discussed above, FSIS has revised the provisions proposed in
1992 under Secs. 59.132 and 59.760 to remove the phrase ``at any
reasonable time'' for greater consistency with the EPIA and for greater
consistency with the Federal meat and poultry inspection regulations.
FSIS has also revised the provision proposed in 1992 under
Sec. 59.760 to refer to representatives of the ``Secretary'' rather
than representatives of the ``Administrator.'' In the near future, FSIS
intends to revise the current definition of ``Administrator'' in this
part, which refers to the Administrator of AMS, to refer to the
Administrator of FSIS. Because AMS retains surveillance activities
under Sec. 59.760, FSIS has revised this section to refer to
representatives of the ``Secretary'' rather than representatives of the
``Administrator.'' This revision reflects a change in Agency
organization made in response to the Federal Crop Insurance Reform and
Department of Agriculture Reorganization Act of 1994.
As was proposed in 1992, FSIS has revised Sec. 59.915 to
incorporate the statutory amendment that imported shell eggs packed
into containers destined for the ultimate consumer include a
certification stating that the eggs have, at all times after packing,
been stored and transported under refrigeration at an ambient
temperature of no greater than 45 deg.F (7.2 deg.C). In addition,
Secs. 59.950 and 59.955 require that imported shell egg containers and
imported egg shipping containers be labeled to indicate that
refrigeration is required. In each of these sections, FSIS has made
only minor changes to the language AMS proposed in 1992.
Executive Order 12988
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule: (1) Has no retroactive effect; and (2)
does not require administrative proceedings before parties may file
suit in court challenging this rule. Public Law 102-237 provides that
with respect to the temperature requirements contained therein, no
State or local jurisdiction may impose temperature requirements
pertaining to eggs packaged for the ultimate consumer which are in
addition to, or different from, Federal requirements.
Executive Order 12866
FSIS is required to publish these regulations to comply with the
1991 EPIA amendments and the 1998 Appropriations. This rule has been
designated significant and was reviewed by the Office of Management and
Budget under Executive Order 12866. Executive Order 12866 requires USDA
to identify and, to the extent possible, quantify and monetize benefits
and costs associated with the rule. This section estimates these
benefits and costs. As discussed below, because of changes in State
laws concerning the refrigeration of shell eggs, FSIS has changed the
baseline that was used for determining costs in the 1992 proposed rule.
If the Agency had used the original baseline, the estimated costs would
have been higher than the estimates in this rule. In addition, the
benefits in this rule are based on the recently completed SE risk
assessment and data that were not available in 1992. The estimated
annual benefits of this rule are lower than those estimated in 1992
(see 57 FR 48572).
Incremental Social Benefits
The incremental social benefits of the rule are the avoidance of
illnesses and deaths associated with consumption of eggs contaminated
with SE. SE is a serotype of the family of pathogen Salmonella. When
the disease affects humans, it causes salmonellosis, which usually
appears 6 to 72 hours after eating contaminated eggs and egg products
and lasts up to 7 days. Symptoms of this disease include diarrhea,
abdominal cramps, fever, nausea, and vomiting (nausea and vomiting
develop in less than 50 percent of cases). Children, the elderly, and
people with compromised immune systems are particularly vulnerable to
SE infection. Deaths from SE disease occur in these vulnerable groups.
Statistics of outbreaks reported to the Centers for Disease Control and
Prevention (CDC) on foodborne diseases reveal that an increasing number
of salmonellosis cases are associated with SE; however, it should be
noted that the CDC actively contacts each State to obtain information
concerning SE but does not actively contact the States for information
on the other Salmonella serotypes.
From 1985 to 1993, consumption of eggs was associated with 83
percent of SE-related outbreaks where a food vehicle was identified
(CDC, ``Outbreak of Salmonella enteritidis Associated with Homemade Ice
Cream--Florida, 1993,'' Morbidity and Mortality Weekly Report 43(36)
(September 16, 1994): 669-671). The proportion of cases of
salmonellosis reported to CDC attributable to SE increased from 5
percent in 1976 to 26 percent in 1994 (CDC, ``Outbreaks of Salmonella
[[Page 45669]]
Serotype Enteritidis Infection Associated with Consumption of Raw Shell
Eggs--United States 1994-1995,'' Morbidity and Mortality Weekly Report
45(34) (August 30, 1996): 737-742). In 1995 and 1996, salmonellosis
cases attributable to SE represented about 25 percent of salmonellosis
cases reported to the CDC. Preliminary data from the Foodborne Diseases
Active Surveillance Network (FoodNet) indicate that SE represented 17%
of all cases of Salmonella in 1996 (FSIS, FSIS/CDC/FDA Sentinel Site
Study: The Establishment and Implementation of an Active Surveillance
System for Bacterial Foodborne Diseases in the United States, February
1997).
In the discussion below, FSIS assumes that SE cases associated with
the consumption of eggs represent 25 percent of all human salmonellosis
cases. This assumption is based on the percentage of SE cases reported
to the CDC in recent years. FSIS is using this percentage rather than
the 17 percent based on FoodNet data because the FoodNet database is
still being implemented and covers only Minnesota, Oregon, and counties
in Connecticut, Georgia, and California. In addition, only the first
year of data is available from the Foodnet. The CDC surveillance system
has been active for approximately 30 years, all States contribute to
the CDC surveillance data, and States receive incentives for
submissions to the CDC surveillance system.
In 1996, 39,027 confirmed cases of human salmonellosis were
reported to the CDC by State, local, and Federal departments of health.
From 1985 through 1996, there have been 508,673 reported cases of
salmonellosis (Centers for Disease Control and Prevention, Laboratory
Confirmed Salmonella, Surveillance Annual Summary, 1993-1995 and 1996).
Based on CDC outbreak data, the three illness-causing serotypes most
frequently reported--Salmonella typhimurium, Salmonella heidelberg, and
Salmonella enteritidis--are most often traced to poultry and eggs when
a food vehicle is found. A food vehicle is found in only about 25 to 30
percent of cases.
Since the reporting of outbreak statistics to CDC is voluntary, it
is estimated that there are an additional 20 to 100 cases of
salmonellosis for every reported case, or some 800,000 to 4 million
cases per year (R. Chalker and M. Blaser, ``A Review of Human
Salmonellosis: III. Magnitude of Salmonella Infection in the United
States,'' Review of Infectious Diseases 10(1) (1988): 111-124). The
severity of the underreported cases as well as their statistical
distribution is unknown and hence this analysis could not adjust for
such probabilities. The estimate of 800,000 to 4 million is based on
the number of cases reported to the CDC surveillance system through
1996 and is confirmed by the data for the 1988-92 period.
Table 1.--Health and Economic Benefits of Refrigerating Eggs at 45 deg.F Rule: Low Benefits Estimates
----------------------------------------------------------------------------------------------------------------
Upper bound of health costs
Annual number of egg-related human SE Lower bound of health costs associated associated with column 1 in $
cases with column 1 in $ (1996) \1\ (1996) \2\
----------------------------------------------------------------------------------------------------------------
661,633 \3\.......................... $225 million.............................. $900 million.
----------------------------------------------------------------------------------------------------------------
Estimated Reduction in Egg-Related SE Cases due to 45 deg.F Refrigeration \4\
----------------------------------------------------------------------------------------------------------------
Health benefits (number of cases Lower bound of economic benefits Upper bound of economic
avoided) associated with column (1) $ (1996) benefits associated with
column (1) in $ (1996)
----------------------------------------------------------------------------------------------------------------
10,189............................... $3.47 million............................. $13.86 million.
----------------------------------------------------------------------------------------------------------------
\1\ Jean C. Buzby and Tanya Roberts, ``Guillain-Barre Syndrome Increases Foodborne Disease Costs,'' Food Review
(September-December 1997): 36-42. This report provides an estimate of costs of total human Salmonella cases
from all food sources. The costs estimated in this table assume that egg-related SE cases represent 25% of
total human salmonellosis cases. The report estimates the lower bound of the low estimate of health care costs
at $900 million.
\2\ Ibid. The report estimates the upper bound of the low estimate of health care costs at $3.6 billion.
\3\ FSIS, Salmonella Enteritidis Risk Assessment, Washington, DC, June 12, 1998. The number shown in the chart
is the estimated mean number of salmonellosis cases resulting from the consumption of SE-contaminated eggs.
The estimated number of cases per year in the Risk Assessment ranges from 126,374 to 1.7 million.
\4\ FSIS, Salmonella Enteritidis Risk Assessment, Washington, DC, June 12, 1998. The risk assessment model
estimates that refrigeration of eggs at 45 deg.F during storage and transportation will result in a mean
reduction of 1.54% in human SE cases.
Table 2.--Health and Economic Benefits of Refrigerating Eggs at 45 deg. F Rule: High Benefits Estimates
----------------------------------------------------------------------------------------------------------------
Upper bound of health costs
Annual number of egg-related human SE Lower bound of health costs associated associated with column 1 in $
cases with column 1 in $ (1996) \5\ (1996) \6\
----------------------------------------------------------------------------------------------------------------
661,633 \7\.......................... $1.2 billion.............................. $3.075 billion.
----------------------------------------------------------------------------------------------------------------
[[Page 45670]]
Estimated Reduction in Egg-Related SE Cases due to 45 deg.F Refrigeration \8\
----------------------------------------------------------------------------------------------------------------
Health benefits (number of cases Lower bound of economic benefits Upper bound of economic
avoided) associated with column (1) $ (1996) benefits associated with
column (1) in $ (1996)
----------------------------------------------------------------------------------------------------------------
10,189............................... $18.48 million............................ $47.355 million.
----------------------------------------------------------------------------------------------------------------
\5\ Jean C. Buzby and Tanya Roberts, ``Guillain-Barre Syndrome Increases Foodborne Disease Costs,'' Food Review
(September-December 1997): 36-42. This report provides an estimate of costs of total human Salmonella from all
food sources. The costs estimated in this table assume that egg related SE cases represent 25% of all human
salmonellosis cases. The report estimates the lower bound of the high estimate of health care costs at $4.8
billion.
\6\ Ibid. The report estimates the upper bound of the high estimate of health care costs at $12.3 billion.
\7\ FSIS, Salmonella Enteritidis Risk Assessment, Washington, DC, June 12, 1998. The number shown in the chart
is the estimated mean number of salmonellosis cases resulting from the consumption of SE-contaminated eggs.
The estimated number of cases per year in the Risk Assessment ranges from 126,374 to 1.7 million.
\8\ FSIS, Salmonella Enteritidis Risk Assessment, Washington, DC, June 12, 1998. The risk assessment model
estimates that refrigeration of eggs at 45 deg.F during storage and transportation will result in a mean
percent reduction of 1.54% in human SE cases.
Tables 1 and 2 show an estimated number of annual human illnesses
resulting from consumption of SE-contaminated eggs. This number is
based on the mean estimated annual number of cases in the Salmonella
Enteritidis Risk Assessment published by FSIS (June 12, 1998). This
report estimates that the number of cases of illness resulting from
consumption of SE-contaminated eggs ranges from 126,374 to 1.7 million
per year. The Agency is using data from the risk assessment rather than
the number of reported cases because, as noted above, it is estimated
that there are an additional 20 to 100 cases of salmonellosis for every
reported case. Tables 1 and 2 display the mean estimate because the
mean is not unduly affected by a few moderately small or moderately
large values, and this stability increases with the sample size. To
estimate the economic value of the health costs of salmonellosis, the
USDA's Economic Research Service (ERS) related illnesses and deaths to
four types of severity groups of patients. The four severity groups
were: (1) those who did not visit a physician, (2) those who visited a
physician, (3) those who were hospitalized, and (4) those who died
prematurely because of their illness (Jean C. Buzby and Tanya Roberts,
``Guillain-Barre Syndrome Increases Foodborne Disease Costs,'' Food
Review (September-December 1997): 36-42). Similar severity rates are
also used in the risk assessment final report, e.g., treatment by a
physician, hospitalization, and mortality. Both sources use the CDC
data on severity.
Based on the avoidance of medical costs, ERS estimated the economic
values of prevention of these cases. ERS calculated the range of low
estimate of avoidance of all foodborne human salmonellosis-linked
diseases and deaths, at $900 million and $3.6 billion respectively (in
1996 dollars). ERS calculated the range of high estimate of the health
costs at $4.8 billion and $12.3 billion (in 1996 dollars). The wide
variation in this range of estimates is attributed both to the wide
range in estimates of the number of cases and the economic methods used
for the analysis.
The economic methods are the human capital method and the labor
market method. The human capital method yields a lower estimated range
of $0.9 to $3.6 billion because the cost of premature death in this
analysis varies with age and ranged from $15,000 to $2,037,000 (in 1996
dollars). The labor market approach yields the higher range of $4.8 to
$12.3 billion because it values the cost of premature death at $5
million per person (in 1996 dollars) (Jean C. Buzby and Tanya Roberts,
``Guillain-Barre Syndrome Increases Foodborne Disease Costs,'' Food
Review (September-December 1997): 36-42).
Since the ranges of estimates for salmonellosis-related costs
estimated by Buzby and Roberts are based on salmonellosis from all food
sources, it is necessary to adjust the estimates downwards to obtain
only the cases of salmonellosis related to consumption of SE-
contaminated eggs. The medical cost data shown in the first rows of
Tables 1 and 2 represent 25 percent of the ERS estimates because FSIS
assumes that SE-contaminated eggs are responsible for approximately 25
percent of salmonellosis cases. This assumption is based on the
percentage of SE cases reported to the CDC and the fact that eggs are
responsible for the vast majority of these cases. As noted above, from
1985 to 1993, consumption of eggs was associated with 83 percent of SE-
related outbreaks where a food vehicle was found. Also noted above, a
food vehicle is found in only about 25 to 30 percent of cases. Given
the level of uncertainty in this data, for estimation purposes, the
Agency believes it is appropriate to assume that SE-contaminated eggs
are responsible for 25 percent of total salmonellosis cases.
Humphrey and Whitehead (1993) suggest that an egg's contents can
become contaminated with SE before the egg is laid. They also note that
after an infected egg is laid, SE contamination tends to grow inside
the egg (T. Humphrey and A. Whitehead, ``Egg Age and Growth of
Salmonella Enteritidis PT4 in Egg Contents,'' Epidemiological Infection
111 (1993): 209-219). Humphrey suggested that refrigerating during
storage can prevent such growth (T.J. Humphrey, ``Growth of Salmonella
in intact shell eggs: Influence of Storage Temperature,'' Veterinarian
Record (1990): 1236-1292). Other measures for preventing growth include
refrigeration during transportation and retail sales, reducing shelf
life of eggs at retail, thorough
[[Page 45671]]
cooking, pasteurization, and processing shell eggs into frozen, liquid,
or dry egg products (FSIS, Salmonella Risk Assessment, June 12, 1998;
T. Hammack, et al., ``Research Note: Growth of Salmonella Enteritidis
in Grade A Eggs During Prolonged Storage,'' Poultry Science 334 (1993):
1281-1286).
In order to determine the benefits of refrigerating eggs at
45 deg.F, it is necessary to determine the percentage of reduction in
the number of egg-related deaths and illnesses from SE cases referred
to above. To determine these benefits, this analysis relied on input
from a risk assessment model. In June 1998, FSIS completed a risk
assessment concerning shell eggs and egg products in response to an
increasing number of human illnesses associated with the consumption of
shell eggs. The risk assessment developed a model to assess risk
throughout the egg and egg products continuum. The risk assessment
model consists of five modules. The first module, the Egg Production
Module, estimates the number of eggs produced that are infected (or
internally contaminated) with SE. The Shell Egg Module, the Egg
Products Module and the Preparation and Consumption Module estimate the
increase or decrease in the number of SE organisms in eggs or egg
products as they pass through storage, transportation, processing and
preparation. The Public Health Module then calculates the incidences of
illnesses and four clinical outcomes (recovery without treatment,
recovery after treatment, treatment by a physician, hospitalization,
and mortality) as well as the cases of reactive arthritis associated
with consuming SE positive eggs.
Refrigeration of shell eggs at an ambient air temperature of
45 deg.F or below during storage and transportation will retard growth
of SE and hence is likely to reduce the associated illnesses and
deaths. The risk assessment model estimates that refrigeration of shell
eggs at an ambient temperature of 45 deg.F or below can bring about a
mean reduction of 1.54 percent in egg-related human illnesses
associated with SE. This estimate has a 90 percent confidence interval,
with a lower bound of 0 percent and an upper bound of 7 percent.
Therefore, there is a range of possible outcomes. Although a 1.54
percent reduction in illnesses associated with SE is the most likely
outcome, the regulation could result in no reduction in illnesses or in
a reduction as high as 7 percent. This estimate and its confidence
interval are based on a model with the assumption that eggs are
maintained at an ambient temperature of 45 deg.F after processing
through transportation to retail, or other, end users. This result also
assumes complete compliance with the regulation. The effect of the
regulation was modeled by adjusting the baseline model (consisting of
the Production, Shell Egg Processing/Transportation, Preparation/
Consumption, and Public Health modules) to reflect the regulation's
effect. The model adjusted the following temperature variables in the
Shell Egg Processing/Transportation module: Storage temperature after
processing at off-line processor, Storage temperature after processing
at in-line processor, Temperature during transportation to egg users.
In the baseline model, these variables were modeled as extending from a
low of 41 deg.F, in the case of the storage temperature after
processing at in-line processors, to a high of 90 deg.F. The baseline
model assumes that eggs are handled under a variety of different
temperatures. In modeling the regulation, these variables'
distributions were truncated at 45 deg.F. Therefore, all eggs were
exposed to ambient temperatures of 45 deg.F or less after packing in
the regulation model. The effect of the regulation was calculated as
the difference in simulated total human cases between the baseline
model and the regulation model. The percent reduction in human
illnesses was then calculated by dividing this difference in human
cases by the simulated total human cases from the baseline model. It
must be noted that the estimated mean reduction in SE illnesses of 1.54
percent referred to above was estimated in a separate run of the model
for this rule performed by FSIS scientists and is not included in the
risk assessment final report. As noted above, the risk assessment final
report estimates the benefits that would result from maintaining an
ambient temperature of 45 deg.F throughout processing and distribution
(that is, from pre-packing and through retail) and the benefits of
maintaining the internal temperature of eggs at 45 deg.F throughout
processing and distribution.
The last rows in Tables 1 and 2 show the reductions in SE cases
associated specifically with refrigeration of shell eggs based on the
mean value of 1.54 percent reduction in cases referred to above. These
are the incremental social benefits of the rule. These estimates range
from a low of $3.47 million to $13.86 million in Table 1 to a range of
$18.48 million to $47.355 million in Table 2 (in 1996 dollars).
Requiring refrigeration of eggs at an ambient air temperature of
45 deg.F does not address all the food safety risks posed by shell
eggs. Responses to the ANPR will assist FSIS and FDA in the development
of a comprehensive, farm-to-table food safety strategy that will
address a variety of food safety measures in addition to ambient air
temperature. Actions taken subsequent to the analysis of alternatives
identified in the ANPR may provide additional benefits associated with
further reductions in foodborne illness associated with the consumption
of shell eggs.
As noted above, FSIS and FDA have published an ANPR concerning SE
in shell eggs (63 FR 27502; May 19, 1998). The number of cases in
Tables 1 and 2 are larger than those reported in the ANPR (63 FR 27504)
because the figures in the ANPR are based on outbreaks reported to the
CDC, while the data on Tables 1 and 2 take into account the fact that
many of the cases are unreported. In addition, the cost of illnesses in
Tables 1 and 2 differ from those in the ANPR (63 FR 27504) because the
estimates in the ANPR were based on 1991 data. FSIS used 1996 data for
the cost and benefit analysis in these regulations.
Incremental Social Costs
The incremental social costs associated with the rule include the
first year fixed capital costs and the annual recurring costs of
compliance to be incurred by the industry. The first year costs would
include the costs of replacing or retrofitting refrigeration units,
compressors, and coils. These capital costs are required for storing
shell eggs at 45 deg.F or below after washing and packing. The capital
costs to the industry would also include the costs of replacing or
retrofitting transportation vehicles that have refrigeration units
capable of producing air at 45 deg.F or below. The annual recurring
costs would encompass the energy costs of maintaining ambient
temperatures in storage facilities and transportation vehicles at
45 deg.F or below. These capital and recurring costs would be incurred
either by shell egg producers or by their contractors for storage and
transportation. When the storage or transportation services are
contracted out, however, it is very difficult to separate the costs
associated with shell eggs because these contractors store or haul not
only shell eggs but also several other products.
An additional element of the social costs would be the incremental
budgetary costs, if any, to USDA for enforcing this regulation. The
Agency has not determined how it will enforce this rule. AMS may check
the ambient temperature of shell egg storage
[[Page 45672]]
facilities and the labeling of shell egg containers during its
surveillance of egg handlers and during grading activities. FSIS
compliance officers may check the ambient temperature of shell egg
storage facilities and transportation vehicles and the labeling of
shell egg containers once the eggs leave the plant. For example, while
compliance officers are checking meat and poultry products in commerce
outside inspected establishments or at uninspected facilities, if such
facilities store shell eggs, compliance officers may also check
temperatures at these locations and verify that the labeling of egg
containers meets the requirements in this rule.
Whether AMS or FSIS checks the temperature of shell egg storage
facilities and transport vehicles and verifies that the labeling of egg
containers meets the requirements in this rule, these activities are
likely to be in addition to other Agency activities conducted at the
same location. Checking temperatures and labeling will increase the
time required for AMS or FSIS personnel to conduct their oversight
activities. However, FSIS is unable to determine the amount of
additional time that will be required. Therefore, the Agency is unable
to estimate the additional costs (e.g., personnel costs and costs of
equipment such as thermometers) that will be required for monitoring
compliance with the requirements in this rule.
The costs of compliance to the industry are not likely to be
excessive for three reasons. First, the rule exempts small producers
with flocks of 3,000 layers or less. There are approximately 80,000
such small egg producers that would not be required to comply with the
refrigeration and labeling provisions of this rule.
Second, of the approximately 700 producers currently registered
with USDA as of July 1998, 329 are major producers with flocks of
75,000 or more who produce about 94 percent of U.S. table eggs. Most of
these producers are members of United Egg Producers (UEP), an
organization that provides a variety of services to member egg
producers. The UEP already has a quality assurance program that
recommends refrigerating eggs at 45 deg.F or below as quickly as
possible after washing and grading and that the same temperature be
maintained during transportation. A letter from UEP indicated that many
of these producers have already started refrigerating at 45 deg.F or
below. Therefore, these producers are unlikely to incur additional
costs of compliance. (This aspect is elaborated later in a section on
the Regulatory Flexibility Act (RFA).) It is likely that most producers
that are not members of UEP or are not major producers have also begun
refrigerating shell eggs during storage and transportation because of
State requirements (discussed below). With regard to producers that are
not members of the UEP or are not major producers, specific information
regarding whether they store and transport shell eggs at 45 deg.F is
not available. The structure of egg industry is changing toward greater
concentration of large producers. For example, the number of producers
registered with AMS has declined from about 1,200 in 1992 to
approximately 700 in July, 1998. The resulting concentration of larger
producers who refrigerate their supplies is likely to have reduced the
costs of compliance.
Third, many States have already enacted laws requiring specified
ambient air temperatures for shell egg storage and transportation.
Approximately one-half of all States require 45 deg.F or less for
storage and transportation. Approximately ten of these States have
adopted 45 deg.F refrigeration requirements since 1992. Some of these
States are large producers. Many States also require that shell eggs be
refrigerated at 45 deg.F at retail. Approximately ten States retain the
60 deg.F traditionally required under USDA grading standards.
Approximately one dozen States have no refrigeration requirement for
shell egg storage and transportation. Costs of compliance for the shell
egg producers in the States already requiring refrigeration at 45 deg.F
are not likely to increase significantly. Some of the States that
require 45 deg.F refrigeration of shell eggs during storage and
transportation are among States in which major producers are located,
e.g., Ohio, Pennsylvania, and Georgia. However, there are States with
major producers and other producers that do not require 45 deg.F
refrigeration during storage and transportation of shell eggs. The
Agency requests information concerning the costs these regulations may
impose on producers who are currently not refrigerating shell eggs at
45 deg.F during storage and transportation. The Agency also requests
information concerning the size of these establishments.
The rule proposed on October 27, 1992 for refrigerating shell eggs
at 45 deg.F or below estimated the first-year capital investment costs
at $40.67 million (57 FR 48571). The annual recurring operating costs
were estimated at $10 million. The capital investment costs involved
replacing or retrofitting existing refrigeration units with larger
compressors or coils. The recurring annual operating costs involved the
energy costs of maintaining ambient air temperatures in storage
facilities and transport vehicles at 45 deg.F or below. These cost
estimates were based on data obtained from a survey of 80 (7 percent)
out of the 1200 shell egg processing plants located throughout the
country representing about 25 percent of production. 59 plants (75
percent) responded to the survey. The Agency was unable to evaluate the
comments regarding the specific large costs of acquiring trucks and
equipment because the survey did not contain such detailed data.
The costs to comply with this final rule will be lower than the
costs estimated for the proposed rule in 1992 because about ten States
(e.g., Arkansas, Florida, Georgia, Louisiana, Ohio, Oregon, Rhode
Island, and Texas) have already adopted refrigeration requirements at
45 deg.F or below for storage and transportation since 1992. These
States represented 29 percent of shell egg production in 1996. FSIS
updated the 1992 estimates to account for inflation and changes in
State laws. The Agency requests specific information concerning costs
that will be incurred in States that have not enacted refrigeration
requirements.
The costs estimated in 1992 were not adjusted upward for any of the
comments to the proposed rule because about 10 States have implemented
the 45 deg.F refrigeration requirements since 1992. Since about ten out
of fifty States representing 29 percent of production have implemented
the rule since 1992, this analysis reduced the capital and recurring
costs estimated in 1992 by 29 percent. This adjustment reduced the
capital and recurring costs to $28.40 million and $7.1 million
respectively. Therefore, costs were reduced based on shell egg
production data. FSIS reduced costs based on production data because
the 1992 costs were estimated and reported on a production basis (see
57 FR 48571-48572). The fact that the number of producers has declined
since 1992 may further lower the costs to the industry because a
smaller number of larger producers tend to have lower costs due to
scale economies.
The updated costs referred to above were adjusted upwards because
of inflation over the last six years. To adjust for this increase, FSIS
increased the $28.40 million capital costs by 8 percent (based on U.S.
Department of Commerce, Bureau of Economic Analysis, price index of
transportation and related equipment index, 1992 = 100, 1997 = 108.5).
This adjustment increased the capital cost estimate from
[[Page 45673]]
$28.40 million to $30.67 million, or $31 million approximately.
The updated recurring costs of compliance, estimated at $7 million
per year in 1992, were assumed to comprise mostly energy costs of
refrigeration. These estimates were increased for inflation over the
last six years to $7.63 or $8 million approximately (based on U.S.
Department of Commerce, Bureau of Economic Analysis, Price Index of
Electricity and Gas, 1992 = 100, 1997 = 108.98, or by 9 percent). FSIS
requests alternate cost estimates and data to support these estimates
from commenters who disagree with the Agency's cost estimates.
The estimated costs of compliance and the associated social
benefits of this rule are likely to be realized over the next twenty
years. Therefore, these costs and benefits were discounted over this
time span by using a 7 percent mid-year discount rate recommended by
the Office of Management and Budget.
Table 3 reports FSIS estimates of the discounted costs and benefits
of the rule under alternative assumptions about cost of salmonella
induced foodborne illness. Depending on the assumption used, the
estimated net benefits range from -$79.6 million to $401.30 million.
Under the assumption that the cost of foodborne illness varies with
age, the net benefits from the rule range from -$79.6 million to $34.2
million. Alternatively, if it is assumed that the cost of premature
death is $5 million per person, the net benefits from the rule are
higher, from $84.9 million to $401.3 million. In light of the
uncertainty surrounding the benefit estimates and refinements to costs,
FSIS cannot make a definitive statement about the net benefits
associated with the rule.
Table 3.--Discounted Benefit-Cost Estimates of Refrigerating Shell Eggs
[Fixed Costs=$31 million, Recurring Costs=$8 million]
----------------------------------------------------------------------------------------------------------------
Lower bound Upper bound
Lower bound Upper bound of high of high
of low est. of low est. est. est.
----------------------------------------------------------------------------------------------------------------
Recurring benefits: ($ million)............................. 3.47 13.86 18.48 47.36
Discounted Benefits*: ($ m.)................................ 38.03 151.88 202.51 518.93
Discounted Costs*: ($ m.)................................... 117.63 117.63 117.63 117.63
Net Discounted Benefits: (Row 2-Row 3) ($ m.)............... -79.60 34.17 84.88 401.30
Benefit-Cost Ratio: (Row 2:Row 3)........................... 0.32 1.29 1.72 4.41
----------------------------------------------------------------------------------------------------------------
*Discount Rate=7%, Time Period=20 years.
Source: Tables 1 and 2.
The preceding costs are likely to be passed on to consumers by the
industry because of the elasticity of demand and supply of eggs. The
demand for shell eggs is very inelastic, i.e., an increase in the price
of shell eggs is not likely to reduce significantly the demand for
them. For example, Kuo reports that the price elasticity of demand for
shell eggs is only (-0.11), i.e., an increase in price by one percent
is associated with only 0.11 percent decrease in quantity of shell eggs
demanded (Huang S. Kuo, A Complete System of U.S. Demand for Food,
USDA/Economic Research Service, Technical Bulletin No.1821, 1993,
Appendix B and C).
The inelastic demand is due to the fact that there are no good
substitutes for eggs that consumers might use when prices of shell eggs
are increased. Also, a typical consumer spends an insignificant
proportion of the food budget on shell eggs and consumes a limited
number of eggs.
The supply of shell eggs is very elastic because this industry has
hundreds of producers who can increase the supply of eggs with little
increase in costs. This prevents price increases by any single producer
and no producer can increase prices without losing significant market
share. Therefore, egg prices have been stable, if not declining, for
several years. For example, wholesale egg prices declined from 91.5
cents/dozen in 1996 to 83.8 cents/dozen in 1997. In the first quarter
of 1998, this price declined to 82.5 cents/dozen. The average retail
price of grade A large eggs was $1.1063/dozen in 1997 (U.S. Department
of Labor/Bureau of Labor Statistics). Per capita consumption of eggs
increased only slightly, from 237.8 eggs in 1996 to 239.3 eggs in 1997.
Regulatory Flexibility Act (RFA)
The Administrator has determined that this rule will not have a
significant economic impact on a substantial number of small entities.
As noted above, this rule exempts from compliance small producers with
flocks of 3,000 layers or less. Most of the establishments not exempt
from this rule are small establishments with employment of 500 or less.
Also, the compliance costs are likely to be spread over a large volume
of output that will be produced over the life cycles of these capital
assets (e.g., refrigeration equipment). For example, according to the
National Agricultural Statistics Service, 5.456 billion dozen eggs were
produced between January 1, 1997 and December 31, 1997. During that
time, the wholesale price for table eggs, estimated by ERS, was 83.8
cents per dozen, and the gross industry receipts were estimated at
$3.96 billion. Therefore, the compliance costs would represent less
than a penny per dozen eggs or less than one percent of revenues. Since
these first year costs include nonrecurring capital costs for storage
facilities and refrigerated vehicles, the impact on the industry would
be substantially less in subsequent years. For example, the recurring
costs in the subsequent years were estimated at $9 million per year.
This cost would represent primarily the energy cost of generating
refrigeration and the maintenance and replacement costs of storage
facilities. The relative impact on small producers would be
insignificant also because the current structure of the shell egg
industry is more concentrated than in 1992. For example, currently
there are only about 700 producers, compared to about 1,200 producers
in 1992. The smaller number of producers with increased output is
likely to have resulted in a greater concentration of larger firms in
this industry. These larger firms are more likely to absorb the
compliance costs relative to smaller firms. FSIS notes that increased
costs will not be evenly distributed across the industry because some
producers are currently storing and transporting shell eggs at 45
deg.F, while others are most likely storing and transporting shell eggs
at higher temperatures.
The shell egg industry would be able to ``pass through'' this cost
in the form of higher prices to consumers because, as noted earlier,
demand for this product is very inelastic and the supply
[[Page 45674]]
of shell eggs is highly elastic. The inelasticity of the demand follows
from the fact that household expenditures on eggs are a small share of
household budgets and because substitutes for eggs--at least in some
applications--are limited. The high elasticity of supply is based on
the fact that there are hundreds of shell egg producers in the U.S.
with relatively flat marginal cost curves. Thus, producers expand egg
production with little increase in average costs.
The rule would not be burdensome to other small entities such as
State and local governments because they are not in the business of
storage and transportation of shell eggs. However, to the extent State
and local governments are consumers of eggs, they will pay a little
more for eggs.
Alternatives to the Rule
FSIS considered several alternatives to this rule. FSIS found the
alternatives, which are described below, to be inferior to this rule
because of their expected benefits and costs, administrative burden,
efficiency, and equity.
No Action
This alternative would continue the current practice of no Federal
requirement for refrigeration of shell eggs. The public health benefit
would be zero because this alternative would not reduce Salmonella
related illness. FSIS considered and rejected this alternative because,
as noted above, the EPIA amendments mandate promulgation of this rule.
In addition, as noted earlier, the Appropriations Committee has
withheld $5 million of the FSIS appropriated funds for Fiscal Year 1998
until a final rule is promulgated to implement the refrigeration and
labeling requirements included in the 1991 EPIA amendments. A loss of
$5 million in the Agency's appropriation is likely to impair FSIS's
inspection activities, and degrade food safety in general.
Sliding Scale Approach
This alternative does not require maintenance of a specific ambient
temperature, such as the 45 deg.F rule does. Under this approach, a
specific ``sell-by'' date is mandatory, which would vary depending on
the temperatures at which eggs are maintained. To provide an incentive
for processors to chill eggs before shipping, yet retain flexibility to
accommodate reasonable alternatives to an absolute temperature
requirement, a regulation might prescribe a range of ``sell-by'' dates
based on the egg temperature achieved by the packer. Such an approach
is under consideration by the European Union but is not recommended for
the U.S. because of differences in climate, and vast distances in the
U.S. relative to within or even between countries in Europe. This
alternative would be burdensome to the industry and difficult to
implement because it would require detailed recordkeeping by the
industry. Some public health benefits would be expected and would
depend on the sell-by date/temperature matrix. Industry costs would
depend on the matrix and which temperatures producers select. Finally,
this alternative would be very difficult to enforce since USDA
inspectors would have to keep track of hundreds of shell egg producers
and billions of dozens of eggs.
State Rules Instead of Federal Rule
FSIS considered the alternative of actively encouraging State
governments to promulgate their own laws instead of a Federal rule but
did not adopt it for several reasons. First, as noted earlier, about
half of all States currently have laws requiring refrigeration of shell
eggs at 45 deg.F. On the other hand, some States do not have any
refrigeration requirements for shell eggs. Other States require
refrigeration during storage but not during transportation. Some States
require refrigeration of shell eggs at temperatures greater than
45 deg.F. In contrast to these inconsistencies and non-uniformities,
with the exception of shell eggs packed by egg handlers with 3,000 or
fewer hens, this rule requires that all shell eggs packed in containers
for the ultimate consumer be refrigerated during storage and
transportation at 45 deg.F or below. The public health benefits of this
alternative are expected to be zero, since this alternative is
essentially the same as no action except that States would be put on
notice that they should deal with public health risks from eggs.
In view of the disparities within and across the States, FSIS
determined that it would not be appropriate to defer to the States.
Summary and Conclusions
This section analyzed compliance of this rule with Executive Order
12866. It estimated discounted social benefits of the rule and
juxtaposed them against discounted capital and operating costs of
compliance with the rule. The analysis concluded that potential net
social benefits may result from this rule.
This section also analyzed compliance of this rule with the
Regulatory Flexibility Act. It is concluded that the costs of
compliance are not likely to have a significant economic impact on a
substantial number of small entities because the industry's cost of
compliance amounts to less than a penny per dozen eggs, demand for eggs
is inelastic, and the supply of eggs is highly elastic. In short, the
egg producers could easily ``pass through'' the costs of compliance to
consumers without losing their market shares. Other small entities such
as local and State governments are also not likely to be adversely
affected by this rule because they are not in the business of
producing, storing, or transporting shell eggs. To the extent that they
are large buyers of eggs, they would be adversely impacted by the
estimated increase in price of a penny per dozen eggs.
Finally, this section analyzed several alternatives to the rule.
These alternatives included: (1) no action, (2) sliding scale approach,
and (3) State rules instead of a Federal rule. These alternatives were
rejected because of their costs, administrative burden, efficiency, or
equity.
Paperwork Requirements
The paperwork and recordkeeping activities associated with this
rule are approved under OMB control number 0583-0106.
List of Subjects in 7 CFR Part 59
Eggs and egg products, Exports, Food grades and standards, Food
labeling, Imports, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, FSIS is amending 7 CFR
Part 59 as follows:
PART 59--INSPECTION OF EGGS AND EGG PRODUCTS (EGG PRODUCTS
INSPECTION ACT)
1. The authority citation for part 59 continues to read as follows:
Authority: 21 U.S.C. 1031-1056.
2. Section 59.5 is amended by adding alphabetically the definitions
for ``Ambient temperature'' and ``Ultimate consumer'' and revising the
definitions for ``Container or Package'' and ``Egg handler'' to read as
follows:
Sec. 59.5 Terms defined.
* * * * *
Ambient temperature means the air temperature maintained in an egg
storage facility or transport vehicle.
* * * * *
Container or Package includes for egg products, any box, can, tin,
plastic, or other receptacle, wrapper, or cover and for shell eggs, any
carton, basket, case, cart, pallet, or other receptacle.
[[Page 45675]]
(a) Immediate container means any package or other container in
which egg products or shell eggs are packed for household or other
ultimate consumers.
(b) Shipping container means any container used in packing an
immediate container.
* * * * *
Egg handler means any person, excluding the ultimate consumer, who
engages in any business in commerce that involves buying or selling any
eggs (as a poultry producer or otherwise), or processing any egg
products, or otherwise using any eggs in the preparation of human food.
* * * * *
Ultimate consumer means any household consumer, restaurant,
institution, or any other party who has purchased or received shell
eggs or egg products for consumption.
* * * * *
3. Section 59.28 is amended by revising the first two sentences in
paragraph (a)(1) to read as follows:
Sec. 59.28 Other inspections.
(a) * * *
(1) Business premises, facilities, inventories, operations,
transport vehicles, and records of egg handlers, and the records of all
persons engaged in the business of transporting, shipping, or receiving
any eggs or egg products. In the case of shell egg packers packing eggs
for the ultimate consumer, such inspections shall be made a minimum of
once each calendar quarter. * * *
* * * * *
4. A new undesignated centerhead and new Sec. 59.50 are added to
read as follows:
Refrigeration of Shell Eggs
Sec. 59.50 Temperature and labeling requirements.
(a) No shell egg handler shall possess any shell eggs that are
packed into containers destined for the ultimate consumer unless they
are stored and transported under refrigeration at an ambient
temperature of no greater than 45 deg.F (7.2 deg.C).
(b) No shell egg handler shall possess any shell eggs that are
packed into containers destined for the ultimate consumer unless they
are labeled to indicate that refrigeration is required.
(c) Any producer-packer with an annual egg production from a flock
of 3,000 or fewer hens is exempt from the temperature and labeling
requirements of this section.
5. Sec. 59.132 is revised to read as follows:
Sec. 59.132 Access to plants.
Access shall not be refused to any representative of the Secretary
to any plant, place of business, or transport vehicle subject to
inspection under the provisions of this part upon presentation of
proper credentials.
6. Sec. 59.134 is amended by revising the section heading,
designating the existing text as paragraph (a), and adding a new
paragraph (b) to read as follows:
Sec. 59.134 Accessibility of product and cooler rooms.
* * * * *
(b) The perimeter of each cooler room used to store shell eggs
packed in containers destined for the ultimate consumer shall be made
accessible in order for the Secretary's representatives to determine
the ambient temperature under which shell eggs are stored.
7. Section 59.410 is amended by revising the section heading,
designating the existing text as paragraph (b), and adding a new
paragraph (a) to read as follows:
Sec. 59.410 Shell eggs and egg products required to be labeled.
(a) All shell eggs packed into containers destined for the ultimate
consumer shall be labeled to indicate that refrigeration is required,
e.g., ``Keep Refrigerated,'' or words of similar meaning.
* * * * *
8. Section 59.690 is amended by revising the first sentence to read
as follows:
Sec. 59.690 Persons required to register.
Shell egg handlers, except for producer-packers with an annual egg
production from a flock of 3,000 hens or less, who grade and pack eggs
for the ultimate consumer, and hatcheries are required to register with
the U.S. Department of Agriculture by furnishing their name, place of
business, and such other information as is requested on forms provided
by or available from the U.S. Department of Agriculture. * * *
9. Section 59.760 is revised to read as follows:
Sec. 59.760 Inspection of egg handlers.
Duly authorized representatives of the Secretary shall make such
periodic inspections of egg handlers, their transport vehicles, and
their records as the Secretary may require to ascertain if any of the
provisions of the Act or this part applicable to such egg handlers have
been violated. Such representatives shall be afforded access to any
place of business, plant, or transport vehicle subject to inspection
under the provisions of the Act.
10. Section 59.915 is amended by revising the section heading, by
removing the word ``and'' at the end of paragraph (b)(8), by
redesignating paragraph (b)(9) as paragraph (b)(10) and by adding a new
paragraph (b)(9) to read as follows:
Sec. 59.915 Foreign inspection certification required.
* * * * *
(b) * * *
(9) A certification that shell eggs which have been packed into
containers destined for the ultimate consumer have, at all times after
packing, been stored and transported under refrigeration at an ambient
temperature of no greater than 45 deg.F (7.2 deg.C); and
* * * * *
11. In Sec. 59.950, paragraphs (a)(4) through (a)(8) are
redesignated as paragraphs (a)(5) through (a)(9), respectively, and a
new paragraph (a)(4) is added to read as follows:
Sec. 59.950 Labeling of containers of eggs or egg products for
importation.
(a) * * *
(4) For shell eggs, the words, ``Keep Refrigerated,'' or words of
similar meaning;
* * * * *
12. Section 59.955 is amended by redesignating paragraphs (b) and
(c) as paragraphs (c) and (d), respectively, by redesignating the last
sentence of paragraph (a) as new paragraph (b), and by revising
paragraph (a) to read as follows:
Sec. 59.955 Labeling of shipping containers of eggs or egg products
for importation.
(a) Shipping containers of foreign product which are shipped to the
United States shall bear in a prominent and legible manner:
(1) The common or usual name of the product;
(2) The name of the country of origin;
(3) For egg products, the plant number of the plant in which the
egg product was processed and/or packed;
(4) For egg products, the inspection mark of the country of origin;
(5) For shell eggs, the quality or description of the eggs, except
as required in Sec. 59.905;
(6) For shell eggs, the words ``Keep refrigerated'' or words of
similar meaning.
* * * * *
Done at Washington, DC, on: August 20, 1998.
Thomas J. Billy,
Administrator, Food Safety and Inspection Service.
[FR Doc. 98-22890 Filed 8-26-98; 8:45 am]
BILLING CODE 3410-DM-P