[Federal Register Volume 80, Number 244 (Monday, December 21, 2015)]
[Rules and Regulations]
[Pages 79231-79250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31795]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 80, No. 244 / Monday, December 21, 2015 /
Rules and Regulations
[[Page 79231]]
DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Part 320
[Docket No. FSIS-2009-0011]
RIN 0583-AD46
Records To Be Kept by Official Establishments and Retail Stores
That Grind Raw Beef Products
AGENCY: Food Safety and Inspection Service, USDA.
ACTION: Final rule.
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SUMMARY: The Food Safety and Inspection Service (FSIS) is amending its
recordkeeping regulations to require that all official establishments
and retail stores that grind raw beef products for sale in commerce
maintain the following records: The establishment numbers of
establishments supplying material used to prepare each lot of raw
ground beef product; all supplier lot numbers and production dates; the
names of the supplied materials, including beef components and any
materials carried over from one production lot to the next; the date
and time each lot of raw ground beef product is produced; and the date
and time when grinding equipment and other related food-contact
surfaces are cleaned and sanitized. These requirements also apply to
raw beef products that are ground at an individual customer's request
when new source materials are used.
DATES: Effective June 20, 2016.
FOR FURTHER INFORMATION CONTACT: Dr. Daniel Engeljohn, Assistant
Administrator, Office of Policy and Program Development, Food Safety
and Inspection Service, U.S. Department of Agriculture, Washington, DC
20250; Telephone: (202) 205-0495; Fax (202) 720-2025.
SUPPLEMENTARY INFORMATION:
Executive Summary
This rule requires official establishments and retail stores that
grind raw beef for sale in commerce to maintain specific information
about their grinding activities. This rule is necessary to improve
FSIS's ability to accurately trace the source of foodborne illness
outbreaks involving ground beef and to identify the source materials
that need to be recalled. The recordkeeping requirements in this final
rule will greatly assist FSIS in doing so.
FSIS has often been impeded in its efforts to trace ground beef
products back to a supplier because of the lack of documentation
identifying all source materials used in their preparation. On July 22,
2014, FSIS published a proposed rule (79 FR 42464) to require official
establishments and retail stores to maintain records concerning their
suppliers and source materials received. Having reviewed and considered
all comments received in response to the proposed rule, FSIS is
finalizing the rule and making several changes in response to comments.
Most of the proposed requirements are retained in this final rule. This
final rule requires establishments and retail facilities that grind raw
beef to keep the following records: The establishment numbers of the
establishments supplying the materials used to prepare each lot of raw
ground beef; all supplier lot numbers and production dates; the names
of the supplied materials, including beef components and any materials
carried over from one production lot to the next; the date and time
each lot of raw ground beef is produced; and the date and time when
grinding equipment and other related food-contact surfaces are cleaned
and sanitized. These requirements also apply when official
establishments and retail stores grind new source materials at an
individual customer's request.
In response to comments, FSIS is not adopting two proposed
requirements. First, under this final rule, establishments and retail
stores that grind raw beef products will not have to maintain records
concerning the weight of each source component used in a lot of ground
beef. After considering comments, FSIS concluded that weighing each
component in a lot of ground beef was time-consuming and offered little
food safety benefit because contamination in a lot of ground beef is
not dependent on the weight of any contaminated component. FSIS is also
not requiring that establishments and stores that grind raw beef
products maintain records of the names, points of contact, and phone
numbers of each official establishment supplying source material
because FSIS already has this information in its Public Health
Information System (PHIS). Any marginal benefit presented by these two
proposed requirements would be outweighed by the time burden associated
with recording the information. In response to comments, this rule also
differs from the proposed rule in terms of the place where the records
must be maintained and the retention period. Under the proposed rule,
based on existing recordkeeping requirements (9 CFR 320.1),
establishments and retail stores would have been allowed to keep the
required records at a business headquarters location if the grinding
activity is conducted at multiple locations. In response to comments,
however, this rule requires the grinding records to be kept at the
location where the beef is ground. This change in the final rule will
save investigators valuable time and will reduce the risk that records
will be lost or misplaced. Finally, in response to comments, for
purposes of this rule, FSIS is including the definition of a lot as set
out in the regulatory text at the end of this document (9 CFR
320.1(b)(4)(iii)).
Under the proposed rule, based on existing regulations (9 CFR
320.3(a)), the required grinding records would have been required to be
maintained for up to three years. However, in response to comments,
FSIS concluded that because the records required by this rule are
needed primarily to investigate foodborne illness outbreaks, their
utility diminishes over time. FSIS consulted with its investigators and
public health experts and determined that the records would rarely be
needed after one year. Considering this fact and comments concerning
the burden of keeping records on-site, particularly at retail stores,
FSIS shortened the retention period in the final rule to one year after
the date of the recorded grinding activity.
The final rule will result in storage and labor costs to official
establishments and retail stores that grind raw beef for sale in
commerce. Benefits will accrue
[[Page 79232]]
in terms of averted foodborne illnesses, less costly outbreaks and
recalls, and increased consumer confidence when purchasing ground beef.
These costs and benefits are listed in Table 1.
Table 1--Executive Summary Table
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Costs:
Labor............................ [ssquf] $56.6 million annually
($45.8 million to $67.4
million).
Storage.......................... [ssquf] $2.7 million annually.
Unquantified Costs............... [ssquf] Non-labor costs
associated with recordkeeping
for customer-requested grinds.
[ssquf] Potential for slight
costs to consumers in the form
of ground beef price increases.
Benefits:
Unquantified Benefits............ [ssquf] Benefits to consumers in
the form of averted foodborne
illnesses as a result of
contaminated ground beef.
[ssquf] Benefits to retailers and
official establishments grinding
raw beef in the form of less
costly food safety events, such
as outbreaks and recalls.
[ssquf] Benefits to official
establishments supplying ground
beef components in the form of
less costly recalls and
insulation from costly spillover
effects during food safety
events.
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Background
Under the authority of the Federal Meat Inspection Act (FMIA) and
its implementing regulations (9 CFR 329.1 and 329.6), FSIS investigates
reports of consumer foodborne illness associated with FSIS-regulated
products. FSIS investigators and other public health officials use
records kept at all levels of the food distribution chain, including
the retail level, to identify the sources of outbreaks.
FSIS has often been impeded in these efforts when an outbreak
involves ground beef because of a lack of documentation identifying all
source materials used in its preparation (79 FR 42464). In some
situations, official establishments and retail stores have not kept
adequate records that would allow effective traceback and traceforward
activities. Without such records, FSIS cannot conduct timely and
effective consumer foodborne illness investigations and other public
health activities throughout the stream of commerce.
As FSIS also explained in the proposed rule, official
establishments and retail stores that grind raw beef products for sale
in commerce must keep records that will fully and correctly disclose
all transactions involved in their business that are subject to the
FMIA (see 21 U.S.C. 642) (79 FR 42465). Businesses must also provide
access to, and permit inspection of, these records by FSIS personnel.
The proposed rule also explained that under 9 CFR 320.1(a), every
person, firm, or corporation required by 21 U.S.C. 642 to keep records
must keep records that will fully and correctly disclose all
transactions involved in the aspects of their business that are subject
to the FMIA. Records specifically required to be kept under 9 CFR
320.1(b) include, but are not limited to, bills of sale, invoices,
bills of lading, and receiving and shipping papers. With respect to
each transaction, the records must provide the name or description of
the livestock or article, the number of outside containers, the name
and address of the buyer or seller of the livestock or animal, and the
date and method of shipment.
The recordkeeping requirements contained in the FMIA and 9 CFR part
320 are intended to permit FSIS to trace product, including raw ground
beef product associated with consumer foodborne illness, from the
consumer, or the place where the consumer purchased the product, back
through its distribution chain to the establishment that was the source
of the product. Having this information available will make it easier
to determine where the contamination occurred. Investigators should
also be able to conduct effective traceforward investigations so as to
identify other potentially contaminated product that has been shipped
from the point of origin of its contamination to other official
establishments, retail stores, warehouses, distributors, restaurants,
or other firms. FSIS must be able to carry out these investigations
using records that should be kept routinely by official establishments
and retail stores.
In the proposed rule, FSIS explained past efforts it has made to
ensure that official establishments and retail stores that produce raw
ground beef maintain necessary records. For example, the proposal
explained that in 2002, FSIS published a Federal Register notice that
listed the data that FSIS intended to collect when any samples of raw
ground beef produced at an official establishment tested positive for
E. coli O157:H7 (67 FR 62325, Oct. 7, 2002). FSIS also listed the
information it intended to gather from retail stores at the time it
collected a sample of raw ground beef for E. coli O157:H7 testing.
In the proposed rule in the present rulemaking, FSIS explained that
shortly after issuing the 2002 Federal Register notice, the Agency
began collecting the information listed in the Federal Register notice
from official establishments and retail stores (79 FR 42465).\1\
However, as the proposal explained, some retail stores and official
establishments still did not maintain records sufficient for traceback,
and some retail stores did not document or maintain supplier
information at times other than when FSIS collected samples of ground
raw beef product from the stores for E. coli O157:H7 testing.\2\ As a
result, FSIS was, and remains, disadvantaged in its foodborne disease
investigations.
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\1\ FSIS Notice 47-02, November 20, 2002, ``FSIS Actions
Concerning Suppliers that may be Associated with Escherichia coli
(E. coli) 0157:H7 Positive Raw Ground Beef Product.''
\2\ On June 4, 2012, FSIS implemented routine verification
testing for six Shiga toxin-producing E. coli (STEC), in addition to
E. coli O157:H7, in raw beef manufacturing trimmings. See Shiga
Toxin-Producing Escherichia coli in Certain Raw Beef Products (77 FR
31975, May 31, 2012).
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In 2009, FSIS provided guidance to a retail industry association,
which was made available on the FSIS Web site, stating that retail
stores should keep appropriate records to aid in investigations
involving FSIS-regulated products associated with foodborne illnesses
and other food safety incidents.
To further address the issue, on December 9-10, 2009, the Food and
Drug Administration (FDA) and FSIS held a public meeting to discuss the
essential elements of product tracing systems, gaps in then-current
product tracing systems, and mechanisms to enhance product tracing
systems for food.\3\ This meeting was followed on
[[Page 79233]]
March 10, 2010, by an FSIS public meeting that discussed its procedures
for identifying suppliers of source material used to produce raw beef
product that FSIS found positive for E. coli O157:H7. FSIS sought input
from meeting participants on ways to improve its procedures for
identifying product that may be positive for E. coli O157:H7.
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\3\ Comments from this hearing are available at: http://www.regulations.gov/#!searchResults;rpp=10;po=0;s=FDA-2009-N-
0523;dct=PS. A transcript of this meeting is available at: http://www.regulations.gov/#!searchResults;rpp=10;po=0;s=FDA-2009-N-
0523;dct=O.
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Despite these actions, as explained in the proposed rule, some
official establishments and retail stores still did not keep and
maintain the records necessary for effective investigation by FSIS.
With this history in mind, FSIS conducted a retrospective review of 28
foodborne disease investigations from October 2007 through September
2011 in which beef products were ground or re-ground at retail
stores.\4\ When records were available and complete, enabling FSIS to
identify specific production in an official establishment, the Agency
was able to request a recall of product from the supplying
establishment in six of eleven investigations. In contrast, when
records were not available or incomplete, FSIS was able to request a
product recall only two of seventeen times. These results confirmed
FSIS's experience in specific cases where the presence of records at
the retail level was often instrumental in identifying the source of an
outbreak, as well as the implicated products that should be recalled.
The proposed rule includes a fuller description of this review,
including specific examples (79 FR 42464).
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\4\ Ihry, T., White, P., Green, A., and Duryea, P. Review of the
Adequacy of Ground Beef Production Records at Retail Markets for
Traceback Activities During Foodborne Disease Investigations. Poster
presented at: Annual Conference of the Council of State and
Territorial Epidemiologists; 2012, June 4-6; Omaha, NE. A copy of
this document is available at: http://www.fsis.usda.gov/wps/wcm/connect/87caa3f9-0c76-45c7-be4e-84d73151ed9e/RD-2009-0011-072114.pdf?MOD=AJPERES.
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Since the review in the proposed rule, FSIS has completed nine
ground beef outbreak investigations. Of these nine investigations,
grinding records were available and complete in four of them and
incomplete or not available in five. When records were available and
complete, FSIS was able to request a recall of product from the
supplying establishment in one of four investigations. For the
remaining three, two led to store level recalls. For these two, FSIS
did not request recalls at supplier establishments because in one
investigation, the trim for retail product had over ten suppliers, and
in the other, FSIS was not able to narrow down the list of suppliers
because the retailer did not clean up in between grinding different
products. FSIS did not request a recall for the third case in which
records were available and complete because there were multiple
products and multiple federal establishments involved, and FSIS was not
able to identify the product associated with the illnesses or the
supplying establishment. In the five investigations where records were
not available or incomplete, FSIS was unable to request a recall from a
supplying establishment.
The investigations reviewed in the proposed rule, and those
reviewed since the proposed rule, confirm the Agency's findings that
the records kept by official establishments and retail stores vary in
type and quality and are often incomplete or inaccurate. Overall, FSIS
has concluded that voluntary recordkeeping by retail stores that grind
raw beef has been insufficient, as evidenced by continuing outbreaks
linked to pathogens in raw ground beef that FSIS cannot trace back to
the source. The lack of specific information about supplier lot
numbers, product codes, production dates, and the cleaning and
sanitizing of grinding equipment has prevented or delayed FSIS in
identifying the source of outbreaks, as well as other product that
might be adulterated. The cleaning and sanitizing of equipment used to
grind raw beef is important because it prevents the transfer of E. coli
O157:H7 and other bacteria from one lot of product to another.
Proposed Rule
On July 22, 2014 (79 FR 42464), FSIS proposed to amend the Federal
meat inspection regulations to require that all official establishments
and retail stores that grind raw beef for sale keep records disclosing
the following: The names, points of contact, phone numbers, and
establishment numbers of suppliers of source materials used in the
preparation of each lot of raw ground beef; the names of each source
material, including any components carried over from one production lot
to the next; the supplier lot numbers and production dates; the weight
of each beef component used in each lot (in pounds); the date and time
each lot was produced; and the date and time when grinding equipment
and other related food-contact surfaces were cleaned and sanitized.
FSIS also proposed that official establishments and retail stores would
have to comply with these requirements with respect to raw beef
products ground at an individual customer's request when new source
materials are used.
FSIS posted the sample grinding log record below (Table 2) on its
Web site in late 2011 and included it with the 2009 guidance and the
proposed rule. FSIS proposed requiring the items in the sample record
marked with asterisks. The proposed rule specifically stated that the
information under the other column headings would not be required, but
that some official establishments and retail stores might choose to
keep and maintain this information.
[[Page 79234]]
[GRAPHIC] [TIFF OMITTED] TR21DE15.000
[[Page 79235]]
Final Rule
As stated above, the final rule is mostly consistent with the
proposed rule. It requires official establishments and retail stores
that grind raw beef products to maintain the following records: The
establishment numbers of the establishments supplying the material used
to prepare each lot of raw ground beef; all supplier lot numbers and
production dates; the names of the supplied materials, including beef
components and any materials carried over from one production to the
next; the date and time each lot is produced; and the date and time
when grinding equipment and other related food-contact surfaces are
cleaned and sanitized. These requirements also apply to raw ground beef
products that are prepared at an individual customer's request when new
source materials are used. If new source materials are not used, there
is no reason to record the customer-requested grind separately.
The final rule will not require records concerning the names,
points of contact, and phone numbers of each official establishment
supplying source material or the weight of each source component. In
consideration of comments that it received, FSIS has concluded that the
records concerning the names, points of contact, and phone numbers of
each official establishment supplying source material were unnecessary
given that FSIS already possesses this information through the
establishment profiles in PHIS. In addition, FSIS concluded, in
response to the comments submitted, that weighing each component in a
lot of ground beef was time-consuming and offered little food safety
benefit. Contamination occurs in a lot of ground beef regardless of the
weight of the contaminated component.
In conformance with these changes, FSIS has updated its sample
grinding log as pictured in Table 3 below to reflect the requirements
of this final rule.
[[Page 79236]]
[GRAPHIC] [TIFF OMITTED] TR21DE15.001
The final rule also differs from the proposed rule with respect to
the place of maintenance and the retention period of the required
records. Based on 9 CFR 320.2, the proposed rule would have required
records to be kept at the place
[[Page 79237]]
where the business, in this case the grinding activity, is conducted,
unless the business is conducted at multiple locations, in which case
the proposal would have allowed the records to be maintained at a
business's headquarters office. In response to comments, FSIS has
concluded that keeping the required information at the location where
the beef is ground will save investigators time and reduce the risk
that records are misplaced when they are moved. This rule, therefore,
establishes a new 9 CFR 320.2(b), which requires that all the
information required by this final rule be kept at the location where
the beef is ground.
Based on 9 CFR 320.3(a), the proposed rule would have required that
the proposed grinding records be retained for a period of two years
after December 31 of the year in which the transaction giving rise to
the record (grinding) occurred. In response to comments discussed
below, FSIS concluded that because the vast majority of ground beef is
consumed within several months of its production, a one-year retention
period is adequate to trace the source of any foodborne disease
outbreak involving raw ground beef. Accordingly, this final rule
creates a 9 CFR 320.3(c) which requires that official establishments
and retail stores covered by this rule retain the required records for
one year.
The final rule also makes technical changes to 9 CFR 320.2 and
320.3 to improve readability.
Summary of Comments and Responses
FSIS received 40 comments on the proposed rule from individuals,
retailers, beef producers and processors, beef industry and retail
trade groups, consumer advocacy groups, an organization representing
food and drug officials, a State department of agricultural and rural
development, a food technology company, and two members of Congress.
Most of the commenters supported the proposed rule. Industry groups
supported recording information for effective investigation in the
event of a foodborne illness outbreak but stated that the costs of
compliance were higher than estimated, and that several pieces of
information were unnecessary or overly burdensome. A summary of the
relevant issues raised by the commenters and the Agency's responses
follows.
1. Covered Entities
Comment: Consumer and retail trade groups stated that the rule
should apply to supermarkets, grocery stores, meat markets, warehouse
clubs, cooperatives, supercenters, convenience stores, wholesalers, and
restaurants.
Response: This final rule applies to all official establishments
and retail stores that grind raw beef products for sale to consumers in
normal retail quantities. The rule covers supermarkets and other
grocery stores, meat markets, warehouse clubs, cooperatives,
supercenters, convenience stores, and wholesalers, if they grind raw
beef product.
FSIS is not applying this final rule to restaurants. Only a small
percentage of all raw beef grinding occurs at restaurants and only on a
very small scale. It is thus likely that any outbreak traced to a
restaurant that grinds its own raw beef will be traceable to a specific
supplier.
2. Content of Records
Comment: Retail organizations, a food technology company, and a
beef brand recommended reducing costs by removing from the proposed
rule the requirement to weigh each source component. These commenters
stated that the proposed requirement was time-consuming, disruptive to
workflow, unfeasible with current equipment, and offered no public
health benefit.
Response: FSIS agrees that the requirement to weigh each source
component is not necessary. If a foodborne illness outbreak occurs, the
weight of a source component in a lot of ground beef is not significant
in tracing the material back to the suppliers. Also, any amount of
adulterated source material in a lot of ground beef would adulterate
the product. Accordingly, FSIS has removed this provision from the
final rule and has adjusted the paperwork burden estimates and costs
accordingly.
Comment: An independent grocers' trade group suggested removing the
requirement to record supplier lot numbers and production dates.
Response: Supplier lot numbers and production dates are necessary
to identify product at a supplier's location that may be associated
with an outbreak. By including supplier lot numbers and production
dates, investigators can more easily and quickly determine the source
of a foodborne illness outbreak and limit the amount of product
recalled.
Comment: Industry groups generally opposed recordkeeping for
customer-requested grinds. They stated that it was impractical to clean
grinding equipment between customer requests, meat case items usually
lack supplier information, and public health benefits from logging
these grinds would be limited. One meat industry trade group suggested
only requiring the proposed recordkeeping provisions for customer-
requested grinds over thirty pounds. A retail trade group recommended
that its members perform customer-requested grinds at the end of the
day or during a clear production cycle break.
Response: Customer-requested grinds present the same food safety
risk as other raw ground beef. Retailers should keep customer-requested
grinds separate and must record the information required in this rule
when new source materials are used for customer-requested grinds. It is
also in the store's interest to perform a clean up before and after
customer-requested grinds. If the source is not clear, or if there is
no clean up, traceback to the supplier will be impossible. The retailer
would have produced the product associated with the outbreak, and in
such circumstances, FSIS will have to request that the retailer recall
product. Also, if the source is not clear, FSIS will likely have to
request that the retailer recall more product than would be necessary
if the retailer had recorded the necessary information.
FSIS agrees that customer-requested grinds present unique
challenges but estimates that the benefits of being able to rapidly
identify a customer-grind associated with an outbreak outweigh the
recordkeeping and clean-up costs.
Comment: Two food-safety non-profits, a grocery store chain, and a
consumer group stated that the name of the retail product should be
recorded to assist in identifying product subject to recall. One
individual and a food-safety non-profit stated that retail products
should include specific day or production lot codes to assist in
tracing products back to specific grinding lots.
Response: FSIS does not believe that including retail product names
on records listing source materials used to produce those products is
practical. Products from different source materials may have the same
name, e.g., 80/20 Ground Chuck. In addition, products from the same
source materials may be marketed differently. For example, packages of
``Bob's Ground Beef'' and ``Jan's Ground Beef'' may originate from the
same lot of source materials, despite bearing different retail names.
FSIS is also not requiring official establishments and retail
stores to label retail products with timestamps or production lot codes
to identify them with the specific lot or lots of ground beef from
which they were produced. Retail ground beef products can usually be
traced back to their specific grinding lots through stores' inventory
data, the product's date and time of sale, and information stored on
customers' shopper cards. Once a retail product is traced back to the
grinding lot or lots,
[[Page 79238]]
the records required by this final rule will enable FSIS investigators
to identify the source materials, suppliers, and production lots from
which the product was produced.
Comment: Industry groups opposed recording the names, points of
contact, and phone numbers of suppliers because FSIS already has this
information through PHIS.
Response: FSIS agrees that the names, points of contact, and phone
numbers of official establishments supplying source materials are
already located in the establishment profiles within PHIS. Therefore,
the establishment numbers of suppliers provide sufficient information
to FSIS, and FSIS has removed those pieces of information from the
recordkeeping requirements, leaving the requirement that official
establishments and retail stores keep the establishment number of their
suppliers of source materials. FSIS has updated its paperwork burden
and costs estimates to reflect this change.
3. Use of Sample Grinding Log
Comment: A consumer group recommended that FSIS provide a sample
grinding log containing all of the required information. A grocery
store chain and retail trade group stated that grinders should be able
to create their own logs, so long as all required information is
included. A retail trade group questioned whether grinders would be
required to use the sample log shown above.
Response: While FSIS has provided a sample grinding log that is
depicted above, FSIS is not specifying in the final rule how official
establishments and retail stores must record the required information.
Entities may record the required information as they see fit, so long
as the records of the required information are maintained in accordance
with 9 CFR 320.2 and 320.3.
4. Imports
Comment: One individual stated that the proposed rule should apply
to imported beef.
Response: FSIS' regulations do not apply directly to establishments
in foreign countries, and retail stores in foreign countries are not
eligible to export product to the United States. To be eligible to
export raw beef product to the United States, countries must maintain
an equivalent inspection system for beef. Therefore, in the event of
Salmonella or shiga-toxin producing E. coli (STEC) outbreaks, countries
that ship beef to the United States will need to have traceback and
traceforward systems for beef products that allow the country to
identify the source of contamination. Countries that export beef to the
United States may choose to establish recordkeeping requirements
consistent with this rule. However, they may also have other means to
track the necessary information.
5. Other Species
Comment: Individual commenters and food safety groups believed that
the rule should apply to ground product produced from swine, poultry,
lamb, and turkey.
Response: FSIS issued the proposed rule to address deficiencies in
recordkeeping that hampered investigations into foodborne illness
investigations involving raw ground beef. Between 2007 and 2013, FSIS
investigated 130 outbreaks of human illness. Of those, 31 (24 percent)
were linked to beef ground at a retail venue. FSIS did not propose that
new records be maintained for ground products other than beef because
the Agency is most often impeded in its efforts to trace back and
identify sources of human illness when beef ground in retail stores is
the vehicle for those illnesses. FSIS considers the comments requesting
similar requirements for other ground product to be outside the scope
of this rule.
6. Consumer Education
Comment: A meat processor, a meat products company, and two
individuals stated that more outreach was needed to educate consumers
on how to properly handle and cook meats.
Response: FSIS promotes consumer awareness of food safety issues
and encourages proper food preparation practices. For example, FSIS
posts consumer food safety information on its Web page.\5\ The posted
information includes the kind of bacteria that can be found in ground
beef, specific information as to why the E. coli O157:H7 bacterium is
of special concern in ground beef, and the best way to handle raw
ground beef when shopping and when at home. This Web page also contains
the Food Safe Families Campaign guidelines to keep food safe, which
tells consumers to cook ground beef to a safe minimum internal
temperature of 160 [deg]F (71.1 [deg]C) as measured with a food
thermometer. FSIS also provides food safety education in other forms
(e.g., FSIS has continued to work with the Ad Council to launch food
safety public service announcements, and FSIS staff provide in-person
food safety education through the mobile Food Safety Discovery Zone).
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\5\ FSIS food safety guidance for meat preparation, available
at: http://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-fact-sheets/meat-preparation.
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Nonetheless, recordkeeping by retail establishments will more
quickly and efficiently address the concerns (i.e., traceback and
identifying sources of human illness when beef ground in retail stores
is the vehicle for those illnesses) raised in this final rule.
7. Supplier Process Control Actions
Comment: One individual urged official establishments to improve
contamination control at slaughter. A meat products company that did
not support the rule believed that suppliers cannot control E. coli,
but that the answer is not more recordkeeping because that does not
address the core problem, which is the interdependent relationship
between animals and E. coli.
Response: FSIS is continuing to address process control actions
that should be taken by beef suppliers to control E. coli. For example,
FSIS made available updated guidance on testing and high event periods
\6\ in 2013 and implemented new traceback activities in 2014.\7\
However, while better process control may reduce the incidence of E.
coli O157:H7-adulterated ground beef, it will not address the issue of
official establishments and retail stores not keeping adequate records
that allow effective traceback and traceforward activities. Without the
records required by this final rule, FSIS cannot conduct timely and
effective consumer foodborne illness investigations and other public
health activities through the stream of commerce.
---------------------------------------------------------------------------
\6\ Compliance Guideline for Establishments Sampling Beef
Trimmings for Shiga Toxin-Producing Escherichia coli (STEC)
Organisms or Virulence Markers, available at: http://www.fsis.usda.gov/wps/wcm/connect/e0f06d97-9026-4e1e-a0c2-1ac60b836fa6/Compliance-Guide-Est-Sampling-STEC.pdf?MOD=AJPERES.
\7\ FSIS Directive 10,010.3, Traceback Methodology for
Escherichia Coli (E. Coli) 0157:H7 in Raw Ground Beef Products and
Bench Trim, available at: http://www.fsis.usda.gov/wps/wcm/connect/ae5e81d0-c636-4de1-93f3-7a30d142ae69/10010.3.pdf?MOD=AJPERES.
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8. Implementation
Comment: An independent grocers' trade group recommended a two-year
delayed effective date for small businesses to comply with the rule.
Alternatively, the commenter stated that small businesses should be
exempt from the rule's requirements altogether. Similarly, a retail
trade group believed that small retailers would need more time for
outreach and training and that implementation would take longer than
anticipated by the proposed rule
[[Page 79239]]
because of the need to create or modify records forms.
Response: FSIS has provided sample grinding logs in this rule and
the proposed rule. Small businesses may use these logs, or any other
recordkeeping system they wish, to record the required information.
FSIS believes that the recordkeeping requirements are straightforward
and do not require extensive training or guidance materials. FSIS has
also not adopted the proposed requirements that grinders record and
maintain records of the weight of each source material used in a
grinding lot, and the names, points of contact, and phone numbers of
each official establishment supplying source material.
In addition, as is discussed above, FSIS has advised official
establishments and retailers to maintain these types of records since
2002. Nonetheless, in response to comments, this final rule provides
that retailers and official establishments will have 180 days from the
date of publication of this final rule to comply with its requirements.
This effective date should provide industry sufficient time to comply
with the requirements because FSIS has simplified the requirements
originally proposed, and FSIS will ensure that establishments and
retailers are aware of the new requirements through the outreach
activities discussed below and through partnering with the States and
other organizations, such as retail organizations.
9. Training
Comment: One consumer group recommended face-to-face contact by
FSIS with entities that grind raw beef to explain the rule's
requirements. A beef producers' trade group encouraged FSIS to conduct
outreach through webinars and by attending industry meetings. One
individual stated that operators should be trained to understand the
risks of E. coli in grinding. Another individual suggested more
training on keeping logs, proper attire, and hand-washing. A State
agriculture department believed it would incur costs associated with
responding to questions from grinders and training State personnel to
field such questions appropriately.
Response: As noted above, the recordkeeping requirements in the
final rule are straightforward and do not require extensive training or
guidance materials. FSIS will update its Sanitation Guidance for Beef
Grinders,\8\ which includes sample grinding logs and instructions, and
will hold webinars to explain the requirements of this final rule and
answer questions from official establishments, retailers, and other
organizations. FSIS will also provide guidance to small businesses
through its Small Plant Help Desk and Small Plant News newsletter, and
at industry conferences, exhibitions and workshops.
---------------------------------------------------------------------------
\8\ Available at: http://www.fsis.usda.gov/shared/PDF/Sanitation_Guidance_Beef_Grinders.pdf.
---------------------------------------------------------------------------
10. Retention and Maintenance of Records
Comment: A food-safety non-profit organization suggested that
records required under this rule be retained for at least ninety days.
A grocery store chain believed six-to-twelve months would be adequate.
A retail trade group believed six months was appropriate. The latter
two commenters mentioned that frozen beef should be consumed within
three to four months.
Response: While ground beef is safe indefinitely if kept frozen, it
will lose quality over time. FSIS recommends consuming fresh ground
beef within two days and frozen ground beef within four months.\9\
These recommendations suggest that records documenting the grinding of
raw beef need only be kept for a short period of time. However, the
Agency is aware that consumers do not always follow such
recommendations, sometimes keeping ground beef in their freezers for up
to a year, for example. FSIS is therefore requiring in the final rule
that official establishments and retailers maintain the prescribed
records for one year (9 CFR 320.3).
---------------------------------------------------------------------------
\9\ FSIS Ground Beef and Food Safety, available at: http://www.fsis.usda.gov/wps/portal/fsis/topics/food-safety-education/get-answers/food-safety-fact-sheets/meat-preparation/ground-beef-and-food-safety/CT_Index.
---------------------------------------------------------------------------
Comment: A trade group representing food safety officials stated
that records should always be maintained at the location where the beef
was ground.
Response: This final rule amends 9 CFR 320.2 to require that
official establishments and retail stores maintain the required records
at the place where the raw beef is ground. This approach, along with
the shorter record retention period being required in 9 CFR 320.3,
balances the burden on retailers of storing records for the necessary
period of time with the needs of investigators to have such records
available at the grinding location.
11. Enforcement
Comment: Three individuals stated that FSIS should assess
additional fines or penalties to enforce the final rule's requirements.
A consumer group recommended FSIS perform verification checks at
retailers to monitor compliance. A trade group representing food safety
officials asked how FSIS would enforce the rule and urged FSIS to work
more cooperatively with State and local food safety agencies. The
commenter also recommended that local officials have access to the new
records, as they are often involved at the earliest stages of an
outbreak.
Response: The FMIA provides FSIS with authority to require
specified persons, firms, and corporations to keep records that will
fully and correctly disclose all transactions involved in their
businesses subject to the FMIA and to provide access to facilities,
inventory, and records (21 U.S.C. 642). If official establishments do
not maintain the required records, FSIS will issue noncompliance
records. FSIS may also take any regulatory control actions as defined
in 9 CFR 500.1(a), including the tagging of product, equipment, or
areas.
FSIS personnel conduct in-commerce surveillance related to
wholesomeness, adulteration, misbranding, sanitation, and
recordkeeping.\10\ When this rule becomes final, FSIS compliance
investigators will verify that retail grinders meet the recordkeeping
requirements. If compliance investigators find they do not, they may
issue a Notice of Warning to the retail store.
---------------------------------------------------------------------------
\10\ FSIS Directive 8080.1, Rev. 4, Methodology for Conducting
In-Commerce Surveillance Activities, April 24, 2014.
---------------------------------------------------------------------------
If FSIS personnel find noncompliance at an official establishment,
the Agency could issue non-compliance reports, letters of warning, or
request the Department of Justice to initiate a civil proceeding in
Federal court to enjoin the defendant from further violations of the
applicable laws and regulations. If FSIS personnel find noncompliance
at a retail facility, the Agency may issue notices of warning or
request the Department of Justice to initiate a civil proceeding to
enjoin the defendant from further violations of the applicable laws and
regulations.
States with their own meat and poultry inspection (MPI) programs
will need to be aware of the requirements of this rule and are required
to enforce requirements ``at least equal to'' the Federal inspection
program. Therefore, they will need to require that establishments under
State inspection maintain records consistent with what FSIS is
requiring.
FSIS will also explore ways to partner with States, with or without
MPI programs, so that State employees can provide information about the
recordkeeping requirements to grocery stores, help them to keep logs in
the most efficient and effective way
[[Page 79240]]
possible, and provide other information that will enhance the
efficiency and effectiveness of store efforts. FSIS intends to provide
information to State officials about the grinding logs requirement
during regular monthly Webinars that FSIS conducts for State MPI
Directors and State HACCP Contacts and Coordinators.
FSIS also routinely cooperates with State and local authorities to
conduct effective foodborne illness investigations, including by
sharing epidemiological data, records, and investigative resources.
FSIS intends to provide information to State and local authorities
during the course of these illness investigations about the role that
grinding logs can play in facilitating these investigations.
12. Grinding Frequency and Time Burden
Comment: To reduce costs, a grocers' trade group stated that FSIS
should require records only for all source materials used in grinds
during a single production day, requiring a new log for production that
would begin only after the end-of-day full cleaning of the grinding
equipment. Several commenters also stated that many retail stores grind
several times per day and may use several different suppliers,
significantly increasing recordkeeping costs.
Response: In the proposed rule, FSIS considered requiring
documentation of information on a weekly basis, but rejected this
approach because it would be difficult to differentiate between lots
ground from different suppliers throughout the week (79 FR 42469). The
same holds true for daily logs. In either situation, investigators
would be unable to effectively conduct traceback and traceforward
activities in the event of an outbreak because of limited detail. FSIS
is not dictating how often the required information must be physically
recorded. Under the final rule, the required information must be
recorded whenever any of the information required for the lot of
product being ground changes. For example, if an entity uses the same
source material for multiple grinds throughout the day, it would only
need to record the source material information (9 CFR
320.1(b)(4)(i)(A)-(C)) once but would need to record the date and time
of each grind (9 CFR 320.1(b)(4)(i)(D)). However, if a store or
establishment were to start using a different supplier or lot number
during the day, it would need to document that change (9 CFR
320.1(b)(4)(i)(B)). This approach minimizes the recordkeeping burden
but preserves the information needed by investigators.
Comment: A grocery store chain disagreed with FSIS's estimates of
grinds per day and average number of suppliers at retail, suggesting
that beef is ground every day, several times per day as needed, and
with several different cases of raw material. A retail trade group
estimated more average grinds at retail per day than FSIS's estimate,
stating that its average member grinds four times per day. A State
agriculture department and a beef producers' trade group urged further
study of the economic impact of the rule on small businesses, including
feedback from industry. A retail trade group estimated that the time
needed for the proposed recordkeeping is much higher per respondent per
year than estimated by FSIS, suggesting that a conservative estimate
would be 214 hours per year.
Response: FSIS has taken into account comments on the amount of
time required for recordkeeping and made adjustments to its cost
estimate. For the final estimates, FSIS adjusted the average number of
recordkeeping tasks per day at official establishments and retail
stores from one to a range of four-to-five-and-a-half, plus an
additional task if an entity conducts a grind composed of only trim.
FSIS also adjusted the assumed time required to complete a record at
official establishments and retail stores to account for multiple
source materials, from 30-to-90 seconds to one minute for grinds not
including trim, two minutes for grinds including trim and other ground
beef components, and six-to-ten minutes for trim-only grinds. Trim-only
grinds are usually composed of trim from different suppliers and
production lots. Therefore, more time is needed to document the
required information as compared to other grinding activities. In
updating these estimates, FSIS has taken into account, in addition to
the comments, the changes in the final rule concerning required
records. Specifically, FSIS is using the low end of time estimates from
the comments because, for the final rule, FSIS has significantly
reduced the information required to be kept compared to the proposed
rule.
13. Waste
Comment: Two individuals and an independent grocers' trade group
stated that retailers would simply throw out bench trim to avoid the
recordkeeping requirements.
Response: In its proposed rule, FSIS considered a 2008 study that
found that recording grinding information is already prevalent among
official establishments and retail stores that grind raw beef. The 2008
study found that 74 percent of chain retail stores and 12 percent of
independent retail stores kept grinding logs. Of the stores that kept
grinding logs, the study reported that 78 percent of those logs were
incomplete (79 FR 42471). Although insufficient voluntary recording is
one impetus for this rule, FSIS is not aware of any instance when
official establishments and retail stores that were keeping necessary
records discarded source material in lieu of recording necessary
records. Therefore, FSIS concludes that the costs of recordkeeping will
rarely be greater than the costs of discarding bench trim, and that the
amount of product discarded as a result of the rule should be
negligible.
14. Effect on Small Businesses
Comment: An independent grocers' trade group stated that the
proposed rule would have a significant economic impact on a substantial
number of small entities, and, therefore, FSIS must conduct an initial
regulatory flexibility analysis.
Response: While the rule will affect a substantial number of small
businesses, the cost of complying with the proposed regulations will be
relatively small on a per firm basis. FSIS has provided guidance and a
sample grinding log, which FSIS will update as appropriate. Similar
guidance is available from other providers, including industry
associations.\11\ Entities can use these materials to minimize the
costs of their recordkeeping programs. In addition, as is discussed
above, FSIS will hold webinars to provide small businesses additional
information on the rule and will publish information through its Small
Plant Help Desk and Small Plant News newsletter. The fact that a number
of small firms already maintain adequate grinding records suggests that
the cost of the practice is not prohibitive to doing business.
---------------------------------------------------------------------------
\11\ Food Marketing Institute, Comprehensive Guide Meat Ground
at Retail Recordkeeping and Sanitation, available at: http://www.fmi.org/docs/default-source/food-safety-best-practice-guides/meat-ground-at-retail-comprehensive-guide.pdf?sfvrsn=6. Conference
for Food Protection, Guidance Document for the Production of Raw
Ground Beef at Various Types of Retail Food Establishments,
available at: http://www.foodprotect.org/media/guide/CFP%20Beef%20Grinding%20Log%20Template%20Guidance%20Document%20-%208-8-2014.pdf.
---------------------------------------------------------------------------
15. Definition of a Lot of Ground Beef
Comment: A beef industry trade group commented that some ground
beef producers have different definitions for ``lots'' or ``batches''
of ground beef.
[[Page 79241]]
Response: FSIS did not propose a definition for a ``lot'' of ground
beef in the proposed rule. In response to this comment, and for the
sake of consistency in implementing this final rule, FSIS has added a
new 9 CFR 320.1(b)(4)(iii), which defines a lot.
Implementation
All retailers and official establishments will have 180 days from
the date of publication of this final rule to comply with its
requirements.
As is discussed above, this rule does not prescribe the method by
which official establishments and retail stores must keep the required
information but does require that the information be kept at the
location where the beef is ground. The records must be retained for one
year after the transaction giving rise to the record (grinding)
occurred. FSIS will update its Sanitation Guidance for Beef
Grinders,\12\ which currently includes sample grinding logs and
instructions, and hold webinars to explain the requirements of the
final rule and answer questions from official establishments,
retailers, and other organizations. FSIS will also provide information
to small businesses through its Small Plant Help Desk and Small Plant
News newsletter. FSIS will provide guidance to State MPI programs on
the requirements of this rule and seek to partner with States to ensure
that the requirements of this rule are communicated to official
establishments inspected by State MPI programs and to retail stores
that grind raw beef. FSIS will also work with States and universities
around the nation to conduct outreach workshops targeted to retailers
and official establishments to explain the requirements of the rule.
Records of the required information must be made available to
authorized USDA officials upon request (9 CFR 300.6(a)(2)). These
officials may examine and copy such records (9 CFR 320.4). At official
establishments, FSIS inspection personnel will verify compliance. As is
discussed above, if FSIS personnel find noncompliance at an official
establishment, the Agency could issue non-compliance reports, letters
of warning, or request the Department of Justice to initiate a civil
proceeding in Federal court to enjoin the defendant from further
violations of the applicable laws and regulations. At retail stores,
FSIS compliance investigators will verify that retail grinders meet the
recordkeeping requirements. If compliance investigators find they do
not, the Agency may issue notices of warning or request the Department
of Justice to initiate a civil proceeding to enjoin the defendant from
further violations of the applicable laws and regulations.
---------------------------------------------------------------------------
\12\ Available at: http://www.fsis.usda.gov/shared/PDF/Sanitation_Guidance_Beef_Grinders.pdf.
---------------------------------------------------------------------------
Executive Orders 12866 and 13563 and Regulatory Flexibility Act
Executive Orders 12866 and 13563 direct agencies to assess costs
and benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both costs and benefits, of
reducing costs, of harmonizing rules, and of promoting flexibility.
This rule has been designated a ``non-significant regulatory action''
under section 3(f) of Executive Order 12866. Accordingly, this rule has
not been reviewed by the Office of Management and Budget.
In updating the preliminary regulatory impact analysis of the
proposed rule, FSIS has made several changes in response to public
comments and newly available information. Specifically, FSIS has made
the following changes in the final regulatory impact analysis:
[ssquf] Increased the number of retail firms in the baseline using
new U.S. Census Bureau data;
[ssquf] Added assumptions about the percentage of retail firms that
grind raw beef;
[ssquf] Incorporated new distributions relating to source materials
used to reflect the complexity of grinding operations;
[ssquf] Adjusted the time estimates for recordkeeping activities,
the frequency of recordkeeping tasks, and the number of active grinding
days per week based on comments received;
[ssquf] Added estimates of labor to incorporate recordkeeping for
grinds, including pieces of trim and customer-requested grinds;
[ssquf] Updated the wage rate and benefits factor for firm
employees that record or maintain required records based on the newest
available information;
[ssquf] Added discussion about unquantified costs associated with
maintaining records for customer-requested grinds; and
[ssquf] Expanded the benefits discussion to include benefits not
previously addressed, such as the mitigation of costly spillover
effects from foodborne illness outbreaks, and the incentive
traceability provides to produce safe product.
Need for the Rule
During investigations of foodborne illness outbreaks attributed to
ground beef, grinding records are an important part of the traceback
and traceforward processes. Without accurate records, it is difficult
to identify where ground beef components originated. If investigators
cannot identify a source, it is likely that adulterated product will
remain in commerce and more consumers will eat the product and become
ill. Delays in identifying the source of contamination can also
negatively affect sales of ground beef due to loss in consumer
confidence. Despite efforts by FSIS, industry associations, and other
regulators to provide retailers and official processing establishments
with guidance and examples of best practices, the current level of
recordkeeping is still less than what is needed for timely and accurate
traceability investigations.
Traceability systems are a potential way to lessen the costs of
foodborne illness outbreaks and other food safety events. In the case
of private regulation, each firm will ultimately decide what level of
traceability to implement on the basis of costs and potential benefits,
such as smaller losses of reputation and reduced liability costs during
foodborne illness outbreaks.\13\ Some firms may decide not to invest at
all. Insufficient traceability, however, is not optimal for the
industry as a whole.\14\ In some cases industry associations and third
parties can influence firms to adopt traceability measures, but in the
case of grinding records, these efforts have not achieved an acceptable
level.\15\
---------------------------------------------------------------------------
\13\ Hobbs, Jill E., (2004) ``Information Asymmetry and the Role
of Traceability Systems,'' Agribusiness, Vol. 20 (4), 397-415,
available at: http://onlinelibrary.wiley.com/doi/10.1002/agr.20020/pdf.
\14\ McEvoy, David M. and Souza-Monteiro, Diogo M., (2008) ``Can
an Industry Voluntary Agreement on Food Traceability Minimize the
Cost of Food Safety Incidents?'' 12th Congress of the European
Association of Agricultural Economists, Gent, Belgium, July 26-29,
available at: http://ageconsearch.umn.edu/bitstream/43860/2/397.pdf.
\15\ Gould, Hannah L. et al. (2011) ``Recordkeeping Practices of
Beef Grinding Activities at Retail Establishments,'' Journal of Food
Protection, Vol. 74 (6), 1022-1024, available at: http://www.ncbi.nlm.nih.gov/pubmed/21669085.
---------------------------------------------------------------------------
Forms of private regulation, such as those currently in place for
raw beef grinding entities, are vulnerable to firms that do not invest
their fair share to the detriment of others, commonly referred to as
the ``free rider'' problem.\16\ In the event of a foodborne illness
outbreak
[[Page 79242]]
attributed to ground beef, if traceback is conducted at an entity that
maintains adequate records, there is a strong chance that the source of
contamination will be identified. When this happens, losses in
reputation, consumer confidence, and sales are generally limited to the
firm supplying the adulterated product. Other firms, such as the
retailers (both those that invest in traceability and those that do
not), are to some degree insulated from negative spillover effects. In
this case, free-rider firms--those that do not invest in traceability--
benefit from the investments of others.
---------------------------------------------------------------------------
\16\ Havinga, Tetty, (2006) ``Private Regulation of Food Safety
by Supermarkets,'' Law and Policy, Vol. 28 (4), 515-533, available
at: http://www.ru.nl/publish/pages/552245/havingasupermarketslapo2006.pdf.
---------------------------------------------------------------------------
If, however, traceback occurs at a firm that does not invest in
recordkeeping, the chances of investigators successfully tracing
adulterated product to its source are low. An illness outbreak
attributed to ground beef in which the source is unidentified will
negatively affect ground beef producers and retailers indiscriminately.
In this case, firms that have invested in traceability will bear costs
that could have been avoided were it not for the free-rider firm.
Mandatory recordkeeping requirements will help to eliminate
insufficient traceability systems and therefore mitigate the free rider
problem.
Inadequate traceability systems can also contribute to moral
hazard, which, in the case of ground beef, is a lack of incentives to
produce a safe product.\17\ Producers of ground beef components
endeavor to produce safe product because the consequences of producing
unsafe product are great. However, if adulterated ground beef is often
unable to be traced back to its source, producers face less risk when
the components they produce are unsafe. Mandatory recordkeeping
requirements can help to reduce moral hazard by increasing the chances
that adulterated product is traced back to its source, thereby
strengthening the incentives for fabricators of ground beef components
to supply the safest product that they can produce.
---------------------------------------------------------------------------
\17\ Starbird, S. A., Amanor-Boadu, V., and Roberts, T. (2008)
``Traceability, Moral Hazard, and Food Safety,'' 12th Congress of
the European Association of Agricultural Economists, available at:
http://ageconsearch.umn.edu/bitstream/43840/2/EAAE_0398.pdf.
---------------------------------------------------------------------------
Industry Baseline
FSIS has identified four groups of businesses that will be subject
to the final rule.
1. Official, federally-inspected establishments that grind beef:
FSIS used information from PHIS to determine the number of federally
inspected establishments subject to FSIS sampling of ground beef
product for E. coli O157:H7 and Salmonella in the past calendar year
(2014). To ensure that only those establishments that receive ground
beef components from a supplier are included in the total, FSIS
excluded those establishments that also slaughtered beef in the past
calendar year.\18\ Using the Hazard Analysis and Critical Control Point
(HACCP) size categories available in PHIS, FSIS determined that there
are 12 large establishments and 1,132 small (including HACCP size small
and HACCP size very small) establishments that fall into this category.
---------------------------------------------------------------------------
\18\ If an official establishment slaughters beef, then it is
likely the only source of components for its own ground beef
production, and therefore it would not need to keep records
pertaining to suppliers. While it is possible that some official
establishments both slaughter beef and receive components from other
official establishments for grinding, the number of such
establishments is likely very small.
---------------------------------------------------------------------------
2. Supermarkets and other grocery stores that grind beef: FSIS used
data from the U.S. Census Bureau to determine the number of grocery
stores in the U.S. Specifically, FSIS used the 2012 Statistics of U.S.
Business (SUSB) data set \19\ to determine the number of stores under
the North American Industry Classification System (NAICS) code 445110--
Supermarkets and Other Grocery (except Convenience) Stores. FSIS found
that there are 21,543 stores owned by large firms (>=500 employed), and
44,504 stores owned by small firms (<500 employed). FSIS is aware that
not all supermarkets and grocery stores grind beef in store. However,
for the purposes of the cost estimate, FSIS assumed that 100 percent of
supermarkets and grocery stores grind beef. While this results in a
minor overestimate, FSIS lacks the data needed to support a different
assumption.
---------------------------------------------------------------------------
\19\ U.S. Census Bureau, (2012), Statistics of U.S. Businesses,
accessed January 28, 2015, available at: http://www.census.gov/econ/susb/.
---------------------------------------------------------------------------
3. Meat markets that grind beef: FSIS used the 2012 SUSB Census
data to determine the number of stores under the NAICS code 445210--
Meat Markets. FSIS found that there are 123 stores owned by large
firms, and 5,105 stores owned by small firms. The NAICS code for meat
markets includes six subcategories, three of which do not grind beef,
including Baked Ham Stores, Frozen Meat Stores, and Poultry Dealers. To
account for these stores, FSIS assumed that 50 percent of large stores
and 50 percent of small stores in this category grind beef.
4. Warehouse clubs and supercenters that grind beef: FSIS used the
2012 SUSB Census data to determine the number of stores under the NACIS
code 452910--Warehouse Clubs and Supercenters. FSIS determined that
there are 5,124 such stores owned by large firms, and 40 stores owned
by small firms. FSIS is aware that not all warehouse clubs and
supercenters grind beef in store. To account for this, FSIS assumed
that 20 percent of large stores and 100 percent of small stores grind
beef.\20\
---------------------------------------------------------------------------
\20\ FSIS was able to determine that the majority of large
stores in this category do not grind beef in store because two large
firms which account for approximately 80 percent of supercenters
have ceased this practice. These firms purchase beef pre-ground and
pre-packaged from federally inspected establishments or have it
shipped from one of their other branded chains.
Table 4--Entities That Grind Raw Beef
--------------------------------------------------------------------------------------------------------------------------------------------------------
Entity type Total entities Percent grinding Entities grinding
--------------------------------------------------------------------------------------------------------------------------------------------------------
Establishment type Large Small Large Small Large Small
--------------------------------------------------------------------------------------------------------------------------------------------------------
Official Establishments................................. 12 1,132 100 100 12 1,132
Supermarkets and Other Grocery Stores................... 21,543 44,504 100 100 21,543 44,504
Meat Markets............................................ 123 5,105 50 50 62 2,553
Warehouse Clubs and Supercenters........................ 5,124 40 20 100 1,025 40
-----------------------------------------------------------------------------------------------
Total............................................... 26,802 50,781 .............. .............. 22,641 48,229
--------------------------------------------------------------------------------------------------------------------------------------------------------
Values in Table may not sum to totals because of rounding.
[[Page 79243]]
To estimate the number of entities that are already maintaining
adequate records, FSIS used a Centers for Disease Control and
Prevention (CDC) study of ground beef recordkeeping practices at retail
stores and applied the distributions in the study to the entities that
grind raw beef. The study found that 74 percent of chain retail stores
and 12 percent of independent retail stores kept grinding logs. Of the
stores that kept grinding logs, the study reported 78 percent of those
logs as incomplete.\21\ For the purposes of this estimate, FSIS used
the chain stores surveyed in the study as a proxy for large retailers
and official establishments, and the independent stores as a proxy for
small retailers and official establishments. Therefore, the
recordkeeping distribution of large entities based on the survey
results is approximately 16 percent complete (74 percent*(1-78
percent)), 58 percent incomplete (74 percent*78 percent), and 26
percent no records. For small entities, the distribution is
approximately 3 percent complete (12 percent*(1-78 percent)), 9 percent
incomplete (12 percent*78 percent), and 88 percent no records. FSIS
applied these distributions to the set of all grinding entities in
Table 4, above. The current recordkeeping practices of beef grinding
entities are displayed in Table 5.
---------------------------------------------------------------------------
\21\ See footnote 3.
Table 5--Baseline Recordkeeping Practices at Entities That Grind Raw Beef
----------------------------------------------------------------------------------------------------------------
Distribution
Entity size Recordkeeping (percent) Entities
----------------------------------------------------------------------------------------------------------------
Large...................................... Complete........................... 16 3,686
Incomplete......................... 58 13,069
No Records......................... 26 5,887
-------------------------------
Total........................... .............. 22,641
Small...................................... Complete........................... 3 1,273
Incomplete......................... 9 4,514
No Records......................... 88 42,441
-------------------------------
Total........................... .............. 48,229
----------------------------------------------------------------------------------------------------------------
Values in table may not sum to Totals because of rounding.
Alternative Regulatory Approaches
FSIS considered a number of alternatives designed to achieve the
regulatory objective outlined in the Need for the Rule section. The
final rule was chosen as the least burdensome, technically acceptable
regulatory approach to ensure that adequate grinding records are
maintained for the purposes of outbreak investigation and product trace
back. While some alternatives would result in lesser costs to industry,
and some alternatives would result in more complete information for
outbreak investigators, in FSIS's judgment the final rule is the
alternative that maximizes net benefits. Cost estimates were developed
for the final rule but not for the rejected alternatives because the
costs for these alternatives are discernibly higher or lower because of
the amount of time spent on recordkeeping.
Alternatives Considered
(1) Encouraging rather than requiring grinding records: FSIS
provided industry voluntary guidelines (see Table 2) in 2009. As stated
previously, the Agency has concluded that a policy of voluntary
guidelines for recordkeeping has not ensured that all official
establishments and retail stores maintain complete records that will
ensure quick identification of contaminated product.
(2) Regulated Daily Recordkeeping Program: FSIS considered
requiring that retail stores and official establishments maintain
grinding records such that each producer recorded grinding activities
once per day, and information on all suppliers that were used during
that day but not on when during the day those suppliers were used.
Daily recording may have been sufficient if entities typically cleaned
their equipment once a day, rarely changed suppliers, and conducted few
grinds per day, but FSIS has found that the majority of retailers grind
product and clean their equipment multiple times per day. A single
daily recordkeeping task is, therefore, insufficient to provide the
necessary information for traceback and could inhibit FSIS's ability to
identify suppliers during ongoing outbreaks. In addition, the time
savings of daily recordkeeping over per-grind recordkeeping is likely
low since most of the same information will need to be kept. Therefore,
FSIS rejected this alternative.
(3) The Final Rule: The chosen alternative requires that retail
stores and official establishments maintain grinding records such that
each producer must record the required information whenever any of the
required information for the lot of product being ground changes. To
minimize the burden placed on these entities, FSIS has removed certain
pieces of information from the requirements that were included in the
proposed rule, ensuring that only the necessary information for
traceability is maintained. Requiring records that pertain to each
individual grind guarantees that investigators will be able to identify
the components included in an adulterated package of ground beef,
creating a narrower list of potential sources of adulterated product
and increasing the chances that the source of contamination is
identified. FSIS has determined that this alternative is the least
burdensome option that achieves the regulatory objective.
(4) More Detailed Recordkeeping Program: FSIS also considered
expanding the proposed recordkeeping requirements to include all fields
suggested in the 2009 FSIS guidance (all fields in the Table 2 sample
log). This approach would provide FSIS with more detailed records to
use during an investigation, which may improve traceability slightly.
However, the small improvement in the trace back process provided by
the additional level of detail would place an unnecessarily large
burden on those entities that grind product and must keep records. Any
such small improvement would not outweigh the costs incurred for
keeping the more detailed records. For this reason, FSIS decided to
require that only the most critical information be recorded. Other
information, including
[[Page 79244]]
that which appears on the sample log, is voluntary.
The costs and benefits of the final rule and each regulatory
alternative are displayed in Table 6.
Table 6--Regulatory Alternatives Considered
------------------------------------------------------------------------
Alternative Costs Benefits
------------------------------------------------------------------------
(1) Encouraging Voluntary No additional costs. No additional
Recordkeeping. benefits.
(2) Regulated Daily Slightly less costly Improvement over
Recordkeeping. alternative to voluntary
industry due to recordkeeping
small time savings because records are
over per-grind required and must
recordkeeping. be created every
day of grinding,
but the records
will in most cases
not be detailed
enough to
facilitate
traceability.
Therefore, any
benefits that can
realistically be
expected will be
minimal, and the
objective of
facilitating
traceability will
not be met.
(3) The Final Rule.......... $59.3 million ($48.5 Achievement of
million to $70.2 regulatory
million) annual objective resulting
costs to the in benefits to
industry, plus consumers in the
additional costs form of averted
associated with foodborne illness,
recording the to retailers and
source of trim and official
customer-requested establishments
grind components. grinding components
Potential slight from suppliers in
costs to consumers. the form of less
costly outbreaks
and recalls, and to
official
establishments
supplying ground
beef components in
the form of less
costly recalls and
insulation from
costly spillover
effects during food
safety events.
(4) More Detailed Most costly Achievement of
Recordkeeping. alternative to regulatory
industry. objective resulting
in the benefits
described above.
Potential for small
increase in
traceback speed and
therefore small
increase in avoided
illnesses.
------------------------------------------------------------------------
Expected Costs of the Final Rule
Costs to Industry
Retailers and official establishments that grind raw beef will
incur costs to comply with the final rule. These include the labor cost
of employees who record and maintain the records, storage costs, and
those costs associated with trim and customer-requested grinds. FSIS
has attempted to estimate the cost of labor and storage using
information obtained from industry associations, the U.S. Census
Bureau, the U.S. Bureau of Labor Statistics, a commercial real estate
services firm report, and public comments.
In order to keep adequate records when grinding trim, entities will
need to keep track of the source of each cut of beef from which the
trim was separated. If not all of the trim is ground in a single batch,
then entities will need to record each lot in which the trim is used.
Similarly, if retail stores grind beef at the request of customers,
they will need to record the required information for that small grind
if new source materials are used. How entities choose to deal with the
requirements will differ, and the costs associated with these
requirements will vary greatly because of differences in firm size,
component ordering practices, and grinding practices. FSIS used labor-
time estimates from a grocery store chain's public comments to estimate
additional costs related to grinding trim. FSIS left additional costs
related to customer requested grinds unquantified because of the many
variations in how retail stores will deal with the requirements and the
relatively small number of customer grinds that take place.
Entities may incur other costs for training and investment should
they choose to implement complex recordkeeping systems. Electronic
recordkeeping options exist, which are likely more expensive than paper
records but provide additional benefits such as improved accuracy,
lower labor requirements, useful reporting and recall management tools,
and supply-side management functions. Firms will decide individually
whether these systems are suitable to their needs, and the proportion
of those choosing more complex systems is uncertain. For the purposes
of the cost estimate, FSIS has only estimated costs and benefits of the
basic, paper-based system of recordkeeping. FSIS assumes that if firms
choose to invest more in their recordkeeping systems, they will do so
because the benefits achieved outweigh the costs.
Model records are available in the preamble of this final rule, on
the FSIS Web site,\22\ and on the Web sites of industry associations.
Best practices and guidance for beef grinders are also available from a
number of sources.\23\ Therefore, FSIS does not anticipate that
entities will incur significant costs for the development of records
and standard operating procedures. FSIS also believes that training for
recordkeeping can be done informally, on the job, and will therefore
result in minimal costs. Also, as noted above, FSIS will conduct
webinars and provide guidance to help inform industry of the new
requirements, which will help minimize training costs.
---------------------------------------------------------------------------
\22\ FSIS, (2012) Sanitation Guidance for Beef Grinders,
available at: http://www.fsis.usda.gov/wps/wcm/connect/b002d979-1e1e-487e-ac0b-f91ebd301121/Sanitation_Guidance_Beef_Grinders.pdf?MOD=AJPERES.
\23\ Food Marketing Institute, (2013) ``Comprehensive Guide Meat
Ground at Retail Recordkeeping and Sanitation,'' accessed February
12, 2015, available at: http://www.fmi.org/docs/default-source/food-safety-best-practice-guides/meat-ground-at-retail-comprehensive-guide.pdf?sfvrsn=6. Beef Industry Food Safety Council, (2005) ``Best
Practices For Retailer Operations Producing Raw Ground Beef,''
accessed February 12, 2015, available at: https://www.bifsco.org/CMDocs/BIFSCO/Best%20Practices/bestpracticesforretail4-05.pdf.
---------------------------------------------------------------------------
To estimate the labor costs associated with recordkeeping, FSIS
divided the entities keeping no records and incomplete records into
categories based on three basic types of grinding activities:
1. No trim--grinds in which no trim is used, only chubs of ground
beef;
2. With trim--grinds in which trim is added to chubs of ground
beef; and
3. Trim-only--grinds consisting only of trim.
Using distributions from the CDC recordkeeping study, FSIS was able
to estimate the number of official establishments and retail stores
that do not use trim in their grinds (no trim), that use trim in their
grinds (with trim), and that use no trim in some grinds and
[[Page 79245]]
only trim in others (trim-only). While there are likely other
combinations of practices, and not all entities will fall into the
three defined categories, these categories are sufficient for the
purposes of the cost estimate. The categorization of entities is
displayed in Table 7.
Table 7--Entities Categorized by Types of Grinding Performed
----------------------------------------------------------------------------------------------------------------
Size Recordkeeping Entities Trim or no trim Trim practices Entities
----------------------------------------------------------------------------------------------------------------
Large.......... Incomplete.......... 13,069 Using Trim (91%).... Trim-Only (90%).... 10,703
With Trim (10%).... 1,189
No Trim (9%)........ ................... 1,176
No Records.......... 5,887 Using Trim (91%).... Trim-Only (90%).... 4,821
With Trim (10%).... 536
No Trim (9%)........ ................... 530
Small.......... Incomplete.......... 4,514 Using Trim (61%).... Trim-Only (52%).... 1,432
With Trim (48%).... 1,322
No Trim (39%)....... ................... 1,761
No Records.......... 42,441 Using Trim (61%).... Trim-Only (52%).... 13,462
With Trim (48%).... 12,427
No Trim (39%)....... ................... 16,552
----------------------------------------------------------------------------------------------------------------
Values in table may not sum to Totals because of rounding.
FSIS assigned time estimates for each of the three types of grinds
based on public comments. For no trim grinds, FSIS assumed that
recordkeeping would take approximately 1 minute per grind.\24\ For with
trim grinds, FSIS assumed that the number of components would
approximately double, and therefore recordkeeping would take about 2
minutes. For trim-only grinds, FSIS assumed that recordkeeping would
vary depending on the number of sources and take approximately 6 to 10
minutes per grind.\25\ If an entity is keeping complete records, FSIS
assumed that it would not incur any additional costs; if an entity is
keeping no records, it would incur costs associated with the full labor
time estimate, and if an establishment is keeping incomplete records,
FSIS assumed it would incur costs associated with half of the labor
time estimate.
---------------------------------------------------------------------------
\24\ ``60 seconds to fill each grind log entry''--Docket ID#
FSIS-2009-0011-0035, available at: http://www.regulations.gov/#!documentDetail;D=FSIS-2009-0011-0035.
\25\ ``8 minutes per day to log beef trim,'' 2
minutes to account for varying number of components--Docket ID#
FSIS-2009-0011-0035, available at: http://www.regulations.gov/#!documentDetail;D=FSIS-2009-0011-0035.
---------------------------------------------------------------------------
FSIS also relied on public comments to estimate the number of
grinding activities completed per day. FSIS consequently estimated that
the average entity grinds 4 to 5.5 times per day,\26\ with the
exception of those that do trim-only grinding. For those entities, FSIS
estimated that they would complete no trim grinds 4 to 5.5 times per
day and then perform an additional trim-only grind (for a total of 5 to
6.5 per day). Further, FSIS estimated that approximately 90 percent of
retailers perform customer-requested grinds, and that those grinds make
up 1 percent of the total grinds.\27\ FSIS estimated that the
recordkeeping for customer-requested grinds would take about 1 minute.
Customer-requested grinds were not applied to official establishments.
Finally, FSIS estimated that the average retailer grinds 6 days per
week.\28\
---------------------------------------------------------------------------
\26\ Low estimate: ``Grinds raw beef 4x per day''--Docket ID#
FSIS-2009-0011-0034, available at: http://www.regulations.gov/#!documentDetail;D=FSIS-2009-0011-0034. High estimate: Midpoint of
``3-8 batches a day''--Docket ID# FSIS-2009-0011-0040, available at:
http://www.regulations.gov/#!documentDetail;D=FSIS-2009-0011-0040.
\27\ ``90 percent of the retailers that grind beef in store
perform grinds at a consumer's request . . . the figure is 1 percent
or less''--Docket ID# FSIS-2009-0011-0047, available at: http://www.regulations.gov/#!documentDetail;D=FSIS-2009-0011-0047.
\28\ ``6x per week''--Docket ID# FSIS-2009-0011-0034, available
at: http://www.regulations.gov/#!documentDetail;D=FSIS-2009-0011-
0034.
---------------------------------------------------------------------------
To illustrate the time estimate, FSIS has provided the following
example of a retail store that does trim-only grinds, performs
customer-requested grinds, and has incomplete records:
[ssquf] Low Estimate: [4 grinds per day x 1 min per grind (no trim)
+ 1 grind per day x 6 min per grind (trim-only) + {5 grinds (no trim +
trim-only) * 1/99 \29\{time} grinds per day x 1 min per grind
(customer request)] x 6 days per week x 50 percent (incomplete records)
= 30.2 minutes per week.
---------------------------------------------------------------------------
\29\ (1/99) is the factor used to calculate the number of
customer-requested grinds as 1 percent of the total grinds.
---------------------------------------------------------------------------
[ssquf] High Estimate: [5.5 grinds per day x 1 min per grind (no
trim) + 1 grind per day x 10 min per grind (trim-only) + {6.5 grinds
(no trim + trim-only) * 1/99{time} x 1 min per grind (customer
request)] x 6 days per week x 50 percent (incomplete records) = 46.7
minutes per week.
If the store in the example above started with no records, the 50-
percent factor would be removed, increasing the time burden to 60.3 to
93.4 minutes per week. If instead the store were an official
establishment, the customer grinds would be removed, resulting in a
burden of 30 to 46.5 minutes per week.
Time estimates were calculated for each entity in Table 7 and then
multiplied by 52 weeks for an annual estimate. To calculate the cost of
this added labor, FSIS estimated that the recordkeeping would be
performed by an employee paid at the Bureau of Labor Statistics
``Butchers and Meat Cutters'' (occupation code 51-3021) mean hourly
wage rate of $14.40.\30\ To account for benefits paid to these
employees, such as paid leave and retirement contributions, FSIS
applied a benefits factor of 1.412 \31\ to the wage rate, resulting in
a total compensation rate of $20.33 per hour. FSIS then multiplied the
labor time estimates by the total compensation rate estimate to get the
total annual cost of labor, displayed in Table 8.
---------------------------------------------------------------------------
\30\ Bureau of Labor Statistics, May 2013 National Occupational
Employment and Wage Estimates, accessed February 2, 2015, available
at: http://www.bls.gov/oes/current/oes_nat.htm.
\31\ Bureau of Labor Statistics, Employer Costs for Employee
Compensation, September 2014, accessed February 2, 2015, available
at: http://www.bls.gov/news.release/ecec.t06.htm. Wages and salaries
as a percentage of total compensation are estimated at 70.8% for all
service-providing industries, with total benefits accounting for the
other 29.2%. To estimate total compensation, FSIS applied a benefits
factor of (29.2%/70.8% + 1) = 1.412 to the hourly wage rate.
[[Page 79246]]
Table 8--Annual Labor Costs
----------------------------------------------------------------------------------------------------------------
Low estimate High estimate Midpoint estimate
Entity size ($mil) ($mil) ($mil)
----------------------------------------------------------------------------------------------------------------
Large.................................................. 12.24 18.70 15.47
Small.................................................. 33.54 48.74 41.14
--------------------------------------------------------
Total.............................................. 45.78 67.44 56.61
----------------------------------------------------------------------------------------------------------------
Values in table may not sum to Totals because of rounding.
To account for record storage costs, FSIS again used distributions
of recordkeeping practices from the aforementioned CDC study.\32\
According to the study, 36 percent of retailers that maintain records
keep them for greater than 1 year, 39 percent keep records for 6 months
to 1 year, and 25 percent keep records for less than 6 months. FSIS
assumed that grinding records for a full year could be kept in 3 square
feet of storage space, and that the cost of that storage would be
approximately $15.50 annually.\33\ FSIS then assumed that those retail
stores that already kept records, but for less than 6 months, would
incur $46.50 in costs for a full year of storage (3 sq. ft. x $15.50),
and those entities that already kept records for 6 months to 1 year
would pay half the annual cost, or $23.25. Those entities keeping
records for greater than 1 year would have no additional costs because
they are already maintaining records at the minimum level.
---------------------------------------------------------------------------
\32\ See footnote 3.
\33\ Cassidy Turley, National Retail Review Winter 2014,
accessed February 3, 2015, available at: http://dtz.cassidyturley.com/DesktopModules/CassidyTurley/Download/Download.ashx?contentId=3926&fileName=Cassidy_Turley_National_Retail_Review_Winter_2014.pdf. FSIS used the national average quoted rate
for Community/Neighborhood/Strip Shopping Centers (see page 11) to
approximate the cost of storing records at a retail store.
---------------------------------------------------------------------------
The distribution from the CDC study was applied to the number of
retail stores keeping complete or incomplete records, and then
multiplied by the assumed annual cost of storage. The retail stores
that do not keep records will incur the $46.50 in costs for a full year
of storage.
For official establishments, FSIS assumed that those already
maintaining records would be keeping those records for at least 2
years, as required by 9 CFR 320.3(a). For these establishments there
would be cost savings associated with one year of reduced storage time
equivalent to $46.50. For official establishments not maintaining
records, there would be an additional cost of $46.50. FSIS applied the
cost savings to those official establishments keeping records and the
additional costs to those official establishments keeping no records,
and added those costs and savings to the recordkeeping costs estimated
for retail stores. The results are displayed in Table 9.
Table 9--Annual Record Storage Costs
------------------------------------------------------------------------
Storage costs
Entity size Affected entities ($mil)
------------------------------------------------------------------------
Large............................. 16,613 0.62
Small............................. 46,194 2.08
-------------------------------------
Total......................... 62,807 2.70
------------------------------------------------------------------------
Values in table may not sum to Totals because of rounding.
The total cost to industry was calculated as a sum of the
previously estimated costs. The results of the annual industry cost
estimate are displayed in Table 10.
Table 10--Total Annual Industry Costs
----------------------------------------------------------------------------------------------------------------
Midpoint
Entity size Low estimate High estimate estimate Unqualified costs
($mil) ($mil) ($mil)
----------------------------------------------------------------------------------------------------------------
Large.............................. 12.86 19.32 16.09 Additional costs associated
Small.............................. 35.63 50.83 43.23 with the grinding of trim
and customer requested
grinds.
------------------------------------------------
Total.......................... 48.48 70.15 59.32
----------------------------------------------------------------------------------------------------------------
Values in table may not sum to Totals because of rounding.
Cost to Consumers
This rule will not result in any direct costs to consumers. It is
possible that retailers and official establishments that grind raw beef
will pass on a portion of the increased cost of grinding to consumers.
In most cases these costs should be small. In the case of customer-
requested grinds, consumers may end up paying a small fee, as is
presently customary at some retail stores. While this practice may
discourage some consumers, the facts that customer-requested grinds are
so infrequent, and fees are already applied at some locations, suggest
that fees will not cause major disruptions to ground beef sales.
Therefore FSIS expects that
[[Page 79247]]
any indirect costs to consumers will be minimal.
Cost to Agency
FSIS does not anticipate that the Agency or other regulators will
incur additional costs as a result of this rule. FSIS has provided
guidance to retailers that grind raw beef and will continue outreach
efforts to ensure that retailers are aware of the rule and are able to
comply. FSIS will also hold webinars and provide guidance on the new
recordkeeping requirements.
FSIS will conduct a retrospective analysis to quantify what
effects, if any, the final rule has on Agency resources. To do so, FSIS
will examine the following:
Number, length, and outcome of recall effectiveness
checks.
Regulatory noncompliance citations at official
establishments for the proposed revisions to 9 CFR 320.1(b)(4).
We determined to not examine the overtime hours for enforcement,
district office, and recall staff on a per-outbreak basis, as suggested
in the proposed rule. The overtime hours cannot directly link to
outbreaks.
Expected Benefits of the Final Rule
Public Health Benefits
Mandatory grinding logs with a minimum level of necessary
information will improve FSIS investigators' ability to trace
implicated product to its source, recommend timely and accurate
recalls, remove adulterated product from commerce, and prevent
illnesses at later stages of outbreaks.\34\
---------------------------------------------------------------------------
\34\ For a visual representation of the potential for averted
illnesses due to quicker investigations and an earlier recall,
please refer to Figure 1 of the FDA Establishment and Maintenance of
Records Under the Public Health Security and Bioterrorism
Preparedness and Response Act of 2002 final rule, available at:
https://federalregister.gov/a/04-26929/#p-674.
---------------------------------------------------------------------------
Mandatory grinding logs will increase the likelihood that
adulterated product is able to be traced back to its source. When FSIS
identifies official establishments producing adulterated product, it
takes steps to assess their production processes through comprehensive
food safety assessments and follow-up evaluations. In doing so, FSIS is
able to identify poor practices and deficiencies in process control and
to require changes to resolve these issues. In some cases these
assessments lead to findings that are valuable to industry as a whole,
and the lessons learned can be documented and disseminated in the form
of guidance. Improvements to production practices and process control,
whether at implicated official establishments or other establishments
that have benefited from lessons learned, will result in reductions in
foodborne illness outbreaks.
Firms that supply ground beef components will have incentives to
apply the guidance developed as a result of previous outbreak
investigations and to improve the safety of their product in general.
As traceability systems improve as a result of better recordkeeping,
liability for food safety events will be shifted from retailers to
suppliers. This shift will reduce the prevalence of moral hazard--
explained previously in the Need for the Rule section--thereby
incentivizing supplier firms to produce safer product through the
potential for adverse consequences of supplying unsafe product, such as
reputation loss and litigation.\35\ Therefore, by improving
traceability through better recordkeeping, this rule has the potential
to promote a safer supply of ground beef for consumers.
---------------------------------------------------------------------------
\35\ See footnote 9.
---------------------------------------------------------------------------
Benefits to Retailers and Official Establishments That Grind Raw Beef
Retailers and official establishments that grind raw beef products
purchased from a supplier will benefit from mandatory recordkeeping
because investigators have a better chance of tracing the adulterated
product back to the supplier. Investigations that end at the retail
level often result in recalls that are very costly for retailers
because they bear the burden of product loss and compensating customers
for returned product. These recalls can also negatively affect the
brand of the store or chain, resulting in a loss in consumer confidence
and a loss in sales. In some cases outbreak investigations that end at
the retail level could result in exposure to legal liability.\36\
Accurate records increase the likelihood that contaminated product is
traced to its source, lessening the impact of recalls on retailers and
official establishments that purchase ground beef components from
suppliers.
---------------------------------------------------------------------------
\36\ See Financial Exposures section of: Grocery Manufacturers
Association (GMA), Covington & Burling, and Ernst & Young
``Capturing Recall Costs,'' 2011, accessed January 15, 2015,
available at: http://www.gmaonline.org/file-manager/images/gmapublications/Capturing_Recall_Costs_GMA_Whitepaper_FINAL.pdf.
---------------------------------------------------------------------------
For retailers that are already maintaining accurate records, there
will be benefits from the reduction in free rider firms, as explained
previously in the Need for the Rule section. Fewer free rider firms
will decrease the chances that outbreak investigations go unresolved,
which can greatly reduce the cost to retailers. When a source is not
identified, an outbreak may indiscriminately affect firms selling and
producing ground beef. The fresh spinach outbreak in 2006 is a prime
example of the consequences of an outbreak where the source of
contamination is in doubt. Bagged spinach was associated with
infections of E. coli O157:H7, but because no individual processor
could be identified as having been the source of the outbreak, FDA and
CDC issued a public alert advising consumers not to eat bagged spinach
and eventually advised consumers not to eat all fresh spinach. Six
companies issued voluntary recalls in September 2006. Sales of spinach
plummeted from $14.3 million in September to $3.7 million in October
and did not recover fully until January 2008.\37\ An outbreak caused by
a single firm, which was identified weeks after public warnings and
recalls took place, ended up causing serious losses to the entire
industry. Mandatory recordkeeping increases the chances that an
investigator identifies the source of contamination, thereby increasing
the chances that an outbreak will have minimal impact on uninvolved
firms.
---------------------------------------------------------------------------
\37\ University of Minnesota Food Industry Center, (2009)
``Natural Selection: 2006 E. coli Recall of Fresh Spinach,''
accessed January 20, 2015, available at: http://ageconsearch.umn.edu/bitstream/54784/2/Natural%20Selection.pdf.
---------------------------------------------------------------------------
Benefits to Official Establishments That Supply Ground Beef Components
Official establishments supplying retail stores and processing
establishments with ground beef components will also benefit from the
increased ability of FSIS investigators to identify sources of
contamination. When individual establishments are found to be suppliers
of adulterated product, other uninvolved establishments are insulated
from large spillover effects such as those illustrated in the spinach
recall described above. Identifying the source establishment will
likely be even more significant for official establishments because
ground beef components make up a greater portion of their sales than
ground beef would at a retail store. Mandatory recordkeeping could help
to preserve consumer confidence and ground beef sales in the event of a
foodborne illness outbreak, benefiting all firms that are uninvolved in
the outbreak, while penalizing the establishment that supplied the
adulterated product.
Another potential benefit for official establishments is a
reduction in the scope of ground beef recalls. All else being equal,
more accurate grinding records should result in the
[[Page 79248]]
identification of specific lots of implicated product and therefore a
narrower recall.\38\ Smaller recalls will result in lower costs from
product loss and reimbursement and recall execution costs such as
advertising and public relations management. In some cases, smaller
recalls as a result of better recordkeeping could even minimize sales
losses, because a recall could be limited to a smaller geographical
region thereby reducing losses in consumer confidence.
---------------------------------------------------------------------------
\38\ Resende-Filho, Moises A. and Buhr, Brian L. ``Economics of
Traceability for Mitigation of Food Recall Costs,'' prepared for
presentation at the International Association of Agricultural
Economists (IAAE) Triennial Conference, Foz do Igua[ccedil]u,
Brazil, 18-24 August, 2012, available at: http://ageconsearch.umn.edu/bitstream/126193/2/IAAE_2012_Paper.pdf. This
paper presents simulation results of a model that indicated that
that presence of a traceability system decreased volumes of recalls
by over 90 percent (see Table 3).
---------------------------------------------------------------------------
Finally, official establishments will benefit from lessons learned
during recalls and follow-up assessments at entities linked to
foodborne illness outbreaks. As recordkeeping practices at retail and
official processing establishments improve, more outbreaks will be able
to be traced to their source. This traceback will initiate further
examination of current practices and could lead to the identification
of significant issues that, if corrected, would benefit official
establishments generally.
Net Benefits of the Final Rule
The total costs and benefits achieved as a result of the final rule
are displayed in Table 11.
Table 11--Net Benefits of the Final Rule
------------------------------------------------------------------------
------------------------------------------------------------------------
Costs: .................................
Labor............................ $56.6 million annually ($45.8
million to $67.4 million).
Storage.......................... $2.7 million annually.
Unquantified Costs............... Non-labor costs associated with
recordkeeping for the grinding
of trim and customer requested
grinds.
Potential slight costs to
consumers in the form of ground
beef price increases.
Benefits:
Unquantified Benefits............ Benefits to consumers in the form
of averted foodborne illnesses
as a result of contaminated
ground beef.
Benefits to retailers and
official establishments grinding
raw beef in the form of less
costly food safety events, such
as outbreaks and recalls.
Benefits to official
establishments supplying ground
beef components in the form of
less costly recalls and
insulation from costly spillover
effects during food safety
events.
------------------------------------------------------------------------
Regulatory Flexibility Analysis
The FSIS Administrator certifies that, for the purpose of the
Regulatory Flexibility Act (5. U.S.C. 601-602), the final rule will not
have a significant economic impact on a substantial number of small
entities in the United States. While the rule does affect a large
number of small businesses, the average per entity annual cost is
relatively low, at approximately $905 (746 to 1,064). This estimate
does not include unquantified costs associated with customer-requested
grinds. These costs will vary by retail store, but the total cost of
compliance across the industry will be low because of the relatively
small number of customer requested grinds. Table 12 provides a summary
of the small entities affected by the final rule and the average annual
cost.
Table 12--Total Costs and Average Cost per Entity for Small Businesses
----------------------------------------------------------------------------------------------------------------
Total annual Average annual
Entity type Entities cost ($mil) cost ($)
----------------------------------------------------------------------------------------------------------------
Retailer........................................................ 46,649 42.22 905.16
Official........................................................ 1,132 1.00 885.63
-----------------------------------------------
Total....................................................... 47,781 43.23 904.70
----------------------------------------------------------------------------------------------------------------
Values in table may not sum to Totals because of rounding.
There is a multitude of guidance already available that small
businesses can use, and FSIS has provided a sample grinding log in this
final rule that can be used. These resources will help to keep the cost
of implementing a new recordkeeping program low. In general, as the
size of the business and the amount of ground product sold gets
smaller, so too will the number of suppliers and components used, and
the number of grinds performed. The smaller scale of production should
contribute to lower average costs for smaller businesses. Moreover, the
fact that some small firms are already maintaining adequate records
shows that the cost of the practice is not prohibitive to doing
business.
Paperwork Reduction Act
In accordance with section 3507(d) of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the new information collection
requirements included in this final rule have been submitted for
approval to the Office of Management and Budget (OMB).
Title: Records to be Kept by Official Establishments and Retail
Stores that Grind Raw Beef Products.
Type of Collection: New.
Abstract: Under this final rule, all official establishments and
retail stores that grind raw beef products for sale in commerce,
including products ground at a customer's request, will have to
maintain certain records.
The required records will have to include the following
information:
(A) The establishment numbers of the establishments supplying the
materials used to prepare each lot of raw ground beef product,
(B) All supplier lot numbers and production dates,
(C) The names of the supplied materials, including beef components
[[Page 79249]]
and any materials carried over from one production lot to the next,
(D) The date and time each lot of raw ground beef product is
produced, and
(E) The date and time when grinding equipment and other related
food-contact surfaces are cleaned and sanitized.
In response to comments, FSIS removed requirements for entities
covered by this rule to provide names, points of contact, and phone
numbers for official establishments. Also in response to comments, the
Agency eliminated the requirement that the weight of each source
component used in a lot of ground beef be kept. However, in response to
other public comments, FSIS increased the time estimates for
recordkeeping activities, the frequency of recordkeeping tasks, and the
number of active grinding days per week. FSIS also increased the number
of retail stores that will be affected by the rule. These changes
resulted in a significant increase in the number of burden hours
initially estimated in the proposed rule.
Estimate of Burden: FSIS estimates that it would take a maximum of
50.33 hours per respondent annually.
Respondents: Official establishments and retail stores that grind
raw beef products.
Estimated Number of Respondents: 65,911.
Estimated Maximum Annual Number of Responses per Respondent: 1,878.
Estimated Maximum Total Annual Recordkeeping Burden: 3,317,493
hours.
Copies of this information collection assessment can be obtained
from Gina Kouba, Paperwork Reduction Act Coordinator, Food Safety and
Inspection Service, USDA, 1400 Independence Ave. SW., Room 6065 South
Building, Washington, DC 20250-3700; (202) 720- 5627.
Executive Order 12988
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Under this rule: (1) All State and local laws and
regulations that are inconsistent with this rule will be preempted; (2)
no retroactive effect will be given to this rule; and (3) no
administrative proceedings will be required before parties may file
suit in court challenging this rule.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' E.O. 13175 requires Federal agencies to consult
and coordinate with tribes on a government-to-government basis on
policies that have tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian tribes, on the relationship between the Federal Government
and Indian tribes or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
FSIS has assessed the impact of this rule on Indian tribes and
determined that this rule does not, to our knowledge, have tribal
implications that require tribal consultation under E.O. 13175. If a
Tribe requests consultation, the Food Safety and Inspection Service
will work with the Office of Tribal Relations to ensure meaningful
consultation is provided where changes, additions, and modifications
identified herein are not expressly mandated by Congress.
E-Government Act
FSIS and USDA are committed to achieving the purposes of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things,
promoting the use of the Internet and other information technologies
and providing increased opportunities for citizen access to Government
information and services, and for other purposes.
Additional Public Notification
Public awareness of all segments of rulemaking and policy
development is important. Consequently, FSIS will announce this Federal
Register publication on-line through the FSIS Web page located at:
http://www.fsis.usda.gov/federal-register.
FSIS also will make copies of this publication available through
the FSIS Constituent Update, which is used to provide information
regarding FSIS policies, procedures, regulations, Federal Register
notices, FSIS public meetings, and other types of information that
could affect or would be of interest to our constituents and
stakeholders. The Update is available on the FSIS Web page. Through the
Web page, FSIS is able to provide information to a much broader, more
diverse audience. In addition, FSIS offers an email subscription
service which provides automatic and customized access to selected food
safety news and information. This service is available at: http://www.fsis.usda.gov/subscribe. Options range from recalls to export
information, regulations, directives, and notices. Customers can add or
delete subscriptions themselves, and have the option to password
protect their accounts.
USDA Nondiscrimination Statement
No agency, officer, or employee of the USDA shall, on the grounds
of race, color, national origin, religion, sex, gender identity, sexual
orientation, disability, age, marital status, family/parental status,
income derived from a public assistance program, or political beliefs,
exclude from participation in, deny the benefits of, or subject to
discrimination any person in the United States under any program or
activity conducted by the USDA.
How To File a Complaint of Discrimination
To file a complaint of discrimination, complete the USDA Program
Discrimination Complaint Form, which may be accessed online at http://www.ocio.usda.gov/sites/default/files/docs/2012/Complain_combined_6_8_12.pdf, or write a letter signed by you or your
authorized representative.
Send your completed complaint form or letter to USDA by mail, fax,
or email:
Mail: U.S. Department of Agriculture, Director, Office of
Adjudication 1400 Independence Avenue SW., Washington, DC 20250-9410
Fax: (202) 690-7442
Email: [email protected].
Persons with disabilities who require alternative means for
communication (Braille, large print, audiotape, etc.), should contact
USDA's TARGET Center at (202) 720-2600 (voice and TDD).
List of Subjects in 9 CFR Part 320
Meat inspection, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, FSIS is amending 9 CFR
part 320, as follows:
PART 320--RECORDS, REGISTRATION, AND REPORTS
0
1. The authority citation for part 320 continues to read as follows:
Authority: 21 U.S.C. 601-695; 7 CFR 2.7, 2.18, 2.53
0
2. Amend Sec. 320.1 by adding paragraph (b)(4) to read as follows:
Sec. 320.1 Records required to be kept.
* * * * *
(b) * * *
(4)(i) In the case of raw ground beef products, official
establishments and retail stores are required to keep records that
fully disclose:
(A) The establishment numbers of the establishments supplying the
materials used to prepare each lot of raw ground beef product;
(B) All supplier lot numbers and production dates;
[[Page 79250]]
(C) The names of the supplied materials, including beef components
and any materials carried over from one production lot to the next;
(D) The date and time each lot of raw ground beef product is
produced; and
(E) The date and time when grinding equipment and other related
food-contact surfaces are cleaned and sanitized.
(ii) Official establishments and retail stores covered by this part
that prepare ground beef products that are ground at an individual
customer's request must keep records that comply with paragraph
(b)(4)(i) of this section.
(iii) For the purposes of this section of the regulations, a lot is
the amount of ground raw beef produced during particular dates and
times, following clean up and until the next clean up, during which the
same source materials are used.
* * * * *
0
3. Revise Sec. 320.2 to read as follows:
Sec. 320.2 Place of maintenance of records.
(a) Except as provided in paragraph (b) of this section, any person
engaged in any business described in Sec. 320.1 and required by this
part to keep records must maintain such records at the place where such
business is conducted, except that if such person conducts such
business at multiple locations, he may maintain such records at his
headquarters' office. When not in actual use, all such records must be
kept in a safe place at the prescribed location in accordance with good
commercial practices.
(b) Records required to kept under Sec. 320.1(b)(4) must be kept
at the location where the raw beef was ground.
0
4. Revise Sec. 320.3 to read as follows:
Sec. 320.3 Record retention period.
(a) Except as provided in paragraphs (b) and (c) of this section,
every record required to be maintained under this part must be retained
for a period of 2 years after December 31 of the year in which the
transaction to which the record relates has occurred and for such
further period as the Administrator may require for purposes of any
investigation or litigation under the Act, by written notice to the
person required to keep such records under this part.
(b) Records of canning as required in subpart G of part 318 of this
chapter, must be retained as required in Sec. 318.307(e); except that
records required by Sec. 318.302(b) and (c) must be retained as
required by those sections.
(c) Records required to be maintained under Sec. 320.1(b)(4) must
be retained for one year.
Done in Washington, DC, on: December 14, 2015.
Alfred V. Almanza,
Acting Administrator.
[FR Doc. 2015-31795 Filed 12-18-15; 8:45 am]
BILLING CODE 3410-DM-P