Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of the Salable Quantity and Allotment Percentage for Class 3 (Native) Spearmint Oil for the 2004-2005 Marketing Year, 29917-29920 [05-10441]
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29917
Rules and Regulations
Federal Register
Vol. 70, No. 100
Wednesday, May 25, 2005
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Docket No. FV04–985–2 FIR–A2]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Revision of the Salable
Quantity and Allotment Percentage for
Class 3 (Native) Spearmint Oil for the
2004–2005 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
SUMMARY: The Department of
Agriculture (USDA) is adopting, as a
final rule, without change, the
provisions of three interim final rules
that increased the quantity of Class 3
(Native) spearmint oil produced in the
Far West that handlers may purchase
from, or handle for, producers during
the 2004–2005 marketing year. This rule
continues in effect the actions that
increased the Native spearmint oil
salable quantity by an additional
580,024 pounds from 773,474 pounds to
1,353,498 pounds, and the allotment
percentage by an additional 27 percent
from 36 percent to 63 percent. The
Spearmint Oil Administrative
Committee (Committee), the agency
responsible for local administration of
the marketing order for spearmint oil
produced in the Far West, unanimously
recommended this rule to avoid extreme
fluctuations in supplies and prices and
to help maintain stability in the Far
West spearmint oil market.
EFFECTIVE DATE: June 24, 2005.
FOR FURTHER INFORMATION CONTACT:
Susan M. Hiller, Northwest Marketing
Field Office, Marketing Order
Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1220
SW. Third Avenue, Suite 385, Portland,
Oregon 97204; Telephone: (503) 326–
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2724, Fax: (503) 326–7440; or George
Kelhart, Technical Advisor, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW., STOP 0237,
Washington, DC 20250–0237;
Telephone: (202) 720–2491, Fax: (202)
720–8938.
Small businesses may request
information on complying with this
regulation by contacting Jay Guerber,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or E-mail:
Jay.Guerber@usda.gov.
This rule
is issued under Marketing Order No.
985, as amended (7 CFR part 985),
regulating the handling of spearmint oil
produced in the Far West (Washington,
Idaho, Oregon, and designated parts of
Nevada and Utah), hereinafter referred
to as the ‘‘order.’’ The order is effective
under the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601–674), hereinafter referred to
as the ‘‘Act.’’
USDA is issuing this rule in
conformance with Executive Order
12866.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. This rule is not intended to
have retroactive effect. This rule will
not preempt any State or local laws,
regulations, or policies, unless they
present an irreconcilable conflict with
this rule.
The Act provides that administrative
proceedings must be exhausted before
parties may file suit in court. Under
section 608c(15)(A) of the Act, any
hanler subject to an order may file with
USDA a petition stating that the order,
any provision of the order, or any
obligation imposed in connection with
the order is not in accordance with law
and request a modification of the order
or to be exempted therefrom. A handler
is afforded the opportunity for a hearing
on the petition. After the hearing USDA
would rule on the petition. The Act
provides that the district court of the
United States in any district in which
the handler is an inhabitant, or has his
or her principal place of business, has
jurisdiction to review USDA’s ruling on
the petition, provided an action is filed
SUPPLEMENTARY INFORMATION:
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not later than 20 days after the date of
the entry of the ruling.
The initial salable quantity and
allotment percentages for Scotch and
Native spearmint oils for the 2004–2005
marketing year were recommended by
the Committee at its October 8, 2003,
meeting. The Committee recommended
salable quantities of 766,880 pounds
and 773,474 pounds, and allotment
percentages of 40 percent and 36
percent, respectively, for Scotch and
Native spearmint oils. A proposed rule
was published in the Federal Register
on January 23, 2004 (69 FR 3272).
Comments on the proposed rule were
solicited from interested persons until
February 23, 2004. No comments were
received. Subsequently, a final rule
establishing the salable quantities and
allotment percentages for Scotch and
Native spearmint oils for the 2004–2005
marketing year was published in the
Federal Register on March 22, 2004 (69
FR 13213).
Pursuant to authority contained in
§§ 985.50, 985.51, and 985.52 of the
order, the Committee has made
unanimous Committee
recommendations to increase the
quantity of Native spearmint oil that
handlers may purchase from, or handle
for, producers during the 2004–2005
marketing year, which ends on May 31,
2005. The first revision was published
as an interim final rule in the Federal
Register on October 21, 2004 (69 FR
61755), which increased the salable
quantity from 773,474 pounds to
1,095,689 pounds, and the allotment
percentage from 36 percent to 51
percent. The second revision was
published as an amended interim final
rule in the Federal Register on February
23, 2005 (70 FR 8712), which further
increased the salable quantity by
171,873 pounds to 1,267,562 pounds,
and the allotment percentage by 8
percent to 59 percent. Finally, the third
revision was published as a further
amended interim final rule in the
Federal Register on March 28, 2005 (70
FR 15557), which further increased the
salable quantity an additional 85,936
pounds to 1,353,498 pounds, and the
allotment percentage an additional 4
percent to 63 percent.
The salable quantity is the total
quantity of each class of oil that
handlers may purchase from, or handle
for, producers during the marketing
year. The total salable quantity is
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Federal Register / Vol. 70, No. 100 / Wednesday, May 25, 2005 / Rules and Regulations
divided by the total industry allotment
base to determine an allotment
percentage. Each producer is allotted a
share of the salable quantity by applying
the allotment percentage to the
producer’s individual allotment base for
the applicable class of spearmint oil.
Taking into consideration the
following discussion on adjustments to
the Native spearmint oil salable
quantity, the 2004–2005 marketing year
salable quantity is increased to
1,353,498 pounds.
The original total industry allotment
base for Native spearmint oil for the
2004–2005 marketing year was
established at 2,148,539 pounds and
was revised at the beginning of the
2004–2005 marketing year to 2,148,410
pounds to reflect a 2003–2004
marketing year loss of 129 pounds of
base due to non-production of some
producers’ total annual allotments.
When the revised total allotment base of
2,148,410 pounds is applied to the
originally established allotment
percentage of 36 percent, the 2004–2005
marketing year salable quantity of
773,474 pounds was effectively
modified to 773,428 pounds.
This final rule adopts the provisions
of the three interim final rules that made
additional Native spearmint oil
available from the reserve pool. When
applied to each individual producer, the
27 percent allotment percentage
increase allows each producer to take
up to an amount equal to 27 percent of
their allotment base from their Native
spearmint oil reserve. This final rule
continues in effect the actions that made
an additional 580,024 pounds of Native
spearmint oil available to the market.
This figure is less than the salable
quantity increase because not all
producers have enough native
spearmint oil left their reserves to take
full advantage of this release.
The following table summarizes the
Committee recommendation:
Native Spearmint Oil Recommendation
(A) Estimated 2004–2005 Allotment
Base—2,148,539 pounds. This is the
estimate that the original 2004–2005
Native spearmint oil salable quantity
and allotment percentage was based on.
(B) Revised 2004–2005 Allotment
Base—2,148,410 pounds. This is 129
pounds less than the estimated
allotment base of 2,148,539 pounds.
This is less because some producers
failed to produce all of their 2003–2004
allotment.
(C) Initial 2004–2005 Allotment
Percentage—36 percent. This was
recommended by the Committee on
October 8, 2003.
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(D) Initial 2004–2005 Salable
Quantity—773,474. This figure is 36
percent of 2,148,539 pounds.
(E) Revised 2004–2005 Salable
Quantity—773,428 pounds. This figure
reflects the salable quantity initially
available after the beginning of the
2004–2005 marketing year due to the
129 pound reduction in the industry
allotment base to 2,148,410 pounds.
(F) First Revision to the 2004–2005
Salable Quantity and Allotment
Percentage.
(1) Increase in Allotment Percentage—
15 percent. The Committee
recommended a 12 percent increase at
its September 13, 2004, meeting and an
additional 3 percent increase at its
October 6, 2004, meeting, for a total
increase of 15 percent, which was
effective on October 21, 2004.
(2) 2004–2005 Allotment Percentage—
51 percent. This figure was derived by
adding the first revised increase of 15
percent to the initial 2004–2005
allotment percentage of 36 percent.
(3) Calculated 2004–2005 Salable
Quantity—1,095,689 pounds. This
figure is 51 percent of the revised 2004–
2005 allotment base of 2,148,410
pounds.
(4) Computed Increase in the 2004–
2005 Salable Quantity—322,262
pounds. This figure is 15 percent of the
revised 2004–2005 allotment base of
2,148,410 pounds.
(G) Second Revision to the 2004–2005
Salable Quantity and Allotment
Percentage.
(1) Increase in Allotment Percentage—
8 percent. The Committee
recommended an 8 percent increase at
its meeting on January 20, 2005, which
was effective on February 23, 2005.
(2) 2004–2005 Allotment Percentage—
59 percent. This figure was derived by
adding the 8 percent to the first revised
2004–2005 allotment percentage of 51
percent.
(3) Calculated 2004–205 Salble
Quantity—1,267,562 pounds. This
figure is 59 percent of the revised 2004–
2005 allotment base of 2,148,410
pounds.
(4) Computed Increase in the 2004–
2005 Salable Quantity—171,873
pounds. This figure is 8 percent of the
revised 2004–2005 allotment base of
2,148,410 pounds.
(H) Third Revision to the 2004–2005
Salable Quantity and Allotment
Percentage.
(1) Increase in Allotment Percentage—
4 percent. The Committee
recommended a 4 percent increase at its
meeting on February 23, 2005, which
was effective on March 28, 2005.
(2) 2004–2005 Allotment Percentage—
63 percent. This figure was derived by
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adding the 4 percent to the second
revised 2004–2005 allotment percentage
of 59 percent.
(3) Calculated 2004–2005 Salable
Quantity—1,353,498 pounds. This
figure is 63 percent of the revised 2004–
2005 allotment base of 2,148,410
pounds.
(4) Computed Increase in the 2004–
2005 Salable Quantity—85,936 pounds.
This figure is 4 percent of the revised
2004–2005 allotment base of 2,148,410
pounds.
In making this recommendation, the
Committee considered all available
information on price, supply, and
demand. The Committee also
considered reports and other
information from handlers and
producers in attendance at the meeting
and the report given by the Committee
manager from handlers and producers
who were not in attendance. The 2004–
2005 marketing year began on June 1,
2004. Handlers have reported purchases
of 1,070,801 pounds of Native spearmint
oil for the period of June 1, 2004,
through February 15, 2005. This amount
exceeds the five-year average of 899,979
pounds for this period by 170,822
pounds. On average, handlers indicated
that the estimated total demand for the
2004–2005 marketing year could range
from a minimum of 1,269,000 pounds to
as much as 1,279,000 pounds. This
amount exceeds the five-year average for
an entire marketing year of 973,456
pounds by as little as 295,544 pounds
and as much as 305,544 pounds.
Therefore, based on past history, the
industry may not be able to meet market
demand without these increases. When
the Committee made its initial
recommendation for the establishment
of the Native spearmint oil salable
quantity and allotment percentage for
the 2004–2005 marketing year, it had
anticipated that the year would end
with an ample available supply.
Based on its analysis of available
information, USDA has determined that
the salable quantity and allotment
percentage for Native spearmint oil for
the 2004–2005 marketing year should be
increased by 1,353,498 pounds and 63
percent, respectively.
This rule finalizes three interim final
rules that relaxed the Native spearmint
oil volume regulation and allows
producers to meet market needs and
improve returns. In conjunction with
the issuance of this rule, the
Committee’s revised marketing policy
statement for the 2004–2005 marketing
year has been reviewed by USDA. The
Committee’s marketing policy
statement, a requirement whenever the
Committee recommends implementing
volume regulations or recommends
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Federal Register / Vol. 70, No. 100 / Wednesday, May 25, 2005 / Rules and Regulations
revisions to existing volume regulations,
meets the intent of § 985.50 of the order.
During its discussion of revising the
2004–2005 salable quantities and
allotment percentages, the Committee
considered: (1) The estimated quantity
of salable oil of each class held by
producers and handlers; (2) the
estimated demand for each class of oil;
(3) prospective production of each class
of oil; (4) total of allotment bases of each
class of oil for the current marketing
year and the estimated total of allotment
bases of each class for the ensuring
marketing year; (5) the quantity of
reserve oil, by class, in storage; (6)
producer prices of oil, including prices
for each class of oil; and (7) general
market conditions for each class of oil,
including whether the estimated season
average price to producers is likely to
exceed parity. Conformity with USDA’s
‘‘Guidelines for Fruit, Vegetable, and
Specialty Crop Marketing Orders’’ has
also been reviewed and confirmed.
The increases in the Native spearmint
oil salable quantity and allotment
percentage allow for anticipated market
needs for this class of oil. In
determining anticipated market needs,
consideration by the Committee was
given to historical sales, and changes
and trends in production and demand.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA), the
Agricultural Marketing Service (AMS)
has considered the economic impact of
this action on small entities.
Accordingly, AMS has prepared this
final regulatory flexibility analysis.
The purpose of the RFA is to fit
regulatory actions to the scale of
business subject to such actions in order
that small businesses will not be unduly
or disproportionately burdened.
Marketing orders issued pursuant to the
Act, and the rules issued thereunder, are
unique in that they are brought about
through group action of essentially
small entities acting on their own
behalf. Thus, both statutes have small
entity orientation and compatibility.
There are currently 8 handlers of
spearmint oil who are subject to
regulation under the marketing order
and 98 producers of Class 3 (Native)
spearmint oil in the regulated area.
Small agricultural service firms are
defined by the Small Business
Administration (SBA) (13 CFR 121.201)
as those having annual receipts of less
than $6,000,000, and small agricultural
producers are defined as those having
annual receipts of less than $750,000.
Based on SBA’s definition of small
entities, the Committee estimates that 2
of the 8 handlers regulated by the order
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could be considered small entities. Most
of the handlers are large corporations
involved in the international trading of
essential oils and the products of
essential oils. In addition, the
Committee estimates that 15 of the 98
Native spearmint oil producers could be
classified as small entities under the
SBA definition. Thus, a majority of
handlers and producers of Far West
spearmint oil may not be classified as
small entities.
The Far West spearmint oil industry
is characterized by producers whose
farming operations generally involve
more than one commodity, and whose
income from farming operations is not
exclusively dependent on the
production of spearmint oil. A typical
spearmint oil-producing operation has
enough acreage for rotation such that
the total acreage required to produce the
crop is about one-third spearmint and
two-thirds rotational crops. Thus, the
typical spearmint oil producer has to
have considerably more acreage than is
planted to spearmint during any given
season. Crop rotation is an essential
cultural practice in the production of
spearmint oil for weed, insect, and
disease control. To remain economically
viable with the added costs associated
with spearmint oil production, most
spearmint oil-producing farms fall into
the SBA category of large businesses.
Small spearmint oil producers
generally are not as extensively
diversified as larger ones and as such
are more at risk to market fluctuations.
Such small producers generally need to
market their entire annual crop and do
not have the luxury of having other
crops to cushion seasons with poor
spearmint oil returns. Conversely, large
diversified producers have the potential
to endure one or more seasons of poor
spearmint oil markets because income
from alternate crops could support the
operation for a period of time. Being
reasonably assured of a stable price and
market provides small producing
entities with the ability to maintain
proper cash flow and to meet annual
expenses. Thus, the market and price
stability provided by the order
potentially benefit the small producer
more than such provisions benefit large
producers. Even though a majority of
handlers and producers of spearmint oil
may not be classified as small entities,
the volume control feature of this order
has small entity orientation.
This final rule adopts, without
change, the provisions of the interim
final rules published in the Federal
Register on October 21, 2004 (69 FR
61755) and amended on February 23,
2005 (70 FR 8712) and March 23, 2005
(70 FR 15557). Specifically, the rule
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29919
published on October 21, 2004,
increased the salable quantity from
773,474 pounds to 1,095,689 pounds,
and the allotment percentage from 36
percent to 51 percent for Native
spearmint oil for the 2004–2005
marketing year. The rule that
subsequently amended the interim final
rule was published on February 23,
2005, and increased the salable quantity
an additional 171,873 pounds to
1,267,562 pounds, and the allotment
percentage an additional 8 percent to 59
percent. Finally, the rule published on
March 28, 2005, increased the salable
quantity an additional 85,936 pounds to
1,353,498 pounds, and the allotment
percentage an additional 4 percent to 63
percent. This rule finalizes three interim
final rules that relaxed the Native
spearmint oil volume regulations and
allows producers to meet market needs
and improve returns.
An econometric model was used to
assess the impact that volume control
has on the prices producers receive for
their commodity. Without volume
control, spearmint oil markets would
likely be over-supplied, resulting in low
producer prices and a large volume of
oil stored and carried over to the next
crop year. The model estimates how
much lower producer prices would
likely be in the absence of volume
controls.
The recommended salable
percentages, upon which 2004–2005
producer allotments are based, are 40
percent for Scotch and 63 percent for
Native (a 27 percentage point increase
from the original salable percentage of
36 percent). Without volume controls,
producers would not be limited to these
allotment levels, and could produce and
sell additional spearmint. The
econometric model estimated a $1.30
per pound decline in the season average
producer price (for both classes of
spearmint oil) resulting from the higher
quantities that would be produced and
marketed if volume controls were not
used (i.e., if the salable percentages were
set at 100 percent). A previous price
decline estimate of $1.71 per pound was
based on the 2004–2005 salable
percentages (40 percent for Scotch and
36 percent for Native) published in the
Federal Register on March 22, 2004 (69
FR 13213).
The 2003 Far West producer price for
both classes of spearmint oil was $9.50
per pound, which is below the average
of $11.33 for the period of 1980 through
2002, based on National Agricultural
Statistics Service data. The surplus
situation for the spearmint oil market
that would exist without volume
controls in 2004–2005 also would likely
dampen prospects for improved
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producer prices in future years because
of the buildup in stocks.
The use of volume controls allows the
industry to fully supply spearmint oil
markets while avoiding the negative
consequences of over-supplying these
markets. The use of volume controls is
believed to have little or no effect on
consumer prices of products containing
spearmint oil and will not result in
fewer retail sales of such products.
Based on projections available at the
meetings, the Committee considered
alternatives to each of the increases
finalized herein. The Committee not
only considered leaving the Native
spearmint oil salable quantity and
allotment percentage unchanged, but
also looked at various increases. The
Committee reached each of its
recommendations to increase the salable
quantity and allotment percentage for
Native spearmint oil after careful
consideration of all available
information, and believes that the level
now reached will achieve the objectives
sought. Without the three increases, the
Committee believes the industry would
not have been able to meet market
needs.
This rule will not impose any
additional reporting or recordkeeping
requirements on either small or large
spearmint oil handlers. As with all
Federal marketing order programs,
reports and forms are periodically
reviewed to reduce information
requirements and duplication by
industry and public sector agencies. In
addition, USDA has not identified any
relevant Federal rules that duplicate,
overlap or conflict with this rule.
Further, the Committee meetings were
widely publicized throughout the
spearmint oil industry and all interested
persons were invited to attend the
meetings and participate in Committee
deliberations. Like all Committee
meetings, the September 13, 2004,
October 6, 2004, January 20, 2005, and
the February 23, 2005, meetings were
public meetings and all entities, both
large and small, were able to express
their views on each of the recommended
increases in the 2004–2005 Native
spearmint oil salable quantity and
allotment percentage.
The first revision was published as an
interim final rule in the Federal
Register on October 21, 2004 (69 FR
61755). Comments on the interim final
rule were solicited from interested
persons until December 20, 2004. No
comments were received. The second
revision was published as an amended
interim final rule in the Federal
Register on February 23, 2005 (70 FR
8712). Comments on the amended
interim final rule were solicited from
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interested persons until April 25, 2005.
No comments were received. Finally,
the third revision was published as a
further amended interim final rule in
the Federal Register on March 28, 2005
(70 FR 15557). Comments on the further
amended interim final rule were
solicited from interested persons until
April 25, 2005. No comments were
received. Copies of each of these rules
were mailed by the Committee’s staff to
all committee members, producers,
handlers, and other interested persons.
In addition, each of these rules were
made available through the Internet by
USDA and the Office of the Federal
Register.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
fv/moab.html. Any questions about the
compliance guide should be sent by Jay
Guerber at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
After consideration of all relevant
material presented, including the
Committee’s recommendations, and
other information, it is found that
finalizing the interim final rules,
without change, as published in the
Federal Register (69 FR 61755, October
21, 2004; 70 FR 8712, February 23,
2005; and 70 FR 15557, March 28, 2005)
will tend to effectuate the declared
policy of the Act.
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1439
RIN 0560–AH26
American Indian Livestock Feed
Program; Livestock Assistance
Program
Commodity Credit Corporation,
USDA.
ACTION: Final rule.
AGENCY:
SUMMARY: This regulation sets forth the
terms and conditions of the 2003/2004
American Indian Livestock Feed
Program (AILFP). Assistance will be
available to eligible livestock producers
for livestock feed crop years 2003 or
2004 whose eligible livestock occupied
tribal-governed land at the time of a
natural disaster in an area where a
significant loss of livestock feed has
occurred, creating a livestock feed
emergency, as determined by the
Commodity Credit Corporation (CCC).
Eligible producers can receive benefits
for livestock feed crop year 2003, or
2004, but not both. Eligible tribalgoverned land must be located in a
primary county or counties that have
received an emergency declaration by
the President or emergency designation
by the Secretary of Agriculture on or
after January 1, 2003, for losses
occurring in calendar year 2003, or
calendar year 2004. Although the
Presidential declarations and Secretarial
List of Subjects in 7 CFR Part 985
designations were issued for natural
disasters in those calendar years, tribal
Marketing agreements, Oils and fats,
governments may request an initial 90Reporting and recordkeeping
day feeding period and up to three 90requirements, Spearmint oil.
day extensions that extend from the
beginning of a livestock feed crop year,
PART 985—MARKETING ORDER
to the end of that same livestock feed
REGULATING THE HANDLING OF
crop year. Further, livestock owners
SPEARMINT OIL PRODUCED IN THE
who sold eligible livestock as a direct
FAR WEST
result of natural disaster shall report
those livestock as owned through the
I Accordingly, the interim final rules
end of the production year (livestock
amending 7 CFR part 985 which were
feed crop year) in order to mitigate the
published at 69 FR 61755 on October 21, livestock owner’s losses. This rule is
2004; 70 FR 8712 on February 23, 2005; intended to implement legislation and
and 70 FR 15557 on March 28, 2005, are assist affected producers in overcoming
the effects of drought. In addition, this
adopted as a final rule without change.
rule provides technical revisions for the
Dated: May 20, 2005.
Livestock Assistance Program
Kenneth C. Clayton,
regulations.
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 05–10441 Filed 5–24–05; 8:45 am]
BILLING CODE 3410–02–M
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DATES:
Effective May 24, 2005.
FOR FURTHER INFORMATION CONTACT:
Deborah O’Donoghue, Program
Specialist, Noninsured Assistance
Programs Branch (NAPB), Production,
Emergencies, and Compliance Division
(PECD), Farm Service Agency (FSA),
United States Department of
E:\FR\FM\25MYR1.SGM
25MYR1
]]>Agencies
[Federal Register Volume 70, Number 100 (Wednesday, May 25, 2005)]
[Rules and Regulations]
[Pages 29917-29920]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-10441]
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Federal Register / Vol. 70, No. 100 / Wednesday, May 25, 2005 / Rules
and Regulations
[[Page 29917]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Docket No. FV04-985-2 FIR-A2]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Revision of the Salable Quantity and Allotment
Percentage for Class 3 (Native) Spearmint Oil for the 2004-2005
Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, the provisions of three interim final rules that
increased the quantity of Class 3 (Native) spearmint oil produced in
the Far West that handlers may purchase from, or handle for, producers
during the 2004-2005 marketing year. This rule continues in effect the
actions that increased the Native spearmint oil salable quantity by an
additional 580,024 pounds from 773,474 pounds to 1,353,498 pounds, and
the allotment percentage by an additional 27 percent from 36 percent to
63 percent. The Spearmint Oil Administrative Committee (Committee), the
agency responsible for local administration of the marketing order for
spearmint oil produced in the Far West, unanimously recommended this
rule to avoid extreme fluctuations in supplies and prices and to help
maintain stability in the Far West spearmint oil market.
EFFECTIVE DATE: June 24, 2005.
FOR FURTHER INFORMATION CONTACT: Susan M. Hiller, Northwest Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue, Suite 385,
Portland, Oregon 97204; Telephone: (503) 326-2724, Fax: (503) 326-7440;
or George Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 985, as amended (7 CFR part 985), regulating the handling of
spearmint oil produced in the Far West (Washington, Idaho, Oregon, and
designated parts of Nevada and Utah), hereinafter referred to as the
``order.'' The order is effective under the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter
referred to as the ``Act.''
USDA is issuing this rule in conformance with Executive Order
12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
This rule will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any hanler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
The initial salable quantity and allotment percentages for Scotch
and Native spearmint oils for the 2004-2005 marketing year were
recommended by the Committee at its October 8, 2003, meeting. The
Committee recommended salable quantities of 766,880 pounds and 773,474
pounds, and allotment percentages of 40 percent and 36 percent,
respectively, for Scotch and Native spearmint oils. A proposed rule was
published in the Federal Register on January 23, 2004 (69 FR 3272).
Comments on the proposed rule were solicited from interested persons
until February 23, 2004. No comments were received. Subsequently, a
final rule establishing the salable quantities and allotment
percentages for Scotch and Native spearmint oils for the 2004-2005
marketing year was published in the Federal Register on March 22, 2004
(69 FR 13213).
Pursuant to authority contained in Sec. Sec. 985.50, 985.51, and
985.52 of the order, the Committee has made unanimous Committee
recommendations to increase the quantity of Native spearmint oil that
handlers may purchase from, or handle for, producers during the 2004-
2005 marketing year, which ends on May 31, 2005. The first revision was
published as an interim final rule in the Federal Register on October
21, 2004 (69 FR 61755), which increased the salable quantity from
773,474 pounds to 1,095,689 pounds, and the allotment percentage from
36 percent to 51 percent. The second revision was published as an
amended interim final rule in the Federal Register on February 23, 2005
(70 FR 8712), which further increased the salable quantity by 171,873
pounds to 1,267,562 pounds, and the allotment percentage by 8 percent
to 59 percent. Finally, the third revision was published as a further
amended interim final rule in the Federal Register on March 28, 2005
(70 FR 15557), which further increased the salable quantity an
additional 85,936 pounds to 1,353,498 pounds, and the allotment
percentage an additional 4 percent to 63 percent.
The salable quantity is the total quantity of each class of oil
that handlers may purchase from, or handle for, producers during the
marketing year. The total salable quantity is
[[Page 29918]]
divided by the total industry allotment base to determine an allotment
percentage. Each producer is allotted a share of the salable quantity
by applying the allotment percentage to the producer's individual
allotment base for the applicable class of spearmint oil.
Taking into consideration the following discussion on adjustments
to the Native spearmint oil salable quantity, the 2004-2005 marketing
year salable quantity is increased to 1,353,498 pounds.
The original total industry allotment base for Native spearmint oil
for the 2004-2005 marketing year was established at 2,148,539 pounds
and was revised at the beginning of the 2004-2005 marketing year to
2,148,410 pounds to reflect a 2003-2004 marketing year loss of 129
pounds of base due to non-production of some producers' total annual
allotments. When the revised total allotment base of 2,148,410 pounds
is applied to the originally established allotment percentage of 36
percent, the 2004-2005 marketing year salable quantity of 773,474
pounds was effectively modified to 773,428 pounds.
This final rule adopts the provisions of the three interim final
rules that made additional Native spearmint oil available from the
reserve pool. When applied to each individual producer, the 27 percent
allotment percentage increase allows each producer to take up to an
amount equal to 27 percent of their allotment base from their Native
spearmint oil reserve. This final rule continues in effect the actions
that made an additional 580,024 pounds of Native spearmint oil
available to the market. This figure is less than the salable quantity
increase because not all producers have enough native spearmint oil
left their reserves to take full advantage of this release.
The following table summarizes the Committee recommendation:
Native Spearmint Oil Recommendation
(A) Estimated 2004-2005 Allotment Base--2,148,539 pounds. This is
the estimate that the original 2004-2005 Native spearmint oil salable
quantity and allotment percentage was based on.
(B) Revised 2004-2005 Allotment Base--2,148,410 pounds. This is 129
pounds less than the estimated allotment base of 2,148,539 pounds. This
is less because some producers failed to produce all of their 2003-2004
allotment.
(C) Initial 2004-2005 Allotment Percentage--36 percent. This was
recommended by the Committee on October 8, 2003.
(D) Initial 2004-2005 Salable Quantity--773,474. This figure is 36
percent of 2,148,539 pounds.
(E) Revised 2004-2005 Salable Quantity--773,428 pounds. This figure
reflects the salable quantity initially available after the beginning
of the 2004-2005 marketing year due to the 129 pound reduction in the
industry allotment base to 2,148,410 pounds.
(F) First Revision to the 2004-2005 Salable Quantity and Allotment
Percentage.
(1) Increase in Allotment Percentage--15 percent. The Committee
recommended a 12 percent increase at its September 13, 2004, meeting
and an additional 3 percent increase at its October 6, 2004, meeting,
for a total increase of 15 percent, which was effective on October 21,
2004.
(2) 2004-2005 Allotment Percentage--51 percent. This figure was
derived by adding the first revised increase of 15 percent to the
initial 2004-2005 allotment percentage of 36 percent.
(3) Calculated 2004-2005 Salable Quantity--1,095,689 pounds. This
figure is 51 percent of the revised 2004-2005 allotment base of
2,148,410 pounds.
(4) Computed Increase in the 2004-2005 Salable Quantity--322,262
pounds. This figure is 15 percent of the revised 2004-2005 allotment
base of 2,148,410 pounds.
(G) Second Revision to the 2004-2005 Salable Quantity and Allotment
Percentage.
(1) Increase in Allotment Percentage--8 percent. The Committee
recommended an 8 percent increase at its meeting on January 20, 2005,
which was effective on February 23, 2005.
(2) 2004-2005 Allotment Percentage--59 percent. This figure was
derived by adding the 8 percent to the first revised 2004-2005
allotment percentage of 51 percent.
(3) Calculated 2004-205 Salble Quantity--1,267,562 pounds. This
figure is 59 percent of the revised 2004-2005 allotment base of
2,148,410 pounds.
(4) Computed Increase in the 2004-2005 Salable Quantity--171,873
pounds. This figure is 8 percent of the revised 2004-2005 allotment
base of 2,148,410 pounds.
(H) Third Revision to the 2004-2005 Salable Quantity and Allotment
Percentage.
(1) Increase in Allotment Percentage--4 percent. The Committee
recommended a 4 percent increase at its meeting on February 23, 2005,
which was effective on March 28, 2005.
(2) 2004-2005 Allotment Percentage--63 percent. This figure was
derived by adding the 4 percent to the second revised 2004-2005
allotment percentage of 59 percent.
(3) Calculated 2004-2005 Salable Quantity--1,353,498 pounds. This
figure is 63 percent of the revised 2004-2005 allotment base of
2,148,410 pounds.
(4) Computed Increase in the 2004-2005 Salable Quantity--85,936
pounds. This figure is 4 percent of the revised 2004-2005 allotment
base of 2,148,410 pounds.
In making this recommendation, the Committee considered all
available information on price, supply, and demand. The Committee also
considered reports and other information from handlers and producers in
attendance at the meeting and the report given by the Committee manager
from handlers and producers who were not in attendance. The 2004-2005
marketing year began on June 1, 2004. Handlers have reported purchases
of 1,070,801 pounds of Native spearmint oil for the period of June 1,
2004, through February 15, 2005. This amount exceeds the five-year
average of 899,979 pounds for this period by 170,822 pounds. On
average, handlers indicated that the estimated total demand for the
2004-2005 marketing year could range from a minimum of 1,269,000 pounds
to as much as 1,279,000 pounds. This amount exceeds the five-year
average for an entire marketing year of 973,456 pounds by as little as
295,544 pounds and as much as 305,544 pounds. Therefore, based on past
history, the industry may not be able to meet market demand without
these increases. When the Committee made its initial recommendation for
the establishment of the Native spearmint oil salable quantity and
allotment percentage for the 2004-2005 marketing year, it had
anticipated that the year would end with an ample available supply.
Based on its analysis of available information, USDA has determined
that the salable quantity and allotment percentage for Native spearmint
oil for the 2004-2005 marketing year should be increased by 1,353,498
pounds and 63 percent, respectively.
This rule finalizes three interim final rules that relaxed the
Native spearmint oil volume regulation and allows producers to meet
market needs and improve returns. In conjunction with the issuance of
this rule, the Committee's revised marketing policy statement for the
2004-2005 marketing year has been reviewed by USDA. The Committee's
marketing policy statement, a requirement whenever the Committee
recommends implementing volume regulations or recommends
[[Page 29919]]
revisions to existing volume regulations, meets the intent of Sec.
985.50 of the order. During its discussion of revising the 2004-2005
salable quantities and allotment percentages, the Committee considered:
(1) The estimated quantity of salable oil of each class held by
producers and handlers; (2) the estimated demand for each class of oil;
(3) prospective production of each class of oil; (4) total of allotment
bases of each class of oil for the current marketing year and the
estimated total of allotment bases of each class for the ensuring
marketing year; (5) the quantity of reserve oil, by class, in storage;
(6) producer prices of oil, including prices for each class of oil; and
(7) general market conditions for each class of oil, including whether
the estimated season average price to producers is likely to exceed
parity. Conformity with USDA's ``Guidelines for Fruit, Vegetable, and
Specialty Crop Marketing Orders'' has also been reviewed and confirmed.
The increases in the Native spearmint oil salable quantity and
allotment percentage allow for anticipated market needs for this class
of oil. In determining anticipated market needs, consideration by the
Committee was given to historical sales, and changes and trends in
production and demand.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are currently 8 handlers of spearmint oil who are subject to
regulation under the marketing order and 98 producers of Class 3
(Native) spearmint oil in the regulated area. Small agricultural
service firms are defined by the Small Business Administration (SBA)
(13 CFR 121.201) as those having annual receipts of less than
$6,000,000, and small agricultural producers are defined as those
having annual receipts of less than $750,000.
Based on SBA's definition of small entities, the Committee
estimates that 2 of the 8 handlers regulated by the order could be
considered small entities. Most of the handlers are large corporations
involved in the international trading of essential oils and the
products of essential oils. In addition, the Committee estimates that
15 of the 98 Native spearmint oil producers could be classified as
small entities under the SBA definition. Thus, a majority of handlers
and producers of Far West spearmint oil may not be classified as small
entities.
The Far West spearmint oil industry is characterized by producers
whose farming operations generally involve more than one commodity, and
whose income from farming operations is not exclusively dependent on
the production of spearmint oil. A typical spearmint oil-producing
operation has enough acreage for rotation such that the total acreage
required to produce the crop is about one-third spearmint and two-
thirds rotational crops. Thus, the typical spearmint oil producer has
to have considerably more acreage than is planted to spearmint during
any given season. Crop rotation is an essential cultural practice in
the production of spearmint oil for weed, insect, and disease control.
To remain economically viable with the added costs associated with
spearmint oil production, most spearmint oil-producing farms fall into
the SBA category of large businesses.
Small spearmint oil producers generally are not as extensively
diversified as larger ones and as such are more at risk to market
fluctuations. Such small producers generally need to market their
entire annual crop and do not have the luxury of having other crops to
cushion seasons with poor spearmint oil returns. Conversely, large
diversified producers have the potential to endure one or more seasons
of poor spearmint oil markets because income from alternate crops could
support the operation for a period of time. Being reasonably assured of
a stable price and market provides small producing entities with the
ability to maintain proper cash flow and to meet annual expenses. Thus,
the market and price stability provided by the order potentially
benefit the small producer more than such provisions benefit large
producers. Even though a majority of handlers and producers of
spearmint oil may not be classified as small entities, the volume
control feature of this order has small entity orientation.
This final rule adopts, without change, the provisions of the
interim final rules published in the Federal Register on October 21,
2004 (69 FR 61755) and amended on February 23, 2005 (70 FR 8712) and
March 23, 2005 (70 FR 15557). Specifically, the rule published on
October 21, 2004, increased the salable quantity from 773,474 pounds to
1,095,689 pounds, and the allotment percentage from 36 percent to 51
percent for Native spearmint oil for the 2004-2005 marketing year. The
rule that subsequently amended the interim final rule was published on
February 23, 2005, and increased the salable quantity an additional
171,873 pounds to 1,267,562 pounds, and the allotment percentage an
additional 8 percent to 59 percent. Finally, the rule published on
March 28, 2005, increased the salable quantity an additional 85,936
pounds to 1,353,498 pounds, and the allotment percentage an additional
4 percent to 63 percent. This rule finalizes three interim final rules
that relaxed the Native spearmint oil volume regulations and allows
producers to meet market needs and improve returns.
An econometric model was used to assess the impact that volume
control has on the prices producers receive for their commodity.
Without volume control, spearmint oil markets would likely be over-
supplied, resulting in low producer prices and a large volume of oil
stored and carried over to the next crop year. The model estimates how
much lower producer prices would likely be in the absence of volume
controls.
The recommended salable percentages, upon which 2004-2005 producer
allotments are based, are 40 percent for Scotch and 63 percent for
Native (a 27 percentage point increase from the original salable
percentage of 36 percent). Without volume controls, producers would not
be limited to these allotment levels, and could produce and sell
additional spearmint. The econometric model estimated a $1.30 per pound
decline in the season average producer price (for both classes of
spearmint oil) resulting from the higher quantities that would be
produced and marketed if volume controls were not used (i.e., if the
salable percentages were set at 100 percent). A previous price decline
estimate of $1.71 per pound was based on the 2004-2005 salable
percentages (40 percent for Scotch and 36 percent for Native) published
in the Federal Register on March 22, 2004 (69 FR 13213).
The 2003 Far West producer price for both classes of spearmint oil
was $9.50 per pound, which is below the average of $11.33 for the
period of 1980 through 2002, based on National Agricultural Statistics
Service data. The surplus situation for the spearmint oil market that
would exist without volume controls in 2004-2005 also would likely
dampen prospects for improved
[[Page 29920]]
producer prices in future years because of the buildup in stocks.
The use of volume controls allows the industry to fully supply
spearmint oil markets while avoiding the negative consequences of over-
supplying these markets. The use of volume controls is believed to have
little or no effect on consumer prices of products containing spearmint
oil and will not result in fewer retail sales of such products.
Based on projections available at the meetings, the Committee
considered alternatives to each of the increases finalized herein. The
Committee not only considered leaving the Native spearmint oil salable
quantity and allotment percentage unchanged, but also looked at various
increases. The Committee reached each of its recommendations to
increase the salable quantity and allotment percentage for Native
spearmint oil after careful consideration of all available information,
and believes that the level now reached will achieve the objectives
sought. Without the three increases, the Committee believes the
industry would not have been able to meet market needs.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large spearmint oil handlers. As with
all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. In addition, USDA
has not identified any relevant Federal rules that duplicate, overlap
or conflict with this rule.
Further, the Committee meetings were widely publicized throughout
the spearmint oil industry and all interested persons were invited to
attend the meetings and participate in Committee deliberations. Like
all Committee meetings, the September 13, 2004, October 6, 2004,
January 20, 2005, and the February 23, 2005, meetings were public
meetings and all entities, both large and small, were able to express
their views on each of the recommended increases in the 2004-2005
Native spearmint oil salable quantity and allotment percentage.
The first revision was published as an interim final rule in the
Federal Register on October 21, 2004 (69 FR 61755). Comments on the
interim final rule were solicited from interested persons until
December 20, 2004. No comments were received. The second revision was
published as an amended interim final rule in the Federal Register on
February 23, 2005 (70 FR 8712). Comments on the amended interim final
rule were solicited from interested persons until April 25, 2005. No
comments were received. Finally, the third revision was published as a
further amended interim final rule in the Federal Register on March 28,
2005 (70 FR 15557). Comments on the further amended interim final rule
were solicited from interested persons until April 25, 2005. No
comments were received. Copies of each of these rules were mailed by
the Committee's staff to all committee members, producers, handlers,
and other interested persons. In addition, each of these rules were
made available through the Internet by USDA and the Office of the
Federal Register.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent by Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the Committee's recommendations, and other information, it is found
that finalizing the interim final rules, without change, as published
in the Federal Register (69 FR 61755, October 21, 2004; 70 FR 8712,
February 23, 2005; and 70 FR 15557, March 28, 2005) will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements, Spearmint oil.
PART 985--MARKETING ORDER REGULATING THE HANDLING OF SPEARMINT OIL
PRODUCED IN THE FAR WEST
0
Accordingly, the interim final rules amending 7 CFR part 985 which were
published at 69 FR 61755 on October 21, 2004; 70 FR 8712 on February
23, 2005; and 70 FR 15557 on March 28, 2005, are adopted as a final
rule without change.
Dated: May 20, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-10441 Filed 5-24-05; 8:45 am]
BILLING CODE 3410-02-M
