Warehouse Charges and Delivery Obligations for Peanuts Forfeited to the Commodity Credit Corporation Through the Marketing Assistance Loan Program, 35860 [E6-9836]

Agencies

• DEPARTMENT OF AGRICULTURE
• Commodity Credit Corporation

[Federal Register Volume 71, Number 120 (Thursday, June 22, 2006)]
[Notices]
[Page 35860]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-9836]


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Federal Register / Vol. 71, No. 120 / Thursday, June 22, 2006 / 
Notices

[[Page 35860]]



DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation


Warehouse Charges and Delivery Obligations for Peanuts Forfeited 
to the Commodity Credit Corporation Through the Marketing Assistance 
Loan Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Notice.

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SUMMARY: This notice advises warehouse operators operating under a 
Commodity Credit Corporation (CCC) Peanut Storage Agreement of 
provisions that may not be altered, even through changes made to the 
public tariff of the warehouse. When CCC transfers title to CCC-owned 
peanuts in store (i.e., to a third-party buyer), the storage and 
handling rates applicable to CCC must remain applicable to the 
transferee under the terms of the Peanut Storage Agreement. Also, 
warehouse operators must load out, or transfer instore, the total loan 
value of the peanuts represented on the warehouse receipt, calculated 
by using USDA's Price Table File for the applicable crop year. This 
value is not subject to a subsequent shrink factor. The delivery 
obligation created by issuing the warehouse receipt may not be altered 
for any reason or by any method, including public tariffs.

DATES: Effective Date: June 22, 2006.

FOR FURTHER INFORMATION CONTACT: Mark Overbo, Deputy Director, 
Warehouse and Inventory Division, Farm Service Agency, USDA, STOP 0553, 
1400 Independence Avenue, SW., Washington, DC 20250-0553. Telephone: 
(202) 720-4647. E-mail: mark.overbo@usda.gov. Persons with disabilities 
who require alternative means for communication (Braille, large print, 
audiotape, etc.) should contact the USDA Target Center at (202) 720-
2600 (voice and TDD).

SUPPLEMENTARY INFORMATION: CCC incurred forfeitures on the 2004 crop of 
peanuts. A portion of the CCC-owned peanuts were sold to third-party 
buyers. During routine warehouse examinations, examiners received from 
several warehouse operators questions relating to: Storage and handling 
rates applicable to peanuts after title is transferred from CCC; and 
the delivery obligation of the warehouse operator with respect to 
issues of shrinkage.
    The CCC Peanut Storage Agreement, Part 2, General Terms, Item D(2), 
provides ``If CCC transfers title to CCC-owned peanuts in store, the 
storage and handling rates contained in the Schedule of Rates will 
apply to the peanuts until loaded out, provided the transferee, in 
writing, orders the peanuts loaded out for immediate shipment within 30 
days after the date title is transferred. If the transferee does not 
request, in writing, load out within 30 days after the date title is 
transferred, the storage and handling rates applicable to the 
transferee for the peanuts shall not exceed CCC's Schedule of Rates in 
effect at the time of title transfer until the earlier of: (a) 60 days, 
or (b) title to the peanuts is transferred by the transferee to another 
party, or (c) the transferee loads the peanuts out of the warehouse.'' 
Under this provision, it is permissible for warehouse operators to 
charge rates in excess of the CCC rates after the end of this specified 
date if the rates were included in the public tariff at the time the 
warehouse receipt was issued.
    Under the CCC marketing assistance loan program, in perfecting its 
security interest in peanuts pledged as collateral for such a loan, CCC 
will only accept warehouse receipts that meet the regulations set forth 
in 7 CFR part 1421. Under these regulations and under the U.S. 
Warehouse Act, the warehouse operator must specify on the receipt: Net 
pounds; loose-shelled kernels (LSK) pounds; and the total value of the 
peanuts based on a USDA price table file (loan rate data). The 
warehouse operator must also indicate on the warehouse receipt that: 
``The warehouse operator's obligation shall be to deliver this total 
value upon demand'', and ``Return of peanuts will be both net pounds 
and LSK pounds. Both have been reduced for a shrink factor.'' Warehouse 
operators are advised that changes to the public tariff to include a 
shrink factor for peanuts does not in any way alter their delivery 
obligation created by issuing the warehouse receipt. In order for 
warehouse operators to compensate for shrinkage, any shrink factors 
must be applied before issuing the warehouse receipt.
    Instructions for the issuance of negotiable warehouse receipts may 
be found on the Commodity Operations Web site at https://
www.fsa.usda.gov/daco/peanuts.htm. Any questions about this notice may 
be directed to Mark Overbo by calling (202) 720-4647 or e-mail 
mark.overbo@usda.gov.

    Signed at Washington, DC, June 9, 2006.
Glen L. Keppy,
Acting Executive Vice President, Commodity Credit Corporation.
 [FR Doc. E6-9836 Filed 6-21-06; 8:45 am]
BILLING CODE 3410-05-P