Livestock Mandatory Reporting; Reestablishment and Revision of the Reporting Regulation for Swine, Cattle, Lamb, and Boxed Beef, 44672-44722 [07-3857]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 72, Number 152 (Wednesday, August 8, 2007)]
[Proposed Rules]
[Pages 44672-44722]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-3857]



[[Page 44671]]

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Part IV





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 59



Livestock Mandatory Reporting; Reestablishment and Revision of the 
Reporting Regulation for Swine, Cattle, Lamb, and Boxed Beef; Proposed 
Rule

Federal Register / Vol. 72, No. 152 / Wednesday, August 8, 2007 / 
Proposed Rules

[[Page 44672]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 59

[Docket No. AMS-LS-07-0106; LS-07-01]
RIN 0581-AC67


Livestock Mandatory Reporting; Reestablishment and Revision of 
the Reporting Regulation for Swine, Cattle, Lamb, and Boxed Beef

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: On April 2, 2001, the Agricultural Marketing Service (AMS) 
implemented the Livestock Mandatory Reporting (LMR) program as required 
by the Livestock Mandatory Reporting Act of 1999 (1999 Act). The 
statutory authority for the program lapsed on September 30, 2005. In 
October 2006, legislation was enacted to reauthorize the 1999 Act until 
September 30, 2010, and to amend the swine reporting requirements of 
the 1999 Act (Pub. L. 109-296) (Reauthorization Act). This rulemaking 
is necessary to re-establish the regulatory authority for the program's 
continued operation and incorporate the swine reporting changes 
contained within the Reauthorization Act as well as make other changes 
to enhance the program's overall effectiveness and efficiency based on 
AMS' experience in the administration of the program over the last 6 
years.

DATES: Written comments on the regulatory provisions of this proposed 
rule must be received on or before September 7, 2007 to be assured of 
consideration. Written comments on the information collection and 
recordkeeping provisions of this proposed rule must be received on or 
before October 9, 2007 to be assured of consideration.

ADDRESSES: Comments can be submitted on the Internet at: https://
www.regulations.gov. Written comments can be sent to Warren P. Preston, 
Chief, Livestock and Grain Market News Branch, Docket No. LS-07-01, 
1400 Independence Ave., SW., Room 2619-S, Washington, DC 20250-0252, or 
by facsimile to (202) 690-3732. All comments received will be posted to 
the Web site at: https://www.regulations.gov. Comments that specifically 
pertain to the information collection and recordkeeping requirements of 
this action should also be sent to the Desk Officer for Agriculture, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, New Executive Office Building, 725 17th Street, NW., Room 725, 
Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Warren P. Preston, Chief, Livestock 
and Grain Market News Branch at (202) 720-6231, fax (202) 690-3732, or 
e-mail Warren.Preston@usda.gov.

SUPPLEMENTARY INFORMATION:

Background

    The 1999 Act was enacted into law on October 22, 1999, (Pub. L. 
106-78) as an amendment to the Agriculture Marketing Act of 1946 (7 
U.S.C. 1621 et seq.). In the December 1, 2000, Federal Register, AMS 
published a final rule implementing the program (65 FR 75464) (2000 
final rule) with an effective date of January 30, 2001. This effective 
date was subsequently delayed until April 2, 2001.
    The statutory authority for the program lapsed on September 30, 
2005. In October 2006, legislation was passed to reauthorize the 1999 
Act until September 30, 2010, and amend swine reporting requirements.
    Because reauthorization was not completed by September 30, 2005, 
AMS sent letters to each packer required to report under the 1999 Act 
requesting their voluntary cooperation in continuing to submit 
information. Based on the response to AMS's request for voluntary 
packer participation in LMR, most reports have continued to be 
published. The only reports that are not being published are imported 
boxed lamb cuts and slaughter cow reports. AMS has continued compliance 
audits during the lapse in authority for the mandatory program for 
companies that agreed to continue submitting information and will 
continue this practice until the effective date of this regulatory 
action.
    The 1999 Act as originally passed provided for the mandatory 
reporting of market information by Federally inspected livestock 
processing plants that have slaughtered an average number of livestock 
during the immediately preceding 5 calendar years (125,000 for cattle 
and 100,000 for swine), including any processing plant that did not 
slaughter during the immediately preceding 5 calendar years if the 
Secretary determines that the plant should be considered a packer based 
on the plant's capacity. For entities that did not slaughter during the 
immediately preceding 5 calendar years, such as a new plant or existing 
plant that begins operations, AMS projects the plant's annual slaughter 
or production based upon the plant's estimate of annual slaughter 
capacity to determine which entities meet the definition of a packer as 
defined in this regulation.
    The 1999 Act also gave the Secretary of Agriculture (Secretary) the 
latitude to provide for the reporting of lamb information. Under the 
2000 final rule implementing the program, Federally inspected lamb 
processing plants that slaughtered an average of 75,000 head of lambs 
or processed an average of 75,000 lamb carcasses during the immediately 
preceding 5 calendar years were required to submit information to AMS. 
Additionally, a lamb processing plant that did not slaughter an average 
of 75,000 lambs or process an average of 75,000 lamb carcasses during 
the immediately preceding 5 calendar years was required to report 
information if the Secretary determined the processing plant should be 
considered a packer based on its capacity. In addition, the final rule 
also established that for any calendar year, an importer of lamb that 
imported an average of 5,000 metric tons of lamb meat products per year 
during the immediately preceding 5 calendar years report information on 
the domestic sales of imported boxed lamb cuts. Additionally, an 
importer that did not import an average of 5,000 metric tons of lamb 
meat products during the immediately preceding 5 calendar years was 
required to report information if the Secretary determined that the 
person should be considered an importer based on their volume of lamb 
imports. On September 2, 2004, AMS published a final rule (69 FR 53783) 
(2004 final rule) that revised the threshold for importers to 2,500 
metric tons and modified the definition of carlot when used in 
reference to boxed lamb cuts.

Key Components of the Statute

Cattle

    The Reauthorization Act did not modify the cattle reporting 
requirements contained in the 1999 Act. The 1999 Act requires that a 
cattle packer whose Federally inspected plant slaughtered an average of 
at least 125,000 cattle per year for the preceding 5 calendar years or 
did not slaughter cattle during the preceding 5 calendar years but is 
considered a packer based on plant capacity as determined by the 
Secretary, report market information to the Secretary. They are 
required to report the prices for each type of cattle purchase, 
categorized to clearly delineate imported from domestic market 
purchases, negotiated purchase, formula marketing arrangement, and 
forward contract; the quantity of cattle, categorized to clearly 
delineate imported from domestic market purchases, purchased on a live 
weight

[[Page 44673]]

basis and a carcass basis; and the weight, the quality grade, and 
premiums and discounts. This information would be reported twice a day 
not later than 10 a.m. and 2 p.m. central time. The Secretary would 
issue reports to the public of this information at least three times 
each day.
    The 1999 Act further requires that a packer report marketing 
information not later than 9 a.m. central time on the first reporting 
day of each week for cattle bought by the type of purchase for the 
prior week. In addition, the 1999 Act states that packers must report 
weekly information on the first reporting day not later than 9 a.m. 
central time for cattle purchased on a formula or contract marketing 
arrangement and slaughtered the prior week. However, under this 
proposed regulation, the required information for the weekly submission 
for cattle purchased on a formula would be obtained by aggregating 
packers' daily submissions of this information. Therefore, no 
additional weekly submission would be required for this purchase type. 
The Secretary would issue a public report not later than 10 a.m. 
central time on the first reporting day of the current slaughter week.
    The 1999 Act also mandates that a packer report information on 
boxed beef cut sales to the Secretary at least twice each reporting day 
not less frequently than once before and once after 12 noon central 
time. This information includes the price per hundredweight, the 
quantity in each lot of boxed beef cuts sold, information regarding the 
characteristics of each lot (i.e., domestic vs. export sale, USDA 
Quality Grade, etc.), the type of beef cut and the trim specification. 
The Secretary would report this information to the public twice each 
reporting day.

Swine

    The Reauthorization Act revised the requirements for swine 
reporting. Under the 1999 Act, the term packer includes a Federally 
inspected plant that slaughtered an average of at least 100,000 swine 
per year during the immediately preceding 5 calendar years. Under the 
Reauthorization Act, the term packer also includes a person that 
slaughtered an average of at least 200,000 sows, boars, or combination 
thereof per year during the immediately preceding 5 calendar years. 
Additionally, in the case of a swine processing plant or person that 
did not slaughter swine during the immediately preceding 5 calendar 
years, it shall be considered a packer if the Secretary determines the 
processing plant or person should be considered a packer under this 
subpart after considering its capacity.
    The Reauthorization Act separated the reporting requirements for 
sows and boars from barrows and gilts. For barrows and gilts, the 
packer must report to the Secretary not later than 7 a.m. central time 
on each reporting day information regarding all swine purchased or 
priced, during the prior business day of the packer. The 
Reauthorization Act modified the reporting time for information 
regarding all barrows and gilts slaughtered during the prior business 
day from not later than 7 a.m. central time to not later than 9 a.m. 
central time on each reporting day. The packer must report all purchase 
data including the number of barrows and gilts purchased, barrows and 
gilts scheduled for delivery and the base price and purchase data for 
slaughtered barrows and gilts for which a price has been established. 
The information also includes all slaughter data for the total number 
of barrows and gilts slaughtered including information concerning the 
net price, average net price, lowest net price, highest net price, 
average carcass weight, average sort loss, average backfat, average 
lean percentage, and total slaughter quantity. However, the information 
on the lowest net price and highest net price can be obtained from the 
LMR system from packers' submissions. Therefore, under this proposed 
rule, there is no requirement for packers to submit this information 
separately. Packers reporting the average lean percentage must report 
the manner in which the average lean percentage is calculated as well 
as whenever a change in such calculation is made. In doing so, the 
packer shall make available to the Secretary the underlying data, 
applicable methodology and formulae, and supporting materials used to 
determine the average lean percentage, which the Secretary will convert 
to the carcass measurements or lean percentage of the swine of the 
individual packer to correlate to a common percent lean measurement. 
Additionally, the information to be reported includes packer purchase 
commitments, which shall be equal to the number of barrows and gilts 
scheduled for delivery to a packer for slaughter each of the next 14 
calendar days.
    The Secretary would publish the information in a prior day report 
not later than 8 a.m. central time for all swine purchased and 10 a.m. 
central time for all barrows and gilts slaughtered on the reporting day 
on which the information is received from the packer. In addition, as 
required by the Reauthorization Act, the Secretary shall publish a net 
price distribution for all barrows and gilts slaughtered on the 
previous day not later than 3 p.m. central time.
    The Reauthorization Act also requires packers that process barrows 
and gilts to report to the Secretary in the morning not later than 10 
a.m. central time and in the afternoon not later than 2 p.m. central 
time each reporting day. The reporting requirements for the morning and 
afternoon reports contained in the Reauthorization Act for barrows and 
gilts were not altered from those contained in the 1999 Act. The 
information to be reported is the same for the morning and afternoon 
reports and includes an estimate of (1) the total number of barrows and 
gilts purchased by each method of pricing, (2) the total number of 
barrows and gilts purchased, and (3) the base price paid for all 
negotiated purchases of market hogs and the base price paid for each 
type of purchase of market hogs other than through a negotiated 
purchase. This information must be submitted for all covered 
transactions made up to within one half hour of each specified 
reporting time. Packers completing transactions during the one half 
hour prior to the previous reporting time will report those 
transactions at the next prescribed reporting time. The Secretary will 
make the morning report available to the public not later than 11 a.m. 
central time and the afternoon report at 3 p.m. central time on each 
reporting day.
    The Reauthorization Act requires each packer of sows and boars to 
report to the Secretary not later than 9:30 a.m. central time, or such 
other time as the Secretary considers appropriate, on each reporting 
day, information regarding all sows and boars purchased or priced 
during the prior business day of the packer. The information to be 
reported includes the total number of sows and boars purchased, each 
divided into at least three weight classes specified by the Secretary, 
the number of sows and boars that qualify as packer-owned swine, the 
average price paid for all sows and boars, the average price paid for 
sows and boars in each weight class, the number of sows and boars for 
which prices are determined, by each type of purchase, and the average 
prices for sows and boars for which prices are determined, by each type 
of purchase. The Secretary would publish the information in a prior day 
report not later than 11 a.m. central time on the reporting day on 
which the information is received from the packer. Under the 1999 Act, 
the reporting requirements for sows and boars were the same as the

[[Page 44674]]

reporting requirements for barrows and gilts.
    The Secretary will compile and issue a weekly noncarcass merit 
premium report on the first reporting day of the week not later than 5 
p.m. central time. This report would be prepared from information 
furnished to the Secretary by packers who must report not later than 4 
p.m. central time on the first reporting day of the week. The 
information required includes noncarcass merit premiums used and paid 
to producers during the prior slaughter week by category.
    The 1999 Act provides that the Secretary review the information 
required to be reported by packers at least once every two years. Also, 
the 1999 Act directs the Secretary to promulgate regulations that 
specify additional information to be reported by packers if the 
Secretary determines information currently reported does not accurately 
reflect the methods by which swine are valued or priced, or account for 
the fact that packers that slaughter a significant majority of the 
swine produced in the United States no longer use backfat or lean 
percentage factors as indicators of price.

Lamb

    The Reauthorization Act did not change the lamb reporting 
provisions contained in the 1999 Act. The 1999 Act gives the Secretary 
the authority to establish a mandatory lamb price reporting program 
that will provide timely, accurate, and reliable market information. It 
does not specify the requirements for establishing a mandatory lamb 
price reporting program as it does for cattle and swine. Accordingly, 
in the 2000 final rule, AMS established a mandatory lamb price 
reporting program based upon its extensive knowledge of the lamb 
industry and market news reporting of lamb.
    Under the established program, a lamb packer whose Federally 
inspected plant slaughtered or processed an average of at least the 
equivalent of 75,000 lambs each year for the preceding 5 calendar years 
reports to the Secretary once daily the price of each type of lamb 
purchase, negotiated purchase, formula marketing arrangements, forward 
contract, quantity of lamb purchased on live weight or carcass weight, 
a range and average estimated live weights, quality grade, premiums and 
discounts, class type, pelt type, state of origin, and estimated 
dressing percentage. The Secretary issues a report to the public on 
this information not less than once each day.
    Lamb packers are required to report to the Secretary on a weekly 
basis on the second reporting day of the week information from the 
prior week. This information includes the quantity and certain carcass 
characteristics of lambs purchased through a formula marketing 
arrangement or forward contract that were slaughtered, and the quantity 
and carcass characteristics of packer owned lamb that were slaughtered. 
Reported information includes, by type of purchase, the quantity of 
lamb purchased on live weight and carcass weight basis that were 
slaughtered, the quality grade, premiums and discounts paid, and 
dressing percentage. In addition, a lamb packer is required to report 
the quantity and basis level for forward contracts, the range and 
average of intended premiums and discounts, and the expected slaughter 
date. Under this proposed rule, packers would also be required to 
report information on the quantity of lambs purchased on a negotiated 
basis.
    The Secretary makes available to the public the information on the 
second reporting day of the current slaughter week.
    Packers report information on daily sales of carcass lamb and sales 
of boxed lamb cuts each reporting day. Under this proposed rule, 
packers would also be required to report carcass purchases. Due to the 
changing structure of the lamb industry, an increasing number of 
transactions are not required to be reported under the existing 
regulation. Requiring packers to also report their carcass purchases 
would greatly increase the volume of covered transactions.
    For sales and purchases of carcass lamb, the information includes 
prices for each lot, the type of sale, the quantity of each sale quoted 
in number of carcasses, the USDA grade, the estimated weight range, and 
delivery date. For sales of boxed lamb cuts, the packer reports the 
price for each lot, the quantity for each lot quoted by product weight, 
the type of sale, branded product characteristics, if applicable, the 
USDA quality and yield grade, the cut of lamb, the product state of 
refrigeration, the weight range of each cut, and the delivery period. 
The Secretary issues to the public a report on carcass lamb sales and 
boxed lamb cut sales once each reporting day.
    For any calendar year, a lamb importer who imports an average of 
2,500 metric tons of lamb meat products per year during the immediately 
preceding 5 calendar years reports to the Secretary weekly the prices 
received for imported lamb cuts sold on the domestic market. 
Additionally, an importer that does not import an average of 2,500 
metric tons of lamb meat products during the immediately preceding 5 
calendar years is also required to report the above information, if the 
Secretary determines that the person should be considered an importer 
based on their volume of lamb imports.

Other Provisions of the Act Involving Administration

    The administrative provisions of the 1999 Act set forth the 
requirements for maintaining confidentiality regarding the packer 
reporting of proprietary information and list the conditions under 
which Federal employees can release such information. These 
administrative provisions also establish that the Secretary can make 
necessary adjustments in the information reported by packers and take 
action to verify the information reported, and directs the Secretary to 
report and publish reports by electronic means to the maximum extent 
practical. The 1999 Act provides for what constitutes violations of 
that Act, such as failure to report the required information on time or 
failure to report accurate information. The Reauthorization Act did not 
change any of these provisions.
    The section on enforcement establishes a civil penalty--$10,000--
for each violation and provides for the Secretary's issuance of cease 
and desist orders. This section also provides for notice and hearing of 
violations before the Secretary, judicial review, issuance of an 
injunction or restraining order, and establishes a civil penalty for 
failure to obey a cease and desist order.
    The fees section directs the Secretary to not charge or assess fees 
for the submission, reporting, receipt, availability, or access to 
published reports or information collected through this program.
    The section on recordkeeping requires each packer to make available 
to the Secretary on request for 2 years the original contracts, 
agreements, receipts, and other records associated with any transaction 
relating to the purchase, sale, pricing, transportation, delivery, 
weighing, slaughter, or carcass characteristics of all livestock and 
livestock products, as well as such records or other information that 
is necessary or appropriate to verify the accuracy of information 
required to be reported. Also, the 1999 Act provides that reporting 
entities will not be required to report new or additional information 
that they do not generally have available or maintain, or the 
provisions of which would be unduly burdensome.

[[Page 44675]]

    Further, the 1999 Act provides that the Secretary may suspend any 
requirement if the Secretary determines that the application of the 
requirement would be inconsistent with the Act.

Proposed Requirements

Summary of Changes

    The requirements of this proposed regulation are discussed in 
detail in the sections immediately following. However, for the ease of 
the reader, this section contains descriptions and rationale of the 
substantive changes that have been made as compared to the December 1, 
2000, and September 2, 2004, (that modified reporting requirements for 
lamb) final rules that were published in the Federal Register.

Recordkeeping

    To reduce the recordkeeping burden on lamb importers, the Agency is 
proposing to modify the recordkeeping requirement to allow lamb 
importers to maintain a record of sale that evidences only the date the 
sale occurred rather than the time and date. Because lamb importers are 
required to report only weekly, the date the sale occurred is 
sufficient for recordkeeping purposes.

Definitions

    The Agency is proposing to modify the definition of the term 
``discount'' by adding ``or other characteristic'' to allow for the 
inclusion of other types of discounts such as a discount for an 
animal's age, which is currently utilized by several reporting packers.
    The Agency is also proposing to modify the definitions of the terms 
``negotiated purchased'' and ``negotiated sale'' by removing the 
language ``and agreement on a delivery day.'' Under the current 
program, a transaction is not required to be reported if the specific 
delivery day is not known. Deleting this language would provide for 
more timely price reporting if the only piece of information not known 
is the delivery day.
    The Agency is proposing to add a definition for the term 
``negotiated grid purchase.'' When the LMR program was first 
implemented on April 2, 2001, negotiated grid purchases, purchases in 
which the base price is determined by seller-buyer interaction from 
which premiums are added and discounts are subtracted, were coded in 
packer submissions as formulas, as the system was not initially 
configured to allow these two distinct transaction types to be coded 
separately. The Agency subsequently made a programming change to 
rectify this problem and is proposing this definition for clarity.
    The Agency is proposing to add a definition for the term ``percent 
lean'' for clarification with respect to cow and bull reporting 
requirements. The Agency is also proposing to add a definition for the 
term ``person'' for clarity.

Cattle Reporting

    The majority of the changes that are being proposed with respect to 
cattle reporting relate to the separation of the reporting requirements 
for cows and bulls. Separation of the reporting requirements for cows 
and bulls is being proposed to minimize the reporting burden on cow and 
bull packers where possible and to make the information published for 
cows and bulls and the resulting meat products more meaningful to the 
industry.
    The Agency is proposing to modify the definition of the term 
``boxed beef'' to remove references to age limitations on products and 
to require packers to report transactions for frozen primals, 
subprimals, and cuts in addition to the current requirement for packers 
to submit information on frozen beef trimmings and boneless processing 
beef. Neither the 1999 Act nor the Reauthorization Act defines the term 
``boxed beef.'' Hence the term must be defined by regulation. These 
proposed modifications to the definition would provide for more 
complete reporting of the boxed beef trade, consistent with the law's 
purpose of improving the price and supply reporting conditions of USDA. 
Although the revised definition of ``boxed beef'' potentially would 
result in the reporting of more transactions by packers to AMS, the 
Agency believes that there would be little to practically no increase 
in the reporting burden to packers. The cost to packers of reporting 
all trades versus sorting out trades beyond certain parameters is 
minimal, and in many cases, may even be less burdensome than sorting 
out transactions prior to submission to AMS.
    In the 2000 final rule, the definition of ``boxed beef'' specified 
that the product not exceed one of three different dates from 
manufacture, depending on the specific item in question. For example, 
primals, subprimals, and cuts fabricated from subprimals were not to be 
older than 14 days from the date of manufacture, while fresh ground 
beef, beef trimmings, and boneless processing beef were not to be older 
than 7 days from the date of manufacture. By removing references to 
these different cutoff dates, there would be less confusion in terms of 
what information reporting packers are required to submit, and hence, 
less uncertainty regarding the information that is subsequently 
reported and disseminated by AMS. In addition, new technologies in 
packaging and processing continue to extend the shelf life of meat 
products, and product that may have been considered aged or distressed 
at the time of the 2000 final rule may now be well within its usable 
shelf life. Removing references to product age in the definition of 
``boxed beef'' would reflect such changes in the state of the industry.
    The 2000 final rule defined ``boxed beef'' to include fresh 
primals, subprimals, cuts fabricated from subprimals, ground beef, beef 
trimmings, and boneless processing beef. The definition also included 
frozen beef trimmings and boneless processing beef. By removing the 
references to fresh or frozen product, the proposed rule would reduce 
confusion on the part of reporting packers regarding whether or not to 
submit information on particular trades. AMS believes that this 
modification of the definition of ``boxed beef'' would result in 
minimal to virtually no increase in burden to reporting packers. In the 
case of frozen products, numerous reporting packers already submit 
information on all frozen products. Due to the nature of their 
electronic systems, it is in many cases often less burdensome for 
packers to submit everything rather than having to sort through 
eligible transactions. AMS believes that reporting of trade in frozen 
products would provide a more accurate and comprehensive picture of the 
market for boxed beef, consistent with the purposes of the 1999 Act to 
improve the price and supply reporting services of USDA. For instance, 
trading of frozen product picked up with the reopening of foreign 
markets following the closures that resulted from the discovery of a 
cow with bovine spongiform encephalopathy in the United States in 
December 2003. Because a majority of packers are reporting frozen boxed 
beef trades, AMS has been able to show the number of frozen export 
loads in its comprehensive boxed beef cutout report. Requiring all 
packers to submit information on frozen product trades would ensure 
that such reporting would represent a more complete reflection of 
market conditions.
    Comments are invited on the proposed modifications to the 
definition of ``boxed beef'' with respect to removing references to the 
age of the product and whether it is fresh or frozen. In particular, 
comments are invited on the potential utility of obtaining information 
on trades that would be excluded under the definition

[[Page 44676]]

of ``boxed beef'' in the 2000 final rule and on the change in reporting 
burden to packers. In any case, the Agency notes that it will accept 
all data submitted if reporting entities find that it is less 
burdensome to do so, provided that sufficient information is submitted 
to allow AMS to sort the information according to definitions in the 
final rule.
    The Agency is proposing to modify the definition of the term 
``carlot-based'' such that for cow and bull boxed beef items, the term 
``carlot-based'' would include any transaction between a buyer and 
seller consisting of 5,000 pounds or more of one or more individual 
items. This modification reflects current industry practice with 
respect to the marketing of cow and bull products.
    The Agency is proposing to modify the definition of the term 
``terms of trade'' to clarify that the requirement to report the terms 
of trade applies only to steers and heifers to coincide with the 
proposed separation of reporting requirements for cows and bulls from 
steers and heifers. The definition of ``terms of trade'' has also been 
modified to require packers to distinguish between negotiated 
transactions that are scheduled for delivery not later than 14 days and 
those negotiated transactions that are scheduled for delivery more than 
14 days, but fewer than 30 days. Under current guidance provided by 
AMS, transactions that are for delivery more than 14 days out are to be 
coded as forward contracts. This proposed modification would not 
require packers to submit additional transactions, but it would allow 
AMS to separately identify these types of transactions, which is a 
concern of some in the industry.
    The Agency is proposing to modify the definition of the term ``type 
of purchase'' to include ``negotiated grid purchase'' as a type of 
purchase.
    The Agency is proposing to add a definition for the term ``white 
cow'' to provide clarity to the cow and bull reporting requirements.
    The Agency has modified and renumbered the sections that relate to 
the daily and weekly reporting requirements for live cattle. Section 
59.101 and section 59.103 contain the daily and weekly reporting 
requirements for steers and heifers. Section 59.102 contains the daily 
reporting requirements for cows and bulls.
    With regard to section 59.101, packers would no longer be required 
to report the range of weights of cattle purchased. In addition, the 
phrase ``or other characteristics'' has been added to the premium and 
discount reporting requirement to allow for the reporting of other 
kinds of premiums and discounts such as those associated with an 
animal's age.
    Section 59.102 contains the reporting requirements for cow and bull 
purchases. In an effort to reduce the reporting burden on cow and bull 
packers, only the information that pertains to the way cows and bulls 
are marketed would be required to be reported. For example, cow and 
bull packers no longer have to report committed and delivered 
information. In addition, there would no longer be a weekly reporting 
requirement for cows and bulls.
    With regard to section 59.103, packers would be required to report 
the quantity of cattle purchased on a negotiated basis and on a 
negotiated grid basis that were slaughtered in addition to the current 
requirement to report the number of cattle purchased through forward 
contracts, formula marketing arrangements and the quantity and carcass 
characteristics of packer-owned cattle that were slaughtered. In 
addition, packers would be required to provide the basis level month 
and delivery year for all cattle purchased through forward contracts in 
addition to the current requirement to report the basis level and 
delivery month. These changes are necessary to make the information 
published in AMS market reports more meaningful and useable by the 
industry by providing a complete picture of the prior week's slaughter 
with respect to the numbers of cattle harvested under each purchase 
type. Prices for negotiated purchases and negotiated grid purchases are 
collected currently, but prior week slaughter numbers for these types 
of purchases are not now collected. However, the addition of this 
reporting requirement is expected to have little impact on the 
reporting burden to packers, while contributing to the completeness of 
the information disseminated under the program.
    Another change under section 59.103 is that packers would be 
required to provide the basis level month and delivery year for all 
cattle purchased through forward contracts in addition to the current 
requirement to report the basis level and delivery month. The basis 
level month and delivery year are necessary to provide a more accurate 
picture of the forward contract market and would allow AMS to publish 
more meaningful information. Also, the added information reflects the 
current industry practice of sometimes contracting out very far into 
the future, making it necessary to know the delivery year to categorize 
transactions properly according to not only the month but also the year 
of delivery.
    Finally, in another effort to reduce the burden on reporting 
packers, the weekly requirement to report information for cattle 
purchased through a formula marketing arrangement and slaughtered 
during the prior slaughter week has been removed as the Agency can 
obtain this information by aggregating packers' daily submissions.

Swine

    As required by the Reauthorization Act, the reporting requirements 
for sows and boars have been separated from the reporting requirements 
for barrows and gilts. Thus under this proposed rule, section 59.202 
contains the reporting requirements for barrows and gilts and section 
59.303 contains the reporting requirements for sows and boars.
    The Reauthorization Act also made a few other modifications to the 
swine reporting provisions. Specifically, the definition of a packer 
has been modified to also include a person that slaughtered an average 
of 200,000 head of sows, boars, or combination thereof per year during 
the immediately preceding 5 calendar years. Under the 1999 Act, a 
packer was defined as a swine processing plant that slaughtered an 
average of at least 100,000 swine per year during the immediately 
preceding 5 calendar years. The Reauthorization Act also changes the 
reporting timeframe for packers to submit prior day slaughtered swine 
information from 7 a.m. central time to 9 a.m. central time and 
requires the Secretary to publish a net price distribution on all 
barrows and gilts slaughtered the previous day.
    In addition to the changes required by the Reauthorization Act, the 
Agency has made a few other minor modifications to reduce the reporting 
burden on swine packers. A definition of the term ``inferior hog'' has 
been added to allow packers to exclude information on inferior hogs, 
which are discounted in the marketplace, from their data submissions to 
AMS. Also, the requirement to submit information on the lowest net 
price and the highest net price has been removed as the Agency can 
obtain this information from the LMR system from packer submissions.

Lamb

    As previously discussed, the Reauthorization Act did not change the 
reporting provisions for lamb. However, the Agency is proposing a few 
changes to reduce the reporting burden on lamb packers where possible 
and to provide more meaningful information in AMS market reports.
    The Agency is proposing to delete the definitions for the terms 
``lambs committed'' and ``terms of trade'' as the

[[Page 44677]]

requirements to submit this information have been deleted to reduce the 
reporting burden on packers. The Agency is proposing to add a 
definition for the term ``yield grade lamb carcass reporting'' to add 
further clarification to the requirement to report yield grade 
information.
    With respect to weekly reporting, the Agency is proposing to 
require packers to submit information on the quantity of lambs 
purchased through a negotiated purchase that were slaughtered in 
addition to the current requirement to submit this type of information 
on packer-owned lambs, lambs purchased through forward contracts, and 
lambs purchased under a formula arrangement. This change would allow 
AMS to publish more meaningful market information in AMS market 
reports.
    With respect to reporting requirements for lamb carcasses, the 
Agency is proposing to require packers to submit information on their 
carcass purchases in addition to the current requirement to report 
carcass sales. Due to the changing structure of the lamb industry, an 
increasing number of transactions are not required to be reported under 
the existing regulation. Requiring packers to also report their carcass 
purchases will greatly increase the volume of covered transactions and 
will allow AMS to publish more meaningful information in AMS market 
reports.

General Provisions

    Proposed Subpart A of Part 59, General Provisions, covers those 
requirements pertinent to all aspects of mandatory reporting. Section 
59.10 details how packers and importers would be required to report 
information and how reporting will be handled over weekends and 
holidays. Electronic reporting would be required for all information 
collection. Electronic reporting would involve the transfer of data 
from a packer's or importer's existing electronic recordkeeping system 
to a centrally located AMS electronic database. The packer or importer 
would be required to organize the information in an AMS-approved format 
before electronically transmitting the information to AMS.
    Once the required information has been entered into the AMS 
database, it would be aggregated and processed into various market 
reports that would be released according to the daily and weekly time 
schedule set forth in these proposed regulations.
    Section 59.20 identifies the recordkeeping requirements imposed by 
the 1999 Act and these regulations on packers and importers. Reporting 
packers and importers would be required to maintain and to make 
available the original contracts, agreements, receipts, and other 
records associated with any transaction relating to the purchase, sale, 
pricing, transportation, delivery, weighing, slaughter, or carcass 
characteristics of all livestock. In addition, they would be required 
to maintain such records or other information as is necessary or 
appropriate to verify the accuracy of the information required to be 
reported under these regulations. All of the above mentioned paperwork 
must be maintained by packers and importers for at least 2 years. 
Further, packers would be required to maintain a record to indicate the 
time a lot of cattle or swine was purchased, or a unit of boxed beef 
cuts was sold, as occurring either before 10 a.m. central time, between 
10 a.m. and 2 p.m. central time, or after 2 p.m. central time. Lamb 
packers would be required to maintain a record to indicate the time a 
lot of lambs was purchased or a lot of lamb carcasses was purchased or 
sold or boxed lamb cuts was sold, as occurring either before 2 p.m. 
central time or after 2 p.m. central time. For lamb importers, the 
record of sale shall evidence the date the sale occurred. However, to 
allow packers and importers time to collect, assemble and submit the 
information to AMS by the prescribed deadlines, all covered 
transactions up to within one half hour of the specified reporting 
times would be reported.
    Lastly, under Subpart A, Section 59.30 details the general 
definitions of terms used throughout the regulations, which would be 
applicable to all subparts. The majority of these definitions remain 
unchanged from those that were published in the 2000 final rule. 
However, as previously discussed, the following changes have been made: 
Minor modifications to the definitions of ``discount'', ``negotiated 
purchase'', and ``negotiated sale''; the addition of a definition for 
``negotiated grid purchase''; the addition of a definition of ``percent 
lean''; and the addition of a definition of ``person''.

Cattle

    Proposed Subpart B of Part 59 states what is required to be 
reported in the cattle and boxed beef sectors. For the most part, the 
reporting requirements are similar to those published in the December 
1, 2000, final rule. The specific changes that are being proposed have 
been discussed in a previous section in this document. Section 59.100 
provides definitions of cattle terms used in Subpart B, including the 
definition of packer, which identifies which entities would be required 
to report under this proposed rule. In any calendar year, the term 
cattle packer includes any Federally inspected cattle plant that 
slaughtered an average of 125,000 head of cattle a year for the 
immediately preceding 5 calendar years. Additionally, the term includes 
any processing plant that did not slaughter cattle during the 
immediately preceding 5 calendar years if the Secretary determines that 
the plant should be considered a packer based on its capacity.
    For entities that did not slaughter cattle during the immediately 
preceding 5 calendar years, such as a new plant or existing plant that 
begins operations, AMS will project the plant's annual slaughter or 
production based upon the plant's estimate of annual slaughter capacity 
to determine which entities meet the definition of a packer as defined 
in these regulations.
    The definition of ``boxed beef'' includes fresh and frozen primals, 
subprimals, cuts fabricated from subprimals (with some exclusions), and 
fresh and frozen ground beef, beef trimmings, and boneless processing 
beef.
    The definition of ``terms of trade'' applies to steers and heifers 
only and includes the percentage of steers and heifers purchased by a 
packer as a negotiated purchase that are scheduled to be delivered to 
the plant for slaughter not later than 14 days and the percentage of 
slaughter steers and heifers purchased by a packer as a negotiated 
purchase that are scheduled to be delivered to the plant for slaughter 
more than 14 days but fewer than 30 days.
    The term ``type of purchase'' with respect to cattle, means a 
negotiated purchase, negotiated grid purchase, a formula market 
arrangement, and a forward contract.
    The term ``white cow'' means a cow on a ration that tends to 
produce white fat.
    As previously discussed, the reporting requirements for cows and 
bulls have been separated from the reporting requirements for steers 
and heifers, which will reduce the reporting burden on cow and bull 
packers. Section 59.101 discusses the daily reporting requirements for 
steer and heifer transactions, including what information would be 
reported, when it would be reported, and when it would be published. 
Steer and heifer plants covered under the rule would report the details 
of their purchases twice each day to AMS (once by 10 a.m. central time, 
and once by 2 p.m. central time) and

[[Page 44678]]

would include all covered transactions made up to within one half hour 
of the specified reporting time. Packers completing transactions during 
the one half hour prior to the previous reporting time would report 
those transactions at the next prescribed reporting time. The Secretary 
would publish the information not less than three times each day. 
Section 59.102 discusses the daily reporting requirements for cows and 
bulls, including what information would be reported, when it would be 
reported, and when it would be published. Cow and bull plants covered 
under this rule would be required to report the base bid price intended 
to be paid for slaughter cow and bull carcasses on that day not later 
than 10 a.m. central time and the prices for cattle purchased during 
the previous day not later than 2 p.m. central time. The Secretary 
would publish the information within one hour of the required reporting 
time on the reporting day on which the information is received by the 
packer. Section 59.103 discusses the requirements for weekly reporting 
for steers and heifers. Packers would be required to report information 
regarding the prior slaughter week on the first reporting day of each 
week not later than 9 a.m. central time. This information includes the 
quantity of cattle purchased through a negotiated basis that were 
slaughtered; the quantity of cattle purchased through a negotiated grid 
basis that were slaughtered; the quantity of cattle purchased through 
forward contracts that were slaughtered; the quantity of cattle 
delivered under a formula marketing arrangement that were slaughtered; 
the quantity and carcass characteristics of packer-owned cattle that 
were slaughtered; the quantity, basis level, basis level month, and 
delivery month and year for all cattle purchased through forward 
contracts; and the range and average of intended premiums and discounts 
that are expected to be in effect for the current slaughter week. This 
information would be published by the Secretary on the same day by 10 
a.m. central time. Finally, under Subpart B, Section 59.104 details the 
information required to be reported concerning sales of boxed beef cuts 
including what would be reported, when it would be reported, and when 
it would be published. Cattle plants producing boxed beef cuts would be 
required to report their domestic and export sales of boxed beef cuts 
including branded boxed beef cuts to AMS twice each reporting day, once 
by 10 a.m. central time and once by 2 p.m. central time. This should 
include all covered transactions made up to within one half hour of the 
specified reporting time. Cattle plants completing transactions during 
the one half hour prior to the previous reporting time would report 
those transactions at the next prescribed reporting time. This 
information would be published by the Secretary twice each day. These 
plants would be required to reference the Institutional Meat Purchase 
Specifications (IMPS) for Fresh Beef Products Series 100, United States 
Department of Agriculture, Agricultural Marketing Service, Livestock 
and Seed Program, when applicable.

Swine

    The Reauthorization Act made several changes to the swine reporting 
provisions. The Agency made a few other minor modifications, which are 
discussed in detail in a previous section in this document, for clarity 
and to reduce the reporting burden on packers.
    Proposed Subpart C of Part 59 lists the requirements of swine 
reporting beginning with Section 59.200, which establishes definitions 
for terms used throughout the subpart including the definition of a 
packer. In any calendar year, the term swine packer includes a 
Federally inspected plant that slaughtered an average of at least 
100,000 swine per year during the immediately preceding 5 calendar 
years and a person that slaughtered an average of at least 200,000 
sows, boars, or combination thereof per year during the immediately 
preceding 5 calendar years. Additionally, in the case of a swine 
processing plant or person that did not slaughter swine during the 
immediately preceding 5 calendar years, it shall be considered a packer 
if the Secretary determines the processing plant or person should be 
considered a packer under this subpart after considering its capacity. 
For entities that did not slaughter swine during the immediately 
preceding 5 calendar years, such as a new plant or existing plant that 
begins operations, AMS will project the plant's annual slaughter or 
production based upon the plant's estimate of annual slaughter capacity 
to determine which entities meet the definition of a packer as defined 
in these regulations.
    Section 59.202 discusses the daily reporting requirements for 
barrows and gilts including what information would be reported, when it 
would be reported, and when it would be published.
    For barrows and gilts, packers required to report under this rule 
would report the details of their barrows and gilts purchases three 
times each day including a prior day report not later than 7 a.m. 
central time, a morning report not later than 10 a.m. central time, and 
an afternoon report not later than 2 p.m. central time, including all 
covered transactions made up to within one half hour of each specified 
reporting time. Packers completing transactions during the one half 
hour prior to the previous reporting time would report those 
transactions at the next prescribed reporting time. This information 
would be published by the Secretary each reporting day not later than 8 
a.m. central time, 11 a.m. central time, and 3 p.m. central time, 
respectively. For barrows and gilts, packers required to report under 
this rule would also have to report not later than 9 a.m. central time 
on each reporting day information regarding all barrow and gilts 
slaughtered during the prior business day. This information would be 
published by the Secretary each reporting day not later than 10 a.m. 
central time. In addition, the Secretary would publish a net price 
distribution for all barrow and gilts slaughtered on the previous day 
not later than 3 p.m. central time. Section 59.203 details the 
reporting requirements for sows and boars. Under this proposed rule, 
each sow and boar packer would report to the Secretary not later than 7 
a.m. central time on each reporting day information regarding all sows 
and boars purchased or priced during the prior business day of the 
packer. This information would be published by the Secretary each 
reporting day not later than 8 a.m. central time. Section 59.204 
details the requirements for reporting weekly swine information to AMS 
including what would be reported, when it would be reported, and when 
it would be published. On the first reporting day of each week, not 
later than 4 p.m. central time, packers would be required to report 
information on noncarcass merit premiums used and paid to producers 
during the prior slaughter week by category. This information would be 
published on the first reporting day of each week not later than 5 p.m. 
central time.

Lamb

    Proposed Subpart D of Part 59 covers the mandatory reporting of 
lambs. The 1999 Act gives the Secretary the authority to establish a 
mandatory lamb price reporting program but does not set forth the 
requirements. AMS proposes to resume the previously established 
mandatory lamb price reporting program with some modifications as 
discussed in a previous section in this document.
    Section 59.300 provides definitions for terms used throughout 
Subpart D including definitions for packer and for

[[Page 44679]]

importer, which identifies the entities that would be required to 
report under this proposed rule. For any calendar year, the term lamb 
packer includes any Federally inspected lamb processing plant that 
slaughtered or processed the equivalent of an average of 75,000 head of 
lambs a year for the immediately preceding 5 calendar years. 
Additionally, the term includes any processing plant that did not 
slaughter or process an average of 75,000 lambs during the immediately 
preceding 5 calendar years if the Secretary determines that the plant 
should be considered a packer based on the capacity of the processing 
plant.
    For entities that did not slaughter lambs during the immediately 
preceding 5 calendar years, such as a new plant or existing plant that 
begins operations, AMS will project the plant's annual slaughter or 
production based upon the plant's estimate of annual slaughter capacity 
to determine which entities meet the definition of a packer as defined 
in these regulations.
    For any calendar year, the term lamb importer includes any importer 
that imported an average of 2,500 metric tons of lamb meat products per 
year during the immediately preceding 5 calendar years. Additionally, 
for any calendar year, the term importer includes any lamb importer 
that did not import an average of 2,500 metric tons of lamb meat 
products during the immediately preceding 5 calendar years if the 
Secretary determines that the person should be considered an importer 
based on their volume of lamb imports.
    For importers of lamb meat products, AMS will annually review 
import lamb volume data obtained from the United States Bureau of 
Customs and Border Protection to determine which importers are required 
to report imported boxed lamb cut sales information under these 
regulations.
    Under this proposed rule, several changes have been made to the 
definitions section that was published in the 2000 final rule. To 
facilitate the publication of more meaningful information in AMS market 
reports, a definition of ``yield grade lamb carcass reporting'' has 
been added, which will help clarify the requirements for reporting USDA 
yield grade information. In addition, the definitions of ``lambs 
committed'' and ``terms of trade'' have been deleted as the requirement 
to submit the information associated with these definitions has been 
removed as it is not used by the industry.
    Section 59.301 covers the daily reporting requirements for live 
lamb transactions including what would be reported, when it would be 
reported, and when it would be published. Lamb plants covered under the 
rule would report the details of their live lamb purchases once each 
day to AMS, to include all covered transactions made up to within one 
half hour of the specified reporting time. Lamb plants completing 
transactions during the one half hour prior to the previous reporting 
time would report those transactions at the next prescribed reporting 
time. The Secretary would publish this information not less than once 
each day. Section 59.302 covers the same type of information for weekly 
reporting of live lamb transactions. Packers would be required to 
report information regarding the prior slaughter week, including among 
other things the number of lambs purchased through a negotiated 
purchase that were slaughtered, on the first reporting day of each week 
to be published by the Secretary on the same day. Finally, Section 
59.303 covers the reporting requirements for transactions of lamb 
carcasses and boxed lamb cuts including what would be reported, when it 
would be reported, and when it would be published. Packers would be 
required to report details of their sales and purchases of carcass 
lambs once each day and the Secretary would publish the information 
once each day. Packers would be required to report details of their 
sales of boxed lamb cuts, including applicable branded product. This 
information would be published once each day. These plants would be 
required to reference the Institutional Meat Purchase Specifications 
(IMPS) for Fresh Lamb and Mutton Series 200, United States Department 
of Agriculture, Agricultural Marketing Service, Livestock and Seed 
Program, where applicable.
    Importers of boxed lamb cuts would be required to report the 
required information of their prior week sales of imported boxed lamb 
cuts on the domestic market, including applicable branded product on 
the first reporting day of each week and this information would be 
published by the Secretary on the same day.

OMB Control Numbers

    Subpart E of Part 59 covers the OMB control number 0581-0186 
assigned pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35) for the information collection requirements listed in 
Subparts B through D of Part 59. All required information must be 
reported to AMS in a standardized format. The standardized format is 
embodied in 16 data collection forms that are included in Appendix E at 
the end of this document. Cattle packers will utilize up to seven of 
these forms (not all cattle packers must submit all cattle forms) 
(Appendix A) when reporting information to AMS including four for daily 
cattle reporting, two for weekly cattle reporting, and one for daily 
boxed beef cuts reporting. Swine packers will utilize up to three forms 
(not all swine packers must submit all swine forms) (Appendix B), two 
for daily reporting of swine purchases and one for weekly reporting of 
non-carcass merit premium information. Lamb packers will utilize up to 
six of these forms (not all lamb packers must submit all lamb forms) 
(Appendix C) when reporting information to AMS, including one for daily 
lamb reporting, three for weekly lamb reporting, one for daily and 
weekly boxed lamb cuts reporting, and one for daily lamb carcass 
reporting. Lamb importers will utilize one of these forms when 
reporting information to AMS for reporting weekly imported boxed lamb 
cut sales.

Appendices

    The final section of this document contains a series of five 
appendices. These appendices will not appear in the Code of Federal 
Regulations. The first three appendices, Appendices A to C, have 
already been discussed above. They describe the forms that will be used 
by those required to report information under this program. Appendix D 
contains guidelines for those entities required to report information 
on how to use the forms. The actual forms are contained in Appendix E.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. Section 259 of the 1999 Act prohibits States or political 
subdivisions of a State to impose any requirement that is in addition 
to, or inconsistent with, any requirement of the 1999 Act with respect 
to the submission or reporting of information, or the publication of 
such information, on the prices and quantities of livestock or 
livestock products. In addition, the 1999 Act does not restrict or 
modify the authority of the Secretary to administer or enforce the 
Packers and Stockyards Act of 1921 (7 U.S.C. 181 et seq.); administer, 
enforce, or collect voluntary reports under the 1999 Act or any other 
law; or access documentary evidence as provided under Sections 9 and 10 
of the Federal Trade Commission Act (15 U.S.C. 49, 50). There are no 
administrative procedures that must be

[[Page 44680]]

exhausted prior to any judicial challenge to the provisions of this 
rule.

Civil Rights Review

    AMS has considered the potential civil rights implications of this 
rule on minorities, women, or persons with disabilities to ensure that 
no person or group shall be discriminated against on the basis of race, 
color, national origin, gender, religion, age, disability, sexual 
orientation, marital or family status, political beliefs, parental 
status, or protected genetic information. This review included persons 
that are employees of the entities that are subject to this regulation. 
This proposed rule does not require affected entities to relocate or 
alter their operations in ways that could adversely affect such persons 
or groups. Further, this proposed rule would not deny any persons or 
groups the benefits of the program or subject any persons or groups to 
discrimination.

Executive Order 13132

    This proposed rule has been reviewed under Executive Order 13132, 
Federalism. This Order directs agencies to construe, in regulations and 
otherwise, a Federal Statute to preempt State law only when the statute 
contains an express preemption provision. This rule is required by the 
1999 Act. Section 259 of the 1999 Act, Federal Preemption, states, ``In 
order to achieve the goals, purposes, and objectives of this title on a 
nationwide basis and to avoid potentially conflicting State laws that 
could impede the goals, purposes, or objectives of this title, no State 
or political subdivision of a State may impose a requirement that is in 
addition to, or inconsistent with, any requirement of this subtitle 
with respect to the submission or reporting of information, or the 
publication of such information, on the prices and quantities of 
livestock or livestock products.''
    Prior to the passage of the 1999 Act, several States enacted 
legislation mandating, to various degrees, the reporting of market 
information on transactions of cattle, swine, and lambs conducted 
within that particular State. However, since the National program was 
implemented on April 2, 2001, these State programs are no longer in 
effect. Therefore, there are no Federalism implications associated with 
this rulemaking.

Executive Order 12866

    This proposed rule has been determined to be significant for 
purposes of Executive Order 12866 and therefore has been reviewed by 
the Office of Management and Budget (OMB). In accordance with Executive 
Order 12866, this preliminary regulatory analysis contains a statement 
of the need for the proposed rule, an examination of alternative 
approaches, and an analysis of benefits and costs.

Executive Summary

    This proposed rule implements the Reauthorization Act, which 
reauthorized the 1999 Act and amended the swine reporting provisions of 
that Act. As stated in the 1999 Act, the purpose of the Act is to 
establish a program of information regarding the marketing of cattle, 
swine, lambs, and the products of such livestock that provides 
information that can be readily understood by producers; improves the 
price and supply reporting services of the Department of Agriculture; 
and encourages competition in the marketplace for livestock and 
livestock products. (7 U.S.C. 1635)
    This proposed rule facilitates open, transparent price discovery 
and provides all market participants, both large and small, with 
comparable levels of market information. The proposed rule is expected 
to reduce the time and resources that market participants would 
otherwise expend to assess current market conditions, reduce risk and 
uncertainty, and contribute to considerations of fairness and equity to 
all participants in the marketplace. However, these anticipated 
benefits are difficult to measure and quantify.
    This proposed rule is strictly an informational measure and does 
not impose any restrictions on the form, timing, or location of 
procurement and sales arrangements in which subject packers and 
importers may engage. Therefore, costs of the proposed rule are simply 
the costs associated with system development and maintenance, data 
submission, and recordkeeping activities of the packers and importers 
required to report information under this proposed rule, plus the costs 
to the Federal government for operation of the program. However, most 
of the entities that would be required to report under this proposed 
rule already