Cotton World Price Determination, 30274-30277 [E8-11803]
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30274
Federal Register / Vol. 73, No. 102 / Tuesday, May 27, 2008 / Rules and Regulations
4. Section 305.9 is amended as
follows:
I a. By revising the section heading to
read as set forth below.
I b. By revising paragraph (b), including
the table, to read as set forth below.
I
5. In § 305.10, in the table in
paragraph (a)(3), the entry for T–108b is
revised to read as follows:
(b) Aerosol schedule.
I
Treatment
schedule
Aerosol
Rate
T–409b .........
d-phenothrin
(10%).
8g/1,000 ft 3.
(a) * * *
(3) * * *
§ 305.9 Aerosol spray for aircraft treatment
schedule.
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Treatment schedule
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MB ............................................... 50 or above .................................
40–49 ...........................................
CT ................................................ 33 or below ..................................
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Done in Washington, DC, this 20th day of
May 2008.
Kevin Shea,
Acting Administrator, Animal and Plant
Health Inspection Service.
[FR Doc. E8–11740 Filed 5–23–08; 8:45 am]
BILLING CODE 3410–34–P
DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1427
RIN 0560–AH78
Cotton World Price Determination
Farm Service Agency and
Commodity Credit Corporation, USDA.
ACTION: Final rule.
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AGENCY:
SUMMARY: The Commodity Credit
Corporation (CCC) is revising the
Upland Cotton regulations to use Far
East prices instead of Northern Europe
prices in determining the upland cotton
adjusted world price (AWP). The change
is being made because of changes in the
market and in the available price data.
The AWP is used to determine
repayment rates for marketing assistance
loans (MAL) and to establish loan
deficiency payments (LDP).
DATES: Effective Date: May 23, 2008.
FOR FURTHER INFORMATION CONTACT:
Scott Sanford, Fibers, Peanuts, and
Tobacco Analysis Director, Economic
and Policy Analysis Staff, Farm Service
Agency, United States Department of
Agriculture (USDA), Stop 0515, 1400
Independence Ave., SW., Washington,
DC 20250–0515. Telephone: (202) 720–
3392. Electronic mail:
Scott.Sanford@wdc.usda.gov. Persons
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Dosage rate
(lb/1,000 cubic
feet)
Temperature
( °F)
Type of treatment
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T108–b ..........................................
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§ 305.10 Treatment schedules for
combination treatments.
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Background
CCC administers the commodity loan
program for upland cotton. Under
section 1204 of the Farm Security and
Rural Investment Act of 2002 (Pub. L.
107–171, 7 U.S.C. 7934), repayment of
the loan is allowed at the AWP in lieu
of what would otherwise be full
repayment of the loan plus interest.
Under section 1204, AWP is the
‘‘prevailing world market price for the
commodity (adjusted to United States
quality and location), as determined by
the Secretary.’’ No particular formula is
set by the statute for determining the
prevailing world price; however, as
specified in the regulation in 9 CFR
1427.25, for the 2007 and preceding
crops CCC has used a northern Europe
(NE) price. While the statute does not
require the use of an NE price for this
purpose the statute does require the use
of an NE price for certain other
purposes, one being in connection with
an adjustment, under section 1234(e), to
the otherwise determined AWP, and the
other being in connection with import
quotas under section 1237(b). AWP’s are
announced each Thursday and are
generally based on quotes for a
particular crop—that is, cotton in a
particular crop year. The changeover
from one crop to the next occurs in
April. By regulation, there is a 6-week
phase-in period in which the old and
new crop prices are mixed progressively
in favor of new crop prices.
This rule changes the basic AWP
determination to a Far East (FE) rather
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with disabilities who require alternative
means for communication (Braille, large
print, audio tape, etc.) should contact
the USDA Target Center at (202) 720–
2600 (voice and TDD).
SUPPLEMENTARY INFORMATION:
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Exposure period
(hours)
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2 hours.
2 hours.
21 days.
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than NE basis. At one time, northern
Europe was a center of cotton trade.
However, in recent years much of the
focus of world trade in cotton has
moved to the Pacific Rim countries,
especially China. Now, the vast majority
of U.S. cotton exports are destined for
the Far East, with smaller shares to
South Asia, Mexico, and Turkey. Less
than one percent of U.S. cotton exports
are now bound for Northern Europe.
Also, Cotlook, Ltd. (Cotlook), the
supplier of NE quotes, has announced
that it will not publish forward crop
quotes, NE basis, for the 2008 season.
No NE quotes will be published by
Cotlook at all after July 31, 2008. By
contrast, Cotlook will continue to
publish Far East prices. There is no
alternative, preferable reporting system.
The coarse count adjustment of section
1427.25(f) of the regulations will be
made on an FE rather than NE basis. In
the two instances in which an NE basis
is statutorily required those
determinations will be made using such
direct or indirect data as may be
available.
Notice and Comment
These regulations are exempt from the
notice and comment requirements of the
Administrative Procedure Act (5 U.S.C.
553), as specified in section 1601(c) of
the 2002 Farm Bill, which requires that
the regulations be promulgated and
administered without regard to the
notice and comment provisions of
section 5 of title 5 of the United States
Code or the Statement of Policy of the
Secretary of Agriculture effective July
24, 1971, (36 FR 13804) relating to
notices of proposed rulemaking and
public participation in rulemaking.
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Federal Register / Vol. 73, No. 102 / Tuesday, May 27, 2008 / Rules and Regulations
Executive Order 12866
The Office of Management and Budget
(OMB) designated this rule as
economically significant under
Executive Order 12866 and, therefore,
OMB reviewed this final rule. A costbenefit assessment of this rule was
completed and is available from the
contact information above.
Summary of Economic Impacts
The switch to FE as the basis for
determining the cotton AWP is expected
to generate modest savings as lower
transportation costs to the FE. The net
effect will likely raise the AWP,
reducing CCC’s exposure on marketing
loan benefits.
Counter-cyclical payments are not
affected because the change to FE quotes
does not affect the marketing year
average price that triggers countercyclical payments.
Recent survey results quantify the
transportation cost savings associated
with a shift from the NE to the FE
market. Annually, CCC conducts a
survey of transportation costs for
delivering U.S. cotton to foreign ports.
In the February 2008 survey, shippers
were asked to estimate their costs for
delivery to FE as well as NE ports,
resulting in NE costs of 14.52 cents per
pound and FE costs of 12.41 cents per
pound. The difference, 2.11 cents per
pound, more than offsets the historical
average of 1.07 cents per pound by
which FE quotes exceed NE quotes. As
a result, the AWP on an FE basis will
be 1.04 cents per pound higher (2.11
cents minus 1.07 cents) than it would be
on an NE basis, and marketing loan
benefits (when available) will be 1.04
cents per pound lower. Based on a 20million bale crop (the average of recent
years), marketing loan benefits (when
available) would be $104 million per
year lower using Far East quotes.
The change recognizes the shift in
world cotton trade to the FE market that
has occurred over time. In addition, it
allows the program to operate in the
manner that provides a smooth
transition between crop years, while
reducing potential CCC budgetary
outlays.
jlentini on PROD1PC65 with RULES
Regulatory Flexibility Act
This rule is not subject to the
Regulatory Flexibility Act since CCC is
not required to publish a notice of
proposed rulemaking for this rule.
Environmental Review
The environmental impacts of this
rule have been considered in a manner
consistent with the provisions of the
National Environmental Policy Act of
1969 (NEPA), 42 U.S.C. 4321–4347, the
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regulations of the Council on
Environmental Quality (40 CFR parts
1500–1508), and the FSA regulations for
compliance with NEPA (7 CFR part
799). The following final rule was
determined to be Categorically
Excluded. Therefore, no environmental
assessment or environmental impact
statement will be completed for this
final rule.
Executive Order 12372
This program is not subject to
Executive Order 12372, which requires
consultation with State and local
officials. See the notice related to 7 CFR
part 3015, subpart V, published in the
Federal Register on June 24, 1983 (48
FR 29115).
Executive Order 12612
This rule does not have Federalism
implications that warrant the
preparation of a Federalism Assessment.
This rule will not have a substantial
direct effect on States or their political
subdivisions or on the distribution of
power and responsibilities among the
various levels of government.
This final rule has been reviewed
under Executive Order 12988. This final
rule is not retroactive and it does not
preempt State or local laws, regulations,
or policies unless they present an
irreconcilable conflict with this rule.
Before any judicial action may be
brought regarding the provisions of this
rule the administrative appeal
provisions of 7 CFR parts 11 and 780
must be exhausted.
Unfunded Mandates
This rule contains no Federal
mandates under the regulatory
provisions of Title II of the UMRA for
State, local, and tribal government or
the private sector. In addition, CCC was
not required to publish a notice of
proposed rulemaking for this rule.
Therefore, this rule is not subject to the
requirements of sections 202 and 205 of
the UMRA.
Small Business Regulatory Enforcement
Fairness Act of 1996 (SBREFA)
Section 1601(c)(3) of the 2002 Farm
Bill requires that the Secretary use the
authority in section 808 of title 5,
United States Code, which allows an
agency to forgo SBREFA’s usual 60-day
Congressional Review delay of the
effective date of a major regulation if the
agency finds that there is a good cause
to do so. Accordingly, this rule is
effective upon publication in the
Federal Register.
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Paperwork Reduction Act
These regulations are exempt from the
requirements of the Paperwork
Reduction Act (44 U.S.C. Chapter 35), as
specified in section 1601(c)(2)(A) of the
2002 Farm Bill, which provides that
these regulations be promulgated and
administered without regard to the
Paperwork Reduction Act.
E-Government Act Compliance
CCC is committed to complying with
the E-Government Act, to promote the
use of the Internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
List of Subjects in 7 CFR Part 1427
Cotton, Cottonseeds, Loan programsagriculture, Packaging and containers,
Price support programs, Reporting and
recordkeeping requirements, Surety
bonds, Warehouses.
I Accordingly, amend 7 CFR part 1427
as follows:
PART 1427—COTTON
1. Revise the authority for part 1427
to read as follows:
I
Executive Order 12988
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Authority: 7 U.S.C. 7231–7236, 15 U.S.C.
714b and 714c, Public Law 108–324, Public
Law 108–447, and Public Law 109–234.
2. Amend § 1427.3 as follows:
a. Remove the definition of ‘‘current
shipment price’’ and add a new
definition, in alphabetical order, for the
term ‘‘current northern Europe
shipment’’.
I b. Remove the definition of ‘‘forward
shipment price’’ and add a new
definition, in alphabetical order, for the
term ‘‘Forward northern Europe
shipment’’ to read as follows.
I c. Amend the definition of ‘‘U.S.
Northern Europe current price’’ by
removing the words ‘‘current shipment’’
and adding the words ‘‘current northern
Europe shipment’’ in their place.
I d. Revise the definition of ‘‘U.S.
Northern Europe forward price’’ by
removing the words ‘‘forward
shipment’’ and adding the words
‘‘forward northern Europe shipment’’ in
their place.
I e. Add new definitions, in
alphabetical order, for the following
terms ‘‘Current Far East shipment
price,’’ ‘‘Far East current price,’’ ‘‘Far
East forward price,’’ ‘‘Far East price,’’
‘‘Forward Far East shipment price,’’
‘‘U.S. Far East current price,’’ ‘‘U.S. Far
East forward price,’’ and ‘‘U.S. Far East
price,’’ as set forth below:
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§ 1427.3
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Definitions.
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30276
Federal Register / Vol. 73, No. 102 / Tuesday, May 27, 2008 / Rules and Regulations
Current Far East shipment price
means, during the period in which two
daily price quotations are available for
the growth quoted for M 13⁄32 inch
cotton, CFR (cost and freight) Far East,
the price quotation for cotton for
shipment no later than August/
September of the current calendar year.
Current northern Europe shipment
means, during the period in which two
daily price quotations are available for
the growth quoted for M 13⁄32 inch
cotton, C.I.F. northern Europe, the price
quotation for cotton for shipment no
later than August/September of the
current calendar year.
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Far East current price means the
average for the preceding Friday
through Thursday of the current
shipment prices for the five lowestpriced growths of the growths quoted
for M 13⁄32 inch cotton, CFR Far East.
Far East forward price means the
average for the preceding Friday
through Thursday of the forward
shipment prices for the five lowestpriced growths of the growths quoted
for M 13⁄32 inch cotton, CFR Far East.
Far East price means, during the
period in which only one daily price
quotation is available for the growth
quoted for M 13⁄32 inch cotton, CFR Far
East, the average of the price quotations
for the preceding Friday through
Thursday of the five lowest-priced
growths of the growths quoted for M
13⁄32 inch cotton, CFR Far East.
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Forward Far East shipment price
means, during the period in which two
daily price quotations are available for
the growths quoted for M 13⁄32 inch
cotton, CFR Far East, the price quotation
for cotton for shipment no earlier than
October/November of the current
calendar year.
Forward northern Europe shipment
means, during the period in which two
daily price quotations are available for
the growths quoted for M 13⁄32 inch
cotton, C.I.F. northern Europe, the price
quotation for cotton for shipment no
earlier than October/November of the
current calendar year.
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U.S. Far East current price means the
average for the preceding Friday
through Thursday of the current Far
East shipment prices for the lowestpriced U.S. growth as quoted for M
13⁄32 inch cotton, CFR Far East.
U.S. Far East forward price means the
average for the preceding Friday
through Thursday of the forward Far
East shipment prices for the lowestpriced U.S. growth as quoted for M
13⁄32 inch cotton, CFR Far East.
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U.S. Far East price means, during the
period in which only one daily price
quotation is available for the U.S.
growths quoted for M 13⁄32 inch cotton,
CFR Far East, the average of the price
quotations for the preceding Friday
through Thursday of the lowest-priced
U.S. growth as quoted for M
13⁄32 inch cotton, CFR Far East.
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I 3. Amend § 1427.25 as follows:
I a. Revise the following paragraphs to
read as set forth below: paragraphs
(a)(1), (a)(2), (c)(1)(i)(B), (d)(2)(i),
(f)(2)(i)(B), and (g).
I b. In paragraph (a)(3), remove the
words ‘‘Northern Europe price (NE)’’
and add, in their place the words ‘‘Far
East price (FE).’’
I c. In the following places, remove the
abbreviation ‘‘NE’’ and add, in their
place the abbreviation ‘‘FE:’’
i. Paragraph (c) introductory text,
ii. Paragraph (c)(1) introductory text,
and
iii. Paragraph (f)(2)(i) introductory
text.
I d. In paragraphs (f)(2)(iii) and (f)(3)
introductory text, remove the words
‘‘Northern Europe’’ and add, in their
place the words ‘‘Far East.’’
I e. In the following places, remove the
words ‘‘C.I.F. northern Europe’’ and
add, in their place each time they
appear, the words ‘‘CFR Far East:’’
i. Paragraph (c)(1)(i)(A),
ii. Paragraph (d)(1) introductory text,
iii. Paragraph (d)( 2) introductory text,
iv. Paragraph (d)(3)(i), and
v. Paragraph (f)(2)(i)(A).
I f. In paragraph (c)(4)(i)(B), add the
abbreviation ‘‘(NE)’’ immediately
following the words ‘‘northern Europe.’’
I g. In paragraph (c)(4)(ii), remove the
word ‘‘shipment’’ and add, in its place
each time it appears, the words
‘‘northern Europe shipment:’’
I h. In paragraph (c)(4)(iv)(B), remove
the reference ‘‘paragraph (a)’’ and add,
in its place, the reference ‘‘paragraph
(c).’’
I i. In paragraphs (d)(1)(i) and (ii),
remove the words ‘‘northern Europe’’
and add, in their place each time they
appear, the words ‘‘the Far East:’’
I j. In paragraph (d)(2)(i), remove the
words ‘‘northern Europe quotation’’ and
add, in their place, the words ‘‘Far East
quotation.’’
I k. In paragraph (e), remove the word
‘‘Standard’’ each time it appears.
§ 1427.25 Determination of the prevailing
world market price and the adjusted world
price for upland cotton.
(a) * * *
(1) During the period when only one
daily price quotation is available for
each growth quoted for Middling one
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and three-thirty-second inch (M 13⁄32
inch) cotton, CFR (cost and freight) Far
East, the prevailing world market price
for upland cotton will be based on the
average of the quotations for the
preceding Friday through Thursday for
the 5 lowest-priced growths of the
growths quoted for M 13⁄32 inch cotton,
CFR Far East.
(2) During the period when both a
price quotation for cotton for shipment
no later than August/September of the
current calendar year (current Far East
shipment price) and a price quotation
for cotton for shipment no earlier than
October/November of the current
calendar year (forward Far East
shipment price) are available for
growths quoted for M 13⁄32 inch cotton,
CFR Far East, the prevailing world
market price for upland cotton will be
based on the following: Beginning with
the first week covering the period
Friday through Thursday that includes
April 15 or, if both the average of the
current Far East shipment prices for the
preceding Friday through Thursday for
the 5 lowest-priced growths of the
growths quoted for M 13⁄32 inch cotton,
CFR Far East (Far East current price
(FEc)), and the average of the forward
Far East shipment prices for the
preceding Friday through Thursday for
the 5 lowest-priced growths of the
growths quoted for M 13⁄32 inch cotton,
CFR Far East (Far East forward price
(FEf)), are not available during that
period, beginning with the first week
covering the period Friday through
Thursday after the week which includes
April 15 in which both the FEc and FEf
price are available, the prevailing world
market price for upland cotton will be
based on the result calculated by the
following procedure:
(i) Weeks 1 and 2: ((2 × FEc) + FEf)/
3.
(ii) Weeks 3 and 4: (FEc + FEf)/2.
(iii) Weeks 5 and 6: (FEc + (2 × FEf))/
3.
(iv) Week 7 through July 31: FEf.
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(c) * * *
(1) * * *
(i) * * *
(B) The average of the current Far East
shipment prices for U.S. Memphis
territory and the California/Arizona
territory as quoted each Thursday for M
13⁄32 inch cotton, CFR Far East, during
the period when both current Far East
shipment prices and forward Far East
shipment prices for such growths are
available; and
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(d) * * *
(2) * * *
(i) May use the available Far East
quotation to determine the difference
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Federal Register / Vol. 73, No. 102 / Tuesday, May 27, 2008 / Rules and Regulations
between the average price quotations for
the U.S. Memphis territory and the
California/Arizona territory, as quoted
for M 13⁄32 inch cotton, CFR Far East,
and the average price of M 13⁄32 inch,
leaf 3, (micronaire 3.5 through 3.6 and
4.3 through 4.9, strength 25.5 through
29.4 grams per tex, length uniformity 80
through 82 percent) cotton, as quoted
each Thursday in the designated U.S.
spot markets for that week, or
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(f) * * *
(2) * * *
(i) * * *
(B) During the period when both
current Far East shipment prices and
forward Far East shipment prices are
available for the growths quoted for
‘‘coarse count’’ cotton, CFR Far East, the
result calculated by the following
procedure: Beginning with the first
week covering the period Friday
through Thursday including April 15 or,
if both the average of the current Far
East shipment prices for the preceding
Friday through Thursday for the three
lowest-priced growths of the growths
quoted for ‘‘coarse count’’ cotton, CFR
Far East (Far East coarse count current
price (FECCc)), and the average of the
forward Far East shipment prices for the
preceding Friday through Thursday for
the three lowest-priced growths of the
growths quoted for ‘‘coarse count’’
cotton, CFR Far East (Far East coarse
count forward price (FECCf)), are not
available during that period, beginning
with the first week covering the period
Friday through Thursday after the week
including April 15 in which both the
Far East coarse count current price and
the Far East coarse count forward price
are available:
(1) Weeks 1 and 2: (2 × FECCc) +
FECCf)/3;
(2) Weeks 3 and 4: (FECCc + FECCf)/
2;
(3) Weeks 5 and 6: (FECCc + (2 ×
FECCf))/3; and
(4) Week 7 through July 31: The
FECCf, minus:
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(g) If the 6-week transition period
from using current Far East shipment
prices to using forward Far East
shipment prices in the determination of
the FE under paragraph (a)(2) of this
section, and the Far East coarse count
price under paragraph (f)(2)(i)(B) of this
section do not begin at the same time,
CCC will use either current Far East
shipment prices, forward Far East
shipment prices, or any combination
thereof to determine the FE and/or the
Far East coarse count price used in the
determination of the adjustment for
upland cotton under paragraph (f)(1) of
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this section and determined under
paragraph (f)(2) of this section to
prevent distortions in such adjustment.
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Signed at Washington, DC, on May 20,
2008.
Teresa C. Lasseter,
Executive Vice President, Commodity Credit
Corporation.
[FR Doc. E8–11803 Filed 5–23–08; 8:45 am]
BILLING CODE 3410–05–P
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1767
RIN 0572–AC08
Accounting Requirements for RUS
Electric Borrowers
Rural Utilities Service, USDA.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Rural Utilities Service, an
agency delivering the United States
Department of Agriculture’s Rural
Development Utilities Programs,
hereinafter referred to as Rural
Development and/or Agency, is
amending its regulation on accounting
policies and procedures for Rural
Development Electric Programs
borrowers as set forth in 7 CFR part
1767, Accounting Requirements for
Rural Development Electric Program
Borrowers. This final rule reconciles
Part 1767 with the Uniform System of
Accounts as set forth by the Federal
Energy Regulatory Commission (FERC);
adopts FERC accounting guidance for
Regional Transmission Organizations,
Asset Retirement Obligations with
modifications, Other Comprehensive
Income, and Derivatives and Hedging
Instruments; amends accounting
interpretations for Special Equipment
Accounting, Storm Damage, Rural
Economic Development Loan and Grant
Program and Consolidated Financial
Statements; sets forth an accounting
interpretation to establish uniform
reporting procedures for Accounting for
Cushion of Credit Accounts, and
codifies guidance on records retention
currently published in Bulletin 180–2.
This final rule also corrects a number of
administrative errors existing within
this part. The section of the proposed
rule that deals with accounting for and
reporting on Renewable Energy Credits
will be addressed in a subsequent final
rule.
EFFECTIVE DATE: May 27, 2008.
FOR FURTHER INFORMATION CONTACT: Ms.
Diana C. Alger, Chief, Technical
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30277
Accounting and Auditing Staff, Program
Accounting Services Division, Rural
Development, STOP 1523, Room 2221,
South Building, U.S. Department of
Agriculture, Washington, DC 20250,
telephone number (202) 720–5227.
SUPPLEMENTARY INFORMATION:
General Discussion
On July 13, 2007 the Agency
published a proposed rule in the
Federal Register (72 FR 38511) entitled
Accounting Requirements for RUS
Electric Program Borrowers, and the
public was invited to submit comments
on or before September 11, 2007.
Comments were received and are
addressed in the Discussion Comment
section of this rule. One issue still under
consideration is the renewable energy
credit market. The Agency has
determined that it is best to defer any
decisions on this accounting treatment
until further information is available. A
separate rulemaking will address this
issue and will be published in the
Federal Register at a future date.
Background
In order to facilitate the effective and
economical operation of a business
enterprise, adequate and reliable
financial records must be maintained.
Accounting records must provide a
clear, accurate picture of current
economic conditions from which
management can make informed
decisions in charting the company’s
future. The rate regulated environment
in which an electric utility operates
causes an even greater need for financial
information that is accurate, complete,
and comparable with that of other
electric utilities.
Rural Development, as a Federal
lender and mortgagee, and in furthering
the objectives of the Rural
Electrification Act (RE Act) (7 U.S.C.
901 et seq.), has a legitimate
programmatic interest and a substantial
financial interest in requiring adequate
records to be maintained. In order to
provide Rural Development with
financial information that can be
analyzed and compared with the
operations of other borrowers in the
Rural Development program, all Rural
Development borrowers must maintain
financial records that utilize uniform
accounts and uniform accounting
policies and procedures. The standard
Rural Development security instrument,
therefore, requires borrowers to
maintain their books, records, and
accounts in accordance with methods
and principles of accounting prescribed
by Rural Development in the Rural
Development Uniform System of
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]]>Agencies
[Federal Register Volume 73, Number 102 (Tuesday, May 27, 2008)]
[Rules and Regulations]
[Pages 30274-30277]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-11803]
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DEPARTMENT OF AGRICULTURE
Commodity Credit Corporation
7 CFR Part 1427
RIN 0560-AH78
Cotton World Price Determination
AGENCY: Farm Service Agency and Commodity Credit Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Commodity Credit Corporation (CCC) is revising the Upland
Cotton regulations to use Far East prices instead of Northern Europe
prices in determining the upland cotton adjusted world price (AWP). The
change is being made because of changes in the market and in the
available price data. The AWP is used to determine repayment rates for
marketing assistance loans (MAL) and to establish loan deficiency
payments (LDP).
DATES: Effective Date: May 23, 2008.
FOR FURTHER INFORMATION CONTACT: Scott Sanford, Fibers, Peanuts, and
Tobacco Analysis Director, Economic and Policy Analysis Staff, Farm
Service Agency, United States Department of Agriculture (USDA), Stop
0515, 1400 Independence Ave., SW., Washington, DC 20250-0515.
Telephone: (202) 720-3392. Electronic mail: Scott.Sanford@wdc.usda.gov.
Persons with disabilities who require alternative means for
communication (Braille, large print, audio tape, etc.) should contact
the USDA Target Center at (202) 720-2600 (voice and TDD).
SUPPLEMENTARY INFORMATION:
Background
CCC administers the commodity loan program for upland cotton. Under
section 1204 of the Farm Security and Rural Investment Act of 2002
(Pub. L. 107-171, 7 U.S.C. 7934), repayment of the loan is allowed at
the AWP in lieu of what would otherwise be full repayment of the loan
plus interest. Under section 1204, AWP is the ``prevailing world market
price for the commodity (adjusted to United States quality and
location), as determined by the Secretary.'' No particular formula is
set by the statute for determining the prevailing world price; however,
as specified in the regulation in 9 CFR 1427.25, for the 2007 and
preceding crops CCC has used a northern Europe (NE) price. While the
statute does not require the use of an NE price for this purpose the
statute does require the use of an NE price for certain other purposes,
one being in connection with an adjustment, under section 1234(e), to
the otherwise determined AWP, and the other being in connection with
import quotas under section 1237(b). AWP's are announced each Thursday
and are generally based on quotes for a particular crop--that is,
cotton in a particular crop year. The changeover from one crop to the
next occurs in April. By regulation, there is a 6-week phase-in period
in which the old and new crop prices are mixed progressively in favor
of new crop prices.
This rule changes the basic AWP determination to a Far East (FE)
rather than NE basis. At one time, northern Europe was a center of
cotton trade. However, in recent years much of the focus of world trade
in cotton has moved to the Pacific Rim countries, especially China.
Now, the vast majority of U.S. cotton exports are destined for the Far
East, with smaller shares to South Asia, Mexico, and Turkey. Less than
one percent of U.S. cotton exports are now bound for Northern Europe.
Also, Cotlook, Ltd. (Cotlook), the supplier of NE quotes, has announced
that it will not publish forward crop quotes, NE basis, for the 2008
season. No NE quotes will be published by Cotlook at all after July 31,
2008. By contrast, Cotlook will continue to publish Far East prices.
There is no alternative, preferable reporting system. The coarse count
adjustment of section 1427.25(f) of the regulations will be made on an
FE rather than NE basis. In the two instances in which an NE basis is
statutorily required those determinations will be made using such
direct or indirect data as may be available.
Notice and Comment
These regulations are exempt from the notice and comment
requirements of the Administrative Procedure Act (5 U.S.C. 553), as
specified in section 1601(c) of the 2002 Farm Bill, which requires that
the regulations be promulgated and administered without regard to the
notice and comment provisions of section 5 of title 5 of the United
States Code or the Statement of Policy of the Secretary of Agriculture
effective July 24, 1971, (36 FR 13804) relating to notices of proposed
rulemaking and public participation in rulemaking.
[[Page 30275]]
Executive Order 12866
The Office of Management and Budget (OMB) designated this rule as
economically significant under Executive Order 12866 and, therefore,
OMB reviewed this final rule. A cost-benefit assessment of this rule
was completed and is available from the contact information above.
Summary of Economic Impacts
The switch to FE as the basis for determining the cotton AWP is
expected to generate modest savings as lower transportation costs to
the FE. The net effect will likely raise the AWP, reducing CCC's
exposure on marketing loan benefits.
Counter-cyclical payments are not affected because the change to FE
quotes does not affect the marketing year average price that triggers
counter-cyclical payments.
Recent survey results quantify the transportation cost savings
associated with a shift from the NE to the FE market. Annually, CCC
conducts a survey of transportation costs for delivering U.S. cotton to
foreign ports. In the February 2008 survey, shippers were asked to
estimate their costs for delivery to FE as well as NE ports, resulting
in NE costs of 14.52 cents per pound and FE costs of 12.41 cents per
pound. The difference, 2.11 cents per pound, more than offsets the
historical average of 1.07 cents per pound by which FE quotes exceed NE
quotes. As a result, the AWP on an FE basis will be 1.04 cents per
pound higher (2.11 cents minus 1.07 cents) than it would be on an NE
basis, and marketing loan benefits (when available) will be 1.04 cents
per pound lower. Based on a 20-million bale crop (the average of recent
years), marketing loan benefits (when available) would be $104 million
per year lower using Far East quotes.
The change recognizes the shift in world cotton trade to the FE
market that has occurred over time. In addition, it allows the program
to operate in the manner that provides a smooth transition between crop
years, while reducing potential CCC budgetary outlays.
Regulatory Flexibility Act
This rule is not subject to the Regulatory Flexibility Act since
CCC is not required to publish a notice of proposed rulemaking for this
rule.
Environmental Review
The environmental impacts of this rule have been considered in a
manner consistent with the provisions of the National Environmental
Policy Act of 1969 (NEPA), 42 U.S.C. 4321-4347, the regulations of the
Council on Environmental Quality (40 CFR parts 1500-1508), and the FSA
regulations for compliance with NEPA (7 CFR part 799). The following
final rule was determined to be Categorically Excluded. Therefore, no
environmental assessment or environmental impact statement will be
completed for this final rule.
Executive Order 12372
This program is not subject to Executive Order 12372, which
requires consultation with State and local officials. See the notice
related to 7 CFR part 3015, subpart V, published in the Federal
Register on June 24, 1983 (48 FR 29115).
Executive Order 12612
This rule does not have Federalism implications that warrant the
preparation of a Federalism Assessment. This rule will not have a
substantial direct effect on States or their political subdivisions or
on the distribution of power and responsibilities among the various
levels of government.
Executive Order 12988
This final rule has been reviewed under Executive Order 12988. This
final rule is not retroactive and it does not preempt State or local
laws, regulations, or policies unless they present an irreconcilable
conflict with this rule. Before any judicial action may be brought
regarding the provisions of this rule the administrative appeal
provisions of 7 CFR parts 11 and 780 must be exhausted.
Unfunded Mandates
This rule contains no Federal mandates under the regulatory
provisions of Title II of the UMRA for State, local, and tribal
government or the private sector. In addition, CCC was not required to
publish a notice of proposed rulemaking for this rule. Therefore, this
rule is not subject to the requirements of sections 202 and 205 of the
UMRA.
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)
Section 1601(c)(3) of the 2002 Farm Bill requires that the
Secretary use the authority in section 808 of title 5, United States
Code, which allows an agency to forgo SBREFA's usual 60-day
Congressional Review delay of the effective date of a major regulation
if the agency finds that there is a good cause to do so. Accordingly,
this rule is effective upon publication in the Federal Register.
Paperwork Reduction Act
These regulations are exempt from the requirements of the Paperwork
Reduction Act (44 U.S.C. Chapter 35), as specified in section
1601(c)(2)(A) of the 2002 Farm Bill, which provides that these
regulations be promulgated and administered without regard to the
Paperwork Reduction Act.
E-Government Act Compliance
CCC is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
List of Subjects in 7 CFR Part 1427
Cotton, Cottonseeds, Loan programs-agriculture, Packaging and
containers, Price support programs, Reporting and recordkeeping
requirements, Surety bonds, Warehouses.
0
Accordingly, amend 7 CFR part 1427 as follows:
PART 1427--COTTON
0
1. Revise the authority for part 1427 to read as follows:
Authority: 7 U.S.C. 7231-7236, 15 U.S.C. 714b and 714c, Public
Law 108-324, Public Law 108-447, and Public Law 109-234.
0
2. Amend Sec. 1427.3 as follows:
0
a. Remove the definition of ``current shipment price'' and add a new
definition, in alphabetical order, for the term ``current northern
Europe shipment''.
0
b. Remove the definition of ``forward shipment price'' and add a new
definition, in alphabetical order, for the term ``Forward northern
Europe shipment'' to read as follows.
0
c. Amend the definition of ``U.S. Northern Europe current price'' by
removing the words ``current shipment'' and adding the words ``current
northern Europe shipment'' in their place.
0
d. Revise the definition of ``U.S. Northern Europe forward price'' by
removing the words ``forward shipment'' and adding the words ``forward
northern Europe shipment'' in their place.
0
e. Add new definitions, in alphabetical order, for the following terms
``Current Far East shipment price,'' ``Far East current price,'' ``Far
East forward price,'' ``Far East price,'' ``Forward Far East shipment
price,'' ``U.S. Far East current price,'' ``U.S. Far East forward
price,'' and ``U.S. Far East price,'' as set forth below:
Sec. 1427.3 Definitions.
* * * * *
[[Page 30276]]
Current Far East shipment price means, during the period in which
two daily price quotations are available for the growth quoted for M
1\3/32\ inch cotton, CFR (cost and freight) Far East, the price
quotation for cotton for shipment no later than August/September of the
current calendar year.
Current northern Europe shipment means, during the period in which
two daily price quotations are available for the growth quoted for M
1\3/32\ inch cotton, C.I.F. northern Europe, the price quotation for
cotton for shipment no later than August/September of the current
calendar year.
* * * * *
Far East current price means the average for the preceding Friday
through Thursday of the current shipment prices for the five lowest-
priced growths of the growths quoted for M 1\3/32\ inch cotton, CFR Far
East.
Far East forward price means the average for the preceding Friday
through Thursday of the forward shipment prices for the five lowest-
priced growths of the growths quoted for M 1\3/32\ inch cotton, CFR Far
East.
Far East price means, during the period in which only one daily
price quotation is available for the growth quoted for M 1\3/32\ inch
cotton, CFR Far East, the average of the price quotations for the
preceding Friday through Thursday of the five lowest-priced growths of
the growths quoted for M 1\3/32\ inch cotton, CFR Far East.
* * * * *
Forward Far East shipment price means, during the period in which
two daily price quotations are available for the growths quoted for M
1\3/32\ inch cotton, CFR Far East, the price quotation for cotton for
shipment no earlier than October/November of the current calendar year.
Forward northern Europe shipment means, during the period in which
two daily price quotations are available for the growths quoted for M
1\3/32\ inch cotton, C.I.F. northern Europe, the price quotation for
cotton for shipment no earlier than October/November of the current
calendar year.
* * * * *
U.S. Far East current price means the average for the preceding
Friday through Thursday of the current Far East shipment prices for the
lowest-priced U.S. growth as quoted for M 1\3/32\ inch cotton, CFR Far
East.
U.S. Far East forward price means the average for the preceding
Friday through Thursday of the forward Far East shipment prices for the
lowest-priced U.S. growth as quoted for M 1\3/32\ inch cotton, CFR Far
East.
U.S. Far East price means, during the period in which only one
daily price quotation is available for the U.S. growths quoted for M
1\3/32\ inch cotton, CFR Far East, the average of the price quotations
for the preceding Friday through Thursday of the lowest-priced U.S.
growth as quoted for M 1\3/32\ inch cotton, CFR Far East.
* * * * *
0
3. Amend Sec. 1427.25 as follows:
0
a. Revise the following paragraphs to read as set forth below:
paragraphs (a)(1), (a)(2), (c)(1)(i)(B), (d)(2)(i), (f)(2)(i)(B), and
(g).
0
b. In paragraph (a)(3), remove the words ``Northern Europe price (NE)''
and add, in their place the words ``Far East price (FE).''
0
c. In the following places, remove the abbreviation ``NE'' and add, in
their place the abbreviation ``FE:''
i. Paragraph (c) introductory text,
ii. Paragraph (c)(1) introductory text, and
iii. Paragraph (f)(2)(i) introductory text.
0
d. In paragraphs (f)(2)(iii) and (f)(3) introductory text, remove the
words ``Northern Europe'' and add, in their place the words ``Far
East.''
0
e. In the following places, remove the words ``C.I.F. northern Europe''
and add, in their place each time they appear, the words ``CFR Far
East:''
i. Paragraph (c)(1)(i)(A),
ii. Paragraph (d)(1) introductory text,
iii. Paragraph (d)( 2) introductory text,
iv. Paragraph (d)(3)(i), and
v. Paragraph (f)(2)(i)(A).
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f. In paragraph (c)(4)(i)(B), add the abbreviation ``(NE)'' immediately
following the words ``northern Europe.''
0
g. In paragraph (c)(4)(ii), remove the word ``shipment'' and add, in
its place each time it appears, the words ``northern Europe shipment:''
0
h. In paragraph (c)(4)(iv)(B), remove the reference ``paragraph (a)''
and add, in its place, the reference ``paragraph (c).''
0
i. In paragraphs (d)(1)(i) and (ii), remove the words ``northern
Europe'' and add, in their place each time they appear, the words ``the
Far East:''
0
j. In paragraph (d)(2)(i), remove the words ``northern Europe
quotation'' and add, in their place, the words ``Far East quotation.''
0
k. In paragraph (e), remove the word ``Standard'' each time it appears.
Sec. 1427.25 Determination of the prevailing world market price and
the adjusted world price for upland cotton.
(a) * * *
(1) During the period when only one daily price quotation is
available for each growth quoted for Middling one and three-thirty-
second inch (M 1\3/32\ inch) cotton, CFR (cost and freight) Far East,
the prevailing world market price for upland cotton will be based on
the average of the quotations for the preceding Friday through Thursday
for the 5 lowest-priced growths of the growths quoted for M 1\3/32\
inch cotton, CFR Far East.
(2) During the period when both a price quotation for cotton for
shipment no later than August/September of the current calendar year
(current Far East shipment price) and a price quotation for cotton for
shipment no earlier than October/November of the current calendar year
(forward Far East shipment price) are available for growths quoted for
M 1\3/32\ inch cotton, CFR Far East, the prevailing world market price
for upland cotton will be based on the following: Beginning with the
first week covering the period Friday through Thursday that includes
April 15 or, if both the average of the current Far East shipment
prices for the preceding Friday through Thursday for the 5 lowest-
priced growths of the growths quoted for M 1\3/32\ inch cotton, CFR Far
East (Far East current price (FEc)), and the average of the forward Far
East shipment prices for the preceding Friday through Thursday for the
5 lowest-priced growths of the growths quoted for M 1\3/32\ inch
cotton, CFR Far East (Far East forward price (FEf)), are not available
during that period, beginning with the first week covering the period
Friday through Thursday after the week which includes April 15 in which
both the FEc and FEf price are available, the prevailing world market
price for upland cotton will be based on the result calculated by the
following procedure:
(i) Weeks 1 and 2: ((2 x FEc) + FEf)/3.
(ii) Weeks 3 and 4: (FEc + FEf)/2.
(iii) Weeks 5 and 6: (FEc + (2 x FEf))/3.
(iv) Week 7 through July 31: FEf.
* * * * *
(c) * * *
(1) * * *
(i) * * *
(B) The average of the current Far East shipment prices for U.S.
Memphis territory and the California/Arizona territory as quoted each
Thursday for M 1\3/32\ inch cotton, CFR Far East, during the period
when both current Far East shipment prices and forward Far East
shipment prices for such growths are available; and
* * * * *
(d) * * *
(2) * * *
(i) May use the available Far East quotation to determine the
difference
[[Page 30277]]
between the average price quotations for the U.S. Memphis territory and
the California/Arizona territory, as quoted for M 1\3/32\ inch cotton,
CFR Far East, and the average price of M 1\3/32\ inch, leaf 3,
(micronaire 3.5 through 3.6 and 4.3 through 4.9, strength 25.5 through
29.4 grams per tex, length uniformity 80 through 82 percent) cotton, as
quoted each Thursday in the designated U.S. spot markets for that week,
or
* * * * *
(f) * * *
(2) * * *
(i) * * *
(B) During the period when both current Far East shipment prices
and forward Far East shipment prices are available for the growths
quoted for ``coarse count'' cotton, CFR Far East, the result calculated
by the following procedure: Beginning with the first week covering the
period Friday through Thursday including April 15 or, if both the
average of the current Far East shipment prices for the preceding
Friday through Thursday for the three lowest-priced growths of the
growths quoted for ``coarse count'' cotton, CFR Far East (Far East
coarse count current price (FECCc)), and the average of the forward Far
East shipment prices for the preceding Friday through Thursday for the
three lowest-priced growths of the growths quoted for ``coarse count''
cotton, CFR Far East (Far East coarse count forward price (FECCf)), are
not available during that period, beginning with the first week
covering the period Friday through Thursday after the week including
April 15 in which both the Far East coarse count current price and the
Far East coarse count forward price are available:
(1) Weeks 1 and 2: (2 x FECCc) + FECCf)/3;
(2) Weeks 3 and 4: (FECCc + FECCf)/2;
(3) Weeks 5 and 6: (FECCc + (2 x FECCf))/3; and
(4) Week 7 through July 31: The FECCf, minus:
* * * * *
(g) If the 6-week transition period from using current Far East
shipment prices to using forward Far East shipment prices in the
determination of the FE under paragraph (a)(2) of this section, and the
Far East coarse count price under paragraph (f)(2)(i)(B) of this
section do not begin at the same time, CCC will use either current Far
East shipment prices, forward Far East shipment prices, or any
combination thereof to determine the FE and/or the Far East coarse
count price used in the determination of the adjustment for upland
cotton under paragraph (f)(1) of this section and determined under
paragraph (f)(2) of this section to prevent distortions in such
adjustment.
* * * * *
Signed at Washington, DC, on May 20, 2008.
Teresa C. Lasseter,
Executive Vice President, Commodity Credit Corporation.
[FR Doc. E8-11803 Filed 5-23-08; 8:45 am]
BILLING CODE 3410-05-P
