Dairy Product Mandatory Reporting, 34004-34007 [2011-14481]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 76, Number 112 (Friday, June 10, 2011)]
[Proposed Rules]
[Pages 34004-34007]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-14481]



[[Page 34004]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1170

RIN 0581-AD12
[Doc. AMS-DA-10-0089; DA-11-01]


Dairy Product Mandatory Reporting

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule with request for comments.

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SUMMARY: The Mandatory Price Reporting Act of 2010 amended section 
273(d) of the Agricultural Marketing Act of 1946 (the Act), requiring 
the Secretary of Agriculture (Secretary) to establish an electronic 
reporting system for certain manufacturers of dairy products to report 
sales information for a mandatory dairy product reporting program. The 
amendment further stated that the Secretary shall publish the 
information obtained for the preceding week not later than 3 p.m. 
Eastern Time on Wednesday of each week.
    This proposed rule offers procedures for the Agricultural Marketing 
Service (AMS) to implement the amendment to section 273(d) the Act and 
announces the intention of AMS to request approval by the Office of 
Management and Budget (OMB) of associated information collection 
requirements. This proposed rule requests comments concerning changes 
proposed in this rule.

DATES: Comments must be received by August 9, 2011.

ADDRESSES: Interested persons are invited to submit written comments 
via the Federal eRulemaking portal at https://www.regulations.gov or to 
John R. Mengel, Chief Economist, USDA/AMS/Dairy Programs, Office of the 
Chief Economist, STOP 0229-Room 2753, 1400 Independence Ave, SW., 
Washington, DC 20250-0229, fax: (202) 720-2454. All comments should 
reference the docket number as well as the date and page number of this 
issue of the Federal Register. Comments will be made available for 
public inspection in the above office during regular business hours or 
can be viewed at https://www.regulations.gov. All comments received will 
be posted without change, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: John R. Mengel, Chief Economist, USDA/
AMS/Dairy Programs, Office of the Chief Economist, STOP 0229-Room 2753, 
1400 Independence Ave, SW., Washington, DC 20250-0229, 
john.mengel@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This proposed rule is issued pursuant to the 
Agricultural Marketing Act of 1946 [7 U.S.C. 1621 et seq.], as amended 
November 22, 2000, by Public Law 106-532, 114 Stat. 2541; May 13, 2002, 
by Public Law 107-171, 116 Stat. 207; and September 27, 2010, by Public 
Law 111-239, 124 Stat. 2502.
    Background: The Dairy Product Mandatory Reporting Program was 
established on August 2, 2007, on an interim final basis (72 FR 36341). 
A final rule (73 FR 34175) became effective June 22, 2008. The National 
Agricultural Statistics Service (NASS) currently collects information 
for the program, and AMS provides verification and enforcement 
functions for the program. NASS publishes sales information for cheddar 
cheese, butter, dry whey, and nonfat dry milk (NFDM) on a weekly basis. 
NASS began publishing cheddar cheese sales information in 1997 and 
began publishing butter, NFDM, and dry whey sales information in 1998. 
Information was collected on a voluntary basis before the Dairy Product 
Mandatory Reporting Program became effective. Any manufacturer that 
processes and markets less than 1 million pounds of the applicable 
dairy products per calendar year is exempt from these reporting 
requirements.
    AMS is responsible for verifying the sales information submitted by 
reporting entities to NASS. AMS currently visits larger entities that 
account for 80 percent of the yearly reported product volume of each 
specified dairy product at least once annually. AMS visits one-half of 
entities that account for the remaining 20 percent each year, visiting 
each such entity at least once every other year. During each visit, AMS 
reviews applicable sales transactions records for at least the 4 most 
recent weeks. In some cases, AMS may review sales records for periods 
of up to 2 years. AMS verifies that sales transactions match the 
information reported to NASS and that there are no applicable sales 
transactions not reported to NASS. Noncompliance, appeals, and 
enforcement procedures are administered by AMS.
    The Mandatory Price Reporting Act of 2010 (Pub. L. 111-239, Sept. 
27, 2010) amended section 273(d) of the Act (7 U.S.C. 1637b) to require 
that the Secretary establish an electronic reporting system for 
manufacturers of dairy products to report certain market information 
for the mandatory dairy product reporting program. The amendment 
further stated that the Secretary shall publish the information 
obtained under this section for the preceding week not later than 3 
p.m. Eastern Time on Wednesday of each week. This proposed rule 
includes regulatory changes for implementing these provisions and 
transferring applicable data collection responsibilities to AMS. This 
proposed rule announces the intention of AMS to request approval of 
associated information collection requirements by the Office of 
Management and Budget (OMB). Comments are requested concerning changes 
proposed in this rule.

Executive Orders 12866

    This proposed rule has been determined to not be significant for 
purposes of Executive Orders 12866 and therefore has not been reviewed 
by the Office of Management and Budget with respect to this Executive 
Order.

Executive Order 12988 Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. The amendments contained in this proposed rule 
are not intended to have a retroactive effect.

Regulatory Flexibility Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this proposed rule on small entities and has determined that this 
proposed rule would not have a significant economic impact on a 
substantial number of small entities. The purpose of the RFA is to fit 
regulatory actions to the scale of businesses subject to such actions 
in order that small businesses will not be unduly or disproportionately 
burdened.
    Small businesses in the dairy product manufacturing \1\ industry 
have been defined by the Small Business Administration (SBA) as those 
processors employing not more than 500 employees. For purposes of 
determining a processor's size, if the plant is part of a larger 
company operating multiple plants that collectively exceed the 500-
employee limit, the plant will be considered a large business even if 
the local plant has fewer than 500 employees. According to U.S. Census 
Bureau Statistics of U.S. Businesses, there were 1,583 dairy 
manufacturing establishments in the United States in 2008. Of these 
businesses, 1,039

[[Page 34005]]

establishments had fewer than 500 employees, and 544 establishments had 
greater than 500 employees (https://www.census.gov/econ/susb/, U.S. 
Census Bureau, 2008 County Business Patterns).
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    \1\ North American Industry Classification System (NAICS) code 
3115.
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    The dairy manufacturing establishments included in U.S. Census 
Bureau statistics include manufacturers of all types of dairy products. 
The number of plants that produce butter, cheese, NFDM, and dry whey 
with the precise specifications included in the mandatory reporting 
requirements is much lower than this. Furthermore, those manufacturers 
that process and market less than 1 million pounds of the applicable 
dairy products annually are exempt from reporting sales data. 
Currently, NASS conducts an annual validation survey that serves to 
determine which plants are required to report. In 2010, this survey 
included 182 plants. Based upon the survey, there were 88 dairy product 
plants that were subject to mandatory reporting of sales data. There 
were 52 reporting entities that reported data for one or more plants. 
The annual cost for plants to complete this survey is estimated at 
approximately $9 per plant. AMS intends to continue to conduct the 
survey. Based upon company profile information available on the 
Internet, AMS estimates that almost half of the reporting entities are 
considered small businesses under the criteria established by the SBA.
    AMS estimates that the annual cost per plant for reporting sales 
information for products included in the surveys is approximately $511. 
The majority of reporting entities report data to NASS through a secure 
web-based application. Less than three plants regularly fax their 
information, and it is believed that these plants do have Internet 
access. Therefore, there would be no significant start-up costs 
anticipated for the reporting entities as a result of implementing this 
rule as proposed.
    Under the current Dairy Product Mandatory Reporting Program, dairy 
manufacturers are required to maintain records for verification 
purposes for a 2-year period. This proposed rule makes no changes to 
this requirement. These records are maintained as part of the normal 
course of business. Thus, there is no additional burden or cost 
associated with the maintenance of these records. Therefore, in total, 
this proposed rule will not have a significant economic impact on a 
substantial number of small entities.

Paperwork Reduction Act

    The Act requires persons engaged in manufacturing dairy products to 
provide to USDA certain information including the price, quantity, and 
moisture content, where applicable, of dairy products sold by the 
manufacturer. In accordance with the Paperwork Reduction Act (44 U.S.C. 
chapter 35), AMS announces its intention to request an approval of 
information collection and recordkeeping pursuant to these 
requirements.
    Title: Dairy Products Mandatory Sales Reporting Program.
    OMB Number: 0581-NEW.
    Expiration Date of Approval: 3 years from date of OMB approval.
    Type of Request: New information collection.
    Abstract: The information collection requirements in the request 
are essential to carry out the intent of the Agricultural Marketing Act 
of 1946 as amended (the Act).
    The Act requires each manufacturer to report to the Secretary 
information concerning the price, quantity, and moisture content (where 
applicable) of dairy products sold by the manufacturer. Dairy products 
reported include cheddar cheese, butter, dry whey, and NFDM. Dairy 
manufacturers report information for these products if the products 
meet certain product specifications.
    The collection and reporting of sales information, as required by 
the Act, have been the responsibility of NASS. NASS currently collects 
the information as part of the information collection package OMB 0535-
0020. NASS allows manufacturers to submit information through a secure 
web-based application, by e-mail, or by fax. Manufacturers are required 
to submit information to NASS by 12 noon on Wednesday on all applicable 
products during the 7 days ending 12 midnight of the previous Saturday, 
local time of the plant or storage facility where the sales are made. 
NASS compiles and aggregates the information reported by the reporting 
entities and publishes the information each Friday morning. If a 
Federal holiday falls on a Tuesday or Wednesday, NASS contacts 
manufacturers via e-mail or phone concerning the applicable report 
deadline.
    Manufacturers that process and market less than 1 million pounds of 
applicable dairy products annually are exempt from reporting 
requirements. Each year, dairy manufacturers complete an Annual 
Validation Worksheet for NASS to determine which dairy manufacturers 
are exempt and to ascertain if valid information is being supplied. 
NASS currently collects the information as part of the information 
collection package OMB 0535-0020.
    The Mandatory Price Reporting Act of 2010 amended subsection 273(d) 
of the Act, requiring the Secretary to establish an electronic 
reporting system to collect the required information and to publish, 
not later than 3 p.m. Eastern Time on Wednesday of each week, a report 
containing the preceding week's information. The information collection 
and reporting requirements have been the responsibility of NASS. Under 
this proposed rule AMS would assume this responsibility. NASS would no 
longer collect price, quantity, or moisture content (where applicable) 
information for cheddar cheese, butter, NFDM, or dry whey, and NASS 
would no longer collect the associated annual validation information. 
The forms associated with this data collection would be removed from 
OMB 0535-0020 and would be included in an AMS collection package, OMB 
0581-NEW.
    The proposed provisions have been reviewed, and every effort has 
been made to minimize any unnecessary recordkeeping costs or 
requirements. The proposed electronic submission forms would require 
the minimum information necessary to effectively carry out the 
requirements of the program, and their use is necessary to fulfill the 
intent of the Act. It is expected that no outside technical expertise 
will be needed. The forms are simple, easy to understand, and place as 
small a burden as possible on respondents.
    To assist the industry in achieving compliance, educational and 
outreach sessions will be held prior to implementation. AMS will assist 
reporting entities in understanding requirements for submitting data 
through electronic means specified by AMS. In addition, AMS plans to 
beta test the electronic-submission technology before implementation, 
and all entities required to report will be encouraged to participate 
in the beta-testing program. Any feedback received during this outreach 
and testing period will be used to correct technical problems.
    Collecting the information will coincide with normal industry 
business practices. The timing and frequency of collecting information 
are intended to meet the needs of the program while minimizing the 
amount of work necessary to submit the required reports. The 
information to be collected by AMS, as proposed in this rule, is 
identical to the information currently collected by NASS. NASS 
currently allows manufacturers to submit information through a secure 
web-based

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application, by e-mail, or by fax. This proposed rule will require 
manufacturers to submit information only by electronic means specified 
by AMS. AMS would specify that each manufacturer submit the information 
using a secure Internet connection that includes a user name and 
password. The requirement that reporting entities submit information 
electronically is in accordance with the Act.
    The frequency of data collection will not change. Reporting 
entities are now required to report information to NASS by 12 noon on 
Wednesday. This proposed rule would require reporting entities to 
report the same information to AMS by 12 noon local time of the 
reporting entities on Tuesday. This change is necessary to allow AMS 
personnel time to review and compile data and to publish the 
information by 3 p.m. Eastern Time on Wednesday as required by the Act. 
If a Federal holiday falls on Monday through Wednesday of a particular 
week, the due date for report submission may be adjusted. Prior to the 
beginning of each calendar year, this rule proposes that AMS shall 
inform reporting entities of the times and dates that reports are due.
    Information collection requirements that are included in this 
proposal include:
(1) Dairy Products Sales, Cheddar Cheese
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 20 minutes per week for each report 
submitted.
    Respondents: Cheddar cheese manufacturers. Each reporting entity 
may report for a single cheddar cheese plant or it may report for more 
than one cheddar cheese plant, depending upon how the business is 
structured.
    Estimated Number of Respondents: 28.
    Estimated Total Annual Burden on Respondents: 485 hours.
(2) Dairy Products Sales, Butter
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 20 minutes per week for each report 
submitted.
    Respondents: Butter manufacturers. Each reporting entity may report 
for a single butter plant or it may report for more than one butter 
plant, depending upon how the business is structured.
    Estimated Number of Respondents: 20.
    Estimated Total Annual Burden on Respondents: 347 hours.
(3) Dairy Products Sales, Nonfat Dry Milk
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 20 minutes per week for each report 
submitted.
    Respondents: NFDM manufacturers. Each reporting entity may report 
for a single NFDM plant or it may report for more than one NFDM plant, 
depending upon how the business is structured.
    Estimated Number of Respondents: 26.
    Estimated Total Annual Burden on Respondents: 451 hours.
(4) Dairy Products Sales, Dry Whey
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 20 minutes per week for each report 
submitted.
    Respondents: Dry whey manufacturers. Each reporting entity may 
report for a single dry whey plant or it may report for more than one 
dry whey plant, depending upon how the business is structured.
    Estimated Number of Respondents: 21.
    Estimated Total Annual Burden on Respondents: 364 hours.
(5) Annual Validation Survey
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 20 minutes per year for each report 
submitted.
    Respondents: Dairy manufacturers. Each reporting entity may report 
for a single plant or it may report for more than one plant, depending 
upon how the business is structured.
    Estimated Number of Respondents: 180.
    Estimated Total Annual Burden on Respondents: 60 hours.
(6) Survey Follow-Up, Verification
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 5 minutes for each contact from 
AMS.
    Respondents: Dairy manufacturers. Each reporting entity may report 
for a single plant or it may report for more than one plant, depending 
upon how the business is structured.
    Estimated Number of Respondents: 7 per week.
    Estimated Total Annual Burden on Respondents: 30 hours.
    Copies of this information collection and related instructions can 
be obtained without charge from John Mengel, Chief Economist, 
john.mengel@ams.usda.gov.

Request for Public Comment Under the Paperwork Reduction Act

    Comments are invited on:
    (a) Whether the proposed collection of information is necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility;
    (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information including the validity of the 
methodology and assumptions used;
    (c) ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (d) ways to minimize the burden of the collection of information on 
those who are to respond.
    All responses to this notice will become a matter of public record 
and be summarized in the request for OMB approval.
    Except as otherwise directed by the Secretary of Agriculture or the 
U.S. Attorney General for enforcement purposes, no officer, employee, 
or agent of the United States shall provide the public any information, 
statistics, or documents obtained from or submitted by any person under 
the Act that does not ensure preservation of confidentiality regarding 
the identity of persons, including parties to contracts and proprietary 
business information. All report forms include a statement that 
individual reports are kept confidential.
    With respect to the application of the Privacy Act of 1974 (5 
U.S.C. 552a) to the maintenance of records required by the Act, the 
Dairy Products Sales survey population consists of dairy product 
manufacturers. Data collected by this survey relates to manufacturers' 
operations and transactions and not to those of individuals. Records 
maintained at business sites for verification of information that would 
be reported to AMS include contracts, agreements, receipts and other 
materials related to sales of specific dairy products. No records about 
individuals would be maintained by AMS for this survey, and AMS 
believes that none would be part of these maintained business papers.

Request for Public Comment on Proposals To Change to 7 CFR Part 1170

    This rule proposes that AMS be responsible for collection of sales 
data and reporting; that reporting entities be required to submit, by 
an electronic means specified by AMS, a report to AMS by Tuesday, 12 
noon local time of reporting entities (unless adjusted because of a 
Federal holiday and communicated to dairy product manufacturers by AMS 
before the beginning of the calendar year), of all

[[Page 34007]]

products sold as specified in Sec.  1170.8 during the 7 days ending 12 
midnight of the previous Saturday, local time of the plant or storage 
facility where the sales are made; and that not later than 3 p.m. 
Eastern Time on Wednesday of each week (unless adjusted because of a 
Federal holiday and publicly announced by AMS before the beginning of 
the calendar year), AMS shall publish aggregated information obtained 
from manufacturers or other persons of all products sold as specified 
in Sec.  1170.8. Conforming changes are proposed where necessary since 
data collection and publication responsibilities would be transferred 
from NASS to AMS. AMS specifically requests comments concerning changes 
proposed in this rule.
    AMS will review all timely comments received and will consider 
these comments in developing a final rule.

List of Subjects in 7 CFR Part 1170

    Dairy products, Reporting and recordkeeping requirements, Cheese, 
Butter, Whey, Nonfat dry milk.

    For the reasons set forth in the preamble, it is proposed that 7 
CFR part 1170 be amended as follows:

PART 1170--DAIRY PRODUCT MANDATORY REPORTING

    1. The authority citation for 7 CFR part 1170 is amended to read as 
follows:

    Authority: 7 U.S.C. 1637-1637b, as amended by Public Law 106-
532, 114 Stat. 2541; Public Law 107-171, 116 Stat. 207; and Public 
Law. 111-239, 124 Stat. 2501.

    2. Revise Sec.  1170.2 to read as follows:


Sec.  1170.2  Act.

    Act means the Agricultural Marketing Act of 1946, 7 U.S.C. 1621 et 
seq., as amended by the Dairy Market Enhancement Act of 2000, Public 
Law 106-532, 114 Stat. 2541; the Farm Security and Rural Investment Act 
of 2002, Public Law 107-171, 116 Stat. 207; and the Mandatory Price 
Reporting Act of 2010, Public Law 111-239, 124 Stat. 2501.

    3. Revise Sec.  1170.7 to read as follows:


Sec.  1170.7  Reporting requirements.

    (a) All dairy product manufacturers, with the exception of those 
who are exempt as described in Sec.  1170.9, shall submit a report 
weekly to the Agricultural Marketing Service (AMS) by Tuesday, 12 noon 
local time of reporting entities, on all products sold as specified in 
Sec.  1170.8 during the 7 days ending 12 midnight of the previous 
Saturday, local time of the plant or storage facility where the sales 
are made. If a Federal holiday falls on Monday through Wednesday of a 
particular week, the due date for report submission may be adjusted. 
Prior to the beginning of each calendar year, AMS shall release, to 
manufacturers that are required to report, the times and dates that 
reports are due. The report is to be submitted by electronic means 
specified by AMS and shall indicate the name, address, plant 
location(s), quantities sold, total sales dollars or dollars per pound 
for the applicable products, and the moisture content where applicable. 
Each sale shall be reported for the time period when the transaction is 
completed, i.e. the product is ``shipped out'' and title transfer 
occurs. Each sale shall be reported either f.o.b. plant if the product 
is ``shipped out'' from the plant or f.o.b. storage facility location 
if the product is ``shipped out'' from a storage facility. In 
calculating the total dollars received or dollars per pound, the 
reporting entity shall neither add transportation charges incurred at 
the time the product is ``shipped out'' or after the product is 
``shipped out'' nor deduct transportation charges incurred before the 
product is ``shipped out.'' In calculating the total dollars received 
or dollars per pound, the reporting entity shall not deduct brokerage 
fees or clearing charges paid by the manufacturer.
    (b) Manufacturers or other persons storing dairy products are 
required to report, on a monthly basis, stocks of dairy products (as 
defined in Sec.  1170.4) on hand, on the appropriate forms supplied by 
the National Agricultural Statistic Service. The report shall indicate 
the name, address, and stocks on hand at the end of the month for each 
storage location.

    4. Revise Sec.  1170.8 (a)(3)(ii) to read as follows:


Sec.  1170.8  Price reporting specifications.

* * * * *
    (a) * * *
    (3) * * *
    (ii) 500-pound barrels: Report weighted average moisture content of 
cheese sold. AMS will adjust price to a benchmark of 38.0 percent based 
on standard moisture adjustment formulas. Exclude cheese with moisture 
content exceeding 37.7 percent.
* * * * *
    5. Add Sec.  1170.17 to read as follows:


Sec.  1170.17  Publication of statistical information.

    Not later than 3 p.m. Eastern Time on the Wednesday of each week, 
AMS shall publish aggregated information obtained by manufacturers or 
other persons of all products sold as specified in Sec.  1170.8. If a 
Federal holiday falls on Monday through Wednesday of a particular week, 
the due date for report publication may be adjusted. The public shall 
be notified of report times prior to the beginning of the calendar 
year.

    Dated: June 7, 2011.
Ellen King,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-14481 Filed 6-9-11; 8:45 am]
BILLING CODE 3410-02-P