Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Salable Quantities and Allotment Percentages for the 2014-2015 Marketing Year, 26359-26365 [2014-10371]
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26359
Rules and Regulations
Federal Register
Vol. 79, No. 89
Thursday, May 8, 2014
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
Small businesses may request
information on complying with this
regulation by contacting Jeffrey Smutny,
Marketing Order and Agreement
Division, Fruit and Vegetable Program,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Telephone: (202) 720–
2491, Fax: (202) 720–8938, or Email:
Jeffrey.Smutny@ams.usda.gov.
This final
rule is issued under Marketing Order
No. 985 (7 CFR Part 985), as amended,
regulating the handling of spearmint oil
produced in the Far West (Washington,
Idaho, Oregon, and designated parts of
Nevada and Utah), hereinafter referred
to as the ‘‘order.’’ The order is effective
under the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601–674), hereinafter referred to
as the ‘‘Act.’’
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Orders
12866, 13563, and 13175.
This final rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. Under the order now in
effect, salable quantities and allotment
percentages may be established for
classes of spearmint oil produced in the
Far West. This rule establishes the
quantity of spearmint oil produced in
the Far West, by class, that handlers
may purchase from, or handle on behalf
of, producers during the 2014–2015
marketing year, which begins on June 1,
2014.
The Act provides that administrative
proceedings must be exhausted before
parties may file suit in court. Under
section 608c(15)(A) of the Act, any
handler subject to an order may file
with USDA a petition stating that the
order, any provision of the order, or any
obligation imposed in connection with
the order is not in accordance with law
and request a modification of the order
or to be exempted therefrom. A handler
is afforded the opportunity for a hearing
on the petition. After the hearing, USDA
would rule on the petition. The Act
provides that the district court of the
United States in any district in which
the handler is an inhabitant, or has his
or her principal place of business, has
jurisdiction to review USDA’s ruling on
the petition, provided an action is filed
not later than 20 days after the date of
the entry of the ruling.
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS–FV–13–0087; FV14–985–1
FR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Salable Quantities and
Allotment Percentages for the 2014–
2015 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
This final rule establishes the
quantity of Far West Scotch and Native
spearmint oil that handlers may
purchase from, or handle on behalf of,
producers during the 2014–2015
marketing year, which begins on June 1,
2014. The Far West includes
Washington, Idaho, Oregon, and
designated parts of Nevada and Utah.
This rule establishes salable quantities
and allotment percentages for Class 1
(Scotch) spearmint oil of 1,149,030
pounds and 55 percent, respectively,
and for Class 3 (Native) spearmint oil of
1,090,821 pounds and 46 percent,
respectively. The Spearmint Oil
Administrative Committee (Committee),
the entity responsible for local
administration of the marketing order
for spearmint oil produced in the Far
West, recommended these quantities.
DATES: Effective Date: This final rule
becomes effective June 1, 2014.
FOR FURTHER INFORMATION CONTACT:
Manuel Michel, Marketing Specialist, or
Gary Olson, Regional Director,
Northwest Marketing Field Office,
Marketing Order and Agreement
Division, Fruit and Vegetable Program,
AMS, USDA; Telephone: (503) 326–
2724, Fax: (503) 326–7440, or Email:
Manuel.Michel@ams.usda.gov or
GaryD.Olson@ams.usda.gov.
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SUMMARY:
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The Committee meets annually in the
fall to adopt a marketing policy for the
ensuing marketing year or years. In
determining such marketing policy, the
Committee considers a number of
factors, including, but not limited to, the
current and projected supply, estimated
future demand, production costs, and
producer prices for all classes of
spearmint oil. Input from spearmint oil
handlers and producers regarding
prospective marketing conditions for the
upcoming year is considered as well.
During the meeting, the Committee
recommends to USDA any volume
regulations deemed necessary to meet
market requirements and to establish
orderly marketing conditions for Far
West spearmint oil. If the Committee’s
marketing policy considerations
indicate a need for limiting the quantity
of any or all classes of spearmint oil
marketed, the Committee subsequently
recommends the establishment of a
salable quantity and allotment
percentage for such class or classes of
oil for the forthcoming marketing year.
The salable quantity represents the
total amount of each class of spearmint
oil that handlers may purchase from, or
handle on behalf of, producers during
the marketing year. The allotment
percentage is calculated by dividing the
salable quantity by the total allotment
base for each applicable class of
spearmint oil. The allotment percentage
is used to determine each producer’s
annual allotment, which is their
prorated share of the salable quantity.
Allotment base is each producer’s
quantified share of the spearmint oil
market based on a statistical
representation of past spearmint oil
production, with accommodation for
reasonable and normal adjustments to
such base as prescribed by the
Committee and approved by USDA.
Salable quantities are established at
levels intended to meet market
requirements and to establish orderly
marketing conditions. Committee
recommendations for volume controls
are made well in advance of the period
in which the regulations are to be
effective, thereby allowing producers
the chance to adjust their production
decisions accordingly.
Pursuant to authority in §§ 985.50,
985.51, and 985.52 of the order, the full
eight-member Committee met on
November 6, 2013, and recommended
salable quantities and allotment
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percentages for both classes of oil for the
2014–2015 marketing year. The
Committee unanimously recommended
the establishment of a salable quantity
and allotment percentage for Class 1
(Scotch) spearmint oil of 1,149,030
pounds and 55 percent, respectively.
The Committee, also with a unanimous
vote, recommended the establishment of
a salable quantity and allotment
percentage for Class 3 (Native)
spearmint oil of 1,090,821 pounds and
46 percent, respectively.
This final rule establishes the amount
of Scotch and Native spearmint oil that
handlers may purchase from, or handle
on behalf of, producers during the
2014–2015 marketing year, which
begins on June 1, 2014. Salable
quantities and allotment percentages
have been placed into effect each season
since the order’s inception in 1980.
Class 1 (Scotch) Spearmint Oil
As noted above, the Committee
unanimously recommended a salable
quantity of Scotch spearmint oil of
1,149,030 pounds and an allotment
percentage of 55 percent for the
upcoming 2014–2015 marketing year.
The Committee utilized 2014–2015 sales
estimates for Scotch spearmint oil, as
provided by several of the industry’s
handlers, as well as historical and
current Scotch spearmint oil production
and inventory statistics, to arrive at
these recommendations.
Trade demand for Far West Scotch
spearmint oil is expected to rise from
981,536 pounds in the 2013–2014
marketing year to 1,000,000 pounds in
2014–2015, if not more. Industry reports
indicate an increasing consumer
demand for mint-flavored products has
resulted in increasing demand for Far
West Scotch spearmint oil. Information
gathered from spearmint oil handlers
also supports this conclusion.
Production of Far West Scotch
spearmint oil increased from 636,626
pounds in 2012 to 1,057,377 pounds in
2013. Committee members attribute the
increase in production to both the low
level of reserves and growing demand.
Given that these factors are expected to
continue in the coming 2014–2015 year,
the Committee expects production to
increase to as much as 1,300,000
pounds in that marketing year.
The Committee also estimates that
there will be zero carry-in of Scotch
spearmint oil on June 1, 2014, the
beginning of the 2014–2015 marketing
year. This figure, which is the primary
measure of excess supply, down from an
estimated 16,022 pounds the previous
year, is below the minimum carry-in
quantity that the Committee considers
favorable. The demand during the 2012–
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2013 marketing year equaled total
supply, resulting in the zero carry-in.
The 2014–2015 salable quantity of
1,149,030 pounds recommended by the
Committee represents an increase of
75,631 pounds over the total supply
available during the previous marketing
year. Total supply for 2013–2014
amounted to 1,073,399 pounds
(1,057,377 pounds produced plus
16,022 pounds held in reserve).
The Committee estimates 2014–2015
demand for Scotch spearmint oil at
1,000,000 pounds. When considered in
conjunction with the forecast that there
will be zero available carry-in of Scotch
spearmint oil on June 1, 2014, the
recommended salable quantity of
1,149,030 pounds would satisfy market
demand and yield a carry-in of 149,030
pounds for the 2015–2016 marketing
year.
The Committee’s stated intent in the
use of marketing order volume control
regulations for Scotch spearmint oil is to
keep adequate supplies available to
meet market needs and establish orderly
marketing conditions. While the salable
quantity recommended for the
upcoming marketing year is less than
the salable quantity set for the previous
year (2013–2014 at 1,344,500 pounds),
the Committee felt that the
recommended limit would adequately
meet demand, as well as result in carryin for the following year. With that in
mind, the Committee developed its
recommendation of the Scotch
spearmint oil salable quantity and
allotment percentage for the 2014–2015
marketing year based on the information
discussed above, as well as the data
outlined below.
(A) Estimated carry-in of Scotch
spearmint oil on June 1, 2014—0
pounds. This figure is the difference
between the revised 2013–2014
marketing year total available supply of
1,073,399 pounds and the estimated
2013–2014 marketing year trade
demand of 1,073,399 pounds.
(B) Estimated trade demand of Scotch
spearmint oil for the 2014–2015
marketing year—1,000,000 pounds. This
figure is based on input from producers
at five Scotch spearmint oil production
area meetings held in late September
and early October 2013, as well as
estimates provided by handlers and
other meeting participants at the
November 6, 2013, meeting. The average
estimated trade demand provided at the
five production area meetings was
1,033,000 pounds, which is 25,750
pounds less than the average of trade
demand estimates submitted by
handlers. However, Far West Scotch
spearmint oil sales have averaged
819,824 pounds per year over the last
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five years. Given this information, the
Committee decided it was prudent to
anticipate the trade demand at
1,000,000 pounds. Should the initially
established volume control levels prove
insufficient to adequately supply the
market, the Committee has the authority
to recommend intra-seasonal increases
as needed.
(C) Salable quantity of Scotch
spearmint oil required from the 2014–
2015 marketing year production—
1,000,000 pounds. This figure is the
difference between the estimated 2014–
2015 marketing year trade demand
(1,000,000 pounds) and the estimated
carry-in on June 1, 2014 (0 pounds).
This figure represents the minimum
salable quantity that may be needed to
satisfy estimated demand for the coming
year with no carryover.
(D) Total estimated allotment base of
Scotch spearmint oil for the 2014–2015
marketing year—2,089,146 pounds. This
figure represents a one-percent increase
over the revised 2013–2014 total
allotment base. This figure is generally
revised each year on June 1 due to
producer base being lost as a result of
the bona fide effort production
provisions of § 985.53(e). The revision is
usually minimal.
(E) Computed Scotch spearmint oil
2014–2015 marketing year allotment
percentage—47.9 percent. This
percentage is computed by dividing the
minimum required salable quantity
(1,000,000 pounds) by the total
estimated allotment base (2,089,146
pounds).
(F) Recommended Scotch spearmint
oil 2014–2015 marketing year allotment
percentage—55 percent. This is the
Committee’s recommendation and is
based on the computed allotment
percentage (47.9 percent), the average of
the computed allotment percentage
figures from the five production area
meetings (46.2 percent), and input from
producers and handlers at the
November 6, 2013, meeting. The
recommended allotment percentage of
55 percent is also based on the
Committee’s determination that the
computed percentage (47.9 percent) may
not adequately supply the potential
2014–2015 Scotch spearmint oil market.
(G) Recommended Scotch spearmint
oil 2014–2015 marketing year salable
quantity—1,149,030 pounds. This figure
is the product of the recommended
allotment percentage (55 percent) and
the total estimated allotment base
(2,089,146 pounds).
(H) Estimated total available supply
of Scotch spearmint oil for the 2014–
2015 marketing year—1,149,030
pounds. This figure is the sum of the
2014–2015 recommended salable
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quantity (1,149,030 pounds) and the
estimated carry-in on June 1, 2014 (0
pounds).
Class 3 (Native) Spearmint Oil
At the November 6, 2013, meeting, the
Committee also recommended a 2014–
2015 Native spearmint oil salable
quantity of 1,090,821 pounds and an
allotment percentage of 46 percent. The
Committee utilized Native spearmint oil
sales estimates for 2014–2015 marketing
year, as provided by several of the
industry’s handlers, as well as historical
and current Native spearmint oil market
statistics to establish these thresholds.
These volume control levels represent a
decrease of 341,380 pounds and 15
percentage points over the previous
year’s initial salable quantity and
allotment percentage. Should these
levels prove insufficient to adequately
supply the market, the Committee has
the authority to recommend an intraseasonal increase, as it has done in the
past two marketing periods, if demand
rises beyond expectations.
The Committee also estimates that
there will be 461,260 pounds reserve of
Native spearmint oil on June 1, 2014.
This figure, which is the oil held in
reserve by producers, is down from an
industry peak of 606,942 pounds in
2011. Reserve levels of Native spearmint
oil are nearing the level that the
Committee believes is optimal for the
industry.
Committee statistics indicate that
demand for Far West Native spearmint
oil has been gradually increasing since
2009. Spearmint oil handlers, who
previously projected the 2013–2014
trade demand for Far West Native
spearmint oil to be in the range of
1,100,000 pounds to 1,400,000 pounds
(with an average of 1,300,000 pounds),
have projected trade demand for the
2014–2015 marketing period to be in the
range of 1,290,000 pounds to 1,400,000
pounds (with an average of 1,347,500).
Given the above, the Committee
estimates that approximately 1,300,000
pounds of Native spearmint oil may be
sold during the 2014–2015 marketing
year. When considered in conjunction
with the estimated carry-in of 307,297
pounds of Native spearmint oil on June
1, 2014, the recommended salable
quantity of 1,090,821 pounds results in
an estimated total available supply of
1,398,118 pounds of Native spearmint
oil during the 2014–2015 marketing
year. The Committee also estimates that
carry-in of Native spearmint oil at the
beginning of the 2015–2016 marketing
year will be approximately 98,118
pounds. Carry-in spearmint oil is
distinct from reserve pool spearmint oil
and represents the amount of salable
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spearmint oil produced, but not
marketed, in previous years and is
available for sale in the current year. It
is the primary measure of excess
spearmint oil supply under the order.
Reserve pool oil represents the amount
of excess oil held by the Committee, on
behalf of the producers, that is not
currently available to the market.
The Committee’s stated intent in the
use of marketing order volume control
regulations for Native spearmint oil is to
keep adequate supplies available to
meet market needs and establish orderly
marketing conditions. With that in
mind, the Committee developed its
recommendation of the Native
spearmint oil salable quantity and
allotment percentage for the 2014–2015
marketing year based on the information
discussed above, as well as the data
outlined below.
(A) Estimated carry-in of Native
spearmint oil on June 1, 2014—307,297
pounds. This figure is the difference
between the revised 2013–2014
marketing year total available supply of
1,577,297 pounds and the estimated
2013–2014 marketing year trade
demand of 1,270,000 pounds.
(B) Estimated trade demand of Native
spearmint oil for the 2014–2015
marketing year—1,300,000 pounds. This
estimate is established by the
Committee and is based on input from
producers at six Native spearmint oil
production area meetings held in late
September and early October 2013, as
well as estimates provided by handlers
and other meeting participants at the
November 6, 2013, meeting. The average
estimated trade demand provided at the
six production area meetings was
1,271,281 pounds, whereas the
handlers’ estimates ranged from
1,290,000 pounds to 1,400,000 pounds,
and averaged 1,347,500 pounds. The
average of Far West Native spearmint oil
sales over the last five years is 1,190,928
pounds. Should the initially established
volume control levels prove insufficient
to adequately supply the market, the
Committee has the authority to
recommend intra-seasonal increases as
needed.
(C) Salable quantity of Native
spearmint oil required from the 2014–
2015 marketing year production—
992,703 pounds. This figure is the
difference between the estimated 2014–
2015 marketing year trade demand
(1,300,000 pounds) and the estimated
carry-in on June 1, 2014 (307,297
pounds). This is the minimum amount
that the Committee believes is required
to meet the anticipated 2014–2015
Native spearmint oil trade demand.
(D) Total estimated allotment base of
Native spearmint oil for the 2014–2015
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marketing year—2,371,350 pounds. This
figure represents a one-percent increase
over the revised 2013–2014 total
allotment base. This figure is generally
revised each year on June 1 due to
producer base being lost as a result of
the bona fide effort production
provisions of § 985.53(e). The revision is
usually minimal.
(E) Computed Native spearmint oil
2014–2015 marketing year allotment
percentage—41.9 percent. This
percentage is computed by dividing the
required salable quantity (992,703
pounds) by the total estimated allotment
base (2,371,350 pounds).
(F) Recommended Native spearmint
oil 2014–2015 marketing year allotment
percentage—46 percent. This is the
Committee’s recommendation based on
the computed allotment percentage
(41.9 percent), the average of the
computed allotment percentage figures
from the six production area meetings
(39.9 percent), and input from
producers and handlers at the
November 6, 2013, meeting. The
recommended allotment percentage of
46 percent is also based on the
Committee’s determination that the
computed percentage (41.9 percent) may
not adequately supply the potential
2014–2015 Native spearmint oil market.
(G) Recommended Native spearmint
oil 2014–2015 marketing year salable
quantity—1,090,821 pounds. This figure
is the product of the recommended
allotment percentage (46 percent) and
the total estimated allotment base
(2,371,350 pounds).
(H) Estimated available supply of
Native spearmint oil for the 2014–2015
marketing year—1,398,118 pounds. This
figure is the sum of the 2014–2015
recommended salable quantity
(1,090,821 pounds) and the estimated
carry-in on June 1, 2014 (307,297
pounds).
The salable quantity is the total
quantity of each class of spearmint oil
that handlers may purchase from, or
handle on behalf of, producers during a
marketing year. Each producer is
allotted a share of the salable quantity
by applying the allotment percentage to
the producer’s allotment base for the
applicable class of spearmint oil.
The Scotch and Native spearmint oil
salable quantities and allotment
percentages of 1,149,030 pounds and 55
percent, and 1,090,821 pounds and 46
percent, respectively, are based on the
goal of establishing and maintaining
market stability. The Committee
anticipates that this goal will be
achieved by matching the available
supply of each class of Spearmint oil to
the estimated demand of such, thus
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avoiding extreme fluctuations in
inventories and prices.
The salable quantities are not
expected to cause a shortage of
spearmint oil supplies. Any
unanticipated or additional market
demand for spearmint oil which may
develop during the marketing year
could be satisfied by an intra-seasonal
increase in the salable quantity. The
order contains a provision for intraseasonal increases to allow the
Committee the flexibility to respond
quickly to changing market conditions.
Under volume regulation, producers
who produce more than their annual
allotments during the 2014–2015
marketing year may transfer such excess
spearmint oil to producers who have
produced less than their annual
allotment. In addition, up until
November 1, 2014, producers may place
excess spearmint oil production into the
reserve pool to be released in the future
in accordance with market needs.
This regulation is similar to
regulations issued in prior seasons. The
average initial allotment percentage for
the five most recent marketing years for
Scotch spearmint oil is 41.4 percent,
while the average initial allotment
percentage for the same five-year period
for Native spearmint oil is 50.2 percent.
Costs to producers and handlers
resulting from this rule are expected to
be offset by the benefits derived from a
stable market and improved returns. In
conjunction with the issuance of this
final rule, USDA has reviewed the
Committee’s marketing policy statement
for the 2014–2015 marketing year. The
Committee’s marketing policy
statement, a requirement whenever the
Committee recommends volume
regulation, fully meets the intent of
§ 985.50 of the order.
During its discussion of potential
2014–2015 salable quantities and
allotment percentages, the Committee
considered: (1) The estimated quantity
of salable oil of each class held by
producers and handlers; (2) the
estimated demand for each class of oil;
(3) the prospective production of each
class of oil; (4) the total of allotment
bases of each class of oil for the current
marketing year and the estimated total
of allotment bases of each class for the
ensuing marketing year; (5) the quantity
of reserve oil, by class, in storage; (6)
producer prices of oil, including prices
for each class of oil; and (7) general
market conditions for each class of oil,
including whether the estimated season
average price to producers is likely to
exceed parity. Conformity with USDA’s
‘‘Guidelines for Fruit, Vegetable, and
Specialty Crop Marketing Orders’’ has
also been reviewed and confirmed.
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The salable quantities and allotment
percentages established by this final
rule allow the anticipated market needs
to be fulfilled. In determining
anticipated market needs, the
Committee considered historical sales,
as well as changes and trends in
production and demand. This rule also
provides producers with information on
the amount of spearmint oil that should
be produced for the 2014–2015 season
in order to meet anticipated market
demand.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), the Agricultural
Marketing Service (AMS) has
considered the economic impact of this
action on small entities. Accordingly,
AMS has prepared this final regulatory
flexibility analysis.
The purpose of the RFA is to fit
regulatory actions to the scale of
businesses subject to such actions in
order that small businesses will not be
unduly or disproportionately burdened.
Marketing orders issued pursuant to the
Act, and the rules issued thereunder, are
unique in that they are brought about
through group action of essentially
small entities acting on their own
behalf.
There are eight spearmint oil handlers
subject to regulation under the order,
and approximately 39 producers of
Scotch spearmint oil and approximately
91 producers of Native spearmint oil in
the regulated production area. Small
agricultural service firms are defined by
the Small Business Administration
(SBA) as those having annual receipts of
less than $7,000,000, and small
agricultural producers are defined as
those having annual receipts of less than
$750,000 (13 CFR 121.201).
Based on the SBA’s definition of
small entities, the Committee estimates
that two of the eight handlers regulated
by the order could be considered small
entities. Most of the handlers are large
corporations involved in the
international trading of essential oils
and the products of essential oils. In
addition, the Committee estimates that
22 of the 39 Scotch spearmint oil
producers, and 29 of the 91 Native
spearmint oil producers could be
classified as small entities under the
SBA definition. Thus, a majority of
handlers and producers of Far West
spearmint oil may not be classified as
small entities.
The Far West spearmint oil industry
is characterized by producers whose
farming operations generally involve
more than one commodity and whose
income from farming operations is not
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exclusively dependent on the
production of spearmint oil. A typical
spearmint oil-producing operation has
enough acreage for rotation such that
the total acreage required to produce the
crop is about one-third spearmint and
two-thirds rotational crops. Thus, the
typical spearmint oil producer has to
have considerably more acreage than is
planted to spearmint during any given
season. Crop rotation is an essential
cultural practice in the production of
spearmint oil for purposes of weed,
insect, and disease control. To remain
economically viable with the added
costs associated with spearmint oil
production, a majority of spearmint oilproducing farms fall into the SBA
category of large businesses.
Small spearmint oil producers
generally are not as extensively
diversified as larger ones and as such
are more at risk from market
fluctuations. Such small producers
generally need to market their entire
annual allotment and do not have
income from other crops to cushion
seasons with poor spearmint oil returns.
Conversely, large diversified producers
have the potential to endure one or
more seasons of poor spearmint oil
markets because income from alternate
crops could support the operation for a
period of time. Being reasonably assured
of a stable price and market provides
small producing entities with the ability
to maintain proper cash flow and to
meet annual expenses. Thus, the market
and price stability provided by the order
potentially benefit small producers
more than such provisions benefit large
producers. Even though a majority of
handlers and producers of spearmint oil
may not be classified as small entities,
the volume control feature of this order
has small entity orientation.
This final rule establishes the quantity
of spearmint oil produced in the Far
West, by class, that handlers may
purchase from, or handle on behalf of,
producers during the 2014–2015
marketing year. The Committee
recommended this action to help
maintain stability in the spearmint oil
market by matching supply to estimated
demand, thereby avoiding extreme
fluctuations in supplies and prices.
Establishing quantities that may be
purchased or handled during the
marketing year through volume
regulations allows producers to plan
their spearmint planting and harvesting
to meet expected market needs. The
provisions of §§ 985.50, 985.51, and
985.52 of the order authorize this rule.
Instability in the spearmint oil subsector of the mint industry is much
more likely to originate on the supply
side than the demand side. Fluctuations
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in yield and acreage planted from
season-to-season tend to be larger than
fluctuations in the amount purchased by
handlers. Notwithstanding the recent
global recession and the overall negative
impact on demand for consumer goods
that utilize spearmint oil, demand for
spearmint oil tends to change slowly
from year to year.
Demand for spearmint oil at the farm
level is derived from retail demand for
spearmint-flavored products such as
chewing gum, toothpaste, and
mouthwash. The manufacturers of these
products are by far the largest users of
spearmint oil. However, spearmint
flavoring is generally a very minor
component of the products in which it
is used, so changes in the raw product
price have virtually no impact on retail
prices for those goods.
Spearmint oil production tends to be
cyclical. Years of relatively high
production, with demand remaining
reasonably stable, have led to periods in
which large producer stocks of unsold
spearmint oil have depressed producer
prices for a number of years. Shortages
and high prices may follow in
subsequent years, as producers respond
to price signals by cutting back
production.
The significant variability of the
spearmint oil market is illustrated by
the fact that the coefficient of variation
(a standard measure of variability;
‘‘CV’’) of Far West spearmint oil grower
prices for the period 1980–2012 (when
the marketing order was in effect) is
0.19, compared to 0.34 for the decade
prior to the promulgation of the order
(1970–79) and 0.48 for the prior 20-year
period (1960–79). This provides an
indication of the price stabilizing
impact of the marketing order.
Production in the shortest marketing
year was about 47 percent of the 34-year
average (1.92 million pounds from 1980
through 2013) and the largest crop was
approximately 160 percent of the 34year average. A key consequence is that,
in years of oversupply and low prices,
the season average producer price of
spearmint oil is below the average cost
of production (as measured by the
Washington State University
Cooperative Extension Service).
The wide fluctuations in supply and
prices that result from this cycle, which
was even more pronounced before the
creation of the order, can create
liquidity problems for some producers.
The order was designed to reduce the
price impacts of the cyclical swings in
production. However, producers have
been less able to weather these cycles in
recent years because of the increase in
production costs. While prices have
been relatively steady, the cost of
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production has increased to the extent
that plans to plant spearmint may be
postponed or changed indefinitely.
Producers are also enticed by the prices
of alternative crops and their lower cost
of production.
In an effort to stabilize prices, the
spearmint oil industry uses the volume
control mechanisms authorized under
the order. This authority allows the
Committee to recommend a salable
quantity and allotment percentage for
each class of oil for the upcoming
marketing year. The salable quantity for
each class of oil is the total volume of
oil that producers may sell during the
marketing year. The allotment
percentage for each class of spearmint
oil is derived by dividing the salable
quantity by the total allotment base.
Each producer is then issued an
annual allotment certificate, in pounds,
for the applicable class of oil, which is
calculated by multiplying the
producer’s allotment base by the
applicable allotment percentage. This is
the amount of oil of each applicable
class that the producer can sell.
By November 1 of each year, the
Committee identifies any oil that
individual producers have produced
above the volume specified on their
annual allotment certificates. This
excess oil is placed in a reserve pool
administered by the Committee.
There is a reserve pool for each class
of oil that may not be sold during the
current marketing year unless USDA
approves a Committee recommendation
to increase the salable quantity and
allotment percentage for a class of oil
and make a portion of the pool
available. However, limited quantities of
reserve oil are typically sold by one
producer to another producer to fill
deficiencies. A deficiency occurs when
on-farm production is less than a
producer’s allotment. In that case, a
producer’s own reserve oil can be sold
to fill that deficiency. Excess production
(higher than the producer’s allotment)
can be sold to fill other producers’
deficiencies. All of these provisions
need to be exercised prior to November
1 of each year.
In any given year, the total available
supply of spearmint oil is composed of
current production plus carryover
stocks from the previous crop. The
Committee seeks to maintain market
stability by balancing supply and
demand, and to close the marketing year
with an appropriate level of salable
spearmint oil to carry over into the
subsequent marketing year. If the
industry has production in excess of the
salable quantity, then the reserve pool
absorbs the surplus quantity of
spearmint oil, which goes unsold during
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26363
that year, unless the oil is needed for
unanticipated sales.
Under its provisions, the order may
attempt to stabilize prices by (1) limiting
supply and establishing reserves in high
production years, thus minimizing the
price-depressing effect that excess
producer stocks have on unsold
spearmint oil, and (2) ensuring that
stocks are available in short supply
years when prices would otherwise
increase dramatically. The reserve pool
stocks, which are increased in large
production years, are drawn down in
years where the crop is short.
An econometric model was used to
assess the impact that volume control
has on the prices producers receive for
their commodity. Without volume
control, spearmint oil markets would
likely be over-supplied. This could
result in low producer prices and a large
volume of oil stored and carried over to
the next crop year. The model estimates
how much lower producer prices would
likely be in the absence of volume
controls.
The Committee estimated trade
demand for the 2014–2015 marketing
year for both classes of oil at 2,300,000
pounds and that the expected combined
salable carry-in on June 1, 2014, will be
307,297 pounds. This results in a
combined required salable quantity of
1,992,703 pounds. With volume control,
sales by producers for the 2014–2015
marketing year would be limited to
2,239,851 pounds (the salable quantity
for both classes of spearmint oil).
The allotment percentages, upon
which 2014–2015 producer allotments
are based, are 55 percent for Scotch and
46 percent for Native. Without volume
controls, producers would not be
limited to these allotment levels, and
could produce and sell additional
spearmint. The econometric model
estimated a decline of about $1.90 in the
season average producer price per
pound (from both classes of spearmint
oil) resulting from the higher quantities
that would be produced and marketed
without volume control. The surplus
situation for the spearmint oil market
that would exist without volume
controls in 2014–2015 also would likely
dampen prospects for improved
producer prices in future years because
of the buildup in stocks.
The use of volume control allows the
industry to fully supply spearmint oil
markets while avoiding the negative
consequences of over-supplying these
markets. The use of volume control is
believed to have little or no effect on
consumer prices of products containing
spearmint oil and will not result in
fewer retail sales of such products.
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The Committee discussed alternatives
to the recommendations contained in
this rule for both classes of spearmint
oil. The Committee discussed and
rejected the idea of recommending that
there not be any volume regulation for
both classes of spearmint oil because of
the severe price-depressing effects that
may occur without volume control.
After computing the initial 47.9
percent Scotch spearmint oil allotment
percentage, the Committee considered
various alternative levels of volume
control for Scotch spearmint oil. Even
with the moderately optimistic
marketing conditions, there was
consensus from the Committee that the
Scotch spearmint oil allotment
percentage for 2014–2015 should be less
than the percentage established for the
2013–2014 marketing year (65 percent).
After considerable discussion, the eightmember committee unanimously
determined that 1,149,030 pounds and
55 percent would be the most effective
Scotch spearmint oil salable quantity
and allotment percentage, respectively,
for the 2014–2015 marketing year.
The Committee was also able to reach
a consensus regarding the level of
volume control for Native spearmint oil.
After first determining the computed
allotment percentage at 41.9 percent, the
Committee unanimously recommended
1,090,821 pounds and 46 percent for the
effective Native spearmint oil salable
quantity and allotment percentage,
respectively, for the 2014–2015
marketing year.
As noted earlier, the Committee’s
recommendation to establish salable
quantities and allotment percentages for
both classes of spearmint oil was made
after careful consideration of all
available information including: (1) The
estimated quantity of salable oil of each
class held by producers and handlers;
(2) the estimated demand for each class
of oil; (3) the prospective production of
each class of oil; (4) the total of
allotment bases of each class of oil for
the current marketing year and the
estimated total of allotment bases of
each class for the ensuing marketing
year; (5) the quantity of reserve oil, by
class, in storage; (6) producer prices of
oil, including prices for each class of oil;
and (7) general market conditions for
each class of oil, including whether the
estimated season average price to
producers is likely to exceed parity.
Based on its review, the Committee
determined that the salable quantity and
allotment percentage levels
recommended will achieve the
objectives sought.
Without any regulations in effect, the
Committee believes the industry could
return to the pronounced cyclical price
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patterns that occurred prior to the order
and that prices in 2014–2015 could
decline substantially below current
levels.
According to the Committee, the
recommended salable quantities and
allotment percentages are expected to
facilitate the goal of establishing orderly
marketing conditions for Far West
spearmint oil.
As previously stated, annual salable
quantities and allotment percentages
have been issued for both classes of
spearmint oil since the order’s
inception.
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
Chapter 35), the order’s information
collection requirements have been
previously approved by the Office of
Management and Budget (OMB) and
assigned OMB No. 0581–0178,
Vegetable and Specialty Crops. No
changes in those requirements as a
result of this action are necessary.
Should any changes become necessary,
they would be submitted to OMB for
approval.
This final rule establishes the salable
quantities and allotment percentages for
Class 1 (Scotch) spearmint oil and Class
3 (Native) spearmint oil produced in the
Far West during the 2014–2015
marketing year. Accordingly, this final
rule will not impose any additional
reporting or recordkeeping requirements
on either small or large spearmint oil
producers or handlers. As with all
Federal marketing order programs,
reports and forms are periodically
reviewed to reduce information
requirements and duplication by
industry and public sector agencies.
As noted in the initial regulatory
flexibility analysis, USDA has not
identified any relevant Federal rules
that duplicate, overlap or conflict with
this final rule.
AMS 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.
In addition, the Committee’s meeting
was widely publicized throughout the
spearmint oil industry and all interested
persons were invited to attend the
meeting and participate in Committee
deliberations on all issues. Like all
Committee meetings, the November 6,
2013, meeting was a public meeting and
all entities, both large and small, were
able to express views on this issue.
A proposed rule concerning this
action was published in the Federal
Register on March 14, 2014 (79 FR
14441). A copy of the rule was provided
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Fmt 4700
Sfmt 4700
to Committee staff, who in turn made it
available to all Far West spearmint oil
producers, handlers, and interested
persons. Finally, the rule was made
available through the Internet by USDA
and the Office of the Federal Register. A
15-day comment period ending March
31, 2014, was provided to allow
interested persons to respond to the
proposal. No comments were received.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
MarketingOrdersSmallBusinessGuide.
Any questions about the compliance
guide should be sent to Jeffrey Smutny
at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant
matter presented, including the
information and recommendation
submitted by the Committee and other
available information, it is hereby found
that this rule, as hereinafter set forth,
will tend to effectuate the declared
policy of the Act.
It is further found that good cause
exists for not postponing the effective
date of this rule until 30 days after
publication in the Federal Register (5
U.S.C. 553) because the 2014–2015
marketing year starts on June 1, 2014,
and handlers will need to begin
purchasing the spearmint oil allotted
under this rulemaking. Further,
handlers are aware of this rule, which
was recommended at a public meeting.
Finally, a 15-day comment period was
provided for in the proposed rule.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats,
Reporting and recordkeeping
requirements, Spearmint oil.
For the reasons set forth in the
preamble, 7 CFR Part 985 is amended as
follows:
PART 985—MARKETING ORDER
REGULATING THE HANDLING OF
SPEARMINT OIL PRODUCED IN THE
FAR WEST
1. The authority citation for 7 CFR
Part 985 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
2. A new § 985.233 is added to read
as follows:
■
Note: This section will not appear in the
Code of Federal Regulations.
§ 985.233 Salable quantities and allotment
percentages—2014–2015 marketing year.
The salable quantity and allotment
percentage for each class of spearmint
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Federal Register / Vol. 79, No. 89 / Thursday, May 8, 2014 / Rules and Regulations
oil during the marketing year beginning
on June 1, 2014, shall be as follows:
(a) Class 1 (Scotch) oil—a salable
quantity of 1,149,030 pounds and an
allotment percentage of 55 percent.
(b) Class 3 (Native) oil—a salable
quantity of 1,090,821 pounds and an
allotment percentage of 46 percent.
Dated: May 1, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural
Marketing Service.
Final Rule Correction
Accordingly, pursuant to the
authority delegated to me, in the
Federal Register of March 4, 2014 (79
FR 12050) FR Doc. 2014–04447, the
geographic coordinates in the regulatory
text on page 12051, column 2, line 9, is
corrected as follows:
§ 71.1
[Amended]
AGL MN D St. Paul, MN [Corrected]
Remove (Lat. 44°51″2605′ N.,) and add in
its place (Lat. 44°51′26″ N., 93°01′58″ W.)
[FR Doc. 2014–10371 Filed 5–7–14; 8:45 am]
BILLING CODE P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
Issued in Fort Worth, Texas, on April 11,
2014.
Kent M. Wheeler,
Manager, Operations Support Group, ATO
Central Service Center.
[FR Doc. 2014–09881 Filed 5–7–14; 8:45 am]
BILLING CODE 4910–13–P
14 CFR Part 71
[Docket No. FAA–2013–0954; Airspace
Docket No. 13–AGL–35]
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
Amendment of Class D Airspace; St.
Paul, MN
31 CFR Part 589
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule, correction.
AGENCY:
Ukraine-Related Sanctions Regulations
This action amends a
typographical error in the geographic
coordinates of South St. Paul Municipal
Airport-Richard E. Fleming Field in a
final rule technical amendment
published in the Federal Register of
March 4, 2014, that amends Class D
airspace in the St. Paul, MN, area.
DATES: Effective date: 0901 UTC, May
29, 2014. The Director of the Federal
Register approves this incorporation by
reference action under 1 CFR Part 51,
subject to the annual revision of FAA
Order 7400.9 and publication of
conforming amendments.
FOR FURTHER INFORMATION CONTACT:
Scott Enander, Central Service Center,
Operations Support Group, Federal
Aviation Administration, Southwest
Region, 2601 Meacham Blvd., Fort
Worth, TX 76137; telephone 817–321–
7716.
SUMMARY:
SUPPLEMENTARY INFORMATION:
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History
On March 4, 2014, a final rule
technical amendment was published in
the Federal Register amending Class D
airspace in St. Paul, MN (79 FR 12050,
Docket No. FAA–2013–0954).
Subsequent to publication, the FAA
found a typographical error in the
geographic coordinates for South St.
Paul Municipal Airport-Richard E.
Fleming Field. This action corrects that
error.
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Jkt 232001
Office of Foreign Assets
Control, Treasury.
ACTION: Final rule.
AGENCY:
The Department of the
Treasury’s Office of Foreign Assets
Control (‘‘OFAC’’) is issuing regulations
to implement Executive Order 13660 of
March 6, 2014 (‘‘Blocking Property of
Certain Persons Contributing to the
Situation in Ukraine’’), Executive Order
13661 of March 17, 2014 (‘‘Blocking
Property of Additional Persons
Contributing to the Situation in
Ukraine’’), and Executive Order 13662
of March 20, 2014 (‘‘Blocking Property
of Additional Persons Contributing to
the Situation in Ukraine’’). OFAC
intends to supplement this part 589
with a more comprehensive set of
regulations, which may include
additional interpretive and definitional
guidance and additional general
licenses and statements of licensing
policy.
DATES: Effective: May 8, 2014.
FOR FURTHER INFORMATION CONTACT:
Assistant Director for Licensing, tel.:
202/622–2480, Assistant Director for
Policy, tel.: 202/622–6746, Assistant
Director for Regulatory Affairs, tel.: 202/
622–4855, Assistant Director for
Sanctions Compliance & Evaluation,
tel.: 202/622–2490, OFAC, or Chief
Counsel (Foreign Assets Control), tel.:
202/622–2410, Office of the General
Counsel, Department of the Treasury
(not toll free numbers).
SUMMARY:
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26365
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
This document and additional
information concerning OFAC are
available from OFAC’s Web site
(www.treasury.gov/ofac). Certain general
information pertaining to OFAC’s
sanctions programs also is available via
facsimile through a 24-hour fax-ondemand service, tel.: 202/622–0077.
Background
On March 6, 2014, the President
issued Executive Order 13660 (79 FR
13493, March 10, 2014) (‘‘E.O. 13660’’),
invoking the authority of, inter alia, the
International Emergency Economic
Powers Act (50 U.S.C. 1701 et seq.)
(‘‘IEEPA’’) and the National
Emergencies Act (50 U.S.C. 1601 et seq.)
(‘‘NEA’’). On March 17, 2014, the
President issued Executive Order 13661
(79 FR 15535, March 16, 2014) (‘‘E.O.
13661’’), invoking the authority of, inter
alia, IEEPA and the NEA, to expand the
scope of the national emergency
declared in E.O. 13660 of March 6,
2014. On March 20, 2014, the President
issued Executive Order 13662 (79 FR
16169, March 24, 2014) (‘‘E.O. 13662’’),
invoking the authority of, inter alia,
IEEPA and the NEA, to expand the
scope of the national emergency
declared in E.O. 13660 and expanded in
scope in E.O. 13661.
The Department of the Treasury’s
Office of Foreign Assets Control
(‘‘OFAC’’) is issuing the Ukraine-Related
Sanctions Regulations, 31 CFR part 589
(the ‘‘Regulations’’), to implement E.O.
13660, E.O. 13661, and E.O. 13662,
pursuant to authorities delegated to the
Secretary of the Treasury in those
orders. A copy of E.O. 13660 appears in
Appendix A, a copy of E.O. 13661
appears in Appendix B, and a copy of
E.O. 13662 appears in Appendix C to
this part.
The Regulations are being published
in abbreviated form at this time for the
purpose of providing immediate
guidance to the public. OFAC intends to
supplement this part 589 with a more
comprehensive set of regulations, which
may include additional interpretive and
definitional guidance and additional
general licenses and statements of
licensing policy. The appendixes to the
Regulations will be removed when
OFAC supplements this part with a
more comprehensive set of regulations.
Public Participation
Because the Regulations involve a
foreign affairs function, the provisions
of Executive Order 12866 of September
30, 1993, and the Administrative
Procedure Act (5 U.S.C. 553) requiring
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]]>Agencies
[Federal Register Volume 79, Number 89 (Thursday, May 8, 2014)]
[Rules and Regulations]
[Pages 26359-26365]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10371]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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========================================================================
Federal Register / Vol. 79, No. 89 / Thursday, May 8, 2014 / Rules
and Regulations
[[Page 26359]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS-FV-13-0087; FV14-985-1 FR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Salable Quantities and Allotment Percentages for the
2014-2015 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule establishes the quantity of Far West Scotch
and Native spearmint oil that handlers may purchase from, or handle on
behalf of, producers during the 2014-2015 marketing year, which begins
on June 1, 2014. The Far West includes Washington, Idaho, Oregon, and
designated parts of Nevada and Utah. This rule establishes salable
quantities and allotment percentages for Class 1 (Scotch) spearmint oil
of 1,149,030 pounds and 55 percent, respectively, and for Class 3
(Native) spearmint oil of 1,090,821 pounds and 46 percent,
respectively. The Spearmint Oil Administrative Committee (Committee),
the entity responsible for local administration of the marketing order
for spearmint oil produced in the Far West, recommended these
quantities.
DATES: Effective Date: This final rule becomes effective June 1, 2014.
FOR FURTHER INFORMATION CONTACT: Manuel Michel, Marketing Specialist,
or Gary Olson, Regional Director, Northwest Marketing Field Office,
Marketing Order and Agreement Division, Fruit and Vegetable Program,
AMS, USDA; Telephone: (503) 326-2724, Fax: (503) 326-7440, or Email:
Manuel.Michel@ams.usda.gov or GaryD.Olson@ams.usda.gov.
Small businesses may request information on complying with this
regulation by contacting Jeffrey Smutny, Marketing Order and Agreement
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Order No. 985 (7 CFR Part 985), as amended, regulating the handling of
spearmint oil produced in the Far West (Washington, Idaho, Oregon, and
designated parts of Nevada and Utah), hereinafter referred to as the
``order.'' The order is effective under the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter
referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Orders 12866, 13563, and 13175.
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Under the order now in effect, salable quantities
and allotment percentages may be established for classes of spearmint
oil produced in the Far West. This rule establishes the quantity of
spearmint oil produced in the Far West, by class, that handlers may
purchase from, or handle on behalf of, producers during the 2014-2015
marketing year, which begins on June 1, 2014.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
The Committee meets annually in the fall to adopt a marketing
policy for the ensuing marketing year or years. In determining such
marketing policy, the Committee considers a number of factors,
including, but not limited to, the current and projected supply,
estimated future demand, production costs, and producer prices for all
classes of spearmint oil. Input from spearmint oil handlers and
producers regarding prospective marketing conditions for the upcoming
year is considered as well. During the meeting, the Committee
recommends to USDA any volume regulations deemed necessary to meet
market requirements and to establish orderly marketing conditions for
Far West spearmint oil. If the Committee's marketing policy
considerations indicate a need for limiting the quantity of any or all
classes of spearmint oil marketed, the Committee subsequently
recommends the establishment of a salable quantity and allotment
percentage for such class or classes of oil for the forthcoming
marketing year.
The salable quantity represents the total amount of each class of
spearmint oil that handlers may purchase from, or handle on behalf of,
producers during the marketing year. The allotment percentage is
calculated by dividing the salable quantity by the total allotment base
for each applicable class of spearmint oil. The allotment percentage is
used to determine each producer's annual allotment, which is their
prorated share of the salable quantity. Allotment base is each
producer's quantified share of the spearmint oil market based on a
statistical representation of past spearmint oil production, with
accommodation for reasonable and normal adjustments to such base as
prescribed by the Committee and approved by USDA. Salable quantities
are established at levels intended to meet market requirements and to
establish orderly marketing conditions. Committee recommendations for
volume controls are made well in advance of the period in which the
regulations are to be effective, thereby allowing producers the chance
to adjust their production decisions accordingly.
Pursuant to authority in Sec. Sec. 985.50, 985.51, and 985.52 of
the order, the full eight-member Committee met on November 6, 2013, and
recommended salable quantities and allotment
[[Page 26360]]
percentages for both classes of oil for the 2014-2015 marketing year.
The Committee unanimously recommended the establishment of a salable
quantity and allotment percentage for Class 1 (Scotch) spearmint oil of
1,149,030 pounds and 55 percent, respectively. The Committee, also with
a unanimous vote, recommended the establishment of a salable quantity
and allotment percentage for Class 3 (Native) spearmint oil of
1,090,821 pounds and 46 percent, respectively.
This final rule establishes the amount of Scotch and Native
spearmint oil that handlers may purchase from, or handle on behalf of,
producers during the 2014-2015 marketing year, which begins on June 1,
2014. Salable quantities and allotment percentages have been placed
into effect each season since the order's inception in 1980.
Class 1 (Scotch) Spearmint Oil
As noted above, the Committee unanimously recommended a salable
quantity of Scotch spearmint oil of 1,149,030 pounds and an allotment
percentage of 55 percent for the upcoming 2014-2015 marketing year. The
Committee utilized 2014-2015 sales estimates for Scotch spearmint oil,
as provided by several of the industry's handlers, as well as
historical and current Scotch spearmint oil production and inventory
statistics, to arrive at these recommendations.
Trade demand for Far West Scotch spearmint oil is expected to rise
from 981,536 pounds in the 2013-2014 marketing year to 1,000,000 pounds
in 2014-2015, if not more. Industry reports indicate an increasing
consumer demand for mint-flavored products has resulted in increasing
demand for Far West Scotch spearmint oil. Information gathered from
spearmint oil handlers also supports this conclusion.
Production of Far West Scotch spearmint oil increased from 636,626
pounds in 2012 to 1,057,377 pounds in 2013. Committee members attribute
the increase in production to both the low level of reserves and
growing demand. Given that these factors are expected to continue in
the coming 2014-2015 year, the Committee expects production to increase
to as much as 1,300,000 pounds in that marketing year.
The Committee also estimates that there will be zero carry-in of
Scotch spearmint oil on June 1, 2014, the beginning of the 2014-2015
marketing year. This figure, which is the primary measure of excess
supply, down from an estimated 16,022 pounds the previous year, is
below the minimum carry-in quantity that the Committee considers
favorable. The demand during the 2012-2013 marketing year equaled total
supply, resulting in the zero carry-in.
The 2014-2015 salable quantity of 1,149,030 pounds recommended by
the Committee represents an increase of 75,631 pounds over the total
supply available during the previous marketing year. Total supply for
2013-2014 amounted to 1,073,399 pounds (1,057,377 pounds produced plus
16,022 pounds held in reserve).
The Committee estimates 2014-2015 demand for Scotch spearmint oil
at 1,000,000 pounds. When considered in conjunction with the forecast
that there will be zero available carry-in of Scotch spearmint oil on
June 1, 2014, the recommended salable quantity of 1,149,030 pounds
would satisfy market demand and yield a carry-in of 149,030 pounds for
the 2015-2016 marketing year.
The Committee's stated intent in the use of marketing order volume
control regulations for Scotch spearmint oil is to keep adequate
supplies available to meet market needs and establish orderly marketing
conditions. While the salable quantity recommended for the upcoming
marketing year is less than the salable quantity set for the previous
year (2013-2014 at 1,344,500 pounds), the Committee felt that the
recommended limit would adequately meet demand, as well as result in
carry-in for the following year. With that in mind, the Committee
developed its recommendation of the Scotch spearmint oil salable
quantity and allotment percentage for the 2014-2015 marketing year
based on the information discussed above, as well as the data outlined
below.
(A) Estimated carry-in of Scotch spearmint oil on June 1, 2014--0
pounds. This figure is the difference between the revised 2013-2014
marketing year total available supply of 1,073,399 pounds and the
estimated 2013-2014 marketing year trade demand of 1,073,399 pounds.
(B) Estimated trade demand of Scotch spearmint oil for the 2014-
2015 marketing year--1,000,000 pounds. This figure is based on input
from producers at five Scotch spearmint oil production area meetings
held in late September and early October 2013, as well as estimates
provided by handlers and other meeting participants at the November 6,
2013, meeting. The average estimated trade demand provided at the five
production area meetings was 1,033,000 pounds, which is 25,750 pounds
less than the average of trade demand estimates submitted by handlers.
However, Far West Scotch spearmint oil sales have averaged 819,824
pounds per year over the last five years. Given this information, the
Committee decided it was prudent to anticipate the trade demand at
1,000,000 pounds. Should the initially established volume control
levels prove insufficient to adequately supply the market, the
Committee has the authority to recommend intra-seasonal increases as
needed.
(C) Salable quantity of Scotch spearmint oil required from the
2014-2015 marketing year production--1,000,000 pounds. This figure is
the difference between the estimated 2014-2015 marketing year trade
demand (1,000,000 pounds) and the estimated carry-in on June 1, 2014 (0
pounds). This figure represents the minimum salable quantity that may
be needed to satisfy estimated demand for the coming year with no
carryover.
(D) Total estimated allotment base of Scotch spearmint oil for the
2014-2015 marketing year--2,089,146 pounds. This figure represents a
one-percent increase over the revised 2013-2014 total allotment base.
This figure is generally revised each year on June 1 due to producer
base being lost as a result of the bona fide effort production
provisions of Sec. 985.53(e). The revision is usually minimal.
(E) Computed Scotch spearmint oil 2014-2015 marketing year
allotment percentage--47.9 percent. This percentage is computed by
dividing the minimum required salable quantity (1,000,000 pounds) by
the total estimated allotment base (2,089,146 pounds).
(F) Recommended Scotch spearmint oil 2014-2015 marketing year
allotment percentage--55 percent. This is the Committee's
recommendation and is based on the computed allotment percentage (47.9
percent), the average of the computed allotment percentage figures from
the five production area meetings (46.2 percent), and input from
producers and handlers at the November 6, 2013, meeting. The
recommended allotment percentage of 55 percent is also based on the
Committee's determination that the computed percentage (47.9 percent)
may not adequately supply the potential 2014-2015 Scotch spearmint oil
market.
(G) Recommended Scotch spearmint oil 2014-2015 marketing year
salable quantity--1,149,030 pounds. This figure is the product of the
recommended allotment percentage (55 percent) and the total estimated
allotment base (2,089,146 pounds).
(H) Estimated total available supply of Scotch spearmint oil for
the 2014-2015 marketing year--1,149,030 pounds. This figure is the sum
of the 2014-2015 recommended salable
[[Page 26361]]
quantity (1,149,030 pounds) and the estimated carry-in on June 1, 2014
(0 pounds).
Class 3 (Native) Spearmint Oil
At the November 6, 2013, meeting, the Committee also recommended a
2014-2015 Native spearmint oil salable quantity of 1,090,821 pounds and
an allotment percentage of 46 percent. The Committee utilized Native
spearmint oil sales estimates for 2014-2015 marketing year, as provided
by several of the industry's handlers, as well as historical and
current Native spearmint oil market statistics to establish these
thresholds. These volume control levels represent a decrease of 341,380
pounds and 15 percentage points over the previous year's initial
salable quantity and allotment percentage. Should these levels prove
insufficient to adequately supply the market, the Committee has the
authority to recommend an intra-seasonal increase, as it has done in
the past two marketing periods, if demand rises beyond expectations.
The Committee also estimates that there will be 461,260 pounds
reserve of Native spearmint oil on June 1, 2014. This figure, which is
the oil held in reserve by producers, is down from an industry peak of
606,942 pounds in 2011. Reserve levels of Native spearmint oil are
nearing the level that the Committee believes is optimal for the
industry.
Committee statistics indicate that demand for Far West Native
spearmint oil has been gradually increasing since 2009. Spearmint oil
handlers, who previously projected the 2013-2014 trade demand for Far
West Native spearmint oil to be in the range of 1,100,000 pounds to
1,400,000 pounds (with an average of 1,300,000 pounds), have projected
trade demand for the 2014-2015 marketing period to be in the range of
1,290,000 pounds to 1,400,000 pounds (with an average of 1,347,500).
Given the above, the Committee estimates that approximately
1,300,000 pounds of Native spearmint oil may be sold during the 2014-
2015 marketing year. When considered in conjunction with the estimated
carry-in of 307,297 pounds of Native spearmint oil on June 1, 2014, the
recommended salable quantity of 1,090,821 pounds results in an
estimated total available supply of 1,398,118 pounds of Native
spearmint oil during the 2014-2015 marketing year. The Committee also
estimates that carry-in of Native spearmint oil at the beginning of the
2015-2016 marketing year will be approximately 98,118 pounds. Carry-in
spearmint oil is distinct from reserve pool spearmint oil and
represents the amount of salable spearmint oil produced, but not
marketed, in previous years and is available for sale in the current
year. It is the primary measure of excess spearmint oil supply under
the order. Reserve pool oil represents the amount of excess oil held by
the Committee, on behalf of the producers, that is not currently
available to the market.
The Committee's stated intent in the use of marketing order volume
control regulations for Native spearmint oil is to keep adequate
supplies available to meet market needs and establish orderly marketing
conditions. With that in mind, the Committee developed its
recommendation of the Native spearmint oil salable quantity and
allotment percentage for the 2014-2015 marketing year based on the
information discussed above, as well as the data outlined below.
(A) Estimated carry-in of Native spearmint oil on June 1, 2014--
307,297 pounds. This figure is the difference between the revised 2013-
2014 marketing year total available supply of 1,577,297 pounds and the
estimated 2013-2014 marketing year trade demand of 1,270,000 pounds.
(B) Estimated trade demand of Native spearmint oil for the 2014-
2015 marketing year--1,300,000 pounds. This estimate is established by
the Committee and is based on input from producers at six Native
spearmint oil production area meetings held in late September and early
October 2013, as well as estimates provided by handlers and other
meeting participants at the November 6, 2013, meeting. The average
estimated trade demand provided at the six production area meetings was
1,271,281 pounds, whereas the handlers' estimates ranged from 1,290,000
pounds to 1,400,000 pounds, and averaged 1,347,500 pounds. The average
of Far West Native spearmint oil sales over the last five years is
1,190,928 pounds. Should the initially established volume control
levels prove insufficient to adequately supply the market, the
Committee has the authority to recommend intra-seasonal increases as
needed.
(C) Salable quantity of Native spearmint oil required from the
2014-2015 marketing year production--992,703 pounds. This figure is the
difference between the estimated 2014-2015 marketing year trade demand
(1,300,000 pounds) and the estimated carry-in on June 1, 2014 (307,297
pounds). This is the minimum amount that the Committee believes is
required to meet the anticipated 2014-2015 Native spearmint oil trade
demand.
(D) Total estimated allotment base of Native spearmint oil for the
2014-2015 marketing year--2,371,350 pounds. This figure represents a
one-percent increase over the revised 2013-2014 total allotment base.
This figure is generally revised each year on June 1 due to producer
base being lost as a result of the bona fide effort production
provisions of Sec. 985.53(e). The revision is usually minimal.
(E) Computed Native spearmint oil 2014-2015 marketing year
allotment percentage--41.9 percent. This percentage is computed by
dividing the required salable quantity (992,703 pounds) by the total
estimated allotment base (2,371,350 pounds).
(F) Recommended Native spearmint oil 2014-2015 marketing year
allotment percentage--46 percent. This is the Committee's
recommendation based on the computed allotment percentage (41.9
percent), the average of the computed allotment percentage figures from
the six production area meetings (39.9 percent), and input from
producers and handlers at the November 6, 2013, meeting. The
recommended allotment percentage of 46 percent is also based on the
Committee's determination that the computed percentage (41.9 percent)
may not adequately supply the potential 2014-2015 Native spearmint oil
market.
(G) Recommended Native spearmint oil 2014-2015 marketing year
salable quantity--1,090,821 pounds. This figure is the product of the
recommended allotment percentage (46 percent) and the total estimated
allotment base (2,371,350 pounds).
(H) Estimated available supply of Native spearmint oil for the
2014-2015 marketing year--1,398,118 pounds. This figure is the sum of
the 2014-2015 recommended salable quantity (1,090,821 pounds) and the
estimated carry-in on June 1, 2014 (307,297 pounds).
The salable quantity is the total quantity of each class of
spearmint oil that handlers may purchase from, or handle on behalf of,
producers during a marketing year. Each producer is allotted a share of
the salable quantity by applying the allotment percentage to the
producer's allotment base for the applicable class of spearmint oil.
The Scotch and Native spearmint oil salable quantities and
allotment percentages of 1,149,030 pounds and 55 percent, and 1,090,821
pounds and 46 percent, respectively, are based on the goal of
establishing and maintaining market stability. The Committee
anticipates that this goal will be achieved by matching the available
supply of each class of Spearmint oil to the estimated demand of such,
thus
[[Page 26362]]
avoiding extreme fluctuations in inventories and prices.
The salable quantities are not expected to cause a shortage of
spearmint oil supplies. Any unanticipated or additional market demand
for spearmint oil which may develop during the marketing year could be
satisfied by an intra-seasonal increase in the salable quantity. The
order contains a provision for intra-seasonal increases to allow the
Committee the flexibility to respond quickly to changing market
conditions.
Under volume regulation, producers who produce more than their
annual allotments during the 2014-2015 marketing year may transfer such
excess spearmint oil to producers who have produced less than their
annual allotment. In addition, up until November 1, 2014, producers may
place excess spearmint oil production into the reserve pool to be
released in the future in accordance with market needs.
This regulation is similar to regulations issued in prior seasons.
The average initial allotment percentage for the five most recent
marketing years for Scotch spearmint oil is 41.4 percent, while the
average initial allotment percentage for the same five-year period for
Native spearmint oil is 50.2 percent. Costs to producers and handlers
resulting from this rule are expected to be offset by the benefits
derived from a stable market and improved returns. In conjunction with
the issuance of this final rule, USDA has reviewed the Committee's
marketing policy statement for the 2014-2015 marketing year. The
Committee's marketing policy statement, a requirement whenever the
Committee recommends volume regulation, fully meets the intent of Sec.
985.50 of the order.
During its discussion of potential 2014-2015 salable quantities and
allotment percentages, the Committee considered: (1) The estimated
quantity of salable oil of each class held by producers and handlers;
(2) the estimated demand for each class of oil; (3) the prospective
production of each class of oil; (4) the total of allotment bases of
each class of oil for the current marketing year and the estimated
total of allotment bases of each class for the ensuing marketing year;
(5) the quantity of reserve oil, by class, in storage; (6) producer
prices of oil, including prices for each class of oil; and (7) general
market conditions for each class of oil, including whether the
estimated season average price to producers is likely to exceed parity.
Conformity with USDA's ``Guidelines for Fruit, Vegetable, and Specialty
Crop Marketing Orders'' has also been reviewed and confirmed.
The salable quantities and allotment percentages established by
this final rule allow the anticipated market needs to be fulfilled. In
determining anticipated market needs, the Committee considered
historical sales, as well as changes and trends in production and
demand. This rule also provides producers with information on the
amount of spearmint oil that should be produced for the 2014-2015
season in order to meet anticipated market demand.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS)
has considered the economic impact of this action on small entities.
Accordingly, AMS has prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf.
There are eight spearmint oil handlers subject to regulation under
the order, and approximately 39 producers of Scotch spearmint oil and
approximately 91 producers of Native spearmint oil in the regulated
production area. Small agricultural service firms are defined by the
Small Business Administration (SBA) as those having annual receipts of
less than $7,000,000, and small agricultural producers are defined as
those having annual receipts of less than $750,000 (13 CFR 121.201).
Based on the SBA's definition of small entities, the Committee
estimates that two of the eight handlers regulated by the order could
be considered small entities. Most of the handlers are large
corporations involved in the international trading of essential oils
and the products of essential oils. In addition, the Committee
estimates that 22 of the 39 Scotch spearmint oil producers, and 29 of
the 91 Native spearmint oil producers could be classified as small
entities under the SBA definition. Thus, a majority of handlers and
producers of Far West spearmint oil may not be classified as small
entities.
The Far West spearmint oil industry is characterized by producers
whose farming operations generally involve more than one commodity and
whose income from farming operations is not exclusively dependent on
the production of spearmint oil. A typical spearmint oil-producing
operation has enough acreage for rotation such that the total acreage
required to produce the crop is about one-third spearmint and two-
thirds rotational crops. Thus, the typical spearmint oil producer has
to have considerably more acreage than is planted to spearmint during
any given season. Crop rotation is an essential cultural practice in
the production of spearmint oil for purposes of weed, insect, and
disease control. To remain economically viable with the added costs
associated with spearmint oil production, a majority of spearmint oil-
producing farms fall into the SBA category of large businesses.
Small spearmint oil producers generally are not as extensively
diversified as larger ones and as such are more at risk from market
fluctuations. Such small producers generally need to market their
entire annual allotment and do not have income from other crops to
cushion seasons with poor spearmint oil returns. Conversely, large
diversified producers have the potential to endure one or more seasons
of poor spearmint oil markets because income from alternate crops could
support the operation for a period of time. Being reasonably assured of
a stable price and market provides small producing entities with the
ability to maintain proper cash flow and to meet annual expenses. Thus,
the market and price stability provided by the order potentially
benefit small producers more than such provisions benefit large
producers. Even though a majority of handlers and producers of
spearmint oil may not be classified as small entities, the volume
control feature of this order has small entity orientation.
This final rule establishes the quantity of spearmint oil produced
in the Far West, by class, that handlers may purchase from, or handle
on behalf of, producers during the 2014-2015 marketing year. The
Committee recommended this action to help maintain stability in the
spearmint oil market by matching supply to estimated demand, thereby
avoiding extreme fluctuations in supplies and prices. Establishing
quantities that may be purchased or handled during the marketing year
through volume regulations allows producers to plan their spearmint
planting and harvesting to meet expected market needs. The provisions
of Sec. Sec. 985.50, 985.51, and 985.52 of the order authorize this
rule.
Instability in the spearmint oil sub-sector of the mint industry is
much more likely to originate on the supply side than the demand side.
Fluctuations
[[Page 26363]]
in yield and acreage planted from season-to-season tend to be larger
than fluctuations in the amount purchased by handlers. Notwithstanding
the recent global recession and the overall negative impact on demand
for consumer goods that utilize spearmint oil, demand for spearmint oil
tends to change slowly from year to year.
Demand for spearmint oil at the farm level is derived from retail
demand for spearmint-flavored products such as chewing gum, toothpaste,
and mouthwash. The manufacturers of these products are by far the
largest users of spearmint oil. However, spearmint flavoring is
generally a very minor component of the products in which it is used,
so changes in the raw product price have virtually no impact on retail
prices for those goods.
Spearmint oil production tends to be cyclical. Years of relatively
high production, with demand remaining reasonably stable, have led to
periods in which large producer stocks of unsold spearmint oil have
depressed producer prices for a number of years. Shortages and high
prices may follow in subsequent years, as producers respond to price
signals by cutting back production.
The significant variability of the spearmint oil market is
illustrated by the fact that the coefficient of variation (a standard
measure of variability; ``CV'') of Far West spearmint oil grower prices
for the period 1980-2012 (when the marketing order was in effect) is
0.19, compared to 0.34 for the decade prior to the promulgation of the
order (1970-79) and 0.48 for the prior 20-year period (1960-79). This
provides an indication of the price stabilizing impact of the marketing
order.
Production in the shortest marketing year was about 47 percent of
the 34-year average (1.92 million pounds from 1980 through 2013) and
the largest crop was approximately 160 percent of the 34-year average.
A key consequence is that, in years of oversupply and low prices, the
season average producer price of spearmint oil is below the average
cost of production (as measured by the Washington State University
Cooperative Extension Service).
The wide fluctuations in supply and prices that result from this
cycle, which was even more pronounced before the creation of the order,
can create liquidity problems for some producers. The order was
designed to reduce the price impacts of the cyclical swings in
production. However, producers have been less able to weather these
cycles in recent years because of the increase in production costs.
While prices have been relatively steady, the cost of production has
increased to the extent that plans to plant spearmint may be postponed
or changed indefinitely. Producers are also enticed by the prices of
alternative crops and their lower cost of production.
In an effort to stabilize prices, the spearmint oil industry uses
the volume control mechanisms authorized under the order. This
authority allows the Committee to recommend a salable quantity and
allotment percentage for each class of oil for the upcoming marketing
year. The salable quantity for each class of oil is the total volume of
oil that producers may sell during the marketing year. The allotment
percentage for each class of spearmint oil is derived by dividing the
salable quantity by the total allotment base.
Each producer is then issued an annual allotment certificate, in
pounds, for the applicable class of oil, which is calculated by
multiplying the producer's allotment base by the applicable allotment
percentage. This is the amount of oil of each applicable class that the
producer can sell.
By November 1 of each year, the Committee identifies any oil that
individual producers have produced above the volume specified on their
annual allotment certificates. This excess oil is placed in a reserve
pool administered by the Committee.
There is a reserve pool for each class of oil that may not be sold
during the current marketing year unless USDA approves a Committee
recommendation to increase the salable quantity and allotment
percentage for a class of oil and make a portion of the pool available.
However, limited quantities of reserve oil are typically sold by one
producer to another producer to fill deficiencies. A deficiency occurs
when on-farm production is less than a producer's allotment. In that
case, a producer's own reserve oil can be sold to fill that deficiency.
Excess production (higher than the producer's allotment) can be sold to
fill other producers' deficiencies. All of these provisions need to be
exercised prior to November 1 of each year.
In any given year, the total available supply of spearmint oil is
composed of current production plus carryover stocks from the previous
crop. The Committee seeks to maintain market stability by balancing
supply and demand, and to close the marketing year with an appropriate
level of salable spearmint oil to carry over into the subsequent
marketing year. If the industry has production in excess of the salable
quantity, then the reserve pool absorbs the surplus quantity of
spearmint oil, which goes unsold during that year, unless the oil is
needed for unanticipated sales.
Under its provisions, the order may attempt to stabilize prices by
(1) limiting supply and establishing reserves in high production years,
thus minimizing the price-depressing effect that excess producer stocks
have on unsold spearmint oil, and (2) ensuring that stocks are
available in short supply years when prices would otherwise increase
dramatically. The reserve pool stocks, which are increased in large
production years, are drawn down in years where the crop is short.
An econometric model was used to assess the impact that volume
control has on the prices producers receive for their commodity.
Without volume control, spearmint oil markets would likely be over-
supplied. This could result in low producer prices and a large volume
of oil stored and carried over to the next crop year. The model
estimates how much lower producer prices would likely be in the absence
of volume controls.
The Committee estimated trade demand for the 2014-2015 marketing
year for both classes of oil at 2,300,000 pounds and that the expected
combined salable carry-in on June 1, 2014, will be 307,297 pounds. This
results in a combined required salable quantity of 1,992,703 pounds.
With volume control, sales by producers for the 2014-2015 marketing
year would be limited to 2,239,851 pounds (the salable quantity for
both classes of spearmint oil).
The allotment percentages, upon which 2014-2015 producer allotments
are based, are 55 percent for Scotch and 46 percent for Native. Without
volume controls, producers would not be limited to these allotment
levels, and could produce and sell additional spearmint. The
econometric model estimated a decline of about $1.90 in the season
average producer price per pound (from both classes of spearmint oil)
resulting from the higher quantities that would be produced and
marketed without volume control. The surplus situation for the
spearmint oil market that would exist without volume controls in 2014-
2015 also would likely dampen prospects for improved producer prices in
future years because of the buildup in stocks.
The use of volume control allows the industry to fully supply
spearmint oil markets while avoiding the negative consequences of over-
supplying these markets. The use of volume control is believed to have
little or no effect on consumer prices of products containing spearmint
oil and will not result in fewer retail sales of such products.
[[Page 26364]]
The Committee discussed alternatives to the recommendations
contained in this rule for both classes of spearmint oil. The Committee
discussed and rejected the idea of recommending that there not be any
volume regulation for both classes of spearmint oil because of the
severe price-depressing effects that may occur without volume control.
After computing the initial 47.9 percent Scotch spearmint oil
allotment percentage, the Committee considered various alternative
levels of volume control for Scotch spearmint oil. Even with the
moderately optimistic marketing conditions, there was consensus from
the Committee that the Scotch spearmint oil allotment percentage for
2014-2015 should be less than the percentage established for the 2013-
2014 marketing year (65 percent). After considerable discussion, the
eight-member committee unanimously determined that 1,149,030 pounds and
55 percent would be the most effective Scotch spearmint oil salable
quantity and allotment percentage, respectively, for the 2014-2015
marketing year.
The Committee was also able to reach a consensus regarding the
level of volume control for Native spearmint oil. After first
determining the computed allotment percentage at 41.9 percent, the
Committee unanimously recommended 1,090,821 pounds and 46 percent for
the effective Native spearmint oil salable quantity and allotment
percentage, respectively, for the 2014-2015 marketing year.
As noted earlier, the Committee's recommendation to establish
salable quantities and allotment percentages for both classes of
spearmint oil was made after careful consideration of all available
information including: (1) The estimated quantity of salable oil of
each class held by producers and handlers; (2) the estimated demand for
each class of oil; (3) the prospective production of each class of oil;
(4) the total of allotment bases of each class of oil for the current
marketing year and the estimated total of allotment bases of each class
for the ensuing marketing year; (5) the quantity of reserve oil, by
class, in storage; (6) producer prices of oil, including prices for
each class of oil; and (7) general market conditions for each class of
oil, including whether the estimated season average price to producers
is likely to exceed parity. Based on its review, the Committee
determined that the salable quantity and allotment percentage levels
recommended will achieve the objectives sought.
Without any regulations in effect, the Committee believes the
industry could return to the pronounced cyclical price patterns that
occurred prior to the order and that prices in 2014-2015 could decline
substantially below current levels.
According to the Committee, the recommended salable quantities and
allotment percentages are expected to facilitate the goal of
establishing orderly marketing conditions for Far West spearmint oil.
As previously stated, annual salable quantities and allotment
percentages have been issued for both classes of spearmint oil since
the order's inception.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the order's information collection requirements have been
previously approved by the Office of Management and Budget (OMB) and
assigned OMB No. 0581-0178, Vegetable and Specialty Crops. No changes
in those requirements as a result of this action are necessary. Should
any changes become necessary, they would be submitted to OMB for
approval.
This final rule establishes the salable quantities and allotment
percentages for Class 1 (Scotch) spearmint oil and Class 3 (Native)
spearmint oil produced in the Far West during the 2014-2015 marketing
year. Accordingly, this final rule will not impose any additional
reporting or recordkeeping requirements on either small or large
spearmint oil producers or handlers. As with all Federal marketing
order programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies.
As noted in the initial regulatory flexibility analysis, USDA has
not identified any relevant Federal rules that duplicate, overlap or
conflict with this final rule.
AMS 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.
In addition, the Committee's meeting was widely publicized
throughout the spearmint oil industry and all interested persons were
invited to attend the meeting and participate in Committee
deliberations on all issues. Like all Committee meetings, the November
6, 2013, meeting was a public meeting and all entities, both large and
small, were able to express views on this issue.
A proposed rule concerning this action was published in the Federal
Register on March 14, 2014 (79 FR 14441). A copy of the rule was
provided to Committee staff, who in turn made it available to all Far
West spearmint oil producers, handlers, and interested persons.
Finally, the rule was made available through the Internet by USDA and
the Office of the Federal Register. A 15-day comment period ending
March 31, 2014, was provided to allow interested persons to respond to
the proposal. No comments were received.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions
about the compliance guide should be sent to Jeffrey Smutny at the
previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant matter presented, including the
information and recommendation submitted by the Committee and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
It is further found that good cause exists for not postponing the
effective date of this rule until 30 days after publication in the
Federal Register (5 U.S.C. 553) because the 2014-2015 marketing year
starts on June 1, 2014, and handlers will need to begin purchasing the
spearmint oil allotted under this rulemaking. Further, handlers are
aware of this rule, which was recommended at a public meeting. Finally,
a 15-day comment period was provided for in the proposed rule.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements, Spearmint oil.
For the reasons set forth in the preamble, 7 CFR Part 985 is
amended as follows:
PART 985--MARKETING ORDER REGULATING THE HANDLING OF SPEARMINT OIL
PRODUCED IN THE FAR WEST
0
1. The authority citation for 7 CFR Part 985 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. A new Sec. 985.233 is added to read as follows:
Note: This section will not appear in the Code of Federal
Regulations.
Sec. 985.233 Salable quantities and allotment percentages--2014-2015
marketing year.
The salable quantity and allotment percentage for each class of
spearmint
[[Page 26365]]
oil during the marketing year beginning on June 1, 2014, shall be as
follows:
(a) Class 1 (Scotch) oil--a salable quantity of 1,149,030 pounds
and an allotment percentage of 55 percent.
(b) Class 3 (Native) oil--a salable quantity of 1,090,821 pounds
and an allotment percentage of 46 percent.
Dated: May 1, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-10371 Filed 5-7-14; 8:45 am]
BILLING CODE P
