Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Salable Quantities and Allotment Percentages for the 2015-2016 Marketing Year, 13502-13508 [2015-05681]
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13502
Proposed Rules
Federal Register
Vol. 80, No. 50
Monday, March 16, 2015
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS–FV–14–0096; FV15–985–1
PR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Salable Quantities and
Allotment Percentages for the 2015–
2016 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
implement a recommendation from the
Spearmint Oil Administrative
Committee (Committee) to establish 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 2015–2016
marketing year, which begins on June 1,
2015. The Far West includes the states
of Washington, Idaho, and Oregon, and
designated parts of Nevada and Utah.
This rule invites comments on the
establishment of salable quantities and
allotment percentages for Class 1
(Scotch) spearmint oil of 1,265,853
pounds and 60 percent, respectively,
and for Class 3 (Native) spearmint oil of
1,341,269 pounds and 56 percent,
respectively. The Committee locally
administers the marketing order for
spearmint oil produced in the Far West
and recommended these quantities to
help maintain stability in the spearmint
oil market.
DATES: Comments must be received by
March 31, 2015.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposal. Comments
must be sent to the Docket Clerk,
Marketing Order and Agreement
Division, Fruit and Vegetable Program,
AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington,
DC 20250–0237; Fax: (202) 720–8938; or
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SUMMARY:
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Internet: https://www.regulations.gov. All
comments should reference the
document number and the date and
page number of this issue of the Federal
Register and will be made available for
public inspection in the Office of the
Docket Clerk during regular business
hours, or can be viewed at: https://
www.regulations.gov. All comments
submitted in response to this proposal
will be included in the record and will
be made available to the public. Please
be advised that the identity of the
individuals or entities submitting the
comments will be made public on the
Internet at the address provided above.
FOR FURTHER INFORMATION CONTACT:
Barry Broadbent, 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:
Barry.Broadbent@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
proposal 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 proposed rule in
conformance with Executive Orders
12866, 13175, and 13563.
This proposed rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. This proposed rule is
not intended to have retroactive effect.
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 proposed rule would establish the
quantity of spearmint oil produced in
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the Far West, by class, which handlers
may purchase from, or handle on behalf
of, producers during the 2015–2016
marketing year, which begins on June 1,
2015.
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. 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 to
USDA the establishment of a salable
quantity and allotment percentage for
such class or classes of oil for the
forthcoming marketing year.
Recommendations for volume control
are intended to ensure that market
requirements for Far West spearmint oil
are satisfied and orderly marketing
conditions are maintained.
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 the percentage used to
calculate each producer’s prorated share
of the salable quantity. It is derived by
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dividing the salable quantity for each
class of spearmint oil by the total of all
producers’ allotment bases for the same
class of oil. Each producer’s annual
allotment of salable spearmint oil is
calculated by multiplying their
respective total allotment base by the
allotment percentage for each class of
spearmint oil. A producer’s allotment
base is their 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 and allotment
percentages are established at levels
intended to fulfill market requirements
and to maintain 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 5, 2014, and recommended
salable quantities and allotment
percentages for both classes of oil for the
2015–2016 marketing year. The
Committee unanimously recommended
the establishment of a salable quantity
and allotment percentage for Class 1
(Scotch) spearmint oil of 1,265,853
pounds and 60 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 1,341,269 pounds and
56 percent, respectively.
This action would set the amount of
Scotch and Native spearmint oil that
handlers may purchase from, or handle
on behalf of, producers during the
2015–2016 marketing year, which
begins on June 1, 2015. Salable
quantities and allotment percentages
have been placed into effect each season
since the order’s inception in 1980.
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Class 1 (Scotch) Spearmint Oil
As noted above, the Committee
unanimously recommended a salable
quantity of Scotch spearmint oil of
1,265,853 pounds and an allotment
percentage of 60 percent for the
upcoming 2015–2016 marketing year.
The Committee utilized 2015–2016 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
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and inventory statistics, to arrive at
these recommendations.
Trade demand for Far West Scotch
spearmint oil is expected to rise from
1,092,726 pounds in the 2014–2015
marketing year to 1,100,000 pounds in
2015–2016. Industry reports indicate
that the increased trade demand
estimate is the result of increased
consumer demand for mint flavored
products and low end-user inventories
that need to be replenished. Information
gathered from spearmint oil handlers
supports this conclusion.
Production of Far West Scotch
spearmint oil increased from 1,057,377
pounds in 2013 to 1,093,740 pounds in
2014. 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 2015–2016 year,
the Committee expects production to
increase to as much as 1,300,000
pounds for the forthcoming marketing
year.
The Committee also estimates that
there will be zero carry-in of Scotch
spearmint oil on June 1, 2015, the
beginning of the 2015–2016 marketing
year. This figure, which is the primary
measure of excess supply, is down from
7,064 carried-in the previous year. This
level of carry-in is below the minimum
carry-in quantity that the Committee
considers favorable. The demand for
Scotch spearmint oil during the
remainder of the 2014–2015 marketing
year is expected to equal or exceed the
remaining total supply, which will
likely cause the zero carry-in.
The 2015–2016 salable quantity of
1,265,853 pounds recommended by the
Committee represents an increase of
173,127 pounds over the total supply
available during the previous marketing
year. Total supply for 2014–2015
amounted to 1,092,726 pounds (7,064
carry-in, 989,643 pounds produced, and
96,019 pounds released from the
reserve).
The Committee estimates 2015–2016
demand for Scotch spearmint oil at
1,100,000 pounds. When considered in
conjunction with the forecast that there
will be zero available carry-in of Scotch
spearmint oil on June 1, 2015, the
recommended salable quantity of
1,265,853 pounds would satisfy market
demand and yield a carry-in of 165,853
pounds available at the beginning of
2016–2017 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 maintain orderly
marketing conditions. The salable
quantity recommended for the
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upcoming marketing year is more than
the salable quantity initially set for the
previous year of 1,149,030. The
Committee believes that the
recommended salable quantity would
adequately meet demand, as well as
result in a larger carry-in for the
following year. With that in mind, the
Committee developed its
recommendation for the proposed
Scotch spearmint oil salable quantity
and allotment percentage for the 2015–
2016 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, 2015—0
pounds. This figure is the difference
between the revised 2014–2015
marketing year total available supply of
1,092,726 pounds and the estimated
2014–2015 marketing year trade
demand of 1,092,726 pounds.
(B) Estimated trade demand of Scotch
spearmint oil for the 2015–2016
marketing year—1,100,000 pounds. This
figure is based on input from producers
at five Scotch spearmint oil production
area meetings held in late September
and early October 2014, as well as
estimates provided by handlers and
other meeting participants at the
November 5, 2014, meeting. The average
estimated trade demand derived from
the five production area meetings was
1,192,400 pounds, which is 42,400
pounds more than the average of trade
demand estimates submitted by
handlers. Far West Scotch spearmint oil
sales have averaged 979,520 pounds per
year over the last three years. Given this
information, the Committee decided it
was prudent to anticipate the trade
demand at 1,100,000 pounds. Should
the initially established volume control
levels prove insufficient to adequately
supply the market, the Committee has
the authority to recommend intraseasonal increases as needed.
(C) Salable quantity of Scotch
spearmint oil required from the 2015–
2016 marketing year production—
1,100,000 pounds. This figure is the
difference between the estimated 2015–
2016 marketing year trade demand
(1,100,000 pounds) and the estimated
carry-in on June 1, 2015 (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 2015–2016
marketing year—2,109,755 pounds. This
figure represents a one-percent increase
over the revised 2014–2015 total
allotment base. This figure is generally
revised each year on June 1 due to
producer base being lost because of the
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bona fide effort production provisions of
§ 985.53(e). The revision is usually
minimal.
(E) Computed Scotch spearmint oil
2015–2016 marketing year allotment
percentage—52.1 percent. This
percentage is computed by dividing the
minimum required salable quantity
(1,100,000 pounds) by the total
estimated allotment base (2,109,755
pounds).
(F) Recommended Scotch spearmint
oil 2015–2016 marketing year allotment
percentage—60 percent. This is the
Committee’s recommendation and is
based on the computed allotment
percentage (52.1 percent), the average of
the computed allotment percentage
figures from the five production area
meetings (56.5 percent), and input from
producers and handlers at the
November 5, 2014, meeting. The
recommended 60 percent allotment
percentage is also based on the
Committee’s belief that the computed
percentage (52.1 percent) may not
adequately supply the potential 2015–
2016 Scotch spearmint oil market.
(G) Recommended Scotch spearmint
oil 2015–2016 marketing year salable
quantity—1,265,853 pounds. This figure
is the product of the recommended
allotment percentage (60 percent) and
the total estimated allotment base
(2,109,755 pounds).
(H) Estimated total available supply
of Scotch spearmint oil for the 2015–
2016 marketing year—1,265,853
pounds. This figure is the sum of the
2015–2016 recommended salable
quantity (1,265,853 pounds) and the
estimated carry-in on June 1, 2015 (0
pounds).
Class 3 (Native) Spearmint Oil
At the November 5, 2014, meeting, the
Committee also recommended a 2015–
2016 Native spearmint oil salable
quantity of 1,341,269 pounds and an
allotment percentage of 56 percent. The
Committee utilized Native spearmint oil
sales estimates for 2015–2016 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.
The recommended volume control
levels represent an increase of 250,448
pounds and 10 percentage points over
the previous year’s initially established
salable quantity and allotment
percentage.
The Committee also estimates that
there will be 512,745 pounds of Native
spearmint oil in the reserve pool on
June 1, 2015. 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
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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 2014–2015
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
2015–2016 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 2015–2016 marketing
year. When considered in conjunction
with the estimated carry-in of 117,368
pounds of Native spearmint oil on June
1, 2015, the recommended salable
quantity of 1,341,269 pounds results in
an estimated total available supply of
1,458,637 pounds of Native spearmint
oil during the 2015–2016 marketing
year. Estimated carry-in of Native
spearmint oil at the beginning of the
2016–2017 marketing year would be
approximately 152,137 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 maintain orderly
marketing conditions. With that in
mind, the Committee developed its
recommendation for the proposed
Native spearmint oil salable quantity
and allotment percentage for the 2015–
2016 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, 2015—117,368
pounds. This figure is the difference
between the revised 2014–2015
marketing year total available supply of
1,458,368 pounds and the estimated
2014–2015 marketing year trade
demand of 1,341,000 pounds.
(B) Estimated trade demand of Native
spearmint oil for the 2015–2016
marketing year—1,306,500 pounds. This
estimate is established by the
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Committee and is based on input from
producers at six Native spearmint oil
production area meetings held in late
September and early October 2014, as
well as estimates provided by handlers
and other meeting participants at the
November 5, 2014, meeting. The average
estimated trade demand provided at the
six production area meetings was
1,330,167 pounds, whereas the
handlers’ estimates ranged from
1,250,000 pounds to 1,400,000 pounds,
and averaged 1,356,750 pounds. The
average of Far West Native spearmint oil
sales over the last three years is
1,306,492 pounds.
(C) Salable quantity of Native
spearmint oil required from the 2015–
2016 marketing year production—
1,189,132 pounds. This figure is the
difference between the estimated 2015–
2016 marketing year trade demand
(1,306,500 pounds) and the estimated
carry-in on June 1, 2015 (117,368
pounds). This is the minimum amount
that the Committee believes would be
required to meet the anticipated 2015–
2016 Native spearmint oil trade
demand.
(D) Total estimated allotment base of
Native spearmint oil for the 2015–2016
marketing year—2,395,124 pounds. This
figure represents a one-percent increase
over the revised 2014–2015 total
allotment base. This figure is generally
revised each year on June 1 due to
producer base being lost due to the bona
fide effort production provisions of
§ 985.53(e). The revision is usually
minimal.
(E) Computed Native spearmint oil
2015–2016 marketing year allotment
percentage—49.6 percent. This
percentage is computed by dividing the
required salable quantity (1,189,132) by
the total estimated allotment base
(2,395,124 pounds).
(F) Recommended Native spearmint
oil 2015–2016 marketing year allotment
percentage—56 percent. This is the
Committee’s recommendation based on
the computed allotment percentage
(49.6 percent), the average of the
computed allotment percentage figures
from the six production area meetings
(51.0 percent), and input from
producers and handlers at the
November 5, 2014, meeting. The
recommended 56 percent allotment
percentage is also based on the
Committee’s belief that the computed
percentage (49.6 percent) may not
adequately supply the potential 2015–
2016 Native spearmint oil market.
(G) Recommended Native spearmint
oil 2015–2016 marketing year salable
quantity—1,341,269 pounds. This figure
is the product of the recommended
allotment percentage (56 percent) and
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the total estimated allotment base
(2,395,124 pounds).
(H) Estimated available supply of
Native spearmint oil for the 2015–2016
marketing year—1,458,637 pounds. This
figure is the sum of the 2015–2016
recommended salable quantity
(1,341,269 pounds) and the estimated
carry-in on June 1, 2015 (117,368
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 Committee’s recommended
Scotch and Native spearmint oil salable
quantities and allotment percentages of
1,265,853 pounds and 60 percent, and
1,341,269 pounds and 56 percent,
respectively, are based on the goal of
maintaining market stability. The
Committee anticipates that this goal
would be achieved by matching the
available supply of each class of
Spearmint oil to the estimated demand
of such, thus avoiding extreme
fluctuations in inventories and prices.
The proposed 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 2015–2016
marketing year may transfer such excess
spearmint oil to producers who have
produced less than their annual
allotment. In addition, up until
December 1, 2015, producers may place
excess spearmint oil production into the
reserve pool to be released in the future
in accordance with market needs.
This proposed regulation, if adopted,
would be similar to regulations issued
in prior seasons. The average initial
allotment percentage for the five most
recent marketing years for Scotch
spearmint oil is 44.0 percent, while the
average initial allotment percentage for
the same five-year period for Native
spearmint oil is 48.8 percent.
Costs to producers and handlers
resulting from this rule are expected to
be offset by the benefits derived from a
stable market and increased returns. In
conjunction with the issuance of this
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proposed rule, USDA has reviewed the
Committee’s marketing policy statement
for the 2015–2016 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
2015–2016 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 establishment of these salable
quantities and allotment percentages
would allow for anticipated market
needs. 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 2015–2016 season in
order to meet anticipated market
demand.
Initial 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 initial 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 37 producers of
Scotch spearmint oil and approximately
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13505
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
11 of the 37 Scotch spearmint oil
producers, and 25 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 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 production of spearmint oil and
are not financially able to hold
spearmint oil for sale in future years. In
addition, small producers generally do
not have a large assortment of 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. That
being said being reasonably assured of
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a stable price and market provides all
producing entities with the ability to
maintain proper cash flow and to meet
annual expenses. The benefits for this
rule are expected to be equally available
to all producers and handlers regardless
of their size.
This proposed rule would establish
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 2015–2016
marketing year. The Committee
recommended this rule 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 coordinate their spearmint
oil production with the expected market
demand. Authority for this action is
provided in §§ 985.50, 985.51, and
985.52 of the order.
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
in yield and acreage planted from
season-to-season tend to be larger than
fluctuations in the amount purchased by
handlers. Historically, 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 1980–2013 (when
the marketing order was in effect) is
0.23, compared to 0.36 for the decade
prior to the promulgation of the order
(1970–79) and 0.49 for the prior 20-year
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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
production has increased to the extent
that plans to plant spearmint may be
postponed or changed indefinitely.
Producers may also be 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 market.
By December 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. A
reserve pool is maintained 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
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and make a portion of the pool
available.
Limited quantities of excess oil may
be sold by one producer to another
producer to fill production deficiencies
in a marketing year. A deficiency occurs
when on-farm production is less than a
producer’s allotment. When a producer
has a deficiency, the producer’s own
reserve oil can be utilized to fill that
deficiency, or excess production
(production of spearmint oil in excess of
the producer’s annual allotment) from
another producer may also be secured to
fill the deficiency. All of these
provisions need to be exercised prior to
December 1 of each year.
In any given year, the total available
supply of spearmint oil is composed of
current production plus salable
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. Reserve pool
stocks, which increase in high
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 2015–2016 marketing
year for both classes of oil at 2,406,500
pounds, and that the expected
combined salable carry-in will be
117,368 pounds. This results in a
combined required salable quantity of
2,289,132 pounds. With volume control,
sales by producers for the 2015–2016
marketing year would be limited to
2,607,122 pounds (the recommended
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salable quantity for both classes of
spearmint oil).
The recommended allotment
percentages, upon which 2015–2016
producer allotments are based, are 60
percent for Scotch and 56 percent for
Native. Without volume controls,
producers would not be limited to these
allotment levels, and could produce and
sell an unrestricted quantity of
spearmint oil. The econometric model
estimated a decline of about $1.30 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 2015–2016 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 would not result in
fewer retail sales of such products.
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
would occur without volume control.
The Committee also considered salable
quantities and allotment percentages
that were above and below the levels
that were ultimately recommended.
After computing the initial 52.1
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 2015–2016 should be
more than the percentage initially
established for the 2014–2015 marketing
year (55 percent). After considerable
discussion, the eight-member committee
unanimously determined that 1,265,853
pounds and 60 percent would be the
most effective Scotch spearmint oil
salable quantity and allotment
percentage, respectively, for the 2015–
2016 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
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allotment percentage at 49.6 percent, the
Committee unanimously recommended
1,341,269 pounds and 56 percent for the
effective Native spearmint oil salable
quantity and allotment percentage,
respectively, for the 2015–2016
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
believes that the salable quantities and
allotment percentages recommended
would achieve the objectives sought.
The Committee also believes that,
should there be no volume regulation in
effect for the upcoming marketing year,
the Far West spearmint oil industry
would return to the pronounced cyclical
price patterns that occurred prior to the
promulgation of the order. As
previously stated, annual salable
quantities and allotment percentages
have been issued for both classes of
spearmint oil since the order’s
inception. The salable quantities and
allotment percentages proposed herein
are expected to facilitate the goal of
maintaining orderly marketing
conditions for Far West spearmint oil
for the 2015–2016 and future marketing
years.
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 proposed rule would establish
the salable quantities and allotment
percentages for Class 1 (Scotch)
spearmint oil and Class 3 (Native)
spearmint oil produced in the Far West
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13507
during the 2015–2016 marketing year.
Accordingly, this action would 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.
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.
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this proposed rule.
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 5, 2014,
meeting was a public meeting and all
entities, both large and small, were able
to express views on this issue. Finally,
interested persons are invited to submit
comments on this proposed rule,
including the regulatory and
informational impacts of this action on
small businesses.
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.
A 15-day comment period is provided
to allow interested persons to respond
to this proposed rule. Fifteen days is
deemed appropriate because: (1) The
2015–2016 fiscal period begins on June
1, 2015, and a final determination on
the salable quantities and allotment
percentages should be made prior to
handlers purchasing from, or handling
on behalf of, producers of any oil for the
ensuing marketing year; and (2)
handlers are aware of this action, which
was recommended by the Committee at
a public meeting and is similar to other
salable quantities and allotment
percentages issued in past years.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats,
Reporting and recordkeeping
requirements, Spearmint oil.
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For the reasons set forth in the
preamble, 7 CFR part 985 is proposed to
be 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.
I. Background
2. A new § 985.234 is added to read
as follows:
■
§ 985.234 Salable quantities and allotment
percentages—2015–2016 marketing year.
The salable quantity and allotment
percentage for each class of spearmint
oil during the marketing year beginning
on June 1, 2015, shall be as follows:
(a) Class 1 (Scotch) oil—a salable
quantity of 1,265,853 pounds and an
allotment percentage of 60 percent.
(b) Class 3 (Native) oil—a salable
quantity of 1,341,269 pounds and an
allotment percentage of 56 percent.
Dated: March 9, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2015–05681 Filed 3–13–15; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
21 CFR Part 176
[Docket No. FDA–2015–F–0714]
Natural Resources Defense Council et
al.; Filing of Food Additive Petition
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice of petition.
The Food and Drug
Administration (FDA or we) is
announcing that we have filed a
petition, submitted by the Natural
Resources Defense Council, the Center
for Food Safety, the Breast Cancer Fund,
the Center for Environmental Health,
Clean Water Action, the Center for
Science in the Public Interest,
Children’s Environmental Health
Network, Environmental Working
Group, and Improving Kids’
Environment, proposing that we amend
our food additive regulation to no longer
provide for the use of three specific
perfluoroalkyl ethyl containing foodcontact substances (FCSs) as oil and
water repellants for paper and
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paperboard for use in contact with
aqueous and fatty foods.
DATES: The food additive petition was
filed on January 7, 2015.
FOR FURTHER INFORMATION CONTACT: Paul
Honigfort, Center for Food Safety and
Applied Nutrition (HFS–275), Food and
Drug Administration, 5100 Paint Branch
Pkwy., College Park, MD 20740–3835,
240–402–1206.
SUPPLEMENTARY INFORMATION:
Under section 409(b)(5) of the Federal
Food, Drug, and Cosmetic Act (the
FD&C Act) (21 U.S.C. 348(b)(5)), we are
giving notice that we have filed a food
additive petition (FAP 4B4809),
submitted by the Natural Resources
Defense Council, 1152 15th St. NW.,
Suite 300, Washington, DC 20005; the
Center for Food Safety, 303 Sacramento
St., Second Floor, San Francisco, CA
94111; Clean Water Action, 144 Eye St.
NW., Suite 400, Washington, DC 20005;
the Center for Science in the Public
Interest, 1220 L St. NW., Suite 300,
Washington, DC 20005; Children’s
Environmental Health Network, 110
Maryland Ave. NE., Suite 402,
Washington, DC 20002; the Breast
Cancer Fund, 1388 Sutter St., Suite 400,
San Francisco, CA 94109–5400; the
Center for Environmental Health, 2201
Broadway, Suite 302, Oakland, CA,
94612; Environmental Working Group,
1436 U St. NW., Suite 100, Washington,
DC 20009; and Improving Kids’
Environment, 1915 West 18th St.,
Indianapolis, IN 46202. The petition
proposes that we amend § 176.170 (21
CFR 176.170) to no longer provide for
the use of three perfluoroalkyl ethyl
containing food-contact substances
(FCSs) as oil and water repellants for
paper and paperboard for use in contact
with aqueous and fatty foods. The three
FCSs which are the subjects of this
petition are as follows:
1. Diethanolamine salts of mono- and
bis (1H,1H,2H,2H perfluoroalkyl)
phosphates where the alkyl group is
even-numbered in the range C8-C18 and
the salts have a fluorine content of 52.4
percent to 54.4 percent as determined
on a solids basis;
2. Pentanoic acid, 4,4-bis [(gammaomega-perfluoro-C8-20-alkyl)thio]
derivatives, compounds with
diethanolamine (CAS Reg. No. 71608–
61–2); and
3. Perfluoroalkyl substituted
phosphate ester acids, ammonium salts
formed by the reaction of 2,2bis[([gamma], [omega]-perfluoro C4-20
alkylthio) methyl]-1,3-propanediol,
polyphosphoric acid and ammonium
hydroxide.
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II. Amendment of § 176.170
In accordance with procedures
specified in § 171.130 (21 CFR 171.130)
for amending or revoking a food
additive regulation, the petition asks us
to amend § 176.170 so that it would no
longer provide for the use of three
perfluoroalkyl ethyl containing FCSs as
oil and water repellants for paper and
paperboard for use in contact with
aqueous and fatty foods. If we determine
that new data are available regarding the
toxicity of these FCSs that justify
amending § 176.170 so that it would no
longer allow their use, we will publish
such an amendment of the regulation in
the Federal Register, as set forth in
§ 171.130 and § 171.100 (21 CFR
171.100).
We have determined under 21 CFR
25.32(m) that this action is of a type that
does not individually or cumulatively
have a significant effect on the human
environment. Therefore, neither an
environmental assessment nor an
environmental impact statement is
required.
Dated: March 9, 2015.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2015–05938 Filed 3–13–15; 8:45 am]
BILLING CODE 4164–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 170, 177, and 189
[Docket No. FDA–2015–F–0537]
Natural Resources Defense Council et
al.; Filing of Food Additive Petition
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
Notice of petition.
The Food and Drug
Administration (FDA or we) is
announcing that we have filed a
petition, submitted by the Natural
Resources Defense Council, Center for
Food Safety, Clean Water Action,
Children’s Environmental Health
Network, Center for Science in the
Public Interest, Breast Cancer Fund,
Center for Environmental Health,
Environmental Working Group, and
Improving Kids’ Environment,
proposing that we amend our regulation
to no longer provide for the use of
potassium perchlorate as an additive in
closure-sealing gaskets for food
containers, revoke the Threshold of
Regulation exemption No. 2005–006 to
no longer exempt the use of sodium
SUMMARY:
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]]>Agencies
[Federal Register Volume 80, Number 50 (Monday, March 16, 2015)]
[Proposed Rules]
[Pages 13502-13508]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-05681]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 80, No. 50 / Monday, March 16, 2015 /
Proposed Rules
[[Page 13502]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS-FV-14-0096; FV15-985-1 PR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Salable Quantities and Allotment Percentages for the
2015-2016 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would implement a recommendation from the
Spearmint Oil Administrative Committee (Committee) to establish 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 2015-2016 marketing year, which begins on June 1, 2015. The Far
West includes the states of Washington, Idaho, and Oregon, and
designated parts of Nevada and Utah. This rule invites comments on the
establishment of salable quantities and allotment percentages for Class
1 (Scotch) spearmint oil of 1,265,853 pounds and 60 percent,
respectively, and for Class 3 (Native) spearmint oil of 1,341,269
pounds and 56 percent, respectively. The Committee locally administers
the marketing order for spearmint oil produced in the Far West and
recommended these quantities to help maintain stability in the
spearmint oil market.
DATES: Comments must be received by March 31, 2015.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be sent to the Docket Clerk,
Marketing Order and Agreement Division, Fruit and Vegetable Program,
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938; or Internet: https://www.regulations.gov. All comments should reference the document number
and the date and page number of this issue of the Federal Register and
will be made available for public inspection in the Office of the
Docket Clerk during regular business hours, or can be viewed at: https://www.regulations.gov. All comments submitted in response to this
proposal will be included in the record and will be made available to
the public. Please be advised that the identity of the individuals or
entities submitting the comments will be made public on the Internet at
the address provided above.
FOR FURTHER INFORMATION CONTACT: Barry Broadbent, 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:
Barry.Broadbent@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 proposal 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 proposed rule
in conformance with Executive Orders 12866, 13175, and 13563.
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This proposed rule is not intended to have
retroactive effect. 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 proposed rule would establish the
quantity of spearmint oil produced in the Far West, by class, which
handlers may purchase from, or handle on behalf of, producers during
the 2015-2016 marketing year, which begins on June 1, 2015.
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. 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 to USDA the establishment of a salable quantity and
allotment percentage for such class or classes of oil for the
forthcoming marketing year. Recommendations for volume control are
intended to ensure that market requirements for Far West spearmint oil
are satisfied and orderly marketing conditions are maintained.
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 the
percentage used to calculate each producer's prorated share of the
salable quantity. It is derived by
[[Page 13503]]
dividing the salable quantity for each class of spearmint oil by the
total of all producers' allotment bases for the same class of oil. Each
producer's annual allotment of salable spearmint oil is calculated by
multiplying their respective total allotment base by the allotment
percentage for each class of spearmint oil. A producer's allotment base
is their 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 and allotment percentages are established at
levels intended to fulfill market requirements and to maintain 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 5, 2014, and
recommended salable quantities and allotment percentages for both
classes of oil for the 2015-2016 marketing year. The Committee
unanimously recommended the establishment of a salable quantity and
allotment percentage for Class 1 (Scotch) spearmint oil of 1,265,853
pounds and 60 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 1,341,269
pounds and 56 percent, respectively.
This action would set the amount of Scotch and Native spearmint oil
that handlers may purchase from, or handle on behalf of, producers
during the 2015-2016 marketing year, which begins on June 1, 2015.
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 1,265,853 pounds and an allotment
percentage of 60 percent for the upcoming 2015-2016 marketing year. The
Committee utilized 2015-2016 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 1,092,726 pounds in the 2014-2015 marketing year to 1,100,000
pounds in 2015-2016. Industry reports indicate that the increased trade
demand estimate is the result of increased consumer demand for mint
flavored products and low end-user inventories that need to be
replenished. Information gathered from spearmint oil handlers supports
this conclusion.
Production of Far West Scotch spearmint oil increased from
1,057,377 pounds in 2013 to 1,093,740 pounds in 2014. 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 2015-2016 year, the Committee expects production to
increase to as much as 1,300,000 pounds for the forthcoming marketing
year.
The Committee also estimates that there will be zero carry-in of
Scotch spearmint oil on June 1, 2015, the beginning of the 2015-2016
marketing year. This figure, which is the primary measure of excess
supply, is down from 7,064 carried-in the previous year. This level of
carry-in is below the minimum carry-in quantity that the Committee
considers favorable. The demand for Scotch spearmint oil during the
remainder of the 2014-2015 marketing year is expected to equal or
exceed the remaining total supply, which will likely cause the zero
carry-in.
The 2015-2016 salable quantity of 1,265,853 pounds recommended by
the Committee represents an increase of 173,127 pounds over the total
supply available during the previous marketing year. Total supply for
2014-2015 amounted to 1,092,726 pounds (7,064 carry-in, 989,643 pounds
produced, and 96,019 pounds released from the reserve).
The Committee estimates 2015-2016 demand for Scotch spearmint oil
at 1,100,000 pounds. When considered in conjunction with the forecast
that there will be zero available carry-in of Scotch spearmint oil on
June 1, 2015, the recommended salable quantity of 1,265,853 pounds
would satisfy market demand and yield a carry-in of 165,853 pounds
available at the beginning of 2016-2017 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 maintain orderly marketing
conditions. The salable quantity recommended for the upcoming marketing
year is more than the salable quantity initially set for the previous
year of 1,149,030. The Committee believes that the recommended salable
quantity would adequately meet demand, as well as result in a larger
carry-in for the following year. With that in mind, the Committee
developed its recommendation for the proposed Scotch spearmint oil
salable quantity and allotment percentage for the 2015-2016 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, 2015--0
pounds. This figure is the difference between the revised 2014-2015
marketing year total available supply of 1,092,726 pounds and the
estimated 2014-2015 marketing year trade demand of 1,092,726 pounds.
(B) Estimated trade demand of Scotch spearmint oil for the 2015-
2016 marketing year--1,100,000 pounds. This figure is based on input
from producers at five Scotch spearmint oil production area meetings
held in late September and early October 2014, as well as estimates
provided by handlers and other meeting participants at the November 5,
2014, meeting. The average estimated trade demand derived from the five
production area meetings was 1,192,400 pounds, which is 42,400 pounds
more than the average of trade demand estimates submitted by handlers.
Far West Scotch spearmint oil sales have averaged 979,520 pounds per
year over the last three years. Given this information, the Committee
decided it was prudent to anticipate the trade demand at 1,100,000
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
2015-2016 marketing year production--1,100,000 pounds. This figure is
the difference between the estimated 2015-2016 marketing year trade
demand (1,100,000 pounds) and the estimated carry-in on June 1, 2015 (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
2015-2016 marketing year--2,109,755 pounds. This figure represents a
one-percent increase over the revised 2014-2015 total allotment base.
This figure is generally revised each year on June 1 due to producer
base being lost because of the
[[Page 13504]]
bona fide effort production provisions of Sec. 985.53(e). The revision
is usually minimal.
(E) Computed Scotch spearmint oil 2015-2016 marketing year
allotment percentage--52.1 percent. This percentage is computed by
dividing the minimum required salable quantity (1,100,000 pounds) by
the total estimated allotment base (2,109,755 pounds).
(F) Recommended Scotch spearmint oil 2015-2016 marketing year
allotment percentage--60 percent. This is the Committee's
recommendation and is based on the computed allotment percentage (52.1
percent), the average of the computed allotment percentage figures from
the five production area meetings (56.5 percent), and input from
producers and handlers at the November 5, 2014, meeting. The
recommended 60 percent allotment percentage is also based on the
Committee's belief that the computed percentage (52.1 percent) may not
adequately supply the potential 2015-2016 Scotch spearmint oil market.
(G) Recommended Scotch spearmint oil 2015-2016 marketing year
salable quantity--1,265,853 pounds. This figure is the product of the
recommended allotment percentage (60 percent) and the total estimated
allotment base (2,109,755 pounds).
(H) Estimated total available supply of Scotch spearmint oil for
the 2015-2016 marketing year--1,265,853 pounds. This figure is the sum
of the 2015-2016 recommended salable quantity (1,265,853 pounds) and
the estimated carry-in on June 1, 2015 (0 pounds).
Class 3 (Native) Spearmint Oil
At the November 5, 2014, meeting, the Committee also recommended a
2015-2016 Native spearmint oil salable quantity of 1,341,269 pounds and
an allotment percentage of 56 percent. The Committee utilized Native
spearmint oil sales estimates for 2015-2016 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. The recommended volume control levels represent an increase
of 250,448 pounds and 10 percentage points over the previous year's
initially established salable quantity and allotment percentage.
The Committee also estimates that there will be 512,745 pounds of
Native spearmint oil in the reserve pool on June 1, 2015. 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 2014-2015 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 2015-2016 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 2015-
2016 marketing year. When considered in conjunction with the estimated
carry-in of 117,368 pounds of Native spearmint oil on June 1, 2015, the
recommended salable quantity of 1,341,269 pounds results in an
estimated total available supply of 1,458,637 pounds of Native
spearmint oil during the 2015-2016 marketing year. Estimated carry-in
of Native spearmint oil at the beginning of the 2016-2017 marketing
year would be approximately 152,137 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 maintain orderly marketing
conditions. With that in mind, the Committee developed its
recommendation for the proposed Native spearmint oil salable quantity
and allotment percentage for the 2015-2016 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, 2015--
117,368 pounds. This figure is the difference between the revised 2014-
2015 marketing year total available supply of 1,458,368 pounds and the
estimated 2014-2015 marketing year trade demand of 1,341,000 pounds.
(B) Estimated trade demand of Native spearmint oil for the 2015-
2016 marketing year--1,306,500 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 2014, as well as estimates provided by handlers and other
meeting participants at the November 5, 2014, meeting. The average
estimated trade demand provided at the six production area meetings was
1,330,167 pounds, whereas the handlers' estimates ranged from 1,250,000
pounds to 1,400,000 pounds, and averaged 1,356,750 pounds. The average
of Far West Native spearmint oil sales over the last three years is
1,306,492 pounds.
(C) Salable quantity of Native spearmint oil required from the
2015-2016 marketing year production--1,189,132 pounds. This figure is
the difference between the estimated 2015-2016 marketing year trade
demand (1,306,500 pounds) and the estimated carry-in on June 1, 2015
(117,368 pounds). This is the minimum amount that the Committee
believes would be required to meet the anticipated 2015-2016 Native
spearmint oil trade demand.
(D) Total estimated allotment base of Native spearmint oil for the
2015-2016 marketing year--2,395,124 pounds. This figure represents a
one-percent increase over the revised 2014-2015 total allotment base.
This figure is generally revised each year on June 1 due to producer
base being lost due to the bona fide effort production provisions of
Sec. 985.53(e). The revision is usually minimal.
(E) Computed Native spearmint oil 2015-2016 marketing year
allotment percentage--49.6 percent. This percentage is computed by
dividing the required salable quantity (1,189,132) by the total
estimated allotment base (2,395,124 pounds).
(F) Recommended Native spearmint oil 2015-2016 marketing year
allotment percentage--56 percent. This is the Committee's
recommendation based on the computed allotment percentage (49.6
percent), the average of the computed allotment percentage figures from
the six production area meetings (51.0 percent), and input from
producers and handlers at the November 5, 2014, meeting. The
recommended 56 percent allotment percentage is also based on the
Committee's belief that the computed percentage (49.6 percent) may not
adequately supply the potential 2015-2016 Native spearmint oil market.
(G) Recommended Native spearmint oil 2015-2016 marketing year
salable quantity--1,341,269 pounds. This figure is the product of the
recommended allotment percentage (56 percent) and
[[Page 13505]]
the total estimated allotment base (2,395,124 pounds).
(H) Estimated available supply of Native spearmint oil for the
2015-2016 marketing year--1,458,637 pounds. This figure is the sum of
the 2015-2016 recommended salable quantity (1,341,269 pounds) and the
estimated carry-in on June 1, 2015 (117,368 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 Committee's recommended Scotch and Native spearmint oil salable
quantities and allotment percentages of 1,265,853 pounds and 60
percent, and 1,341,269 pounds and 56 percent, respectively, are based
on the goal of maintaining market stability. The Committee anticipates
that this goal would be achieved by matching the available supply of
each class of Spearmint oil to the estimated demand of such, thus
avoiding extreme fluctuations in inventories and prices.
The proposed 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 2015-2016 marketing year may transfer such
excess spearmint oil to producers who have produced less than their
annual allotment. In addition, up until December 1, 2015, producers may
place excess spearmint oil production into the reserve pool to be
released in the future in accordance with market needs.
This proposed regulation, if adopted, would be similar to
regulations issued in prior seasons. The average initial allotment
percentage for the five most recent marketing years for Scotch
spearmint oil is 44.0 percent, while the average initial allotment
percentage for the same five-year period for Native spearmint oil is
48.8 percent.
Costs to producers and handlers resulting from this rule are
expected to be offset by the benefits derived from a stable market and
increased returns. In conjunction with the issuance of this proposed
rule, USDA has reviewed the Committee's marketing policy statement for
the 2015-2016 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 2015-2016 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 establishment of these salable quantities and allotment
percentages would allow for anticipated market needs. 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 2015-2016 season in order to meet
anticipated market demand.
Initial 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 initial 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 37 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 11 of the 37 Scotch spearmint oil producers, and 25 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 production of spearmint oil and are not financially able
to hold spearmint oil for sale in future years. In addition, small
producers generally do not have a large assortment of 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. That being said being
reasonably assured of
[[Page 13506]]
a stable price and market provides all producing entities with the
ability to maintain proper cash flow and to meet annual expenses. The
benefits for this rule are expected to be equally available to all
producers and handlers regardless of their size.
This proposed rule would establish 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 2015-2016 marketing year. The
Committee recommended this rule 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 coordinate their
spearmint oil production with the expected market demand. Authority for
this action is provided in Sec. Sec. 985.50, 985.51, and 985.52 of the
order.
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 in yield and acreage planted from season-to-season tend to
be larger than fluctuations in the amount purchased by handlers.
Historically, 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 1980-2013 (when the marketing order was in effect) is
0.23, compared to 0.36 for the decade prior to the promulgation of the
order (1970-79) and 0.49 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 may also be 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 market.
By December 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. A reserve pool is maintained 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.
Limited quantities of excess oil may be sold by one producer to
another producer to fill production deficiencies in a marketing year. A
deficiency occurs when on-farm production is less than a producer's
allotment. When a producer has a deficiency, the producer's own reserve
oil can be utilized to fill that deficiency, or excess production
(production of spearmint oil in excess of the producer's annual
allotment) from another producer may also be secured to fill the
deficiency. All of these provisions need to be exercised prior to
December 1 of each year.
In any given year, the total available supply of spearmint oil is
composed of current production plus salable 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. Reserve pool stocks, which increase in high 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 2015-2016 marketing
year for both classes of oil at 2,406,500 pounds, and that the expected
combined salable carry-in will be 117,368 pounds. This results in a
combined required salable quantity of 2,289,132 pounds. With volume
control, sales by producers for the 2015-2016 marketing year would be
limited to 2,607,122 pounds (the recommended
[[Page 13507]]
salable quantity for both classes of spearmint oil).
The recommended allotment percentages, upon which 2015-2016
producer allotments are based, are 60 percent for Scotch and 56 percent
for Native. Without volume controls, producers would not be limited to
these allotment levels, and could produce and sell an unrestricted
quantity of spearmint oil. The econometric model estimated a decline of
about $1.30 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 2015-2016 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 would not result in fewer retail sales of such products.
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 would occur without volume
control. The Committee also considered salable quantities and allotment
percentages that were above and below the levels that were ultimately
recommended.
After computing the initial 52.1 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
2015-2016 should be more than the percentage initially established for
the 2014-2015 marketing year (55 percent). After considerable
discussion, the eight-member committee unanimously determined that
1,265,853 pounds and 60 percent would be the most effective Scotch
spearmint oil salable quantity and allotment percentage, respectively,
for the 2015-2016 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 49.6 percent, the
Committee unanimously recommended 1,341,269 pounds and 56 percent for
the effective Native spearmint oil salable quantity and allotment
percentage, respectively, for the 2015-2016 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 believes that the salable
quantities and allotment percentages recommended would achieve the
objectives sought. The Committee also believes that, should there be no
volume regulation in effect for the upcoming marketing year, the Far
West spearmint oil industry would return to the pronounced cyclical
price patterns that occurred prior to the promulgation of the order. As
previously stated, annual salable quantities and allotment percentages
have been issued for both classes of spearmint oil since the order's
inception. The salable quantities and allotment percentages proposed
herein are expected to facilitate the goal of maintaining orderly
marketing conditions for Far West spearmint oil for the 2015-2016 and
future marketing years.
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 proposed rule would establish 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 2015-2016
marketing year. Accordingly, this action would 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.
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.
USDA has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this proposed rule.
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 5, 2014, meeting was
a public meeting and all entities, both large and small, were able to
express views on this issue. Finally, interested persons are invited to
submit comments on this proposed rule, including the regulatory and
informational impacts of this action on small businesses.
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.
A 15-day comment period is provided to allow interested persons to
respond to this proposed rule. Fifteen days is deemed appropriate
because: (1) The 2015-2016 fiscal period begins on June 1, 2015, and a
final determination on the salable quantities and allotment percentages
should be made prior to handlers purchasing from, or handling on behalf
of, producers of any oil for the ensuing marketing year; and (2)
handlers are aware of this action, which was recommended by the
Committee at a public meeting and is similar to other salable
quantities and allotment percentages issued in past years.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements, Spearmint oil.
[[Page 13508]]
For the reasons set forth in the preamble, 7 CFR part 985 is
proposed to be 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. 985.234 is added to read as follows:
Sec. 985.234 Salable quantities and allotment percentages--2015-2016
marketing year.
The salable quantity and allotment percentage for each class of
spearmint oil during the marketing year beginning on June 1, 2015,
shall be as follows:
(a) Class 1 (Scotch) oil--a salable quantity of 1,265,853 pounds
and an allotment percentage of 60 percent.
(b) Class 3 (Native) oil--a salable quantity of 1,341,269 pounds
and an allotment percentage of 56 percent.
Dated: March 9, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-05681 Filed 3-13-15; 8:45 am]
BILLING CODE 3410-02-P
