Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Revision of the Salable Quantity and Allotment Percentage for Class 3 (Native) Spearmint Oil for the 2014-2015 Marketing Year, 16547-16552 [2015-07114]
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16547
Rules and Regulations
Federal Register
Vol. 80, No. 60
Monday, March 30, 2015
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS–FV–13–0087; FV14–985–1C
IR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Revision of the Salable
Quantity and Allotment Percentage for
Class 3 (Native) Spearmint Oil for the
2014–2015 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Interim rule with request for
comments.
AGENCY:
This interim rule implements
a recommendation from the Spearmint
Oil Administrative Committee
(Committee) to further revise the
quantity of Class 3 (Native) spearmint
oil that handlers may purchase from, or
handle on behalf of, producers during
the 2014–2015 marketing year under the
Far West spearmint oil marketing order
(order). The salable quantity and
allotment percentage for Native
spearmint oil was initially established at
1,090,821 pounds and 46 percent,
respectively, and was subsequently
increased to 1,280,561 pounds and 54
percent in a separate rulemaking action.
This rule further increases the Native
spearmint oil salable quantity to
1,351,704 pounds and the allotment
percentage to 57 percent for the 2014–
2015 marketing year. The order
regulates the handling of spearmint oil
produced in the Far West and is locally
administered by the Committee, which
is comprised of spearmint oil producers
operating within the order’s area of
production. The Committee
recommended this rule for the purpose
of maintaining orderly marketing
conditions in the Far West spearmint oil
market.
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SUMMARY:
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Effective March 30, 2015 and
applicable to the 2014–2015 marketing
year; comments received by May 29,
2015 will be considered prior to
issuance of a final rule.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this rule. 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
rule 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, Senior 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
interim rule is issued under Marketing
Order No. 985 (7 CFR part 985), as
amended, regulating the handling of
spearmint oil produced in the Far West
(Washington, Idaho, Oregon, and
designated parts of Nevada and Utah),
hereinafter referred to as the ‘‘order.’’
The order is effective under the
Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601–674),
hereinafter referred to as the ‘‘Act.’’
DATES:
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The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Orders
12866, 13563, and 13175.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. Under the provisions of the
marketing order now in effect, salable
quantities and allotment percentages
may be established for classes of
spearmint oil produced in the Far West.
This rule increases the quantity of
Native spearmint oil produced in the
Far West that handlers may purchase
from, or handle on behalf of, producers
during the 2014–2015 marketing year,
which began on June 1, 2014, and ends
on May 31, 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.
This rule revises the quantity of
Native spearmint oil that handlers may
purchase from, or handle on behalf of,
producers during the 2014–2015
marketing year under the Far West
spearmint oil marketing order. Prior to
this rule, the salable quantity and
allotment percentage for Native
spearmint oil was initially established at
1,090,821 pounds and 46 percent,
respectively, in a final rule published
May 8, 2014 (79 FR 26359). The salable
quantity and allotment percentage was
subsequently increased to 1,280,561
pounds and 54 percent in an interim
rule published January 22, 2015 (80 FR
3142). This interim rule further
increases the Native spearmint oil
salable quantity from 1,280,561 pounds
to 1,351,704 pounds and the allotment
percentage from 54 percent to 57
percent. This action is anticipated to be
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the last revision of the Native spearmint
oil salable quantity and allotment
percentage established under the order
for the 2014–2015 marketing year.
Under the volume regulation
provisions of the order, the Committee
meets each year to adopt a marketing
policy for the ensuing year. When the
Committee’s marketing policy
considerations indicate a need for
limiting the quantity of spearmint oil
available to the market to establish or
maintain orderly marketing conditions,
the Committee submits a
recommendation to the Secretary for
volume regulation.
Volume regulation under the order is
effectuated through the establishment of
a salable quantity and allotment
percentage applicable to each class of
spearmint oil handled in the production
area during a marketing year. The
salable quantity is the total quantity of
each class of oil that handlers may
purchase from, or handle on behalf of,
producers during a given marketing
year. The allotment percentage for each
class of oil is derived by dividing the
salable quantity by the total industry
allotment base for that same class of oil.
The total industry allotment base is the
aggregate of all allotment base held
individually by producers. Producer
allotment base is the quantity of each
class of spearmint oil that the
Committee has determined is
representative of a producer’s spearmint
oil production. Each producer is allotted
a pro rata share of the total salable
quantity of each class of spearmint oil
each marketing year. Each producer’s
annual allotment is determined by
applying the allotment percentage to the
producer’s individual allotment base for
each applicable class of spearmint oil.
The full Committee met on November
6, 2013, to consider its marketing policy
for the 2014–2015 marketing year. At
that meeting, the Committee determined
that marketing conditions indicated a
need for volume regulation of both
classes of spearmint oil for the 2014–
2015 marketing year. The Committee
recommended salable quantities of
1,149,030 pounds and 1,090,821
pounds, and allotment percentages of 55
percent and 46 percent, respectively, for
Scotch and Native spearmint oil. A
proposed rule to that effect was
published in the Federal Register on
March 14, 2014 (79 FR 14441).
Comments on the proposed rule were
solicited from interested persons until
March 31, 2014. No comments were
received. Subsequently, a final rule
establishing the salable quantities and
allotment percentages for Scotch and
Native spearmint oil for the 2014–2015
marketing year was published in the
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Federal Register on May 8, 2014 (79 FR
26359).
Pursuant to authority contained in
§§ 985.50, 985.51, and 985.52 of the
order, the full eight member Committee
met again on September 11, 2014, to
consider pertinent market information
on the current supply, demand, and
price of spearmint oil. After some
deliberation, the Committee
recommended increasing the 2014–2015
marketing year Scotch spearmint oil
salable quantity from 1,149,030 pounds
to 1,984,423 pounds and the allotment
percentage from 55 percent to 95
percent. An interim rule to that effect
was published in the Federal Register
on October 31, 2014 (79 FR 64657).
The full Committee met again on
November 5, 2014, for a regularly
scheduled annual meeting to evaluate
the current year’s volume control
regulation and to adopt a marketing
policy for the 2015–2016 marketing
year. After thorough discussion with
regards to the current marketing
conditions for Native spearmint oil, the
Committee recommended revising the
previously established 2014–2015
marketing year Native spearmint oil
salable quantity and allotment
percentage. Subsequently, in an interim
rule published in the Federal Register
on January 22, 2015 (80 FR 3142), the
salable quantity for Native spearmint oil
was increased from 1,090,821 pounds to
1,280,561 pounds and the allotment
percentage was increased from 46
percent to 54 percent.
The full Committee met again on
February 18, 2015, for a regularly
scheduled meeting where it again
evaluated the current year’s volume
control regulation. At the meeting, the
Committee assessed the current market
conditions for spearmint oil in relation
to the revised salable quantities and
allotment percentages established for
the 2014–2015 marketing year. The
Committee considered a number of
factors, including the current and
projected supply, estimated future
demand, production costs, and producer
prices for all classes of spearmint oil.
The Committee determined that the
recently revised salable quantity and
allotment percentage in effect for Native
spearmint oil for the 2014–2015
marketing year should be further
increased to take into account the
unanticipated rise in market demand for
that class of spearmint oil.
Therefore, the Committee
recommended increasing the Native
spearmint oil salable quantity from
1,280,561 pounds to 1,351,704 pounds
and the allotment percentage from 54
percent to 57 percent. The
recommendation to increase the salable
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quantity and allotment percentage
passed unanimously.
Thus, taking into consideration the
following discussion, this rule makes
additional amounts of Native spearmint
oil available to the market by further
increasing the salable quantity and
allotment percentage previously
established under the order for the
2014–2015 marketing year. This rule
increases the Native spearmint oil
salable quantity 71,143 pounds, to
1,351,704 pounds, and raises the
allotment percentage 3 percent points,
to 57 percent. Such additional oil will
become available to the market by
releasing Native spearmint oil held by
producers in the reserve pool. As of May
31, 2014, the Committee records show
that the reserve pool for Native
spearmint oil contained 446,086 pounds
of oil.
The increase in the salable quantity as
a result of this rule represents an
additional 71,143 pounds of Native
spearmint oil being made available to
the market. However, as some
individual producers do not hold Native
spearmint oil from previous year’s
production in the reserve pool, the
Committee expects that only 48,769
pounds of additional Native spearmint
oil will actually be made available to the
spearmint oil market. The relatively
high salable quantity resulting from this
action, as compared to the actual
quantity of spearmint oil that will be
made available to the market, is
necessary to ensure that a sufficient
quantity of Native spearmint oil is
available to fully supply the market.
Producers that do not have additional
Native spearmint oil in inventory (oil
held in the reserve pool) will not be able
to utilize the additional annual
allotment issued to them as a result of
this action and such additional annual
allotment will go unused.
At the February meeting, the
Committee staff reported that demand
for Native spearmint oil continues to be
greater than anticipated. Committee
records indicate that 2014–2015
marketing year sales through the end of
January 2015, the most recent full
month recorded, are 148,325 pounds
higher than for the same period in the
2013–2014 marketing year and 211,163
pounds higher than the average sales for
the same period for the years 2009–
2013. The Committee now estimates
trade demand for Native spearmint oil
for the 2014–2015 marketing year to be
approximately 1,443,899 pounds, up
from the 1,300,000 pounds initially
estimated in the fall of 2013, and the
1,341,000 pounds estimated at the
Committee’s November 2014 meeting. If
realized, this quantity of trade demand
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would be just 19,872 pounds less than
the quantity of Native spearmint oil
available under the volume control
levels implemented in January 2015
(1,463,771 pounds available prior to this
rule minus 1,443,899 pounds demanded
= 19,872 pounds). The increased
quantity of Native spearmint oil (48,769
pounds) actually made available to the
market as a result of this action would
ensure that market demand is fully
satisfied in the current year and that
there would be approximately 68,641
pounds of Native spearmint oil salable
inventory available to the market for the
start of the 2015–2016 marketing year,
which begins on June 1, 2015.
In making the recommendation to
increase the salable quantity and
allotment percentage of Native
spearmint oil, the Committee
considered all currently available
information on the price, supply, and
demand of spearmint oil. The
Committee also considered reports and
other information from handlers and
producers in attendance at the meeting.
Lastly, the Committee manager
presented information and reports that
were provided to the Committee staff by
handlers and producers who were not in
attendance at the February 18, 2015,
meeting.
This action increases the 2014–2015
marketing year Native spearmint oil
salable quantity by 71,143 pounds, to a
total of 1,351,704 pounds. However, as
mentioned previously, the net effect of
the increase will be much less than the
calculated increase due to the amount of
actual oil individual producers have
available to market from reserve pool
inventory. The Committee estimates that
this action will actually make an
additional 48,769 pounds of Native
spearmint oil available to the market.
That amount, combined with the 89,872
pounds of salable Native spearmint oil
that the Committee estimates is
currently available to the market, will
make a total of 138,641 pounds
available to be marketed through the
remainder of the marketing year. The
total supply of Native spearmint oil that
the Committee anticipates actually
being available to the market over the
course of the 2014–2015 marketing year
will be increased to 1,512,540 pounds.
Actual sales of Native spearmint oil for
the 2013–2014 marketing year totaled
1,341,555 pounds.
The Committee estimates that this
action will result in 68,641 pounds of
salable Native spearmint oil being
carried into the 2015–2016 marketing
year. In addition, the Committee expects
that 248,602 pounds of Native
spearmint oil will still be held in
reserve pool stocks by producers after
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this increase. These inventory levels are
low in comparison to historical levels,
but are well within the range that the
Committee believes to be appropriate
moving forward. In addition, the
Committee believes that the current
Native spearmint oil market situation
will stimulate production of Native
spearmint oil in the coming years,
further ensuring that the market will be
adequately supplied in the future.
As mentioned previously, when the
original 2014–2015 marketing policy
statement was drafted, handlers
estimated the demand for Native
spearmint oil for the 2014–2015
marketing year to be 1,300,000 pounds.
The Committee’s initial
recommendation for the establishment
of the Native spearmint oil salable
quantity and allotment percentage for
the 2014–2015 marketing year was
based on that estimate. The Committee
did not anticipate the increase in
demand for Native spearmint oil that
the market is currently experiencing and
did not make allowances for it when the
marketing policy was initially adopted.
At the February 18, 2015, meeting, the
Committee revised its estimate of the
current trade demand to 1,443,899
pounds. The Committee now believes
that the supply of Native spearmint oil
available to the market under the
previously revised salable quantity and
allotment percentage would be
insufficient to satisfy the current level of
demand for oil at reasonable price
levels. The Committee further believes
that the increase in the salable quantity
and allotment percentage effectuated by
this action is vital to ensuring an
adequate supply of Native spearmint oil
is available to the market moving
forward.
As previously stated, it is anticipated
that this action will make 48,769
pounds of the Native spearmint oil held
in the reserve pool available to the
market. However, to achieve that
desired net effect under the current
supply conditions in the industry, it is
necessary for the salable quantity and
allotment percentage established under
the volume regulation provisions of the
order to be set at artificially high levels.
The Committee records show that some
producers do not hold Native spearmint
oil in reserve. Given the process by
which volume regulation is effectuated
under the order, only those producers
with Native spearmint oil in the reserve
pool will be able to utilize the
additional annual allotment that is
issued as a result of this rule. Likewise,
producers that do not have Native
spearmint oil reserve oil from prior
years’ production will not have any
Native spearmint oil inventory to offer
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to the market, regardless of how much
additional annual allotment is issued to
those producers. As such, the
Committee expects that approximately
31 percent of the increased salable
quantity and allotment percentage for
Native spearmint oil may go unused.
As an example, assume Producer A
has 2,000 pounds of Native spearmint
oil allotment base. In addition, assume
that during the 2014–2015 marketing
year Producer A produced 920 pounds
of Native spearmint oil and held 220
pounds of excess Native spearmint oil
in reserve from production in prior
years. Given that the initial 2014–2015
marketing year allotment percentage
was established at 46 percent, Producer
A could market all 920 pounds of the
current year production (46 percent
allotment percentage × 2,000 pounds of
allotment base), leaving him/her with
220 pounds in the reserve pool that was
initially not available to market.
Without an increase in the allotment
percentage, the producer would not
have been able to market any of the 220
pounds of reserve oil and the oil would
have continued to have been held in the
reserve pool for marketing in
subsequent years. For Producer A to
market all 1,140 pounds of his/her
current year Native spearmint oil
production and reserve inventory, the
allotment percentage needs to be
increased by 11 percent (8 percent plus
3 percent) to a total of 57 percent (57
percent × 2,000 pounds = 1,140
pounds). An increase in the allotment
percentage of anything less than 11
percent would fail to release all of the
Native spearmint oil that the producer
holds in the reserve pool. The increase
in the allotment percentage may be
accomplished in several steps, but has
a cumulative effect with regards to the
release of spearmint oil held in the
reserve pool.
In contrast, assume that another
producer, Producer B, likewise has
2,000 pounds of Native spearmint oil
allotment base and produced 920
pounds of Native spearmint oil during
the 2014–2015 marketing year.
However, Producer B has no Native
spearmint oil held in reserve. As in the
first case, Producer B could market all
of his/her current year production under
the initial allotment percentage of 46
percent. However, any subsequent
increase in the allotment percentage
would have no impact on Producer B,
as the producer has no reserve pool oil
available to deliver to the market. As a
result, any additional annual allotment
allocated to Producer B after an increase
in the allotment percentage would go
unfilled.
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The Committee acknowledges that the
relatively high salable quantity, and the
corresponding high allotment
percentage, will create a quantity of
Native spearmint oil annual allotment
for which no Native spearmint oil will
actually be available to market. The
Committee estimates that a 3 percent
increase in the allotment percentage and
a 71,143 pound increase in the salable
quantity is required to make the desired
48,769 pounds of Native spearmint
reserve pool oil available to the market.
Accordingly, the Committee expects
that 22,374 pounds of the recommended
71,143 pound increase in salable
quantity will go unfilled. This quantity
of underutilized salable quantity has
been factored into the Committee’s
recommendation.
The Committee’s stated intent in the
use of marketing order volume control
regulation is to keep adequate supplies
available to meet market needs and to
maintain orderly marketing conditions.
With that in mind, the Committee
developed its recommendation for
increasing the Native spearmint oil
salable quantity and allotment
percentage for the 2014–2015 marketing
year based on the information discussed
above, as well as the summary data
outlined below.
(A) Estimated 2014–2015 Native
Allotment Base—2,371,350 pounds.
This is the estimate on which the
original 2014–2015 salable quantity and
allotment percentage was based.
(B) Revised 2014–2015 Native
Allotment Base—2,371,410 pounds.
This is 60 pounds more than the
estimated allotment base of 2,371,350
pounds. The difference is the result of
annual adjustments made to the
allotment base according to the
provisions of the order.
(C) Original 2014–2015 Native
Allotment Percentage—46 percent. This
was unanimously recommended by the
Committee on November 6, 2013.
(D) Original 2014–2015 Native Salable
Quantity—1,090,821 pounds. This
figure is 46 percent of the original
estimated 2014–2015 allotment base of
2,371,350 pounds.
(E) Adjusted Initial 2014–2015 Native
Salable Quantity—1,090,849 pounds.
This figure reflects the salable quantity
actually available at the beginning of the
2014–2015 marketing year. This
quantity is derived by applying the
initial 46 percent allotment percentage
to the revised allotment base of
2,371,410.
(F) First Revision to the 2014–2015
Native Salable Quantity and Allotment
Percentage:
(1) Initial Increase in the Native
Allotment Percentage—8 percent. The
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Committee recommended an 8 percent
increase at its November 5, 2014,
meeting. The revision was published in
the Federal Register on January 22,
2015 (80 FR 3142).
(2) Revised 2014–2015 Native
Allotment Percentage—54 percent. This
number was derived by adding the
increase of 8 percent to the initially
established 2014–2015 allotment
percentage of 46 percent.
(3) Revised 2014–2015 Native Salable
Quantity—1,280,561 pounds. This
amount is 54 percent of the revised
2014–2015 allotment base of 2,371,410
pounds.
(G) Second Revision to the 2014–2015
Native Salable Quantity and Allotment
Percentage:
(1) Increase in Native Allotment
Percentage—3 percent. The Committee
unanimously recommended a 3 percent
increase at its February 18, 2015,
meeting.
(2) Revised 2014–2015 Native
Allotment Percentage—57 percent. This
number is derived by adding the 3
percent increase to the previously
revised 2014–2015 allotment percentage
of 54 percent.
(3) Revised 2014–2015 Native Salable
Quantity—1,351,704 pounds. This
amount is 57 percent of the revised
2014–2015 allotment base of 2,371,410
pounds.
(4) Computed Increase in the 2014–
2015 Native Salable Quantity as a Result
of this Revision—71,143 pounds. This
figure is 3 percent of the revised 2014–
2015 allotment base of 2,371,410
pounds.
(5) Expected Actual Increase in the
2014–2015 Native Spearmint Oil
Available to the Market—48,769
pounds. This amount is based on the
Committee’s estimation of Native
spearmint oil actually held in the
reserve pool by producers that may
enter the market as a result of this rule.
Scotch spearmint oil is also regulated
by the order. As mentioned previously,
a salable quantity and allotment
percentage for Scotch spearmint oil was
established in a final rule published in
the Federal Register on May 8, 2014 (79
FR 26359) and subsequently increased
in an interim rule published in the
Federal Register on October 31, 2014
(79 FR 64657). At the February 18, 2015,
meeting, the Committee considered the
current production, inventory, and
marketing conditions for Scotch
spearmint oil. After receiving reports
from the Committee staff and comments
from the industry, the consensus of the
Committee was that the previously
increased salable quantity and allotment
percentage for Scotch spearmint oil was
appropriate for the current market
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conditions. As such, the Committee took
no further action with regards to Scotch
spearmint oil for the 2014–2015
marketing year.
This rule relaxes the regulation of
Native spearmint oil and will allow
producers to meet market demand while
improving producer returns. In
conjunction with the issuance of this
rule, the Committee’s revised marketing
policy statement for the 2014–2015
marketing year has been reviewed by
USDA. The Committee’s marketing
policy statement, a requirement
whenever the Committee recommends
implementing volume regulations or
recommends revisions to existing
volume regulations, meets the intent of
§ 985.50 of the order. During its
discussion of revising the 2014–2015
salable quantities and allotment
percentages, the Committee considered:
(1) The estimated quantity of salable oil
of each class held by producers and
handlers; (2) the estimated demand for
each class of oil; (3) the prospective
production of each class of oil; (4) the
total of allotment bases of each class of
oil for the current marketing year and
the estimated total of allotment bases of
each class for the ensuing marketing
year; (5) the quantity of reserve oil, by
class, in storage; (6) producer prices of
oil, including prices for each class of oil;
and (7) general market conditions for
each class of oil, including whether the
estimated season average price to
producers is likely to exceed parity.
Conformity with USDA’s ‘‘Guidelines
for Fruit, Vegetable, and Specialty Crop
Marketing Orders’’ has also been
reviewed and confirmed.
The increase in the Native spearmint
oil salable quantity and allotment
percentage allows for anticipated market
needs for that class of oil. In
determining anticipated market needs,
the Committee considered changes and
trends in historical sales, production,
and 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
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small entities acting on their own
behalf.
There are 8 spearmint oil handlers
subject to regulation under the order,
and approximately 39 producers of
Scotch spearmint oil and approximately
91 producers of Native spearmint oil in
the regulated production area. Small
agricultural service firms are defined by
the Small Business Administration
(SBA) as those having annual receipts of
less than $7,000,000, and small
agricultural producers are defined as
those having annual receipts of less than
$750,000 (13 CFR 121.201).
Based on the SBA’s definition of
small entities, the Committee estimates
that only two of the eight handlers
regulated by the order could be
considered small entities. Most of the
handlers are large corporations involved
in the international trading of essential
oils and the products of essential oils.
In addition, the Committee estimates
that 22 of the 39 Scotch spearmint oil
producers and 29 of the 91 Native
spearmint oil producers could be
classified as small entities under the
SBA definition. Thus, the majority of
handlers and producers of Far West
spearmint oil may not be classified as
small entities.
The use of volume control regulation
allows the spearmint oil industry to
fully supply spearmint oil markets
while avoiding the negative
consequences of over-supplying these
markets. Without volume control
regulation, the supply and price of
spearmint oil would likely fluctuate
widely. Periods of oversupply could
result in low producer prices and a large
volume of oil stored and carried over to
future crop years. Periods of
undersupply could lead to excessive
price spikes and could drive end users
to source flavoring needs from other
markets, potentially causing long-term
economic damage to the domestic
spearmint oil industry. The marketing
order’s volume control provisions have
been successfully implemented in the
domestic spearmint oil industry since
1980 and provide benefits for producers,
handlers, manufacturers, and
consumers.
This rule increases the quantity of
Native spearmint oil that handlers may
purchase from, or handle on behalf of,
producers during the 2014–2015
marketing year, which ends on May 31,
2015. The 2014–2015 Native spearmint
oil salable quantity was initially
established at 1,090,821 pounds and the
allotment percentage initially set at 46
percent. The salable quantity was
subsequently increased to 1,280,561
pounds and the allotment percentage to
54 percent. This rule further increases
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the Native spearmint oil salable quantity
to 1,351,704 pounds and the allotment
percentage to 57 percent.
Based on the information and
projections available at the February 18,
2015, meeting, the Committee
considered a number of alternatives to
this increase. The Committee not only
considered leaving the salable quantity
and allotment percentage unchanged,
but also considered other potential
levels of increase. The Committee
reached its recommendation to increase
the salable quantity and allotment
percentage for Native spearmint oil after
careful consideration of all available
information and input from all
interested industry participants, and
believes that the levels recommended
will achieve the objectives sought.
Without the increase, the Committee
believes the industry would not be able
to satisfactorily meet market demand.
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 Crop Marketing
Orders. 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 rule will not impose any
additional reporting or recordkeeping
requirements on either small or large
spearmint oil 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.
In addition, USDA has not identified
any relevant Federal rules that
duplicate, overlap or conflict with this
rule.
Further, 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. Like all
Committee meetings, the February 18,
2015, meeting was a public meeting,
and all entities, both large and small,
were able to express their views on this
issue. Finally, interested persons are
invited to submit information on the
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16551
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.
This rule invites comments on a
change to the salable quantity and
allotment percentage for Native
spearmint oil for the 2014–2015
marketing year. Any comments received
will be considered prior to finalization
of this rule.
After consideration of all relevant
material presented, including the
Committee’s recommendation, and
other information, it is found that this
interim rule, as hereinafter set forth,
will tend to effectuate the declared
policy of the Act.
Pursuant to 5 U.S.C. 553, it is also
found and determined upon good cause
that it is impracticable, unnecessary,
and contrary to the public interest to
give preliminary notice prior to putting
this rule into effect and that good cause
exists for not postponing the effective
date of this rule until 30 days after
publication in the Federal Register
because: (1) This rule increases the
quantity of Native spearmint oil that
may be marketed during the marketing
year, which ends on May 31, 2015; (2)
the current quantity of Native spearmint
oil may be inadequate to meet demand
for the 2014–2015 marketing year, thus
making the additional oil available as
soon as is practicable will be beneficial
to both handlers and producers; (3) the
Committee recommended these changes
at a public meeting and interested
parties had an opportunity to provide
input; and (4) this rule provides a 60day comment period, and any
comments received will be considered
prior to finalization of this rule.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats,
Reporting and recordkeeping
requirements, Spearmint oil.
For the reasons set forth in the
preamble, 7 CFR part 985 is amended as
follows:
PART 985—MARKETING ORDER
REGULATING THE HANDLING OF
SPEARMINT OIL PRODUCED IN THE
FAR WEST
1. The authority citation for 7 CFR
part 985 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
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Federal Register / Vol. 80, No. 60 / Monday, March 30, 2015 / Rules and Regulations
2. In § 985.233, revise paragraph (b) to
read as follows:
■
§ 985.233 Salable quantities and allotment
percentages—2014–2015 marketing year.
*
*
*
*
*
(b) Class 3 (Native) oil—a salable
quantity of 1,351,704 pounds and an
allotment percentage of 57 percent.
Dated: March 24, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2015–07114 Filed 3–27–15; 8:45 am]
BILLING CODE P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS–FV–13–0087; FV14–985–1A
FIR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Revision of the Salable
Quantity and Allotment Percentage for
Class 1 (Scotch) Spearmint Oil for the
2014–2015 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Affirmation of interim rule as
final rule.
AGENCY:
The Department of
Agriculture (USDA) is adopting as a
final rule, without change, an interim
rule recommended by the Spearmint Oil
Administrative Committee (Committee)
that revised the quantity of Class 1
(Scotch) spearmint oil that handlers
may purchase from or handle on behalf
of, producers during the 2014–2015
marketing year under the Far West
spearmint oil marketing order. The
Committee locally administers the order
and is comprised of producers and
handlers of spearmint oil. The interim
rule increased the Scotch spearmint oil
salable quantity from 1,149,030 pounds
to 1,984,423 pounds and the allotment
percentage from 55 percent to 95
percent. This change is expected to help
maintain orderly marketing conditions
in the Far West spearmint oil market.
DATES: Effective March 30, 2015.
FOR FURTHER INFORMATION CONTACT:
Barry Broadbent, Senior 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.
asabaliauskas on DSK5VPTVN1PROD with RULES
SUMMARY:
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Small businesses may obtain
information on complying with this and
other marketing order regulations by
viewing a guide at the following Web
site: https://www.ams.usda.gov/
MarketingOrdersSmallBusinessGuide;
or 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 rule
is issued under Marketing Order No.
985 (7 CFR part 985), as amended,
regulating the handling of spearmint oil
produced in the Far West (Washington,
Idaho, Oregon, and designated parts of
Nevada and Utah), hereinafter referred
to as the ‘‘order.’’ The order is effective
under the Agricultural Marketing
Agreement Act of 1937, as amended (7
U.S.C. 601–674), hereinafter referred to
as the ‘‘Act.’’
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Orders
12866, 13563, and 13175.
The handling of spearmint oil
produced in the Far West is regulated by
the order and is administered locally by
the Committee. Under the authority of
the order, salable quantities and
allotment percentages were established
for both Scotch and Native spearmint oil
for the 2014–2015 marketing year.
However, early in the 2014–2015
marketing year, it became evident to the
Committee and the industry that
demand for Scotch spearmint oil was
greater than previously projected and an
intra-seasonal increase in the salable
quantity and allotment percentage for
Scotch spearmint oil was necessary to
adequately supply the increased
demand. Therefore, this rule continues
in effect the rule that increased the
Scotch spearmint oil salable quantity
from 1,149,030 pounds to 1,984,423
pounds and the allotment percentage
from 55 percent to 95 percent.
In an interim rule published in the
Federal Register on October 31, 2014,
and effective June 1, 2014, through May
31, 2015 (79 FR 64657, Doc. No. AMS–
FV–13–0087, FV14–985–1A IR),
§ 985.233 was amended to reflect the
aforementioned increases in the salable
quantity and allotment percentage for
Scotch spearmint oil for the 2014–2015
marketing year.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), the Agricultural
Marketing Service (AMS) has
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Frm 00006
Fmt 4700
Sfmt 4700
considered the economic impact of this
action on small entities. Accordingly,
AMS has prepared this final regulatory
flexibility analysis.
The purpose of the RFA is to fit
regulatory actions to the scale of
businesses subject to such actions in
order that small businesses will not be
unduly or disproportionately burdened.
Marketing orders issued pursuant to the
Act, and the rules issued thereunder, are
unique in that they are brought about
through group action of essentially
small entities acting on their own
behalf.
There are 8 spearmint oil handlers
subject to regulation under the order,
and approximately 39 producers of
Scotch spearmint oil and approximately
91 producers of Native spearmint oil in
the regulated production area. Small
agricultural service firms are defined by
the Small Business Administration
(SBA) as those having annual receipts of
less than $7,000,000, and small
agricultural producers are defined as
those having annual receipts of less than
$750,000 (13 CFR 121.201).
Based on the SBA’s definition of
small entities, the Committee estimates
that only two of the eight handlers
regulated by the order could be
considered small entities. Most of the
handlers are large corporations involved
in the international trading of essential
oils and the products of essential oils.
In addition, the Committee estimates
that 22 of the 39 Scotch spearmint oil
producers and 29 of the 91 Native
spearmint oil producers could be
classified as small entities under the
SBA definition. Thus, the majority of
handlers and producers of Far West
spearmint oil may not be classified as
small entities.
The use of volume control regulation
allows the spearmint oil industry to
fully supply spearmint oil markets
while avoiding the negative
consequences of over-supplying these
markets. Without volume control
regulation, the supply and price of
spearmint oil would likely fluctuate
widely. Periods of oversupply could
result in low producer prices and a large
volume of oil stored and carried over to
future crop years. Periods of
undersupply could lead to excessive
price spikes and could drive end users
to source their flavoring needs from
other markets, potentially causing longterm economic damage to the domestic
spearmint oil industry. The order’s
volume control provisions have been
successfully implemented in the
domestic spearmint oil industry since
1980 and provide benefits for producers,
handlers, manufacturers, and
consumers.
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]]>Agencies
[Federal Register Volume 80, Number 60 (Monday, March 30, 2015)]
[Rules and Regulations]
[Pages 16547-16552]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-07114]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 80, No. 60 / Monday, March 30, 2015 / Rules
and Regulations
[[Page 16547]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS-FV-13-0087; FV14-985-1C IR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Revision of the Salable Quantity and Allotment
Percentage for Class 3 (Native) Spearmint Oil for the 2014-2015
Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This interim rule implements a recommendation from the
Spearmint Oil Administrative Committee (Committee) to further revise
the quantity of Class 3 (Native) spearmint oil that handlers may
purchase from, or handle on behalf of, producers during the 2014-2015
marketing year under the Far West spearmint oil marketing order
(order). The salable quantity and allotment percentage for Native
spearmint oil was initially established at 1,090,821 pounds and 46
percent, respectively, and was subsequently increased to 1,280,561
pounds and 54 percent in a separate rulemaking action. This rule
further increases the Native spearmint oil salable quantity to
1,351,704 pounds and the allotment percentage to 57 percent for the
2014-2015 marketing year. The order regulates the handling of spearmint
oil produced in the Far West and is locally administered by the
Committee, which is comprised of spearmint oil producers operating
within the order's area of production. The Committee recommended this
rule for the purpose of maintaining orderly marketing conditions in the
Far West spearmint oil market.
DATES: Effective March 30, 2015 and applicable to the 2014-2015
marketing year; comments received by May 29, 2015 will be considered
prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. 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 rule
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, Senior 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 interim rule is issued under Marketing
Order No. 985 (7 CFR part 985), as amended, regulating the handling of
spearmint oil produced in the Far West (Washington, Idaho, Oregon, and
designated parts of Nevada and Utah), hereinafter referred to as the
``order.'' The order is effective under the Agricultural Marketing
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter
referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Orders 12866, 13563, and 13175.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the provisions of the marketing order now in
effect, salable quantities and allotment percentages may be established
for classes of spearmint oil produced in the Far West. This rule
increases the quantity of Native spearmint oil produced in the Far West
that handlers may purchase from, or handle on behalf of, producers
during the 2014-2015 marketing year, which began on June 1, 2014, and
ends on May 31, 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.
This rule revises the quantity of Native spearmint oil that
handlers may purchase from, or handle on behalf of, producers during
the 2014-2015 marketing year under the Far West spearmint oil marketing
order. Prior to this rule, the salable quantity and allotment
percentage for Native spearmint oil was initially established at
1,090,821 pounds and 46 percent, respectively, in a final rule
published May 8, 2014 (79 FR 26359). The salable quantity and allotment
percentage was subsequently increased to 1,280,561 pounds and 54
percent in an interim rule published January 22, 2015 (80 FR 3142).
This interim rule further increases the Native spearmint oil salable
quantity from 1,280,561 pounds to 1,351,704 pounds and the allotment
percentage from 54 percent to 57 percent. This action is anticipated to
be
[[Page 16548]]
the last revision of the Native spearmint oil salable quantity and
allotment percentage established under the order for the 2014-2015
marketing year.
Under the volume regulation provisions of the order, the Committee
meets each year to adopt a marketing policy for the ensuing year. When
the Committee's marketing policy considerations indicate a need for
limiting the quantity of spearmint oil available to the market to
establish or maintain orderly marketing conditions, the Committee
submits a recommendation to the Secretary for volume regulation.
Volume regulation under the order is effectuated through the
establishment of a salable quantity and allotment percentage applicable
to each class of spearmint oil handled in the production area during a
marketing year. The salable quantity is the total quantity of each
class of oil that handlers may purchase from, or handle on behalf of,
producers during a given marketing year. The allotment percentage for
each class of oil is derived by dividing the salable quantity by the
total industry allotment base for that same class of oil. The total
industry allotment base is the aggregate of all allotment base held
individually by producers. Producer allotment base is the quantity of
each class of spearmint oil that the Committee has determined is
representative of a producer's spearmint oil production. Each producer
is allotted a pro rata share of the total salable quantity of each
class of spearmint oil each marketing year. Each producer's annual
allotment is determined by applying the allotment percentage to the
producer's individual allotment base for each applicable class of
spearmint oil.
The full Committee met on November 6, 2013, to consider its
marketing policy for the 2014-2015 marketing year. At that meeting, the
Committee determined that marketing conditions indicated a need for
volume regulation of both classes of spearmint oil for the 2014-2015
marketing year. The Committee recommended salable quantities of
1,149,030 pounds and 1,090,821 pounds, and allotment percentages of 55
percent and 46 percent, respectively, for Scotch and Native spearmint
oil. A proposed rule to that effect was published in the Federal
Register on March 14, 2014 (79 FR 14441). Comments on the proposed rule
were solicited from interested persons until March 31, 2014. No
comments were received. Subsequently, a final rule establishing the
salable quantities and allotment percentages for Scotch and Native
spearmint oil for the 2014-2015 marketing year was published in the
Federal Register on May 8, 2014 (79 FR 26359).
Pursuant to authority contained in Sec. Sec. 985.50, 985.51, and
985.52 of the order, the full eight member Committee met again on
September 11, 2014, to consider pertinent market information on the
current supply, demand, and price of spearmint oil. After some
deliberation, the Committee recommended increasing the 2014-2015
marketing year Scotch spearmint oil salable quantity from 1,149,030
pounds to 1,984,423 pounds and the allotment percentage from 55 percent
to 95 percent. An interim rule to that effect was published in the
Federal Register on October 31, 2014 (79 FR 64657).
The full Committee met again on November 5, 2014, for a regularly
scheduled annual meeting to evaluate the current year's volume control
regulation and to adopt a marketing policy for the 2015-2016 marketing
year. After thorough discussion with regards to the current marketing
conditions for Native spearmint oil, the Committee recommended revising
the previously established 2014-2015 marketing year Native spearmint
oil salable quantity and allotment percentage. Subsequently, in an
interim rule published in the Federal Register on January 22, 2015 (80
FR 3142), the salable quantity for Native spearmint oil was increased
from 1,090,821 pounds to 1,280,561 pounds and the allotment percentage
was increased from 46 percent to 54 percent.
The full Committee met again on February 18, 2015, for a regularly
scheduled meeting where it again evaluated the current year's volume
control regulation. At the meeting, the Committee assessed the current
market conditions for spearmint oil in relation to the revised salable
quantities and allotment percentages established for the 2014-2015
marketing year. The Committee considered a number of factors, including
the current and projected supply, estimated future demand, production
costs, and producer prices for all classes of spearmint oil. The
Committee determined that the recently revised salable quantity and
allotment percentage in effect for Native spearmint oil for the 2014-
2015 marketing year should be further increased to take into account
the unanticipated rise in market demand for that class of spearmint
oil.
Therefore, the Committee recommended increasing the Native
spearmint oil salable quantity from 1,280,561 pounds to 1,351,704
pounds and the allotment percentage from 54 percent to 57 percent. The
recommendation to increase the salable quantity and allotment
percentage passed unanimously.
Thus, taking into consideration the following discussion, this rule
makes additional amounts of Native spearmint oil available to the
market by further increasing the salable quantity and allotment
percentage previously established under the order for the 2014-2015
marketing year. This rule increases the Native spearmint oil salable
quantity 71,143 pounds, to 1,351,704 pounds, and raises the allotment
percentage 3 percent points, to 57 percent. Such additional oil will
become available to the market by releasing Native spearmint oil held
by producers in the reserve pool. As of May 31, 2014, the Committee
records show that the reserve pool for Native spearmint oil contained
446,086 pounds of oil.
The increase in the salable quantity as a result of this rule
represents an additional 71,143 pounds of Native spearmint oil being
made available to the market. However, as some individual producers do
not hold Native spearmint oil from previous year's production in the
reserve pool, the Committee expects that only 48,769 pounds of
additional Native spearmint oil will actually be made available to the
spearmint oil market. The relatively high salable quantity resulting
from this action, as compared to the actual quantity of spearmint oil
that will be made available to the market, is necessary to ensure that
a sufficient quantity of Native spearmint oil is available to fully
supply the market. Producers that do not have additional Native
spearmint oil in inventory (oil held in the reserve pool) will not be
able to utilize the additional annual allotment issued to them as a
result of this action and such additional annual allotment will go
unused.
At the February meeting, the Committee staff reported that demand
for Native spearmint oil continues to be greater than anticipated.
Committee records indicate that 2014-2015 marketing year sales through
the end of January 2015, the most recent full month recorded, are
148,325 pounds higher than for the same period in the 2013-2014
marketing year and 211,163 pounds higher than the average sales for the
same period for the years 2009-2013. The Committee now estimates trade
demand for Native spearmint oil for the 2014-2015 marketing year to be
approximately 1,443,899 pounds, up from the 1,300,000 pounds initially
estimated in the fall of 2013, and the 1,341,000 pounds estimated at
the Committee's November 2014 meeting. If realized, this quantity of
trade demand
[[Page 16549]]
would be just 19,872 pounds less than the quantity of Native spearmint
oil available under the volume control levels implemented in January
2015 (1,463,771 pounds available prior to this rule minus 1,443,899
pounds demanded = 19,872 pounds). The increased quantity of Native
spearmint oil (48,769 pounds) actually made available to the market as
a result of this action would ensure that market demand is fully
satisfied in the current year and that there would be approximately
68,641 pounds of Native spearmint oil salable inventory available to
the market for the start of the 2015-2016 marketing year, which begins
on June 1, 2015.
In making the recommendation to increase the salable quantity and
allotment percentage of Native spearmint oil, the Committee considered
all currently available information on the price, supply, and demand of
spearmint oil. The Committee also considered reports and other
information from handlers and producers in attendance at the meeting.
Lastly, the Committee manager presented information and reports that
were provided to the Committee staff by handlers and producers who were
not in attendance at the February 18, 2015, meeting.
This action increases the 2014-2015 marketing year Native spearmint
oil salable quantity by 71,143 pounds, to a total of 1,351,704 pounds.
However, as mentioned previously, the net effect of the increase will
be much less than the calculated increase due to the amount of actual
oil individual producers have available to market from reserve pool
inventory. The Committee estimates that this action will actually make
an additional 48,769 pounds of Native spearmint oil available to the
market. That amount, combined with the 89,872 pounds of salable Native
spearmint oil that the Committee estimates is currently available to
the market, will make a total of 138,641 pounds available to be
marketed through the remainder of the marketing year. The total supply
of Native spearmint oil that the Committee anticipates actually being
available to the market over the course of the 2014-2015 marketing year
will be increased to 1,512,540 pounds. Actual sales of Native spearmint
oil for the 2013-2014 marketing year totaled 1,341,555 pounds.
The Committee estimates that this action will result in 68,641
pounds of salable Native spearmint oil being carried into the 2015-2016
marketing year. In addition, the Committee expects that 248,602 pounds
of Native spearmint oil will still be held in reserve pool stocks by
producers after this increase. These inventory levels are low in
comparison to historical levels, but are well within the range that the
Committee believes to be appropriate moving forward. In addition, the
Committee believes that the current Native spearmint oil market
situation will stimulate production of Native spearmint oil in the
coming years, further ensuring that the market will be adequately
supplied in the future.
As mentioned previously, when the original 2014-2015 marketing
policy statement was drafted, handlers estimated the demand for Native
spearmint oil for the 2014-2015 marketing year to be 1,300,000 pounds.
The Committee's initial recommendation for the establishment of the
Native spearmint oil salable quantity and allotment percentage for the
2014-2015 marketing year was based on that estimate. The Committee did
not anticipate the increase in demand for Native spearmint oil that the
market is currently experiencing and did not make allowances for it
when the marketing policy was initially adopted. At the February 18,
2015, meeting, the Committee revised its estimate of the current trade
demand to 1,443,899 pounds. The Committee now believes that the supply
of Native spearmint oil available to the market under the previously
revised salable quantity and allotment percentage would be insufficient
to satisfy the current level of demand for oil at reasonable price
levels. The Committee further believes that the increase in the salable
quantity and allotment percentage effectuated by this action is vital
to ensuring an adequate supply of Native spearmint oil is available to
the market moving forward.
As previously stated, it is anticipated that this action will make
48,769 pounds of the Native spearmint oil held in the reserve pool
available to the market. However, to achieve that desired net effect
under the current supply conditions in the industry, it is necessary
for the salable quantity and allotment percentage established under the
volume regulation provisions of the order to be set at artificially
high levels. The Committee records show that some producers do not hold
Native spearmint oil in reserve. Given the process by which volume
regulation is effectuated under the order, only those producers with
Native spearmint oil in the reserve pool will be able to utilize the
additional annual allotment that is issued as a result of this rule.
Likewise, producers that do not have Native spearmint oil reserve oil
from prior years' production will not have any Native spearmint oil
inventory to offer to the market, regardless of how much additional
annual allotment is issued to those producers. As such, the Committee
expects that approximately 31 percent of the increased salable quantity
and allotment percentage for Native spearmint oil may go unused.
As an example, assume Producer A has 2,000 pounds of Native
spearmint oil allotment base. In addition, assume that during the 2014-
2015 marketing year Producer A produced 920 pounds of Native spearmint
oil and held 220 pounds of excess Native spearmint oil in reserve from
production in prior years. Given that the initial 2014-2015 marketing
year allotment percentage was established at 46 percent, Producer A
could market all 920 pounds of the current year production (46 percent
allotment percentage x 2,000 pounds of allotment base), leaving him/her
with 220 pounds in the reserve pool that was initially not available to
market. Without an increase in the allotment percentage, the producer
would not have been able to market any of the 220 pounds of reserve oil
and the oil would have continued to have been held in the reserve pool
for marketing in subsequent years. For Producer A to market all 1,140
pounds of his/her current year Native spearmint oil production and
reserve inventory, the allotment percentage needs to be increased by 11
percent (8 percent plus 3 percent) to a total of 57 percent (57 percent
x 2,000 pounds = 1,140 pounds). An increase in the allotment percentage
of anything less than 11 percent would fail to release all of the
Native spearmint oil that the producer holds in the reserve pool. The
increase in the allotment percentage may be accomplished in several
steps, but has a cumulative effect with regards to the release of
spearmint oil held in the reserve pool.
In contrast, assume that another producer, Producer B, likewise has
2,000 pounds of Native spearmint oil allotment base and produced 920
pounds of Native spearmint oil during the 2014-2015 marketing year.
However, Producer B has no Native spearmint oil held in reserve. As in
the first case, Producer B could market all of his/her current year
production under the initial allotment percentage of 46 percent.
However, any subsequent increase in the allotment percentage would have
no impact on Producer B, as the producer has no reserve pool oil
available to deliver to the market. As a result, any additional annual
allotment allocated to Producer B after an increase in the allotment
percentage would go unfilled.
[[Page 16550]]
The Committee acknowledges that the relatively high salable
quantity, and the corresponding high allotment percentage, will create
a quantity of Native spearmint oil annual allotment for which no Native
spearmint oil will actually be available to market. The Committee
estimates that a 3 percent increase in the allotment percentage and a
71,143 pound increase in the salable quantity is required to make the
desired 48,769 pounds of Native spearmint reserve pool oil available to
the market. Accordingly, the Committee expects that 22,374 pounds of
the recommended 71,143 pound increase in salable quantity will go
unfilled. This quantity of underutilized salable quantity has been
factored into the Committee's recommendation.
The Committee's stated intent in the use of marketing order volume
control regulation is to keep adequate supplies available to meet
market needs and to maintain orderly marketing conditions. With that in
mind, the Committee developed its recommendation for increasing the
Native spearmint oil salable quantity and allotment percentage for the
2014-2015 marketing year based on the information discussed above, as
well as the summary data outlined below.
(A) Estimated 2014-2015 Native Allotment Base--2,371,350 pounds.
This is the estimate on which the original 2014-2015 salable quantity
and allotment percentage was based.
(B) Revised 2014-2015 Native Allotment Base--2,371,410 pounds. This
is 60 pounds more than the estimated allotment base of 2,371,350
pounds. The difference is the result of annual adjustments made to the
allotment base according to the provisions of the order.
(C) Original 2014-2015 Native Allotment Percentage--46 percent.
This was unanimously recommended by the Committee on November 6, 2013.
(D) Original 2014-2015 Native Salable Quantity--1,090,821 pounds.
This figure is 46 percent of the original estimated 2014-2015 allotment
base of 2,371,350 pounds.
(E) Adjusted Initial 2014-2015 Native Salable Quantity--1,090,849
pounds. This figure reflects the salable quantity actually available at
the beginning of the 2014-2015 marketing year. This quantity is derived
by applying the initial 46 percent allotment percentage to the revised
allotment base of 2,371,410.
(F) First Revision to the 2014-2015 Native Salable Quantity and
Allotment Percentage:
(1) Initial Increase in the Native Allotment Percentage--8 percent.
The Committee recommended an 8 percent increase at its November 5,
2014, meeting. The revision was published in the Federal Register on
January 22, 2015 (80 FR 3142).
(2) Revised 2014-2015 Native Allotment Percentage--54 percent. This
number was derived by adding the increase of 8 percent to the initially
established 2014-2015 allotment percentage of 46 percent.
(3) Revised 2014-2015 Native Salable Quantity--1,280,561 pounds.
This amount is 54 percent of the revised 2014-2015 allotment base of
2,371,410 pounds.
(G) Second Revision to the 2014-2015 Native Salable Quantity and
Allotment Percentage:
(1) Increase in Native Allotment Percentage--3 percent. The
Committee unanimously recommended a 3 percent increase at its February
18, 2015, meeting.
(2) Revised 2014-2015 Native Allotment Percentage--57 percent. This
number is derived by adding the 3 percent increase to the previously
revised 2014-2015 allotment percentage of 54 percent.
(3) Revised 2014-2015 Native Salable Quantity--1,351,704 pounds.
This amount is 57 percent of the revised 2014-2015 allotment base of
2,371,410 pounds.
(4) Computed Increase in the 2014-2015 Native Salable Quantity as a
Result of this Revision--71,143 pounds. This figure is 3 percent of the
revised 2014-2015 allotment base of 2,371,410 pounds.
(5) Expected Actual Increase in the 2014-2015 Native Spearmint Oil
Available to the Market--48,769 pounds. This amount is based on the
Committee's estimation of Native spearmint oil actually held in the
reserve pool by producers that may enter the market as a result of this
rule.
Scotch spearmint oil is also regulated by the order. As mentioned
previously, a salable quantity and allotment percentage for Scotch
spearmint oil was established in a final rule published in the Federal
Register on May 8, 2014 (79 FR 26359) and subsequently increased in an
interim rule published in the Federal Register on October 31, 2014 (79
FR 64657). At the February 18, 2015, meeting, the Committee considered
the current production, inventory, and marketing conditions for Scotch
spearmint oil. After receiving reports from the Committee staff and
comments from the industry, the consensus of the Committee was that the
previously increased salable quantity and allotment percentage for
Scotch spearmint oil was appropriate for the current market conditions.
As such, the Committee took no further action with regards to Scotch
spearmint oil for the 2014-2015 marketing year.
This rule relaxes the regulation of Native spearmint oil and will
allow producers to meet market demand while improving producer returns.
In conjunction with the issuance of this rule, the Committee's revised
marketing policy statement for the 2014-2015 marketing year has been
reviewed by USDA. The Committee's marketing policy statement, a
requirement whenever the Committee recommends implementing volume
regulations or recommends revisions to existing volume regulations,
meets the intent of Sec. 985.50 of the order. During its discussion of
revising the 2014-2015 salable quantities and allotment percentages,
the Committee considered: (1) The estimated quantity of salable oil of
each class held by producers and handlers; (2) the estimated demand for
each class of oil; (3) the prospective production of each class of oil;
(4) the total of allotment bases of each class of oil for the current
marketing year and the estimated total of allotment bases of each class
for the ensuing marketing year; (5) the quantity of reserve oil, by
class, in storage; (6) producer prices of oil, including prices for
each class of oil; and (7) general market conditions for each class of
oil, including whether the estimated season average price to producers
is likely to exceed parity. Conformity with USDA's ``Guidelines for
Fruit, Vegetable, and Specialty Crop Marketing Orders'' has also been
reviewed and confirmed.
The increase in the Native spearmint oil salable quantity and
allotment percentage allows for anticipated market needs for that class
of oil. In determining anticipated market needs, the Committee
considered changes and trends in historical sales, production, and
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
[[Page 16551]]
small entities acting on their own behalf.
There are 8 spearmint oil handlers subject to regulation under the
order, and approximately 39 producers of Scotch spearmint oil and
approximately 91 producers of Native spearmint oil in the regulated
production area. Small agricultural service firms are defined by the
Small Business Administration (SBA) as those having annual receipts of
less than $7,000,000, and small agricultural producers are defined as
those having annual receipts of less than $750,000 (13 CFR 121.201).
Based on the SBA's definition of small entities, the Committee
estimates that only two of the eight handlers regulated by the order
could be considered small entities. Most of the handlers are large
corporations involved in the international trading of essential oils
and the products of essential oils. In addition, the Committee
estimates that 22 of the 39 Scotch spearmint oil producers and 29 of
the 91 Native spearmint oil producers could be classified as small
entities under the SBA definition. Thus, the majority of handlers and
producers of Far West spearmint oil may not be classified as small
entities.
The use of volume control regulation allows the spearmint oil
industry to fully supply spearmint oil markets while avoiding the
negative consequences of over-supplying these markets. Without volume
control regulation, the supply and price of spearmint oil would likely
fluctuate widely. Periods of oversupply could result in low producer
prices and a large volume of oil stored and carried over to future crop
years. Periods of undersupply could lead to excessive price spikes and
could drive end users to source flavoring needs from other markets,
potentially causing long-term economic damage to the domestic spearmint
oil industry. The marketing order's volume control provisions have been
successfully implemented in the domestic spearmint oil industry since
1980 and provide benefits for producers, handlers, manufacturers, and
consumers.
This rule increases the quantity of Native spearmint oil that
handlers may purchase from, or handle on behalf of, producers during
the 2014-2015 marketing year, which ends on May 31, 2015. The 2014-2015
Native spearmint oil salable quantity was initially established at
1,090,821 pounds and the allotment percentage initially set at 46
percent. The salable quantity was subsequently increased to 1,280,561
pounds and the allotment percentage to 54 percent. This rule further
increases the Native spearmint oil salable quantity to 1,351,704 pounds
and the allotment percentage to 57 percent.
Based on the information and projections available at the February
18, 2015, meeting, the Committee considered a number of alternatives to
this increase. The Committee not only considered leaving the salable
quantity and allotment percentage unchanged, but also considered other
potential levels of increase. The Committee reached its recommendation
to increase the salable quantity and allotment percentage for Native
spearmint oil after careful consideration of all available information
and input from all interested industry participants, and believes that
the levels recommended will achieve the objectives sought. Without the
increase, the Committee believes the industry would not be able to
satisfactorily meet market demand.
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 Crop Marketing
Orders. 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 rule will not impose any additional reporting or recordkeeping
requirements on either small or large spearmint oil 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.
In addition, USDA has not identified any relevant Federal rules
that duplicate, overlap or conflict with this rule.
Further, 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. Like all
Committee meetings, the February 18, 2015, meeting was a public
meeting, and all entities, both large and small, were able to express
their views on this issue. Finally, interested persons are invited to
submit information on 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.
This rule invites comments on a change to the salable quantity and
allotment percentage for Native spearmint oil for the 2014-2015
marketing year. Any comments received will be considered prior to
finalization of this rule.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
this interim rule, as hereinafter set forth, will tend to effectuate
the declared policy of the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register
because: (1) This rule increases the quantity of Native spearmint oil
that may be marketed during the marketing year, which ends on May 31,
2015; (2) the current quantity of Native spearmint oil may be
inadequate to meet demand for the 2014-2015 marketing year, thus making
the additional oil available as soon as is practicable will be
beneficial to both handlers and producers; (3) the Committee
recommended these changes at a public meeting and interested parties
had an opportunity to provide input; and (4) this rule provides a 60-
day comment period, and any comments received will be considered prior
to finalization of this rule.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements, Spearmint oil.
For the reasons set forth in the preamble, 7 CFR part 985 is
amended as follows:
PART 985--MARKETING ORDER REGULATING THE HANDLING OF SPEARMINT OIL
PRODUCED IN THE FAR WEST
0
1. The authority citation for 7 CFR part 985 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
[[Page 16552]]
0
2. In Sec. 985.233, revise paragraph (b) to read as follows:
Sec. 985.233 Salable quantities and allotment percentages--2014-2015
marketing year.
* * * * *
(b) Class 3 (Native) oil--a salable quantity of 1,351,704 pounds
and an allotment percentage of 57 percent.
Dated: March 24, 2015.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2015-07114 Filed 3-27-15; 8:45 am]
BILLING CODE P
