Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Salable Quantities and Allotment Percentages for the 2022-2023 Marketing Year, 8211-8217 [2022-03092]
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Proposed Rules
Federal Register
Vol. 87, No. 30
Monday, February 14, 2022
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–SC–21–0086; SC22–985–1
PR]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Salable Quantities and
Allotment Percentages for the 2022–
2023 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Proposed rule.
AGENCY:
This proposed rule would
implement a recommendation from the
Far West Spearmint Oil Administrative
Committee (Committee) to establish
salable quantities and allotment
percentages for Class 1 (Scotch) and
Class 3 (Native) spearmint oil produced
in Washington, Idaho, Oregon, and
designated parts of Nevada and Utah
(the Far West) for the 2022–2023
marketing year.
DATES: Comments must be received by
April 15, 2022.
ADDRESSES: Interested persons are
invited to submit written comments
concerning this proposal. Comments
must be submitted via the internet at:
https://www.regulations.gov. All
comments should reference the
document number and the date and
page number of this issue of the Federal
Register. All comments submitted in
response to this proposed rule will be
included in the record and the identity
of the individuals or entities submitting
the comments will be made public on
the internet at the address provided
above.
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SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Joshua R. Wilde, Marketing Specialist,
or Gary Olson, Regional Director,
Northwest Marketing Field Office,
Market Development Division, Specialty
Crops Program, AMS, USDA;
Telephone: (503) 326–2724, or Email:
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Joshua.R.Wilde@usda.gov or
GaryD.Olson@usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Richard Lower,
Market Development Division, Specialty
Crops Program, AMS, USDA, 1400
Independence Avenue SW, STOP 0237,
Washington, DC 20250–0237;
Telephone: (202) 720–2491, or Email:
Richard.Lower@usda.gov.
SUPPLEMENTARY INFORMATION: This
proposed action, pursuant to 5 U.S.C.
553, proposes an amendment to
regulations issued to carry out a
marketing order as defined in 7 CFR
900.2(j). This proposed rule amends
Marketing Order No. 985 (7 CFR part
985), regulating the handling of
spearmint oil produced in the Far West.
Part 985 (referred to as 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 Committee
locally administers the Order and is
comprised of spearmint oil producers
operating within the area of production,
and a public member.
The Department of Agriculture
(USDA) is issuing this proposed rule in
conformance with Executive Orders
12866 and 13563. Executive Orders
12866 and 13563 direct agencies to
assess the costs and benefits of
regulatory alternatives and, if regulation
is necessary, to select a regulatory
approach likely to maximize net
benefits (including potential economic,
environmental, public health and safety,
and other advantages; distributive
impacts; and equity).
Executive Order 13563 is
supplemental to and reaffirms the
principles, structures, and definitions of
Executive Order 12866. It emphasizes
the importance of seeking the views of
those who are likely to be affected by
proposed regulation, providing an
opportunity for public comment, and
basing regulatory actions on a
consideration of objective scientific,
technical, and economic data.
This proposed action falls within a
category of regulatory actions that the
Office of Management and Budget
(OMB) exempted from Executive Order
12866 review.
This proposed rule has been reviewed
in accordance with Executive Order
13175, Consultation and Coordination
with Indian Tribal Governments, which
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requires agencies to consider whether
their rulemaking actions would have
tribal implications. Agricultural
Marketing Service (AMS) has
determined that this proposed rule is
unlikely to have substantial direct
effects on one or more Indian tribes, on
the relationship between the Federal
Government and Indian tribes, or on the
distribution of power and
responsibilities between the Federal
Government and Indian tribes.
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
quantities and allotment percentages for
Scotch and Native spearmint oil for the
2022–2023 marketing year, which
begins on June 1, 2022.
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. Such
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.
Pursuant to the requirements in
§ 985.50 of the Order, the Committee
meets each year to consider supply and
demand of spearmint oil and to adopt a
marketing policy for the ensuing
marketing year. In determining such
marketing policy, the Committee
considers several factors, including, but
not limited to, the current and projected
supply of oil, estimated future demand,
production costs, and producer prices
for both classes of spearmint oil. Input
from spearmint oil handlers and
producers are considered as well.
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Pursuant to the provisions in § 985.51,
when the Committee’s marketing policy
considerations indicate a need to
establish or to maintain stable market
conditions through volume regulation,
the Committee subsequently
recommends to USDA the establishment
of a salable quantity and allotment
percentage for such class or classes of
oil for the upcoming marketing year.
Recommendations for volume control
are intended to ensure market
requirements for Far Wear spearmint oil
are satisfied and orderly marketing
conditions are maintained.
Section 985.12 defines salable
quantity as the total quantity of each
class of oil (Scotch or Native) which
handlers may purchase from, or handle
on behalf of, producers during a given
marketing year. A producer’s allotment
base is their calculated share of the
spearmint oil market based on a
statistical representation of past
spearmint oil production, with
accommodation for reasonable, normal
adjustments to such base as prescribed
by the Committee and approved by
USDA. Each producer’s annual
allotment of salable spearmint oil is
calculated by multiplying their
respective allotment base for each class
of spearmint oil by the allotment
percentage for that class of spearmint
oil. The allotment percentage is the
percentage used to calculate each
producer’s prorated share of the salable
quantity and is derived by dividing the
salable quantity for each class of
spearmint oil by the total of all
producers’ allotment base for the same
class of oil. The total allotment base is
revised each year on June 1 to account
for producer base being lost as a result
of the ‘‘bona fide effort’’ production
provision of § 985.53(e) and additional
base made available pursuant to the
provisions of § 985.153.
Salable quantities and allotment
percentages are established at levels
intended to fulfill market requirements
and to maintain orderly marketing
conditions. Committee
recommendations for volume control
are made in advance of the upcoming
marketing year in which the regulations
are to be effective, thereby allowing
producers ample time to adjust their
production decisions accordingly.
The Committee met on October 13,
2021, to consider its marketing policy
for the 2022–2023 marketing year. At
that meeting, the Committee determined
that, based on the current market and
supply conditions, volume regulation
for both classes of oil would be
necessary. The Committee unanimously
recommended a salable quantity and
allotment percentage for Scotch
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spearmint oil of 832,546 pounds and 37
percent and a salable quantity and
allotment percentage for Native
spearmint oil of 1,101,269 pounds and
43 percent.
This proposed action would establish
the amount of Scotch and Native
spearmint oil that handlers may
purchase from, or handle on behalf of,
producers during the 2022–2023
marketing year, which begins on June 1,
2022. Salable quantities and allotment
percentages have been placed into effect
each season since the Order’s inception
in 1980.
Scotch Spearmint Oil
The Committee recommended a
Scotch spearmint oil salable quantity of
832,546 pounds and an allotment
percentage of 37 percent for the 2022–
2023 marketing year. The proposed
2022–2023 marketing year salable
quantity of 832,546 pounds is 14,138
pounds less than the 2021–2022
marketing year salable quantity of
846,684 pounds. The allotment
percentage, recommended at 37 percent
for the 2022–2023 marketing year, is one
percent less than the percentage in
effect the previous year. The total
allotment base for the coming marketing
year is estimated to be 2,250,124
pounds. This figure represents a onepercent increase over the revised 2021–
2022 marketing year total allotment base
of 2,227,846 pounds. The salable
quantity (832,546 pounds) is the
product of total allotment base
(2,250,124 pounds) times the allotment
percentage (37 percent).
The Committee considered several
factors in making its recommendation,
including the current and projected
future supply, estimated future demand,
production costs, and producer prices.
The Committee’s recommendation also
accounts for the established acreage of
Scotch spearmint, consumer demand,
existing carry-in, reserve pool volume,
and increased production in competing
markets.
According to the Committee, as costs
of production have increased and
spearmint oil prices have decreased,
many producers have forgone new
plantings of Scotch spearmint. This has
resulted in a significant decline in
production of Scotch spearmint oil in
recent years. Production has decreased
from 1,113,346 pounds produced in
2016 to an estimated 556,559 pounds of
Scotch spearmint production in 2021.
Industry reports indicate that trade
demand for Far West Scotch spearmint
oil has diminished over the past five
years as international markets for
spearmint-flavored products have
slowed. Sales of Far West Scotch
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spearmint oil have declined from
1,060,232 pounds during the 2014–2015
marketing year to 717,952 pounds in
2018–2019, and further to 488,484
pounds in 2020–2021, the last full year
of available data. In addition to
declining spearmint oil demand,
increasing production of Scotch
spearmint oil in competing markets,
most notably by Canadian producers,
has put additional downward pressure
on the Far West Scotch spearmint oil
market.
Given the anticipated market
conditions for the coming year, the
Committee estimates that Scotch
spearmint oil trade demand for the
2022–2023 marketing year trade will be
650,000 pounds, which is 25,000
pounds higher than the prior year
estimate and right in line with the 5year moving sales average of 650,033
pounds. Should the proposed volume
regulation levels prove insufficient to
adequately supply the market, the
Committee has the authority to
recommend intra-seasonal increases, as
it has in previous marketing years.
The Committee calculated the
minimum salable quantity of Scotch
spearmint oil that would be required
during the 2022–2023 marketing year
(311,105 pounds) by subtracting the
estimated salable carry-in on June 1,
2022, (338,895 pounds) from the
estimated trade demand (650,000
pounds). This minimum salable
quantity represents the estimated
minimum amount of Scotch spearmint
oil that would be needed to satisfy
estimated trade demand for the coming
year. To ensure that the market would
be fully supplied, the Committee
recommended a 2022–2023 marketing
year salable quantity of 832,546 pounds.
The recommended salable quantity,
combined with an estimated 338,895
pounds of salable carry-in from the
previous year, would yield a total
available supply of 1,171,441 pounds of
Scotch spearmint oil for the 2022–2023
marketing year. With the recommended
salable quantity and current market
environment, the Committee estimates
that as much as 521,441 pounds of
salable Scotch spearmint oil could be
carried into the 2022–2023 marketing
year.
Salable carry-in is the primary
measure of excess spearmint oil supply
under the Order, as it represents
overproduction in prior years that is
currently available to the market
without restriction. Under volume
regulation, spearmint oil that is
designated as salable continues to be
available to the market until it is sold
and may be marketed at any time at the
discretion of the owner.
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The Committee estimates that there
will be 338,895 pounds of salable carryin of Scotch spearmint oil on June 1,
2022. If current market conditions are
maintained and the Committee’s
projections are correct, salable carry-in
would increase to 521,441 pounds at the
beginning of the 2022–2023 marketing
year. This level would be above the
quantity that the Committee generally
considers favorable (150,000 pounds).
However, the Committee believes that,
given the current economic conditions
in the Scotch spearmint oil industry,
some Scotch spearmint oil producers
may not produce enough oil in the
2022–2023 marketing year to fill all of
their annual allotment. The Committee
estimates that as much as 280,671
pounds of 2021–2022 marketing year
annual allotment may not be filled by
producers. While the Committee has not
projected unused base allotment for the
upcoming 2022–2023 marketing year, it
anticipates that the actual quantity of
Scotch spearmint oil carried into the
following marketing year will be less
than the quantity calculated above
(521,441 pounds).
Spearmint oil held in reserve is oil
that has been produced in excess of a
producer’s annual allotment, either in
the current marketing year or in prior
years. After December 1 of each
marketing year, reserve pool oil is not
available to the market in the current
marketing year without an increase in
the salable quantity and allotment
percentage. However, reserve oil may be
released for limited market development
projects with approval of the Secretary.
Oil held in the reserve pool is another
indicator of excess supply. Scotch
spearmint oil held in the reserve pool
was 72,361 pounds as of May 31, 2021,
up from 67,645 pounds as of May 31,
2020. This quantity of reserve pool oil
should be an adequate buffer to supply
the market, if necessary, should the
industry experience an unexpected
increase in demand.
The Committee recommended an
allotment percentage of 37 percent for
the 2022–2023 marketing year for
Scotch spearmint oil. During its October
13, 2021, meeting, the Committee
calculated an initial allotment
percentage by dividing the minimum
required salable quantity (311,105
pounds) by the total estimated allotment
base (2,250,124 pounds), resulting in
13.8 percent. However, producers and
handlers at the meeting indicated that
the computed percentage (13.8 percent)
might not adequately supply potential
2022–2023 Scotch spearmint oil market
demand and may also result in a less
than desirable carry-in for the
subsequent marketing year. After
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deliberation, the Committee
recommended an allotment percentage
of 37 percent. The total estimated
allotment base (2,250,124 pounds) for
the 2022–2023 marketing year,
multiplied by the recommended salable
allotment percentage (37 percent),
yields 832,546 pounds, which is the
recommended salable quantity for the
2022–2023 marketing year.
The 2022–2023 marketing year
computational data for the Committee’s
recommendations is detailed below.
(A) Estimated carry-in of Scotch
spearmint oil on June 1, 2022: 338,895
pounds. This figure is the difference
between the 2021–2022 marketing year
total available supply of 963,895 pounds
and the revised 2021–2022 marketing
year estimated trade demand of 625,000
pounds.
(B) Estimated trade demand of Scotch
spearmint oil for the 2022–2023
marketing year: 650,000 pounds. This
figure was established at the Committee
meeting held on October 13, 2021.
(C) Salable quantity of Scotch
spearmint oil required from the 2022–
2023 marketing year production:
311,105 pounds. This figure is the
difference between the estimated 2022–
2023 marketing year trade demand
(650,000 pounds) and the estimated
carry-in on June 1, 2021 (338,895
pounds). This salable quantity
represents the minimum amount of
Scotch spearmint oil that would be
needed to satisfy estimated demand for
the coming year.
(D) Total estimated Scotch spearmint
oil allotment base of for the 2022–2023
marketing year: 2,250,124 pounds. This
figure represents a one-percent increase
over the 2021–2022 total actual
allotment base of 2,227,846 pounds, as
prescribed by § 985.53(d). The onepercent increase equals 22,278 pounds.
This total estimated allotment base is
revised each year on June 1 in
accordance with § 985.53(e).
(E) Computed Scotch spearmint oil
allotment percentage for the 2022–2023
marketing year: 13.8 percent. This
percentage is computed by dividing the
minimum required salable quantity
(311,105 pounds) by the total estimated
allotment base (2,250,124 pounds).
(F) Recommended Scotch spearmint
oil allotment percentage for the 2022–
2023 marketing year: 37 percent. This is
the Committee’s recommendation and is
based on the computed allotment
percentage (13.8 percent) and input
from producers and handlers at the
October 13, 2021, meeting. The
recommended 37 percent allotment
percentage reflects the Committee’s
belief that the computed percentage
(13.8 percent) may not adequately
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supply the anticipated 2022–2023
marketing year Scotch spearmint oil
market demand.
(G) Recommended Scotch spearmint
oil salable quantity for the 2022–2023
marketing year: 832,546 pounds. This
figure is the product of the
recommended salable allotment
percentage (37 percent) and the total
estimated allotment base (2,250,124
pounds) for the 2022–2023 marketing
year.
(H) Estimated total available supply
of Scotch spearmint oil for the 2022–
2023 marketing year: 1,171,441 pounds.
This figure is the sum of the 2022–2023
marketing year recommended salable
quantity (832,546 pounds) and the
estimated carry-in on June 1, 2021
(338,895 pounds).
For the reasons stated above, the
Committee believes that the
recommended salable quantity and
allotment percentage would adequately
satisfy trade demand, would result in a
reasonable carry-in for the following
year, and would contribute to the
orderly marketing of Scotch spearmint
oil.
Native Spearmint Oil
The Committee recommended a
Native spearmint oil salable quantity of
1,101,269 pounds and an allotment
percentage of 43 percent for the 2022–
2023 marketing year. These figures are,
respectively, 162,872 pounds and 6
percentage points higher than the levels
established for the 2021–2022 marketing
year. The Committee utilized handlers’
estimated trade demand of Native
spearmint oil for the coming year,
historical and current Native spearmint
oil production, inventory statistics, and
international market data obtained from
consultants for the spearmint oil
industry to arrive at these
recommendations.
The Committee anticipates that 2021
Native spearmint oil production will
total 985,797 pounds, down
substantially from the previous year’s
production of 1,181,230 pounds.
Committee records indicate that
spearmint producing acres in the Far
West have declined from a recent high
of 9,013 acres in 2019 to an estimated
6,275 acres of Native spearmint
production 2021.
However, sales of Native spearmint
oil recovered from a 10-year low of
1,076,906 pounds in the 2019–2020
marketing year to 1,332,260 pounds in
2020–2021, the last full year of reported
sales. The Committee estimates that
trade demand for Native spearmint oil
will be 1,200,000 pounds for the 2022–
2023 marketing year, which is
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somewhat less than the 5-year sales
average of 1,301,490 pounds.
The Committee expects that 284,357
pounds of salable Native spearmint oil
from prior years will be carried into the
2022–2023 marketing year. This amount
is down from the 412,095 pounds of
salable oil carried into the 2021–2022
marketing year, but still above the level
that the Committee generally considers
favorable.
Further, the Committee estimates that
there will be 1,272,854 pounds of Native
spearmint oil in the reserve pool at the
beginning of the 2022–2023 marketing
year. This figure is 73,062 pounds
higher than the quantity of reserve pool
oil held by producers on June 1, 2021,
and well above the level that the
Committee believes is optimal.
Generally, reserve pool oil has been
steadily increasing over the past several
marketing years, climbing from 996,050
pounds of reserve oil since the start of
the 2016–2017 marketing year.
The Committee expects end users of
Native spearmint oil to continue to rely
on Far West production as their primary
source of high-quality Native spearmint
oil. Overseas production of Native
spearmint has declined in recent years.
As a result, U.S. exports of Native
spearmint oil have been steadily
increasing since 2018. However,
increased domestic production of Native
spearmint from regions outside of the
Far West production area has created
additional domestic competition for
market share. For instance, there were
fewer than 2,000 acres of Native
spearmint production in the U.S.
Midwest region in 2016, which
compares to over 10,000 acres of Native
spearmint oil production in the Far
West. However, 2021 estimates show
that Far West acreage has declined to
approximately 6,275 acres, compared to
acreage increasing to around 5,000 acres
in the Midwest. This situation has
contributed to declining trade demand
for Far West Native spearmint oil and
led to downward pressure on producer
prices.
The Committee chose to be cautiously
optimistic in the establishment of its
trade demand estimate for the 2022–
2023 marketing year to ensure that the
market would be adequately supplied.
At the October 13, 2021, meeting, the
Committee estimated the 2022–2023
marketing year Native spearmint oil
trade demand to be 1,200,000 pounds.
This figure is based on input provided
by producers at nine production area
meetings held in early October 2021, as
well as estimates provided by handlers
and other meeting participants. This
figure represents an increase of 134,000
pounds from the previous year’s revised
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trade demand estimate. The average
estimated trade demand for Native
spearmint oil derived from the area
producer meetings was 1,173,333
pounds, whereas the handlers’ estimates
ranged from 950,000 to 1,300,000
pounds. The average of Native
spearmint oil sales over the last three
years was 1,301,490 pounds. The
quantity marketed over the most recent
full marketing year, 2020–2021, was
1,332,260 pounds.
The estimated June 1, 2022, carry-in
of 284,357 pounds of Native spearmint
oil, plus the recommended 2022–2023
marketing year salable quantity of
1,101,269 pounds, would result in an
estimated total available supply of
1,385,626 pounds of Native spearmint
oil during the 2022–2023 marketing
year. With the corresponding estimated
trade demand of 1,200,000 pounds, the
Committee projects that 185,626 pounds
of oil will be carried into the 2023–2024
marketing year. This would result in a
year-over-year decrease of 98,731
pounds. The Committee estimates that
there will be 1,272,854 pounds of Native
spearmint oil held in the reserve pool at
the beginning of the 2022–2023
marketing year. Should the industry
experience an unexpected increase in
trade demand, oil in the Native
spearmint oil reserve pool could be
released through an intra-seasonal
increase to satisfy that demand.
The Committee recommended an
allotment percentage of 43 percent for
the 2022–2023 marketing year. During
its October 13, 2021, meeting, the
Committee calculated an initial
allotment percentage of 35.8 percent by
dividing the minimum required salable
quantity to satisfy estimated trade
demand (915,643 pounds) by the total
allotment base (2,561,090 pounds).
However, producers and handlers at the
meeting expressed that the computed
percentage of 35.8 percent may not
adequately supply the potential 2022–
2023 marketing year Native spearmint
oil market demand or result in adequate
carry-in for the subsequent marketing
year. After deliberation, the Committee
increased the recommended allotment
percentage to 43 percent. The total
estimated allotment base (2,561,090
pounds) for the 2022–2023 marketing
year multiplied by the recommended
salable allotment percentage (43
percent) yields 1,101,269 pounds, the
recommended salable quantity for the
year.
The 2022–2023 marketing year
computational data for the Committee’s
recommendations is further outlined
below.
(A) Estimated carry-in of Native
spearmint oil on June 1, 2022: 284,357
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pounds. This figure is the difference
between the 2021–2022 marketing year
total available supply of 1,350,357
pounds and the revised 2021–2022
marketing year estimated trade demand
of 1,066,000 pounds.
(B) Estimated trade demand of Native
spearmint oil for the 2022–2023
marketing year: 1,200,000 pounds. This
estimate was established by the
Committee at the October 13, 2021
meeting.
(C) Salable quantity of Native
spearmint oil required from the 2022–
2023 marketing year production:
915,643 pounds. This figure is the
difference between the 2022–2023
marketing year estimated trade demand
(1,200,000 pounds) and the estimated
carry-in on June 1, 2022 (284,357
pounds). This is the minimum amount
of Native spearmint oil that the
Committee believes would be required
to meet the anticipated 2022–2023
marketing year trade demand.
(D) Total estimated allotment base of
Native spearmint oil for the 2022–2023
marketing year: 2,561,090 pounds. This
figure represents a one-percent increase
over the 2021–2022 total actual
allotment base of 2,535,733 pounds as
prescribed in § 985.53(d). The onepercent increase equals 25,357 pounds
of oil. This estimate is revised each year
on June 1, to adjust for the bona fide
effort production provisions of
§ 985.53(e).
(E) Computed Native spearmint oil
allotment percentage for the 2022–2023
marketing year: 35.8 percent. This
percentage is calculated by dividing the
required salable quantity (915,643
pounds) by the total estimated allotment
base (2,561,090 pounds) for the 2022–
2023 marketing year.
(F) Recommended Native spearmint
oil allotment percentage for the 2022–
2023 marketing year: 43 percent. This is
the Committee’s recommendation based
on the computed allotment percentage
(35.8 percent) and input from producers
and handlers at the October 13, 2021
meeting. The recommended 43 percent
allotment percentage is also based on
the Committee’s belief that the
computed percentage (35.8 percent) may
not adequately supply the potential
market for Native spearmint oil in the
2022–2023 marketing year or allow for
salable Native spearmint oil to be
carried into the beginning of the 2023–
2024 marketing year.
(G) Recommended Native spearmint
oil 2022–2023 marketing year salable
quantity: 1,101,269 pounds. This figure
is the product of the recommended
allotment percentage (43 percent) and
the total estimated allotment base
(2,561,090 pounds).
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(H) Estimated available supply of
Native spearmint oil for the 2022–2023
marketing year: 1,385,626 pounds. This
figure is the sum of the 2022–2023
recommended salable quantity
(1,101,269 pounds) and the estimated
carry-in on June 1, 2022 (284,357
pounds). This amount could be
increased, as needed, through an intraseasonal increase in the salable quantity
and allotment percentage.
The Committee’s recommended
Scotch and Native spearmint oil salable
quantities and allotment percentages of
832,546 pounds and 37 percent, and
1,101,269 pounds and 43 percent,
respectively, would match the available
supply of each class of spearmint oil to
the estimated demand of each, thus
avoiding extreme fluctuations in
inventories and prices. This proposed
rule is similar to regulations issued in
prior seasons.
The salable quantities in this
proposed rule are not expected to cause
a shortage of either class of spearmint
oil. Any unanticipated or additional
market demand for either class of
spearmint oil which may develop
during the marketing year could be
satisfied by an intra-seasonal increase in
the salable quantity and corresponding
allotment percentage. The Order
contains a provision in § 985.51 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 marketing year
may transfer such excess spearmint oil
to producers who have produced less
than their annual allotment. In addition,
on December 1 of each year, producers
who have not transferred their excess
spearmint oil to other producers must
place their excess spearmint oil
production into the reserve pool to be
released in the future, in accordance
with market needs and under the
Committee’s direction.
In conjunction with the issuance of
this proposed rule, USDA has reviewed
the Committee’s marketing policy
statement for the 2022–2023 marketing
year. The Committee’s marketing policy
statement, a requirement whenever the
Committee recommends volume
regulation, meets the requirements of
§§ 985.50 and 985.51.
The establishment of the proposed
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 proposal
would also provide producers with
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information regarding the amount of
spearmint oil that should be produced
for the 2022–2023 season to meet
anticipated market demand.
Initial Regulatory Flexibility Act
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
proposed rule 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 approximately 39 producers
of Scotch spearmint oil and 93
producers of Native spearmint oil
operating within the regulated
production area. In addition, there are
approximately 9 spearmint oil handlers
(both Scotch and Native spearmint)
subject to regulation under the Order.
Small agricultural service firms are
defined by the Small Business
Administration (SBA) as those having
annual receipts of less than $30,000,000,
and small agricultural producers are
defined as those having annual receipts
of less than $1,000,000 (13 CFR
121.201).
The Committee reported that recent
producer prices for spearmint oil have
ranged from $14.00 to $17.00 per
pound. The National Agricultural
Statistics Service (NASS) reported that
the 2020 U.S. season average spearmint
oil producer price per pound was
$16.90. Spearmint oil utilization for the
2020–2021 marketing year, as reported
by the Committee, was 488,484 pounds
and 1,332,260 pounds for Scotch and
Native spearmint oil, respectively, for a
total of 1,820,744 pounds. Multiplying
$16.90 per pound by 2020–2021
marketing year spearmint oil utilization
of 1,820,744 pounds yields a crop value
estimate of about $30.77 million.
Given the accounting requirements for
the volume regulation provisions of the
Order, the Committee maintains
accurate records of each producer’s
production and sales. Using the $16.90
average spearmint oil price, and
Committee production data for each
producer, the Committee estimates that
37 of the 39 Scotch spearmint oil
producers and 92 of the 93 Native
spearmint oil producers could be
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classified as small entities under the
SBA definition.
There is no third party or
governmental entity that collects and
reports spearmint oil prices received by
spearmint oil handlers. However, the
Committee estimates an average
spearmint oil handling markup at
approximately 20 percent of the price
received by producers. Twenty percent
of the 2020 producer price ($16.90) is
$3.38 which results in a handler f.o.b.
price per pound estimate of $20.28
($16.90 + $3.38).
Multiplying this estimated handler
f.o.b. price by the 2020–2021 marketing
year total spearmint oil utilization of
1,820,744 pounds results in an
estimated handler-level spearmint oil
value of $36.92 million. Dividing this
figure by the number of handlers (9)
yields estimated average annual handler
receipts of about $4.1 million, which is
well below the SBA threshold for small
agricultural service firms.
Furthermore, using confidential data
on pounds handled by each handler,
and the abovementioned estimated
handler price per pound, the Committee
reported that it is not likely that any of
the nine handlers had 2020–2021
marketing year spearmint oil sales that
exceeded the $30 million SBA
threshold.
Therefore, in view of the foregoing,
the majority of producers of spearmint
oil may be classified as small entities,
and all of the handlers of spearmint oil
may be classified as small entities.
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
2022–2023 marketing year. The
Committee recommended this proposed
action to help maintain stability in the
spearmint oil market by matching
supply to estimated demand, thereby
avoiding extreme fluctuations in
supplies and prices. Establishing
quantities that may be purchased or
handled during the marketing year
through volume regulation allows
producers to coordinate their spearmint
oil production with the expected market
demand. Authority for this proposal is
provided in §§ 985.50, 985.51, and
985.52 of the Order.
The Committee estimates the total
trade demand for the 2022–2023
marketing year for both classes of oil at
1,850,000 pounds. In addition, the
Committee expects that the combined
salable carry-in for both classes of
spearmint oil will be 623,252 pounds.
As such, the combined required salable
quantity for the 2022–2023 marketing
year is estimated to be 1,226,748 pounds
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(1,850,000 pounds trade demand less
623,252 pounds carry-in). Under
volume regulation, total sales of
spearmint oil by producers for the
2022–2023 marketing year would be
held to 2,557,067 pounds (the
recommended salable quantity for both
classes of spearmint oil of 1,933,815
pounds plus 623,252 of carry-in).
This total available supply of
2,557,067 pounds should be more than
adequate to supply the 1,850,000
pounds of anticipated total trade
demand for spearmint oil. In addition,
as of May 31, 2021, the total reserve
pool for both classes of spearmint oil
stood at 1,272,153 pounds. That
quantity is expected to remain relatively
unchanged over the course of the 2021–
2022 marketing year, with current
Committee reserve pool estimates
totaling 1,336,471 pounds. Should trade
demand increase unexpectedly during
the 2022–2023 marketing year, reserve
pool spearmint oil could be released
into the market to supply that increase
in demand.
The recommended allotment
percentages, upon which 2022–2023
marketing year annual allotments are
based, are 37 percent for Scotch
spearmint oil and 43 percent for Native
spearmint oil. Without volume
regulation, producers would not be held
to these allotment levels, and could sell
unrestricted quantities of spearmint oil.
The USDA econometric model used to
evaluate the Far West spearmint oil
market estimated that the season
average producer price per pound (from
both classes of spearmint oil) would
decline about $2.70 per pound without
volume regulation. The surplus
situation for the spearmint oil market
that would exist without volume
regulation in the 2022–2023 marketing
year also would likely dampen
prospects for improved producer prices
in future years because of the excessive
buildup in stocks.
In addition, spearmint oil prices
would likely fluctuate with greater
amplitude in the absence of volume
regulation. The coefficient of variation,
or CV (a standard measure of
variability), of Far West spearmint oil
producer prices for the period 1980–
2020 (the years in which the Order has
been in effect), is 24 percent, compared
to 49 percent for the 20-year period
(1960–1979) immediately prior to the
establishment of the Order. Since higher
CV values correspond to greater
variability, this is an indicator of the
price stabilizing impact of the Order.
The use of volume regulation allows
the industry to fully supply spearmint
oil markets while avoiding the negative
consequences of over-supplying these
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markets. The use of volume regulation
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 rejected the idea of
not regulating volume for either class of
spearmint oil because of the severe,
price-depressing effects that would
likely occur without volume regulation.
The Committee also discussed and
considered salable quantities and
allotment percentages that were above
and below the levels that were
eventually recommended for both
classes of spearmint oil. Ultimately, the
action recommended by the Committee
was to slightly reduce the allotment
percentage and salable quantity for
Scotch spearmint oil and to increase the
salable quantity and allotment
percentage for Native spearmint oil from
the levels established for the 2021–2022
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
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for the 2022–2023 and future marketing
years.
Costs to producers and handlers, large
and small, resulting from this proposal
are expected to be offset by the benefits
derived from a more stable market and
increased returns. The benefits of this
rule are expected to be equally available
to all producers and handlers regardless
of their size.
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 OMB and
assigned OMB No. 0581–0178,
Vegetable and Specialty Crops. No
changes are necessary in those
requirements as a result of this proposed
action. 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 Scotch spearmint oil
and Native spearmint oil produced in
the Far West during the 2022–2023
marketing year. Accordingly, this
proposal 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. In addition, USDA has
not identified any relevant Federal rules
that duplicate, overlap, or conflict with
this proposed rule.
AMS is committed to complying with
the E-Government Act, to promote the
use of the internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
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 October 13, 2021, meeting
was a public meeting and all entities,
both large and small, were able to
express views on this issue. Interested
persons are invited to submit comments
on this proposed rule, including the
regulatory and informational impacts of
this proposed 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/
rules-regulations/moa/small-businesses.
Any questions about the compliance
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guide should be sent to Richard Lower
at the previously mentioned address in
the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant
material presented, including the
information and recommendations
submitted by the Council and other
available information, USDA has
determined that this proposed rule is
consistent with and will effectuate the
purposes of the Act.
A 60-day comment period is provided
to allow interested persons to respond
to this proposal. All written comments
timely received will be considered
before a final determination is made on
this matter.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, the Agriculture Marketing
Services proposes to amend 7 CFR part
985 as follows:
PART 985—MARKETING ORDER
REGULATING THE HANDLING OF
SPEARMINT OIL PRODUCED IN THE
FAR WEST
1. The authority citation for 7 CFR
part 985 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
■
2. Add § 985.237 to read as follows:
§ 985.237 Salable quantities and allotment
percentages—2022–2023 marketing year.
The salable quantity and allotment
percentage for each class of spearmint
oil during the marketing year beginning
on June 1, 2022, shall be as follows:
(a) Class 1 (Scotch) oil—a salable
quantity of 832,546 pounds and an
allotment percentage of 37 percent.
(b) Class 3 (Native) oil—a salable
quantity of 1,101,269 pounds and an
allotment percentage of 43 percent.
Erin Morris,
Associate Administrator, Agricultural
Marketing Service.
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DEPARTMENT OF AGRICULTURE
Rural Business-Cooperative Service
7 CFR Part 4284
[Docket No. RBS–21–BUSINESS–0039]
Rural Innovation Stronger Economy
(RISE) Grant Program for FY 2022;
Correction
Rural Business-Cooperative
Service, Department of Agriculture
(USDA).
ACTION: Notice of Solicitation of
Applications; correction.
AGENCY:
The Rural BusinessCooperative Service (Agency), a Rural
Development agency of the United
States Department of Agriculture
(USDA), published a Notice of
Solicitation of Applications (NOSA) in
the Federal Register on December 20,
2021 for the Rural Innovation Stronger
Economy (RISE) grant program.
Following publication of the NOSA, the
Agency found that corrections due to
error, omissions or need for clarity were
necessary. This notice corrects those
errors to clarify the time applications
are due and to provide the correct
regulation references.
DATES: Effective February 14, 2022.
FOR FURTHER INFORMATION CONTACT: For
questions on this document contact Will
Dodson, Program Management Division,
Rural Business-Cooperative Service,
United States Department of
Agriculture, 1400 Independence Avenue
SW, Mail Stop 3326, Room 5160-South,
Washington, DC 20250–3226, (202) 720–
1400 or email: SM.USDA-RD.RISE@
usda.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Corrections
In the Federal Register of December
20, 2021, in FR Doc. 2021–27447 (86 FR
71868), make the following corrections:
(1) In the first column of page 71869,
under Overview, amend the language in
DATES to read:
DATES: Electronic applications must
be received and accepted by https://
www.grants.gov no later than 11:59 p.m.
Eastern Standard Time, April 19, 2022,
or they will not be considered for
funding.
(2) In the first column of page 71869,
under Overview, amend the language in
the first sentence of the first full
paragraph to read:
Potential applicants may submit a
concept proposal for review by the
Agency to SM.USDA-RD.RISE@usda.gov
no later than 11:59 p.m. Eastern
Standard Time, February 18, 2022, in
compliance with 7 CFR 4284.1115(a).
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(3) In the third column of page 71869,
under Eligible Applicants, amend the
language in the first paragraph to read:
Applicants must meet all the
following eligibility requirements.
Applications that fail to meet any of
these requirements by the application
deadline will be deemed ineligible and
will not be evaluated further. To be
considered an eligible applicant, you
must be a rural jobs accelerator
partnership formed after December 20,
2018, and meet the eligibility criteria
found in 7 CFR 4284.1112 to apply for
this program. Individuals and
individual entities are not an eligible
applicant for the RISE program.
(4) In the first column of page 71871,
under (d) Multiple Application
Eligibility amend the first sentence to
read:
Only one application can be
submitted per applicant, who is defined
as a lead applicant as found in 7 CFR
4284.1112(b).
(5) In the first column of page 71872,
under 4. Submission Date and Time
amend the first paragraph, first sentence
to read:
Explanation of Deadline: Completed
applications must be submitted
electronically through Grants.gov no
later than 11:59 p.m. Eastern Standard
Time, April 19, 2022, to be eligible for
grant funding.
(6) In the first column of page 71872,
under 4. Submission Date and Time
amend the second paragraph, first
sentence to read:
Potential applicants may
electronically submit a concept proposal
for review by the Agency to: SM.RISERD.RISE@usda.gov no later than 11:59
p.m. Eastern Standard Time, February
18, 2022, in compliance with 7 CFR
4284.1115(a) and as stated in Section D,
2(b) of this Notice.
Karama Neal,
Administrator, Rural Business-Cooperative
Service.
[FR Doc. 2022–03034 Filed 2–11–22; 8:45 am]
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[Federal Register Volume 87, Number 30 (Monday, February 14, 2022)]
[Proposed Rules]
[Pages 8211-8217]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-03092]
========================================================================
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. 87, No. 30 / Monday, February 14, 2022 /
Proposed Rules
[[Page 8211]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS-SC-21-0086; SC22-985-1 PR]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Salable Quantities and Allotment Percentages for the
2022-2023 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would implement a recommendation from the
Far West Spearmint Oil Administrative Committee (Committee) to
establish salable quantities and allotment percentages for Class 1
(Scotch) and Class 3 (Native) spearmint oil produced in Washington,
Idaho, Oregon, and designated parts of Nevada and Utah (the Far West)
for the 2022-2023 marketing year.
DATES: Comments must be received by April 15, 2022.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be submitted via the internet
at: https://www.regulations.gov. All comments should reference the
document number and the date and page number of this issue of the
Federal Register. All comments submitted in response to this proposed
rule will be included in the record and 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: Joshua R. Wilde, Marketing Specialist,
or Gary Olson, Regional Director, Northwest Marketing Field Office,
Market Development Division, Specialty Crops Program, AMS, USDA;
Telephone: (503) 326-2724, or Email: [email protected] or
[email protected].
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Market Development Division,
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email:
[email protected].
SUPPLEMENTARY INFORMATION: This proposed action, pursuant to 5 U.S.C.
553, proposes an amendment to regulations issued to carry out a
marketing order as defined in 7 CFR 900.2(j). This proposed rule amends
Marketing Order No. 985 (7 CFR part 985), regulating the handling of
spearmint oil produced in the Far West. Part 985 (referred to as 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 Committee locally administers the Order and is comprised
of spearmint oil producers operating within the area of production, and
a public member.
The Department of Agriculture (USDA) is issuing this proposed rule
in conformance with Executive Orders 12866 and 13563. Executive Orders
12866 and 13563 direct agencies to assess the costs and benefits of
regulatory alternatives and, if regulation is necessary, to select a
regulatory approach likely to maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity).
Executive Order 13563 is supplemental to and reaffirms the
principles, structures, and definitions of Executive Order 12866. It
emphasizes the importance of seeking the views of those who are likely
to be affected by proposed regulation, providing an opportunity for
public comment, and basing regulatory actions on a consideration of
objective scientific, technical, and economic data.
This proposed action falls within a category of regulatory actions
that the Office of Management and Budget (OMB) exempted from Executive
Order 12866 review.
This proposed rule has been reviewed in accordance with Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, which requires agencies to consider whether their
rulemaking actions would have tribal implications. Agricultural
Marketing Service (AMS) has determined that this proposed rule is
unlikely to have substantial direct effects on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes.
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
quantities and allotment percentages for Scotch and Native spearmint
oil for the 2022-2023 marketing year, which begins on June 1, 2022.
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. Such
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.
Pursuant to the requirements in Sec. 985.50 of the Order, the
Committee meets each year to consider supply and demand of spearmint
oil and to adopt a marketing policy for the ensuing marketing year. In
determining such marketing policy, the Committee considers several
factors, including, but not limited to, the current and projected
supply of oil, estimated future demand, production costs, and producer
prices for both classes of spearmint oil. Input from spearmint oil
handlers and producers are considered as well.
[[Page 8212]]
Pursuant to the provisions in Sec. 985.51, when the Committee's
marketing policy considerations indicate a need to establish or to
maintain stable market conditions through volume regulation, the
Committee subsequently recommends to USDA the establishment of a
salable quantity and allotment percentage for such class or classes of
oil for the upcoming marketing year. Recommendations for volume control
are intended to ensure market requirements for Far Wear spearmint oil
are satisfied and orderly marketing conditions are maintained.
Section 985.12 defines salable quantity as the total quantity of
each class of oil (Scotch or Native) which handlers may purchase from,
or handle on behalf of, producers during a given marketing year. A
producer's allotment base is their calculated share of the spearmint
oil market based on a statistical representation of past spearmint oil
production, with accommodation for reasonable, normal adjustments to
such base as prescribed by the Committee and approved by USDA. Each
producer's annual allotment of salable spearmint oil is calculated by
multiplying their respective allotment base for each class of spearmint
oil by the allotment percentage for that class of spearmint oil. The
allotment percentage is the percentage used to calculate each
producer's prorated share of the salable quantity and is derived by
dividing the salable quantity for each class of spearmint oil by the
total of all producers' allotment base for the same class of oil. The
total allotment base is revised each year on June 1 to account for
producer base being lost as a result of the ``bona fide effort''
production provision of Sec. 985.53(e) and additional base made
available pursuant to the provisions of Sec. 985.153.
Salable quantities and allotment percentages are established at
levels intended to fulfill market requirements and to maintain orderly
marketing conditions. Committee recommendations for volume control are
made in advance of the upcoming marketing year in which the regulations
are to be effective, thereby allowing producers ample time to adjust
their production decisions accordingly.
The Committee met on October 13, 2021, to consider its marketing
policy for the 2022-2023 marketing year. At that meeting, the Committee
determined that, based on the current market and supply conditions,
volume regulation for both classes of oil would be necessary. The
Committee unanimously recommended a salable quantity and allotment
percentage for Scotch spearmint oil of 832,546 pounds and 37 percent
and a salable quantity and allotment percentage for Native spearmint
oil of 1,101,269 pounds and 43 percent.
This proposed action would establish the amount of Scotch and
Native spearmint oil that handlers may purchase from, or handle on
behalf of, producers during the 2022-2023 marketing year, which begins
on June 1, 2022. Salable quantities and allotment percentages have been
placed into effect each season since the Order's inception in 1980.
Scotch Spearmint Oil
The Committee recommended a Scotch spearmint oil salable quantity
of 832,546 pounds and an allotment percentage of 37 percent for the
2022-2023 marketing year. The proposed 2022-2023 marketing year salable
quantity of 832,546 pounds is 14,138 pounds less than the 2021-2022
marketing year salable quantity of 846,684 pounds. The allotment
percentage, recommended at 37 percent for the 2022-2023 marketing year,
is one percent less than the percentage in effect the previous year.
The total allotment base for the coming marketing year is estimated to
be 2,250,124 pounds. This figure represents a one-percent increase over
the revised 2021-2022 marketing year total allotment base of 2,227,846
pounds. The salable quantity (832,546 pounds) is the product of total
allotment base (2,250,124 pounds) times the allotment percentage (37
percent).
The Committee considered several factors in making its
recommendation, including the current and projected future supply,
estimated future demand, production costs, and producer prices. The
Committee's recommendation also accounts for the established acreage of
Scotch spearmint, consumer demand, existing carry-in, reserve pool
volume, and increased production in competing markets.
According to the Committee, as costs of production have increased
and spearmint oil prices have decreased, many producers have forgone
new plantings of Scotch spearmint. This has resulted in a significant
decline in production of Scotch spearmint oil in recent years.
Production has decreased from 1,113,346 pounds produced in 2016 to an
estimated 556,559 pounds of Scotch spearmint production in 2021.
Industry reports indicate that trade demand for Far West Scotch
spearmint oil has diminished over the past five years as international
markets for spearmint-flavored products have slowed. Sales of Far West
Scotch spearmint oil have declined from 1,060,232 pounds during the
2014-2015 marketing year to 717,952 pounds in 2018-2019, and further to
488,484 pounds in 2020-2021, the last full year of available data. In
addition to declining spearmint oil demand, increasing production of
Scotch spearmint oil in competing markets, most notably by Canadian
producers, has put additional downward pressure on the Far West Scotch
spearmint oil market.
Given the anticipated market conditions for the coming year, the
Committee estimates that Scotch spearmint oil trade demand for the
2022-2023 marketing year trade will be 650,000 pounds, which is 25,000
pounds higher than the prior year estimate and right in line with the
5-year moving sales average of 650,033 pounds. Should the proposed
volume regulation levels prove insufficient to adequately supply the
market, the Committee has the authority to recommend intra-seasonal
increases, as it has in previous marketing years.
The Committee calculated the minimum salable quantity of Scotch
spearmint oil that would be required during the 2022-2023 marketing
year (311,105 pounds) by subtracting the estimated salable carry-in on
June 1, 2022, (338,895 pounds) from the estimated trade demand (650,000
pounds). This minimum salable quantity represents the estimated minimum
amount of Scotch spearmint oil that would be needed to satisfy
estimated trade demand for the coming year. To ensure that the market
would be fully supplied, the Committee recommended a 2022-2023
marketing year salable quantity of 832,546 pounds. The recommended
salable quantity, combined with an estimated 338,895 pounds of salable
carry-in from the previous year, would yield a total available supply
of 1,171,441 pounds of Scotch spearmint oil for the 2022-2023 marketing
year. With the recommended salable quantity and current market
environment, the Committee estimates that as much as 521,441 pounds of
salable Scotch spearmint oil could be carried into the 2022-2023
marketing year.
Salable carry-in is the primary measure of excess spearmint oil
supply under the Order, as it represents overproduction in prior years
that is currently available to the market without restriction. Under
volume regulation, spearmint oil that is designated as salable
continues to be available to the market until it is sold and may be
marketed at any time at the discretion of the owner.
[[Page 8213]]
The Committee estimates that there will be 338,895 pounds of
salable carry-in of Scotch spearmint oil on June 1, 2022. If current
market conditions are maintained and the Committee's projections are
correct, salable carry-in would increase to 521,441 pounds at the
beginning of the 2022-2023 marketing year. This level would be above
the quantity that the Committee generally considers favorable (150,000
pounds). However, the Committee believes that, given the current
economic conditions in the Scotch spearmint oil industry, some Scotch
spearmint oil producers may not produce enough oil in the 2022-2023
marketing year to fill all of their annual allotment. The Committee
estimates that as much as 280,671 pounds of 2021-2022 marketing year
annual allotment may not be filled by producers. While the Committee
has not projected unused base allotment for the upcoming 2022-2023
marketing year, it anticipates that the actual quantity of Scotch
spearmint oil carried into the following marketing year will be less
than the quantity calculated above (521,441 pounds).
Spearmint oil held in reserve is oil that has been produced in
excess of a producer's annual allotment, either in the current
marketing year or in prior years. After December 1 of each marketing
year, reserve pool oil is not available to the market in the current
marketing year without an increase in the salable quantity and
allotment percentage. However, reserve oil may be released for limited
market development projects with approval of the Secretary. Oil held in
the reserve pool is another indicator of excess supply. Scotch
spearmint oil held in the reserve pool was 72,361 pounds as of May 31,
2021, up from 67,645 pounds as of May 31, 2020. This quantity of
reserve pool oil should be an adequate buffer to supply the market, if
necessary, should the industry experience an unexpected increase in
demand.
The Committee recommended an allotment percentage of 37 percent for
the 2022-2023 marketing year for Scotch spearmint oil. During its
October 13, 2021, meeting, the Committee calculated an initial
allotment percentage by dividing the minimum required salable quantity
(311,105 pounds) by the total estimated allotment base (2,250,124
pounds), resulting in 13.8 percent. However, producers and handlers at
the meeting indicated that the computed percentage (13.8 percent) might
not adequately supply potential 2022-2023 Scotch spearmint oil market
demand and may also result in a less than desirable carry-in for the
subsequent marketing year. After deliberation, the Committee
recommended an allotment percentage of 37 percent. The total estimated
allotment base (2,250,124 pounds) for the 2022-2023 marketing year,
multiplied by the recommended salable allotment percentage (37
percent), yields 832,546 pounds, which is the recommended salable
quantity for the 2022-2023 marketing year.
The 2022-2023 marketing year computational data for the Committee's
recommendations is detailed below.
(A) Estimated carry-in of Scotch spearmint oil on June 1, 2022:
338,895 pounds. This figure is the difference between the 2021-2022
marketing year total available supply of 963,895 pounds and the revised
2021-2022 marketing year estimated trade demand of 625,000 pounds.
(B) Estimated trade demand of Scotch spearmint oil for the 2022-
2023 marketing year: 650,000 pounds. This figure was established at the
Committee meeting held on October 13, 2021.
(C) Salable quantity of Scotch spearmint oil required from the
2022-2023 marketing year production: 311,105 pounds. This figure is the
difference between the estimated 2022-2023 marketing year trade demand
(650,000 pounds) and the estimated carry-in on June 1, 2021 (338,895
pounds). This salable quantity represents the minimum amount of Scotch
spearmint oil that would be needed to satisfy estimated demand for the
coming year.
(D) Total estimated Scotch spearmint oil allotment base of for the
2022-2023 marketing year: 2,250,124 pounds. This figure represents a
one-percent increase over the 2021-2022 total actual allotment base of
2,227,846 pounds, as prescribed by Sec. 985.53(d). The one-percent
increase equals 22,278 pounds. This total estimated allotment base is
revised each year on June 1 in accordance with Sec. 985.53(e).
(E) Computed Scotch spearmint oil allotment percentage for the
2022-2023 marketing year: 13.8 percent. This percentage is computed by
dividing the minimum required salable quantity (311,105 pounds) by the
total estimated allotment base (2,250,124 pounds).
(F) Recommended Scotch spearmint oil allotment percentage for the
2022-2023 marketing year: 37 percent. This is the Committee's
recommendation and is based on the computed allotment percentage (13.8
percent) and input from producers and handlers at the October 13, 2021,
meeting. The recommended 37 percent allotment percentage reflects the
Committee's belief that the computed percentage (13.8 percent) may not
adequately supply the anticipated 2022-2023 marketing year Scotch
spearmint oil market demand.
(G) Recommended Scotch spearmint oil salable quantity for the 2022-
2023 marketing year: 832,546 pounds. This figure is the product of the
recommended salable allotment percentage (37 percent) and the total
estimated allotment base (2,250,124 pounds) for the 2022-2023 marketing
year.
(H) Estimated total available supply of Scotch spearmint oil for
the 2022-2023 marketing year: 1,171,441 pounds. This figure is the sum
of the 2022-2023 marketing year recommended salable quantity (832,546
pounds) and the estimated carry-in on June 1, 2021 (338,895 pounds).
For the reasons stated above, the Committee believes that the
recommended salable quantity and allotment percentage would adequately
satisfy trade demand, would result in a reasonable carry-in for the
following year, and would contribute to the orderly marketing of Scotch
spearmint oil.
Native Spearmint Oil
The Committee recommended a Native spearmint oil salable quantity
of 1,101,269 pounds and an allotment percentage of 43 percent for the
2022-2023 marketing year. These figures are, respectively, 162,872
pounds and 6 percentage points higher than the levels established for
the 2021-2022 marketing year. The Committee utilized handlers'
estimated trade demand of Native spearmint oil for the coming year,
historical and current Native spearmint oil production, inventory
statistics, and international market data obtained from consultants for
the spearmint oil industry to arrive at these recommendations.
The Committee anticipates that 2021 Native spearmint oil production
will total 985,797 pounds, down substantially from the previous year's
production of 1,181,230 pounds. Committee records indicate that
spearmint producing acres in the Far West have declined from a recent
high of 9,013 acres in 2019 to an estimated 6,275 acres of Native
spearmint production 2021.
However, sales of Native spearmint oil recovered from a 10-year low
of 1,076,906 pounds in the 2019-2020 marketing year to 1,332,260 pounds
in 2020-2021, the last full year of reported sales. The Committee
estimates that trade demand for Native spearmint oil will be 1,200,000
pounds for the 2022-2023 marketing year, which is
[[Page 8214]]
somewhat less than the 5-year sales average of 1,301,490 pounds.
The Committee expects that 284,357 pounds of salable Native
spearmint oil from prior years will be carried into the 2022-2023
marketing year. This amount is down from the 412,095 pounds of salable
oil carried into the 2021-2022 marketing year, but still above the
level that the Committee generally considers favorable.
Further, the Committee estimates that there will be 1,272,854
pounds of Native spearmint oil in the reserve pool at the beginning of
the 2022-2023 marketing year. This figure is 73,062 pounds higher than
the quantity of reserve pool oil held by producers on June 1, 2021, and
well above the level that the Committee believes is optimal. Generally,
reserve pool oil has been steadily increasing over the past several
marketing years, climbing from 996,050 pounds of reserve oil since the
start of the 2016-2017 marketing year.
The Committee expects end users of Native spearmint oil to continue
to rely on Far West production as their primary source of high-quality
Native spearmint oil. Overseas production of Native spearmint has
declined in recent years. As a result, U.S. exports of Native spearmint
oil have been steadily increasing since 2018. However, increased
domestic production of Native spearmint from regions outside of the Far
West production area has created additional domestic competition for
market share. For instance, there were fewer than 2,000 acres of Native
spearmint production in the U.S. Midwest region in 2016, which compares
to over 10,000 acres of Native spearmint oil production in the Far
West. However, 2021 estimates show that Far West acreage has declined
to approximately 6,275 acres, compared to acreage increasing to around
5,000 acres in the Midwest. This situation has contributed to declining
trade demand for Far West Native spearmint oil and led to downward
pressure on producer prices.
The Committee chose to be cautiously optimistic in the
establishment of its trade demand estimate for the 2022-2023 marketing
year to ensure that the market would be adequately supplied. At the
October 13, 2021, meeting, the Committee estimated the 2022-2023
marketing year Native spearmint oil trade demand to be 1,200,000
pounds. This figure is based on input provided by producers at nine
production area meetings held in early October 2021, as well as
estimates provided by handlers and other meeting participants. This
figure represents an increase of 134,000 pounds from the previous
year's revised trade demand estimate. The average estimated trade
demand for Native spearmint oil derived from the area producer meetings
was 1,173,333 pounds, whereas the handlers' estimates ranged from
950,000 to 1,300,000 pounds. The average of Native spearmint oil sales
over the last three years was 1,301,490 pounds. The quantity marketed
over the most recent full marketing year, 2020-2021, was 1,332,260
pounds.
The estimated June 1, 2022, carry-in of 284,357 pounds of Native
spearmint oil, plus the recommended 2022-2023 marketing year salable
quantity of 1,101,269 pounds, would result in an estimated total
available supply of 1,385,626 pounds of Native spearmint oil during the
2022-2023 marketing year. With the corresponding estimated trade demand
of 1,200,000 pounds, the Committee projects that 185,626 pounds of oil
will be carried into the 2023-2024 marketing year. This would result in
a year-over-year decrease of 98,731 pounds. The Committee estimates
that there will be 1,272,854 pounds of Native spearmint oil held in the
reserve pool at the beginning of the 2022-2023 marketing year. Should
the industry experience an unexpected increase in trade demand, oil in
the Native spearmint oil reserve pool could be released through an
intra-seasonal increase to satisfy that demand.
The Committee recommended an allotment percentage of 43 percent for
the 2022-2023 marketing year. During its October 13, 2021, meeting, the
Committee calculated an initial allotment percentage of 35.8 percent by
dividing the minimum required salable quantity to satisfy estimated
trade demand (915,643 pounds) by the total allotment base (2,561,090
pounds). However, producers and handlers at the meeting expressed that
the computed percentage of 35.8 percent may not adequately supply the
potential 2022-2023 marketing year Native spearmint oil market demand
or result in adequate carry-in for the subsequent marketing year. After
deliberation, the Committee increased the recommended allotment
percentage to 43 percent. The total estimated allotment base (2,561,090
pounds) for the 2022-2023 marketing year multiplied by the recommended
salable allotment percentage (43 percent) yields 1,101,269 pounds, the
recommended salable quantity for the year.
The 2022-2023 marketing year computational data for the Committee's
recommendations is further outlined below.
(A) Estimated carry-in of Native spearmint oil on June 1, 2022:
284,357 pounds. This figure is the difference between the 2021-2022
marketing year total available supply of 1,350,357 pounds and the
revised 2021-2022 marketing year estimated trade demand of 1,066,000
pounds.
(B) Estimated trade demand of Native spearmint oil for the 2022-
2023 marketing year: 1,200,000 pounds. This estimate was established by
the Committee at the October 13, 2021 meeting.
(C) Salable quantity of Native spearmint oil required from the
2022-2023 marketing year production: 915,643 pounds. This figure is the
difference between the 2022-2023 marketing year estimated trade demand
(1,200,000 pounds) and the estimated carry-in on June 1, 2022 (284,357
pounds). This is the minimum amount of Native spearmint oil that the
Committee believes would be required to meet the anticipated 2022-2023
marketing year trade demand.
(D) Total estimated allotment base of Native spearmint oil for the
2022-2023 marketing year: 2,561,090 pounds. This figure represents a
one-percent increase over the 2021-2022 total actual allotment base of
2,535,733 pounds as prescribed in Sec. 985.53(d). The one-percent
increase equals 25,357 pounds of oil. This estimate is revised each
year on June 1, to adjust for the bona fide effort production
provisions of Sec. 985.53(e).
(E) Computed Native spearmint oil allotment percentage for the
2022-2023 marketing year: 35.8 percent. This percentage is calculated
by dividing the required salable quantity (915,643 pounds) by the total
estimated allotment base (2,561,090 pounds) for the 2022-2023 marketing
year.
(F) Recommended Native spearmint oil allotment percentage for the
2022-2023 marketing year: 43 percent. This is the Committee's
recommendation based on the computed allotment percentage (35.8
percent) and input from producers and handlers at the October 13, 2021
meeting. The recommended 43 percent allotment percentage is also based
on the Committee's belief that the computed percentage (35.8 percent)
may not adequately supply the potential market for Native spearmint oil
in the 2022-2023 marketing year or allow for salable Native spearmint
oil to be carried into the beginning of the 2023-2024 marketing year.
(G) Recommended Native spearmint oil 2022-2023 marketing year
salable quantity: 1,101,269 pounds. This figure is the product of the
recommended allotment percentage (43 percent) and the total estimated
allotment base (2,561,090 pounds).
[[Page 8215]]
(H) Estimated available supply of Native spearmint oil for the
2022-2023 marketing year: 1,385,626 pounds. This figure is the sum of
the 2022-2023 recommended salable quantity (1,101,269 pounds) and the
estimated carry-in on June 1, 2022 (284,357 pounds). This amount could
be increased, as needed, through an intra-seasonal increase in the
salable quantity and allotment percentage.
The Committee's recommended Scotch and Native spearmint oil salable
quantities and allotment percentages of 832,546 pounds and 37 percent,
and 1,101,269 pounds and 43 percent, respectively, would match the
available supply of each class of spearmint oil to the estimated demand
of each, thus avoiding extreme fluctuations in inventories and prices.
This proposed rule is similar to regulations issued in prior seasons.
The salable quantities in this proposed rule are not expected to
cause a shortage of either class of spearmint oil. Any unanticipated or
additional market demand for either class of spearmint oil which may
develop during the marketing year could be satisfied by an intra-
seasonal increase in the salable quantity and corresponding allotment
percentage. The Order contains a provision in Sec. 985.51 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 marketing year may transfer such excess
spearmint oil to producers who have produced less than their annual
allotment. In addition, on December 1 of each year, producers who have
not transferred their excess spearmint oil to other producers must
place their excess spearmint oil production into the reserve pool to be
released in the future, in accordance with market needs and under the
Committee's direction.
In conjunction with the issuance of this proposed rule, USDA has
reviewed the Committee's marketing policy statement for the 2022-2023
marketing year. The Committee's marketing policy statement, a
requirement whenever the Committee recommends volume regulation, meets
the requirements of Sec. Sec. 985.50 and 985.51.
The establishment of the proposed 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 proposal
would also provide producers with information regarding the amount of
spearmint oil that should be produced for the 2022-2023 season to meet
anticipated market demand.
Initial Regulatory Flexibility Act
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 proposed rule 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 approximately 39 producers of Scotch spearmint oil and 93
producers of Native spearmint oil operating within the regulated
production area. In addition, there are approximately 9 spearmint oil
handlers (both Scotch and Native spearmint) subject to regulation under
the Order. Small agricultural service firms are defined by the Small
Business Administration (SBA) as those having annual receipts of less
than $30,000,000, and small agricultural producers are defined as those
having annual receipts of less than $1,000,000 (13 CFR 121.201).
The Committee reported that recent producer prices for spearmint
oil have ranged from $14.00 to $17.00 per pound. The National
Agricultural Statistics Service (NASS) reported that the 2020 U.S.
season average spearmint oil producer price per pound was $16.90.
Spearmint oil utilization for the 2020-2021 marketing year, as reported
by the Committee, was 488,484 pounds and 1,332,260 pounds for Scotch
and Native spearmint oil, respectively, for a total of 1,820,744
pounds. Multiplying $16.90 per pound by 2020-2021 marketing year
spearmint oil utilization of 1,820,744 pounds yields a crop value
estimate of about $30.77 million.
Given the accounting requirements for the volume regulation
provisions of the Order, the Committee maintains accurate records of
each producer's production and sales. Using the $16.90 average
spearmint oil price, and Committee production data for each producer,
the Committee estimates that 37 of the 39 Scotch spearmint oil
producers and 92 of the 93 Native spearmint oil producers could be
classified as small entities under the SBA definition.
There is no third party or governmental entity that collects and
reports spearmint oil prices received by spearmint oil handlers.
However, the Committee estimates an average spearmint oil handling
markup at approximately 20 percent of the price received by producers.
Twenty percent of the 2020 producer price ($16.90) is $3.38 which
results in a handler f.o.b. price per pound estimate of $20.28 ($16.90
+ $3.38).
Multiplying this estimated handler f.o.b. price by the 2020-2021
marketing year total spearmint oil utilization of 1,820,744 pounds
results in an estimated handler-level spearmint oil value of $36.92
million. Dividing this figure by the number of handlers (9) yields
estimated average annual handler receipts of about $4.1 million, which
is well below the SBA threshold for small agricultural service firms.
Furthermore, using confidential data on pounds handled by each
handler, and the abovementioned estimated handler price per pound, the
Committee reported that it is not likely that any of the nine handlers
had 2020-2021 marketing year spearmint oil sales that exceeded the $30
million SBA threshold.
Therefore, in view of the foregoing, the majority of producers of
spearmint oil may be classified as small entities, and all of the
handlers of spearmint oil may be classified as small entities.
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 2022-2023 marketing year.
The Committee recommended this proposed action to help maintain
stability in the spearmint oil market by matching supply to estimated
demand, thereby avoiding extreme fluctuations in supplies and prices.
Establishing quantities that may be purchased or handled during the
marketing year through volume regulation allows producers to coordinate
their spearmint oil production with the expected market demand.
Authority for this proposal is provided in Sec. Sec. 985.50, 985.51,
and 985.52 of the Order.
The Committee estimates the total trade demand for the 2022-2023
marketing year for both classes of oil at 1,850,000 pounds. In
addition, the Committee expects that the combined salable carry-in for
both classes of spearmint oil will be 623,252 pounds. As such, the
combined required salable quantity for the 2022-2023 marketing year is
estimated to be 1,226,748 pounds
[[Page 8216]]
(1,850,000 pounds trade demand less 623,252 pounds carry-in). Under
volume regulation, total sales of spearmint oil by producers for the
2022-2023 marketing year would be held to 2,557,067 pounds (the
recommended salable quantity for both classes of spearmint oil of
1,933,815 pounds plus 623,252 of carry-in).
This total available supply of 2,557,067 pounds should be more than
adequate to supply the 1,850,000 pounds of anticipated total trade
demand for spearmint oil. In addition, as of May 31, 2021, the total
reserve pool for both classes of spearmint oil stood at 1,272,153
pounds. That quantity is expected to remain relatively unchanged over
the course of the 2021-2022 marketing year, with current Committee
reserve pool estimates totaling 1,336,471 pounds. Should trade demand
increase unexpectedly during the 2022-2023 marketing year, reserve pool
spearmint oil could be released into the market to supply that increase
in demand.
The recommended allotment percentages, upon which 2022-2023
marketing year annual allotments are based, are 37 percent for Scotch
spearmint oil and 43 percent for Native spearmint oil. Without volume
regulation, producers would not be held to these allotment levels, and
could sell unrestricted quantities of spearmint oil.
The USDA econometric model used to evaluate the Far West spearmint
oil market estimated that the season average producer price per pound
(from both classes of spearmint oil) would decline about $2.70 per
pound without volume regulation. The surplus situation for the
spearmint oil market that would exist without volume regulation in the
2022-2023 marketing year also would likely dampen prospects for
improved producer prices in future years because of the excessive
buildup in stocks.
In addition, spearmint oil prices would likely fluctuate with
greater amplitude in the absence of volume regulation. The coefficient
of variation, or CV (a standard measure of variability), of Far West
spearmint oil producer prices for the period 1980-2020 (the years in
which the Order has been in effect), is 24 percent, compared to 49
percent for the 20-year period (1960-1979) immediately prior to the
establishment of the Order. Since higher CV values correspond to
greater variability, this is an indicator of the price stabilizing
impact of the Order.
The use of volume regulation allows the industry to fully supply
spearmint oil markets while avoiding the negative consequences of over-
supplying these markets. The use of volume regulation 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
rejected the idea of not regulating volume for either class of
spearmint oil because of the severe, price-depressing effects that
would likely occur without volume regulation. The Committee also
discussed and considered salable quantities and allotment percentages
that were above and below the levels that were eventually recommended
for both classes of spearmint oil. Ultimately, the action recommended
by the Committee was to slightly reduce the allotment percentage and
salable quantity for Scotch spearmint oil and to increase the salable
quantity and allotment percentage for Native spearmint oil from the
levels established for the 2021-2022 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 2022-2023 and
future marketing years.
Costs to producers and handlers, large and small, resulting from
this proposal are expected to be offset by the benefits derived from a
more stable market and increased returns. The benefits of this rule are
expected to be equally available to all producers and handlers
regardless of their size.
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 OMB and assigned OMB No. 0581-0178, Vegetable
and Specialty Crops. No changes are necessary in those requirements as
a result of this proposed action. 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 Scotch spearmint oil and Native spearmint oil
produced in the Far West during the 2022-2023 marketing year.
Accordingly, this proposal 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. In
addition, USDA has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this proposed rule.
AMS is committed to complying with the E-Government Act, to promote
the use of the internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
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 October 13, 2021, meeting was
a public meeting and all entities, both large and small, were able to
express views on this issue. Interested persons are invited to submit
comments on this proposed rule, including the regulatory and
informational impacts of this proposed 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/rules-regulations/moa/small-businesses. Any questions
about the compliance
[[Page 8217]]
guide should be sent to Richard Lower at the previously mentioned
address in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the information and recommendations submitted by the Council and other
available information, USDA has determined that this proposed rule is
consistent with and will effectuate the purposes of the Act.
A 60-day comment period is provided to allow interested persons to
respond to this proposal. All written comments timely received will be
considered before a final determination is made on this matter.
List of Subjects in 7 CFR Part 985
Marketing agreements, Oils and fats, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Agriculture
Marketing Services proposes to amend 7 CFR part 985 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. Add Sec. 985.237 to read as follows:
Sec. 985.237 Salable quantities and allotment percentages--2022-2023
marketing year.
The salable quantity and allotment percentage for each class of
spearmint oil during the marketing year beginning on June 1, 2022,
shall be as follows:
(a) Class 1 (Scotch) oil--a salable quantity of 832,546 pounds and
an allotment percentage of 37 percent.
(b) Class 3 (Native) oil--a salable quantity of 1,101,269 pounds
and an allotment percentage of 43 percent.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-03092 Filed 2-11-22; 8:45 am]
BILLING CODE P
