Cattle Contracts Library Pilot Program, 74951-74956 [2022-26389]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 87, Number 234 (Wednesday, December 7, 2022)]
[Rules and Regulations]
[Pages 74951-74956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-26389]



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Rules and Regulations
                                                Federal Register
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under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 87, No. 234 / Wednesday, December 7, 2022 / 
Rules and Regulations

[[Page 74951]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 180

[Doc. No. AMS-LP-22-0065]
RIN 0581-AE22


Cattle Contracts Library Pilot Program

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes the Cattle Contracts Library pilot 
program. Under this pilot program, the Agricultural Marketing Service 
will collect, maintain, and report aggregated information on contracts 
between packers and cattle producers for the purchase of fed cattle. 
The library will include different types of contracts and contract 
terms, including contract terms on any schedules of premiums or 
discounts, delivery and transportation, terms and payments, financing, 
risk-sharing or profit sharing, and other financial arrangements. In 
addition to contract term information, the Agricultural Marketing 
Service will also report on the number of head of cattle purchased 
under these contracts.

DATES: Effective January 6, 2023.

FOR FURTHER INFORMATION CONTACT: Michael E. Sheats, Director, 
Livestock, Poultry, and Grain Market News Division, AMS, USDA; phone: 
202-690-3145 or email: [email protected].

SUPPLEMENTARY INFORMATION: The Agricultural Marketing Service (AMS) is 
establishing a Cattle Contracts Library pilot program (Pilot) to 
increase market transparency for cattle producers pursuant to sec. 779 
of the Consolidated Appropriations Act, 2022 (Pub. L. 117-103, March 
15, 2022) (the Act). The Act directs AMS to establish a Cattle 
Contracts Library pilot that is similar to, as determined by the 
Secretary, the U.S. Department of Agriculture's (USDA) Swine Contract 
Library maintained pursuant to sec. 222 of the Packers and Stockyards 
Act (7 U.S.C. 198a).

Cattle Contract Library Pilot Program

    Under the Pilot, packers are required to provide AMS with contract 
information for the purchase of cattle and the number of actual and 
estimated cattle purchased under active contracts within particular 
timeframes. To protect confidential business information, AMS will only 
collect contract terms without any personally identifiable information, 
not entire contracts. The contract clauses required to be submitted 
include contract method, contract start and end dates, base price 
source and adjustment, selling basis, premiums and discounts, 
specifications relating to cattle attributes, delivery and 
transportation terms and payments, financing, risk-sharing, profit-
sharing or other financial arrangements, and volume provisions. 
Monthly, packers are required to submit the number of actual cattle 
purchased under active contracts in the prior month and the estimated 
maximum number of cattle to be purchased under active contracts for 
slaughter in the current calendar month.
    On January 6, 2023, packers must submit the required contractual 
clauses for each active contract, whether the contract is oral or 
written. After the initial submission of information, packers will be 
required to submit the same information for each new active contract 
made available to a producer or producers as well as any changes to the 
terms of a previously submitted active contract and associated 
schedules or appendices within one business day of the contract being 
available. Because the packers prepare these contracts in advance of 
their offering those contracts to producers, AMS determined these 
submission timeframes to be reasonable.

Scope of Cattle Contract Library Pilot Program

    Not all packers are required to submit this information. Generally, 
only packers that slaughtered an average of not less than 5 percent of 
the number of fed cattle slaughtered nationally during the immediately 
preceding five calendar years are subject to this Pilot. To determine 
the definition of packer for purposes of the Pilot, and thus the 
packers subject to the required reporting under the Pilot, AMS 
considered two approaches: (1) the Livestock Mandatory Reporting Act 
(LMR), also administered by AMS, covers packing plants that slaughtered 
an average of 125,000 head of cattle per year during the immediately 
preceding 5 calendar years, and (2) the proposed Congressional 
legislation, S. 4030--Cattle Price Discovery and Transparency Act of 
2022, covers packing companies that have slaughtered during the 
immediately preceding five calendar years an average of not less than 5 
percent of the number of fed cattle slaughtered nationally during the 
immediately preceding five calendar years.\1\ AMS estimates that, under 
the LMR approach, approximately 40 packing plants operated by 16 
packing companies would be subject to the Pilot. AMS estimates that 
under the S.4030 approach, approximately 18 packing plants operated by 
four packing companies would be subject to the Pilot.
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    \1\ A ``packing plant'' refers to a physical plant. A ``packing 
company'' refers to an entire company. A packing company may have 
multiple packing plants.
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    AMS estimates that the LMR approach would cover approximately 90 
percent of all fed cattle slaughter. AMS estimates the S. 4030 approach 
would cover 85 percent of total fed cattle slaughter.\2\ When 
estimating the costs to all reporting entities, AMS estimated the total 
annual cost under the LMR approach to be $294,947, and the total annual 
cost under the S.4030 approach to be $122,752. Therefore, AMS estimates 
that requiring only packers slaughtering not less than 5 percent of the 
number of fed cattle slaughtered nationally annually to submit 
information results in a 42 percent reduction in cost burden to the 
industry while providing a library of contractual information covering 
85 percent of the annual total fed cattle slaughter. For the purposes 
of this Pilot, AMS believes this is a sufficiently similar market 
capture to the Swine Contract Library, which covers roughly 95 percent 
of the market, and would capture all types of applicable contracts.
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    \2\ As estimated in the AMS Packers and Stockyards Division 
Annual Report 2020; https://www.ams.usda.gov/sites/default/files/media/PackersandStockyardsAnnualReport2020.pdf.
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Required Reporting

    AMS worked with packers to voluntarily obtain contractual 
information used for the purchase of cattle and associated volume

[[Page 74952]]

information to develop the Pilot. While this voluntarily submitted 
information was sufficient to design the Pilot, it did not provide AMS 
with comprehensive information on all the types of contracts used to 
purchase cattle or the volume of cattle purchased. Based on feedback 
from industry stakeholders, including those who voluntarily submitted 
contract information, AMS determined the Pilot needed to be mandatory; 
otherwise, the Cattle Contract Library would be incomplete, and the 
information would be potentially misleading if packers self-select the 
contract terms they provide.
    Consistent with the statutory authority for the Pilot, submission 
of the specified contractual information and volume information for 
those contracts is mandatory, as it is with the Swine Contract Library.

Public Input

    While by statute this Pilot is exempt from notice and comment 
rulemaking and the Paperwork Reduction Act, AMS has considered public 
input. AMS announced an in-person listening session on April 11, 2022, 
in a notice to trade on their website, and AMS provided an opportunity 
for written comments to be submitted via email. On April 21, 2022, AMS 
hosted a cattle industry listening session on the Pilot in Kansas City, 
MO. The session was attended in-person and virtually by over 150 
industry stakeholders and provided an open forum for the public to 
share their feedback. AMS specifically sought feedback on what 
information the Pilot should include to be most helpful to cattle 
marketers, what concerns stakeholders have over the public release of 
the Pilot, and what format should be used to present the information. 
AMS also provided an opportunity for interested parties to submit 
written feedback in the week following the listening session and posted 
all written feedback on its website. All public input related to the 
Pilot can be found here: https://www.ams.usda.gov/market-news/livestock-poultry-grain/cattle-contracts-library.
    The most frequent input AMS received was that the Pilot should 
provide factual, reliable information in a user-friendly format that 
protects all confidential or sensitive business information. AMS also 
received input that the packers' submission costs should be minimized 
and should provide educational outreach to stakeholders.
    AMS considered these comments in the preparation of this rule. To 
maintain confidentiality, the Pilot requires submission of contract 
clauses, not entire contracts. Further, while this rule does not 
address the way in which AMS will report the information collected 
through the Pilot, AMS intends to publish the Cattle Contract Library 
in a manner that does not disclose the source's identity to further 
protect the buyers' and the sellers' confidential business information.
    This Pilot will allow AMS to make a range of valuable market 
information on the structure and volume of cattle contracts publicly 
available, while maintaining the confidentiality of individual 
contracts and sensitive information included therein. The law 
establishing the Swine Contract Library adopted sec. 251 of the 
Agricultural Marketing Act of 1946 to protect personal identifying 
information and proprietary business information from public 
disclosure. The Pilot likewise adopts those provisions in this rule to 
prohibit disclosure beyond contract and volume information.
    With respect to input on cost, AMS determined that the selected 
approach would impose the lower cost burden on the industry, yet still 
provide a library of contractual information that covers most contracts 
for fed-cattle. AMS believes this Pilot covers a similarly sized 
percentage of sales in the market as the Swine Contract Library covers 
in the market for swine.
    In response to input requesting that AMS provide outreach, during 
development of the Pilot, AMS conducted nearly 40 outreach and 
educational events with industry stakeholders during which the Pilot 
was demonstrated and additional feedback for possible refinements was 
gathered. AMS designed the Pilot in a user-friendly and intuitive 
manner, accessible to users with minimal guidance. During the outreach 
sessions, many stakeholders expressed their appreciation for the ease 
with which they could access and understand the information in the 
Pilot.
    In addition to the feedback received through the listening sessions 
and outreach, packers voluntarily provided AMS with over 300 inactive 
contracts and 100 active contracts for review, which informed AMS's 
determination as to the contract clauses required to be reported. AMS 
also reviewed other contracts available under its marketing and 
regulatory programs. Using these contracts, AMS identified common 
elements in each that affect the final pricing. This included the base 
price mechanism, base price adjustments, premiums and discounts, and 
other miscellaneous provisions (e.g., transportation, shrink, selling 
basis, dressing percent conversion, etc.). AMS also examined important 
differences in the contracts, including the influence of any short- or 
long-term buyer/seller relationships on financial terms of the contract 
that may affect the competitive environment of the packers and 
producers in the cattle market. AMS used this feedback and contract 
information to develop a draft library that was shared with interested 
stakeholders including packers, industry groups, Congressional staff, 
and academics. AMS further refined the library as described in this 
Pilot based upon input received from those interested stakeholders on 
the draft library.

Similarities to the Swine Contract Library

    In accordance with the statutory mandate, the Pilot is modeled on 
the Swine Contract Library. The Swine Contract Library features a 
report to the public on the contract terms available to sellers of 
swine. To achieve this, the statute and regulations require swine 
packers to report contract and production information for publication. 
Not all swine packers are required to report; swine packers must either 
slaughter 100,000 head per year or have the capacity to slaughter 
100,000 head per year to be subject to reporting under the Swine 
Contract Library provisions. See 9 CFR 206.1. The regulations require 
swine packers to prepare a monthly report to submit to AMS. See 9 CFR 
206.3. The public reports released on these contracts are anonymized to 
protect confidentiality under the standards of sec. 251 of the 
Agricultural Marketing Act of 1946. See 7 CFR 206.2(f); 7 U.S.C. 1636.
    The Swine Contract Library publishes information on, among other 
things: the existing contract types for each geographic region; the 
contract types currently being made available; packers' reported 
estimates of the total number of committed swine; the types of 
conditions or circumstances as reported that could result in expansion 
in the numbers of swine to be delivered; and the packers' reported 
estimates of the maximum total number of swine that potentially could 
be delivered.
    The Swine Contract Library has two public reports: A contract 
summary report, and a monthly report. Contract summary reports provide 
information on the various terms and provisions from the marketing 
contracts. This information includes: the determination of base price 
and how base price is set; the premium and discount adjustments to the 
base price as determined by both carcass and non-carcass traits;

[[Page 74953]]

application of ledger where terms define the use of ledger or accrual 
accounts; and all other remaining terms and provisions from the 
contracts. Monthly reports provide packers' estimated swine purchases 
under marketing contracts for the next 6 and 12 months. To achieve a 
similar level of reporting in this Pilot, AMS must collect contract 
terms and volume information from cattle-slaughtering packers.
    Accordingly, consistent with the Swine Contract Library (7 U.S.C. 
198-198b; 7 U.S.C. 222; 9 CFR 206.1-206.3), AMS will require covered 
packers to report specific contractual information for the purchase of 
cattle. After the information is collected and reviewed, AMS will 
determine the most appropriate format for publication. Throughout, AMS 
will treat the reported information consistent with the confidentiality 
requirements of the Swine Contract Library's regulatory scheme and 7 
U.S.C. 1636.

AMS Reporting

    Through this Pilot, AMS ultimately intends to publish a variety of 
reports on a national level rather than a regional basis. The published 
library of information will likely focus on the base price for 
livestock, before application of any adjustments (i.e., premiums or 
discounts) in contracts; the contract terms that provide positive or 
negative adjustment to the base price before any premiums or discounts 
are applied; the contracts' schedule of discounts from the base price; 
the contracts' schedule of premiums to the base price; and the actual 
and expected volumes of trade under these contracts. AMS also intends 
to publish information on delivery and transportation terms and the 
contract terms related to financing, risk-sharing, and profit-sharing.
    Consistent with the statutory mandate, this Pilot supports AMS's 
commitment to market transparency. AMS believes the Pilot will support 
competition by providing producers with the market information they 
need to make informed production, marketing, and business decisions. 
The Congressional reference to section 221 of the Packers and 
Stockyards Act (7 U.S.C. 198), together with the waiver of the notice-
and-comment requirements of the Administrative Procedure Act and the 
requirements of the Paperwork Reduction Act, provide AMS the direction 
and authority to promulgate this rule.

Regulatory Analyses

Exemption From Notice and Comment Rulemaking

    Sec. 779 of the Act provides that the promulgation of the 
regulations and administration of the Cattle Contracts Library pilot 
program shall be made without regard to the notice and comment 
requirements of the Administrative Procedure Act (5 U.S.C. 553 et 
seq.). Accordingly, AMS is publishing this final rule without having 
previously published a proposed rule on this action. While AMS did not 
provide for a formal comment period, it did conduct extensive outreach 
to cattle industry stakeholders, including hosting a listening session 
where AMS received comments and input. AMS also provided an opportunity 
for interested parties to submit written comments following the 
listening session, posted all input received on its website, and 
conducted additional outreach to stakeholders throughout the 
development of the Pilots. All public comments are available here: 
https://www.ams.usda.gov/market-news/livestock-poultry-grain/cattle-contracts-library. Written feedback AMS received is available here: 
https://www.ams.usda.gov/market-news/livestock-poultry-grain/cattle-contracts-library/feedback. AMS considered these comments and all 
feedback provided in the preparation of this rule, also taking into 
account the urgency of the expedited time frame provided by Congress to 
establish and operate the Pilot. Should such mandate sunset, AMS will 
suspend reporting under this rule or otherwise take actions consistent 
with relevant statutory mandates.

Executive Orders 12866 and 13563

    USDA is issuing this rule in conformance with Executive Orders 
(E.O.) 12866 and 13563, which direct agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health, and safety 
effects; distributive impacts; and equity). E.O. 13563 emphasizes the 
importance of quantifying both costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility.
    AMS designed the Pilot to maximize the net benefits of the rule and 
determined that this action, effectuating the authority and direction 
from Congress, will create benefits exceeding its costs, based on an 
assessment of the regulation's market impact as outlined in the 
Regulatory Flexibility Analysis.

Baseline

    Based on figures from the USDA World Agricultural Supply and Demand 
Estimates,\3\ U.S. beef packers slaughtered 33.97 million cattle in 
2021. Of that figure, 78.4 percent were steers and heifers, 19.9 
percent were cows, and 1.7 percent were bulls and stags. Based on the 
National Monthly Slaughter Cattle--Committed and Delivered Cattle \4\ 
data between September 2021 and August 2022, 70.8 percent of cattle in 
the categories ``steers and heifers'' and ``other fed cattle'' were 
marketed under contract, either under the ``formula'' or ``forward'' 
categories. Of the cattle reported under contract on that report, 0.6 
percent were in the other category. Based on these figures, 
approximately 22.58 million steers and heifers and an additional 135 
thousand other fed cattle are marketed under contract annually.
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    \3\ https://www.ers.usda.gov/topics/farm-economy/commodity-outlook/wasde-projections-at-a-glance/.
    \4\ https://www.ams.usda.gov/mnreports/ams_2473.pdf.
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    The AMS National Weekly Cattle and Beef Summary \5\ reports an 
annual liveweight price for steers of $139 per hundredweight for the 
year running between October 2021 and September 2022. Based on an 
actual average liveweight for cattle under slaughter of 1,370 pounds, 
the average price for steers and heifers sold under contract is 
approximately $1,904 per head. The value of all steers and heifers sold 
under contract is then $43.0 billion. Assuming that other fed cattle 
under contract are valued at 75 percent of the steer and heifer price 
per head, their value is $193 million, and the value of all cattle 
under contract is $43.2 billion.
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    \5\ https://www.ams.usda.gov/mnreports/lswwcbs.pdf.
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    The 2020 Annual Report of the AMS Packers and Stockyards Division 
\6\ states that 156 plants slaughtered cattle or calves in 2019. The 
same report notes that the four largest packers accounted for over 85 
percent of the total steer and heifer slaughter in 2019, a figure that 
reflects the presence of very large firms, which can own several plants 
with much higher daily capacities than those of smaller operations. 
Because packers slaughtering less than 5 percent of the number of fed 
cattle slaughtered nationally annually are excluded from reporting 
under the rule, AMS estimates that four packers will be required to 
report under the rule.
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    \6\ https://www.ams.usda.gov/sites/default/files/media/PackersandStockyardsAnnualReport2020.pdf.

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[[Page 74954]]

Need for the Rule

    Rulemaking is necessary to establish the Pilot as directed by 
Congress in the Act. The Pilot will allow AMS to report valuable market 
information on the structure and volume of cattle contracts. The Pilot 
will maintain information and publish a public library or catalog of 
information with contract types and terms offered by packers to cattle 
producers for the purchase of fed cattle. The information in the 
library will include information on any schedules of premiums or 
discounts, delivery and transportation terms and payments, financing, 
risk-sharing or profit sharing, and other financial arrangements 
associated with such contracts. Pursuant to the Pilot, AMS will also 
collect information on the number of head of cattle procured through 
the use of contracts.
    Currently, AMS reports market information on how cattle prices vary 
based on quality grade of cattle at the lot level. Reports issued 
pursuant to the Pilot will provide a different cross-section of 
information, including premiums and discounts for quality grade, yield 
grade, weight, and other special programs, such as breed certification 
programs or special feeding programs. Reports based on the Pilot will 
also provide information on the basis prices used in contracts and 
adjustments made to the basis based on factors such as dressing 
percentage, cattle origins, and cattle breed or type.

Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (5 U.S.C. 601-612) (RFA), AMS has considered the 
economic impact of this action on large and small entities. 
Accordingly, AMS has prepared this Regulatory Flexibility Analysis. The 
purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
unduly or disproportionately burdened.
    For the duration of the Pilot, this rule requires regulated packers 
to submit contractual information for the purchase of cattle to AMS, 
including any supplemental information on cattle requirements, 
schedules of premiums or discounts, delivery and transportation terms 
and payments, schedules or appendices of financing, risk-sharing, 
profit sharing, or other financial arrangements associated with such 
contracts, whenever new contracts are offered or existing contracts are 
updated. This rule also requires packers to report monthly both the 
number of cattle purchased under active contracts in the prior month 
and an estimate of the maximum total number of cattle to be purchased 
under active contracts for delivery to each plant for slaughter within 
the current calendar month.
    Packers subject to this Pilot are classified under code 311611 of 
the North American Industry Classification System (under the title 
``Animal (except Poultry) Slaughtering'').\7\ As per 13 CFR 121.601, 
the Small Business Administration (SBA) has established that packers 
are small businesses if they employ fewer than 1,000 employees across 
all their operations. AMS excludes packers slaughtering less than 5 
percent of the number of fed cattle slaughtered nationally annually 
from the rule's requirements to report cattle contracts, a definition 
that precludes all small packers. Because of this exclusion, AMS 
determines that establishment of this program will not create economic 
costs for small entities and does not impose a burden on them.
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    \7\ https://www.census.gov/naics/?input=311611&year=2022&details=311611.
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Benefits and Costs of the Rule

    To evaluate the total costs of the rule, AMS first calculates the 
costs on a per packer basis as follows: AMS assumes that four packers 
will be required to report contractual information under the Rule. Each 
packer will be required to electronically enter specific information on 
contract terms, an activity that AMS assumes will not need to occur 
more frequently than on a weekly basis. AMS assumes packers subject to 
this Pilot maintain, on average, 60 active contracts each. Allowing for 
15 minutes for each contract, each packer will require about 15 hours 
of manager worktime to report contract information. AMS assumes that 
reporting contract information occurs 52 times per year per packer so 
that reporting requires 780 hours of managerial time per packer 
annually. Also, AMS estimates that each packer subject to the Pilot 
requires 2 hours of managerial worktime to report the prior month's 
total cattle purchased under each active contract and to estimate and 
report the maximum number of cattle to be purchased under each active 
contract within the current calendar month. Occurring 12 times a year, 
AMS estimates monthly purchase volume reporting requires 24 hours of 
managerial worktime per plant annually. Furthermore, AMS estimates that 
mangers reporting contract data require 4 hours to learn to the rules 
reporting requirements and process.
    In total, AMS expects each packer subject to the Pilot to require 
808 hours of managerial labor time annually to comply with the rule's 
reporting requirements. AMS also estimates that 4 hours will be 
required annually, on average, for each packer's legal staff to review 
the rule and understand the conditions of compliance. Based on Bureau 
of Labor Statistics wage statistics,\8\ each packer will incur $30,470 
(808 hours * $37.71 per hour) of managerial labor costs and $218 (4 
hours * $54.38 per hour) of legal specialist labor costs annually for a 
total of $30,688 in costs per packer each year. In total across all 
packers subject to this Pilot, the rule will create costs to regulated 
entities of $122,752 annually.
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    \8\ The wage rate for a ``first-line supervisor'' under code 45-
1011 is $26.18 and for a worker in ``legal occupations'' under code 
23-0000 is $54.38 (https://www.bls.gov/oes/current/oes451011.htm).
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    AMS does not quantify the benefits to the Pilot rule but considers 
the benefits to be large and multi-faceted. First, the rule will 
improve market efficiency by improving price discovery, price 
transparency, and price transmission. While current AMS reports provide 
information on price premiums received for cattle based on grading 
percentage at the lot level, reports published with information 
obtained through the Pilot are expected to provide more detailed and 
specific information on how contract payments vary directly with 
individual carcass grades, yield grades, and cattle weights. This more 
precise information will improve price transmission and transparency 
regarding the demand for and cost of cattle of different qualities. 
Second, reports published with information obtained through the Pilot 
will likely facilitate the differentiation of cattle along quality 
dimensions and the development of new product markets by providing 
market information on premiums paid for cattle carcass characteristics 
not already documented in existing AMS reports. These can include 
grass-fed, organic, quality certification, breed, or hormone free 
programs. Third, reports published with information obtained through 
the Pilot are likely to enhance competition by reducing market 
inefficiencies associated with incomplete or asymmetric information. 
Currently, incomplete information on the availability of premiums 
associated with cattle characteristics is likely to create uncertainty 
regarding the return on investment in cattle quality improvement. By 
documenting the availability of such premiums for specific quality 
traits, producers are more likely to be reassured of having a market 
for final products and be more

[[Page 74955]]

likely to undertake appropriate investments.
    Similarly, incomplete or asymmetric information may also mask the 
true value of certain cattle. Making such information more transparent 
may improve efficiencies in the price discovery and trading markets and 
provide enhanced signals to producers with respect to output, owing to 
better insights regarding market demand and supply for cattle. Volume 
information and volume-related context may provide similar benefits.
    While AMS does not explicitly quantify the benefits to the rule, 
AMS believes these benefits significantly exceed the rule's calculated 
costs. Additionally, the Pilot is currently funded for approximately 
one calendar year. Accordingly, because the costs to the rule do not 
exceed minimum threshold levels for a rule to be considered 
significant, the rule does not meet the definition of a significant 
regulatory action under Executive Order 12866.

Paperwork Reduction Act

    Sec. 779 of the Act provides that the promulgation of the 
regulations and administration of the Cattle Contracts Library pilot 
program shall be made without regard to the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. Chapter 35). Accordingly, the Office 
of Management and Budget has not reviewed or approved the information 
collection requirements of the Pilot.

E-Government Act

    USDA is committed to complying with the E-Government Act (44 U.S.C. 
3601, et seq.) by promoting 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.

Executive Order 13175

    This rule has been reviewed under E.O. 13175--Consultation and 
Coordination with Indian Tribal Governments. E.O. 13175 requires 
Federal agencies to consult and coordinate with tribes on a government-
to-government basis on (1) policies that have tribal implications, 
including regulations, legislative comments, or proposed legislation; 
and (2) other policy statements or actions that 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.
    AMS has assessed the impact of this rule on Indian tribes and 
determined that it would not have tribal implications that require 
consultation under E.O. 13175. AMS hosts a quarterly teleconference 
with tribal leaders, where matters of mutual interest regarding the 
marketing of agricultural products are discussed. Information about the 
Cattle Contract Library pilot program will be shared during an upcoming 
quarterly call, and tribal leaders will be informed about the Pilot. 
AMS will work with the USDA Office of Tribal Relations to ensure 
meaningful consultation is provided as needed with regards to the 
Pilot.

Executive Order 12988

    This rule has been reviewed in accordance with E.O. 12988--Civil 
Justice Reform. This rule does not have retroactive effect. There are 
no administrative procedures that must be exhausted prior to judicial 
challenges to the provisions of this rule. This rule does not preempt 
any state or local laws, regulations, or policies, unless they present 
an irreconcilable conflict with this rule.

Civil Rights Review

    AMS has considered the potential civil rights implications of this 
rule on minorities, women, and persons with disabilities to ensure that 
no person or group shall be discriminated against on the basis of race, 
color, national origin, gender, religion, age, disability, sexual 
orientation, marital or family status, political beliefs, parental 
status, or protected genetic information.

List of Subjects in 7 CFR Part 180

    Cattle, Contracts, Library, Pilot, Reporting requirements.


0
For the reasons set forth in the preamble, AMS amends 7 CFR subtitle B, 
chapter 1, subchapter G by adding part 180 to read as follows:

PART 180--CATTLE CONTRACTS LIBRARY PILOT PROGRAM

Sec.
180.1 General administration.
180.2 Definitions.
180.3 Cattle Contracts Library.
180.4 Monthly cattle volume reporting.

    Authority: 7 U.S.C. 1621-1627


Sec.  180.1  General administration.

    (a) Confidentiality. The Secretary shall make information obtained 
under this part available to the public only in a manner that ensures 
that confidentiality is preserved regarding --
    (1) The identity of persons, including parties to a contract; and
    (2) Proprietary business information.
    (b) Disclosure by Federal Government employees--(1) In general. 
Subject to paragraph (b)(2) of this section, no officer, employee, or 
agent of the United States shall, without the consent of the packer or 
other person concerned, divulge or make known in any manner, any facts 
or information regarding the business of the packer or other person 
that was acquired through reporting required under this part.
    (2) Exceptions. Information obtained by the Secretary under this 
part may be disclosed--
    (i) To agents or employees of the Department of Agriculture in the 
course of their official duties under this part;
    (ii) As directed by the Secretary or the Attorney General, for 
enforcement purposes; or
    (iii) By a court of competent jurisdiction.
    (3) Disclosure under Freedom of Information Act. Notwithstanding 
any other provision of law, no facts or information obtained under this 
part shall be disclosed in accordance with section 552 of title 5, 
United States Code.
    (c) Regional reporting. The Secretary shall make information 
obtained under this part available to the public only in a manner that 
ensures that the information is published on a national or regional 
basis as the Secretary determines to be appropriate.
    (d) Adjustments. Prior to the publication of any contract 
information obtained under this part, the Secretary may make reasonable 
adjustments to address aberrations or other unusual or unique 
occurrences that the Secretary determines would distort the published 
information to the detriment of producers, packers, or other market 
participants.
    (e) Reporting methods. Information required to be reported under 
this part shall be reported by electronic means in the manner 
prescribed by the Secretary. Information may be reported in an 
alternative manner in emergencies or in cases when an alternative 
method is agreed to by both the entity required to report and the 
Secretary.
    (f) Verification. The Secretary may take such actions as are 
necessary to verify the accuracy of the information submitted or 
reported under this part.
    (g) Noncompliance. The Secretary may refer instances of non-
compliance with this part of the appropriate office of the Department 
for further investigation.


Sec.  180.2  Definitions.

    The following definitions apply to this part.

[[Page 74956]]

    Active contract. The term ``active contract'' means a contract that 
is currently available between a packer and producer under which fed 
cattle may be purchased.
    Base price. The term ``base price'' means the price paid for 
livestock, before application of any adjustments, premiums or 
discounts, expressed in dollars per hundred pounds of hot carcass 
weight or live weight.
    Base price adjustment. The term ``base price adjustment'' means the 
positive or negative adjustment to the base price before any premiums 
or discounts are applied.
    Business day. The term ``business day'' means a day on which the 
packer conducts normal business regarding livestock committed to the 
packer, or livestock purchased or sold by the packer, and the 
Department of Agriculture is open to conduct business, typically Monday 
through Friday and excluding Federal holidays.
    Calendar month. The term ``calendar month'' means a timeframe that 
begins on the first day of the month at midnight and ends on the last 
day of the month at 11:59 p.m. in the central time zone.
    Contract. The term ``contract'' means a written or oral agreement 
concerning the specific terms and conditions under which an unknown 
volume of fed cattle may be purchased by a packer during a specified 
time frame, or under which a known volume of cattle is purchased by a 
packer for a given plant during a specified time frame.
    Contract method. The term ``contract method'' means the way in 
which the contract was established, either written or oral.
    Current month. The term ``current month'' means the present 
calendar month.
    Discount. The term ``discount'' means the adjustment, expressed 
either in dollars per one hundred pound or per head, subtracted from 
the base price.
    Fed cattle. The term ``fed cattle'' means a steer or heifer that 
has been finished on a ration of roughage and feed concentrates, such 
as grains, protein meal, grass (forage), and other nutrient-rich feeds, 
prior to slaughter.
    Inactive contract. The term ``inactive contract'' means a fed 
cattle contract that is no longer available between a packer and 
producer for purchase under, or one that is not currently in use.
    Packer. The term ``packer'' means a packer that has slaughtered 
during the immediately preceding 5 calendar years an average of not 
less than 5 percent of the number of fed cattle slaughtered nationally 
during the immediately preceding 5 calendar years.
    Person. The term ``person'' means any individual, group of 
individuals, partnership, corporation, association, or other entity.
    Premium. The term ``premium'' means the adjustment, expressed 
either in dollars per one hundred pound or per head, added to the base 
price.
    Prior month. The term ``prior month'' means the calendar month 
immediately preceding the current month.
    Producer. The term ``producer'' means any person engaged in the 
business of selling livestock to a packer for slaughter (including the 
sale of livestock from a packer to another packer).
    Secretary. The term ``Secretary'' means the Secretary of 
Agriculture of the United States or any other officer or employee of 
the Department of Agriculture to whom authority has been delegated or 
may hereafter be delegated to act in the Secretary's stead.
    Selling basis. The term ``selling basis'' refers to cattle that are 
sold on a live, dressed, live converted to dressed, or dressed 
converted to live weight basis under a contract.
    Unique identifier. The term ``unique identifier'' means a unique 
code chosen by the packer for the contract, specific to the contract, 
and utilized and trackable through the life of the contract.


Sec.  180.3  Cattle Contracts Library.

    (a) Initial contract information submission. On January 6, 2023, 
each packer shall submit to the Secretary information for each active 
contract with a unique identifier. The information shall be submitted 
in accordance with Sec.  180.1(e). The contract information required to 
be reported includes:
    (1) The contract method;
    (2) The contract start and end dates; and
    (3) All terms associated with:
    (i) Each base price source and adjustment;
    (ii) Selling basis;
    (iii) Premiums and discounts;
    (iv) Specifications relating to cattle attributes;
    (v) Delivery and transportation terms and payments;
    (vi) Financing, risk-sharing, profit-sharing or other financial 
arrangements; and,
    (vii) Volume provisions.
    (b) Reporting deadlines. Within 1 business day of making a new 
contract available, making a change to an existing contract, or making 
a contract no longer available, each packer must submit the following:
    (1) Packers must submit all contract terms in accordance Sec.  
108.4(a) for each new active contract for each producer or producers at 
each plant that it operates or at which it has cattle slaughtered;
    (2) Packers must submit any changes to the terms of a previously 
submitted active contract and associated schedules or appendices, 
including the unique identifier for the previously submitted contract 
it supersedes; and
    (3) Packers must submit information to remove inactive contracts 
from the library, including the unique identifier for the now inactive 
contract.


Sec.  180.4  Monthly cattle volume reporting.

    (a) Initial estimated volume submission. On January 6, 2023, each 
packer shall submit to the Secretary an initial estimate of the total 
volume of cattle to be contracted for in the current calendar month in 
accordance with Sec.  180.1(e).
    (b) Reporting deadlines. By the close of business on the second 
Friday of each month, each packer must submit the following information 
in accordance with Sec.  180.1(e). If the second Friday of a month 
falls on a non-business day, the deadline is due no later than the 
close of the next business day following the second Friday of the 
month:
    (1) Number of cattle purchased by each base price source under each 
active contract in the prior month reported by unique identifier and
    (2) Estimate of the total number of cattle to be purchased under 
active contracts for delivery to each plant for slaughter within the 
current calendar month.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2022-26389 Filed 12-6-22; 8:45 am]
BILLING CODE P