Redefining Bona Fide Cotton Spot Markets, 18076-18077 [2023-06231]

Agencies

• Agricultural Marketing Service
• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 88, Number 58 (Monday, March 27, 2023)]
[Proposed Rules]
[Pages 18076-18077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06231]


========================================================================
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. 88, No. 58 / Monday, March 27, 2023 / 
Proposed Rules

[[Page 18076]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 27

[Doc. No. AMS-CN-22-0061]
RIN 0581-ZA33


Redefining Bona Fide Cotton Spot Markets

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Agricultural Marketing Service (AMS) is proposing to amend 
the regulation that defines two of the seven spot designated spot 
markets and change the names of the affected markets. Specifically, 
cotton grown in Oklahoma and Kansas would be moved from the East Texas/
Oklahoma spot market to the West Texas spot market. It also changes the 
names of these two markets to describe the markets more accurately.

DATES: Comments must be received by May 26, 2023.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposed rule. Comments may be submitted to Darryl 
Earnest electronically by Email: [email protected]; by mail or 
hand delivery to Cotton & Tobacco Program, AMS, USDA, 3275 Appling 
Road, Room 11, Memphis, TN 38133; or via the internet at: https://www.regulations.gov. Comments should reference the document number and 
the date and page number of this issue of the Federal Register and can 
be viewed at: https://www.regulations.gov. All comments submitted in 
response to this proposed rule will be included in the record and will 
be made available for public viewing at: https://www.regulations.gov. 
Please be advised that the identity of the individuals or entities 
submitting the comments will be made public on the internet at the 
address provided above.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton & Tobacco Program, AMS, USDA, 3275 Appling Road, Room 11, 
Memphis, TN 38133. Telephone: (901) 384-3000, Fax: (901) 384-3033, or 
Email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Secretary of Agriculture is authorized under the United States 
Cotton Futures Act (7 U.S.C. 15b) to designate at least five bona fide 
spot markets from which cotton price information can be collected. A 
spot market--also called the ``cash market'' or ``physical market''- is 
a market where commodities are sold on the spot for cash at current 
market prices and delivered immediately. Updated designations for these 
bona fide spot markets and the determination of which counties and 
states compose each of these spot markets were most recently published 
in the Federal Register on April 30, 2013 (78 FR 25181). For each of 
these bona fide spot markets, AMS's Cotton and Tobacco Program collects 
market price information under the United States Cotton Futures Act (7 
U.S.C. 15b), the Cotton Statistics and Estimates Act (7 U.S.C. 473b) 
and the Agricultural Marketing Act of 1946 (7 U.S.C. 1622(g)). This 
price information is then used to calculate price differences for 
cotton futures contracts.
    The Cotton and Tobacco Program (Program) received a request from 
the American Cotton Shippers Association (ACSA) and the National Cotton 
Council of America (NCC), to evaluate the structure of the cotton spot 
markets in East and West Texas, Oklahoma, and Kansas. The Program's 
analysis of the East Texas/Oklahoma market determined that cotton grown 
in Oklahoma and Kansas has similar quality characteristics and was 
traded under the same terms and conditions as West Texas cotton. 
Further, the analysis showed that there was not any significant 
difference in the prices reported to Cotton and Tobacco Market News 
when comparing Oklahoma and Kansas cotton to West Texas cotton. As a 
result, ACSA and NCC requested that cotton grown in Oklahoma and Kansas 
be moved from the East Texas/Oklahoma spot market to the West Texas 
spot market. Revisions to the regulations concerning bona fide spot 
market definitions are necessary to assure consistency with the revised 
Cotton Research and Promotion Act and to allow for published spot 
quotes to consider spot prices of cotton marketed in Kansas and 
Oklahoma. Corresponding changes to the names of these two spot markets 
would be made to describe the markets more accurately.

Executive Order 13175

    This action has been reviewed in accordance with the requirements 
of Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments. The review reveals that this regulation would not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12866

    This proposed rule has been determined to be not significant for 
purposes of Executive Order 12866; and, therefore has not been reviewed 
by the Office of Management and Budget (OMB).

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
There are no administrative procedures that must be exhausted prior to 
any judicial challenge to the provisions of this rule.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this action on small entities and has determined that its 
implementation will not have a significant economic impact on a 
substantial number of small businesses.
    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 
disproportionately burdened. There are an estimated 25,000 cotton 
growers in the U.S. who voluntarily use the AMS cotton classing 
services annually, and the majority of these cotton growers are small 
businesses under the criteria established by the Small Business 
Administration (13 CFR 121.201).
    Changes in cotton spot market definitions as stated will not 
significantly affect small businesses as defined in the RFA because:

[[Page 18077]]

    (1) How spot prices are estimated are not expected to be impacted 
by this action;
    (2) Business practices of the U.S. cotton industry are not expected 
to change as a result of this action;
    (3) Costs associated with providing market news services will not 
be significantly changed by this action;
    (4) Market news services are paid for by appropriated funds; 
therefore, users are not charged fees for the provision of the 
services.

Paperwork Reduction Act

    In compliance with OMB regulations (5 CFR part 1320), which 
implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501), the 
information collection requirements contained in the provisions to be 
amended by this proposed rule have been previously approved by OMB and 
were assigned OMB control number 0581-0009, Cotton Classification and 
Market News Service.
    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.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this proposed rule.

List of Subjects in 7 CFR Part 27

    Commodity futures, Cotton.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service proposes to amend 7 CFR part 27 as follows:

PART 27--COTTON CLASSIFICATION UNDER COTTON FUTURES LEGISLATION

0
1. The authority citation for 7 CFR part 27 continues to read as 
follows:

    Authority: 7 U.S.C. 15b, 7 U.S.C. 473b, 7 U.S.C. 1622(g).

0
2. In Sec.  27.93, the definitions of the ``East Texas and Oklahoma,'' 
and ``West Texas'' markets are revised to read as follows:


Sec.  27.93  Bona fide spot markets.

* * * * *

East Texas and South Texas

    Texas counties east of and including Montague, Wise, Parker, Erath, 
Comanche, Mills, San Saba, Mason, Sutton, Edwards, Kinney, Maverick, 
Webb, Zapata, Star and Hidalgo counties.
* * * * *

West Texas, Kansas, and Oklahoma

    All counties in Kansas and Oklahoma, all Texas counties not 
included in the East Texas, South Texas, and Desert Southwest Markets 
and the New Mexico counties of Union, Quay, Curry, Roosevelt, and Lea.
* * * * *
0
3. In Sec.  27.94, paragraph (a) is revised to read as follows:


Sec.  27.94  Spot markets for contract settlement purposes.

* * * * *
    (a) For cotton delivered in settlement of any No. 2 contract on the 
Intercontinental Exchange (ICE); Southeastern; North and South Delta; 
East Texas and South Texas; West Texas, Kansas, and Oklahoma; and 
Desert Southwest.
* * * * *

Melissa Bailey,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-06231 Filed 3-24-23; 8:45 am]
BILLING CODE P