Marketing Order Regulating the Handling of Spearmint Oil Produced in the Far West; Salable Quantities and Allotment Percentages for the 2024-2025 Marketing Year, 45557-45563 [2024-11307]
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Rules and Regulations
Federal Register
Vol. 89, No. 101
Thursday, May 23, 2024
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS–SC–23–0068]
Marketing Order Regulating the
Handling of Spearmint Oil Produced in
the Far West; Salable Quantities and
Allotment Percentages for the 2024–
2025 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
This rule establishes salable
quantities and allotment percentages for
Class 1 (Scotch) and Class 3 (Native)
spearmint oil produced in Washington,
Idaho, Oregon, and parts of Nevada and
Utah (Far West) for the 2024–2025
marketing year. This rule also removes
references to past volume regulations no
longer in effect.
DATES: Effective June 24, 2024.
FOR FURTHER INFORMATION CONTACT: Josh
Wilde, Marketing Specialist, or Barry
Broadbent, Acting Chief, West Region
Branch, Market Development Division,
Specialty Crops Program, AMS, USDA;
Telephone: (503) 326–2724, or Email:
Joshua.R.Wilde@usda.gov or
Barry.Broadbent@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) 720–8085, or Email:
Richard.Lower@usda.gov.
SUPPLEMENTARY INFORMATION: This
action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out
a marketing order as defined in 7 CFR
900.2(j). This rule is issued under
Marketing Order No. 985, as amended (7
CFR part 985), regulating the handling
of spearmint oil produced in the Far
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SUMMARY:
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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
Far West Spearmint Oil Administrative
Committee (Committee) locally
administers the Order and comprises
spearmint oil producers operating
within the area of production, and a
public member.
The Agricultural Marketing Service
(AMS) is issuing this rulemaking in
conformance with Executive Orders
12866, 13563, and 14094. Executive
Orders 12866 and 13563 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). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits,
reducing costs, harmonizing rules, and
promoting flexibility. Executive Order
14094 reaffirms, supplements, and
updates Executive Order 12866 and
further directs agencies to solicit and
consider input from a wide range of
affected and interested parties through a
variety of means. This action falls
within a category of regulatory actions
that the Office of Management and
Budget (OMB) exempted from Executive
Order 12866 review.
This rulemaking has been reviewed
under Executive Order 13175—
Consultation and Coordination with
Indian Tribal Governments, which
requires Federal agencies to consider
whether their rulemaking actions would
have Tribal implications. AMS has
determined that this 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 rulemaking has been reviewed
under Executive Order 12988—Civil
Justice Reform. This rulemaking 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 rulemaking establishes salable
quantities and allotment percentages for
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Scotch and Native spearmint oil for the
2024–2025 marketing year, which
begins on June 1, 2024.
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 the U.S. Department of Agriculture
(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.
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 AMS 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 West spearmint oil
are satisfied and orderly marketing
conditions are maintained.
Salable quantity represents 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. The
allotment percentage for each class of
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spearmint oil is the salable quantity for
that class of oil divided by the total of
all producers’ allotment base for the
same class of oil. A producer’s allotment
base is their calculated share of the
spearmint oil market based on a
statistical representation of past
spearmint production and sales. To
account for changes in production and
demand over time, the Committee
periodically reviews and adjusts each
producer’s allotment base in accordance
with a formula prescribed by the
Committee and approved by AMS. Each
producer’s annual allotment of the
salable quantity 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 total allotment base
is revised each year on June 1 to account
for producer allotment 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 maintain orderly marketing
conditions while also ensuring that
markets are adequately supplied.
Further, 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 11,
2023, to consider its marketing policy
for the 2024–2025 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, with a vote of seven in
favor and none opposed, a salable
quantity and allotment percentage for
Scotch spearmint oil of 663,648 pounds
and 29 percent, respectively. In
addition, the Committee unanimously
recommended a salable quantity and
allotment percentage for Native
spearmint oil of 678,980 pounds and 26
percent, respectively.
This final action establishes the
amount of Scotch and Native spearmint
oil that handlers may purchase from, or
handle on behalf of, producers during
the 2024–2025 marketing year, which
begins on June 1, 2024. Salable
quantities and allotment percentages
have been in effect each season since
the Order’s inception in 1980.
Scotch Spearmint Oil
The Committee recommended a
Scotch spearmint oil salable quantity of
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663,648 pounds and an allotment
percentage of 29 percent for the 2024–
2025 marketing year. The 2024–2025
marketing year salable quantity of
663,648 pounds is 109,056 pounds less
than the salable quantity of 772,704
pounds established for the 2023–2024
marketing year. The recommended 29
percent allotment percentage for the
2024–2025 marketing year is 5 percent
less than the 34 percent in effect the
previous marketing year.
The total allotment base for the
coming marketing year is estimated to
be 2,288,442 pounds. This figure
represents a one-percent increase over
the revised 2023–2024 marketing year
total allotment base of 2,265,784
pounds. The salable quantity (663,648
pounds) is the product of total allotment
base (2,288,442 pounds) times the
allotment percentage (approximately
28.99 percent, rounded to 29 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 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 483,617 pounds of
Scotch spearmint production in 2023.
Industry reports indicate that trade
demand for Far West Scotch spearmint
oil, which had been declining in recent
years, has begun to stabilize. Sales of
Far West Scotch spearmint oil declined
from a high of 1,060,232 pounds during
the 2014–2015 marketing year to a low
of 488,484 pounds in the 2020–2021
marketing year. Sales of Far West Scotch
spearmint oil totaled 597,852 pounds
during the 2022–2023 marketing year,
the last full year of available data. The
Committee indicates that production of
Scotch spearmint oil in competing
markets, most notably by Canadian
producers, continues to exert downward
pressure on trade demand for Scotch
spearmint oil from the Far West.
Given the anticipated market
conditions for the coming year, the
Committee estimates that Scotch
spearmint oil trade demand for the
2024–2025 marketing year will be
600,000 pounds, which is 35,000
pounds lower than the prior year
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estimate and just below the 5-year
moving sales average of 614,157
pounds. Should the established volume
regulation levels prove insufficient to
adequately supply the market, the
Committee has the authority to
recommend intra-seasonal increases of
the salable quantity and allotment
percentage, as it has in previous
marketing years.
The Committee calculated the
minimum salable quantity of Scotch
spearmint oil that will be required
during the 2024–2025 marketing year
(266,880 pounds) by subtracting the
estimated salable carry-in on June 1,
2024, (333,120 pounds) from the
estimated trade demand (600,000
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 will be
fully supplied, the Committee
recommended a 2024–2025 marketing
year salable quantity of 663,648 pounds.
The recommended salable quantity,
combined with an estimated 333,120
pounds of salable carry-in from the
previous year, yields a total available
supply of 996,768 pounds of Scotch
spearmint oil for the 2024–2025
marketing year. With the recommended
salable quantity and current market
environment, the Committee estimates
that as much as 396,768 pounds of
salable Scotch spearmint oil could be
carried into the 2025–2026 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.
The Committee estimates that there
will be 333,120 pounds of salable carryin of Scotch spearmint oil on June 1,
2024. If current market conditions are
maintained and the Committee’s
projections are correct, salable carry-in
will increase to 396,768 pounds at the
beginning of the 2025–2026 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 their annual allotment
for the 2024–2025 marketing year.
Further, the Committee estimates that as
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much as 296,118 pounds of the 2023–
2024 marketing year annual allotment
may not be filled by producers. While
the Committee has not projected unused
base allotment for the upcoming 2024–
2025 marketing year, it anticipates that
the actual quantity of Scotch spearmint
oil carried into the 2024–2025
marketing year will be much less than
the quantity calculated above (333,120
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 and is restricted from freely
entering the market. 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. The Order does
include provision for reserve oil to be
released for limited market development
projects, with approval of the Secretary,
but this provision is rarely utilized.
Oil held in the reserve pool is another
indicator of excess supply. Scotch
spearmint oil held in reserve was 26,062
pounds as of May 31, 2023, up from
23,667 pounds as of May 31, 2022. 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 29 percent for
the 2024–2025 marketing year for
Scotch spearmint oil. During its October
11, 2023, meeting, the Committee
calculated an initial allotment
percentage by dividing the minimum
required salable quantity (266,880
pounds) by the total estimated allotment
base (2,288,442 pounds), resulting in
11.7 percent. However, producers and
handlers at the meeting indicated that
the computed percentage (11.7 percent)
might not adequately satisfy potential
2024–2025 marketing year Scotch
spearmint oil market demand and may
also result in a less than desirable carryin for the subsequent marketing year.
After deliberation, the Committee
recommended an allotment percentage
of 29 percent. The total estimated
allotment base (2,288,442 pounds) for
the 2024–2025 marketing year,
multiplied by the recommended
allotment percentage (29 percent),
yields 663,648 pounds, which is the
recommended salable quantity for the
2024–2025 marketing year.
The 2024–2025 marketing year
computational data for the Committee’s
recommendations is detailed below.
(A) Estimated carry-in of Scotch
spearmint oil on June 1, 2024: 333,120
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pounds. This figure is the difference
between the 2023–2024 marketing year
total available supply of 933,120 pounds
and the revised 2023–2024 marketing
year estimated trade demand of 600,000
pounds.
(B) Estimated trade demand of Scotch
spearmint oil for the 2024–2025
marketing year: 600,000 pounds. This
figure was established at the Committee
meeting held on October 11, 2023.
(C) Minimum salable quantity of
Scotch spearmint oil required from the
2024–2025 marketing year production:
266,880 pounds. This figure is the
difference between the estimated 2024–
2025 marketing year trade demand
(600,000 pounds) and the estimated
carry-in on June 1, 2024 (333,120
pounds). This salable quantity
represents the minimum amount of
Scotch spearmint oil that may be
needed to satisfy estimated demand for
the coming year.
(D) Total estimated Scotch spearmint
oil allotment base of for the 2024–2025
marketing year: 2,288,442 pounds. This
figure represents a one-percent increase
over the 2023–2024 marketing year total
actual allotment base of 2,265,784
pounds, as prescribed by § 985.53(d).
The one-percent increase equals 22,658
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 2024–2025
marketing year: 11.7 percent. This
percentage is computed by dividing the
minimum required salable quantity
(266,880) by the total estimated
allotment base (2,288,442 pounds).
(F) Recommended Scotch spearmint
oil allotment percentage for the 2024–
2025 marketing year: 29 percent. This is
the Committee’s recommendation and is
based on the computed allotment
percentage (11.7 percent) and input
from producers and handlers at the
October 11, 2023, meeting. The
recommended 29 percent allotment
percentage reflects the Committee’s
belief that the computed percentage
(11.7 percent) may not adequately
supply the anticipated 2024–2025
marketing year Scotch spearmint oil
market demand.
(G) Recommended Scotch spearmint
oil salable quantity for the 2024–2025
marketing year: 663,648 pounds. This
figure is the product of the
recommended salable allotment
percentage (29 percent) and the total
estimated allotment base (2,288,442
pounds) for the 2024–2025 marketing
year.
(H) Estimated total available supply
of Scotch spearmint oil for the 2024–
2025 marketing year: 996,768 pounds.
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This figure is the sum of the 2024–2025
marketing year recommended salable
quantity (663,648 pounds) and the
estimated carry-in on June 1, 2024
(333,120 pounds).
For the reasons stated above, the
Committee believes that the salable
quantity and allotment percentage
established herein will adequately
satisfy trade demand, will result in a
reasonable carry-in for the following
year, and will contribute to the orderly
marketing of Scotch spearmint oil.
Native Spearmint Oil
The Committee recommended a
Native spearmint oil salable quantity of
678,980 pounds and an allotment
percentage of 26 percent for the 2024–
2025 marketing year. These figures are,
respectively, 355,512 pounds and 14
percentage points lower than the levels
established for the 2023–2024 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 2023
Native spearmint oil production will
total 1,015,570 pounds, up from the
previous year’s production of 941,026
pounds. Committee records indicate
that spearmint-producing acres in the
Far West declined from a recent high of
9,013 acres in 2019 to 6,078 acres of
Native spearmint production in 2022,
before rebounding to an estimated 6,761
acres in 2023 on the strength of new
plantings.
Sales of Native spearmint oil have
been trending downward since the
2017–2018 marketing year, falling from
a recent high of 1,332,260 pounds
during the 2020–2021 marketing year to
988,536 pounds for the 2021–2022
marketing year, representing a 10-year
low. However, sales of Native spearmint
oil improved slightly to 1,044,835
pounds for the 2022–2023 marketing
year, the last full year for which data is
available. The Committee expects
demand to remain fairly stable,
estimating trade demand for Native
spearmint oil at 1,000,000 pounds for
the 2024–2025 marketing year.
The Committee anticipates that
447,520 pounds of salable Native
spearmint oil from prior years will be
carried into the 2024–2025 marketing
year. This amount is up from the
308,440 pounds of salable oil carried
into the 2023–2024 marketing year and
well above the level that the Committee
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generally considers favorable (150,000
pounds).
The Committee estimates that there
will be 1,048,733 pounds of Native
spearmint oil in the reserve pool at the
beginning of the 2024–2025 marketing
year. Native reserve pool oil has been
fairly stable over the past several
marketing years. The reserve pool
increased from 996,050 pounds at the
start of the 2016–2017 marketing year to
1,219,122 pounds to start the 2021–2022
marketing year. However, the pool was
reduced to 1,055,135 pounds by the
start of the 2022–2023 marketing year,
in line with the 1,048,733 pounds of
Native spearmint oil that the Committee
projects will be held in the reserve pool
to begin the 2024–2025 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. However, increases in domestic
production of Native spearmint from
regions outside of the Far West
production area has created additional
competition for market share. For
example, there were fewer than 2,000
acres of Native spearmint production in
the U.S. Midwest region in 2016,
compared with over 10,000 acres of
Native spearmint oil production in the
Far West. However, the Committee’s
2023 estimates indicate that Far West
acreage has declined to approximately
6,761 acres, compared to Native
spearmint producing acreage of around
3,000 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.
Given the anticipated market
conditions for the coming year, the
Committee estimated the 2024–2025
marketing year Native spearmint oil
trade demand to be 1,000,000 pounds.
This figure is based on input provided
by producers at six production area
meetings held in September and
October 2023, as well as estimates
provided by handlers and other meeting
participants at the October 11, 2023,
Committee meeting. This figure
represents a decrease of 150,000 pounds
from the previous year’s estimated trade
demand for the 2023–2024 marketing
year. The average estimated trade
demand for Native spearmint oil
derived from the production area
meetings was 1,020,833 pounds,
whereas the handlers’ estimates ranged
from 950,000 to 1,200,000 pounds. The
quantity marketed over the most recent
full marketing year, 2022–2023, was
1,044,835 pounds.
The estimated June 1, 2024, carry-in
of 447,520 pounds of Native spearmint
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oil, plus the recommended 2024–2025
marketing year salable quantity of
678,980 pounds, will result in an
estimated total available supply of
1,126,500 pounds of Native spearmint
oil during the 2024–2025 marketing
year. With the corresponding estimated
trade demand of 1,000,000 pounds, the
Committee projects that 126,500 pounds
of salable oil will be carried into the
2025–2026 marketing year. The
Committee estimates that there will be
1,048,733 pounds of Native spearmint
oil held in the reserve pool at the
beginning of the 2024–2025 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 intraseasonal increase in the salable quantity
and allotment percentage to satisfy that
demand.
The Committee recommended a
Native spearmint oil allotment
percentage of 26 percent for the 2024–
2025 marketing year. During its October
11, 2023, meeting, the Committee
calculated an initial allotment
percentage of 21.2 percent by dividing
the minimum required salable quantity
to satisfy estimated trade demand
(552,480 pounds) by the total allotment
base (2,611,463 pounds). However,
producers and handlers at the meeting
expressed concern that the computed
percentage of 21.2 percent may not
adequately supply the potential 2024–
2025 marketing year Native spearmint
oil market demand. Further, it could
result in a less than adequate carry-in
for the subsequent marketing year. After
deliberation, the Committee increased
its allotment percentage
recommendation to 26 percent. The
total estimated Native spearmint oil
allotment base (2,611,463 pounds)
multiplied by the recommended salable
allotment percentage (26 percent) yields
678,980 pounds, the recommended
Native spearmint oil salable quantity for
the 2024–2025 marketing year.
The 2024–2025 marketing year
computational data for the Committee’s
recommendation is further outlined
below.
(A) Estimated carry-in of Native
spearmint oil on June 1, 2024: 447,520
pounds. This figure is the difference
between the estimated 2023–2024
marketing year total available supply of
1,447,520 pounds and the revised 2023–
2024 marketing year estimated trade
demand of 1,000,000 pounds.
(B) Estimated trade demand of Native
spearmint oil for the 2024–2025
marketing year: 1,000,000 pounds. This
estimate was established by the
Committee at its October 11, 2023,
meeting.
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(C) Minimum salable quantity of
Native spearmint oil required from the
2024–2025 marketing year production:
552,480 pounds. This figure is the
difference between the 2024–2025
marketing year estimated trade demand
(1,000,000 pounds) and the estimated
carry-in on June 1, 2024 (447,520
pounds). This is the minimum amount
of Native spearmint oil that the
Committee believes may be required to
meet the anticipated 2024–2025
marketing year trade demand.
(D) Total estimated allotment base of
Native spearmint oil for the 2024–2025
marketing year: 2,611,463 pounds. This
figure represents a one-percent increase
over the 2023–2024 marketing year
actual total allotment base of 2,585,607
pounds as prescribed in § 985.53(d). The
one-percent increase equals 25,856
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 2024–2025
marketing year: 21.2 percent. This
percentage is calculated by dividing the
required minimum salable quantity
(552,480 pounds) by the total estimated
allotment base (2,611,463 pounds) for
the 2024–2025 marketing year.
(F) Recommended Native spearmint
oil allotment percentage for the 2024–
2025 marketing year: 26 percent. This is
the Committee’s recommendation based
on the computed allotment percentage
(21.2 percent) and input from producers
and handlers at the October 11, 2023,
meeting. The recommended 26 percent
allotment percentage is also based on
the Committee’s belief that the
computed percentage (21.2 percent) may
not adequately supply the potential
market for Native spearmint oil in the
2024–2025 marketing year or allow for
sufficient salable Native spearmint oil to
be carried into the beginning of the
2024–2025 marketing year.
(G) Recommended Native spearmint
oil 2024–2025 marketing year salable
quantity: 678,980 pounds. This figure is
the product of the recommended
allotment percentage (26 percent) and
the total estimated allotment base
(2,611,463 pounds).
(H) Estimated available supply of
Native spearmint oil for the 2024–2025
marketing year: 1,126,500 pounds. This
figure is the sum of the 2024–2025
marketing year recommended salable
quantity (678,980 pounds) and the
estimated carry-in on June 1, 2024
(447,520 pounds). This amount could be
increased, as needed, through an intraseasonal increase in the salable quantity
and allotment percentage.
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Federal Register / Vol. 89, No. 101 / Thursday, May 23, 2024 / Rules and Regulations
The Scotch and Native spearmint oil
salable quantities and allotment
percentages of 663,648 pounds and 29
percent, and 678,980 pounds and 26
percent, respectively, are expected to
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 rulemaking is similar to regulations
issued in prior seasons.
The salable quantities in this
rulemaking 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. Each producer
controls the disposition of their
respective reserve pool spearmint oil, in
accordance with market needs and the
Order’s volume regulation provisions,
and under the Committee’s oversight.
AMS has reviewed the Committee’s
marketing policy statement for the
2024–2025 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 salable
quantities and allotment percentages in
this rule are expected to 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
rulemaking also provides producers
with information regarding the amount
of spearmint oil that should be
produced for the 2024–2025 and
subsequent marketing years to meet
anticipated market demand.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), AMS has considered
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the economic impact of this rulemaking
on small entities. Accordingly, AMS has
prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit
regulatory actions to the scale of
businesses subject to such actions in
order that small businesses will not be
unduly or disproportionately burdened.
Marketing orders issued pursuant to the
Act, and the rules issued thereunder, are
unique in that they are brought about
through group action of essentially
small entities acting on their own
behalf.
There are approximately 39 producers
of Scotch spearmint oil and 92
producers of Native spearmint oil
operating within the regulated
production area. In addition, there are
approximately 7 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 equal to or less than
$34.0 million (Postharvest Crop
Activities, NAICS code 115114). Small
agricultural producers of spearmint oil
are defined as those having annual
receipts of equal to or less than $2.5
million (All Other Miscellaneous Crop
Farming, NAICS code 111998) (13 CFR
part 121).
The Committee reported that recent
producer prices for spearmint oil have
ranged from $18.00 to $22.00 per
pound. The National Agricultural
Statistics Service (NASS) reported that
the 2022 U.S. season average spearmint
oil producer price per pound was
$20.40. Spearmint oil utilization for the
2022–2023 marketing year, as reported
by the Committee, was 597,852 pounds
and 1,044,835 pounds for Scotch and
Native spearmint oil, respectively, for a
total of 1,642,687 pounds. Multiplying
$20.40 per pound by 2022–2023
marketing year spearmint oil utilization
of 1,642,687 pounds yields a crop value
estimate of about $33.5 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 $20.40
average spearmint oil price and
Committee production data for each
producer, the Committee estimates that
38 of the 39 Scotch spearmint oil
producers and all of the 92 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
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45561
Committee estimates an average
spearmint oil handling markup at
approximately 20 percent of the price
received by producers. Twenty percent
of the 2022 producer price ($20.40) is
$4.08, which results in a handler Free
on Board (f.o.b.) price per pound
estimate of $24.48 ($20.40 + $4.08).
Multiplying this estimated handler
f.o.b. price by the 2022–2023 marketing
year total spearmint oil utilization of
1,642,687 pounds results in an
estimated handler-level spearmint oil
value of $40.2 million. Dividing this
figure by the number of handlers (7)
yields estimated average annual handler
receipts of about $5.7 million, which is
well below the $34.0 million SBA
threshold for small agricultural service
firms.
Furthermore, using confidential data
compiled by the Committee on the
pounds of spearmint oil handled by
each handler and the abovementioned
estimated handler price per pound, the
Committee reported that it is not likely
that any of the seven handlers had
2022–2023 marketing year spearmint oil
sales that exceeded SBA’s 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 rulemaking establishes 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 2024–2025
marketing year. The Committee
recommended this 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 from or handled on behalf of
producers during the marketing year
through volume regulation allows
producers to coordinate their spearmint
oil production with the expected market
demand. Authority for this action is
provided in §§ 985.50, 985.51, and
985.52 of the Order.
The Committee estimates the total
trade demand for the 2024–2025
marketing year for both classes of oil at
1,600,000 pounds. In addition, the
Committee expects that the combined
salable carry-in for both classes of
spearmint oil will be 780,640 pounds.
As such, the combined required salable
quantity for the 2024–2025 marketing
year is estimated to be 819,360 pounds
(1,600,000 pounds trade demand less
780,640 pounds carry-in). Under
volume regulation, total sales of
spearmint oil by producers for the
2024–2025 marketing year will be held
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Federal Register / Vol. 89, No. 101 / Thursday, May 23, 2024 / Rules and Regulations
to 2,123,268 pounds (the recommended
salable quantity for both classes of
spearmint oil of 1,342,628 pounds plus
780,640 of carry-in).
This total available supply of
2,123,268 pounds should be more than
adequate to supply the 1,600,000
pounds of anticipated total trade
demand for spearmint oil. In addition,
as of May 31, 2023, the total reserve
pool for both classes of spearmint oil
stood at 1,081,197 pounds. That
quantity is expected to remain relatively
unchanged over the course of the 2023–
2024 marketing year, with current
Committee reserve pool estimates
totaling 1,082,744 pounds. Should trade
demand increase unexpectedly during
the 2024–2025 marketing year, reserve
pool spearmint oil could be released
into the market to supply that increase
in demand.
The recommended allotment
percentages, upon which 2024–2025
marketing year annual producer
allotments are based, are 29 percent for
Scotch spearmint oil and 26 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 AMS econometric model used to
evaluate the Far West spearmint oil
market estimated that the season
average producer price per pound (for
both classes of spearmint oil) would
decline about $1.55 per pound without
volume regulation. The surplus
situation for the spearmint oil market
that would exist without volume
regulation in the 2024–2025 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–
2022 (the years in which the Order has
been in effect, and for which NASS data
is available), 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
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15:49 May 22, 2024
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spearmint oil and will 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 are more
likely to 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 reduce the
allotment percentage and salable
quantity for both Scotch spearmint oil
and Native spearmint oil from the levels
established for the 2023–2024 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 established in
this rule will 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 established
herein are expected to facilitate the goal
of maintaining orderly marketing
conditions for Far West spearmint oil
for the 2024–2025 and future marketing
years.
This rulemaking establishes the
salable quantities and allotment
PO 00000
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Fmt 4700
Sfmt 4700
percentages for Scotch and Native
spearmint oil produced in the Far West
during the 2024–2025 marketing year.
Costs to producers and handlers, large
and small, resulting from this action 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 in those requirements are
necessary as a result of this rulemaking.
Should any changes become necessary,
they would be submitted to OMB for
approval.
This rulemaking does not impose any
additional reporting or recordkeeping
requirements on either small or large
Far West spearmint oil handlers. As
with all Federal marketing order
programs, reports and forms are
periodically reviewed to reduce
information requirements and
duplication by industry and public
sector agencies.
AMS is committed to complying with
the E-Government Act, to promote the
use of the internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
AMS has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rulemaking.
A proposed rule concerning this
action was published in the Federal
Register on January 25, 2024 (89 FR
4835). Copies of the proposed rule were
also mailed or sent via email to all Far
West spearmint oil handlers. The
proposal was made available through
the internet by USDA and the Office of
the Federal Register. A 30-day comment
period ending February 26, 2024, was
provided for interested persons to
respond to the proposal. No comments
were received during the comment
period. Accordingly, no changes have
been made to the rule as proposed.
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 guide should be
sent to Richard Lower at the previously
mentioned address in the FOR FURTHER
INFORMATION CONTACT section.
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Federal Register / Vol. 89, No. 101 / Thursday, May 23, 2024 / Rules and Regulations
After consideration of all relevant
material presented, including the
information and recommendations
submitted by the Committee and other
available information, AMS has
determined that this rule tends to
effectuate the declared policy of the Act.
Rural Utilities Service
7 CFR Parts 1710, 1717, 1721, 1726,
and 1730
[Docket No. RUS–23–ELECTRIC–0024]
List of Subjects in 7 CFR Part 985
RIN 0572–AC64
Marketing agreements, Oils and fats,
Reporting and recordkeeping
requirements.
Revision to Electric Program Operating
Policies and Procedures
Rural Utilities, U.S.
Department of Agriculture (USDA).
ACTION: Final rule; confirmation.
AGENCY:
For the reasons set forth in the
preamble, the Agriculture Marketing
Service amends 7 CFR part 985 as
follows:
1. The authority citation for part 985
continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
■
2. Revise § 985.233 to read as follows:
§ 985.233 Salable quantities and allotment
percentages—2023–2024 marketing year.
The salable quantity and allotment
percentage for each class of spearmint
oil during the marketing year beginning
on June 1, 2023, shall be as follows:
(a) Class 1 (Scotch) oil—a salable
quantity of 772,704 pounds and an
allotment percentage of 34 percent.
(b) Class 3 (Native) oil—a salable
quantity of 1,034,492 pounds and an
allotment percentage of 40 percent.
■
3. Revise § 985.234 to read as follows:
§ 985.234 Salable quantities and allotment
percentages—2024–2025 marketing year.
The salable quantity and allotment
percentage for each class of spearmint
oil during the marketing year beginning
on June 1, 2024, shall be as follows:
(a) Class 1 (Scotch) oil—a salable
quantity of 663,648 pounds and an
allotment percentage of 29 percent.
(b) Class 3 (Native) oil—a salable
quantity of 678,980 pounds and an
allotment percentage of 26 percent.
§§ 985.235 through 985.238
[Removed]
4. Remove §§ 985.235 through
985.238.
■
Erin Morris,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2024–11307 Filed 5–22–24; 8:45 am]
BILLING CODE P
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15:49 May 22, 2024
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The Rural Utilities Service
(RUS or Agency), an agency in the
United States Department of Agriculture
(USDA) Rural Development Mission
area, published a final rule with
comment in the Federal Register on
March 11, 2024, to provide more
flexibility for the RUS Electric Program
borrowers to complete emergency
repairs while maintaining the ability to
receive RUS financing, to delete
unnecessary and outdated requirements
imposed on electric borrowers and
applicants, and to provide flexibility in
selecting construction procurement
methods that better support applicant
needs in awarding construction
contracts. Through this action, RUS is
confirming the final rule as it was
published.
SUMMARY:
PART 985—MARKETING ORDER
REGULATING THE HANDLING OF
SPEARMINT OIL PRODUCED IN THE
FAR WEST
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DEPARTMENT OF AGRICULTURE
The final rule published March
11, 2024, at 89 FR 17271, is confirmed
as of June 10, 2024.
FOR FURTHER INFORMATION CONTACT:
Mark Bartholomew, Rural Utilities
Service Electric Program, Rural
Development, United States Department
of Agriculture, 1400 Independence
Avenue SW, STOP 1560, Washington,
DC 20250; 704–544–4612
mark.bartholomew@usda.gov.
SUPPLEMENTARY INFORMATION: Rural
Development is a mission area within
the U.S. Department of Agriculture
(USDA) comprising the Rural Utilities
Service, Rural Housing Service, and
Rural Business-Cooperative Service.
Rural Development’s mission is to
increase economic opportunity and
improve the quality of life for all rural
Americans. Rural Development meets
its mission by providing loans, loan
guarantees, grants, and technical
assistance through numerous programs
aimed at creating and improving
housing, business, and infrastructure
throughout rural America.
The RUS Electric Program provides
funding to maintain, expand, upgrade,
and modernize America’s rural electric
infrastructure. The loans and loan
DATES:
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45563
guarantees finance the construction or
improvement of electric distribution,
transmission, and generation facilities
in rural areas. In an effort by the RUS
Electric Program to administer its
program in an efficient and effective
manner while improving its customer
service and experience, and in response
to requests from the RUS Electric
Program borrowers, the Electric Program
undertook a systematic review of
regulations and procedures in place to
administer its program. In addition to
this final rule, the Electric Program has
completed three other streamlining
efforts to date.
The final rule that published March
11, 2024 (89 FR 17271), included a 60day comment period that ended on May
10, 2024. No comments pertaining to the
final rule were received. The Agency
confirms the final rule without change.
Andrew Berke,
Administrator, Rural Utilities Service.
[FR Doc. 2024–11349 Filed 5–22–24; 8:45 am]
BILLING CODE 3410–15–P
DEPARTMENT OF ENERGY
10 CFR Part 1021
[DOE–HQ–2023–0063]
RIN 1990–AA48
National Environmental Policy Act
Implementing Procedures; Correction
Office of the General Counsel,
Department of Energy.
ACTION: Final rule; correction.
AGENCY:
The U.S. Department of
Energy (DOE or the Department) is
correcting a final rule that was
published in the Federal Register on
April 30, 2024. The final rule revised
National Environmental Policy Act
(NEPA) implementing procedures
(regulations). This document corrects an
error in that final rule.
DATES: Effective May 30, 2024.
FOR FURTHER INFORMATION CONTACT: For
information regarding DOE’s NEPA
regulations, contact Ms. Carrie
Abravanel, Deputy Director, Office of
NEPA Policy and Compliance, at
carrie.abravanel@hq.doe.gov or 202–
586–4798.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
DOE published a final rule in the
Federal Register on April 30, 2024,
revising NEPA implementing
procedures to add a categorical
exclusion for certain energy storage
systems and revise categorical
E:\FR\FM\23MYR1.SGM
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]]>Agencies
[Federal Register Volume 89, Number 101 (Thursday, May 23, 2024)]
[Rules and Regulations]
[Pages 45557-45563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11307]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 89, No. 101 / Thursday, May 23, 2024 / Rules
and Regulations
[[Page 45557]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 985
[Doc. No. AMS-SC-23-0068]
Marketing Order Regulating the Handling of Spearmint Oil Produced
in the Far West; Salable Quantities and Allotment Percentages for the
2024-2025 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule establishes salable quantities and allotment
percentages for Class 1 (Scotch) and Class 3 (Native) spearmint oil
produced in Washington, Idaho, Oregon, and parts of Nevada and Utah
(Far West) for the 2024-2025 marketing year. This rule also removes
references to past volume regulations no longer in effect.
DATES: Effective June 24, 2024.
FOR FURTHER INFORMATION CONTACT: Josh Wilde, Marketing Specialist, or
Barry Broadbent, Acting Chief, West Region Branch, 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) 720-8085, or Email:
[email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out a marketing order as defined in
7 CFR 900.2(j). This rule is issued under Marketing Order No. 985, as
amended (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
Far West Spearmint Oil Administrative Committee (Committee) locally
administers the Order and comprises spearmint oil producers operating
within the area of production, and a public member.
The Agricultural Marketing Service (AMS) is issuing this rulemaking
in conformance with Executive Orders 12866, 13563, and 14094. Executive
Orders 12866 and 13563 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). Executive Order 13563 emphasizes the
importance of quantifying both costs and benefits, reducing costs,
harmonizing rules, and promoting flexibility. Executive Order 14094
reaffirms, supplements, and updates Executive Order 12866 and further
directs agencies to solicit and consider input from a wide range of
affected and interested parties through a variety of means. This action
falls within a category of regulatory actions that the Office of
Management and Budget (OMB) exempted from Executive Order 12866 review.
This rulemaking has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires Federal agencies to consider whether their rulemaking actions
would have Tribal implications. AMS has determined that this 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 rulemaking has been reviewed under Executive Order 12988--
Civil Justice Reform. This rulemaking 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 rulemaking establishes salable
quantities and allotment percentages for Scotch and Native spearmint
oil for the 2024-2025 marketing year, which begins on June 1, 2024.
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 the U.S. Department
of Agriculture (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.
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 AMS 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 West spearmint oil are
satisfied and orderly marketing conditions are maintained.
Salable quantity represents 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. The allotment
percentage for each class of
[[Page 45558]]
spearmint oil is the salable quantity for that class of oil divided by
the total of all producers' allotment base for the same class of oil. A
producer's allotment base is their calculated share of the spearmint
oil market based on a statistical representation of past spearmint
production and sales. To account for changes in production and demand
over time, the Committee periodically reviews and adjusts each
producer's allotment base in accordance with a formula prescribed by
the Committee and approved by AMS. Each producer's annual allotment of
the salable quantity 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 total allotment base is
revised each year on June 1 to account for producer allotment 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 maintain orderly marketing conditions while also
ensuring that markets are adequately supplied. Further, 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 11, 2023, to consider its marketing
policy for the 2024-2025 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, with a vote of seven in favor and
none opposed, a salable quantity and allotment percentage for Scotch
spearmint oil of 663,648 pounds and 29 percent, respectively. In
addition, the Committee unanimously recommended a salable quantity and
allotment percentage for Native spearmint oil of 678,980 pounds and 26
percent, respectively.
This final action establishes the amount of Scotch and Native
spearmint oil that handlers may purchase from, or handle on behalf of,
producers during the 2024-2025 marketing year, which begins on June 1,
2024. Salable quantities and allotment percentages have been in effect
each season since the Order's inception in 1980.
Scotch Spearmint Oil
The Committee recommended a Scotch spearmint oil salable quantity
of 663,648 pounds and an allotment percentage of 29 percent for the
2024-2025 marketing year. The 2024-2025 marketing year salable quantity
of 663,648 pounds is 109,056 pounds less than the salable quantity of
772,704 pounds established for the 2023-2024 marketing year. The
recommended 29 percent allotment percentage for the 2024-2025 marketing
year is 5 percent less than the 34 percent in effect the previous
marketing year.
The total allotment base for the coming marketing year is estimated
to be 2,288,442 pounds. This figure represents a one-percent increase
over the revised 2023-2024 marketing year total allotment base of
2,265,784 pounds. The salable quantity (663,648 pounds) is the product
of total allotment base (2,288,442 pounds) times the allotment
percentage (approximately 28.99 percent, rounded to 29 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 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 483,617 pounds of Scotch spearmint production in 2023.
Industry reports indicate that trade demand for Far West Scotch
spearmint oil, which had been declining in recent years, has begun to
stabilize. Sales of Far West Scotch spearmint oil declined from a high
of 1,060,232 pounds during the 2014-2015 marketing year to a low of
488,484 pounds in the 2020-2021 marketing year. Sales of Far West
Scotch spearmint oil totaled 597,852 pounds during the 2022-2023
marketing year, the last full year of available data. The Committee
indicates that production of Scotch spearmint oil in competing markets,
most notably by Canadian producers, continues to exert downward
pressure on trade demand for Scotch spearmint oil from the Far West.
Given the anticipated market conditions for the coming year, the
Committee estimates that Scotch spearmint oil trade demand for the
2024-2025 marketing year will be 600,000 pounds, which is 35,000 pounds
lower than the prior year estimate and just below the 5-year moving
sales average of 614,157 pounds. Should the established volume
regulation levels prove insufficient to adequately supply the market,
the Committee has the authority to recommend intra-seasonal increases
of the salable quantity and allotment percentage, as it has in previous
marketing years.
The Committee calculated the minimum salable quantity of Scotch
spearmint oil that will be required during the 2024-2025 marketing year
(266,880 pounds) by subtracting the estimated salable carry-in on June
1, 2024, (333,120 pounds) from the estimated trade demand (600,000
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
will be fully supplied, the Committee recommended a 2024-2025 marketing
year salable quantity of 663,648 pounds. The recommended salable
quantity, combined with an estimated 333,120 pounds of salable carry-in
from the previous year, yields a total available supply of 996,768
pounds of Scotch spearmint oil for the 2024-2025 marketing year. With
the recommended salable quantity and current market environment, the
Committee estimates that as much as 396,768 pounds of salable Scotch
spearmint oil could be carried into the 2025-2026 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.
The Committee estimates that there will be 333,120 pounds of
salable carry-in of Scotch spearmint oil on June 1, 2024. If current
market conditions are maintained and the Committee's projections are
correct, salable carry-in will increase to 396,768 pounds at the
beginning of the 2025-2026 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 their annual allotment for the
2024-2025 marketing year. Further, the Committee estimates that as
[[Page 45559]]
much as 296,118 pounds of the 2023-2024 marketing year annual allotment
may not be filled by producers. While the Committee has not projected
unused base allotment for the upcoming 2024-2025 marketing year, it
anticipates that the actual quantity of Scotch spearmint oil carried
into the 2024-2025 marketing year will be much less than the quantity
calculated above (333,120 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 and is restricted from freely entering
the market. 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. The Order
does include provision for reserve oil to be released for limited
market development projects, with approval of the Secretary, but this
provision is rarely utilized.
Oil held in the reserve pool is another indicator of excess supply.
Scotch spearmint oil held in reserve was 26,062 pounds as of May 31,
2023, up from 23,667 pounds as of May 31, 2022. 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 29 percent for
the 2024-2025 marketing year for Scotch spearmint oil. During its
October 11, 2023, meeting, the Committee calculated an initial
allotment percentage by dividing the minimum required salable quantity
(266,880 pounds) by the total estimated allotment base (2,288,442
pounds), resulting in 11.7 percent. However, producers and handlers at
the meeting indicated that the computed percentage (11.7 percent) might
not adequately satisfy potential 2024-2025 marketing year 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 29
percent. The total estimated allotment base (2,288,442 pounds) for the
2024-2025 marketing year, multiplied by the recommended allotment
percentage (29 percent), yields 663,648 pounds, which is the
recommended salable quantity for the 2024-2025 marketing year.
The 2024-2025 marketing year computational data for the Committee's
recommendations is detailed below.
(A) Estimated carry-in of Scotch spearmint oil on June 1, 2024:
333,120 pounds. This figure is the difference between the 2023-2024
marketing year total available supply of 933,120 pounds and the revised
2023-2024 marketing year estimated trade demand of 600,000 pounds.
(B) Estimated trade demand of Scotch spearmint oil for the 2024-
2025 marketing year: 600,000 pounds. This figure was established at the
Committee meeting held on October 11, 2023.
(C) Minimum salable quantity of Scotch spearmint oil required from
the 2024-2025 marketing year production: 266,880 pounds. This figure is
the difference between the estimated 2024-2025 marketing year trade
demand (600,000 pounds) and the estimated carry-in on June 1, 2024
(333,120 pounds). This salable quantity represents the minimum amount
of Scotch spearmint oil that may be needed to satisfy estimated demand
for the coming year.
(D) Total estimated Scotch spearmint oil allotment base of for the
2024-2025 marketing year: 2,288,442 pounds. This figure represents a
one-percent increase over the 2023-2024 marketing year total actual
allotment base of 2,265,784 pounds, as prescribed by Sec. 985.53(d).
The one-percent increase equals 22,658 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
2024-2025 marketing year: 11.7 percent. This percentage is computed by
dividing the minimum required salable quantity (266,880) by the total
estimated allotment base (2,288,442 pounds).
(F) Recommended Scotch spearmint oil allotment percentage for the
2024-2025 marketing year: 29 percent. This is the Committee's
recommendation and is based on the computed allotment percentage (11.7
percent) and input from producers and handlers at the October 11, 2023,
meeting. The recommended 29 percent allotment percentage reflects the
Committee's belief that the computed percentage (11.7 percent) may not
adequately supply the anticipated 2024-2025 marketing year Scotch
spearmint oil market demand.
(G) Recommended Scotch spearmint oil salable quantity for the 2024-
2025 marketing year: 663,648 pounds. This figure is the product of the
recommended salable allotment percentage (29 percent) and the total
estimated allotment base (2,288,442 pounds) for the 2024-2025 marketing
year.
(H) Estimated total available supply of Scotch spearmint oil for
the 2024-2025 marketing year: 996,768 pounds. This figure is the sum of
the 2024-2025 marketing year recommended salable quantity (663,648
pounds) and the estimated carry-in on June 1, 2024 (333,120 pounds).
For the reasons stated above, the Committee believes that the
salable quantity and allotment percentage established herein will
adequately satisfy trade demand, will result in a reasonable carry-in
for the following year, and will contribute to the orderly marketing of
Scotch spearmint oil.
Native Spearmint Oil
The Committee recommended a Native spearmint oil salable quantity
of 678,980 pounds and an allotment percentage of 26 percent for the
2024-2025 marketing year. These figures are, respectively, 355,512
pounds and 14 percentage points lower than the levels established for
the 2023-2024 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 2023 Native spearmint oil production
will total 1,015,570 pounds, up from the previous year's production of
941,026 pounds. Committee records indicate that spearmint-producing
acres in the Far West declined from a recent high of 9,013 acres in
2019 to 6,078 acres of Native spearmint production in 2022, before
rebounding to an estimated 6,761 acres in 2023 on the strength of new
plantings.
Sales of Native spearmint oil have been trending downward since the
2017-2018 marketing year, falling from a recent high of 1,332,260
pounds during the 2020-2021 marketing year to 988,536 pounds for the
2021-2022 marketing year, representing a 10-year low. However, sales of
Native spearmint oil improved slightly to 1,044,835 pounds for the
2022-2023 marketing year, the last full year for which data is
available. The Committee expects demand to remain fairly stable,
estimating trade demand for Native spearmint oil at 1,000,000 pounds
for the 2024-2025 marketing year.
The Committee anticipates that 447,520 pounds of salable Native
spearmint oil from prior years will be carried into the 2024-2025
marketing year. This amount is up from the 308,440 pounds of salable
oil carried into the 2023-2024 marketing year and well above the level
that the Committee
[[Page 45560]]
generally considers favorable (150,000 pounds).
The Committee estimates that there will be 1,048,733 pounds of
Native spearmint oil in the reserve pool at the beginning of the 2024-
2025 marketing year. Native reserve pool oil has been fairly stable
over the past several marketing years. The reserve pool increased from
996,050 pounds at the start of the 2016-2017 marketing year to
1,219,122 pounds to start the 2021-2022 marketing year. However, the
pool was reduced to 1,055,135 pounds by the start of the 2022-2023
marketing year, in line with the 1,048,733 pounds of Native spearmint
oil that the Committee projects will be held in the reserve pool to
begin the 2024-2025 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. However, increases in domestic production of
Native spearmint from regions outside of the Far West production area
has created additional competition for market share. For example, there
were fewer than 2,000 acres of Native spearmint production in the U.S.
Midwest region in 2016, compared with over 10,000 acres of Native
spearmint oil production in the Far West. However, the Committee's 2023
estimates indicate that Far West acreage has declined to approximately
6,761 acres, compared to Native spearmint producing acreage of around
3,000 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.
Given the anticipated market conditions for the coming year, the
Committee estimated the 2024-2025 marketing year Native spearmint oil
trade demand to be 1,000,000 pounds. This figure is based on input
provided by producers at six production area meetings held in September
and October 2023, as well as estimates provided by handlers and other
meeting participants at the October 11, 2023, Committee meeting. This
figure represents a decrease of 150,000 pounds from the previous year's
estimated trade demand for the 2023-2024 marketing year. The average
estimated trade demand for Native spearmint oil derived from the
production area meetings was 1,020,833 pounds, whereas the handlers'
estimates ranged from 950,000 to 1,200,000 pounds. The quantity
marketed over the most recent full marketing year, 2022-2023, was
1,044,835 pounds.
The estimated June 1, 2024, carry-in of 447,520 pounds of Native
spearmint oil, plus the recommended 2024-2025 marketing year salable
quantity of 678,980 pounds, will result in an estimated total available
supply of 1,126,500 pounds of Native spearmint oil during the 2024-2025
marketing year. With the corresponding estimated trade demand of
1,000,000 pounds, the Committee projects that 126,500 pounds of salable
oil will be carried into the 2025-2026 marketing year. The Committee
estimates that there will be 1,048,733 pounds of Native spearmint oil
held in the reserve pool at the beginning of the 2024-2025 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 in the salable quantity and
allotment percentage to satisfy that demand.
The Committee recommended a Native spearmint oil allotment
percentage of 26 percent for the 2024-2025 marketing year. During its
October 11, 2023, meeting, the Committee calculated an initial
allotment percentage of 21.2 percent by dividing the minimum required
salable quantity to satisfy estimated trade demand (552,480 pounds) by
the total allotment base (2,611,463 pounds). However, producers and
handlers at the meeting expressed concern that the computed percentage
of 21.2 percent may not adequately supply the potential 2024-2025
marketing year Native spearmint oil market demand. Further, it could
result in a less than adequate carry-in for the subsequent marketing
year. After deliberation, the Committee increased its allotment
percentage recommendation to 26 percent. The total estimated Native
spearmint oil allotment base (2,611,463 pounds) multiplied by the
recommended salable allotment percentage (26 percent) yields 678,980
pounds, the recommended Native spearmint oil salable quantity for the
2024-2025 marketing year.
The 2024-2025 marketing year computational data for the Committee's
recommendation is further outlined below.
(A) Estimated carry-in of Native spearmint oil on June 1, 2024:
447,520 pounds. This figure is the difference between the estimated
2023-2024 marketing year total available supply of 1,447,520 pounds and
the revised 2023-2024 marketing year estimated trade demand of
1,000,000 pounds.
(B) Estimated trade demand of Native spearmint oil for the 2024-
2025 marketing year: 1,000,000 pounds. This estimate was established by
the Committee at its October 11, 2023, meeting.
(C) Minimum salable quantity of Native spearmint oil required from
the 2024-2025 marketing year production: 552,480 pounds. This figure is
the difference between the 2024-2025 marketing year estimated trade
demand (1,000,000 pounds) and the estimated carry-in on June 1, 2024
(447,520 pounds). This is the minimum amount of Native spearmint oil
that the Committee believes may be required to meet the anticipated
2024-2025 marketing year trade demand.
(D) Total estimated allotment base of Native spearmint oil for the
2024-2025 marketing year: 2,611,463 pounds. This figure represents a
one-percent increase over the 2023-2024 marketing year actual total
allotment base of 2,585,607 pounds as prescribed in Sec. 985.53(d).
The one-percent increase equals 25,856 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
2024-2025 marketing year: 21.2 percent. This percentage is calculated
by dividing the required minimum salable quantity (552,480 pounds) by
the total estimated allotment base (2,611,463 pounds) for the 2024-2025
marketing year.
(F) Recommended Native spearmint oil allotment percentage for the
2024-2025 marketing year: 26 percent. This is the Committee's
recommendation based on the computed allotment percentage (21.2
percent) and input from producers and handlers at the October 11, 2023,
meeting. The recommended 26 percent allotment percentage is also based
on the Committee's belief that the computed percentage (21.2 percent)
may not adequately supply the potential market for Native spearmint oil
in the 2024-2025 marketing year or allow for sufficient salable Native
spearmint oil to be carried into the beginning of the 2024-2025
marketing year.
(G) Recommended Native spearmint oil 2024-2025 marketing year
salable quantity: 678,980 pounds. This figure is the product of the
recommended allotment percentage (26 percent) and the total estimated
allotment base (2,611,463 pounds).
(H) Estimated available supply of Native spearmint oil for the
2024-2025 marketing year: 1,126,500 pounds. This figure is the sum of
the 2024-2025 marketing year recommended salable quantity (678,980
pounds) and the estimated carry-in on June 1, 2024 (447,520 pounds).
This amount could be increased, as needed, through an intra-seasonal
increase in the salable quantity and allotment percentage.
[[Page 45561]]
The Scotch and Native spearmint oil salable quantities and
allotment percentages of 663,648 pounds and 29 percent, and 678,980
pounds and 26 percent, respectively, are expected to 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 rulemaking is similar to regulations issued in prior seasons.
The salable quantities in this rulemaking 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. Each producer controls the disposition of their
respective reserve pool spearmint oil, in accordance with market needs
and the Order's volume regulation provisions, and under the Committee's
oversight.
AMS has reviewed the Committee's marketing policy statement for the
2024-2025 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 salable quantities and allotment
percentages in this rule are expected to 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 rulemaking also provides producers with
information regarding the amount of spearmint oil that should be
produced for the 2024-2025 and subsequent marketing years to meet
anticipated market demand.
Final 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 rulemaking on small entities. Accordingly, AMS has prepared this
final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf.
There are approximately 39 producers of Scotch spearmint oil and 92
producers of Native spearmint oil operating within the regulated
production area. In addition, there are approximately 7 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 equal
to or less than $34.0 million (Postharvest Crop Activities, NAICS code
115114). Small agricultural producers of spearmint oil are defined as
those having annual receipts of equal to or less than $2.5 million (All
Other Miscellaneous Crop Farming, NAICS code 111998) (13 CFR part 121).
The Committee reported that recent producer prices for spearmint
oil have ranged from $18.00 to $22.00 per pound. The National
Agricultural Statistics Service (NASS) reported that the 2022 U.S.
season average spearmint oil producer price per pound was $20.40.
Spearmint oil utilization for the 2022-2023 marketing year, as reported
by the Committee, was 597,852 pounds and 1,044,835 pounds for Scotch
and Native spearmint oil, respectively, for a total of 1,642,687
pounds. Multiplying $20.40 per pound by 2022-2023 marketing year
spearmint oil utilization of 1,642,687 pounds yields a crop value
estimate of about $33.5 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 $20.40 average
spearmint oil price and Committee production data for each producer,
the Committee estimates that 38 of the 39 Scotch spearmint oil
producers and all of the 92 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 2022 producer price ($20.40) is $4.08, which
results in a handler Free on Board (f.o.b.) price per pound estimate of
$24.48 ($20.40 + $4.08).
Multiplying this estimated handler f.o.b. price by the 2022-2023
marketing year total spearmint oil utilization of 1,642,687 pounds
results in an estimated handler-level spearmint oil value of $40.2
million. Dividing this figure by the number of handlers (7) yields
estimated average annual handler receipts of about $5.7 million, which
is well below the $34.0 million SBA threshold for small agricultural
service firms.
Furthermore, using confidential data compiled by the Committee on
the pounds of spearmint oil handled by each handler and the
abovementioned estimated handler price per pound, the Committee
reported that it is not likely that any of the seven handlers had 2022-
2023 marketing year spearmint oil sales that exceeded SBA's 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 rulemaking establishes 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 2024-2025 marketing year. The
Committee recommended this 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 from or handled on behalf of producers
during the marketing year through volume regulation allows producers to
coordinate their spearmint oil production with the expected market
demand. Authority for this action is provided in Sec. Sec. 985.50,
985.51, and 985.52 of the Order.
The Committee estimates the total trade demand for the 2024-2025
marketing year for both classes of oil at 1,600,000 pounds. In
addition, the Committee expects that the combined salable carry-in for
both classes of spearmint oil will be 780,640 pounds. As such, the
combined required salable quantity for the 2024-2025 marketing year is
estimated to be 819,360 pounds (1,600,000 pounds trade demand less
780,640 pounds carry-in). Under volume regulation, total sales of
spearmint oil by producers for the 2024-2025 marketing year will be
held
[[Page 45562]]
to 2,123,268 pounds (the recommended salable quantity for both classes
of spearmint oil of 1,342,628 pounds plus 780,640 of carry-in).
This total available supply of 2,123,268 pounds should be more than
adequate to supply the 1,600,000 pounds of anticipated total trade
demand for spearmint oil. In addition, as of May 31, 2023, the total
reserve pool for both classes of spearmint oil stood at 1,081,197
pounds. That quantity is expected to remain relatively unchanged over
the course of the 2023-2024 marketing year, with current Committee
reserve pool estimates totaling 1,082,744 pounds. Should trade demand
increase unexpectedly during the 2024-2025 marketing year, reserve pool
spearmint oil could be released into the market to supply that increase
in demand.
The recommended allotment percentages, upon which 2024-2025
marketing year annual producer allotments are based, are 29 percent for
Scotch spearmint oil and 26 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 AMS econometric model used to evaluate the Far West spearmint
oil market estimated that the season average producer price per pound
(for both classes of spearmint oil) would decline about $1.55 per pound
without volume regulation. The surplus situation for the spearmint oil
market that would exist without volume regulation in the 2024-2025
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 1980-2022 (the years in
which the Order has been in effect, and for which NASS data is
available), 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 will 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 are
more likely to 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 reduce the allotment percentage and salable
quantity for both Scotch spearmint oil and Native spearmint oil from
the levels established for the 2023-2024 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 established in this rule will
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 established herein are expected to facilitate
the goal of maintaining orderly marketing conditions for Far West
spearmint oil for the 2024-2025 and future marketing years.
This rulemaking establishes the salable quantities and allotment
percentages for Scotch and Native spearmint oil produced in the Far
West during the 2024-2025 marketing year. Costs to producers and
handlers, large and small, resulting from this action 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 in those requirements are necessary as
a result of this rulemaking. Should any changes become necessary, they
would be submitted to OMB for approval.
This rulemaking does not impose any additional reporting or
recordkeeping requirements on either small or large Far West spearmint
oil handlers. As with all Federal marketing order programs, reports and
forms are periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
AMS is committed to complying with the E-Government Act, to promote
the use of the internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
AMS has not identified any relevant Federal rules that duplicate,
overlap, or conflict with this rulemaking.
A proposed rule concerning this action was published in the Federal
Register on January 25, 2024 (89 FR 4835). Copies of the proposed rule
were also mailed or sent via email to all Far West spearmint oil
handlers. The proposal was made available through the internet by USDA
and the Office of the Federal Register. A 30-day comment period ending
February 26, 2024, was provided for interested persons to respond to
the proposal. No comments were received during the comment period.
Accordingly, no changes have been made to the rule as proposed.
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 guide should be sent to Richard Lower at
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
[[Page 45563]]
After consideration of all relevant material presented, including
the information and recommendations submitted by the Committee and
other available information, AMS has determined that this rule tends to
effectuate the declared policy of the Act.
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 Service amends 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 part 985 continues to read as follows:
Authority: 7 U.S.C. 601-674.
0
2. Revise Sec. 985.233 to read as follows:
Sec. 985.233 Salable quantities and allotment percentages--2023-2024
marketing year.
The salable quantity and allotment percentage for each class of
spearmint oil during the marketing year beginning on June 1, 2023,
shall be as follows:
(a) Class 1 (Scotch) oil--a salable quantity of 772,704 pounds and
an allotment percentage of 34 percent.
(b) Class 3 (Native) oil--a salable quantity of 1,034,492 pounds
and an allotment percentage of 40 percent.
0
3. Revise Sec. 985.234 to read as follows:
Sec. 985.234 Salable quantities and allotment percentages--2024-2025
marketing year.
The salable quantity and allotment percentage for each class of
spearmint oil during the marketing year beginning on June 1, 2024,
shall be as follows:
(a) Class 1 (Scotch) oil--a salable quantity of 663,648 pounds and
an allotment percentage of 29 percent.
(b) Class 3 (Native) oil--a salable quantity of 678,980 pounds and
an allotment percentage of 26 percent.
Sec. Sec. 985.235 through 985.238 [Removed]
0
4. Remove Sec. Sec. 985.235 through 985.238.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2024-11307 Filed 5-22-24; 8:45 am]
BILLING CODE P
