[Federal Register Volume 73, Number 96 (Friday, May 16, 2008)]
[Rules and Regulations]
[Pages 28606-28662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-10185]
[[Page 28605]]
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Part III
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 59
Livestock Mandatory Reporting; Reestablishment and Revision of the
Reporting Regulation for Swine, Cattle, Lamb, and Boxed Beef; Final
Rule
Federal Register / Vol. 73 , No. 96 / Friday, May 16, 2008 / Rules
and Regulations
[[Page 28606]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 59
[Docket No. AMS-LS-07-0106]
RIN 0581-AC67
Livestock Mandatory Reporting; Reestablishment and Revision of
the Reporting Regulation for Swine, Cattle, Lamb, and Boxed Beef
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: On April 2, 2001, the Agricultural Marketing Service (AMS)
implemented the Livestock Mandatory Reporting (LMR) program as required
by the Livestock Mandatory Reporting Act of 1999 (1999 Act). The
statutory authority for the program lapsed on September 30, 2005. In
October 2006, legislation was enacted to reauthorize the 1999 Act until
September 30, 2010, and to amend the swine reporting requirements of
the 1999 Act (Pub. L. 109-296) (Reauthorization Act). This final rule
will re-establish the regulatory authority for the program's continued
operation and incorporate the swine reporting changes contained within
the Reauthorization Act as well as make other changes to enhance the
program's overall effectiveness and efficiency based on AMS' experience
in the administration of the program over the last 6 years.
DATES: Effective Date: This final rule is effective July 15, 2008.
FOR FURTHER INFORMATION CONTACT: Warren P. Preston, Chief, Livestock
and Grain Market News Branch at (202) 720-6231, fax (202) 690-3732, or
e-mail [email protected].
Information about these regulations will be posted on the Livestock
and Grain Market News Web site: http://www.ams.usda.gov/lsmnpubs/.
SUPPLEMENTARY INFORMATION:
Background
The 1999 Act was enacted into law on October 22, 1999 (Pub. L. 106-
78), as an amendment to the Agriculture Marketing Act of 1946 (7 U.S.C.
1621 et seq.). In the December 1, 2000, Federal Register, AMS published
a final rule implementing the program (65 FR 75464) (2000 final rule)
with an effective date of January 30, 2001. This effective date was
subsequently delayed until April 2, 2001.
The statutory authority for the program lapsed on September 30,
2005. In October 2006, legislation was passed to reauthorize the 1999
Act until September 30, 2010, and amend swine reporting requirements.
Because reauthorization was not completed by September 30, 2005,
AMS sent letters to each packer required to report under the 1999 Act
requesting their voluntary cooperation in continuing to submit
information. Based on the response to AMS' request for voluntary packer
participation in LMR, most reports have continued to be published. The
only reports that are not being published are imported boxed lamb cuts
and slaughter cow reports. AMS has continued compliance audits during
the lapse in authority for the mandatory program for companies that
agreed to continue submitting information and will continue this
practice.
The 1999 Act as originally passed provided for the mandatory
reporting of market information by Federally inspected livestock
processing plants that have slaughtered an average number of livestock
during the immediately preceding 5 calendar years (125,000 for cattle
and 100,000 for swine), including any processing plant that did not
slaughter during the immediately preceding 5 calendar years if the
Secretary determines that the plant should be considered a packer based
on the plant's capacity. For entities that did not slaughter during the
immediately preceding 5 calendar years, such as a new plant or existing
plant that begins operations, AMS projects the plant's annual slaughter
or production based upon the plant's estimate of annual slaughter
capacity to determine which entities meet the definition of a packer as
defined in this regulation.
The 1999 Act also gave the Secretary of Agriculture (Secretary) the
latitude to provide for the reporting of lamb information. Under the
2000 final rule implementing the program, Federally inspected lamb
processing plants that slaughtered an average of 75,000 head of lambs
or processed an average of 75,000 lamb carcasses during the immediately
preceding 5 calendar years were required to submit information to AMS.
Additionally, a lamb processing plant that did not slaughter an average
of 75,000 lambs or process an average of 75,000 lamb carcasses during
the immediately preceding 5 calendar years was required to report
information if the Secretary determined the processing plant should be
considered a packer based on its capacity. In addition, the final rule
also established that for any calendar year, an importer of lamb that
imported an average of 5,000 metric tons of lamb meat products per year
during the immediately preceding 5 calendar years report information on
the domestic sales of imported boxed lamb cuts. Additionally, an
importer that did not import an average of 5,000 metric tons of lamb
meat products during the immediately preceding 5 calendar years was
required to report information if the Secretary determined that the
person should be considered an importer based on their volume of lamb
imports. On September 2, 2004, AMS published a final rule (69 FR
53783)(2004 final rule) that revised the threshold for importers to
2,500 metric tons and modified the definition of carlot when used in
reference to boxed lamb cuts.
Key Components of the Statute
Cattle
The Reauthorization Act did not modify the cattle reporting
requirements contained in the 1999 Act. The 1999 Act requires that a
cattle packer whose Federally inspected plant slaughtered an average of
at least 125,000 cattle per year for the preceding 5 calendar years or
did not slaughter cattle during the preceding 5 calendar years but is
considered a packer based on plant capacity as determined by the
Secretary, report market information to the Secretary. They are
required to report the prices for each type of cattle purchase,
categorized to clearly delineate imported from domestic market
purchases, negotiated purchase, formula marketing arrangement, and
forward contract; the quantity of cattle, categorized to clearly
delineate imported from domestic market purchases, purchased on a live
weight basis and a carcass basis; and the weight, the quality grade,
and premiums and discounts. This information will be reported twice a
day not later than 10 a.m. and 2 p.m. central time. The Secretary will
issue reports to the public of this information at least three times
each day.
The 1999 Act further requires that a packer report marketing
information not later than 9 a.m. central time on the first reporting
day of each week for cattle bought by the type of purchase for the
prior week. In addition, the 1999 Act states that packers must report
weekly information on the first reporting day not later than 9 a.m.
central time for cattle purchased on a formula or contract marketing
arrangement and slaughtered the prior week. However, under this
regulation, the required information for the weekly submission for
cattle purchased on a formula will be obtained by aggregating packers'
daily submissions of this information. Therefore, no additional weekly
submission will be required for this
[[Page 28607]]
purchase type. The Secretary will issue a public report not later than
10 a.m. central time on the first reporting day of the current
slaughter week.
The 1999 Act also mandates that a packer report information on
boxed beef cut sales to the Secretary at least twice each reporting day
not less frequently than once before and once after 12 noon central
time. This information includes the price per hundredweight, the
quantity in each lot of boxed beef cuts sold, information regarding the
characteristics of each lot (i.e., domestic vs. export sale, USDA
Quality Grade, etc.), the type of beef cut and the trim specification.
The Secretary will report this information to the public twice each
reporting day.
Swine
The Reauthorization Act revised the requirements for swine
reporting. Under the 1999 Act, the term packer includes a Federally
inspected plant that slaughtered an average of at least 100,000 swine
per year during the immediately preceding 5 calendar years. Under the
Reauthorization Act, the term packer also includes a person that
slaughtered an average of at least 200,000 sows, boars, or combination
thereof per year during the immediately preceding 5 calendar years.
Additionally, in the case of a swine processing plant or person that
did not slaughter swine during the immediately preceding 5 calendar
years, it shall be considered a packer if the Secretary determines the
processing plant or person should be considered a packer under this
subpart after considering its capacity.
The Reauthorization Act separated the reporting requirements for
sows and boars from barrows and gilts. For barrows and gilts, the
packer must report to the Secretary not later than 7 a.m. central time
on each reporting day information regarding all swine purchased or
priced, during the prior business day of the packer. The
Reauthorization Act modified the reporting time for information
regarding all barrows and gilts slaughtered during the prior business
day from not later than 7 a.m. central time to not later than 9 a.m.
central time on each reporting day. The packer must report all purchase
data including the number of barrows and gilts purchased, barrows and
gilts scheduled for delivery and the base price and purchase data for
slaughtered barrows and gilts for which a price has been established.
The information also includes all slaughter data for the total number
of barrows and gilts slaughtered including information concerning the
net price, average net price, lowest net price, highest net price,
average carcass weight, average sort loss, average backfat, average
lean percentage, and total slaughter quantity. However, the information
on the lowest net price and highest net price can be obtained from the
LMR system from packers' submissions. Therefore, under this rule, there
is no requirement for packers to submit this information separately.
Packers reporting the average lean percentage must report the manner in
which the average lean percentage is calculated as well as whenever a
change in such calculation is made. In doing so, the packer shall make
available to the Secretary the underlying data, applicable methodology
and formulae, and supporting materials used to determine the average
lean percentage, which the Secretary will convert to the carcass
measurements or lean percentage of the swine of the individual packer
to correlate to a common percent lean measurement. Additionally, the
information to be reported includes packer purchase commitments, which
shall be equal to the number of barrows and gilts scheduled for
delivery to a packer for slaughter each of the next 14 calendar days.
The Secretary will publish the information in a prior day report
not later than 8 a.m. central time for all swine purchased and 10 a.m.
central time for all barrows and gilts slaughtered on the reporting day
on which the information is received from the packer. In addition, as
required by the Reauthorization Act, the Secretary shall publish a net
price distribution for all barrows and gilts slaughtered on the
previous day not later than 3 p.m. central time.
The Reauthorization Act also requires packers that process barrows
and gilts to report to the Secretary in the morning not later than 10
a.m. central time and in the afternoon not later than 2 p.m. central
time each reporting day. The reporting requirements for the morning and
afternoon reports contained in the Reauthorization Act for barrows and
gilts were not altered from those contained in the 1999 Act. The
information to be reported is the same for the morning and afternoon
reports and includes an estimate of (1) the total number of barrows and
gilts purchased by each method of pricing, (2) the total number of
barrows and gilts purchased, and (3) the base price paid for all
negotiated purchases of market hogs and the base price paid for each
type of purchase of market hogs other than through a negotiated
purchase. This information must be submitted for all covered
transactions made up to within one half hour of each specified
reporting time. Packers completing transactions during the one half
hour prior to the previous reporting time will report those
transactions at the next prescribed reporting time. The Secretary will
make the morning report available to the public not later than 11 a.m.
central time and the afternoon report at 3 p.m. central time on each
reporting day.
The Reauthorization Act requires each packer of sows and boars to
report to the Secretary not later than 9:30 a.m. central time, or such
other time as the Secretary considers appropriate, on each reporting
day, information regarding all sows and boars purchased or priced
during the prior business day of the packer. The information to be
reported includes the total number of sows and boars purchased, each
divided into at least three weight classes specified by the Secretary,
the number of sows and boars that qualify as packer-owned swine, the
average price paid for all sows and boars, the average price paid for
sows and boars in each weight class, the number of sows and boars for
which prices are determined, by each type of purchase, and the average
prices for sows and boars for which prices are determined, by each type
of purchase. The Secretary will publish the information in a prior day
report not later than 11 a.m. central time on the reporting day on
which the information is received from the packer. Under the 1999 Act,
the reporting requirements for sows and boars were the same as the
reporting requirements for barrows and gilts.
The Secretary will compile and issue a weekly noncarcass merit
premium report on the first reporting day of the week not later than 5
p.m. central time. This report will be prepared from information
furnished to the Secretary by packers who must report not later than 4
p.m. central time on the first reporting day of the week. The
information required includes noncarcass merit premiums used and paid
to producers during the prior slaughter week by category.
The 1999 Act provides that the Secretary review the information
required to be reported by packers at least once very two years. Also,
the 1999 Act directs the Secretary to promulgate regulations that
specify additional information to be reported by packers if the
Secretary determines information currently reported does not accurately
reflect the methods by which swine are valued or priced, or account for
the fact that packers that slaughter a significant majority of the
swine produced in the United States no longer use backfat or
[[Page 28608]]
lean percentage factors as indicators of price.
Lamb
The Reauthorization Act did not change the lamb reporting
provisions contained in the 1999 Act. The 1999 Act gives the Secretary
the authority to establish a mandatory lamb price reporting program
that will provide timely, accurate, and reliable market information. It
does not specify the requirements for establishing a mandatory lamb
price reporting program as it does for cattle and swine. Accordingly,
in the 2000 final rule, AMS established a mandatory lamb price
reporting program based upon its extensive knowledge of the lamb
industry and market news reporting of lamb.
Under the established program, a lamb packer whose Federally
inspected plant slaughtered or processed an average of at least the
equivalent of 75,000 lambs each year for the preceding 5 calendar years
reports to the Secretary once daily the price of each type of lamb
purchase, negotiated purchase, formula marketing arrangements, forward
contract, quantity of lamb purchased on live weight or carcass weight,
a range and average estimated live weights, quality grade, premiums and
discounts, class type, pelt type, state of origin, and estimated
dressing percentage. The Secretary issues a report to the public on
this information not less than once each day.
Lamb packers are required to report to the Secretary on a weekly
basis on the second reporting day of the week information from the
prior week. This information includes the quantity and certain carcass
characteristics of lambs purchased through a formula marketing
arrangement or forward contract that were slaughtered, and the quantity
and carcass characteristics of packer owned lamb that were slaughtered.
Reported information includes, by type of purchase, the quantity of
lamb purchased on live weight and carcass weight basis that were
slaughtered, the quality grade, premiums and discounts paid, and
dressing percentage. In addition, a lamb packer is required to report
the quantity and basis level for forward contracts, the range and
average of intended premiums and discounts, and the expected slaughter
date. Under this rule, packers will also be required to report
information on the quantity of lambs purchased on a negotiated basis.
The Secretary makes available to the public the information on the
second reporting day of the current slaughter week.
Packers report information on daily sales of carcass lamb and sales
of boxed lamb cuts each reporting day. Under this rule, packers will
also be required to report carcass purchases. Due to the changing
structure of the lamb industry, an increasing number of transactions
are not required to be reported under the existing regulation.
Requiring packers to also report their carcass purchases will greatly
increase the volume of covered transactions.
For sales and purchases of carcass lamb, the information includes
prices for each lot, the type of sale, the quantity of each sale quoted
in number of carcasses, the USDA grade, the estimated weight range, and
delivery date. For sales of boxed lamb cuts, the packer reports the
price for each lot, the quantity for each lot quoted by product weight,
the type of sale, branded product characteristics, if applicable, the
USDA quality and yield grade, the cut of lamb, the product state of
refrigeration, the weight range of each cut, and the delivery period.
The Secretary issues to the public a report on carcass lamb sales and
boxed lamb cut sales once each reporting day.
For any calendar year, a lamb importer who imports an average of
2,500 metric tons of lamb meat products per year during the immediately
preceding 5 calendar years reports to the Secretary weekly the prices
received for imported lamb cuts sold on the domestic market.
Additionally, an importer that does not import an average of 2,500
metric tons of lamb meat products during the immediately preceding 5
calendar years is also required to report the above information, if the
Secretary determines that the person should be considered an importer
based on their volume of lamb imports.
Other Provisions of the Act Involving Administration
The administrative provisions of the 1999 Act set forth the
requirements for maintaining confidentiality regarding the packer
reporting of proprietary information and list the conditions under
which Federal employees can release such information. These
administrative provisions also establish that the Secretary can make
necessary adjustments in the information reported by packers and take
action to verify the information reported, and directs the Secretary to
report and publish reports by electronic means to the maximum extent
practical.
The 1999 Act enumerates unlawful acts and provides for what
constitutes violations of that Act. To be unlawful and a violation, a
packer or other subject person must willfully engage in a prohibited
practice. Prohibited acts include failing to report the required
information timely; failing to report accurate information; soliciting
that any person fail to provide the required information accurately or
timely, as a condition of any transaction; failing or refusing to
comply with the requirements; or reporting estimated information in a
manner that demonstrates a pattern of significant variance when
compared to the actual information that is reported for the same
period. The Reauthorization Act did not change any of these provisions.
The section on enforcement establishes a civil penalty--not more
than $10,000--that may be assessed for each violation and provides that
the Secretary may issue a cease and desist order in addition to, or in
lieu of, a civil penalty. Each day that a violation continues shall be
considered to be a separate violation. Factors to be considered in
determining the amount of a civil penalty are the gravity of the
offense, the size of the business involved, and the effect of the
penalty on the ability of the involved person to remain in business. In
determining whether to assess a civil penalty, the Secretary shall
consider whether the person engaged in a pattern of errors, delays, or
omissions that were in violation.
The section on enforcement also provides that no civil penalty
shall be assessed, or cease and desist order issued, unless the person
involved is given notice and opportunity for a hearing before the
Secretary with respect to the violation. This section also spells out
requirements for judicial review, details procedures for issuance of an
injunction or restraining order, and establishes a civil penalty of not
more than $10,000 for each offense for failure to obey a cease and
desist order.
The fees section directs the Secretary to not charge or assess fees
for the submission, reporting, receipt, availability, or access to
published reports or information collected through this program.
The section on recordkeeping requires each packer to make available
to the Secretary on request for 2 years the original contracts,
agreements, receipts, and other records associated with any transaction
relating to the purchase, sale, pricing, transportation, delivery,
weighing, slaughter, or carcass characteristics of all livestock and
livestock products, as well as such records or other information that
is necessary or appropriate to verify the accuracy of information
required to be reported. Also, the 1999 Act provides
[[Page 28609]]
that reporting entities will not be required to report new or
additional information that they do not generally have available or
maintain, or the provisions of which would be unduly burdensome.
Further, the 1999 Act provides that the Secretary may suspend any
requirement if the Secretary determines that the application of the
requirement would be inconsistent with the Act.
Requirements
Summary of Changes
The requirements of this regulation are discussed in detail in the
sections immediately following. However, for the ease of the reader,
this section contains descriptions and rationale of the substantive
changes that have been made as compared to the December 1, 2000, and
September 2, 2004 (that modified reporting requirements for lamb),
final rules and the August 8, 2007, proposed rule that were published
in the Federal Register.
Recordkeeping
To reduce the recordkeeping burden on lamb importers, the Agency
modifies the recordkeeping requirement to allow lamb importers to
maintain a record of sale that evidences only the date the sale
occurred rather than the time and date. Because lamb importers are
required to report only weekly, the date the sale occurred is
sufficient for recordkeeping purposes.
Definitions
The Agency modifies the definition of the term ``discount'' by
adding ``or other characteristic'' to allow for the inclusion of other
types of discounts such as a discount for an animal's age, which is
currently utilized by several reporting packers.
In the proposed rule published in the August 8, 2007 Federal
Register, the Agency proposed to modify the definitions of the terms
``negotiated purchased'' and ``negotiated sale'' by removing the
language ``and agreement on a delivery day.'' As discussed in the
comments and responses section, the language is reinserted into the
respective definitions.
The Agency adds a definition for the term ``negotiated grid
purchase.'' When the LMR program was first implemented on April 2,
2001, negotiated grid purchases, purchases in which the base price is
determined by seller-buyer interaction from which premiums are added
and discounts are subtracted, were coded in packer submissions as
formulas as the system was not initially configured to allow these two
distinct transaction types to be coded separately. The Agency
subsequently made a programming change to rectify this problem and adds
this definition for clarity.
The Agency adds a definition for the term ``percent lean'' for
clarification with respect to cow and bull reporting requirements. The
Agency also added a definition for the term ``person'' for clarity.
Cattle Reporting
The majority of the changes being made with respect to cattle
reporting relate to the separation of the reporting requirements for
cows and bulls. Separation of the reporting requirements for cows and
bulls is made to minimize the reporting burden on cow and bull packers
where possible and to make the information published for cows and bulls
and the resulting meat products more meaningful to the industry.
The Agency modifies the definition of the term ``boxed beef'' to
remove references to age limitations on products and to require packers
to report transactions for frozen primals, subprimals, and cuts in
addition to the current requirement for packers to submit information
on frozen beef trimmings and boneless processing beef. Neither the 1999
Act nor the Reauthorization Act defines the term ``boxed beef.'' Hence
the term must be defined by regulation. These modifications to the
definition will provide for more complete reporting of the boxed beef
trade, consistent with the law's purpose of improving the price and
supply reporting conditions of USDA. Although the revised definition of
``boxed beef'' potentially will result in the reporting of more
transactions by packers to AMS, the Agency believes that there will be
little to practically no increase in the reporting burden to packers.
The cost to packers of reporting all trades versus sorting out trades
beyond certain parameters is minimal, and in many cases, may even be
less burdensome than sorting out transactions prior to submission to
AMS.
In the 2000 final rule, the definition of ``boxed beef'' specified
that the product not exceed one of three different dates from
manufacture, depending on the specific item in question. For example,
primals, subprimals, and cuts fabricated from subprimals were not to be
older than 14 days from the date of manufacture, while fresh ground
beef, beef trimmings, and boneless processing beef were not to be older
than 7 days from the date of manufacture. By removing references to
these different cutoff dates, there will be less confusion in terms of
what information reporting packers are required to submit, and hence,
less uncertainty regarding the information that is subsequently
reported and disseminated by AMS. In addition, new technologies in
packaging and processing continue to extend the shelf life of meat
products, and product that may have been considered aged or distressed
at the time of the 2000 final rule may now be well within its usable
shelf life. Removing references to product age in the definition of
``boxed beef'' will reflect such changes in the state of the industry.
As discussed in the comments and responses section, however, the
reporting form for boxed beef is modified from the proposed rule by
delineating between fresh product that is 14 days or less from that
which is more than 14 days from the date of manufacture.
The 2000 final rule defined ``boxed beef'' to include fresh
primals, subprimals, cuts fabricated from subprimals, ground beef, beef
trimmings, and boneless processing beef. The definition also included
frozen beef trimmings and boneless processing beef. By removing the
references to fresh or frozen product, the final rule reduces confusion
on the part of reporting packers regarding whether or not to submit
information on particular trades. AMS believes that this modification
of the definition of ``boxed beef'' will result in minimal to virtually
no increase in burden to reporting packers. In the case of frozen
products, numerous reporting packers already submit information on all
frozen products. Due to the nature of their electronic systems, it is
in many cases often less burdensome for packers to submit everything
rather than having to sort through eligible transactions. AMS believes
that reporting of trade in frozen products will provide a more accurate
and comprehensive picture of the market for boxed beef, consistent with
the purposes of the 1999 Act to improve the price and supply reporting
services of USDA. For instance, trading of frozen product picked up
with the reopening of foreign markets following the closures that
resulted from the discovery of a cow with bovine spongiform
encephalopathy in the United States in December 2003. Because a
majority of packers are reporting frozen boxed beef trades, AMS has
been able to show the number of frozen export loads in its
comprehensive boxed beef cutout report. Requiring all packers to submit
information on frozen product trades will ensure that such reporting
will
[[Page 28610]]
represent a more complete reflection of market conditions.
The Agency modifies the definition of the term ``carlot-based''
such that for cow and bull boxed beef items, the term ``carlot-based''
includes any transaction between a buyer and seller consisting of 2,000
pounds or more of one or more individual items. As discussed in the
comments and responses, the 2,000 pound threshold is a reduction from
the 5,000 pound threshold provided for in the proposed rule. This
modification reflects current industry practice with respect to the
marketing of cow and bull products.
The Agency modifies the definition of the term ``terms of trade''
to clarify that the requirement to report the terms of trade applies
only to steers and heifers to coincide with the separation of reporting
requirements for cows and bulls from steers and heifers. The definition
of ``terms of trade'' is also modified to require packers to
distinguish between negotiated transactions that are scheduled for
delivery not later than 14 days and those negotiated transactions that
are scheduled for delivery more than 14 days, but fewer than 30 days.
Currently, transactions that are for delivery more than 14 days out are
to be coded as forward contracts. This modification does not require
packers to submit additional transactions, but does allow AMS to
identify separately these types of transactions, which is a concern of
some in the industry.
The Agency modifies the definition of the term ``type of purchase''
to include ``negotiated grid purchase'' as a type of purchase.
The Agency adds a definition for the term ``white cow'' to provide
clarity to the cow and bull reporting requirements.
Compared to the 2000 final rule, the Agency modifies and renumbers
the sections that relate to the daily and weekly reporting requirements
for live cattle. Section 59.101 and section 59.103 contain the daily
and weekly reporting requirements for steers and heifers. Section
59.102 contains the daily reporting requirements for cows and bulls.
With regard to section 59.101, packers no longer are required to
report the range of weights of cattle purchased. In addition, the
phrase ``or other characteristics'' is added to the premium and
discount reporting requirement to allow for the reporting of other
kinds of premiums and discounts such as those associated with an
animal's age.
Section 59.102 contains the reporting requirements for cow and bull
purchases. In an effort to reduce the reporting burden on cow and bull
packers, only the information that pertains to the way cows and bulls
are marketed is required to be reported. For example, cow and bull
packers no longer have to report committed and delivered information.
In addition, there no longer is a weekly reporting requirement for cows
and bulls.
With regard to section 59.103, packers are required to report the
quantity of cattle purchased on a negotiated basis and on a negotiated
grid basis that were slaughtered in addition to the previous
requirement to report the number of cattle purchased through forward
contracts, formula marketing arrangements and the quantity and carcass
characteristics of packer-owned cattle that were slaughtered. In
addition, packers are required to provide the basis level month and
delivery year for all cattle purchased through forward contracts in
addition to the previous requirement to report the basis level and
delivery month. These changes are necessary to make the information
published in AMS market reports more meaningful and useable by the
industry by providing a complete picture of the prior week's slaughter
with respect to the numbers of cattle harvested under each purchase
type. Prices for negotiated purchases and negotiated grid purchases are
collected currently, but prior week slaughter numbers for these types
of purchases are not now collected. However, the addition of this
reporting requirement is expected to have little impact on the
reporting burden to packers, while contributing to the completeness of
the information disseminated under the program.
Another change under section 59.103 is that packers are required to
provide the basis level month and delivery year for all cattle
purchased through forward contracts in addition to the previous
requirement to report the basis level and delivery month. The basis
level month and delivery year are necessary to provide a more accurate
picture of the forward contract market and will allow AMS to publish
more meaningful information. Also, the added information reflects the
current industry practice of sometimes contracting out very far into
the future, making it necessary to know the delivery year to categorize
transactions properly according to not only the month but also the year
of delivery.
Finally, in another effort to reduce the burden on reporting
packers, the weekly requirement to report information for cattle
purchased through a formula marketing arrangement and slaughtered
during the prior slaughter week is removed as the Agency can obtain
this information by aggregating packers' daily submissions.
Swine
As required by the Reauthorization Act, the reporting requirements
for sows and boars are separated from the reporting requirements for
barrows and gilts. Thus under this rule, section 59.202 contains the
reporting requirements for barrows and gilts and section 59.203
contains the reporting requirements for sows and boars. Compared to the
August 8, 2007, proposed rule, section 59.203 was modified for
consistency in numbering and to delete a subsection that had been
reserved. Former section 59.203(a)(5) is re-designated as section
59.203(b), and the term ``Publication'' is added to the beginning of
the re-designated section. Former section 59.203(b) [Reserved] is
deleted.
The Reauthorization Act also makes a few other modifications to the
swine reporting provisions. Specifically, the definition of a packer is
modified to also include a person that slaughtered an average of
200,000 head of sows, boars, or combination thereof per year during the
immediately preceding 5 calendar years. Under the 1999 Act, a packer
was defined as a swine processing plant that slaughtered an average of
at least 100,000 swine per year during the immediately preceding 5
calendar years. The Reauthorization Act also changes the reporting
timeframe for packers to submit prior day slaughtered swine information
from 7 a.m. central time to 9 a.m. central time and requires the
Secretary to publish a net price distribution on all barrows and gilts
slaughtered the previous day.
In addition to the changes required by the Reauthorization Act, the
Agency makes a few other minor modifications to reduce the reporting
burden on swine packers. A definition of the term ``inferior swine'' is
added to allow packers to exclude information on inferior hogs, which
are discounted in the marketplace, from their data submissions to AMS.
Also, the requirement to submit information on the lowest net price and
the highest net price has been removed as the Agency can obtain this
information from the LMR system from packer submissions.
Lamb
As previously discussed, the Reauthorization Act did not change the
reporting provisions for lamb. However, the Agency makes a few changes
to reduce the reporting burden on lamb packers where possible and to
provide
[[Page 28611]]
more meaningful information in AMS market reports.
The Agency deletes the definitions for the terms ``lambs
committed'' and ``terms of trade'' as the requirements to submit this
information are deleted to reduce the reporting burden on packers. The
Agency adds a definition for the term ``yield grade lamb carcass
reporting'' to add further clarification to the requirement to report
yield grade information.
Compared to the August 8, 2007, proposed rule, section 59.301 is
modified for consistency in numbering and to delete a subsection that
had been reserved. The language from the former section 59.301(a)(1) is
incorporated into section 59.301(a) with no change in meaning. Former
sections 59.301(a)(1)(i) through 59.301(a)(1)(x) are re-designated as
sections 59.301(a)(1) through 59.301(a)(10). Former section
59.301(a)(2) is re-designated as section 59.301(b), and the word
``Publication'' is added to the beginning of the re-designated section.
Finally, former section 59.203(b) [Reserved] is deleted.
With respect to weekly reporting, the Agency requires packers to
submit information on the quantity of lambs purchased through a
negotiated purchase that were slaughtered in addition to the previous
requirement to submit this type of information on packer-owned lambs,
lambs purchased through forward contracts, and lambs purchased under a
formula arrangement. This change will allow AMS to publish more
meaningful market information in AMS market reports.
With respect to reporting requirements for lamb carcasses, the
Agency requires packers to submit information on their carcass
purchases in addition to the current requirement to report carcass
sales. Due to the changing structure of the lamb industry, an
increasing number of transactions are not required to be reported under
the prior regulation. Requiring packers to also report their carcass
purchases will greatly increase the volume of covered transactions and
will allow AMS to publish more meaningful information in AMS market
reports.
General Provisions
Subpart A of part 59, General Provisions, covers those requirements
pertinent to all aspects of mandatory reporting. Section 59.10 details
how packers and importers are required to report information and how
reporting will be handled over weekends and holidays. Electronic
reporting is required for all information collection. Electronic
reporting involves the transfer of data from a packer's or importer's
existing electronic recordkeeping system to a centrally located AMS
electronic database. The packer or importer is required to organize the
information in an AMS-approved format before electronically
transmitting the information to AMS.
Once the required information has been entered into the AMS
database, it will be aggregated and processed into various market
reports that will be released according to the daily and weekly time
schedule set forth in these regulations.
Section 59.20 identifies the recordkeeping requirements imposed by
the 1999 Act and these regulations on packers and importers. Reporting
packers and importers are required to maintain and to make available
the original contracts, agreements, receipts, and other records
associated with any transaction relating to the purchase, sale,
pricing, transportation, delivery, weighing, slaughter, or carcass
characteristics of all livestock. In addition, they are required to
maintain such records or other information as is necessary or
appropriate to verify the accuracy of the information required to be
reported under these regulations. All of the above mentioned paperwork
must be maintained by packers and importers for at least 2 years. These
records must be made available to employees or agents of USDA for
routine compliance audits as well as for investigations involving
suspected noncompliance or potential violations. More information
regarding compliance and review procedures can be found in the LMR
Information section of the Livestock and Grain Market News Web site.
Further, packers are required to maintain a record to indicate the
time a lot of cattle or swine was purchased, or a unit of boxed beef
cuts was sold, as occurring either before 10 a.m. central time, between
10 a.m. and 2 p.m. central time, or after 2 p.m. central time. Lamb
packers are required to maintain a record to indicate the time a lot of
lambs was purchased or a lot of lamb carcasses was purchased or sold or
boxed lamb cuts were sold, as occurring either before 2 p.m. central
time or after 2 p.m. central time. For lamb importers, the record of
sale shall evidence the date the sale occurred. However, to allow
packers and importers time to collect, assemble and submit the
information to AMS by the prescribed deadlines, all covered
transactions up to within one half hour of the specified reporting
times are to be reported.
Lastly, under subpart A, section 59.30 details the general
definitions of terms used throughout the regulations, which are
applicable to all subparts. The majority of these definitions remain
unchanged from those that were published in the 2000 final rule.
However, as previously discussed, the following changes are made: Minor
modifications to the definition of ``discount''; the addition of a
definition for ``negotiated grid purchase''; the addition of a
definition of ``percent lean''; and the addition of a definition of
``person.'' The minor modifications to the definitions of ``negotiated
purchase'' and ``negotiated sale'' contained in the proposed rule are
not included in this final rule, and the definitions of the two terms
remain unchanged from the 2000 final rule.
Cattle
Subpart B of part 59 states what is required to be reported in the
cattle and boxed beef sectors. For the most part, the reporting
requirements are similar to those published in the December 1, 2000,
final rule. The specific changes have been discussed in a previous
section in this document. Section 59.100 provides definitions of cattle
terms used in subpart B, including the definition of packer, which
identifies which entities will be required to report under this rule.
In any calendar year, the term cattle packer includes any Federally
inspected cattle plant that slaughtered an average of 125,000 head of
cattle a year for the immediately preceding 5 calendar years.
Additionally, the term includes any processing plant that did not
slaughter cattle during the immediately preceding 5 calendar years if
the Secretary determines that the plant should be considered a packer
based on its capacity.
For entities that did not slaughter cattle during the immediately
preceding 5 calendar years, such as a new plant or existing plant that
begins operations, AMS will project the plant's annual slaughter or
production based upon the plant's estimate of annual slaughter capacity
to determine which entities meet the definition of a packer as defined
in these regulations.
The definition of ``boxed beef'' includes fresh and frozen primals,
subprimals, cuts fabricated from subprimals (with some exclusions), and
fresh and frozen ground beef, beef trimmings, and boneless processing
beef.
The definition of ``terms of trade'' applies to steers and heifers
only and includes the percentage of steers and heifers purchased by a
packer as a negotiated purchase that are scheduled to be delivered to
the plant for slaughter not later than 14 days and the
[[Page 28612]]
percentage of slaughter steers and heifers purchased by a packer as a
negotiated purchase that are scheduled to be delivered to the plant for
slaughter more than 14 days but fewer than 30 days.
The term ``type of purchase'' with respect to cattle, means a
negotiated purchase, negotiated grid purchase, a formula market
arrangement, and a forward contract.
The term ``white cow'' means a cow on a ration that tends to
produce white fat.
As previously discussed, the reporting requirements for cows and
bulls are separated from the reporting requirements for steers and
heifers, which will reduce the reporting burden on cow and bull
packers. Section 59.101 discusses the daily reporting requirements for
steer and heifer transactions, including what information will be
reported, when it will be reported, and when it will be published.
Steer and heifer plants covered under the rule will report the details
of their purchases twice each day to AMS (once by 10 a.m. central time,
and once by 2 p.m. central time) and will include all covered
transactions made up to within one half hour of the specified reporting
time. Packers completing transactions during the one half hour prior to
the previous reporting time will report those transactions at the next
prescribed reporting time. The Secretary will publish the information
not less than three times each day. Section 59.102 discusses the daily
reporting requirements for cows and bulls, including what information
will be reported, when it will be reported, and when it will be
published. Cow and bull plants covered under this rule will be required
to report the base bid price intended to be paid for slaughter cow and
bull carcasses on that day not later than 10 a.m. central time and the
prices for cattle purchased during the previous day not later than 2
p.m. central time. The Secretary will publish the information within
one hour of the required reporting time on the reporting day on which
the information is received by the packer. Section 59.103 discusses the
requirements for weekly reporting for steers and heifers. Packers will
be required to report information regarding the prior slaughter week on
the first reporting day of each week not later than 9 a.m. central
time. This information includes the quantity of cattle purchased
through a negotiated basis that were slaughtered; the quantity of
cattle purchased through a negotiated grid basis that were slaughtered;
the quantity of cattle purchased through forward contracts that were
slaughtered; the quantity of cattle delivered under a formula marketing
arrangement that were slaughtered; the quantity and carcass
characteristics of packer-owned cattle that were slaughtered; the
quantity, basis level, basis level month, and delivery month and year
for all cattle purchased through forward contracts; and the range and
average of intended premiums and discounts that are expected to be in
effect for the current slaughter week. This information will be
published by the Secretary on the same day by 10 a.m. central time.
Finally, under subpart B, section 59.104 details the information
required to be reported concerning sales of boxed beef cuts including
what will be reported, when it will be reported, and when it will be
published. Cattle plants producing boxed beef cuts will be required to
report their domestic and export sales of boxed beef cuts including
branded boxed beef cuts to AMS twice each reporting day, once by 10
a.m. central time and once by 2 p.m. central time. This should include
all covered transactions made up to within one half hour of the
specified reporting time. Cattle plants completing transactions during
the one half hour prior to the previous reporting time will report
those transactions at the next prescribed reporting time. This
information will be published by the Secretary twice each day. These
plants will be required to reference the Institutional Meat Purchase
Specifications (IMPS) for Fresh Beef Products Series 100, United States
Department of Agriculture, Agricultural Marketing Service, Livestock
and Seed Program, when applicable.
Swine
The Reauthorization Act made several changes to the swine reporting
provisions. The Agency makes a few other minor modifications, which are
discussed in detail in a previous section in this document, for clarity
and to reduce the reporting burden on packers.
Subpart C of part 59 lists the requirements of swine reporting
beginning with section 59.200, which establishes definitions for terms
used throughout the subpart including the definition of a packer. In
any calendar year, the term swine packer includes a Federally inspected
plant that slaughtered an average of at least 100,000 swine per year
during the immediately preceding 5 calendar years and a person that
slaughtered an average of at least 200,000 sows, boars, or combination
thereof per year during the immediately preceding 5 calendar years.
Additionally, in the case of a swine processing plant or person that
did not slaughter swine during the immediately preceding 5 calendar
years, it shall be considered a packer if the Secretary determines the
processing plant or person should be considered a packer under this
subpart after considering its capacity. For entities that did not
slaughter swine during the immediately preceding 5 calendar years, such
as a new plant or existing plant that begins operations, AMS will
project the plant's annual slaughter or production based upon the
plant's estimate of annual slaughter capacity to determine which
entities meet the definition of a packer as defined in these
regulations.
Section 59.202 discusses the daily reporting requirements for
barrows and gilts including what information will be reported, when it
will be reported, and when it will be published.
For barrows and gilts, packers required to report under this rule
will report the details of their barrows and gilts purchases three
times each day including a prior day report not later than 7 a.m.
central time, a morning report not later than 10 a.m. central time, and
an afternoon report not later than 2 p.m. central time, including all
covered transactions made up to within one half hour of each specified
reporting time. Packers completing transactions during the one half
hour prior to the previous reporting time will report those
transactions at the next prescribed reporting time. This information
will be published by the Secretary each reporting day not later than 8
a.m. central time, 11 a.m. central time, and 3 p.m. central time,
respectively. For barrows and gilts, packers required to report under
this rule will also have to report not later than 9 a.m. central time
on each reporting day information regarding all barrow and gilts
slaughtered during the prior business day. This information will be
published by the Secretary each reporting day not later than 10 a.m.
central time. In addition, the Secretary will publish a net price
distribution for all barrows and gilts slaughtered on the previous day
not later than 3 p.m. central time. Section 59.203 details the
reporting requirements for sows and boars. Under this rule, each sow
and boar packer will report to the Secretary not later than 7 a.m.
central time on each reporting day information regarding all sows and
boars purchased or priced during the prior business day of the packer.
This information will be published by the Secretary each reporting day
not later than 8 a.m. central time. Section 59.204 details the
requirements for reporting weekly swine information to AMS including
what will be reported, when it will be reported, and when it will be
[[Page 28613]]
published. On the first reporting day of each week, not later than 4
p.m. central time, packers will be required to report information on
noncarcass merit premiums used and paid to producers during the prior
slaughter week by category. This information will be published on the
first reporting day of each week not later than 5 p.m. central time.
Lamb
Subpart D of part 59 covers the mandatory reporting of lambs. The
1999 Act gives the Secretary the authority to establish a mandatory
lamb price reporting program but does not set forth the requirements.
AMS will resume the previously established mandatory lamb price
reporting program with some modifications as discussed in a previous
section in this document.
Section 59.300 provides definitions for terms used throughout
subpart D including definitions for packer and for importer, which
identifies the entities that will be required to report under this
rule. For any calendar year, the term lamb packer includes any
Federally inspected lamb processing plant that slaughtered or processed
the equivalent of an average of 75,000 head of lambs a year for the
immediately preceding 5 calendar years. Additionally, the term includes
any processing plant that did not slaughter or process an average of
75,000 lambs during the immediately preceding 5 calendar years if the
Secretary determines that the plant should be considered a packer based
on the capacity of the processing plant.
For entities that did not slaughter lambs during the immediately
preceding 5 calendar years, such as a new plant or existing plant that
begins operations, AMS will project the plant's annual slaughter or
production based upon the plant's estimate of annual slaughter capacity
to determine which entities meet the definition of a packer as defined
in these regulations.
For any calendar year, the term lamb importer includes any importer
that imported an average of 2,500 metric tons of lamb meat products per
year during the immediately preceding 5 calendar years. Additionally,
for any calendar year, the term importer includes any lamb importer
that did not import an average of 2,500 metric tons of lamb meat
products during the immediately preceding 5 calendar years if the
Secretary determines that the person should be considered an importer
based on their volume of lamb imports.
For importers of lamb meat products, AMS will annually review
import lamb volume data obtained from the United States Bureau of
Customs and Border Protection to determine which importers are required
to report imported boxed lamb cut sales information under these
regulations.
Under this rule, several changes are made to the definitions
section that was published in the 2000 final rule. To facilitate the
publication of more meaningful information in AMS market reports, a
definition of ``yield grade lamb carcass reporting'' is added, which
helps clarify the requirements for reporting USDA yield grade
information. In addition, the definitions of ``lambs committed'' and
``terms of trade'' are deleted as the requirement to submit the
information associated with these definitions has been removed as it is
not used by the industry.
Section 59.301 covers the daily reporting requirements for live
lamb transactions including what will be reported, when it will be
reported, and when it will be published. Lamb plants covered under the
rule will report the details of their live lamb purchases once each day
to AMS, to include all covered transactions made up to within one half
hour of the specified reporting time. Lamb plants completing
transactions during the one half hour prior to the previous reporting
time will report those transactions at the next prescribed reporting
time. The Secretary will publish this information not less than once
each day. Section 59.302 covers the same type of information for weekly
reporting of live lamb transactions. Packers will be required to report
information regarding the prior slaughter week, including among other
things the number of lambs purchased through a negotiated purchase that
were slaughtered, on the first reporting day of each week to be
published by the Secretary on the same day. Finally, section 59.303
covers the reporting requirements for transactions of lamb carcasses
and boxed lamb cuts including what will be reported, when it will be
reported, and when it will be published. Packers will be required to
report details of their sales and purchases of carcass lambs once each
day and the Secretary will publish the information once each day.
Packers will be required to report details of their sales of boxed lamb
cuts, including applicable branded product. This information will be
published once each day. These plants will be required to reference the
Institutional Meat Purchase Specifications (IMPS) for Fresh Lamb and
Mutton Series 200, United States Department of Agriculture,
Agricultural Marketing Service, Livestock and Seed Program, where
applicable.
Importers of boxed lamb cuts will be required to report the
required information of their prior week sales of imported boxed lamb
cuts on the domestic market, including applicable branded product on
the first reporting day of each week and this information will be
published by the Secretary on the same day.
OMB Control Numbers
Subpart E of part 59 covers the OMB control number 0581-0186
assigned pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35) for the information collection requirements listed in
subparts B through D of part 59. All required information must be
reported to AMS in a standardized format. The standardized format is
embodied in 16 data collection forms that are included in Appendix E at
the end of this document. Cattle packers will utilize up to seven of
these forms (not all cattle packers must submit all cattle forms)
(Appendix A) when reporting information to AMS, including four for
daily cattle reporting, two for weekly cattle reporting, and one for
daily boxed beef cuts reporting. Swine packers will utilize up to three
forms (not all swine packers must submit all swine forms) (Appendix B),
two for daily reporting of swine purchases and one for weekly reporting
of non-carcass merit premium information. Lamb packers will utilize up
to six of these forms (not all lamb packers must submit all lamb forms)
(Appendix C) when reporting information to AMS, including one for daily
lamb reporting, three for weekly lamb reporting, one for daily and
weekly boxed lamb cuts reporting, and one for daily lamb carcass
reporting. Lamb importers will utilize one of these forms when
reporting information to AMS for reporting weekly imported boxed lamb
cut sales.
Appendices
The final section of this document contains a series of five
appendices. These appendices will not appear in the Code of Federal
Regulations. The first three appendices, Appendices A to C, have
already been discussed above. They describe the forms that will be used
by those required to report information under this program. Appendix D
contains guidelines for those entities required to report information
on how to use the forms. The actual forms are contained in Appendix E.
Comments and Responses
On August 8, 2007, AMS published a proposed rule and invitation for
[[Page 28614]]
comment in the Federal Register (72 FR 44672-44722) reestablishing and
revising a mandatory program of reporting information regarding the
marketing of cattle, swine, lambs, and products of such livestock under
the Act. The initial 30-day comment period was set to expire on
September 7, 2007. However, on September 5, 2007, AMS announced that
the deadline for submitting comments had been extended until September
24, 2007. AMS received 18 comments relevant to the proposed rule. Ten
comments were received from organizations representing livestock
producers and meat packers and processors in both the United States and
overseas; four were received from packer/processors or individuals
affiliated with packer/processors; and one each was received from an
industry market information provider, a livestock producer, a foreign
government, and an individual with no affiliation given. Comments and
Agency responses are discussed below.
Provisions of the Act
Summary of Comments: One comment stated that the fine for
violations of the Act should be $500,000 per occurrence and that the
entire program should be paid for by taxes on the industry.
Agency Response: Section 253(a) of the Act provides that the
Secretary may assess a civil penalty of not more than $10,000 per
violation. Section 254 of the Act prohibits the Secretary from
assessing any type of fee for the submission or reporting of
information, for access to published information, or for any other
activity required under the Act. Therefore, the comments cannot be
addressed through this rulemaking.
General Accountability Office Recommendations
Summary of Comments: Two comments stressed the need for USDA to
implement the recommendations of the General Accountability Office
(GAO) report ``Livestock Market Reporting: USDA Has Taken Some Steps to
Ensure Quality, but Additional Efforts Are Needed'' (GAO-06-202), which
was published in December, 2005. One of these comments suggested that
the GAO recommendations should be reflected in the proposed rule.
Agency Response: AMS concurs that the recommendations of the GAO
report should be implemented. AMS has implemented most of GAO's
recommendations, but has not fully implemented all of the
recommendations while the program has been operating under a voluntary
basis. AMS will complete implementation of the GAO recommendations
after this rule has become effective and the mandatory reporting
program is again in operation. AMS disagrees with the recommendation to
codify the GAO recommendations within this rulemaking. GAO did not
recommend any rulemaking or modifications to the rule in effect at the
time of its audit of the LMR program. Rather, GAO recommended changes
to AMS procedures for operation of the program and to information
disseminated by AMS about the program. Thus, AMS is not modifying the
proposed rule to codify the GAO recommendations.
General and Miscellaneous Comments
Summary of Comments: Two comments supported the proposed rule
generally and specifically mentioned support for proposed revisions and
modifications in definitions. The comments noted the need for timely
and unbiased market information by market participants, and indicated
that implementation of the mandatory program would provide the needed
information.
Agency Response: AMS concurs with the comments.
Summary of Comments: One comment encouraged AMS to evaluate the
impact on the marketplace of modified or new reports, to consider
industry input as modified or new reports are developed, and to allow
appropriate time for implementation and testing to assure a smooth
transition.
Agency Response: Although the comment does not address the
rulemaking directly, it does address the primary output of the rule--
the public reports generated from the data submitted under the rule
that are disseminated by AMS. AMS concurs that any modified or new AMS
reports need to be developed with care, adequate industry input, and
appropriate testing.
Summary of Comments: One comment expressed concern that small farms
and small farm owners could not survive ``when taxed with the financial
and time consumption that this mandatory wave promises.''
Agency Response: Only meat packers, processors, and importers are
required to report under this rule. Thus, there is no financial or
reporting burden on farms and farm owners. Indeed, the LMR program
provides market information to all segments of the industry without any
cost for accessing the reports.
Summary of Comments: One comment requested that AMS and the
Economic Research Service (ERS) use this rulemaking to reestablish the
collection and public reporting of retail meat prices using high
quality price scanner data.
Agency Response: The collection and reporting of retail meat prices
obtained through price scanner data is a voluntary program and is thus
not addressed through this rulemaking. Nonetheless, subsequent to the
passage of the Reauthorization Act, ERS has begun reimplementation of
the retail meat price scanner data program.
General Provisions--Definitions
Negotiated Purchase and Negotiated Sale
Summary of Comments: Two comments objected to the proposed
modifications to the definitions of the terms ``negotiated purchase''
and ``negotiated sale'' by removing the language ``and agreement on a
delivery day.'' The comments asserted that there is no consummated
transaction between buyer and seller until a price and delivery date
are known. The comments also stated that the change would require
packers to make several assumptions that may turn out to be inaccurate,
would make the AMS audit process more burdensome, and would place
unnecessary reprogramming costs on packers. Conversely, one comment
agreed with the proposal to drop the phrase ``and agreement on a
delivery day'' from the definitions. The comment asserted that the
definition from the 2000 final rule resulted from a misinterpretation
of the Act and has caused many negotiated sales to be omitted from the
data for the day on which the price quote was actually made and
errantly placed in the data for the day on which a delivery date is
established.
Agency Response: AMS does not agree that the proposed removal of
the phrase ``and agreement on a delivery day'' from the definitions of
the terms ``negotiated purchase'' and ``negotiated sale'' would
introduce the level of uncertainty suggested by the comments.
Nonetheless, there is room for ambiguity regarding the criteria for
considering a transaction to be consummated, and that agreement on a
delivery day may be regarded as one of those criteria. AMS concurs that
the proposed modification likely would have increased the burden of
this rule compared to no change from the 2000 rule. Because a
commensurate benefit in the reporting of market information is not
sufficiently clear, AMS reinserts the phrase ``and agreement on a
delivery day'' into the definitions of ``negotiated purchase''
[[Page 28615]]
and ``negotiated sale.'' For consistency, AMS also adds the same
language to the definition of ``negotiated grid purchase.''
Cattle Reporting--General
Summary of Comments: One comment indicated support for areas of
expanded reporting for cattle, such as separate reporting for
negotiated grid purchases. However, the comment further indicating that
there were reduced reporting requirements in a number of areas and that
the impact of altering such requirements on users of the information
did not appear to have been adequately analyzed. The comment indicated
that discounts would be reported for weight, quality, yield, livestock
class and breed, dressing percentage, dark cutting, and for all other
characteristics, but that no similar change has been consistently
incorporated for premiums. In addition, the comment expressed concern
regarding the elimination of the requirement for packers to report
information for cattle purchased through a formula marketing
arrangement and slaughtered the previous week. The comment expressed
doubt that there would be sufficient detail for AMS to aggregate the
daily information submitted by packers to obtain the information
previously required to be reported weekly.
Agency Response: AMS thoroughly considered the impact of all
proposed rule changes on the information that would be collected and
subsequently summarized and disseminated to the public users of the
information. AMS believes that the modifications in reporting
requirements for cattle will lead to a net increase in the utility of
the information that will be disseminated, thus benefiting all users of
the data. In terms of information obtained on premiums and discounts
for steers and heifers, the rule requires reporting of any premiums or
discounts associated with weight, quality grade, yield grade, or other
characteristic. The reporting requirements apply to both premiums and
discounts, and AMS disagrees with the comment that changes for
reporting of discounts differ from those for premiums. For both
premiums and discounts, the phrase ``or other characteristic'' was
added the reporting requirements for steers and heifers to ensure that
all potential categories of premiums and discounts would be reported.
Finally, AMS has evaluated carefully the reporting requirements for
cattle purchased through a formula marketing arrangement and is
confident that the elimination of the weekly reporting requirement will
not impact the Agency's ability to report weekly summaries of
information aggregated from daily information. All of the information
necessary to produce the weekly reports will be contained in the
information that will be included in the daily submissions by packers.
Hence, AMS retains these cattle reporting requirements as proposed.
Cattle Reporting--Definitions
Boxed Beef
Summary of Comments: Four comments addressed proposed changes in
the definition of ``boxed beef.'' One comment supported the proposed
changes generally, but exhorted AMS to maintain consistency with
historical data. One comment noted that including frozen product within
the definition of ``boxed beef'' would not improve reporting unless the
frozen category would be reported separately. One comment noted that
removing the age limitations on fresh product would put downward
pressure on reported prices of boxed beef. Two comments generally
supported the elimination of age restrictions in the definition of
boxed beef, but questioned how AMS would identify and handle discounted
products so as not to distort reported market prices and information.
Agency Response: AMS concurs with the sense of the comments that
the proposed changes in the definition of boxed beef are generally
favorable, but need to be implemented with caution. In particular, AMS
concurs that there needs to be a means for distinguishing fresh product
transactions that may be discounted or priced differently due to age of
the product. Therefore, AMS adds a third code to the ``Refrigeration''
category, which is line 16 on the Boxed Beef Daily Report LS-126. The
proposed rule include two categories, namely, ``fresh'' and ``frozen.''
The form is modified to include three categories of ``Refrigeration''--
(1) Fresh, 14 days or less; (2) Frozen; and (3) Fresh, over 14 days.
Splitting the fresh category into two product age groups will provide a
means for identifying product that may be discounted due to potential
shelf life limitations.
Carlot-Based
Summary of Comments: Two comments expressed concern regarding the
definition of ``carlot-based'' for cow and bull beef to mean any
transaction between a buyer and seller consisting of 5,000 pounds or
more of one or more individual items. The comments indicated that
certain cuts may be trading in high volume, but in lots of less than
5,000 pounds, and thus precluding the reporting of these often high-
value items.
Agency Response: AMS concurs with the comments that a minimum
threshold of 5,000 pounds for reporting of cow and bull boxed beef
transactions would preclude the reporting of important high-value
items. To increase the range of items for which sufficient information
will be submitted for reporting, AMS lowers the minimum threshold for
reporting of boxed cow and bull beef from 5,000 to 2,000 pounds. AMS
believes that this minimum threshold will enable valid, accurate market
information to be reported on high-value boxed cow beef items with
comparatively little increase in the reporting burden on subject
packers.
Terms of Trade
Summary of Comments: One comment supported the change in the
application of ``Terms of trade'' to steer and heifer transactions only
to coincide with the separation of reporting requirements for steers
and heifers versus cows and bulls. The comment also supported the
requirement to distinguish between negotiated transactions that are
scheduled to be delivered for slaughter within 14 days versus those
that are to be delivered in more than 14 days but fewer than 30 days.
Another comment noted that the requirement to report on steers and
heifers to be delivered between 14 days and 30 days would provide
additional information regarding those transactions, while the
elimination of the reporting requirement for cattle scheduled to be
delivered within 7 days and between 7 and 14 days would result in a
loss of information.
Agency Response: AMS recognizes that there is a tradeoff involved
in revising the reporting requirement for the delivery schedule for
steers and heifers. The gain in information on negotiated purchases
scheduled for delivery between 14 and 30 days must be weighed against
the loss of information in terms of detail on purchases scheduled for
delivery within 14 days because the data would no longer be obtained to
distinguish between purchases with delivery scheduled within 7 days or
less versus 8 to 14 days. Past experience with the LMR program has
shown that the percentage of transactions falling into the 8 to 14 day
delivery window is small and no price difference has been found for
those purchases versus those scheduled for delivery within 7 days.
However, no information is available on purchases with deliveries
scheduled between 14 and 30 days, as that
[[Page 28616]]
information was not previously required. Therefore, AMS concludes that
the potential benefit of obtaining information on transactions with
extended delivery terms exceeds the potential loss of information on
the breakdown regarding transactions scheduled within 14 days.
General Provisions--Recordkeeping
Summary of Comments: One comment supported the modification in the
recordkeeping requirements for lamb importers to maintain the time of
day of a sale.
Agency Response: AMS concurs with the comment. Because lamb
importers are required to report only weekly, the date that the sale
occurred is sufficient to permit a transaction to be verified.
Cattle Reporting--Daily Reporting
Summary of Comments: Two comments suggested changing the current
method of collecting information on delivered cattle. The comments
stated that the current method of collecting this information provides
little value and is redundant and burdensome to packers. The comments
suggested collecting the information for delivered cattle in a manner
similar to prior day reporting for swine.
Agency Response: The Act provides for only reporting twice per day
regarding cattle delivered to the packer and does not provide for a
prior day report as is the case for swine. Therefore, AMS does not
adopt the recommendation to require prior day reporting for all cattle.
Summary of Comments: Two comments support the proposed reduction in
reporting requirements for cow and bull packers and noted that the
adjustment would not reduce the quality or quantity of important data.
Conversely, another comment asserted that the only justification for
the proposed change was to reduce reporting requirements for cow and
bull packers and that the proposed rule did not analyze the impact of
these changes on producers who sell such animals.
Agency Response: AMS concurs with the comments that the changes to
cow and bull reporting requirements will reduce the burden on reporting
plants without adversely affecting the value of the information
available to be disseminated. AMS disagrees with the comment that the
impact of the changes was not analyzed. In drafting the proposed rule,
AMS carefully considered the organization of the industry and past
experience with the information collected under the LMR program.
Deliveries of cows and bulls to packing plants are overwhelmingly cull
animals that are neither committed nor scheduled in advance of
delivery. Conversely, steers and heifers are placed on feed with the
intention of reaching finished weights and grades within marketing
windows of a few weeks. Previous experience with the LMR program has
proven that the committed and delivered reporting required for cows and
bulls created a substantial reporting burden while resulting in little
useful information. For the most part, these animals are delivered to
the plant in small lots of one or a few head without prior scheduling
and thus are both committed and delivered simultaneously. However,
plants were required to report these lots twice simultaneously (once as
committed and once as delivered) under the previous rule that did not
distinguish between reporting requirements for cows and bulls versus
that for steers and heifers. Separating the reporting requirements for
cows and bulls versus steers and heifers enabled AMS to add the
reporting form LS-131 (Cow/Bull Plant Delivered Bids) to collect more
detailed information from cow and bull packers once per day. AMS
believes that there will be a net gain in the utility of the
information collected and ultimately disseminating regarding cow and
bull purchases by packers. Thus, AMS retains the requirements of the
proposed rule for cow and bull reporting.
Summary of Comments: One comment addressed the manner in which
cattle market information obtained by AMS is summarized for public
reporting. Specifically, the comment noted that some companies report
all cattle purchases, including live purchases, FOB the feedyard and
FOB the packing plant, but both are not included in reporting by AMS.
The comment recommended reporting these transactions. The comment also
recommended reporting cattle on a ``clean up'' basis, using premiums
and discounts to ``clean up'' each lot to provide better information
regarding the real value of each lot.
Agency Response: AMS appreciates the recommendations on AMS
reporting of information required under this rule. However, the
recommendations do not address the regulatory requirements and thus
entail no changes to the proposed rule.
Cattle Reporting--Weekly Reporting
Summary of Comments: One comment supported the addition of the
negotiated grid purchase category to the purchase types. The comment
also deemed as necessary the requirement to report the delivery year in
addition to the basis-level month for cattle purchased through forward
contracts. Conversely, another comment asserted that the addition of
the field ``delivery year'' would impose additional and unnecessary
programming costs with little or no attendant benefit because few such
transactions take place annually and those that occur are not material
to the market.
Agency Response: AMS agrees that there are relatively few
transactions that occur beyond the immediate forward contracting year,
but such transactions nonetheless do occur. AMS disagrees that such
transactions are not material to the market. The concern is that
without data on the delivery year, there is no way to distinguish
between a forward contract for delivery in, say, 3 months versus 15
months. Aggregating information on forward contracts scheduled for
delivery 12 months apart would distort market information and could
result in misleading signals with material consequences for the market.
Thus, AMS retains the requirement to report the delivery year for
forward contract purchases.
Swine Reporting--General
Summary of Comments: One comment supported all of the changes to
swine reporting, noting that the changes should enable the Agency to
publish more meaningful reports while reducing the burden on packers.
Agency Response: AMS concurs with the comment.
Summary of Comments: One comment noted a reference to section
59.303 in the discussion of the key components of the proposed rule (72
FR 44676), and questioned whether the reference should be to section
59.203.
Agency Response: The comment indeed identified a typographical
error, which has been corrected in this notice.
Swine Reporting--Definitions
Packer
Summary of Comments: One comment suggested setting the threshold
number for reporting on sows at 100,000 head per year because the
sausage industry is comprised of many small packers.
Agency Response: The size thresholds for a ``packer'' are defined
by the Act. Thus, AMS retains the statutory requirements in the
definition of a swine ``packer.''
Inferior Hogs
Summary of Comments: One comment supported the proposal to define
``inferior hogs'' and to allow packers to exclude these animals from
[[Page 28617]]
data submitted to AMS. The comment asserted that packers submitting
data would be in the best position to know which animals are
``inferior,'' and that the modification would not be detrimental to
producers and would add transparency to the system. The comment also
noted inconsistency in references to ``inferior swine'' as opposed to
the term ``inferior hogs.''
Agency Response: AMS concurs with the comment. For consistency, the
term ``inferior hogs'' is replaced by the term ``inferior swine''
throughout.
Swine Reporting--Daily Reporting
Summary of Comments: One comment strongly supported the publication
of a net price distribution report and encouraged AMS to work closely
with the industry to determine the most effective reporting format. The
comment noted that the Act grants the Secretary authority to make
``reasonable adjustments'' to submitted data to prevent harm to
producers, packers, and other market participants. The comment noted
that the Act requires AMS to publish a net price distribution report
for all barrows and gilts slaughtered on the previous day not later
than 3 p.m. Central time. Nonetheless, the comment encouraged AMS to
publish the distribution at 10 a.m. Central time with the prior day
slaughter report.
Agency Response: AMS concurs with the suggestion to work with
industry to develop the most effective reporting format for net price
distributions for slaughtered barrows and gilts and explore the
feasibility of publishing the report earlier in the day. However, no
changes are made as a result of this comment to the proposed rule.
Summary of Comments: One comment regarding swine reporting
suggested that multiple daily reports are not warranted and that a
daily report from each packer would accomplish the desired results.
Agency Response: Reporting requirements for swine are specified in
the Act. Therefore, AMS retains the reporting requirements of the
proposed rule.
Summary of Comments: One comment noted that current morning and
afternoon reports for swine are based on State of origin, while prior
day reports are based on delivered location. The comment suggested that
the prior day report should be based on State of origin for
consistency.
Agency Response: AMS will obtain State of origin information in the
prior day report from packers, and thus will have the information
necessary to report prior day information by State of origin.
Summary of Comments: One comment observed that the daily reporting
requirements for sows and boars appear to be reasonable, but questioned
the 7 a.m. Central time reporting deadline. The comment noted that the
Reauthorization Act requires that sow and boar information be reported
by packers not later than 9:30 a.m. Central time, and urged that the
deadline in the rule be set to no later than 9 a.m. and preferably 9:30
a.m. as the statute reads. The comment noted that the 8 a.m. Central
publication time for AMS would need to be changed if the submission
deadline were to be changed.
Agency Response: AMS acknowledges that a later reporting deadline
is permissible under the Reauthorization Act. However, AMS believes
that the proposed 7 a.m. reporting deadline will not be unduly
burdensome to sow and boar packers. Previously, many sow and boar
packers submitted prior day information at the close of business on the
``prior'' day, rather than submitting the data the following morning.
As such, a 7 a.m. reporting time imposes no additional reporting burden
on these packers.
Summary of Comments: One comment urged USDA to comply fully with
the Reauthorizations Act's requirements for electronic submission of
sow and boar information through an Internet Web site or equivalent
electronic means. The comment noted that sow and boar packers are
relatively small firms that cannot absorb significant compliance costs.
Agency Response: Under this program, firms will be able to submit
data either through electronic data transfer or through a web
interface.
Lamb Reporting
Summary of Comments: One comment noted that lamb carcass price
information is used by all segments of the domestic lamb business. The
comment recommended that audits be conducted not only by reviewing
seller invoices but also by calling buyers, that the minimum for carlot
trades be set at 200 carcasses, and that USDA call both sellers and
buyers on a weekly basis to ensure that reporting does not include
special programs. The comment also questioned whether inter-company
trades should be used.
Agency Response: With regard to verification of sales of lamb
carcasses, AMS will obtain information only from those entities
required to report. AMS conducts thorough audits of all the entities
required to report, and thus there is no need to confirm selling
information with buyers. The rule does not set a minimum threshold for
carlot trades of carcasses, just as there is no minimum threshold set
for live animal transactions. A threshold of 200 carcasses likely would
exclude smaller lots that represent a meaningful segment of the carcass
trade. The comment questioning whether to use inter-company trades is
unclear. The only information that will be collected and subsequently
reported by AMS will be inter-company (that is, company-to-company)
trades. Perhaps the comment intended to refer to intra-company trades,
but such transactions internal to a single firm will not be submitted
under the LMR program.
Summary of Comments: Three comments objected to the reporting
requirements for imported lamb out of principle and on the basis that
the information would have no correlation with U.S. domestic slaughter
lamb prices and would increase costs of international trade.
Conversely, three comments indicated support for the lamb reporting
requirements. Of these, one comment specifically singled out support
for the mandatory reporting requirements for lamb. Another comment
supported the proposed rule generally and specifically cited the need
for weekly data generated from lamb reporting for operation of a new
livestock risk protection insurance product. Finally, one of the
comments supported the modifications in the proposed rule for lamb
packers, indicating that requiring lamb packers to report on carcass
purchases in addition to the previous requirement to report on carcass
sales would enable AMS to make more complete and meaningful information
available in its reports.
Agency Response: AMS disagrees that there is no relationship
between values for imported boxed lamb cuts and U.S. domestic slaughter
lamb prices. First, U.S. lamb producers are not the only intended
beneficiaries of this market information program. All market
participants from producers through buyers and final customers benefit
from more transparent market information, including information not
only on prices but also on quantities and characteristics of products
being traded. Because imported lamb now accounts for more than half of
the U.S. domestic supply of lamb meat, information on that segment of
the market is critical regardless of whether domestic and imported
product prices are highly correlated or not.
AMS acknowledges that there will be costs for lamb importers that
are required to report, but there likewise will be costs for domestic
lamb
[[Page 28618]]
suppliers. Indeed, costs for domestic lamb processors are estimated to
be higher than that for lamb importers, as domestic lamb carcass and
boxed lamb information is required to be reported daily while imported
boxed lamb information is required to be reported weekly. Therefore,
the rule does not impose a disproportionate burden on lamb importers
versus domestic lamb suppliers.
AMS concurs with the comment that the rule needs to be implemented
as quickly as possible to provide vital market information to the lamb
industry. AMS also concurs with the comment that the modified lamb
reporting requirements will enable more complete and meaningful market
reports to be published. Accordingly, AMS retains the lamb reporting
requirements as set forth in the proposed rule.
Summary of Comments: Four comments raised concerns about the
confidentiality of information submitted by lamb importers. The
comments noted the relatively small number and wide size distribution
of lamb importers that would be required to report. The comments argued
that a competitor knowing its own market share would be well-positioned
to determine the price of the major market shareholder.
Agency Response: AMS agrees that confidentiality of proprietary
business information is of utmost concern in the operation of the
mandatory reporting program. Section 251(a) of the Act directs the
Secretary to ``make available to the public information * * * in a
manner that ensures that confidentiality is preserved regarding--(1)
the identity of persons * * * and (2) proprietary business
information.'' Thus, AMS implemented the ``3/70/20'' confidentiality
guideline to enable the Agency to issue more frequent and more complete
reports on livestock and meat, providing all segments of the livestock
and meat industries with information on which to base market decisions,
while preserving the confidentiality of proprietary business
transactions. The guideline consists of three requirements: (1) At
least three reporting entities need to provide data at least 50 percent
of the time over the most recent 60-day time period, (2) no single
reporting entity may provide more than 70 percent of the data for a
report over the most recent 60-day time period, and (3) no single
reporting entity may be the sole reporting entity for an individual
report more than 20 percent of the time over the most recent 60-day
time period. AMS is confident that application of these guidelines
protects the confidentiality of information disseminated under the LMR
program, and thus maintains the reporting requirements for lamb
importers as proposed.
Summary of Comments: Two comments expressed concern about possible
requirements for reporting country of origin for imported lamb. The
comments stated that reporting of country of origin could increase the
risk of disclosure of individual companies' pricing information. One of
the comments noted that domestic boxed lamb data is not subject to any
comparable regional classification, while the other comment supported
the reporting requirement that identifies product as domestic or
imported only.
Agency Response: Given the small number of lamb importers, AMS
acknowledges the concern regarding potential disclosure of proprietary
business information in relation to the country of origin of imported
lamb. However, AMS has guidelines and procedures in place to ensure
that confidential information is not disclosed. As noted by one of the
comments, the rule does not require importers to submit the country of
origin of imported lamb, but only to designate whether lamb is sourced
domestically or is imported. On the other hand, AMS recognizes the
product description for lamb cuts often reveals the country of origin
of the product. Accurate product information is necessary for the data
to be aggregated and subsequently reported by AMS in sensible and
meaningful ways. AMS is cognizant of the confidentiality concerns
particular to imported lamb and will be especially vigilant in applying
its confidentiality guidelines before publicly reporting lamb market
information. If submitted data do not meet the confidentiality
guidelines, then the data will not be disclosed until sufficient
information is obtained to meet the guidelines. Thus, AMS retains the
requirements for reporting of imported lamb as proposed.
Summary of Comments: Two comments stated the economic and time
burden on lamb importers is significantly higher than estimated in the
proposed rule. One of the comments indicated that the startup/
maintenance cost estimate of $672 per respondent was understated by an
order of magnitude. The other comment stated that lamb importers are
relatively small, and that costs of compliance are higher for small
companies due to lower staff numbers and higher overhead costs compared
to larger businesses. The comment requested that USDA minimize the time
and resources required to collect data from lamb importers wherever
possible.
Agency Response: The comments asserted that costs of compliance for
lamb importers are higher than estimated by AMS, but did not provide
sufficient detail to permit the validity of the assertions to be
evaluated. AMS concurs with the comment that the Agency needs to
minimize the time and resources necessary to collect data wherever
possible. In developing the proposed rule, AMS has sought to minimize
the compliance burden consistent with the Agency's ability to collect
and disseminate useful information of value to industry participants,
including those required to submit data.
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
Section 259 of the 1999 Act prohibits States or political subdivisions
of a State to impose any requirement that is in addition to, or
inconsistent with, any requirement of the 1999 Act with respect to the
submission or reporting of information, or the publication of such
information, on the prices and quantities of livestock or livestock
products. In addition, the 1999 Act does not restrict or modify the
authority of the Secretary to administer or enforce the Packers and
Stockyards Act of 1921 (7 U.S.C. 181 et seq.); administer, enforce, or
collect voluntary reports under the 1999 Act or any other law; or
access documentary evidence as provided under Sections 9 and 10 of the
Federal Trade Commission Act (15 U.S.C. 49, 50). There are no
administrative procedures that must be exhausted prior to any judicial
challenge to the provisions of this rule.
Civil Rights Review
AMS has considered the potential civil rights implications of this
rule on minorities, women, or persons with disabilities to ensure that
no person or group shall be discriminated against on the basis of race,
color, national origin, gender, religion, age, disability, sexual
orientation, marital or family status, political beliefs, parental
status, or protected genetic information. This review included persons
who are employees of the entities that are subject to this regulation.
This rule does not require affected entities to relocate or alter their
operations in ways that could adversely affect such persons or groups.
Further, this rule will not deny any persons or groups the benefits of
the program or subject any persons or groups to discrimination.
[[Page 28619]]
Executive Order 13132
This rule has been reviewed under Executive Order 13132,
Federalism. This Order directs agencies to construe, in regulations and
otherwise, a Federal Statute to preempt State law only when the statute
contains an express preemption provision. This rule is required by the
1999 Act. Section 259 of the 1999 Act, Federal Preemption, states, ``In
order to achieve the goals, purposes, and objectives of this title on a
nationwide basis and to avoid potentially conflicting State laws that
could impede the goals, purposes, or objectives of this title, no State
or political subdivision of a State may impose a requirement that is in
addition to, or inconsistent with, any requirement of this subtitle
with respect to the submission or reporting of information, or the
publication of such information, on the prices and quantities of
livestock or livestock products.''
Prior to the passage of the 1999 Act, several States enacted
legislation mandating, to various degrees, the reporting of market
information on transactions of cattle, swine, and lambs conducted
within that particular State. However, since the National program was
implemented on April 2, 2001, these State programs are no longer in
effect. Therefore, there are no Federalism implications associated with
this rulemaking.
Executive Order 12866
This rule has been determined to be significant for purposes of
Executive Order 12866 and therefore has been reviewed by the Office of
Management and Budget (OMB). In accordance with Executive Order 12866,
this regulatory analysis contains a statement of the need for the rule,
an examination of alternative approaches, and an analysis of benefits
and costs.
Executive Summary
This rule implements the Reauthorization Act, which reauthorized
the 1999 Act and amended the swine reporting provisions of that Act. As
stated in the 1999 Act, the purpose of the Act is to establish a
program of information regarding the marketing of cattle, swine, lambs,
and the products of such livestock that provides information that can
be readily understood by producers; improves the price and supply
reporting services of the Department of Agriculture; and encourages
competition in the marketplace for livestock and livestock products. (7
U.S.C. 1635)
This rule facilitates open, transparent price discovery and
provides all market participants, both large and small, with comparable
levels of market information. The rule is expected to reduce the time
and resources that market participants would otherwise expend to assess
current market conditions, reduce risk and uncertainty, and contribute
to considerations of fairness and equity to all participants in the
marketplace. However, these anticipated benefits are difficult to
measure and quantify.
This rule is strictly an informational measure and does not impose
any restrictions on the form, timing, or location of procurement and
sales arrangements in which subject packers and importers may engage.
Therefore, costs of the rule are simply the costs associated with
system development and maintenance, data submission, and recordkeeping
activities of the packers and importers required to report information
under this rule, plus the costs to the Federal government for operation
of the program. However, most of the entities that will be required to
report under this rule already reported information prior to expiration
of the 1999 Act on September 30, 2005, and have since continued to do
so voluntarily. As a result, incremental costs for implementation of
this rule are negligible relative to total costs associated with the
program. Moreover, total costs estimated for this rule are lower than
costs estimated in the 2000 final rule expressed in comparable current
(May 2007) dollar values.
Total costs to reporting packers and importers are estimated at
approximately $724,000 per year, while costs to the Federal government
for operation of the program total $6.3 million per year. By
comparison, the total costs to reporting packers and importers in the
2000 final rule (65 FR 75464) were estimated at $836,000 per year in
current dollars, while costs to the Federal government in FY 2001 were
estimated at $6.9 million in current dollars. In current dollar terms,
the rule represents a reduction of $112,000 in estimated annual costs
to reporting packers and importers, and a reduction of $600,000 in
estimated annual costs to the Federal government.
For both respondents and the Federal government, total costs for
the rule are estimated at approximately $7.0 million annually, while
total costs for the 2000 final rule were estimated at $7.8 million
annually in current dollars. Because the Act expires on September 30,
2010, the rule is assumed to have a life cycle of 3 years. At a real
discount rate of 3 percent, the discounted present value of the total
private and public sector costs for the rule is estimated at almost
$20.5 million for the duration of the program, compared to over $22.6
million for the 2000 final rule (expressed in current dollars over a 3-
year life cycle). This represents a reduction of more than $2.1 million
over the life of the rule in comparison to the 2000 final rule. At a
real discount rate of 7 percent, the discounted present value of the
total private and public sector costs for the rule is estimated at
$19.7 million for the duration of the program, compared to $21.8
million for the 2000 final rule (expressed in current dollars over a 3-
year life cycle). This represents a reduction of $2.1 million over the
life of the rule in comparison to the 2000 final rule.
Need for Federal Regulatory Action
This rule implements the Reauthorization Act, which reauthorized
the 1999 Act and amended the swine reporting provisions of that Act.
The 1999 Act first became law on October 22, 1999, as an amendment to
the Agricultural Marketing Act of 1946. The first reports disseminated
under LMR were issued in April 2001. In December 2004, the 1999 Act was
reauthorized through September 30, 2005. The legislative authority
lapsed until October 5, 2006, when it was reauthorized through
September 30, 2010, with the Reauthorization Act. During the two
periods of lapsed mandatory reporting authority, most firms that would
have been required to report information under the requirements of LMR
continued to report the same information voluntarily. As a result, AMS
continued to release most of the reports that would have been released
under the mandatory reporting program.
The 1999 Act as amended by the Reauthorization Act directs the
Department of Agriculture (USDA) ``to establish a program of
information regarding the marketing of cattle, swine, lambs, and
products of such livestock.'' This Act contains specific requirements
that provide limited discretionary authority for regulatory
implementation of many of the law's provisions. As a result, many of
the provisions within this rule represent straightforward
implementation of the requirements of this Act.
As stated in the 1999 Act, the purpose of the statute is to
establish a program that--
(1) Provides information that can be readily understood by
producers, packers, and other market participants, including
information with respect to the pricing, contracting for purchase, and
supply and demand conditions for
[[Page 28620]]
livestock, livestock production, and livestock products;
(2) Improves the price and supply reporting services of the
Department of Agriculture; and
(3) Encourages competition in the marketplace for livestock and
livestock products. (7 U.S.C. 1635)
Increasingly, transactions between livestock producers and meat
packers occur by way of private negotiations rather than through public
trades. Compared to prices established in public markets, prices
established in private transactions are difficult to observe, collect,
summarize, and disseminate. Data reported by USDA's Grain Inspection,
Packers and Stockyards Administration (GIPSA) show that of total cattle
purchases by reporting packers, the share purchased in public markets
declined from 30.2 percent in 1977 to 12.0 percent in 2004.\1\ For
hogs, the decline was larger, dropping from 27.5 percent in 1977 to
just 1.7 percent in 2004. For sheep and lambs, public market purchases
declined from 23.4 percent to 8.3 percent of total purchases by
reporting packers over the same period.
---------------------------------------------------------------------------
\1\ GIPSA, USDA. Packers and Stockyards Statistical Report, 2005
Reporting Year. GIPSA SR-01-1, February 2007.
---------------------------------------------------------------------------
Open, transparent price discovery provides all market participants
with comparable levels of market information, providing each economic
agent with similar information. The decline in public market trading of
livestock over the years led to increasingly opaque price discovery in
these markets. As stated in the 1999 Act, mandatory livestock reporting
provides a means of providing information to market participants and
improving the price and supply reporting services of USDA.
Similar to many sectors of the economy, both the livestock
production and meat packing industries have undergone substantial
consolidation during the past few decades. However, the rate and extent
of the consolidation among meat packers has been greater compared to
livestock producers.
The four-firm concentration ratio for steer and heifer slaughter
increased from 35.7 percent in 1980 to 81.1 percent in 2004. \2\ Over
the same period, the four-firm concentration ratio for cow and bull
slaughter increased from 9.7 percent to 48.0 percent. Hog slaughter
concentration by the top four firms increased from 33.6 percent to 61.3
percent over the same period, while sheep and lamb slaughter
concentration increased from 55.9 percent to 66.9 percent. Between 1986
and 2005, the number of bonded packers reporting to GIPSA declined from
691 to 312.
---------------------------------------------------------------------------
\2\ Ibid.
---------------------------------------------------------------------------
According to the National Agricultural Statistics Service (NASS),
the number of cattle operations in the United States declined from 1.6
million in 1980 to 983,000 in 2005. Over the same time period, the
number of hog and pig operations declined from 667,000 to 67,000, while
the number of sheep and lamb operations declined from 120,000 to
68,000. Thus, consolidation occurred among livestock production
operations, but the number of livestock operations still far exceeds
the number of livestock packers.
For slaughter livestock, the predominant marketing relationship is
characterized by comparatively small livestock operations dealing with
large meat packing firms. In addition, markets for slaughter livestock
are local or regional in geographic scope. The distances over which it
is economically rational to transport slaughter livestock is dictated
by differences in relative prices for livestock in different geographic
areas versus shipping costs. Shipping costs include not only costs of
trucking equipment, labor, fuel, insurance and other out-of-pocket
expenses, but also include additional stress and weight shrink of
animals hauled for greater distances and longer periods of time. In
these regionalized trade areas, there typically are relatively large
numbers of livestock operations, but only a handful of packers for any
given type of slaughter animal. As a result, relatively few packers
engage in many, frequent negotiations and completed transactions with a
large number of producers. In contrast, even larger livestock
operations typically engage in negotiations with a few packers within
their economically viable trade area and may only complete transactions
with one or two packers. Smaller livestock operations may only engage
in sales transactions a few times per year, while packers procure
livestock to run their plants every business day of the year. The 1999
Act and the Reauthorization Act were passed by Congress in light of
these structural and organizational conditions present in the livestock
and meat industries.
The rule does not constitute economic regulation of the permissible
business practices in which meat packers and importers may engage.
Affected entities are free to conduct their businesses in any manner
consistent with other relevant Federal, State, and local laws and
regulations. The rule only requires that the subject entities disclose
information about their livestock purchases and meat sales to AMS,
which will then process, summarize, and disseminate the information.
The identity of persons, including parties to a contract, and
proprietary business information will be kept confidential in
accordance with the 1999 Act.
Alternative Regulatory Approaches
AMS believes that the rule represents the most cost effective means
of fulfilling the statutory mandate of the 1999 Act as amended by the
Reauthorization Act. While this Act provides some discretionary
authority for operation of the program, many of the definitions,
reporting times, and disclosure requirements are specified in the law
itself. Since the program was first implemented in April 2001,
experience has proven that electronic reporting is the least-cost means
for both subject entities and AMS to comply with the requirements of
the Reauthorization Act. During the periods in which mandatory
reporting requirements lapsed (including October 2005 through the
present), entities that continued to report voluntarily did so through
electronic submission of information in the same manner as had be
required under mandatory reporting authority.
The LMR system provides two methods for firms to transmit livestock
mandatory reporting data to the system: A Web interface and electronic
data transfer. For most firms, electronic data transfer provides the
most efficient mechanism for transferring required data. USDA provides
a software utility for users to transfer comma-delimited ASCII files
directly to the LMR system. The comma-delimited files can be generated
electronically from livestock purchase and meat sales records. For
smaller operations with relatively few transactions, the Web interface
may be more efficient than electronic data transfer. The Web interface
module is available over the Internet using a Web browser, but requires
more manual inputting of data compared to the electronic data transfer
option. Nonetheless, the Web interface option provides smaller
operations with a mechanism for submitting the required data without
the need to incur fixed costs of developing a software application to
prepare data for electronic data transfer. Historically, about 90
percent of plants and importers have submitted data electronically,
with the remaining 10 percent of respondents submitting data through
the Web interface.
[[Page 28621]]
Analysis of Benefits and Costs
The baseline for this analysis is the LMR program as it currently
operates. Specifically, the baseline is the LMR program as directed by
the 1999 Act and implemented by the 2000 final rule. Although the 2000
final rule expired when the 1999 Act expired on September 30, 2005, the
current voluntary participation by most packers allows the LMR program
to function nearly identically to how it operated under the mandatory
authority of the 1999 Act.
Despite the fundamental role played by market information for
private and public decision-making, research, outlook, and analysis,
there is comparatively little empirical research on market reporting in
and of itself. Likewise, there is a paucity of quantitative research
regarding the benefits and costs of LMR specifically.
Perry, et al. note that some local and regional market news reports
were no longer available after the implementation of LMR because of the
program's confidentiality restrictions.\3\ However, the authors also
conclude that far more information on formula transactions became
available, allowing for comparisons with negotiated transactions that
had not been possible before. Formula prices for cattle were found to
closely mirror prices for negotiated purchases. The study found that
volatility in weekly reported cattle prices rose after implementation
of LMR, but was unable to determine whether the change resulted from
the change in the reporting system or from changes in cattle markets.
The authors observed that the trend toward formula pricing arrangements
in cattle markets slowed after LMR was implemented, and cautiously
speculated that the program may have played a role in stabilizing the
volume of negotiated transactions.
---------------------------------------------------------------------------
\3\ Perry, J., J. MacDonald, K. Nelson, W. Hahn, C. Arnade, and
G. Plato. ``Did the Mandatory Requirement Aid the Market? Impact of
the Livestock Mandatory Reporting Act.'' Economic Research Service,
U.S. Department of Agriculture, LDP-M-135-01, September 2005.
---------------------------------------------------------------------------
Ward provides perhaps the most comprehensive review and assessment
of research relating to LMR.\4\ Ward notes that satisfaction or
dissatisfaction with mandatory reporting depends on individuals'
expectations regarding what the 1999 Act would achieve or the problems
that it would address. Ward concludes that mandatory reporting provides
more information in some areas than what was previously available and
has increased transparency and price reporting accuracy. He suggests
that satisfaction with the program likely has increased due to
increased familiarity with the data and information available through
mandatory reporting and enhanced confidence in reported prices.
---------------------------------------------------------------------------
\4\ Ward, C.E. ``An Assessment of the Livestock Mandatory
Reporting Act.'' Paper presented at the NCCC-134 Conference on
Applied Commodity Price Analysis, Forecasting, and Market Risk
Management, St. Louis, Missouri, April 17-18, 2006.
---------------------------------------------------------------------------
Benefits. One of the fundamental conditions underlying the theory
of competitive markets is that market participants possess relevant
information necessary to make the correct economic decisions. This rule
seeks to ensure market transparency by providing current and potential
participants in livestock and meat markets with timely, accurate, and
comprehensive information about prices paid and received for livestock
and meat products. Market transparency facilitates market efficiency by
reducing search costs for market participants and by reducing risk and
uncertainty. Widely available market information reduces the time and
resources that market participants would otherwise expend to assess
current market conditions. With reliable market information, market
participants can make informed marketing decisions and thus reduce
exposure to risks associated with buying or selling at prices
inconsistent with the prevailing market norms. Unrestricted
availability of market information may also contribute to
considerations of equity and fairness in the marketplace. Unrestricted
dissemination of market news reporting provides all market participants
with comparable access to current market information regardless of the
size or financial resources of their respective operations.
Livestock mandatory reporting under this rule will provide
comprehensive information on slaughter livestock, beef, and lamb meat
prices. Using the information submitted by packers under the provisions
of the 1999 Act, AMS publishes over 100 daily, weekly, and monthly
reports covering market transactions for fed cattle, swine, lamb, beef,
and lamb meat. Based on the information available, AMS estimates that
reports issued under LMR cover approximately 95 percent of slaughter
hogs, 77 percent of the slaughter cattle, 60 percent of slaughter
sheep, 41 percent of boxed lamb, 26 percent of the carcass lamb, and 93
percent of boxed beef. AMS market reports are utilized by producers and
others in the marketing chain to formulate contracts and make marketing
decisions, and by Government agencies to make policy decisions, address
trade disputes, and in a variety of other functions. For example, AMS
Market News data played a key role in the analysis conducted by the
U.S. International Trade Commission as part of its investigation of
live swine imports from Canada, which was released in April 2005.
Despite the fundamental role played by price information in
underpinning fair, competitive, and efficient markets, quantifying the
impact of mandatory livestock reporting is difficult. There is a
considerable economic literature addressing the value of information,
but little research on the economics of market reporting in and of
itself.\5\ Research mainly has addressed the accuracy and adequacy of
price reporting, but no published works have been identified that
monetize the benefits of mandatory reporting programs such as that
contained in this rule.
---------------------------------------------------------------------------
\5\ Ward, op. cit.
---------------------------------------------------------------------------
Costs. This rule is strictly an informational measure and does not
impose any restrictions on the form, timing, or location of procurement
and sales arrangements in which subject packers and importers may
engage. The rule places no additional limitations on current or future
business relationships into which affected firms may enter, although
other local, State, and Federal laws and regulations regarding such
relationships continue to apply. Therefore, costs of the rule are
simply the costs associated with system development and maintenance,
data submission, and recordkeeping activities of the packers and
importers that will be required to report information under this rule,
plus the costs to the Federal government for operation of the program.
Although this rule is not identical to the 2000 final rule, most of
the regulatory provisions are the same or only slightly modified from
that rule. As such, costs for firms subject to the rule will be similar
to costs required to comply with the 2000 final rule. Hence, the
methods for developing the cost estimates presented in this impact
analysis largely follow from the methods used in developing the cost
estimates contained in the final impact analysis published in the
Federal Register along with the 2000 final rule. As applicable,
estimates of employer costs for employee compensation are updated using
recent statistics from the Bureau of Labor Statistics.
For reporting packers and importers, there are essentially three
phases required to comply with this rule:
[[Page 28622]]
(1) Development or modification of a system for electronic reporting of
data and periodic system maintenance, updating, and compliance; (2)
ongoing submission of required data; and (3) maintenance of records for
a period of 2 years following submission of data to AMS. AMS estimates
that most costs associated with this rule will result from costs
associated with ongoing submission of required data. As explained
below, AMS expects that there will be relatively low costs imposed on
reporting packers and importers for program startup, systems
maintenance and updating, and records maintenance.
AMS estimates that approximately 65 packers and importers,
representing approximately 115 plants or establishments, will be
required to submit information under this rule. However, most of these
firms already have established systems for reporting information to AMS
because they were subject to the requirements of the program when it
was in effect from 2001 through 2005. Moreover, most firms have
continued to report data voluntarily to AMS during the period that the
Act expired on September 30, 2005, to the present. These firms will
need to modify their current data reporting systems to be compatible
with the requirements of the rule.
AMS estimates that there will be an average of about three
additional packers and importers annually that will reach the size
thresholds for reporting under this rule, but that had not previously
reported under the requirements of the Act. Some of these firms will be
new entrants to the industry and others will have increased their
slaughter volume to the level at which they are required to submit data
under the requirements of the law and this rule. These firms will need
to develop an electronic interface to translate the information from
their existing computerized recordkeeping systems into the standardized
format required for automated submission of the data to AMS. Firms with
existing reporting systems will need to modify the electronic interface
to accommodate changes in reporting requirements. AMS estimates that 15
hours of development and computer programming time per plant will be
required to develop or modify the interface.
Electronic data transmission of information is accomplished using
an interface with an existing electronic recordkeeping system. In most
cases, the information packers and importers are required to report
already exists in internal computerized recordkeeping systems. Packers
and importers will provide for the translation of the information from
their existing electronic recordkeeping system into the required AMS
standardized format. Once accomplished, the information will be
electronically transmitted to AMS where it will be automatically loaded
into an AMS database. AMS estimates that the development and computer
programming to establish and maintain this interface will require an
industry average of 15 hours per respondent per year. AMS estimates the
employer costs for employee total compensation per hour to average
$44.82, which is the average for all civilian management, professional,
and related occupations for the second quarter of 2006 according to the
Bureau of Labor Statistics. The management, professional, related
occupations category includes the managers who will oversee development
and maintenance of the electronic interface and the computer systems
and programming personnel who will actually implement and maintain the
interface. With 15 hours of time, AMS estimates the total cost, on
average, for the electronic interface development and maintenance to be
$672.30 per year.
Electronic Submission Development and Annual System Maintenance Cost per
Respondent
------------------------------------------------------------------------
------------------------------------------------------------------------
Hours to develop and maintain interface.................... 15
Employee compensation cost per hour........................ x $44.82
------------
Total annual cost per respondent....................... $672.30
------------------------------------------------------------------------
* Hours required annually to develop and maintain electronic interface
between existing company electronic recordkeeping system and AMS
required electronic submission format.
Additionally, AMS estimates the annual cost per respondent for the
storage of the electronic data files submitted to AMS in compliance
with the reporting provisions of this rule to be $1,923.10 (see
Paperwork Reduction Act section for a full discussion). This estimate
includes the cost of electronic data storage media, backup electronic
data storage media, and backup software required to maintain an
estimated annual electronic recordkeeping and backup burden of 20
megabytes, on average, per respondent. In addition, this estimate
includes the cost per employee to maintain such records which is
estimated to average 70 hours per year at $21.33 per hour for a total
employee compensation component cost of $1,493.10 per year. For this
record maintenance activity, AMS estimates the employer costs for
employee total compensation per hour to average $21.33, which is the
average for all civilian office and administrative support occupations
for the second quarter of 2006 according to data from the Bureau of
Labor Statistics.
Annual Recordkeeping Cost per Respondent
------------------------------------------------------------------------
------------------------------------------------------------------------
Labor hours per year....................................... 70
Labor cost per hour........................................ x $21.33
------------
Sub-total labor cost per year.......................... $1,493.10
Electronic storage cost *.............................. + $430.00
------------
Total Recordkeeping Cost........................... $1,923.10
------------------------------------------------------------------------
* Includes cost of hard electronic storage (estimated to average 20
megabytes/year), backup media, backup drive, and backup software.
[[Page 28623]]
In this rule, information collection requirements include the
submission of the required information on a daily and weekly basis in
the standard format provided in the following forms: (1) Live Cattle
Daily Report (Current Established Prices), (2) Live Cattle Daily Report
(Committed and Delivered Cattle), (3) Live Cattle Weekly Report, (4)
Cattle Premiums and Discounts Weekly Report, (5) Cow/Bull Plant
Delivered Bids (Dressed Basis), (6) Live Cow/Bull Daily Purchase
Report, (7) Boxed Beef Daily Report, (8) Swine Prior Day Report, (9)
Swine Daily Report, (10) Swine Noncarcass Merit Premium Weekly Report,
(11) Live Lamb Daily Report (Current Established Prices), (12) Live
Lamb Weekly Report, (13) Live Lamb Weekly Report (Formula Purchases),
(14) Lamb Premiums and Discounts Weekly Report, (15) Boxed Lamb Daily
Report, and (16) Lamb Carcass Report. Copies of these 16 forms are
included in Appendices at the end of this rule.
Cattle packers will utilize up to seven of these forms (Appendix A)
when reporting information to AMS including two for daily cattle
reporting, three for weekly cattle reporting, and one for daily boxed
beef cuts reporting. AMS estimates the total data submission cost
burden to cattle packers to be $237,734. In comparison, the annual data
submission cost burden to cattle packers was estimated at $266,560 in
the 2000 final rule, which took effect in April 2001. According to the
Bureau of Labor Statistics CPI inflation calculator, $1.00 in 2001 has
the same buying power as $1.17 today. More precisely, the inflation
factor to convert the average Consumer Price Index for 2001 to the
current (May 2008) value is 1.174. In current dollar terms, then, the
estimated data submission cost burden to cattle packers under the 2000
final rule equals $312,941. Thus, the total data submission cost burden
to cattle packers is estimated at $75,207 less in the rule compared to
the 2000 final rule expressed in comparable current dollar terms.
Swine packers will utilize up to three forms (Appendix B), two for
daily reporting of swine purchases and one for weekly reporting of non-
carcass merit premium information. AMS estimates the total data
submission cost burden to swine packers to be $153,329. In comparison,
the annual data submission cost burden to swine packers was estimated
at $166,400 in the 2000 final rule. In current dollar terms using the
CPI inflation calculator, the estimated data submission cost burden to
swine packers under the 2000 final rule will be $195,354. Thus, the
total data submission cost burden to swine packers is estimated at
$42,025 less in the rule compared to the 2000 final rule expressed in
comparable current dollar terms.
Lamb packers will utilize up to six of these forms (Appendix C)
when reporting information to AMS including two for daily lamb
reporting, three for weekly lamb reporting, one for daily and weekly
boxed lamb cuts reporting and one for daily and weekly lamb carcass
reporting. Lamb importers will utilize one of these forms when
reporting information to AMS for reporting weekly imported boxed lamb
cut sales. AMS estimates the total data submission cost burden to lamb
packers and lamb importers to be $31,846. In comparison, the annual
data submission cost burden to lamb packers and lamb importers was
estimated at $48,390 in the 2000 final rule. In current dollar terms
using the CPI inflation calculator, the estimated data submission cost
burden to lamb packers and lamb importers under the 2000 final rule
will be $56,810. Thus, the total data submission cost burden to lamb
packers and lamb importers is estimated at $24,964 less in the rule
compared to the 2000 final rule expressed in comparable current dollar
terms.
The cost estimates for the rule are discussed in detail in the
Paperwork Reduction Act Section.
Breakdown of Estimated Data Submission Cost Burden
I. Number of Responses per Respondent per Year
----------------------------------------------------------------------------------------------------------------
Reporting Total
Form days Responses responses
----------------------------------------------------------------------------------------------------------------
Cattle:
LS-113..................................... 260 x 2 daily = 520
LS-114..................................... 260 x 2 daily = 520
LS-115..................................... 52 x 1 weekly = 52
LS-117..................................... 52 x 1 weekly = 52
LS-126..................................... 260 x 2 daily = 520
LS-131..................................... 260 x 1 daily = 260
LS-132..................................... 260 x 1 daily = 260
Swine:
LS-118..................................... 260 x 1 daily = 260
LS-119..................................... 260 x 2 daily = 520
LS-120..................................... 52 x 1 weekly = 52
Lamb:
Domestic:
LS-121..................................... 260 x 1 daily = 260
LS-123..................................... 52 x 1 weekly = 52
LS-124..................................... 52 x 1 weekly = 52
LS-125..................................... 52 x 1 weekly = 52
LS-128..................................... 260 x 1 daily = 260
LS-129..................................... 260 x 1 daily = 260
Importer:
LS-128..................................... 52 x 1 weekly = 52
----------------------------------------------------------------------------------------------------------------
[[Page 28624]]
II. Number of Submission Hours per Respondent per Year
----------------------------------------------------------------------------------------------------------------
Total
Form Submissions/ Hours/ hours/
year submission year
----------------------------------------------------------------------------------------------------------------
Cattle:
LS-113....................................................... 520 x .17 = 88.40
LS-114....................................................... 520 x .17 = 88.40
LS-115....................................................... 52 x .25 = 13.00
LS-117....................................................... 52 x .08 = 4.16
LS-126....................................................... 520 x .125 = 65.00
LS-131....................................................... 260 x .08 = 20.80
LS-132....................................................... 260 x .17 = 44.20
Swine:
LS-118....................................................... 260 x .25 = 65.00
LS-119....................................................... 520 x .17 = 88.40
LS-120....................................................... 52 x .25 = 13.00
Lamb:
Domestic:
LS-121....................................................... 260 x .34 = 88.40
LS-123....................................................... 52 x .25 = 13.00
LS-124....................................................... 52 x .25 = 13.00
LS-125....................................................... 52 x .08 = 4.16
LS-128....................................................... 260 x .167 = 43.42
LS-129....................................................... 260 x .167 = 43.42
Importer:
LS-128....................................................... 52 x .084 = 4.37
----------------------------------------------------------------------------------------------------------------
III. Total Submission Cost per Respondent per Year
------------------------------------------------------------------------
Total Total
Form hours/ Cost/ dollars/
year hour year
------------------------------------------------------------------------
Cattle:
LS-113.................... 88.40 x $21.33 = $1,886
LS-114.................... 88.40 x 21.33 = 1,886
LS-115.................... 13.00 x 21.33 = 277
LS-117.................... 4.16 x 21.33 = 89
LS-126.................... 65.00 x 21.33 = 1,386
LS-131.................... 20.80 x 21.33 = 444
LS-132.................... 44.20 x 21.33 = 943
-----------------------------------------
Totals................ 323.96 x 21.33 = 6,911
------------------------------------------------------------------------
Swine:
LS-118.................... 65.00 x 21.33 = 1,386
LS-119.................... 88.40 x 21.33 = 1,886
LS-120.................... 13.00 x 21.33 = 277
-----------------------------------------
Totals................ 166.40 x 21.33 = 3,549
------------------------------------------------------------------------
Lamb:
Domestic:
LS-121.................... 88.40 x 21.33 = 1,886
LS-123.................... 13.00 x 21.33 = 277
LS-124.................... 13.00 x 21.33 = 277
LS-125.................... 4.16 x 21.33 = 89
LS-128.................... 43.42 x 21.33 = 926
LS-129.................... 43.42 x 21.33 = 926
Importer:
LS-128.................... 4.37 x 21.33 = 93
-----------------------------------------
Totals................ 209.77 x 21.33 = 4,474
------------------------------------------------------------------------
IV. Total Yearly Submission Cost for All Respondents
----------------------------------------------------------------------------------------------------------------
Total
Form dollars/ Respondents Total
year cost
----------------------------------------------------------------------------------------------------------------
Cattle:
LS-113....................................................... $1,886 x 34 = $64,124
LS-114....................................................... 1,886 x 34 = 64,124
[[Page 28625]]
LS-115....................................................... 277 x 34 = 9,418
LS-117....................................................... 89 x 34 = 3,026
LS-126....................................................... 1,386 x 48 = 66,528
LS-131....................................................... 444 x 22 = 9,768
LS-132....................................................... 943 x 22 = 20,746
----------------------------------------------
Subtotal................................................. ......... .. .............. .. 237,734
----------------------------------------------------------------------------------------------------------------
Swine:
LS-118....................................................... 1,386 x 52 = 72,072
LS-119....................................................... 1,886 x 40 = 75,440
LS-120....................................................... 277 x 21 = 5,817
----------------------------------------------
Subtotal................................................. ......... .. .............. .. 153,329
----------------------------------------------------------------------------------------------------------------
Lamb:
Domestic:
LS-121....................................................... 1,886 x 6 = 11,316
LS-123....................................................... 277 x 5 = 1,385
LS-124....................................................... 277 x 5 = 1,385
LS-125....................................................... 89 x 6 = 534
LS-128....................................................... 926 x 10 = 9,260
LS-129....................................................... 926 x 8 = 7,408
Importer:
LS-128....................................................... 93 x 6 = 558
----------------------------------------------
Subtotal................................................. ......... .. .............. .. 31,846
==============================================
Grand total.......................................... ......... .. .............. .. 422,909
----------------------------------------------------------------------------------------------------------------
The total cost burden to packers and importers required to submit
information under this rule includes initial startup and annual
maintenance costs for electronic submission of data, annual
recordkeeping costs, and annual data submission costs. Total reporting
costs to cattle packers are estimated to be $7,548 per plant, $5,544
for swine packers, $5,724 for lamb slaughtering plants, and $2,688 for
lamb importers. In comparison, total reporting costs in the 2000 final
rule were estimated to be $7,420 per plant for cattle packers, $5,308
for swine packers, $7,860 for lamb slaughtering plants, and $2,070 for
lamb importers. In current dollar values, however, estimated costs in
the 2000 final rule equal $8,711 per plant for cattle packers, $6,232
for swine packers, $9,228 for lamb slaughtering plants, and $2,430 for
lamb importers. With the exception of lamb importers which have an
increase of $258, estimated total reporting costs per plant for all
respondents are lower in the rule than in the 2000 final rule expressed
in comparable current dollar values.
Total Annual Cost Burden to Respondents
----------------------------------------------------------------------------------------------------------------
Cost per Number of Total cost
respondent respondents *
----------------------------------------------------------------------------------------------------------------
Cattle:
Startup/Maintenance.................................... $672 x 48 = $32,256
Recordkeeping.......................................... 1,923 x 48 = 92,304
Data Submission........................................ 4,953 x 48 = 237,734
-----------
.............. .. ............... .. 362,294
Average Cost per Respondent: $362,294 / 48 = $7,548
----------------------------------------------------------------------------------------------------------------
Swine:
Startup/Maintenance.................................... 672 x 52 = 34,944
Recordkeeping.......................................... 1,923 x 52 = 99,996
Data Submission........................................ 2,949 x 52 = 153,329
-----------
.............. .. ............... .. 288,269
Average Cost per Respondent: $288,269 / 52 = $5,544
----------------------------------------------------------------------------------------------------------------
Lamb:
Domestic:
Startup/Maintenance.................................... 672 x 10 = 6,720
Recordkeeping.......................................... 1,923 x 10 = 19,230
Data Submission........................................ 3,129 x 10 = 31,288
-----------
[[Page 28626]]
.............. .. ............... .. 57,238
Average Cost per Respondent: $57,238 / 10 = $5,724
----------------------------------------------------------------------------------------------------------------
Importer:
Startup/Maintenance.................................... 672 x 6 = 4,032
Recordkeeping.......................................... 1,923 x 6 = 11,538
Data Submission........................................ 93 x 6 = 558
-----------
.............. .. ............... .. 16,128
Average Cost per Respondent: $16,128 / 6 = $2,688
----------------------------------------------------------------------------------------------------------------
Grand total, all species....................... .............. .. ............... .. 723,929
----------------------------------------------------------------------------------------------------------------
* Totals may reflect differences in numerical rounding.
In addition to these costs to packers for submitting information,
the mandatory price reporting program will cost approximately $6.3
million per fiscal year to the Federal government. The 50 staff years
required to administer and produce high quality mandatory price reports
include reporters, auditors, clerical personnel, and computer
specialists. These employees will be located in three AMS offices
located across the country. Salary-related costs are estimated at $4.9
million per year. Other costs include approximately $.3 million for
travel and transportation; and $1.1 million for miscellaneous costs
such as office space, utilities, communications costs, printing,
training, office supplies, equipment (including computers, software,
and licenses), and contractual services necessary to maintain the
system. In the 2000 final rule, costs to the Federal government for the
program were estimated at $5.9 million for fiscal year 2001, which
equals $6.9 million in current dollar value. Thus, estimated costs to
the Federal government are $600,000 less in the rule compared to the
2000 final rule expressed in current dollar values.
The authority for the Act expires on September 30, 2010. Therefore,
this rule will be effective for approximately 3 years (2008-2010).
Annual costs for this rulemaking are estimated at approximately $7.0
million per year: $723,929 for respondents to submit and maintain data
plus $6.3 million to USDA for operation of the LMR program. At a real
discount rate of 3 percent, the discounted present value of the total
cost to the private sector and the Federal government for the life of
the program will be nearly $20.5 million. Using estimated costs from
the 2000 final rule and assuming the same 3-year duration, the
comparable discounted present value for the life of the program would
be over $22.6 million expressed in current dollars. Thus, estimated
total program costs are reduced by nearly $2.1 million over the life
cycle of the rule in comparison to the 2000 final rule at the 3 percent
discount rate. At a real discount rate of 7 percent, the discounted
present value of the total cost to the private sector and the Federal
government for the life of the program will be $19.7 million. Using
estimated costs from the 2000 final rule and assuming the same 3-year
duration, the comparable discounted present value for the life of the
program would be $21.8 million expressed in current dollars. Estimated
total program costs are reduced by $2.1 million over the life cycle of
the rule in comparison to the 2000 final rule at the 7 percent discount
rate. The present values for the 3-year life of the program assume that
all costs are incurred at the beginning of each year of the program.
Regulatory Flexibility Act
In General. This rule has been reviewed under the requirements of
the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). The
purpose of the RFA is to consider the economic impact of a rule on
small business entities. Alternatives, which would accomplish the
objectives of the rule without unduly burdening small entities or
erecting barriers that would restrict their ability to compete in the
marketplace, have been evaluated. Regulatory action should be
appropriate to the scale of the businesses subject to the action. The
collection of information is necessary for the proper performance of
the functions of AMS concerning the mandatory reporting of livestock
information. The Act requires AMS to collect and publish livestock
market information. The required information is only available directly
from those entities required to report under these regulations and
exists nowhere else. Therefore, this rule does not duplicate market
information reasonably accessible to the Agency.
Objectives and Legal Basis. The objective of this rule is to
improve the price and supply reporting services of USDA in order to
increase the amount of information available to participants. This is
accomplished through the establishment of a program of information
regarding the marketing of cattle, swine, lambs, and products of such
livestock as specifically directed by the Reauthorization Act and these
regulations, as described in detail in the background section.
Estimated Number of Small Businesses. AMS estimates that
approximately 65 firms operating approximately 115 plants will be
required to report market information under this rule. AMS estimates
that 60 of these firms represent cattle, swine, and sheep slaughtering
companies, with approximately 5 additional firms that import lamb
carcasses and lamb meat.
According to Small Business Administration (SBA) definitions, a
meat packing firm having fewer than 500 employees is a small business.
This criterion applies to most of the firms required to report under
the rule, including all of the cattle and swine packers. Some of the
lamb importers required to report under this rule are brokerage
operations that do not slaughter lambs. For meat and meat product
merchant wholesalers, the SBA defines a firm having fewer than 100
employees as a small business.
In formulating this rule, particular consideration was given to
reducing the burden on entities while still achieving the objectives of
the rule. Under the rule, thresholds are set that define those entities
that are required to report information on purchases of live cattle,
swine and lambs, as well as information on domestic and export sales of
boxed beef cuts including applicable branded product, and sales of lamb
carcasses,
[[Page 28627]]
boxed lamb cuts including applicable branded product, and imported
boxed lamb cuts including applicable branded product.
These packers and importers are required to report to AMS the
details of all transactions involving purchases of livestock, domestic
and export sales of boxed beef cuts including applicable branded
product, sales of domestic boxed lamb cuts including applicable branded
product, imported boxed lamb cuts including applicable branded product,
and lamb carcasses. Cattle and swine information will be reported to
AMS according to the schedule directed by this rule with purchases of
swine reported three times each day, purchases of cattle twice each
day, and sales of domestic and exported boxed beef cuts, including
applicable branded product, reported twice each day. Lamb information
will be reported to AMS according to the schedule mandated by this rule
with purchases of lambs reported once each day and sales of lamb
carcasses reported once each day. Previous week sales of imported boxed
lamb cuts including applicable branded boxed lamb cuts will be reported
once weekly on the first reporting day of the week.
In any calendar year, only Federally inspected cattle plants that
slaughtered an average of 125,000 head of cattle a year for the
immediately preceding 5 calendar years are required to report.
Additionally, any Federally inspected cattle plant that did not
slaughter cattle during the immediately preceding 5 calendar years is
required to report if the Secretary determines that the plant should be
considered a packer required to report based on its capacity. For
entities that did not slaughter cattle during the immediately preceding
5 calendar years, such as a new plant or existing plant that resumes
operations, the AMS will project the plant's annual slaughter or
production based upon the plant's estimate of annual slaughter capacity
to determine which entities meet the definition of a packer as defined
in the law and these regulations. This accounts for an expected 49 out
of 636 Federally inspected cattle plants or 7.7 percent of all
Federally inspected cattle plants.
For any calendar year, any Federally inspected swine plant that
slaughtered an average of 100,000 head of swine a year for the
immediately preceding 5 calendar years is required to report
information, as is any person that slaughtered an average of at least
200,000 sows, boars, or any combination thereof, per year during the
immediately preceding 5 calendar years. Additionally, any Federally
inspected swine plant or person that did not slaughter swine during the
immediately preceding 5 calendar years if the Secretary determines that
the plant should be considered a packer based on the capacity of the
processing plant is required to report. This accounts for an expected
52 out of 614 Federally inspected swine plants or 8.5 percent of all
Federally inspected swine plants.
In any calendar year, a Federally inspected lamb plant that
slaughtered the equivalent of an average of 75,000 head of lambs a year
for the immediately preceding 5 calendar years is considered a packer
and required to report. A packer includes a Federally inspected
processing plant that purchases and processes an average of 75,000 lamb
carcasses annually rather than slaughter live lambs. Additionally, any
Federally inspected processing plant that did not slaughter an average
of 75,000 lambs during the immediately preceding 5 calendar years if
the Secretary determines that the plant should be considered a packer
based on the capacity of the processing plant is required to report.
This accounts for an expected 10 lamb plants and 6 importers. The
expected total of 10 out of 484 lamb plants amounts to 2.1 percent of
all Federally inspected lamb plants.
For any calendar year, lamb importers that imported an average of
2,500 metric tons of lamb meat products per year during the immediately
preceding 5 calendar years are required to report. Additionally, any
lamb importer that did not import an average of 2,500 metric tons of
lamb meat products during the immediately preceding 5 calendar years if
the Secretary determines that the person should be considered an
importer based on the volume of lamb imports is required to report.
Some lamb plants may also be importers.
An estimated 92.3 percent of all Federally inspected cattle plants,
91.5 percent of all Federally inspected swine plants, and 97.9 percent
of all Federally inspected lamb plants in the U.S. are exempted by this
rule from reporting information. For all livestock species, there were
793 slaughter plants under Federal inspection and 2,060 slaughter
plants under other forms of inspection (such as State inspection) on
January 1, 2007. Plants that are not under Federal inspection are
smaller operations that would be considered small businesses. An
estimated 110 livestock slaughter plants will be required to report
under this rule. Conversely, 2,743 or 96.1 percent of all livestock
plants in the United States will be exempt from mandatory reporting
under this rule.
According to U.S. Census Bureau Statistics of U.S. Businesses,
there were 1,718 animal (except poultry) slaughtering \6\ firms with
payroll in the United States in 2004. These firms operated 1,816
establishments. Of these concerns, there were 46 firms with 500
employees or more, accounting for 136 establishments. Conversely, there
were 1,672 firms with fewer than 500 employees, accounting for 1,680
establishments.
---------------------------------------------------------------------------
\6\ North American Industry Classification System (NAICS) code
311611. U.S. Census Bureau 2004 Nonemployer Statistics show that
there were 1,921 nonemployer establishments in the animal
slaughtering and processing industry (NAICS code 31161), but
nonemployer statistics at the more disaggregated NAICS six-digit
level are not reported. A nonemployer is a business without paid
employees that is subject to federal income tax. Most nonemployers
are self-employed individuals operating very small unincorporated
businesses. The NASS data on the number of livestock slaughter
plants includes businesses with payroll as well as nonemployer
firms, but does not report the size of firms nor the number of
employees. Therefore, the NASS data provides the most accurate
measure of the number of businesses potentially subject to the rule,
while the Census Bureau data provide a means for estimating the
number of small businesses potentially subject to the rule.
---------------------------------------------------------------------------
The companies required to report under the Act and this rule
represent the largest slaughtering operations in each respective
species. This rule will require mandatory reporting by an estimated 60
livestock slaughtering firms representing the largest cattle, swine,
and sheep slaughtering companies. This fact, coupled with the
Statistics of U.S. Businesses data leads to the conclusion that 46 of
the livestock slaughtering firms required to report under this rule
have 500 employees or more. Therefore, AMS estimates that 14 of the 60
livestock slaughtering firms required to report under this rule are
small businesses as defined by SBA. In percentage terms, about 23
percent of the animal slaughtering companies required to report under
this rule are small businesses. In terms of the industry, this rule
requires reporting by only 0.8 percent of all small businesses in the
animal (except poultry) slaughtering industry. Moreover, the firms
required to report are the largest of the firms in the industry
classified as small businesses.
U.S. Census Bureau statistics are not sufficiently disaggregated to
enable inferences to be drawn about the small business classification
of the lamb carcass and lamb meat importers required to report under
the rule. However, based on its knowledge of the industry and previous
experience with livestock mandatory reporting, AMS estimates that all
of the lamb importers would be classified as small businesses
[[Page 28628]]
under the SBA size standard of fewer than 100 employees for meat and
meat product merchant wholesalers.\7\ In combination with the animal
slaughtering firms, AMS estimates that a total of 19 firms out of 65
firms required to report under this rule meet the SBA definition for
small businesses. In percentage terms, about 29 percent of the firms
required to report under this rule would be classified as small
businesses. Although classified as small businesses, these firms are
the largest firms in their respective specialties.
---------------------------------------------------------------------------
\7\ North American Industry Classification System code 424470.
---------------------------------------------------------------------------
Projected Reporting. This rule requires the reporting of specific
market information regarding the buying and selling of livestock and
livestock products. The information will be reported to AMS by
electronic means. Electronic reporting involves the transfer of data
from a packer's or importer's electronic recordkeeping system to a
centrally located AMS electronic database. The packer or importer is
required to organize the information in an AMS-approved format before
electronically transmitting the information to AMS (Appendices A-C).
Once the required information has been entered into the AMS
database, it will be aggregated and processed into various market
reports which will be released according to the daily and weekly time
schedule set forth in these regulations.
As an alternative, based on prior experience, AMS found that some
of the smaller entities covered under mandatory reporting would benefit
from a web-based system for data submission. Accordingly, AMS developed
a system that will be available to firms that find it to be more cost
effective than developing an electronic interface to submit data to
AMS.
AMS estimates the total annual burden on each cattle packer and
boxed beef processing firm to average $7,548, including $4,953 for
annual costs associated with electronically submitting data, $672 for
startup/annual maintenance costs, and $1,923 for the storage and
maintenance of electronic files that were submitted to AMS. This figure
was calculated by estimating the time required to complete the
necessary data submission and factoring by the number of times
reporting is required per day for an estimated total of 260 reporting
days in a year (see Paperwork Reduction Act section for a complete,
detailed discussion). Because data submission costs are directly
associated with the volume of data submissions, total annual costs for
smaller operations likely will be less than the average, while costs
for larger operations likely will exceed the average.
AMS estimates the total annual burden on each swine packing firm to
be $5,544, including $2,949 for annual costs associated with
electronically submitting data, $672 for startup/annual maintenance
costs, and $1,923 for the storage and maintenance of electronic files
that were submitted to AMS. This estimate does not include costs
associated with reporting sales of pork products, which are not
required to be reported. As with cattle packers, annual costs for
smaller swine packing operations likely will be less than the average,
while costs for larger operations likely will exceed the average.
AMS estimates the total annual burden on each lamb packer to be
$5,724 including $3,129 for annual costs associated with electronically
submitting data, $672 for startup/annual maintenance costs, and $1,923
for the storage and maintenance of electronic files that were submitted
to AMS. AMS estimates the total annual burden on each importer of lamb
to be $2,688, including $93 for annual costs associated with
electronically submitting data, $672 for startup/annual maintenance
costs, and $1,923 for the storage and maintenance of electronic files
that were submitted to AMS.
Projected Recordkeeping. Each packer and importer required to
report information to the Secretary must maintain such records as are
necessary to verify the accuracy of the information provided to AMS.
This includes information regarding price, class, head count, weight,
quality grade, yield grade, and other factors necessary to adequately
describe each transaction. These records are already kept by the
industry. Reporting packers and importers are required by these
regulations to maintain and to make available the original contracts,
agreements, receipts, and other records associated with any transaction
relating to the purchase, sale, pricing, transportation, delivery,
weighing, slaughter, or carcass characteristics of all livestock.
Reporting packers and importers are also required to maintain copies of
the information provided to AMS. All of the above-mentioned paperwork
must be kept for at least 2 years. Packers and importers are not
required to report any other new or additional information that they do
not generally have available or maintain. Further, they are not
required to keep any information that would prove unduly burdensome to
maintain. The paperwork burden that is imposed on the packers and
importers is further discussed in the section entitled Paperwork
Reduction Act that follows.
In addition, AMS has not identified any relevant Federal rules that
are currently in effect that duplicate, overlap, or conflict with this
rule. AMS will continue to report market information collected through
its voluntary market reporting program provided the collection of such
information does not duplicate the information collection requirements
of this rule.
Professional skills required for recordkeeping under this rule are
not different than those already employed by the reporting entities.
Reporting will be accomplished using computers or similar electronic
means. AMS believes the skills needed to maintain such systems are
already in place in those small businesses affected by this rule.
Alternatives. This rule, as directed by the Reauthorization Act,
requires cattle and swine packing plants of a certain size to report
information to the Secretary at prescribed times throughout the day and
week. Further, lamb slaughter and processing plants and lamb importers
of a certain size are required by these regulations to report
information to the Secretary at prescribed times throughout the day and
week. The Act and these regulations exempt the vast majority of small
businesses by the establishment of slaughter, processing, and import
capacity thresholds.
AMS recognizes that most economic impact of this rule on those
small entities required to report involves the manner in which
information must be reported to the Secretary. However, in developing
this rule, AMS considered other means by which the objectives of this
rule could be accomplished, including reporting the required
information by telephone, facsimile and regular mail. AMS believes
these alternatives are not capable of meeting the program objectives,
especially timely reporting. The Reauthorization Act prescribes
specific times that reporting entities must report to AMS and similarly
prescribes specific times for publication of reports by AMS. AMS
believes electronic submission to be the only method capable of
allowing AMS to collect, review, process, aggregate and publish reports
while complying with the specific time-frames set forth in the Act.
To respond to concerns of smaller operations, AMS developed a web-
based input form for submitting data online. Based on prior experience,
AMS found that some of the smaller entities covered under mandatory
price reporting would
[[Page 28629]]
benefit from such a web-based submission system. Accordingly, AMS
developed such a system for program implementation.
Additionally, to further assist small businesses, AMS may provide
for an exception to electronic reporting in emergencies, such as power
failures or loss of Internet accessibility, or in cases when an
alternative is agreeable to AMS and the reporting entity.
Other than these alternatives, there are no other practical and
feasible alternatives to the methods of data transmission that are less
burdensome to small businesses. AMS will work actively with those small
businesses required to report to minimize the burden on them to the
maximum extent practicable.
To assist the industry in achieving compliance with this rule,
during the period between publication of this rule and its effective
date, AMS will provide assistance and training to covered entities as
needed to ensure that they have been given the technical information
necessary to comply with the electronic data transmission requirements.
Paperwork Reduction Act
In accordance with OMB regulation (5 CFR part 1320) that implements
the Paperwork Reduction Act (44 U.S.C. 3501-3520) (PRA), the
information collection requirements associated with this program have
been approved by OMB and assigned OMB control number 0581-0186. In
accordance with 5 CFR part 1320, we have included below a description
of the reporting and recordkeeping requirements and an estimate of the
annual burden on packers that will be required to report information
under this rule.
Title: Livestock Mandatory Reporting Act of 1999.
OMB Number: 0581-0186.
Expiration Date: December 31, 2007.
Type of Request: Revision of currently approved information
collection.
Abstract: The information collection and recordkeeping requirements
in this regulation are essential to operating a mandatory program of
livestock and livestock products reporting. Based on the information
available, AMS estimates that there are 48 beef packer plants, 52 pork
packer plants, 12 lamb packer plants and 6 lamb importers that are
required to report market information under this rule (1 lamb entity is
both a packer and an importer). These companies have similar
recordkeeping systems and business operation practices and conduct
their operations in a similar manner. AMS believes that all of the
information required under this rule can be collected from existing
materials and systems. In addition, most of these firms already have
established systems for reporting information to AMS because they were
subject to the requirements of the program when it was in effect from
April 2, 2001, through September 30, 2005. Moreover, most firms have
continued to report data voluntarily to AMS. These firms will have
minimal startup costs, requiring only minor modifications of their
current data reporting systems to be compatible with the requirements
of the rule. The PRA also requires AMS to measure the recordkeeping
burden. Under this rule, each packer and importer required to report
must maintain and make available upon request for 2 years, such records
as are necessary to verify the accuracy of the information required to
be reported. These records include original contracts, agreements,
receipts, and other records associated with any transaction relating to
the purchase, sale, pricing, transportation, delivery, weighing,
slaughter, or carcass characteristics of all livestock. Under this
rule, the electronic data files which the packers are required to
utilize when submitting information to AMS will have to be maintained
as these files provide the best record of compliance. The recordkeeping
burden includes the amount of time needed to store and maintain
records. AMS estimates that, since records of original contracts,
agreements, receipts, and other records associated with any transaction
relating to the purchase, sale, pricing, transportation, delivery,
weighing, slaughter, or carcass characteristics of all livestock are
stored and maintained as a matter of normal business practice by these
companies for a period in excess of 2 years, additional annual costs
will be nominal. AMS estimates the annual cost per respondent for the
storage of the electronic data files which were submitted to AMS in
compliance with the reporting provisions of this rule to be $1,923.10.
This estimate includes the cost of electronic data storage media,
backup electronic data storage media, and backup software required to
maintain an estimated annual electronic recordkeeping and backup burden
of 20 megabytes, on average, per respondent. In addition, this estimate
includes the cost per employee to maintain such records which is
estimated to average 70 hours per year at $21.33 per hour for a total
salary component cost of $1,493.10 per year.
Annual Recordkeeping Cost per Respondent
------------------------------------------------------------------------
------------------------------------------------------------------------
Labor hours per year....................................... 70
Labor cost per hour........................................ x $21.33
------------
Sub-total labor cost per year.............................. $1,493.10
Electronic storage cost *.................................. + $430.00
------------
Total Recordkeeping Cost............................... $1,923.10
------------------------------------------------------------------------
* Includes cost of hard electronic storage (estimated to average 20 Mb/
year), backup tape media, backup tape drive, and backup software.
In this rule, information collection requirements include the
submission of the required information on a daily and weekly basis in
the standard format provided in the following forms: (1) Live Cattle
Daily Report (Current Established Prices), (2) Live Cattle Daily Report
(Committed and Delivered Cattle), (3) Live Cattle Weekly Report, (4)
Cattle Premiums and Discounts Weekly Report, (5) Cow/Bull Plant
Delivered Bids (Dressed Basis), (6) Live Cow/Bull Daily Purchase
Report, (7) Boxed Beef Daily Report, (8) Swine Prior Day Report, (9)
Swine Daily Report, (10) Swine Noncarcass Merit Premium Weekly Report,
(11) Live Lamb Daily Report (Current Established Prices), (12) Live
Lamb Weekly Report, (13) Live Lamb Weekly Report (Formula Purchases),
(14) Lamb Premiums and Discounts Weekly Report, (15) Boxed Lamb Daily
Report, and (16) Lamb Carcass Report. Copies of these 16 forms are
included in Appendices at the end of this rule. Cattle packers will
utilize up to seven of these forms (not all cattle packers must submit
all cattle forms) (Appendix A) when reporting information to AMS
including four for
[[Page 28630]]
daily cattle reporting, two for weekly cattle reporting, and one for
daily boxed beef cuts reporting. Swine packers will utilize up to three
forms (not all swine packers must submit all swine forms) (Appendix B),
two for daily reporting of swine purchases and one for weekly reporting
of non-carcass merit premium information. Lamb packers will utilize up
to six of these forms (not all lamb packers must submit all lamb forms)
(Appendix C) when reporting information to AMS, including one for daily
lamb reporting, three for weekly lamb reporting, one for daily and
weekly boxed lamb cuts reporting, and one for daily lamb carcass
reporting. Lamb importers will utilize one of these forms when
reporting information to AMS for reporting weekly imported boxed lamb
cut sales.
These information collection requirements have been designed to
minimize disruption to the normal business practices of the affected
entities. Each of these forms requires the minimal amount of
information necessary to properly describe each reportable transaction,
as required under this rule. The number of forms is a result of an
attempt to reduce the complexity of each form.
Live Cattle Daily Report (Current Established Prices): Form LS-113.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .17 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live cattle purchases to the Secretary.
Estimated Number of Respondents: 34 plants.
Estimated Number of Responses per Respondent: 520 (2 per day for
260 days).
Estimated Total Annual Burden on Respondents: 3,006 hours.
Total Cost: $64,124.
Live Cattle Daily Report (Committed and Delivered Cattle): Form LS-
114.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .17 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live cattle purchases to the Secretary.
Estimated Number of Respondents: 34 plants.
Estimated Number of Responses per Respondent: 520 (2 per day for
260 days).
Estimated Total Annual Burden on Respondents: 3,006 hours.
Total Cost: $64,124.
Live Cattle Weekly Report: Form LS-115.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .25 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live cattle purchases to the Secretary.
Estimated Number of Respondents: 34 plants.
Estimated Number of Responses per Respondent: 52 (1 per week for 52
weeks).
Estimated Total Annual Burden on Respondents: 442 hours.
Total Cost: $9,418.
Cattle Premiums and Discounts Weekly Report: Form LS-117.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .08 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live cattle purchases to the Secretary.
Estimated Number of Respondents: 34 plants.
Estimated Number of Responses per Respondent: 52 (1 per week for 52
weeks).
Estimated Total Annual Burden on Respondents: 141 hours.
Total Cost: $3,026.
Cow/Bull Plant Delivered Bids (Dressed Basis): Form LS-131.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .08 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on bid prices for cows and bulls to the Secretary.
Estimated Number of Respondents: 22 plants.
Estimated Number of Responses per Respondent: 260 (1 per day for
260 days).
Estimated Total Annual Burden on Respondents: 458 hours.
Total Cost: $9,768.
Live Cow/Bull Daily Purchase Report: Form LS-132.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .17 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on cow and bull purchases to the Secretary.
Estimated Number of Respondents: 22 plants.
Estimated Number of Responses per Respondent: 260 (1 per day for
260 days).
Estimated Total Annual Burden on Respondents: 972 hours.
Total Cost: $20,746.
Boxed Beef Daily Report: Form LS-126.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .125 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on domestic and export boxed beef cut sales to the
Secretary.
Estimated Number of Respondents: 48 plants.
Estimated Number of Responses per Respondent: 520 (2 per day for
260 days).
Estimated Total Annual Burden on Respondents: 3,120 hours.
Total Cost: $66,528.
Swine Prior Day Report: Form LS-118.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .25 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live swine purchases to the Secretary.
Estimated Number of Respondents: 52 plants.
Estimated Number of Responses per Respondent: 260 (1 per day for
260 days).
Estimated Total Annual Burden on Respondents: 3,380 hours.
Total Cost: $72,072.
Swine Daily Report: Form LS-119.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .17 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live swine purchases to the Secretary.
Estimated Number of Respondents: 40 plants.
Estimated Number of Responses per Respondent: 520 (2 per day for
260 days).
Estimated Total Annual Burden on Respondents: 3,536 hours.
Total Cost: $75,440.
Swine Noncarcass Merit Premium Weekly Report: Form LS-120.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .25 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live swine purchases to the Secretary.
Estimated Number of Respondents: 21 plants.
Estimated Number of Responses per Respondent: 52 (1 per week for 52
weeks).
Estimated Total Annual Burden on Respondents: 273 hours.
Total Cost: $5,817.
Live Lamb Daily Report (Current Established Prices): Form LS-121.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .34 hours per electronically submitted
response.
[[Page 28631]]
Respondents: Packer processing plants required to report
information on live lamb purchases to the Secretary.
Estimated Number of Respondents: 6 plants.
Estimated Number of Responses per Respondent: 260 (1 per day for
260 days).
Estimated Total Annual Burden on Respondents: 530 hours.
Total Cost: $11,316.
Live Lamb Weekly Report: Form LS-123.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .25 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live lamb purchases to the Secretary.
Estimated Number of Respondents: 5 plants.
Estimated Number of Responses per Respondent: 52 (1 per week for 52
weeks).
Estimated Total Annual Burden on Respondents: 65 hours.
Total Cost: $1,385.
Live Lamb Weekly Report (Formula Purchases): Form LS-124.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .25 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live lamb purchases to the Secretary.
Estimated Number of Respondents: 5 plants.
Estimated Number of Responses per Respondent: 52 (1 per week for 52
weeks).
Estimated Total Annual Burden on Respondents: 65 hours.
Total Cost: $1,385.
Lamb Premiums and Discounts Weekly Report: Form LS-125.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .08 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on live lamb purchases to the Secretary.
Estimated Number of Respondents: 6 plants.
Estimated Number of Responses per Respondent: 52 (1 per week for 52
weeks).
Estimated Total Annual Burden on Respondents: 25 hours.
Total Cost: $534.
Boxed Lamb Report: Form LS-128.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .167 hours per electronically submitted
response for domestic packing plants and .084 hours per electronically
submitted response for importers.
Respondents: Packer processing plants and importers required to
report information on boxed lamb cut sales to the Secretary.
Estimated Number of Respondents: 16 entities (including 1 entity
that both processes and imports).
Estimated Number of Responses per Respondent: 260 (1 per day for
260 days) for domestic packing plants; 52 (1 per week for 52 weeks) for
importers.
Estimated Total Annual Burden on Respondents: 434 hours for
domestic packing plants and 26 hours for importers.
Total Cost: $9,260 for domestic packing plants and $558 for
importers for a total of $9,818.
Lamb Carcass Report: Form LS-129.
Estimate of Burden: Public reporting burden for collection of
information is estimated to be .167 hours per electronically submitted
response.
Respondents: Packer processing plants required to report
information on lamb carcass sales to the Secretary.
Estimated Number of Respondents: 8 entities.
Estimated Number of Responses per Respondent: 260 (1 per day for
260 days).
Estimated Total Annual Burden on Respondents: 347 hours.
Total Cost: $7,408.
Breakdown of Estimated Data Submission Cost Burden
I. Number of Responses per Respondent per Year
----------------------------------------------------------------------------------------------------------------
Reporting Total
Form days Responses responses
----------------------------------------------------------------------------------------------------------------
Cattle:
LS-113..................................... 260 x 2 daily = 520
LS-114..................................... 260 x 2 daily = 520
LS-115..................................... 52 x 1 weekly = 52
LS-117..................................... 52 x 1 weekly = 52
LS-126..................................... 260 x 2 daily = 520
LS-131..................................... 260 x 1 daily = 260
LS-132..................................... 260 x 1 daily = 260
Swine:
LS-118..................................... 260 x 1 daily = 260
LS-119..................................... 260 x 2 daily = 520
LS-120..................................... 52 x 1 weekly = 52
Lamb:
Domestic:
LS-121..................................... 260 x 1 daily = 260
LS-123..................................... 52 x 1 weekly = 52
LS-124..................................... 52 x 1 weekly = 52
LS-125..................................... 52 x 1 weekly = 52
LS-128..................................... 260 x 1 daily = 260
LS-129..................................... 260 x 1 daily = 260
Importer:
LS-128..................................... 52 x 1 weekly = 52
----------------------------------------------------------------------------------------------------------------
[[Page 28632]]
II. Number of Submission Hours per Respondent per Year
----------------------------------------------------------------------------------------------------------------
Submissions/ Hours/ Total
Form year submission hours/ year
----------------------------------------------------------------------------------------------------------------
Cattle:
LS-113....................................................... 520 x .17 = 88.40
LS-114....................................................... 520 x .17 = 88.40
LS-115....................................................... 52 x .25 = 13.00
LS-117....................................................... 52 x .08 = 4.16
LS-126....................................................... 520 x .125 = 65.00
LS-131....................................................... 260 x .08 = 20.80
LS-132....................................................... 260 x .17 = 44.20
Swine:
LS-118....................................................... 260 x .25 = 65.00
LS-119....................................................... 520 x .17 = 88.40
LS-120....................................................... 52 x .25 = 13.00
Lamb:
Domestic:
LS-121....................................................... 260 x .34 = 88.40
LS-123....................................................... 52 x .25 = 13.00
LS-124....................................................... 52 x .25 = 13.00
LS-125....................................................... 52 x .08 = 4.16
LS-128....................................................... 260 x .167 = 43.42
LS-129....................................................... 260 x .167 = 43.42
Importer:
LS-128....................................................... 52 x .084 = 4.37
----------------------------------------------------------------------------------------------------------------
III. Total Submission Cost per Respondent per Year
----------------------------------------------------------------------------------------------------------------
Total Total
Form hours/ Cost/hour dollars/
year year
----------------------------------------------------------------------------------------------------------------
Cattle:
LS-113........................................................ 88.40 x $21.33 = $1,886
LS-114........................................................ 88.40 x 21.33 = 1,886
LS-115........................................................ 13.00 x 21.33 = 277
LS-117........................................................ 4.16 x 21.33 = 89
LS-126........................................................ 65.00 x 21.33 = 1,386
LS-131........................................................ 20.80 x 21.33 = 444
LS-132........................................................ 44.20 x 21.33 = 943
---------------------------------------------
Totals.................................................... 323.96 x 21.33 = 6,911
---------------------------------------------
Swine:
LS-118........................................................ 65.00 x 21.33 = 1,386
LS-119........................................................ 88.40 x 21.33 = 1,886
LS-120........................................................ 13.00 x 21.33 = 277
---------------------------------------------
Totals.................................................... 166.40 x 21.33 = 3,549
---------------------------------------------
Lamb:
Domestic:
LS-121........................................................ 88.40 x 21.33 = 1,886
LS-123........................................................ 13.00 x 21.33 = 277
LS-124........................................................ 13.00 x 21.33 = 277
LS-125........................................................ 4.16 x 21.33 = 89
LS-128........................................................ 43.42 x 21.33 = 926
LS-129........................................................ 43.42 x 21.33 = 926
Importer:
LS-128........................................................ 4.37 x 21.33 = 93
---------------------------------------------
Totals.................................................... 209.77 x 21.33 = 4,474
----------------------------------------------------------------------------------------------------------------
[[Page 28633]]
IV. Total Yearly Submission Cost for All Respondents
----------------------------------------------------------------------------------------------------------------
Total
Form dollars/ Respondents Total cost
year
----------------------------------------------------------------------------------------------------------------
Cattle:
LS-113...................................................... $1,886 x 34 = $64,124
LS-114...................................................... 1,886 x 34 = 64,124
LS-115...................................................... 277 x 34 = 9,418
LS-117...................................................... 89 x 34 = 3,026
LS-126...................................................... 1,386 x 48 = 66,528
LS-131...................................................... 444 x 22 = 9,768
LS-132...................................................... 943 x 22 = 20,746
-----------------------------------------------
Subtotal................................................ .......... .. .............. .. 237,734
-----------------------------------------------
Swine:
LS-118...................................................... 1,386 x 52 = 72,072
LS-119...................................................... 1,886 x 40 = 75,440
LS-120...................................................... 277 x 21 = 5,817
-----------------------------------------------
Subtotal................................................ .......... .. .............. .. 153,329
-----------------------------------------------
Lamb:
Domestic:
LS-121...................................................... 1,886 x 6 = 11,316
LS-123...................................................... 277 x 5 = 1,385
LS-124...................................................... 277 x 5 = 1,385
LS-125...................................................... 89 x 6 = 534
LS-128...................................................... 926 x 10 = 9,260
LS-129...................................................... 926 x 8 = 7,408
Importer:
LS-128...................................................... 93 x 6 = 558
-----------------------------------------------
Subtotal................................................ .......... .. .............. .. 31,846
-----------------------------------------------
Grand total......................................... .......... .. .............. .. 422,909
----------------------------------------------------------------------------------------------------------------
Estimated Total Annual Burden on Respondents by Species:
Live Cattle and Boxed Beef: $362,302 including $237,734 for annual
costs associated with electronically submitted responses (11,145 annual
hours @ $21.33 per hour), electronic submission development and annual
system maintenance costs of $32,256 ($672 per 48 respondents), and
$92,304 ($1,923 per 48 respondents) for the storage and maintenance of
electronic files that were submitted to AMS.
Live Swine: $288,302 including $153,329 for annual costs associated
with electronically submitted responses (7,189 annual hours @ $21.33
per hour), electronic submission development and annual system
maintenance costs of $34,944 ($672 per 52 respondents), and $99,996
($1,923 per 52 respondents) for the storage and maintenance of
electronic files that were submitted to AMS.
Live Lambs, Boxed Lamb, and Lamb Carcasses: $73,366 including
$57,238 for packers ($31,288 for annual costs associated with
electronically submitted responses (1,466 annual hours @ $21.33 per
hour), electronic submission development and annual system maintenance
costs of $6,720 ($672 per 10 respondents), and $19,230 ($1,923 per 10
respondents) for the storage and maintenance of electronic files that
were submitted to AMS) and $16,128 for importers ($558 for annual costs
associated with electronically submitted responses) (26 annual hours @
$21.33 per hour), electronic submission development and annual system
maintenance costs of $4,032 ($672 per 6 respondents), and $11,538
($1,923 per 6 respondents) for the storage and maintenance of
electronic files that were submitted to AMS).
List of Subjects in 7 CFR Part 59
Cattle, Hogs, Sheep, Livestock, Lamb.
0
For the reasons set forth in the preamble, Title 7, Chapter I of the
Code of Federal Regulations is amended by revising part 59 to read as
follows:
PART 59--LIVESTOCK MANDATORY REPORTING
Subpart A--General Provisions
Sec.
59.10 General administrative provisions.
59.20 Recordkeeping.
59.30 Definitions.
Subpart B--Cattle Reporting
59.100 Definitions.
59.101 Mandatory daily reporting for steers and heifers.
59.102 Mandatory daily reporting for cows and bulls.
59.103 Mandatory weekly reporting for steers and heifers.
59.104 Mandatory reporting of boxed beef sales.
Subpart C--Swine Reporting
59.200 Definitions.
59.201 General reporting provisions.
59.202 Mandatory daily reporting for barrows and gilts.
59.203 Mandatory daily reporting for sows and boars.
59.204 Mandatory weekly reporting for swine.
Subpart D--Lamb Reporting
59.300 Definitions.
59.301 Mandatory daily reporting for lambs.
59.302 Mandatory weekly reporting for lambs.
59.303 Mandatory reporting of lamb carcasses and boxed lamb.
Subpart E--OMB Control Number
59.400 OMB control number assigned pursuant to the Paperwork
Reduction Act.
Authority: 7 U.S.C. 1635-1636i.
[[Page 28634]]
Subpart A--General Provisions
Sec. 59.10 General administrative provisions.
(a) Reporting by Packers and Importers. A packer or importer shall
report all information required under this Part on an individual lot
basis.
(b) Reporting Schedule. Whenever a packer or importer is required
to report information on transactions of livestock and livestock
products under this Part by a set time, all covered transactions up to
within one half hour of the reporting deadline shall be reported.
Transactions completed during the one half hour prior to the previous
reporting time, but not reported in the previous report, shall be
reported at the next scheduled reporting time.
(c) Regional Reporting and Aggregation. The Secretary shall make
information obtained under this Part available to the public only in a
manner that:
(1) Ensures that the information is published on a national and a
regional or statewide basis as the Secretary determines to be
appropriate;
(2) Ensures that the identity of a reporting person or the entity
which they represent is not disclosed; and
(3) Market information reported to the Secretary by packers and
importers shall be aggregated in such a manner that the market reports
issued will not disclose the identity of persons, packers and
importers, including parties to a contract and packer's and importer's
proprietary information.
(d) Adjustments. Prior to the publication of any information
required under this Part, the Secretary may make reasonable adjustments
in information reported by packers and importers to reflect price
aberrations or other unusual or unique occurrences that the Secretary
determines would distort the published information to the detriment of
producers, packers, or other market participants.
(e) Reporting of Activities on Weekends and Holidays. Livestock and
livestock products committed to a packer, or importer, or purchased,
sold, or slaughtered by a packer or importer on a weekend day or
holiday shall be reported to the Secretary in accordance with the
provisions of this Part and reported by the Secretary on the
immediately following reporting day. A packer shall not be required to
report such actions more than once on the immediately following
reporting day.
(f) Reporting Methods. Whenever information is required to be
reported under this Part, it shall be reported by electronic means and
shall adhere to a standardized format established by the Secretary to
achieve the objectives of this Part, except in emergencies or in cases
when an alternative method is agreeable to the entity required to
report and AMS.
Sec. 59.20 Recordkeeping.
(a) In General. Each packer or importer required to report
information to the Secretary under the Act and this Part shall maintain
for 2 years and make available to the Secretary the following
information on request:
(1) The original contracts, agreements, receipts, and other records
associated with any transaction relating to the purchase, sale,
pricing, transportation, delivery, weighing, slaughter, or carcass
characteristics of all livestock or livestock products; and
(2) Such records or other information as is necessary or
appropriate to verify the accuracy of the information required to be
reported under the Act and this Part.
(b) Purchases of Cattle and Swine and Sales of Boxed Beef Cuts. A
record of a purchase of a lot of cattle or swine, or a sale of a unit
of boxed beef cuts, by a packer shall evidence whether the purchase or
sale occurred:
(1) Before 10 a.m. central time;
(2) Between 10 a.m. and 2 p.m. central time; or
(3) After 2 p.m. central time.
(c) Purchases of Lambs. A record of a purchase of a lot of lambs by
a packer shall evidence whether the purchase occurred:
(1) Before 2 p.m. central time; or
(2) After 2 p.m. central time.
(d) Sales of Lamb Carcasses and Sales of Boxed Lamb Cuts. A record
of a sale by a packer of lamb carcasses and cuts, shall evidence time
and date the sale occurred:
(1) Before 2 p.m. central time; or
(2) After 2 p.m. central time.
A record of sale by an importer of lamb cuts shall evidence the date
the sale occurred.
(e) Reporting Sales of Boxed Beef Cuts and Sales of Boxed Lamb
Cuts.
(1) Beef packers must report all sales of boxed beef items by the
applicable Institutional Meat Purchase Specifications (IMPS) item
number or the boxed beef items' cutting and trimming specifications.
(2) Lamb packers and importers must report all sales of boxed lamb
items by the applicable Institutional Meat Purchase Specifications
(IMPS) item number or the boxed lamb items' cutting and trimming
specifications.
Sec. 59.30 Definitions.
The following definitions apply to this part.
Act. The term ``Act'' means Subtitle B of the Agricultural
Marketing Act of 1946, as amended; 7 U.S.C. 1635-1636h.
Base price. The term ``base price'' means the price paid for
livestock, delivered at the packing plant, before application of any
premiums or discounts, expressed in dollars per hundred pounds of hot
carcass weight.
Basis level. The term ``basis level'' means the agreed on
adjustment to a future price to establish the final price paid for
livestock.
Current slaughter week. The term ``current slaughter week'' means
the period beginning Monday, and ending Sunday, of the week in which a
reporting day occurs.
Discount. The term ``discount'' means the adjustment, expressed in
dollars per one hundred pounds, subtracted from the base price due to
weight, quality characteristics, yield characteristics, livestock
class, dark cutting, breed, dressing percentage, or other
characteristic.
Exported. The term ``exported'' means livestock or livestock
products that are physically shipped to locations outside of the 50
States.
F.O.B. The term ``F.O.B.'' means free on board, regardless of the
mode of transportation, at the point of direct shipment by the seller
to the buyer (e.g., F.O.B. Plant, F.O.B. Feedlot).
Imported. The term ``imported'' means livestock that are raised to
slaughter weight outside of the 50 States or livestock products
produced outside of the 50 States.
Institutional Meat Purchase Specifications. Specifications
describing various meat cuts, meat products, and meat food products
derived from all livestock species, commonly abbreviated ``IMPS'', and
intended for use by any meat procuring activity. Copies of the IMPS may
be obtained from the U.S. Department of Agriculture, Agricultural
Marketing Service, Livestock and Seed Program located at Room 2603
South Building, 1400 Independence Ave., SW., Washington, DC 20250.
Phone (202) 720-4486 or Fax (202) 720-1112. Copies may also be obtained
over the Internet at: http://www.ams.usda.gov/lsg/stand/st-pubs.htm.
Livestock. The term ``livestock'' means cattle, swine, and lambs.
Lot. (1) When used in reference to livestock, the term ``lot''
means a group of one or more livestock that is identified for the
purpose of a single transaction between a buyer and a seller;
(2) When used in reference to lamb carcasses, the term ``lot''
means a group of one or more lamb carcasses sharing
[[Page 28635]]
a similar weight range category and comprising a single transaction
between a buyer and seller; or
(3) When used in reference to boxed beef and lamb, the term ``lot''
means a group of one or more boxes of beef or lamb items sharing
cutting and trimming specifications and comprising a single transaction
between a buyer and seller.
Marketing. The term ``marketing'' means the sale or other
disposition of livestock, livestock products, or meat or meat food
products in commerce.
Negotiated purchase. The term ``negotiated purchase'' means a cash
or spot market purchase by a packer of livestock from a producer under
which the base price for the livestock is determined by seller-buyer
interaction and agreement on a delivery day. The livestock are
scheduled for delivery to the packer not more than 14 days after the
date on which the livestock are committed to the packer.
Negotiated grid purchase. The term ``negotiated grid purchase'' in
reference to cattle means the negotiation of a base price, from which
premiums are added and discounts are subtracted, determined by seller-
buyer interaction and agreement on a delivery day. The livestock are
scheduled for delivery to the packer not more than 14 days after the
date on which the livestock are committed to the packer.
Negotiated sale. The term ``negotiated sale'' means a cash or spot
market sale by a producer of livestock to a packer under which the base
price for the livestock is determined by seller-buyer interaction and
agreement on a delivery day. The livestock are scheduled for delivery
to the packer not later than 14 days after the date on which the
livestock are committed to the packer. When used in reference to sales
of boxed beef or lamb cuts or lamb carcasses the term ``negotiated
sale'' means a sale by a packer selling boxed beef or lamb cuts or lamb
carcasses to a buyer of boxed beef or lamb cuts or lamb carcasses under
which the price for the boxed beef or lamb cuts or lamb carcasses is
determined by seller-buyer interaction and agreement on a day.
Origin. The term ``origin'' means the State where the livestock
were fed to slaughter weight.
Percent lean. The term ``percent lean'' means the value equal to
the average percentage of the carcass weight comprised of lean meat.
Person. The term ``person'' means any individual, group of
individuals, partnership, corporation, association, or other entity.
Premium. The term ``premium'' means the adjustment, expressed in
dollars per one hundred pounds, added to the base price due to weight,
quality characteristics, yield characteristics, livestock class, and
breed.
Priced. The term ``priced'' means the time when the final price is
determined either through buyer-seller interaction and agreement or as
a result of some other price determining method.
Prior slaughter week. The term prior ``slaughter week'' means the
Monday through Sunday prior to a reporting day.
Producer. The term ``producer'' means any person engaged in the
business of selling livestock to a packer for slaughter (including the
sale of livestock from a packer to another packer).
Purchased. The term ``purchased'' means the agreement on a price,
or the method for calculating a price, determined through buyer-seller
interaction and agreement.
Reporting day. The term ``reporting day'' means a day on which a
packer conducts business regarding livestock committed to the packer,
or livestock purchased, sold, or slaughtered by the packer; the
Secretary is required to make such information available to the public;
and the Department of Agriculture is open to conduct business.
Secretary. The term ``Secretary'' means the Secretary of
Agriculture of the United States or any other officer or employee of
the Department of Agriculture to whom authority has been delegated or
may hereafter be delegated to act in the Secretary's stead.
State. The term ``State'' means each of the 50 States.
Subpart B--Cattle Reporting
Sec. 59.100 Definitions.
The following definitions apply to this subpart.
Boxed Beef. The term ``boxed beef'' means those carlot-based
portions of a beef carcass including fresh and frozen primals,
subprimals, cuts fabricated from subprimals (excluding portion-control
cuts such as chops and steaks similar to those portion cut items
described in the Institutional Meat Purchase Specifications (IMPS) for
Fresh Beef Products Series 100), thin meats (e.g. inside and outside
skirts, pectoral meat, cap and wedge meat, and blade meat), and fresh
and frozen ground beef, beef trimmings, and boneless processing beef.
Branded. The term ``branded'' means boxed beef cuts produced and
marketed under a corporate trademark (for example, products that are
marketed on their quality, yield, or breed characteristics), or boxed
beef cuts produced and marketed under one of USDA's Meat Grading and
Certification Branch, Certified Beef programs.
Carcass characteristics. The term ``carcass characteristics'' means
the range and average carcass weight in pounds, the quality grade and
yield grade (if applicable), and the average cattle dressing
percentage.
Carlot-based. The term ``carlot-based'' means any transaction
between a buyer and a seller destined for two or less delivery stops
consisting of one or more individual boxed beef items. When used in
reference to cow and bull boxed beef items, the term ``carlot-based''
means any transaction between a buyer and seller consisting of 2,000
pounds or more of one or more individual items.
Cattle committed. The term ``cattle committed'' means cattle that
are scheduled to be delivered to a packer within the 7-day period
beginning on the date of an agreement to sell the cattle.
Cattle type. The term ``cattle type'' means the following types of
cattle purchased for slaughter:
(1) Fed steers;
(2) Fed heifers;
(3) Fed Holsteins and other fed dairy steers and heifers;
(4) Cows; and
(5) Bulls.
Established. The term ``established'', when used in connection with
prices, means that point in time when the buyer and seller agree upon a
net price.
Formula marketing arrangement.
(1) When used in reference to live cattle, the term ``formula
marketing arrangement'' means the advance commitment of cattle for
slaughter by any means other than through a negotiated purchase or a
forward contract, using a method for calculating price in which the
price is determined at a future date.
(2) When used in reference to boxed beef, the term ``formula
marketing arrangement'' means the advance commitment of boxed beef by
any means other than through a negotiated purchase or a forward
contract, using a method for calculating price in which the price is
determined at a future date.
Forward contract.
(1) When used in reference to live cattle, the term ``forward
contract'' means an agreement for the purchase of cattle, executed in
advance of slaughter, under which the base price is established by
reference to prices quoted on the Chicago Mercantile Exchange, or other
comparable publicly available prices.
(2) When used in reference to boxed beef, the term ``forward
contract'' means an agreement for the sale of boxed beef, executed in
advance of manufacture,
[[Page 28636]]
under which the base price is established by reference to publicly
available quoted prices.
Packer. The term ``packer'' means any person engaged in the
business of buying cattle in commerce for purposes of slaughter, of
manufacturing or preparing meats or meat food products from cattle for
sale or shipment in commerce, or of marketing meats or meat food
products from cattle in an unmanufactured form acting as a wholesale
broker, dealer, or distributor in commerce. For any calendar year, the
term ``packer'' includes only a federally inspected cattle processing
plant that slaughtered an average of 125,000 head of cattle per year
during the immediately preceding 5 calendar years. Additionally, in the
case of a cattle processing plant that did not slaughter cattle during
the immediately preceding 5 calendar years, it shall be considered a
packer if the Secretary determines the processing plant should be
considered a packer under this subpart after considering its capacity.
Packer-owned cattle. The term ``packer-owned cattle'' means cattle
that a packer owns for at least 14 days immediately before slaughter.
Prices for cattle. The term ``prices for cattle'' includes the
price per hundredweight; the purchase type; the quantity on a live and
a dressed weight basis; the estimated live weight range; the average
live weight; the estimated percentage of cattle of a USDA quality grade
Choice or better; beef carcass classification; any premiums or
discounts associated with weight, quality grade, yield grade, or type
of purchase; cattle State of origin; estimated cattle dressing
percentage; and price basis as F.O.B. feedlot or delivered at the
plant.
Terms of trade. The term ``terms of trade'' means, with respect to
the purchase of steers and heifers for slaughter:
(1) Whether a packer provided any financing agreement or
arrangement with regard to the steers and heifers;
(2) Whether the delivery terms specified the location of the
producer or the location of the packer's plant;
(3) Whether the producer is able to unilaterally specify the date
and time during the business day of the packer that the cattle are to
be delivered for slaughter; and
(4) The percentage of steers and heifers purchased by a packer as a
negotiated purchase that are scheduled to be delivered to the plant for
slaughter not later than 14 days and the percentage of slaughter steers
and heifers purchased by a packer as a negotiated purchase that are
scheduled to be delivered to the plant for slaughter more than 14 days,
but fewer than 30 days.
Type of purchase. The term ``type of purchase'' with respect to
cattle, means a negotiated purchase, negotiated grid purchase, a
formula market arrangement, and a forward contract.
Type of sale. The term ``type of sale'' with respect to boxed beef,
means a negotiated sale, a formula market arrangement, and a forward
contract.
White cow. Cow on a ration that tends to produce white fat.
Sec. 59.101 Mandatory daily reporting for steers and heifers.
(a) In General. The corporate officers or officially designated
representatives of each steer and heifer packer processing plant shall
report to the Secretary at least two times each reporting day not later
than 10 a.m. central time and not later than 2 p.m. central time the
following information, inclusive since the last reporting, categorized
to clearly delineate domestic from imported market purchases as
described in Sec. 59.10(b).
(1) The prices for cattle (per hundredweight) established on that
day, categorized by:
(i) The type of purchase;
(ii) The quantity of cattle purchased on a live weight basis;
(iii) The quantity of cattle purchased on a dressed weight basis;
(iv) The estimated weights of cattle purchased;
(v) An estimate of the percentage of the cattle purchased that were
of a quality grade of Choice or better; and
(vi) Any premiums or discounts associated with weight, quality
grade, yield grade, or other characteristic expressed in dollars per
hundredweight on a dressed basis.
(2) The quantity of cattle delivered to the packer (quoted in
numbers of head) on that day, categorized by:
(i) The type of purchase;
(ii) The quantity of cattle delivered on a live weight basis; and
(iii) The quantity of cattle delivered on a dressed weight basis.
(3) The quantity of cattle committed to the packer (quoted in
numbers of head) as of that day, categorized by:
(i) The type of purchase;
(ii) The quantity of cattle committed on a live weight basis; and
(iii) The quantity of cattle committed on a dressed weight basis.
(4) The terms of trade regarding the cattle, as applicable.
(b) Publication. The Secretary shall make the information available
to the public not less frequently than three times each reporting day.
Sec. 59.102 Mandatory daily reporting for cows and bulls.
(a) In General. The corporate officers or officially designated
representatives of each cow and bull packer processing plant shall
report to the Secretary each reporting day the following information
for each cattle type, inclusive since the last reporting, categorized
to clearly delineate domestic from imported market purchases as
described in Sec. 59.10(b).
(1) The base bid price (per hundredweight) intended to be paid for
slaughter cow and bull carcasses on that day not later than 10 a.m.
central time categorized by:
(i) Weight; and
(ii) For slaughter cows, percent lean (e.g., breaker, boner, cutter
(lean)).
(2) The prices for cattle (per hundredweight) purchased during the
previous day not later than 2 p.m. central time categorized by:
(i) The type of purchase;
(ii) The quantity of cattle purchased on a live weight basis;
(iii) The quantity of cattle purchased on a dressed weight basis;
(iv) The estimated weight of the cattle purchased;
(v) The quality classification; and
(vi) Any premiums or discounts associated with weight or quality
expressed in dollars per hundredweight on a dressed basis.
(3) The volume of cows and bulls slaughtered the previous day.
(b) Publication. The Secretary shall make the information available
to the public within one hour of the required reporting time on the
reporting day on which the information is received from the packer.
Sec. 59.103 Mandatory weekly reporting for steers and heifers.
(a) In General. The corporate officers or officially designated
representatives of each steer and heifer packer processing plant shall
report to the Secretary on the first reporting day of each week, not
later than 9 a.m. central time, the following information applicable to
the prior slaughter week, categorized to clearly delineate domestic
from imported market purchases:
(1) The quantity of cattle purchased through a negotiated basis
that were slaughtered;
(2) The quantity of cattle purchased through a negotiated grid
basis that were slaughtered;
(3) The quantity of cattle purchased through forward contracts that
were slaughtered;
(4) The quantity of cattle delivered under a formula marketing
arrangement that were slaughtered;
[[Page 28637]]
(5) The quantity and carcass characteristics of packer-owned cattle
that were slaughtered;
(6) The quantity, basis level, basis level month, and delivery
month and year for all cattle purchased through forward contracts;
(7) The range and average of intended premiums and discounts
(including those associated with weight, quality grade, yield grade, or
type of cattle) that are expected to be in effect for the current
slaughter week.
(b) Publication. The Secretary shall make available to the public
the information obtained under paragraph (a) of this section on the
first reporting day of the current slaughter week by 10 a.m. central
time.
Sec. 59.104 Mandatory reporting of boxed beef sales.
(a) Daily Reporting. The corporate officers or officially
designated representatives of each packer processing plant shall report
to the Secretary at least twice each reporting day (once by 10 a.m.
central time, and once by 2 p.m. central time) the following
information on total boxed beef domestic and export sales established
on that day inclusive since the last reporting as described in Sec.
59.10(b):
(1) The price for each lot of each boxed beef sale, quoted in
dollars per hundredweight on a F.O.B. plant basis;
(2) The quantity for each lot of each sale, quoted by number of
pounds sold; and
(3) The information regarding the characteristics of each sale is
as follows:
(i) The type of sale;
(ii) The branded product characteristics, if applicable;
(iii) The grade for steer and heifer beef (e.g., USDA Prime, USDA
Choice or better, USDA Choice, USDA Select, ungraded no-roll product);
(iv) The grade for cow beef or packer yield and/or quality sort for
cow beef (e.g., Breakers, Boners, White Cow, Cutters (lean));
(v) The cut of beef, referencing the most recent version of the
Institutional Meat Purchase Specifications (IMPS), when applicable;
(vi) The trim specification;
(vii) The weight range of the cut;
(viii) The product delivery period; and
(ix) The beef type (steer/heifer, dairy steer/heifer, or cow).
(b) Publication. The Secretary shall make available to the public
the information obtained under paragraph (a) of this section not less
frequently than twice each reporting day.
Subpart C--Swine Reporting
Sec. 59.200 Definitions.
The following definitions apply to this subpart.
Affiliate. The term ``affiliate'', with respect to a packer, means:
(1) A person that directly or indirectly owns, controls, or holds
with power to vote, 5 percent or more of the outstanding voting
securities of the packer;
(2) A person 5 percent or more of whose outstanding voting
securities are directly or indirectly owned, controlled, or held with
power to vote, by the packer; and
(3) A person that directly or indirectly controls, or is controlled
by or under common control with, the packer.
Applicable reporting period. The term ``applicable reporting
period'' means the period of time prescribed by the prior day report,
the morning report, and the afternoon report, as provided in Sec.
59.202.
Average carcass weight. The term ``average carcass weight'' means
the weight obtained by dividing the total carcass weight of the swine
slaughtered at the packing plant during the applicable reporting period
by the number of these same swine.
Average lean percentage. The term ``average lean percentage'' means
the value equal to the average percentage of the carcass weight
comprised of lean meat for the swine slaughtered during the applicable
reporting period. Whenever the packer changes the manner in which the
average lean percentage is calculated, the packer shall make available
to the Secretary the underlying data, applicable methodology and
formulae, and supporting materials used to determine the average lean
percentage, which the Secretary may convert either to the carcass
measurements or lean percentage of the swine of the individual packer
to correlate to a common percent lean measurement.
Average net price. The term ``average net price'' means the
quotient (stated per hundred pounds of carcass weight of swine)
obtained by dividing the total amount paid for the swine slaughtered at
a packing plant during the applicable reporting period (including all
premiums and less all discounts) by the total carcass weight of the
swine (in hundred pound increments).
Average sort loss. The term ``average sort loss'' means the average
discount (in dollars per hundred pounds carcass weight) for swine
slaughtered during the applicable reporting period, resulting from the
fact that the swine did not fall within the individual packer's
established carcass weight range or lot variation range.
Backfat. The term ``backfat'' means the fat thickness (in inches)
measured between the third and fourth rib from the last rib, 7
centimeters from the carcass split (or adjusted from the individual
packer's measurement to that reference point using an adjustment made
by the Secretary) of the swine slaughtered during the applicable
reporting period.
Barrow. The term ``barrow'' means a neutered male swine, with the
neutering performed before the swine reached sexual maturity.
Base market hog. The term ``base market hog'' means a barrow or
gilt for which no discounts are subtracted from and no premiums are
added to the base price.
Base price. The term ``base price'' means the price from which no
discounts are subtracted and no premiums are added.
Boars. The term ``boar'' means a sexually-intact male swine.
Bred female swine. The term ``bred female swine'' means any female
swine, whether a sow or gilt, that has been mated or inseminated, or
has been confirmed, to be pregnant.
Formula price. The term ``formula price'' means a price determined
by a mathematical formula under which the price established for a
specified market serves as the basis for the formula.
Gilt. The term ``gilt'' means a young female swine that has not
produced a litter.
Hog Class. The term ``hog class'' means, as applicable, barrows or
gilts; sows; or boars or stags.
Inferior swine. The term ``inferior swine'' means swine that are
discounted in the market place due to light-weight, health, or physical
conditions that affects their value.
Loin depth. The term ``loin depth'' means the muscle depth (in
inches) measured between the third and fourth ribs from the last rib, 7
centimeters from the carcass split (or adjusted from the individual
packer's measurement to that reference point using an adjustment made
by the Secretary) of the swine slaughtered during the applicable
reporting period.
Net price. The term ``net price'' means the total amount paid by a
packer to a producer (including all premiums, less all discounts) per
hundred pounds of carcass weight of swine delivered at the plant. The
total amount paid shall include any sum deducted from the price (per
hundredweight) paid to a producer that reflects the repayment of a
balance owed by the producer to the packer or the accumulation of a
balance
[[Page 28638]]
to later be repaid by the packer to the producer. The total amount paid
shall exclude any sum earlier paid to a producer that must be repaid to
the packer.
Noncarcass merit premium. The term ``noncarcass merit premium''
means an increase in the base price of the swine offered by an
individual packer or packing plant, based on any factor other than the
characteristics of the carcass, if the actual amount of the premium is
known before the sale and delivery of the swine.
Other market formula purchase. The term ``other market formula
purchase'' means a purchase of swine by a packer in which the pricing
mechanism is a formula price based on any market other than the market
for swine, pork, or a pork product. The term ``other market formula
purchase'' includes a formula purchase in a case which the price
formula is based on 1 or more futures or options contracts.
Other purchase arrangement. The term ``other purchase arrangement''
means a purchase of swine by a packer that is not a negotiated
purchase, swine or pork market formula purchase, or other market
formula purchase; and does not involve packer-owned swine.
Packer. The term ``packer'' means any person engaged in the
business of buying swine in commerce for purposes of slaughter, of
manufacturing or preparing meats or meat food products from swine for
sale or shipment in commerce, or of marketing meats or meat food
products from swine in an unmanufactured form acting as a wholesale
broker, dealer, or distributor in commerce. For any calendar year, the
term ``packer'' includes only a federally inspected swine processing
plant that slaughtered an average of 100,000 head of swine per year
during the immediately preceding 5 calendar years and a person that
slaughtered an average of 200,000 head of sows, boars, or combination
thereof per year during the immediately preceding 5 calendar years.
Additionally, in the case of a swine processing plant or person that
did not slaughter swine during the immediately preceding 5 calendar
years, it shall be considered a packer if the Secretary determines the
processing plant or person should be considered a packer under this
subpart after considering its capacity.
Packer-owned swine. The term ``packer-owned swine'' means swine
that a packer (including a subsidiary or affiliate of the packer) owns
for at least 14 days immediately before slaughter.
Packer-sold swine. The term ``packer-sold swine'' means the swine
that are owned by a packer (including a subsidiary or affiliate of the
packer) for more than 14 days immediately before sale for slaughter;
and sold for slaughter to another packer.
Pork. The term ``pork'' means the meat of a porcine animal.
Pork product. The term ``pork product'' means a product or
byproduct produced or processed in whole or in part from pork.
Purchase data. The term ``purchase data'' means all of the
applicable data, including base price and weight (if purchased live),
for all swine purchased during the applicable reporting period,
regardless of the expected delivery date of the swine, reported by:
(1) Hog class;
(2) Type of purchase; and
(3) Packer-owned swine.
Slaughter data. The term ``slaughter data'' means all of the
applicable data for all swine slaughtered by a packer during the
applicable reporting period, regardless of whether the price of the
swine was negotiated or otherwise determined, reported by:
(1) Hog class;
(2) Type of purchase; and
(3) Packer-owned swine.
Sow. The term ``sow'' means an adult female swine that has produced
1 or more litters.
Stag. The term ``stag'' means a male swine that was neutered after
reaching sexual maturity.
Swine. The term ``swine'' means a porcine animal raised to be a
feeder pig, raised for seedstock, or raised for slaughter.
Swine committed. The term ``swine committed'' means swine scheduled
and delivered to a packer within the 14-day period beginning on the
date of an agreement to sell the swine.
Swine or pork market formula purchase. The term ``swine or pork
market formula purchase'' means a purchase of swine by a packer in
which the pricing mechanism is a formula price based on a market for
swine, pork, or a pork product, other than a future or option for
swine, pork, or a pork product.
Type of purchase. The term ``type of purchase'', with respect to
swine, means:
(1) A negotiated purchase;
(2) Other market formula purchase;
(3) A swine or pork market formula purchase; and
(4) Other purchase arrangement.
Sec. 59.201 General reporting provisions.
(a) Packer-Owned Swine. Information required under this section for
packer-owned swine shall include quantity and carcass characteristics,
but not price.
(b) Type of Purchase. If information regarding the type of purchase
is required under this section, the information shall be reported
according to the numbers and percentages of each type of purchase
comprising:
(1) Packer-sold swine; and
(2) All other swine.
Sec. 59.202 Mandatory daily reporting for barrows and gilts.
(a) Prior Day Report. The corporate officers or officially
designated representatives of each packer that processes barrows and
gilts shall report to the Secretary for each business day of the packer
not later than 7 a.m. central time on each reporting day information
regarding all barrows and gilts purchased or priced, during the prior
business day of the packer, and not later than 9 a.m. central time on
each reporting day information regarding all barrows and gilts
slaughtered, excluding inferior swine, as specified in Sec. 59.10(b):
(1) All purchase data, reported by lot, including:
(i) The total number of barrows and gilts purchased;
(ii) The total number of barrows and gilts scheduled for delivery
to a packer for slaughter;
(iii) The base price and weight for all barrows and gilts purchased
on a live weight basis; and
(iv) The base price and premiums and discounts paid for carcass
characteristics for all barrows and gilts purchased on a carcass basis
for which a price has been established. For barrows and gilts that were
not priced, this information shall be reported on the next prior day
report after the price is established.
(2) The following slaughter data for the total number of barrows
and gilts slaughtered:
(i) The average net price;
(ii) The average carcass weight;
(iii) The average sort loss;
(iv) The average backfat;
(v) The average loin depth;
(vi) The average lean percentage; and
(vii) Total quantity slaughtered.
(3) Packer purchase commitments, which shall be equal to the number
of barrows and gilts scheduled for delivery to a packer for slaughter
for each of the next 14 calendar days.
(4) The Secretary shall publish the information obtained in
paragraph (a) of this section in a prior day report not later than 8
a.m. central time for all barrows and gilts purchased and 10 a.m.
central time for all barrows and gilts slaughtered on the reporting day
on which the information is received from the packer. In addition, the
Secretary shall publish a net price distribution for all barrows and
gilts slaughtered on the previous day not later than 3 p.m. central
time.
[[Page 28639]]
(b) Morning Report. The corporate officers or officially designated
representatives of each packer processing plant that processes barrows
and gilts shall report to the Secretary not later than 10 a.m. central
time each reporting day as described in Sec. 59.10(b):
(1) The packer's best estimate of the total number of barrows and
gilts, and barrows and gilts that qualify as packer-owned swine,
expected to be purchased throughout the reporting day through each type
of purchase;
(2) The total number of barrows and gilts, and barrows and gilts
that qualify as packer-owned swine, purchased up to that time of the
reporting day through each type of purchase;
(3) All purchase data for base market hogs purchased up to that
time of the reporting day through negotiated purchases; and
(4) All purchase data for base market hogs purchased through each
type of purchase other than negotiated purchase up to that time of the
reporting day, unless such information is unavailable due to pricing
that is determined on a delayed basis. The packer shall report
information on such purchases on the first reporting day or scheduled
reporting time on a reporting day after the price has been determined.
(5) The Secretary shall publish the information obtained in
paragraph (b) of this section in the morning report as soon as
practicable, but not later than 11 a.m. central time, on each reporting
day.
(c) Afternoon Report. The corporate officers or officially
designated representatives of each packer processing plant that
processes barrows and gilts shall report to the Secretary not later
than 2 p.m. central time each reporting day as described in Sec.
59.10(b):
(1) The packer's best estimate of the total number of barrows and
gilts, and barrows and gilts that qualify as packer-owned swine
expected to be purchased throughout the reporting day through each type
of purchase;
(2) The total number of barrows and gilts, and barrows and gilts
that qualify as packer-owned swine, purchased up to that time of the
reporting day through each type of purchase;
(3) The base price paid for all base market hogs purchased up to
that time of the reporting day through negotiated purchases; and
(4) The base price paid for all base market hogs purchased through
each type of purchase other than negotiated purchase up to that time of
the reporting day, unless such information is unavailable due to
pricing that is determined on a delayed basis. The packer shall report
information on such purchases on the first reporting day or scheduled
reporting time on a reporting day after the price has been determined.
(5) The Secretary shall publish the information obtained in
paragraph (c) of this section in the afternoon report as soon as
practicable, but not later than 3 p.m. central time, on each reporting
day.
Sec. 59.203 Mandatory daily reporting for sows and boars.
(a) Prior Day Report. The corporate officers or officially
designated representatives of each packer of sows and boars shall
report to the Secretary for each business day of the packer not later
than 7 a.m. central time on each reporting day information regarding
all sows and boars purchased or priced, excluding inferior swine,
during the prior business day of the packer all purchase data, reported
by lot, including:
(1) The total number of sows and boars purchased divided into at
least three weight groups as specified by the Secretary;
(2) The average price paid by each purchase type for all sows in
each weight class specified by the Secretary; and
(3) The average price paid by each purchase type for all boars in
each weight class specified by the Secretary.
(4) The packer is required to report only the volume of sows and
boars that qualify as packer owned swine and shall omit packer owned
sows and boars from all average price calculations.
(b) Publication. The Secretary shall publish the information
obtained in paragraph (a) of this section as soon as practicable, but
not later than 8 a.m. central time, on the reporting day on which the
information is received from the packer.
Sec. 59.204 Mandatory weekly reporting for swine.
(a) Weekly Noncarcass Merit Premium Report. Not later than 4 p.m.
central time in accordance with Sec. 59.10(b) on the first reporting
day of each week, the corporate officers or officially designated
representatives of each packer processing plant shall report to the
Secretary a noncarcass merit premium report that lists:
(1) Each category of standard noncarcass merit premiums used by the
packer in the prior slaughter week; and
(2) The dollar value (in dollars per hundred pounds of carcass
weight) paid to producers by the packer, by category.
(b) Premium List. A packer shall maintain and make available to a
producer, on request, a current listing of the dollar values (per
hundred pounds of carcass weight) of each noncarcass merit premium used
by the packer during the current or the prior slaughter week.
(c) Publication. The Secretary shall publish the information
obtained under this subsection as soon as practicable, but not later
than 5 p.m. central time, on the first reporting day of each week.
Subpart D--Lamb Reporting
Sec. 59.300 Definitions.
The following definitions apply to this subpart.
Boxed Lamb. The term ``boxed lamb'' means those carlot-based
portions of a lamb carcass including fresh primals, subprimals, cuts
fabricated from subprimals excluding portion-control cuts such as chops
and steaks similar to those portion cut items described in the
Institutional Meat Purchase Specifications (IMPS) for Fresh Lamb and
Mutton Series 200, and thin meats (e.g., inside and outside skirts,
pectoral meat, cap and wedge meat, and blade meat) not older than 14
days from date of manufacture; fresh ground lamb, lamb trimmings, and
boneless processing lamb not older than 7 days from date of
manufacture; frozen primals, subprimals, cuts fabricated from
subprimals, and thin meats not older than 180 days from date of
manufacture; and frozen ground lamb, lamb trimmings, and boneless
processing lamb not older than 90 days from date of manufacture.
Branded. The term ``branded'' means boxed lamb cuts produced and
marketed under a corporate trademark (for example, products that are
marketed on their quality, yield, or breed characteristics), or boxed
lamb cuts produced and marketed under one of USDA's Meat Grading and
Certification Branch, Certified programs.
Carcass characteristics. The term ``carcass characteristics'' means
the range and average carcass weight in pounds, the quality grade and
yield grade (if applicable), and the lamb average dressing percentage.
Carlot-based. The term ``carlot-based'' means any transaction
between a buyer and a seller destined for three or less delivery stops
consisting of any combination of carcass weights. When used in
reference to boxed lamb cuts the term ``carlot-based'' means any
transaction between a buyer and seller consisting of 1,000 pounds or
more of one or more individual boxed lamb items.
Established. The term ``established'', when used in connection with
prices, means that point in time when the buyer and seller agree upon a
net price.
Formula marketing arrangement.
[[Page 28640]]
(1) When used in reference to live lambs, the term ``formula
marketing arrangement'' means the advance commitment of lambs for
slaughter by any means other than through a negotiated purchase or a
forward contract, using a method for calculating price in which the
price is determined at a future date.
(2) When used in reference to boxed lamb, the term ``formula
marketing arrangement'' means the advance commitment of boxed lamb by
any means other than through a negotiated purchase or a forward
contract, using a method for calculating price in which the price is
determined at a future date.
Forward contract.
(1) When used in reference to live lambs, the term ``forward
contact'' means an agreement for the purchase of lambs, executed in
advance of slaughter, under which the base price is established by
reference to publicly available prices.
(2) When used in reference to boxed lamb, the term ``forward
contract'' means an agreement for the sale of boxed lamb, executed in
advance of manufacture, under which the base price is established by
reference to publicly available quoted prices.
Importer. The term ``importer'' means any person engaged in the
business of importing lamb meat products who takes ownership of such
lamb meat products with the intent to sell or ship in U.S. commerce.
For any calendar year, the term includes only those that imported an
average of 2,500 metric tons of lamb meat products per year during the
immediately preceding 5 calendar years. Additionally, the term includes
those that did not import an average of 2,500 metric tons of lamb meat
products during the immediately preceding 5 calendar years, if the
Secretary determines that the person should be considered an importer
based on their volume of lamb imports.
Packer. The term ``packer'' means any person engaged in the
business of buying lambs in commerce for purposes of slaughter, of
manufacturing or preparing meat products from lambs for sale or
shipment in commerce, or of marketing meats or meat products from lambs
in an unmanufactured form acting as a wholesale broker, dealer, or
distributor in commerce. For any calendar year, the term includes only
a federally inspected lamb processing plant which slaughtered or
processed the equivalent of an average of 75,000 head of lambs per year
during the immediately preceding 5 calendar years. Additionally, the
term includes a lamb processing plant that did not slaughter or process
an average of 75,000 lambs during the immediately preceding 5 calendar
years if the Secretary determines that the processing plant should be
considered a packer after considering its capacity.
Packer-owned lambs. The term ``packer-owned lambs'' means lambs
that a packer owns for at least 14 days immediately before slaughter.
Type of purchase. The term ``type of purchase'' means a negotiated
purchase, a formula market arrangement, and a forward contract.
Type of sale. The term ``type of sale'' with respect to boxed lamb,
means a negotiated sale, a formula market arrangement, and a forward
contract.
Yield grade lamb carcass reporting. The term ``yield grade lamb
carcass reporting'' means if the lot includes 80 percent or more of one
yield grade, the lot will be considered a single yield grade lot. If
the lot contains less than 80 percent of one yield grade, the lot will
be considered a mixed grade lot and all yield grades comprising 10
percent or more will be used to describe the lot.
Sec. 59.301 Mandatory Daily Reporting for Lambs.
(a) In General. The corporate officers or officially designated
representatives of each packer processing plant shall report to the
Secretary at least once each reporting day not later than 2 p.m.
central time the prices for lambs (per hundredweight) established on
that day as F.O.B. feedlot or delivered at the plant, categorized to
clearly delineate domestic from imported market purchases as described
in Sec. 59.10(b) and categorized by:
(1) The type of purchase;
(2) The class of lamb;
(3) The quantity of lambs purchased on a live weight basis;
(4) The quantity of lambs purchased on a dressed weight basis;
(5) A range and average of estimated live weights of lambs
purchased;
(6) An estimate of the percentage of the lambs purchased that were
of a quality grade of Choice or better;
(7) Any premiums or discounts associated with weight, quality
grade, yield grade, or any type of purchase;
(8) Lamb state of origin;
(9) The pelt type; and
(10) The estimated lamb dressing percentage.
(b) Publication. The Secretary shall make the information available
to the public not less than once each reporting day.
Sec. 59.302 Mandatory weekly reporting for lambs.
(a) In General. The corporate officers or officially designated
representatives of each packer processing plant shall report to the
Secretary the following information applicable to the prior slaughter
week contained in paragraphs (a)(1) through (a)(5) and (a)(7) of this
section not later than 9 a.m. central time on the second reporting day
of the current slaughter week, and the following information applicable
to the prior slaughter week contained in paragraph (a)(6) of this
section not later than 9 a.m. central time on the first reporting day
of the current slaughter week categorized to clearly delineate domestic
from imported market purchases:
(1) The quantity of lambs purchased through a negotiated purchase
that were slaughtered;
(2) The quantity of lambs purchased through forward contracts that
were slaughtered;
(3) The quantity of lambs delivered under a formula marketing
arrangement that were slaughtered;
(4) The quantity and carcass characteristics of packer-owned lambs
that were slaughtered;
(5) The quantity, basis level, and delivery month for all lambs
purchased through forward contracts;
(6) The following information applicable to the current slaughter
week. The range and average of intended premiums and discounts
(including those associated with weight, quality grade, yield grade, or
type of lamb) that are expected to be in effect for the current
slaughter week; and
(7) The following information for lambs purchased through a formula
marketing arrangement and slaughtered during the prior slaughter week,
categorized to clearly delineate domestic from imported market
purchases:
(i) The quantity (quoted in both numbers of head and pounds) of
lambs;
(ii) The weighted average price paid for a carcass, including
applicable premiums and discounts;
(iii) The range of premiums and discounts paid;
(iv) The weighted average of premiums and discounts paid; and
(v) The range of prices paid.
(b) Publication. The Secretary shall make available to the public
the information obtained in paragraphs (a)(1) through (a)(5) and (a)(7)
of this section on the second reporting day of the current slaughter
week and information obtained in paragraph (a)(6) of this section on
the first reporting day of the current slaughter week.
Sec. 59.303 Mandatory reporting of lamb carcasses and boxed lamb.
(a) Daily Reporting of Lamb Carcass Transactions. The corporate
officers or
[[Page 28641]]
officially designated representatives of each packer shall report to
the Secretary each reporting day the following information on total
carlot-based lamb carcass transactions not later than 3 p.m. central
time in accordance with Sec. 59.10(b):
(1) The price for each lot of each lamb carcass transaction, quoted
in dollars per hundredweight on an F.O.B. plant basis;
(2) The quantity for each lot of each transaction, quoted by number
of carcasses sold and purchased; and
(3) The following information regarding the characteristics of each
transaction:
(i) The type of transaction;
(ii) The USDA quality grade of lamb;
(iii) The USDA yield grade;
(iv) The estimated weight range of the carcasses; and
(v) The product delivery period.
(b) Daily Reporting of Domestic Boxed Lamb Sales. The corporate
officers or officially designated representatives of each packer shall
report to the Secretary each reporting day the following information on
total domestic boxed lamb cut sales not later than 2:30 p.m. central
time as described in Sec. 59.10(b):
(1) The price for each lot of each boxed lamb cut sale, quoted in
dollars per hundredweight on a F.O.B. plant basis;
(2) The quantity for each lot of each sale, quoted by product
weight sold; and
(3) The following information regarding the characteristics of each
transaction:
(i) The type of sale;
(ii) The branded product characteristics, if applicable;
(iii) The USDA quality grade of lamb;
(iv) The cut of lamb, referencing the most recent version of the
Institutional Meat Purchase Specifications (IMPS), when applicable;
(v) USDA yield grade, if applicable;
(vi) The product state of refrigeration;
(vii) The weight range of the cut; and
(viii) The product delivery period.
(c) Weekly Reporting of Imported Boxed Lamb Sales. The corporate
officers or officially designated representatives of each lamb importer
shall report to the Secretary on the first reporting day of each week
the following information applicable to the prior week for imported
boxed lamb cut sales not later than 10 a.m. central time:
(1) The price for each lot of a boxed lamb cut sale, quoted in
dollars per hundredweight on a F.O.B. plant basis;
(2) The quantity for each lot of a transaction, quoted by product
weight sold; and
(3) The following information regarding the characteristics of each
transaction:
(i) The type of sale;
(ii) The branded product characteristics, if applicable;
(iii) The cut of lamb, referencing the most recent version of the
Institutional Meat Purchase Specifications (IMPS), when applicable;
(iv) The product state of refrigeration;
(v) The weight range of the cut; and
(vi) The product delivery period.
(d) Publication. The Secretary shall make available to the public
the information required to be reported in paragraphs (a) and (b) of
this section not less frequently than once each reporting day and the
information required to be reported in paragraph (c) of this section on
the first reporting day of the current slaughter week.
Subpart E--OMB Control Number
Sec. 59.400 OMB control number assigned pursuant to the Paperwork
Reduction Act.
The information collection and recordkeeping requirements of this
part have been approved by the Office of Management and Budget (OMB)
under the provisions of 44 U.S.C. Chapter 35 and have been assigned OMB
Control Number 0581-0186.
Dated: March 2, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
Note: The following Appendices will not appear in the Code of
Federal Regulations.
Appendix A--Cattle Mandatory Reporting Forms
The following 7 forms visually represent the mandatory cattle
and boxed beef market information that is required to be reported to
the Agricultural Marketing Service.
Cattle
LS-113--Live Cattle Daily Report (Current Established Prices)
LS-114--Live Cattle Daily Report (Committed and Delivered Cattle)
LS-115--Live Cattle Weekly Report
LS-117--Cattle Premiums and Discounts Weekly Report
LS-131--Cow/Bull Plant Delivered Bids (Dressed Basis)
LS-132--Live Cow/Bull Daily Purchase Report
LS-126--Boxed Beef Daily Report
Appendix B--Swine Mandatory Reporting Forms
The following 3 forms visually represent the mandatory swine
market information that is required to be reported electronically to
the Agricultural Marketing Service.
Swine
LS-118--Swine Prior Day Report
LS-119--Swine Daily Report
LS-120--Swine Noncarcass Merit Premium Weekly Report
Appendix C--Lamb Mandatory Reporting Forms
The following 6 forms visually represent the mandatory lamb
market information that is required to be reported electronically to
the Agricultural Marketing Service.
Lamb
LS-121--Live Lamb Daily Report (Current Established Prices)
LS-123--Live Lamb Weekly Report
LS-124--Live Lamb Weekly Report (Formula Purchases)
LS-125--Lamb Premiums and Discounts Report
LS-128--Boxed Lamb Report
LS-129--Lamb Carcass Report
Appendix D--Mandatory Reporting Guideline
The following reporting guidelines may be used by persons
required to report electronically transmitted mandatory market
information to the Agricultural Marketing Service.
The first 10 fields of each reporting form provide the following
information: Identification number (plant establishment number or
importer ID number), company name (name of parent company), plant
street address (street address for plant), plant city (city where
plant is located), plant state (state where plant is located), plant
zip code (zip code where plant is located), contact name (the name
of the corporate representative contact at the plant), phone number
(full phone number for the plant including area code), reporting
date (date the information was submitted (mm/dd/yyyy)), and
reporting time, if applicable (the submission time corresponding to
the 10 a.m. and the 2 p.m. reporting requirements). The reporting
time requirement is only applicable to forms LS-113--Live Cattle
Daily Report (current established prices), LS-114--Live Cattle Daily
Report (Committed and Delivered Cattle), LS-126--Boxed Beef Daily
Report, LS-131--Cow/Bull Plant Delivered Bids (Dressed Basis) (10
a.m. submission only), LS-132--Live Cow/Bull Daily Purchase Report,
and LS-119--Swine Daily Report.
(a) Cattle Mandatory Reporting Forms. (See Appendix E for
samples.)
(1) LS-113--Live Cattle Daily Report (current established
prices).
(i) Lot identification (11). Enter code used to identify the lot
to the packer.
(ii) Source (12). Enter ``1'', domestic, if cattle were
purchased inside of the 50 States, or ``2'', imported, if cattle
were purchased outside of the 50 States.
(iii) Purchase type code (13). Enter the code that describes the
type of purchase.
(iv) Class code (14). Enter the code that best describes the
type of cattle.
(v) Selling basis (15a-b). For 15a, enter ``1'' if cattle were
purchased on a live basis or ``2'' if cattle were purchased on a
dressed basis. For 15b, enter ``1'' if cattle are shipped on an FOB
feedlot basis or ``2'' if cattle are delivered at the plant.
(vi) Head count (16). Enter the quantity of cattle in the lot in
number of head.
(vii) Estimated average weight (17). Enter the estimated average
weight of the lot in pounds.
[[Page 28642]]
(viii) Average price (18). Enter the price established on that
day for the lot in dollars per hundredweight.
(I) For negotiated purchases, enter the price that was agreed
upon.
(II) For formula purchases, enter the base price when
established (with estimated grading information if not yet known).
Then enter the final net price with all actual grading information
when it is known.
(III) For forward contract purchases, enter the base price when
established (with estimated grading information if not yet known).
Then enter the final net price paid on the contract with actual
grading information.
(V) For negotiated grid purchases, enter the base price when
established (with estimated grading information if not yet known).
Then enter the final net price with all actual grading information.
(ix) Percent Choice or better (19). Enter the percentage of the
number of cattle in the lot of a quality grade of Choice or better.
(x) Classification code (20). Enter the code which best
describes the quality of the majority of the cattle in the lot.
(xi) Dressing percentage (21). Enter an average dressing
percentage for the cattle in the lot. For negotiated purchases,
enter an estimate. For all other purchase types, enter the actual
average dressing percentage.
(xii) Origin (22). Enter the 2-letter postal abbreviation for
the State in which the cattle were fed to slaughter weight. For
imported cattle enter ``CN'' for Canada.
(xiii) Premiums and discounts paid (23a-h). Enter the total net
value of the adjustment for the lot (in dollars per hundredweight)
for any premiums associated with weight, quality, yield or other
expressed as a positive value and for any discounts associated with
weight, quality, yield or other expressed as a negative value in
parenthesis.
(xiv) Terms of Trade (24a-d).
(I) Packer financing (24a). Enter ``1'' (yes) or ``2'' (no) in
response to: ``Did packer provide financing agreement or arrangement
with regards to the cattle?''
(II) Delivery location (24b). Enter ``1'' if delivery terms
specify producer location, ``2'' if they specify packer's plant
location.
(III) Delivery Date (24c). Enter ``1'' if producer sets date of
delivery for slaughter unilaterally; otherwise enter ``2'' for
packer.
(IV) Delivered (24d). Enter ``1'' if negotiated purchased cattle
are to be delivered for slaughter 14 or less days from the
committed, purchased, or priced date. Enter ``2'' if they are to be
delivered for slaughter from 15 to 30 days from the date the cattle
were committed, purchased, or priced.
(2) LS-114--Live Cattle Daily Report (committed and delivered
cattle).
(i) Lot identification (11). Enter code used to identify the lot
to the packer.
(ii) Purchasing basis (12). Enter ``1'' if cattle are delivered
or ``2'' if cattle are committed.
(iii) Source (13). Enter ``1'', domestic, if cattle are
purchased within the 50 States or ``2'', imported, if cattle are
purchased outside of the 50 States.
(iv) Purchase type code (14). Enter the code that best describes
the type of purchase.
(v) Class Code (15). Enter the code that best describes the type
of cattle in the lot.
(vi) Selling basis (16). Enter ``1'' if cattle were purchased on
a live basis or a ``2'' if cattle were purchased on a dressed basis.
(vii) Head count (17). Enter the quantity of cattle in the lot
in number of head.
(viii) Origin (18). Enter the 2-letter postal abbreviation for
the State in which the cattle were fed to slaughter weight. For
imported cattle, enter ``CN'' for Canada.
(ix) Terms of Trade (19a-d). Enter when applicable, otherwise
leave blank.
(I) Packer financing (19a). Enter ``1'' (yes) or ``2'' (no) in
response to: ``Did packer provide financing agreement or arrangement
with regards to the cattle?''
(II) Delivery location (19b). Enter ``1'' if delivery terms
specify producer location, ``2'' if they specify packer's plant
location.
(III) Delivery Date (19c). Enter ``1'' if producer sets date of
delivery for slaughter unilaterally; otherwise enter ``2'' for
packer.
(IV) Delivered (19d). Enter ``1'' if negotiated purchased cattle
are to be delivered for slaughter 7 or less days from the committed,
purchased, or priced date. Enter ``2'' if they are to be delivered
for slaughter from 8 to 14 days from the date the cattle were
committed, purchased, or priced.
(3) LS-115--Live Cattle Weekly Report.
(i) Packer-Owned lot identification (11). Enter code used to
identify the lot of packer-owned cattle to the packer.
(ii) Packer-Owned source (12). Enter ``1'', domestic, if packer-
owned cattle are from within the 50 States or ``2'', imported, if
cattle are from outside of the 50 States.
(iii) Packer-Owned head count (13). Enter the quantity of
packer-owned cattle in the lot in number of head.
(iv) Packer-Owned actual carcass weight range (14). Enter the
actual average carcass weight of the lot in pounds.
(v) Packer-Owned average dressing percentage (15). Enter the
average dressing percentage of the lot of packer-owned cattle.
(vi) Percentage yield grade 3 or better (16). Enter the
percentage of packer-owned cattle in the lot of a yield grade of 3
or better.
(vii) Quality grade percentage (17). Enter the percentage of
packer-owned cattle in the lot of a quality grade of Choice or
better.
(viii) Prior week slaughtered cattle head counts (18-25). Enter
the total number of head of cattle slaughtered for the prior week
that were purchased through forward contracts, the total number of
head for cattle purchased through formula arrangements, the total
number of head of cattle purchased through negotiated cash, and the
total number of head purchased through negotiated grids, categorized
by domestic or imported sources. Enter this information once per
each week's submission.
(ix) Forward contract purchases lot identification (26). Enter
code used to identify forward contracted cattle to the packer.
(x) Forward contract purchases head count (27). Enter quantity
of forward contracted cattle in the lot in number of head.
(xi) Forward contract purchases basis level (28). Enter the
agreed upon adjustment to a future price to establish the final
price of the forward contracted cattle in dollars per one hundred
pounds.
(xii) Forward contract purchases delivery month (29). Enter the
delivery month of the cattle purchased through forward contracts as
a 3-letter abbreviation.
(xiii) Forward contract purchases delivery year (30).
(xiv) Forward contract purchases basis level month (31). Enter
the basis month which the contract was based off of. Use 3-letter
abbreviation.
(4) LS-117--Cattle Premiums and Discounts Weekly Report.
(i) Enter the premiums and discounts (in dollars per
hundredweight) expected to be in effect for the current slaughter
week for each applicable category of premium and discount (11-34).
For ``other'' categories (35-39), provide a brief description of the
basis for the premium/discount along with the value of the premium/
discount. Enter negative values in parenthesis.
(5) LS-131--Cow/Bull Plant Delivered Bids.
Enter the plant delivered bids the plant expects to have in
effect for that day in dollars per cwt. For each category.
(6) LS-132--Live Cow/Bull Daily Purchase report.
(i) Lot identification (11). Enter code used to identify the lot
to the packer.
(ii) Source (12). Enter ``1'', domestic, if cattle were
purchased inside of the 50 States, or ``2'', imported, if cattle
were purchased outside of the 50 States.
(iii) Purchase type code (13). Enter the code that describes the
type of purchase.
(iv) Class code (14). Enter the code that best describes the
type of cattle.
(v) Selling basis (15a-b). For 15a, enter ``1'' if cattle were
purchased on a live basis or ``2'' if cattle were purchased on a
dressed basis. For 15b, enter ``1'' if cattle are shipped on an FOB
feedlot basis or ``2'' if cattle are delivered at the plant.
(vi) Head count (16). Enter the quantity of cattle in the lot in
number of head.
(vii) Estimated average weight (17). Enter the estimated average
weight of the lot in pounds.
(viii) Average price (18). Enter the price established on that
day for the lot in dollars per hundredweight.
(I) For negotiated purchases, enter the final net price that was
paid.
(II) For formula purchases, enter the base price when
established (with estimated grading info if not yet known). Then
enter the final net price with all actual grading information when
it is known.
(III) For forward contract purchases, enter the base price when
established (estimated grading info if not yet known. Then enter the
final net price paid on the contract with actual grading
information.
(V) For negotiated grid purchases, enter the base price when
established (estimated grading info if not yet known). Then enter
the final net price with all actual grading information.
(ix) Classification code (19). Enter the code which best
describes the quality of the majority of the cattle in the lot.
(x) Origin (20). Enter the 2-letter postal abbreviation for the
State in which the cattle were fed to slaughter weight. For imported
cattle enter ``CN'' for Canada.
(xi) Premiums and discounts paid (21a-f). Enter the total net
value of the adjustment for
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the lot (in dollars per hundredweight) for any premiums associated
with weight, quality, yield or other expressed as a positive value
and for any discounts associated with weight, quality, yield or
other expressed as a negative value in parenthesis.
(7) LS-126--Boxed Beef Daily Report. For lots comprising
multiple items, provide information for each item in a separate
record identified with the same lot identification or purchase order
number.
(i) Lot identification or purchase order number (11). Enter code
used to identify the lot to the packer.
(ii) Destination (12). Enter ``1'', domestic, for product
shipped within the 50 States; or ``2'', exported, for product
shipped overseas; or ``3'', exported, for product shipped NAFTA
(Canada or Mexico).
(iii) Purchase type code (13). Enter the code corresponding to
the sale type of the lot of boxed beef.
(iv) Delivery period code (14). Enter the code corresponding to
the delivery time period of the lot of boxed beef.
(v) Refrigeration (15). Enter ``1'' if the product is sold in a
fresh condition with an age of 14 days or less from the date of
manufacture, ``2'' if the product is sold in a frozen condition, or
``3'' if the product is sold in a fresh condition with an age of
more than 14 days from the date of manufacture.
(vi) Class code (16). Enter the code that best describes the
class of cattle from which the boxed beef was produced.
(vii) Classification code (17). Enter the code corresponding to
the grade of the boxed beef.
(viii) Beef cut (18a-b). Enter the numerical code corresponding
to the Institutional Meat Purchase Specifications (IMPS) (3 to 4
characters) (18a) or the internal corporate descriptor used to
identify the product (18b). Descriptors must be entered consistently
for all submissions.
(ix) Trim spec code (19). Enter the code corresponding to the
trim level of the boxed beef.
(x) Weight (20). Enter the code corresponding to the relative
weight of the product. Where weight is a factor, enter ``1'' to
signify the lighter weight range, ``2'' to signify the middle weight
range, or ``3'' to signify the heavier weight range. Where weight is
not a factor, enter ``4'' to signify all weights or mixed.
(xi) Total product weight (21). Enter the total weight of the
boxed beef cut in the lot in pounds.
(xii) Price (22). Enter the price received for each boxed beef
cut in the lot in dollars per one hundred pounds, FOB Plant basis.
(xiii) USDA Certified schedule code (23). Enter the code for the
USDA Certified Program schedule, if applicable (e.g. G1, G2, etc.);
otherwise leave blank.
(xiv) Branded product code (24a-b). Enter the quality grade code
(24a) and the yield grade code (24b) that best describes the brand.
Leave blank if not applicable.
(b) Swine Mandatory Reporting Forms. (see Appendix E for
samples)
(1) LS-118--Swine Prior Day Report.
(i) Slaughtered swine lot identification (11). Enter code used
to identify the lot of slaughtered swine to the packer.
(ii) Slaughtered swine class code (12). Enter the code that best
describes the type of slaughtered swine in the lot.
(iii) Slaughtered swine purchase type code (13). Enter the code
that describes the type of purchase for the slaughtered swine in the
lot.
(iv) Slaughtered swine head count (14). Enter the quantity of
slaughtered swine in the lot in number of head.
(v) Slaughtered swine base price (15). Enter the base price
established on that day for the lot of slaughtered swine in dollars
per one hundred pounds.
(vi) Slaughtered swine average net price (16). Enter the average
net price established on that day for the lot of slaughtered swine
in dollars per one hundred pounds.
(vii) Slaughtered swine average live weight (17). Enter the
average live weight of the lot of swine in pounds if slaughtered
swine were purchased on a live basis, otherwise leave blank.
(viii) Slaughtered swine average carcass weight (18). Enter the
average carcass weight of the lot of slaughtered swine in pounds.
(ix) Slaughtered swine average sort loss (19). Enter the average
sort loss for the lot of slaughtered swine in dollars per one
hundred pounds.
(x) Slaughtered swine average backfat (20). Enter the average
backfat measurement for the lot of slaughtered swine in inches
rounded to the nearest tenth of an inch.
(xi) Slaughtered swine average loin depth (21). Enter the
average loin depth measurement for the lot of slaughtered swine in
inches rounded to the nearest tenth of an inch.
(xii) Slaughtered swine average lean percentage (22). Enter the
average lean percentage for the lot of slaughtered swine.
(xiii) Purchased swine lot identification (23). Enter code used
to identify the lot of purchased swine to the packer.
(xiv) Purchased swine ownership code (24). Enter code which best
describes the source of the purchased swine whether packer-owned,
purchased from another packer, or all other swine.
(xv) Purchased swine class code (25). Enter the code that best
describes the type of purchased swine.
(xvi) Purchased swine purchase type code (26). Enter the code
that describes the type of purchase for the purchased swine.
(xvii) Purchased swine head count (27). Enter the quantity of
purchased swine in the lot.
(xviii) Purchased swine average live weight (28). Enter the
average live weight of the lot of swine in pounds if swine were
purchased on a live basis, otherwise leave blank.
(xix) Purchased swine base price (29). Enter the base price
established on that day for the lot of purchased swine in dollars
per one hundred pounds.
(xx) Purchased swine origin (30). Enter the 2-letter postal
abbreviation for the State in which the swine were fed to slaughter
weight.
(xxi) Scheduled swine (31-44). Enter the number of head of
purchase commitment swine that were scheduled for delivery for each
of the next 14 days. Enter the total quantity currently scheduled
for each day at the time of reporting for each submission.
(2) LS-119--Swine Daily Report.
(i) Purchased swine lot identification (11). Enter code used to
identify the lot of purchased swine to the packer.
(ii) Purchased swine purchase type code (12). Enter the code
that describes the type of purchase for the swine in the lot.
(iii) Purchased swine average live weight (13). Enter the
average live weight of the lot of swine in pounds if swine were
purchased on a live basis, otherwise leave blank.
(iv) Purchased swine class code (14). Enter the code that best
describes the type of swine in the lot.
(v) Purchased swine head count (15). Enter the quantity of swine
in the lot in number of head.
(vi) Purchased swine base price (16). Enter the base price
established on that day for the lot of swine in dollars per one
hundred pounds.
(vii) Purchased swine origin (17). Enter the 2-letter postal
abbreviation for the State in which the swine were fed to slaughter
weight.
(viii) Packer-sold swine purchases (18-25). Enter the best
estimate of the total number of packer-sold swine expected to be
purchased throughout the reporting day for each purchase type and
the total number of packer-sold swine purchased up to that time of
the reporting day for each purchase type.
(ix) All other swine purchases (26-33). Enter the best estimate
of the total number of all other swine expected to be purchased
throughout the reporting day for each purchase type and the total
number of all other swine purchased up to that time of the reporting
day for each purchase type.
(3) LS-120--Swine Noncarcass Merit Premium Weekly Report.
Enter the standard noncarcass merit premiums used during the
prior slaughter week (11-15) in dollars per hundredweight. If a
range of standard noncarcass merit premiums was used, enter the low
side of the range (a) and the high side of the range (b). If only
one value was used, enter the same number in (a) and (b). If no
value for the specified merit was used, leave blank. For ``other''
categories (16-20), provide a brief description of the basis for the
premium along with the value of the premium.
(c) Lamb Mandatory Reporting Forms. (See Appendix E for samples)
(1) LS-121--Live Lamb Daily Report (current established prices).
(i) Lot identification (11). Enter code used to identify the lot
to the packer.
(ii) Source (12). Enter ``1'', domestic, if lambs were purchased
inside of the 50 States, or ``2'', imported, if lambs were purchased
outside of the 50 States.
(iii) Purchase type code (13). Enter the code that describes the
type of purchase.
(iv) Class code (14). Enter the code that best describes the
type of lambs.
(v) Selling basis (15a-b). For 15a, enter ``1'' if lambs were
purchased on a live basis or ``2'' if lambs were purchased on a
dressed basis. For 15b, enter ``1'' if lambs are shipped on an FOB
feedlot basis or ``2'' if lambs are delivered at the plant.
(vi) Head count (16). Enter the quantity of lambs in the lot in
number of head.
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(vii) Weight range (17a & 17b). Enter the lowest (17a) and
highest (17b) weights for lambs in the lot in pounds.
(viii) Estimated average weight (18). Enter the estimated
average weight of the lot in pounds.
(ix) Average price (19). Enter the price established on that day
for the lot in dollars per hundredweight.
(I) For negotiated purchases, enter the final (net) price paid.
(II) For formula purchases, enter the net price.
(III) For forward contract purchases, enter the final (net)
price paid.
(x) Percent Choice or better (20). Enter the percentage of the
number of lambs in the lot of a quality grade of Choice or better.
(xi) Classification code (21). Enter the code which best
describes the quality of the majority of the lambs in the lot.
(xii) Dressing percentage (22). Enter an average dressing
percentage for the lambs in the lot. For negotiated purchases, enter
an estimate. For all other purchase types, enter the actual average
dressing percentage.
(xiii) Origin (23). Enter the 2-letter postal abbreviation for
the State in which the lambs were fed to slaughter weight. Enter
``CN'' if lambs originate from Canada.
(xiv) Pelt Code (24). Enter the code that best describes the
type of pelt for the majority of lambs in the lot.
(xv) Premiums and discounts paid (25a-f). Enter the total net
value of the adjustment for the lot (in dollars per hundredweight)
for any premiums associated with weight, quality, or yield expressed
as a positive value and for any discounts associated with weight,
quality, or yield expressed as a negative value in parenthesis.
(2) LS-123--Live Lamb Weekly Report.
(i) Packer-Owned lot identification (11). Enter code used to
identify the lot of packer-owned lambs to the packer.
(ii) Packer-Owned source (12). Enter ``1'', domestic, if packer-
owned lambs are from within the 50 States or ``2'', imported, if
lambs are from outside of the 50 States.
(iii) Packer-Owned head count (13). Enter the quantity of
packer-owned lambs in the lot in number of head.
(iv) Packer-Owned actual carcass weight range (14a & 14b). Enter
the lowest (14a) and highest (14b) actual carcass weights for lambs
in the lot in pounds.
(v) Packer-Owned actual average carcass weight (15). Enter the
actual average carcass weight of the lot of packer-owned lambs in
pounds.
(vi) Packer-Owned average dressing percentage (16). Enter the
average dressing percentage of the lot of packer-owned lambs.
(vii) Percentage yield grade 3 or better (17). Enter the
percentage of packer-owned lambs in the lot of a yield grade of 3 or
better.
(viii) Quality grade percentage (18-). Enter the percentage of
packer-owned lambs in the lot of a quality grade of Choice or
better.
(ix) Prior week slaughtered lambs head counts (19-24). Enter the
total number of head of lambs slaughtered for the prior week that
were purchased through forward contracts, the total number of head
for lambs purchased through formula arrangements, and the total
number of head of lambs purchased through negotiated cash,
categorized by domestic or imported sources. Enter this information
once per each week's submission.
(x) Forward contract purchases lot identification (25). Enter
code used to identify forward contracted lambs to the packer.
(xi) Forward contract purchases head count (26). Enter quantity
of forward contracted lambs in the lot in number of head.
(xii) Forward contract purchases basis level (27). Enter the
agreed upon adjustment to a future price to establish the final
price of the forward contracted lambs in dollars per one hundred
pounds.
(xiii) Forward contract purchases delivery month (28). Enter the
delivery month of the lambs purchased through forward contracts as a
3-letter abbreviation.
(3) LS-124--Live Lamb Weekly Report (formula purchases).
(i) Lot identification (11). Enter code used to identify the lot
to the packer.
(ii) Source (12). Enter ``1'', domestic, if lambs are purchased
within the 50 States or ``2'', imported, if lambs are purchased
outside of the 50 States.
(iii) Head count (13). Enter the quantity of lambs in the lot in
number of head.
(iv) Total pounds (14). Enter the total quantity of lambs in the
lot in pounds.
(v) Weighted average carcass price (15). Enter the average
weighted average carcass price for the lambs in the lot in dollars
per hundredweight.
(vi) Range of prices paid (16a-b). Enter the lowest (16a) and
the highest (16b) prices paid for the lambs in the lot in dollars
per hundredweight.
(vii) Range of premiums and discounts paid (17a-b). Enter the
lowest (17a) and the highest (17b) premium and discount paid for the
lot of lambs in dollars per hundredweight. Enter negative values in
parenthesis.
(viii) Weighted average of premiums and discounts paid (18).
Enter the weighted average of the premiums and discounts paid for
the lot of lambs in dollars per hundredweight. Enter negative values
in parenthesis.
(4) LS-125--Lamb Premiums and Discounts Weekly Report.
Enter the premiums and discounts (in dollars per hundredweight)
expected to be in effect for the current slaughter week for each
applicable category of premium and discount (11-32). For ``other''
categories (33-37), provide a brief description of the basis for the
premium/ discount along with the value of the premium/discount.
Enter negative values in parenthesis.
(5) LS-128--Boxed Lamb Daily Report. For lots comprising
multiple items, provide information for each item in a separate
record identified with the same lot identification or purchase order
number.
(i) Lot identification or purchase order number (11). Enter code
used to identify the lot to the packer.
(ii) Destination/Source (12). Enter ``1'', domestic, for product
originating within the 50 States or ``2'', imported, for product
originating from outside of the 50 States.
(iii) Sale type code (13). Enter the code corresponding to the
sale type of the lot of boxed lamb.
(iv) Delivery period code (14). Enter the code corresponding to
the delivery time period of the lot of boxed lamb.
(v) Refrigeration (15). Enter ``1'' if the product is sold in a
fresh condition or ``2'' if the product is sold in a frozen
condition.
(vi) Classification code (16). Enter the code corresponding to
the grade of the boxed lamb, if applicable.
(vii) Lamb cut (17a-b). Enter the numerical code corresponding
to the Institutional Meat Purchase Specifications (IMPS) (3 to 4
characters) (17a) or the internal corporate descriptor used to
identify the product (17b). Descriptors must be entered consistently
for all submissions.
(viii) Weight (18). Enter the code corresponding to the relative
weight of the product. Where weight is a factor, enter ``1'' to
signify the lighter weight range, ``2'' to signify the middle weight
range, or ``3'' to signify the heavier weight range. Where weight is
not a factor, enter ``4'' to signify all weights or mixed.
(ix) Total product weight (19). Enter the total weight of the
boxed lamb cut in the lot in pounds.
(x) Price (20). Enter the price received for each boxed lamb cut
in the lot in dollars per one hundred pounds, FOB Plant basis.
(xi) USDA Certified schedule code (21). Enter the code for the
USDA Certified Program schedule, if applicable (e.g., CL, etc.);
otherwise leave blank.
(xii) Branded product code (22a-b). Enter the quality grade code
(22a) and the yield grade code (22b) that best describes the brand.
Leave blank if not applicable.
(6) LS-129--Lamb Carcass Report. For lots comprised of distinct
carcass weight range categories with different prices, provide
information for each weight range in a separate record identified
with the same lot identification or purchase order number.
(i) Lot identification or purchase order number (11). Enter code
used to identify the lot to the packer.
(ii) Transaction type code (12). Enter the code corresponding to
the transaction type of the lot of carcass lamb.
(iii) FOB Plant Price (13). Enter the price received for the
lamb carcasses in dollars per one hundred pounds, FOB Plant basis.
(iv) Number of carcasses (14). Enter the total number of lamb
carcasses in the lot.
(v) Classification code (15). Enter the corresponding USDA
quality grade code.
(vi) Yield grade code (16). Enter the corresponding USDA yield
grade code.
(vii) Estimated carcass weight range (17a-b). Enter the lowest
(17a) and highest (17b) weights (in pounds) that best describes the
majority of the lamb carcasses in the lot.
(viii) Delivery period code (18). Enter the code corresponding
to the time period the lamb carcasses will deliver.
(ix) Transaction basis (19). Enter ``1'' for purchased carcasses
or ``2'' for sold carcasses.
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Appendix E--Mandatory Reporting Forms
The cattle, swine, and lamb mandatory reporting forms follow the
docket.
BILLING CODE 3410-02-P
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[FR Doc. E8-10185 Filed 5-15-08; 8:45 am]
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