[Federal Register Volume 71, Number 172 (Wednesday, September 6, 2006)]
[Rules and Regulations]
[Pages 52403-52406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-14719]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
 
 The Code of Federal Regulations is sold by the Superintendent of Documents. 
 Prices of new books are listed in the first FEDERAL REGISTER issue of each 
 week.
 
 ========================================================================
 

  Federal Register / Vol. 71, No. 172 / Wednesday, September 6, 2006 / 
Rules and Regulations  

[[Page 52403]]



DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers and Stockyards Administration

7 CFR Parts 800 and 810

RIN 0580-AA90


United States Standards for Soybeans

AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION: Final rule.

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

SUMMARY: We are revising the United States Standards for Soybeans to 
change the minimum test weight per bushel (TW) from a grade determining 
factor to an informational factor. As an informational factor, TW will 
be reported on official certificates unless requested otherwise. If the 
applicant requests that TW not be determined, soybean TW will not be 
determined and not reported on the official certificate. We also are 
changing the reporting requirements for TW in soybeans from whole and 
half pounds with a fraction of a half pound disregarded to reporting to 
the nearest tenth of a pound. Additionally, we are clarifying the 
reporting requirements for TW in canola. These changes will further 
help to ensure market-relevant standards and grades and clarify 
reporting requirements.

DATES: Effective Date: September 1, 2007.

FOR FURTHER INFORMATION CONTACT: Becca Riese at GIPSA, USDA, 1400 
Independence Avenue, SW., Washington, DC, 20250-3630; Telephone (202) 
720-4116; Fax Number (202) 720-7883; e-mail [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The United States Grain Standards Act (USGSA) authorizes the 
Secretary of Agriculture to establish official standards of kind and 
class, quality, and condition for soybeans and other grains (7 U.S.C. 
76). The soybean standards appear in the regulations at 7 CFR 810.1604-
810.1605. The U.S. Standards for Grain serve as the starting point to 
define U.S. grain quality in the marketplace.
    This rule will make the following changes: (1) Revise designation 
of test weight in soybeans to be a non-grade determining informational 
factor, (2) amend the definition of ``test weight per bushel'' to 
indicate test weight for soybeans will be reported to the nearest tenth 
pound, and (3) clarify the certification requirements for test weight 
in soybeans and canola.

Designation of Minimum Test Weight Per Bushel

    Since the establishment of the United States Standards for Soybeans 
in 1940, minimum TW has been included as a mandatory grade determining 
factor and has historically been perceived as a general indicator of 
overall soybean quality. Some perceive that a higher TW, or density, is 
indicative of a higher yield of oil and protein. Research indicates, 
however, that TW is not a good indicator of the oil and protein yield 
of processed soybeans.\1\ A University of Illinois study concludes that 
the correlation coefficients between TW and protein and oil content are 
as low as 0.077 and 0.016 respectively.\2\ Our analysis of our own 
inspection data supports the researchers' findings.
---------------------------------------------------------------------------

    \1\ Hill, L.D., ``Changes in the Grain Standards Act,'' Grain 
Grades and Standards, 113-184. West, V.J., ``How Good Are Soybean 
Grades?,'' Illinois Farm Economics, no. 192, Extension Service in 
Agriculture and Home Economics, College of Agriculture, University 
of Illinois, May 1951, p. 1166.
    \2\ Hill, L.D., ``Improving Grades and Standards for Soybeans,'' 
p. 829.
---------------------------------------------------------------------------

    As part of its evaluation of TW, we conducted a statistical review 
of inspection data to determine the impact of removing TW as a grade 
determining factor on the certified grades. As discussed later in this 
document, we updated our analysis. The additional information confirms 
our earlier conclusion that the market should not anticipate grade 
inflation or deflation due to our actions.
    Based on our analysis of inspection data and other information, we 
are changing the minimum TW per bushel from a grade determining factor 
to a non-grade determining informational factor in the official U.S. 
Standards for Soybeans. Even though we are changing TW to an 
informational factor, we will still require the measurement and 
reporting of TW for each official soybean grade inspection unless 
requested otherwise. Our evaluation indicates that not all buyers of 
soybeans are interested in the TW information; consequently, we will 
allow an optional exemption in the certification reporting 
requirements.

Reporting and Certification of Minimum Test Weight Per Bushel

    We are revising 7 CFR 810.102(d) to report TW in soybeans to the 
nearest tenth of a pound. Presently, TW in soybeans is certified in 
whole and half pounds with fractions of a half pound disregarded. This 
change will bring the reporting requirements for TW into line with the 
reporting requirements for other factors in the Official Standards for 
Soybeans, such as foreign material and moisture content.

Inspection Plan Tolerances

    To reflect the proposed change of TW from a grade determining 
factor to a non-grade determining informational factor, we are revising 
the tables pertaining to soybean grade limits in 7 CFR 800.86 of the 
regulations. Shiplots, unit trains, and lash barge lots are inspected 
in accordance to a statistically based inspection plan (7 CFR 800, 
originally published at 55 FR 24030; June 13, 1990). Inspection 
tolerances, commonly referred to as breakpoints, are used to determine 
acceptable quality. Changing TW from a grade determining factor to an 
informational factor necessitates removing soybean TW breakpoints from 
the Grade Limits and Breakpoints for Soybeans table and replacing them 
in the Breakpoints for Soybean Special Grades and Factors table.

Certification

    We are clarifying the TW certification reporting requirements for 
both soybeans and canola in 7 CFR 800.162(c). For soybeans, we are 
clarifying the reporting requirements for test weight as a non-grade 
determining factor and the optional exemption for TW determination. The 
exemption will allow the applicant for inspection to request that TW 
not be determined, and

[[Page 52404]]

therefore not reported. With regard to canola, we are clarifying that 
TW in canola is only determined and reported upon request of an 
applicant.

Comment Review

    In the March 29, 2006 Federal Register (71 FR 15639-15643), we 
invited comments on our proposed rule identifying changes to the United 
States Standards for Soybeans.
    We received one comment during the 60-day comment period. The 
comment was submitted jointly by the Japan Oilseed Processors 
Association and the Japan Oil and Fat Importers and Exporters 
Association.
    The commenters were of the view that a change in the status of TW 
would adversely impact the distribution of soybean grades (that is, 
grade inflation or deflation).
    As discussed in the proposed rule, we analyzed inspection data to 
determine the impact of removing TW as a grade determining factor on 
the certified grades. The review established that in over 400,000 
soybean inspections, certified between January 1, 2001, and September 
30, 2003, 99.5 percent of the official grades would have been 
unaffected by the removal of TW as a grading factor. In preparation of 
this final rule, we updated our analysis to cover the five-year period 
from January 1, 2001, through December 31, 2005. The review indicated 
that approximately 2.2 percent of U.S. No. 2 Yellow soybeans, which is 
the common trading standard, would have graded as U.S. No. 1, if TW was 
not a grade determining factor. In other words, for the data analyzed, 
the certified grade may have improved 2.2 percent of the time, if TW 
had not been a grading factor. Further, we found that approximately 0.7 
percent of U.S. No. 3 Yellow soybeans would have certified as U.S. No. 
2, if TW was not a grade determining factor. In both instances, we 
consider the percentage change as insignificant. As a result, the 
market should not anticipate grade inflation or deflation due to this 
change.
    The commenters also were of the view that a change in the status of 
TW would result in an increase in the percentage of smaller sized 
soybeans and more broken soybeans. We have no evidence that a change in 
the status of TW from a grade determining factor to an informational 
factor will result in a higher percentage of smaller-sized soybeans or 
result in more broken soybeans or splits. As a result, the market 
should not anticipate an increase in the amount of smaller sized 
soybeans or in splits in U.S. soybeans, on average, due to this change.
    Nonetheless, buyers of U.S. soybeans may also ask for a sizing 
determination. As part of the sizing request, buyers can specify the 
sieve size. We report the percentage of the size fractions, as 
requested, to the nearest tenth in the Remarks section of the 
certificate. We use statements, such as ``(a certain percent) passing 
through (a specified round-hole sieve)'' and ``(a certain percent) 
remaining on top of (a specified sieve).''
    Further, the percentage of splits in a sample is already a grading 
factor. Additionally, small broken pieces of soybeans, which pass 
through an 8/64 round-hole sieve, are considered as foreign material, 
another grading factor. If there is a concern about splits or foreign 
material, a buyer may specify tighter limits than that allowed by 
grade. For example, a buyer may contract for U.S. No. 2 Yellow soybeans 
with splits not to exceed 10.0 percent. The specification is tighter 
than the grade limit of 20.0 percent for U.S. No. 2 Yellow soybeans.
    Buyers may also request official analysis for oil and protein 
content. In recognition of protein and oil as the true determinants of 
value in soybean processing and the markets' need to identify these 
intrinsic properties, GIPSA tests for both soybean protein and oil as 
official criteria under the USGSA.
    Therefore, we are making no change in this final rule as a result 
of the comment.

Effective Date

    As specified in the USGSA (7 U.S.C. 76(b)), amendments to the 
standards cannot become effective less than one calendar year after 
public notification, unless in the judgment of the Secretary, the 
public health, interest, or safety require that they become effective 
sooner. Making this rule effective on September 6, 2007 would be after 
the start of the marketing year, which begins September 1, 2007. There 
are inherent benefits in making this rule effective in time to have the 
same standards in place for the entire marketing year; we have 
determined that it is in the public interest to do so. There were no 
changes made in this final rule, so the standards are consistent with 
those proposed as published on March 29, 2006. For these reasons this 
final rule is effective September 1, 2007, for the beginning of the 
soybean harvest, and will facilitate domestic and export marketing of 
soybeans.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been determined to be exempt for the purposes of 
Executive Order 12866, and therefore has not been reviewed by the 
Office of Management and Budget (OMB).
    We are amending the soybean standards to change TW from a grade 
determining factor to an informational factor. We are changing the 
reporting requirements for TW in soybeans from whole and half pounds 
with a fraction of a half pound disregarded to reporting to the nearest 
tenth of a pound. In addition, we are clarifying the reporting 
requirements for TW in canola. These changes are needed to ensure 
market-relevant standards and to clarify reporting requirements. 
Further, the regulations and standards are applied equally to all 
entities.
    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) requires 
agencies to consider the economic impact of each rule on small entities 
and evaluate alternatives that would accomplish the objectives of the 
rule without unduly burdening small entities or erecting barriers that 
would restrict their ability to compete in the market.
    Under the provisions of the USGSA, grain exported from the United 
States must be officially inspected and weighed. We provide mandatory 
inspection and weighing services at 33 export facilities. All of these 
facilities are owned by multi-national corporations, large 
cooperatives, or public entities that do not meet the requirements for 
small entities established by the Small Business Administration.
    The U.S. soybean industry, including producers (approximately 
663,880), handlers (approximately 6,000 domestic elevators), traders 
(approximately 1,402 eligible soybean futures traders), processors 
(approximately 70 facilities), merchandisers, and exporters, are the 
primary users of the U.S. Standards for Soybean and utilize the 
official standards as a common trading language to market soybeans. 
Some of the entities may be small.
    The USGSA (7 U.S.C. 87f-1) requires the registration of all persons 
engaged in the business of buying grain for sale in foreign commerce. 
In addition, those individuals who handle, weigh, or transport grain 
for sale in foreign commerce must also register. The USGSA regulations 
(7 CFR 800.30) define a foreign commerce grain business as persons who 
regularly engage in buying for sale, handling, weighing, or 
transporting grain totaling 15,000 metric tons or more during the

[[Page 52405]]

preceding or current calendar year. At present, there are 92 
registrants who account for practically 95 percent of U.S. soybean 
exports, which for fiscal year (FY) 2005 totaled approximately 
23,174,129 metric tons (MT). While most of the 92 registrants are large 
businesses, some may be small.
    GIPSA has determined that this final rule will not have a 
significant economic impact on a substantial number of small entities, 
as defined in the Regulatory Flexibility Act.

Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act of 1995, the existing 
information collection requirements are approved under OMB Number 0580-
0013. An insignificant change in burden will result from the soybean 
informational factor change. However, any burden measurement, as a 
result of this change, will remain within the previously approved 
information collection requirements. Accordingly, no further OMB 
clearance is required under the Paperwork Reduction Act.

E-Government Act Compliance

    We are committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This action is not intended to have a retroactive 
effect. The USGSA provides in Section 87g that no State or subdivision 
may require or impose any requirements or restrictions concerning the 
inspection, weighing, or description of grain under the USGSA. 
Otherwise, this final rule will not preempt any State or local laws, 
regulations, or policies, unless they present any irreconcilable 
conflict with this rule. There are no administrative procedures that 
must be exhausted prior to any judicial challenge to the provisions of 
this final rule.

List of Subjects

7 CFR Part 800

    Administrative practice and procedure, Grains, Conflicts of 
interest, Exports, Freedom of information, Intergovernmental relations, 
Penalties, Reporting and recordkeeping requirements.

7 CFR Part 810

    Exports, Grains.

0
For reasons set out in the preamble, 7 CFR parts 800 and 810 are 
amended as follows:

PART 800--GENERAL REGULATIONS

0
1. Revise the authority citation for part 800 to read as follows:

    Authority: 7 U.S.C. 71-87k.


0
2. In Sec.  800.86 (c)(2), revise tables 17 and 18 to read as follows:


Sec.  800.86  Inspection of shiplot, unit train, and lash barge grain 
in single lots.

* * * * *
    (c) * * *
    (2) * * *

                                             Table 17.--Grade Limits (GL) and Breakpoints (BP) for Soybeans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Maximum limits of--
                                                     ---------------------------------------------------------------------------------------------------
                                                                  Damaged kernels              Foreign material    Splits (percent)    Soybeans of other
                                                     ----------------------------------------      (percent)     --------------------  colors (percent)
                        Grade                            Heat-damaged       Total (percent)  --------------------                    -------------------
                                                           (percent)     --------------------
                                                     --------------------                        GL        BP        GL        BP        GL        BP
                                                         GL        BP        GL        BP
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1..........................................       0.2       0.2       2.0       0.8       1.0       0.2      10.0       1.6       1.0       0.7
U.S. No. 2..........................................       0.5       0.3       3.0       0.9       2.0       0.3      20.0       2.2       2.0       1.0
U.S. No. 3..........................................       1.0       0.5       5.0       1.2       3.0       0.4      30.0       2.5       5.0       1.6
U.S. No. 4..........................................       3.0       0.9       8.0       1.5       5.0       0.5      40.0       2.7      10.0       2.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Soybeans that are purple mottled or stained which will not be graded higher than U.S. No. 3.
\2\ Soybeans that are materially weathered which will not be graded not higher than U.S. No. 4.


      Table 18.--Breakpoints for Soybean Special Grades and Factors
------------------------------------------------------------------------
     Special grade or factor              Grade limit         Breakpoint
------------------------------------------------------------------------
Garlicky.........................  5 or more per 1,000                 2
                                    grams.
Infested.........................  Same as in Sec.                     0
                                    810.107.
Soybeans of other colors.........  Not more than 10.0%.....          2.3
Moisture.........................  As specified by contract          0.3
                                    or load order grade.
Test Weight......................  As specified by contract         -0.4
                                    or load order.
------------------------------------------------------------------------

* * * * *

0
3. In Sec.  800.162, revise paragraph (a) and add paragraph (c) to read 
as follows:


Sec.  800.162  Certification of grade; special requirements.

    (a) General. Except as provided in paragraph (c) of this section, 
each official certificate for grade shall show:
    (1) The grade and factor information required by the Official U.S. 
Standards for Grain;
    (2) The test weight of the grain, if applicable;
    (3) The moisture content of the grain;
    (4) The results for each official factor for which a determination 
was made;
    (5) The results for each official factor that determined the grade 
when the grain is graded other that U.S. No. 1;
    (6) Any other factor information considered necessary to describe 
the grain; and
    (7) Any additional factor results requested by the applicant for 
official factors defined in the Official U.S. Standards for Grain.
* * * * *
    (c) Test weight for canola and soybeans. Official canola inspection 
certificates will show, in addition to the requirements of paragraphs 
(a) and (b) of this section, the official test weight per bushel only 
upon request by the

[[Page 52406]]

applicant. Official soybean inspection certificates will show, in 
addition to the requirements of paragraphs (a) and (b) of this section, 
the official test weight per bushel unless the applicant requests that 
test weight not be determined. Upon request, soybean test weight 
results will not be determined and/or reported on the official 
certificate.
* * * * *

PART 810--OFFICIAL UNITED STATES STANDARDS FOR GRAIN

0
4. Revise the authority citation for part 810 to read as follows:

    Authority: 7 U.S.C. 71-87k.


0
5. In Sec.  810.102, revise paragraph (d) to read as follows:


Sec.  810.102  Definition of other terms.

* * * * *
    (d) Test weight per bushel. The weight per Winchester bushel 
(2,150.42 cubic inches) as determined using an approved device 
according to procedures prescribed in FGIS instructions. Test weight 
per bushel in the standards for corn, mixed grain, oats, sorghum, and 
soybeans is determined on the original sample. Test weight per bushel 
in the standards for barley, flaxseed, rye, sunflower seed, triticale, 
and wheat is determined after mechanically cleaning the original 
sample. Test weight per bushel is recorded to the nearest tenth pound 
for corn, rye, soybeans, triticale, and wheat. Test weight per bushel 
for all other grains, if applicable, is recorded in whole and half 
pounds with a fraction of a half pound disregarded. Test weight per 
bushel is not an official factor for canola.
* * * * *

0
6. Revise Sec.  810.1604 to read as follows:


Sec.  810.1604   Grades and grade requirements for soybeans.

----------------------------------------------------------------------------------------------------------------
                                                                               Grades U.S. Nos.
                       Grading factors                       ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
                                                                          Maximum percent limits of:
                                                             ---------------------------------------------------
Damaged kernels:
    Heat (part of total)....................................          0.2          0.5          1.0          3.0
        Total...............................................          2.0          3.0          5.0          8.0
    Foreign material........................................          1.0          2.0          3.0          5.0
    Splits..................................................         10.0         20.0         30.0         40.0
    Soybeans of other colors: \1\...........................          1.0          2.0          5.0         10.0
                                                             ---------------------------------------------------
                                                                           Maximum count limits of:
                                                             ---------------------------------------------------
Other material:
    Animal filth............................................            9            9            9            9
    Caster beans............................................            1            1            1            1
    Crotalaria seeds........................................            2            2            2            2
    Glass...................................................            0            0            0            0
    Stones \2\..............................................            3            3            3            3
    Unknown foreign substance...............................            3            3            3            3
        Total \3\...........................................           10           10           10           10
                                                             ---------------------------------------------------
U.S. Sample grade are Soybeans that:
(a) Do not meet the requirements for U.S. Nos. 1, 2, 3, or 4; or
(b) Have a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or
(c) Are heating or of distinctly low quality.
----------------------------------------------------------------------------------------------------------------
\1\ Disregard for Mixed soybeans.
\2\ In addition to the maximum count limit, stones must exceed 0.1 percent of the sample weight.
\3\ Includes any combination of animal filth, castor beans, crotalaria seeds, glass, stones, and unknown
  substances. The weight of stones is not applicable for total other material.


James E. Link,
Administrator, Grain Inspection, Packers and Stockyards Administration.
 [FR Doc. E6-14719 Filed 9-5-06; 8:45 am]
BILLING CODE 3410-KD-P