[Federal Register Volume 76, Number 112 (Friday, June 10, 2011)]
[Proposed Rules]
[Pages 34004-34007]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14481]
[[Page 34004]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1170
RIN 0581-AD12
[Doc. AMS-DA-10-0089; DA-11-01]
Dairy Product Mandatory Reporting
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule with request for comments.
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SUMMARY: The Mandatory Price Reporting Act of 2010 amended section
273(d) of the Agricultural Marketing Act of 1946 (the Act), requiring
the Secretary of Agriculture (Secretary) to establish an electronic
reporting system for certain manufacturers of dairy products to report
sales information for a mandatory dairy product reporting program. The
amendment further stated that the Secretary shall publish the
information obtained for the preceding week not later than 3 p.m.
Eastern Time on Wednesday of each week.
This proposed rule offers procedures for the Agricultural Marketing
Service (AMS) to implement the amendment to section 273(d) the Act and
announces the intention of AMS to request approval by the Office of
Management and Budget (OMB) of associated information collection
requirements. This proposed rule requests comments concerning changes
proposed in this rule.
DATES: Comments must be received by August 9, 2011.
ADDRESSES: Interested persons are invited to submit written comments
via the Federal eRulemaking portal at http://www.regulations.gov or to
John R. Mengel, Chief Economist, USDA/AMS/Dairy Programs, Office of the
Chief Economist, STOP 0229-Room 2753, 1400 Independence Ave, SW.,
Washington, DC 20250-0229, fax: (202) 720-2454. All comments should
reference the docket number as well as the date and page number of this
issue of the Federal Register. Comments will be made available for
public inspection in the above office during regular business hours or
can be viewed at http://www.regulations.gov. All comments received will
be posted without change, including any personal information provided.
FOR FURTHER INFORMATION CONTACT: John R. Mengel, Chief Economist, USDA/
AMS/Dairy Programs, Office of the Chief Economist, STOP 0229-Room 2753,
1400 Independence Ave, SW., Washington, DC 20250-0229,
[email protected].
SUPPLEMENTARY INFORMATION: This proposed rule is issued pursuant to the
Agricultural Marketing Act of 1946 [7 U.S.C. 1621 et seq.], as amended
November 22, 2000, by Public Law 106-532, 114 Stat. 2541; May 13, 2002,
by Public Law 107-171, 116 Stat. 207; and September 27, 2010, by Public
Law 111-239, 124 Stat. 2502.
Background: The Dairy Product Mandatory Reporting Program was
established on August 2, 2007, on an interim final basis (72 FR 36341).
A final rule (73 FR 34175) became effective June 22, 2008. The National
Agricultural Statistics Service (NASS) currently collects information
for the program, and AMS provides verification and enforcement
functions for the program. NASS publishes sales information for cheddar
cheese, butter, dry whey, and nonfat dry milk (NFDM) on a weekly basis.
NASS began publishing cheddar cheese sales information in 1997 and
began publishing butter, NFDM, and dry whey sales information in 1998.
Information was collected on a voluntary basis before the Dairy Product
Mandatory Reporting Program became effective. Any manufacturer that
processes and markets less than 1 million pounds of the applicable
dairy products per calendar year is exempt from these reporting
requirements.
AMS is responsible for verifying the sales information submitted by
reporting entities to NASS. AMS currently visits larger entities that
account for 80 percent of the yearly reported product volume of each
specified dairy product at least once annually. AMS visits one-half of
entities that account for the remaining 20 percent each year, visiting
each such entity at least once every other year. During each visit, AMS
reviews applicable sales transactions records for at least the 4 most
recent weeks. In some cases, AMS may review sales records for periods
of up to 2 years. AMS verifies that sales transactions match the
information reported to NASS and that there are no applicable sales
transactions not reported to NASS. Noncompliance, appeals, and
enforcement procedures are administered by AMS.
The Mandatory Price Reporting Act of 2010 (Pub. L. 111-239, Sept.
27, 2010) amended section 273(d) of the Act (7 U.S.C. 1637b) to require
that the Secretary establish an electronic reporting system for
manufacturers of dairy products to report certain market information
for the mandatory dairy product reporting program. The amendment
further stated that the Secretary shall publish the information
obtained under this section for the preceding week not later than 3
p.m. Eastern Time on Wednesday of each week. This proposed rule
includes regulatory changes for implementing these provisions and
transferring applicable data collection responsibilities to AMS. This
proposed rule announces the intention of AMS to request approval of
associated information collection requirements by the Office of
Management and Budget (OMB). Comments are requested concerning changes
proposed in this rule.
Executive Orders 12866
This proposed rule has been determined to not be significant for
purposes of Executive Orders 12866 and therefore has not been reviewed
by the Office of Management and Budget with respect to this Executive
Order.
Executive Order 12988 Civil Justice Reform
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. The amendments contained in this proposed rule
are not intended to have a retroactive effect.
Regulatory Flexibility Act
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of
this proposed rule on small entities and has determined that this
proposed rule would not have a significant economic impact on a
substantial number of small entities. The purpose of the RFA is to fit
regulatory actions to the scale of businesses subject to such actions
in order that small businesses will not be unduly or disproportionately
burdened.
Small businesses in the dairy product manufacturing \1\ industry
have been defined by the Small Business Administration (SBA) as those
processors employing not more than 500 employees. For purposes of
determining a processor's size, if the plant is part of a larger
company operating multiple plants that collectively exceed the 500-
employee limit, the plant will be considered a large business even if
the local plant has fewer than 500 employees. According to U.S. Census
Bureau Statistics of U.S. Businesses, there were 1,583 dairy
manufacturing establishments in the United States in 2008. Of these
businesses, 1,039
[[Page 34005]]
establishments had fewer than 500 employees, and 544 establishments had
greater than 500 employees (http://www.census.gov/econ/susb/, U.S.
Census Bureau, 2008 County Business Patterns).
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\1\ North American Industry Classification System (NAICS) code
3115.
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The dairy manufacturing establishments included in U.S. Census
Bureau statistics include manufacturers of all types of dairy products.
The number of plants that produce butter, cheese, NFDM, and dry whey
with the precise specifications included in the mandatory reporting
requirements is much lower than this. Furthermore, those manufacturers
that process and market less than 1 million pounds of the applicable
dairy products annually are exempt from reporting sales data.
Currently, NASS conducts an annual validation survey that serves to
determine which plants are required to report. In 2010, this survey
included 182 plants. Based upon the survey, there were 88 dairy product
plants that were subject to mandatory reporting of sales data. There
were 52 reporting entities that reported data for one or more plants.
The annual cost for plants to complete this survey is estimated at
approximately $9 per plant. AMS intends to continue to conduct the
survey. Based upon company profile information available on the
Internet, AMS estimates that almost half of the reporting entities are
considered small businesses under the criteria established by the SBA.
AMS estimates that the annual cost per plant for reporting sales
information for products included in the surveys is approximately $511.
The majority of reporting entities report data to NASS through a secure
web-based application. Less than three plants regularly fax their
information, and it is believed that these plants do have Internet
access. Therefore, there would be no significant start-up costs
anticipated for the reporting entities as a result of implementing this
rule as proposed.
Under the current Dairy Product Mandatory Reporting Program, dairy
manufacturers are required to maintain records for verification
purposes for a 2-year period. This proposed rule makes no changes to
this requirement. These records are maintained as part of the normal
course of business. Thus, there is no additional burden or cost
associated with the maintenance of these records. Therefore, in total,
this proposed rule will not have a significant economic impact on a
substantial number of small entities.
Paperwork Reduction Act
The Act requires persons engaged in manufacturing dairy products to
provide to USDA certain information including the price, quantity, and
moisture content, where applicable, of dairy products sold by the
manufacturer. In accordance with the Paperwork Reduction Act (44 U.S.C.
chapter 35), AMS announces its intention to request an approval of
information collection and recordkeeping pursuant to these
requirements.
Title: Dairy Products Mandatory Sales Reporting Program.
OMB Number: 0581-NEW.
Expiration Date of Approval: 3 years from date of OMB approval.
Type of Request: New information collection.
Abstract: The information collection requirements in the request
are essential to carry out the intent of the Agricultural Marketing Act
of 1946 as amended (the Act).
The Act requires each manufacturer to report to the Secretary
information concerning the price, quantity, and moisture content (where
applicable) of dairy products sold by the manufacturer. Dairy products
reported include cheddar cheese, butter, dry whey, and NFDM. Dairy
manufacturers report information for these products if the products
meet certain product specifications.
The collection and reporting of sales information, as required by
the Act, have been the responsibility of NASS. NASS currently collects
the information as part of the information collection package OMB 0535-
0020. NASS allows manufacturers to submit information through a secure
web-based application, by e-mail, or by fax. Manufacturers are required
to submit information to NASS by 12 noon on Wednesday on all applicable
products during the 7 days ending 12 midnight of the previous Saturday,
local time of the plant or storage facility where the sales are made.
NASS compiles and aggregates the information reported by the reporting
entities and publishes the information each Friday morning. If a
Federal holiday falls on a Tuesday or Wednesday, NASS contacts
manufacturers via e-mail or phone concerning the applicable report
deadline.
Manufacturers that process and market less than 1 million pounds of
applicable dairy products annually are exempt from reporting
requirements. Each year, dairy manufacturers complete an Annual
Validation Worksheet for NASS to determine which dairy manufacturers
are exempt and to ascertain if valid information is being supplied.
NASS currently collects the information as part of the information
collection package OMB 0535-0020.
The Mandatory Price Reporting Act of 2010 amended subsection 273(d)
of the Act, requiring the Secretary to establish an electronic
reporting system to collect the required information and to publish,
not later than 3 p.m. Eastern Time on Wednesday of each week, a report
containing the preceding week's information. The information collection
and reporting requirements have been the responsibility of NASS. Under
this proposed rule AMS would assume this responsibility. NASS would no
longer collect price, quantity, or moisture content (where applicable)
information for cheddar cheese, butter, NFDM, or dry whey, and NASS
would no longer collect the associated annual validation information.
The forms associated with this data collection would be removed from
OMB 0535-0020 and would be included in an AMS collection package, OMB
0581-NEW.
The proposed provisions have been reviewed, and every effort has
been made to minimize any unnecessary recordkeeping costs or
requirements. The proposed electronic submission forms would require
the minimum information necessary to effectively carry out the
requirements of the program, and their use is necessary to fulfill the
intent of the Act. It is expected that no outside technical expertise
will be needed. The forms are simple, easy to understand, and place as
small a burden as possible on respondents.
To assist the industry in achieving compliance, educational and
outreach sessions will be held prior to implementation. AMS will assist
reporting entities in understanding requirements for submitting data
through electronic means specified by AMS. In addition, AMS plans to
beta test the electronic-submission technology before implementation,
and all entities required to report will be encouraged to participate
in the beta-testing program. Any feedback received during this outreach
and testing period will be used to correct technical problems.
Collecting the information will coincide with normal industry
business practices. The timing and frequency of collecting information
are intended to meet the needs of the program while minimizing the
amount of work necessary to submit the required reports. The
information to be collected by AMS, as proposed in this rule, is
identical to the information currently collected by NASS. NASS
currently allows manufacturers to submit information through a secure
web-based
[[Page 34006]]
application, by e-mail, or by fax. This proposed rule will require
manufacturers to submit information only by electronic means specified
by AMS. AMS would specify that each manufacturer submit the information
using a secure Internet connection that includes a user name and
password. The requirement that reporting entities submit information
electronically is in accordance with the Act.
The frequency of data collection will not change. Reporting
entities are now required to report information to NASS by 12 noon on
Wednesday. This proposed rule would require reporting entities to
report the same information to AMS by 12 noon local time of the
reporting entities on Tuesday. This change is necessary to allow AMS
personnel time to review and compile data and to publish the
information by 3 p.m. Eastern Time on Wednesday as required by the Act.
If a Federal holiday falls on Monday through Wednesday of a particular
week, the due date for report submission may be adjusted. Prior to the
beginning of each calendar year, this rule proposes that AMS shall
inform reporting entities of the times and dates that reports are due.
Information collection requirements that are included in this
proposal include:
(1) Dairy Products Sales, Cheddar Cheese
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 20 minutes per week for each report
submitted.
Respondents: Cheddar cheese manufacturers. Each reporting entity
may report for a single cheddar cheese plant or it may report for more
than one cheddar cheese plant, depending upon how the business is
structured.
Estimated Number of Respondents: 28.
Estimated Total Annual Burden on Respondents: 485 hours.
(2) Dairy Products Sales, Butter
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 20 minutes per week for each report
submitted.
Respondents: Butter manufacturers. Each reporting entity may report
for a single butter plant or it may report for more than one butter
plant, depending upon how the business is structured.
Estimated Number of Respondents: 20.
Estimated Total Annual Burden on Respondents: 347 hours.
(3) Dairy Products Sales, Nonfat Dry Milk
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 20 minutes per week for each report
submitted.
Respondents: NFDM manufacturers. Each reporting entity may report
for a single NFDM plant or it may report for more than one NFDM plant,
depending upon how the business is structured.
Estimated Number of Respondents: 26.
Estimated Total Annual Burden on Respondents: 451 hours.
(4) Dairy Products Sales, Dry Whey
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 20 minutes per week for each report
submitted.
Respondents: Dry whey manufacturers. Each reporting entity may
report for a single dry whey plant or it may report for more than one
dry whey plant, depending upon how the business is structured.
Estimated Number of Respondents: 21.
Estimated Total Annual Burden on Respondents: 364 hours.
(5) Annual Validation Survey
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 20 minutes per year for each report
submitted.
Respondents: Dairy manufacturers. Each reporting entity may report
for a single plant or it may report for more than one plant, depending
upon how the business is structured.
Estimated Number of Respondents: 180.
Estimated Total Annual Burden on Respondents: 60 hours.
(6) Survey Follow-Up, Verification
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 5 minutes for each contact from
AMS.
Respondents: Dairy manufacturers. Each reporting entity may report
for a single plant or it may report for more than one plant, depending
upon how the business is structured.
Estimated Number of Respondents: 7 per week.
Estimated Total Annual Burden on Respondents: 30 hours.
Copies of this information collection and related instructions can
be obtained without charge from John Mengel, Chief Economist,
[email protected].
Request for Public Comment Under the Paperwork Reduction Act
Comments are invited on:
(a) Whether the proposed collection of information is necessary for
the proper performance of the functions of the agency, including
whether the information will have practical utility;
(b) the accuracy of the agency's estimate of the burden of the
proposed collection of information including the validity of the
methodology and assumptions used;
(c) ways to enhance the quality, utility, and clarity of the
information to be collected; and
(d) ways to minimize the burden of the collection of information on
those who are to respond.
All responses to this notice will become a matter of public record
and be summarized in the request for OMB approval.
Except as otherwise directed by the Secretary of Agriculture or the
U.S. Attorney General for enforcement purposes, no officer, employee,
or agent of the United States shall provide the public any information,
statistics, or documents obtained from or submitted by any person under
the Act that does not ensure preservation of confidentiality regarding
the identity of persons, including parties to contracts and proprietary
business information. All report forms include a statement that
individual reports are kept confidential.
With respect to the application of the Privacy Act of 1974 (5
U.S.C. 552a) to the maintenance of records required by the Act, the
Dairy Products Sales survey population consists of dairy product
manufacturers. Data collected by this survey relates to manufacturers'
operations and transactions and not to those of individuals. Records
maintained at business sites for verification of information that would
be reported to AMS include contracts, agreements, receipts and other
materials related to sales of specific dairy products. No records about
individuals would be maintained by AMS for this survey, and AMS
believes that none would be part of these maintained business papers.
Request for Public Comment on Proposals To Change to 7 CFR Part 1170
This rule proposes that AMS be responsible for collection of sales
data and reporting; that reporting entities be required to submit, by
an electronic means specified by AMS, a report to AMS by Tuesday, 12
noon local time of reporting entities (unless adjusted because of a
Federal holiday and communicated to dairy product manufacturers by AMS
before the beginning of the calendar year), of all
[[Page 34007]]
products sold as specified in Sec. 1170.8 during the 7 days ending 12
midnight of the previous Saturday, local time of the plant or storage
facility where the sales are made; and that not later than 3 p.m.
Eastern Time on Wednesday of each week (unless adjusted because of a
Federal holiday and publicly announced by AMS before the beginning of
the calendar year), AMS shall publish aggregated information obtained
from manufacturers or other persons of all products sold as specified
in Sec. 1170.8. Conforming changes are proposed where necessary since
data collection and publication responsibilities would be transferred
from NASS to AMS. AMS specifically requests comments concerning changes
proposed in this rule.
AMS will review all timely comments received and will consider
these comments in developing a final rule.
List of Subjects in 7 CFR Part 1170
Dairy products, Reporting and recordkeeping requirements, Cheese,
Butter, Whey, Nonfat dry milk.
For the reasons set forth in the preamble, it is proposed that 7
CFR part 1170 be amended as follows:
PART 1170--DAIRY PRODUCT MANDATORY REPORTING
1. The authority citation for 7 CFR part 1170 is amended to read as
follows:
Authority: 7 U.S.C. 1637-1637b, as amended by Public Law 106-
532, 114 Stat. 2541; Public Law 107-171, 116 Stat. 207; and Public
Law. 111-239, 124 Stat. 2501.
2. Revise Sec. 1170.2 to read as follows:
Sec. 1170.2 Act.
Act means the Agricultural Marketing Act of 1946, 7 U.S.C. 1621 et
seq., as amended by the Dairy Market Enhancement Act of 2000, Public
Law 106-532, 114 Stat. 2541; the Farm Security and Rural Investment Act
of 2002, Public Law 107-171, 116 Stat. 207; and the Mandatory Price
Reporting Act of 2010, Public Law 111-239, 124 Stat. 2501.
3. Revise Sec. 1170.7 to read as follows:
Sec. 1170.7 Reporting requirements.
(a) All dairy product manufacturers, with the exception of those
who are exempt as described in Sec. 1170.9, shall submit a report
weekly to the Agricultural Marketing Service (AMS) by Tuesday, 12 noon
local time of reporting entities, on all products sold as specified in
Sec. 1170.8 during the 7 days ending 12 midnight of the previous
Saturday, local time of the plant or storage facility where the sales
are made. If a Federal holiday falls on Monday through Wednesday of a
particular week, the due date for report submission may be adjusted.
Prior to the beginning of each calendar year, AMS shall release, to
manufacturers that are required to report, the times and dates that
reports are due. The report is to be submitted by electronic means
specified by AMS and shall indicate the name, address, plant
location(s), quantities sold, total sales dollars or dollars per pound
for the applicable products, and the moisture content where applicable.
Each sale shall be reported for the time period when the transaction is
completed, i.e. the product is ``shipped out'' and title transfer
occurs. Each sale shall be reported either f.o.b. plant if the product
is ``shipped out'' from the plant or f.o.b. storage facility location
if the product is ``shipped out'' from a storage facility. In
calculating the total dollars received or dollars per pound, the
reporting entity shall neither add transportation charges incurred at
the time the product is ``shipped out'' or after the product is
``shipped out'' nor deduct transportation charges incurred before the
product is ``shipped out.'' In calculating the total dollars received
or dollars per pound, the reporting entity shall not deduct brokerage
fees or clearing charges paid by the manufacturer.
(b) Manufacturers or other persons storing dairy products are
required to report, on a monthly basis, stocks of dairy products (as
defined in Sec. 1170.4) on hand, on the appropriate forms supplied by
the National Agricultural Statistic Service. The report shall indicate
the name, address, and stocks on hand at the end of the month for each
storage location.
4. Revise Sec. 1170.8 (a)(3)(ii) to read as follows:
Sec. 1170.8 Price reporting specifications.
* * * * *
(a) * * *
(3) * * *
(ii) 500-pound barrels: Report weighted average moisture content of
cheese sold. AMS will adjust price to a benchmark of 38.0 percent based
on standard moisture adjustment formulas. Exclude cheese with moisture
content exceeding 37.7 percent.
* * * * *
5. Add Sec. 1170.17 to read as follows:
Sec. 1170.17 Publication of statistical information.
Not later than 3 p.m. Eastern Time on the Wednesday of each week,
AMS shall publish aggregated information obtained by manufacturers or
other persons of all products sold as specified in Sec. 1170.8. If a
Federal holiday falls on Monday through Wednesday of a particular week,
the due date for report publication may be adjusted. The public shall
be notified of report times prior to the beginning of the calendar
year.
Dated: June 7, 2011.
Ellen King,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2011-14481 Filed 6-9-11; 8:45 am]
BILLING CODE 3410-02-P