[Federal Register Volume 85, Number 89 (Thursday, May 7, 2020)]
[Proposed Rules]
[Pages 27163-27167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09010]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1250

[Document No. AMS-LP-19-0113]


Egg Research and Promotion; Reapportionment

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would adjust representation on the American 
Egg Board (Board), established under the Egg Research and Consumer 
Information Act of 1974 (Act), and outlines changes to geographic areas 
based on sustained changes in egg production in several States. The Egg 
Research and Promotion Order (Order) establishes a Board composed of 18 
members. Currently, the 48 contiguous States are divided into 6 areas 
with 3 members representing each area. This proposed rule would reduce 
the number of geographic areas from six to three. The number of Board 
members representing each geographic area would change to six. The 
total Board membership would remain at 18.

DATES: Submit comments on or before June 8, 2020.

ADDRESSES: Comments should be posted online at www.regulations.gov. 
Comments received will be posted without change, including any personal 
information provided. All comments should reference the docket number 
AMS-LP-19-0113, the date of submission, and the page number of this 
issue of the Federal Register. Comments may also be sent to Craig 
Shackelford, Agricultural Marketing Specialist; Research and Promotion 
Division; Livestock and Poultry Program, AMS, USDA; Room 2608-S, STOP 
0251, 1400 Independence Avenue SW, Washington, DC 20250-0251; or via 
fax to (202) 720-1125. Comments will be made available for public 
inspection at the above address during regular business hours or via 
the internet at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Craig Shackelford, Research and 
Promotion Division, at (470) 315-4246; fax (202) 720-1125; or by email 
at [email protected].

SUPPLEMENTARY INFORMATION: 

Background and Proposed Action

    The Act authorizes the Secretary to establish an Egg Board composed 
of egg producers or representatives of egg producers appointed by the 
Secretary so that the representation of egg producers

[[Page 27164]]

on the Board reflects, to the extent practicable, the proportion of 
eggs produced in each geographic area of the United States. 7 U.S.C. 
Sec.  2707(b). This proposal invites comments on changing the Board's 
membership under the Order. The Board administers the Order with 
oversight by the U.S Department of Agriculture (USDA).
    The Order outlines the geographic representation of the current 18-
member board, composed of members from six distinct geographical areas. 
To ensure that representation on the Board remains representative of 
the industry, Sec.  1250.328 of the Order provides for reapportionment 
of Board membership based on the Board's periodic review of production 
by geographic area. This periodic review can occur at any time based on 
changes in egg production in various geographical areas; however, the 
Order requires that the area distribution be reviewed at least every 5 
years. Sections 1250.328(d) and (e) of the Order provide that any 
changes in the delineation of the geographical areas and the area 
distribution of the Board be determined by the percentage of total U.S. 
egg production.

Reapportionment

    The Board and the Agricultural Marketing Service (AMS) reviewed 
production data to determine what, if any, changes are needed in the 
distribution of Board membership. The Board and AMS verified certain 
shifts in production trends. Section 8 of the Act (7 U.S.C. 2707) 
provides for a Board of not more than 20 members. Section 1250.328 of 
the Order provides for an 18-member Board and contemplates changes to 
the Board by determining the percentage of United States egg production 
in each area times 18 (total Board membership) and rounding to the 
nearest whole number. Using the calculation for the North Atlantic 
region results in 2 members while the calculation for the other 5 
regions result in 3 members each, for a total 17 members, one less than 
the number stated in the Order. Therefore, regions must be changed so 
that the 18-member Board can be established. Table 1 shows that 
reducing regions from six to three will expand the number of States 
included in each region and suggests that the grouping of more States 
into fewer regions would improve consistency in the proportion of small 
versus large farms represented on the Board.

                                            Table 1--Regional Poultry Farm Distribution--Current and Proposed
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                         Region                                     Small firms
                                                                       Large                       Total          States
                                                                    <$1,000,000
                                                                    $1,000,000+           ..............  ..............
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                                                                Current Geographical Area
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I.......................................................          27,243             93%           2,172              7%          29,415              13
II......................................................          29,077             76%           9,042             24%          38,119               9
III.....................................................          27,774             95%           1,575              5%          29,349               5
IV......................................................          24,652             96%           1,102              4%          25,754              10
V.......................................................           7,292             96%             312              4%           7,604               3
VI......................................................          32,750             97%           1,108              3%          33,858              10
                                                                 148,788             91%          15,311              9%         164,099              50
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                                                               Proposed Geographical Area
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I.......................................................          63,513             87%           9,891             13%          73,404              21
II......................................................          48,482             92%           4,299              8%          52,781              10
III.....................................................          36,793             97%           1,121              3%          37,914              19
                                                                 148,788             91%          15,311              9%         164,099              50
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    This table also shows the distribution of farms represented by 
size, and the proportion of farms that are small versus large. With the 
inclusion of more states into fewer regions, the proportion of small 
versus large farms becomes less variable. For example, in Regions I and 
II in the current structure, 93 percent and 76 percent, respectively, 
of the firms in these regions are classified as small. When the 
structure is changed, as proposed, the two regions are more or less 
combined, and the new Region I is composed of 87 percent small firms. 
The table shows less variation in size between the three proposed new 
regions than there is in the current structure.
    Section 1250.326 of the Order establishes a Board, composed of 18 
egg producers or representatives of egg producers, and 18 specific 
alternates, appointed by the Secretary from nominations submitted by 
eligible organizations, associations, or cooperatives, or by other 
producers pursuant to Sec.  1250.328. The current 18-member Board is 
composed of 3 members representing each of the 6 regions. No changes to 
the total number of members (18 members with 18 alternates) is 
proposed. However, regions would be reduced to three from six and each 
region would include more States.
    Pursuant to the requirements of the Order, the Board began its most 
recent review of Board member apportionment in 2019. Production data 
from the 2018 National Agricultural Statistics Service (NASS) report 
was used to establish the percentage of U.S. egg production in each 
area. The goal of this reapportionment of Board members is to ensure 
representation on the Board remains consistent with the Act and Order 
by recognizing production shifts over time. If finalized, these changes 
would become effective with the Secretary's appointments for terms 
beginning in the year 2021.
    The Board and AMS recognize that shifts in production have resulted 
in the Northeast region no longer being proportionately represented on 
the Board. The Board and AMS also found that industry consolidation has 
also contributed to a more limited number of egg producing entities in 
each region. The Board and AMS desire a structure that allows the full 
representation of the egg producing entities. The Board and AMS have 
found that it is increasingly difficult for State nominating 
organizations to present an appropriate number of candidates each year. 
By reducing the number of regions and increasing the geographic size of 
regions, the Board and AMS believe that more egg producing entities may 
be represented on the Board.
    This proposed rule would result in the proportionate representation 
of each

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geographic area and increase the number of egg producing entities 
represented in each geographic area. The Board and AMS have determined 
that these changes will better represent the distribution of egg 
production and enable eligible nominating organizations to more easily 
identify potential nominees.
    In accordance with Sec.  1250.328(e) of the Order, the Board has 
recommended changes to the number and composition of geographic regions 
represented on the Board.
    The current and proposed representation are indicated in the 
following two tables:

                  Table 2--Current Geographical Distribution and Number of Members on the Board
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                                                Current number
                Geographic area                   of members                   Represented States
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I--North Atlantic.............................               3  Connecticut, Delaware, Maine, Maryland,
                                                                 Massachusetts, New Hampshire, New Jersey, New
                                                                 York, Pennsylvania, Rhode Island, Vermont,
                                                                 Virginia, West Virginia, and District of
                                                                 Columbia.
II--South Atlantic............................               3  Alabama, Arkansas, Florida, Georgia, Louisiana,
                                                                 Mississippi, North Carolina, Oklahoma, and
                                                                 South Carolina.
III--East North Central.......................               3  Kentucky, Michigan, Missouri, Ohio, and
                                                                 Tennessee.
IV--West North Central........................               3  Colorado, Idaho, Illinois, Indiana, Minnesota,
                                                                 Montana, North Dakota, South Dakota, Wisconsin,
                                                                 and Wyoming.
V--South Central..............................               3  Iowa, Kansas, and Nebraska.
VI--Western...................................               3  Arizona, California, Nevada, New Mexico, Oregon,
                                                                 Texas, Utah, and Washington.
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                 Table 3--Proposed Geographical Distribution and Number of Members on the Board
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                                                   Proposed
           Proposed geographic area                number of               Proposed States represented
                                                    members
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I--East.......................................               6  Connecticut, Delaware, Maine, Maryland,
                                                                 Massachusetts, New Hampshire, New Jersey, New
                                                                 York, Pennsylvania, Rhode Island, Vermont,
                                                                 Virginia, West Virginia, the District of
                                                                 Columbia, Alabama, Georgia, Florida, Louisiana,
                                                                 Mississippi, North Carolina, South Carolina,
                                                                 and Texas.
II--Central...................................               6  Arkansas, Oklahoma, Illinois, Indiana, Kentucky,
                                                                 Michigan, Missouri, Ohio, Tennessee, and
                                                                 Wisconsin.
III--West.....................................               6  Arizona, California, Colorado, Idaho, Iowa,
                                                                 Kansas, Minnesota, Montana, Nebraska, Nevada,
                                                                 New Mexico, North Dakota, South Dakota, Utah,
                                                                 Washington, and Wyoming.
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    Membership changes are based on production in the proposed 
geographic areas, noting that changes to Board distribution will be 
accomplished by determining the percentage of reported cases of eggs 
produced in each area times 18 (total Board membership) and rounding to 
the nearest whole number, as follows:

                                       Table 4--Projected Board Membership
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                                                                              Percent of total
                                            USDA reported   Percent of total     production      Projected board
       Proposed geographical areas          cases of eggs      production     multiplied by 18     membership
                                              produced                          board members
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I--East.................................    35,724,500,000             32.72              5.89                 6
II--Central.............................    36,942,400,000             33.83              6.09                 6
III--West...............................    36,525,200,000             33.45              6.02                 6
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    Total U.S. Production...............   109,192,100,000               100               100                18
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    This proposed rule would apply to the nomination process in 2020 
and affect the board members appointed by the Secretary to serve on the 
Board beginning in 2021.
    A 30-day comment period is provided to allow interested persons to 
respond to this proposal. All written comments received in response to 
this rule by the date specified will be considered prior to finalizing 
this action.

Executive Orders 12866, 13563, and 13771

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health, and safety effects; distributive impacts; and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, reducing costs, harmonizing rules, and promoting 
flexibility. This rule does not meet the definition of a significant 
regulatory action contained in section 3(f) of Executive Order 12866 
and therefore, the Office of Management and Budget (OMB) has waived 
review of this action. Additionally, because this rule does not meet 
the definition of a significant regulatory action, it does not trigger 
the requirements contained in

[[Page 27166]]

Executive Order 13771. See OMB's Memorandum titled ``Interim Guidance 
Implementing Section 2 of the Executive Order of January 30, 2017, 
titled `Reducing Regulation and Controlling Regulatory Costs' '' 
(February 2, 2017).

Executive Order 12988

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

Executive Order 13175

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

Paperwork Reduction Act

    In accordance with OMB regulations (5 CFR part 1320) that implement 
the Paperwork Reduction Act of 1995 (44 U.S.C. part 35), the 
information collection and recordkeeping requirements contained in the 
Order and accompanying Rules and Regulations have previously been 
approved by OMB and were assigned OMB control number 0581-0093. This 
proposal would not increase or impose any new information collection or 
recordkeeping requirements.

Initial Regulatory Flexibility Act

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-622), AMS considered the economic 
effect of this action on small entities and determined that this 
proposed rule would not have a significant economic impact on a 
substantial number of small entities. The purpose of RFA is to fit 
regulatory actions to the scale of businesses subject to such actions 
in order that small businesses will not be unduly burdened. The Small 
Business Administration (SBA) published an interim final rule that 
became effective on August 19, 2019, (84 FR 34261) that adjusts the 
monetary-based size standards for inflation. As a result of this rule, 
the size classification for small egg-producing firms changed from 
sales of $750,000 or less to sales of $1,000,000 or less.
    According to USDA's NASS, USDA collects data for the Agriculture 
Census (Ag Census) using the North American Industry Classification 
System (NAICS). The NAICS classifies economic activities and was 
developed to provide a consistent framework for the collection, 
analysis, and dissemination of industrial statistics used by government 
policy analysts, academia and the business community. It is the first 
industry classification system developed in accordance with a single 
principle of aggregation that production units using similar production 
processes should be grouped together.
    In the 2017 Ag Census, the poultry and egg production 
classification (classification category 1123) comprises establishments 
primarily engaged in breeding, hatching, and raising poultry for meat 
or egg production. The 2017Ag Census shows there were 164,099 reported 
poultry farms in the United States and 36,012 egg producers. Ag Census 
data includes sales category ranges for the poultry sector as a whole 
but does not include separate sales categories for egg producers. 
Instead, NASS provides data for the broader category of ``Poultry and 
Eggs.'' Therefore, AMS is not able to obtain stand-alone sales data for 
egg-producing farms. As a result, for this RFA, AMS used the broader 
category of poultry producers as the closest possible substitute as the 
basis for determining the size of egg producers.
    Of the 164,099 poultry producers identified in the 2017 Census of 
Agriculture, 148,788 (91 percent) reported sales of less than 
$1,000,000 and would therefore fall under the SBA definition of small 
business. Therefore, the remaining 15,311 (9 percent) producers would 
be considered large. If the egg producer segment has the same 
proportional distribution across firm sizes, 91 percent, or 32,771 egg 
producers would be classified as small businesses, and 9 percent, or 
3,241 egg producers would be considered large.
    Sales data are also available at the state level for the overall 
poultry segment. Using this data, and the assumption that the 
proportion of large and small poultry farms similarly applies to egg 
producers, Table 1 shows how the proposed changes in geographical areas 
will shift producer representation on the Board.
    The proposed rule imposes no new burden on the industry, as it only 
adjusts representation on the Board to reflect changes in egg 
production. The adjustments are required by the Order and would not 
result in a change in the overall number of Board members. Even if most 
egg producers are small entities, this action does not change their 
ability to qualify for representation on the Board or add any new 
burden. In conclusion, AMS believes that reducing the regions from six 
to three and increasing the number of States within each region will 
contribute to greater representation of egg producing firms on the 
Board.
    AMS is committed to complying with the E-Government Act of 2002 to 
promote the use of the internet and other information technologies to 
provide increased opportunities for citizen access to government 
information and services, and for other purposes.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.

List of Subjects in 7 CFR Part 1250

    Administrative practice and procedure, Advertising, Agricultural 
research, Eggs and Egg products, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, AMS proposes to amend 7 
CFR part 1250 as follows:

PART 1250--EGG PROMOTION AND RESEARCH

0
1. The authority citation for 7 CFR part 1250 continues to read as 
follows:

    Authority: 7 U.S.C. 2701-2718 and 7 U.S.C. 7401.
0
2. Amend Sec.  1250.510 by revising paragraphs (a) and (b) to read as 
follows:


Sec.  1250.510  Determination of Board Membership.

    (a) Pursuant to Sec.  1250.328 (d) and (e), the 48 contiguous 
States of the United States shall be grouped into three geographic 
areas, as follows: Area I (East)--Connecticut, Delaware, Maine, 
Maryland, Massachusetts, New Hampshire, New Jersey, New York, 
Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, the 
District of Columbia, Alabama, Georgia, Florida, Louisiana, 
Mississippi, North Carolina, South Carolina and Texas; Area II 
(Central)--Arkansas, Oklahoma, Illinois, Indiana, Kentucky, Michigan, 
Missouri, Ohio, Tennessee, and Wisconsin; Area III (West)--Arizona, 
California, Colorado, Idaho, Iowa, Kansas, Minnesota, Montana, 
Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Utah, 
Washington, and Wyoming.
    (b) Board representation among the three geographic areas is 
apportioned to reflect the percentages of United States egg production 
in each area times 18 (total Board membership). The distribution of 
members of the Board is: Area I-6, Area II-6, and Area III-6. Each

[[Page 27167]]

member will have an alternate appointed from the same area.
* * * * *

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-09010 Filed 5-6-20; 8:45 am]
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