[Federal Register Volume 85, Number 194 (Tuesday, October 6, 2020)]
[Rules and Regulations]
[Pages 62942-62945]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19431]


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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: Final rule.

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SUMMARY: This final rule adjusts representation on the American Egg 
Board (Board), 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 six areas with 
three members representing each area. This final rule reduces the 
number of geographic areas from six to three. The number of Board 
members representing each geographic area changes to six. The total 
Board membership remains at 18.

DATES: Effective November 5, 2020.

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

    The Egg Research and Consumer Information Act of 1974 (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 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. 2707(b). 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 
five 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 were 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 two members while the calculation for the other five 
regions result in three members each, for a total 17 members, one less 
than the number stated in the Order. Therefore, regions were changed so 
that the 18-member Board can be established. Table 1 shows that 
reducing regions from six to three expands the number of States 
included in each region and suggests that the grouping of more States 
into fewer regions improves consistency in the proportion of small 
versus large farms represented on the Board.

[[Page 62943]]



                                              Table 1--Regional Poultry Farm Distribution--Current and New
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Small           Large
                         Region                          --------------------------------      Total          States
                                                            <$1,000,000     $1,000,000+
-------------------------------------------------------------------------------------------------------------------------
                                                                Current Geographical Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
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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                                                                  New 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
--------------------------------------------------------------------------------------------------------------------------------------------------------

    With the inclusion of more states into fewer regions, the 
proportion of small versus large farms is less variable. For example, 
in Regions I and II in the current structure, 93 percent and 76 
percent, respectively, of the farms are classified as small. In the new 
structure 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 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 three members representing each of the six regions. There 
were no changes to the total number of members (18 members with 18 
alternates). However, regions were reduced to three from six and each 
region will 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. These changes are 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 all 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 final rule results in the proportionate representation of each 
geographic area and increases 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 new 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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[[Page 62944]]


                    Table 3--New Geographical Distribution and Number of Members on the Board
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                                                   Number of
                Geographic area                     members                    States represented
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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, Oregon, South Dakota,
                                                                 Utah, Washington, and Wyoming.
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    Membership changes are based on production in the new geographic 
areas, noting that changes to Board distribution will be accomplished 
by determining the percentage of reported cases of eggs produced in 
each of the three new areas times 18 (total Board membership) and 
rounding to the nearest whole number, as follows:

                                       Table 4--Projected Board Membership
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                                                                                % of total
                                        USDA reported        % of total         production      Projected board
         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
                                     ---------------------------------------------------------------------------
    Total U.S. Production...........    109,192,100,000                100                100                 18
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    This final rule applies to the nomination process in 2020 and 
affects the board members appointed by the Secretary to serve on the 
Board beginning in 2021.
    A 30-day comment period was provided to allow interested persons to 
respond to the proposal. All written comments received in response to 
this rule by the date specified were considered prior to finalizing 
this action.

Summary of Comments

    USDA received five timely comments from individuals and industry 
organizations. Of those comments, two were in favor of the rule, and 
three did not state a position. Two of the comments were submitted by 
industry organizations in support of the changes. One comment expressed 
concerns that the larger regions reduce the representation of smaller-
production areas. AMS addressed this concern in the proposed rule. 
Table 1 indicates 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 
farms in these regions are classified as small. In the new structure 
the two regions are more or less combined, and the new Region I is 
composed of 87 percent small farms. The table shows less variation in 
size between the three new regions than there is in the current 
structure. One comment observed that Oregon was missing in Table 3. AMS 
recognizes this error and has corrected it by placing Oregon in the 
West Region III. One comment did not address the proposal but did offer 
one idea related to Board membership. The required composition of the 
Board is set forth in the Act and Order. No changes were made in the 
final rule based on the comments received.

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 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 final 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

[[Page 62945]]

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 final rule does not increase or impose 
any new information collection or recordkeeping requirements.

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 final 
rule does 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) was comprised of 
establishments primarily engaged in breeding, hatching, and raising 
poultry for meat or egg production. The 2017 Ag Census also 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 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 thus fall under the SBA definition of small business. 
Therefore, the remaining 15,311 (9 percent) producers are considered 
large. If the egg producer segment has the same proportional 
distribution across firm sizes, 91 percent, or 32,771 egg producers are 
classified as small businesses, and 9 percent, or 3,241 egg producers 
are considered large.
    Sales data are also available at the state level for the overall 
poultry sector. 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 changes in geographical areas shift producer 
representation on the Board.
    The final 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 do 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 amends 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. Revise Sec.  1250.510 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 1 (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 2 
(Central)--Arkansas, Oklahoma, Illinois, Indiana, Kentucky, Michigan, 
Missouri, Ohio, Tennessee, and Wisconsin; Area 3 (West)--Arizona, 
California, Colorado, Idaho, Iowa, Kansas, Minnesota, Montana, 
Nebraska, Nevada, New Mexico, North Dakota, Oregon, 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 1-6, Area 2-6, and Area 3-6. Each member 
will have an alternate appointed from the same area.

Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-19431 Filed 10-5-20; 8:45 am]
BILLING CODE 3410-02-P