[Federal Register Volume 88, Number 84 (Tuesday, May 2, 2023)]
[Proposed Rules]
[Pages 27415-27418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08956]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 88 , No. 84 / Tuesday, May 2, 2023 / Proposed 
Rules  

[[Page 27415]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1260

[Doc. No. AMS-LP-22-0002]


Beef Promotion and Research Order; Reapportionment and Technical 
Amendment

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would adjust representation on the 
Cattlemen's Beef Promotion and Research Board (Board), established 
under the Beef Promotion and Research Act of 1985 (Act), to reflect 
changes in domestic cattle inventories as well as changes in levels of 
imported cattle, beef, and beef products that have occurred since the 
Board was last reapportioned in July 2020. These adjustments are 
required by the Beef Promotion and Research Order (Order) and, if 
adopted, would result in a decrease in Board membership from 101 to 99, 
effective with the Secretary of Agriculture's (Secretary) appointments 
from nominees requested in Spring of 2023. The proposed rule would also 
update the list of Qualified State Beef Councils (QSBCs) in the Order 
by removing the Maryland Industry Beef Council which voted to dissolve 
their State beef council.

DATES: Submit comments on or before June 1, 2023.

ADDRESSES: Comments should be posted online at https://www.regulations.gov. Comments received will be posted without change, 
including any personal information provided. All comments should 
reference the document number AMS-LP-22-0002, the date of submission, 
and the page number of this issue of the Federal Register. Comments may 
also be sent to Lacey Heddlesten, Agricultural Marketing Specialist; 
Research and Promotion Division; Livestock and Poultry Program, AMS, 
USDA; STOP 0251, 1400 Independence Avenue SW, Washington, DC 20250. 
Comments will be made available for public inspection at the above 
address during regular business hours or via the internet at https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Lacey Heddlesten, Agricultural 
Marketing Specialist, Research and Promotion Division, at (620) 717-
3834; or by email at [email protected].

SUPPLEMENTARY INFORMATION: 

Executive Orders 12866, and 13563

    Executive Orders (E.O.) 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). E.O. 
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 E.O. 12866 and therefore, the Office of 
Management and Budget (OMB) has waived review of this action.

Executive Order 12988

    This proposed rule has been reviewed under E.O. 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect.
    Section 11 of the Act (7 U.S.C. 2910) provides that nothing in the 
Act may be construed to preempt or supersede any other program relating 
to beef promotion organized and operated under the laws of the U.S. or 
any State. There are no administrative proceedings that must be 
exhausted prior to any judicial challenge to the provisions of this 
rule.

Executive Order 13175

    This proposed rule has been reviewed under E.O. 13175--Consultation 
and Coordination with Indian Tribal Governments. E.O. 13175 requires 
Federal agencies to consult and coordinate with tribes on a government-
to-government basis on: (1) policies that have tribal implication, 
including regulation, legislative comments, or proposed legislation; 
and (2) other policy statements or actions that have substantial direct 
effects on one or more Indian tribes, on the relationship between the 
Federal Government and Indian tribes, or on the distribution of power 
and responsibilities between the Federal Government and Indian tribes.
    The Agricultural Marketing Service (AMS) has assessed the impact of 
this proposed rule on Indian tribes and determined that this rule would 
not have tribal implications that require consultation under E.O. 
13175. AMS regularly meets with tribal leaders and discuss matters of 
mutual interest regarding the marketing of agricultural products. AMS 
will work with the U.S. Department of Agriculture's (USDA) Office of 
Tribal Relations to ensure meaningful consultation is provided as 
needed with regards to the regulations.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.) the 
Office of Information and Regulatory Affairs designated this rule as 
not a major rule, as defined by 5 U.S.C. 804(2).

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.

Background and Proposed Action

    The Board was initially appointed on August 4, 1986, pursuant to 
the provisions of the Act (7 U.S.C. 2901-2911), and the Order issued 
thereunder. Domestic representation on the Board is based on cattle 
inventory numbers, while importer representation is based on the 
conversion of the volume of imported cattle, beef, and beef products 
into live animal equivalencies.

Reapportionment

    Section 1260.141(b) of the Order provides that the Board shall be 
composed of cattle producers and importers appointed by the Secretary 
from nominations submitted by certified producer and importer 
organizations. A producer may only be nominated to represent the State 
or unit in which that producer is a resident.

[[Page 27416]]

    Section 1260.141(c) of the Order provides that at least every 3 
years, but not more than every 2 years, the Board shall review the 
geographic distribution of cattle inventories throughout the United 
States and the volume of imported cattle, beef, and beef products and, 
if warranted, shall reapportion units and/or modify the number of Board 
members from units in order to reflect the geographic distribution of 
cattle production volume in the United States and the volume of cattle, 
beef, or beef products imported into the United States. Further, 
section 1260.141(d) allows the board to recommend to the Secretary a 
modification in the number of cattle per unit necessary for 
representation of Board seats.
    Section 1260.141(e)(1) provides that each geographic unit or State 
that includes a total cattle inventory equal to or greater than 500,000 
head of cattle shall be entitled to one representative on the Board. 
Section 1260.141(e)(2) provides that States that do not have total 
cattle inventories equal to or greater than 500,000 head shall be 
grouped, to the extent practicable, into geographically contiguous 
units, each of which have a combined total inventory of not less than 
500,000 head. Such grouped units are entitled to at least one 
representative on the Board. Each unit is entitled to an additional 
Board member for each additional 1 million head of cattle within the 
unit, as provided in section 1260.141(e)(4). Further, as provided in 
section 1260.141(e)(3), importers are represented by a single unit, 
with their number of Board members based on a conversion of the total 
volume of imported cattle, beef, or beef products into live animal 
equivalencies.
    Section 1260.141(f) of the Order states in determining the volume 
of cattle within the units, the Board and the Secretary shall utilize 
the information received by the Board pursuant to sections 1260.201 and 
1260.202 industry data and data published by USDA. The proposed 
producer representation is based on an average of the inventory of 
cattle in the various States on January 1 in 2020, 2021, and 2022 as 
reported by USDA's National Agricultural Statistics Service (NASS). The 
proposed importer representation is based on a combined total average 
of the 2019, 2020, and 2021 live cattle imports as published by USDA's 
Economic Research Service (ERS) and the average of the 2019, 2020, and 
2021 live animal equivalents for imported beef and beef products.
    In considering reapportionment, the Board reviewed cattle 
inventories as of January 1 in 2020, 2021, and 2022, as well as cattle, 
beef, and beef product import data for the period of January 1, 2019, 
to December 31, 2021. The Board determined that an average of the 
inventory of cattle on January 1 in 2020, 2021, and 2022 best reflects 
the number of cattle in each State or unit since publication of the 
last reapportionment rule in 2020 (85 FR 39461). The Board reviewed 
data published by ERS to determine proper importer representation. The 
Board recommended the use of the average of a combined total of the 
2019, 2020, and 2021 cattle import data and the average of the 2019, 
2020, and 2021 live animal equivalents for imported beef products. The 
method used to calculate the total number of live animal equivalents 
was the same as that used in the previous reapportionment of the Board. 
The live animal equivalent weight was changed in 2006 from 509 pounds 
to 592 pounds (71 FR 47074).
    Based on their 3-year analysis, the Board is recommending to the 
Secretary the following changes:

----------------------------------------------------------------------------------------------------------------
                                                                                 Current            Revised
                      State/unit                        Increase/decrease     representation     representation
----------------------------------------------------------------------------------------------------------------
Idaho................................................                   +1                  2                  3
Montana..............................................                   -1                  3                  2
Pennsylvania.........................................                   -1                  2                  1
Net Change...........................................                   -1
----------------------------------------------------------------------------------------------------------------

    Further, Wisconsin's 3-year average cattle inventory is less than 1 
percent (33,000 head) below the threshold of 3.5 million head of cattle 
needed to maintain 4 Board seats. The cattle inventory report estimates 
each state's inventory through a producer survey which is conducted 
each January by NASS.\1\ The survey is subject to a margin of error due 
to sampling size, response rates, etc. The average coefficient of 
variation for Wisconsin's total cattle inventory in the 2020, 2021, 
2022 cattle inventory reports is 3.4 percent (34,000 head). 
As the coefficient of variation is greater than the amount by which the 
inventory is under the 3.5 million head threshold, the Board voted on 
July 27, 2022, to allow Wisconsin to maintain 4 Board seats instead of 
losing 1, for a total of 3 seats.
---------------------------------------------------------------------------

    \1\ https://usda.library.cornell.edu/concern/publications/h702q636h.
---------------------------------------------------------------------------

    The Order section 1260.141, however, does not take into 
consideration the margin of error when analysis is conducted. 
Therefore, AMS is proposing the Order be applied without using the NASS 
margin of error. Thus, the Secretary proposes to adjust Board 
membership from 101 to 99 with Wisconsin losing 1 seat.
    If the recommendation of the Board is adopted by the Secretary, the 
reapportionment would take effect in the 2023 nomination process and 
effect the number of board members the Secretary appointments to fill 
positions early in the year 2024.

Technical Amendment

    The proposed rule would also update the list of QSBCs in the Order 
by removing the Maryland Industry Beef Council which unanimously voted 
to dissolve their State beef council during the September 14, 2022, 
board meeting.

Initial Regulatory Flexibility Act

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601 et seq.), AMS has considered the 
economic effect of this action 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 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.
    In 2022, the Small Business Administration (SBA) (13 CFR 121.201) 
published a final rule (84 FR 64013) that updated its size standards 
based on income or employee numbers for various small business falling 
under the North American Industry Classification System (NAICS). Within 
that rule, the SBA threshold for ``Beef Cattle Ranching and Farming'' 
(NAICS code 112111) operations to qualify small businesses was raised 
from annual sales of $1 million or less to annual sales of $2.5 million 
or less.
    According to the NASS 2017 Census of Agriculture, the number of 
U.S. operations with beef cattle totaled

[[Page 27417]]

729,046 and with cattle of any type totaled 882,692.\2\ The same Census 
of Agriculture data shows that roughly 4 percent of operations with 
cattle, or 31,476 operations, have annual sales receipts of $1,000,000 
or more, the small business standard prior to the 2022 revision.\3\ No 
further breakout in the Census of Agriculture data is made to account 
for the new, higher SBA standard. However, the vast majority of cattle 
producers, 96 percent, would be considered small businesses under the 
new SBA standards. It should be noted that producers are only 
indirectly impacted by the proposed rule.
---------------------------------------------------------------------------

    \2\ https://www.nass.usda.gov/AgCensus/index.php.
    \3\ https://quickstats.nass.usda.gov/results/758A0A38-2BF4-39CE-90EF-A581BFEA3E81.
---------------------------------------------------------------------------

    Cattle, beef, and veal importers are also impacted by the proposed 
rule. Based on data available on membership in the Meat Import Council 
of America, AMS estimates that approximately 190 firms import beef or 
beef products. AMS is not aware of any data that reports the number of 
beef-importing entities that meet the SBA definition of small 
businesses.
    In addition to cattle producers, affected entities under this rule 
change include meat and meat-product merchant wholesalers 
(wholesalers), classified under NAICS code 424470, and meat processors 
from carcass (processors), classified under NAICS code 311612. The SBA 
thresholds for both these businesses to qualify as small are that they 
have fewer than 1,000 employees. The most current data from the Census 
of Manufacturing states that all 2,376 wholesalers were small 
businesses (in 2017) \4\ and that all 1,423 processors were small 
business (in 2020).\5\
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    \4\ https://data.census.gov/profile/424470__Meat_and_meat_product_merchant_wholesalers?g=0100000US&n=424470.
    \5\ https://data.census.gov/profile/311612_-Meat_and_meat_product_merchant_wholesalers?g=0100000US&n=311612.
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    Recent import trade data was also considered for understanding the 
overall dynamics of this industry segment. The Foreign Agricultural 
Service reports monthly trade data for traded agricultural products by 
product type. Based on analysis of that trade data and consumption data 
collected in the USDA's World Agricultural Demand and Supply Estimates, 
over the 2017 to 2022 period, cattle imports ranged between 1.8 and 2.3 
percent of the total cattle inventory and that beef imports ranged from 
9.8 to 10.7 percent of total supply. Veal imports during that time were 
negligible as a share of domestic production.
    The proposed rule imposes no new burden on the industry, as it only 
adjusts representation on the Board to reflect changes in domestic 
cattle inventory, as well as in cattle and beef imports. Additionally, 
the Order section 1260.141 does not take into consideration the margin 
of error when analysis is conducted. Therefore, AMS is proposing the 
Order guidance to be applied without using the NASS margin of error and 
thus the Secretary proposes to adjust Board membership from 101 to 99. 
Following the proposed rule, a 30-day comment period is provided to 
allow interested industry persons to respond to this proposal.
    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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.

List of Subjects in 7 CFR Part 1260

    Administrative practice and procedure, Advertising, Agricultural 
research, Imports, Marketing agreements, Meat and meat products, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, AMS proposes to amend 7 
CFR part 1260 as follows:

PART 1260--BEEF PROMOTION AND RESEARCH

0
1. The authority citation for 7 CFR part 1260 continues to read as 
follows:

    Authority:  7 U.S.C. 2901-2911 and 7 U.S.C. 7401.

0
2. Revise Sec.  1260.141 paragraph (a) and the table to paragraph (a) 
to read as follows:


Sec.  1260.141  Membership of Board.

    (a) Beginning with the 2023 Board nominations and the associated 
appointments effective early in the year 2024, the United States shall 
be divided into 38 geographical units and 1 unit representing 
importers, for a total of 39 units. The number of Board members from 
each unit shall be as follows:

             Table 1 to Paragraph (a)--Cattle and Calves \1\
------------------------------------------------------------------------
                                                    (1,000
                   State/unit                        Head)     Directors
------------------------------------------------------------------------
1. Alabama......................................       1,285           1
2. Arizona......................................         967           1
3. Arkansas.....................................       1,733           2
4. Colorado.....................................       2,700           3
5. Florida......................................       1,670           2
6. Georgia......................................       1,077           1
7. Idaho........................................       2,507           3
8. Illinois.....................................       1,047           1
9. Indiana......................................         833           1
10. Iowa........................................       3,800           4
11. Kansas......................................       6,483           6
12. Kentucky....................................       2,073           2
13. Louisiana...................................         777           1
14. Michigan....................................       1,137           1
15. Minnesota...................................       2,203           2
16. Mississippi.................................         917           1
17. Missouri....................................       4,217           4
18. Montana.....................................       2,383           2
19. Nebraska....................................       6,800           7
20. New Mexico..................................       1,373           1
21. New York....................................       1,433           1
22. North Carolina..............................         798           1
23. North Dakota................................       1,893           2
24. Ohio........................................       1,283           1
25. Oklahoma....................................       5,217           5
26. Oregon......................................       1,260           1
27. Pennsylvania................................       1,430           1
28. South Dakota................................       3,900           4
29. Tennessee...................................       1,783           2
30. Texas.......................................      12,900          13
31. Utah........................................         803           1
32. Virginia....................................       1,410           1
33. Wisconsin...................................       3,467           3
34. Wyoming.....................................       1,290           1
35. Northwest Unit
  Alaska........................................          17  ..........
  Hawaii........................................         142  ..........
  Washington....................................       1,157
                                                 -----------------------
        Total...................................       1,316           1
36. Northeast Unit                                ..........  ..........
  Connecticut...................................          48  ..........
  Delaware......................................          13  ..........
  Maine.........................................          77  ..........
  Maryland......................................         174  ..........
  Massachusetts.................................          36  ..........
  New Hampshire.................................          32  ..........
  New Jersey....................................          26  ..........
  Rhode Island..................................           4  ..........
  Vermont.......................................         248  ..........
                                                 -----------------------
        Total...................................         657           1
37. Mid-Atlantic Unit                             ..........  ..........
  South Carolina................................         327  ..........
  West Virginia.................................         380
                                                 -----------------------
        Total...................................         707           1
38. Southwest Unit:
  California....................................       5,167  ..........
  Nevada........................................         465  ..........
                                                 -----------------------
        Total...................................       5,632           6
39. Importers Unit \2\..........................       7,466           7
------------------------------------------------------------------------
\1\ 2020, 2021, and 2022 average of January 1 cattle inventory data.
\2\ 2019, 2020, and 2021 average of annual import data.

* * * * *

[[Page 27418]]

0
3. Revise Sec.  1260.315 to read as follows:


Sec.  1260.315  Qualified State Beef Councils.

    The following State beef promotion entities have been certified by 
the Board as Qualified State Beef Councils:
(a) Alabama Cattleman's Association.
(b) Arizona Beef Council.
(c) Arkansas Beef Council.
(d) California Beef Council.
(e) Colorado Beef Council Authority.
(f) Delaware Beef Advisory Board.
(g) Florida Beef Council, Inc.
(h) Georgia Beef Board, Inc.
(i) Hawaii Beef Industry Council.
(j) Idaho Beef Council.
(k) Illinois Beef Association, Inc.
(l) Indiana Beef Council, Inc.
(m) Iowa Beef Cattle Producers Association/dba/Iowa Beef Industry 
Council.
(n) Kansas Beef Council.
(o) Kentucky Cattleman's Association, Inc.
(p) Louisiana Beef Industry Council.
(q) Michigan Beef Industry Commission.
(r) Minnesota Beef Council.
(s) Mississippi Beef Council.
(t) Missouri Beef Industry Council, Inc.
(u) Montana Beef Council.
(v) Nebraska Beef Council.
(w) Nevada Beef Council.
(x) New Jersey Beef Industry Council.
(y) New Mexico Beef Council.
(z) New York Beef Industry Council.
(aa) North Carolina Cattlemen's Beef Council.
(bb) North Dakota Beef Commission.
(cc) Ohio Beef Council.
(dd) Oklahoma Beef Council.
(ee) Oregon Beef Council.
(ff) Pennsylvania Beef Council.
(gg) South Carolina Beef Council.
(hh) South Dakota Beef Industry Council.
(ii) Tennessee Beef Industry Council.
(jj) Texas Beef Council.
(kk) Utah Beef Council.
(ll) Vermont Beef Industry Council.
(mm) Virginia Beef Industry Council.
(nn) Washington State Beef Commission.
(oo) West Virginia Beef Council, Inc.
(pp) Wisconsin Beef Council, Inc.
(qq) Wyoming Beef Council.

Melissa Bailey,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-08956 Filed 5-1-23; 8:45 am]
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