[Federal Register Volume 88, Number 146 (Tuesday, August 1, 2023)]
[Rules and Regulations]
[Pages 49993-49994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16295]



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 Rules and Regulations
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  Federal Register / Vol. 88 , No. 146 / Tuesday, August 1, 2023 / 
Rules and Regulations  

[[Page 49993]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 27

[Doc. No. AMS-CN-22-0061]


Redefining Bona Fide Cotton Spot Markets

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule amends the regulation that defines two of the seven 
designated spot markets and changing the names of the affected markets. 
Specifically, market price data for cotton grown in Oklahoma and Kansas 
are reassigned from the East Texas/Oklahoma spot market to the West 
Texas spot market. This action also changes the names of these two 
markets to describe the markets more accurately.

DATES: Effective August 1, 2023.

FOR FURTHER INFORMATION CONTACT: Barbara Meredith, Division Director, 
Cotton Market News, Cotton & Tobacco Program, AMS, USDA, 3275 Appling 
Road, Room 10, Memphis, TN 38133. Telephone: (901) 384-3300, or Email: 
Barbara.Meredith @usda.gov.

SUPPLEMENTARY INFORMATION: 

Background

    The Secretary of Agriculture is authorized under the United States 
Cotton Futures Act (7 U.S.C. 15b) to designate at least five bona fide 
spot markets from which cotton price information can be collected. A 
spot market--also called the ``cash market'' or ``physical market''--is 
a market where commodities are sold on the spot for cash at current 
market prices and delivered immediately. Updated designations for these 
bona fide spot markets and the determination of which counties and 
states compose each of these spot markets were most recently published 
in the Federal Register on April 30, 2013 (78 FR 25181). For each of 
these bona fide spot markets, the Agricultural Marketing Service's 
(AMS) Cotton and Tobacco Program collects market price information 
under the United States Cotton Futures Act (7 U.S.C. 15b), the Cotton 
Statistics and Estimates Act (7 U.S.C. 473b) and the Agricultural 
Marketing Act of 1946 (7 U.S.C. 1622(g)). This price information is 
then used to calculate price differences for cotton futures contracts.
    The Cotton and Tobacco Program (Program) received a request from 
the American Cotton Shippers Association (ACSA) and the National Cotton 
Council of America (NCC), to evaluate the structure of the cotton spot 
markets in East and West Texas, Oklahoma, and Kansas. The Program's 
analysis of the East Texas/Oklahoma market determined that cotton grown 
in Oklahoma and Kansas has similar quality characteristics and was 
traded under the same terms and conditions as West Texas cotton. 
Further, the analysis showed that there was not any significant 
difference in the prices reported to Cotton and Tobacco Market News 
when comparing Oklahoma and Kansas cotton to West Texas cotton. As a 
result, ACSA and NCC requested that market price data for cotton grown 
in Oklahoma and Kansas be reassigned from the East Texas/Oklahoma spot 
market to the West Texas spot market by amending the definitions of 
cotton spot markets in 7 CFR part 27. Revisions to the regulations 
concerning bona fide spot market definitions are necessary to assure 
consistency with the revised Cotton Research and Promotion Act and to 
allow for published spot quotes to consider spot prices of cotton 
marketed in Kansas and Oklahoma. Corresponding changes the names of 
these two spot markets are made to describe the markets more 
accurately.

Comment Summary and Analysis

    A proposed rule concerning this action was published in the Federal 
Register on March 27, 2023 (88 FR 18076). A copy of the proposed rule 
was made available through the internet by USDA and the Office of the 
Federal Register. A 60-day comment period ending May 26, 2023, was 
provided for interested persons to respond to the proposal. AMS 
received a total of seven comments. Six of the seven comments were 
explicitly supportive of the proposed action and one expressed concern 
about market concentration within the U.S. cotton industry, which is 
not relevant to the proposed action. Accordingly, no changes were made 
to the rule as proposed.

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 and would not 
have significant Tribal implications.

Executive Order 12866

    This proposed rule has been determined to be non-significant for 
purposes of Executive Order 12866; and, therefore has not been reviewed 
by the Office of Management and Budget (OMB).

Executive Order 12988

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

Final Regulatory Flexibility Analysis

    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 action on small entities and has determined that its 
implementation will not have a significant economic impact on a 
substantial number of small businesses.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. There are an estimated 25,000 cotton 
growers in the U.S. who voluntarily use the AMS cotton classing 
services annually, and the majority of these cotton growers are small 
businesses under the criteria established by the Small Business 
Administration (13 CFR 121.201).
    Changes in cotton spot market definitions as stated will not 
significantly affect small businesses as defined in the RFA because:
    (1) How spot prices are estimated are not expected to be impacted 
by this action;

[[Page 49994]]

    (2) Business practices of the U.S. cotton industry are not expected 
to change as a result of this action;
    (3) Costs associated with providing market news services will not 
be significantly changed by this action;
    (4) Market news services are paid for by appropriated funds; 
therefore, users are not charged fees for the provision of the 
services.

Paperwork Reduction Act

    In compliance with OMB regulations (5 CFR part 1320), which 
implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501), the 
information collection requirements contained in the provisions amended 
by this rule have been previously approved by OMB and were assigned OMB 
control number 0581-0009, Cotton Classification and Market News 
Service. No changes in these requirements will be necessary as a result 
of this rule. Should any changes become necessary, they will be 
submitted to OMB for approval.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the internet and other information technologies to provide 
increased opportunities for citizen access to Government information 
and services, and for other purposes.
    AMS has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule.

List of Subjects in 7 CFR Part 27

    Commodity futures, Cotton.

    For the reasons set forth in the preamble, the Agricultural 
Marketing Service amends 7 CFR part 27 as follows:

PART 27--COTTON CLASSIFICATION UNDER COTTON FUTURES LEGISLATION

0
1. The authority citation for 7 CFR part 27 continues to read as 
follows:

    Authority:  7 U.S.C. 15b, 7 U.S.C. 473b, 7 U.S.C. 1622(g).


0
2. In Sec.  27.93, the definitions of the ``East Texas and Oklahoma,'' 
and ``West Texas'' markets are revised to read as follows:


Sec.  27.93  Bona fide spot markets.

* * * * *

East Texas and South Texas

    Texas counties east of and including Montague, Wise, Parker, Erath, 
Comanche, Mills, San Saba, Mason, Sutton, Edwards, Kinney, Maverick, 
Webb, Zapata, Star and Hidalgo counties.

West Texas, Kansas, and Oklahoma

    All counties in Kansas and Oklahoma, all Texas counties not 
included in the East Texas, South Texas, and Desert Southwest Markets 
and the New Mexico counties of Union, Quay, Curry, Roosevelt, and Lea.
* * * * *

0
3. In Sec.  27.94, paragraph (a) is revised to read as follows:


Sec.  27.94  Spot markets for contract settlement purposes.

* * * * *
    (a) For cotton delivered in settlement of any No. 2 contract on the 
Intercontinental Exchange (ICE); Southeastern, North and South Delta, 
East Texas and South Texas, West Texas, Kansas, Oklahoma, and Desert 
Southwest.
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-16295 Filed 7-31-23; 8:45 am]
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