[Federal Register Volume 75, Number 136 (Friday, July 16, 2010)]
[Rules and Regulations]
[Pages 41365-41368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17409]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 75, No. 136 / Friday, July 16, 2010 / Rules
and Regulations
[[Page 41365]]
DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Part 760
Commodity Credit Corporation
7 CFR Part 1430
RIN 0560-AH88
Dairy Product Price Support Program and Dairy Indemnity Payment
Program
AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule specifies regulations for the Dairy Product Price
Support Program (DPPSP), which has replaced the Price Support Program
for Milk, and amends regulations for the Dairy Indemnity Payment
Program (DIPP). The two programs are authorized by the Food,
Conservation, and Energy Act of 2008 (the 2008 Farm Bill) through 2012.
The DPPSP supports the price of cheddar cheese, butter, and nonfat dry
milk by providing a standing offer from Commodity Credit Corporation
(CCC) to purchase those products at specific support prices. This rule
specifies the minimum price support levels for cheddar cheese, butter,
and nonfat dry milk. This rule also specifies the minimum price at
which CCC may sell dairy products from inventory. DIPP indemnifies
dairy farmers and manufacturers of dairy products for losses suffered
due to contamination of milk and milk products. This rule extends DIPP
through 2012 and amends the method through which DIPP payments will be
disbursed in the event that available appropriated funds are
insufficient to pay all claims. That method is changing from a pro rata
method to a first-come, first-paid basis.
DATES: Effective Date: July 16, 2010.
FOR FURTHER INFORMATION CONTACT:
For Dairy Product Price Support Program: Milton Madison, Dairy and
Sweeteners Analysis Group, Economic Policy and Analysis Staff, Farm
Service Agency (FSA), U.S. Department of Agriculture (USDA), Mail Stop
0516, 1400 Independence Ave., SW., Washington, DC 20250-0516; phone:
(202) 690-0050; fax: (202) 690-1480, or e-mail:
[email protected].
For Dairy Indemnity Payment Program: Danielle Cooke, Special
Programs Manager, Price Support Division, FSA, USDA, Mail Stop 0512,
1400 Independence Ave., SW., Washington, DC, 20250-0512; phone (202)
720-1919; fax (202) 690-1536; or e-mail: [email protected].
Persons with disabilities who require alternative means for
communication (Braille, large print, audiotape, etc.) should contact
the USDA Target Center at (202) 720-2600 (voice and TDD).
SUPPLEMENTARY INFORMATION:
Background
The 2008 Farm Bill (Pub. L. 110-246) requires amendments to the
regulations for the Dairy Product Price Support Program as authorized,
and DIPP as reauthorized and extended through 2012. The changes for
each of the programs are explained below.
Dairy Product Price Support
Section 1501 of the 2008 Farm Bill (7 U.S.C. 8771) authorizes the
Dairy Product Price Support Program, completely replacing the Price
Support Program for Milk. The 2008 Farm Bill does not fundamentally
change the basic structure or goals of the previous program, which
required CCC to support milk prices through the purchase of dairy
products. The 2008 Farm Bill specifies the minimum CCC purchase prices
for cheddar cheese, butter, and nonfat dry milk; previously only the
support price for milk was specified. The 2008 Farm Bill also includes
new provisions that CCC is implementing in this rule to reduce the
dairy product purchase prices if CCC purchases exceed certain threshold
quantities. Those threshold quantities specified in the 2008 Farm Bill
are sufficiently large that it is unlikely the minimum support prices
will be impacted.
This rule in 7 CFR part 1430, subpart A, specifies rules for the
DPPSP consistent with the 2008 Farm Bill and with current purchase
requirements of the agency in the wake of the new and mandatory
legislation.
This rule provides a definition of ``net removals'' of dairy
products from the market through the Dairy Product Price Support
Program and the Dairy Export Incentive Program (authorized in 15 U.S.C.
713a-14). Section 1501 of the 2008 Farm Bill, which specifies how net
removals are calculated, is the basis for the definition. CCC uses the
amount of net removals during a 12 month period to determine whether
CCC purchases have exceeded the threshold quantities for reduced
support prices. The definition is consistent with the definition USDA
uses in the monthly World Agricultural Supply and Demand Estimates
(WASDE) report on the milk market.
The requirements for dairy products to be eligible for CCC
purchase, specified in Sec. 1430.102, ``Eligible Products,'' are
similar to the requirements in the regulations for the previous Price
Support Program for Milk. The eligibility requirements have been
reorganized for clarity. A definition of ``eligible offeror'' is added
by this rule. The term ``eligible offeror'' is used in the current
regulations but is not defined; this rule adds a definition that
clarifies the eligible types of persons or legal entities who may sell
dairy products to CCC. To be eligible, the offeror must be the
manufacturer of the commodity offered or a marketing cooperative for
the manufacturer. The definition of ``eligible offeror'' is a
discretionary change; all other provisions in this rule for the Dairy
Product Price Support Program are required by the 2008 Farm Bill or
were established for the previous Price Support Program for Milk.
This rule implements the 2008 Farm Bill dairy product purchase
prices in Sec. 1430.103, ``Purchase Prices.'' The prices specified in
this regulation are minimum support prices; they are specified using
the ``not less than X cents per pound'' language from the 2008 Farm
Bill. The minimum purchase prices are the same as the purchase prices
CCC established under the Price Support Program for Milk, so the new
purchase price requirements will have little effect on the extent of
dairy price support or on program administration unless the purchase
prices are set above the minimums.
[[Page 41366]]
The 2008 Farm Bill requires the Secretary of Agriculture to pay
uniform prices for dairy products across the United States. Therefore,
the support price for each type of dairy product applies to all regions
of the United States.
As required by the 2008 Farm Bill, this rule specifies purchase
threshold quantities, which, if exceeded, would decrease the minimum
allowable CCC purchase prices for dairy products. As explained below,
these purchase threshold quantities are very large and are unlikely to
be exceeded, so the lower support prices are unlikely to ever be
permitted.
As specified in the 2008 Farm Bill and in this rule, if CCC cheddar
cheese purchases over a 12 month period, less unrestricted sales by
CCC, exceed 200 million pounds, but do not exceed 400 million pounds,
then the purchase price may be reduced by 10 cents per pound during the
immediately following month. If the cheese purchases, less unrestricted
sales, exceed 400 million pounds, then the purchase price may be
reduced by 20 cents per pound during the immediately following month.
The largest CCC total fiscal year (FY) annual cheese purchase in the
last 10 years was 42 million pounds in FY 2003. Cheese purchases by CCC
have not exceeded 200 million pounds since FY 1988.
If CCC butter purchases over a 12 month period, less unrestricted
sales, exceed 450 million pounds, but not more than 650 million pounds,
then the purchase price may be reduced 10 cents per pound during the
immediately following month. If the butter purchases, less unrestricted
sales, exceed 650 million pounds, then the purchase price may be
reduced by 20 cents per pound during the immediately following month.
The highest CCC total fiscal year butter purchase in the last 10 years
was 12 million pounds in FY 2003. Butter purchases by CCC have not
exceeded the minimum purchase threshold of 450 million pounds since FY
1992.
If CCC nonfat dry milk purchases over a 12 month period, less
unrestricted sales, exceed 600 million pounds, but not more than 800
million pounds, then the purchase price may be reduced 5 cents per
pound during the immediately following month. If the nonfat dry milk
purchases, less unrestricted sales, exceed 800 million pounds, then the
purchase price may be reduced by 10 cents per pound during the
immediately following month. The largest nonfat dry milk CCC purchase
in the past 10 years was 656 million pounds in FY 2002, which slightly
exceeded the minimum purchase threshold.
Section 1430.103(b) provides that CCC may offer to purchase cheddar
cheese, butter, fortified nonfat dried milk, or fortified instant
nonfat dry milk in consumer-sized ready-to-consume packages at a
premium to the purchase prices for cheddar cheese, butter, and nonfat
dry milk announced in accordance with Sec. 1430.103(a). Any funds
expended to buy products processed into such packages in excess of the
announced price for the cheddar cheese, butter, and nonfat dry milk
would not be considered a price support expense and would have to be
apportioned under section 416(a) of the Agricultural Adjustment Act of
1949.
Section 1430.103(c) provides that CCC may offer to purchase block
and barrel cheddar cheese with a lower moisture content than is
specified in Sec. 1430.102(c), as evidenced by the grading
certificate, at a higher price than is announced in accordance with
Sec. 1430.103(a). The formula for determining the premium price for
lower moisture cheddar cheese would be specified in the CCC purchase
announcement. Although a similar provision did not appear in the Price
Support Program for Milk regulations, the former regulation provided
that CCC purchases were subject to purchase announcements and those
announcements did allow for low moisture purchases and price
adjustments.
Section 1430.104, ``Sales from Inventories,'' implements the
requirement in the 2008 Farm Bill that CCC may not sell its dairy
product inventory for unrestricted use at less than 110 percent of
CCC's purchase price. The CCC purchase price used in this calculation
is the support price before the price was reduced for any purchase
quantity thresholds. Section 1430.104 also specifies that CCC may sell
its dairy product inventory for restricted use, which is more common
than sales for unrestricted use, at an unspecified price. CCC conducts
restricted use sales from time to time, such as sales for casein
manufacturing or livestock feed use.
In addition to the changes discussed above, this rule reorganizes 7
CFR part 1430 for clarity, but the remaining provisions are
substantially similar to those for the previous program.
Dairy Indemnity Payment Program
The purpose of DIPP is to indemnify dairy farmers and manufacturers
of dairy products who, through no fault of their own, suffer income
losses with respect to milk or milk products that were removed from
commercial markets because such milk or milk products contained certain
harmful pesticide residues, chemicals, or toxic substances, or were
contaminated by nuclear radiation or fallout.
Section 1505 of the 2008 Farm Bill amends 7 U.S.C. 450l to extend
DIPP authorization through 2012, without changing any provisions of the
program. This rule amends 7 CFR part 760, subpart A, to reflect the
extension by updating the authority citation using the U.S. Code
citation.
This rule is changing the method by which DIPP funds will be
distributed if the available appropriated funds are not sufficient to
pay all claims. This is a discretionary change; it is not required by
the 2008 Farm Bill. This change will allow payments to be made as
claims arise by implementing a ``first-come, first-paid'' system. This
will provide enhanced relief over the alternative of delaying all
claims to the end of the year to determine whether the demand will
exceed the supply of funds, requiring pro-rated partial payments. If
the funds are not sufficient to pay all claims, Congress would need to
determine whether to enhance the appropriation for later years. The
alternative method of pro-rating claims based on available funding
would likely result in no one receiving immediate payment even though
in most years the funds are sufficient to cover all claims. The
adoption of a first-come, first-paid basis should be in keeping with
the general nature and history of the program.
Also, section 1601(c)(2) of the 2008 Farm Bill exempts this rule
from Paperwork Reduction Act (44 U.S.C. Chapter 35) requirements,
therefore, this rule removes Sec. 760.34 that specified the OMB
control number for the previous information collection approval.
Notice and Comment
These regulations are exempt from the notice and comment
requirements of the Administrative Procedures Act (5 U.S.C. 553), as
specified in section 1601(c) of the 2008 Farm Bill, which requires that
the regulations be promulgated and administered without regard to the
notice and comment provisions of 5 U.S.C. 553 or the Statement of
Policy of the Secretary of Agriculture effective July 24, 1971, (36 FR
13804) relating to notices of proposed rulemaking and public
participation in rulemaking. Therefore, these regulations are made
effective by this rule without a prior proposed rule or prior public
comment.
Executive Order 12866
The Office of Management and Budget (OMB) designated this rule as
not significant under Executive Order 12866
[[Page 41367]]
and therefore this rule has not been reviewed by OMB.
Regulatory Flexibility Act
This rule is not subject to the Regulatory Flexibility Act because
USDA is not required by 5 U.S.C. 553 or any other law to publish a
notice of proposed rulemaking for this rule.
Environmental Review
The environmental impacts of this rule have been considered in a
manner consistent with the provisions of the National Environmental
Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations of the Council
on Environmental Quality (40 CFR parts 1500-1508), and FSA regulations
for compliance with NEPA (7 CFR part 799). The changes required by the
2008 Farm Bill that are identified in this rule do not change the
structure or goals of the program and can be considered administrative
in nature. Therefore, FSA has determined that NEPA does not apply to
this final rule and no environment assessment or environmental impact
statement will be prepared.
Executive Order 12372
This program is not subject to Executive Order 12372, which
requires consultation with State and local officials. See the notice
related to 7 CFR part 3015, subpart V, published in the Federal
Register on June 24, 1983 (48 FR 29115).
Executive Order 12988
This rule has been reviewed under Executive Order 12988. This rule
is not retroactive and it does not preempt State or local laws,
regulations, or policies unless they present an irreconcilable conflict
with this rule. Before any judicial action may be brought regarding the
provisions of this rule the administrative appeal provisions of 7 CFR
parts 11 and 780 must be exhausted.
Executive Order 13132
The policies contained in this rule do not have any substantial
direct effect on States, on the relationship between the Federal
Government and the States, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on State and local
governments. Therefore, consultation with the States is not required.
Executive Order 13175
The policies contained in this rule do not have tribal implications
that preempt tribal law.
Unfunded Mandates
This rule contains no Federal mandates under the regulatory
provisions of Title II of the Unfunded Mandates Reform Act of 1995
(UMRA) for State, local, and tribal government or the private sector.
In addition, USDA was not required to publish a notice of proposed
rulemaking for this rule. Therefore, this rule is not subject to the
requirements of sections 202 and 205 of UMRA.
Federal Assistance Programs
The title and number of the Federal assistance program in the
Catalog of Federal Domestic Assistance to which this final rule applies
is 10.053--Dairy Indemnity Payments.
Paperwork Reduction Act
The regulations in this rule are exempt from the requirements of
the Paperwork Reduction Act (44 U.S.C. Chapter 35), as specified in
section 1601(c)(2) of the 2008 Farm Bill, which provides that these
regulations be promulgated and administered without regard to the
Paperwork Reduction Act.
E-Government Act Compliance
CCC and FSA are 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.
List of Subjects
7 CFR Part 760
Dairy products, Indemnity payments, Pesticides and pests.
7 CFR Part 1430
Dairy products, Fraud, Penalties, Price support programs, Reporting
and recordkeeping requirements.
0
For the reasons discussed above, 7 CFR parts 760 and 1430 are amended
as follows:
PART 760--INDEMNITY PAYMENT PROGRAMS
Subpart A--Dairy Indemnity Payment Program
0
1. Revise the authority citation for 7 CFR part 760, subpart A, to read
as follows:
Authority: 7 U.S.C. 450j-l.
0
2. Revise Sec. 760.33 to read as follows:
Sec. 760.33 Availability of funds.
(a) Payment of indemnity claims will be contingent upon the
availability of FSA funds to pay such claims. Claims will be, to the
extent practicable within funding limits, paid from available funds, on
a first-come, first-paid basis, based on the date FSA approves the
application, until funds available in that fiscal year have been
expended.
(b) DIPP claims received in a fiscal year after all available funds
have been expended will not receive payment for such claims.
Sec. 760.34 [Removed]
0
3. Remove Sec. 760.34.
PART 1430--DAIRY PRODUCTS
0
4. Revise the authority citation for part 1430 to read as follows:
Authority: 7 U.S.C. 7982, 8771, and 8773; and 15 U.S.C. 714b and
714c.
0
5. Revise 7 CFR part 1430, subpart A, to read as follows:
Subpart A--Dairy Product Price Support Program
Sec.
1430.100 Applicability.
1430.101 Definitions.
1430.102 Eligible products.
1430.103 Purchase prices.
1430.104 Sales from inventories.
Subpart A--Dairy Product Price Support Program
Sec. 1430.100 Applicability.
During the period beginning on January 1, 2008, and ending December
31, 2012, the Secretary of Agriculture will support the price of
cheddar cheese, butter, and nonfat dry milk by providing a standing
offer to purchase those products from eligible offerors. The products
must be made from cow's milk produced in the United States. Purchases
are subject to the terms and conditions in CCC's purchase
announcements.
Sec. 1430.101 Definitions.
For purposes of this subpart, the following definitions apply:
CCC means the Commodity Credit Corporation, USDA.
Eligible offeror means the person, firm, corporation, or other
legal entity obligated by the purchase agreement with CCC. The product
must not have been sold before to another party and the offeror must be
the manufacturer of the dairy product offered or a marketing
cooperative for the manufacturer.
Net removals means, for a given period of time, the total dairy
product
[[Page 41368]]
purchased by CCC through the program in this subpart plus the quantity
of the product exported through the Dairy Export Incentive Program (as
authorized in 15 U.S.C. 713a-14), less the quantity sold by CCC for
unrestricted use.
Sec. 1430.102 Eligible products.
(a) To be eligible for the program in this subpart, the products
must be manufactured from dairy cow's milk produced in the United
States, and must not have been previously owned by CCC. Dairy cow in
this instance means an animal of the kind that produces the majority of
dairy products in the United States and not, for example, cows of other
species of animals such as yaks or oxen.
(b) Products will be purchased only from eligible offerors of the
product, and only in carlot weights.
(c) The products purchased must be of the following grades and
moisture content, as evidenced by USDA-issued inspection certificates:
(1) Block cheddar cheese must be U.S. Grade A or higher, and the
moisture content must not exceed 38.5 percent;
(2) Barrel cheddar cheese must be U.S. Extra Grade, and the
moisture content must not exceed 36.5 percent;
(3) Butter must be U.S. Grade A or higher;
(4) Nonfat dry milk must be U.S. Extra Grade, and the moisture
content must not exceed 3.5 percent.
(d) CCC may require other terms and conditions of purchase, as
specified in CCC's purchase announcement.
Sec. 1430.103 Purchase prices.
(a) CCC will offer to purchase products at the following prices for
all regions of the United States:
(1) Cheddar cheese in blocks for not less than $1.13 per pound;
unless
(i) Net removals of cheese for a period of 12 consecutive months
exceed 200,000,000 pounds, but do not exceed 400,000,000 pounds, in
which case the CCC block cheese purchase price will be not less than
$1.03 per pound, during the immediately following month, or
(ii) Net removals of cheese for a period of 12 consecutive months
exceed 400,000,000 pounds, in which case the CCC block cheese purchase
price will be not less than $0.93 per pound during the immediately
following month;
(2) Cheddar cheese in barrels for $0.03 per pound less than the
cheddar cheese block price;
(3) Butter for not less than $1.05 per pound; unless
(i) Net removals of butter for a period of 12 consecutive months
exceed 450,000,000 pounds, but do not exceed 650,000,000 pounds, in
which case the CCC butter purchase price will be not less than $0.95
per pound during the immediately following month, or
(ii) Net removals of butter for a period of 12 consecutive months
exceed 650,000,000 pounds, in which case the CCC butter purchase price
will be not less than $0.85 per pound during the immediately following
month; and
(4) Nonfat dry milk for not less than $0.80 per pound, unless
(i) Net removals of nonfat dry milk for a period of 12 consecutive
months exceed 600,000,000 pounds, but do not exceed 800,000,000 pounds,
in which case the CCC nonfat dry milk purchase price will be not less
than $0.75 per pound during the immediately following month, or,
(ii) Net removals of nonfat dry milk for a period of 12 consecutive
months exceed 800,000,000 pounds, in which case the CCC nonfat dry milk
purchase price will be not less than $0.70 per pound during the
immediately following month.
(b) CCC may offer to purchase cheddar cheese, butter, fortified
nonfat dry milk, or fortified instant nonfat dry milk in consumer-sized
ready-to-consume packages at a premium to the purchase prices for
cheddar cheese, butter and nonfat dry milk specified in paragraph (a)
of this section. Any such offers will be made through CCC's purchase
announcements, and such offers may be limited by quantity and to a
specific time period.
(c) CCC may offer to purchase cheddar cheese with a lower moisture
content than is specified in Sec. 1430.102(c) at a premium to the
prices specified in paragraph (a) of this section. Any such offers will
be made through CCC's purchase announcements, and such offers may be
limited by quantity and to a specific time period.
Sec. 1430.104 Sales from inventories.
(a) CCC may sell any dairy product purchased as specified in this
subpart for unrestricted use at the market price prevailing for that
product at the time of sale, except that the sale price will not be
less than 110 percent of the purchase price specified in Sec.
1430.103(a), before any price reduction for the amount of CCC net
removals of the dairy products.
(b) CCC may sell or distribute dairy products purchased under this
section for restricted use when such sale is determined to maximize the
return to CCC on its purchases.
Signed in Washington, DC, on July 8, 2010.
Jonathan W. Coppess,
Administrator, Farm Service Agency, and Executive Vice President,
Commodity Credit Corporation.
[FR Doc. 2010-17409 Filed 7-15-10; 8:45 am]
BILLING CODE 3410-05-P