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Rules and Regulations Federal Register

27631 

Vol. 75, No. 95 

Tuesday, May 18, 2010 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 985 

[Doc. No. AMS–FV–09–0082; FV10–985–1 

FR] 

Marketing Order Regulating the 

Handling of Spearmint Oil Produced in 

the Far West; Salable Quantities and 

Allotment Percentages for the 2010– 

2011 Marketing Year 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule establishes the 

quantity of spearmint oil produced in 

the Far West, by class that handlers may 

purchase from, or handle for, producers 

during the 2010–2011 marketing year, 

which begins on June 1, 2010. This rule 

establishes salable quantities and 

allotment percentages for Class 1 

(Scotch) spearmint oil of 566,962 

pounds and 28 percent, respectively, 

and for Class 3 (Native) spearmint oil of 

980,265 pounds and 43 percent, 

respectively. The Spearmint Oil 

Administrative Committee (Committee), 

the agency responsible for local 

administration of the marketing order 

for spearmint oil produced in the Far 

West, recommended these limitations 

for the purpose of avoiding extreme 

fluctuations in supplies and prices to 

help maintain stability in the spearmint 

oil market. 

DATES: Effective Date: This final rule 

becomes effective June 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Susan M. Coleman, Marketing Specialist 

or Gary D. Olson, Regional Manager, 

Northwest Marketing Field Office, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA; Telephone: (503) 326– 

2724; Fax: (503) 326–7440; or E-mail: 

Sue.Coleman@ams.usda.gov or 

GaryD.Olson@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Antoinette 

Carter, Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue, SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720– 

2491, Fax: (202) 720–8938, or E-mail: 

Antoinette.Carter@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This final 

rule is issued under Marketing Order 

No. 985 (7 CFR part 985), as amended, 

regulating the handling of spearmint oil 

produced in the Far West (Washington, 

Idaho, Oregon, and designated parts of 

Nevada and Utah), hereinafter referred 

to as the ‘‘order.’’ The order is effective 

under the Agricultural Marketing 

Agreement Act of 1937, as amended 

(7 U.S.C. 601–674), hereinafter referred 

to as the ‘‘Act.’’ 

The Department of Agriculture 

(USDA) is issuing this rule in 

conformance with Executive Order 

12866. 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. Under the marketing order now 

in effect, salable quantities and 

allotment percentages may be 

established for classes of spearmint oil 

produced in the Far West. This final 

rule establishes the quantity of 

spearmint oil produced in the Far West, 

by class, which may be purchased from 

or handled for producers by handlers 

during the 2010–2011 marketing year, 

which begins on June 1, 2010. This rule 

will not preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

The Act provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

section 608c(15)(A) of the Act, any 

handler subject to an order may file 

with USDA a petition stating that the 

order, any provision of the order, or any 

obligation imposed in connection with 

the order is not in accordance with law 

and request a modification of the order 

or to be exempted therefrom. A handler 

is afforded the opportunity for a hearing 

on the petition. After the hearing, USDA 

would rule on the petition. The Act 

provides that the district court of the 

United States in any district in which 

the handler is an inhabitant, or has his 

or her principal place of business, has 

jurisdiction to review USDA’s ruling on 

the petition, provided an action is filed 

not later than 20 days after the date of 

the entry of the ruling. 

The Committee meets annually in the 

fall to review sales and other market 

information for the current marketing 

year, and to recommend the 

establishment of salable quantities and 

allotment percentages for each class of 

oil for the forthcoming marketing year 

beginning on June 1. The salable 

quantity establishes the amount of each 

class of spearmint oil that may be sold 

during the marketing year. Each 

producer is allotted a share of the 

salable quantity by applying the 

allotment percentage to that producer’s 

allotment base for the applicable class of 

spearmint oil. The salable quantities are 

intended to satisfy anticipated market 

needs. 

Recommendations are made well in 

advance to allow producers the chance 

to adjust their spearmint plantings in 

relation to the salable quantities and 

allotment percentages in the proposed 

regulation. In developing a regulatory 

recommendation for USDA, the 

Committee utilizes information 

pertaining to current and projected 

supply, demand, production costs and 

producer prices, as well as input from 

spearmint oil handlers and producers 

regarding prospective marketing 

conditions. 

Pursuant to authority in §§ 985.50, 

985.51, and 985.52 of the order, the full 

eight-member Committee met on 

October 14, 2009, and recommended 

salable quantities and allotment 

percentages for both classes of oil for the 

2010–2011 marketing year. The 

Committee, in a vote with six members 

in favor and two members opposed, 

recommended the establishment of a 

salable quantity and allotment 

percentage for Scotch spearmint oil of 

566,962 pounds and 28 percent, 

respectively. The two members 

opposing the action were in favor of a 

greater salable quantity and allotment 

percentage for Scotch. For Native 

spearmint oil, the Committee 

unanimously recommended the 

establishment of a salable quantity and 

allotment percentage of 980,265 pounds 

and 43 percent, respectively. 

This final rule limits the amount of 

spearmint oil that handlers may 

purchase from, or handle for, producers 


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27632 Federal Register / Vol. 75, No. 95 / Tuesday, May 18, 2010 / Rules and Regulations 

during the 2010–2011 marketing year, 

which begins on June 1, 2010. Salable 

quantities and allotment percentages 

have been placed into effect each season 

since the order’s inception in 1980. 

Class 1 (Scotch) Spearmint Oil 

The U.S. production of Scotch 

spearmint oil is concentrated in the Far 

West, which includes Washington, 

Idaho, and Oregon and a portion of 

Nevada and Utah. Scotch spearmint oil 

is also produced in the Midwest States 

of Indiana, Michigan, and Wisconsin, as 

well as in the States of Montana, South 

Dakota, North Dakota, and Minnesota. 

When the order became effective in 

1980, the Far West had about 72 percent 

of global Scotch spearmint oil sales. 

This was produced on about 9,702 acres 

within the Far West production area. In 

2004, Scotch spearmint was planted on 

4,772 acres in the Far West, whereas 

acreage in 2009 was up to 7,583 acres. 

About 84 percent of the Far West Scotch 

spearmint oil acreage is produced in 

Washington State. 

During the last 40 years, the Far 

West’s share of world Scotch production 

has varied. In 2002, for example, the Far 

West share of world sales reached a low 

of about 27 percent according to 

Committee records. The earlier 

downward trend in the Far West share 

of world sales was attributable to the 

increase in global production— 

specifically increases in Canada and 

China—and decreasing acreage in the 

Far West. Since that low, Far West 

spearmint oil sales as a percentage of 

total world sales is back up to over 41 

percent. 

This recent resurgence in overall 

share of the world market is due to 

many factors, including an increase in 

Far West production, a decrease in 

production in China coupled with an 

increase in Chinese utilization of its 

own production, and a recent decrease 

in acreage in other production areas 

within the United States. For example, 

production in the Midwest states has 

gone from 186,000 pounds in 2004, 

down to an estimated 35,000 pounds in 

2009. This has increased the Far West’s 

percentage of annual U.S. sales of 

Scotch spearmint oil to approximately 

60 percent from the 2002 low of about 

43 percent. 

Other factors that have played a 

significant role in the Far West share of 

the global Scotch spearmint oil market 

include the overall quality of imported 

oil and technological advances that 

allow for more blending of lower quality 

oils. Such factors have provided the 

Committee with challenges in 

accurately predicting trade demand for 

Scotch spearmint oil. Despite these 

challenges, the marketing order has 

continued to contribute to price and 

market stabilization for Far West 

producers. 

When the Committee met in October 

2008 to recommend the 2009–2010 

volume regulation, demand for 

spearmint oil appeared high in relation 

to expected production. The Committee 

consequently recommended a relatively 

high 2009–2010 Scotch salable quantity 

and allotment percentage in an effort to 

match supply with anticipated demand. 

When the Committee recommended the 

2009–2010 Scotch salable quantity and 

allotment percentage of 842,171 pounds 

and 42 percent, respectively, it also 

estimated that the quantity of salable 

Scotch spearmint oil carried over from 

the 2008–2009 marketing year into the 

2009–2010 marketing year would 

approximate 124,735 pounds. The 

actual amount carried forward on June 

1, 2009, however, was 207,976 pounds, 

an amount higher than the Committee 

considers desirable. Major factors 

contributing to the large quantity of 

Scotch spearmint oil being carried into 

the 2009–2010 marketing year included 

fewer 2008–2009 sales than anticipated 

and production levels higher than 

expected. 

The large carry-in, coupled with the 

overall lackluster economy and current 

lack of demand for spearmint oil has led 

to an over-supply situation within the 

Far West spearmint oil industry, 

particularly with Scotch spearmint oil. 

In October 2008, spearmint oil handlers 

had projected that the 2009–2010 trade 

demand for Far West Scotch spearmint 

oil would range from a low of 800,000 

pounds to a high of 1,000,000 pounds. 

In October 2009, the same handlers 

reassessed their earlier projection for 

this period with a less optimistic range 

of 700,000 pounds to 750,000 pounds of 

Scotch spearmint oil trade demand. 

Although consumer demand for mint 

flavored products is reportedly steady— 

thus providing sustained optimism for 

the long term demand for Far West 

spearmint oil—these handlers reported 

that the manufacturers of such products 

were reducing purchases and meeting 

demand by trimming their own 

inventories to reduce the recessionary 

impact on their businesses. 

The Committee recommended the 

2010–2011 Scotch spearmint oil salable 

quantity of 566,962 pounds and 

allotment percentage of 28 percent 

utilizing sales estimates for 2010–2011 

Scotch spearmint oil as provided by 

several of the industry’s handlers, as 

well as historical and current Scotch 

spearmint oil sales levels. The 

Committee is estimating that about 

800,000 pounds of Scotch spearmint oil 

may be sold during the 2010–2011 

marketing year. When considered in 

conjunction with the estimated carry-in 

of 349,998 pounds of oil on June 1, 

2010, the recommended salable quantity 

of 566,962 pounds results in a total 

available supply of about 916,960 

pounds of Scotch spearmint oil during 

the 2010–2011 marketing year. 

The Committee’s stated intent is to 

keep adequate supplies available to 

meet market needs and improve 

producer prices. 

The Committee developed its 

recommendation for the Scotch 

spearmint oil salable quantity and 

allotment percentage for the 2010–2011 

marketing year on the information 

discussed above, as well as the data 

outlined below. 

(A) Estimated carry-in on June 1, 

2010—349,998 pounds. This figure is 

the difference between the revised 

2009–2010 marketing year total 

available supply of 1,049,998 pounds 

and the estimated 2009–2010 marketing 

year trade demand of 700,000 pounds. 

(B) Estimated trade demand for the 

2010–2011 marketing year—800,000 

pounds. This figure is based on input 

from producers at six Scotch spearmint 

oil production area meetings held in late 

September and early October 2009, as 

well as estimates provided by handlers 

and other meeting participants at the 

October 14, 2009, meeting. The average 

estimated trade demand provided at the 

six production area meetings is 800,000 

pounds, which is the same level as 

estimated by handlers. The average of 

sales over the last five years is 841,436 

pounds. 

(C) Salable quantity required from the 

2010–2011 marketing year production— 

450,002 pounds. This figure is the 

difference between the estimated 2010– 

2011 marketing year trade demand 

(800,000 pounds) and the estimated 

carry-in on June 1, 2010 (349,998 

pounds). 

(D) Total estimated allotment base for 

the 2010–2011 marketing year— 

2,024,863 pounds. This figure 

represents a one percent increase over 

the revised 2009–2010 total allotment 

base. This figure is generally revised 

each year on June 1 due to producer 

base being lost because of the bona fide 

effort production provisions of 

§ 985.53(e). The revision is usually 

minimal. 

(E) Computed allotment percentage— 

22.2 percent. This percentage is 

computed by dividing the required 

salable quantity by the total estimated 

allotment base. 

(F) Recommended allotment 

percentage—28 percent. The 

Committee’s recommendation is based 


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Federal Register / Vol. 75, No. 95 / Tuesday, May 18, 2010 / Rules and Regulations 27633 

on the computed allotment percentage 

(22.2 percent), the average of the 

computed allotment percentage figures 

from the six production area meetings 

(23.7 percent), and input from 

producers and handlers at the October 

14, 2009, meeting. The actual 

recommendation of 28 percent is based 

on the Committee’s determination that 

the computed percentage (22.2 percent) 

may not adequately supply the potential 

2010–2011 Scotch spearmint oil market. 

(G) The Committee’s recommended 

salable quantity—566,962 pounds. This 

figure is the product of the 

recommended allotment percentage and 

the total estimated allotment base. 

(H) Estimated available supply for the 

2010–2011 marketing year—916,960 

pounds. This figure is the sum of the 

2010–2011 recommended salable 

quantity (566,962 pounds) and the 

estimated carry-in on June 1, 2010 

(349,998 pounds). 

Class 3 (Native) Spearmint Oil 

The Native spearmint oil industry is 

facing market conditions similar to 

those affecting the Scotch spearmint oil 

market, although not as severe. Over 90 

percent of U.S. production of Native 

spearmint is produced within the Far 

West production area, thus domestic 

production outside this area is not a 

major factor in the marketing of Far 

West Native spearmint oil. This has 

been an attribute of U.S. production 

since the order’s inception. Minor 

domestic production of Native 

spearmint oil outside of the Far West is 

in Indiana, Michigan, Wisconsin, 

Montana, South Dakota, North Dakota, 

and Minnesota. 

According to the Committee, very 

little true Native spearmint oil is 

produced outside of the United States. 

However, India produces an increasing 

quantity of spearmint oil with qualities 

very similar to Native spearmint oil. 

Committee records show that in 1996 

the Far West accounted for nearly 93 

percent of global sales of Native or 

Native quality spearmint oil. By 2009, 

that share had shrunk to less than 60 

percent. 

As with Scotch spearmint, acreage 

planted to Native spearmint has 

fluctuated with demand and producer 

price. In 2004, Committee records 

indicate that there were 4,805 acres of 

Native spearmint planted as opposed to 

the 8,919 acres planted in 2009. 

When the Committee met in October 

2008 to recommend the 2009–2010 

volume regulation, the same relatively 

good market conditions buoying the 

industry since 2004 were in effect 

(although the Committee initially 

recommended Native spearmint oil 

allotment percentages averaging less 

than 43 percent between 2004 and 2008, 

demand proved better than anticipated 

and multiple intra-seasonal increases 

were effectuated each year to bring the 

final percentages up to a four-year 

average of nearly 56 percent). As a 

consequence, the Committee 

recommended a 2009–2010 marketing 

year allotment percentage of 53 percent 

for Native spearmint oil to match supply 

with anticipated demand. 

At the same time, the Committee also 

estimated that the quantity of salable 

Native spearmint oil that would be 

carried over from the 2008–2009 

marketing year into the 2009–2010 

marketing year would approximate 

51,363 pounds. The actual amount 

carried forward on June 1, 2009, 

however, was 130,323 pounds. Factors 

contributing to the larger 2009–2010 

marketing year carry-in included fewer 

2008–2009 sales than anticipated and 

production levels higher than expected. 

Although to a lesser extent than with 

Scotch spearmint oil, the large Native 

spearmint oil carry-in, coupled with the 

recessionary economy and subsequent 

lack of demand for spearmint oil, has 

led to a moderately oversupplied Native 

spearmint oil market. In October 2008, 

the 2009–2010 trade demand for Far 

West Native spearmint oil was projected 

to average about 1,275,000 pounds. In 

October 2009, these same handlers 

revised the estimate for the 2009–2010 

marketing year for a projected average 

trade demand of about 1,143,333 

pounds for Native spearmint oil. 

The Committee’s recommendation for 

the 2010–2011 Native spearmint oil 

salable quantity of 980,265 pounds and 

allotment percentage of 43 percent 

utilized sales estimates provided by 

several of the industry’s handlers, as 

well as historical and current Native 

spearmint oil sales levels. With figures 

about the same as those of the 2009– 

2010 marketing year, the Committee is 

estimating that 2010–2011 Native 

spearmint oil marketing year trade 

demand will be about 1,140,000 

pounds. When considered in 

conjunction with the estimated carry-in 

of 186,595 pounds of oil on June 1, 

2010, the recommended salable quantity 

of 980,265 pounds results in a total 

2010–2011 available supply of Native 

spearmint oil of about 1,166,860 

pounds. 

Similar to the methods used with 

Scotch spearmint oil, the Committee’s 

method of calculating the Native 

spearmint oil salable quantity and 

allotment percentage primarily relies on 

the relationship between estimated 

trade demand and available supply. The 

Committee’s stated intent is to make 

adequate supplies available to meet 

market needs and improve producer 

prices. 

The Committee based its 

recommendation for the Native 

spearmint oil salable quantity and 

allotment percentage for the 2010–2011 

marketing year on the information 

discussed above, as well as the data 

outlined below. 

(A) Estimated carry-in on June 1, 

2010—186,595 pounds. This figure is 

the difference between the revised 

2009–2010 marketing year total 

available supply of 1,326,595 pounds 

and the estimated 2009–2010 marketing 

year trade demand of 1,140,000 pounds. 

(B) Estimated trade demand for the 

2010–2011 marketing year—1,140,000 

pounds. This figure is based on input 

from producers at the six Native 

spearmint oil production area meetings 

held in late September and early 

October 2009, as well as estimates 

provided by handlers and other meeting 

participants at the October 14, 2009, 

meeting. The average estimated trade 

demand provided at the six production 

area meetings was 1,140,000 pounds, 

whereas the handler estimate ranged 

from 1,150,000 pounds to 1,200,000 

pounds. 

(C) Salable quantity required from the 

2010–2011 marketing year production— 

953,405 pounds. This figure is the 

difference between the estimated 2010– 

2011 marketing year trade demand 

(1,140,000 pounds) and the estimated 

carry-in on June 1, 2010 (186,595 

pounds). 

(D) Total estimated allotment base for 

the 2010–2011 marketing year— 

2,279,687 pounds. This figure 

represents a one percent increase over 

the revised 2009–2010 total allotment 

base. This figure is generally revised 

each year on June 1 due to producer 

base being lost due to the bona fide 

effort production provisions of 

§ 985.53(e). The revision is usually 

minimal. 

(E) Computed allotment percentage— 

41.8 percent. This percentage is 

computed by dividing the required 

salable quantity (953,405 pounds) by the 

total estimated allotment base 

(2,279,687 pounds). 

(F) Recommended allotment 

percentage—43 percent. This is the 

Committee’s recommendation based on 

the computed allotment percentage 

(41.8 percent), the average of the 

computed allotment percentage figures 

from the six production area meetings 

(45 percent), and input from producers 

and handlers at the October 14, 2009, 

meeting. 

(G) The Committee’s recommended 

salable quantity—980,265 pounds. This 


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27634 Federal Register / Vol. 75, No. 95 / Tuesday, May 18, 2010 / Rules and Regulations 

figure is the product of the 

recommended allotment percentage (43 

percent) and the total estimated 

allotment base (2,279,687 pounds). 

(H) Estimated available supply for the 

2010–2011 marketing year—1,166,860 

pounds. This figure is the sum of the 

2010–2011 recommended salable 

quantity (980,265 pounds) and the 

estimated carry-in on June 1, 2010 

(186,595 pounds). 

The salable quantity is the total 

quantity of each class of spearmint oil 

that handlers may purchase from, or 

handle on behalf of, producers during a 

marketing year. Each producer is 

allotted a share of the salable quantity 

by applying the allotment percentage to 

the producer’s allotment base for the 

applicable class of spearmint oil. 

The Committee’s recommended 

Scotch and Native spearmint oil salable 

quantities and allotment percentages of 

566,962 pounds and 28 percent, and 

980,265 pounds and 43 percent, 

respectively, are based on the goal of 

maintaining market stability. The 

Committee anticipates that this goal 

would be achieved by matching supply 

to estimated demand and thus avoiding 

extreme fluctuations in spearmint oil 

supplies and prices. The salable 

quantities are not expected to cause a 

shortage of spearmint oil supplies. Any 

unanticipated or additional market 

demand for spearmint oil—developing 

during the marketing year—can be 

satisfied by an intra-seasonal increase in 

the salable quantities. Producers who 

produce more than their annual 

allotments during the 2010–2011 

marketing year may transfer such excess 

spearmint oil to producers with 

production less than their annual 

allotment, or, up until November 1, 

2010, place it into the reserve pool. 

This regulation is similar to 

regulations issued in prior seasons. The 

average allotment percentage for the 

most recent five marketing years for 

Scotch spearmint oil is 47 percent, 

while the average allotment percentage 

for the same five-year period for Native 

spearmint oil is 53 percent. Costs to 

producers and handlers resulting from 

this rule are expected to be offset by the 

benefits derived from a stable market 

and improved returns. In conjunction 

with the issuance of this final rule, 

USDA has reviewed the Committee’s 

marketing policy statement for the 

2010–2011 marketing year. The 

Committee’s marketing policy 

statement, a requirement whenever the 

Committee recommends volume 

regulation, fully meets the intent of 

§ 985.50 of the order. During its 

discussion of potential 2010–2011 

salable quantities and allotment 

percentages, the Committee considered: 

(1) The estimated quantity of salable oil 

of each class held by producers and 

handlers; (2) the estimated demand for 

each class of oil; (3) the prospective 

production of each class of oil; (4) the 

total of allotment bases of each class of 

oil for the current marketing year and 

the estimated total of allotment bases of 

each class for the ensuing marketing 

year; (5) the quantity of reserve oil, by 

class, in storage; (6) producer prices of 

oil, including prices for each class of oil; 

and (7) general market conditions for 

each class of oil, including whether the 

estimated season average price to 

producers is likely to exceed parity. 

Conformity with the USDA’s 

‘‘Guidelines for Fruit, Vegetable, and 

Specialty Crop Marketing Orders’’ has 

also been reviewed and confirmed. 

The establishment of these salable 

quantities and allotment percentages 

will allow for anticipated market needs. 

In determining anticipated market 

needs, consideration by the Committee 

was given to historical sales, as well as 

changes and trends in production and 

demand. This rule also provides 

producers with information on the 

amount of spearmint oil that should be 

produced for the 2010–2011 season in 

order to meet anticipated market 

demand. 

Final Regulatory Flexibility Analysis 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601–612), the Agricultural 

Marketing Service (AMS) has 

considered the economic impact of this 

action on small entities. Accordingly, 

AMS has prepared this final regulatory 

flexibility analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

business subject to such actions in order 

that small businesses will not be unduly 

or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and rules issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. 

There are eight spearmint oil handlers 

subject to regulation under the order, 

and approximately 38 producers of 

Scotch spearmint oil and approximately 

84 producers of Native spearmint oil in 

the regulated production area. Small 

agricultural service firms are defined by 

the Small Business Administration 

(SBA) (13 CFR 121.201) as those having 

annual receipts of less than $7,000,000, 

and small agricultural producers are 

defined as those having annual receipts 

of less than $750,000. 

Based on the SBA’s definition of 

small entities, the Committee estimates 

that 2 of the 8 handlers regulated by the 

order could be considered small 

entities. Most of the handlers are large 

corporations involved in the 

international trading of essential oils 

and the products of essential oils. In 

addition, the Committee estimates that 

19 of the 38 Scotch spearmint oil 

producers and 29 of the 84 Native 

spearmint oil producers could be 

classified as small entities under the 

SBA definition. Thus, a majority of 

handlers and producers of Far West 

spearmint oil may not be classified as 

small entities. 

The Far West spearmint oil industry 

is characterized by producers whose 

farming operations generally involve 

more than one commodity, and whose 

income from farming operations is not 

exclusively dependent on the 

production of spearmint oil. A typical 

spearmint oil-producing operation has 

enough acreage for rotation such that 

the total acreage required to produce the 

crop is about one-third spearmint and 

two-thirds rotational crops. Thus, the 

typical spearmint oil producer has to 

have considerably more acreage than is 

planted to spearmint during any given 

season. Crop rotation is an essential 

cultural practice in the production of 

spearmint oil for weed, insect, and 

disease control. To remain economically 

viable with the added costs associated 

with spearmint oil production, a 

majority of spearmint oil-producing 

farms fall into the SBA category of large 

businesses. 

Small spearmint oil producers 

generally are not as extensively 

diversified as larger ones and as such 

are more at risk from market 

fluctuations. Such small producers 

generally need to market their entire 

annual allotment and do not have the 

luxury of having other crops to cushion 

seasons with poor spearmint oil returns. 

Conversely, large diversified producers 

have the potential to endure one or 

more seasons of poor spearmint oil 

markets because income from alternate 

crops could support the operation for a 

period of time. Being reasonably assured 

of a stable price and market provides 

small producing entities with the ability 

to maintain proper cash flow and to 

meet annual expenses. Thus, the market 

and price stability provided by the order 

potentially benefit the small producer 

more than such provisions benefit large 

producers. Even though a majority of 

handlers and producers of spearmint oil 

may not be classified as small entities, 

the volume control feature of this order 

has small entity orientation. 


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Federal Register / Vol. 75, No. 95 / Tuesday, May 18, 2010 / Rules and Regulations 27635 

This final rule establishes the quantity 

of spearmint oil produced in the Far 

West, by class that handlers may 

purchase from, or handle for, producers 

during the 2010–2011 marketing year. 

The Committee recommended this rule 

to help maintain stability in the 

spearmint oil market by matching 

supply to estimated demand thereby 

avoiding extreme fluctuations in 

supplies and prices. Establishing 

quantities to be purchased or handled 

during the marketing year through 

volume regulations allows producers to 

plan their spearmint planting and 

harvesting to meet expected market 

needs. The provisions of §§ 985.50, 

985.51, and 985.52 of the order 

authorize this rule. 

Instability in the spearmint oil subsector of the mint industry is much 

more likely to originate on the supply 

side than the demand side. Fluctuations 

in yield and acreage planted from 

season-to-season tend to be larger than 

fluctuations in the amount purchased by 

handlers. Demand for spearmint oil 

tends to be relatively stable from yearto-year. The demand for spearmint oil is 

expected to grow slowly for the 

foreseeable future because the demand 

for consumer products that use 

spearmint oil will likely expand slowly, 

in line with population growth. 

Demand for spearmint oil at the farm 

level is derived from retail demand for 

spearmint-flavored products such as 

chewing gum, toothpaste, and 

mouthwash. The manufacturers of these 

products are by far the largest users of 

mint oil. However, spearmint flavoring 

is generally a very minor component of 

the products in which it is used, so 

changes in the raw product price have 

no impact on retail prices for those 

goods. 

Spearmint oil production tends to be 

cyclical. Years of large production, with 

demand remaining reasonably stable, 

have led to periods in which large 

producer stocks of unsold spearmint oil 

have depressed producer prices for a 

number of years. Shortages and high 

prices may follow in subsequent years, 

as producers respond to price signals by 

cutting back production. 

The significant variability is 

illustrated by the fact that the coefficient 

of variation (a standard measure of 

variability; ‘‘CV’’) of Far West spearmint 

oil production from 1980 through 2008 

was about 0.23. The CV for spearmint 

oil grower prices was about 0.14, well 

below the CV for production. This 

provides an indication of the price 

stabilizing impact of the marketing 

order. 

Production in the shortest marketing 

year was about 49 percent of the 29-year 

average (1.87 million pounds from 1980 

through 2008) and the largest crop was 

approximately 165 percent of the 29- 

year average. A key consequence is that 

in years of oversupply and low prices 

the season average producer price of 

spearmint oil is below the average cost 

of production (as measured by the 

Washington State University 

Cooperative Extension Service.) 

The wide fluctuations in supply and 

prices that result from this cycle, which 

was even more pronounced before the 

creation of the marketing order, can 

create liquidity problems for some 

producers. The marketing order was 

designed to reduce the price impacts of 

the cyclical swings in production. 

However, producers have been less able 

to weather these cycles in recent years 

because of the increase in production 

costs. While prices have been relatively 

steady, the cost of production has 

increased to the extent that plans to 

plant spearmint may be postponed or 

changed indefinitely. Producers are also 

enticed by the prices of alternative crops 

and their lower cost of production. 

In an effort to stabilize prices, the 

spearmint oil industry uses the volume 

control mechanisms authorized under 

the order. This authority allows the 

Committee to recommend a salable 

quantity and allotment percentage for 

each class of oil for the upcoming 

marketing year. The salable quantity for 

each class of oil is the total volume of 

oil that producers may sell during the 

marketing year. The allotment 

percentage for each class of spearmint 

oil is derived by dividing the salable 

quantity by the total allotment base. 

Each producer is then issued an 

annual allotment certificate, in pounds, 

for the applicable class of oil, which is 

calculated by multiplying the 

producer’s allotment base by the 

applicable allotment percentage. This is 

the amount of oil for the applicable 

class that the producer can sell. 

By November 1 of each year, the 

Committee identifies any oil that 

individual producers have produced 

above the volume specified on their 

annual allotment certificates. This 

excess oil is placed in a reserve pool 

administered by the Committee. 

There is a reserve pool for each class 

of oil that may not be sold during the 

current marketing year unless USDA 

approves a Committee recommendation 

to make a portion of the pool available. 

However, limited quantities of reserve 

oil are typically sold to fill deficiencies. 

A deficiency occurs when on-farm 

production is less than a producer’s 

allotment. In that case, a producer’s own 

reserve oil can be sold to fill that 

deficiency. Excess production (higher 

than the producer’s allotment) can be 

sold to fill other producers’ deficiencies. 

All of this needs to take place by 

November 1. 

In any given year, the total available 

supply of spearmint oil is composed of 

current production plus carry-over 

stocks from the previous crop. The 

Committee seeks to maintain market 

stability by balancing supply and 

demand, and to close the marketing year 

with an appropriate level of carryout. If 

the industry has production in excess of 

the salable quantity, then the reserve 

pool absorbs the surplus quantity of 

spearmint oil, which goes unsold during 

that year unless the oil is needed for 

unanticipated sales. 

Under its provisions, the order may 

attempt to stabilize prices by (1) limiting 

supply and establishing reserves in high 

production years, thus minimizing the 

price-depressing effect that excess 

producer stocks have on unsold 

spearmint oil, and (2) ensuring that 

stocks are available in short supply 

years when prices would otherwise 

increase dramatically. The reserve pool 

stocks grown in large production years 

are drawn down in short crop years. 

An econometric model was used to 

assess the impact that volume control 

has on the prices producers receive for 

their commodity. Without volume 

control, spearmint oil markets would 

likely be over-supplied, resulting in low 

producer prices and a large volume of 

oil stored and carried over to the next 

crop year. The model estimates how 

much lower producer prices would 

likely be in the absence of volume 

controls. 

The Committee estimated the trade 

demand for the 2010–2011 marketing 

year for both classes of oil at 1,940,000 

pounds, and that the expected 

combined carry-in will be 536,593 

pounds. This results in a combined 

required salable quantity of 1,403,407 

pounds. With volume control, sales by 

producers for the 2010–2011 marketing 

year would be limited to 1,547,227 

pounds (the recommended salable 

quantity for both classes of spearmint 

oil). 

The recommended salable 

percentages, upon which 2010–2011 

producer allotments are based, are 28 

percent for Scotch and 43 percent for 

Native. Without volume controls, 

producers would not be limited to these 

allotment levels, and could produce and 

sell additional spearmint. The 

econometric model estimated a $1.51 

decline in the season average producer 

price per pound (from both classes of 

spearmint oil) resulting from the higher 

quantities that would be produced and 

marketed without volume control. The 


hsrobinson on DSK69SOYB1PROD with RULES
27636 Federal Register / Vol. 75, No. 95 / Tuesday, May 18, 2010 / Rules and Regulations 

surplus situation for the spearmint oil 

market that would exist without volume 

controls in 2010–2011 also would likely 

dampen prospects for improved 

producer prices in future years because 

of the buildup in stocks. 

The use of volume controls allows the 

industry to fully supply spearmint oil 

markets while avoiding the negative 

consequences of over-supplying these 

markets. The use of volume controls is 

believed to have little or no effect on 

consumer prices of products containing 

spearmint oil and will not result in 

fewer retail sales of such products. 

The Committee discussed alternatives 

to the recommendations contained in 

this rule for both classes of spearmint 

oil. The Committee discussed and 

rejected the idea of recommending that 

there not be any volume regulation for 

both classes of spearmint oil because of 

the severe price-depressing effects that 

would occur without volume control. 

After computing the initial 22.2 

percent Scotch spearmint oil allotment 

percentage, the Committee considered 

various alternative levels of volume 

control for Scotch spearmint oil. 

Considered levels ranged from 28 

percent to 32 percent. There was 

consensus that the allotment percentage 

for 2010–2011 should be less than the 

percentage established for the 2009– 

2010 marketing year (42 percent). After 

considerable discussion, however, the 

Committee determined that 566,962 

pounds and 28 percent would be the 

most effective salable quantity and 

allotment percentage, respectively, for 

the 2010–2011 marketing year. 

The Committee was able to reach a 

consensus regarding the level of volume 

control for Native spearmint oil. After 

first computing the allotment percentage 

at 41.8 percent, the Committee 

unanimously determined that 980,265 

pounds and 43 percent would be the 

most effective salable quantity and 

allotment percentage, respectively, for 

the 2010–2011 marketing year. 

As noted earlier, the Committee’s 

recommendation to establish salable 

quantities and allotment percentages for 

both classes of spearmint oil was made 

after careful consideration of all 

available information, including: (1) The 

estimated quantity of salable oil of each 

class held by producers and handlers; 

(2) the estimated demand for each class 

of oil; (3) the prospective production of 

each class of oil; (4) the total of 

allotment bases of each class of oil for 

the current marketing year and the 

estimated total of allotment bases of 

each class for the ensuing marketing 

year; (5) the quantity of reserve oil, by 

class, in storage; (6) producer prices of 

oil, including prices for each class of oil; 

and (7) general market conditions for 

each class of oil, including whether the 

estimated season average price to 

producers is likely to exceed parity. 

Based on its review, the Committee 

believes that the salable quantity and 

allotment percentage levels 

recommended would achieve the 

objectives sought. 

Without any regulations in effect, the 

Committee believes the industry would 

return to the pronounced cyclical price 

patterns that occurred prior to the order, 

and that prices in 2010–2011 would 

decline substantially below current 

levels. 

According to the Committee, the 

recommended salable quantities and 

allotment percentages are expected to 

achieve the goals of market and price 

stability. 

As previously stated, annual salable 

quantities and allotment percentages 

have been issued for both classes of 

spearmint oil since the order’s 

inception. Reporting and recordkeeping 

requirements have remained the same 

for each year of regulation. These 

requirements have been approved by the 

Office of Management and Budget under 

OMB Control No. 0581–0178, Vegetable 

and Specialty Crops. Accordingly, this 

rule would not impose any additional 

reporting or recordkeeping requirements 

on either small or large spearmint oil 

producers or handlers. As with all 

Federal marketing order programs, 

reports and forms are periodically 

reviewed to reduce information 

requirements and duplication by 

industry and public sector agencies. 

Furthermore, USDA has not identified 

any relevant Federal rules that 

duplicate, overlap, or conflict with this 

rule. 

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. 

In addition, the Committee’s meeting 

was widely publicized throughout the 

spearmint oil industry and all interested 

persons were invited to attend the 

meeting and participate in Committee 

deliberations on all issues. Like all 

Committee meetings, the October 14, 

2009, meeting was a public meeting and 

all entities, both large and small, were 

able to express views on this issue. 

A proposed rule concerning this 

action was published in the Federal 

Register on March 22, 2010 (75 FR 

13445). Copies of the rule were 

provided to Committee staff, which in 

turn made it available to all spearmint 

oil producers, handlers, and interested 

persons. Finally, the rule was made 

available through the Internet by USDA 

and the Office of the Federal Register. A 

15-day comment period ending April 6, 

2010, was provided to allow interested 

persons to respond to the proposal. No 

comments were received. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

be viewed at: http://www.ams.usda.gov/ 

AMSv1.0/ams.fetchTemplate

Data.do?template=TemplateN&page= 

MarketingOrdersSmallBusinessGuide. 

Any questions about the compliance 

guide should be sent to Antoinette 

Carter at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

After consideration of all relevant 

matter presented, including the 

information and recommendation 

submitted by the Committee and other 

available information, it is hereby found 

that this rule, as hereinafter set forth, 

will tend to effectuate the declared 

policy of the Act. 

It is further found that good cause 

exists for not postponing the effective 

date of this rule until 30 days after 

publication in the Federal Register 

(5 U.S.C. 553) because the 2010–2011 

marketing year starts on June 1, 2010, 

and handlers will need to begin 

purchasing the spearmint oil allotted 

under this rulemaking. Further, 

handlers are aware of this rule, which 

was recommended at a public meeting. 

Finally, a 60-day comment period was 

provided for in the proposed rule. 

List of Subjects in 7 CFR Part 985 

Marketing agreements, Oils and fats, 

Reporting and recordkeeping 

requirements, Spearmint oil. 

■ For the reasons set forth in the 

preamble, 7 CFR part 985 is amended as 

follows: 

PART 985—MARKETING ORDER 

REGULATING THE HANDLING OF 

SPEARMINT OIL PRODUCED IN THE 

FAR WEST 

■ 1. The authority citation for 7 CFR 

part 985 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. A new § 985.229 is added to read 

as follows: 

Note: This section will not appear in the 

Code of Federal Regulations. 

§ 985.229 Salable quantities and allotment 

percentages—2010–2011 marketing year. 

The salable quantity and allotment 

percentage for each class of spearmint 

oil during the marketing year beginning 

on June 1, 2010, shall be as follows: 


hsrobinson on DSK69SOYB1PROD with RULES
Federal Register / Vol. 75, No. 95 / Tuesday, May 18, 2010 / Rules and Regulations 27637 

(a) Class 1 (Scotch) oil—a salable 

quantity of 566,962 pounds and an 

allotment percentage of 28 percent. 

(b) Class 3 (Native) oil—a salable 

quantity of 980,265 pounds and an 

allotment percentage of 43 percent. 

Dated: May 12, 2010. 

Rayne Pegg, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2010–11862 Filed 5–17–10; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 71 

[Docket No. FAA–2009–0538; Airspace 

Docket No. 09–ASW–15] 

Amendment of Class E Airspace; 

Claremore, OK 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This action amends Class E 

airspace for Claremore, OK, adding 

additional controlled airspace to 

accommodate Area Navigation (RNAV) 

Standard Instrument Approach 

Procedures (SIAPs) at Claremore 

Regional Airport, Claremore, OK. The 

FAA is taking this action to enhance the 

safety and management of Instrument 

Flight Rule (IFR) operations at the 

airport. 

DATES: Effective date 0901 UTC, July 29, 

2010. The Director of the Federal 

Register approves this incorporation by 

reference action under 1 CFR part 51, 

subject to the annual revision of FAA 

Order 7400.9 and publication of 

conforming amendments. 

FOR FURTHER INFORMATION CONTACT: 

Scott Enander, Central Service Center, 

Operations Support Group, Federal 

Aviation Administration, Southwest 

Region, 2601 Meacham Blvd., Fort 

Worth, TX 76137; telephone (817) 321– 

7716. 

SUPPLEMENTARY INFORMATION: 

History 

On February 5, 2010, the FAA 

published in the Federal Register a 

notice of proposed rulemaking to amend 

Class E airspace for Claremore, OK, 

reconfiguring controlled airspace at 

Claremore Regional Airport (75 FR 

5905) Docket No. FAA–2009–0538. 

Interested parties were invited to 

participate in this rulemaking effort by 

submitting written comments on the 

proposal to the FAA. No comments 

were received. Class E airspace 

designations are published in paragraph 

6005 of FAA Order 7400.9T signed 

August 27, 2009, and effective 

September 15, 2009, which is 

incorporated by reference in 14 CFR 

71.1. The Class E airspace designations 

listed in this document will be 

published subsequently in the Order. 

The Rule 

This action amends Title 14 Code of 

Federal Regulations (14 CFR) part 71 by 

amending Class E airspace for the 

Claremore, OK area, adding additional 

controlled airspace extending upward 

from 700 feet above the surface to 

accommodate SIAPs at Claremore 

Regional Airport. Adjustment to the 

geographic coordinates will be made in 

accordance with the FAA’s National 

Aeronautical Charting Office. With the 

exception of this change, this action is 

the same as that published in the 

NPRM. This action is necessary for the 

safety and management of IFR 

operations at the airport. 

The FAA has determined that this 

regulation only involves an established 

body of technical regulations for which 

frequent and routine amendments are 

necessary to keep them operationally 

current. Therefore, this regulation: (1) Is 

not a ‘‘significant regulatory action’’ 

under Executive Order 12866; (2) is not 

a ‘‘significant rule’’ under DOT 

Regulatory Policies and Procedures (44 

FR 11034; February 26, 1979); and (3) 

does not warrant preparation of a 

regulatory evaluation as the anticipated 

impact is so minimal. Since this is a 

routine matter that will only affect air 

traffic procedures and air navigation, it 

is certified that this rule, when 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities under the 

criteria of the Regulatory Flexibility Act. 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the U.S. Code. Subtitle 1, 

section 106, describes the authority of 

the FAA Administrator. Subtitle VII, 

Aviation Programs, describes in more 

detail the scope of the agency’s 

authority. This rulemaking is 

promulgated under the authority 

described in subtitle VII, part A, subpart 

I, section 40103. Under that section, the 

FAA is charged with prescribing 

regulations to assign the use of airspace 

necessary to ensure the safety of aircraft 

and the efficient use of airspace. This 

regulation is within the scope of that 

authority as it amends controlled 

airspace at Claremore Regional Airport, 

Claremore, OK. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

Adoption of the Amendment 

■ In consideration of the foregoing, the 

Federal Aviation Administration 

amends 14 CFR part 71 as follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for 14 CFR 

part 71 continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40103, 40113, 

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 

1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of the Federal Aviation 

Administration Order 7400.9T, Airspace 

Designations and Reporting Points, 

signed August 27, 2009, and effective 

September 15, 2009, is amended as 

follows: 

* * * * * 

Paragraph 6005 Class E airspace areas 

extending upward from 700 feet or more 

above the surface. 

* * * * * 

ASW OK E5 Claremore, OK [Amended] 

Claremore Regional Airport, OK 

(Lat. 36°17′34′′ N., long. 95°28′47′′ W.) 

Claremore Regional Hospital Heliport, OK 

Point In Space Coordinates 

(Lat. 36°18′23′′ N., long. 95°38′26′′ W.) 

That airspace extending upward from 700 

feet above the surface within a 6.4-mile 

radius of Claremore Regional Airport and 

that airspace within a 6-mile radius of the 

Point In Space serving Claremore Regional 

Hospital Heliport. 

Issued in Fort Worth, Texas, on May 7, 

2010. 

Anthony D. Roetzel, 

Manager, Operations Support Group, ATO 

Central Service Center. 

[FR Doc. 2010–11714 Filed 5–17–10; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 71 

[Docket No. FAA–2009–1154; Airspace 

Docket No. 09–AGL–35] 

Amendment of Class E Airspace; 

Marion, IL 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 


hsrobinson on DSK69SOYB1PROD with RULES