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Rules and Regulations Federal Register

26359 

Vol. 79, No. 89 

Thursday, May 8, 2014 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 985 

[Doc. No. AMS–FV–13–0087; FV14–985–1 

FR] 

Marketing Order Regulating the 

Handling of Spearmint Oil Produced in 

the Far West; Salable Quantities and 

Allotment Percentages for the 2014– 

2015 Marketing Year 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This final rule establishes the 

quantity of Far West Scotch and Native 

spearmint oil that handlers may 

purchase from, or handle on behalf of, 

producers during the 2014–2015 

marketing year, which begins on June 1, 

2014. The Far West includes 

Washington, Idaho, Oregon, and 

designated parts of Nevada and Utah. 

This rule establishes salable quantities 

and allotment percentages for Class 1 

(Scotch) spearmint oil of 1,149,030 

pounds and 55 percent, respectively, 

and for Class 3 (Native) spearmint oil of 

1,090,821 pounds and 46 percent, 

respectively. The Spearmint Oil 

Administrative Committee (Committee), 

the entity responsible for local 

administration of the marketing order 

for spearmint oil produced in the Far 

West, recommended these quantities. 

DATES: Effective Date: This final rule 

becomes effective June 1, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Manuel Michel, Marketing Specialist, or 

Gary Olson, Regional Director, 

Northwest Marketing Field Office, 

Marketing Order and Agreement 

Division, Fruit and Vegetable Program, 

AMS, USDA; Telephone: (503) 326– 

2724, Fax: (503) 326–7440, or Email: 

Manuel.Michel@ams.usda.gov or 

GaryD.Olson@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Jeffrey Smutny, 

Marketing Order and Agreement 

Division, Fruit and Vegetable Program, 

AMS, USDA, 1400 Independence 

Avenue SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720– 

2491, Fax: (202) 720–8938, or Email: 

Jeffrey.Smutny@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 Orders 

12866, 13563, and 13175. 

This final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. Under the order now in 

effect, salable quantities and allotment 

percentages may be established for 

classes of spearmint oil produced in the 

Far West. This rule establishes the 

quantity of spearmint oil produced in 

the Far West, by class, that handlers 

may purchase from, or handle on behalf 

of, producers during the 2014–2015 

marketing year, which begins on June 1, 

2014. 

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 adopt a marketing policy for the 

ensuing marketing year or years. In 

determining such marketing policy, the 

Committee considers a number of 

factors, including, but not limited to, the 

current and projected supply, estimated 

future demand, production costs, and 

producer prices for all classes of 

spearmint oil. Input from spearmint oil 

handlers and producers regarding 

prospective marketing conditions for the 

upcoming year is considered as well. 

During the meeting, the Committee 

recommends to USDA any volume 

regulations deemed necessary to meet 

market requirements and to establish 

orderly marketing conditions for Far 

West spearmint oil. If the Committee’s 

marketing policy considerations 

indicate a need for limiting the quantity 

of any or all classes of spearmint oil 

marketed, the Committee subsequently 

recommends the establishment of a 

salable quantity and allotment 

percentage for such class or classes of 

oil for the forthcoming marketing year. 

The salable quantity represents the 

total amount of each class of spearmint 

oil that handlers may purchase from, or 

handle on behalf of, producers during 

the marketing year. The allotment 

percentage is calculated by dividing the 

salable quantity by the total allotment 

base for each applicable class of 

spearmint oil. The allotment percentage 

is used to determine each producer’s 

annual allotment, which is their 

prorated share of the salable quantity. 

Allotment base is each producer’s 

quantified share of the spearmint oil 

market based on a statistical 

representation of past spearmint oil 

production, with accommodation for 

reasonable and normal adjustments to 

such base as prescribed by the 

Committee and approved by USDA. 

Salable quantities are established at 

levels intended to meet market 

requirements and to establish orderly 

marketing conditions. Committee 

recommendations for volume controls 

are made well in advance of the period 

in which the regulations are to be 

effective, thereby allowing producers 

the chance to adjust their production 

decisions accordingly. 

Pursuant to authority in §§ 985.50, 

985.51, and 985.52 of the order, the full 

eight-member Committee met on 

November 6, 2013, and recommended 

salable quantities and allotment 


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percentages for both classes of oil for the 

2014–2015 marketing year. The 

Committee unanimously recommended 

the establishment of a salable quantity 

and allotment percentage for Class 1 

(Scotch) spearmint oil of 1,149,030 

pounds and 55 percent, respectively. 

The Committee, also with a unanimous 

vote, recommended the establishment of 

a salable quantity and allotment 

percentage for Class 3 (Native) 

spearmint oil of 1,090,821 pounds and 

46 percent, respectively. 

This final rule establishes the amount 

of Scotch and Native spearmint oil that 

handlers may purchase from, or handle 

on behalf of, producers during the 

2014–2015 marketing year, which 

begins on June 1, 2014. Salable 

quantities and allotment percentages 

have been placed into effect each season 

since the order’s inception in 1980. 

Class 1 (Scotch) Spearmint Oil 

As noted above, the Committee 

unanimously recommended a salable 

quantity of Scotch spearmint oil of 

1,149,030 pounds and an allotment 

percentage of 55 percent for the 

upcoming 2014–2015 marketing year. 

The Committee utilized 2014–2015 sales 

estimates for Scotch spearmint oil, as 

provided by several of the industry’s 

handlers, as well as historical and 

current Scotch spearmint oil production 

and inventory statistics, to arrive at 

these recommendations. 

Trade demand for Far West Scotch 

spearmint oil is expected to rise from 

981,536 pounds in the 2013–2014 

marketing year to 1,000,000 pounds in 

2014–2015, if not more. Industry reports 

indicate an increasing consumer 

demand for mint-flavored products has 

resulted in increasing demand for Far 

West Scotch spearmint oil. Information 

gathered from spearmint oil handlers 

also supports this conclusion. 

Production of Far West Scotch 

spearmint oil increased from 636,626 

pounds in 2012 to 1,057,377 pounds in 

2013. Committee members attribute the 

increase in production to both the low 

level of reserves and growing demand. 

Given that these factors are expected to 

continue in the coming 2014–2015 year, 

the Committee expects production to 

increase to as much as 1,300,000 

pounds in that marketing year. 

The Committee also estimates that 

there will be zero carry-in of Scotch 

spearmint oil on June 1, 2014, the 

beginning of the 2014–2015 marketing 

year. This figure, which is the primary 

measure of excess supply, down from an 

estimated 16,022 pounds the previous 

year, is below the minimum carry-in 

quantity that the Committee considers 

favorable. The demand during the 2012– 

2013 marketing year equaled total 

supply, resulting in the zero carry-in. 

The 2014–2015 salable quantity of 

1,149,030 pounds recommended by the 

Committee represents an increase of 

75,631 pounds over the total supply 

available during the previous marketing 

year. Total supply for 2013–2014 

amounted to 1,073,399 pounds 

(1,057,377 pounds produced plus 

16,022 pounds held in reserve). 

The Committee estimates 2014–2015 

demand for Scotch spearmint oil at 

1,000,000 pounds. When considered in 

conjunction with the forecast that there 

will be zero available carry-in of Scotch 

spearmint oil on June 1, 2014, the 

recommended salable quantity of 

1,149,030 pounds would satisfy market 

demand and yield a carry-in of 149,030 

pounds for the 2015–2016 marketing 

year. 

The Committee’s stated intent in the 

use of marketing order volume control 

regulations for Scotch spearmint oil is to 

keep adequate supplies available to 

meet market needs and establish orderly 

marketing conditions. While the salable 

quantity recommended for the 

upcoming marketing year is less than 

the salable quantity set for the previous 

year (2013–2014 at 1,344,500 pounds), 

the Committee felt that the 

recommended limit would adequately 

meet demand, as well as result in carryin for the following year. With that in 

mind, the Committee developed its 

recommendation of the Scotch 

spearmint oil salable quantity and 

allotment percentage for the 2014–2015 

marketing year based on the information 

discussed above, as well as the data 

outlined below. 

(A) Estimated carry-in of Scotch 

spearmint oil on June 1, 2014—0 

pounds. This figure is the difference 

between the revised 2013–2014 

marketing year total available supply of 

1,073,399 pounds and the estimated 

2013–2014 marketing year trade 

demand of 1,073,399 pounds. 

(B) Estimated trade demand of Scotch 

spearmint oil for the 2014–2015 

marketing year—1,000,000 pounds. This 

figure is based on input from producers 

at five Scotch spearmint oil production 

area meetings held in late September 

and early October 2013, as well as 

estimates provided by handlers and 

other meeting participants at the 

November 6, 2013, meeting. The average 

estimated trade demand provided at the 

five production area meetings was 

1,033,000 pounds, which is 25,750 

pounds less than the average of trade 

demand estimates submitted by 

handlers. However, Far West Scotch 

spearmint oil sales have averaged 

819,824 pounds per year over the last 

five years. Given this information, the 

Committee decided it was prudent to 

anticipate the trade demand at 

1,000,000 pounds. Should the initially 

established volume control levels prove 

insufficient to adequately supply the 

market, the Committee has the authority 

to recommend intra-seasonal increases 

as needed. 

(C) Salable quantity of Scotch 

spearmint oil required from the 2014– 

2015 marketing year production— 

1,000,000 pounds. This figure is the 

difference between the estimated 2014– 

2015 marketing year trade demand 

(1,000,000 pounds) and the estimated 

carry-in on June 1, 2014 (0 pounds). 

This figure represents the minimum 

salable quantity that may be needed to 

satisfy estimated demand for the coming 

year with no carryover. 

(D) Total estimated allotment base of 

Scotch spearmint oil for the 2014–2015 

marketing year—2,089,146 pounds. This 

figure represents a one-percent increase 

over the revised 2013–2014 total 

allotment base. This figure is generally 

revised each year on June 1 due to 

producer base being lost as a result of 

the bona fide effort production 

provisions of § 985.53(e). The revision is 

usually minimal. 

(E) Computed Scotch spearmint oil 

2014–2015 marketing year allotment 

percentage—47.9 percent. This 

percentage is computed by dividing the 

minimum required salable quantity 

(1,000,000 pounds) by the total 

estimated allotment base (2,089,146 

pounds). 

(F) Recommended Scotch spearmint 

oil 2014–2015 marketing year allotment 

percentage—55 percent. This is the 

Committee’s recommendation and is 

based on the computed allotment 

percentage (47.9 percent), the average of 

the computed allotment percentage 

figures from the five production area 

meetings (46.2 percent), and input from 

producers and handlers at the 

November 6, 2013, meeting. The 

recommended allotment percentage of 

55 percent is also based on the 

Committee’s determination that the 

computed percentage (47.9 percent) may 

not adequately supply the potential 

2014–2015 Scotch spearmint oil market. 

(G) Recommended Scotch spearmint 

oil 2014–2015 marketing year salable 

quantity—1,149,030 pounds. This figure 

is the product of the recommended 

allotment percentage (55 percent) and 

the total estimated allotment base 

(2,089,146 pounds). 

(H) Estimated total available supply 

of Scotch spearmint oil for the 2014– 

2015 marketing year—1,149,030 

pounds. This figure is the sum of the 

2014–2015 recommended salable 


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quantity (1,149,030 pounds) and the 

estimated carry-in on June 1, 2014 (0 

pounds). 

Class 3 (Native) Spearmint Oil 

At the November 6, 2013, meeting, the 

Committee also recommended a 2014– 

2015 Native spearmint oil salable 

quantity of 1,090,821 pounds and an 

allotment percentage of 46 percent. The 

Committee utilized Native spearmint oil 

sales estimates for 2014–2015 marketing 

year, as provided by several of the 

industry’s handlers, as well as historical 

and current Native spearmint oil market 

statistics to establish these thresholds. 

These volume control levels represent a 

decrease of 341,380 pounds and 15 

percentage points over the previous 

year’s initial salable quantity and 

allotment percentage. Should these 

levels prove insufficient to adequately 

supply the market, the Committee has 

the authority to recommend an intraseasonal increase, as it has done in the 

past two marketing periods, if demand 

rises beyond expectations. 

The Committee also estimates that 

there will be 461,260 pounds reserve of 

Native spearmint oil on June 1, 2014. 

This figure, which is the oil held in 

reserve by producers, is down from an 

industry peak of 606,942 pounds in 

2011. Reserve levels of Native spearmint 

oil are nearing the level that the 

Committee believes is optimal for the 

industry. 

Committee statistics indicate that 

demand for Far West Native spearmint 

oil has been gradually increasing since 

2009. Spearmint oil handlers, who 

previously projected the 2013–2014 

trade demand for Far West Native 

spearmint oil to be in the range of 

1,100,000 pounds to 1,400,000 pounds 

(with an average of 1,300,000 pounds), 

have projected trade demand for the 

2014–2015 marketing period to be in the 

range of 1,290,000 pounds to 1,400,000 

pounds (with an average of 1,347,500). 

Given the above, the Committee 

estimates that approximately 1,300,000 

pounds of Native spearmint oil may be 

sold during the 2014–2015 marketing 

year. When considered in conjunction 

with the estimated carry-in of 307,297 

pounds of Native spearmint oil on June 

1, 2014, the recommended salable 

quantity of 1,090,821 pounds results in 

an estimated total available supply of 

1,398,118 pounds of Native spearmint 

oil during the 2014–2015 marketing 

year. The Committee also estimates that 

carry-in of Native spearmint oil at the 

beginning of the 2015–2016 marketing 

year will be approximately 98,118 

pounds. Carry-in spearmint oil is 

distinct from reserve pool spearmint oil 

and represents the amount of salable 

spearmint oil produced, but not 

marketed, in previous years and is 

available for sale in the current year. It 

is the primary measure of excess 

spearmint oil supply under the order. 

Reserve pool oil represents the amount 

of excess oil held by the Committee, on 

behalf of the producers, that is not 

currently available to the market. 

The Committee’s stated intent in the 

use of marketing order volume control 

regulations for Native spearmint oil is to 

keep adequate supplies available to 

meet market needs and establish orderly 

marketing conditions. With that in 

mind, the Committee developed its 

recommendation of the Native 

spearmint oil salable quantity and 

allotment percentage for the 2014–2015 

marketing year based on the information 

discussed above, as well as the data 

outlined below. 

(A) Estimated carry-in of Native 

spearmint oil on June 1, 2014—307,297 

pounds. This figure is the difference 

between the revised 2013–2014 

marketing year total available supply of 

1,577,297 pounds and the estimated 

2013–2014 marketing year trade 

demand of 1,270,000 pounds. 

(B) Estimated trade demand of Native 

spearmint oil for the 2014–2015 

marketing year—1,300,000 pounds. This 

estimate is established by the 

Committee and is based on input from 

producers at six Native spearmint oil 

production area meetings held in late 

September and early October 2013, as 

well as estimates provided by handlers 

and other meeting participants at the 

November 6, 2013, meeting. The average 

estimated trade demand provided at the 

six production area meetings was 

1,271,281 pounds, whereas the 

handlers’ estimates ranged from 

1,290,000 pounds to 1,400,000 pounds, 

and averaged 1,347,500 pounds. The 

average of Far West Native spearmint oil 

sales over the last five years is 1,190,928 

pounds. Should the initially established 

volume control levels prove insufficient 

to adequately supply the market, the 

Committee has the authority to 

recommend intra-seasonal increases as 

needed. 

(C) Salable quantity of Native 

spearmint oil required from the 2014– 

2015 marketing year production— 

992,703 pounds. This figure is the 

difference between the estimated 2014– 

2015 marketing year trade demand 

(1,300,000 pounds) and the estimated 

carry-in on June 1, 2014 (307,297 

pounds). This is the minimum amount 

that the Committee believes is required 

to meet the anticipated 2014–2015 

Native spearmint oil trade demand. 

(D) Total estimated allotment base of 

Native spearmint oil for the 2014–2015 

marketing year—2,371,350 pounds. This 

figure represents a one-percent increase 

over the revised 2013–2014 total 

allotment base. This figure is generally 

revised each year on June 1 due to 

producer base being lost as a result of 

the bona fide effort production 

provisions of § 985.53(e). The revision is 

usually minimal. 

(E) Computed Native spearmint oil 

2014–2015 marketing year allotment 

percentage—41.9 percent. This 

percentage is computed by dividing the 

required salable quantity (992,703 

pounds) by the total estimated allotment 

base (2,371,350 pounds). 

(F) Recommended Native spearmint 

oil 2014–2015 marketing year allotment 

percentage—46 percent. This is the 

Committee’s recommendation based on 

the computed allotment percentage 

(41.9 percent), the average of the 

computed allotment percentage figures 

from the six production area meetings 

(39.9 percent), and input from 

producers and handlers at the 

November 6, 2013, meeting. The 

recommended allotment percentage of 

46 percent is also based on the 

Committee’s determination that the 

computed percentage (41.9 percent) may 

not adequately supply the potential 

2014–2015 Native spearmint oil market. 

(G) Recommended Native spearmint 

oil 2014–2015 marketing year salable 

quantity—1,090,821 pounds. This figure 

is the product of the recommended 

allotment percentage (46 percent) and 

the total estimated allotment base 

(2,371,350 pounds). 

(H) Estimated available supply of 

Native spearmint oil for the 2014–2015 

marketing year—1,398,118 pounds. This 

figure is the sum of the 2014–2015 

recommended salable quantity 

(1,090,821 pounds) and the estimated 

carry-in on June 1, 2014 (307,297 

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 Scotch and Native spearmint oil 

salable quantities and allotment 

percentages of 1,149,030 pounds and 55 

percent, and 1,090,821 pounds and 46 

percent, respectively, are based on the 

goal of establishing and maintaining 

market stability. The Committee 

anticipates that this goal will be 

achieved by matching the available 

supply of each class of Spearmint oil to 

the estimated demand of such, thus 


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avoiding extreme fluctuations in 

inventories 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 which may 

develop during the marketing year 

could be satisfied by an intra-seasonal 

increase in the salable quantity. The 

order contains a provision for intraseasonal increases to allow the 

Committee the flexibility to respond 

quickly to changing market conditions. 

Under volume regulation, producers 

who produce more than their annual 

allotments during the 2014–2015 

marketing year may transfer such excess 

spearmint oil to producers who have 

produced less than their annual 

allotment. In addition, up until 

November 1, 2014, producers may place 

excess spearmint oil production into the 

reserve pool to be released in the future 

in accordance with market needs. 

This regulation is similar to 

regulations issued in prior seasons. The 

average initial allotment percentage for 

the five most recent marketing years for 

Scotch spearmint oil is 41.4 percent, 

while the average initial allotment 

percentage for the same five-year period 

for Native spearmint oil is 50.2 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 2014–2015 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 

2014–2015 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 USDA’s 

‘‘Guidelines for Fruit, Vegetable, and 

Specialty Crop Marketing Orders’’ has 

also been reviewed and confirmed. 

The salable quantities and allotment 

percentages established by this final 

rule allow the anticipated market needs 

to be fulfilled. In determining 

anticipated market needs, the 

Committee considered 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 2014–2015 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 

businesses subject to such actions in 

order that small businesses will not be 

unduly or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and the 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 39 producers of 

Scotch spearmint oil and approximately 

91 producers of Native spearmint oil in 

the regulated production area. Small 

agricultural service firms are defined by 

the Small Business Administration 

(SBA) 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 (13 CFR 121.201). 

Based on the SBA’s definition of 

small entities, the Committee estimates 

that two of the eight 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 

22 of the 39 Scotch spearmint oil 

producers, and 29 of the 91 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 purposes of weed, 

insect, and disease control. To remain 

economically viable with the added 

costs associated with spearmint oil 

production, a majority of spearmint oilproducing 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 

income from 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 small producers 

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. 

This final rule establishes the quantity 

of spearmint oil produced in the Far 

West, by class, that handlers may 

purchase from, or handle on behalf of, 

producers during the 2014–2015 

marketing year. The Committee 

recommended this action 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 that may 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 


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in yield and acreage planted from 

season-to-season tend to be larger than 

fluctuations in the amount purchased by 

handlers. Notwithstanding the recent 

global recession and the overall negative 

impact on demand for consumer goods 

that utilize spearmint oil, demand for 

spearmint oil tends to change slowly 

from year to year. 

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 

spearmint 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 virtually no impact on retail 

prices for those goods. 

Spearmint oil production tends to be 

cyclical. Years of relatively high 

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 of the 

spearmint oil market is illustrated by 

the fact that the coefficient of variation 

(a standard measure of variability; 

‘‘CV’’) of Far West spearmint oil grower 

prices for the period 1980–2012 (when 

the marketing order was in effect) is 

0.19, compared to 0.34 for the decade 

prior to the promulgation of the order 

(1970–79) and 0.48 for the prior 20-year 

period (1960–79). This provides an 

indication of the price stabilizing 

impact of the marketing order. 

Production in the shortest marketing 

year was about 47 percent of the 34-year 

average (1.92 million pounds from 1980 

through 2013) and the largest crop was 

approximately 160 percent of the 34- 

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 order, can create 

liquidity problems for some producers. 

The 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 of each 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 increase the salable quantity and 

allotment percentage for a class of oil 

and make a portion of the pool 

available. However, limited quantities of 

reserve oil are typically sold by one 

producer to another producer 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 these provisions 

need to be exercised prior to November 

1 of each year. 

In any given year, the total available 

supply of spearmint oil is composed of 

current production plus carryover 

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 salable 

spearmint oil to carry over into the 

subsequent marketing year. 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, which are increased in large 

production years, are drawn down in 

years where the crop is short. 

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. This could 

result 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 trade 

demand for the 2014–2015 marketing 

year for both classes of oil at 2,300,000 

pounds and that the expected combined 

salable carry-in on June 1, 2014, will be 

307,297 pounds. This results in a 

combined required salable quantity of 

1,992,703 pounds. With volume control, 

sales by producers for the 2014–2015 

marketing year would be limited to 

2,239,851 pounds (the salable quantity 

for both classes of spearmint oil). 

The allotment percentages, upon 

which 2014–2015 producer allotments 

are based, are 55 percent for Scotch and 

46 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 decline of about $1.90 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 surplus 

situation for the spearmint oil market 

that would exist without volume 

controls in 2014–2015 also would likely 

dampen prospects for improved 

producer prices in future years because 

of the buildup in stocks. 

The use of volume control allows the 

industry to fully supply spearmint oil 

markets while avoiding the negative 

consequences of over-supplying these 

markets. The use of volume control 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. 


wreier-aviles on DSK5TPTVN1PROD with RULES
26364 Federal Register / Vol. 79, No. 89 / Thursday, May 8, 2014 / Rules and Regulations 

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 

may occur without volume control. 

After computing the initial 47.9 

percent Scotch spearmint oil allotment 

percentage, the Committee considered 

various alternative levels of volume 

control for Scotch spearmint oil. Even 

with the moderately optimistic 

marketing conditions, there was 

consensus from the Committee that the 

Scotch spearmint oil allotment 

percentage for 2014–2015 should be less 

than the percentage established for the 

2013–2014 marketing year (65 percent). 

After considerable discussion, the eightmember committee unanimously 

determined that 1,149,030 pounds and 

55 percent would be the most effective 

Scotch spearmint oil salable quantity 

and allotment percentage, respectively, 

for the 2014–2015 marketing year. 

The Committee was also able to reach 

a consensus regarding the level of 

volume control for Native spearmint oil. 

After first determining the computed 

allotment percentage at 41.9 percent, the 

Committee unanimously recommended 

1,090,821 pounds and 46 percent for the 

effective Native spearmint oil salable 

quantity and allotment percentage, 

respectively, for the 2014–2015 

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 

determined that the salable quantity and 

allotment percentage levels 

recommended will achieve the 

objectives sought. 

Without any regulations in effect, the 

Committee believes the industry could 

return to the pronounced cyclical price 

patterns that occurred prior to the order 

and that prices in 2014–2015 could 

decline substantially below current 

levels. 

According to the Committee, the 

recommended salable quantities and 

allotment percentages are expected to 

facilitate the goal of establishing orderly 

marketing conditions for Far West 

spearmint oil. 

As previously stated, annual salable 

quantities and allotment percentages 

have been issued for both classes of 

spearmint oil since the order’s 

inception. 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), the order’s information 

collection requirements have been 

previously approved by the Office of 

Management and Budget (OMB) and 

assigned OMB No. 0581–0178, 

Vegetable and Specialty Crops. No 

changes in those requirements as a 

result of this action are necessary. 

Should any changes become necessary, 

they would be submitted to OMB for 

approval. 

This final rule establishes the salable 

quantities and allotment percentages for 

Class 1 (Scotch) spearmint oil and Class 

3 (Native) spearmint oil produced in the 

Far West during the 2014–2015 

marketing year. Accordingly, this final 

rule will 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. 

As noted in the initial regulatory 

flexibility analysis, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap or conflict with 

this final 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 November 6, 

2013, 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 14, 2014 (79 FR 

14441). A copy of the rule was provided 

to Committee staff, who in turn made it 

available to all Far West 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 March 

31, 2014, 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/ 

MarketingOrdersSmallBusinessGuide. 

Any questions about the compliance 

guide should be sent to Jeffrey Smutny 

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 2014–2015 

marketing year starts on June 1, 2014, 

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 15-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 § 985.233 is added to read 

as follows: 

Note: This section will not appear in the 

Code of Federal Regulations. 

§ 985.233 Salable quantities and allotment 

percentages—2014–2015 marketing year. 

The salable quantity and allotment 

percentage for each class of spearmint 


wreier-aviles on DSK5TPTVN1PROD with RULES
Federal Register / Vol. 79, No. 89 / Thursday, May 8, 2014 / Rules and Regulations 26365 

oil during the marketing year beginning 

on June 1, 2014, shall be as follows: 

(a) Class 1 (Scotch) oil—a salable 

quantity of 1,149,030 pounds and an 

allotment percentage of 55 percent. 

(b) Class 3 (Native) oil—a salable 

quantity of 1,090,821 pounds and an 

allotment percentage of 46 percent. 

Dated: May 1, 2014. 

Rex A. Barnes, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2014–10371 Filed 5–7–14; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 71 

[Docket No. FAA–2013–0954; Airspace 

Docket No. 13–AGL–35] 

Amendment of Class D Airspace; St. 

Paul, MN 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule, correction. 

SUMMARY: This action amends a 

typographical error in the geographic 

coordinates of South St. Paul Municipal 

Airport-Richard E. Fleming Field in a 

final rule technical amendment 

published in the Federal Register of 

March 4, 2014, that amends Class D 

airspace in the St. Paul, MN, area. 

DATES: Effective date: 0901 UTC, May 

29, 2014. 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 March 4, 2014, a final rule 

technical amendment was published in 

the Federal Register amending Class D 

airspace in St. Paul, MN (79 FR 12050, 

Docket No. FAA–2013–0954). 

Subsequent to publication, the FAA 

found a typographical error in the 

geographic coordinates for South St. 

Paul Municipal Airport-Richard E. 

Fleming Field. This action corrects that 

error. 

Final Rule Correction 

Accordingly, pursuant to the 

authority delegated to me, in the 

Federal Register of March 4, 2014 (79 

FR 12050) FR Doc. 2014–04447, the 

geographic coordinates in the regulatory 

text on page 12051, column 2, line 9, is 

corrected as follows: 

§ 71.1 [Amended] 

AGL MN D St. Paul, MN [Corrected] 

Remove (Lat. 44°51′′2605′ N.,) and add in 

its place (Lat. 44°51′26′′ N., 93°01′58′′ W.) 

Issued in Fort Worth, Texas, on April 11, 

2014. 

Kent M. Wheeler, 

Manager, Operations Support Group, ATO 

Central Service Center. 

[FR Doc. 2014–09881 Filed 5–7–14; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE TREASURY 

Office of Foreign Assets Control 

31 CFR Part 589 

Ukraine-Related Sanctions Regulations 

AGENCY: Office of Foreign Assets 

Control, Treasury. 

ACTION: Final rule. 

SUMMARY: The Department of the 

Treasury’s Office of Foreign Assets 

Control (‘‘OFAC’’) is issuing regulations 

to implement Executive Order 13660 of 

March 6, 2014 (‘‘Blocking Property of 

Certain Persons Contributing to the 

Situation in Ukraine’’), Executive Order 

13661 of March 17, 2014 (‘‘Blocking 

Property of Additional Persons 

Contributing to the Situation in 

Ukraine’’), and Executive Order 13662 

of March 20, 2014 (‘‘Blocking Property 

of Additional Persons Contributing to 

the Situation in Ukraine’’). OFAC 

intends to supplement this part 589 

with a more comprehensive set of 

regulations, which may include 

additional interpretive and definitional 

guidance and additional general 

licenses and statements of licensing 

policy. 

DATES: Effective: May 8, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Assistant Director for Licensing, tel.: 

202/622–2480, Assistant Director for 

Policy, tel.: 202/622–6746, Assistant 

Director for Regulatory Affairs, tel.: 202/ 

622–4855, Assistant Director for 

Sanctions Compliance & Evaluation, 

tel.: 202/622–2490, OFAC, or Chief 

Counsel (Foreign Assets Control), tel.: 

202/622–2410, Office of the General 

Counsel, Department of the Treasury 

(not toll free numbers). 

SUPPLEMENTARY INFORMATION: 

Electronic and Facsimile Availability 

This document and additional 

information concerning OFAC are 

available from OFAC’s Web site 

(www.treasury.gov/ofac). Certain general 

information pertaining to OFAC’s 

sanctions programs also is available via 

facsimile through a 24-hour fax-ondemand service, tel.: 202/622–0077. 

Background 

On March 6, 2014, the President 

issued Executive Order 13660 (79 FR 

13493, March 10, 2014) (‘‘E.O. 13660’’), 

invoking the authority of, inter alia, the 

International Emergency Economic 

Powers Act (50 U.S.C. 1701 et seq.) 

(‘‘IEEPA’’) and the National 

Emergencies Act (50 U.S.C. 1601 et seq.) 

(‘‘NEA’’). On March 17, 2014, the 

President issued Executive Order 13661 

(79 FR 15535, March 16, 2014) (‘‘E.O. 

13661’’), invoking the authority of, inter 

alia, IEEPA and the NEA, to expand the 

scope of the national emergency 

declared in E.O. 13660 of March 6, 

2014. On March 20, 2014, the President 

issued Executive Order 13662 (79 FR 

16169, March 24, 2014) (‘‘E.O. 13662’’), 

invoking the authority of, inter alia, 

IEEPA and the NEA, to expand the 

scope of the national emergency 

declared in E.O. 13660 and expanded in 

scope in E.O. 13661. 

The Department of the Treasury’s 

Office of Foreign Assets Control 

(‘‘OFAC’’) is issuing the Ukraine-Related 

Sanctions Regulations, 31 CFR part 589 

(the ‘‘Regulations’’), to implement E.O. 

13660, E.O. 13661, and E.O. 13662, 

pursuant to authorities delegated to the 

Secretary of the Treasury in those 

orders. A copy of E.O. 13660 appears in 

Appendix A, a copy of E.O. 13661 

appears in Appendix B, and a copy of 

E.O. 13662 appears in Appendix C to 

this part. 

The Regulations are being published 

in abbreviated form at this time for the 

purpose of providing immediate 

guidance to the public. OFAC intends to 

supplement this part 589 with a more 

comprehensive set of regulations, which 

may include additional interpretive and 

definitional guidance and additional 

general licenses and statements of 

licensing policy. The appendixes to the 

Regulations will be removed when 

OFAC supplements this part with a 

more comprehensive set of regulations. 

Public Participation 

Because the Regulations involve a 

foreign affairs function, the provisions 

of Executive Order 12866 of September 

30, 1993, and the Administrative 

Procedure Act (5 U.S.C. 553) requiring 


wreier-aviles on DSK5TPTVN1PROD with RULES