[Federal Register Volume 65, Number 232 (Friday, December 1, 2000)]
[Rules and Regulations]
[Pages 75464-75542]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29987]



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Part V





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Part 59



Livestock and Grain Market News Branch: Livestock Mandatory Reporting; 
Final Rule

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / 
Rules and Regulations

[[Page 75464]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 59

[No. LS-99-18]
RIN 0581-AB64


Livestock and Grain Market News Branch: Livestock Mandatory 
Reporting

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule will establish a mandatory program of 
reporting information regarding the marketing of cattle, swine, lambs, 
and products of such livestock under the ``Livestock Mandatory 
Reporting Act of 1999.'' This rule requires the reporting of market 
information by certain livestock packers, and livestock product 
processors and importers. This program is intended to provide 
information on pricing, contracting for purchase, and supply and demand 
conditions for livestock, livestock production, and livestock products, 
that can be readily understood by producers, packers, and other market 
participants.

EFFECTIVE DATE: This final rule is effective January 30, 2001.

FOR FURTHER INFORMATION CONTACT: If you have questions about the 
regulations, please call John E. Van Dyke, Chief, Livestock and Grain 
Market News Branch at (202) 720-6231, fax (202) 690-3732, or e-mail us 
at <a href="/cdn-cgi/l/email-protection#157f7a7d7b3b63747b716c7e7055606671743b727a63"><span class="__cf_email__" data-cfemail="117b7e797f3f67707f75687a7451646275703f767e67">[email protected]</span></a>.
    Information about these new regulations will be posted on the AMS 
web site: http://www.ams.usda.gov/lsg/price.htm as it becomes 
available.

SUPPLEMENTARY INFORMATION: The information that follows has been 
divided into three sections. The first one provides background 
information including questions and answers about this final rule, a 
short narrative introducing the Agency, and a summary of the history of 
this rulemaking process including an overview of the Livestock 
Mandatory Reporting Act of 1999 (Act) (Pub. L. 106-78; 113 Stat. 1188; 
7 U.S.C. 1635-1636h) and of these final regulations. The second section 
provides a summary of the comments received in response to the proposed 
rule published in the Federal Register on March 17, 2000, and the 
Agency's responses to these comments including changes made in this 
final rule as a result of the comments. The last section provides the 
impact analysis section that addresses various legal requirements 
including the Regulatory Flexibility Act, the Paperwork Reduction Act, 
Civil Rights Review, and the relevant Executive Orders.

I. Background

Questions and Answers About This Final Rule

What Is USDA Market News?
    USDA market news is a Federal program that collects and 
disseminates information on prices and quantities for commercial 
transactions involving a wide array of agricultural products. USDA 
market news provides all market participants with the information 
necessary to make intelligent and informed marketing decisions.
Who Uses USDA Market News?
    Each day, the agricultural industry uses USDA market news reports 
in conducting their business. Further, a wide range of users outside of 
and peripheral to the agricultural industry depend on the information 
provided in these reports, including Federal and State governmental 
agencies, foreign governmental agencies, academia, analysts, and news 
media. Currently, there are a total of 800 individual reports that are 
released by market news. These reports are issued on a daily, weekly, 
monthly, and annual basis.
Why Is This Final Rule Being Published?
    Currently, meat packers, processors and importers are not required 
to report prices or the terms of sale for the animals they buy from 
producers. Rather, under the current market news program, USDA collects 
information on daily sales and price information from packers and 
others on a voluntary basis. However, in recent years more animals are 
being bought and sold under marketing arrangements where neither the 
arrangements nor the final purchase prices are publicly disclosed. 
Likewise, much of the information regarding the imports of lamb cuts is 
not being captured by the current market news reporting program. 
Because of this void in information available to producers, Congress 
passed the Livestock Mandatory Reporting Act of 1999 (Act) that 
requires development of this mandatory reporting program for livestock 
and certain products of livestock.
Why Is Livestock Mandatory Reporting Needed?
    USDA estimates that under the current market news reporting 
program, 35-40 percent of cattle transactions, 75 percent of hog 
transactions and 40 percent of lamb transactions are not being 
reported. With fewer publicly reported marketing arrangements, it has 
become more difficult for producers to determine the actual prevailing 
purchase prices of livestock. By making the reporting of market 
information mandatory, USDA will facilitate price discovery, make the 
market more open and provide all market participants with market 
information that can be easily understood.
Do I Have an Opportunity To Comment on This Document?
    No. This is the final rule. The public was able to submit comments 
on the proposed rule in both written and electronic form for 30 days 
after it was published in the Federal Register on March 17, 2000. USDA 
has reviewed the comments received and has made any necessary revisions 
to the rule. A discussion of public comments, including AMS's 
responses, is included in this final rule.
What Segments of the Livestock and Meat Industry Are Required To Report 
Under This Final Rule?
    This final rule requires the reporting of market information by 
certain livestock packers, and livestock product processors and 
importers who annually slaughter an average of 125,000 cattle or 
100,000 swine, or slaughter or process an average of 75,000 lambs. 
Importers who annually import an average of 5,000 metric tons of lamb 
meat are also required to report.
What Market Information Does This Rule Require Packers and Importers To 
Report?
    Packers subject to this final rule are required to report the 
details of all transactions involving purchases of livestock (cattle, 
swine, and lambs), and the details of all transactions involving 
domestic and export sales of boxed beef cuts including applicable 
branded product, sales of boxed lamb cuts, including applicable branded 
product, and sales of lamb carcasses to the Agricultural Marketing 
Service (AMS). Importers are required to report information concerning 
the sales of imported boxed lamb cuts.
How Often Will Packers and Importers Be Required To Report Information?
    These regulations specify that purchases of swine are to be 
reported three times each day, purchases of cattle reported twice each 
day, purchases of lambs reported once daily, domestic and export sales 
of boxed beef cuts, including applicable branded boxed

[[Page 75465]]

beef cuts, reported twice each day, sales of lamb carcasses and boxed 
lamb cuts, including applicable branded boxed lamb cuts, reported once 
daily, and sales of imported lamb cuts once weekly.
Will AMS Publish Regional and Statewide Reports?
    Initially, the mandatory information of national importance will be 
provided in market news reports. AMS will start with the issuance of 
reports of national importance to ensure that confidentiality is 
preserved regarding the identity of persons, including parties to a 
contract, and proprietary business information. In time, when and where 
possible, these reports may be further refined and subdivided to 
reflect regional and, possibly, statewide markets.
Will Guidance Be Provided To Assist Users in the Use of These New 
Mandatory Reports?
    The new mandatory reports are intended to accurately convey the 
information in the most understandable manner to producers and other 
market participants. An educational and outreach effort will be 
undertaken by AMS to facilitate the transition from voluntary market 
news reporting to mandatory market news reporting.
What New Information Will This Reporting Provide to the Livestock and 
Meat Industry?
    In many instances, mandatory reporting will provide new information 
that has not been previously reported under the existing voluntary 
reporting program. USDA anticipates that this information will provide 
the basis for newly published market news reports, including reports 
covering the prior day swine market; forward contract and formula 
marketing arrangement cattle purchases; packer-owned cattle and sheep 
information; sales of imported boxed lamb cuts; and live lamb premiums 
and discounts.
What Information Would Mandatory Reporting Cover That Is Already Being 
Reported Under the Voluntary Program?
    This would include negotiated, or cash, livestock purchases, sales 
of boxed beef and lamb cuts, and sales of lamb carcasses.
Will the Mandatory Livestock Reports Duplicate Information in the 
Voluntary Reports?
    USDA anticipates that where duplication occurs, the market reports 
reflecting this information will continue to be published but the basis 
of the market reports will become mandatory information.
What Information Currently Being Reported for Livestock and Meat Will 
Not Be Affected by Mandatory Reporting?
    Many voluntary-based market news reports will not be affected by 
mandatory reporting, including reports covering livestock auction sales 
and packer sales of pork cuts and by-products, feeder cattle sales, 
feeder pig sales, and grain trading.
How Will This Program Affect Those States That Have Mandatory Market 
News Laws?
    Several States have enacted legislation mandating, to various 
degrees, the reporting of market information on transactions of cattle, 
swine, and lambs conducted within a particular State. Currently, this 
includes the States of Iowa, Minnesota, Missouri, Nebraska, and South 
Dakota. Of these, only Minnesota and South Dakota are collecting 
mandated market information.
    When USDA's Livestock Mandatory Reporting Program becomes 
effective, States are preempted from imposing mandatory reporting 
requirements that are in addition to or inconsistent with any 
requirement of the Act with respect to the submission, reporting or 
publication of information on the prices and quantities of livestock 
and livestock products. This preemption clause would affect all 
mandatory reporting programs currently in effect by the States and the 
implementation of any mandatory reporting programs currently developed, 
in the process of being developed, or that may be developed at a later 
date.
How Will the Security of the Information Collected Be Ensured?
    The program developed to collect and manage data received from 
those entities required to report will ensure security of data 
transmission and storage, and confidentiality of information that is 
maintained by USDA. During program development, USDA will include 
industry participants, as well as technical experts, in discussions 
regarding issues surrounding data security and confidentiality.
Does This Final Rule Implement All of the Requirements of the Livestock 
Mandatory Reporting Act of 1999?
    No. There are other sections of the Act that are not provided for 
in this final rule. Other sections of the Act pertaining to such areas 
as retail price reporting of beef, pork, lamb, chicken, turkey and veal 
and export certificates will be announced in separate USDA initiatives.
What Penalties Are Included for Violations of the Act?
    The Act specifies what constitutes violations, such as failure to 
report the required information on time or failure to report accurate 
information. The section on enforcement establishes a civil penalty--
$10,000--for each violation and provides for the Secretary's issuance 
of cease and desist orders. This section also provides for notice and 
hearing of violations before the Secretary, judicial review, issuance 
of an injunction or restraining order, and establishes a civil penalty 
for failure to obey a cease and desist order.
What Changes Have Been Made From the Proposed Rule?
    Based on comments submitted and upon further review by AMS, the 
following changes and clarifications have been made in the final rule 
from the proposal.
    Codification in the Code of Federal Regulations. This rule will 
establish and add a new Part 59 to Title 7 of the Code of Federal 
Regulations (CFR). Although the proposed rule referenced the 
establishment and addition of a new Part 57, upon further inspection by 
the Agency, it was determined that Part 59 of 7 CFR would be the 
appropriate codification of the final regulations.
    Boxed Beef and Lamb and Lamb Carcasses. When reporting sales of 
boxed beef and lamb cuts and lamb carcasses, packers will not be 
required to report sales of product not sold at a carlot-based price 
(distributive trade), frozen boxed beef cuts (excluding beef trimmings, 
boneless processing beef, and cow product), distressed product, cuts in 
portion cut form (e.g. chops, steaks, etc.), and branded boxed beef and 
lamb cuts where the brand is based upon unique characteristics such as 
cutting style or packaging.
    For sales of boxed beef cuts, the reporting requirements for ``cut 
date'', `buyer', and `destination' have been eliminated.
    For sales of lamb carcasses and lamb cuts, the requirements for 
`cut date', `buyer', and `destination' have been eliminated. For sales 
of boxed lamb cuts, packers will now be required to report product 
`state of refrigeration'.
    Imported Lamb Carcasses and Cuts. Importers are not required to 
report market information on purchases of imported lamb carcasses and 
imported boxed lamb cuts or of purchases and sales of imported boxed 
lamb cuts in portion cut form (e.g. chops, steaks,

[[Page 75466]]

etc.). For the weekly boxed lamb sales reports, importers will not be 
required to report product `nation of origin', but will now be required 
to report product `state of refrigeration'.
    Live Cattle and Lambs. Packers will not be required to report 
purchases from auction markets made either by a salaried employee of 
the packer or a person that buys on commission for a packer.
    For cattle purchases, the requirement for reporting `slaughter 
date' has been deleted.
    The twice-daily requirement for the reporting of all purchases of 
live lambs in the proposed rule has been reduced to once daily 
reporting at 2:00 p.m. Central Time. The regulations were clarified to 
require that packers are required to report `class of lamb' and `pelt 
type' for live lamb purchases. Additionally, the weekly reporting of 
lambs that were slaughtered will no longer require packers to report 
`shrink factor' and the reporting time for this report has been moved 
from the first reporting day to the second reporting day of the week.
    Live Swine. For the daily reporting of swine that were slaughtered, 
packers will now be required to report `average loin depth' on the 
`prior day report'.
    Other Changes. Other miscellaneous changes were made to the 
regulatory text in response to the comments received and upon further 
review by AMS, including the addition of several new definitions to 
clarify the meaning of terms used in the regulations.

Overview

Market News

    The current voluntary market news program of the United States 
Department of Agriculture (USDA) Agricultural Marketing Service (AMS) 
for livestock and livestock products is authorized under the provisions 
of the Agricultural Marketing Act of 1946, as amended (7 U.S.C. 1621 et 
seq.). In the Agricultural Marketing Act of 1946, Congress declared 
that a sound, efficient, and privately operated system for distributing 
and marketing agricultural products is essential. Furthermore, it is 
indispensable to the maintenance of full employment and to the welfare, 
prosperity, and health of the Nation. Agricultural products, capable of 
being produced in great abundance, must be marketed in an orderly 
manner and efficiently distributed. Some of the objectives of the 
Agricultural Marketing Act of 1946 are to improve marketing methods, 
reduce distribution costs, and narrow the price spread between the 
producer and consumer. Under the Agricultural Marketing Act of 1946, 
the Market News Program provides for the collection and dissemination 
of information to facilitate the orderly and efficient marketing of 
agricultural products while aiding in the maintenance of farm income. 
Market News provides all market participants with the information 
necessary to make intelligent and informed marketing decisions.
    Market News relies upon voluntary cooperation from the livestock, 
red meat, grain, and wool industry. In addition, Market News maintains 
voluntary working agreements with many States to cooperatively collect 
and disseminate market information. Market News reporters collect 
information daily by telephone, including talking directly with 
producers, packers, feedlot operators, retailers, distributors, 
brokers, and other industry participants. Reporters are on site at 
major livestock markets, gathering market information first hand. 
Regular trips are made to observe livestock in feedlots, on farms, 
ranches, and in packer holding pens. Meat packing and processing 
facilities are visited to observe current industry practices and 
conditions. Reporters attend industry meetings, seminars, and trade 
shows to keep abreast of the latest information. The information 
collected by reporters is included in reports that are available to all 
interested parties. These reports provide data on cattle, hog, sheep, 
and lamb sales, carlot meat sales of boxed beef, lamb, veal, and pork 
cuts, weekly wool and mohair sales, and grain and feed sales. 
Currently, there are a total of 800 individual reports that are 
released by Market News. Each day, the livestock and red meat industry 
uses these reports in conducting their business. Further, a wide range 
of users outside of and peripheral to the livestock and red meat 
industry depend on the information provided in these reports, including 
Federal and State governmental agencies, foreign governmental agencies, 
academia, analysts, and news media.
    The Livestock Mandatory Act of 1999 (Act) was enacted into law on 
October 22, 1999 (Pub. L. 106-78; 113 Stat. 1188; 7 U.S.C. 1635-
1636(h)) as an amendment to the Agricultural Marketing Act of 1946. The 
Act provides for the mandatory reporting of market information by 
federally inspected livestock processing plants which have slaughtered 
an average number of livestock during the immediately preceding 5 
calendar years (125,000 for cattle and 100,000 for swine), including 
any processing plant that did not slaughter during the immediately 
preceding 5 calendar years if the Secretary determines that the plant 
should be considered a packer based on the plant's capacity. For 
entities that did not slaughter during the immediately preceding 5 
calendar years, such as a new plant or existing plant that begins 
operations, the AMS will project the plant's annual slaughter or 
production based upon the plant's estimate of annual slaughter capacity 
to determine which entities meet the definition of a packer as defined 
in these regulations.
    The Act gives the Secretary the latitude to provide for the 
reporting of lamb information. AMS is requiring the reporting of market 
information by federally inspected lamb processing plants who have 
slaughtered an average of 75,000 head of lambs or processed an average 
of 75,000 lamb carcasses during the immediately preceding 5 calendar 
years. Additionally, a lamb processing plant that did not slaughter an 
average of 75,000 lambs or process an average of 75,000 lamb carcasses 
during the immediately preceding 5 calendar years will be required to 
report information if the Secretary determines the processing plant 
should be considered a packer based on its capacity. An importer of 
lamb that, for any calendar year, imported an average of 5,000 metric 
tons of lamb meat products per year during the immediately preceding 5 
calendar years must report such lamb information as specified in these 
regulations. Additionally, an importer that did not import an average 
of 5,000 metric tons of lamb meat products during the immediately 
preceding 5 calendar years will be required to report information if 
the Secretary determines that the person should be considered an 
importer based on their volume of lamb imports.
    These packers are required to report the details of all 
transactions involving purchases of livestock (cattle, swine, and 
lambs), and the details of all transactions involving domestic and 
export sales of boxed beef cuts, including applicable branded product, 
sales boxed lamb cuts, including applicable branded product, and sales 
of lamb carcasses. These importers are required to report the details 
of all transactions involving the sales of imported boxed lamb cuts. 
This information will be reported to AMS according to the schedule 
established by the Act and these regulations with purchases of swine 
reported three times each day, purchases of cattle and lambs reported 
twice each day, domestic and export sales of boxed beef cuts including 
applicable branded boxed beef cuts reported twice each day, sales

[[Page 75467]]

of lamb carcasses and boxed lamb cuts, including applicable branded 
boxed lamb cuts, to be reported once daily, and sales of imported lamb 
cuts once weekly.
    In some instances, mandatory reporting will provide new information 
that has never been reported under the existing voluntary reporting 
program. AMS anticipates that this information will provide the basis 
for newly published market news reports not previously provided for 
under voluntary reporting, including reports covering the prior day 
swine market, forward contract and formula marketing arrangement cattle 
purchases, packer-owned cattle and sheep information, sales of imported 
boxed lamb cuts; and live lamb premiums and discounts. In other 
instances, mandatory reporting will provide information that is already 
being provided under voluntary reporting. This includes packer direct 
purchases of slaughter cattle, packer sales of boxed beef and lamb cuts 
including applicable branded boxed cuts, packer sales of lamb 
carcasses, and packer negotiated purchases of swine. In such cases the 
market reports reflecting this information will continue to be 
published but the basis of the market reports will become mandatory 
information. Lastly, many voluntary-based market news reports will not 
be affected by mandatory reporting, including reports covering 
livestock auction sales, packer sales of pork cuts and by-products, and 
grain trading.
    Initially, the mandatory information will be reflected in market 
news reports of national importance. AMS will start with the issuance 
of reports of national importance to ensure the confidentiality is 
preserved regarding the identity of persons, including parties to a 
contract, and proprietary business information. In time, when and where 
possible, these reports may be further refined and subdivided to 
reflect regional and, possibly, statewide markets. Again, refinement 
and subdivision of reports will be made only where the confidentiality 
can be preserved regarding the identity of persons, including parties 
to a contract, and proprietary business information. In order to 
effectively address the statistical disclosure issues surrounding 
reporting of data elements below the national level, AMS has and will 
continue to consult with appropriate experts in the field of 
statistical disclosure limitation. AMS has and will continue to also 
include industry participants in discussions regarding confidentiality 
issues surrounding data aggregation and reporting.
    The program developed to collect and manage data received from 
those entities required to report will ensure security of data 
transmission and storage, and confidentiality of information that is 
maintained by AMS. During program development, AMS has and will 
continue to include industry participants, as well as technical 
experts, in discussions regarding issues surrounding data security and 
confidentiality.
    In all cases, AMS will continue to publish a mix of existing 
voluntary market reports along with the mandatory market reports where 
duplication and inferential disclosure (disclosing information in such 
a way that the identity of a respondent can be inferred) is not an 
issue. Any duplication has been resolved with the discontinuation of 
the voluntary report version.

The Livestock Mandatory Reporting Act of 1999 (Act)

    The Act establishes a program of information regarding the 
marketing of cattle, swine, lambs and products of such livestock. AMS 
is responsible for implementing the mandatory reporting of market 
information on livestock and livestock products, which is contained in 
Sections 211 through 256 of the Act. The Sections on mandatory 
reporting of livestock are divided into five Chapters. Chapter 1 and 
Chapter 2, Definitions and Administration, respectively, apply to all 
species of livestock and livestock products required to be reported. 
Chapters 3, 4, and 5 apply to beef, swine, and lamb, respectively, and 
except for lamb, establish the requirements for mandatory reporting. 
AMS is implementing these sections of the Act through these 
regulations.
    The Act also directs the Secretary to encourage continued voluntary 
reporting by packers to which these mandatory reporting requirements do 
not apply. Other Agencies in the Department are responsible for 
implementing the remaining sections of the Act. These sections include 
the following provisions. Section 257 of the Act provides for the 
compilation and monthly publication of retail prices of beef, pork, 
lamb, veal, chicken and turkey and the initiation of a meat price 
spreads report. The Act also contains Related Beef Reporting 
Provisions, Sections 921 through 924 which provides for export 
certificates for meat and meat food products, and obtain information on 
imports of beef, beef variety meats, and cattle. Related Swine 
Reporting Provisions, Sections 931 through 934 calls for improving the 
hogs and pigs inventory report, the collection of information on barrow 
and gilt slaughter, and to conduct an average trim loss correlation 
study and prepare a report. Swine Packer Marketing Contracts, Sections 
221 and 222 require the establishment and maintenance of a library or 
catalogue of swine packer marketing contracts offered to producers and 
a monthly report of contracted swine numbers.
Cattle
    The Act requires that a cattle packer whose federally inspected 
plant slaughtered an average of at least 125,000 cattle per year for 
the preceding 5 calendar years, or did not slaughter cattle during the 
preceding 5 calendar years but is considered a packer based on plant 
capacity as determined by the Secretary, report market information to 
the Secretary. They are required to report the prices for each type of 
cattle purchase, categorized to clearly delineate imported from 
domestic market purchases, negotiated purchase, formula marketing 
arrangement, and forward contract, the quantity of cattle, categorized 
to clearly delineate imported from domestic market purchases, purchased 
on a live weight basis and a carcass basis, the weight, the quality 
grade, and premiums and discounts. This information will be reported 
twice a day not later than 10:00 a.m. and 2:00 p.m. Central Time. The 
Secretary will issue reports to the public of this information at least 
three times each day.
    The Act further requires that a packer report marketing information 
not later than 9 a.m. Central Time on the first reporting day of each 
week for cattle bought by the type of purchase for the prior week. In 
addition, packers must report weekly information on the first reporting 
day not later than 9 a.m. Central Time for cattle purchased on a 
formula or contract marketing arrangement and slaughtered the prior 
week. The Secretary will issue a public report not later than 10 a.m. 
Central Time on the first reporting day of the current slaughter week.
    The Act also mandates that the packer report information on boxed 
beef cut sales to the Secretary at least twice each reporting day not 
less frequently than once before and once after 12:00 noon Central 
Time. This information includes the price per hundredweight, the 
quantity in each lot of boxed beef cuts sold, information regarding the 
characteristics of each lot (i.e., domestic vs. export sale, USDA 
Quality Grade, etc.), the type of beef cut and the trim specification. 
The Secretary will report this information to the public twice each 
reporting day.

[[Page 75468]]

Swine
    The Act requires that a swine packer whose federally inspected 
plant slaughtered an average of at least 100,000 swine per year for the 
preceding 5 calendar years, or did not slaughter swine during the 
preceding 5 calendar years but is considered a packer based on plant 
capacity as determined by the Secretary, report market information to 
the Secretary.
    The packer must report to the Secretary not later than 7:00 a.m. 
Central Time information on all swine purchased, priced, or slaughtered 
on the prior business day. The packer must report all purchasing data 
including the number of swine purchased, swine scheduled for delivery 
and the base price and purchase data for slaughtered swine for which a 
price has been established. The information also includes all slaughter 
data by class for the total number of swine slaughtered including 
information concerning the net price, average carcass weight, average 
sort loss, average backfat, average loin depth, average lean 
percentage, and total slaughter quantity. Packers reporting the average 
lean percentage must report the manner in which the average lean 
percentage is calculated as well as whenever a change in such 
calculation is made. In doing so, the packer shall make available to 
the Secretary the underlying data, applicable methodology and formulae, 
and supporting materials used to determine the average lean percentage, 
which the Secretary will convert to the carcass measurements or lean 
percentage of the swine of the individual packer to correlate to a 
common percent lean measurement. Additionally, the information to be 
reported includes packer purchase commitments, which shall be equal to 
the number of swine scheduled for delivery to a packer for slaughter 
each of the next 14 calendar days.
    The Secretary will publish the information in a prior day report 
not later than 8:00 a.m. Central Time on the reporting day on which the 
information is received from the packer.
    The Act also requires packers to report to the Secretary in the 
morning not later than 10:00 a.m. Central Time and in the afternoon not 
later than 2:00 p.m. Central Time each reporting day. The information 
to be reported is the same for the morning and afternoon reports and 
includes an estimate of (1) the total number of swine purchased by each 
method of pricing, (2) the total number of swine purchased up until the 
time of reporting, and (3) the base price paid for all negotiated 
purchases of market hogs and the base price paid for each type of 
purchase of market hogs other than through a negotiated purchase. The 
Secretary will make the morning report available to the public not 
later than 11:00 a.m. Central Time and the afternoon report at 3:00 
p.m. Central Time on each reporting day.
    The Secretary will compile and issue a weekly noncarcass merit 
premium report on the first reporting day of the week not later than 
5:00 p.m. Central Time. This report is prepared from information 
furnished to the Secretary by packers who must report not later than 
4:00 p.m. Central Time on the first reporting day of the week. The 
information required includes each category of standard noncarcass 
merit premiums and the amount in dollars per hundred pounds of carcass 
weight paid to producers by the packer.
    Further, the Act provides that the Secretary review the information 
required to be reported by packers at least once every two years. Also, 
the Act directs the Secretary to promulgate regulations that specify 
additional information to be reported by packers if the Secretary 
determines information currently reported does not accurately reflect 
the methods by which swine are valued or priced, or account for the 
fact that packers that slaughter a significant majority of the swine 
produced in the United States no longer use backfat or lean percentage 
factors as indicators of price.
Lamb
    The Act gives the Secretary the authority to establish a mandatory 
lamb price reporting program that will provide timely, accurate, and 
reliable market information. Through these regulations the Secretary is 
establishing a mandatory lamb price reporting program.
    Although the Act does not specify the requirements for establishing 
a mandatory lamb price reporting program as it does for cattle and 
swine, AMS developed these requirements based upon its knowledge of the 
lamb industry and market information reporting of lamb under the 
voluntary reporting program. Following are the requirements for the 
mandatory lamb price reporting program.
    A lamb packer whose federally inspected plant slaughtered or 
processed an average of at least the equivalent of 75,000 lambs each 
year for the preceding 5 calendar years will report to the Secretary 
once daily the price of each type of lamb purchase, negotiated 
purchase, formula marketing arrangements, forward contract, quantity of 
lamb purchased on live weight or carcass weight, a range and average 
estimated live weights, quality grade, premiums and discounts, class 
type, pelt type, state of origin, and estimated dressing percentage. 
The Secretary will issue a report to the public on this information not 
less than once each day.
    Lamb packers will be required to report to the Secretary on a 
weekly basis on the second reporting day of the week information from 
the prior week. This information will include the quantity and certain 
carcass characteristics of lambs purchased through a negotiated 
purchase, formula marketing arrangement or forward contract that were 
slaughtered, the quantity and carcass characteristics of packer owned 
lamb that were slaughtered. Reported information will include, by type 
of purchase, the quantity of lamb purchased on live weight and carcass 
weight basis that were slaughtered, the quality grade, premiums and 
discounts paid, and dressing percentage. In addition, a lamb packer 
will be required to report the quantity and basis level for forward 
contracts, the range and average of intended premiums and discounts, 
and the expected slaughter date.
    The Secretary will make available to the public the information on 
the second reporting day of the current slaughter week.
    Packers will report information on daily sales of carcass lamb and 
sales of boxed lamb cuts each reporting day. For sales of carcass lamb, 
the information will include prices for sales, the type of sale, the 
branded product characteristics, the quantity of each sale, the USDA 
grade, trim specification, weight range, and delivery period. For sales 
of boxed lamb cuts, the packer will report the same information plus 
the quantity of boxes of each cut, the weight range of each cut, and 
the product state of refrigeration. The Secretary will issue to the 
public a report on carcass lamb sales and boxed lamb cut sales once 
each reporting day.
    For any calendar year, a lamb importer who imported an average of 
5,000 metric tons of lamb meat products per year during the immediately 
preceding 5 calendar years will report to the Secretary weekly the 
prices received for imported lamb cuts sold on the domestic market. 
Additionally, an importer that did not import an average of 5,000 
metric tons of lamb meat products during the immediately preceding 5 
calendar years will also be required to report the above information, 
if the Secretary determines that the person should be considered an 
importer based on their volume of lamb imports.

[[Page 75469]]

    Lamb importers will be required to report weekly, prices received 
for sales of imported boxed lamb cuts sold on the domestic market 
during the prior week including the quantity of each transaction, the 
type of sale, the branded product characteristics, the product state of 
refrigeration, the cut of lamb, the trim specification, the cut weight 
range, and the product delivery period.

Other Provisions of the Act Involving Administration

    The administrative provisions of the Act set forth the requirements 
for maintaining confidentiality regarding the packer reporting of 
proprietary information and lists the conditions under which Federal 
employees can release such information. These administrative provisions 
also establish that the Secretary can make necessary adjustments in the 
information reported by packers and take action to verify the 
information reported, and directs the Secretary to report and publish 
reports by electronic means to the maximum extent practical. The Act 
provides for what constitutes violations of the Act, such as failure to 
report the required information on time or failure to report accurate 
information.
    The section on enforcement establishes a civil penalty--of not more 
than $10,000--for each violation and provides for the Secretary's 
issuance of cease and desist orders. This section also provides for 
notice and hearing of violations before the Secretary, judicial review, 
issuance of an injunction or restraining order, and establishes a civil 
penalty for failure to obey a cease and desist order.
    The fees section directs the Secretary to not charge or assess fees 
for the submission, reporting, receipt, availability, or access to 
published reports or information collected through this program.
    The section on recordkeeping requires each packer to make available 
to the Secretary on request for 2 years the original contracts, 
agreements, receipts, and other records associated with any transaction 
relating to the purchase, sale, pricing, transportation, delivery, 
weighing, slaughter, or carcass characteristics of all livestock and 
livestock products, as well as such records or other information that 
is necessary or appropriate to verify the accuracy of information 
required to be reported. Also, the Act provides that reporting entities 
are not required to report new or additional information that they do 
not generally have available or maintain, or the provisions of which 
would be unduly burdensome.
    Further, the Act provides that the Secretary may suspend any 
requirement if the Secretary determines that the application of the 
requirement would be inconsistent with the Act.

Final Rule, New Part 59 of Title 7

    This rule will establish and add a new Part 59 to Title 7 of the 
Code of Federal Regulations, implementing the mandatory livestock 
reporting provisions of the Act. Accordingly, these regulations include 
appropriate definitions; a description of which entities are required 
to report market information; a description of what information they 
will report, when they will report, and how they will report; a 
description of what information the Secretary will make available to 
the public and when this information will be made available; an 
explanation of what records will be required to be maintained and made 
available to the Secretary.

General Provisions

    Part 59 implements the provisions of the Act. Subpart A of Part 59, 
General Provisions, covers those requirements pertinent to all aspects 
of mandatory reporting. Section 59.10 details how packers and importers 
will be required to report information and how reporting will be 
handled over weekends and holidays. Electronic reporting is required 
for all information collection. Electronic reporting will involve the 
transfer of data from a packer's or importer's existing electronic 
recordkeeping system to a centrally located AMS electronic database. 
The packer or importer is required to organize the information in an 
AMS-approved format before electronically transmitting the information 
to AMS.
    Once the required information has been entered into the AMS 
database, it will be aggregated and processed into various market 
reports that will be released according to the daily and weekly time 
schedule set forth in these regulations.
    Section 59.10 also outlines the requirements for regional reporting 
and aggregation by the Secretary, adjustments in information by the 
Secretary, and lists reporting exemptions.
    Section 59.20 identifies the recordkeeping requirements imposed by 
the Act and these regulations on packers and importers. Reporting 
packers and importers are required to maintain and to make available 
the original contracts, agreements, receipts, and other records 
associated with any transaction relating to the purchase, sale, 
pricing, transportation, delivery, weighing, slaughter, or carcass 
characteristics of all livestock. In addition, they are required to 
maintain such records or other information as is necessary or 
appropriate to verify the accuracy of the information required to be 
reported under these regulations. All of the above mentioned paperwork 
must be maintained by packers and importers for at least 2 years. 
Further, packers are required to maintain a record of the time of day a 
lot of cattle, swine, or lambs was purchased, either before 10:00 a.m. 
Central Time, between 10:00 a.m. and 2:00 p.m. Central Time, and after 
2:00 p.m. Central Time. However, to allow packers and importers time to 
collect, assemble and submit the information to AMS by the prescribed 
deadlines, all covered transactions up to within one half hour of the 
specified reporting times will be reported.
    Lastly, under Subpart A, Sec. 59.30 establishes general definitions 
of terms used throughout the regulations, which are applicable to all 
subparts.

Cattle

    Subpart B of Part 59 states what is required to be reported in the 
cattle and boxed beef sectors. Sec. 59.100 establishes definitions of 
cattle terms used in Subpart B including the definition of packer which 
identifies which entities are required to report under this rule. In 
any calendar year, the term cattle packer includes any federally 
inspected cattle plant which slaughtered an average of 125,000 head of 
cattle a year for the immediately preceding 5 calendar years. 
Additionally, the term includes any processing plant that did not 
slaughter cattle during the immediately preceding 5 calendar years if 
the Secretary determines that the plant should be considered a packer 
based on its capacity.
    For entities that did not slaughter cattle during the immediately 
preceding 5 calendar years, such as a new plant or existing plant that 
begins operations, the AMS will project the plant's annual slaughter or 
production based upon the plant's estimate of annual slaughter capacity 
to determine which entities meet the definition of a packer as defined 
in these regulations.
    Section 59.101 discusses the daily reporting requirement for live 
cattle transactions including what information will be reported, when 
it will be reported, and when it will be published. Cattle plants 
covered under the rule will report the details of their cattle 
purchases twice each day to AMS (once by 10:00 a.m. Central Time, and 
once by 2:00 p.m. Central Time) and will include all covered 
transactions made up to within one half hour of the

[[Page 75470]]

specified reporting time. Packers completing transactions during the 
one half hour prior to the previous reporting time will report those 
transactions at the next prescribed reporting time. The Secretary will 
publish the information not less than three times each day. Section 
59.102 discusses the same types of requirements for weekly live cattle 
reporting. Packers are required to report information regarding the 
prior slaughter week on the first reporting day of each week by 8:00 
a.m. Central Time. This information will be published by the Secretary 
on the same day by 10:00 a.m. Central Time. Finally under Subpart B, 
Sec. 59.103 details the information required to be reported concerning 
sales of boxed beef cuts including what will be reported, when it will 
be reported, and when it will be published. Cattle plants producing 
boxed beef cuts are required to report their domestic and export sales 
of boxed beef cuts including applicable branded boxed beef cuts to AMS 
twice each reporting day, once by 10:00 a.m. Central Time and once by 
2:00 p.m. Central Time, including all covered transactions made up to 
within one half hour of the specified reporting time. Cattle plants 
completing transactions during the one half hour prior to the previous 
reporting time will report those transactions at the next prescribed 
reporting time. This information will be published twice each day by 
the Secretary. These plants are required to reference the Institutional 
Meat Purchase Specifications (IMPS) for Fresh Beef Products Series 100, 
United States Department of Agriculture, Agricultural Marketing 
Service, Livestock and Seed Program, when applicable.

Swine

    Subpart C of Part 59 lists the requirements of swine reporting 
beginning with Sec. 59.200 which establishes definitions for terms used 
throughout the subpart, including the definition of packer which 
identifies which entities are covered under the regulations. In any 
calendar year, the term swine packer includes any federally inspected 
swine plant which slaughtered an average of 100,000 head of swine a 
year for the immediately preceding 5 calendar years. Additionally, the 
term includes any processing plant that did not slaughter swine during 
the immediately preceding 5 calendar years if the Secretary determines 
that the plant should be considered a packer based on its capacity.
    For entities that did not slaughter swine during the immediately 
preceding 5 calendar years, such as a new plant or existing plant that 
begins operations, the AMS will project the plant's annual slaughter or 
production based upon the plant's estimate of annual slaughter capacity 
to determine which entities meet the definition of a packer as defined 
in these regulations.
    Section 59.202 discusses the daily reporting requirement for live 
hog transactions including what information will be reported, when it 
will be reported, and when it will be published.
    Swine packers required to report under this rule will report the 
details of their swine purchases three times each day including a prior 
day report not later than 7 a.m. Central Time, a morning report not 
later than 10 a.m. Central Time, and an afternoon report not later than 
2 p.m. Central Time, including all covered transactions made up to 
within one half hour of each specified reporting time. Packers 
completing transactions during the one half hour prior to the previous 
reporting time will report those transactions at the next prescribed 
reporting time. This information will be published by the Secretary 
each reporting day not later than 8 a.m. Central Time, 11 a.m. Central 
Time, and 3 p.m. Central Time, respectively. Section 59.203 details the 
requirements for reporting weekly swine information to AMS including 
what will be reported, when it will be reported, and when it will be 
published. On the first reporting day of each week, not later than 4 
p.m. Central Time, packers are required to report information on 
noncarcass merit premiums used and paid to producers during the prior 
slaughter week by category. This information will be published on the 
first reporting day of each week not later than 5 p.m. Central Time.

Lamb

    Subpart D of Part 59 covers the mandatory reporting of lambs. 
Section 59.300 provides definitions for terms used throughout Subpart D 
including definitions for packer and for importer which identifies 
which entities are required to report under this rule. For any calendar 
year, the term lamb packer includes only a federally inspected lamb 
processing plant which slaughtered or processed the equivalent of an 
average of 75,000 head of lambs a year for the immediately preceding 5 
calendar years. Additionally, the term includes any processing plant 
that did not slaughter or process an average of 75,000 lambs during the 
immediately preceding 5 calendar years if the Secretary determines that 
the plant should be considered a packer based on the slaughter or 
processing capacity of the plant.
    For entities that did not slaughter lambs during the immediately 
preceding 5 calendar years, such as a new plant or existing plant that 
begins operations the AMS will project the plant's annual slaughter or 
production based upon the plant's estimate of annual slaughter capacity 
to determine which entities meet the definition of a packer as defined 
in these regulations.
    For any calendar year, the term lamb importer includes any importer 
that imported an average of 5,000 metric tons of lamb meat products per 
year during the immediately preceding 5 calendar years. Additionally, 
for any calendar year, the term importer includes any lamb importer 
that did not import an average of 5,000 metric tons of lamb meat 
products during the immediately preceding 5 calendar years if the 
Secretary determines that the person should be considered an importer 
based on their volume of lamb imports.
    For importers of lamb carcasses and cuts, AMS will annually review 
import lamb volume data obtained from the United States Customs Service 
to determine which importers are required to report imported boxed lamb 
cut sales information under these regulations.
    Entities that slaughter or process the equivalent of 75,000 lamb 
per year represent nearly all lamb packers and processors that 
currently report market information to AMS under voluntary reporting. 
The lamb packer definition varies from the definition of a cattle 
packer and swine packer in that it includes entities that process as 
well as slaughter. The trading of lamb carcasses continues to be a 
mainstay of the industry and many of the major processors of lamb 
carcasses into boxed lamb cuts do not slaughter but, rather, purchase 
carcasses from slaughterers. The 75,000 head per year provision for 
both slaughterers and processors was included to ensure comprehensive 
coverage of the lamb carcass and boxed lamb cut markets, similar to 
what is currently being reported to AMS under voluntary reporting.
    Because imported products comprise 31% of the U.S. market and can 
affect prices for domestic lamb, lamb importers were included for more 
complete information on lamb meat products being imported into the 
U.S., including the types, quantities, and prices of these products.
    Section 59.301 covers the daily reporting requirements for live 
lamb transactions including what will be reported, when it will be 
reported, and when it will be published. Lamb plants

[[Page 75471]]

covered under the rule will report the details of their live lamb 
purchases once each day to AMS, to include all covered transactions 
made up to within one half hour of the specified reporting time. Lamb 
plants completing transactions during the one half hour prior to the 
previous reporting time will report those transactions at the next 
prescribed reporting time. The Secretary will publish this information 
not less than once each day. Section 59.302 covers the same type of 
information for weekly reporting of live lamb transactions. Packers are 
required to report information regarding the prior slaughter week on 
the second reporting day of each week to be published by the Secretary 
on the same day. Finally, Sec. 59.303 covers the reporting requirements 
for transactions of lamb carcasses and boxed lamb cuts including what 
will be reported, when it will be reported, and when it will be 
published. Packers are required to report details of their transactions 
of carcass lambs once each day and the Secretary will publish the 
information once each day. Packers are required to report details of 
their sales of boxed lamb cuts, including applicable branded product. 
This information will be published once each day. These plants are 
required to reference the Institutional Meat Purchase Specifications 
(IMPS) for Fresh Lamb and Mutton Series 200, United States Department 
of Agriculture, Agricultural Marketing Service, Livestock and Seed 
Program, when applicable.
    Importers of boxed lamb cuts are required to report the required 
information of their prior week sales of imported boxed lamb cuts on 
the domestic market, including applicable branded product on the first 
reporting day of each week and this information will be published by 
the Secretary on the same day.

OMB Control Numbers

    Subpart E of Part 59 covers the OMB control number 0581-0186 
assigned pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35) for the information collection requirements listed in 
Subparts B through D of Part 59. All required information must be 
reported to AMS in a standardized format. The standardized format is 
embodied in 16 OMB-approved data collection forms. Copies of these 16 
forms are included in Appendix E at the end of this document. Cattle 
packers will utilize six of these forms (Appendix A) when reporting 
information to AMS including two for daily cattle reporting (LS-113 and 
LS-114), three for weekly cattle reporting (LS-115, LS-116, and LS-
117), and one for daily boxed beef cuts reporting (LS-126). Swine 
packers will utilize three forms (Appendix B), two for daily reporting 
of swine purchases (LS-118 and LS-119) and one for weekly reporting of 
non-carcass merit premium information (LS-120). Lamb packers will 
utilize seven of these forms (Appendix C) when reporting information to 
AMS including two for daily lamb reporting (LS-121 and LS-122), three 
for weekly lamb reporting (LS-123, LS-124, and LS-125), one for daily 
and weekly boxed lamb cuts reporting (LS-128) and one for daily and 
weekly lamb carcass reporting (LS-129). Lamb importers will utilize one 
of these forms when reporting information to AMS on weekly imported 
boxed lamb cut sales (LS-128).

Appendices

    The final section of this document contains a series of five 
appendices. These appendices will not appear in the Code of Federal 
Regulations. The first three appendices, Appendices A to C, have 
already been discussed above. They describe the forms that will be used 
by those required to report information under this program. Appendix D 
contains guidelines for those entities required to report information 
on how to use the forms. The forms are contained in Appendix E.

II. Comments and Responses

    On March 17, 2000, AMS published a proposed rule in the Federal 
Register and invitation for comment (NPRM)(65 FR 14652-14691) 
establishing a mandatory program of reporting information regarding the 
marketing of cattle, swine, lambs, and products of such livestock under 
the Act. Comments were accepted for the 30-day period beginning March 
17, 2000 and ending April 17, 2000. AMS received 703 comments covering 
a wide range of issues and concerns. The following is a breakdown of 
the commenters by type:

------------------------------------------------------------------------
                   Commenter classification                      Number
------------------------------------------------------------------------
Packer-processor.............................................         36
Packer employee \1\..........................................        581
Livestock producer...........................................         29
Importer.....................................................          6
Packer advocate..............................................          5
Producer advocate............................................         35
Governmental agency..........................................          9
Trading company/academia.....................................          2
                                                              ----------
      Total..................................................       703
------------------------------------------------------------------------
\1\ Includes 533 form letters sent in 10 separate comments and 48 form
  letters sent in 48 separate comments.

    Specific comments are discussed in detail below.

Comments Relating to Cost Burden and Recordkeeping

Validity of Cost Burden Estimates
    Summary of Comments: AMS received 468 comments concerning the 
validity of the cost burden estimates for implementing mandatory 
reporting in the propose rule. Four commenters agreed with AMS's 
estimate of the cost burden of mandatory reporting in the proposed 
rule. However, most commenters questioned AMS's cost burden estimates 
suggesting that the estimates were understated. Numerous commenters 
argued that the cost burden associated with mandatory reporting on 
small entities amounted to an economic hardship that would either force 
them to close their operations, sell out to a larger firm, or require 
they pass these additional costs on to producers and consumers which 
could negatively impact domestic markets for livestock and livestock 
products.
    Many commenters offered a wide range of cost burden estimates for 
mandatory price reporting. These estimates ranged from $5,000 to 
$6,560,000, and included initial start-up costs and annual costs of 
compliance. The estimated initial setup costs ranged from $15,000 to 
$700,000 with most of the setup cost estimates ranging from $30,000 to 
$75,000. Estimates for annual operating costs ranged from $5,000 to 
$400,000 with most of the estimates ranging from $40,000 to $105,000. A 
few commenters submitted industry cost estimates on a cost per head 
basis, as a cost multiple of the AMS cost estimates, and on an hourly 
basis.
    A few commenters suggested that AMS could reduce the reporting cost 
burden by changing some of the reporting requirements of the proposed 
rule. They recommended allowing lot aggregation, exempting branded 
boxed beef and lamb cuts, exempting lots of livestock consisting of 
fewer than 50 head, and exempting information which AMS would not be 
able to publish in reports due to confidentiality concerns as examples 
of reporting requirements that could be eliminated.
    Agency Response: AMS's cost estimates along with the supporting 
assumptions and methodology used were stated in the proposed rule. 
These supporting assumptions and methodology used appeared in the 
Regulatory Impact Analysis, Regulatory Flexibility Analysis, and 
Paperwork Reduction Act Analysis sections of the proposed rule. The 
commenters did not provide any detailed supporting data and information 
on the methodology used in formulating their cost estimates or any 
information that would enable

[[Page 75472]]

AMS to determine how they derived their cost estimates. However, we do 
note that the wide range of estimates does raise concerns as to what 
assumptions and methodology were used by the commenters.
    AMS believes that one explanation for the reason why some estimates 
submitted by commenters exceeded the estimates made by AMS is that 
commenters were estimating the costs of developing systems that far 
exceeded the minimum requirements of a system that would fulfill these 
regulations. Additionally, AMS believes that some commenters may have 
included other costs associated with normal recordkeeping and 
accounting practices that are already required by existing regulations 
for those engaged in the livestock and meat packing and importing 
industries and therefore are not new costs being required by the 
implementation of these regulations.
    Nonetheless, AMS has carefully reviewed its analysis of the cost 
burden estimates for mandatory reporting using the same assumptions and 
methodology used in the proposed rule. In this regard, we have added 
tables in the Regulatory Impact Analysis, Regulatory Flexibility 
Analysis, and Paperwork Reduction Act Analysis sections of this final 
rule which even more clearly itemize the supporting assumptions and 
methodology used by AMS in formulating our cost estimates. Further, we 
have adjusted our cost estimates where appropriate.
    Therefore, AMS believes we have done as comprehensive of an 
analysis as possible of the cost burden imposed by these regulations on 
those required to report.
    AMS does not agree that allowing lot aggregation, exempting branded 
boxed beef and lamb cuts, or exempting lots of livestock consisting of 
fewer than 50 head as reporting requirements would reduce the cost 
burden on the industry. Eliminating these requirements will not have 
any effect on reducing the number of forms that are included in AMS's 
estimated reporting cost burden because the suggested changes are not 
unique to any one form. The amount of time required to submit the forms 
will not be result in any significant time savings as AMS expects all 
data submission to be accomplished through electronic means. These 
changes will not reduce the number of respondents required to report as 
none of the respondents are limited to selling only branded boxed beef 
and lamb cuts and buying livestock in lots of 50 head or less. Lastly, 
allowing respondents to aggregate information on lots of livestock 
prior to submission will require them to spend additional time to sort 
and aggregate the information, resulting in an increased time burden.
    AMS does agree, however, that exempting entire product categories 
would reduce the annual cost burden on the industry. Specifically, 
eliminating entire product categories will reduce the number of 
responses specified in the Paperwork Reduction Act section of the 
proposed rule.
    According to Sec. 251(d)(3) of the Act, the Secretary shall make 
information obtained under this program available to the public only if 
it conforms to aggregation guidelines established by the Secretary. 
Pursuant to Sec. 251(d)(3), the Secretary has established the following 
guidelines: Submitted information will only be published by USDA if (a) 
it is obtained from no fewer than 3 packers or importers representing a 
minimum of three companies, (b) the information from any one packer or 
importer represents not more than 60 percent of the information to be 
published, and (c) AMS does not have any reason to believe the 
information cannot be reported in a manner that protects the 
confidentiality of the source packer.
    Because there is only one entity engaged in the business of 
purchasing imported lamb carcasses, AMS cannot report this information 
without disclosing the identity of the entity reporting. By requiring 
this entity to report its purchases of imported lamb carcasses that AMS 
would be unable to publish, the Agency believes this requirement would 
be an unnecessary burden placed upon the entity.
    Accordingly, in this final rule, importers are not required to 
report market information on purchases of imported lamb carcasses. 
Consequently, the estimated annual reporting burden for Form LS-129--
Lamb Carcass Report has been reduced by 43 hours or $860 per year. The 
total cost burden for lamb carcass reporting in this final rule has 
been adjusted accordingly.
    Nevertheless, if a sufficient number of entities enter the business 
of importing lamb carcasses that AMS believes it would be able to 
publish the information obtained, AMS intends on initiating rulemaking 
to amend these regulations to require the reporting of information by 
importers on purchases of imported lamb carcasses.
    Additionally, in contrast to the proposed rule, this final rule 
will not require lamb importers to report their purchases of imported 
boxed lamb cuts. Although the proposed regulations required lamb 
importers to report both their purchases and sales of imported boxed 
lamb cuts, the Agency has determined that because the reporting of lamb 
cuts sold in portion cut form (e.g., chops, steaks, etc.) are not to be 
reported for either domestic or imported lamb, the reporting of both 
the purchases and sales of imported boxed lamb cuts would not provide a 
significant amount of additional market information over what will be 
obtained by only requiring importers to report information on their 
sales of imported boxed lamb cuts not sold in portion cut form.
    AMS had originally intended to obtain market information concerning 
the purchases and sales of imported boxed lamb cuts in an effort to 
disseminate more complete market information concerning the prices 
being paid and received for imported lamb meat products entering the 
U.S. market. However, because packers and importers are exempt from 
reporting information concerning any boxed lamb cuts sold in portion 
cut form, the only product lamb importers produce from the processing 
of imported boxed lamb cuts not in portion cut form, AMS determined 
that requiring the reporting of this information was not necessary as 
these products could be processed into portion cut form before export 
to the United States, thereby being exempt from these reporting 
provisions. Further, information concerning the volume and value of 
imported boxed lamb cuts that are not sold in portion cut form from 
importers who buy and sell imported boxed lamb cuts not in portion cut 
form, this information is already being obtained by the requirement 
that importers report the prices they receive for their sales of those 
products.
Electronic Reporting of Information
    Summary of Comments: Twenty-one commenters supported electronic 
reporting of market news information. They believed that electronic 
reporting would facilitate aggregation and dissemination and would 
reduce the cost burden associated with paperwork. A few commenters 
recommended that rarely should AMS grant packers and importers 
exemptions from electronic reporting. A few commenters also wanted to 
see the system designed to eventually handle real-time reporting. One 
commenter suggested AMS develop and make available web-based input 
forms for submitting data online.
    Agency Response: AMS agrees with the points raised by the 
commenters regarding electronic data submission. AMS's own estimates of 
cost burdens indicated that the cost of submitting information by any 
method other than electronic would be cost-prohibitive, error prone, 
and unsecured. For the

[[Page 75473]]

same reasons, AMS will grant exceptions to electronic reporting only in 
emergency cases such as power failures or loss of Internet 
accessibility. AMS will also provide web-based input screens as an 
alternative option for entities to use when submitting information. AMS 
computer specialists have conducted on-site visits over the past year 
to many packers who will be required to report to discuss and evaluate 
electronic recordkeeping systems employed by the industry.
    AMS understands commenter's concerns about their ability to comply 
with these reporting requirements in a timely, accurate manner, in 
order to avoid any enforcement penalties. This is particularly 
important in the context of an untested, electronic reporting process 
and disparate computing resources among reporting entities. AMS further 
understands that unforeseen technical difficulties may occur during the 
implementation of this rule which may, in some cases, prevent full 
compliance. Recognizing these concerns and acknowledging our 
responsibility to provide flexibility in dealing with small business as 
directed by the President in the 1995 Regulatory Reform--Waiver of 
Penalties and Reduction memorandum, entities acting in good faith in 
attempting to establish a data transfer technology and reporting 
process that will comply with the electronic reporting requirements 
will not be penalized under the enforcement provisions.
    To further assist the industry in achieving compliance, educational 
and outreach sessions will be held around the country immediately upon 
publication of this final rule. In these sessions, AMS will actively 
assist each reporting entity in understanding how their information 
technology infrastructures and related resources should be configured 
in order to ensure interoperability with the electronic transaction 
system developed by AMS. AMS will document and provide the reporting 
entities with standards and protocols associated with the transaction. 
Among other topics, these sessions will also provide information on 
implementing and using digital certificates, acceptable submission 
formats, the newly designed web-based input method, output report 
designs, data aggregation guidelines, and AMS' electronic transaction 
system. In addition, AMS plans to beta test the technology to implement 
the rule during the time between publication of this final rule and its 
effective date and all entities required to report will be encouraged 
to participate in the beta testing program. Any feedback received 
during this outreach and testing period will be used to revise the 
reporting requirements, input and output formats, and process 
accordingly.
    In response to the comment concerning AMS developing and making 
available a web-based input forms for submitting data online, AMS found 
that some of the smaller entities covered under mandatory price 
reporting would benefit from such a web-based submission system. 
Accordingly, AMS is developing such a system that will be ready in time 
for program implementation.
Maintenance of Records
    Summary of Comments: AMS received 4 comments expressing concern 
that many of the records required for submission under mandatory price 
reporting are not normally maintained by their operation and argued 
that the requirement of such records is contrary to the intent of the 
Act.
    Agency Response: The Agency has tried to make the records required 
to be submitted and maintained under this final rule the minimum needed 
to achieve the objectives of the Act. Further, based upon AMS's 
knowledge of common industry practices and in being consistent with the 
requirements of the Act, these regulations do not require the reporting 
of any new or additional information that is either not generally 
available or maintained by packers or the provision of which would be 
unduly burdensome.
Retention of Records
    Summary of Comments: Five comments suggested that the 2-year record 
retention requirement for packers covered under mandatory price 
reporting be changed. They recommended that packers be required to 
maintain records for up to 10 years so that the records would be 
available for investigation purposes.
    Agency Response: A 2-year recordkeeping requirement is required by 
Sec. 255(a) of the Act.
Maintenance of Records of Oral Agreements
    Summary of Comments: AMS received 9 comments recommending that 
packers be required to maintain data on oral agreements and verbal 
contracts. The commenters expressed concern that no provision was made 
in the proposed rule for clarifying how records of such transactions 
would be maintained.
    Agency Response: Section 255(a)(2) of the Act requires packers to 
maintain such records or other information as is necessary or 
appropriate to verify the accuracy of the information required to be 
reported, including verification of oral agreements and verbal 
contracts of any transaction required to be reported under mandatory 
price reporting.

Comments Relating to Reporting Timeframes

Prior Day Swine Reporting
    Summary of Comments: AMS received 27 comments regarding the 
proposed prior day swine reporting time of 7:00 a.m. Central Time 
(Sec. 57.202(a) of the proposal and Sec. 59.202(a) of this final rule). 
Fourteen commenters supported this reporting requirement as being 
satisfactory to ensure timely availability of market information. 
Thirteen commenters argued that the requirement to report prior day 
swine information at 7:00 a.m. Central Time daily would not allow 
packers sufficient time to collect, audit, and review information prior 
to submission, thereby increasing the chance for error and the 
potential liability for penalties. These commenters stated that this 
requirement was unrealistic because the required information is not 
available in a complete and accurate form until later in the day. A few 
commenters stated they would have to hire additional personnel and 
alter their normal work schedules in order to comply with the 7:00 a.m. 
Central Time prior day swine reporting requirement. Commenters located 
in the Pacific Time zone stated that they would be particularly 
burdened by this requirement by being 2 hours behind the Central Time 
zone specified reporting times. Two commenters stated that their 
business day did not begin until after the required 7:00 a.m. Central 
Time reporting requirement for prior day swine information.
    Agency Response: The time requirements for the reporting of prior 
day swine information are in accordance with the Act (section 
232(c)(1)(B)) and this final rule reflects that provision of the Act. 
Nonetheless, information not available in time for the prior day swine 
reporting should be reported, and will be published, as a part of the 
next report.
Prior Slaughter Week Cattle Reporting
    Summary of Comments: AMS received 5 comments stating that the 9:00 
a.m. reporting time on the first reporting day of the week for prior 
slaughter week data (Sec. 57.102(c) of the proposal) for reporting 
cattle was unrealistic since complete information would not be 
available. They argued that, because standard industry practice

[[Page 75474]]

was to have cattle that are slaughtered on Friday and Saturday graded 
on Monday, all of the information required would not be available or 
even known until Tuesday at the earliest. These commenters recommended 
that the required reporting day be moved to later in the week.
    Agency Response: The time requirements for the reporting of prior 
slaughter week cattle information are in accordance with the Act 
(section 222(d)(1) and (2)) and this final rule reflects those 
provisions of the Act. Nonetheless, information not available in time 
for the prior slaughter week reporting should be reported, and will be 
published, as a part of the next report.
Reporting Trades Within 30 Minutes of Reporting Times
    Summary of Comments: AMS received 2 comments stating that it was 
impossible to report all trades occurring within 30 minutes of the 
10:00 a.m. and 2:00 p.m. proposed reporting times. They argued that 
this requirement would disrupt their procurement practices by forcing 
their buyers to discontinue their purchases.
    Agency Response: The 10:00 a.m. and 2:00 p.m. reporting time 
requirements for reporting purchases of cattle and swine are consistent 
with the provisions of the Act. The 2:00 p.m. reporting time 
requirement for reporting purchases of lambs is set by regulation in 
accordance with Sec. 241 of the Act which authorizes the Secretary to 
establish a program of mandatory price reporting program for lamb and 
lamb products. The 2:00 p.m. reporting time was chosen to be consistent 
with the reporting times for cattle and swine and is consistent with 
current industry practice under the existing market news program.
    The requirement to report all covered purchases up to one half hour 
of the set reporting time (Sec. 59.10(b)) allows time for preparing and 
transmitting the required information prior to the set deadline and 
provides for purchases made in the interim 30 minutes to be reported at 
the next reporting time.
Reporting Times for Boxed Beef
    Summary of Comments: AMS received one comment objecting to the 
reporting times of 10 a.m. and 2 p.m. Central Time for boxed beef. The 
commenter argued that the Act only required that box beef sales be 
reported prior to 12 noon and once after 12 noon.
    Agency Response: The Act provides that information on boxed beef 
will be reported twice daily, once before 12 noon and once after 
(Sec. 223(a)). In the proposed rule, AMS required that reporting be 
completed by 10 a.m. and 2 p.m. Central Time. These times reflect the 
boxed beef report publishing times that have been in effect for a 
number of years under voluntary reporting. These times are deemed to be 
appropriate because they reflect current industry practice and provide 
the needed time to prepare and transmit information to AMS.
Reporting Times for Lamb Purchases
    Summary of Comments: AMS received 4 comments expressing concern 
over the twice-daily reporting requirement for live lamb 
(Sec. 57.301(a) of the proposal). The commenters suggested that this 
requirement for twice daily reporting of live lamb purchases be changed 
to reporting once per day reporting at 2 p.m. Two of these commenters 
also expressed concern over the proposed requirement to report prior 
slaughter week data at 9 a.m. on the first reporting day of the week 
(Sec. 57.302(a) of the proposal). They argued that this information is 
typically not available until Tuesday for formula and contract sales of 
livestock. They proposed that the requirement be changed from the first 
reporting day of the week to a later day.
    Agency Response: The Act authorizes the Secretary to establish a 
program of mandatory lamb price information reporting. However, unlike 
the sections dealing with cattle and swine, Sec. 241 of the Act does 
not mandate reporting timeframes. AMS has reviewed the comments 
specific to lamb reporting time frames in the proposed rule and has 
made the following changes in this final rule. Under Sec. 59.301(a), 
AMS has changed the requirement for mandatory daily reporting of lamb 
from twice per day at 10 a.m. and at 2 p.m. Central Time, as proposed, 
to once per day at 2 p.m. Central Time. Under mandatory weekly 
reporting of lambs (Sec. 59.302(a)), AMS has changed the required 
reporting day for reporting prior slaughter week information from 9 
a.m. Central Time on the first reporting day of the week to 9 a.m. 
Central Time on the second reporting day of the week. These changes 
will bring the proposed regulations more in line with current industry 
practices and will lessen the burden on those entities required to 
report while continuing to ensure complete, accurate, and timely access 
to market information. Section 59.301(a) and Sec. 59.302(a), 
respectively, have been revised accordingly.
Reporting Times for Boxed Lamb Cuts and Lamb Carcasses
    Summary of Comments: AMS received 2 comments stating that the daily 
requirement for reporting of lamb carcasses and boxed lamb cuts 
(Sec. 57.303(a) of the proposal) was not necessary because prices are 
set on a weekly basis and remained in effect for the entire week.
    Agency Response: AMS has determined that, while prices for all 
trading during a given week may be set on a weekly basis, trading 
occurs on a daily basis. Furthermore, the day of the week on which the 
lamb carcass market is established is not always the same day. AMS 
believes that changing the required reporting to once weekly would not 
achieve the objectives of the Act. For these reasons this suggestion is 
not adopted.
Actual Time Stamping
    Summary of Comments: AMS received 7 comments suggesting that 
packers be required to maintain the exact time that each transaction 
took place instead of by one of the 3 proposed time blocks (before 10 
a.m. Central Time, between 10 a.m. and 2 p.m. Central Time, and after 2 
p.m. Central Time).
    Agency Response: Section 255(c) of the Act requires that each 
reported transaction evidence the time that the transaction took place 
by one of 3 time blocks (before 10 a.m. Central Time, between 10 a.m. 
and 2 p.m. Central Time, and after 2 p.m. Central Time). Accordingly, 
this suggestion is not adopted.

Comments Relating to Reporting Units

Lot Aggregation
    Summary of Comments: AMS received 37 comments pertaining to 
reporting lot size. Eleven commenters suggested that packers should be 
allowed to aggregate lots of livestock sharing a common price or 
aggregate lots sharing the same price, specification, and purchase 
terms prior to reporting the required information to AMS. Two of these 
same commenters felt that aggregation should only be for lots sharing 
the same price. Six commenters suggested that small lots of livestock, 
particularly cows and bulls, be exempted from the reporting 
requirements. They pointed out that most cows and bulls were purchased 
one head at a time, largely through auctions, and believed the burden 
of reporting each transaction outweighed the marginal value of the 
information on individual animals.
    Nine commenters supported reporting transactions by lot as 
proposed.
    Eleven commenters recommended that AMS exempt sales of boxed beef 
and boxed lamb from the reporting

[[Page 75475]]

requirement under a minimum number of boxes or a minimum weight range 
(e.g. 100-200 boxes or 6,000-20,000 pounds).
    Agency Response: AMS does not believe that its proposed rule should 
be modified based on these comments. Section 251(c) of the Act requires 
a packer to report all information obtained under this part on an 
individual lot basis. Further, Sec. 212 defines a lot as: ``The term 
`lot' means a group of one or more livestock that is identified for the 
purpose of a single transaction between a buyer and a seller.'' 
Similarly, with respect to the comments concerning boxed beef and lamb, 
information on such sales, regardless of the number of boxes or weight 
range, must be reported. However, as discussed elsewhere in this 
section, with respect to purchases made at auction markets, such 
purchases do not need to be reported. Accordingly, these suggestions 
are not adopted.
Distributive Sales
    Summary of Comments: Five commenters recommended transactions of 
boxed beef, boxed lamb and lamb carcasses of less than carlot volume, 
commonly referred to in the industry as ``distributive sales'', be 
exempted from the reporting requirement. AMS understands distributive 
sales to be sales of boxed beef destined for more than two delivery 
stops, and sales of boxed lamb, and lamb carcasses destined for more 
than three delivery stops. These commenters expressed a concern that 
the reporting of such transactions would unfairly expose the business 
practices of small business entities to larger competitors thus placing 
the smaller entities at a disadvantage in the marketplace. Distributive 
sales are largely comprised of unique, value-added products where 
prices often reflect added customer services.
    Agency Response: Because of the uniqueness of the distributive 
trade, relatively small percentage such trades represent of all boxed 
beef sales, and negative effect the inclusion of such unrelated 
information would have on the aggregated reports AMS would publish, it 
was never AMS's intention that the information concerning the 
distributive trade would be included in this program as AMS believes 
the reporting of such information is not contemplated by the Act.
    To clarify that distributive sales are not to be reported, in this 
final rule, AMS has included definitions of a carlot of boxed beef, 
boxed lamb, and lamb carcasses. For purposes of boxed beef cuts 
reporting, a carlot is any transaction between a buyer and a seller 
involving 2 or less delivery stops consisting of one or more individual 
boxed beef items. For lamb carcasses and boxed lamb cuts reporting, a 
carlot is any transaction between a buyer and a seller involving 3 or 
less delivery stops consisting of one or more individual boxed lamb 
cuts or any combination of carcass weights. By adding these 
definitions, AMS has clarified the regulations concerning reporting of 
distributive trade of boxed beef and boxed lamb cuts and lamb 
carcasses. Sections 59.100 and 59.300 of these regulations have been 
revised accordingly.
Packer Thresholds
    Summary of Comments: Twelve comments were received concerning the 
thresholds that were established by the Act and AMS to determine who is 
a packer or importer for the purposes of mandatory reporting.
    Three commenters believed the proposed thresholds were accurate and 
opposed any changes and nine commenters supported changes to the 
proposed thresholds.
    Of the nine who supported changes to the proposed thresholds, 5 
commenters expressed the concern that the lamb import threshold of 
5,000 metric tons and the domestic lamb packer threshold of an average 
75,000 head per year for each of the preceding 5 years were not 
comparable. These commenters felt that the threshold for lamb importers 
was set too high in relation to the domestic packer threshold and 
should be lowered to insure adequate coverage of the imported lamb 
market. These commenters also suggested that all importers of lamb, 
regardless of size, be required to report.
    The four remaining comments addressed separate issues. One 
commenter suggested raising the cattle threshold from an average of 
125,000 to 199,999 head per year for each of the preceding 5 years. 
This would exempt most cow and bull plants from reporting. Another 
packer suggested that the cattle threshold should be raised to exempt 
packers slaughtering fewer than 500,000 head per year for each of the 
preceding 5 years. They suggested that this would reduce the burden on 
smaller packers while still maintaining adequate market coverage. 
Another commenter suggested raising the threshold for swine packers 
from an average of 100,000 to 500,000 head per year for each of the 
preceding 5 years. The commenter believed that this threshold would 
cover the majority of swine without subjecting smaller independent 
plants to the reporting burden. Finally, one commenter suggested that 
the lamb reporting thresholds be lowered from the average 75,000 head 
per year for each of the preceding 5 years in order to capture 
information from many of the ethnic lamb kills which the commenter 
contends have a major impact on lamb pricing.
    Agency Response: The definitions of cattle and swine packers put 
forth in the proposed regulations are defined by the Act. However, 
unlike cattle and swine, the Act does not provide a definition of a 
lamb packer or importer.
    AMS believes that lowering the lamb packer threshold from what was 
put forth in the proposed regulation will create a burden on additional 
lamb packers without a gain of significant market information. 
Additionally, the 75,000 head per year threshold was set to be 
compatible with those thresholds set by the Act for cattle and swine 
packers.
    Similarly, AMS established the 5,000 metric ton lamb importer 
threshold because it will cover a comparable percentage of the lamb 
imports as slaughter and processing are being covered by the cattle, 
swine and lamb packer definitions, or approximately 80% of lamb 
imported into the U.S. (According to U.S. Customs Service published 
data, in 1999, 40,301 metric tons were imported by the U.S.)
    The importer capacity threshold would have to be reduced to 2,500 
metric tons to cover the remaining 20% of lamb meat imports. 
Additionally, the products imported by many of these operations are so 
unique that AMS believes it would be unable to report them without 
disclosing proprietary information.
    For the reasons stated above, none of the suggested changes to the 
cattle packer, swine packer, lamb packer, or lamb importer definitions 
are adopted.

Comments Relating to Voluntary Reporting

Voluntary Reporting Role
    Summary of Comments: AMS received 51 comments supporting a 
continued role for voluntary market reporting. A total of 44 comments 
expressed a desire to continue voluntary reporting in those markets not 
covered by mandatory reporting. These commenters encouraged AMS to 
continue to solicit voluntary participation from entities not covered 
under mandatory reporting including producers and smaller packers. The 
commenters maintained that the information gained through this 
voluntary process would provide a

[[Page 75476]]

check and balance to mandatory reporting and would fill gaps in 
mandatory reporting.
    Several commenters recommended that adequate funding be found for 
both mandatory and voluntary reporting. These commenters believed that 
market news should be fully staffed with adequate resources to at least 
maintain the current level of market information.
    Agency Response: AMS intends to continue many voluntary reporting 
programs. AMS has no plans to discontinue coverage of any voluntary-
based market news reports not affected by mandatory reporting, 
including reports covering livestock auction sales, packer sales of 
pork cuts and by-products, feeder cattle sales, feeder pig sales, and 
grain trading. In some instances, mandatory reporting may provide some 
of the information that is already being provided under voluntary 
reporting. This would include some transactions of packer direct 
purchases of slaughter cattle, packer sales of boxed beef and lamb cuts 
including applicable branded boxed cuts, packer sales of lamb 
carcasses, and packer negotiated purchases of swine. The market reports 
reflecting this information will continue to be published but the basis 
of the market reports will be more comprehensive and will become 
mandatory information.
    In some instances, mandatory reporting will provide new information 
that has never been reported under the existing voluntary reporting 
program. AMS anticipates that this information will provide the basis 
for publishing market news reports not previously provided for under 
voluntary reporting. This will include reports covering the prior day 
swine market, forward contract and formula marketing arrangement cattle 
purchases, packer-owned cattle and lamb information, sales of imported 
boxed lamb cuts, including applicable branded product; and live lamb 
premiums and discounts.
    The Act requires the Secretary to encourage voluntary reporting by 
packers to which the mandatory reporting requirements do not apply. AMS 
will encourage voluntary reporting in markets not covered under 
mandatory reporting.
Transition Period
    Summary of Comments: Ten comments were received promoting the need 
for a transitional period from voluntary to mandatory based reporting. 
The commenters contended that a transition would lessen market 
disruptions through the loss of market information.
    Agency Response: Although AMS will not be able to implement a 
transition period of both mandatory and voluntary information being 
published at the same time, AMS will implement a program of education 
and outreach during the period between the publication of this final 
rule and its effective date to ensure market participants understand 
the changes that will be occurring. This should lessen disruptions in 
the marketplace in such areas as where AMS's market news reports are 
used by the industry as the basis for formulated sales.
Loss of Personal Contact
    Summary of Comments: AMS received 7 comments expressing concern 
about the potential loss of personal contact between the livestock 
industry and AMS livestock and meat trade market news reporters where 
industry participants are able to routinely, conveniently and openly 
discuss market conditions with AMS livestock and meat trade market news 
reporters. These commenters believed these market news reporters would 
have to spend so much of their time managing the large volume of 
information anticipated to be collected under mandatory reporting that 
there would be little or no time available for the traditional personal 
contact and AMS would not maintain its current office locations 
resulting in further loss of personal contact.
    Agency Response: As discussed previously, AMS intends on continuing 
its voluntary market news reporting program for those products not 
covered by mandatory reporting. Accordingly, no loss in personal 
contact with AMS market news reporters should be experienced by 
individuals accustomed to working with voluntary market news reporters 
in those markets. Additionally, at this time, AMS has no plans to close 
any of its current office locations as a result of mandatory reporting, 
so accessibility to market news offices by producers or other 
interested persons should not be impacted.
    However, in accordance with the requirements of Sec. 251(b) of the 
Act, which states that no officer, employee, or agent of the United 
States shall, without the consent of the packer or other person 
concerned, divulge or make known in any manner, any facts or 
information regarding the business of the packer or other person that 
was acquired through reporting required by the Act, AMS will ensure 
that unauthorized releases of information are guarded against. AMS is 
especially mindful of this given that the submission of such 
information by packers and importers under this program is mandatory 
and carries civil penalties for the failure or refusal to submit 
information. Accordingly, AMS recognizes and will institute policies 
that will ensure that market reporters engaged in the collection and 
dissemination of mandatory information will not be able to openly 
discuss market conditions concerning proprietary information. Further, 
AMS recognizes that market reporters engaged in the collection and 
dissemination of mandatory information cannot discuss any information 
before such information is made available publicly.
    This is not to say that any of these requirements conflict in any 
way with procedures currently followed as a part of the voluntary 
reporting program, but establishment of this mandatory program requires 
AMS to clarify its policies and procedures regarding public contact 
with market reporters engaged in the collection of mandatory 
information.

Comments Relating to Regional Reporting

National, Regional, and State-wide Reporting
    Summary of Comments: AMS received 42 comments addressing the issue 
of how mandatory information should be reflected--on a nationwide, 
regional, or state-wide basis. Five commenters wrote supporting AMS's 
intentions to initially release reports on a national basis in order to 
protect confidentiality.
    Most commenters opposed the initial release of mandatory 
information on a national level. These commenters asserted that 
national level reports were of limited use to the industry and they 
would not accomplish the goal of providing producers with useful and 
accurate information. These commenters believed that AMS could release 
much of the mandatory information on a regional and statewide basis 
from the outset without disclosing proprietary information, especially 
in the case of some of the significant market news reports currently 
being released under voluntary reporting such as the Iowa-Southern 
Minnesota Direct Hog report. These commenters urged AMS to initially 
release as much mandatory information as possible on a statewide and 
regional basis while complying with the confidentiality provisions of 
the Act. A few commenters suggested that AMS release mandatory 
information from the outset on a regional and statewide basis 
regardless of confidentiality provisions.

[[Page 75477]]

    Some commenters questioned AMS's statutory authority to begin 
publishing mandatory information only on a national level.
    Agency Response: Sections 251(d) of the Act provides for the 
mandatory information to be published on a national and a regional or 
statewide basis as the Secretary determines to be appropriate while 
ensuring that the identity of a reporting person is not disclosed. 
Initially, AMS will develop reports on a national basis to ensure the 
confidentiality in the reports of the identity of persons, parties to 
contracts, and proprietary business information. Over time, as the 
system of mandatory market news reporting is refined, AMS will expand 
reports to a regional or statewide basis.

Comments Relating to Confidentiality

Transaction-Level Data Sharing
    Summary of Comments: AMS received 23 comments addressing the issue 
of providing transaction-level data gathered through mandatory 
reporting to other Federal and State enforcement entities. These 
commenters wanted the rule clarified to accomplish transaction-level 
data sharing for enforcement and investigation purposes with the 
Packers and Stockyards Administration, the Justice Department, the 
Federal Trade Commission, any State enforcement agency or in response 
to any court sanctioned request or Freedom of Information request.
    Agency Response: The conditions under which information is to be 
disclosed is stated in Sec. 251 General Provisions of the Act. The 
information obtained by the Secretary under this program may be 
disclosed: (1) To agents or employees of USDA in the course of their 
official duties under the Act; (2) as directed by the Secretary or the 
Attorney General, for enforcement purposes; or (3) by a court of 
competent jurisdiction. It is not necessary to include a section on 
disclosure in the final rule.
Maintaining Confidentiality
    Summary of Comments: AMS received 26 comments concerning 
maintaining confidentiality of proprietary information collected under 
mandatory reporting. Most commenters believed AMS should establish 
effective aggregation procedures to ensure safeguarding proprietary 
information. Some commenters urged AMS to develop guidelines for 
aggregation and publish them in the final rule. In addition, the 
majority of commenters wanted AMS to present the format of the 
aggregated reports that it intends to publish as a result of mandatory 
reporting. A few commenters stated that aggregation of market 
information would not provide the level of market transparency that was 
needed in the reports.
    Agency Response: Pursuant to Sec. 251(d)(3), the Secretary has 
established the following guidelines: Submitted information will only 
be published by USDA if: (a) It is obtained from no fewer than 3 
packers or importers representing a minimum of three companies; (b) the 
information from any one packer or importer represents not more than 60 
percent of the information to be published; and (c) AMS does not have 
any reason to believe the information cannot be reported in a manner 
that protects the confidentiality of the source packer.
    In addition, AMS is developing formats for those reports it intends 
to publish as a result of mandatory price reporting. These sample 
reports will be used as part of the educational and outreach component 
being developed by AMS to facilitate the transition from voluntary 
market news reporting to mandatory market news reporting during the 
period between publication of this final rule and its effective date. 
With respect to concerns regarding the reports being able to provide 
the level of market transparency that is needed, as already discussed, 
AMS will initially release reports on a national basis to ensure the 
confidentiality in the reports of the identity of persons, parties to 
contracts, and proprietary business information. Over time, as the 
system of mandatory market news reporting is refined, AMS will expand 
reports to a regional or statewide basis to provide more market 
transparency.
Nation of Origin
    Summary of Comments: AMS received 2 comments regarding the 
inclusion of nation of origin as a reporting requirement for reporting 
lamb products. The commenters argued that the inclusion of nation of 
origin served no useful purpose.
    Agency Response: It is widely understood in the lamb industry that 
the majority of boxed lamb cuts and lamb carcasses imported into the 
U.S. come from Australia and New Zealand. Because industry participants 
are already aware of the origin of lamb imports, the value of requiring 
this information to be reported is outweighed by the burden the request 
of such information places on lamb importers required to report. 
Accordingly, the nation of origin requirement in Sec. 57.303 of the 
proposal has been removed from this final rule for reporting of 
domestic and imported sales of boxed lamb cuts, and sales of lamb 
carcasses.

Comments Relating to Imports and Exports

Lamb Imports
    Summary of Comments: AMS received 17 comments addressing lamb 
import reporting requirements. Six commenters expressed support for 
import lamb reporting. They believed that information on lamb imports 
would be very beneficial to domestic lamb producers and that it would 
help to restore competition in the marketplace for lamb products. 
Eleven commenters opposed AMS mandating reporting of all purchases and 
sales of boxed imported lamb cuts and imported lamb carcasses because 
they felt it would disclose their operating margins. Further, they 
argued that they were being treated differently than beef and pork 
importers and that import lamb information was of little benefit to 
domestic producers and what little information was to be gained was 
outweighed by the potential burden placed upon them. They recommended 
that the dual requirement of reporting purchases and sales of imported 
lamb carcasses be dropped from the final rule. One other commenter 
suggested that all lamb imports be exempted from the reporting 
requirements in this final rule.
    Agency Response: AMS does not agree that all imported lamb be 
exempted. In 1999, lamb imports comprised 32% of the total U.S. 
consumption based on U.S. Customs Service data (50,377 metric tons in 
1999) and domestic production data published by the National 
Agricultural Statistics Service (235.8 million pounds in 1999). 
Imported lamb accounts for nearly a third of the total domestic U.S. 
market and directly impacts the pricing structure of the domestic 
marketplace. Market information on lamb imports is clearly significant 
and important to domestic lamb producers.
    AMS agrees with the suggestion to not report both the purchases and 
sales of imported boxed lamb cuts and carcass lamb as required in the 
proposed rule. Accordingly, AMS has made the following changes to the 
imported lamb reporting requirements in this final rule.
    First, as already discussed, the requirement for reporting 
purchases of imported lamb carcasses has been removed from Sec. 59.303. 
Because there is only one entity engaged in the business of purchasing 
imported lamb carcasses, AMS cannot report this information without 
disclosing the identity of the entity reporting.

[[Page 75478]]

    Second, AMS has revised the requirements for the reporting of 
imported boxed lamb cuts in Sec. 59.303 to clarify that lamb importers 
will not be required to report lamb cuts that are prepared in a portion 
cut form (e.g. chops, steaks, etc.). AMS recognizes that the reporting 
of portion cuts is not required for domestic boxed lamb cuts or boxed 
beef cuts and therefore should not be required for imports. 
Furthermore, such portion cuts are unique to certain respondents based 
upon characteristics such as cutting style or packaging and would not 
be eligible for inclusion in published reports without disclosing 
proprietary business information.
    And third, as already discussed, this final rule will not require 
lamb importers to report their purchases of imported boxed lamb cuts. 
Although the proposed regulations required lamb importers to report 
both their purchases and sales of imported boxed lamb cuts, the agency 
has determined that because the reporting of lamb cuts sold in portion 
cut form (e.g., chops, steaks, etc.) are not to be reported for either 
domestic or imported lamb, the reporting of both the purchases and 
sales of imported boxed lamb cuts would not provide a significant 
amount of additional market information over what will be obtained by 
only requiring importers to report information on their sales of 
imported boxed lamb cuts not sold in portion cut form.
    AMS had originally intended to obtain market information concerning 
the purchases and sales of imported boxed lamb cuts in an effort to 
disseminate more complete market information concerning the prices 
being paid and received for imported lamb meat products entering the 
U.S. market. However, because packers and importers are exempt from 
reporting information concerning any boxed lamb cuts sold in portion 
cut form, the only product lamb importers produce from the processing 
of imported boxed lamb cuts not in portion cut form, AMS determined 
that requiring the reporting of this information was not necessary as 
these products could be processed into portion cut form before export 
to the United States, thereby being exempt from these reporting 
provisions. Further, information concerning the volume and value of 
imported boxed lamb cuts that are not sold in portion cut form from 
importers who buy and sell imported boxed lamb cuts not in portion cut 
form, this information is already being obtained by the requirement 
that importers report the prices they receive for their sales of those 
products.
Reporting Imported Lamb on CIF Basis
    Summary of Comments: One commenter suggested that because the 
majority of imported lamb is sold on a delivered basis (CIF or cost-
including-freight) that AMS should require information on imported lamb 
prices to be reported on a CIF basis. To report this information on an 
Ex-Dock basis (cost of the product at the dock not including freight 
charges) as proposed, the commenter argued, freight would have to be 
deducted. And, since freight is different for each sale, it would 
impose a tremendous burden. The commenter further cited the Ocean 
Shipping and Reform Act, effective May 1, 1999, to assert that specific 
freight costs may not be available to importers.
    Agency Response: This issue has been resolved, as AMS will not 
require the reporting of information on the purchases of imported lamb 
carcasses or imported boxed lamb cuts.
Reporting Exported Boxed Beef
    Summary of Comments: AMS received 9 comments regarding boxed beef 
cuts exports. Three commenters supported the reporting of exported 
boxed beef cuts but expressed concern about maintaining confidentiality 
while publishing export boxed beef information.
    Six commenters opposed the reporting of export boxed beef cuts. 
They argued that export boxed beef products were proprietary in nature 
and were often produced for specific foreign markets and reporting 
sales of boxed beef for export would do irreparable harm to the export 
trade. They further argued that no other major beef-exporting nation is 
required to report such information. One commenter expressed the 
opinion that AMS was simply confusing Sec. 201 of the Act which calls 
for beef export sales to be reported under the Foreign Agricultural 
Service's Export Sales Reporting Program with a legislative mandate to 
report export boxed beef prices. Others cited a lack of clear 
legislative mandate for export boxed beef reporting.
    Agency Response: Section 223 of the Act requires each packer 
processing boxed beef to report information on total boxed beef sales 
and does not distinguish between domestic and export sales (emphasis 
added). AMS believes that export sales of boxed beef is a significant 
and growing segment of the U.S. beef industry and its reporting is 
required to provide transparency to the market. However, with regard to 
concerns raised by commenters regarding the release of information that 
would harm U.S. entities interests in export markets, AMS will not 
report information on those proprietary cuts that would compromise the 
identity or confidentiality of those persons or entities reporting.
Reporting Imported Boxed Beef
    Summary of Comments: Two commenters suggested that imported boxed 
beef cuts should be covered under mandatory price reporting and cited 
the inclusion of imported lamb as justification.
    Agency Response: The Act does not authorize the collection of 
information on imported boxed beef. As stated in Sec. 223 of the Act, 
packers are only required to report information on boxed beef sales. 
Although Sec. 923 of the Act does provide for the collection of certain 
information by the Secretary on the imports of beef, beef variety 
meats, and cattle, the Secretary has assigned the responsibility for 
the collection of this information and administration of this section 
of the Act to the USDA's Animal and Plant Health Inspection Service and 
Food Safety and Inspection Service. They are implementing this section 
of the Act by separate actions, apart from this final regulation.

Comments Relating to Branded Products

Reporting Branded Products
    Summary of Comments: AMS received 15 comments on reporting 
information on branded products. Only one comment was supportive of 
AMS's proposal. However, the commenter felt that branded products 
should only be included when they became more standardized and less 
proprietary. The remaining 14 commenters opposed the reporting of 
branded beef products. Most of these commenters referred to the 
``intent'' of Congress as justification for exemption of branded 
products. They cited the Senate Agriculture Committee report language 
that accompanied the authorizing legislation that stated, ``The 
Committee * * * does not intend that individual branded products will 
be reported.''
    Also, the majority of the commenters expressed the opinion that 
branded products were not comparable to other cuts because of the 
addition of value due to the method of preparation and other services 
rather than the value associated with inherent product characteristics. 
Several commenters stated that those value added services are 
proprietary and reporting such proprietary information would 
disadvantage large and small packers alike, forcing the industry back 
to a commodity business at the expense of the producer and consumer.

[[Page 75479]]

    Agency Response: Upon further review of the requirements proposed 
in Sec. 57.103 and Sec. 57.303 of the proposed rule for reporting sales 
of branded boxed beef and lamb, the language in Sec. 59.103 and 
Sec. 59.303 of this final rule has been amended to require the 
reporting of only those branded products produced and marketed on their 
quality, yield, or breed characteristics or boxed beef cuts produced 
and marketed under one of USDA's Meat Grading and Certification Branch, 
Certified Beef programs. These products are not unique to any one 
packer and can be produced by anyone in the industry. These sections no 
longer require the mandatory reporting of branded products where the 
brand is exclusive to a packer.
    AMS is developing formats for those reports it intends to publish 
as a result of mandatory price reporting. These reports will be made 
available as a part of the educational and outreach component being 
developed by AMS to facilitate the transition from voluntary market 
news reporting to mandatory market news reporting during the period 
between publication of this final rule and its effective date. In 
creating these reports, AMS is taking the necessary steps to ensure 
confidentiality of the source data as required by the Act. Brand names 
reported to AMS will not be disclosed but will only be used to identify 
branded boxed beef and lamb cuts for aggregation into branded 
categories in the published reports.

Comments Relating to Specific Provisions of the Act

Mandatory Reporting Implementation Time Schedule
    Summary of Comments: AMS received 22 comments concerning the 
mandatory price reporting implementation time schedule. Fourteen of 
these commenters favored implementation without delay, arguing that 
mandatory price reporting was a necessary reform that should be adopted 
as expeditiously as possible. They opposed extending the comment period 
beyond the timeframe established by the Act. Some commenters requested 
a 90-day extension to the comment period. They contended that the 
problems in the proposed rule could only be addressed by a re-proposal 
of the entire regulation. One commenter argued that, since AMS had not 
provided enough meaningful details of how it intended to utilize 
collected information while protecting confidentiality, it had not 
abided by the Administrative Procedure Act which calls for public 
notice and comment regarding the terms of regulation. Two commenters 
specifically requested that the boxed beef portion of the rule be 
stayed until problems they perceived could be addressed.
    Agency Response: Section 941 of the Act provided a 30-day comment 
period for the proposed rule. Nevertheless, with specific regard to 
requests for an extension of the comment period and for AMS to issue a 
re-proposal, AMS does not agree. AMS believes that the information 
obtained through the 703 comments received during the 30-day comment 
period demonstrate adequate public notice and provide sufficient 
information for AMS to base any changes upon. Further, none of the 
comments lead AMS to believe the concerns raised by commenters merit a 
re-proposal of the regulations.
    With regard to the concern raised by the commenter concerning 
compliance with the Administrative Procedure Act, this program and all 
of its provisions are issued consistent with the provisions of that 
Act.
    Further, with regard to concerns raised by commenters that the 
boxed beef portion be stayed until certain problems could be addressed, 
AMS does not agree that the concerns raised by commenters merit a 
reproposal and has incorporated necessary changes into this final 
regulation.
Reporting by Company
    Summary of Comments: Two commenters recommended that AMS change the 
required reporting by individual plant to reporting by a company as a 
whole. The commenters maintained that, while slaughter data for 
individual plants will be available, reporting of animals priced might 
not be. The plant to which the purchased animals will be shipped is not 
known at the time of purchase. For this reason, reported information 
will not always be accurate because changes to the shipping location 
could occur after the required reporting time has passed. The 
commenters were concerned about possible violations to Sec. 252 
``Unlawful Acts'', of the Act as a result.
    Agency Response: AMS does not agree. In the case of cattle and 
swine, the Act defines who is required to report. And, in the case of 
lamb packers and lamb importers, AMS has provided definitions that 
would capture information in a similar manner.
    In the case of cattle, the entity required to report is each cattle 
processing plant that meets the definition in Sec. 221(5) of the Act. 
For swine, it is a swine processing plant that meets the definition in 
Sec. 231(12). For lamb, these regulations state that those entities 
required to report are a lamb processing plant and a lamb importer that 
meet the definitions in Sec. 59.300 of this final rule. Further, 
information reported on a per plant basis provides for the refinement 
of reports to represent regional and Statewide markets, something that 
the reporting by a company, which may have individual plants in many 
States, would not allow for.
Publishing Adjustments
    Summary of Comments: One commenter suggested that AMS publish all 
adjustments made to reported information due to price aberrations that 
would distort published information to the detriment of producers, 
packers, or other market participants. The commenter also suggested 
that AMS provide categories for such adjustments in its published 
reports.
    Agency Response: Section 251(e) of the Act, authorizes the 
Secretary to make reasonable adjustments to information reported by 
packers to reflect price aberrations that the Secretary determines 
would distort the published information to the detriment of producers, 
packers, or other market participants. AMS finds useful purpose would 
be served in publishing categories for such adjustments when the 
information contained in the reports reflects such adjustments, similar 
to what is currently done under the voluntary reporting program.
Annual Reporting of Number of Covered Plants
    Summary of Comments: AMS received one comment suggesting AMS 
publish an annual report on the number of plants required to report 
under mandatory price reporting.
    Agency Response: In the proposed rule and in this final rule, AMS 
included such information in the supplemental sections addressing the 
Agency's Regulatory Impact Analysis, Regulatory Flexibility Analysis 
and Paperwork Reduction Analysis. However, AMS does not intend to 
publish such information annually as the Agency believes that this 
would serve no useful purpose. However, interested individuals could 
always receive such information upon request.
Publishing of Auditing Procedures
    Summary of Comments: AMS received 9 comments requesting specific 
audit procedures for compliance be outlined and published for comment. 
The commenters argued that the Act includes specific provisions for 
what constitutes a reporting violation but the proposed rule offers no 
enforcement procedures. At least 3 of the

[[Page 75480]]

commenters were concerned that inadvertent and unintentional mistakes 
should not constitute a violation but rather only a clear pattern of 
abuse should constitute a violation. They believed that language to 
this effect should be stated in the proposed rule.
    Agency Response: AMS is in the process of hiring auditors and 
developing documented procedures that will be used by AMS auditors to 
ensure compliance with these regulations. Common to many regulatory 
programs, these procedures are internal agency procedures for 
conducting enforcement activities and therefore are not required to be 
published for public comment. With specific regard to concerns raised 
by commenters expressing confusion about what would or would not 
constitute a violation of the Act, Sec. 252 of the Act clearly sets 
forth what actions are violations, and Sec. 253 clearly sets forth the 
enforcement provisions for such violations. Nevertheless, AMS will be 
available to discuss specific enforcement questions and activities with 
those entities required to report to clarify any areas of concern they 
may have.
Penalty Provisions
    Summary of Comments: AMS received 3 comments expressing the view 
that the provision in the Act setting the penalty for violations at 
$10,000 per violation was inadequate and needed to be increased.
    Agency Response: Section 253 of the Act establishes a civil penalty 
of not more than $10,000. However, that section of the Act further 
provides that each day during which a violation continues is to be 
considered a separate violation.
State Preemption
    Summary of Comments: AMS received 3 comments requesting that 
language be placed in the regulations regarding the preemption of State 
mandatory price reporting laws. The commenters believed that the 
omission of such language in the final rule would allow States to 
impose their own mandatory reporting laws.
    Agency Response: Section 259 of the Act provides that no State may 
impose a requirement that is in addition to, or inconsistent with, any 
requirement of the Act with respect to the submission or reporting of 
information, or the publication of such information, on the prices and 
quantities of livestock or livestock products.
    Contained within the supplemental information sections of the 
proposed rule and these final rules are discussions concerning that 
provision of the Act. Even though such language does not appear in the 
regulatory text of this final rule, this does not have an effect on the 
application and enforcement of this provision of the Act.
Expanding the Scope of the Act
    Summary of Comments: AMS received one comment contending that AMS 
had no authority to expand the scope of the Act to include information 
not specified in the Act. The commenter pointed out that under the 
definition of `terms of trade' in Sec. 57.100 of the proposal, AMS had 
added the concept of `priced' to the definition.
    Agency Response: In Sec. 57.100 of the proposed rule, the word 
`priced' was inadvertently included in the definition of `terms of 
trade'. Section 59.100 of this final rule is revised accordingly.
Prices for Cattle
    Summary of Comments: One commenter opposed the inclusion of the 
definition of `prices for cattle' (Sec. 57.101(1) of the proposal) in 
the daily reporting for live cattle section.
    Agency Response: The phrase `prices for cattle' is included in the 
Act. In the proposed rule, AMS provided a definition of the phrase to 
provide further explanation of what information was required to be 
reported. The items included in the definition of `prices for cattle' 
are all essential to the publishing of useful, accurate, and easy to 
understand market reports.
Average Estimated Live Cattle Weight
    Summary of Comments: One commenter opposed the inclusion of the 
term `average' of estimated live weight in the reporting requirements 
for daily cattle in the proposed rule (Sec. 57.101(a)(1)(iv)). The 
commenter contended that this expanded the requirements of the Act and 
added to the already exhaustive reporting requirements.
    Agency Response: The estimated average live weight is required to 
accurately convey the characteristics of a given lot of cattle. The Act 
contemplates the reporting of information required to accurately 
describe the characteristics of a lot of cattle so that the users of 
the information in the published reports could determine the factors 
affecting the price of live cattle. Accordingly, this term is 
consistent with the intent of the Act.
Packer Sold Swine
    Summary of Comments: Under Sec. 57.200 of the proposed rule, one 
commenter objected to the inclusion of the definition of `packer sold 
swine' in the regulatory text. The commenter argued that the inclusion 
of `packer sold swine' was not authorized by the Act.
    Agency Response: A definition of the term `packer-owned swine' 
appears in the Sec. 231(14) of the Act.
State of Origin
    Summary of Comments: One commenter objected to the addition of 
`state of origin' to the regulation arguing that it constitutes an 
``impermissible'' extension of the statutory authorization.
    Agency Response: The Act directs the Secretary to publish collected 
information on a national, and a regional or statewide basis 
(Sec. 251(d)). The `state of origin' is required for AMS to be able to 
report information on a regional or statewide basis and is consistent 
with the intent of the Act.
Reporting Delayed Pricing Purchases
    Summary of Comments: With respect to pricing that is determined on 
a delayed basis, one commenter objected to the inclusion of the 
sentence ``The packer shall report information on such purchases on the 
first reporting day or scheduled reporting time on a reporting day 
after the price has been determined'' in Sec. 57.202(b)(4) of the 
proposal as it did not appear in the Act.
    Agency Response: Inclusion of this sentence was necessary to 
specify when purchases with delayed pricing are to be reported and is 
consistent with the intent of the Act.

Comments Relating to Reporting Procedures

Reporting Input Forms
    Summary of Comments: AMS received 109 comments referencing the 
proposed mandatory reporting forms to be used by packers when 
submitting required information. However, none of the comments AMS 
received specifically addressed issues relating to the format or design 
of the forms but rather used the forms as a venue to argue for or 
against the inclusion of reporting requirements. A few of the 
commenters expressed concern over some of the information requested in 
the forms (including state of origin, boxed beef box count, and buyer 
destination) suggesting that such information was either not authorized 
by the Act or was not pertinent. Several commenters requested 
clarification of what was being asked for on the forms. Other 
commenters suggested that AMS provide procedural guidelines explaining 
how and when information was to be reported on the forms. Many of the 
commenters used the forms to express concerns including lot

[[Page 75481]]

aggregation, inclusion of cows under mandatory reporting, and reporting 
exports of boxed beef and imports of boxed lamb.
    AMS received 19 comments that raised issues with reporting 
requirements presented on various forms. Specific comments were 
received that took issue with reporting requirements found on the 
following forms: LS-113 Live Cattle Daily Report (current established 
prices), 15 comments; LS-114 Live Cattle Daily Report (committed and 
delivered cattle), 8 comments; LS-115 Live Cattle Weekly Report 
(forward contract and packer-owned), 6 comments; LS-116 Live Cattle 
Weekly Report (formula purchases), 4 comments; LS-117 Cattle Premiums 
and Discounts Weekly Report, 2 comments; LS-126 Boxed Beef Daily 
Report, 19 comments; LS-118 Swine Prior Day Report, 16 comments; LS-119 
Swine Daily Report, 17 comments; and LS-121 Live Lamb Daily Report 
(current established prices), 3 comments.
    Agency Response: AMS has previously responded to these comments on 
matters of procedural clarification, simplification, and further 
definition of terms elsewhere in this discussion. AMS has redesigned 
the reporting forms in this final rule to make them more representative 
of the electronic format required for submission of all information 
under mandatory reporting. AMS has also included written guidelines at 
the end of the regulatory text in the final rule on how to those 
required to report information should complete the information for the 
mandatory reporting forms (Appendix D).
Published Report Formats
    Summary of Comments: AMS received 23 comments addressing the issue 
of the format that reports published by AMS would take as a result of 
mandatory price reporting. Specifically, commenters wanted assurances 
that the information would be presented in a form readily 
understandable to users. Seven of these commenters wanted AMS to 
include the new report formats in the final rule. They stressed that 
the reports should be understandable with information overload avoided 
whenever possible. Two of the commenters wanted AMS to provide some 
sort of connection between the current voluntary-based reports and 
their mandatory-based counterparts for analysis of historical 
relationships. The remaining 9 commenters wanted the new reports to be 
available on the Internet in an archived form for up to 2 years. These 
same commenters also recommended that the reports be accessible by 
telephone, facsimile, Internet, printed media, electronic broadcast 
media (radio and television), and through private information 
providers.
    Four of the comments AMS received on this issue were opposed to 
publishing the information in any form. They argued that mandatory 
price reporting would generate a vast array of useless data that could 
not be published in any usable format. Further, they argued that 
mandatory price reporting would promote confusion in the marketplace.
    Agency Response: AMS is developing the formats for those reports it 
intends to publish as a result of mandatory price reporting. 
Demonstrating the format for these reports will be a part of the 
educational and outreach component being developed by AMS to facilitate 
the transition from voluntary market news reporting to mandatory market 
news reporting during the period between publication of this final rule 
and its effective date.
    In response to the availability of different types of reports, the 
Act prohibits AMS from charging fees for information published as a 
result of mandatory price reporting (Sec. 254). It is AMS's intention 
to continue to provide information in a wide array of formats, 
especially electronic formats that are as easily accessible to users as 
funding will permit.
    In response to comments opposed to the publishing of information in 
any form, development of this program is mandated by the Act. Further, 
AMS believes that the Agency will be able to publish information in a 
useable format and in a manner which will be useful to market 
participants, thereby actually decreasing confusion in the marketplace.
Pre-Testing of Computer System
    Summary of Comments: AMS received one comment expressing concern 
that the computer systems needed to process the information collected 
under mandatory price reporting should be pre-tested during a pre-
implementation phase.
    Agency Response: AMS has planned a pre-implementation testing phase 
of the computer systems necessary to process the information collected 
under mandatory price reporting to ensure that delays and inaccuracies 
do not occur. Several packers have agreed to participate in the tests.
Reporting Changes, Adjustments and Cancellations
    Summary of Comments: AMS received 2 comments requesting that 
procedures be provided in the final rule for how or if packers would 
report changes or cancellations to sales already reported to AMS. AMS 
received one comment requesting that AMS provide clarification on 
whether packers are required to report adjustments in the reported 
amount of payment made in the time between the filing of reports and 
when the producer receiving payment is actually paid.
    Agency Response: AMS understands that it is normal practice in the 
beef industry for adjustments to be made to the original boxed beef 
sales agreement prior to the product being shipped. Often, quantities 
of product are added to the original order, products are substituted, 
or the order is cancelled altogether. Under the current voluntary 
reporting program, AMS does not change a published report to reflect 
price adjustments beyond the next report because of the confusion such 
a change creates. This policy will continue under mandatory price 
reporting.
    Accordingly, packers and importers are not expected to report price 
and quantity adjustments made to sales already reported to AMS after 
the required reporting time has passed. However, it is important to 
note that this mandatory program of information contains two separate 
and distinct functions. Section 255(a)(2) of the Act requires packers 
to maintain such records or other information as is necessary to verify 
the accuracy of the information reported. Further, Sec. 252(4) of the 
Act defines the reporting of information in a manner that demonstrates 
a pattern of significant variance in accuracy when compared with the 
actual information as a violation. Therefore, packers and importers 
should consider these provisions of the Act in maintaining and 
reporting information.
Reporting Formula and Forward Contract Purchases
    Summary of Comments: AMS received one comment requesting 
clarification on when a formula or forward contract based transaction 
is to be reported if the price is not known until the date shipped.
    Agency Response: As proposed in Sec. 57.101 of the proposed rule 
and published in this final rule in Sec. 59.101 under ``type of 
purchase'', formula marketing arrangements and forward contract 
transactions are to be reported

[[Page 75482]]

on the date when the price is agreed upon by the buyer and seller. If 
the price is not determined until the date of shipment, then that is 
when the information should be reported. AMS finds that further 
clarification is not needed in these regulations.
Reporting by Class and Weight
    Summary of Comments: AMS received 2 comments suggesting that AMS 
publish livestock information by class and weight in order to let 
producers know what weight and class of livestock were in most demand.
    Agency Response: AMS agrees. AMS will report livestock separately 
by class and weight and by other factors that are also a price 
determining factor.

Comments Relating to Other Issues

Institutional Meat Purchasing Specifications
    Summary of Comments: AMS received 13 comments concerning the 
inclusion of boxed beef and lamb cuts that are not cut in conformance 
with the Institutional Meat Purchasing Specifications (IMPS). Three 
commenters opposed reporting only those beef and lamb cuts that conform 
to IMPS. They expressed the view that, unless IMPS is kept current with 
industry cutting practices, new value-added cuts styles would go 
unreported and producers would have no way to monitor changes in the 
industry. Ten commenters supported only the reporting of beef and lamb 
cuts that conformed to IMPS. These commenters contended that the 
majority of the beef and lamb cuts they produce do not conform to IMPS 
and questioned whether AMS could include this information in a 
published report in a meaningful manner. Further, they argued that the 
uniqueness of many of these items would prevent AMS from being able to 
maintain the confidentiality of the reporting packer. If AMS could not 
publish this information while maintaining confidentiality, they reason 
that packers should be exempt from reporting such beef and lamb cuts.
    Agency Response: Section 223 of the Act requires that 
representatives of packer processing plants report information on total 
boxed beef sales. Exempting or limiting reporting to IMPS cuts would 
not be consistent with the intent of the Act. Non-IMPS cuts that are 
traded by a sufficient number of packers or importers can be 
incorporated into published reports while maintaining the 
confidentiality of the reporting entities and providing market 
participants with timely and pertinent information.
Educational Component
    Summary of Comments: Seven commenters suggested AMS develop an 
educational component in conjunction with mandatory price reporting in 
order that users could better understand and utilize the new 
information collected.
    Agency Response: Education is key to the successful implementation 
of mandatory price reporting. Accordingly, AMS is already planning to 
institute a program of education and outreach after publication of this 
final rule and before its implementation to ensure all market 
participants understand the different aspects of the new program. 
Further, AMS plans to develop a guide that will be available to the 
public that will explain the mandatory market news reports to help all 
users to understand and utilize the information published.
    AMS will work with industry groups, educators, news media, and 
individuals in carrying out our objective to educate market 
participants about this program and will encourage other interested 
groups to assist us in furthering our commitment to this educational 
and outreach process.

Comments Relating to Auctions

Reporting of Auction Purchases
    Summary of Comments: AMS received 44 comments that concerned the 
burden created by the required reporting of livestock purchased through 
auctions markets, specifically for purchases of cows and bulls. Two of 
these comments consisted of a total of 40 identical form letters. The 
commenters contended that most purchases of livestock in auctions 
markets occurred on a one-head per lot basis and requiring the 
reporting of each lot would greatly increase the reporting burden being 
placed on them by mandatory reporting. They argued further that 
purchases from auction and terminal markets were already in the public 
domain and should therefore be exempt from mandatory price reporting. 
Several other commenters said that they had no system in place to 
distinguish between purchases from auctions and purchases from direct 
sources.
    Agency Response: As already discussed earlier in this section, AMS 
has clarified that purchases of livestock through auction markets are 
not required by this final rule. As auction purchases are made in an 
open, public setting between one seller and many buyers, auction 
purchases do not meet any of the types of purchases defined by the Act 
as a ``type of purchase'' (Sec. 221(8)). Accordingly, packers required 
to submit information under mandatory price reporting will not be 
required to report information on transactions of livestock purchased 
at auction markets by either salaried employees of a packer or a person 
that buys on commission for a packer. However, livestock purchased by a 
packer from a livestock dealer, a purchase between one buyer and one 
seller not in an public setting, must be reported because this 
constitutes a negotiated trade which is defined by the Act as a ``type 
of purchase'' reportable under mandatory reporting. Accordingly, 
packers must institute systems to distinguish between purchases from 
auctions and purchases from direct sources for the purposes of 
mandatory reporting.

Comments Relating to Definitions of Terms

Clarification of ``Committed''
    Summary of Comments: Six commenters recommended clarification of 
the term ``committed'' found in Sec. 57.20 of the proposed rule. The 
commenters pointed out that this definition conflicted with the 
definition found in Sec. 57.100 of the proposed rule for ``cattle 
committed'' which is defined in the Act.
    Agency Response: AMS agrees with the concern of the commenters. In 
the final rule, AMS has removed the definition for ``committed'' under 
Sec. 59.30 and has replaced it with a separate definition for ``swine 
committed'' under Sec. 59.200 and is defined as meaning swine scheduled 
to be delivered to a packer within the 14-day period beginning on the 
date of an agreement to sell the swine. The 14-day requirement 
corresponds to Sec. 232(c)(1)(C)(iii) of the Act which calls for the 
reporting of packer purchase commitments for each of the next 14 days.
Clarification of Negotiated Purchase Definition
    Summary of Comments: Five commenters requested clarification of the 
definitions for ``negotiated purchase'' and ``negotiated sale'' under 
Sec. 57.20 of the proposed rule. Specifically, they expressed concern 
that both terms seem to include the requirement that there be an 
agreement on a delivery date at the time of buyer-seller interaction. 
They pointed out that it is not common industry practice to agree on a 
delivery date on the date the base price is negotiated.
    Agency Response: These terms are defined by the Act in Sec. 212.

[[Page 75483]]

Accordingly, for the purposes of this program, a negotiated purchase or 
sale is a combination of pricing and scheduling.
Definition of Lot
    Summary of Comments: Two commenters suggested that the term `lot' 
be defined.
    Agency Response: The term ``lot'' is defined in the Act and the 
definition included in the proposed rule under Sec. 57.20. ``The term 
``lot'' means a group of one or more livestock that is identified for 
the purpose of a single transaction between a buyer and a seller.''
Definitions of Premium and Discount
    Summary of Comments: Two comments were received requesting 
clarification of the terms ``premium'' and `discount'. One commenter 
expressed concern that ``premium'' was defined as being expressed in 
terms of dollars per one hundred pounds. They questioned how a premium 
not defined in terms of dollars per one hundred pounds would be 
reported. The other commenter questioned the definitions of ``premium'' 
and ``discount'' in reference to swine. The commenter pointed out that 
terms quality grade and yield grade in the definitions pertain to 
cattle and lambs only, not swine. The commenter suggested that the 
definition be corrected to reflect this.
    Agency Response: The definition of ``premium'' states that the 
premium is expressed in dollars per one hundred pounds. As this is the 
only meaningful way for AMS to standardize the information received and 
report meaningful information, premiums and discounts established on 
other basis must be converted to a dollar per hundred pounds basis 
prior to reporting to AMS.
    AMS agrees with the second commenter. As a result, the definition 
of the term ``discount'' applicable to swine in Sec. 59.30 is corrected 
in this final rule to read, ``The term ``discount'' means the 
adjustment, expressed in dollars per one hundred pounds, subtracted 
from the base price due to weight, quality characteristics, yield 
characteristics, livestock class, dark cutting, breed, or dressing 
percentage.'' The definition of the term `premium' under Sec. 59.30 is 
changed in this final rule to read, ``The term ``premium'' means the 
adjustment, expressed in dollars per one hundred pounds, added to the 
base price due to weight, quality characteristics, yield 
characteristics, livestock class, and breed.''
Definition of Imported
    Summary of Comments: Four commenters requested that a definition of 
`imported' be added to clarify reporting requirements for livestock and 
livestock products.
    Agency Response: AMS agrees. In Sec. 59.101 in this final rule, AMS 
included a definition for imported: ``The term ``imported'' means 
livestock that are fed to slaughter weight outside of the 50 States or 
livestock products produced outside of the 50 States.''
Definition of Priced
    Summary of Comments: One commenter requested further explanation of 
the term ``priced'' under Sec. 57.20 of the proposed rule. The 
commenter wanted the definition to define the moment at which a 
transaction is considered to be ``priced''.
    Agency Response: The definition of ``priced'' in Sec. 57.20 of the 
proposed rule is revised in this final rule to clarify when a 
transaction is deemed ``priced''. The definition of ``priced'' in 
Sec. 59.30 of this final rule is revised to read ``the time when the 
final price is determined either through buyer-seller interaction and 
agreement or as the result of some other price determining method.''
Definition of Purchased
    Summary of Comments: Two commenters wanted further definition of 
the term ``purchased'' to define the moment when livestock or livestock 
products are considered to be ``purchased''.
    Agency Response: AMS believes the definition contained within the 
proposed rule for the term ``purchased'', ``The term ``purchased'' 
means the agreement on a price, or the method for calculating a price, 
determined through seller-buyer interaction and agreement'', does 
convey that livestock or meat is considered ``purchased'' when either 
the price or the mechanism for determining the price is agreed upon by 
the buyer and seller. Accordingly, the definition has remained 
unchanged in this final rule.
Definition of Origin
    Summary of Comments: Two commenters recommended that AMS include a 
definition of the term ``origin'' in the final rule. The commenters 
expressed concern that if AMS was asking for country of origin, this 
requirement extended beyond the authority provided in the Act.
    Agency Response: In the final rule, AMS has included a definition 
for the term `origin' under Sec. 59.30 to read, ``The term ``origin'' 
means the State where the livestock were fed to slaughter weight''. 
This requirement was included to allow for aggregation of submitted 
information in a regional or statewide-published report.
Definition of Established
    Summary of Comments: One comment recommended that the term 
`established' be defined. This term is used twice in the proposed rule, 
once under Sec. 57.101(a)(1) and once under Sec. 57.301(a)(1) where the 
requirement for reporting prices, ``* * * established on that day * * 
*'' is listed. The commenters wanted to know when a price was to be 
considered ``established''.
    Agency Response: The language in Sec. 57.101(a)(1) of the proposed 
rule mirrors the Act and identical language was used in 
Sec. 57.301(a)(1) of the proposed rule for uniformity. AMS has added a 
definition for the term `established' under Sec. 59.100 and Sec. 59.300 
in this final rule to read; ``The term `established' when used in 
connection with prices means that point in time when the final price is 
determined.''
Cattle Committed and Committed Definition Discrepancy
    Summary of Comments: Four commenters pointed out what they believed 
to be inconsistencies between the terms `cattle committed' 
(Sec. 57.100) and `committed' (Sec. 57.20) contained within the 
proposed rule.
    Agency Response: AMS agrees with the concerns raised by commenters. 
AMS has removed the definition of the term `committed' from Sec. 59.30 
in the final rule.
Clarification of Formula Arrangement and Forward Contract
    Summary of Comments: AMS received 3 comments requesting further 
clarification of the definition for the terms `formula marketing 
arrangement' and `forward contract' under Sec. 57.100 of the proposed 
rule. They argued that the definitions for `formula marketing 
arrangement' and for `forward contract' are not mutually exclusive.
    Agency Response: AMS does not agree. The definitions of `formula 
marketing arrangement' and `forward contract' in Sec. 59.100 of this 
final rule reflect the definitions of these terms contained in the Act. 
A `formula marketing arrangement' refers to an advance commitment for 
livestock or livestock products under which the price is determined at 
a future date following slaughter or manufacture. A `forward contract' 
refers to an agreement to purchase livestock or livestock products 
under which the price is

[[Page 75484]]

determined in advance of slaughter or manufacture.
Definition of Branded
    Summary of Comments: Three comments were received requesting 
clarification of the term `branded' as defined for cattle in 
Sec. 57.100 and for lambs in Sec. 57.300 of the proposed rule. One 
commenter noted that the definition was very broad and would include 
virtually all boxed beef and lamb cuts.
    Agency Response: AMS agrees that the definition of `branded' in the 
proposed rule requires further clarification to accurately reflect what 
AMS requires to be reported. Accordingly, in this final rule, the 
definitions for the term `branded' in Sec. 59.100 and Sec. 59.300 have 
been revised. In Sec. 59.100, the definition has been revised to read: 
``The term `branded' means boxed beef cuts produced and marketed under 
a corporate trademark (for example, products that are marketed on their 
quality, yield, or breed characteristics), or boxed beef cuts produced 
and marketed under one of USDA's Meat Grading and Certification Branch, 
Certified Beef programs.'' In Sec. 59.300, the definition has been 
revised to read: ``The term `branded' means boxed lamb cuts produced 
and marketed under a corporate trademark (for example, products that 
are marketed on their quality, yield, or breed characteristics), or 
boxed lamb cuts produced and marketed under one of USDA's Meat Grading 
and Certification Branch, Certified programs.''
    AMS believes this clarification should satisfy the concerns of the 
commenters.
Definition of Boxed Beef
    Summary of Comments: AMS received 4 comments requesting that AMS 
provide a definition of the term `boxed beef' to clarify its use in the 
regulations.
    Agency Response: This comment has merit. In the final rule, under 
Sec. 59.100, AMS has included a definition for `boxed beef' as follows: 
``The term `boxed beef' means those carlot-based portions of a beef 
carcass including fresh primals, subprimals, cuts fabricated from 
subprimals (excluding portion-control cuts such as chops and steaks 
similar to those described in the portion cut products contained within 
the IMPS for Fresh Beef Products Series 100), and thin meats (e.g. 
inside and outside skirts, pectoral meat, cap and wedge meat, and blade 
meat) not older than 14 days from date of manufacture; fresh ground 
beef, beef trimmings, and boneless processing beef not older than 7 
days from date of manufacture; and frozen beef trimmings and boneless 
processing beef not older than 60 days from date of manufacture.''
    AMS believes this definition is consistent with the industry's use 
of the term and provides the clarification and specificity requested by 
the commenters.
Definition of Packer Owned Cattle
    Summary of Comments: AMS received one comment questioning the 
definition for ``packer owned cattle''. The commenter took issue with 
the inclusion in the definition of the 14-day period prior to slaughter 
that cattle must be owned by a packer to qualify the cattle as being 
packer owned. The commenter believed that the 14-day timeframe was 
arbitrary and requested an explanation of why the timeframe was set at 
14 days.
    Agency Response: The definition of ``packer owned cattle'' 
including the 14-day requirement in Sec. 59.100 of this final rule 
reflects the definition of ``packer owned cattle'' in Sec. 221(6) of 
the Act.
Definition of Prices for Cattle
    Summary of Comments: One commenter objected to the definition of 
`prices for cattle'. The commenter pointed out that in the definition 
of `prices for cattle', the requirement for expected date of slaughter 
is not known on the date an agreement to purchase livestock is made.
    Agency Response: AMS agrees with the concern raised by the 
commenter. The definition of `prices for cattle' in Sec. 59.100 has 
been revised in this final rule to remove the words `expected date of 
slaughter'.
Definition of Terms of Trade
    Summary of Comments: One commenter expressed concern about the 
definition of `terms of trade'. The commenter argued that the ambiguity 
of the terms `negotiated purchase', `committed', `purchased', and 
`priced' made it impossible to know what exactly is to be reported 
under `terms of trade' and when it is to be reported.
    Agency Response: As previously mentioned, AMS clarified the 
definitions of the terms `purchased', `priced', and `negotiated 
purchase' in Sec. 59.30 and has removed the definition of `committed' 
under Sec. 59.30.
Definition of Packer
    Summary of Comments: One commenter expressed concern over the 
definition of the term `packer'. Specifically, the commenter was 
concerned about the portion of the definition that dealt with the issue 
of cattle processing plants that did not slaughter during the 
immediately preceding 5 calendar years being considered as packers by 
the Secretary's discretion after consideration of the plant's capacity. 
The commenter was opposed to the Secretary having the discretion to 
decide at a later date that a processor could be included under 
mandatory price reporting by this definition.
    Agency Response: Section 221(5) of the Act defines the term 
`packer' and that definition is reflected in Sec. 57.100 of the 
proposed rule and also in this final rule. Section 221(5)(C) in the Act 
states: ``* * * in the case of a cattle processing plant that did not 
slaughter cattle during the immediately preceding 5 calendar years, the 
Secretary shall consider the plant capacity of the processing plant in 
determining whether the processing plant should be considered a packer 
under this chapter.''
Definition of Cattle Type
    Summary of Comments: One commenter suggested changing the 
definition of the term `cattle type' to include heiferettes, Brahmans, 
and Corrientes as inferior classes.
    Agency Response: The term ``cattle type'' is defined in Sec. 221 of 
the Act and the definition in these regulations simply mirrors that 
definition. AMS believes the stated types of cattle provided in the 
definition adequately differentiate the major types of cattle traded in 
the market which are of price determining importance. Accordingly, AMS 
believes no further clarification is necessary in the regulatory text.
Reporting by Purchase Type
    Summary of Comments: One commenter questioned how a packer would be 
able to identify the type of sale given the ambiguities with the 
definitions of `negotiated sale', `formula marketing arrangement', and 
`forward contract' under Sec. 57.20 of the proposed rule.
    Agency Response: As previously discussed in this section, AMS has 
clarified the definitions of these terms in Sec. 59.30 and AMS believes 
this clarification should resolve the concerns raised by the commenter.
Definition of Average Carcass Weight
    Summary of Comments: AMS received 6 comments requesting that the 
terms `weighted average carcass price' and `aggregate weighted average 
carcass price' used in Sec. 57.102(c)(2) & (6) and Sec. 57.302(c)(2) & 
(7) of the proposed rule be defined in the final rule.
    Agency Response: These terms are used in the Act as part of the 
information required to be reported for

[[Page 75485]]

formula purchase cattle. These terms were included in the required 
information for lambs in the proposed rule for uniformity.
    The term `weighted average carcass price' refers to the weighted 
average carcass price of a reportable lot of cattle including 
applicable premiums and discounts. AMS does not believe this term needs 
to be defined in these regulations.
    The term `aggregate weighted average carcass price' was intended to 
provide an overall weighted average carcass price by purchase type for 
all cattle purchased on that reporting day. Upon further review, AMS 
has determined that an overall aggregated weighted average carcass 
price for each type of purchase can be calculated from the information 
required to be reported. For this reason, in this final rule, AMS has 
removed the requirement for `aggregate weighted average carcass price' 
for cattle and lambs under Sec. 59.102(a)(6) and Sec. 59.302(a)(6) 
respectively.
Definition of Swine Forward Contract
    Summary of Comments: Pertaining to Sec. 57.200 of the proposed 
rule, swine definitions, AMS received one comment requesting the 
inclusion of a definition of the term, `forward contract' for swine 
reporting.
    Agency Response: AMS does not agree. Subpart C, Swine Reporting, of 
the proposed rule does not include the term `forward contract' but does 
provide a definition of the term `other purchase arrangement' which 
embodies the concept of a `forward contract'. Providing a definition 
for a swine reporting term that does not exist in Subpart C of the rule 
serves no purpose as the definition of the term `other purchase 
arrangement' covers `forward contract' purchases.
Definition of Net Price and Average Net Price
    Summary of Comments: AMS received 14 comments concerning 
inconsistencies and confusion over the definition of the term `net 
price' in the proposed rule as it compares to the use of the term by 
the Act as well as confusion over why both `net price' and `average net 
price' were requested to be reported by the proposed regulations.
    Agency Response: In the proposed rule, AMS incorrectly defined the 
term `net price' to mean `the total amount paid by a packer to 
producers' instead of the definition provided in the Act as `the total 
amount paid by a packer to a producer'. This definition has been 
corrected to conform to the definition of `net price' in the Act.
    The Act defines `net price' in dollars per hundred pounds of 
carcass weight of swine. This definition is used as the basis for 
reporting average net price, highest net price and lowest net price. 
This average net price is calculated from the total net price and the 
total carcass weight and expressed in dollars per hundredweight. 
Section 57.202 Mandatory Daily Reporting for Swine of the proposed rule 
required that packers would report both net price and average net price 
as well as the highest net price and the lowest net price. Upon further 
review of these requirements and the Act, AMS finds that the same 
information for swine can be obtained by requiring that packers report 
only average net price, highest net price and lowest net price. 
Accordingly, the requirement to report `net price' is removed from 
Sec. 59.202 in this final rule. Likewise, the reporting of `net price' 
has been removed from Form LS-118 Swine Prior Day Report.
Redefining Swine Packer to Not Include the Term Cattle
    Summary of Comments: Two commenters suggested changes to the 
definition of `packer' under Sec. 57.200 of the proposed rule as it 
applies to swine. The commenters pointed out that the word `cattle' was 
used instead of the word `swine' as provided in the Act.
    Agency Response: The commenters are correct. In this final rule, 
AMS has corrected Sec. 59.200 by removing the word `cattle' and 
replacing it with the word `swine'.
Redefining Swine Packer to Include Other Entities
    Summary of Comments: Two commenters suggested additional changes to 
the definition of `packer' under Sec. 57.200 of the proposed rule as it 
applies to swine. One commenter believed that the words ``* * * a 
federally inspected * * *'' should be replaced with ``* * * any plant 
authorized for interstate shipment * * *'' to bring the definition in 
line with proposed federal regulations on interstate shipment of meat. 
The other commenter expressed concern over the phrase ``* * * buying 
swine in commerce * * *'' as at least one U.S. swine slaughtering 
facility is vertically integrated to the point that it technically buys 
no swine and would therefore be exempted and suggested that this 
passage be changed to ``* * * slaughters swine in commerce * * *'' in 
order to include such vertically integrated operations.
    Agency Response: Section 221(5) of the Act defines the term 
`packer' and this definition is reflected in Sec. 59.200 this final 
rule. AMS does not believe that any State inspected facility, affected 
by changes to Federal regulations governing the interstate shipment of 
meat, slaughter at a volume sufficient that they would be covered by 
these regulations. Therefore, the proposed change would not have any 
effect on the information AMS will obtain under this program. To 
respond to concerns regarding vertically integrated operations, AMS 
believes that the entities the commenter is concerned about are already 
covered by the existing definition. Therefore, neither suggestion is 
adopted.
Definition of Swine Packer Purchase Commitments
    Summary of Comments: Three commenters objected to defining `packer 
purchase commitments' under Sec. 57.202(a)(3) of the proposed rule as 
swine scheduled for delivery because committing and scheduling are two 
separate steps in the swine procurement process and are not the same as 
the Act provides.
    Agency Response: The use of the term `packer purchase commitment' 
provided for by the Act, Sec. 232(c)(1) Prior Day Report, sets forth 
the requirement that a packer report packer purchase commitments that 
``* * * shall be equal to the number of swine scheduled for delivery to 
a packer for slaughter for each of the next 14 calendar days.'' 
Accordingly, the use of the term remains unchanged in this final rule 
from the proposal.
Definition of Purchase Data
    Summary of Comments: One commenter expressed concern over perceived 
ambiguity in the definition of `purchase data'. The commenter contends 
that this clause limits packers to only reporting weight.
    Agency Response: As stated in Sec. 231(17) of the Act, `purchase 
data' means all of the applicable data, including weight (if purchased 
live), for swine purchased during the applicable reporting period 
regardless of the expected delivery date, reported by hog class, type 
of purchase, and packer owned swine. Accordingly, applicable data 
includes base price. Similarly, the definition of `slaughter data' as 
stated in Sec. 231(18) of the Act means all of the applicable data, 
including weight (if purchased live), for swine slaughtered by a packer 
during the applicable reporting period regardless of when the price of 
the swine was negotiated or otherwise determined, reported by hog 
class, type of purchase, and packer owned swine. After further 
consideration by the Agency, AMS has

[[Page 75486]]

revised the text in the proposal to include in this final rule that 
applicable data in this instance includes average loin depth because it 
is a major determiner of price in the swine industry.
Definition of Type of Purchase
    Summary of Comments: One commenter expressed concern regarding the 
definition of the term `type of purchase'. The commenter included as an 
example a packer who serves only as a ``custom'' processor of a 
producer's swine and does not take ownership of the swine. The 
commenter wondered how such arrangements would be reported and how 
other new and innovative methods would be reported.
    Agency Response: As defined, `type of purchase' refers only to 
those purchases of swine by a packer from a producer. In the 
commenter's example, the packer never ``purchases'' the swine from the 
producer and therefore would not be required to report that as a 
transaction. AMS does not believe this suggestion merits a change in 
the definition of the term `type of purchase' nor does AMS believe that 
the reporting custom slaughter costs was contemplated by the Act.
Definition of Basis Level
    Summary of Comments: AMS received one comment regarding the term 
`basis level'. The commenter questioned the use of the phrase ``* * * 
adjustment to a future price * * *'' in the definition. The commenter 
argued that the term ``basis'' in the Act seems to refer to the 
difference between the cash price and the futures market price for a 
product. The commenter suggested that ``* * * a future price * * *'' be 
replaced with the term ``* * * a futures market price.''
    Agency Response: AMS does not agree. AMS does not believe the Act 
intended on limiting the definition to a futures market. Accordingly, 
the definition of the term `basis level', defined in Sec. 212(2) of the 
Act, remains unchanged in these final regulations.
Definition of Average Lean Percentage
    Summary of Comments: AMS received one comment pointing out an error 
in the definition of the term `average lean percentage'. The commenter 
pointed out that the last 5 lines of the definition should not have 
been included.
    Agency Response: The commenter is correct. This was in error. The 
definition of `average lean percentage' has been corrected to remove 
the last 5 lines and conform to the use of the term in the Act.
Clarification of Other Market Formula Purchase
    Summary of Comments: One commenter expressed the opinion that the 
definitions for the terms `other market formula purchase' and `other 
purchase arrangement' should be clarified in the final rule.
    Agency Response: These two terms, `other market formula purchase' 
and `other purchase arrangement' are defined in Sec. 221 of the Act and 
the definitions of these two terms in this final rule reflect the 
definitions found in the Act.
Definition of Lamb Packer
    Summary of Comments: AMS received one comment questioning the 
inclusion of lamb processors in the definition of lamb `packer' in 
Sec. 57.300 of the proposed rule. The commenter argued that the 
reporting mandate provided by Congress was never intended to apply to 
prices paid or received by processors of beef and pork. Thus, the 
commenter reasoned that the definition of a lamb packer should not 
apply to lamb processors.
    Agency Response: Section 241 of the Act authorizes the Secretary to 
establish a program of mandatory lamb price information reporting that 
will ``(1) provide timely, accurate, and reliable market information; 
(2) facilitate more informed marketing decisions; and (3) promote 
competition in the lamb slaughtering industry.'' In the beef and pork 
industries, there are no major packer slaughterers that do not also 
process meat and meat products. However, in the lamb industry, this is 
not the case. Not only do major lamb slaughterers not always process 
but also major lamb processors do not always slaughter. It is because 
of this uniqueness of the lamb industry that defining packers to 
include lamb processors as well as slaughterers is critical to AMS's 
ability to provide accurate, reliable and complete market information 
for this sector.

Comments Relating Specifically to Cattle

Reporting of Hot Carcass Yields
    Summary of Comments: Two commenters expressed interest in seeing a 
weekly reporting of average hot carcass yields.
    Agency Response: Estimated carcass dressing percents will be 
collected under mandatory cattle reporting and will be included in a 
weekly-published report.
Reporting Cattle by Price Penalty
    Summary of Comments: Two commenters recommended AMS require packers 
to report the weekly percentages of cattle that are price-penalized by 
penalty characteristic. This would include the percentage of cattle 
that are condemned, the percentage of dark cutters, and the percentage 
of any other characteristics that result in a price penalty.
    Agency Response: This information is not mandated by the Act for 
the purposes of mandatory price reporting and therefore is not listed 
in the information that is required to be reported in this final rule. 
Furthermore, AMS does not publish this information under its current 
voluntary reporting program.
Reporting Details of Cattle Formula Contracts
    Summary of Comments: AMS received 2 comments recommending that AMS 
report all details of cattle formula contracts including all premiums 
and discounts to the base price and any special arrangements. They 
contended that this would provide accurate pricing information to the 
producer.
    Agency Response: This information is required by Sec. 222(d) of the 
Act and Sec. 59.102 of these final regulations. Packers are required to 
report the following information for cattle purchased through a formula 
marketing arrangement: (1) The quantity of cattle; (2) the weighted 
average price paid for a carcass, including all applicable premiums and 
discounts; (3) the range of premiums and discounts paid; (4) the 
weighted average of premiums and discounts paid; (5) the range of 
prices paid; (6) the aggregate weighted average price paid for a 
carcass; and (7) the terms of trade regarding the cattle, as 
applicable.
Reporting of Cattle By-Products
    Summary of Comments: AMS received one comment regarding cattle by-
products. The commenter believed that the omission of cattle by-
products in the proposed rule was an oversight on the part of AMS. The 
commenter argued that the industry relied on cattle by-products 
information and not including them under mandatory price reporting 
would create data quality problems.
    Agency Response: Section 223 of the Act limits reporting of beef 
and products from beef to total boxed beef cuts as defined in this 
final rule (Sec. 59.100). AMS will continue to report cattle by-
products through its voluntary reporting program.

[[Page 75487]]

Boxed Beef Cutout
    Summary of Comments: AMS received one comment expressing the desire 
to see the boxed beef cutout report continue in its current format 
under mandatory price reporting.
    Agency Response: AMS will publish the boxed beef cutout report in a 
format similar to that provided under the current voluntary program and 
that will provide users of the report with the market information in an 
easy to read and understandable format. Interested persons will have a 
chance to comment on the format for this report when AMS makes it 
available during its program of education and outreach between the time 
of publication of this final rule and its implementation date.
Reporting Distressed and Frozen Boxed Beef
    Summary of Comments: AMS received 3 comments requesting that AMS 
drop the requirement to report transactions of distressed and frozen 
boxed beef cuts. In accordance with current industry practice, these 
commenters state that fresh boxed beef cuts are considered to be 
distressed 15 days after the date of manufacture for whole cuts; 8 days 
after the date of manufacture for fresh ground beef, beef trimmings, 
and boneless processing beef; and 60 days after the date of manufacture 
for frozen beef trimmings and boneless processing beef.
    Agency Response: The market for such products varies considerably 
in price and availability of supply. Market reports based on such 
inconsistent markets would be of limited value and, therefore, AMS will 
not collect market information or publish market reports on distressed 
products. Accordingly, the definition of ``boxed beef'' does not 
include distressed product.
Daily Reporting of Formula Purchases
    Summary of Comments: AMS received one comment requesting that the 
required daily reporting of formula purchases be suspended. The 
commenter argued that the proposed rule's requirement for both daily 
and weekly reporting of formula purchases is redundant. Further, the 
commenter felt that it would be impossible to represent a clear picture 
of the transactions on a daily basis, as packers do not use uniform 
formula arrangements.
    Agency Response: AMS does not agree. The daily and weekly reporting 
of this information provides valuable information to the industry. And, 
in accordance with Sec. 222 of the Act, this final rule requires daily 
and weekly reporting of formula purchases of cattle.

Comments Relating Specifically to Swine

Reporting Transactions Made Between Required Times
    Summary of Comments: AMS received 2 comments requesting that the 
procedure for reporting transactions occurring between 2 p.m. and 12 
midnight Central Time be clarified so that they knew what would be 
reported and when it would be reported.
    Agency Response: Transactions occurring between 2 p.m. and 12 
midnight Central Time are not to be reported on the daily morning or 
afternoon reports for swine (Sec. 59.202(b) & (c)). They are to be 
included as part of the prior day swine report as described in 
Sec. 59.202(a) of this final rule.
Reporting Swine to a Standard
    Summary of Comments: AMS received 14 comments regarding the issue 
of publishing live swine price information to a uniform standard. 
Twelve of these commenters agreed that publishing live swine price data 
to a uniform standard would lessen confusion and mistrust in the 
marketplace. However, they expressed concern over the methodology that 
would be employed to accomplish the conversion of each reporting 
packer's information to the standard. Specifically, they questioned 
using the Standardized Fat Free Lean Index prior to its being held to 
adequate review (In a separate action, through AMS press release, AMS 
published for comment on March 13, 2000, the Standardized Fat Free Lean 
Index). The remaining 2 comments expressed complete opposition to any 
attempt to publish to a standard. One commenter argued that such a move 
would hinder innovation by the packing industry by prohibiting the 
incorporation of technological advances in lean measurement devices. 
The other commenter believed that accuracy would be compromised and 
that producers would not be able to accurately make a conversion from 
published prices to the commenter's system.
    Agency Response: Section 232 of the Act directs the Secretary to 
correlate information provided by packers to convert the carcass 
measurements or lean percentage of the swine of each individual packer 
to a common percent lean measurement. AMS is not aware of any other 
uniform standard besides the Standardized Fat Free Lean Index for 
reporting live swine information that better achieves this objective of 
the Act.
    AMS received comments on the Standardized Fat Free Lean Index and 
is in the process of evaluating them. AMS will use the index for 
reporting live swine information and will adopt any change to the index 
that might arise for the request for comments. Further AMS has added an 
additional measure of muscling, ``average loin depth'', to those 
factors to be reported by packers required to report. AMS believes the 
addition of this measure should aid producers in understanding the 
information reported by packers and published by AMS.
Reporting of Pork Cuts
    Summary of Comments: AMS received 11 comments supporting the 
inclusion of mandatory reporting of domestic and export wholesale sales 
of boxed pork cuts consistent with the reporting requirements for beef 
and lamb.
    Agency Response: The Act does not authorize a mandatory program of 
reporting for pork cuts. Therefore, they are not included in this final 
rule.
Reporting of Producer Identification Numbers
    Summary of Comments: Seven comments were received expressing an 
interest in requiring packers to report producer identification numbers 
as part of the information collected under mandatory price reporting. 
Commenters agreed that this would provide for more efficient 
investigation and monitoring of preferential pricing treatment for AMS 
and other USDA departments.
    Agency Response: This information is not necessary for the purpose 
of mandatory price reporting as provided by the Act. The Act calls for 
information for all transactions covered by mandatory reporting to be 
provided by individual lot. Lot identification numbers, required under 
the rule, are sufficient to ensure compliance with this provision.
Reporting of Net Price
    Summary of Comments: AMS received one comment expressing the belief 
that the requirement for packers to report net price information for 
the prior day swine report was inappropriate and meaningless. The 
commenter argued that net price is only material to individual 
producers.
    Agency Response: Publishing net price information allows producers 
to accurately compare the actual price they received for their 
livestock with the aggregated price for other producers. Using base 
prices for such a comparison would not provide the same level of 
accuracy unless all details of the transactions are known.

[[Page 75488]]

Reporting by Packers to Producers
    Summary of Comments: Three comments were received expressing the 
desire to see AMS require the reporting to producers by packers of the 
raw data utilized by the packers when calculating the percent lean of 
hogs. The commenters believed that this would allow producers to 
compare their transaction results with AMS's publicly reported 
information.
    Agency Response: The Act does not provide for the reporting of such 
information and it is therefore not required by this final rule.
Reporting Prices for Packer-Owned Swine
    Summary of Comments: Two comments were received requesting that AMS 
require the reporting of prices for packer-owned swine to be included 
in published reports.
    Agency Response: Section 232(b)(2) of the Act prohibits the 
collection of price information on packer-owned swine and it is 
therefore not required by this final rule.
Reporting of Merit Premiums
    Summary of Comments: AMS received 7 comments expressing a desire to 
see daily reporting of carcass and non-carcass merit premiums. The 
commenters believed that this information was important to producers.
    Agency Response: Section 232(d) of the Act requires only the weekly 
reporting of non-carcass merit premiums in effect during the prior 
slaughter week. Further, the Act does not provide for the reporting of 
carcass merit premiums.
Publishing of Formula Contract Information
    Summary of Comments: Five commenters suggested that the formula 
contract information should be categorized and published by AMS.
    Agency Response: These comments have merit. To ensure producers, 
packers and other market participants can readily understand the 
information published by AMS, AMS will categorize formula contract 
information in published reports. AMS will make these categories 
available as a part of its program of education and outreach after 
publication of this final rule and before its implementation date.
Reporting Committed Swine
    Summary of Comments: AMS received 4 comments expressing concern 
over the requirement to report swine committed to the packer for the 
next 14 days (Sec. 57.202(a)(3) of the proposed rule). The commenters 
could not see the value of such information and believed that reporting 
it could have a detrimental effect on the market.
    Agency Response: Required by Sec. 232 of the Act, the reporting the 
volume of swine committed to packers over each of the next 14 days will 
provide the industry with important demand side information for the 
market as a whole without disclosing proprietary information on any 
individual packer.

Comments Relating Specifically to Lambs

Reporting of Lamb and Lamb Products
    Summary of Comments: AMS received 11 comments on this issue. Two of 
the comments were opposed to the inclusion of lamb and lamb products 
under mandatory price reporting. These commenters believed that AMS had 
exceeded the intent of Congress by making the lamb reporting 
requirements more comprehensive than the reporting for beef or pork. 
They stressed that Congress did not include lamb and lamb products 
reporting in the Act because it would prove too burdensome to the lamb 
industry. However, 9 commenters strongly supported the inclusion of 
lamb and lamb products reporting authorized but not mandated by the 
Act. They argued that such a program of mandatory lamb price reporting 
was vital to the economic stability of the domestic lamb industry and 
that the requirements in the proposed rule for lamb reporting were 
reasonable and in compliance with the intent of the Act.
    Agency Response: Section 241 of the Act authorizes the Secretary to 
establish a program of mandatory lamb price information reporting that 
will ``(1) provide timely, accurate, and reliable market information; 
(2) facilitate more informed marketing decisions; and (3) promote 
competition in the lamb slaughtering industry.'' If the Secretary takes 
such action, an opportunity for comment on the proposed regulations 
must be provided. Under this authority, a program of mandatory lamb 
price reporting was included in the proposed rule and the opportunity 
for comment was provided. Additionally, AMS does not believe that it 
has made these requirements more comprehensive than the reporting for 
cattle or swine, but does believe it has met the intent of Congress and 
is operating under the authority of the Act.
Reporting of Wool and Pelt Information
    Summary of Comments: Five commenters supported the continued 
reporting of prices for wool and pelts.
    Agency Response: AMS will continue the reporting of the wool and 
pelts markets under the current system of voluntary reporting.
Reporting of Boxed Lamb Cuts
    Summary of Comments: AMS received 4 comments in opposition to the 
required reporting of boxed lamb cuts. One of the commenters took the 
position that boxed cut information is irrelevant to producers. Another 
expressed concern over the reporting of distressed sales. Two remaining 
commenters were concerned that, with all trades being reported, the 
published price ranges would be inflated to the point of making the 
information useless.
    Agency Response: AMS does not agree that the reporting of boxed 
lamb cut information is irrelevant to producers. The value of a lamb 
carcass is based on the prices received for boxed lamb cuts. AMS 
believes the collection and reporting of this information is consistent 
with the stated purpose of the Act to provide information which would 
improve the price reporting services of the Department of Agriculture.
    With respect to concerns over the reporting of distressed product 
sales, as previously mentioned, in Sec. 59.300 of this final rule, AMS 
has provided a definition of the term `boxed lamb' as follows: ``The 
term `boxed lamb' means those carlot-based portions of a lamb carcass 
including fresh primals, subprimals, cuts fabricated from subprimals 
(excluding portion-control cuts such as chops and steaks similar to 
those portion cut items described in the Institutional Meat Purchase 
Specifications (IMPS) for Fresh Lamb and Mutton Series 200, United 
States Department of Agriculture, Agricultural Marketing Service, 
Livestock and Seed Program), and thin meats (e.g. inside and outside 
skirts, pectoral meat, cap and wedge meat, and blade meat) not older 
than 14 days from date of manufacture; fresh ground lamb, lamb 
trimmings, and boneless processing lamb not older than 7 days from date 
of manufacture; frozen primals, subprimals, cuts fabricated from 
subprimals, and thin meats not older than 180 days from date of 
manufacture; and frozen ground lamb, lamb trimmings, and boneless 
processing lamb not older than 90 days from date of manufacture.'' 
Thus, the reporting of information on sales of distressed product is 
not required by this final rule. Additionally, to ensure the relevance 
of the information obtained and reported by AMS, AMS has added product 
`state of refrigeration' to the list of factors to be reported, for 
boxed domestic and imported lamb products that are required to be 
reported.

[[Page 75489]]

III. Impact Analysis

Executive Order 12866

    Although not economically significant, this rule has been 
determined to be significant for the purposes of Executive Order 12866, 
and therefore, has been reviewed by the Office of Management and Budget 
(OMB). Regulations must be designed in the most cost-effective manner 
possible to obtain the regulatory objective while imposing the least 
burden on society. AMS has prepared a Regulatory Impact Assessment 
(RIA) consisting of a statement of the need for the action, an 
examination of alternative approaches, and an analysis of the benefits 
and costs. A complete analysis of the number of affected entities and 
the required volume of reporting is discussed under the Paperwork 
Reduction Act section following this section.
    Need for Action. As stated in the background section, currently, 
packers are not required to report prices or the terms of sale for the 
animals they buy from producers. Rather, AMS collects information on 
daily sales and price information from packers and others on a 
voluntary basis. However, in recent years more animals are now being 
transacted under marketing arrangements where neither the arrangements 
nor the final purchase prices are publicly disclosed. While some of 
these marketing arrangements are using publicly reported prices as a 
base, many use the base price plus a premium and a premium/discount 
schedule depending upon the quality of the carcass. Current market 
price reports do not capture these pricing mechanisms.
    Likewise, importers of lamb carcasses and cuts are not required to 
report sales of such imported products.
    In recent years, the livestock industry has undergone fundamental 
changes due to economies of size at both the producer and packer level. 
These changes are reflected in the structure and marketing practices 
used today. Today, four firms slaughter about 80 percent of all fed 
cattle, about 55 percent of all hogs, and about 80 percent of all 
lambs. On the producer side, about 105 feedlots account for about 39 
percent of feedlot cattle marketings, the remaining 104,000 feedlots 
account for 61 percent of the marketings. About 2,005 hog operations 
control about 47 percent of the hog inventory and the remaining 90,000 
farms hold 53 percent. To assure the packers consistent quantities and 
quality of animals, many of the larger producers, often at a premium 
price, will enter into private marketing agreements with the packers. 
The packer is assured of larger lots, scheduled delivery, and 
consistent quality animals yielding meat with characteristics desired 
by consumers. The producer gets a higher price than in the traditional 
open markets and reduced transaction costs.
    Rather than buy and sell on the open market, many large 
slaughtering firms increasingly feed their own animals or utilize 
private marketing arrangements, such as forward contracts, formula 
pricing, and exclusive purchase agreements--for which prices and terms 
of sale are not publicly disclosed. The procurement methods make it 
difficult for producers, particularly smaller ones, who utilize open 
cash markets or wish to consider alternative marketing arrangements, to 
determine the actual purchase prices of livestock.
    Most major packers provide information daily to Market News on cash 
prices and total numbers of livestock involved in transactions. This 
does not provide full coverage of animals purchased. Market News 
estimates that 60-65 percent of all slaughter steer and heifer 
transactions, 25 percent of slaughter hog transactions, and 60 percent 
of all slaughter lamb transactions are reported daily through the 
voluntary process. The remaining 35-40 percent of cattle transactions, 
75 percent of the hog transactions, and 40 percent of the lamb 
transactions, which are not reported voluntarily, represent private 
marketing arrangements. As private marketing agreements become more 
prevalent, the number of reported transactions will further shrink and 
the accuracy and completeness of the information for U.S. marketings 
will erode.
    Various groups have asked for mandatory price reporting of 
livestock products, arguing that fewer publicly reported marketing 
arrangements make it difficult for producers to determine the actual 
prevailing purchase prices of livestock. The pressure for mandatory 
reporting has steadily increased in recent years, though prior attempts 
to pass mandatory reporting legislation have been unsuccessful, largely 
due to a lack of broad, unified support from the industry. Over the 
past couple of years, reported price levels for cattle, hogs, and lambs 
have run below the 5-year average leading some to argue that it was due 
to market forces of supply and demand or lower quality animals in the 
cash market. In the fall of 1998, slaughter plants operated at full 
capacity and reported cash hog prices reached a 30-year low. During 
this period, producers and policy officials were looking for accurate 
and timely market information to guide their decisions. A true hog 
price picture eluded them as a large amount of unreported transactions 
kept market news from being able to report the actual purchase price of 
hogs.
    Private marketing arrangements or otherwise coordinated agreements 
between hog producers and slaughter plants are increasingly the norm. 
As a result, spot-market demand for slaughter hogs is greatly 
influenced by slaughter capacity utilization. When the available supply 
of slaughter hogs exceeds the designed plant capacity, slaughter costs 
rise as packers turn to overtime labor. To compensate for sharply 
higher labor costs, slaughter plants lower their bids for slaughter 
hogs on the public cash markets. This reduces demand for the 
uncontracted supply of slaughter hogs and is reflected in sharply lower 
spot market cash prices. This was the situation in late 1998.
    Many market participants were no longer able to obtain the actual 
purchase prices of hogs on which to base their marketing decisions. 
Even the large farm producers were unable to evaluate contracts because 
of the unknown premium/discount schedules, which may be different in 
each marketing agreement. These circumstances helped to galvanize 
industry support for mandatory reporting and industry groups worked 
throughout the latter half of 1999 to fashion a mandatory reporting 
proposal.
    During the same time period, the General Accounting Office (GAO) 
was requested by members of Congress to conduct a study on USDA's pork 
price reporting system. The study found that USDA's current methods for 
reporting farm and retail prices did not accurately reflect actual 
prices for all methods of purchase. During periods of plentiful hog 
supplies, packers frequently pay a lower price for hogs procured 
through the spot market than those procured by contract. However, the 
study did point out spot market hogs are of generally lower quality and 
more variable in weight and availability which may explain why packers 
are willing to pay a premium for a stable flow of hogs with consistent 
quality and weights.
    Ultimately, Congress passed the Livestock Mandatory Reporting Act 
of 1999 (Act) which seeks to provide more transparency in the price 
discovery process and, thereby, to encourage competition in the 
marketplace for livestock and livestock products. By mandating 
reporting, the Act seeks to provide more market information to all 
market participants. These regulations will implement the Act. It 
requires packers to provide to Market News the

[[Page 75490]]

terms of all their livestock purchases, including those obtained 
through private marketing arrangements. Moreover, it requires 
processors of boxed beef and lamb cuts, breakers of lamb carcasses, and 
importers of boxed lamb cuts to report many of their transactions.
    In some instances, mandatory reporting will provide new information 
which has never been reported under the existing voluntary reporting 
program. AMS anticipates that this information will provide the basis 
for newly published market news reports not previously provided for 
under voluntary reporting, including reports covering the prior day 
swine market, forward contract and formula marketing arrangement cattle 
purchases, packer-owned cattle and sheep information, sales of imported 
boxed lamb cuts, including applicable branded product; and live lamb 
premiums and discounts. In other instances, mandatory reporting will 
provide information that is already being provided under voluntary 
reporting. This includes packer direct purchases of slaughter cattle, 
packer sales of boxed beef and lamb cuts including applicable branded 
boxed cuts, packer sales of lamb carcasses, and packer negotiated 
purchases of swine. AMS anticipates that, in such cases, the market 
reports reflecting this information will continue to be published but 
the basis of the market reports will become mandatory information. 
Lastly, many voluntary-based market news reports will not be affected 
by mandatory reporting, including reports covering livestock auction 
sales, packer sales of pork cuts and by-products, and grain trading. 
Collectively, the new mandatory information and the current voluntary 
information will provide more transparency in the price discovery 
process and, thereby, encourage competition in the marketplace for 
livestock and livestock products.
    Alternatives. As required by E.O. 12866, various methods were 
considered by which the objectives of the rule could be accomplished. 
Most private marketing reporting services rely on basic AMS livestock 
prices and organize the data in a particular way for a client. Further, 
the Act directs the Secretary to, the maximum extent practicable, 
provide for the reporting and publishing of information by electronic 
means. However, in developing these regulations AMS did consider other 
means by which the objectives of this rule could be accomplished, 
including reporting the required information by telephone, facsimile, 
and regular mail. AMS believes these alternatives are not capable of 
meeting the program objectives, especially timely reporting. The Act 
prescribes specific times that reporting entities must report to AMS. 
Similarly, the Act prescribes specific times for publication of a 
report by AMS. AMS believes electronic submission to be the only method 
capable of allowing for AMS to collect, aggregate and publish reports 
while complying with the specific time-frames set forth in the Act. AMS 
believes it is not possible for the Agency to receive information over 
the telephone, facsimile or regular mail and then transcribe the 
information into electronic format before aggregating and publishing 
the information while still complying with the publication time-frames 
set forth in the Act. However, AMS may provide for an exception to 
electronic reporting in emergencies or in cases when an alternative is 
agreeable to AMS and the reporting entity. The major cost of complying 
with this rule involves the information collection and reporting 
process. The information collection and reporting process is explained 
in the Summary of Costs Section and is referenced in Sec. 59.10(f) 
Reporting Methods. A complete discussion of the cost analysis can be 
found in the summary of costs section.
    Summary of Benefits. Many producers contend that they cannot obtain 
the market information needed to easily and quickly compare marketing 
possibilities available from different packers. This information is 
needed for producers to devise a marketing strategy that obtains the 
best possible prices for their livestock. Private advisory services 
will be able to provide a more in depth analysis to clients about 
alternative marketing strategies. In addition, producers selling under 
a private marketing agreement need benchmark prices and terms to 
evaluate their particular agreement to assure an equitable price for 
their livestock. Furthermore, the growth of private marketing 
arrangements in the red meat industry and declining participation in 
the public markets make it difficult for producers to determine 
prevailing market prices. Mandatory reporting will require packers to 
provide USDA all terms of their marketing contracts.
    The implementation of this rule will improve the price and supply 
reporting services of the USDA. In addition, participants in the 
marketplace for livestock and livestock products will be able to easily 
monitor price and market conditions. The price discovery process will 
become more transparent ensuring equal market information access for 
all participants. The increased transparency will more clearly transmit 
market signals about qualities first buyers demand thereby rewarding 
producers who produce animals that yield the meat consumers desire with 
a higher price. The increase in the quantity and quality of available 
market information will encourage competition in the marketplace while 
providing participants with the ability to make more informed marketing 
decisions.
    Although quantities and prices of production inputs are obtained by 
surveys and production costs are derived, the question remains as to 
how to value the output in a complex marketing environment. Producers 
will benefit from the increase in information brought about by 
mandatory reporting by being able to consider more detailed market 
reports and previously unavailable data on non-cash market livestock 
procurements. These reports will better reflect the overall supply and 
demand situation of the marketplace and will allow producers to better 
determine prevailing market prices, conditions, and arrangements 
pertinent to the marketing process.
    Summary of Costs. On March 17, 2000, AMS published proposed rules 
for these regulations in the Federal Register. Based on comments 
submitted and upon further review by AMS, the following changes and 
clarifications have been made in the final rule from the proposal.

Codification in the Code of Federal Regulations

    This rule will establish and add a new Part 59 to Title 7 of the 
Code of Federal Regulations (CFR). Although the proposed rule 
referenced the establishment and addition of a new Part 57, upon 
further inspection by the Agency, it was determined that Part 59 of 7 
CFR would be the appropriate codification of the final regulations.
Boxed Beef and Lamb and Lamb Carcasses
    When reporting sales of boxed beef and lamb cuts and lamb 
carcasses, packers will not be required to report sales of product not 
sold at a carlot-based price (distributive trade), frozen boxed beef 
cuts (excluding beef trimmings, boneless processing beef, and cow 
product), distressed product, cuts in portion cut form (e.g. chops, 
steaks, etc.), and branded boxed beef and lamb cuts where the brand is 
based upon unique characteristics such as cutting style or packaging.
    For sales of boxed beef cuts, the reporting requirements for ``cut 
date'', ``buyer'', and ``destination'' have been eliminated.

[[Page 75491]]

    For sales of lamb carcasses and lamb cuts, the requirements for 
``cut date'', ``buyer'', and ``destination'' have been eliminated. For 
sales of boxed lamb cuts, packers will now be required to report 
product ``state of refrigeration''.
Imported Lamb Carcasses and Cuts
    Importers are not required to report market information on 
purchases of imported boxed lamb cuts or imported lamb carcasses, or of 
purchases and sales of imported lamb cuts in portion cut form (e.g. 
chops, steaks, etc.). For the weekly boxed lamb sales reports, 
importers will not be required to report product ``nation of origin'', 
but will now be required to report product ``state of refrigeration''.
Live Cattle and Lambs
    Packers will not be required to report purchases from auction 
markets made either by a salaried employee of the packer or a person 
that buys on commission for a packer.
    For cattle purchases, the requirement for reporting ``slaughter 
date'' has been deleted.
    The twice-daily requirement for the reporting of all purchases of 
live lambs in the proposed rule has been reduced to once daily 
reporting at 2 p.m. Central Time. The regulations were clarified to 
require that packers are required to report ``class of lamb'' and 
``pelt type'' for live lamb purchases. Additionally, the weekly 
reporting of lambs that were slaughtered will no longer require packers 
to report ``shrink factor'' and the reporting time for this report has 
been moved from the first reporting day to the second reporting day of 
the week.
Live Swine
    For the daily reporting of swine that were slaughtered, packers 
will now be required to report ``average loin depth'' on the ``prior 
day report''.
Other Changes
    Other miscellaneous changes were made to the regulatory text in 
response to the comments received and further review by AMS, including 
the addition of several new definitions to clarify the meaning of terms 
used in the regulations.
    AMS's cost estimates along with the supporting assumptions and 
methodology used were stated in the proposed rule. These supporting 
assumptions and methodology used appeared in the Regulatory Impact 
Analysis, Regulatory Flexibility Analysis, and Paperwork Reduction Act 
Analysis sections of the proposed rule. Comments received in response 
to the proposed rule did not provide any detailed supporting data and 
information on the methodology used in formulating their cost estimates 
or any information that would enable AMS to determine how they derived 
their cost estimates. However, we do note that the wide range of 
estimates received does raise concerns as to what assumptions and 
methodology were used by the commenters.
    AMS believes that one explanation for the reason why some estimates 
submitted by commenters exceeded the estimates made by AMS is that 
commenters were estimating the costs of developing systems that 
exceeded the minimum requirements of a system that would fulfill these 
regulations. Additionally, AMS believes that some commenters may have 
included other costs associated with normal recordkeeping and 
accounting practices that are already required by existing regulations 
for those engaged in the livestock and meat packing and importing 
industries and therefore are not new costs being required by the 
implementation of these regulations.
    Nonetheless, AMS has carefully reviewed its analysis of the cost 
burden estimates for mandatory reporting using the same assumptions and 
methodology used in the proposed rule. In this regard, we have added 
tables to this analysis which even more clearly itemize the supporting 
assumptions and methodology used by AMS in formulating our cost 
estimates. Further, we have adjusted our cost estimates where 
appropriate.
    Therefore, AMS believes we have done as comprehensive of an 
analysis as possible of the cost burden imposed by these regulations on 
those required to report.
    The regulations have been designed to achieve the regulatory 
objectives in as cost-effective manner as possible. To the extent 
practicable, they draw upon current industry practices in order to 
minimize the burden to the industry. The regulatory objective is to 
increase the amount of information available to participants in the 
marketplace for livestock and livestock products by mandating reporting 
of market information by certain members of the industry. Methods of 
accomplishing the required information collection in the timeliest 
manner while minimizing the opportunity for errors and maximizing 
existing systems and processes were contemplated. Electronic transfer 
of data from the reporting entity to the Agency was chosen as the least 
cost reporting method to accomplish all of the objectives of mandatory 
information collection.
    AMS considered other alternatives for firms lacking electronic data 
transfer capabilities, such as faxing the required information to a 
Market News office for hand data entry. This was rejected because of 
the costs to both the respondent and to AMS; the amount of time 
required with this alternative is unworkable given the short time-
frames required for public dissemination. However, there is an 
exception in emergencies or in cases when an alternative method is 
agreeable to AMS and the reporting entity.
    Electronic data transmission of information is accomplished using 
an interface with an existing electronic record keeping system. In most 
cases, the information packers and importers are required to report 
already exists in internal computerized record keeping systems. Packers 
and importers will provide for the translation of the information from 
their existing electronic recordkeeping system into the required AMS 
standardized format. Once accomplished, the information will be 
electronically transmitted to AMS where it will be automatically loaded 
into an AMS database. We estimate that the cost in terms of time and 
money for this alternative is in the initial creation of the interface. 
We estimate that the creation of this interface by in-house computer 
personnel will require an industry average of 15 hours per respondent. 
Further, we estimate the cost per hour to average $50.00 for a total 
cost, on average, of $750.00. Those companies not having in-house 
computer personnel will incur such costs as are necessary to bring in 
outside computer programmers to accomplish the task. The Agency 
estimates this cost to be from $750.00 to $1,000.00.

        Initial Electronic Submission Startup Cost Per Respondent
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Hours to develop interface \1\..............................          15
Labor cost per hour.........................................   x  $50.00
                                                             -----------
    Total cost per respondent...............................     $750.00
 
 Startup Cost Prorated over 5 Year Life of Program: $750.00/5 = $150.00
 annual cost per respondent
------------------------------------------------------------------------
\1\ Hours required to develop electronic interface between existing
  company electronic recordkeeping system and AMS required electronic
  submission format.

    Additionally, AMS estimates the annual cost per respondent for the 
storage of the electronic data files which were submitted to AMS in 
compliance with the reporting provisions of this rule to be $1,830.00 
(see Paperwork Reduction Act section for a full

[[Page 75492]]

discussion). This estimate includes the cost of electronic data storage 
media, backup electronic data storage media, and backup software 
required to maintain an estimated annual electronic recordkeeping and 
backup burden of 42 megabytes, on average, per respondent. In addition, 
this estimate includes the cost per employee to maintain such records 
which is estimated to average 70 hours per year at $20.00 per hour for 
a total salary component cost of $1,400.00 per year.

                Annual Recordkeeping Cost Per Respondent
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Labor hours per year........................................          70
Labor cost per hour.........................................   x  $20.00
                                                             -----------
Sub-total labor cost per year...............................   $1,400.00
Electronic storage cost \1\.................................   + $430.00
                                                             -----------
    Total recordkeeping cost................................  $1,830,00
------------------------------------------------------------------------
\1\ Includes cost of hard electronic storage (estimated to average 42
  Megabytes/year), backup tape media, backup tape drive, and backup
  software.

    In this rule, information collection requirements include the 
submission of the required information on a daily and weekly basis in 
the standard format provided in the following forms: (1) Live Cattle 
Daily Report (Current Established Prices), (2) Live Cattle Daily Report 
(Committed and Delivered Cattle), (3) Live Cattle Weekly Report 
(Forward Contract and Packer-Owned), (4) Live Cattle Weekly Report 
(Formula Purchases), (5) Cattle Premiums and Discounts Weekly Report, 
(6) Boxed Beef Daily Report, (7) Swine Prior Day Report, (8) Swine 
Daily Report, (9) Swine Noncarcass Merit Premium Weekly Report, (10) 
Live Lamb Daily Report (Current Established Prices), (11) Live Lamb 
Daily Report (Committed and Delivered Lambs), (12) Live Lamb Weekly 
Report (Forward Contract and Packer-Owned), (13) Live Lamb Weekly 
Report (Formula Purchases), (14) Lamb Premiums and Discounts Weekly 
Report, (15) Boxed Lamb Report, and (16) Lamb Carcass Report. Copies of 
these 16 forms are included in Appendices at the end of this rule. 
Cattle packers will utilize six of these forms (Appendix A) when 
reporting information to AMS including two for daily cattle reporting, 
three for weekly cattle reporting, and one for daily boxed beef cuts 
reporting. AMS estimates the total data submission cost burden to 
cattle packers to be $266,560.
    Swine packers will utilize three forms (Appendix B), two for daily 
reporting of swine purchases and one for weekly reporting of non-
carcass merit premium information. AMS estimates the total data 
submission cost burden to swine packers to be $166,400.
    Lamb packers will utilize seven of these forms (Appendix C) when 
reporting information to AMS including two for daily lamb reporting, 
three for weekly lamb reporting, one for daily and weekly boxed lamb 
cuts reporting and one for daily and weekly lamb carcass reporting. 
Lamb importers will utilize one of these forms when reporting 
information to AMS for reporting weekly imported boxed lamb cut sales. 
AMS estimates the total data submission cost burden to lamb packers and 
lamb importers to be $48,900.
    These cost estimates are discussed in detail in the Paperwork 
Reduction Act Section.

Breakdown of Estimated Data Submission Cost Burden

                                 I.--Number of Responses per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                                Reporting                                               Total
                     Form                          days                    Responses                  responses
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113...................................          260   x  2 daily                           =          520
 
    LS-114...................................          260   x  2 daily                           =          520
 
    LS-115...................................           52   x  1 weekly                          =           52
 
    LS-116...................................           52   x  1 weekly                          =           52
 
    LS-117...................................           52   x  1 weekly                          =           52
 
    LS-126...................................          260   x  2 daily                           =          520
 
Swine:
    LS-118...................................          260   x  1 daily                           =          260
 
    LS-119...................................          260   x  2 daily                           =          520
 
    LS-120...................................           52   x  1 weekly                          =           52
 
Lamb:
    Domestic:................................
    LS-121...................................          260   x  1 daily                           =          260
 
    LS-122...................................          260   x  1 daily                           =          260
 
    LS-123...................................           52   x  1 weekly                          =           52
 
    LS-124...................................           52   x  1 weekly                          =           52
 
    LS-125...................................           52   x  1 weekly                          =           52
 
    LS-128...................................          260   x  1 daily                           =          260
 
    LS-129...................................          260   x  1 daily                           =          260
 
    Importer:................................
    LS-128...................................           52   x  1 weekly                          =           52
 
----------------------------------------------------------------------------------------------------------------


                             II.--Number of Submission Hours per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                                           Submissions/           Hours/           Total hours/
                          Form                                 year             submission             year
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..............................................             520   x             .17   =           88.40
 
    LS-114..............................................             520   x             .17   =           88.40
 
    LS-115..............................................              52   x             .25   =           13.00
 
    LS-116..............................................              52   x             .25   =           13.00
 
    LS-117..............................................              52   x             .08   =            4.16
 

[[Page 75493]]

 
    LS-126..............................................             260   x            .125   =           65.00
 
Swine:
    LS-118..............................................             260   x             .25   =           65.00
 
    LS-119..............................................             260   x             .17   =           88.40
 
    LS-120..............................................              52   x             .25   =           13.00
 
Lamb:
    Domestic:
    LS-121..............................................             260   x             .34   =           88.40
 
    LS-122..............................................             260   x             .34   =           88.40
 
    LS-123..............................................              52   x             .25   =           13.00
 
    LS-124..............................................              52   x             .25   =           13.00
 
    LS-125..............................................              52   x             .08   =            4.16
 
    LS-128..............................................             260   x            .167   =           43.40
 
    LS-129..............................................             260   x            .167   =           43.40
 
    Importer:
    LS-128..............................................              52   x            .084   =            4.37
 
----------------------------------------------------------------------------------------------------------------


                               III.--Total Submission Cost per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                                           Total hours/
                          Form                                 year              Cost/hour        Total $'s/year
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..............................................           88.40   x          $20.00   =       $1,768.00
 
    LS-114..............................................           88.40   x           20.00   =        1,768.00
 
    LS-115..............................................           13.00   x           20.00   =          260.00
 
    LS-116..............................................           13.00   x           20.00   =          260.00
 
    LS-117..............................................            4.16   x           20.00   =           83.20
 
    LS-126..............................................           65.00   x           20.00   =        1,300.00
 
                                                         ----------------                        ---------------
      Totals............................................          271.96   x           20.00   =        5,440.00
 
                                                         =======================================================
Swine:
    LS-118..............................................           65.00   x           20.00   =        1,300.00
 
    LS-119..............................................           88.40   x           20.00   =        1,768.00
 
    LS-120..............................................           13.00   x           20.00   =          260.00
 
                                                         ----------------                        ---------------
      Totals............................................          166.40   x           20.00   =        3,328.00
 
                                                         =======================================================
Lamb:
    Domestic:
    LS-121..............................................           88.40   x           20.00   =        1,768.00
 
    LS-122..............................................           88.40   x           20.00   =        1,768.00
 
    LS-123..............................................           13.00   x           20.00   =          260.00
 
    LS-124..............................................           13.00   x           20.00   =          260.00
 
    LS-125..............................................            4.16   x           20.00   =           83.20
 
    LS-128..............................................           43.40   x           20.00   =          868.00
 
    LS-129..............................................           43.40   x           20.00   =          868.00
 
                                                         ----------------                        ---------------
                                                                                                        5,875.00
    Importer:...........................................
    LS-128..............................................            4.37   x           20.00   =          +87.00
 
                                                         ----------------                        ---------------
      Totals............................................          298.13   x           20.00   =        5,962.00
 
----------------------------------------------------------------------------------------------------------------


                              IV.--Total Yearly Submission Cost for all Respondents
----------------------------------------------------------------------------------------------------------------
                                                                                  No. of
                          Form                            Total $'s/year        respondents         Total cost*
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..............................................       $1,768.00   x              49   =      $86,640.00
 
    LS-114..............................................        1,768.00   x              49   =       86,640.00
 
    LS-115..............................................          260.00   x              49   =       12,740.00
 
    LS-116..............................................          260.00   x              49   =       12,740.00
 
    LS-117..............................................           83.20   x              49   =        4,080.00
 
    LS-126..............................................       1,300.000   x              49   =       63,700.00
 
                                                         ----------------                        ---------------
      Totals............................................        5,440.00   x              49   =      266,560.00
 
                                                         =======================================================

[[Page 75494]]

 
Swine:
    LS-118..............................................        1,300.00   x              50   =       65,000.00
 
    LS-119..............................................        1,768.00   x              50   =       88,400.00
 
    LS-120..............................................          260.00   x              50   =       13,000.00
 
                                                         ----------------                        ---------------
      Totals............................................        3,328.00   x              50   =      166,400.00
 
                                                         =======================================================
Lamb:
    Domestic:
    LS-121..............................................        1,768.00   x               8   =       14,140.00
 
    LS-122..............................................        1,768.00   x               8   =       14,140.00
 
    LS-123..............................................          260.00   x               8   =        2,080.00
 
    LS-124..............................................          260.00   x               8   =        2,080.00
 
    LS-125..............................................           83.20   x               8   =          670.00
 
    LS-129..............................................          868.00   x               8   =        6,950.00
 
                                                         ----------------                        ---------------
                                                                5,007.00   x               8   =       40,060.00
 
    LS-128..............................................          868.00   x               9   =       +7,810.00
 
                                                         ----------------                        ---------------
      Total.............................................                                               47,870.00
    Importer:...........................................
    LS-128..............................................           87.00   x               6   =          520.00
 
                                                         ----------------                        ---------------
      Total.............................................                                              48,390.00
----------------------------------------------------------------------------------------------------------------
* Dollars values rounded to nearest $10.00.

    The total cost burden to packers and importers required to submit 
information under this rule includes initial startup costs for 
electronic submission of data, annual recordkeeping costs, and annual 
data submission costs. Total reporting costs to cattle packers are 
estimated to be $7,420 per plant, $5,308 for hog packers, $7,860 for 
sheep slaughtering plants, and $2,070 for lamb importers.

                                     Total Annual Cost Burden to Respondents
----------------------------------------------------------------------------------------------------------------
                                                                     Cost per          No. of
                                                                    respondent      respondents      Total cost*
----------------------------------------------------------------------------------------------------------------
Cattle:
    Initial Startup..........................................   =      $150.00   x           49   =    $7,350.00
 
    Recordkeeping............................................   =     1,830.00   x           49   =    89,670.00
 
    Data Submission..........................................   =     5,440.00   x           49   =   266,560.00
 
                                                                                                    ------------
                                                                                                      363,580.00
      Total Cost Per Respondent: 363,580.00/49...............                                     =     7,420.00
                                                              ==================================================
Swine:
    Initial Startup..........................................   =       150.00   x           50   =     7,500.00
 
    Recordkeeping............................................   =     1,830.00   x           50   =    91,500.00
 
    Data Submission..........................................   =     3,328.00   x           50   =   166,400.00
 
                                                                                                    ------------
                                                                                                      265,400.00
      Total Cost Per Respondent: 265,400.00/50...............                                     =     5,308.00
                                                              ==================================================
Lamb:
    Domestic:
    Initial Startup..........................................   =       150.00   x            9   =     1,350.00
 
    Recordkeeping............................................   =     1,830.00   x            9   =    16,470.00
 
    Data Submission..........................................   =     5,875.00   x            9   =    52,880.00
 
                                                                                                    ------------
                                                                                                       70,700.00
    Importer:................................................
    Initial Startup..........................................   =       150.00   x            6   =       900.00
 
    Recordkeeping............................................   =     1,830.00   x            6   =    10,980.00
 
    Data Submission..........................................   =        87.00   x            6   =       522.00
 
                                                                                                    ------------
                                                                                                       12,400.00
      Total Cost Per Respondent:.............................
          Domestic: 70,700.00/9..............................                                     =     7,860.00
          Importer: 12,400.00/6..............................                                     =    2,070.00
----------------------------------------------------------------------------------------------------------------
* Dollars values rounded to nearest $10.00.


[[Page 75495]]

    The respondent reporting costs vary widely by species and the size 
of lots purchased. Section 251 (c) General Provisions Reporting by 
Packers requires packers to report all information required under this 
subtitle on an individual lot basis. Therefore, larger lots bought by 
the larger packers will result in a lower reporting cost per head 
slaughtered. Using 1999 federally inspected slaughter data the cost per 
animal slaughtered will decline as slaughter volume increased. The 
smaller cattle packers will have the highest reporting cost per head 
slaughtered, while the largest hog slaughtering firms will have the 
lowest. Based on a preliminary analysis by specie, cost for cattle is 
estimated to be 0.011 dollars per head, swine 0.003 dollars per head, 
sheep 0.021 dollars per head, and lamb importers 0.428 dollars per 
metric ton. See Table 1. Respondent Cost.

                                            Table 1.--Respondent Cost
----------------------------------------------------------------------------------------------------------------
                                                                                        Respondent
                         Size group                             Plants    Head  1,000      cost       Cost per
                                                                                         dollars    head dollars
----------------------------------------------------------------------------------------------------------------
Respondent cost for cattle slaughter, 1999:
    1-124,999 (Exempted)...................................          710       2994.3            0             0
                                                            ====================================================
    125,000-199,999........................................           10      1,878.1       74,200      0.039508
    200,000-299,999........................................            7      1,773.7       51,940      0.029283
    300,000-499,999........................................           10      4,296.2       74,200      0.017271
    500,000-999,999........................................            7      4,604.4       51,940      0.011281
    1,000,000-1,499,999....................................           11     13,464.8       81,620      0.006062
    1,500,000+.............................................            4      6,403.3       29,680      0.004635
                                                            ----------------------------------------------------
      Total (Subject to regulation)........................           49     32,420.5      363,580      0.011215
Respondent cost for hog slaughter, 1999:
    1-99,999 (Exempted)....................................          674      3,500.1            0             0
                                                            ====================================================
    100,000-249,999........................................           13      2,177.8       69,004      0.031685
    250,000-499,999........................................            4      1,270.6       21,232      0.016710
    500,000-999,999........................................            5      3,181.5       26,540      0.008342
    1,000,000-1,499,999....................................            2      2,465.3       10,616      0.004306
    1,500,000-1,999,999....................................            9     16,160.9       47,772      0.002956
    2,000,000-2,999,999....................................            9     19,547.7       47,772      0.002444
    3,000,000-3,999,999....................................            6     21,618.4       31,848      0.001473
    4,000,000+.............................................            6     29,632.6       31,848      0.001075
                                                            ----------------------------------------------------
      Total (Subject to regulation)........................           54     96,054.8     *286,632      0.002879
Respondent cost per head slaughtered, Sheep, 1999:
    1-74,999 (Exempted)....................................          553        541.2            0             0
                                                            ====================================================
    75,000-499,999.........................................            6      1,634.9       47,160      0.028846
    500,000+...............................................            2      1,378.2       15,720      0.011406
                                                            ----------------------------------------------------
      Total (Subject to regulation)........................            8      3,013.1     **62,880      0.020869
----------------------------------------------------------------------------------------------------------------
Size Group                                                     Importers  Metric tons   Respondent  Cost per ton
                                                                            imported       cost          dollars
                                                                                         dollars
                                                            ----------------------------------------------------
Respondent cost per metric ton imported, Lamb and mutton,
 1999:
    Under 5,000 metric tons (Exempted......................          371        7,534            0             0
                                                            ====================================================
    5,000 and over.........................................            6       30,138       12,900   0.428031057
      Total (Subject to regulation)........................            6       30,138       12,900  0.428031057
----------------------------------------------------------------------------------------------------------------
* Total respondents does not reflect latest estimate of 50 used by AMS throughout this rule. AMS calculates
  total respondent cost as 50 x $5,308.00 = $265,400.00.
** Total respondents does not reflect estimate of 9 used by AMS to reflect one packer that also imports. AMS
  calculates total respondent cost as 9  x  $7,860.00 = $70,700.00.

    In addition to these costs to packers for submitting information, 
the mandatory price reporting program will cost approximately $4.7 
million in FY 2000 and $5.9 million in FY 2001. In order to implement 
the program in FY 2000, AMS is hiring additional staff, issuing 
regulations, and setting up an electronic database to capture data and 
develop reports that began in July. The 56 staff years required to 
administer and produce high quality mandatory price reports include 
reporters, auditors, clerical personnel, and computer specialists. 
These employees will be located in three AMS offices located across the 
country. Salary-related costs in FY 2001 are estimated at $3.5 million. 
Other costs include approximately $600 thousand for travel and 
transportation; $600 thousand for miscellaneous costs such as office 
space, utilities, communications costs, printing, reimbursements to 
cooperating States, training, and office supplies; $200 thousand for 
equipment, including computers, software, and licenses; and $1 million 
for a computer systems contract to develop the database required to 
manage the data.

Executive Order 12988

    This proposal has been reviewed under Executive Order 12988, Civil 
Justice Reform, and is not intended to have retroactive effect. States 
and political divisions of States are

[[Page 75496]]

specifically preempted by Sec. 259 of the Act from imposing 
requirements in addition to, or inconsistent with, any requirements of 
the Act with respect to the submission or publication of information on 
the prices and quantities of livestock or livestock products. Further, 
the Act does not restrict or modify the authority of the Secretary to 
administer or enforce the Packers and Stockyards Act, 1921 (7 U.S.C. 
181 et seq.); administer, enforce, or collect voluntary reports under 
the Act or any other laws; or access documentary evidence as provided 
under sections 9 and 10 of the Federal Trade Commission Act (15 U.S.C. 
49, 50). There are no administrative procedures that must be exhausted 
prior to any judicial challenge to the provisions of this rule.

Civil Rights Review

    AMS has considered the potential civil rights implications of this 
rule on minorities, women, or persons with disabilities and prepared a 
Civil Rights Impact Analysis to ensure that no person or group shall be 
discriminated against on the basis of race, color, sex, national 
origin, religion, age, disability, or marital or family status. This 
included those persons who are employees of those entities required to 
participate and those individuals who wish to use information collected 
by this mandatory program of information regarding the marketing of 
cattle, swine, lambs, and products of such livestock.
    Upon a review of our regulation and the Civil Rights Impact 
Analysis on the proposed rule, prepared by AMS, the USDA Office of 
Civil Rights determined that this rule does not require affected 
entities to relocate or alter their operations in ways that could 
adversely affect such persons or groups or will this program have a 
disproportionate effect on women, minorities or people with 
disabilities. Further, this program will not exclude from participation 
any persons or groups, deny any persons or groups the benefits of the 
program, subject any persons or groups to discrimination.
    The final rule, which incorporates comments received during the 
comment period, has no disproportionate impact on women, minorities or 
people with disabilities.

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
Federalism. This Order directs agencies to construe, in regulations and 
otherwise, a Federal statute to preempt State law only when the statute 
contains an expressed preemption provision. This rule is required by 
the Act. Section 259 of the Act, Federal Preemption, states, ``In order 
to achieve the goals, purposes, and objectives of this title on a 
nationwide basis and to avoid potentially conflicting State laws that 
could impede the goals, purposes, or objectives of this title, no State 
or political subdivision of a State may impose a requirement that is in 
addition to, or inconsistent with, any requirement of this subtitle 
with respect to the submission or reporting of information, or the 
publication of such information, on the prices and quantities of 
livestock or livestock products.''
    For a number of years, States have operated programs of voluntary 
market reporting of livestock and livestock products. Many of these 
programs have been operated in conjunction with the USDA through 
Federal-State agreements. Under these agreements, the USDA and the 
States work cooperatively to gather and disseminate information on the 
livestock markets within the State. Until now, all of these programs 
have been based on voluntary reporting of market information. The Act 
and these regulations are not intended to have an effect on any 
voluntary market reporting programs currently being operated by the 
States.
    However, recently, several States have enacted legislation 
mandating, to various degrees, the reporting of market information on 
transactions of cattle, swine, and lambs conducted within that 
particular State. Currently, this includes the States of Iowa, 
Minnesota, Missouri, Nebraska, and South Dakota. Of these, only 
Minnesota and South Dakota are collecting mandated market information.
    Section 259 of the Act, preempts States from imposing mandatory 
reporting requirements that are in addition to or inconsistent with any 
requirement of this rule with respect to the collection and publication 
of information on the prices and quantities of livestock and livestock 
products. This preemption clause will affect all mandatory reporting 
programs currently in effect by the States and the implementation of 
any mandatory reporting programs currently developed, in the process of 
being developed, or that may be developed at a later date.
    With regard to consultation with States, AMS has made sure that the 
States are aware of the Act and AMS has engaged in formal and informal 
discussions regarding the implications of Federal livestock mandatory 
reporting with those States which either currently have mandatory 
reporting programs or are in the process of developing mandatory 
reporting programs.
    Additionally, interested persons were invited to comment on the 
proposal as it related to the operation of State livestock and 
livestock products reporting programs. The summaries of comments 
follow.
    Summary of Comments: AMS received 3 comments requesting that 
language be placed in the regulations regarding the preemption of State 
mandatory price reporting laws. The commenters believed that the 
omission of such language in the final rule would allow States to 
impose their own mandatory reporting laws.
    Agency Response: Section 259 of the Act provides that no State may 
impose a requirement that is in addition to, or inconsistent with, any 
requirement of the Act with respect to the submission or reporting of 
information, or the publication of such information, on the prices and 
quantities of livestock or livestock products. Contained within the 
supplemental information sections of the proposed rule and these final 
rules are discussions clarifying the Agency's interpretation of the Act 
as it relates to the preemption of State mandatory reporting programs. 
Accordingly, although such language does not appear in the regulatory 
text of this final rule, this has no effect on the enforcement of the 
Act.

Regulatory Flexibility Act

    In General. This rule has been reviewed under the requirements of 
the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). The 
purpose of the RFA is to consider the economic impact of a rule on 
small business entities. Alternatives, which would accomplish the 
objectives of the rule without unduly burdening small entities or 
erecting barriers that would restrict their ability to compete in the 
marketplace, have been evaluated. Regulatory action should be 
appropriate to the scale of the businesses subject to the action. The 
collection of information is necessary for the proper performance of 
the functions of AMS concerning the mandatory reporting of livestock 
information. The Livestock Mandatory Reporting Act of 1999 (Act) 
requires AMS to collect and publish livestock market information. The 
required information is only available directly from those entities 
required to report under the Act and by these regulations and exists 
nowhere else. Therefore, this rule does not duplicate market 
information reasonably accessible to the Agency.
    In formulating this rule, particular consideration was given to 
reducing the

[[Page 75497]]

burden on entities while still achieving the objectives of the 
regulation. Accordingly, thresholds were set which defined those 
entities which are required to report information on purchases of live 
cattle, swine and lambs, as well as information on domestic and export 
sales of boxed beef cuts including applicable branded product, and 
sales of lamb carcasses, boxed lamb cuts including applicable branded 
product, and imported boxed lamb cuts including applicable branded 
product.
    In any calendar year, only federally inspected cattle plants which 
slaughtered an average of 125,000 head of cattle a year for the 
immediately preceding 5 calendar years are required to report. 
Additionally, any cattle plant that did not slaughter cattle during the 
immediately preceding 5 calendar years are required to report if the 
Secretary determines that the plant should be considered a packer based 
on its capacity. For entities that did not slaughter cattle during the 
immediately preceding 5 calendar years, such as a new plant or existing 
plant that begins operations the AMS will project the plant's annual 
slaughter or production based upon the plant's estimate of annual 
slaughter capacity to determine which entities meet the definition of a 
packer as defined in these regulations. This accounts for approximately 
49 out of 759 cattle plants or 6.5% of all federally inspected cattle 
plants.
    For any calendar year, any federally inspected swine plant which 
slaughtered an average of 100,000 head of swine a year for the 
immediately preceding 5 calendar years are required to report 
information. Additionally, any swine plant that did not slaughter swine 
during the immediately preceding 5 calendar years if the Secretary 
determines that the plant should be considered a packer based on the 
capacity of the processing plant are required to report. This accounts 
for approximately 50 out of 728 swine plants or 6.9% of all federally 
inspected swine plants.
    In any calendar year, federally inspected lamb plants which 
slaughtered the equivalent of an average of 75,000 head of lambs a year 
for the immediately preceding 5 calendar years are considered a packer 
and required to report. A packer includes a processing plant that 
purchases and processes an average of 75,000 lamb carcasses annually 
rather than slaughter live lambs. Additionally, any processing plant 
that did not slaughter an average of 75,000 lambs during the 
immediately preceding 5 calendar years if the Secretary determines that 
the plant should be considered a packer based on the capacity of the 
processing plant are required to report.
    For any calendar year, lamb importers that imported an average of 
5,000 metric tons of lamb meat products per year during the immediately 
preceding 5 calendar years are required to report. Additionally, lamb 
importers that did not import an average of 5,000 metric tons of lamb 
meat products during the immediately preceding 5 calendar years if the 
Secretary determines that the person should be considered an importer 
based on the volume of lamb imports are required to report. Some lamb 
plants may also be importers. This accounts for approximately 17 out of 
561 lamb plants and importers or 3.0% of all federally inspected lamb 
plants and importers.
    Fully 93.5% of all cattle, 93.1% of all swine, and 97.0% of all 
lamb plants in the U.S. are exempted by this rule from reporting 
information.
    Accordingly, we also have prepared a regulatory flexibility 
analysis. The RFA compares the size of meat packing plants to the 
Standard Industrial Code (SIC) to determine the percentage of small 
businesses within the meat packing industry. Under these size 
standards, meat packing companies with 500 or less employees are 
considered small business entities.
    Objectives and Legal Basis. The objective of this rule is to 
improve the price and supply reporting services of the Department of 
Agriculture in order to encourage competition in the marketplace for 
livestock and livestock products by increasing the amount of 
information available to participants. This is accomplished through the 
establishment of a program of information regarding the marketing of 
cattle, swine, lambs, and products of such livestock as specifically 
directed by the Act and these regulations, as described in detail in 
the background section.
    Estimated Number of Small Businesses. This rule provides for the 
mandatory reporting of market information by livestock packers who for 
any calendar year have slaughtered a certain number of livestock during 
the immediately preceding 5 calendar years. This number is 125,000 head 
per year for cattle and 100,000 head per year for swine. Lamb plants 
required to report include those that for any calendar year slaughter 
or process the equivalent of 75,000 head per year during the 
immediately preceding 5 calendar years. Additionally, for any calendar 
year lamb importers that imported an average of 5,000 metric tons of 
lamb meat products per calendar year during the immediately preceding 5 
calendar years are also required to report details of their purchases. 
For cattle and swine processing plants that have not slaughtered 
livestock during the immediately preceding 5 calendar years are also 
required to report if the Secretary determines that the plants should 
be considered packers based on their capacity. Additionally, lamb 
packers and lamb meat processors and importers that did not slaughter 
or process the equivalent of 75,000 head per year or import 5,000 
metric tons of lamb meat products per year during the immediately 
preceding 5 calendar years are required to report if the Secretary 
determines that they should be considered an importer based on their 
volume of lamb imports.
    These packers and importers are required to report the details of 
all transactions involving purchases of livestock and the details of 
all transactions involving domestic and export sales of boxed beef cuts 
including applicable branded product, and sales of domestic boxed lamb 
cuts including applicable branded product, imported boxed lamb cuts 
including applicable branded product and lamb carcasses to AMS. Cattle 
and swine information will be reported to AMS according to the schedule 
directed by the Act and these regulations with purchases of swine 
reported three times each day, purchases of cattle twice each day, and 
sales of domestic and exported boxed beef cuts, including applicable 
branded product, reported twice each day. Lamb information will be 
reported to AMS according to the schedule mandated by these regulations 
with purchases of lambs reported once each day and sales of lamb 
carcasses reported once each day. Previous week sales of imported boxed 
lamb cuts including applicable branded boxed lamb cuts will be reported 
once weekly on the first reporting day of the week.
    The SIC size standard classifies a small business in the meat 
packing industry as a company with less than 500 employees. Although it 
is common in the red meat industry for larger companies to own several 
plants, some of which may employ less than 500 people, those companies 
and lamb importers with a total slaughter plant employment at all 
locations of less than 500 are considered to be small businesses for 
the purposes of this rule even though individual plants are mandated to 
report as provided by the Act and these regulations.
    For any calendar year, federally inspected beef plants required to 
report include those that slaughtered an average of 125,000 head per 
year during

[[Page 75498]]

the immediately preceding 5 calendar years. Also included are 
processing plants that did not slaughter cattle during the immediately 
preceding 5 calendar years but are determined to be a packer by the 
Secretary based on the capacity of the processing plant. By this 
definition, approximately 30 individual beef packing companies 
representing 49 individual plants are required to report information to 
AMS. Based on the SBA size standard, 10 of these 30 beef packing 
companies are considered small businesses, representing 10 plants that 
are required to report. The figure of 49 plants required to report 
represents 6.5% of the cattle plants in the U.S. The remaining 93.5% of 
cattle plants, nearly all estimated to qualify as small business, are 
exempt from mandatory reporting.
    For any calendar year, federally inspected pork plants required to 
report include those that slaughtered an average of 100,000 head per 
year during the immediately preceding 5 calendar years. Also included 
are processing plants that did not slaughter swine during the 
immediately preceding 5 calendar years but are determined to be a 
packer by the Secretary based on the capacity of the processing plant. 
By this definition, approximately 29 individual pork packing companies 
representing a total of 50 individual plants are required to report 
information to AMS. Based on the SBA size standard, 15 of these 29 pork 
packing companies are considered small businesses, representing 15 
individual plants that are required to report. The figure of 50 plants 
required to report represents 6.9% of the swine plants in the U.S. The 
remaining 93.1% of swine plants, nearly all estimated to qualify as 
small business, are exempt from mandatory reporting.
    For any calendar year, lamb packers required to report include 
those that slaughtered or processed the equivalent of 75,000 head per 
year during each of the immediately preceding 5 calendar years. Also 
included are processing plants that did not slaughter or process an 
average of 75,000 lambs during the immediately preceding 5 calendar 
years but are determined to be a packer by the Secretary based on the 
capacity of the processing plant. For any calendar year, an importer 
that imported an average of 5,000 metric tons of lamb meat products per 
year during the immediately preceding 5 calendar years are required to 
report. Additionally, a lamb importer that did not import an average of 
5,000 metric tons of lamb meat products during the immediately 
preceding 5 calendar years if the Secretary determines that the person 
should be considered an importer based on the volume of lamb imports, 
will also be required to report. By this definition, 17 individual 
companies including importers representing a total of 12 plants, are 
required to report information. Based on the SBA size standard, all 12 
of these lamb plants are considered small businesses with none 
employing more than 500 people. The figure of 12 plants required to 
report represents 3.0% of the lamb plants in the U.S. Nearly all of the 
remaining 97.0% of lamb plants are estimated to qualify as small 
businesses and are exempt from mandatory reporting.
    Projected Reporting. This rule requires the reporting of specific 
market information regarding the buying and selling of livestock and 
livestock products. The information will be reported to AMS by 
electronic means. Electronic reporting involves the transfer of data 
from a packer's or importer's electronic recordkeeping system to a 
centrally located AMS electronic database. The packer or importer is 
required to organize the information in an AMS-approved format before 
electronically transmitting the information to AMS (Appendices A-C).
    Once the required information has been entered into the AMS 
database, it will be aggregated and processed into various market 
reports which will be released according to the daily and weekly time 
schedule set forth in these regulations.
    As an alternative, in response to comments concerning AMS 
developing and making available a web-based input forms for submitting 
data online, AMS found that some of the smaller entities covered under 
mandatory price reporting would benefit from such a web-based 
submission system. Accordingly, AMS is developing such a system that 
will be ready in time for program implementation.
    Under both systems, information regarding the specific 
characteristics of each reported sale must be supplied by lot without 
aggregation. In order to adequately describe and categorize each 
transaction, as many as fifteen separate pieces of information are 
required to be reported. This information includes price, head count, 
weight, quality grade, and yield grade. The frequency respondents are 
required to report is one to three times each reporting day depending 
on the species and type of information required.
    In 1999, an average of 700,000 cattle were slaughtered each week. 
Beef plants identified as small businesses contributed an estimated 
7,000 head per day, on average, to this weekly slaughter with each 
business contributing an estimated 700 head per day on average based 
upon publicly available information. At a maximum, if each of these 700 
cattle were purchased in lots of one head each and 15 pieces of 
information were required for each purchase, as many as 10,500 
individual pieces of information will have to be reported by each small 
beef packing plant each reporting day. In addition, each of the small 
beef packing plants is required to report all domestic and export sales 
of boxed beef cuts including applicable branded product. On average, 
each of these small entities slaughters an estimated 700 head per day. 
Since most beef carcasses are usually fabricated at the point of 
slaughter, each of these small beef packers process about 700 beef 
cattle into boxed beef cuts each day. Normally, boxed beef cut sales 
average about 200 boxes per transaction and each head of cattle equals 
7 boxes. This represents 25 separate transactions which, if 15 pieces 
of information were required per transaction, translates into 375 
pieces of information reported by each small beef packing business 
producing boxed beef each business day. AMS estimates the total annual 
burden on each small cattle packer and boxed beef processing entity to 
be $7,420, including $5,440 for annual costs associated with 
electronically submitting data, $150.00 for annual share of initial 
startup costs of $750, and $1,830 for the storage and maintenance of 
electronic files that were submitted to AMS.
    This figure was calculated by estimating the time required to 
complete the necessary data submission and factoring by the number of 
times reporting is required per day for an estimated total of 260 
reporting days in a year (see Paperwork Reduction Act section for a 
complete, detailed discussion).
    On average each week in 1999, 1.9 million swine were slaughtered. 
Pork plants identified as small businesses contributed an estimated 
17,000 head per day to this weekly slaughter with each business 
contributing on average an estimated 1,125 head per day, based on 
publicly available figures. If each of these head were purchased in 
lots of one head each and 15 pieces of information were required for 
each purchase, 16,875 pieces of information will have to be reported by 
each small pork packing plant per day.
    Using the same methodology as described above for cattle, AMS 
estimates the total annual burden on each small swine packing entities 
to be $5,308, including $3,328 for annual costs associated with 
electronically submitting data, $150.00 for annual

[[Page 75499]]

share of initial startup costs of $750, and $1,830 for the storage and 
maintenance of electronic files that were submitted to AMS. This 
estimate does not include costs associated with reporting sales of pork 
products which is not required to be reported.
    Sheep slaughter in 1999 averaged 70,000 head per week. All lamb 
plants contributing to this weekly slaughter are identified as small 
businesses. On average, these lamb plants each slaughtered an estimated 
2,200 head per day, based on publicly available information. If each of 
these lambs were purchased one at a time and 15 pieces of information 
were required for each transaction, 33,000 pieces of information will 
have to be reported by each small lamb packing plant. In addition, all 
lamb plants processing the equivalent of 75,000 lambs per year during 
each of the immediately preceding 5 calendar years, which are required 
to report, qualify as small businesses. These plants are required by 
regulation to report information on their sales of boxed lamb cuts. It 
is estimated that negotiated sales comprise the majority of all boxed 
lamb cut sales. Based on publicly available information, lamb plants 
processing lamb into boxed lamb cuts, on average, process the 
equivalent of an estimated 1,200 head per day. It is normal business 
practice that these lamb cuts are sold in units averaging between 25-
150 boxes per transaction, representing about 8-50 head of lambs (about 
3 boxes per head). At 1,200 head per day, there could be as many as 150 
transactions per day per reporting packer. Assuming that each of these 
150 transactions required 15 pieces of information per transaction, 
2,250 pieces of information will have to be reported by each small lamb 
packing plant.
    In any calendar year, importers of lamb meat products that imported 
an average of 5,000 metric tons of lamb meat products per year during 
the immediately preceding 5 calendar years are required to report the 
details of their sales of boxed lamb cuts including applicable branded 
product to AMS on a weekly basis. Additionally, in any calendar year, 
lamb importers that did not import an average of 5,000 metric tons of 
lamb meat products during the immediately preceding 5 calendar years if 
the Secretary determines that the person should be considered an 
importer based on the volume of lamb imports are required to report the 
above information. AMS estimates that each of the 5 importers required 
to report import, on average, 180 metric tons of lamb products per 
week. AMS estimates that the majority of these imports are contracted 
over a period of time, usually from 3-6 months, possibly as much as 12 
months. Prices are normally negotiated at the time the contract is 
entered into along with the particular cut of lamb and the volume. 
During the time the contract is in effect, prices are not expected to 
change from week to week but quantities might. Assuming that an average 
importer purchases an average of 10 different cut styles, each at a 
single price, from an average of 2 suppliers, AMS estimates that the 
weekly reporting burden for each importer includes information for up 
to 20 different transactions. Each transaction requires 7 pieces of 
information including, price, quantity, cut, trim, weight, delivery 
date, and nation of origin, for a total of 140 separate pieces of 
information.
    AMS estimates the total annual burden on each small lamb packer to 
be $7,860 including $5,875 for annual costs associated with 
electronically submitting data, $150.00 for annual share of initial 
startup costs of $750, and $1,830 for the storage and maintenance of 
electronic files that were submitted to AMS.
    AMS estimates the total annual burden on each small importer of 
lamb to be $2,070 including $87 for annual costs associated with 
electronically submitting data, $150.00 for annual share of initial 
startup costs of $750, and $1,830 for the storage and maintenance of 
electronic files that were submitted to AMS.
    Normally, few packers buy livestock or livestock products in one 
head or one head equivalent lots. Similarly, few importers buy imported 
lamb cuts in less than carlot volumes. Therefore, the estimated 
reporting burden described here reflects the maximum reporting burden 
on small businesses.
    Projected Recordkeeping. Each packer and importer required to 
report information to the Secretary must maintain such records as are 
necessary to verify the accuracy of the information provided to AMS. 
This includes information regarding price, class, head count, weight, 
quality grade, yield grade, and other factors necessary to adequately 
describe each transaction. These records are already kept by the 
industry. Reporting packers and importers are required by these 
regulations to maintain and to make available the original contracts, 
agreements, receipts, and other records associated with any transaction 
relating to the purchase, sale, pricing, transportation, delivery, 
weighing, slaughter, or carcass characteristics of all livestock. 
Reporting packers and importers are also required to maintain copies of 
the information provided to AMS. All of the above-mentioned paperwork 
must be kept for at least 2 years. Packers and importers are not 
required to report any other new or additional information that they do 
not generally have available or maintain. Further, they are not 
required to keep any information that would prove unduly burdensome to 
maintain. The paperwork burden that is imposed on the packers and 
importers is further discussed in the section entitled Paperwork 
Reduction Act that follows.
    In addition, we have not identified any relevant Federal rules that 
are currently in effect that duplicate, overlap, or conflict with this 
rule. AMS will continue to report market information collected through 
its voluntary market reporting program provided the collection of such 
information does not duplicate the information collection requirements 
of this rule.
    Professional skills required for recordkeeping under this rule are 
not different than those already employed by the reporting entities. 
Reporting will be accomplished using computers or similar electronic 
means. AMS believes the skills needed to maintain such systems are 
already in place in those small businesses affected by this rule.
    Alternatives. This rule as directed by the Act requires cattle and 
swine packing plants of a certain size to report information to the 
Secretary at prescribed times throughout the day and week. Further, 
lamb slaughter and processing plants and lamb importers of a certain 
size are required by these regulations to report information to the 
Secretary at prescribed times throughout the day and week. These 
regulations already exempt many small businesses by the establishment 
of daily slaughter, processing, and import capacity thresholds. Based 
on figures published by the National Agricultural Statistics Service 
(NASS), there were 759 cattle, 728 swine, and 561 lamb federally 
inspected slaughter plants operating in the U.S. at the end of 1999. 
AMS estimates that approximately 49 cattle plants are required to 
report information (6.5% of all federally inspected cattle plants), 50 
swine plants are required to report information (6.9% of all federally 
inspected swine plants), and 17 lamb packers and importers are required 
to report information (2.1% of all federally inspected lamb plants and 
1.3% of all lamb importers). Therefore, fully 93.5% of all cattle 
plants, 93.1% of all swine plants, and 97.9% of all lamb packers and 
98.7% of lamb importers are not required to report.

[[Page 75500]]

    AMS recognizes that a major economic impact of this rule on those 
small entities required to report involves the manner in which 
information must be reported to the Secretary. However, in developing 
these regulations AMS did consider other means by which the objectives 
of this rule could be accomplished, including reporting the required 
information by telephone, facsimile and regular mail. AMS believes 
these alternatives are not capable of meeting the program objectives, 
especially timely reporting. The Act prescribes specific times that 
reporting entities must report to AMS. Similarly, the Act prescribes 
specific times for publication of a report by AMS. AMS believes 
electronic submission to be the only method capable of allowing for AMS 
to collect, aggregate and publish reports while complying with the 
specific time-frames set forth in the Act. AMS believes it is not 
possible for the Agency to receive information over the telephone, 
facsimile or regular mail and then transcribe the information into 
electronic format before aggregating and publishing the information 
while still complying with the publication time-frames set forth in the 
Act.
    Nevertheless, in response to the comments received in response to 
the proposed rule concerning AMS developing and making available web-
based input forms for submitting data online, AMS found that some of 
the smaller entities covered under mandatory price reporting would 
benefit from such a web-based submission system. Accordingly, AMS is 
developing such a system that will be ready in time for program 
implementation.
    Additionally, to further assist small businesses, AMS may provide 
for an exception to electronic reporting in emergencies, such as power 
failures or loss of Internet accessibility, or in cases when an 
alternative is agreeable to AMS and the reporting entity.
    Other than these alternatives, AMS cannot envision any other 
alternatives to the methods of data transmission that are less 
burdensome to small businesses. AMS will work actively with those small 
businesses required to report to minimize the burden on them to the 
maximum extent practicable.
    AMS understands that unforeseen technical difficulties may occur 
during the implementation of this rule that may, in some cases, prevent 
full compliance. To assist the industry in achieving compliance, during 
the period between publication of this final rule and its effective 
date, AMS will provide assistance and training to each covered entity 
to ensure that they have been given the technical information necessary 
to comply with both methods of electronic data transmission 
requirements. Furthermore, covered entities acting in good faith in 
attempting to comply with electronic reporting requirements during the 
implementation phase will not be penalized under the enforcement 
provisions.
    Comments and Responses. In the proposed rule published March 17, 
2000, comments were invited on the reporting format, including 
alternatives from small businesses that would be less burdensome. 
Although these comments and the Agency's responses to them were 
contained in the background section of this action where the Agency 
responded to all of the comments received in response to the proposal, 
the Agency has identified those comments that specifically pertained to 
issues raised in this section and responded to them again here. 
Summaries of AMS' responses to those issues concerning this section 
follow.

Validity of Cost Burden Estimates

    To specifically respond to issues of concern to small businesses, 
the Agency's responses to the comments concerning the validity of AMS' 
cost burden estimates in the proposed rule remain unchanged. AMS's cost 
estimates along with the supporting assumptions and methodology used 
were stated in the proposed rule. These supporting assumptions and 
methodology used appeared in the Regulatory Impact Analysis, Regulatory 
Flexibility Analysis, and Paperwork Reduction Act Analysis sections of 
the proposed rule. The commenters, including small businesses, did not 
provide any detailed supporting data and information on the methodology 
used in formulating their cost estimates or any information that would 
enable AMS to determine how they derived their cost estimates. However, 
we do note that the wide range of estimates does raise concerns as to 
what assumptions and methodology were used by the commenters.
    AMS believes that one explanation for the reason why some estimates 
submitted by commenters exceeded the estimates made by AMS is that 
commenters were estimating the costs of developing systems that far 
exceeded the minimum requirements of a system that would fulfill these 
regulations. Additionally, AMS believes that some commenters may have 
included other costs associated with normal recordkeeping and 
accounting practices that are already required by existing regulations 
for those engaged in the livestock and meat packing and importing 
industries and therefore are not new costs being required by the 
implementation of these regulations.
    Nonetheless, AMS has carefully reviewed its analysis of the cost 
burden estimates for mandatory reporting. In this regard, we have added 
tables in the Regulatory Impact Analysis, Regulatory Flexibility 
Analysis, and Paperwork Reduction Act Analysis sections of this final 
rule which even more clearly itemize the supporting assumptions and 
methodology used by AMS in formulating our cost estimates. Further, we 
have adjusted our cost estimates where appropriate. Therefore, AMS 
believes we have done as comprehensive of an analysis as possible of 
the cost burden imposed by these regulations on those required to 
report.
    Additionally, AMS does not agree that allowing lot aggregation, 
exempting branded boxed beef and lamb cuts, or exempting lots of 
livestock consisting of fewer than 50 head as reporting requirements 
would reduce the cost burden on the industry. Eliminating these 
requirements will not have any effect on reducing the number of forms 
that are included in AMS's estimated reporting cost burden because the 
suggested changes are not unique to any one form. The amount of time 
required to submit the forms will not be result in any significant time 
savings as AMS expects all data submission to be accomplished through 
electronic means. These changes will not reduce the number of 
respondents required to report as none of the respondents are limited 
to selling only branded boxed beef and lamb cuts and buying livestock 
in lots of 50 head or less. Lastly, allowing respondents to aggregate 
information on lots of livestock prior to submission will require them 
to spend additional time to sort and aggregate the information, 
resulting in an increased time burden.
    AMS does agree, however, that exempting entire product categories 
would reduce the annual cost burden on the industry. Specifically, 
eliminating entire product categories will reduce the number of 
responses specified in the Paperwork Reduction Act section of the 
proposed rule.
    According to Sec. 251(d)(3) of the Act, the Secretary shall make 
information obtained under this program available to the public only if 
it conforms to aggregation guidelines established by the Secretary. 
Pursuant to Sec. 251(d)(3), the Secretary has established the following 
guidelines: Submitted information will only be published by

[[Page 75501]]

USDA if (a) it is obtained from no fewer than 3 packers or importers 
representing a minimum of three companies, (b) the information from any 
one packer or importer represents not more than 60 percent of the 
information to be published, and (c) AMS does not have any reason to 
believe the information cannot be reported in a manner that protects 
the confidentiality of the source packer.
    Because there is only one entity engaged in the business of 
purchasing imported lamb carcasses, AMS cannot report this information 
without disclosing the identity of the entity reporting. By requiring 
this entity to report its purchases of imported lamb carcasses that AMS 
knows that it would be unable to publish, the Agency believes this 
requirement would be an unnecessary burden placed upon the entity.
    Accordingly, in this final rule, importers are not required to 
report market information on purchases of imported lamb carcasses. 
Consequently, the estimated annual reporting burden for Form LS-129-
Lamb Carcass Report has been reduced by 43 hours or $860 per year. The 
total cost burden for lamb carcass reporting in this final rule has 
been adjusted accordingly.
    Nevertheless, if a sufficient number of entities enter the business 
of importing lamb carcasses that AMS believes it would be able to 
publish the information obtained, AMS intends on initiating rulemaking 
to amend these regulations to require the reporting of information by 
importers on purchases of imported lamb carcasses.
    Additionally, in contrast to the proposed rule, this final rule 
will not require lamb importers to report their purchases of imported 
boxed lamb cuts. Although the proposed regulations required lamb 
importers to report both their purchases and sales of imported boxed 
lamb cuts, the Agency has determined that because the reporting of lamb 
cuts sold in portion cut form (e.g., chops, steaks, etc.) are not to be 
reported for either domestic or imported lamb, the reporting of both 
the purchases and sales of imported boxed lamb cuts would not provide a 
significant amount of additional market information over what will be 
obtained by only requiring importers to report information on their 
sales of imported boxed lamb cuts not sold in portion cut form.
    AMS had originally intended to obtain market information concerning 
the purchases and sales of imported boxed lamb cuts in an effort to 
disseminate more complete market information concerning the prices 
being paid and received for imported lamb meat products entering the 
U.S. market. However, because packers and importers are exempt from 
reporting information concerning any boxed lamb cuts sold in portion 
cut form, the only product lamb importers produce from the processing 
of imported boxed lamb cuts not in portion cut form, AMS determined 
that requiring the reporting of this information was not necessary as 
these products could be processed into portion cut form before export 
to the United States, thereby being exempt from these reporting 
provisions. Further, information concerning the volume and value of 
imported boxed lamb cuts that are not sold in portion cut form from 
importers who buy and sell imported boxed lamb cuts not in portion cut 
form, this information is already being obtained by the requirement 
that importers report the prices they receive for their sales of those 
products.
    As a result of the removal of the requirement for lamb importers to 
report their purchases of imported boxed lamb cuts, the estimated 
annual reporting burden for Form LS-128-Boxed Lamb Cuts Report has been 
reduced by 26 hours or $520 per year. The total cost burden for boxed 
lamb cut reporting in this final rule has been adjusted accordingly.
    Given that all of those lamb importers required to report are 
classified as small businesses, these changes specifically benefits 
small businesses.

Electronic Reporting of Information

    AMS agrees with the points raised by the commenters regarding 
electronic data submission discussed earlier. AMS's own estimates of 
cost burdens indicated that the cost of submitting information by any 
method other than electronic would be cost-prohibitive, error prone, 
and unsecured. For the same reasons, AMS will grant exceptions to 
electronic reporting only in emergency cases such as power failures or 
loss of Internet accessibility. AMS will also provide web-based input 
screens as an alternative option for entities to use when submitting 
information. AMS computer specialists have conducted on-site visits 
over the past year to many packers who will be required to report to 
discuss and evaluate electronic recordkeeping systems employed by the 
industry.
    AMS understands commenter's concerns about their ability to comply 
with these reporting requirements in a timely, accurate manner, in 
order to avoid any enforcement penalties. This is particularly 
important in the context of an untested, electronic reporting process 
and disparate computing resources among reporting entities. AMS further 
understands that unforeseen technical difficulties may occur during the 
implementation of this rule which may, in some cases, prevent full 
compliance. Recognizing these concerns and acknowledging our 
responsibility to provide flexibility in dealing with small business as 
directed by the President in the 1995 Regulatory Reform--Waiver of 
Penalties and Reduction memorandum, entities acting in good faith in 
attempting to establish a data transfer technology and reporting 
process that will comply with the electronic reporting requirements 
will not be penalized under the enforcement provisions.
    To further assist the industry in achieving compliance, educational 
and outreach sessions will be held around the country immediately upon 
publication of this final rule. In these sessions, AMS will actively 
assist each reporting entity in understanding how their information 
technology infrastructures and related resources should be configured 
in order to ensure interoperability with the electronic transaction 
system developed by AMS. AMS will document and provide the reporting 
entities with standards and protocols associated with the transaction. 
Among other topics, these sessions will also provide information on 
implementing and using digital certificates, acceptable submission 
formats, the newly designed web-based input method, output report 
designs, data aggregation guidelines, and AMS' electronic transaction 
system. In addition, AMS plans to beta test the technology to implement 
the rule during the time between publication of this final rule and its 
effective date and all entities required to report will be encouraged 
to participate in the beta testing program. Any feedback received 
during this outreach and testing period will be used to revise the 
reporting requirements, input and output formats, and process 
accordingly.
    In response to the comment concerning AMS developing and making 
available a web-based input forms for submitting data online, AMS found 
that some of the smaller entities covered under mandatory price 
reporting would benefit from such a web-based submission system. 
Accordingly, AMS is developing such a system that will be ready in time 
for program implementation.
    Although AMS does not believe that this change will result in any 
time or cost savings for those required to report, or that this 
alternative will prove a feasible alternative for larger companies who 
are required to submit large

[[Page 75502]]

volumes of information, AMS will provide this alternative to those 
small businesses seeking an alternate method of submitting information 
who do not wish to develop their own electronic versions of the AMS 
reporting forms (a complete analysis is provided in the Paperwork 
Reduction Act section).

Prior Day Swine Reporting

    The time requirements for the reporting of prior day swine 
information are in accordance with the Act (Sec. 232(c)(1)(B)) and this 
final rule reflects that provision of the Act. Nonetheless, information 
not available in time for the prior day swine reporting should be 
reported, and will be published, as a part of the next report.
    Several small businesses expressed concern over these time 
requirements and the result this requirement would have on them being 
required to hire additional staff. AMS has attempted to manage the 
impact of this program on small businesses wherever possible. 
Nonetheless, there are certain requirements that are provided by 
statute and basic to program provisions.

Distributive Sales

    Recognizing that requiring the reporting of distributive sales 
would specifically target small businesses, that the distributive trade 
is unique when compared to traditional boxed beef trade, the relatively 
small percentage such trades represent of all boxed beef sales, and the 
negative effect the inclusion of such unrelated information would have 
on the aggregated reports AMS would publish, it was never AMS's 
intention that the information concerning the distributive trade would 
be included in this program as AMS believes the reporting of such 
information is not contemplated by the Act.
    To clarify that distributive sales are not to be reported, in this 
final rule, AMS has included definitions of a carlot of boxed beef, 
boxed lamb, and lamb carcasses. For purposes of boxed beef cuts 
reporting, a carlot is any transaction between a buyer and a seller 
involving 2 or less delivery stops consisting of one or more individual 
boxed beef items. For lamb carcasses and boxed lamb cuts reporting, a 
carlot is any transaction between a buyer and a seller involving 3 or 
less delivery stops consisting of one or more individual boxed lamb 
cuts or any combination of carcass weights. By adding these 
definitions, AMS has clarified the regulations concerning reporting of 
distributive trade of boxed beef and boxed lamb cuts and lamb 
carcasses. Sections 59.100 and 59.300 of these regulations have been 
revised accordingly.
    This clarification should lessen the impact this regulation will 
have on small businesses.

Maintenance of Records

    The Agency has tried to make the records required to be submitted 
and maintained under this final rule the minimum needed to achieve the 
objectives of the Act and has specifically considered the impact the 
submission and retention of such records will have on small businesses. 
Further, based upon AMS's knowledge of common industry practices and in 
being consistent with the requirements of the Act, these regulations do 
not require the reporting of any new or additional information that is 
either not generally available or maintained by packers or the 
provision of which would be unduly burdensome.

Reporting of Auction Purchases

    As already discussed earlier in this section, AMS has clarified 
that purchases of livestock through auction markets are not required by 
this final rule. As auction purchases are made in an open, public 
setting between one seller and many buyers, auction purchases do not 
meet any of the types of purchases defined by the Act as a ``type of 
purchase'' (Sec. 221(8)). Accordingly, packers required to submit 
information under mandatory price reporting will not be required to 
report information on transactions of livestock purchased at auction 
markets by either salaried employees of a packer or a person that buys 
on commission for a packer. However, livestock purchased by a packer 
from a livestock dealer, a purchase between one buyer and one seller 
not in an public setting, must be reported because this constitutes a 
negotiated trade which is defined by the Act as a ``type of purchase'' 
reportable under mandatory reporting. Accordingly, packers must 
institute systems to distinguish between purchases from auctions and 
purchases from direct sources for the purposes of mandatory reporting.

Reporting of Lamb and Lamb Products

    AMS recognizes that fully all of the lamb packers required to 
report are considered small businesses. However, Sec. 241 of the Act 
authorizes the Secretary to establish a program of mandatory lamb price 
information reporting that will ``(1) provide timely, accurate, and 
reliable market information; (2) facilitate more informed marketing 
decisions; and (3) promote competition in the lamb slaughtering 
industry.'' If the Secretary takes such action, an opportunity for 
comment on the proposed regulations must be provided. Under this 
authority, a program of mandatory lamb price reporting was included in 
the proposed rule and the opportunity for comment was provided.
    Additionally, AMS does not believe that it has made these 
requirements more comprehensive than the reporting for cattle or swine, 
but does believe it has met the intent of Congress and is operating 
under the authority of the Act.

Packer Thresholds

    The establishment of cattle and swine packer thresholds by the Act 
and the establishment of lamb packer and importer thresholds by these 
regulations is an important component of the Agency's efforts to ensure 
this regulation does not unfairly impact small businesses. By exempting 
the vast majority of small businesses from being required to comply 
with these regulations greatly reduces the overall impact of these 
regulations on small businesses as a whole.
    Nevertheless, to specifically respond to the concerns raised by 
commenters, the definitions of cattle and swine packers put forth in 
the proposed regulations are defined by the Act. However, unlike cattle 
and swine, the Act does not provide a definition of a lamb packer or 
importer.
    AMS believes that lowering the lamb packer threshold from what was 
put forth in the proposed regulation will create a burden on additional 
lamb packers without a gain of significant market information. 
Additionally, the 75,000 head per year threshold was set to be 
compatible with those thresholds set by the Act for cattle and swine 
packers.
    Similarly, AMS established the 5,000 metric ton lamb importer 
threshold because it will cover a comparable percentage of the lamb 
imports as slaughter and processing are being covered by the cattle, 
swine and lamb packer definitions, or approximately 80% of lamb 
imported into the U.S. (According to U.S. Customs Service published 
data, in 1999, 40,301 metric tons were imported by the U.S.).
    The importer capacity threshold would have to be reduced to 2,500 
metric tons to cover the remaining 20% of lamb meat imports. 
Additionally, the products imported by many of these operations are so 
unique that AMS believes it would be unable to report them without 
disclosing proprietary information.
    For the reasons stated above, none of the suggested changes to the 
cattle

[[Page 75503]]

packer, swine packer, lamb packer, or lamb importer definitions are 
adopted.

Voluntary Reporting Role

    As already discussed, AMS intends to continue many voluntary 
reporting programs. AMS has no plans to discontinue coverage of any 
voluntary-based market news reports not affected by mandatory 
reporting, including reports covering livestock auction sales, packer 
sales of pork cuts and by-products, feeder cattle sales, feeder pig 
sales, and grain trading. Many of those entities that will participate 
in these voluntary market news programs are small businesses.
    In some instances, mandatory reporting may provide some of the 
information that is already being provided under voluntary reporting. 
This would include some transactions of packer direct purchases of 
slaughter cattle, packer sales of boxed beef and lamb cuts including 
applicable branded boxed cuts, packer sales of lamb carcasses, and 
packer negotiated purchases of swine. The market reports reflecting 
this information will continue to be published but the basis of the 
market reports will be more comprehensive and will become mandatory 
information.
    In some instances, mandatory reporting will provide new information 
that has never been reported under the existing voluntary reporting 
program. AMS anticipates that this information will provide the basis 
for publishing market news reports not previously provided for under 
voluntary reporting. This will include reports covering the prior day 
swine market, forward contract and formula marketing arrangement cattle 
purchases, packer-owned cattle and lamb information, sales of imported 
boxed lamb cuts, including applicable branded product; and live lamb 
premiums and discounts.
    The Act requires the Secretary to encourage voluntary reporting by 
packers to which the mandatory reporting requirements do not apply. 
However, for those small businesses not affected by these regulations, 
since participation in such programs is voluntary, the Agency does not 
look to this as a burden being placed upon them. AMS will also 
encourage voluntary reporting in markets not covered under mandatory 
reporting.

Reporting Branded Products

    As already discussed in the section responding to all of the 
comments received in response to these regulations, upon further review 
of the requirements proposed in Sec. 57.103 and Sec. 57.303 of the 
proposed rule for reporting sales of branded boxed beef and lamb, the 
language in Sec. 59.103 and Sec. 59.303 of this final rule has been 
clarified to require the reporting of only those branded products 
produced and marketed on their quality, yield, or breed characteristics 
or boxed beef cuts produced and marketed under one of USDA's Meat 
Grading and Certification Branch, Certified Beef programs. These 
products are not unique to any one packer and can be produced by anyone 
in the industry. These sections no longer require the mandatory 
reporting of branded products where the brand is exclusive to a packer.
    AMS is developing formats for those reports it intends to publish 
as a result of mandatory price reporting. These reports will be made 
available as a part of the educational and outreach component being 
developed by AMS to facilitate the transition from voluntary market 
news reporting to mandatory market news reporting during the period 
between publication of this final rule and its effective date. In 
creating these reports, AMS is taking the necessary steps to ensure 
confidentiality of the source data as required by the Act. Brand names 
reported to AMS will not be disclosed but will only be used to identify 
branded boxed beef and lamb cuts for aggregation into branded 
categories in the published reports.
    This clarification should aid those small businesses that were 
concerned this regulation would compromise the competitiveness of their 
company-specific branded beef and lamb programs.

Paperwork Reduction Act

    This rule contains recordkeeping and submission requirements that 
were subject to public comment and review by the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 
U.S.C. Chapter 35). Comments were solicited in the proposal for these 
regulations that was published in the March 17, 2000, Federal Register. 
A summary of the comments AMS received and the Agency's responses to 
those comments are at the end of this section.
    In accordance with 5 CFR Part 1320, we include the description of 
the reporting and recordkeeping requirements and an estimate of the 
annual burden on packers required to report information under this 
rule. Modifications to these regulations made in response to the 
comments that affected the recordkeeping and submission requirements of 
this final rule have been incorporated into this section. Because there 
was insufficient time for a normal clearance procedure, AMS requested 
emergency processing and received temporary approval from OMB for the 
use of the information collection and recordkeeping requirements that 
we will use to implement the mandatory livestock reporting program on 
an expedited basis.
    Title: Livestock Mandatory Reporting Act of 1999.
    OMB Number: 0581-0186.
    Expiration Date of Assessment: November 2003.
    Type of Request: Extension.
    Abstract: The information collection and recordkeeping requirements 
in this regulation are essential to establishing and implementing a 
mandatory program of livestock and livestock products reporting. Based 
on the information available, AMS estimates that there are 49 beef 
packer plants, 50 pork packer plants, 12 lamb packer plants and 6 lamb 
importers that are required to report market information under this 
rule (1 lamb entity is both a packer and an importer). These companies 
have similar recordkeeping systems and business operation practices and 
conduct their operations in a similar manner. AMS believes that all of 
the information required under this rule can be collected from existing 
materials and systems and that these materials and systems can be 
adapted to satisfy the forms. The PRA also requires AMS to measure the 
recordkeeping burden. Under this rule, each packer and importer 
required to report must maintain and make available upon request for 2 
years, such records as are necessary to verify the accuracy of the 
information required to be reported. These records include original 
contracts, agreements, receipts, and other records associated with any 
transaction relating to the purchase, sale, pricing, transportation, 
delivery, weighing, slaughter, or carcass characteristics of all 
livestock. Under this rule, the electronic data files which the packers 
are required to utilize when submitting information to AMS will have to 
be maintained as these files provide the best record of compliance. The 
recordkeeping burden includes the amount of time needed to store and 
maintain records. AMS estimates that, since records of original 
contracts, agreements, receipts, and other records associated with any 
transaction relating to the purchase, sale, pricing, transportation, 
delivery, weighing, slaughter, or carcass characteristics of all 
livestock are stored and maintained as a matter of normal business 
practice by these companies for a period in excess of 2 years, 
additional annual costs will nominal. AMS estimates the

[[Page 75504]]

annual cost per respondent for the storage of the electronic data files 
which were submitted to AMS in compliance with the reporting provisions 
of this rule to be $1,830.00. This estimate includes the cost of 
electronic data storage media, backup electronic data storage media, 
and backup software required to maintain an estimated annual electronic 
recordkeeping and backup burden of 42 megabytes, on average, per 
respondent. In addition, this estimate includes the cost per employee 
to maintain such records which is estimated to average 70 hours per 
year at $20.00 per hour for a total salary component cost of $1,400.00 
per year.

                Annual Recordkeeping Cost Per Respondent
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Labor hours per year.......................................           70
Labor cost per hour........................................     x $20.00
                                                            ------------
Sub-total labor cost per year..............................    $1,400.00
Electronic storage cost\1\.................................    + $430.00
                                                            ------------
      Total recordkeeping cost.............................   $1,830,00
------------------------------------------------------------------------
\1\ Includes cost of hard electronic storage (estimated to average 42 Mb/
  year), backup tape media, backup tape drive, and backup software.

    In this rule, information collection requirements include the 
submission of the required information on a daily and weekly basis in 
the standard format provided in the following forms: (1) Live Cattle 
Daily Report (Current Established Prices), (2) Live Cattle Daily Report 
(Committed and Delivered Cattle), (3) Live Cattle Weekly Report 
(Forward Contract and Packer-Owned), (4) Live Cattle Weekly Report 
(Formula Purchases), (5) Cattle Premiums and Discounts Weekly Report, 
(6) Boxed Beef Daily Report, (7) Swine Prior Day Report, (8) Swine 
Daily Report, (9) Swine Noncarcass Merit Premium Weekly Report, (10) 
Live Lamb Daily Report (Current Established Prices), (11) Live Lamb 
Daily Report (Committed and Delivered Lambs), (12) Live Lamb Weekly 
Report (Forward Contract and Packer-Owned), (13) Live Lamb Weekly 
Report (Formula Purchases), (14) Lamb Premiums and Discounts Weekly 
Report, (15) Boxed Lamb Report, and (16) Lamb Carcass Report. Copies of 
these 16 forms are included in Appendices at the end of this rule. 
Cattle packers will utilize six of these forms (Appendix A) when 
reporting information to AMS including two for daily cattle reporting, 
three for weekly cattle reporting, and one for daily boxed beef cuts 
reporting. Swine packers will utilize three forms (Appendix B), two for 
daily reporting of swine purchases and one for weekly reporting of non-
carcass merit premium information. Lamb packers will utilize seven of 
these forms (Appendix C) when reporting information to AMS including 
two for daily lamb reporting, three for weekly lamb reporting, one for 
daily and weekly boxed lamb cuts reporting and one for daily and weekly 
lamb carcass reporting. Lamb importers will utilize one of these forms 
when reporting information to AMS for reporting weekly imported boxed 
lamb cut sales.
    These information collection requirements have been designed to 
minimize disruption to the normal business practices of the affected 
entities. Each of these forms requires the minimal amount of 
information necessary to properly describe each reportable transaction, 
as required under this rule. The number of forms is a result of an 
attempt to reduce the complexity of each form.
(1) Live Cattle Daily Report (Current Established Prices): Form LS-113.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .17 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 520 (2 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 4,332 hours.
    Total Cost: $86,640.
(2) Live Cattle Daily Report (Committed and Delivered Cattle): Form LS-
114.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .17 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 520 (2 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 4,332 hours.
    Total Cost: $86,640.
(3) Live Cattle Weekly Report (Forward Contract and Packer-Owned): Form 
LS-115.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .25 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 637 hours.
    Total Cost: $12,740.
(4) Live Cattle Weekly Report (Formula Purchases): Form LS-116.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .25 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 637 hours.
    Total Cost: $12,740.
(5) Cattle Premiums and Discounts Weekly Report: Form LS-117.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .08 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 204 hours.
    Total Cost: $4,080.
(6) Boxed Beef Daily Report: Form LS-126.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .125 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on domestic and export boxed beef cut sales to the 
Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 520 (2 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 3,185 hours.
    Total Cost: $63,700.

[[Page 75505]]

(7) Swine Prior Day Report: Form LS-118.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .25 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live swine purchases to the Secretary.
    Estimated Number of Respondents: 50 plants.
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 3,250 hours.
    Total Cost: $65,000.
(8) Swine Daily Report: Form LS-119.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .17 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live swine purchases to the Secretary.
    Estimated Number of Respondents: 50 plants.
    Estimated Number of Responses per Respondent: 520 (2 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 4,420 hours.
    Total Cost: $88,400.
(9) Swine Noncarcass Merit Premium Weekly Report: Form LS-120.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .25 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live swine purchases to the Secretary.
    Estimated Number of Respondents: 50 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 650 hours.
    Total Cost: $13,000.
(10) Live Lamb Daily Report (Current Established Prices): Form LS-121.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .34 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 707 hours.
    Total Cost: $14,140.
(11) Live Lamb Daily Report (Committed and Delivered Lambs): Form LS-
122.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .34 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 707 hours.
    Total Cost: $14,140.
(12) Live Lamb Weekly Report (Forward Contract and Packer-Owned): Form 
LS-123.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .25 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 104 hours.
    Total Cost: $2,080.
(13) Live Lamb Weekly Report (Formula Purchases): Form LS-124.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .25 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 104 hours.
    Total Cost: $2,080.
(14) Lamb Premiums and Discounts Weekly Report: Form LS-125.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .08 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 33 hours.
    Total Cost: $660.
(15) Boxed Lamb Report: Form LS-128.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .167 hours per electronically submitted 
response for domestic packing plants and .084 hours per electronically 
submitted response for importers.
    Respondents: Packer processing plants and importers required to 
report information on boxed lamb cut sales to the Secretary.
    Estimated Number of Respondents: 14 entities (including 1 entity 
that both processes and imports).
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days) for domestic packing plants; 52 (1 per week for 52 weeks) for 
importers.
    Estimated Total Annual Burden on Respondents: 391 hours for 
domestic packing plants and 26 hours for importers.
    Total Cost: $7,810 for domestic packing plants and $520 for 
importers for a total of $8,330.00.
(16) Lamb Carcass Report: Form LS-129.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .167 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on lamb carcass sales to the Secretary.
    Estimated Number of Respondents: 8 entities.
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 347 hours.
    Total Cost: $6,940.

[[Page 75506]]

Breakdown of Estimated Data Submission Cost Burden

                                 I.--Number of Responses per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                                Reporting                                               Total
                     Form                          days                    Responses                  responses
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113...................................          260   x  2 daily                           =          520
 
    LS-114...................................          260   x  2 daily                           =          520
 
    LS-115...................................           52   x  1 weekly                          =           52
 
    LS-116...................................           52   x  1 weekly                          =           52
 
    LS-117...................................           52   x  1 weekly                          =           52
 
    LS-126...................................          260   x  2 daily                           =          520
 
Swine:
    LS-118...................................          260   x  1 daily                           =          260
 
    LS-119...................................          260   x  2 daily                           =          520
 
    LS-120...................................           52   x  1 weekly                          =           52
 
Lamb:
    Domestic:................................
    LS-121...................................          260   x  1 daily                           =          260
 
    LS-122...................................          260   x  1 daily                           =          260
 
    LS-123...................................           52   x  1 weekly                          =           52
 
    LS-124...................................           52   x  1 weekly                          =           52
 
    LS-125...................................           52   x  1 weekly                          =           52
 
    LS-128...................................          260   x  1 daily                           =          260
 
    LS-129...................................          260   x  1 daily                           =          260
 
    Importer:
    LS-128...................................           52   x  1 weekly                          =           52
 
----------------------------------------------------------------------------------------------------------------


                             II.--Number of Submission Hours per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                               Submissions/                       Hours/           Total hours/
                    Form                           year                         submission             year
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..................................             520              x              .17   =           88.40
    LS-114..................................             520              x              .17   =           88.40
    LS-115..................................              52              x              .25   =           13.00
    LS-116..................................              52              x              .25   =           13.00
    LS-117..................................              52              x              .08   =            4.16
    LS-126..................................             260              x             .125   =           65.00
Swine:
    LS-118..................................             260              x              .25   =           65.00
    LS-119..................................             260              x              .17   =           88.40
    LS-120..................................              52              x              .25   =           13.00
Lamb:
    Domestic:
    LS-121..................................             260              x              .34   =           88.40
    LS-122..................................             260              x              .34   =           88.40
    LS-123..................................              52              x              .25   =           13.00
    LS-124..................................              52              x              .25   =           13.00
    LS-125..................................              52              x              .08   =            4.16
    LS-128..................................             260              x             .167   =           43.40
    LS-129..................................             260              x             .167   =           43.40
    Importer:
    LS-128..................................              52              x             .084   =            4.37
----------------------------------------------------------------------------------------------------------------


                               III.--Total Submission Cost per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                                           Total hours/                           Total dollars/
                          Form                                 year              Cost/hour             year
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..............................................           88.40   x          $20.00   =       $1,768.00
 
    LS-114..............................................           88.40   x           20.00   =        1,768.00
 
    LS-115..............................................           13.00   x           20.00   =          260.00
 
    LS-116..............................................           13.00   x           20.00   =          260.00
 
    LS-117..............................................            4.16   x           20.00   =           83.20
 
    LS-126..............................................           65.00   x           20.00   =        1,300.00
 
                                                         ----------------                        ---------------
          Totals........................................          271.96   x           20.00   =        5,440.00
 
----------------------------------------------------------------------------------------------------------------
Swine:
    LS-118..............................................           65.00   x           20.00   =        1,300.00
 

[[Page 75507]]

 
    LS-119..............................................           88.40   x           20.00   =        1,768.00
 
    LS-120..............................................           13.00   x           20.00   =          260.00
 
                                                         ----------------                        ---------------
          Totals........................................          166.40   x           20.00   =        3,328.00
 
----------------------------------------------------------------------------------------------------------------
Lamb:
    Domestic:
    LS-121..............................................           88.40   x           20.00   =        1,768.00
 
    LS-122..............................................           88.40   x           20.00   =        1,768.00
 
    LS-123..............................................           13.00   x           20.00   =          260.00
 
    LS-124..............................................           13.00   x           20.00   =          260.00
 
    LS-125..............................................            4.16   x           20.00   =           83.20
 
    LS-128..............................................           43.40   x           20.00   =          868.00
 
    LS-129..............................................           43.40   x           20.00   =          868.00
 
                                                         ----------------                        ---------------
          Total.........................................  ..............      ..............            5,875.00
----------------------------------------------------------------------------------------------------------------
    Importer:
    LS-128..............................................            4.37   x           20.00   =          +87.00
 
                                                         ----------------                        ---------------
          Totals........................................          298.13   x           20.00   =        5,962.00
 
----------------------------------------------------------------------------------------------------------------


                              IV.--Total Yearly Submission Cost for all Respondents
----------------------------------------------------------------------------------------------------------------
                                                          Total dollars/         Number of
                          Form                                 year             respondents         Total cost*
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..............................................       $1,768.00   x              49   =      $86,640.00
 
    LS-114..............................................        1,768.00   x              49   =       86,640.00
 
    LS-115..............................................          260.00   x              49   =       12,740.00
 
    LS-116..............................................          260.00   x              49   =       12,740.00
 
    LS-117..............................................           83.20   x              49   =        4,080.00
 
    LS-126..............................................        1,300.00   x              49   =       63,700.00
 
                                                         ----------------                        ---------------
          Totals........................................        5,440.00   x              49   =      266,560.00
 
----------------------------------------------------------------------------------------------------------------
Swine:
    LS-118..............................................        1,300.00   x              50   =       65,000.00
 
    LS-119..............................................        1,768.00   x              50   =       88,400.00
 
    LS-120..............................................          260.00   x              50   =       13,000.00
 
                                                         ----------------                        ---------------
          Totals........................................        3,328.00   x              50   =      166,400.00
 
----------------------------------------------------------------------------------------------------------------
Lamb:
    Domestic:
    LS-121..............................................        1,768.00   x               8   =       14,140.00
 
    LS-122..............................................        1,768.00   x               8   =       14,140.00
 
    LS-123..............................................          260.00   x               8   =        2,080.00
 
    LS-124..............................................          260.00   x               8   =        2,080.00
 
    LS-125..............................................           83.20   x               8   =          670.00
 
    LS-129..............................................          868.00   x               8   =        6,950.00
 
                                                         ----------------                        ---------------
          Total.........................................        5,007.00   x               8   =       40,060.00
 
    LS-128..............................................          868.00   x               9   =       +7,810.00
 
                                                         ----------------                        ---------------
          Total.........................................  ..............      ..............           47,870.00
----------------------------------------------------------------------------------------------------------------
    Importer:
    LS-128..............................................           87.00   x               6   =          520.00
 
                                                         ----------------                        ---------------
          Total.........................................  ..............      ..............          48,390.00
----------------------------------------------------------------------------------------------------------------
*dollars values rounded to nearest $10.00.

    Estimated Total Annual Burden on Respondents by Species:
    Live Cattle and Boxed Beef: $363,580 including $266,560 for annual 
costs associated with electronically submitted responses (13,328 annual 
hours (271.96 annual hours per 49 respondents) @ $20.00 per hour), 
initial electronic data transfer setup costs of $7,350 ($750.00 
prorated over 5 years = $150.00 per 49 respondents), and $89,670 
($1,830 per 49 respondents) for the storage and

[[Page 75508]]

maintenance of electronic files that were submitted to AMS.
    Live Swine: $265,400 including $166,400 for annual costs associated 
with electronically submitted responses (8,320 annual hours (166.40 
annual hours per 50 respondents) @ $20.00 per hour), initial electronic 
data transfer setup costs of $7,500 ($750.00 prorated over 5 years = 
$150.00 per 50 respondents), and $91,500 ($1,830 per 50 respondents) 
for the storage and maintenance of electronic files that were submitted 
to AMS.
    Live Lambs, Boxed Lamb, and Lamb Carcasses: $83,620 including 
$70,700 for packers ($52,875 for annual costs associated with 
electronically submitted responses (2,643.75 annual hours (293.75 
annual hours per 9 respondents) @ $20.00 per hour), initial electronic 
data transfer setup costs of $1,350 ($750.00 prorated over 5 years = 
$150.00 per 9 respondents), and $16,470 ($1,830 per 9 respondents) for 
the storage and maintenance of electronic files that were submitted to 
AMS) and $12,400 for importers ($520 for annual costs associated with 
electronically submitted responses (26.2 annual hours (4.37 annual 
hours per 6 respondents) @ $20.00 per hour), initial electronic data 
transfer setup costs of $900 ($750.00 prorated over 5 years = $150.00 
per 6 respondents), and $10,980 ($1,830 per 6 respondents) for the 
storage and maintenance of electronic files that were submitted to 
AMS).
    In the proposed rule published March 17, 2000, comments were 
invited on: (1) The accuracy of the Agency's burden estimate of the 
proposed collection of information including the validity of the 
methodology and the assumptions used; (2) ways to minimize the burden 
of the collection of information on those who would be required to 
respond, including through the use of appropriate electronic collection 
methods; (3) whether the proposed collection of information was 
sufficient or necessary for the proper performance of the functions of 
the agency as mandated by the Act; and (4) ways to enhance the quality, 
utility, and clarity of the information to be collected.
    Although these comments and the Agency's responses to them were 
contained in the background section of this action where the Agency 
responded to all of the comments received in response to the proposal, 
the Agency has identified those comments that specifically pertained to 
issues raised in this section and responded to them again here. 
Summaries of the comments AMS received and the responses by the Agency 
to those comments follow.

Validity of Cost Burden Estimates

    AMS received 468 comments concerning the validity of the cost 
burden estimates for implementing mandatory reporting in the propose 
rule. Four commenters agreed with AMS's estimate of the cost burden of 
mandatory reporting in the proposed rule. However, most commenters 
questioned AMS's cost burden estimates suggesting that the estimates 
were understated. Numerous commenters argued that the cost burden 
associated with mandatory reporting on small entities amounted to an 
economic hardship that would either force them to close their 
operations, sell out to a larger firm, or require they pass these 
additional costs on to producers and consumers which could negatively 
impact domestic markets for livestock and livestock products.
    Many commenters offered a wide range of cost burden estimates for 
mandatory price reporting. These estimates ranged from $5,000 to 
$6,560,000, and included initial start-up costs and annual costs of 
compliance. The estimated initial setup costs ranged from $15,000 to 
$700,000 with most of the setup cost estimates ranging from $30,000 to 
$75,000. Estimates for annual operating costs ranged from $5,000 to 
$400,000 with most of the estimates ranging from $40,000 to $105,000. A 
few commenters submitted industry cost estimates on a cost per head 
basis, as a cost multiple of the AMS cost estimates, and on an hourly 
basis.
    A few commenters suggested that AMS could reduce the reporting cost 
burden by changing some of the reporting requirements of the proposed 
rule. They recommended allowing lot aggregation, exempting branded 
boxed beef and lamb cuts, exempting lots of livestock consisting of 
fewer than 50 head, and exempting information which AMS would not be 
able to publish in reports due to confidentiality concerns as examples 
of reporting requirements that could be eliminated.
    As already discussed earlier in this section and in the section 
responding to all of the comments received in response to the proposed 
rule, AMS's cost estimates along with the supporting assumptions and 
methodology used were stated in the proposed rule. These supporting 
assumptions and methodology used appeared in the Regulatory Impact 
Analysis, Regulatory Flexibility Analysis, and Paperwork Reduction Act 
Analysis sections of the proposed rule.
    However, with specific regard to this section, the commenters did 
not provide any detailed supporting data and information on the 
methodology used in formulating their cost estimates or any information 
that would enable AMS to determine how they derived their cost 
estimates. We do note that the wide range of estimates does raise 
concerns as to what assumptions and methodology were used by the 
commenters.
    AMS believes that one explanation for the reason why some estimates 
submitted by commenters exceeded the estimates made by AMS is that 
commenters were estimating the costs of developing systems that far 
exceeded the minimum requirements of a system that would fulfill these 
regulations. Additionally, AMS believes that some commenters may have 
included other costs associated with normal recordkeeping and 
accounting practices that are already required by existing regulations 
for those engaged in the livestock and meat packing and importing 
industries and therefore are not new costs being required by the 
implementation of these regulations.
    Nonetheless, AMS has carefully reviewed its analysis of the cost 
burden estimates for mandatory reporting. In this regard, we have added 
tables in this analysis which even more clearly itemize the supporting 
assumptions and methodology used by AMS in formulating our Paperwork 
Reduction Act analysis cost estimates. Further, we have adjusted our 
cost estimates where appropriate. Therefore, AMS believes we have done 
as comprehensive of an analysis as possible of the cost burden imposed 
by these regulations on those required to report.
    Additionally, AMS does not agree that allowing lot aggregation, 
exempting branded boxed beef and lamb cuts, or exempting lots of 
livestock consisting of fewer than 50 head as reporting requirements 
would reduce the cost burden on the industry. Eliminating these 
requirements will not have any effect on reducing the number of forms 
that are included in AMS's estimated reporting cost burden because the 
suggested changes are not unique to any one form. The amount of time 
required to submit the forms will not result in any significant time 
savings as AMS expects all data submission to be accomplished through 
electronic means. These changes will not reduce the number of 
respondents required to report as none of the respondents are limited 
to selling only branded boxed beef and lamb cuts and buying livestock 
in lots of 50 head or less. Lastly, allowing respondents to aggregate 
information on lots of livestock prior to submission will require them 
to spend additional time to sort and aggregate the

[[Page 75509]]

information, resulting in an increased time burden.
    AMS does agree, however, that exempting entire product categories 
would reduce the annual cost burden on the industry. Specifically, 
eliminating entire product categories will reduce the number of 
responses specified in this section when compared with the proposed 
rule.
    According to Sec. 251(d)(3) of the Act, the Secretary shall make 
information obtained under this program available to the public only if 
it conforms to aggregation guidelines established by the Secretary. 
Pursuant to Sec. 251(d)(3), the Secretary has established the following 
guidelines: Submitted information will only be published by USDA if (a) 
it is obtained from no fewer than 3 packers or importers representing a 
minimum of three companies, (b) the information from any one packer or 
importer represents not more than 60 percent of the information to be 
published, and (c) AMS does not have any reason to believe the 
information cannot be reported in a manner that protects the 
confidentiality of the source packer.
    Because there is only one entity engaged in the business of 
purchasing imported lamb carcasses, AMS cannot report this information 
without disclosing the identity of the entity reporting. By requiring 
this entity to report its purchases of imported lamb carcasses that AMS 
would be unable to publish, the Agency believes this requirement would 
be an unnecessary burden placed upon the entity.
    Accordingly, in this final rule, importers are not required to 
report market information on purchases of imported lamb carcasses. 
Consequently, the estimated annual reporting burden for Form LS-129-
Lamb Carcass Report has been reduced by 43 hours or $860 per year. The 
total cost burden for lamb carcass reporting in this final rule has 
been adjusted accordingly.
    Nevertheless, if a sufficient number of entities enter the business 
of importing lamb carcasses that AMS believes it would be able to 
publish the information obtained, AMS intends on initiating rulemaking 
to amend these regulations to require the reporting of information by 
importers on purchases of imported lamb carcasses.
    Additionally, in contrast to the proposed rule, this final rule 
will not require lamb importers to report their purchases of imported 
boxed lamb cuts. Although the proposed regulations required lamb 
importers to report both their purchases and sales of imported boxed 
lamb cuts, the Agency has determined that because the reporting of lamb 
cuts sold in portion cut form (e.g., chops, steaks, etc.) are not to be 
reported for either domestic or imported lamb, the reporting of both 
the purchases and sales of imported boxed lamb cuts would not provide a 
significant amount of additional market information over what will be 
obtained by only requiring importers to report information on their 
sales of imported boxed lamb cuts not sold in portion cut form.
    AMS had originally intended to obtain market information concerning 
the purchases and sales of imported boxed lamb cuts in an effort to 
disseminate more complete market information concerning the prices 
being paid and received for imported lamb meat products entering the 
U.S. market. However, because packers and importers are exempt from 
reporting information concerning any boxed lamb cuts sold in portion 
cut form, the only product lamb importers produce from the processing 
of imported boxed lamb cuts not in portion cut form, AMS determined 
that requiring the reporting of this information was not necessary as 
these products could be processed into portion cut form before export 
to the United States, thereby being exempt from these reporting 
provisions. Further, information concerning the volume and value of 
imported boxed lamb cuts that are not sold in portion cut form from 
importers who buy and sell imported boxed lamb cuts not in portion cut 
form, this information is already being obtained by the requirement 
that importers report the prices they receive for their sales of those 
products.
    As a result of the removal of the requirement for lamb importers to 
report their purchases of imported boxed lamb cuts, the estimated 
annual reporting burden for Form LS-128-Boxed Lamb Cuts Report has been 
reduced by 26 hours or $520 per year. The total cost burden for boxed 
lamb cut reporting in this final rule has been adjusted accordingly.

Electronic Reporting of Information

    Twenty-one commenters supported electronic reporting of market news 
information. They believed that electronic reporting would facilitate 
aggregation and dissemination and would reduce the cost burden 
associated with paperwork. A few commenters recommended that rarely 
should AMS grant packers and importers exemptions from electronic 
reporting. A few commenters also wanted to see the system designed to 
eventually handle real-time reporting. One commenter suggested AMS 
develop and make available web-based input forms for submitting data 
online.
    AMS agrees with the points raised by the commenters regarding 
electronic data submission. AMS's own estimates of cost burdens 
indicated that the cost of submitting information by any method other 
than electronic would be cost-prohibitive, error prone, and unsecured. 
For the same reasons, AMS will grant exceptions to electronic reporting 
only in emergency cases such as power failures or loss of Internet 
accessibility. AMS will also provide web-based input screens as an 
alternative option for entities to use when submitting information. AMS 
computer specialists have conducted on-site visits over the past year 
to many packers who will be required to report to discuss and evaluate 
electronic recordkeeping systems employed by the industry.
    AMS understands commenter's concerns about their ability to comply 
with these reporting requirements in a timely, accurate manner, in 
order to avoid any enforcement penalties. This is particularly 
important in the context of an untested, electronic reporting process 
and disparate computing resources among reporting entities. AMS further 
understands that unforeseen technical difficulties may occur during the 
implementation of this rule which may, in some cases, prevent full 
compliance. Recognizing these concerns and acknowledging our 
responsibility to provide flexibility in dealing with small business as 
directed by the President in the 1995 Regulatory Reform--Waiver of 
Penalties and Reduction memorandum, entities acting in good faith in 
attempting to establish a data transfer technology and reporting 
process that will comply with the electronic reporting requirements 
will not be penalized under the enforcement provisions.
    To further assist the industry in achieving compliance, educational 
and outreach sessions will be held around the country immediately upon 
publication of this final rule. In these sessions, AMS will actively 
assist each reporting entity in understanding how their information 
technology infrastructures and related resources should be configured 
in order to ensure interoperability with the electronic transaction 
system developed by AMS. AMS will document and provide the reporting 
entities with standards and protocols associated with the transaction. 
Among other topics, these sessions will also provide information on 
implementing and using digital certificates, acceptable submission 
formats, the newly designed web-based

[[Page 75510]]

input method, output report designs, data aggregation guidelines, and 
AMS' electronic transaction system. In addition, AMS plans to beta test 
the technology to implement the rule during the time between 
publication of this final rule and its effective date and all entities 
required to report will be encouraged to participate in the beta 
testing program. Any feedback received during this outreach and testing 
period will be used to revise the reporting requirements, input and 
output formats, and process accordingly.
    In response to the comment concerning AMS developing and making 
available a web-based input forms for submitting data online, AMS found 
that some of the smaller entities covered under mandatory price 
reporting would benefit from such a web-based submission system. 
Accordingly, AMS is developing such a system that will be ready in time 
for program implementation.
    However, AMS does not believe that this alternative changes the 
Agency's estimate of the time or cost burden imposed by this 
regulation. The justification for this is two fold. First, larger 
packers will not use this system as it will prove unworkable for 
packers required to submit large volumes of information. Second, AMS 
believes that the time to transcribe data from original records to an 
on-line form far exceeds the time it would take to develop a system 
that automatically downloads the information into a file that is later 
electronically submitted to AMS as an attachment (a complete analysis 
is provided in the Paperwork Reduction Act section).
    AMS estimates that, if all entities submitting information under 
this rule did so through the use of the web-based input form method, 
the cost burden would be as follows:

Breakdown of Estimated Data Submission Cost Burden

                                 I.--Number of Responses per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                                Reporting                                               Total
                     Form                          days                    Responses                  responses
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113...................................          260   x  2 daily                           =          520
 
    LS-114...................................          260   x  2 daily                           =          520
 
    LS-115...................................           52   x  1 weekly                          =           52
 
    LS-116...................................           52   x  1 weekly                          =           52
 
    LS-117...................................           52      1 weekly                          =           52
                                                             x
    LS-126...................................          260   x  2 daily                           =          520
 
Swine:
    LS-118...................................          260   x  1 daily                           =          260
 
    LS-119...................................          260   x  2 daily                           =          520
 
    LS-120...................................           52   x  1 weekly                          =           52
 
Lamb:
    Domestic:
    LS-121...................................          260   x  1 daily                           =          260
 
    LS-122...................................          260   x  1 daily                           =          260
 
    LS-123...................................           52   x  1 weekly                          =           52
 
    LS-124...................................           52   x  1 weekly                          =           52
 
    LS-125...................................           52   x  1 weekly                          =           52
 
    LS-128...................................          260   x  1 daily                           =          260
 
    LS-129...................................          260   x  1 daily                           =          260
 
    Importer:
    LS-128...................................           52   x  1 weekly                          =           52
 
----------------------------------------------------------------------------------------------------------------


                             II.--Number of Submission Hours per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                                           Submissions/           Hours/           Total hours/
                          Form                                 year             submission             year
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..............................................             520   x             .34   =          176.80
 
    LS-114..............................................             520   x             .34   =          176.80
 
    LS-115..............................................              52   x             .50   =           26.00
 
    LS-116..............................................              52   x             .50   =           26.00
 
    LS-117..............................................              52   x             .16   =            8.30
 
    LS-126..............................................             260   x             .25   =          130.00
 
Swine:
    LS-118..............................................             260   x             .50   =          130.00
 
    LS-119..............................................             260   x             .34   =          176.80
 
    LS-120..............................................              52   x             .50   =           26.00
 
Lamb:
    Domestic:
    LS-121..............................................             260   x             .68   =          176.80
 
    LS-122..............................................             260   x             .68   =          176.80
 
    LS-123..............................................              52   x             .50   =           26.00
 
    LS-124..............................................              52   x             .50   =           26.00
 
    LS-125..............................................              52   x             .16   =            8.30
 
    LS-128..............................................             260   x             .34   =           88.40
 
    LS-129..............................................             260   x             .34   =           88.40
 

[[Page 75511]]

 
    Importer:
    LS-128..............................................              52   x             .16   =            8.30
 
----------------------------------------------------------------------------------------------------------------


                               III.--Total Submission Cost per Respondent per Year
----------------------------------------------------------------------------------------------------------------
                                                           Total hours/                           Total dollars/
                          Form                                 year              Cost/hour             year
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..............................................          176.80   x          $20.00   =       $3,536.00
 
    LS-114..............................................          176.80   x           20.00   =        3,536.00
 
    LS-115..............................................           26.00   x           20.00   =          520.00
 
    LS-116..............................................           26.00   x           20.00   =          520.00
 
    LS-117..............................................            8.30   x           20.00   =          166.00
 
    LS-126..............................................          130.00   x           20.00   =        2,600.00
 
                                                         ----------------                        ---------------
      Totals............................................          543.90   x           20.00   =       10,878.00
 
----------------------------------------------------------------------------------------------------------------
Swine:
    LS-118..............................................          130.00   x           20.00   =        2,600.00
 
    LS-119..............................................          176.80   x           20.00   =        3,536.00
 
    LS-120..............................................           26.00   x           20.00   =          520.00
 
                                                         ----------------                        ---------------
      Totals............................................          332.80   x           20.00   =        6,656.00
 
----------------------------------------------------------------------------------------------------------------
Lamb:
    Domestic:
    LS-121..............................................          176.80   x           20.00   =        3,536.00
 
    LS-122..............................................          176.80   x           20.00   =        3,536.00
 
    LS-123..............................................           26.00   x           20.00   =          520.00
 
    LS-124..............................................           26.00   x           20.00   =          520.00
 
    LS-125..............................................            8.30   x           20.00   =          166.00
 
    LS-128..............................................           88.40   x           20.00   =        1,768.00
 
    LS-129..............................................           88.40   x           20.00   =       11,810.00
 
                                                         ----------------                        ---------------
    Importer:
    LS-128..............................................            8.30   x           20.00   =         +166.00
 
                                                         ----------------                        ---------------
      Totals............................................          595.80   x           20.00   =       11,916.00
 
----------------------------------------------------------------------------------------------------------------


                              IV.--Total Yearly Submission Cost for all Respondents
----------------------------------------------------------------------------------------------------------------
                                                          Total dollars/         Number of
                          Form                                 year             respondents        Total cost <SUP>1</SUP>
----------------------------------------------------------------------------------------------------------------
Cattle:
    LS-113..............................................       $3,536.00   x              49   =     $173,260.00
 
    LS-114..............................................        3,536.00   x              49   =      173,260.00
 
    LS-115..............................................          520.00   x              49   =       25,480.00
 
    LS-116..............................................          520.00   x              49   =       25,480.00
 
    LS-117..............................................          166.00   x              49   =        8,130.00
 
    LS-126..............................................        2,600.00   x              49   =      127,400.00
 
                                                         ----------------                        ---------------
      Totals............................................       10,880.00   x              49   =      533,120.00
 
----------------------------------------------------------------------------------------------------------------
Swine:
    LS-118..............................................        2,600.00   x              50   =      130,000.00
 
    LS-119..............................................        3,536.00   x              50   =      176,800.00
 
    LS-120..............................................          520.00   x              50   =       26,000.00
 
                                                         ----------------                        ---------------
      Totals............................................        6,656.00   x              50   =      332,800.00
 
----------------------------------------------------------------------------------------------------------------
Lamb:
    Domestic:
    LS-121..............................................        3,536.00   x               8   =       28,290.00
 
    LS-122..............................................        3,536.00   x               8   =       28,290.00
 
    LS-123..............................................          520.00   x               8   =        4,160.00
 
    LS-124..............................................          520.00   x               8   =        4,160.00
 
    LS-125..............................................          166.00   x               8   =        1,330.00
 

[[Page 75512]]

 
    LS-129..............................................        1,768.00   x               8   =       14,140.00
 
                                                         ----------------                        ---------------
                                                               10,050.00   x               8   =       80,370.00
 
        LS-128..........................................        1,768.00   x               9   =      + 5,910.00
 
                                                         ----------------                        ---------------
            Total.......................................                                               96,280.00
    Importer:
    LS-128..............................................          166.00   x               6   =        1,000.00
 
                                                         ----------------                        ---------------
      Total.............................................                                              97,280.00
----------------------------------------------------------------------------------------------------------------
\1\ Dollars values rounded to nearest $10.00.

(1) Live Cattle Daily Report (Current Established Prices): Form L-113.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .34 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 520 (2 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 8,663 hours.
    Total Cost: $173,260.
(2) Live Cattle Daily Report (Committed and Delivered Cattle): Form LS-
114.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .34 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 520 (2 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 8,663 hours.
    Total Cost: $173,260.
(3) Live Cattle Weekly Report (Forward Contract and Packer-Owned): Form 
LS-115.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .50 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 1,274 hours.
    Total Cost: $25,480.
(4) Live Cattle Weekly Report (Formula Purchases): Form LS-116.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .50 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 1,274 hours.
    Total Cost: $25,480.
(5) Cattle Premiums and Discounts Weekly Report: Form LS-117.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .16 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live cattle purchases to the Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 408 hours.
    Total Cost: $8,130.
(6) Boxed Beef Daily Report: Form LS-126.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .25 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on domestic and export boxed beef cut sales to the 
Secretary.
    Estimated Number of Respondents: 49 plants.
    Estimated Number of Responses per Respondent: 520 (2 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 6,370 hours.
    Total Cost: $127,400.
(7) Swine Prior Day Report: Form LS-118.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .50 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live swine purchases to the Secretary.
    Estimated Number of Respondents: 50 plants.
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 6,500 hours.
    Total Cost: $130,000.
(8) Swine Daily Report: Form LS-119.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .34 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live swine purchases to the Secretary.
    Estimated Number of Respondents: 50 plants.
    Estimated Number of Responses per Respondent: 520 (2 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 8,840 hours.
    Total Cost: $176,800.
(9) Swine Noncarcass Merit Premium Weekly Report: Form LS-120.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .50 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live swine purchases to the Secretary.
    Estimated Number of Respondents: 50 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).

[[Page 75513]]

    Estimated Total Annual Burden on Respondents: 1,300 hours.
    Total Cost: $26,000.
(10) Live Lamb Daily Report (Current Established Prices): Form LS-121.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .68 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 1,410 hours.
    Total Cost: $28,290.
(11) Live Lamb Daily Report (Committed and Delivered Lambs): Form LS-
122.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .68 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 1,140 hours.
    Total Cost: $28,290.
(12) Live Lamb Weekly Report (Forward Contract and Packer-Owned): Form 
LS-123.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .50 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 208 hours.
    Total Cost: $4,160.
(13) Live Lamb Weekly Report (Formula Purchases): Form LS-124.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .50 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 208 hours.
    Total Cost: $4,160.
(14) Lamb Premiums and Discounts Weekly Report: Form LS-125.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .16 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on live lamb purchases to the Secretary.
    Estimated Number of Respondents: 8 plants.
    Estimated Number of Responses per Respondent: 52 (1 per week for 52 
weeks).
    Estimated Total Annual Burden on Respondents: 66 hours.
    Total Cost: $1,330.
(15) Boxed Lamb Report: Form LS-128.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .34 hours per electronically submitted 
response for domestic packing plants and .16 hours per electronically 
submitted response for importers.
    Respondents: Packer processing plants and importers required to 
report information on boxed lamb cut sales to the Secretary.
    Estimated Number of Respondents: 14 entities (including 1 entity 
that both processes and imports).
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days) for domestic packing plants; 52 (1 per week for 52 weeks) for 
importers.
    Estimated Total Annual Burden on Respondents: 782 hours for 
domestic packing plants and 52 hours for importers.
    Total Cost: $15,910 for domestic packing plants and $1,000 for 
importers for a total of $16,910.00.
(16) Lamb Carcass Report: Form LS-129.
    Estimate of Burden: Public reporting burden for collection of 
information is estimated to be .34 hours per electronically submitted 
response.
    Respondents: Packer processing plants required to report 
information on lamb carcass sales to the Secretary.
    Estimated Number of Respondents: 8 entities.
    Estimated Number of Responses per Respondent: 260 (1 per day for 
260 days).
    Estimated Total Annual Burden on Respondents: 707 hours.
    Total Cost: $14,140.

Reporting Input Forms

    AMS received 109 comments referencing the proposed mandatory 
reporting forms to be used by packers when submitting required 
information. However, none of the comments AMS received specifically 
addressed issues relating to the format or design of the forms but 
rather used the forms as a venue to argue for or against the inclusion 
of reporting requirements. A few of the commenters expressed concern 
over some of the information requested in the forms (including state of 
origin, boxed beef box count, and buyer destination) suggesting that 
such information was either not authorized by the Act or was not 
pertinent. Several commenters requested clarification of what was being 
asked for on the forms. Other commenters suggested that AMS provide 
procedural guidelines explaining how and when information was to be 
reported on the forms. Many of the commenters used the forms to express 
concerns including lot aggregation, inclusion of cows under mandatory 
reporting, and reporting exports of boxed beef and imports of boxed 
lamb.
    AMS received 19 comments that raised issues with reporting 
requirements presented on various forms. Specific comments were 
received that took issue with reporting requirements found on the 
following forms: LS-113 Live Cattle Daily Report (current established 
prices), 15 comments; LS-114 Live Cattle Daily Report (committed and 
delivered cattle), 8 comments; LS-115 Live Cattle Weekly Report 
(forward contract and packer-owned), 6 comments; LS-116 Live Cattle 
Weekly Report (formula purchases), 4 comments; LS-117 Cattle Premiums 
and Discounts Weekly Report, 2 comments; LS-126 Boxed Beef Daily 
Report, 19 comments; LS-118 Swine Prior Day Report, 16 comments; LS-119 
Swine Daily Report, 17 comments; and LS-121 Live Lamb Daily Report 
(current established prices), 3 comments.
    AMS has previously responded to these comments on matters of 
procedural clarification, simplification, and further definition of 
terms in the section responding to all of the comments received in 
response to the proposed rule.
    Nevertheless, with specific regard to this section, AMS has 
redesigned the reporting forms in this final rule to make them more 
representative of the electronic format required for submission of all 
information under mandatory reporting. AMS has also included written 
guidelines at the end

[[Page 75514]]

of the regulatory text in the final rule on how to those required to 
report information should complete the information for the mandatory 
reporting forms (Appendix D).

List of Subjects in 7 CFR Part 59

    Cattle, Hogs, Lamb, Livestock, Reporting and recordkeeping, Sheep.

    For the reasons set forth in the preamble, Chapter I of Title 7 is 
amended by adding a new Part 59 to read as follows:

PART 59--LIVESTOCK MANDATORY REPORTING

Subpart A--General Provisions
59.10   General administrative provisions.
59.20   Recordkeeping.
59.30   Definitions.
Subpart B--Cattle Reporting
59.100   Definitions.
59.101   Mandatory daily reporting for live cattle.
59.102   Mandatory weekly reporting for live cattle.
59.103   Mandatory reporting of boxed beef sales.
Subpart C--Swine Reporting
59.200   Definitions.
59.201   General reporting provisions.
59.202   Mandatory daily reporting for swine.
59.203   Mandatory weekly reporting for swine.
Subpart D--Lamb Reporting
59.300   Definitions.
59.301   Mandatory daily reporting for lambs.
59.302   Mandatory weekly reporting for lambs.
59.303   Mandatory reporting of lamb carcasses and boxed lamb.
Subpart E--OMB Control Number
59.400   OMB control number assigned pursuant to the Paperwork 
Reduction Act.

    Authority: 7 U.S.C. 1621 et seq.

Subpart A--General Provisions


Sec. 59.10  General administrative provisions.

    (a) Reporting by packers and importers. A packer or importer shall 
report all information required under this Part on an individual lot 
basis.
    (b) Reporting schedule. Whenever a packer or importer is required 
to report information on transactions of livestock and livestock 
products under this Part by a set time, all covered transactions up to 
within one half hour of the reporting deadline shall be reported. 
Transactions completed during the one half hour prior to the previous 
reporting time, but not reported in the previous report, shall be 
reported at the next scheduled reporting time.
    (c) Regional reporting and aggregation. The Secretary shall make 
information obtained under this Part available to the public only in a 
manner that:
    (1) Ensures that the information is published on a national and a 
regional or statewide basis as the Secretary determines to be 
appropriate;
    (2) Ensures that the identity of a reporting person or the entity 
which they represent is not disclosed; and
    (3) Market information reported to the Secretary by packers and 
importers shall be aggregated in such a manner that the market reports 
issued will not disclose the identity of persons, packers and 
importers, including parties to a contract and packer's and importer's 
proprietary information.
    (d) Adjustments. Prior to the publication of any information 
required under this Part, the Secretary may make reasonable adjustments 
in information reported by packers and importers to reflect price 
aberrations or other unusual or unique occurrences that the Secretary 
determines would distort the published information to the detriment of 
producers, packers, or other market participants.
    (e) Reporting of activities on weekends and holidays. Livestock and 
livestock products committed to a packer, or importer, or purchased, 
sold, or slaughtered by a packer or importer on a weekend day or 
holiday shall be reported to the Secretary in accordance with the 
provisions of this Part and reported by the Secretary on the 
immediately following reporting day. A packer shall not be required to 
report such actions more than once on the immediately following 
reporting day.
    (f) Reporting methods. Whenever information is required to be 
reported under this Part, it shall be reported by electronic means and 
shall adhere to a standardized format established by the Secretary to 
achieve the objectives of this Part, except in emergencies or in cases 
when an alternative method is agreeable to the entity required to 
report and AMS.


Sec. 59.20  Recordkeeping.

    (a) In General. Each packer or importer required to report 
information to the Secretary under the Act and this Part shall maintain 
for 2 years and make available to the Secretary the following 
information on request:
    (1) The original contracts, agreements, receipts, and other records 
associated with any transaction relating to the purchase, sale, 
pricing, transportation, delivery, weighing, slaughter, or carcass 
characteristics of all livestock or livestock products; and
    (2) Such records or other information as is necessary or 
appropriate to verify the accuracy of the information required to be 
reported under the Act and this Part.
    (b) Purchases of cattle and swine and sales of boxed beef cuts. A 
record of a purchase of a lot of cattle or swine, or a sale of a unit 
of boxed beef cuts, by a packer shall evidence whether the purchase or 
sale occurred:
    (1) Before 10 a.m. Central Time;
    (2) Between 10 a.m. and 2 p.m. Central Time; or (3) After 2 p.m. 
Central Time.
    (c) Purchases of lambs. A record of a purchase of a lot of lambs by 
a packer shall evidence whether the purchase occurred:
    (1) Before 2 p.m. Central Time; or
    (2) After 2 p.m. Central Time.
    (d) Sales of lamb carcasses and sales of boxed lamb cuts. A record 
of a sale by a packer of lamb carcasses and cuts, or of a sale by an 
importer of lamb cuts shall evidence time and date the sale occurred:
    (1) Before 2 p.m. Central Time; or
    (2) After 2 p.m. Central Time.
    (e) Reporting sales of boxed beef cuts and sales of boxed lamb 
cuts.
    (1) Beef packers must report all sales of boxed beef items by the 
applicable Institutional Meat Purchase Specifications (IMPS) item 
number or the boxed beef items' cutting and trimming specifications.
    (2) Lamb packers and importers must report all sales of boxed lamb 
items by the applicable Institutional Meat Purchase Specifications 
(IMPS) item number or the boxed lamb items' cutting and trimming 
specifications.


Sec. 59.30  Definitions.

    The following definitions apply to this part.
    Base price. The term ``base price'' means the price paid for 
livestock, delivered at the packing plant, before application of any 
premiums or discounts, expressed in dollars per hundred pounds of hot 
carcass weight.
    Basis level. The term ``basis level'' means the agreed on 
adjustment to a future price to establish the final price paid for 
livestock.
    Current slaughter week. The term ``current slaughter week'' means 
the period beginning Monday, and ending Sunday, of the week in which a 
reporting day occurs.
    Discount. The term ``discount'' means the adjustment, expressed in 
dollars per one hundred pounds, subtracted from the base price due to 
weight, quality characteristics, yield characteristics, livestock 
class, dark cutting, breed, or dressing percentage.
    Exported. The term ``exported'' means livestock or livestock 
products that are

[[Page 75515]]

physically shipped to locations outside of the 50 States.
    F.O.B. The term ``F.O.B.'' means free on board, regardless of the 
mode of transportation, at the point of direct shipment by the seller 
to the buyer (e.g., F.O.B. Plant, F.O.B. Feedlot).
    Imported. The term ``imported'' means livestock that are raised to 
slaughter weight outside of the 50 States or livestock products 
produced outside of the 50 States.
    Institutional meat purchase specifications. Specifications 
describing various meat cuts, meat products, and meat food products 
derived from all livestock species, commonly abbreviated ``IMPS'', and 
intended for use by any meat procuring activity. Copies of the IMPS may 
be obtained from the U.S. Department of Agriculture, Agricultural 
Marketing Service, Livestock and Seed Program located at Room 2603 
South Building, 1400 Independence Ave, SW., PO Box 96456, Washington, 
DC 20090-6456. Phone (202) 720-4486 or Fax (202) 720-1112. Copies may 
also be obtained over the Internet at: www.ams.usda.gov/lsg/stand/st-pubs.htm.
    Livestock. The term ``livestock'' means cattle, swine, and lambs.
    Lot. (1) When used in reference to livestock, the term ``lot'' 
means a group of one or more livestock that is identified for the 
purpose of a single transaction between a buyer and a seller;
    (2) When used in reference to lamb carcasses, the term ``lot'' 
means a group of one or more lamb carcasses sharing a similar weight 
range category and comprising a single transaction between a buyer and 
seller; or
    (3) When used in reference to boxed beef and lamb, the term ``lot'' 
means a group of one or more boxes of beef or lamb items sharing 
cutting and trimming specifications and comprising a single transaction 
between a buyer and seller.
    Marketing. The term ``marketing'' means the sale or other 
disposition of livestock, livestock products, or meat or meat food 
products in commerce.
    Negotiated purchase. The term ``negotiated purchase'' means a cash 
or spot market purchase by a packer of livestock from a producer under 
which the base price for the livestock is determined by seller-buyer 
interaction and agreement on a delivery day. The livestock are 
scheduled for delivery to the packer not more than 14 days after the 
date on which the livestock are committed to the packer.
    Negotiated sale. The term ``negotiated sale'' means a cash or spot 
market sale by a producer of livestock to a packer under which the base 
price for the livestock is determined by seller-buyer interaction and 
agreement on a delivery day. The livestock are scheduled for delivery 
to the packer not later than 14 days after the date on which the 
livestock are committed to the packer. When used in reference to sales 
of boxed beef or lamb cuts or lamb carcasses the term ``negotiated 
sale'' means a sale by a packer selling boxed beef or lamb cuts or lamb 
carcasses to a buyer of boxed beef or lamb cuts or lamb carcasses under 
which the price for the boxed beef or lamb cuts or lamb carcasses is 
determined by seller-buyer interaction and agreement on a day.
    Origin. The term ``origin'' means the State where the livestock 
were fed to slaughter weight.
    Premium. The term ``premium'' means the adjustment, expressed in 
dollars per one hundred pounds, added to the base price due to weight, 
quality characteristics, yield characteristics, livestock class, and 
breed.
    Priced. The term ``priced'' means the time when the final price is 
determined either through buyer-seller interaction and agreement or as 
a result of some other price determining method.
    Prior slaughter week. The term ``prior slaughter week'' means the 
Monday through Sunday prior to a reporting day.
    Producer. The term ``producer'' means any person engaged in the 
business of selling livestock to a packer for slaughter (including the 
sale of livestock from a packer to another packer).
    Purchased. The term ``purchased'' means the agreement on a price, 
or the method for calculating a price, determined through buyer-seller 
interaction and agreement.
    Reporting day. The term ``reporting day'' means a day on which a 
packer conducts business regarding livestock committed to the packer, 
or livestock purchased, sold, or slaughtered by the packer; the 
Secretary is required to make such information available to the public; 
and the Department of Agriculture is open to conduct business.
    Secretary. The term ``Secretary'' means the Secretary of 
Agriculture of the United States or any other officer or employee of 
the Department of Agriculture to whom authority has been delegated or 
may hereafter be delegated to act in the Secretary's stead.
    State. The term ``State'' means each of the 50 States.

Subpart B--Cattle Reporting


Sec. 59.100  Definitions.

    The following definitions apply to this subpart.
    Boxed beef. The term ``boxed beef'' means those carlot-based 
portions of a beef carcass including fresh primals, subprimals, cuts 
fabricated from subprimals (excluding portion-control cuts such as 
chops and steaks similar to those portion cut items described in the 
Institutional Meat Purchase Specifications (IMPS) for Fresh Beef 
Products Series 100, and thin meats (e.g. inside and outside skirts, 
pectoral meat, cap and wedge meat, and blade meat) not older than 14 
days from date of manufacture; fresh ground beef, beef trimmings, and 
boneless processing beef not older than 7 days from date of 
manufacture; and frozen beef trimmings and boneless processing beef not 
older than 60 days from date of manufacture.
    Branded. The term ``branded'' means boxed beef cuts produced and 
marketed under a corporate trademark (for example, products that are 
marketed on their quality, yield, or breed characteristics), or boxed 
beef cuts produced and marketed under one of USDA's Meat Grading and 
Certification Branch, Certified Beef programs.
    Carcass characteristics. The term ``carcass characteristics'' means 
the range and average carcass weight in pounds, the quality grade and 
yield grade (if applicable), and the average cattle dressing 
percentage.
    Carlot-based. The term ``carlot-based'' means any transaction 
between a buyer and a seller destined for two or less delivery stops 
consisting of one or more individual boxed beef items.
    Cattle committed. The term ``cattle committed'' means cattle that 
are scheduled to be delivered to a packer within the 7-day period 
beginning on the date of an agreement to sell the cattle.
    Cattle type. The term ``cattle type'' means the following types of 
cattle purchased for slaughter:
    (1) Fed steers;
    (2) Fed heifers;
    (3) Fed Holsteins and other fed dairy steers and heifers;
    (4) Cows; and
    (5) Bulls.
    Established. The term ``established'', when used in connection with 
prices, means that point in time when the buyer and seller agree upon a 
net price.
    Formula marketing arrangement. 
    (1) When used in reference to live cattle, the term ``formula 
marketing arrangement'' means the advance commitment of cattle for 
slaughter by any means other than through a negotiated purchase or a 
forward contract, using a method for calculating price in which the 
price is determined at a future date.
    (2) When used in reference to boxed beef, the term ``formula 
marketing arrangement'' means the advance

[[Page 75516]]

commitment of boxed beef by any means other than through a negotiated 
purchase or a forward contract, using a method for calculating price in 
which the price is determined at a future date.
    Forward contract.
    (1) When used in reference to live cattle, the term ``forward 
contact'' means an agreement for the purchase of cattle, executed in 
advance of slaughter, under which the base price is established by 
reference to prices quoted on the Chicago Mercantile Exchange, or other 
comparable publicly available prices.
    (2) When used in reference to boxed beef, the term ``forward 
contract'' means an agreement for the sale of boxed beef, executed in 
advance of manufacture, under which the base price is established by 
reference to publicly available quoted prices.
    Packer. The term ``packer'' means any person engaged in the 
business of buying cattle in commerce for purposes of slaughter, of 
manufacturing or preparing meats or meat food products from cattle for 
sale or shipment in commerce, or of marketing meats or meat food 
products from cattle in an unmanufactured form acting as a wholesale 
broker, dealer, or distributor in commerce. For any calendar year, the 
term ``packer'' includes only a federally inspected cattle processing 
plant that slaughtered an average of 125,000 head of cattle per year 
during the immediately preceding 5 calendar years. Additionally, in the 
case of a cattle processing plant that did not slaughter cattle during 
the immediately preceding 5 calendar years, it shall be considered a 
packer if the Secretary determines the processing plant should be 
considered a packer under this subpart after considering its capacity.
    Packer-owned cattle. The term ``packer-owned cattle'' means cattle 
that a packer owns for at least 14 days immediately before slaughter.
    Prices for cattle. The term ``prices for cattle'' includes the 
price per hundredweight; the purchase type; the quantity on a live and 
a dressed weight basis; the estimated live weight range; the average 
live weight; the estimated percentage of cattle of a USDA quality grade 
Choice or better; beef carcass classification; any premiums or 
discounts associated with weight, quality grade, yield grade, or type 
of purchase; cattle State of origin; estimated cattle dressing 
percentage; and price basis as F.O.B. feedlot or delivered at the 
plant.
    Terms of trade. The term ``terms of trade'' means, with respect to 
the purchase of cattle for slaughter:
    (1) Whether a packer provided any financing agreement or 
arrangement with regard to the cattle;
    (2) Whether the delivery terms specified the location of the 
producer or the location of the packer's plant;
    (3) Whether the producer is able to unilaterally specify the date 
and time during the business day of the packer that the cattle are to 
be delivered for slaughter; and
    (4) The percentage of cattle purchased by a packer as a negotiated 
purchase that are delivered to the plant for slaughter more than 7 
days, but fewer than 14 days, after the earlier of either the date on 
which the cattle were committed to the packer, the date on which the 
cattle were purchased by the packer, or the date on which the cattle 
were priced by the packer.
    Type of purchase. The term ``type of purchase'' with respect to 
cattle, means a negotiated purchase, a formula market arrangement, and 
a forward contract.
    Type of sale. The term ``type of sale'' with respect to boxed beef, 
means a negotiated sale, a formula market arrangement, and a forward 
contract.


Sec. 59.101  Mandatory daily reporting for live cattle.

    (a) In General. The corporate officers or officially designated 
representatives of each packer processing plant shall report to the 
Secretary at least two times each reporting day not later than 10:00 
a.m. Central Time and not later than 2:00 p.m. Central Time the 
following information for each cattle type, inclusive since the last 
reporting, categorized to clearly delineate domestic from imported 
market purchases as described in Sec. 59.10(b).
    (1) The prices for cattle (per hundredweight) established on that 
day, categorized by:
    (i) The type of purchase;
    (ii) The quantity of cattle purchased on a live weight basis;
    (iii) The quantity of cattle purchased on a dressed weight basis;
    (iv) A range and average of estimated live weights of cattle 
purchased;
    (v) An estimate of the percentage of the cattle purchased that were 
of a quality grade of Choice or better; and
    (vi) Any premiums or discounts associated with weight, quality 
grade, or yield grade expressed in dollars per hundredweight on a 
dressed basis.
    (2) The quantity of cattle delivered to the packer (quoted in 
numbers of head) on that day, categorized by:
    (i) The type of purchase;
    (ii) The quantity of cattle delivered on a live weight basis; and
    (iii) The quantity of cattle delivered on a dressed weight basis.
    (3) The quantity of cattle committed to the packer (quoted in 
numbers of head) as of that day, categorized by:
    (i) The type of purchase;
    (ii) The quantity of cattle committed on a live weight basis; and
    (iii) The quantity of cattle committed on a dressed weight basis.
    (4) The terms of trade regarding the cattle, as applicable.
    (b) Publication. The Secretary shall make the information available 
to the public not less frequently than three times each reporting day.


Sec. 59.102  Mandatory weekly reporting for live cattle.

    (a) In General. The corporate officers or officially designated 
representatives of each packer processing plant shall report to the 
Secretary on the first reporting day of each week, not later than 9:00 
a.m. Central Time, the following information applicable to the prior 
slaughter week, categorized to clearly delineate domestic from imported 
market purchases:
    (1) The quantity of cattle purchased through forward contracts that 
were slaughtered;
    (2) The quantity of cattle delivered under a formula marketing 
arrangement that were slaughtered;
    (3) The quantity and carcass characteristics of packer-owned cattle 
that were slaughtered;
    (4) The quantity, basis level, and delivery month for all cattle 
purchased through forward contracts;
    (5) The range and average of intended premiums and discounts 
(including those associated with weight, quality grade, yield grade, or 
type of cattle) that are expected to be in effect for the current 
slaughter week; and
    (6) The following information for cattle purchased through a 
formula marketing arrangement and slaughtered during the prior 
slaughter week:
    (i) The quantity (quoted in both numbers of head and pounds) of 
cattle;
    (ii) The weighted average price paid for a carcass, including 
applicable premiums and discounts;
    (iii) The range of premiums and discounts paid;
    (iv) The weighted average of premiums and discounts paid;
    (v) The range of prices paid; and
    (vi) The terms of trade regarding the cattle, as applicable.
    (b) Publication. The Secretary shall make available to the public 
the information obtained under paragraph (a) of this section on the 
first reporting day of the current slaughter week by 10:00 a.m. Central 
Time.

[[Page 75517]]

Sec. 59.103  Mandatory reporting of boxed beef sales.

    (a) Daily reporting. The corporate officers or officially 
designated representatives of each packer processing plant shall report 
to the Secretary at least twice each reporting day (once by 10 a.m. 
Central Time, and once by 2 p.m. Central Time) the following 
information on total boxed beef domestic and export sales established 
on that day inclusive since the last reporting as described in 
Sec. 59.10(b):
    (1) The price for each lot of each boxed beef sale, quoted in 
dollars per hundredweight on a F.O.B. plant basis;
    (2) The quantity for each lot of each sale, quoted by number of 
pounds sold; and
    (3) The information regarding the characteristics of each sale is 
as follows:
    (i) The type of sale;
    (ii) The branded product characteristics, if applicable;
    (iii) The grade for steer and heifer beef (e.g., USDA Prime, USDA 
Choice or better, USDA Choice, USDA Select, ungraded no-roll product);
    (iv) The grade for cow beef or packer yield and/or quality sort for 
cow beef (e.g., Breakers, Boners, White Cow);
    (v) The cut of beef, referencing the most recent version of the 
Institutional Meat Purchase Specifications (IMPS), when applicable;
    (vi) The trim specification;
    (vii) The weight range of the cut;
    (viii) The product delivery period; and
    (ix) The beef type (steer/heifer, dairy steer/heifer, or cow).
    (b) Publication. The Secretary shall make available to the public 
the information obtained under paragraph (a) of this section not less 
frequently than twice each reporting day.

Subpart C--Swine Reporting


Sec. 59.200  Definitions.

    The following definitions apply to this subpart.
    Affiliate. The term ``affiliate'', with respect to a packer, means:
    (1) A person that directly or indirectly owns, controls, or holds 
with power to vote, 5 percent or more of the outstanding voting 
securities of the packer;
    (2) A person 5 percent or more of whose outstanding voting 
securities are directly or indirectly owned, controlled, or held with 
power to vote, by the packer; and
    (3) A person that directly or indirectly controls, or is controlled 
by or under common control with, the packer.
    Applicable reporting period. The term ``applicable reporting 
period'' means the period of time prescribed by the prior day report, 
the morning report, and the afternoon report, as provided in 
Sec. 59.202.
    Average carcass weight. The term ``average carcass weight'' means 
the weight obtained by dividing the total carcass weight of the swine 
slaughtered at the packing plant during the applicable reporting period 
by the number of these same swine.
    Average lean percentage. The term ``average lean percentage'' means 
the value equal to the average percentage of the carcass weight 
comprised of lean meat for the swine slaughtered during the applicable 
reporting period. Whenever the packer changes the manner in which the 
average lean percentage is calculated, the packer shall make available 
to the Secretary the underlying data, applicable methodology and 
formulae, and supporting materials used to determine the average lean 
percentage, which the Secretary may convert either to the carcass 
measurements or lean percentage of the swine of the individual packer 
to correlate to a common percent lean measurement.
    Average net price. The term ``average net price'' means the 
quotient (stated per hundred pounds of carcass weight of swine) 
obtained by dividing the total amount paid for the swine slaughtered at 
a packing plant during the applicable reporting period (including all 
premiums and less all discounts) by the total carcass weight of the 
swine (in hundred pound increments).
    Average sort loss. The term ``average sort loss'' means the average 
discount (in dollars per hundred pounds carcass weight) for swine 
slaughtered during the applicable reporting period, resulting from the 
fact that the swine did not fall within the individual packer's 
established carcass weight range or lot variation range.
    Backfat. The term ``backfat'' means the fat thickness (in inches) 
measured between the third and fourth rib from the last rib, 7 
centimeters from the carcass split (or adjusted from the individual 
packer's measurement to that reference point using an adjustment made 
by the Secretary) of the swine slaughtered during the applicable 
reporting period.
    Barrow. The term ``barrow'' means a neutered male swine, with the 
neutering performed before the swine reached sexual maturity.
    Base market hog. The term ``base market hog'' means a hog for which 
no discounts are subtracted from and no premiums are added to the base 
price.
    Base price. The term ``base price'' means the price from which no 
discounts are subtracted and no premiums are added.
    Boars. The term ``boar'' means a sexually-intact male swine.
    Bred female swine. The term ``bred female swine'' means any female 
swine, whether a sow or gilt, that has been mated or inseminated, or 
has been confirmed, to be pregnant.
    Formula price. The term ``formula price'' means a price determined 
by a mathematical formula under which the price established for a 
specified market serves as the basis for the formula.
    Gilt. The term ``gilt'' means a young female swine that has not 
produced a litter.
    Highest net price. The term ``highest net price'' means the highest 
net price paid for a single lot or group of swine slaughtered at a 
packing plant during the applicable reporting period per hundred pounds 
of carcass weight of swine.
    Hog Class. The term ``hog class'' means, as applicable, barrows or 
gilts; sows; or boars or stags.
    Loin depth. The term ``loin depth'' means the muscle depth (in 
inches) measured between the third and fourth ribs from the last rib, 7 
centimeters from the carcass split (or adjusted from the individual 
packer's measurement to that reference point using an adjustment made 
by the Secretary) of the swine slaughtered during the applicable 
reporting period.
    Lowest net price. The term ``lowest net price'' means the lowest 
net price paid for a single lot or group of swine slaughtered at a 
packing plant during the applicable reporting period per hundred pounds 
of carcass weight of swine.
    Net price. The term ``net price'' means the total amount paid by a 
packer to a producer (including all premiums, less all discounts) per 
hundred pounds of carcass weight of swine delivered at the plant. The 
total amount paid shall include any sum deducted from the price (per 
hundredweight) paid to a producer that reflects the repayment of a 
balance owed by the producer to the packer or the accumulation of a 
balance to later be repaid by the packer to the producer. The total 
amount paid shall exclude any sum earlier paid to a producer that must 
be repaid to the packer.
    Noncarcass merit premium. The term ``noncarcass merit premium'' 
means an increase in the base price of the swine offered by an 
individual packer or packing plant, based on any factor other than the 
characteristics of the carcass, if the actual amount of the premium is 
known before the sale and delivery of the swine.

[[Page 75518]]

    Other market formula purchase. The term ``other market formula 
purchase'' means a purchase of swine by a packer in which the pricing 
mechanism is a formula price based on any market other than the market 
for swine, pork, or a pork product. The term ``other market formula 
purchase'' includes a formula purchase in a case which the price 
formula is based on 1 or more futures or options contracts.
    Other purchase arrangement. The term ``other purchase arrangement'' 
means a purchase of swine by a packer that is not a negotiated 
purchase, swine or pork market formula purchase, or other market 
formula purchase; and does not involve packer-owned swine.
    Packer. The term ``packer'' means any person engaged in the 
business of buying swine in commerce for purposes of slaughter, of 
manufacturing or preparing meats or meat food products from swine for 
sale or shipment in commerce, or of marketing meats or meat food 
products from swine in an unmanufactured form acting as a wholesale 
broker, dealer, or distributor in commerce. For any calendar year, the 
term ``packer'' includes only a federally inspected swine processing 
plant that slaughtered an average of 100,000 head of swine per year 
during the immediately preceding 5 calendar years. Additionally, in the 
case of a swine processing plant that did not slaughter swine during 
the immediately preceding 5 calendar years, it shall be considered a 
packer if the Secretary determines the processing plant should be 
considered a packer under this subpart after considering its capacity.
    Packer-owned swine. The term ``packer-owned swine'' means swine 
that a packer (including a subsidiary or affiliate of the packer) owns 
for at least 14 days immediately before slaughter.
    Packer-sold swine. The term ``packer-sold swine'' means the swine 
that are owned by a packer (including a subsidiary or affiliate of the 
packer) for more than 14 days immediately before sale for slaughter; 
and sold for slaughter to another packer.
    Pork. The term ``pork'' means the meat of a porcine animal.
    Pork product. The term ``pork product'' means a product or 
byproduct produced or processed in whole or in part from pork.
    Purchase data. The term ``purchase data'' means all of the 
applicable data, including base price and weight (if purchased live), 
for all swine purchased during the applicable reporting period, 
regardless of the expected delivery date of the swine, reported by:
    (1) Hog class;
    (2) Type of purchase; and
    (3) Packer-owned swine.
    Slaughter data. The term ``slaughter data'' means all of the 
applicable data for all swine slaughtered by a packer during the 
applicable reporting period, regardless of whether the price of the 
swine was negotiated or otherwise determined, reported by:
    (1) Hog class;
    (2) Type of purchase; and
    (3) Packer-owned swine.
    Sow. The term ``sow'' means an adult female swine that has produced 
1 or more litters.
    Stag. The term ``stag'' means a male swine that was neutered after 
reaching sexual maturity.
    Swine. The term ``swine'' means a porcine animal raised to be a 
feeder pig, raised for seedstock, or raised for slaughter.
    Swine committed. The term ``swine committed'' means swine scheduled 
and delivered to a packer within the 14-day period beginning on the 
date of an agreement to sell the swine.
    Swine or pork market formula purchase. The term ``swine or pork 
market formula purchase'' means a purchase of swine by a packer in 
which the pricing mechanism is a formula price based on a market for 
swine, pork, or a pork product, other than a future or option for 
swine, pork, or a pork product.
    Type of purchase. The term ``type of purchase'', with respect to 
swine, means:
    (1) A negotiated purchase;
    (2) Other market formula purchase;
    (3) A swine or pork market formula purchase; and
    (4) Other purchase arrangement.


Sec. 59.201  General reporting provisions.

    (a) Packer-owned swine. Information required under this section for 
packer-owned swine shall include quantity and carcass characteristics, 
but not price.
    (b) Type of Purchase. If information regarding the type of purchase 
is required under this section, the information shall be reported 
according to the numbers and percentages of each type of purchase 
comprising:
    (1) Packer-sold swine; and
    (2) All other swine.


Sec. 59.202  Mandatory daily reporting for swine.

    (a) Prior day report. The corporate officers or officially 
designated representatives of each packer shall report to the Secretary 
for each business day of the packer not later than 7:00 a.m. Central 
Time on each reporting day information regarding all swine purchased, 
priced, or slaughtered during the prior business day of the packer as 
specified in Sec. 59.10(b):
    (1) All purchase data, reported by lot, including:
    (i) The total number of swine purchased;
    (ii) The total number of swine scheduled for delivery to a packer 
for slaughter;
    (iii) The base price and weight for all swine purchased on a live 
weight basis; and
    (iv) The base price and premiums and discounts paid for carcass 
characteristics for all swine purchased on a carcass basis for which a 
price has been established. For swine that were not priced, this 
information shall be reported on the next prior day report after the 
price is established.
    (2) The following slaughter data for the total number of swine 
slaughtered:
    (i) The average net price;
    (ii) The lowest net price;
    (iii) The highest net price;
    (iv) The average carcass weight;
    (v) The average sort loss;
    (vi) The average backfat;
    (vii) The average loin depth;
    (viii) The average lean percentage; and
    (ix) Total quantity slaughtered.
    (3) Packer purchase commitments, which shall be equal to the number 
of swine scheduled for delivery to a packer for slaughter for each of 
the next 14 calendar days.
    (4) Publication. The Secretary shall publish the information 
obtained under this paragraph in a prior day report not later than 8:00 
a.m. Central Time on the reporting day on which the information is 
received from the packer.
    (b) Morning report. The corporate officers or officially designated 
representatives of each packer processing plant shall report to the 
Secretary not later than 10:00 a.m. Central Time each reporting day as 
described in Sec. 59.10(b):
    (1) The packer's best estimate of the total number of swine and 
packer-owned swine expected to be purchased throughout the reporting 
day through each type of purchase;
    (2) The total number of swine and packer-owned swine purchased up 
to that time of the reporting day through each type of purchase;
    (3) All purchase data for base market hogs purchased up to that 
time of the reporting day through negotiated purchases; and
    (4) All purchase data for base market hogs purchased through each 
type of purchase other than negotiated purchase up to that time of the 
reporting day, unless such information is unavailable due to pricing 
that is determined on a delayed basis. The packer shall report 
information on such purchases on the

[[Page 75519]]

first reporting day or scheduled reporting time on a reporting day 
after the price has been determined.
    (5) Publication. The Secretary shall publish the information 
obtained under this paragraph in the morning report as soon as 
practicable, but not later than 11 a.m. Central Time, on each reporting 
day.
    (c) Afternoon report. The corporate officers or officially 
designated representatives of each packer processing plant shall report 
to the Secretary not later than 2:00 p.m. Central Time each reporting 
day as described in Sec. 59.10(b):
    (1) The packer's best estimate of the total number of swine and 
packer-owned swine expected to be purchased throughout the reporting 
day through each type of purchase;
    (2) The total number of swine and packer-owned swine purchased up 
to that time of the reporting day through each type of purchase;
    (3) The base price paid for all base market hogs purchased up to 
that time of the reporting day through negotiated purchases; and
    (4) The base price paid for all base market hogs purchased through 
each type of purchase other than negotiated purchase up to that time of 
the reporting day, unless such information is unavailable due to 
pricing that is determined on a delayed basis. The packer shall report 
information on such purchases on the first reporting day or scheduled 
reporting time on a reporting day after the price has been determined.
    (5) Publication. The Secretary shall publish the information 
obtained under this paragraph in the afternoon report as soon as 
practicable, but not later than 3:00 p.m. Central Time, on each 
reporting day.


Sec. 59.203  Mandatory weekly reporting for swine.

    (a) Weekly noncarcass merit premium report. Not later than 4:00 
p.m. Central Time in accordance with Sec. 59.10(b) on the first 
reporting day of each week, the corporate officers or officially 
designated representatives of each packer processing plant shall report 
to the Secretary a noncarcass merit premium report that lists:
    (1) Each category of standard noncarcass merit premiums used by the 
packer in the prior slaughter week; and
    (2) The dollar value (in dollars per hundred pounds of carcass 
weight) paid to producers by the packer, by category.
    (b) Premium list. A packer shall maintain and make available to a 
producer, on request, a current listing of the dollar values (per 
hundred pounds of carcass weight) of each noncarcass merit premium used 
by the packer during the current or the prior slaughter week.
    (c) Publication. The Secretary shall publish the information 
obtained under this subsection as soon as practicable, but not later 
than 5:00 p.m. Central Time, on the first reporting day of each week.

Subpart D--Lamb Reporting


Sec. 59.300  Definitions.

    The following definitions apply to this subpart.
    Boxed lamb. The term ``boxed lamb'' means those carlot-based 
portions of a lamb carcass including fresh primals, subprimals, cuts 
fabricated from subprimals (excluding portion-control cuts such as 
chops and steaks similar to those portion cut items described in the 
Institutional Meat Purchase Specifications (IMPS) for Fresh Lamb and 
Mutton Series 200, and thin meats (e.g. inside and outside skirts, 
pectoral meat, cap and wedge meat, and blade meat) not older than 14 
days from date of manufacture; fresh ground lamb, lamb trimmings, and 
boneless processing lamb not older than 7 days from date of 
manufacture; frozen primals, subprimals, cuts fabricated from 
subprimals, and thin meats not older than 180 days from date of 
manufacture; and frozen ground lamb, lamb trimmings, and boneless 
processing lamb not older than 90 days from date of manufacture.
    Branded. The term ``branded'' means boxed lamb cuts produced and 
marketed under a corporate trademark (for example, products that are 
marketed on their quality, yield, or breed characteristics), or boxed 
lamb cuts produced and marketed under one of USDA's Meat Grading and 
Certification Branch, Certified programs.
    Carcass characteristics. The term ``carcass characteristics'' means 
the range and average carcass weight in pounds, the quality grade and 
yield grade (if applicable), and the lamb average dressing percentage.
    Carlot-based. The term ``carlot-based'' means any transaction 
between a buyer and a seller destined for three or less delivery stops 
consisting of one or more individual boxed lamb items or any 
combination of carcass weights.
    Established. The term ``established'', when used in connection with 
prices, means that point in time when the buyer and seller agree upon a 
net price.
    Formula marketing arrangement.
    (1) When used in reference to live lambs, the term ``formula 
marketing arrangement'' means the advance commitment of lambs for 
slaughter by any means other than through a negotiated purchase or a 
forward contract, using a method for calculating price in which the 
price is determined at a future date.
    (2) When used in reference to boxed lamb, the term ``formula 
marketing arrangement'' means the advance commitment of boxed lamb by 
any means other than through a negotiated purchase or a forward 
contract, using a method for calculating price in which the price is 
determined at a future date.
    Forward contract.
    (1) When used in reference to live lambs, the term ``forward 
contact'' means an agreement for the purchase of lambs, executed in 
advance of slaughter, under which the base price is established by 
reference to publicly available prices.
    (2) When used in reference to boxed lamb, the term ``forward 
contract'' means an agreement for the sale of boxed lamb, executed in 
advance of manufacture, under which the base price is established by 
reference to publicly available quoted prices.
    Importer. The term ``importer'' means any person engaged in the 
business of importing lamb meat products who takes ownership of such 
lamb meat products with the intent to sell or ship in U.S. commerce. 
For any calendar year, the term includes only those that imported an 
average of 5,000 metric tons of lamb meat products per year during the 
immediately preceding 5 calendar years. Additionally, the term includes 
those that did not import an average of 5,000 metric tons of lamb meat 
products during the immediately preceding 5 calendar years, if the 
Secretary determines that the person should be considered an importer 
based on their volume of lamb imports.
    Lambs committed. The term ``lambs committed'' means lambs that are 
scheduled to be delivered to a packer within the 7-day period beginning 
on the date of an agreement to sell the lambs.
    Packer. The term ``packer'' means any person engaged in the 
business of buying lambs in commerce for purposes of slaughter, of 
manufacturing or preparing meat products from lambs for sale or 
shipment in commerce, or of marketing meats or meat products from lambs 
in an unmanufactured form acting as a wholesale broker, dealer, or 
distributor in commerce. For any calendar year, the term includes only 
a federally inspected lamb processing plant which slaughtered or 
processed the equivalent of an average of 75,000 head of lambs per year 
during the immediately preceding 5 calendar years. Additionally, the 
term includes a lamb

[[Page 75520]]

processing plant that did not slaughter or process an average of 75,000 
lambs during the immediately preceding 5 calendar years if the 
Secretary determines that the processing plant should be considered a 
packer after considering its capacity.
    Packer-owned lambs. The term ``packer-owned lambs'' means lambs 
that a packer owns for at least 14 days immediately before slaughter.
    Terms of trade. The term ``terms of trade'' includes, with respect 
to the purchase of lambs for slaughter:
    (1) Whether a packer provided any financing agreement or 
arrangement with regard to the lambs;
    (2) Whether the delivery terms specified the location of the 
producer or the location of the packer's plant;
    (3) Whether the producer is able to unilaterally specify the date 
that the lambs are to be delivered for slaughter; and
    (4) The percentage of lambs purchased by a packer as a negotiated 
purchase that are delivered to the plant for slaughter more than 7 
days, but less than 14 days, after the earlier of either:
    (i) The date on which the lambs were committed to the packer;
    (ii) The date on which the lambs were purchased by the packer; or
    (iii) The date on which the lambs were priced by the packer.
    Type of purchase. The term ``type of purchase'' means a negotiated 
purchase, a formula market arrangement, and a forward contract.
    Type of sale. The term ``type of sale'' with respect to boxed lamb, 
means a negotiated sale, a formula market arrangement, and a forward 
contract.


Sec. 59.301  Mandatory daily reporting for lambs.

    (a) In General. The corporate officers or officially designated 
representatives of each packer processing plant shall report to the 
Secretary at least once each reporting day not later than 2:00 p.m. 
Central Time the following information for lamb, categorized to clearly 
delineate domestic from imported market purchases as described in 
Sec. 59.10(b):
    (1) The prices for lambs (per hundredweight) established on that 
day as F.O.B. feedlot or delivered at the plant, categorized by:
    (i) The type of purchase;
    (ii) The class of lamb;
    (iii) The quantity of lambs purchased on a live weight basis;
    (vi) The quantity of lambs purchased on a dressed weight basis;
    (v) A range and average of estimated live weights of lambs 
purchased;
    (vi) An estimate of the percentage of the lambs purchased that were 
of a quality grade of Choice or better;
    (vii) Any premiums or discounts associated with weight, quality 
grade, yield grade, or any type of purchase;
    (viii) Lamb State of origin;
    (ix) The pelt type; and
    (x) The estimated lamb dressing percentage.
    (2) The quantity of lambs delivered to the packer (quoted in 
numbers of head) on that day, categorized by:
    (i) The type of purchase;
    (ii) The quantity of lambs delivered on a live weight basis; and
    (iii) The quantity of lambs delivered on a dressed weight basis.
    (3) The quantity of lambs committed to the packer (quoted in 
numbers of head) as of that day, categorized by:
    (i) The type of purchase;
    (ii) The quantity of lambs committed on a live weight basis; and
    (iii) The quantity of lambs committed on a dressed weight basis.
    (4) The terms of trade regarding the lambs, as applicable.
    (b) Publication. The Secretary shall make the information available 
to the public not less than once each reporting day.


Sec. 59.302  Mandatory weekly reporting for lambs.

    (a) In general. The corporate officers or officially designated 
representatives of each packer processing plant shall report to the 
Secretary the following information applicable to the prior slaughter 
week contained in paragraphs (a)(1) through (a)(4) and (a)(6) of this 
section not later than 9 a.m. Central Time on the second reporting day 
of the current slaughter week, and the following information applicable 
to the prior slaughter week contained in paragraph (a)(5) of this 
section not later than 9:00 a.m. Central Time on the first reporting 
day of the current slaughter week categorized to clearly delineate 
domestic from imported market purchases:
    (1) The quantity of lambs purchased through forward contracts that 
were slaughtered;
    (2) The quantity of lambs delivered under a formula marketing 
arrangement that were slaughtered;
    (3) The quantity and carcass characteristics of packer-owned lambs 
that were slaughtered;
    (4) The quantity, basis level, and delivery month for all lambs 
purchased through forward contracts;
    (5) The following information applicable to the current slaughter 
week. The range and average of intended premiums and discounts 
(including those associated with weight, quality grade, yield grade, or 
type of lamb) that are expected to be in effect for the current 
slaughter week; and
    (6) The following information for lambs purchased through a formula 
marketing arrangement and slaughtered during the prior slaughter week, 
categorized to clearly delineate domestic from imported market 
purchases:
    (i) The quantity (quoted in both numbers of head and pounds) of 
lambs;
    (ii) The weighted average price paid for a carcass, including 
applicable premiums and discounts;
    (iii) The range of premiums and discounts paid;
    (iv) The weighted average of premiums and discounts paid;
    (v) The range of prices paid; and
    (vi) The terms of trade regarding the lambs, as applicable.
    (b) Publication. The Secretary shall make available to the public 
the information obtained under paragraphs (a)(1) through (a)(4) and 
(a)(6) of this section on the second reporting day of the current 
slaughter week and information obtained in paragraph (a)(5) of this 
section on the first reporting day of the current slaughter week.


Sec. 59.303  Mandatory reporting of lamb carcasses and boxed lamb.

    (a) Daily reporting of lamb carcass transactions. The corporate 
officers or officially designated representatives of each packer shall 
report to the Secretary each reporting day the following information on 
total carlot-based lamb carcass transactions not later than 3:00 p.m. 
Central Time in accordance with Sec. 59.10(b):
    (1) The price for each lot of each lamb carcass transaction, quoted 
in dollars per hundredweight on an F.O.B. plant basis;
    (2) The quantity for each lot of each transaction, quoted by number 
of carcasses sold; and
    (3) The following information regarding the characteristics of each 
transaction:
    (i) The type of sale;
    (ii) The USDA quality grade of lamb;
    (iii) The USDA yield grade;
    (iv) The estimated weight range of the carcasses; and
    (v) The product delivery period.
    (b) Daily reporting of domestic boxed lamb sales. The corporate 
officers or officially designated representatives of each packer shall 
report to the Secretary each reporting day the following information on 
total domestic boxed lamb cut sales not later than 2:30 p.m. Central 
Time as described in Sec. 59.10(b):
    (1) The price for each lot of each boxed lamb cut sale, quoted in 
dollars per hundredweight on a F.O.B. plant basis;
    (2) The quantity for each lot of each sale, quoted by product 
weight sold; and

[[Page 75521]]

    (3) The following information regarding the characteristics of each 
transaction:
    (i) The type of sale;
    (ii) The branded product characteristics, if applicable;
    (iii) The U.S.D.A. quality grade of lamb;
    (iv) The cut of lamb, referencing the most recent version of the 
Institutional Meat Purchase Specifications (IMPS), when applicable;
    (v) U.S.D.A. yield grade, if applicable;
    (vi) The product state of refrigeration;
    (vii) The weight range of the cut; and
    (viii) The product delivery period.
    (c) Weekly reporting of imported boxed lamb sales. The corporate 
officers or officially designated representatives of each lamb importer 
shall report to the Secretary on the first reporting day of each week 
the following information applicable to the prior week for imported 
boxed lamb cut sales not later than 10 a.m. Central Time:
    (1) The price for each lot of a boxed lamb cut sale, quoted in 
dollars per hundredweight on a F.O.B. plant basis;
    (2) The quantity for each lot of a transaction, quoted by product 
weight sold; and
    (3) The following information regarding the characteristics of each 
transaction:
    (i) The type of sale;
    (ii) The branded product characteristics, if applicable;
    (iii) The cut of lamb, referencing the most recent version of the 
Institutional Meat Purchase Specifications (IMPS), when applicable;
    (iv) The product state of refrigeration;
    (v) The weight range of the cut; and
    (vi) The product delivery period.
    (d) Publication. The Secretary shall make available to the public 
the information required to be reported in paragraphs (a) and (b) of 
this section not less frequently than once each reporting day and the 
information required to be reported in paragraph (c) of this section on 
the first reporting day of the current slaughter week.

Subpart E--OMB Control Number


Sec. 59.400  OMB control number assigned pursuant to the Paperwork 
Reduction Act.

    The information collection and recordkeeping requirements of this 
part have been approved by the Office of Management and Budget (OMB) 
under the provisions of 44 U.S.C. Chapter 35 and have been assigned OMB 
Control Number 0581-0186.

    Dated: November 20, 2000.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.

    Note: The following Appendices will not appear in the Code of 
Federal Regulations.

Appendix A--Cattle Mandatory Reporting Forms

    The following 6 forms visually represent the mandatory market 
information that is required to be reported electronically on 
domestic and import sales and purchases of live cattle and boxed 
beef to the Agricultural Marketing Service.

Cattle

LS-113  Live Cattle Daily Report (Current Established Prices)
LS-114  Live Cattle Daily Report (Committed and Delivered Cattle)
LS-115  Live Cattle Weekly Report (Forward Contract and Packer-
Owned)
LS-116  Live Cattle Weekly Report (Formula Purchases)
LS-117  Cattle Premiums and Discounts Weekly Report
LS-126  Boxed Beef Daily Report

Appendix B--Swine Mandatory Reporting Forms

    The following 3 forms visually represent the mandatory market 
information that is required to be reported electronically on 
domestic and import sales and purchases of live swine to the 
Agricultural Marketing Service.

Swine

LS-118  Swine Prior Day Report
LS-119  Swine Daily Report
LS-120  Swine Noncarcass Merit Premium Weekly Report

Appendix C--Lamb Mandatory Reporting Forms

    The following 7 forms visually represent the mandatory market 
information that is required to be reported electronically on 
purchases of live lambs and imported boxed lamb cuts; and sales of 
lamb carcasses, and domestic and import boxed lamb cuts to the 
Agricultural Marketing Service.

Lamb

LS-121  Live Lamb Daily Report (Current Established Prices)
LS-122  Live Lamb Daily Report (Committed and Delivered Lambs)
LS-123  Live Lamb Weekly Report (Forward Contract and Packer-Owned)
LS-124  Live Lamb Weekly Report (Formula Purchases)
LS-125  Lamb Premiums and Discounts Report
LS-128  Boxed Lamb Report
LS-129  Lamb Carcass Report

Appendix D--Mandatory Reporting Forms Guideline

    The following mandatory reporting form guidelines will be used 
by persons required to report electronically transmitted mandatory 
market information to the Agricultural Marketing Service.
    The first 10 fields of each mandatory reporting form provide the 
following information: identification number (plant establishment 
number or importer ID number), company name (name of parent 
company), plant street address (street address for plant), plant 
city (city where plant is located), plant state (state where plant 
is located), plant zip code (zip code where plant is located), 
contact name (the name of the corporate representative contact at 
the plant), phone number (full phone number for the plant including 
area code), reporting date (date the information was submitted (mm/
dd/yyyy),and reporting time (the submission time corresponding to 
the 10:00 a.m. and the 2:00 p.m. reporting requirements). The 
reporting time requirement is only applicable to forms LS-113 Live 
Cattle Daily Report (current established prices), LS-114 Live Cattle 
Daily Report (Committed and Delivered Cattle), LS-126 Boxed Beef 
Daily Report, and LS-119 Swine Daily Report.
    (a) Cattle Mandatory Reporting Forms. (See Appendix E for 
samples)
    (1) LS-113--Live Cattle Daily Report (current established 
prices).
    (i) Lot identification (11). Enter code used to identify the lot 
to the packer.
    (ii) Source (12). Enter `1', domestic, if cattle were purchased 
inside of the 50 States, or `2', imported, if cattle were purchased 
outside of the 50 States.
    (iii) Purchase type code (13). Enter the code that describes the 
type of purchase.
    (iv) Class code (14). Enter the code that best describes the 
type of cattle.
    (v) Selling basis (15a-b). For 15a, enter ``1'' if cattle were 
purchased on a live basis or ``2'' if cattle were purchased on a 
dressed basis. For 15b, enter ``1'' if cattle are shipped on an FOB 
feedlot basis or ``2'' if cattle are delivered at the plant.
    (vi) Head count (16). Enter the quantity of cattle in the lot in 
number of head.
    (vii) Weight range (17a & 17b). Enter the lowest (17a) and 
highest (17b) weights for cattle in the lot in pounds.
    (viii) Estimated average weight (18). Enter the estimated 
average weight of the lot in pounds.
    (ix) Average price (19). Enter the price established on that day 
for the lot in dollars per hundredweight.
    (I) For negotiated purchases, enter the final (net) price paid.
    (II) For formula purchases, enter the base price.
    (III) For forward contract purchases, enter either the final 
(net) price paid or the base price depending on the contract.
    (x) Percent Choice or better (20). Enter the percentage of the 
number of cattle in the lot of a quality grade of Choice or better.
    (xi) Classification code (21). Enter the code which best 
describes the quality of the majority of the cattle in the lot.
    (xii) Dressing percentage (22). Enter an average dressing 
percentage for the cattle in the lot. For negotiated purchases, 
enter an estimate. For all other purchase types, enter the actual 
average dressing percentage.
    (xiii) Origin (23). Enter the 2-letter postal abbreviation for 
the State in which the cattle were fed to slaughter weight. Leave 
blank if cattle are imported.

[[Page 75522]]

    (xiv) Premiums and discounts paid (24a-f). Enter the total net 
value of the adjustment for the lot (in dollars per hundredweight) 
for any premiums associated with weight, quality, or yield expressed 
as a positive value and for any discounts associated with weight, 
quality, or yield expressed as a negative value in parenthesis.
    (xv) Terms of Trade (25a-d). Enter when applicable, otherwise 
leave blank.
    (I) Packer financing (25a). Enter ``1'' (yes) or ``2'' (no) in 
response to: ``Did packer provided financing agreement or 
arrangement with regards to the cattle?''
    (II) Delivery location (25b). Enter ``1'' if delivery terms 
specify producer location, ``2'' if they specify packer's plant 
location.
    (III) Delivery Date (25c). Enter ``1'' if producer sets date of 
delivery for slaughter unilaterally; otherwise enter ``2'' for 
packer.
    (IV) Delivered (25d). Enter ``1'' if negotiated purchased cattle 
are to be delivered for slaughter 7 or less days from the committed, 
purchased, or priced date. Enter ``2'' if they are to be delivered 
for slaughter between 8 and 14 days from the date the cattle were 
committed, purchased, or priced.
    (2) LS-114--Live Cattle Daily Report (committed and delivered 
cattle)
    (i) Lot identification (11). Enter code used to identify the lot 
to the packer.
    (ii) Purchasing basis (12). Enter ``1'' if cattle are delivered 
or ``2'' if cattle are committed.
    (iii) Source (13). Enter ``1'', domestic, if cattle are 
purchased within the 50 States or ``2'', imported, if cattle are 
purchased outside of the 50 States.
    (iv) Purchase type code (14). Enter the code that best describes 
the type of purchase.
    (v) Class Code (15). Enter the code that best describes the type 
of cattle in the lot.
    (vi) Selling basis (16). Enter ``1'' if cattle were purchased on 
a live basis or a ``2'' if cattle were purchased on a dressed basis.
    (vii) Head count (17). Enter the quantity of cattle in the lot 
in number of head.
    (viii) Origin (18). Enter the 2-letter postal abbreviation for 
the State in which the cattle were fed to slaughter weight. Leave 
blank if cattle were imported.
    (ix) Terms of Trade (19a-d). Enter when applicable, otherwise 
leave blank.
    (I) Packer financing (19a). Enter ``1'' (yes) or ``2'' (no) in 
response to: ``Did packer provide financing agreement or arrangement 
with regards to the cattle?''
    (II) Delivery location (19b). Enter ``1'' if delivery terms 
specify producer location, ``2'' if they specify packer's plant 
location.
    (III) Delivery Date (19c). Enter ``1'' if producer sets date of 
delivery for slaughter unilaterally; otherwise enter ``2'' for 
packer.
    (IV) Delivered (19d). Enter ``1'' if negotiated purchased cattle 
are to be delivered for slaughter 7 or less days from the committed, 
purchased, or priced date. Enter ``2'' if they are to be delivered 
for slaughter between 8 and 14 days from the date the cattle were 
committed, purchased, or priced.
    (3) LS-115--Live Cattle Weekly Report (forward contract and 
packer-owned).
    (i) Packer-Owned lot identification (11). Enter code used to 
identify the lot of packer-owned cattle to the packer.
    (ii) Packer-Owned source (12). Enter ``1'', domestic, if packer-
owned cattle are from within the 50 States or ``2'', imported, if 
cattle are from outside of the 50 States.
    (iii) Packer-Owned head count (13). Enter the quantity of 
packer-owned cattle in the lot in number of head.
    (iv) Packer-Owned actual carcass weight range (14a & 14b). Enter 
the lowest (14a) and highest (14b) actual carcass weights for cattle 
in the lot in pounds.
    (v) Packer-Owned actual average carcass weight (15). Enter the 
actual average carcass weight of the lot of packer-owned cattle in 
pounds.
    (vi) Packer-Owned average dressing percentage (16). Enter the 
average dressing percentage of the lot of packer-owned cattle.
    (vii) Percentage yield grade 3 or better (17). Enter the 
percentage of packer-owned cattle in the lot of a yield grade of 3 
or better.
    (viii) Quality grade percentage (18-19). Enter the percentage of 
packer-owned cattle in the lot of a quality grade of Choice or 
better (18) and the percentage of packer-owned cattle in the lot of 
a quality grade of Select (19).
    (ix) Prior week slaughtered cattle head counts (20-23). Enter 
the total number of head of cattle slaughtered for the prior week 
that were purchased through forward contracts and the total number 
of head for cattle purchased through formula arrangements, 
categorized by domestic or imported sources. Enter this information 
once per each week's submission.
    (x) Forward contract purchases lot identification (24). Enter 
code used to identify forward contracted cattle to the packer.
    (xi) Forward contract purchases head count (25). Enter quantity 
of forward contracted cattle in the lot in number of head.
    (xii) Forward contract purchases basis level (26). Enter the 
agreed upon adjustment to a future price to establish the final 
price of the forward contracted cattle in dollars per one hundred 
pounds.
    (xiii) Forward contract purchases delivery month (27). Enter the 
delivery month of the cattle purchased through forward contracts as 
a 3-letter abbreviation.
    (4) LS-116--Live Cattle Weekly Report (formula purchases).
    (i) Lot identification (11). Enter code used to identify the lot 
to the packer.
    (ii) Source (12). Enter ``1'', domestic, if cattle are purchased 
within the 50 States or ``2'', imported, if cattle are purchased 
outside of the 50 States.
    (iii) Head count (13). Enter the quantity of cattle in the lot 
in number of head.
    (iv) Total pounds (14). Enter the total quantity of cattle in 
the lot in pounds.
    (v) Weighted average carcass price (15). Enter the average 
weighted average carcass price for the cattle in the lot in dollars 
per hundredweight.
    (vi) Range of prices paid (16a-b). Enter the lowest (16a) and 
the highest (16b) prices paid for the cattle in the lot in dollars 
per hundredweight.
    (vii) Range of premiums and discounts paid (17a-b). Enter the 
lowest (17a) and the highest (17b) premium and discount paid for the 
lot of cattle in dollars per hundredweight. Enter negative values in 
parenthesis.
    (viii) Weighted average of premiums and discounts paid (18). 
Enter the weighted average of the premiums and discounts paid for 
the lot of cattle in dollars per hundredweight. Enter negative 
values in parenthesis.
    (ix) Terms of Trade (19a-c). Enter when applicable else leave 
blank.
    (I) Packer financing (19a). Enter ``1'' (yes) or ``2'' (no) in 
response to: ``Did packer provided financing agreement or 
arrangement with regards to the cattle?''
    (II) Delivery location (19b). Enter ``1'' if delivery terms 
specify producer location, ``2'' if they specify packer's plant 
location.
    (III) Delivery Date (19c). Enter ``1'' if producer sets date of 
delivery for slaughter unilaterally; otherwise enter ``2'' for 
packer.
    (5) LS-117--Cattle Premiums and Discounts Weekly Report.
    (i) Enter the premiums and discounts (in dollars per 
hundredweight) expected to be in effect for the current slaughter 
week for each applicable category of premium and discount (11-34). 
For ``other'' categories (35-38), provide a brief description of the 
basis for the premium/discount along with the value of the premium/
discount. Enter negative values in parenthesis.
    (6) LS-126--Boxed Beef Daily Report. For lots comprising 
multiple items, provide information for each item in a separate 
record identified with the same lot identification or purchase order 
number.
    (i) Lot identification or purchase order number (11). Enter code 
used to identify the lot to the packer.
    (ii) Destination (12). Enter ``1'', domestic, for product 
shipped within the 50 States or ``2'', exported, for product shipped 
outside of the 50 States.
    (iii) Purchase type code (13). Enter the code corresponding to 
the sale type of the lot of boxed beef.
    (iv) Delivery period code (14). Enter the code corresponding to 
the delivery time period of the lot of boxed beef.
    (v) Refrigeration (15). Enter ``1'' if the product is sold in a 
fresh condition or ``2'' if the product is sold in a frozen 
condition.
    (vi) Class code (16). Enter the code that best describes the 
class of cattle from which the boxed beef was produced.
    (vii) Classification code (17). Enter the code corresponding to 
the grade of the boxed beef.
    (viii) Beef cut (18a-b). Enter the numerical code corresponding 
to the Institutional Meat Purchase Specifications (IMPS) (3 to 4 
characters)(18a) or the internal corporate descriptor used to 
identify the product (18b). Descriptors must be entered consistently 
for all submissions.
    (ix) Trim spec code (19). Enter the code corresponding to the 
trim level of the boxed beef.
    (x) Weight (20). Enter the code corresponding to the relative 
weight of the product. Where weight is a factor, enter ``1'' to 
signify the lighter weight range, ``2'' to signify the middle weight 
range, or ``3'' to signify the heavier weight range. Where weight is 
not a factor, enter ``4'' to signify all weights or mixed.
    (xi) Total product weight (21). Enter the total weight of the 
boxed beef cut in the lot in pounds.

[[Page 75523]]

    (xii) Price (22). Enter the price received for each boxed beef 
cut in the lot in dollars per one hundred pounds, FOB Plant basis.
    (xiii) USDA Certified schedule code (23). Enter the code for the 
USDA Certified Program schedule, if applicable (e.g. G1, G2, etc.); 
otherwise leave blank.
    (xiv) Branded product code (24a-b). Enter the quality grade code 
(24a) and the yield grade code (24b) that best describes the brand. 
Leave blank if not applicable.
    (b) Swine Mandatory Reporting Forms. (see Appendix E for 
samples)
    (1) LS-118--Swine Prior Day Report.
    (i) Slaughtered swine lot identification (11). Enter code used 
to identify the lot of slaughtered swine to the packer.
    (ii) Slaughtered swine class code (12). Enter the code that best 
describes the type of slaughtered swine in the lot.
    (iii) Slaughtered swine purchase type code (13). Enter the code 
that describes the type of purchase for the slaughtered swine in the 
lot.
    (iv) Slaughtered swine head count (14). Enter the quantity of 
slaughtered swine in the lot in number of head.
    (v) Slaughtered swine base price (15). Enter the base price 
established on that day for the lot of slaughtered swine in dollars 
per one hundred pounds.
    (vi) Slaughtered swine average net price (16). Enter the average 
net price established on that day for the lot of slaughtered swine 
in dollars per one hundred pounds.
    (vii) Slaughtered swine lowest net price (17). Enter the lowest 
net price established on that day for the lot of slaughtered swine 
in dollars per one hundred pounds.
    (viii) Slaughtered swine highest net price (18). Enter the 
highest net price established on that day for the lot of slaughtered 
swine in dollars per one hundred pounds.
    (ix) Slaughtered swine average live weight (19). Enter the 
average live weight of the lot of swine in pounds if slaughtered 
swine were purchased on a live basis, otherwise leave blank.
    (x) Slaughtered swine average carcass weight (20). Enter the 
average carcass weight of the lot of slaughtered swine in pounds.
    (xi) Slaughtered swine average sort loss (21). Enter the average 
sort loss for the lot of slaughtered swine in dollars per one 
hundred pounds.
    (xii) Slaughtered swine average backfat (22). Enter the average 
backfat measurement for the lot of slaughtered swine in inches 
rounded to the nearest tenth of an inch.
    (xiii) Slaughtered swine average loin depth (23). Enter the 
average loin depth measurement for the lot of slaughtered swine in 
inches rounded to the nearest tenth of an inch.
    (xiv) Slaughtered swine average lean percentage (24). Enter the 
average lean percentage for the lot of slaughtered swine.
    (xv) Purchased swine lot identification (25). Enter code used to 
identify the lot of purchased swine to the packer.
    (xvi) Purchased swine ownership code (26). Enter code which best 
describes the source of the purchased swine whether packer-owned, 
purchased from another packer, or all other swine.
    (xvii) Purchased swine class code (27). Enter the code that best 
describes the type of purchased swine.
    (xviii) Purchased swine purchase type code (28). Enter the code 
that describes the type of purchase for the purchased swine.
    (xix) Purchased swine head count (29). Enter the quantity of 
purchased swine in the lot.
    (xx) Purchased swine average live weight (30). Enter the average 
live weight of the lot of swine in pounds if swine were purchased on 
a live basis, otherwise leave blank.
    (xxi) Purchased swine base price (31). Enter the base price 
established on that day for the lot of purchased swine in dollars 
per one hundred pounds.
    (xxii) Scheduled swine (32-45). Enter the number of head of 
purchase commitment swine that were scheduled for delivery for each 
of the next 14 days. Enter the total quantity currently scheduled 
for each day at the time of reporting for each submission.
    (2) LS-119--Swine Daily Report.
    (i) Purchased swine lot identification (11). Enter code used to 
identify the lot of purchased swine to the packer.
    (ii) Purchased swine purchase type code (12). Enter the code 
that describes the type of purchase for the swine in the lot.
    (iii) Purchased swine live weight (13). Enter live weight of 
swine in pounds if purchased live, otherwise leave blank.
    (iv) Purchased swine class code (14). Enter the code that best 
describes the type of swine in the lot.
    (v) Purchased swine head count (15). Enter the quantity of swine 
in the lot in number of head.
    (vi) Purchased swine base price (16). Enter the base price 
established on that day for the lot of swine in dollars per one 
hundred pounds.
    (vii) Purchased swine origin (17). Enter the 2-letter postal 
abbreviation for the State in which the swine were fed to slaughter 
weight.
    (viii) Packer-sold swine purchases (18-25). Enter the best 
estimate of the total number of packer-sold swine expected to be 
purchased throughout the reporting day for each purchase type and 
the total number of packer-sold swine purchased up to that time of 
the reporting day for each purchase type.
    (ix) Packer-sold swine purchases (26-33). Enter the best 
estimate of the total number of all other swine expected to be 
purchased throughout the reporting day for each purchase type and 
the total number of all other swine purchased up to that time of the 
reporting day for each purchase type.
    (3) LS-120--Swine Noncarcass Merit Premium Weekly Report.
    (i) Enter the standard noncarcass merit premiums used during the 
prior slaughter week (11-15) in dollars per hundredweight. If a 
range of standard noncarcass merit premiums was used, enter the low 
side of the range (a) and the high side of the range (b). If only 
one value was used, enter the same number in (a) and (b). If no 
value for the specified merit was used, leave blank. For `other' 
categories (16-20), provide a brief description of the basis for the 
premium along with the value of the premium.

(c) Lamb Mandatory Reporting Forms. (See Appendix E for samples)

    (1) LS-121--Live Lamb Daily Report (current established prices).
    (i) Lot identification (11). Enter code used to identify the lot 
to the packer.
    (ii) Source (12). Enter ``1'', domestic, if lambs were purchased 
inside of the 50 States, or ``2'', imported, if lambs were purchased 
outside of the 50 States.
    (iii) Purchase type code (13). Enter the code that describes the 
type of purchase.
    (iv) Class code (14). Enter the code that best describes the 
type of lambs.
    (v) Selling basis (15a-b). For 15a, enter ``1'' if lambs were 
purchased on a live basis or ``2'' if lambs were purchased on a 
dressed basis. For 15b, enter ``1'' if lambs are shipped on an FOB 
feedlot basis or ``2'' if lambs are delivered at the plant.
    (vi) Head count (16). Enter the quantity of lambs in the lot in 
number of head.
    (vii) Weight range (17a & 17b). Enter the lowest (17a) and 
highest (17b) weights for lambs in the lot in pounds.
    (viii) Estimated average weight (18). Enter the estimated 
average weight of the lot in pounds.
    (ix) Average price (19). Enter the price established on that day 
for the lot in dollars per hundredweight.
    (I) For negotiated purchases, enter the final (net) price paid.
    (II) For formula purchases, enter the base price.
    (III) For forward contract purchases, enter either the final 
(net) price paid or the base price depending on the contract.
    (x) Percent Choice or better (20). Enter the percentage of the 
number of lambs in the lot of a quality grade of Choice or better.
    (xi) Classification code (21). Enter the code which best 
describes the quality of the majority of the lambs in the lot.
    (xii) Dressing percentage (22). Enter an average dressing 
percentage for the lambs in the lot. For negotiated purchases, enter 
an estimate. For all other purchase types, enter the actual average 
dressing percentage.
    (xiii) Origin (23). Enter the 2-letter postal abbreviation for 
the State in which the lambs were fed to slaughter weight. Leave 
blank if lambs are imported.
    (xiv) Pelt Code (24). Enter the code that best describes the 
type of pelt for the majority of lambs in the lot.
    (xv) Premiums and discounts paid (25a-f). Enter the total net 
value of the adjustment for the lot (in dollars per hundredweight) 
for any premiums associated with weight, quality, or yield expressed 
as a positive value and for any discounts associated with weight, 
quality, or yield expressed as a negative value in parenthesis.
    (xvi) Terms of Trade (26a-d). Enter when applicable, otherwise 
leave blank.
    (I) Packer financing (26a). Enter ``1'' (yes) or ``2'' (no) in 
response to: ``Did packer provided financing agreement or 
arrangement with regards to the lambs?'
    (II) Delivery location (26b). Enter ``1'' if delivery terms 
specify producer location, ``2'' if they specify packer's plant 
location.
    (III) Delivery Date (26c). Enter ``1'' if producer sets date of 
delivery for slaughter unilaterally; otherwise enter ``2'' for 
packer.

[[Page 75524]]

    (IV) Delivered (26d). Enter ``1'' if negotiated purchased lambs 
are to be delivered for slaughter 7 or less days from the committed, 
purchased, or priced date. Enter ``2'' if they are to be delivered 
for slaughter between 8 and 14 days from the date the lambs were 
committed, purchased, or priced.
    (2) LS-122--Live Lamb Daily Report (committed and delivered 
lambs)
    (i) Lot identification (11). Enter code used to identify the lot 
to the packer.
    (ii) Purchasing basis (12). Enter ``1'' if lambs are delivered 
or ``2'' if lambs are committed.
    (iii) Source (13). Enter ``1'', domestic, if lambs are purchased 
within the 50 States or ``2'', imported, if lambs are purchased 
outside of the 50 States.
    (iv) Purchase type code (14). Enter the code that best describes 
the type of purchase.
    (v) Selling basis (15). Enter ``1'' if lambs were purchased on a 
live basis or a ``2'' if lambs were purchased on a dressed basis.
    (vi) Head count (16). Enter the quantity of lambs in the lot in 
number of head.
    (vii) Origin (17). Enter the 2-letter postal abbreviation for 
the State in which the lambs were fed to slaughter weight. Leave 
blank if lambs were imported. (viii) Terms of Trade (18a-d). Enter 
when applicable, otherwise leave blank.
    (I) Packer financing (18a). Enter ``1'' (yes) or ``2'' (no) in 
response to: ``Did packer provided financing agreement or 
arrangement with regards to the lambs?'
    (II) Delivery location (18b). Enter ``1'' if delivery terms 
specify producer location, ``2'' if they specify packer's plant 
location.
    (III) Delivery Date (18c). Enter ``1'' if producer sets date of 
delivery for slaughter unilaterally; otherwise enter ``2'' for 
packer.
    (IV) Delivered (18d). Enter ``1'' if negotiated purchased lambs 
are to be delivered for slaughter 7 or less days from the committed, 
purchased, or priced date. Enter ``2'' if they are to be delivered 
for slaughter between 8 and 14 days from the date the lambs were 
committed, purchased, or priced.
    (3) LS-123--Live Lamb Weekly Report (forward contract and 
packer-owned). (i)Packer-Owned lot identification (11). Enter code 
used to identify the lot of packer-owned lambs to the packer.
    (ii) Packer-Owned source (12). Enter ``1'', domestic, if packer-
owned lambs are from within the 50 States or ``2'', imported, if 
lambs are from outside of the 50 States.
    (iii) Packer-Owned head count (13). Enter the quantity of 
packer-owned lambs in the lot in number of head.
    (iv) Packer-Owned actual carcass weight range (14a & 14b). Enter 
the lowest (14a) and highest (14b) actual carcass weights for lambs 
in the lot in pounds.
    (v) Packer-Owned actual average carcass weight (15). Enter the 
actual average carcass weight of the lot of packer-owned lambs in 
pounds.
    (vi) Packer-Owned average dressing percentage (16). Enter the 
average dressing percentage of the lot of packer-owned lambs.
    (vii) Percentage yield grade 3 or better (17). Enter the 
percentage of packer-owned lambs in the lot of a yield grade of 3 or 
better.
    (viii) Quality grade percentage (18-19). Enter the percentage of 
packer-owned lambs in the lot of a quality grade of Choice or better 
(18) and the percentage of packer-owned lambs in the lot of a 
quality grade of Good (19).
    (ix) Prior week slaughtered lambs head counts (20-23). Enter the 
total number of head of lambs slaughtered for the prior week that 
were purchased through forward contracts and the total number of 
head for lambs purchased through formula arrangements, categorized 
by domestic or imported sources. Enter this information once per 
each week's submission.
    (x) Forward contract purchases lot identification (24). Enter 
code used to identify forward contracted lambs to the packer.
    (xi) Forward contract purchases head count (25). Enter quantity 
of forward contracted lambs in the lot in number of head.
    (xii) Forward contract purchases basis level (26). Enter the 
agreed upon adjustment to a future price to establish the final 
price of the forward contracted lambs in dollars per one hundred 
pounds.
    (xiii) Forward contract purchases delivery month (27). Enter the 
delivery month of the lambs purchased through forward contracts as a 
3-letter abbreviation.
    (4) LS-124--Live Lamb Weekly Report (formula purchases).
    (i) Lot identification (11). Enter code used to identify the lot 
to the packer.
    (ii) Source (12). Enter ``1'', domestic, if lambs are purchased 
within the 50 States or ``2'', imported, if lambs are purchased 
outside of the 50 States.
    (iii) Head count (13). Enter the quantity of lambs in the lot in 
number of head.
    (iv) Total pounds (14). Enter the total quantity of lambs in the 
lot in pounds.
    (v) Weighted average carcass price (15). Enter the average 
weighted average carcass price for the lambs in the lot in dollars 
per hundredweight.
    (vi) Range of prices paid (16a-b). Enter the lowest (16a) and 
the highest (16b) prices paid for the lambs in the lot in dollars 
per hundredweight.
    (vii) Range of premiums and discounts paid (17a-b). Enter the 
lowest (17a) and the highest (17b) premium and discount paid for the 
lot of lambs in dollars per hundredweight. Enter negative values in 
parenthesis.
    (viii) Weighted average of premiums and discounts paid (18). 
Enter the weighted average of the premiums and discounts paid for 
the lot of lambs in dollars per hundredweight. Enter negative values 
in parenthesis.
    (ix) Terms of Trade (19a-c). Enter when applicable else leave 
blank.
    (I) Packer financing (19a). Enter ``1'' (yes) or ``2'' (no) in 
response to: ``Did packer provided financing agreement or 
arrangement with regards to the lambs?'
    (II) Delivery location (19b). Enter ``1'' if delivery terms 
specify producer location, ``2'' if they specify packer's plant 
location.
    (III) Delivery Date (19c). Enter ``1'' if producer sets date of 
delivery for slaughter unilaterally; otherwise enter ``2'' for 
packer.
    (5) LS-125--Lamb Premiums and Discounts Weekly Report.
    (i) Enter the premiums and discounts (in dollars per 
hundredweight) expected to be in effect for the current slaughter 
week for each applicable category of premium and discount (11-32). 
For ``other'' categories (33-37), provide a brief description of the 
basis for the premium/ discount along with the value of the premium/
discount. Enter negative values in parenthesis.
    (6) LS-128--Boxed Lamb Daily Report. For lots comprising 
multiple items, provide information for each item in a separate 
record identified with the same lot identification or purchase order 
number.
    (i) Lot identification or purchase order number (11). Enter code 
used to identify the lot to the packer.
    (ii) Destination/Source (12). Enter ``1'', domestic, for product 
originating within the 50 States or ``2'', imported, for product 
originating from outside of the 50 States.
    (iii) Transaction basis (13). Enter ``1'' for purchased product 
or ``2'' for sold product.
    (iv) Purchase/sale type code (14). Enter the code corresponding 
to the sale type of the lot of boxed lamb.
    (v) Delivery period code (15). Enter the code corresponding to 
the delivery time period of the lot of boxed lamb.
    (vi) Refrigeration (16). Enter ``1'' if the product is sold in a 
fresh condition or ``2'' if the product is sold in a frozen 
condition.
    (vii) Classification code (17). Enter the code corresponding to 
the grade of the boxed lamb, if applicable.
    (viii) Lamb cut (18a-b). Enter the numerical code corresponding 
to the Institutional Meat Purchase Specifications (IMPS) (3 to 4 
characters) (18a) or the internal corporate descriptor used to 
identify the product (18b). Descriptors must be entered consistently 
for all submissions.
    (ix) Weight (19). Enter the code corresponding to the relative 
weight of the product. Where weight is a factor, enter ``1'' to 
signify the lighter weight range, ``2'' to signify the middle weight 
range, or ``3'' to signify the heavier weight range. Where weight is 
not a factor, enter ``4'' to signify all weights or mixed.
    (x) Total product weight (20). Enter the total weight of the 
boxed lamb cut in the lot in pounds.
    (xi) Price (21). Enter the price received for each boxed lamb 
cut in the lot in dollars per one hundred pounds, FOB Plant basis.
    (xii) USDA Certified schedule code (22). Enter the code for the 
USDA Certified Program schedule, if applicable (e.g. CL, etc.); 
otherwise leave blank.
    (xiii) Branded product code (23a-b). Enter the quality grade 
code (23a) and the yield grade code (23b) that best describes the 
brand. Leave blank if not applicable.
    (7) LS-129--Lamb Carcass Report. For lots comprised of distinct 
carcass weight range categories with different prices, provide 
information for each weight range in a separate record identified 
with the same lot identification or purchase order number.
    (i) Lot identification or purchase order number (11). Enter code 
used to identify the lot to the packer.
    (ii) Sale type code (12). Enter the code corresponding to the 
sale type of the lot of carcass lamb.
    (iii) FOB Plant Price (13). Enter the price received for the 
lamb carcasses in dollars per one hundred pounds, FOB Plant basis.

[[Page 75525]]

    (iv) Number of carcasses (14). Enter the total number of lamb 
carcasses in the lot.
    (v) Classification code (15) Enter the corresponding USDA 
quality grade code.
    (vi) Yield grade code (16). Enter the corresponding USDA yield 
grade code.
    (vii) Estimated carcass weight range (17a-b). Enter the lowest 
(17a) and highest (17b) weights (in pounds) which best describes the 
majority of the lamb carcasses in the lot.
    (viii) Delivery period code (18). Enter the code corresponding 
to the time period the lamb carcasses will deliver.

Appendix E--Mandatory Reporting Forms

    The cattle, swine, and lamb mandatory reporting forms follow:
BILLING CODE 3410-02-P

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[FR Doc. 00-29987 Filed 11-28-00; 1:00 pm]
BILLING CODE 3410-02-C


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