75464 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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.

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

john.vandyke@usda.gov.

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

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

75466 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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

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

75468 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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.

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

75470 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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, § 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 § 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

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

§ 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

75472 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 § 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 § 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

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 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 § 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 (§ 57.202(a) of

the proposal and § 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 (§ 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

75474 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 § 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 (§ 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 (§ 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 (§ 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

(§ 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, § 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 § 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 (§ 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 § 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

(§ 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

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

75476 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 voluntarybased market news reports not affected

by mandatory reporting, including

reports covering livestock auction sales,

packer sales of pork cuts and byproducts, 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, packerowned 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 § 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.

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

§ 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 § 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 § 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.

75478 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

Second, AMS has revised the

requirements for the reporting of

imported boxed lamb cuts in § 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-includingfreight) 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 beefexporting nation is required to report

such information. One commenter

expressed the opinion that AMS was

simply confusing § 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

§ 223 of the Act, packers are only

required to report information on boxed

beef sales. Although § 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.

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 75479

Agency Response: Upon further

review of the requirements proposed in

§ 57.103 and § 57.303 of the proposed

rule for reporting sales of branded boxed

beef and lamb, the language in § 59.103

and § 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 § 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 § 221(5) of the Act. For

swine, it is a swine processing plant that

meets the definition in § 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 § 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

75480 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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, § 252

of the Act clearly sets forth what actions

are violations, and § 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 § 57.100 of the

proposal, AMS had added the concept

of ‘priced’ to the definition.

Agency Response: In § 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’

(§ 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

(§ 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

§ 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 § 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 (§ 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 § 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

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

§ 57.101 of the proposed rule and

published in this final rule in § 59.101

under ‘‘type of purchase’’, formula

marketing arrangements and forward

contract transactions are to be reported

75482 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 valueadded 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’’

(§ 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

§ 57.20 of the proposed rule. The

commenters pointed out that this

definition conflicted with the definition

found in § 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

§ 59.30 and has replaced it with a

separate definition for ‘‘swine

committed’’ under § 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

§ 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

§ 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 buyerseller 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 § 212.

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

§ 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 § 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 § 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

§ 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

§ 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 § 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 § 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 § 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 § 57.101(a)(1) and once under

§ 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

§ 57.101(a)(1) of the proposed rule

mirrors the Act and identical language

was used in § 57.301(a)(1) of the

proposed rule for uniformity. AMS has

added a definition for the term

‘established’ under § 59.100 and

§ 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’ (§ 57.100)

and ‘committed’ (§ 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 § 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 § 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 § 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

75484 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 § 57.100 and for

lambs in § 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

§ 59.100 and § 59.300 have been revised.

In § 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

§ 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 § 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 § 59.100 of this final

rule reflects the definition of ‘‘packer

owned cattle’’ in § 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

§ 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

§ 59.30 and has removed the definition

of ‘committed’ under § 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 § 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 § 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 § 57.20 of the proposed

rule.

Agency Response: As previously

discussed in this section, AMS has

clarified the definitions of these terms

in § 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 § 57.102(c)(2) & (6) and

§ 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

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 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 § 59.102(a)(6)

and § 59.302(a)(6) respectively.

Definition of Swine Forward Contract

Summary of Comments: Pertaining to

§ 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 § 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 § 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 § 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 § 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 § 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

§ 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, § 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

§ 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

§ 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

75486 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 § 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 § 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 § 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 § 222(d) of the Act and

§ 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

(§ 59.100). AMS will continue to report

cattle by-products through its voluntary

reporting program.

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 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 § 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 (§ 59.202(b)

& (c)). They are to be included as part

of the prior day swine report as

described in § 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.

75488 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 (§ 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 § 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 § 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.

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

75490 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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, packerowned 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 voluntarybased 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 timeframes 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 § 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 carlotbased 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.

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

75492 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 .................... × $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

Form Reporting

days Responses Totalresponses

Cattle:

LS–113 .............................................................................................................................. 260 × 2 daily = 520

LS–114 .............................................................................................................................. 260 × 2 daily = 520

LS–115 .............................................................................................................................. 52 × 1 weekly = 52

LS–116 .............................................................................................................................. 52 × 1 weekly = 52

LS–117 .............................................................................................................................. 52 × 1 weekly = 52

LS–126 .............................................................................................................................. 260 × 2 daily = 520

Swine:

LS–118 .............................................................................................................................. 260 × 1 daily = 260

LS–119 .............................................................................................................................. 260 × 2 daily = 520

LS–120 .............................................................................................................................. 52 × 1 weekly = 52

Lamb:

Domestic:.

LS–121 .............................................................................................................................. 260 × 1 daily = 260

LS–122 .............................................................................................................................. 260 × 1 daily = 260

LS–123 .............................................................................................................................. 52 × 1 weekly = 52

LS–124 .............................................................................................................................. 52 × 1 weekly = 52

LS–125 .............................................................................................................................. 52 × 1 weekly = 52

LS–128 .............................................................................................................................. 260 × 1 daily = 260

LS–129 .............................................................................................................................. 260 × 1 daily = 260

Importer:.

LS–128 .............................................................................................................................. 52 × 1 weekly = 52

II.—NUMBER OF SUBMISSION HOURS PER RESPONDENT PER YEAR

Form Submissions/

year

Hours/

submission

Total hours/

year

Cattle:

LS–113 .................................................................................................................. 520 × .17 = 88.40

LS–114 .................................................................................................................. 520 × .17 = 88.40

LS–115 .................................................................................................................. 52 × .25 = 13.00

LS–116 .................................................................................................................. 52 × .25 = 13.00

LS–117 .................................................................................................................. 52 × .08 = 4.16

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 75493

II.—NUMBER OF SUBMISSION HOURS PER RESPONDENT PER YEAR—Continued

Form Submissions/

year

Hours/

submission

Total hours/

year

LS–126 .................................................................................................................. 260 × .125 = 65.00

Swine:

LS–118 .................................................................................................................. 260 × .25 = 65.00

LS–119 .................................................................................................................. 260 × .17 = 88.40

LS–120 .................................................................................................................. 52 × .25 = 13.00

Lamb:

Domestic:

LS–121 .................................................................................................................. 260 × .34 = 88.40

LS–122 .................................................................................................................. 260 × .34 = 88.40

LS–123 .................................................................................................................. 52 × .25 = 13.00

LS–124 .................................................................................................................. 52 × .25 = 13.00

LS–125 .................................................................................................................. 52 × .08 = 4.16

LS–128 .................................................................................................................. 260 × .167 = 43.40

LS–129 .................................................................................................................. 260 × .167 = 43.40

Importer:

LS–128 .................................................................................................................. 52 × .084 = 4.37

III.—TOTAL SUBMISSION COST PER RESPONDENT PER YEAR

Form Total hours/

year Cost/hour Total $’s/year

Cattle:

LS–113 .................................................................................................................. 88.40 × $20.00 = $1,768.00

LS–114 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–115 .................................................................................................................. 13.00 × 20.00 = 260.00

LS–116 .................................................................................................................. 13.00 × 20.00 = 260.00

LS–117 .................................................................................................................. 4.16 × 20.00 = 83.20

LS–126 .................................................................................................................. 65.00 × 20.00 = 1,300.00

Totals ................................................................................................................. 271.96 × 20.00 = 5,440.00

Swine:

LS–118 .................................................................................................................. 65.00 × 20.00 = 1,300.00

LS–119 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–120 .................................................................................................................. 13.00 × 20.00 = 260.00

Totals ................................................................................................................. 166.40 × 20.00 = 3,328.00

Lamb:

Domestic:

LS–121 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–122 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–123 .................................................................................................................. 13.00 × 20.00 = 260.00

LS–124 .................................................................................................................. 13.00 × 20.00 = 260.00

LS–125 .................................................................................................................. 4.16 × 20.00 = 83.20

LS–128 .................................................................................................................. 43.40 × 20.00 = 868.00

LS–129 .................................................................................................................. 43.40 × 20.00 = 868.00

5,875.00

Importer:.

LS–128 .................................................................................................................. 4.37 × 20.00 = +87.00

Totals ................................................................................................................. 298.13 × 20.00 = 5,962.00

IV.—TOTAL YEARLY SUBMISSION COST FOR ALL RESPONDENTS

Form Total $’s/year No. of

respondents Total cost*

Cattle:

LS–113 .................................................................................................................. $1,768.00 × 49 = $86,640.00

LS–114 .................................................................................................................. 1,768.00 × 49 = 86,640.00

LS–115 .................................................................................................................. 260.00 × 49 = 12,740.00

LS–116 .................................................................................................................. 260.00 × 49 = 12,740.00

LS–117 .................................................................................................................. 83.20 × 49 = 4,080.00

LS–126 .................................................................................................................. 1,300.000 × 49 = 63,700.00

Totals ................................................................................................................. 5,440.00 × 49 = 266,560.00

75494 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

IV.—TOTAL YEARLY SUBMISSION COST FOR ALL RESPONDENTS—Continued

Form Total $’s/year No. of

respondents Total cost*

Swine:

LS–118 .................................................................................................................. 1,300.00 × 50 = 65,000.00

LS–119 .................................................................................................................. 1,768.00 × 50 = 88,400.00

LS–120 .................................................................................................................. 260.00 × 50 = 13,000.00

Totals ................................................................................................................. 3,328.00 × 50 = 166,400.00

Lamb:

Domestic:

LS–121 .................................................................................................................. 1,768.00 × 8 = 14,140.00

LS–122 .................................................................................................................. 1,768.00 × 8 = 14,140.00

LS–123 .................................................................................................................. 260.00 × 8 = 2,080.00

LS–124 .................................................................................................................. 260.00 × 8 = 2,080.00

LS–125 .................................................................................................................. 83.20 × 8 = 670.00

LS–129 .................................................................................................................. 868.00 × 8 = 6,950.00

5,007.00 × 8 = 40,060.00

LS–128 .................................................................................................................. 868.00 × 9 = +7,810.00

Total ................................................................................................................... 47,870.00

Importer:.

LS–128 .................................................................................................................. 87.00 × 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

respondent

No. of

respondents Total cost*

Cattle:

Initial Startup .............................................................................................................. = $150.00 × 49 = $7,350.00

Recordkeeping ........................................................................................................... = 1,830.00 × 49 = 89,670.00

Data Submission ....................................................................................................... = 5,440.00 × 49 = 266,560.00

363,580.00

Total Cost Per Respondent: 363,580.00/49 .......................................................... = 7,420.00

Swine:

Initial Startup .............................................................................................................. = 150.00 × 50 = 7,500.00

Recordkeeping ........................................................................................................... = 1,830.00 × 50 = 91,500.00

Data Submission ....................................................................................................... = 3,328.00 × 50 = 166,400.00

265,400.00

Total Cost Per Respondent: 265,400.00/50 .......................................................... = 5,308.00

Lamb:

Domestic:

Initial Startup .............................................................................................................. = 150.00 × 9 = 1,350.00

Recordkeeping ........................................................................................................... = 1,830.00 × 9 = 16,470.00

Data Submission ....................................................................................................... = 5,875.00 × 9 = 52,880.00

70,700.00

Importer:.

Initial Startup .............................................................................................................. = 150.00 × 6 = 900.00

Recordkeeping ........................................................................................................... = 1,830.00 × 6 = 10,980.00

Data Submission ....................................................................................................... = 87.00 × 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.

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

Size group Plants Head

1,000

Respondent

cost dollars

Cost per

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

imported

Respondent

cost dollars

Cost per ton

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 × $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

75496 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

specifically preempted by § 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

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

75498 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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

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

75500 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 timeframes set forth in the Act.

Nevertheless, in response to the

comments received in response to the

proposed rule concerning AMS

developing and making available webbased 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 § 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 § 251(d)(3),

the Secretary has established the

following guidelines: Submitted

information will only be published by

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

75502 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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

(§ 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’’ (§ 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,

§ 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

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 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 voluntarybased market news reports not affected

by mandatory reporting, including

reports covering livestock auction sales,

packer sales of pork cuts and byproducts, 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, packerowned 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 § 57.103 and

§ 57.303 of the proposed rule for

reporting sales of branded boxed beef

and lamb, the language in § 59.103 and

§ 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 companyspecific 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

75504 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 cost1 ........... + $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 noncarcass 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.

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

75506 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

Breakdown of Estimated Data Submission Cost Burden

I.—NUMBER OF RESPONSES PER RESPONDENT PER YEAR

Form Reporting

days Responses Totalresponses

Cattle:

LS–113 .............................................................................................................................. 260 × 2 daily = 520

LS–114 .............................................................................................................................. 260 × 2 daily = 520

LS–115 .............................................................................................................................. 52 × 1 weekly = 52

LS–116 .............................................................................................................................. 52 × 1 weekly = 52

LS–117 .............................................................................................................................. 52 × 1 weekly = 52

LS–126 .............................................................................................................................. 260 × 2 daily = 520

Swine:

LS–118 .............................................................................................................................. 260 × 1 daily = 260

LS–119 .............................................................................................................................. 260 × 2 daily = 520

LS–120 .............................................................................................................................. 52 × 1 weekly = 52

Lamb:

Domestic:.

LS–121 .............................................................................................................................. 260 × 1 daily = 260

LS–122 .............................................................................................................................. 260 × 1 daily = 260

LS–123 .............................................................................................................................. 52 × 1 weekly = 52

LS–124 .............................................................................................................................. 52 × 1 weekly = 52

LS–125 .............................................................................................................................. 52 × 1 weekly = 52

LS–128 .............................................................................................................................. 260 × 1 daily = 260

LS–129 .............................................................................................................................. 260 × 1 daily = 260

Importer:

LS–128 .............................................................................................................................. 52 × 1 weekly = 52

II.—NUMBER OF SUBMISSION HOURS PER RESPONDENT PER YEAR

Form Submissions/

year

Hours/

submission

Total hours/

year

Cattle:

LS–113 .............................................................................................. 520 × .17 = 88.40

LS–114 .............................................................................................. 520 × .17 = 88.40

LS–115 .............................................................................................. 52 × .25 = 13.00

LS–116 .............................................................................................. 52 × .25 = 13.00

LS–117 .............................................................................................. 52 × .08 = 4.16

LS–126 .............................................................................................. 260 × .125 = 65.00

Swine:

LS–118 .............................................................................................. 260 × .25 = 65.00

LS–119 .............................................................................................. 260 × .17 = 88.40

LS–120 .............................................................................................. 52 × .25 = 13.00

Lamb:

Domestic:

LS–121 .............................................................................................. 260 × .34 = 88.40

LS–122 .............................................................................................. 260 × .34 = 88.40

LS–123 .............................................................................................. 52 × .25 = 13.00

LS–124 .............................................................................................. 52 × .25 = 13.00

LS–125 .............................................................................................. 52 × .08 = 4.16

LS–128 .............................................................................................. 260 × .167 = 43.40

LS–129 .............................................................................................. 260 × .167 = 43.40

Importer:

LS–128 .............................................................................................. 52 × .084 = 4.37

III.—TOTAL SUBMISSION COST PER RESPONDENT PER YEAR

Form Total hours/

year Cost/hour Total dollars/year

Cattle:

LS–113 .................................................................................................................. 88.40 × $20.00 = $1,768.00

LS–114 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–115 .................................................................................................................. 13.00 × 20.00 = 260.00

LS–116 .................................................................................................................. 13.00 × 20.00 = 260.00

LS–117 .................................................................................................................. 4.16 × 20.00 = 83.20

LS–126 .................................................................................................................. 65.00 × 20.00 = 1,300.00

Totals .......................................................................................................... 271.96 × 20.00 = 5,440.00

Swine:

LS–118 .................................................................................................................. 65.00 × 20.00 = 1,300.00

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 75507

III.—TOTAL SUBMISSION COST PER RESPONDENT PER YEAR—Continued

Form Total hours/

year Cost/hour Total dollars/year

LS–119 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–120 .................................................................................................................. 13.00 × 20.00 = 260.00

Totals .......................................................................................................... 166.40 × 20.00 = 3,328.00

Lamb:

Domestic:

LS–121 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–122 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–123 .................................................................................................................. 13.00 × 20.00 = 260.00

LS–124 .................................................................................................................. 13.00 × 20.00 = 260.00

LS–125 .................................................................................................................. 4.16 × 20.00 = 83.20

LS–128 .................................................................................................................. 43.40 × 20.00 = 868.00

LS–129 .................................................................................................................. 43.40 × 20.00 = 868.00

Total ............................................................................................................ ........................ ........................ 5,875.00

Importer:

LS–128 .................................................................................................................. 4.37 × 20.00 = +87.00

Totals .......................................................................................................... 298.13 × 20.00 = 5,962.00

IV.—TOTAL YEARLY SUBMISSION COST FOR ALL RESPONDENTS

Form Total dollars/

year

Number of

respondents Total cost*

Cattle:

LS–113 .................................................................................................................. $1,768.00 × 49 = $86,640.00

LS–114 .................................................................................................................. 1,768.00 × 49 = 86,640.00

LS–115 .................................................................................................................. 260.00 × 49 = 12,740.00

LS–116 .................................................................................................................. 260.00 × 49 = 12,740.00

LS–117 .................................................................................................................. 83.20 × 49 = 4,080.00

LS–126 .................................................................................................................. 1,300.00 × 49 = 63,700.00

Totals .......................................................................................................... 5,440.00 × 49 = 266,560.00

Swine:

LS–118 .................................................................................................................. 1,300.00 × 50 = 65,000.00

LS–119 .................................................................................................................. 1,768.00 × 50 = 88,400.00

LS–120 .................................................................................................................. 260.00 × 50 = 13,000.00

Totals .......................................................................................................... 3,328.00 × 50 = 166,400.00

Lamb:

Domestic:

LS–121 .................................................................................................................. 1,768.00 × 8 = 14,140.00

LS–122 .................................................................................................................. 1,768.00 × 8 = 14,140.00

LS–123 .................................................................................................................. 260.00 × 8 = 2,080.00

LS–124 .................................................................................................................. 260.00 × 8 = 2,080.00

LS–125 .................................................................................................................. 83.20 × 8 = 670.00

LS–129 .................................................................................................................. 868.00 × 8 = 6,950.00

Total ............................................................................................................ 5,007.00 × 8 = 40,060.00

LS–128 .................................................................................................................. 868.00 × 9 = +7,810.00

Total ............................................................................................................ ........................ ........................ 47,870.00

Importer:

LS–128 .................................................................................................................. 87.00 × 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

75508 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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

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

75510 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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

Form Reporting

days Responses Totalresponses

Cattle:

LS–113 .............................................................................................................................. 260 × 2 daily = 520

LS–114 .............................................................................................................................. 260 × 2 daily = 520

LS–115 .............................................................................................................................. 52 × 1 weekly = 52

LS–116 .............................................................................................................................. 52 × 1 weekly = 52

LS–117 .............................................................................................................................. 52 × 1 weekly = 52

LS–126 .............................................................................................................................. 260 × 2 daily = 520

Swine:

LS–118 .............................................................................................................................. 260 × 1 daily = 260

LS–119 .............................................................................................................................. 260 × 2 daily = 520

LS–120 .............................................................................................................................. 52 × 1 weekly = 52

Lamb:

Domestic:

LS–121 .............................................................................................................................. 260 × 1 daily = 260

LS–122 .............................................................................................................................. 260 × 1 daily = 260

LS–123 .............................................................................................................................. 52 × 1 weekly = 52

LS–124 .............................................................................................................................. 52 × 1 weekly = 52

LS–125 .............................................................................................................................. 52 × 1 weekly = 52

LS–128 .............................................................................................................................. 260 × 1 daily = 260

LS–129 .............................................................................................................................. 260 × 1 daily = 260

Importer:

LS–128 .............................................................................................................................. 52 × 1 weekly = 52

II.—NUMBER OF SUBMISSION HOURS PER RESPONDENT PER YEAR

Form Submissions/

year

Hours/

submission

Total hours/

year

Cattle:

LS–113 .................................................................................................................. 520 × .34 = 176.80

LS–114 .................................................................................................................. 520 × .34 = 176.80

LS–115 .................................................................................................................. 52 × .50 = 26.00

LS–116 .................................................................................................................. 52 × .50 = 26.00

LS–117 .................................................................................................................. 52 × .16 = 8.30

LS–126 .................................................................................................................. 260 × .25 = 130.00

Swine:

LS–118 .................................................................................................................. 260 × .50 = 130.00

LS–119 .................................................................................................................. 260 × .34 = 176.80

LS–120 .................................................................................................................. 52 × .50 = 26.00

Lamb:

Domestic:

LS–121 .................................................................................................................. 260 × .68 = 176.80

LS–122 .................................................................................................................. 260 × .68 = 176.80

LS–123 .................................................................................................................. 52 × .50 = 26.00

LS–124 .................................................................................................................. 52 × .50 = 26.00

LS–125 .................................................................................................................. 52 × .16 = 8.30

LS–128 .................................................................................................................. 260 × .34 = 88.40

LS–129 .................................................................................................................. 260 × .34 = 88.40

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 75511

II.—NUMBER OF SUBMISSION HOURS PER RESPONDENT PER YEAR—Continued

Form Submissions/

year

Hours/

submission

Total hours/

year

Importer:

LS–128 .................................................................................................................. 52 × .16 = 8.30

III.—TOTAL SUBMISSION COST PER RESPONDENT PER YEAR

Form Total hours/

year Cost/hour Total dollars/year

Cattle:

LS–113 .................................................................................................................. 176.80 × $20.00 = $3,536.00

LS–114 .................................................................................................................. 176.80 × 20.00 = 3,536.00

LS–115 .................................................................................................................. 26.00 × 20.00 = 520.00

LS–116 .................................................................................................................. 26.00 × 20.00 = 520.00

LS–117 .................................................................................................................. 8.30 × 20.00 = 166.00

LS–126 .................................................................................................................. 130.00 × 20.00 = 2,600.00

Totals ................................................................................................................. 543.90 × 20.00 = 10,878.00

Swine:

LS–118 .................................................................................................................. 130.00 × 20.00 = 2,600.00

LS–119 .................................................................................................................. 176.80 × 20.00 = 3,536.00

LS–120 .................................................................................................................. 26.00 × 20.00 = 520.00

Totals ................................................................................................................. 332.80 × 20.00 = 6,656.00

Lamb:

Domestic:

LS–121 .................................................................................................................. 176.80 × 20.00 = 3,536.00

LS–122 .................................................................................................................. 176.80 × 20.00 = 3,536.00

LS–123 .................................................................................................................. 26.00 × 20.00 = 520.00

LS–124 .................................................................................................................. 26.00 × 20.00 = 520.00

LS–125 .................................................................................................................. 8.30 × 20.00 = 166.00

LS–128 .................................................................................................................. 88.40 × 20.00 = 1,768.00

LS–129 .................................................................................................................. 88.40 × 20.00 = 11,810.00

Importer:

LS–128 .................................................................................................................. 8.30 × 20.00 = +166.00

Totals ................................................................................................................. 595.80 × 20.00 = 11,916.00

IV.—TOTAL YEARLY SUBMISSION COST FOR ALL RESPONDENTS

Form Total dollars/

year

Number of

respondents Total cost 1

Cattle:

LS–113 .................................................................................................................. $3,536.00 × 49 = $173,260.00

LS–114 .................................................................................................................. 3,536.00 × 49 = 173,260.00

LS–115 .................................................................................................................. 520.00 × 49 = 25,480.00

LS–116 .................................................................................................................. 520.00 × 49 = 25,480.00

LS–117 .................................................................................................................. 166.00 × 49 = 8,130.00

LS–126 .................................................................................................................. 2,600.00 × 49 = 127,400.00

Totals ................................................................................................................. 10,880.00 × 49 = 533,120.00

Swine:

LS–118 .................................................................................................................. 2,600.00 × 50 = 130,000.00

LS–119 .................................................................................................................. 3,536.00 × 50 = 176,800.00

LS–120 .................................................................................................................. 520.00 × 50 = 26,000.00

Totals ................................................................................................................. 6,656.00 × 50 = 332,800.00

Lamb:

Domestic:

LS–121 .................................................................................................................. 3,536.00 × 8 = 28,290.00

LS–122 .................................................................................................................. 3,536.00 × 8 = 28,290.00

LS–123 .................................................................................................................. 520.00 × 8 = 4,160.00

LS–124 .................................................................................................................. 520.00 × 8 = 4,160.00

LS–125 .................................................................................................................. 166.00 × 8 = 1,330.00

75512 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

IV.—TOTAL YEARLY SUBMISSION COST FOR ALL RESPONDENTS—Continued

Form Total dollars/

year

Number of

respondents Total cost 1

LS–129 .................................................................................................................. 1,768.00 × 8 = 14,140.00

10,050.00 × 8 = 80,370.00

LS–128 ........................................................................................................... 1,768.00 × 9 = + 5,910.00

Total ........................................................................................................ 96,280.00

Importer:

LS–128 .................................................................................................................. 166.00 × 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).

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

75514 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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

§ 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.

§ 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.

§ 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

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

§ 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

75516 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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.

§ 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 § 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.

§ 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.

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 75517

§ 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

§ 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

§ 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

§ 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.

75518 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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 ‘‘packersold 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.

§ 59.201 General reporting provisions.

(a) Packer-owned swine. Information

required under this section for packerowned 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.

§ 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 § 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 § 59.10(b):

(1) The packer’s best estimate of the

total number of swine and packerowned 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

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 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 § 59.10(b):

(1) The packer’s best estimate of the

total number of swine and packerowned 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.

§ 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 § 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

§ 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

75520 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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.

§ 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 § 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.

§ 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.

§ 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

§ 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 § 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

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

§ 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.

75522 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

(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 packerowned 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 packerowned 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.

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

75524 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

(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 packerowned 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.

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

75526 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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75528 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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75530 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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75532 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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75534 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 75535

75536 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations 75537

75538 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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75540 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

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75542 Federal Register / Vol. 65, No. 232 / Friday, December 1, 2000 / Rules and Regulations

[FR Doc. 00–29987 Filed 11–28–00; 1:00 pm]

BILLING CODE 3410–02–C