33076 Federal Register / Vol. 77, No. 108 / Tuesday, June 5, 2012 / Rules and Regulations 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 985 

[Doc. No. AMS–FV–11–0088; FV12–985–1 

FR] 

Marketing Order Regulating the 

Handling of Spearmint Oil Produced in 

the Far West; Salable Quantities and 

Allotment Percentages for the 2012– 

2013 Marketing Year 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule establishes the 

quantity of spearmint oil produced in 

the Far West, by class, that handlers 

may purchase from, or handle on behalf 

of, producers during the 2012–2013 

marketing year, which begins on June 1, 

2012. This rule establishes salable 

quantities and allotment percentages for 

Class 1 (Scotch) spearmint oil of 

782,413 pounds and 38 percent, 

respectively, and for Class 3 (Native) 

spearmint oil of 1,162,473 pounds and 

50 percent, respectively. The Spearmint 

Oil Administrative Committee 

(Committee), the agency responsible for 

local administration of the marketing 

order for spearmint oil produced in the 

Far West, recommended these 

limitations for the purpose of avoiding 

extreme fluctuations in supplies and 

prices to help maintain stability in the 

spearmint oil market. 

DATES: Effective Date: This final rule 

becomes effective June 1, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Manuel Michel, Marketing Specialist, or 

Gary Olson, Regional Manager, 

Northwest Marketing Field Office, 

Marketing Order and Agreement 

Division, Fruit and Vegetable Program, 

AMS, USDA; Telephone: (503) 326– 

2724, Fax: (503) 326–7440, or Email: 

Manuel.Michel@ams.usda.gov or 

GaryD.Olson@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Laurel May, 

Marketing Order and Agreement 

Division, Fruit and Vegetable Program, 

AMS, USDA, 1400 Independence 

Avenue SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720– 

2491, Fax: (202) 720–8938, or Email: 

Laurel.May@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This final 

rule is issued under Marketing Order 

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

regulating the handling of spearmint oil 

produced in the Far West (Washington, 

Idaho, Oregon, and designated parts of 

Nevada and Utah), hereinafter referred 

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

under the Agricultural Marketing 

Agreement Act of 1937, as amended (7 

U.S.C. 601–674), hereinafter referred to 

as the ‘‘Act.’’ 

The Department of Agriculture 

(USDA) is issuing this rule in 

conformance with Executive Order 

12866. 

This final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. Under the marketing 

order now in effect, salable quantities 

and allotment percentages may be 

established for classes of spearmint oil 

produced in the Far West. This rule 

establishes the quantity of spearmint oil 

produced in the Far West, by class, 

which handlers may purchase from, or 

handle on behalf of, producers during 

the 2012–2013 marketing year, which 

begins on June 1, 2012. 

The Act provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

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

handler subject to an order may file 

with USDA a petition stating that the 

order, any provision of the order, or any 

obligation imposed in connection with 

the order is not in accordance with law 

and request a modification of the order 

or to be exempted therefrom. A handler 

is afforded the opportunity for a hearing 

on the petition. After the hearing, USDA 

would rule on the petition. The Act 

provides that the district court of the 

United States in any district in which 

the handler is an inhabitant, or has his 

or her principal place of business, has 

jurisdiction to review USDA’s ruling on 

the petition, provided an action is filed 

not later than 20 days after the date of 

the entry of the ruling. 

The Committee meets annually in the 

fall to adopt a marketing policy for the 

ensuing marketing year or years. In 

determining such marketing policy, the 

Committee considers a number of 

factors, including, but not limited to, the 

current and projected supply, estimated 

future demand, production costs, and 

producer prices for all classes of 

spearmint oil, as well as input from 

spearmint oil handlers and producers 

regarding prospective marketing 

conditions. During the meeting, the 

Committee recommends to USDA any 

volume regulations deemed necessary to 

meet market requirements and to 

establish orderly marketing conditions 

for Far West spearmint oil. If the 

Committee’s marketing policy 

considerations indicate a need for 

limiting the quantity of any or all 

classes of spearmint oil marketed, the 

Committee subsequently recommends 

the establishment of a salable quantity 

and allotment percentage for such class 

or classes of oil for the forthcoming 

marketing year. 

The salable quantity represents the 

total amount of each class of spearmint 

oil that handlers may purchase from, or 

handle on behalf of, producers during 

the marketing year. Each producer is 

allotted a prorated share of the salable 

quantity by applying the allotment 

percentage to that producer’s allotment 

base for each applicable class of 

spearmint oil. The producer allotment 

base is each producer’s quantified share 

of the spearmint oil market based on a 

statistical representation of past 

spearmint oil production, with 

accommodation for reasonable and 

normal adjustments to such base as 

prescribed by the Committee and 

approved by USDA. Salable quantities 

are established at levels intended to 

meet market requirements and to 

establish orderly marketing conditions. 

Committee recommendations for 

volume controls are made well in 

advance of the period in which the 

regulations are to be effective, thereby 

allowing producers the chance to adjust 

their production decisions accordingly. 

Pursuant to authority in §§ 985.50, 

985.51, and 985.52 of the order, the full 

eight-member Committee met on 

October 12, 2011, and recommended 

salable quantities and allotment 

percentages for both classes of oil for the 

2012–2013 marketing year. The 

Committee unanimously recommended 

the establishment of a salable quantity 

and allotment percentage for Scotch 

spearmint oil of 782,413 pounds and 38 

percent, respectively. For Native 

spearmint oil, the Committee, in a vote 

of seven members in favor and one 

member opposed, recommended the 

establishment of a salable quantity and 

allotment percentage of 1,162,473 

pounds and 50 percent, respectively. 

The dissenting member favored 

recommending an undetermined higher 

salable quantity and allotment 

percentage for Native spearmint oil. 

This final rule limits the amount of 

spearmint oil that handlers may 

purchase from, or handle on behalf of, 

producers during the 2012–2013 

marketing year, which begins on June 1, 

2012. Salable quantities and allotment 

percentages have been placed into effect 

each season since the order’s inception 

in 1980. 

Class 1 (Scotch) Spearmint Oil 

The U.S. production of Scotch 

spearmint oil is concentrated in the Far 

West, which includes Washington, 

Idaho, Oregon, and a portion of Nevada 

and Utah. Scotch type oil is also 

produced in seven other states: Indiana, 


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Michigan, Minnesota, Montana, North 

Dakota, South Dakota, and Wisconsin. 

Additionally, Scotch spearmint oil is 

produced outside of the U.S., with 

China and India being the largest global 

competitors of domestic Scotch 

spearmint oil production. 

The Far West’s share of total global 

Scotch spearmint oil sales has varied 

considerably over the past several 

decades, from as high as 72 percent in 

1988, and as low as 27 percent in 2002. 

More recently, sales of Far West Scotch 

spearmint oil have been approximately 

49 percent of world sales, and are 

expected to hold steady, or increase 

slightly, in upcoming years. 

Despite the Far West’s growing share 

of the world market for Scotch 

spearmint oil, in recent years the U.S. 

industry has faced challenging 

marketing conditions. From 2004 to 

2007 the Far West spearmint oil 

industry experienced relatively good 

economic conditions, which motivated 

producers to increase their production 

acreage. The Far West region, which 

produced 635,508 pounds of Scotch 

spearmint oil in 2004, gradually 

increased production over a five-year 

period to 1,050,700 pounds in 2009, an 

increase of 65 percent. 

However, as the Far West spearmint 

oil production was increasing, demand 

for spearmint oil started to decline 

significantly due in part to a weakening 

global economy. Sales, which had 

peaked at 1,002,779 pounds in 2005, 

declined to 627,868 pounds in 2009. As 

production rose and sales dropped, 

excess inventory of uncommitted Scotch 

spearmint oil began to accumulate. 

Scotch spearmint oil carry-in (unsold 

salable quantity from prior years that is 

available for sale at the beginning of a 

new marketing year), which serves as a 

measure of oversupply in the market, 

grew from 23,141 pounds in 2007 to 

431,028 pounds in 2010. 

The Committee’s response to the 

deteriorating marketing environment 

after 2008 was to recommend the 

tightening of volume control 

regulations. The Committee, which had 

recommended a Scotch spearmint oil 

salable quantity of 993,067 pounds for 

2008–2009, dropped the 

recommendation to only 566,523 

pounds for the 2010–2011 marketing 

year. Similarly, the recommended 

allotment percentage was reduced from 

50 percent during 2008–2009 to just 28 

percent during the 2010–2011 marketing 

year. 

By 2011, production of Far West 

Scotch spearmint oil had declined to an 

estimated 753,947 pounds and was at 

levels considered more in line with 

demand. Salable carry-in on June 1, 

2011, had also dropped to 227,241 

pounds. 

When the Committee met in October 

2011 to consider volume regulation for 

the 2012–2013 marketing year, the 

outlook for Far West Scotch spearmint 

oil was slightly more optimistic than in 

previous years and an increase in 

salable quantity and allotment 

percentage was recommended. 

Although the spearmint industry 

continues to have some concern over 

the strength of the U.S. economy, there 

have been recent incremental 

improvements in the marketing 

conditions for Scotch spearmint oil. 

Current inventories, steady production, 

and increases in projected demand are 

all positive indicators of improving 

marketing conditions for Scotch 

spearmint oil, and are approaching 

levels considered stable for the industry. 

Certain factors may be contributing to 

the recent increase in demand for Far 

West Scotch spearmint oil. First, 

although China and India have been 

significant suppliers of spearmint oil for 

the past 15 years, they have started to 

replace some spearmint acreage with 

other mint varieties, such as Mentha 

arvensis (wild mint), and other nonmint competing crops. In addition, both 

countries are utilizing more of their 

domestically produced spearmint oil, 

removing oil that might otherwise have 

been exported. Finally, the Midwest 

region of the U.S. is experiencing a 

significant reduction in spearmint 

production. This decrease in regional 

production is partly due to unexpected 

disease and weather related factors and 

partly the result of competition from 

other alternate crops, such as corn and 

soybeans, which are currently 

experiencing higher than average 

returns. 

The Committee estimates that the 

carry-in of Scotch spearmint oil on June 

1, 2012, the primary measure of excess 

supply, will be approximately 161,154 

pounds. This amount is down from the 

previous year’s high of 227,241 pounds 

and is closer to a carry-in quantity that 

the Committee considers to be favorable. 

As previously mentioned, production 

of Scotch spearmint oil has also been 

decreasing and is nearing a level that 

the Committee views as optimum. 

Production has declined from a high of 

1,050,700 pounds in 2009 to 753,947 

pounds in 2011 and is expected to 

remain comparatively the same during 

the 2012 season. The Committee 

considers this trend to be favorable 

because it has contributed relief to the 

industry’s oversupply situation. 

There are also reports that indicate 

consumer demand for mint flavored 

products is steady, providing some 

optimism for long-term increases in the 

demand for Far West spearmint oil. 

Spearmint oil handlers have indicated 

that demand for Scotch spearmint oil 

may be gaining strength. Handlers that 

had projected the 2011–2012 trade 

demand for Far West Scotch Spearmint 

oil to be in the range of 785,000 pounds 

to 1,000,000 pounds now expect it to 

increase to between 800,000 pounds to 

1,100,000 pounds during the 2012–2013 

marketing year. 

However, this projected increase in 

demand, generally thought of as a 

positive indicator for the spearmint oil 

industry, is viewed cautiously by some 

industry participants. Due to the 

inelastic nature of demand for 

spearmint oil, the industry is aware that 

demand remains relatively consistent 

over time. Therefore, some handlers 

suspect that manufacturers of mint 

flavored products are currently 

increasing spearmint oil purchases just 

to rebuild inventories that were 

depleted during the worst of the recent 

U.S. economic recession. As such, those 

handlers believe that at least some of the 

recent increase in Scotch spearmint oil 

sales may not represent an actual 

increase in sustained demand, but 

instead a temporary response to 

fluctuations in the strategic inventories 

of spearmint product manufacturers. 

Given the moderately improving 

economic indicators for the Far West 

Scotch spearmint oil industry outlined 

above, the Committee took a cautiously 

optimistic perspective into the 

discussion of establishing appropriate 

salable quantities and allotment 

percentages for the upcoming season. 

Therefore, at the October 12, 2011, 

meeting, the Committee recommended 

the 2012–2013 Scotch spearmint oil 

salable quantity of 782,413 pounds and 

allotment percentage of 38 percent. The 

Committee utilized sales estimates for 

2012–2013 Scotch spearmint oil, as 

provided by several of the industry’s 

handlers, as well as historical and 

current Scotch spearmint oil production 

and inventory statistics, to arrive at 

these recommendations. The volume 

control levels recommended by the 

Committee represent an increase of 

48,500 pounds and 2 percentage points 

over the previous year’s final salable 

quantity and allotment percentage, 

reflecting a more positive assessment of 

the industry’s economic conditions. 

The Committee estimates that about 

825,000 pounds of Scotch spearmint oil 

may be sold during the 2012–2013 

marketing year. When considered in 

conjunction with the estimated carry-in 

of 161,154 pounds of Scotch spearmint 

oil on June 1, 2012, the recommended 

salable quantity of 782,413 pounds 


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33078 Federal Register / Vol. 77, No. 108 / Tuesday, June 5, 2012 / Rules and Regulations 

results in a total available supply of 

approximately 943,567 pounds of 

Scotch spearmint oil during the 2012– 

2013 marketing year. The Committee 

estimates that carry-in of Scotch 

spearmint oil into the 2013–2014 

marketing year, which begins June 1, 

2013, will be 118,567 pounds, a 

decrease of 42,587 pounds from the 

beginning of the 2012–2013 marketing 

year. 

The Committee’s stated intent in the 

use of marketing order volume control 

regulations for Scotch spearmint oil is to 

keep adequate supplies available to 

meet market needs and establish orderly 

marketing conditions. With that in 

mind, the Committee developed its 

recommendation of Scotch spearmint 

oil salable quantity and allotment 

percentage for the 2012–2013 marketing 

year based on the information discussed 

above, as well as the data outlined 

below. 

(A) Estimated carry-in on June 1, 

2012—161,154 pounds. This figure is 

the difference between the revised 

2011–2012 marketing year total 

available supply of 961,154 pounds and 

the estimated 2011–2012 marketing year 

trade demand of 800,000 pounds. 

(B) Estimated trade demand for the 

2012–2013 marketing year—825,000 

pounds. This figure is based on input 

from producers at six Scotch spearmint 

oil production area meetings held in late 

September and early October 2011, as 

well as estimates provided by handlers 

and other meeting participants at the 

October 12, 2011, meeting. The average 

estimated trade demand provided at the 

six production area meetings is 859,444 

pounds, which is 28,056 pounds less 

than the average of trade demand 

estimates submitted by handlers. The 

average of Far West Scotch spearmint 

oil sales over the last five years is 

743,506 pounds. 

(C) Salable quantity required from the 

2012–2013 marketing year production— 

663,846 pounds. This figure is the 

difference between the estimated 2012– 

2013 marketing year trade demand 

(825,000 pounds) and the expected 

carry-in on June 1, 2012 (161,154 

pounds). This amount represents the 

minimum salable quantity necessary to 

meet the estimated 2012–2013 Scotch 

spearmint oil trade demand. 

(D) Total estimated allotment base for 

the 2012–2013 marketing year— 

2,058,981 pounds. This figure 

represents a one percent increase over 

the revised 2011–2012 total allotment 

base. This figure is generally revised 

each year on June 1 due to producer 

base being lost because of the bona fide 

effort production provisions of 

§ 985.53(e). The revision is usually 

minimal. 

(E) Computed allotment percentage— 

32.2 percent. This percentage is 

computed by dividing the minimum 

required salable quantity (663,846 

pounds) by the total estimated allotment 

base (2,058,981 pounds). 

(F) Recommended allotment 

percentage—38 percent. This is the 

Committee’s recommendation and is 

based on the computed allotment 

percentage (32.2 percent), the average of 

the computed allotment percentage 

figures from the six production area 

meetings (36.2 percent), and input from 

producers and handlers at the October 

12, 2011, meeting. The actual 

recommendation of 38 percent is based 

on the Committee’s determination that 

the computed percentage (32.2 percent) 

may not adequately supply the potential 

2012–2013 Scotch spearmint oil market. 

(G) The Committee’s recommended 

salable quantity—782,413 pounds. This 

figure is the product of the 

recommended allotment percentage (38 

percent) and the total estimated 

allotment base (2,058,981 pounds). 

(H) Estimated available supply for the 

2012–2013 marketing year—943,567 

pounds. This figure is the sum of the 

2012–2013 recommended salable 

quantity (782,413 pounds) and the 

estimated carry-in on June 1, 2012 

(161,154 pounds). 

Class 3 (Native) Spearmint Oil 

The Native spearmint oil industry is 

facing market conditions similar to 

those affecting the Scotch spearmint oil 

market, although not nearly as severe. 

Approximately 90 percent of U.S. 

production of Native spearmint oil is 

produced within the Far West 

production area, thus domestic 

production outside this area is not a 

major factor in the marketing of Far 

West Native spearmint oil. This has 

been an attribute of U.S. production 

since the order’s inception. A minor 

amount of domestic Native spearmint 

oil is produced outside of the Far West 

region in the states of Indiana, 

Michigan, Minnesota, Montana, North 

Dakota, South Dakota, and Wisconsin. 

According to the Committee, very 

little true Native spearmint oil is 

produced outside of the United States. 

However, India has been producing an 

increasing quantity of spearmint oil 

with qualities very similar to Native 

spearmint oil. Committee records show 

that in 1996 the Far West accounted for 

nearly 93 percent of the global sales of 

Native or Native quality spearmint oil. 

By 2008, that share had declined to only 

48 percent. Since then, the percentage 

has been increasing and Far West Native 

spearmint oil was estimated to be over 

70 percent of global sales in 2011. 

Despite the fact that Far West Native 

spearmint oil has been gaining world 

market share, the industry has endured 

challenging marketing conditions over 

the past several years. Overproduction, 

coupled with a decrease in demand, 

created a similar oversupply situation 

for Native spearmint oil as was 

previously discussed for Scotch 

spearmint oil. Production of Native 

spearmint oil in the Far West region was 

701,372 pounds in 2004, but increased 

to 1,453,896 pounds in 2009, an 

increase of 107 percent in just five 

years. 

In addition to oversupply issues 

during this period, demand for Native 

spearmint oil was moving in the 

opposite direction. Sales of Far West 

Native oil peaked in 2004 at 1,249,507 

pounds and then steadily declined over 

the next five years, dropping to just 

976,888 pounds in 2009. As production 

rose and sales dropped, excess 

inventory of uncommitted Native 

spearmint oil began to accumulate. 

Salable carry-in of Native oil measured 

at the beginning of each marketing year, 

which serves as a measure of 

oversupply in the market, increased 

from 83,417 pounds at the beginning of 

the 2007–2008 marketing year to 

343,517 pounds at the beginning of the 

2010–2011 marketing year. 

The Committee’s response to the 

changing marketing conditions of Native 

spearmint oil was similar to its response 

of the Scotch spearmint oil situation. In 

order to achieve more orderly marketing 

conditions and provide the optimal 

level of Native spearmint oil, the 

Committee recommended initial salable 

quantities and allotment percentages at 

the start of each marketing period and 

subsequently reassessed the market to 

determine if intra-seasonal increases 

were necessary. The approach proved 

successful in providing the market with 

adequate levels of Native spearmint oil. 

By 2010, production of Far West 

Native spearmint oil had decreased and 

was more in line with market demand. 

The Committee, which recommended a 

Native spearmint oil salable quantity of 

953,405 pounds in 2010–2011, 

increased the recommendation to 

1,266,161 pounds in the 2011–2012 

marketing period. Similarly, the 

recommended allotment percentage, 

which was 50 percent in 2010–2011, 

increased to 55 percent during the 

2011–2012 marketing period. Salable 

carry-in on June 1, 2011, was estimated 

to be approximately 164,809 pounds. 

When the Committee met on October 

12, 2011, to consider volume regulations 

for the upcoming 2012–2013 marketing 


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year, the general consensus within the 

Native spearmint oil industry was that 

marketing conditions were improving 

marginally in comparison to recent 

years. 

Although the problem of Native 

spearmint oil overproduction has 

improved significantly, this continues to 

be an issue of constant concern for the 

industry. Production of Far West Native 

spearmint oil, which has declined from 

a high of 1,453,896 pounds in 2009 to 

approximately 1,191,707 pounds in 

2011, is expected to remain relatively 

the same, or increase slightly, during the 

2012 season. 

In addition to an improved supply 

situation, demand for Far West Native 

spearmint oil appears to have halted its 

downward movement, and there is even 

some optimism for modest 

improvements in demand during the 

coming year. Spearmint oil handlers, 

who previously projected the 2011– 

2012 trade demand for Far West Native 

spearmint oil in the range of 1,225,000 

pounds to 1,400,000 pounds, have 

projected trade demand for the 2012– 

2013 marketing period to be in the range 

of 1,200,000 pounds to 1,500,000 

pounds. 

However, similar to Scotch spearmint 

oil, the slight increase in projected 

Native spearmint oil demand, generally 

thought of as a positive indicator for the 

industry, is viewed by some handlers 

with caution. As mentioned previously, 

consumer demand for mint flavored 

products is expected to be steady or 

increase slightly moving forward, which 

provides optimism for long-term 

improvement in the demand for Far 

West spearmint oil. Some handlers, 

though, have reported that the 

manufacturers of such products may 

just be temporarily increasing purchases 

of spearmint oil to rebuild inventories 

that were depleted during the worst of 

the current U.S. economic recession. As 

such, the handlers believe that at least 

some of the recent increase in purchases 

does not represent an actual increase in 

sustained demand but, rather, a shortterm response to fluctuations in the 

strategic inventories of the 

manufacturers. 

Given the economic indicators for the 

Far West Native spearmint oil industry 

outlined above, the Committee took a 

cautiously optimistic perspective into 

the discussion of establishing 

appropriate salable quantities and 

allotment percentages for the upcoming 

season. 

As such, at the October 12, 2011, 

meeting, the Committee recommended a 

2012–2013 Native spearmint oil salable 

quantity of 1,162,473 pounds and an 

allotment percentage of 50 percent. The 

Committee utilized Native spearmint oil 

sales estimates for 2012–2013, as 

provided by several of the industry’s 

handlers, as well as historical and 

current Native spearmint oil market 

statistics to establish these thresholds. 

These volume control levels represent a 

103,688 pound and a 5 percentage point 

decrease over the previous year’s final 

salable quantity and allotment 

percentage. However, the Committee 

maintains the option to recommend an 

intra-seasonal increase, as it has done in 

the past two marketing periods, if 

demand rises beyond expectations. 

The Committee estimates that 

approximately 1,300,000 pounds of 

Native spearmint oil may be sold during 

the 2012–2013 marketing year. When 

considered in conjunction with the 

estimated carry-in of 180,970 pounds of 

Native spearmint oil on June 1, 2012, 

the recommended salable quantity of 

1,162,473 pounds results in an 

estimated total available supply of 

1,343,443 pounds of Native spearmint 

oil during the 2012–2013 marketing 

year. Thus, the Committee estimates 

that carry-in of Native spearmint oil at 

the beginning of the 2013–2104 

marketing year will be approximately 

43,443 pounds. 

The Committee’s stated intent in the 

use of marketing order volume control 

regulations for Native spearmint oil is to 

keep adequate supplies available to 

meet market needs and establish orderly 

marketing conditions. With that in 

mind, the Committee developed its 

recommendation of Native spearmint oil 

salable quantity and allotment 

percentage for the 2012–2013 marketing 

year based on the information discussed 

above, as well as the data outlined 

below. 

(A) Estimated carry-in on June 1, 

2012—180,970 pounds. This figure is 

the difference between the revised 

2011–2012 marketing year total 

available supply of 1,430,970 pounds 

and the estimated 2011–2012 marketing 

year trade demand of 1,250,000 pounds. 

(B) Estimated trade demand for the 

2012–2013 marketing year—1,300,000 

pounds. This estimate is established by 

the Committee and is based on input 

from producers at the seven Native 

spearmint oil production area meetings 

held in late September and early 

October 2011, as well as estimates 

provided by handlers and other meeting 

participants at the October 12, 2011, 

meeting. The average estimated trade 

demand provided at the seven 

production area meetings was 1,300,833 

pounds, whereas the handler estimate 

ranged from 1,200,000 pounds to 

1,500,000 pounds. 

(C) Salable quantity required from the 

2012–2013 marketing year production— 

1,119,030 pounds. This figure is the 

difference between the estimated 2012– 

2013 marketing year trade demand 

(1,300,000 pounds) and the expected 

carry-in on June 1, 2012 (180,970 

pounds). This amount represents the 

minimum salable quantity necessary to 

meet the estimated 2012–2013 Native 

spearmint oil trade demand. 

(D) Total estimated allotment base for 

the 2012–2013 marketing year— 

2,324,945 pounds. This figure 

represents a one percent increase over 

the revised 2011–2012 total allotment 

base. This figure is generally revised 

each year on June 1 due to producer 

base being lost because of the bona fide 

effort production provisions of 

§ 985.53(e). The revision is usually 

minimal. 

(E) Computed allotment percentage— 

48.1 percent. This percentage is 

computed by dividing the required 

salable quantity (1,119,030 pounds) by 

the total estimated allotment base 

(2,324,945 pounds). 

(F) Recommended allotment 

percentage—50 percent. This is the 

Committee’s recommendation based on 

the computed allotment percentage 

(48.1 percent), the average of the 

computed allotment percentage figures 

from the seven production area 

meetings (51.3 percent), and input from 

producers and handlers at the October 

12, 2011, meeting. The actual 

recommendation of 50 percent is based 

on the Committee’s determination that 

the computed percentage (48.1 percent) 

may not adequately supply the potential 

2012–2013 Native spearmint oil market. 

(G) The Committee’s recommended 

salable quantity—1,162,473 pounds. 

This figure is the product of the 

recommended allotment percentage (50 

percent) and the total estimated 

allotment base (2,324,945 pounds). 

(H) Estimated available supply for the 

2012–2013 marketing year—1,343,443 

pounds. This figure is the sum of the 

2012–2013 recommended salable 

quantity (1,162,473 pounds) and the 

estimated carry-in on June 1, 2012 

(180,970 pounds). 

The salable quantity is the total 

quantity of each class of spearmint oil 

that handlers may purchase from, or 

handle on behalf of, producers during a 

marketing year. Each producer is 

allotted a share of the salable quantity 

by applying the allotment percentage to 

the producer’s allotment base for the 

applicable class of spearmint oil. 

The Committee’s recommended 

Scotch and Native spearmint oil salable 

quantities and allotment percentages of 

782,413 pounds and 38 percent, and 


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1,162,473 pounds and 50 percent, 

respectively, are based on the goal of 

establishing and maintaining market 

stability. The Committee has 

determined that this goal will be 

achieved by matching the available 

supply to the estimated demand of each 

class of Spearmint oil, thus avoiding 

extreme fluctuations in inventories and 

prices. 

The salable quantities established by 

this rule are not expected to cause a 

shortage of spearmint oil supplies. Any 

unanticipated or additional market 

demand for spearmint oil which may 

develop during the marketing year 

could be satisfied by an intra-seasonal 

increase in the salable quantity. The 

order provides for intra-seasonal 

increases to allow the Committee the 

flexibility to respond quickly to 

changing market conditions. In 

addition, producers who produce more 

than their annual allotments during the 

2012–2013 marketing year may transfer 

such excess spearmint oil to producers 

who have produced less than their 

annual allotment, or, up until November 

1, 2012, place it into the reserve pool to 

be released in the future in accordance 

with market needs. 

This regulation is similar to 

regulations issued in prior seasons. The 

average allotment percentage for the five 

most recent marketing years for Scotch 

spearmint oil is 36.5 percent, while the 

average allotment percentage for the 

same five-year period for Native 

spearmint oil is 49.3 percent. Costs to 

producers and handlers resulting from 

this rule are expected to be offset by the 

benefits derived from a stable market 

and improved returns. In conjunction 

with the issuance of this final rule, 

USDA has reviewed the Committee’s 

marketing policy statement for the 

2012–2013 marketing year. The 

Committee’s marketing policy 

statement, a requirement whenever the 

Committee recommends volume 

regulation, fully meets the intent of 

§ 985.50 of the order. 

During its discussion of potential 

2012–2013 salable quantities and 

allotment percentages, the Committee 

considered: (1) The estimated quantity 

of salable oil of each class held by 

producers and handlers; (2) the 

estimated demand for each class of oil; 

(3) the prospective production of each 

class of oil; (4) the total of allotment 

bases of each class of oil for the current 

marketing year and the estimated total 

of allotment bases of each class for the 

ensuing marketing year; (5) the quantity 

of reserve oil, by class, in storage; (6) 

producer prices of oil, including prices 

for each class of oil; and (7) general 

market conditions for each class of oil, 

including whether the estimated season 

average price to producers is likely to 

exceed parity. Conformity with the 

USDA’s ‘‘Guidelines for Fruit, 

Vegetable, and Specialty Crop 

Marketing Orders’’ has also been 

reviewed and confirmed. 

The salable quantities and allotment 

percentages established by this final 

rule take into consideration the 

projected market needs of the 2012– 

2013 marketing year. In determining 

projected market needs, the Committee 

considered historical sales, as well as 

changes and trends in production and 

demand. This rule also provides 

producers with information on the 

amount of spearmint oil that should be 

produced in the 2012–2013 season in 

order to meet the projected market 

demand. 

Final Regulatory Flexibility Analysis 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA) (5 

U.S.C. 601–612), the Agricultural 

Marketing Service (AMS) has 

considered the economic impact of this 

action on small entities. Accordingly, 

AMS has prepared this final regulatory 

flexibility analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

business subject to such actions in order 

that small businesses will not be unduly 

or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and the rules issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. 

There are eight spearmint oil handlers 

subject to regulation under the order, 

and approximately 32 producers of 

Scotch spearmint oil and approximately 

88 producers of Native spearmint oil in 

the regulated production area. Small 

agricultural service firms are defined by 

the Small Business Administration 

(SBA) (13 CFR 121.201) as those having 

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

and small agricultural producers are 

defined as those having annual receipts 

of less than $750,000. 

Based on the SBA’s definition of 

small entities, the Committee estimates 

that 2 of the 8 handlers regulated by the 

order could be considered small 

entities. Most of the handlers are large 

corporations involved in the 

international trading of essential oils 

and the products of essential oils. In 

addition, the Committee estimates that 

15 of the 32 Scotch spearmint oil 

producers and 26 of the 88 Native 

spearmint oil producers could be 

classified as small entities under the 

SBA definition. Thus, a majority of 

handlers and producers of Far West 

spearmint oil may not be classified as 

small entities. 

The Far West spearmint oil industry 

is characterized by producers whose 

farming operations generally involve 

more than one commodity, and whose 

income from farming operations is not 

exclusively dependent on the 

production of spearmint oil. A typical 

spearmint oil-producing operation has 

enough acreage for rotation such that 

the total acreage required to produce the 

crop is about one-third spearmint and 

two-thirds rotational crops. Thus, the 

typical spearmint oil producer has to 

have considerably more acreage than is 

planted to spearmint during any given 

season. Crop rotation is an essential 

cultural practice in the production of 

spearmint oil for purposes of weed, 

insect, and disease control. To remain 

economically viable with the added 

costs associated with spearmint oil 

production, a majority of spearmint oilproducing farms fall into the SBA 

category of large businesses. 

Small spearmint oil producers 

generally are not as extensively 

diversified as larger ones and as such 

are more at risk from market 

fluctuations. Such small producers 

generally need to market their entire 

annual allotment and do not have the 

luxury of having other crops to cushion 

seasons with poor spearmint oil returns. 

Conversely, large diversified producers 

have the potential to endure one or 

more seasons of poor spearmint oil 

markets because income from alternate 

crops could support the operation for a 

period of time. Being reasonably assured 

of a stable price and market provides 

small producing entities with the ability 

to maintain proper cash flow and to 

meet annual expenses. Thus, the market 

and price stability provided by the order 

potentially benefit small producers 

more than such provisions benefit large 

producers. Even though a majority of 

handlers and producers of spearmint oil 

may not be classified as small entities, 

the volume control feature of this order 

has small entity orientation. 

This final rule establishes the quantity 

of spearmint oil produced in the Far 

West, by class, that handlers may 

purchase from, or handle on behalf of, 

producers during the 2012–2013 

marketing year. The Committee 

recommended this rule to help maintain 

stability in the spearmint oil market by 

matching supply to estimated demand, 

thereby avoiding extreme fluctuations in 

supplies and prices. Establishing 

quantities that may be purchased or 

handled during the marketing year 

through volume regulations allows 

producers to plan their spearmint 


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planting and harvesting to meet 

expected market needs. The provisions 

of §§ 985.50, 985.51, and 985.52 of the 

order authorize this rule. 

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

more likely to originate on the supply 

side than the demand side. Fluctuations 

in yield and acreage planted from 

season-to-season tend to be larger than 

fluctuations in the amount purchased by 

handlers. Notwithstanding the recent 

global recession and the overall negative 

impact on demand for consumer goods 

that utilize spearmint oil, demand for 

spearmint oil tends to change slowly 

from year to year. 

Demand for spearmint oil at the farm 

level is derived from retail demand for 

spearmint-flavored products such as 

chewing gum, toothpaste, and 

mouthwash. The manufacturers of these 

products are by far the largest users of 

mint oil. However, spearmint flavoring 

is generally a very minor component of 

the products in which it is used, so 

changes in the raw product price have 

virtually no impact on retail prices for 

those goods. 

Spearmint oil production tends to be 

cyclical. Years of relatively high 

production, with demand remaining 

reasonably stable, have led to periods in 

which large producer stocks of unsold 

spearmint oil have depressed producer 

prices for a number of years. Shortages 

and high prices may follow in 

subsequent years, as producers respond 

to price signals by cutting back 

production. 

The significant variability of the 

spearmint oil market is illustrated by 

the fact that the coefficient of variation 

(a standard measure of variability; 

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

prices for the period 1980–2010 (when 

the marketing order was in effect) is 

0.17 compared to 0.34 for the decade 

prior to the promulgation of the order 

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

period (1960–79). This provides an 

indication of the price stabilizing 

impact of the marketing order. 

Production in the shortest marketing 

year was about 48 percent of the 31-year 

average (1.89 million pounds from 1980 

through 2010) and the largest crop was 

approximately 163 percent of the 31- 

year average. A key consequence is that, 

in years of oversupply and low prices, 

the season average producer price of 

spearmint oil is below the average cost 

of production (as measured by the 

Washington State University 

Cooperative Extension Service.) 

The wide fluctuations in supply and 

prices that result from this cycle, which 

was even more pronounced before the 

creation of the order, can create 

liquidity problems for some producers. 

The order was designed to reduce the 

price impacts of the cyclical swings in 

production. However, producers have 

been less able to weather these cycles in 

recent years because of the increase in 

production costs. While prices have 

been relatively steady, the cost of 

production has increased to the extent 

that plans to plant spearmint may be 

postponed or changed indefinitely. 

Producers are also enticed by the prices 

of alternative crops and their lower cost 

of production. 

In an effort to stabilize prices, the 

spearmint oil industry uses the volume 

control mechanisms authorized under 

the order. This authority allows the 

Committee to recommend a salable 

quantity and allotment percentage for 

each class of oil for the upcoming 

marketing year. The salable quantity for 

each class of oil is the total volume of 

oil that producers may sell during the 

marketing year. The allotment 

percentage for each class of spearmint 

oil is derived by dividing the salable 

quantity by the total allotment base. 

Each producer is then issued an 

annual allotment certificate, in pounds, 

for the applicable class of oil, which is 

calculated by multiplying the 

producer’s allotment base by the 

applicable allotment percentage. This is 

the amount of oil of each applicable 

class that the producer can sell. 

By November 1 of each year, the 

Committee identifies any oil that 

individual producers have produced 

above the volume specified on their 

annual allotment certificates. This 

excess oil is placed in a reserve pool 

administered by the Committee. 

There is a reserve pool for each class 

of oil that may not be sold during the 

current marketing year unless USDA 

approves a Committee recommendation 

to increase the salable quantity and 

allotment percentage for a class of oil 

and make a portion of the pool 

available. However, limited quantities of 

reserve oil are typically sold by one 

producer to another producer to fill 

deficiencies. A deficiency occurs when 

on-farm production is less than a 

producer’s allotment. In that case, a 

producer’s own reserve oil can be sold 

to fill that deficiency. Excess production 

(higher than the producer’s allotment) 

can be sold to fill other producers’ 

deficiencies. All of these provisions 

need to be exercised prior to November 

1 of each year. 

In any given year, the total available 

supply of spearmint oil is composed of 

current production plus carryover 

stocks from the previous crop. The 

Committee seeks to maintain market 

stability by balancing supply and 

demand, and to close the marketing year 

with an appropriate level of carryout. If 

the industry has production in excess of 

the salable quantity, then the reserve 

pool absorbs the surplus quantity of 

spearmint oil, which goes unsold during 

that year, unless the oil is needed for 

unanticipated sales. 

Under its provisions, the order may 

attempt to stabilize prices by (1) limiting 

supply and establishing reserves in high 

production years, thus minimizing the 

price-depressing effect that excess 

producer stocks have on unsold 

spearmint oil, and (2) ensuring that 

stocks are available in short supply 

years when prices would otherwise 

increase dramatically. The reserve pool 

stocks, which are increased in large 

production years, are drawn down in 

years where the crop is short. 

An econometric model was used to 

assess the impact that volume control 

has on the prices producers receive for 

their commodity. Without volume 

control, spearmint oil markets would 

likely be over-supplied. This could 

result in low producer prices and a large 

volume of oil stored and carried over to 

the next crop year. The model estimates 

how much lower producer prices would 

likely be in the absence of volume 

controls. 

The Committee estimated trade 

demand for the 2012–2013 marketing 

year for both classes of oil at 2,125,000 

pounds, and that the expected 

combined carry-in will be 342,124 

pounds. This results in a combined 

required salable quantity of 1,782,876 

pounds. With volume control, sales by 

producers for the 2012–2013 marketing 

year will be limited to 1,944,886 pounds 

(the salable quantity for both classes of 

spearmint oil). 

The allotment percentages, upon 

which 2012–2013 producer allotments 

are based, are 38 percent for Scotch and 

50 percent for Native. Without volume 

controls, producers would not be 

limited to these allotment levels, and 

could produce and sell additional 

spearmint. The econometric model 

estimated a $1.19 decline in the season 

average producer price per pound (from 

both classes of spearmint oil) resulting 

from the higher quantities that would be 

produced and marketed without volume 

control. The surplus situation for the 

spearmint oil market that would exist 

without volume controls in 2012–2013 

also would likely dampen prospects for 

improved producer prices in future 

years because of the buildup in stocks. 

The use of volume controls allows the 

industry to fully supply spearmint oil 

markets while avoiding the negative 

consequences of over-supplying these 

markets. The use of volume controls is 


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believed to have little or no effect on 

consumer prices of products containing 

spearmint oil and will not result in 

fewer retail sales of such products. 

The Committee discussed alternatives 

to the recommendations contained in 

this rule for both classes of spearmint 

oil. The Committee discussed and 

rejected the idea of recommending that 

there not be any volume regulation for 

both classes of spearmint oil because of 

the severe price-depressing effects that 

may occur without volume control. 

After computing the initial 32.2 

percent Scotch spearmint oil allotment 

percentage, the Committee considered 

various alternative levels of volume 

control for Scotch spearmint oil. Given 

the moderately improving marketing 

conditions, there was consensus that the 

allotment percentage for 2012–2013 

should be more than the percentage 

established for the 2011–2012 marketing 

year (36 percent). After considerable 

discussion, the eight-member committee 

unanimously determined that a salable 

quantity of 782,413 pounds and an 

allotment percentage of 38 percent 

would be the most effective for the 

2012–2013 marketing year. 

The Committee also reached a 

consensus regarding the level of volume 

control for Native spearmint oil. After 

first determining the computed 

allotment percentage at 48.1 percent, the 

Committee, in a vote of seven members 

in favor and one member opposed, 

recommended a salable quantity of 

1,162,473 pounds and an allotment 

percentage of 50 percent for the 2012– 

2013 marketing year. The dissenting 

member favored recommending an 

undetermined higher salable quantity 

and allotment percentage for Native 

spearmint oil. 

As noted earlier, the Committee’s 

recommendation to establish salable 

quantities and allotment percentages for 

both classes of spearmint oil was made 

after careful consideration of all 

available information, including: (1) The 

estimated quantity of salable oil of each 

class held by producers and handlers; 

(2) the estimated demand for each class 

of oil; (3) the prospective production of 

each class of oil; (4) the total of 

allotment bases of each class of oil for 

the current marketing year and the 

estimated total of allotment bases of 

each class for the ensuing marketing 

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

class, in storage; (6) producer prices of 

oil, including prices for each class of oil; 

and (7) general market conditions for 

each class of oil, including whether the 

estimated season average price to 

producers is likely to exceed parity. 

Based on its review, the Committee 

determined that the salable quantity and 

allotment percentage levels 

recommended will achieve the 

objectives sought. 

Without any regulations in effect, the 

Committee believes the industry could 

return to the pronounced cyclical price 

patterns that occurred prior to the order, 

and that prices in 2012–2013 could 

decline substantially below current 

levels. 

According to the Committee, the 

established salable quantities and 

allotment percentages are expected to 

facilitate the goal of establishing orderly 

marketing conditions for Far West 

spearmint oil. 

As previously stated, annual salable 

quantities and allotment percentages 

have been issued for both classes of 

spearmint oil since the order’s 

inception. 

In accordance with the Paperwork 

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

Chapter 35), the order’s information 

collection requirements have been 

previously approved by the Office of 

Management and Budget (OMB) and 

assigned OMB No. 0581–0178, 

Vegetable and Specialty Crops. No 

changes in those requirements as a 

result of this action are necessary. 

Should any changes become necessary, 

they will be submitted to OMB for 

approval. 

This final rule establishes the salable 

quantities and allotment percentages of 

Class 1 (Scotch) spearmint oil and Class 

3 (Native) spearmint oil produced in the 

Far West during the 2012–2013 

marketing year. Accordingly, this action 

will not impose any additional reporting 

or recordkeeping requirements on either 

small or large spearmint oil producers 

or handlers. As with all Federal 

marketing order programs, reports and 

forms are periodically reviewed to 

reduce information requirements and 

duplication by industry and public 

sector agencies. Furthermore, USDA has 

not identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this final rule. 

AMS is committed to complying with 

the E–Government Act, to promote the 

use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

In addition, the Committee’s meeting 

was widely publicized throughout the 

spearmint oil industry and all interested 

persons were invited to attend the 

meeting and participate in Committee 

deliberations on all issues. Like all 

Committee meetings, the October 12, 

2011, meeting was a public meeting and 

all entities, both large and small, were 

able to express views on this issue. 

A proposed rule concerning this 

action was published in the Federal 

Register on March 5, 2012 (77 FR 

13019). A copy of the rule was provided 

to Committee staff, who in turn made it 

available to all Far West spearmint oil 

producers, handlers, and interested 

persons. Finally, the rule was made 

available through the Internet by USDA 

and the Office of the Federal Register. A 

30-day comment period ending April 4, 

2012, was provided to allow interested 

persons to respond to the proposal. No 

comments were received. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

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

MarketingOrdersSmallBusinessGuide. 

Any questions about the compliance 

guide should be sent to Laurel May at 

the previously mentioned address in the 

FOR FURTHER INFORMATION CONTACT

section. 

After consideration of all relevant 

matter presented, including the 

information and recommendation 

submitted by the Committee and other 

available information, it is hereby found 

that this rule, as hereinafter set forth, 

will tend to effectuate the declared 

policy of the Act. 

It is further found that good cause 

exists for not postponing the effective 

date of this rule until 30 days after 

publication in the Federal Register (5 

U.S.C. 553) because the 2012–2013 

marketing year starts on June 1, 2012, 

and handlers will need to begin 

purchasing the spearmint oil allotted 

under this rulemaking. Further, 

handlers are aware of this rule, which 

was recommended at a public meeting. 

Finally, a 30-day comment period was 

provided for in the proposed rule. 

List of Subjects in 7 CFR Part 985 

Marketing agreements, Oils and fats, 

Reporting and recordkeeping 

requirements, Spearmint oil. 

For the reasons set forth in the 

preamble, 7 CFR Part 985 is amended as 

follows: 

PART 985—MARKETING ORDER 

REGULATING THE HANDLING OF 

SPEARMINT OIL PRODUCED IN THE 

FAR WEST 

■ 1. The authority citation for 7 CFR 

Part 985 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. A new § 985.231 is added to read 

as follows: 

[Note: This section will not appear in 

the Code of Federal Regulations.] 


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Federal Register / Vol. 77, No. 108 / Tuesday, June 5, 2012 / Rules and Regulations 33083 

§ 985.231 Salable quantities and allotment 

percentages—2012–2013 marketing year. 

The salable quantity and allotment 

percentage for each class of spearmint 

oil during the marketing year beginning 

on June 1, 2012, shall be as follows: 

(a) Class 1 (Scotch) oil—a salable 

quantity of 782,413 pounds and an 

allotment percentage of 38 percent. 

(b) Class 3 (Native) oil—a salable 

quantity of 1,162,473 pounds and an 

allotment percentage of 50 percent. 

Dated: May 30, 2012. 

Ruihong Guo, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2012–13522 Filed 6–4–12; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2012–0578; Directorate 

Identifier 2012–CE–019–AD; Amendment 

39–17071; AD 2012–11–08] 

RIN 2120–AA64 

Airworthiness Directives; WACO 

Classic Aircraft Corporation Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; request for 

comments. 

SUMMARY: We are adopting a new 

airworthiness directive (AD) for certain 

WACO Classic Aircraft Corporation 

Models 2T–1A, 2T–1A–1, and 2T–1A–2 

airplanes. This AD requires inspection 

of the front and rear horizontal stabilizer 

spar assemblies with replacement of 

parts as necessary. This AD was 

prompted by cracking of the horizontal 

stabilizer spars, which could lead to 

failure of the horizontal spars with 

consequent loss of control. We are 

issuing this AD to correct the unsafe 

condition on these products. 

DATES: This AD is effective June 20, 

2012. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in the AD 

as of June 20, 2012. 

We must receive comments on this 

AD by July 20, 2012. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: 202–493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue SE., Washington, DC 20590. 

• Hand Delivery: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue SE., Washington, DC 20590, 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

For service information identified in 

this AD, contact WACO Classic Aircraft 

Corporation; 15955 South Airport Rd., 

Battle Creek, Michigan 49015; 

telephone: (269) 565–1000; fax: (269) 

565–1100; email: 

flywaco@wacoclassic.com; Internet: 

http://www.wacoaircraft.com/greatlakes-support/. You may review copies 

of the referenced service information at 

the FAA Small Airplane Directorate, 

901 Locust, Kansas City, Missouri 

64106. For information on the 

availability of this material at the FAA, 

call (816) 329–4148. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Management Facility between 

9 a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. The AD 

docket contains this AD, the regulatory 

evaluation, any comments received, and 

other information. The street address for 

the Docket Office (phone: 800–647– 

5527) is in the ADDRESSES section. 

Comments will be available in the AD 

docket shortly after receipt. 

FOR FURTHER INFORMATION CONTACT: 

Steven J. Rosenfeld, Aerospace 

Engineer, Chicago Aircraft Certification 

Office (ACO), FAA, 2300 East Devon 

Avenue, Room 107, Des Plaines, Illinois 

60018; phone: (847) 294–7030; fax: (847) 

294–7834; email: 

steven.rosenfeld@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Discussion 

In the last two years, there have been 

three incidents of horizontal stabilizer 

failure on WACO Classic Aircraft 

Corporation Models 2T–1A, 2T–1A–1, 

and 2T–1A–2 airplanes. Cracks 

originated from around the 

circumference of the right stabilizer 

front spar and, in one incident, the 

stabilizer separated from the aircraft. 

This condition, if not corrected, could 

result in failure of the horizontal 

stabilizer spars with consequent loss of 

control. 

Relevant Service Information 

We reviewed WACO Classic Aircraft 

Corporation, Great Lakes Aircraft, 

Service Bulletin No. SB–GL12–01R, 

Revision IR, dated January 25, 2012. The 

service information describes 

procedures for inspecting the front and 

rear horizontal stabilizer spar 

assemblies with replacement as 

necessary. 

FAA’s Determination 

We are issuing this AD because we 

evaluated all the relevant information 

and determined the unsafe condition 

described previously is likely to exist or 

develop in other products of the same 

type design. 

AD Requirements 

This AD requires inspecting the front 

and rear horizontal stabilizer spar 

assemblies with replacement of parts as 

necessary. The AD also requires sending 

the initial inspection results to the 

Chicago ACO. 

Interim Action 

We consider this AD interim action. 

After evaluating the inspection results, 

we may take further AD action. 

FAA’s Justification and Determination 

of the Effective Date 

An unsafe condition exists that 

requires the immediate adoption of this 

AD. The FAA has found that the risk to 

the flying public justifies waiving notice 

and comment prior to adoption of this 

rule because failure of the horizontal 

stabilizer spars could result in loss of 

control. Therefore, we find that notice 

and opportunity for prior public 

comment are impracticable and that 

good cause exists for making this 

amendment effective in less than 

30 days. 

Comments Invited 

This AD is a final rule that involves 

requirements affecting flight safety and 

was not preceded by notice and an 

opportunity for public comment. 

However, we invite you to send any 

written data, views, or arguments about 

this AD. Send your comments to an 

address listed under the ADDRESSES

section. Include the docket number 

FAA–2012–0578 and Directorate 

Identifier 2012–CE–019–AD at the 

beginning of your comments. We 

specifically invite comments on the 

overall regulatory, economic, 

environmental, and energy aspects of 

this AD. We will consider all comments 

received by the closing date and may 

amend this AD because of those 

comments. 


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