```

[Federal Register Volume 90, Number 10 (Thursday, January 16, 2025)]
[Rules and Regulations]
[Pages 4585-4587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00760]

========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

========================================================================


Federal Register / Vol. 90, No. 10 / Thursday, January 16, 2025 / 
Rules and Regulations

[[Page 4585]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 58

[Doc. No. AMS-DA-22-0064]
RIN 0581-AE20

Plant Records To Include Grade Label Butterfat Testing

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule adopts amendments to the plant records 
requirement for the Agricultural Marketing Service (AMS) Dairy Grading 
and Inspection Program. The amendments allow butterfat tests to be 
performed at an in-house or approved third party laboratory and add a 
requirement for plants to maintain and make such records available for 
examination by a United States Department of Agriculture (USDA) 
inspector. These amendments increase efficiency by conforming to 
current industry practice.

DATES: This final rule is effective February 18, 2025.

FOR FURTHER INFORMATION CONTACT: Whitney Rick, Grading and 
Standardization Division, Dairy Program, Agricultural Marketing 
Service, U.S. Department of Agriculture, Room 2530-South Building Mail 
Stop 0225, 1400 Independence Avenue SW, Washington, DC 20250-0230: 
Telephone: (202) 236-8241; Email: [email protected].

SUPPLEMENTARY INFORMATION: The Secretary of Agriculture is authorized 
by the Agricultural Marketing Act (AMA) of 1946, as amended (7 U.S.C. 
1621, et seq.), to provide voluntary Federal dairy inspection and 
grading services that enables consumers to purchase high quality dairy 
products and facilitates orderly marketing. Plants participating in the 
voluntary, fee-based AMS Dairy Grading and Inspection Program process 
milk into dairy foods that enter commerce as retail products, 
ingredients for further processing, purchases for Federal food 
assistance programs, and exports to other countries. Services provided 
by the program enhance the marketability and add value to dairy 
products and foods that contain dairy. Dairy products manufactured in 
plants complying with the USDA inspection requirements are eligible to 
be graded against official quality standards and specifications 
established by AMS. Dairy products tested and graded by AMS have 
certificates issued describing the product's quality and condition.
    When the Grading and Inspection Program was implemented, the 
quality of butter was inconsistent, and quality-control testing by USDA 
was necessary to ensure a consistent product for the market. Today, 
plants more consistently manufacture high-quality butter products and 
maintain the butterfat standard necessary to be granted a USDA grade 
label for butter.
    Currently, USDA inspectors or designated plant personnel perform 
tests of butter samples that have been selected by a USDA inspector for 
quality control on randomized batches of finished product pursuant to 7 
CFR 58.338. Testing frequency varies by the volume of butter processed 
and whether a batch is randomly selected. Typically, USDA conducts 
monthly or weekly testing depending on the volume of butter processed. 
It is also current industry practice for plants to perform routine 
internal tests on their butter products to ensure quality and 
compliance with composition standards. Specific requirements for these 
tests are outlined in 7 CFR 58.336.
    During manufacturing it is normal to have fluctuations in butterfat 
composition at different stages in butter making and, consequently, 
test results may not be consistent throughout the process. Therefore, 
butter processing plants continually monitor butterfat composition 
throughout production and make necessary adjustments to maintain the 80 
percent butterfat required for butter (7 CFR 58.305). The plant 
maintains these monitoring records as part of its internal quality 
program and testing procedures.
    Under the current Dairy Grading and Inspection Program, USDA 
conducts a single butterfat test at the time of grading, which provides 
a limited perspective on overall butterfat composition of butter 
manufactured by the plant.
    The amendments will provide plants an alternative to butterfat 
testing administered by a USDA inspector and allow in-plant quality 
control testing to satisfy butterfat testing requirements. This final 
rule authorizes a review of a plant's testing records performed by AMS 
as an alternative to testing performed by a USDA inspector at the time 
of grading. A records review of a plant's routine testing rather than a 
single-point test provides a more accurate picture of whether the 
plant's butter products meet quality standards. It also reduces costs 
to a plant by providing an alternative to duplicate butterfat testing 
by a USDA inspector. As explained in the Regulatory Flexibility 
Analysis below, AMS estimates authorizing an alternative records review 
option will save participating plants $4,560 to $31,560 annually.
    Currently, the final butter product must contain a minimum of 80 
percent butterfat by weight for it to comply with the regulations. That 
requirement will not change as a result of this final rule. However, 
pursuant to this rule, AMS will annually review each plant's butterfat 
test records to gauge the plant's compliance with the regulations. 
Butterfat tests are already conducted as a normal, standard business 
operating procedure by plants that manufacture butter. If a records 
review reveals a plant is out of compliance, AMS will perform more 
frequent reviews to determine what preventative and corrective actions 
are being taken. As described below, failure to rectify the problem 
over multiple consecutive reviews may result in ineligibility to use 
the USDA Grade Label shield on products produced by the plant.
    Records inspected include plant records of butterfat tests 
performed as required under 7 CFR 58.336, and analysis of records. The 
change to the recordkeeping requirements applies to records kept in the 
regular course of business by the plant. As records will be reviewed 
on-site by USDA inspectors, plants will not be required to submit 
information to the agency.
    A proposed rule was published in the Federal Register on August 15, 
2023 (88 FR 55426). Copies of the proposed rule

[[Page 4586]]

were made available through the internet by the USDA and the Office of 
the Federal Register. The rule provided a 60-day comment period which 
ended October 16, 2023. Seven comments were received. Four of the 
comments supported the proposed changes. The comments in support of the 
rule noted the change will continue to promote high quality products 
and will lower the cost to manufacturers, which will result in savings 
to the consumer.
    Of the four supportive comments, the American Butter Institute 
(ABI) requested clarification on four items related to this rulemaking. 
First, ABI asked which tests will be reviewed. The tests reviewed must 
be sufficient to evaluate the plant's process to control quality and 
adjust butterfat composition during manufacturing and ensure final 
butterfat composition meets the 80 percent requirement. Tests may 
include but are not limited to Kohman method or inline and benchtop 
infrared analysis.
    Second, ABI sought clarification on which records will be reviewed. 
Records reviewed will vary by plant depending on which records are kept 
by the individual plant in the normal course of business. Records 
reviewed may include the plant's sample selection process, butterfat 
testing methods, quality control of butterfat composition during 
manufacturing, final butterfat results, management of out of 
specification product, and training documentation. Review of records 
will be on an annual basis.
    Third, ABI sought clarification on accepted butterfat testing 
methodologies. Acceptable testing methodologies include those that are 
intended for the analysis of butterfat composition in butter. Testing 
equipment may be calibrated using the Kohman or modified Kohman as a 
reference testing method. Additional validated methodologies available 
in the future may be considered provided the purpose of the test is for 
the analysis of butterfat composition.
    Fourth, ABI requested clarification on compliance and enforcement. 
If during a normal review of records, a plant is found to have test 
records demonstrating the plant's butter products did not meet 
composition requirements, USDA will review additional documentation. 
Such additional documentation will include the plant's policy to 
maintain butterfat composition, corrective actions taken after product 
was found to not meet the 80 percent requirement, and training and/or 
preventative measures taken to reduce the occurrence of butter products 
not meeting composition requirements.
    If a plant fails to take corrective action as instructed by USDA 
over the course of three consecutive reviews, or releases product not 
meeting the composition requirement on three occasions, USDA may notify 
the plant to discontinue use of the butter shield.
    Two commenters opposing the proposed rule expressed concern that 
allowing plants to forego a USDA inspection in favor of a records 
review of an in-house or third-party testing regime could jeopardize 
quality for consumers. An additional commenter expressed the change 
would impact the value of the `Made in Wisconsin' butter symbol because 
of what the commentor viewed as less regulatory oversight. The rule 
does not lessen USDA's oversight of plants to ensure adherence to the 
regulations and the quality standards set by USDA. USDA will conduct a 
review of each butter manufacturing plant's quality production records 
to verify the butterfat testing program meets regulatory requirements. 
Additionally, third-party industry laboratory test experts routinely 
audit and validate non-USDA-laboratory test procedures. The review of 
records provided by this rule offers USDA a more thorough view of the 
composition of a plant's butter products over time, rather than a 
single point in time test, to ensure product is meeting the required 
butterfat composition standard.
    AMS is making no changes to the proposed rule based on these 
comments.
    Finally, this final rule corrects a misspelling in the regulations. 
A revision to Sec.  58.336(a) replaces the word ``insure'' with 
``ensure.'' ABI commented that the correction should also be made to 
the new Sec.  58.336(b). AMS agrees and is making the corresponding 
change.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 
U.S.C. chapter 35), AMS requested approval of new information 
collection and recordkeeping requirements for the AMS Dairy Grading and 
Inspection Program and comments were invited on this new information 
collection. AMS received no public comments on the Office of Management 
and Budget (OMB)-approved information collection portion of the final 
rule.
    Title: Regulations Governing the Review of Butterfat Testing 
Records for the Dairy Grading and Inspection Butter Program.
    OMB Number: 0581-0340.
    Expiration Date of Approval: This is a NEW collection.
    Type of Request: Approval of New Information Collection.
    Abstract: The Dairy Grading and Inspection Program is a voluntary, 
fee-based program authorized under the Agricultural Marketing Act (AMA) 
of 1946 (7 U.S.C. 1621-1627). The regulations governing inspection and 
grading services of manufactured or processed dairy products are 
contained in 7 CFR part 58. Under the program, a plant can submit to 
grading and inspection of its butter products by a USDA grader 
following the U.S. Grade Standards to ensure each product meet the U.S. 
grade requirements. This program provides uniform quality of dairy 
products in the marketplace. The information collection requirements in 
this request are essential to carry out the intent of the AMA--to 
ensure that dairy products are produced under sanitary conditions and 
buyers are purchasing a quality product.
    Estimate of Burden: Public recordkeeping burden for this collection 
of information is estimated to average 2.5 hours per year.
    Recordkeepers: Butter manufacturers.
    Estimated Number of Recordkeepers: 17.
    Estimated Number of Hours per Recordkeeper: 2.5 hours.
    Estimated Total Annual Burden on Recordkeepers: 42.5 hours.
    Comments: No comments were received on the information collection 
in the proposed rule.
    The information collection adds an annual review of a plant's 
butterfat testing records as an alternative to testing by USDA 
inspectors. The review encompasses plant records of butterfat tests 
performed as required under 7 CFR 58.336, and analysis of records. 
Plants seeking USDA inspection for butter grading conduct their own 
routine, audited, butterfat tests to ensure quality and compliance with 
composition standards. The information sought in this collection is 
contained in records kept in the regular course of business by the 
inspected plant. Records will be reviewed on-site by a USDA inspector. 
The plant will not be required to submit information to the agency.

E-Government Act

    USDA is committed to complying with the E-Government Act (44 U.S.C. 
3601, et seq.) by promoting 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.

Executive Orders 12866 and 13563

    USDA is issuing this rule in conformance with Executive Orders 
12866 and 13563, which direct agencies

[[Page 4587]]

to assess all costs and benefits of available regulatory alternatives 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health, and safety effects; distributive impacts; and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, reducing costs, harmonizing rules, and promoting 
flexibility. This rule has been determined to be not significant for 
purposes of Executive Order 12866; and therefore, has not been reviewed 
by the Office of Management and Budget (OMB).

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have a retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies unless they present an irreconcilable conflict with this rule.

Regulatory Flexibility Analysis

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (5 U.S.C. 601-612), AMS has considered the economic 
impact of the action on small entities. Accordingly, AMS has prepared 
this Regulatory Flexibility Analysis (RFA).
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
unduly or disproportionately burdened. The Small Business 
Administration's definition (13 CFR 121.201) of small agricultural 
service firms, which includes dairy processors, varies based on the 
type of dairy product manufactured. Small butter manufacturers 
processors are defined as having 750 or fewer employees. Seventeen (17) 
plants producing grade label butter in the U.S. participate in the 
Grade Label Program. According to AMS calculations, about twelve (12), 
or approximately two-thirds, are operated by dairy farmer cooperatives, 
while the remaining five (5) are independently owned. AMS estimates 
that six (6) of the seventeen (17) participating butter processors 
would be considered small businesses.
    AMS has determined that establishment of this proposal will not 
have a significant economic impact on small entities. The Dairy Program 
Grading and Inspection Program is a voluntary program. Small businesses 
have the option to participate. The change will not unduly or 
disproportionately burden small butter processing entities. It will 
reduce costs to small businesses by providing an alternative to a 
redundant butterfat test currently performed by USDA. AMS expects most 
or all plants to choose a review of records. AMS estimates the cost to 
plants for meeting USDA butterfat testing requirements ranges from 
$5,000 to $32,000 annually. The significant cost difference depends on 
whether the plant has an approved onsite laboratory or must ship 
samples to an outside AMS laboratory, and the frequency of butterfat 
samples submitted for testing.
    The change will add a review of records of butterfat tests that 
manufacturers currently conduct in the normal course of business to 
ensure quality and compliance with composition standards as an 
alternative to a USDA-inspector test. The plants will be charged for 
the inspectors' time to conduct the records review, estimated to take 
four hours annually. At an hourly rate of $110, a records review will 
cost the plant approximately $440. This results in annual net saving to 
plants ranging from $4,560 to $31,560.
    Program provisions will be applied uniformly to both large and 
small businesses and is not expected to burden small entities unduly or 
disproportionately.

Executive Order 13175

    This rule has been reviewed under E.O. 13175--Consultation and 
Coordination with Indian Tribal Governments, which requires agencies to 
consider whether their rulemaking actions would have Tribal 
implications. AMS has determined that this rule is unlikely to have 
substantial direct effects on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes.

List of Subjects in 7 CFR Part 58

    Dairy product, Food grades and standards, Food labeling, Reporting 
and recordkeeping requirements.

    For reasons set forth in the preamble, the Agricultural Marketing 
Service amends 7 CFR part 58 as follows:

PART 58--GRADING AND INSPECTION, GENERAL SPECIFICATIONS FOR 
APPROVED PLANTS AND STANDARDS FOR GRADES OF DAIRY PRODUCTS

0
1. The authority for part 58 continues to read as follows:

    Authority:  7 U.S.C. 1621-1627.

0
2. Amend Sec.  58.148 by adding paragraph (h) to read as follows:

Sec.  58.148  Plant records.

* * * * *
    (h) Butterfat test records. Retain for 12 months.

0
3. Amend Sec.  58.336 by revising paragraphs (a) and (b) to read as 
follows:

Sec.  58.336  Frequency of sampling for quality control of cream, 
butter and related products.

    (a) Microbiological. Samples shall be taken from churnings or 
batches and should be taken as often as is necessary to ensure 
microbiological control.
    (b) Sampling and testing.--(1) Composition. Sampling and testing 
for product composition shall be made on churns or batches as often as 
is necessary to ensure adequate composition control. For in-plant 
control, the Kohman or modified Kohman test may be used.
    (2) Sampling. Butterfat sampling may be performed as part of an in-
plant quality program.
* * * * *

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2025-00760 Filed 1-15-25; 8:45 am]
BILLING CODE 3410-02-P
```