1994-Crop Peanuts; National Average Support Levels for Quota and Additional Peanuts; and Minimum Commodity Credit Corporation Export Edible Sale Price for Additional Peanuts

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1421

RIN 0560-AD27

1994-Crop Peanuts; National Average Support Levels for Quota and

Additional Peanuts; and Minimum Commodity Credit Corporation Export

Edible Sale Price for Additional Peanuts

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The purpose of this final rule is to codify determinations

made by the Secretary of Agriculture (Secretary) with respect to the

1994 peanut crop: The national average support level for quota peanuts

of $678.36 per short ton (st); the national average support level for

additional peanuts of $132 per st; and the minimum Commodity Credit

Corporation (CCC) export edible sale price for additional peanuts of

$400 per st. The determinations of the national average support levels

for quota and additional peanuts were made pursuant to the statutory

requirements of the Agricultural Act of 1949 (the 1949 Act), as amended

by the Food, Agriculture, Conservation, and Trade Act of 1990. The

determination of the minimum CCC export edible sale price for

additional peanuts is a discretionary determination made to facilitate

the marketing of additional peanut contract negotiations.

EFFECTIVE DATE: February 15, 1994.

FOR FURTHER INFORMATION CONTACT: Kenneth M. Robison, Tobacco and

Peanuts Analysis Division, Agricultural Stabilization and Conservation

Service (ASCS), Room 3732, South Building, United States Department of

Agriculture, P.O. Box 2415, Washington, DC 20013-2415, Telephone 202-

720-7477.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This final rule is issued in conformance with Executive Order 12866

and has been determined to be significant.

Federal Assistance Program

The title and number of the Federal Assistance Program, as found in

the catalogue of Federal Domestic Assistance, to which this rule

applies are Commodity Loans and Purchases--10.051.

Executive Order 12372

This program/activity is not subject to the provisions of Executive

Order 12372 relating to intergovernmental consultation with state and

local officials. See the Notice related to 7 CFR part 3015, subpart V,

published at 48 FR 29115 (June 24, 1983).

Executive Order 12778

This rule has been reviewed in accordance with Executive Order

12778. The provisions of this rule do preempt State law, are not

retroactive, and do not involve administrative appeals.

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

applicable because CCC is not required by 5 U.S.C. 553 or any other

provision of law to publish a notice of proposed rulemaking with

respect to the subject of these determinations.

Information Collection Requirements

The amendments to 7 CFR part 1421 set forth in this final rule do

not contain information collections that require clearance by the

Office of Management and Budget under the provisions of 44 U.S.C. 35.

This rule is issued pursuant to the provisions of the 1949 Act.

On February 15, 1994, the Secretary announced the national average

support levels for 1994-crop quota and additional peanuts and the

minimum CCC export edible sales price for 1994-crop additional peanuts.

Section 1017 of The Food Security Act of 1985 provides that the

Secretary shall determine the rate of loans, payments, and purchases

for the 1991 through 1995 crops of commodities without regard to the

requirements for notice and public participation in rulemaking as

prescribed in 5 U.S.C. 553 or in any directive of the Secretary.

Determinations

A. Quota Peanuts Support Level

In accordance with section 108B(a)(2) of the 1949 Act, the national

average price support level for 1994-crop quota peanuts must be the

corresponding 1993-crop price support level adjusted to reflect any

increases in the national average cost of peanut production (excluding

any changes in the cost of land) during the calendar year immediately

preceding marketing year (MY) 1994, except that the MY 1994 price

support level cannot exceed the MY 1993 support level by more than 5

percent. In the event of a reduction in these costs of production, the

MY 1994 price support level for quota peanuts would be required, under

the terms of Section 108B, to be unchanged from MY 1993. The MY 1993

quota peanut price support level is $674.93 per st. The MY 1994 support

level for quota peanuts was determined based on the following

estimates:

Peanut Cost Escalator Calculations

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Variablecomponent 1993 1994

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Total cash expenses (less interest on real

estate), capital replacement, and unpaid

labor\1\....................................... $488.63/ac

re $492.91/ac

re

Trend yields.................................... 2,500 lbs./

acre 2,500 lbs./

acre

Adjusted costs per pound........................ $0.195452 $0.197164

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Adjusted Costs Per Short Ton

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Dollars per short ton

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1992 1993

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$390.90.................................................... $394.33

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1994 Quota Calculations

[Dollars per short ton]

Change during 1993 in the average cost of producing peanuts.. $3.43

1994 Quota Support Level (1993 Support + escalator).......... $674.93+

$3.43=

$678.36

\1\Economic Research Service estimates.

Source: TPAD/ASCS/January 1994.

As indicated, relevant peanut production costs increased from

calendar year 1992 to 1993. The MY 1994 quota peanut price support

level is accordingly established at $678.36 per st, up $3.43 per st

from MY 1993.

B. Additional Peanut Support Level

Section 108B(b)(1) of the 1949 Act provides that price support

shall be made available for additional peanuts at such level as the

Secretary determines will ensure no losses to CCC from the sale or

disposal of such peanuts, taking into consideration the demand for

peanut oil and peanut meal, expected prices of other vegetable oils and

protein meals, and the demand for peanuts in foreign markets.

The MY 1994 price support level for additional peanuts is

established at $132 per st to ensure no losses to CCC from the sale or

disposal of such peanuts, up $0.91 per st from MY 1992. Peanuts are

pledged as collateral for price support loans. The peanuts are then

sold out of inventory in order to recoup the loan principal, interest

and related costs. The statutory factors have been analyzed as set out

below. Based on those factors, it is anticipated that while the current

oil market is unusually strong, there is enough uncertainty in the

market to suggest caution in setting the floor price for inventory

peanuts sold for crushing. For that reason, it has been determined that

the support rate should remain essentially unchanged from the level for

additional peanuts that was in place for the 1993 crop, that being

$131.09 per st. However, it was determined to increase the support

level to reflect a similar percentage increase as applied to the quota

support level, then rounded to the nearest whole dollar which should

continue, it has been determined, to be a level which will reasonably

assure no losses on the sale or disposal of additional peanuts for CCC.

In making this determination, the following information was considered.

1. The domestic use of peanut oil during MY 1994 is forecast to be

117,500 st, up 6.8 percent from MY 1993 projected domestic use. MY 1994

peanut oil beginning stocks are expected to be 25,000 st, down 50

percent from MY 1993. The MY 1994 average peanut oil price is expected

to be $0.35 per pound, down $0.06 per pound from MY 1993.

2. The domestic use of peanut meal during MY 1994 is forecast to be

205,000 st, up 44,000 st from MY 1993 projected domestic use. MY 1994

peanut meal beginning stocks are expected to be 5,000 st, down 1,000 st

from MY 1993. The MY 1994 average peanut meal price is expected to be

$155 per st, up $45 per st from MY 1993.

3. The domestic disappearance of soybean oil during MY 1994 is

forecast to be 6,525,000 st, up 1.2 percent from projected MY 1993

domestic disappearance. MY 1994 soybean oil beginning stocks are

expected to be 462,500 st, down 40.5 percent from MY 1993. The MY 1994

average soybean oil price is expected to be $0.275 per pound, unchanged

from MY 1993.

4. The domestic disappearance of cottonseed oil during MY 1994 is

forecast to be 530,000 st, unchanged from projected MY 1993 domestic

disappearance. MY 1994 cottonseed oil beginning stocks are expected to

be 42,500 st, up 4.9 percent from MY 1993. The MY 1994 average

cottonseed oil price is expected to be $0.29 per pound, down $0.005

from MY 1993.

5. The domestic disappearance of soybean meal during MY 1994 is

forecast to be 24,500,000 st, up 1.0 percent from projected MY 1993

domestic disappearance. MY 1994 soybean meal beginning stocks are

expected to be 300,000 st, up 47 percent from MY 1993. The MY 1994

average soybean meal price is expected to be $165 per st, down $35 per

st from MY 1993.

6. The domestic disappearance of cottonseed meal during MY 1994 is

forecast to be 1,600,000 st, up 3.9 percent from projected MY 1993

domestic disappearance. MY 1994 cottonseed meal beginning stocks are

expected to be 40,000 st, up 37.9 percent from MY 1993. The average

cottonseed meal price for MY 1994 is expected to be $130 per st, down

$35 per st from MY 1993.

7. The world use of peanuts for MY 1993 is expected to be 23.03

million metric tons, down 0.1 percent from MY 1992. World peanut

production for MY 1993 is forecast to be 22.74 million metric tons,

down 1.5 percent from MY 1992. Ending stocks for MY 1993 are forecast

at 0.59 million metric tons, down 30.0 percent from MY 1992.

C. Minimum CCC Export Edible Sales Price for Additional Peanuts

The minimum price at which additional peanuts owned or controlled

by CCC may be sold for use as edible peanuts in export markets is a

discretionary action that, by practice, is announced at the same time

as quota and additional peanut support levels to facilitate the

negotiation of additional peanut contracts by producers and handlers.

A proposed rule setting forth the MY 1994 minimum CCC export edible

sales price of $400 per st as well as other determinations not related

to this notice, was published on November 30, 1993 (58 FR 63106). Eight

comments were received during the public comment period that ended on

December 2, 1993. Comments were submitted by four grower and sheller

organizations that supported the proposed $400 per st minimum CCC

export edible sales price. Two manufacturers and two manufacturer

organizations made no recommendations on this issue. For the reasons

given in the proposed rule, the minimum price at which 1994-crop

additional peanuts owned or controlled by CCC may be sold for use as

edible peanuts in export markets is established at $400 per st.

List of Subjects in 7 CFR Part 1421

Grains, Loan programs--agriculture, Oilseeds, Peanuts, Price

support programs, Reporting and recordkeeping requirements, Soybeans,

Surety bonds, Warehouses.

Accordingly, 7 CFR part 1421 is amended as follows:

PART 1421--GRAINS AND SIMILARLY HANDLED COMMODITIES

1. The authority citation for 7 CFR part 1421 continues to read as

follows:

Authority: 7 U.S.C. 1421, 1423, 1425, 1441z, 1444f-1, 1445b-3a,

1445c-3, 1445e, and 1446f; 15 U.S.C. 714b and 714c.

2. Section 1421.7(b)(8)(iii) is amended by:

A. Removing the period at the end of paragraph (b)(8)(iii) and

inserting a semicolon in its place; and

B. Adding paragraph (b)(8)(iv) to read as follows:

Sec. 1421.7 Adjustment of basic support rates.

* * * * *

(6) * * *

(8) * * *

(iv) 1994 Peanuts, Quota--$678.36 per short ton; Additional--

$132.00 per short ton.

* * * * *

3. Section 1421.27 is amended by:

A. Removing the period at the end of paragraph (a)(2)(iii) and

inserting a semicolon in its place, and

B. Adding paragraph (a)(2)(iv) to read as follows:

Sec. 1421.27 Producer-handler purchases of additional peanuts pledged

as collateral for a loan.

(a) * * *

(2) * * *

(iv) The 1994 minimum CCC sales price for additional peanuts sold

for export edible use is $400 per short ton.

* * * * *

Signed at Washington, DC, on September 8, 1994.

Bruce R. Weber,

Acting Executive Vice President, Commodity Credit Corporation.

[FR Doc. 94-22922 Filed 9-15-94; 8:45 am]

BILLING CODE 3410-05-P