1994-Crop Peanuts National Poundage Quota

DEPARTMENT OF AGRICULTURE

Agricultural Stabilization and Conservation Service

7 CFR Part 729

RIN 0560-AD20

1994-Crop Peanuts National Poundage Quota

AGENCY: Agricultural Stabilization and Conservation Service, USDA.

ACTION: Final rule.

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SUMMARY: On December 15, 1993, the Secretary of Agriculture (Secretary)

announced by press release that the national poundage quota for quota

peanuts was established at 1,350,000 short tons (st), 146,000 st less

than last year's quota. This final rule codifies the announced quota.

The quota is established pursuant to statutory requirements contained

in the Agricultural Adjustment Act of 1938 (the 1938 Act), as amended.

EFFECTIVE DATE: December 15, 1993.

FOR FURTHER INFORMATION CONTACT: Robert Miller, Director, Tobacco and

Peanuts Analysis Division, Agricultural Stabilization and Conservation

Service (ASCS), United States Department of Agriculture (USDA), room

3739, South Building, 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. Based on information compiled by USDA, it has been determined

that this final rule:

(1) Would have an annual effect on the economy of less than $100

million;

(2) Would not adversely affect in a material way the economy, a

sector of the economy, productivity, competition, jobs, the

environment, public health or safety, or State, local, or tribal

governments or communities;

(3) Would not create a serious inconsistency or otherwise interfere

with an action taken or planned by another agency;

(4) Would not alter the budgetary impact of entitlements, grants,

user fees, or loan programs or rights and obligations of recipients

thereof; and

(5) Would not raise novel legal or policy issues arising out of

legal mandates, the President's priorities, or principles set forth in

Executive Order 12866.

One commentor in response to the proposed quota previously

published in the Federal Register disagreed with conclusions (1), (2),

and (3) noting the 1990-crop and the drought that affected that crop.

These determinations remain unchanged as the quota level adopted by

this notice is required by statute and involves an on-going Federal

program.

Final Regulatory Impact Analysis

A final regulatory impact analysis discussing the impact of the

established quota is available from the above-named person.

Executive Order 12778

This final rule has been reviewed in accordance with Executive

Order 12778, Civil Justice Reform. The provisions of this rule do not

preempt State laws, are not retroactive, and do not involve

administrative appeals.

Federal Assistance Program

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

the Catalog of Federal Domestic Assistance, to which this final 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).

Regulatory Flexibility Act

It has been determined that the Regulatory Flexibility Act is not

applicable to this final rule because ASCS 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 matter of this rule.

Paperwork Reduction Act Requirements

The amendments to 7 CFR part 729 set forth in this final rule do

not contain information collection requirements that require clearance

through the Office of Management and Budget under the provisions of 44

U.S.C. chapter 35.

Announcement of the Quota

Section 358-1(a)(1) of the 1938 Act requires that the national

poundage quota for peanuts for each of the 1991 through 1995 marketing

years (MY's) be established by the Secretary at a level that is equal

to the quantity of peanuts (in tons) that the Secretary estimates will

be devoted in each such MY to domestic edible, seed, and related uses.

Section 358-1(a)(1) further provides that the national poundage quota

for a MY shall not be less than 1,350,000 st. The MY for 1994-crop

peanuts runs from August 1, 1994, through July 31, 1995. Poundage

quotas for the 1991-95 crops of peanuts were approved by 98.2 percent

of peanut growers voting in a referendum conducted December 10 through

13, 1990. A proposed rule on the quota determination, with a public

comment period, was published in the Federal Register (58 FR 63106) on

November 30, 1993. The proposed rule of 1,350,000 st set out, for

purposes of the proposed quota calculation, individual estimates for:

(1) Domestic food use; (2) farm sales and local sales of peanuts; (3)

seed use; (4) crushing residual; (5) shrinkage and other losses; and

(6) Segregation 2 and 3 loan transfers. The sum of the individual

estimates was 1,298,000 st., less than the allowed statutory minimum of

1,350,000 st.

Following a review of the comments and more recent estimates made

by the USDA Interagency Commodity Estimates Committee (ICEC) for

Oilseeds, Oils, and Meals, the estimates for domestic edible, seed, and

related uses totals 1,333,000 st., which is likewise below the allowed

minimum. Updated data resulted in adjustments to the estimates of

domestic food use and seed. The adjustments in those two factors also

produced a slight revision in the estimate for crushing residual. The

differences between the estimates on which the proposed quota was based

versus the estimates on which the final quota was established are set

out in the following table:

Estimated Domestic Edible, Seed, and Related Uses

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Quota (short tons)

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Item Proposed\1\

Final\2\

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Domestic edible:

Domestic food............................... 986,000 1,019,000

On farm and local sales..................... 22,000 22,000

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Subtotal................................ 1,008,000 1,041,000

Seed.......................................... 97,000 98,500

Related Uses:

Crushing residual........................... 133,000 133,500

Shrinkage and other losses.................. 40,000 40,000

Segregation 2 and 3 loan transfers to quota

loan....................................... 20,000 20,000

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Subtotal................................ 193,000 193,500

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Total................................... \3\1,298,00

0 \3\1,333,00

0

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\1\Contained in November 30, 1993, Federal Register (58 FR 63106).

\2\ Final quota determination.

\3\By statute, the quota level cannot be less than 1,350,000 st.

Discussion of the Comments on Proposed Quota

A total of 7 comments were received during the public comment

period that ended on December 6, 1993. Comments were submitted by 2

manufacturer/processor associations, 2 manufacturers, 1 sheller

association, and 2 grower associations.

The comments made regarding the 1994-crop national quota are

discussed below by subject matter.

A. Overall Quota Level

A number of comments were directed to the overall quota level

rather than to individual elements of the calculation. The

manufacturer/processor associations and manufacturers supported larger

quotas, between 1,403,000 st and 1,645,600 st. The sheller association

and two grower associations supported the proposed 1994 quota of

1,350,000 st. One commentor justified a high recommendation by citing

the 1990-crop year drought when yields were reduced and supplies were

very tight, but did not cite any figure for needed carryover, if any.

The current quota formula has applied since 1986 and growers have

produced on average 128 percent of the national poundage quota

(counting the production of non-quota, ``additional'' peanuts which

can, if needed, be used for quota-peanut purposes if certain special

procedures are followed and certain conditions are met).

B. Domestic Edible Use

The final estimate of 1994 domestic food use was 3 percent above

the proposed estimate. It was developed in two steps. First, total

domestic edible utilization of 1,137,500 st was estimated by the USDA

ICEC. Second, to account for peanut butter imports and exports, the

estimate of domestic edible disappearance was reduced by 118,500 st.

Manufacturer/processor associations and manufacturers requested a

higher domestic edible food use to enable growth in excess of projected

levels. A grower association supported the proposed domestic food use

estimate. Based on the best data available, it was determined that the

final quota made the most realistic estimates of growth and imports

possible.

Accordingly, the revised estimate of domestic edible use was

accepted.

C. Farm Use and Local Sales

No comments were received. The proposed estimate of 20,000 st was

accepted without change.

D. Seed Use

The proposed seed estimate of 97,000 st was based on the farmer

stock tonnage equivalent of the amount of seed required to plant the

expected 1995 crop. A manufacturer believed that processing losses for

seed peanuts requires a 150,000 st estimate. It was determined that the

ICEC estimate for the amount of seed required to plant the 1995 crop

was the most realistic estimate available and a revised ICEC seed

estimate of 98,500 st was accepted in the final rule.

E. Crushing Residual

The crushing residual represents the farmer stock equivalent weight

of crushing grade kernels shelled from quota peanuts. In any given load

of quota farmer stock peanuts, a portion of such peanuts is only

suitable for the crushing market. The portion of such peanuts only

suitable for the crushing market was proposed to be estimated at 12

percent, unchanged from the level used for setting the 1992 and 1993

quotas. One manufacturer asserted that recent edible kernel yields

would require using a higher crushing residual, but this higher yield

is not considered representative for the industry. It was determined

accordingly, that the proposed crushing residual factor of 12 percent

was the most accurate estimate available. That level is within the

range a sheller association proposed for the 1993 crop. The proposed

factor of 12 percent was retained.

F. Shrinkage and Other Losses

No comments were provided and the estimate was accepted as

proposed.

G. Segregation 2 and 3 Transfers

No comments were provided and the estimate was accepted as

proposed. This estimate represents peanuts that would otherwise be

eligible for use as quota peanuts but which will not qualify for such

use due to quality problems. Such transfers to quota peanut price

support loan pools occur when quota peanut producers, due to no fault

of their own, would otherwise have insufficient Segregation 1 peanuts

to fulfill their quota. In such instances, Segregation 2 and 3 peanuts

placed under an additional peanut price support loan may be transferred

to the quota price support loan. The Commodity Credit Corporation will

then ensure that such peanuts are crushed for oil.

Proposed Quota Adjustment for Undermarketings and Carryover

The foregoing components of the national poundage quota have not

been adjusted for either the application of prior undermarketings to

the 1994 quota or abnormal carryover stocks at the beginning of MY

1994. As peanut usage has grown, carryover stocks have also grown. But,

since 1980, carryover stocks have varied more from year to year than

earlier. Also, current law allows a farm's quota to be increased by the

amount by which marketings for prior years back to 1989 were less than

the farm's quota. The total of all such increases nationally may not

exceed 10 percent of the national poundage quota. Unapplied

undermarketings from 1993 suggest that the 1994 quotas at the farm

level will also be increased by the 10-percent maximum. In response to

this issue an association of manufacturers favored a 50,000 st quota

increase to adjust for low carryover stocks from the 1993-94 marketing

year. Two comments did not favor any MY 1994 quota adjustment for

undermarketings and carryover.

Without prejudice to possible adjustments to the 1995-crop and

subsequent quota determinations, it was determined that the 1994-crop

quota would not be adjusted to reflect the impact of undermarketings

and end of year carryover of 1993-crop peanuts into MY 1994 as it was

determined that a 1,350,000 st quota would be sufficient to meet full

demand for peanuts in the coming year.

After consideration of the comments received, the proposed change

to 7 CFR 729.214 is adopted as presented in the proposed rule.

List of Subjects in 7 CFR Part 729

Poundage quotas, Peanuts, Reporting and recordkeeping requirements.

Accordingly, 7 CFR part 729 is amended as follows:

PART 729--PEANUTS

1. The authority citation for 7 CFR part 729 continues to read as

follows:

Authority: 7 U.S.C. 1301, 1357 et seq., 1372, 1373, 1375; 7

U.S.C. 1445c-3.

2. Section 729.214 is amended by adding paragraph (d) to read as

follows:

Sec. 729.214 National poundage quota.

* * * * *

(d) The national poundage quota for peanuts for marketing year 1994

is 1,350,000 short tons.

Signed at Washington, DC, on February 18, 1994.

Bruce R. Weber,

Acting Administrator, Agricultural Stabilization and Conservation

Service.

[FR Doc. 94-4329 Filed 2-24-94; 8:45 am]

BILLING CODE 3410-05-P