1995-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-AD67

1995-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

1995 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. The determination and announcement of the minimum CCC export

edible sale price for additional peanuts is a discretionary action made

to facilitate the negotiation of private contracts for export edible

peanuts.

EFFECTIVE DATE: February 15, 1995.

FOR FURTHER INFORMATION CONTACT: John A. Craven, Consolidated Farm

Service Agency (CFSA), Room 3744, South Building, United States

Department of Agriculture, PO. Box 2415, Washington, DC 20013-2415,

Telephone 202-690-0446. [[Page 27869]]

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This final rule has been determined to be significant and was

reviewed by OMB under Executive Order 12866.

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 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.

Paperwork Reduction Act

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.

Determinations

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

On February 15, 1995, the Secretary announced the national average

support levels for 1995-crop quota and additional peanuts and the

minimum CCC export edible sales price for 1995-crop additional peanuts.

Section 1017 of the Food Security Act of 1985, as amended, 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 any directive of the Secretary.

A. Quota Peanuts Support Level

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

average price support level for 1995 crop quota peanuts must be the

corresponding 1994-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) 1995, except that the MY 1995 price

support level cannot exceed the MY 1994 support level by more than 5

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

MY 1995 price support level for quota peanuts would be required, under

the terms of Section 108B, to be unchanged from MY 1994. The MY 1994

quota peanut price support level is $678.36 per short ton (st). The MY

1995 support level for quota peanuts was determined based on the

following estimates:

Peanut Production Cost Calculations

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

Variable/component 1993 1994

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

Production costs....... $492.91/acre........... $489.07/acre.

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

Production costs....... $394.33/st............. $391.26/st.

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

1995 Quota Calculations

[Dollars per short ton]

Change during 1994 in the average cost of producing peanuts... -$3.07

1995 Quota Support Level (1994 Support + any cost increase)... 678.36

As indicated, relevant peanut production costs decreased from

calendar year 1993 to 1994. The MY 1995 quota peanut price support

level is accordingly established at $678.36 per st, unchanged from MY

1994.

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 1995 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, unchanged from MY 1994. 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 unchanged from the level for additional peanuts that

was in place for the 1994 crop, that being $132.00 per st.

In making this determination, the following information was

considered:

1. The domestic use of peanut oil during MY 1995 is forecast to be

115,000 st, up 2 percent from MY 1994 projected domestic use. MY 1995

peanut oil beginning stocks are expected to be 19,000 st, up 50 percent

from MY 1994. The MY 1995 average peanut oil price is expected to be

$0.40 per pound, down $0.06 per pound from MY 1994.

2. The domestic use of peanut meal during MY 1995 is forecast to be

180,000 st, down 2,000 st from MY 1994 projected domestic use. MY 1995

peanut meal beginning stocks are expected to be 5,000 st, down 2,000 st

from MY 1994. The MY 1995 average peanut meal price is expected to be

$155 per st, up $20 per st from MY 1994.

3. The domestic disappearance of soybean oil during MY 1995 is

forecast to be 6,650,000 st, up 2.3 percent from projected MY 1994

domestic disappearance. MY 1995 soybean oil beginning stocks are

expected to be 640,000 st, up 16 percent from MY 1994. The MY 1995

average soybean oil price is expected to be $0.27 per pound, unchanged

from MY 1994.

4. The domestic disappearance of cottonseed oil during MY 1995 is

forecast to be 510,000 st, up slightly from projected MY 1994 domestic

disappearance. MY 1995 cottonseed oil beginning stocks are expected to

be 40,000 st, down 25 percent from MY 1994. The MY 1995 average

cottonseed oil price is expected to be $0.27 per pound, up $0.02 from

MY 1994.

5. The domestic disappearance of soybean meal during MY 1995 is

forecast to be 26,500,000 st, up 1.0 percent from projected MY 1994

domestic disappearance. MY 1995 soybean meal beginning stocks are

expected to be 300,000 st, up 50 percent from MY 1994. The MY 1995

average soybean meal price is expected to be $160 per st, up $5 per st

from MY 1994.

6. The domestic disappearance of cottonseed meal during MY 1995 is

forecast to be 1,725,000 st, up 3 percent from projected MY 1994

domestic disappearance. MY 1995 cottonseed meal beginning stocks are

expected to be 65,000 st, up 23 percent from MY 1994. The average

cottonseed meal price for MY 1995 is expected to be $125 per st, up $5

per st from MY 1994. [[Page 27870]]

7. The world use of peanuts for MY 1994 is expected to be 24.42

million metric tons, up 1.3 percent from MY 1993. World peanut

production for MY 1994 is forecast to be 24.47 million metric tons, up

2 percent from MY 1993. Ending stocks for MY 1994 are forecast at 0.70

million metric tons, up 8 percent from MY 1993.

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 1995 minimum CCC export edible

sales price of $400 per st was published on January 4, 1995 (60 FR

381). Six comments were received in response to the notice during the

public comment period that ended on January 17, 1995. The six

respondents addressing this issue were five shellers or sheller/

processors and one peanut product manufacturer. Five comments supported

a CCC export edible sales price of $400 per st or above; most of these

felt that the $400 minimum had served the industry well since 1986. One

sheller respondent felt that CCC should discontinue the policy of

announcing a minimum export edible sales price and make all additional

peanuts available to export markets at market determined prices. The

$400 price has been adopted in this final rule for the reasons set out

in the January 4 notice.

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)(iv) is revised and paragraph (b)(8)(v) is

added to read as follows:

Sec. 1421.7 Adjustment of basic support rates.

* * * * *

(b) * * *

(8) * * *

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

$132.00 per short ton;

(v) 1995 Peanuts, Quota--$678.36 per short ton; Additional--$132.00

per short ton;

* * * * *

3. Sections 1421.27(a)(2)(iv) is revised and paragraph (a)(2)(v) is

added 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;

(v) The 1995 minimum CCC sales price for additional peanuts sold

for export edible use is $400 per short ton.

* * * * *

Signed at Washington, DC, on May 21, 1995.

Bruce R. Weber,

Acting Executive Vice President, Commodity Credit Corporation.

[FR Doc. 95-13000 Filed 5-25-95; 8:45 am]

BILLING CODE 3410-05-P