Waiver Authority Under the State Processing Program

SUMMARY: This final rule amends the Food Distribution Program

regulations by giving the Food and Consumer Service authority to waive

provisions contained in the Food Distribution Program regulations for

the purpose of conducting demonstration projects to test program

changes designed to improve the State processing of donated foods. FCS

is, at this time, invoking its authority under Sec. 250.30(t) to waive

certain provisions of Sec. 250.30(f)(1)(i) in order to conduct a

demonstration project.

EFFECTIVE DATE: This final rule is effective February 12, 1996.

FOR FURTHER INFORMATION CONTACT: Ursula Key, Schools/Institutions

Branch, Food Distribution Division, Food and Consumer Service, U.S.

Department of Agriculture, 3101 Park Center Drive, Room 501,

Alexandria, Virginia 22302; or telephone (703) 305-2644.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This final rule has been determined to be significant and was

reviewed by the Office of Management and Budget under Executive Order

12866.

Paperwork Reduction Act

This final rule reflects no new information collection requirements

under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3502). The

OMB control number assigned to the existing recordkeeping and reporting

requirements was approved by OMB for Part 250 under control number

0584-0007. The current burden hours will not change as a result of this

final rule.

Executive Order 12372

This program is listed in the Catalog of Federal Domestic

Assistance under 10.550 and is subject to the provisions of Executive

Order 12372 which requires intergovernmental consultation with State

and local officials (7 CFR Part 3015, Subpart V and final rule-related

notices published at 48 FR 29114, June 24, 1983 and 49 FR 22676, May

31, 1984).

Executive Order 12778

This final rule has been reviewed under Executive Order 12778,

Civil Justice Reform. This final rule is intended to have preemptive

effect with respect to any State or local laws, regulations or policies

which conflict with its provisions or which would otherwise impede its

full implementation. This final rule is not intended to have

retroactive effect unless so specified in the ``Effective Date''

section of this preamble. Prior to any judicial challenge to the

provisions of this rule or the application of its provisions, all

applicable administrative procedures must be exhausted. This includes

any administrative procedures provided by State or local governments.

For disputes involving procurement by distributing and recipient

agencies, this includes any administrative appeal procedures to the

extent required by 7 CFR Parts 3015 or 3016.

Regulatory Flexibility Act

This final rule has been reviewed with regard to the requirements

of the Regulatory Flexibility Act (5 U.S.C. 601-612). The Administrator

of the Food and Consumer Service (FCS) has certified that this final

rule will not have a significant economic impact on a substantial

number of small entities. The cost of compliance to State processors of

donated foods is expected to be reduced by the changes proposed in this

rule.

Background

Section 250.30 of the current Food Distribution Program regulations

sets forth the terms and conditions under which distributing agencies,

subdistributing agencies, and recipient agencies may enter into

contracts with commercial firms for processing donated foods and

prescribes the minimum requirements to be included in such contracts.

On April 13, 1995, the Department published a proposed rule in the

Federal Register at 60 FR 18781 which would permit FCS to waive any of

the requirements of the Food Distribution Program regulations at Part

250 for the purpose of conducting demonstration projects to test

program changes designed to improve the State processing of donated

foods. The proposed rule provided a 30-day comment period. This final

rule incorporates the proposed waiver provision in the State processing

regulations at 7 CFR 250.30(t).

Analysis of Comments

The Department received a total of 9 comment letters from two

distributing agencies, a local school food authority, and six

commercial food processors. All commenters were in favor of the

proposed rule.

Four commenters responded favorably to the rule as it was proposed.

They stated that by allowing FCS to waive certain provisions, more

processors would be attracted to the program, and the cost of processed

end products should be reduced. They further stated that some of the

provisions contained in the State processing regulations are overly

restrictive and have resulted in processors dropping out of the State

processing program. These commenters believed that over-regulation

results in increased costs which are passed on to recipient agencies.

They supported FCS's proposal to allow pilot projects which could

provide guideposts for simplification of the regulations. One commenter

believed that demonstration projects will fully support modifications

to the current program to generate more competition and improved

efficiency.

Five commenters who also supported the proposed rule cited specific

provisions they would like to see waived as soon as possible. Three

commenters supported the removal of the Agricultural Marketing Service

acceptance service grading requirement for processing meat and poultry,

complaining of excessive costs for obtaining the services of AMS

graders. However, one commenter favored

[[Page 5272]]

retaining the requirement. Four commenters supported removing the

requirement for processors to submit annual certified public accountant

audit reports, also due to the costs involved. The commenters claimed

that the requirement has forced some processors out of the program.

They stated that those companies complying with the audit provision are

passing on audit costs in prices of end products to schools. FCS

appreciates these comments and will take them into consideration when

determining which requirements will be waived during the demonstration

projects.

Waiver of Requirements

FCS is invoking its authority under 7 CFR 250.30(t) to waive the

current prohibition in 7 CFR 250.30(f)(1)(i) of the substitution of

poultry. In a notice published elsewhere in this issue, FCS is

announcing a demonstration project under which it will permit selected

poultry processors to substitute commercial chicken for donated chicken

in the State processing of donated chicken.

Summary

Based on the comments received, this final rule adopts

Sec. 250.30(t) of the proposed rule without change.

List of Subjects in 7 CFR Part 250

Agricultural commodities, Food assistance programs, Food

processing.

For reasons set forth in the preamble, 7 CFR Part 250 is amended as

follows:

PART 250--DONATION OF FOODS FOR USE IN THE UNITED STATES, ITS

TERRITORIES AND POSSESSIONS AND AREAS UNDER ITS JURISDICTION

1. The authority citation for Part 250 continues to read as

follows:

Authority: 5 U.S.C. 301; 7 U.S.C. 612c, 612c note, 1431, 1431b,

1431e, 1431 note, 1446a-1, 1859; 15 U.S.C. 713c; 22 U.S.C. 1922; 42

U.S.C. 1751, 1755, 1758, 1760, 1761, 1762a, 1766, 3030a, 5179, 5180.

2. In Section 250.30, a new paragraph (t) is added to read as

follows:

Sec. 250.30 State processing of donated foods.

* * * * *

(t) Waiver authority. The Food and Consumer Service may waive any

of the requirements contained in this part for the purpose of

conducting demonstration projects to test program changes designed to

improve the State processing of donated foods.

Dated: January 18, 1996.

Ellen Haas,

Under Secretary for Food, Nutrition, and Consumer Services.

Appendix to Preamble of Final Rule--Regulatory Impact Analysis

Date: June 1995

Agency: USDA, FCS

Contact: Ursula Key

Phone: (703) 305-2644

1. Title: Food Distribution Program--Waiver Authority Under the

State Processing Program.

2. Action:

a. Nature: Final Rule.

b. Need and Purpose: This action is discretionary and is taken

to support the goal of regulatory relief, increased State

flexibility, increased program efficiency, and paperwork reduction.

This authority will be used to conduct demonstration projects to

test program alternatives to determine whether changes or greater

flexibility will improve the efficiency of the State processing

program. Of particular interest are changes that would increase

competition among processors, which should result in lower costs to

recipient agencies.

This action amends the Food Distribution Program regulations by

giving the Food and Consumer Service authority to waive provisions

pertaining to State processing of donated commodities in the Food

Distribution Program regulations at 7 CFR Part 250.30 only for the

purpose of allowing demonstration projects. Current State processing

regulations may be overly restrictive, thus increasing processor

costs and discouraging the participation of processors.

3. Background: Section 250.30 of the current Food Distribution

Program regulations sets forth the terms and conditions under which

distributing agencies, subdistributing agencies, and recipient

agencies may enter into contracts with commercial firms for

processing donated foods and prescribes the minimum requirements to

be included in such contracts. This activity is typically referred

to as State processing.

State processing is an activity principally of the Child

Nutrition Programs by which State or substate agencies arrange to

have USDA donated commodities further processed into end products

more readily usable by schools. For example, fresh bulk pack chicken

might be processed into chicken nuggets, coarse ground beef into

hamburger patties, whole turkeys into fully cooked breast meat and

turkey ham, etc. About a third to half of all USDA donated meat and

poultry is further processed under State processing contracts. For

State processing, USDA either sends the commodities directly to a

processor contracted by the State, or sends them to a State

distributing agency, which in turn arranges to have the product

backhauled to a processor. In either case, under State processing,

State or recipient agencies pay the cost of any additional

processing directly to the processor.

The total value of USDA commodities donated to the Child

Nutrition Programs was $667 million in FY 1994. A little under half

of this, of which a third, or $100 million worth, was further

processed under State processing arrangements. This figure has been

constant for the last several years. While the degree of State

processing varies by the specific type of product donated by USDA,

typically about two thirds of beef is processed under State

contracts, while less than a third of the pork, chicken and turkey

are processed. Under current FCS regulations, processors may

substitute like kind commercial commodities for USDA commodities for

their convenience in manufacturing, except the rules specifically

prohibit the substitution of meat and poultry.

On April 13, 1995, the Department published a proposed rule in

the Federal Register at 60 FR 18781 which would permit FCS to waive

provisions relative to the State processing of donated commodities

that are contained in the Food Distribution Program regulations at

Part 250 for the purpose of conducting demonstration projects to

test program changes designed to improve the State processing of

donated foods. The proposed rule provided a 30-day comment period.

This final rule incorporates the proposed waiver provision in the

State processing regulations at 7 CFR 250.30(t).

The Department received a total of 9 comment letters, all of

which were in favor of the proposed rule.

Commenters stated that by allowing FCS to waive certain

provisions of the State processing regulations, more processors

would be attracted to the program, and the cost of processed end

products should be reduced. They further stated that some of the

provisions contained in the State processing regulations are overly

restrictive and have resulted in processors dropping out of the

State processing program. These commenters believed that over-

regulation results in increased costs which are passed on to

recipient agencies. They supported FCS's proposal to conduct

demonstration projects which could provide guideposts for

simplification of the regulations. One commenter believed that

demonstration projects will fully support modifications to the

current program requirements to generate more competition and

improve efficiency.

One of the first demonstrations being considered is the

substitution of commercially acquired chicken for USDA donated

chicken. Currently, only four poultry processors are participating

in the State processing of donated foods. Processors have stated

that the current policy which prohibits the substitution of

commercially acquired chicken for donated chicken reduces the

quantity of donated chicken they are able to accept and process

during a given period. The prohibition against the substitution came

about as a result of program abuses by processors in the past (e.g.,

substituting lesser grade commercial chicken for donated chicken,

substituting mechanically boned chicken meat for high quality breast

meat, etc). In FY 1994, USDA donated approximately $68 million worth

of chicken to the Child Nutrition Program, about a third of which

underwent State processing. Chicken purchased by USDA for further

processing is typically bulk chill packed. In

[[Page 5273]]

FY 1994, USDA donated 9.5 million pounds valued at $5.3 million.

Processors must schedule production around deliveries of the donated

chicken since it is a very highly perishable product. Some of the

processors must schedule production around deliveries of donated

chicken for up to 30 individual States. Vendors do not always

deliver donated chicken to the processors as scheduled, causing

delays in production of end products. These delays may be eliminated

if the processors can substitute commercial chicken for donated

chicken. Any substituted commercial chicken must be at least as high

in quality as USDA chicken in terms of grade, condition, and other

attributes.

The demonstration project will enable FCS to evaluate whether to

amend program regulations to provide for the substitution of donated

chicken with commercial chicken in the State processing program.

Particular attention will be paid to whether such an amendment of

the regulations would be likely to increase the number of processors

participating, and whether it would probably increase the quantity

of donated chicken that each processor accepts for processing. Also,

FCS will attempt to determine whether the expected increase in

competition and the expected increase in the quantity of donated

chicken accepted for processing in fact enable processors to

function more efficiently, producing a greater variety of processed

chicken end products in a more timely manner at lower costs.

Further, FCS must determine whether USDA and the States have the

practical capability to ensure that substitutions are, in fact, for

comparable or better quality product.

4. Justification of Alternative: This final rule would authorize

the Department to conduct demonstration projects to study the effect

of waiving certain expensive and burdensome requirements in the

State processing program. For example, Agricultural Marketing

Service (AMS) acceptance service grading certificates may be used in

lieu of company generated production and quality control records.

Through these demonstration projects, the Department hopes to

determine if the cost of compliance for food manufacturers, as well

as the record-keeping burden associated with the administration of

the program, can be reduced. The Department's goal is to attract

more manufacturers to participate in the State processing program.

We are aware of three major poultry processors who sell commodity

product to USDA but do not participate in the State processing

program. We are not able to determine at this time exactly how many

additional processors will decide to participate in the State

processing program but AMS is optimistic that more processors will

be interested in participating. This increased competition should

ultimately lead to lower prices to recipient agencies. By conducting

the demonstration projects, the Department can determine if relaxing

certain requirements will adversely affect program accountability.

It is important to note that all remaining controls and requirements

of the State processing regulations and the State processing

contracts will remain in effect. We are only considering reductions

or waivers which are feasible because other program controls can

perform the function of the changed or waived requirements. If the

results of the demonstration projects indicate that certain

requirements can be modified or waived without compromising program

integrity, the Department can consider amending certain current

State processing program requirements. The Department expects this

rule will support efforts to streamline the administration of the

State processing program and improve customer service to recipient

agencies (primarily schools).

Two other alternatives were considered: (1) doing nothing and

(2) eliminating the audit and substitution regulations entirely. The

option of selected waivers for demonstration projects was the

preferred alternative.

5. Effects:

a. Effects on food manufacturers: Through conducting

demonstration projects, FCS can determine if it is possible to

eliminate or reduce reporting and recordkeeping requirements for

processors. Some of the more burdensome requirements include

inventory records, production records, quality control records,

sales records, monthly performance reports, grading and inspection

requirements, performance, supply, and surety bonding requirements,

and the certified public accountant audit requirement. For example,

processors which receive donated food valued at $250,000 or more

each year are required to submit an annual independent certified

public accountant audit report. This requirement may be relaxed to

require an audit every two or three years for those processors with

a history of good performance. The Department is interested in

determining whether any of the above requirements can be eliminated

or reduced while still maintaining program accountability for the

donated food. Also, the Department intends to determine how much

costs can be reduced for processors as a result of participation in

the demonstration projects. Since program controls may not be as

strong as under current rules, FCS would seek to determine the

extent to which the benefits of burden reduction are worth potential

costs due to less control.

b. Effects on State distributing agencies: Through the

demonstrations projects, the Department will determine if it is

possible to streamline the administration of the processing program

at the State level. Currently, States must enter into agreements or

renew them annually. Additionally, States must review end product

data schedules, performance, supply, and surety bonds, performance

reports and grading certificates on a monthly basis, and certified

public accountant audit reports as submitted. During the

demonstration projects, the Department hopes to review the current

responsibilities of the State agencies and determine areas where

there is duplication of effort and where reductions in reporting may

be possible.

c. Effects on Recipient agencies: Currently the processors'

costs of all the record-keeping and reporting requirements (e.g.,

acceptance service grading, performance, supply, and surety bond,

and certified public accountant audit reports) are being passed on

to the recipient agencies via higher prices for end products. Also,

fewer processors are participating in the program, claiming that

certain requirements are too burdensome and expensive. FCS has been

informed that the typical cost of an independent certified public

accountant audit report can run from $10,000 to $25,000 depending on

the volume of food processed by a manufacturer. If we could require

the audits less frequently for processors with a history of good

performance, their costs could be significantly reduced. Since

processors pass their costs on to recipient agencies, this should

enable them to reduce the prices of the products they sell to

schools. By conducting demonstration projects to study the

possibility of removing or reducing some of the requirements, the

Department hopes that more processors will participate in the State

processing program, thereby increasing the competitive base. By

reducing costs for the processors and increasing competition, it

should be possible to reduce prices of end products to the schools.

Processing adds about $0.78 to $1.09 per pound to the value of the

end product. For example, coarse ground beef costing USDA $1.08 per

pound would be worth $1.86 to $2.17 per pound to the State after

processing. In other words, processing roughly doubles the value of

donated beef.

As with beef, processing typically adds about $0.78 to $1.09 per

pound in value to chicken, roughly the same per pound as beef

processing. It is hoped that the flexibilities offered through the

demonstrations under this rule could reduce this by perhaps 5 to 10

percent. If the demonstrations prove these savings out, and the

flexibilities had been available and fully used in 1994, States

would have saved about $1 to $2 million of their processing costs

(i.e., 25 million pounds times $0.93 per pound processing (the

midpoint) equals $23 million minus 5 percent to 10 percent equals

$1.2 to $2.3 million). If a comparable savings rate were achieved in

all processed meat and poultry in 1994, the States would have saved

perhaps $7 to $14 million total. The demonstration projects will

allow FCS to quantify potential savings more accurately. See

attached tables for more detailed illustration.

d. Effects on program costs and integrity: As demonstration

projects are conducted, the Department hopes to determine if certain

administrative costs associated with the State processing program

can be reduced. The Department is also concerned that program

integrity be maintained. If elimination of audit requirements or

allowance of substitution should result in an increase in fraudulent

behavior, the potential savings desirable could be completely

eliminated.

e. Effects on small entities: This rule would not have a

significant economic impact on a substantial number of small

entities. Commercial food processors participating in the

demonstration projects will be most affected to the extent that they

have the greatest record-keeping and reporting requirements in the

State processing program.

[[Page 5274]]

Table 1.--Child Nutrition Programs, Commodity Donations

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

Dollars in thousands Pounds in thousands

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

1990 1991 1992 1993 1994 1990 1991 1992 1993 1994

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

Child nutrition commodities:

Entitlement........................... $520,845 $533,188 $558,154 $573,281 $574,598 952,311 1,009,384 842,193 887,012 894,648

Bonus................................. 110,601 84,306 122,162 90,163 92,226 139,820 109,105 315,727 163,940 147,851

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

Total commodities................... 631,446 617,494 680,316 663,444 666,824 1,092,131 1,118,489 1,157,920 1,050,952 1,042,499

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

of which:

Beef patties, frz..................... 10,484 11,545 12,732 14,335 6,801 7,748 8,426 9,262 10,597 4,986

Beef patties, frz w/vpp............... 12,350 19,004 25,193 25,067 20,749 11,428 16,909 22,177 22,514 19,068

Beef patties, extra lean.............. ......... ......... 6,810 10,736 8,931 ......... ......... 3,830 6,771 5,563

Beef frozen ground.................... 103,661 110,964 115,473 116,522 94,796 80,778 84,581 88,938 92,698 74,104

Beef roasts, choice................... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Beef, canned W/J...................... 942 ......... 906 753 72 612 ......... 612 504 47

Beef, frz grd course process.......... 7,014 8,880 11,759 16,035 21,039 5,437 6,930 9,072 12,390 16,422

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

Subtotal, beef...................... 134,451 150,393 172,873 183,448 152,388 106,003 116,846 133,891 145,474 120,190

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

Chicken, canned boned................. ......... ......... ......... ......... 2,103 ......... ......... ......... ......... 1,083

Chickens, chilled bulk................ 6,260 5,844 7,274 5,594 5,343 10,908 11,232 14,611 10,188 9,496

Chickens, chill leg................... ......... ......... ......... 4,807 5,377 ......... ......... ......... 9,108 9,830

Chickens, drums....................... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Chickens, frozen, cut up.............. 36,732 32,187 33,257 19,869 20,536 55,506 53,946 60,454 31,737 31,753

Chickens, frozen breaded.............. 3,235 ......... 4,596 12,544 13,646 2,611 ......... 3,988 11,424 12,762

Chickens, leg qtrs.................... ......... ......... ......... ......... 1,133 ......... ......... ......... ......... 3,080

Chickens, nuggets frz soc............. ......... ......... 241 4,183 1,370 ......... ......... 468 2,652 2,028

Chickens, diced frz................... ......... ......... 22,107 12,074 18,066 ......... ......... 9,921 5,271 8,133

Chickens, patties, soc................ ......... ......... ......... 121 474 ......... ......... ......... 78 702

Chickens, thighs...................... ......... ......... ......... ......... 1 ......... ......... ......... ......... .........

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

Subtotal, chicken................... 46,227 38,031 67,475 59,192 68,048 69,025 65,178 89,442 70,458 78,867

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

Pork, canned W/NJ..................... 336 2,045 923 680 1,572 252 1,369 720 540 1,269

Pork, frz ground...................... 17,481 23,833 15,349 20,217 15,794 16,252 20,744 16,947 19,744 15,579

Pork, frz grd coarse process.......... ......... ......... 1,986 3,170 3,733 ......... ......... 2,020 3,247 3,841

Pork, frz patties..................... ......... ......... ......... ......... 291 ......... ......... ......... ......... 277

Pork, ham, frz cooked................. 19,618 114 9,641 ......... 25,513 12,915 72 6,652 ......... 16,011

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

Subtotal, pork...................... 37,435 25,992 27,899 24,067 46,903 29,419 22,185 26,339 23,531 36,977

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

Turkey roasts, frozen................. 26,122 26,769 18,637 34,166 27,634 18,747 20,071 13,221 24,874 19,962

Turkey, commercial pack............... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Turkey, frozen ground................. 5,957 5,928 5,978 11,012 9,858 9,098 8,189 7,847 18,817 16,926

Turkey, frozen whole.................. 11,700 12,191 7,551 7,612 9,364 17,352 17,754 10,949 12,406 15,043

Turkey, chilled, bulk................. 3,832 3,613 5,870 8,212 7,287 5,976 5,544 9,821 13,752 11,720

Turkey, frz ground burgers............ ......... ......... 809 3,166 1,648 ......... ......... 756 3,348 1,872

Turkey, sausage chubbs................ ......... ......... ......... ......... 371 ......... ......... ......... ......... 468

Turkey, sausage patties............... ......... ......... ......... ......... 606 ......... ......... ......... ......... 540

Turkey, sausage links................. ......... ......... ......... ......... 409 ......... ......... ......... ......... 320

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

Subtotal, turkey.................... 47,611 48,501 38,845 64,168 57,177 51,173 51,558 42,594 73,197 66,851

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

Total, meat and poultry............. 265,724 262,917 307,092 330,875 324,516 255,620 255,767 292,266 312,660 302,885

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

Table 2.--Child Nutrition Programs, Commodity Donations

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

Dollars in thousands Pounds in thousands

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

1990 1991 1992 1993 1994 1990 1991 1992 1993 1994

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

Likely to be further processed by States:

Beef, frozen ground................... $103,661 $110,964 $115,473 $116,522 $94,796 80,778 84,581 88,938 92,698 74,104

Beef, frz grd coarse process.......... 7,014 8,880 11,759 16,035 21,039 5,437 6,930 9,072 12,390 16,422

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

Subtotal, beef...................... 110,675 119,844 127,232 132,557 115,835 86,215 91,511 98,010 105,088 90,526

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

Additional processing costs at $0.93 per

pound.................................... ......... ......... ......... ......... 84,189 ......... ......... ......... ......... 90,526

Chicken, chilled bulk................. 6,260 5,844 7,274 5,594 5,343 10,908 11,232 14,611 10,188 9,496

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

Subtotal, chicken................... 6,260 5,844 7,274 5,594 5,343 10,908 11,232 14,611 10,188 9,496

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

Additional processing costs at $0.93 per

pound.................................... ......... ......... ......... ......... 8,831 ......... ......... ......... ......... 9,496

Pork, frz ground...................... 17,481 23,833 15,349 20,217 15,794 16,252 20,744 16,947 19,744 15,579

Pork, frz grd course process.......... ......... ......... 1,986 3,170 3,733 ......... ......... 2,020 3,247 3,841

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

Subtotal, pork...................... 17,481 23,833 17,335 23,387 19,527 16,252 20,744 18,967 22,991 19,420

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

[[Page 5275]]

Additional processing costs at $0.93 per

pound.................................... ......... ......... ......... ......... 18,061 ......... ......... ......... ......... 19,420

Turkey, frozen ground................. 5,957 5,928 5,978 11,012 9,858 9,098 8,189 7,847 18,817 16,926

Turkey, chilled bulk.................. 3,832 3,613 5,870 8,212 7,287 5,976 5,544 9,821 13,752 11,720

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

Subtotal, turkey.................... 9,789 9,541 11,848 19,224 17,145 15,074 13,733 17,668 32,569 28,646

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

Additional processing costs at $0.93 per

pound.................................... ......... ......... ......... ......... 26,641 ......... ......... ......... ......... 28,646

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

Total, meat and poultry............. 144,205 159,062 163,689 180,762 157,850 128,449 137,220 149,256 170,836 148,088

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

Additional processing costs at $0.93 per

pound.................................... ......... ......... ......... ......... 137,722 ......... ......... ......... ......... 148,088

Potential State processing savings at:

1 percent............................. ......... ......... ......... ......... 1,377 ......... ......... ......... ......... .........

5 percent............................. ......... ......... ......... ......... 6,886 ......... ......... ......... ......... .........

10 percent............................ ......... ......... ......... ......... 13,772 ......... ......... ......... ......... .........

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

Approved:

Dated: June 28, 1995.

William E. Ludwig,

Administrator, Food and Consumer Service.

Dated: August 29, 1995.

Stephen B. Dewhurst,

Director, Office of Budget and Program Analysis.

Dated: August 4, 1995.

Keith Collins,

Acting Chief Economist.

Dated: September 11, 1995.

Ellen Haas,

Assistant Secretary for Food, Nutrition and Consumer Services.

[FR Doc. 96-2177 Filed 2-9-96; 8:45 am]

BILLING CODE 3410-30-U