[Federal Register Volume 61, Number 221 (Thursday, November 14, 1996)]
[Proposed Rules]
[Pages 58343-58345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-29105]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 61, No. 221 / Thursday, November 14, 1996 /
Proposed Rules
[[Page 58343]]
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 20
Export Reporting for Meat and Meat Products
AGENCY: Foreign Agricultural Service, USDA.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: The U.S. Department of Agriculture (USDA) is soliciting
comments and views on a proposal by the Secretary of Agriculture to
require reporting of export sales of meat (including poultry meat) and
meat products. The proposal responds to a recommendation by the USDA
Advisory Committee on Agricultural Concentration. Under the proposal,
firms involved in exporting meat products could be required to report
detailed information on these sales to the Department on a weekly
basis. Compiled data would be made available to all market
participants, giving farm-level producers and others timely access to
information that many view as necessary to anticipate and plan for
changing market conditions. The intent is to provide broad access to
export sales information and to thereby improve efficiency in livestock
and poultry markets.
DATES: Comments in response to the advance notice should be received on
or before January 13, 1997 to be assured of consideration.
ADDRESSES: Comments should be sent to: Export Sales Reporting Branch,
Trade and Economic Analysis Division, Room 5959--Stop 1025, Foreign
Agricultural Service, U.S. Department of Agriculture, 1400 Independence
Ave. SW, Washington, DC 20250-1025. All written comments received will
be available for public inspection at the above address during business
hours from 8:00 a.m. to 5:00 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Thomas B. McDonald, Jr., Chief, Export
Sales Reporting Branch, Trade and Economic Analysis Division, Foreign
Agricultural Service, U.S. Department of Agriculture, (202) 720-3273;
fax (202) 690-3275.
SUPPLEMENTARY INFORMATION:
Background
The Advisory Committee on Agricultural Concentration (the
Committee), formed by the Secretary of Agriculture to investigate
concentration in the livestock, poultry, and rail sectors, presented
its findings and recommendations on June 6, 1996. Among its findings
was a strong endorsement of the view that widely accessible, timely,
and accurate information is a vital component of a well-functioning,
competitive marketplace.
The Committee made several recommendations in the area of market
information, suggesting improvements that the Department should
consider in the collection and dissemination of information on the
livestock and poultry sectors. The recommendations focused on enhancing
the quality, breadth, and timeliness of information on supply and
demand for livestock and poultry, including information on trade.
With regard to exports, the Committee suggested timely reporting of
volume and price data on all sales to foreign markets of meat and meat
products, including beef, veal, pork, lamb, chicken, and turkey.
Specific recommendations dealt with the timing of the reports (within a
week following the week of the export sale) and with report content:
chilled, frozen, and aggregate total tonnage exported; tonnage of
carcasses and each primal cut by USDA grade where applicable; tonnage
of variety meats and processed meats; and country destinations for
variety meats, processed meats, and boxed primals, by quality grade
when applicable.
The Committee's recommendations for improvements in market
information are, in part, a response to the changing structure of the
livestock and poultry sectors and changes in the types of transactions
within these sectors. These changes have contributed to concerns about
gaps and inequities in information flows to producers. Increasingly,
the sectors are comprised of numerous producer-sellers at the farm
level and a small group of highly concentrated buyers, including
packers, processors, and integrators. Beyond these first-buyers or
handlers are wholesalers, exporters, retailers, and, ultimately,
domestic and foreign consumers.
Many producer-sellers of cattle, hogs, sheep, and poultry contend
that they have far less access than do their first-buyers--the packers,
processors, and integrators--to current market signals that reflect
final demand by consumers. The result, they claim, is an imbalance in
market power, as well as slower, more erratic, and less accurate
adjustments in market prices, production practices, and marketing
strategies as producers try to plan ahead to provide a product with the
characteristics desired by consumers.
The argument, supported by economic theory, is that when producers
or other participants lack adequate and up-to-date information, the
market is less efficient than it could be in recognizing and responding
to changing consumer preferences. Inefficiencies in markets typically
raise costs, which are ultimately passed on to consumers in the form of
higher food costs, or are passed back to producers in terms of lower
prices. Inefficiencies can also translate into a loss of market share
as U.S. consumers shift to alternative products or as foreign consumers
shift to other products or other suppliers.
Among the information gaps that may impede efficient decisionmaking
by producers and others is the lack of timely data on export sales.
Exports represent a growing source of demand in an otherwise slow-
growing domestic market for meat. In the past, the gathering and
dissemination of information about demand for livestock and poultry
products focused mainly on domestic consumption. For the most part, the
United States was a net importer of meat. However, market-opening
agreements, changes within the meat industries, new technologies, and
global supply-demand developments have combined to significantly expand
export opportunities for high-quality U.S. meats over the last 10
years. As a result, the United States is now a net meat exporter.
Export markets account for a rapidly increasing share of U.S. beef,
pork, and poultry production. In the mid-1980's, exports accounted for
less than 2
[[Page 58344]]
percent of annual production of both beef and pork, and less than 4
percent of poultry production. In 1996, exports are forecast to account
for 8 percent of beef production, 6 percent of pork production, and 17
percent of poultry production. These shares are expected to increase
further in 1997. On a value basis, total 1995 exports of red meats
(including variety meats) and poultry meats exceeded $6 billion and
generated a trade surplus of nearly $4 billion.
Among the reasons for the rapid expansion in exports are increased
U.S. industry competitiveness, processing and technological advances
that allow fresh and frozen products to be transported long distances
at affordable prices, and high income growth in many markets. In Asia,
especially, rising incomes have stimulated strong demand for meat and
meat products.
However, many in the industry perceive the trade information
currently available on meats as failing to keep pace with the
increasingly important role that exports play in U.S. livestock and
poultry markets. According to this view, the data fail to provide the
depth, quality, and timeliness needed to anticipate market conditions
and plan production and marketing decisions.
At present, U.S. Customs data on meat export shipments are compiled
and released by the U.S. Bureau of the Census. These statistics are
released 6-10 weeks following the actual shipments and do not report
sales for future delivery. Although this reporting process for official
U.S. trade data documents past export activity and may be used to
discern trends that have emerged in the marketplace, the data lack
timeliness and provide no information on forward sales. Market impacts
are most likely to occur when sales are first contracted and well
before the product is finally shipped. As a result, even instantaneous
reporting of shipment data--unlikely in the immediate future--would
provide only a marginally better indicator of current and future demand
and prices.
Description of the Proposal
Based on the recommendations of the Advisory Committee on
Agricultural Concentration and the perceived need within segments of
the meat industry for accurate, comprehensive, and timely data on
exports, the Department is reviewing statutory authorities and possible
methods for collecting this type of information.
One of the tools currently available to the Secretary of
Agriculture for collecting export data is Section 602 of the
Agricultural Trade Act of 1978, as amended. Under this section,
exporters are now required to report information pertaining to the
export sale of certain specified agricultural commodities, such as
wheat and corn, as well as other agricultural commodities that may be
designated by the Secretary. These reporting requirements are
implemented through the Export Sales Reporting Program of the Foreign
Agricultural Service under regulations codified in 7 CFR Part 20.
Individual firm reports collected under this program are
confidential by law and are released to the public in compilation form
each week following the week of reporting.
Reporting under 7 CFR Part 20 is mandatory. Any person who
knowingly fails to report shall be fined not more than $25,000 or
imprisoned for not more than 1 year, or both.
To add meat and meat products to the Export Sales Reporting Program
as now structured and administered, the following guidelines would
apply:
The reporting week would be Friday through Thursday. The
marketing year would be January 1-December 31.
Individuals and firms would be required to report on a
weekly basis the quantity sold to foreign buyers, the marketing year of
shipment, and the country of destination. Information on prices is not
collected under the Export Sales Reporting Program.
Among the questions that would have to be addressed in implementing
such a reporting program for meats are the units of measure to be used
(pounds, metric tons, etc.), the specific products to be included,
whether reporting should be separate for fresh/chilled versus frozen
product, and the extent of the breakdowns for individual meat cuts and
USDA grades.
Adding meat and meat products to the current Export Sales Reporting
Program would provide more timely and comprehensive data on export
sales. Public availability of this data would reduce perceived
inequities in access to important market information among different
segments of the industry. Similarly, this information could presumably
improve market efficiency by assisting producers and others, including
the government, in making well-informed, timely, and accurate decisions
relating to the orderly flow of meat and meat products in domestic and
export markets.
In addition to presumed benefits, the costs and the reporting
burden to the private sector, as well as costs to the government, must
be among the primary considerations in implementing this or any similar
proposal. It is estimated that between 75 and 125 private firms may be
regularly involved in the sale of meat for export. Many of these firms
are small businesses. USDA estimates that the annual paperwork burden
on these firms will total approximately 7,000 hours. Annual costs to
the Federal Government for collecting, processing, and disseminating
export sales data on meat and meat products on a weekly basis are
estimated at approximately $400,000.
Although the Export Sales Reporting Program is one alternative for
implementing this proposal, similar data on meat exports could also be
collected under other authorities. For example, 7 U.S.C. 2204
authorizes the Secretary of Agriculture to procure information
concerning agriculture through various methods, including the
collection of statistics. Most of this collection is conducted on a
voluntary basis.
A voluntary program would be preferred by many of those who export
meat and who might otherwise be faced with a mandatory requirement for
weekly reporting of export sales. However, other sectors of the meat
industry have expressed serious reservations about reliance on
voluntary reporting in a concentrated industry where relatively few
firms account for the large majority of sales. These parties contend
that the dominant firms already have sufficient information on export
demand and therefore lack the incentive to comply with a voluntary
program, rendering such a program unreliable. The concern is that if
even a few of the larger firms involved in exports did not fully and
consistently cooperate, the resulting data would not be useful for
accurately assessing foreign demand and current and future market
conditions.
Issues for Public Comment
USDA is considering the implementation of a program that would
provide timely and comprehensive data on U.S. export sales of meat
(including poultry meat) and meat products. If implemented under the
authority of Section 602 of the Agricultural Trade Act of 1978, such a
program would require all private firms involved in U.S. export sales
of meat and meat products to report all such sales on a weekly basis.
Accordingly, USDA is seeking comments on the benefits, costs, and
methods of collecting meat export sales information. If comments
confirm the need for this information but indicate substantial problems
or concerns regarding mandatory reporting, alternative approaches will
be considered. The aim of any approach
[[Page 58345]]
should be to ensure (1) that the benefits of the additional information
would justify the costs, and (2) that the best and most useful
information is obtained in a manner that maximizes its value to
industry participants and minimizes the burden of collection and
reporting.
Interested persons are encouraged to comment on the following
issues relating to this proposal:
The extent to which lack of timely export sales
information represents a problem for the meat industry or those within
the industry.
The extent to which the Secretary of Agriculture's
proposal, based on the recommendation of the Advisory Committee on
Agricultural Concentration, responds to the identified problems.
The proper role of the Federal Government in collecting
and reporting export sales information on meat and meat products.
The benefits and costs of the proposal, including benefits
and costs of mandatory reporting by private firms.
The benefits and costs of possible alternative approaches,
including approaches that may include voluntary reporting or other
methods of achieving the identified goals.
Interested persons are also invited to comment on the following
specific considerations involved in implementing an export sales
reporting program for meat and meat products:
The frequency of reporting and the reporting period to be
covered.
The information to be reported, such as the meats and meat
products to be included, the breakdown of cuts and grades, and the
units of measure for reporting (pounds, metric tons, etc.).
The relative benefits and costs of requiring firms to
report all export sales to all country destinations, versus reporting
only sales above a specified threshold volume and/or only sales to
specified leading markets for individual meats.
The specific need, if any, for price information in
addition to export sales volumes.
The way the data should be compiled, summarized, and
reported to the public by USDA.
USDA welcomes comments on these and any related issues.
Signed at Washington, DC, November 6, 1996.
August Schumacher, Jr.,
Administrator, Foreign Agricultural Service.
[FR Doc. 96-29105 Filed 11-13-96; 8:45 am]
BILLING CODE 3410-10-P
