08-577. Weighing, Feed, and Swine Contractors

AGENCY:

Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION:

Proposed rule.

SUMMARY:

We propose to amend four existing scales and weighing regulations issued under the Packers and Stockyards Act (P&S Act) to ensure that payments by live poultry dealers and swine contractors to poultry and swine production contract growers are based on accurate weighing of both inputs and outputs. We propose to amend a regulation on scale tickets to reduce redundant wording and clarify weighing procedures. We propose to amend a regulation on reweighing to add swine contractors to the list of firms that must comply, and to add feed to the list of items for which reweighing may be requested. We propose to amend two regulations on weighing livestock and poultry to add weighing processes for feed, to add a specific time limit for weighing poultry, and to add swine contractors to the list of firms that must comply with care and promptness requirements.

DATES:

We will consider comments we receive by April 11, 2008.

ADDRESSES:

We invite you to submit comments on this proposed rule. You may submit comments by any of the following methods:

• E-Mail: Send comments via electronic mail to [e-mail].
• Mail: Send hardcopy written comments to Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1643-S, Washington, DC 20250-3604.
• Fax: Send comments by facsimile transmission to: [phone].
• Hand Delivery or Courier: Deliver comments to: Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1643-S, Washington, DC 20250-3604.
• Federal e-Rulemaking Portal: Go to http://www.regulation.gov. Follow the on-line instruction for submitting comments.

Instructions: All comments should refer to the date and page number of this issue of the Federal Register.

Background Documents: Regulatory analyses and other documents relating to this action will be available for public inspection in the above office during regular business hours.

Read Comments: All comments will be available for public inspection in the above office during regular business hours (7 CFR 1.27(b)). Please call GIPSA Management Support Services staff at [phone] to arrange a public inspection of comments.

FOR FURTHER INFORMATION CONTACT:

S. Brett Offutt, Director, Policy and Litigation Division, P&SP, GIPSA, 1400 Independence Ave., SW., Washington, DC 20250, [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

Background

The Grain Inspection, Packers and Stockyards Administration (GIPSA) is responsible for enforcement of the P&S Act. Under authority delegated to us by the Secretary of Agriculture, we are authorized (7 U.S.C. 228) to make those regulations necessary to carry out the provisions of the P&S Act. We propose to amend the following regulations:

• Section 201.49—Requirements regarding scale tickets evidencing weighing of livestock, live poultry and feed,
• Section 201.76—Reweighing,
• Section 201.82—Care and promptness in weighing and handling livestock and live poultry, and
• Section 201.108-1—Instructions for weighing live poultry.

Violations of these sections of the regulations are deemed to be unfair or deceptive practices and constitute violations of § 202 (7 U.S.C. 192) or § 312 (7 U.S.C. 213) of the P&S Act. Packers and swine contractors may be assessed civil penalties of up to $11,000 (7 U.S.C. 193) for each violation of § 202. Market agencies and dealers may be assessed civil penalties of as much as $11,000 (7 U.S.C. 213) for each violation of § 312. Given the consequences for violating these regulations, it is important that these regulations be clear. Therefore, we propose to amend § 201.49 and § 201.108-1 to remove redundant language.

We also propose to revise § 201.82 and § 201.108-1 to prohibit practices that we consider to be unfair and deceptive. Specifically, the practices of

• delaying the weighing of livestock and poultry,
• loading poultry from multiple growers into one trailer load,
• failing to use scales correctly, and
• failing to accurately weigh unused feed at the time it is collected could result in incorrect settlement payments to poultry and livestock growers. The proposed rule would specifically prohibit these unfair and deceptive practices. We also propose to amend paragraphs of § 201.76, 201.82, and 201.108-1 that currently apply only to weighing poultry and/or livestock to also include feed. The intended purpose of all the proposed amendments is to ensure that the weighing process is fair and accurate for all growers. Since growers are paid based on their efficiency in converting feed to livestock and poultry, it is important that both the input (feed) and the output (poultry and livestock) be weighed accurately.

A delay in the weighing of poultry or livestock at the slaughter facility can result in a lower payout to the grower because the delay increases the likelihood of “shrinkage” of the live poultry or livestock due to death, injury, and other avoidable losses. Loading poultry from several growers onto a single trailer load (a “split load”) is one cause of such delays and the resulting avoidable losses. We therefore propose to prohibit loading live poultry from multiple growers onto a single trailer load. There is a related issue involving potentially inaccurate weighing when live poultry dealers and swine contractors pick up unused feed from multiple growers and do not weigh the feed on a certified scale at the time of pick up before combining the feed into a single load. We propose that feed for each grower be weighed on a certified scale and that a scale ticket be generated at the time the feed is picked up from each grower, before proceeding to another grower to pick up unused feed. We also propose new requirements for the correct use of on-board weighing systems to ensure that unused feed is weighed accurately at the time of pickup, although we are not requiring that on-board weighing systems be used. The purpose of these requirements is to ensure that growers are compensated based on an accurate accounting of inputs. Without these new requirements for accurate weighing of unused feed, growers could be compensated incorrectly based on an inaccurate accounting of feed used.

Description of Proposed Amendments

We are proposing amendments that both clarify language in current requirements and that add new requirements to ensure fair and accurate weighing of live poultry, swine, and feed.

The proposed amendments that clarify existing requirements involve scale tickets and live poultry weighing. The current § 201.49, “Requirements regarding scale tickets evidencing weighing of livestock, live poultry, and feed”, contains redundant wording regarding scale tickets issued when weighing livestock, live poultry and feed. The requirements for numbering scale tickets and executing sufficient copies are largely the same for livestock, live poultry, and feed, so we propose to consolidate the general requirements into one new paragraph, § 201.49(a), followed by separate paragraphs containing the specific requirements for livestock, live poultry, and feed. We propose to require that a zero balance be recorded and that the time the zero balance was determined be printed on the scale ticket, consistent with other weighing regulations involving scale tickets. We propose to remove language in § 201.108-1, “Instructions for weighing live poultry,” regarding scale tickets that duplicates language in § 201.49. These proposed amendments would avoid potential confusion caused by redundant language and make more clear the requirements that are unique to each commodity.

We also propose to clarify language requiring the number of the person who performed the weighing service to make it clear we mean the identification number of that individual, rather than the telephone number. We propose to clarify language regarding the requirement to record the license number of the truck and trailer, to clarify that this requirement applies to situations involving weighing just the truck, or just the trailer, or both together. We also propose to make language requiring the license number or other identification number of the truck and/or trailer consistent throughout this section.

The other amendments we propose will impose new requirements on live poultry dealers and swine contractors to ensure more accurate weighing for all growers. The proposed amendments that involve new requirements are as follows:

We propose to amend § 201.76, “Reweighing” to add “swine contractors”, to the list of firms required to comply with this regulation. As defined in the Packers and Stockyards Act, as amended, a swine contractor means any person engaged in the business of obtaining swine under a swine production contract for the purpose of slaughtering the swine or selling the swine for slaughter, if the swine is obtained by the person in commerce; or the swine (including products from the swine) obtained by the person is sold or shipped in commerce (7 U.S.C. 182(a)(12)). We also propose to add “feed” to the list of items for which reweighing is required on request of any authorized representative of the Secretary.

We propose to amend paragraph (a) of § 201.82, “Care and Promptness in Weighing and Handling Livestock and Live Poultry”, to include “swine contractors” in the list of firms required to comply with this regulation. Presently, paragraph (b) of § 201.82 requires that live poultry dealers purchasing poultry under growout contracts obtain the gross weight for each load of poultry immediately upon arrival at the processing plant. We propose to add a sentence at the end of this paragraph to require that the weighing process begin without delay and to establish the time period within which live poultry dealers must complete the weighing process. Finally, we propose to add a new paragraph (c) to § 201.82 to prohibit the use of split transport trailer loads by live poultry dealers. Split loads of live poultry are loads containing flocks from more than one grower. We believe prohibiting split loads will eliminate the likelihood of live poultry dealers failing to weigh each grower's flock promptly. Failure to weigh poultry promptly can result in weight loss, injury, death or other avoidable loss. We also propose minor clarifying language changes to § 201.82, including noting that this section applies whenever the weight of live poultry is a factor in calculating payment to the grower.

We propose to modify § 201.108-1, “Instructions for Weighing Live Poultry”, to require additional procedures to ensure accurate weighing. We also propose to add “feed” to the title of this section. We propose to modify § 201.108-1 to add language to specifically address the weighing of feed at the time of pickup; § 201.108-1 currently addresses only the weighing of live poultry at the time of pickup. The proposed changes add new procedures for weighing unused feed picked up from one or more poultry growers in a single load, including requirements for operating and maintaining onboard weighing systems and requirements for onboard weighing tickets. The proposed changes will ensure that unused feed is accurately weighed at the time it is picked up from the grower. Failure to weigh unused feed at the time of pickup, or failure to use appropriately calibrated equipment, can result in inaccurate estimates of weight and inaccurate payment to the grower. Both feed (inputs) and live poultry (outputs) need to be weighed accurately in order to ensure that growers are compensated fairly.

These proposed amendments all have the same purpose, which is to ensure fair and accurate weighing of feed, poultry, and livestock. We believe that without these amendments, there is significant potential for live poultry dealers and swine contractors to engage in unfair and deceptive practices by delaying the weighing of livestock, using scales incorrectly or inaccurately, and denying requests for reweighing.

Options Considered

The only alternative we considered was to make no changes. We believe these amendments are necessary to make §§ 201.49, 201.76, 201.82 and 201.108-1 consistent with other existing regulations and to carry out provisions of the P&S Act.

Effects on Regulated Entities

There should be little to no additional cost incurred by live poultry dealers because of these amendments. Eliminating split loads may increase to a small extent the number of trips that live poultry dealers make to and from growers' facilities. However, split loads can increase processing inefficiencies at the plant, offsetting any transportation cost savings from split loads. Therefore, the prohibition on split loads should have little or no net monetary consequence for live poultry dealers.

Swine contractors may incur some additional cost to comply with these requirements but we expect the costs to be minor and to be outweighed by the benefits of helping ensure proper weighing and, ultimately, accurate payment for the livestock.

Other changes resulting from these proposed amendments should be inconsequential from a monetary standpoint.

Executive Order 12866 and Regulatory Flexibility Act

The Office of Management and Budget designated this rule as not significant for the purposes of Executive Order 12866.

We have determined that these proposed amendments would not have a significant economic impact on a substantial number of small entities as defined in the Regulatory Flexibility Act (5 U.S.C. 601, et seq.). An initial regulatory flexibility analysis as described in 5 U.S.C. 605 of the Regulatory Flexibility Act is not required or provided here. The proposed amendments would directly affect companies in contractual relationships with swine production contract growers and poultry growers. Most of these entities are slaughterers and processors of swine or poultry with more than 500 employees and do not meet the applicable size standards for small entities presented in the Small Business Administration regulations (13 CFR 121.201). To the extent the proposed amendments do affect small entities, the amendments will not impose substantial new expenses or changes to routine operations.

Small swine production contract growers and poultry growers should benefit indirectly from the proposed amendments, which should provide accurate and fair weighing of their inputs and outputs.

We have considered the effects of this rulemaking action under the Regulatory Flexibility Act and we believe that it will not have a significant impact on a substantial number of small entities. We welcome comments on the cost of compliance with this rule, and particularly on the impact of this proposed rule on small entities. We also welcome comments on alternatives to the proposed rule that could achieve the same purpose with less cost or burden.

Executive Order 12988

These proposed amendments have been reviewed under Executive Order 12988, Civil Justice Reform. These actions are not intended to have a retroactive effect. This rule will not pre-empt State or local laws, regulations, or policies, unless they present an irreconcilable conflict with the amendments. The provisions of these amendments will not require administrative procedures be exhausted prior to judicial challenges.

Paperwork Reduction Act

These proposed amendments do not contain new information collection requirements or changes to existing information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).

E-Government Act Compliance

GIPSA is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

List of Subjects in 9 CFR Part 201

• Reporting and recordkeeping requirements
• Poultry and poultry products
• Trade practices

For the reasons set forth in the preamble, we propose to amend 9 CFR part 201 to read as follows:

PART 201—[AMENDED]

1. The authority citation for part 201 continues to read as follows:

Authority: 7 U.S.C. 222 and 228; 7 CFR 2.22 and 2.81.

2. Revise § 201.49 to read as follows:

§ 201.49

Requirements regarding scale tickets evidencing weighing of livestock, live poultry, and feed.

(a) When livestock, poultry or feed is weighed for the purpose of purchase, sale, acquisition, or settlement, a scale ticket must be issued which must be serially numbered and used in numerical sequence. Sufficient copies must be executed to provide a copy to all parties to the transaction. Unused and partially executed scale tickets must not be left exposed or accessible to other parties and must be kept under lock when the weigher is not at the scale. In instances where the weight values are automatically recorded directly on the account of purchase, account of sale, or other basic transaction record, this record may serve in place of a scale ticket.

(b) Livestock. When livestock is weighed for the purpose of purchase or sale, or when livestock is purchased on a carcass weight or carcass grade and weight basis, the hot carcass weights must be recorded using a scale equipped with a printing device, and such printed weights must be retained as part of the person or firm's business records to substantiate settlement on each transaction. In instances where the weight values are automatically recorded directly on the account of purchase, account of sale, or other basic transaction record, this record may serve in place of a scale ticket. Scale tickets or other basic transaction records issued under this section must show:

(1) The name and location of the agency performing the weighing service;

(2) The date of the weighing;

(3) The name of the buyer and seller or consignor, or a designation by which they may be readily identified;

(4) The number of head;

(5) Kind of livestock;

(6) Actual weight of each draft of livestock; and

(7) The name, initials, or identification number of the person who weighed the livestock, or if required by State law, the signature of the weigher.

(c) Poultry. When live poultry is weighed for the purpose of purchase, sale, acquisition, or settlement by a live poultry dealer, the scale ticket or other basic transaction record must show:

(1) The name of the agency performing the weighing service;

(2) The name of the live poultry dealer;

(3) The name and address of the grower or seller, and purchaser;

(4) The name, initials, or identification number of the person who weighed the poultry, or if required by State law, the signature of the weigher;

(5) The location of the scale;

(6) The zero balance for both the gross weight and tare weight;

(7) The date and time zero balance was determined;

(8) The gross weight, tare weight, and net weight;

(9) The date and time gross weight and tare weight are determined;

(10) The number of poultry weighed;

(11) The weather conditions;

(12) Whether the driver was on or off the truck at the time of weighing, if applicable; and

(13) The license number or other identification numbers on the truck and trailer, if weighed together, or trailer if only the trailer is weighed; provided, that when live poultry is weighed on a scale other than a vehicle scale, the scale ticket or other basic transaction record need not show the information specified in paragraphs (c)(11) and (c)(12) of this section.

(d) Feed. Whenever feed is weighed and the weight of the feed is a factor in determining payment or settlement to a livestock producer or poultry grower, the scale ticket or other basic transaction record must show:

(1) The name of the agency performing the weighing service, or the name and location of the firm responsible for supplying the feed;

(2) The name and address of the livestock producer or poultry grower;

(3) The name, initials or identification number of the person who weighed the feed, or if required by State law, the signature of the weigher;

(4) The location of the scale;

(5) The zero balance for both the gross and tare, when applicable;

(6) The date and time zero balance was determined, when applicable;

(7) The gross weight, tare weight, and net weight of each lot assigned to an individual producer or grower, if applicable;

(8) The date and time gross weight and, if applicable, tare weight, are determined;

(9) The identification of each lot assigned to an individual producer or grower by vehicle or trailer compartment number and seal number, if applicable;

(10) Whether the driver was on or off the truck at the time of weighing, if applicable; and

(11) The license number or other identification numbers on the truck and trailer, if weighed together, or trailer if only the trailer is weighed, if applicable.

3. Revise § 201.76 to read as follows:

§ 201.76

Reweighing.

Stockyard owners, market agencies, dealers, packers, swine contractors and live poultry dealers must reweigh livestock, livestock carcasses, and live poultry or feed on request of any authorized representative of the Secretary.

4. Revise § 201.82 to read as follows:

§ 201.82

Care and promptness in weighing and handling livestock and live poultry.

(a) Each stockyard owner, market agency, dealer, packer, swine contractor and live poultry dealer must exercise reasonable care and promptness with respect to loading, transporting, holding, yarding, feeding, watering, weighing, or otherwise handling livestock, or live poultry to prevent waste of feed, shrinkage, injury, death or other avoidable loss.

(b) Whenever live poultry is obtained under a poultry growing arrangement and the weight of the live poultry is a factor in calculating payment to the grower, the poultry must be transported promptly after loading. The process of obtaining the gross weight must commence immediately upon arrival at the processing plant, holding yard, or other scale normally used for such purpose. This process, which includes but is not limited to fueling, uncoupling the trailer, changing the road tractor to a yard tractor or weighing the trailer only, must be conducted without delay; specifically, the time period between arrival and completion of the weighing process must not exceed thirty (30) minutes.

(c) Live poultry dealers must not place poultry from multiple growers on a single live poultry transport trailer or other live poultry transport equipment, creating what is commonly referred to as a “split load.”

5. Amend § 201.108-1 to:

a. Revise the heading;

b. Revise the first sentence of the introductory text;

c. Revise paragraph (a)(1);

d. Remove paragraph (a)(7);

e. Remove the word “sensitiveness” and add in its place the word “sensitivity” in (b)(5);

f. Add paragraphs (c) (1) (v) and (vi);

g. Add paragraph (d) (3);

h. Remove paragraph (e) (2) and redesignate paragraphs (e)(3) and (4) as paragraphs (e)(2) and (3).

§ 201.108-1

Instructions for weighing live poultry or feed.

Live poultry dealers who operate scales on which live poultry or feed is weighed for purposes of purchase, sale, acquisition, or settlement are responsible for the accurate weighing of such poultry or feed. * * *

(a) Balancing the empty scale. (1) The scale shall be maintained in zero balance at all times. The empty scale shall be balanced each day before weighing begins and thereafter its zero balance shall be verified before any poultry or feed is weighed. The time and date the empty scale is balanced or its zero balance verified must be mechanically printed on the scale ticket or other basic transaction record. In addition, the zero balance of the scale shall be verified whenever a weigher resumes weighing duties after an absence from the scale.

* * * * *

(c) * * *

(1) * * *

(v) A feed hopper attached to an electronic digital scale must be empty of feed and the electronic digital scale must be balanced at zero prior to first weighment for each grower or per truckload, whichever is applicable. The date and time the empty hopper scale is balanced or its zero balance verified must be mechanically printed on the scale ticket or other permanent record that must be attached to the grower's copy of the scale ticket. Further, the hopper must be empty and balanced at zero prior to each weighment.

(vi) An onboard weighing system must be level and locked in position and zero balanced prior to weighing. The date and time the onboard scale is balanced or its zero balance verified must be mechanically printed on the scale ticket or other permanent record that must be attached to the grower's copy of the scale ticket. When more than one grower's feed is weighed, the proceeding grower's gross weight can be used for the next grower's tare weight, and can be repeated until the unit is full.

* * * * *

(d) * * *

(3) When returned feed from a contract poultry grower is picked up and weighed on an onboard weighing system, the weight of the feed must be recorded and a ticket printed. That weight must be used as the tare weight when feed from another contract poultry grower is picked up on the same load. The procedure must be followed each time another grower's feed is added to the load.

* * * * *

James E. Link,

Administrator, Grain Inspection, Packers and Stockyards Administration.