05-3140. United States Standards for Wheat

AGENCY:

Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION:

Final rule.

SUMMARY:

The Grain Inspection, Packers and Stockyards Administration (GIPSA) is revising the United States Standards for Wheat. GIPSA is amending the grain standards to change the definition of contrasting classes in Hard Red Winter wheat and Hard Red Spring wheat such that Hard White wheat is not a contrasting class but is considered as wheat of other classes. GIPSA also is amending the grain standards by adding the sample size used to determine sample grade factors, because the standards should transmit this information. These actions are necessary to ensure market-relevant standards and grades and facilitate the marketing of grain.

EFFECTIVE DATE:

May 1, 2006.

FOR FURTHER INFORMATION CONTACT:

Patrick McCluskey at GIPSA, USDA, STOP 3604, 1400 Independence Avenue, SW., Washington, DC 20250-3604; Telephone [phone]; faxed to [phone].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

The Department of Agriculture is issuing this rule in conformance with Executive Order 12866.

Executive Order 12988

Executive Order 12988, Civil Justice Reform, instructs each executive agency to adhere to certain requirements in the development of new and revised regulations in order to avoid unduly burdening the court system. The final rule was reviewed under this Executive Order and no additional related information has been obtained since then. This final rule is not intended to have a retroactive effect. The United States Grain Standards Act provides in Section 87g that no State or subdivision may require or impose any requirements or restrictions concerning the inspection, weighing, or description of grain under the Act. Otherwise, this final rule will not preempt any State or local laws, regulations, or policies, unless they present any irreconcilable conflict with this rule. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this final rule.

Regulatory Flexibility Act Certification

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) requires agencies to consider the economic impact of each rule on small entities. GIPSA has determined that this final rule will not have a significant economic impact on a substantial number of small entities, as defined in the Regulatory Flexibility Act. Under the provisions of the United States Grain Standards Act, grain exported from the United States must be officially inspected and weighed. Mandatory inspection and weighing services are provided by GIPSA at 33 export facilities. All of these facilities are owned by multi-national corporations, large cooperatives, or public entities that do not meet the requirements for small entities established by the Small Business Administration. GIPSA is amending the grain standards to change the definition of contrasting classes in Hard Red Winter wheat and Hard Red Spring wheat such that Hard White wheat is not a contrasting class but is considered as wheat of other classes. GIPSA also is amending the grain standards by adding the sample size used to determine sample grade factors, because the standards should transmit this information. The two changes made to the wheat standards in this final rule are needed to ensure market-relevant standards and grades. Further, the regulations are applied equally to all entities.

The U.S. wheat industry, including producers (approximately 240,000), handlers (approximately 6,800 domestic elevators), traders (approximately 200 active wheat futures traders), processors (approximately 184 flour mills), merchandisers, and exporters, are the primary users of the U.S. Standards for Wheat and utilize the official standards as a common trading language to market wheat. We assume that some of the entities may be small. Further, the United States Grain Standards Act (USGSA) (7 U.S.C. 87f-1) requires the registration of all persons engaged in the business of buying grain for sale in foreign commerce. In addition, those individuals who handle, weigh, or transport grain for sale in foreign commerce must also register. The USGSA regulations (7 CFR 800.30) define a foreign commerce grain business as persons who regularly engage in buying for sale, handling, weighing, or transporting grain totaling 15,000 metric tons or more during the preceding or current calendar year. At present, there are 90 registrants who account for practically 100 percent of U.S. wheat exports, which for fiscal year (FY) 2002 totaled approximately 24,073,138 metric tons (MT). While most of the 90 registrants are large businesses, we assume that some may be small.

Paperwork Reduction Act

Pursuant to the Paperwork Reduction Act of 1995, the existing information collection requirements are approved under OMB Number 0580-0013. No additional collection or recordkeeping requirements are imposed on the public by this final rule. Accordingly, OMB clearance is not required by section 350(h) of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., or OMB's implementing regulation at 5 CFR part 1320.

GIPSA is committed to compliance with the Government Paperwork Elimination Act, which requires Government agencies, in general, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

Background

GIPSA established the class Hard White wheat on May 1, 1990. In the Final Rule (54 FR 48735), GIPSA stated “that classification by varietal kernel characteristics rather than vitreousness of the kernel is practicable at this time for HWW (sic) and SWW (sic) since only a few hard endosperm white * * * varieties are being produced. GIPSA recognizes that if more hard endosperm varieties are released into the marketplace in the future, the classification system may become less practical.” GIPSA further stated “* * * if clear quality or market distinctions develop * * * it would consider subclasses at a future date”. At that time, a minimum visual color line was established, which was subsequently replaced with a new color line in 1999 (Program Bulletin 99-8). In 2001, environmental conditions caused a darker visual appearance in some varieties of hard white, resulting in a GIPSA decision to suspend the color line for classification purposes (Program Notice 01-06). Under Program Notice 01-06, “All Hard White wheat varieties are considered Hard White wheat regardless of color.”

On June 4, 2003, GIPSA proposed in the Federal Register, (68 FR 33408) to amend the standards for wheat to create subclasses in the class hard white. GIPSA proposed the subclass names of Hard White wheat and Hard Amber White wheat, for wheat meeting and exceeding (darker than) the interpretive color line, respectively. Further, GIPSA proposed changing the definition of Contrasting Classes for Hard Red Winter wheat and Hard Red Spring wheat such that Hard White wheat is not a contrasting class in these two red wheat classes. Further, due to inquiries about the portion size used to determine Maximum Count Limits of Other Material, GIPSA proposed amending the standard to transmit this information.

Comment Review

GIPSA published the proposed rule in the Federal Register on June 4, 2003 (68 FR 33408) with a 60-day comment period ending August 4, 2003. GIPSA received four comments during the comment period. One comment was submitted on behalf of the Hard White Wheat Working Group and the Hard White Wheat Advisory Committee (an aggregated wheat industry group comprised of wheat boards, committees, or commissions of the top ten Hard White wheat producing states; large grain merchandisers; not for profit wheat industry groups; and a private wheat breeding company). One comment each was received from the Kansas Wheat Commission, one wheat producer cooperative, and one individual wheat producer.

On the basis of the comments received and other available information, GIPSA is implementing two of the proposed changes to the wheat standards. The following paragraphs address comments received regarding the proposed changes.

1. Subclass Designation

GIPSA received four comments (one aggregated industry comment in support and three comments in opposition) on the proposal to establish subclasses. The aggregated wheat industry comment supported subclasses. This commenter did note that the proposal concerning adding a subclass to the Hard White wheat class was met with a spirited discussion, both pro and con. The commenter (1) supported the establishment of a subclass within the Hard White Wheat class; (2) recommended changing the subclass names to Bright Hard White Wheat for all hard white wheat that is equal to or lighter than the interpretive color line and Hard White Wheat for all hard white wheat that is darker than the interpretive color line, and continue the use of an interpretive color line and (3) recommended the use of an objective test to determine color line rather than a subjective approach.

One comment opposed to establishment of subclasses in Hard White wheat was received from the Kansas Wheat Commission which represents producers responsible for production of more than 50 percent of all Hard White wheat grown in the United States. The comment stated that since Hard White wheat is moving in the marketplace under the current method of grading, establishing a subclass would create a perception that wheat does not meet the established color line is of lower quality, resulting in discounts to producers. The commenter stated that establishing a subclass would create supply problems in Hard White wheat and also objected to the word “Amber” in the subclass name.

Another opposing commenter felt that because the color differences are environmentally induced, and occur sporadically, grain producers and marketers would be damaged by subclasses, vis-à-vis not having product available to sell to the markets they had worked to develop. Another comment opposing the proposed rule predicted “marketing disruption and chaos resulting in economic loss to American wheat producers is the inevitable result whenever Mother Nature gives us a darker colored crop if these arbitrary rule changes are allowed to become law”.

Taking into account the lack of consensus among stakeholders, GIPSA believes that creating subclasses in Hard White wheat would not be in the best interest of the industry. There is no market need at this time. Based on the comments received and other available information, GIPSA will not establish subclasses in Hard White wheat. GIPSA will, however, maintain the Hard White wheat color line and, as currently done, continue to certify, upon request, that the sample color exceeds or is lighter than the color line. This provides additional information about sample color to satisfy those customers for whom color is important.

2. Contrasting Classes

GIPSA proposed changing the definition of Contrasting Classes for Hard Red Winter wheat and Hard Red Spring wheat such that Hard White wheat is not a contrasting class in these two red wheat classes. One comment was received from the aggregated industry group in support of the proposal. No comment was received opposing the proposal. Therefore as set forth in the proposal, GIPSA is amending the grain standards to change the definition of contrasting classes in Hard Red Winter wheat and Hard Red Spring wheat such that Hard White wheat is not a contrasting class but is considered as wheat of other classes. The grade limit will remain unchanged. For kernel identification, Hard White wheat kernels would be determined by visual assessment and would include the dark colored, amber, white wheat kernels, per the Grain Inspection Handbook, Book II, Chapter 13, Section 13.26. In the case where samples challenge the normal visual inspection process, the alkali test would be utilized to determine kernel color (FGIS-Program Notice 01-07).

3. Sample Size

GIPSA proposed to amend the wheat standard to specify the amount of wheat upon which sample grade factor determinations are made. No comment was received either supporting or opposing the proposal. Earlier versions of the standard contained this information and GIPSA believes the standard should transmit this information. Therefore, as set forth in the proposal, GIPSA will amend the wheat standards to include this information.

Final Action

On the basis of these comments and other available information, GIPSA has decided to revise the wheat standards as proposed with the exception of establishing subclasses in Hard White wheat. This final rule is effective on May 1, 2006, the beginning of the 2006 wheat harvest, and will facilitate domestic and export marketing of wheat.

List of Subjects in 7 CFR Part 810

• Export, grain

For reasons set out in the preamble, 7 CFR Part 810 is amended as follows:

PART 810—OFFICIAL UNITED STATES STANDARDS FOR GRAIN

1. The authority citation for Part 810 continues to read as follows:

Authority: Pub. L. 94-582, 90 Stat. 2867, as amended (7 U.S.C. 71 et. seq.)

2. Section 810.2202 is amended by revising paragraph (b) (1) to read as follows:

810.2202

Definition of other terms.

* * * * *

(b) * * *

(1) Durum wheat, Soft White wheat, and Unclassed wheat in the classes Hard Red Spring wheat and Hard Red Winter wheat.

* * * * *

3. Section 810.2204 is amended by revising paragraph (a) to read as follows:

§ 810.2204

Grades and grade requirements for wheat.

(a) Grades and grade requirements for all classes of wheat, except Mixed wheat.

Grades and Grade Requirements

Grading factors	Grades U.S. Nos.
	1	2	3	4	5
Minimum pound limits of:
Test weight per bushel:
Hard Red Spring wheat or White Club wheat	58.0	57.0	55.0	53.0	50.0
All other classes and subclasses	60.0	58.0	56.0	54.0	51.0
Maximum percent limits of:
Defects:
Damaged kernels
Heat (part of total)	0.2	0.2	0.5	1.0	3.0
Total	2.0	4.0	7.0	10.0	15.0
Foreign material	0.4	0.7	1.3	3.0	5.0
Shrunken and broken kernels	3.0	5.0	8.0	12.0	20.0
Total 1	3.0	5.0	8.0	12.0	20.0
Wheat of other classes: 2
Contrasting classes	1.0	2.0	3.0	10.0	10.0
Total 3	3.0	5.0	10.0	10.0	10.0
Stones	0.1	0.1	0.1	0.1	0.1
Maximum count limits of:
Other material in one kilogram:
Animal filth	1	1	1	1	1
Castor beans	1	1	1	1	1
Crotalaria seeds	2	2	2	2	2
Glass	0	0	0	0	0
Stones	3	3	3	3	3
Unknown foreign substances	3	3	3	3	3
Total 4	4	4	4	4	4
Insect-damaged kernels in 100 grams	31	31	31	31	31
U.S. Sample grade is Wheat that:
(a) Does not meet the requirements for U.S. Nos. 1, 2, 3, 4, or 5; or
(b) Has a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or
(c) Is heating or of distinctly low quality.
1 Includes damaged kernels (total), foreign material, shrunken and broken kernels.
2 Unclassed wheat of any grade may contain not more than 10.0 percent of wheat of other classes.
3 Includes contrasting classes.
4 Includes any combination of animal filth, castor beans, crotalaria seeds, glass, stones, or unknown foreign substance.

* * * * *

Dated: February 15, 2005.

David R. Shipman,

Deputy Administrator, Grain Inspection, Packers and Stockyards Administration.