[Federal Register Volume 64, Number 74 (Monday, April 19, 1999)]
[Rules and Regulations]
[Pages 19019-19022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9518]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 64, No. 74 / Monday, April 19, 1999 / Rules
and Regulations
[[Page 19019]]
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DEPARTMENT OF AGRICULTURE
Grain Inspection, Packers and Stockyards Administration
7 CFR Part 801
RIN 0580-AA62
Official Testing Service for Corn Oil, Protein, and Starch
AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.
ACTION: Final rule.
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SUMMARY: The Grain Inspection, Packers and Stockyards Administration
(GIPSA) is adopting, without change, the provisions of an interim rule
extending the use of the currently approved near-infrared spectroscopy
(NIRS) analyzers in its official inspection program to include testing
of corn for oil, protein, and starch content as official criteria, and
incorporating by reference the Corn Refiners Association Method A-20,
Starch method, into the regulations. GIPSA is offering this service to
meet a market demand for reliable official testing procedures created
by anticipated increases in high-oil corn production.
DATES: Effective May 19, 1999.
The incorporation by reference of Analysis for Starch in Corn,
Method A-20, Second Revision, April 15, 1986, Standard Analytical
Methods of the Member Companies of the Corn Refiners Association, Inc.,
listed in this final rule, is approved by the Director of the Federal
Register as of July 1, 1998.
FOR FURTHER INFORMATION CONTACT: Sharon Vassiliades, GIPSA, USDA, STOP
3649, Washington, D.C. 20250-3649; FAX to (202) 720-4628; or e-mail
svassili@fgisdc.usda.gov; or John Giler, GIPSA, USDA, STOP 3632,
Washington, D.C., 20250-3632; telephone (202) 720-0252; or E-mail
jgiler@fgisdc.usda.gov.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This final rule has been determined to be not significant for
purposes of Executive Order 12866 and, therefore, has not been reviewed
by the Office of Management and Budget.
Executive Order 12988
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This action is not intended to have a retroactive
effect. The United States Grain Standards Act (USGSA), as amended,
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 USGSA. Otherwise, this
final rule will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
final rule. There are no administrative procedures which must be
exhausted prior to any judicial challenge to the provisions of this
final rule.
Effect on Small Entities
The Administrator of 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 (5 U.S.C. 601 et
seq.).
Currently, NIRS analyzers are being used to determine protein in
wheat and protein and oil in soybeans in both domestic and export
markets. This final rule expands the use of currently approved NIRS
analyzers to test corn for oil, protein, and starch content;
establishes tolerances for corn oil, protein, and starch analyzers. The
fees for these services are identical to the fees already established
for wheat protein and soybean oil and protein testing services.
There are 53 official agencies (46 private entities, 7 States)
designated by GIPSA to perform official grain inspection services. In
addition, there are 8 delegated States. Most of the agencies could be
considered small entities under Small Business Administration criteria.
The extent to which these agencies will choose to provide this service
is difficult to quantify because GIPSA is offering this service as
official criteria, on a request basis, and locations where service is
requested infrequently may make arrangements with a neighboring agency
to provide the service (7 CFR 800.196(g)(1)). GIPSA believes that
offering this service would have a beneficial effect on those agencies
electing to provide the service.
For the 1998 crop year, high-oil corn production is estimated at
1.5 million acres. Currently, producers, grain handlers, exporters, and
feedlot operators rely primarily on private laboratories to determine
percent oil, protein, and starch in corn. Further, grain handlers and
exporters are using this information to determine value and premiums.
While exact numbers are not known, it can be assumed that many of the
value-enhanced corn producers, grain handlers, exporters, and feedlot
operators could be considered small entities under Small Business
criteria. The extent to which these entities will request the official
testing of corn for oil, protein, and starch, or the impact of offering
this service through the official system, is difficult to quantify.
However, GIPSA believes users of the inspection system will rely on the
official system to provide reliable testing procedures and accurate
results that the market can rely on to negotiate price, value, and
premium. GIPSA performed 2 million inspections for all grains in fiscal
year 1998.
To recover the cost of providing this service, GIPSA will charge
fees as follows: $1.50 per test when the test is performed at the
applicant's facility; $8.10 per test if the test is performed
elsewhere; and $15.85 for an appeal. These fees are the same as fees
charged for similar tests. The impact on applicants for services will
vary depending upon usage since these tests are provided on a request
basis.
Information Collection and Recordkeeping Requirements
In accordance with the Paperwork Reduction Act of 1995, the
recordkeeping and reporting burden imposed by Part 801 was previously
approved by OMB under control number 0580-0013 and will not be affected
by this final rule.
Background
In its 1997-98 report, Value-Enhanced Corn Quality Report, dated
April 1998, the U.S. Feed Grains Council defined value-enhanced corn as
corn with particular quality characteristics that add end-user value.
Value-enhanced
[[Page 19020]]
corn, also referred to as speciality corn, includes waxy corn, high-
lysine and other essential amino acid corn, hard endosperm corn,
popcorn, sweet corn, white corn, and high-oil corn. Additionally, work
is under way to develop nutritionally dense hybrid corn, which usually
includes some combination of higher-oil, higher protein, and/or altered
amino or fatty acid profiles.
The report estimated that value-enhanced corn is produced on 3.3 to
3.7 million acres (representing 4.5 to 5.1 percent of the U.S.
harvested corn acreage). It projected the U.S. acreage of value-
enhanced corn to remain essentially unchanged, with the exception of
high-oil corn, which is considered the fastest growing value-enhanced
corn produced in the marketplace. Approximately 1.5 million acres of
high-oil corn is projected for the 1998 crop year (up from virtually
none in 1993), and the acreage is expected to more than double in 1999.
The report suggested that high-oil corn will continue to be a
significant part of the value-enhanced corn produced and traded in the
marketplace and the market potential for both high-oil and
nutritionally dense corn is very high, representing the most
significant growth potential for the value-enhanced corn market.
High-oil corn is used by livestock feeders to replace animal fat
previously added to livestock rations and to help the animals gain
weight more quickly. U.S. No. 2 corn typically averages less than 4.5
percent oil content, while high-oil corn can contain up to 8.0 percent.
At this time, depending on the oil content, high-oil corn premiums
range from 5 to 24 cents per bushel. High-oil corn is almost
exclusively grown through contracts with livestock feeders or companies
that will export the grain.
For several years, corn processors and producers have expressed an
interest in having corn officially analyzed for oil, protein, and
starch content. GIPSA received a calibration database from Optimum
Quality Grains, Inc. Optimum Quality Grains, Inc. (a joint venture
between DuPont and Pioneer Hi-Bred), is a source of high-oil corn
germplasm. The calibration database consists of several hundred samples
which represent germplasm from a broad range of sources.
GIPSA used the database to derive calibrations in cooperation with
Optimum Quality Grains, Inc. GIPSA then tested the calibrations'
performance using an additional set of 92 corn samples not used in the
calibration database. The 92 corn samples represent oil, protein, and
starch ranges of 4.0 to 8.5 percent, 8.0 to 12.0 percent, and 64 to 72
percent (dry basis), respectively. Data collected on the 92 corn
samples were statistically analyzed.
The standard deviation of differences (SDD) between NIRS oil values
and official solvent oil extraction reference results was 0.44 percent.
A comparison of near-infrared transmittance (NIRT) analyzer protein
values and official Combustion Nitrogen Analyzer reference results
yielded an SDD of 0.40 percent. The SDD between NIRS analyzer starch
predictions and reference values obtained using the Corn Refiners
Association Method A-20 was 2.20 percent. GIPSA has determined that
this level of accuracy is commensurate with prospective official
customer needs.
To further assure the performance of the NIRT analyzer for corn
measurements, GIPSA established the maintenance tolerances for corn oil
content at 0.20 percent mean deviation from the national
standard NIRT analyzers, which are referenced and calibrated to the
GIPSA solvent oil extraction method; for protein content at
0.30 percent mean deviation from the national standard NIRT
analyzers, which are referenced and calibrated to the Combustion
method, AOAC International Method 992.23; and for starch content at
0.35 percent mean deviation from the national standard NIRT
analyzers, which are referenced and calibrated to the Starch method,
Corn Refiners Association Method A-20.
On June 30, 1998, GIPSA published in the Federal Register (63 FR
35502) an interim rule announcing the immediate availability of
official oil, protein, and starch testing service for corn as official
criteria under the authority of the USGSA. The interim rule also
announced the establishment of performance tolerances between NIRS and
reference methods for oil, protein, and starch determinations and
established fees for the service. Additionally, a 30-day comment period
that ended July 30, 1998, was provided. The fees for the service
established by the interim rule were revised and finalized in a rule
published in the Federal Register December 23, 1998 ( 63 FR 70990), and
became effective February 1, 1999.
Comment Summary
During the 30-day comment period, GIPSA received comments from Dow
AgroSciences, Iowa State University (ISU), Zeltex Inc., and MBS Inc. A
summary of the four comments received is as follows:
(1) Dow AgroSciences, a business unit of the Dow Chemical Co., is a
supplier and developer of biotechnology seeds (e.g., nutritionally
enhanced corn and high oleic/low linolenic canola). Dow AgroSciences
has cooperated with ISU in the development of NIRT corn calibrations.
Their concern is that the GIPSA calibration was developed from Optimum
Quality Grains, Inc., data that did not include their corn.
Consequently, they believe the GIPSA calibration will not accurately
measure their commodity, which could put them at a competitive
disadvantage.
(2) Iowa State University is a public land-grant institution that
provides technical support for NIRS calibration development and
operates a grain quality lab that monitors the quality of Iowa's corn
production. ISU raised questions regarding the acquisition of GIPSA's
calibration data, the representativeness of the calibration data set,
and the performance tolerances for the instrumentation.
(3) Zeltex Inc. is an NIRS company that is developing a whole grain
analyzer which they plan to submit for approval as a moisture meter
under the National Conference of Weights and Measures' National Type
Evaluation Program (NTEP). Zeltex Inc. has been cooperating with ISU on
the development of corn and soybean calibrations for their instrument.
They questioned the calibration development and the approval of a
single instrument for analysis. Zeltex Inc. is concerned that the GIPSA
calibration sample data set was insufficient in size and was not
representative of other corn varieties traded in the marketplace.
Additionally, they are concerned that the GIPSA-approved Foss
instrument will prevent Zeltex Inc. from marketing their NIRS
instrument in the United States.
(4) MBS Inc. is a foundation seed company that develops and markets
new soybean varieties and value-enhanced corn hybrids, with
characteristics targeted for specific end-users and provides NIRS
calibrations and support to the grain and seed industry. They use the
calibrations developed at ISU. MBS Inc.'s comments questioned the
representativeness and source of the calibration data, and questioned
the performance of the calibration. They also questioned how future
calibrations would be developed.
Commenters suggested that GIPSA: (1) withdraw the current proposal;
(2) promote dialogue among all interested parties regarding calibration
development; and (3) develop an open procurement process to obtain
calibration data.
[[Page 19021]]
Comment Review
GIPSA believes that the commenters' suggestion to withdraw the
current proposal is unwarranted. For several years, high-oil corn
processors and producers have expressed an interest in having corn
officially analyzed for oil, protein, and starch content. Future crop
production estimates identified high-oil corn as the fastest growing
value-enhanced corn in the marketplace. For the 1998 crop year, high-
oil corn production is estimated at 1.5 million acres and is expected
to more than double in 1999. Also, the possible introduction of
nutritionally dense hybrid corn makes it necessary to provide the grain
industry with a reliable official testing procedure it can use to
negotiate price, value, and premium. Additionally, GIPSA is offering
this service upon request as official criteria which has no effect on
the grade designation. Consequently, GIPSA believes that offering this
service will enhance the marketability of speciality corn domestically
and for export.
Commenters misinterpreted the information in the interim rule to
suggest the calibrations were developed based on only 92 samples. In
fact, the calibration was based on several hundred samples and
validated with an additional 92 corn samples. Based on its assessment
of samples in the database, GIPSA determined that the calibration
database obtained from Optimum Quality Grains, Inc., was representative
of current samples in the marketing system. When GIPSA explored the
possibility of providing official testing of corn for oil, protein, and
starch content, other NIRS calibration sources (including ISU and MBS
Inc.) were contacted to enlist their cooperation. After reviewing the
available sources of NIRS calibration data, GIPSA decided to use the
Optimum Quality Grains, Inc., database for the following reasons: (1)
Optimum Quality Grains, Inc., is the dominant source of high-oil corn
in the current market; (2) their analytical procedures were reviewed
and were compatible with GIPSA's procedures for calibration
development; (3) their calibration data contained several hundred
samples; and (4) they provided their calibration data to GIPSA at no
cost and without restrictions on its use.
One commenter suggested that, because GIPSA proposes to charge fees
for corn analysis, its choice of the Optimum Quality Grains, Inc.
database for purposes of calibration of near-infrared transmittal
(NIRT) analyzers represents procurement of an outside service by GIPSA.
The commenter suggests that procurement bidding protocol for government
procurements required GIPSA to evaluate other databases or request
derived dry basis calibrations from other databases in an organized
manner following government procurement procedures.
The Office of Federal Procurement Policy Act provides the following
definition of ``procurement,'' in relevant part: ``all stages of the
process of acquiring property or services.'' 41 USCA 403(2). The
Federal Acquisition Regulation (FAR), 48 CFR parts 1-52, which applies
to all ``acquisitions'' (except where expressly excluded) (48 CFR
1.104) defines an ``acquisition,'' in relevant part, as ``the acquiring
by contract with appropriated funds of supplies or services * * * by
and for the use of the Federal Government through purchase or lease, *
* * '' (48 CFR 2.101).
GIPSA's choice of the Optimum Quality Grains, Inc., sample
information as a data standard constitutes neither a ``procurement''
nor an ``acquisition'' under these definitions, and the applicability
of government procurement laws is not predicated on the fact that the
government may charge a fee for a service it may perform. Instead,
GIPSA's choice is part of the policy-making process in the development
of a rule which includes fees for providing official testing services.
The policy basis for the fee charged is based on an already established
fee for a specific method of testing. Therefore, GIPSA chose to use the
Optimum Quality Grains, Inc., database for calibration purposes because
their analytical methods were compatible with the methods employed by
GIPSA. GIPSA's choice of an outside data source for incorporation into
the regulatory action, which is a practice permitted for rulemakings by
the Director of the Federal Register in accordance with 5 U.S.C. 552(a)
and 1 CFR part 1, is part of the rulemaking process outlined under 5
U.S.C. 553 of the Administrative Procedure Act (APA). The adoption of
an outside reference point, standard, scientific study, or other data
as part of the factual basis of a rulemaking cannot be converted from a
question of the sufficiency of the rulemaking under the APA into a
procurement or acquisition of goods and services subject to Federal
statutes applicable to government procurement.
Commenters also indicated that GIPSA's choice of the Optimum
Quality Grains, Inc., database creates a monopoly for the company that
created the method from which GIPSA derived the calibration. GIPSA
disagrees with this comment.
The initial GIPSA calibration is intended to represent the majority
of high oil corn that will be traded in the 1998 crop year. GIPSA's
plan for future calibration development will expand the population of
the database to other sources of value-enhanced corn. GIPSA intends to
provide opportunities for interested parties to supply samples of
material from other germplasm sources for inclusion in its calibration
updates. Consequently, as additional hybrids reach the feed and food
marketing channels, GIPSA will solicit new samples for inclusion in the
calibration data set. GIPSA will then maintain and control the NIRS
corn oil, protein, and starch calibrations in a similar manner as it
maintains and controls other official calibrations (e.g., wheat protein
and soybean oil and protein).
After receiving the already established database, GIPSA derived and
tested the calibrations using its calibration development software and
methodology. Commenters suggested that other calibrations are more
accurate than the GIPSA calibrations. This conclusion appears to have
been based on results from different sample sets. Also, some
assumptions and conclusions reached by ISU regarding the GIPSA
calibration performance were based on limited information. GIPSA's
assessments of the relative accuracies of the available calibrations
support the choice of the calibration based on the Optimum Quality
Grains, Inc., database. To further assure the performance of the NIRT
analyzer for corn measurements, GIPSA is establishing the maintenance
tolerances of 0.20, 0.3, and 0.35
percent mean deviation for oil, protein, and starch, respectively, from
the national standard NIRS instruments, which are referenced and
calibrated to standardized analytical methods.
GIPSA decided to use current instrument technology because it was
already approved and available within the official inspection system. A
single instrument model with a single calibration will provide
significantly better consistency across inspection laboratories than
multiple instrument types or multiple calibrations. This fact has been
demonstrated by GIPSA in the past and was actually supported by one of
the commenters. Further, GIPSA decided to utilize currently approved
equipment because it provided an opportunity to implement a new service
with minimal additional cost to the official inspection program. Cross-
utilizing instruments already available in the official laboratories is
reasonable and cost effective. Allowing multiple
[[Page 19022]]
instrument models and/or calibrations for corn measurements would
greatly increase the cost of the GIPSA standardization program, would
increase the cost of the overall inspection service, and would reduce
the reliability of official inspection results. In addition, GIPSA does
not regulate or control the use of analytical instruments outside of
the official inspection system. Consequently, unofficial inspection
service providers may use other instruments and/or calibrations.
This final rule also incorporates by reference the Corn Refiners
Association Method A-20, Starch method, into the regulations. GIPSA
will use this method as the chemical reference method for determining
the starch content in corn.
GIPSA is required to collect fees for providing official testing
service to cover, as nearly as practicable, GIPSA's costs for
performing the service, including related administrative and
supervisory costs. Testing procedures and time necessary to determine
oil, protein, and starch in corn using the approved NIRT analyzers are
the same as those required for NIRT wheat protein or NIRT soybean oil
and protein determinations. Therefore, GIPSA has decided to collect
fees identical to the fees established for NIRT wheat protein or NIRT
soybean oil and protein testing services. These fees will be $1.50 per
test when the service is performed at an applicant's facility in an
onsite Federal Grain Inspection Service (FGIS) laboratory; $8.10 per
test when an original inspection service is performed at a location
other than an applicant's facility in an FGIS laboratory; and $15.85
per test when an appeal inspection service is performed at a location
other than an applicant's facility in an FGIS laboratory.
GIPSA has carefully considered the comments received regarding this
action and has determined that it is in the best interest of American
agriculture to offer this service. This decision is based on the fact
that (1) the calibration data set represents a significant part of the
1998 corn market, (2) GIPSA plans to expand the calibration data set to
incorporate new germplasm sources as they are released to the
commercial market, (3) future calibration enhancements will remain
under the direct control of GIPSA, and (4) the performance of the NIRT
instruments will continue to satisfy market needs.
Final Action
Value-enhanced corn is produced on 3.3 to 3.7 million acres. It is
projected that the U.S. acreage of value-enhanced corn is to remain
essentially unchanged, with the exception of high-oil corn.
Approximately 1.5 million acres of high-oil corn is projected for the
1998 crop year and is expected to more than double in 1999. High-oil
corn will continue to be a significant part of the value-enhanced corn
produced and traded in the marketplace (the market potential for high-
oil corn is very high, representing the most significant growth
potential for the value-enhanced corn market). Also, the possible
introduction of nutritionally dense hybrid corn makes it necessary to
provide the grain industry with a reliable official testing procedure
it can use to negotiate price, value, and premium. Additionally, GIPSA
is offering this service upon request as an official criteria, which
will have no effect on the grade designation.
For several years, corn processors and producers have expressed an
interest in having corn officially analyzed for oil, protein, and
starch content. When GIPSA explored the possibility of providing
official testing of corn for oil, protein, and starch content, several
NIRS calibration sources (including ISU and MBS Inc.) were contacted to
enlist their cooperation. After reviewing the available sources of NIRS
calibration data, GIPSA decided to use the Optimum Quality Grains,
Inc., database for the following reasons: (1) Optimum Quality Grains,
Inc., is a significant source of high-oil corn in the current market;
(2) their analytical procedures were reviewed and were compatible with
GIPSA's procedures for calibration development; (3) their calibration
data contained several hundred samples; and (4) they provided their
calibration data to GIPSA at no cost and without restrictions on its
use.
The initial GIPSA calibration is intended to represent the majority
of high oil corn that will be traded in 1998. GIPSA's plan for future
calibration development will expand the population of the database to
other sources of value-enhanced corn. GIPSA intends to provide
opportunities for interested parties to supply samples of material from
other germplasm sources for inclusion in its calibration updates.
Consequently, as additional hybrids reach the feed and food marketing
channels, GIPSA will solicit new samples for inclusion in the
calibration data set.
GIPSA has carefully considered the comments received regarding this
action and has determined that it is in the best interest of the corn
industry to offer this service. This decision is based on the fact that
(1) the calibration data set represents a significant part of the 1998
corn market, (2) GIPSA plans to expand the calibration data set to
incorporate new germplasm sources as they are released to the
commercial market, (3) future calibration enhancements will remain
under the direct control of GIPSA, and (4) the performance of the NIRT
instruments will continue to satisfy market needs. GIPSA believes that
offering this service will enhance both the export and domestic
marketability of speciality corn.
Therefore, GIPSA will offer corn oil, protein, and starch testing
services as official criteria under the authority of the USGSA. Upon a
request for service, official inspection personnel will determine corn
oil, protein, and starch content. Percent corn oil, protein, and starch
will be reported to the nearest tenth percent on a dry matter basis
(zero moisture basis) unless another moisture basis is requested.
Based on this and other available information, GIPSA has determined
that the interim rule amending Part 801 as published at 63 FR 35502
will be adopted as the final rule.
List of Subjects in 7 CFR Part 801
Grains, Incorporation by reference.
PART 801--OFFICIAL PERFORMANCE REQUIREMENTS FOR GRAIN INSPECTION
EQUIPMENT
Accordingly, the interim rule amending 7 CFR Part 801 which was
published at 63 FR 35502 on June 30, 1998, is adopted as a final rule
without change.
James R. Baker,
Administrator, Grain Inspection, Packers and Stockyards Administration.
[FR Doc. 99-9518 Filed 4-16-99; 8:45 am]
BILLING CODE 3410-EN-P
