SupportingStatement_AMS-LS-11-0049 3-23-12

SupportingStatement_AMS-LS-11-0049 3-23-12.docx

Livestock Mandatory Reporting Program; Establishment of the Reporting Regulation for Wholesale Pork

OMB: 0581-0279

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2012-08-22 - New collection (Request for a new OMB Control Number)

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2012 SUPPORTING STATEMENT

Livestock Mandatory Reporting Program; Establishment of the Reporting Regulation for Wholesale Pork

OMB NO. 0581-NEW
Proposed Rule

A. Justification.

1. EXPLAIN THE CIRCUMSTANCES THAT MAKE THE COLLECTION OF INFORMATION NECESSARY. IDENTIFY ANY LEGAL OR ADMINISTRATIVE REQUIREMENTS THAT NECESSITATE THE COLLECTION.

Livestock and Grain Market News provides a timely exchange of accurate and unbiased information on current marketing conditions (supply, demand, prices, trends, movement, and other information) affecting trade in livestock, meats, grain, and wool.

Administered by the U.S. Department of Agricultures (USDA) Agricultural Marketing Service (AMS), this nationwide market news program is conducted in cooperation with approximately 25 State departments of agriculture. Working closely with the States as an equal partner, USDA provides technical support and supervision to assure nationwide standardized application of USDA grades and uniform trading terminology.

Information is collected under the authority of the Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627), Section 203(g), and in accordance with 5 CFR 1320.6, Part 59, which directs and authorizes the collection and dissemination of marketing information including adequate outlook information, on a market area basis, for the purpose of anticipating and meeting consumer requirements aiding in the maintenance of farm income and to bring about a balance between production and utilization. The Livestock Mandatory Reporting Act was enacted into law on October 22, 1999 (Pub. L. 106-78) as an amendment to the Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627, 1635-1638d). The purpose of the 1999 Act was to establish a program of information regarding the marketing of cattle, swine, lambs, and the products of such livestock that provides information that can be readily understood by producers; improves the price and supply reporting services of USDA; and encourages competition in the marketplace for livestock and livestock products. On December 1, 2000, AMS published the final rule to implement the LMR program as required by the 1999 Act (65 FR 75464) with an effective date of January 30, 2001. This effective date was subsequently delayed until April 2, 2001 (66 FR 8151).

The statutory authority for the program lapsed on September 30, 2005. At that time, AMS sent letters to all packers required to report under the 1999 Act requesting they continue to submit information voluntarily. In October 2006, Congress passed the Livestock Mandatory Reporting Reauthorization (2006 Reauthorization Act) (Pub. L. 109-296). The 2006 Reauthorization Act re-established the regulatory authority for the continued operation of the LMR program through September 30, 2010, and separated the reporting requirements for sows and boars from barrows and gilts, among other changes. On May 16, 2008, USDA published the final rule to re-establish and revise the LMR program (73 FR 28606). The rule incorporated the swine reporting changes contained within the 2006 Reauthorization Act, as well as enhanced the program’s overall effectiveness and efficiency based on AMS’ experience in the administration of the program. The LMR final rule became effective on July 15, 2008.

On September 28, 2010, the 2010 Reauthorization Act (Pub. L. 111-239), reauthorized LMR for an additional 5 years and added a provision for mandatory reporting of wholesale pork cuts. The 2010 Reauthorization Act directed the Secretary to engage in negotiated rulemaking to make required regulatory changes for mandatory wholesale pork reporting and establish a negotiated rulemaking committee to develop these changes.

2. INDICATE HOW, BY WHOM, AND FOR WHAT PURPOSE THE INFORMATION IS TO BE USED. EXCEPT FOR A NEW COLLECTION, INDICATE THE ACTUAL USE THE AGENCY HAS MADE OF THE INFORMATION RECEIVED FROM THE CURRENT COLLECTION.

The information collection and recordkeeping requirements in this regulation are essential to operating a mandatory program of livestock and livestock products reporting. Using the information submitted by packers, AMS publishes over 100 daily, weekly, and monthly reports covering market transactions for fed cattle, swine, lamb, beef, and lamb meat. Based on the information available, AMS estimates that reports issued under the Act cover approximately 95% of the hog market, 79% of the cattle market, 95% of the slaughter hogs, 55% of the sheep market, 39% of the boxed lamb market, and 93% of the boxed beef market. AMS market reports are utilized by producers and others in the marketing chain to formulate contracts and make marketing decisions, and by other Government Agencies to make policy decisions, settle trade disputes, and in a variety of other functions.

The required information is to be reported twice per day. Collection will be accomplished through electronic means. The collected information will form the basis for published market reports utilized by the livestock industry when making marketing decisions. The required information is only available directly from those entities required to report under the Act and by these proposed regulations and exists nowhere else.

3. DESCRIBE WHETHER, AND TO WHAT EXTENT, THE COLLECTION OF INFORMATION INVOLVES THE USE OF AUTOMATED, ELECTRONIC, MECHANICAL, OR OTHER TECHNOLOGICAL COLLECTION TECHNIQUES OR OTHER FORMS OF INFORMATION TECHNOLOGY, E.G. PERMITTING ELECTRONIC SUBMISSION OF RESPONSES, AND THE BASIS FOR THE DECISION FOR ADOPTING THIS MEANS OF COLLECTION. ALSO DESCRIBE ANY CONSIDERATION OF USING INFORMATION TECHNOLOGY TO REDUCE BURDEN.

The Act stipulates that electronic data collection means must be used to the extent practicable as determined by the Secretary in order to meet the regulatory objectives. To meet this requirement, the Livestock Mandatory Price Reporting System (LMPRS) is a database management system that was developed to automate the processes for AMS to implement the Act. This system electronically accepts data from the livestock industry, mainly meat packing plants, archives, translates and analyzes the data, as well as produces and stores aggregated data and creates aggregated reports for distribution to the public via the Internet. The system also includes replication of the data to a backup site for continuity of operations.

The LMPRS is designed to accept proprietary trade data from authorized plants on a daily basis. This data arrives in the system in a comma delimited value (CSV) format and is transmitted from the plant site via a secure web transmission process. Using this utility, a meat packing plant creates the necessary data files (based on USDA file formats as shown in LS-89, for example) utilizing their own information systems. The LMPR electronic data transfer allows the user to upload a comma-delimited data file to the USDA from the USDA-AMS web page, which is accessed through the plant site workstation browser, a valid user ID and password and a validated PKI certificate.

This data is then loaded into the LMPRS database by AMS reporters through a web utility used to import and review plant data prior to generating any market news aggregated reports.

As an alternative, AMS will allow respondents to access an AMS maintained website whereby the information can be entered on web-based input screens. Once the information has been entered, the form will be submitted to AMS where the data will be uploaded to the AMS database system.

The required information is kept and maintained as a matter of normal business practice by the respondents, normally in electronic recordkeeping systems. Allowing electronic submission minimizes the cost burden to them.

4. DESCRIBE EFFORTS TO IDENTIFY DUPLICATION. SHOW SPECIFICALLY WHY ANY SIMILAR INFORMATION ALREADY AVAILABLE CANNOT BE USED OR MODIFIED FOR USE FOR THE PURPOSE(S) DESCRIBED IN ITEM 2 ABOVE.

The data collected by this program is not available from any other source.

5. IF THE COLLECTION OF INFORMATION IMPACTS SMALL BUSINESSES OR OTHER SMALL ENTITIES (ITEM 5 OF OMB FORM 83-I), DESCRIBE THE METHODS USED TO MINIMIZE BURDEN.

For any calendar year, any federally inspected swine plant which slaughtered an average of 100,000 head of swine a year for the immediately preceding 5 calendar years, and any packing firm that slaughtered at least 200,000 sows and/or boars on average during the preceding 5 years, are required to report information. Additionally, any swine plant that did not slaughter swine during the immediately preceding 5 calendar years is required to report if the Secretary determines that the plant should be considered a packer based on the capacity of the processing plant. This accounts for approximately 56 out of 611 swine plants or 9.2 percent of all federally inspected swine plants. Fully 90.8 percent of all swine plants in the U.S. are exempted by this rule from reporting information.

In developing these regulations, AMS and the negotiated rulemaking committee did consider other means by which the objectives of this rule could be accomplished, including reporting the required information by telephone, facsimile and regular mail. None of these were believed to be viable alternatives by AMS or by persons who would be subject to report under the proposed regulations. However, AMS may provide for an exception to electronic reporting in emergency cases such as power failures or loss of Internet accessibility or in cases when an alternative is agreeable to AMS and the reporting entity. AMS will also provide web-based input screens as an alternative option for entities to use when submitting information.

AMS cannot envision an alternative to the method of data transmission that would be less burdensome to small businesses. To assist the industry in achieving compliance with this rule, AMS will provide assistance and training to covered entities as needed to ensure that they have been given the technical information necessary to comply with the electronic data transmission requirements. Further,

for sow and boar plants, the Committee (including AMS) agreed that reporting once per day was practical. Separation of the reporting requirements for sow and boar product is being proposed to minimize the reporting burden on sow and boar packers where possible and to make the information published for sow and boar products more meaningful to the industry. Many of these entities would, in contrast to their counterparts who are larger and slaughter barrows/gilts primarily, would be considered small businesses.

6. DESCRIBE THE CONSEQUENCE TO FEDERAL PROGRAM OR POLICY ACTIVITIES IF THE COLLECTION IS NOT CONDUCTED OR IS CONDUCTED LESS FREQUENTLY, AS WELL AS ANY TECHNICAL OR LEGAL OBSTACLES TO REDUCING BURDEN.

The information collection is required by the Act. While the option to not collect is specifically ruled out by the Act, AMS has sought ways to reduce the burden on respondents by addressing the manner in which information collection is carried out (item 5, above).

7. EXPLAIN ANY SPECIAL CIRCUMSTANCES THAT WOULD CAUSE AN INFORMATION COLLECTION TO BE CONDUCTED IN A MANNER:

- REQUIRING RESPONDENTS TO REPORT INFORMATION TO THE AGENCY MORE OFTEN THAN QUARTERLY;

The Act requires packers to report to the Secretary information concerning the price and volume of wholesale pork cuts, as the Secretary determines is necessary and appropriate. The affected industry, as part of the negotiated rulemaking committee that developed these proposed regulations, deemed that twice per day submission was practical for developing meaningful, relevant, and timely market reports.

- REQUIRING RESPONDENTS TO PREPARE A WRITTEN RESPONSE TO A COLLECTION OF INFORMATION IN FEWER THAN 30 DAYS AFTER RECEIPT OF IT;

The need for real time information for the fast changing market of wholesale prok requires that Market News collect, generate and disseminate reports on a daily and weekly basis.

- REQUIRING RESPONDENTS TO SUBMIT MORE THAN AN ORIGINAL AND TWO COPIES OF ANY DOCUMENT;