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Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Rules and Regulations
no later than 20 days after the date of the entry of the ruling.
Pursuant to 985.50, 985.51, and 985.52, the Order requires the Committee to meet each year to consider supply and demand of spearmint oil and to adopt a marketing policy for the ensuing marketing year. When such considerations indicate a need to establish or to maintain stable market conditions through volume regulation, the Committee recommends salable quantity limitations and producer allotments to regulate the quantity of Far West spearmint oil available to the market.
According to 985.12, salable quantity is the total quantity of each class of oil Scotch or Native that handlers may purchase from, or handle on behalf of, producers during a given marketing year. The total industry allotment base is the aggregate of all allotment bases held individually by producers as prescribed under 985.53d1. The total allotment base is revised each year on June 1 to account for producer base being lost as a result of the bona fide effort production provision of 985.53e and additional base made available pursuant to the provisions of 985.153.
Each producers prorated share of the salable quantity of each class of oil, or the annual allotment as defined in 985.13, is calculated by using an allotment percentage. The allotment percentage is derived by dividing the salable quantity of each class of spearmint oil by the total industry allotment base for that same class of oil.
The Committee met on October 14, 2020, to consider its marketing policy for the 20212022 marketing year. At that meeting, the Committee determined that, based on the current market and supply conditions, volume regulation for both classes of oil would be necessary. With a 61 vote, the Committee recommended a salable quantity and allotment percentage for Scotch spearmint oil of 846,684 pounds and 38 percent. The member voting in opposition to the recommendation favored volume regulation but supported an unspecified lower salable quantity and allotment percent than what was recommended. The Committee voted six in favor, with one abstention, to recommend a salable quantity and allotment percentage for Native spearmint oil of 938,397 pounds and 37 percent. The member abstaining did not give a reason.
This action establishes the amount of Scotch and Native spearmint oil that handlers may purchase from, or handle on behalf of, producers during the 20212022 marketing year, which
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begins on June 1, 2021. Salable quantities and allotment percentages have been placed into effect each season since the Orders inception in 1980.
Scotch Spearmint Oil The Committee recommended a Scotch spearmint oil salable quantity of 846,684 pounds and an allotment percentage of 38 percent for the 2021
2022 marketing year. The 20212022
marketing year salable quantity of 846,684 pounds is 8,355 pounds more than the 20202021 marketing year salable quantity of 838,329 pounds. The allotment percentage, recommended at 38 percent for the 20212022 marketing year, is the same as the percentage in effect the previous year. The total allotment base for the coming marketing year is estimated to be 2,228,116
pounds. This figure represents a onepercent increase over the 20202021
marketing year total allotment base of 2,206,055 pounds. The salable quantity 846,684 pounds is the product of total allotment base 2,228,116 pounds times the allotment percentage 38 percent.
The Committee considered several factors in making its recommendation, including the current and projected future supply, estimated future demand, production costs, and producer prices.
The Committees recommendation also accounts for the established acreage of Scotch spearmint, consumer demand, existing carry-in, reserve pool volume, and increased production in competing markets.
According to the Committee, as costs of production have increased and spearmint oil prices have decreased, many producers have forgone new plantings of Scotch spearmint. This has resulted in a significant decline in production of Scotch spearmint oil in recent years. Production has decreased from 1,113,346 pounds produced in 2016 to an estimated 498,322 pounds of Scotch spearmint oil produced in 2020.
Industry reports indicate that trade demand for Far West Scotch spearmint oil has decreased over the past five years as international markets for spearmint-flavored products have slowed. Sales of Far West Scotch spearmint oil have averaged 740,216
pounds per year over the last five years but have averaged only 645,965 pounds over the last three years. In addition to declining spearmint oil demand, increasing production of Scotch spearmint oil in competing markets, most notably by Canadian producers, has put additional downward pressure on the Far West Scotch spearmint oil market.
Given the general decline in demand and anticipated market conditions for
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the coming year, the Committee estimates that Scotch spearmint oil trade demand for the 20212022
marketing year trade will be 623,000
pounds, which is 19,000 pounds higher than the prior year estimate, but still down from the three-year average of actual sales. Should the volume regulation levels established by this action prove insufficient to adequately supply the market, the Committee has the authority to recommend intraseasonal increases, as it has in previous marketing years.
The Committee calculated the minimum salable quantity of Scotch spearmint oil that will be required during the 20212022 marketing year 359,424 pounds by subtracting the estimated salable carry-in on June 1, 2021, 263,576 pounds from the estimated trade demand 623,000
pounds. This minimum salable quantity represents the estimated minimum amount of Scotch spearmint oil that will be needed to satisfy estimated trade demand for the coming year. To ensure that the market will be fully supplied, the Committee recommended a 20212022 marketing year salable quantity of 846,684 pounds.
The recommended salable quantity, combined with an estimated 263,576
pounds of salable quantity carried in from the previous year, will yield a total available supply of 1,110,260 pounds of Scotch spearmint oil for the 20212022
marketing year. With the recommended salable quantity and current market environment, the Committee estimates that as much as 487,260 pounds of salable Scotch spearmint oil could be carried into the 20222023 marketing year.
Salable carry-in is the primary measure of excess spearmint oil supply under the Order, as it represents overproduction in prior years that is currently available to the market without restriction. Under volume regulation, spearmint oil that is designated as salable continues to be available to the market until it is sold and may be marketed at any time at the discretion of the owner. Salable quantities established under volume regulation over the last four seasons have exceeded sales, leading to a gradual build of Scotch spearmint oil salable carry-in.
The Committee estimates that there will be 263,576 pounds of salable carryin of Scotch spearmint oil on June 1, 2021. If current market conditions are maintained and the Committees projections are correct, salable carry-in will increase to 487,260 pounds at the beginning of the 20222023 marketing year. This level will be above the
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