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Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Rules and Regulations salable quantity and allotment percentage.
The Committees recommended Scotch and Native spearmint oil salable quantities and allotment percentages of 846,684 pounds and 38 percent, and 938,397 pounds and 37 percent, respectively, will match the available supply of each class of spearmint oil to the estimated demand of each, thus avoiding extreme fluctuations in inventories and prices. This rule is similar to regulations issued in prior seasons.
The salable quantities established in this final rule are not expected to cause a shortage of either class of spearmint oil. Any unanticipated or additional market demand for either class of spearmint oil which may develop during the marketing year could be satisfied by an intra-seasonal increase in the salable quantity and corresponding allotment percentage. The Order contains a provision in 985.51 for intra-seasonal increases to allow the Committee the flexibility to respond quickly to changing market conditions.
Under volume regulation, producers who produce more than their annual allotments during the marketing year may transfer such excess spearmint oil to producers who have produced less than their annual allotment. In addition, on December 1 of each year, producers who have not transferred their excess spearmint oil to other producers must place their excess spearmint oil production into the reserve pool to be released in the future, in accordance with market needs and under the Committees direction.
USDA has reviewed the Committees marketing policy statement for the 20212022 marketing year. The Committees marketing policy statement, a requirement whenever the Committee recommends volume regulation, meets the requirements of 985.50 and 985.51.
The establishment of salable quantities and allotment percentages in this rule is expected to fully satisfy anticipated market needs. In determining anticipated market needs, the Committee considered historical sales, as well as changes and trends in production and demand. This rule also provides producers with information regarding the amount of spearmint oil that should be produced for the 2021
2022 season to meet anticipated market demand.
Final Regulatory Flexibility Act Pursuant to requirements set forth in the Regulatory Flexibility Act RFA 5
U.S.C. 601612, the Agricultural Marketing Service AMS has
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considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened.
Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 40 producers and 94 producers of Scotch and Native spearmint oil, respectively, in the regulated production area and approximately 8 spearmint oil handlers subject to regulation under the Order.
Small agricultural service firms are defined by the Small Business Administration SBA as those having annual receipts of less than $30,000,000, and small agricultural producers are defined as those having annual receipts of less than $1,000,000 13 CFR
121.201.
The Committee reported that recent producer prices for spearmint oil have ranged from $12.00 to $17.00 per pound. The National Agricultural Statistics Service NASS reported that the 2019 U.S. season average spearmint oil producer price per pound was $16.90. Spearmint oil utilization for the 20192020 marketing year, as reported by the Committee, was 598,706 pounds and 1,076,906 pounds for Scotch and Native spearmint oil, respectively, for a total of 1,675,612 pounds. Multiplying $16.90 per pound by 20192020
marketing year spearmint oil utilization of 1,675,612 pounds yields a crop value estimate of about $28.3 million.
Given the accounting requirements for the volume regulation provisions of the Order, the Committee maintains accurate records of each producers production and sales. Using the $16.90
average spearmint oil price, and Committee production data for each producer, the Committee estimates that 37 of the 40 Scotch spearmint oil producers and 90 of the 94 Native spearmint oil producers could be classified as small entities under the SBA definition.
There is no third party or governmental entity that collects and reports spearmint oil prices received by spearmint oil handlers. However, the Committee estimates an average spearmint oil handling markup at approximately 20 percent of the price received by producers. Multiplying 1.20
by the 2018 producer price of $16.90

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yields a handler free on board f.o.b.
price per pound estimate of $20.28.
Multiplying this estimated handler f.o.b. price by the 20192020 marketing year total spearmint oil utilization of 1,675,612 pounds results in an estimated handler-level spearmint oil value of $33.98 million. Dividing this figure by the number of handlers 8
yields estimated average annual handler receipts of about $4.25 million, which is well below the SBA threshold for small agricultural service firms.
Furthermore, using confidential data on pounds handled by each handler, and the abovementioned estimated handler price per pound, the Committee reported that it is not likely that any of the eight handlers had 20192020
marketing year spearmint oil sales that exceeded the $30 million SBA
threshold.
Therefore, the majority of producers of spearmint oil may be classified as small entities, and all of the handlers of spearmint oil may be classified as small entities.
This final rule establishes the quantity of spearmint oil produced in the Far West, by class, which handlers may purchase from, or handle on behalf of, producers during the 20212022
marketing year. The Committee recommended this action to help maintain stability in the spearmint oil market by matching supply to estimated demand, thereby avoiding extreme fluctuations in supplies and prices.
Establishing quantities that may be purchased or handled during the marketing year through volume regulation allows producers to coordinate their spearmint oil production with the expected market demand. Authority for this action is provided in 985.50, 985.51, and 985.52 of the Order.
The Committee estimates the total trade demand for the 20212022
marketing year for both classes of oil at 1,748,000 pounds. In addition, the Committee expects that the combined salable carry-in for both classes of spearmint oil will be 957,713 pounds.
As such, the combined required salable quantity for the 20212022 marketing year is estimated to be 790,287 pounds 1,748,000 pounds trade demand less 957,713 pounds carry-in. Under volume regulation, total sales of spearmint oil by producers for the 20212022 marketing year will be held to 2,742,794 pounds the recommended salable quantity for both classes of spearmint oil of 1,785,081 pounds plus 957,713 pounds of carry-in.
This total available supply of 2,742,794 pounds should be more than adequate to supply the 1,748,000

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