Federal Register - June 11, 2021
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Source: Federal Register
Federal Register / Vol. 86, No. 111 / Friday, June 11, 2021 / Rules and Regulations percent thresholds. We estimate that there are approximately nine small yogurt manufacturers. Using data from the International Dairy Foods Association, we estimate that 52 percent of yogurt sales are of lowfat yogurt and 43 percent are of nonfat yogurt. We estimate that the number of small lowfat yogurt manufacturers affected by the Standards of Identity Revocation is approximately one and the number of small nonfat yogurt manufacturers affected by the Standards of Identity Revocation is approximately one. We estimate that there are 8,002 yogurt UPCs and that small yogurt manufacturers comprise roughly 29
percent of all yogurt manufacturers. We estimate that the number of small lowfat yogurt and nonfat yogurt manufacturer UPCs affected by the Standards of Identity Revocation are approximately 350 and approximately 200, respectively, for a total of 550 UPCs.
We estimate reformulation costs using the FDA Reformulation Cost Model Ref.
22. Using the yogurt formula-to-UPC
ratio of 0.759, we estimate that the total number of small yogurt manufacturer formulas subject to reformulation is approximately 417. We estimate reformulation costs by multiplying the
estimated number of formulas by estimates of per-formula costs obtained from the FDA Reformulation Cost Model. We estimate that yogurt manufacturers that need to reduce the fat content of their yogurt will substitute lower fat milk for higher fat milk in the production process and that this is a critical minor ingredient with functional effects, yielding per-formula reformulation costs ranging from approximately $28,530 to $289,845 in 2019 dollars. For a 24-month compliance period, we estimate onetime reformulation costs related to the Standards of Identity Revocation to be between approximately $11.9 million and $120.9 million in 2019 dollars.
Annualized over 10 years at 3 percent, reformulation costs range from approximately $1.4 million to $13.8
million per year. Annualized over 10
years at 7 percent, reformulation costs range from approximately $1.6 million to $16.1 million per year.
Because small yogurt manufacturers must change the fat content of their lowfat yogurt and nonfat yogurt, they also must change the amount of fat declared on the Nutrition Facts Label.
Using the FDA Labeling Cost Model, we estimate the one-time cost of this minor
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label change to be between approximately $1.4 million and $4.1
million in 2019 dollars for small yogurt manufacturers. Annualized over 10
years, labeling costs for small yogurt manufacturers are estimated to be between approximately $161.3 thousand and $471.4 thousand per year, discounted at 3 percent. Labeling costs for small yogurt manufacturers are estimated to be between approximately $188.6 thousand and $551.1 thousand per year, discounted at 7 percent.
In total, for a 24-month compliance period, we estimate that revoking the standards of identity for lowfat yogurt and nonfat yogurt would cost small yogurt manufacturers between approximately $1.4 million and $13.8
million per year in 2019 dollars, or between approximately $1.6 million and $16.1 million per small yogurt manufacturer per year, discounted at 3
percent. Discounted at 7 percent, we estimate that costs are between approximately $1.8 million and $16.6
million per year. Per small yogurt manufacturer range between approximately $1.5 million and $16.9
million per year. These estimates are summarized in table 2.
TABLE 2ANNUAL COSTS TO SMALL FIRMS OF STANDARDS OF IDENTITY REVOCATION
Millions 2019$
Discount rate %
Annual Reformulation Costs
Low $
3
7
3
7
3
7
3
7
Annual Labeling Costs
Annual Costs
Annual Costs Per Small Firm
High $
$1.4
1.6
0.2
0.2
1.5
1.8
1.5
1.8
$13.8
16.1
0.5
0.6
14.2
16.6
14.5
16.9
Notes: 24-month compliance period. One-time reformulation and labeling costs are annualized over 10 years.
4. Summary of Costs The total cost of the final rule to small yogurt manufacturers for a 24-month compliance period is approximately $3.7 million to $25.1 million per year in 2019 dollars, discounted at 3 percent.
Discounted at 7 percent, estimated annual total costs are between approximately $4.2 million and $29.2
million. On a per firm per year basis, estimated costs are between approximately $0.4 million and $2.8
million per small yogurt manufacturer
per year in 2019 dollars, discounted at 3 percent. Discounted at 7 percent, estimated annual total costs are between approximately $0.5 million and $3.2
million per small yogurt manufacturer.
These estimates are summarized in table 3.
TABLE 3ANNUAL COSTS TO SMALL FIRMS OF FINAL YOGURT RULE
Millions 2019$
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Discount rate %
Annual Cost of Claims Requirements
Annual Cost of Standards of Identity Revocation
Annual Cost of Final Yogurt Rule
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3
7
3
7
3
7
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Low $
High $
$1.6
1.8
1.5
1.8
3.1
3.6
$10.4
12.1
14.2
16.6
24.6
28.8
