USDA Must End Volume Charge if Rates Increase, UEP Says

May 23, 2019

The Agricultural Marketing Service’s (AMS) higher rates for voluntary grading service, make sense only if the agency follows through on a proposal to eliminate the current administrative volume charge, UEP said in comments filed this week.  The rates are scheduled to go into effect October 1.

AMS issued a proposed rule March 25 to make several changes to grading fees, notably eliminating an administrative volume charge that is now paid by producers with resident graders. Costs previously captured through this charge will be absorbed into a single hourly rate.  The fee for regular scheduled (resident) shell egg grading will increase from $52 an hour to $62. AMS states that this increase is less than it appears due to the elimination of the volume charge. The agency also says an increase is needed to build its reserves, which have fallen below the level that the agency views as prudent.

In its comments, UEP wrote that “the proposed elimination of this charge must be finalized if the agency’s announced increases in hourly fees go into effect October 1 as scheduled.” If the agency does not finalize the elimination by then, “the fee increase should be delayed or eliminated.”

UEP also noted that AMS has discussed increasing hourly rates in some states where a state agency carries out the grading program under contract with the federal government. Those increases should be phased in “over a reasonable period time, to avoid undue costs to producers and minimize the risks that participation in the voluntary grading program might be adversely affected,” UEP said, adding that AMS should also work with state agencies to improve the quality of service where needed.