[Federal Register: February 6, 2004 (Volume 69, Number 25)]
[Rules and Regulations]
[Page 5679-5682]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06fe04-1]
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Rules and Regulations
Federal Register
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[[Page 5679]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 905
[Docket No. FV04-905-1 IFR]
Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida;
Relaxing Limits on the Volume of Small Red Seedless Grapefruit
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This rule relaxes weekly limits on small red seedless
grapefruit entering the fresh market under the marketing order covering
oranges, grapefruit, tangerines, and tangelos grown in Florida (order).
The Citrus Administrative Committee (Committee), which locally
administers the order, recommended this action. This rule relaxes the
weekly limitation set for shipments of small-sized red seedless
grapefruit entering the fresh market from 40 percent to 50 percent
during the last week of the 22-week regulatory period. This action
provides an additional volume of small red seedless grapefruit to
address current marketing conditions without saturating all markets
with these small sizes. This rule should help stabilize the market and
improve grower returns.
DATES: Effective February 9, 2004; comments received by February 10,
2004, will be considered prior to issuance of a final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC
20250-0237; fax: (202) 720-8938, or e-mail: moab.docketclerk@usda.gov.
All comments should reference the docket number and the date and page
number of this issue of the Federal Register and will be made available
for public inspection in the Office of the Docket Clerk during regular
business hours, or can be viewed at: http://www.ams.usda.gov/fv/moab.html
.
FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast
Marketing Field Office, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter
Haven, Florida 33884-1671; telephone: (863) 324-3375, Fax: (863) 325-
8793; or George Kelhart, Technical Advisor, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW, STOP 0237, Washington, DC 20250-0237;
telephone: (202) 720-2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington, DC 20250-0237; telephone (202) 720-
2491, fax: (202) 720-8938, or e-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 84 and Marketing Order No. 905, both as amended (7 CFR
part 905), regulating the handling of oranges, grapefruit, tangerines,
and tangelos grown in Florida, hereinafter referred to as the
``order.'' The marketing agreement and order are effective under the
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), hereinafter referred to as the ``Act.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
This rule will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule relaxes limits on the volume of small red seedless
grapefruit entering the fresh market. This rule allows for an
additional volume of sizes 48 and 56 fresh red seedless grapefruit to
be shipped during the last week of the 22-week percentage of size
regulation period for the 2003-04 season. This rule supplies an
additional volume of small red seedless grapefruit to address current
marketing conditions without saturating all markets with these small
sizes. This action should help stabilize the market and improve grower
returns.
Section 905.52 of the order provides authority to limit shipments
of any grade or size, or both, of any variety of Florida citrus. Such
limitations may restrict the shipment of a portion of a specified grade
or size of a variety. Under such a limitation, the quantity of such
grade or size a handler may ship during a particular week is
established as a percentage of the total shipments of such variety
shipped by that handler during a prior period, established by the
Committee and approved by USDA.
Section 905.153 of the regulations provides procedures for limiting
the volume of small red seedless grapefruit entering the fresh market.
The procedures specify that the Committee may recommend that only a
certain percentage of sizes 48 and 56 red seedless grapefruit be made
available for shipment into fresh market channels for any week or weeks
during the regulatory period. The regulation period is 22 weeks long
and begins the third Monday in September. Under such a limitation, the
quantity of sizes 48 and 56 red seedless grapefruit that may be shipped
by a handler during a regulated week is
[[Page 5680]]
calculated using the recommended percentage. By taking the recommended
weekly percentage times the average weekly volume of red seedless
grapefruit handled by such handler in the previous five seasons,
handlers can calculate the total volume of sizes 48 and 56 they may
ship in a regulated week.
This rule relaxes limits on the volume of sizes 48 (3\9/16\ inches
minimum diameter) and 56 (3\5/16\ inches minimum diameter) red seedless
grapefruit entering the fresh market by increasing the weekly
percentage established for week 22 (February 9 through February 15,
2004), from 40 percent to 50 percent. The Committee unanimously
recommended this change during a January 22, 2004, telephone meeting.
On July 1, 2003, the Committee recommended regulating all 22 weeks
(September 15, 2003-February 15, 2004). The Committee recommended that
the weekly percentages be set at 45 percent for the first 2 weeks, 35
percent for weeks 3 through 19, and 40 percent for the remaining 3
weeks. These percentages were established following informal rulemaking
procedures, with an interim final rule published in the Federal
Register on September 9, 2003 (68 FR 53015), and a final rule published
in the Federal Register on November 14, 2003 (68 FR 64494).
The Committee believes that the over shipment of small-sized red
seedless grapefruit has a detrimental effect on the market. While there
is a market for small-sized red seedless grapefruit, the availability
of large quantities oversupplies the fresh market with these sizes and
negatively impacts the market for all sizes. These smaller sizes, 48
and 56, normally return the lowest prices when compared to the other
larger sizes. However, when there is too much volume of the smaller
sizes available, the overabundance of small-sized fruit pulls the
prices down for all sizes.
In its discussion of the relaxation of the percentage for the last
week when percentage size limitations apply, the Committee reviewed the
percentages previously recommended and the current state of the crop.
The Committee also considered some additional information that was not
available during its earlier meeting. On January 12, 2004, USDA
released information regarding fruit size distribution developed from a
December size survey. The size survey showed that more small sizes were
available than anticipated. The release stated that the mean size
indicated that only two other seasons during the past ten years have
had smaller sizes. According to the survey, more than 50 percent of the
remaining crop is size 48 and smaller. This compares to only 34 percent
at this time last season.
The Committee had not expected small sizes to represent such a
large portion of the available crop by this time in the season. With
small sizes representing a significant amount of this year's crop,
larger sizes are in shorter supply. Growers have spot picked their
groves twice looking for larger sizes and to spot pick again would be
cost prohibitive. Also, with the expectation that the fruit size will
not improve, there will continue to be a shortage of large sizes. This
means that there will be a sizable amount of small sizes available at
the end of the regulated period.
With a limited number of larger sizes available, there has also
been market pressure to use small sizes to serve markets that
traditionally take larger sizes. However, at the same time, markets
that traditionally demand small sizes are also demanding fruit. There
are indications that importers of small-sized fruit began purchasing
fruit earlier than in past seasons. Export shipments for the week
ending January 18 were nearly 20 percent higher than for the same week
last season. These factors have made supplies of available allotment of
small-sized fruit tight.
The Committee offices have been receiving calls from members of the
industry asking that the weekly percentages be increased. The Committee
staff has also been actively working with handlers on allotment loans
and transfers to accommodate the needs of handlers desiring to ship
more small-sized red seedless grapefruit. Requests for loans and
transfers have been increasing from 3 requests during week 15, to 19
for week 17, to 24 requests during week 18.
However, while the percentage of size regulation does provide
allowances for over shipments, loans, and transfers of allotment during
regulation weeks 1 through 21, there are no allowances for loans or
over shipment for week 22 because it is the end of the regulation
period. The Committee agreed that some increase in the percentage was
necessary for the last week of regulation to recognize that some
handlers would be having to reduce their allotment to cover any over
shipments from the previous week and that no additional over shipments
would be permitted.
There is also concern in the industry that if there is not some
relaxation in the percentage, a large volume of small-sized fruit may
be pushed into the market following the end of the regulation period.
This would negatively impact prices and undermine the success of the
regulation to this point. During the 2001-02 season, small sizes also
represented a significant percentage of the crop at the end of the
regulation period. The Committee had recommended a relaxation in the
percentages for the last few weeks of the season, but, due to
rulemaking time frames, the percentage changes were not implemented.
Following the end of the regulation period, sizable quantities of small
sizes were dumped onto the market. This contributed to a 35 cent per
carton reduction in the f.o.b. price. The Committee believes that
relaxing the percentage for the last week of regulation may help
relieve some of the volume of small sizes and provide for a smoother
transition to the end of the regulation period.
The Committee discussed several alternatives ranging from
maintaining the percentages at their current rate, increasing week 21
to 45 percent and week 22 to 50 percent, and just increasing the
percentage rate for week 22. The Committee agreed it would be difficult
to get a change to week 21 in place prior to that regulation week, and
recommended increasing the percentage for week 22 from 40 percent to 50
percent. Such a change represents an additional industry allotment of
72,174 cartons for the last week of regulation. The Committee believes
this will provide the industry with some additional flexibility and
help with the transition from the end of the 22-week regulation period
to the unrestricted shipment of small sizes.
Members agreed that one of the most important goals of percentage
of size regulation was to create some discipline in the way fruit was
packed and marketed. However, considering the size survey results, and
the other information discussed, the Committee decided that increasing
the weekly percentage for week February 9 through February 15 will
address the goals of this regulation, while providing handlers with
some additional marketing flexibility.
Section 8e of the Act requires that whenever grade, size, quality,
or maturity requirements are in effect for certain commodities under a
domestic marketing order, including grapefruit, imports of that
commodity must meet the same or comparable requirements. This rule does
not change the minimum grade and size requirements under the order,
only the percentages of sizes 48 and 56 red seedless grapefruit that
may be handled. Therefore, no change is necessary in the grapefruit
import regulations as a result of this action.
[[Page 5681]]
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this initial regulatory flexibility analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
business 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. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 75 grapefruit handlers subject to
regulation under the order and approximately 11,000 growers of citrus
in the regulated area. Small agricultural service firms, including
handlers, are defined by the Small Business Administration (SBA) as
those having annual receipts of less than $5,000,000, and small
agricultural producers are defined as those having annual receipts of
less than $750,000 (13 CFR 121.201).
Based on industry and Committee data, the average annual f.o.b.
price for fresh Florida red seedless grapefruit during the 2002-03
season was approximately $7.24 per \4/5\-bushel carton, and total fresh
shipments for the 2002-03 season are estimated at 22.9 million cartons
of red grapefruit. Approximately 25 percent of all handlers handled 75
percent of Florida's grapefruit shipments. Using the average f.o.b.
price, at least 75 percent of the grapefruit handlers could be
considered small businesses under SBA's definition. Therefore, the
majority of Florida grapefruit handlers may be classified as small
entities. The majority of Florida grapefruit producers may also be
classified as small entities.
On July 1, 2003, the Committee recommended limiting the volume of
sizes 48 and 56 red seedless grapefruit shipped during the first 22
weeks of the 2003-04 season by setting weekly percentages for each of
the 22 weeks, beginning September 15, 2003. Weekly percentages were
established at 45 percent for weeks 1 and 2, 35 percent for week 3
through week 19, and at 40 percent for weeks 20, 21, and 22. The
quantity of sizes 48 and 56 red seedless grapefruit that may be shipped
by a handler during a particular week is calculated using the
percentages set. This rule relaxes the weekly limitation set for
shipments of small-sized red seedless grapefruit entering the fresh
market from 40 percent to 50 percent during the last week of the 22-
week regulatory period. This action provides an additional volume of
small red seedless grapefruit to address current marketing conditions
without saturating all markets with these small sizes. This rule should
help stabilize the market and improve grower returns. This rule uses
the provisions of Sec. 905.153. Authority for this action is provided
in Sec. 905.52 of the order. The Committee unanimously recommended
this action during a telephone meeting on January 22, 2004.
This rule will increase the weekly percentage set for the last week
of regulation. The Committee made this recommendation to address the
issue that the majority of the remaining crop is made up of small
sizes. By increasing the percentage, more small sizes are available for
shipment. This should help handlers meet their market needs and provide
for some additional flexibility without putting too many small sizes on
the market. This should benefit both handler and producer returns.
The purpose of percentage of size regulation is to help stabilize
the market and improve grower returns. This change provides a supply of
small-sized red seedless grapefruit sufficient to meet market demand,
without saturating all markets with these small sizes. This action is
not expected to decrease the overall consumption of red seedless
grapefruit. It is expected to benefit all red seedless grapefruit
growers and handlers regardless of their size of operation.
The Committee considered several alternatives when discussing this
action, including maintaining the percentages at their current rate,
increasing week 21 to 45 percent and week 22 to 50 percent, and just
increasing the percentage rate for week 22. The Committee agreed it
would be difficult to get a change to week 21 in place prior to that
regulation week, and recommended increasing the percentage for week 22
from 40 percent to 50 percent to provide the industry with some
additional flexibility and provide a smooth transition to the period
without percentage size limitations.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection requirements contained in this
rule have been previously approved by the Office of Management and
Budget (OMB) and assigned OMB No. 0581-0189. As with all Federal
marketing order programs, reports and forms are periodically reviewed
to reduce information requirements and duplication by industry and
public sectors.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this rule. However, red seedless grapefruit
must meet the requirements as specified in the U.S. Standards for
Grades of Florida Grapefruit (7 CFR 51.760 through 51.784) issued under
the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 through 1627).
In addition, while the meeting on January 22, 2004, was a telephone
meeting, interested persons outside the Committee had an opportunity to
provide input in the decision. The Committee manager provided a notice
to the industry and anyone had the opportunity to participate in the
call. Like all Committee meetings, the January 22, 2004, meeting
provided both large and small entities the opportunity to express views
on this issue. Also, the weekly percentage size regulation has been an
ongoing issue that has been discussed at numerous public meetings so
that interested parties have had the opportunity to express their views
on this issue. Interested persons are invited to submit information on
the regulatory and informational impacts of this action on small
businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html.
Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
This rule invites comments on relaxing limits on the volume of
small red seedless grapefruit entering the fresh market during the last
week of the 22-week percentage of size regulation for the 2003-04
season. Any comments received will be considered prior to finalization
of this rule.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
this interim final rule, as hereinafter set forth, will tend to
effectuate the declared policy of the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect and that good cause exists for not postponing the effective date
of this rule until 30 days after publication in the Federal Register
because this rule needs to be in place when the regulatory week begins
February 9, 2004, so handlers can meet
[[Page 5682]]
the market needs of their customers. The industry has been discussing
this issue for the last two weeks, and the Committee has kept the
industry well informed.
List of Subjects in 7 CFR Part 905
Grapefruit, Marketing agreements, Oranges, Reporting and
recordkeeping requirements, Tangelos, Tangerines.
0
For the reasons set forth in the preamble, 7 CFR part 905 is amended as
follows:
PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN
FLORIDA
0
1. The authority citation for 7 CFR Part 905 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
Sec. 905.350 [Amended]
0
2. In Sec. 905.350, the weekly percentage for ``(v) 2/9/04 through 2/
15/04'' is changed from ``40'' to ``50''.
Dated: February 3, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-2653 Filed 2-4-04; 11:02 am]
BILLING CODE 3410-02-P