[Federal Register Volume 59, Number 118 (Tuesday, June 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15143]


[[Page Unknown]]

[Federal Register: June 21, 1994]


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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service

7 CFR Part 923

[Docket No. FV94-923-1FR]

 

Sweet Cherries Grown In Designated Counties in Washington; 
Establishment of Minimum Size and Maturity Requirements for Rainier 
Variety Cherries

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule establishes a minimum size requirement of 11 
row size (\61/64\ inch diameter) and a minimum maturity requirement of 
17 percent soluble solids for Rainier variety cherries that can be 
shipped to fresh market outlets under Marketing Order No. 923. This 
final rule ensures that consumers receive cherries of acceptable size 
and maturity. This is intended to enhance the quality and image of 
Washington Rainier cherries in the fresh market, thereby increasing 
sales and improving returns to producers. This final rule was 
recommended by the Washington Cherry Marketing Committee (committee), 
which works with the Department of Agriculture (Department) in 
administering the marketing order covering sweet cherries grown in 
designated counties in Washington.

EFFECTIVE DATE: June 21, 1994.

FOR FURTHER INFORMATION CONTACT: Mark J. Kreaggor, Marketing Order 
Administration Branch, Fruit and Vegetable Division, Agricultural 
Marketing Service, U.S. Department of Agriculture, room 2523-S, P.O. 
Box 96456, Washington, DC 20090-6456; telephone: (202) 720-5127; or 
Teresa Hutchinson, Northwest Marketing Field Office, Fruit and 
Vegetable Division, AMS, USDA, 1220 SW Third Avenue, Room 369, 
Portland, OR 97204; telephone: (503) 326-2724.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement No. 134 and Marketing Order No. 923 (7 CFR Part 923), 
regulating the handling of sweet cherries grown in designated counties 
in Washington, hereinafter referred to as the ``order.'' The order is 
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 is issuing this rule in conformance with Executive 
Order 12866.
    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. This final rule is not intended to have 
retroactive effect. This final 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 the Secretary 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 the Secretary 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 in equity to review the 
Secretary's ruling on the petition, provided a bill in equity is filed 
not later than 20 days after the date of the entry of the ruling.
    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Administrator of the Agricultural Marketing Service 
(AMS) has considered the economic impact of this action on small 
entities.
    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 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 50 handlers of Washington sweet cherries 
that are subject to regulation under the order. In addition, there are 
approximately 1,100 producers in the regulated area. Small agricultural 
service firms, which include handlers of Washington sweet cherries, 
have been defined by the Small Business Administration [13 CFR 121.601] 
as those whose annual receipts are less than $5,000,000, and small 
agricultural producers are defined as those whose annual receipts are 
less than $500,000. A majority of these handlers and producers may be 
classified as small entities.
    This final rule revises Sec. 923.322 to establish a minimum size 
requirement of 11 row (\61/64\ inch diameter) and a minimum maturity 
requirement of 17 percent soluble solids for Rainier variety cherries 
under the order. The committee recommended these minimum size and 
maturity requirements by a vote of 13 to 1.
    Section 923.52 of the order authorizes the establishment of grade, 
size, quality, maturity, pack and container regulations for any variety 
or varieties of cherries grown in the production area. Section 923.53 
further authorizes the modification, suspension, or termination of 
regulations issued under Sec. 923.52. Section 923.55 provides that 
whenever cherries are regulated pursuant to Sec. 923.52 or Sec. 923.53, 
such cherries must be inspected by the Federal-State Inspection 
Service, and certified as meeting the applicable requirements of such 
regulations.
    Currently, the regulations require that dark sweet cherries such as 
Bing cherries, the predominant variety grown in the production area, 
meet certain grade, size, pack and container requirements. Such 
cherries are also required to be inspected. Light sweet cherries, 
including the Rainier variety, are currently exempt from these 
requirements.
    The Rainier variety was developed at Washington State University's 
Irrigated Agricultural Research and Extension Center in Prosser, 
Washington, and was first released to the Northwest cherry industry in 
1960. Rainiers were initially used primarily as canning cherries. 
However, since the 1980s, production of the Rainier variety for the 
fresh market has increased substantially. Less than 600 tons were 
marketed fresh in 1987, but that increased to 1,543 tons in 1989 and 
1,937 tons in 1992. A record crop of 2,427 tons was marketed in 1993, 
about 5 percent of Washington's total sweet cherry crop.
    As the Rainier variety gained in importance as a fresh market 
cherry, the Washington cherry industry began to consider the need to 
establish minimum standards of size and quality for the variety. At its 
December 15, 1993, meeting, the committee made its first recommendation 
to regulate Rainier cherries. Specifically, the committee recommended 
that a minimum size requirement be established at 10\1/2\ row size (1 
inch in diameter) for fresh market shipments of Rainier variety 
cherries. No minimum maturity requirement was recommended at that time, 
although concerns were expressed about ensuring that only ripe cherries 
be marketed.
    Subsequent to the December meeting, the Department received 
correspondence from 19 cherry producers, packers, and marketers 
concerning the committee's recommended regulation. The majority (13 of 
19) were in favor of the recommendation, and 6 were in opposition to 
regulating the Rainier variety.
    Comments supporting the proposed minimum size requirement stated 
that such a regulation would be in the best interests of producers. 
Growing Rainier cherries is more labor intensive and costly than 
producing other varieties. Producers need to offer a quality product in 
order to recoup these higher production costs. The sale of small, 
immature cherries results in buyer dissatisfaction, which reduces 
repeat purchases and damages the market for all cherries. Good cultural 
practices (e.g., proper pruning) will result in acceptable sizes. Fruit 
quality and maturity are enhanced by fruit size.
    Those opposed to the recommendation stated that it would reduce the 
volume of Rainier cherries permitted to be marketed fresh, thus 
reducing returns on the crop. Further, they stated that taste and 
appearance are more important to cherry buyers than size. Those in 
opposition also claimed that a minimum size requirement would be 
detrimental to producers who farm at higher elevations, where fruit 
tends to be smaller, but may be sweeter.
    Given the lack of industry consensus on this issue, the Department 
asked the committee to reconsider the need to regulate Rainier variety 
cherries, particularly in light of the concerns raised in the above-
mentioned letters. The committee met again on March 15, 1994, and 
rescinded its earlier recommendation. The committee recommended a lower 
size requirement--at least 11 row size (\61/64\ inch in diameter)--
coupled with a minimum maturity requirement of 17 percent soluble 
solids. The vote on this recommendation was 13 to 1, with the 
dissenting voter in favor of a smaller minimum size of 11\1/2\ row 
(\57/64\ inch in diameter).
    The Rainier cherry is distinct from other cherry varieties marketed 
by the Washington cherry industry. It is a yellow-colored cherry, with 
some rosy blush. It is considered a specialty item, compared with the 
darker colored varieties.
    The committee reports the costs of producing and handling Rainier 
cherries are higher than those associated with other cherry varieties. 
Rainier cherry trees need to be pruned more heavily than other cherry 
trees to ensure acceptable sized fruit. Rainier cherry trees are picked 
several times during a season, reflecting the fact that not all the 
fruit matures at the same time and that the cherries will not ripen 
after harvest. Rainier cherries are also fragile and susceptible to 
damage during handling. Thus, most Rainier cherries are sorted and 
packed by hand.
    Rainier cherries are typically marketed from mid-June through July. 
AMS Market News data show that prices are highest for the earliest 
offerings of these cherries, and that such prices decline as the season 
progresses. In 1992, for example, the opening f.o.b. price on June 18 
was $35.00 per carton. This declined to $25.00 to $28.00 per carton a 
week later, and f.o.b. prices were $22.00 to $28.00 per carton at 
season's end. This price trend serves as an incentive for producers to 
harvest early, which has resulted in immature, sour Rainier cherries 
being marketed.
    The committee reports that cherry size and quality are important to 
buyers. Consistency and dependability are equally important. Shipments 
of immature, low quality, under-sized Rainier cherries in recent 
seasons have resulted in disappointment by buyers and consumers. This 
reduces repeat purchases, and results in declines in prices and overall 
sales volumes. The general consensus of the industry is that some 
mandatory quality standards are needed to ensure buyer confidence. 
Voluntary standards have been unsuccessful.
    Cherry size is related to maturity and other quality factors. That 
is, larger sized cherries tend to be sweeter and of higher overall 
quality. This is supported by prices received for different sizes of 
Bing cherries. Market News data show that f.o.b. prices for 12 row 
sized Bings (\54/64\ inch diameter) averaged about $15.00 per carton in 
mid-June 1992. At the same time, 10\1/2\ row sized (1 inch diameter) 
Bings were selling for about $25.00 per carton. This price relationship 
held steady throughout the season. Further, the committee has conducted 
research that shows that larger sizes correlate with higher maturity 
levels, and that larger sizes are preferred by cherry consumers. While 
research results and prices by size specifically for Rainier variety 
cherries are currently unavailable, industry consensus is that the same 
relationships are true for Rainier cherries.
    The Washington cherry industry promotes the sale of Rainier variety 
cherries through the Washington State Fruit Commission (WSFC), a State 
research and promotion program funded by industry assessments. The WSFC 
publicizes the current voluntary 1-inch minimum size standard for 
Rainier variety cherries in its promotion efforts. The WSFC has 
reported that it receives buyer complaints when such standards are not 
upheld. For example, three large retail chains cancelled all of their 
in-store promotions of Rainier variety cherries planned for the 1993 
season due to the receipt of small, immature Rainier cherries early in 
the season. Thus, the industry believes it needs to establish minimum 
size and maturity standards to protect its investment in promoting the 
crop.
    The general consensus of the Washington cherry industry is that the 
shipment of poor quality Rainier cherries is disrupting the marketplace 
and that some minimum quality standards are needed to maintain the 
Rainier cherry market. However, some disagreement was expressed at the 
committee meeting as to precisely what those minimum standards should 
be.
    Some questioned, for example, the 10\1/2\ row size requirement 
initially recommended by the committee, saying that this requirement 
would result in too many cherries being diverted to processors (an 
outlet exempt from regulation). Others stated that the smaller 11 row 
cherries have adequate sugar content. Still others opposed any size 
requirement, believing that other criteria (e.g., maturity levels) are 
more important than size and that size bears no relationship to those 
criteria. Additionally, concern was expressed that producers at higher 
elevations would be more adversely impacted than other producers by a 
minimum size requirement.
    In regards to this last concern, the committee concluded that 
producers at higher elevations should not be adversely impacted by the 
11 row minimum size regulation, since these producers have demonstrated 
the ability to produce other varieties at acceptable sizes (e.g., Bing 
cherries). Further, a number of producers who farm at higher elevations 
attended the meeting, and stated that they would not have a problem 
meeting the proposed minimum size requirement, and that proper cultural 
practices (including pruning) would ensure that other producers achieve 
appropriate sizing.
    In an attempt to reach an industry compromise, the committee 
rescinded its December recommendation to establish a minimum size 
requirement for Rainier cherries at 10\1/2\ row size. It recommended 
instead a lower minimum size requirement of 11 row, coupled with a 
maturity requirement of at least 17 percent soluble solids. This 
recommendation is considered to be conservative, in that most handlers 
in the Washington cherry industry pack to higher standards. The 
committee intends to conduct research during the 1994 and subsequent 
seasons to determine whether further refinements in Rainier variety 
cherry standards are needed.
    This final rule adds a new provision to Sec. 923.322, Washington 
Cherry Regulation 22, to establish a minimum size requirement of \61/
64\ inch in diameter for Rainier variety cherries, which corresponds to 
the 11 row size. To provide for variances in packing, a tolerance of 10 
percent will be provided for undersized Rainier cherries. Further, the 
regulation will provide that not more than 5 percent of the Rainier 
cherries in any lot could be less than \57/64\ inch in diameter, which 
is 11\1/2\ row size, one size lower than the 11 row size. These 
tolerances are comparable to those in effect for other Washington 
cherry varieties.
    Section 923.322 is also revised by adding a new section to require 
that any lot of Rainier cherries would have to contain a minimum of 17 
percent soluble solids. The percentage of soluble solids would be 
determined by using a refractometer to measure the sugar level in a 
composite sample of cherries. This maturity test would be taken at the 
time of packing or just prior to shipment, at the option of the 
handler.
    As previously discussed, Sec. 923.55 of the order provides that 
whenever cherries are subject to grade, size, quality, maturity, pack 
or container regulations, those cherries must be inspected by the 
Federal-State Inspection Service (FSIS). Since this rule would 
establish minimum size and maturity requirements for Rainier variety 
cherries, such cherries would have to be inspected and certified by the 
FSIS as meeting the applicable requirements of the regulation.
    A proposed rule concerning this action was published in the Federal 
Register on May 19, 1994, (59 FR 26148), which provided a 15 day 
comment period ending June 3, 1994. Three comments were received. The 
Washington Cherry Committee recommended a modification to the original 
minimum maturity requirement. Mr. Mike Hambelton of Stemilt Growers, 
Inc. did not support the original minimum maturity requirement, but 
supported the committee's recommended modification. Mr. Grady Auvil of 
Auvil Fruit Company also supported the modification recommended by the 
committee. Both Mr. Hambelton and Mr. Auvil did not support the minimum 
size requirement.
    The Washington Cherry Committee's comment stated that the 
modification to its recommended minimum maturity requirement for 
Rainier cherries was to provide more flexibility for handlers. The 
proposed rule stated that maturity testing was to be conducted at the 
time of packing or shipment only. Since handlers use different methods 
of packing Rainier cherries, the committee agreed that it is important 
that handlers have the option to determine when the maturity test will 
be conducted. This will prevent the unnecessary packing and repacking 
of Rainier cherries that do not meet the minimum size requirements. The 
new language will accommodate different methods by permitting maturity 
inspection, prior to packing, at the time of packing, or just prior to 
shipment. The Department believes that the comments concerning 
modifying the minimum maturity requirements for Rainier cherries have 
merit. Therefore, this final rule is modified to revise Sec. 923.322(c) 
of Washington Cherry Regulation 22, to provide more flexibility in 
inspection.
    Mr. Hambelton and Mr. Auvil also filed comments requesting that the 
Department not approve the committee's size recommendation. Mr. 
Hambelton suggested that the committee lacked formal research in the 
areas of Rainier cherry maturity and size. The committee has done 
research concerning cherries showing that size and quality are very 
important to buyers. Although no formal research was specifically 
conducted on Rainier cherries, there is among growers and handlers a 
tremendous amount of knowledge and experience about the marketing of 
Rainier cherries. The overwhelming view of the committee, which is made 
up of growers and handlers, is that shipments of small, sour Rainier 
cherries has been poorly received by consumers. In addition, the 
committee gave the issue full and timely consideration, as noted in the 
two meetings which were held. The committee in its final decision voted 
13 to 1 in favor of its recommendation.
    Mr. Auvil also stated that the minimum size requirement would limit 
supply, resulting in higher prices. Mr. Hambelton also claimed that the 
size regulation would reduce Rainier cherry supplies and result in 
grower prices exceeding parity levels. He cited that the 1993 parity 
price for sweet cherries was $1,640 per ton, and that Rainier cherry 
producers received on average $1,822 per ton. However, the $1,640 
figure used by Mr. Hambelton is a national sweet cherry parity figure 
from the July 1993 National Agricultural Statistics Service report. 
This figure reflects prices for all sweet cherries grown in the United 
States, including Rainier cherries and other varieties of sweet 
cherries grown in the regulated area. There are no separate official 
data on Rainier cherries. The AMS has calculated an equivalent parity 
price for Washington sweet cherries of $2,083 per ton, and does not 
expect that prices received during the 1994 season will exceed parity 
levels.
    More importantly, however, the intent of this action is to 
establish minimum levels of size and maturity to ensure consumer 
satisfaction and maintain current markets. The objective of this action 
is not to reduce supplies of Rainier cherries. As previously discussed, 
higher prices for earliest offerings of Rainier cherries provide an 
incentive for producers to harvest early, which has resulted in 
immature, sour Rainier cherries being marketed. The establishment of 
minimum size and maturity requirements should reduce this propensity to 
harvest prematurely, but should not reduce the overall volume of 
Rainier cherries.
    Considering complaints received from consumers last season about 
immature Rainier cherries, the committee made its recommendation to 
make 11 row size the minimum for such cherries. The size recommendation 
ensures cherries of a good size will be shipped to market.
    For the reasons stated above, the Department is not making any 
changes to the size requirements for Rainier cherries.
    Based on available information, the Administrator of the AMS has 
determined that this action will not have a significant impact on a 
substantial number of small entities.
    After consideration of all available information, it is found that 
establishing minimum size and maturity requirements, as set forth in 
this final rule, will tend to effectuate the declared policy of the 
Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined that good 
cause exist for not postponing the effective date of this final rule 
until 30 days after publication in the Federal Register because: (1) 
The committee held several meetings concerning the need to regulate 
Rainier variety cherries and all interested persons were invited to 
participate and express their opinions on this issue; (2) the proposed 
rule provided a comment period and modifications were made based on the 
comments; and (3) to be of maximum benefit to the industry, any 
regulation covering Rainier cherries should be in place for the 1994 
season which begins in mid-June, and adequate time is needed to advise 
producers and shippers.

List of Subjects in 7 CFR Part 923

    Cherries, Marketing agreements, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 923 is 
amended as follows:

PART 923--SWEET CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON

    1. The authority citation for 7 CFR part 923 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. Section 923.322 is amended by removing the introductory text, 
revising paragraph (a), redesignating paragraphs (b), (c), (d), and (e) 
as paragraphs (d), (e), (f), and (g) respectively, adding new 
paragraphs (b) and (c), and revising paragraphs (d)(2) and (f) to read 
as follows:


Sec. 923.322  Washington Cherry Regulation 22.

    (a) Grade. No handler shall handle, except as otherwise provided in 
this section, any lot of cherries, except cherries of the Rainier, 
Royal Anne, and similar varieties, commonly referred to as ``light 
sweet cherries'' unless such cherries grade at least Washington No. 1 
grade except that the following tolerances, by count, of the cherries 
in the lot shall apply in lieu of the tolerances for defects provided 
in the Washington State Standards for Grades of Sweet Cherries: 
Provided, That a total of 10 percent for defects including in this 
amount not more than 5 percent, by count, of the cherries in the lot, 
for serious damage, and including in this latter amount not more than 
one percent, by count, of the cherries in the lot, for cherries 
affected by decay: Provided further, That the contents of individual 
packages in the lot are not limited as to the percentage of defects but 
the total of the defects of the entire lot shall be within the 
tolerances specified.
    (b) Size. No handler shall handle, except as otherwise provided in 
this section, any lot of cherries, except cherries of the Royal Anne 
and similar varieties other than the Rainier variety commonly referred 
to as ``light sweet cherries'' unless such cherries meet the following 
minimum size requirements:
    (1) For the Rainier variety, at least 90 percent, by count, of the 
cherries in any lot shall measure not less than \61/64\ inch in 
diameter and not more than 5 percent, by count, may be less than \57/
64\ inch in diameter.
    (2) For all other varieties, at least 90 percent, by count, of the 
cherries in any lot shall measure not less than \54/64\ inch in 
diameter and not more than 5 percent, by count, may be less than \52/
64\ inch in diameter.
    (i) All shipments handled in such containers shall be under the 
supervision of the committee; and
    (ii) At least 90 percent, by count, of the cherries in any lot of 
such containers shall measure not less than \54/64\ inch in diameter, 
and not more than 5 percent, by count, may be less than \52/64\ inch in 
diameter.
    (c) Maturity. No handler shall handle, except as otherwise provided 
in this section, any lot of Rainier cherries unless such cherries meet 
a minimum of 17 percent soluble solids as determined from a composite 
sample by refractometer prior to packing, at time of packing, or at 
time of shipment. Provided, That individual lots shall not be combined 
with other lots to meet soluble solids requirements.
    (d) * * *
    (2) Subject to the provisions of paragraphs (b)(2)(i) and (ii) of 
this section, shipments of cherries may be handled in such experimental 
containers as have been approved by the Washington Cherry Marketing 
Committee.
* * * * *
    (f) Exceptions. Any individual shipment of cherries which meets 
each of the following requirements may be handled without regard to the 
provisions of paragraphs (a), (b), (c), (d), and (e) of this section, 
and of Secs. 923.41 and 923.55.

    Dated: June 16, 1994.
Robert C. Keeney,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 94-15143 Filed 6-20-94; 8:45 am]
BILLING CODE 3410-02-P