[Federal Register Volume 60, Number 105 (Thursday, June 1, 1995)]
[Rules and Regulations]
[Pages 28520-28522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13339]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[FV94-981-3IFR]
Almonds Grown in California; Release of the Reserve Established
for the 1994-95 Crop Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: This document relaxes volume regulations imposed on California
almond handlers for the 1994-95 crop year by releasing reserve almonds
into salable channels. Volume regulations were imposed under the
authority of the Federal marketing order which regulates the handling
of almonds grown in California and is locally administered by the
Almond Board of California (Board). During the 1994-95 season, handlers
were required to withhold as a reserve, from normal competitive
markets, 10 percent of the almonds which they received from growers.
The remaining 90 percent of the crop could be sold by handlers to any
market at any time. This rule relaxes these regulations on handlers by
releasing the reserve percentage to the salable category and is
necessary to provide a sufficient quantity of almonds to meet
anticipated trade demand and carryover needs.
DATES: Effective on May 25, 1995; comments received by July 3, 1995
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 in triplicate to the Docket
Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S, P.O. Box
96456, Washington, DC 20090-6456. 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.
FOR FURTHER INFORMATION CONTACT: Kathleen M. Finn, Marketing
Specialist, Marketing Order Administration Branch, Fruit and Vegetable
Division, AMS, USDA, room 2522-S, P.O. Box 96456, Washington, DC 20090-
6456; telephone: (202) 720-1509, or fax (202) 720-5698; or Martin
Engeler, Assistant Officer-in-Charge, California Marketing Field
Office, Fruit and Vegetable Division, AMS, USDA, 2202 Monterey Street,
suite 102B, Fresno, California 93721; telephone: (209) 487-5901, or fax
(209) 487-5906.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 981 (7 CFR part 981), both as amended,
hereinafter referred to as the ``order,'' regulating the handling of
almonds grown in California. 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 of Agriculture (Department) is issuing this rule in
accordance with Executive Order 12866.
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform. Under the provisions of the marketing order now in
effect, salable and reserve percentages may be established for almonds
during any crop year. This rule revises the salable and reserve
percentages for marketable California almonds during the 1994-95 crop
year. 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 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 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 [[Page 28521]] 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 115 handlers of almonds who are subject to
regulation under the marketing order and approximately 7,000 producers
in the regulated area. Small agricultural service firms have been
defined by the Small Business Administration (13 CFR 121.601) as those
having annual receipts of less than $5,000,000, and small agricultural
producers are defined as those whose annual receipts are less than
$500,000. The majority of handlers and producers of California almonds
may be classified as small entities.
This rule relaxes volume regulations imposed on California almond
handlers for the 1994-95 crop year (July 1 through June 30). During the
1994-95 season, handlers were required to withhold, from normal
domestic and export markets, 10 percent of the merchantable almonds
which they received from growers (reserve percentage). The remaining 90
percent of almonds received by handlers could be sold to any market at
any time (salable percentage). Volume regulations were recommended by
the Board and imposed on handlers to lessen the impact of a large
almond supply for the 1994-95 season. Salable and reserve percentages
were established through publication of a final rule in the Federal
Register on December 9, 1994 (59 FR 63693). The Board now believes that
volume regulations on almond handlers are no longer necessary and that
the entire reserve should be released to provide a sufficient quantity
of almonds to meet anticipated trade demand and carryover needs.
Section 981.47 of the almond marketing order provides authority for
the Secretary, based on recommendations by the Board and the analysis
of other available information, to establish salable and reserve
percentages for almonds during a crop year. To aid the Secretary in
fixing the salable and reserve percentages, section 981.49 of the order
requires the Board to submit information to the Department on estimates
of the marketable production of almonds, combined domestic and export
trade demand for the year, carryin inventory at the beginning of the
year, and the desirable carryover inventory at the end of the year.
Authority for the Board to recommend revisions in the volume regulation
percentages is provided in section 981.48 of the order. Such revisions
must be recommended by May 15.
The Board met in July of 1994 to review projected crop estimates
and marketing conditions for the 1994-95 almond season. A very large
crop of 640 million kernelweight pounds was projected for the season.
Estimated shipments for the two prior seasons were 535.9 million pounds
for 1992 crop almonds and 497.7 million pounds for 1993 crop almonds.
Variations in production from season-to-season can cause wide
fluctuations in prices. For example, the Board estimated that grower
prices increased from $1.26 per pound for 1992 crop almonds to $2.00
per pound for the smaller, 1993 crop almonds. The large 1994 California
almond crop estimate caused early speculation of grower prices in the
$1.15 per pound range. Such swings in supplies and price levels can
result in market instability and uncertainty for growers, handlers,
buyers, and consumers. The long term goal of the almond industry is to
increase almond consumption and demand, and the Board believes this is
best achieved in the presence of stable and orderly market conditions.
Thus, the Board recommended that the volume regulation provisions of
the order be utilized for the 1994-95 season as a supply management
tool, with 10 percent of the 1994 crop almonds being held by handlers
as a reserve.
On May 12, 1995, the Board met in Modesto, California, and
unanimously recommended releasing the reserve established for the 1994-
95 crop year. Thus, the salable percentage will increase from 90 to 100
percent and the reserve percentage will decrease from 10 to 0 percent.
The Board considered a number of factors in arriving at its
recommendation to release the reserve. The 1994-95 almond crop is now
estimated at 727 million pounds, far above the initial 640 million
pound estimate. Shipments for the year are expected to exceed 600
million pounds. Further, it appears that production in the rest of the
world is well below normal. Production in Spain, the world's second
largest producer of almonds, fell well below usual and is estimated to
have been about 75 million pounds. Spain, California's biggest
competitor in the world almond markets, became the United States'
fourth largest export market.
At the meeting, the Board also considered a crop estimate for
California almonds for the 1995-96 season provided by the California
Agricultural Statistics Service (CASS). CASS released its crop estimate
of 430 million kernelweight pounds on May 11. The estimate is
relatively small compared with normal almond production for a year. An
extremely wet spring that prohibited successful pollination of almond
trees during the critical bloom period as well as crop losses due to
trees having been blown over by high winds have resulted in the
predicted small yield in California. Very short carryin inventories of
1993 crop almonds into the current season combined with reduced
production from California competitors resulted in higher than
anticipated demand for California almonds.
As required under the order, the Board revised a number of
estimates that had been considered when volume regulation was first
recommended in July 1994. The Board's current estimates of marketable
supply, combined domestic and export trade demand for 1994-95, and
desirable carryover to be available for the 1995-96 crop year are shown
below. The Board considered these revised estimates in arriving at its
recommendation to release the 1994-95 reserve. The estimates used by
the Board to establish the original volume regulations for the year are
shown for comparison.
Marketing Policy Estimates--1994 Crop
[Kernelweight basis in millions of pounds]
------------------------------------------------------------------------
12/9/94 5/12/95
Initial Revised
estimates estimates
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Estimated Production:
1. 1994 Production.............................. 640.0 727.1
2. Loss and Exempt--3.0%........................ 19.2 21.8
3. Marketable Production........................ 620.8 705.3
Estimated Trade Demand:
4. Domestic..................................... 175.0 152.8
5. Export....................................... 381.4 449.0
6. Total........................................ 556.4 601.8
Inventory Adjustment:
7. Carryin 7/1/94............................... 99.6 102.6
8. Desirable Carryover 6/30/95.................. 100.0 206.1
9. Adjustment (Item 8 minus item 7)............. 0.4 103.5
Salable/Reserve:
10. Adjusted Trade Demand (Item 6 plus item 9).. 556.8 705.3
11. Reserve (Item 3 minus item 10).............. 64.0 0
12. Salable % (Item 10 divided by item 3 x 100). 90% 100.0
13. Reserve % (100% minus item 12).............. 10% 0
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[[Page 28522]]
As previously mentioned and reflected in the table, estimated
almond crop production for the 1994-95 season increased from 640 to
727.1 million kernelweight pounds. Estimated weight losses resulting
from the removal of inedible kernels by handlers and losses during
manufacturing also increased from 19.2 to 21.8 million kernelweight
pounds. Therefore, marketable production is expected at 705.3 million
kernelweight pounds.
The Board's estimated trade demand (or shipments) also increased
from 556.5 million kernelweight pounds to a total of 601.8 kernelweight
pounds. If the estimates are achieved, this would set a new record for
the California almond industry. Although estimated domestic trade
demand decreased from 175 to 152.8 million kernelweight pounds,
estimated export trade demand increased sharply from 381.4 to 449
million kernelweight pounds. Almond production in the rest of the world
was well below normal, contributing to a significant increase in the
amount of California almonds shipped into export markets.
The Board also revised its inventory estimates. The carryin
figure--supplies of salable almonds carried in from the 1993-94 crop
year--was slightly revised from 99.6 to 102.6 million kernelweight
pounds. The desirable carryout figure--supplies of salable almonds to
be carried out on June 30 for early season shipment during the 1995-96
crop year--was revised from 100 to 206.1 million kernelweight pounds.
With the projected short crop for the upcoming season, the carryout
figure was significantly increased to provide a more adequate supply of
almonds available to meet early market needs. After taking into account
the carryin and desirable carryover figures, the adjusted trade demand
was increased from 556.8 to 705.3 million kernelweight pounds, an
amount equal to the Board's estimate of marketable production.
The order also permits the Board to recommend the establishment of
a percentage of reserve almonds that can be exported. However, export
is currently the largest market for California almonds and is not
considered a secondary or noncompetitive outlet. For the 1994-95 crop
year, exports were included in the trade demand and the export market
was not an authorized reserve outlet. The percentage of reserve almonds
available for export was established at 0 percent in the final rule
previously cited that established volume regulation for the 1994-95
crop. The export percentage is not changed as a result of this action.
The Board believes that immediate release of the reserve will
positively impact market stability by increasing the amount of almonds
available to the market prior to the harvest of the 1995 crop, and by
augmenting the overall supply available for the upcoming season. This
action is expected to facilitate a smooth transition into the 1995-96
season. Since market stability is of paramount importance in achieving
long-term industry health, the Board concluded that there are no viable
alternatives to its recommendation.
This action is not expected to impose any additional costs on
handlers or producers because immediate release of the reserve will
eliminate the need for handlers to continue to store almonds and will
allow the product to enter an eager market in a smooth fashion.
Therefore, the Administrator of the AMS has determined that the
issuance of this interim final rule will not have a significant
economic effect on a substantial number of small entities.
After consideration of all relevant material presented, including
the Board's recommendation, and other available information, it is
found that revision of section 981.239 so as to change the salable
percentage from 90 to 100 percent and the reserve percentage from 10 to
0 percent 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: (1) This rule relaxes requirements currently in effect by
increasing the quantity of almonds that may be marketed; (2) this rule
was discussed at a public meeting and interested persons had an
opportunity to provide input; (3) the rule was unanimously recommended
by the Board; and (4) this rule provides a 30-day comment period and
any comments received will be considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 981
Almonds, Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 981 is
amended as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 981 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
Note: This section will not appear in the Code of Federal
Regulations.
Subpart--Salable, Reserve, and Export Percentages
2. Section 981.239 is revised to read as follows:
Sec. 981.239 Salable, reserve, and export percentages for almonds
during the crop year beginning on July 1, 1994.
The salable, reserve, and export percentages during the crop year
beginning on July 1, 1994, shall be 100 percent, 0 percent, and 0
percent, respectively beginning on May 25, 1995.
Dated: May 25, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 95-13339 Filed 5-31-95; 8:45 am]
BILLING CODE 3410-02-P