[Federal Register Volume 61, Number 228 (Monday, November 25, 1996)]
[Rules and Regulations]
[Pages 59820-59822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30033]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 906

[Docket No. FV96-906-3 FIR]


Oranges and Grapefruit Grown in the Lower Rio Grande Valley in 
Texas; Revision of Pack and Size Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting as a 
final rule, with minor modification, the provisions of an interim final 
rule revising pack requirements for grapefruit and certain types of 
oranges under the marketing order covering oranges and grapefruit grown 
in the Lower Rio Grande Valley in Texas to allow larger sizes of fruit 
to be marketed in fresh channels. This rule also reduces current 
minimum size requirements for Texas grapefruit. These actions were 
recommended by the Texas Valley Citrus Committee (TVCC), the agency 
responsible for local administration of the marketing order. These 
changes will enable the industry to market a wider range of sizes of 
citrus fruit in fresh market channels, thereby meeting consumer demand, 
increasing sales, and improving returns to growers.

EFFECTIVE DATE: December 26, 1996.

FOR FURTHER INFORMATION CONTACT: Charles L. Rush, Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O. 
Box 96456, room 2522-S, Washington, DC 20090-6456, telephone (202) 690-
3670, Fax #(202) 720-5698; or Belinda G. Garza, McAllen Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, 1313 E. Hackberry, McAllen, Texas 78501; telephone 
(210) 682-2833, Fax # (210) 682-5942. Small businesses may request 
information on compliance with this regulation by contacting: Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Division, AMS, USDA, P.O. Box 96456, Room 2525-S, Washington, DC 20090-
6456; telephone (202) 720-2491, Fax # (202) 720-5698.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Agreement and Order No. 906 (7 CFR part 906), as amended, regulating 
the handling of oranges and grapefruit grown in the Lower Rio Grande 
Valley in Texas, 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 of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
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 to review the Secretary's 
ruling on the petition, provided an action 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 Agricultural Marketing Service (AMS) has considered the 
economic impact of this rule 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 20 handlers of oranges and grapefruit 
subject to regulation under the order and approximately 2,000 orange 
and grapefruit producers in the production area. Small agricultural 
service firms are 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 have been defined as those having annual 
receipts of less than $500,000. The majority of Texas orange and 
grapefruit handlers and producers may be classified as small entities.
    This final rule revises pack requirements for grapefruit and 
certain varieties of oranges to allow larger sizes to be marketed in 
fresh channels. Pack requirements are stated in terms of certain size 
designations. Size designations are defined in terms of minimum and 
maximum diameter. Improved irrigation methods, technological advances, 
and improved cultural practices have resulted in the Texas citrus 
industry growing larger, good quality fruit. Pack regulations preclude 
this fruit from being marketed in fresh market channels (with the 
exception of small amounts allowed to exceed the maximum specific 
diameters), and it is generally directed to the processing market. The

[[Page 59821]]

processing market is currently in an oversupply situation and yields 
low returns to growers. Providing for additional supplies (an 
additional 5 to 10 percent) to be marketed fresh should enhance grower 
returns.
    This final rule also reduces the minimum size requirements for 
grapefruit by allowing a broader range of sizes of grapefruit to be 
marketed. This final rule provides that pack size 112 grapefruit (if it 
grades at least U.S. No. 1) may be shipped throughout the entire 
season. This has been done in recent seasons. There is a market for 
this smaller grapefruit particularly in juice bars, health food stores, 
and other types of outlets that use smaller fruit for juicing. Some 
markets, such as Canada, prefer smaller fruit. Also, current drought 
conditions can lead to an abundance of smaller sizes. This rule enables 
handlers to market a broader range of sizes of citrus fruit in fresh 
market outlets, thereby meeting consumer demand, increasing fresh fruit 
sales, and enhancing returns to handlers and producers.
    Therefore, the AMS has determined that this action will not have a 
significant economic impact on a substantial number of small entities.
    An interim final rule was issued on August 16, 1996, and published 
in the Federal Register (61 FR 43139, August 21, 1996), with an 
effective date of August 22, 1996. That rule amended Sec. 906.340 of 
the rules and regulations in effect under the order. That rule provided 
a 30-day comment period which ended September 20, 1996. No comments 
were received.
    This action is in accordance with Sec. 906.40(a) of the order. This 
section authorizes the Secretary to limit the handling of particular 
grades, sizes, qualities, maturities, or packs of any or all varieties 
of fruit during a specified period or periods. Currently, minimum grade 
and size requirements, as well as pack and container requirements, are 
in effect for both grapefruit and oranges throughout the season. 
Shipments for certain purposes, including processing, are exempt from 
these requirements.
    The TVCC met on May 29, 1996, and unanimously recommended changes 
in pack and minimum size requirements. The TVCC meets prior to and 
during each season to review the handling regulations effective on a 
continuous basis for each citrus fruit regulated under the order. TVCC 
meetings are open to the public, and interested persons may express 
their views at these meetings. The Department reviews TVCC 
recommendations and information, as well as information from other 
sources, and determines whether modification, suspension, or 
termination of the handling regulations would tend to effectuate the 
declared policy of the Act.

Revision of Pack Requirements

    Pack requirements for oranges and grapefruit are in effect under 
Sec. 906.340 of the order's rules and regulations. These requirements 
provide, among other things, that oranges and grapefruit be packed in 
accordance with certain size designations. These size designations are 
defined in terms of minimum and maximum diameters.
    Oranges are divided into two categories for the purpose of pack 
regulations: (1) Navel, Valencia and similar late-type oranges, and (2) 
all other oranges. Navel, Valencia and similar late-type oranges must 
be packed in accordance with 13 size designations. The smallest of 
these is Size 324, which ranges from 2\3/16\ to 2\8/16\ inches in 
diameter. The largest size defined is Size 46, which ranges from 4\3/
16\ to 5 inches in diameter. Prior to issuance of the interim final 
rule, oranges other than navel, Valencia and similar late-type oranges 
were required to be packed in accordance with the various pack sizes in 
Sec. 51.691(c) of the United States Standards for Grades of Oranges 
(Texas and States other than Florida, California, and Arizona), 
hereinafter referred to as the ``orange standards.''
    The orange standards define seven pack sizes, from Size 324 (2\3/
16\ to 2\8/16\ inches in diameter) to Size 100 (3\7/16\ to 3\13/16\ 
inches in diameter). To allow for variations incident to proper 
packing, a tolerance for undersized and oversized fruit is provided. 
The tolerance is in terms of the number of fruit in a sample that may 
be off-size--with the actual number increasing as the sample size 
increases. Otherwise oversized oranges other than navel, Valencia and 
similar late-type oranges would be diverted to exempt outlets, such as 
processing.
    The TVCC recommended revising the orange pack regulations to allow 
all types of oranges to be packed in the full range of sizes--from Size 
324 to Size 46. Thus, this rule finalizes a revision of 
Sec. 906.340(a)(2)(i)(a), which specified pack requirements for oranges 
other than navel, Valencia and similar late-type oranges, to define the 
13 size designations authorized for such oranges. The 7 smallest sizes 
are defined in the same way they are in the orange standards. (The 
minimum diameters are \2/16\ inch larger than those specified for 
navels, Valencias and similar late-type oranges, while the maximum 
diameters are the same). The 6 sizes added for these oranges are 
defined similarly (that is, the minimum diameters differ, but the 
maximum diameters are the same). The differences in the minimum 
diameters take into account varietal differences between these two 
categories of oranges and current industry practice.
    Grapefruit are required to be packed within the diameter limits 
specified for the various pack sizes defined in Sec. 51.630(c) of the 
United States Standards for Grades of Grapefruit (Texas and States 
other than Florida, California, and Arizona), hereinafter referred to 
as the grapefruit standards. Exceptions are that the minimum diameter 
for pack size 96 grapefruit is 3\9/16\ inches, and for pack size 112 
grapefruit, the minimum diameter is 3\5/16\ inches.
    The grapefruit standards define 8 pack sizes. The smallest is Size 
125/126, which ranges from a minimum of 3 inches to a maximum of 3\8/
16\ inches in diameter. The largest is Size 46 which ranges from 4\5/
16\ to 5 inches in diameter. This rule adds a new, larger Size 36 
grapefruit, which ranges in size from 4\15/16\ to 5\9/16\ inches in 
diameter.
    Improved irrigation methods, technological advances, and improved 
cultural practices have resulted in the Texas citrus industry growing 
larger, good quality fruit. Pack regulations preclude this fruit from 
being marketed in fresh channels (with the exception of small amounts 
allowed to exceed the maximum specified diameters), and it is generally 
diverted to the processing market. The processing market is currently 
in an oversupply situation and yields low returns to growers. Providing 
for additional supplies (an estimated 5 to 10 percent) to be marketed 
fresh should, therefore, enhance grower returns.
    Additionally, the TVCC indicated that there has been increased 
demand from consumers in recent years for a broader range of sizes of 
oranges and grapefruit. Providing that these larger sizes may be 
shipped will provide greater supplies and more choices to consumers. It 
should also make the Texas citrus industry more competitive with other 
citrus-growing areas, which have adapted their marketing efforts to 
meet consumer demands.
    Finally, varying growing conditions in Texas result in diverse size 
distributions of oranges and grapefruit from season to season. Severe 
drought conditions may cause a season's crop to be 5 to 10 percent 
small sizes. Conversely, a rainy season may result in 5 to 10 percent 
large sizes. These changes in pack requirements to approve the shipment 
of all commercial sizes of oranges and grapefruit will provide handlers 
with the flexibility to market available

[[Page 59822]]

supplies in light of existing market conditions.

Revision of Minimum Size Requirements for Grapefruit

    Minimum size requirements for grapefruit are in effect under 
Sec. 906.365 of the order's rules and regulations. During the period 
November 16 through January 31 each season, grapefruit must be at least 
pack size 96, with a minimum diameter of 3\9/16\ inches. At other 
times, grapefruit that is pack size 112 (with a minimum diameter of 
3\5/16\ inches), may be shipped if it grades at least U.S. No. 1. 
Otherwise, the minimum grade requirement for grapefruit is Texas 
Choice. The smaller fruit is subject to a higher grade requirement 
because experience indicates that a market exists for this smaller 
fruit only if it meets a higher quality standard.
    This final rule provides that pack size 112 grapefruit (if it 
grades at least U.S. No. 1) may be shipped throughout the entire 
season. This has been done in recent seasons. The Texas citrus industry 
has found that there is a market for this smaller grapefruit, 
particularly in juice bars, health food stores, and other types of 
retail outlets that use smaller fruit for juicing. In addition, some 
markets, such as Canada, prefer smaller fruit.
    Also, as previously indicated, drought conditions can lead to an 
abundance of smaller sizes. Such conditions currently exist in the 
Lower Rio Grande Valley in Texas. The expected small sized grapefruit, 
which cannot be marketed profitably in processing outlets, will be made 
available to meet fresh market needs through this rule. This action is 
expected to result in improved grower returns.
    Permitting shipments of pack size 112 grapefruit grading at least 
U.S. No. 1 will enable Texas grapefruit handlers to meet market needs 
and compete with similar size grapefruit expected to be shipped from 
Florida.
    These changes in pack and size requirements for Texas oranges and 
grapefruit are intended to broaden the range of sizes and increase the 
amount of fruit available to consumers and increase grower returns. An 
alternative to this rule is to leave the current regulations in place. 
However, that would result in more of the larger oranges and grapefruit 
and the smaller grapefruit going to processors, and less fruit going to 
the more lucrative fresh market, which yields higher returns to 
growers.
    In the interim final rule, a conforming change to all references to 
``Table I'' of paragraph (a)(2)(i)(c) of Sec. 906.340 was inadvertently 
omitted. The interim final rule did not specifically request that all 
references to ``Table I'' be revised to read ``Table II.'' The final 
rule will be modified by revising the phrase ``Table I'' each time it 
appears to read ``Table II.''
    After consideration of all relevant material presented, the 
information and recommendations submitted by the committee, and other 
information, it is found that finalizing the interim final rule, with 
modification, will tend to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 906

    Grapefruit, Marketing agreements, Oranges, Reporting and 
recordkeeping requirements.

    Accordingly, the interim final rule amending 7 CFR part 906 which 
was published at 61 FR 43139 on August 21, 1996, is adopted as a final 
rule with the following change:

PART 906--ORANGES AND GRAPEFRUIT GROWN IN THE LOWER RIO GRANDE 
VALLEY IN TEXAS

    1. The authority citation for 7 CFR part 906 continues to read as 
follows:

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


Sec. 906.340   [Amended]

    2. In Sec. 906.340, paragraph (a)(2)(i)(c), the phrase ``Table I'' 
is revised to read ``Table II'' each time it appears.

    Dated: November 15, 1996.
Eric M. Forman,
Acting Director, Fruit and Vegetable Division.
[FR Doc. 96-30033 Filed 11-22-96; 8:45 am]
BILLING CODE 3410-02-P