[Federal Register Volume 63, Number 171 (Thursday, September 3, 1998)]
[Rules and Regulations]
[Pages 46861-46866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23711]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 63, No. 171 / Thursday, September 3, 1998 /
Rules and Regulations
[[Page 46861]]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 920
[Docket No. FV98-920-4 IFR]
Kiwifruit Grown in California; Relaxation of Pack Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This rule relaxes the pack requirements prescribed under the
California kiwifruit marketing order. The marketing order regulates the
handling of kiwifruit grown in California and is administered locally
by the Kiwifruit Administrative Committee (Committee). This rule
increases the size variation tolerance for Size 42 kiwifruit and
increases the maximum number of fruit per 8-pound sample for Sizes 42
through 30. In addition, it suspends, for the 1998-99 season, the
minimum net weight requirements for kiwifruit packed in containers with
cell compartments, cardboard fillers, or molded trays. These changes
were unanimously recommended by the Committee and are expected to
reduce handler packing costs, increase producer returns, and enable
handlers to compete more effectively in the marketplace.
DATES: This document is effective September 4, 1998. The suspension of
Sec. 920.302(a)(4)(iii) is effective September 4, 1998, through July
31, 1999. Comments received prior to November 2, 1998, 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, Fruit
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,
Washington, DC 20090-6456; Fax: (202) 205-6632; or E-mail:
[email protected]. 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: Rose M. Aguayo, Marketing Specialist,
California Marketing Field Office, Marketing Order Administration
Branch, F&V, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno,
California 93721; telephone: (209) 487-5901, Fax: (209) 487-5906; or
George Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, Fax: (202)
205-6632. Small businesses may request information on compliance with
this regulation by contacting Jay Guerber, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, room
2525-S, P.O. Box 96456, Washington, DC 20090-6456; telephone: (202)
720-2491, Fax: (202) 205-6632.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Order
No. 920, as amended (7 CFR part 920), regulating the handling of
kiwifruit grown in California, 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 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 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 the date of the entry of the ruling.
This rule increases the size variation tolerance for Size 42
kiwifruit and increases the maximum number of fruit per 8-pound sample
for Sizes 42 through 30. In addition, it suspends, for the 1998-99
season, the minimum net weight requirements for kiwifruit packed in
containers with cell compartments, cardboard fillers, or molded trays.
These changes were unanimously recommended by the Committee and are
expected to reduce handler packing costs, increase producer returns,
and enable handlers to compete more effectively in the marketplace.
Under the terms of the order, fresh market shipments of kiwifruit
grown in California are required to be inspected and meet grade, size,
maturity, pack, and container requirements. Section 920.52 authorizes
the establishment of pack requirements. Section 920.302(a)(4) of the
order's administrative rules and regulations outlines pack requirements
for fresh shipments of California kiwifruit.
Section 920.302(a)(4)(ii) provides pack requirements for kiwifruit
packed in cell compartments, cardboard fillers, or molded trays and
includes a table that specifies numerical size designations and size
variation tolerances. It also provides pack requirements for kiwifruit
packed in bags, volume fill, or bulk containers, and includes a
separate table that specifies numerical size designations and size
variation tolerances. Paragraph (a)(4)(ii) also provides that not more
than 10 percent, by count, of the containers in any lot and not more
than 5 percent, by count, of kiwifruit in any one container (except
that for Size 42 kiwifruit, the tolerance, by count, in any one
container, may not be more than 10 percent, and except that for Size 45
kiwifruit, the tolerance by count, in any one container, may not be
more than 25
[[Page 46862]]
percent) may fail to meet the requirements of this paragraph.
Section 920.302(a)(4)(iii) provides requirements for fruit packed
in containers with cell compartments, cardboard fillers, or molded
trays and requires that specific minimum net weights per size
designation be met.
Section 920.302(a)(4)(iv) establishes a maximum number of fruit per
8-pound sample for each numerical count size designation for fruit
packed in bags, volume fill, or bulk containers.
The amount of kiwifruit supplied to the domestic market by
California handlers has declined 22 percent, since the 1992-93 season.
In addition, producer prices have steadily declined in spite of a
continuous increase in the U.S. per capita consumption of kiwifruit.
When the order was implemented in 1984, the average Free-on-Board (FOB)
value was $1.14 per pound. This average has steadily decreased to $0.53
per pound for the 1997-98 season. The Committee reviewed FOB values and
determined that the average FOB value for the 1992-93 season through
the 1997-98 season was $0.55 per pound. To address these concerns, the
industry held several industry-wide planning sessions during May and
June 1998.
The Committee subsequently met on July 8, 1998, and unanimously
recommended modifying the pack regulations under Sec. 920.302 as
follows:
(1) Increase the size variation tolerance, from 10 percent, by
count, in any one container, to 25 percent, by count, for Size 42
kiwifruit;
(2) Increase the maximum number of fruit per 8-pound sample for
Sizes 42, 39, 36, 33, and 30 of kiwifruit packed in bags, volume fill,
or bulk containers; and
(3) Temporarily suspend, for the 1998-99 season, the minimum net
weight requirements for kiwifruit packed in containers with cell
compartments, cardboard fillers, or molded trays.
Increase in Size Variation Tolerance for Size 42 Kiwifruit
Currently, a size variation tolerance of \1/4\-inch (6.4 mm)
difference is allowed between the widest and narrowest kiwifruit in any
Size 42 container utilizing cell compartments, cardboard fillers, or
molded trays and a \3/8\-inch (9.5 mm) size variation difference is
allowed between the widest and narrowest kiwifruit packed in a Size 42
bag, volume fill, or bulk container. Not more than 10 percent, by
count, of the containers in any lot and not more than 5 percent, by
count, of kiwifruit in any container may fail to meet the established
size variations for Sizes 39 and larger.
Prior to the 1996-97 season, handlers were experiencing difficulty
meeting the size variation tolerances for Sizes 42 and 45 kiwifruit
because it is difficult to separate the round, narrow fruit from the
flatter, broader fruit. Weight sizers will not separate this fruit
because the fruit may weigh exactly the same yet be of different shapes
requiring them to be packed into different boxes in order to stay
within the size variation requirements. This sizing problem occurs
mostly in 40 series fruit where size variations are often indiscernible
to the eye and calipers are needed to detect differences. Fruit packed
in the 40 series consistently provides lower returns to California
producers than larger sized fruit and also is the most costly to pack.
The Committee determined that the best way to address the sizing
problem was to increase the size variation tolerance, by count, in any
one container, for Sizes 42 and 45 kiwifruit. Section 920.302(a)(4) of
the order's administrative rules and regulations was revised by a final
rule issued September 19, 1997 (52 FR 49128), to include a provision
that increased the size variation tolerance, by count, in any one
container, from 5 percent to 10 percent for Size 42 kiwifruit. That
rule also increased the size variation tolerance, by count, for Size 45
kiwifruit from 10 percent, by count, to 25 percent, by count.
During the 1997-98 season, the increased size variation tolerances
for Sizes 42 and 45 benefitted the industry by easing the packing
burden and reducing costs, while maintaining uniform looking boxes of
fruit desired by customers.
Since the 1997-98 harvest, the industry held several industry-wide
planning sessions and considered ways to reduce handler packing costs,
increase producer returns, and enable handlers to compete more
effectively in the marketplace.
The three recommendations to relax packing requirements made by the
Committee on July 8, 1998, were the final result of these discussions.
The recommendation to increase the size variation tolerance for Size 42
fruit from 10 percent, by count, to 25 percent, by count, was made
because the Committee realized that increasing the number of fruit in
an 8-pound sample for Size 42 fruit would make it difficult for
handlers to meet the established size variation requirements.
Increasing the size variation tolerance for Size 42 fruit will ease the
handler packing burden by adding several more pieces of fruit to the 8-
pound sample, and will reduce handler packing costs.
Additionally, increasing the size variation tolerance for Size 42
from 10 percent, by count, to 25 percent, by count, will increase the
number of kiwifruit that may exceed the \3/8\-inch size variation
requirement in bags, volume fill, or bulk containers. When applied to a
22-pound volume fill container, this increase in the size variation
tolerance will allow approximately 37 pieces of fruit out of 146 to
exceed the \3/8\-inch tolerance versus 15 pieces of fruit per 22-pound
volume fill container at the current 10 percent tolerance level.
Very little Size 42 kiwifruit is packed in single layer containers
with cell compartments, cardboard fillers, or molded trays. However,
Size 42 fruit is packed in 3-layer containers with cell compartments,
cardboard fillers, or molded trays. Increasing the size variation
tolerance to 25 percent, by count, will allow approximately 31 pieces
of fruit out of 126 to exceed the \1/4\-inch tolerance versus the 12
pieces of fruit per 3-layer container at the current 10 percent
tolerance level. Increasing the size variation tolerance for Size 42
fruit will reduce packing costs.
The Committee expects that increasing the size variation tolerance
for Size 42 kiwifruit will reduce packing costs because the additional
tolerance will make it easier to pack round and flat Size 42 fruit
without slowing down the packing line. The Committee anticipates that
producer returns will increase as a portion of the fruit previously
packed as Size 45 will be able to be packed as Size 42. Approximately
75 percent of all California kiwifruit is shipped in 22-pound volume
fill containers. Retailers pay approximately $1.14 more for a 22-pound
volume fill container of Size 42 fruit than for a similar container of
Size 45 fruit. Lastly, the Committee expects this change to benefit the
industry by providing retailers and consumers with uniform containers
of kiwifruit.
Increasing the Maximum Number of Fruit per 8-Pound Sample
Currently, under the rules and regulations, kiwifruit packed in
bags, volume fill, or bulk containers, must not exceed the maximum
number of fruit per an 8-pound sample per numerical count size
designation.
The Committee determined that increasing the maximum number of
fruit per 8-pound sample for Sizes 42 through 30 will increase the
number of fruit packed in each bag, volume-fill, or bulk container and
will help lessen the sizing differences between California
[[Page 46863]]
and imported kiwifruit. The Committee believes that lessening the size
differences should help California handlers compete more effectively in
the marketplace.
The Committee unanimously recommended increasing the maximum number
of fruit per 8-pound sample as shown in the following chart:
------------------------------------------------------------------------
Maximum number of fruit per
Tray equivalency size designation 8 pound sample
------------------------------------------------------------------------
21......................................... 22
25......................................... 27
27/28...................................... 30
30......................................... 33 (32)*
33......................................... 36 (35)*
36......................................... 42 (40)*
39......................................... 48 (45)*
42......................................... 53 (50)*
45......................................... 55
------------------------------------------------------------------------
* Prior number of fruit per 8-pound sample.
This chart is commonly referred to as the ``Size Designation
Chart'' in the industry. Increasing the maximum number of fruit per 8-
pound sample will allow some smaller-sized fruit to be packed into a
larger-size category. This rule allows three more pieces of fruit to be
packed per 8-pound sample in Sizes 42 and 39, two more pieces of fruit
to be packed in Size 36, and one more piece of fruit to be packed in
Sizes 33 and 30. It also reduces the percentage of fruit packed in the
40 series and increases the percentage of fruit packed in sizes 39 and
36, which are the preferred sizes by U.S. retail. Thus, handlers will
be better able to meet the needs of buyers, because kiwifruit sells by
the piece, and buyers desire as much fruit in each container as the
container can comfortably hold. This change does not affect the minimum
size and will not allow fruit currently considered as ``undersized'' to
be packed. The Committee further believes that increasing the maximum
number of fruit in the 8-pound sample will help lessen the sizing
differences between California and imported kiwifruit. Lessening the
size differences should help California handlers compete more
effectively in the marketplace.
Minimum Net Weight Requirements
Currently, fruit packed in containers with cell compartments,
cardboard fillers, or molded trays are required to meet the minimum net
weight requirements as shown in the following chart:
------------------------------------------------------------------------
Minimum net
weight of
Count designation of fruit fruit
(Pounds)
------------------------------------------------------------------------
34 or larger.............................................. 7.5
35 to 37.................................................. 7.25
38 to 40.................................................. 6.875
41 to 43.................................................. 6.75
44 and smaller............................................ 6.5
------------------------------------------------------------------------
Prior to the 1989-90 season, tray weights were voluntary and 73.5
percent of the crop was packed in trays. During the 1989-90 season,
tray weights were mandated, as there were many new packers involved in
the kiwifruit packing process and stricter regulations were viewed as
necessary to provide uniform container weights by size. However, since
that season less and less fruit has been tray packed.
During the 1997-98 season, only 15.5 percent of the crop was packed
into molded trays (singles and three-layers) and less than 1 percent of
this fruit was rejected for failure to meet minimum tray weights. As a
consequence, the Committee believes that minimum tray weight
requirements may no longer be necessary to maintain uniformity in the
marketplace. It further believes that suspension of this requirement
will help reduce tray pack packing costs for both large and small
handlers. Therefore, the Committee unanimously recommended that minimum
net weights for kiwifruit packed in cell compartments, cardboard
fillers, or molded trays be temporarily suspended for the 1998-99
season. The recommended suspension is for one season so the effects of
the suspension can be evaluated. The Committee further recommended that
this suspension begin no later than September 20, 1998, to enable
handlers to make operational decisions in time for the 1998-99 harvest
and shipping season. The 1998-99 season ends July 31, 1999.
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 60 handlers of California kiwifruit subject
to regulation under the marketing order and approximately 450 producers
in the production area. Small agricultural producers are defined by the
Small Business Administration (13 CFR 121.601) as those whose annual
receipts are less than $500,000, and small agricultural service firms
are defined as those whose annual receipts are less than $5,000,000.
One of the 60 handlers subject to regulation has annual kiwifruit
receipts of at least $5,000,000. This figure excludes receipts from any
other sources. The remaining 59 handlers have annual receipts less than
$5,000,000, excluding receipts from other sources. In addition, 10 of
the 450 producers subject to regulation have annual sales of at least
$500,000, excluding receipts from any other sources. The remaining 440
producers have annual sales less than $500,000, excluding receipts from
any other sources. Therefore, a majority of the kiwifruit handlers and
producers may be classified as small entities.
This rule increases the size variation tolerance for Size 42
kiwifruit and increases the maximum number of fruit per 8-pound sample
for Sizes 42 through 30. In addition, it suspends, for the 1998-99
season, the minimum net weight requirements for kiwifruit packed in
containers with cell compartments, cardboard fillers, or molded trays.
These changes were unanimously recommended by the Committee and are
expected to reduce handler packing costs, increase producer returns,
and enable handlers to compete more effectively in the marketplace.
Under the terms of the order, fresh market shipments of kiwifruit
grown in California are required to be inspected and meet grade, size,
maturity, pack, and container requirements. Section 920.52 authorizes
the establishment of pack requirements. Section 920.302(a)(4) of the
order's administrative rules and regulations outlines pack requirements
for fresh shipments of California kiwifruit.
Section 920.302(a)(4)(ii) provides pack requirements for kiwifruit
packed in cell compartments, cardboard fillers, or molded trays and
includes a table that specifies numerical size designations and size
variation tolerances. It also provides pack requirements for kiwifruit
packed in bags, volume fill, or bulk containers, and includes a
separate table that specifies numerical size designations and size
variation tolerances. Paragraph (a)(4)(ii) provides that not more than
10 percent, by count, of the containers in
[[Page 46864]]
any lot and not more than 5 percent, by count, of kiwifruit in any one
container (except that for Size 42 kiwifruit, the tolerance, by count,
in any one container, may not be more than 10 percent, and except that
for Size 45 kiwifruit, the tolerance, by count, in any one container,
may not be more than 25 percent) may fail to meet the requirements of
this paragraph.
Section 920.302(a)(4)(iii) provides requirements for fruit packed
in containers with cell compartments, cardboard fillers, or molded
trays and requires that specific minimum net weights per size
designation be met.
Section 920.302(a)(4)(iv) establishes a maximum number of fruit per
8-pound sample for each numerical count size designation for fruit
packed in bags, volume fill, or bulk containers.
The amount of kiwifruit supplied to the domestic market by
California handlers has declined 22 percent since the 1992-93 season.
In addition, producer prices have steadily declined, in spite of a
continuous increase in the U.S. per capita consumption of kiwifruit.
When the order was implemented in 1984, the average Free-on-Board (FOB)
value was $1.14 per pound. This average has steadily decreased to $0.53
per pound for the 1997-98 season. The Committee reviewed FOB values and
determined that the average FOB value for the 1992-93 season through
the 1997-98 season was $0.55 per pound. To address these concerns, the
industry held several industry-wide planning sessions during May and
June 1998.
The Committee subsequently met on July 8, 1998, and unanimously
recommended modifying Sec. 920.302 of the order's administrative rules
and regulations to make the following changes:
(1) Increase the size variation tolerance, from 10 percent, by
count, in any one container, to 25 percent, by count, for Size 42
kiwifruit;
(2) Increase the maximum number of fruit per 8-pound sample for
Sizes 42, 39, 36, 33, and 30 of kiwifruit packed in bags, volume fill,
or bulk containers; and
(3) Temporarily suspend, for the 1998-99 season, the minimum net
weight requirements for kiwifruit packed in containers with cell
compartments, cardboard fillers, or molded trays.
Increase in Size Variation Tolerance for Size 42 Kiwifruit
Currently, a size variation tolerance of \1/4\-inch (6.4 mm)
difference is allowed between the widest and narrowest kiwifruit in any
Size 42 container utilizing cell compartments, cardboard fillers, or
molded trays and a \3/8\-inch (9.5 mm) size variation difference is
allowed between the widest and narrowest kiwifruit packed in a Size 42
bag, volume fill, or bulk container. Not more than 10 percent, by
count, of the containers in any lot and not more than 5 percent, by
count, of kiwifruit in any container may fail to meet the established
size variations for Sizes 39 and larger.
Prior to the 1996-97 season, handlers were experiencing difficulty
meeting the size variation tolerances for Sizes 42 and 45 kiwifruit
because it is difficult to separate the round, narrow fruit from the
flatter, broader fruit. Weight sizers will not separate this fruit
because the fruit may weigh exactly the same yet be of different shapes
requiring them to be packed into different containers in order to stay
within the size variation requirements. This sizing problem occurs
mostly in 40 series fruit where size variations are often indiscernible
to the eye and calipers are needed to detect differences. Fruit packed
in the 40 series consistently provides lower returns to California
producers than larger sized fruit and also is the most costly to pack.
The Committee determined that the best way to address the sizing
problem was to increase the size variation tolerance, by count, in any
one container, for Sizes 42 and 45 kiwifruit. Section 920.302(a)(4) of
the order's administrative rules and regulations was revised by a final
rule issued September 19, 1997 (52 FR 49128) to include a provision
that increased the size variation tolerance, by count, in any one
container, from 5 percent to 10 percent for Size 42 kiwifruit. That
rule also increased the size variation tolerance, by count, for Size 45
kiwifruit from 10 percent, by count, to 25 percent, by count.
During the 1997-98 season, the increased size variation tolerances
for Sizes 42 and 45 benefitted the industry by easing the packing
burden and reducing costs, while maintaining uniform looking boxes of
fruit desired by customers.
Since the 1997-98 harvest, the industry has held several industry-
wide planning sessions and considered ways to reduce handler packing
costs, increase producer returns, and enable handlers to compete more
effectively in the marketplace. The three recommendations to relax pack
requirements made by the Committee on July 8, 1998, were the final
result of these discussions. The recommendation to increase the size
variation tolerance for Size 42 fruit from 10 percent, by count, to 25
percent, by count, was made because the Committee realized that
increasing the number of fruit in an 8-pound sample for Size 42 fruit
would make it difficult to meet the established size variation
requirements. Increasing the size variation tolerance for Size 42 fruit
will ease the packing burden created by adding several more pieces of
fruit to the 8-pound sample, and will reduce handler packing costs.
Additionally, increasing the size variation tolerance for Size 42
from 10 percent, by count, to 25 percent, by count, will increase the
number of kiwifruit that may exceed the 3/8-inch (9.5 mm) size
variation requirement in bags, volume fill, or bulk containers. When
applied to a 22-pound volume fill container, this increase in the size
variation tolerance will allow approximately 37 pieces of fruit out of
146 to exceed the 3/8-inch (9.5 mm) tolerance versus 15 pieces of fruit
per 22-pound volume fill container at the current 10 percent tolerance
level.
Very little Size 42 kiwifruit is packed in single layer containers
with cell compartments, cardboard fillers, or molded trays. However,
Size 42 fruit is packed in 3-layer containers with cell compartments,
cardboard fillers, or molded trays. Increasing the size variation
tolerance to 25 percent, by count, will allow approximately 31 pieces
of fruit out of 126 to exceed the 1/4-inch (6.4 mm) tolerance versus
the 12 pieces of fruit per 3-layer container at the current 10 percent
tolerance level.
The impact of this change on producers and handlers is expected to
be beneficial for all levels of business, but especially beneficial for
small businesses. Often times, the very small packing operations have
older, outdated sizing equipment which makes it difficult to size
kiwifruit as precisely as to what the order's rules and regulations
require. More hand labor is required in order to ``fine tune'' the
sizing process. More hand labor slows the packing line and increases
packing costs.
The Committee expects that increasing the size variation tolerance
for Size 42 kiwifruit will reduce packing costs because the additional
tolerance will make it easier to pack round and flat Size 42 fruit
without slowing down the packing line. Additionally, the Committee
expects producer returns to increase as a portion of the fruit
previously packed as Size 45 will be able to be packed as Size 42.
Approximately 75 percent of all kiwifruit is shipped in 22-pound volume
fill containers. Retailers pay approximately $1.14 more for a 22-pound
volume fill container of Size 42 fruit than for a similar container of
Size 45 fruit. Lastly, the Committee expects
[[Page 46865]]
this change will benefit the industry by providing retailers and
consumers with uniform containers of kiwifruit.
Increasing the Maximum Number of Fruit per 8-Pound Sample
Currently, under the rules and regulations, kiwifruit packed in
bags, volume fill, or bulk containers, must not exceed the maximum
number of fruit per an 8-pound sample per numerical count size
designation.
The Committee determined that increasing the maximum number of
fruit per 8-pound sample for Sizes 42 through 30 will increase the
number of fruit packed in each bag, volume-fill, or bulk container and
will help lessen the sizing differences between California and imported
kiwifruit. The Committee believes lessening the size differences should
help California handlers compete more effectively in the marketplace.
The Committee unanimously recommended increasing the maximum number
of fruit per 8-pound sample as shown in the following chart:
------------------------------------------------------------------------
Maximum number of fruit per
Tray equivalency size designation 8 pound sample
------------------------------------------------------------------------
21......................................... 22
25......................................... 27
27/28...................................... 30
30......................................... * 33 (32)
33......................................... * 36 (35)
36......................................... * 42 (40)
39......................................... * 48 (45)
42......................................... * 53 (50)
45......................................... 55
------------------------------------------------------------------------
* Prior number of fruit per 8-pound sample.
This chart is commonly referred to as the ``Size Designation
Chart'' in the industry. Increasing the maximum number of fruit per 8-
pound sample will allow some smaller-sized fruit to be packed into a
larger-size category. This rule allows three more pieces of fruit to be
packed per 8-pound sample in Sizes 42 and 39, two more pieces of fruit
to be packed in Size 36, and one more piece of fruit to be packed in
Sizes 33 and 30. It also reduces the percentage of fruit packed in the
40 series and increases the percentage of fruit packed in sizes 39 and
36, which are the preferred sizes by U.S. retail. Thus, handlers will
be better able to meet the needs of buyers because kiwifruit sells by
the piece and buyers desire more fruit in each container. This change
does not affect the minimum size and will not allow fruit currently
considered as ``undersized'' to be packed. The Committee believes
increasing the maximum number of fruit in the 8-pound sample will help
lessen the sizing differences between California and imported
kiwifruit. Lessening the size differences should help California
handlers compete more effectively in the marketplace.
The increase in the maximum number of fruit per 8-pound sample is
not so significant that consumers or retailers will notice a visual
size difference in the fruit being offered. The California Kiwifruit
Commission, which administers a State program utilized to promote
kiwifruit grown in California, has conducted kiwifruit sizing studies
over the past 4 years. These studies show that there is only an average
of \3/32\-inch to \4/32\-inch difference in fruit length between sizes,
and \2/32\-inch to \3/32\-inch difference in fruit width. These
differences are indistinguishable to the eye.
Further, the 1998-99 crop is expected to approximate the 1997-98
crop. The Committee estimated that utilizing the new size designations
will yield the California kiwifruit industry $32,106,395 in FOB value
versus the $30,931,451 received for the 1997-98 season. This is an
additional $1.17 million in FOB value for the 1998-99 season.
The Committee anticipates that these changes will equally benefit
small and large businesses, enable handlers to compete more effectively
in the marketplace, and help increase producer returns.
Minimum Net Weight Requirements
Currently, fruit packed in containers with cell compartments,
cardboard fillers, or molded trays are required to meet the minimum net
weight requirements as shown in the following chart:
------------------------------------------------------------------------
Minimum net
weight of
Count designation of fruit fruit
(Pounds)
------------------------------------------------------------------------
34 or larger.............................................. 7.5
35 to 37.................................................. 7.25
38 to 40.................................................. 6.875
41 to 43.................................................. 6.75
44 and smaller............................................ 6.5
------------------------------------------------------------------------
Prior to the 1989-90 season, tray weights were voluntary and 73.5
percent of the crop was packed in trays. During the 1989-90 season,
tray weights were mandated, as there were many new packers involved in
the kiwifruit packing process and stricter regulations were viewed as
necessary to provide uniformity in tray weights. However, since that
season less and less fruit has been packed in tray style packs.
During the 1997-98 season, only 15.5 percent of the crop was packed
into molded trays (singles and three-layers) and less than 1 percent of
this fruit was rejected for failure to meet minimum tray weights. As a
consequence, the Committee believes that minimum tray weight
requirements may no longer be needed to assure uniform container
weights in the marketplace. It further believes that suspension of this
requirement will help reduce packing costs for both large and small
handlers. Therefore, the Committee unanimously recommended that the
minimum net weights for kiwifruit packed in cell compartments,
cardboard fillers, or molded trays be temporarily suspended for the
1998-99 season. The recommended suspension is for one season so the
effects can be evaluated. The Committee further recommended that the
suspension begin no later than September 20, 1998, to enable handlers
to make operational decisions in time for the 1998-99 harvest and
shipping season. The 1998-99 season ends July 31, 1999.
Packing costs for handlers for a 22-pound volume fill container
range from approximately $0.25 to $0.75 per container. It is
anticipated that the potential cost savings per 22-pound volume fill
container will be around $0.01. The crop estimate for the 1998-99
season is 2,705,000, 22-pound volume fill container equivalents. It is
estimated that the three recommended changes could result in a
potential savings in packing costs for handlers of approximately
$27,000 during the 1998-99 season. The Committee and the Federal-State
Inspection Service determined that these changes will not result in a
reduction in inspection costs as the inspection process is essentially
the same.
There is wide-spread agreement in the industry for the need to
relax pack requirements. The Committee considered other alternatives to
relaxing packing requirements but determined that these suggestions
will not adequately address the industry's problems.
One suggestion was to suspend all pack requirements and to make all
pack requirements voluntary. Another suggestion was to terminate the
order. The Committee did not adopt these suggestions because it
believes they will result in a vast array of packs without uniformity,
and that this will cause disorderly marketing and confusion in the
marketplace. The Committee wants to maintain the reputation California
has established for uniformly packed containers of kiwifruit to prevent
such problems.
Another suggestion presented was that the size markings should be
based
[[Page 46866]]
on the number of pieces of fruit per pound. The Committee did not adopt
this suggestion because it believes such marking practices would
continue to cause inconsistencies in the marketplace. The Committee
considered a suggestion to lower the minimum maturity requirement, but
determined that the current minimum maturity requirement of 6.5 percent
soluble solids was appropriate and should remain unchanged.
Another suggestion presented was to reduce the number of size
designations. Some Committee members thought that fewer size
designations might lessen confusion in the marketplace. The Committee
did not adopt this suggestion because retailers are familiar with the
various size designations utilized by handlers and have not expressed
concerns with the number of size designations.
After considering these alternatives, the Committee recommended
increasing the size variation tolerance for Size 42 kiwifruit,
increasing the maximum number of fruit per 8-pound sample for Sizes 42
through 30, and suspending, for the 1998-99 season, the minimum tray
weight requirements for kiwifruit packed in cell compartments,
cardboard fillers, or molded trays. The Committee expects these
relaxations to pack requirements to reduce handler packing costs,
increase producer returns, and enable handlers to compete more
effectively in the marketplace.
These changes address the marketing and shipping needs of the
kiwifruit industry and are in the interest of handlers, producers,
buyers, and consumers. The impact of these changes on producers and
handlers is expected to be beneficial for all levels of business.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large kiwifruit handlers. As with all
Federal marketing order programs, reports and forms are periodically
reviewed to reduce information requirements and duplication by industry
and public sectors. In addition, the Department has not identified any
relevant Federal rules that duplicate, overlap, or conflict with this
rule.
Further, the Committee's meeting was widely publicized throughout
the kiwifruit industry and all interested persons were invited to
attend the meeting and participate in Committee deliberations. Like all
Committee meetings, the July 8, 1998, meeting was a public meeting and
all entities, both large and small, were able to express their views on
this issue. The Committee itself is composed of 12 members. Three of
these members are handlers and producers, eight are producers only, and
one is a public member. The majority of the Committee members are small
entities.
Finally, interested persons are invited to submit information on
the regulatory and informational impacts of this action on small
businesses.
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.
This rule invites comments on a relaxation of two pack requirements
and the suspension of the minimum net weight requirements currently
prescribed under the California kiwifruit marketing order. Any comments
received will be considered prior to finalization of this rule.
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 pack requirements; (2) the 1998-99
harvest is expected to begin the end of September, and this rule should
be in effect before that time so producers and handlers can make plans
to operate under the relaxed requirements; (3) the Committee
unanimously recommended these changes at a public meeting and
interested parties had an opportunity to provide input; and (4) this
rule provides a 60-day comment period and any comments received will be
considered prior to finalization of this rule.
List of Subjects in 7 CFR Part 920
Kiwifruit, Marketing agreements, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 920 is
amended as follows:
PART 920--KIWIFRUIT GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 920 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 920.302 is amended by suspending paragraph (a)(4)(iii)
effective September 4, 1998, through July 31, 1999, and revising the
last sentence of paragraph (a)(4)(ii), and the table in paragraph
(a)(4)(iv) to read as follows:
Sec. 920.302 Grade, size, pack, and container regulations.
(a)* * *
(4)* * *
(ii)* * * Not more than 10 percent, by count of the containers in
any lot and not more than 5 percent, by count, of kiwifruit in any
container, (except that for Sizes 42 and 45 kiwifruit, the tolerance,
by count, in any one container, may not be more than 25 percent) may
fail to meet the requirements of this paragraph.
* * * * *
(iv) * * *
------------------------------------------------------------------------
Column 2
maximum
number of
Column 1 numerical count size designation fruit per
8-pound
sample
------------------------------------------------------------------------
21........................................................... 22
25........................................................... 27
27/28........................................................ 30
30........................................................... 33
33........................................................... 36
36........................................................... 42
39........................................................... 48
42........................................................... 53
45........................................................... 55
------------------------------------------------------------------------
* * * * *
Dated: August 28, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-23711 Filed 9-2-98; 8:45 am]
BILLING CODE 3410-02-P