[Federal Register Volume 64, Number 44 (Monday, March 8, 1999)]
[Rules and Regulations]
[Pages 10919-10922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5551]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
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Federal Register / Vol. 64, No. 44 / Monday, March 8, 1999 / Rules
and Regulations
[[Page 10919]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Docket No. FV99-989-3 IFR]
Raisins Produced From Grapes Grown in California; Final Free and
Reserve Percentages for 1998-99 Zante Currant Raisins
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This rule establishes final volume regulation percentages for
1998-99 Zante Currant raisins covered under the Federal marketing order
for California raisins (order). The order regulates the handling of
raisins produced from grapes grown in California and is administered
locally by the Raisin Administrative Committee (Committee). The volume
regulation percentages are 85 percent free and 15 percent reserve. Free
tonnage raisins may be sold by handlers to any market. Reserve raisins
must be held in a pool for the account of the Committee and are
disposed of through various programs authorized under the order. The
volume regulation percentages are intended to help the industry manage
its supply of Zante Currant raisins and strengthen market conditions.
DATES: Effective: March 9, 1999. Comments received by May 7, 1999 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) 720-5698. 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: Maureen T. Pello, Marketing
Specialist, California Marketing Field Office, Fruit and Vegetable
Programs, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno,
California 93721; telephone: (559) 487-5901, Fax: (559) 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, or Fax:
(202) 720-5698. Small businesses may request information on complying
with this regulation, or obtain a guide on complying with fruit,
vegetable, and specialty crop marketing agreements and orders by
contacting Jay Guerber, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S,
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 720-
5698, or E-mail: Jay__N__G[email protected]. You may view the marketing
agreement and order small business compliance guide at the following
web site: http://www.ams.usda.gov/fv/moab.html.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 989 (7 CFR part 989), both as amended,
regulating the handling of raisins produced from grapes 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. Under the order provisions now in effect, final free
and reserve percentages may be established for raisins acquired by
handlers during the crop year. This rule establishes final free and
reserve percentages for Zante Currant raisins for the 1998-99 crop
year, which began August 1, 1998, and ends July 31, 1999. 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 an action is filed not
later than 20 days after the date of the entry of the ruling.
This rule establishes final volume regulation percentages for 1998-
99 crop Zante Currant raisins covered under the order. The volume
regulation percentages are 85 percent free and 15 percent reserve. Free
tonnage raisins may be sold by handlers to any market. Reserve raisins
must be held in a pool for the account of the Committee and are
disposed of through various programs authorized under the order. For
example, reserve raisins may be sold by the Committee to handlers for
free use or to replace part of the free tonnage raisins they exported;
used in diversion programs; carried over as a hedge against a short
crop the following year; or disposed of in other outlets not
competitive with those for free tonnage raisins, such as government
purchase, distilleries, or animal feed. The volume regulation
percentages are intended to help the industry manage its supply of
Zante Currant raisins and strengthen market conditions. Final
percentages were recommended by the Committee at a meeting on February
11, 1999.
Section 989.54 of the order prescribes the procedures and time
frames to be followed in establishing volume regulation. This includes
methodology used to calculate percentages. Pursuant to Sec. 989.54(a)
of the order, the Committee met on August 13, 1998, to review shipment
and inventory data, and other matters relating to the
[[Page 10920]]
supplies of raisins of all varietal types. The Committee computed a
trade demand for each varietal type for which a free tonnage percentage
might be recommended. Trade demand is computed using a formula
specified in the order and, for each varietal type, is equal to 90
percent of the prior year's shipments of free tonnage and reserve
tonnage raisins sold for free use into all market outlets, adjusted by
subtracting the carryin on August 1 of the current crop year and by
adding the desirable carryout at the end of that crop year. As
specified in Sec. 989.154, the desirable carryout for each varietal
type is equal to the shipments of free tonnage raisins of the prior
crop year during the months of August, September, and one-half of
October. In accordance with these provisions, the Committee computed
and announced a 1998-99 trade demand for Zante Currant raisins at 3,215
tons as shown below.
Computed Trade Demand
[Natural condition tons]
------------------------------------------------------------------------
Zante
Currant
raisins
------------------------------------------------------------------------
Prior year's shipments...................................... 4,121
Multiplied by 90 percent.................................... 0.90
Equals adjusted base........................................ 3,709
Minus carryin inventory..................................... 1,188
Plus desirable carryout..................................... 694
Equals computed trade demand................................ 3,215
------------------------------------------------------------------------
Section 989.54(b) of the order requires that the Committee
announce, on or before October 5, preliminary crop estimates and
determine whether volume regulation is warranted for the varietal types
for which it computed a trade demand. That section allows the Committee
to extend the October 5 date up to 5 business days if warranted by a
late crop.
The 1998-99 crop was unusually late because of the combined effect
of adverse crop conditions during the spring of 1998 created by the
weather phenomenon known as El Nino, scattered rain during the fall
harvest, and a shortage of labor once the grapes were ready for
harvest. The crop is normally harvested during late August and early
September; this season's crop was harvested about 3-4 weeks later.
Because of the late crop, the Committee met on October 8, 1998, and
announced preliminary crop estimates for all nine varietal types of
raisins covered under the order. To guard against an underestimation of
the crop, the Committee computed preliminary volume regulation
percentages for five of the nine varietal types of raisins covered
under the order--Dipped Seedless, Natural (sun-dried) Seedless
(Naturals), Oleate and Related Seedless, Other Seedless, and Zante
Currant raisins. The total crop was initially estimated at 321,486
tons.
As more information became available during the following months,
the Committee determined that volume regulation was only warranted for
Zante Currant raisins. The other varietal types of raisins for which
preliminary percentages were computed are produced from grapes that
mature later than Zante Currants, and thus the crop sizes for these
varietal types were more adversely affected by the poor weather
conditions and labor problems. The Committee ultimately determined that
the supplies of these other varietal types would be less than or close
to their computed trade demands, and that volume regulation percentages
were not needed. Based on the most recent information available, the
total crop estimate was reduced from 321,486 to 276,510 tons. This is
the first time in 16 years that volume regulation was not implemented
for Naturals, the major varietal type of California raisin (crop
estimate reduced from 280,092 to 235,000 tons, about 35 percent lower
than the 10-year average of 360,183 tons). As in past seasons, the
Committee submitted its marketing policy to the Department for review.
Regarding Zante Currant raisins, the Committee announced its
preliminary crop estimate at its October 1998 meeting at 3,684 tons. As
indicated in the preceding paragraph, Zante Currants mature earlier
than the other varietal types of raisins covered under the order. Thus,
producers were able to harvest their Zante Currants before it rained in
the production area and before labor was in short supply. With the
preliminary crop estimate (3,684 tons), 1997-98 carryin inventory
(1,188 tons), and reserve raisins released for free use through an
export program (483 tons) totaling to a supply of 5,355 tons, about 66
percent higher than trade demand (3,215 tons), and the 1997-98 carryin
inventory (1,188 tons) about 71 percent higher than the desirable
inventory (694 tons), the Committee determined that volume regulation
for Zante Currant raisins was warranted.
At the October meeting, the Committee also computed preliminary
free and reserve percentages for Zante Currants which released 65
percent of the computed trade demand since the field price had not been
established. The preliminary percentages were 57 percent free and 43
percent reserve. These percentages were modified to release 85 percent
of the trade demand on October 16, 1998 when the Zante Currant field
price was established. The Zante Currant preliminary percentages were
thus modified to 74 percent free and 26 percent reserve. The Committee
met on November 13, 1998, and announced interim percentages for Zante
Currant raisins at 85 percent free and 15 percent reserve which, based
on the 3,684 ton crop estimate, released less than the computed trade
demand. On January 15, 1999, the Committee revised its crop estimate
for Zante Currants from 3,684 to 3,801 tons.
Various programs to utilize reserve Zante Currant raisins were
implemented when volume regulation was in effect during the 1994-95,
1995-96, and 1997-98 seasons to help reduce inventories, and help
strengthen total producer prices (which includes proceeds from both
free tonnage plus reserve pool Zante Currants) from $412.56 per ton in
1994-95 to an estimated high of $730 per ton in 1997-98. The Committee
is implementing a reserve program this year which is expected to help
the industry export more Zante Currants, thereby reducing the
industry's oversupply, helping to build export markets, and ultimately
improving producer returns.
Without such programs, the Committee estimates that its export
shipments would be reduced, thereby reducing overall Zante Currant
shipments for the crop year. Reduced shipments for the current year
would create a high carryin inventory which would result in a lower
computed trade demand for next year, a lower free tonnage percentage,
should volume regulation be implemented, and likely reduced returns to
1999-2000 crop raisin producers. The implementation of volume
regulation for 1998-99 Zante Currant raisins is expected to help manage
supply and strengthen market conditions.
As required under Sec. 989.54(d) of the order, the Committee
recommended to the Secretary at its meeting on February 11, 1999, final
free and reserve percentages for Zante Currant raisins which, when
applied to the final production estimate, will tend to release the full
trade demand for Zante Currants. With the increased crop estimate of
3,801 tons, final percentages computed to the same figures as the
interim percentages--85 percent free and 15 percent reserve. The
Committee's calculations to arrive at final percentages are shown in
the table below.
[[Page 10921]]
Final Volume Regulation Percentages
[Tonnage as natural condition weight]
------------------------------------------------------------------------
Zante
Currant
raisins
------------------------------------------------------------------------
Trade demand................................................. 3,215
Divided by crop estimate..................................... 3,801
Equals free percentage....................................... 85
100 minus free percentage equals reserve percentage.......... 15
------------------------------------------------------------------------
In addition, the Department's ``Guidelines for Fruit, Vegetable,
and Speciality Crop Marketing Orders'' (Guidelines) specify that 110
percent of recent years' sales should be made available to primary
markets each season for marketing orders utilizing reserve pool
authority. This goal will be met for Zante Currants by the
establishment of final percentages which release 100 percent of the
trade demand and the offer of additional reserve raisins for sale to
handlers under the ``10 plus 10 offers.'' As specified in
Sec. 989.54(g), the 10 plus 10 offers are two offers of reserve pool
raisins which are made available to handlers during each season.
Handlers may sell their 10 plus 10 raisins to any market. For each such
offer, a quantity of reserve raisins equal to 10 percent of the prior
year's shipments is made available for free use.
About 824 tons of raisins will be made available in the 10 plus 10
offers (which includes 423 tons of remaining 1997 reserve Zante
Currants), or 412 tons per offer. Both offers will be held
simultaneously in March 1999. Adding the 824 tons of 10 plus 10 raisins
to the 3,215 ton trade demand figure, plus 1,188 tons of 1997-98
carryin inventory equates to about 5,227 tons natural condition raisins
or 4,645 tons packed raisins that will be made available for free use,
or to the primary market. This is 127 percent of the quantity of Zante
Currants shipped in 1997 (4,121 tons natural condition tons or 3,662
packed tons).
In addition to the 10 plus 10 offers, Sec. 989.67(j) of the order
provides authority for sales of reserve raisins to handlers under
certain conditions such as a national emergency, crop failure, change
in economic or marketing conditions, or if free tonnage shipments in
the current crop year exceed shipments of a comparable period of the
prior crop year. Such reserve raisins may be sold by handlers to any
market. These additional offers of reserve raisins would thus make even
more raisins available to primary markets which is consistent with the
Department's Guidelines.
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 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 California raisins who are
subject to regulation under the order and approximately 4,500 raisin
producers in the regulated area. Almost all of the 20 handlers handled,
and about 130 of the 4,500 raisin producers produced Zante Currants
during the 1998-99 crop year. 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 having annual receipts of
less than $500,000. No more than 7 handlers, and a majority of
producers, of California raisins may be classified as small entities.
Thirteen of the 20 handlers subject to regulation have annual sales
estimated to be at least $5,000,000, and the remaining 7 handlers have
sales less than $5,000,000, excluding receipts from any other sources.
Pursuant to Sec. 989.54(d) of the order, this rule establishes
final volume regulation percentages for 1998-99 crop Zante Currant
raisins. The volume regulation percentages are 85 percent free and 15
percent reserve. Free tonnage raisins may be sold by handlers to any
market. Reserve raisins must be held in a pool for the account of the
Committee and are disposed of through certain programs authorized under
the order. Volume regulation is warranted for Zante Currants this
season because the crop estimate of 3,801 tons combined with the 1997-
98 carryin inventory of 1,188 tons, plus 483 tons of reserve raisins
released for free use through an export program, results in a supply of
5,472 tons which exceeds the trade demand of 3,215 tons by about 70
percent. The volume regulation percentages are intended to help the
industry manage its supply of Zante Currant raisins and strengthen
market conditions.
Many years of marketing experience led to the development of the
current volume regulation procedures. These procedures have helped the
industry address its marketing problems by keeping supplies in balance
with domestic and export market needs, and strengthening market
conditions. The current volume regulation procedures fully supply the
domestic and export markets, provide for market expansion, and help
prevent oversupplies in the domestic market.
The free and reserve percentages established by this rule release
the full trade demand and apply uniformly to all handlers in the
industry, regardless of size. With the exception of the 1996-97 season,
small and large Zante Currant raisin producers and handlers have been
operating under volume regulation percentages every year since 1994-95.
There are no known additional costs incurred by small handlers that are
not incurred by large handlers. All handlers are regulated based on the
quantity of raisins which they acquire from producers. While the level
of benefits of this rulemaking are difficult to quantify, the
stabilizing effects of volume regulation impact both small and large
handlers positively by helping them maintain orderly marketing
conditions by managing supply.
Various programs to utilize reserve Zante Currant raisins were
implemented when volume regulation was in effect during the 1994-95,
1995-96, and 1997-98 seasons. As shown in the table following this
paragraph, although production varied during those years, volume
regulation helped to reduce inventories, and helped to strengthen total
producer prices (which includes proceeds from both free tonnage plus
reserve pool Zante Currants) from $412.56 per ton in 1994-95 to an
estimated high of $730 per ton in 1997-98. The Committee is
implementing a reserve program this year which is expected to help the
industry export more Zante Currants, thereby reducing the industry's
oversupply, helping to build export markets, and ultimately improving
producer returns.
[[Page 10922]]
Zante Currant Inventories and Producer Prices During Years of Volume Regulation
[*Natural condition tons]
----------------------------------------------------------------------------------------------------------------
Inventory* Total season
-------------------------------- average
Crop Year Production* producer
Desirable Physical prices (per
ton)
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1994-95......................................... 5,377 837 4,364 $412.56
1995-96......................................... 3,294 782 2,890 711.32
1996-97......................................... 4,491 987 549 \1\ 1,150.00
1997-98......................................... 4,826 694 1,188 730.00
----------------------------------------------------------------------------------------------------------------
\1\ No volume regulation.
Free and reserve percentages are established by variety, and only
in years when the supply exceeds the trade demand by a large enough
margin that the Committee believes volume regulation is necessary to
maintain market stability. Accordingly, in assessing whether to apply
volume regulation or, as an alternative, not to apply such regulation,
the Committee recommended that volume regulation was only warranted for
Zante Currant raisins this season. Preliminary volume regulation
percentages were computed and announced in October 1998 for four other
varietal types of California raisins. As more information became
available in the following months, the Committee determined that the
supplies of these other varietal types would be less than or close to
their computed trade demands; thus, the Committee determined that
volume regulation was not warranted.
There are some reporting, recordkeeping and other compliance
requirements under the order. The reporting and recordkeeping burdens
are necessary for compliance purposes and for developing statistical
data for maintenance of the program. The requirements are the same as
those applied last season. Thus, this action will not impose any
additional reporting or recordkeeping burdens on either small or large
handlers. The forms require information which is readily available from
handler records and which can be provided without data processing
equipment or trained statistical staff. The information and
recordkeeping requirements have been previously approved by the Office
of Management and Budget (OMB) under OMB Control No. 0581-0178. As with
other, similar marketing order programs, reports and forms are
periodically studied to reduce or eliminate duplicate information
collection burdens by industry and public sector agencies.
In addition, the Department has not identified any relevant Federal
rules that duplicate, overlap, or conflict with this rule. Finally,
interested persons are invited to submit information on the regulatory
and informational impacts of this action on small businesses.
Further, Committee and subcommittee meetings are widely publicized
in advance and are held in a location central to the production area.
The meetings are open to all industry members, including small business
entities, and other interested persons who are encouraged to
participate in the deliberations and voice their opinions on topics
under discussion. Thus, Committee recommendations can be considered to
represent the interests of small business entities in the industry.
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 for a 60-day period on the establishment
of final volume regulation percentages for 1998-99 crop Zante Currant
raisins covered under the order. All comments received within the
comment period 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) The relevant provisions of this part require that
the percentages designated herein for the 1998-99 crop year apply to
all Zante Currant raisins acquired from the beginning of that crop
year; (2) handlers are currently marketing 1998-99 crop Zante Currant
raisins and this action should be taken promptly to achieve the
intended purpose of making the full trade demand available to handlers;
(3) handlers are aware of this action, which the Committee unanimously
recommended at an open meeting, and need no additional time to comply
with these percentages; and (4) this interim final 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 989
Grapes, Marketing agreements, Raisins, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 989 is
amended to read as follows:
PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 989 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 989.252 is added to Subpart--Supplementary Regulations
to read as follows:
Note: This section will not appear in the annual Code of Federal
Regulations.
Sec. 989.252 Final free and reserve percentages for the 1998-99 crop
year.
The final percentages for standard Zante Currant raisins acquired
by handlers during the crop year beginning on August 1, 1998, which
shall be free tonnage and reserve tonnage, respectively, are designated
as follows:
------------------------------------------------------------------------
Free Reserve
Varietal type percentage percentage
------------------------------------------------------------------------
Zante Currant................................... 85 15
------------------------------------------------------------------------
Dated: March 2, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-5551 Filed 3-5-99; 8:45 am]
BILLING CODE 3410-02-P