[Federal Register Volume 64, Number 44 (Monday, March 8, 1999)]
[Proposed Rules]
[Pages 11346-11357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5552]



[[Page 11345]]

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Part XIV





Department of Agriculture





_______________________________________________________________________



Agricultural Marketing Service



_______________________________________________________________________



7 CFR Parts 916 and 917



Nectarines and Peaches Grown in California; Revision of Handling 
Requirements for Fresh Nectarines and Peaches; Proposed Rule

  Federal Register / Vol. 64, No. 44 / Monday, March 8, 1999 / Proposed 
Rules  

[[Page 11346]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV99-916-2 PR]


Nectarines and Peaches Grown in California; Revision of Handling 
Requirements for Fresh Nectarines and Peaches

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This rule invites comments on revisions to the handling 
requirements for California nectarines and peaches by modifying the 
grade, size, maturity, and container marking requirements for fresh 
shipments of these fruits, beginning with 1999 season shipments. This 
rule would also authorize continued shipments of ``CA Utility'' quality 
nectarines and peaches during the 1999 season with an increased 
percentage of U.S. No. 1 nectarines and peaches in each container. This 
rule would enable handlers to continue shipping fresh nectarines and 
peaches meeting consumer needs in the interest of producers, handlers, 
and consumers of these fruits.

DATES: Comments must be received by March 29, 1999.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S, 
Washington, DC 20090-6456; Fax: (202) 720-5698; 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 at the Office 
of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, or 
Kurt J. Kimmel, Regional Manager, California Marketing Field Office, 
Marketing Order Administration Branch, 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, Fax: (202) 720-5698. Small 
businesses may request information on compliance 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 proposal is issued under Marketing 
Agreements Nos. 124 and 85, and Marketing Order Nos. 916 and 917 (7 CFR 
parts 916 and 917) regulating the handling of nectarines and peaches 
grown in California, respectively, hereinafter referred to as the 
``orders.'' The marketing agreements and orders are 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 proposal 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 proposal invites comment on revisions to the handling 
requirements currently prescribed for shipments of fresh nectarines and 
peaches under the orders.
    Under the orders, grade, size, maturity, and container and pack 
requirements are established for fresh shipments of California 
nectarines and peaches. Such requirements are in effect on a continuing 
basis. The Nectarine Administrative Committee (NAC) and the Peach 
Commodity Committee (PCC) (committees), which are responsible for local 
administration of the orders, met on December 2, 1998, and unanimously 
recommended that these handling requirements be revised for the 1999 
season, which begins April 1, with one exception. The Nectarine 
Administrative Committee voted 4 in favor and 3 opposed to continuing 
shipments of ``CA Utility'' quality nectarines with an increased 
percentage of U.S. No. 1 nectarines in boxes of ``CA Utility'' quality 
nectarines; and the Peach Commodity Committee voted 7 in favor and 4 
opposed to continuing shipments of ``CA Utility'' quality peaches with 
an increased percentage of U.S. No. 1 peaches in boxes of ``CA 
Utility'' quality peaches. The nectarine order requires six concurring 
votes on recommendations for regulations and the peach order requires 
nine concurring votes on recommendations for regulations. As a result, 
these two votes did not meet the minimums prescribed to constitute 
official recommendations to the Secretary. Nectarine and peach handlers 
have been authorized to ship ``CA Utility'' quality fruit since the 
1996 season, and such shipments have comprised about two percent of 
total shipments. Such fruit is mature but of a lower quality than U.S. 
No. 1 fruit and is acceptable in some markets. If shipments of ``CA 
Utility'' quality fruit are not permitted, only higher-quality fruit 
could be shipped.
    Because prior season experience shows that the authority to ship 
``CA Utility'' quality fruit provided additional marketing 
opportunities for handlers, the Department is proposing continuing to 
allow such shipments during 1999. Inviting written comments on this 
matter will give all interested persons the opportunity to submit 
detailed information which can be used to help the Department decide on 
the best course of action.
    The changes would: (1) Require that maturity and ``CA Utility'' 
quality marking of containers be a minimum of \3/8\ inch in height; (2) 
require that experimental containers and 22G containers be marked with 
both the size and the count of fruit contained in the package; (3) 
require that master containers of consumer packages be marked with the 
minimum size fruit contained in the consumer packages; (4) add weight 
counts for early-season, mid-

[[Page 11347]]

season, and late-season varieties; (5) continue shipments of ``CA 
Utility'' quality nectarines and peaches, and increase the percentage 
of U.S. No. 1 nectarines and peaches permitted in containers of ``CA 
Utility quality'' fruit from the current 30 percent to 40 percent, 
provided that the additional 10 percent of U.S. No. 1 fruit in the 
container has non-scoreable blemishes; and (6) revise varietal maturity 
and size requirements to reflect recent changes in growing conditions.
    The committees meet prior to and during each season to review the 
rules and regulations effective on a continuing basis for California 
nectarines and peaches under the orders. Committee meetings are open to 
the public, and interested persons may express their views at these 
meetings. The Department reviews committee recommendations and 
information, as well as information from other sources, and determines 
whether modification, suspension, or termination of the rules and 
regulations would tend to effectuate the declared policy of the Act.
    No official crop estimate was available at the time of the 
committees' meetings because the nectarine and peach trees are dormant. 
The committees will recommend a crop estimate at their meetings in 
early spring. However, preliminary estimates indicate that the 1999 
crop will be somewhat larger in size but similar in characteristics to 
the 1998 crop which totaled 16,916,900 boxes of nectarines and 
18,202,300 boxes of peaches.

Container Marking Requirements

    Sections 916.52 and 917.41 of the orders for nectarines and 
peaches, respectively, authorize container marking requirements. 
Requirements for container markings are specified in Secs. 916.350 and 
917.442 of the orders' rules and regulations. Container marking 
requirements include marking of the commodity and variety (e.g., July 
Red Nectarines), the size of the fruit in the box (e.g., 80 size), the 
net weight, the maturity (either U.S. Mature (US MAT), or California 
Well-Matured (CA WELL MAT)), or the quality (i.e., ``CA Utility''), on 
each container of nectarines and peaches.
    This proposal would revise paragraphs (a)(3) of Secs. 916.350 and 
917.442 in the orders' rules and regulations to require that maturity 
markings on containers be in letters at least \3/8\ inch in height. 
This proposal would also revise the current quality marking requirement 
in paragraphs (d) of Secs. 916.350 and 917.442 for ``CA Utility'' from 
a minimum of \3/4\ inch in height to a minimum of \3/8\ inch in height. 
These proposed changes would standardize marking requirements on 
containers by specifying a minimum lettering height of \3/8\ inch for 
both maturity and quality markings. This is intended to assure that all 
containers shipped by nectarine and peach handlers are similarly 
marked.
    The committees unanimously recommended that the lettering 
indicating fruit maturity and quality on containers be standardized at 
a minimum height of \3/8\ inch. The \3/8\ inch minimum would be 
appropriate, given the number of other markings, required or voluntary, 
on each container. Such lettering is also readily legible to the 
Federal or Federal-State Inspection Service (Inspection Service) and 
compliance officers representing the committees. The \3/8\ inch minimum 
letter height standard would also eliminate any confusion among 
handlers about which size is required for markings by reducing the 
currently-required 3/4 inch minimum marking for ``CA Utility'' to a 
minimum \3/8\ inch in height and specifying similar requirements for 
maturity markings.
    Sections 916.350 and 917.442 of the orders' rules and regulations 
also require containers to be marked with the size and/or number of 
pieces of fruit in the container (count).
    In commonly-used containers such as the No. 22D and the No. 32 
boxes the configurations of fruit results in the fruit size and count 
being the same. The No. 22G standard lug box, however, has a different 
shape which results in a different tray-pack configuration than those 
of the No. 22D and the No. 32 boxes. The shape of the No. 22G container 
also imposes tighter limits on the number of fruit that can be tray 
packed in it than the No. 22D and No. 32 boxes, and the fruit size and 
count are not the same. Thus, handlers using it should be required to 
indicate the number of fruit in the container as well as the fruit 
size, since the fruit size and count are not always the same in this 
container. This is also true for some experimental packages, as well, 
since there are no standardized pack configurations for experimental 
packages, and, thus, no standardized basis for comparison against the 
No. 22D and No. 32 boxes is possible. Experimental containers, in 
addition to the No. 22G standard lug box, would be required to be 
marked with both the size and the count of fruit contained in the 
package.
    To lessen the chances of confusion in the marketplace with such 
containers, the committees unanimously recommended requiring that the 
No. 22G standard lug box and experimental containers be marked with 
both the size and count of the fruit contained in the package.
    To implement this change, paragraphs (a)(4)(i) and (a)(4)(ii) of 
Sec. 916.350 would be revised to add the requirement that experimental 
containers be marked with both the size and count of nectarines 
contained within the containers. Paragraph (a)(4)(ii) of Sec. 917.442 
would also be revised to add the requirement that the No. 22G standard 
lug box be marked with both the size and count of peaches contained 
within the container.
    Sections 916.350 and 917.442 also specify markings that are 
required on master containers of consumer packages, consumer packages 
within master containers, and consumer packages not within master 
containers. Master containers must be marked with the net weight of 
each consumer package, the number of individual consumer packages, the 
size description of the fruit in each consumer package, and the name 
and address of the shipper. Consumer packages within the master 
containers must be marked with the name and address of the shipper and 
the net weight of the container. When the consumer package is not in a 
master container, the consumer package must also be marked with the 
number of fruit in the package, the name of the variety, if known, and 
the maturity of the fruit in the package.
    Authority for consumer packages permits handlers to pack and ship 
nectarines and peaches in other types of containers demanded by their 
customers. The fruit packages are tailored to the requirements of the 
buyer, and the buyer may require the handler to pack consumer packages 
of several different sizes of fruit within the master container. For 
example, a master container may contain five consumer packages. One 
consumer package may contain size 64 nectarines, while two other 
consumer packages may contain size 70 nectarines. The remaining two 
consumer packages may contain size 60 nectarines. In this example, each 
consumer package contains the same size nectarines, but the master 
container contains consumer packages with different nectarine sizes.
    The committees unanimously recommended that such size variations 
from consumer package to consumer package within a master container 
should be indicated on the master container. The committees determined 
that the marking on the master container should accurately and clearly 
reflect the minimum size contained within the package containing the 
smallest size fruit and that the master container contains consumer 
packages with larger

[[Page 11348]]

sized fruit. Thus, a master container would be marked ``Minimum size 60 
and larger'' or ``Minimum size 96 and larger,'' when the consumer 
packages in the master container contain different fruit sizes. This is 
intended to provide more accurate information to the buyers of the 
fruit.
    Thus, paragraph (a)(8)(i) of Sec. 916.350 and paragraph (a)(9)(i) 
of Sec. 917.442 of the orders' rules and regulations would be revised 
to require that the markings on master containers containing consumer 
packages of different sizes of nectarines and peaches specify the 
smallest size in the packages, and, when applicable, indicate that the 
individual packages include larger-sized fruit.

Pack Regulations

    Container markings based on weight-count standards are also 
specified in Tables 1 and 2 of paragraphs (a)(4)(iv) in Secs. 916.350 
and 917.442 of the orders' rules and regulations. The purpose of the 
weight-count standards is to establish the maximum number of nectarines 
or peaches in a 16-pound sample for each individual size designation. 
To facilitate the repacking of nectarines and peaches from tray-packs 
into volume-filled containers, the committees routinely conduct tests 
to determine the optimum weight-count standards for early-season, mid-
season, and late-season nectarines and peaches, respectively, based on 
the sizes of nectarines and peaches in tray-packs. Tray-packs fit into 
standard nectarine and peach boxes and have molded cavities for the 
fruit to sit in. Trays with different cavity sizes are used, depending 
upon the size of the fruit being packed. Handlers have traditionally 
used tray-packs to securely package nectarines and peaches. However, 
some handlers have moved away from tray-packed configurations toward 
volume-filled configurations in recent years.
    Handlers of nectarines and peaches have informed the committees 
that some larger sizes of nectarines and peaches are increasingly being 
converted from tray-packs to volume-filled packs. Since volume-filled 
containers are less costly to pack and market demands change, handlers 
have opted to pack a greater proportion of the larger-sized, high-
quality fruit in volume-filled containers.
    Size studies were performed by the NAC and PCC in 1994 and 1995, 
and were used as a basis for changing some of the weight counts. 
Because nectarines and peaches of size 44 were not packed in volume-
filled containers, no weight counts were published for size 44 
nectarines and peaches at that time. As the practice of converting 
tray-packed containers of size 44 nectarines and peaches to volume-
filled containers has increased, the need to publish a weight-count 
standard also increased.
    The committees have used the previously-conducted size studies to 
determine the weight-count standards for size 44 nectarine and peach 
sizes for inclusion in the weight-count standards. The NAC has 
determined that the weight-count standard for size 44 should be a 
maximum of 33 pieces for early-season nectarines and a maximum of 30 
pieces of mid-season and late-season nectarines in a 16-pound sample. 
The PCC has determined that the weight count standard for size 44 
should be a maximum of 33 pieces of fruit in a 16-pound sample for all 
peach varieties.
    Therefore, the NAC and PCC unanimously recommended modifications to 
the weight-count standards for nectarines and peaches by the addition 
weight-count standards for size 44 nectarines and peaches. To implement 
such a change, Tables 1 and 2 of paragraphs (a)(4)(iv) in Secs. 916.350 
and 917.442 of the regulations are proposed to be modified by adding 
size 44 and the applicable weight-count standard of a maximum of 33 
pieces of early-season nectarines and all peaches, and a maximum of 30 
pieces of mid-season and late-season nectarines in a 16-pound sample. 
These changes would permit handlers to more easily convert tray-packed 
nectarines and peaches to volume-filled containers, decrease the 
handling costs associated with that conversion, and meet marketing 
demands.

Quality Requirements

    Sections 916.52 and 917.41 of the orders authorize the 
establishment of grade and quality requirements for nectarines and 
peaches, respectively. Prior to the 1996 season, Sec. 916.356 of the 
order's rules and regulations required nectarines to meet a modified 
U.S. No. 1 grade. Specifically, nectarines were required to meet U.S. 
No. 1 grade requirements, except there was a slightly tighter 
requirement for scarring and a more liberal allowance for misshapen 
fruit. Under Sec. 917.459 of the order's rules and regulations prior to 
the 1996 season, peaches were also required to meet the requirements of 
a U.S. No. 1 grade, except there was a more liberal allowance for open 
sutures that were not ``serious damage.''
    Under Secs. 916.356 and 917.459, shipments of ``CA Utility'' 
quality nectarines and peaches have been permitted since the 1996 
season, contingent upon such containers meeting certain relaxed quality 
requirements. ``CA Utility'' quality is a lower-quality fruit than U.S. 
No. 1. Currently, the requirement for containers of ``CA Utility'' 
nectarines and peaches provides that not more than 30 percent of the 
fruit in any container meet or exceed the requirements of U.S. No. 1. 
This proposal would allow handlers to continue shipping ``CA Utility'' 
fruit during the 1999 season, and increase the 30 percent limitation to 
not more than 40 percent except that the additional 10 percent of the 
U.S. No. 1 fruit must have non-scoreable blemishes.
    Containers marked ``CA Utility'' must be inspected by the 
Inspection Service and certified as meeting the ``CA Utility'' quality 
requirements. Part of the inspection process is to evaluate the fruit 
in accordance with the requirements of the U.S. Standards for Grades of 
Nectarines, the U.S. Standards for Grade of Peaches, (Standards) and 
the orders. In conducting inspections, inspectors are required to 
evaluate various blemishes. Some blemishes are serious or severe enough 
to be ``scored'' against the fruit as defects which are damaging to the 
grade of the fruit, while some other blemishes are not serious or 
severe enough to affect the grade of the fruit. In the first instance, 
the blemishes are termed ``scoreable'' defects; and, in the second 
instance, the blemishes are termed ``non-scoreable'' defects. Some 
members of the committees supported a requirement that such non-
scoreable blemishes must be present on the additional 10 percent of the 
fruit grading U.S. No. 1 in boxes marked ``CA Utility'' during the 1999 
season.
    A similar requirement was in place during the latter part of the 
1998 season. At that time, unseasonal summer rains had caused increased 
``non-scoreable'' defects which detracted from the overall appearance 
of U.S. No. 1 nectarines and peaches for some handlers. An interim 
final rule was published on September 22, 1998 (63 FR 50461), and a 
final rule was published on November 9, 1998 (63 FR 60209).
    While containers marked ``CA Utility'' fruit are subject to relaxed 
quality requirements, all other grade and marking requirements of the 
orders must be met.
    At the committee meetings on December 2, 1998, at least one handler 
complained that fruit with non-scoreable blemishes was unsightly in the 
type of U.S. No. 1 box he offered to the marketplace and to his 
customers. His preference was to place such fruit in boxes marked ``CA 
Utility.'' The current limitation of not more than 30 percent U.S. No. 
1 fruit in containers marked ``CA Utility'' caused the Inspection 
Service to determine that his ``CA

[[Page 11349]]

Utility'' containers were ``out of grade,'' because they contained more 
U.S. No. 1 fruit than permitted. For that reason, the handler was 
forced to remove the fruit from the ``CA Utility'' boxes, and either 
repack his U.S. No. 1 to include this fruit or discard the fruit. 
Therefore, the limitation of not more than 30 percent U.S. No. 1 in 
``CA Utility'' quality containers became a hindrance and was eliminated 
by the September 22, 1998, rulemaking action.
    A niche market exists for ``CA Utility'' quality fruit and an 
opportunity should be made available to market somewhat better quality. 
It was estimated by a handler of ``CA Utility'' quality fruit that the 
relaxation from not more than 30 percent U.S. No. 1 in the containers 
to not more than 40 percent provided that the additional 10 percent 
U.S. No. 1 in the containers has non-scoreable blemishes will increase 
shipments of ``CA Utility'' quality nectarines and peaches by 
approximately one-half of one percent. A majority of the members of 
both committees supported the change, because the change had been in 
effect at the end of the 1998 season. However, one committee member 
commented that there was little merit to adding one-half of one percent 
to the marketplace. Another indicated that perhaps a review of the 
entire grade structure would address the problem and did not advocate 
relaxing the percentage of U.S. No. 1 in ``CA Utility'' containers. A 
majority of the committee members present voted to relax the percentage 
from 30 percent U.S. No. 1 in containers marked ``CA Utility'' to 40 
percent U.S. No. 1 provided that the additional 10 percent of the U.S. 
No. 1 had non-scoreable blemishes. The vote by the NAC was 4 in favor 
and 3 opposed, and the vote by the PCC was 7 in favor and 4 opposed. 
The nectarine order requires six concurring votes on regulatory 
recommendations, and the peach order requires nine concurring votes on 
regulatory recommendations. As a result, these two votes did not meet 
the minimums prescribed to constitute official recommendations to the 
Secretary.
    Because prior seasons' experience shows that the authority to ship 
``CA Utility'' quality fruit provided additional marketing 
opportunities for handlers, the Department is proposing continuing to 
allow such shipments during 1999. Inviting written comments on this 
matter will give all interested persons the opportunity to submit 
detailed information which can be used to help the Department decide on 
the best course of action on continuing to allow such shipments and on 
the proposed standards for ``CA Utility'' quality fruit.
    Historically, shipments of ``CA Utility'' nectarines represented 
1.1 percent of all nectarine shipments, or approximately 210,000 boxes 
in 1996. In 1997, shipments of ``CA Utility'' nectarines represented 
1.1 percent of all nectarine shipments, or approximately 230,000 boxes. 
In 1998, shipments of ``CA Utility'' nectarines represented 4.5 percent 
of all nectarine shipments, or approximately 760,000 boxes. Shipments 
of ``CA Utility'' peaches represented 1.9 percent of all peach 
shipments, or 366,000 boxes in 1996. In 1997, shipments of ``CA 
Utility'' peaches represented 1.0 percent of all peach shipments, or 
approximately 217,000 boxes. In 1998, shipments of ``CA Utility'' 
peaches represented 3.3 percent of all peach shipments, or 
approximately 602,000 boxes.
    For these reasons, the Department proposes to allow continued 
shipments of ``CA Utility'' quality nectarines and peaches for the 1999 
season with an increase in the percentage of U.S. No. 1 fruit permitted 
in each container. Paragraphs (d) of Secs. 916.350 and 917.442, and 
paragraphs (a)(1) of Secs. 916.356 and 917.459 are proposed to be 
revised to permit shipments of nectarines and peaches meeting revised 
``CA Utility'' quality requirements during the 1999 season.

Maturity Requirements

    Both orders provide (in Secs. 916.52 and 917.41) authority to 
establish maturity requirements for nectarines and peaches, 
respectively. The minimum maturity level currently specified for 
nectarines and peaches is ``mature'' as defined in the standards. 
Additionally, both orders'' rules and regulations provide for a higher, 
``well matured'' classification. For most varieties, ``well-matured'' 
fruit determinations are made using maturity guides (e.g., color 
chips). These maturity guides are reviewed each year by the Shipping 
Point Inspection Service (SPI) to determine whether they need to be 
changed based on the most-recent information available on the 
individual characteristics of each variety.
    These maturity guides established under the handling regulations of 
the nectarine and peach marketing orders have been codified in the Code 
of Federal Regulations as Table 1 to paragraphs (a)(1)(iv) of 
Secs. 916.356 and 917.459, for nectarines and peaches, respectively. 
Currently, Secs. 916.356 and 917.459 include both ``Table 1'' and 
``Table 1 to Paragraphs (a)(1)(iv)''. ``Table 1'' is a duplicate of 
``Table 1 to Paragraphs (a)(1)(iv)'' and would be removed from both 
sections. The latter table is referred to as ``Table 1'' in the 
remainder of this document.
    The requirements in the 1999 handling regulation are the same as 
those which appeared in the 1998 handling regulation with a few 
exceptions. Those exceptions are explained below in this proposed rule.
    Nectarines: Requirements for ``well-matured'' nectarines are 
specified in Sec. 916.356 of the order's rules and regulations. As 
proposed, Table 1 to paragraph (a)(1)(iv) of Sec. 916.356 would be 
revised to add a maturity guide for one nectarine variety. 
Specifically, SPI recommended adding a maturity guide for the Diamond 
Jewel nectarine variety at a maturity guide of L.
    The NAC recommended these maturity requirements based on SPI's 
continuing review of individual maturity characteristics and 
identification of the appropriate maturity guide corresponding to the 
``well-matured'' level of maturity for nectarine varieties in 
production.
    Peaches: Section 917.459 of the order's rules and regulations 
specifies maturity requirements for fresh peaches being inspected and 
certified as being ``well matured.'' Table 1 to paragraph (a)(1)(iv) of 
Sec. 917.459 would be revised to add maturity guides for three peach 
varieties. Specifically, SPI recommended adding the maturity guides for 
the Sweet Scarlet peach variety to be regulated at the J maturity 
guide, and the Lady Sue and Prima Gattie 8 peach varieties to be 
regulated at the L maturity guide.
    The PCC unanimously recommended these maturity requirements based 
on SPI's continuing review of individual maturity characteristics and 
identification of the appropriate maturity guide corresponding to the 
``well-matured'' level of maturity for peach varieties in production.

Size Requirements

    Both orders provide authority to establish size requirements in 
Secs. 916.52 and 917.41. Size regulations provide greater consumer 
satisfaction and encourage more repeat purchases by helping to ensure 
consumers are provided high-quality fruit. Size regulations, therefore, 
increase returns to producers and handlers by encouraging producers to 
leave fruit on the tree longer. The increased growing time not only 
improves the size of the fruit, but also increases its maturity. 
Increased size also results in an increased number of packed boxes of 
nectarines or peaches per acre. Varieties recommended for specific size 
regulation have been reviewed and such

[[Page 11350]]

recommendations are based on the specific characteristics of each 
variety. The NAC and PCC conduct studies each season on the range of 
sizes reached by the regulated varieties and determine whether 
revisions in the size requirements are appropriate.
    Nectarines: Section 916.356 of the order's rules and regulations 
specifies minimum size requirements for fresh nectarines in paragraphs 
(a)(2) through (a)(9). As proposed, Sec. 916.356 would be revised to 
establish variety-specific size requirements for five nectarine 
varieties that were produced in commercially-significant quantities of 
more than 10,000 packages for the first time during the 1998 season.
    For example, one of the varieties recommended for addition to the 
variety-specific size requirements is the Sunny Red variety. Studies of 
the size ranges attained by the Sunny Red variety revealed that all of 
the nectarines of that variety met sizes in the ranges of sizes 30, 40, 
50, 60, 70, and 80. While the size distribution peaked on the size 40, 
100 percent of the fruit sized at a minimum of size 80.
    A review of other varieties with the same harvesting period 
indicated that Sunny Red was also comparable to those varieties in its 
size ranges. Further, handlers known to ship the variety have provided 
additional supporting information for making this determination. Thus, 
the recommendation to place the Sunny Red nectarine variety in the 
variety-specific size regulation at a size 80 would be appropriate. 
Historical variety data such as this provides the NAC with the 
information necessary to recommend the appropriate sizes at which to 
regulate various nectarine varieties. In addition, producers of the 
varieties affected are invited to comment when such size 
recommendations are deliberated.
    Thus, to implement such size requirements, the introductory text of 
paragraph (a)(6) in Sec. 916.356 would be revised to include the Grand 
Pearl, Ruby Pearl, Sunny Red, Terra White, and 491-48 nectarine 
varieties.
    This rule would also revise the introductory text of paragraph 
(a)(4) of Sec. 916.356 to remove two nectarine varieties; and the 
introductory text of paragraph (a)(6) of Sec. 916.356 would be revised 
to remove ten nectarine varieties from the variety-specific size 
requirements specified in this section because less than 5,000 packages 
of each of these varieties were produced during the 1998 season. As 
proposed, the introductory text of paragraph (a)(4) would be revised to 
remove the June Brite and Pacific Star nectarine varieties; and the 
introductory text of paragraph (a)(6) would be revised to remove the 
Flamekist, Flavor Grand, Late How Red, Moon Grand, Prima Diamond XVIII, 
Red Free, Red Fred, Ruby Grand, September Grand, and Summer Star 
nectarine varieties. Nectarine varieties removed from the nectarine 
variety-specific list become subject to the non-listed variety size 
requirements specified in paragraphs (a)(7), (a)(8), and (a)(9) of 
Sec. 916.356.
    The NAC recommended these changes in the minimum size requirements 
based on a continuing review of the sizing and maturity relationships 
for these nectarine varieties, and consumer acceptance levels for 
various sizes of fruit. This proposal would establish minimum size 
requirements for fresh nectarines consistent with expected crop and 
market conditions.
    Peaches: Section 917.459 of the order's rules and regulations 
specifies minimum size requirements for fresh peaches in paragraphs 
(a)(2) through (a)(5), and paragraphs (b) and (c). Section 917.459 
would be revised to establish variety-specific size requirements for 
six peach varieties that were produced in commercially-significant 
quantities of more than 10,000 packages for the first time during the 
1998 season.
    For example, one of the peach varieties recommended for addition to 
the variety-specific size requirements is the Morning Lord variety. 
Studies of the size ranges attained by the Morning Lord variety 
revealed that while it peaked on size 40, 100 percent of the fruit 
sized at a minimum of size 72.
    A review of other varieties harvested during the same period 
indicated that Morning Lord was also comparable to those varieties in 
its size ranges. Further, discussions with handlers known to ship the 
variety provide additional information for making such determinations. 
Thus, the recommendation to place the Morning Lord peach variety in the 
variety-specific size regulation at a size 72 would be appropriate. 
Historical variety data such as this provides the PCC with the 
information necessary to recommend the appropriate sizes at which to 
regulate various peach varieties. In addition, producers of the 
affected varieties are invited to comment when such size 
recommendations are deliberated.
    Accordingly, the introductory text of paragraph (a)(3) of 
Sec. 917.459 of the order's rules and regulations is proposed to be 
revised to include the Super Rich peach variety; the introductory text 
of paragraph (a)(4) would be revised to include the Snow Dance peach 
variety; and the introductory text of paragraph (a)(6) would be revised 
to include the Morning Lord, Prima Peach 23, Yukon King, and 1-01-505 
peach varieties.
    Additionally, paragraphs (a)(5) and (a)(6) of Sec. 917.459 would be 
revised to remove 12 peach varieties from the variety-specific size 
requirements specified in that section, because less than 5,000 
packages of these varieties were produced during the 1998 season. 
Specifically, the introductory text of paragraph (a)(5) would be 
revised to remove the Honey Red and Sweet Gem peach varieties; and the 
introductory text of paragraph (a)(6) of Sec. 917.459 would be revised 
to remove the August Sun, Autumn Crest, Autumn Gem, Belmont, Berenda 
Sun, Blum's Beauty, Fire Red, July Sun, Mary Anne, and Red Sun peach 
varieties.
    Peach varieties removed from the variety-specific list become 
subject to the non-listed variety size requirements specified in 
paragraphs (b) and (c) of Sec. 917.459.
    The PCC recommended these changes in the minimum size requirements 
based on a continuing review of the sizing and maturity relationships 
for these peach varieties, and the consumer acceptance levels for 
various fruit sizes. This proposal would establish minimum size 
requirements for fresh peaches consistent with expected crop and market 
conditions.
    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 325 California nectarine and peach handlers 
subject to regulation under the orders covering nectarines and peaches 
grown in California, and about 1,800 producers of these fruits in 
California. Small agricultural service firms, which includes handlers, 
have been defined by the Small Business Administration (13 CFR 121.601) 
as those whose annual receipts are less than $5,000,000. Small 
agricultural producers are defined as

[[Page 11351]]

those having annual receipts of less than $500,000.
    The NAC and PCC staff have estimated that there are less than 20 
handlers in the industry who could be defined as other than small 
entities. If the average handler price received were $9.00 per box or 
box equivalent of nectarines or peaches, a handler would have to ship 
at least 555,000 boxes to have annual receipts of $5,000,000. Small 
handlers represent approximately 94 percent of the handlers within the 
industry. In addition, the NAC and PCC staff estimates that there are 
approximately 400 producers who could be defined as other than small 
entities. If the average producer price received were $6.00 per box or 
box equivalent for nectarines and $5.65 per box or box equivalent for 
peaches, producers would have to produce approximately 84,000 boxes or 
box equivalents of nectarines and approximately 89,000 boxes or box 
equivalents of peaches to have annual receipts of $500,000. Therefore, 
small producer entities represent approximately 78 percent of the 
producers within the industry. For those reasons, a majority of the 
handlers and producers may be classified as small entities.
    Under Secs. 916.52 and 917.41 of the orders, grade, size, maturity, 
and container and pack requirements are established for fresh shipments 
of California nectarines and peaches, respectively. Such requirements 
are in effect on a continuing basis. This proposed rule would revise 
current requirements to: (1) Require that maturity and ``CA Utility'' 
quality marking of containers be a minimum of \3/8\ inch in height; (2) 
require that experimental containers and 22G containers be marked with 
both the size and the count of fruit contained in the package; (3) 
require that master containers of consumer packages be marked with the 
minimum size fruit contained in the consumer packages; (4) add weight 
counts for early-season, mid-season, and late-season varieties; (5) 
continue shipments of ``CA Utility'' quality nectarines and peaches, 
and increase the percentage of U.S. No. 1 nectarines and peaches 
permitted in containers of ``CA Utility quality'' fruit from the 
current 30 percent to 40 percent, provided that the additional 10 
percent of U.S. No. 1 fruit in the container has non-scoreable 
blemishes; and (6) revise varietal maturity and size requirements to 
reflect recent changes in growing and marketing conditions.
    In Secs. 916.350 and 917.442 of the rules regulating nectarines and 
peaches several container marking requirements are specified. This 
proposal would specify that the maturity markings U.S. Mature (US MAT) 
and California Well-Matured (CA WELL MAT), and the markings for ``CA 
Utility'' quality must be in lettering a minimum of 3/8 inch in height. 
This would standardize the container markings for nectarines and 
peaches and would be consistent with those used on plum containers. 
Plum shipments are regulated under a State marketing order. Because 
nectarine and peach handlers frequently handle plums, as well, this 
would ensure consistency in marking requirements for all three 
commodities, which is expected to benefit handlers.
    Sections 916.350 and 917.442 also specify markings that are 
required on master containers of consumer packages, consumer packages 
within master containers, and consumer packages not within master 
containers. Master containers must be marked with the net weight of 
each consumer package, the number of individual consumer packages, the 
size description of the fruit in each consumer package, and the name 
and address of the shipper. Consumer packages within the master 
containers must be marked with the name and address of the shipper and 
the net weight of the container. When the consumer package is not in a 
master container, the consumer package must also be marked with the 
number of fruit in the package, the name of the variety, if known, and 
the maturity of the fruit in the package.
    In commonly used containers such as the No. 22D and the No. 32 
boxes the configurations of fruit result in the fruit size and count 
being the same. The No. 22G standard lug box, however, has a different 
shape which results in a different tray-pack configuration than those 
of the No. 22D and the No. 32 boxes. The shape of the No. 22G container 
also imposes tighter limits on the number of fruit that can be tray 
packed in it than the No. 22D and No. 32 boxes; this causes fruit size 
and count to be different. Thus, handlers using that container should 
be required to indicate the number of fruit in the container as well as 
the fruit size, because the fruit size and count are not always the 
same in this container. Differences in count and size also occur with 
some experimental packages, as well, because there are no standardized 
pack configurations for experimental packages, and, thus, no 
standardized basis for comparison against the No. 22D and No. 32 boxes. 
Experimental containers, like the No. 22G standard lug box, would be 
required to be marked with both the size and the count of fruit 
contained in the package. This proposed requirement is expected to 
benefit consumers by ensuring that accurate size and count information 
is marked on packages of nectarines and peaches. This proposed 
requirement is not expected to have a negative impact on handlers, 
since the No. 22G standard lug box represents less than one percent of 
packages of nectarines and peaches shipped annually, and no 
experimental containers have been used for several years. This proposed 
requirement may also eliminate any confusion over fruit count and size 
experienced by buyers of nectarines and peaches.
    Sections 916.350 and 917.442 also specify markings that are 
required on master containers of consumer packages, consumer packages 
within master containers, and consumer packages not within master 
containers. Master containers must be marked with the net weight of 
each consumer package, the number of individual consumer packages, the 
size description of the fruit in each consumer package, and the name 
and address of the shipper. Consumer packages within the master 
containers must be marked with the name and address of the shipper and 
the net weight of the container. When the consumer package is not in a 
master container, the consumer package must also be marked with the 
number of fruit in the package, the name of the variety, if known, and 
the maturity of the fruit in the package.
    Consumer packages permit handlers to pack and ship nectarines and 
peaches in other types of containers demanded by their customers. In 
this case, packaging of fruit in small boxes or bags is tailored to the 
requirements of the buyer, whether by weight, size, or other factor. 
Because the buyer's requirements may be specific for the buyer's 
market, the handler may pack consumer packages of several different 
sizes of fruit within the master container. For example, a master 
container may contain five consumer packages. One consumer package may 
contain size 64 nectarines, while two other consumer packages may 
contain size 70 nectarines. The remaining two boxes may contain size 60 
nectarines. The sizes of the fruit within the individual consumer 
packages are the same, but the master container may contain packages of 
different fruit sizes.
    Several alternatives to this action were discussed at the Grade and 
Size Subcommittee meeting held on November 5, 1998. Some subcommittee 
members suggested that the master containers be marked with the largest 
size fruit in the consumer packages, such as ``Minimum size 80 and 
smaller.'' Others felt that option might be misleading to retailers and

[[Page 11352]]

consumers, and the alternative was rejected. Some subcommittee members 
suggested that the mixing of sizes in a master container should be 
discouraged. Others responded that such flexibility in packaging was 
responsive to the needs of some handlers, and those needs should be 
accommodated when possible, within the requirements of the orders.
    The proposed change requiring master containers containing consumer 
packages of different fruit sizes to be marked identifying the 
existence of size variations, would permit handlers to continue to meet 
the demands of their buyers, but ensure that the fruit size within 
individual consumer packages contained within master containers is 
accurately and clearly marked on the master containers.
    In Secs. 916.350 and 917.442 of the orders' rules and regulations 
concerning nectarines and peaches, respectively, the use of pack 
regulations is specified. The NAC and PCC routinely conduct tests to 
determine the optimum weight-count standards for such early-season, 
mid-season, and late-season nectarines and peaches, respectively. 
Handlers of nectarines and peaches have informed the NAC and PCC that 
some larger sizes of nectarines and peaches are increasingly being 
converted from tray-packs to volume-filled packs. Since volume-filled 
containers are less costly to pack and market demands change, handlers 
have opted to pack a greater proportion of large, high-quality fruit in 
volume-filled containers. In 1998, lower market prices caused handlers 
to convert size 44 nectarines and peaches from tray-packed containers 
to volume-filled containers. However, there are currently no weight 
counts published for size 44 nectarines and peaches.
    In 1994 and 1995, when the NAC and PCC last conducted tests to 
determine the number of fruit of various sizes that weighed 16 pounds, 
which is the standard inspection sample weight, size 44 nectarines and 
peaches were not usually packed in volume-filled containers. More 
commonly, size 44 nectarines and peaches were packed in tray-packs. As 
a result, weight count requirements were not needed by the industries 
for this size. As the practice of converting tray-packed containers of 
size 44 nectarines and peaches to volume-filled containers has 
increased, the NAC and PCC have referred to previously-conducted size 
studies and determined that weight-count standards for size 44 
nectarines and peaches need to be included in the weight-count 
standards with those for the other sizes of fruit. The NAC and PCC have 
also determined that the correct weight-count standard for size 44 is a 
maximum of 33 pieces of early-season nectarines and all peaches, and a 
maximum of 30 pieces of mid-season and late-season nectarines in a 16-
pound sample. This proposed addition of a weight-count standard for 
size 44 nectarines and peaches converted from tray-packed containers to 
volume-filled containers is expected to benefit producers and handlers 
by giving handlers increased flexibility in meeting marketing demands.
    Therefore, the NAC and PCC unanimously recommended modifications to 
the weight-count standards for nectarines and peaches by the addition 
weight-count standards for size 44 nectarines and peaches. Such a 
change would modify Tables 1 and 2 of paragraphs (a)(4)(iv) in 
Secs. 916.350 and 917.442 of the regulations by adding size 44 and the 
applicable weight-count standard of a maximum of 33 pieces of early-
season nectarines and all peaches, and a maximum of 30 pieces of mid-
season and late-season nectarines in a 16-pound sample. The change 
would permit handlers to more easily convert tray-packed nectarines and 
peaches to volume-filled containers. This proposal is expected to 
decrease the handling costs associated with such conversions, and 
permit handlers to better meet marketing demands.
    In Secs. 916.356 and 917.459 of the orders' rules and regulations 
concerning nectarines and peaches, respectively, shipments of ``CA 
Utility'' quality nectarines and peaches have been permitted since the 
1996 season, contingent upon such containers meeting certain relaxed 
quality requirements. ``CA Utility'' quality is a lower-quality fruit 
than U.S. No. 1. Currently, the requirement for containers of ``CA 
Utility'' nectarines and peaches provides that not more than 30 percent 
of the fruit in any container meet or exceed the requirements of U.S. 
No. 1. This proposed relaxation would increase that limitation from 30 
percent to not more than 40 percent provided that the additional 10 
percent of the U.S. No. 1 has non-scoreable blemishes. This proposed 
relaxation is anticipated to benefit growers, handlers, and consumers.
    Containers marked ``CA Utility'' must be inspected by the 
Inspection Service and certified as meeting the ``CA Utility'' quality 
requirements. Part of the inspection process is to evaluate the fruit 
in accordance with the requirements of Standards and the orders. In 
conducting inspections, inspectors are required to evaluate various 
blemishes. Some blemishes are serious or severe enough to be ``scored'' 
against the fruit as defects which are damaging to the grade of the 
fruit, while some other blemishes are either not serious or severe 
enough to affect the grade of the fruit. In the first instance, the 
blemishes are termed ``scoreable'' defects; and, in the second 
instance, the blemishes are termed ``non-scoreable'' defects. Some 
committee members supported increased percentages of U.S. No. 1 fruit 
in boxes of ``CA Utility'' quality nectarines and peaches provided that 
such non-scoreable blemishes are present on the additional 10 percent 
of the fruit grading U.S. No. 1 in boxes marked ``CA Utility.''
    A niche market exists for ``CA Utility'' quality fruit and an 
opportunity should be made available to market somewhat better quality. 
It was estimated that the proposed relaxation from not more than 30 
percent U.S. No. 1 to not more than 40 percent provided that the 
additional 10 percent U.S. No. 1 fruit in the containers has non-
scoreable blemishes would increase shipments of ``CA Utility'' quality 
nectarines and peaches by one-half of one percent.
    According to comments made at the committee meetings on December 2, 
1998, a majority of the members of the committees supported allowing 
the use of ``CA Utility'' fruit during the 1999 season, and the change 
in quality requirements, because those requirements solved handler 
problems at the end of the 1998 season. One committee member, however, 
commented that there was little merit to adding one-half of one percent 
to the marketplace. Another indicated that perhaps a review of the 
entire grade structure would address the problem and did not advocate 
relaxing the percentage of U.S. No. 1 in ``CA Utility'' containers.
    The committees considered several alternatives at the meetings. One 
alternative was to leave the percentage of U.S. No. 1 nectarines and 
peaches permitted in ``CA Utility'' unchanged. It was determined that 
alternative would not address the problem facing the industry. The NAC 
and PCC also considered reviewing the entire grade structure, but that 
alternative was considered a long-term project which could not be 
accomplished in enough time to address the problem for the 1999 season. 
Another alternative discussed was to limit the change to handlers 
operating under the Partners-In-Quality (PIQ) Program and allow those 
handlers to pack not more than 40 percent of U.S. No. 1 provided that 
the additional 10 percent of U.S. No. 1 has non-scoreable blemishes. 
Under the PIQ Program, handlers self-inspect their nectarines

[[Page 11353]]

and peaches against the minimum grade, size, quality, maturity, pack, 
and container marking requirements of the orders and the Standards, 
according to the procedures and requirements specified in their 
Inspection-Service-approved operation manuals.
    Under the requirements of the program, PIQ handlers are required to 
meet the minimum grade, maturity, size, quality, container, and pack 
requirements on every container. A handler under conventional in-line 
inspection is required to meet the minimum grade, maturity, size, 
quality, container, and pack requirements on an entire lot of fruit, 
which is not as restrictive as meeting the requirements on every 
container. For example, under in-line inspection, a handler may present 
a lot of 1,000 containers of nectarines or peaches for inspection. The 
tolerance for misshapen nectarines is currently limited to 25 percent 
per lot. The variance in misshapen nectarines in containers within the 
lot could change from one container to another, provided that the 
average within the entire lot does not exceed 25 percent. For PIQ 
handlers, there is no opportunity to ``average within'' grade on lots 
of fruit; each container is graded on its own as though it were a lot. 
PIQ handlers, thus, face more rigorous requirements than handlers under 
conventional in-line inspection. This alternative would address PIQ 
handler concerns by providing them greater flexibility with regard to 
both U.S. No. 1 and ``CA Utility'' quality containers. However, this 
alternative was determined to favor a small percentage of the industry 
and was rejected.
    Some members of the committees supported continued shipments of 
``CA Utility'' quality nectarines and peaches during the 1999 season 
with a relaxation of the percentage from 30 percent U.S. No. 1 in 
containers marked ``CA Utility'' to 40 percent U.S. No. 1, provided 
that the additional 10 percent of the U.S. No. 1 has non-scoreable 
blemishes. They believed that the additional marketing opportunities 
provided by allowing handlers to ship such fruit were important to the 
industries.
    Sections 916.356 and 917.442 of the orders' rules and regulations 
for nectarines and peaches, respectively, currently establish minimum 
maturity levels. This proposed rule would make adjustments to the 
``well matured'' requirements for several varieties of nectarines and 
peaches. ``Well matured'' determinations are made using maturity guides 
(e.g., color chips). Such maturity guides provide producers, handlers, 
and SPI with objective tools for measuring the maturity of different 
varieties of nectarines and peaches. Such maturity guides are reviewed 
annually by SPI to determine the appropriate guide for each nectarine 
and peach variety. These adjustments reflect changes in the maturity 
patterns of nectarines and peaches as experienced over the previous 
seasons' inspections. Adjustments in the guides would ensure that fruit 
has met an acceptable level of maturity, thus ensuring consumer 
satisfaction while benefitting nectarine and peach producers and 
handlers.
    Currently, in Sec. 916.356 of the order's rules and regulations for 
nectarines and Sec. 917.459 of the order's rules and regulations for 
peaches, minimum sizes for various varieties of nectarines and peaches 
are established. This proposed rule would make adjustments to the 
minimum sizes authorized for various varieties of nectarines and 
peaches for the 1999 season. Size regulations provide greater consumer 
satisfaction and encourage more repeat purchases. Repeat purchases and 
consumer satisfaction benefit producers and handlers alike. Such 
adjustments to minimum sizes of nectarines and peaches are recommended 
each year by the NAC and PCC based upon historical data, and producer 
and handler information regarding sizes which the different varieties 
attain.
    The Department has not identified any relevant Federal rules that 
duplicate, overlap, or conflict with this rule. However, as previously 
stated, nectarines and peaches under the orders have to meet certain 
requirements set forth in the standards issued under the Agricultural 
Marketing Act of 1946 (7 U.S.C. 1621 through 1627). Standards issued 
under the Agricultural Marketing Act of 1946 are otherwise voluntary.
    In addition, the committees' meetings were widely publicized 
throughout the nectarine and peach industries and all interested 
parties were invited to attend the meetings and participate in 
committee deliberations on all issues. These meetings are held annually 
in late Fall. Like all committee meetings, the December 2, 1998, 
meetings were public meetings and all entities, both large and small, 
were able to express views on these issues. The committees themselves 
are composed of producers. Finally, interested persons are invited to 
submit information on the regulatory and informational impacts of this 
action on small businesses.
    The NAC and PCC discussions were prompted by a recommendation of 
the Grade and Size Subcommittee, which met on November 5, 1998, to 
discuss issues related to minimum grades and sizes for nectarines and 
peaches shipped under the orders. Among the issues discussed were 
possible changes to the requirements for: (1) ``CA Utility'' quality 
nectarines and peaches, (2) container markings, (3) maturity markings, 
(4) quality requirements, and (5) size requirements. The meeting was a 
public meeting and interested persons were invited to express their 
views.
    A 20-day comment period is provided to allow interested persons to 
respond to this proposal. Twenty days is deemed appropriate because 
this rule should be in place as soon as possible (the 1999 season 
begins April 1) to provide growers and handlers adequate time to make 
needed adjustments in cultural and handling practices. All written 
comments timely received will be considered before a final 
determination is made on this matter.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, 7 CFR parts 916 and 917 
are proposed to be amended as follows:
    1. The authority citation for 7 CFR parts 916 and 917 continues to 
read as follows:

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

PART 916--NECTARINES GROWN IN CALIFORNIA

    2. Section 916.350 is amended by:
    a. Revising paragraph (a)(3);
    b. Revising paragraphs (a)(4)(i) and (a)(4)(ii);
    c. Revising Tables 1 and 2 in paragraph (a)(4)(iv);
    d. Revising paragraph (a)(8)(i); and
    e. Revising paragraph (d) to read as follows:


Sec. 916.350  California nectarine container and pack regulation.

    (a) * * *
    (3) Each package or container of nectarines, except for consumer 
packages in master containers and consumer packages mailed directly to 
consumers, shall bear on one outside end in plain sight and in plain 
letters at least 3/8 inch in height the words ``U.S. Mature'' or ``US 
MAT'' if such nectarines are mature as defined in the United States 
Standards for Grades of Nectarines (7 CFR 51.3145 through 51.3160); or 
may instead bear on one outside end in plain sight and in plain letters 
at least 3/8 inch in height the

[[Page 11354]]

words ``California Well Matured'' or ``CA WELL MAT'' if such nectarines 
are well matured as defined in Sec. 916.356.
    (4) * * *
    (i) The size of nectarines packed in molded forms (tray-packs) in 
the No. 22D and the No. 32 standard boxes, or consumer packages; No. 
22G standard lug boxes, experimental containers; or the No. 12B fruit 
(peach) boxes or flats; and the size of wrapped nectarines packed in 
rows in No. 12B fruit (peach) boxes shall be indicated in accordance 
with the number of nectarines in each container, such as ``80 count,'' 
``88 count,'' etc.
    (ii) The size of nectarines in molded forms (tray-packs) in 
experimental containers and in No. 22G standard lug boxes shall be 
indicated according to the number of such nectarines when packed in 
molded forms in the No. 22D standard lug box or the No. 32 standard box 
in accordance with the requirements of standard pack, such as ``80 
size,'' ``88 size,'' etc., along with count requirements in paragraph 
(a)(4)(i) of this section.
* * * * *
    (iv) * * *

 Table 1--Weight-Count Standards for All Varieties of Nectarines Packed
               in Loose-Filled or Tight-Filled Containers
------------------------------------------------------------------------
                                                            Column B--
                                                          Maximum number
                                                           of nectarines
                                                            in 16-pound
                                                              sample
                                                           applicable to
                                                             varieties
                                                           specified in
                                                            paragraphs
          Column A--Tray pack size designation              (a)(2)(ii),
                                                            (a)(3)(ii),
                                                            (a)(4)(ii),
                                                            (a)(5)(ii),
                                                            (a)(7)(ii),
                                                          and (a)(8)(ii)
                                                              of Sec.
                                                              916.356
 
------------------------------------------------------------------------
108.....................................................             100
96......................................................              90
88......................................................              83
84......................................................              78
80......................................................              75
72......................................................              68
70......................................................              61
64......................................................              56
60......................................................              50
56......................................................              47
54......................................................              40
50......................................................              39
48......................................................              35
44......................................................              33
42......................................................              31
40......................................................              30
36......................................................              25
34......................................................              23
32......................................................              22
30......................................................              19
------------------------------------------------------------------------


 Table 2.--Weight-Count Standards for All Varieties of Nectarines Packed
               in Loose-Filled or Tight-Filled Containers
------------------------------------------------------------------------
                                                       Column B--Maximum
                                                           number of
                                                       nectarines in 16-
                                                          pound sample
                                                         applicable to
         Column A--Tray pack size designation              varieties
                                                          specified in
                                                           paragraphs
                                                         (a)(6)(ii) and
                                                         (a)(9)(ii) of
                                                         Sec.  916.356
------------------------------------------------------------------------
108..................................................                 92
96...................................................                 87
88...................................................                 78
84...................................................                 75
80...................................................                 67
72...................................................                 61
70...................................................                 56
64...................................................                 51
60...................................................                 46
56...................................................                 43
54...................................................                 39
50...................................................                 37
48...................................................                 33
44...................................................                 30
42...................................................                 28
40...................................................                 26
36...................................................                 25
34...................................................                 23
32...................................................                 22
30...................................................                 19
------------------------------------------------------------------------

* * * * *
    (8) * * *
    (i) The number of individual consumer packages, the net weight of 
each consumer package, and the minimum size description of the 
contents, using the terms ``Minimum size 60 and larger,'' or ``Minimum 
size 70 and larger,'' etc., as applicable.
* * * * *
    (d) During the period April 1 through October 31, 1999, each 
container or package when packed with nectarines meeting the ``CA 
Utility'' quality requirements, shall bear the words ``CA Utility,'' 
along with all other required container markings, in letters at least 
\3/8\ inch in height on the visible display panel. Consumer bags or 
packages must also be clearly marked on the consumer bags or packages 
as ``CA Utility,'' along with other required markings, in letters at 
least \3/8\ inch in height.
* * * * *
    3. Section 916.356 is amended by:
    a. Revising the introductory text of paragraph (a)(1);
    b. Removing Table 1;
    c. Revising Table 1 to Paragraph (a)(1)(iv); and
    d. Revising the introductory text of paragraphs (a)(4) and (a)(6) 
to read as follows:


Sec. 916.356  California nectarine grade and size regulation.

    (a) * * *
    (1) Any lot or package or container of any variety of nectarines 
unless such nectarines meet the requirements of U.S. No. 1 grade: 
Provided, That nectarines 2 inches in diameter or smaller, shall not 
have fairly light-colored, fairly smooth scars which exceed an 
aggregate area of a circle \3/8\ inch in diameter, and nectarines 
larger than 2 inches in diameter shall not have fairly light-colored, 
fairly smooth scars which exceed an aggregate area of a circle \1/2\ 
inch in diameter: Provided further, That an additional tolerance of 25 
percent shall be permitted for fruit that is not well formed but not 
badly misshapen: Provided further, That all varieties of nectarines 
which fail to meet the U.S. No. 1 grade only on account of lack of 
blush or red color due to varietal characteristics shall be considered 
as meeting the requirements of this subpart: Provided further, That 
during the period April 1 through October 31, 1999, any handler may 
handle nectarines if such nectarines meet ``CA Utility'' quality 
requirements. The term ``CA Utility'' means that not more than 40 
percent of the nectarines in any container meet or exceed the 
requirements of the U.S. No. 1 grade, except that when more than 30 
percent of the nectarines in any container meet or exceed the 
requirements of U.S. No. 1 grade, the additional 10 percent shall have 
non-scoreable blemishes as determined when applying the U.S. Standards 
for Grades of Nectarines; and that such nectarines are mature and are:
* * * * *

[[Page 11355]]



                     Table 1 To Paragraph (a)(1)(iv)
------------------------------------------------------------------------
                                                             Column B
                    Column A variety                      maturity guide
------------------------------------------------------------------------
Alshir Red..............................................               J
Apache..................................................               G
April Glo...............................................               H
Arm King................................................               B
August Glo..............................................               L
August Lion.............................................               J
August Red..............................................               J
Aurelio Grand...........................................               F
Autumn Delight..........................................               L
Autumn Grand............................................               L
Big Jim.................................................               J
Bob Grand...............................................               L
Diamond Jewel...........................................               L
Diamond Ray.............................................               L
Earliglo................................................               I
Early Diamond...........................................               J
Early May...............................................               F
Early May Grand.........................................               H
Early Red Jim...........................................               J
Early Sungrand..........................................               H
Fairlane................................................               L
Fantasia................................................               J
Firebrite...............................................               H
Flamekist...............................................               L
Flaming Red.............................................               K
Flavor Grand............................................               G
Flavortop...............................................               J
Flavortop I.............................................               K
Grand Diamond...........................................               L
Independence............................................               H
July Red................................................               L
June Brite..............................................               I
Juneglo.................................................               H
Kay Diamond.............................................               L
King Jim................................................               L
Kism Grand..............................................               J
Late Le Grand...........................................               L
Late Red Jim............................................               J
Maybelle................................................               F
May Diamond.............................................               I
May Fire................................................               H
Mayglo..................................................               H
May Grand...............................................               H
May Jim.................................................               I
May Kist................................................               H
May Lion................................................               J
Mid Glo.................................................               L
Mike Grand..............................................               H
Moon Grand..............................................               L
Niagara Grand...........................................               H
Pacific Star............................................               G
P-R Red.................................................               L
Red Diamond.............................................               L
Red Delight.............................................               I
Red Fred................................................               J
Red Free................................................               L
Red Glen................................................               J
Red Glo.................................................               I
Red Grand...............................................               H
Red Jim.................................................               L
Red May.................................................               J
Rio Red.................................................               L
Rose Diamond............................................               J
Royal Delight...........................................               F
Royal Giant.............................................               I
Royal Glo...............................................               I
Ruby Diamond............................................               L
Ruby Grand..............................................               J
Ruby Sun................................................               J
Scarlet Red.............................................               K
September Grand.........................................               L
September Red...........................................               L
Sheri Red...............................................               J
Son Red.................................................               L
Sparkling June..........................................               L
Sparkling May...........................................               J
Sparkling Red...........................................               L
Spring Bright...........................................               L
Spring Diamond..........................................               L
Spring Red..............................................               H
Star Brite..............................................               J
Summer Beaut............................................               H
Summer Blush............................................               J
Summer Bright...........................................               J
Summer Diamond..........................................               L
Summer Fire.............................................               L
Summer Grand............................................               L
Summer Lion.............................................               L
Summer Red..............................................               L
Summer Star.............................................               G
Sunburst................................................               J
Sun Diamond.............................................               I
Sunfre..................................................               F
Sun Grand...............................................               G
Super Star..............................................               G
Tasty Gold..............................................               H
Tom Grand...............................................               L
Zee Glo.................................................               J
Zee Grand...............................................               I
------------------------------------------------------------------------

    Note: Consult with the Federal or Federal-State Inspection 
Service Supervisor for the maturity guides applicable to the 
varieties not listed above.
* * * * *
    (4) Any package or container of Arctic Glo, Arctic Rose, Arctic 
Star, Diamond Bright, Early May, Juneglo, June Pearl, Kay Glo, May 
Diamond, May Grand, May Lion, Prima Diamond IV, Prima Diamond VI, Prima 
Diamond 13, Prince Jim, Red Delight, Red Glo, Rose Diamond, Royal Glo, 
Sparkling May, Star Brite, or Zee Grand variety nectarines unless:
* * * * *
    (6) Any package or container of Alshir Red, Alta Red, Arctic Pride, 
Arctic Queen, Arctic Snow (White Jewel), Arctic Sweet, August Glo, 
August Lion, August Red, August Snow, Autumn Delight, Big Jim, Brite 
Pearl, Crystal Rose, Diamond Ray, Early Red Jim, Fairlane, Fantasia, 
Firebrite, Fire Pearl, Flame Glo, Flaming Red, Flavortop, Flavortop I, 
Grand Diamond, Grand Pearl, Honey Kist, How Red, July Red, Kay Diamond, 
King Jim, Late Red Jim, Mid Glo, Niagara Grand, P-R Red, Prima Diamond 
IX, Prima Diamond XVI, Prima Diamond XIX, Prima Diamond XXIV, Red 
Diamond, Red Glen, Red Jim, Rio Red, Royal Giant, Ruby Diamond, Ruby 
Pearl, Scarlet Red, September Red, Sparkling June, Sparkling Red, 
Spring Bright, Spring Diamond, Spring Red, Summer Beaut, Summer Blush, 
Summer Bright, Summer Diamond, Summer Fire, Summer Grand, Summer Lion, 
Summer Red, Sunburst, Sun Diamond, Sunny Red, Super Star, Terra White, 
Zee Glo, or 491-48 variety nectarines unless:
* * * * *

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA

    4. Section 917.442 is amended by:
    a. Revising paragraph (a)(3);
    b. Revising paragraph (a)(4)(ii);
    c. Revising Tables 1 and 2 in paragraph (a)(4)(iv);
    d. Revising paragraph (a)(9)(i); and
    e. Revising paragraph (d) to read as follows:


Sec. 917.442  California peach container and pack regulation.

    (a) * * *
    (3) Each package or container of peaches, except for consumer 
packages in master containers and consumer packages mailed directly to 
consumers, shall bear on one outside end in plain sight and in plain 
letters at least \3/8\ inch in height the words ``U.S. Mature'' or ``US 
MAT'' if such peaches are mature as defined in the United States 
Standards for Grades of Peaches (7 CFR 51.1210 through 51.1223); or may 
instead bear on one outside end in plain sight and in plain letters at 
least \3/8\ inch in height the words ``California Well Matured'' or 
``CA WELL MAT'' if such peaches are well matured as defined in 
Sec. 917.459 of this part.
    (4) * * *
    (ii) The size of peaches in molded forms in experimental containers 
and in the No. 22G standard lug box shall be indicated according to the 
number of such peaches when packed in molded forms in the No. 22D 
standard lug box or the No. 32 standard box in accordance with the 
requirements of standard pack, such as ``80 size,'' ``88 size,'' etc., 
along with the count requirements in paragraph (a)(4)(i) of this 
section.
* * * * *
    (iv) * * *

[[Page 11356]]



 Table 1--Weight-Count Standards for All Varieties of Peaches Packed in
                 Loose-Filled or Tight-Filled Containers
------------------------------------------------------------------------
                                                            Column B--
                                                          Maximum number
                                                           of peaches in
                                                             16-pound
                                                              sample
                                                           applicable to
                                                             varieties
          Column A--Tray pack size designation             specified in
                                                            paragraphs
                                                            (a)(2)(ii),
                                                            (a)(3)(ii),
                                                            (a)(4)(ii),
                                                            (a)(5)(ii),
                                                           and (b)(3) of
                                                           Sec.  917.459
------------------------------------------------------------------------
96......................................................              96
88......................................................              92
84......................................................              83
80......................................................              76
72......................................................              69
70......................................................              65
64......................................................              57
60......................................................              51
56......................................................              47
54......................................................              44
50......................................................              39
48......................................................              35
44......................................................              33
42......................................................              31
40......................................................              30
36......................................................              27
34......................................................              25
32......................................................              23
30......................................................              21
------------------------------------------------------------------------


 Table 2.--Weight-Count Standards for All Varieties of Peaches Packed in
                 Loose-Filled or Tight-Filled Containers
------------------------------------------------------------------------
                                                       Column B--Maximum
                                                       number of peaches
                                                          in 16-pound
                                                       sample applicable
                                                          to varieties
         Column A--Tray pack size designation             specified in
                                                           paragraphs
                                                         (a)(6)(ii) and
                                                         (c)(3) of Sec.
                                                            917.459
------------------------------------------------------------------------
96...................................................                 96
88...................................................                 83
84...................................................                 79
80...................................................                 73
72...................................................                 64
70...................................................                 59
64...................................................                 53
60...................................................                 46
56...................................................                 45
54...................................................                 43
50...................................................                 39
48...................................................                 35
44...................................................                 33
42...................................................                 31
40...................................................                 30
36...................................................                 27
34...................................................                 25
32...................................................                 23
30...................................................                 21
------------------------------------------------------------------------

* * * * *
    (9) * * *
    (i) The number of individual consumer packages, the net weight of 
each consumer package, and the minimum size description of the contents 
using the terms ``Minimum size 60 and larger,'' or ``Minimum size 70 
and larger,'' etc., as applicable.
* * * * *
    (d) During the period April 1 through November 23, 1999, each 
container or package when packed with peaches meeting ``CA Utility'' 
quality requirements, shall bear the words ``CA Utility,'' along with 
all other required container markings, in letters at least \3/8\ inch 
in height on the visible display panel. Consumer bags or packages must 
also be clearly marked on the consumer bags or packages as ``CA 
Utility,'' along with other required markings, in letters at least \3/
8\ inch in height.
    5. Section 917.459 is amended by:
    a. Revising the introductory text of paragraph (a)(1);
    b. Removing Table 1;
    c. Revising Table 1 to Paragraph (a)(1)(iv); and
    d. Revising the introductory text of paragraphs (a)(3), (a)(4), 
(a)(5), and (a)(6) to read as follows:


Sec. 917.459  California peach grade and size regulation.

    (a) * * *
    (1) Any lot or package or container of any variety of peaches 
unless such peaches meet the requirements of U.S. No. 1 grade: 
Provided, That an additional 25 percent tolerance shall be permitted 
for fruit with open sutures which are damaged, but not seriously 
damaged: Provided further, That during the period April 1 through 
November 23, 1999, any handler may handle peaches if such peaches meet 
``CA Utility'' quality requirements. The term ``CA Utility'' means that 
not more than 40 percent of the peaches in any container meet or exceed 
the requirements of the U.S. No. 1 grade, except that when more than 30 
percent of the peaches in any container meet or exceed the requirements 
of U.S. No. 1 grade, the additional 10 percent shall have non-scoreable 
blemishes as determined when applying the U.S. Standards for Grades of 
Peaches; and that such peaches are mature and are:
* * * * *
    (iv) * * *

                     Table 1 to Paragraph (a)(1)(iv)
------------------------------------------------------------------------
                                                            Column B--
                    Column A--variety                     Maturity guide
 
------------------------------------------------------------------------
Ambercrest..............................................               G
Angelus.................................................               I
August Lady.............................................               L
August Sun..............................................               I
Autumn Crest............................................               I
Autumn Gem..............................................               I
Autumn Lady.............................................               H
Autumn Rose.............................................               I
Belmont (Fairmont)......................................               I
Berenda Sun.............................................               I
Blum's Beauty...........................................               G
Cal Red.................................................               I
Carnival................................................               I
Cassie..................................................               H
Coronet.................................................               E
Crimson Lady............................................               J
Crown Princess..........................................               J
David Sun...............................................               I
Diamond Princess........................................               J
Early Delight...........................................               H
Early Elegant Lady......................................               L
Early May Crest.........................................               H
Early O'Henry...........................................               I
Early Top...............................................               G
Elberta.................................................               B
Elegant Lady............................................               L
Fairtime................................................               G
Fancy Lady..............................................               J
Fay Elberta.............................................               C
Fayette.................................................               I
Fire Red................................................               I
First Lady..............................................               D
Flamecrest..............................................               I
Flavorcrest.............................................               G
Flavor Queen............................................               H
Flavor Red..............................................               G
Franciscan..............................................               G
Goldcrest...............................................               H
Golden Crest............................................               H
Golden Lady.............................................               F
Honey Red...............................................               G
John Henry..............................................               J
July Elberta............................................               C
June Lady...............................................               G
June Pride..............................................               J
June Sun................................................               H
Kern Sun................................................               H
Kingscrest..............................................               H
Kings Lady..............................................               I
Kings Red...............................................               I
Lacey...................................................               I
Lady Sue................................................               L
Mary Anne...............................................               G
May Crest...............................................               G
May Sun.................................................               I
Merrill Gem.............................................               G
Merrill Gemfree.........................................               G
O'Henry.................................................               I
Pacifica................................................               G
Parade..................................................               I
Pat's Pride.............................................               D
Prima Gattie 8..........................................               L
Prima Lady..............................................               J
Queencrest..............................................               G
Ray Crest...............................................               G
Red Cal.................................................               I
Red Dancer (Red Boy)....................................               I
Redhaven................................................               G
Red Lady................................................               G
Redtop..................................................               G
Regina..................................................               G

[[Page 11357]]

 
Rich Lady...............................................               J
Rich May................................................               H
Rich Mike...............................................               H
Rio Oso Gem.............................................               I
Royal Lady..............................................               J
Royal May...............................................               G
Ruby May................................................               H
Ryan Sun................................................               I
Scarlet Lady............................................               F
September Sun...........................................               I
Sierra Crest............................................               H
Sierra Lady.............................................               I
Sparkle.................................................               I
Springcrest.............................................               G
Spring Lady.............................................               H
Springold...............................................               D
Sugar Lady..............................................               J
Summer Lady.............................................               L
Summerset...............................................               I
Suncrest................................................               G
Sweet Scarlet...........................................               J
Topcrest................................................               H
Tra Zee.................................................               J
Willie Red..............................................               G
Zee Lady................................................               L
------------------------------------------------------------------------

    Note: Consult with the Federal or Federal-State Inspection 
Service Supervisor for the maturity guides applicable to the 
varieties not listed above.
* * * * *
    (3) Any package or container of Goldcrest, Super Rich, or Topcrest 
variety peaches unless:
* * * * *
    (4) Any package or container of Snow Dance variety peaches unless:
* * * * *
    (5) Any package or container of Babcock, Crimson Lady, Crown 
Princess, David Sun, Early May Crest, Flavorcrest, Golden Crest, June 
Lady, Kern Sun, May Crest, May Sun, Merrill Gemfree, Pink Rose, Prima 
Peach IV, Queencrest, Ray Crest, Redtop, Rich May, Rich Mike, Snow 
Brite, Springcrest, Spring Lady, Spring Snow, Sugar May, Sweet Scarlet, 
or White Dream variety of peaches unless:
* * * * *
    (6) Any package or container of Amber Crest, August Lady, Autumn 
Flame, Autumn Lady, Autumn Rose, Cal Red, Carnival, Cassie, Champagne, 
Diamond Princess, Early Elegant Lady, Early O'Henry, Elegant Lady, 
Fairtime, Fancy Lady, Fay Elberta, Flamecrest, John Henry, June Pride, 
Kaweah, Kings Lady, Lacey, Late Ito Red, Madonna Sun, Morning Lord, 
O'Henry, Prima Gattie, Prima Peach VIII, Prima Peach 20, Prima Peach 
23, Red Dancer, Rich Lady, Royal Lady, Ryan Sun, Saturn (Donut), 
Scarlet Snow, September Snow, September Sun, Sierra Lady, Snow Diamond, 
Snow Giant, Snow King, Sparkle, Sprague Last Chance, Sugar Giant, Sugar 
Lady, Summer Lady, Summer Sweet, Summer Zee, Suncrest, Tra Zee, Vista, 
White Lady, Yukon King, Zee Lady, or 1-01-505 variety of peaches 
unless:
* * * * *
    Dated: March 2, 1999.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 99-5552 Filed 3-5-99; 8:45 am]
BILLING CODE 3410-02-P