[Federal Register Volume 66, Number 44 (Tuesday, March 6, 2001)]
[Rules and Regulations]
[Pages 13394-13396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5317]



[[Page 13394]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 966

[Docket No. FV00-966-1 FIR]


Tomatoes Grown in Florida; Change in Size Designation

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (Department) is adopting, as a 
final rule, without change, the provisions of an interim final rule 
that increased the maximum diameter of the 6x6 numeric size designation 
prescribed under the Florida tomato marketing order (order). The order 
regulates the handling of tomatoes grown in Florida and is administered 
locally by the Florida Tomato Committee (Committee). This rule 
continues in effect a maximum diameter increase of \2/32\ of an inch, 
from 2\27/32\ inches to 2\29/32\ inches for tomatoes designated 6x6. 
This change allows handlers to pack slightly larger tomatoes in a 6x6 
container, and provides them with greater flexibility when packing 
tomatoes. The increased flexibility is expected to increase the number 
and availability of containers of 6x6 tomatoes, which are often in 
short supply.

EFFECTIVE DATE: April 5, 2001.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA, P.O. Box 2276, Winter Haven, Florida 
33883; telephone: (863) 299-4770, Fax: (863) 299-5169; 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 complying with this 
regulation 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: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 125 and Marketing Order No. 966, both as amended (7 CFR 
part 966), regulating the handling of tomatoes grown in certain 
designated counties in Florida, hereinafter referred to as the 
``order.'' The marketing agreement and order 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 is issuing this rule in conformance with Executive 
Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect. 
This rule will not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Act provides that administrative proceedings must be exhausted 
before parties may file suit in court. Under section 608c(15)(A) of the 
Act, any handler subject to an order may file with the Secretary a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with law and request a modification of the order or to be exempted 
therefrom. A handler is afforded the opportunity for a hearing on the 
petition. After the hearing the Secretary would rule on the petition. 
The Act provides that the district court of the United States in any 
district in which the handler is an inhabitant, or has his or her 
principal place of business, has jurisdiction to review the Secretary's 
ruling on the petition, provided an action is filed not later than 20 
days after the date of the entry of the ruling.
    Under the order, tomatoes produced in the production area and 
shipped to fresh market channels outside the regulated area are 
required to meet grade, size, inspection, and container requirements. 
These requirements apply during the period October 10 through June 15 
each year. Current requirements include a minimum grade of U.S. No. 2 
and a minimum size of 2\9/32\ inches in diameter. Current pack and 
container requirements outline the types of information that need to 
appear on a container, weight restrictions, and other requirements 
containers must meet.
    Section 966.52 of the order provides authority for the 
modification, suspension, and termination of regulations. It includes 
the authority to establish and modify size and pack requirements for 
tomatoes grown in the defined production area and handled under the 
order.
    Section 966.323 of the order's rules and regulations specifies the 
handling regulations for Florida tomatoes. Section 966.323(a)(2)(i) 
currently specifies that all tomatoes packed by a registered handler 
must meet a minimum size requirement of 2\9/32\ inches in diameter. 
That section also requires that all such tomatoes must be sized with 
proper equipment in one of three numeric size designations with 
specified ranges of diameter. Tomatoes designated as ``6x67'' must be a 
minimum of 2\9/32\ inches in diameter and a maximum of 2\19/32\. These 
are the smallest tomatoes marketed. Tomatoes, other than producer 
field-packed tomatoes, designated as ``6x66'' must be a minimum of 
2\17/32\ inches in diameter and, prior to the issuance of the interim 
final rule, a maximum of 2\27/32\ inches in diameter. The interim final 
rule changed that maximum to 2\29/32\. Tomatoes designated as ``5x6'' 
must be a minimum of 2\25/32\ inches in diameter with no maximum size 
requirement. These are the largest size marketed. To allow for 
variation incident to proper sizing, not more than a total of 10 
percent, by count, of the tomatoes in the lot may be smaller than the 
specified minimum diameter or larger than the maximum diameter.
    This rule continues in effect the increase in the maximum diameter 
prescribed for size 6x66 tomatoes by \2/32\ of an inch, from 2\27/32\ 
inches to 2\29/32\ inches. This will allow handlers the option of 
packing slightly larger tomatoes in a 6x66 container. This increased 
flexibility in packing tomatoes is expected to allow handlers to pack 
some of the smaller 5x6 tomatoes into 6x66 containers. This is expected 
to increase the number and availability of containers of 6x66 tomatoes, 
which are often in short supply, and improve the uniformity of the 5x6-
sized tomatoes. The Committee unanimously recommended this change at a 
meeting held on September 8, 2000.
    Based on an analysis of markets and demands of buyers, the 
Committee believes that the increase in the maximum diameter for size 
6x66 tomatoes will improve the marketing of Florida tomatoes, provide 
handlers with additional flexibility in packing tomatoes, and help 
improve grower returns. Recent industry trends have been toward 
shipping larger tomatoes. In response to a strong consumer demand, new 
commercial tomato varieties have been planted to produce bigger 
tomatoes and have resulted in more large sized tomatoes being shipped. 
Because of this demand, production of larger tomatoes has been a 
popular method of improving returns among producers as it also 
increases total yields. Increasing the 6x66 maximum diameter provides 
handlers the option of shifting the smallest sized tomatoes in a 5x6 
pack to a 6x66 pack. By making this shift, handlers will be

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able to increase the average size in both the 6x66 and the 5x6 pack.
    The \2/32\ inch increase in the maximum diameter of the 6x66-size 
designation results in a \4/32\ overlap in the maximum diameter of the 
6x66 and the minimum size for the 5x6. Tomatoes at the bottom of the 
5x6 size can either be packed as 5x6 tomatoes or as 6x66 tomatoes. 
According to the Committee, this will provide for greater distribution 
of tomato shipments throughout the two size designations, enabling 
handlers to make better decisions on which size of tomatoes to pack. 
Such packing decisions could depend on specific buyer or market 
demands, on general crop size, or on prices.
    Shifting the smallest sizes from the 5x6 pack to the 6x66 pack 
would increase the average size in both the 6x66 and the 5x6 packs. It 
would move larger tomatoes into the 6x66 pack while providing space for 
additional larger tomatoes in the 5x6 pack. This would lower the count 
of tomatoes for each pack as well. In its discussions, the Committee 
recognized that buyers prefer larger tomatoes and a lower count per 
box. With buyer preferences trending toward larger sized tomatoes, the 
Committee believes that having this option could help grower returns.
    This change also makes more tomatoes available to fill the 6x66 
pack. In past years, there have been shortages of this pack due to 
tomato size. Committee members stated that during the past season there 
were periods when the tomatoes were sizing so well they were having 
trouble packing many 6x66 packs. The Committee recognized that there is 
a strong demand for the 6x66 pack and that it brings a favorable price, 
occasionally equal to or above the price for a 5x6 pack. Therefore, the 
Committee believes that it is important to continue to supply this 
market. With the option of shifting slightly larger tomatoes into the 
6x66 pack, handlers have more flexibility to move tomatoes to meet 
market demand. This will be particularly beneficial when the majority 
to tomatoes are sizing well.
    In addition, the Committee also believes that raising the maximum 
diameter for the 6x6 pack could improve the uniformity of tomatoes in 
the 5x6 pack. While increasing the maximum diameter of the 6x6 pack 
does increase the size range, the increase is only by \2/32\ of an 
inch. Further, shifting the smaller sizes from a 5x6 pack to the 6x6 
pack could improve the uniformity of the 5x6 pack, which is expected to 
be viewed as a benefit to buyers.
    Because there is no upper limit on size for a 5x6 pack, there can 
be a considerable variation in size. With newer tomato varieties 
producing larger fruit, the size variance in containers of 5x6 tomatoes 
has grown. This size variation is particularly evident with the smaller 
sizes in the pack. By having the opportunity to shift the smaller sizes 
to the 6x6 pack, handlers will be able to improve the uniformity of 
their 5x6 packs. This is particularly important because the 5x6 pack 
usually commands the best price in the market, faces the most 
competition, and is the most popular size.
    During the 1999-2000 season, approximately 58 percent of the 
Florida tomatoes sold were 5x6 packs, and about 28 percent were sold as 
6x6's. Increasing the maximum diameter size of the 6x6 by \2/32\ inch 
will give handlers the flexibility to reduce the number of smaller 
sized tomatoes packed in the 5x6-size designation.
    A study conducted by Dr. John J. VanSickle at the University of 
Florida indicates that increasing the maximum diameter could result in 
an increase in the prices received for Florida tomatoes. The study 
indicates that if 1 percent of the smallest 5x6 size tomatoes are 
shifted into the smaller size categories, then prices for 5x6 size 
tomatoes could increase by .25 percent. With regard to 6x6 size 
tomatoes, the study indicates that the prices could increase by .15 
percent. The increase in price would occur because of the 
redistribution of larger sized tomatoes into the smaller size 
designations, which is a response to consumer demand for a more 
consistent pack and slightly larger tomatoes.
    Committee members do not believe that this change will create any 
confusion on the part of buyers. Rather, they stated that this change 
allows handlers more opportunity to address the demands of their 
buyers.
    Consumers and buyers are demanding a slightly larger tomato. 
Smaller tomatoes with a less uniform pack have poor consumer 
acceptance, especially in chain stores. This change provides handlers 
with some flexibility to adjust the size composition and uniformity of 
their packs to address the needs of their customers.
    This change does not affect the current exemption provided to 
producer field packed tomatoes as long as the containers are designated 
as 6x6 and larger. Specifically, field packed tomatoes designated as 
size 6x6 and larger are not subject to the maximum diameter specified 
in the order's rules and regulations for 6x6 sized tomatoes (65 FR 
8247, February 18, 2000).
    Section 8e of the Act requires that whenever grade, size, quality, 
or maturity requirements are in effect for certain commodities under a 
domestic marketing order, including tomatoes, imports of that commodity 
must meet the same or comparable requirements. However, the Act does 
not authorize the imposition of container requirements on imports, when 
such requirements are in effect under a domestic marketing order. 
Florida tomatoes must be packed in accordance with three specified size 
designations, and tomatoes falling into different size designations may 
not be commingled in a single container. These pack restrictions do not 
apply to imported tomatoes. Therefore, no change is necessary in the 
tomato import regulation as a result of this action.
    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 final regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 70 handlers of Florida tomatoes who are 
subject to regulation under the marketing order and approximately 130 
tomato producers in the regulated area. Small agricultural service 
firms are defined by the Small Business Administration (SBA) as those 
having annual receipts of less than $5,000,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$500,000 (13 CFR 121.201).
    Committee data indicates that approximately 20 percent of the 
Florida tomato handlers handle 80 percent of the total volume. Based on 
the industry and Committee data, the average annual price for fresh 
Florida tomatoes during the 1999-2000 season was $6.89 per 25-pound 
carton or equivalent, and total fresh shipments for the 1999-2000 
season were 58,006,721 25-pound equivalent cartons of tomatoes. Based 
on this information, the majority of handlers would be classified as 
small entities as defined by the SBA. The majority of producers of 
Florida tomatoes may also be classified as small entities.
    This rule continues in effect an increase in the maximum diameter 
requirement for size 6x6 tomatoes prescribed in the order's handling

[[Page 13396]]

regulations from 2\27/32\ inches to 2\29/32\ inches, and will allow 
handlers the option of packing slightly larger tomatoes in a 6x6 
container. With this increased flexibility, handlers will be able to 
better meet consumer demand for larger tomatoes, while providing 
greater returns to growers. The Committee unanimously recommended this 
change. Authority for this action is provided in Sec. 966.52.
    If handlers take advantage of the increased packing flexibility, 
they would incur direct costs associated with the purchase of new 
sizing belts. Sizing belts convey and size fruit during the packing 
process. Depending on the amount of use, sizing belts can last a season 
or may need to be replaced two to three times a season. Estimated 
prices associated with these purchases could range from $450.00 for a 
small handler to $19,000 for very large handlers. While there are 
short-term costs associated with the maximum diameter of the 6x6 sizing 
designation, the benefits are expected to outweigh the costs. Moreover, 
changing sizing belts is a routine action since they have to be 
regularly replaced depending on use. These costs are expected to be 
minimal relative to the benefits expected, and in relation to normal 
operating costs and procedures.
    A study conducted by Dr. John J. VanSickle at the University of 
Florida estimates that a shift of 1 percent of 5x6 tomatoes into the 
smaller size categories would increase the prices for 5x6-size tomatoes 
by .25 percent. For 6x6's, the price could increase by .15 percent. The 
increase in price would occur in response to consumer demand for packs 
with slightly larger tomatoes.
    This change is designed to provide handlers with more flexibility 
as to how sizes are packed. Because of this, handlers can choose to 
continue to pack as they have without making any adjustments due to 
this rule change. Purchasing new equipment is not necessary to remain 
in compliance with order provisions. Therefore, this rule places the 
decision with the individual handler as to whether the costs are 
outweighed by the benefits.
    Individual seasons and different periods during the same season can 
present a fair amount of variability in production and size. This 
change provides handlers with some additional flexibility when packing 
for size to allow handlers to make some adjustments in order to 
maximize returns and to service customer demand. This rule provides the 
opportunity for handlers to make adjustments based on market 
conditions. This should have a positive effect on returns.
    The Committee recommended these changes to improve the marketing of 
Florida tomatoes. The opportunities and benefits of this rule are 
expected to be equally available to all tomato handlers and growers 
regardless of their size of operation. This action will have a 
beneficial impact on producers and handlers since it will allow tomato 
handlers more flexibility in making tomatoes available to meet consumer 
needs consistent with crop and market conditions.
    The Committee discussed alternatives to this recommendation, 
including leaving the regulations as currently issued. All Committee 
members agreed that this change would be helpful in improving pack 
appearance and in providing handlers some additional flexibility. 
Therefore, the Committee voted to make this change rather than leave 
the size designation for 6X6 unchanged.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large tomato handlers. As with all 
Federal marketing order programs, reports and forms are periodically 
reviewed to reduce information requirements and duplication by industry 
and public sector agencies.
    In addition, as noted in the initial regulatory flexibility 
analysis, the Department has not identified any relevant Federal rules 
that duplicate, overlap or conflict with this rule.
    Further, the Committee's meeting was widely publicized throughout 
the tomato industry and all interested persons were invited to attend 
the meeting and participate in Committee deliberations. Like all 
Committee meetings, the September 8, 2000, meeting was a public meeting 
and all entities, both large and small, were able to express their 
views on this issue.
    Also, the Committee has a number of appointed subcommittees to 
review certain issues and make recommendations to the Committee. The 
Committee's Marketing Subcommittee met on August 21, 2000, and 
discussed this issue in detail. That meeting was also a public meeting 
and both large and small entities were able to participate and express 
their views.
    An interim final rule concerning this action was published in the 
Federal Register on November 6, 2000. Copies of the rule were mailed by 
the Committee's staff to all Committee members and tomato handlers. In 
addition, the Office of the Federal Register made the rule available 
through the Internet. That rule provided for a 60-day comment period, 
which ended January 5, 2001. No comments were received.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
finalizing the interim final rule, without change, as published in the 
Federal Register (65 FR 66492, November 6, 2000) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 966

    Marketing agreements, Reporting and recordkeeping requirements, 
Tomatoes.

PART 966--TOMATOES GROWN IN FLORIDA

    Accordingly, the interim final rule amending 7 CFR part 966 which 
was published at 65 FR 66492 on November 6, 2000, is adopted as a final 
rule without change.

    Dated: February 28, 2001.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 01-5317 Filed 3-5-01; 8:45 am]
BILLING CODE 3410-02-P