[Federal Register Volume 67, Number 167 (Wednesday, August 28, 2002)]
[Rules and Regulations]
[Pages 55101-55106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22008]



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  Federal Register / Vol. 67, No. 167 / Wednesday, August 28, 2002 / 
Rules and Regulations  

[[Page 55101]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FVO2-905-2 IFR]


Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; 
Change in the Minimum Maturity Requirements for Fresh Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule increases the minimum maturity requirements for 
fresh grapefruit under the marketing order for Oranges, Grapefruit, 
Tangerines, and Tangelos Grown in Florida (order). The Citrus 
Administrative Committee (Committee), which locally administers the 
order, recommended this change for Florida grapefruit. This rule 
increases the minimum maturity requirements from a 7.5 percent soluble 
solids (sugars) and a 7.0 to 1 solids to acid ratio with a sliding 
scale minimum ratio of 6.0 to 1, to an 8.0 percent soluble solids 
(sugars) and a 7.5 to 1 solids to acid ratio with a sliding scale 
minimum ratio of 7.2 to 1. This change provides a sweeter grapefruit 
taste and should increase consumer demand for fresh grapefruit.

DATES: Effective August 29, 2002; comments received by October 28, 2002 
will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this proposal. Comments must be sent to the Docket Clerk, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC 
20250-0237; Fax: (202) 720-8938, or e-mail: [email protected]. 
All comments should reference the docket number and the date and page 
number of this issue of the Federal Register and will be made available 
for public inspection in the Office of the Docket Clerk during regular 
business hours, or can be viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Melissa Schmaedick, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, Post 
Office Box 1035, Moab, Utah 84532; telephone: (435) 259-7988, Fax: 
(435) 259-4945; or George Kelhart, Technical Advisor, Marketing Order 
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 
Independence Avenue SW, STOP 0237, Washington, DC 20250-0237; 
telephone: (202) 720-2491, Fax: (202) 720-8938.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue SW, STOP 0237, Washington, DC 20250-0237; telephone: (202) 720-
2491, Fax: (202) 720-8938, or e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement No. 84 and Marketing Order No. 905, both as amended (7 CFR 
part 905), regulating the handling of oranges, grapefruit, tangerines, 
and tangelos grown in Florida, hereinafter referred to as the 
``order.'' The order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action 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 USDA 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 USDA 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 USDA's ruling on the petition, 
provided an action is filed not later than 20 days after the date of 
the entry of the ruling.
    This rule increases the minimum maturity requirements for fresh 
Florida grapefruit. This change increases the current minimum maturity 
from a 7.5 percent soluble solids (sugars) and a 7.0 to 1 solids to 
acid ratio with a sliding scale minimum ratio of 6.0 to 1, to an 8.0 
percent soluble solids (sugars) and a 7.5 to 1 solids to acid ratio 
with a sliding scale minimum ratio of 7.2 to 1. This change results in 
a sweeter grapefruit taste and should increase consumer demand for 
fresh grapefruit. This action was recommended by the Committee at its 
meeting on May 22, 2002, during which thirteen Committee members voted 
in favor of this change, and three voted against.
    Section 905.52 of the order provides the authority for the 
establishment of grade and size requirements for Florida citrus. One 
element of grade is maturity. Section 905.306 of the order specifies, 
in part, the minimum grade requirements for grapefruit. The current 
grade requirement for Florida grapefruit is a U.S. No. 1. The specifics 
of this grade requirement are listed under the U.S. Standards for 
Grades of Florida Grapefruit (7 CFR 2851.750-2851.784).
    The U.S. Standards for Grades of Florida Grapefruit (Standards) 
specify minimum and/or maximum allowances for discoloration, firmness, 
color, texture, form/shape, varietal characteristics, and maturity. The 
Standards define maturity by referencing the 1995 Florida Department of 
Citrus (FDOC) Florida Citrus Code, Chapter 601 and the FDOC Official 
Rules Affecting the Florida Citrus Industry, Part 1, Chapter 20-13. The 
1995 Florida Citrus Code specifies a minimum maturity of a 7.5 percent 
soluble solids (sugars) and a 7.0 to 1 ratio of solids to acid. The 
FDOC also employs a Citrus Fruit Maturity Chart as

[[Page 55102]]

a sliding scale to determine equivalent soluble solids and ratio 
maturity combinations. The sliding scale allows for a range of soluble 
solids and ratio combinations that are comparable to the required 
minimum maturity level rather than just a fixed minimum requirement. 
With the sliding scale, a higher level of soluble solids (sugars) 
allows for a lower solids to acid ratio. In other words, grapefruit 
with higher soluble solids can have a lower solids to acid ratio and 
meet the minimum maturity requirements.
    This rule increases the minimum maturity requirements for fresh 
Florida grapefruit. At its meeting on May 22, 2002, the Committee 
recommended increasing the current minimum maturity level for fresh 
grapefruit from a 7.5 percent soluble solids (sugars) and a 7.0 to 1 
solids to acid ratio with a sliding scale minimum ratio of 6.0 to 1 as 
specified in the Standards, to an 8.0 percent soluble solids (sugars) 
and a 7.5 to 1 solids to acid ratio with a sliding scale minimum of 7.2 
to 1.
    The Committee had formed a subcommittee to examine the maturity 
issue, the Subcommittee on Grapefruit Maturity Standards 
(subcommittee). The subcommittee determined that the minimum maturity 
requirements for fresh grapefruit should be increased and forwarded 
this idea to the full Committee at the May meeting. The subcommittee's 
presentation to the full Committee focused on declining fresh 
grapefruit sales, which it attributed to consumer dissatisfaction with 
taste. Furthermore, it discussed the potential to increase consumer 
demand through increasing the sweetness of grapefruit, particularly 
early in the season.
    The subcommittee found that consumers would be more likely to make 
repeat purchases if their initial taste experience of early season 
grapefruit were positive. By increasing the minimum maturity 
requirements, the industry could meet consumer demand for a sweeter 
tasting fruit. The subcommittee based its proposal to increase the 
minimum maturity standard on recent market research studies and cited 
industry requests and support for a higher maturity standard.
    The research studies referenced by the subcommittee were undertaken 
by the FDOC, or at their request, and were designed to determine those 
factors causing sales of fresh grapefruit to decline and those that 
cause demand to increase. Much of the decline in sales was attributed 
to consumer dissatisfaction with bitter tasting grapefruit early in the 
harvest season which, in turn, resulted in consumer reluctance to make 
repeat purchases. The studies indicate consumer demand for grapefruit 
would increase if their initial taste experience were positive. In 
other words, repeat purchases are linked to consumer satisfaction with 
taste (Florida Department of Citrus, Consumer Research, February 20, 
2002, conducted by a market research group; Grapefruit Sensory 
Evaluation Study, February 19, 1997, conducted by the FDOC; FDOC 
Grapefruit Strategy Working Session, February 20, 2002, conducted by a 
market research group).
    The subcommittee stated there was also substantial industry support 
for an increase in the minimum maturity requirements, and referenced 
memos received by the Committee in support of such an increase. The 
memos received were from several industry groups representing nearly 80 
percent of fresh grapefruit shipments. The memos specified the need to 
increase sales and identified an increased maturity standard as a means 
to improve consumer demand, particularly through repeat purchases.
    The Committee, in its deliberations following the subcommittee's 
presentation, discussed the state of the fresh grapefruit market. 
Discussion centered around declining market demand and the need to 
improve consumer purchasing patterns, particularly for early season and 
repeat purchases. The Committee drew from information provided by the 
subcommittee, market studies, and from Committee members, and 
determined that providing the consumer with a sweeter, more mature 
grapefruit will likely result in improved fresh fruit sales.
    The purpose of this action is to help stabilize the market for 
Florida grapefruit and improve producer returns by strengthening demand 
and increasing the number of repeat purchases of grapefruit. Market 
research indicates this rule provides the consumer with a grapefruit 
that is closer to consumer expectations in terms of sweetness, thereby 
resulting in an increased demand for fresh grapefruit.
    According to the FDOC Florida Citrus Outlook 2001-2002 report, 
domestic consumption of fresh Florida grapefruit has been declining in 
recent years, dropping from 7-pounds per capita consumption in the 
early 1980's to 6-pounds per capita consumption in the late 1990's. The 
Economic Research Service, USDA, listed per capita domestic consumption 
of grapefruit as 5.19 pounds in 2000.
    This reduced consumption is reflected in the shipping data for 
fresh grapefruit. The Committee's 2000-2001 Annual Statistical Report 
indicates shipments of Florida fresh grapefruit have declined 28 
percent over the past five seasons, dropping from 22.1 million boxes 
(1\3/5\ bushels) in 1996-1997, to 15.9 million boxes in 2000-2001. For 
the same period, FDOC reports show that domestic consumption of fresh 
grapefruit has declined nearly 38 percent, from 18.6 million cartons 
(\4/5\ bushel) during the 1996-1997 season to 11.6 million cartons for 
the 2000-2001 season.
    The FDOC also notes that Florida's share of the U.S. fresh 
grapefruit market has declined from 71.7 percent in 1990-1991, to 44.0 
percent in 2001-02. Much of this lost market share has gone to Texas. 
Texas shipped an estimated 273 million pounds of fresh grapefruit to 
the domestic and Canadian markets in 2000-2001 compared to 184.3 
million pounds in 1995-96, and accounted for over 31 percent of those 
market shipments in 2000-2001, up from 17 percent in 1995-96. Texas had 
a 32 percent increase in shipments to those markets over the 1995-96 
season. During the same period, to the same markets, Florida fresh 
grapefruit shipments decreased by 32 percent.
    The Committee raised the question as to the minimum maturity 
requirements for fresh Texas grapefruit. One reason for the increasing 
demand for Texas grapefruit may be its sweeter taste. Texas currently 
has a higher minimum maturity requirement than Florida. Minimum 
maturity requirements for fresh Texas grapefruit include a 9.0 percent 
soluble solids (sugars) and a 7.2 to 1 solids to acid ratio.
    The Committee recognized that Florida grapefruit production has 
been declining along with demand. However, the lower market supply has 
not stabilized market prices. Florida accounts for nearly 80 percent of 
total domestic grapefruit production. Production for the 2000-2001 
season was approximately 46 million boxes. This compares to production 
of approximately 47.1 million boxes for the 1998-99 season, and is 
substantially less than the 55.8 million boxes produced in 1996-97. 
While this represents nearly an 18 percent decrease in Florida 
grapefruit production, lower supply did not result in higher producer 
returns as demand for fresh Florida grapefruit also declined during 
this period.
    The weakening demand for Florida fresh grapefruit has contributed 
to declining on-tree prices and has led to economic abandonment of 
fruit. According to the National Agricultural Statistical Service, on-
tree prices for fresh Florida grapefruit, fell from an average of $6.52 
per box in 1999-2000

[[Page 55103]]

to an average of $4.80 per box in 2000-2001. Due to low economic 
returns the past several years, some producers have resorted to leaving 
portions of their crops unharvested. Economic abandonment has impacted 
the Florida grapefruit industry for four of the past six seasons, 
reaching an apex of 12 percent of total production in the 1997-1998 
season. Abandoned fruit accounted for 4 percent of production in the 
2000-2001 and the 2001-02 seasons.
    The Committee believes the over shipment of smaller sized red 
seedless grapefruit contributes to poor returns and lower prices. To 
address this situation the Committee has recommended weekly percentage 
of size regulation under Sec. 905.153 for the last five seasons. This 
regulation limits the volume of small sizes entering the market during 
the regulated period. Under weekly percentage of size regulation, 
f.o.b. prices and on-tree returns increased and movement stabilized as 
compared to years with no percentage of size regulation. Weekly 
percentage of size regulation has helped improved the situation, but it 
has not solved all the problems. Consequently, the Committee believes 
it is important to also address the demand side of the market.
    The Committee's recommendation to increase the minimum maturity 
requirements recognizes that due to loss of market demand, decreasing 
production and limiting shipments alone cannot adequately stabilize 
weakening prices. In its efforts to achieve market stabilization, the 
Committee has turned its focus to increasing consumer demand. The 
Committee's recommendation to increase the minimum maturity 
requirements seeks to increase demand by meeting consumer preferences 
with a sweeter tasting grapefruit.
    The Committee's recommendation is supported by several recent 
market studies. FDOC research on consumer purchasing attitudes towards 
grapefruit demonstrates the need for increasing sweetness in grapefruit 
taste. Research results indicate that taste is a crucial factor in 
consumer grapefruit purchasing patterns, particularly repeat purchases 
(Grapefruit Sensory Evaluation Study, February 19, 2002, conducted by 
the FDOC).
    One study, compiled in April of 2002 by the FDOC, Blue Ribbon 
Committee on Grapefruit, links the 30-percent decline in fresh 
grapefruit sales in less than 10 years to customer attrition and 
consumer perceptions of inconsistent taste. Another study conduced by 
Opinion Dynamics Corporation, a market research group (February 20, 
2002), states that taste is by far the most important consideration in 
consumer purchases of fruit.
    A ``Grapefruit Sensory Evaluation Study'' conducted by the FDOC in 
1997, concluded that the major determinant of repeat purchases of fresh 
grapefruit was the flavor of the consumer's first grapefruit purchase 
of the season. The results of this study indicate a strong correlation 
between sweetness of flavor and consumer's willingness to make 
additional purchases. The more-bitter the consumer's initial grapefruit 
experience, the less likely the consumer was to make an immediate 
repeat purchase. Conversely, increased sweetness resulted in increased 
repeat purchases of fresh grapefruit.
    An additional study prepared by the Compendium Group, a market 
research group, for the FDOC Grapefruit Strategy Working Session, 
February 2002, also stressed the importance of consumer perceptions and 
expectations in purchasing decisions. According to this study, 
consumers associate sweetness of grapefruit flavor to the overall 
quality of the fruit. The study states ``consumers want consistent 
fruit that tastes the way they want it.''
    In addition to the abovementioned market research, there is strong 
industry support for an increase in the minimum maturity requirements. 
Industry support for an increase in the minimum maturity requirements 
was indicated through memos representing nearly 80 percent of Florida 
grapefruit production. Indian River Citrus League requested, in a memo 
to the Committee, a raise in the minimum maturity to 8.0 percent 
soluble solids and a 7.2 to 1 solids to acid ratio, a ratio slightly 
lower than ultimately recommended by the Committee. Florida Citrus 
Packers and the Peace River Citrus Growers Association supported an 
even larger increase in the minimum maturity standard. Several 
Committee members also expressed strong support for an increase.
    The Committee's recommendation to raise the minimum maturity 
standard incorporates its belief that a sweeter fresh grapefruit is 
more attractive to consumers, and that consumer satisfaction with taste 
will lead to an increase in repeat purchases. In turn, greater demand 
for fresh grapefruit benefits the industry as a whole, as increased 
demand will likely help stabilize market prices.
    While the recommendation to increase the minimum maturity standard 
was accepted by a majority of Committee members, some raised concerns 
about the impact of the higher standards on the different grapefruit 
producing regions and on early market sales. These concerns provided 
the basis for the three Committee members who opposed the Committee's 
recommendation.
    One concern was that grapefruit production in areas lying to the 
north of the dominant, central grapefruit growing region could be 
disadvantaged due to differences in growing conditions. One member 
indicated there were some areas in the northern production region that 
may not be able to reach the higher maturity standard regardless of the 
use of a sliding scale, and, therefore, be excluded from the market. 
Variety of rootstock and geographic differences in soil and climate 
were listed as possible reasons for some production not being able to 
meet the higher standard.
    Although some fruit may not meet the higher maturity standard, it 
is expected that it represents a very small percentage of the overall 
crop. The Committee's recommendation represents only a slight increase 
in the minimum maturity and includes a sliding scale. The sliding scale 
provides producers additional flexibility in meeting the higher 
standard. Also, the sliding scale helps producers in differing regions 
of the production area to meet the higher maturity requirements without 
compromising the desired outcome of a sweeter grapefruit taste.
    Florida citrus maturity samples also indicate that the majority of 
Florida grapefruit will meet the higher maturity level, albeit later in 
the season. Therefore, while some fruit may require longer maturing 
periods before harvest, the majority of Florida citrus is expected to 
meet the higher standard at some point during the season. It is 
estimated that less than 2 percent of the Florida grapefruit crop will 
not make the higher maturity in a typical growing season.
    Committee members also countered that, although a small percentage 
of Florida grapefruit production may not be able to meet the higher 
maturity standard, this percentage pales in comparison to the amount of 
grapefruit production currently left unharvested due to low economic 
returns. Several million boxes of grapefruit were left on the tree four 
of the past six seasons.
    Another concern raised was that the higher maturity standard 
requires some fruit to be left on the tree longer than current industry 
practice, and that some producers will then forfeit the more lucrative 
early-season sales. A concern over a potential loss of competitive 
advantage was also voiced by the Gulf Citrus Growers Association 
(GCGA), which indicated in a memo to the Committee its opposition to an 
increase

[[Page 55104]]

in the maturity standard. The southern production region has 
historically benefited from early-season sales as climate conditions 
allow their grapefruit production to mature sooner than the rest of the 
production area.
    The FDOC maturity sampling results indicate that while soluble 
solids (sugars) levels are on average well over 8.0 from the onset of 
the grapefruit harvest season, average grapefruit ratio solids to acid 
levels in Florida grapefruit generally do not increase over 7.0 to 1 
until the month of October, nearly one month after the traditional 
harvest season begins. Hence, a portion of Florida grapefruit crop will 
not meet the higher maturity requirements until slightly later in the 
season. However, maturity samples also indicate that meeting the 
increased maturity requirements later in the season is practicable for 
the majority of the Florida grapefruit industry as average soluble 
solids and solids to acid ratio levels are consistently above the 
recommended minimum threshold.
    While the recommended increase in minimum maturity could cause a 
delay in some fruit being released into the higher priced, early-season 
market, the Committee pressed the importance of meeting consumer 
expectations of flavor in order to secure repeat purchases. There is a 
push to get fruit into the market early to take advantage of high 
prices available at the beginning of the season. However, early fruit 
tends to be less mature. The availability of this early, less mature 
fruit can negatively impact repeat purchases and reduce demand in the 
long term. In addition, the higher maturity requirements apply to all 
Florida fresh grapefruit. This change will impact of the entire 
industry, not just individual regions. Any harvesting delays resulting 
from this increase in maturity will impact all regions of the 
production area.
    Committee members stated that while an increase in the minimum 
maturity standard could delay the release of some grapefruit onto the 
market, the potential opportunity costs of losing early-season sales 
will be more than compensated for by consumers buying grapefruit more 
frequently due to its sweeter, more appealing taste. Furthermore, the 
Committee estimated that only a small percentage of total Florida fresh 
grapefruit shipments will be affected by this change in the minimum 
maturity standard. In addition, the whole industry benefits from a 
stronger market demand and increased consumer satisfaction.
    Taking into consideration the above concerns, the Committee 
believes increasing the maturity standard will benefit the industry. 
The Committee believes the higher maturity requirements will result in 
a sweeter grapefruit taste and improve producer returns through 
increased consumer purchases of fresh grapefruit by addressing consumer 
preferences for a more appealing taste. Moreover, as maturity naturally 
increases throughout the season, the overall impact on industry 
shipments will be equal to or less than 2 percent of the total 
grapefruit crop. Also, the sliding scale allows some flexibility for 
handlers to meet the higher maturity requirements without compromising 
the desired sweeter grapefruit taste.
    Therefore, this rule raises the minimum maturity requirements from 
a 7.5 percent soluble solids (sugars) and a 7.0 to 1 solids to acid 
ratio with a sliding scale minimum ratio of 6.0 to 1, to an 8.0 percent 
soluble solids (sugars) and 7.5 to 1 solids to acid ratio with a 
sliding scale minimum of 7.2 to 1. The sliding scale is based on the 
FDOC Citrus Fruit Maturity Chart, and is as follows:

------------------------------------------------------------------------
  Minimum total solids (sugars), %       Solids to acid minimum ratio
------------------------------------------------------------------------
8.0 to (not including) 9.1            7.50 to 1
9.1 to (not including) 9.2            7.45 to 1
9.2 to (not including) 9.3            7.40 to 1
9.3 to (not including) 9.4            7.35 to 1
9.4 to (not including) 9.5            7.30 to 1
9.5 to (not including) 9.6            7.25 to 1
9.6 and greater                       7.20 to 1
------------------------------------------------------------------------

    Section 8e of the Act provides that when certain domestically 
produced commodities, including grapefruit, are regulated under a 
Federal marketing order, imports of that commodity must meet the same 
or comparable grade, size, quality, and maturity requirements. Since 
this rule increases the minimum maturity requirements under the 
domestic handling regulations, a corresponding change to the import 
regulations must also be accomplished. A rule making a similar change 
to the maturity requirements under the import regulations will be 
issued as a separate action.

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and rules issued there under, 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 75 grapefruit handlers subject to 
regulation under the order and approximately 11,000 producers of citrus 
in the regulated area. Small agricultural service firms, which includes 
handlers, 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 $750,000 (13 CFR 121.201).
    Based on industry and Committee data, the average annual f.o.b. 
price for fresh Florida grapefruit during the 2001-02 season was 
approximately $6.98 per \4/5\-bushel carton, and total fresh shipments 
for the 2000-01 season were estimated at 31.68 million cartons. 
Approximately 33 percent of all handlers handled 72 percent of Florida 
grapefruit shipments. Using the average f.o.b. price, at least 66 
percent of grapefruit handlers could be considered small businesses 
under SBA's definition. Therefore, the majority of Florida grapefruit 
handlers may be classified as small entities. The majority of Florida 
grapefruit producers may also be classified as small entities.
    There has been a significant decline in consumer purchases of fresh 
Florida grapefruit. The Committee believes that taste is one of the 
prime factors effecting demand and repeat purchases. This rule 
increases the minimum maturity requirements from a 7.5 percent soluble 
solids and a 7.0 to 1 solids to acid ratio with a sliding scale minimum 
ratio of 6.0 to 1, to an 8.0 percent soluble solids (sugars) and a 7.5 
to 1 solids to acid ratio with a sliding scale minimum ratio of 7.2 to 
1. The increase results in a sweeter tasting fruit, particularly in 
early months of the harvest season, and should increase consumer demand 
for fresh grapefruit. The Committee made its recommendation at its May 
22, 2002 meeting, in a vote of thirteen in favor of this change, with 
three opposed. This rule modifies the grade provisions of Sec. 905.306. 
Authority for this action is provided in Sec. 905.52 of the order.
    The increased minimum maturity requirements results in a sweeter

[[Page 55105]]

grapefruit tasting product being released into the marketplace, 
particularly during the early months of the season. Lower maturity, 
which often translates into a more tart or bitter grapefruit taste, is 
typical of early season fresh-picked grapefruit. Market research 
indicates that a sweeter grapefruit taste is more desirable to 
consumers and could contribute to more repeat purchases of fresh 
grapefruit.
    A ``Grapefruit Sensory Evaluation Study'' conducted by the FDOC in 
1997, concluded that the major determinant of repeat purchases of fresh 
grapefruit was the flavor of the consumer's first grapefruit purchase 
of the season. The results of this study indicate a strong correlation 
between sweetness of flavor and consumer's willingness to make 
additional purchases. The more-bitter the consumer's initial grapefruit 
experience, the less likely the consumer was to make an immediate 
repeat purchase. Conversely, increased sweetness resulted in increased 
repeat purchases of fresh grapefruit.
    The Committee discussed the potential costs associated with this 
action. It was mentioned that some producers could be disadvantaged by 
increased costs. Such costs may include, for example, the need for 
additional maturity checks and fruit that does not meet the higher 
maturity requirements.
    The changes in this rule may require some producers to run 
additional maturity checks prior to harvest and shipping to ensure 
maturity. While additional maturity checks could be required for some, 
such checks are considered a standard practice within the industry and 
are not expected to result in significant increased costs to producers. 
Additional maturity tests could be avoided by simply delaying the 
harvest of the groves in question. Also, the overall impact of this 
change on shipments is expected to be minimal. Because grapefruit 
continues to mature throughout the season, the overall impact on 
industry shipments should be small, with only a small part of the 
grapefruit crop, equal to or less than 2 percent of overall production, 
possibly not meeting the increased maturity. The sliding scale also 
provides some additional flexibility to help producers meet the higher 
maturity requirements.
    This rule may necessitate a delay in the onset of the fresh 
grapefruit harvest for some producers. This may mean selling fruit 
later in the season, and possibly missing the higher prices typically 
available in the early-season. However, the higher maturity 
requirements apply to all Florida fresh grapefruit. This change will 
impact on the entire industry, not just individual regions. Any 
harvesting delays resulting from this increase in maturity will impact 
all regions of the production area.
    In addition, it is anticipated that this change will result in 
higher consumer satisfaction and more repeat purchase, which should 
strengthen demand and stabilize prices. Therefore, the Committee 
believes the benefits gained from increased sales as a result of more 
frequent consumer purchases outweigh any losses associated with 
slightly lower prices received for shipments delayed due to increased 
maturity requirements. Any additional harvesting costs should also be 
compensated for through increased sales and stability in on-tree 
prices.
    The purpose of this rule is to help stabilize the market and 
improve producer returns by increasing the number of repeat purchases 
of grapefruit, particularly earlier in the season. Based on the 
information given above, market research indicates this rule provides 
the consumer with a product that is closer to consumer expectations in 
terms of sweetness of flavor, therefore resulting in an increased 
demand for fresh grapefruit. The opportunities and benefits of this 
rule are expected to be available to all grapefruit handlers and 
producers regardless of their size of operation.
    The Committee considered alternatives to taking this action. One 
alternative considered was a fixed maturity rate near the level 
identified in the market research studies of a level of 8.5 percent 
soluble solids and an 8.0 to 1 solids to acid ratio or higher. 
Committee members believed this option would be too drastic of a change 
to effectuate in one season. While market research demonstrates that 
consumer tastes prefer a higher soluble solids (sugars) and ratio 
combination and sweeter taste, many producers would not be able to 
achieve that level until much later into the season. Therefore, this 
option was rejected.
    Another alternative considered was a fixed maturity rate of 8.0 
percent soluble solids and a 7.5 to 1 solids to acid ratio without the 
addition of an equivalent soluble solids and solids to acid ratio 
sliding scale. However, due to geographical and climactic differences 
between varying regions in the production area, some Committee members 
believed that some producers would have more difficulty in achieving 
the fixed rate, therefore disproportionately foregoing the more 
lucrative early season sales. Therefore, this alternative was also 
rejected.
    The Committee also discussed leaving the regulations as currently 
issued. However, the majority of Committee members agreed that some 
change to minimum maturity was necessary to improve consumer demand for 
fresh grapefruit and to help them compete in the present market. 
Consequently, this alternative was also rejected.
    This rule will not impose any additional reporting or recordkeeping 
requirements on either small or large grapefruit 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. The USDA has not identified any relevant 
Federal rules that duplicate, overlap or conflict with this proposed 
rule. However, as previously stated, grapefruit have to meet certain 
requirements set forth in the standards issued under the Agricultural 
Marketing Act of 1946 (7 CFR 1621 et seq.). Standards issued under the 
Agricultural Marketing Act of 1946 are otherwise voluntary.
    The Committee's meeting was widely publicized throughout the citrus 
industry and all interested persons were invited to attend the meeting 
and participate in Committee deliberations on all issues. Like all 
Committee meetings, the May 22, 2002, meeting was a public meeting and 
all entities, both large and small, were able to express their views on 
this issue. In addition, interested persons are invited to submit 
information on the regulatory and informational impacts of this action 
on small businesses.
    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.
    This rule invites comments on an increase in the minimum maturity 
requirements prescribed under the order. Any comments received will be 
considered prior to finalization of this rule.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
this interim final rule, as hereinafter set forth, will tend to 
effectuate the declared policy of the Act.
    Pursuant to 5 U.S.C. 553, it is also found and determined upon good 
cause that it is impracticable, unnecessary, and contrary to the public 
interest to give preliminary notice prior to putting this rule into 
effect and that good cause exists for not postponing the effective

[[Page 55106]]

date of this rule until 30 days after publication in the Federal 
Register because: (1) Handlers will begin shipping grapefruit at the 
end of August; (2) Florida grapefruit handlers are aware of this issue, 
which has been widely discussed within the industry; (3) the Committee 
recommended this change at a public meeting and interested parties had 
an opportunity to provide input; and (4) this rule provides a 60-day 
comment period and any comments received will be considered prior to 
finalization of this rule.

List of Subjects 7 CFR Part 905

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

    For the reasons set forth in the preamble, 7 CFR part 905 is 
amended as follows:
    1. The authority citation for 7 CFR parts 905 and 944 continues to 
read as follows:

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

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN 
FLORIDA

    2. Section 905.306 is amended by revising the introductory texts of 
paragraphs (a) and (b), and adding a new paragraph (e) to read as 
follows:


Sec. 905.306  Orange, Grapefruit, Tangerine and Tangelo Regulation.

    (a) During the period specified in column (2) of Table I, no 
handler shall ship between the production area and any point outside 
thereof, in the 48 contiguous States and the District of Columbia of 
the United States, any variety of fruit listed in column (1) of Table I 
unless such variety meets the applicable minimum grade and size (with 
tolerances for size as specified in paragraph (c) of this section) 
specified for such variety in columns (3) and (4) of table I: Provided, 
That all grapefruit meet the minimum maturity requirements specified in 
paragraph (e) of this section.
* * * * *
    (b) During the period specified in column (2) of Table II, no 
handler shall ship to any destination outside the 48 contiguous States 
and the District of Columbia of the United States any variety of fruit 
listed in column (1) of Table II unless such variety meets the 
applicable minimum grade and size (with tolerances for size as 
specified in paragraph (c) of this section) specified for such variety 
in columns (3) and (4) of Table II: Provided, That all grapefruit meet 
the minimum maturity requirements specified in paragraph (e) of this 
section.
* * * * *
    (e) All grapefruit shipped under the order shall meet minimum 
maturity requirements of 8.0 percent soluble solids (sugars) and 7.5 to 
1 solids to acid ratio or shall comply with one of the alternate 
equivalent soluble solids and solids to acid ratio combinations set 
forth in Table III: Provided, That the minimum ratio shall not drop 
below 7.2 even if the soluble solids (sugars) reaches a level higher 
than 9.6.

                                Table III
------------------------------------------------------------------------
  Minimum total solids (sugars), %       Solids to acid minimum ratio
------------------------------------------------------------------------
8.0 to (not including) 9.1            7.50 to 1
9.1 to (not including) 9.2            7.45 to 1
9.2 to (not including) 9.3            7.40 to 1
9.3 to (not including) 9.4            7.35 to 1
9.4 to (not including) 9.5            7.30 to 1
9.5 to (not including) 9.6            7.25 to 1
9.6 and greater                       7.20 to 1
------------------------------------------------------------------------


    Dated: August 23, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-22008 Filed 8-23-02; 5:03 pm]
BILLING CODE 3410-02-P