[Federal Register Volume 69, Number 25 (Friday, February 6, 2004)]
[Rules and Regulations]
[Pages 5679-5682]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2653]



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 Rules and Regulations
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  Federal Register / Vol. 69, No. 25 / Friday, February 6, 2004 / Rules 
and Regulations  

[[Page 5679]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV04-905-1 IFR]


Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; 
Relaxing Limits on the Volume of Small Red Seedless Grapefruit

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: This rule relaxes weekly limits on small red seedless 
grapefruit entering the fresh market under the marketing order covering 
oranges, grapefruit, tangerines, and tangelos grown in Florida (order). 
The Citrus Administrative Committee (Committee), which locally 
administers the order, recommended this action. This rule relaxes the 
weekly limitation set for shipments of small-sized red seedless 
grapefruit entering the fresh market from 40 percent to 50 percent 
during the last week of the 22-week regulatory period. This action 
provides an additional volume of small red seedless grapefruit to 
address current marketing conditions without saturating all markets 
with these small sizes. This rule should help stabilize the market and 
improve grower returns.

DATES: Effective February 9, 2004; comments received by February 10, 
2004, will be considered prior to issuance of a final rule.

ADDRESSES: Interested persons are invited to submit written comments 
concerning this rule. Comments must be sent to the Docket Clerk, 
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: William G. Pimental, Southeast 
Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter 
Haven, Florida 33884-1671; telephone: (863) 324-3375, Fax: (863) 325-
8793; 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 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 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 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 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 relaxes limits on the volume of small red seedless 
grapefruit entering the fresh market. This rule allows for an 
additional volume of sizes 48 and 56 fresh red seedless grapefruit to 
be shipped during the last week of the 22-week percentage of size 
regulation period for the 2003-04 season. This rule supplies an 
additional volume of small red seedless grapefruit to address current 
marketing conditions without saturating all markets with these small 
sizes. This action should help stabilize the market and improve grower 
returns.
    Section 905.52 of the order provides authority to limit shipments 
of any grade or size, or both, of any variety of Florida citrus. Such 
limitations may restrict the shipment of a portion of a specified grade 
or size of a variety. Under such a limitation, the quantity of such 
grade or size a handler may ship during a particular week is 
established as a percentage of the total shipments of such variety 
shipped by that handler during a prior period, established by the 
Committee and approved by USDA.
    Section 905.153 of the regulations provides procedures for limiting 
the volume of small red seedless grapefruit entering the fresh market. 
The procedures specify that the Committee may recommend that only a 
certain percentage of sizes 48 and 56 red seedless grapefruit be made 
available for shipment into fresh market channels for any week or weeks 
during the regulatory period. The regulation period is 22 weeks long 
and begins the third Monday in September. Under such a limitation, the 
quantity of sizes 48 and 56 red seedless grapefruit that may be shipped 
by a handler during a regulated week is

[[Page 5680]]

calculated using the recommended percentage. By taking the recommended 
weekly percentage times the average weekly volume of red seedless 
grapefruit handled by such handler in the previous five seasons, 
handlers can calculate the total volume of sizes 48 and 56 they may 
ship in a regulated week.
    This rule relaxes limits on the volume of sizes 48 (3\9/16\ inches 
minimum diameter) and 56 (3\5/16\ inches minimum diameter) red seedless 
grapefruit entering the fresh market by increasing the weekly 
percentage established for week 22 (February 9 through February 15, 
2004), from 40 percent to 50 percent. The Committee unanimously 
recommended this change during a January 22, 2004, telephone meeting.
    On July 1, 2003, the Committee recommended regulating all 22 weeks 
(September 15, 2003-February 15, 2004). The Committee recommended that 
the weekly percentages be set at 45 percent for the first 2 weeks, 35 
percent for weeks 3 through 19, and 40 percent for the remaining 3 
weeks. These percentages were established following informal rulemaking 
procedures, with an interim final rule published in the Federal 
Register on September 9, 2003 (68 FR 53015), and a final rule published 
in the Federal Register on November 14, 2003 (68 FR 64494).
    The Committee believes that the over shipment of small-sized red 
seedless grapefruit has a detrimental effect on the market. While there 
is a market for small-sized red seedless grapefruit, the availability 
of large quantities oversupplies the fresh market with these sizes and 
negatively impacts the market for all sizes. These smaller sizes, 48 
and 56, normally return the lowest prices when compared to the other 
larger sizes. However, when there is too much volume of the smaller 
sizes available, the overabundance of small-sized fruit pulls the 
prices down for all sizes.
    In its discussion of the relaxation of the percentage for the last 
week when percentage size limitations apply, the Committee reviewed the 
percentages previously recommended and the current state of the crop. 
The Committee also considered some additional information that was not 
available during its earlier meeting. On January 12, 2004, USDA 
released information regarding fruit size distribution developed from a 
December size survey. The size survey showed that more small sizes were 
available than anticipated. The release stated that the mean size 
indicated that only two other seasons during the past ten years have 
had smaller sizes. According to the survey, more than 50 percent of the 
remaining crop is size 48 and smaller. This compares to only 34 percent 
at this time last season.
    The Committee had not expected small sizes to represent such a 
large portion of the available crop by this time in the season. With 
small sizes representing a significant amount of this year's crop, 
larger sizes are in shorter supply. Growers have spot picked their 
groves twice looking for larger sizes and to spot pick again would be 
cost prohibitive. Also, with the expectation that the fruit size will 
not improve, there will continue to be a shortage of large sizes. This 
means that there will be a sizable amount of small sizes available at 
the end of the regulated period.
    With a limited number of larger sizes available, there has also 
been market pressure to use small sizes to serve markets that 
traditionally take larger sizes. However, at the same time, markets 
that traditionally demand small sizes are also demanding fruit. There 
are indications that importers of small-sized fruit began purchasing 
fruit earlier than in past seasons. Export shipments for the week 
ending January 18 were nearly 20 percent higher than for the same week 
last season. These factors have made supplies of available allotment of 
small-sized fruit tight.
    The Committee offices have been receiving calls from members of the 
industry asking that the weekly percentages be increased. The Committee 
staff has also been actively working with handlers on allotment loans 
and transfers to accommodate the needs of handlers desiring to ship 
more small-sized red seedless grapefruit. Requests for loans and 
transfers have been increasing from 3 requests during week 15, to 19 
for week 17, to 24 requests during week 18.
    However, while the percentage of size regulation does provide 
allowances for over shipments, loans, and transfers of allotment during 
regulation weeks 1 through 21, there are no allowances for loans or 
over shipment for week 22 because it is the end of the regulation 
period. The Committee agreed that some increase in the percentage was 
necessary for the last week of regulation to recognize that some 
handlers would be having to reduce their allotment to cover any over 
shipments from the previous week and that no additional over shipments 
would be permitted.
    There is also concern in the industry that if there is not some 
relaxation in the percentage, a large volume of small-sized fruit may 
be pushed into the market following the end of the regulation period. 
This would negatively impact prices and undermine the success of the 
regulation to this point. During the 2001-02 season, small sizes also 
represented a significant percentage of the crop at the end of the 
regulation period. The Committee had recommended a relaxation in the 
percentages for the last few weeks of the season, but, due to 
rulemaking time frames, the percentage changes were not implemented. 
Following the end of the regulation period, sizable quantities of small 
sizes were dumped onto the market. This contributed to a 35 cent per 
carton reduction in the f.o.b. price. The Committee believes that 
relaxing the percentage for the last week of regulation may help 
relieve some of the volume of small sizes and provide for a smoother 
transition to the end of the regulation period.
    The Committee discussed several alternatives ranging from 
maintaining the percentages at their current rate, increasing week 21 
to 45 percent and week 22 to 50 percent, and just increasing the 
percentage rate for week 22. The Committee agreed it would be difficult 
to get a change to week 21 in place prior to that regulation week, and 
recommended increasing the percentage for week 22 from 40 percent to 50 
percent. Such a change represents an additional industry allotment of 
72,174 cartons for the last week of regulation. The Committee believes 
this will provide the industry with some additional flexibility and 
help with the transition from the end of the 22-week regulation period 
to the unrestricted shipment of small sizes.
    Members agreed that one of the most important goals of percentage 
of size regulation was to create some discipline in the way fruit was 
packed and marketed. However, considering the size survey results, and 
the other information discussed, the Committee decided that increasing 
the weekly percentage for week February 9 through February 15 will 
address the goals of this regulation, while providing handlers with 
some additional marketing flexibility.
    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 grapefruit, imports of that 
commodity must meet the same or comparable requirements. This rule does 
not change the minimum grade and size requirements under the order, 
only the percentages of sizes 48 and 56 red seedless grapefruit that 
may be handled. Therefore, no change is necessary in the grapefruit 
import regulations as a result of this action.

[[Page 5681]]

Initial Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the Agricultural Marketing Service (AMS) has considered the 
economic impact of this action on small entities. Accordingly, AMS has 
prepared this initial regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 75 grapefruit handlers subject to 
regulation under the order and approximately 11,000 growers of citrus 
in the regulated area. Small agricultural service firms, including 
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 red seedless grapefruit during the 2002-03 
season was approximately $7.24 per \4/5\-bushel carton, and total fresh 
shipments for the 2002-03 season are estimated at 22.9 million cartons 
of red grapefruit. Approximately 25 percent of all handlers handled 75 
percent of Florida's grapefruit shipments. Using the average f.o.b. 
price, at least 75 percent of the 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.
    On July 1, 2003, the Committee recommended limiting the volume of 
sizes 48 and 56 red seedless grapefruit shipped during the first 22 
weeks of the 2003-04 season by setting weekly percentages for each of 
the 22 weeks, beginning September 15, 2003. Weekly percentages were 
established at 45 percent for weeks 1 and 2, 35 percent for week 3 
through week 19, and at 40 percent for weeks 20, 21, and 22. The 
quantity of sizes 48 and 56 red seedless grapefruit that may be shipped 
by a handler during a particular week is calculated using the 
percentages set. This rule relaxes the weekly limitation set for 
shipments of small-sized red seedless grapefruit entering the fresh 
market from 40 percent to 50 percent during the last week of the 22-
week regulatory period. This action provides an additional volume of 
small red seedless grapefruit to address current marketing conditions 
without saturating all markets with these small sizes. This rule should 
help stabilize the market and improve grower returns. This rule uses 
the provisions of Sec.  905.153. Authority for this action is provided 
in Sec.  905.52 of the order. The Committee unanimously recommended 
this action during a telephone meeting on January 22, 2004.
    This rule will increase the weekly percentage set for the last week 
of regulation. The Committee made this recommendation to address the 
issue that the majority of the remaining crop is made up of small 
sizes. By increasing the percentage, more small sizes are available for 
shipment. This should help handlers meet their market needs and provide 
for some additional flexibility without putting too many small sizes on 
the market. This should benefit both handler and producer returns.
    The purpose of percentage of size regulation is to help stabilize 
the market and improve grower returns. This change provides a supply of 
small-sized red seedless grapefruit sufficient to meet market demand, 
without saturating all markets with these small sizes. This action is 
not expected to decrease the overall consumption of red seedless 
grapefruit. It is expected to benefit all red seedless grapefruit 
growers and handlers regardless of their size of operation.
    The Committee considered several alternatives when discussing this 
action, including maintaining the percentages at their current rate, 
increasing week 21 to 45 percent and week 22 to 50 percent, and just 
increasing the percentage rate for week 22. The Committee agreed it 
would be difficult to get a change to week 21 in place prior to that 
regulation week, and recommended increasing the percentage for week 22 
from 40 percent to 50 percent to provide the industry with some 
additional flexibility and provide a smooth transition to the period 
without percentage size limitations.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the information collection requirements contained in this 
rule have been previously approved by the Office of Management and 
Budget (OMB) and assigned OMB No. 0581-0189. As with all Federal 
marketing order programs, reports and forms are periodically reviewed 
to reduce information requirements and duplication by industry and 
public sectors.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap or conflict with this rule. However, red seedless grapefruit 
must meet the requirements as specified in the U.S. Standards for 
Grades of Florida Grapefruit (7 CFR 51.760 through 51.784) issued under 
the Agricultural Marketing Act of 1946 (7 U.S.C. 1621 through 1627).
    In addition, while the meeting on January 22, 2004, was a telephone 
meeting, interested persons outside the Committee had an opportunity to 
provide input in the decision. The Committee manager provided a notice 
to the industry and anyone had the opportunity to participate in the 
call. Like all Committee meetings, the January 22, 2004, meeting 
provided both large and small entities the opportunity to express views 
on this issue. Also, the weekly percentage size regulation has been an 
ongoing issue that has been discussed at numerous public meetings so 
that interested parties have had the opportunity to express their views 
on this issue. 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 relaxing limits on the volume of 
small red seedless grapefruit entering the fresh market during the last 
week of the 22-week percentage of size regulation for the 2003-04 
season. 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 date 
of this rule until 30 days after publication in the Federal Register 
because this rule needs to be in place when the regulatory week begins 
February 9, 2004, so handlers can meet

[[Page 5682]]

the market needs of their customers. The industry has been discussing 
this issue for the last two weeks, and the Committee has kept the 
industry well informed.

List of Subjects in 7 CFR Part 905

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

0
For the reasons set forth in the preamble, 7 CFR part 905 is amended as 
follows:

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

0
1. The authority citation for 7 CFR Part 905 continues to read as 
follows:

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


Sec.  905.350  [Amended]

0
2. In Sec.  905.350, the weekly percentage for ``(v) 2/9/04 through 2/
15/04'' is changed from ``40'' to ``50''.

    Dated: February 3, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-2653 Filed 2-4-04; 11:02 am]
BILLING CODE 3410-02-P