[Federal Register Volume 70, Number 30 (Tuesday, February 15, 2005)]
[Rules and Regulations]
[Pages 7645-7650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-2879]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 930

[Docket No. FV04-930-2 FR]


Tart Cherries Grown in the States of Michigan, et al.; Final Free 
and Restricted Percentages for the 2004-2005 Crop Year

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule establishes final free and restricted percentages 
for the 2004-2005 crop year. The percentages are 72 percent free and 28 
percent restricted and would establish the proportion of tart cherries 
from the 2004 crop which may be handled in commercial outlets. The 
percentages are intended to stabilize supplies and prices, and 
strengthen market conditions. The percentages were recommended by the 
Cherry Industry Administrative Board, the body that locally administers 
the marketing order. The marketing order regulates the handling of tart 
cherries grown in the States of Michigan, New York, Oregon, Utah, 
Washington, and Wisconsin.

DATES: Effective Date: February 16, 2005. This final rule applies to 
all 2004-2005 crop year restricted cherries until they are properly 
disposed of in accordance with marketing order requirements.

FOR FURTHER INFORMATION CONTACT: Patricia A. Petrella or Kenneth G. 
Johnson, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, Suite 6C02, Unit 155, 4700 River Road, Riverdale, 
MD 20737; Telephone: (301) 734-5243 or Fax: (301) 734-5275; 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 or Fax: 
(202) 720-8938.
    Small businesses may request information on complying with this 
regulation, or obtain a guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders by contacting Jay 
Guerber, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA, 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 final rule is issued under Marketing 
Agreement and Order No. 930 (7 CFR part 930), regulating the handling 
of tart cherries produced in the States of Michigan, New York, 
Pennsylvania, Oregon, Utah, Washington, and Wisconsin, 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 final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. Under the marketing order provisions now in 
effect, final free and restricted percentages may be established for 
tart cherries handled by handlers during the crop year. This rule will 
establish final free and restricted percentages for tart cherries for 
the 2004-2005 crop year, beginning July 1, 2004, through June 30, 2005.
    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 exempt 
therefrom. Such handler is afforded the opportunity for a hearing on 
the petition. After the hearing, the 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 in equity to review the 
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.
    The order prescribes procedures for computing an optimum supply and 
preliminary and final percentages that establish the amount of tart 
cherries that can be marketed throughout the season. Handlers handling 
tart cherries produced in the regulated districts are subject to these 
regulations. Tart cherries in the free percentage category may be 
shipped immediately to any market, while restricted percentage tart 
cherries must be held by handlers in a primary or secondary reserve, or 
be diverted in accordance with Sec.  930.59 of

[[Page 7646]]

the order and Sec.  930.159 of the regulations, or used for exempt 
purposes (and obtaining diversion credit) under Sec.  930.62 of the 
order and Sec.  930.162 of the regulations. The regulated districts for 
this season are: District one--Northern Michigan; District two--Central 
Michigan; District three--Southwest Michigan; District four--New York; 
District seven--Utah; District eight--Washington, and District nine--
Wisconsin. Tart cherries produced in Districts five and six (Oregon and 
Pennsylvania, respectively) will not be regulated for the 2004-2005 
season.
    The order prescribes under Sec.  930.52 that those districts to be 
regulated shall be those districts in which the average annual 
production of cherries over the prior three years has exceeded six 
million pounds. A district not meeting the six million-pound 
requirement shall not be regulated in such crop year. Because this 
requirement was not met in the Districts of Oregon and Pennsylvania, 
the tart cherries produced in those districts and handled by handlers 
will not be subject to volume regulation during the 2004-2005 crop 
year.
    Demand for tart cherries at the farm level is derived from the 
demand for tart cherry products at retail. Demand for tart cherries and 
tart cherry products tend to be relatively stable from year to year. 
The supply of tart cherries, by contrast, varies greatly from crop year 
to crop year. The magnitude of annual fluctuations in tart cherry 
supplies is one of the most pronounced for any agricultural commodity 
in the United States. In addition, since tart cherries are processed 
into cans or frozen, they can be stored and carried over from crop year 
to crop year. This creates substantial coordination and marketing 
problems. The supply and demand for tart cherries is rarely balanced. 
The primary purpose of setting free and restricted percentages is to 
balance supply with demand and reduce large surpluses that may occur.
    Section 930.50(a) of the order prescribes procedures for computing 
an optimum supply for each crop year. The Board must meet on or about 
July 1 of each crop year, to review sales data, inventory data, current 
crop forecasts and market conditions. The optimum supply volume shall 
be calculated as 100 percent of the average sales of the prior three 
years (taking into account sales of exempt and restricted percentage 
cherries qualifying for diversion credit) to which is added a desirable 
carryout inventory not to exceed 20 million pounds or such other amount 
as may be established with the approval of USDA. The optimum supply 
represents the desirable volume of tart cherries that should be 
available for sale in the coming crop year.
    The order also provides that on or about July 1 of each crop year, 
the Board is required to establish preliminary free and restricted 
percentages. These percentages are computed by deducting the actual 
carryin inventory from the optimum supply figure (adjusted to raw 
product equivalent--the actual weight of cherries handled to process 
into cherry products) and subtracting that figure (referred to as the 
current crop year requirement) from the current year's USDA crop 
forecast or by an average of such other crop estimates the Board votes 
to use. If the resulting number is positive, this represents the 
estimated over-production, which would be the restricted percentage 
tonnage. The restricted percentage tonnage is then divided by the sum 
of the crop forecast(s) for the regulated districts to obtain a 
preliminary restricted percentage, rounded to the nearest whole number, 
for the regulated districts. If subtracting the current crop year 
requirement, from the current crop forecast, results in a negative 
number, the Board is required to establish a preliminary free tonnage 
percentage of 100 percent with a preliminary restricted percentage of 
zero. The Board is required to announce the preliminary percentages in 
accordance with paragraph (h) of Sec.  930.50.
    The Board met on June 24, 2004, and computed, for the 2004-2005 
crop year, an optimum supply volume of 177 million pounds. The Board 
recommended that the desirable carryout figure be zero pounds. 
Desirable carryout is the amount of fruit required to be carried into 
the succeeding crop year and is set by the Board after considering 
market circumstances and needs. This figure can range from zero to a 
maximum of 20 million pounds. The Board calculated preliminary free and 
restricted percentages as follows: The USDA estimate of the crop for 
the entire production area was 215 million pounds; a 24 million pound 
carryin (based on Board estimates) was subtracted from the optimum 
supply of 177 million pounds which resulted in 2004-2005 tonnage 
requirements (adjusted optimum supply) of 153 million pounds. The 
carryin figure reflects the amount of cherries that handlers actually 
had in inventory at the beginning of the crop year. Subtracting the 
adjusted optimum supply of 153 million pounds from the 215 million 
pound USDA crop estimate (for the entire production area) results in a 
surplus of 62 million pounds of tart cherries. The surplus was then 
divided by the production in the regulated districts (207 million 
pounds) and this resulted in a restricted percentage of 30 percent for 
the 2004-2005 crop year. The free percentage was 70 percent (100 
percent minus 30 percent). The Board established these percentages and 
announced them to the industry as required by the order.
    The table below summarizes the preliminary percentage computations 
made by the Board at its June meeting for the 2004-2005 year:

------------------------------------------------------------------------
                                                               Millions
                                                               of pounds
------------------------------------------------------------------------
Optimum Supply Formula:
    (1) Average sales of the prior three crop years.........         177
    (2) Plus desirable carryout.............................           0
    (3) Optimum supply calculated by the Board at the June           177
     meeting................................................
Preliminary Percentages:
    (4) USDA crop estimate..................................         215
    (5) Carryin held by handlers as of July 1, 2004.........          24
    (6) Adjusted optimum supply for current crop year (Item          153
     3 minus Item 5)........................................
    (7) Surplus (restricted tonnage) (Item 4 minus Item 6)..          62
    (8) USDA crop estimate for regulated districts..........         207
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[[Page 7647]]


 
                                                        Percentages
                                                 -----------------------
                                                     Free     Restricted
------------------------------------------------------------------------
    (9) Preliminary percentages (Item 7 divided           70          30
     by Item 8 x 100 equals restricted
     percentage; 100 minus restricted percentage
     equals free percentage)....................
------------------------------------------------------------------------

    Between July 1 and September 15 of each crop year, the Board may 
modify the preliminary free and restricted percentages by announcing 
interim free and restricted percentages to adjust to the actual pack 
occurring in the industry. No interim adjustments were made.
    USDA establishes final free and restricted percentages through the 
informal rulemaking process. These percentages make available the tart 
cherries necessary to achieve the optimum supply figure calculated by 
the Board. The difference between 100 percent and any final restricted 
percentage designated by USDA is the final free percentage. The Board 
met on September 10, 2004, to recommend final free and restricted 
percentages.
    The actual production reported by the Board for the entire 
production area was 209 million pounds, which is a 6 million pound 
decrease from the USDA crop estimate of 215 million pounds.
    A 25 million pound carryin (based on handler reports) was 
subtracted from the Board's optimum supply of 177 million pounds, 
yielding an adjusted optimum supply for the current crop year of 152 
million pounds. The adjusted optimum supply of 152 million pounds was 
subtracted from the actual production of 209 million pounds, which 
resulted in a 57 million pound surplus. The total surplus of 57 million 
pounds was then divided by the 202 million-pound volume of tart 
cherries produced in the regulated districts. This results in a 28 
percent restricted percentage and a corresponding 72 percent free 
percentage for the regulated districts.
    The final percentages are based on the Board's reported production 
figures and the following supply and demand information available in 
September for the 2004-2005 crop year:

------------------------------------------------------------------------
                                                               Millions
                                                               of pounds
------------------------------------------------------------------------
Optimum Supply Formula:
    (1) Average sales of the prior three years..............         177
    (2) Plus desirable carryout.............................           0
    (3) Optimum supply calculated by the Board at the June           177
     meeting................................................
Final Percentages:
    (4) Board reported production...........................         209
    (5) Carryin held by handlers as of July 1, 2004.........          25
    (6) Adjusted optimum supply (Item 3 minus Item 5).......         152
    (7) Surplus (restricted tonnage) (Item 4 minus Item 6)..          57
    (8) Production in regulated districts...................         202
------------------------------------------------------------------------


 
                                                        Percentages
                                                 -----------------------
                                                     Free     Restricted
------------------------------------------------------------------------
    (9) Final Percentages (Item 7 divided by              72          28
     Item 8 x 100 equals restricted percentage;
     100 minus restricted percentage equals free
     percentage)................................
------------------------------------------------------------------------

    The Department's ``Guidelines for Fruit, Vegetable, and Specialty 
Crop Marketing Orders'' specify that 110 percent of recent years' sales 
should be made available to primary markets each season before 
recommendations for volume regulation are approved. This goal would be 
met by the establishment of final percentages which release 100 percent 
of the optimum supply volume and the additional release of tart 
cherries provided under Sec.  930.50(g). A release of tonnage, equal to 
10 percent of the average sales of the prior three years sales, is made 
available to handlers each season.
    The Board recommended that this release be made available to 
handlers the first week of December and the first week of May. Handlers 
can decide how much of the 10 percent release they would like to 
receive on the December and May release dates. Once released, such 
cherries are available for free use and can be shipped to any market 
the handler desires.
    Approximately 18 million pounds will be made available to handlers 
this season in accordance with Department Guidelines. These cherries 
would be made available to every handler and released in proportion to 
the handler's percentage of the total regulated crop handled. If a 
handler does not take his/her proportionate amount, such amount remains 
in the inventory reserve.

The Regulatory Flexibility Act and Effects on Small Businesses

    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 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 40 handlers of tart cherries who are 
subject to regulation under the tart cherry marketing order and 
approximately 900 producers of tart cherries in the regulated area. 
Small agricultural service firms, which includes handlers, have been 
defined by the Small Business Administration (13 CFR 121.201) 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. A majority of the producers

[[Page 7648]]

and handlers are considered small entities under SBA's standards.
    The principal demand for tart cherries is in the form of processed 
products. Tart cherries are dried, frozen, canned, juiced, and pureed. 
During the period 1998/99 through 2003/04, approximately 92 percent of 
the U.S. tart cherry crop, or 252.8 million pounds, was processed 
annually. Of the 252.8 million pounds of tart cherries processed, 59 
percent was frozen, 29 percent was canned, and 12 percent was utilized 
for juice and other products.
    Based on National Agricultural Statistics Service data, acreage in 
the United States devoted to tart cherry production has been trending 
downward. Bearing acreage has declined from a high of 50,050 acres in 
1987/88 to 37,000 acres in 2003/04. This represents a 26 percent 
decrease in total bearing acres. Michigan leads the nation in tart 
cherry acreage with 73 percent of the total and produces about 75 
percent of the U.S. tart cherry crop each year.
    The 2004/05 crop is moderate in size at 209 million pounds. The 
largest crop occurred in 1995 with production in the regulated 
districts reaching a record 395.6 million pounds. The price per pound 
received by tart cherry growers ranged from a low of 7.3 cents in 1987 
to a high of 46.4 cents in 1991. The problems of wide supply and price 
fluctuations in the tart cherry industry are national in scope and 
impact. Growers testified during the order promulgation process that 
the prices they received often did not come close to covering the costs 
of production.
    The industry demonstrated a need for an order during the 
promulgation process of the marketing order because large variations in 
annual tart cherry supplies tend to lead to fluctuations in prices and 
disorderly marketing. As a result of these fluctuations in supply and 
price, growers realize less income. The industry chose a volume control 
marketing order to even out these wide variations in supply and improve 
returns to growers. During the promulgation process, proponents 
testified that small growers and processors would have the most to gain 
from implementation of a marketing order because many such growers and 
handlers had been going out of business due to low tart cherry prices. 
They also testified that, since an order would help increase grower 
returns, this should increase the buffer between business success and 
failure because small growers and handlers tend to be less capitalized 
than larger growers and handlers.
    Aggregate demand for tart cherries and tart cherry products tends 
to be relatively stable from year-to-year. Similarly, prices at the 
retail level show minimal variation. Consumer prices in grocery stores, 
and particularly in food service markets, largely do not reflect 
fluctuations in cherry supplies. Retail demand is assumed to be highly 
inelastic which indicates that price reductions do not result in large 
increases in the quantity demanded. Most tart cherries are sold to food 
service outlets and to consumers as pie filling; frozen cherries are 
sold as an ingredient to manufacturers of pies and cherry desserts. 
Juice and dried cherries are expanding market outlets for tart 
cherries.
    Demand for tart cherries at the farm level is derived from the 
demand for tart cherry products at retail. In general, the farm-level 
demand for a commodity consists of the demand at retail or food service 
outlets minus per-unit processing and distribution costs incurred in 
transforming the raw farm commodity into a product available to 
consumers. These costs comprise what is known as the ``marketing 
margin.''
    The supply of tart cherries, by contrast, varies greatly. The 
magnitude of annual fluctuations in tart cherry supplies is one of the 
most pronounced for any agricultural commodity in the United States. In 
addition, since tart cherries are processed either into cans or frozen, 
they can be stored and carried over from year-to-year. This creates 
substantial coordination and marketing problems. The supply and demand 
for tart cherries is rarely in equilibrium. As a result, grower prices 
fluctuate widely, reflecting the large swings in annual supplies.
    In an effort to stabilize prices, the tart cherry industry uses the 
volume control mechanisms under the authority of the Federal marketing 
order. This authority allows the industry to set free and restricted 
percentages. These percentages are only applied to states or districts 
with a 3-year average of production greater than six million pounds, 
and to states or districts in which the production is 50 percent or 
more of the previous 5-year processed production average.
    The primary purpose of setting restricted percentages is an attempt 
to bring supply and demand into balance. If the primary market is over-
supplied with cherries, grower prices decline substantially.
    The tart cherry sector uses an industry-wide storage program as a 
supplemental coordinating mechanism under the Federal marketing order. 
The primary purpose of the storage program is to warehouse supplies in 
large crop years in order to supplement supplies in short crop years. 
The storage approach is feasible because the increase in price--when 
moving from a large crop to a short crop year--more than offsets the 
costs for storage, interest, and handling of the stored cherries.
    The price that growers' receive for their crop is largely 
determined by the total production volume and carryin inventories. The 
Federal marketing order permits the industry to exercise supply control 
provisions, which allow for the establishment of free and restricted 
percentages for the primary market, and a storage program. The 
establishment of restricted percentages impacts the production to be 
marketed in the primary market, while the storage program has an impact 
on the volume of unsold inventories.
    The volume control mechanism used by the cherry industry results in 
decreased shipments to primary markets. Without volume control the 
primary markets (domestic) would likely be over-supplied, resulting in 
lower grower prices.
    To assess the impact that volume control has on the prices growers 
receive for their product, an econometric model has been developed. The 
econometric model provides a way to see what impacts volume control may 
have on grower prices. The three districts in Michigan, along with the 
districts in Utah, New York, Washington, and Wisconsin are the 
restricted areas for this crop year and their combined total production 
is 202 million pounds. A 28 percent restriction means 145 million 
pounds is available to be shipped to primary markets from these five 
states. Production levels of 3.9 million pounds for Oregon, and 2.8 
million pounds for Pennsylvania (the unregulated areas in 2004-2005), 
result in an additional 6.7 million pounds available for primary market 
shipments.
    In addition, USDA requires a 10 percent release from reserves as a 
market growth factor. This will result in an additional 18 million 
pounds being available for the primary market. The 145 million pounds 
from Michigan, New York, Utah, Washington, and Wisconsin, the 
approximately 7 million pounds from the other producing states, the 18 
million pound release, and the 25 million pound carryin inventory gives 
a total of 195 million pounds being available for the primary markets.
    The econometric model is used to estimate the difference between 
grower prices with and without restrictions. With volume controls, 
grower prices are estimated to be approximately $0.08 higher than 
without volume controls.
    The use of volume controls is estimated to have a positive impact 
on

[[Page 7649]]

growers' total revenues. With restriction, revenues are estimated to be 
$10.7 million higher than without restrictions. The without 
restrictions scenario assumes that all tart cherries produced would be 
delivered to processors for payments. This scenario is likely since the 
total available supply in this crop year is very similar to last year's 
when there was a full release of the reserve pool, and handlers appear 
to be encouraging growers to deliver their entire crop this year. 
Although carryout inventories are 25 million pounds, only 1 million 
pounds is in the reserve while 24 million pounds are held in free 
inventories held by packers.
    It is concluded that the 28 percent volume control would not unduly 
burden producers and handlers, particularly smaller growers and 
handlers. The 28 percent restriction would be applied in Michigan, New 
York, Utah, Washington, and Wisconsin. The growers and handlers in the 
other two states covered under the marketing order will benefit from 
the market stability anticipated to result from this restriction.
    Recent grower prices have been as high as $0.44 per pound in the 
2002-2003 crop year. At current production and yield levels, the cost 
of production is reported to be $0.43 per pound. Thus, the estimated 
$0.43 per pound received by growers under the regulation scenario just 
covers the cost of production. Under the no regulation scenario, 
estimated grower prices would not cover the total cost of production. 
Lower yields and production result in higher costs of production. 
Overhead or fixed costs are spread over lower levels of production 
which results in higher costs of production per acre. Even in years 
when no production is harvested, growers face fixed costs of production 
and additional costs associated with maintaining the orchard for future 
years of production. The use of volume controls is believed to have 
little or no effect on consumer prices and will not result in fewer 
retail sales or sales to food service outlets.
    Without the use of volume controls, the industry could be expected 
to start to build large amounts of unwanted inventories. These 
inventories would have a depressing effect on grower prices. The 
econometric model shows for every 1 million-pound increase in carryin 
inventories, a decrease in grower prices of $0.0033 per pound occurs. 
The use of volume controls allows the industry to supply the primary 
markets while avoiding the disastrous results of over-supplying these 
markets. In addition, through volume control, the industry has an 
additional supply of cherries that can be used to develop secondary 
markets such as exports and the development of new products. The use of 
reserve cherries in the production shortened 2002-2003 crop year proved 
to be very useful and beneficial to growers and packers.
    In discussing the possibility of marketing percentages for the 
2004-2005 crop year, the Board considered the following factors 
contained in the marketing policy: (1) The estimated total production 
of cherries; (2) the estimated size of the crop to be handled; (3) the 
expected general quality of such cherry production; (4) the expected 
carryover as of July 1 of canned and frozen cherries and other cherry 
products; (5) the expected demand conditions for cherries in different 
market segments; (6) supplies of competing commodities; (7) an analysis 
of economic factors having a bearing on the marketing of cherries; (8) 
the estimated tonnage held by handlers in primary or secondary 
inventory reserves; and (9) any estimated release of primary or 
secondary inventory reserve cherries during the crop year.
    The Board's review of the factors resulted in the computation and 
announcement in September 2004 of the free and restricted percentages 
established by this rule (72 percent free and 28 percent restricted).
    One alternative to this action would be not to have volume 
regulation this season. Board members stated that no volume regulation 
would be detrimental to the tart cherry industry due to the size of the 
2004-2005 crop. Returns to growers would not cover their costs of 
production for this season which might cause some to go out of 
business.
    As mentioned earlier, the Department's ``Guidelines for Fruit, 
Vegetable, and Specialty Crop Marketing Orders'' specify that 110 
percent of recent years' sales should be made available to primary 
markets each season before recommendations for volume regulation are 
approved. The quantity available under this rule is 110 percent of the 
quantity shipped in the prior three years.
    The free and restricted percentages established by this rule 
release the optimum supply and apply uniformly to all regulated 
handlers in the industry, regardless of size. There are no known 
additional costs incurred by small handlers that are not incurred by 
large handlers. The stabilizing effects of the percentages impact all 
handlers positively by helping them maintain and expand markets, 
despite seasonal supply fluctuations. Likewise, price stability 
positively impacts all producers by allowing them to better anticipate 
the revenues their tart cherries will generate.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this regulation.
    While the benefits resulting from this rulemaking are difficult to 
quantify, the stabilizing effects of the volume regulations impact both 
small and large handlers positively by helping them maintain markets 
even though tart cherry supplies fluctuate widely from season to 
season.
    In compliance with Office of Management and Budget (OMB) 
regulations (5 CFR part 1320) which implement the Paperwork Reduction 
Act of 1995 (Pub. L. 104-13), the information collection and 
recordkeeping requirements under the tart cherry marketing order have 
been previously approved by OMB and assigned OMB Number 0581-0177.
    Reporting and recordkeeping burdens are necessary for compliance 
purposes and for developing statistical data for maintenance of the 
program. The forms require information which is readily available from 
handler records and which can be provided without data processing 
equipment or trained statistical staff. As with other, similar 
marketing order programs, reports and forms are periodically studied to 
reduce or eliminate duplicate information collection burdens by 
industry and public sector agencies. This rule will not change those 
requirements.
    A proposed rule concerning this action was published in the Federal 
Register on December 10, 2004, (69 FR 71744). Copies of the rule were 
mailed or sent via facsimile to all Board members and handlers. 
Finally, the rule was made available through the Internet by the Office 
of the Federal Register and USDA. A 30-day comment period ending 
January 10, 2005, was provided to allow interested persons to respond 
to the proposal.
    One comment was received during the comment period in response to 
the proposal. The commenter stated that the percentages were too 
restrictive. The commenter was of the view that the percentages were 
outdated, restricted trade, and should be removed. The commenter also 
believed that the Board should be terminated.
    The marketing order program including this rule is authorized under 
the authority of the Agricultural Marketing Agreement Act of 1937. The 
Board recommended the percentages based on its review of sales data, 
inventory data, current crop forecasts, and market conditions. It 
calculated an optimum supply which represents the desirable volume of 
tart cherries needed

[[Page 7650]]

to meet primary market needs. Further, the Board, at a later date, can 
recommend a release of the reserve to provide more tart cherries to 
satisfy market needs as may be necessary.
    Accordingly, no changes will be made to the rule as proposed, based 
on the comment 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 matter presented, including the 
information and recommendation submitted by the Board, and other 
available information, it is hereby found that this rule, as 
hereinafter set forth, will tend to effectuate the declared policy of 
the Act.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) because handlers are already shipping 
cherries from the 2004-2005 crop. Further, handlers are aware of this 
rule, which was recommended at a public meeting. Also, a thirty-day 
comment period was provided for in the proposed rule, and the comment 
received has been addressed herein.

List of Subjects in 7 CFR Part 930

    Marketing agreements, Reporting and recordkeeping requirements, 
Tart cherries.

0
For the reasons set forth in the preamble, 7 CFR part 930 is amended as 
follows:

PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK, 
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN

0
1. The authority citation for 7 CFR part 930 continues to read as 
follows:


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


0
2. Section 930.254 is added to read as follows:

    Note: This section will not appear in the annual Code of Federal 
Regulations.

Sec.  930.254  Final free and restricted percentages for the 2004-2005 
crop year.

    The final percentages for tart cherries handled by handlers during 
the crop year beginning on July 1, 2004, which shall be free and 
restricted, respectively, are designated as follows: Free percentage, 
72 percent and restricted percentage, 28 percent.

    Dated: February 8, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-2879 Filed 2-14-05; 8:45 am]
BILLING CODE 3410-02-P