[Federal Register Volume 70, Number 147 (Tuesday, August 2, 2005)]
[Rules and Regulations]
[Pages 44243-44249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15168]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV05-916-1 FIR]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, with changes, an interim final rule revising the handling 
requirements for California nectarines and peaches by modifying the 
grade, size, maturity, and pack requirements for fresh shipments of 
these fruits, beginning with 2005 season shipments. This rule also 
authorizes continued shipments of ``CA Utility'' quality nectarines and 
peaches, and revises weight-count standards for fruit in volume-filled 
containers. The marketing orders regulate the handling of nectarines 
and peaches grown in California and are administered locally by the 
Nectarine Administrative and Peach Commodity Committees (committees). 
This rule enables handlers to continue to ship fresh nectarines and 
peaches in a manner that meets consumer needs, increases returns to 
producers and handlers, and reflects current industry practices.

EFFECTIVE DATE: September 1, 2005.

FOR FURTHER INFORMATION CONTACT: California Marketing Field Office, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA, Telephone (559) 487-5901, Fax: (559) 487-5906; 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 Nos. 124 and 85, and Marketing Order Nos. 916 and 917 (7 CFR 
parts 916 and 917) regulating the handling of nectarines and peaches 
grown in California, respectively, hereinafter referred to as the 
``orders.'' The orders are effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    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.
    Under the orders, grade, size, maturity, pack and container 
requirements are established for fresh shipments of California 
nectarines and peaches. Such requirements are in effect on a continuing 
basis. The Nectarine Administrative Committee (NAC) and the Peach 
Commodity Committee (PCC), which are responsible for local 
administration of the orders, met on December 7, 2004, and unanimously 
recommended that these handling requirements be revised for the 2005 
season, which began about the first week of April. The changes will: 
(1) revise varietal maturity, quality, and size requirements to better 
reflect current industry practices; (2) authorize continued shipments 
of ``CA Utility'' quality fruit during the 2005 season; and (3) adjust 
weight-count standards for fruit packed in volume-filled containers.
    The committees meet prior to and during each season to review the 
rules and regulations effective on a continuing basis for California 
nectarines and peaches under the orders. Committee meetings are open to

[[Page 44244]]

the public and interested persons are encouraged to express their views 
at these meetings. The committees held such meetings on December 7, 
2004. USDA reviews committee recommendations and information, as well 
as information from other sources, and determines whether modification, 
suspension, or termination of the rules and regulations would tend to 
effectuate the declared policy of the Act.
    No official crop estimate was available at the time of the 
committees' December 7, 2004, meetings because the nectarine and peach 
trees were dormant. The committees subsequently made crop estimates at 
their meetings on April 24, 2005. The 2005 nectarine crop was estimated 
to be approximately 20,682,000 containers, and the 2005 peach crop was 
estimated to be approximately 21,180,000 containers. These crop 
estimates are slightly larger than the 2004 crops, which totaled 
19,860,000 containers of nectarines and 20,585,000 containers of 
peaches.

Grade and Quality Requirements

    Sections 916.52 and 917.41 of the orders authorize the 
establishment of grade and quality requirements for nectarines and 
peaches, respectively. Prior to the 1996 season, Sec.  916.356 required 
nectarines to meet a modified U.S. No. 1 grade. Specifically, 
nectarines were required to meet U.S. No. 1 grade requirements, except 
for a slightly tighter requirement for scarring and a more liberal 
allowance for misshapen fruit. Prior to the 1996 season, Sec.  917.459 
required peaches to meet the requirements of a U.S. No. 1 grade, except 
for a more liberal allowance for open sutures that were not ``serious 
damage.''
    This rule continues in effect the revisions of Sec. Sec.  916.350, 
916.356, 917.442, and 917.459 to permit shipments of nectarines and 
peaches meeting ``CA Utility'' quality requirements during the 2005 
season. (``CA Utility'' fruit is lower in quality than that meeting the 
modified U.S. No. 1 grade requirements.) Shipments of nectarines and 
peaches meeting ``CA Utility'' quality requirements have been permitted 
each season since 1996.
    Studies conducted by the NAC and PCC in 1996 indicated that some 
consumers, retailers, and foreign importers found the lower-quality 
fruit acceptable in some markets. When shipments of ``CA Utility'' 
nectarines were first permitted in 1996, they represented 1.1 percent 
of all nectarine shipments, or approximately 210,000 containers. 
Shipments of ``CA Utility'' nectarines reached a high of 6 percent 
(1,408,362 containers) during the 2003 season.
    Shipments of ``CA Utility'' peaches totaled 1.9 percent of all 
peach shipments, or approximately 366,000 containers, during the 1996 
season. Shipments of ``CA Utility'' peaches reached a high of 5.6 
percent of all peach shipments (1,231,000 containers) during the 2002 
season.
    Handlers have commented that the availability of the ``CA Utility'' 
quality option lends flexibility to their packing operations. They have 
noted that they now have the opportunity to remove marginal nectarines 
and peaches from their U.S. No. 1 containers and place this fruit in 
containers of ``CA Utility.'' This flexibility, the handlers note, 
results in better quality U.S. No. 1 packs without sacrificing fruit.
    The Tree Fruit Quality Subcommittee met on November 30, 2004, and 
recommended unanimously to the NAC and PCC to continue shipments of 
``CA Utility'' quality nectarines and peaches. Subsequently, the NAC 
and PCC voted unanimously at their December 7, 2004, meetings to 
authorize continued shipments of ``CA Utility'' quality fruit during 
the 2005 season.
    Accordingly, based upon the recommendations, the revisions to 
paragraph (d) of Sec. Sec.  916.350 and 917.442, and paragraph (a)(1) 
of Sec. Sec.  916.356 and 917.459 continue in effect to permit 
shipments of nectarines and peaches meeting ``CA Utility'' quality 
requirements during the 2005 season, on the same basis as shipments 
since the 2000 season.

Maturity Requirements

    In Sec. Sec.  916.52 and 917.41, authority is provided to establish 
maturity requirements for nectarines and peaches, respectively. The 
minimum maturity level currently specified for nectarines and peaches 
is ``mature'' as defined in the standards. For most varieties, ``well-
matured'' determinations for nectarines and peaches are made using 
maturity guides (e.g., color chips, along with other maturity tests as 
applied by the inspection service). These maturity guides are reviewed 
each year by the Shipping Point Inspection Service (SPI) to determine 
whether they need to be changed, based upon the most-recent information 
available on the individual characteristics of each nectarine and peach 
variety.
    These maturity guides established under the handling regulations of 
the California tree fruit marketing orders have been codified in the 
Code of Federal Regulations as Table 1 in Sec. Sec.  916.356 and 
917.459, for nectarines and peaches, respectively.
    The requirements in the 2005 handling regulations are the same as 
those that appeared in the 2004 handling regulations with a few 
exceptions. Those exceptions are explained in this rule and continue in 
effect.
    Nectarines: Requirements for ``well-matured'' nectarines are 
specified in Sec.  916.356 of the order's rules and regulations. This 
rule continues in effect the revision of Table 1 of paragraph 
(a)(1)(iv) of Sec.  916.356 to add maturity guides for eleven varieties 
of nectarines. Specifically, SPI recommended adding maturity guides for 
the Crimson Baby variety to be regulated at the G maturity guide; for 
the Alta Red, Grand Candy, Kay Glo, Kay Sweet, Red Roy and Shay Sweet 
varieties at the J maturity guide; and for the August Fire, Candy Gold, 
Prince Jim I and Sugar Queen varieties to be regulated at the L 
maturity guide.
    The NAC recommended these maturity guide requirements based on 
SPI's continuing review of individual maturity characteristics and 
identification of the appropriate maturity guide corresponding to the 
``well-matured'' level of maturity for nectarine varieties in 
production.
    Peaches: Requirements for ``well-matured'' peaches are specified in 
Sec.  917.459 of the order's rules and regulations. This rule continues 
in effect revisions to Table 1 of paragraph (a)(1)(iv) of Sec.  917.459 
to add maturity guides for six peach varieties. Specifically, SPI 
recommended adding maturity guides for the Island Princess variety to 
be regulated at the H maturity guide; the Bev's Red variety to be 
regulated at the I maturity guide; and the Prima Peach IV, Spring Gem, 
Sweet Amber, and Zee Diamond varieties to be regulated at the J 
maturity guide.
    The PCC also recommended adding the Burpeachtwo (Henry II[reg]) 
variety to the table for regulation at the J maturity guide, but that 
variety had already been added to the table for regulation at the J 
maturity guide in 2004 (7 July 2004, 69 FR 41120). Thus, the revision 
of Table 1 of paragraph (a)(1)(iv) of Sec.  917.459 continues in effect 
to reflect the recommended addition of only six varieties.
    The NAC and PCC recommended these maturity guide requirements based 
on SPI's continuing review of individual maturity characteristics and 
identification of the appropriate maturity guide corresponding to the 
``well-matured'' level of maturity for nectarine and peach varieties in 
production.

[[Page 44245]]

Size Requirements

    Both orders provide authority (in Sec. Sec.  916.52 and 917.41) to 
establish size requirements. Size regulations encourage producers to 
leave fruit on the tree longer, which improves both size and maturity 
of the fruit. Acceptable fruit size provides greater consumer 
satisfaction and promotes repeat purchases, and, therefore, increases 
returns to producers and handlers. In addition, increased fruit size 
results in increased numbers of packed containers of nectarines and 
peaches per acre, also a benefit to producers and handlers.
    Varieties recommended for specific size regulations have been 
reviewed and such recommendations are based on the specific 
characteristics of each variety. The NAC and PCC conduct studies each 
season on the range of sizes attained by the regulated varieties and 
those varieties with the potential to become regulated, and determine 
whether revisions to the size requirements are appropriate.
    Nectarines: Section 916.356 of the order's rules and regulations 
specifies minimum size requirements for fresh nectarines in paragraphs 
(a)(2) through (a)(9). This rule continues in effect the revision of 
Sec.  916.356 to establish variety-specific minimum size requirements 
for nine varieties of nectarines that were produced in commercially 
significant quantities of more than 10,000 containers for the first 
time during the 2004 season. This rule also continues in effect the 
removal of the variety-specific minimum size requirements for fifteen 
varieties of nectarines whose shipments fell below 5,000 containers 
during the 2004 season.
    For example, one of the varieties recommended for addition to the 
variety-specific minimum size requirements is the La Pinta variety of 
nectarines, recommended for regulation at a minimum size 80. Studies of 
the size ranges attained by the La Pinta variety revealed that 100 
percent of the containers met the minimum size of 80 during the 2001, 
2002, and 2003 seasons. Sizes ranged from size 30 to size 80, with 4.9 
percent of the fruit in the 30 sizes, 34.3 percent of the packages in 
the 40 sizes, 41.1 percent in the 50 sizes, 19.5 percent in the 60 
sizes, 0.2 percent in the 70 sizes and 0 percent in the size 80, for 
the 2003 season. However, the fruit sized down to the 80 sizes during 
the two previous seasons, and setting the minimum size at size 70 would 
not be appropriate at this time.
    A review of other varieties with the same harvesting period 
indicated that the La Pinta variety was also comparable to those 
varieties in its size ranges for that time period. Discussions with 
handlers known to handle the variety confirm this information regarding 
minimum size and harvesting period, as well. Thus, the recommendation 
to place the La Pinta variety in the variety-specific minimum size 
regulation at a minimum size 80 is appropriate. This recommendation 
results from size studies conducted over a three-year period.
    Historical data such as this provides the NAC with the information 
necessary to recommend the appropriate sizes at which to regulate 
various nectarine varieties. In addition, producers and handlers of the 
varieties affected are personally invited to comment when such size 
recommendations are deliberated. Producer and handler comments are also 
considered at both NAC and subcommittee meetings when the staff 
receives such comments, either in writing or verbally.
    For reasons similar to those discussed in the preceding paragraph, 
the revision to the introductory text of paragraph(a)(3) of Sec.  
916.356 continues in effect to include the Red Jewel and Zee Fire 
varieties; the revision of the introductory text of paragraph (a)(4) of 
Sec.  916.356 continues in effect to include the Diamond Pearl and Kay 
Fire varieties; and the revision to the introductory text of paragraph 
(a)(6) of Sec.  916.356 continues in effect to include the Burnectfour 
(Summer Flare[reg] 35), Burnectseven (Summer Flare[reg] 28), Honey Dew, 
La Pinta and Mike's Red nectarine varieties.
    This rule also continues in effect the revision of the introductory 
text of paragraphs (a)(3), (a)(4), (a)(5) and (a)(6) of Sec.  916.356 
to remove fifteen varieties from the variety-specific minimum size 
requirements specified in these paragraphs because less than 5,000 
containers of each of these varieties were produced during the 2004 
season. Specifically, the revision of the introductory text of 
paragraph (a)(3) of Sec.  916.356 continues in effect to remove the May 
Kist nectarine variety; the revision of the introductory text of 
paragraph (a)(4) of Sec.  916.356 continues in effect to remove the 
Sparkling May and White Sun nectarine varieties; the revision of the 
introductory text of paragraph (a)(5) continues in effect to remove the 
Red May nectarine variety; and the revision of the introductory text of 
paragraph (a)(6) of Sec.  916.356 continues in effect to remove the 
Candy Sweet, Flame Glo, Grand Diamond, June Lion, King Jim, Ruby 
Bright, Scarlet Red, Summer Jewel, Sunny Red, Sweet White and White 
September nectarine varieties.
    Nectarine varieties removed from the nectarine variety-specific 
minimum size requirements become subject to the non-listed variety size 
requirements specified in paragraphs (a)(7), (a)(8), and (a)(9) of 
Sec.  916.356.
    Peaches: Section 917.459 of the order's rules and regulations 
specifies minimum size requirements for fresh peaches in paragraphs 
(a)(2) through (a)(6), and paragraphs (b) and (c). This rule continues 
in effect the revision of Sec.  917.459 to establish variety-specific 
minimum size requirements for thirteen peach varieties that were 
produced in commercially significant quantities of more than 10,000 
containers for the first time during the 2004 season. This rule also 
continues in effect the removal of the variety-specific minimum size 
requirements for ten varieties of peaches whose shipments fell below 
5,000 containers during the 2004 season.
    For example, one of the varieties recommended for addition to the 
variety-specific minimum size requirements is the Ivory Queen variety 
of peaches, which was recommended for regulation at a minimum size 80. 
Studies of the size ranges attained by the Ivory Queen variety revealed 
that 100 percent of the containers met the minimum size of 80 during 
the 2002 and 2003 seasons. The sizes ranged from size 30 to size 80, 
with 0.3 percent of the containers meeting the size 30, 36.1 percent 
meeting the size 40, 47.7 percent meeting the size 50, 13.1 percent 
meeting the size 60, 2.2 percent meeting the size 70 and 0.5 percent 
meeting the size 80 in the 2003 season.
    A review of other varieties with the same harvesting period 
indicated that the Ivory Queen variety was also comparable to those 
varieties in its size ranges for that time period. Discussions with 
handlers known to pack the variety confirm this information regarding 
minimum size and the harvesting period, as well. Thus, the 
recommendation to place the Ivory Queen variety in the variety-specific 
minimum size regulation at a minimum size 80 is appropriate. Although 
most other size recommendations for peaches result from size studies 
conducted over a three-year period, data on the Ivory Queen variety for 
earlier years is not available because the plantings of this variety 
did not bear fruit before 2002. Unusually large plantings of the Ivory 
Queen variety led to the rapid production of over 10,000 containers in 
just two years, and indicated inclusion in the variety-specific minimum 
size requirements.

[[Page 44246]]

    Historical data such as this provides the PCC with the information 
necessary to recommend the appropriate sizes at which to regulate 
various peach varieties. In addition, producers and handlers of the 
varieties affected are personally invited to comment when such size 
recommendations are deliberated. Producer and handler comments are also 
considered at both PCC and subcommittee meetings when the staff 
receives such comments, either in writing or verbally.
    For reasons similar to those discussed in the preceding paragraph, 
the revision of the introductory text of paragraph (a)(2) of Sec.  
917.459 continues in effect to include the April Snow and Sugar Snow 
peach varieties; the revision of the introductory text of Sec.  (a)(5) 
of Sec.  917.459 continues in effect to include the Ivory Queen peach 
variety; and the revision of the introductory text of paragraph (a)(6) 
of Sec.  917.459 continues in effect to include the Autumn Rich, Cherry 
Red, Crimson Queen, Early O'Henry, Henry III, Henry IV, Last Tango, 
Ruby Queen, Sierra Rich and 244LE379 peach varieties.
    This rule also continues in effect the revision of the introductory 
text of paragraph (a)(5) of Sec.  917.459 to remove the Redtop, Sugar 
May and 172LE White Peach (Crimson Snow/Sunny Snow) peach varieties; 
and continues in effect the revision of the introductory paragraph 
(a)(6) of Sec.  917.459 to remove the Autumn Fire, Fairtime, June 
Pride, Late September Snow, Queen Lady, Ruby Gold and Sugar Red peach 
varieties from the variety-specific minimum size requirements specified 
in the section because less than 5,000 containers of each of these 
varieties was produced during the 2004 season.
    Peach varieties removed from the peach variety-specific minimum 
size requirements become subject to the non-listed variety size 
requirements specified in paragraphs (b) and (c) of Sec.  917.459.
    The NAC and PCC recommended these changes in the minimum size 
requirements based on a continuing review of the sizing and maturity 
relationships for these nectarine and peach varieties, and the consumer 
acceptance levels for various fruit sizes. This rule continues in 
effect the establishment of minimum size requirements for fresh 
nectarines and peaches consistent with expected crop and market 
conditions.

Weight-Count Standards

    Under the provisions of Sec. Sec.  916.52 and 917.41 of the orders, 
the NAC and PCC, respectively, are also authorized to establish weight-
count standards for packed containers of fruit. These standards define 
a maximum number of peaches in a 16-pound sample when such fruit, which 
may be packed in tray-packed containers, is converted to volume-filled 
containers. In Sec. Sec.  916.350 and 917.442 of the orders' rules and 
regulations, weight-count standards are established for all varieties 
of nectarines and peaches (except the Peento type peaches), in Tables 1 
and 2 of paragraph (a)(5)(iv).
    Weight-count standards differ for fruit packed early in the season 
and that packed later. Earlier fruit tends to be less dense than later 
fruit. While the earlier fruit sizes are adequate to fill the tray 
cavities in tray-packed containers, more pieces of fruit are required 
to meet the 16-pound sample standard for volume-filled fruit. The NAC 
and PCC routinely conduct tests to determine the optimum weight-count 
standards for early, mid-season and late-season fruit. Occasionally, 
adjustments are made to the weight-count standards to ensure 
equivalence between the pack styles and permit handlers to more easily 
convert tray-packed fruit to volume-filled containers.
    Weight-count standards have also differed between nectarine and 
peaches historically because of the difference in shape between the two 
commodities. However, continued breeding of the two fruits has resulted 
in more uniformity of shape and size between the two. In response to 
consumer needs, handlers have sought a more generic sizing system to 
apply to both nectarines and peaches.
    Finally, the industry has recently adopted a new packing container 
with dimensions different from those previously used. Conforming 
changes to the trays used to pack the fruit into the new containers 
resulted in reductions in cavity sizes in some cases to accommodate the 
same fruit counts as in the old containers. This led to a wider 
discrepancy between the sizes of fruit packed in both pack styles 
throughout the season.
    In an effort to provide a more generic sizing of the two 
commodities, to smooth the transition from early-season to mid-season 
and late-season fruit sizes, and to standardize the conversion from 
tray-packing to volume-filling fruit, the committees' staff conducted 
weight-count surveys during the 2004 packing season. With the data 
collected, they were able to determine the most optimum weight-counts 
for containers of volume-filled nectarines and peaches of various fruit 
sizes throughout the season, given the new containers and trays. The 
committees' staff prepared new weight-count tables, which were reviewed 
by the Size Nomenclature Review Group at their meetings on September 3 
and September 21, 2004, and by the Tree Fruit Quality Subcommittee at 
their meetings on September 13, November 9, and November 30, 2004. At 
their meetings on December 7, 2004, both the NAC and PCC unanimously 
recommended revision of the weight-count standards tables in the 
orders' rules and regulations to reflect the staff's findings.
    Nectarines: This rule continues in effect the revision of Tables 1 
and 2 of paragraph (a)(5)(iv) of Sec.  916.350. Such revisions require 
continuation of the conforming modifications to the text of Sec.  
916.356, paragraphs (a)(4)(ii), (a)(6)(ii), (a)(8)(ii), and (a)(9)(ii) 
that increase the maximum number of nectarines in a 16-pound sample for 
the sizes regulated in those paragraphs.
    Peaches: Similarly, this rule continues in effect the revision of 
Tables 1 and 2 of paragraph (a)(5)(iv) of Sec.  917.442 to reflect the 
staff's study findings. Additionally, two new weight-count standards 
for peaches continue to be added to the tables. These two new standards 
are for large sizes previously without weight-count assignments, and 
were determined from the data collected.
    Such revisions require continuation of the conforming modifications 
to the text of Sec.  917.459, paragraph (a)(5)(iii) that increase the 
maximum number of peaches in a 16-pound sample for the size regulated 
in that paragraph.
    This rule reflects the committees' and USDA's appraisal of the need 
to revise the handling requirements for California nectarines and 
peaches, as specified. USDA believes that continuing this rule in 
effect will have a beneficial impact on producers, handlers, and 
consumers of fresh California nectarines and peaches.
    This rule continues in effect the establishment of handling 
requirements for fresh California nectarines and peaches consistent 
with expected crop and market conditions, and will help ensure that all 
shipments of these fruits made each season will meet acceptable 
handling requirements established under each of these orders. This rule 
will also help the California nectarine and peach industries to provide 
fruit desired by consumers. This rule continues in effect the 
establishment and maintenance of orderly marketing conditions for these 
fruits in the interests of producers, handlers, and consumers.

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA), the

[[Page 44247]]

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.

Industry Information

    There are approximately 207 California nectarine and peach handlers 
subject to regulation under the orders covering nectarines and peaches 
grown in California, and about 1,500 producers of these fruits in 
California. Small agricultural service firms, which include handlers, 
are defined by the Small Business Administration [13 CFR 121.201] as 
those whose annual receipts are less than $5,000,000. Small 
agricultural producers are defined by the Small Business Administration 
as those having annual receipts of less than $750,000. A majority of 
these handlers and producers may be classified as small entities.
    The committees' staff has estimated that there are fewer than 26 
handlers in the industry who could be defined as other than small 
entities. For the 2004 season, the committees' staff estimated that the 
average handler price received was $8.00 per container or container 
equivalent of nectarines or peaches. A handler would have to ship at 
least 625,000 containers to have annual receipts of $5,000,000. Given 
data on shipments maintained by the committees' staff and the average 
handler price received during the 2004 season, the committees' staff 
estimates that small handlers represent approximately 87 percent of all 
the handlers within the industry.
    The committees' staff has also estimated that fewer than 20 percent 
of the producers in the industry could be defined as other than small 
entities. For the 2004 season, the committees' staff estimated the 
average producer price received was $5.00 per container or container 
equivalent for nectarines and peaches. A producer would have to produce 
at least 150,000 containers of nectarines and peaches to have annual 
receipts of $750,000. Given data maintained by the committees' staff 
and the average producer price received during the 2004 season, the 
committees' staff estimates that small producers represent more than 80 
percent of the producers within the industry.
    With an average producer price of $5.00 per container or container 
equivalent, and a combined packout of nectarines and peaches of 
approximately 40,422,900 containers, the value of the 2004 packout is 
estimated to be $202,114,500. Dividing this total estimated grower 
revenue figure by the estimated number of producers (1,500) yields an 
estimate of average revenue per producer of about $134,743 from the 
sales of peaches and nectarines.

Regulatory Revisions

    Under Sec. Sec.  916.52 and 917.41 of the orders, grade, size, 
maturity, container and pack requirements are established for fresh 
shipments of California nectarines and peaches, respectively. Such 
requirements are in effect on a continuing basis. The NAC and PCC met 
on December 7, 2004, and unanimously recommended that these handling 
requirements be revised for the 2005 season. These recommendations had 
been presented to the committees by various subcommittees, each charged 
with review and discussion of the changes. The changes: (1) authorize 
shipments of ``CA Utility'' quality fruit to continue during the 2005 
season; (2) adjust weight-count standards for fruit in volume filled 
containers; and (3) revise varietal maturity, quality, and size 
requirements to reflect changes in production and marketing practices.

Grade and Quality Requirements--Discussions and Alternatives

    In 1996, Sec. Sec.  916.350 and 917.442 were revised to permit 
shipments of ``CA Utility'' quality nectarines and peaches as an 
experiment during the 1996 season only. Such shipments have 
subsequently been permitted each season. Since 1996, shipments of ``CA 
Utility'' have ranged from 1 to 5 percent of total nectarine and peach 
shipments. This rule continues in effect the authority to continue 
shipments of ``CA Utility'' quality nectarines and peaches during the 
2005 season.
    The Tree Fruit Quality Subcommittee met on November 30, 2004, and 
unanimously agreed that the ``CA Utility'' quality requirements that 
are currently in place should be continued. Also, not authorizing such 
shipments would be an abrupt departure from their current practices. 
The NAC and PCC also unanimously recommended such continuation at their 
meetings on December 7, 2004, and have done so continuously since such 
shipments were first authorized in 1996.

Minimum Maturity and Size Levels--Discussions and Alternatives

    Sections 916.356 and 917.459 establish minimum maturity levels. 
This rule continues in effect the annual adjustments to the maturity 
requirements for several varieties of nectarines and peaches. Maturity 
requirements are based on maturity measurements generally using 
maturity guides (e.g., color chips), as recommended by Shipping Point 
Inspection. Such maturity guides are reviewed annually by SPI to 
determine the appropriate guide for each nectarine and peach variety. 
These annual adjustments reflect refinements in measurements of the 
maturity characteristics of nectarines and peaches as experienced over 
previous seasons' inspections. Adjustments in the guides utilized 
ensure that fruit has met an acceptable level of maturity, ensuring 
consumer satisfaction while benefiting nectarine and peach producers 
and handlers.
    Currently, in Sec.  916.356 of the nectarine order's rules and 
regulations, and in Sec.  917.459 of the peach order's rules and 
regulations, minimum sizes for various varieties of nectarines and 
peaches, respectively, are established. This rule continues in effect 
the adjustments to the minimum sizes authorized for various varieties 
of nectarines and peaches for the 2005 season. Minimum size regulations 
are put in place to encourage producers to leave fruit on the trees for 
a longer period of time. This increased growing time not only improves 
maturity, but also increases fruit size. Increased fruit size increases 
the number of packed containers per acre, and coupled with heightened 
maturity levels, also provides greater consumer satisfaction, fostering 
repeat purchases. Such improved consumer satisfaction and repeat 
purchases benefit both producers and handlers alike.
    Annual adjustments to minimum sizes of nectarines and peaches, such 
as these, are recommended by the NAC and PCC based upon historical 
data, producer and handler information regarding sizes attained by 
different varieties, and trends in consumer purchases.
    An alternative to such action would include not establishing 
minimum size regulations for these new varieties. Such an action would 
ultimately increase the amount of less acceptable fruit being marketed 
to consumers, and would be contrary to the long-term interests of 
producers, handlers, and consumers. For these reasons, this alternative 
was not recommended.

[[Page 44248]]

Weight-Count Standards--Discussions and Alternatives

    Sections 916.350 and 917.442 also establish weight-count standards 
for fruit packed in volume-filled containers. These standards define a 
maximum number of peaches in a 16-pound sample when such fruit, which 
may be packed in tray-packed containers, is converted to volume-filled 
containers.
    Industry-wide adoption of a new container led to the 
reconfiguration of the trays commonly used in packing tray-packed 
containers. Some of the tray cavity sizes were modified to conform to 
the dimensions of the new container. These modifications resulted in 
slightly smaller fruit being packed into some sizes, which led to an 
unacceptable discrepancy between the sizes of fruit packed in volume-
filled containers and that in tray-packed containers.
    Additionally, the difference in density between early-season and 
mid-season to late-season fruit causes an abrupt change in sizes during 
the seasonal transition. Handlers have reported that marketing through 
that period is difficult because of the discrepancy between sizes of 
earlier fruit and later fruit, and have sought a modified sizing method 
that would smooth that transition.
    Finally, continuous breeding has led to an increasing similarity of 
fruit shapes between nectarines and peaches. The committees desire to 
develop a more uniform sizing system.
    The Size Nomenclature Review Group met several times during 2003 
and 2004 to discuss revision of the weight-count standards. Although 
the group considered the transition to a per pound sizing system 
similar to that used by the plum industry, they felt that the nectarine 
and peach industries would be better served by adjusting the weight-
count standards already in place. The Size Nomenclature Review Group 
also believed that they could recommend modifications to the standards 
that would smooth the marketing transition between varieties packed in 
the early season and those packed in the mid-season to late-season.
    The committee staff was directed to collect data during the 2004 
season from which revision recommendations could be made. Extensive 
sampling of both nectarines and peaches of various sizes provided the 
information needed for the committee to make recommendations regarding 
revisions to the weight-count standards. The Tree Fruit Quality 
Subcommittee voted unanimously to recommend the adjustments to the NAC 
and PCC at their meeting on November 9, 2004. The NAC and PCC 
unanimously recommended the changes to the regulations at their meeting 
on December 7, 2004.
    The committees discussed various alternatives to this action, 
including leaving the weight-count standards unchanged or adopting a 
per-pound fruit sizing system similar to that used in the plum 
industry. However, the committees believe that failure to make changes 
would not take into account differences between the various pack 
styles. Also, the data collected did not support adoption of a per-
pound fruit sizing system at this time. The committees believe that the 
recommended changes to the weight-count standards will provide for 
better uniformity of sizes between fruit packed in volume-filled 
containers and fruit packed in tray-packed containers, will smooth the 
transition from early-season to mid-season and late-season fruit for 
marketers, and will more closely align fruit sizes between nectarines 
and peaches.
    The committees make recommendations regarding the revisions in 
handling requirements after considering all available information, 
including recommendations by various subcommittees, comments of persons 
at subcommittee meetings, and comments received by committee staff. 
Such subcommittees include the Tree Fruit Quality Subcommittee, the 
Size Nomenclature Review Group, the Marketing Order Amendment Task 
Force, and the Executive Committee.
    At the meetings, the impact of and alternatives to these 
recommendations are deliberated. These subcommittees, like the 
committees themselves, frequently consist of individual producers and 
handlers with many years of experience in the industry who are familiar 
with industry practices and trends. Like all committee meetings, 
subcommittee meetings are open to the public and comments are widely 
solicited. In the case of the Tree Fruit Quality Subcommittee, many 
growers and handlers who are affected by the issues discussed by the 
subcommittee attend and actively participate in the public 
deliberations, or call and/or write in their concerns and comments to 
the staff for presentation at the meetings. In addition, minutes of all 
subcommittee meetings are distributed to committee members and others 
who have requested them, and are also available on the committees' 
website, thereby increasing the availability of information within the 
industry.
    An interim final rule concerning this action was published in the 
Federal Register on March 31, 2005. Copies of the rule were posted on 
the committees' Web site and were also made available through the 
Internet by USDA and the Office of the Federal Register. That rule 
provided a 60-day comment period, which ended on May 31, 2005. One 
comment was submitted on the rule.
    First, the commenter noted that the Spring Ray nectarine variety 
name should be changed to include the patented name, ``Burnectone.'' 
This rule removes the name ``Spring Ray'' from Table 1 of paragraph 
(a)(1)(iv) in Sec.  916.356 and from the introductory text of paragraph 
(a)(4) of Sec.  916.356, and replaces it with ``Burnectone (Spring 
Ray).''
    The commenter also noted that the 012-094 peach variety name should 
be changed to include the patented name, ``Supeacheight.'' This rule 
removes the name ``012-094'' in paragraph (a)(5) of Sec.  917.459, and 
replaces it with ``Supeacheight (012-094).''
    Each of the recommended handling requirement changes for the 2005 
season is expected to benefit producers and handlers through increased 
fruit sales, compared to the situation that would exist if the changes 
were not adopted. Both large and small entities are expected to benefit 
from the changes, and the costs of compliance are not expected to be 
substantially different between large and small entities.
    This rule does not impose any additional reporting and 
recordkeeping requirements on either small or large 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.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule. However, as previously stated, 
nectarines and peaches under the orders have to meet certain 
requirements set forth in the standards issued under the Agricultural 
Marketing Act of 1946 (7 CFR 1621 et seq.). Standards issued under the 
Agricultural Marketing Act of 1946 are otherwise voluntary.
    In addition, the committees' meetings are widely publicized 
throughout the nectarine and peach industry and all interested parties 
are encouraged to attend and participate in committee deliberations on 
all issues. These meetings are held annually in the fall, winter and 
spring. Like all committee meetings, the December 7, 2004, meetings 
were public meetings, and all entities, large and small, were 
encouraged to express views on these issues. These regulations were 
also reviewed and thoroughly discussed at subcommittee meetings held on 
August

[[Page 44249]]

26, September 13, November 9 and November 30, 2004. Finally, interested 
persons were 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 the 
following Web site: 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 matters presented, the 
information and recommendations submitted by the committees, the 
comment received, and other information, it is found that finalizing 
the interim final rule, with changes, as published in the Federal 
Register, (70 FR 16383, March 31, 2005) will tend to effectuate the 
declared policy of the Act.

List of Subjects

7 CFR Part 916

    Marketing agreements, Nectarines, Reporting and recordkeeping 
requirements.

7 CFR Part 917

    Marketing agreements, Peaches, Pears, Reporting and recordkeeping 
requirements.

0
Accordingly, the interim final rule amending 7 CFR parts 916 and 917, 
which was published at 70 FR 16383 on March 31, 2005, is adopted as a 
final rule with the following changes:
0
1. The authority citation for 7 CFR parts 916 and 917 continues to read 
as follows:

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

PART 916--NECTARINES GROWN IN CALIFORNIA


Sec.  916.356  [Amended]

0
2. Section 916.356 is amended by:
0
A. Removing the words ``Spring Ray'' from column A and the entry ``L'' 
from column B and adding in alphabetical order the words ``Burnectone 
(Spring Ray)'' in column A and an entry ``L'' in column B of Table 1 in 
paragraph(a)(1)(iv);
0
B. Removing the words ``Spring Ray'' and adding the words ``Burnectone 
(Spring Ray)'' in alphabetical order in the introductory text of 
paragraph (a)(4).

PART 917--FRESH PEARS AND PEACHES GROWN IN CALIFORNIA


Sec.  917.459  [Amended]

0
3. Section 917.459 is amended by removing the word ``012-094'' and 
adding the words ``Supeacheight (012-094)'' in alphabetical order in 
the introductory text of paragraph (a)(5).
* * * * *

    Dated: July 27, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-15168 Filed 8-1-05; 8:45 am]
BILLING COODE 3410-02-P