[Federal Register Volume 71, Number 65 (Wednesday, April 5, 2006)]
[Rules and Regulations]
[Pages 16976-16979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3237]



[[Page 16976]]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV05-905-2 FIR]


Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida; 
Modifying Procedures and Establishing Regulations To Limit Shipments of 
Small Sizes of Red Seedless Grapefruit

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 limiting the volume of sizes 
48 and 56 red seedless grapefruit entering the fresh market and 
changing the procedures used for this purpose under the marketing order 
for oranges, grapefruit, tangerines, and tangelos grown in Florida 
(order). The order is administered locally by the Citrus Administrative 
Committee (Committee). This rule continues in effect the action 
modifying the way a handler's average week is determined if crop 
conditions limit shipments from any of the three prior seasons. 
However, this final rule amends the interim final rule by removing the 
weekly percentages established for the first 22 weeks of the 2005-2006 
season which began September 19, 2005, while maintaining the reporting 
requirement for small-sized red seedless grapefruit. The Committee 
voted to remove the weekly percentages following the crop losses from 
Hurricane Wilma. This action should provide more red seedless 
grapefruit for shipment to the fresh fruit market.

DATES: Effective Date: May 5, 2006.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Southeast Marketing 
Field Office, Marketing Order Administration Branch, Fruit and 
Vegetable Programs, AMS, USDA; 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 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.''
    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 finalizes, with changes, an interim final rule published 
in the Federal Register on September 14, 2005 (70 FR 54235). That rule 
modified the procedures used to limit 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 under the order. It 
provided that if crop conditions limit shipments from any of the three 
prior seasons, a prior season or seasons can be substituted in the 
three-season average. It also instituted weekly percentages for the 
first 22 weeks of the 2005-2006 season beginning September 19, 2005. 
The Committee unanimously recommended these actions at a meeting held 
on May 10, 2005.
    This final rule continues in effect the action modifying the way a 
handler's average week is determined if crop conditions limit shipments 
from any of the three prior seasons. However, this final rule amends 
the interim final rule by removing the weekly percentages established 
for the first 22 weeks of the 2005-2006 season which began September 
19, 2005. At a meeting held November 3, 2005, the Committee voted 11 in 
favor and 7 opposed to remove the weekly percentages following the crop 
losses sustained from Hurricane Wilma. Those opposed believed that the 
percentages should continue in spite of the crop losses. This action 
provides more red seedless grapefruit for shipment to the fresh fruit 
market. While the Committee recommended the removal of the weekly 
percentages, the Committee also voted unanimously to maintain the 
reporting requirement for small sizes so that it could obtain a clearer 
picture of market behavior following two consecutive years of crop 
damage and losses caused by adverse weather.
    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 specifies procedures for 
limiting the volume of small red seedless grapefruit entering the fresh 
market. These procedures specify that the Committee may recommend that 
only a certain percentage of sizes 48 and 56 red seedless grapefruit 
can be made available for fresh shipment 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 
recommended percentage is applied to each handler's average week to 
determine the quantity of sizes 48 and 56 red seedless grapefruit the 
handler may ship. The average week constitutes the prior period 
specified in Sec.  905.52. Therefore, an average week is calculated for 
each handler.
    Prior to the issuance of the interim final rule, an average week 
had to be calculated using the immediately preceding three seasons. The 
interim final rule added provisions to Sec.  905.153 providing that if 
crop conditions limit shipments from any of the three prior

[[Page 16977]]

seasons, a prior season or seasons can be used for computing the three-
season average.
    An average week is calculated by adding the total red seedless 
grapefruit shipments by a handler during the 33-week period beginning 
the third Monday in September for the immediately preceding three 
seasons. This total was divided by three to establish an average 
season, and then divided by the 33 weeks in a season to derive the 
average week. When the Committee utilizes the provisions of Sec.  
905.153 and establishes percentages for the regulatory period, a 
handler's average week is multiplied by the applicable percentage to 
establish that handler's allotment for shipping small red seedless 
grapefruit during that particular week.
    In 2004, the major grapefruit growing regions in Florida suffered 
significant damage and fruit loss from multiple hurricanes. The 
official USDA crop estimate for the 2004-05 season reflected a 69 
percent decrease from the previous season's estimate. Fresh shipments 
of red grapefruit for the 2004-05 season were reduced by more than 63 
percent in comparison to the 2003-04 season. Consequently, the 
percentage of size regulation was not utilized for the 2004-05 season.
    The Committee met May 10, 2005, to consider implementing a 
percentage of size regulation for red seedless grapefruit for the 2005-
06 season. During its discussions, concerns were raised regarding the 
impact of the 2004-05 season when calculating a handler's average week. 
Most handlers' shipments reflected a significant decline in volume for 
the 2004-05 season, with some handlers shipping no volume at all due to 
the damage sustained by their packinghouses from the storms. The 
Committee believes using production figures from a season in which 
adverse crop conditions caused a reduction in the amount of fruit 
produced would distort the accuracy of a handler's average shipments. 
Committee members agreed including the 2004-05 season in the 
calculation of a handler's average week would result in averages that 
were not reflective of a handler's average shipments.
    When a handler is fairly consistent in the amount of fruit shipped 
each season, one season of decreased volume has the potential to 
drastically reduce their shipment average. With the handler's average 
week based on a three-season average, including a season such as last 
season could significantly lower the handler's average week on which 
the percentage of size regulation is based. This is turn would decrease 
a handler's allotment of small grapefruit sizes.
    Including the 2004-05 season in base calculations would have 
reduced the total base available to the industry by more than 20 
percent. However, the impact on individual handlers could have been as 
great as reducing their base by a third. Therefore, the Committee voted 
unanimously to change Sec.  905.153 to exclude the 2004-05 season when 
calculating a handler's average week for the 2005-06 regulation season.
    To accommodate this recommendation and provide a method to handle 
similar situations should they occur during future seasons, this rule 
amends Sec.  905.153 to provide that should shipments from any or all 
of the immediately preceding three seasons be limited because of crop 
conditions, the Committee could use a prior season or seasons when 
determining the three-season average for the purpose of calculating a 
handler's average week. Under this change, the Committee will meet 
prior to the issuance of a percentage size regulation and determine 
which seasons are to be used to calculate a handler's average week. 
This change gives the Committee some additional flexibility to account 
for adverse crop conditions and assists in providing an average 
reflective of a handler's normal shipments.
    The interim final rule also established 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 
instituting weekly percentages for the first 22 weeks of the 2005-06 
season. The rule established weekly percentages at 35 percent for the 
first six weeks (September 19, 2005 through October 30, 2005), and 25 
percent for weeks seven through 22 (October 31, 2005 through February 
19, 2006). The Committee unanimously recommended this action at its May 
10, 2005, meeting. This action is similar to those taken in previous 
seasons.
    In making its recommendation, the Committee had taken into account 
an anticipated reduction in shipments due to the lingering effects from 
the hurricanes the industry experienced during the 2004-05 season. 
However, in October 2005, the industry experienced additional crop loss 
due to the effects of Hurricane Wilma. Shipments of red seedless 
grapefruit for 2005-06 are now estimated to be 10.5 million cartons, 
down from the 17 million originally estimated for the season. Further, 
the new estimate is close to 12 million cartons under shipments for the 
2003-04 season, the most recent season not impacted by hurricanes.
    At its November 3, 2005, meeting, the Committee discussed the 
percentage of size rule which went into effect on September 19, 2005. 
The percentage of size regulation helps reduce the detrimental market 
effects of small-sized red seedless grapefruit over-supplies. With the 
substantial reduction of the red seedless grapefruit crop due to the 
impact of the hurricanes, the Committee believes that a percentage size 
regulation for 2005-06 is not needed. In fact, the Committee believes 
there may be an insufficient amount of fruit to supply demand. Because 
of the impact of the storms, there are less large-sized red seedless 
grapefruit available for the 2005-06 season, so more of the smaller 
sizes will be needed to supply consumer demand. Consequently, the 
reasons for regulating the amount of small red seedless grapefruit 
entering the fresh market during the 2005-06 season are no longer 
applicable.
    As a result, the Committee recommended removing the weekly 
percentages set for the 22 weeks beginning September 19, 2005 and 
ending February 19, 2006. Section 905.350 has been modified 
accordingly.
    However, during the discussion of the weekly percentages, interest 
was expressed in support of maintaining the reporting requirement 
portion of the regulation during the 2005-06 season. Committee members 
agreed that continuing to collect shipping data on small sizes will 
provide useful information. This information can be used by handlers in 
making marketing decisions. Even though there is a reduced volume of 
red seedless grapefruit to supply the market, flooding the market with 
smaller sizes could still reduce the over all pricing of red 
grapefruit. Knowing the volume of small sizes shipped may assist 
handlers in making decisions that prevent an oversupply of small sizes 
of red grapefruit. Such decisions may help stabilize the pricing for 
all red grapefruit during the current season.
    Having access to this shipping information will also assist the 
Committee in maintaining yearly statistical information on small sizes. 
The Committee believes this information will be useful when considering 
establishing future percentage of size regulation. Knowing the volume 
of small sizes shipped during the 2005-06 season and its market impact 
may also help the Committee when considering implementing percentage 
size regulation during other crop reduced years. Therefore, the 
Committee recommended maintaining the reporting requirement for small 
sizes for the 2005-06 season

[[Page 16978]]

even though percentage size regulation has been discontinued. No 
changes to any provisions are needed to continue these reports for the 
remainder of the 2005-06 shipping season.
    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 grapefruit that may be 
handled. Therefore, no change is necessary in the grapefruit import 
regulations as a result of this action.

Final 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 final regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly or disproportionately burdened. Marketing orders issued 
pursuant to the Act, and the rules issued thereunder, are unique in 
that they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility.
    There are approximately 75 handlers of Florida grapefruit who are 
subject to regulation under the marketing 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 
$6,000,000, 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 2003-04 
season was approximately $7.58 per \4/5\-bushel carton, and total fresh 
shipments for the 2003-04 season are estimated at 24.7 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 80 percent of the grapefruit handlers could be 
considered small businesses under the SBA 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.
    This rule finalizes, with changes, an interim final rule published 
in the Federal Register on September 14, 2005 (70 FR 54235). This rule 
continues in effect the action changing the procedures used to limit 
the volume of sizes 48 and 56 red seedless grapefruit entering the 
fresh market by modifying the way a handler's average week is 
determined. The change provides that if crop conditions limit shipments 
from any of the immediately preceding three seasons, a prior season or 
seasons can be used for the three-season average. In addition, this 
final rule amends the interim final rule by removing the weekly 
percentages established under the provisions of Sec.  905.153 for the 
first 22 weeks of the 2005-2006 season which began September 19, 2005, 
but maintains the reporting requirement for small sized red seedless 
grapefruit. This rule revises the provisions of Sec. Sec.  905.153 and 
905.350. Authority for these actions is provided in Sec.  905.52. In a 
vote of 11 in favor and 7 opposed, and in a unanimous vote, the 
Committee voted to remove the weekly percentages and to maintain the 
reporting requirement, respectively, at a meeting on November 3, 2005. 
Those opposed to discontinuing the percentage size regulation believed 
that the regulation should be continued even though the crop was 
significantly reduced by adverse weather. Those in favor believed that 
the crop was going to be so small that every acceptable piece of fruit 
was needed to meet market needs.
    The first action in this rule revises the procedures in Sec.  
905.153 used in implementing percentage size regulations for small red 
seedless grapefruit under the order. These procedures will be applied 
uniformly for all handlers regardless of size. This action is not 
expected to decrease the overall consumption of red seedless grapefruit 
or result in any additional costs for the industry.
    Prior to this change, a handler's average week, which is used as a 
base during percentage of size regulation, was calculated using the 
immediately preceding three seasons. This change provides that should 
shipments from any or all of the three prior seasons be limited because 
of adverse crop conditions, the Committee could use a prior season or 
seasons when determining the three-season average for the purpose of 
calculating a handler's average week. This change provides the 
Committee with some additional flexibility to account for adverse crop 
conditions and assists in providing an average reflective of a 
handler's normal shipments.
    Using shipment figures from a season where adverse crop conditions 
reduced the amount of fruit shipped would distort the accuracy of a 
handler's average shipments. In 2004, the major grapefruit growing 
regions in Florida suffered significant damage and fruit loss from 
multiple hurricanes, reducing the official USDA crop estimate by 69 
percent from the previous season. Most handlers' shipments reflected a 
significant decline in volume, with some handlers shipping no volume at 
all due to the damage sustained by their packinghouses from the adverse 
weather.
    With the handler's average week based on a three-season average, 
including a season such as last season could significantly lower the 
handler's average week, decreasing a handler's allotment of small size. 
Including the 2004-05 season in base calculations for the 2005-06 
season would reduce the total industry base available by more than 20 
percent, with the possible reduction for individual handlers being as 
much as a third.
    Consequently, this change allows the Committee to provide 
additional allotment in seasons following years where the crop was 
reduced by adverse weather conditions. It allows the Committee to 
exclude those seasons, thus, providing an average week that more 
closely reflects a handler's shipments and makes additional allotment 
available.
    In October 2005, the grapefruit industry suffered severe crop 
damage from the impact of Hurricane Wilma. The Committee had taken into 
account an anticipated reduction in shipments due to the lingering 
effects from the hurricanes the industry experienced during the 2004-05 
season. However, following Hurricane Wilma, shipments of red seedless 
grapefruit for 2005-06 are now estimated to be 10.5 million cartons, 
down from the 17 million originally estimated for the season. Further, 
the new estimate is close to 12 million cartons under shipments for the 
2003-04 season, the most recent season not impacted by hurricanes. With 
the substantial reduction in the red seedless grapefruit crop due to 
the impact of the hurricanes, the Committee believes a percentage size 
regulation for 2005-06 is not needed. Consequently, the Committee voted 
to remove the weekly percentages. This action will not create any 
additional costs for growers or handlers.
    While voting to remove the weekly percentages, Committee members 
agreed that continuing to collect shipping data

[[Page 16979]]

on small sizes will provide useful information. The information can be 
used by handlers in making marketing decisions, and may help stabilize 
the pricing for all red seedless grapefruit. Also, having access to 
this shipping information will assist the Committee in maintaining 
yearly statistical information on small sizes. The Committee believes 
this information will be useful when considering establishing future 
percentage of size regulation. Knowing the volume of small sizes 
shipped during the 2005-06 season and its market impact may also help 
the Committee when considering the implementation of percentage size 
regulation during other crop reduced years. Consequently, the Committee 
recommended maintaining the reporting requirement for small sizes for 
the remainder of the 2005-06 season. As individual handlers are already 
accustomed to reporting this information, continuing to report it will 
not create any additional costs on handlers.
    The Committee considered several alternatives when discussing these 
actions. At the May 10, 2005, meeting, one alternative discussed was 
maintaining the way a handler's average week was calculated using the 
immediately preceding three seasons. The Committee believes including 
numbers from the 2004-05 season would result in averages unreflective 
of a handler's shipments. Therefore, this alternative was rejected. The 
Committee also considered not recommending percentage of size 
regulation for the 2005-06 season. However, the Committee agreed 
percentage of size regulation should be established at the levels 
recommended and then be revisited throughout the season as more 
information became available. Therefore, this alternative was also 
rejected. At the November 3, 2005, meeting, the Committee considered 
maintaining the percentages at their current level, or relaxing the 
percentages to allow for the shipment of more small sizes. However, 
considering the size of the remaining crop following the damage 
sustained from Hurricane Wilma, the Committee rejected this 
alternative.
    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.
    AMS is committed to compliance with the Government Paperwork 
Elimination Act (GPEA), which requires Government agencies in general 
to provide the public the option of submitting information or 
transacting business electronically to the maximum extent possible.
    In addition, as noted in the initial regulatory flexibility 
analysis, 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).
    Further, the Committee's meetings were widely publicized throughout 
the citrus industry and all interested persons were invited to attend 
the meeting and participate in Committee deliberations. Like all 
Committee meetings, the May 10, 2005, and November 3, 2005, meetings 
were public meetings and all entities, both large and small, were able 
to express their views on this issue.
    An interim final rule concerning this action was published in the 
Federal Register on September 14, 2005. Copies of the rule were mailed 
by the Committee's staff to all Committee members and Florida citrus 
handlers. In addition, the rule was made available through the Internet 
by USDA and the Office of the Federal Register. That rule provided for 
a 30-day comment period which ended October 14, 2005. One comment was 
received.
    The commenter raised concerns about fair trade for consumers and 
restraints of trade in general. However, the Agricultural Marketing 
Agreement Act of 1937 and the order provisions themselves provide 
authority to limit shipments of any grade or size, or both, of any 
variety of Florida citrus. The comment has been noted. The Committee 
has recommended removing the weekly percentages established for the 
first 22 weeks of the 2005-06 season, and this action implements that 
recommendation. Therefore, no changes will be made as a result of this 
comment.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance 
guide should be sent to Jay Guerber at the previously mentioned address 
in the FOR FURTHER INFORMATION CONTACT section.
    After consideration of all relevant material presented, including 
the Committee's recommendation, and other information, it is found that 
finalizing the interim final rule, with a change, as published in the 
Federal Register (70 FR 54235, September 14, 2005) will tend to 
effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 905

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


0
Accordingly, the interim final rule amending 7 CFR part 905 which was 
published at 70 FR 54235 on September 14, 2005, is adopted as a final 
rule with the following change:

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  [Removed and reserved]

0
2. Section 905.350 is removed and reserved.

    Dated: March 30, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-3237 Filed 4-4-06; 8:45 am]
BILLING CODE 3410-02-P