[Federal Register Volume 75, Number 107 (Friday, June 4, 2010)]
[Rules and Regulations]
[Pages 31663-31665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13408]



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  Federal Register / Vol. 75, No. 107 / Friday, June 4, 2010 / Rules 
and Regulations  

[[Page 31663]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 923

[Doc. No. AMS-FV-09-0033; FV09-923-1 FR]


Sweet Cherries Grown in Designated Counties in Washington; Change 
in the Handling Regulation

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule revises the handling regulation for cherries under 
the Washington cherry marketing order. The marketing order regulates 
the handling of sweet cherries grown in designated counties in 
Washington and is administered locally by the Washington Cherry 
Marketing Committee (Committee). This rule adds quality and pack 
requirements for Rainier cherries and other lightly-colored sweet 
cherry varieties that are designated as ``premium'' when handled. This 
change is expected to reduce market confusion regarding the marketing 
of such cherries; improve producer returns by providing pack 
differentiation; and benefit producers, handlers, and consumers.

DATES: Effective Date: June 5, 2010.

FOR FURTHER INFORMATION CONTACT: Robert Curry or Gary Olson, Northwest 
Marketing Field Office, Marketing Order Administration Branch, Fruit 
and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue, Suite 385, 
Portland, Oregon 97204; Telephone: (503) 326-2724, Fax: (503) 326-7440, 
or E-mail: [email protected] or [email protected].
    Small businesses may request information on complying with this 
regulation by contacting Antoinette Carter, 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 and Order No. 923, both as amended (7 CFR part 923), 
regulating the handling of cherries grown in designated counties in 
Washington, hereinafter referred to as the ``order.'' The order is 
effective under the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is not intended to have retroactive effect.
    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 final rule changes the handling regulation for cherries under 
the order. Specifically, this rule adds minimum requirements for 
Rainier cherries and other lightly-colored sweet cherry varieties that 
are designated as ``premium'' when marketed. Under this regulation, 
when labeled ``premium, a Rainier cherry or other lightly-colored sweet 
cherry variety container must be packed so that at least 90 percent, by 
count, of the cherries in any lot shall measure not less than \64/64\ 
inch (10\1/2\ row) in diameter and not more than 5 percent, by count, 
may be less than \61/64\ inch (11-row) in diameter. In addition, 90 
percent, by count, of the cherries in any lot must exhibit a pink-to-
red surface blush. For any given sample, not more than 20 percent of 
the cherries shall be absent a pink-to-red surface blush.
    This change is intended to reduce market confusion and improve 
producer returns by providing pack differentiation, and is expected to 
benefit producers, handlers, and consumers.
    Section 923.52 of the order authorizes the establishment of grade, 
size, quality, maturity, pack, and container regulations for any 
variety or varieties of cherries grown in the production area. Section 
923.53 further authorizes the modification, suspension, or termination 
of regulations issued under Sec.  923.52. Section 923.55 provides that 
whenever cherries are regulated pursuant to Sec.  923.52 or Sec.  
923.53, such cherries must be inspected by the Federal-State Inspection 
Service and certified as meeting the applicable requirements of such 
regulations.
    Section 923.322 of the order's rules and regulations currently 
provide grade, size, maturity, and pack regulations for Washington 
grown sweet cherries. Rainier cherries and other lightly-colored sweet 
cherry varieties have variety-specific minimum size and maturity 
requirements as well as the same pack requirements as all Washington 
sweet cherries, but do not share the minimum grade requirements with 
dark colored cherries.
    As just stated, Rainier cherries and other lightly-colored sweet 
cherry varieties have certain current mandatory grading requirements, 
including a minimum maturity requirement of 17 percent soluble solids 
and a minimum size requirement of \61/64\ inch diameter (11-row) as 
provided in section 923.322(c). However, lightly-colored varieties are 
not currently required to meet a minimum grade or pack standard. As a 
consequence, the cherry industry markets several different qualities or 
packs of lightly colored sweet cherries without the benefit of any 
clear differentiation between competing products. This lack of 
differentiation in the marketing of lightly-colored sweet cherries has 
led to market confusion and downward pricing pressure in recent years.
    The worldwide retail trade is currently demanding a consistently

[[Page 31664]]

large lightly-colored sweet cherry that arrives with a pink to red 
blush on its external surface. Likewise, the retail trade is willing to 
pay a premium price for large lightly-colored sweet cherries that 
consistently exhibit this surface blush. Conversely, the market for 
lightly-colored sweet cherries without a blush--cherries pure yellow in 
color--is decreasing and this sub-group of cherries is generally sold 
at a lower market price. Prior to this change in the handling 
regulations, there was no clear articulation of a ``premium'' 
designation within the lightly-colored cherry category, and buyers have 
used the price of the packs containing all-yellow cherries to put 
downward pricing pressure on cherries that have been produced with the 
preferred pink-to-red blush.
    With this change, industry handlers will be able to differentiate 
packs of lightly colored cherries and the price point that comes with 
producing a superior sweet cherry. It is also expected that the change 
will add further incentive to produce superior quality sweet cherries 
and strengthen the producer's position in the marketplace.
    This rule requires any regulated handler packing cherries with the 
``premium'' designation to adhere to the new requirements as provided 
in new section 923.322(e). All cherries not so designated continue to 
be allowed to be marketed without regard to the new requirements. 
Nevertheless, all sweet cherries must continue to meet the other 
minimum requirements of the order and the order's regulations.
    Further changes are made to Sec.  923.322 to reflect the addition 
of the new requirements. The existing paragraph (e) is redesignated as 
paragraph (d), and the introductory sentence of paragraph (g) is 
revised to reference the new paragraph (e).

Final Regulatory Flexibility Analysis

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), 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.
    There are approximately 44 handlers of Washington sweet cherries 
subject to regulation under the marketing order and approximately 1,500 
cherry producers in the regulated area. Small agricultural service 
firms are defined by the Small Business Administration (SBA) (13 CFR 
121.201) as those having annual receipts of less than $7,000,000, and 
small agricultural producers are defined as those having annual 
receipts of less than $750,000.
    Based on the 2005-2007 three-year average fresh cherry utilization 
of 121,666 tons and average fresh cherry producer price of $2,400 per 
ton as reported by the National Agricultural Statistics Service, USDA, 
and 1,500 Washington cherry producers, the recent three-year average 
annual producer revenue was approximately $194,666. In addition, the 
Committee reports that none of the 44 handlers have annual receipts of 
over $7,000,000. Based on this information, the majority of Washington 
sweet cherry producers and handlers may be classified as small 
entities.
    Utilizing authority contained in sections 923.52, 923.53, and 
923.55, the Committee recommended that a definition for premium packed 
lightly-colored sweet cherries be added to section 923.322(h) in the 
order's handling regulation to identify the minimum size and color 
requirements that a premium packed cherry must meet. In addition, to 
help stabilize the negative pricing pressure that some unmarked grades 
have on the market, the Committee recommended adding a new paragraph 
923.322(e)(3) to this subpart establishing a requirement that all 
cherries packed in containers marked ``premium'' must adhere to the 
definition.
    USDA subsequently determined that, rather than adding a new 
definition, it would be more appropriate to add minimum requirements 
for cherries that are designated as ``premium'' to section 923.322 of 
the handling regulation.
    The Committee reports that cherry size and quality are important to 
buyers. Consistency and dependability are equally important. In recent 
seasons, there has not been marketing consistency in the quality and 
size of lightly-colored cherries. This has resulted in a price 
depressing pressure on all cherries, regardless of the quality, color, 
and size of the fruit packed.
    Cherry size is related to maturity and other quality factors. That 
is, larger sized cherries tend to be sweeter and of higher overall 
quality, and thus generally provide higher prices for the producer. 
Although AMS Market News Service data is not reported for Rainier 
cherries smaller than 10\1/2\ row (1-inch diameter), this correlation 
is supported by prices received for Bing cherries of various sizes. For 
example, the Market News Service reported f.o.b. prices for 12-row 
sized Bing cherries (\54/64\ inch diameter) of $24.00 per carton in 
late June 2007. Concurrently, 10\1/2\ row size Bing cherries were 
selling for $35.00 to $36.00 per carton (10\1/2\ row Rainier cherries 
were being quoted by Market News at $35.00 to $40.00 per carton in late 
June 2007). This price relationship generally holds steady throughout 
each season. Furthermore, market research by the Washington cherry 
industry shows that larger sizes correlate with higher maturity levels, 
and that larger sizes are preferred by consumers.
    Although research showing a correlation between the flavor of 
lightly-colored sweet cherry varieties and the degree of reddish blush 
is lacking, actual market experience has shown the industry that a 
definite price correlation exists according to remarks made at the May 
14, 2009 Committee meeting. This is largely due to consumer preference 
for lightly colored cherries that exhibit a reddish blush.
    The Committee believes that this change will not negatively impact 
either small or large handlers or producers. Comments made at the May 
14, 2009 meeting indicate that a majority of the Washington sweet 
cherry industry is already packing to such standards or better. 
Comments also indicate that it is possible to control the amount of 
blush on lightly-colored sweet cherries, since the added color is 
related to the amount of direct sunlight available to the fruit. 
Pruning and other common cultural practices can greatly affect the 
amount of blush on the cherries by controlling how much direct sunlight 
makes it though the foliage to the fruit. Finally, since this change is 
only required should a handler choose to pack and mark lightly-colored 
cherries to the ``premium'' standard, any additional costs can be 
eliminated by the handler.
    Among the alternative actions discussed by the Committee at the May 
14, 2009 meeting was a potential requirement that there be a minimum 
percentage of reddish color on all lightly colored sweet cherries, as 
well as a mandatory increase in the minimum size (currently 11-row size 
or \61/64\ minimum diameter). There were other various options briefly 
discussed under this alternative related to sizing and the actual 
degree of blush. Comments from many of those attending the meeting, 
however, indicated that a mandatory change in size and pack 
requirements

[[Page 31665]]

would not be well received by the industry at this time, and that the 
less restrictive recommendation subsequently made should adequately 
solve the current marketing problem.
    This rule does not impose any additional reporting or recordkeeping 
requirements on either small or large sweet cherry 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. In addition, USDA 
has not identified any relevant Federal rules that duplicate, overlap 
or conflict with this rule.
    AMS is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies to provide 
increased opportunities for citizen access to government information 
and services, and for other purposes.
    In addition, the Committee meeting was widely publicized throughout 
the Washington cherry industry and all interested persons were invited 
to attend the meeting and participate in the deliberations. Like all 
Committee meetings, the May 14, 2009 meeting was a public meeting and 
all entities, both large and small, were able to express their views on 
this issue.
    A proposed rule concerning this action was published in the Federal 
Register on March, 8, 2010 (75 FR 10442). Copies of the rule were made 
available to all Committee members and sweet cherry handlers. The 
proposed rule was also made available through the Internet by USDA and 
the Office of the Federal Register. A 60-day comment period ending May 
7, 2010, was provided to allow interested persons to respond to the 
proposal. No comments were 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/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to 
Antoinette Carter 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 Committee 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 the 2010 cherry harvest may 
start as early as the last week in May and handlers will want to take 
advantage of the potential economic benefits of this rule. Further, 
handlers are aware of this rule, which was recommended at a public 
meeting. Finally, a 60-day comment period was provided for in the 
proposed rule.

List of Subjects in 7 CFR Part 923

    Cherries, Marketing agreements, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, 7 CFR part 923 is amended as 
follows:

PART 923--SWEET CHERRIES GROWN IN DESIGNATED COUNTIES IN WASHINGTON

0
1. The authority citation for 7 CFR part 923 continues to read as 
follows:

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


0
2. In Sec.  923.322, redesignate paragraph (e) as paragraph (d), add a 
new paragraph (e), and revise the introductory sentence of paragraph 
(g) to read as follows:


Sec.  923.322  Washington cherry handling regulation.

* * * * *
    (e) Light sweet cherries marked as premium. No handler shall 
handle, except as otherwise provided in this section, any package or 
container of Rainier cherries or other varieties of lightly colored 
sweet cherries marked as premium except in accordance with the 
following:
    (1) Quality. 90 percent, by count, of such cherries in any lot must 
exhibit a pink-to-red surface blush and, for any given sample, not more 
than 20 percent of the cherries shall be absent a pink-to-red surface 
blush.
    (2) Pack. At least 90 percent, by count, of the cherries in any lot 
shall measure not less than \64/64\ inch (10\1/2\ row) in diameter and 
not more than 5 percent, by count, may be less than \61/64\ inch (11-
row) in diameter.
* * * * *
    (g) Exceptions. Any individual shipment of cherries which meets 
each of the following requirements may be handled without regard to the 
provisions of paragraphs (a), (b), (c), (d), and (e) of this section, 
and of Sec. Sec.  923.41 and 923.55.
* * * * *

    Dated: May 28, 2010.
Rayne Pegg,
Administrator, Agricultural Marketing Service.
[FR Doc. 2010-13408 Filed 6-3-10; 8:45 am]
BILLING CODE 3410-02-P