[Federal Register Volume 78, Number 46 (Friday, March 8, 2013)]
[Rules and Regulations]
[Pages 14907-14909]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05436]



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  Federal Register / Vol. 78, No. 46 / Friday, March 8, 2013 / Rules 
and Regulations  

[[Page 14907]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 51

[Doc. Number AMS-FV-11-0046]


United States Standards for Grades of Almonds in the Shell

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule revises the United States Standards for Grades of 
Almonds in the Shell. These standards are issued under the Agricultural 
Marketing Act of 1946. The Agricultural Marketing Service (AMS) is 
revising the standards by changing the determination of internal 
defects from count to weight. These revisions will align the inspection 
procedures for incoming inspections (based on the marketing order) and 
outgoing inspections (based on the standards). These changes will 
promote greater uniformity and will provide consistency with current 
marketing practices.

DATES: Effective April 8, 2013.

FOR FURTHER INFORMATION CONTACT: Lindsay Mitchell, Standardization 
Branch, Specialty Crops Inspection (SCI) Division, (540) 361-1127 or 
1150. The United States Standards for Almonds in the Shell are 
available through the SCI Division Web site at: http://www.ams.usda.gov/freshinspection.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 Regulatory Flexibility Act

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the 
economic impact of the action on small entities. The purpose of the RFA 
is to fit regulatory actions to the scale of businesses subject to such 
actions so that small businesses will not be unduly or 
disproportionately burdened. Accordingly, AMS has prepared this final 
regulatory flexibility analysis.
    The final rule will revise the United States Standards for Grades 
of Almonds in the Shell (standards) that were issued under the 
Agricultural Marketing Act of 1946 (7 U.S.C. 1621-1627). Standards 
issued under the 1946 Act are voluntary.
    Small agricultural service firms, which include handlers, have been 
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 have been defined as those having annual 
receipts of less than $750,000. There are approximately 53 handlers of 
almonds that would potentially be affected by the changes set forth in 
this rule and approximately 6,500 producers of almonds. Information 
provided by the Almond Board of California (ABC) indicates that 
approximately 36 percent of the handlers would be considered small 
agricultural service firms. According to data reported by the National 
Agricultural Statistics Service (NASS), the two-year average crop value 
for 2008-09 and 2009-10 was $2.566 billion. Dividing that average by 
6,500 producers yields average estimated producer revenues of $394,769, 
which suggests that the majority of almond producers would be 
considered small entities according to the SBA's definition.
    The California almond bearing acreage increased approximately 9 
percent between 2008 and 2010, from 680,000 to 740,000 acres. 
Approximately 1.643 billion pounds (shelled basis) of almonds were 
produced during the 2009-10 season. More than two thirds of 
California's almond crop is exported to approximately 90 countries 
worldwide, and comprises nearly 80 percent of the world's almond 
supply.
    The changes herein will have the effect of improving grading 
methods and accuracy without adding any additional financial burden to 
buyers or sellers of almonds in the shell. This rule changes one step 
in a multi-step grading procedure (7 CFR 51.2080) and changes the 
method of determining one of five tolerances used in determining grade 
(7 CFR 51.2075(b)(5)). The outgoing inspection procedure will become 
more closely aligned with incoming inspection by shifting the basis 
(from count to weight) in the standards for determining the percentage 
of internal defects in an inspection sample of almonds in the shell.
    In addition to simplifying the grading process, the weight basis 
would yield a more accurate percentage of internal defects. With a 
count method, a defect such as shriveling would result in a particular 
kernel being counted as one of the 300 kernels in the sample with 
internal defects, even if the defect left only a small portion of the 
original kernel in the sample. Due to its lower weight relative to a 
fully formed kernel, a shriveled kernel has a smaller impact on the 
percentage of internal defects when the sample is weighed rather than 
counted.
    The lower average percentage of internal defects using the weight 
method was confirmed by a review of shipping point inspection records, 
with 14 examples in which both the count and weight method were used on 
the same sample of inshell almonds. The average serious damage 
percentages of the count method and the weight method were 1.5 percent 
and 0.8 percent, respectively. Smaller percentages of defects in 
sampled lots using the weight method will mean larger quantities of 
almonds meet a particular grade, which would positively affect the 
quality of the almonds, as it would yield more accurate percentages of 
defects, resulting in higher payments to growers.
    Shifting the determination of internal (kernel) defects from a 
count basis to a weight basis in the standards is expected to 
contribute to efficiencies in the grading process. It would make the 
internal defects aspect of the outgoing inspection process consistent 
with that of the incoming inspection. Weighing rather than counting the 
kernels may result in slightly more time in the inspection process, but 
any potential effect on the cost of inspections is expected to be minor 
or nonexistent, and would be offset by the benefits.

[[Page 14908]]

    There is no disproportionate impact on smaller entities; entities 
of all sizes will benefit.
    This rule would not impose any additional reporting or 
recordkeeping requirements on either small or large almond producers, 
handler or exporters.
    The use of grading services and grading standards is voluntary 
unless required by a specific Act, Federal Marketing Order or 
Agreement, or other regulations governing domestic, import or export 
shipments. USDA has not identified any Federal rules that duplicate, 
overlap, or conflict with this rule. However, there is a marketing 
program which regulates the handling of almonds under 7 CFR part 981. 
The revision in this action only affects the inspection procedures for 
internal defects in the standards. As such, the action would not affect 
almonds in the shell under the marketing order.
    Alternatives were considered for this action. One alternative would 
be to not issue a rule. However, the need for revisions remains due to 
differing procedures for incoming and outgoing almond inspections, and 
is the result of a request by industry. Further, the purpose of these 
standards is to facilitate the marketing of agricultural commodities.

Executive Order 12988

    The rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action is not intended to have retroactive effect. 
There are no administrative procedures which must be exhausted prior to 
any judicial challenge to the provisions of the rule.
    Section 203(c) of the Act directs and authorizes the Secretary of 
Agriculture ``to develop and improve standards of quality, condition, 
quantity, grade and packaging and recommend and demonstrate such 
standards in order to encourage uniformity and consistency in 
commercial practices.'' AMS is committed to carrying out this authority 
in a manner that facilitates the marketing of agricultural commodities 
and makes copies of official standards available upon request.

Background

    On March 11, 2011, AMS received a letter from the Almond Board of 
California (Board) requesting that the procedure for measuring internal 
(kernel) defects in the United States Standards for Grades of Almonds 
in the Shell be changed from a count basis to a weight basis. The 
purpose of this change is to align incoming and outgoing inspection 
procedures.
    Currently, almonds must undergo incoming inspections and may 
undergo outgoing inspections. The almond marketing order (part 981--
Almonds Grown in California) mandates that the percentage of inedible 
kernels is determined during an incoming inspection. As required in the 
marketing order (7 CFR 981.42 and 981.442 (Quality Control)), federally 
licensed state inspectors perform these inspections on 100 percent of 
the product moving from growers to handlers (packers). ``Inedible 
kernel'' is defined in Sec. Sec.  981.8 and 981.408 of the marketing 
order and is based on internal (kernel) defects as defined in the 
standards, in Sec. Sec.  51.2087 (Decay), 51.2088 (Rancidity), 51.2089 
(Damage) and 51.2090 (Serious Damage).
    Federally licensed state inspectors also perform outgoing 
inspections, which are voluntary, on approximately 75 percent of all of 
the almonds going from the handlers to domestic and international 
markets, according to shipping point records maintained by Federal 
State Inspection. The current procedures for determining the percentage 
of defective kernels in the two different inspections are not the same. 
For incoming inspections, the percentage of inedible kernels is 
determined on a weight basis. With outgoing inspections, however, 
determining the percentage of internal (kernel) defects, which is one 
step in a multi-step procedure specified in the standards for 
determining U.S. grade, is done through a combination of count and 
weight of the nuts in the sample. This change to the standards would 
more closely align the procedures of the incoming and outgoing 
inspections.
    A key reason for making this change is the increasing magnitude of 
exports of almonds in the shell. Between the 2006/07 and 2009/10 
seasons, export shipments of almonds in the shell doubled, rising from 
148 to 297 million pounds (inshell basis), according to trade data from 
the Foreign Agricultural Service of USDA. During this same time period, 
the number of handlers exporting almonds in the shell increased by 42 
percent. Due to the substantial increase in the number of handlers and 
volume of shipments, the Board received numerous inquiries regarding 
the reasons for the different procedures for determining internal 
defects on incoming and outgoing inspections.
    A number of handlers asked the Board's Food Quality and Safety 
Committee (committee) to look into how to change the standards to make 
outgoing inspections more consistent with the incoming inspection 
method. Determining the percentage of nuts with internal defects is the 
third of three required steps in section 51.2080 (Determination of 
Grade). In addition, a 10 percent tolerance for internal (kernel) 
defects is one of five tolerances that are specified in section 
51.2075(b)(5) for determining whether a lot of inshell almonds is 
graded as U.S. No. 1. Committee staff queried handlers that ship 
almonds in the shell about changing the determination of internal 
defects from a count basis to a weight basis, which would apply to both 
of these sections.
    A proposed rule regarding these revisions to the United States 
Standards for Grades of Almonds in the Shell was published in the 
Federal Register on July 16, 2012 (77 FR 41707). The public comment 
period closed on August 15, 2012, with no responses. Based on the 
information gathered, AMS believes the revisions will bring the 
standards for almonds in the shell in line with the marketing order and 
thereby improve their usefulness.

List of Subjects in 7 CFR part 51

    Agricultural commodities, Food grades and standards, Fruits, Nuts, 
Reporting and record keeping requirements, Trees, Vegetables.
    For reasons set forth in the preamble, 7 CFR part 51 is to be 
amended as follows:

PART 51--[AMENDED]

0
1. The authority citation for part 51 continues to read as follows:

    Authority:  7 U.S.C. 1621-1627.


0
2. In Sec.  51.2075, paragraph (b)(5) is revised to read as follows:


Sec.  51.2075  U.S. No. 1

* * * * *
    (b) * * *
    (5) For internal (kernel) defects. 10 percent, by weight, for 
almonds with kernels failing to meet the requirements of this grade: 
Provided, that not more than one-half of this tolerance or 5 percent 
shall be allowed for kernels affected by decay or rancidity, damaged by 
insects or mold or seriously damaged by shriveling: And provided 
further, that no part of this tolerance shall be allowed for live 
insects inside the shell.
* * * * *

0
3. Section 51.2080 is revised to read as follows:


Sec.  51.2080  Determination of grade.

    In grading the inspection sample, the percentage of loose hulls, 
pieces of shell, chaff and foreign material is determined on the basis 
of weight. Next, the percentages of nuts which are of dissimilar 
varieties, undersize or have

[[Page 14909]]

adhering hulls or defective shells are determined by count, using an 
adequate portion of the total sample. Finally, the nuts in that portion 
of the sample are cracked and the percentage having internal defects is 
determined on the basis of weight.

    Dated: February 28, 2013.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2013-05436 Filed 3-7-13; 8:45 am]
BILLING CODE 3410-02-P