[Federal Register Volume 84, Number 46 (Friday, March 8, 2019)]
[Rules and Regulations]
[Pages 8409-8411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04232]



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 Rules and Regulations
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  Federal Register / Vol. 84, No. 46 / Friday, March 8, 2019 / Rules 
and Regulations  

[[Page 8409]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 986

[Doc. No. AMS-SC-18-0019; SC18-986-1 FR]


Pecans Grown in the States of Alabama, Arkansas, Arizona, 
California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, 
North Carolina, New Mexico, Oklahoma, South Carolina, and Texas; 
Revision of Reporting Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule revises the reporting requirements under the Federal 
marketing order for pecans. The revised reporting requirements will 
enable the American Pecan Council (Council) to collect information from 
handlers on the average handler price paid and the average shelled 
pecan yield. The Council will use this information to provide important 
statistical reports to the industry and meet requirements under the 
marketing order.

DATES: Effective April 8, 2019.

FOR FURTHER INFORMATION CONTACT: Jennie M. Varela, Marketing 
Specialist, or Christian D. Nissen, Regional Director, Southeast 
Marketing Field Office, Marketing Order and Agreement Division, 
Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax: 
(863) 291-8614, or email: [email protected] or 
[email protected].
    Small businesses may request information on complying with this 
regulation by contacting Richard Lower, Marketing Order and Agreement 
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue 
SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, 
Fax: (202) 720-8938, or email: [email protected].

SUPPLEMENTARY INFORMATION: This final rule, pursuant to 5 U.S.C. 553, 
amends regulations issued to carry out a marketing order as defined in 
7 CFR 900.2(j). This final rule is issued under Marketing Agreement and 
Order No. 986, (7 CFR part 986), regulating the handling of pecans 
grown in the states of Alabama, Arkansas, Arizona, California, Florida, 
Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New 
Mexico, Oklahoma, South Carolina, and Texas. Part 986 (referred to as 
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 Council locally administers the Order and is comprised 
of growers and handlers of pecans operating within the production area, 
and one accumulator and one public member.
    The Department of Agriculture (USDA) is issuing this final rule in 
conformance with Executive Orders 13563 and 13175. This action falls 
within a category of regulatory actions that the Office of Management 
and Budget (OMB) has exempted from Executive Order 12866 review. 
Additionally, because this rule does not meet the definition of a 
significant regulatory action it does not trigger the requirements 
contained in Executive Order 13771. See OMB's Memorandum titled 
``Interim Guidance Implementing Section 2 of the Executive Order of 
January 30, 2017, titled `Reducing Regulation and Controlling 
Regulatory Costs'[thinsp]'' (February 2, 2017).
    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 revises the reporting requirements under the Order. 
This action requires all pecan handlers to report to the Council the 
average handler price paid and average shelled pecan yield as part of 
its existing year-end report. The Council will use this information to 
provide statistical reports to the industry and meet requirements under 
the Order. This action was unanimously recommended by the Council at 
its January 24, 2017, meeting and affirmed at its April 17, 2018, 
meeting.
    Section 986.76 provides the authority to collect reports on the 
quantity of pecans handled and other pertinent information as specified 
by the Council. Section 986.78 provides, with the approval of the 
Secretary, authority for the Council to collect other reports and 
information from handlers needed to perform its duties. Section 986.175 
specifies that handlers shall submit a year-end report to the Council 
that includes the amount of shelled and inshell pecans in inventory, 
total inventory calculated on an inshell basis, total weight and type 
of domestic pecans handled for the fiscal year, and information on 
assessments owed, paid, or due.
    This rule revises Sec.  986.175 to require that additional 
information be included in the year-end report. These revisions require 
handlers to report the average price paid by handler and average yield 
of shelled pecans as part of the existing year-end report.
    At its January 24, 2018, and April 17, 2018, meetings, the Council 
reviewed the reporting requirements under the Order and determined 
there were additional data that would be beneficial to collect and 
summarize for the industry on an annual basis. Specifically, the 
Council recommended adding two additional items to be reported as part 
of the annual year-end reporting requirement, average price paid by 
handlers and shelled pecan yield.
    While the National Agricultural Statistics Service (NASS) reports 
average grower prices, this reporting change will provide information 
regarding a handler's overall cost of

[[Page 8410]]

acquiring pecans. Some handlers buy directly from growers, but many buy 
from other handlers or import pecans. Understanding the cost of pecans 
being handled is key information in determining the value of the 
overall crop and subsequent impacts on the market for pecans the 
following season. During the meetings, members noted that collecting 
the average price paid would also be necessary to complete the 
marketing policy report required under the Order. The marketing policy, 
as required by Sec.  986.65, must include projected prices for the 
upcoming fiscal year, which would be influenced by handler costs. 
Further, the Council believes providing this information would improve 
the information available to the pecan industry. In particular, the 
Council feels this information may give growers better information that 
can be used in making business decisions. The Council recommended 
adding this reporting requirement as there is currently no 
comprehensive source for handler cost information.
    The Council also discussed asking handlers to provide information 
regarding the weight of shelled pecans handled. During the formal 
rulemaking hearing to promulgate the Order, a witness testified 
regarding a conversion rate of multiplying the shelled weight by two to 
calculate inshell weight. That conversion rate was incorporated into 
the Order. Using this conversion, the weight of shelled pecans is 
approximately 50 percent of the inshell weight. This proportion is 
referred to as the ``shell-out'' or shelled pecan yield. However, there 
are natural variations in pecans and yield can vary depending on the 
thickness of the shells of different varieties and can also vary from 
year to year. These fluctuations make it challenging to accurately 
convert the total inshell volume harvested into shelled pounds, or 
shelled pounds into their inshell equivalent to provide an accurate 
estimate of overall supply.
    As with the handler price paid, there is currently no central 
industry source for information on shelled pecan yield. The Council 
believes collecting this data will allow them to provide the industry 
with an updated annual average of this yield, which could be an 
indicator of quality, and over time provide a series of data on shelled 
pecan yield that would allow them to determine if changes to the 
current conversion rate are needed.
    Following the recommendation of the proposed changes made at the 
January 24, 2018 meeting, some members had questions about the specific 
data that would be collected. Based on these questions, the Council 
made some adjustments to the proposed form to clarify that handlers 
would report the average price paid for all inshell pecans purchased 
during the fiscal year, regardless of how the pecans are handled, 
including pecans from outside the production area. For the purposes of 
this form, the terms crop year and fiscal year are synonymous. The 
Council reviewed the revised reporting form at its April 17, 2018, 
meeting and affirmed that the new language met their original intent.
    The Council believes these revised reporting requirements are 
necessary to provide accurate reports to the industry regarding average 
price paid, yield for shelled pecans, and to meet requirements under 
the Order. The industry will use this information to complement the 
information provided by NASS in the development of its marketing policy 
and to collect accurate data to determine if the definition of weight 
in Sec.  986.43 needs to be amended.

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 
businesses 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.
    There are approximately 2,500 growers of pecans in the production 
area and approximately 250 handlers subject to regulation under the 
Order. Small agricultural growers are defined by the Small Business 
Administration as those having annual receipts less than $750,000, and 
small agricultural service firms are defined as those whose annual 
receipts are less than $7,500,000 (13 CFR 121.201).
    According to information from NASS, the average grower price for 
pecans during the 2016-2017 season was $2.59 per pound and 269 million 
pounds were utilized. The value for pecans that year totaled $697 
million ($2.59 per pound multiplied by 269 million pounds). Taking the 
total value of production for pecans and dividing it by the total 
number of pecan growers provides an average return per grower of 
$278,684. Using the average price and utilization information, and 
assuming a normal distribution among growers, the majority of growers 
receive less than $750,000 annually.
    Evidence presented at the formal rulemaking hearing indicates an 
average handler margin of $0.58 per pound. Adding this margin to the 
average grower price of $2.59 per pound of inshell pecans results in an 
estimated handler price of $3.17 per pound. With a total 2017 
production of 269 million pounds, the total value of production in 2017 
was $853 million ($3.17 per pound multiplied by 269 million pounds). 
Taking the total value of production for pecans and dividing it by the 
total number of pecan handlers provides an average return per handler 
of $3.4 million. Using this estimated price, the utilization volume, 
number of handlers, and assuming a normal distribution among handlers, 
the majority of handlers have annual receipts of less than $7,500,000. 
Thus, the majority of growers and handlers regulated under the Order 
may be classified as small entities.
    This final rule revises the reporting requirements in Sec.  
986.175. This action requires all pecan handlers to report to the 
Council the average handler price paid and average shelled pecan yield 
as part of its existing year-end report. This information will be used 
by the Council to provide statistical reports to the industry and meet 
requirements under the Order. The authority for this action is provided 
in Sec. Sec.  986.76 and 986.78.
    It is not anticipated that this action will impose additional costs 
on handlers or growers, regardless of size. Council members, including 
those representing small businesses, indicated the average handler 
price paid and the average shelled pecan yield information is already 
recorded and maintained by handlers as a part of their daily business 
and the information should be readily accessible. Consequently, any 
additional costs associated with this change would be minimal and apply 
equally to all handlers.
    This action should also help the industry by providing additional 
data on pecans handled. This information will help with marketing and 
planning for the industry, as well as provide important information in 
preparing the annual marketing policy required by the Order. This 
change will also assist with the development of a dataset to determine 
if the conversion rate for shelled to inshell pecans needs to be 
revised. The benefits of this rule are expected to be equally available 
to all pecan growers and handlers, regardless of their size.

[[Page 8411]]

    The Council discussed other alternatives to this action, including 
making no changes to the current reporting requirements. However, 
having the information on handler price paid and shelled pecan yield 
will provide important information for the industry.
    Another alternative considered was to create a new report for the 
collection of this information. However, the industry recently 
implemented a series of monthly reports that increased the reporting 
burden on handlers. Rather than add to the burden by creating a new 
report, the Council believed it would be more efficient to ask handlers 
for this information as part of the existing year-end reporting 
requirement. Therefore, the alternatives were rejected.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), the Order's information collection requirements have been 
previously approved by OMB and assigned OMB No. 0581-0291 ``Federal 
Marketing Order for Pecans.'' This final rule will require changes to 
the Council's existing APC Form 7. However, the changes are minor and 
the currently approved burden for the form will not be altered by the 
changes to the form. The revised form has been submitted to OMB for 
approval.
    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. As noted in the 
initial regulatory flexibility analysis, USDA has not identified any 
relevant Federal rules that duplicate, overlap, or conflict with this 
rule. Further, no public comments were received regarding the initial 
regulatory flexibility analysis.
    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.
    The Council's meetings were widely publicized throughout the pecan 
industry and all interested persons were invited to attend the meetings 
and participate in Council deliberations on all issues. The Council's 
meetings held on January 24, 2018, and April 17, 2018, were also public 
meetings and all entities, both large and small, were able to express 
views on this issue.
    A proposed rule concerning this action was published in the Federal 
Register on October 9, 2018, (83 FR 50531). Copies of the rule were 
sent via email to Council members and known pecan handlers. The rule 
was also made available through the internet by USDA and the Office of 
the Federal Register. A 30-day comment period ending November 8, 2018, 
was provided to allow interested persons to respond to the proposal. No 
comments were received. Accordingly, no changes will be made to the 
rule as proposed.
    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/rules-regulations/moa/small-businesses. Any questions 
about the compliance guide should be sent to Richard Lower 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 Council 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.

List of Subjects in 7 CFR Part 986

    Marketing agreements, Nuts, Pecans, Reporting and recordkeeping 
requirements.

    For the reasons set forth in the preamble, 7 CFR part 986 is 
amended as follows:

PART 986--PECANS GROWN IN THE STATES OF ALABAMA, ARKANSAS, ARIZONA, 
CALIFORNIA, FLORIDA, GEORGIA, KANSAS, LOUISIANA, MISSOURI, 
MISSISSIPPI, NORTH CAROLINA, NEW MEXICO, OKLAHOMA, SOUTH CAROLINA, 
AND TEXAS

0
1. The authority citation for 7 CFR part 986 continues to read as 
follows:

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

0
2. Section 986.175 is amended by revising paragraphs (a) introductory 
text, (a)(7) and (8), and adding paragraphs (a)(9) and (10) to read as 
follows:


Sec.  986.175  Handler inventory.

    (a) Handlers shall submit to the Council a year-end inventory 
report following August 31 each fiscal year. Handlers shall file such 
reports by September 10. Should September 10 fall on a weekend, reports 
are due by the first business day following September 10. Such reports 
shall be reported to the Council on APC Form 7. For the purposes of 
this form, ``crop year'' is the same as the ``fiscal year.'' The report 
shall include:
* * * * *
    (7) Total weight and type of domestic pecans handled for the fiscal 
year;
    (8) Total assessments owed, assessments paid to date, and remaining 
assessments due to be paid by the due date of the year-end inventory 
report for the fiscal year;
    (9) The average price paid for all inshell pecans purchased during 
the fiscal year regardless of how the pecans are handled, including 
pecans from outside the production area; and
    (10) The average yield of shelled pecans per pound of inshell 
pecans shelled during the fiscal year.

    Dated: March 5, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-04232 Filed 3-7-19; 8:45 am]
BILLING CODE 3410-02-P