FR Doc 04-8214

[Federal Register: April 12, 2004 (Volume 69, Number 70)]
[Rules and Regulations]
[Page 19079-19082]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ap04-1]

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Rules and Regulations
Federal Register
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[[Page 19079]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 905

[Docket No. FV04-905-1 FIR]

Oranges, Grapefruit, Tangerines, and Tangelos Grown in Florida;
Relaxing Limits on the Volume of Small 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, without change, an interim final rule that relaxed the weekly
limits on small red seedless grapefruit entering the fresh market under
the marketing order covering oranges, grapefruit, tangerines, and
tangelos grown in Florida (order). The Citrus Administrative Committee
(Committee), which locally administers the order, recommended this
action. This rule finalizes a relaxation of the weekly limitation set
for shipments of small-sized red seedless grapefruit entering the fresh
market from 40 percent to 50 percent during the last week of the 22-
week regulatory period. This change provided an additional volume of
small red seedless grapefruit to address marketing conditions without
saturating all markets with these small sizes. This rule helped
stabilize the market and improve grower returns.

EFFECTIVE DATE: May 12, 2004.

FOR FURTHER INFORMATION CONTACT: William G. Pimental, Southeast
Marketing Field Office, Marketing Order Administration Branch, Fruit
and Vegetable Programs, AMS, USDA, 799 Overlook Drive, Suite A, Winter
Haven, Florida 33884-1671; 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: Jay.Guerber@usda.gov.

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 marketing agreement and order 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.
This rule finalizes an interim final rule that relaxed the limits
on the volume of small red seedless grapefruit entering the fresh
market. The interim final rule allowed for an additional volume of
sizes 48 and 56 fresh red seedless grapefruit to be shipped during the
last week of the 22-week percentage of size regulation period for the
2003-04 season. The relaxation supplied an additional volume of small
red seedless grapefruit to address current marketing conditions without
saturating all markets with these small sizes. This action helped
stabilize the market and improve grower returns.
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 provides procedures for limiting
the volume of small red seedless grapefruit entering the fresh market.
The procedures specify that the Committee may recommend that only a
certain percentage of sizes 48 and 56 red seedless grapefruit be made
available for shipment into fresh market channels 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
quantity of sizes 48 and 56 red seedless grapefruit that may be shipped
by a handler during a regulated week is calculated using the
recommended percentage. By taking the recommended weekly percentage
times the average weekly volume of red seedless grapefruit is handled
by such handler in the previous five seasons, handlers can calculate
the total volume of sizes 48 and 56 they may ship in a regulated week.
The interim final rule being finalized relaxed the 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 increasing the weekly percentage established for week 22
(February 9 through February 15, 2004),

[[Page 19080]]

from 40 percent to 50 percent. The Committee unanimously recommended
this change during a January 22, 2004, telephone meeting.
On July 1, 2003, the Committee recommended regulating all 22 weeks
(September 15, 2003-February 15, 2004). The Committee recommended that
the weekly percentages be set at 45 percent for the first 2 weeks, 35
percent for weeks 3 through 19, and 40 percent for the remaining 3
weeks. These percentages were established following informal rulemaking
procedures, with an interim final rule published in the Federal
Register on September 9, 2003 (68 FR 53015), and a final rule published
in the Federal Register on November 14, 2003 (68 FR 64494). The interim
final rule increasing the percentage of small red grapefruit shipments
for week 22 from 40 percent to 50 percent was published in the Federal
Register on February 6, 2004 (69 FR 5679).
The Committee believes that the over shipment of small-sized red
seedless grapefruit has a detrimental effect on the market. While there
is a market for small-sized red seedless grapefruit, the availability
of large quantities oversupplies the fresh market with these sizes and
negatively impacts the market for all sizes. These smaller sizes, 48
and 56, normally return the lowest prices when compared to the other
larger sizes. However, when there is too much volume of the smaller
sizes available, the overabundance of small-sized fruit pulls the
prices down for all sizes.
In its discussion of the relaxation of the percentage for the last
week when percentage size limitations apply, the Committee reviewed the
percentages previously recommended and the current state of the crop.
The Committee also considered some additional information that was not
available during its earlier meeting. On January 12, 2004, USDA
released information regarding fruit size distribution developed from a
December size survey. The size survey showed that more small sizes were
available than anticipated. The release stated that the mean size
indicated that only two other seasons during the past ten years have
had smaller sizes. According to the survey, more than 50 percent of the
remaining crop was size 48 and smaller. This compares to only 34
percent at this time last season.
The Committee had not expected small sizes to represent such a
large portion of the available crop at this time of the season. With
small sizes representing a significant amount of this year's crop,
larger sizes were in shorter supply. Growers had spot picked their
groves twice looking for larger sizes and to spot pick again would have
been cost prohibitive. Also, with the fruit size not improving, there
continued to be a shortage of large sizes. This meant that a sizable
amount of small sizes would have been available at the end of the
regulated period.
With a limited number of larger sizes available, there was also
market pressure to use small sizes to serve markets that traditionally
take larger sizes. However, at the same time, markets that
traditionally demand small sizes were also demanding fruit. There were
indications that importers of small-sized fruit had begun purchasing
fruit earlier than in past seasons. Export shipments for the week
ending January 18, 2004, were nearly 20 percent higher than for the
same week last season. These factors made supplies of available
allotment of small-sized fruit tight.
The Committee offices had been receiving calls from members of the
industry asking that the weekly percentages be increased. The Committee
staff was also actively working with handlers on allotment loans and
transfers to accommodate the needs of handlers desiring to ship more
small-sized red seedless grapefruit. Requests for loans and transfers
had increased from 3 requests during week 15, to 19 for week 17, to 24
requests during week 18.
However, while the percentage of size regulation provides
allowances for over shipments, loans, and transfers of allotment during
regulation weeks 1 through 21, there are no allowances for loans or
over shipments for week 22 because it is the end of the regulation
period. The Committee agreed that some increase in the percentage was
necessary for the last week of regulation to recognize that some
handlers would be having to reduce their allotment to cover any over
shipments from the previous week and that no additional over shipments
would be permitted.
There was also concern in the industry that if the percentage had
not been relaxed, a large volume of small-sized fruit would have been
pushed into the market following the end of the regulation period. This
would have negatively impacted prices and undermined the success of the
regulation. During the 2001-02 season, small sizes also represented a
significant percentage of the crop at the end of the regulation period.
The Committee had recommended a relaxation in the percentages for the
last few weeks of the season, but, due to rulemaking time frames, the
percentage changes were not implemented. Following the end of the
regulation period, sizable quantities of small sizes were dumped onto
the market. This contributed to a 35 cent per carton reduction in the
f.o.b. price. The Committee believed that relaxing the percentage for
the last week of regulation might help relieve some of the volume of
small sizes and provide for a smoother transition to the end of the
regulation period.
The Committee discussed several alternatives ranging from
maintaining the percentages at their current rate, increasing week 21
to 45 percent and week 22 to 50 percent, and just increasing the
percentage rate for week 22. The Committee agreed it would be difficult
to get a change to week 21 in place prior to that regulation week, and
recommended increasing the percentage for week 22 from 40 percent to 50
percent. Such a change represented an additional industry allotment of
72,174 cartons for the last week of regulation. The Committee believes
this provided the industry with some additional flexibility and helped
with the transition from the end of the 22-week regulation period to
the unrestricted shipment of small sizes.
Members agreed that one of the most important goals of percentage
of size regulation was to create some discipline in the way fruit was
packed and marketed. However, considering the size survey results, and
the other information discussed, the Committee decided that increasing
the weekly percentage for week February 9 through February 15 addressed
the goals of this regulation, while providing handlers with some
additional marketing flexibility.
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 seedless 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

[[Page 19081]]

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 grapefruit handlers subject to
regulation under the 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 $5,000,000, 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 2002-03
season was approximately $7.24 per \4/5\-bushel carton, and total fresh
shipments for the 2002-03 season are estimated at 22.9 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 75 percent of the grapefruit handlers could be
considered small businesses under SBA's 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.
On July 1, 2003, the Committee recommended limiting the volume of
sizes 48 and 56 red seedless grapefruit shipped during the first 22
weeks of the 2003-04 season by setting weekly percentages for each of
the 22 weeks, beginning September 15, 2003. Weekly percentages were
established at 45 percent for weeks 1 and 2, 35 percent for week 3
through week 19, and at 40 percent for weeks 20, 21, and 22. The
quantity of sizes 48 and 56 red seedless grapefruit that may be shipped
by a handler during a particular week is calculated using the
percentages set.
This rule finalizes the interim final rule that relaxed the weekly
limitation set for shipments of small-sized red seedless grapefruit
entering the fresh market from 40 percent to 50 percent during the last
week of the 22-week regulatory period. This action provided an
additional volume of small red seedless grapefruit to address marketing
conditions without saturating all markets with these small sizes. The
interim final rule helped stabilize the market and improve grower
returns. Procedures used in determining the weekly allotments of small
sizes are specified in Sec. 905.153. Authority for this action is
provided in Sec. 905.52 of the order. The Committee unanimously
recommended this action during a telephone meeting on January 22, 2004.
The interim final rule increased the weekly percentage set for the
last week of regulation. The Committee made this recommendation to
address the issue that the majority of the remaining crop was made up
of small sizes. By increasing the percentage, more small sizes were
available for shipment. This helped handlers meet their market needs
and provided some additional flexibility without putting too many small
sizes on the market. This benefited both handler and producer returns.
The purpose of percentage of size regulation is to help stabilize
the market and improve grower returns. This change provided a supply of
small-sized red seedless grapefruit sufficient to meet market demand,
without saturating all markets with these small sizes. The interim
final rule was not expected to decrease the overall consumption of red
seedless grapefruit. It was expected to benefit all red seedless
grapefruit growers and handlers regardless of their size of operation.
The Committee considered several alternatives when discussing this
action, including maintaining the percentages at their current rate,
increasing week 21 to 45 percent and week 22 to 50 percent, and just
increasing the percentage rate for week 22. The Committee agreed it
would be difficult to get a change to week 21 in place prior to that
regulation week, and recommended increasing the percentage for week 22
from 40 percent to 50 percent to provide the industry with some
additional flexibility and provide a smooth transition to the period
without percentage size limitations.
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.
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).
In addition, while the meeting on January 22, 2004, was a telephone
meeting, interested persons outside the Committee had an opportunity to
provide input in the decision. The Committee manager provided a notice
to the industry and anyone had the opportunity to participate in the
call. Like all Committee meetings, the January 22, 2004, meeting
provided both large and small entities the opportunity to express views
on this issue. Also, the weekly percentage size regulation has been an
ongoing issue that has been discussed at numerous public meetings so
that interested parties have had the opportunity to express their views
on this issue.
As mentioned before, the interim final rule concerning this action
was published in the Federal Register on February 6, 2004. Copies of
the rule were mailed by the Committee's staff to all Committee members
and grapefruit handlers. In addition, the rule was made available
through the Internet by USDA and the Office of the Federal Register.
The interim final rule invited comments until February 10, 2004. 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/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 this interim final rule, without change, as published in the
Federal Register (69 FR 5679, February 6, 2004) 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.

PART 905--ORANGES, GRAPEFRUIT, TANGERINES, AND TANGELOS GROWN IN
FLORIDA

0
Accordingly, the interim final rule amending 7 CFR part 905 which was
published at 69 FR 5679 on February 6, 2004, is adopted as a final rule
without change.

[[Page 19082]]

Dated: April 6, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-8214 Filed 4-9-04; 8:45 am]

BILLING CODE 3410-02-P