[Federal Register Volume 63, Number 104 (Monday, June 1, 1998)]
[Rules and Regulations]
[Pages 29531-29535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14422]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[FV98-989-1 FIR]
Raisins Produced From Grapes Grown in California; Final Free and
Reserve Percentages for 1997-98 Crop Natural (Sun-Dried) Seedless and
Zante Currant Raisins
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule, without change, the provisions of an interim final rule
which established final volume regulation percentages for 1997-98 crop
Natural (sun-dried) Seedless (Naturals) and Zante Currant (Zantes)
raisins covered under the Federal marketing order for California
raisins. The order regulates the handling of raisins produced from
grapes grown in California and is administered locally by the Raisin
Administrative Committee (Committee). The volume regulation percentages
are 66 percent free and 34 percent reserve for Naturals and 44 percent
free and 56 percent reserve for Zantes. Free tonnage raisins may be
sold by handlers to any market. Reserve raisins must be held in a pool
for the account of the Committee and are disposed of through various
programs authorized under the order. The volume regulation percentages
are intended to help stabilize raisin supplies and prices and
strengthen market conditions.
EFFECTIVE DATE: July 1, 1998.
FOR FURTHER INFORMATION CONTACT: Maureen T. Pello, Marketing
Specialist, California Marketing Field Office, Fruit and Vegetable
Programs, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno,
California 93721; telephone: (209) 487-5901, Fax: (209) 487-5906; or
George Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box
96456, Washington, DC 20090-6456; telephone: (202) 720-2491, or Fax:
(202) 205-6632. Small businesses may request information on compliance
with this regulation by contacting Jay Guerber, Marketing Order
Administration Branch, Fruit and Vegetable Programs, AMS, USDA, P.O.
Box 96456, room 2525-S, Washington, DC 20090-6456; telephone (202) 720-
2491; Fax: (202) 205-6632.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement and Order No. 989 (7 CFR part 989), both as amended,
regulating the handling of raisins produced from grapes grown in
California, 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 is issuing this rule in conformance with Executive
Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the order provisions now in effect, final free
and reserve percentages may be established for raisins acquired by
handlers during the crop year. This rule establishes final free and
reserve percentages for Natural and Zante raisins for the 1997-98 crop
year, which began August 1, 1997, and ends July 31, 1998. This rule
will not
[[Page 29532]]
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 the Secretary 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, the Secretary 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 in equity to review the
Secretary'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 continues in effect the provisions of an interim final
rule which established final volume regulation percentages for 1997-98
crop Natural and Zante raisins covered under the order. The volume
regulation percentages are 66 percent free and 34 percent reserve for
Naturals and 44 percent free and 56 percent reserve for Zantes. Free
tonnage raisins may be sold by handlers to any market. Reserve raisins
must be held in a pool for the account of the Committee and are
disposed of through various programs authorized under the order. For
example, reserve raisins may be sold by the Committee to handlers for
free use or to replace part of the free tonnage raisins they exported;
used in diversion programs; carried over as a hedge against a short
crop the following year; or disposed of in other outlets not
competitive with those for free tonnage raisins, such as government
purchase, distilleries, or animal feed. The volume regulation
percentages are intended to help stabilize raisin supplies and prices
and strengthen market conditions. Final percentages were recommended by
the Committee at a meeting on February 12, 1998.
Section 989.54 of the order prescribes the procedures and time
frames to be followed in establishing volume regulation. This includes
methodology used to calculate percentages. Pursuant to Sec. 989.54(a)
of the order, the Committee met on August 14, 1997, to review shipment
and inventory data, and other matters relating to the supplies of
raisins of all varietal types. The Committee computed a trade demand
for each varietal type for which a free tonnage percentage might be
recommended. Trade demand is a computed formula specified in the order
and, for each varietal type, is equal to 90 percent of the prior year's
shipments of free tonnage and reserve tonnage raisins sold for free use
into all market outlets, adjusted by subtracting the carryin on August
1 of the current crop year and by adding the desirable carryout at the
end of that crop year. As specified in Sec. 989.154, the desirable
carryout for each varietal type is equal to the shipments of free
tonnage raisins of the prior crop year during the months of August and
September. In accordance with these provisions, the Committee computed
and announced 1997-98 trade demands for Naturals and Zantes at 252,398
and 2,058 tons, respectively, as shown below.
Computed Trade Demands
[Natural condition tons]
------------------------------------------------------------------------
Naturals Zantes
------------------------------------------------------------------------
Prior year's shipments........................ 314,013 3,277
Multiplied by 90 percent...................... 0.90 0.90
Equals adjusted base.......................... 282,612 2,949
Minus carryin inventory....................... 92,769 1,679
Plus desirable carryout....................... 62,555 788
Equals computed trade demand.................. 252,398 2,058
------------------------------------------------------------------------
As required under Sec. 989.54(b) of the order, the Committee met on
October 2, 1997, and announced a preliminary crop estimate of 353,583
tons for Naturals. With the crop estimate much higher than the trade
demand of 252,398 tons, the Committee determined that volume regulation
was warranted. The Committee announced preliminary free and reserve
percentages for Naturals which released 65 percent of the computed
trade demand since the field price had not yet been established. The
preliminary percentages were 46 percent free and 54 percent reserve.
The Committee authorized its staff to modify the preliminary
percentages to release 85 percent of the trade demand when the field
price was established. The field price was established on October 17,
1997, and the preliminary percentages were thus modified to 61 percent
free and 39 percent reserve. As discussed later in this rule, the
353,583 ton crop estimate was subsequently revised to 381,484 tons, the
largest crop since 1993-94. The production of Naturals has exceeded
market needs during the current crop year, as in most seasons. Volume
regulation in such a large crop year should help stabilize prices and
improve market conditions.
Also at its October 2, 1997, meeting, the Committee announced a
preliminary crop estimate for Zantes at 4,812 tons. This compared to
the trade demand of 2,058 tons. It was determined that a Zante reserve
pool was warranted because estimated production exceeded the trade
demand by a significant amount. The Committee computed preliminary
percentages for Zantes at 36 percent free and 64 percent reserve which
would have released 85 percent of the computed trade demand. However,
as authorized under Sec. 989.54(c), the Committee modified the computed
preliminary percentages and established interim percentages to release
slightly less than the full trade demand (98.8 percent) at 42.5 percent
free and 57.5 percent reserve. Volume regulation for Zantes should also
help stabilize prices and improve market conditions.
Also at that meeting, the Committee computed and announced
preliminary crop estimates for Dipped Seedless, Oleate and Related
Seedless, Golden Seedless, Sultana, Muscat, Monukka, and Other Seedless
raisins. The Committee computed preliminary volume regulation
percentages for these varieties, but determined that such regulation
was only warranted for Naturals and Zantes. It determined that the
supplies of the other varietal types would be less than or close enough
to the computed trade demands for each of these varietal types. As in
past seasons, the Committee submitted its marketing policy to the
Department for review.
[[Page 29533]]
The Committee met on February 12, 1998, and revised its crop
estimates for both Naturals and Zantes as follows: for Naturals, the
estimate was increased from 353,583 to 381,484 tons; and for Zantes,
the estimate was increased from 4,812 to 4,955 tons. The Committee also
announced interim percentages for Naturals at 65.75 percent free and
34.25 percent reserve. Regarding Zantes, the Committee modified its
trade demand figure from 2,058 to 2,200 tons at an earlier meeting in
November 1997. At its February meeting, the Committee revised its
interim percentages for Zantes to 43.75 percent free and 56.25 percent
reserve. As required under Sec. 989.54(d) of the order, the Committee
also recommended to the Secretary at its February meeting final free
and reserve percentages which, when applied to the final production
estimate of a varietal type, will tend to release the full trade demand
for any varietal type. The Committee's calculations to arrive at final
percentages for Naturals and Zantes are shown in the table below.
Final Volume Regulation Percentages
[Tonnage as natural condition weight]
------------------------------------------------------------------------
Naturals Zantes
------------------------------------------------------------------------
Trade demand.................................. 252,398 2,200
Divided by crop estimate...................... 381,384 4,955
Equals free percentage........................ 66 44
100 minus free percentage equals reserve
percentage................................... 34 56
------------------------------------------------------------------------
In addition, the Department's ``Guidelines for Fruit, Vegetable,
and Speciality Crop Marketing Orders'' (Guidelines) specify that 110
percent of recent years' sales should be made available to primary
markets each season for marketing orders utilizing reserve pool
authority. This goal was met for Naturals and Zantes by the
establishment of final percentages which released 100 percent of the
trade demand and the offers of additional reserve raisins for sale to
handlers under the ``10 plus 10 offers.'' As specified in
Sec. 989.54(g), the 10 plus 10 offers are two offers of reserve pool
raisins which are made available to handlers during each season.
Handlers may sell their 10 plus 10 raisins to any market. For each such
offer, a quantity of reserve raisins equal to 10 percent of the prior
year's shipments is made available for free use.
For Naturals, the first 10 plus 10 offer was made available in
December 1997 and about 31,000 tons of raisins were purchased by
handlers. The second 10 plus 10 offer was made available to handlers in
May 1998 at which time about another 31,000 tons of reserve Naturals
were offered for sale to handlers. Adding the 62,000 tons of 10 plus 10
raisins to the 252,398 ton trade demand figure, plus 92,769 tons of
1996-97 carryin inventory equates to about 407,170 tons natural
condition raisins or 381,750 tons packed raisins made available for
free use, or to the primary market. This is 130 percent of the quantity
of Naturals shipped in 1997 (314,013 natural condition tons or 294,406
packed tons).
For Zantes, both Zante 10 plus 10 offers were made available
simultaneously in November 1997 and 656 tons of raisins were purchased
by handlers. Adding the 656 tons of 10 plus 10 raisins to the 2,200 ton
trade demand figure, plus 1,679 tons of 1996-97 carryin inventory
equates to 4,535 tons natural condition raisins or about 3,970 tons
packed raisins made available for free use, or to the primary market.
This is 138 percent of the quantity of Zantes shipped in 1997 (3,277
natural condition tons or 2,868 packed tons).
In addition to the 10 plus 10 offers, Sec. 989.67(j) of the order
provides authority for sales of reserve raisins to handlers under
certain conditions such as a national emergency, crop failure, change
in economic or marketing conditions, or if free tonnage shipments in
the current crop year exceed shipments of a comparable period of the
prior crop year. Such reserve raisins may be sold by handlers to any
market. These additional offers of reserve raisins would thus make even
more raisins available to primary markets which is consistent with the
Department's Guidelines.
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 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 20 handlers of California raisins who are
subject to regulation under the order and approximately 4,500 raisin
producers in the regulated area. Small agricultural service firms have
been defined by the Small Business Administration (13 CFR 121.601) 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 $500,000. No more than 7 handlers, and a majority of
producers, of California raisins may be classified as small entities.
Thirteen of the 20 handlers subject to regulation have annual sales
estimated to be at least $5,000,000, and the remaining 7 handlers have
sales less than $5,000,000, excluding receipts from any other sources.
Pursuant to Sec. 989.54(d) of the order, this rule continues in
effect the provisions of an interim final rule which established final
volume regulation percentages for 1997-98 crop Natural and Zante
raisins. The volume regulation percentages are 66 percent free and 34
percent reserve for Naturals and 44 percent free and 56 percent reserve
for Zantes. Free tonnage raisins may be sold by handlers to any market.
Reserve raisins must be held in a pool for the account of the Committee
and are disposed of through certain programs authorized under the
order. The volume regulation percentages are intended to help stabilize
raisin supplies and prices and strengthen market conditions.
Many years of marketing experience led to the development of the
current volume regulation procedures. These procedures have helped the
industry address its marketing problems by keeping supplies in balance
with domestic and export market needs, and strengthening market
conditions. The current volume regulation procedures fully supply the
domestic and export markets, provide for market expansion, and help
prevent oversupplies in the domestic market.
[[Page 29534]]
In discussing the possibility of volume regulation for the 1997-98
crop year, the Committee considered the following factors:
------------------------------------------------------------------------
Naturals* Zantes*
------------------------------------------------------------------------
Estimated tonnage held by producers, handlers,
and for the account of the Committee at the
beginning of the crop year................... 92,769 1,679
Estimated tonnage of standard raisins which
will be produced in 1997-98.................. 381,484 4,955
Trade demand for raisins in free tonnage
outlets for 1997-98.......................... 252,398 2,200
Estimated desirable carryout at the end of the
1997-98 crop year for free tonnage........... 58,875 545
------------------------------------------------------------------------
*Natural condition tons.
The Committee also considered the estimated world raisin supply and
demand situation; the current prices being received and the probable
level of prices to be received for raisins by producers and handlers;
and the trend and level of consumer income.
The Committee's review resulted in the computation and announcement
in October 1997 of volume regulation percentages for Naturals and
Zantes. Naturals are the major commercial varietal type of raisin
produced in California. Volume regulation has been implemented under
the order for Naturals for the past several seasons. With the crop
estimate of 381,484 tons, much higher than the computed trade demand of
252,398 tons, the Committee determined that volume regulation was
warranted.
In comparison, Zante production is much smaller than that of
Naturals. Volume regulation was last implemented for Zantes during the
1995-96 crop year. Volume regulation was warranted for Zantes this
season because the crop estimate of 4,955 tons exceeded the trade
demand of 2,200 tons by a significant amount.
Raisin variety grapes can be marketed as fresh grapes, crushed for
use in the production of wine or juice concentrate, or dried into
raisins. Annual fluctuations in the fresh grape, wine, and concentrate
markets, as well as weather related factors, cause fluctuations in
raisin supply. These supply fluctuations can cause producer price
instability and disorderly market conditions. Volume regulation is
helpful to the raisin industry because it lessens the impact of such
fluctuations and contributes to orderly marketing. For example,
producer returns for Naturals have remained fairly steady over the last
5 crop years although production has varied. As shown in the table
below, production over the last 5 years has varied from a low of
272,063 tons in 1996-97 and to a high of 387,007 tons in 1993-94, or 42
percent. According to Committee data, total producer return per ton,
which includes proceeds from both free tonnage plus reserve pool
raisins, has varied from a low of $901 in 1992-93 to a high of $1,049
in 1996-97, or 16 percent.
Natural Seedless Producer Returns
------------------------------------------------------------------------
Production
(natural Producer
Crop year condition returns
tons)
------------------------------------------------------------------------
1996-97....................................... 272,063 $1,049
1995-96....................................... 325,911 1,007
1994-95....................................... 378,427 928
1993-94....................................... 387,007 904
1992-93....................................... 371,516 901
------------------------------------------------------------------------
Free and reserve percentages are established by variety, and only
in years when the supply exceeds the trade demand by a large enough
margin that the Committee believes volume regulation is necessary to
maintain market stability. Accordingly, in assessing whether to apply
volume regulation or, as an alternative, not to apply such regulation,
the Committee recommended only two of the nine raisin varieties defined
under the order for volume regulation this season.
The free and reserve percentages release the full trade demand and
apply uniformly to all handlers in the industry, regardless of size.
Small and large raisin producers and handlers have been operating under
volume regulation percentages every year since 1983-84. There are no
known additional costs incurred by small handlers that are not incurred
by large handlers. All handlers are regulated based on the quantity of
raisins which they acquire from producers. While the level of benefits
of this rulemaking are difficult to quantify, the stabilizing effects
of the volume regulations impact both small and large handlers
positively by helping them maintain and expand markets even though
raisin supplies fluctuate widely from season to season. Likewise, price
stability positively impacts small and large producers by allowing them
to better anticipate the revenues their raisins will generate.
There are some reporting, recordkeeping and other compliance
requirements under the order. The reporting and recordkeeping burdens
are necessary for compliance purposes and for developing statistical
data for maintenance of the program. The requirements are the same as
those applied last season. Thus, this action will not impose any
additional reporting or recordkeeping burdens on either small or large
handlers. The forms require information which is readily available from
handler records and which can be provided without data processing
equipment or trained statistical staff. The information collection and
recordkeeping requirements have been previously approved by the Office
of Management and Budget under OMB Control No. 0581-0178. As with
other, similar marketing order programs, reports and forms are
periodically studied to reduce or eliminate duplicate information
collection burdens by industry and public sector agencies. In addition,
the Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
Further, Committee and subcommittee meetings are widely publicized
in advance and are held in a location central to the production area.
The meetings are open to all industry members, including small business
entities, and other interested persons who are encouraged to
participate in the deliberations and voice their opinions on topics
under discussion. Thus, Committee recommendations can be considered to
represent the interests of small business entities in the industry.
An interim final rule concerning this action was published in the
Federal Register on March 10, 1998. Copies of the rule were mailed by
the Committee's staff to all raisin handlers. In addition, the rule was
made available through the Internet by the Office of the Federal
Register. That rule provided for a 60-day comment period which ended on
May 11, 1998. Interested persons were also invited to submit
information on the regulatory and informational impacts of this action
on small businesses. No comments were received.
After consideration of all relevant material presented, including
the
[[Page 29535]]
Committee's recommendation, and other information, it is found that
finalizing the interim final rule, without change, as published in the
Federal Register (63 FR 11585; March 10, 1998) will tend to effectuate
the declared policy of the Act.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements, Raisins, Reporting and recordkeeping
requirements.
PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA
Accordingly, the interim final rule amending 7 CFR part 989 which
was published at 63 FR 11585 on March 10, 1998, is adopted as a final
rule without change.
Dated: May 26, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-14422 Filed 5-29-98; 8:45 am]
BILLING CODE 3410-02-P
