[Federal Register Volume 63, Number 2 (Monday, January 5, 1998)]
[Rules and Regulations]
[Pages 139-146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-34231]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 63, No. 2 / Monday, January 5, 1998 / Rules
and Regulations
[[Page 139]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 966 and 980
[Docket No. FV97-966-1 FR]
Tomatoes Grown in Florida and Imported Tomatoes; Final Rule to
Change Minimum Size and Size Designation Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule increases minimum diameter size requirements
for Florida and imported tomatoes. For Florida tomatoes alone, the rule
also changes size designations from Medium, Large, and Extra Large to
numeric size designations of 6 x 7, 6 x 6, and 5 x 6. Also, the rule
slightly increases the diameter size ranges for the designated sizes.
The marketing order regulates the handling of tomatoes grown in
Florida, and is administered locally by the Florida Tomato Committee
(Committee). This final rule will help the Florida tomato industry and
importers meet domestic market and industry demands. Also, this rule
will help provide handlers more marketing flexibility and increase
returns to producers, as well as provide consumers with slightly
larger, more mature tomatoes. Application of the size requirement
increase to imported tomatoes is required under section 8e of the
Agricultural Marketing Agreement Act of 1937.
EFFECTIVE DATE: This final rule becomes effective February 4, 1998.
FOR FURTHER INFORMATION CONTACT: Christian Nissen, Southeast Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 301 Third Street, NW., Suite 206, Winter
Haven, Florida 33881; telephone: (941) 299-4770, Fax: (941) 299-5169;
or George Kelhart, 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, 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, Room 2525-S, P.O. Box 96456,
Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202) 205-
6632.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Agreement No. 125 and Marketing Order No. 966, both as amended (7 CFR
part 966), regulating the handling of tomatoes grown in certain
designated counties 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.''
The Department of Agriculture (Department) 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 final 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 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 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.
Section 8e of the Act specifies that whenever certain specified
commodities, including tomatoes, are regulated under a Federal
marketing order, imports of those commodities must meet the same or
comparable grade, size, quality, and maturity requirements as those in
effect for the domestically produced commodity. There are no
administrative procedures which must be exhausted prior to any judicial
challenge to the provisions of import regulations issued under section
8e of the Act.
Under the order, tomatoes produced in the production area and
shipped to fresh market channels outside the regulated area are
required to meet grade, size, inspection, and container requirements.
These requirements are specified in Sec. 966.323 of the handling
regulations issued under the order. These requirements apply during the
period October 10 through June 15 each year. The regulated area is the
entire State of Florida, except the panhandle. The production area is
part of the regulated area. Specialty packed red ripe tomatoes, yellow
meated tomatoes, and single and double-layer place-packed tomatoes are
exempt from container net weight requirements.
Under Sec. 966.323, all tomatoes, except for pear shaped, paste,
cherry, hydroponic, and greenhouse tomatoes, must be inspected as
specified in the United States Standards for Grades of Fresh Tomatoes
(7 CFR part 51.1855 through 51.1877; standards). Such tomatoes also
must be at least 2\8/32\ inches in diameter, and sized with proper
equipment in one or more of the following ranges of diameters. In the
proposal, the reference to the number 2\8/32\ was incorrectly published
in the Federal Register as \28/32\ (62 FR 52047; October 6, 1997;
column three; paragraph three; line eight).
------------------------------------------------------------------------
Inches Inches
Size designation minimum maximum
diameter diameter
------------------------------------------------------------------------
Medium.............................................. 2\8/32\ 2\17/32\
Large............................................... 2\16/32\ 2\25/32\
Extra Large......................................... 2\24/32\
------------------------------------------------------------------------
These size designations and diameter ranges are the same as those
specified in Sec. 51.1859 of the standards. All tomatoes in the Medium
size designation are required to grade at least a U.S. No. 2, while
tomatoes in the larger size
[[Page 140]]
designations are required to grade at least a U.S. No. 3. Section
966.52 of the order provides authority for the establishment and
modification of regulations applicable to the handling of particular
sizes and size designations of tomatoes.
This rule increases the minimum diameter size requirement for
Florida tomatoes from 2\8/32\ inches to 2\9/32\ inches and makes
conforming changes to container marking requirements and the regulation
for special packed tomatoes. This rule also changes the size
designations Medium, Large, and Extra Large to numeric size
designations of 6 x 7, 6 x 6, and 5 x 6 (respectively), and increases
the diameter size ranges for the designated sizes. These size ranges
are different from those specified in Sec. 51.1859 of the standards. On
September 5, 1997, the Committee met and unanimously recommended these
changes. At the same meeting, the Committee recommended by a vote of 10
to 2 to eliminate shipments of U.S. No. 3 grade tomatoes from the
regulated area. That recommendation is being addressed in a separate
rulemaking action.
Based on an analysis of markets and demands of buyers, the
Committee believes that the increase in the minimum size will improve
the marketing of Florida tomatoes. By increasing the minimum size, the
tomatoes will be slightly larger and, thus, more mature when packed.
This follows recent industry trends to ship larger and more mature
tomatoes. New commercial tomato varieties also have resulted in larger
sized tomatoes being shipped in response to a strong consumer demand.
Because of this demand, production of larger tomatoes has been a
popular method of improving returns among producers as it also
increases total yields.
Also, the Committee recommended the increase in minimum size
requirements to improve the uniformity and appearance of tomato packs.
The slightly smaller tomatoes in the Medium packs increase the size
variability of the pack, and are more likely to be immature and have
less taste. The current minimum size of 2\8/32\ inches allows these
smaller tomatoes to be combined with more mature tomatoes, which lowers
the overall quality and, subsequently, the price of the pack. This has
resulted in complaints from buyers throughout the market.
In the mid-1980's, Dr. Jeffrey K. Brecht, at the University of
Florida, did a study of smaller tomatoes. According to his findings,
fully mature green tomatoes begin coloring within a few days of
harvesting. Since tomatoes are not easily identified by a surface
indicator (color) of full maturity in green fruit, pickers are forced
to rely on size rather than maturity when harvesting tomatoes. The
result is that tomatoes at the 2\8/32\ of an inch minimum diameter may
require two weeks or more to begin ripening. Attainment of the full
ripe stage requires on average a week to 10 days additional time.
Hence, the full ripening process can take as long as four weeks.
Tomatoes that take this long to ripen after harvest have been shown to
have poor taste. Increasing the minimum size to 2\9/32\ inches for
Medium tomatoes is expected to help reduce this problem. Also,
consumers are demanding a slightly larger tomato. Smaller tomatoes with
a less uniform pack have poor consumer acceptance, especially in chain
stores.
The increase in the minimum size from 2\8/32\ inches to 2\9/32\
inches is not expected to significantly affect the total number of
containers shipped. During the 1996-1997 season, of the 47,879,084
containers of 25 pound-equivalent-shipments, approximately 15 percent
or about 7,023,239 shipments of 25-pound-equivalents from Florida were
of the Medium size designation. The Medium size currently covers a
range of 2\8/32\ to 2\17/32\ inches or a range of about \9/32\ of an
inch. Increasing the minimum size to 2\9/32\ inch removes all tomatoes
that would have met the 2\8/32\ minimum size designation. The Medium
size designation currently covers a range of 2\8/32\ to 2\17/32\ inches
or a range of about \9/32\ of an inch. Removing \1/32\ inch from the
\9/32\ size range would eliminate about 10 percent of the size range.
Thus, if the size increase had been applied during the previous season,
about 700,000 25-pound equivalents would have been eliminated. Thus,
the size increase is expected to reduce total shipments by about 1.5
percent (700,000 25-pound equivalents divided by 47,879,084 25-pound
equivalents). Any of the tomatoes failing to meet the minimum size
requirements may be sold within the production area or shipped for
processing. In the proposed rule, the references in this paragraph to
25-pound equivalents were incorrectly printed in the Federal Register
as 25,000 pound equivalents (62 FR 52048; October 6, 1997; column two;
paragraph two; lines six and eight).
The Committee also recommended the following new designations and
tomato diameter size ranges:
------------------------------------------------------------------------
Inches Inches
Size designation minimum maximum
diameter diameter
------------------------------------------------------------------------
6 x 7 (Currently Medium).......................... 2\9/32\ 2\19/32\
6 x 6 (Currently Large)........................... 2\17/32\ 2\27/32\
5 x 6 (Currently Extra Large)..................... 2\25/32\ ........
------------------------------------------------------------------------
Prior to 1991, numeric size designations were used by Florida
handlers and marketers from other growing areas, both domestic and
foreign. The current standards and nomenclature size designations were
implemented in 1991, and were designed to provide a uniform basis for
marketing tomatoes. However, numeric size designation terminology has
continued to be used by Florida handlers and sellers from other
domestic and foreign growing areas in negotiating price and other terms
of trade, and buyers in the marketplace still routinely refer to the
size of tomatoes in a 25-pound bulk (loose pack) box by using the 6 x
7, 6 x 6, and 5 x 6 size designations, even though the box may be
marked Medium, Large, or Extra Large. Florida tomato handlers have
found that the difference in terminology has hindered their
negotiations with buyers, and adversely affected handler and producer
returns. Handlers believe that buyers tend to discount Florida tomatoes
because the buyers do not have confidence that the Medium, Large, and
Extra Large designations correctly correspond with the size
designations of 6 x 7, 6 x 6, and 5 x 6 currently used by other
tomato growing areas.
Florida handlers compete directly with tomatoes from Mexico.
Mexican packers generally market their smaller sized tomatoes in 3-
layer place-packs marked 6 x 6 or 6 x 7 (each box weighs about 30
pounds), and bulk (loose pack) boxes with the same numeric size
designations (each box weighs about 25 pounds). The larger sizes of
tomatoes from Mexico are generally marketed in 2-layer place-packs
marked as 5 x 6, 5 x 5, 4 x 5, or 4 x 4, each weighing between
21 and 24 pounds.
Many buyers in the marketplace purchase tomatoes from both Florida
and Mexico, depending on size availability and price, and the preferred
language in discussing price and other terms of sale and delivery is
numeric size or count, not nomenclature size designations. Reverting
back to a previously used numeric system will allow Florida handlers to
use numeric size designations that are familiar to both handlers and
buyers of Florida tomatoes, facilitate buyer negotiations,
[[Page 141]]
and allow Florida handlers to more effectively market their crop.
In spite of the harmonized marketing goals of 1991, each of the
growing areas have continued to market their tomatoes a bit
differently. The size designation change will enable the Florida tomato
industry to better meet marketplace needs.
This rule also increases the minimum and maximum diameter ranges of
the three size designations. The net increase for the maximum diameters
for the Medium (6 x 7) and Large (6 X 6) size designations will be 1/
32 inch.
This will result in a 2/3 x 's overlap in the maximum diameters in
these size designations to the next larger size. According to the
Committee, this will provide a more even distribution of tomato
shipments throughout the three size designations, which will enable
handlers to make better decisions on which size of tomatoes to pack.
For instance, tomatoes that measure at the very top end of the Medium
(6 x 7) size can either be packed with Medium (6 x 7) size tomatoes
or as a smaller tomato with Large (6 x 6) size tomatoes. The same
increased flexibility will exist for Large (6 x 6) size tomatoes
packed with Extra Large (5 x 6) size tomatoes. Such packing decisions
could depend on specific buyer or market demands, on general crop size,
and on condition of the tomatoes and prices on each day of packing.
Currently, Florida producers are growing tomato varieties which
tend to size larger and tend to be oblong. The new diameter size ranges
for the three size designations also are intended to accommodate the
sizing of these varieties of tomatoes and foster the shipment of larger
tomatoes, which the marketplace desires.
Due to strong consumer demand during the 1996-1997 season,
approximately 80 percent of the Florida tomatoes sold were in the Extra
Large (5 x 6) size designation. This rule will increase the minimum
diameter of the Extra Large (5 x 6) size designation to 2-25/32
inches from 2\24/32\ inches with no maximum size limit. Increasing the
minimum diameter size of this designation by \1/32\ inch for Extra
Large (5 x 6) size packs will reduce the number of smaller sized
tomatoes packed in that size designation. Hence, this is expected to
decrease size variability and improve uniformity of this premium pack.
Thus, improvements in this size category are expected to further
enhance consumer demand, resulting in increased returns to producers.
Also, a study conducted by Dr. John J. VanSickle at the University
of Florida estimates that increases in the minimum diameters for each
size category would result in an increase in the overall prices
received for Florida tomatoes. The study indicates that if increasing
the size minimums shifted 1 percent of the smallest Extra Large (5 x
6) size tomatoes into the smaller size categories, then prices for
Extra Large (5 x 6) size would increase by .25 percent, the price of
Large (6 x 6) size tomatoes by .15 percent, and the price of Medium
(6 x 7) size tomatoes by .07 percent. The increase in price would
occur because of the redistribution of larger sized tomatoes into the
smaller size designations, which is a response to consumer demand for a
more consistent pack and slightly larger tomatoes.
These changes are expected to increase returns to producers by
improving size consistency, quality, and maturity; and, thus, encourage
repeat purchases from consumers. The new size designations will allow
handlers to respond better to market preferences, which is expected to
benefit producers and handlers of Florida tomatoes.
This rule also makes conforming changes to two paragraphs in
Sec. 966.323. The first change in Sec. 966.323 (a)(2)(iii) concerns
container marking requirements. The references to the nomenclature
(Medium, Large, and Extra Large) size designations are replaced with
the new numeric size designations. The second change is in Sec. 966.323
(d)(3) for special packed tomatoes. The reference to the 2-8/32 inch
minimum size is replaced with the new 2-9/32 inch minimum size.
Mexico is the largest exporter of tomatoes into the United States.
Small quantities are imported from the Caribbean Basin. On average,
Mexico represents over 99 percent of all tomato imports during the
period (October 10 through June 15) when Florida and import
requirements apply.
Section 8e of the Act requires that when certain domestically
produced commodities, including tomatoes, are regulated under a Federal
marketing order, imports of that commodity must meet the same or
comparable grade, size, quality, or maturity requirements for the
domestically produced commodity. The current import regulations are
specified in 7 CFR 980.212. Similar to the order, the regulations apply
during the period October 10 through June 15 when the Florida handling
requirements are in effect. Because this rule increases the minimum
size for domestic tomato shipments, this increase will be applicable to
imported tomatoes beginning with the effective date of this rule.
Florida tomatoes must be packed in accordance with three specified
size designations, and tomatoes falling into different size
designations may not be commingled in a single container. These pack
restrictions do not apply to imported tomatoes. Because pack
requirements do not apply, different sizes of imported tomatoes may be
commingled in the same container.
However, the Florida handling requirements also specify that
tomatoes that are designated as Medium (6 X 7) size must meet a U.S.
No. 2 grade, while the larger sizes are required to meet a U.S. No. 3
grade. The more stringent grade requirements are applied to the Medium
(6 X 7) size designation because of quality problems with smaller
tomatoes.
Similarly, current import requirements specify that all lots with a
minimum diameter of 2-17/32 inches and larger shall meet at least a
U.S. No. 3 grade. All other tomatoes shall meet at least a U.S. No. 2
grade. Any lot with more than 10 percent of its tomatoes less than 2-
17/32 inches in diameter is required to grade at least U.S. No. 2. This
rule will change these requirements to reflect the changes to the
Florida handling requirements by requiring that all lots with a minimum
diameter of 2-19/32 inches and larger meet at least a U.S. No. 3 grade.
All other tomatoes will need to meet at least a U.S. No. 2 grade. Any
lot with more than 10 percent of its tomatoes less than 2-19/32 inches
in diameter will have to grade at least U.S. No. 2.
These changes are expected to benefit the marketers of both Florida
and imported tomatoes by providing consumers with better quality,
higher maturity, and slightly larger tomatoes. Prior to the issuance of
the proposed rule, the Department had contacted a few tomato importers
concerning imports. The importers indicated that they are importing
larger sizes of tomatoes. The Department believes that the increase in
minimum size would not limit the quantity of imported tomatoes or place
an undue burden on importers of Mexican tomatoes. The expected increase
in customer satisfaction is expected to benefit all tomato importers
regardless of the size of their operation or business. The size
increase is the only requirement implemented for Florida which applies
to imported tomatoes. The exporters and importers of foreign produced
tomatoes will be able to continue marketing their tomatoes as they have
in all other respects, and in meeting buyer needs.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS)
[[Page 142]]
has considered the economic impact of this action on small entities.
Accordingly, the 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. Import regulations issued under
the Act are based on those established under Federal marketing orders
which regulate the handling of domestically produced products.
There are approximately 65 handlers of Florida tomatoes who are
subject to regulation under the order and approximately 75 tomato
producers in the regulated area. In addition, at least 170 importers of
tomatoes are subject to import regulations and will be affected by this
rule. Small agricultural service firms have been defined by the Small
Business Administration (SBA)(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.
Committee data indicates that approximately 30 percent of the
Florida handlers handle over 90 percent of the total volume of Florida
fresh tomatoes marketed. Based on this information, shipment
information for the 1996-97 season, and the 1996-97 season average
price of $7.97 per 25-pound equivalent carton, the majority of handlers
would be classified as small entities as defined by the SBA. The
majority of producers of Florida tomatoes may be classified as small
entities. The Department also believes that most importers may be
classified as small entities. In the proposed rule, the reference to
25-pound equivalent carton referred to in this paragraph was
incorrectly printed in the Federal Register as 25,000 pound equivalent
carton (62 FR 52049; October 6, 1997; column three; paragraph two; line
seven).
Under Sec. 966.52 of the Florida tomato marketing order, the
Committee has authority to recommend increases in the minimum size
requirement and changes in the size designations for Florida tomatoes
grown in the defined production area and handled under the order. This
rule, unanimously recommended by the Committee at its September 5,
1997, meeting, will increase the minimum size, change size designations
and corresponding diameter size ranges. As provided under section 8e of
the Act, the increase in the minimum size diameter requirement applies
to imported tomatoes.
Based on analysis of markets and demands of buyers, the Committee
recommended increasing the minimum size from 2-\8/32\ inches to 2-\9/
32\ inches in diameter and the corresponding minimum sizes for the
other two size designations. The Committee believes these size
increases will improve the marketing of Florida tomatoes. By increasing
the minimum sizes, the tomatoes in each size range will be slightly
larger and, thus, more mature when packed. This follows recent industry
trends to ship larger and more mature tomatoes. Current trends in
cultural practices and new commercial tomato varieties also have
resulted in larger sized tomatoes being shipped in response to consumer
demand for such tomatoes. Because of this demand, production of larger
tomatoes has been a popular method of improving returns among producers
as it also increases total yields and total pounds. While yields
increase with larger fruit, the labor costs associated with picking
these tomatoes remains fairly constant because producers pick
relatively the same number of fruit.
The change in the minimum size was recommended because demand for
larger tomatoes has increased over the last five years. This in part is
due to the fact that size continues to be a major influence on price.
According to Dr. John J. VanSickle of the University of Florida, the
percent of Extra Large (5 x 6) size tomatoes shipped from Florida has
increased steadily from 43.2 percent of total shipments since 1992-93
to 50 percent of total shipments in 1996-1997 for mature green
tomatoes. Mature green tomatoes are green but are fully developed and
will continue to ripen fully. Meanwhile, the percent of tomatoes from
Florida marketed in the Extra Large (5 x 6) size for vine ripe tomatoes
has increased from 66.6 percent to 79.2 percent of total shipments.
Vine ripe tomatoes have started to break in color from green to
tannish-yellow, pink, or red.
The increase in the minimum size from 2-\8/32\ inches to 2-\9/32\
inches is not expected to affect significantly the total number of
Florida shipments. During the 1996-1997 season, of the 47,879,084
shipments of 25-pound equivalents, approximately 15 percent or about
7,023,239 shipments of 25-pound equivalents from Florida were in the
minimum size designation of Medium. The Medium size currently covers a
range of 2-\8/32\ to 2-\17/32\ inches or a range of about \9/32\ inch.
Increasing the minimum size to 2-\9/32\ inch removes tomatoes that
would have met the 2-\8/32\ inch minimum size designation. Removing \1/
32\ inch from the \9/32\ inch size range decreases the size range by
about 10 percent. If the size increase had applied during the previous
season, shipments from that range would have been reduced by about
700,000 25-pound equivalents. Thus, the size increase is expected to
reduce total shipments by approximately 1.5 percent (700,000 25-pound
equivalents divided by 47,879,084 25-pound equivalents). Because
Florida tomatoes are sizing larger than in the past, the increase in
size requirements is expected to have a minimal impact on total
shipments. Also, any of these smaller tomatoes may be sold within the
production area or shipped for processing. In the proposed rule, the
references to 25-pound equivalents in this paragraph were incorrectly
printed as 25,000 pound equivalents (62 FR 52050; October 6, 1997;
column one; paragraph two; lines six and eight).
Also, this rule changes the size designations from Medium, Large,
and Extra Large to numeric size designations of 6 x 7, 6 x 6, and
5 x 6. In addition, the rule slightly increases the diameter size
ranges for these designated sizes.
The Committee stated that, absent a change in the regulations, an
erosion of market confidence could occur from not meeting buyer needs.
This could result in reduced shipments and reduced producer income.
Direct costs associated with this rule will be the purchase of new
sizing belts. Sizing belts convey and size fruit during the packing
process. Depending on the amount of use, sizing belts can last a season
or may need to be replaced two to three times a season. Estimated
prices associated with these purchases could range from $450.00 for a
small handler to $19,000 for very large handlers. While there are
short-term costs associated with the new sizing designations, the
benefits are expected to outweigh the costs. Moreover, changing sizing
belts is a routine action since they have to be regularly replaced
depending on use.
A study conducted by Dr. John J. VanSickle at the University of
Florida estimates that size increases in the minimum diameters for each
size category would result in an increase in the overall prices
received for Florida tomatoes and better returns to producers. The
study indicates that increasing the size minimums would shift some of
the smallest Extra Large (5 x 6) size tomatoes into the smaller size
categories. A shift of 1 percent into the
[[Page 143]]
smaller size categories would increase the prices for Extra Large
(5 x 6) size tomatoes by .25 percent, the price of Large (6 x 6) size
tomatoes by .15 percent, and the price of Medium (6 x 7) size tomatoes
by .07 percent. The increase in price would occur in response to
consumer demand for packs with slightly larger tomatoes. The costs to
the industry associated with the minimum size and size designation
changes would include purchases of new equipment and adjustments to
operate under the new requirements. These costs are expected to be
minimal relative to the benefits expected, and in relation to normal
operating costs and procedures.
The new numeric size designations should not have a negative impact
on any handler regardless of size. This is expected to help Florida
handlers respond to market and consumer demand for larger sized
tomatoes. The Committee believes that these designations are the only
practical means available to the Florida industry for identifying its
larger sized tomatoes. The standards specify dimensions for each of the
nomenclature designations currently used, but they are smaller than the
Committee desires. Hence, the nomenclature designations are not as
useful to Florida handlers as the new size designations. The new size
designations should benefit both small and large businesses in the
industry by helping the Florida industry more effectively satisfy buyer
needs for larger tomatoes.
This rule may impose some additional costs on handlers, and
producers. However, these costs are expected to be minimal, and would
be offset by the benefits of the final rule. This rule is expected to
impact similarly importers of tomatoes, as far as the slight increase
in minimum size is concerned. The Committee believes that these
modifications will benefit consumers, producers, handlers, and
importers. The benefits of this rule are not expected to be
disproportionately greater or lesser for small entities than for large
entities.
The Committee discussed alternatives to this recommendation,
including leaving the regulations as currently issued. All Committee
members agreed that some change to the size designations was necessary
to improve pack appearance and compete in the present market. The
amount of change became the main concern, with a portion of the
Committee favoring a larger size increase and another portion favoring
small incremental moves over a period of time. The Committee
recommended a compromise to allow individual packing houses leeway to
implement the amount of change through a \2/32\ inch overlap in sizes.
The information on imports and shipments contained in the following
two paragraphs is from AMS Market New Branch data.
Mexico is the largest exporter of tomatoes to the United States.
Over the last 10 years, Mexican exports to the United States averaged
32,527 containers of 25,000-pound equivalents per season (October 5-
July 5) and comprised about 99 percent of all imported tomatoes to the
United States during that time. Total imports during that period
averaged 32,752 containers of 25,000-pound equivalents (October 5-July
5). Some of the imports from Mexico may have been transhipped to
Canada.
Domestic shipments for the past 10 years averaged 108,577
containers of 25,000-pound equivalents (October 5-July 5). Florida
shipments averaged 52,977 containers of 25,000-pound equivalents or
approximately 48 percent of the total shipments for the same period. In
the proposed rule, the reference to 25,000 pound equivalents in this
paragraph was incorrectly printed as 25 pound equivalents (62 FR 52050;
October 6, 1997; column three; paragraph one; line nineteen).
These changes are expected to benefit the marketers of both Florida
and imported tomatoes by providing consumers with better quality,
higher maturity, and slightly larger tomatoes. Prior to the issuance of
the proposed rule, the Department had contacted a few tomato importers
concerning imports. The importers indicated that they were importing
larger sizes of tomatoes. The Department believes that the size
increase would not limit the quantity of imported tomatoes or place an
undue burden on importers of Mexican tomatoes. The improvement in
customer satisfaction is expected to benefit all tomato importers
regardless of size.
This action will not impose any additional reporting or record
keeping requirements on either small or large handlers. As with all
Federal marketing order programs, reports and forms are reviewed
periodically to reduce information requirements and duplication by
industry and public sector agencies.
As noted in the initial regulatory flexibility analysis, the
Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this final rule.
In addition, the Committee's September 5, 1997, meeting was
publicized widely throughout the Florida tomato industry and all
interested persons were invited to attend the meeting and participate
in Committee deliberations on all issues. The Committee also discussed
these issues in May of 1997 and buyers and sellers of Florida tomatoes
were in attendance. Like all Committee meetings, the May and September
5, 1997, meetings were public meetings and all entities, both large and
small, were able to express views on this issue. Finally, interested
persons were invited to submit information on the regulatory and
informational impacts of this action on small businesses. No such
comments were received.
The proposed rule regarding this action was published in the
Federal Register on October 6, 1997 (62 FR 52047). Interested persons
were invited to submit written comments until October 16, 1997. Copies
of the proposed rule were faxed and mailed to all known interested
parties. Also, the rule was made available through the Internet by the
Office of the Federal Register.
A notice reopening the comment period until November 5, 1997, was
published in the October 22, 1997, issue of the Federal Register (62 FR
54809).
A total of 24 comments were received. Of this total, two comments
requested that the original comment period for the proposed rule be
reopened.
Seven favorable comments were received. Two of these comments were
from a voluntary agricultural cooperative association of Florida tomato
producers representing about 90 percent of the total volume of tomatoes
produced under the marketing order each year. Individual comments also
were received from an agricultural trade organization representing
growers and handlers of commercial varieties of tomatoes throughout the
State; and an association representing about 220 tomato and other
winter vegetable growers and agricultural suppliers in the State of
Florida. Two favorable comments were submitted by the Committee. One of
the two Committee comments reaffirmed the need for the proposed
changes, and pointed out several typographical errors in the
supplementary information section of the proposed rule that needed
correction. The corrections have been made in the final rule. The
second Committee comment, in addition to reaffirming the need for the
proposed changes, commented on assertions made by two opponents and a
comment requesting more time to comment. In its second comment, the
Committee contended that the claims of the opponents and the request
for more time to comment did not have merit. A
[[Page 144]]
comment was received from The Commissioner of the Florida Department of
Agriculture and Consumer Services which supported the proposed changes
and requested that the typographical errors pointed out by the
Committee be corrected.
Fifteen opposition comments were received. These comments were from
a trade association representing over 100 distributors, shippers,
brokers and affiliated companies which are directly involved with the
receipt, handling, and sale of perishable agricultural commodities
grown in Mexico; growers and shippers of Mexican tomatoes; firms
involved in the distribution and shipment of Mexican tomatoes; and a
customs broker. Other opposition commenters included a grower, handler,
and shipper of domestic and imported tomatoes, a national confederation
of Mexican vegetable growers, and a law firm representing a
confederation of Mexican producers and packers (its members account for
the majority of tomatoes imported into the United States from Mexico).
Most of the opposition comments expressed support for the efforts
of the Florida Tomato Committee to improve quality in U.S. markets.
These commenters indicated that they opposed the proposed rule unless
certain modifications were made. While they were opposed to those parts
of the proposal concerning size designations, they requested inclusion
of a 60-day period from publication of the final rule to its effective
date for the changes to the minimum size requirements.
All of the negative comments opposed the use of the proposed new
numeric size designations. The commenters indicated that the new size
designations are different than size designations used in the industry.
Several commenters stated that Mexico generally ships its larger
tomatoes in place packs and that the boxes are marked with 5 x 5,
5 x 4, 4 x 4, or 3 x 4 size designations, while the largest size
designation proposed for Florida tomatoes was 5 x 6 with a minimum
diameter of 2 \25/32\ inch and no maximum diameter. The commenters
believed this would lead to confusion in the marketplace.
A comment from a grower, handler, and shipper of domestic and
imported tomatoes objected to the use of numeric size designations in
shipping tomatoes in 25-pound bulk packs. The commenter believed that
nomenclature designations (i.e., Medium, Large, and Extra Large),
should be used for bulk packages as defined in the current standards.
The commenter indicated that numeric designations were more appropriate
for place-packed tomatoes.
Several of the opposing commenters explained that handlers and
repackers of imported tomatoes use numeric terms like 6 x 7, 6 x 6,
5 x 6, 5 x 5, 4 x 5, 4 x 4, and 3 x 4 to describe the configuration
(rows) of place-packed tomatoes in the boxes used. A box of 6 x 6
tomatoes includes 36 tomatoes in each layer, while a box of 4 x 's
includes 16 tomatoes in each layer. There are slight size variations to
assure a tight fit.
According to two of the opposing commenters, about 62.4 percent of
Mexican place-packed tomatoes shipped this past season were larger than
the largest Florida proposed size diameter; i.e., larger than 2 \25/32\
inch minimum diameter. The commenters further contended that if the
proposal is implemented, Mexican growers will be forced to label their
larger tomato packs with a 5 6 size designation in addition to their
own designations; i.e., 3 x 4, 4 x 4, 4 x 5, and 5 x 5.
The commenters stated that such dual markings would be needed to
distinguish Mexico's premium packs from Florida's proposed 5 x 6 pack.
The commenters contended that these markings will confuse customers and
will dilute the value Mexican growers receive currently for their
largest sizes.
The Department has thoroughly analyzed all of these comments in the
context of how tomatoes are marketed in the United States. Most
tomatoes from Florida are marketed as mature greens in 25-pound bulk
(loose pack) boxes. Florida handlers negotiate price and other terms of
sale and delivery using both nomenclature size designations (Medium,
Large, and Extra Large) and numeric size designations. Many buyers in
the marketplace still routinely refer to the size in a 25-pound bulk
(loose pack) box of tomatoes by using 5 x 6, 6 x 6, and 6 x 7
designations. Even when the boxes are marked with the Medium, Large, or
Extra Large size designations, buyers frequently use the numeric size
information in negotiating the purchase of tomatoes. The proposed
numeric size designations will allow the Florida industry to adopt
trading terminology that is in general use by handlers and buyers of
Florida tomatoes.
Some mature green tomatoes are shipped out of Mexico, but most of
the shipments are vine ripe tomatoes. Mexican packers generally market
smaller sized tomatoes in 3-layer place-packs marked 6 x 6 or 6 x 7 in
boxes weighing about 30 pounds. The larger sizes of tomatoes from
Mexico generally are marketed in 2-layer place-packs marked as 5 x 6,
5 x 5, 4 x 5, and 4 x 4, weighing between 21 and 24 pounds. Some
Mexican packers use the Medium, Large, and Extra Large size
designations in describing the size of the tomatoes in bulk boxes,
while others use numeric size designations for both packs. Buyers in
the marketplace understand these marketing practices, and use this
information in making their purchase decisions.
Many buyers in the marketplace purchase tomatoes from both Florida
and Mexico to meet their needs depending on size availability and
price. These buyers customarily use numeric size designations in making
their purchase decisions.
Thus, the Department believes that the buyers of Florida and
Mexican tomatoes understand the differences in tomato size designations
between shipments from Florida and Mexico, and that the proposed
designations should not result in marketplace confusion or problems
with market pricing.
The different tomato growing areas have been marketing their
tomatoes in the way they believe helps them best market their product.
These differing marketing schemes are not harmonized even within a
particular growing area. The proposed numeric size designations are
defined in terms of specific minimum and maximum diameter ranges and
should not result in marketplace confusion. Further, the new numeric
size designations do not have to be adopted by importers of Mexican
tomatoes. These importers can continue to use whatever size designation
markings they believe are needed to help them more effectively compete
in the marketplace. Any such markings should be consistent with
applicable laws or regulations including those that apply to accuracy
in description of product.
Also, the proposed numeric size designations do not affect packers
or repackers of imported tomatoes. Packers and repackers of imported
tomatoes are free to market their tomatoes as they may believe
appropriate, to segregate their larger-sized tomatoes into as many
subsizes as they desire to satisfy their customers, and to
differentiate their sizes from Florida packs as they do now. Again,
such markings of tomatoes should be consistent with applicable laws and
regulations.
Commenters also stated that, if packers in Mexico or packers in
wholesale markets wished to place-pack tomatoes according to the
traditional place-pack-count designations using the proposed size
ranges, the tomatoes would be too large to fit into the boxes currently
used. The commenters asserted that as a result, new boxes would need to
be designed for place-packed tomatoes if other segments of the
[[Page 145]]
industry wished to harmonize with the new Florida sizes.
This action increases the minimum diameter for each of the size
designations by only \1/32\ of an inch and continues the 10 percent
tolerance for undersize and oversize tomatoes. Given the diameter range
of sizes allowable in each specific size designation (i.e., 6 x 7,
6 x 6, 5 x 6), packers and repackers of tomatoes should not have any
problems packing tomatoes in the box sizes currently used.
Some commenters also contended that the proposed \2/32\ inch
overlap between sizes (currently \1/32\ inch) will allow Florida
handlers to pack smaller-sized tomatoes in the next bigger size
designation in search of a better market price. The Committee
recommended increases in the minimum and maximum diameters for each of
the three recommended size designations. For the 6 X 7 (currently
Medium) size, the minimum diameter was increased from 2 \8/32\ to 2 \9/
32\ inches, and the maximum diameter was increased from 2 \17/32\ to 2
\19/32\ inches; for the 6 x 6 (currently Large) size, the minimum
diameter was increased from 2 \16/32\ to 2 \17/32\ inches, and the
maximum diameter was increased from 2 \25/32\ to 2 \27/32\ inches; and
for the 5 x 6 (currently Extra Large) size, the minimum diameter was
increased from 2 \24/32\ to 2 \25/32\ inches, with no maximum diameter
specified. These changes and the \2/32\'s inch overlap are intended to
facilitate the placement of slightly larger tomatoes into the next
smaller-size designation, and the placement of slightly larger sizes
into the next bigger-size designation.
As indicated earlier, the Committee believes that the \2/32\ inch
overlap will provide a more even distribution of tomato shipments
throughout the three size designations, and that this will enable
handlers to make better decisions on which size of tomatoes to pack.
For instance, tomatoes at the high end of the Medium (6 x 7) size can
either be packed with Medium (6 x 7) sized tomatoes or with Large
(6 x 6) sized tomatoes. The same increased flexibility would exist for
tomatoes packed at the high end of the Large (6 x 6) size. Such
tomatoes could be packed as Large (6 x 6) sized or packed as Extra
Large (5 x 6) sized tomatoes. The end result, however, should be
slightly larger tomatoes in each of the size categories.
Another commenter contended that a proposed numeric size
designation means nothing when tomatoes are ``loose packed;'' i.e., in
25-pound bulk boxes. This is not correct. Under the proposal, minimum
and maximum diameters for each numeric size designation are specified
and thus, apply to volume filled or ``loose packed'' tomatoes. The
diameter ranges provide handlers with flexibility to meet the needs of
each of their buyers.
One of the opposing commenters suggested that if Florida wished to
use non-standard size designations and size dimensions (i.e.,
designations and dimensions different than those specified in the U.S.
standards) for tomatoes, it should use other descriptive terms like
Regular, Jumbo, and Colossal to replace Medium, Large, and Extra Large.
While alternative size designations were considered, the Committee's
best possible recommendation was to adopt the proposed numeric system.
In discussing this issue, the Committee was of the view that this
change to the size designations was necessary to improve pack
appearance and compete in the present marketplace.
Two opposition commenters complained about the lack of time
provided to the Mexican industry to examine the packing and marketing
effects of the proposed size increase. They indicated that if the new
sizes no longer fit in the boxes used for place packing tomatoes,
Mexican growers will be forced to incur very large expenses. These
expenses will be both from the loss of existing inventory of boxes and
from having to invest in all new boxes. The commenters further stated
that, over the past several years, the industry largely has succeeded
in standardizing the size of boxes to best fit them on pallets.
According to the commenters, increasing the size of the boxes would
undermine this effort, resulting in lost space on every pallet and
increased transportation costs for every grower. As explained earlier,
Mexican packers market a vast array of pack sizes in several different
boxes with different net weights. Hence, the \1/32\ inch increase in
the minimum size requirement is not expected to require new boxes for
place packing.
Although the changes to the size designations for Florida tomatoes
will not apply to imported tomatoes, the following is intended to
clarify how the new requirements might be used by Florida handlers.
Under the proposal, each of the minimum diameters for each size
designation are increased by only \1/32\ inch and the maximum diameters
for each size designation are increased by only \2/32\ inch. Thus, it
appears that there is enough flexibility within each size designation
to avoid the need for changing boxes. For example, if a buyer desires a
certain number of tomatoes in each 25-pound box, the diameter size
ranges within each of the numeric sizes are broad enough so that the
handler could meet that buyer's needs. Moreover, the current tolerance
of 10 percent for offsize within each size designation will continue in
effect and provide handlers additional flexibility in meeting buyer
needs, and in avoiding the need for new boxes.
Two commenters objected to the \1/32\ inch size increase because
Mexican growers and handlers will have to change their sizing belts and
incur an unanticipated expense for new belts. Florida growers and
handlers also will incur such costs. However, the Florida industry
believes that the expected improvement in quality in the marketplace
will result in benefits far in excess of the costs for new sizing
belts. Moreover, changing sizing belts is a routine action since they
have to be replaced on a regular basis depending on the amount of
usage. Obviously, the sizing belts last longer with limited use.
Only the minimum size requirement will apply to importers of
Mexican tomatoes. Thus, the packers of imported tomatoes only will need
to buy enough sizing belts to ensure that their tomatoes meet the
minimum size and not the ranges specified in the Florida size
designations. The Department understands that, in most cases, this will
require only one belt per packing line to be purchased.
One commenter also requested that an additional 60 days be added to
the comment period to allow the parties most affected by the rule to
comment completely on the impact it will have. A total of 30 days has
been provided. The Department believes that there has been sufficient
time to comment, especially in view of the positions and views
discussed in the comments received, whether in favor or opposed to the
proposed rule.
The Committee made its recommendations for change at a meeting held
on September 5, 1997. These changes were unanimously recommended. As
stated earlier, the proposed size rule appeared in the Federal Register
on October 6, 1997, with a comment period ending on October 16, 1997.
Two comments were received requesting that the original comment period
for the proposed rule be reopened. They were of the view that more time
was needed to review and analyze the proposed changes and also raised
NAFTA concerns. The Department did extend the comment period to
November 5, 1997, in accordance with NAFTA and to allow more time for
review and evaluation.
Many commenters also requested a 60-day delay in the effective date
of the import regulation change to allow
[[Page 146]]
adequate time for all foreign producers and handlers of foreign
tomatoes to comply with the minimum size increase. One commenter
requested that Mexican growers be given until the beginning of the
1998-99 season to comply if the minimum sizes are changed. The
Department has carefully reviewed this issue.
While both Florida tomato handlers and importers will need time to
order new sizing belts and adjust their equipment to meet the increased
minimum size requirements, we understand that many of the Florida
handlers are or will be ready to comply with the increased minimum size
requirement. However, we further understand that many of the packers of
Mexican tomatoes may need more time to comply with the size
requirement. Most of the opposition comments requested an additional 60
days after the publication of the final rule to comply with the minimum
size requirement.
The Department has decided to provide sufficient time for the
Florida and import tomato industries to comply with the minimum size
requirements. While a 60-day period would not be reasonable for the
domestic industry especially since the Florida shipping season is
already underway, a 30-day effective date from publication of the final
rule is reasonable and consistent with the provisions of the Act. A 30-
day period will allow both the domestic and imported tomato industries
sufficient time to purchase sizing belts and also ship commodity that
is already picked and packed.
The Department has contacted the three belt manufacturers to
determine belt availability and delivery schedules. Based on this
information, the Department has decided to postpone the effective date
of this action to give Florida tomato handlers and Mexican tomato
packers additional time to obtain sizing belts. The effective date is
February 4, 1998.
In view of all the foregoing, the Department has concluded that the
changes as proposed will advance the interests of the Florida, other
domestic, and foreign tomato industries and should be implemented.
In accordance with section 8e of the Act, the United States Trade
Representative has concurred with the issuance of this final rule.
After consideration of all relevant matter presented, including the
information and recommendation submitted by the Committee and other
available information, the comments received, 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 Parts 966 and 980
Marketing agreements, Reporting and record keeping requirements,
Tomatoes.
For the reasons set forth in the preamble, 7 CFR parts 966 and 980
are amended as follows:
PART 966--TOMATOES GROWN IN FLORIDA
1. The authority citation for 7 CFR part 966 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 966.323 is amended by revising paragraphs
(a)(1),(a)(2)(i) and the table immediately following it, (a)(2)(iii),
and (d)(3) to read as follows:
Sec. 966.323 Handling regulation.
* * * * *
(a) Grade, size, container, and inspection requirements. (1) Grade.
Tomatoes shall be graded and meet the requirements specified for U.S.
No. 1, U.S. Combination, U.S. No. 2, or U.S. No. 3, of the U.S.
Standards for Grades of Fresh Tomatoes, except that all shipments of 6
x 7 size tomatoes must grade U.S. No. 2 or better. When not more than
15 percent of the tomatoes in any lot fail to meet the requirements of
U.S. No. 1 grade and not more than one-third of this 15 percent (or 5
percent) are comprised of defects causing very serious damage including
not more than 1 percent of tomatoes which are soft or affected by
decay, such tomatoes may be shipped and designated as at least 85
percent U.S. No. 1 grade.
(2) Size. (i) All tomatoes packed by a registered handler shall be
at least 2\9/32\ inches in diameter and shall be sized with proper
equipment in one or more of the following ranges of diameters. Tomatoes
shipped outside the regulated area shall also be sized with proper
equipment in one or more of the following ranges of diameters.
Measurements of diameters shall be in accordance with the methods
prescribed in Sec. 51.1859 of the U.S. Standards for Grades of Fresh
Tomatoes.
------------------------------------------------------------------------
Inches Inches
Size designation minimum maximum
diameter diameter
------------------------------------------------------------------------
6 X 7............................................... 2\9/32\ 2\19/32\
6 X 6............................................... 2\17/32\ 2\27/32\
5 X 6............................................... 2\25/32\
------------------------------------------------------------------------
* * * * *
(iii) Only 6 x 7, 6 x 6, or 5 x 6, may be used to indicate
the above listed size designations or containers of tomatoes.
* * * * *
(d) * * *
(3) For special packed tomatoes. Tomatoes which met the inspection
requirements of paragraph (a)(4) of this section which are resorted,
regraded, and repacked by a handler who has been designated as a
``Certified Tomato Repacker'' by the committee are exempt from:
(i) The tomato grade classifications of paragraph (a)(1) of this
section;
(ii) The size classifications of paragraph (a)(2) of this section,
except that the tomatoes shall be at least 2-9/32 inches in diameter;
and
(iii) The container weight requirements of paragraph (a)(3) of this
section.
* * * * *
PART 980--VEGETABLES; IMPORT REGULATIONS
3. Section 980.212 is amended by revising paragraph (b)(1) to read
as follows:
Sec. 980.212 Import regulations; tomatoes.
* * * * *
(b) * * *
(1) From October 10 through June 15 of each season, tomatoes
offered for importation shall be at least 2-9/32 inches in diameter.
Not more than 10 percent, by count, in any lot may be smaller than the
minimum specified diameter. All lots with a minimum diameter of 2\19/
32\ inches and larger shall be at least U.S. No. 3 grade. All other
tomatoes shall be at least U.S. No. 2 grade. Any lot with more than 10
percent of its tomatoes less than 2\19/32\ inches in diameter shall
grade at least U.S. No. 2.
* * * * *
Dated: December 30, 1997.
Sharon Bomer Lauritsen,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 97-34231 Filed 12-31-97; 8:45 am]
BILLING CODE 3410-02-P
