[Federal Register Volume 63, Number 46 (Tuesday, March 10, 1998)]
[Rules and Regulations]
[Pages 11585-11589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6107]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[FV98-989-1 IFR]
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: Interim final rule with request for comments.
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SUMMARY: This rule establishes 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.
DATES: Effective August 1, 1997, through July 31, 1998. Comments
received by May 11, 1998, will be considered prior to issuance of a
final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this rule. Comments must be sent to the Docket Clerk, Fruit
and Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456,
Washington, DC 20090-6456; Fax: (202) 205-6632. All comments should
reference the docket number and the date and page number of this issue
of the Federal Register and will be made available for public
inspection in the Office of the Docket Clerk during regular business
hours.
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 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. 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 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
[[Page 11586]]
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 establishes 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 computer
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 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.
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
[[Page 11587]]
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 will be met for Naturals and Zantes by the
establishment of final percentages which release 100 percent of the
trade demand and the offer 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 will be made available to
handlers later in 1998 at which time about another 31,000 tons of
reserve Naturals will be 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 initial 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 establishes
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.
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
[[Page 11588]]
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 established by this rule 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. 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. Finally, interested persons are invited to
submit information on the regulatory and informational impacts of this
action on small businesses.
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.
After consideration of all relevant material presented, including
the Committee's recommendation, and other information, it is found that
this interim final rule, as hereinafter set forth, will tend to
effectuate the declared policy of the Act.
This rule invites comments for a 60-day period on the establishment
of final volume regulation percentages for 1997-98 crop Natural and
Zante raisins covered under the order. All comments received within the
comment period will be considered prior to finalization of this rule.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because: (1) The relevant provisions of this part require that
the percentages designated herein for the 1997-98 crop year apply to
all Natural and Zante raisins acquired from the beginning of that crop
year; (2) handlers are currently
[[Page 11589]]
marketing 1997-98 crop Natural and Zante raisins and this action should
be taken promptly to achieve the intended purpose of making the full
trade demand available to handlers; (3) handlers are aware of this
action, which the Committee unanimously recommended at an open meeting,
and need no additional time to comply with these percentages; and (4)
this interim final rule provides a 60-day comment period and any
comments received will be considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements, Raisins, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 989 is
amended as follows:
PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA
1. The authority citation for 7 CFR part 989 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. Section 989.251 is added to Subpart--Supplementary Regulations
to read as follows:
Note: This section will not appear in the annual Code of Federal
Regulations.
Sec. 989.251 Final free and reserve percentages for the 1997-98 crop
year.
The final percentages for standard Natural (sun-dried) Seedless and
Zante Currant raisins acquired by handlers during the crop year
beginning on August 1, 1997, which shall be free tonnage and reserve
tonnage, respectively, are designated as follows:
------------------------------------------------------------------------
Free Reserve
Varietal type percentage percentage
------------------------------------------------------------------------
Natural (sun-dried) seedless.................... 66 34
Zante currant................................... 44 56
------------------------------------------------------------------------
Dated: March 4, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-6107 Filed 3-9-98; 8:45 am]
BILLING CODE 3410-02-P
