Hazelnuts Grown in Oregon and Washington; Establishment of Final Free and Restricted Percentages for the 2005-2006 Marketing Year, 1921-1926 [06-271]
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Federal Register / Vol. 71, No. 8 / Thursday, January 12, 2006 / Rules and Regulations
agricultural producers are defined as
those having annual receipts of less than
$750,000.
During the 2003–2004 marketing year
10,652,495 hundredweight of
Washington potatoes were inspected
under the order and sold into the fresh
market. Based on an estimated average
f.o.b. price of $7.45 per hundredweight,
the Committee estimates that 48
handlers, or about 94 percent, had
annual receipts of less than $6,000,000.
In addition, based on information
provided by the National Agricultural
Statistics Service, the average producer
price for Washington potatoes for the
2003 marketing year (the most recent
period that final statistics are available)
was $5.25 per hundredweight. The
average annual producer revenue for
each of the 272 Washington potato
producers is therefore calculated to be
approximately $205,609.
In view of the foregoing, the majority
of the Washington potato producers and
handlers may be classified as small
entities.
This rule continues in effect the
action that modified the pack
requirements to allow handlers to ship
U.S. No. 2 grade potatoes in cartons
provided the cartons are permanently
and conspicuously marked as to grade.
This change enables handlers to ship
U.S. No. 2 potatoes in cartons, thus
meeting customer demands and
maximizing producer returns.
The authority for the pack and
marking or labeling requirements is
provided in § 946.52 of the order (70 FR
41129; July 18, 2005). Section
946.336(c) of the order’s administrative
rules prescribes the pack requirements
for domestic and export shipments of
potatoes.
The Committee believes that the
recommendation should increase sales
of U.S. No. 2 grade potatoes. This action
is expected to further increase
shipments of U.S. No. 2 potatoes to the
food service industry, and help the
Washington potato industry benefit
from the increased growth in the food
service industry. These changes might
require the purchase of new equipment
to mark the cartons. However, these
costs will be minimal and would be
offset by the benefits of being able to
ship U.S. No. 2 grade potatoes in
cartons. The benefits of this rule are not
expected to be disproportionately
greater or lesser for small entities than
large entities.
The Committee discussed several
alternatives to this recommendation,
including not allowing U.S. No. 2 grade
potatoes to be shipped in cartons.
However, the Committee believed that it
was important to be able to respond to
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changing market conditions and meet
customer needs.
The Committee considered restricting
carton size, carton types, as well as the
size and location of the marking on the
carton. However, the Committee
decided not to specify size or type of
container or size and location of the
markings to allow handlers more
flexibility in marketing U.S. No. 2 grade
potatoes in cartons provided the cartons
were marked permanently and
conspicuously as to grade.
This rule will not impose any
additional reporting or recordkeeping
requirements on either small or large
potato handlers. As with all Federal
marketing order programs, reports and
forms are periodically reviewed to
reduce information requirements and
duplication by industry and public
sector agencies.
In addition, as noted in the initial
regulatory flexibility analysis, USDA
has not identified any relevant Federal
rules that duplicate, overlap or conflict
with this rule.
Further, the Committee’s July 26,
2005, meeting was widely publicized
throughout the Washington potato
industry and all interested persons were
invited to participate in Committee
deliberations on all issues. Like all
Committee meetings, all entities, both
large and small, were able to express
views on this issue.
An interim final rule concerning this
action was published in the Federal
Register on September 12, 2005. Copies
of the rule were mailed by Committee
staff to all Committee members and
Washington potato handlers. In
addition, the rule was made available
through the Internet by USDA and the
Office of the Federal Register. That rule
provided for a 60-day comment period
which ended November 14, 2005. No
comments were received.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
fv/moab.html. Any questions about the
compliance guide should be sent to Jay
Guerber at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
After consideration of all relevant
material presented, including the
Committee’s recommendation, and
other information, it is found that
finalizing the interim final rule, without
change, as published in the Federal
Register (70 FR 53723, September 12,
2005) will tend to effectuate the
declared policy of the Act.
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1921
List of Subjects in 7 CFR Part 946
Marketing agreements, Potatoes,
Reporting and recordkeeping
requirements.
PART 946—IRISH POTATOES GROWN
IN WASHINGTON
Accordingly, the interim final rule
amending 7 CFR part 946 which was
published at 70 FR 53723 on September
12, 2005, is adopted as a final rule
without change.
I
Dated: January 6, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. 06–274 Filed 1–11–06; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 982
[Docket No. FV06–982–1 IFR]
Hazelnuts Grown in Oregon and
Washington; Establishment of Final
Free and Restricted Percentages for
the 2005–2006 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Interim final rule with request
for comments.
AGENCY:
SUMMARY: This rule establishes final free
and restricted percentages for domestic
inshell hazelnuts for the 2005–2006
marketing year under the Federal
marketing order for hazelnuts grown in
Oregon and Washington. The final free
and restricted percentages are 11.4388
and 88.5612 percent, respectively. The
percentages allocate the quantity of
domestically produced hazelnuts which
may be marketed in the domestic inshell
market (free) and the quantity of
domestically produced hazelnuts that
must be disposed of in outlets approved
by the Board (restricted). Volume
regulation is intended to stabilize the
supply of domestic inshell hazelnuts to
meet the limited domestic demand for
such hazelnuts with the goal of
providing producers with reasonable
returns. This rule was recommended
unanimously by the Hazelnut Marketing
Board (Board), which is the agency
responsible for local administration of
the marketing order.
DATES: Effective Date: January 13, 2006.
This interim final rule applies to all
2005–2006 marketing year restricted
hazelnuts until they are properly
disposed of in accordance with
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marketing order requirements.
Comments received by March 13, 2006
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, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW., STOP 0237,
Washington, DC 20250–0237; Fax: (202)
720–8938, E-mail:
moab.docketclerk@usda.gov, or Internet:
https://www.regulations.gov. All
comments should reference the docket
number and the date and page number
of this issue of the Federal Register and
will be available for public inspection in
the Office of the Docket Clerk during
regular business hours, or can viewed
at: https://www.ams.usda.gov/fv/
moab.html.
FOR FURTHER INFORMATION CONTACT:
Barry Broadbent, Northwest Marketing
Field Office, Marketing Order
Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1220
SW. Third Avenue, Suite 385, Portland,
OR 97204; Telephone: (503) 326–2724,
Fax: (503) 326–7440; or George J.
Kelhart, Technical Advisor, Marketing
Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1400
Independence Avenue SW., STOP 0237,
Washington, DC 20250–0237;
Telephone: (202) 720–2491, Fax: (202)
720–8938.
Small businesses may request
information on complying with this
regulation by contacting Jay Guerber,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence SW.,
STOP 0237, Washington, DC 20250–
0237; Telephone: (202) 720–2491, Fax:
(202) 720–8938, or E-mail:
Jay.Guerber@usda.gov.
This rule
is issued under Marketing Agreement
No. 115 and Marketing Order No. 982,
both as amended (7 CFR part 982),
regulating the handling of hazelnuts
grown in Oregon and Washington,
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
(USDA) is issuing this rule in
conformance with Executive Order
12866.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. It is intended that this action
apply to all merchantable hazelnuts
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SUPPLEMENTARY INFORMATION:
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handled during the 2005–2006
marketing year (July 1, 2005, through
June 30, 2006). This rule will not
preempt any State or local laws,
regulations, or policies, unless they
present an irreconcilable conflict with
this rule.
The Act provides that administrative
proceedings must be exhausted before
parties may file suit in court. Under
section 608c(15)(A) of the Act, any
handler subject to an order may file
with USDA a petition stating that the
order, any provision of the order, or any
obligation imposed in connection with
the order is not in accordance with law
and request a modification of the order
or to be exempted therefrom. A handler
is afforded the opportunity for a hearing
on the petition. After the hearing, USDA
would rule on the petition. The Act
provides that the district court of the
United States in any district in which
the handler is an inhabitant, or has his
or her principal place of business, has
jurisdiction to review USDA’s ruling on
the petition, provided an action is filed
not later than 20 days after the date of
the entry of the ruling.
This rule establishes free and
restricted percentages which allocate
the quantity of domestically produced
hazelnuts which may be marketed in
domestic inshell markets (free) and
hazelnuts which must be exported,
shelled, or otherwise disposed of by
handlers (restricted). The Board met
and, after determining that volume
regulation would tend to effectuate the
declared policy of the Act, developed a
marketing policy to be employed for the
duration of the 2005–2006 marketing
year. Using statistical compilations and
a well defined procedure, the Board
estimated inshell trade demand and
total available supply for the coming
marketing year and subsequently used
those estimates as the basis for
computing and announcing the free and
restricted marketing percentages for the
year. The Board determined that, for the
2005–2006 marketing year, projected
inshell trade demand is 3,095 tons and
projected total available new supply is
27,057 tons. Using those estimates, the
Board voted unanimously at their
November 15, 2005, meeting to
recommend to USDA that the final free
and restricted percentages for the 2005–
2006 marketing year be established at
11.4388 and 88.5612 percent,
respectively.
The Board’s authority to recommend
volume regulation and use
computations to determine the
allocation of hazelnuts to individual
markets is specified in § 982.40 of the
order. Under the order’s provisions, free
and restricted market allocations of
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hazelnuts are expressed as percentages
of the total supply subject to regulation
and are derived by dividing the
computed inshell trade demand by the
Board’s estimate of the total
domestically produced supply of
hazelnuts that will be available over the
course of the marketing year.
Inshell trade demand, the key
component of the marketing policy, is
the quantity of inshell hazelnuts
necessary to adequately supply the
needs of the domestic market for the
duration of the marketing year. The
Board determines the inshell trade
demand for each year and uses that
estimate as the basis for setting the
percentage of the available hazelnuts
that handlers may ship to the domestic
inshell market throughout the marketing
season. The order specifies that the
inshell trade demand be computed by
averaging the preceding three years’
trade acquisitions of inshell hazelnuts,
allowing adjustments for abnormal crop
or marketing conditions. The Board may
increase the computed inshell trade
demand by up to 25 percent, if market
conditions warrant an increase.
Prior to September 20 of each
marketing year, the Board follows a
procedure, specified by the order, to
compute and announce preliminary free
and restricted percentages. The
preliminary free percentage releases 80
percent of the adjusted inshell trade
demand to the domestic market. The
purpose of releasing only 80 percent of
the inshell trade demand under the
preliminary percentage is to guard
against any potential underestimate of
crop size. The preliminary free
percentage is expressed as a percentage
of the total supply subject to regulation
where total supply is the sum of the
estimated crop production less the
three-year average disappearance plus
the undeclared carry-in from the
previous marketing year.
On or before November 15 of each
marketing year, the Board must meet
again to recommend interim final and
final free and restricted percentages and
to authorize permitted outlets for
restricted percentages. Interim final
percentages release 100 percent of the
inshell trade demand (effectively
releasing the 20 percent held back
during the preliminary stage). Final
percentages may release an additional
15 percent for desirable carryout and are
effective 30 days prior to the end of the
marketing year, or earlier as
recommended by the Board.
On August 23, 2005, the National
Agricultural Statistics Service (NASS)
released an estimate of 2005 hazelnut
production for the Oregon and
Washington area at 28,000 dry orchard-
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run tons. NASS uses an objective yield
survey method to estimate hazelnut
production which has historically been
very accurate.
On August 25, 2005, the Board met
and estimated total available supply for
the 2005 crop year at 27,057 tons. The
Board arrived at this estimate by using
the crop estimate compiled by NASS
(28,000 tons) and then adjusting that
estimate to account for disappearance
and carry-in. The order requires the
Board to reduce the estimate by the
average disappearance over the
preceding three years (1,075 tons) and to
increase it by the amount of undeclared
carry-in from previous years’ production
(132 tons.)
Disappearance is the difference
between the estimated orchard-run
production and the actual supply of
merchantable product available for sale
by handlers. Disappearance can consist
of (1) unharvested hazelnuts; (2) culled
product (nuts that are delivered to
handlers but later discarded); (3)
product used on the farm, sold locally,
or otherwise disposed of by producers;
and (4) statistical error in the orchardrun production estimate.
Undeclared carry-in is hazelnuts that
were produced in a previous marketing
year but were not subject to regulation
because they were not shipped during
that marketing year. Undeclared carry-in
is subject to regulation during the
current marketing year and is accounted
for as such by the Board.
As provided by the order, the Board
computed inshell trade demand to be
3,095 tons by taking the average of the
past three years’ sales (2,775 tons),
increasing the three year average by 15
percent to encourage increased sales
(416 tons), and then reducing that
quantity by the declared carry-in from
last year’s crop (96 tons). Declared
carry-in is product regulated under the
order during a preceding marketing year
but not shipped during that year. This
inventory must be accounted for when
estimating the quantity of product to
make available to adequately supply the
market.
The Board computed and announced
preliminary free and restricted
percentages of 9.1511 percent and
90.8489 percent, respectively, at its
August 25, 2005, meeting. The Board
computed the preliminary free
percentage by multiplying the adjusted
trade demand by 80 percent and
dividing the result by the total available
supply subject to regulation (3,095 tons
× 80 percent/27,057 tons = 9.1511
percent). The preliminary free
percentage initially released 2,476 tons
of hazelnuts from the 2005–2006 supply
for domestic inshell use, and the
preliminary restricted percentage
withheld 24,581 tons for the export and
kernel markets.
Under the order, the Board must meet
again on or before November 15 to
recommend interim final and final
percentages. The Board uses current
crop estimates to calculate interim final
and final percentages. The interim final
percentages are calculated in the same
way as the preliminary percentages and
release the remaining 20 percent (to
total 100 percent of the inshell trade
demand) previously computed by the
Board. Final free and restricted
percentages may release up to an
additional 15 percent of the average of
the preceding three years’ trade
acquisitions to provide an adequate
carryover into the following season (i.e.,
desirable carryout). The order requires
that the final free and restricted
percentages shall be effective 30 days
prior to the end of the marketing year,
or earlier, if recommended by the Board
and approved by USDA. Revisions in
the marketing policy can be made until
February 15 of each marketing year, but
the inshell trade demand can only be
revised upward, consistent with
§ 982.40(e).
The Board met on November 15, 2005,
and reviewed and approved an
amended marketing policy and
recommended the establishment of final
free and restricted percentages. The
Board decided that market conditions
were such that it would not be
necessary to release additional domestic
inshell hazelnuts to ensure adequate
carryout. Accordingly, no interim final
free and restricted percentages were
recommended. The Board
recommended final free and restricted
percentages of 11.4388 and 88.5612
percent, respectively, and that those
percentages be effective immediately.
The final free percentage releases
approximately 3,095 tons of inshell
hazelnuts from the 2005–2006 supply
for domestic use.
The final marketing percentages are
based on the Board’s final production
estimate and the following supply and
demand information for the 2005–2006
marketing year:
Tons
Total Available Supply:
(1) Production forecast (crop estimate) ........................................................................................................................................
(2) Less disappearance (three year average; 3.84 percent of Item 1) ........................................................................................
(3) Merchantable production (Item 1 minus Item 2) ....................................................................................................................
(4) Plus undeclared carry-in as of July 1, 2005 (subject to regulation) .......................................................................................
(5) Available supply subject to regulation (Item 3 plus Item 4) ...................................................................................................
Inshell Trade Demand:
(6) Average trade acquisitions of inshell hazelnuts (three prior years domestic sales) ..............................................................
(7) Add: Increase to encourage increased sales (15% of average trade acquisitions) ..............................................................
(8) Less: Declared carry-in as of July 1, 2005 (not subject to 2005–2006 regulation) ...............................................................
(9) Adjusted inshell trade demand (Item 6 plus Item 7 minus Item 8) ........................................................................................
28,000
1,075
26,925
132
27,057
2,775
416
96
3,095
Percentages
Free
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(10) Final percentages (Item 9 divided by Item 5) × 100 ................................................................................
(11) Final free tonnage (Item 9) .......................................................................................................................
(12) Final restricted tonnage (Item 5 minus Item 11) ......................................................................................
In addition to complying with the
provisions of the order, the Board also
considered USDA’s 1982 ‘‘Guidelines
for Fruit, Vegetable, and Specialty Crop
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Marketing Orders’’ (Guidelines) when
making its computations in the
marketing policy. This volume control
regulation provides a method to
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Restricted
11.4388
3,095
........................
88.5612
........................
23,962
collectively limit the supply of inshell
hazelnuts available for sale in domestic
markets. The Guidelines provide that
the domestic inshell market has
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available a quantity equal to 110 percent
of prior years’ shipments before
allocating supplies for the export
inshell, export kernel, and domestic
kernel markets. This provides for
plentiful supplies for consumers and for
market expansion, while retaining the
mechanism for dealing with oversupply
situations. The established final
percentages will make available
approximately 416 additional tons to
encourage increased sales. The total free
supply for the 2005–2006 marketing
year is estimated to be 3,095 tons of
hazelnuts. That amount would be 112
percent of prior years’ sales and would
exceed the goal of the Guidelines.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA), the
Agricultural Marketing Service (AMS)
has considered the economic impact of
this action on small entities.
Accordingly, AMS has prepared this
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 the rules issued thereunder, are
unique in that they are brought about
through group action of essentially
small entities acting on their own
behalf. Thus, both statutes have small
entity orientation and compatibility.
Small agricultural producers are
defined by the Small Business
Administration (13 CFR 121.201) as
those having annual receipts of less than
$750,000, and small agricultural service
firms are defined as those having annual
receipts of less than $6,000,000. There
are approximately 703 producers of
hazelnuts in the production area and
approximately 18 handlers subject to
regulation under the order. Average
annual hazelnut revenue per producer is
approximately $64,000. This is
computed by dividing NASS figures for
the average value of production for 2003
and 2004 ($44,863,000) by the number
of producers. The level of sales of other
crops by hazelnut producers is not
known. In addition, based on Board
records, about 83 percent of the
handlers ship under $6,000,000 worth
of hazelnuts on an annual basis. In view
of the foregoing, it can be concluded
that the majority of hazelnut producers
and handlers may be classified as small
entities.
Board meetings are widely publicized
in advance of the meetings and are held
in a location central to the production
area. The meetings are open to all
industry members and other interested
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persons who are encouraged to
participate in the deliberations and
voice their opinions on topics under
discussion. Thus, Board
recommendations can be considered to
represent the interests of small business
entities in the industry.
Currently, U.S. hazelnut production is
allocated among three main market
outlets: domestic inshell, export inshell,
and kernel markets. Handlers and
growers receive the highest return for
sales in the domestic inshell market.
They receive less for product going to
export inshell, and the least for kernels.
Based on Board records of average
shipments for 1995–2004, the
percentage going to each of these
markets was 11 percent (domestic
inshell), 49 percent (export inshell), and
38 percent (kernels). Other minor
market outlets make up the remaining 2
percent.
The inshell hazelnut market can be
characterized as having limited and
inelastic demand with a very short
primary marketing period. On average,
76 percent of domestic inshell hazelnut
shipments occur between October 1 and
November 30, primarily to supply
holiday nut demand. The inshell market
is, therefore, prone to oversupply and
correspondingly low grower prices in
the absence of supply restrictions. This
volume control regulation provides a
method for the U.S. hazelnut industry to
limit the supply of domestic inshell
hazelnuts available for sale in the
continental U.S. and thereby mitigate
market oversupply conditions.
Many years of marketing experience
led to the development of the current
volume control procedures. These
procedures have helped the industry
solve its marketing problems by keeping
inshell supplies in balance with
domestic needs. Volume controls ensure
that the domestic inshell market is fully
supplied while protecting the market
from the negative effects of oversupply.
Although the domestic inshell market
is a relatively small portion of total
hazelnut sales (11 percent of total
shipments), it remains a profitable
market segment. The volume control
provisions of the marketing order are
designed to avoid oversupplying this
particular market segment, because that
would likely lead to substantially lower
grower prices. The other market
segments, export inshell and kernels,
are expected to continue to provide
good outlets for U.S. hazelnut
production. Adverse climatic conditions
have negatively impacted production in
the other hazelnut producing regions of
the world, creating lower than normal
world supplies. As a result, it is
expected that demand and producer
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price for U.S. hazelnuts will remain
above average for some time.
In Oregon and Washington, low
hazelnut production years typically
follow high production years (a
historically consistent pattern), and
such was the case in 2005. The 2004
crop of 37,500 tons was 15 percent
above the 10-year average (1995–2004)
for hazelnut production. The 2005 crop
is estimated to be 14 percent below the
average. It is predicted that the 2006
crop will follow this pattern and will be
larger than the current crop year. This
cyclical trait also leads to inversely
corresponding cyclical price patterns for
hazelnuts. The intrinsic cyclical nature
of the hazelnut industry lends
credibility to the volume control
measures enacted by the Board under
the marketing order.
Recent production and price data
reflect the stabilizing effect of volume
control regulations. Industry statistics
show that total hazelnut production has
varied widely over the 10-year period
between 1995 and 2004, from a low of
16,500 tons in 1998 to a high of 49,500
tons in 2001. Production in the smallest
crop year and the largest crop year were
47 percent and 151 percent,
respectively, of the 10-year average of
32,685 tons. Grower price, however, has
not fluctuated to the extent of
production. Prices in the lowest price
year and the highest price year were 90
percent and 150 percent, respectively, of
the 10-year average price of $959 per
ton. The coefficient of variation (a
standard statistical measure of
variability; ‘‘CV’’) for hazelnut
production over the 10-year period is
0.36. In contrast, the coefficient of
variation for hazelnut grower prices is
0.19, about half of the CV for
production. The lower level of
variability of price versus the variability
of production provides an illustration of
the order’s price-stabilizing impact.
Comparing grower revenue to cost is
useful in highlighting the impact on
growers of recent product and price
levels. A recent hazelnut production
cost study from Oregon State University
estimated cost-of-production per acre to
be approximately $1,340 for a typical
100-acre hazelnut enterprise. Average
grower revenue per bearing acre (based
on NASS acreage and value of
production data) equaled or exceeded
that typical cost level only three times
from 1995 to 2004. Average grower
revenue was below typical costs in the
other years. Without the stabilizing
influence of the order, growers may
have lost more money. While crop size
has fluctuated, volume regulations
contribute to orderly marketing and
market stability by moderating the
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variation in returns for all producers
and handlers, both large and small.
While the level of benefits of this
rulemaking is 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 hazelnut supplies fluctuate
widely from season to season. This
regulation provides equitable allotment
of the most profitable market, the
domestic inshell market. That market is
available to all handlers, regardless of
size.
As an alternative to this regulation,
the Board discussed not regulating the
2005–2006 hazelnut crop. However,
without any regulations in effect, the
Board believes that the industry would
tend to oversupply the inshell domestic
market. Even though the 2005–2006
hazelnut crop is much smaller than last
year’s crop and 16 percent below the
ten-year average, the unregulated release
of 27,057 tons on the domestic inshell
market would oversupply that small,
but lucrative market. The Board believes
that any oversupply would completely
disrupt the market, causing producer
returns to decrease dramatically.
Section 982.40 of the order establishes
a procedure and computations for the
Board to follow in recommending to
USDA establishment of preliminary,
interim final, and final percentages of
hazelnuts to be released to the free and
restricted markets each marketing year.
The program results in plentiful
supplies for consumers and for market
expansion while retaining the
mechanism for dealing with oversupply
situations.
Hazelnuts produced under the order
comprise virtually all of the hazelnuts
produced in the U.S. This production
represents, on average, less than 3
percent of total U.S. production of all
tree nuts, and less than 6 percent of the
world’s hazelnut production.
Last season, 68 percent of the
domestically produced hazelnut kernels
were marketed in the domestic market
and 32 percent were exported.
Domestically produced kernels
generally command a higher price in the
domestic market than imported kernels.
The industry is continuing its efforts to
develop and expand other markets with
emphasis on the domestic kernel
market. Small business entities, both
producers and handlers, benefit from
the expansion efforts resulting from this
program.
Inshell hazelnuts produced under the
order compete well in export markets
because of quality. Based on Board
statistics, Europe has historically been
the primary export market for U.S.
VerDate Aug<31>2005
15:48 Jan 11, 2006
Jkt 205001
produced inshell hazelnuts. Recent
years, though, have seen a significant
shift in export destinations. Last season,
inshell shipments to Europe totaled
4,304 tons, representing just 22 percent
of exports, with the largest share going
to Germany. Inshell shipments to
Southwest Pacific countries, and Hong
Kong in particular, have increased
dramatically in the past few years, rising
to 68 percent of total exports of 19,881
tons in 2004. The industry continues to
pursue export opportunities.
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
information collection requirements
have been previously approved by the
Office of Management and Budget under
OMB No. 0581–0178. 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 all Federal marketing order
programs, reports and forms are
periodically reviewed to reduce
information requirements and
duplication by industry and public
sector agencies. This rule does not
change those requirements. In addition,
USDA has not identified any relevant
Federal rules that duplicate, overlap, or
conflict with this rule.
AMS is committed to compliance
with the Government Paperwork
Elimination Act (GPEA), which requires
Government agencies in general to
provide the public the option of
submitting information or transacting
business electronically to the maximum
extent possible.
Further, the Board’s meetings were
widely publicized throughout the
hazelnut industry and all interested
persons were invited to attend the
meetings and participate in Board
deliberations. Like all Board meetings,
those held on August 25, and November
15, 2005, were public meetings and all
entities, both large and small, were able
to express their views on this issue.
Finally, interested persons are invited to
submit information on the regulatory
and informational impacts of this action
on small businesses.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
fv/moab.html. Any questions about the
compliance guide should be sent to Jay
Guerber at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
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1925
This rule invites comments on the
establishment of final free and restricted
percentages for the 2005–2006
marketing year under the hazelnut
marketing order. Any comments
received will be considered prior to
finalization of this rule.
After consideration of all relevant
material presented, including the
Board’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.
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 action until 30 days after
publication in the Federal Register
because: (1) The 2005–2006 marketing
year began July 1, 2005, and the
percentages established herein apply to
all merchantable hazelnuts handled
from the beginning of the crop year; (2)
the percentages make the full trade
demand available so handlers can take
advantage of inshell marketing
opportunities; (3) handlers are aware of
this rule, which was recommended at an
open Board meeting, and need no
additional time to comply with this
rule; and (4) interested persons are
provided a 60-day comment period in
which to respond, and all comments
timely received will be considered prior
to finalization of this action.
List of Subjects in 7 CFR Part 982
Filberts, Hazelnuts, Marketing
agreements, Nuts, Reporting and
recordkeeping requirements.
For the reasons set forth in the
preamble, 7 CFR part 982 is amended as
follows:
I
PART 982—HAZELNUTS GROWN IN
OREGON AND WASHINGTON
1. The authority citation for 7 CFR
part 982 continues to read as follows:
I
Authority: 7 U.S.C. 601–674.
2. A new section 982.253 is added to
read as follows:
I
[Note: This section will not be published
in the annual Code of Federal Regulations.]
§ 982.253 Free and restricted
percentages—2005–2006 marketing year.
The final free and restricted
percentages for merchantable hazelnuts
for the 2005–2006 marketing year shall
be 11.4388 and 88.5612 percent,
respectively.
E:\FR\FM\12JAR1.SGM
12JAR1
1926
Federal Register / Vol. 71, No. 8 / Thursday, January 12, 2006 / Rules and Regulations
Dated: January 6, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. 06–271 Filed 1–11–06; 8:45 am]
recognized under § 35.51(a) and who
has experience in radiation safety, or
(c)(2) An authorized user (AU),
authorized medical physicist (AMP), or
authorized nuclear pharmacist (ANP)
who has experience in radiation safety.
Currently, § 35.50(d) requires an
individual seeking radiation safety
officer status to obtain written
attestation that the individual has
satisfactorily completed the
requirements in paragraphs (a), (b), or
(c)(1) of this section. However, reference
to paragraph (c)(2) was inadvertently
omitted. This rule inserts the reference
to paragraph (c)(2) in paragraph (d).
BILLING CODE 3410–02–P
NUCLEAR REGULATORY
COMMISSION
10 CFR Part 35
RIN 3150–AH19
Medical Use of Byproduct Material—
Recognition of Specialty Boards;
Correction
List of Subjects for Part 35
Nuclear Regulatory
Commission.
ACTION: Correcting amendment.
AGENCY:
SUMMARY: This document contains a
correction to the final regulations which
were published in the Federal Register
of Wednesday, March 30, 2005 (70 FR
16336) amending the Commission’s
training and experience requirements in
10 CFR part 35. The regulations related
to the requirements for recognition of
specialty boards whose certifications
may be used to demonstrate the
adequacy of the training and experience
of individuals to serve as radiation
safety officers, authorized medical
physicists, authorized nuclear
pharmacists, or authorized users. This
action corrects the regulations by
inserting a reference that was
inadvertently omitted.
EFFECTIVE DATE: January 12, 2006.
FOR FURTHER INFORMATION CONTACT: Dr.
Anthony N. Tse, Office of Nuclear
Material Safety and Safeguards, U.S.
Nuclear Regulatory Commission,
Washington, DC 20555–0001; telephone
(301) 415–6233, e-mail ant@nrc.gov.
SUPPLEMENTARY INFORMATION:
rwilkins on PROD1PC63 with RULES
Background
On March 30, 2005 (70 FR 16361),
NRC published a final rule amending its
regulations in part 35 regarding the
medical use of byproduct material. In
Section 35.50, ‘‘Training for Radiation
Safety Officer,’’ the reference to
paragraph (c)(2) in paragraph (d) was
inadvertently omitted.
Section 35.50 specifies that an
individual fulfilling the responsibilities
of Radiation Safety Officer must be:
(a) An individual who is certified by
a specialty board recognized under this
section,
(b) An individual who has completed
a structured educational program,
(c)(1) A medical physicist who has
been certified by a specialty board
VerDate Aug<31>2005
15:48 Jan 11, 2006
Jkt 205001
Byproduct material, Criminal
penalties, Drugs, Health facilities,
Health professions, Medical devices,
Nuclear materials, Occupational safety
and health, Radiation protection,
Reporting and recordkeeping
requirements.
Accordingly, 10 CFR part 35 is
corrected by making the following
correcting amendment:
I
PART 35—MEDICAL USE OF
BYPRODUCT MATERIAL
1. The authority citation for part 35
continues to read as follows:
I
Authority: Secs. 81, 161, 182, 183, 68 Stat.
935, 948, 953, 954, as amended (42 U.S.C.
2111, 2201, 2232, 2233); Sec. 201, 88 Stat.
1242, as amended (42 U.S.C. 5841); Sec.
1704, 112 Stat. 2750 (44 U.S.C. 3504 note).
2. In § 35.50, paragraph (d) is revised
to read as follows:
I
§ 35.50 Training for Radiation Safety
Officer.
*
*
*
*
*
(d) Has obtained written attestation,
signed by a preceptor Radiation Safety
Officer, that the individual has
satisfactorily completed the
requirements in paragraph (e) and in
paragraphs (a)(1)(i) and (a)(1)(ii) or
(a)(2)(i) and (a)(2)(ii) or (b)(1) or (c)(1) or
(c)(2) of this section, and has achieved
a level of radiation safety knowledge
sufficient to function independently as
a Radiation Safety Officer for a medical
use licensee; and
*
*
*
*
*
Dated at Rockville, Maryland, this 6th day
of January, 2006.
For the Nuclear Regulatory Commission.
Michael T. Lesar,
Chief, Rules and Directives Branch, Division
of Administrative Services, Office of
Administration.
[FR Doc. 06–266 Filed 1–11–06; 8:45 am]
BILLING CODE 7590–01–P
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 23
[Docket No. CE187; Special Conditions No.
23–127A–SC]
Special Conditions: Chelton Flight
Systems, Inc.; Various Airplane
Models; Protection of Systems for
High Intensity Radiated Fields (HIRF)
Federal Aviation
Administration (FAA), DOT.
ACTION: Final special conditions:
amendment.
AGENCY:
SUMMARY: The FAA published a
document in the Federal Register on
August 30, 2002 (Volume 67, Number
169) regarding Special Condition 23–
127–SC for Chelton Flight Systems,
Various Airplane Models; Protection of
Systems for High Intensity Radiated
Fields (HIRF). This amendment is being
published to add several airplane
models to the existing special condition
to cover current and future amendments
to the Approved Model List (AML) STC.
These special conditions address HIRF
certification requirements for digital
systems not addressed by the current
regulations. See the attached AML for
the airplanes that are added by this
amendment.
These airplanes, as modified by
Chelton Flight Systems, will have a
novel or unusual design feature(s)
associated with the installation of an
electronic flight instrument system.
These special conditions address the
protection of these systems from the
effects of high intensity radiated field
(HIRF) environments. The applicable
airworthiness regulations do not contain
adequate or appropriate safety standards
for this design feature. These special
conditions contain the additional safety
standards that the Administrator
considers necessary to establish a level
of safety equivalent to that established
by the existing airworthiness standards.
DATES: The effective date of these
amended special conditions is
December 22, 2005. Comments must be
received on or before February 13, 2006.
ADDRESSES: Comments on these
amended special conditions may be
mailed in duplicate to: Federal Aviation
Administration, Regional Counsel,
ACE–7, Attention: Rules Docket CE187,
901 Locust, Room 506, Kansas City,
Missouri 64106; or delivered in
duplicate to the Regional Counsel at the
above address. Comments must be
marked: CE187. Comments may be
inspected in the Rules Docket
E:\FR\FM\12JAR1.SGM
12JAR1
]]>Agencies
[Federal Register Volume 71, Number 8 (Thursday, January 12, 2006)]
[Rules and Regulations]
[Pages 1921-1926]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-271]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 982
[Docket No. FV06-982-1 IFR]
Hazelnuts Grown in Oregon and Washington; Establishment of Final
Free and Restricted Percentages for the 2005-2006 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This rule establishes final free and restricted percentages
for domestic inshell hazelnuts for the 2005-2006 marketing year under
the Federal marketing order for hazelnuts grown in Oregon and
Washington. The final free and restricted percentages are 11.4388 and
88.5612 percent, respectively. The percentages allocate the quantity of
domestically produced hazelnuts which may be marketed in the domestic
inshell market (free) and the quantity of domestically produced
hazelnuts that must be disposed of in outlets approved by the Board
(restricted). Volume regulation is intended to stabilize the supply of
domestic inshell hazelnuts to meet the limited domestic demand for such
hazelnuts with the goal of providing producers with reasonable returns.
This rule was recommended unanimously by the Hazelnut Marketing Board
(Board), which is the agency responsible for local administration of
the marketing order.
DATES: Effective Date: January 13, 2006. This interim final rule
applies to all 2005-2006 marketing year restricted hazelnuts until they
are properly disposed of in accordance with
[[Page 1922]]
marketing order requirements. Comments received by March 13, 2006 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,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence Avenue SW., STOP 0237, Washington, DC
20250-0237; Fax: (202) 720-8938, E-mail: moab.docketclerk@usda.gov, or
Internet: https://www.regulations.gov. All comments should reference the
docket number and the date and page number of this issue of the Federal
Register and will be available for public inspection in the Office of
the Docket Clerk during regular business hours, or can viewed at:
https://www.ams.usda.gov/fv/moab.html.
FOR FURTHER INFORMATION CONTACT: Barry Broadbent, Northwest Marketing
Field Office, Marketing Order Administration Branch, Fruit and
Vegetable Programs, AMS, USDA, 1220 SW. Third Avenue, Suite 385,
Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503) 326-7440; or
George J. Kelhart, Technical Advisor, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938.
Small businesses may request information on complying with this
regulation by contacting Jay Guerber, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence SW.,
STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax:
(202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This rule is issued under Marketing
Agreement No. 115 and Marketing Order No. 982, both as amended (7 CFR
part 982), regulating the handling of hazelnuts grown in Oregon and
Washington, 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 (USDA) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is intended that this action apply to all
merchantable hazelnuts handled during the 2005-2006 marketing year
(July 1, 2005, through June 30, 2006). This rule will not preempt any
State or local laws, regulations, or policies, unless they present an
irreconcilable conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This rule establishes free and restricted percentages which
allocate the quantity of domestically produced hazelnuts which may be
marketed in domestic inshell markets (free) and hazelnuts which must be
exported, shelled, or otherwise disposed of by handlers (restricted).
The Board met and, after determining that volume regulation would tend
to effectuate the declared policy of the Act, developed a marketing
policy to be employed for the duration of the 2005-2006 marketing year.
Using statistical compilations and a well defined procedure, the Board
estimated inshell trade demand and total available supply for the
coming marketing year and subsequently used those estimates as the
basis for computing and announcing the free and restricted marketing
percentages for the year. The Board determined that, for the 2005-2006
marketing year, projected inshell trade demand is 3,095 tons and
projected total available new supply is 27,057 tons. Using those
estimates, the Board voted unanimously at their November 15, 2005,
meeting to recommend to USDA that the final free and restricted
percentages for the 2005-2006 marketing year be established at 11.4388
and 88.5612 percent, respectively.
The Board's authority to recommend volume regulation and use
computations to determine the allocation of hazelnuts to individual
markets is specified in Sec. 982.40 of the order. Under the order's
provisions, free and restricted market allocations of hazelnuts are
expressed as percentages of the total supply subject to regulation and
are derived by dividing the computed inshell trade demand by the
Board's estimate of the total domestically produced supply of hazelnuts
that will be available over the course of the marketing year.
Inshell trade demand, the key component of the marketing policy, is
the quantity of inshell hazelnuts necessary to adequately supply the
needs of the domestic market for the duration of the marketing year.
The Board determines the inshell trade demand for each year and uses
that estimate as the basis for setting the percentage of the available
hazelnuts that handlers may ship to the domestic inshell market
throughout the marketing season. The order specifies that the inshell
trade demand be computed by averaging the preceding three years' trade
acquisitions of inshell hazelnuts, allowing adjustments for abnormal
crop or marketing conditions. The Board may increase the computed
inshell trade demand by up to 25 percent, if market conditions warrant
an increase.
Prior to September 20 of each marketing year, the Board follows a
procedure, specified by the order, to compute and announce preliminary
free and restricted percentages. The preliminary free percentage
releases 80 percent of the adjusted inshell trade demand to the
domestic market. The purpose of releasing only 80 percent of the
inshell trade demand under the preliminary percentage is to guard
against any potential underestimate of crop size. The preliminary free
percentage is expressed as a percentage of the total supply subject to
regulation where total supply is the sum of the estimated crop
production less the three-year average disappearance plus the
undeclared carry-in from the previous marketing year.
On or before November 15 of each marketing year, the Board must
meet again to recommend interim final and final free and restricted
percentages and to authorize permitted outlets for restricted
percentages. Interim final percentages release 100 percent of the
inshell trade demand (effectively releasing the 20 percent held back
during the preliminary stage). Final percentages may release an
additional 15 percent for desirable carryout and are effective 30 days
prior to the end of the marketing year, or earlier as recommended by
the Board.
On August 23, 2005, the National Agricultural Statistics Service
(NASS) released an estimate of 2005 hazelnut production for the Oregon
and Washington area at 28,000 dry orchard-
[[Page 1923]]
run tons. NASS uses an objective yield survey method to estimate
hazelnut production which has historically been very accurate.
On August 25, 2005, the Board met and estimated total available
supply for the 2005 crop year at 27,057 tons. The Board arrived at this
estimate by using the crop estimate compiled by NASS (28,000 tons) and
then adjusting that estimate to account for disappearance and carry-in.
The order requires the Board to reduce the estimate by the average
disappearance over the preceding three years (1,075 tons) and to
increase it by the amount of undeclared carry-in from previous years'
production (132 tons.)
Disappearance is the difference between the estimated orchard-run
production and the actual supply of merchantable product available for
sale by handlers. Disappearance can consist of (1) unharvested
hazelnuts; (2) culled product (nuts that are delivered to handlers but
later discarded); (3) product used on the farm, sold locally, or
otherwise disposed of by producers; and (4) statistical error in the
orchard-run production estimate.
Undeclared carry-in is hazelnuts that were produced in a previous
marketing year but were not subject to regulation because they were not
shipped during that marketing year. Undeclared carry-in is subject to
regulation during the current marketing year and is accounted for as
such by the Board.
As provided by the order, the Board computed inshell trade demand
to be 3,095 tons by taking the average of the past three years' sales
(2,775 tons), increasing the three year average by 15 percent to
encourage increased sales (416 tons), and then reducing that quantity
by the declared carry-in from last year's crop (96 tons). Declared
carry-in is product regulated under the order during a preceding
marketing year but not shipped during that year. This inventory must be
accounted for when estimating the quantity of product to make available
to adequately supply the market.
The Board computed and announced preliminary free and restricted
percentages of 9.1511 percent and 90.8489 percent, respectively, at its
August 25, 2005, meeting. The Board computed the preliminary free
percentage by multiplying the adjusted trade demand by 80 percent and
dividing the result by the total available supply subject to regulation
(3,095 tons x 80 percent/27,057 tons = 9.1511 percent). The preliminary
free percentage initially released 2,476 tons of hazelnuts from the
2005-2006 supply for domestic inshell use, and the preliminary
restricted percentage withheld 24,581 tons for the export and kernel
markets.
Under the order, the Board must meet again on or before November 15
to recommend interim final and final percentages. The Board uses
current crop estimates to calculate interim final and final
percentages. The interim final percentages are calculated in the same
way as the preliminary percentages and release the remaining 20 percent
(to total 100 percent of the inshell trade demand) previously computed
by the Board. Final free and restricted percentages may release up to
an additional 15 percent of the average of the preceding three years'
trade acquisitions to provide an adequate carryover into the following
season (i.e., desirable carryout). The order requires that the final
free and restricted percentages shall be effective 30 days prior to the
end of the marketing year, or earlier, if recommended by the Board and
approved by USDA. Revisions in the marketing policy can be made until
February 15 of each marketing year, but the inshell trade demand can
only be revised upward, consistent with Sec. 982.40(e).
The Board met on November 15, 2005, and reviewed and approved an
amended marketing policy and recommended the establishment of final
free and restricted percentages. The Board decided that market
conditions were such that it would not be necessary to release
additional domestic inshell hazelnuts to ensure adequate carryout.
Accordingly, no interim final free and restricted percentages were
recommended. The Board recommended final free and restricted
percentages of 11.4388 and 88.5612 percent, respectively, and that
those percentages be effective immediately. The final free percentage
releases approximately 3,095 tons of inshell hazelnuts from the 2005-
2006 supply for domestic use.
The final marketing percentages are based on the Board's final
production estimate and the following supply and demand information for
the 2005-2006 marketing year:
------------------------------------------------------------------------
Tons
------------------------------------------------------------------------
Total Available Supply:
(1) Production forecast (crop estimate)............. 28,000
(2) Less disappearance (three year average; 3.84 1,075
percent of Item 1).................................
(3) Merchantable production (Item 1 minus Item 2)... 26,925
(4) Plus undeclared carry-in as of July 1, 2005 132
(subject to regulation)............................
(5) Available supply subject to regulation (Item 3 27,057
plus Item 4).......................................
Inshell Trade Demand:
(6) Average trade acquisitions of inshell hazelnuts 2,775
(three prior years domestic sales).................
(7) Add: Increase to encourage increased sales (15% 416
of average trade acquisitions).....................
(8) Less: Declared carry-in as of July 1, 2005 (not 96
subject to 2005-2006 regulation)...................
(9) Adjusted inshell trade demand (Item 6 plus Item 3,095
7 minus Item 8)....................................
------------------------------------------------------------------------
Percentages
-------------------------------
Free Restricted
------------------------------------------------------------------------
(10) Final percentages (Item 9 11.4388 88.5612
divided by Item 5) x 100...........
(11) Final free tonnage (Item 9).... 3,095 ..............
(12) Final restricted tonnage (Item .............. 23,962
5 minus Item 11)...................
------------------------------------------------------------------------
In addition to complying with the provisions of the order, the
Board also considered USDA's 1982 ``Guidelines for Fruit, Vegetable,
and Specialty Crop Marketing Orders'' (Guidelines) when making its
computations in the marketing policy. This volume control regulation
provides a method to collectively limit the supply of inshell hazelnuts
available for sale in domestic markets. The Guidelines provide that the
domestic inshell market has
[[Page 1924]]
available a quantity equal to 110 percent of prior years' shipments
before allocating supplies for the export inshell, export kernel, and
domestic kernel markets. This provides for plentiful supplies for
consumers and for market expansion, while retaining the mechanism for
dealing with oversupply situations. The established final percentages
will make available approximately 416 additional tons to encourage
increased sales. The total free supply for the 2005-2006 marketing year
is estimated to be 3,095 tons of hazelnuts. That amount would be 112
percent of prior years' sales and would exceed the goal of the
Guidelines.
Initial Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities. Accordingly, AMS has
prepared this 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 the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
Small agricultural producers are defined by the Small Business
Administration (13 CFR 121.201) as those having annual receipts of less
than $750,000, and small agricultural service firms are defined as
those having annual receipts of less than $6,000,000. There are
approximately 703 producers of hazelnuts in the production area and
approximately 18 handlers subject to regulation under the order.
Average annual hazelnut revenue per producer is approximately $64,000.
This is computed by dividing NASS figures for the average value of
production for 2003 and 2004 ($44,863,000) by the number of producers.
The level of sales of other crops by hazelnut producers is not known.
In addition, based on Board records, about 83 percent of the handlers
ship under $6,000,000 worth of hazelnuts on an annual basis. In view of
the foregoing, it can be concluded that the majority of hazelnut
producers and handlers may be classified as small entities.
Board meetings are widely publicized in advance of the meetings and
are held in a location central to the production area. The meetings are
open to all industry members and other interested persons who are
encouraged to participate in the deliberations and voice their opinions
on topics under discussion. Thus, Board recommendations can be
considered to represent the interests of small business entities in the
industry.
Currently, U.S. hazelnut production is allocated among three main
market outlets: domestic inshell, export inshell, and kernel markets.
Handlers and growers receive the highest return for sales in the
domestic inshell market. They receive less for product going to export
inshell, and the least for kernels. Based on Board records of average
shipments for 1995-2004, the percentage going to each of these markets
was 11 percent (domestic inshell), 49 percent (export inshell), and 38
percent (kernels). Other minor market outlets make up the remaining 2
percent.
The inshell hazelnut market can be characterized as having limited
and inelastic demand with a very short primary marketing period. On
average, 76 percent of domestic inshell hazelnut shipments occur
between October 1 and November 30, primarily to supply holiday nut
demand. The inshell market is, therefore, prone to oversupply and
correspondingly low grower prices in the absence of supply
restrictions. This volume control regulation provides a method for the
U.S. hazelnut industry to limit the supply of domestic inshell
hazelnuts available for sale in the continental U.S. and thereby
mitigate market oversupply conditions.
Many years of marketing experience led to the development of the
current volume control procedures. These procedures have helped the
industry solve its marketing problems by keeping inshell supplies in
balance with domestic needs. Volume controls ensure that the domestic
inshell market is fully supplied while protecting the market from the
negative effects of oversupply.
Although the domestic inshell market is a relatively small portion
of total hazelnut sales (11 percent of total shipments), it remains a
profitable market segment. The volume control provisions of the
marketing order are designed to avoid oversupplying this particular
market segment, because that would likely lead to substantially lower
grower prices. The other market segments, export inshell and kernels,
are expected to continue to provide good outlets for U.S. hazelnut
production. Adverse climatic conditions have negatively impacted
production in the other hazelnut producing regions of the world,
creating lower than normal world supplies. As a result, it is expected
that demand and producer price for U.S. hazelnuts will remain above
average for some time.
In Oregon and Washington, low hazelnut production years typically
follow high production years (a historically consistent pattern), and
such was the case in 2005. The 2004 crop of 37,500 tons was 15 percent
above the 10-year average (1995-2004) for hazelnut production. The 2005
crop is estimated to be 14 percent below the average. It is predicted
that the 2006 crop will follow this pattern and will be larger than the
current crop year. This cyclical trait also leads to inversely
corresponding cyclical price patterns for hazelnuts. The intrinsic
cyclical nature of the hazelnut industry lends credibility to the
volume control measures enacted by the Board under the marketing order.
Recent production and price data reflect the stabilizing effect of
volume control regulations. Industry statistics show that total
hazelnut production has varied widely over the 10-year period between
1995 and 2004, from a low of 16,500 tons in 1998 to a high of 49,500
tons in 2001. Production in the smallest crop year and the largest crop
year were 47 percent and 151 percent, respectively, of the 10-year
average of 32,685 tons. Grower price, however, has not fluctuated to
the extent of production. Prices in the lowest price year and the
highest price year were 90 percent and 150 percent, respectively, of
the 10-year average price of $959 per ton. The coefficient of variation
(a standard statistical measure of variability; ``CV'') for hazelnut
production over the 10-year period is 0.36. In contrast, the
coefficient of variation for hazelnut grower prices is 0.19, about half
of the CV for production. The lower level of variability of price
versus the variability of production provides an illustration of the
order's price-stabilizing impact.
Comparing grower revenue to cost is useful in highlighting the
impact on growers of recent product and price levels. A recent hazelnut
production cost study from Oregon State University estimated cost-of-
production per acre to be approximately $1,340 for a typical 100-acre
hazelnut enterprise. Average grower revenue per bearing acre (based on
NASS acreage and value of production data) equaled or exceeded that
typical cost level only three times from 1995 to 2004. Average grower
revenue was below typical costs in the other years. Without the
stabilizing influence of the order, growers may have lost more money.
While crop size has fluctuated, volume regulations contribute to
orderly marketing and market stability by moderating the
[[Page 1925]]
variation in returns for all producers and handlers, both large and
small.
While the level of benefits of this rulemaking is 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 hazelnut supplies fluctuate widely from season to
season. This regulation provides equitable allotment of the most
profitable market, the domestic inshell market. That market is
available to all handlers, regardless of size.
As an alternative to this regulation, the Board discussed not
regulating the 2005-2006 hazelnut crop. However, without any
regulations in effect, the Board believes that the industry would tend
to oversupply the inshell domestic market. Even though the 2005-2006
hazelnut crop is much smaller than last year's crop and 16 percent
below the ten-year average, the unregulated release of 27,057 tons on
the domestic inshell market would oversupply that small, but lucrative
market. The Board believes that any oversupply would completely disrupt
the market, causing producer returns to decrease dramatically.
Section 982.40 of the order establishes a procedure and
computations for the Board to follow in recommending to USDA
establishment of preliminary, interim final, and final percentages of
hazelnuts to be released to the free and restricted markets each
marketing year. The program results in plentiful supplies for consumers
and for market expansion while retaining the mechanism for dealing with
oversupply situations.
Hazelnuts produced under the order comprise virtually all of the
hazelnuts produced in the U.S. This production represents, on average,
less than 3 percent of total U.S. production of all tree nuts, and less
than 6 percent of the world's hazelnut production.
Last season, 68 percent of the domestically produced hazelnut
kernels were marketed in the domestic market and 32 percent were
exported. Domestically produced kernels generally command a higher
price in the domestic market than imported kernels. The industry is
continuing its efforts to develop and expand other markets with
emphasis on the domestic kernel market. Small business entities, both
producers and handlers, benefit from the expansion efforts resulting
from this program.
Inshell hazelnuts produced under the order compete well in export
markets because of quality. Based on Board statistics, Europe has
historically been the primary export market for U.S. produced inshell
hazelnuts. Recent years, though, have seen a significant shift in
export destinations. Last season, inshell shipments to Europe totaled
4,304 tons, representing just 22 percent of exports, with the largest
share going to Germany. Inshell shipments to Southwest Pacific
countries, and Hong Kong in particular, have increased dramatically in
the past few years, rising to 68 percent of total exports of 19,881
tons in 2004. The industry continues to pursue export opportunities.
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 information collection
requirements have been previously approved by the Office of Management
and Budget under OMB No. 0581-0178. 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
all Federal marketing order programs, reports and forms are
periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies. This rule does not
change those requirements. In addition, USDA has not identified any
relevant Federal rules that duplicate, overlap, or conflict with this
rule.
AMS is committed to compliance with the Government Paperwork
Elimination Act (GPEA), which requires Government agencies in general
to provide the public the option of submitting information or
transacting business electronically to the maximum extent possible.
Further, the Board's meetings were widely publicized throughout the
hazelnut industry and all interested persons were invited to attend the
meetings and participate in Board deliberations. Like all Board
meetings, those held on August 25, and November 15, 2005, were public
meetings and all entities, both large and small, were able to express
their views on this issue. Finally, interested persons are invited to
submit information on the regulatory and informational impacts of this
action on small businesses.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http:/
/www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
This rule invites comments on the establishment of final free and
restricted percentages for the 2005-2006 marketing year under the
hazelnut marketing order. Any comments received will be considered
prior to finalization of this rule.
After consideration of all relevant material presented, including
the Board'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.
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 action until 30 days after publication in the Federal Register
because: (1) The 2005-2006 marketing year began July 1, 2005, and the
percentages established herein apply to all merchantable hazelnuts
handled from the beginning of the crop year; (2) the percentages make
the full trade demand available so handlers can take advantage of
inshell marketing opportunities; (3) handlers are aware of this rule,
which was recommended at an open Board meeting, and need no additional
time to comply with this rule; and (4) interested persons are provided
a 60-day comment period in which to respond, and all comments timely
received will be considered prior to finalization of this action.
List of Subjects in 7 CFR Part 982
Filberts, Hazelnuts, Marketing agreements, Nuts, Reporting and
recordkeeping requirements.
0
For the reasons set forth in the preamble, 7 CFR part 982 is amended as
follows:
PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON
0
1. The authority citation for 7 CFR part 982 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. A new section 982.253 is added to read as follows:
[Note: This section will not be published in the annual Code of
Federal Regulations.]
Sec. 982.253 Free and restricted percentages--2005-2006 marketing
year.
The final free and restricted percentages for merchantable
hazelnuts for the 2005-2006 marketing year shall be 11.4388 and 88.5612
percent, respectively.
[[Page 1926]]
Dated: January 6, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-271 Filed 1-11-06; 8:45 am]
BILLING CODE 3410-02-P
