Raisins Produced From Grapes Grown in California; Final Free and Reserve Percentages for 2005-06 Crop Natural (Sun-Dried) Seedless Raisins, 29567-29571 [06-4747]

Download as PDF Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Rules and Regulations 2. In § 945.341, paragraph (g) is revised to read as follows: I § 945.341 Handling regulation. * * * * * (g) Minimum quantity exemption. Each handler may ship up to, but not to exceed, five hundredweight of potatoes any day without regard to the inspection and assessment requirements of this part, but this exception shall not apply to any shipment that exceeds five hundredweight of potatoes. * * * * * Dated: May 17, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. 06–4748 Filed 5–22–06; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 989 [Docket No. FV06–989–2 IFR] Raisins Produced From Grapes Grown in California; Final Free and Reserve Percentages for 2005–06 Crop Natural (Sun-Dried) Seedless Raisins Agricultural Marketing Service, USDA. ACTION: Interim final rule with request for comments. dsatterwhite on PROD1PC76 with RULES AGENCY: SUMMARY: This rule establishes final volume regulation percentages for 2005– 06 crop Natural (sun-dried) Seedless (NS) raisins covered under the Federal marketing order for California raisins (order). The order regulates the handling of raisins produced from grapes grown in California and is locally administered by the Raisin Administrative Committee (Committee). The volume regulation percentages are 82.50 percent free and 17.50 percent reserve. The percentages are intended to help stabilize raisin supplies and prices, and strengthen market conditions. DATES: Effective August 1, 2005, through July 31, 2006. The volume regulation percentages apply to acquisitions of NS raisins from the 2005–06 crop until the reserve raisins from that crop are disposed of under the marketing order. Comments received by July 24, 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 VerDate Aug<31>2005 19:30 May 22, 2006 Jkt 208001 Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250–0237; Fax: (202) 720–8938; or E-mail: moab.docketclerk@usda.gov, or Internet: http://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 made available for public inspection in the Office of the Docket Clerk during regular business hours, or can be viewed at: http:// www.ams.usda.gov/fv/moab.html. FOR FURTHER INFORMATION CONTACT: Kurt Kimmel, Officer-in-Charge, or Rose M. Aguayo, Marketing Specialist, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: (559) 487–5901; Fax: (559) 487–5906. Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington DC 20250–0237; Telephone: (202) 720– 2491; Fax: (202) 720–8938; or E-mail: Jay.Guerber@usda.gov. SUPPLEMENTARY INFORMATION: This rule is issued under Marketing Agreement 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 (USDA) 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 NS raisins for the 2005–06 crop year, which began August 1, 2005, and ends July 31, 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 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 29567 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 final volume regulation percentages for 2005–06 crop NS raisins covered under the order. The volume regulation percentages are 82.50 percent free and 17.50 percent reserve. 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; 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. The Committee unanimously recommended final percentages on January 26, 2006, and further justified their recommendation on March 16, 2006. Computation of Trade Demands Section 989.54 of the order prescribes procedures and time frames to be followed in establishing volume regulation. This includes methodology used to calculate percentages. Pursuant to § 989.54(a) of the order, the Committee met on August 15, 2005, 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 computed using a 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 adding the desirable carryout at the end of that crop year. As specified in § 989.154(a), the desirable E:\FR\FM\23MYR1.SGM 23MYR1 29568 Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Rules and Regulations dsatterwhite on PROD1PC76 with RULES The preliminary percentages were 74 percent free and 26 percent reserve. In addition, preliminary percentages were also announced for Dipped Seedless, Golden Seedless, Zante Currant, and Other Seedless raisins. It was ultimately determined that volume regulation was only warranted for NS raisins. As in past seasons, the Committee submitted its marketing policy to USDA for review. normal processing shrinkage being experienced with the 2005 NS raisin crop. With a lower crop estimate, more free tonnage raisins will be made available to handlers for free tonnage use, but due to the above normal processing shrinkage, the Committee expects supplies to be in balance with market needs. By the week ending April 5, 2006, data showed that deliveries of NS raisins were at 301,019 tons of NS Computation of Final Volume raisins. Thus, it is likely that final Regulation Percentages deliveries may reach 311,493 tons by July 31, 2006—the end of the crop year. Pursuant to § 989.54(c), at its January The Committee’s recommendation will 26, 2006, meeting, the Committee provide handlers with 7.5 percent more announced interim percentages for NS raisins than would be provided if a raisins to release slightly less than the 311,493 ton estimate had been used, but full trade demand. Based on a revised the additional tonnage is not expected NS crop estimate of 283,000 tons (up to cause disorderly marketing from the October estimate of 266,227 tons), interim percentages for NS raisins conditions. COMPUTED TRADE DEMANDS In addition, USDA’s ‘‘Guidelines for were announced at 82.25 percent free [Natural condition tons] Fruit, Vegetable, and Specialty Crop and 17.75 percent reserve. Marketing Orders’’ (Guidelines) specify Pursuant to § 989.54(d), the NS that 110 percent of recent years’ sales raisins Committee also recommended final should be made available to primary percentages at its January 26, 2006, Prior year’s shipments .................. 319,752 meeting to release the full trade markets each season for marketing Multiplied by 90 percent ............... 0.90 orders utilizing reserve pool authority. demands for NS raisins. Final Equals adjusted base ................... 287,777 percentages were recommended at 82.50 This goal will be met for NS raisins by Minus carryin inventory ................ 114,792 the establishment of final percentages, Plus desirable caryout .................. 60,000 percent free and 17.50 percent reserve. which release 100 percent of the trade The Committee’s calculations and Equals computed NS trade Dedemand and the offer of additional mand ......................................... 232,985 determinations to arrive at final reserve raisins for sale to handlers under percentages for NS raisins are shown in the ‘‘10 plus 10 offers.’’ As specified in the table below: Computation of Preliminary Volume § 989.54(g), the 10 plus 10 offers are two Regulation Percentages offers of reserve pool raisins which are FINAL VOLUME REGULATION Section 989.54(b) of the order requires made available to handlers during each PERCENTAGES that the Committee announce, on or season. For each such offer, a quantity [Natural condition tons] before October 5, preliminary crop of reserve raisins equal to 10 percent of estimates and determine whether the prior year’s shipments is made NS volume regulation is warranted for the available for free use. Handlers may sell raisins varietal types for which it computed a their 10 plus 10 raisins to any market. trade demand. That section allows the For NS raisins, the first 10 plus 10 Trade demand .............................. 232,985 Committee to extend the October 5 date Divided by crop estimate .............. 283,000 offer was made in February 2006. A up to 5 business days if warranted by a Equals the free percentage .......... 82.30 total of 31,975 tons was made available late crop. 100 minus free percentage equals to raisin handlers; all of the raisins were The Committee met on October 4, the reserve percentage ............. 17.70 purchased. The second 10 plus 10 offer 2005, and announced a preliminary of 31,975 tons will be made available to crop estimate for NS raisins of 266,227 * * * The Committee recommended handlers by July 31, 2006. Adding the tons, which is about 19 percent lower rounding the free percentage to 82.50 total figure of 63,950 tons of 10 plus 10 than the 10-year average of 328,088 percent and reducing the reserve raisins to the 232,985 ton trade demand tons. NS raisins are the major varietal percentage to 17.50 percent to figure, plus 114,792 tons of 2004–05 type of California raisin. Adding the compensate for the higher than normal carryin NS inventory equates to 411,727 carryin inventory of 114,792 tons, plus processing shrinkage being experienced tons of natural condition raisins, or the 266,227-ton crop estimate resulted by handlers with the 2006 NS crop. 386,855 tons of packed raisins, that are in a total available supply of 381,019 By the week ending February 11, available to handlers for free use or tons, which was significantly higher 2006, data showed that deliveries of NS primary markets. This is about 130 (164 percent) than the 232,985-ton trade raisins exceeded the Committee’s crop percent of the quantity of NS raisins demand. Thus, the Committee estimate of 283,000 tons. By that date, shipped during the 2004–05 crop year determined that volume regulation for deliveries of NS raisins totaled 285,052 (317,998 natural condition tons or NS raisins was warranted. The tons. Thus, at USDA’s request, the RAC 300,435 packed tons). Committee announced preliminary free met again on March 16, 2006, and In addition to the 10 plus 10 offers, and reserve percentages for NS raisins, reviewed the current available data and § 989.67(j) of the order provides which released 85 percent of the the computations used in arriving at the authority for sales of reserve raisins to computed trade demand since a recommended final percentages. handlers under certain conditions such minimum field price (price paid by At the March meeting, the Committee as a national emergency, crop failure, handlers to producers for their free continued to support a crop estimate of change in economic or marketing tonnage raisins) had been established. 283,000 tons, because of the higher than conditions, or if free tonnage shipments carryout for NS raisins shall equal the total shipments of free tonnage during August and September for each of the past 5 crop years, converted to a natural condition basis, dropping the high and low figures, and dividing the remaining sum by three, or 60,000 natural condition tons, whichever is higher. For all other varietal types, the desirable carryout shall equal the total shipments of free tonnage during August, September and one-half of October for each of the past 5 crop years, converted to a natural condition basis, dropping the high and low figures, and dividing the remaining sum by three. In accordance with these provisions, the Committee computed and announced the 2005–06 trade demand for NS raisins at 232,985 tons as shown below. VerDate Aug<31>2005 19:30 May 22, 2006 Jkt 208001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\23MYR1.SGM 23MYR1 Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Rules and Regulations 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. When implemented, the additional offers of reserve raisins make even more raisins available to primary markets, which is consistent with USDA’s Guidelines. dsatterwhite on PROD1PC76 with RULES 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 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 firms are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $6,500,000, and small agricultural producers are defined as those having annual receipts of less than $750,000. Eleven of the 20 handlers subject to regulation have annual sales estimated to be at least $6,500,000, and the remaining 9 handlers have sales less than $6,500,000. No more than 9 handlers and a majority of producers of California raisins may be classified as small entities. Since 1949, the California raisin industry has operated under a Federal marketing order. The order contains authority to, among other things, limit the portion of a given year’s crop that can be marketed freely in any outlet by raisin handlers. This volume control mechanism is used to stabilize supplies and prices and strengthen market conditions. Pursuant to § 989.54(d) of the order, this rule establishes final volume regulation percentages for 2005–06 crop NS raisins. The volume regulation percentages are 82.50 percent free and 17.50 percent reserve. 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 VerDate Aug<31>2005 19:30 May 22, 2006 Jkt 208001 and are disposed of through certain programs authorized under the order. Volume regulation is warranted this season because the revised crop estimate of 283,000 tons combined with the carryin inventory of 114,792 tons results in a total available supply of 397,792 tons, which is about 70 percent higher than the 232,985 ton trade demand. The current volume regulation 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 reduce the burden of oversupplies in the domestic market. Raisin grapes are a perennial crop, so production in any year is dependent upon plantings made in earlier years. The sun-drying method of producing raisins involves considerable risk because of variable weather patterns. Even though the product and the industry are viewed as mature, the industry has experienced considerable change over the last several decades. Before the 1975–76 crop year, more than 50 percent of the raisins were packed and sold directly to consumers. Now, about 65 percent of raisins are sold in bulk. This means that raisins are now sold to consumers mostly as an ingredient in another product such as cereal and baked goods. In addition, for a few years in the early 1970’s, over 50 percent of the raisin grapes were sold to the wine market for crushing. Since then, the percent of raisin-variety grapes sold to the wine industry has decreased. California’s grapes are classified into three groups—table grapes, wine grapes, and raisin-variety grapes. Raisin-variety grapes are the most versatile of the three types. They can be marketed as fresh grapes, crushed for juice 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. This type of situation introduces a certain amount of variability into the raisin market. Although the size of the crop for raisinvariety grapes may be known, the amount dried for raisins depends on the demand for crushing. This makes the marketing of raisins a more difficult task. These supply fluctuations can result in producer price instability and disorderly market conditions. Volume regulation is helpful to the raisin industry because it lessens the impact of such fluctuations and PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 29569 contributes to orderly marketing. For example, producer prices for NS raisins remained fairly steady between the 1993–94 through the 1997–98 seasons, although production varied. As shown in the table below, during those years, production varied from a low of 272,063 tons in 1996–97 to a high of 387,007 tons in 1993–94. According to Committee data, the total producer return per ton during those years, which includes proceeds from both free tonnage plus reserve pool raisins, has varied from a low of $904.60 in 1993–94 to a high of $1,049 in 1996– 97. Total producer prices for the 1998– 99 and 1999–2000 seasons increased significantly due to back-to-back short crops during those years. Producer prices dropped dramatically for the 2000–01, 2001–02, and 2002–03 crop years due to record-size production, large carry-in inventories, and stagnant demand. However, the producer prices increased slightly with a shorter crop in 2003–04 and rebounded to pre-1998–99 prices during the 2004–05 crop years as noted below: NATURAL SEEDLESS PRODUCER PRICES Crop year 2004–05 ............ 2003–04 ............ 2002–03 ............ 2001–02 ............ 2000–01 ............ 1999–2000 ........ 1998–99 ............ 1997–98 ............ 1996–97 ............ 1995–96 ............ 1994–95 ............ 1993–94 ............ Deliveries (natural condition tons) 265,262 296,864 388,010 377,328 432,616 299,910 240,469 382,448 272,063 325,911 378,427 387,007 Producer prices (per ton) 2 $1210.00 1 567.00 1 491.20 650.94 603.36 1,211.25 2 1,290.00 946.52 1,049.20 1,007.19 928.27 904.60 1 Return-to-date, 2 No reserve pool still open. volume regulation. There are essentially two broad markets for raisins—domestic and export. In recent years, both domestic and export shipments have been increasing. Domestic shipments decreased from a high of 204,805 packed tons during the 1990–91 crop year to a low of 156,325 packed tons in 1999–2000. Since that time domestic shipments steadily increased from 174,117 packed tons during the 2000–01 crop year to 193,680 packed tons during the 2004–05 crop year. In addition, exports decreased from 114,576 packed tons in 1991–92 to a low of 91,600 packed tons in the 1999–2000 crop year. In recent years, export shipments have increased from a low of 101,537 tons during the 2002–03 crop year to 106,755 E:\FR\FM\23MYR1.SGM 23MYR1 dsatterwhite on PROD1PC76 with RULES 29570 Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Rules and Regulations tons of raisins during the 2004–05 crop year. Moreover, the per capita consumption of raisins has declined from 2.09 pounds in 1988 to 1.46 pounds in 2004. This decrease is consistent with the decrease in the per capita consumption of dried fruits in general, which is due to the increasing availability of most types of fresh fruit throughout the year. While the overall demand for raisins has been increasing (as reflected in increased in commercial shipments), production has been decreasing. Deliveries of NS dried raisins from producers to handlers reached an alltime high of 432,616 tons in the 2000– 01 crop year. This large crop was preceded by two short crop years; deliveries were 240,469 tons in 1998–99 and 299,910 tons in 1999–2000. Deliveries for the 2000–01 crop year soared to a record level because of increased bearing acreage and yields. Deliveries for the 2001–02 crop year were at 377,328 tons, 388,010 tons for the 2002–03 crop year, 296,864 for the 2003–04 crop year and 265,262 tons for the 2004–05 crop year. After three crop years of high production and a large 2001–02 carryin inventory, the industry diverted raisins or removed 41,000 acres in 2001; 27,000 acres in 2002; and 15,000 acres of vines in 2003 to reduce the industry’s burdensome supply of raisins. These actions resulted in declining deliveries of 296,865 tons for the 2003–04 crop year and 265,262 tons for the 2004–05 crop year. The order permits the industry to exercise supply control provisions, which allow for the establishment of free and reserve percentages, and establishment of a reserve pool. One of the primary purposes of establishing free and reserve percentages is to equilibrate supply and demand. If raisin markets are over-supplied with product, producer prices will decline. Raisins are generally marketed at relatively lower price levels in the more elastic export market than in the more inelastic domestic market. This results in a larger volume of raisins being marketed and enhances producer returns. In addition, this system allows the U.S. raisin industry to be more competitive in export markets. To assess the impact that volume control has on the prices producers receive for their product, an econometric model has been constructed. The model developed is for the purpose of estimating nominal prices under a number of scenarios using the volume control authority under the Federal marketing order. The price producers receive for the harvest and delivery of their crop is largely VerDate Aug<31>2005 19:30 May 22, 2006 Jkt 208001 determined by the level of production and the volume of carryin inventories. The Federal marketing order permits the industry to exercise supply control provisions, which allow for the establishment of reserve and free percentages for primary markets, and a reserve pool. The establishment of reserve percentages impacts the production that is marketed in the primary markets. The reserve percentage limits what handlers can market as free tonnage. Assuming the 17.50 percent reserve limits the total free tonnage to 233,475 natural condition tons (.8250 x the 283,000-ton crop estimate) and carryin is 114,792 natural condition tons, and all of the 63,950 natural condition tons of reserve raisins offered for sale under the 10 plus 10 offers are purchased, then the total free supply is estimated at 412,217 natural condition tons. Data available as of April 5, 2006, shows that deliveries of NS raisins are at 301,019 tons. If the Committee used a 311,493 ton crop estimate, and assuming a 25.2 percent reserve limits the total free tonnage to 232,996 natural condition tons (.7480 x the 311,493-ton crop estimate) and carryin and 10+10 offers and purchases remained the same, then the total free supply would be estimated at 411,738 natural condition tons, a difference of 479 tons. The Committee believes that this additional tonnage will provide handlers with enough free tonnage to compensate for the above normal processing shrink being experienced with this season’s crop. The econometric model estimates prices to be $63 per ton higher than under an unregulated scenario. This price increase is beneficial to all producers regardless of size and enhances producers’ total revenues in comparison to no volume control. Establishing a reserve allows the industry to help stabilize supplies in both domestic and export markets, while improving returns to producers. Free and reserve percentages are established by varietal type, and usually 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, it has been determined that volume regulation is warranted this season for only one of the nine raisin varietal types defined under the order. The free and reserve percentages established by this rule release the full trade demand and apply uniformly to all handlers in the industry, regardless PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 of size. For NS raisins, with the exception of the 1998–99 and 2004–05 crop years, 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. While the level of benefits of this rulemaking are difficult to quantify, the stabilizing effects of the volume regulations impact 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 in past seasons. Thus, this action imposes no additional reporting or recordkeeping requirements on either small or large raisin handlers. The forms require information which is readily available from handler records and which can be provided without data processing equipment or trained statistical staff. The information collection and recordkeeping requirements have been previously approved by the Office of Management and Budget (OMB) under OMB Control No. 0581–0178. 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. 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. In addition, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. Further, the Committee’s meetings were widely publicized throughout the raisin industry and all interested persons were invited to attend the meetings and participate in the Committee’s deliberations. Like all Committee meetings, the August 15, 2005, October 4, 2005, January 26, 2006, and March 16, 2006, meetings were public meetings and all entities, both E:\FR\FM\23MYR1.SGM 23MYR1 dsatterwhite on PROD1PC76 with RULES Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Rules and Regulations large and small, were able to express their views on this issue. Also, the Committee has a number of appointed subcommittees to review certain issues and make recommendations to the Committee. The Committee’s Reserve Sales and Marketing Subcommittee met on August 15, 2005, October 4, 2005, January 26, 2006, and March 16, 2006, and discussed these issues in detail. Those meetings were also public meetings and both large and small entities were able to participate and express their views. 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 volume regulation percentages for 2005–06 crop NS raisins covered under the order. Any comments received will be considered prior to finalization of this rule. After consideration of all relevant material presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this 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 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 2005–06 crop year apply to all NS raisins acquired from the beginning of that crop year; (2) handlers are currently marketing their 2005–06 crop NS 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 was unanimously recommended at a public meeting, and need no additional time to comply with these percentages; and (4) this interim final rule provides a 60-day comment period, and all comments timely received will be considered prior to finalization of this rule. VerDate Aug<31>2005 19:30 May 22, 2006 Jkt 208001 List of Subjects in 7 CFR Part 989 29571 SUMMARY: This interim rule amends Department of Homeland Security Grapes, Marketing agreements, regulations to change the process Raisins, Reporting and recordkeeping whereby U.S. Citizenship and requirements. Immigration Services will notify the I For the reasons set forth in the public of the dates and conditions for preamble, 7 CFR part 989 is amended to Premium Processing Service of read as follows: designated employment-based petitions and applications. This interim rule also PART 989—RAISINS PRODUCED clarifies that notices announcing the FROM GRAPES GROWN IN designation of petitions and CALIFORNIA applications for Premium Processing Service will identify the individual I 1. The authority citation for 7 CFR classifications within each designated part 989 continues to read as follows: petition or application that will be Authority: 7 U.S.C. 601–674. eligible for premium processing. I 2. Section 989.258 is added to DATES: Effective date: This interim rule Subpart—Supplementary Regulations to is effective May 23, 2006. read as follows: Comment date: Written comments must be submitted on or before July 24, Note: This section will not appear in the annual Code of Federal Regulations. 2006. ADDRESSES: You may submit comments, § 989.258 Final free and reserve identified by DHS Docket No. USCIS percentages for the 2005–06 crop year. 2005–0038, by one of the following The final percentages for standard methods: Natural (sun-dried) Seedless raisins • Federal eRulemaking Portal: http:// acquired by handlers during the crop www.regulations.gov. Follow the year beginning on August 1, 2005, instructions for submitting comments. • E-mail: You may submit comments which shall be free tonnage and reserve directly to USCIS by e-mail at tonnage, respectively, are designated as rfs.regs@dhs.gov. Include DHS Docket follows: No. USCIS–2005–0038 in the subject Free Reserve line of the message. Varietal type percentage percentage • Mail: The Director, Regulatory Management Division, U.S. Citizenship Natural (sunand Immigration Services, Department Dried) Seedless ................ 82.50 17.50 of Homeland Security, 111 Massachusetts Avenue, NW., 3rd Floor, Washington, DC 20529. To ensure Dated: May 17, 2006. proper handling, please reference DHS Lloyd C. Day, Docket No. USCIS–2005–0038 on your Administrator, Agricultural Marketing correspondence. This mailing address Service. may also be used for paper, disk, or CD– [FR Doc. 06–4747 Filed 5–22–06; 8:45 am] ROM submissions. BILLING CODE 3410–02–P • Hand Delivery/Courier: U.S. Citizenship and Immigration Services, Department of Homeland Security, 111 Massachusetts Avenue, NW., 3rd Floor, DEPARTMENT OF HOMELAND Washington, DC 20529. Contact SECURITY Telephone Number is (202) 272–8377. U.S. Citizenship and Immigration FOR FURTHER INFORMATION CONTACT: Services Kristina Carty-Pratt, Adjudications Officer, Office of Program and 8 CFR Part 103 Regulations Development, U.S. [DHS Docket No. USCIS–2005–0038; CIS No. Citizenship and Immigration Services, Department of Homeland Security, 111 2367–05] Massachusetts Avenue, NW., RIN 1615–AB40 Washington, DC 20536. Contact Telephone Number (202) 272–8400. Changes to the Procedures for SUPPLEMENTARY INFORMATION: Notifying the Public of Premium Processing Service Designations and I. Public Participation Availability Interested persons are invited to participate in this rulemaking by AGENCY: U.S. Citizenship and submitting written data, views, or Immigration Services, DHS. arguments on all aspects of the interim ACTION: Interim rule with request for rule. Comments that will provide the comments. most assistance to U.S. Citizenship and PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\23MYR1.SGM 23MYR1

Agencies

[Federal Register Volume 71, Number 99 (Tuesday, May 23, 2006)]
[Rules and Regulations]
[Pages 29567-29571]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-4747]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. FV06-989-2 IFR]


Raisins Produced From Grapes Grown in California; Final Free and 
Reserve Percentages for 2005-06 Crop Natural (Sun-Dried) Seedless 
Raisins

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: This rule establishes final volume regulation percentages for 
2005-06 crop Natural (sun-dried) Seedless (NS) raisins covered under 
the Federal marketing order for California raisins (order). The order 
regulates the handling of raisins produced from grapes grown in 
California and is locally administered by the Raisin Administrative 
Committee (Committee). The volume regulation percentages are 82.50 
percent free and 17.50 percent reserve. The percentages are intended to 
help stabilize raisin supplies and prices, and strengthen market 
conditions.

DATES: Effective August 1, 2005, through July 31, 2006. The volume 
regulation percentages apply to acquisitions of NS raisins from the 
2005-06 crop until the reserve raisins from that crop are disposed of 
under the marketing order. Comments received by July 24, 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; or E-mail: moab.docketclerk@usda.gov, 
or Internet: http://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 made available for public inspection in 
the Office of the Docket Clerk during regular business hours, or can be 
viewed at: http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Kurt Kimmel, Officer-in-Charge, or 
Rose M. Aguayo, Marketing Specialist, California Marketing Field 
Office, Marketing Order Administration Branch, Fruit and Vegetable 
Programs, AMS, USDA; Telephone: (559) 487-5901; Fax: (559) 487-5906.
    Small businesses may request information on complying with this 
regulation by contacting Jay Guerber, Marketing Order Administration 
Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence 
Avenue, SW., STOP 0237, Washington DC 20250-0237; Telephone: (202) 720-
2491; Fax: (202) 720-8938; or E-mail: Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing 
Agreement 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 (USDA) 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 NS raisins for the 2005-06 crop year, which 
began August 1, 2005, and ends July 31, 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 final volume regulation percentages for 2005-
06 crop NS raisins covered under the order. The volume regulation 
percentages are 82.50 percent free and 17.50 percent reserve. 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; 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. The 
Committee unanimously recommended final percentages on January 26, 
2006, and further justified their recommendation on March 16, 2006.

Computation of Trade Demands

    Section 989.54 of the order prescribes 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 15, 2005, 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 computed using a 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 adding the desirable carryout 
at the end of that crop year. As specified in Sec.  989.154(a), the 
desirable

[[Page 29568]]

carryout for NS raisins shall equal the total shipments of free tonnage 
during August and September for each of the past 5 crop years, 
converted to a natural condition basis, dropping the high and low 
figures, and dividing the remaining sum by three, or 60,000 natural 
condition tons, whichever is higher. For all other varietal types, the 
desirable carryout shall equal the total shipments of free tonnage 
during August, September and one-half of October for each of the past 5 
crop years, converted to a natural condition basis, dropping the high 
and low figures, and dividing the remaining sum by three. In accordance 
with these provisions, the Committee computed and announced the 2005-06 
trade demand for NS raisins at 232,985 tons as shown below.

                         Computed Trade Demands
                        [Natural condition tons]
------------------------------------------------------------------------
                                                                   NS
                                                                raisins
------------------------------------------------------------------------
Prior year's shipments.......................................    319,752
Multiplied by 90 percent.....................................       0.90
Equals adjusted base.........................................    287,777
Minus carryin inventory......................................    114,792
Plus desirable caryout.......................................     60,000
Equals computed NS trade Demand..............................    232,985
------------------------------------------------------------------------

Computation of Preliminary Volume Regulation Percentages

    Section 989.54(b) of the order requires that the Committee 
announce, on or before October 5, preliminary crop estimates and 
determine whether volume regulation is warranted for the varietal types 
for which it computed a trade demand. That section allows the Committee 
to extend the October 5 date up to 5 business days if warranted by a 
late crop.
    The Committee met on October 4, 2005, and announced a preliminary 
crop estimate for NS raisins of 266,227 tons, which is about 19 percent 
lower than the 10-year average of 328,088 tons. NS raisins are the 
major varietal type of California raisin. Adding the carryin inventory 
of 114,792 tons, plus the 266,227-ton crop estimate resulted in a total 
available supply of 381,019 tons, which was significantly higher (164 
percent) than the 232,985-ton trade demand. Thus, the Committee 
determined that volume regulation for NS raisins was warranted. The 
Committee announced preliminary free and reserve percentages for NS 
raisins, which released 85 percent of the computed trade demand since a 
minimum field price (price paid by handlers to producers for their free 
tonnage raisins) had been established. The preliminary percentages were 
74 percent free and 26 percent reserve.
    In addition, preliminary percentages were also announced for Dipped 
Seedless, Golden Seedless, Zante Currant, and Other Seedless raisins. 
It was ultimately determined that volume regulation was only warranted 
for NS raisins. As in past seasons, the Committee submitted its 
marketing policy to USDA for review.

Computation of Final Volume Regulation Percentages

    Pursuant to Sec.  989.54(c), at its January 26, 2006, meeting, the 
Committee announced interim percentages for NS raisins to release 
slightly less than the full trade demand. Based on a revised NS crop 
estimate of 283,000 tons (up from the October estimate of 266,227 
tons), interim percentages for NS raisins were announced at 82.25 
percent free and 17.75 percent reserve.
    Pursuant to Sec.  989.54(d), the Committee also recommended final 
percentages at its January 26, 2006, meeting to release the full trade 
demands for NS raisins. Final percentages were recommended at 82.50 
percent free and 17.50 percent reserve. The Committee's calculations 
and determinations to arrive at final percentages for NS raisins are 
shown in the table below:

                   Final Volume Regulation Percentages
                        [Natural condition tons]
------------------------------------------------------------------------
                                                                   NS
                                                                raisins
------------------------------------------------------------------------
Trade demand.................................................    232,985
Divided by crop estimate.....................................    283,000
Equals the free percentage...................................      82.30
100 minus free percentage equals the reserve percentage......      17.70
------------------------------------------------------------------------

    * * * The Committee recommended rounding the free percentage to 
82.50 percent and reducing the reserve percentage to 17.50 percent to 
compensate for the higher than normal processing shrinkage being 
experienced by handlers with the 2006 NS crop.
    By the week ending February 11, 2006, data showed that deliveries 
of NS raisins exceeded the Committee's crop estimate of 283,000 tons. 
By that date, deliveries of NS raisins totaled 285,052 tons. Thus, at 
USDA's request, the RAC met again on March 16, 2006, and reviewed the 
current available data and the computations used in arriving at the 
recommended final percentages.
    At the March meeting, the Committee continued to support a crop 
estimate of 283,000 tons, because of the higher than normal processing 
shrinkage being experienced with the 2005 NS raisin crop. With a lower 
crop estimate, more free tonnage raisins will be made available to 
handlers for free tonnage use, but due to the above normal processing 
shrinkage, the Committee expects supplies to be in balance with market 
needs.
    By the week ending April 5, 2006, data showed that deliveries of NS 
raisins were at 301,019 tons of NS raisins. Thus, it is likely that 
final deliveries may reach 311,493 tons by July 31, 2006--the end of 
the crop year. The Committee's recommendation will provide handlers 
with 7.5 percent more raisins than would be provided if a 311,493 ton 
estimate had been used, but the additional tonnage is not expected to 
cause disorderly marketing conditions.
    In addition, USDA's ``Guidelines for Fruit, Vegetable, and 
Specialty 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 NS raisins 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. 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. Handlers may sell their 10 plus 10 raisins to any market.
    For NS raisins, the first 10 plus 10 offer was made in February 
2006. A total of 31,975 tons was made available to raisin handlers; all 
of the raisins were purchased. The second 10 plus 10 offer of 31,975 
tons will be made available to handlers by July 31, 2006. Adding the 
total figure of 63,950 tons of 10 plus 10 raisins to the 232,985 ton 
trade demand figure, plus 114,792 tons of 2004-05 carryin NS inventory 
equates to 411,727 tons of natural condition raisins, or 386,855 tons 
of packed raisins, that are available to handlers for free use or 
primary markets. This is about 130 percent of the quantity of NS 
raisins shipped during the 2004-05 crop year (317,998 natural condition 
tons or 300,435 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

[[Page 29569]]

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. When implemented, the additional offers of reserve raisins make 
even more raisins available to primary markets, which is consistent 
with USDA's 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 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 firms are defined 
by the Small Business Administration (13 CFR 121.201) as those having 
annual receipts of less than $6,500,000, and small agricultural 
producers are defined as those having annual receipts of less than 
$750,000. Eleven of the 20 handlers subject to regulation have annual 
sales estimated to be at least $6,500,000, and the remaining 9 handlers 
have sales less than $6,500,000. No more than 9 handlers and a majority 
of producers of California raisins may be classified as small entities.
    Since 1949, the California raisin industry has operated under a 
Federal marketing order. The order contains authority to, among other 
things, limit the portion of a given year's crop that can be marketed 
freely in any outlet by raisin handlers. This volume control mechanism 
is used to stabilize supplies and prices and strengthen market 
conditions.
    Pursuant to Sec.  989.54(d) of the order, this rule establishes 
final volume regulation percentages for 2005-06 crop NS raisins. The 
volume regulation percentages are 82.50 percent free and 17.50 percent 
reserve. 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.
    Volume regulation is warranted this season because the revised crop 
estimate of 283,000 tons combined with the carryin inventory of 114,792 
tons results in a total available supply of 397,792 tons, which is 
about 70 percent higher than the 232,985 ton trade demand.
    The current volume regulation 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 reduce the 
burden of oversupplies in the domestic market.
    Raisin grapes are a perennial crop, so production in any year is 
dependent upon plantings made in earlier years. The sun-drying method 
of producing raisins involves considerable risk because of variable 
weather patterns.
    Even though the product and the industry are viewed as mature, the 
industry has experienced considerable change over the last several 
decades. Before the 1975-76 crop year, more than 50 percent of the 
raisins were packed and sold directly to consumers. Now, about 65 
percent of raisins are sold in bulk. This means that raisins are now 
sold to consumers mostly as an ingredient in another product such as 
cereal and baked goods. In addition, for a few years in the early 
1970's, over 50 percent of the raisin grapes were sold to the wine 
market for crushing. Since then, the percent of raisin-variety grapes 
sold to the wine industry has decreased.
    California's grapes are classified into three groups--table grapes, 
wine grapes, and raisin-variety grapes. Raisin-variety grapes are the 
most versatile of the three types. They can be marketed as fresh 
grapes, crushed for juice 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. This type of situation 
introduces a certain amount of variability into the raisin market. 
Although the size of the crop for raisin-variety grapes may be known, 
the amount dried for raisins depends on the demand for crushing. This 
makes the marketing of raisins a more difficult task. These supply 
fluctuations can result in 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 prices for NS raisins remained fairly 
steady between the 1993-94 through the 1997-98 seasons, although 
production varied. As shown in the table below, during those years, 
production varied from a low of 272,063 tons in 1996-97 to a high of 
387,007 tons in 1993-94.
    According to Committee data, the total producer return per ton 
during those years, which includes proceeds from both free tonnage plus 
reserve pool raisins, has varied from a low of $904.60 in 1993-94 to a 
high of $1,049 in 1996-97. Total producer prices for the 1998-99 and 
1999-2000 seasons increased significantly due to back-to-back short 
crops during those years. Producer prices dropped dramatically for the 
2000-01, 2001-02, and 2002-03 crop years due to record-size production, 
large carry-in inventories, and stagnant demand. However, the producer 
prices increased slightly with a shorter crop in 2003-04 and rebounded 
to pre-1998-99 prices during the 2004-05 crop years as noted below:

                    Natural Seedless Producer Prices
------------------------------------------------------------------------
                                                 Deliveries
                                                  (natural     Producer
                   Crop year                     condition      prices
                                                   tons)      (per ton)
------------------------------------------------------------------------
2004-05.......................................      265,262          \2\
                                                                $1210.00
2003-04.......................................      296,864   \1\ 567.00
2002-03.......................................      388,010   \1\ 491.20
2001-02.......................................      377,328       650.94
2000-01.......................................      432,616       603.36
1999-2000.....................................      299,910     1,211.25
1998-99.......................................      240,469          \2\
                                                                1,290.00
1997-98.......................................      382,448       946.52
1996-97.......................................      272,063     1,049.20
1995-96.......................................      325,911     1,007.19
1994-95.......................................      378,427       928.27
1993-94.......................................      387,007       904.60
------------------------------------------------------------------------
\1\ Return-to-date, reserve pool still open.
\2\ No volume regulation.

    There are essentially two broad markets for raisins--domestic and 
export. In recent years, both domestic and export shipments have been 
increasing. Domestic shipments decreased from a high of 204,805 packed 
tons during the 1990-91 crop year to a low of 156,325 packed tons in 
1999-2000. Since that time domestic shipments steadily increased from 
174,117 packed tons during the 2000-01 crop year to 193,680 packed tons 
during the 2004-05 crop year. In addition, exports decreased from 
114,576 packed tons in 1991-92 to a low of 91,600 packed tons in the 
1999-2000 crop year. In recent years, export shipments have increased 
from a low of 101,537 tons during the 2002-03 crop year to 106,755

[[Page 29570]]

tons of raisins during the 2004-05 crop year.
    Moreover, the per capita consumption of raisins has declined from 
2.09 pounds in 1988 to 1.46 pounds in 2004. This decrease is consistent 
with the decrease in the per capita consumption of dried fruits in 
general, which is due to the increasing availability of most types of 
fresh fruit throughout the year.
    While the overall demand for raisins has been increasing (as 
reflected in increased in commercial shipments), production has been 
decreasing. Deliveries of NS dried raisins from producers to handlers 
reached an all-time high of 432,616 tons in the 2000-01 crop year. This 
large crop was preceded by two short crop years; deliveries were 
240,469 tons in 1998-99 and 299,910 tons in 1999-2000. Deliveries for 
the 2000-01 crop year soared to a record level because of increased 
bearing acreage and yields. Deliveries for the 2001-02 crop year were 
at 377,328 tons, 388,010 tons for the 2002-03 crop year, 296,864 for 
the 2003-04 crop year and 265,262 tons for the 2004-05 crop year. After 
three crop years of high production and a large 2001-02 carryin 
inventory, the industry diverted raisins or removed 41,000 acres in 
2001; 27,000 acres in 2002; and 15,000 acres of vines in 2003 to reduce 
the industry's burdensome supply of raisins. These actions resulted in 
declining deliveries of 296,865 tons for the 2003-04 crop year and 
265,262 tons for the 2004-05 crop year.
    The order permits the industry to exercise supply control 
provisions, which allow for the establishment of free and reserve 
percentages, and establishment of a reserve pool. One of the primary 
purposes of establishing free and reserve percentages is to equilibrate 
supply and demand. If raisin markets are over-supplied with product, 
producer prices will decline.
    Raisins are generally marketed at relatively lower price levels in 
the more elastic export market than in the more inelastic domestic 
market. This results in a larger volume of raisins being marketed and 
enhances producer returns. In addition, this system allows the U.S. 
raisin industry to be more competitive in export markets.
    To assess the impact that volume control has on the prices 
producers receive for their product, an econometric model has been 
constructed. The model developed is for the purpose of estimating 
nominal prices under a number of scenarios using the volume control 
authority under the Federal marketing order. The price producers 
receive for the harvest and delivery of their crop is largely 
determined by the level of production and the volume of carryin 
inventories. The Federal marketing order permits the industry to 
exercise supply control provisions, which allow for the establishment 
of reserve and free percentages for primary markets, and a reserve 
pool. The establishment of reserve percentages impacts the production 
that is marketed in the primary markets.
    The reserve percentage limits what handlers can market as free 
tonnage. Assuming the 17.50 percent reserve limits the total free 
tonnage to 233,475 natural condition tons (.8250 x the 283,000-ton crop 
estimate) and carryin is 114,792 natural condition tons, and all of the 
63,950 natural condition tons of reserve raisins offered for sale under 
the 10 plus 10 offers are purchased, then the total free supply is 
estimated at 412,217 natural condition tons. Data available as of April 
5, 2006, shows that deliveries of NS raisins are at 301,019 tons. If 
the Committee used a 311,493 ton crop estimate, and assuming a 25.2 
percent reserve limits the total free tonnage to 232,996 natural 
condition tons (.7480 x the 311,493-ton crop estimate) and carryin and 
10+10 offers and purchases remained the same, then the total free 
supply would be estimated at 411,738 natural condition tons, a 
difference of 479 tons. The Committee believes that this additional 
tonnage will provide handlers with enough free tonnage to compensate 
for the above normal processing shrink being experienced with this 
season's crop.
    The econometric model estimates prices to be $63 per ton higher 
than under an unregulated scenario. This price increase is beneficial 
to all producers regardless of size and enhances producers' total 
revenues in comparison to no volume control. Establishing a reserve 
allows the industry to help stabilize supplies in both domestic and 
export markets, while improving returns to producers.
    Free and reserve percentages are established by varietal type, and 
usually 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, it has been determined that volume regulation is 
warranted this season for only one of the nine raisin varietal types 
defined under the order.
    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. For NS raisins, with the exception of the 
1998-99 and 2004-05 crop years, 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. While the level 
of benefits of this rulemaking are difficult to quantify, the 
stabilizing effects of the volume regulations impact 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 in past seasons. Thus, this action imposes no additional 
reporting or recordkeeping requirements on either small or large raisin 
handlers. The forms require information which is readily available from 
handler records and which can be provided without data processing 
equipment or trained statistical staff. The information collection and 
recordkeeping requirements have been previously approved by the Office 
of Management and Budget (OMB) under OMB Control No. 0581-0178. 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.
    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.
    In addition, USDA has not identified any relevant Federal rules 
that duplicate, overlap, or conflict with this rule.
    Further, the Committee's meetings were widely publicized throughout 
the raisin industry and all interested persons were invited to attend 
the meetings and participate in the Committee's deliberations. Like all 
Committee meetings, the August 15, 2005, October 4, 2005, January 26, 
2006, and March 16, 2006, meetings were public meetings and all 
entities, both

[[Page 29571]]

large and small, were able to express their views on this issue.
    Also, the Committee has a number of appointed subcommittees to 
review certain issues and make recommendations to the Committee. The 
Committee's Reserve Sales and Marketing Subcommittee met on August 15, 
2005, October 4, 2005, January 26, 2006, and March 16, 2006, and 
discussed these issues in detail. Those meetings were also public 
meetings and both large and small entities were able to participate and 
express their views. 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 volume 
regulation percentages for 2005-06 crop NS raisins covered under the 
order. Any comments received will be considered prior to finalization 
of this rule.
    After consideration of all relevant material presented, including 
the information and recommendation submitted by the Committee and other 
available information, it is hereby found that this 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 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 2005-06 crop year apply to 
all NS raisins acquired from the beginning of that crop year; (2) 
handlers are currently marketing their 2005-06 crop NS 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 was unanimously recommended at a public 
meeting, and need no additional time to comply with these percentages; 
and (4) this interim final rule provides a 60-day comment period, and 
all comments timely 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.


0
For the reasons set forth in the preamble, 7 CFR part 989 is amended to 
read as follows:

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

0
1. The authority citation for 7 CFR part 989 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

0
2. Section 989.258 is added to Subpart--Supplementary Regulations to 
read as follows:

    Note: This section will not appear in the annual Code of Federal 
Regulations.

Sec.  989.258  Final free and reserve percentages for the 2005-06 crop 
year.

    The final percentages for standard Natural (sun-dried) Seedless 
raisins acquired by handlers during the crop year beginning on August 
1, 2005, which shall be free tonnage and reserve tonnage, respectively, 
are designated as follows:

------------------------------------------------------------------------
                                                    Free       Reserve
                 Varietal type                   percentage   percentage
------------------------------------------------------------------------
Natural (sun-Dried) Seedless..................        82.50        17.50
------------------------------------------------------------------------


    Dated: May 17, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-4747 Filed 5-22-06; 8:45 am]
BILLING CODE 3410-02-P