Raisins Produced From Grapes Grown in California; Final Free and Reserve Percentages for 2005-06 Crop Natural (Sun-Dried) Seedless Raisins, 2173-2177 [E7-623]

Download as PDF Federal Register / Vol. 72, No. 11 / Thursday, January 18, 2007 / Rules and Regulations Branch, Fruit and Vegetable Programs, AMS, USDA. * * * * * Dated: January 11, 2007. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E7–593 Filed 1–17–07; 8:45 am] DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 989 [Docket No. AMS–FV–06–0183; FV06–989– 2 FIR] 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: Final rule. jlentini on PROD1PC65 with RULES AGENCY: SUMMARY: The Department of Agriculture (USDA) is adopting, as a final rule, without change, an interim final rule that established 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 Date: February 20, 2007. 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. FOR FURTHER INFORMATION CONTACT: Rose M. Aguayo, Marketing Specialist, or Kurt Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: (559) 487– 5901; Fax: (559) 487–5906; or E-mail: Rose.Aguayo@usda.gov or Kurt.Kimmel@usda.gov. 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 16:35 Jan 17, 2007 Jkt 211001 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.’’ 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 continues in effect the action that established final free and reserve percentages for NS raisins for the 2005–06 crop year, which began August 1, 2005, and ended 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 continues in effect the action that established 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 and were established through an interim final rule published on May 23, 2006 (71 FR 29567). 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 SUPPLEMENTARY INFORMATION: BILLING CODE 3410–02–P VerDate Aug<31>2005 Avenue, SW., STOP 0237, Washington DC 20250–0237; Telephone: (202) 720– 2491; Fax: (202) 720–8938; or E-mail: Jay.Guerber@usda.gov. PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 2173 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 its recommendation on March 16, 2006. Computation of Trade Demand 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 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. E:\FR\FM\18JAR1.SGM 18JAR1 2174 Federal Register / Vol. 72, No. 11 / Thursday, January 18, 2007 / Rules and Regulations tons), interim percentages for NS raisins were announced at 82.25 percent free [Natural condition tons] and 17.75 percent reserve. Pursuant to § 989.54(d), the NS Committee also recommended final raisins percentages at its January 26, 2006, Prior year’s shipments .................... 319,752 meeting to release the full trade demand Multiplied by 90 percent ................. 0.90 for NS raisins. Final percentages were Equals adjusted base ..................... 287,777 recommended at 82.50 percent free and Minus carryin inventory .................. 114,792 Plus desirable caryout .................... 60,000 17.50 percent reserve. The Committee’s calculations and determinations to Equals computed NS trade Demand ........................................... 232,985 arrive at final percentages for NS raisins are shown in the table below: Computation of Preliminary Volume FINAL VOLUME REGULATION Regulation Percentages PERCENTAGES Section 989.54(b) of the order requires [Natural condition tons] that the Committee announce, on or before October 5, preliminary crop NS estimates and determine whether raisins volume regulation is warranted for the varietal types for which it computed a Trade demand ................................ 232,985 trade demand. That section allows the Divided by crop estimate ................ 283,000 Committee to extend the October 5 date Equals the free percentage ............ 82.30 100 minus free percentage equals up to 5 business days if warranted by a the reserve percentage ............... 17.70 late crop. The Committee met on October 4, * * * The Committee recommended 2005, and announced a preliminary rounding the free percentage to 82.50 crop estimate for NS raisins of 266,227 percent and reducing the reserve tons, which is about 19 percent lower percentage to 17.50 percent to than the 10-year average of 328,088 compensate for the higher than normal tons. NS raisins are the major varietal processing shrinkage being experienced type of California raisin. Adding the by handlers with the 2005 NS crop. carry in inventory of 114,792 tons, plus By the week ending February 11, the 266,227-ton crop estimate resulted 2006, data showed that deliveries of NS in a total available supply of 381,019 raisins exceeded the Committee’s crop tons, which was significantly higher (164 percent) than the 232,985-ton trade estimate of 283,000 tons. By that date, deliveries of NS raisins totaled 285,052 demand. Thus, the Committee tons. Thus, at USDA’s request, the determined that volume regulation for Committee met again on March 16, NS raisins was warranted. The 2006, and reviewed the current Committee announced preliminary free available data and the computations and reserve percentages for NS raisins, used in arriving at the recommended which released 85 percent of the final percentages. computed trade demand since a At the March meeting, the Committee minimum field price (price paid by continued to support a crop estimate of handlers to producers for their free 283,000 tons, because of the higher than tonnage raisins) had been established. normal processing shrinkage being The preliminary percentages were 74 experienced with the 2005 NS raisin percent free and 26 percent reserve. crop. With a lower crop estimate, more In addition, preliminary percentages free tonnage raisins would be made were announced for Dipped Seedless, available to handlers for free tonnage Golden Seedless, Zante Currant, and Other Seedless raisins. It was ultimately use, but due to the above normal processing shrinkage the Committee determined that volume regulation was expected supplies to be in balance with only warranted for NS raisins. As in market needs. past seasons, the Committee submitted By the end of the crop year, July 31, its marketing policy to USDA for 2006, final deliveries of NS raisins review. totaled 319,126 tons. Thus, the Computation of Final Volume Committee’s recommendation provided Regulation Percentages handlers with an additional 30,294 tons Pursuant to § 989.54(c), at its January over the computed trade demand, but 26, 2006, meeting, the Committee the additional tonnage did not appear to announced interim percentages for NS impact marketing conditions. raisins to release slightly less than the In addition, USDA’s ‘‘Guidelines for full trade demand. Based on a revised Fruit, Vegetable, and Specialty Crop NS crop estimate of 283,000 tons (up Marketing Orders’’ (Guidelines) specify from the October estimate of 266,227 that 110 percent of recent years’ sales jlentini on PROD1PC65 with RULES COMPUTED TRADE DEMAND VerDate Aug<31>2005 16:35 Jan 17, 2007 Jkt 211001 PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 should be made available to primary markets each season for marketing orders utilizing reserve pool authority. This goal was met for NS raisins by the establishment of final percentages, which released 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 § 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, and the second offer was made in July 2006. A total of 63,950 tons was made available to raisin handlers through these offers, and 31,975 tons were purchased by and released to handlers during the 2005–06 crop year. Adding the 31,975 tons of 10 plus 10 raisins to the 232,985 ton trade demand, plus the 30,294 tons of additional raisins released to handlers through use of the 283,000 ton crop estimate to compute final percentages, plus 114,792 tons of carry-in inventory equates to 410,046 tons of natural condition raisins, or 385,275 tons of packed raisins, that were available to handlers for shipment to free or primary markets. This is about 128 percent of the quantity of NS raisins shipped during the 2004–05 crop year (319,752 natural condition tons or 300,435 packed tons). In addition to the 10 plus 10 offers, § 989.67(j) of the order provides authority for sales of reserve raisins to handlers under certain conditions such as a national emergency, crop failure, change in economic or marketing conditions, or if free tonnage shipments in the current crop year exceed shipments of a comparable period of the prior crop year. Such reserve raisins may be sold by handlers to any market. When implemented, the additional offers of reserve raisins make even more raisins available to primary markets, which is consistent with USDA’s Guidelines. Final 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 final regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly E:\FR\FM\18JAR1.SGM 18JAR1 jlentini on PROD1PC65 with RULES Federal Register / Vol. 72, No. 11 / Thursday, January 18, 2007 / Rules and Regulations 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 (SBA) (13 CFR 121.201) as those having annual receipts of less that $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. If the primary market (the normal domestic market) is oversupplied with raisins, grower prices decline substantially. Pursuant to § 989.54(d) of the order, this rule continues in effect the action that established 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 was warranted for the 2005–06 season because acquisitions of 319,126 tons through July 31, 2006, combined with the carryin inventory of 114,792 tons resulted in a total available supply of 433,918 tons, which was about 86 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, VerDate Aug<31>2005 16:35 Jan 17, 2007 Jkt 211001 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 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, 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 PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 2175 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, producer prices increased slightly with a shorter crop in 2003–04 and rebounded to pre-1998–99 prices during the 2004–05 and 2005–06 crop years as noted below: NATURAL SEEDLESS PRODUCER PRICES Crop year 2005–06 ............ 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) 319,126 265,262 296,864 388,010 377,328 432,616 299,910 240,469 382,448 272,063 325,911 378,427 387,007 Producer Prices (per ton) 1$1210.00 21210.00 1567.00 1491.20 650.94 603.36 1,211.25 21,290.00 946.52 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. Excluding the 2005–06 crop year, both domestic and export shipments have been increasing in recent years. 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, but fell to 186,358 packed tons in 2005–06. 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. Export shipments increased from 101,537 tons during the 2002–03 crop year to 106,755 tons of raisins during the 2004–05 crop year, but fell to 97,672 packed tons in 2005– 06. Moreover, the U.S. 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 increased in two out of the last three years (as reflected in increased commercial shipments), production has E:\FR\FM\18JAR1.SGM 18JAR1 jlentini on PROD1PC65 with RULES 2176 Federal Register / Vol. 72, No. 11 / Thursday, January 18, 2007 / Rules and Regulations 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. Deliveries increased in 2005–06 to 319,126 tons. 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. The reserve percentage limits what handlers can market as free tonnage. Data available as of July 31, 2006, showed that deliveries of NS raisins were at 319,126 tons. The 17.50 percent reserve limited the total free tonnage to 263,279 natural condition tons (.8250 x the 319,126 ton crop). Adding 263,279 ton figure with the carryin of 114,792 tons, plus the 31,975 tons of reserve raisins that were purchased by and released to handlers during the 2005–06 crop year under the 10 plus 10 offers, made the total free supply equal to 410,046 natural condition tons. To assess the impact that volume control has on the prices growers receive for their product, a price dependent econometric model was estimated. This model is used to estimate grower prices both with and without the use of volume control. The volume control used by the raisin industry will result in decreased VerDate Aug<31>2005 16:35 Jan 17, 2007 Jkt 211001 shipments to primary markets. Without volume control the primary market (domestic) could be over-supplied resulting in lower grower prices and the build-up of unwanted inventories. The econometric model is used to estimate the difference between grower prices with and without restrictions. With volume controls, grower prices are estimated to be approximately $40 per ton higher than without volume controls. 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 was determined that volume regulation was warranted for the 2005–06 season for only one of the nine raisin varietal types defined under the order. The free and reserve percentages continued in effect the release of 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. The AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. There are some reporting, recordkeeping and other compliance requirements under the order. The reporting and recordkeeping burdens are necessary for compliance purposes PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 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. 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 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 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. An interim final rule concerning this action was published in the Federal Register on May 23, 2006 (71 FR 29567). Copies of the rule were mailed to all Committee members and alternates, the Raisin Bargaining Association, handlers, and dehydrators. In addition, the rule was made available through the Internet by the Office of the Federal Register and USDA. That rule provided for a 60-day comment period that ended on July 24, 2006. No comments were received. However, the interim final rule identified the effective date as August 1, 2005, through July 3, 2006. This final rule clarifies that the effective date of the volume percentages for the 2005–06 NS raisins is simply August 1, 2005, and the percentages apply to all raisins E:\FR\FM\18JAR1.SGM 18JAR1 Federal Register / Vol. 72, No. 11 / Thursday, January 18, 2007 / Rules and Regulations acquired during the 2005–06 crop year and continue in effect until all 2005–06 reserve raisins are disposed of under the order. Accordingly, § 989.258 will appear in the Code of Federal Regulations. 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 (71 FR 29567, May 23, 2006) will tend to effectuate the declared policy of the Act. List of Subjects in 7 CFR Part 989 Grapes, Marketing agreements, Raisins, Reporting and recordkeeping requirements. Rolls-Royce plc RB211 series turbofan engines. We published AD 2006–17–12 in the Federal Register on August 23, 2006 (71 FR 49339). An incorrect engine model number exists in the applicability paragraph and in the title of Table 5. Also, an incorrect serial number appears in Table 1. This document corrects these numbers. In all other respects, the original document remains the same. DATES: Effective Date: Effective January 18, 2007. FOR FURTHER INFORMATION CONTACT: Ian Dargin, Aerospace Engineer, Engine Certification Office, FAA, Engine and Propeller Directorate, 12 New England Executive Park, Burlington, MA, 01803; telephone (781) 238–7178; fax (781) 238–7199. SUPPLEMENTARY INFORMATION: A final rule AD, FR Doc. E6–13910, that applies to Rolls-Royce plc RB211 series turbofan engines was published in the Federal Register on August 23, 2006 (71 FR 49339). The following corrections are needed: § 39.13 [Corrected] On page 49340, in the third column, in applicability paragraph (c), in the fourth line, ‘‘RB211–535E4–C’’ is corrected to read ‘‘RB211–535E4–C–37’’. Also, on page 49341, in Table 1, in the fourth column, in the last line, ‘‘WGQDY90005’’ is corrected to read ‘‘WGQDY0005’’. Also, on page 49342, in the first column, in the Table 5 title, ‘‘RB211–02’’ is corrected to read ‘‘RB211–22B–02’’. I PART 989—RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA Accordingly, the interim final rule amending 7 CFR part 989 which was published at 71 FR 29567 on May 23, 2006, is adopted as a final rule without change. I Dated: January 12, 2007. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E7–623 Filed 1–17–07; 8:45 am] Issued in Burlington, MA, on January 10, 2007. Francis A. Favara, Manager, Engine and Propeller Directorate, Aircraft Certification Service. [FR Doc. E7–497 Filed 1–17–07; 8:45 am] BILLING CODE 3410–02–P BILLING CODE 4910–13–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration DEPARTMENT OF TRANSPORTATION 14 CFR Part 39 Federal Aviation Administration [Docket No. FAA–2006–25584; Directorate Identifier 2000–NE–62–AD; Amendment 39– 14733; AD 2006–17–12] 14 CFR Part 39 RIN 2120–AA64 Airworthiness Directives; Rolls-Royce plc RB211 Series Turbofan Engines; Correction. Federal Aviation Administration, DOT. ACTION: Final rule; correction. jlentini on PROD1PC65 with RULES AGENCY: 16:35 Jan 17, 2007 Jkt 211001 RIN 2120–AA64 Airworthiness Directives; Dassault Model F2000EX Airplanes Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule; request for comments. AGENCY: SUMMARY: This document makes corrections to Airworthiness Directive (AD) 2006–17–12. That AD applies to VerDate Aug<31>2005 [Docket No. FAA–2007–26855; Directorate Identifier 2006–NM–264–AD; Amendment 39–14888; AD 2007–02–01] PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 2177 SUMMARY: We are adopting a new airworthiness directive (AD) for the products listed above. This AD results from mandatory continuing airworthiness information (MCAI) issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as incorrect monitoring of the fire detection system; therefore, its integrity is not guaranteed at all times. This AD requires actions that are intended to address the unsafe condition described in the MCAI. DATES: This AD becomes effective February 2, 2007. The Director of the Federal Register approved the incorporation by reference of a certain document listed in this AD as of February 2, 2007. We must receive comments on this AD by March 19, 2007. ADDRESSES: You may send comments by any of the following methods: • DOT Docket Web Site: Go to https://dms.dot.gov and follow the instructions for sending your comments electronically. • Fax: (202) 493–2251. • Mail: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL–401, Washington, DC 20590– 0001. • Hand Delivery: Room PL–401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • Federal Rulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. Examining the AD Docket You may examine the AD docket on the Internet at https://dms.dot.gov; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Office (telephone (800) 647– 5227) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt. FOR FURTHER INFORMATION CONTACT: Tom Rodriguez, Aerospace Engineer, International Branch, ANM–116, FAA, Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton, Washington 98057–3356; telephone (425) 227–1137; fax (425) 227–1149. SUPPLEMENTARY INFORMATION: E:\FR\FM\18JAR1.SGM 18JAR1

Agencies

[Federal Register Volume 72, Number 11 (Thursday, January 18, 2007)]
[Rules and Regulations]
[Pages 2173-2177]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-623]


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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 989

[Docket No. AMS-FV-06-0183; FV06-989-2 FIR]


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: Final rule.

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

SUMMARY: The Department of Agriculture (USDA) is adopting, as a final 
rule, without change, an interim final rule that established 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 Date: February 20, 2007. 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.

FOR FURTHER INFORMATION CONTACT: Rose M. Aguayo, Marketing Specialist, 
or Kurt Kimmel, Regional Manager, California Marketing Field Office, 
Marketing Order Administration Branch, Fruit and Vegetable Programs, 
AMS, USDA; Telephone: (559) 487-5901; Fax: (559) 487-5906; or E-mail: 
Rose.Aguayo@usda.gov or Kurt.Kimmel@usda.gov.
    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.''
    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 continues in effect the action 
that established final free and reserve percentages for NS raisins for 
the 2005-06 crop year, which began August 1, 2005, and ended 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 continues in effect the action that established 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 and were established through an interim final 
rule published on May 23, 2006 (71 FR 29567). 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 its recommendation on March 16, 2006.

Computation of Trade Demand

    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 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.

[[Page 2174]]



                          Computed Trade Demand
                        [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 carry in 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 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 
demand 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 2005 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 Committee 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 would be made available to 
handlers for free tonnage use, but due to the above normal processing 
shrinkage the Committee expected supplies to be in balance with market 
needs.
    By the end of the crop year, July 31, 2006, final deliveries of NS 
raisins totaled 319,126 tons. Thus, the Committee's recommendation 
provided handlers with an additional 30,294 tons over the computed 
trade demand, but the additional tonnage did not appear to impact 
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 
was met for NS raisins by the establishment of final percentages, which 
released 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, and the second offer was made in July 2006. A total of 63,950 
tons was made available to raisin handlers through these offers, and 
31,975 tons were purchased by and released to handlers during the 2005-
06 crop year. Adding the 31,975 tons of 10 plus 10 raisins to the 
232,985 ton trade demand, plus the 30,294 tons of additional raisins 
released to handlers through use of the 283,000 ton crop estimate to 
compute final percentages, plus 114,792 tons of carry-in inventory 
equates to 410,046 tons of natural condition raisins, or 385,275 tons 
of packed raisins, that were available to handlers for shipment to free 
or primary markets. This is about 128 percent of the quantity of NS 
raisins shipped during the 2004-05 crop year (319,752 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 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.

Final 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 final regulatory flexibility analysis.
    The purpose of the RFA is to fit regulatory actions to the scale of 
business subject to such actions in order that small businesses will 
not be unduly

[[Page 2175]]

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 (SBA) (13 CFR 121.201) as those 
having annual receipts of less that $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. If the primary market (the normal domestic market) is over-
supplied with raisins, grower prices decline substantially.
    Pursuant to Sec.  989.54(d) of the order, this rule continues in 
effect the action that established 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 was warranted for the 2005-06 season because 
acquisitions of 319,126 tons through July 31, 2006, combined with the 
carryin inventory of 114,792 tons resulted in a total available supply 
of 433,918 tons, which was about 86 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, 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, producer 
prices increased slightly with a shorter crop in 2003-04 and rebounded 
to pre-1998-99 prices during the 2004-05 and 2005-06 crop years as 
noted below:

                    Natural Seedless Producer Prices
------------------------------------------------------------------------
                                                 Deliveries
                                                  (natural     Producer
                   Crop year                     condition      Prices
                                                   tons)      (per ton)
------------------------------------------------------------------------
2005-06.......................................      319,126  \1\$1210.00
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. Excluding the 2005-06 crop year, both domestic and export 
shipments have been increasing in recent years. 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, but fell to 186,358 packed tons in 2005-06. 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. Export shipments increased from 
101,537 tons during the 2002-03 crop year to 106,755 tons of raisins 
during the 2004-05 crop year, but fell to 97,672 packed tons in 2005-
06.
    Moreover, the U.S. 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 increased in two out of 
the last three years (as reflected in increased commercial shipments), 
production has

[[Page 2176]]

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. Deliveries increased in 2005-06 
to 319,126 tons.
    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.
    The reserve percentage limits what handlers can market as free 
tonnage. Data available as of July 31, 2006, showed that deliveries of 
NS raisins were at 319,126 tons. The 17.50 percent reserve limited the 
total free tonnage to 263,279 natural condition tons (.8250 x the 
319,126 ton crop). Adding 263,279 ton figure with the carryin of 
114,792 tons, plus the 31,975 tons of reserve raisins that were 
purchased by and released to handlers during the 2005-06 crop year 
under the 10 plus 10 offers, made the total free supply equal to 
410,046 natural condition tons.
    To assess the impact that volume control has on the prices growers 
receive for their product, a price dependent econometric model was 
estimated. This model is used to estimate grower prices both with and 
without the use of volume control. The volume control used by the 
raisin industry will result in decreased shipments to primary markets. 
Without volume control the primary market (domestic) could be over-
supplied resulting in lower grower prices and the build-up of unwanted 
inventories.
    The econometric model is used to estimate the difference between 
grower prices with and without restrictions. With volume controls, 
grower prices are estimated to be approximately $40 per ton higher than 
without volume controls. 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 was determined that volume regulation was warranted 
for the 2005-06 season for only one of the nine raisin varietal types 
defined under the order.
    The free and reserve percentages continued in effect the release of 
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.
    The AMS is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.
    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. 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 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 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.
    An interim final rule concerning this action was published in the 
Federal Register on May 23, 2006 (71 FR 29567). Copies of the rule were 
mailed to all Committee members and alternates, the Raisin Bargaining 
Association, handlers, and dehydrators. In addition, the rule was made 
available through the Internet by the Office of the Federal Register 
and USDA. That rule provided for a 60-day comment period that ended on 
July 24, 2006. No comments were received. However, the interim final 
rule identified the effective date as August 1, 2005, through July 3, 
2006. This final rule clarifies that the effective date of the volume 
percentages for the 2005-06 NS raisins is simply August 1, 2005, and 
the percentages apply to all raisins

[[Page 2177]]

acquired during the 2005-06 crop year and continue in effect until all 
2005-06 reserve raisins are disposed of under the order. Accordingly, 
Sec.  989.258 will appear in the Code of Federal Regulations.
    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.
    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 (71 FR 29567, May 23, 2006) will tend to effectuate 
the declared policy of the Act.

List of Subjects in 7 CFR Part 989

    Grapes, Marketing agreements, Raisins, Reporting and recordkeeping 
requirements.

PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA

0
Accordingly, the interim final rule amending 7 CFR part 989 which was 
published at 71 FR 29567 on May 23, 2006, is adopted as a final rule 
without change.

    Dated: January 12, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-623 Filed 1-17-07; 8:45 am]
BILLING CODE 3410-02-P