Hazelnuts Grown in Oregon and Washington; Establishment of Final Free and Restricted Percentages for the 2006-2007 Marketing Year, 23761-23765 [E7-8235]
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Rules and Regulations
Federal Register
Vol. 72, No. 83
Tuesday, May 1, 2007
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contains regulatory documents having general
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 982
[Docket No. AMS–FV–06–0175; FV07–982–
1 FIR]
Hazelnuts Grown in Oregon and
Washington; Establishment of Final
Free and Restricted Percentages for
the 2006–2007 Marketing Year
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
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AGENCY:
SUMMARY: The Department of
Agriculture (USDA) is adopting, as a
final rule, an interim final rule
establishing final free and restricted
percentages for domestic inshell
hazelnuts for the 2006–2007 marketing
year under the Federal marketing order
for hazelnuts grown in Oregon and
Washington. This rule continues in
effect the final free and restricted
percentages of 8.2840 percent and
91.7160 percent, respectively. The
percentages allocate the quantity of
domestically produced hazelnuts which
may be marketed in the domestic inshell
market (free) and the quantity of
domestically produced hazelnuts that
must be disposed of in outlets approved
by the Board (restricted). Volume
regulation is intended to stabilize the
supply of domestic inshell hazelnuts to
meet the limited domestic demand for
such hazelnuts with the goal of
providing producers with reasonable
returns. This rule was recommended
unanimously by the Hazelnut Marketing
Board (Board), which is the agency
responsible for local administration of
the marketing order.
DATES: Effective: May 31, 2007 the
regulation published January 22, 2007
(72 FR 2599, Jan. 22, 2007) is confirmed
as final. This rule applies to all 2006–
2007 marketing year restricted hazelnuts
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until they are properly disposed of in
accordance with marketing order
requirements.
FOR FURTHER INFORMATION CONTACT:
Barry Broadbent or Gary Olson,
Northwest Marketing Field Office,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, 1220 SW Third Avenue,
Suite 385, Portland, OR 97204;
Telephone: (503) 326–2724, Fax: (503)
326–7440, or e-mail:
Barry.Broadbent@usda.gov or
GaryD.Olson@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
No. 115 and Marketing Order No. 982,
both as amended (7 CFR part 982),
regulating the handling of hazelnuts
grown in Oregon and Washington,
hereinafter referred to as the ‘‘order.’’
The order is effective under the
Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601–674),
hereinafter referred to as the ‘‘Act.’’
USDA is issuing this rule in
conformance with Executive Order
12866.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. It is intended that this action
apply to all merchantable hazelnuts
handled during the 2006–2007
marketing year beginning July 1, 2006.
This action applies to all 2006–2007
marketing year restricted hazelnuts until
they are properly disposed of in
accordance with marketing order
requirements. 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
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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 free and
restricted percentages which allocate
the quantity of domestically produced
hazelnuts which may be marketed in
domestic inshell markets (free) and
hazelnuts which must be exported,
shelled, or otherwise disposed of by
handlers (restricted). The Board met
and, after determining that volume
regulation would tend to effectuate the
declared policy of the Act, developed a
marketing policy to be employed for the
duration of the 2006–2007 marketing
year. Volume regulation is intended to
stabilize the supply of domestic inshell
hazelnuts to meet the limited domestic
demand for such hazelnuts with the
goal of providing producers with
reasonable returns. Based on an estimate
of the domestic inshell trade demand
and total supply of domestically
produced hazelnuts available for the
2006–2007 marketing year, the Board
voted unanimously at their November
15, 2006, meeting to recommend to
USDA that the final free and restricted
percentages for the 2006–2007
marketing year be established at 8.2840
percent and 91.7160 percent,
respectively.
The Board’s authority to recommend
volume regulation and use
computations to determine the
allocation of hazelnuts to individual
markets is specified in § 982.40 of the
order. Under the order’s provisions, free
and restricted market allocations of
hazelnuts are expressed as percentages
of the total hazelnut supply subject to
regulation. The percentages are derived
by dividing the estimated domestic
inshell trade demand (computed by
formula) by the Board’s estimate of the
total domestically produced supply of
hazelnuts that are expected to be
available over the course of the
marketing year.
Inshell trade demand, the key
component of the marketing policy, is
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the estimated quantity of inshell
hazelnuts necessary to adequately
supply the domestic inshell hazelnut
market for the duration of the marketing
year. The Board determines the
domestic inshell trade demand for each
year and uses that estimate as the basis
for setting the percentage of the
available supply of domestically
produced hazelnuts that handlers may
ship to the domestic inshell market
throughout the marketing season. The
order specifies that inshell trade
demand be computed by averaging the
preceding three years’ trade acquisitions
of inshell hazelnuts, allowing
adjustments for abnormal crop or
marketing conditions. In addition, the
Board may increase the computed
inshell trade demand by up to 25
percent, if market conditions warrant an
increase.
As required by the order, prior to
September 20 of each marketing year,
the Board meets to establish its
marketing policy for that year. If the
Board determines that volume control
would tend to effectuate the declared
policy of the Act, the Board then follows
a procedure, specified by the order, to
compute and announce preliminary free
and restricted percentages. The
preliminary free percentage releases 80
percent of the adjusted inshell trade
demand that handlers may ship to the
domestic market. The purpose of
releasing only 80 percent of the inshell
trade demand under the preliminary
stage of regulation is to guard against
any potential underestimate of crop
size. The preliminary free percentage is
expressed as a percentage of the total
hazelnut supply subject to regulation,
where total supply is the sum of the
estimated crop production less the
three-year average disappearance plus
the undeclared carry-in from the
previous marketing year.
On August 22, 2006, the National
Agricultural Statistics Service (NASS)
released an estimate of 2006 hazelnut
production for the Oregon and
Washington area at 41,000 dry orchardrun tons. NASS uses an objective yield
survey method to estimate hazelnut
production which has historically been
very accurate.
On August 24, 2006, the Board met for
the purpose of (1) Determining if
volume control regulation would tend to
effectuate the declared policy of the Act;
(2) estimating the total available supply
and the domestic inshell trade demand
for hazelnuts; (3) establishing
preliminary free and restricted
marketing percentages for the 2006–
2007 marketing year; and (4) authorizing
market outlets for restricted hazelnuts.
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After discussion, the Board
unanimously determined that volume
regulation is necessary to effectively
market the industry’s 2006 crop and
would tend to effectuate the declared
policy of the Act. The determination
was based on (1) The large size of the
2006 hazelnut crop; (2) the inability of
the domestic inshell market to absorb
such a large crop; (3) the projected
record-setting world hazelnut crop and
the probability of an oversupplied world
market; and (4) the average price paid to
Oregon-Washington growers has not
exceeded the parity price in any one of
the past 18 years.
The Board then estimated the total
available supply for the 2006 crop year
to be 39,234 tons. The Board arrived at
that quantity by using the crop estimate
compiled by NASS (41,000 tons) and
then adjusting that estimate to account
for disappearance and carry-in. The
order requires the Board to reduce the
crop estimate by the average
disappearance over the preceding three
years (1,792 tons) and to increase it by
the amount of undeclared carry-in from
previous years’ production (26 tons).
In the calculation, disappearance is
defined as the difference between the
estimated orchard-run production and
the actual supply of merchantable
product available for sale by handlers.
Disappearance can consist of (1)
Unharvested hazelnuts; (2) culled
product (nuts that are delivered to
handlers but later discarded); (3)
product used on the farm, sold locally,
or otherwise disposed of by producers;
and (4) statistical error in the orchardrun production estimate.
Undeclared carry-in is defined as
hazelnuts that were produced in a
previous marketing year but were not
subject to regulation because they were
not shipped during that marketing year.
Undeclared carry-in is subject to
regulation during the current marketing
year and is accounted for as such by the
Board.
Additionally, the Board estimated
domestic inshell trade demand for the
2006–2007 marketing year to be 3,067
tons. The Board arrived at this estimate
by taking the average of the domestic
inshell trade acquisitions for the 2002–
2005 marketing years (2,775 tons) and
then reducing that quantity by the
declared carry-in from last year’s crop
(124 tons). The trade acquisition data for
the 2005–2006 marketing year was
omitted from the Board’s calculations,
as allowed by the order, after it was
determined to be abnormal due to crop
and marketing conditions.
The declared carry-in represents
product regulated under the order
during a preceding marketing year but
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not shipped during that year. This
inventory must be accounted for when
estimating the quantity of product to
make available to adequately supply the
market.
After establishing estimates for total
available hazelnut supply and domestic
inshell trade demand, the Board used
those estimates to compute and
announce preliminary free and
restricted percentages of 5.4055 percent
and 94.5945 percent, respectively. The
Board computed the preliminary free
percentage by multiplying the adjusted
inshell trade demand by 80 percent and
dividing the result by the estimate of the
total available supply subject to
regulation (2,651 tons x 80 percent/
39,234 tons = 5.4055 percent). The
preliminary free percentage initially
released 2,121 tons of hazelnuts from
the 2006–2007 supply for domestic
inshell use. The Board authorized the
preliminary restricted percentage
(37,113 tons) to be exported or shelled
for the domestic kernel markets.
Under the order, the Board must meet
again on or before November 15 to
review and revise the preliminary
estimate of the total available supply of
hazelnuts and to recommend interim
final and final free and restricted
percentages. Initially, when establishing
preliminary free and restricted
percentages, the Board utilizes a preharvest objective yield survey, compiled
by NASS on behalf of the Board, to
estimate the upcoming crop size. After
the hazelnut harvest has concluded,
usually sometime in October,
information is available directly from
handlers to more accurately estimate
crop size. The Board may use this
information to amend their preliminary
estimate of total available supply before
calculating the interim final and final
percentages.
Interim final percentages are
calculated in the same way as the
preliminary percentages but release 100
percent of the inshell trade demand,
effectively releasing the additional 20
percent held back at the preliminary
stage. Final free and restricted
percentages may release up to an
additional 15 percent of the average
trade acquisitions of inshell hazelnuts
for desirable carryout, to provide an
adequate carryover of product into the
following season. The order requires
that final free and restricted percentages
be effective 30 days prior to the end of
the marketing year, or earlier, if
recommended by the Board and
approved by USDA. The Board is
allowed to combine the interim final
and the final stages of the marketing
policy, if marketing conditions so
warrant, by recommending final
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percentages which immediately release
100 percent of the inshell trade demand
(the preliminary percentage plus the
additional 20 held back) plus any
percentage increase the Board
determines for desirable carryout.
Revisions in the marketing policy can be
made until February 15 of each
marketing year, but the inshell trade
demand can only be revised upward,
consistent with § 982.40(e).
The Board met on November 15, 2006,
and reviewed and approved an
amended marketing policy and
recommended the establishment of final
free and restricted percentages. During
the meeting, the Board revised the crop
estimate in the marketing policy to
38,688 tons (from 41,000 tons), which
reflects the results of post-harvest
handler survey information compiled by
the Board. In addition, the Board
decided that market conditions were
such that the immediate release of an
additional 15 percent of the three-year
average trade acquisitions to allow for
desirable carryout will not adversely
affect the 2006–2007 domestic inshell
market. Final percentages were
recommended at 8.2840 percent free
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and 91.1760 percent restricted. The final
free percentage releases 3,067 tons of
inshell hazelnuts from the 2006–2007
supply for domestic use, which includes
416 tons for desirable carryout.
Accordingly, since the final percentages
were recommended for immediate
release, no recommendations for interim
final free and restricted percentages
were necessary.
The final marketing percentages are
based on the Board’s final production
estimate and the following supply and
demand information for the 2006–2007
marketing year:
Tons
Total available supply:
(1) Production forecast (11/15/06 crop estimate) ........................................................................................................................
(2) Minus: Disappearance (three year average—4.37 percent of Item 1) ...................................................................................
38,688
-1,691
(3) Merchantable production (Item 1 minus Item 2) ....................................................................................................................
(4) Plus: Undeclared carry-in as of July 1, 2006 (subject to 2006–2007 regulation) ..................................................................
36,997
+26
(5) Available supply subject to regulation (Item 3 plus Item 4) ...................................................................................................
Inshell Trade Demand:
(6) Average trade acquisitions of inshell hazelnuts (three prior years domestic sales) ..............................................................
(7) Plus: Increase to encourage increased sales (15% of average trade acquisitions) ..............................................................
(8) Minus: Declared carry-in as of July 1, 2006 (not subject to 2006–2007 regulation) .............................................................
37,023
(9) Adjusted inshell trade demand (Item 6 plus Item 7 minus Item 8) ........................................................................................
3,067
Percentages
Free
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(10) Final percentages (Item 9 divided by Item 5) x 100 ................................................................................
(11) Final free tonnage (Item 9) .......................................................................................................................
(12) Final restricted tonnage (Item 5 minus Item 11) ......................................................................................
In addition to complying with the
provisions of the order, the Board also
considered USDA’s 1982 ‘‘Guidelines
for Fruit, Vegetable, and Specialty Crop
Marketing Orders’’ (Guidelines) when
making its computations in the
marketing policy. This volume control
regulation provides a method to
collectively limit the supply of inshell
hazelnuts available for sale in domestic
markets. The Guidelines provide that
the domestic inshell market has
available a quantity equal to 110 percent
of prior years’ shipments before
allocating supplies for the export
inshell, export kernel, and domestic
kernel markets. This provides for a
plentiful supply of inshell hazelnuts for
consumers and for market expansion,
while retaining the mechanism for
dealing with oversupply situations. The
established final percentages make
available approximately 416 additional
tons to encourage increased sales. The
total free supply for the 2006–2007
marketing year is estimated to be 3,067
tons of hazelnuts, which is 127 percent
of the average of the last three prior
years’ sales and exceeds the goal of the
Guidelines.
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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
or disproportionately burdened.
Marketing orders issued pursuant to the
Act, and the rules issued thereunder, are
unique in that they are brought about
through group action of essentially
small entities acting on their own
behalf. Thus, both statutes have small
entity orientation and compatibility.
Small agricultural producers are
defined by the Small Business
Administration (13 CFR 121.201) as
those having annual receipts of less than
$750,000, and small agricultural service
firms are defined as those having annual
receipts of less than $6,500,000. There
are approximately 700 producers of
hazelnuts in the production area and
approximately 18 handlers subject to
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2,775
+416
-124
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Restricted
8.2840
3,067
........................
91.7160
........................
33,956
regulation under the order. Using
statistics compiled by NASS, the
average value of production received by
producers in 2004 and 2005 was
$57,912,000. Using those estimates, the
average annual hazelnut revenue per
producer would be approximately
$82,700. The level of sales of other
crops by hazelnut producers is not
known. In addition, based on Board
records, about 83 percent of the
handlers ship under $6,500,000 worth
of hazelnuts on an annual basis. In view
of the foregoing, it can be concluded
that the majority of hazelnut producers
and handlers may be classified as small
entities.
Board meetings are widely publicized
in advance of the meetings and are held
in a location central to the production
area. The meetings are open to all
industry members and other interested
persons who are encouraged to
participate in the deliberations and
voice their opinions on topics under
discussion. Thus, Board
recommendations can be considered to
represent the interests of small business
entities in the industry.
Currently, U.S. hazelnut production is
allocated among three main market
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outlets: Domestic inshell, export inshell,
and kernel markets. Handlers and
growers receive the highest return for
sales in the domestic inshell market.
They receive less for product going to
export inshell, and the least for kernels.
Based on Board records of average
shipments for 1996–2005, the
percentage going to each of these
markets was 10 percent (domestic
inshell), 51 percent (export inshell), and
37 percent (kernels). Other minor
market outlets make up the remaining 2
percent.
The inshell hazelnut market can be
characterized as having limited and
inelastic demand with a very short
primary marketing period. On average,
79 percent of domestic inshell hazelnut
shipments occur between October 1 and
November 30, primarily to supply
holiday nut demand. The inshell market
is, therefore, prone to oversupply and
correspondingly low grower prices in
the absence of supply restrictions. This
volume control regulation provides a
method for the U.S. hazelnut industry to
limit the supply of domestic inshell
hazelnuts available for sale in the
continental U.S. and thereby mitigate
market oversupply conditions.
Many years of marketing experience
led to the development of the current
volume control procedures. These
procedures have helped the industry
solve its marketing problems by keeping
inshell supplies in balance with
domestic needs. Volume controls ensure
that the domestic inshell market is fully
supplied while protecting the market
from the negative effects of oversupply.
Although the domestic inshell market
is a relatively small portion of total
hazelnut sales (averaging 10 percent of
total shipments for 1996–2005), it
remains a profitable market segment.
The volume control provisions of the
marketing order are designed to avoid
oversupplying this particular market
segment, because that would likely lead
to substantially lower grower prices.
The other market segments, export
inshell and kernels, are expected to
continue to provide good outlets for
U.S. hazelnut production into the
future. Adverse climatic conditions that
negatively impacted hazelnut
production in the other hazelnut
producing regions of the world in 2004
and 2005 have corrected and the total
world supply in 2006–2007 is predicted
to increase dramatically. Product prices
in the world market have trended
downward in the expectation of the
greater supply. While the U.S. hazelnut
industry continues to experience high
demand for their large sized and high
quality product, the prices that
producers receive are tied to the global
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market. In light of the anticipated world
oversupply situation, regulation of the
domestic inshell market is important to
the U.S. hazelnut industry to insulate
that specialty market from the supply
related challenges of the world hazelnut
market.
In Oregon and Washington, high
hazelnut production years typically
follow low production years (a
historically consistent pattern). The
2005 crop of 27,600 tons was 16 percent
below the 32,685 ton average for the
1995–2004 period, while the
preliminary NASS estimate for 2006 is
25 percent higher. The lowest
production (15,000 tons in 1998) and
highest production (49,500 tons in 2001)
were 47 and 151 percent, respectively,
of the 10 year average.
This cyclical trait also leads to an
inversely corresponding cyclical price
pattern for hazelnuts. Grower price,
however, does not fluctuate to the
extent of production. The lower level of
variability of price versus the variability
of production provides an illustration of
the order’s price-stabilizing impact. The
coefficient of variation (a standard
statistical measure of variability; ‘‘CV’’)
for hazelnut production over the most
recent 10-year period is 0.36. In
contrast, the coefficient of variation for
hazelnut grower prices over the same
period is 0.19, about half of the CV for
production. The lower level of
variability of price versus the variability
of production provides an illustration of
the order’s price-stabilizing impact.
Comparing grower revenue to cost is
useful in highlighting the impact on
growers of recent product and price
levels. A recent hazelnut production
cost study from Oregon State University
estimated cost-of-production per acre to
be approximately $1,340 for a typical
100-acre hazelnut enterprise. Average
grower revenue per bearing acre (based
on NASS acreage and value of
production data) equaled or exceeded
that typical cost level less than half the
time from 1995 to 2004. Average grower
revenue was below typical costs in the
other years. While crop size has
fluctuated, volume regulations
contribute to orderly marketing and
market stability by moderating the
variation in returns for all producers
and handlers, both large and small.
While the level of benefits of this
rulemaking is difficult to quantify, the
stabilizing effects of volume regulation
impact both small and large handlers
positively by helping them maintain
and expand markets even though
hazelnut supplies fluctuate widely from
season to season. This regulation
provides equitable allotment of the most
profitable market, the domestic inshell
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market. That market is available to all
handlers, regardless of size.
As an alternative to this regulation,
the Board discussed not regulating the
marketing of the 2006 hazelnut crop.
However, without any regulation in
effect, the Board believes that the
industry would tend to oversupply the
inshell domestic market. The 2006
hazelnut crop is larger than last year’s
crop and 22 percent above the ten-year
average. The unregulated release of
38,688 tons on the domestic inshell
market could easily oversupply the
small, but lucrative domestic inshell
market. The Board believes that any
oversupply would completely disrupt
the market, causing producer returns to
decrease dramatically.
Section 982.40 of the order establishes
a procedure and computations for the
Board to follow in recommending to
USDA establishment of preliminary,
interim final, and final percentages of
hazelnuts to be released to the free and
restricted markets each marketing year.
The program results in a plentiful
supply of hazelnuts for consumers and
for market expansion while retaining
the mechanism for dealing with
oversupply situations.
Hazelnuts produced under the order
comprise virtually all of the hazelnuts
produced in the U.S. This production
represents, on average, less than 2
percent of total U.S. production of all
tree nuts, and less than 7 percent of the
world’s hazelnut production.
Last season, 85 percent of the
domestically produced hazelnut kernels
were marketed in the domestic market
and 15 percent were exported.
Domestically produced kernels
generally command a higher price in the
domestic market than imported kernels.
The industry is continuing its efforts to
develop and expand other markets with
emphasis on the domestic kernel
market. Small business entities, both
producers and handlers, benefit from
the expansion efforts resulting from this
program.
Inshell hazelnuts produced under the
order compete well in export markets
because of their high quality. Based on
Board statistics, Europe has historically
been the primary export market for U.S.
produced inshell hazelnuts. Shipments
have also been relatively consistent, not
varying much from the 10 year average
of 4,958 tons. Recent years, though,
have seen a significant increase in
export destinations. Last season, inshell
shipments to Europe totaled 4,622 tons,
representing just 38 percent of exports,
with the largest share going to Germany.
Inshell shipments to Southwest Pacific
countries, and Hong Kong in particular,
have increased dramatically in the past
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few years, rising to 50 percent of total
exports of 12,042 tons for the 2005–2006
marketing year. The industry continues
to pursue export opportunities.
There are some reporting,
recordkeeping, and other compliance
requirements under the order. The
reporting and recordkeeping burdens
are necessary for compliance purposes
and for developing statistical data for
maintenance of the program. The
information collection requirements are
currently approved by the Office of
Management and Budget under OMB
No. 0581–0178, Vegetable and Specialty
Crops. The forms require information
which is readily available from handler
records and which can be provided
without data processing equipment or
trained statistical staff. As with all
Federal marketing order programs,
reports and forms are periodically
reviewed to reduce information
requirements and duplication by
industry and public sector agencies.
This rule does not change those
requirements.
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.
In addition, USDA has not identified
any relevant Federal rules that
duplicate, overlap, or conflict with this
rule.
Further, the Board’s meetings were
widely publicized throughout the
hazelnut industry and all interested
persons were invited to attend the
meetings and participate in Board
deliberations. Like all Board meetings,
those held on August 24 and November
15, 2006, were public meetings and all
entities, both large and small, were able
to express their views on this issue.
An interim final rule concerning this
action was published in the Federal
Register on January 22, 2007. Copies of
this rule were mailed by the Board’s
staff to all Board members. In addition,
the rule was made available through the
Internet by the Office of the Federal
Register. A 60-day comment period
ending March 23, 2007, was provided to
allow interested parties to respond to
the rule. No comments were received.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://www.ams.usda.gov/
fv/moab.html. Any questions about the
compliance guide should be sent to Jay
Guerber at the previously mentioned
address in the FOR FURTHER INFORMATION
CONTACT section.
VerDate Mar 15 2010
09:10 Aug 04, 2010
Jkt 220001
23765
The Director of the Federal Register
approved the incorporation by reference
of certain publications listed in this AD
as of June 5, 2007.
After consideration of all relevant
material presented, including the
information and recommendation
submitted by the Board and other
available information, it is hereby found
that finalizing the interim final rule,
without change, as published in the
Federal Register (72 FR 2599, January
22, 2007) will tend to effectuate the
declared policy of the Act.
ADDRESSES:
List of Subjects in 7 CFR Part 982
Filberts, Hazelnuts, Marketing
agreements, Nuts, Reporting and
recordkeeping requirements.
FOR FURTHER INFORMATION CONTACT:
PART 982—HAZELNUTS GROWN IN
OREGON AND WASHINGTON
Accordingly, the interim final rule
amending 7 CFR part 982 which was
published at 72 FR 2599 on January 22,
2007, is adopted as a final rule without
change.
■
Dated: April 25, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. E7–8235 Filed 4–30–07; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2007–27014; Directorate
Identifier 2006–NM–253–AD; Amendment
39–15041; AD 2007–09–09]
RIN 2120–AA64
Airworthiness Directives; Airbus Model
A330 Airplanes and Model A340–200
and –300 Series Airplanes
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
AGENCY:
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 airworthiness authority of
another country to identify and correct
an unsafe condition on an aviation
product. The MCAI describes the unsafe
condition as un-damped extension of
the main landing gear (MLG),
potentially leading to loss of side stay
integrity and then MLG collapse. We are
issuing this AD to require actions to
correct the unsafe condition on these
products.
DATES: This AD becomes effective June
5, 2007.
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
You may examine the AD
docket on the Internet at https://
dms.dot.gov or in person at the Docket
Management Facility, U.S. Department
of Transportation, 400 Seventh Street,
SW., Nassif Building, Room PL–401,
Washington, DC.
Tim
Backman, Aerospace Engineer,
International Branch, ANM–116, FAA,
Transport Airplane Directorate, 1601
Lind Avenue, SW., Renton, Washington
98057–3356; telephone (425) 227–2797;
fax (425) 227–1149.
SUPPLEMENTARY INFORMATION:
Discussion
The FAA is implementing a new
process for streamlining the issuance of
ADs related to MCAI. This streamlined
process will allow us to adopt MCAI
safety requirements in a more efficient
manner and will reduce safety risks to
the public. This process continues to
allow all FAA AD issuance processes to
meet legal, economic, Administrative
Procedure Act, and Federal Register
requirements. We also continue to meet
our technical decision-making
responsibilities to identify and correct
unsafe conditions on U.S.-certificated
products.
This AD references the MCAI and
related service information that we
considered in forming the engineering
basis to correct the unsafe condition.
The AD contains text copied from the
MCAI and for this reason might not
follow our plain language principles.
We issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would
apply to the specified products. That
NPRM was published in the Federal
Register on January 26, 2007 (72 FR
3759). That NPRM proposed to require
replacement of the retraction link
assembly. The MCAI states that during
full-scale fatigue tests, the retraction
link failed on the latest growth
production standard MLG (main landing
gear) prior to its expected life limit.
Investigations confirm that the root
cause of this premature fracture is due
to high lug stress. The retraction link is
included in the ALS (Airworthiness
Limitation section) Part 1—Safe Life
Airworthiness Limitation Item—and is
currently limited to 35,200 flight cycles
(FC). Its fracture causes un-damped
extension of the MLG, potentially
leading to loss of side stay integrity and
E:\TEMP\01MYR1.LOC
01MYR1
Agencies
[Federal Register Volume 72, Number 83 (Tuesday, May 1, 2007)]
[Rules and Regulations]
[Pages 23761-23765]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-8235]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 72, No. 83 / Tuesday, May 1, 2007 / Rules and
Regulations
[[Page 23761]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 982
[Docket No. AMS-FV-06-0175; FV07-982-1 FIR]
Hazelnuts Grown in Oregon and Washington; Establishment of Final
Free and Restricted Percentages for the 2006-2007 Marketing Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, an interim final rule establishing final free and restricted
percentages for domestic inshell hazelnuts for the 2006-2007 marketing
year under the Federal marketing order for hazelnuts grown in Oregon
and Washington. This rule continues in effect the final free and
restricted percentages of 8.2840 percent and 91.7160 percent,
respectively. The percentages allocate the quantity of domestically
produced hazelnuts which may be marketed in the domestic inshell market
(free) and the quantity of domestically produced hazelnuts that must be
disposed of in outlets approved by the Board (restricted). Volume
regulation is intended to stabilize the supply of domestic inshell
hazelnuts to meet the limited domestic demand for such hazelnuts with
the goal of providing producers with reasonable returns. This rule was
recommended unanimously by the Hazelnut Marketing Board (Board), which
is the agency responsible for local administration of the marketing
order.
DATES: Effective: May 31, 2007 the regulation published January 22,
2007 (72 FR 2599, Jan. 22, 2007) is confirmed as final. This rule
applies to all 2006-2007 marketing year restricted hazelnuts until they
are properly disposed of in accordance with marketing order
requirements.
FOR FURTHER INFORMATION CONTACT: Barry Broadbent or Gary Olson,
Northwest Marketing Field Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs, AMS, USDA, 1220 SW Third Avenue,
Suite 385, Portland, OR 97204; Telephone: (503) 326-2724, Fax: (503)
326-7440, or e-mail: Barry.Broadbent@usda.gov or GaryD.Olson@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 No. 115 and Marketing Order No. 982, both as amended (7 CFR
part 982), regulating the handling of hazelnuts grown in Oregon and
Washington, hereinafter referred to as the ``order.'' The order is
effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
USDA is issuing this rule in conformance with Executive Order
12866.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is intended that this action apply to all
merchantable hazelnuts handled during the 2006-2007 marketing year
beginning July 1, 2006. This action applies to all 2006-2007 marketing
year restricted hazelnuts until they are properly disposed of in
accordance with marketing order requirements. 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 free and restricted percentages which
allocate the quantity of domestically produced hazelnuts which may be
marketed in domestic inshell markets (free) and hazelnuts which must be
exported, shelled, or otherwise disposed of by handlers (restricted).
The Board met and, after determining that volume regulation would tend
to effectuate the declared policy of the Act, developed a marketing
policy to be employed for the duration of the 2006-2007 marketing year.
Volume regulation is intended to stabilize the supply of domestic
inshell hazelnuts to meet the limited domestic demand for such
hazelnuts with the goal of providing producers with reasonable returns.
Based on an estimate of the domestic inshell trade demand and total
supply of domestically produced hazelnuts available for the 2006-2007
marketing year, the Board voted unanimously at their November 15, 2006,
meeting to recommend to USDA that the final free and restricted
percentages for the 2006-2007 marketing year be established at 8.2840
percent and 91.7160 percent, respectively.
The Board's authority to recommend volume regulation and use
computations to determine the allocation of hazelnuts to individual
markets is specified in Sec. 982.40 of the order. Under the order's
provisions, free and restricted market allocations of hazelnuts are
expressed as percentages of the total hazelnut supply subject to
regulation. The percentages are derived by dividing the estimated
domestic inshell trade demand (computed by formula) by the Board's
estimate of the total domestically produced supply of hazelnuts that
are expected to be available over the course of the marketing year.
Inshell trade demand, the key component of the marketing policy, is
[[Page 23762]]
the estimated quantity of inshell hazelnuts necessary to adequately
supply the domestic inshell hazelnut market for the duration of the
marketing year. The Board determines the domestic inshell trade demand
for each year and uses that estimate as the basis for setting the
percentage of the available supply of domestically produced hazelnuts
that handlers may ship to the domestic inshell market throughout the
marketing season. The order specifies that inshell trade demand be
computed by averaging the preceding three years' trade acquisitions of
inshell hazelnuts, allowing adjustments for abnormal crop or marketing
conditions. In addition, the Board may increase the computed inshell
trade demand by up to 25 percent, if market conditions warrant an
increase.
As required by the order, prior to September 20 of each marketing
year, the Board meets to establish its marketing policy for that year.
If the Board determines that volume control would tend to effectuate
the declared policy of the Act, the Board then follows a procedure,
specified by the order, to compute and announce preliminary free and
restricted percentages. The preliminary free percentage releases 80
percent of the adjusted inshell trade demand that handlers may ship to
the domestic market. The purpose of releasing only 80 percent of the
inshell trade demand under the preliminary stage of regulation is to
guard against any potential underestimate of crop size. The preliminary
free percentage is expressed as a percentage of the total hazelnut
supply subject to regulation, where total supply is the sum of the
estimated crop production less the three-year average disappearance
plus the undeclared carry-in from the previous marketing year.
On August 22, 2006, the National Agricultural Statistics Service
(NASS) released an estimate of 2006 hazelnut production for the Oregon
and Washington area at 41,000 dry orchard-run tons. NASS uses an
objective yield survey method to estimate hazelnut production which has
historically been very accurate.
On August 24, 2006, the Board met for the purpose of (1)
Determining if volume control regulation would tend to effectuate the
declared policy of the Act; (2) estimating the total available supply
and the domestic inshell trade demand for hazelnuts; (3) establishing
preliminary free and restricted marketing percentages for the 2006-2007
marketing year; and (4) authorizing market outlets for restricted
hazelnuts.
After discussion, the Board unanimously determined that volume
regulation is necessary to effectively market the industry's 2006 crop
and would tend to effectuate the declared policy of the Act. The
determination was based on (1) The large size of the 2006 hazelnut
crop; (2) the inability of the domestic inshell market to absorb such a
large crop; (3) the projected record-setting world hazelnut crop and
the probability of an oversupplied world market; and (4) the average
price paid to Oregon-Washington growers has not exceeded the parity
price in any one of the past 18 years.
The Board then estimated the total available supply for the 2006
crop year to be 39,234 tons. The Board arrived at that quantity by
using the crop estimate compiled by NASS (41,000 tons) and then
adjusting that estimate to account for disappearance and carry-in. The
order requires the Board to reduce the crop estimate by the average
disappearance over the preceding three years (1,792 tons) and to
increase it by the amount of undeclared carry-in from previous years'
production (26 tons).
In the calculation, disappearance is defined as the difference
between the estimated orchard-run production and the actual supply of
merchantable product available for sale by handlers. Disappearance can
consist of (1) Unharvested hazelnuts; (2) culled product (nuts that are
delivered to handlers but later discarded); (3) product used on the
farm, sold locally, or otherwise disposed of by producers; and (4)
statistical error in the orchard-run production estimate.
Undeclared carry-in is defined as hazelnuts that were produced in a
previous marketing year but were not subject to regulation because they
were not shipped during that marketing year. Undeclared carry-in is
subject to regulation during the current marketing year and is
accounted for as such by the Board.
Additionally, the Board estimated domestic inshell trade demand for
the 2006-2007 marketing year to be 3,067 tons. The Board arrived at
this estimate by taking the average of the domestic inshell trade
acquisitions for the 2002-2005 marketing years (2,775 tons) and then
reducing that quantity by the declared carry-in from last year's crop
(124 tons). The trade acquisition data for the 2005-2006 marketing year
was omitted from the Board's calculations, as allowed by the order,
after it was determined to be abnormal due to crop and marketing
conditions.
The declared carry-in represents product regulated under the order
during a preceding marketing year but not shipped during that year.
This inventory must be accounted for when estimating the quantity of
product to make available to adequately supply the market.
After establishing estimates for total available hazelnut supply
and domestic inshell trade demand, the Board used those estimates to
compute and announce preliminary free and restricted percentages of
5.4055 percent and 94.5945 percent, respectively. The Board computed
the preliminary free percentage by multiplying the adjusted inshell
trade demand by 80 percent and dividing the result by the estimate of
the total available supply subject to regulation (2,651 tons x 80
percent/39,234 tons = 5.4055 percent). The preliminary free percentage
initially released 2,121 tons of hazelnuts from the 2006-2007 supply
for domestic inshell use. The Board authorized the preliminary
restricted percentage (37,113 tons) to be exported or shelled for the
domestic kernel markets.
Under the order, the Board must meet again on or before November 15
to review and revise the preliminary estimate of the total available
supply of hazelnuts and to recommend interim final and final free and
restricted percentages. Initially, when establishing preliminary free
and restricted percentages, the Board utilizes a pre-harvest objective
yield survey, compiled by NASS on behalf of the Board, to estimate the
upcoming crop size. After the hazelnut harvest has concluded, usually
sometime in October, information is available directly from handlers to
more accurately estimate crop size. The Board may use this information
to amend their preliminary estimate of total available supply before
calculating the interim final and final percentages.
Interim final percentages are calculated in the same way as the
preliminary percentages but release 100 percent of the inshell trade
demand, effectively releasing the additional 20 percent held back at
the preliminary stage. Final free and restricted percentages may
release up to an additional 15 percent of the average trade
acquisitions of inshell hazelnuts for desirable carryout, to provide an
adequate carryover of product into the following season. The order
requires that final free and restricted percentages be effective 30
days prior to the end of the marketing year, or earlier, if recommended
by the Board and approved by USDA. The Board is allowed to combine the
interim final and the final stages of the marketing policy, if
marketing conditions so warrant, by recommending final
[[Page 23763]]
percentages which immediately release 100 percent of the inshell trade
demand (the preliminary percentage plus the additional 20 held back)
plus any percentage increase the Board determines for desirable
carryout. Revisions in the marketing policy can be made until February
15 of each marketing year, but the inshell trade demand can only be
revised upward, consistent with Sec. 982.40(e).
The Board met on November 15, 2006, and reviewed and approved an
amended marketing policy and recommended the establishment of final
free and restricted percentages. During the meeting, the Board revised
the crop estimate in the marketing policy to 38,688 tons (from 41,000
tons), which reflects the results of post-harvest handler survey
information compiled by the Board. In addition, the Board decided that
market conditions were such that the immediate release of an additional
15 percent of the three-year average trade acquisitions to allow for
desirable carryout will not adversely affect the 2006-2007 domestic
inshell market. Final percentages were recommended at 8.2840 percent
free and 91.1760 percent restricted. The final free percentage releases
3,067 tons of inshell hazelnuts from the 2006-2007 supply for domestic
use, which includes 416 tons for desirable carryout. Accordingly, since
the final percentages were recommended for immediate release, no
recommendations for interim final free and restricted percentages were
necessary.
The final marketing percentages are based on the Board's final
production estimate and the following supply and demand information for
the 2006-2007 marketing year:
------------------------------------------------------------------------
Tons
------------------------------------------------------------------------
Total available supply:
(1) Production forecast (11/15/06 crop estimate).... 38,688
(2) Minus: Disappearance (three year average--4.37 -1,691
percent of Item 1).................................
---------------
(3) Merchantable production (Item 1 minus Item 2)... 36,997
(4) Plus: Undeclared carry-in as of July 1, 2006 +26
(subject to 2006-2007 regulation)..................
---------------
(5) Available supply subject to regulation (Item 3 37,023
plus Item 4).......................................
Inshell Trade Demand:
(6) Average trade acquisitions of inshell hazelnuts 2,775
(three prior years domestic sales).................
(7) Plus: Increase to encourage increased sales (15% +416
of average trade acquisitions).....................
(8) Minus: Declared carry-in as of July 1, 2006 (not -124
subject to 2006-2007 regulation)...................
---------------
(9) Adjusted inshell trade demand (Item 6 plus Item 3,067
7 minus Item 8)....................................
------------------------------------------------------------------------
Percentages Free Restricted
------------------------------------------------------------------------
(10) Final percentages (Item 9 8.2840 91.7160
divided by Item 5) x 100...........
(11) Final free tonnage (Item 9).... 3,067 ..............
(12) Final restricted tonnage (Item .............. 33,956
5 minus Item 11)...................
------------------------------------------------------------------------
In addition to complying with the provisions of the order, the
Board also considered USDA's 1982 ``Guidelines for Fruit, Vegetable,
and Specialty Crop Marketing Orders'' (Guidelines) when making its
computations in the marketing policy. This volume control regulation
provides a method to collectively limit the supply of inshell hazelnuts
available for sale in domestic markets. The Guidelines provide that the
domestic inshell market has available a quantity equal to 110 percent
of prior years' shipments before allocating supplies for the export
inshell, export kernel, and domestic kernel markets. This provides for
a plentiful supply of inshell hazelnuts for consumers and for market
expansion, while retaining the mechanism for dealing with oversupply
situations. The established final percentages make available
approximately 416 additional tons to encourage increased sales. The
total free supply for the 2006-2007 marketing year is estimated to be
3,067 tons of hazelnuts, which is 127 percent of the average of the
last three prior years' sales and exceeds the goal of the 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 or disproportionately burdened. Marketing orders issued
pursuant to the Act, and the rules issued thereunder, are unique in
that they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
Small agricultural producers are defined by the Small Business
Administration (13 CFR 121.201) as those having annual receipts of less
than $750,000, and small agricultural service firms are defined as
those having annual receipts of less than $6,500,000. There are
approximately 700 producers of hazelnuts in the production area and
approximately 18 handlers subject to regulation under the order. Using
statistics compiled by NASS, the average value of production received
by producers in 2004 and 2005 was $57,912,000. Using those estimates,
the average annual hazelnut revenue per producer would be approximately
$82,700. The level of sales of other crops by hazelnut producers is not
known. In addition, based on Board records, about 83 percent of the
handlers ship under $6,500,000 worth of hazelnuts on an annual basis.
In view of the foregoing, it can be concluded that the majority of
hazelnut producers and handlers may be classified as small entities.
Board meetings are widely publicized in advance of the meetings and
are held in a location central to the production area. The meetings are
open to all industry members and other interested persons who are
encouraged to participate in the deliberations and voice their opinions
on topics under discussion. Thus, Board recommendations can be
considered to represent the interests of small business entities in the
industry.
Currently, U.S. hazelnut production is allocated among three main
market
[[Page 23764]]
outlets: Domestic inshell, export inshell, and kernel markets. Handlers
and growers receive the highest return for sales in the domestic
inshell market. They receive less for product going to export inshell,
and the least for kernels. Based on Board records of average shipments
for 1996-2005, the percentage going to each of these markets was 10
percent (domestic inshell), 51 percent (export inshell), and 37 percent
(kernels). Other minor market outlets make up the remaining 2 percent.
The inshell hazelnut market can be characterized as having limited
and inelastic demand with a very short primary marketing period. On
average, 79 percent of domestic inshell hazelnut shipments occur
between October 1 and November 30, primarily to supply holiday nut
demand. The inshell market is, therefore, prone to oversupply and
correspondingly low grower prices in the absence of supply
restrictions. This volume control regulation provides a method for the
U.S. hazelnut industry to limit the supply of domestic inshell
hazelnuts available for sale in the continental U.S. and thereby
mitigate market oversupply conditions.
Many years of marketing experience led to the development of the
current volume control procedures. These procedures have helped the
industry solve its marketing problems by keeping inshell supplies in
balance with domestic needs. Volume controls ensure that the domestic
inshell market is fully supplied while protecting the market from the
negative effects of oversupply.
Although the domestic inshell market is a relatively small portion
of total hazelnut sales (averaging 10 percent of total shipments for
1996-2005), it remains a profitable market segment. The volume control
provisions of the marketing order are designed to avoid oversupplying
this particular market segment, because that would likely lead to
substantially lower grower prices. The other market segments, export
inshell and kernels, are expected to continue to provide good outlets
for U.S. hazelnut production into the future. Adverse climatic
conditions that negatively impacted hazelnut production in the other
hazelnut producing regions of the world in 2004 and 2005 have corrected
and the total world supply in 2006-2007 is predicted to increase
dramatically. Product prices in the world market have trended downward
in the expectation of the greater supply. While the U.S. hazelnut
industry continues to experience high demand for their large sized and
high quality product, the prices that producers receive are tied to the
global market. In light of the anticipated world oversupply situation,
regulation of the domestic inshell market is important to the U.S.
hazelnut industry to insulate that specialty market from the supply
related challenges of the world hazelnut market.
In Oregon and Washington, high hazelnut production years typically
follow low production years (a historically consistent pattern). The
2005 crop of 27,600 tons was 16 percent below the 32,685 ton average
for the 1995-2004 period, while the preliminary NASS estimate for 2006
is 25 percent higher. The lowest production (15,000 tons in 1998) and
highest production (49,500 tons in 2001) were 47 and 151 percent,
respectively, of the 10 year average.
This cyclical trait also leads to an inversely corresponding
cyclical price pattern for hazelnuts. Grower price, however, does not
fluctuate to the extent of production. The lower level of variability
of price versus the variability of production provides an illustration
of the order's price-stabilizing impact. The coefficient of variation
(a standard statistical measure of variability; ``CV'') for hazelnut
production over the most recent 10-year period is 0.36. In contrast,
the coefficient of variation for hazelnut grower prices over the same
period is 0.19, about half of the CV for production. The lower level of
variability of price versus the variability of production provides an
illustration of the order's price-stabilizing impact.
Comparing grower revenue to cost is useful in highlighting the
impact on growers of recent product and price levels. A recent hazelnut
production cost study from Oregon State University estimated cost-of-
production per acre to be approximately $1,340 for a typical 100-acre
hazelnut enterprise. Average grower revenue per bearing acre (based on
NASS acreage and value of production data) equaled or exceeded that
typical cost level less than half the time from 1995 to 2004. Average
grower revenue was below typical costs in the other years. While crop
size has fluctuated, volume regulations contribute to orderly marketing
and market stability by moderating the variation in returns for all
producers and handlers, both large and small.
While the level of benefits of this rulemaking is difficult to
quantify, the stabilizing effects of volume regulation impact both
small and large handlers positively by helping them maintain and expand
markets even though hazelnut supplies fluctuate widely from season to
season. This regulation provides equitable allotment of the most
profitable market, the domestic inshell market. That market is
available to all handlers, regardless of size.
As an alternative to this regulation, the Board discussed not
regulating the marketing of the 2006 hazelnut crop. However, without
any regulation in effect, the Board believes that the industry would
tend to oversupply the inshell domestic market. The 2006 hazelnut crop
is larger than last year's crop and 22 percent above the ten-year
average. The unregulated release of 38,688 tons on the domestic inshell
market could easily oversupply the small, but lucrative domestic
inshell market. The Board believes that any oversupply would completely
disrupt the market, causing producer returns to decrease dramatically.
Section 982.40 of the order establishes a procedure and
computations for the Board to follow in recommending to USDA
establishment of preliminary, interim final, and final percentages of
hazelnuts to be released to the free and restricted markets each
marketing year. The program results in a plentiful supply of hazelnuts
for consumers and for market expansion while retaining the mechanism
for dealing with oversupply situations.
Hazelnuts produced under the order comprise virtually all of the
hazelnuts produced in the U.S. This production represents, on average,
less than 2 percent of total U.S. production of all tree nuts, and less
than 7 percent of the world's hazelnut production.
Last season, 85 percent of the domestically produced hazelnut
kernels were marketed in the domestic market and 15 percent were
exported. Domestically produced kernels generally command a higher
price in the domestic market than imported kernels. The industry is
continuing its efforts to develop and expand other markets with
emphasis on the domestic kernel market. Small business entities, both
producers and handlers, benefit from the expansion efforts resulting
from this program.
Inshell hazelnuts produced under the order compete well in export
markets because of their high quality. Based on Board statistics,
Europe has historically been the primary export market for U.S.
produced inshell hazelnuts. Shipments have also been relatively
consistent, not varying much from the 10 year average of 4,958 tons.
Recent years, though, have seen a significant increase in export
destinations. Last season, inshell shipments to Europe totaled 4,622
tons, representing just 38 percent of exports, with the largest share
going to Germany. Inshell shipments to Southwest Pacific countries, and
Hong Kong in particular, have increased dramatically in the past
[[Page 23765]]
few years, rising to 50 percent of total exports of 12,042 tons for the
2005-2006 marketing year. The industry continues to pursue export
opportunities.
There are some reporting, recordkeeping, and other compliance
requirements under the order. The reporting and recordkeeping burdens
are necessary for compliance purposes and for developing statistical
data for maintenance of the program. The information collection
requirements are currently approved by the Office of Management and
Budget under OMB No. 0581-0178, Vegetable and Specialty Crops. The
forms require information which is readily available from handler
records and which can be provided without data processing equipment or
trained statistical staff. As with all Federal marketing order
programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies. This rule does not change those requirements.
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.
In addition, USDA has not identified any relevant Federal rules
that duplicate, overlap, or conflict with this rule.
Further, the Board's meetings were widely publicized throughout the
hazelnut industry and all interested persons were invited to attend the
meetings and participate in Board deliberations. Like all Board
meetings, those held on August 24 and November 15, 2006, were public
meetings and all entities, both large and small, were able to express
their views on this issue.
An interim final rule concerning this action was published in the
Federal Register on January 22, 2007. Copies of this rule were mailed
by the Board's staff to all Board members. In addition, the rule was
made available through the Internet by the Office of the Federal
Register. A 60-day comment period ending March 23, 2007, was provided
to allow interested parties to respond to the rule. No comments were
received.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/fv/moab.html. Any questions about the compliance
guide should be sent to Jay Guerber at the previously mentioned address
in the FOR FURTHER INFORMATION CONTACT section.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Board and other
available information, it is hereby found that finalizing the interim
final rule, without change, as published in the Federal Register (72 FR
2599, January 22, 2007) will tend to effectuate the declared policy of
the Act.
List of Subjects in 7 CFR Part 982
Filberts, Hazelnuts, Marketing agreements, Nuts, Reporting and
recordkeeping requirements.
PART 982--HAZELNUTS GROWN IN OREGON AND WASHINGTON
0
Accordingly, the interim final rule amending 7 CFR part 982 which was
published at 72 FR 2599 on January 22, 2007, is adopted as a final rule
without change.
Dated: April 25, 2007.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E7-8235 Filed 4-30-07; 8:45 am]
BILLING CODE 3410-02-P