Raisins Produced From Grapes Grown in California; Final Free and Reserve Percentages for 2007-08 Crop Natural (Sun-Dried) Seedless Raisins, 38307-38311 [E8-15293]
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38307
Rules and Regulations
Federal Register
Vol. 73, No. 130
Monday, July 7, 2008
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.
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.
This rule
is issued under Marketing Agreement
and Order No. 989, both as amended (7
CFR part 989), 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 2007–08 crop year, which began
August 1, 2007, and ends July 31, 2008.
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.
SUPPLEMENTARY INFORMATION:
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Docket No. AMS–FV–07–0130; FV08–989–
1 FIR]
Raisins Produced From Grapes Grown
in California; Final Free and Reserve
Percentages for 2007–08 Crop Natural
(Sun-Dried) Seedless Raisins
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
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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 the 2007–08
crop of 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 85 percent free and 15
percent reserve. The percentages are
intended to help stabilize raisin
supplies and prices, and strengthen
market conditions.
DATES: Effective Date: August 6, 2008.
The volume regulation percentages
apply to acquisitions of NS raisins from
the 2007–08 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 J. 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.
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This rule continues in effect the
action that established final volume
regulation percentages for 2007–08 crop
NS raisins covered under the order. The
volume regulation percentages are 85
percent free and 15 percent reserve and
were established through an interim
final rule published on February 19,
2008 (73 FR 9005). 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 for NS raisins on October 4,
2007, and October 11, 2007.
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 free and reserve
percentages. Pursuant to § 989.54(a) of
the order, the Committee met on August
14, 2007, 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
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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 2007–08 trade demand for NS
raisins at 232,822 tons as shown below.
COMPUTED TRADE DEMAND
[Natural condition tons]
NS Raisins
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Prior year’s shipments ............
Multiplied by 90 percent .........
Equals adjusted base .............
Minus carryin inventory ..........
Plus desirable carryout ...........
Equals computed NS trade
demand ...............................
309,169
0.90
278,252
105,430
60,000
232,822
Computation of Volume Regulation
Percentages
Section 989.54(b) of the order requires
that the Committee announce crop
estimates and determine whether
volume regulation is warranted for the
varietal types for which it computed a
trade demand. If the Committee
determines that volume regulation is
warranted, it must also compute and
announce preliminary free and reserve
percentages. Section 989.54(c) provides
that the Committee may modify the
preliminary free and reserve percentages
prior to February 15 by announcing
interim percentages which release less
than the trade demand. Section
989.54(d) requires the Committee to
recommend final percentages no later
than February 15 which will tend to
release the full trade demand. Final
percentages are established by USDA
through informal rulemaking.
The Committee met on October 4 and
October 11, 2007, and announced a
2007–08 crop estimate of 273,908 tons
for NS raisins pursuant to § 989.54(b).
NS raisins are the major varietal type of
California raisin. The crop estimate of
273,908 tons was significantly higher
than the computed trade demand of
232,822 tons. Thus, the Committee
determined that volume regulation for
NS raisins was warranted. The
Committee therefore announced
preliminary volume regulation
percentages of 72 percent free and 28
percent reserve for NS raisins, which
released 85 percent of the computed
trade demand, as required by the order,
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since a field price had been established.
Field price is the price paid by handlers
to producers for the free tonnage portion
of their crop. The field price for 2007–
08 NS raisins is $1,210 per ton. The
Committee also announced interim
volume regulation percentages of 84.75
percent free and 15.25 percent reserve,
and recommended final volume
regulation percentages of 85 percent free
and 15 percent reserve pursuant to
§ 989.54(d).
The Committee has historically
recommended interim and final volume
regulation percentages later in the
season. However, the Committee
determined it was in the best interest of
producers and handlers to establish
interim and final percentages as soon as
possible for the 2007–08 crop year.
Rains during the harvest period this
season while grapes were lying on the
ground to dry caused a problem with
embedded sand particles on a portion of
the crop. To remedy this situation,
growers subjected the raisins to a
process known as reconditioning to
remove the sand in order for the raisins
to be acceptable for acquisition by
handlers. This process resulted in
additional costs to growers. Establishing
interim and final percentages early in
the season allowed growers to be paid
on a higher percentage of their crop
earlier in the season. This helped
growers meet the costs of
reconditioning, and the reconditioned
product was then suitable for
acquisition and processing by handlers.
Pursuant to § 989.54(d), 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 ........................
Divided by crop estimate ........
Equals the free percentage ....
100 minus free percentage
equals the reserve percentage ......................................
232,822
273,908
85.00
15.00
By the week ending May 17, 2008,
deliveries of NS raisins totaled 322,458
tons of NS raisins. Thus, the
committee’s recommendation provided
handlers with an additional 41,267 tons
over the computed trade demand
(322,458 tons × 85 percent = 274,089
tons; 274,089 tons¥232,822 tons =
41,267 tons). This additional tonnage is
not expected to cause disorderly
marketing conditions, as California
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export shipments are up about 30
percent due to other countries’
declining export shipments.
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 for the
2007–08 crop year. Application of the
final percentages made 232,822 tons of
raisins available to handlers when the
crop estimate was realized. In addition,
handlers are offered additional reserve
raisins for sale 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 to handlers for free use.
Handlers may sell their 10 plus 10
raisins to any market.
Based on 2006–07 NS shipments of
309,169 natural condition tons, 30,916.9
tons should have been made available in
each of the 10 plus 10 offers. However,
this amount was not available in
reserve.
The first 10 plus 10 offer was made
in February 2008. A total of 6,065.2 tons
of remaining 2006–07 reserve raisins
and 24,851.7 tons of 2007–08 reserve
raisins (a total of 30,916.9 tons) were
made available to raisin handlers and all
available tonnage was purchased and
released to handlers during the 2007–08
crop year.
The second 10 plus 10 offer (a balance
of about 24,000 tons remaining in the
reserve pool) will be made available to
handlers by July 31, 2008. Thus, all
available reserve pool raisins should be
offered to handlers for free use through
the 10 plus 10 offers by the end of the
crop year.
In addition to the second anticipated
10 plus 10 purchase, 14,793 tons of
2006–07 reserve raisins were sold to
handlers through 10 plus 10 offers in
July 2007 and released to handlers in
the 2007–08 crop year (August 2007).
Finally, 105,430 tons of free tonnage
raisins were carried into the 2007–08
crop year in handler’s inventories.
Combining all the raisins available to
handlers for use as free tonnage for the
2007–08 crop year (including the
232,822-ton trade demand) results in a
total supply of 404,962 tons of natural
condition raisins, or 380,674 packed
tons. This equates to 131 percent of the
2006–07 shipments of 309,169 natural
condition tons or 290,628 packed tons.
(Additionally, at least another 41,000
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tons of raisins are available to handlers
for free use with the Committee’s
underestimation of the crop.)
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 during 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
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.
There are approximately 21 handlers
of California raisins who are subject to
regulation under the order and
approximately 3,000 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
than $6,500,000, and small agricultural
producers are defined as those having
annual receipts of less than $750,000.
No more than 8 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 regulation
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 2007–08 crop NS
raisins. The volume regulation
percentages are 85 percent free and 15
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 this
season because the Committee’s October
crop estimate of 273,908 tons was
significantly higher than the 232,822 ton
trade demand. As mentioned
previously, by the week ending May 17,
2008, acquisitions were at 322,458 tons.
The 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 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 62 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
38309
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 from the 1993–94
through the 1997–98 seasons, although
production varied. As shown in the
table below, during those years,
production varied from a low of 272,063
tons in 1996–97 to a high of 387,007
tons in 1993–94.
According to Committee data, the
total producer return per ton during
those years, which includes proceeds
from both free tonnage plus reserve pool
raisins, has varied from a low of $904.60
in 1993–94 to a high of $1,049.20 in
1996–97. Producer prices for the 1998–
99 and 1999–2000 seasons increased
significantly due to back-to-back short
crops during those years. Record large
crops followed and producer prices
dropped dramatically for the 2000–01
through 2003–04 crop years, as
inventories grew while demand
stagnated. However, producer prices
were higher for the 2004–05, 2005–06,
and 2006–07 crop years.
The chart below shows data regarding
NS raisin deliveries, field prices, and
producer prices over the past several
years:
NATURAL SEEDLESS (NATURAL CONDITION) DELIVERIES, FIELD PRICES AND PRODUCER PRICES
Deliveries
(tons)
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Crop year
2006–07
2005–06
2004–05
2003–04
2002–03
.......................................................................................................................................
.......................................................................................................................................
.......................................................................................................................................
.......................................................................................................................................
.......................................................................................................................................
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282,999
319,126
265,262
296,864
388,010
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Field prices
(per ton) 1
$1,210.00
1,210.00
1,210.00
810.00
745.00
Producer
prices
(per ton)
2 $1,089.00
2 998.25
3 1,210.00
567.00
491.20
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Rules and Regulations
NATURAL SEEDLESS (NATURAL CONDITION) DELIVERIES, FIELD PRICES AND PRODUCER PRICES—Continued
Deliveries
(tons)
Crop year
2001–02 .......................................................................................................................................
2000–01 .......................................................................................................................................
1999–2000 ...................................................................................................................................
1998–99 .......................................................................................................................................
1997–98 .......................................................................................................................................
1996–97 .......................................................................................................................................
1995–96 .......................................................................................................................................
1994–95 .......................................................................................................................................
1993–94 .......................................................................................................................................
377,328
432,616
299,910
240,469
382,448
272,063
325,911
378,427
387,007
Field prices
(per ton) 1
880.00
877.50
1,425.00
1,290.00
1,250.00
1,220.00
1,160.00
1,160.00
1,155.00
Producer
prices
(per ton)
650.94
603.36
1,211.25
3 1,290.00
946.52
1,049.20
1,007.19
928.27
904.60
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1 Field prices for NS raisins are established by the Raisin Bargaining Association, and are also referred to in the industry as the free tonnage
price for raisins.
2 Return-to-date, reserve pool still open.
3 No volume regulation.
There are essentially two broad
markets for raisins—domestic and
export. Domestic shipments have been
generally increasing in recent years.
Although 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,
they increased from 174,117 packed
tons during the 2000–01 crop year to
188,944 tons during the 2006–07 crop
year. Export shipments ranged from a
high of 107,931 packed tons in 1991–92
to a low of 91,599 packed tons in the
1999–2000 crop year. Export shipments
increased to 106,755 tons of raisins
during the 2004–05 crop year, but fell to
101,684 tons in 2006–07. For the 2007–
08 crop year, exports are up about 30
percent due to a short crop from Turkey.
The per capita consumption of raisins
has declined from 2.07 pounds in 1988
to 1.44 pounds in 2005. 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 three of the last four
years (as reflected in increased
commercial shipments), production has
been decreasing. Deliveries of NS dried
raisins from producers to handlers
reached an all-time high of 432,616 tons
in the 2000–01 crop year. This large
crop was preceded by two short crop
years; deliveries were 240,469 tons in
1998–99 and 299,910 tons in 1999–
2000. Deliveries for the 2000–01 crop
year soared to a record level because of
increased bearing acreage and yields.
Deliveries for the 2001–02 crop year
were at 377,328 tons, 388,010 tons for
the 2002–03 crop year, 296,864 for the
2003–04 crop year, and 265,262 tons for
the 2004–05 crop year.
After three crop years of high
production and a large 2001–02 carryin
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inventory, the industry diverted raisin
production to other uses or removed
bearing vines. Diversions/removals
totaled 38,000 acres in 2001; 27,000
acres in 2002; and 8,000 acres of vines
in 2003. These actions resulted in
declining deliveries of 296,864 tons for
the 2003–04 crop year and 265,262 tons
for the 2004–05 crop year. Although
deliveries increased in 2005–06 to
319,126 tons, this may have been
because fewer growers opted to contract
with wineries, as raisin variety grapes
crushed in 2005–06 decreased by
161,000 green tons, the equivalent of
over 40,000 tons of raisins. In 2006–07,
raisin deliveries were again less than
300,000 tons, at 282,999 tons. Deliveries
have increased for the 2007–08 crop
year, and were at 322,458 for the week
ending May 17, 2008.
The order permits the industry to
exercise volume regulation 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 May 17, 2008,
showed that deliveries of NS raisins
were at 322,458 tons. The 15 percent
reserve limited the total free tonnage to
274,089 natural condition tons (.85 ×
322,458 ton crop). Adding the 274,089
ton figure with the carryin of 105,430
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tons, plus 45,710 tons of 10 plus 10
reserve raisins that were released to
handlers during the 2007–08 crop year
(14,793 tons in August 2007 and 30,917
tons in February 2008) made the total
free supply equal to 425,229 natural
condition tons. Including the
anticipated 24,000 tons or reserve
raisins that likely will be offered in the
second 10 plus 10 offer to be held prior
to July 31, 2008, the end of the crop
year, should make the total free supply
449,229 natural condition tons.
With volume regulation, producer
prices are expected to be higher than
without volume regulation. This price
increase is beneficial to all producers
regardless of size and enhances
producers’ total revenues in comparison
to no volume regulation. 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 2007–08 season for
only one of the nine raisin varietal types
defined under the order.
The free and reserve percentages
continue 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
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Federal Register / Vol. 73, No. 130 / Monday, July 7, 2008 / Rules and Regulations
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.
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
requirements 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 No.
0581–0178, Vegetable and Specialty
Crops. 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 14,
2007, October 4, 2007, and October 11,
2007, 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.
VerDate Aug<31>2005
16:13 Jul 03, 2008
Jkt 214001
The Committee’s Reserve Sales and
Marketing Subcommittee met on August
14, 2007, and October 4, 2007, 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 February 19, 2008. Copies of
the rule were mailed by the Committee’s
staff to all Committee members and
alternates and raisin handlers. In
addition, the rule was made available
through the Internet by USDA and the
Office of the Federal Register. That rule
provided a 60-day comment period
which ended April 21, 2008. No
comments were received during the
comment period.
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/
AMSv1.0/ams.fetchTemplateData.do?
template=TemplateN
&page=MarketingOrdersSmallBusiness
Guide. 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 (73 FR 9005, February 19,
2008) 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
Accordingly, the interim final rule
amending 7 CFR part 989 which was
published at 73 FR 9005 on February 19,
2008, is adopted as a final rule without
change.
I
Dated: July 1, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing
Service.
[FR Doc. E8–15293 Filed 7–3–08; 8:45 am]
BILLING CODE 3410–02–P
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
38311
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2008–0740; Directorate
Identifier 2008–NM–077–AD; Amendment
39–15605; AD 2008–14–10]
RIN 2120–AA64
Airworthiness Directives; Lockheed
Model 382, 382B, 382E, 382F, 382G,
and 382J Series Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule; request for
comments.
AGENCY:
SUMMARY: We are adopting a new
airworthiness directive (AD) for all
Lockheed Model 382, 382B, 382E, 382F,
382G, and 382J series airplanes. This
AD requires, among other actions, an
inspection to determine whether a
certain upper engine mount bolt is
installed, and replacement of any
discrepant upper engine mount bolt
with a new one. This AD results from
a report indicating that several upper
engine mount bolts manufactured by a
certain supplier broke during
installation. We are issuing this AD to
prevent failure of the upper engine
mount bolts, which could result in
reduced structural capability of an
engine mount, and possible separation
of a strut and engine from the airplane
during flight.
DATES: This AD is effective July 22,
2008.
We must receive comments on this
AD by September 5, 2008.
ADDRESSES: You may send comments by
any of the following methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 202–493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.
• Hand Delivery: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590, between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays.
Examining the AD Docket
You may examine the AD docket on
the Internet at https://
www.regulations.gov; or in person at the
Docket Management Facility between 9
a.m. and 5 p.m., Monday through
E:\FR\FM\07JYR1.SGM
07JYR1
Agencies
[Federal Register Volume 73, Number 130 (Monday, July 7, 2008)]
[Rules and Regulations]
[Pages 38307-38311]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-15293]
========================================================================
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. 73, No. 130 / Monday, July 7, 2008 / Rules
and Regulations
[[Page 38307]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Docket No. AMS-FV-07-0130; FV08-989-1 FIR]
Raisins Produced From Grapes Grown in California; Final Free and
Reserve Percentages for 2007-08 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 the 2007-08 crop of 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 85 percent free and 15 percent
reserve. The percentages are intended to help stabilize raisin supplies
and prices, and strengthen market conditions.
DATES: Effective Date: August 6, 2008. The volume regulation
percentages apply to acquisitions of NS raisins from the 2007-08 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 J. 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, both as amended (7 CFR part 989),
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 2007-08 crop year, which began August 1, 2007, and ends July 31,
2008. 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 2007-08 crop NS raisins covered under
the order. The volume regulation percentages are 85 percent free and 15
percent reserve and were established through an interim final rule
published on February 19, 2008 (73 FR 9005). 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 for NS raisins on
October 4, 2007, and October 11, 2007.
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 free and reserve percentages. Pursuant to
Sec. 989.54(a) of the order, the Committee met on August 14, 2007, 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
[[Page 38308]]
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 2007-08
trade demand for NS raisins at 232,822 tons as shown below.
Computed Trade Demand
[Natural condition tons]
------------------------------------------------------------------------
NS Raisins
------------------------------------------------------------------------
Prior year's shipments.................................... 309,169
Multiplied by 90 percent.................................. 0.90
Equals adjusted base...................................... 278,252
Minus carryin inventory................................... 105,430
Plus desirable carryout................................... 60,000
Equals computed NS trade demand........................... 232,822
------------------------------------------------------------------------
Computation of Volume Regulation Percentages
Section 989.54(b) of the order requires that the Committee announce
crop estimates and determine whether volume regulation is warranted for
the varietal types for which it computed a trade demand. If the
Committee determines that volume regulation is warranted, it must also
compute and announce preliminary free and reserve percentages. Section
989.54(c) provides that the Committee may modify the preliminary free
and reserve percentages prior to February 15 by announcing interim
percentages which release less than the trade demand. Section 989.54(d)
requires the Committee to recommend final percentages no later than
February 15 which will tend to release the full trade demand. Final
percentages are established by USDA through informal rulemaking.
The Committee met on October 4 and October 11, 2007, and announced
a 2007-08 crop estimate of 273,908 tons for NS raisins pursuant to
Sec. 989.54(b). NS raisins are the major varietal type of California
raisin. The crop estimate of 273,908 tons was significantly higher than
the computed trade demand of 232,822 tons. Thus, the Committee
determined that volume regulation for NS raisins was warranted. The
Committee therefore announced preliminary volume regulation percentages
of 72 percent free and 28 percent reserve for NS raisins, which
released 85 percent of the computed trade demand, as required by the
order, since a field price had been established. Field price is the
price paid by handlers to producers for the free tonnage portion of
their crop. The field price for 2007-08 NS raisins is $1,210 per ton.
The Committee also announced interim volume regulation percentages of
84.75 percent free and 15.25 percent reserve, and recommended final
volume regulation percentages of 85 percent free and 15 percent reserve
pursuant to Sec. 989.54(d).
The Committee has historically recommended interim and final volume
regulation percentages later in the season. However, the Committee
determined it was in the best interest of producers and handlers to
establish interim and final percentages as soon as possible for the
2007-08 crop year. Rains during the harvest period this season while
grapes were lying on the ground to dry caused a problem with embedded
sand particles on a portion of the crop. To remedy this situation,
growers subjected the raisins to a process known as reconditioning to
remove the sand in order for the raisins to be acceptable for
acquisition by handlers. This process resulted in additional costs to
growers. Establishing interim and final percentages early in the season
allowed growers to be paid on a higher percentage of their crop earlier
in the season. This helped growers meet the costs of reconditioning,
and the reconditioned product was then suitable for acquisition and
processing by handlers.
Pursuant to Sec. 989.54(d), 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.............................................. 232,822
Divided by crop estimate.................................. 273,908
Equals the free percentage................................ 85.00
100 minus free percentage equals the reserve percentage... 15.00
------------------------------------------------------------------------
By the week ending May 17, 2008, deliveries of NS raisins totaled
322,458 tons of NS raisins. Thus, the committee's recommendation
provided handlers with an additional 41,267 tons over the computed
trade demand (322,458 tons x 85 percent = 274,089 tons; 274,089 tons-
232,822 tons = 41,267 tons). This additional tonnage is not expected to
cause disorderly marketing conditions, as California export shipments
are up about 30 percent due to other countries' declining export
shipments.
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 for the 2007-08 crop year. Application of the
final percentages made 232,822 tons of raisins available to handlers
when the crop estimate was realized. In addition, handlers are offered
additional reserve raisins for sale 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 to handlers for
free use. Handlers may sell their 10 plus 10 raisins to any market.
Based on 2006-07 NS shipments of 309,169 natural condition tons,
30,916.9 tons should have been made available in each of the 10 plus 10
offers. However, this amount was not available in reserve.
The first 10 plus 10 offer was made in February 2008. A total of
6,065.2 tons of remaining 2006-07 reserve raisins and 24,851.7 tons of
2007-08 reserve raisins (a total of 30,916.9 tons) were made available
to raisin handlers and all available tonnage was purchased and released
to handlers during the 2007-08 crop year.
The second 10 plus 10 offer (a balance of about 24,000 tons
remaining in the reserve pool) will be made available to handlers by
July 31, 2008. Thus, all available reserve pool raisins should be
offered to handlers for free use through the 10 plus 10 offers by the
end of the crop year.
In addition to the second anticipated 10 plus 10 purchase, 14,793
tons of 2006-07 reserve raisins were sold to handlers through 10 plus
10 offers in July 2007 and released to handlers in the 2007-08 crop
year (August 2007). Finally, 105,430 tons of free tonnage raisins were
carried into the 2007-08 crop year in handler's inventories. Combining
all the raisins available to handlers for use as free tonnage for the
2007-08 crop year (including the 232,822-ton trade demand) results in a
total supply of 404,962 tons of natural condition raisins, or 380,674
packed tons. This equates to 131 percent of the 2006-07 shipments of
309,169 natural condition tons or 290,628 packed tons. (Additionally,
at least another 41,000
[[Page 38309]]
tons of raisins are available to handlers for free use with the
Committee's underestimation of the crop.)
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 during 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 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.
There are approximately 21 handlers of California raisins who are
subject to regulation under the order and approximately 3,000 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 than $6,500,000, and small agricultural
producers are defined as those having annual receipts of less than
$750,000. No more than 8 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 regulation
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 2007-08 crop NS raisins. The volume regulation percentages are 85
percent free and 15 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 this season because the Committee's
October crop estimate of 273,908 tons was significantly higher than the
232,822 ton trade demand. As mentioned previously, by the week ending
May 17, 2008, acquisitions were at 322,458 tons.
The 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 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 62
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 from the 1993-94 through the 1997-98 seasons, although
production varied. As shown in the table below, during those years,
production varied from a low of 272,063 tons in 1996-97 to a high of
387,007 tons in 1993-94.
According to Committee data, the total producer return per ton
during those years, which includes proceeds from both free tonnage plus
reserve pool raisins, has varied from a low of $904.60 in 1993-94 to a
high of $1,049.20 in 1996-97. Producer prices for the 1998-99 and 1999-
2000 seasons increased significantly due to back-to-back short crops
during those years. Record large crops followed and producer prices
dropped dramatically for the 2000-01 through 2003-04 crop years, as
inventories grew while demand stagnated. However, producer prices were
higher for the 2004-05, 2005-06, and 2006-07 crop years.
The chart below shows data regarding NS raisin deliveries, field
prices, and producer prices over the past several years:
Natural Seedless (Natural Condition) Deliveries, Field Prices and Producer Prices
----------------------------------------------------------------------------------------------------------------
Producer
Crop year Deliveries Field prices prices (per
(tons) (per ton) \1\ ton)
----------------------------------------------------------------------------------------------------------------
2006-07......................................................... 282,999 $1,210.00 \2\ $1,089.00
2005-06......................................................... 319,126 1,210.00 \2\ 998.25
2004-05......................................................... 265,262 1,210.00 \3\ 1,210.00
2003-04......................................................... 296,864 810.00 567.00
2002-03......................................................... 388,010 745.00 491.20
[[Page 38310]]
2001-02......................................................... 377,328 880.00 650.94
2000-01......................................................... 432,616 877.50 603.36
1999-2000....................................................... 299,910 1,425.00 1,211.25
1998-99......................................................... 240,469 1,290.00 \3\ 1,290.00
1997-98......................................................... 382,448 1,250.00 946.52
1996-97......................................................... 272,063 1,220.00 1,049.20
1995-96......................................................... 325,911 1,160.00 1,007.19
1994-95......................................................... 378,427 1,160.00 928.27
1993-94......................................................... 387,007 1,155.00 904.60
----------------------------------------------------------------------------------------------------------------
\1\ Field prices for NS raisins are established by the Raisin Bargaining Association, and are also referred to
in the industry as the free tonnage price for raisins.
\2\ Return-to-date, reserve pool still open.
\3\ No volume regulation.
There are essentially two broad markets for raisins--domestic and
export. Domestic shipments have been generally increasing in recent
years. Although 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, they increased from 174,117 packed tons during the
2000-01 crop year to 188,944 tons during the 2006-07 crop year. Export
shipments ranged from a high of 107,931 packed tons in 1991-92 to a low
of 91,599 packed tons in the 1999-2000 crop year. Export shipments
increased to 106,755 tons of raisins during the 2004-05 crop year, but
fell to 101,684 tons in 2006-07. For the 2007-08 crop year, exports are
up about 30 percent due to a short crop from Turkey.
The per capita consumption of raisins has declined from 2.07 pounds
in 1988 to 1.44 pounds in 2005. 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 three of the
last four years (as reflected in increased commercial shipments),
production has been decreasing. Deliveries of NS dried raisins from
producers to handlers reached an all-time high of 432,616 tons in the
2000-01 crop year. This large crop was preceded by two short crop
years; deliveries were 240,469 tons in 1998-99 and 299,910 tons in
1999-2000. Deliveries for the 2000-01 crop year soared to a record
level because of increased bearing acreage and yields. Deliveries for
the 2001-02 crop year were at 377,328 tons, 388,010 tons for the 2002-
03 crop year, 296,864 for the 2003-04 crop year, and 265,262 tons for
the 2004-05 crop year.
After three crop years of high production and a large 2001-02
carryin inventory, the industry diverted raisin production to other
uses or removed bearing vines. Diversions/removals totaled 38,000 acres
in 2001; 27,000 acres in 2002; and 8,000 acres of vines in 2003. These
actions resulted in declining deliveries of 296,864 tons for the 2003-
04 crop year and 265,262 tons for the 2004-05 crop year. Although
deliveries increased in 2005-06 to 319,126 tons, this may have been
because fewer growers opted to contract with wineries, as raisin
variety grapes crushed in 2005-06 decreased by 161,000 green tons, the
equivalent of over 40,000 tons of raisins. In 2006-07, raisin
deliveries were again less than 300,000 tons, at 282,999 tons.
Deliveries have increased for the 2007-08 crop year, and were at
322,458 for the week ending May 17, 2008.
The order permits the industry to exercise volume regulation
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 May 17, 2008, showed that deliveries of
NS raisins were at 322,458 tons. The 15 percent reserve limited the
total free tonnage to 274,089 natural condition tons (.85 x 322,458 ton
crop). Adding the 274,089 ton figure with the carryin of 105,430 tons,
plus 45,710 tons of 10 plus 10 reserve raisins that were released to
handlers during the 2007-08 crop year (14,793 tons in August 2007 and
30,917 tons in February 2008) made the total free supply equal to
425,229 natural condition tons. Including the anticipated 24,000 tons
or reserve raisins that likely will be offered in the second 10 plus 10
offer to be held prior to July 31, 2008, the end of the crop year,
should make the total free supply 449,229 natural condition tons.
With volume regulation, producer prices are expected to be higher
than without volume regulation. This price increase is beneficial to
all producers regardless of size and enhances producers' total revenues
in comparison to no volume regulation. 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 2007-08 season for only one of the nine raisin varietal types
defined under the order.
The free and reserve percentages continue 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
[[Page 38311]]
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.
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
requirements 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 No. 0581-0178,
Vegetable and Specialty Crops. 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 14, 2007, October 4, 2007, and October
11, 2007, 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 14,
2007, and October 4, 2007, 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 February 19, 2008. Copies of the rule were mailed
by the Committee's staff to all Committee members and alternates and
raisin handlers. In addition, the rule was made available through the
Internet by USDA and the Office of the Federal Register. That rule
provided a 60-day comment period which ended April 21, 2008. No
comments were received during the comment period.
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/AMSv1.0/
ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBus
inessGuide. 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 (73 FR 9005, February 19, 2008) 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 73 FR 9005 on February 19, 2008, is adopted as a final
rule without change.
Dated: July 1, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E8-15293 Filed 7-3-08; 8:45 am]
BILLING CODE 3410-02-P