Raisins Produced From Grapes Grown in California; Final Free and Reserve Percentages for 2009-10 Crop Natural (Sun-Dried) Seedless Raisins, 35959-35962 [2010-15298]
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Federal Register / Vol. 75, No. 121 / Thursday, June 24, 2010 / Rules and Regulations
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[Doc. No. AMS–FV–09–0075; FV10–989–1
FIR]
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[FR Doc. 2010–15103 Filed 6–23–10; 8:45 am]
BILLING CODE 3710–8N–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
Raisins Produced From Grapes Grown
in California; Final Free and Reserve
Percentages for 2009–10 Crop Natural
(Sun-Dried) Seedless Raisins
AGENCY: Agricultural Marketing Service,
USDA.
ACTION: Affirmation of interim rule as
final rule.
SUMMARY: The Department of
Agriculture (USDA) is adopting, as a
final rule, without change, an interim
rule that established final volume
regulation percentages of 85 percent free
and 15 percent reserve for the 2009–10
crop of Natural (sun-dried) Seedless
(NS) raisins covered under the Federal
marketing order for California raisins
(order). The percentages are intended to
help stabilize raisin supplies and prices,
and strengthen market conditions.
DATES: Effective June 25, 2010. The
volume regulation percentages apply to
acquisitions of NS raisins from the
2009–10 crop until the reserve raisins
from that crop are disposed of under the
marketing order.
FOR FURTHER INFORMATION CONTACT:
Terry Vawter, Senior Marketing
Specialist, or Kurt J. Kimmel, Regional
Manager, California Marketing Field
Office, Marketing Order Administration
Branch, Fruit and Vegetable Programs,
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35959
AMS, USDA; Telephone: (559) 487–
5901; Fax: (559) 487–5906; or E-mail:
Terry.Vawter@ams.usda.gov or
Kurt.Kimmel@ams.usda.gov.
Small businesses may obtain
information on complying with this and
other marketing order regulations by
viewing a guide at the following Web
site: https://www.ams.usda.gov/
AMSv1.0/ams.fetchTemplate
Data.do?template=TemplateN&page=
MarketingOrdersSmallBusinessGuide;
or by contacting Antoinette Carter,
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:
Antoinette.Carter@ams.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.’’
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Order
12866.
The handling of California raisins is
regulated by 7 CFR part 989. The order
authorizes the establishment of volume
regulations, when warranted, for each
crop. Volume regulations: (1) Help the
industry address its marketing problems
by keeping supplies in balance with
demand; (2) strengthen market
conditions; (3) fully supply both the
domestic and export markets without
overburdening them; and (4) provide for
market expansion.
Volume regulation is warranted for
the 2009–10 crop of NS raisins because
the crop estimate (supply) exceeded the
trade demand (demand). In an interim
rule published in the Federal Register
on April 22, 2010, and effective on April
23, 2010 (75 FR 20897; Doc No. AMS–
FV–09–0075, FV10–989–1 IFR),
§ 989.257 was amended by
incorporating the 2009–10 crop year
final free and reserve percentages. This
rule continues in effect the rule that
established a final free percentage of 85
percent, and a final reserve percentage
of 15 percent, of NS raisins acquired by
handlers during the crop year, which
began August 1, 2009, and ends July 31,
2010.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), the Agricultural
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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. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 26 handlers
of California raisins who are subject to
regulation under the order and
approximately 3,000 raisin producers in
the regulated area. Small agricultural
service firms are defined by the Small
Business Administration (SBA) (13 CFR
121.201) as those having annual receipts
of less than $7,000,000, and small
agricultural producers as those having
annual receipts of less than $750,000.
Approximately 18 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 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 to
strengthen market conditions. If the
primary market (the normal domestic
market) is over-supplied with raisins,
grower prices decline substantially.
Pursuant to § 989.54(d) of the order,
this rule establishes final volume
regulation percentages for the 2009–10
crop year for 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 is warranted
this season because the crop estimate of
275,000 tons is significantly higher than
the 234,769 ton trade demand.
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 63 percent of the 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 1970s, over 50
percent of the raisin grapes were sold
fresh 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.
These fluctuations can result in
producer price instability and
disorderly market conditions.
Volume regulation is helpful to the
raisin industry because it lessens the
impact of such fluctuations and
contributes to orderly marketing. For
example, producer prices for NS raisins
remained fairly steady between the
1993–94 and 1997–98 crop years,
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 crop years 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, as noted below,
producer prices were higher for the
2004–05 through 2008–09 crop years:
NATURAL SEEDLESS (NATURAL CONDITION) DELIVERIES, FIELD PRICES AND PRODUCER PRICES
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Crop year
Field prices
(per ton)1
Deliveries (tons)
2008–09 ...........................................................................................................................
2007–08 ...........................................................................................................................
2006–07 ...........................................................................................................................
2005–06 ...........................................................................................................................
2004–05 ...........................................................................................................................
2003–04 ...........................................................................................................................
2002–03 ...........................................................................................................................
2001–02 ...........................................................................................................................
2000–01 ...........................................................................................................................
1999–2000 .......................................................................................................................
1998–99 ...........................................................................................................................
1997–98 ...........................................................................................................................
1996–97 ...........................................................................................................................
1995–96 ...........................................................................................................................
1994–95 ...........................................................................................................................
1993–94 ...........................................................................................................................
364,268
329,288
282,999
319,126
265,262
296,864
388,010
377,328
432,616
299,910
240,469
382,448
272,063
325,911
378,427
387,007
$1,310.00
1,210.00
1,210.00
1,210.00
1,210.00
810.00
745.00
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)
2 $1,139.70
2 1,028.50
1 1,089.00
1 998.25
3 1,210.00
567.00
491.20
650.94
603.36
1,211.25
3 1,290.00
946.52
1,049.20
1,007.19
928.27
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.
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35961
2 Return-to-date,
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3 No
reserve pool still open.
volume regulation.
There are essentially two broad
markets for raisins—domestic and
export. Domestic shipments generally
increased over the 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 193,609
packed tons during the 2007–08 crop
year and decreased to 191,929 packed
tons during the 2008–09 crop year.
Export shipments ranged from a high of
107,931 packed tons in the 1991–92
crop year to a low of 91,599 packed tons
in the 1999–2000 crop year. Since that
time, export shipments increased to
106,755 tons of raisins during the 2004–
05 crop year, fell to 101,684 tons in the
2006–07 crop year, and again increased
to 142,541 tons in the 2007–08 crop
year. This significant increase was due
to a short crop in Turkey. Export
shipments remained relatively high in
2008–09 at 125,789 tons.
The per capita consumption of raisins
has declined from 2.07 pounds in 1988
to 1.46 pounds in 2007. This decrease
is consistent with the decrease in the
per capita consumption of dried fruits
in general, which may be due to the
increasing year-round availability of
most types of fresh fruit.
While the overall demand for raisins
has increased in four of the last five
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
the 1998–99 crop year and 299,910 tons
in the 1999–2000 crop year. 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 tons 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 carry-in
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
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deliveries increased in 2005–06 crop
year to 319,126 tons, this may have been
because fewer growers opted to contract
with wineries, as raisin variety grapes
crushed in 2005–06 crop year decreased
by 161,000 green tons, the equivalent of
over 40,000 tons of raisins. In the 2006–
07 crop year, raisin deliveries were
again less than 300,000 tons at 282,999
tons and increased to 329,288 tons in
2007–08 crop year. The 2008–09 crop
year was considered to be a good crop
and the quality of the crop has a direct
bearing on the overall production with
364,268 tons of NS raisins delivered.
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
balance 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
provides for raisins that handlers can
market as free tonnage. Based on the
2009–10 crop year estimate of 275,000
tons, the 15 percent reserve would limit
the total free tonnage to 233,750 natural
condition tons (0.85 x the 275,000 ton
crop). Adding the estimated figure of
41,250 tons of raisins offered to
handlers through the 10 + 10 program
to the 233,750 tons of free tonnage, plus
126,824 tons of carry-in inventory, plus
12,137 tons of 2008–09 NS reserve pool
raisins released during the 2009–10 crop
year, results in a total supply of 413,961
tons of natural condition raisins.
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 are
generally established in years when the
supply exceeds the trade demand by a
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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,
the committee determined that volume
regulation was warranted for the 2009–
10 crop for only one of the nine raisin
varietal types defined under the order.
The free and reserve percentages
established in the interim rule release
the full trade demand and apply
uniformly to all handlers in the
industry, regardless of size. For NS
raisins, with the exception of the 1998–
99 and 2004–05 crop years, small and
large raisin producers and handlers
have been operating under volume
regulation percentages every year since
the 1983–84 crop year. There are no
known additional costs incurred by
small handlers that are not incurred by
large handlers. While the level of
benefits of this rulemaking are difficult
to quantify, the stabilizing effects of the
volume regulations impact small and
large handlers positively by helping
them maintain and expand markets
even though raisin supplies fluctuate
widely from season to season. Likewise,
price stability positively impacts small
and large producers by allowing them to
better anticipate the revenues their
raisins will generate.
This rule continues in effect the
action that established final volume
regulation percentages for the 2009–10
crop year for NS raisins at 85 percent
free and 15 percent reserve. The volume
regulation percentages are intended to
help stabilize raisin supplies and prices,
meet the needs of the domestic and
export markets, strengthen market
conditions, and expand marketing
opportunities.
This rule will not impose any
additional reporting or recordkeeping
requirements on either small or large
raisin handlers. As with all Federal
marketing order programs, reports and
forms are periodically reviewed to
reduce information requirements and
duplication by industry and public
sector agencies. In addition, USDA has
not identified any relevant Federal rules
that duplicate, overlap, or conflict with
this rule.
Further, the committee meeting on
October 6, 2009, at which this
recommendation was made, was widely
publicized throughout the raisin
industry, and all interested persons
were invited to attend the meeting and
encouraged to participate in the
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committee’s deliberations. Like all
committee meetings, the meeting was a
public meeting; and all entities, both
large and small, were able to express
their views on this issue.
Comments on the interim rule were
required to be received by May 24, 2010.
One comment supporting the rule was
received. Therefore, for the reasons
given in the interim rule, we are
adopting the interim rule as a final rule,
without change.
To view the interim rule, go to:
https://www.regulations.gov/search/
Regs/home.html#documentDetail?R=
0900006480add0ad.
This action also affirms information
contained in the interim rule concerning
Executive Orders 12866 and 12988, the
Paperwork Reduction Act (44 U.S.C.
Chapter 35), and the E–Gov Act (44
U.S.C. 101).
After consideration of all relevant
material presented, it is found that
finalizing the interim rule without
change, as published in the Federal
Register (75 FR 20897, April 22, 2010),
will tend to effectuate the declared
policy of the Act.
Farm and Rural Development Act
(CONACT) (7 U.S.C. 1926(a)(2)). The
amendment added the new SEARCH
grant program under which the
Secretary is authorized to make
predevelopment planning grants for
feasibility studies, design assistance,
and technical assistance to financially
distressed communities in rural areas
with populations of 2,500 or fewer
inhabitants for water and waste disposal
projects.
DATES: This rule is effective June 24,
2010.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements,
Raisins, Reporting and recordkeeping
requirements.
This final rule has been determined to
be not significant for purposes of
Executive Order 12866 and, therefore,
has not been reviewed by the Office of
Management and Budget (OMB).
PART 989—[AMENDED]
Executive Order 12988
Accordingly, the interim rule that
amended 7 CFR part 989 and that was
published at 75 FR 20897 on April 22,
2010, is adopted as a final rule, without
change.
This final rule has been reviewed in
accordance with Executive Order 12988,
Civil Justice Reform. RUS has
determined that this final rule meets the
applicable standards provided in
section 3 of the Executive Order. In
addition, all State and local laws and
regulations that are in conflict with this
rule will be pre-empted; no retroactive
effect will be given to the rule; and in
accordance with sec. 212(e) of the
Department of Agriculture
Reorganization Act of 1994 (7 U.S.C.
sec. 6912(e)), appeal procedures must be
exhausted before an action against the
Department or its agencies may be
initiated.
■
Dated: June 18, 2010.
Robert C. Keeney,
Acting Administrator, Agricultural Marketing
Service.
[FR Doc. 2010–15298 Filed 6–23–10; 8:45 am]
BILLING CODE 3410–02–P
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
FOR FURTHER INFORMATION CONTACT:
Anita O’Brien, Loan Specialist, Water
and Environmental Programs, U.S.
Department of Agriculture, Rural
Utilities Service, Room 2230 South
Building, Stop 1570, 1400
Independence Ave., SW., Washington,
DC 20250–1570. Telephone: (202) 690–
3789, FAX: (202) 690–0649, E-mail:
anita.obrien@usda.gov.
SUPPLEMENTARY INFORMATION:
Classification
Executive Order 12866
7 CFR Part 1774
Regulatory Flexibility Act Certification
RIN 0572–AC14
RUS has determined that this final
rule will not have a significant
economic impact on a substantial
number of small entities, as defined in
the Regulatory Flexibility Act (5 U.S.C.
601 et seq.). The RUS Water and
Environmental Programs provide loans
to borrowers at interest rates and terms
that are more favorable than those
generally available from the private
sector. RUS borrowers, as a result of
obtaining Federal financing, receive
economic benefits that exceed any
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Special Evaluation Assistance for
Rural Communities and Households
Program
ACTION:
Final rule.
SUMMARY: The Rural Utilities Service
(RUS) is issuing a regulation to establish
the Special Evaluation Assistance for
Rural Communities and Households
(SEARCH) Program as authorized by
Section 306(a)(2) of the Consolidated
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direct economic costs associated with
complying with RUS regulations and
requirements.
Information Collection and
Recordkeeping Requirements
The information collection and
recordkeeping requirements contained
in this final rule are pending approval
by OMB pursuant to the Paperwork
Reduction Act 1995 (44 U.S.C. Chapter
35) under control number 0572—New.
The paperwork contained in this rule
will not be effective until approved by
OMB.
E-Government Act Compliance
The Rural Utilities Service is
committed to the E-Government Act,
which requires Government agencies in
general to provide the public the option
of submitting information or transacting
business electronically to the maximum
extent possible.
National Environmental Policy Act
Certification
The Administrator of RUS has
determined that this final rule will not
significantly affect the quality of the
human environment as defined by the
National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.). Therefore,
this action does not require an
environmental impact statement or
assessment.
Catalog of Federal Domestic Assistance
The program described by this final
rule is listed in the Catalog of Federal
Domestic Assistance Programs under
number 10.759—Special Evaluation
Assistance for Rural Communities and
Households Program (SEARCH). This
catalog is available on a subscription
basis from the Superintendent of
Documents, the United States
Government Printing Office,
Washington, DC, 20402–9325, telephone
number (202) 512–1800 and at https://
www.cfda.gov.
Executive Order 12372
This program is not subject to the
requirements of Executive Order 12372,
‘‘Intergovernmental Review of Federal
Programs,’’ as implemented under
USDA’s regulations at 7 CFR part 3015.
Unfunded Mandates
This final rule contains no Federal
mandates (under the regulatory
provision of title II of the Unfunded
Mandates Reform Act of 1995) for State,
local, and Tribal governments or the
private sector. Therefore, this final rule
is not subject to the requirements of
section 202 and 205 of the Unfunded
Mandates Reform Act.
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]]>Agencies
[Federal Register Volume 75, Number 121 (Thursday, June 24, 2010)]
[Rules and Regulations]
[Pages 35959-35962]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-15298]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 989
[Doc. No. AMS-FV-09-0075; FV10-989-1 FIR]
Raisins Produced From Grapes Grown in California; Final Free and
Reserve Percentages for 2009-10 Crop Natural (Sun-Dried) Seedless
Raisins
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Affirmation of interim rule as final rule.
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SUMMARY: The Department of Agriculture (USDA) is adopting, as a final
rule, without change, an interim rule that established final volume
regulation percentages of 85 percent free and 15 percent reserve for
the 2009-10 crop of Natural (sun-dried) Seedless (NS) raisins covered
under the Federal marketing order for California raisins (order). The
percentages are intended to help stabilize raisin supplies and prices,
and strengthen market conditions.
DATES: Effective June 25, 2010. The volume regulation percentages apply
to acquisitions of NS raisins from the 2009-10 crop until the reserve
raisins from that crop are disposed of under the marketing order.
FOR FURTHER INFORMATION CONTACT: Terry Vawter, Senior 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: Terry.Vawter@ams.usda.gov or
Kurt.Kimmel@ams.usda.gov.
Small businesses may obtain information on complying with this and
other marketing order regulations by viewing a guide at the following
Web site: https://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide; or by contacting Antoinette Carter, 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:
Antoinette.Carter@ams.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.''
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Order 12866.
The handling of California raisins is regulated by 7 CFR part 989.
The order authorizes the establishment of volume regulations, when
warranted, for each crop. Volume regulations: (1) Help the industry
address its marketing problems by keeping supplies in balance with
demand; (2) strengthen market conditions; (3) fully supply both the
domestic and export markets without overburdening them; and (4) provide
for market expansion.
Volume regulation is warranted for the 2009-10 crop of NS raisins
because the crop estimate (supply) exceeded the trade demand (demand).
In an interim rule published in the Federal Register on April 22, 2010,
and effective on April 23, 2010 (75 FR 20897; Doc No. AMS-FV-09-0075,
FV10-989-1 IFR), Sec. 989.257 was amended by incorporating the 2009-10
crop year final free and reserve percentages. This rule continues in
effect the rule that established a final free percentage of 85 percent,
and a final reserve percentage of 15 percent, of NS raisins acquired by
handlers during the crop year, which began August 1, 2009, and ends
July 31, 2010.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural
[[Page 35960]]
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. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 26 handlers of California raisins who are
subject to regulation under the order and approximately 3,000 raisin
producers in the regulated area. Small agricultural service firms are
defined by the Small Business Administration (SBA) (13 CFR 121.201) as
those having annual receipts of less than $7,000,000, and small
agricultural producers as those having annual receipts of less than
$750,000. Approximately 18 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 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 to 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 establishes
final volume regulation percentages for the 2009-10 crop year for 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 is warranted this season because the crop
estimate of 275,000 tons is significantly higher than the 234,769 ton
trade demand.
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 63
percent of the 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
1970s, over 50 percent of the raisin grapes were sold fresh 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.
These fluctuations can result in producer price instability and
disorderly market conditions.
Volume regulation is helpful to the raisin industry because it
lessens the impact of such fluctuations and contributes to orderly
marketing. For example, producer prices for NS raisins remained fairly
steady between the 1993-94 and 1997-98 crop years, 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 crop years 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, as noted below,
producer prices were higher for the 2004-05 through 2008-09 crop years:
Natural Seedless (Natural Condition) Deliveries, Field Prices and Producer Prices
----------------------------------------------------------------------------------------------------------------
Deliveries Field prices Producer prices
Crop year (tons) (per ton)\1\ (per ton)
------------------------------------------------------------------------------------------------
2008-09................................... 364,268 $1,310.00 \2\ $1,139.70
2007-08................................... 329,288 1,210.00 \2\ 1,028.50
2006-07................................... 282,999 1,210.00 \1\ 1,089.00
2005-06................................... 319,126 1,210.00 \1\ 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
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
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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.
[[Page 35961]]
\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 generally increased over the 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
193,609 packed tons during the 2007-08 crop year and decreased to
191,929 packed tons during the 2008-09 crop year. Export shipments
ranged from a high of 107,931 packed tons in the 1991-92 crop year to a
low of 91,599 packed tons in the 1999-2000 crop year. Since that time,
export shipments increased to 106,755 tons of raisins during the 2004-
05 crop year, fell to 101,684 tons in the 2006-07 crop year, and again
increased to 142,541 tons in the 2007-08 crop year. This significant
increase was due to a short crop in Turkey. Export shipments remained
relatively high in 2008-09 at 125,789 tons.
The per capita consumption of raisins has declined from 2.07 pounds
in 1988 to 1.46 pounds in 2007. This decrease is consistent with the
decrease in the per capita consumption of dried fruits in general,
which may be due to the increasing year-round availability of most
types of fresh fruit.
While the overall demand for raisins has increased in four of the
last five 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 the 1998-99 crop year and
299,910 tons in the 1999-2000 crop year. 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 tons 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
carry-in 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 crop year to 319,126 tons, this may
have been because fewer growers opted to contract with wineries, as
raisin variety grapes crushed in 2005-06 crop year decreased by 161,000
green tons, the equivalent of over 40,000 tons of raisins. In the 2006-
07 crop year, raisin deliveries were again less than 300,000 tons at
282,999 tons and increased to 329,288 tons in 2007-08 crop year. The
2008-09 crop year was considered to be a good crop and the quality of
the crop has a direct bearing on the overall production with 364,268
tons of NS raisins delivered.
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 balance
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 provides for raisins that handlers
can market as free tonnage. Based on the 2009-10 crop year estimate of
275,000 tons, the 15 percent reserve would limit the total free tonnage
to 233,750 natural condition tons (0.85 x the 275,000 ton crop). Adding
the estimated figure of 41,250 tons of raisins offered to handlers
through the 10 + 10 program to the 233,750 tons of free tonnage, plus
126,824 tons of carry-in inventory, plus 12,137 tons of 2008-09 NS
reserve pool raisins released during the 2009-10 crop year, results in
a total supply of 413,961 tons of natural condition raisins.
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
are generally established 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, the committee determined that volume
regulation was warranted for the 2009-10 crop for only one of the nine
raisin varietal types defined under the order.
The free and reserve percentages established in the interim rule
release the full trade demand and apply uniformly to all handlers in
the industry, regardless of size. For NS raisins, with the exception of
the 1998-99 and 2004-05 crop years, small and large raisin producers
and handlers have been operating under volume regulation percentages
every year since the 1983-84 crop year. There are no known additional
costs incurred by small handlers that are not incurred by large
handlers. While the level of benefits of this rulemaking are difficult
to quantify, the stabilizing effects of the volume regulations impact
small and large handlers positively by helping them maintain and expand
markets even though raisin supplies fluctuate widely from season to
season. Likewise, price stability positively impacts small and large
producers by allowing them to better anticipate the revenues their
raisins will generate.
This rule continues in effect the action that established final
volume regulation percentages for the 2009-10 crop year for NS raisins
at 85 percent free and 15 percent reserve. The volume regulation
percentages are intended to help stabilize raisin supplies and prices,
meet the needs of the domestic and export markets, strengthen market
conditions, and expand marketing opportunities.
This rule will not impose any additional reporting or recordkeeping
requirements on either small or large raisin handlers. As with all
Federal marketing order programs, reports and forms are periodically
reviewed to reduce information requirements and duplication by industry
and public sector agencies. In addition, USDA has not identified any
relevant Federal rules that duplicate, overlap, or conflict with this
rule.
Further, the committee meeting on October 6, 2009, at which this
recommendation was made, was widely publicized throughout the raisin
industry, and all interested persons were invited to attend the meeting
and encouraged to participate in the
[[Page 35962]]
committee's deliberations. Like all committee meetings, the meeting was
a public meeting; and all entities, both large and small, were able to
express their views on this issue.
Comments on the interim rule were required to be received by May
24, 2010. One comment supporting the rule was received. Therefore, for
the reasons given in the interim rule, we are adopting the interim rule
as a final rule, without change.
To view the interim rule, go to: https://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480add0ad.
This action also affirms information contained in the interim rule
concerning Executive Orders 12866 and 12988, the Paperwork Reduction
Act (44 U.S.C. Chapter 35), and the E-Gov Act (44 U.S.C. 101).
After consideration of all relevant material presented, it is found
that finalizing the interim rule without change, as published in the
Federal Register (75 FR 20897, April 22, 2010), 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--[AMENDED]
0
Accordingly, the interim rule that amended 7 CFR part 989 and that was
published at 75 FR 20897 on April 22, 2010, is adopted as a final rule,
without change.
Dated: June 18, 2010.
Robert C. Keeney,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2010-15298 Filed 6-23-10; 8:45 am]
BILLING CODE 3410-02-P
