U.S. Standards for Grades of Shelled Walnuts and Walnuts in the Shell, 39655-39658 [2017-17641]

Download as PDF 39655 Rules and Regulations Federal Register Vol. 82, No. 161 Tuesday, August 22, 2017 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. DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 51 [Document Number AMS–SC–16–0005, SC– 16–331] U.S. Standards for Grades of Shelled Walnuts and Walnuts in the Shell Agricultural Marketing Service, USDA. ACTION: Final rule. AGENCY: This rule revises the U.S. Standards for Grades of Shelled Walnuts and the U.S. Standards for Grades of Walnuts in the Shell issued under the Agricultural Marketing Agreement Act of 1946. The Agricultural Marketing Service (AMS) of the Department of Agriculture (USDA) is amending the color requirements to include redcolored walnuts. In addition, AMS is removing the ‘‘Unclassified’’ section. These revisions will modernize the standards to more accurately represent today’s marketing practices and to meet growing consumer demand by providing greater marketing flexibility. DATES: Effective September 21, 2017. FOR FURTHER INFORMATION CONTACT: David G. Horner, Agricultural Marketing Specialist, Specialty Crops Inspection Division, USDA/AMS Specialty Crops Program, 100 Riverside Parkway, Suite 101, Fredericksburg, VA 22406; telephone (540) 361–1120; fax (540) 361–1199; or email Dave.Horner@ ams.usda.gov. Copies of the revised U.S. Standards for Grades of Shelled Walnuts and Walnuts in the Shell are available at https://www.regulations.gov or https:// www.ams.usda.gov/. SUPPLEMENTARY INFORMATION: The changes in these two sets of standards will permit grade certification of redcolored walnut varieties. These revisions also affect the grade requirements under the marketing order, 7 CFR part 984, issued under the sradovich on DSK3GMQ082PROD with RULES SUMMARY: VerDate Sep<11>2014 16:39 Aug 21, 2017 Jkt 241001 Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 601–674) and applicable imports. Executive Orders 12866 and 13563 This rule does not meet the definition of a significant regulatory action contained in section 3(f) of Executive Order 12866, and is not subject to review by the Office of Management and Budget (OMB). Additionally, because this rule does not meet the definition of a significant regulatory action it does not trigger the requirements contained in Executive Order 13771. See OMB’s Memorandum titled ‘‘Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017 titled ‘Reducing Regulation and Controlling Regulatory Costs’ ’’ (February 2, 2017). Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 13175 This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation would not have substantial and direct effects on Tribal governments and would not have significant Tribal implications. Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this rule. Regulatory Flexibility Act and Paperwork Reduction Act Pursuant to the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601–612), AMS has considered the economic impacts of the revisions to the U.S. Standards for Grades of Shelled Walnuts and the U.S. Standards for PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 Grades of Walnuts in the Shell. The purpose of the RFA is to structure regulatory actions so small businesses will not be unduly or disproportionately burdened. Accordingly, AMS has prepared the following final regulatory flexibility analysis. The current U.S. walnut standards have four color classifications: Extra Light, Light, Light Amber, and Amber. Product that does not meet these color standards cannot be certified to a U.S. grade. AMS is revising these standards to include a new classification for redcolored walnuts. In addition, AMS is eliminating the ‘‘Unclassified’’ section. These revisions modernize the current grading standards by allowing the industry to meet the growing consumer demand for red-colored walnuts and by promoting better market information and greater marketing flexibility within the industry. The process of grading improves the functioning of a commodity market. Assigning different prices to different product characteristics and levels of quality increases opportunities for profitable trade. Including red-colored varieties to the walnut grading standards will facilitate additional market opportunities for walnut producers and other participants in the supply chain. The revision will result in a minor change only to the color requirements of the current standards. AMS anticipates that there will be little or no additional cost to implement this revision. This change applies uniformly to all market participants, and will not result in disproportionate additional costs being borne by small walnut producers or other small businesses. To determine the proportion of walnut producers that would be considered small, AMS conducted the following analysis. The Small Business Administration (SBA) defines small agricultural producers as those with annual receipts of less than $750,000 (13 CFR 121.601). AMS used crop value per acre to determine the number of bearing acres required to generate annual sales of $750,000 or more, and came to 136 bearing acres. To reach this number, AMS divided the total crop value measured in dollars by the total utilized production measured in tons. Using annual National Agricultural Statistics Service (NASS) data for the years 2010 to 2014, the 5-year average crop value E:\FR\FM\22AUR1.SGM 22AUR1 39656 Federal Register / Vol. 82, No. 161 / Tuesday, August 22, 2017 / Rules and Regulations sradovich on DSK3GMQ082PROD with RULES was $1,507,478,000; utilized production was 504,800 tons; and, grower price was $2,982 per ton. AMS multiplied the price by yield to find the crop value per acre of $5,670 on average over 5 years. Finally, AMS divided the SBA-defined annual sales threshold of $750,000 by value per acre, which resulted in 136 acres. The NASS Agricultural Census is conducted every 5 years and in 2012 showed that 87 percent of walnut farming operations in the U.S. fell into its Census category of ‘‘under 100 bearing acres’’ of walnuts. AMS estimates that the proportion of walnut growers that qualify as small businesses under the SBA definition is likely to be close to 90 percent, given the probable exclusion in the ‘‘under 100 bearing acres’’ Census category of walnut producers with bearing acreage between 100 and 136. These small growers will not be disproportionately affected by the final rule as all changes to the standards will be applied uniformly to all market participants. In August 2015, the Grades and Standards Committee of the California Walnut Board and Commission voted unanimously to revise the U.S. walnut standards to include non-amber cultivars such as red-colored varieties. More than 99 percent of U.S. walnuts are produced in California. Addition of an expanded color certification grade will encourage greater revenue to flow into the industry due to greater marketing opportunities for red-colored nuts. Revising the current grading standards to include red walnuts will come at a minimal cost to the industry. The benefits of modernized grading standards, which include better market information and greater marketing flexibility, exceed the minor costs to market participants of implementing this revision to the U.S. standards for walnuts. Background The current U.S. walnut standards only permit the following four colors: Extra Light, Light, Light Amber, and Amber. However, consumer demand is growing for red walnuts in the United States. In China, the Livermore variety (a red-colored walnut) is very desirable. U.S. growers and companies expect sales to continue rising domestically and in China, especially once red walnuts are permitted grade certification. To address anticipated consumer needs, the Grades and Standards Committee of the California Walnut Board and Commission voted unanimously in August 2015 to revise the U.S. walnut standards to include VerDate Sep<11>2014 16:39 Aug 21, 2017 Jkt 241001 non-amber cultivars, beginning with the Livermore variety. Later, the California Walnut Board and Commission sent an official letter to the AMS Administrator formally requesting the addition of redcolored varieties. On November 25, 2016, AMS published a Proposed Rule in the Federal Register (81 FR 85164) soliciting comments on its proposal to amend the standards to (1) include redcolored walnuts and (2) remove the ‘‘Unclassified’’ section. On March 23, 2017, AMS published a ‘‘Reopening of the comment period’’ in the Federal Register (82 FR 14832). The extended comment period closed April 24, 2017. To view the eight posted comments, please visit https://www.regulations.gov. Six commenters supported the changes. One supporter was a trade association representing nearly 4,000 family farms, nearly 60,000 jobs, and a $1.7 billion walnut industry. The other supporting commenters were from the general public. Two of the supporting individuals asked for clarification on the following: • Was there a health hazard in the past, preventing red walnuts from being certified to a U.S. grade? No. When the USDA Walnut Color Chart was developed in 1967, walnuts came in light to dark amber colors. Since then, red varieties of walnuts (e.g., Livermore) have been bred and seen increased demand. The standards are being updated to reflect the changing market. • Are red walnuts a type of English walnut? Yes. Red walnuts, such as the Livermore variety, are a Juglans Regia cultivar with a red seed coat. • What would prevent the industry from marketing dyed walnuts as true red walnuts? Marketing Order 984, which regulates walnuts grown in California, prohibits walnuts from being modified in any form (over 99 percent of U.S. walnuts are grown in California). In addition, the U.S. grade standards have no provision for artificial coloring and, therefore, walnuts could not be certified to grade if color was added. Two commenters, representing the general public, opposed the changes. One believed red walnuts should be free from regulations and the other believed it would affect the market negatively. The purpose of U.S. grade standards is to facilitate the marketing of agriculture in the United States and around the world. These revisions come at the request of the U.S. walnut industry. In addition, AMS believes these revisions would increase supply of red walnuts. Marketing Order 984 requires walnuts grown in California to be certified to a U.S. grade. Once red walnuts can be grade certified, they will become more PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 available to domestic and global consumers. Based on the above information gathered, AMS is making the following revisions in the U.S. Standards for Grades of Shelled Walnuts: • § 51.2276 Color chart: Removed and reserved. The information in this section regarding the U.S.D.A. Walnut Color Chart is obsolete. • § 51.2277 U.S. No. 1(a): Revised to include red walnuts. • § 51.2278 U.S. Commercial (a): Revised to include red walnuts. • § 51.2279 Unclassified: Removed and reserved. AMS is removing this section in all standards as they are revised, as it is no longer considered necessary. • § 51.2281 Color classifications: The section is reorganized into subparts (a) and (b) to include red walnuts. • § 51.2282 Table II: Revised to include red walnuts. • § 51.2283 Off color: Revised to include red walnuts. In addition, AMS is making the following revisions in the U.S. Standards for Grades of Walnuts in the Shell: • § 51.2946 Color chart: Removed and reserved. This section is now redundant and no longer needed. • § 51.2948 U.S. No. 1(a), § 51.2949 U.S. No. 2(a), and § 51.2950 U.S. No 3(a): Subpart (1) was added to subpart (a) in each section to accommodate red walnuts. • § 51.2951 Unclassified: Removed and reserved. AMS is removing this section in all standards as they are revised, as it is no longer considered necessary. • § 51.2954 Tolerances for grade defects: Revised to include red walnuts. The U.S. Standards for Grades of Shelled Walnuts and the U.S. Standards for Grades of Walnuts in the Shell will be effective 30 days after publication of this rule in the Federal Register. List of Subjects in 7 CFR Part 51 Food grades and standards, Fruits, Nuts, Reporting and recordkeeping requirements, Vegetables. For reasons set forth in the preamble, 7 CFR part 51 is amended as follows: PART 51—[AMENDED] 1. The authority citation for part 51 continues to read as follows: ■ Authority: 7 U.S.C. 1621–1627. § 51.2276 [Removed and reserved] 2. Section 51.2276 is removed and reserved. ■ 3. In § 51.2277, paragraph (a) is revised to read as follows: ■ E:\FR\FM\22AUR1.SGM 22AUR1 39657 Federal Register / Vol. 82, No. 161 / Tuesday, August 22, 2017 / Rules and Regulations § 51.2277 U.S. No. 1. * * * * * (a) Color shall be specified in connection with this grade in terms of ‘‘extra light,’’ ‘‘light,’’ ‘‘light amber,’’ or ‘‘amber’’ from the USDA Walnut Color Chart or in terms of ‘‘red’’ color. The color classifications in the USDA Walnut Color Chart shall not apply to ‘‘red’’ color. Furthermore, ‘‘red’’ color shall not be mixed with ‘‘extra light,’’ ‘‘light,’’ ‘‘light amber,’’ or ‘‘amber’’ colors. (See § 51.2281 and § 51.2282.) * * * * * ■ 4. In § 51.2278, paragraph (a) is revised to read as follows: § 51.2278 * * U.S. Commercial. * * * (a) Color of walnuts based on the USDA Walnut Color Chart shall be not darker than the ‘‘amber’’ classification. There are no color requirements for ‘‘red’’ color. Color may be specified in connection with the grade in terms of one of the color classifications in the USDA Walnut Color Chart or ‘‘red’’ color. ‘‘Red’’ color shall not be mixed with ‘‘extra light,’’ ‘‘light,’’ ‘‘light amber,’’ or ‘‘amber’’ colors. (See § 51.2281 and § 51.2282.) * * * * * § 51.2279 [Removed and reserved] 5. Section 51.2279 is removed and reserved. ■ ■ 6. Revise § 51.2281 to read as follows: § 51.2281 Color classifications. The following classifications are provided to describe the color of any lot: (a) ‘‘Extra light,’’ ‘‘light,’’ ‘‘light amber,’’ and ‘‘amber:’’ The portions of kernels in the lot shall be not darker than the darkest color permitted in the specified classification as shown on the USDA Walnut Color Chart. (b) ‘‘Red:’’ There are no color requirements. 7. In § 51.2282, Table II is amended by adding an entry for ‘‘Red’’ to the end of the table and by revising footnote 1 to read as follows: ■ § 51.2282 * Tolerances for color. * * * * TABLE II Tolerances for color Color classification Darker than extra light 1 * * * * Red ................................................................................................................... 1 See ■ Darker than light amber 1 * ........................ ........................ Darker than amber 1 * ........................ * ........................ illustration of this term on USDA Walnut Color Chart. 8. Revise § 51.2283 to read as follows: § 51.2283 Off color. The term ‘‘off color’’ is not a color classification, but shall be applied to any lot which fails to meet the requirements of the ‘‘amber’’ classification when applying the color classifications in the USDA Walnut Color Chart. Off color shall not be used for ‘‘red’’ color. § 51.2946 [Removed and reserved] 9. Section 51.2946 is removed and reserved. ■ 10. In § 51.2948, paragraph (a) is revised to read as follows: ■ § 51.2948 16:39 Aug 21, 2017 Jkt 241001 U.S. No. 2. * * * * * (a) Kernel color shall be specified in connection with this grade in terms of ‘‘extra light,’’ ‘‘light,’’ ‘‘light amber,’’ or ‘‘amber’’ from the USDA Walnut Color Chart or in terms of ‘‘red’’ color. The color classifications in the USDA Walnut Color Chart shall not apply to ‘‘red’’ color. Furthermore, ‘‘red’’ color shall not be mixed with ‘‘extra light,’’ ‘‘light,’’ ‘‘light amber,’’ or ‘‘amber’’ colors. When kernel color is based on the color classifications from the USDA Walnut Color Chart, at least 70 percent, by count, of the walnuts have kernels which are not darker than ‘‘light amber,’’ and which are free from grade defects: Provided, That at least four- VerDate Sep<11>2014 sevenths of the above amount, or 40 percent of the walnuts have kernels which are not darker than ‘‘light.’’ Higher percentages of nuts with kernels not darker than ‘‘light amber’’ which are free from grade defects and/or higher percentages with kernels not darker than ‘‘light’’ which are free from grade defects, may be specified in accordance with the facts. (See § 51.2954.) * * * * * ■ 11. In § 51.2949, paragraph (a) is revised to read as follows: § 51.2949 U.S. No. 1. * sradovich on DSK3GMQ082PROD with RULES Darker than light 1 * * * * (a) Kernel color shall be specified in connection with this grade in terms of ‘‘extra light,’’ ‘‘light,’’ ‘‘light amber,’’ or ‘‘amber’’ from the USDA Walnut Color Chart or in terms of ‘‘red’’ color. The color classifications in the USDA Walnut Color Chart shall not apply to ‘‘red’’ color. Furthermore, ‘‘red’’ color shall not be mixed with ‘‘extra light,’’ ‘‘light,’’ ‘‘light amber,’’ or ‘‘amber’’ colors. When kernel color is based on the color classifications from the USDA Walnut Color Chart, at least 60 percent, by count, of the walnuts have kernels which are not darker than ‘‘light amber,’’ and which are free from grade defects. Higher percentages of nuts with kernels not darker than ‘‘light amber’’ which are free from grade defects, and/ or percentages with kernels not darker PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 than ‘‘light’’ which are free from grade defects, may be specified in accordance with the facts. (See § 51.2954.) * * * * * 12. In § 51.2950, paragraph (a) is revised to read as follows: ■ § 51.2950 U.S. No. 3. * * * * * (a) Kernel color may be specified in connection with this grade in terms of ‘‘light amber’’ or ‘‘light’’ from the USDA Walnut Color Chart or in terms of ‘‘red’’ color. The color classifications in the USDA Walnut Color Chart shall not apply to ‘‘red’’ color. Furthermore, ‘‘red’’ color shall not be mixed with ‘‘extra light,’’ ‘‘light,’’ ‘‘light amber,’’ or ‘‘amber’’ colors. When kernel color is based on the color classifications from the USDA Walnut Color Chart, there is no requirement in this grade for the percentage of walnuts having kernels which are ‘‘light amber’’ or ‘‘light.’’ However, the percentage, by count, of nuts with kernels not darker than ‘‘light amber’’ which are free from grade defects and/or the percentage with kernels not darker than ‘‘light’’ which are free from grade defects, may be specified in accordance with the facts. (See § 51.2954.) * * * * * E:\FR\FM\22AUR1.SGM 22AUR1 39658 § 51.2951 Federal Register / Vol. 82, No. 161 / Tuesday, August 22, 2017 / Rules and Regulations [Removed and reserved] 14. In § 51.2954, the table is revised to read as follows: ■ 13. Section 51.2951 is removed and reserved. ■ § 51.2954 * Tolerances for grade defects. * * * * TOLERANCES FOR GRADE DEFECTS Grade External (shell) defects Internal (kernel) defects Kernel color based on USDA Walnut Color Chart U.S. No. 1 ...... 10%, by count, for splits. 5%, by count, for other shell defects, including not more than 3% seriously damaged. U.S. No. 2 ...... 10%, by count, for splits. 10%, by count, for other shell defects, including not more than 5% serious damage by adhering hulls. No tolerance to reduce the required 70% of ‘‘light amber’’ kernels or the required 40% of ‘‘light’’ kernels or any larger percentage of ‘‘light amber’’ or ‘‘light’’ kernels specified. No tolerance to reduce the required 60% or any specified larger percentage of ‘‘light amber’’ kernels, or any specified percentage of ‘‘light’’ kernels. U.S. No. 3 ...... Same as above tolerance for U.S. No. 2. 10% total, by count, including not more than 6% which are damaged by mold or insects or seriously damaged by other means, of which not more than 5⁄6 or 5% may be damaged by insects, but no part of any tolerance shall be allowed for walnuts containing live insects. 15% total, by count, including not more than 8% which are damaged by mold or insects or seriously damaged by other means, of which not more than 5/8 or 5% may be damaged by insects, but no part of any tolerance shall be allowed for walnuts containing live insects. Same as above tolerance for U.S. No. 2 ..... Dated: August 16, 2017. Bruce Summers, Acting Administrator, Agricultural Marketing Service. [FR Doc. 2017–17641 Filed 8–21–17; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 52 [Document Number AMS–FV–08–0076; SC– 17–330] United States Standards for Grades of Frozen Onions Agricultural Marketing Service, USDA. ACTION: Final notification. AGENCY: The Agricultural Marketing Service (AMS) of the Department of Agriculture (USDA) is establishing voluntary United States Standards for Grades of Frozen Onions. The grade standards provide a common language for trade, a means of measuring value in the marketing of frozen onions, and guidance on the effective use of frozen onions. DATES: Effective Date: September 21, 2017. sradovich on DSK3GMQ082PROD with RULES SUMMARY: FOR FURTHER INFORMATION CONTACT: Contact Brian E. Griffin, Agricultural Marketing Specialist, Specialty Crops Inspection Division, Specialty Crops Program, Agricultural Marketing Service, U.S. Department of Agriculture, VerDate Sep<11>2014 16:39 Aug 21, 2017 Jkt 241001 1400 Independence Avenue SW., Room 1536, South Building; STOP 0240, Washington, DC 20250; telephone (202) 720–5021; fax (202) 690–1527; or, email brian.griffin@ams.usda.gov. Copies of the new U.S. Standards for Grades of Frozen Onions are available at https:// www.regulations.gov or https:// www.ams.usda.gov/. SUPPLEMENTARY INFORMATION: Section 203(c) of the Agricultural Marketing Act of 1946 (Act) (7 U.S.C. 1621–1627), as amended, directs and authorizes the Secretary of Agriculture ‘‘to develop and improve standards of quality, condition, quantity, grade, and packaging, and recommend and demonstrate such standards in order to encourage uniformity and consistency in commercial practices.’’ AMS is committed to carrying out this authority in a manner that facilitates the marketing of agricultural commodities and makes copies of official grade standards available upon request. The United States Standards for Grades of Fruits and Vegetables unrelated to Federal Marketing Orders or U.S. Import Requirements no longer appear in the Code of Federal Regulations, but are maintained by USDA, AMS, Specialty Crops Program, and are available at https://www.ams.usda.gov/gradesstandards. AMS is establishing the U.S. Standards for Grades of Frozen Onions using the procedures in part 36, Title 7 of the Code of Federal Regulations (7 CFR part 36). Background: The American Frozen Food Institute (AFFI) petitioned AMS to PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 Kernel color based on red No tolerance to reduce any percentage of ‘‘light amber’’ or ‘‘light’’ kernel specified. develop new grade standards for frozen onions. AFFI is a national trade association representing the interests of U.S. frozen food processors and their suppliers in all frozen food sectors, including processors and packers of frozen onions. AFFI’s more than 500 member companies represent approximately 90 percent of all frozen food processed annually in the United States. The AFFI petition provided information on product styles, sample sizes, and a product description for use in the grade standards. AMS asked the petitioner for various styles of samples in order to determine grades of frozen onions. AMS distributed several discussion drafts of proposed standards to AFFI, instituted changes to the drafts once agreement was reached, then published several Federal Register documents in order to receive comments from all interested parties (see 66 FR 21116, 68 FR 11801, 68 FR 27010, 76 FR 31575, 81 FR 84506, and 82 FR 12424). Comments In the most recent comments published November 23, 2016, in 81 FR 84506, and extended comment period published March 3, 2017, in 82 FR 12424, AMS received 19 comments. All comments received were from the general public. Three commenters stated they did not feel there was a need for Government grades of frozen onions. AMS developed the proposed U.S. Standards for Grades of Frozen Onions at the request of, and in cooperation with, the frozen food industry. The U.S. E:\FR\FM\22AUR1.SGM 22AUR1

Agencies

[Federal Register Volume 82, Number 161 (Tuesday, August 22, 2017)]
[Rules and Regulations]
[Pages 39655-39658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17641]

========================================================================
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.

========================================================================

Federal Register / Vol. 82, No. 161 / Tuesday, August 22, 2017 /
Rules and Regulations

[[Page 39655]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 51

[Document Number AMS-SC-16-0005, SC-16-331]

U.S. Standards for Grades of Shelled Walnuts and Walnuts in the
Shell

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule revises the U.S. Standards for Grades of Shelled
Walnuts and the U.S. Standards for Grades of Walnuts in the Shell
issued under the Agricultural Marketing Agreement Act of 1946. The
Agricultural Marketing Service (AMS) of the Department of Agriculture
(USDA) is amending the color requirements to include red-colored
walnuts. In addition, AMS is removing the ``Unclassified'' section.
These revisions will modernize the standards to more accurately
represent today's marketing practices and to meet growing consumer
demand by providing greater marketing flexibility.

DATES: Effective September 21, 2017.

FOR FURTHER INFORMATION CONTACT: David G. Horner, Agricultural
Marketing Specialist, Specialty Crops Inspection Division, USDA/AMS
Specialty Crops Program, 100 Riverside Parkway, Suite 101,
Fredericksburg, VA 22406; telephone (540) 361-1120; fax (540) 361-1199;
or email Dave.Horner@ams.usda.gov. Copies of the revised U.S. Standards
for Grades of Shelled Walnuts and Walnuts in the Shell are available at
https://www.regulations.gov or https://www.ams.usda.gov/.

SUPPLEMENTARY INFORMATION: The changes in these two sets of standards
will permit grade certification of red-colored walnut varieties. These
revisions also affect the grade requirements under the marketing order,
7 CFR part 984, issued under the Agricultural Marketing Agreement Act
of 1937 (7 U.S.C. 601-674) and applicable imports.

Executive Orders 12866 and 13563

This rule does not meet the definition of a significant regulatory
action contained in section 3(f) of Executive Order 12866, and is not
subject to review by the Office of Management and Budget (OMB).
Additionally, because this rule does not meet the definition of a
significant regulatory action it does not trigger the requirements
contained in Executive Order 13771. See OMB's Memorandum titled
``Interim Guidance Implementing Section 2 of the Executive Order of
January 30, 2017 titled `Reducing Regulation and Controlling Regulatory
Costs'[thinsp]'' (February 2, 2017). Executive Orders 12866 and 13563
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasizes the importance
of quantifying both costs and benefits, reducing costs, harmonizing
rules, and promoting flexibility.

Executive Order 13175

This action has been reviewed in accordance with the requirements
of Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments. The review reveals that this regulation would not
have substantial and direct effects on Tribal governments and would not
have significant Tribal implications.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is not intended to have retroactive effect. There
are no administrative procedures that must be exhausted prior to any
judicial challenge to the provisions of this rule.

Regulatory Flexibility Act and Paperwork Reduction Act

Pursuant to the requirements of the Regulatory Flexibility Act
(RFA) (5 U.S.C. 601-612), AMS has considered the economic impacts of
the revisions to the U.S. Standards for Grades of Shelled Walnuts and
the U.S. Standards for Grades of Walnuts in the Shell. The purpose of
the RFA is to structure regulatory actions so small businesses will not
be unduly or disproportionately burdened. Accordingly, AMS has prepared
the following final regulatory flexibility analysis.
The current U.S. walnut standards have four color classifications:
Extra Light, Light, Light Amber, and Amber. Product that does not meet
these color standards cannot be certified to a U.S. grade. AMS is
revising these standards to include a new classification for red-
colored walnuts. In addition, AMS is eliminating the ``Unclassified''
section. These revisions modernize the current grading standards by
allowing the industry to meet the growing consumer demand for red-
colored walnuts and by promoting better market information and greater
marketing flexibility within the industry.
The process of grading improves the functioning of a commodity
market. Assigning different prices to different product characteristics
and levels of quality increases opportunities for profitable trade.
Including red-colored varieties to the walnut grading standards will
facilitate additional market opportunities for walnut producers and
other participants in the supply chain. The revision will result in a
minor change only to the color requirements of the current standards.
AMS anticipates that there will be little or no additional cost to
implement this revision. This change applies uniformly to all market
participants, and will not result in disproportionate additional costs
being borne by small walnut producers or other small businesses.
To determine the proportion of walnut producers that would be
considered small, AMS conducted the following analysis. The Small
Business Administration (SBA) defines small agricultural producers as
those with annual receipts of less than $750,000 (13 CFR 121.601).
AMS used crop value per acre to determine the number of bearing
acres required to generate annual sales of $750,000 or more, and came
to 136 bearing acres. To reach this number, AMS divided the total crop
value measured in dollars by the total utilized production measured in
tons. Using annual National Agricultural Statistics Service (NASS) data
for the years 2010 to 2014, the 5-year average crop value

[[Page 39656]]

was $1,507,478,000; utilized production was 504,800 tons; and, grower
price was $2,982 per ton. AMS multiplied the price by yield to find the
crop value per acre of $5,670 on average over 5 years. Finally, AMS
divided the SBA-defined annual sales threshold of $750,000 by value per
acre, which resulted in 136 acres.
The NASS Agricultural Census is conducted every 5 years and in 2012
showed that 87 percent of walnut farming operations in the U.S. fell
into its Census category of ``under 100 bearing acres'' of walnuts. AMS
estimates that the proportion of walnut growers that qualify as small
businesses under the SBA definition is likely to be close to 90
percent, given the probable exclusion in the ``under 100 bearing
acres'' Census category of walnut producers with bearing acreage
between 100 and 136. These small growers will not be disproportionately
affected by the final rule as all changes to the standards will be
applied uniformly to all market participants.
In August 2015, the Grades and Standards Committee of the
California Walnut Board and Commission voted unanimously to revise the
U.S. walnut standards to include non-amber cultivars such as red-
colored varieties. More than 99 percent of U.S. walnuts are produced in
California. Addition of an expanded color certification grade will
encourage greater revenue to flow into the industry due to greater
marketing opportunities for red-colored nuts. Revising the current
grading standards to include red walnuts will come at a minimal cost to
the industry. The benefits of modernized grading standards, which
include better market information and greater marketing flexibility,
exceed the minor costs to market participants of implementing this
revision to the U.S. standards for walnuts.

Background

The current U.S. walnut standards only permit the following four
colors: Extra Light, Light, Light Amber, and Amber. However, consumer
demand is growing for red walnuts in the United States. In China, the
Livermore variety (a red-colored walnut) is very desirable. U.S.
growers and companies expect sales to continue rising domestically and
in China, especially once red walnuts are permitted grade
certification.
To address anticipated consumer needs, the Grades and Standards
Committee of the California Walnut Board and Commission voted
unanimously in August 2015 to revise the U.S. walnut standards to
include non-amber cultivars, beginning with the Livermore variety.
Later, the California Walnut Board and Commission sent an official
letter to the AMS Administrator formally requesting the addition of
red-colored varieties.
On November 25, 2016, AMS published a Proposed Rule in the Federal
Register (81 FR 85164) soliciting comments on its proposal to amend the
standards to (1) include red-colored walnuts and (2) remove the
``Unclassified'' section. On March 23, 2017, AMS published a
``Reopening of the comment period'' in the Federal Register (82 FR
14832). The extended comment period closed April 24, 2017. To view the
eight posted comments, please visit https://www.regulations.gov.
Six commenters supported the changes. One supporter was a trade
association representing nearly 4,000 family farms, nearly 60,000 jobs,
and a $1.7 billion walnut industry. The other supporting commenters
were from the general public. Two of the supporting individuals asked
for clarification on the following:
Was there a health hazard in the past, preventing red
walnuts from being certified to a U.S. grade? No. When the USDA Walnut
Color Chart was developed in 1967, walnuts came in light to dark amber
colors. Since then, red varieties of walnuts (e.g., Livermore) have
been bred and seen increased demand. The standards are being updated to
reflect the changing market.
Are red walnuts a type of English walnut? Yes. Red
walnuts, such as the Livermore variety, are a Juglans Regia cultivar
with a red seed coat.
What would prevent the industry from marketing dyed
walnuts as true red walnuts? Marketing Order 984, which regulates
walnuts grown in California, prohibits walnuts from being modified in
any form (over 99 percent of U.S. walnuts are grown in California). In
addition, the U.S. grade standards have no provision for artificial
coloring and, therefore, walnuts could not be certified to grade if
color was added.
Two commenters, representing the general public, opposed the
changes. One believed red walnuts should be free from regulations and
the other believed it would affect the market negatively. The purpose
of U.S. grade standards is to facilitate the marketing of agriculture
in the United States and around the world. These revisions come at the
request of the U.S. walnut industry. In addition, AMS believes these
revisions would increase supply of red walnuts. Marketing Order 984
requires walnuts grown in California to be certified to a U.S. grade.
Once red walnuts can be grade certified, they will become more
available to domestic and global consumers.
Based on the above information gathered, AMS is making the
following revisions in the U.S. Standards for Grades of Shelled
Walnuts:
Sec. 51.2276 Color chart: Removed and reserved. The
information in this section regarding the U.S.D.A. Walnut Color Chart
is obsolete.
Sec. 51.2277 U.S. No. 1(a): Revised to include red
walnuts.
Sec. 51.2278 U.S. Commercial (a): Revised to include red
walnuts.
Sec. 51.2279 Unclassified: Removed and reserved. AMS is
removing this section in all standards as they are revised, as it is no
longer considered necessary.
Sec. 51.2281 Color classifications: The section is
reorganized into subparts (a) and (b) to include red walnuts.
Sec. 51.2282 Table II: Revised to include red walnuts.
Sec. 51.2283 Off color: Revised to include red walnuts.
In addition, AMS is making the following revisions in the U.S.
Standards for Grades of Walnuts in the Shell:
Sec. 51.2946 Color chart: Removed and reserved. This
section is now redundant and no longer needed.
Sec. 51.2948 U.S. No. 1(a), Sec. 51.2949 U.S. No. 2(a),
and Sec. 51.2950 U.S. No 3(a): Subpart (1) was added to subpart (a) in
each section to accommodate red walnuts.
Sec. 51.2951 Unclassified: Removed and reserved. AMS is
removing this section in all standards as they are revised, as it is no
longer considered necessary.
Sec. 51.2954 Tolerances for grade defects: Revised to
include red walnuts.
The U.S. Standards for Grades of Shelled Walnuts and the U.S.
Standards for Grades of Walnuts in the Shell will be effective 30 days
after publication of this rule in the Federal Register.

List of Subjects in 7 CFR Part 51

Food grades and standards, Fruits, Nuts, Reporting and
recordkeeping requirements, Vegetables.

For reasons set forth in the preamble, 7 CFR part 51 is amended as
follows:

PART 51--[AMENDED]

0
1. The authority citation for part 51 continues to read as follows:

Authority: 7 U.S.C. 1621-1627.

Sec. 51.2276 [Removed and reserved]

0
2. Section 51.2276 is removed and reserved.

0
3. In Sec. 51.2277, paragraph (a) is revised to read as follows:

[[Page 39657]]

Sec. 51.2277 U.S. No. 1.

* * * * *
(a) Color shall be specified in connection with this grade in terms
of ``extra light,'' ``light,'' ``light amber,'' or ``amber'' from the
USDA Walnut Color Chart or in terms of ``red'' color. The color
classifications in the USDA Walnut Color Chart shall not apply to
``red'' color. Furthermore, ``red'' color shall not be mixed with
``extra light,'' ``light,'' ``light amber,'' or ``amber'' colors. (See
Sec. 51.2281 and Sec. 51.2282.)
* * * * *

0
4. In Sec. 51.2278, paragraph (a) is revised to read as follows:

Sec. 51.2278 U.S. Commercial.

* * * * *
(a) Color of walnuts based on the USDA Walnut Color Chart shall be
not darker than the ``amber'' classification. There are no color
requirements for ``red'' color. Color may be specified in connection
with the grade in terms of one of the color classifications in the USDA
Walnut Color Chart or ``red'' color. ``Red'' color shall not be mixed
with ``extra light,'' ``light,'' ``light amber,'' or ``amber'' colors.
(See Sec. 51.2281 and Sec. 51.2282.)
* * * * *

Sec. 51.2279 [Removed and reserved]

0
5. Section 51.2279 is removed and reserved.

0
6. Revise Sec. 51.2281 to read as follows:

Sec. 51.2281 Color classifications.

The following classifications are provided to describe the color of
any lot:
(a) ``Extra light,'' ``light,'' ``light amber,'' and ``amber:'' The
portions of kernels in the lot shall be not darker than the darkest
color permitted in the specified classification as shown on the USDA
Walnut Color Chart.
(b) ``Red:'' There are no color requirements.

0
7. In Sec. 51.2282, Table II is amended by adding an entry for ``Red''
to the end of the table and by revising footnote 1 to read as follows:

Sec. 51.2282 Tolerances for color.

* * * * *

Table II
----------------------------------------------------------------------------------------------------------------
Tolerances for color
---------------------------------------------------------------
Color classification Darker than Darker than
extra light Darker than light amber Darker than
\1\ light \1\ \1\ amber \1\
----------------------------------------------------------------------------------------------------------------

* * * * * * *
Red............................................. .............. .............. .............. ..............
----------------------------------------------------------------------------------------------------------------
\1\ See illustration of this term on USDA Walnut Color Chart.

0
8. Revise Sec. 51.2283 to read as follows:

Sec. 51.2283 Off color.

The term ``off color'' is not a color classification, but shall be
applied to any lot which fails to meet the requirements of the
``amber'' classification when applying the color classifications in the
USDA Walnut Color Chart. Off color shall not be used for ``red'' color.

Sec. 51.2946 [Removed and reserved]

0
9. Section 51.2946 is removed and reserved.

0
10. In Sec. 51.2948, paragraph (a) is revised to read as follows:

Sec. 51.2948 U.S. No. 1.

* * * * *
(a) Kernel color shall be specified in connection with this grade
in terms of ``extra light,'' ``light,'' ``light amber,'' or ``amber''
from the USDA Walnut Color Chart or in terms of ``red'' color. The
color classifications in the USDA Walnut Color Chart shall not apply to
``red'' color. Furthermore, ``red'' color shall not be mixed with
``extra light,'' ``light,'' ``light amber,'' or ``amber'' colors. When
kernel color is based on the color classifications from the USDA Walnut
Color Chart, at least 70 percent, by count, of the walnuts have kernels
which are not darker than ``light amber,'' and which are free from
grade defects: Provided, That at least four-sevenths of the above
amount, or 40 percent of the walnuts have kernels which are not darker
than ``light.'' Higher percentages of nuts with kernels not darker than
``light amber'' which are free from grade defects and/or higher
percentages with kernels not darker than ``light'' which are free from
grade defects, may be specified in accordance with the facts. (See
Sec. 51.2954.)
* * * * *

0
11. In Sec. 51.2949, paragraph (a) is revised to read as follows:

Sec. 51.2949 U.S. No. 2.

* * * * *
(a) Kernel color shall be specified in connection with this grade
in terms of ``extra light,'' ``light,'' ``light amber,'' or ``amber''
from the USDA Walnut Color Chart or in terms of ``red'' color. The
color classifications in the USDA Walnut Color Chart shall not apply to
``red'' color. Furthermore, ``red'' color shall not be mixed with
``extra light,'' ``light,'' ``light amber,'' or ``amber'' colors. When
kernel color is based on the color classifications from the USDA Walnut
Color Chart, at least 60 percent, by count, of the walnuts have kernels
which are not darker than ``light amber,'' and which are free from
grade defects. Higher percentages of nuts with kernels not darker than
``light amber'' which are free from grade defects, and/or percentages
with kernels not darker than ``light'' which are free from grade
defects, may be specified in accordance with the facts. (See Sec.
51.2954.)
* * * * *

0
12. In Sec. 51.2950, paragraph (a) is revised to read as follows:

Sec. 51.2950 U.S. No. 3.

* * * * *
(a) Kernel color may be specified in connection with this grade in
terms of ``light amber'' or ``light'' from the USDA Walnut Color Chart
or in terms of ``red'' color. The color classifications in the USDA
Walnut Color Chart shall not apply to ``red'' color. Furthermore,
``red'' color shall not be mixed with ``extra light,'' ``light,''
``light amber,'' or ``amber'' colors. When kernel color is based on the
color classifications from the USDA Walnut Color Chart, there is no
requirement in this grade for the percentage of walnuts having kernels
which are ``light amber'' or ``light.'' However, the percentage, by
count, of nuts with kernels not darker than ``light amber'' which are
free from grade defects and/or the percentage with kernels not darker
than ``light'' which are free from grade defects, may be specified in
accordance with the facts. (See Sec. 51.2954.)
* * * * *

[[Page 39658]]

Sec. 51.2951 [Removed and reserved]

0
13. Section 51.2951 is removed and reserved.

0
14. In Sec. 51.2954, the table is revised to read as follows:

Sec. 51.2954 Tolerances for grade defects.

* * * * *

Tolerances for Grade Defects
----------------------------------------------------------------------------------------------------------------
Kernel color
External (shell) Internal (kernel) based on USDA Kernel color based on
Grade defects defects Walnut Color red
Chart
----------------------------------------------------------------------------------------------------------------
U.S. No. 1..................... 10%, by count, 10% total, by No tolerance to ......................
for splits. 5%, count, including reduce the
by count, for not more than 6% required 70% of
other shell which are ``light amber''
defects, damaged by mold kernels or the
including not or insects or required 40% of
more than 3% seriously ``light''
seriously damaged by other kernels or any
damaged. means, of which larger
not more than \5/ percentage of
6\ or 5% may be ``light amber''
damaged by or ``light''
insects, but no kernels
part of any specified.
tolerance shall
be allowed for
walnuts
containing live
insects.
U.S. No. 2..................... 10%, by count, 15% total, by No tolerance to ......................
for splits. 10%, count, including reduce the
by count, for not more than 8% required 60% or
other shell which are any specified
defects, damaged by mold larger
including not or insects or percentage of
more than 5% seriously ``light amber''
serious damage damaged by other kernels, or any
by adhering means, of which specified
hulls. not more than 5/ percentage of
8 or 5% may be ``light''
damaged by kernels.
insects, but no
part of any
tolerance shall
be allowed for
walnuts
containing live
insects.
U.S. No. 3..................... Same as above Same as above No tolerance to ......................
tolerance for tolerance for reduce any
U.S. No. 2. U.S. No. 2. percentage of
``light amber''
or ``light''
kernel specified.
----------------------------------------------------------------------------------------------------------------

Dated: August 16, 2017.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2017-17641 Filed 8-21-17; 8:45 am]
BILLING CODE 3410-02-P

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