Tart Cherries Grown in the States of Michigan, New York, Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Changes to Reporting Requirements, 72145-72148 [2021-27579]
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72145
Rules and Regulations
Federal Register
Vol. 86, No. 242
Tuesday, December 21, 2021
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 930
[Doc. No. AMS–SC21–0026; SC21–930–1
FR]
Tart Cherries Grown in the States of
Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and
Wisconsin; Changes to Reporting
Requirements
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
This rule implements a
recommendation from the Cherry
Industry Administrative Board to revise
the reporting requirements prescribed
under the Federal marketing order
regulating the handling of tart cherries.
This action modifies reporting
requirements to include the information
necessary to determine the portion of
total inventory that is greater than five
years old.
DATES: Effective January 20, 2022.
FOR FURTHER INFORMATION CONTACT:
Jennie M. Varela, Marketing Specialist,
or Christian D. Nissen, Regional
Director, Southeast Region Office,
Market Development Division, Specialty
Crops Program, AMS, USDA;
Telephone: (863) 324–3375, or Email:
Jennie.Varela@usda.gov or
Christian.Nissen@usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Richard Lower,
Market Development Division, Specialty
Crops Program, AMS, USDA, 1400
Independence Avenue SW, STOP 0237,
Washington, DC 20250–0237;
Telephone: (202) 720–2491, or Email:
Richard.Lower@usda.gov.
SUPPLEMENTARY INFORMATION: This
action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out
a marketing order as defined in 7 CFR
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SUMMARY:
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900.2(j). This rule is issued under
Marketing Agreement and Order No.
930, (7 CFR part 930), regulating the
handling of tart cherries produced in the
States of Michigan, New York,
Pennsylvania, Oregon, Utah,
Washington, and Wisconsin. Part 930
(referred to as 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 Cherry Industry
Administrative Board (Board or CIAB)
locally administers the Order and is
comprised of producers and handlers of
tart cherries operating within the
production area, and a public member.
The Department of Agriculture
(USDA) is issuing this rule in
conformance with Executive Orders
12866 and 13563. 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. This action falls within a
category of regulatory actions that the
Office of Management and Budget
(OMB) exempted from Executive Order
12866 review.
This rule has been reviewed under
Executive Order 13175—Consultation
and Coordination with Indian Tribal
Governments, which requires agencies
to consider whether their rulemaking
actions would have tribal implications.
Agricultural Marketing Service (AMS)
has determined that this rule is unlikely
to have substantial direct effects on one
or more Indian tribes, on the
relationship between the Federal
Government and Indian tribes, or on the
distribution of power and
responsibilities between the Federal
Government and Indian tribes.
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. This rule is not intended to
have retroactive effect.
The Act provides that administrative
proceedings must be exhausted before
parties may file suit in court. Under
section 608c(15)(A) of the Act, any
handler subject to an order may file
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with USDA a petition stating that the
order, any provision of the order, or any
obligation imposed in connection with
the order is not in accordance with law
and request a modification of the order
or to be exempted therefrom. Such
handler is afforded the opportunity for
a hearing on the petition. After the
hearing, USDA would rule on the
petition. The Act provides that the
district court of the United States in any
district in which the handler is an
inhabitant, or has his or her principal
place of business, has jurisdiction to
review USDA’s ruling on the petition,
provided an action is filed not later than
20 days after the date of the entry of the
ruling.
This action revises the reporting
requirements to include the sales and
inventory information necessary to
segregate between inventory that is five
years old and inventory that is less than
five years old. This modification will
allow the industry to better estimate
how much inventory on-hand is still
marketable and help ensure relevant
inventory information is available when
considering volume restrictions. This
action was unanimously recommended
by the Board at its February 25, 2021
meeting.
Section 930.70 of the Order provides,
in part, authority to require handlers to
submit reports of inventory. Section
930.70 further provides, with the
approval of the Secretary, authority for
the Board to collect other such
information from handlers as needed to
perform its duties. This rule utilizes this
authority to establish a new § 930.170
under the rules and regulations of the
Order. This new section codifies
existing inventory reporting
requirements and requires handlers of
tart cherries to annually report
inventory that exceeds five years of age.
During Board meetings held on June
25, 2020 and January 14, 2021, the
Board received industry’s feedback
about enhancing tart cherry inventory
transparency and developing a clearer
understanding of the age of product in
inventory. In these discussions, several
members expressed concern that some
of the inventory currently being
reported may be product beyond its
saleable date, which could create a
misleading view of the actual amount of
tart cherries available for market.
Currently, handlers submit inventory
reports four times per year for the
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Federal Register / Vol. 86, No. 242 / Tuesday, December 21, 2021 / Rules and Regulations
reporting periods ending November 30,
February 28, May 31, and June 30, with
reports for those periods due on
December 10, March 10, June 10, and
July 10, respectively. This information
is submitted on CIAB Form 3 (Sales/
Inventory Report) as previously
approved by OMB and assigned OMB
No. 0581–0177. The report includes
information on the type, form, and the
amount of product, but does not include
data regarding the age of the products in
inventory. The Board agreed the existing
reporting requirements may limit their
knowledge of the industry’s on-hand
tart cherry inventory and formed a
subcommittee to review the inventory
reporting requirements.
The Board reviewed the
subcommittee findings at the January
14, 2021, meeting, and expressed
support for the subcommittee’s
recommendation to adjust reporting
requirements to account for inventory
greater than five years old. The Board
noted a five-year inventory cutoff date
was appropriate because this period
would sufficiently accommodate the
lifespans of nearly all existing products
likely to be inventoried. Board members
agreed having this additional
information regarding the age of
inventory would be beneficial.
The Order includes the authority for
establishing volume regulation, and one
element considered during those
discussions is the amount of tart
cherries available in inventory. The
regulated season runs from July 1
through June 30. The current reporting
aggregates the industry’s inventory data
and does not separately track older
inventory, and this compilation could
provide an incomplete view of the
industry’s marketable inventory. By
segregating the accounting of inventory
older than five years, the Board would
have more precise information regarding
inventory when discussing market
issues.
As part of their discussions, the Board
also provided clarifying information on
how to calculate inventory age for
reporting purposes. To determine
product age, the date used would either
be the date of harvest and processing or
date of remanufacturing. Board
members emphasized the starting point
for calculating inventory age would be
reset if the inventory were
remanufactured into a new product.
For example, if a handler was
completing their routine inventory
report on May 31, 2021, any tart cherries
harvested in 2014 or earlier would be
considered over five years old. Although
cherries harvested in 2014 would be
considered part of the 2014–15 harvest
year, based on the date they were
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harvested and processed, they would be
greater than five years old for reporting
purposes by the end of May 2021. If the
cherries harvested in 2014 were
remanufactured into another product,
the date of remanufacturing would
become the date used for calculating the
age for inventory purposes. The Board
stated this is the same dating procedure
as used for calculating the age of
cherries held in reserve under volume
regulation. Using these dates, inventory
older than five years would be reported
each May on the modified report.
Several members commented the age
of inventory is already recorded by
handlers as part of their normal
business activities, and as a result, this
requirement would not be overly
burdensome. Members further
expressed the separate reporting of
inventory over five years old would at
most require a few extra minutes of a
handler’s time and would only be
required once annually.
Consequently, the Board voted to add
a section to the inventory report to
include the total volume of inventory
over five years old. The Board
recommended including this
information on the inventory report for
the reporting period ending May 31 due
on June 10. The Board agreed this was
the appropriate time to have the
information available as this report
would be used to develop the industry
inventory data when the Board meets in
June to consider the need to establish a
volume control recommendation for the
coming season.
This rule adds sales and inventory
report requirements to the
administrative provisions under the
Order and requires handlers to report
inventory older than five years. These
reporting requirements will be added in
a new § 930.170 and will include
information on the handler submitting
the form; the reporting period;
beginning inventory for each product;
the amount packed for each product;
sales; information on transfers of
product between handlers, including
the name of the selling handler, name of
the receiving handler, and form type,
number of units; information on product
repacked or remanufactured during the
reporting period, including the form and
number of units of source products and
the form and number of units of end
products; and information on the
amount of ending inventory for each
product, including the amount of
ending inventory for each product over
five years old. Only the May 31 report
will require handlers to record the
amount of inventory over five years old.
This information will support the
industry’s ability to make marketing
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decisions by providing more descriptive
information than currently available
when evaluating the need for volume
regulation. Besides providing important
information for industry reports
regarding sales and inventory, this
action will also help ensure compliance
with this reporting requirement by
including it in the rules and regulations
under the Order.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in
the Regulatory Flexibility Act (RFA) (5
U.S.C. 601–612), AMS has considered
the economic impact of this rule 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
businesses subject to such actions in
order to ensure small businesses will
not be unduly or disproportionately
burdened. Marketing orders issued
pursuant to the Act are unique in that
they are brought about through group
action of essentially small entities acting
on their own behalf.
There are approximately 450
producers of tart cherries in the
regulated area and approximately 40
handlers who are subject to the Order.
Small agricultural growers are defined
by the Small Business Administration
(SBA) as those having annual receipts
less than $1,000,000, and small
agricultural service firms are defined as
those whose annual receipts are less
than $30,000,000 (13 CFR 121.201).
According to information from the
National Agricultural Statistics Service
(NASS) and Board data, the average
annual grower price for tart cherries
during the 2019–20 season was
approximately $0.15 per pound. With
total utilization at 236.34 million
pounds, the total 2019–20 crop value is
estimated at $35.45 million (236.34
million pounds times $0.15). Dividing
the crop value by the estimated number
of producers (450) yields an estimated
average receipt per producer of $78,778.
This is well below the SBA threshold
for small producers.
A free on board (FOB) price of $0.82
per pound for processed tart cherries
was derived from USDA’s 2020
purchases of dried tart cherries at an
average price of $4.11 per pound. The
dried cherry price was converted to a
raw product equivalent price at an
industry recognized ratio of five to one.
Based on utilization, this price
represents a good estimate of the price
for processed cherries. Multiplying this
FOB price ($0.82) by total utilization of
236.34 million pounds results in an
estimated handler-level tart cherry value
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Federal Register / Vol. 86, No. 242 / Tuesday, December 21, 2021 / Rules and Regulations
of $193.8 million. Dividing this figure
by the number of handlers (40) yields
estimated average annual handler
receipts of $4.85 million, which is
below the SBA threshold for small
agricultural service firms. Assuming a
normal distribution, the majority of
producers and handlers of tart cherries
may be classified as small entities.
This final rule adds the sales and
inventory report requirements to the
administrative provisions under the
Order and will require handlers to
report inventory older than five years.
This rule establishes a new § 930.170
under the rules and regulations of the
Order. The authority for this action is
provided in § 930.70 of the Order.
AMS anticipates that this final rule
will impose minimal, if any, additional
costs on handlers or growers, regardless
of their size. This action will impose a
small increase in the reporting burden
for each tart cherry handler. However,
because handlers currently maintain
data about the age of their inventory in
the regular course of business, they
should be able to readily access this
information. Consequently, any
additional costs associated with this
change should be minimal (not
significant) and apply equally to all
handlers.
This action should also benefit the
entire industry by providing more
precise information on tart cherry
product in inventory. This information
will provide accurate information
regarding available inventory and help
with marketing and planning for the
industry. Further, having these
requirements codified under the rules
and regulations would also benefit
compliance enforcement of this
reporting requirement. The benefits of
this rule are expected to be equally
available to all tart cherry growers and
handlers, regardless of their size.
The Board discussed other
alternatives to this action, including
reporting inventory older than three
years for the purposes of classifying the
age of inventory, reporting the age of
inventory quarterly, and leaving the
current reporting requirements
unchanged. When discussing the
alternatives, the Board concluded a
three-year timeframe would not
sufficiently cover the normal lifespan of
all products held in inventory. The
Board also commented that quarterly
reporting of older inventory was
unnecessary because this information
would be most useful at the end of the
season, prior to making annual volume
restriction recommendations. Therefore,
the alternatives were rejected.
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
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Chapter 35), the Order’s information
collection requirements have been
previously approved by OMB and
assigned OMB No. 0581–0177, Tart
Cherries Grown in the States of
Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and
Wisconsin. This final rule will require
changes to the Board’s existing CIAB
Form 3. However, the changes are minor
and the currently approved burden for
the form will be minimally increased by
the changes. The revised form has been
submitted to OMB for approval.
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. USDA has not
identified any relevant Federal rules
that duplicate, overlap, or conflict with
this rule.
AMS is committed to complying with
the E-Government Act, to promote the
use of the internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
Further, the Board’s meetings are
widely publicized throughout the tart
cherry industry. The meetings are
public and virtual or in a hybrid style
with participants having a choice
whether to attend in person or virtually.
All interested persons are invited to
attend the meetings and participate in
Board deliberations on all issues. The
Board’s meetings on June 25, 2020,
January 14, 2021, and February 25,
2021, were each conducted via
videoconference. All entities, both large
and small, were able to express views
on this issue.
A proposed rule concerning this
action was published in the Federal
Register on August 13, 2021 (86 FR
44647). Copies of the proposed rule
were sent via email to Board members
and known tart cherry handlers. Finally,
the proposed rule was made available
through the internet by USDA and the
Office of the Federal Register. A 30-day
comment period ending September 13,
2021 was provided to allow interested
persons to respond to the proposal. No
comments were received. Accordingly,
no changes will be made to the
proposed rule.
A small business guide on complying
with fruit, vegetable, and specialty crop
marketing agreements and orders may
be viewed at: https://
www.ams.usda.gov/rules-regulations/
moa/small-businesses. Any questions
about the compliance guide should be
sent to Richard Lower at the previously
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72147
mentioned address in the FOR FURTHER
section.
After consideration of all relevant
material presented, including the
information and recommendation
submitted by the Board and other
available information, it is hereby found
that this rule will tend to effectuate the
declared policy of the Act.
INFORMATION CONTACT
List of Subjects in 7 CFR Part 930
Cherries, Marketing agreements,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 930 is amended as
follows:
PART 930—TART CHERRIES GROWN
IN THE STATES OF MICHIGAN, NEW
YORK, PENNSYLVANIA, OREGON,
UTAH, WASHINGTON, AND
WISCONSIN
1. The authority citation for 7 CFR
part 930 continues to read as follows:
■
Authority: 7 U.S.C. 601–674.
■
2. Add § 930.170 to read as follows:
§ 930.170
Sales and inventory report.
(a) Handlers shall submit to the Board
a sales and inventory report for the
reporting period ending November 30,
February 28, May 31, and June 30 of
each crop year. Handlers shall file such
reports by the tenth day of the month
following the reporting period,
December 10, March 10, June 10, and
July 10, respectively. Should the filing
due date fall on a Saturday, Sunday, or
federal holiday, reports are due by the
first business day following the due
date. Such reports shall be reported to
the Board on CIAB Form 3 and include:
(1) The name, address, telephone
number, and identifying number of the
handler;
(2) The reporting period covered by
the report;
(3) The form, type, and unit size for
each product;
(4) The total beginning of year
inventory for each product;
(5) The packed amount for each
product;
(6) Total inter-handler transfers, and
total volume repackaged or
remanufactured for each product, yearto-date;
(7) Total sales outside the industry for
each product, year-to-date;
(8) The amount of ending inventory
for each product, year-to-date;
(9) List of inter-handler transfers, both
in and out, during the reporting period
including:
(i) Name of the selling handler;
(ii) Name of the receiving handler;
and
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(iii) Form, type, number of units.
(10) List of repacks and
remanufactures during the reporting
period including:
(i) Form, type, and number of units of
source products; and
(ii) Form, type, and number of units
of end products.
(b) The amount of inventory for each
product over 5 years old shall be
reported annually on the sales and
inventory report for the reporting period
ending May 31. Product age is based on
the crop year in which the current
product was processed or
remanufactured.
Erin Morris,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2021–27579 Filed 12–20–21; 8:45 am]
BILLING CODE P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
[Document Number AMS–SC–20–0100]
Peanut Promotion, Research, and
Information Order; Increase the
Threshold of the Primary PeanutProducing States and Adjustment of
Membership
Agricultural Marketing Service,
Department of Agriculture (USDA).
ACTION: Final rule.
AGENCY:
This rule changes the
threshold for defining primary peanutproducing states as states that maintain
a 3-year average production of at least
20,000 tons of peanuts, instead of
10,000 tons of peanuts as currently
prescribed in the Peanut Promotion,
Research, and Information Order
(Order). The Order is administered by
the National Peanut Board (Board) with
oversight by the U.S. Department of
Agriculture (USDA). As a result of
increasing the threshold, the Board’s
membership will decrease from 13 to 12
members and their respective alternates.
This change will contribute to effective
administration of the program.
DATES: Effective January 20, 2022.
FOR FURTHER INFORMATION CONTACT:
Victoria M. Carpenter, Marketing
Specialist, Mid Atlantic Branch, Market
Development Division, Specialty Crops
Program, AMS, USDA, Stop 0244, 1400
Independence Avenue SW, Room 1406–
S, Washington, DC 20250–0244;
Telephone: (202) 720–6930; or Email:
VictoriaM.Carpenter@usda.gov.
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SUMMARY:
17:14 Dec 20, 2021
Executive Orders 12866 and 13563
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. This action falls
within a category of regulatory actions
that the Office of Management and
Budget (OMB) exempted from Executive
Order 12866 review.
Executive Order 13175
7 CFR Part 1216
VerDate Sep<11>2014
This rule
is issued under the Order (7 CFR part
1216). The Order is authorized under
the Commodity Promotion, Research,
and Information Act of 1996 (1996 Act)
(7 U.S.C. 7411–7425).
SUPPLEMENTARY INFORMATION:
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This action has been reviewed in
accordance with requirements of
Executive Order 13175, Consultation
and Coordination with Indian Tribal
Governments. The Agricultural
Marketing Service (AMS) has assessed
the impact of this rule on Indian tribes
and determined that this rule will not
have tribal implications that require
consultation under Executive Order
13175. AMS hosts a quarterly
teleconference with tribal leaders where
matters of mutual interest regarding the
marketing of agricultural products are
discussed. Information about changes to
regulations were shared during a recent
quarterly call, and tribal leaders were
informed about the revisions to the
regulation and had the opportunity to
submit comments. AMS will continue to
work with the USDA Office of Tribal
Relations to ensure meaningful
consultation is provided as needed with
regards to this change to the Order.
Executive Order 12988
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. It is not intended to have
retroactive effect. Section 524 of the
1996 Act (7 U.S.C. 7423) provides that
it shall not affect or preempt any other
Federal or State law authorizing
promotion or research relating to an
agricultural commodity.
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs
designated this rule as not a major rule,
as defined by 5 U.S.C. 804(2).
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Under section 519 of the 1996 Act (7
U.S.C. 7418), a person subject to an
order may file a written petition with
USDA stating that an order, any
provision of an order, or any obligation
imposed in connection with an order, is
not established in accordance with the
law, and request a modification of an
order or an exemption from an order.
Any petition filed challenging an order,
any provision of an order, or any
obligation imposed in connection with
an order, shall be filed within two years
after the effective date of an order,
provision, or obligation subject to
challenge in the petition. The petitioner
will have the opportunity for a hearing
on the petition. Thereafter, USDA will
issue a ruling on the petition. The 1996
Act provides that the district court of
the United States for any district in
which the petitioner resides or conducts
business shall have the jurisdiction to
review a final ruling on the petition, if
the petitioner files a complaint for that
purpose not later than 20 days after the
date of the entry of USDA’s final ruling.
Background
This rule will increase the threshold
for defining primary peanut-producing
states as states that maintain a 3-year
average production of at least 20,000
tons of peanuts, instead of 10,000 tons
of peanuts as currently prescribed in the
Order. This will help ensure that the
Board reflects the peanut production in
the United States. The Order is
administered by the Board with
oversight by USDA.
The Order became effective on July
30, 1999. Under the Order, the Board
administers a nationally coordinated
program of promotion, research and
information designed to strengthen the
position of peanuts in the marketplace
and to develop, maintain, and expand
the demand for peanuts in the United
States. Under the program, assessments
are levied on all farmers’ stock peanuts
sold at a rate of $3.55 per ton for
Segregation 1 peanuts, and $1.25 per ton
for Segregation 2 peanuts and 3 peanuts,
as those terms are defined in 7 CFR
996.13(b) through (d). Assessments are
remitted to the Board by handlers and,
for peanuts under loan, by the
Commodity Credit Corporation.
The Order defines the terms ‘‘minor
peanut-producing states’’ and ‘‘primary
peanut-producing states’’ for purposes
of Board representation and voting at
meetings. According to USDA, FederalState Inspection Service, National
Peanut Tonnage Reports, there are 13
peanut-producing states, which include:
Alabama, Arkansas, Florida, Georgia,
Louisiana, Mississippi, Missouri, New
Mexico, North Carolina, Oklahoma,
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]]>Agencies
[Federal Register Volume 86, Number 242 (Tuesday, December 21, 2021)]
[Rules and Regulations]
[Pages 72145-72148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27579]
========================================================================
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. 86, No. 242 / Tuesday, December 21, 2021 /
Rules and Regulations
[[Page 72145]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AMS-SC21-0026; SC21-930-1 FR]
Tart Cherries Grown in the States of Michigan, New York,
Pennsylvania, Oregon, Utah, Washington, and Wisconsin; Changes to
Reporting Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule implements a recommendation from the Cherry Industry
Administrative Board to revise the reporting requirements prescribed
under the Federal marketing order regulating the handling of tart
cherries. This action modifies reporting requirements to include the
information necessary to determine the portion of total inventory that
is greater than five years old.
DATES: Effective January 20, 2022.
FOR FURTHER INFORMATION CONTACT: Jennie M. Varela, Marketing
Specialist, or Christian D. Nissen, Regional Director, Southeast Region
Office, Market Development Division, Specialty Crops Program, AMS,
USDA; Telephone: (863) 324-3375, or Email: [email protected] or
[email protected].
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Market Development Division,
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP
0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, or Email:
[email protected].
SUPPLEMENTARY INFORMATION: This action, pursuant to 5 U.S.C. 553,
amends regulations issued to carry out a marketing order as defined in
7 CFR 900.2(j). This rule is issued under Marketing Agreement and Order
No. 930, (7 CFR part 930), regulating the handling of tart cherries
produced in the States of Michigan, New York, Pennsylvania, Oregon,
Utah, Washington, and Wisconsin. Part 930 (referred to as 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 Cherry Industry Administrative Board (Board or CIAB)
locally administers the Order and is comprised of producers and
handlers of tart cherries operating within the production area, and a
public member.
The Department of Agriculture (USDA) is issuing this rule in
conformance with Executive Orders 12866 and 13563. 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. This action falls within
a category of regulatory actions that the Office of Management and
Budget (OMB) exempted from Executive Order 12866 review.
This rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires agencies to consider whether their rulemaking actions would
have tribal implications. Agricultural Marketing Service (AMS) has
determined that this rule is unlikely to have substantial direct
effects on one or more Indian tribes, on the relationship between the
Federal Government and Indian tribes, or on the distribution of power
and responsibilities between the Federal Government and Indian tribes.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with USDA a petition
stating that the order, any provision of the order, or any obligation
imposed in connection with the order is not in accordance with law and
request a modification of the order or to be exempted therefrom. Such
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This action revises the reporting requirements to include the sales
and inventory information necessary to segregate between inventory that
is five years old and inventory that is less than five years old. This
modification will allow the industry to better estimate how much
inventory on-hand is still marketable and help ensure relevant
inventory information is available when considering volume
restrictions. This action was unanimously recommended by the Board at
its February 25, 2021 meeting.
Section 930.70 of the Order provides, in part, authority to require
handlers to submit reports of inventory. Section 930.70 further
provides, with the approval of the Secretary, authority for the Board
to collect other such information from handlers as needed to perform
its duties. This rule utilizes this authority to establish a new Sec.
930.170 under the rules and regulations of the Order. This new section
codifies existing inventory reporting requirements and requires
handlers of tart cherries to annually report inventory that exceeds
five years of age.
During Board meetings held on June 25, 2020 and January 14, 2021,
the Board received industry's feedback about enhancing tart cherry
inventory transparency and developing a clearer understanding of the
age of product in inventory. In these discussions, several members
expressed concern that some of the inventory currently being reported
may be product beyond its saleable date, which could create a
misleading view of the actual amount of tart cherries available for
market.
Currently, handlers submit inventory reports four times per year
for the
[[Page 72146]]
reporting periods ending November 30, February 28, May 31, and June 30,
with reports for those periods due on December 10, March 10, June 10,
and July 10, respectively. This information is submitted on CIAB Form 3
(Sales/Inventory Report) as previously approved by OMB and assigned OMB
No. 0581-0177. The report includes information on the type, form, and
the amount of product, but does not include data regarding the age of
the products in inventory. The Board agreed the existing reporting
requirements may limit their knowledge of the industry's on-hand tart
cherry inventory and formed a subcommittee to review the inventory
reporting requirements.
The Board reviewed the subcommittee findings at the January 14,
2021, meeting, and expressed support for the subcommittee's
recommendation to adjust reporting requirements to account for
inventory greater than five years old. The Board noted a five-year
inventory cutoff date was appropriate because this period would
sufficiently accommodate the lifespans of nearly all existing products
likely to be inventoried. Board members agreed having this additional
information regarding the age of inventory would be beneficial.
The Order includes the authority for establishing volume
regulation, and one element considered during those discussions is the
amount of tart cherries available in inventory. The regulated season
runs from July 1 through June 30. The current reporting aggregates the
industry's inventory data and does not separately track older
inventory, and this compilation could provide an incomplete view of the
industry's marketable inventory. By segregating the accounting of
inventory older than five years, the Board would have more precise
information regarding inventory when discussing market issues.
As part of their discussions, the Board also provided clarifying
information on how to calculate inventory age for reporting purposes.
To determine product age, the date used would either be the date of
harvest and processing or date of remanufacturing. Board members
emphasized the starting point for calculating inventory age would be
reset if the inventory were remanufactured into a new product.
For example, if a handler was completing their routine inventory
report on May 31, 2021, any tart cherries harvested in 2014 or earlier
would be considered over five years old. Although cherries harvested in
2014 would be considered part of the 2014-15 harvest year, based on the
date they were harvested and processed, they would be greater than five
years old for reporting purposes by the end of May 2021. If the
cherries harvested in 2014 were remanufactured into another product,
the date of remanufacturing would become the date used for calculating
the age for inventory purposes. The Board stated this is the same
dating procedure as used for calculating the age of cherries held in
reserve under volume regulation. Using these dates, inventory older
than five years would be reported each May on the modified report.
Several members commented the age of inventory is already recorded
by handlers as part of their normal business activities, and as a
result, this requirement would not be overly burdensome. Members
further expressed the separate reporting of inventory over five years
old would at most require a few extra minutes of a handler's time and
would only be required once annually.
Consequently, the Board voted to add a section to the inventory
report to include the total volume of inventory over five years old.
The Board recommended including this information on the inventory
report for the reporting period ending May 31 due on June 10. The Board
agreed this was the appropriate time to have the information available
as this report would be used to develop the industry inventory data
when the Board meets in June to consider the need to establish a volume
control recommendation for the coming season.
This rule adds sales and inventory report requirements to the
administrative provisions under the Order and requires handlers to
report inventory older than five years. These reporting requirements
will be added in a new Sec. 930.170 and will include information on
the handler submitting the form; the reporting period; beginning
inventory for each product; the amount packed for each product; sales;
information on transfers of product between handlers, including the
name of the selling handler, name of the receiving handler, and form
type, number of units; information on product repacked or
remanufactured during the reporting period, including the form and
number of units of source products and the form and number of units of
end products; and information on the amount of ending inventory for
each product, including the amount of ending inventory for each product
over five years old. Only the May 31 report will require handlers to
record the amount of inventory over five years old.
This information will support the industry's ability to make
marketing decisions by providing more descriptive information than
currently available when evaluating the need for volume regulation.
Besides providing important information for industry reports regarding
sales and inventory, this action will also help ensure compliance with
this reporting requirement by including it in the rules and regulations
under the Order.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of
this rule 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
businesses subject to such actions in order to ensure small businesses
will not be unduly or disproportionately burdened. Marketing orders
issued pursuant to the Act are unique in that they are brought about
through group action of essentially small entities acting on their own
behalf.
There are approximately 450 producers of tart cherries in the
regulated area and approximately 40 handlers who are subject to the
Order. Small agricultural growers are defined by the Small Business
Administration (SBA) as those having annual receipts less than
$1,000,000, and small agricultural service firms are defined as those
whose annual receipts are less than $30,000,000 (13 CFR 121.201).
According to information from the National Agricultural Statistics
Service (NASS) and Board data, the average annual grower price for tart
cherries during the 2019-20 season was approximately $0.15 per pound.
With total utilization at 236.34 million pounds, the total 2019-20 crop
value is estimated at $35.45 million (236.34 million pounds times
$0.15). Dividing the crop value by the estimated number of producers
(450) yields an estimated average receipt per producer of $78,778. This
is well below the SBA threshold for small producers.
A free on board (FOB) price of $0.82 per pound for processed tart
cherries was derived from USDA's 2020 purchases of dried tart cherries
at an average price of $4.11 per pound. The dried cherry price was
converted to a raw product equivalent price at an industry recognized
ratio of five to one. Based on utilization, this price represents a
good estimate of the price for processed cherries. Multiplying this FOB
price ($0.82) by total utilization of 236.34 million pounds results in
an estimated handler-level tart cherry value
[[Page 72147]]
of $193.8 million. Dividing this figure by the number of handlers (40)
yields estimated average annual handler receipts of $4.85 million,
which is below the SBA threshold for small agricultural service firms.
Assuming a normal distribution, the majority of producers and handlers
of tart cherries may be classified as small entities.
This final rule adds the sales and inventory report requirements to
the administrative provisions under the Order and will require handlers
to report inventory older than five years. This rule establishes a new
Sec. 930.170 under the rules and regulations of the Order. The
authority for this action is provided in Sec. 930.70 of the Order.
AMS anticipates that this final rule will impose minimal, if any,
additional costs on handlers or growers, regardless of their size. This
action will impose a small increase in the reporting burden for each
tart cherry handler. However, because handlers currently maintain data
about the age of their inventory in the regular course of business,
they should be able to readily access this information. Consequently,
any additional costs associated with this change should be minimal (not
significant) and apply equally to all handlers.
This action should also benefit the entire industry by providing
more precise information on tart cherry product in inventory. This
information will provide accurate information regarding available
inventory and help with marketing and planning for the industry.
Further, having these requirements codified under the rules and
regulations would also benefit compliance enforcement of this reporting
requirement. The benefits of this rule are expected to be equally
available to all tart cherry growers and handlers, regardless of their
size.
The Board discussed other alternatives to this action, including
reporting inventory older than three years for the purposes of
classifying the age of inventory, reporting the age of inventory
quarterly, and leaving the current reporting requirements unchanged.
When discussing the alternatives, the Board concluded a three-year
timeframe would not sufficiently cover the normal lifespan of all
products held in inventory. The Board also commented that quarterly
reporting of older inventory was unnecessary because this information
would be most useful at the end of the season, prior to making annual
volume restriction recommendations. Therefore, the alternatives were
rejected.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the Order's information collection requirements have been
previously approved by OMB and assigned OMB No. 0581-0177, Tart
Cherries Grown in the States of Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and Wisconsin. This final rule will require
changes to the Board's existing CIAB Form 3. However, the changes are
minor and the currently approved burden for the form will be minimally
increased by the changes. The revised form has been submitted to OMB
for approval.
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. USDA has not
identified any relevant Federal rules that duplicate, overlap, or
conflict with this rule.
AMS is committed to complying with the E-Government Act, to promote
the use of the internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
Further, the Board's meetings are widely publicized throughout the
tart cherry industry. The meetings are public and virtual or in a
hybrid style with participants having a choice whether to attend in
person or virtually. All interested persons are invited to attend the
meetings and participate in Board deliberations on all issues. The
Board's meetings on June 25, 2020, January 14, 2021, and February 25,
2021, were each conducted via videoconference. All entities, both large
and small, were able to express views on this issue.
A proposed rule concerning this action was published in the Federal
Register on August 13, 2021 (86 FR 44647). Copies of the proposed rule
were sent via email to Board members and known tart cherry handlers.
Finally, the proposed rule was made available through the internet by
USDA and the Office of the Federal Register. A 30-day comment period
ending September 13, 2021 was provided to allow interested persons to
respond to the proposal. No comments were received. Accordingly, no
changes will be made to the proposed rule.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at:
https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any
questions about the compliance guide should be sent to Richard Lower at
the previously mentioned address in the FOR FURTHER INFORMATION CONTACT
section.
After consideration of all relevant material presented, including
the information and recommendation submitted by the Board and other
available information, it is hereby found that this rule will tend to
effectuate the declared policy of the Act.
List of Subjects in 7 CFR Part 930
Cherries, Marketing agreements, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 930 is
amended as follows:
PART 930--TART CHERRIES GROWN IN THE STATES OF MICHIGAN, NEW YORK,
PENNSYLVANIA, OREGON, UTAH, WASHINGTON, AND WISCONSIN
0
1. The authority citation for 7 CFR part 930 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Add Sec. 930.170 to read as follows:
Sec. 930.170 Sales and inventory report.
(a) Handlers shall submit to the Board a sales and inventory report
for the reporting period ending November 30, February 28, May 31, and
June 30 of each crop year. Handlers shall file such reports by the
tenth day of the month following the reporting period, December 10,
March 10, June 10, and July 10, respectively. Should the filing due
date fall on a Saturday, Sunday, or federal holiday, reports are due by
the first business day following the due date. Such reports shall be
reported to the Board on CIAB Form 3 and include:
(1) The name, address, telephone number, and identifying number of
the handler;
(2) The reporting period covered by the report;
(3) The form, type, and unit size for each product;
(4) The total beginning of year inventory for each product;
(5) The packed amount for each product;
(6) Total inter-handler transfers, and total volume repackaged or
remanufactured for each product, year-to-date;
(7) Total sales outside the industry for each product, year-to-
date;
(8) The amount of ending inventory for each product, year-to-date;
(9) List of inter-handler transfers, both in and out, during the
reporting period including:
(i) Name of the selling handler;
(ii) Name of the receiving handler; and
[[Page 72148]]
(iii) Form, type, number of units.
(10) List of repacks and remanufactures during the reporting period
including:
(i) Form, type, and number of units of source products; and
(ii) Form, type, and number of units of end products.
(b) The amount of inventory for each product over 5 years old shall
be reported annually on the sales and inventory report for the
reporting period ending May 31. Product age is based on the crop year
in which the current product was processed or remanufactured.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-27579 Filed 12-20-21; 8:45 am]
BILLING CODE P
