Pecans Grown in the States of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas; Revision of Reporting Requirements
| Published date | 08 March 2019 |
| Citation | 84 FR 8409 |
| Record Number | 2019-04232 |
| Section | Rules and Regulations |
| Court | Agricultural Marketing Service |
Federal Register, Volume 84 Issue 46 (Friday, March 8, 2019)
[Federal Register Volume 84, Number 46 (Friday, March 8, 2019)]
[Rules and Regulations]
[Pages 8409-8411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04232]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 84, No. 46 / Friday, March 8, 2019 / Rules
and Regulations
[[Page 8409]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 986
[Doc. No. AMS-SC-18-0019; SC18-986-1 FR]
Pecans Grown in the States of Alabama, Arkansas, Arizona,
California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi,
North Carolina, New Mexico, Oklahoma, South Carolina, and Texas;
Revision of Reporting Requirements
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule revises the reporting requirements under the Federal
marketing order for pecans. The revised reporting requirements will
enable the American Pecan Council (Council) to collect information from
handlers on the average handler price paid and the average shelled
pecan yield. The Council will use this information to provide important
statistical reports to the industry and meet requirements under the
marketing order.
DATES: Effective April 8, 2019.
FOR FURTHER INFORMATION CONTACT: Jennie M. Varela, Marketing
Specialist, or Christian D. Nissen, Regional Director, Southeast
Marketing Field Office, Marketing Order and Agreement Division,
Specialty Crops Program, AMS, USDA; Telephone: (863) 324-3375, Fax:
(863) 291-8614, or email: [email protected] or
[email protected].
Small businesses may request information on complying with this
regulation by contacting Richard Lower, Marketing Order and Agreement
Division, Specialty Crops Program, AMS, USDA, 1400 Independence Avenue
SW, STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491,
Fax: (202) 720-8938, or email: [email protected].
SUPPLEMENTARY INFORMATION: This final rule, 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 final rule is issued under Marketing Agreement and
Order No. 986, (7 CFR part 986), regulating the handling of pecans
grown in the states of Alabama, Arkansas, Arizona, California, Florida,
Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New
Mexico, Oklahoma, South Carolina, and Texas. Part 986 (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 Council locally administers the Order and is comprised
of growers and handlers of pecans operating within the production area,
and one accumulator and one public member.
The Department of Agriculture (USDA) is issuing this final rule in
conformance with Executive Orders 13563 and 13175. This action falls
within a category of regulatory actions that the Office of Management
and Budget (OMB) has exempted from Executive Order 12866 review.
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).
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. A
handler is afforded the opportunity for a hearing on the petition.
After the hearing, USDA would rule on the petition. The Act provides
that the district court of the United States in any district in which
the handler is an inhabitant, or has his or her principal place of
business, has jurisdiction to review USDA's ruling on the petition,
provided an action is filed not later than 20 days after the date of
the entry of the ruling.
This final rule revises the reporting requirements under the Order.
This action requires all pecan handlers to report to the Council the
average handler price paid and average shelled pecan yield as part of
its existing year-end report. The Council will use this information to
provide statistical reports to the industry and meet requirements under
the Order. This action was unanimously recommended by the Council at
its January 24, 2017, meeting and affirmed at its April 17, 2018,
meeting.
Section 986.76 provides the authority to collect reports on the
quantity of pecans handled and other pertinent information as specified
by the Council. Section 986.78 provides, with the approval of the
Secretary, authority for the Council to collect other reports and
information from handlers needed to perform its duties. Section 986.175
specifies that handlers shall submit a year-end report to the Council
that includes the amount of shelled and inshell pecans in inventory,
total inventory calculated on an inshell basis, total weight and type
of domestic pecans handled for the fiscal year, and information on
assessments owed, paid, or due.
This rule revises Sec. 986.175 to require that additional
information be included in the year-end report. These revisions require
handlers to report the average price paid by handler and average yield
of shelled pecans as part of the existing year-end report.
At its January 24, 2018, and April 17, 2018, meetings, the Council
reviewed the reporting requirements under the Order and determined
there were additional data that would be beneficial to collect and
summarize for the industry on an annual basis. Specifically, the
Council recommended adding two additional items to be reported as part
of the annual year-end reporting requirement, average price paid by
handlers and shelled pecan yield.
While the National Agricultural Statistics Service (NASS) reports
average grower prices, this reporting change will provide information
regarding a handler's overall cost of
[[Page 8410]]
acquiring pecans. Some handlers buy directly from growers, but many buy
from other handlers or import pecans. Understanding the cost of pecans
being handled is key information in determining the value of the
overall crop and subsequent impacts on the market for pecans the
following season. During the meetings, members noted that collecting
the average price paid would also be necessary to complete the
marketing policy report required under the Order. The marketing policy,
as required by Sec. 986.65, must include projected prices for the
upcoming fiscal year, which would be influenced by handler costs.
Further, the Council believes providing this information would improve
the information available to the pecan industry. In particular, the
Council feels this information may give growers better information that
can be used in making business decisions. The Council recommended
adding this reporting requirement as there is currently no
comprehensive source for handler cost information.
The Council also discussed asking handlers to provide information
regarding the weight of shelled pecans handled. During the formal
rulemaking hearing to promulgate the Order, a witness testified
regarding a conversion rate of multiplying the shelled weight by two to
calculate inshell weight. That conversion rate was incorporated into
the Order. Using this conversion, the weight of shelled pecans is
approximately 50 percent of the inshell weight. This proportion is
referred to as the ``shell-out'' or shelled pecan yield. However, there
are natural variations in pecans and yield can vary depending on the
thickness of the shells of different varieties and can also vary from
year to year. These fluctuations make it challenging to accurately
convert the total inshell volume harvested into shelled pounds, or
shelled pounds into their inshell equivalent to provide an accurate
estimate of overall supply.
As with the handler price paid, there is currently no central
industry source for information on shelled pecan yield. The Council
believes collecting this data will allow them to provide the industry
with an updated annual average of this yield, which could be an
indicator of quality, and over time provide a series of data on shelled
pecan yield that would allow them to determine if changes to the
current conversion rate are needed.
Following the recommendation of the proposed changes made at the
January 24, 2018 meeting, some members had questions about the specific
data that would be collected. Based on these questions, the Council
made some adjustments to the proposed form to clarify that handlers
would report the average price paid for all inshell pecans purchased
during the fiscal year, regardless of how the pecans are handled,
including pecans from outside the production area. For the purposes of
this form, the terms crop year and fiscal year are synonymous. The
Council reviewed the revised reporting form at its April 17, 2018,
meeting and affirmed that the new language met their original intent.
The Council believes these revised reporting requirements are
necessary to provide accurate reports to the industry regarding average
price paid, yield for shelled pecans, and to meet requirements under
the Order. The industry will use this information to complement the
information provided by NASS in the development of its marketing policy
and to collect accurate data to determine if the definition of weight
in Sec. 986.43 needs to be amended.
Final Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS)
has considered the economic impact of this action on small entities.
Accordingly, AMS has prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf.
There are approximately 2,500 growers of pecans in the production
area and approximately 250 handlers subject to regulation under the
Order. Small agricultural growers are defined by the Small Business
Administration as those having annual receipts less than $750,000, and
small agricultural service firms are defined as those whose annual
receipts are less than $7,500,000 (13 CFR 121.201).
According to information from NASS, the average grower price for
pecans during the 2016-2017 season was $2.59 per pound and 269 million
pounds were utilized. The value for pecans that year totaled $697
million ($2.59 per pound multiplied by 269 million pounds). Taking the
total value of production for pecans and dividing it by the total
number of pecan growers provides an average return per grower of
$278,684. Using the average price and utilization information, and
assuming a normal distribution among growers, the majority of growers
receive less than $750,000 annually.
Evidence presented at the formal rulemaking hearing indicates an
average handler margin of $0.58 per pound. Adding this margin to the
average grower price of $2.59 per pound of inshell pecans results in an
estimated handler price of $3.17 per pound. With a total 2017
production of 269 million pounds, the total value of production in 2017
was $853 million ($3.17 per pound multiplied by 269 million pounds).
Taking the total value of production for pecans and dividing it by the
total number of pecan handlers provides an average return per handler
of $3.4 million. Using this estimated price, the utilization volume,
number of handlers, and assuming a normal distribution among handlers,
the majority of handlers have annual receipts of less than $7,500,000.
Thus, the majority of growers and handlers regulated under the Order
may be classified as small entities.
This final rule revises the reporting requirements in Sec.
986.175. This action requires all pecan handlers to report to the
Council the average handler price paid and average shelled pecan yield
as part of its existing year-end report. This information will be used
by the Council to provide statistical reports to the industry and meet
requirements under the Order. The authority for this action is provided
in Sec. Sec. 986.76 and 986.78.
It is not anticipated that this action will impose additional costs
on handlers or growers, regardless of size. Council members, including
those representing small businesses, indicated the average handler
price paid and the average shelled pecan yield information is already
recorded and maintained by handlers as a part of their daily business
and the information should be readily accessible. Consequently, any
additional costs associated with this change would be minimal and apply
equally to all handlers.
This action should also help the industry by providing additional
data on pecans handled. This information will help with marketing and
planning for the industry, as well as provide important information in
preparing the annual marketing policy required by the Order. This
change will also assist with the development of a dataset to determine
if the conversion rate for shelled to inshell pecans needs to be
revised. The benefits of this rule are expected to be equally available
to all pecan growers and handlers, regardless of their size.
[[Page 8411]]
The Council discussed other alternatives to this action, including
making no changes to the current reporting requirements. However,
having the information on handler price paid and shelled pecan yield
will provide important information for the industry.
Another alternative considered was to create a new report for the
collection of this information. However, the industry recently
implemented a series of monthly reports that increased the reporting
burden on handlers. Rather than add to the burden by creating a new
report, the Council believed it would be more efficient to ask handlers
for this information as part of the existing year-end reporting
requirement. 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. 0581-0291 ``Federal
Marketing Order for Pecans.'' This final rule will require changes to
the Council's existing APC Form 7. However, the changes are minor and
the currently approved burden for the form will not be altered by the
changes to the form. 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. As noted in the
initial regulatory flexibility analysis, USDA has not identified any
relevant Federal rules that duplicate, overlap, or conflict with this
rule. Further, no public comments were received regarding the initial
regulatory flexibility analysis.
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.
The Council's meetings were widely publicized throughout the pecan
industry and all interested persons were invited to attend the meetings
and participate in Council deliberations on all issues. The Council's
meetings held on January 24, 2018, and April 17, 2018, were also public
meetings and 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 October 9, 2018, (83 FR 50531). Copies of the rule were
sent via email to Council members and known pecan handlers. The rule
was also made available through the internet by USDA and the Office of
the Federal Register. A 30-day comment period ending November 8, 2018,
was provided to allow interested persons to respond to the proposal. No
comments were received. Accordingly, no changes will be made to the
rule as proposed.
A small business guide on complying with fruit, vegetable, and
specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/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 matter presented, including the
information and recommendation submitted by the Council and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
List of Subjects in 7 CFR Part 986
Marketing agreements, Nuts, Pecans, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 986 is
amended as follows:
PART 986--PECANS GROWN IN THE STATES OF ALABAMA, ARKANSAS, ARIZONA,
CALIFORNIA, FLORIDA, GEORGIA, KANSAS, LOUISIANA, MISSOURI,
MISSISSIPPI, NORTH CAROLINA, NEW MEXICO, OKLAHOMA, SOUTH CAROLINA,
AND TEXAS
0
1. The authority citation for 7 CFR part 986 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
0
2. Section 986.175 is amended by revising paragraphs (a) introductory
text, (a)(7) and (8), and adding paragraphs (a)(9) and (10) to read as
follows:
Sec. 986.175 Handler inventory.
(a) Handlers shall submit to the Council a year-end inventory
report following August 31 each fiscal year. Handlers shall file such
reports by September 10. Should September 10 fall on a weekend, reports
are due by the first business day following September 10. Such reports
shall be reported to the Council on APC Form 7. For the purposes of
this form, ``crop year'' is the same as the ``fiscal year.'' The report
shall include:
* * * * *
(7) Total weight and type of domestic pecans handled for the fiscal
year;
(8) Total assessments owed, assessments paid to date, and remaining
assessments due to be paid by the due date of the year-end inventory
report for the fiscal year;
(9) The average price paid for all inshell pecans purchased during
the fiscal year regardless of how the pecans are handled, including
pecans from outside the production area; and
(10) The average yield of shelled pecans per pound of inshell
pecans shelled during the fiscal year.
Dated: March 5, 2019.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2019-04232 Filed 3-7-19; 8:45 am]
BILLING CODE 3410-02-P
