Tart Cherries Grown in the States of Michigan, et al.; Free and Restricted Percentages for the 2019-20 Crop Year
| Citation | 85 FR 16273 |
| Record Number | 2020-05825 |
| Published date | 23 March 2020 |
| Court | Agricultural Marketing Service |
Federal Register, Volume 85 Issue 56 (Monday, March 23, 2020)
[Federal Register Volume 85, Number 56 (Monday, March 23, 2020)]
[Proposed Rules]
[Pages 16273-16278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05825]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Doc. No. AMS-SC-19-100; SC-20-930-1 PR]
Tart Cherries Grown in the States of Michigan, et al.; Free and
Restricted Percentages for the 2019-20 Crop Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would implement a recommendation from the
Cherry Industry Administrative Board (Board) to establish free and
restricted percentages for the 2019-20 crop year under the Marketing
Order for tart cherries grown in the states of Michigan, New York,
Pennsylvania, Oregon, Utah, Washington, and Wisconsin. This action
would establish the proportion of tart cherries from the 2019-20 crop
which may be handled in commercial outlets. This action should
stabilize marketing conditions by adjusting supply to meet market
demand and help improve grower returns. Also, a correction would be
made to this section to reflect the correct desirable carry-out
inventory not to exceed a maximum of 100 million pounds.
DATES: Comments must be received by April 22, 2020.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposal. Comments must be sent to the Docket Clerk,
Marketing Order and Agreement Division, Specialty Crops Program, AMS,
USDA, 1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-
0237; Fax: (202) 720-8938; or internet: http://www.regulations.gov. All
comments should reference the document number and the date and page
number of this issue of the Federal Register and will be made available
for public inspection in the Office of the Docket Clerk during regular
business hours, or can be viewed at: http://www.regulations.gov. All
comments submitted in response to this proposal will be included in the
record and will be made available to the public. Please be advised that
the identity of the individuals or entities submitting the comments
will be made public on the internet at the address provided above.
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 action, pursuant to 5 U.S.C. 553,
proposes an amendment to regulations
[[Page 16274]]
issued to carry out a marketing order as defined in 7 CFR 900.2(j).
This proposed rule is issued under Marketing Agreement and Order No.
930, both as amended (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 Board 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 proposed rule
in conformance with Executive Orders 13563 and 13175. This proposed
rule falls within a category of regulatory action that the Office of
Management and Budget (OMB) exempted from Executive Order 12866 review.
Additionally, because this proposed 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).
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. Under the Order provisions now in effect, free
and restricted percentages may be established for tart cherries handled
during the crop year. This proposed rule would establish free and
restricted percentages for tart cherries for the 2019-20 crop year,
beginning July 1, 2019, through June 30, 2020.
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 proposed rule invites comments on the establishment of free
and restricted percentages for the 2019-20 crop year. This proposal
would establish the proportion of tart cherries from the 2019-20 crop
which may be handled in commercial outlets at 67 percent free and 33
percent restricted. The Secretary of Agriculture (Secretary) has
determined that designating free and restricted percentages of tart
cherries for the 2019-20 crop year would effectuate the declared policy
of the Act to stabilize marketing conditions by adjusting supply to
meet market demand and help improve grower returns. A correction would
also be made to Sec. 930.151 to reflect the correct desirable carry-
out inventory not to exceed a maximum of 100 million pounds (81 FR
63676). These recommendations were made by the Board at meetings on
June 27, 2019, and September 12, 2019.
Section 930.51(a) provides the Secretary authority to regulate
volume by designating free and restricted percentages for any tart
cherries acquired by handlers in a given crop year. Section 930.50
prescribes procedures for computing an optimum supply based on sales
history and for calculating these free and restricted percentages. Free
percentage volume may be shipped to any market, while restricted
percentage volume must be held by handlers in a primary or secondary
reserve, or be diverted or used for exempt purposes as prescribed in
Sec. Sec. 930.159 and 930.162. Exempt purposes include, in part, the
development of new products, sales into new markets, the development of
export markets, and charitable contributions. Sections 930.55 through
930.57 prescribe procedures for inventory reserve. For cherries held in
reserve, handlers would be responsible for storage and would retain
title of the tart cherries.
Under Sec. 930.52, only districts with an annual average
production over the prior three years of at least six million pounds
are subject to regulation, and any district producing a crop that is
less than 50 percent of its annual average of the previous five years
is exempt. The regulated districts for the 2019-20 crop year would be:
District 1--Northern Michigan; District 2--Central Michigan; District
3--Southern Michigan; District 7--Utah; District 8--Washington; and
District 9--Wisconsin. Districts 4, 5, and 6 (New York, Oregon and
Pennsylvania, respectively) would not be regulated for the 2019-20
season.
Demand for tart cherries and tart cherry products tends to be
relatively stable from year to year. Conversely, annual tart cherry
production can vary greatly. In addition, tart cherries are processed
and can be stored and carried over from crop year to crop year, further
impacting supply. As a result, supply and demand for tart cherries are
rarely in balance.
Because demand for tart cherries is inelastic, total sales volume
is not very responsive to changes in price. However, prices are very
sensitive to changes in supply. As such, an oversupply of cherries
would have a sharp negative effect on prices, driving down grower
returns. Aware of this economic relationship, the Board focuses on
using the volume control provisions in the Order to balance supply and
demand to stabilize industry returns.
Pursuant to Sec. 930.50, the Board meets on or about July 1 to
review sales data, inventory data, current crop forecasts, and market
conditions for the upcoming season and, if necessary, to recommend
preliminary free and restricted percentages if anticipated supply would
exceed demand. After harvest is complete, but no later than September
15, the Board meets again to update its calculations using actual
production data, consider any necessary adjustments to the preliminary
percentages, and determine if final free and restricted percentages
should be recommended to the Secretary.
The Board uses sales history, inventory, and production data to
determine whether there is a surplus and, if so, how much volume should
be restricted to maintain optimum supply. The optimum supply represents
the desirable volume of tart cherries that should be available for sale
in the coming crop year. Optimum supply is defined as the average free
sales of the prior three years plus desirable carry-out inventory.
Desirable carry-out is the amount of fruit needed by the industry to be
carried into the succeeding crop year to meet market demand until the
new crop is available. In June 2015, after considering market
circumstances and needs; the Board recommended a desirable carry-out
inventory not to exceed a maximum of up to 100 million pounds beginning
with the 2016 crop year. That action was subsequently approved by the
Secretary (81 FR 63676). Therefore, a correction would be made to Sec.
930.151 to reflect the correct desirable carry-out inventory not to
exceed a maximum of 100 million pounds.
In addition, USDA's ``Guidelines for Fruit, Vegetable, and
Specialty Crop Marketing Orders'' (http://www.ams.usda.gov/
publications/content/1982-guidelines-fruit-vegetable-
[[Page 16275]]
marketing-orders) specify that 110 percent of recent years' sales
should be made available to primary markets each season before
recommendations for volume regulation are approved. This requirement is
codified in Sec. 930.50(g), which specifies that in years when
restricted percentages are established, the Board shall make available
tonnage equivalent to an additional 10 percent of the average sales of
the prior three years for market expansion (market growth factor).
After the Board determines optimum supply, desirable carry-out, and
market growth factor, it must examine the current year's available
volume to determine whether there is an oversupply situation. Available
volume includes carry-in inventory (any inventory available at the
beginning of the season) along with that season's production. If
production is greater than the optimum supply minus carry-in, the
difference is considered surplus. This surplus tonnage is divided by
the sum of production in the regulated districts to reach a restricted
percentage. This percentage must be held in reserve or used for
approved diversion activities, such as exports.
The Board met on June 27, 2019, and computed an optimum supply of
313 million pounds for the 2019-20 crop year using the average of free
sales for the three previous seasons and desirable carry-out. To
determine the carry-out figure, the Board discussed and considered a
range of alternatives. One member suggested a carry-out value of 20
million pounds, noting high carry-out puts downward pressure on grower
prices. Another member agreed, noting the actual carry-out is often
twice what the Board has estimated as desirable. Some members favored a
carry-out of 50 million pounds. Other members were concerned that too
low of a carry-out may push the restricted percentage too high for the
industry to implement and suggested repeating the carry-out of 80
million pounds from the previous season. The Board's executive director
noted average sales are about 21 million pounds a month. Using that
average, it would take 84 million pounds to supply the industry for
four months. After considering the alternatives, the Board determined a
carry-out of 85 million pounds would be enough to supply the industry's
needs at the beginning of the next season.
The Board subtracted the estimated carry-in of 174 million pounds
from the optimum supply to calculate the production quantity needed
from the 2019-20 crop to meet optimum supply. This number, 139 million
pounds, was subtracted from the Board's estimated 2019-20 total
production (from regulated and unregulated districts) of 248.2 million
pounds to calculate a surplus of 109.2 million pounds of tart cherries.
The Board also complied with the market growth factor requirement by
removing 22.8 million pounds (average sales for prior three years of
228 million times 10 percent) from the surplus. The adjusted surplus of
86.4 million pounds was then divided by the expected production in the
regulated districts (240 million pounds) to reach a preliminary
restricted percentage of 36 percent for the 2019-20 crop year.
The Board then discussed whether this calculation would supply
enough cherries to grow sales and fulfil orders that have not yet
shipped. Some members reported there had been excessive rainfall,
especially in Michigan, during the growing season. This could lead to
poor fruit quality and handlers would need additional available tonnage
to meet sales needs. As a result, the Board recommended an additional
economic adjustment of 20 million pounds, which is subtracted from the
surplus. The Board also anticipated orchard diversion would be about 50
million pounds, which is subtracted from the expected production. With
these modifications, the preliminary restricted percentage was
calculated at 35 percent.
The Board met again on September 12, 2019, to consider final volume
regulation percentages for the 2019-20 season. The final percentages
are based on the Board's reported production figures and the supply and
demand information available in September.
The total production for the 2019-20 season was 257.2 million
pounds, 9 million pounds above the Board's June estimate. In addition,
growers diverted 18.3 million pounds in the orchard, about a third of
what had been anticipated. As a result 238.9 million pounds would be
available to market, 230.2 million pounds of which are in the
restricted districts. Using the actual production numbers, and
accounting for the recommended desirable carry-out and economic
adjustment, as well as the market growth factor, the restricted
percentage was recalculated.
The Board subtracted the carry-in figure used in June of 174
million pounds, from the optimum supply of 313 million pounds to
determine 139 million pounds of 2019-20 production would be necessary
to reach optimum supply. The Board subtracted the 139 million pounds
from the actual production of 257.2 million pounds, resulting in a
surplus of 118.2 million pounds of tart cherries.
The recalculated surplus was reduced by subtracting the revised
economic adjustment of 20 million pounds and the market growth factor
of 22.8 million pounds, resulting in an adjusted surplus of 75.4
million pounds. The Board then divided this final surplus by the
available production of 230.2 million pounds in the regulated districts
(248.5 million pounds minus 18.3 million pounds of in-orchard
diversion) to calculate a restricted percentage of 33 percent with a
corresponding free percentage of 67 percent for the 2019-20 crop year,
as outlined in the following table:
------------------------------------------------------------------------
Millions
of pounds
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Final Calculations:
(1) Average sales of the prior three years.................. 228
(2) Plus desirable carry-out................................ 85
(3) Optimum supply calculated by the Board.................. 313
(4) Carry-in as of July 1, 2019............................. 174
(5) Adjusted optimum supply (item 3 minus item 4)........... 139
(6) Board reported production............................... 257.2
(7) Surplus (item 6 minus item 5)........................... 118.2
(8) Total economic adjustments.............................. 20
(9) Market growth factor.................................... 22.8
(10) Adjusted Surplus (item 7 minus items 8 and 9).......... 75.4
(11) Production in regulated districts...................... 248.5
(12) In-Orchard Diversion................................... 18.3
(13) Production minus in orchard diversion.................. 230.2
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Final Percentages: Percent
-----------
Restricted (item 10 divided by item 13 x 100)........... 33
Free (100 minus restricted percentage).................. 67
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The final restriction of 33 percent is lower than the preliminary
restriction percentage of 35 percent. The change is due to the increase
in production from the June estimate and lower in-orchard diversion
volume. The desired carry-out remained the same at 85 million pounds.
In discussing the calculation, members indicated the quality concerns
that led to the adjustment were accurate. Members did not propose any
changes to the adjustment following harvest.
During the preliminary and final discussions, attendees raised
concerns about the age of free inventory and the impact of imported
tart cherry products. The Board voted to form a committee to develop a
proposal for collecting additional data regarding inventory. Regarding
the impact of imports, the Board approved a research proposal to gather
additional data. The Board anticipates these actions would help
[[Page 16276]]
provide additional data for future volume regulation discussions.
Establishing free and restricted percentages is an attempt to bring
supply and demand into balance. If the primary market is oversupplied
with cherries, grower prices decline substantially. Restricted
percentages have benefited grower returns and helped stabilize the
market as compared to those seasons prior to the implementation of the
Order. The Board, based on its discussion of this issue and the result
of the above calculations, believes the available information indicates
a restricted percentage should be established for the 2019-20 crop year
to avoid oversupplying the market with tart cherries.
Consequently, the Board recommended final percentages of 67 percent
free and 33 percent restricted by a vote of 15 in favor, and 3 opposed.
The Board could meet and recommend the release of additional volume
during the crop year if conditions so warranted. The Secretary finds,
from the recommendation and supporting information supplied by the
Board, that designating final percentages of 67 percent free and 33
percent restricted would tend to effectuate the declared policy of the
Act, and so designates these percentages.
Initial 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 proposed rule on small
entities. Accordingly, AMS has prepared this initial 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 400 producers of tart cherries in the
regulated area and approximately 40 handlers of tart cherries who are
subject to regulation under the Order. Small agricultural producers are
defined by the Small Business Administration (SBA) as those having
annual receipts of less than $1,000,000, and small agricultural service
firms have been defined as those whose annual receipts are less than
$30,000,000 (13 CFR 121.201).
According to the National Agricultural Statistics Service (NASS)
and Board data, the average annual grower price for tart cherries
utilized for processing during the 2018-19 season was approximately
$0.196 per pound. With total utilization at 288.8 million pounds for
the 2018-19 season, the total 2018-19 value of the crop utilized for
processing is estimated at $56.6 million. Dividing the crop value by
the estimated number of producers (400) yields an estimated average
receipt per producer of $141,500. This is well below the SBA threshold
for small producers.
A free on board (FOB) price of $0.80 per pound for frozen tart
cherries was reported by the Food Institute during the 2018-19 season.
Based on utilization, this price represents a good estimate of the
price for processed cherries. Multiplying this FOB price by total
utilization of 288.8 million pounds results in an estimated handler-
level tart cherry value of $231 million. Dividing this figure by the
number of handlers (40) yields estimated average annual handler
receipts of $5.8 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.
The tart cherry industry in the United States is characterized by
wide annual fluctuations in production. According to NASS, the pounds
of utilized tart cherry production for the years 2014 through 2018 were
301 million, 251 million, 319 million, 254 million, and 289 million,
respectively. Because of these fluctuations, supply and demand for tart
cherries are rarely in balance.
Demand for tart cherries is inelastic, meaning changes in price
have a minimal effect on total sales volume. However, prices are very
sensitive to changes in supply, and grower prices vary widely in
response to the large swings in annual supply. Grower prices per pound
for processed utilization have ranged from a low of $0.073 in 1987 to a
high of $0.588 per pound in 2012 when a weather event substantially
reduced supply.
Because of this relationship between supply and price,
oversupplying the market with tart cherries would have a sharp negative
effect on prices, driving down grower returns. Aware of this economic
relationship, the Board focuses on using the volume control authority
in the Order to align supply with demand and stabilize industry
returns. This authority allows the industry to set free and restricted
percentages as a way to bring supply and demand into balance. Free
percentage cherries can be marketed by handlers to any outlet, while
restricted percentage volume must be held by handlers in reserve,
diverted, or used for exempted purposes.
This proposal would control the supply of tart cherries by
establishing percentages of 67 percent free and 33 percent restricted
for the 2019-20 crop year. These percentages should stabilize marketing
conditions by adjusting supply to meet market demand and help improve
grower returns. The proposal would regulate tart cherries handled in
Michigan, Utah, Washington, and Wisconsin. The authority for this
proposed action is provided in Sec. Sec. 930.50, 930.51(a), and
930.52. The Board recommended this action at a meeting on September 12,
2019.
This proposal would result in some fruit being diverted from the
primary domestic markets. However, as mentioned earlier, the USDA's
``Guidelines for Fruit, Vegetable, and Specialty Crop Marketing
Orders'' (http://www.ams.usda.gov/publications/content/1982-guidelines-fruit-vegetable-marketing-orders) specify that 110 percent of recent
years' sales should be made available to primary markets each season
before recommendations for volume regulation are approved. Under this
proposal, the available quantity (337.5 million pounds) would be 148
percent of the average sales for the last three years (228 million
pounds).
In addition, there are secondary uses available for restricted
fruit, including the development of new products, sales into new
markets, the development of export markets, and being placed in
reserve. While these alternatives may provide different levels of
return than the sales to primary markets, they play an important role
for the industry. The areas of new products, new markets, and the
development of export markets utilize restricted fruit to develop and
expand the markets for tart cherries. In 2018-19, these activities
accounted for over 88 million pounds in sales, a 6-million-pound
increase from the previous season.
Placing tart cherries into reserves is also a key part of balancing
supply and demand. Although handlers bear the handling and storage
costs for fruit in reserve, reserves stored in large crop years are
used to supplement supplies in short crop years. The reserves help the
industry to mitigate the impact of oversupply in large crop years,
while allowing the industry to supply markets in years when production
falls below demand. Further, storage and handling costs are more than
offset by the increase in price when moving from a large crop to a
short crop year.
[[Page 16277]]
The Board recommended a carry-out of 85 million pounds and made a
demand adjustment of 20 million pounds in order to make the regulation
less restrictive to account for fruit quality concerns. With 174
million pounds of carry-in, 8.7 million pounds of production in the
unregulated districts, and 154.8 million pounds of free tonnage from
the regulated districts, 337.5 million pounds of fruit would be
available for the domestic market. This amount is comparable to the
336.9 million pounds made available in the previous season. Even with
the recommended restriction, the domestic market would have an ample
supply of tart cherries. Further, should marketing conditions change,
and market demand exceed existing supplies, the Board could meet and
recommend the release of an additional volume of cherries.
Consequently, it is not anticipated that this proposal would unduly
burden growers or handlers.
While this proposal could result in some additional costs to the
industry, these costs are outweighed by the benefits. The purpose of
setting restricted percentages is to attempt to bring supply and demand
into balance. If the primary market (domestic) is oversupplied with
cherries, grower prices decline substantially. Without volume control,
the primary market would likely be oversupplied, resulting in lower
grower prices.
An econometric model has been developed to assess the impact volume
control has on the price growers receive for their product. Based on
the model, the use of volume control would have a positive impact on
grower returns for this crop year. With volume control, grower prices
are estimated to be approximately $0.04 per pound higher than without
restrictions. In addition, absent volume control, the industry could
start to build large amounts of unwanted inventories. These inventories
would have a depressing effect on grower prices.
Retail demand is assumed to be highly inelastic, which indicates
changes in price do not result in significant changes in the quantity
demanded. Consumer prices largely do not reflect fluctuations in cherry
supplies. Therefore, this proposal should have little or no effect on
consumer prices and should not result in a reduction in retail sales.
The free and restricted percentages established by this proposal
would provide the market with optimum supply and would apply uniformly
to all regulated handlers in the industry, regardless of size. As the
restriction represents a percentage of a handler's volume, the costs,
when applicable, are proportionate and should not place an extra burden
on small entities as compared to large entities.
The stabilizing effects of this proposal would benefit all handlers
by helping them maintain and expand markets, despite seasonal supply
fluctuations. Likewise, price stability positively impacts all growers
and handlers by allowing them to better anticipate the revenues their
tart cherries would generate. Growers and handlers, regardless of size,
would benefit from the stabilizing effects of the volume restriction.
As noted earlier, the Board had extensive discussions on carry-out
inventory alternatives. The alternatives ranged from 20 million pounds
to 100 million pounds. Some expressed a concern that the relatively low
reserves compared to high carry-in signaled that not enough fruit had
been put in reserve in previous seasons. Some attendees indicated
excess carry-in over the past few seasons has had a negative effect on
returns and growers are seeking relief. The Board noted if the carry-
out number was too large, it could have a negative impact on grower
returns, but enough fruit was needed to supply processors before the
new harvest. After consideration of the alternatives, the Board
recommended a carry-out of 85 million pounds.
The Board also weighed alternatives when discussing the economic
adjustment. Some member suggested making no adjustment to the formula.
However, at its June meeting, the Board recommended a 20-million-pound
adjustment to account for fruit quality concerns. When fruit is too
large or too small, it does not move as efficiently through the pitting
process. The Board was concerned excessive rainfall would result in
large, soft, fruit that would not process as well as average-sized
fruit. As a result, more fruit would be necessary to get the needed
final product. Following harvest, Board members confirmed weather had
indeed affected the size of fruit, and that the recommended adjustment
was accurate and should not be changed.
In discussing the preliminary recommendation, the Board heard a
report from a committee that examined import issues. During the
discussion there was a suggestion that the Board might consider using
the previous year's import numbers to estimate imported volume in the
coming year. However, there was no motion to make an adjustment for
imports. To better address these issues, the Board did allocated funds
to a research project to provide additional information on the volume
and impact of imported cherry products.
Given the concerns with regulation expressed by Board members and
industry members in attendance, the Board also considered recommending
no volume regulation. However, the data indicated a high carryover from
previous seasons has created a substantial surplus. During this
discussion, attendees questioned the age of the products in inventory.
While all types of products can be stored for multiple years, their
value does diminish over time. Reserve inventory must be under two
years old, but there are no restrictions on free inventory. Industry
members expressed concern that not all inventory is of equal value and
suggested the Board should collect information on the age and quality
of free inventory. A vote to recommend no volume regulation failed, but
the Board did agree to form a committee to investigate potential
reporting requirements to provide the industry better data regarding
the available inventory. Thus, 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. No changes are necessary in
those requirements as a result of this action. Should any changes
become necessary, they would be submitted to OMB for approval.
This proposal would not impose any additional reporting or
recordkeeping requirements on either small or large tart cherry
handlers. As with all Federal marketing order programs, reports and
forms are periodically reviewed to reduce information requirements and
duplication by industry and public sector agencies.
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.
USDA has not identified any relevant Federal rules that duplicate,
overlap or conflict with this proposed rule.
In addition, the Board's meetings were widely publicized throughout
the tart cherry industry, and all interested persons were invited to
attend the meetings and participate in Board deliberations on all
issues. Like all Board meetings, the June 27, 2019, and
[[Page 16278]]
September 12, 2019, meetings were public meetings, and all entities,
both large and small, were able to express views on this issue.
Finally, interested persons are invited to submit comments on this
proposed rule, including the regulatory and information collection
impacts of this proposal on small businesses.
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.
A 30-day comment period is provided to allow interested persons to
respond to this proposal. All written comments timely received will be
considered before a final determination is made on this matter.
List of Subjects in 7 CFR Part 930
Marketing agreements, Reporting and recordkeeping requirements,
Tart cherries.
For the reasons set forth in the preamble, 7 CFR part 930 is
proposed to be 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. Revise Sec. 930.151 to read as follows:
Sec. 930.151 Desirable Carry-out inventory.
Beginning with the crop year starting July 1, 2016, for the
purposes of determining an optimum supply volume, the Board may
recommend a desirable carry-out inventory not to exceed 100 million
pounds.
0
3. Revise Sec. 930.256 and the heading to read as follows:
Sec. 930.256 Free and restricted percentages for the 2019-20 crop
year.
The percentages for tart cherries handled by handlers during the
crop year beginning on July 1, 2019, which shall be free and
restricted, respectively, are designated as follows: Free percentage,
67 percent and restricted percentage, 33 percent.
Bruce Summers,
Administrator, Agricultural Marketing Service.
[FR Doc. 2020-05825 Filed 3-20-20; 8:45 am]
BILLING CODE 3410-02-P
