71744 Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 

5A guide to SBA’s definitions of small business 

is available on the Internet at http://www.sba.gov/

size/indexguide.html. A table of small business size 

standards matched to the North American Industry 

Classification System is available at http://

www.sba.gov/size/sizetable2002.html.

to ‘‘Subpart—Plants for Planting’’ to 

reflect this change. We would also 

include the weed taxa whose 

importation is restricted by 7 CFR part 

360 as restricted articles in the new 

plants for planting regulations. Our 

intent in making such a change would 

be to improve the clarity and 

transparency of our regulations 

governing the importation of plants for 

planting by allowing users of the 

regulations to find all these regulations 

in one subpart. By making it easier for 

users of the regulations to find and 

follow the regulations relevant to their 

situation, this action could also improve 

compliance. 

We invite responses to the following 

questions in particular on the 

reorganization of the regulations for 

plants for planting we are considering: 

1. Should all the regulations 

governing the importation of plants for 

planting in the subparts listed above be 

incorporated into one subpart? If not, 

which subparts should be excluded, and 

why? 

2. If we should incorporate the 

regulations governing the importation of 

plants for planting in the subparts listed 

above into one subpart, which subparts 

should we incorporate first? Should we 

combine them all at once? 

Reevaluating Taxa Whose Importation 

Is Currently Prohibited 

The regulations in § 319.37–2(a) list 

taxa whose importation is prohibited 

because the importation of plants for 

planting from these taxa poses a risk of 

introducing a quarantine pest into the 

United States. Several of the other 

subparts listed above also prohibit the 

importation of certain taxa of plants for 

planting. Many of these taxa were 

prohibited from being imported after the 

discovery of a single quarantine pest as 

found in a shipment offered for 

importation into the United States or as 

reported in the scientific literature. 

Complete quarantine pest lists are not 

available for each of these taxa. In 

addition, the regulations in § 319.37–

2(b) prohibit the importation of certain 

taxa of plants for planting if the plants 

for planting exceed certain sizes or ages. 

These limits have not been reviewed 

recently. 

In accordance with recommendation 

E–48 in the Safeguarding Report, we are 

considering reviewing the taxa of plants 

for planting whose importation is 

currently prohibited to determine 

whether the pests of concern presently 

qualify as quarantine pests by the 

definition cited above. Since the time 

these plant taxa were designated as 

prohibited, the pest of concern may 

have become established in the United 

States, or scientific evidence may have 

become available that indicates that the 

pest of concern does not qualify as a 

quarantine pest. If we undertake this 

review, we will begin by conducting a 

PRA to determine the pests of 

quarantine concern associated with 

these taxa and whether prohibition is 

the only approach to mitigation that 

would prevent quarantine pests 

associated with these taxa of plants for 

planting from becoming established in 

the United States. 

We invite responses to the following 

question on our potential reevaluation 

of taxa of plants for planting whose 

importation is currently prohibited: 

1. Which taxa should be candidates 

for review? Which of these taxa should 

be assigned the highest priority for 

review? Please identify the taxa by 

scientific name and provide scientific 

information to support your suggestion. 

Please also provide information, if 

known, on any quarantine pests other 

than the pest(s) of concern listed in the 

regulations that may be associated with 

the taxa. 

2. Which prohibitions on the basis of 

size or age should be candidates for 

review? Which of these prohibitions 

should be assigned the highest priority 

for review? 

We further invite comment on which 

of the five measures above should be 

assigned the highest priority for 

implementation, if any. 

Economic Data About the Plants for 

Planting Industry 

Except for combining existing 

regulations governing the importation of 

plants for planting, which would be an 

administrative change, all the measures 

we are considering for revising the 

regulations would be likely to have an 

economic impact on numerous entities 

considered ‘‘small’’ according to the size 

standards established by the Small 

Business Administration (SBA).5 After 

we receive answers to the specific 

questions listed above regarding the five 

measures we are considering, we may 

issue a proposal or proposals with the 

goal of implementing one or more of 

these measures. In order to conduct the 

economic analysis required by the 

Regulatory Flexibility Act for those 

potential proposals and assess the 

impact of any changes we might 

propose on small entities, we will need 

more economic data about the plants for 

planting industry than are currently 

available to us. Therefore, we invite the 

public to provide us with data regarding 

the structure of the plants for planting 

industry, including the number of firms 

in the industry, the number of firms that 

could be considered small according to 

the SBA’s size standards, the number of 

firms whose business directly involves 

the importation of plants for planting, 

and any other data that would assist us 

in conducting economic analyses 

associated with these measures.

We would also appreciate any 

suggestions the public may have for 

improving other aspects of the 

regulations to reduce the risk of 

introducing quarantine pests into the 

United States.

Authority: 7 U.S.C. 450 and 7701–7772; 21 

U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 

371.3.

Done in Washington, DC, this 6th day of 

December 2004. 

Bill Hawks, 

Under Secretary for Marketing and Regulatory 

Programs.

[FR Doc. 04–27139 Filed 12–9–04; 8:45 am] 

BILLING CODE 3410–34–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service 

7 CFR Part 930

[Docket No. FV04–930–2 PR] 

Tart Cherries Grown in the States of 

Michigan, et al.; Final Free and 

Restricted Percentages for the 2004–

2005 Crop Year

AGENCY: Agricultural Marketing Service, 

USDA.

ACTION: Proposed rule.

SUMMARY: This rule invites comments 

on the establishment of final free and 

restricted percentages for the 2004–2005 

crop year. The percentages are 72 

percent free and 28 percent restricted 

and would establish the proportion of 

tart cherries from the 2004 crop which 

may be handled in commercial outlets. 

The percentages are intended to 

stabilize supplies and prices, and 

strengthen market conditions. The 

percentages were recommended by the 

Cherry Industry Administrative Board, 

the body that locally administers the 

marketing order. The marketing order 

regulates the handling of tart cherries 

grown in the States of Michigan, New 

York, Pennsylvania, Oregon, Utah, 

Washington, and Wisconsin.

DATES: Comments must be received by 

January 10, 2005.

Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 71745

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments must be 

sent to the Docket Clerk, Marketing 

Order Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., STOP 

0237, Washington, DC 20250–0237; 

Telephone: (202) 720–2491, Fax: (202) 

720–8938, or e-mail: 

moabdocket.clerk@usda.gov. Comments 

should reference the docket number and 

the date and page number of this issue 

of the Federal Register and will be 

available for public inspection in the 

Office of the Docket Clerk during regular 

business hours or can be viewed at: 

http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT:

Patricia A. Petrella or Kenneth G. 

Johnson, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, Suite 

6C02, Unit 155, 4700 River Road, 

Riverdale, MD 20737; Telephone: (301) 

734–5243 or Fax: (301) 734–5275; or 

George Kelhart, Technical Advisor, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue, SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720–

2491 or Fax: (202) 720–8938. 

Small businesses may request 

information on complying with this 

regulation, or obtain a guide on 

complying with fruit, vegetable, and 

specialty crop marketing agreements 

and orders by contacting Jay Guerber, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue, SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720–

2491, Fax: (202) 720–8938, or e-mail: 

Jay.Guerber@usda.gov.

SUPPLEMENTARY INFORMATION: This 

proposal 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, hereinafter referred to as the 

‘‘order.’’ The order is effective under the 

Agricultural Marketing Agreement Act 

of 1937, as amended (7 U.S.C. 601–674), 

hereinafter referred to as the ‘‘Act.’’

The Department of Agriculture 

(USDA) is issuing this rule in 

conformance with Executive Order 

12866. 

This proposal has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. Under the marketing 

order provisions now in effect, final free 

and restricted percentages may be 

established for tart cherries handled by 

handlers during the crop year. This rule 

would establish final free and restricted 

percentages for tart cherries for the 

2004–2005 crop year, beginning July 1, 

2004, through June 30, 2005. This rule 

will not preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

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 the Secretary 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 exempt therefrom. Such 

handler is afforded the opportunity for 

a hearing on the petition. After the 

hearing, the 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 in 

equity to review the 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. 

The order prescribes procedures for 

computing an optimum supply and 

preliminary and final percentages that 

establish the amount of tart cherries that 

can be marketed throughout the season. 

The regulations apply to all handlers of 

tart cherries that are in the regulated 

districts. Tart cherries in the free 

percentage category may be shipped 

immediately to any market, while 

restricted percentage tart cherries must 

be held by handlers in a primary or 

secondary reserve, or be diverted in 

accordance with § 930.59 of the order 

and § 930.159 of the regulations, or used 

for exempt purposes (and obtaining 

diversion credit) under § 930.62 of the 

order and § 930.162 of the regulations. 

The regulated districts for this season 

are: District one—Northern Michigan; 

District two—Central Michigan; District 

three—Southwest Michigan; District 

four—New York; District seven—Utah; 

District eight—Washington, and District 

nine—Wisconsin. Districts five and six 

(Oregon and Pennsylvania, respectively) 

would not be regulated for the 2004–

2005 season. 

The order prescribes under § 930.52 

that those districts to be regulated shall 

be those districts in which the average 

annual production of cherries over the 

prior three years has exceeded six 

million pounds. A district not meeting 

the six million-pound requirement shall 

not be regulated in such crop year. 

Because this requirement was not met in 

the Districts of Oregon and 

Pennsylvania, handlers in those districts 

would not be subject to volume 

regulation during the 2004–2005 crop 

year.

Demand for tart cherries at the farm 

level is derived from the demand for tart 

cherry products at retail. Demand for 

tart cherries and tart cherry products 

tends to be relatively stable from year to 

year. The supply of tart cherries, by 

contrast, varies greatly from crop year to 

crop year. The magnitude of annual 

fluctuations in tart cherry supplies is 

one of the most pronounced for any 

agricultural commodity in the United 

States. In addition, since tart cherries 

are processed into cans or frozen, they 

can be stored and carried over from crop 

year to crop year. This creates 

substantial coordination and marketing 

problems. The supply and demand for 

tart cherries is rarely balanced. The 

primary purpose of setting free and 

restricted percentages is to balance 

supply with demand and reduce large 

surpluses that may occur. 

Section 930.50(a) of the order 

prescribes procedures for computing an 

optimum supply for each crop year. The 

Board must meet on or about July 1 of 

each crop year, to review sales data, 

inventory data, current crop forecasts 

and market conditions. The optimum 

supply volume shall be calculated as 

100 percent of the average sales of the 

prior three years (taking into account 

sales of exempt and restricted 

percentage cherries qualifying for 

diversion credit) to which is added a 

desirable carryout inventory not to 

exceed 20 million pounds or such other 

amount as may be established with the 

approval of USDA. The optimum supply 

represents the desirable volume of tart 

cherries that should be available for sale 

in the coming crop year. 

The order also provides that on or 

about July 1 of each crop year, the Board 

is required to establish preliminary free 

and restricted percentages. These 

percentages are computed by deducting 

the actual carryin inventory from the 

optimum supply figure (adjusted to raw 

product equivalent—the actual weight 

of cherries handled to process into 

cherry products) and subtracting that 

figure (referred to as the current crop 

year requirement) from the current 

year’s USDA crop forecast or by an 

average of such other crop estimates the 

Board votes to use. If the resulting 

number is positive, this represents the 

estimated over-production, which 

would be the restricted percentage 

tonnage. The restricted percentage 

tonnage is then divided by the sum of 

the crop forecast(s) for the regulated 

districts to obtain a preliminary 

71746 Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 

restricted percentage, rounded to the 

nearest whole number, for the regulated 

districts. If subtracting the current crop 

year requirement, from the current crop 

forecast, results in a negative number, 

the Board is required to establish a 

preliminary free tonnage percentage of 

100 percent with a preliminary 

restricted percentage of zero. The Board 

is required to announce the preliminary 

percentages in accordance with 

paragraph (h) of § 930.50.

The Board met on June 24, 2004, and 

computed, for the 2004–2005 crop year, 

an optimum supply volume of 177 

million pounds. The Board 

recommended that the desirable 

carryout figure be zero pounds. 

Desirable carryout is the amount of fruit 

required to be carried into the 

succeeding crop year and is set by the 

Board after considering market 

circumstances and needs. This figure 

can range from zero to a maximum of 20 

million pounds. The Board calculated 

preliminary free and restricted 

percentages as follows: The USDA 

estimate of the crop for the entire 

production area was 215 million 

pounds; a 24 million pound carryin 

(based on Board estimates) was 

subtracted from the optimum supply of 

177 million pounds which resulted in 

2004–2005 tonnage requirements 

(adjusted optimum supply) of 153 

million pounds. The carryin figure 

reflects the amount of cherries that 

handlers actually had in inventory at 

the beginning of the crop year. 

Subtracting the adjusted optimum 

supply of 153 million pounds from the 

215 million pound USDA crop estimate 

(for the entire production area) results 

in a surplus of 62 million pounds of tart 

cherries. The surplus was then divided 

by the production in the regulated 

districts (207 million pounds) and this 

resulted in a restricted percentage of 30 

percent for the 2004–2005 crop year. 

The free percentage was 70 percent (100 

percent minus 30 percent). The Board 

established these percentages and 

announced them to the industry as 

required by the order. 

The table below summarizes the 

preliminary percentage computations 

made by the Board at its June meeting 

for the 2004–2005 year:

Millions of pounds 

Optimum Supply Formula: 

(1) Average sales of the prior three crop years ................................................................................................................... 177 

(2) Plus desirable carryout ................................................................................................................................................... 0 

(3) Optimum supply calculated by the Board at the June meeting ..................................................................................... 177 

Preliminary Percentages: 

(4) USDA crop estimate ....................................................................................................................................................... 215 

(5) Carryin held by handlers as of July 1, 2004. ................................................................................................................. 24 

(6) Adjusted optimum supply for current crop year (Item 3 minus Item 5) ......................................................................... 153 

(7) Surplus (restricted tonnage) (Item 4 minus Item 6) ....................................................................................................... 62 

(8) USDA crop estimate for regulated districts .................................................................................................................... 207 

Percentages 

Free Restricted 

(9) Preliminary percentages (Item 7 divided by Item 8 x 100 equals restricted percentage; 100 minus restricted percentage equals free percentage) ...................................................................................................................................... 70 30 

Between July 1 and September 15 of 

each crop year, the Board may modify 

the preliminary free and restricted 

percentages by announcing interim free 

and restricted percentages to adjust to 

the actual pack occurring in the 

industry. No interim adjustments were 

made. 

USDA establishes final free and 

restricted percentages through the 

informal rulemaking process. These 

percentages would make available the 

tart cherries necessary to achieve the 

optimum supply figure calculated by 

the Board. The difference between any 

final free percentage designated by 

USDA and 100 percent is the final 

restricted percentage. The Board met on 

September 10, 2004, to recommend final 

free and restricted percentages.

The actual production reported by the 

Board for the entire production area was 

209 million pounds, which is a 6 

million pound decrease from the USDA 

crop estimate of 215 million pounds. 

A 25 million pound carryin (based on 

handler reports) was subtracted from the 

Board’s optimum supply of 177 million 

pounds, yielding an adjusted optimum 

supply for the current crop year of 152 

million pounds. The adjusted optimum 

supply of 152 million pounds was 

subtracted from the actual production of 

209 million pounds, which resulted in 

a 57 million pound surplus. The total 

surplus of 57 million pounds was then 

divided by the 202 million-pound 

volume of tart cherries produced in the 

regulated districts. This results in a 28 

percent restricted percentage and a 

corresponding 72 percent free 

percentage for the regulated districts. 

The final percentages are based on the 

Board’s reported production figures and 

the following supply and demand 

information available in September for 

the 2004–2005 crop year:

Millions of pounds 

Optimum Supply Formula: 

(1) Average sales of the prior three years ........................................................................................................................... 177

(2) Plus desirable carryout ................................................................................................................................................... 0

(3) Optimum supply calculated by the Board at the June meeting ..................................................................................... 177

Final Percentages: 

(4) Board reported production .............................................................................................................................................. 209

(5) Carryin held by handlers as of July 1, 2004 .................................................................................................................. 25

(6) Adjusted optimum supply (Item 3 minus Item 5) ............................................................................................................ 152

(7) Surplus (restricted tonnage)(Item 4 minus Item 6) ......................................................................................................... 57

(8) Production in regulated districts ..................................................................................................................................... 202

Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 71747

Millions of pounds 

Percentages 

Free Restricted 

(9) Final Percentages (Item 7 divided by Item 8 x 100 equals restricted percentage; 100 minus restricted percentage 

equals free percentage) .................................................................................................................................................... 72 28

The Department’s ‘‘Guidelines for 

Fruit, Vegetable, and Specialty Crop 

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 

goal would be met by the establishment 

of final percentages which release 100 

percent of the optimum supply volume 

and the additional release of tart 

cherries provided under § 930.50(g). 

This release of tonnage, equal to 10 

percent of the average sales of the prior 

three years sales, is made available to 

handlers each season. 

The Board recommended that such 

release should be made available to 

handlers the first week of December and 

the first week of May. Handlers can 

decide how much of the 10 percent 

release they would like to receive on the 

December and May release dates. Once 

released, such cherries are released for 

free use by such handler. 

Approximately 18 million pounds 

would be made available to handlers 

this season in accordance with 

Department Guidelines. These cherries 

would be made available to every 

handler and released in proportion to 

the handler’s percentage of the total 

regulated crop handled. If a handler 

does not take his/her proportionate 

amount, such amount remains in the 

inventory reserve. 

The Regulatory Flexibility Act and 

Effects on Small Businesses

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA), the 

Agricultural Marketing Service (AMS) 

has considered the economic impact of 

this action 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 

business subject to such actions in order 

that small businesses will not be unduly 

or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and rules issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. Thus, both statutes have small 

entity orientation and compatibility. 

There are approximately 40 handlers 

of tart cherries who are subject to 

regulation under the tart cherry 

marketing order and approximately 900 

producers of tart cherries in the 

regulated area. Small agricultural 

service firms, which includes handlers, 

have been defined by the Small 

Business Administration (13 CFR 

121.201) as those having annual receipts 

of less than $5,000,000, and small 

agricultural producers are defined as 

those having annual receipts of less than 

$750,000. A majority of the producers 

and handlers are considered small 

entities under SBA’s standards. 

The principal demand for tart cherries 

is in the form of processed products. 

Tart cherries are dried, frozen, canned, 

juiced, and pureed. During the period 

1998/99 through 2003/04, 

approximately 92 percent of the U.S. 

tart cherry crop, or 252.8 million 

pounds, was processed annually. Of the 

252.8 million pounds of tart cherries 

processed, 59 percent was frozen, 29 

percent was canned, and 12 percent was 

utilized for juice and other products. 

Based on National Agricultural 

Statistics Service data, acreage in the 

United States devoted to tart cherry 

production has been trending 

downward. Bearing acreage has 

declined from a high of 50,050 acres in 

1987/88 to 37,000 acres in 2003/04. This 

represents a 26 percent decrease in total 

bearing acres. Michigan leads the nation 

in tart cherry acreage with 73 percent of 

the total and produces about 75 percent 

of the U.S. tart cherry crop each year. 

The 2004/05 crop is moderate in size 

at 209 million pounds. The largest crop 

occurred in 1995 with production in the 

regulated districts reaching a record 

395.6 million pounds. The price per 

pound received by tart cherry growers 

ranged from a low of 7.3 cents in 1987 

to a high of 46.4 cents in 1991. These 

problems of wide supply and price 

fluctuations in the tart cherry industry 

are national in scope and impact. 

Growers testified during the order 

promulgation process that the prices 

they received often did not come close 

to covering the costs of production. 

The industry demonstrated a need for 

an order during the promulgation 

process of the marketing order because 

large variations in annual tart cherry 

supplies tend to lead to fluctuations in 

prices and disorderly marketing. As a 

result of these fluctuations in supply 

and price, growers realize less income. 

The industry chose a volume control 

marketing order to even out these wide 

variations in supply and improve 

returns to growers. During the 

promulgation process, proponents 

testified that small growers and 

processors would have the most to gain 

from implementation of a marketing 

order because many such growers and 

handlers had been going out of business 

due to low tart cherry prices. They also 

testified that, since an order would help 

increase grower returns, this should 

increase the buffer between business 

success and failure because small 

growers and handlers tend to be less 

capitalized than larger growers and 

handlers. 

Aggregate demand for tart cherries 

and tart cherry products tends to be 

relatively stable from year-to-year. 

Similarly, prices at the retail level show 

minimal variation. Consumer prices in 

grocery stores, and particularly in food 

service markets, largely do not reflect 

fluctuations in cherry supplies. Retail 

demand is assumed to be highly 

inelastic which indicates that price 

reductions do not result in large 

increases in the quantity demanded. 

Most tart cherries are sold to food 

service outlets and to consumers as pie 

filling; frozen cherries are sold as an 

ingredient to manufacturers of pies and 

cherry desserts. Juice and dried cherries 

are expanding market outlets for tart 

cherries. 

Demand for tart cherries at the farm 

level is derived from the demand for tart 

cherry products at retail. In general, the 

farm-level demand for a commodity 

consists of the demand at retail or food 

service outlets minus per-unit 

processing and distribution costs 

incurred in transforming the raw farm 

commodity into a product available to 

consumers. These costs comprise what 

is known as the ‘‘marketing margin.’’

The supply of tart cherries, by 

contrast, varies greatly. The magnitude 

of annual fluctuations in tart cherry 

supplies is one of the most pronounced 

for any agricultural commodity in the 

United States. In addition, since tart 

cherries are processed either into cans 

or frozen, they can be stored and carried 

over from year-to-year. This creates 

substantial coordination and marketing 

problems. The supply and demand for 

71748 Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 

tart cherries is rarely in equilibrium. As 

a result, grower prices fluctuate widely, 

reflecting the large swings in annual 

supplies.

In an effort to stabilize prices, the tart 

cherry industry uses the volume control 

mechanisms under the authority of the 

Federal marketing order. This authority 

allows the industry to set free and 

restricted percentages. These 

percentages are only applied to states or 

districts with a 3-year average of 

production greater than six million 

pounds, and to states or districts in 

which the production is 50 percent or 

more of the previous 5-year processed 

production average. 

The primary purpose of setting 

restricted percentages is an attempt to 

bring supply and demand into balance. 

If the primary market is over-supplied 

with cherries, grower prices decline 

substantially. 

The tart cherry sector uses an 

industry-wide storage program as a 

supplemental coordinating mechanism 

under the Federal marketing order. The 

primary purpose of the storage program 

is to warehouse supplies in large crop 

years in order to supplement supplies in 

short crop years. The storage approach 

is feasible because the increase in 

price—when moving from a large crop 

to a short crop year—more than offsets 

the costs for storage, interest, and 

handling of the stored cherries. 

The price that growers’ receive for 

their crop is largely determined by the 

total production volume and carryin 

inventories. The Federal marketing 

order permits the industry to exercise 

supply control provisions, which allow 

for the establishment of free and 

restricted percentages for the primary 

market, and a storage program. The 

establishment of restricted percentages 

impacts the production to be marketed 

in the primary market, while the storage 

program has an impact on the volume 

of unsold inventories. 

The volume control mechanism used 

by the cherry industry results in 

decreased shipments to primary 

markets. Without volume control the 

primary markets (domestic) would 

likely be over-supplied, resulting in 

lower grower prices. 

To assess the impact that volume 

control has on the prices growers 

receive for their product, an 

econometric model has been developed. 

The econometric model provides a way 

to see what impacts volume control may 

have on grower prices. The three 

districts in Michigan, along with the 

districts in Utah, New York, 

Washington, and Wisconsin are the 

restricted areas for this crop year and 

their combined total production is 202 

million pounds. A 28 percent restriction 

means 145 million pounds is available 

to be shipped to primary markets from 

these five states. Production levels of 3.9 

million pounds for Oregon, and 2.8 

million pounds for Pennsylvania (the 

unregulated areas in 2004–2005), result 

in an additional 6.7 million pounds 

available for primary market shipments. 

In addition, USDA requires a 10 

percent release from reserves as a 

market growth factor. This will result in 

an additional 18 million pounds being 

available for the primary market. The 

145 million pounds from Michigan, 

New York, Utah, Washington, and 

Wisconsin, the approximately 7 million 

pounds from the other producing states, 

the 18 million pound release, and the 25 

million pound carryin inventory gives a 

total of 195 million pounds being 

available for the primary markets. 

The econometric model is used to 

estimate the difference between grower 

prices with and without restrictions. 

With volume controls, grower prices are 

estimated to be approximately $0.08 

higher than without volume controls. 

The use of volume controls is 

estimated to have a positive impact on 

growers’ total revenues. With 

restriction, revenues are estimated to be 

$10.7 million higher than without 

restrictions. The without restrictions 

scenario assumes that all tart cherries 

produced would be delivered to 

processors for payments. This scenario 

is likely since the total available supply 

in this crop year is very similar to last 

year’s when there was a full release of 

the reserve pool, and handlers appear to 

be encouraging growers to deliver their 

entire crop this year. Although carryout 

inventories are 25 million pounds, only 

1 million pounds is in the reserve while 

24 million pounds are held in free 

inventories held by packers. 

It is concluded that the 28 percent 

volume control would not unduly 

burden producers and handlers, 

particularly smaller growers and 

handlers. The 28 percent restriction 

would be applied in Michigan, New 

York, Utah, Washington, and 

Wisconsin. The growers and handlers in 

the other two states covered under the 

marketing order will benefit from the 

market stability anticipated to result 

from this restriction. 

Recent grower prices have been as 

high as $0.44 per pound in the 2002–

2003 crop year. At current production 

and yield levels, the cost of production 

is reported to be $0.43 per pound. Thus, 

the estimated $0.43 per pound received 

by growers under the regulation 

scenario just covers the cost of 

production. Under the no regulation 

scenario, estimated grower prices would 

not cover the total cost of production. 

Lower yields and production result in 

higher costs of production. Overhead or 

fixed costs are spread over lower levels 

of production which results in higher 

costs of production per acre. Even in 

years when no production is harvested, 

growers face fixed costs of production 

and additional costs associated with 

maintaining the orchard for future years 

of production. The use of volume 

controls is believed to have little or no 

effect on consumer prices and will not 

result in fewer retail sales or sales to 

food service outlets. 

Without the use of volume controls, 

the industry could be expected to start 

to build large amounts of unwanted 

inventories. These inventories would 

have a depressing effect on grower 

prices. The econometric model shows 

for every 1 million-pound increase in 

carryin inventories, a decrease in grower 

prices of $0.0033 per pound occurs. The 

use of volume controls allows the 

industry to supply the primary markets 

while avoiding the disastrous results of 

over-supplying these markets. In 

addition, through volume control, the 

industry has an additional supply of 

cherries that can be used to develop 

secondary markets such as exports and 

the development of new products. The 

use of reserve cherries in the production 

shortened 2002–2003 crop year proved 

to be very useful and beneficial to 

growers and packers.

In discussing the possibility of 

marketing percentages for the 2004–

2005 crop year, the Board considered 

the following factors contained in the 

marketing policy: (1) The estimated total 

production of cherries; (2) the estimated 

size of the crop to be handled; (3) the 

expected general quality of such cherry 

production; (4) the expected carryover 

as of July 1 of canned and frozen 

cherries and other cherry products; (5) 

the expected demand conditions for 

cherries in different market segments; 

(6) supplies of competing commodities; 

(7) an analysis of economic factors 

having a bearing on the marketing of 

cherries; (8) the estimated tonnage held 

by handlers in primary or secondary 

inventory reserves; and (9) any 

estimated release of primary or 

secondary inventory reserve cherries 

during the crop year. 

The Board’s review of the factors 

resulted in the computation and 

announcement in September 2004 of the 

free and restricted percentages proposed 

to be established by this rule (72 percent 

free and 28 percent restricted). 

One alternative to this action would 

be not to have volume regulation this 

season. Board members stated that no 

volume regulation would be detrimental 

Federal Register / Vol. 69, No. 237 / Friday, December 10, 2004 / Proposed Rules 71749

to the tart cherry industry due to the 

size of the 2004–2005 crop. Returns to 

growers would not cover their costs of 

production for this season which might 

cause some to go out of business. 

As mentioned earlier, the 

Department’s ‘‘Guidelines for Fruit, 

Vegetable, and Specialty Crop 

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. The 

quantity available under this rule is 110 

percent of the quantity shipped in the 

prior three years. 

The free and restricted percentages 

established by this rule release the 

optimum supply and apply uniformly to 

all regulated handlers in the industry, 

regardless of size. There are no known 

additional costs incurred by small 

handlers that are not incurred by large 

handlers. The stabilizing effects of the 

percentages impact all handlers 

positively by helping them maintain 

and expand markets, despite seasonal 

supply fluctuations. Likewise, price 

stability positively impacts all 

producers by allowing them to better 

anticipate the revenues their tart 

cherries will generate. 

USDA has not identified any relevant 

Federal rules that duplicate, overlap, or 

conflict with this regulation.

While the benefits resulting from this 

rulemaking are difficult to quantify, the 

stabilizing effects of the volume 

regulations impact both small and large 

handlers positively by helping them 

maintain markets even though tart 

cherry supplies fluctuate widely from 

season to season. 

In compliance with Office of 

Management and Budget (OMB) 

regulations (5 CFR part 1320) which 

implement the Paperwork Reduction 

Act of 1995 (Pub. L. 104–13), the 

information collection and 

recordkeeping requirements under the 

tart cherry marketing order have been 

previously approved by OMB and 

assigned OMB Number 0581–0177. 

Reporting and recordkeeping burdens 

are necessary for compliance purposes 

and for developing statistical data for 

maintenance of the program. The forms 

require information which is readily 

available from handler records and 

which can be provided without data 

processing equipment or trained 

statistical staff. As with other, similar 

marketing order programs, reports and 

forms are periodically studied to reduce 

or eliminate duplicate information 

collection burdens by industry and 

public sector agencies. This rule would 

not change those requirements. 

A 30-day comment period is provided 

to allow interested persons to respond 

to this proposal. Thirty days is deemed 

appropriate because this rule would 

need to be in place as soon as possible 

since handlers are already shipping tart 

cherries from the 2004–2005 crop. 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 

1. The authority citation for 7 CFR 

part 930 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 930.254 is added to read as 

follows:

Note: This section will not appear in the 

annual Code of Federal Regulations.

§ 930.254 Final free and restricted 

percentages for the 2004–2005 crop year. 

The final percentages for tart cherries 

handled by handlers during the crop 

year beginning on July 1, 2004, which 

shall be free and restricted, respectively, 

are designated as follows: Free 

percentage, 72 percent and restricted 

percentage, 28 percent.

Dated: December 7, 2004. 

A.J. Yates, 

Administrator, Agricultural Marketing 

Service.

[FR Doc. 04–27161 Filed 12–9–04; 8:45 am] 

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service 

7 CFR Part 983 

[Docket No. FV04–983–2 PR] 

Pistachios Grown in California; 

Establishment of Continuing 

Assessment Rate and Reporting 

Requirements

AGENCY: Agricultural Marketing Service, 

USDA.

ACTION: Proposed rule.

SUMMARY: This rule would establish a 

continuing assessment rate for the 

Administrative Committee for 

Pistachios (Committee) for the 2004–05 

and subsequent fiscal periods of $0.0014 

per pound of pistachios received for 

processing and would establish 

reporting requirements under the 

California pistachio marketing order 

(order). The order regulates the handling 

of pistachios grown in California and is 

administered by the Committee. 

Authorization to assess pistachio 

handlers enables the Committee to incur 

expenses that are reasonable and 

necessary to administer the program. 

The fiscal period begins September 1 

and ends August 31. The assessment 

rate would remain in effect indefinitely 

unless modified, suspended, or 

terminated. Requiring handlers to file 

annual reports with the Committee 

would facilitate the Committee’s 

collection of handler assessments.

DATES: Comments must be received by 

February 8, 2005.

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments must be 

sent to the Docket Clerk, Marketing 

Order Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., STOP 

0237, Washington, DC 20250–0237;

Fax: (202) 720–8938; E-mail: 

moab.docketclerk@usda.gov; or Internet: 

http://www.regulations.gov. Comments 

should reference the docket number and 

the date and page number of this issue 

of the Federal Register and will be 

available for public inspection in the 

Office of the Docket Clerk during regular 

business hours, or can be viewed at: 

http://www.ams.usda.gov/fv/moab.html.

FOR FURTHER INFORMATION CONTACT: Toni 

Sasselli, Program Analyst, or Rose 

Aguayo, Marketing Specialist, California 

Marketing Field Office, Fruit and 

Vegetable Programs, AMS, USDA, 2202 

Monterey Street, suite 102B, Fresno, 

California 93721; telephone: (559) 487–

5901; Fax (559) 487–5906; or George 

Kelhart, Technical Advisor, Marketing 

Order Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, 1400 

Independence Avenue, SW., STOP 

0237, Washington, DC 20250–0237; 

telephone: (202) 720–2491, Fax: (202) 

720–8938.

Small businesses may request 

information on complying with this 

regulation by contacting Jay Guerber, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue SW., STOP 0237, Washington, 

DC 20250–0237; telephone: (202) 720–

2491, Fax: (202) 720–8938, or E-mail: 

Jay.Guerber@usda.gov.