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<p>Animal and Plant Health Inspection Service
</p>
<p>Economic Analysis in Support of Certification
</p>
<p>Proposed Rule: Removal of Varietal Restrictions on Apples (<i>Malus domestica</i>) from Japan</p>
<p>(7 CFR 319.56-27 and 7 CFR 305-2(i))</p>
<p>Docket No. APHIS-2009-0020
</p>
<p>5/7/2009</p>
<p class="default_Text">When an agency issues a rulemaking proposal, the Regulatory Flexibility Act (RFA) requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” which will “describe the impact of the proposed rule on small entities” </p>
<p class="default_Text">(5 U.S.C. 603(a)).  Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the proposed rulemaking is not expected to have a significant economic impact on a substantial number of small entities.</p>
<p class="default_Text">As specified by § 605 of the RFA, the following economic analysis provides the basis for certification of the proposed rule to allow importation of all varieties of <i>Malus domestica</i> apples from Japan.</p>
<p class="default_Text"><u>Reasons why action by the agency is being considered
</u></p>
<p class="default_Text">APHIS received a request from the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) to allow the importation of all <i>Malus domestica</i> apple varieties into the United States under the same conditions as it currently exist for Fuji variety apples.  As part of an evaluation of Japan's request, APHIS prepared a commodity import evaluation document that included a  review of data collected over 14 years, from 1994 to 2008, regarding pest interception on Fuji apples from Japan and an evaluation of the risks associated with the importation of <i>Malus domestica</i> apples of various varieties into the United States
.  The data indicated that no quarantine pests on commercial cargo of Fuji apples have been intercepted/reported/identified at U.S. ports of entry from 1994 to 2008, and no pests of concern have been reported by the pre-clearance program in Japan.  APHIS has concluded that it is highly unlikely that other <i>Malus domestica</i> apple varieties would have a pest host status significantly different from that of Fuji variety apples given that the varieties are of the same species.</p>
<p class="default_Text"><u>Description and estimate of the number of small entities affected</u></p>
<p class="default_Text">This proposed rule may affect domestic apple growers, especially those who engage in the production of Tsugaru, Jonagold, Orin and other<i> Malus domestica</i> varieties,
 as well as the importers, wholesalers and distributors of all varieties of <i>Malus domestica</i> apples.  APHIS does not have information on U.S. production of these apple varieties.  Nonetheless, the action is expected to have minimal economic effect on U.S. entities, small or large, given the relatively small impact of current Fuji apple imports from Japan.  Any increase in the quantity of apples from Japan because of importation of these other, more minor <i>Malus domestica</i> varieties is expected to be insignificant.</p>
<p class="default_Text">According to the Small Business Administration (SBA) standard, a business engaged in apple production is considered to be a small entity if its annual receipts are not more than $750,000.
  Table 1 summarizes 2007 Census of Agriculture data for apple growers.
  That year there were a total of 25,591 U.S. apple growers.  Average annual sales per apple grower are estimated to have been about $102,000 in 2007.
  Clearly, apple growers are predominantly small entities according to the SBA standard of $750,000.  The top-10 producing States —Washington, California, Pennsylvania, Michigan, New York, Oregon, Ohio, Wisconsin, New Mexico, and North Carolina —had 58% of all apple growers and 84% of U.S. apple acreage.  </p>
<p class="default_Text">Table 1. Number of apple farms and acres, top 10 States</p>
<table><tbody><tr>	<td><p class="default_Text">State</p>
</td>	<td><p class="default_Text">Number of apple growers and percentage share of U.S. total</p>
</td>	<td><p class="default_Text">Total acres and percentage share of U.S. total</p>
</td></tr>
<tr>	<td><p class="default_Text">Washington</p>
</td>	<td><p class="default_Text">3,052 (11.9%)</p>
</td>	<td><p class="default_Text">165,215 (41.5%)</p>
</td></tr>
<tr>	<td><p class="default_Text">California</p>
</td>	<td><p class="default_Text">2,074 (8.1%)</p>
</td>	<td><p class="default_Text">22,184 (5.5%)</p>
</td></tr>
<tr>	<td><p class="default_Text">Pennsylvania</p>
</td>	<td><p class="default_Text">1,886 (7.4%)</p>
</td>	<td><p class="default_Text">23,552 (5.9%)</p>
</td></tr>
<tr>	<td><p class="default_Text">Michigan</p>
</td>	<td><p class="default_Text">1,772 (6.9%)</p>
</td>	<td><p class="default_Text">44,189 (11.1%)</p>
</td></tr>
<tr>	<td><p class="default_Text">New York</p>
</td>	<td><p class="default_Text">1,350 (5.3%)</p>
</td>	<td><p class="default_Text">49,966 (12.6%)</p>
</td></tr>
<tr>	<td><p class="default_Text">Oregon</p>
</td>	<td><p class="default_Text">1,330 (5.2%)</p>
</td>	<td><p class="default_Text">6,234 (1.6%)</p>
</td></tr>
<tr>	<td><p class="default_Text">Ohio</p>
</td>	<td><p class="default_Text">1,000 (3.9%)</p>
</td>	<td><p class="default_Text">5.970 (1.5%)</p>
</td></tr>
<tr>	<td><p class="default_Text">Wisconsin</p>
</td>	<td><p class="default_Text">935 (3.7%)</p>
</td>	<td><p class="default_Text">6,406 (1.6%)</p>
</td></tr>
<tr>	<td><p class="default_Text">New Mexico</p>
</td>	<td><p class="default_Text">807 (3.2%)</p>
</td>	<td><p class="default_Text">2,057 (0.5%)</p>
</td></tr>
<tr>	<td><p class="default_Text">North Carolina</p>
</td>	<td><p class="default_Text">673 (2.6%)</p>
</td>	<td><p class="default_Text">7,583 (1.9%)</p>
</td></tr>
<tr>	<td><p class="default_Text">Top 10 State total</p>
</td>	<td><p class="default_Text">14,879 (58.1%)</p>
</td>	<td><p class="default_Text">333,356 (83.7%)</p>
</td></tr>
<tr>	<td><p class="default_Text">United States total</p>
</td>	<td><p class="default_Text">25,591 (100%)</p>
</td>	<td><p class="default_Text">398,770 (100%)</p>
</td></tr>
</tbody></table>
<p class="default_Text">Source: USDA-NASS 2007Census data, Table 32, Fruits and nuts.</p>
<p class="default_Text">Table 2 summarizes the 2007 Census of Agriculture data for apple growers by acreage.  According to the data, 36% of apple growers had orchards of less than 1 acre, and the vast majority of apple growers, 99%, had orchards of less than 250 acres, indicating that the majority of apple growers engage in relatively small-scale operations.</p>
<p class="default_Text">Table 2. Number of U.S. apple farms by acreage
</p>
<table><tbody><tr>	<td><p>Acres</p>
</td>	<td><p> Number of farms </p>
</td>	<td><p> Percentage share</p>
</td>	<td><p> Cumulative percentage </p>
</td>	<td><p> Acres </p>
</td>	<td><p> Percentage share </p>
</td>	<td><p> Cumulative percentage </p>
</td></tr>
<tr>	<td><p>0.1 to 0.9</p>
</td>	<td><p>9,270</p>
</td>	<td><p>36.2%</p>
</td>	<td><p>36.2%</p>
</td>	<td><p>3,000 </p>
</td>	<td><p>0.8%</p>
</td>	<td><p>0.8%</p>
</td></tr>
<tr>	<td><p>1.0 to 4.9</p>
</td>	<td><p>9,059 </p>
</td>	<td><p>35.4%</p>
</td>	<td><p>71.6%</p>
</td>	<td><p>18,091 </p>
</td>	<td><p>4.5%</p>
</td>	<td><p>5.3%</p>
</td></tr>
<tr>	<td><p>5.0 to 14.9 </p>
</td>	<td><p>3,366 </p>
</td>	<td><p>13.2%</p>
</td>	<td><p>84.8%</p>
</td>	<td><p>27,070 </p>
</td>	<td><p>6.8%</p>
</td>	<td><p>12.1%</p>
</td></tr>
<tr>	<td><p>15.0 to 24.9</p>
</td>	<td><p>1,131</p>
</td>	<td><p>4.4%</p>
</td>	<td><p>89.2%</p>
</td>	<td><p>21,154 </p>
</td>	<td><p>5.3%</p>
</td>	<td><p>17.4%</p>
</td></tr>
<tr>	<td><p>25.0 to 49.9</p>
</td>	<td><p>1,168 </p>
</td>	<td><p>4.6%</p>
</td>	<td><p>93.8%</p>
</td>	<td><p>40,102 </p>
</td>	<td><p>10.1%</p>
</td>	<td><p>27.4%</p>
</td></tr>
<tr>	<td><p>50.0 to 99.9</p>
</td>	<td><p>791</p>
</td>	<td><p>3.1%</p>
</td>	<td><p>96.9%</p>
</td>	<td><p>54,158 </p>
</td>	<td><p>13.6%</p>
</td>	<td><p>41.0%</p>
</td></tr>
<tr>	<td><p>100.0 to 249.9</p>
</td>	<td><p>561</p>
</td>	<td><p>2.2%</p>
</td>	<td><p>99.0%</p>
</td>	<td><p>83,996 </p>
</td>	<td><p>21.1%</p>
</td>	<td><p>62.1%</p>
</td></tr>
<tr>	<td><p>250.0 to 499.9</p>
</td>	<td><p>152</p>
</td>	<td><p>0.6%</p>
</td>	<td><p>99.6%</p>
</td>	<td><p>51,422 </p>
</td>	<td><p>12.9%</p>
</td>	<td><p>75.0%</p>
</td></tr>
<tr>	<td><p>500.0 to 749.9 </p>
</td>	<td><p>52</p>
</td>	<td><p>0.2%</p>
</td>	<td><p>99.8%</p>
</td>	<td><p>31,107 </p>
</td>	<td><p>7.8%</p>
</td>	<td><p>82.8%</p>
</td></tr>
<tr>	<td><p>750 .0 to 999.9</p>
</td>	<td><p>20</p>
</td>	<td><p>0.1%</p>
</td>	<td><p>99.9%</p>
</td>	<td><p>17,408</p>
</td>	<td><p>4.4%</p>
</td>	<td><p>87.1%</p>
</td></tr>
<tr>	<td><p>1,000 acres or more</p>
</td>	<td><p>21</p>
</td>	<td><p>0.1%</p>
</td>	<td><p>100.0%</p>
</td>	<td><p>51,263</p>
</td>	<td><p>12.9%</p>
</td>	<td><p>100.0%</p>
</td></tr>
<tr>	<td><p>Total</p>
</td>	<td><p>25,591 </p>
</td>	<td><p>100.0%</p>
</td>	<td><p></p>
</td>	<td><p>398,771</p>
</td>	<td><p>100.0%</p>
</td>	<td><p></p>
</td></tr>
</tbody></table>
<p class="default_Text">Source: USDA-NASS 2007 Census data, Table 35 Specified fruits and nuts by acres.
</p>
<p class="default_Text">Table 3 summarizes the 2007 Census of Agriculture data for apple growers by market value of agricultural products sold.  Over 94% of apple farms had sales of less than $500,000.  Table 3 clearly shows that apple growers are predominantly small entities based on the SBA standard of $750,000.  </p>
<p class="default_Text">Table 3. Distribution of apple producers by the market value of apples sold: 2007
</p>
<table><tbody><tr>	<td><p>Market value of  apples sold</p>
</td>	<td><p> Number of Farms </p>
</td>	<td><p> Percentage share</p>
</td>	<td><p> Cumulative percentage </p>
</td>	<td><p> Acres </p>
</td>	<td><p> Percentage share </p>
</td>	<td><p> Cumulative percentage </p>
</td></tr>
<tr>	<td><p>Less than $1,000</p>
</td>	<td><p>3,858</p>
</td>	<td><p>15.1%</p>
</td>	<td><p>15.1%</p>
</td>	<td><p>8,012</p>
</td>	<td><p>2.0%</p>
</td>	<td><p>2.0%</p>
</td></tr>
<tr>	<td><p>$1,000 to $2,499</p>
</td>	<td><p>2033</p>
</td>	<td><p>7.9%</p>
</td>	<td><p>23.0%</p>
</td>	<td><p>2,592</p>
</td>	<td><p>0.6%</p>
</td>	<td><p>2.7%</p>
</td></tr>
<tr>	<td><p>$2,500 to $4,999</p>
</td>	<td><p>2686</p>
</td>	<td><p>10.5%</p>
</td>	<td><p>33.5%</p>
</td>	<td><p>3,384</p>
</td>	<td><p>0.8%</p>
</td>	<td><p>3.5%</p>
</td></tr>
<tr>	<td><p>$5,000 to $9,999</p>
</td>	<td><p>3511</p>
</td>	<td><p>13.7%</p>
</td>	<td><p>47.2%</p>
</td>	<td><p>5,479</p>
</td>	<td><p>1.4%</p>
</td>	<td><p>4.9%</p>
</td></tr>
<tr>	<td><p>$10,000 to $24,999</p>
</td>	<td><p>4542</p>
</td>	<td><p>17.7%</p>
</td>	<td><p>65.0%</p>
</td>	<td><p>13,178</p>
</td>	<td><p>3.3%</p>
</td>	<td><p>8.2%</p>
</td></tr>
<tr>	<td><p>$25,000 to $49,999</p>
</td>	<td><p>2727</p>
</td>	<td><p>10.7%</p>
</td>	<td><p>75.6%</p>
</td>	<td><p>15,484</p>
</td>	<td><p>3.9%</p>
</td>	<td><p>12.1%</p>
</td></tr>
<tr>	<td><p>$50,0000 to $99,999</p>
</td>	<td><p>1,862</p>
</td>	<td><p>7.3%</p>
</td>	<td><p>82.9%</p>
</td>	<td><p>20,603</p>
</td>	<td><p>5.2%</p>
</td>	<td><p>17.2%</p>
</td></tr>
<tr>	<td><p>$100,0000 to $249,9999</p>
</td>	<td><p>1,858</p>
</td>	<td><p>7.3%</p>
</td>	<td><p>90.2%</p>
</td>	<td><p>41,098</p>
</td>	<td><p>10.3%</p>
</td>	<td><p>27.5%</p>
</td></tr>
<tr>	<td><p>$250,0000 to $499,999</p>
</td>	<td><p>1,047</p>
</td>	<td><p>4.1%</p>
</td>	<td><p>94.3%</p>
</td>	<td><p>44,500</p>
</td>	<td><p>11.2%</p>
</td>	<td><p>38.7%</p>
</td></tr>
<tr>	<td><p>$500,000 to $999,999</p>
</td>	<td><p>689</p>
</td>	<td><p>2.7%</p>
</td>	<td><p>97.0%</p>
</td>	<td><p>50,595</p>
</td>	<td><p>12.7%</p>
</td>	<td><p>51.4%</p>
</td></tr>
<tr>	<td><p>$1,000,000 or more</p>
</td>	<td><p>778</p>
</td>	<td><p>3.0%</p>
</td>	<td><p>100.0%</p>
</td>	<td><p>193,847</p>
</td>	<td><p>48.6%</p>
</td>	<td><p>100.0%</p>
</td></tr>
<tr>	<td><p>Total</p>
</td>	<td><p>25,591</p>
</td>	<td><p>100.0%</p>
</td>	<td><p></p>
</td>	<td><p>398,772</p>
</td>	<td><p>100.0%</p>
</td>	<td><p></p>
</td></tr>
</tbody></table>
<p class="default_Text">Source: USDA-NASS 2007 Census data, Table 59, Summary by market value of agricultural products sold.
</p>
<p class="default_Text">In the case of fresh fruit merchant wholesalers (NAICS 424480), establishments with not more than 100 employees are considered small by the SBA standard.  In 2002, there were 5,376 fresh fruit and vegetable merchant wholesalers in the United States with a total of 110,578 paid employees, or on average, 21 paid employees per establishment.  It is likely that domestic fruit merchant wholesalers that may be affected by the rule are predominantly, if not entirely, small entities.</p>
<p class="default_Text"><u>Japanese apple production and Japanese and U.S. trade statistics
</u></p>
<p class="default_Text">Table 4 summarizes 2007 apple production in Japan.  Fuji, the only variety of apple currently allowed to be imported from Japan, led all varieties at 468,400 metric tons (MT), or about 56% of Japan’s apple production.  Tsugaru, the second largest variety, accounted for 99,900 MT, or 12% of apple production in Japan.  </p>
<p class="default_Text">Table 4. Japanese Production by Varieties (in metric tons): 2007</p>
<table><tbody><tr>	<td><p class="default_Text">Variety</p>
</td>	<td><p class="default_Text">Production</p>
</td>	<td><p class="default_Text">Share</p>
</td></tr>
<tr>	<td><p class="default_Text">Fuji</p>
</td>	<td><p class="default_Text">468,400</p>
</td>	<td><p class="default_Text">56%</p>
</td></tr>
<tr>	<td><p class="default_Text">Tsugaru</p>
</td>	<td><p class="default_Text">99,900</p>
</td>	<td><p class="default_Text">12%</p>
</td></tr>
<tr>	<td><p class="default_Text">Jonagold</p>
</td>	<td><p class="default_Text">74,600</p>
</td>	<td><p class="default_Text">9%</p>
</td></tr>
<tr>	<td><p class="default_Text">Orin</p>
</td>	<td><p class="default_Text">70,900</p>
</td>	<td><p class="default_Text">8%</p>
</td></tr>
<tr>	<td><p class="default_Text">Others1</p>
</td>	<td><p class="default_Text">126,300</p>
</td>	<td><p class="default_Text">15%</p>
</td></tr>
<tr>	<td><p class="default_Text">Total</p>
</td>	<td><p class="default_Text">840,100</p>
</td>	<td><p class="default_Text">100%</p>
</td></tr>
</tbody></table>
<p class="default_Text">Source: Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) Statistics, May 30, 2008 http://www.maff.go.jp/toukei/sokuhou/data/ringo-syukaku2007/ringo-syukaku2007.pdf.</p>
<p class="default_Text">1 Others include Mutsu, Indo, Sekai-ichi, Jonasan, Hokuto, Star King Delicious, Kinsei, Chiaki.</p>
<p class="default_Text">Table 5 summarizes the Japanese export of fresh apples for 2006-2008.  Taiwan is by far the single largest importer of fresh apples from Japan.  The U.S. share of Japanese fresh apple exports was only 0.3% by value in 2008 ($221,015) and totaled 60,500 KG.</p>
<p class="default_Text">Table 5. Export of Fresh Apples from Japan (in US dollars and KG) </p>
<table><tbody><tr>	<td><p></p>
</td>	<td><p>2006</p>
</td>	<td><p></p>
</td>	<td><p>2007</p>
</td>	<td><p></p>
</td>	<td><p>2008</p>
</td>	<td><p></p>
</td>	<td><p>2008</p>
</td></tr>
<tr>	<td><p>Country</p>
</td>	<td><p>US$</p>
</td>	<td><p>KG</p>
</td>	<td><p>US$</p>
</td>	<td><p>KG</p>
</td>	<td><p>US$</p>
</td>	<td><p>KG</p>
</td>	<td><p>US$ %</p>
</td></tr>
<tr>	<td><p>Taiwan</p>
</td>	<td><p>45,196,627 </p>
</td>	<td><p>  17,869,272 </p>
</td>	<td><p>  62,862,587 </p>
</td>	<td><p>    24,360,021 </p>
</td>	<td><p>  64,338,250 </p>
</td>	<td><p>  23,354,845 </p>
</td>	<td><p>88.0%</p>
</td></tr>
<tr>	<td><p>Hong Kong</p>
</td>	<td><p>     1,178,237 </p>
</td>	<td><p>      312,594 </p>
</td>	<td><p>    2,152,045 </p>
</td>	<td><p>       505,103 </p>
</td>	<td><p>    3,336,203 </p>
</td>	<td><p>       716,755 </p>
</td>	<td><p>4.6%</p>
</td></tr>
<tr>	<td><p>China</p>
</td>	<td><p>      747,129 </p>
</td>	<td><p>      156,837 </p>
</td>	<td><p>    1,676,516 </p>
</td>	<td><p>        325,523 </p>
</td>	<td><p>    2,213,798 </p>
</td>	<td><p>       389,898 </p>
</td>	<td><p>3.0%</p>
</td></tr>
<tr>	<td><p>Thailand</p>
</td>	<td><p>       841,168 </p>
</td>	<td><p>       202,148 </p>
</td>	<td><p>    1,061,420 </p>
</td>	<td><p>        245,104 </p>
</td>	<td><p>    1,483,386 </p>
</td>	<td><p>       306,069 </p>
</td>	<td><p>2.0%</p>
</td></tr>
<tr>	<td><p>Indonesia</p>
</td>	<td><p>        257,023 </p>
</td>	<td><p>         63,345 </p>
</td>	<td><p>       239,441 </p>
</td>	<td><p>          56,020 </p>
</td>	<td><p>       402,322 </p>
</td>	<td><p>         80,925 </p>
</td>	<td><p>0.6%</p>
</td></tr>
<tr>	<td><p>Russia</p>
</td>	<td><p>          28,500 </p>
</td>	<td><p>           6,638 </p>
</td>	<td><p>       261,626 </p>
</td>	<td><p>          52,110 </p>
</td>	<td><p>       371,089 </p>
</td>	<td><p>         68,724 </p>
</td>	<td><p>0.5%</p>
</td></tr>
<tr>	<td><p>Singapore</p>
</td>	<td><p>      163,019 </p>
</td>	<td><p>         53,613 </p>
</td>	<td><p>       230,053 </p>
</td>	<td><p>          67,266 </p>
</td>	<td><p>       318,986 </p>
</td>	<td><p>         85,732 </p>
</td>	<td><p>0.4%</p>
</td></tr>
<tr>	<td><p>United States</p>
</td>	<td><p>        206,334 </p>
</td>	<td><p>         60,500 </p>
</td>	<td><p>       208,302 </p>
</td>	<td><p>          60,500 </p>
</td>	<td><p>       221,015 </p>
</td>	<td><p>         60,500 </p>
</td>	<td><p>0.3%</p>
</td></tr>
<tr>	<td><p>United Arab Emirates</p>
</td>	<td><p>  -   </p>
</td>	<td><p>              -   </p>
</td>	<td><p>          5,072 </p>
</td>	<td><p>           316 </p>
</td>	<td><p>      159,164 </p>
</td>	<td><p>       30,476 </p>
</td>	<td><p>0.2%</p>
</td></tr>
<tr>	<td><p>French Oceania</p>
</td>	<td><p>        42,296 </p>
</td>	<td><p>        13,100 </p>
</td>	<td><p>        75,070 </p>
</td>	<td><p>         19,300 </p>
</td>	<td><p>        78,309 </p>
</td>	<td><p>        21,420 </p>
</td>	<td><p>0.1%</p>
</td></tr>
<tr>	<td><p>Others</p>
</td>	<td><p>107,010</p>
</td>	<td><p>22,839</p>
</td>	<td><p>210,929</p>
</td>	<td><p>36,624</p>
</td>	<td><p>187,080</p>
</td>	<td><p>45,538</p>
</td>	<td><p>0.3%</p>
</td></tr>
<tr>	<td><p>World Total</p>
</td>	<td><p>48,767,342</p>
</td>	<td><p>18,760,886</p>
</td>	<td><p>68,983,063</p>
</td>	<td><p>25,727,887</p>
</td>	<td><p>73,109,600</p>
</td>	<td><p>25,160,882</p>
</td>	<td><p>100%</p>
</td></tr>
</tbody></table>
<p class="default_Text">Source: Global Trade Atlas annual data, commodity 080810.</p>
<p class="default_Text">APHIS does not have an access to the U.S. production data by apple varieties that would be allowed to be imported from Japan, such as Tsugaru, Jonagold, and Orin.  However, if such production takes place in the United States, it is assumed to be significantly small compared to more widely marketed varieties, such as Red Delicious, Gala, Golden Delicious, Granny Smith, Fuji, McIntosh, Rome, Empire, York, and Jonathan.  We welcome information that the public may provide on U.S. production levels, numbers of producers, and value of sales for varieties such as Tsugaru, Jonagold, Orin, Mutsu, Indo, Sekai-ichi, Jonasan, Hokuto, Star King Delicious, Kinsei, Chiaki with which the apples imported from Japan will directly compete.
</p>
<p class="default_Text">Based on the USDA-NASS 2008 non-citrus fruits and nuts data, total U.S. fresh apple production was valued at $2.3 billion, with an average wholesale price per pound of $0.383.
  In contrast, the average price of the apple varieties that would be allowed to be imported from Japan is expected to be substantially higher.  For example, in 2007, the average wholesale price of these Japanese apple varieties sold in Japan was $0.98 per pound, i.e. two-and-a-half times higher than the average U.S. price.
</p>
<p class="default_Text">Table 6 shows the average prices of fresh apples exported from Japan.  In 2008, the average price of fresh apples exported to the United States was $1.66 per pound, i.e. more than four times higher than the U.S. wholesale price for domestically-produced apples.  The wide price differential between apples grown in Japan and in the U.S. suggests that the Japanese apples are sold as specialty products to a very limited market segments in the U.S. and would not be a close substitute for most U.S.-grown apples.</p>
<p class="default_Text">Table 6. Average price of fresh apple exports from Japan, by importing country, 2006–2008, dollars per kilogram and dollars per pound</p>
<table><tbody><tr>	<td><p></p>
</td>	<td><p>2006</p>
</td>	<td><p></p>
</td>	<td><p>2007</p>
</td>	<td><p></p>
</td>	<td><p>2008</p>
</td>	<td><p></p>
</td></tr>
<tr>	<td><p>Country</p>
</td>	<td><p>Per KG</p>
</td>	<td><p>Per pound</p>
</td>	<td><p>Per KG</p>
</td>	<td><p>Per pound</p>
</td>	<td><p>Per KG</p>
</td>	<td><p>Per pound</p>
</td></tr>
<tr>	<td><p>Taiwan</p>
</td>	<td><p>$2.53</p>
</td>	<td><p>$1.15</p>
</td>	<td><p>$2.58</p>
</td>	<td><p>$1.17</p>
</td>	<td><p>$2.75</p>
</td>	<td><p>$1.25</p>
</td></tr>
<tr>	<td><p>Hong Kong</p>
</td>	<td><p>3.77</p>
</td>	<td><p>1.71</p>
</td>	<td><p>4.26</p>
</td>	<td><p>1.93</p>
</td>	<td><p>4.65</p>
</td>	<td><p>2.11</p>
</td></tr>
<tr>	<td><p>China</p>
</td>	<td><p>4.76</p>
</td>	<td><p>2.16</p>
</td>	<td><p>5.15</p>
</td>	<td><p>2.34</p>
</td>	<td><p>5.68</p>
</td>	<td><p>2.58</p>
</td></tr>
<tr>	<td><p>Thailand</p>
</td>	<td><p>4.16</p>
</td>	<td><p>1.89</p>
</td>	<td><p>4.33</p>
</td>	<td><p>1.96</p>
</td>	<td><p>4.85</p>
</td>	<td><p>2.20</p>
</td></tr>
<tr>	<td><p>Indonesia</p>
</td>	<td><p>4.06</p>
</td>	<td><p>1.84</p>
</td>	<td><p>4.27</p>
</td>	<td><p>1.94</p>
</td>	<td><p>4.97</p>
</td>	<td><p>2.26</p>
</td></tr>
<tr>	<td><p>Russia</p>
</td>	<td><p>4.29</p>
</td>	<td><p>1.95</p>
</td>	<td><p>5.02</p>
</td>	<td><p>2.28</p>
</td>	<td><p>5.40</p>
</td>	<td><p>2.45</p>
</td></tr>
<tr>	<td><p>Singapore</p>
</td>	<td><p>3.04</p>
</td>	<td><p>1.38</p>
</td>	<td><p>3.42</p>
</td>	<td><p>1.55</p>
</td>	<td><p>3.72</p>
</td>	<td><p>1.69</p>
</td></tr>
<tr>	<td><p>United States</p>
</td>	<td><p>3.41</p>
</td>	<td><p>1.55</p>
</td>	<td><p>3.44 </p>
</td>	<td><p>1.56 </p>
</td>	<td><p>3.65 </p>
</td>	<td><p>1.66 </p>
</td></tr>
<tr>	<td><p>World total</p>
</td>	<td><p>2.60</p>
</td>	<td><p>1.18</p>
</td>	<td><p>2.68</p>
</td>	<td><p>1.22</p>
</td>	<td><p>2.91</p>
</td>	<td><p>1.32</p>
</td></tr>
</tbody></table>
<p class="default_Text">Source: Global Trade Atlas annual data, commodity 080810.</p>
<p class="default_Text">The United States is a net exporter of fresh apples.  In 2008, it exported 701,000 MT of fresh apples to 87 countries, valued at $737 million, and imported 165,000 MT of fresh apples from 9 countries, valued at $141 million, resulting in net exports of $596 million.
  Tables 7 and 8 list the countries from which the United States imported fresh apples from 2006 to 2008.  In terms of both value and quantity, Chile consistently supplied the largest amount of fresh apples over the last three years.  Other major sources of fresh apples are New Zealand and Canada.  Japan’s share of U.S. apple imports, by quantity, was only 0.1% in 2008.</p>
<p class="default_Text">Table 7. Quantity of U.S. fresh apple imports, by exporting country, 2006-2008, kilograms</p>
<table><tbody><tr>	<td><p></p>
</td>	<td><p>2006</p>
</td>	<td><p></p>
</td>	<td><p>2007</p>
</td>	<td><p></p>
</td>	<td><p>2008</p>
</td>	<td><p></p>
</td>	<td><p>2008</p>
</td></tr>
<tr>	<td><p>Country</p>
</td>	<td><p>US$</p>
</td>	<td><p>KG</p>
</td>	<td><p>US$</p>
</td>	<td><p>KG</p>
</td>	<td><p>US$</p>
</td>	<td><p>KG</p>
</td>	<td><p>KG  %</p>
</td></tr>
<tr>	<td><p>Chile</p>
</td>	<td><p>75,764,915 </p>
</td>	<td><p>        82,618,856 </p>
</td>	<td><p>      99,328,264 </p>
</td>	<td><p>    123,520,738 </p>
</td>	<td><p>      83,329,174 </p>
</td>	<td><p>      93,667,670 </p>
</td>	<td><p>56.7%</p>
</td></tr>
<tr>	<td><p>New Zealand</p>
</td>	<td><p>        31,023,986 </p>
</td>	<td><p>        37,416,519 </p>
</td>	<td><p>        39,320,338 </p>
</td>	<td><p>        47,209,643 </p>
</td>	<td><p>        27,851,862 </p>
</td>	<td><p>        32,801,688 </p>
</td>	<td><p>19.8%</p>
</td></tr>
<tr>	<td><p>Canada</p>
</td>	<td><p>        26,878,098 </p>
</td>	<td><p>        34,892,849 </p>
</td>	<td><p>        26,424,534 </p>
</td>	<td><p>        31,062,309 </p>
</td>	<td><p>        26,853,738 </p>
</td>	<td><p>        36,035,546 </p>
</td>	<td><p>21.8%</p>
</td></tr>
<tr>	<td><p>Argentina</p>
</td>	<td><p>         1,323,108 </p>
</td>	<td><p>         1,511,723 </p>
</td>	<td><p>         4,479,852 </p>
</td>	<td><p>         4,423,771 </p>
</td>	<td><p>         2,088,117 </p>
</td>	<td><p>         2,243,108 </p>
</td>	<td><p>1.4%</p>
</td></tr>
<tr>	<td><p>Brazil</p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>            214,715 </p>
</td>	<td><p>            226,308 </p>
</td>	<td><p>            384,748 </p>
</td>	<td><p>            358,974 </p>
</td>	<td><p>0.2%</p>
</td></tr>
<tr>	<td><p>Japan</p>
</td>	<td><p>            210,581 </p>
</td>	<td><p>              60,500 </p>
</td>	<td><p>            210,129 </p>
</td>	<td><p>              60,520 </p>
</td>	<td><p>            218,093 </p>
</td>	<td><p>            144,036 </p>
</td>	<td><p>0.1%</p>
</td></tr>
<tr>	<td><p>South Africa</p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>              33,333 </p>
</td>	<td><p>              11,382 </p>
</td>	<td><p>              67,600 </p>
</td>	<td><p>              21,840 </p>
</td>	<td><p>0.0%</p>
</td></tr>
<tr>	<td><p>Vietnam</p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                8,199 </p>
</td>	<td><p>                9,008 </p>
</td>	<td><p>              10,876 </p>
</td>	<td><p>                5,689 </p>
</td>	<td><p>0.0%</p>
</td></tr>
<tr>	<td><p>Thailand</p>
</td>	<td><p>              17,543 </p>
</td>	<td><p>              13,530 </p>
</td>	<td><p>              36,128 </p>
</td>	<td><p>              27,002 </p>
</td>	<td><p>                5,712 </p>
</td>	<td><p>                3,889 </p>
</td>	<td><p>0.0%</p>
</td></tr>
<tr>	<td><p>St. Vincent & the Grenadines</p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                5,975 </p>
</td>	<td><p>                4,345 </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>-</p>
</td></tr>
<tr>	<td><p>Philippines</p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                6,930 </p>
</td>	<td><p>                4,948 </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>-</p>
</td></tr>
<tr>	<td><p>China</p>
</td>	<td><p>              80,597 </p>
</td>	<td><p>            171,880 </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>-</p>
</td></tr>
<tr>	<td><p>Guatemala</p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>              20,496 </p>
</td>	<td><p>                  161 </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>-</p>
</td></tr>
<tr>	<td><p>India</p>
</td>	<td><p>                6,855 </p>
</td>	<td><p>                2,850 </p>
</td>	<td><p>                4,826 </p>
</td>	<td><p>                2,000 </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>                     -   </p>
</td>	<td><p>-</p>
</td></tr>
<tr>	<td><p>World Total</p>
</td>	<td><p>      135,305,683 </p>
</td>	<td><p>      156,688,707 </p>
</td>	<td><p>      170,093,719 </p>
</td>	<td><p>      206,562,135 </p>
</td>	<td><p>      140,809,920 </p>
</td>	<td><p>      165,282,440 </p>
</td>	<td><p>100%</p>
</td></tr>
</tbody></table>
<p class="default_Text">Source: Global Trade Atlas annual data, commodity 080810.</p>
<p class="default_Text">Table 8. Average price of fresh apple imports by the U.S., by exporting country, 2006–2008, dollars per kilogram and dollars per pound</p>
<table><tbody><tr>	<td><p></p>
</td>	<td><p>2006</p>
</td>	<td><p></p>
</td>	<td><p>2007</p>
</td>	<td><p></p>
</td>	<td><p>2008</p>
</td>	<td><p></p>
</td></tr>
<tr>	<td><p>Country</p>
</td>	<td><p>Per KG</p>
</td>	<td><p>Per pound</p>
</td>	<td><p>Per KG</p>
</td>	<td><p>Per pound</p>
</td>	<td><p>Per KG</p>
</td>	<td><p>Per pound</p>
</td></tr>
<tr>	<td><p>Chile</p>
</td>	<td><p>       $ 0.92 </p>
</td>	<td><p>       $0.42 </p>
</td>	<td><p>       $0.80 </p>
</td>	<td><p>        $0.36 </p>
</td>	<td><p>        $0.89 </p>
</td>	<td><p>        $0.40 </p>
</td></tr>
<tr>	<td><p>New Zealand</p>
</td>	<td><p>        0.83 </p>
</td>	<td><p>        0.38 </p>
</td>	<td><p>        0.83 </p>
</td>	<td><p>        0.38 </p>
</td>	<td><p>        0.85 </p>
</td>	<td><p>        0.39 </p>
</td></tr>
<tr>	<td><p>Canada</p>
</td>	<td><p>        0.77 </p>
</td>	<td><p>        0.35 </p>
</td>	<td><p>        0.85 </p>
</td>	<td><p>        0.39 </p>
</td>	<td><p>        0.75 </p>
</td>	<td><p>        0.34 </p>
</td></tr>
<tr>	<td><p>Argentina</p>
</td>	<td><p>        0.88 </p>
</td>	<td><p>        0.40 </p>
</td>	<td><p>        1.01 </p>
</td>	<td><p>        0.46 </p>
</td>	<td><p>        0.93 </p>
</td>	<td><p>        0.42 </p>
</td></tr>
<tr>	<td><p>Brazil</p>
</td>	<td><p> </p>
</td>	<td><p> </p>
</td>	<td><p>        0.95 </p>
</td>	<td><p>        0.43 </p>
</td>	<td><p>        1.07 </p>
</td>	<td><p>        0.49 </p>
</td></tr>
<tr>	<td><p>Japan</p>
</td>	<td><p>        3.48 </p>
</td>	<td><p>        1.58 </p>
</td>	<td><p>        3.47 </p>
</td>	<td><p>        1.57 </p>
</td>	<td><p>        1.51 </p>
</td>	<td><p>        0.69 </p>
</td></tr>
<tr>	<td><p>South Africa</p>
</td>	<td><p> </p>
</td>	<td><p> </p>
</td>	<td><p>        2.93 </p>
</td>	<td><p>        1.33 </p>
</td>	<td><p>        3.10 </p>
</td>	<td><p>        1.40 </p>
</td></tr>
<tr>	<td><p>Vietnam</p>
</td>	<td><p> </p>
</td>	<td><p> </p>
</td>	<td><p>        0.91 </p>
</td>	<td><p>        0.41 </p>
</td>	<td><p>        1.91 </p>
</td>	<td><p>        0.87 </p>
</td></tr>
<tr>	<td><p>Thailand</p>
</td>	<td><p>        1.30 </p>
</td>	<td><p>        0.59 </p>
</td>	<td><p>        1.34 </p>
</td>	<td><p>        0.61 </p>
</td>	<td><p>        1.47 </p>
</td>	<td><p>        0.67 </p>
</td></tr>
<tr>	<td><p>World Total</p>
</td>	<td><p>0.86</p>
</td>	<td><p>0.39</p>
</td>	<td><p>0.82</p>
</td>	<td><p>0.37</p>
</td>	<td><p>0.85</p>
</td>	<td><p>0.39</p>
</td></tr>
</tbody></table>
<p class="default_Text">Source: Global Trade Atlas annual data, commodity 080810.</p>
<p class="default_Text">The trade data indicate that Fuji apple imports from Japan are minor in the overall U.S. market.  Allowing entry of other varieties of <i>Malus domestica</i> apples is expected to change the quantity of apple imports from Japan only minimally.  The significantly higher prices of apples from Japan compared to other imported apples or domestically grown apples underscore the lack of direct substitution between apples varieties from Japan and the principal U.S. varieties.  Although most U.S. apple farms are small, this rule would not have a significant economic impact on a substantial number of small entities.  However, we welcome information on U.S. production of the apple varieties that are expected to be imported from Japan, in order to better understand the potential impact of this rule on the part of the U.S. apple industry with which the apple imports from Japan would directly compete.</p>
<p class="default_Text"><u>Summary and Conclusions
</u></p>
<p class="default_Text">The proposed rule to allow imports of all varieties of <i>Malus domestica</i> apples from Japan into the United States is expected to have minimal economic impact on U.S. entities, large or small.  Although the Fuji apple is the most common variety grown in Japan, it constituted only 0.1% of U.S. apple imports in 2008.  Allowing entry of other <i>Malus domestica</i> varieties is expected to change the quantity of apple imports from Japan only minimally.  The wide price differential between apples grown in Japan and in the United States suggests that apples imported from Japan are not a close substitute for the principal U.S.-grown apple varieties.  The rule, if promulgated, will not have a significant economic impact on a substantial number of small entities.</p>
<p>� APHIS Commodity Import Evaluation Document (CIED) February 2009
</p>
<p>� After Fuji, these are the major apple varieties produced in Japan, according to the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF).
</p>
<p>� North American Industry Classification System (NAICS) 111331 – Crop Production – Apple Orchards.
</p>
<p>� The data include all varieties of apples.   We do not have data specific to the Malus domestica varieties grown in Japan.  
</p>
<p>� Average sales per entity is based on the number of apple growers recorded in the 2007 Agricultural Census, i.e. 25,591, and the total value of fresh and processed apples reported in the 2008 USDA-NASS Non-citrus fruits and nuts summary, i.e. $2.6 billion.
</p>
<p>� USDA National Agricultural Statistics Service “Noncitrus Fruits and Nuts Final Estimates 2002-2007” December 2008 Page 23 � HYPERLINK "http://usda.mannlib.cornell.edu/usda/nass/SB985/sb1011.pdf" ��http://usda.mannlib.cornell.edu/usda/nass/SB985/sb1011.pdf� 
</p>
<p>� � HYPERLINK "http://www.maff.go.jp/toukei/sokuhou/data/ringo-syukaku2007/ringo-syukaku2007.pdf" ��http://www.maff.go.jp/toukei/sokuhou/data/ringo-syukaku2007/ringo-syukaku2007.pdf�  
</p>
<p>Based on the average rate of foreign exchange in 2007, ¥ 117.76/US$1.00, reported by Federal Reserve Statistical Release � HYPERLINK "http://www.federalreserve.gov/releases/g5a/20080102/" ��http://www.federalreserve.gov/releases/g5a/20080102/� 
</p>
<p>� Global Trade Atlas annual data, commodity 080810
</p>
<p>
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