Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations 2599 

and Portola Parkway; then southeast on 

Portola Parkway to State Highway 261; 

then southwest on State Highway 261 to 

Irvine Boulevard; then southeast on 

Irvine Boulevard to Culver Drive; then 

southwest on Culver Drive to U.S. 

Interstate 5; then southeast on U.S. 

Interstate 5 to Jeffery Road; then 

southwest on Jeffery Road to University 

Drive; then southwest, west, and 

southwest on University Drive to State 

Highway 73; then northwest on State 

Highway 73 to Irvine Avenue; then 

southwest, west, and southwest on 

Irvine Avenue to 22nd Street; then 

northwest on 22nd Street to Victoria 

Street; then west on Victoria Street to 

Harbor Boulevard; then north on Harbor 

Boulevard to Adams Avenue; then west 

on Adams Avenue to Brookhurst 

Avenue; then north on Brookhurst 

Avenue to the point of beginning. 

Done in Washington, DC, this 16th day of 

January 2007. 

Kevin Shea, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. E7–801 Filed 1–19–07; 8:45 am] 

BILLING CODE 3410–34–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 982 

[Docket No. AMS–FV–06–0175; FV07–982–

1 IFR] 

Hazelnuts Grown in Oregon and 

Washington; Establishment of Final 

Free and Restricted Percentages for 

the 2006–2007 Marketing Year 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: This rule establishes final free 

and restricted percentages for domestic 

inshell hazelnuts for the 2006–2007 

marketing year under the Federal 

marketing order for hazelnuts grown in 

Oregon and Washington. The final free 

and restricted percentages are 8.2840 

percent and 91.7160 percent, 

respectively. The percentages allocate 

the quantity of domestically produced 

hazelnuts which may be marketed in the 

domestic inshell market (free) and the 

quantity of domestically produced 

hazelnuts that must be disposed of in 

outlets approved by the Board 

(restricted). Volume regulation is 

intended to stabilize the supply of 

domestic inshell hazelnuts to meet the 

limited domestic demand for such 

hazelnuts with the goal of providing 

producers with reasonable returns. This 

rule was recommended unanimously by 

the Hazelnut Marketing Board (Board), 

which is the agency responsible for 

local administration of the marketing 

order. 

DATES: Effective January 23, 2007. This 

interim final rule applies to all 2006–

2007 marketing year restricted hazelnuts 

until they are properly disposed of in 

accordance with marketing order 

requirements. Comments received by 

March 23, 2007 will be considered prior 

to issuance of a final rule. 

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. All 

comments should reference the docket 

number and the date and page number 

of this issue of the Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Barry Broadbent or Gary Olson, 

Northwest Marketing Field Office, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1220 SW Third Avenue, 

Suite 385, Portland, OR 97204; 

Telephone: (503) 326–2724, Fax: (503) 

326–7440, or E-mail: 

Barry.Broadbent@usda.gov or 

GaryD.Olson@usda.gov. 

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. 

SUPPLEMENTARY INFORMATION: This rule 

is issued under Marketing Agreement 

No. 115 and Marketing Order No. 982, 

both as amended (7 CFR part 982), 

regulating the handling of hazelnuts 

grown in Oregon and Washington, 

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 rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. It is intended that this action 

apply to all merchantable hazelnuts 

handled during the 2006–2007 

marketing year beginning July 1, 2006. 

This action applies to all 2006–2007 

marketing year restricted hazelnuts until 

they are properly disposed of in 

accordance with marketing order 

requirements. 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 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 rule establishes free and 

restricted percentages which allocate 

the quantity of domestically produced 

hazelnuts which may be marketed in 

domestic inshell markets (free) and 

hazelnuts which must be exported, 

shelled, or otherwise disposed of by 

handlers (restricted). The Board met 

and, after determining that volume 

regulation would tend to effectuate the 

declared policy of the Act, developed a 

marketing policy to be employed for the 

duration of the 2006–2007 marketing 

year. Volume regulation is intended to 

stabilize the supply of domestic inshell 

hazelnuts to meet the limited domestic 

demand for such hazelnuts with the 

goal of providing producers with 

reasonable returns. Based on an estimate 

of the domestic inshell trade demand 

and total supply of domestically 

produced hazelnuts available for the 

2006–2007 marketing year, the Board 

voted unanimously at their November 

15, 2006, meeting to recommend to 

USDA that the final free and restricted 

percentages for the 2006–2007 

marketing year be established at 8.2840 

percent and 91.7160 percent, 

respectively. 

The Board’s authority to recommend 

volume regulation and use 

computations to determine the 

allocation of hazelnuts to individual 

markets is specified in § 982.40 of the 


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2600 Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations 

order. Under the order’s provisions, free 

and restricted market allocations of 

hazelnuts are expressed as percentages 

of the total hazelnut supply subject to 

regulation. The percentages are derived 

by dividing the estimated domestic 

inshell trade demand (computed by 

formula) by the Board’s estimate of the 

total domestically produced supply of 

hazelnuts that are expected to be 

available over the course of the 

marketing year. 

Inshell trade demand, the key 

component of the marketing policy, is 

the estimated quantity of inshell 

hazelnuts necessary to adequately 

supply the domestic inshell hazelnut 

market for the duration of the marketing 

year. The Board determines the 

domestic inshell trade demand for each 

year and uses that estimate as the basis 

for setting the percentage of the 

available supply of domestically 

produced hazelnuts that handlers may 

ship to the domestic inshell market 

throughout the marketing season. The 

order specifies that inshell trade 

demand be computed by averaging the 

preceding three years’ trade acquisitions 

of inshell hazelnuts, allowing 

adjustments for abnormal crop or 

marketing conditions. In addition, the 

Board may increase the computed 

inshell trade demand by up to 25 

percent, if market conditions warrant an 

increase. 

As required by the order, prior to 

September 20 of each marketing year, 

the Board meets to establish its 

marketing policy for that year. If the 

Board determines that volume control 

would tend to effectuate the declared 

policy of the Act, the Board then follows 

a procedure, specified by the order, to 

compute and announce preliminary free 

and restricted percentages. The 

preliminary free percentage releases 80 

percent of the adjusted inshell trade 

demand that handlers may ship to the 

domestic market. The purpose of 

releasing only 80 percent of the inshell 

trade demand under the preliminary 

stage of regulation is to guard against 

any potential underestimate of crop 

size. The preliminary free percentage is 

expressed as a percentage of the total 

hazelnut supply subject to regulation, 

where total supply is the sum of the 

estimated crop production less the 

three-year average disappearance plus 

the undeclared carry-in from the 

previous marketing year. 

On August 22, 2006, the National 

Agricultural Statistics Service (NASS) 

released an estimate of 2006 hazelnut 

production for the Oregon and 

Washington area at 41,000 dry orchardrun tons. NASS uses an objective yield 

survey method to estimate hazelnut 

production which has historically been 

very accurate. 

On August 24, 2006, the Board met for 

the purpose of (1) determining if volume 

control regulation would tend to 

effectuate the declared policy of the Act; 

(2) estimating the total available supply 

and the domestic inshell trade demand 

for hazelnuts; (3) establishing 

preliminary free and restricted 

marketing percentages for the 2006–

2007 marketing year; and (4) authorizing 

market outlets for restricted hazelnuts. 

After discussion, the Board 

unanimously determined that volume 

regulation would be necessary to 

effectively market the industry’s 2006 

crop and would tend to effectuate the 

declared policy of the Act. The 

determination was based on (1) the large 

size of the 2006 hazelnut crop; (2) the 

inability of the domestic inshell market 

to absorb such a large crop; (3) the 

projected record-setting world hazelnut 

crop and the probability of an 

oversupplied world market; and (4) the 

average price paid to OregonWashington growers has not exceeded 

the parity price in any one of the past 

18 years. 

The Board then estimated the total 

available supply for the 2006 crop year 

to be 39,234 tons. The Board arrived at 

that quantity by using the crop estimate 

compiled by NASS (41,000 tons) and 

then adjusting that estimate to account 

for disappearance and carry-in. The 

order requires the Board to reduce the 

crop estimate by the average 

disappearance over the preceding three 

years (1,792 tons) and to increase it by 

the amount of undeclared carry-in from 

previous years’ production (26 tons.) 

In the calculation, disappearance is 

defined as the difference between the 

estimated orchard-run production and 

the actual supply of merchantable 

product available for sale by handlers. 

Disappearance can consist of (1) 

unharvested hazelnuts; (2) culled 

product (nuts that are delivered to 

handlers but later discarded); (3) 

product used on the farm, sold locally, 

or otherwise disposed of by producers; 

and (4) statistical error in the orchardrun production estimate. 

Undeclared carry-in is defined as 

hazelnuts that were produced in a 

previous marketing year but were not 

subject to regulation because they were 

not shipped during that marketing year. 

Undeclared carry-in is subject to 

regulation during the current marketing 

year and is accounted for as such by the 

Board. 

Additionally, the Board estimated 

domestic inshell trade demand for the 

2006–2007 marketing year to be 3,067 

tons. The Board arrived at this estimate 

by taking the average of the domestic 

inshell trade acquisitions for the 2002–

2005 marketing years (2,775 tons) and 

then reducing that quantity by the 

declared carry-in from last year’s crop 

(124 tons). The trade acquisition data for 

the 2005–2006 marketing year was 

omitted from the Board’s calculations, 

as allowed by the order, after it was 

determined to be abnormal due to crop 

and marketing conditions. 

The declared carry-in represents 

product regulated under the order 

during a preceding marketing year but 

not shipped during that year. This 

inventory must be accounted for when 

estimating the quantity of product to 

make available to adequately supply the 

market. 

After establishing estimates for total 

available hazelnut supply and domestic 

inshell trade demand, the Board used 

those estimates to compute and 

announce preliminary free and 

restricted percentages of 5.4055 percent 

and 94.5945 percent, respectively. The 

Board computed the preliminary free 

percentage by multiplying the adjusted 

inshell trade demand by 80 percent and 

dividing the result by the estimate of the 

total available supply subject to 

regulation (2,651 tons × 80 percent/ 

39,234 tons = 5.4055 percent). The 

preliminary free percentage initially 

released 2,121 tons of hazelnuts from 

the 2006–2007 supply for domestic 

inshell use. The Board authorized the 

preliminary restricted percentage 

(37,113 tons) to be exported or shelled 

for the domestic kernel markets. 

Under the order, the Board must meet 

again on or before November 15 to 

review and revise the preliminary 

estimate of the total available supply of 

hazelnuts and to recommend interim 

final and final free and restricted 

percentages. Initially, when establishing 

preliminary free and restricted 

percentages, the Board utilizes a preharvest objective yield survey, compiled 

by NASS on behalf of the Board, to 

estimate the upcoming crop size. After 

the hazelnut harvest has concluded, 

usually sometime in October, 

information is available directly from 

handlers to more accurately estimate 

crop size. The Board may use this 

information to amend their preliminary 

estimate of total available supply before 

calculating the interim final and final 

percentages. 

Interim final percentages are 

calculated in the same way as the 

preliminary percentages but release 100 

percent of the inshell trade demand, 

effectively releasing the additional 20 

percent held back at the preliminary 

stage. Final free and restricted 

percentages may release up to an 


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Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations 2601 

additional 15 percent of the average 

trade acquisitions of inshell hazelnuts 

for desirable carryout, to provide an 

adequate carryover of product into the 

following season. The order requires 

that final free and restricted percentages 

be effective 30 days prior to the end of 

the marketing year, or earlier, if 

recommended by the Board and 

approved by USDA. The Board is 

allowed to combine the interim final 

and the final stages of the marketing 

policy, if marketing conditions so 

warrant, by recommending final 

percentages which immediately release 

100 percent of the inshell trade demand 

(the preliminary percentage plus the 

additional 20 held back) plus any 

percentage increase the Board 

determines for desirable carryout. 

Revisions in the marketing policy can be 

made until February 15 of each 

marketing year, but the inshell trade 

demand can only be revised upward, 

consistent with § 982.40(e). 

The Board met on November 15, 2006, 

and reviewed and approved an 

amended marketing policy and 

recommended the establishment of final 

free and restricted percentages. During 

the meeting, the Board revised the crop 

estimate in the marketing policy to 

38,688 tons (from 41,000 tons), which 

reflects the results of post-harvest 

handler survey information compiled by 

the Board. In addition, the Board 

decided that market conditions were 

such that the immediate release of an 

additional 15 percent of the three year 

average trade acquisitions to allow for 

desirable carryout would not adversely 

affect the 2006–2007 domestic inshell 

market. Final percentages were 

recommended at 8.2840 percent free 

and 91.1760 percent restricted. The final 

free percentage releases 3,067 tons of 

inshell hazelnuts from the 2006–2007 

supply for domestic use, which includes 

416 tons for desirable carryout. 

Accordingly, since the final percentages 

were recommended for immediate 

release, no recommendations for interim 

final free and restricted percentages 

were necessary. 

The final marketing percentages are 

based on the Board’s final production 

estimate and the following supply and 

demand information for the 2006–2007 

marketing year: 

Total available supply Tons 

(1) Production forecast (11/15/06 crop estimate) ...................................................................................................................................... 38,688 

(2) Minus: Disappearance (three year average ¥ 4.37 percent of Item 1) ............................................................................................. ¥1,691 

(3) Merchantable production (Item 1 minus Item 2) .................................................................................................................................. 36,997 

(4) Plus: Undeclared carry-in as of July 1, 2006 (subject to 2006–2007 regulation) ............................................................................... +26 

(5) Available supply subject to regulation (Item 3 plus Item 4) ................................................................................................................ 37,023 

Inshell trade demand 

(6) Average trade acquisitions of inshell hazelnuts (three prior years domestic sales) ........................................................................... 2,775 

(7) Plus: Increase to encourage increased sales (15% of average trade acquisitions) ........................................................................... +416 

(8) Minus: Declared carry-in as of July 1, 2006 (not subject to 2006–2007 regulation) .......................................................................... ¥124 

(9) Adjusted inshell trade demand (Item 6 plus Item 7 minus Item 8) ..................................................................................................... 3,067 

Percentages Free Restricted 

(10) Final percentages (Item 9 divided by Item 5) × 100 ................................................................................................... 8.2840 91.7160 

(11) Final free tonnage (Item 9) .......................................................................................................................................... 3,067 ..................

(12) Final restricted tonnage (Item 5 minus Item 11) ......................................................................................................... .................. 33,956 

In addition to complying with the 

provisions of the order, the Board also 

considered USDA’s 1982 ‘‘Guidelines 

for Fruit, Vegetable, and Specialty Crop 

Marketing Orders’’ (Guidelines) when 

making its computations in the 

marketing policy. This volume control 

regulation provides a method to 

collectively limit the supply of inshell 

hazelnuts available for sale in domestic 

markets. The Guidelines provide that 

the domestic inshell market has 

available a quantity equal to 110 percent 

of prior years’ shipments before 

allocating supplies for the export 

inshell, export kernel, and domestic 

kernel markets. This provides for a 

plentiful supply of inshell hazelnuts for 

consumers and for market expansion, 

while retaining the mechanism for 

dealing with oversupply situations. The 

established final percentages make 

available approximately 416 additional 

tons to encourage increased sales. The 

total free supply for the 2006–2007 

marketing year is estimated to be 3,067 

tons of hazelnuts, which is 127 percent 

of the average of the last three prior 

years’ sales and exceeds the goal of the 

Guidelines. 

Initial Regulatory Flexibility Analysis 

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 the 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. 

Small agricultural producers are 

defined by the Small Business 

Administration (13 CFR 121.201) as 

those having annual receipts of less than 

$750,000, and small agricultural service 

firms are defined as those having annual 

receipts of less than $6,500,000. There 

are approximately 700 producers of 

hazelnuts in the production area and 

approximately 18 handlers subject to 

regulation under the order. Using 

statistics compiled by NASS, the 

average value of production received by 

producers in 2004 and 2005 was 

$57,912,000. Using those estimates, the 

average annual hazelnut revenue per 

producer would be approximately 

$82,700. The level of sales of other 

crops by hazelnut producers is not 

known. In addition, based on Board 

records, about 83 percent of the 

handlers ship under $6,500,000 worth 

of hazelnuts on an annual basis. In view 

of the foregoing, it can be concluded 

that the majority of hazelnut producers 

and handlers may be classified as small 

entities. 

Board meetings are widely publicized 

in advance of the meetings and are held 

in a location central to the production 


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2602 Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations 

area. The meetings are open to all 

industry members and other interested 

persons who are encouraged to 

participate in the deliberations and 

voice their opinions on topics under 

discussion. Thus, Board 

recommendations can be considered to 

represent the interests of small business 

entities in the industry. 

Currently, U.S. hazelnut production is 

allocated among three main market 

outlets: Domestic inshell, export inshell, 

and kernel markets. Handlers and 

growers receive the highest return for 

sales in the domestic inshell market. 

They receive less for product going to 

export inshell, and the least for kernels. 

Based on Board records of average 

shipments for 1996–2005, the 

percentage going to each of these 

markets was 10 percent (domestic 

inshell), 51 percent (export inshell), and 

37 percent (kernels). Other minor 

market outlets make up the remaining 2 

percent. 

The inshell hazelnut market can be 

characterized as having limited and 

inelastic demand with a very short 

primary marketing period. On average, 

79 percent of domestic inshell hazelnut 

shipments occur between October 1 and 

November 30, primarily to supply 

holiday nut demand. The inshell market 

is, therefore, prone to oversupply and 

correspondingly low grower prices in 

the absence of supply restrictions. This 

volume control regulation provides a 

method for the U.S. hazelnut industry to 

limit the supply of domestic inshell 

hazelnuts available for sale in the 

continental U.S. and thereby mitigate 

market oversupply conditions. 

Many years of marketing experience 

led to the development of the current 

volume control procedures. These 

procedures have helped the industry 

solve its marketing problems by keeping 

inshell supplies in balance with 

domestic needs. Volume controls ensure 

that the domestic inshell market is fully 

supplied while protecting the market 

from the negative effects of oversupply. 

Although the domestic inshell market 

is a relatively small portion of total 

hazelnut sales (averaging 10 percent of 

total shipments for 1996–2005), it 

remains a profitable market segment. 

The volume control provisions of the 

marketing order are designed to avoid 

oversupplying this particular market 

segment, because that would likely lead 

to substantially lower grower prices. 

The other market segments, export 

inshell and kernels, are expected to 

continue to provide good outlets for 

U.S. hazelnut production into the 

future. Adverse climatic conditions that 

negatively impacted hazelnut 

production in the other hazelnut 

producing regions of the world in 2004 

and 2005 have corrected and the total 

world supply in 2006–2007 is predicted 

to increase dramatically. Product prices 

in the world market have trended 

downward in the expectation of the 

greater supply. While the U.S. hazelnut 

industry continues to experience high 

demand for their large sized and high 

quality product, the prices that 

producers receive are tied to the global 

market. In light of the anticipated world 

oversupply situation, regulation of the 

domestic inshell market is important to 

the U.S. hazelnut industry to insulate 

that specialty market from the supply 

related challenges of the world hazelnut 

market. 

In Oregon and Washington, high 

hazelnut production years typically 

follow low production years (a 

historically consistent pattern), and 

such was the case in 2006. The 2005 

crop of 27,600 tons was 13 percent 

below the 10-year average (31,650 tons 

for 1996–2005) for hazelnut production. 

The 2006 crop is estimated to be 22 

percent above the average. It is 

predicted that the 2007 crop will follow 

the recent production pattern and will 

be smaller than the current crop year. 

This cyclical trait also leads to inversely 

corresponding cyclical price pattern for 

hazelnuts. The intrinsic cyclical nature 

of the hazelnut industry lends 

credibility to the volume control 

measures enacted by the Board under 

the marketing order. 

Recent production and price data 

reflect the stabilizing effect of volume 

control regulations. Industry statistics 

show that total hazelnut production has 

varied widely over the 10-year period 

between 1995 and 2004, from a low of 

16,500 tons in 1998 to a high of 49,500 

tons in 2001. Production in the smallest 

crop year and the largest crop year were 

54 percent and 161 percent, 

respectively, of the 10-year average of 

30,826 tons. Grower price, however, has 

not fluctuated to the extent of 

production. Prices in the lowest price 

year and the highest price year were 73 

percent and 149 percent, respectively, of 

the 10-year average price of $963 per 

ton. The lower level of variability of 

price versus the variability of 

production provides an illustration of 

the order’s price-stabilizing impact. The 

coefficient of variation (a standard 

statistical measure of variability; ‘‘CV’’) 

for hazelnut production over the 10-year 

period is 0.36. In contrast, the 

coefficient of variation for hazelnut 

grower prices is 0.19, about half of the 

CV for production. The lower level of 

variability of price versus the variability 

of production provides an illustration of 

the order’s price-stabilizing impact. 

Comparing grower revenue to cost is 

useful in highlighting the impact on 

growers of recent product and price 

levels. A recent hazelnut production 

cost study from Oregon State University 

estimated cost-of-production per acre to 

be approximately $1,340 for a typical 

100-acre hazelnut enterprise. Average 

grower revenue per bearing acre (based 

on NASS acreage and value of 

production data) equaled or exceeded 

that typical cost level only three times 

from 1996 to 2005. Average grower 

revenue was below typical costs in the 

other years. Without the stabilizing 

influence of the order, growers may 

have lost more money. While crop size 

has fluctuated, volume regulations 

contribute to orderly marketing and 

market stability by moderating the 

variation in returns for all producers 

and handlers, both large and small. 

While the level of benefits of this 

rulemaking is difficult to quantify, the 

stabilizing effects of volume regulation 

impact both small and large handlers 

positively by helping them maintain 

and expand markets even though 

hazelnut supplies fluctuate widely from 

season to season. This regulation 

provides equitable allotment of the most 

profitable market, the domestic inshell 

market. That market is available to all 

handlers, regardless of size. 

As an alternative to this regulation, 

the Board discussed not regulating the 

marketing of the 2006 hazelnut crop. 

However, without any regulation in 

effect, the Board believes that the 

industry would tend to oversupply the 

inshell domestic market. The 2006 

hazelnut crop is larger than last year’s 

crop and 22 percent above the ten-year 

average. The unregulated release of 

38,688 tons on the domestic inshell 

market could easily oversupply the 

small, but lucrative domestic inshell 

market. The Board believes that any 

oversupply would completely disrupt 

the market, causing producer returns to 

decrease dramatically. 

Section 982.40 of the order establishes 

a procedure and computations for the 

Board to follow in recommending to 

USDA establishment of preliminary, 

interim final, and final percentages of 

hazelnuts to be released to the free and 

restricted markets each marketing year. 

The program results in a plentiful 

supply of hazelnuts for consumers and 

for market expansion while retaining 

the mechanism for dealing with 

oversupply situations. 

Hazelnuts produced under the order 

comprise virtually all of the hazelnuts 

produced in the U.S. This production 

represents, on average, less than 2 

percent of total U.S. production of all 


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Federal Register / Vol. 72, No. 13 / Monday, January 22, 2007 / Rules and Regulations 2603 

tree nuts, and less than 7 percent of the 

world’s hazelnut production. 

Last season, 85 percent of the 

domestically produced hazelnut kernels 

were marketed in the domestic market 

and 15 percent were exported. 

Domestically produced kernels 

generally command a higher price in the 

domestic market than imported kernels. 

The industry is continuing its efforts to 

develop and expand other markets with 

emphasis on the domestic kernel 

market. Small business entities, both 

producers and handlers, benefit from 

the expansion efforts resulting from this 

program. 

Inshell hazelnuts produced under the 

order compete well in export markets 

because of their high quality. Based on 

Board statistics, Europe has historically 

been the primary export market for U.S. 

produced inshell hazelnuts. Shipments 

have also been relatively consistent, not 

varying much from the 10 year average 

of 4,958 tons. Recent years, though, 

have seen a significant increase in 

export destinations. Last season, inshell 

shipments to Europe totaled 4,622 tons, 

representing just 38 percent of exports, 

with the largest share going to Germany. 

Inshell shipments to Southwest Pacific 

countries, and Hong Kong in particular, 

have increased dramatically in the past 

few years, rising to 50 percent of total 

exports of 12,042 tons for the 2005–2006 

marketing year. The industry continues 

to pursue export opportunities. 

There are some reporting, 

recordkeeping, and other compliance 

requirements under the order. The 

reporting and recordkeeping burdens 

are necessary for compliance purposes 

and for developing statistical data for 

maintenance of the program. The 

information collection requirements 

have been previously approved by the 

Office of Management and Budget under 

OMB No. 0581–0178. 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 all Federal marketing order 

programs, reports and forms are 

periodically reviewed to reduce 

information requirements and 

duplication by industry and public 

sector agencies. This rule does not 

change those requirements. 

The 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. 

In addition, USDA has not identified 

any relevant Federal rules that 

duplicate, overlap, or conflict with this 

rule. 

Further, the Board’s meetings were 

widely publicized throughout the 

hazelnut industry and all interested 

persons were invited to attend the 

meetings and participate in Board 

deliberations. Like all Board meetings, 

those held on August 24 and November 

15, 2006, were public meetings and all 

entities, both large and small, were able 

to express their views on this issue. 

Finally, interested persons are invited to 

submit information on the regulatory 

and informational impacts of this action 

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/ 

fv/moab.html. Any questions about the 

compliance guide should be sent to Jay 

Guerber at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

This rule invites comments on the 

establishment of final free and restricted 

percentages for the 2006–2007 

marketing year under the hazelnut 

marketing order. Any comments 

received will be considered prior to 

finalization of this rule. 

After consideration of all relevant 

material presented, including the 

Board’s recommendation, and other 

information, it is found that this interim 

final rule, as hereinafter set forth, will 

tend to effectuate the declared policy of 

the Act. 

Pursuant to 5 U.S.C. 553, it is also 

found and determined upon good cause 

that it is impracticable, unnecessary, 

and contrary to the public interest to 

give preliminary notice prior to putting 

this rule into effect and that good cause 

exists for not postponing the effective 

date of this action until 30 days after 

publication in the Federal Register 

because: (1) The 2006–2007 marketing 

year began July 1, 2006, and the 

percentages established herein apply to 

all merchantable hazelnuts handled 

from the beginning of the crop year; (2) 

the percentages make the full trade 

demand available so handlers can take 

advantage of inshell marketing 

opportunities; (3) handlers are aware of 

this rule, which was recommended at an 

open Board meeting, and need no 

additional time to comply with this 

rule; and (4) interested persons are 

provided a 60-day comment period in 

which to respond, and all comments 

timely received will be considered prior 

to finalization of this action. 

List of Subjects in 7 CFR Part 982 

Filberts, Hazelnuts, Marketing 

agreements, Nuts, Reporting and 

recordkeeping requirements. 

■ For the reasons set forth in the 

preamble, 7 CFR part 982 is amended as 

follows: 

PART 982—HAZELNUTS GROWN IN 

OREGON AND WASHINGTON 

■ 1. The authority citation for 7 CFR 

part 982 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. A new subpart and § 982.254 are 

added to read as follows: 

Subpart—Free and Restricted 

Percentages 

§ 982.254 Free and restricted 

percentages—2006–2007 marketing year. 

The final free and restricted 

percentages for merchantable hazelnuts 

for the 2006–2007 marketing year shall 

be 8.2840 percent and 91.7160 percent, 

respectively. 

Dated: January 16, 2007. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. E7–763 Filed 1–19–07; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2005–19559; Directorate 

Identifier 2004–NE–03–AD; Amendment 39–

14892; AD 2007–02–05] 

RIN 2120–AA64 

Airworthiness Directives; Rolls-Royce 

plc RB211 Trent 700 Series Turbofan 

Engines 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule; request for 

comments. 

SUMMARY: The FAA is superseding an 

existing airworthiness directive (AD) for 

Rolls-Royce plc (RR) RB211 Trent 700 

series turbofan engines. That AD 

currently requires initial and repetitive 

borescope inspections of the high 

pressure-and-intermediate pressure (HPIP) turbine internal and external oil vent 

tubes for coking and carbon buildup, 

and cleaning or replacing the vent tubes 

if necessary. This AD requires the same 

actions but uses more stringent tube 


sroberts on PROD1PC70 with RULES