This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

139

Vol. 63, No. 2

Monday, January 5, 1998

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 966 and 980

[Docket No. FV97–966–1 FR]

Tomatoes Grown in Florida and

Imported Tomatoes; Final Rule to

Change Minimum Size and Size

Designation Requirements

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: This final rule increases

minimum diameter size requirements

for Florida and imported tomatoes. For

Florida tomatoes alone, the rule also

changes size designations from Medium,

Large, and Extra Large to numeric size

designations of 6×7, 6×6, and 5×6. Also,

the rule slightly increases the diameter

size ranges for the designated sizes. The

marketing order regulates the handling

of tomatoes grown in Florida, and is

administered locally by the Florida

Tomato Committee (Committee). This

final rule will help the Florida tomato

industry and importers meet domestic

market and industry demands. Also,

this rule will help provide handlers

more marketing flexibility and increase

returns to producers, as well as provide

consumers with slightly larger, more

mature tomatoes. Application of the size

requirement increase to imported

tomatoes is required under section 8e of

the Agricultural Marketing Agreement

Act of 1937.

EFFECTIVE DATE: This final rule becomes

effective February 4, 1998.

FOR FURTHER INFORMATION CONTACT:

Christian Nissen, Southeast Marketing

Field Office, Marketing Order

Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, 301

Third Street, NW., Suite 206, Winter

Haven, Florida 33881; telephone: (941)

299–4770, Fax: (941) 299–5169; or

George Kelhart, Marketing Order

Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, Room

2525–S, P.O. Box 96456, Washington,

DC 20090–6456; telephone (202) 720–

2491, Fax: (202) 205–6632. Small

businesses may request information on

compliance with this regulation by

contacting Jay Guerber, Marketing Order

Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, Room

2525–S, P.O. Box 96456, Washington,

DC 20090–6456; telephone (202) 720–

2491, Fax: (202) 205–6632.

SUPPLEMENTARY INFORMATION: This final

rule is issued under Marketing

Agreement No. 125 and Marketing

Order No. 966, both as amended (7 CFR

part 966), regulating the handling of

tomatoes grown in certain designated

counties in Florida, hereinafter referred

to as the ‘‘order.’’ The marketing

agreement and order are 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

(Department) is issuing this rule in

conformance with Executive Order

12866.

This rule has been reviewed under

Executive Order 12988, Civil Justice

Reform. This rule is not intended to

have retroactive effect. This final 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 exempted therefrom. A

handler is afforded the opportunity for

a hearing on the petition. After the

hearing, the Secretary 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 the Secretary’s ruling on the

petition, provided an action is filed not

later than 20 days after the date of the

entry of the ruling.

Section 8e of the Act specifies that

whenever certain specified

commodities, including tomatoes, are

regulated under a Federal marketing

order, imports of those commodities

must meet the same or comparable

grade, size, quality, and maturity

requirements as those in effect for the

domestically produced commodity.

There are no administrative procedures

which must be exhausted prior to any

judicial challenge to the provisions of

import regulations issued under section

8e of the Act.

Under the order, tomatoes produced

in the production area and shipped to

fresh market channels outside the

regulated area are required to meet

grade, size, inspection, and container

requirements. These requirements are

specified in § 966.323 of the handling

regulations issued under the order.

These requirements apply during the

period October 10 through June 15 each

year. The regulated area is the entire

State of Florida, except the panhandle.

The production area is part of the

regulated area. Specialty packed red

ripe tomatoes, yellow meated tomatoes,

and single and double-layer placepacked tomatoes are exempt from

container net weight requirements.

Under § 966.323, all tomatoes, except

for pear shaped, paste, cherry,

hydroponic, and greenhouse tomatoes,

must be inspected as specified in the

United States Standards for Grades of

Fresh Tomatoes (7 CFR part 51.1855

through 51.1877; standards). Such

tomatoes also must be at least 28⁄32

inches in diameter, and sized with

proper equipment in one or more of the

following ranges of diameters. In the

proposal, the reference to the number

28⁄32 was incorrectly published in the

Federal Register as 28⁄32 (62 FR 52047;

October 6, 1997; column three;

paragraph three; line eight).

Size designation

Inches

minimum diameter

Inches

maximum diameter

Medium ......................... 28⁄32 217⁄32

Large ............................. 216⁄32 225⁄32

Extra Large ................... 224⁄32

These size designations and diameter

ranges are the same as those specified in

§ 51.1859 of the standards. All tomatoes

in the Medium size designation are

required to grade at least a U.S. No. 2,

while tomatoes in the larger size
140 Federal Register / Vol. 63, No. 2 / Monday, January 5, 1998 / Rules and Regulations

designations are required to grade at

least a U.S. No. 3. Section 966.52 of the

order provides authority for the

establishment and modification of

regulations applicable to the handling of

particular sizes and size designations of

tomatoes.

This rule increases the minimum

diameter size requirement for Florida

tomatoes from 28⁄32 inches to 29⁄32

inches and makes conforming changes

to container marking requirements and

the regulation for special packed

tomatoes. This rule also changes the size

designations Medium, Large, and Extra

Large to numeric size designations of

6×7, 6×6, and 5×6 (respectively), and

increases the diameter size ranges for

the designated sizes. These size ranges

are different from those specified in

§ 51.1859 of the standards. On

September 5, 1997, the Committee met

and unanimously recommended these

changes. At the same meeting, the

Committee recommended by a vote of

10 to 2 to eliminate shipments of U.S.

No. 3 grade tomatoes from the regulated

area. That recommendation is being

addressed in a separate rulemaking

action.

Based on an analysis of markets and

demands of buyers, the Committee

believes that the increase in the

minimum size will improve the

marketing of Florida tomatoes. By

increasing the minimum size, the

tomatoes will be slightly larger and,

thus, more mature when packed. This

follows recent industry trends to ship

larger and more mature tomatoes. New

commercial tomato varieties also have

resulted in larger sized tomatoes being

shipped in response to a strong

consumer demand. Because of this

demand, production of larger tomatoes

has been a popular method of improving

returns among producers as it also

increases total yields.

Also, the Committee recommended

the increase in minimum size

requirements to improve the uniformity

and appearance of tomato packs. The

slightly smaller tomatoes in the Medium

packs increase the size variability of the

pack, and are more likely to be

immature and have less taste. The

current minimum size of 28⁄32 inches

allows these smaller tomatoes to be

combined with more mature tomatoes,

which lowers the overall quality and,

subsequently, the price of the pack. This

has resulted in complaints from buyers

throughout the market.

In the mid-1980’s, Dr. Jeffrey K.

Brecht, at the University of Florida, did

a study of smaller tomatoes. According

to his findings, fully mature green

tomatoes begin coloring within a few

days of harvesting. Since tomatoes are

not easily identified by a surface

indicator (color) of full maturity in

green fruit, pickers are forced to rely on

size rather than maturity when

harvesting tomatoes. The result is that

tomatoes at the 28⁄32 of an inch

minimum diameter may require two

weeks or more to begin ripening.

Attainment of the full ripe stage requires

on average a week to 10 days additional

time. Hence, the full ripening process

can take as long as four weeks.

Tomatoes that take this long to ripen

after harvest have been shown to have

poor taste. Increasing the minimum size

to 29⁄32 inches for Medium tomatoes is

expected to help reduce this problem.

Also, consumers are demanding a

slightly larger tomato. Smaller tomatoes

with a less uniform pack have poor

consumer acceptance, especially in

chain stores.

The increase in the minimum size

from 28⁄32 inches to 29⁄32 inches is not

expected to significantly affect the total

number of containers shipped. During

the 1996–1997 season, of the 47,879,084

containers of 25 pound-equivalentshipments, approximately 15 percent or

about 7,023,239 shipments of 25-poundequivalents from Florida were of the

Medium size designation. The Medium

size currently covers a range of 28⁄32 to

217⁄32 inches or a range of about 9⁄32 of

an inch. Increasing the minimum size to

29⁄32 inch removes all tomatoes that

would have met the 28⁄32 minimum size

designation. The Medium size

designation currently covers a range of

28⁄32 to 217⁄32 inches or a range of about 9⁄32 of an inch. Removing 1⁄32 inch from

the 9⁄32 size range would eliminate about

10 percent of the size range. Thus, if the

size increase had been applied during

the previous season, about 700,000 25-

pound equivalents would have been

eliminated. Thus, the size increase is

expected to reduce total shipments by

about 1.5 percent (700,000 25-pound

equivalents divided by 47,879,084 25-

pound equivalents). Any of the tomatoes

failing to meet the minimum size

requirements may be sold within the

production area or shipped for

processing. In the proposed rule, the

references in this paragraph to 25-pound

equivalents were incorrectly printed in

the Federal Register as 25,000 pound

equivalents (62 FR 52048; October 6,

1997; column two; paragraph two; lines

six and eight).

The Committee also recommended

the following new designations and

tomato diameter size ranges:

Size designation

Inches

minimum diameter

Inches

maximum diameter

6 × 7 (Currently Medium) .......................... 29⁄32 219⁄32

6 × 6 (Currently Large) 217⁄32 227⁄32

5 × 6 (Currently Extra

Large) ........................ 225⁄32 ..............

Prior to 1991, numeric size

designations were used by Florida

handlers and marketers from other

growing areas, both domestic and

foreign. The current standards and

nomenclature size designations were

implemented in 1991, and were

designed to provide a uniform basis for

marketing tomatoes. However, numeric

size designation terminology has

continued to be used by Florida

handlers and sellers from other

domestic and foreign growing areas in

negotiating price and other terms of

trade, and buyers in the marketplace

still routinely refer to the size of

tomatoes in a 25-pound bulk (loose

pack) box by using the 6 × 7, 6 × 6, and

5 × 6 size designations, even though the

box may be marked Medium, Large, or

Extra Large. Florida tomato handlers

have found that the difference in

terminology has hindered their

negotiations with buyers, and adversely

affected handler and producer returns.

Handlers believe that buyers tend to

discount Florida tomatoes because the

buyers do not have confidence that the

Medium, Large, and Extra Large

designations correctly correspond with

the size designations of 6 × 7, 6 × 6, and

5 × 6 currently used by other tomato

growing areas.

Florida handlers compete directly

with tomatoes from Mexico. Mexican

packers generally market their smaller

sized tomatoes in 3-layer place-packs

marked 6 × 6 or 6 × 7 (each box weighs

about 30 pounds), and bulk (loose pack)

boxes with the same numeric size

designations (each box weighs about 25

pounds). The larger sizes of tomatoes

from Mexico are generally marketed in

2-layer place-packs marked as 5 × 6, 5

× 5, 4 × 5, or 4 × 4, each weighing

between 21 and 24 pounds.

Many buyers in the marketplace

purchase tomatoes from both Florida

and Mexico, depending on size

availability and price, and the preferred

language in discussing price and other

terms of sale and delivery is numeric

size or count, not nomenclature size

designations. Reverting back to a

previously used numeric system will

allow Florida handlers to use numeric

size designations that are familiar to

both handlers and buyers of Florida

tomatoes, facilitate buyer negotiations,
Federal Register / Vol. 63, No. 2 / Monday, January 5, 1998 / Rules and Regulations 141

and allow Florida handlers to more

effectively market their crop.

In spite of the harmonized marketing

goals of 1991, each of the growing areas

have continued to market their tomatoes

a bit differently. The size designation

change will enable the Florida tomato

industry to better meet marketplace

needs.

This rule also increases the minimum

and maximum diameter ranges of the

three size designations. The net increase

for the maximum diameters for the

Medium (6 × 7) and Large (6 X 6) size

designations will be 1/32 inch.

This will result in a 2/3×’s overlap in

the maximum diameters in these size

designations to the next larger size.

According to the Committee, this will

provide a more even distribution of

tomato shipments throughout the three

size designations, which will enable

handlers to make better decisions on

which size of tomatoes to pack. For

instance, tomatoes that measure at the

very top end of the Medium (6 × 7) size

can either be packed with Medium (6 ×

7) size tomatoes or as a smaller tomato

with Large (6 × 6) size tomatoes. The

same increased flexibility will exist for

Large (6 × 6) size tomatoes packed with

Extra Large (5 × 6) size tomatoes. Such

packing decisions could depend on

specific buyer or market demands, on

general crop size, and on condition of

the tomatoes and prices on each day of

packing.

Currently, Florida producers are

growing tomato varieties which tend to

size larger and tend to be oblong. The

new diameter size ranges for the three

size designations also are intended to

accommodate the sizing of these

varieties of tomatoes and foster the

shipment of larger tomatoes, which the

marketplace desires.

Due to strong consumer demand

during the 1996–1997 season,

approximately 80 percent of the Florida

tomatoes sold were in the Extra Large (5

× 6) size designation. This rule will

increase the minimum diameter of the

Extra Large (5 × 6) size designation to 2–

25/32 inches from 224⁄32 inches with no

maximum size limit. Increasing the

minimum diameter size of this

designation by 1⁄32 inch for Extra Large

(5 × 6) size packs will reduce the

number of smaller sized tomatoes

packed in that size designation. Hence,

this is expected to decrease size

variability and improve uniformity of

this premium pack. Thus,

improvements in this size category are

expected to further enhance consumer

demand, resulting in increased returns

to producers.

Also, a study conducted by Dr. John

J. VanSickle at the University of Florida

estimates that increases in the minimum

diameters for each size category would

result in an increase in the overall

prices received for Florida tomatoes.

The study indicates that if increasing

the size minimums shifted 1 percent of

the smallest Extra Large (5 × 6) size

tomatoes into the smaller size

categories, then prices for Extra Large (5

× 6) size would increase by .25 percent,

the price of Large (6 × 6) size tomatoes

by .15 percent, and the price of Medium

(6 × 7) size tomatoes by .07 percent. The

increase in price would occur because

of the redistribution of larger sized

tomatoes into the smaller size

designations, which is a response to

consumer demand for a more consistent

pack and slightly larger tomatoes.

These changes are expected to

increase returns to producers by

improving size consistency, quality, and

maturity; and, thus, encourage repeat

purchases from consumers. The new

size designations will allow handlers to

respond better to market preferences,

which is expected to benefit producers

and handlers of Florida tomatoes.

This rule also makes conforming

changes to two paragraphs in § 966.323.

The first change in § 966.323 (a)(2)(iii)

concerns container marking

requirements. The references to the

nomenclature (Medium, Large, and

Extra Large) size designations are

replaced with the new numeric size

designations. The second change is in

§ 966.323 (d)(3) for special packed

tomatoes. The reference to the 2–8/32

inch minimum size is replaced with the

new 2–9/32 inch minimum size.

Mexico is the largest exporter of

tomatoes into the United States. Small

quantities are imported from the

Caribbean Basin. On average, Mexico

represents over 99 percent of all tomato

imports during the period (October 10

through June 15) when Florida and

import requirements apply.

Section 8e of the Act requires that

when certain domestically produced

commodities, including tomatoes, are

regulated under a Federal marketing

order, imports of that commodity must

meet the same or comparable grade,

size, quality, or maturity requirements

for the domestically produced

commodity. The current import

regulations are specified in 7 CFR

980.212. Similar to the order, the

regulations apply during the period

October 10 through June 15 when the

Florida handling requirements are in

effect. Because this rule increases the

minimum size for domestic tomato

shipments, this increase will be

applicable to imported tomatoes

beginning with the effective date of this

rule.

Florida tomatoes must be packed in

accordance with three specified size

designations, and tomatoes falling into

different size designations may not be

commingled in a single container. These

pack restrictions do not apply to

imported tomatoes. Because pack

requirements do not apply, different

sizes of imported tomatoes may be

commingled in the same container.

However, the Florida handling

requirements also specify that tomatoes

that are designated as Medium (6 X 7)

size must meet a U.S. No. 2 grade, while

the larger sizes are required to meet a

U.S. No. 3 grade. The more stringent

grade requirements are applied to the

Medium (6 X 7) size designation

because of quality problems with

smaller tomatoes.

Similarly, current import

requirements specify that all lots with a

minimum diameter of 2–17/32 inches

and larger shall meet at least a U.S. No.

3 grade. All other tomatoes shall meet

at least a U.S. No. 2 grade. Any lot with

more than 10 percent of its tomatoes

less than 2–17/32 inches in diameter is

required to grade at least U.S. No. 2.

This rule will change these

requirements to reflect the changes to

the Florida handling requirements by

requiring that all lots with a minimum

diameter of 2–19/32 inches and larger

meet at least a U.S. No. 3 grade. All

other tomatoes will need to meet at least

a U.S. No. 2 grade. Any lot with more

than 10 percent of its tomatoes less than

2–19/32 inches in diameter will have to

grade at least U.S. No. 2.

These changes are expected to benefit

the marketers of both Florida and

imported tomatoes by providing

consumers with better quality, higher

maturity, and slightly larger tomatoes.

Prior to the issuance of the proposed

rule, the Department had contacted a

few tomato importers concerning

imports. The importers indicated that

they are importing larger sizes of

tomatoes. The Department believes that

the increase in minimum size would not

limit the quantity of imported tomatoes

or place an undue burden on importers

of Mexican tomatoes. The expected

increase in customer satisfaction is

expected to benefit all tomato importers

regardless of the size of their operation

or business. The size increase is the

only requirement implemented for

Florida which applies to imported

tomatoes. The exporters and importers

of foreign produced tomatoes will be

able to continue marketing their

tomatoes as they have in all other

respects, and in meeting buyer needs.

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA), the

Agricultural Marketing Service (AMS)
142 Federal Register / Vol. 63, No. 2 / Monday, January 5, 1998 / Rules and Regulations

has considered the economic impact of

this action on small entities.

Accordingly, the AMS has prepared this

final 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.

Import regulations issued under the Act

are based on those established under

Federal marketing orders which regulate

the handling of domestically produced

products.

There are approximately 65 handlers

of Florida tomatoes who are subject to

regulation under the order and

approximately 75 tomato producers in

the regulated area. In addition, at least

170 importers of tomatoes are subject to

import regulations and will be affected

by this rule. Small agricultural service

firms have been defined by the Small

Business Administration (SBA)(13 CFR

121.601) 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

$500,000.

Committee data indicates that

approximately 30 percent of the Florida

handlers handle over 90 percent of the

total volume of Florida fresh tomatoes

marketed. Based on this information,

shipment information for the 1996–97

season, and the 1996–97 season average

price of $7.97 per 25-pound equivalent

carton, the majority of handlers would

be classified as small entities as defined

by the SBA. The majority of producers

of Florida tomatoes may be classified as

small entities. The Department also

believes that most importers may be

classified as small entities. In the

proposed rule, the reference to 25-

pound equivalent carton referred to in

this paragraph was incorrectly printed

in the Federal Register as 25,000 pound

equivalent carton (62 FR 52049; October

6, 1997; column three; paragraph two;

line seven).

Under § 966.52 of the Florida tomato

marketing order, the Committee has

authority to recommend increases in the

minimum size requirement and changes

in the size designations for Florida

tomatoes grown in the defined

production area and handled under the

order. This rule, unanimously

recommended by the Committee at its

September 5, 1997, meeting, will

increase the minimum size, change size

designations and corresponding

diameter size ranges. As provided under

section 8e of the Act, the increase in the

minimum size diameter requirement

applies to imported tomatoes.

Based on analysis of markets and

demands of buyers, the Committee

recommended increasing the minimum

size from 2-8⁄32 inches to 2-9⁄32 inches in

diameter and the corresponding

minimum sizes for the other two size

designations. The Committee believes

these size increases will improve the

marketing of Florida tomatoes. By

increasing the minimum sizes, the

tomatoes in each size range will be

slightly larger and, thus, more mature

when packed. This follows recent

industry trends to ship larger and more

mature tomatoes. Current trends in

cultural practices and new commercial

tomato varieties also have resulted in

larger sized tomatoes being shipped in

response to consumer demand for such

tomatoes. Because of this demand,

production of larger tomatoes has been

a popular method of improving returns

among producers as it also increases

total yields and total pounds. While

yields increase with larger fruit, the

labor costs associated with picking these

tomatoes remains fairly constant

because producers pick relatively the

same number of fruit.

The change in the minimum size was

recommended because demand for

larger tomatoes has increased over the

last five years. This in part is due to the

fact that size continues to be a major

influence on price. According to Dr.

John J. VanSickle of the University of

Florida, the percent of Extra Large (5×6)

size tomatoes shipped from Florida has

increased steadily from 43.2 percent of

total shipments since 1992–93 to 50

percent of total shipments in 1996–1997

for mature green tomatoes. Mature green

tomatoes are green but are fully

developed and will continue to ripen

fully. Meanwhile, the percent of

tomatoes from Florida marketed in the

Extra Large (5×6) size for vine ripe

tomatoes has increased from 66.6

percent to 79.2 percent of total

shipments. Vine ripe tomatoes have

started to break in color from green to

tannish-yellow, pink, or red.

The increase in the minimum size

from 2-8⁄32 inches to 2-9⁄32 inches is not

expected to affect significantly the total

number of Florida shipments. During

the 1996–1997 season, of the 47,879,084

shipments of 25-pound equivalents,

approximately 15 percent or about

7,023,239 shipments of 25-pound

equivalents from Florida were in the

minimum size designation of Medium.

The Medium size currently covers a

range of 2-8⁄32 to 2-17⁄32 inches or a range

of about 9⁄32 inch. Increasing the

minimum size to 2-9⁄32 inch removes

tomatoes that would have met the 2-8⁄32

inch minimum size designation.

Removing 1⁄32 inch from the 9⁄32 inch

size range decreases the size range by

about 10 percent. If the size increase

had applied during the previous season,

shipments from that range would have

been reduced by about 700,000 25-

pound equivalents. Thus, the size

increase is expected to reduce total

shipments by approximately 1.5 percent

(700,000 25-pound equivalents divided

by 47,879,084 25-pound equivalents).

Because Florida tomatoes are sizing

larger than in the past, the increase in

size requirements is expected to have a

minimal impact on total shipments.

Also, any of these smaller tomatoes may

be sold within the production area or

shipped for processing. In the proposed

rule, the references to 25-pound

equivalents in this paragraph were

incorrectly printed as 25,000 pound

equivalents (62 FR 52050; October 6,

1997; column one; paragraph two; lines

six and eight).

Also, this rule changes the size

designations from Medium, Large, and

Extra Large to numeric size designations

of 6×7, 6×6, and 5×6. In addition, the

rule slightly increases the diameter size

ranges for these designated sizes.

The Committee stated that, absent a

change in the regulations, an erosion of

market confidence could occur from not

meeting buyer needs. This could result

in reduced shipments and reduced

producer income.

Direct costs associated with this rule

will be the purchase of new sizing belts.

Sizing belts convey and size fruit during

the packing process. Depending on the

amount of use, sizing belts can last a

season or may need to be replaced two

to three times a season. Estimated prices

associated with these purchases could

range from $450.00 for a small handler

to $19,000 for very large handlers.

While there are short-term costs

associated with the new sizing

designations, the benefits are expected

to outweigh the costs. Moreover,

changing sizing belts is a routine action

since they have to be regularly replaced

depending on use.

A study conducted by Dr. John J.

VanSickle at the University of Florida

estimates that size increases in the

minimum diameters for each size

category would result in an increase in

the overall prices received for Florida

tomatoes and better returns to

producers. The study indicates that

increasing the size minimums would

shift some of the smallest Extra Large

(5×6) size tomatoes into the smaller size

categories. A shift of 1 percent into the
Federal Register / Vol. 63, No. 2 / Monday, January 5, 1998 / Rules and Regulations 143

smaller size categories would increase

the prices for Extra Large (5×6) size

tomatoes by .25 percent, the price of

Large (6×6) size tomatoes by .15 percent,

and the price of Medium (6×7) size

tomatoes by .07 percent. The increase in

price would occur in response to

consumer demand for packs with

slightly larger tomatoes. The costs to the

industry associated with the minimum

size and size designation changes would

include purchases of new equipment

and adjustments to operate under the

new requirements. These costs are

expected to be minimal relative to the

benefits expected, and in relation to

normal operating costs and procedures.

The new numeric size designations

should not have a negative impact on

any handler regardless of size. This is

expected to help Florida handlers

respond to market and consumer

demand for larger sized tomatoes. The

Committee believes that these

designations are the only practical

means available to the Florida industry

for identifying its larger sized tomatoes.

The standards specify dimensions for

each of the nomenclature designations

currently used, but they are smaller than

the Committee desires. Hence, the

nomenclature designations are not as

useful to Florida handlers as the new

size designations. The new size

designations should benefit both small

and large businesses in the industry by

helping the Florida industry more

effectively satisfy buyer needs for larger

tomatoes.

This rule may impose some additional

costs on handlers, and producers.

However, these costs are expected to be

minimal, and would be offset by the

benefits of the final rule. This rule is

expected to impact similarly importers

of tomatoes, as far as the slight increase

in minimum size is concerned. The

Committee believes that these

modifications will benefit consumers,

producers, handlers, and importers. The

benefits of this rule are not expected to

be disproportionately greater or lesser

for small entities than for large entities.

The Committee discussed alternatives

to this recommendation, including

leaving the regulations as currently

issued. All Committee members agreed

that some change to the size

designations was necessary to improve

pack appearance and compete in the

present market. The amount of change

became the main concern, with a

portion of the Committee favoring a

larger size increase and another portion

favoring small incremental moves over

a period of time. The Committee

recommended a compromise to allow

individual packing houses leeway to

implement the amount of change

through a 2⁄32 inch overlap in sizes.

The information on imports and

shipments contained in the following

two paragraphs is from AMS Market

New Branch data.

Mexico is the largest exporter of

tomatoes to the United States. Over the

last 10 years, Mexican exports to the

United States averaged 32,527

containers of 25,000-pound equivalents

per season (October 5–July 5) and

comprised about 99 percent of all

imported tomatoes to the United States

during that time. Total imports during

that period averaged 32,752 containers

of 25,000-pound equivalents (October

5–July 5). Some of the imports from

Mexico may have been transhipped to

Canada.

Domestic shipments for the past 10

years averaged 108,577 containers of

25,000-pound equivalents (October 5–

July 5). Florida shipments averaged

52,977 containers of 25,000-pound

equivalents or approximately 48 percent

of the total shipments for the same

period. In the proposed rule, the

reference to 25,000 pound equivalents

in this paragraph was incorrectly

printed as 25 pound equivalents (62 FR

52050; October 6, 1997; column three;

paragraph one; line nineteen).

These changes are expected to benefit

the marketers of both Florida and

imported tomatoes by providing

consumers with better quality, higher

maturity, and slightly larger tomatoes.

Prior to the issuance of the proposed

rule, the Department had contacted a

few tomato importers concerning

imports. The importers indicated that

they were importing larger sizes of

tomatoes. The Department believes that

the size increase would not limit the

quantity of imported tomatoes or place

an undue burden on importers of

Mexican tomatoes. The improvement in

customer satisfaction is expected to

benefit all tomato importers regardless

of size.

This action will not impose any

additional reporting or record keeping

requirements on either small or large

handlers. As with all Federal marketing

order programs, reports and forms are

reviewed periodically to reduce

information requirements and

duplication by industry and public

sector agencies.

As noted in the initial regulatory

flexibility analysis, the Department has

not identified any relevant Federal rules

that duplicate, overlap, or conflict with

this final rule.

In addition, the Committee’s

September 5, 1997, meeting was

publicized widely throughout the

Florida tomato industry and all

interested persons were invited to

attend the meeting and participate in

Committee deliberations on all issues.

The Committee also discussed these

issues in May of 1997 and buyers and

sellers of Florida tomatoes were in

attendance. Like all Committee

meetings, the May and September 5,

1997, meetings were public meetings

and all entities, both large and small,

were able to express views on this issue.

Finally, interested persons were invited

to submit information on the regulatory

and informational impacts of this action

on small businesses. No such comments

were received.

The proposed rule regarding this

action was published in the Federal

Register on October 6, 1997 (62 FR

52047). Interested persons were invited

to submit written comments until

October 16, 1997. Copies of the

proposed rule were faxed and mailed to

all known interested parties. Also, the

rule was made available through the

Internet by the Office of the Federal

Register.

A notice reopening the comment

period until November 5, 1997, was

published in the October 22, 1997, issue

of the Federal Register (62 FR 54809).

A total of 24 comments were received.

Of this total, two comments requested

that the original comment period for the

proposed rule be reopened.

Seven favorable comments were

received. Two of these comments were

from a voluntary agricultural

cooperative association of Florida

tomato producers representing about 90

percent of the total volume of tomatoes

produced under the marketing order

each year. Individual comments also

were received from an agricultural trade

organization representing growers and

handlers of commercial varieties of

tomatoes throughout the State; and an

association representing about 220

tomato and other winter vegetable

growers and agricultural suppliers in

the State of Florida. Two favorable

comments were submitted by the

Committee. One of the two Committee

comments reaffirmed the need for the

proposed changes, and pointed out

several typographical errors in the

supplementary information section of

the proposed rule that needed

correction. The corrections have been

made in the final rule. The second

Committee comment, in addition to

reaffirming the need for the proposed

changes, commented on assertions made

by two opponents and a comment

requesting more time to comment. In its

second comment, the Committee

contended that the claims of the

opponents and the request for more time

to comment did not have merit. A
144 Federal Register / Vol. 63, No. 2 / Monday, January 5, 1998 / Rules and Regulations

comment was received from The

Commissioner of the Florida

Department of Agriculture and

Consumer Services which supported the

proposed changes and requested that

the typographical errors pointed out by

the Committee be corrected.

Fifteen opposition comments were

received. These comments were from a

trade association representing over 100

distributors, shippers, brokers and

affiliated companies which are directly

involved with the receipt, handling, and

sale of perishable agricultural

commodities grown in Mexico; growers

and shippers of Mexican tomatoes; firms

involved in the distribution and

shipment of Mexican tomatoes; and a

customs broker. Other opposition

commenters included a grower, handler,

and shipper of domestic and imported

tomatoes, a national confederation of

Mexican vegetable growers, and a law

firm representing a confederation of

Mexican producers and packers (its

members account for the majority of

tomatoes imported into the United

States from Mexico).

Most of the opposition comments

expressed support for the efforts of the

Florida Tomato Committee to improve

quality in U.S. markets. These

commenters indicated that they

opposed the proposed rule unless

certain modifications were made. While

they were opposed to those parts of the

proposal concerning size designations,

they requested inclusion of a 60-day

period from publication of the final rule

to its effective date for the changes to

the minimum size requirements.

All of the negative comments opposed

the use of the proposed new numeric

size designations. The commenters

indicated that the new size designations

are different than size designations used

in the industry. Several commenters

stated that Mexico generally ships its

larger tomatoes in place packs and that

the boxes are marked with 5×5, 5×4,

4×4, or 3×4 size designations, while the

largest size designation proposed for

Florida tomatoes was 5×6 with a

minimum diameter of 2 25⁄32 inch and

no maximum diameter. The commenters

believed this would lead to confusion in

the marketplace.

A comment from a grower, handler,

and shipper of domestic and imported

tomatoes objected to the use of numeric

size designations in shipping tomatoes

in 25-pound bulk packs. The commenter

believed that nomenclature designations

(i.e., Medium, Large, and Extra Large),

should be used for bulk packages as

defined in the current standards. The

commenter indicated that numeric

designations were more appropriate for

place-packed tomatoes.

Several of the opposing commenters

explained that handlers and repackers

of imported tomatoes use numeric terms

like 6×7, 6×6, 5×6, 5×5, 4×5, 4×4, and

3×4 to describe the configuration (rows)

of place-packed tomatoes in the boxes

used. A box of 6×6 tomatoes includes 36

tomatoes in each layer, while a box of

4× ’s includes 16 tomatoes in each layer.

There are slight size variations to assure

a tight fit.

According to two of the opposing

commenters, about 62.4 percent of

Mexican place-packed tomatoes shipped

this past season were larger than the

largest Florida proposed size diameter;

i.e., larger than 2 25⁄32 inch minimum

diameter. The commenters further

contended that if the proposal is

implemented, Mexican growers will be

forced to label their larger tomato packs

with a 5 6 size designation in addition

to their own designations; i.e., 3×4, 4×4,

4×5, and 5×5.

The commenters stated that such dual

markings would be needed to

distinguish Mexico’s premium packs

from Florida’s proposed 5×6 pack. The

commenters contended that these

markings will confuse customers and

will dilute the value Mexican growers

receive currently for their largest sizes.

The Department has thoroughly

analyzed all of these comments in the

context of how tomatoes are marketed in

the United States. Most tomatoes from

Florida are marketed as mature greens

in 25-pound bulk (loose pack) boxes.

Florida handlers negotiate price and

other terms of sale and delivery using

both nomenclature size designations

(Medium, Large, and Extra Large) and

numeric size designations. Many buyers

in the marketplace still routinely refer to

the size in a 25-pound bulk (loose pack)

box of tomatoes by using 5×6, 6×6, and

6×7 designations. Even when the boxes

are marked with the Medium, Large, or

Extra Large size designations, buyers

frequently use the numeric size

information in negotiating the purchase

of tomatoes. The proposed numeric size

designations will allow the Florida

industry to adopt trading terminology

that is in general use by handlers and

buyers of Florida tomatoes.

Some mature green tomatoes are

shipped out of Mexico, but most of the

shipments are vine ripe tomatoes.

Mexican packers generally market

smaller sized tomatoes in 3-layer placepacks marked 6×6 or 6×7 in boxes

weighing about 30 pounds. The larger

sizes of tomatoes from Mexico generally

are marketed in 2-layer place-packs

marked as 5×6, 5×5, 4×5, and 4×4,

weighing between 21 and 24 pounds.

Some Mexican packers use the Medium,

Large, and Extra Large size designations

in describing the size of the tomatoes in

bulk boxes, while others use numeric

size designations for both packs. Buyers

in the marketplace understand these

marketing practices, and use this

information in making their purchase

decisions.

Many buyers in the marketplace

purchase tomatoes from both Florida

and Mexico to meet their needs

depending on size availability and

price. These buyers customarily use

numeric size designations in making

their purchase decisions.

Thus, the Department believes that

the buyers of Florida and Mexican

tomatoes understand the differences in

tomato size designations between

shipments from Florida and Mexico,

and that the proposed designations

should not result in marketplace

confusion or problems with market

pricing.

The different tomato growing areas

have been marketing their tomatoes in

the way they believe helps them best

market their product. These differing

marketing schemes are not harmonized

even within a particular growing area.

The proposed numeric size designations

are defined in terms of specific

minimum and maximum diameter

ranges and should not result in

marketplace confusion. Further, the new

numeric size designations do not have

to be adopted by importers of Mexican

tomatoes. These importers can continue

to use whatever size designation

markings they believe are needed to

help them more effectively compete in

the marketplace. Any such markings

should be consistent with applicable

laws or regulations including those that

apply to accuracy in description of

product.

Also, the proposed numeric size

designations do not affect packers or

repackers of imported tomatoes. Packers

and repackers of imported tomatoes are

free to market their tomatoes as they

may believe appropriate, to segregate

their larger-sized tomatoes into as many

subsizes as they desire to satisfy their

customers, and to differentiate their

sizes from Florida packs as they do now.

Again, such markings of tomatoes

should be consistent with applicable

laws and regulations.

Commenters also stated that, if

packers in Mexico or packers in

wholesale markets wished to place-pack

tomatoes according to the traditional

place-pack-count designations using the

proposed size ranges, the tomatoes

would be too large to fit into the boxes

currently used. The commenters

asserted that as a result, new boxes

would need to be designed for placepacked tomatoes if other segments of the
Federal Register / Vol. 63, No. 2 / Monday, January 5, 1998 / Rules and Regulations 145

industry wished to harmonize with the

new Florida sizes.

This action increases the minimum

diameter for each of the size

designations by only 1⁄32 of an inch and

continues the 10 percent tolerance for

undersize and oversize tomatoes. Given

the diameter range of sizes allowable in

each specific size designation (i.e., 6×7,

6×6, 5×6), packers and repackers of

tomatoes should not have any problems

packing tomatoes in the box sizes

currently used.

Some commenters also contended

that the proposed 2⁄32 inch overlap

between sizes (currently 1⁄32 inch) will

allow Florida handlers to pack smallersized tomatoes in the next bigger size

designation in search of a better market

price. The Committee recommended

increases in the minimum and

maximum diameters for each of the

three recommended size designations.

For the 6 X 7 (currently Medium) size,

the minimum diameter was increased

from 2 8⁄32 to 2 9⁄32 inches, and the

maximum diameter was increased from

2 17⁄32 to 2 19⁄32 inches; for the 6×6

(currently Large) size, the minimum

diameter was increased from 2 16⁄32 to

2 17⁄32 inches, and the maximum

diameter was increased from 2 25⁄32 to

2 27⁄32 inches; and for the 5×6 (currently

Extra Large) size, the minimum

diameter was increased from 2 24⁄32 to

2 25⁄32 inches, with no maximum

diameter specified. These changes and

the 2⁄32’s inch overlap are intended to

facilitate the placement of slightly larger

tomatoes into the next smaller-size

designation, and the placement of

slightly larger sizes into the next biggersize designation.

As indicated earlier, the Committee

believes that the 2⁄32 inch overlap will

provide a more even distribution of

tomato shipments throughout the three

size designations, and that this will

enable handlers to make better decisions

on which size of tomatoes to pack. For

instance, tomatoes at the high end of the

Medium (6×7) size can either be packed

with Medium (6×7) sized tomatoes or

with Large (6×6) sized tomatoes. The

same increased flexibility would exist

for tomatoes packed at the high end of

the Large (6×6) size. Such tomatoes

could be packed as Large (6×6) sized or

packed as Extra Large (5×6) sized

tomatoes. The end result, however,

should be slightly larger tomatoes in

each of the size categories.

Another commenter contended that a

proposed numeric size designation

means nothing when tomatoes are

‘‘loose packed;’’ i.e., in 25-pound bulk

boxes. This is not correct. Under the

proposal, minimum and maximum

diameters for each numeric size

designation are specified and thus,

apply to volume filled or ‘‘loose

packed’’ tomatoes. The diameter ranges

provide handlers with flexibility to meet

the needs of each of their buyers.

One of the opposing commenters

suggested that if Florida wished to use

non-standard size designations and size

dimensions (i.e., designations and

dimensions different than those

specified in the U.S. standards) for

tomatoes, it should use other descriptive

terms like Regular, Jumbo, and Colossal

to replace Medium, Large, and Extra

Large. While alternative size

designations were considered, the

Committee’s best possible

recommendation was to adopt the

proposed numeric system. In discussing

this issue, the Committee was of the

view that this change to the size

designations was necessary to improve

pack appearance and compete in the

present marketplace.

Two opposition commenters

complained about the lack of time

provided to the Mexican industry to

examine the packing and marketing

effects of the proposed size increase.

They indicated that if the new sizes no

longer fit in the boxes used for place

packing tomatoes, Mexican growers will

be forced to incur very large expenses.

These expenses will be both from the

loss of existing inventory of boxes and

from having to invest in all new boxes.

The commenters further stated that,

over the past several years, the industry

largely has succeeded in standardizing

the size of boxes to best fit them on

pallets. According to the commenters,

increasing the size of the boxes would

undermine this effort, resulting in lost

space on every pallet and increased

transportation costs for every grower. As

explained earlier, Mexican packers

market a vast array of pack sizes in

several different boxes with different net

weights. Hence, the 1⁄32 inch increase in

the minimum size requirement is not

expected to require new boxes for place

packing.

Although the changes to the size

designations for Florida tomatoes will

not apply to imported tomatoes, the

following is intended to clarify how the

new requirements might be used by

Florida handlers. Under the proposal,

each of the minimum diameters for each

size designation are increased by only

1⁄32 inch and the maximum diameters

for each size designation are increased

by only 2⁄32 inch. Thus, it appears that

there is enough flexibility within each

size designation to avoid the need for

changing boxes. For example, if a buyer

desires a certain number of tomatoes in

each 25-pound box, the diameter size

ranges within each of the numeric sizes

are broad enough so that the handler

could meet that buyer’s needs.

Moreover, the current tolerance of 10

percent for offsize within each size

designation will continue in effect and

provide handlers additional flexibility

in meeting buyer needs, and in avoiding

the need for new boxes.

Two commenters objected to the 1⁄32

inch size increase because Mexican

growers and handlers will have to

change their sizing belts and incur an

unanticipated expense for new belts.

Florida growers and handlers also will

incur such costs. However, the Florida

industry believes that the expected

improvement in quality in the

marketplace will result in benefits far in

excess of the costs for new sizing belts.

Moreover, changing sizing belts is a

routine action since they have to be

replaced on a regular basis depending

on the amount of usage. Obviously, the

sizing belts last longer with limited use.

Only the minimum size requirement

will apply to importers of Mexican

tomatoes. Thus, the packers of imported

tomatoes only will need to buy enough

sizing belts to ensure that their tomatoes

meet the minimum size and not the

ranges specified in the Florida size

designations. The Department

understands that, in most cases, this

will require only one belt per packing

line to be purchased.

One commenter also requested that an

additional 60 days be added to the

comment period to allow the parties

most affected by the rule to comment

completely on the impact it will have.

A total of 30 days has been provided.

The Department believes that there has

been sufficient time to comment,

especially in view of the positions and

views discussed in the comments

received, whether in favor or opposed to

the proposed rule.

The Committee made its

recommendations for change at a

meeting held on September 5, 1997.

These changes were unanimously

recommended. As stated earlier, the

proposed size rule appeared in the

Federal Register on October 6, 1997,

with a comment period ending on

October 16, 1997. Two comments were

received requesting that the original

comment period for the proposed rule

be reopened. They were of the view that

more time was needed to review and

analyze the proposed changes and also

raised NAFTA concerns. The

Department did extend the comment

period to November 5, 1997, in

accordance with NAFTA and to allow

more time for review and evaluation.

Many commenters also requested a

60-day delay in the effective date of the

import regulation change to allow
146 Federal Register / Vol. 63, No. 2 / Monday, January 5, 1998 / Rules and Regulations

adequate time for all foreign producers

and handlers of foreign tomatoes to

comply with the minimum size

increase. One commenter requested that

Mexican growers be given until the

beginning of the 1998–99 season to

comply if the minimum sizes are

changed. The Department has carefully

reviewed this issue.

While both Florida tomato handlers

and importers will need time to order

new sizing belts and adjust their

equipment to meet the increased

minimum size requirements, we

understand that many of the Florida

handlers are or will be ready to comply

with the increased minimum size

requirement. However, we further

understand that many of the packers of

Mexican tomatoes may need more time

to comply with the size requirement.

Most of the opposition comments

requested an additional 60 days after the

publication of the final rule to comply

with the minimum size requirement.

The Department has decided to

provide sufficient time for the Florida

and import tomato industries to comply

with the minimum size requirements.

While a 60-day period would not be

reasonable for the domestic industry

especially since the Florida shipping

season is already underway, a 30-day

effective date from publication of the

final rule is reasonable and consistent

with the provisions of the Act. A 30-day

period will allow both the domestic and

imported tomato industries sufficient

time to purchase sizing belts and also

ship commodity that is already picked

and packed.

The Department has contacted the

three belt manufacturers to determine

belt availability and delivery schedules.

Based on this information, the

Department has decided to postpone the

effective date of this action to give

Florida tomato handlers and Mexican

tomato packers additional time to obtain

sizing belts. The effective date is

February 4, 1998.

In view of all the foregoing, the

Department has concluded that the

changes as proposed will advance the

interests of the Florida, other domestic,

and foreign tomato industries and

should be implemented.

In accordance with section 8e of the

Act, the United States Trade

Representative has concurred with the

issuance of this final rule.

After consideration of all relevant

matter presented, including the

information and recommendation

submitted by the Committee and other

available information, the comments

received, it is hereby found that this

rule, as hereinafter set forth, will tend

to effectuate the declared policy of the

Act.

List of Subjects in 7 CFR Parts 966 and

980

Marketing agreements, Reporting and

record keeping requirements, Tomatoes.

For the reasons set forth in the

preamble, 7 CFR parts 966 and 980 are

amended as follows:

PART 966—TOMATOES GROWN IN

FLORIDA

1. The authority citation for 7 CFR

part 966 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 966.323 is amended by

revising paragraphs (a)(1),(a)(2)(i) and

the table immediately following it,

(a)(2)(iii), and (d)(3) to read as follows:

§ 966.323 Handling regulation.

* * * * *

(a) Grade, size, container, and

inspection requirements. (1) Grade.

Tomatoes shall be graded and meet the

requirements specified for U.S. No. 1,

U.S. Combination, U.S. No. 2, or U.S.

No. 3, of the U.S. Standards for Grades

of Fresh Tomatoes, except that all

shipments of 6 × 7 size tomatoes must

grade U.S. No. 2 or better. When not

more than 15 percent of the tomatoes in

any lot fail to meet the requirements of

U.S. No. 1 grade and not more than onethird of this 15 percent (or 5 percent) are

comprised of defects causing very

serious damage including not more than

1 percent of tomatoes which are soft or

affected by decay, such tomatoes may be

shipped and designated as at least 85

percent U.S. No. 1 grade.

(2) Size. (i) All tomatoes packed by a

registered handler shall be at least 29⁄32

inches in diameter and shall be sized

with proper equipment in one or more

of the following ranges of diameters.

Tomatoes shipped outside the regulated

area shall also be sized with proper

equipment in one or more of the

following ranges of diameters.

Measurements of diameters shall be in

accordance with the methods prescribed

in § 51.1859 of the U.S. Standards for

Grades of Fresh Tomatoes.

Size designation

Inches

minimum diameter

Inches

maximum diameter

6 X 7 ............................. 29⁄32 219⁄32

Size designation

Inches

minimum diameter

Inches

maximum diameter

6 X 6 ............................. 217⁄32 227⁄32

5 X 6 ............................. 225⁄32

* * * * *

(iii) Only 6 × 7, 6 × 6, or 5 × 6, may

be used to indicate the above listed size

designations or containers of tomatoes.

* * * * *

(d) * * *

(3) For special packed tomatoes.

Tomatoes which met the inspection

requirements of paragraph (a)(4) of this

section which are resorted, regraded,

and repacked by a handler who has

been designated as a ‘‘Certified Tomato

Repacker’’ by the committee are exempt

from:

(i) The tomato grade classifications of

paragraph (a)(1) of this section;

(ii) The size classifications of

paragraph (a)(2) of this section, except

that the tomatoes shall be at least 2–9/

32 inches in diameter; and

(iii) The container weight

requirements of paragraph (a)(3) of this

section.

* * * * *

PART 980—VEGETABLES; IMPORT

REGULATIONS

3. Section 980.212 is amended by

revising paragraph (b)(1) to read as

follows:

§ 980.212 Import regulations; tomatoes.

* * * * *

(b) * * *

(1) From October 10 through June 15

of each season, tomatoes offered for

importation shall be at least 2–9/32

inches in diameter. Not more than 10

percent, by count, in any lot may be

smaller than the minimum specified

diameter. All lots with a minimum

diameter of 219⁄32 inches and larger shall

be at least U.S. No. 3 grade. All other

tomatoes shall be at least U.S. No. 2

grade. Any lot with more than 10

percent of its tomatoes less than 219⁄32

inches in diameter shall grade at least

U.S. No. 2.

* * * * *

Dated: December 30, 1997.

Sharon Bomer Lauritsen,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 97–34231 Filed 12–31–97; 8:45 am]

BILLING CODE 3410–02–P