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.

Rules and Regulations Federal Register

46069 

Vol. 83, No. 177 

Wednesday, September 12, 2018 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 929 

[Doc. No. AMS–SC–18–0012; SC18–929–2 

FR] 

Cranberries Grown in States of 

Massachusetts, et al.; Establishment of 

2018–19 Seasonal Volume Regulation 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule implements a 

recommendation to establish a grower 

allotment percentage for the 2018–19 

crop year and allows for the diversion 

of processed products from that year 

under the marketing order for 

cranberries grown in the production 

area (Order). This action also specifies 

handlers subject to the regulation, 

revises the definition of outlets for 

excess fruit, revises dates by which 

certain actions are due, and establishes 

exemptions to the action. 

DATES: Effective October 12, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Doris Jamieson, Marketing Specialist, or 

Christian D. Nissen, Regional Director, 

Southeast Marketing Field Office, 

Marketing Order and Agreement 

Division, Specialty Crops Program, 

AMS, USDA; Telephone: (863) 324– 

3375, Fax: (863) 291–8614, or Email: 

Doris.Jamieson@ams.usda.gov or 

Christian.Nissen@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Richard Lower, 

Marketing Order and Agreement 

Division, Specialty Crops Program, 

AMS, USDA, 1400 Independence 

Avenue SW, STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720– 

2491, Fax: (202) 720–8938, or Email: 

Richard.Lower@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This final 

rule, pursuant to 5 U.S.C. 553, amends 

regulations issued to carry out a 

marketing order as defined in 7 CFR 

900.2(j). This final rule is issued under 

Marketing Agreement and Order No. 

929, as amended (7 CFR part 929), 

regulating the handling of cranberries 

grown in the States of Massachusetts, 

Rhode Island, Connecticut, New Jersey, 

Wisconsin, Michigan, Minnesota, 

Oregon, Washington, and Long Island in 

the State of New York. Part 929 (referred 

to as the ‘‘Order’’) is effective under the 

Agricultural Marketing Agreement Act 

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

hereinafter referred to as the ‘‘Act.’’ The 

Cranberry Marketing Committee 

(Committee) locally administers the 

Order and is comprised of growers of 

cranberries operating within the 

production area, and a public member. 

The Department of Agriculture 

(USDA) is issuing this final rule in 

conformance with Executive Orders 

13563 and 13175. This action falls 

within a category of regulatory actions 

that the Office of Management and 

Budget (OMB) exempted from Executive 

Order 12866 review. Additionally, 

because this final rule does not meet the 

definition of a significant regulatory 

action, it does not trigger the 

requirements contained in Executive 

Order 13771. See OMB’s Memorandum 

titled ‘‘Interim Guidance Implementing 

Section 2 of the Executive Order of 

January 30, 2017 titled ‘Reducing 

Regulation and Controlling Regulatory 

Costs’ ’’ (February 2, 2017). 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. Order provisions provide that 

the Committee may recommend and 

implement, subject to USDA approval, 

volume control regulation which would 

decrease the available supply of 

cranberries whenever the Secretary of 

Agriculture (Secretary) finds that ‘‘such 

regulation will tend to effectuate the 

declared policy of the Act.’’ 

Accordingly, this rule establishes a 

marketable quantity and grower 

allotment percentage for cranberries 

produced during the 2018–19 crop year, 

beginning September 1, 2018, and 

ending August 31, 2019. 

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 final rule establishes a 

marketable quantity and grower 

allotment percentage for the 2018–19 

crop year. This rule is the result of the 

Committee’s recommendations made 

during its August 4, and August 31, 

2017, meetings, and a February 18, 

2018, email vote. This rule establishes a 

marketable quantity of 7.275 million 

barrels and a grower allotment 

percentage of 75 percent. This action 

also allows handlers to process up to 50 

percent of the excess cranberries they 

receive above their growers’ allotment, 

provided they divert an equivalent 

amount of 2018–19 cranberry processed 

products. It also establishes an 

exemption for organically grown 

cranberries, specifies handlers subject to 

the regulation, revises the definition of 

outlets for excess fruit, and revises dates 

by which certain actions are due. 

The Committee also recommended an 

exemption for organically grown 

cranberries, and an exemption of 2,500 

barrels for each grower. After much 

consideration, USDA determined the 

recommended grower exemption of 

2,500 barrels should be revised. 

Consequently, this final rule does not 

include the exemption of 2,500 barrels 

for each grower and instead exempts 

handlers that processed less than 

125,000 barrels during the 2017–18 

fiscal year, or handlers that did not have 

carryover inventory at the end of the 

2017–18 fiscal year. Accordingly, 

growers delivering their fruit to exempt 

handlers are not subject to the 

allotment. 

In addition, in a February 18, 2018, 

vote by email, the Committee voted 

unanimously to adjust reporting dates 

associated with the allotment 

regulation. These changes were 

previously discussed and supported by 

the Committee at a meeting on April 22, 


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46070 Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Rules and Regulations 

2014, as part of the consideration of 

another volume regulation for which a 

rule was not issued. 

The recommendations included in 

this rule will adjust supply to more 

closely meet market demand, improve 

grower and handler returns, and help 

reduce inventory. 

Sections 929.49 and 929.52 provide, 

in part, authority to establish a 

marketable quantity and grower 

allotment percentage. Section 929.14 

defines marketable quantity as the 

volume of cranberries needed to meet 

market demand and provide for an 

adequate carryover into the next season. 

The allotment percentage is derived by 

dividing the marketable quantity by the 

total of all growers’ sales histories. 

Section 929.48 outlines procedures for 

computing a grower’s sales history. 

Section 929.49 also prescribes how 

the grower allotment percentage is 

calculated and distributed to growers 

and handlers. Each grower’s allotment 

volume is calculated by multiplying the 

individual’s sales history by the 

allotment percentage. A grower’s 

allotment is the total volume a handler 

may purchase from, or handle on behalf 

of, that grower during a year of volume 

regulation. Cranberries received by a 

handler that exceed the sum of their 

growers’ allotments can be used to fill 

unused allotment. Any remaining 

cranberries are defined as excess 

cranberries as defined in § 929.59, 

which also outlines the procedures and 

dates by which excess cranberries are to 

be diverted. Section 929.61 prescribes 

outlets for excess cranberries, which are 

further defined in § 929.104. 

In addition, § 929.50 provides 

authority for the transfer of sales history 

and annual allotment. Section 929.51 

requires the Committee to consider 

market conditions, including supply 

and demand, prior to recommending an 

allotment percentage, and that any 

recommendation be made by March 1. 

Section 929.58(a) provides the authority 

to exempt from any or all requirements 

the handling of cranberries in such 

minimum quantities as the Committee, 

with the approval of the Secretary, may 

prescribe. Section 929.58(b) provides, in 

part, the authority to exempt from any 

or all requirements the handling of 

cranberries of such forms or types, 

including organic cranberries, as the 

Committee, with the approval of the 

Secretary, may prescribe. 

Domestic cranberry production has 

been increasing over the past few years, 

up from 8.0 million barrels in 2012 to 

9.6 million barrels in 2016. During the 

last few years, demand has remained 

relatively flat, and has not kept pace 

with the increases in supply. This has 

led to increasing levels of inventories. 

Ending inventory levels increased from 

5.8 million barrels in 2012 to 9.7 million 

barrels in 2016. 

Demand for cranberries is inelastic, 

meaning changes in consumer price 

have a minimal effect on total sales. 

However, grower prices are very 

sensitive to changes in supply. 

Consequently, higher inventory levels 

place downward pressure on grower 

prices for cranberries and reduce grower 

returns. Data reviewed by the 

Committee indicates that the price per 

barrel received by some growers has 

fallen from $30 a barrel in 2011 to $10 

a barrel in 2016. With the cost of 

production estimated at approximately 

$35 a barrel, for many growers returns 

have fallen below the cost of 

production. 

The Committee met on August 4, 

2017, and again on August 31, 2017, and 

discussed the estimated levels of supply 

and demand and how market conditions 

were impacting the industry. The 

Committee discussed the approximate 

levels of production for the 2017–18 

season, forecasting production at 

approximately 9.1 million barrels. 

Carryover inventory was estimated at 

approximately 9.9 million barrels and 

foreign acquired cranberries were 

expected to provide an additional 2.1 

million barrels, for a total available 

supply of approximately 21.1 million 

barrels for the year. After accounting for 

shrinkage, the Committee agreed on an 

adjusted supply of 20.4 million barrels 

for the 2017–18 crop year. 

Using these numbers, with estimated 

sales of 9.5 million barrels for 2017–18, 

the Committee calculated a potential 

carryover for the 2018–19 season of 10.9 

million barrels. This is an 

approximately one million barrel 

increase from the carryover inventory 

for the 2017–18 crop year. Based on 

these numbers, carryover inventory for 

the 2018–19 crop year would be 

approximately 115 percent of annual 

sales. 

In discussing market conditions, the 

Committee recognized that sales have 

been relatively flat. The Committee also 

noted supply has been exceeding 

demand by about one million barrels a 

year. Using crop and sales estimates 

similar to 2017–18, and the estimated 

carryover from the 2017–18 season of 

10.9 million barrels, the potential 

carryover supply at the end of the 2018– 

19 crop year could increase by another 

one million barrels to 11.9 million if no 

action is taken to regulate supply. 

In reviewing these numbers, the 

Committee agreed the industry is faced 

with a large inventory that continues to 

build. To address the problems 

associated with oversupply and to try to 

stabilize grower returns, the Committee 

discussed the need to establish volume 

regulation. The Committee considered 

several options, including establishing 

free and restricted percentages under a 

handler withholding for the 2017–18 

crop year, establishing a grower 

allotment for the 2018–19 season, or 

recommending both regulations. 

Considering the levels of inventory 

and low grower returns, the Committee 

voted to recommend a handler 

withholding, setting the free and 

restricted percentages of 85 percent and 

15 percent, respectively, for the 2017–18 

season. AMS agreed with the 

Committee’s analysis and 

recommendation and published the rule 

establishing these percentages in the 

Federal Register on April 4, 2018 (83 FR 

14350). The Committee estimated that 

the 15 percent restriction would remove 

approximately one million barrels from 

inventory, helping to maintain 

inventories at current levels. While the 

Committee recognized a small 

restriction would not immediately 

balance supply with demand, even a 

small restriction would remove a 

portion of the volume from the market 

and help prevent an additional increase 

in inventory. 

With the handler withholding 

removing an estimated one million 

barrels from the market, the industry 

would still have approximately 10 

million barrels remaining in inventory. 

Given the static demand and anticipated 

market conditions for the 2018–19 fiscal 

year, the Committee also recommended 

establishing a grower allotment 

percentage for the 2018–19 fiscal year. 

The Committee discussed various 

levels of restriction, being sensitive to 

the impact volume control could have 

on small growers and handlers. Some 

small handlers are able to sell all their 

production each year and do not 

maintain an inventory. Several 

Committee members stated a large 

restriction would place a hardship on 

these small handlers. However, the 

Committee also recognized that volume 

control measures could help increase 

grower returns by helping to align 

supply with demand. 

In addition, establishing an allotment 

regulation can help growers reduce 

production costs. Growers could choose 

to take bogs out of production, or reduce 

inputs such as fertilizer and pesticides 

in order to reduce their production 

volume to match their allotment. These 

and other steps could help growers 

reduce their costs of production for the 

2018–19 crop. 

Based on the information available, 

the Committee recommended 


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Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Rules and Regulations 46071 

establishing a marketable quantity of 

7.275 million barrels and an allotment 

percentage of 75 percent for the 2018– 

19 crop year. With volume regulation, 

returns are expected to be higher than 

without volume regulation. This 

increase is beneficial to all growers and 

handlers regardless of size, and 

enhances total revenues in comparison 

to no volume regulation. Establishing an 

allotment percentage allows the 

industry to help stabilize supplies. This 

rule could remove a potential 2 million 

barrels from supply, reduce industry 

inventory, and increase industry 

returns. This rule adds a new § 929.253 

to establish the marketable quantity and 

grower allotment. 

The Committee also recommended 

that handlers have the option to receive 

cranberries over their grower allotment 

and process up to 50 percent of the 

excess cranberries received rather than 

divert them in fresh form, as currently 

required. Handlers that do so need to 

divert an amount of 2018–19 cranberry 

processed products equivalent to the 

volume of excess cranberries processed. 

The Committee made this 

recommendation recognizing that 

processing fresh fruit to produce one of 

its top-selling items, sweetened dried 

cranberries (SDC), results in juice 

concentrate as a by-product. A 

significant amount of current inventory 

is in the form of juice concentrate. By 

allowing handlers to process a portion 

of the excess cranberries they receive, 

more fresh cranberries are available to 

produce products requiring whole 

cranberries, such as SDC, and the 

diversion of concentrate will help 

prevent additional build-up of 

inventory. Handlers still have the option 

to divert fresh berries as excess supply. 

To allow for the diversion of 

processed products, § 929.104(b), which 

currently prohibits the handling of 

excess fruit, is removed. To ensure the 

diversion of processed products in lieu 

of fresh cranberries is correctly 

accounted for, the final rule for volume 

regulation for the 2017–18 season (83 

FR 14350) adds guidance under 

§ 929.107 along with a conversion table. 

The table recognizes different 

conversion equivalencies of cranberries 

to processed product based on the 

volume of Brix concentrate. 

Brix is the method for measuring the 

amount of sugar contained in the 

cranberry products, and the industry 

average for concentrate is 50 Brix. The 

Committee acknowledged that the Brix 

level can vary depending on the 

growing region and farming practices. 

The table helps ensure that the 

diversion of processed product in lieu of 

fresh berries is applied equitably among 

all handlers. 

Using the conversion table, handlers 

can determine the amount of cranberry 

concentrate they need to divert, in lieu 

of fresh berries, to cover the fresh 

cranberry equivalent of any excess 

cranberries processed. Juice concentrate 

should comprise the vast majority of 

processed product used for diversion. 

Should requests be made to use other 

processed products for diversion, 

conversion rates for those products will 

be provided by the Committee based on 

information provided by the requesting 

handler. 

For example, a grower with a sales 

history of 1,000 barrels will have an 

allotment of 750 barrels (1,000 × .75). If 

the grower delivered all 1,000 barrels to 

the handler, the handler will have 250 

barrels of excess fruit. Under this final 

rule, the handler could divert 250 

barrels of fresh fruit to approved outlets 

or divert half (125 barrels of fresh fruit) 

and process half, diverting a 125 barrel 

equivalent in 2018–19 processed 

product. 

The Committee also recommended 

changes to date requirements currently 

specified in the Order. Section 929.59(b) 

currently states that ‘‘prior to January 1, 

or such other date as recommended by 

the committee and approved by the 

Secretary, handlers holding excess 

cranberries shall submit to the 

committee a written plan outlining 

procedures for the systematic disposal 

of such cranberries in the outlets 

prescribed in § 929.61.’’ The Committee 

agreed the date for submitting disposal 

plans should be extended in order to 

give handlers more time to consider 

how to divert their excess cranberries. 

Therefore, the Committee recommended 

changing the deadline prescribed in 

§ 929.59(b) from January 1 to March 1 of 

the regulated season. 

Section 929.59(c) states that ‘‘prior to 

March 1, or such other date as 

recommended by the committee and 

approved by the Secretary, all excess 

cranberries shall be disposed of 

pursuant to § 929.61.’’ Given the change 

in the due date for the diversion plans, 

the Committee agreed that this date 

should also be changed to provide 

handlers with enough time to comply 

with this requirement. Therefore, the 

Committee recommended changing the 

date by which diversion is to be 

completed from March 1 to August 31. 

AMS agrees with the Committee’s 

analysis and recommendation and is 

issuing this rule to add a new § 929.159 

to make these date changes. 

Section 929.62(a) requires each 

grower to file a report with the 

Committee by January 15 of each year 

providing the following information: 

Total acreage harvested and whether 

owned or leased; total commercial 

cranberry sales in barrels from such 

acreage; the amount of acres either in 

production but not harvested, or taken 

out of production, and the reason(s) 

why; the amount of new or replanted 

acreage coming into production; the 

name of the handler(s) to whom 

commercial cranberry sales were made; 

and such other information as may be 

needed for implementation and 

operation of this section. Growers might 

not have all necessary information to 

complete the report by the current 

deadline. Therefore, the Committee 

recommended changing the grower 

reporting date from January 15 to March 

1. 

The Committee also recommended 

organically grown cranberries be exempt 

from this regulation as they serve a 

niche market and represent a very small 

portion of the total crop. All other 

cranberry production, including fresh 

cranberries, are subject to regulation 

under the grower allotment volume 

regulation. 

To address the burden the volume 

regulation would have on small growers 

and handlers, the Committee also 

recommended providing an exemption 

of 2,500 barrels for all growers. Under 

the Committee’s recommendation, the 

exemption would be applied following 

the calculation of a grower’s allotment. 

However, after much consideration, 

USDA determined the exemption 

recommendation should be revised. 

Rather than provide an exemption of 

2,500 barrels for each grower, this action 

exempts small handlers who processed 

less than 125,000 barrels from the 

allotment requirement. Further, 

handlers who did not have carryover 

inventory at the end of the 2017–18 

fiscal year are also exempt from the 

allotment requirement. Accordingly, 

growers delivering their fruit to exempt 

handlers are not subject to the 

allotment. 

These changes allow handlers who 

have matched their production with 

market demand to continue to serve 

their customer base and maintain their 

market share. Small growers also have 

the option of delivering their fruit to 

handlers who are not subject to the 

regulation. Handlers subject to the 

allotment percentage should be able to 

meet any market shortfalls by utilizing 

cranberries or cranberry products 

available in inventory. The provision 

allowing handlers to process a portion 

of their excess cranberries also helps 

provide some flexibility. 

With this action, only those handlers 

carrying inventory are subject to 


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46072 Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Rules and Regulations 

meeting the allotment requirement. In 

reviewing the Committee’s 

recommendation and other available 

industry information, USDA has 

determined that existing inventories in 

excess of 9 million barrels are putting 

the most downward pressure on returns 

to both growers and handlers. 

Consequently, this rule puts more focus 

on reducing the volume in inventory. 

Section 929.125 provides authority for 

a grower to request a review by an 

appeals subcommittee if the grower is 

dissatisfied with his or her sales history 

calculation provided by the Committee. 

The grower must request the review 

within 30 days after receipt of the 

Committee’s determination of sales 

history and must submit documentation 

showing why he or she believes the 

calculation is inaccurate. Within 15 

days after notification of the appeals 

subcommittee’s decision, if the grower 

is not satisfied with the decision, the 

grower may further appeal to the 

Secretary. 

A grower may transfer all or part of 

their allotment to another grower, 

provided that the transferred allotment 

remains assigned to the same handler. 

Transfers of allotment between growers 

having different handlers may occur 

with the consent of both handlers. All 

such transfers have to be reported to the 

Committee. After all allotment transfers 

have occurred, any unused allotment 

would be transferred to the Committee. 

The Committee would then redistribute 

any unused allotment to handlers 

having excess cranberries in an amount 

proportionate to each handler’s total 

allotment. These provisions help ensure 

that excess supply is utilized, to the 

extent possible, through unfilled 

allotment. 

The Committee considered the 

estimated level of production and 

anticipated demand, and determined 

that without some action on the part of 

the Committee, inventory levels will 

continue to increase throughout the 

2018–19 season. The Committee 

believes using the volume control 

authorities in the Order will help 

stabilize marketing conditions for 

cranberries by helping to adjust supply 

to meet market demand and improve 

grower returns. 

Accordingly, this final rule 

establishes a grower allotment at 75 

percent for the 2018–19 season. It also 

gives handlers the option to process up 

to 50 percent of the excess cranberries 

they receive above their growers’ 

allotment, provided they divert an 

equivalent amount of 2018–19 cranberry 

processed products. This final rule also 

exempts organically grown cranberries, 

specifies handlers subject to the 

regulation, revises the definition of 

outlets for excess fruit, and revises dates 

by which certain actions are due. 

Final Regulatory Flexibility Analysis 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA) (5 

U.S.C. 601–612), the Agricultural 

Marketing Service (AMS) has 

considered the economic impact of this 

action on small entities. Accordingly, 

AMS has prepared this final regulatory 

flexibility analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

businesses subject to such actions in 

order that small businesses will not be 

unduly or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and rules issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. 

There are approximately 1,100 

cranberry growers in the regulated area 

and approximately 65 cranberry 

handlers subject to regulation under the 

Order. Small agricultural growers are 

defined by the Small Business 

Administration (SBA) as those having 

annual receipts of less than $750,000, 

and small agricultural service firms are 

defined as those whose annual receipts 

are less than $7,500,000 (13 CFR 

121.201). 

According to industry and Committee 

data, the average grower price for 

cranberries during the 2016–17 season 

was $23.50 per barrel and total sales 

were approximately 9.5 million barrels. 

The value for cranberries that year 

totaled $223,250,000 ($23.50 per barrel 

multiplied by 9.5 million barrels). 

Taking the total value of production for 

cranberries and dividing it by the total 

number of cranberry growers provides 

an average return per grower of 

$202,955. Using the average price and 

utilization information, and assuming a 

normal distribution, the majority of 

cranberry growers receive less than 

$750,000 annually. 

According to USDA’s Market News 

report, the average free on board (f.o.b.) 

price for cranberries was approximately 

$30.00 per barrel. Multiplying the f.o.b. 

price by total utilization of 9.5 million 

barrels results in an estimated handlerlevel cranberry value of $285 million. 

Dividing this figure by the number of 

handlers (65) yields an estimated 

average annual handler receipt of $4.3 

million, which is below the SBA 

threshold for small agricultural service 

firms. Therefore, the majority of growers 

and handlers of cranberries may be 

classified as small entities. 

While cranberry production has 

continued to rise, demand has failed to 

keep pace, and inventories have been 

increasing. In an industry such as 

cranberries, product can be stored in 

inventory for long periods of time. Large 

inventories are costly to maintain, 

difficult to market, and have a pricedepressing effect. When supply 

outpaces demand and results in high 

levels of inventories, grower and 

handler returns can be negatively 

impacted. 

Demand for cranberries is inelastic, 

meaning changes in price have a 

minimal effect on total sales volume. 

However, grower prices are very 

sensitive to changes in supply. A grower 

allotment program results in a decrease 

in supply as handlers can only purchase 

a portion of a grower’s production, 

which is based on the grower’s past 

sales history. Even a small shift in 

supply can have a positive effect on 

grower prices. Therefore, using a grower 

allotment program to reduce supply 

should increase grower prices and 

revenues. 

This final rule establishes a grower 

allotment of 75 percent for the 2018–19 

crop year. It also allows handlers to 

process up to 50 percent of the excess 

cranberries they receive above their 

growers’ allotment, provided they divert 

an equivalent amount of 2018–19 

cranberry processed products. In 

addition, this rule exempts organically 

grown cranberries, specifies handlers 

subject to the regulation, revises the 

definition of outlets for excess fruit, and 

revises dates by which certain actions 

are due. These actions are designed to 

help stabilize marketing conditions, 

reduce burdensome inventories, and 

improve grower and handler returns. 

This rule revises §§ 929.104 and 929.105 

and establishes new §§ 929.159 and 

929.253. The authority for these actions 

is provided for in §§ 929.48, 929.49, 

929.51, 929.52, 929.58, 929.59, 929.61, 

and 929.62. These changes are based on 

Committee recommendations from 

meetings on August 4 and August 31, 

2017, and a February 18, 2018, email 

vote. 

While these actions could result in 

some additional costs to the industry, 

the benefits are expected to outweigh 

them. The purpose of establishing an 

allotment percentage is to address 

oversupply conditions and to stabilize 

grower prices. The industry has a 

significant volume in inventory, and 

this has had a negative impact on 

grower and handler returns. Without 

volume control, inventories will likely 

continue to increase, further lowering 

returns. 


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Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Rules and Regulations 46073 

Inventories have significantly 

increased since 2011. In 2011, existing 

inventories were around 4.6 million 

barrels. By the end of the 2016–17 

season, inventories were approximately 

9.9 million barrels, and by the end of 

the 2017–18 season, inventories are 

projected to be approximately 10.9 

million barrels. Inventories as a 

percentage of total sales have also been 

increasing from approximately 50 

percent in 2010 to approximately 103 

percent in 2016, and could reach an 

anticipated 115 percent after the 2017– 

18 season. These inventories have had 

a depressing effect on grower prices, 

which for many growers have fallen 

below their cost of production. 

Retail demand for cranberries is 

highly inelastic, which indicates 

changes in consumer prices do not 

result in significant changes in the 

quantity demanded. Consumer prices 

are also not significantly impacted by 

minor changes in cranberry supplies. 

Therefore, this action should have little 

or no effect on consumer prices and 

should not result in a reduction in retail 

sales. However, even a small shift in 

supply could increase grower and 

handler returns. The use of allotment 

percentages will likely have a positive 

impact on grower and handler returns 

for this crop year. 

This rule will result in some fruit 

being taken off the market. However, a 

sufficient amount of fruit will still be 

available to supply all aspects of the 

market. In addition, allowing handlers 

the option to process up to 50 percent 

of the excess cranberries they receive 

above their growers’ allotment, provided 

they divert an equivalent amount of 

2018–19 cranberry processed products, 

provides handlers some additional 

flexibility and may help reduce 

inventories of juice concentrate, one of 

the largest segments of existing 

inventory. 

There are also secondary outlets 

available for excess fruit, including 

foreign markets except Canada, 

charitable institutions, nonhuman food 

use, and research and development 

projects. While these alternatives may 

provide different levels of return than 

sales to primary markets, they play an 

important role for the industry. In 

addition, if demand is greater than 

anticipated, there are significant 

amounts of fruit in inventory that can be 

utilized to meet demand. 

This action also exempts small 

handlers who processed less than 

125,000 barrels in 2017–18 from the 

allotment percentage. Consequently, 

small handlers whose acquired volume 

is 125,000 barrels or less are exempt 

from the allotment volume restriction. 

This will reduce the burden the volume 

restriction has on small handlers and 

their growers. 

In addition, handlers who did not 

have carryover inventory at the end of 

the 2017–18 fiscal year are also exempt 

from the allotment percentage. This 

allows handlers that have matched their 

production with market demand to 

continue to serve their customer base 

and maintain their market share. 

Handlers subject to the restriction 

should be able to meet any shortfalls by 

utilizing cranberries or cranberry 

products they have in inventory. 

Further, making the recommendation 

to regulate the volume handled under a 

grower allotment program could result 

in some cost savings for growers 

depending upon what actions they may 

take to adjust supply. 

As the allotment represents a 

percentage of the grower’s sales history, 

the costs, when applicable, are 

proportionate and should not place an 

extra burden on small entities as 

compared to large entities. Likewise, 

growers and handlers, regardless of size, 

benefit from the stabilizing effects of 

this action. 

One alternative considered by the 

Committee was not to impose a volume 

regulation during the 2018–19 crop 

year. However, Committee members 

believed that inventory levels were such 

that some form of volume control was 

necessary to help stabilize marketing 

conditions. 

The Committee also considered other 

allotment percentage levels. However, 

some members were concerned that 

setting an allotment percentage that was 

too restrictive could negatively impact 

small growers. The Committee also 

considered not recommending a 

provision to allow a percentage of 

excess cranberries to be processed into 

cranberry products. The Committee 

determined that allowing handlers to 

process up to 50 percent of the excess 

cranberries they receive above their 

growers’ allotment would provide 

additional volumes of fresh cranberries 

for processing and would provide 

handlers some flexibility while not 

adding additional juice concentrate to 

the existing inventory levels. Therefore, 

for the reasons mentioned above, these 

alternatives were rejected by the 

Committee. 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

Chapter 35), the Order’s information 

collection requirements have been 

previously approved by OMB and 

assigned OMB No. 0581–0189, Fruit 

Crops. No changes in those 

requirements as a result of this action 

are necessary. Should any changes 

become necessary, they would be 

submitted to OMB for approval. 

This final rule will not impose any 

additional reporting or recordkeeping 

requirements on either small or large 

cranberry growers or handlers. As with 

all Federal marketing order programs, 

reports and forms are periodically 

reviewed to reduce information 

requirements and duplication by 

industry and public sector agencies. 

As noted in the initial regulatory 

flexibility analysis, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this final rule. 

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, the Committee’s meetings 

were widely publicized throughout the 

cranberry industry and all interested 

persons were invited to attend the 

meetings and participate in Committee 

deliberations on all issues. Like all 

Committee meetings, the August 4, 2017 

and August 31, 2017 meetings were 

public meetings and all entities, both 

large and small, were able to express 

views on these issues. 

A proposed rule concerning this 

action was published in the Federal 

Register on April 27, 2018 (83 FR 

18462). Copies of the proposed rule 

were sent via email to Committee 

members and cranberry handlers. 

Additionally, the rule was made 

available through the internet by USDA 

and the Office of the Federal Register. A 

30-day comment period ending May 29, 

2018, was provided to allow interested 

persons to respond to the proposal. 

During the comment period, 24 

comments were received in response to 

the proposal. Of the comments received, 

12 were in support of the regulation, but 

also requested some changes to the 

proposal, 11 were opposed to the 

regulation, and 1 took no position. 

Comments: In the comments that 

supported volume regulation, but with 

changes from what was included in the 

proposed rule, the 12 commenters stated 

the volume regulation was a way to 

reduce supply and benefit the industry. 

These 12 comments also specifically 

supported the handler’s flexibility to 

divert excess fruit, stating it would help 

handlers maximize the value of the 

fruit. 

The 12 comments also suggested 

handlers be allowed to divert 100 

percent of their excess fruit in processed 

form, rather than the 50 percent allowed 

under the proposed rule. They stated 


daltland on DSKBBV9HB2PROD with RULES
46074 Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Rules and Regulations 

that with a significant amount of the 

current inventory in the form of juice 

concentrate, this would help prevent 

additional build-up of inventory. 

Response: While a significant portion 

of existing inventory is concentrate, not 

all handlers produce concentrate or 

concentrate as a byproduct of SDC 

production. Allowing the use of 50 

percent of 2018–19 cranberry products 

to meet the excess fruit restriction 

recognizes the need to reduce cranberry 

concentrate inventory, while also 

addressing the overall oversupply facing 

the industry. 

Comments: Eleven of these 

commenters also expressed that the 

exemption for small handlers does not 

help small growers. These commenters 

asked USDA to reconsider its decision 

to do away with the 2,500 barrel 

exemption for each grower as 

recommended by the Committee. 

Response: In reviewing the 

Committee’s recommendation and other 

available industry information, USDA 

has determined that existing inventories 

in excess of 9 million barrels are putting 

the most downward pressure on returns 

to both growers and handlers. 

Consequently, this rule puts more focus 

on reducing the volume in inventory, 

which should benefit both small 

growers and small handlers. 

Rather than provide an exemption of 

2,500 barrels for each grower, an action 

which would have exempted nearly 

2.75 million barrels, this action exempts 

small handlers who processed less than 

125,000 barrels during the 2017–18 

fiscal year from the allotment 

requirement. Small handlers processing 

less than 125,000 barrels make up 

nearly 88 percent of all handlers, yet 

combined, account for less than 10 

percent of the total volume of 

cranberries processed. Based on 

Committee data, these small handlers 

were holding little or no volume in 

inventory at the end of the 2016–17 

season. USDA’s revisions to the 

Committee’s proposal therefore exempts 

these handlers from the allotment 

requirement. Although focused on 

handlers, this change is expected to 

have a positive impact on grower 

returns by reducing overall supply in 

the market. Additionally, small growers 

would have the option of delivering 

their fruit to handlers who are not 

subject to the regulation. 

In addition, handlers who did not 

have carryover inventory at the end of 

the 2017–18 fiscal year are also exempt. 

USDA believes that this will allow 

handlers who have matched their 

production with market demand to 

continue to serve their customer base 

and maintain their market share. Only 

those handlers carrying inventory will 

be subject to meeting the allotment 

requirement. 

Handlers subject to the allotment 

percentage should be able to meet any 

market shortfalls by utilizing cranberries 

or cranberry products available in 

inventory. The provision allowing 

handlers to process a portion of their 

excess cranberries also helps provide 

some flexibility. 

Comment: Another comment stated 

they did not support using 2017 

deliveries to determine the 2018 

exemptions, and that the no carryover 

inventory exemption is flawed. 

Response: Regarding using 2017–18 

information to determine 2018–19 

exemptions, this is a grower’s 

production allotment volume 

regulation. As such, it is important for 

growers to have an idea of what their 

allotment will be for the upcoming 

season. Growers can then use that 

information to make determinations 

regarding their production. By using the 

information from 2017–18, USDA 

provided growers with exemptions they 

could use to determine whether their 

production would be subject to the 

allotment, or the potential opportunity 

to choose to deliver their production to 

an exempt handler. 

Comments: Of the 11 comments in 

opposition of the proposed rule, five 

support the reinstatement of the 2,500 

barrel exemption for each grower as 

discussed above. Four stated the 

proposed change would do little or 

nothing to accomplish USDA’s stated 

goal of controlling the overage of 

cranberry concentrate. 

Response: Concentrate represents a 

large portion of existing inventory. 

However, at the end of the 2016–17 

fiscal year, of the estimated 9.7 million 

barrels in inventory, approximately 4.2 

million barrels were frozen berries, 

while approximately 3.7 million barrels 

were concentrate. The rule provides for 

the diversion of processed product to 

meet 50 percent of the restriction as a 

way to reduce the inventory of 

concentrate. However, reducing overall 

supply, including whole fruit, is also 

important in addressing the current 

level of inventory. 

Comments: Six comments stated that 

the proposed regulation would 

negatively impact independent growers 

and another stated that this would hurt 

small growers. Four commenters stated 

this regulation would adversely affect 

midsize handlers. 

Response: While these actions could 

result in some additional costs to the 

industry, the allotment percentage 

established by this rule applies 

uniformly to all those regulated, 

regardless of size. A grower’s allotment 

is the total volume a handler may 

purchase from, or handle on behalf of, 

that grower during a year of volume 

regulation. Each grower’s allotment 

volume is calculated by multiplying the 

individual’s sales history by the 

allotment percentage. As the allotment 

percentage is applied to each grower’s 

sales history, the costs, when 

applicable, are proportionate and 

should not place an extra burden on 

small entities as compared to large 

entities. 

Further, the benefits are expected to 

outweigh any additional costs and 

positively impact all growers and 

handlers, regardless of size. The 

industry has a significant volume in 

inventory, and this has had a negative 

impact on all grower and handler 

returns. If steps are not taken to reduce 

the level of inventory, these downward 

pressures will persist. The purpose of 

establishing the allotment percentage is 

to address the oversupply conditions 

which are negatively impacting industry 

returns. Generally, reducing supply 

levels results in prices increasing for 

growers and handlers. Therefore, 

lowering inventory levels is expected to 

result in positive returns for the entire 

industry. 

Comments: Four comments stated the 

shortage in the 2017 crop makes the 

grower allotment unnecessary and 

harmful, and the rule will create an 

artificial spike in market price for 

finished goods. Another commenter 

questioned regulating cranberries when 

Canadian production is not subject to 

the allotment. 

Response: In reviewing the 

Committee’s recommendation and other 

available industry information, USDA 

has determined that existing inventory 

is putting the most downward pressure 

on returns to both growers and handlers. 

Even with the shortfall in the 2017 crop 

and the handler withhold established 

for the 2017–18 season, the industry 

will enter the 2018–19 season with 

inventory levels that will continue to 

negatively affect industry returns. In 

addition, existing inventory, combined 

with an additional 9 million barrels of 

anticipated 2017 domestic production, 

will provide a more than ample 

domestic supply to meet sales 

requirements. Consequently, this 

regulation should have little effect on 

consumer prices. Moreover, while the 

Order does not regulate the volume of 

imports, given the current levels of 

available domestic supply, this rule is 

not expected to lead to an increase in 

imported product. 

Comment: One comment in 

opposition to the proposal stated it 


daltland on DSKBBV9HB2PROD with RULES
Federal Register / Vol. 83, No. 177 / Wednesday, September 12, 2018 / Rules and Regulations 46075 

would be implemented too late, as 

growers have already made their 

production decisions. It further stated 

the rule should be implemented next 

season when they have more time to 

make economic decisions relating to 

their crop. 

Response: Utilizing a production 

allotment allows growers to make 

adjustments to reduce their costs. Given 

the oversupply, it is important to take 

action on this issue. Further, growers 

have been aware of this 

recommendation for some time, and the 

proposed rule on this action published 

on April 27, 2018. 

Comment: Another commenter stated 

the proposed regulation originated from 

the major cooperative. 

Response: As stated above, the 

proposal for production allotment was 

discussed and ultimately recommended 

by the Committee for USDA’s 

consideration at the August 4, 2017 and 

August 31, 2017 meetings. The 

Committee is comprised of growers of 

cranberries operating within the 

production area and a public member, 

and all meetings are open to industry 

and public participation. 

Comment: The one comment taking a 

neutral position on the proposed action 

also indicated support for reestablishing 

the 2,500-barrel exemption for each 

grower, as recommended by the 

Committee, should USDA decide to go 

forward with the regulation. 

Response: For the reasons given 

above, the 2,500-barrel exemption for 

growers will not be reestablished. 

Comments: Additional comments 

were received that addressed issues 

outside the scope of the proposed rule. 

For the reasons discussed above, no 

changes will be made to the rule as 

proposed, based on the comments 

received. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

be viewed at: http://www.ams.usda.gov/ 

rules-regulations/moa/small-businesses. 

Any questions about the compliance 

guide should be sent to Richard Lower 

at the previously mentioned address in 

the FOR FURTHER INFORMATION CONTACT

section. 

After consideration of all relevant 

matter presented, including the 

information and recommendation of the 

Committee and other available 

information, 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 Part 929 

Cranberries, Marketing agreements, 

Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, 7 CFR part 929 is amended as 

follows: 

PART 929—CRANBERRIES GROWN IN 

STATES OF MASSACHUSETTS, 

RHODE ISLAND, CONNECTICUT, NEW 

JERSEY, WISCONSIN, MICHIGAN, 

MINNESOTA, OREGON, 

WASHINGTON, AND LONG ISLAND IN 

THE STATE OF NEW YORK 

■ 1. The authority citation for part 929 

continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

Subpart B—Administrative 

Requirements 

■ 2. In § 929.104, revise paragraph (a) 

introductory text and remove and 

reserve paragraph (b). 

The revision reads as follows: 

§ 929.104 Outlets for excess cranberries. 

(a) In accordance with § 929.61, 

excess cranberries may be diverted only 

to the following noncommercial or 

noncompetitive outlets: 

* * * * * 

■ 3. In § 929.105, add paragraph (c) to 

read as follows: 

§ 929.105 Reporting. 

* * * * * 

(c) Beginning with crop year 2018–19, 

the due date for the grower report 

required under § 929.62(a) is changed to 

March 1. 

■ 4. Add § 929.159 to read as follows: 

§ 929.159 Excess cranberries. 

(a) Beginning with crop year 2018–19, 

handlers holding excess cranberries 

shall submit to the Committee a written 

plan outlining procedures for the 

systematic disposal of such cranberries 

as specified in § 929.59(b) by March 1. 

(b) Beginning with crop year 2018–19, 

all excess cranberries shall be diverted 

as specified in § 929.59(c) prior to 

August 31. 

■ 6. Add § 929.253 to read as follows: 

§ 929.253 Marketable quantity and 

allotment percentage for the 2018–19 crop 

year. 

(a) The marketable quantity for the 

2018–19 crop year is set at 7.275 million 

barrels and the allotment percentage is 

designated at 75 percent. 

(b) Organically grown fruit shall be 

exempt from the volume regulation 

requirements of this section. Small 

handlers who processed less than 

125,000 barrels during the 2017–18 

fiscal year are exempt from the volume 

regulation requirements of this section. 

Any handler who did not have 

carryover inventory at the end of the 

2017–18 fiscal year is also exempt from 

the volume regulation requirements of 

this section. 

(c) Handlers have the option to 

process up to 50 percent of the excess 

cranberries received over their growers’ 

allotments into dehydrated cranberries 

or other processed products. Handlers 

utilizing this option shall divert an 

amount of 2018–19 processed products 

equivalent to the volume of excess 

cranberries processed as provided for in 

§ 929.107. The remaining volume of 

excess cranberries must be diverted as 

whole fruit. 

Dated: September 7, 2018. 

Bruce Summers, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2018–19825 Filed 9–11–18; 8:45 am] 

BILLING CODE 3410–02–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1070 

[Docket No. CFPB–2016–0039] 

RIN 3170–AA63 

Disclosure of Records and Information 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule. 

SUMMARY: This final rule amends the 

procedures used by the public to obtain 

information from the Bureau of 

Consumer Financial Protection (Bureau) 

under the Freedom of Information Act, 

the Privacy Act of 1974, and in legal 

proceedings. 

DATES: This final rule is effective 

October 12, 2018. 

FOR FURTHER INFORMATION CONTACT: 

David Snyder, Senior Counsel, Legal 

Division, at 202–435–7758. If you 

require this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Bureau first published the 

procedures used by the public to obtain 

information from it under the Freedom 

of Information Act, the Privacy Act of 

1974, and in legal proceedings in an 

interim final rule on July 28, 2011, 76 

FR 45371 (Jul. 28, 2011). This was 

followed by a final rule on February 15, 


daltland on DSKBBV9HB2PROD with RULES