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ALMOND BOARD OF CALIFORNIA

1150 9th Street, Suite 1500

Modesto, CA 95354

Tel: (209) 549-8262 Fax: (209) 550-5494

AGENCY AGREEMENT

DISPOSITION OF RESERVE TO NON-COMPETITIVE OUTLETS

20___ - 20___

This Agreement, made this _______ day of _______________________, 20___, between the 

Almond Board of California (ABC) and _____________________________, a handler of almonds 

(Agent; collectively the Parties), witnesseth that:

WHEREAS section 981.66 of the Marketing Order of the Secretary of Agriculture regulating the 

handling of almonds grown in California (Order), authorizes the ABC to dispose of reserve almonds in 

non-competitive outlets; and

WHEREAS section 981.67 of the Order permits handlers of almonds to become agents of the 

ABC in such disposal; and 

WHEREAS Agent, as a handler of almonds, is subject to the provisions of the Order and has 

requested authority to act as agent of the ABC in the disposition of the reserve of almonds; and 

WHEREAS timely information on Agent’s intentions to dispose, and dispositions of, almonds 

into non-competitive outlets is necessary for the effective administration of the reserve and for future 

marketing policy determinations of the ABC;

NOW THEREFORE IT IS AGREED BY AND BETWEEN the Parties as follows:

1. General 

a. Subject to the provisions of § 981.66 of the Order and the regulations applicable to the 

crop year, Agent is hereby authorized on behalf of the ABC to dispose of reserve 

almonds held or acquired by Agent and which are subject to the ABC’s disposal

authority. Such disposition shall conform with such inspection, certification, and other 

disposition terms and conditions as the ABC may herein prescribe or from time to time 

specify, and shall be subject to the limitations placed on the ABC’s disposal authority for 

the crop year.

b. Agent agrees that there shall be no obligation on the part of the ABC with respect to any 

expenses, commitments, or damages arising out of any agreement between Agent and 

other person relative to the disposition of reserve almonds or of salable almonds for 

which credit against a reserve obligation is desired.

According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to a 

collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0581-

0178. The time required to complete this information collection is estimated to average 10 minutes per response, including the time for reviewing 

instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of 

information.
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c. ABC agrees that if at any time the dispositions by Agent exceed Agent’s reserve 

obligation and the excess must be classified as salable, a portion or all such excess may 

be credited as reserve to cover an increase in Agent’s reserve obligation or a transfer to 

another handler but only if the disposition of such salable tonnage has complied with the 

requirements for reserve dispositions.

d. Agent agrees that no reserve almonds will be sold or delivered to any outlets or 

geographic locations where ABC representatives or Federal-State Inspection Service or 

Canadian government officials would be restricted, for any reason, from verifying reserve 

almonds, products made from reserve almonds, or records pertaining to reserve 

dispositions.

2. Geographic Limitations/Other Safeguards

a. Agent agrees that all reserve almonds shall be disposed of as follows:

i. Almonds for human consumption as almonds, almond butter, school lunch 

programs, etc., shall be manufactured and/or packed in the 48 contiguous 

United States. Almonds may, however, be shipped to Canada for 

manufacturing into almond butter.

ii. Almonds used in the manufacture of almond oil shall be crushed only in 

California. Sale of such almonds shall be direct from Agent to oil 

manufacturer.

iii. Almonds for poultry or animal feed shall be sold only to feed manufacturers 

or commercial feed distributors licensed by California Department of Food 

and Agriculture, Division of Inspection Services, Agricultural Commodities 

and Regulatory Services, and currently hold valid licenses. Such almonds 

shall be ground under the direct supervision of ABC at ABC’s option.

iv. Almonds sold to school lunch and other governmental uses, and to charitable 

institutions for charitable purposes shall be sold for use in the United States.

3. Eligible Outlets

a. School Lunch and other Governmental Uses

i. Individual handlers may participate in a non-competitive bid basis if USDA 

implements a school purchase program. In addition, handlers may work with 

local school districts, colleges, and universities to promote the sale of reserve 

almonds in the school lunch program at State and National levels.

b. Almond oil

c. Almond butter

i. Almond butter is defined in § 981.466 as a comminuted food product prepared by 

grinding shelled or blanched almonds into a homogeneous plastic or semi-plastic 

mass or liquid having very few particles larger than 1/16 inch in any dimension. 

To produce chunky style almond butter, almond chunks or pieces may be added 
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up to a maximum of 25% by weight of the finished product. The size of the 

almond pieces used to make chunky style almond butter may not exceed 5/16 in 

any dimension.

d. Charitable Institutions for Charitable Purposes

i. Eligible organizations are as described in § 170(c) of the Internal Revenue 

Service Code.

e. Certified Organic Almonds

i. Almonds grown and certified as organic, delivered to handlers and sold as 

certified organic almonds would satisfy reserve requirements for the 1999/2000 

crop year. These almonds must be certified by an organic certification 

organization currently registered with the California Department of Food and 

Agriculture, or registered with the California Health and Safety Code § 26569.11 

§26569.17. Those handlers wishing to dispose of reserve through this outlet 

must provide to ABC proof that all almonds sold as part of their reserve meet the 

requirements of certified organic almonds. They would also have to provide 

documentation to ABC giving the name, address, and phone number of the 

buyer.

ii. Handlers transferring or receiving transfers of certified organic almonds via interhandler transfers may only conduct such transactions with handlers that handle 

only certified organically grown almonds.

1. To be eligible to utilize this as a disposition outlet, Agent must handle 

only certified organically grown almonds.

2. Transfer or receipt of reserve obligation or reserve credits accumulated 

by disposition through this outlet is limited to handlers identified in 

paragraph 3(e)(i) above.

f. Other Approved Reserve Outlets

i. As specified in §981.66 of the Order, additional non-competitive outlets may be 

added by ABC as developed.

4. Grade Requirements for Disposition

a. Reserve almonds used for human consumption purposes as almonds or almond butter 

shall be U.S. No. 1 pieces or better as defined in U.S. Standards for Grades for Shelled 

Almonds (7 C.F.R. 51.2105 – 51.2132).

Basic Requirements

i. Shall not contain serious damage by decay, rancidity, insect injury, or mold.

ii. Shall not contain foreign material.

iii. Blanched whole almonds and pieces of almonds shall not be damaged by 

adhering skin. Whole almonds shall be damaged when pellicle is adhering to an 
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area more than 1⁄4 inch in the aggregate and pieces shall be damaged when 

pellicle is adhering to an area of more than 10 percent of the total surface area of 

the piece.

iv. Shall be well dried and clean, meaning kernels shall be firm and brittle, not 

pliable or leathery, and shall be practically free from dirt or other foreign 

substances exclusive of salt, flavorings, or other such additives.

v. Shall be free from the following other defects:

1. Gum, when a film of shiny resinous-appearing substance covers more 

than 1⁄4 inch in diameter;

2. Shriveling, when a kernel is excessively thin for its size or when 

materially withered, shrunken, leathery, tough, or only partially 

developed, provided that partially developed kernels are not considered 

defects if more than 3⁄4 of the pellicle is filled with meat;

3. Brown spot on the kernel, either single or multiple, when the affected 

area aggregates more than a circle 1/8 inch diameter.

vi. Minimum size shall be 8/64 inch in diameter.

Tolerances

i. 3% for serious damage by decay, rancidity, insect injury, or mold.

ii. 0.2% for foreign material.

iii. 3% for adhering skin.

iv. 2% for kernels or pieces that are not well dried, not clean or are affected by other 

defects.

v. 5% for undersize kernels or pieces.

b. Reserve almonds used for almond oil or poultry or animal feed shall receive credit for 

only the percent of edible kernels contained in the delivery subject to minimum edible 

kernel content as provided for in § 7(a) of this Agreement.

5. Inspection

a. All reserve almonds shall be inspected by the Federal-State Inspection Service at Agent’s 

expense as follows:

b. Almond butter

i. Raw product

All reserve almonds to be used in the manufacture of almond butter shall be 

certified as to quality by the Federal-State Inspection Service. This may be either 
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lot inspection or in-line inspection. Almonds from one lot certified as U.S. grade 

may be delivered in separate lots to one or more manufacturers provided:

1. Each delivery shall be accompanied by a copy of the inspection 

certificate and AFC forms 13 and 14.

2. At manufacturer’s premises, the Federal or Federal-State Inspection 

Service shall certify that the almonds were received and made into the 

produce in the manner specified in § 5(f) of this Agreement.

ii. Blanched and manufactured almonds

Grading standards have been developed for blanched and manufactured almonds 

which will allow a handler to use manufactured stock already in inventory, 

providing they are certified by the Federal-State Inspection Service in accordance 

with the standards as specified in § 4(a).

iii. Shrinkage factor

There may be a difference (shrinkage) between the actual kernel weight of 

almonds received for manufacture into almond butter and the actual weight of the 

finished product. A loss factor of 6% will be allowed.

c. Reserve almonds sold to the government for USDA school lunch programs and for other 

governmental uses shall meet the inspection criteria set forth in terms of the respective 

government bid announcement.

d. Reserve almonds sold to charitable institutions for charitable purposes shall be certified 

as to quality by the Federal-State Inspection Service, by either lot or in-line inspection 

prior to delivery. Each delivery shall be accompanied by forms ABC 13 and 14.

e. Almond oil

See paragraphs 7(a) and (b) below.

f. Livestock and poultry feed

See paragraphs 7(a) and (b) below.

g. Federal or Federal-State Inspection Certification.

In order to complete the certification required by paragraphs 5(a)(1) and 5(b) of this 

Agreement, the Federal or Federal-State Inspection Service must:

i. Visit the packer or manufacturer’s facility following receipt of almonds and 

before processing, to verify that the quantity of almonds reported on form ABC14 was received; 

ii. Visit the packer or manufacturer’s facility after processing to verify the quantity 

of finished product that the packer or manufacturer certified on form ABC-14 

was made from the product received and observed under paragraph 5(f)(1) of this 

Agreement; and
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iii. Issue a certificate to the packer or manufacturer attesting to what was observed 

under paragraphs 5(f)(1) and 5(f)(2) of this Agreement.

h. Canadian certification procedure for almond butter.

i. The Canadian government shall maintain a list of manufacturers of almond butter 

in Canada and shall certify such manufacturers on a quarterly basis by issuing a 

certificate of approval and providing that to the USDA.

ii. Only shipments to approved manufacturers will be eligible for reserve credit.

iii. Approved manufacturers are required to have an independent chartered 

accountant audit their record to certify that reserve almonds were processed into 

almond butter.

iv. The independent chartered accountant will conduct a physical examination of the 

manufacturer’s inventory both before and after processing to verify that the 

quantity of almonds reported on form ABC-14 was received and to verify that the 

quantity of finished product that the manufacturer certified on form ABC-14 was

made from the product received and observed.

v. Approved manufacturers are required to complete the Manufacturer Certification

on form ABC-14, which accompanies the shipment.

vi. Approved manufacturers are required to attach both the copy of the quarterly 

Certificate of Approval issued by the Tariffs and Market Access Division (EAT), 

Department of Foreign Affairs and International Trade Canada, and a copy of the 

chartered accountant’s verification of the quantity of almonds received and 

manufactured into almond butter per forms ABC-13 and 14, which accompany 

the shipment, and submit them to the ABC.

6. Minimum Prices

a. If established by the Secretary of Agriculture, minimum prices will apply to reserve 

almonds diverted to eligible outlets, except for almonds diverted to oil, feed, or charities. 

Agent will be notified of any such minimum price schedule established.

7. Dual Credit (Reserve and Inedibles)

a. A lot of reserve almonds delivered to non-human consumption outlets must contain a 

minimum of 30% edible kernels in order to receive credit against a reserve obligation. 

Each handler shall cause to be determined through the Federal-State Inspection Service, 

and at the handler’s expense, the percentage of edible and inedible kernels in each lot at 

the time of disposition. Such inspected and certified lots will permit a handler to apply to 

the ABC for full credit against his reserve obligation credit to non-human consumption 

outlets. Reserve percentages will be reduced, and the handler will have the option to 

apply any excess reserve credit to his inedible obligation.

Examples: All for shipment to non-human consumption outlets:
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1. A lot containing 30% edible kernels or more and up to 70% but not less 

than 50% inedible kernels is eligible to receive both reserve and inedible 

disposition credit according to the percentages in each outlet.

2. A lot containing 20% edible kernels and 9% inedible kernels – 29% total 

meats – is not eligible to receive reserve credit for the 20% edible meats 

and no inedible credit.

3. A lot containing 19% edible kernels and 31% inedible kernels – 50% 

total meats – is eligible to receive inedible disposition credit for the 50% 

meat content and no reserve credit.

b. All almonds shall be inspected and certified by the inspection agency at the time of 

disposition into an eligible outlet.

8. Disposition

a. Agent may dispose of authorized quantities and qualities of reserve almonds either 

directly or through another agent following ABC approval. All reserve dispositions made 

to non-human consumption outlets pursuant to paragraphs 2(b) and (c), and 7(a) and (b) 

of this Agreement shall be made, at ABC’s option, under direct supervision of ABC. 

ABC shall be notified by the handler at least 72 hours prior to disposition. Prior to 

making any disposition of any reserve almonds, Agent shall notify ABC of his intentions 

to dispose of reserve almonds on form ABC-13.

b. Any of Agent’s reserve almonds remaining unsold on ____________________, 20___, 

shall be disposed of by ABC as soon as practicable through the most readily available 

reserve outlets.

c. Form ABC-13 shall be accepted as evidence of a reserve sale, and Agent, manufacturer, 

or user shall submit supporting documentation with form ABC-14 on completion of the 

disposition of reserve almonds. For example, sales of reserve almonds for manufacture 

into almond butter will require the manufacturer to complete the processing of the reserve 

almonds into butter so that the handler may file form ABC-14.

9. Credit for Reserve Disposition

a. Agent will be credited with disposition in reserve outlets on compliance with any 

minimum prices as identified in paragraph 6 herein, as recommended by ABC and 

established by the Secretary of Agriculture, and on filing with ABC an executed form 

ABC-14, the completion of the disposition of reserve almonds, together with supporting 

documentation as follows:

i. For shipment to authorized non-competitive outlets, the inspection certificate(s) 

on the almonds shipped.

ii. For conversion to an authorized non-competitive product, the inspection 

certificate(s) on the almonds diverted. If Agent did not do the converting, form 

ABC-14 shall also be supported by a manufacturer’s certification and a Federal 

or Federal-State Inspection Service certification.
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iii. For Canadian shipments to almond butter, the quarterly certificate of approval, 

and a copy of the chartered accountant’s verification.

10. Agent, by signing this Agreement, certifies that:

a. When almonds are to be used for almond butter, school lunch or other governmental uses, 

or other applicable non-competitive outlets, he or she shall comply with any minimum

prices of almonds recommended by ABC and established by the Secretary of Agriculture.

11. This Agency Agreement shall apply to the 20___ - 20___ crop year reserve almonds disposed of 

by handlers beginning on ____________________, 20___, and shall remain in effect until 

__________________, 20___, or such later date as the Secretary of Agriculture may establish, 

pursuant to § 981.66(c) of the Order, provided, that Agent may terminate this Agreement as of 

____________________, 20___ by giving written notice on or before _____________________, 

20___.

IN WITNESS WHEREOF, Agent has subscribed his name through an authorized person and, if a 

corporation, has subscribed its corporate name and corporate seal, and ABC has subscribed its name 

through its duly authorized President and Chief Executive Officer.

Date Agent

By

Title

ALMOND BOARD OF CALIFORNIA

President and Chief Executive Officer

No handler shall dispose of reserve almonds to non-competitive outlets as an agent of the ABC unless a 

completed Agency Agreement has been received. (7 U.S.C. 608(d), 7 C.F.R. 981.66, 981.67, 981.467)

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its 

Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on 

race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, 

family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in 

any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by 

program or incident.

Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, audiotape, American 

Sign Language, etc.) should contact the responsible Agency or USDA’s TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA 

through the Federal Relay Service at (800) 877-8339. Additionally, program information may be made available in languages other than English. 

To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, AD-3027, found online at 

http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or write a letter addressed to USDA and provide in the letter all of 

the information requested in the form. To request a copy of the complaint form, call (866) 632-9992. Submit your completed form or letter to 

USDA by: (1) mail: U.S. Department of Agriculture Office of the Assistant Secretary for Civil Rights 1400 Independence Avenue, SW 

Washington, D.C. 20250-9410; (2) fax: (202) 690-7442; or (3) email: program.intake@usda.gov. USDA is an equal opportunity provider, 

employer, and lender.