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[Federal Register Volume 78, Number 161 (Tuesday, August 20, 2013)]
[Rules and Regulations]
[Pages 51041-51043]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20274]

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Rules and Regulations
                                                Federal Register
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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 
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Federal Register / Vol. 78, No. 161 / Tuesday, August 20, 2013 / 
Rules and Regulations

[[Page 51041]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 915

[Doc. No. AMS-FV-12-0067; FV13-915-1 FR]

Avocados Grown in South Florida; Change in Minimum Grade 
Requirements

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule increases the minimum grade requirements currently 
prescribed under the Florida avocado marketing order (order). The order 
regulates the handling of avocados grown in South Florida, and is 
administered locally by the Avocado Administrative Committee 
(Committee). This action increases the current minimum grade 
requirement from a U.S. No. 2 to a U.S. Combination grade for avocados 
shipped to destinations outside of the production area. Increasing the 
minimum grade requirement aligns marketing order regulations with 
current industry practices to the benefit of growers, handlers, and 
consumers.

DATES: Effective Date: August 21, 2013.

FOR FURTHER INFORMATION CONTACT: Doris Jamieson, Marketing Specialist 
or Christian D. Nissen, Regional Director, Southeast Marketing Field 
Office, Marketing Order and Agreement Division, Fruit and Vegetable 
Program, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 325-7893, 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 Jeffrey Smutny, Marketing Order and Agreement 
Division, Fruit and Vegetable Program, AMS, USDA, 1400 Independence 
Avenue SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-
2491, Fax: (202) 720-8938, or Email: Jeffrey.Smutny@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing 
Order No. 915, as amended (7 CFR part 915), regulating the handling of 
avocados grown in South Florida, hereinafter referred to as the 
``order.'' The order is effective under the Agricultural Marketing 
Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter 
referred to as the ``Act.''
    The Department of Agriculture (USDA) is issuing this rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect.
    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 
entry of the ruling.
    This final rule revises the minimum grade requirements currently 
prescribed under the order. This rule increases the current minimum 
grade requirement from a U.S. No. 2 to a U.S. Combination grade for 
avocados shipped to destinations outside of the production area and was 
recommended by the Committee at a meeting on October 10, 2012.
    Section 915.51 of the order provides, in part, authority to issue 
regulations establishing specific grade requirements for avocados. 
Section 915.52 of the order provides authority for the modification, 
suspension or termination of established regulations.
    Section 915.306 of the order's container and pack regulations 
prescribe grade, pack, and container marking requirements for Florida 
avocados. Paragraph (a)(1) of that section prescribes, in part, that no 
handler shall handle any variety of avocados grown in the production 
area unless such avocados grade at least U.S. No. 2.
    While marketing order regulations specify a minimum grade 
requirement of a U.S. No. 2, it is standard industry practice to ship 
avocados to destinations outside of the production area at the higher 
grade of a U.S. Combination, especially at the beginning of the season. 
The minimum requirement for a U.S. Combination grade provides that at 
least 60 percent of the fruit in the pack must meet the U.S. No. 1 
grade and the remaining fruit must meet at least a U.S. No. 2 grade. 
Handlers have voluntarily shipped the higher grade fruit in order to 
get the best price for growers and to provide quality fruit to 
consumers.
    During the first four months of the 2012-13 season, the volume of 
U.S. No. 2 grade fruit was 13 percent higher than shipments of that 
grade during the comparable period of the previous season. Buyers were 
reluctant to pay a higher price for the better grade fruit when they 
could purchase the lower grade fruit for less. This negatively affected 
the price of the U.S. Combination grade fruit and resulted in the loss 
of sales of the higher grade fruit.
    During several meetings, Committee members expressed concern that 
volume of the U.S. No. 2 grade fruit may continue to increase and 
negatively impact price. Further, the Florida avocado industry has 
established a reputation for providing consumers with high quality 
fruit and the Committee believes shipping U.S. No. 2 grade fruit 
outside of the production area could lower that standard.
    As the majority of handlers are currently shipping at the higher 
grade, it is not anticipated that this change will reduce overall 
shipments. Even though there was an increase in shipments of U.S. No. 2 
grade fruit to destinations outside of the production area during the 
2012-13 season, Committee data indicates total shipments of U.S. No. 2 
grade fruit represented only about one percent of total shipments this 
season, which were over 1.1 million 55-pound bushel containers.

[[Page 51042]]

    Consequently, the Committee recommended raising the minimum grade 
requirement to a U.S. Combination for avocados shipped to destinations 
outside of the production area. Fruit shipped within the production 
area will continue to be required to meet the current minimum grade of 
a U.S. No. 2, which will provide an outlet for U.S. No. 2 grade not 
utilized in the U.S. Combination pack. This final rule aligns marketing 
order regulations with current industry practices to the benefit of 
growers, handlers, and consumers. This rule will help maintain the 
industry's reputation for providing consumers with high quality 
avocados from Florida, while continuing to provide handlers with an 
outlet for their U.S. No. 2 fruit.
    One member of the Committee voted against the recommendation. He 
stated that the minimum grade requirement should be raised, but only 
during the beginning of the season when domestic production was 
minimal. He believed that when imports begin arriving in October, the 
minimum grade should revert back to a U.S. No. 2 in order for the 
Florida avocado industry to compete with imported fruit. However, the 
majority of the Committee agreed that the quality of the fruit was the 
most important issue and shipping the lower grade fruit undermined the 
high standard established by the Florida avocado industry. Other 
members of the Committee also commented that they believe raising the 
minimum grade for Florida avocados will cause the quality of imported 
fruit to improve to match the industry's higher standard.
    Section 8e of the Act provides that when certain domestically 
produced commodities, including avocados, are regulated under a Federal 
marketing order, imports of that commodity must meet the same or 
comparable grade, size, quality, and maturity requirements. The changes 
in this rule apply only to shipments outside of the production area. 
The current, less restrictive regulations will continue to apply to 
shipments within the production area and to imported avocados. A 
clarification will be made to the import regulation in a separate 
action.

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 30 handlers of Florida avocados subject to 
regulation under the order and approximately 300 producers of avocados 
in the production area. Small agricultural service firms, which include 
avocado handlers, are defined by the Small Business Administration 
(SBA) as those whose annual receipts are less than $7,000,000, and 
small agricultural producers are defined as those having annual 
receipts less than $750,000 (13 CFR 121.201).
    According to Committee data and information from the National 
Agricultural Statistical Service, the average price for Florida 
avocados during the 2011-12 season was approximately $20.79 per 55-
pound bushel container and total shipments were slightly higher than 
1.2 million 55-pound bushels. Using the average price and shipment 
information provided by the Committee, the majority of avocado handlers 
could be considered small businesses under SBA's definition. In 
addition, based on avocado production, producer prices, and the total 
number of Florida avocado producers, the average annual producer 
revenue is less than $750,000. Consequently, the majority of avocado 
handlers and producers may be classified as small entities.
    This final rule revises the minimum grade requirements currently 
prescribed for Florida avocados under Sec.  915.306 of the order. This 
change raises the minimum grade from a U.S. No. 2 to a U.S. Combination 
grade for avocados shipped to destinations outside of the production 
area and aligns marketing order regulations with current industry 
practices. This rule was recommended by the Committee at a meeting on 
October 10, 2012. Authority for this action is provided in Sec. Sec.  
915.51 and 915.52 of the order.
    Any additional costs associated with this change are anticipated to 
be minimal. The order requires that all containers be marked with the 
grade of the fruit in the container. However, the vast majority of 
handlers are currently shipping at the higher grade requirement, and 
marking their containers accordingly. Any containers currently in 
inventory that have been pre-stamped with a U.S. No. 2 can be used for 
shipments within the production area. Therefore, this change should not 
yield any additional costs.
    As previously stated, the volume of U.S. No. 2 grade Florida 
avocados shipped during a season represents less than one percent of 
total annual shipments. In addition, the U.S. Combination grade 
requires that at least 60 percent of the fruit in the pack be a U.S. 
No. 1 grade and the remaining fruit must meet a U.S. No. 2 grade. 
Consequently, U.S. No. 2 fruit can be utilized in the U.S. Combination 
pack. Further, U.S. No. 2 grade avocados can still be shipped to 
destinations within the production area. Therefore, implementation of 
this rule is not expected to impact the overall volume of U.S. No. 2 
fruit being utilized as adequate uses for such fruit will continue to 
exist.
    Raising the minimum grade requirement aligns marketing order 
requirements with current industry practices. Consumers benefit as a 
result of the higher quality pack available in the marketplace. It also 
builds consumer confidence and improves grower returns. The benefits of 
this rule are not expected to be disproportionately greater or smaller 
for small handlers or growers than for large entities.
    The Committee considered alternatives to this recommended change. 
The Committee discussed raising the minimum grade to U.S. Combination 
grade during the early part of the season and then reverting back to 
the minimum grade requirement of a U.S. No. 2 in October when imported 
fruit typically begins arriving in the U.S. There was concern that 
having the higher grade requirements in effect when imports begin 
arriving would make it difficult for the domestic industry to compete. 
However, the Committee agreed that the quality of the fruit was the 
most important issue and shipping the lower grade fruit undermined the 
high standard established by the Florida avocado industry. Also, 
Committee members stated that they believe raising the minimum grade 
for Florida avocados shipped outside of the production area for the 
entire season would result in improved quality of both domestic and 
imported avocados, as importers would likely strive to match the 
quality standards set by the Florida avocado industry. Therefore, this 
alternative was rejected.
    The Committee also considered changing the minimum grade 
requirements for all Florida avocados handled, regardless of market 
destination. However, maintaining the current minimum grade requirement 
for avocados shipped to destinations within the production area 
provides an outlet for U.S. No. 2 grade fruit not utilized in

[[Page 51043]]

the higher grade packs. Therefore, the Committee also rejected this 
alternative.
    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 the Office of Management and Budget (OMB) and 
assigned OMB No. 0581-0189, Generic 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 revises the minimum grade requirement under the 
Florida avocado marketing order. Accordingly, this action will not 
impose any additional reporting or recordkeeping requirements on either 
small or large Florida avocado 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. Further, no comments were received 
concerning the initial regulatory flexibility analysis.
    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 meeting was widely publicized 
throughout the Florida avocado industry and all interested persons were 
invited to attend the meeting and participate in Committee 
deliberations on all issues. Like all Committee meetings, the October 
10, 2012, meeting was a public meeting. All entities, both large and 
small, were able to express views on this issue.
    A proposed rule concerning this action was published in the Federal 
Register on May 23, 2013 (78 FR 30782). Copies of the rule were mailed 
or sent via facsimile to all Committee members and avocado handlers. 
Finally, the rule was made available through the Internet by USDA and 
the Office of the Federal Register. A 30-day comment period ending June 
24, 2013, was provided to allow interested persons to respond to the 
proposal. No comments were received. Accordingly, no changes will be 
made to the rule as proposed.
    A small business guide on complying with fruit, vegetable, and 
specialty crop marketing agreements and orders may be viewed at: 
www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about 
the compliance guide should be sent to Jeffrey Smutny at the previously 
mentioned address in the FOR FURTHER INFORMATION CONTACT section.
    After consideration of all relevant matter presented, including the 
information and recommendation submitted by 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.
    It is further found that good cause exists for not postponing the 
effective date of this rule until 30 days after publication in the 
Federal Register (5 U.S.C. 553) as handlers are already shipping 
avocados for the 2013-14 season. Further, handlers are aware of this 
rule, which was recommended at a public meeting. Also, a 30-day comment 
period was provided for in the proposed rule, and no comments were 
received.

List of Subjects in 7 CFR Part 915

    Avocados, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 7 CFR part 915 is 
amended as follows:

PART 915--AVOCADOS GROWN IN SOUTH FLORIDA

0
1. The authority citation for 7 CFR part 915 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

0
2. In Sec.  915.306, paragraph (a)(1) is revised to read as follows:

Sec.  915.306  Florida avocado grade, pack and container marking 
regulation.

    (a) * * *
    (1) Such avocados grade at least U.S. Combination, except that 
avocadoes handled to destinations within the production area grade U.S. 
No. 2 and except further that such avocados may be placed in containers 
with avocados of dissimilar varietal characteristics.
* * * * *

    Dated: August 14, 2013.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2013-20274 Filed 8-19-13; 8:45 am]
BILLING CODE 3410-02-P
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