This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

72 

Vol. 83, No. 1 

Tuesday, January 2, 2018 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 929 

[Doc. No. AMS–SC–17–0061; SC17–929–2 

PR] 

Cranberries Grown in States of 

Massachusetts, et al.; Free and 

Restricted Percentages for the 2017–18 

Crop Year for Cranberries 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule invites 

comments on a recommendation to 

establish free and restricted percentages 

for the 2017–18 crop year under the 

marketing order for cranberries grown in 

the production area (Order). This action 

would establish the proportion of 

cranberries from the 2017–18 crop 

which may be handled and allow for the 

disposal of 2017–18 processed cranberry 

products. It would also establish a 

minimum quantity exemption and an 

exemption for handlers with no 

carryover inventory, exempt organically 

grown cranberries, and define outlets for 

restricted fruit. This action would adjust 

supply to more closely meet market 

demand, improve grower and handler 

returns and reduce inventory. This 

proposal also contains a formatting 

change to subpart references to bring the 

language into conformance with the 

Office of Federal Register requirements. 

DATES: Comments must be received by 

February 1, 2018. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this proposal. Comments 

must be sent to the Docket Clerk, 

Marketing Order and Agreement 

Division, Specialty Crops Program, 

AMS, USDA, 1400 Independence 

Avenue SW, STOP 0237, Washington, 

DC 20250–0237; Fax: (202) 720–8938; or 

internet: http://www.regulations.gov. All 

comments should reference the 

document number and the date and 

page number of this issue of the Federal 

Register and will be made available for 

public inspection in the Office of the 

Docket Clerk during regular business 

hours, or can be viewed at: http://

www.regulations.gov. All comments 

submitted in response to this proposal 

will be included in the record and will 

be made available to the public. Please 

be advised that the identity of the 

individuals or entities submitting the 

comments will be made public on the 

internet at the address provided above. 

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 

action, pursuant to 5 U.S.C. 553, 

proposes an amendment to regulations 

issued to carry out a marketing order as 

defined in 7 CFR 900.2(j). This proposal 

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 and 

handlers of cranberries operating within 

the production area, and a public 

member. 

The Department of Agriculture 

(USDA) is issuing this proposed 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 proposed 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 proposal 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 finds that ‘‘such 

regulation will tend to effectuate the 

declared policy of the Act.’’ 

Accordingly, this proposed rule would 

establish free and restricted percentages 

for cranberries for the 2017–18 crop 

year, beginning September 1, 2017, 

through August 31, 2018. 

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 proposed rule invites comments 

on the establishment of free and 

restricted percentages for the 2017–18 

crop year. This proposal would 

establish the proportion of cranberries 

from the 2017–18 crop that may be 

handled at 85 percent free and 15 

percent restricted. This action would 

also allow for the disposal of 2017–18 

processed cranberry products to meet 

up to 50 percent of a handler’s 


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Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Proposed Rules 73 

restriction. It would also establish a 

minimum quantity exemption, exempt 

handlers with no carryout inventory, 

exempt organically grown cranberries, 

and define outlets for restricted fruit. 

This action would adjust supply to more 

closely meet market demand, improve 

grower returns, and help reduce 

inventory. 

The Committee met on August 4, 

2017, and August 31, 2017, and 

recommended establishing these free 

and restricted percentages for the 2017– 

18 season, providing handlers with the 

option to divert processed cranberry 

products to meet up to 50 percent of 

their restricted percentage, and 

designating outlets for restricted fruit. 

The Committee also recommended 

establishing a minimum exemption of 

125,000 barrels for each handler. After 

much consideration, USDA determined 

the minimum exemption portion of the 

recommendation should be revised. 

Consequently, this proposal would only 

exempt small handlers who process less 

than 125,000 barrels or handlers who 

would not have carryover inventory at 

the end of the 2017–18 fiscal year from 

the restriction. The 125,000 barrel 

exemption would not apply to handlers 

who do not meet these criteria. 

Sections 929.52 and 929.54 provide 

authority to control volume by 

designating free and restricted 

percentages for cranberries acquired by 

handlers in a given crop year. Section 

929.52 also provides that the Secretary 

shall control the handling of cranberries 

whenever the Secretary finds, from the 

recommendations and information 

submitted by the committee, or from 

other such information, that such 

volume control will tend to effectuate 

the declared policy of the Act. Free 

percentage volume may be shipped to 

any market, while restricted percentage 

volume must be diverted or used for 

noncompetitive purposes as prescribed 

in § 929.57. Section 929.51 requires the 

Committee to consider certain 

conditions, including supply and 

demand, prior to recommending a 

handler withholding program, and that 

any recommendation to do so be made 

by August 31. 

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 have 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 

volume. However, grower prices are 

very sensitive to changes in supply. As 

such, 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. 

On August 4, 2017, and again on 

August 31, 2017, the Committee met to 

discuss the 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. Carry-in inventory 

was estimated at approximately 9.9 

million barrels and foreign acquired 

cranberries are 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 season. 

The Committee also reviewed 

anticipated sales for the upcoming 

season. Sales for fresh fruit were 

estimated at 333,000 barrels and 

processed fruit sales were estimated at 

9.2 million barrels. Based on these 

expectations, inventory at the end of the 

2017–18 crop year is anticipated to be 

roughly 10.9 million barrels, a 10 

percent increase from the previous year. 

Using these numbers, end of year 

inventories would be approximately 115 

percent of average annual sales. 

After calculating the anticipated level 

of surplus for the 2017–18 season, the 

Committee agreed the industry is faced 

with a large inventory that continues to 

build. In its discussions of how to 

address this issue, the Committee 

considered several options. During the 

discussion of regulating the volume for 

the 2017–18 season, some members 

preferred establishing a producer 

allotment for the 2018–19 season over 

implementing a handler withholding for 

the current season. However, other 

members stated that if no action was 

taken to control supply for the 2017–18 

season, another million barrels of 

cranberries would be added to the 

surplus inventory. In addition, not 

regulating the 2017–18 crop would 

require greater levels of restriction on 

the 2018–19 crop, and grower returns 

may decline further. 

The Committee discussed various 

levels of restriction, being sensitive to 

the impact volume control could have 

on small 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. The Committee 

also recognized a small restriction 

would not immediately balance supply 

with demand. However, even a small 

restriction would remove a portion of 

the volume from the market and help 

prevent an additional increase in 

inventory. Therefore, based on these 

discussions, the Committee 

recommended establishing free and 

restricted percentages at 85 percent free 

and 15 percent restricted. 

The Committee also recommended an 

allowance for the diversion of 2017–18 

processed cranberry products to meet 

up to 50 percent of a handler’s 

restriction. The Committee made this 

recommendation recognizing that 

processing fresh fruit to produce one of 

its top-selling items, sweetened dried 

cranberries, results in juice concentrate 

as a by-product. A significant amount of 

current carry-in inventory is in the form 

of juice concentrate. By allowing for the 

diversion of processed cranberry 

products, such as juice concentrate, to 

meet a portion of a handler’s restriction, 

the Committee believes this would help 

prevent additional build-up of carry-in 

inventory. The ability to use cranberry 

processed products in addition to fresh 

berries to meet diversion requirements 

may also help handlers who find they 

need to divert additional volume late in 

the year when the availability of fresh 

berries may be limited. 

To ensure the disposal of processed 

products in lieu of fresh berries are 

correctly accounted for under the 

restriction, the Committee also 

recommended including a conversion 

table, Table 1, in the regulations. The 

table recognizes different conversion 

equivalencies of berries 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 is 50 Brix. The Committee 


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acknowledged that the Brix level can 

vary depending on the growing region 

and farming practices. This table would 

assist in ensuring that the disposal of 

processed product in lieu of fresh 

berries would be applied equitably 

among all handlers. 

TABLE 1—CONVERSION TABLE

Region Brix average Concentrate yield for one barrel 

of cranberries 

Oregon .................................................................................................................................. 9.8 1.91 gallons 50 Brix concentrate. 

Washington ........................................................................................................................... 9.3 1.81 gallons 50 Brix concentrate. 

New Jersey ........................................................................................................................... 8.8 1.72 gallons 50 Brix concentrate. 

Wisconsin ............................................................................................................................. 8.7 1.70 gallons 50 Brix concentrate. 

Massachusetts ...................................................................................................................... 8.4 1.64 gallons 50 Brix concentrate. 

All others .............................................................................................................................. 8.7 1.70 gallons 50 Brix concentrate. 

For example, using the conversion 

table above, handlers could determine 

the amount of cranberry concentrate 

they would need to divert, in lieu of 

fresh berries, to cover any restricted 

percentage. 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 would be provided 

by the Committee based on information 

provided by the requesting handler. The 

means for approving and appealing the 

conversion rates would be provided in 

a separate rulemaking action. 

For example, a handler covered under 

the restriction whose acquired volume 

is 1,000,000 barrels would have 

1,000,000 barrels in regulated volume 

with 850,000 barrels of free use 

cranberries (1,000,000 × .85) and 

150,000 barrels of restricted use 

cranberries (1,000,000 × .15) for the 

2017–18 season. Under this proposed 

rule, the handler could divert fresh fruit 

to outlets for restricted cranberries as 

prescribed in the Order, or divert up to 

50 percent of the restriction, or a 75,000 

barrel equivalent (150,000 barrels ÷ 2) in 

processed products from the 2017–18 

harvest, with the remaining amount 

fulfilled using fresh berries. For 

cranberries produced in Wisconsin, this 

would equate to 127,500 gallons of 

concentrate (75,000 barrels × 1.7 

gallons) that would need to be diverted 

to outlets for restricted cranberries. 

Section 929.57 states that cranberries 

withheld from handling may only be 

diverted through such outlets as the 

Committee, with the approval of the 

Secretary, finds are noncompetitive to 

outlets for unrestricted (free percentage) 

cranberries. The Committee discussed 

various outlets and recommended the 

following: Foreign countries, except 

Canada; charitable institutions; any 

nonhuman food use; and, research and 

development projects approved by the 

Committee dealing with the 

development of foreign and domestic 

markets, including, but not limited to 

dehydration, radiation, freeze drying, or 

freezing of cranberries as outlets for 

withheld cranberries. They further 

recommended that cranberries may not 

be converted into canned, frozen, or 

dehydrated cranberries or other 

cranberry products by any commercial 

process prior to diversion to foreign 

countries. These outlets for restricted 

cranberries would be added to the rules 

and regulations under the Order by 

creating a new § 929.108. 

The Committee also recommended 

organically grown cranberries be exempt 

from this proposed regulation as they 

serve a niche market and represent a 

very small portion of the total crop. All 

other cranberry production, including 

fresh cranberries, would be subject to 

regulation under the handler withhold 

volume regulation. 

To address the burden the volume 

regulation would have on small 

handlers, the Committee also 

recommended providing a minimum 

quantity exemption of 125,000 barrels. 

Under the Committee’s 

recommendation, the exemption would 

be given to handlers of record for the 

2016–17 (previous) crop year and the 

125,000 barrels would be subtracted 

from the handler’s 2017–18 acquired 

volume before the restricted percentage 

would be applied. Small handlers 

whose acquired volume is 125,000 

barrels or less would be exempt from 

the volume regulation, and handlers 

with slightly larger volumes would face 

minimal restrictions. 

After much consideration, USDA 

determined the minimum exemption 

recommendation should be revised 

under this proposal. Rather than 

provide an exemption of 125,000 barrels 

for each handler, this action would 

exempt small handlers who process less 

than 125,000 barrels from the 15 percent 

restriction. Further, only handlers who 

would have carryover inventory that is 

not sold or under contract at the end of 

the 2017–18 fiscal year would be subject 

to the 15 percent restriction. These 

changes would reflect the Committee’s 

goal of reducing the burden on small 

handlers, and would allow handlers that 

have matched their production with 

market demand to continue to serve 

their customer base and protect their 

market share. Handlers subject to the 

restriction should be able to meet any 

market shortfalls by utilizing cranberries 

or cranberry products they have in 

inventory. 

With this change, only those handlers 

carrying inventory would be subject to 

the restriction. In reviewing the 

Committee’s recommendation and other 

available industry information, it is the 

existing inventories in excess of 9 

million barrels that is putting the most 

downward pressure on returns to both 

grower and handler. Consequently, this 

change would put more focus on 

reducing the volume in inventory. 

Accordingly, this proposal would 

establish free and restricted percentages 

of 85 percent and 15 percent, 

respectively, for the 2017–18 season, 

provide handlers with the option to 

divert processed cranberry products to 

meet up to 50 percent of their restricted 

percentage, and define outlets for 

restricted fruit. The Committee 

recommended these actions in a vote of 

11 in favor and 2 opposed. This rule 

would also would exempt small 

handlers who process less than 125,000 

barrels from the restriction, as well as 

handlers with no carryout inventory. 

One member who opposed the 

Committee’s recommendations stated 

the regulation would cause a hardship 

on small handlers, as many are able to 

sell all of their production each season 

and do not maintain an inventory. He 

further stated that the small handlers 

did not create the problem and should 

not be a part of the solution. However, 

this issue is addressed by providing the 

minimum exemption of 125,000 barrels 

of cranberries, which would exempt 

many small handlers from the 

regulation entirely. The other member 


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Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Proposed Rules 75 

who voted against the recommendation 

opposed volume regulation in general. 

The Committee considered the 

estimated level of production, 

anticipated demand, and determined 

that without some action on the part of 

the Committee, inventory levels would 

continue to increase throughout the 

2017–18 season. The Committee 

believes using the volume control 

authorities in the Order would help 

stabilize marketing conditions for 

cranberries by helping to adjust supply 

to meet market demand and improve 

grower returns. 

The Committee also recommended 

reporting and recordkeeping 

requirements to be used with the 

volume regulation, as well as safeguard 

measures to monitor compliance. These 

recommendations are being considered 

under separate actions. 

Initial 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 initial 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 producers 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 

producers 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 resulting in high 

levels of inventories, grower and 

handler returns can be negatively 

impacted. 

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. With an 

inelastic demand, even a small shift in 

supply can affect grower prices. The 

Committee’s recommendation to set free 

and restricted percentages would more 

closely align supply with demand. Free 

percentage cranberries could be 

marketed by handlers to any outlet, 

while restricted percentage volume 

could only be used for noncompetitive 

purposes. Establishing free and 

restricted percentages would result in a 

decrease in supply, as handlers can only 

deliver a certain portion of their 

cranberries into the competitive 

marketplace. Therefore, using volume 

regulation to reduce supply should 

increase grower and handler prices and 

revenues. 

This proposal would control the 

supply of cranberries by establishing 

free and restricted percentages at 85 

percent free and 15 percent restricted 

for the 2017–18 crop year. It would also 

allow for the diversion of 2017–18 

processed cranberry products to meet 

up to 50 percent of a handler’s 

restriction. In addition, this proposal 

would establish a minimum quantity 

exemption, exempt handlers with no 

carryout inventory, exempt organically 

grown cranberries, and define outlets for 

restricted fruit. These actions are 

designed to help stabilize marketing 

conditions, reduce burdensome 

inventories, and improve grower and 

handler returns. This rule would 

establish new §§ 929.107, 929.108 and 

929.252. The authority for these actions 

is provided for in §§ 929.51, 929.52, 

929.54, 929.57, 929.58. These changes 

are based on Committee 

recommendations from meetings on 

August 4 and August 31, 2017. 

While these actions could result in 

some additional costs to the industry, 

the benefits are expected to outweigh 

them. The purpose of establishing free 

and restricted percentages 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 would 

likely continue to increase, further 

lowering returns. 

Inventories have more than doubled 

since 2011. In 2011, existing inventories 

were around 4.6 million barrels. By the 

end of the 2016–17 season, inventories 

are anticipated to be around 9.9 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 will reach an anticipated 115 

percent after the 2017–18 season if 

volume control is not implemented. 

These inventories have had a depressing 

effect on grower prices, which for many 

has fallen below their cost of 

production. 

Retail demand for cranberries is 

highly inelastic, which indicates 

changes in consumer price do not result 

in significant changes in the quantity 

demanded. Consumer prices largely do 

not reflect 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 

free and restricted percentages would 

likely have a positive impact on grower 

and handler returns for this crop year. 

This proposal would result in some 

fruit being taken off the market. 

However, a sufficient amount of fruit 

would still be available to supply all 

aspects of the market. In addition, 

allowing handlers the option to divert 

2017–18 processed cranberry products 

to meet up to 50 percent of their 

restriction would provide handlers 

some additional flexibility and may 

help reduce inventories of juice 

concentrate, one of the largest segments 

of existing inventory. 

This action would also exempt small 

handlers who process less than 125,000 


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76 Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Proposed Rules 

barrels from the restriction. 

Consequently, small handlers whose 

acquired volume is 125,000 barrels or 

less would be exempt from the volume 

restriction, and handlers with slightly 

larger volumes would face minimal 

restrictions. This would reduce the 

burden the volume restriction would 

have on small handlers and their 

growers. 

In addition, only handlers who would 

have carryover inventory that is not sold 

or under contract at the end of the 

2017–18 fiscal year would be subject to 

the 15 percent restriction. This would 

allow handlers that have matched their 

production with market demand to 

continue to serve their customer base 

and protect their market share. Handlers 

subject to the restriction would be able 

to meet any shortfalls by utilizing 

cranberries or cranberry products they 

have in inventory. 

There are also secondary uses 

available for restricted 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 could 

be utilized to meet demand. 

As the restriction represents a 

percentage of a handler’s volume, 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, 

would benefit from the stabilizing 

effects of this restriction. 

One alternative considered was not to 

impose volume restrictions during the 

2017–18 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 

levels of free and restricted percentages. 

However, some members were 

concerned that setting a restriction that 

was too high could negatively impact 

small handlers. The Committee 

determined that allowing diversion of 

50 percent to meet the restriction allows 

large handlers to reduce inventory and 

not add additional volumes of 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, Generic 

Fruit Crops. The Committee will be 

recommending reporting and 

recordkeeping requirements to be used 

with the volume restriction, as well as 

safeguard measures to monitor 

compliance, under a separate 

rulemaking action. 

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. USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this proposed 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 and 

August 31, 2017, meetings were public 

meetings and all entities, both large and 

small, were able to express views on 

these issues. Finally, interested persons 

are invited to submit comments on this 

proposed rule, including the regulatory 

and informational impacts of this action 

on small businesses. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

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

MarketingOrdersSmallBusinessGuide. 

Any questions about the compliance 

guide should be sent to Richard Lower 

at the previously-mentioned address in 

the FOR FURTHER INFORMATION CONTACT

section. 

A 30-day comment period is provided 

to allow interested persons to respond 

to this proposal. Thirty days is deemed 

appropriate since handlers are already 

receiving cranberries from the 2017–18 

crop and the proposed handler 

withholding needs to be applied in 

order to be effective. All written 

comments timely received will be 

considered before a final determination 

is made on this rule. 

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 proposed to 

be 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 Redesignated as Subpart A 

■ 2. Designate the subpart labeled 

‘‘Order Regulating Handling’’ as Subpart 

A. 

Subpart Redesignated as Subpart B and 

Amended 

■ 3. Designate the subpart labeled 

‘‘Rules and Regulations’’ as Subpart B 

and revise the heading as shown below: 

Subpart B—Administrative 

Requirements 

■ 4. Add § 929.107 to read as follows: 

§ 929.107 Conversion. 

During a year of volume regulation, 

cranberry concentrate and other 

processed products made from excess or 

restricted cranberries harvested in that 

year may be diverted according to the 

provisions of this part. Any handler 

disposing of concentrate or other 

processed products must report the 

whole-berry equivalent to the 

Committee so that all excess or 

restricted cranberries are accounted for 

and reported per rules and regulations 

in effect. Table 1-Conversion Table 

provides a conversion rate for 

concentrate to barrels of whole berries 

based on Brix average by production 

region. Should requests be made to use 

other processed products for diversion, 

conversion rates for those products 

would be provided by the Committee 

based on information provided by the 

requesting handler. 


daltland on DSKBBV9HB2PROD with PROPOSALS
Federal Register / Vol. 83, No. 1 / Tuesday, January 2, 2018 / Proposed Rules 77 

TABLE 1 TO § 929.107—CONVERSION TABLE

Region Brix 

average 

Concentrate yield for one barrel 

of cranberries 

Oregon .................................................................................................................................. 9.8 1.91 gallons 50 Brix concentrate. 

Washington ........................................................................................................................... 9.3 1.81 gallons 50 Brix concentrate. 

New Jersey ........................................................................................................................... 8.8 1.72 gallons 50 Brix concentrate. 

Wisconsin ............................................................................................................................. 8.7 1.70 gallons 50 Brix concentrate. 

Massachusetts ...................................................................................................................... 8.4 1.64 gallons 50 Brix concentrate. 

All others .............................................................................................................................. 8.7 1.70 gallons 50 Brix concentrate. 

■ 5. Add § 929.108 to read as follows: 

§ 929.108 Outlets for restricted 

cranberries. 

In accordance with § 929.57, 

restricted cranberries may be diverted 

only to the following noncommercial or 

noncompetitive outlets: 

(a) Foreign countries, except Canada, 

provided that restricted cranberries 

diverted under this provision may not 

be converted into canned, frozen, or 

dehydrated cranberries or other 

cranberry products by any commercial 

process, prior to diversion; 

(b) Charitable institutions; 

(c) Any nonhuman food use, or; 

(d) Research and development 

projects approved by the Committee 

dealing with the development of foreign 

and domestic markets, including, but 

not limited to dehydration radiation, 

freeze drying, or freezing of cranberries. 

Subpart Redesignated as Subpart C 

■ 6. Designate the subpart labeled 

‘‘Assessment Rate’’ as Subpart C. 

■ 7. Add § 929.252 to read as follows: 

§ 929.252 Free and restricted percentages 

for the 2017–18 crop year. 

(a) The percentages for cranberries 

handled by handlers during the crop 

year beginning on September 1, 2017, 

which shall be free and restricted, 

respectively are designated as follows: 

Free percentage, 85 percent and 

restricted percentage, 15 percent. 

(b) Handlers have the option to 

process restricted cranberries into 

dehydrated cranberries or other 

processed products. Handlers also have 

the option to divert concentrate or other 

processed products as provided in 

§ 929.107 to account for up to 50 

percent of their restriction. 

(c) Organically grown fruit shall be 

exempt from the volume regulation 

requirements of this section. Small 

handlers who process less than 125,000 

barrels during the 2017–18 fiscal year 

are exempt from the restriction. Any 

handler who does not have carryover 

inventory at the end of the 2017–18 

fiscal year would also be exempt. 

Dated: December 26, 2017. 

Bruce Summers, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2017–28169 Filed 12–29–17; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 930 

[Doc. No. AMS–SC–17–0047; SC17–930–1 

PR] 

Tart Cherries Grown in the States of 

Michigan, et al.; Revision of Exemption 

Requirements 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

implement a recommendation from the 

Cherry Industry Administrative Board 

(Board) to revise the exemption 

provisions under the Marketing Order 

for tart cherries (Order). This rule 

changes the number of years that new 

product, new market development, and 

market expansion projects are eligible 

for handler diversion credit. This action 

would also permit handlers to apply for 

previously awarded projects if the 

original handler has not begun the 

project within a year of approval, and 

provides an expedited approval option 

for some market expansion activities. 

These changes are intended to 

encourage handlers to participate in 

new product, new market and market 

expansion activities, expand demand, 

and make the approval process more 

efficient. 

This proposal also contains a 

formatting change to subpart references 

to bring the language into conformance 

with the Office of Federal Register 

requirements. 

DATES: Comments must be received by 

February 1, 2018. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments must be 

sent to the Docket Clerk, Marketing 

Order and Agreement Division, 

Specialty Crops Program, AMS, USDA, 

1400 Independence Avenue SW, STOP 

0237, Washington, DC 20250–0237; Fax: 

(202) 720–8938; or internet: http://

www.regulations.gov. All comments 

should reference the document number 

and the date and page number of this 

issue of the Federal Register and will be 

made available for public inspection in 

the Office of the Docket Clerk during 

regular business hours, or can be viewed 

at: http://www.regulations.gov. All 

comments submitted in response to this 

rule will be included in the record and 

will be made available to the public. 

Please be advised that the identity of the 

individuals or entities submitting the 

comments will be made public on the 

internet at the address provided above. 

FOR FURTHER INFORMATION CONTACT: This 

action, pursuant to 5 U.S.C. 553, 

proposes an amendment to regulations 

issued to carry out a marketing order as 

defined in 7 CFR 900.2(j). Jennie M. 

Varela, 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– 

3775, Fax: (863) 291–8614, or Email: 

Jennie.Varela@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 

action, pursuant to 5 U.S.C. 553, 

proposes an amendment to regulations 

issued to carry out a marketing order as 

defined in 7 CFR 900.2(j). This proposed 

rule is issued under Marketing Order 

No. 930, as amended (7 CFR part 930), 

regulating the handling of tart cherries 

grown in the States of Michigan, New 

York, Pennsylvania, Oregon, Utah, 

Washington, and Wisconsin. Part 930 


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