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Rules and Regulations Federal Register

29647 

Vol. 75, No. 102 

Thursday, May 27, 2010 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 930 

[Doc. No. AMS–FV–09–0069; FV09–930–2 

FR] 

Tart Cherries Grown in the States of 

Michigan, et al.; Final Free and 

Restricted Percentages for the 2009– 

2010 Crop Year 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule establishes final free 

and restricted percentages for the 2009– 

2010 crop year under the Federal 

marketing order regulating tart cherries 

grown in seven States (order). The 

percentages are 32 percent free and 68 

percent restricted and establish the 

proportion of cherries from the 2009 

crop which may be handled in 

commercial outlets. The percentages are 

intended to stabilize supplies and 

prices, and strengthen market 

conditions. The percentages were 

recommended by the Cherry Industry 

Administrative Board (Board), the body 

that locally administers the order. The 

order regulates the handling of tart 

cherries grown in the States of 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

Wisconsin. 

DATES: Effective Date: May 28, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Kenneth G. Johnson, Marketing Order 

Administration Branch, Fruit and 

Vegetable Programs, AMS, USDA, Unit 

155, 4700 River Road, Riverdale, MD 

20737; telephone: (301) 734–5243, Fax: 

(301) 734–5275, or E-mail: 

Kenneth.Johnson@ams.usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Antoinette 

Carter, Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue, SW., STOP 0237, Washington, 

DC 20250–0237; telephone: (202) 720– 

2491, Fax: (202) 720–8938, or E-mail: 

Antoinette.Carter@ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This final 

rule is issued under Marketing 

Agreement and Order No. 930 (7 CFR 

part 930), regulating the handling of tart 

cherries produced in the States of 

Michigan, New York, Pennsylvania, 

Oregon, Utah, Washington, and 

Wisconsin, 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 

(Department) is issuing this rule in 

conformance with Executive Order 

12866. 

This final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. Under the marketing 

order provisions now in effect, final free 

and restricted percentages may be 

established for tart cherries handled by 

handlers during the crop year. This final 

rule will establish final free and 

restricted percentages for tart cherries 

for the 2009–2010 crop year, beginning 

July 1, 2009, through June 30, 2010. 

The Act provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

section 608c(15)(A) of the Act, any 

handler subject to an order may file 

with the Secretary a petition stating that 

the order, any provision of the order, or 

any obligation imposed in connection 

with the order is not in accordance with 

law and request a modification of the 

order or to be exempt therefrom. Such 

handler is afforded the opportunity for 

a hearing on the petition. After the 

hearing, the Secretary would rule on the 

petition. The Act provides that the 

district court of the United States in any 

district in which the handler is an 

inhabitant, or has his or her principal 

place of business, has jurisdiction in 

equity to review the Secretary’s ruling 

on the petition, provided an action is 

filed not later than 20 days after the date 

of the entry of the ruling. 

The order prescribes procedures for 

computing an optimum supply and 

preliminary and final percentages that 

establish the amount of tart cherries that 

can be marketed throughout the season. 

The regulations apply to all handlers of 

tart cherries that are in the regulated 

districts. Tart cherries in the free 

percentage category may be shipped 

immediately to any market, while 

restricted percentage tart cherries must 

be held by handlers in a primary or 

secondary reserve, or be diverted in 

accordance with § 930.59 of the order 

and § 930.159 of the regulations, or used 

for exempt purposes (to obtain diversion 

credit) under § 930.62 of the order and 

§ 930.162 of the regulations. The 

regulated Districts for this season are: 

District One—Northern Michigan; 

District Two—Central Michigan; District 

Three—Southern Michigan; District 

Four—New York; District Seven—Utah; 

and District Eight—Washington. 

Districts Five, Six, and Nine (Oregon, 

Pennsylvania, and Wisconsin, 

respectively) will not be regulated for 

the 2009–2010 season. 

The order prescribes under § 930.52 

that those districts to be regulated shall 

be those districts in which the average 

annual production of cherries over the 

prior three years has exceeded six 

million pounds. A district not meeting 

the six million-pound requirement shall 

not be regulated in such crop year. 

Because this requirement was not met in 

the Districts of Oregon, Pennsylvania, 

and Wisconsin, handlers in those 

districts are not subject to volume 

regulation during the 2009–2010 crop 

year. 

Demand for tart cherries at the farm 

level is derived from the demand for tart 

cherry products at retail. Demand for 

tart cherries and tart cherry products 

tends to be relatively stable from year to 

year. The supply of tart cherries, by 

contrast, varies greatly from crop year to 

crop year. The magnitude of annual 

fluctuations in tart cherry supplies is 

one of the most pronounced for any 

agricultural commodity in the United 

States. In addition, since tart cherries 

are processed either into cans or frozen, 

they can be stored and carried over from 

crop year to crop year. This creates 

substantial coordination and marketing 

problems. The supply and demand for 

tart cherries is rarely balanced. The 

primary purpose of setting free and 

restricted percentages is to balance 

supply with demand and reduce large 

surpluses that may occur. 

Section 930.50(a) of the order 

prescribes procedures for computing an 

optimum supply for each crop year. The 

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29648 Federal Register / Vol. 75, No. 102 / Thursday, May 27, 2010 / Rules and Regulations 

Board must meet on or about July 1 of 

each crop year, to review sales data, 

inventory data, current crop forecasts 

and market conditions. The optimum 

supply volume shall be calculated as 

100 percent of the average sales of the 

prior three years, to which is added a 

desirable carryout inventory not to 

exceed 20 million pounds or such other 

amount as may be established with the 

approval of the Secretary. The optimum 

supply represents the desirable volume 

of tart cherries that should be available 

for sale in the coming crop year. 

The order also provides that on or 

about July 1 of each crop year, the Board 

is required to establish preliminary free 

and restricted percentages. These 

percentages are computed by deducting 

the actual carryin inventory from the 

optimum supply figure (adjusted to raw 

product equivalent—the actual weight 

of cherries handled to process into 

cherry products) and subtracting that 

figure from either the current year’s 

USDA crop forecast or from an average 

of such other crop estimates the Board 

votes to use. If the resulting number is 

positive, this represents the estimated 

over-production, which would be the 

restricted percentage tonnage. The 

restricted percentage tonnage is then 

divided by the sum of the crop forecast 

for the regulated districts to obtain 

preliminary percentages for the 

regulated districts. The Board is 

required to establish a preliminary 

restricted percentage equal to the 

quotient, rounded to the nearest whole 

number, with the complement being the 

preliminary free tonnage percentage. If 

the tonnage requirements for the year 

are more than the USDA crop forecast, 

the Board is required to establish a 

preliminary free tonnage percentage of 

100 percent and a preliminary restricted 

percentage of zero. The Board is 

required to announce the preliminary 

percentages in accordance with 

paragraph (h) of § 930.50. 

The Board met on June 18, 2009, and 

computed, for the 2009–2010 crop year, 

an optimum supply of 183 million 

pounds. The Board recommended that 

the desirable carryout figure be zero 

pounds. Desirable carryout is the 

amount of fruit required to be carried 

into the succeeding crop year and is set 

by the Board after considering market 

circumstances and needs. This figure 

can range from zero to a maximum of 20 

million pounds. 

The Board calculated preliminary free 

and restricted percentages as follows: 

The USDA estimate of the crop for the 

entire production area was 284 million 

pounds; a 31 million pound carryin 

(based on Board estimates) was 

subtracted from the optimum supply of 

183 million pounds which resulted in 

the 2009–2010 poundage requirements 

(adjusted optimum supply) of 152 

million pounds. The carryin figure 

reflects the amount of cherries that 

handlers actually had in inventory at 

the beginning of the 2009–2010 crop 

year. Subtracting the adjusted optimum 

supply of 152 million pounds from the 

USDA crop estimate, (284 million 

pounds) results in a surplus of 131 

million pounds of tart cherries. The 

surplus was divided by the production 

in the regulated districts (269 million 

pounds) and resulted in a restricted 

percentage of 49 percent for the 2009– 

2010 crop year. The free percentage was 

51 percent (100 percent minus 49 

percent). The Board established these 

percentages and announced them to the 

industry as required by the order. 

The preliminary percentages were 

based on the USDA production estimate 

and the following supply and demand 

information available at the June 

meeting for the 2009–2010 year: 

Millions 

of pounds 

Optimum Supply Formula: 

(1) Average sales of the prior three years ....................................................................................................................................... 183 

(2) Plus desirable carryout ............................................................................................................................................................... 0 

(3) Optimum supply calculated by the Board at the June meeting ................................................................................................. 183 

Preliminary Percentages: 

(4) USDA crop estimate ................................................................................................................................................................... 284 

(5) Carryin held by handlers as of July 1, 2008 .............................................................................................................................. 31 

(6) Adjusted optimum supply for current crop year ......................................................................................................................... 152 

(7) Surplus ........................................................................................................................................................................................ 131 

(8) USDA crop estimate for regulated districts ................................................................................................................................ 269 

Free Restricted 

(9) Preliminary percentages (item 7 divided by item 8 x 100 equals restricted percentage; 100 minus restricted percentage equals free percentage). ................................................................................................................................. 51 49 

Between July 1 and September 15 of 

each crop year, the Board may modify 

the preliminary free and restricted 

percentages by announcing interim free 

and restricted percentages to adjust to 

the actual pack occurring in the 

industry. No later than September 15, 

the Board must recommend final free 

and restricted percentages to the 

Secretary. 

The Secretary establishes final free 

and restricted percentages through the 

informal rulemaking process. These 

percentages make available the tart 

cherries necessary to achieve the 

optimum supply figure calculated by 

the Board. The difference between any 

final free percentage designated by the 

Secretary and 100 percent is the final 

restricted percentage. 

The Board met on September 10, 

2009, and recommended final free and 

restricted percentages. The actual 

production reported by the Board was 

355 million pounds, which is a 71 

million pound increase from the USDA 

crop estimate of 284 million pounds. 

The Board adjusted the optimum supply 

figure from 183 million pounds 

calculated for preliminary percentages 

to 176 million pounds when calculating 

the final percentages. This adjustment 

was made because the sales figure for 

June 2009, which is used to compute 

three-year average sales, was estimated 

for preliminary percentages, but was 

based on actual numbers for final 

percentages. 

A 52 million pound carryin (based on 

handler reports) was subtracted from the 

optimum supply of 176 million pounds 

which resulted in the 2009–2010 

poundage requirements (adjusted 

optimum supply) of 124 million 

pounds. Subtracting the adjusted 

optimum supply of 124 million pounds 

from the USDA crop estimate (355 

million pounds), results in a surplus of 

231 million pounds of tart cherries. The 

surplus was divided by the production 

in the regulated districts (338 million 

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Federal Register / Vol. 75, No. 102 / Thursday, May 27, 2010 / Rules and Regulations 29649 

pounds) and resulted in a restricted 

percentage of 68 percent for the 2009– 

2010 crop year. The free percentage was 

32 percent (100 percent minus 68 

percent). 

The final percentages are based on the 

Board’s reported production figures and 

the following supply and demand 

information available in September for 

the 2009–2010 crop year: 

Million 

pounds 

Optimum Supply Formula:.

(1) Average sales of the prior three years ....................................................................................................................................... 176 

(2) Plus desirable carryout ............................................................................................................................................................... 0 

(3) Optimum supply calculated by the Board ................................................................................................................................... 176 

Final Percentages:.

(4) Board reported production .......................................................................................................................................................... 355 

(5) Plus carryin held by handlers as of July 1, 2009 ....................................................................................................................... 52 

(6) Tonnage available for current crop year .................................................................................................................................... 407 

(7) Surplus (item 6 minus item 3) .................................................................................................................................................... 231 

(8) Production in regulated districts ................................................................................................................................................. 338 

Free Percentages 

restricted 

(9) Final Percentages (item 7 divided by item 8 × 100 equals restricted percentage; 100 minus restricted percentage 

equals free percentage) ................................................................................................................................................ 32 68 

The USDA’s ‘‘Guidelines for Fruit, 

Vegetable, and Specialty Crop 

Marketing Orders’’ specify that 110 

percent of recent years’ sales should be 

made available to primary markets each 

season before recommendations for 

volume regulation are approved. This 

goal would be met by the establishment 

of a preliminary percentage which 

releases 100 percent of the optimum 

supply and the additional release of tart 

cherries provided under § 930.50(g). 

This release of tonnage, equal to 10 

percent of the average sales of the prior 

three years sales, is made available to 

handlers each season. The Board 

recommended that such release should 

be made available to handlers the first 

week of December and the first week of 

May. Handlers can decide how much of 

the 10 percent release they would like 

to receive on the December and May 

release dates. Once released, such 

cherries are available to handlers for 

free use. Approximately 18 million 

pounds would be made available to 

handlers this season in accordance with 

Department Guidelines. This release 

would be made available to every 

handler in proportion to each handler’s 

percentage of the total regulated crop 

handled. If a handler does not take his/ 

her proportionate amount, such amount 

remains in the inventory reserve. 

Final Regulatory Flexibility Analysis 

Pursuant to requirements set forth in 

the Regulatory Flexibility Act (RFA), 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 

business subject to such actions in order 

that small businesses will not be unduly 

or disproportionately burdened. 

Marketing orders issued pursuant to the 

Act, and rules issued thereunder, are 

unique in that they are brought about 

through group action of essentially 

small entities acting on their own 

behalf. Thus, both statutes have small 

entity orientation and compatibility. 

There are approximately 40 handlers 

of tart cherries who are subject to 

regulation under the tart cherry 

marketing order and approximately 600 

producers of tart cherries in the 

regulated area. Small agricultural 

service firms, which includes handlers, 

have been defined by the Small 

Business Administration (SBA) (13 CFR 

121.201) as those having annual receipts 

of less than $7,000,000, and small 

agricultural producers are defined as 

those having annual receipts of less than 

$750,000. A majority of the producers 

and handlers are considered small 

entities under SBA’s standards. 

The principal demand for tart cherries 

is in the form of processed products. 

Tart cherries are dried, frozen, canned, 

juiced, and pureed. During the period 

1997/98 through 2008/09, 

approximately 96 percent of the U.S. 

tart cherry crop, or 244.4 million 

pounds, was processed annually. Of the 

244.4 million pounds of tart cherries 

processed, 61 percent was frozen, 27 

percent was canned, and 12 percent was 

utilized for juice and other products. 

Based on National Agricultural 

Statistics Service data, acreage in the 

United States devoted to tart cherry 

production has been trending 

downward. Bearing acreage has 

declined from a high of 50,050 acres in 

1987/88 to 34,650 acres in 2008/09. This 

represents a 31 percent decrease in total 

bearing acres. Michigan leads the nation 

in tart cherry acreage with 70 percent of 

the total and produces about 75 percent 

of the U.S. tart cherry crop each year. 

The 2009/10 crop is large in size at 

355 million pounds. This production 

level is 71.5 million pounds greater than 

the 283.6 million pounds estimated by 

the National Agricultural Statistics 

Service (NASS) in June. The largest crop 

occurred in 1995 with production in the 

regulated districts reaching a record 

395.6 million pounds. The price per 

pound received by tart cherry growers 

ranged from a low of 7.3 cents in 1987 

to a high of 46.4 cents in 1991. These 

problems of wide supply and price 

fluctuations in the tart cherry industry 

are national in scope and impact. 

Growers testified during the order 

promulgation process that the prices 

they received often did not come close 

to covering the costs of production. 

The industry demonstrated a need for 

an order during the promulgation 

process of the marketing order because 

large variations in annual tart cherry 

supplies tend to lead to fluctuations in 

prices and disorderly marketing. As a 

result of these fluctuations in supply 

and price, growers realize less income. 

The industry chose a volume control 

marketing order to even out these wide 

variations in supply and improve 

returns to growers. During the 

promulgation process, proponents 

testified that small growers and 

processors would have the most to gain 

from implementation of a marketing 

order because many such growers and 

handlers had been going out of business 

due to low tart cherry prices. They also 

testified that, since an order would help 

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29650 Federal Register / Vol. 75, No. 102 / Thursday, May 27, 2010 / Rules and Regulations 

increase grower returns, this should 

increase the buffer between business 

success and failure because small 

growers and handlers tend to be less 

capitalized than larger growers and 

handlers. 

Aggregate demand for tart cherries 

and tart cherry products tends to be 

relatively stable from year-to-year. 

Similarly, prices at the retail level show 

minimal variation. Consumer prices in 

grocery stores, and particularly in food 

service markets, largely do not reflect 

fluctuations in cherry supplies. Retail 

demand is assumed to be highly 

inelastic, which indicates that price 

reductions do not result in large 

increases in the quantity demanded. 

Most tart cherries are sold to food 

service outlets and to consumers as pie 

filling; frozen cherries are sold as an 

ingredient to manufacturers of pies and 

cherry desserts. Juice and dried cherries 

are expanding market outlets for tart 

cherries. 

Demand for tart cherries at the farm 

level is derived from the demand for tart 

cherry products at retail. In general, the 

farm-level demand for a commodity 

consists of the demand at retail or food 

service outlets minus per-unit 

processing and distribution costs 

incurred in transforming the raw farm 

commodity into a product available to 

consumers. These costs comprise what 

is known as the ‘‘marketing margin.’’ 

The supply of tart cherries, by 

contrast, varies greatly. The magnitude 

of annual fluctuations in tart cherry 

supplies is one of the most pronounced 

for any agricultural commodity in the 

United States. In addition, since tart 

cherries are processed either into cans 

or frozen, they can be stored and carried 

over from year-to-year. This creates 

substantial coordination and marketing 

problems. The supply and demand for 

tart cherries is rarely in equilibrium. As 

a result, grower prices fluctuate widely, 

reflecting the large swings in annual 

supplies. 

In an effort to stabilize prices, the tart 

cherry industry uses the volume control 

mechanisms under the authority of the 

Federal marketing order. This authority 

allows the industry to set free and 

restricted percentages. These restricted 

percentages are only applied to states or 

districts with a 3-year average of 

production greater than six million 

pounds. 

The primary purpose of setting 

restricted percentages is an attempt to 

bring supply and demand into balance. 

If the primary market is over-supplied 

with cherries, grower prices decline 

substantially. 

The tart cherry sector uses an 

industry-wide storage program as a 

supplemental coordinating mechanism 

under the Federal marketing order. The 

primary purpose of the storage program 

is to warehouse supplies in large crop 

years in order to supplement supplies in 

short crop years. The storage approach 

is feasible because the increase in 

price—when moving from a large crop 

to a short crop year—more than offsets 

the costs for storage, interest, and 

handling of the stored cherries. 

The price that growers receive for 

their crop is largely determined by the 

total production volume and carryin 

inventories. The Federal marketing 

order permits the industry to exercise 

supply control provisions, which allow 

for the establishment of free and 

restricted percentages for the primary 

market, and a storage program. The 

establishment of restricted percentages 

impacts the production to be marketed 

in the primary market, while the storage 

program has an impact on the volume 

of unsold inventories. 

The volume control mechanism used 

by the cherry industry results in 

decreased shipments to primary 

markets. Without volume control the 

primary markets (domestic) would 

likely be over-supplied, resulting in 

lower grower prices. 

To assess the impact that volume 

control has on the prices growers 

receive for their product, an 

econometric model has been developed. 

The econometric model provides a way 

to see what impacts volume control may 

have on grower prices. The three 

districts in Michigan, along with the 

districts in Utah, New York, and 

Washington are the restricted areas for 

this crop year and their combined total 

production is 338 million pounds. A 68 

percent restriction means 108 million 

pounds is available to be shipped to 

primary markets from these four states. 

Production levels of 10.7 million 

pounds for Wisconsin, 2.7 million 

pounds for Oregon, and 3.8 million 

pounds for Pennsylvania (the 

unregulated areas in 2009/10), result in 

an additional 17.2 million pounds 

available for primary market shipments. 

In addition, USDA requires a 10 

percent release from reserves as a 

market growth factor. This results in an 

additional 18 million pounds being 

available for the primary market. The 

108 million pounds from Michigan, 

Utah, Washington, and New York, the 

17.2 million pounds from the other 

producing states, the 18 million pound 

release, and the 52 million pound 

carryin inventory gives a total of 195.2 

million pounds being available for the 

primary markets. 

The econometric model is used to 

estimate the impact of establishing a 

reserve pool for this year’s crop. With 

the volume controls, grower prices are 

estimated to be approximately $0.12 per 

pound higher than without volume 

controls. 

The use of volume controls is 

estimated to have a positive impact on 

growers’ total revenues. With regulation, 

growers’ total revenue from processed 

cherries are estimated to be $17.3 

million higher than without restrictions. 

The without restrictions scenario 

assumes that all tart cherries produced 

would be delivered to processors for 

payments. 

It is concluded that the 68 percent 

volume control would not unduly 

burden producers, particularly smaller 

growers. The 68 percent restriction 

would be applied to the growers in 

Michigan, New York, Utah, and 

Washington. The growers in the other 

three states covered under the marketing 

order will benefit from this restriction. 

Recent grower prices have been as 

high as $0.44 per pound in 2002–03 

when there was a crop failure. Prices in 

the last two crop years have been $0.268 

in 2007–08 and $0.372 per pound in 

2008–09. At current production levels, 

yield is estimated at approxiamately 

10,251 poounds per acre. At this level 

of yield the cost of production is 

estimated to be $0.25 per pound (costs 

were estimated by represenataives of 

Michigan State University with input 

provided by growers for the current 

crop). While grower prices have not 

been established in the 2009–10 crop 

year, some processors have received an 

initial payment of ten cents per pound. 

Additional payments by processors will 

be based on the volume of packed crop 

for the 2009–10 marketing year. The 

final grower price will likely be around 

$0.15 per pound for the combined free 

and restricted production. Thus, this 

year’s grower price even with regulation 

is estimated to be below the cost of 

production. The use of volume controls 

is believed to have little or no effect on 

consumer prices and will not result in 

fewer retail sales or sales to food service 

outlets. 

Without the use of volume controls, 

the industry could be expected to start 

to build large amounts of unwanted 

inventories. These inventories have a 

depressing effect on grower prices. The 

econometric model shows for every 1 

million-pound increase in carryin 

inventories, a decrease in grower prices 

of $0.0036 per pound occurs. The use of 

volume controls allows the industry to 

supply the primary markets while 

avoiding the disastrous results of oversupplying these markets. In addition, 

through volume control, the industry 

has an additional supply of cherries that 

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Federal Register / Vol. 75, No. 102 / Thursday, May 27, 2010 / Rules and Regulations 29651 

can be used to develop secondary 

markets such as exports and the 

development of new products. The use 

of reserve cherries in the production 

shortened 2002/03 crop year proved to 

be very useful and beneficial to growers 

and packers. 

In discussing the possibility of 

marketing percentages for the 2009– 

2010 crop year, the Board considered 

the following factors contained in the 

marketing policy: (1) The estimated total 

production of tart cherries; (2) the 

estimated size of the crop to be handled; 

(3) the expected general quality of such 

cherry production; (4) the expected 

carryover as of July 1 of canned and 

frozen cherries and other cherry 

products; (5) the expected demand 

conditions for cherries in different 

market segments; (6) supplies of 

competing commodities; (7) an analysis 

of economic factors having a bearing on 

the marketing of cherries; (8) the 

estimated tonnage held by handlers in 

primary or secondary inventory 

reserves; and (9) any estimated release 

of primary or secondary inventory 

reserve cherries during the crop year. 

The Board’s review of the factors 

resulted in the computation and 

announcement in September 2009 of the 

free and restricted percentages proposed 

to be established by this rule (32 percent 

free and 68 percent restricted). 

One alternative to this action would 

be not to have volume regulation this 

season. Board members stated that no 

volume regulation would be detrimental 

to the tart cherry industry due to the 

size of the 2009–2010 crop. Returns to 

growers would not cover their costs of 

production for this season which might 

cause some to go out of business. 

As mentioned earlier, the 

Department’s ‘‘Guidelines for Fruit, 

Vegetable, and Specialty Crop 

Marketing Orders’’ specify that 110 

percent of recent years’ sales should be 

made available to primary markets each 

season before recommendations for 

volume regulation are approved. The 

quantity available under this rule is 110 

percent of the quantity shipped in the 

prior three years. 

The free and restricted percentages 

established by this rule release the 

optimum supply and apply uniformly to 

all regulated handlers in the industry, 

regardless of size. There are no known 

additional costs incurred by small 

handlers that are not incurred by large 

handlers. The stabilizing effects of the 

percentages impact all handlers 

positively by helping them maintain 

and expand markets, despite seasonal 

supply fluctuations. Likewise, price 

stability positively impacts all 

producers by allowing them to better 

anticipate the revenues their tart 

cherries will generate. 

As noted in the initial regulatory 

flexibility analysis, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this regulation. 

While the benefits resulting from this 

rulemaking are difficult to quantify, the 

stabilizing effects of the volume 

regulations impact both small and large 

handlers positively by helping them 

maintain markets even though tart 

cherry supplies fluctuate widely from 

season to season. 

In compliance with Office of 

Management and Budget (OMB) 

regulations (5 CFR part 1320) which 

implement the Paperwork Reduction 

Act of 1995 (Pub. L. 104–13), the 

information collection and 

recordkeeping requirements under the 

tart cherry marketing order have been 

previously approved by OMB and 

assigned OMB Number 0581–0177. 

Reporting and recordkeeping burdens 

are necessary for compliance purposes 

and for developing statistical data for 

maintenance of the program. The forms 

require information which is readily 

available from handler records and 

which can be provided without data 

processing equipment or trained 

statistical staff. As with other, similar 

marketing order programs, reports and 

forms are periodically studied to reduce 

or eliminate duplicate information 

collection burdens by industry and 

public sector agencies. This rule does 

not change those requirements. 

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. 

The Board’s meetings were widely 

publicized throughout the tart cherry 

industry and all interested persons were 

invited to attend the meeting and 

participate in Board deliberations on all 

issues. Like all Board meetings, 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 March 17, 2010 (75 FR 

12702). Copies of the rule were mailed 

or sent via facsimile to all Board 

members and alternates. Finally, the 

rule was made available through the 

Internet by USDA and the Office of the 

Federal Register. A 15-day comment 

period ending April 1, 2010, was 

provided to allow interested persons to 

respond to the proposal. 

Two comments were received during 

the comment period in response to the 

proposal. The commenters, both 

representing processors of canned tart 

cherry products, opposed the increased 

volume regulation from the preliminary 

percentages to the final percentages. 

Both commenters stated that the 

products they produce are not in 

oversupply and the volume regulation 

percentages at the increased level are 

burdensome to their companies’ 

operations. 

The first commenter stated that they 

utilize all of the diversion activities like: 

export activity, new products, donated 

products, grower diversion activity and 

putting product in the reserve. Since 

they package all of their products in 

steel cans at harvest the increase in the 

volume regulation forced them to 

purchase frozen products to put in the 

reserve to satisfy the increased reserve 

obligation. They do not market frozen 

cherries in any form. They also stated 

that the grower diversion certificates 

they had became less valuable because 

they are treated as production and the 

increased percentage is applied to those; 

and therefore they can only utilize 32 

percent of the orchard diverted pounds 

to satisfy regulation on the pounds 

processed for their sales. 

Finally, the first commenter stated 

that they will not support the renewal 

of the order as it is currently being 

implemented. The cost of regulation is 

limiting available funds to promote and 

increase utilization of their products. 

They believe this was not the intent of 

the marketing order. 

The second commenter stated that the 

frozen tart cherry handlers over the 

years have repeatedly encouraged over 

production by producers. The 

commenter reiterated that their products 

(canned cherries) are not in excess 

supply. Their company was shocked 

and totally unprepared for the increase 

in regulation to 68 percent. According to 

the commenter, this increased 

regulation will result in severe financial 

consequences, including job losses and 

a diminished level of investment in new 

products for the company. This 

commenter asked USDA to reconsider 

this level of regulation and asked for 

relief from this level of regulation even 

if it would only extend to the canned 

cherry segment of the industry. 

In response to the commenters, the 

tart cherry marketing order regulations 

do not apply to handlers according to 

the type of cherry products they pack. 

The order applies to the industry as a 

whole, regardless of which market 

segment individual handlers are 

involved in. The reserve formula under 

the order is designed to ensure that 

aggregate market needs can be met with 

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29652 Federal Register / Vol. 75, No. 102 / Thursday, May 27, 2010 / Rules and Regulations 

free percentage cherries and does not 

differentiate between product types. 

When the Board met in June 2009 and 

made its recommendation for 

preliminary free and reserve 

percentages, it utilized a crop estimate 

of 284 million pounds. It also computed 

a surplus of 131 million pounds, 

according to the order formula. The 

actual crop materialized at a much 

higher level (355 million pounds). The 

larger crop, combined with a higher 

carryin inventory than initially 

estimated and a lower optimum supply 

due to lower sales from previous years, 

resulted in a larger surplus than initially 

estimated. These changes resulted in a 

higher restricted percentage and a lower 

free percentage than initially 

recommended by the Board as 

preliminary percentages. However, the 

reserve formula under the order is 

designed to ensure that aggregate market 

needs can be met with free percentage 

cherries. The Board followed the 

formula prescribed in the order in 

making its recommendation concerning 

volume regulation. 

In addition, the marketing order does 

not dictate what types of products must 

be placed in the reserve or the products 

that can be used to satisfy a handler’s 

restricted obligation. Handlers can use 

whatever form of product that is 

available to them to meet their restricted 

obligation. This provision takes into 

account that handlers process different 

types of products. 

The Board is continuing to work with 

USDA to solve the oversupply situation 

and most recently made a 

recommendation to add another feature 

to their grower diversion program to 

remove more cherries from production 

to bring supply more in line with 

demand. The industry also has an active 

domestic promotion program designed 

to help increase the demand for tart 

cherries. 

The Board has also made a 

recommendation to make grower 

diversion certificates more valuable to 

the handler by making them not be 

counted as production. This 

recommendation is under consideration 

by the USDA. 

Accordingly, 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/ 

fv/moab.html. Any questions about the 

compliance guide should be sent to 

Antoinette Carter at the previously 

mentioned address in the FOR FURTHER

INFORMATION CONTACT section. 

After consideration of all relevant 

matter presented, including information 

and recommendation submitted by the 

Board 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) because handlers are already 

shipping tart cherries from the 2009– 

2010 crop. Further, handlers are aware 

of this rule, which was recommended at 

a public meeting. Also, a fifteen day 

comment period was provided for in the 

proposed rule. 

List of Subjects in 7 CFR Part 930 

Marketing agreements, Reporting and 

recordkeeping requirements, Tart 

cherries. 

■ For the reasons set forth in the 

preamble, 7 CFR part 930 is amended as 

follows: 

PART 930—TART CHERRIES GROWN 

IN THE STATES OF MICHIGAN, NEW 

YORK, PENNSYLVANIA, OREGON, 

UTAH, WASHINGTON, AND 

WISCONSIN 

■ 1. The authority citation for 7 CFR 

part 930 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. Section 930.256 is added to read as 

follows: 

Note: This section will not appear in 

the annual Code of Federal Regulations. 

§ 930.256 Final free and restricted 

percentages for the 2009–2010 crop year. 

The final percentages for tart cherries 

handled by handlers during the crop 

year beginning on July 1, 2009, which 

shall be free and restricted, respectively, 

are designated as follows: Free 

percentage, 32 percent and restricted 

percentage, 68 percent. 

Dated: May 21, 2010. 

David R. Shipman, 

Acting Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2010–12770 Filed 5–26–10; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 71 

[Docket No. FAA–2010–0028; Airspace 

Docket No. 10–AWP–1] 

Amendment of Area Navigation Route 

Q–15; California 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This action amends Area 

Navigation Route Q–15 by modifying a 

segment of the airway to provide 

adequate separation from restricted area 

R–2508 Complex, CA. This action is 

necessary for the safety and 

management of instrument flight rules 

(IFR) operations within the National 

Airspace System (NAS). 

DATES: Effective Date: 0901 UTC, July 

29, 2010. The Director of the Federal 

Register approves this incorporation by 

reference action under 1 CFR part 51, 

subject to the annual revision of FAA 

Order 7400.9 and publication of 

conforming amendments. 

FOR FURTHER INFORMATION CONTACT: Ken 

McElroy, Airspace and Rules Group, 

Office of System Operations Airspace 

and AIM, Federal Aviation 

Administration, 800 Independence 

Avenue, SW., Washington, DC 20591; 

telephone: (202) 267–8783. 

SUPPLEMENTARY INFORMATION: 

History 

On February 24, 2010, the FAA 

published in the Federal Register a 

notice of proposed rulemaking (NPRM) 

to amend Area Navigation Route Q–15 

in California (75 FR 8286). Interested 

parties were invited to participate in 

this rulemaking effort by submitting 

written comments on the proposal. No 

comments were received. With the 

exception for the order of the points 

listed, (Q–15 route has been reversed to 

comply with policy that odd numbered 

routes be described with the points 

listed from South to North,) this 

amendment is the same as that proposed 

in the NPRM. 

The Rule 

This action amends Title 14 Code of 

Federal Regulations (14 CFR) part 71 by 

replacing the DOBNE waypoint of Q–15 

with the KENNO waypoint to 

adequately provide the additional 

lateral separation from the boundary of 

R–2508 and Q–15. The operational 

benefits of this change will positively 

impact the day-to-day traffic flow on Q– 

15 within the NAS. 

WReier-Aviles on DSKGBLS3C1PROD with RULES