9000 Federal Register / Vol. 73, No. 33 / Tuesday, February 19, 2008 / Rules and Regulations 

an extension of time to file an appeal, 

which shall be received by the General 

Counsel not later than 5 days before the 

date the appeal is due. A Charging Party 

shall serve a copy of the request for an 

extension of time on the Regional 

Director. 

(e) Grounds for granting an appeal. 

The General Counsel may grant an 

appeal when the appeal establishes at 

least one of the following grounds: 

(1) The Regional Director’s decision 

did not consider material facts that 

would have resulted in issuance of a 

complaint; 

(2) The Regional Director’s decision is 

based on a finding of a material fact that 

is clearly erroneous; 

(3) The Regional Director’s decision is 

based on an incorrect statement or 

application of the applicable rule of law; 

(4) There is no Authority precedent 

on the legal issue in the case; or 

(5) The manner in which the Region 

conducted the investigation has resulted 

in prejudicial error. 

(f) General Counsel action. The 

General Counsel may deny the appeal of 

the Regional Director’s dismissal of the 

charge, or may grant the appeal and 

remand the case to the Regional Director 

to take further action. The General 

Counsel’s decision on the appeal states 

the grounds listed in paragraph (e) of 

this section for denying or granting the 

appeal, and is served on all the parties. 

Absent a timely motion for 

reconsideration, the decision of the 

General Counsel is final. 

(g) Reconsideration. After the General 

Counsel issues a final decision, the 

Charging Party may move for 

reconsideration of the final decision if it 

can establish extraordinary 

circumstances in its moving papers. The 

motion shall be filed within 10 days 

after the date on which the General 

Counsel’s final decision is postmarked. 

A motion for reconsideration shall state 

with particularity the extraordinary 

circumstances claimed and shall be 

supported by appropriate citations. The 

decision of the General Counsel on a 

motion for reconsideration is final. 

§ 2423.12 Settlement of unfair labor 

practice charges after a Regional Director 

determination to issue a complaint but prior 

to issuance of a complaint. 

(a) Alternative Dispute Resolution 

(ADR). After a merit determination to 

issue a complaint, the Regional Director 

will work with the parties to settle the 

dispute using ADR, to avoid costly and 

protracted litigation where possible. 

(b) Bilateral informal settlement 

agreement. Prior to issuing a complaint 

but after a merit determination by the 

Regional Director, the Regional Director 

may afford the Charging Party and the 

Charged Party a reasonable period of 

time to enter into an informal settlement 

agreement to be approved by the 

Regional Director. When a Charged 

Party complies with the terms of an 

informal settlement agreement approved 

by the Regional Director, no further 

action is taken in the case. If the 

Charged Party fails to perform its 

obligations under the approved informal 

settlement agreement, the Regional 

Director may institute further 

proceedings. 

(c) Unilateral informal settlement 

agreement. If the Charging Party elects 

not to become a party to a bilateral 

settlement agreement which the 

Regional Director concludes effectuates 

the policies of the Federal Service 

Labor-Management Relations Statute, 

the Regional Director may choose to 

approve a unilateral settlement between 

the General Counsel and the Charged 

Party. The Regional Director, on behalf 

of the General Counsel, shall issue a 

letter stating the grounds for approving 

the settlement agreement and declining 

to issue a complaint. The Charging Party 

may obtain review of the Regional 

Director’s action by filing an appeal 

with the General Counsel in accordance 

with § 2423.11(c) and (d). The General 

Counsel shall take action on the appeal 

as set forth in § 2423.11(e)–(g). 

§§ 2423.13–2423.19 [Reserved] 

Dated: February 13, 2008. 

Colleen Duffy Kiko, 

General Counsel, Federal Labor Relations 

Authority. 

[FR Doc. E8–3013 Filed 2–15–08; 8:45 am] 

BILLING CODE 6727–01–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 982 

[Docket No. AMS–FV–07–0150; FV08–982–

1 IFR] 

Hazelnuts Grown in Oregon and 

Washington; Establishment of Interim 

Final and Final Free and Restricted 

Percentages for the 2007–2008 

Marketing Year 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: This rule establishes interim 

final and final free and restricted 

percentages for domestic inshell 

hazelnuts for the 2007–2008 marketing 

year under the Federal marketing order 

for hazelnuts grown in Oregon and 

Washington. The interim final free and 

restricted percentages are 8.1863 and 

91.8137 percent, respectively, and the 

final free and restricted percentages are 

9.2671 and 90.7329 percent, 

respectively. The percentages allocate 

the quantity of domestically produced 

hazelnuts which may be marketed in the 

domestic inshell market (free) and the 

quantity of domestically produced 

hazelnuts that must be disposed of in 

outlets approved by the Board 

(restricted). Volume regulation is 

intended to stabilize the supply of 

domestic inshell hazelnuts to meet the 

limited domestic demand for such 

hazelnuts with the goal of providing 

producers with reasonable returns. This 

rule was recommended unanimously by 

the Hazelnut Marketing Board (Board), 

the agency responsible for local 

administration of the marketing order. 

DATES: Effective February 20, 2008. This 

interim final rule applies to all 2007–

2008 marketing year restricted hazelnuts 

until they are properly disposed of in 

accordance with marketing order 

requirements. Comments received by 

April 21, 2008 will be considered prior 

to issuance of a final rule. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments must be 

sent to the Docket Clerk, Marketing 

Order Administration Branch, Fruit and 

Vegetable Programs, 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 docket 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. 

FOR FURTHER INFORMATION CONTACT: 

Barry Broadbent or Gary Olson, 

Northwest Marketing Field Office, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1220 SW. Third Avenue, 

Suite 385, Portland, OR 97204; 

Telephone: (503) 326–2724, Fax: (503) 

326–7440, or E-mail: 

Barry.Broadbent@usda.gov or 

GaryD.Olson@usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Jay Guerber, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA, 1400 Independence 

Avenue, SW., STOP 0237, Washington, 

DC 20250–0237; Telephone: (202) 720–


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

Jay.Guerber@usda.gov. 

SUPPLEMENTARY INFORMATION: This rule 

is issued under Marketing Agreement 

No. 115 and Marketing Order No. 982, 

both as amended (7 CFR Part 982), 

regulating the handling of hazelnuts 

grown in Oregon and Washington, 

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 rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. It is intended that this action 

apply to all merchantable hazelnuts 

handled during the 2007–2008 

marketing year beginning July 1, 2007. 

This action applies to all 2007–2008 

marketing year restricted hazelnuts until 

they are properly disposed of in 

accordance with marketing order 

requirements. This rule will not 

preempt any State or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

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 rule establishes free and 

restricted percentages which allocate 

the quantity of domestically produced 

hazelnuts that may be marketed in 

domestic inshell markets (free) and 

hazelnuts that must be exported, 

shelled, or otherwise disposed of by 

handlers (restricted). The Board met 

and, after determining that volume 

regulation would tend to effectuate the 

declared policy of the Act, developed a 

marketing policy to be employed for the 

duration of the 2007–2008 marketing 

year. 

Volume regulation is intended to 

stabilize the supply of domestic inshell 

hazelnuts to meet the limited domestic 

demand for such hazelnuts, with the 

goal of providing producers with 

reasonable returns. Based on an estimate 

of the domestic inshell trade demand 

and total supply of domestically 

produced hazelnuts available for the 

2007–2008 marketing year, the Board 

voted unanimously at their November 

15, 2007, meeting to recommend to 

USDA that the interim final free and 

restricted percentages for the 2007–2008 

marketing year be established at 8.1863 

percent and 91.8137 percent, 

respectively. Additionally, the Board 

unanimously voted to set the final free 

and restricted percentages, effective 

May 1, 2008, at 9.2671 and 90.7329 

percent, respectively. 

The Board’s authority to recommend 

volume regulation and use 

computations to determine the 

allocation of hazelnuts to individual 

markets is specified in § 982.40 of the 

order. Under the order’s provisions, free 

and restricted market allocations of 

hazelnuts are expressed as percentages 

of the total hazelnut supply subject to 

regulation. The percentages are derived 

by dividing the estimated domestic 

inshell trade demand (computed by 

formula) by the Board’s estimate of the 

total domestically produced supply of 

hazelnuts that are expected to be 

available over the course of the 

marketing year. 

Inshell trade demand, the key 

component of the marketing policy, is 

the estimated quantity of inshell 

hazelnuts necessary to adequately 

supply the domestic inshell hazelnut 

market for the duration of the marketing 

year. The Board determines the 

domestic inshell trade demand for each 

year and uses that estimate as the basis 

for setting the percentage of the 

available supply of domestically 

produced hazelnuts that handlers may 

ship to the domestic inshell market 

throughout the marketing season. The 

order specifies that inshell trade 

demand be computed by averaging the 

preceding three years’ trade acquisitions 

of inshell hazelnuts, allowing 

adjustments for abnormal crop or 

marketing conditions. In addition, the 

Board may increase the computed 

inshell trade demand by up to 25 

percent, if market conditions warrant an 

increase. 

As required by the order, prior to 

September 20 of each marketing year, 

the Board meets to establish its 

marketing policy for that year. If the 

Board determines that volume control 

would tend to effectuate the declared 

policy of the Act, the Board then follows 

a procedure, specified by the order, to 

compute and announce preliminary free 

and restricted percentages. The 

preliminary free percentage releases 80 

percent of the adjusted inshell trade 

demand that handlers may ship to the 

domestic market. The purpose of 

releasing only 80 percent of the inshell 

trade demand under the preliminary 

stage of regulation is to guard against 

any potential underestimate of crop 

size. The preliminary free percentage is 

expressed as a percentage of the total 

hazelnut supply subject to regulation, 

where total supply is the sum of the 

estimated crop production less the 

three-year average disappearance plus 

the undeclared carry-in from the 

previous marketing year. 

On August 21, 2007, the National 

Agricultural Statistics Service (NASS) 

released an estimate of 2007 hazelnut 

production for the Oregon and 

Washington area at 33,000 dry orchardrun tons. NASS uses an objective yield 

survey method to estimate hazelnut 

production which has historically been 

very accurate. 

On August 23, 2007, the Board met for 

the purpose of (1) determining if volume 

control regulation would tend to 

effectuate the declared policy of the Act; 

(2) estimating the total available supply 

and the domestic inshell trade demand 

for hazelnuts; (3) establishing 

preliminary free and restricted 

marketing percentages for the 2007–

2008 marketing year; and (4) authorizing 

market outlets for restricted hazelnuts. 

After discussion, the Board 

unanimously determined that volume 

regulation would be necessary to 

effectively market the industry’s 2007 

crop and would tend to effectuate the 

declared policy of the Act. The 

determination was based on (1) the size 

of the 2007 hazelnut crop; (2) the 

inability of the domestic inshell market 

to absorb such a large crop; (3) the 

projected large size of the world 

hazelnut crop and the probability of an 

oversupplied world market; and (4) the 

average price paid to OregonWashington growers has not exceeded 

the parity price in any one of the past 

18 years. 

The Board then estimated the total 

available supply for the 2007 crop year 

to be 33,603 tons. The Board arrived at 

that quantity by using the crop estimate 

compiled by NASS (33,000 tons) and 

then adjusting that estimate to account 

for disappearance and carry-in. The 

order requires the Board to reduce the 

crop estimate by the average 

disappearance over the preceding three 

years (1,426 tons) and to increase it by 

the amount of undeclared carry-in from 

previous years’ production (2,029 tons). 


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In the calculation, disappearance is 

defined as the difference between the 

estimated orchard-run production and 

the actual supply of merchantable 

product available for sale by handlers. 

Disappearance can consist of (1) 

unharvested hazelnuts; (2) culled 

product (nuts that are delivered to 

handlers but later discarded); (3) 

product used on the farm, sold locally, 

or otherwise disposed of by producers; 

and (4) statistical error in the orchardrun production estimate. 

Undeclared carry-in is defined as 

hazelnuts that were produced in a 

previous marketing year but were not 

subject to regulation because they were 

not shipped during that marketing year. 

Undeclared carry-in is subject to 

regulation during the current marketing 

year and is accounted for as such by the 

Board. 

Additionally, the Board estimated 

domestic inshell trade demand for the 

2007–2008 marketing year to be 2,478 

tons. The Board arrived at this estimate 

by taking the average of the domestic 

inshell trade acquisitions for the 2003/ 

2004, 2004/2005, and the 2006/2007 

marketing years (2,649 tons), increasing 

that amount by 5 percent (133 tons) to 

encourage sales (as allowed by the 

order), and then reducing that quantity 

by the declared carry-in from last year’s 

crop (304 tons). The trade acquisition 

data for the 2005–2006 marketing year 

was omitted from the Board’s 

calculations, as allowed by the order, 

after it was determined to be abnormal 

due to crop and marketing conditions. 

The Board is also allowed to increase 

the average domestic inshell trade 

acquisitions in their calculation by up to 

25 percent, if market conditions justify 

such an increase. At this stage in the 

establishment of the marketing policy, 

the Board voted unanimously that a 5 

percent increase would be sufficient to 

encourage new sales without risking 

oversupply of the market. 

The declared carry-in represents 

product regulated under the order 

during a preceding marketing year but 

not shipped during that year. This 

inventory must be accounted for when 

estimating the quantity of product to 

make available to adequately supply the 

market. 

After establishing estimates for total 

available hazelnut supply and domestic 

inshell trade demand, the Board used 

those estimates to compute and 

announce preliminary free and 

restricted percentages of 5.8983 percent 

and 94.1017 percent, respectively. The 

Board computed the preliminary free 

percentage by multiplying the adjusted 

inshell trade demand by 80 percent and 

dividing the result by the estimate of the 

total available supply subject to 

regulation (2,478 tons × 80 percent/ 

33,603 tons = 5.8983 percent). The 

preliminary free percentage initially 

released 1,982 tons of hazelnuts from 

the 2007–2008 supply for domestic 

inshell use. The Board authorized the 

preliminary restricted percentage 

(31,621 tons) to be exported or shelled 

for the domestic kernel markets. 

Under the order, the Board must meet 

again on or before November 15 to 

review and revise the preliminary 

estimate of the total available supply of 

hazelnuts and to recommend interim 

final and final free and restricted 

percentages. As indicated earlier, when 

establishing preliminary free and 

restricted percentages, the Board utilizes 

a pre-harvest objective yield survey, 

compiled by NASS on behalf of the 

Board, to estimate the upcoming crop 

size. After the hazelnut harvest has 

concluded, usually sometime in 

October, information is available 

directly from handlers to more 

accurately estimate crop size. The Board 

may use this information to amend their 

preliminary estimate of total available 

supply before calculating the interim 

final and final percentages. At this 

meeting, the Board may also amend the 

percentage increase included in the 

computation of inshell trade demand to 

encourage increased sales. 

Interim final percentages are 

calculated in the same way as the 

preliminary percentages but release 100 

percent of the inshell trade demand, 

effectively releasing the additional 20 

percent held back at the preliminary 

stage. Final free and restricted 

percentages may release up to an 

additional 15 percent of the average 

trade acquisitions of inshell hazelnuts 

for desirable carryout, to provide an 

adequate carryover of product into the 

following season. The order requires 

that final free and restricted percentages 

be effective 30 days prior to the end of 

the marketing year, or earlier, if 

recommended by the Board and 

approved by USDA. The Board is 

allowed to combine the interim final 

and the final stages of the marketing 

policy, if marketing conditions so 

warrant, by recommending final 

percentages which immediately release 

100 percent of the inshell trade demand 

(the preliminary percentage plus the 

additional 20 held back) plus any 

percentage increase the Board 

determines for desirable carryout. 

Revisions in the marketing policy can be 

made until February 15 of each 

marketing year, but the inshell trade 

demand can only be revised upward, 

consistent with § 982.40(e). 

The Board met, as required by the 

order, on November 15, 2007, to review 

and approve an amended marketing 

policy and to recommend the 

establishment of interim final and final 

free and restricted percentages. At that 

time, the Board revised the crop 

estimate in the marketing policy to 

36,270 tons (from 33,000 tons) after 

considering the results of post-harvest 

handler survey information compiled by 

the Board. The Board also revised the 

percentage increase meant to encourage 

sales that is included in the inshell 

trade demand computation from 5 

percent to 25 percent, effectively 

allocating another 529 tons of inshell 

hazelnuts that may be marketed in the 

domestic market. 

Using the revised crop estimate and 

the increased inshell trade demand, the 

Board then computed interim final free 

and restricted percentages. The 

percentages release the remaining 20 

percent of the estimated inshell trade 

demand that was withheld during the 

preliminary stage of the marketing 

policy, as well as take into account the 

amendments made by the Board to the 

marketing policy computations (revising 

the total supply estimate and increasing 

the inshell trade demand). The interim 

final free and restricted percentages 

were therefore set at 8.1863 and 91.8137 

percent, respectively. The interim final 

free percentage immediately releases a 

total 3007 tons of inshell hazelnuts from 

the 2007–2008 supply that may be 

marketed in domestic markets. 

During the meeting, the Board 

decided that market conditions were 

such that the industry would benefit 

from the release of an additional 15 

percent of the three year average trade 

acquisitions to allow for desirable 

carryout and that the increase would not 

adversely affect the 2007–2008 domestic 

inshell market. The final free and 

restricted percentages were set at 9.2671 

and 90.7329 percent, respectively. The 

final percentages are to become effective 

May 1, 2008. The final free percentage 

releases 3,404 tons of inshell hazelnuts 

from the 2007–2008 supply for domestic 

use, which includes 397 tons released 

late in the marketing year for desirable 

carryout. 

The final marketing percentages are 

based on the Board’s final production 

estimate and the following supply and 

demand information for the 2007–2008 

marketing year: 


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Tons 

Total Available Supply 

(1) Production forecast (11/15/07 crop estimate) ................................................................................................................................ 36,270 

(2) Minus: Disappearance (three year average—4.32 percent of Item 1) .......................................................................................... -1,567 

(3) Merchantable production (Item 1 minus Item 2) ............................................................................................................................ 34,703 

(4) Plus: Undeclared carry-in as of July 1, 2007 (subject to 2007–2008 regulation) ......................................................................... + 2,029 

(5) Available supply subject to regulation (Item 3 plus Item 4) .......................................................................................................... 36,732 

Inshell Trade Demand 

(6) Average trade acquisition (ATA) of inshell hazelnuts (three prior years domestic sales) ............................................................ 2,649 

(7) Plus: Increase to encourage increased sales (25% of average trade acquisitions) ..................................................................... + 662 

(8) Minus: Declared carry-in as of July 1, 2007 (not subject to 2007–2008 regulation) .................................................................... -304 

(9) Adjusted inshell trade demand (Item 6 plus Item 7 minus Item 8) ............................................................................................... 3,007 

Percentages Free Restricted 

(10) Interim final percentages (Item 9 divided by Item 5) × 100 ............................................................................ 8.1863 91.8137 

(11) Interim final free tonnage (Item 9) ................................................................................................................... 3,007 ........................

(12) Interim final restricted in tons (Item 5 minus Item 9) ....................................................................................... ........................ 33,725 

(13) Final percentages (Item 14 divided by Item 5) × 100 ..................................................................................... 9.2671 90.7329 

(14) Final free tonnage (Interim final free tonnage (Item 11) plus 15% of ATA (397)) .......................................... 3,404 ........................

(15) Final restricted tonnage (Item 5 minus Item 11) ............................................................................................. ........................ 33,328 

In addition to complying with the 

provisions of the order, the Board also 

considered USDA’s 1982 ‘‘Guidelines 

for Fruit, Vegetable, and Specialty Crop 

Marketing Orders’’ (Guidelines) when 

making its computations in the 

marketing policy. This volume control 

regulation provides a method to 

collectively limit the supply of inshell 

hazelnuts available for sale in domestic 

markets. The Guidelines provide that 

the domestic inshell market has 

available a quantity equal to 110 percent 

of prior years’ shipments before 

allocating supplies for the export 

inshell, export kernel, and domestic 

kernel markets. This provides for a 

plentiful supply of inshell hazelnuts for 

consumers and for market expansion, 

while retaining the mechanism for 

dealing with oversupply situations. The 

established final percentages make 

available approximately 755 additional 

tons to encourage increased sales. The 

total free supply for the 2007–2008 

marketing year is estimated to be 3,404 

tons of hazelnuts, which is 137 percent 

of the average of the last three prior 

years’ sales (2,478 tons) and exceeds the 

goal of the Guidelines. 

Initial 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 

initial 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 the 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. 

Small agricultural producers are 

defined by the Small Business 

Administration (13 CFR 121.201) as 

those having annual receipts of less than 

$750,000, and small agricultural service 

firms are defined as those having annual 

receipts of less than $6,500,000. There 

are approximately 650 producers of 

hazelnuts in the production area and 

approximately 19 handlers subject to 

regulation under the order. Using 

statistics compiled by NASS, the 

average value of production received by 

producers in 2004–2006 was 

$54,088,000. Using those estimates, the 

average annual hazelnut revenue per 

producer would be approximately 

$77,300. The level of sales of other 

crops by hazelnut producers is not 

known. In addition, based on records 

maintained by the Board, approximately 

83 percent of the handlers ship under 

$6,500,000 worth of hazelnuts on an 

annual basis. In view of the foregoing, 

it can be concluded that the majority of 

hazelnut producers and handlers may 

be classified as small entities. 

Board meetings are widely publicized 

in advance of the meetings and are held 

in a location central to the production 

area. The meetings are open to all 

industry members and other interested 

persons who are encouraged to 

participate in the deliberations and 

voice their opinions on topics under 

discussion. Thus, Board 

recommendations can be considered to 

represent the interests of small business 

entities in the industry. 

Currently, U.S. hazelnut production is 

allocated among three main market 

outlets: domestic inshell, export inshell, 

and kernel markets. Handlers and 

growers receive the highest return for 

sales in the domestic inshell market. 

They receive less for product going to 

export inshell, and the least for kernels. 

Based on Board records of average 

shipments for 1997–2006, the 

percentage going to each of these 

markets was 10 percent (domestic 

inshell), 53 percent (export inshell), and 

36 percent (kernels). Other minor 

market outlets make up the remaining 1 

percent. 

The inshell hazelnut market can be 

characterized as having limited and 

inelastic demand with a very short 

primary marketing period. On average, 

80 percent of domestic inshell hazelnut 

shipments occur between October 1 and 

November 30, primarily to supply 

holiday nut demand. The inshell market 

is, therefore, prone to oversupply and 

correspondingly low grower prices in 

the absence of supply restrictions. This 

volume control regulation provides a 

method for the U.S. hazelnut industry to 

limit the supply of domestic inshell 

hazelnuts available for sale in the 

continental U.S. and thereby mitigate 

market oversupply conditions. 

Many years of marketing experience 

led to the development of the current 

volume control procedures. These 

procedures have helped the industry 

solve its marketing problems by keeping 

inshell supplies in balance with 

domestic needs. Volume controls ensure 

that the domestic inshell market is fully 


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9004 Federal Register / Vol. 73, No. 33 / Tuesday, February 19, 2008 / Rules and Regulations 

supplied while protecting the market 

from the negative effects of oversupply. 

Although the domestic inshell market 

is a relatively small portion of total 

hazelnut sales (averaging 10 percent of 

total shipments for 1997–2006), it 

remains a profitable market segment. 

The volume control provisions of the 

order are designed to avoid 

oversupplying this particular market 

segment, because that would likely lead 

to substantially lower grower prices. 

The other market segments, export 

inshell and kernels, are expected to 

continue to provide good outlets for 

U.S. hazelnut production into the 

future. 

Adverse climatic conditions that 

negatively impacted hazelnut 

production in the other hazelnut 

producing regions of the world in 2004 

and 2005 have corrected and the total 

world supply in 2007–2008 is predicted 

to be near the historically high levels 

seen in 2006. Product prices in the 

world market have trended downward 

in the expectation of the large available 

supply. While the U.S. hazelnut 

industry continues to experience high 

demand for their large sized and high 

quality product, the prices that 

producers receive are tied to the global 

market. In light of the anticipated world 

supply situation, regulation of the 

domestic inshell market is important to 

the U.S. hazelnut industry to insulate 

that specialty market from the supply 

related challenges of the global hazelnut 

market. 

In Oregon and Washington, lower 

hazelnut production years typically 

follow higher production years (a 

historically consistent cyclical pattern), 

and such was the case in 2007. The 

2006 crop of 43,000 tons was 20 percent 

above the 10-year average (34,000 tons 

for 1997–2006) for hazelnut production. 

The 2007 crop (36,720 tons, according 

to the survey of handlers conducted by 

the Board) is estimated to be 16 percent 

below the previous year. Using the 

NASS estimate of 33,000 tons, the crop 

is 23 percent lower. It is predicted that 

the 2008 crop will follow the recent 

production pattern and will be larger 

than the current crop year. This cyclical 

trait also leads to an inversely 

corresponding cyclical price pattern for 

hazelnuts. The intrinsic cyclical nature 

of the hazelnut industry lends 

credibility to the volume control 

measures enacted by the Board under 

the marketing order. 

Recent production and price data 

reflect the stabilizing effect of volume 

control regulations. Industry statistics 

show that total hazelnut production has 

varied widely over the 10-year period 

between 1997 and 2006, from a low of 

15,500 tons in 1998 to a high of 49,500 

tons in 2001. Production in the smallest 

crop year and the largest crop year were 

48 percent and 145 percent, 

respectively, of the 10-year average of 

34,000 tons. Grower price, however, has 

not fluctuated to the extent of 

production. Prices in the lowest price 

year and the highest price year were 63 

percent and 200 percent, respectively, of 

the 10-year average price of $1,114 per 

ton. If the extraordinarily high price for 

the 2005 crop year is excluded as an 

aberration that stems from a global 

production crisis, the percentage 

variation in price drops to 70 percent 

and 145 percent of a $988 per ton 

average price, respectively. 

The lower level of variability of price 

versus the variability of production 

provides an illustration of the order’s 

price-stabilizing impact. The coefficient 

of variation (a standard statistical 

measure of variability; ‘‘CV’’) for 

hazelnut production over the 10-year 

period is 0.33. In contrast, the 

coefficient of variation for hazelnut 

grower prices, excluding the 2005 price, 

is only 0.20, dramatically lower than the 

CV for production. The lower level of 

variability of price versus the variability 

of production provides an illustration of 

the order’s price-stabilizing impact. 

Comparing grower revenue to cost is 

useful in highlighting the impact on 

growers of recent product and price 

levels. A recent hazelnut production 

cost study from Oregon State University 

estimated cost-of-production per acre to 

be approximately $1,340 for a typical 

100-acre hazelnut enterprise. Average 

grower revenue per bearing acre (based 

on NASS acreage and value of 

production data) equaled or exceeded 

that typical cost level only four times 

from 1997 to 2006. Average grower 

revenue was below typical costs in the 

other years. Without the stabilizing 

influence of the order, growers may 

have lost more money. While crop size 

has fluctuated, volume regulations 

contribute to orderly marketing and 

market stability by moderating the 

variation in returns for all producers 

and handlers, both large and small. 

While the level of benefits of this 

rulemaking is difficult to quantify, the 

stabilizing effects of volume regulation 

impact both small and large handlers 

positively by helping them maintain 

and expand markets even though 

hazelnut supplies fluctuate widely from 

season to season. This regulation 

provides equitable allotment of the most 

profitable market, the domestic inshell 

market. That market is available to all 

handlers, regardless of size. 

As an alternative to this regulation, 

the Board discussed not regulating the 

marketing of the 2007 hazelnut crop. 

However, without any regulation in 

effect, the Board believes that the 

industry would tend to oversupply the 

inshell domestic market. The 2007 

hazelnut crop is smaller than last year’s 

crop but is still 7 percent above the tenyear average. The unregulated release of 

36,732 tons on the domestic inshell 

market could easily oversupply the 

small, but lucrative domestic inshell 

market. The Board believes that any 

oversupply would completely disrupt 

the market, causing producer returns to 

decrease dramatically. 

Section 982.40 of the order establishes 

a procedure and computations for the 

Board to follow in recommending to 

USDA establishment of preliminary, 

interim final, and final percentages of 

hazelnuts to be released to the free and 

restricted markets each marketing year. 

The program results in a plentiful 

supply of hazelnuts for consumers and 

for market expansion while retaining 

the mechanism for dealing with 

oversupply situations. 

Hazelnuts produced under the order 

comprise virtually all of the hazelnuts 

produced in the U.S. This production 

represents, on average, less than 3 

percent of total U.S. production of all 

tree nuts, and less than 5 percent of the 

world’s hazelnut production. 

Last season, 73 percent of the 

domestically produced hazelnut kernels 

were marketed in the domestic market 

and 27 percent were exported. 

Domestically produced kernels 

generally command a higher price in the 

domestic market than imported kernels. 

The industry is continuing its efforts to 

develop and expand other markets with 

emphasis on the domestic kernel 

market. Small business entities, both 

producers and handlers, benefit from 

the expansion efforts resulting from this 

program. 

Inshell hazelnuts produced under the 

order compete well in export markets 

because of their high quality. Based on 

Board statistics, Europe has historically 

been the primary export market for U.S. 

produced inshell hazelnuts. Shipments 

have also been relatively consistent, not 

varying much from the 10-year average 

of 4,906 tons. Recent years, though, 

have seen a significant increase in 

export destinations. Last season, inshell 

shipments to Europe totaled 4,401 tons, 

representing just 16 percent of exports, 

with the largest share going to Germany. 

Inshell shipments to Southwest Pacific 

countries, Hong Kong in particular, have 

increased dramatically in the past few 

years, rising to 79 percent of total 

inshell exports of 27,259 tons for the 

2006–2007 marketing year. The industry 


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Federal Register / Vol. 73, No. 33 / Tuesday, February 19, 2008 / Rules and Regulations 9005 

continues to pursue export 

opportunities. 

There are some reporting, 

recordkeeping, and other compliance 

requirements under the order. The 

reporting and recordkeeping burdens 

are necessary for compliance purposes 

and for developing statistical data for 

maintenance of the program. The 

information collection requirements 

have been previously approved by the 

Office of Management and Budget under 

OMB No. 0581–0178, Vegetable and 

Specialty Crops. 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 all Federal marketing order 

programs, reports and forms are 

periodically reviewed to reduce 

information requirements and 

duplication by industry and public 

sector agencies. This rule does not 

change those requirements. 

The 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, USDA has not identified 

any relevant Federal rules that 

duplicate, overlap, or conflict with this 

rule. 

Further, the Board’s meetings were 

widely publicized throughout the 

hazelnut industry and all interested 

persons were invited to attend the 

meetings and participate in Board 

deliberations. Like all Board meetings, 

those held on August 23, 2007, and 

November 15, 2007, were public 

meetings and all entities, both large and 

small, were able to express their views 

on this issue. Finally, interested persons 

are invited to submit information on 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/ 

fv/moab.html. Any questions about the 

compliance guide should be sent to Jay 

Guerber at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

This rule invites comments on the 

establishment of interim final and final 

free and restricted percentages for the 

2007–2008 marketing year under the 

hazelnut marketing order. Any 

comments received will be considered 

prior to finalization of this rule. 

After consideration of all relevant 

material presented, including the 

Board’s recommendation, and other 

information, it is found that this interim 

final rule, as hereinafter set forth, will 

tend to effectuate the declared policy of 

the Act. 

Pursuant to 5 U.S.C. 553, it is also 

found and determined upon good cause 

that it is impracticable, unnecessary, 

and contrary to the public interest to 

give preliminary notice prior to putting 

this rule into effect and that good cause 

exists for not postponing the effective 

date of this action until 30 days after 

publication in the Federal Register 

because: (1) The 2007–2008 marketing 

year began July 1, 2007, and the 

percentages established herein apply to 

all merchantable hazelnuts handled 

from the beginning of the crop year; (2) 

the percentages make the full trade 

demand available so handlers can take 

advantage of inshell marketing 

opportunities; (3) handlers are aware of 

this rule, which was recommended at an 

open Board meeting, and need no 

additional time to comply with this 

rule; and (4) interested persons are 

provided a 60-day comment period in 

which to respond, and all comments 

timely received will be considered prior 

to finalization of this action. 

List of Subjects in 7 CFR Part 982 

Filberts, Hazelnuts, Marketing 

agreements, Nuts, Reporting and 

recordkeeping requirements. 

■ For the reasons set forth in the 

preamble, 7 CFR Part 982 is amended as 

follows: 

PART 982—HAZELNUTS GROWN IN 

OREGON AND WASHINGTON 

■ 1. The authority citation for 7 CFR 

Part 982 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. A new section 982.255 is added to 

read as follows: 

§ 982.255 Free and restricted 

percentages—2007–2008 marketing year. 

(a) The interim final free and 

restricted percentages for merchantable 

hazelnuts for the 2007–2008 marketing 

year shall be 8.1863 and 91.8137 

percent, respectively. 

(b) On May 1, 2008, the final free and 

restricted percentages for merchantable 

hazelnuts for the 2007–2008 marketing 

year shall be 9.2671 and 90.7329 

percent, respectively. 

Dated: February 12, 2008. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 08–739 Filed 2–15–08; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 989 

[Docket No. AMS–FV–07–0130; FV08–989–

1 IFR] 

Raisins Produced from Grapes Grown 

in California; Final Free and Reserve 

Percentages for 2007–08 Crop Natural 

(sun-dried) Seedless Raisins 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Interim final rule with request 

for comments. 

SUMMARY: This rule establishes final 

volume regulation percentages for 2007–

08 crop Natural (sun-dried) Seedless 

(NS) raisins covered under the Federal 

marketing order for California raisins 

(order). The order regulates the handling 

of raisins produced from grapes grown 

in California and is locally administered 

by the Raisin Administrative Committee 

(Committee). The volume regulation 

percentages are 85 percent free and 15 

percent reserve. The percentages are 

intended to help stabilize raisin 

supplies and prices, and strengthen 

market conditions. 

DATES: Effective February 20, 2008. The 

volume regulation percentages apply to 

acquisitions of NS raisins from the 

2007–08 crop until the reserve raisins 

from that crop are disposed of under the 

marketing order. Comments received by 

April 21, 2008, will be considered prior 

to issuance of a final rule. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this rule. Comments must be 

sent to the Docket Clerk, Marketing 

Order Administration Branch, Fruit and 

Vegetable Programs, 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 docket 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. 

FOR FURTHER INFORMATION CONTACT: Rose 

M. Aguayo, Marketing Specialist, or 

Kurt J. Kimmel, Regional Manager, 

California Marketing Field Office, 

Marketing Order Administration 

Branch, Fruit and Vegetable Programs, 

AMS, USDA; Telephone: (559) 487–

5901; Fax: (559) 487–5906; or E-mail: 

Rose.Aguayo@usda.gov or 

Kurt.Kimmel@usda.gov. 


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