[Federal Register Volume 79, Number 205 (Thursday, October 23, 2014)]
[Rules and Regulations]
[Pages 63293-63295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-25193]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 79, No. 205 / Thursday, October 23, 2014 / 
Rules and Regulations

[[Page 63293]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 51

[Doc. Number AMS-FV-12-0013]


Onions Other Than Bermuda-Granex-Grano/Creole; Bermuda-Granex-
Grano

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule revises the U.S. Standards for Grades of Onions 
(Other Than Bermuda-Granex-Grano (BGG) and Creole Type) and the U.S. 
Standards for Grades of BGG Type Onions which were issued under the 
Agricultural Marketing Act of 1946. The Agricultural Marketing Service 
(AMS) is amending the ``similar varietal characteristic'' and ``one 
type'' requirements to allow mixed colors of onions when designated as 
a mixed or specialty pack. This revision will update the standards to 
more accurately represent today's marketing practices and to provide 
the industry with greater flexibility.

DATES: Effective November 24, 2014.

FOR FURTHER INFORMATION CONTACT: Dave Horner, Standardization Branch, 
Specialty Crops Inspection (SCI) Division, (540) 361-1128 or 1150. The 
current U.S. Standards for Grades of Onions (Other Than BGG and Creole 
Type) and the U.S. Standards for Grades of BGG Type Onions are 
available on the SCI Division Web site at www.ams.usda.gov/scihome.

SUPPLEMENTARY INFORMATION: The changes in these two sets of standards 
will permit specified packs of mixed colors of onions to be certified 
to a U.S. grade. The revisions apply to the U.S. standards for grades 
for two categories of onions: (1) Other Than BGG and Creole Type and 
(2) BGG Type. Also, these revisions affect the grade requirements under 
two marketing orders, 7 CFR parts 958 and 959, issued under the 
Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 601-674) and 
applicable imports.

Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules and promoting flexibility. 
This rule has been determined not significant for purposes of Executive 
Order 12866 and, therefore, has not been reviewed by the Office of 
Management and Budget.

Executive Order 13175

    This action has been reviewed in accordance with the requirements 
of Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments. The review reveals that this regulation would not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. It is not intended to have retroactive effect. There 
are no administrative procedures which must be exhausted prior to any 
judicial challenge to the provisions of this rule.

Regulatory Flexibility Act and Paperwork Reduction Act

    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the 
economic impact of these revisions on small entities. The purpose of 
the RFA is to fit regulatory actions to the scale of businesses subject 
to such actions so that small businesses will not be unduly or 
disproportionately burdened. Accordingly, AMS has prepared this final 
regulatory flexibility analysis.
    Each of the standards, except the section in the Other Than BGG and 
Creole Type Standards that affects the U.S. No. 2 grade, currently 
states that one of the requirements to be certified in a grade is that 
the onion pack contains ``similar varietal characteristics.'' The 
wording will be changed to: ``Similar varietal characteristics, except 
color when designated as a specialty or mixed pack.'' In the U.S. No. 2 
grade for the Other Than BGG and Creole Type Standards, the wording 
will be changed to ``One type, except when designated as a specialty or 
mixed pack.'' The additional wording will permit onions of different 
colors in the same pack as long as the pack is appropriately designated 
as a ``specialty or mixed pack.'' Allowing the commingling of mixed 
colors in an onion pack, when designated, will facilitate the marketing 
of onions by providing the industry with more flexibility that reflects 
current industry practices, thereby encouraging additional commerce.
    A farm-level estimate of the size of the U.S. onion industry can be 
obtained from National Agricultural Statistics Service (NASS) data. 
Averaging NASS onion production for the most recent three years of data 
available (2010-2012) yields a U.S. production estimate of 73.3 million 
hundredweight (cwt), of which about 9.6 million cwt (13 percent) are 
onions for processing. Subtracting 9.6 million for processing from the 
total 73.3 million cwt yields an estimate of 63.7 million cwt sold for 
the fresh market. The total 3-year average onion crop value is $912 
million, and the value of onions for processing is $81.5 million. The 
difference is a computed estimate of $830.5 million for the crop value 
sold into the fresh market. Average onion acreage for the period 2010-
2012 is 143,383. Dividing total crop value by acreage yields a 3-year 
average grower revenue per acre estimate of about $5,800.
    An estimate of the total number of onion farms from the 2007 
Agricultural Census (the most recent data available on farm numbers) is 
4,074. An onion farm is defined by the Census as a farm from which 50 
percent or more of the value of agricultural sales are from onions. The 
Small Business Administration (SBA) threshold for a large business in 
farming is $750,000 in annual sales. With average revenue per acre of 
$5,800, 129 acres of onions would generate approximately $750,000

[[Page 63294]]

in crop value. Census data shows that 3,679 out of a total of 4,074 
farms (90 percent) are less than 100 acres. Most onion farms would 
therefore be considered small businesses under the SBA definition, in 
terms of onion sales only (not including sales of other crops). There 
is no published data with which to make comparable estimates of the 
number of packers or shippers of onions. However, we estimate that at 
least some would be considered small entities under applicable SBA 
criteria.
    With regard to the marketing orders, there are approximately 30 
Idaho and Eastern Oregon onion handlers and approximately 30 South 
Texas onion handlers subject to regulation under marketing orders 958 
and 959, respectively. Under both marketing orders, the majority of 
these handlers would be considered small businesses under the SBA 
criteria. In addition to these domestic handlers, in 2013, there were 
approximately 460 onion importers subject to import regulations.
    About 80 percent of the value of production for U.S. onions comes 
from seven states. In declining order of magnitude, with three year 
average market shares ranging from 19 to 7 percent, those states are: 
California, Washington, Oregon, Georgia, Texas, Nevada, and New Mexico. 
The remaining five states for which NASS reports annual onion 
production are Idaho, New York, Colorado, Michigan, and Wisconsin, 
whose combined crop value is 20 percent of total U.S. onion crop value.
    In considering alternatives to this rule, benefits of the changes 
substantially outweigh the costs. The only additional cost borne by 
packers/shippers, which is expected to be minimal, is when ``specialty 
or mixed packs'' are designated by means of labeling. There are no 
other additional costs to packers/shippers or growers from this change, 
and smaller entities would not bear a disproportionate cost. The change 
in the standards reflects a shift in onion packing/shipping practices 
that is already underway. The additional flexibility in the revised 
standards will facilitate additional onion sales, to the benefit of 
growers, packers, and consumers.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35), this rule would not result in a change to the information 
collection and recordkeeping requirements previously approved and would 
impose no additional reporting and recordkeeping burden on domestic 
producers, first handlers, and importers of onions.
    USDA has not identified any relevant Federal rules that duplicate, 
overlap, or conflict with this rule. However, there are marketing 
programs that regulate the handling of onions under 7 CFR parts 958 and 
959. Onions under a marketing order have to meet certain requirements 
set forth in the grade standards. In addition, onions are subject to 
section 8e import requirements under the Agricultural Marketing Act of 
1937, as amended (7 U.S.C. 601-674) which requires imported onions to 
meet grade, size and quality under the applicable marketing order (7 
CFR part 980).

Background

    The industry is packing mixed colors of onions, primarily in Idaho, 
Oregon, Washington, and Texas. In addition, marketing order 958 for 
Idaho and Oregon Onions, administered by the Idaho-Eastern Oregon Onion 
Committee, was amended November, 2011, to allow pearl onion packs and 
experimental shipments of mixed colors. Furthermore, in a May 2012 
meeting with the USDA Marketing Order Administration Division, AMS was 
informed that Washington State, which is outside of marketing order 
958, has packed mixed colors of larger Walla Walla type onions for 
Canada. However, the U.S. Onion Standards do not permit certifying a 
U.S. grade to mixed color packs.
    To address this issue, a rule proposing revisions to U.S. Standards 
for Grades of Onions (Other Than BGG and Creole Type) and the U.S. 
Standards for Grades of BGG Type Onions was published in the Federal 
Register on August 22, 2013 (78 FR 52099). The public comment period 
closed on October 21, 2013. The one response, which came from a large 
industry trade association, showed full support for the revisions.
    Based on the information gathered, the revisions will bring the 
U.S. Standards for Grades of Onions (Other Than BGG and Creole Type) 
and the U.S. Standards for Grades of BGG Type Onions in line with 
current marketing practices and provide shippers and packers with more 
flexibility. Therefore, AMS will amend the similar varietal 
characteristic and one type requirements for:
    <bullet> Onions Other Than BGG and Creole Type in Sections 51.2830, 
51.2831, and 51.2832, which affects the U.S. No. 1, U.S. Export No. 1, 
and U.S. Commercial grades, by adding ``except color when designated as 
a specialty or mixed pack.'' Likewise, AMS will amend the one type 
requirement in Section 51.2835, which affects the U.S. No. 2 grade, by 
adding ``except when designated as a specialty or mixed pack.''
    <bullet> BGG Type Onions in Sections 51.3195 and 51.3197, which 
affects the U.S. No. 1, U.S. Combination, and U.S. No. 2 grades, by 
adding ``except color when designated as a specialty or mixed pack.''
    In addition, AMS will correct an administrative error from the rule 
that inadvertently recorded ``of'' instead of ``or'' in Section 
51.2831.

List of Subjects in 7 CFR Part 51

    Agricultural commodities, Food grades and standards, Fruits, Nuts, 
Reporting and recordkeeping requirements, Trees, Vegetables.

    For reasons set forth in the preamble, 7 CFR part 51 is to be 
amended as follows:

PART 51--[AMENDED]

0
1. The authority citation for part 51 continues to read as follows:

    Authority: 7 U.S.C. 1621-1627.


0
2. In Sec.  51.2830, paragraph (a)(1) is revised to read as follows:


Sec.  51.2830  U.S. No. 1.

* * * * *
    (a) * * *
    (1) Similar varietal characteristics, except color when designated 
as a specialty or mixed pack;
* * * * *

0
3. In Sec.  51.2831, paragraph (a)(1) is revised to read as follows:


Sec.  51.2831  U.S. Export No. 1.

* * * * *
    (a) * * *
    (1) Similar varietal characteristics, except color when designated 
as a specialty or mixed pack;
* * * * *

0
4. In Sec.  51.2832, paragraph (a)(1) is revised to read as follows:


Sec.  51.2832  U.S. Commercial.

* * * * *
    (a) * * *
    (1) Similar varietal characteristics, except color when designated 
as a specialty or mixed pack;
* * * * *

0
5. In Sec.  51.2835, paragraph (a)(1) is revised to read as follows:


Sec.  51.2835  U.S. No. 2.

* * * * *
    (a) * * *
    (1) One type, except when designated as a specialty or mixed pack;
* * * * *

0
6. In Sec.  51.3195, paragraph (a)(1) is revised to read as follows:

[[Page 63295]]

Sec.  51.3195  U.S. No. 1.

* * * * *
    (a) * * *
    (1) Similar varietal characteristics, except color when designated 
as a specialty or mixed pack;
* * * * *

0
7. In Sec.  51.3197, paragraph (a)(1) is revised to read as follows:


Sec.  51.3197  U.S. No. 2.

* * * * *
    (a) * * *
    (1) Similar varietal characteristics, except color when designated 
as a specialty or mixed pack;
* * * * *

    Dated: October 17, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-25193 Filed 10-22-14; 8:45 am]
BILLING CODE 3410-02-P