Source: https://www.federalregister.gov/documents/2019/03/08/2019-04232/pecans-grown-in-the-states-of-alabama-arkansas-arizona-california-florida-georgia-kansas-louisiana
Timestamp: 2019-10-21 00:00:26
Document Index: 158702345

Matched Legal Cases: ['art 986', 'art 986', '§\u2009986', '§\u2009986', '§\u2009986', '§\u2009986', '§\u2009986']

A Rule by the Agricultural Marketing Service on 03/08/2019
SC18-986-1 FR
https://www.federalregister.gov/d/2019-04232 https://www.federalregister.gov/d/2019-04232
Start Preamble Start Printed Page 8409
This final rule, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This final rule is issued under Marketing Agreement and Order No. 986, (7 CFR part 986), regulating the handling of pecans grown in the states of Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. Part 986 (referred to as the “Order”) is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Council locally administers the Order and is comprised of growers and handlers of pecans operating within the production area, and one accumulator and one public member.
The Department of Agriculture (USDA) is issuing this final rule in conformance with Executive Orders 13563 and 13175. This action falls within a category of regulatory actions that the Office of Management and Budget (OMB) has exempted from Executive Order 12866 review. Additionally, because this rule does not meet the definition of a significant regulatory action it does not trigger the requirements contained in Executive Order 13771. See OMB's Memorandum titled “Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, titled `Reducing Regulation and Controlling Regulatory Costs' ” (February 2, 2017).
This final rule revises the reporting requirements under the Order. This action requires all pecan handlers to report to the Council the average handler price paid and average shelled pecan yield as part of its existing year-end report. The Council will use this information to provide statistical reports to the industry and meet requirements under the Order. This action was unanimously recommended by the Council at its January 24, 2017, meeting and affirmed at its April 17, 2018, meeting.
Section 986.76 provides the authority to collect reports on the quantity of pecans handled and other pertinent information as specified by the Council. Section 986.78 provides, with the approval of the Secretary, authority for the Council to collect other reports and information from handlers needed to perform its duties. Section 986.175 specifies that handlers shall submit a year-end report to the Council that includes the amount of shelled and inshell pecans in inventory, total inventory calculated on an inshell basis, total weight and type of domestic pecans handled for the fiscal year, and information on assessments owed, paid, or due.
This rule revises § 986.175 to require that additional information be included in the year-end report. These revisions require handlers to report the average price paid by handler and average yield of shelled pecans as part of the existing year-end report.
While the National Agricultural Statistics Service (NASS) reports average grower prices, this reporting change will provide information regarding a handler's overall cost of Start Printed Page 8410acquiring pecans. Some handlers buy directly from growers, but many buy from other handlers or import pecans. Understanding the cost of pecans being handled is key information in determining the value of the overall crop and subsequent impacts on the market for pecans the following season. During the meetings, members noted that collecting the average price paid would also be necessary to complete the marketing policy report required under the Order. The marketing policy, as required by § 986.65, must include projected prices for the upcoming fiscal year, which would be influenced by handler costs. Further, the Council believes providing this information would improve the information available to the pecan industry. In particular, the Council feels this information may give growers better information that can be used in making business decisions. The Council recommended adding this reporting requirement as there is currently no comprehensive source for handler cost information.
As with the handler price paid, there is currently no central industry source for information on shelled pecan yield. The Council believes collecting this data will allow them to provide the industry with an updated annual average of this yield, which could be an indicator of quality, and over time provide a series of data on shelled pecan yield that would allow them to determine if changes to the current conversion rate are needed.
The Council believes these revised reporting requirements are necessary to provide accurate reports to the industry regarding average price paid, yield for shelled pecans, and to meet requirements under the Order. The industry will use this information to complement the information provided by NASS in the development of its marketing policy and to collect accurate data to determine if the definition of weight in § 986.43 needs to be amended.
Evidence presented at the formal rulemaking hearing indicates an average handler margin of $0.58 per pound. Adding this margin to the average grower price of $2.59 per pound of inshell pecans results in an estimated handler price of $3.17 per pound. With a total 2017 production of 269 million pounds, the total value of production in 2017 was $853 million ($3.17 per pound multiplied by 269 million pounds). Taking the total value of production for pecans and dividing it by the total number of pecan handlers provides an average return per handler of $3.4 million. Using this estimated price, the utilization volume, number of handlers, and assuming a normal distribution among handlers, the majority of handlers have annual receipts of less than $7,500,000. Thus, the majority of growers and handlers regulated under the Order may be classified as small entities.
This final rule revises the reporting requirements in § 986.175. This action requires all pecan handlers to report to the Council the average handler price paid and average shelled pecan yield as part of its existing year-end report. This information will be used by the Council to provide statistical reports to the industry and meet requirements under the Order. The authority for this action is provided in §§ 986.76 and 986.78.
It is not anticipated that this action will impose additional costs on handlers or growers, regardless of size. Council members, including those representing small businesses, indicated the average handler price paid and the average shelled pecan yield information is already recorded and maintained by handlers as a part of their daily business and the information should be readily accessible. Consequently, any additional costs associated with this change would be minimal and apply equally to all handlers.
This action should also help the industry by providing additional data on pecans handled. This information will help with marketing and planning for the industry, as well as provide important information in preparing the annual marketing policy required by the Order. This change will also assist with the development of a dataset to determine if the conversion rate for shelled to inshell pecans needs to be revised. The benefits of this rule are expected to be equally available to all pecan growers and handlers, regardless of their size.Start Printed Page 8411
The Council discussed other alternatives to this action, including making no changes to the current reporting requirements. However, having the information on handler price paid and shelled pecan yield will provide important information for the industry.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0291 “Federal Marketing Order for Pecans.” This final rule will require changes to the Council's existing APC Form 7. However, the changes are minor and the currently approved burden for the form will not be altered by the changes to the form. The revised form has been submitted to OMB for approval.
As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. As noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule. Further, no public comments were received regarding the initial regulatory flexibility analysis.
The Council's meetings were widely publicized throughout the pecan industry and all interested persons were invited to attend the meetings and participate in Council deliberations on all issues. The Council's meetings held on January 24, 2018, and April 17, 2018, were also public meetings and 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 October 9, 2018, (83 FR 50531). Copies of the rule were sent via email to Council members and known pecan handlers. The rule was also made available through the internet by USDA and the Office of the Federal Register. A 30-day comment period ending November 8, 2018, was provided to allow interested persons to respond to the proposal. No comments were received. Accordingly, no changes will be made to the rule as proposed.
After consideration of all relevant matter presented, including the information and recommendation submitted by the Council 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.
[FR Doc. 2019-04232 Filed 3-7-19; 8:45 am]