Oranges and Grapefruit Grown in the Lower Rio Grande Valley in Texas; Interim Final Rule To Revise Pack and Size Requirements

SUMMARY: This interim final rule revises pack requirements for

grapefruit and certain types of oranges under the marketing order

covering oranges and grapefruit grown in the Lower Rio Grande Valley in

Texas to allow larger sizes of fruit to be marketed in fresh channels.

This rule also reduces current minimum size requirements for Texas

grapefruit. These actions were recommended by the Texas Valley Citrus

Committee (TVCC), the agency responsible for local administration of

the marketing order. These changes will enable the industry to market a

wider range of sizes of citrus fruit in fresh market channels, thereby

meeting consumer demand, increasing sales, and improving returns to

growers.

DATES: Effective on August 22, 1996; comments received by September 20,

1996 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 submitted in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456,

Room 2523-S, Washington, DC 20090-6456, or by facsimile at (202) 720-

5698. Comments should reference this 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.

FOR FURTHER INFORMATION CONTACT: Charles L. Rush, Marketing Order

Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2526-S, Washington, DC 20090-6456, telephone (202) 690-

3670; or Belinda G. Garza, McAllen Marketing Field Office, Marketing

Order Administration Branch, Fruit and Vegetable Division, AMS, USDA,

1331 E. Hackberry Street, McAllen, Texas 78501; telephone (210) 682-

2833. Small businesses may request information on compliance with this

regulation by contacting: Jay Guerber, Marketing Order Administration

Branch, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, Room

2523-S, Washington, DC 20090-6456; telephone (202) 720-2491, Fax #

(202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule is issued under Marketing

Agreement and Order No. 906 [7 CFR Part 906], as amended, regulating

the handling of oranges and grapefruit grown in the Lower Rio Grande

Valley in Texas, 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 interim

final rule in conformance with Executive Order 12866.

This interim final rule has been reviewed under Executive Order

12988, Civil Justice Reform. This interim final rule is not intended to

have retroactive effect. This interim final 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 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 exempted

therefrom. A 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 to review the Secretary's

ruling on the petition, provided an action is filed not later than 20

days after date of the entry of the ruling.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this rule on small entities.

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 20 handlers of oranges and grapefruit

subject to regulation under the order and approximately 2,000 orange

and grapefruit producers in the production area. Small agricultural

service firms are defined by the Small Business Administration (13 CFR

121.601) as those whose annual receipts are less than $5,000,000, and

small agricultural producers have been defined as those having annual

receipts of less than $500,000. A majority of Texas citrus handlers and

producers may be classified as small entities.

This interim final rule revises pack requirements for grapefruit

and certain varieties of oranges to allow larger sizes to be marketed

in fresh channels. It also reduces the minimum size requirements in

effect for grapefruit. This rule will enable handlers to market a

broader range of sizes of citrus fruit in fresh market outlets, thereby

meeting consumer demand, increasing fresh fruit sales, and enhancing

returns to handlers and producers.

Therefore, the AMS has determined that this action will not have a

significant economic impact on a substantial number of small entities.

Interested persons are invited to submit information on the regulatory

and informational impacts of this action on small businesses.

This action is in accordance with Sec. 906.40(a) of the order. This

section authorizes the Secretary to limit the

[[Page 43140]]

handling of particular grades, sizes, qualities, maturities, or packs

of any or all varieties of fruit during a specified period or periods.

Currently, minimum grade and size requirements, as well as pack and

container requirements, are in effect for both grapefruit and oranges

throughout the season. Shipments for certain purposes, including

processing, are exempt from these requirements.

The TVCC met on May 29, 1996, and unanimously recommended changes

in current pack and minimum size requirements. The TVCC meets prior to

and during each season to review the handling regulations effective on

a continuous basis for each citrus fruit regulated under the order.

TVCC meetings are open to the public, and interested persons may

express their views at these meetings. The Department reviews TVCC

recommendations and information, as well as information from other

sources, and determines whether modification, suspension, or

termination of the handling regulations would tend to effectuate the

declared policy of the Act.

Revision of Pack Requirements

Pack requirements for oranges and grapefruit are in effect under

Sec. 906.340 of the order's rules and regulations. These requirements

provide, among other things, that oranges and grapefruit be packed in

accordance with certain size designations. These size designations are

defined in terms of minimum and maximum diameters.

Oranges are divided into two categories for the purpose of pack

regulations: (1) Navel, Valencia and similar late-type oranges, and (2)

all other oranges. Navel, Valencia and similar late-type oranges must

be packed in accordance with 13 size designations. The smallest of

these is Size 324, which ranges from 2\1/16\ to 2\8/16\ inches in

diameter. The largest size defined is Size 46, which ranges from 4\3/

16\ to 5 inches in diameter. Oranges other than navel, Valencia and

similar late-type oranges are required to be packed in accordance with

the various pack sizes in section 51.691(c) of the United States

Standards for Grades of Oranges (Texas and States other than Florida,

California, and Arizona), hereinafter referred to as the ``orange

standards.''

The orange standards define seven pack sizes, from Size 324 (2\3/

16\ to 2\8/16\ inches in diameter) to Size 100 (3\7/16\ to 3\13/16\

inches in diameter). To allow for variations incident to proper

packing, a tolerance for undersized and oversized fruit is provided.

The tolerance is in terms of the number of fruit in a sample that may

be off-size--with the actual number increasing as the sample size

increases. Otherwise oversized oranges other than navel, Valencia and

similar late-type oranges would be diverted to exempt outlets, such as

processing.

The TVCC recommended revising the orange pack regulations to allow

all types of oranges to be packed in the full range of sizes--from Size

324 to Size 46. Thus, this rule revises Section 906.340(a)(2)(i)(a),

which specifies pack requirements for oranges other than navel,

Valencia and similar late-type oranges, to define the 13 size

designations authorized for such oranges. The seven smallest sizes are

defined in the same way they are in the orange standards. (The minimum

diameters are \2/16\ inch larger than those specified for navels,

Valencias and similar late-type oranges, while the maximum diameters

are the same.) The six sizes added for these oranges are defined

similarly (that is, the minimum diameters differ, but the maximum

diameters are the same). The differences in the minimum diameters take

into account varietal differences between these two categories of

oranges and current industry practice.

Grapefruit are required to be packed within the diameter limits

specified for the various pack sizes defined in Sec. 51.630(c) of the

United States Standards for Grades of Grapefruit (Texas and States

other than Florida, California, and Arizona), hereinafter referred to

as the grapefruit standards. Exceptions are that the minimum diameter

for pack size 96 grapefruit is 3\9/16\ inches, and for pack size 112

grapefruit, the minimum diameter is 3\5/16\ inches.

The grapefruit standards define eight pack sizes. The smallest is

Size 125/126, which ranges from a minimum of 3 inches to a maximum of

3\8/16\ inches in diameter. The largest is Size 46 which ranges from

4\5/16\ to 5 inches in diameter. This rule adds a new, larger Size 36

grapefruit, which ranges in size from 4\15/16\ to 5\9/16\ inches in

diameter.

Improved irrigation methods, technological advances, and improved

cultural practices have resulted in the Texas citrus industry growing

larger, good quality fruit. Current pack regulations preclude this

fruit from being marketed in fresh channels (with the exception of

small amounts allowed to exceed the maximum specified diameters), and

it is generally diverted to the processing market. The processing

market is currently in an oversupply situation and yields low returns

to growers. Providing for additional supplies (an estimated 5 to 10

percent) to be marketed fresh should, therefore, enhance grower

returns.

Additionally, the TVCC indicates that there has been increased

demand from consumers in recent years for a broader range of sizes of

oranges and grapefruit. Providing that these larger sizes may be

shipped will provide greater supplies and more choices to consumers. It

should also make the Texas citrus industry more competitive with other

citrus-growing areas, which have adapted their marketing efforts to

meet consumer demands.

Finally, varying growing conditions in Texas result in diverse size

distributions of oranges and grapefruit from season to season. Severe

drought conditions may cause a season's crop to be 5 to 10 percent

small sizes. Conversely, a rainy season may result in 5 to 10 percent

large sizes. These changes in pack requirements, to approve the

shipment of all commercial sizes of oranges and grapefruit, will

provide handlers with the flexibility to market available supplies in

light of existing market conditions.

Revision of Minimum Size Requirements for Grapefruit

Minimum size requirements for grapefruit are in effect under

Sec. 906.365 of the order's rules and regulations. Currently, during

the period November 16 through January 31 each season, grapefruit must

be at least pack size 96, with a minimum diameter of 3\9/16\ inches. At

other times, grapefruit that is pack size 112 (with a minimum diameter

of 3\5/16\ inches), may be shipped if it grades at least U.S. No. 1.

Otherwise, the minimum grade requirement for grapefruit is Texas

Choice. The smaller fruit is subject to a higher grade requirement

because experience indicates that a market exists for this smaller

fruit only if it meets a higher quality standard.

This interim final rule provides that pack size 112 grapefruit (if

it grades at least U.S. No. 1) may be shipped throughout the entire

season. This has been done in recent seasons. The Texas citrus industry

has found that there is a market for this smaller grapefruit,

particularly in juice bars, health food stores, and other types of

retail outlets that use smaller fruit for juicing. In addition, some

markets, such as Canada, prefer smaller fruit.

Also, as previously indicated, drought conditions can lead to an

abundance of smaller sizes. Such conditions currently exist in the

Lower Rio Grande Valley in Texas. The expected small sized grapefruit,

which cannot be marketed profitably in processing outlets, will be made

available to meet fresh market needs through this rule. This action is

[[Page 43141]]

expected to result in improved grower returns.

Permitting shipments of pack size 112 grapefruit grading at least

U.S. No. 1 will enable Texas grapefruit handlers to meet market needs

and compete with similar size grapefruit expected to be shipped from

Florida.

These changes in pack and size requirements for Texas oranges and

grapefruit are intended to broaden the range of sizes and increase the

amount of fruit available to consumers and increase grower returns. An

alternative to this rule is to leave the current regulations in place.

However, that would result in more of the larger oranges and grapefruit

and the smaller grapefruit going to processors, and less fruit going to

the more lucrative fresh market, which yields higher returns to

growers.

After consideration of all relevant material presented, including

the TVCC's recommendation, and other available 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 rule until 30 days after publication in the

Federal Register because: (1) To be of maximum benefit, this action

should be effective by September 1, the beginning of the 1996-97

season; (2) Texas citrus handlers are aware of this relaxation which

was recommended by the TVCC at a public meeting, and they will need no

additional time to comply with its requirements; and (3) this rule

provides a 30-day comment period and any comments received will be

considered prior to finalization of this rule.

List of Subjects in 7 CFR Part 906

Oranges, Marketing agreements, Grapefruit, Reporting and

recordkeeping requirements.

For the reasons set forth in the preamble, 7 CFR part 906 is

amended as follows:

PART 906--ORANGES AND GRAPEFRUIT GROWN IN THE LOWER RIO GRANDE

VALLEY IN TEXAS

1. The authority citation for 7 CFR part 906 continues to read as

follows:

Authority: 7 U.S.C. 601-674.

2. Paragraph (a)(2)(i)(a) of Sec. 906.340 is revised to read as

follows:

Sec. 906.340 Container, pack, and container marking regulations.

(a) * * *

(2) * * *

(i) * * *

(a) Oranges, except Navel oranges and Valencia and similar late-

type oranges, when packed in any box, bag, or carton shall be sized in

accordance with the sizes set forth in the following Table I, except as

otherwise provided by regulations issued pursuant to this part, and

otherwise meet the requirements of standard pack; and when in

containers not packed according to a definite pattern shall be sized in

accordance with the sizes set forth in the following Table I and

otherwise meet the requirements of standard sizing: Provided, That the

packing tolerances, which are set forth in the U.S. Standards for

Oranges (Texas and States other than Florida, California, and Arizona),

shall be applicable to fruit so packed.

Table I.--1\2/5\ Bushel Box

[Diameter in inches]

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

Pack size Minimum Maximum

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

46's............................. 4\5/16\ 5

54's or 56's..................... 4\2/16\ 4\12/16\

64's............................. 3\15/16\ 4\8/16\

70's or 72's..................... 3\13/16\ 4\5/16\

80's............................. 3\10/16\ 4\2/16\

100's............................ 3\7/16\ 3\13/16\

112's............................ 3\5/16\ 3\11/16\

125's............................ 3\3/16\ 3\9/16\

163's............................ 2\15/16\ 3\5/16\

200's............................ 2\11/16\ 3\1/16\

252's............................ 2\7/16\ 2\12/16\

288's............................ 2\4/16\ 2\9/16\

324's............................ 2\3/16\ 2\8/16\

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

3. Paragraph (a)(2)(i)(c) of Sec. 906.340 is amended by

redesignating ``Table I'' as ``Table II''.

4. Paragraph (a)(2)(ii) of Sec. 906.340 is revised to read as

follows:

Sec. 906.340 Container, pack, and container marking regulations.

(a) * * *

(2) * * *

(ii) Grapefruit. Grapefruit, when packed in any box, bag or carton,

shall be within the diameter limits specified for the various pack

sizes in 7 CFR 51.630(c) of the United States Standards for Grades of

Grapefruit (Texas and States other than Florida, California, and

Arizona): Provided, That the minimum diameter limit for pack size 36

grapefruit shall be 4\15/16\ inches and the maximum diameter limit

shall be 5\9/16\ inches; Provided, That the minimum diameter limit for

pack size 96 grapefruit shall be 3\9/16\ inches and for pack size 112

grapefruit shall be 3\5/16\ inches; and Provided further, That any

grapefruit in boxes or cartons shall be packed in accordance with the

requirements of standard pack.

* * * * *

5. Section 906.365 is amended by revising paragraph (a)(4) to read

as follows:

Sec. 906.365 Texas Orange and Grapefruit Regulation 34.

(a) * * *

(4) Such grapefruit are at least pack size 96, except that the

minimum diameter limit for pack size 96 grapefruit in any lot shall be

3\9/16\ inches: Provided, that any handler may handle grapefruit, which

are smaller than pack size 96, if such grapefruit grade at least U.S.

No. 1 and they are at least pack size 112, except that the minimum

diameter limit for pack size 112 grapefruit in any lot shall be 3\5/16\

inches.

* * * * *

Dated: August 16, 1996.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 96-21331 Filed 8-20-96; 8:45 am]

BILLING CODE 3410-02-P