Nectarines and Peaches Grown in California; Revision of Handling Requirements for Fresh Nectarines and Peaches

Federal RegisterMar 8, 1999

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SUMMARY: This rule invites comments on revisions to the handling

requirements for California nectarines and peaches by modifying the

grade, size, maturity, and container marking requirements for fresh

shipments of these fruits, beginning with 1999 season shipments. This

rule would also authorize continued shipments of ``CA Utility'' quality

nectarines and peaches during the 1999 season with an increased

percentage of U.S. No. 1 nectarines and peaches in each container. This

rule would enable handlers to continue shipping fresh nectarines and

peaches meeting consumer needs in the interest of producers, handlers,

and consumers of these fruits.

DATES: Comments must be received by March 29, 1999.

ADDRESSES: Interested persons are invited to submit written comments

concerning this proposal. Comments must be sent to the Docket Clerk,

Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2525-S,

Washington, DC 20090-6456; Fax: (202) 720-5698; or E-mail:

[email protected]. All comments should reference the docket

number and the date and page number of this issue of the Federal

of the Docket Clerk during regular business hours.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, or

Kurt J. Kimmel, Regional Manager, California Marketing Field Office,

Marketing Order Administration Branch, Fruit and Vegetable Programs,

AMS, USDA, 2202 Monterey Street, suite 102B, Fresno, California 93721;

telephone: (559) 487-5901, Fax: (559) 487-5906; or George Kelhart,

Technical Advisor, Marketing Order Administration Branch, Fruit and

Vegetable Programs, AMS, USDA, room 2525-S, P.O. Box 96456, Washington,

DC 20090-6456; telephone: (202) 720-2491, Fax: (202) 720-5698. Small

businesses may request information on compliance with this regulation,

or obtain a guide on complying with fruit, vegetable, and specialty

crop marketing agreements and orders by contacting Jay Guerber,

Marketing Order Administration Branch, Fruit and Vegetable Programs,

AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456;

telephone: (202) 720-2491; Fax: (202) 720-5698; or E-mail:

Jay__N__G[email protected]. You may view the marketing agreement and

order small business compliance guide at the following web site: http:/

/www.ams.usda.gov/fv/moab.html.

SUPPLEMENTARY INFORMATION: This proposal is issued under Marketing

Agreements Nos. 124 and 85, and Marketing Order Nos. 916 and 917 (7 CFR

parts 916 and 917) regulating the handling of nectarines and peaches

grown in California, respectively, hereinafter referred to as the

``orders.'' The marketing agreements and orders are 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 proposal has been reviewed under Executive Order 12988, Civil

Justice Reform. This rule is not intended to have retroactive effect.

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 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 the date of the entry of the ruling.

This proposal invites comment on revisions to the handling

requirements currently prescribed for shipments of fresh nectarines and

peaches under the orders.

Under the orders, grade, size, maturity, and container and pack

requirements are established for fresh shipments of California

nectarines and peaches. Such requirements are in effect on a continuing

basis. The Nectarine Administrative Committee (NAC) and the Peach

Commodity Committee (PCC) (committees), which are responsible for local

administration of the orders, met on December 2, 1998, and unanimously

recommended that these handling requirements be revised for the 1999

season, which begins April 1, with one exception. The Nectarine

Administrative Committee voted 4 in favor and 3 opposed to continuing

shipments of ``CA Utility'' quality nectarines with an increased

percentage of U.S. No. 1 nectarines in boxes of ``CA Utility'' quality

nectarines; and the Peach Commodity Committee voted 7 in favor and 4

opposed to continuing shipments of ``CA Utility'' quality peaches with

an increased percentage of U.S. No. 1 peaches in boxes of ``CA

Utility'' quality peaches. The nectarine order requires six concurring

votes on recommendations for regulations and the peach order requires

nine concurring votes on recommendations for regulations. As a result,

these two votes did not meet the minimums prescribed to constitute

official recommendations to the Secretary. Nectarine and peach handlers

have been authorized to ship ``CA Utility'' quality fruit since the

1996 season, and such shipments have comprised about two percent of

total shipments. Such fruit is mature but of a lower quality than U.S.

No. 1 fruit and is acceptable in some markets. If shipments of ``CA

Utility'' quality fruit are not permitted, only higher-quality fruit

could be shipped.

Because prior season experience shows that the authority to ship

``CA Utility'' quality fruit provided additional marketing

opportunities for handlers, the Department is proposing continuing to

allow such shipments during 1999. Inviting written comments on this

matter will give all interested persons the opportunity to submit

detailed information which can be used to help the Department decide on

the best course of action.

The changes would: (1) Require that maturity and ``CA Utility''

quality marking of containers be a minimum of \3/8\ inch in height; (2)

require that experimental containers and 22G containers be marked with

both the size and the count of fruit contained in the package; (3)

require that master containers of consumer packages be marked with the

minimum size fruit contained in the consumer packages; (4) add weight

counts for early-season, mid-

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season, and late-season varieties; (5) continue shipments of ``CA

Utility'' quality nectarines and peaches, and increase the percentage

of U.S. No. 1 nectarines and peaches permitted in containers of ``CA

Utility quality'' fruit from the current 30 percent to 40 percent,

provided that the additional 10 percent of U.S. No. 1 fruit in the

container has non-scoreable blemishes; and (6) revise varietal maturity

and size requirements to reflect recent changes in growing conditions.

The committees meet prior to and during each season to review the

rules and regulations effective on a continuing basis for California

nectarines and peaches under the orders. Committee meetings are open to

the public, and interested persons may express their views at these

meetings. The Department reviews committee recommendations and

information, as well as information from other sources, and determines

whether modification, suspension, or termination of the rules and

regulations would tend to effectuate the declared policy of the Act.

No official crop estimate was available at the time of the

committees' meetings because the nectarine and peach trees are dormant.

The committees will recommend a crop estimate at their meetings in

early spring. However, preliminary estimates indicate that the 1999

crop will be somewhat larger in size but similar in characteristics to

the 1998 crop which totaled 16,916,900 boxes of nectarines and

18,202,300 boxes of peaches.

Container Marking Requirements

Sections 916.52 and 917.41 of the orders for nectarines and

peaches, respectively, authorize container marking requirements.

Requirements for container markings are specified in Secs. 916.350 and

917.442 of the orders' rules and regulations. Container marking

requirements include marking of the commodity and variety (e.g., July

Red Nectarines), the size of the fruit in the box (e.g., 80 size), the

net weight, the maturity (either U.S. Mature (US MAT), or California

Well-Matured (CA WELL MAT)), or the quality (i.e., ``CA Utility''), on

each container of nectarines and peaches.

This proposal would revise paragraphs (a)(3) of Secs. 916.350 and

917.442 in the orders' rules and regulations to require that maturity

markings on containers be in letters at least \3/8\ inch in height.

This proposal would also revise the current quality marking requirement

in paragraphs (d) of Secs. 916.350 and 917.442 for ``CA Utility'' from

a minimum of \3/4\ inch in height to a minimum of \3/8\ inch in height.

These proposed changes would standardize marking requirements on

containers by specifying a minimum lettering height of \3/8\ inch for

both maturity and quality markings. This is intended to assure that all

containers shipped by nectarine and peach handlers are similarly

marked.

The committees unanimously recommended that the lettering

indicating fruit maturity and quality on containers be standardized at

a minimum height of \3/8\ inch. The \3/8\ inch minimum would be

appropriate, given the number of other markings, required or voluntary,

on each container. Such lettering is also readily legible to the

Federal or Federal-State Inspection Service (Inspection Service) and

compliance officers representing the committees. The \3/8\ inch minimum

letter height standard would also eliminate any confusion among

handlers about which size is required for markings by reducing the

currently-required 3/4 inch minimum marking for ``CA Utility'' to a

minimum \3/8\ inch in height and specifying similar requirements for

maturity markings.

Sections 916.350 and 917.442 of the orders' rules and regulations

also require containers to be marked with the size and/or number of

pieces of fruit in the container (count).

In commonly-used containers such as the No. 22D and the No. 32

boxes the configurations of fruit results in the fruit size and count

being the same. The No. 22G standard lug box, however, has a different

shape which results in a different tray-pack configuration than those

of the No. 22D and the No. 32 boxes. The shape of the No. 22G container

also imposes tighter limits on the number of fruit that can be tray

packed in it than the No. 22D and No. 32 boxes, and the fruit size and

count are not the same. Thus, handlers using it should be required to

indicate the number of fruit in the container as well as the fruit

size, since the fruit size and count are not always the same in this

container. This is also true for some experimental packages, as well,

since there are no standardized pack configurations for experimental

packages, and, thus, no standardized basis for comparison against the

No. 22D and No. 32 boxes is possible. Experimental containers, in

addition to the No. 22G standard lug box, would be required to be

marked with both the size and the count of fruit contained in the

package.

To lessen the chances of confusion in the marketplace with such

containers, the committees unanimously recommended requiring that the

No. 22G standard lug box and experimental containers be marked with

both the size and count of the fruit contained in the package.

To implement this change, paragraphs (a)(4)(i) and (a)(4)(ii) of

Sec. 916.350 would be revised to add the requirement that experimental

containers be marked with both the size and count of nectarines

contained within the containers. Paragraph (a)(4)(ii) of Sec. 917.442

would also be revised to add the requirement that the No. 22G standard

lug box be marked with both the size and count of peaches contained

within the container.

Sections 916.350 and 917.442 also specify markings that are

required on master containers of consumer packages, consumer packages

within master containers, and consumer packages not within master

containers. Master containers must be marked with the net weight of

each consumer package, the number of individual consumer packages, the

size description of the fruit in each consumer package, and the name

and address of the shipper. Consumer packages within the master

containers must be marked with the name and address of the shipper and

the net weight of the container. When the consumer package is not in a

master container, the consumer package must also be marked with the

number of fruit in the package, the name of the variety, if known, and

the maturity of the fruit in the package.

Authority for consumer packages permits handlers to pack and ship

nectarines and peaches in other types of containers demanded by their

customers. The fruit packages are tailored to the requirements of the

buyer, and the buyer may require the handler to pack consumer packages

of several different sizes of fruit within the master container. For

example, a master container may contain five consumer packages. One

consumer package may contain size 64 nectarines, while two other

consumer packages may contain size 70 nectarines. The remaining two

consumer packages may contain size 60 nectarines. In this example, each

consumer package contains the same size nectarines, but the master

container contains consumer packages with different nectarine sizes.

The committees unanimously recommended that such size variations

from consumer package to consumer package within a master container

should be indicated on the master container. The committees determined

that the marking on the master container should accurately and clearly

reflect the minimum size contained within the package containing the

smallest size fruit and that the master container contains consumer

packages with larger

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sized fruit. Thus, a master container would be marked ``Minimum size 60

and larger'' or ``Minimum size 96 and larger,'' when the consumer

packages in the master container contain different fruit sizes. This is

intended to provide more accurate information to the buyers of the

fruit.

Thus, paragraph (a)(8)(i) of Sec. 916.350 and paragraph (a)(9)(i)

of Sec. 917.442 of the orders' rules and regulations would be revised

to require that the markings on master containers containing consumer

packages of different sizes of nectarines and peaches specify the

smallest size in the packages, and, when applicable, indicate that the

individual packages include larger-sized fruit.

Pack Regulations

Container markings based on weight-count standards are also

specified in Tables 1 and 2 of paragraphs (a)(4)(iv) in Secs. 916.350

and 917.442 of the orders' rules and regulations. The purpose of the

weight-count standards is to establish the maximum number of nectarines

or peaches in a 16-pound sample for each individual size designation.

To facilitate the repacking of nectarines and peaches from tray-packs

into volume-filled containers, the committees routinely conduct tests

to determine the optimum weight-count standards for early-season, mid-

season, and late-season nectarines and peaches, respectively, based on

the sizes of nectarines and peaches in tray-packs. Tray-packs fit into

standard nectarine and peach boxes and have molded cavities for the

fruit to sit in. Trays with different cavity sizes are used, depending

upon the size of the fruit being packed. Handlers have traditionally

used tray-packs to securely package nectarines and peaches. However,

some handlers have moved away from tray-packed configurations toward

volume-filled configurations in recent years.

Handlers of nectarines and peaches have informed the committees

that some larger sizes of nectarines and peaches are increasingly being

converted from tray-packs to volume-filled packs. Since volume-filled

containers are less costly to pack and market demands change, handlers

have opted to pack a greater proportion of the larger-sized, high-

quality fruit in volume-filled containers.

Size studies were performed by the NAC and PCC in 1994 and 1995,

and were used as a basis for changing some of the weight counts.

Because nectarines and peaches of size 44 were not packed in volume-

filled containers, no weight counts were published for size 44

nectarines and peaches at that time. As the practice of converting

tray-packed containers of size 44 nectarines and peaches to volume-

filled containers has increased, the need to publish a weight-count

standard also increased.

The committees have used the previously-conducted size studies to

determine the weight-count standards for size 44 nectarine and peach

sizes for inclusion in the weight-count standards. The NAC has

determined that the weight-count standard for size 44 should be a

maximum of 33 pieces for early-season nectarines and a maximum of 30

pieces of mid-season and late-season nectarines in a 16-pound sample.

The PCC has determined that the weight count standard for size 44

should be a maximum of 33 pieces of fruit in a 16-pound sample for all

peach varieties.

Therefore, the NAC and PCC unanimously recommended modifications to

the weight-count standards for nectarines and peaches by the addition

weight-count standards for size 44 nectarines and peaches. To implement

such a change, Tables 1 and 2 of paragraphs (a)(4)(iv) in Secs. 916.350

and 917.442 of the regulations are proposed to be modified by adding

size 44 and the applicable weight-count standard of a maximum of 33

pieces of early-season nectarines and all peaches, and a maximum of 30

pieces of mid-season and late-season nectarines in a 16-pound sample.

These changes would permit handlers to more easily convert tray-packed

nectarines and peaches to volume-filled containers, decrease the

handling costs associated with that conversion, and meet marketing

demands.

Quality Requirements

Sections 916.52 and 917.41 of the orders authorize the

establishment of grade and quality requirements for nectarines and

peaches, respectively. Prior to the 1996 season, Sec. 916.356 of the

order's rules and regulations required nectarines to meet a modified

U.S. No. 1 grade. Specifically, nectarines were required to meet U.S.

No. 1 grade requirements, except there was a slightly tighter

requirement for scarring and a more liberal allowance for misshapen

fruit. Under Sec. 917.459 of the order's rules and regulations prior to

the 1996 season, peaches were also required to meet the requirements of

a U.S. No. 1 grade, except there was a more liberal allowance for open

sutures that were not ``serious damage.''

Under Secs. 916.356 and 917.459, shipments of ``CA Utility''

quality nectarines and peaches have been permitted since the 1996

season, contingent upon such containers meeting certain relaxed quality

requirements. ``CA Utility'' quality is a lower-quality fruit than U.S.

No. 1. Currently, the requirement for containers of ``CA Utility''

nectarines and peaches provides that not more than 30 percent of the

fruit in any container meet or exceed the requirements of U.S. No. 1.

This proposal would allow handlers to continue shipping ``CA Utility''

fruit during the 1999 season, and increase the 30 percent limitation to

not more than 40 percent except that the additional 10 percent of the

U.S. No. 1 fruit must have non-scoreable blemishes.

Containers marked ``CA Utility'' must be inspected by the

Inspection Service and certified as meeting the ``CA Utility'' quality

requirements. Part of the inspection process is to evaluate the fruit

in accordance with the requirements of the U.S. Standards for Grades of

Nectarines, the U.S. Standards for Grade of Peaches, (Standards) and

the orders. In conducting inspections, inspectors are required to

evaluate various blemishes. Some blemishes are serious or severe enough

to be ``scored'' against the fruit as defects which are damaging to the

grade of the fruit, while some other blemishes are not serious or

severe enough to affect the grade of the fruit. In the first instance,

the blemishes are termed ``scoreable'' defects; and, in the second

instance, the blemishes are termed ``non-scoreable'' defects. Some

members of the committees supported a requirement that such non-

scoreable blemishes must be present on the additional 10 percent of the

fruit grading U.S. No. 1 in boxes marked ``CA Utility'' during the 1999

season.

A similar requirement was in place during the latter part of the

1998 season. At that time, unseasonal summer rains had caused increased

``non-scoreable'' defects which detracted from the overall appearance

of U.S. No. 1 nectarines and peaches for some handlers. An interim

final rule was published on September 22, 1998 (63 FR 50461), and a

final rule was published on November 9, 1998 (63 FR 60209).

While containers marked ``CA Utility'' fruit are subject to relaxed

quality requirements, all other grade and marking requirements of the

orders must be met.

At the committee meetings on December 2, 1998, at least one handler

complained that fruit with non-scoreable blemishes was unsightly in the

type of U.S. No. 1 box he offered to the marketplace and to his

customers. His preference was to place such fruit in boxes marked ``CA

Utility.'' The current limitation of not more than 30 percent U.S. No.

1 fruit in containers marked ``CA Utility'' caused the Inspection

Service to determine that his ``CA

[[Page 11349]]

Utility'' containers were ``out of grade,'' because they contained more

U.S. No. 1 fruit than permitted. For that reason, the handler was

forced to remove the fruit from the ``CA Utility'' boxes, and either

repack his U.S. No. 1 to include this fruit or discard the fruit.

Therefore, the limitation of not more than 30 percent U.S. No. 1 in

``CA Utility'' quality containers became a hindrance and was eliminated

by the September 22, 1998, rulemaking action.

A niche market exists for ``CA Utility'' quality fruit and an

opportunity should be made available to market somewhat better quality.

It was estimated by a handler of ``CA Utility'' quality fruit that the

relaxation from not more than 30 percent U.S. No. 1 in the containers

to not more than 40 percent provided that the additional 10 percent

U.S. No. 1 in the containers has non-scoreable blemishes will increase

shipments of ``CA Utility'' quality nectarines and peaches by

approximately one-half of one percent. A majority of the members of

both committees supported the change, because the change had been in

effect at the end of the 1998 season. However, one committee member

commented that there was little merit to adding one-half of one percent

to the marketplace. Another indicated that perhaps a review of the

entire grade structure would address the problem and did not advocate

relaxing the percentage of U.S. No. 1 in ``CA Utility'' containers. A

majority of the committee members present voted to relax the percentage

from 30 percent U.S. No. 1 in containers marked ``CA Utility'' to 40

percent U.S. No. 1 provided that the additional 10 percent of the U.S.

No. 1 had non-scoreable blemishes. The vote by the NAC was 4 in favor

and 3 opposed, and the vote by the PCC was 7 in favor and 4 opposed.

The nectarine order requires six concurring votes on regulatory

recommendations, and the peach order requires nine concurring votes on

regulatory recommendations. As a result, these two votes did not meet

the minimums prescribed to constitute official recommendations to the

Secretary.

Because prior seasons' experience shows that the authority to ship

``CA Utility'' quality fruit provided additional marketing

opportunities for handlers, the Department is proposing continuing to

allow such shipments during 1999. Inviting written comments on this

matter will give all interested persons the opportunity to submit

detailed information which can be used to help the Department decide on

the best course of action on continuing to allow such shipments and on

the proposed standards for ``CA Utility'' quality fruit.

Historically, shipments of ``CA Utility'' nectarines represented

1.1 percent of all nectarine shipments, or approximately 210,000 boxes

in 1996. In 1997, shipments of ``CA Utility'' nectarines represented

1.1 percent of all nectarine shipments, or approximately 230,000 boxes.

In 1998, shipments of ``CA Utility'' nectarines represented 4.5 percent

of all nectarine shipments, or approximately 760,000 boxes. Shipments

of ``CA Utility'' peaches represented 1.9 percent of all peach

shipments, or 366,000 boxes in 1996. In 1997, shipments of ``CA

Utility'' peaches represented 1.0 percent of all peach shipments, or

approximately 217,000 boxes. In 1998, shipments of ``CA Utility''

peaches represented 3.3 percent of all peach shipments, or

approximately 602,000 boxes.

For these reasons, the Department proposes to allow continued

shipments of ``CA Utility'' quality nectarines and peaches for the 1999

season with an increase in the percentage of U.S. No. 1 fruit permitted

in each container. Paragraphs (d) of Secs. 916.350 and 917.442, and

paragraphs (a)(1) of Secs. 916.356 and 917.459 are proposed to be

revised to permit shipments of nectarines and peaches meeting revised

``CA Utility'' quality requirements during the 1999 season.

Maturity Requirements

Both orders provide (in Secs. 916.52 and 917.41) authority to

establish maturity requirements for nectarines and peaches,

respectively. The minimum maturity level currently specified for

nectarines and peaches is ``mature'' as defined in the standards.

Additionally, both orders'' rules and regulations provide for a higher,

``well matured'' classification. For most varieties, ``well-matured''

fruit determinations are made using maturity guides (e.g., color

chips). These maturity guides are reviewed each year by the Shipping

Point Inspection Service (SPI) to determine whether they need to be

changed based on the most-recent information available on the

individual characteristics of each variety.

These maturity guides established under the handling regulations of

the nectarine and peach marketing orders have been codified in the Code

of Federal Regulations as Table 1 to paragraphs (a)(1)(iv) of

Secs. 916.356 and 917.459, for nectarines and peaches, respectively.

Currently, Secs. 916.356 and 917.459 include both ``Table 1'' and

``Table 1 to Paragraphs (a)(1)(iv)''. ``Table 1'' is a duplicate of

``Table 1 to Paragraphs (a)(1)(iv)'' and would be removed from both

sections. The latter table is referred to as ``Table 1'' in the

remainder of this document.

The requirements in the 1999 handling regulation are the same as

those which appeared in the 1998 handling regulation with a few

exceptions. Those exceptions are explained below in this proposed rule.

Nectarines: Requirements for ``well-matured'' nectarines are

specified in Sec. 916.356 of the order's rules and regulations. As

proposed, Table 1 to paragraph (a)(1)(iv) of Sec. 916.356 would be

revised to add a maturity guide for one nectarine variety.

Specifically, SPI recommended adding a maturity guide for the Diamond

Jewel nectarine variety at a maturity guide of L.

The NAC recommended these maturity requirements based on SPI's

continuing review of individual maturity characteristics and

identification of the appropriate maturity guide corresponding to the

``well-matured'' level of maturity for nectarine varieties in

production.

Peaches: Section 917.459 of the order's rules and regulations

specifies maturity requirements for fresh peaches being inspected and

certified as being ``well matured.'' Table 1 to paragraph (a)(1)(iv) of

Sec. 917.459 would be revised to add maturity guides for three peach

varieties. Specifically, SPI recommended adding the maturity guides for

the Sweet Scarlet peach variety to be regulated at the J maturity

guide, and the Lady Sue and Prima Gattie 8 peach varieties to be

regulated at the L maturity guide.

The PCC unanimously recommended these maturity requirements based

on SPI's continuing review of individual maturity characteristics and

identification of the appropriate maturity guide corresponding to the

``well-matured'' level of maturity for peach varieties in production.

Size Requirements

Both orders provide authority to establish size requirements in

Secs. 916.52 and 917.41. Size regulations provide greater consumer

satisfaction and encourage more repeat purchases by helping to ensure

consumers are provided high-quality fruit. Size regulations, therefore,

increase returns to producers and handlers by encouraging producers to

leave fruit on the tree longer. The increased growing time not only

improves the size of the fruit, but also increases its maturity.

Increased size also results in an increased number of packed boxes of

nectarines or peaches per acre. Varieties recommended for specific size

regulation have been reviewed and such

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recommendations are based on the specific characteristics of each

variety. The NAC and PCC conduct studies each season on the range of

sizes reached by the regulated varieties and determine whether

revisions in the size requirements are appropriate.

Nectarines: Section 916.356 of the order's rules and regulations

specifies minimum size requirements for fresh nectarines in paragraphs

(a)(2) through (a)(9). As proposed, Sec. 916.356 would be revised to

establish variety-specific size requirements for five nectarine

varieties that were produced in commercially-significant quantities of

more than 10,000 packages for the first time during the 1998 season.

For example, one of the varieties recommended for addition to the

variety-specific size requirements is the Sunny Red variety. Studies of

the size ranges attained by the Sunny Red variety revealed that all of

the nectarines of that variety met sizes in the ranges of sizes 30, 40,

50, 60, 70, and 80. While the size distribution peaked on the size 40,

100 percent of the fruit sized at a minimum of size 80.

A review of other varieties with the same harvesting period

indicated that Sunny Red was also comparable to those varieties in its

size ranges. Further, handlers known to ship the variety have provided

additional supporting information for making this determination. Thus,

the recommendation to place the Sunny Red nectarine variety in the

variety-specific size regulation at a size 80 would be appropriate.

Historical variety data such as this provides the NAC with the

information necessary to recommend the appropriate sizes at which to

regulate various nectarine varieties. In addition, producers of the

varieties affected are invited to comment when such size

recommendations are deliberated.

Thus, to implement such size requirements, the introductory text of

paragraph (a)(6) in Sec. 916.356 would be revised to include the Grand

Pearl, Ruby Pearl, Sunny Red, Terra White, and 491-48 nectarine

varieties.

This rule would also revise the introductory text of paragraph

(a)(4) of Sec. 916.356 to remove two nectarine varieties; and the

introductory text of paragraph (a)(6) of Sec. 916.356 would be revised

to remove ten nectarine varieties from the variety-specific size

requirements specified in this section because less than 5,000 packages

of each of these varieties were produced during the 1998 season. As

proposed, the introductory text of paragraph (a)(4) would be revised to

remove the June Brite and Pacific Star nectarine varieties; and the

introductory text of paragraph (a)(6) would be revised to remove the

Flamekist, Flavor Grand, Late How Red, Moon Grand, Prima Diamond XVIII,

Red Free, Red Fred, Ruby Grand, September Grand, and Summer Star

nectarine varieties. Nectarine varieties removed from the nectarine

variety-specific list become subject to the non-listed variety size

requirements specified in paragraphs (a)(7), (a)(8), and (a)(9) of

Sec. 916.356.

The NAC recommended these changes in the minimum size requirements

based on a continuing review of the sizing and maturity relationships

for these nectarine varieties, and consumer acceptance levels for

various sizes of fruit. This proposal would establish minimum size

requirements for fresh nectarines consistent with expected crop and

market conditions.

Peaches: Section 917.459 of the order's rules and regulations

specifies minimum size requirements for fresh peaches in paragraphs

(a)(2) through (a)(5), and paragraphs (b) and (c). Section 917.459

would be revised to establish variety-specific size requirements for

six peach varieties that were produced in commercially-significant

quantities of more than 10,000 packages for the first time during the

1998 season.

For example, one of the peach varieties recommended for addition to

the variety-specific size requirements is the Morning Lord variety.

Studies of the size ranges attained by the Morning Lord variety

revealed that while it peaked on size 40, 100 percent of the fruit

sized at a minimum of size 72.

A review of other varieties harvested during the same period

indicated that Morning Lord was also comparable to those varieties in

its size ranges. Further, discussions with handlers known to ship the

variety provide additional information for making such determinations.

Thus, the recommendation to place the Morning Lord peach variety in the

variety-specific size regulation at a size 72 would be appropriate.

Historical variety data such as this provides the PCC with the

information necessary to recommend the appropriate sizes at which to

regulate various peach varieties. In addition, producers of the

affected varieties are invited to comment when such size

recommendations are deliberated.

Accordingly, the introductory text of paragraph (a)(3) of

Sec. 917.459 of the order's rules and regulations is proposed to be

revised to include the Super Rich peach variety; the introductory text

of paragraph (a)(4) would be revised to include the Snow Dance peach

variety; and the introductory text of paragraph (a)(6) would be revised

to include the Morning Lord, Prima Peach 23, Yukon King, and 1-01-505

peach varieties.

Additionally, paragraphs (a)(5) and (a)(6) of Sec. 917.459 would be

revised to remove 12 peach varieties from the variety-specific size

requirements specified in that section, because less than 5,000

packages of these varieties were produced during the 1998 season.

Specifically, the introductory text of paragraph (a)(5) would be

revised to remove the Honey Red and Sweet Gem peach varieties; and the

introductory text of paragraph (a)(6) of Sec. 917.459 would be revised

to remove the August Sun, Autumn Crest, Autumn Gem, Belmont, Berenda

Sun, Blum's Beauty, Fire Red, July Sun, Mary Anne, and Red Sun peach

varieties.

Peach varieties removed from the variety-specific list become

subject to the non-listed variety size requirements specified in

paragraphs (b) and (c) of Sec. 917.459.

The PCC recommended these changes in the minimum size requirements

based on a continuing review of the sizing and maturity relationships

for these peach varieties, and the consumer acceptance levels for

various fruit sizes. This proposal would establish minimum size

requirements for fresh peaches consistent with expected crop and market

conditions.

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 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 325 California nectarine and peach handlers

subject to regulation under the orders covering nectarines and peaches

grown in California, and about 1,800 producers of these fruits in

California. Small agricultural service firms, which includes handlers,

have been defined by the Small Business Administration (13 CFR 121.601)

as those whose annual receipts are less than $5,000,000. Small

agricultural producers are defined as

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those having annual receipts of less than $500,000.

The NAC and PCC staff have estimated that there are less than 20

handlers in the industry who could be defined as other than small

entities. If the average handler price received were $9.00 per box or

box equivalent of nectarines or peaches, a handler would have to ship

at least 555,000 boxes to have annual receipts of $5,000,000. Small

handlers represent approximately 94 percent of the handlers within the

industry. In addition, the NAC and PCC staff estimates that there are

approximately 400 producers who could be defined as other than small

entities. If the average producer price received were $6.00 per box or

box equivalent for nectarines and $5.65 per box or box equivalent for

peaches, producers would have to produce approximately 84,000 boxes or

box equivalents of nectarines and approximately 89,000 boxes or box

equivalents of peaches to have annual receipts of $500,000. Therefore,

small producer entities represent approximately 78 percent of the

producers within the industry. For those reasons, a majority of the

handlers and producers may be classified as small entities.

Under Secs. 916.52 and 917.41 of the orders, grade, size, maturity,

and container and pack requirements are established for fresh shipments

of California nectarines and peaches, respectively. Such requirements

are in effect on a continuing basis. This proposed rule would revise

current requirements to: (1) Require that maturity and ``CA Utility''

quality marking of containers be a minimum of \3/8\ inch in height; (2)

require that experimental containers and 22G containers be marked with

both the size and the count of fruit contained in the package; (3)

require that master containers of consumer packages be marked with the

minimum size fruit contained in the consumer packages; (4) add weight

counts for early-season, mid-season, and late-season varieties; (5)

continue shipments of ``CA Utility'' quality nectarines and peaches,

and increase the percentage of U.S. No. 1 nectarines and peaches

permitted in containers of ``CA Utility quality'' fruit from the

current 30 percent to 40 percent, provided that the additional 10

percent of U.S. No. 1 fruit in the container has non-scoreable

blemishes; and (6) revise varietal maturity and size requirements to

reflect recent changes in growing and marketing conditions.

In Secs. 916.350 and 917.442 of the rules regulating nectarines and

peaches several container marking requirements are specified. This

proposal would specify that the maturity markings U.S. Mature (US MAT)

and California Well-Matured (CA WELL MAT), and the markings for ``CA

Utility'' quality must be in lettering a minimum of 3/8 inch in height.

This would standardize the container markings for nectarines and

peaches and would be consistent with those used on plum containers.

Plum shipments are regulated under a State marketing order. Because

nectarine and peach handlers frequently handle plums, as well, this

would ensure consistency in marking requirements for all three

commodities, which is expected to benefit handlers.