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

Federal RegisterApr 19, 1999

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 916 and 917

[Docket No. FV99-916-2 FR]

Nectarines and Peaches Grown in California; Revision of Handling

Requirements for Fresh Nectarines and Peaches

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule revises 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 also authorizes

continued shipments of ``CA Utility''

[[Page 19023]]

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 will enable handlers to continue shipping fresh nectarines and

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

and consumers of these fruits.

EFFECTIVE DATE: This final rule becomes effective April 20, 1999.

FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist,

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 final rule 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 final rule 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 final rule revises 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 proposed continuing to allow

such shipments during 1999, and invited written comments from all

interested persons. One comment supporting the continued shipment of

``CA Utility'' quality fruit was received.

The changes implemented by this final rule: (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 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 were

dormant. The committees will recommend a crop estimate at their

meetings in early spring. However, the committees continue to believe

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.

[[Page 19024]]

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 final rule revises 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 rule also revises 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 changes 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 is 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 will 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 by 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, are 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 are 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

is also 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 within that package,

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 sized fruit. For example, a master container will

be marked ``Minimum size 60 and larger'' or ``Minimum size 96 and

larger,'' as appropriate, 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.

According to a comment received regarding this aspect of the

proposed rule issued on these regulatory changes, the intent of the

committees was to ensure that when multiple sizes of consumer packages

of nectarines or peaches are contained within the master container, the

master container must be marked ``Minimum size 60 and larger,'' or

``Minimum size 96 and larger,'' etc., as appropriate. However, the

commenter noted, the proposed rule did not specify that when the master

container does not contain multiple sizes of nectarines or peaches in

the consumer packages, only the size of the nectarines or peaches in

the consumer packages should be marked on the master container, such as

``Size 60,'' or ``Size 96,'' etc., as appropriate. Accordingly, the

clarification to the proposed rule is made.

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

of Sec. 917.442 of the orders' rules and regulations are revised to

require that the markings on master containers containing consumer

packages of different sizes of nectarines and peaches specify the

smallest size and the words ``and larger'' in the packages. When

consumer packages contain nectarines or peaches of the same sizes, the

master container shall

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continue to be marked with the appropriate individual size marking.

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

of 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 revised 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 will 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 the fruit in such containers meeting certain

relaxed quality requirements. ``CA Utility'' quality is a lower-quality

fruit than U.S. No. 1. Previously, the requirement for containers of

``CA Utility'' nectarines and peaches provided that not more than 30

percent of the fruit in any container meet or exceed the requirements

of U.S. No. 1. This final rule permits handlers to continue shipping

``CA Utility'' fruit during the 1999 season, and increases 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 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

[[Page 19026]]

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 proposed continuing to allow

such shipments during 1999 and invited written comments from all

interested persons in the proposed rule. One comment supporting the

proposal was received.

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 has determined that continuing to

allow 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 effectuates the declared policy of the Act.

Therefore, paragraphs (d) of Secs. 916.350 and 917.442, and paragraphs

(a)(1) of Secs. 916.356 and 917.459 are 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 was proposed to be removed from both sections. In this

final rule, ``Table 1'' is, therefore, removed. The latter table is

referred to as ``Table 1'' in the remainder of this document.

The maturity 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 final rule.

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

specified in Sec. 916.356 of the order's rules and regulations. Table 1

to paragraph (a)(1)(iv) of Sec. 916.356 is 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 is 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 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). Section 916.356 is revised to establish variety-

specific size requirements for five nectarine varieties that were

produced in commercially-significant quantities of more than

[[Page 19027]]

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 is 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 is revised to include the Grand Pearl,

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

This final rule also revises 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 is also 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. The

introductory text of paragraph (a)(4) is revised to remove the June

Brite and Pacific Star nectarine varieties; and the introductory text

of paragraph (a)(6) is 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 final rule establishes 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 is

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 provided 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 is 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 revised to include

the Super Rich peach variety; the introductory text of paragraph (a)(4)

is revised to include the Snow Dance peach variety; and the

introductory text of paragraph (a)(6) is also 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 are

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) is revised to

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

introductory text of paragraph (a)(6) of Sec. 917.459 is 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 final rule establishes 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 final 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 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

[[Page 19028]]

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 final rule revises the

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

final rule specifies 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 standardizes the container markings for nectarines and

peaches and is 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.