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Avocados Grown in South Florida; Revisions to Grade and Container Requirements
Nov 12, 2008 (Agriculture Department Documents and Publications/ContentWorks via COMTEX) --
SUMMARY: This rule changes the grade and container requirements currently prescribed under the marketing order for avocados grown in South Florida (order). The order regulates the handling of avocados grown in South Florida and is administered locally by the Avocado Administrative Committee (Committee). This change establishes a minimum grade of a U.S. No. 2 for shipments within the production area, requiring these shipments to meet the same grade as currently prescribed for shipments leaving the production area. This rule also makes changes to the container and container marking requirements under the order. These changes provide a grade and a pack to meet consumer demand and improve the identification and traceability of avocado shipments.
EFFECTIVE DATE: Effective Date: November 13, 2008.
FOR FURTHER INFORMATION CONTACT: William G. Pimental, Marketing Specialist, or Christian D. Nissen, Regional Manager, Southeast Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone: (863) 324-3375, Fax: (863) 325-8793 or E-mail: William.Pimental@usda.gov or Christian.Nissen@usda.gov.
Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or E-mail: Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing Order No. 915, as amended (7 CFR part 915), regulating the handling of avocados grown in South Florida, 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 (USDA) 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 USDA 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, USDA 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 USDA'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 changes the grade and container requirements currently prescribed under the order. This rule establishes a minimum grade of a U.S. No. 2 for shipments within the production area, requiring these shipments to meet the same grade as currently prescribed for shipments leaving the production area. This final rule also makes changes to the container and container marking requirements established under the order. These changes provide a grade and pack to meet consumer demand and improve the identification and traceability of avocado shipments. These changes were unanimously recommended by the Committee during a number of meetings over the past several months.
Section 915.51 of the order provides, in part, the authority to issue regulations establishing specific grade and container requirements for avocados. Section 915.52 of the order provides the authority for the modification, suspension or termination of established regulations. The requisite grade and container requirements are specified under SUBSEC 915.305 and 915.306. These sections specify, in part, the grade, container, and container marking requirements for fresh shipments of avocados grown in South Florida.
Standard containers refer to those containers specifically authorized in SEC 915.305(a), which can be used for shipments both inside and outside of the production area. Nonstandard containers refer to containers other than those authorized in SEC 915.305(a), and can only be used when shipping avocados within the production area.
This final rule makes several changes to the grade and container provisions established under the order. This rule establishes a minimum grade of a U.S. No. 2 for all avocados sold within the production area. It also requires that all nonstandard containers used for shipments within the production area be one bushel in size and that these containers be marked with the registered handler number or the name and address of the handler. This final rule also requires that all avocados sold be packed in new containers and that the containers be marked with the grade packed.
The first change establishes a minimum grade of a U.S. No. 2 for all avocados sold within the production area. Prior to this change, only avocados handled in standard containers had to meet the grade requirement of a U.S. No. 2. Avocados sold within the production area in nonstandard containers were not required to meet a minimum grade. This rule modifies SEC 915.306 so that all avocados sold to the fresh market in the production area, regardless of what type of container, must meet the minimum grade requirement of a U.S. No. 2.
In 1992, Hurricane Andrew decimated the Florida avocado production area leaving both avocados and containers in short supply. The industry recommended that the grade requirement be suspended for avocados sold within the production area in containers other than the standard containers defined in SEC 915.305. This change made more fruit available for shipment and allowed handlers to pack fruit in any obtainable container for shipment within the production area.
The industry has since recovered from the devastation caused by the hurricane. Production for the 2007-08 season was approximately 1.1 million bushels of avocados, nearly matching the level of production prior to Hurricane Andrew. However, since the grade change made following the hurricane, avocados shipped within the production area in nonstandard containers have not had to meet any specific grade requirements.
At the time of Hurricane Andrew, avocado shipments to production area markets accounted for around 12 percent of total shipments. Since that time, shipments to the production area have nearly doubled. For the last five seasons, shipments to the production area have accounted for around 23 percent of total shipments, making the production area one of the largest markets for Florida avocados.
In discussing this issue, Committee members stated that the absence of a grade requirement has resulted in poor quality avocados being offered for sale inside the production area. The past few seasons, the Committee office and members of the industry have been receiving an increasing number of negative comments regarding the quality of fruit sold in the production area. These comments indicate there is an increasing demand for higher quality fruit within the production area.
Production area produce buyers and brokers are looking for higher quality fruit to meet the demands of production area consumers. However, buyers have expressed that without a minimum grade requirement it is difficult to know the quality of the avocados being purchased. The level of quality received varies between good and poor quality. In an effort to address this issue, several handlers have already begun packing to meet a U.S. No. 2 for all their production area shipments. Still, absent a minimum grade requirement, avocados that would not meet a U.S. No. 2 are still making it to production area fresh market channels.
The Committee believes these poor quality avocados have depressed prices for better quality avocados and resulted in lower overall returns to producers. Poor quality fruit normally returns the lowest price when compared to quality fruit. Because there is no minimum grade requirement for nonstandard containers, buyers are often unsure of the level of quality they are purchasing. This tends to drive the price offered towards the lowest level for all avocados. Further, when a consumer purchases a poor piece of fruit, it can affect repurchases, reducing demand. Reduced demand also has a negative effect on price.
The Committee believes eliminating lower grade avocados from the marketplace addresses consumer demand, and helps ensure the industry is providing all their customers with a quality product. This encourages repeat purchases, which helps increase returns to producers and handlers. The Committee agreed this change will strengthen market conditions for shipments within the production area. Therefore, the Committee recommended establishing a minimum grade of a U.S. No. 2 for all avocados sold to markets within the production area.
This rule also makes changes to the container marking requirements established under the order. Prior to this action, the only container marking requirement for nonstandard containers was that the containers be marked with a Federal State Inspection Service (FSIS) lot stamp number, which is applied to an adhesive tape seal affixed to the container. While the lot stamp indicates the date the product was inspected, it does not provide any information that would identify the handler. Some handlers pay to have the adhesive tape seal preprinted with their registered handler number, and this number can be used to identify the handler. However, this is not the case for all handlers.
The Committee is concerned that the use of containers with no identifying markings poses problems with the positive identification and traceability of avocados. Such containers are almost impossible to trace back to the original handler. In cases such as marketing order compliance, it is important to be able to identify the source of avocados which are found to be in violation of order requirements. Committee members agreed that the ability to positively identify product and trace its origin is a necessity in today's marketplace. Proper handler identification on a container is an important part of this traceability.
--This is a summary of a Federal Register article originally published on the page number listed below--
Final rule.
CFR Part: "7 CFR Part 915"
Citation: "73 FR 66715"
Document Number: "Docket No. AMS-FV-08-0022; FV08-915-1 FR"
Federal Register Page Number: "66715"
"Rules and Regulations"
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