Avocados Grown in South Florida and Imported Avocados; Change in Maturity Requirements

SUPPLEMENTARY INFORMATION:

This action, pursuant to 5 U.S.C. 553, proposes to amend regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j). This proposed rulemaking is issued under Marketing Order No. 915, as amended (7 CFR part 915), regulating the handling of avocados grown in South Florida. Part 915 referred to as the “Order” is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Committee locally administers the Order and is comprised of growers and handlers of avocados operating within the production area, and one public member.

This proposed rulemaking is also issued under section 8e of the Act (7 U.S.C. 608e-1), which provides that whenever certain specified commodities, including avocados, are regulated under a Federal marketing order, imports of these commodities into the United States are prohibited unless they meet the same or comparable grade, size, quality, or maturity requirements as those in effect for domestically produced commodities.

The Agricultural Marketing Service (AMS) is issuing this proposed rulemaking in conformance with Executive Orders 12866, 13563, and 14094. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 14094 reaffirms, supplements, and updates Executive Order 12866 and further directs agencies to solicit and consider input from a wide range of affected and interested parties through a variety of means. This proposed action falls within a category of regulatory actions that the Office of Management and Budget (OMB) exempted from Executive Order 12866 review.

This proposed rulemaking has been reviewed under Executive Order 13175—Consultation and Coordination with Indian Tribal Governments, which requires Federal agencies to consider whether their rulemaking actions would have Tribal implications. AMS has determined that this proposed rulemaking is unlikely to have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.

This proposed rulemaking has been reviewed under Executive Order 12988—Civil Justice Reform. This rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 8c(15)(A) of the Act (7 U.S.C. 608c(15)(A)), any handler subject to an order may file with the U.S. Department of Agriculture (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. Such 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.

There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of import regulations issued under section 8e of the Act.

This proposed rulemaking would change the maturity requirements prescribed under the Order. This action would update the avocado maturity shipping schedule to allow certain sizes and weights of the Beta avocado variety to be shipped to the fresh market earlier than presently allowable. With this change, the maturity schedule would better reflect the current maturity rate for the Beta variety, facilitating the shipment of this variety as it matures. The proposal was unanimously recommended by the Committee at its August 9, 2023, meeting.

Section 915.51 of the Order provides, in part, authority to establish maturity requirements for avocados. Section 915.52 of the Order provides authority for the modification, suspension, or termination of established regulations. Section 915.332 of the Order's rules and regulations establishes the maturity requirements for avocados grown in Florida. These requirements are specified in table I of § 915.332(a) and establish minimum weights and diameters to delineate specific shipping time frames for avocados shipped under the Order. Maturity requirements for avocados imported into the United States are currently in effect under § 944.31.

The maturity requirements are designed to prevent the shipment of immature avocados and to include the annual shipping schedule to help ensure only mature fruit reaches the market. This helps to provide buyer confidence and consumer satisfaction essential for the successful marketing of the crop. Avocado varieties mature at different times, and varieties can vary considerably in terms of size and weight. The maturity requirements for the various varieties of avocados are different, as each variety has different growing and maturation characteristics. These maturity dates and requirements are established based on a testing procedure developed in conjunction with USDA.

The shipping schedule in table I specifies the individual maturity requirements for the numerous avocado varieties shipped each season. As larger fruit within a variety matures earliest, the schedule makes the larger sized fruit available for market first, followed by other dates to incrementally release smaller sizes for shipment as they mature. As such, the maturity schedule is usually divided into A, B, C, and D dates, which are associated with specific weights and sizes reflecting when a particular variety matures.

Avocados may not be shipped until the earliest date, the A date, specified for that variety on the shipping schedule so that only mature fruits are available for market for each variety early in its season. The D date marks the end of a variety's season when all fruit of that variety should be mature and releases all sizes and weights for shipment.

The Committee staff regularly tests the maturity level of different varieties based on reported changes in maturity. The Committee also has a maturity subcommittee that reviews this, other information, and trends in maturity. Using this information, this subcommittee recommends which varieties may need to be tested to see if adjustments need to be made to the dates on the maturity schedule. The subcommittee heard from growers that the Beta variety was maturing ahead of the established schedule and recommended to the full Committee that the Beta variety be tested for changes in maturity. At the direction of the Committee, Committee staff began sampling the Beta variety across different farms and testing the level of maturity.

After three years of testing, the Committee staff provided the subcommittee with the maturity data they had collected. Based on their review of the data, the subcommittee agreed the fruit was maturing before the current shipping dates. They reported to the full Committee that due to changes in climate conditions and cultural practices the Beta variety was maturing earlier than the dates in the schedule.

The Committee met on August 9, 2023, and reviewed the report from the subcommittee. The subcommittee recommended, and the full Committee agreed, that the A, B, C, and D dates for the Beta should each be moved up two weeks, respectively. The Committee concluded these revised dates would better reflect the current maturity rate for Beta. The Committee believes this change would allow growers to send mature quality fruit of this variety to the market earlier. It would also reduce limb breakage and fruit loss by enabling timely harvesting, allowing the larger, heavier fruit to be removed from the tree sooner. Consequently, the Committee unanimously approved this recommendation.

This rule would change the A and the B date for Beta listed on the maturity schedule from August 8 to July 25 and from August 15 to August 1, respectively. This rule would also change the C date for Beta from August 29 to August 15, and the D date from September 5 to August 22. The corresponding sizes and weights associated with these dates will remain unchanged. The dates on the maturity schedule are the basis for calculating the actual shipping dates (A, B, C, D dates) for each individual season. The actual shipping dates for an individual year are established as the Monday nearest to the date listed in the maturity schedule as specified in § 915.332.

Section 8e of the Act provides that when certain domestically produced commodities, including avocados, are regulated under a Federal marketing order, imports of that commodity must meet the same or comparable grade, size, quality, and maturity requirements. Maturity requirements for avocados imported into the United States are currently in effect under § 944.31. As this rule would revise the maturity requirements for the Beta variety under the domestic handling regulations, a corresponding change to the import regulations must also be considered.

This action would update the avocado maturity shipping schedule to allow certain sizes and weights of the Beta avocado variety to be shipped to the fresh market up to two weeks earlier than presently allowed. This change should facilitate moving mature fruit to the market, benefitting domestic growers and handlers as well as importers. This proposed change would only impact the maturity requirements under the Order and the import regulation and would make no change to the current grade requirements.

The Hass, Fuerte, Zutano, and Edranol varieties of avocados are currently exempt from the maturity requirements under the Order and the import regulation and continue to be exempt under this rule. However, these varieties are not exempt from the grade regulations specified under the Order and import regulation, which are not being changed by this action.

Initial Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of this proposed rulemaking 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 businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are 201 growers of Florida avocados in the production area and 21 handlers subject to regulation under the Order. The Small Business Administration (SBA) defines small agricultural growers as those having annual receipts of no more than $3,500,000 for Other Noncitrus Fruit Farming (NAICS code 111339), and small agricultural service firms, including handlers, are defined as those whose annual receipts are less than $34,000,000 for Postharvest Crop Activities (NAICS code 115114) (13 CFR 121.201).

According to the National Agricultural Statistical Service (NASS), the average grower price paid for Florida avocados in 2022 was $22.00 per 55-pound bushel container. Utilized production was equivalent to 648,727 55-pound bushels for a total value of $14,272,000 ($22.00 multiplied by 648,727 55-pound bushels equals $14,272,000). Dividing the crop value by the estimated number of growers yields an estimated average receipt per grower of $71,005 ($14,272,000 divided by 201), so the majority of growers would have annual receipts of less than $3,500,000.

USDA Market News reported average shipping point prices for green skinned avocados were $57.29 per 55-pound bushel equivalent in October of 2022. Using this price and the total utilization, the total 2022 handler crop value is estimated at $37,165,570 ($57.29 multiplied by 648,727 55-pound bushels equals $37,165,570). Dividing this figure by the number of handlers yields estimated average annual handler receipts of $1,769,790 ($37,165,570 divided by 21), which is below the SBA threshold for small agricultural service firms.

In 2022, the Dominican Republic, Peru, Columbia, Mexico, and Jamaica were the major countries exporting avocado varieties other than Hass to the United States. In 2020, shipments of these types of avocados imported into the United States totaled around 33,454 metric tons. Of that amount, about 33,075 metric tons were imported from the Dominican Republic. Information from USDA's Global Agricultural Trade System database indicates the dollar value of these avocados to be approximately $48,386,000. There are approximately 20 importers of green skin avocados. Using the total value and the number of importers, the average importer would have annual receipts of less than $34 million.

Based on these estimates, the majority of Florida avocado producers and handlers, and importers may be classified as small entities.

This proposed rulemaking would update the avocado maturity shipping schedule to allow certain sizes and weights of the Beta avocado variety to be shipped to the fresh market up to two weeks earlier than presently allowed. With this change, the maturity schedule would better reflect the current maturity rate for the Beta variety, facilitating the shipment of this variety as it matures, which would benefit growers, handlers, importers, and consumers. A corresponding change would be made to the import regulations. This proposed rulemaking would revise § 915.332. Authority for this change is provided in §§ 915.51 and 915.52. This proposed rulemaking would also change § 944.31 in the avocado import regulation, as is required by section 8e of the Act. This proposed change would only impact the maturity requirements under the Order and import regulation and would make no change to the current grade requirements.

This action is not expected to increase the costs associated with the Order's requirements or the avocado import regulation. Rather, it is anticipated that this action would have a beneficial impact. Based on three seasons of maturity testing, the Committee recommended moving the A, B, C, and D dates on the maturity schedule forward two weeks, respectively, for the Beta variety allowing the associated sizes and weights to be shipped to the fresh market earlier. The revised dates better reflect the current maturity rate for Beta and would facilitate the shipment of this variety as it matures, while continuing to ensure that only mature fruit is shipped to the fresh market. It would also help reduce limb breakage and fruit loss and their associated costs by enabling timely harvesting, allowing the bigger, heavier fruit to be removed from the tree sooner. The benefits of this rule are expected to be equally available to all fresh avocado growers, handlers, and importers, regardless of their size.

One alternative to this action would be to maintain the current maturity requirements for the Beta variety. However, the Committee recognized that growing conditions and practices have changed over the years and the data indicates this fruit is maturing ahead of the current dates on the schedule. The Committee believes establishing the changes in this proposed rulemaking, rather than the alternative, would reflect current maturation and help ensure a quality product reaches consumers. Therefore, the Committee rejected this alternative.

The Committee's meetings are widely publicized throughout the Florida avocado industry and all interested persons are invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings, the August 9, 2023, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit comments on this proposed rulemaking, including the regulatory impacts of this action on small businesses.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the Order's information collection requirements have been previously approved by OMB and assigned OMB No. 0581-0189 Fruit Crops. No changes in those requirements would be necessary as a result of this proposed rulemaking. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rulemaking would not impose any additional reporting or recordkeeping requirements on either small or large Florida avocado handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

AMS has not identified any relevant Federal rules that duplicate, overlap, or conflict with this proposed rulemaking.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: https://www.ams.usda.gov/rules-regulations/moa/small-businesses. Any questions about the compliance guide should be sent to Richard Lower at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

After consideration of all relevant material presented, including the information and recommendations submitted by the Committee and other available information, USDA has determined that this proposed rulemaking is consistent with and would effectuate the purposes of the Act.

In accordance with section 8e of the Act, the United States Trade Representative has concurred with the issuance of this proposed rulemaking.

A 60-day comment period is provided to allow interested persons to comment on this proposed rulemaking. All written comments timely received will be considered before a final determination is made on this rule.

For the reasons set forth in the preamble, the Agricultural Marketing Service proposes to amend 7 CFR parts 915 and 944 as follows:

1. The authority citation for 7 CFR part 915 continues to read as follows:

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

2. In § 915.332, Table I, the entry for “Beta” is revised to read as follows:

(a) * * *

(2) * * *