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Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Proposed Rules As part of their discussions, the Board also provided clarifying information on how to calculate inventory age for reporting purposes. To determine product age, the date used would either be the date of harvest and processing or date of remanufacturing. Board members emphasized the starting point for calculating inventory age would be reset if the inventory were remanufactured into a new product.
For example, if a handler was completing their routine inventory report on May 31, 2021, any tart cherries harvested in 2014 or earlier would be considered over five years old. Although cherries harvested in 2014 would be considered part of the 201415 harvest year, based on the date they were harvested and processed, they would be greater than five years old for reporting purposes by the end of May 2021. If cherries harvested in 2014 were remanufactured into another product, the date of remanufacturing would become the date used for calculating the age for inventory purposes. The Board stated this is the same dating procedure as used for calculating the age of cherries held in reserve under volume regulation. Using these dates, inventory older than five years would be reported each May on the modified report.
Several members commented the age of inventory is already recorded by handlers as part of their normal business activities, and as a result, this requirement would not be overly burdensome. Members further expressed the separate reporting of inventory over five years old would, at most, require a few extra minutes of a handlers time and would only be required once annually.
Consequently, the Board voted to add a section to the inventory report to include the total volume of inventory over five years old. The Board recommended including this information on the inventory report for the reporting period ending May 31 due on June 10. The Board agreed this was the appropriate time to have the information available as this report would be used to develop the industry inventory data when the Board meets in June to consider the need to establish a volume control recommendation for the coming season.
This proposed rule would add sales and inventory report requirements to administrative provisions under the Order and would require handlers to report inventory older than five years.
These reporting requirements would be added in a new 930.170 and would include information on the handler submitting the form; the reporting period; beginning inventory for each
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product; the amount packed for each product; sales; information on transfers of product between handlers, including the name of the selling handler, name of the receiving handler, and form type, number of units; information on product repacked or remanufactured during the reporting period, including form type and number of units of source products and form type and number of units of end products; and information on the amount of ending inventory for each product, including the amount of ending inventory for each product over five years old. Only the May 31 report would require handlers to record amounts of inventories over five years old.
This information would support the industrys ability to make marketing decisions by providing more descriptive information than currently available when evaluating the need for volume regulation. Besides providing important information for industry reports regarding sales and inventory, this action would also help ensure compliance with this reporting requirement by including it in the rules and regulations under the Order.
Initial Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act RFA 5
U.S.C. 601612, AMS has considered the economic impact of this proposed rule 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 are unique in that they are brought about through group action of essentially small entities acting on their own behalf.
There are approximately 450
producers of tart cherries in the regulated area and approximately 40
handlers who are subject to the Order.
Small agricultural growers are defined by the Small Business Administration as those having annual receipts less than $1,000,000, and small agricultural service firms are defined as those whose annual receipts are less than $30,000,000 13 CFR 121.201.
According to information from the National Agricultural Statistics Service NASS and Board data, the average annual grower price for tart cherries during the 20192020 season was approximately $0.15 per pound. With total utilization at 236.34 million pounds, the total 201920 crop value is estimated at $35.45 million 236.34

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million pounds times $0.15. Dividing the crop value by the estimated number of producers 450 yields an estimated average receipt per producer of $78,778.
This is well below the SBA threshold for small producers.
A free-on-board FOB price of $0.82
per pound for processed tart cherries was derived from USDAs 2020
purchases of dried tart cherries at an average price of $4.11 per pound. The dried cherry price was converted to a raw product equivalent price at an industry recognized ratio of five to one.
Based on utilization, this price represents a good estimate of the price for processed cherries. Multiplying this FOB price $0.82 by total utilization of 236.34 million pounds results in an estimated handler-level tart cherry value of $193.8 million. Dividing this figure by the number of handlers 40 yields estimated average annual handler receipts of $4.84 million, which is below the SBA threshold for small agricultural service firms. Assuming a normal distribution, the majority of producers and handlers of tart cherries may be classified as small entities.
This proposed rule would add the sales and inventory report requirements to the administrative provisions under the Order and would require handlers to report inventory older than five years.
This proposed rule would establish a new 930.170 under the rules and regulations of the Order. The authority for this proposed action is provided in 930.70 of the Order.
AMS anticipates that this proposed rule would impose minimal, if any, additional costs on handlers or growers, regardless of their size. This action would impose a small increase in the reporting burden for each tart cherry handler. However, because handlers currently maintain data about the age of their inventory in the regular course of business, they should be able to readily access this information. Consequently, any additional costs associated with this change would be minimal not significant and apply equally to all handlers.
This proposed action should also benefit the entire industry by providing more precise information on tart cherry product in inventory. This information would provide accurate information regarding available inventory and help with marketing and planning for the industry. Further, having these requirements codified under the rules and regulations would also benefit compliance enforcement of this reporting requirement. The benefits of this rule are expected to be equally available to all tart cherry growers and handlers, regardless of their size.

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