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Federal Register / Vol. 86, No. 242 / Tuesday, December 21, 2021 / Rules and Regulations
reporting periods ending November 30, February 28, May 31, and June 30, with reports for those periods due on December 10, March 10, June 10, and July 10, respectively. This information is submitted on CIAB Form 3 Sales/
Inventory Report as previously approved by OMB and assigned OMB
No. 05810177. The report includes information on the type, form, and the amount of product, but does not include data regarding the age of the products in inventory. The Board agreed the existing reporting requirements may limit their knowledge of the industrys on-hand tart cherry inventory and formed a subcommittee to review the inventory reporting requirements.
The Board reviewed the subcommittee findings at the January 14, 2021, meeting, and expressed support for the subcommittees recommendation to adjust reporting requirements to account for inventory greater than five years old. The Board noted a five-year inventory cutoff date was appropriate because this period would sufficiently accommodate the lifespans of nearly all existing products likely to be inventoried. Board members agreed having this additional information regarding the age of inventory would be beneficial.
The Order includes the authority for establishing volume regulation, and one element considered during those discussions is the amount of tart cherries available in inventory. The regulated season runs from July 1
through June 30. The current reporting aggregates the industrys inventory data and does not separately track older inventory, and this compilation could provide an incomplete view of the industrys marketable inventory. By segregating the accounting of inventory older than five years, the Board would have more precise information regarding inventory when discussing market issues.
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
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harvested and processed, they would be greater than five years old for reporting purposes by the end of May 2021. If the 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 rule adds sales and inventory report requirements to the administrative provisions under the Order and requires handlers to report inventory older than five years. These reporting requirements will be added in a new 930.170 and will include information on the handler submitting the form; the reporting period;
beginning inventory for each 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 the form and number of units of source products and the form 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 will require handlers to record the amount of inventory over five years old.
This information will support the industrys ability to make marketing
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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 will also help ensure compliance with this reporting requirement by including it in the rules and regulations under the Order.
Final 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 rule 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 businesses subject to such actions in order to ensure 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 SBA 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 201920 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
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
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