DRAFT OF FEDERAL MARKETING ORDER READY FOR PECAN STAKEHOLDERS TO REVIEW


To view the full Federal Marketing Order for Pecans, click on the tab above “Pecan FMO“.

A SUMMARY OF KEY PROVISIONS OF THE 20-PAGE DRAFT FOLLOWS:

Section on Definitions

– defines the terms that are used throughout the order.

Key definitions:

  • 986.25 Improved pecans

Improved pecans are pecan varieties bred and/or selected for superior traits of nut size, ease of shelling, production habit, and resistance to certain insects and diseases. They include varieties released by the USDA-ARS pecan breeding station, state breeding stations, and proprietary nurseries. A non-exhaustive list of examples of improved varieties are Desirable, Elliot, Forkert, Sumner, Creek, Excel, Gloria Grande, Kiowa, Moreland, Sioux, Mahan, Mandan, Moneymaker, Morrill, Cunard, Zinner, Byrd, McMillan, Stuart, Pawnee, Eastern and Western Schley, Wichita, Success, Cape Fear, Choctaw, Cheyenne, Lakota, Kanza, Caddo, and Oconee. Improved varieties also include new patented varieties including, for example, Ellis, Gracross, and Eclipse.  A subcategory of improved pecans is Blends, defined in § 986.5.  All shall be classified and assessed as “improved pecans.”

  • 986.30 Native and seedling pecans

Native and seedling pecans mean pecan varieties that are harvested and sold from non-grafted or naturally propagated trees or orchards that shall be classified and assessed as “Natives or Seedlings”.

  • 986.36 Qualified grower

Qualified grower means any grower who produces a minimum of 50,000 pounds of inshell pecans during a representative period (average of four years) or any grower who owns a minimum of 30 pecan acres according to the FSA, including acres calculated by the FSA based on pecan tree density. In the absence of any FSA delineation of pecan acreage, the regular definition of an acre will apply.  The Council may recommend changes to this definition subject to the approval of the Secretary.

  • 986.37 Qualified sheller

Qualified sheller means a sheller handling more than 1,000,000 pounds of inshell pecans in a fiscal year.  The Council may recommend changes to this definition subject to the approval of the Secretary.

  • 986.38 Regions

  • Regions within the production area shall consist of the following:

(1) Eastern Region, consisting of: Georgia, Florida, Alabama, North Carolina, South Carolina

(2) Central Region, consisting of: Texas, Oklahoma, Louisiana, Mississippi, Arkansas, Missouri, Kansas

(3) Western Region, consisting of: New Mexico, Arizona, California

  • 986.44 Substandard pecans

Substandard pecans means pecans that are blowouts, cracks, stick-tights, and other inferior quality nuts that, with further processing, can be cleaned and eventually enter into the commercial pecan trade.

The Section on Administrative Body:

ADMINISTRATIVE BODY

  • 986.50 American Pecan Council

The American Pecan Council is hereby established consisting of 17 members selected by the Secretary, each of whom shall have an alternate member nominated and selected in the same way and with the same qualifications as the member. The 17 members shall include nine (9) grower seats, six (6) sheller seats, and two (2) at-large seats allocated to one accumulator and one public member. The grower and sheller nominees and their alternates shall be qualified growers and qualified shellers at the time of their nomination and for the duration of their tenure.  Grower and sheller members and their alternates shall be selected by the Secretary from nominees submitted by the Council. The two at-large seats shall be nominated by the Council and appointed by the Secretary.

(a) Each region shall be allocated the following member seats:

(1) Eastern Region: three (3) growers and two (2) shellers

(2) Central Region: three (3) growers and two (2) shellers

(3) Western Region: three (3) growers and two (2) shellers

(b) Within each region, the grower and sheller seats shall be defined as follows:

(1) Grower seats:  Each region shall have a grower Seat 1 and Seat 2 allocated to growers whose acreage is equal to or exceeds 176 pecan acres.  Each region shall also have a grower Seat 3 allocated to a grower whose acreage does not exceed 175 pecan acres.

(2) Sheller seats: Each region shall have a sheller Seat 1 allocated to a sheller who handles more than 12.5 million pounds of inshell pecans in the fiscal year preceding nomination, and a sheller Seat 2 allocated a sheller who handles less than or equal to 12.5 million pounds of inshell pecans in the fiscal year preceding nomination.

(c) The Council may recommend, subject to the approval of the Secretary, revisions to the above requirements for grower and sheller seats to accommodate changes within the industry.

  • 986.51 Council nominations and voting

Nomination of Council members and alternate members shall follow the procedure set forth in this section, or as may be changed as recommended by the Council and approved by the Secretary. All nominees must meet the requirements set forth in §§ 986.50, American Pecan Council, and 986.51b, Eligibility, or as otherwise identified by the Secretary, to serve on the Council.

(a) Initial members. Nominations for initial Council members and alternate members shall be conducted by the Secretary by either holding meetings of qualified shellers and qualified growers, by mail, or by email, and shall be submitted on approved nomination forms.  Eligibility to cast nomination ballots, accounting of nomination ballot results, and identification of member and alternate nominees shall follow the procedures set forth in this section, or by any other criteria deemed necessary by the Secretary.  The Secretary shall select and appoint the initial members and alternate members of the Council.

(b) Successor members. Subsequent nominations of Council members and alternate members shall be conducted as follows:

(1) Call for nominations.

(i) Nominations for the grower member seats for each region shall be received from qualified growers in that region on approved forms containing the information stipulated in this section.

(ii) If a qualified grower is engaged in producing pecans in more than one region, such grower shall nominate in the region in which they grow the largest volume of their production.

(iii) Nominations for the sheller member seats for each region shall be received from qualified shellers in that region on approved forms containing the information stipulated in this section.

(iv) If a qualified sheller is engaged in handling in more than one region, such sheller shall nominate in the region in which they shelled the largest volume in the preceding fiscal year.

(2) Voting for nominees.

(i) Only qualified growers, through duly authorized officers or employees of qualified growers, if applicable, may participate in the nomination of grower member nominees and their alternates.  Each qualified grower shall be entitled to cast only one nomination ballot for each of the three grower seats in their region.

(ii) If a qualified grower is engaged in producing pecans in more than one region, such grower shall cast their nomination ballot in the region in which they grow the largest volume of their production. Notwithstanding this stipulation, such grower may vote their volume produced in any or all of the three regions.

(iii) Only qualified shellers, through duly authorized officers or employees of qualified shellers, if applicable, may participate in the nomination of the sheller member nominees and their alternates. Each qualified sheller shall be entitled to cast only one nomination ballot for each of the two sheller seats in their region.

(iv) If a qualified sheller is engaged in handling in more than one region, such sheller shall cast their nomination ballot in the region in which they shelled the largest volume in the preceding fiscal year. Notwithstanding this stipulation, such sheller may vote their volume processed in all three regions.

(v) If a person is both a qualified grower and a qualified sheller of pecans, such person may not participate in both grower and sheller nominations.  Such person must elect to participate either as a grower or a sheller.

(3) Nomination procedure for grower seats.

(i) The Council shall mail to all qualified growers who are on record with the Council within the respective regions a grower nomination ballot indicating the nominees for each of the three grower member seats, along with voting instructions. Qualified growers may cast ballots on the proper ballot form either at meetings of growers, by mail, or by email as designated by the Council.  For ballots to be considered, they must be submitted on the proper forms with all required information, including signatures.

(ii) On the ballot, qualified growers shall indicate their nomination for the grower seats and also indicate their average annual volume of inshell pecan production for the preceding four fiscal years.

(iii) Seat 1 (qualified growers with equal to or more than 176 acres of pecans). The nominee for this seat in each region shall be the grower receiving the highest volume of production votes from the respective region, and the grower receiving the second highest volume of production votes shall be the alternate member nominee for this seat. In case of a tie vote, the nominee shall be selected by a drawing.

(iv) Seat 2 (qualified growers with equal to or more than 176 acres of pecans). The nominee for this seat in each region shall be the grower receiving the highest number of votes from their respective region, and the grower receiving the second highest number of votes shall be the alternate member nominee for this seat. In case of a tie vote, the nominee shall be selected by a drawing.

(v) Seat 3 (qualified grower with 175 or fewer acres of pecans). The nominee for this seat in each region shall be the grower receiving the highest number of votes from the respective region, and the grower receiving the second highest number of votes shall be the alternate member nominee for this seat. In case of a tie vote, the nominee shall be selected by a drawing.

(4) Nomination procedure for sheller seats.

(i) The Council shall mail to all qualified shellers who are on record with the Council within the respective regions the sheller ballot indicating the nominees for each of the two sheller member seats in their respective regions, along with voting instructions. Qualified shellers may cast ballots on approved ballot forms either at meetings of shellers, by mail, or by email as designated by the Council. For ballots to be considered, they must be submitted on the approved forms with all required information, including signatures.

(ii) Seat 1 (qualified shellers handling more than 12.5 million lbs. of inshell pecans in the preceding fiscal year).  The nominee for this seat in each region shall be assigned to the sheller receiving the highest number of votes from the respective region, and the sheller receiving the second highest number of votes shall be the alternate member nominee for this seat. In case of a tie vote, the nominee shall be selected by a drawing.

(iii) Seat 2 (qualified shellers handling equal to or less than 12.5 million lbs. of inshell pecans in the preceding fiscal year).  The nominee for this seat in each region shall be assigned to the sheller receiving the highest number of votes from the respective region, and the sheller receiving the second highest number of votes shall be the alternate member nominee for this seat. In case of a tie vote, the nominee shall be selected by a drawing.

(5) Reports to the Secretary. Nominations in the foregoing manner received by the Council shall be reported to the Secretary on or before 15 of each July of any year in which nominations are held, together with a certified summary of the results of the nominations and other information deemed by the Council to be pertinent or requested by the Secretary. From those nominations, the Secretary shall select the fifteen grower and sheller members of the Council and an alternate for each member. If the Council fails to report nominations to the Secretary in the manner herein specified, the Secretary may select the members without nomination. If nominations for the public and accumulator at-large members are not submitted by September 15th of any year in which their nomination is due, the Secretary may select such members without nomination.

(6) At-large members.

The grower and sheller members of the Council shall select one public member and one accumulator member and respective alternates for consideration, selection and appointment by the Secretary.  The public member and alternate public member may not have any financial interest, individually or corporately, or affiliation with persons vested in the pecan industry.  The accumulator member and alternate accumulator member must meet the criteria set forth in § 986.1, Accumulator, and may reside or maintain a place of business in any region.

(7) Nomination forms. The Council may distribute nomination forms at meetings, by mail, by email, or by any other form of distribution recommended by the Council and approved by the Secretary.

(i) Grower nomination forms: Each nomination form submitted by a qualified grower shall include the following information:

(A) The name of the nominated qualified grower

(B) The name and signature of the nominating grower

(C) Two additional names and respective signatures of qualified growers in support of the nomination

(D) Any other such information recommended by the Council and approved by the Secretary

(ii) Sheller nomination forms: Each nomination form submitted by a qualified sheller shall include the following:

(A) The name of the nominated qualified sheller

(B) The name and signature of the nominating sheller

(C) One additional name and signature of a qualified sheller in support of the nomination

(D) Any other such information recommended by the Council and approved by the Secretary

(8) Changes to the nomination and voting procedures.

The Council may recommend, subject to the approval of the Secretary, a change to these procedures should the Council determine that a revision is necessary.

Section on Expenses, Assessments And Marketing Policy

EXPENSES, ASSESSMENTS AND MARKETING POLICY

  • 986.60 Budget

As soon as practicable before the beginning of each fiscal year, and as may be necessary thereafter, the Council shall prepare a budget of income and expenditures necessary for the administration of this part. The Council may recommend a rate of assessment calculated to provide adequate funds to defray its proposed expenditures. The Council shall present such budget to the Secretary with an accompanying report showing the basis for its calculations.

  • 986.61 Assessments

(a) Each handler who first handles inshell pecans shall pay assessments to the  Council.  Assessments collected each fiscal year shall defray expenses which the Secretary finds reasonable and likely to be incurred by the Council during that fiscal year.  Each handler’s share of assessments paid to the Council shall be equal to the ratio between the total quantity of inshell pecans handled by them as the first handler thereof during the applicable fiscal year, and the total quantity of inshell pecans handled by all regulated handlers in the production area during the same fiscal year. The payment of assessments for the maintenance and functioning of the Council may be required under this part throughout the period it is in effect irrespective of whether particular provisions thereof are suspended or become inoperative. Handlers may avail themselves of the Inter-handler transfer, as provided for in 986.62.

(b) Based upon a recommendation of the Council or other available data, the Secretary shall fix three base rates of assessment for inshell pecans handled during each fiscal year. Such base rates shall include one rate of assessment for any or all varieties of pecans classified as native and seedling; one rate of assessment for any or all varieties of pecans classified as improved; and one rate of assessment for any or all varieties of pecans classified as substandard.

(c) Upon implementation of this part and subject to the approval of the Secretary, initial assessment rates per classification shall be set within the following prescribed ranges:  Native and seedling classified pecans shall be assessed at one-cent to two-cents per pound; improved classified pecans shall be assessed at two-cents to three-cents per pound; and, substandard classified pecans shall be assessed at one-cent to two-cents per pound.  These assessment ranges shall be in effect for the initial four years of the order.

(d) Subsequent assessment rates shall not exceed two percent of the aggregate of all prices in each classification across the production area based on Council data, or the average of USDA reported average price received by growers for each classification, in the preceding production year as recommended by the Council and approved by the Secretary.  After four years from the implementation of this part, the Council may recommend, subject to the approval of the Secretary, revisions to this calculation or assessment ranges.

(e) The Council, with the approval of the Secretary, may revise the assessment rates if it determines, based on information including crop size and value, that the action is necessary, and if the revision does not exceed the assessment limitation specified in this section and is made prior to the final billing of the assessment.

(f) In order to provide funds for the administration of the provisions of this part during the first part of a fiscal year, before sufficient operating income is available from assessments, the Council may accept the payment of assessments in advance and may also borrow money for such purposes; Provided, That, no loan may amount to more than 50% of projected assessment revenue projected for the year in which the loan is secured and the loan must be repaid within five years.

(g) If a handler does not pay assessments within the time prescribed by the Council, the assessment may be increased by a late payment charge and/or an interest rate charge at amounts prescribed by the Council with approval of the Secretary.

(h) On August 31st of each year, every handler warehousing inshell pecans shall be identified as the first handler of those pecans and shall be required to pay the assessed rate on the category of pecans in their possession on that date. The terms of this paragraph may be revised subject to the recommendation of the Council and approval by the Secretary.

(i) On August 31st of each year, all inventories that growers are warehousing from the current fiscal year shall cease to be eligible for inter-handler transfer treatment.  Instead, such inventory will require the first handler that handles such inventory to pay the assessment thereon in accordance with the prevailing assessment rates at the time of transfer from the grower to the said handler.  The terms of this paragraph may be revised subject to the recommendation of the Council and approval by the Secretary.

  • 986.65 Marketing Policy

(a) By the end of each fiscal year, the Council shall make a report and recommendation to the Secretary on the Council’s proposed marketing policy for the next fiscal year. Each year such report and recommendation shall be adopted by the affirmative vote of at least two-thirds (2/3) of the members of the Council and shall include the following and, where applicable, on an inshell basis:

(1) Estimate of the grower-cleaned production and handler-cleaned production in the area of production for the fiscal year;

(2) Estimate of disappearance;

(3) Estimate of the improved, native, and substandard pecans;

(4) Estimate of the handler inventory on August 31, of inshell and shelled pecans;

(5) Estimate of unassessed inventory;

(6) Estimate of the trade supply, taking into consideration trade inventory, imports, and other factors;

(7) Preferable handler inventory of inshell and shelled pecans on August 31 of the following year;

(8) Projected prices in the new fiscal year;

(9) Competing nut supplies; and,

(10) Any other relevant factors.

Section on Authorities

AUTHORITIES RELATING TO RESEARCH, PROMOTION, DATA GATHERING, PACKAGING, GRADING, COMPLIANCE AND REPORTING

  • 986.70 Recommendations for regulations

Upon complying with §986.65, Marketing Policy, the Council may propose regulations to the Secretary whenever it finds that such proposed regulations may assist in effectuating the declared policy of the Act.

  • 986.71 Authority for research and promotion activities

The Council, with the approval of the Secretary, may establish or provide for the establishment of production research, product development, nutritional research, container development, marketing research and development projects, and marketing promotion, including paid advertising, designed to assist, improve, or promote the marketing, distribution, and consumption or efficient production of pecans. The expenses of such projects shall be paid from funds collected pursuant to this part.

  • 986.72 Authorities regulating handling

(a) The Council may recommend, subject to the approval of the Secretary, regulations that:

(1) Establish handling requirements or minimum tolerances for particular grades, sizes, or qualities, or any combination thereof, of any or all varieties of pecans during any period;

(2) Establish different handling requirements or minimum tolerances for particular grades, sizes, or qualities, or any combination thereof for different varieties, for different containers, for different portions of the production area, or any combination of the foregoing, during any period;

(3) Fix the size, capacity, weight, dimensions, or pack of the container or containers, which may be used in the packaging, transportation, sale, preparation for market, shipment, or other handling of pecans; and

(4) Establish inspection and certification requirements for the purposes of (a)(1) through (a)(3) of this section.

(b) Regulations issued hereunder may be amended, modified, suspended, or terminated whenever it is determined:

(1) That such action is warranted upon recommendation of the Council or other available information;

(2) That such action is essential to provide relief from inspection, assessment, or regulations under paragraph (a) of this section for minimum quantities less than customary commercial transactions; or,

(3) That regulations issued hereunder no longer tend to effectuate the declared policy of the Act.

(c) The authority to regulate as put forward in this subsection shall not in any way constitute authority for the Council to recommend volume regulation, such as reserve pools, producer allotments, or handler withholding requirements which limit the flow of product to market for the purpose of reducing market supply.

(d) The Council may recommend, subject to the approval of the Secretary, rules and regulations to effectuate this sub-part.