USDA Decreases Grape Assessment Rate $0.040 to $0.030

Content

ACTION:

Final rule.

SUMMARY:

This final rule implements a recommendation from the California Desert Grape Administrative Committee (Committee) to decrease
the assessment rate established for the 2025 fiscal period and subsequent fiscal periods from $0.040 to $0.030 per 18-pound
lug for grapes grown in a designated area of southeastern California. The assessment rate will remain in effect indefinitely
unless modified, suspended, or terminated.

DATES:

Effective May 11, 2026.

FOR FURTHER INFORMATION CONTACT:

Bianca Bertrand, Marketing Specialist, or Abigail Maharaj, Chief, West Region Branch, Market Development Division, Specialty
Crops Program, AMS, USDA; telephone: (559) 487-5901, or email: BiancaM.Bertrand@usda.gov or Abigail.Maharaj@usda.gov.

SUPPLEMENTARY INFORMATION:

This action, pursuant to 5 U.S.C. 553, amends regulations issued to carry out a marketing order as defined in 7 CFR 900.2(j).
This final rule is issued under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674) (the Act),
amending Marketing Agreement and Order No. 925 (7 CFR part 925; the Order), regulating the handling of grapes grown in a designated
area of southeastern California. The Committee locally administers the Order and is comprised of producers and handlers of
grapes operating within the area of production, as well as a public member.

This action is exempt from the Office of Management and Budget (OMB) review process required by Executive Order 12866. This
rule amends existing Marketing Order No. 925, as amended (7 CFR part 925), Grapes Grown in a Designated Area of Southeastern
California, and is necessary for the continued operation of Marketing Order No. 925. Additionally, this action is exempt from
the requirements of Executive Order 14192, “Unleashing Prosperity Through Deregulation,” pursuant to section 5(c).

This final rule 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. The Agricultural
Marketing Service (AMS) has determined that this final rule 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 final rule has been reviewed under Executive Order 12988, “Civil Justice Reform.” Under the Order now in effect, California
grape handlers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended
that the assessment rate will be applicable to all assessable grapes for the 2025 fiscal period, and continue until amended,
suspended, or terminated.

The Act provides that administrative remedies must be exhausted before parties may file suit in court challenging the final
agency action. Under section 8c(15)(A) of the Act (7 U.S.C. 608(c)(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.

This final rule decreases the assessment rate for California grapes handled under the Order from $0.040 to $0.030 per 18-pound
lug for the 2025 fiscal period and subsequent fiscal periods.

Sections 925.40 and 925.41 of the Order authorize the Committee, with the approval of AMS, to formulate an annual budget of
expenses and collect assessments from handlers to administer the program. The members of the Committee are familiar with the
Committee's needs and with the costs of goods and services in their local area and can formulate an appropriate budget and
assessment rate. The assessment rate is formulated and discussed in a public meeting, and all directly affected persons have
an opportunity to participate and provide input.

For the 2021 fiscal period and subsequent fiscal periods, the Committee recommended, and AMS approved, an assessment rate
of $0.040 per 18-pound lug of California grapes. That rate continues in effect from fiscal period to fiscal period until modified,
suspended, or terminated by AMS upon recommendation and information submitted by the Committee or other information available
to AMS.

The Committee met on November 12, 2024, and unanimously recommended with a vote of eight in favor and none opposed, 2025 fiscal
period expenditures of $88,600 and an assessment rate of $0.030 per 18-pound lug of California grapes handled for the 2025
fiscal period and subsequent fiscal periods. In comparison, the 2024 fiscal period budgeted expenditures were $77,000. The
assessment rate of $0.030 per 18-pound lug is $0.010 lower than the rate currently in effect. The Committee recommended decreasing
the assessment rate to draw down its reserve funds to within a level authorized by the Order. The Committee projects 2,000,000
18-pound lugs of assessable California grapes for the 2025 fiscal period, the same amount that the Committee initially projected
for the 2024 fiscal period.

The Committee derived the recommended assessment rate by reviewing anticipated expenses, the estimated 2,000,000 18-pound
lugs of assessable California grapes, and the amount of funds available in the authorized reserve. The estimated 2,000,000
18-pound lugs of assessable California grapes would generate $60,000 in assessment revenue at the assessment rate (2,000,000
18-pound lugs multiplied by the $0.030 assessment rate). The income generated from handler assessments, along with approximately
$28,600 from the financial reserve fund, should be sufficient to meet the Committee's estimated program expenditures of $88,600
for the 2025 fiscal period. Funds available in the financial reserve (which currently total about $110,000) would be kept
within the maximum permitted by the Order (not to exceed approximately one fiscal period's expenses, as authorized in § 925.42).

The assessment rate will continue in effect indefinitely unless modified, suspended, or terminated by AMS upon recommendation
and information submitted by the Committee or other available information. Although this assessment rate will be in effect
for an indefinite period, the Committee will continue to meet prior to or during each fiscal period to recommend a budget
of expenses and consider recommendations for modification of the assessment rate. The dates and times of Committee meetings
are available from the Committee or AMS. Committee meetings are open to the public and interested persons may express their
views at these meetings. AMS will evaluate Committee recommendations and other available information to determine whether
modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's 2025 fiscal
period budget, and those for subsequent fiscal periods, will be reviewed and as appropriate, approved by AMS.

Final 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 final 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 that small
businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act are unique regulations
in that they are brought about through group action of typically small entities.

There are approximately six producers of California grapes in the production area and six handlers subject to regulation under
the Order. At the time this analysis was prepared, the Small Business Administration (SBA) defined small agricultural producers
of grapes as those having annual receipts equal to or less than $4,000,000 (North American Industry Classification System
(NAICS) code 111332, Grape Vineyards) and small agricultural service firms as those having annual receipts equal to or less
than $34,000,000 (NAICS code 115114, Postharvest Crop Activities) (13 CFR 121.201).

The USDA National Agricultural Statistics Service (NASS) reported a 2023 season average California grape producer price of
$1,850 per ton, equivalent to $16.65 per 18-pound container ([$1,850 per ton divided by 2,000 pounds] multiplied by 18 equals
$16.65). The Committee reported a 2023 grape shipment quantity of 2,549,484 18-pound lugs. Multiplying 2,549,484 by the $16.65
average producer price yields $42,448,910, divided by 6 producers equals an estimated annual crop value per producer of $7.07
million. Assuming a normal distribution, the majority of California grape producers subject to the order have estimated annual
receipts of well over $4,000,000 and may be classified as large entities according to the SBA definition (NAICS code 111332,
Grape Vineyards).

In addition, AMS Market News reported an average terminal market price of $38.53 per 18-pound container for the 2024 calendar
year (annual average of the weekly low-high price range midpoint, 18-pound container bagged, California origin, various varieties,
non-organic, all U.S. terminal markets, all grades and sizes). With approximately 2,549,484 18-pound lugs handled, the total
value would be $98,231,619 (2,549,484 multiplied by $38.53). With six grape handlers within the production area, the 2024
average revenue per handler is estimated to be $16,371,937 ($98,231,619 divided by 6), which is below the $34,000,000 SBA
size threshold (NAICS code 115114, Postharvest Crop Activities) for handlers. Thus, the majority of California grape handlers
subject to the order would be classified as small entities.

This final rule decreases the assessment rate collected from handlers for the 2025 and subsequent fiscal periods from $0.040
to $0.030 per 18-pound lug of assessable California grapes ($0.010 lower, or 25% decrease). The Committee unanimously recommended
2025 fiscal period expenditures of $88,600 and an assessment rate of $0.030 per 18-pound lug of California grapes. The Committee
expects the industry to handle 2,000,000 18-pound lugs of assessable California grapes during the 2025 fiscal period. Thus,
the $0.030 per 18-pound lug rate should provide roughly $60,000 in assessment income (2,000,000 18-pound lugs multiplied by
$0.030 per 18-pound lug). Income derived from handler assessments along with reserve funds should be sufficient to meet budgeted
expenditures for the 2025 fiscal period.

The Committee recommended decreasing the assessment rate to utilize funds from its reserve to meet necessary expenses for
the 2025 fiscal period, and ensure the reserve is maintained at a level in compliance with order requirements.

Prior to arriving at this budget and assessment rate recommendation, the Committee discussed various alternatives, including
reducing the assessment rate more and/or less than the rate herein. However, the Committee determined that the recommended
assessment rate would achieve its goals of both adequately funding Committee operations and reducing the reserve to an appropriate
level. Consequently, those alternatives were rejected.

A review of historical and preliminary information pertaining to the 2025 fiscal period indicates the average producer price
for the 2025 fiscal period should be approximately $13.11 per 18-pound lug of California grapes. Therefore, the estimated
assessment revenue for the 2025 fiscal period as a percentage of total producer revenue would be about 0.23 percent ($0.030
per 18-pound lug assessment rate divided by $13.11 and multiplied by 100).

This final rule decreases the assessment rate imposed on handlers. Assessments are applied uniformly on all handlers, and
some of the costs may be passed on to producers. However, these costs are expected to be offset by the benefits derived by
the operation of the Order.

Committee meetings are widely publicized throughout the production area. The California grape industry and all interested
persons are invited to attend the meetings and participate in Committee deliberations on all issues. Like all Committee meetings,
the November 12, 2024, meeting was a public meeting and all entities, both large and small, were able to express views on
this issue. Finally, interested persons were invited to submit comments on this rule, including the

  regulatory and information collection 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 and Specialty Crops. No changes in those requirements
are necessary as a result of this action. Should any changes become necessary, they would be submitted to OMB for approval.

This final rule does not impose any additional reporting or recordkeeping requirements on either small or large California
grape 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 final rule.

A proposed rule concerning this action was published in the
Federal Register
on October 1, 2025 (90 FR 47243). Copies of the proposed rule were provided to California grape handlers. In addition, the
proposal was made available through the internet by AMS and the Office of the Federal Register via https://www.regulations.gov. A 30-day comment period ending October 31, 2025, was provided to all interested persons to respond to the proposal. AMS received
five comments regarding this proposal. Three comments supported the proposal and one comment did not pertain to the merits
of the rule. One comment challenged the procedural sufficiency of the rulemaking, asserting that AMS did not adhere to the
requirements of the Administrative Procedure Act, the Regulatory Flexibility Act, and Executive Order 12866.

Specifically, the commenter claimed that AMS procedurally bypassed notice and comment by issuing a direct final rule without
relying on a good cause exception, deprived interested parties a meaningful opportunity to comment, and failed to present
a complete analysis of the impacts on small businesses. After reviewing the comment, AMS determined that all of the statutory
and procedural requirements for rulemaking have been met regarding this action.

Contrary to the comment's assertions, AMS did not bypass notice and comment or invoke good cause. Interested persons had numerous
opportunities to review pertinent information, present their views, and participate in the rulemaking process. As noted above,
AMS published a notice of proposed rulemaking in the
Federal Register
on October 1, 2025, that included a 30-day comment period for interested persons, ending October 31, 2025. The proposed rulemaking
also included an Initial Regulatory Flexibility Analysis, pursuant to requirements set forth in the Regulatory Flexibility
Act, that considered and detailed for the public's review the economic impact of this rule on small entities.

Additionally, to address the comment's statements concerning Executive Order 12866, AMS reiterates that, as stated in the
proposed rule, this rule falls within a category of regulatory actions that OMB exempted from the review process required
by Executive Order 12866. Accordingly, AMS made no changes to the rule as proposed.

After consideration of all relevant material presented, including the information and recommendations submitted by the Committee
and other available information, AMS has determined that this final rule is consistent with and will effectuate the purposes
of the Act.

List of Subjects in 7 CFR Part 925

Grapes, Marketing agreements, Reporting and recordkeeping requirements.

For the reasons set forth in the preamble, the Agricultural Marketing Service amends 7 CFR part 925 as follows:

PART 925—GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN CALIFORNIA

Regulatory Text 1. The authority citation for part 925 continues to read as follows:

Authority:

7 U.S.C. 601-674.

1. Revise § 925.215 to read as follows:

§ 925.215 Assessment rate.

On and after January 1, 2025, an assessment rate of $0.030 per 18-pound lug is established for grapes grown in a designated
area of southeastern California.

Erin Morris, Administrator, Agricultural Marketing Service. [FR Doc. 2026-06891 Filed 4-8-26; 8:45 am] BILLING CODE 3410-02-P

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