Proposed Rule2026-05542
Almonds Grown in California; Amendment to the Marketing Order
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
March 20, 2026
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This proposed rule invites comments on a proposed amendment to Marketing Order No. 981, which regulates the handling of almonds grown in California. The proposed amendment would establish the authority to borrow funds from a commercial lending institution.
Full Text
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<title>Federal Register, Volume 91 Issue 54 (Friday, March 20, 2026)</title>
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[Federal Register Volume 91, Number 54 (Friday, March 20, 2026)]
[Proposed Rules]
[Pages 13526-13528]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-05542]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 91, No. 54 / Friday, March 20, 2026 /
Proposed Rules
[[Page 13526]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Doc. No. AMS-SC-25-0016]
Almonds Grown in California; Amendment to the Marketing Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule invites comments on a proposed amendment to
Marketing Order No. 981, which regulates the handling of almonds grown
in California. The proposed amendment would establish the authority to
borrow funds from a commercial lending institution.
DATES: Comments must be received by May 19, 2026.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments can be sent to the Docket
Clerk, Market Development Division, Specialty Crops Program, AMS, USDA,
1400 Independence Avenue SW, STOP 0237, Washington, DC 20250-0237.
Comments can also be sent to the Docket Clerk electronically by email:
<a href="/cdn-cgi/l/email-protection#9ad7fbe8f1ffeef3f4fdd5e8feffe8d9f5f7f7fff4eedaefe9fefbb4fdf5ec"><span class="__cf_email__" data-cfemail="c78aa6b5aca2b3aea9a088b5a3a2b584a8aaaaa2a9b387b2b4a3a6e9a0a8b1">[email protected]</span></a> or via the internet: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Comments should reference the document number, the
date and page number of this issue of the Federal Register. Comments
submitted in response to this proposed rule will be included in the
record and will be made available to the public and can be viewed at:
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. Please be advised that comments are posted
to <a href="http://regulations.gov">regulations.gov</a> without change.
FOR FURTHER INFORMATION CONTACT: Taylor Johnson, Marketing Specialist,
or Matthew Pavone, Chief, Rulemaking Services Branch, Market
Development Division, Specialty Crops Program, AMS, USDA, 1400
Independence Avenue SW, Stop 0237, Washington, DC 20250-0237;
telephone: (202) 720-2491, fax: (202) 720-8938, or email:
<a href="/cdn-cgi/l/email-protection#561b37243d3322192432332415393b3b333822162325323778313920"><span class="__cf_email__" data-cfemail="7f321e0d141a0b300d1b1a0d3c1012121a110b3f0a0c1b1e51181009">[email protected]</span></a>.
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 rule is issued under the
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674) (the Act), amending Marketing Order No. 981 (7 CFR part 981; the
Order), regulating the handling of almonds grown in California. The
Almond Board of California (Board) locally administers the Order and is
comprised of growers and handlers of almonds operating within
California.
Section 608c(17) of the Act (7 U.S.C. 608c(17)) and the applicable
rules of practice and procedure at 7 CFR 900.43 authorize amendment of
the Order through this informal rulemaking action. The Agricultural
Marketing Service (AMS) will consider comments received in response to
this proposed rule and, based on all the information available, will
determine if the amendment is warranted. If AMS determines amendment of
the Order is warranted, a subsequent proposed rule and notice of
referendum would be issued, and growers would be allowed to vote for or
against the proposed Order amendment. AMS would then issue a final rule
effectuating any amendments favored in the referendum.
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. 981, as amended (7 CFR part 981),
Almonds Grown in California, and is necessary for the continued
operation of Marketing Order No. 981. Additionally, this action is
exempt from the requirements of Executive Order 14192, ``Unleashing
Prosperity Through Deregulation,'' pursuant to section 5(c).
This proposed 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. AMS has determined that this 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 proposed rule has been reviewed under Executive Order 12988,
``Civil Justice Reform.'' This proposed rule is not intended to have
retroactive effect. This proposed rule shall not be deemed to preclude,
preempt, or supersede any State program covering almonds grown in
California.
Section 608c(17) of the Act (7 U.S.C. 608c(17)) and the
supplemental rules of practice at 7 CFR 900.43 authorize the use of
informal rulemaking (5 U.S.C. 553) to amend Federal fruit, vegetable,
and nut marketing agreements and orders. In determining whether
informal rulemaking is appropriate, USDA is required to consider the
nature and complexity of the proposed amendments, the potential
regulatory and economic impacts on affected entities, and any other
relevant matters.
AMS has considered these factors and has determined that the
amendment proposed herein is not unduly complex and the nature of the
proposed amendment is appropriate for utilizing the informal rulemaking
process to amend the Order. A discussion of the potential regulatory
and economic impacts on affected entities is discussed later in the
``Initial Regulatory Flexibility Analysis'' section of this proposed
rule.
The Board discussed the proposal at length at its meeting held on
August 8, 2024. Following that meeting, the Board voted on the proposed
amendment to the Order, nine in favor and one opposed, by electronic
vote distributed on August 19 and concluded on August 28, 2024.
Proposal--Seasonal Line of Credit
Section 981.81 of the Order authorizes the collection of
assessments from almond handlers to provide funds to meet authorized
Board expenses and the operating reserve requirements. This proposal
would establish Sec. 981.81(f), to authorize the Board to borrow funds
from a commercial lending institution through a seasonal line of
credit. The authority to borrow would provide short term funds to
address cashflow constraints associated with the timing of program
expenditures and revenue collection. This would ensure continuity in
operations and Board functions, such as during the first few months of
the marketing year when new crop is received but no assessment
[[Page 13527]]
revenue is collected. Borrowed funds would be repaid within a maximum
period of 12 months.
The topic of borrowing authority previously appeared before
California almond growers as a proposed amendment to the Order during a
proposed rulemaking in April 2023 (88 FR 25559) and subsequent
referendum order (88 FR 68500) conducted by USDA between October 30 and
November 20, 2023. The proposal to add borrowing authority to the Order
received the support of 63.59% of almond growers voting, representing
56.15% of the production volume. To be enacted, at least two-thirds of
the growers voting, or at least two-thirds of the volume represented by
those growers voting, would need to vote in favor of a proposal. The
outcome fell just shy of these thresholds and was not enacted.
The Board reviewed and discussed borrowing authority over several
meetings in 2023 and 2024 to identify the underlying cause of the
failed amendment. It was determined the cause of the failed amendment
was a combination of grower confusion with the regulatory language that
appeared on the ballot and a lack of coordinated communication with
stakeholders. Despite the failure, the Board maintained that having
borrowing authority would allow it to better manage approved
expenditures within its established internal control policies, and
would help maintain cash flow.
As almond tonnage and assessment revenue have increased since the
Order's promulgation, the industry has approved increasingly larger
budgets which have year-round financial commitments. However, growers
do not necessarily deliver the entire assessable crop at one time, nor
do handlers have the facilities to process the entire crop at one time,
and handlers instead purchase and market almonds throughout the
production cycle. As a result, only about 18 percent of assessment
revenue is paid to the Board when the first crop year assessment
invoice is sent to handlers in October. Subsequently, the Board
invoices for assessments in the second and third quarters of the crop
year. Yet, many research activities and marketing programs are
initiated early in the crop year, necessitating payment when services
are performed, often well before the first assessments are received
from October invoices. Although the Board currently maintains a reserve
fund to help pay for early expenses, this fund is insufficient to
advance some of the necessary payments. Authorizing the Board to borrow
from commercial lending institutions would help it manage and sustain
program activities during times of cash flow deficiencies.
Board members further noted that the ability to borrow against a
line of credit is a common tool authorized in other Federal marketing
orders, especially to accommodate expenses when the assessment revenue
necessary to pay such expenses is not received until later in the year.
While addressing general business concerns about the potential
risks associated with debt financing, the Board agreed that its
internal control policies would be revised to reflect the new borrowing
authorities. Notably, the Board stressed that these policies would
include: monitoring by the finance department to take interest rates,
debt levels, and timing of loans into consideration; allowing the
lending institution to determine the maximum line of credit available;
making the amount of credit needed proportional to the net position;
and, ensuring line of credit advances are short term in nature, with
preferred lengths and timelines to be decided by the industry-led
finance and audit committee. The Board continues to believe that this
proposal would make the Board more operationally efficient while not
exceeding approved crop year budget ceilings. The Board does not
anticipate this amendment to negatively impact California almond
growers or handlers of any size.
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 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 7,596 almond growers in the production area
and 100 handlers subject to regulation under the Order. At the time
this analysis was prepared, the Small Business Administration (SBA)
defined small agricultural producers of almonds as those having annual
receipts equal to or less than $3,750,000 (North American Industry
Classification System (NAICS) code 111335, Tree Nut Farming). Small
agricultural service firms, which include almond handlers, are defined
by the SBA as those having annual receipts equal to or less than
$34,000,000 (NAICS code 115114, Postharvest Crop Activities) (13 CFR
121.201).
To estimate the number of almond growers that would be considered
small businesses per the SBA definition, AMS calculates the acreage
required to produce the volume of almonds at an average price to reach
the $3.75 million threshold. Due to the alternate-bearing nature of
almonds, a two-year average is used to estimate price and yield, based
on the most recent National Agricultural Statistics Service (NASS) data
for 2023 and 2024. Based on a two-year average price of $1.93 per
pound, shelled, and a two-year average yield of 1,880 pounds per acre,
shelled, an almond grower would need more than 1,033 bearing acres to
exceed the SBA threshold of $3.75 million ($3.75 million divided by
$1.93 per pound, divided by 1,880 pounds per acre). According to the
2022 Census of Agriculture, 134 farms had almond acreage of 1,500 acres
or more. This means that of the 7,596 growers in California, at least
98 percent of them would be considered small businesses.
To estimate the number of almond handlers that would be considered
small businesses, per the SBA definition, AMS calculates total handler
revenue using AMS Market News terminal market prices for almonds and
for total California almond production, reported by NASS. The 2024
average terminal market price, used as a proxy for handler price, for
almonds grown in California was $2.82 per pound. Total 2024 California
production of almonds was 2.73 billion pounds, shelled. Assuming that
all California almonds were processed by domestic handlers, total
handler revenue in 2024 is estimated to be nearly $7.7 billion ($2.82
per pound multiplied by 2.73 billion pounds). If total handler revenue
were evenly distributed among the 100 handlers in the production
region, then each handler would have a 2024 annual receipt of nearly
$77 million ($7.7 billion divided by 100 handlers), surpassing the $34
million threshold of the SBA definition of a small business. Therefore,
based on this analysis, AMS estimates that most almond handlers would
not be considered small businesses per the SBA definition.
This proposal would establish Sec. 981.81(f) to authorize the
Board to borrow funds from a commercial lending institution through a
seasonal line of credit. The authority to borrow funds would provide
necessary short term funds, given cashflow constraints associated with
the timing of program
[[Page 13528]]
expenditures and revenue collection. This amendment would better ensure
continuity in operations during periods when neither operating
assessments nor reserve funds are sufficient to fund the Board
functions. Borrowed funds would be repaid within a maximum period of 12
months.
The Board noted that the ability to borrow against a line of credit
is a common tool authorized in other Federal marketing orders,
especially to accommodate expenses when the assessment revenue
necessary to pay such expenses is not received until later in the year.
While addressing general business concerns about the potential
risks associated with debt financing, the Board agreed that its
internal control policies would be revised to reflect the new borrowing
authorities. Notably, the Board stressed that these policies would
include: monitoring by the finance department to take interest rates,
debt levels, and timing of loans into consideration; allowing the
lending institution to determine the maximum line of credit available;
making the amount of credit needed proportional to the net position;
and, ensuring line of credit advances are short term in nature, with
preferred lengths and timelines to be decided by the industry-led
finance and audit committee. The Board continues to believe that this
proposal would make the Board more operationally efficient while not
exceeding approved crop year budget ceilings. The Board does not
anticipate this to negatively impact California almond growers or
handlers of any size.
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. 0581-0178, Vegetable
and Specialty Crops. No changes in those requirements are necessary
because of this proposed rule. Should any changes become necessary,
they would be submitted to OMB for approval.
This proposed rule would not impose any additional reporting or
recordkeeping requirements on either small or large almond 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 rule.
The Board's meetings are widely publicized throughout the
California almond production area. All interested persons are invited
to attend the meetings and encouraged to participate in Board
deliberations on all issues. Like all Board meetings, the meeting held
on August 8, 2024, was public, and all entities, both large and small,
were encouraged to express their views on the proposed amendment.
Interested persons are invited to submit comments on the proposed
amendment to the Order, including comments on the regulatory and
information collection impacts of this action on small businesses.
Following analysis of any comments received on the amendment
discussed in this proposed rule, AMS will evaluate all available
information and determine whether to proceed. If appropriate, AMS would
publish a proposed rule and notice of referendum, and growers could
vote for or against the proposed amendment. AMS would publish
information about the referendum, including dates and voter eligibility
requirements, in a future issue of the Federal Register. AMS would then
publish a final rule to effectuate any amendment favored in the
referendum.
General Findings
The findings hereinafter set forth are supplementary to the
findings and determinations which were previously made in connection
with the issuance of Marketing Order 981; and all said previous
findings and determinations are hereby ratified and affirmed, except
insofar as such findings and determinations may be in conflict with the
findings and determinations set forth herein.
1. Marketing Order 981 as hereby proposed to be amended and all the
terms and conditions thereof, would tend to effectuate the declared
policy of the Act;
2. Marketing Order 981 as hereby proposed to be amended regulates
the handling of almonds grown in California and is applicable only to
persons in the respective classes of commercial and industrial activity
specified in the Order;
3. Marketing Order 981 as hereby proposed to be amended is limited
in application to the smallest regional production area which is
practicable, consistent with carrying out the declared policy of the
Act, and the issuance of several marketing orders applicable to
subdivisions of the production area would not effectively carry out the
declared policy of the Act;
4. Marketing Order 981 as hereby proposed to be amended prescribes,
insofar as practicable, such different terms applicable to different
parts of the production area as are necessary to give due recognition
to the differences in the production and marketing of almonds produced
or packed in the production area; and
5. All handling of almonds grown or handled in the production area,
as defined in Marketing Order 981, is in the current of interstate or
foreign commerce or directly burdens, obstructs, or affects such
commerce.
A 60-day comment period is provided to allow interested persons to
respond to this proposal. Any comments received on the amendment
proposed in this rule will be analyzed, and if AMS determines to
proceed based on all the information presented, a grower referendum
would be conducted to determine grower support for the proposed
amendment. If appropriate, a final rule would then be issued to
effectuate the amendment favored by growers participating in the
referendum.
List of Subjects in 7 CFR Part 981
Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, AMS proposes to amend 7
CFR part 981 as follows:
PART 981--ALMONDS GROWN IN CALIFORNIA
0
1. The authority citation for part 981 continues to read as follows:
Authority: 7 U.S.C. 601-674.
0
2. In Sec. 981.81, add paragraph (f) to read as follows:
Sec. 981.81 Assessment.
* * * * *
(f) Seasonal Line of Credit. To provide short term funds given
cashflow constraints associated with the timing of program expenditures
and revenue collection. The Board may borrow money from a commercial
lending institution for such purposes; funds will be repaid within a
maximum of 12 months.
Erin Morris,
Administrator, Agricultural Marketing Service.
[FR Doc. 2026-05542 Filed 3-19-26; 8:45 am]
BILLING CODE P
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