Rule2026-19887
Almonds Grown in California; Extension of Inedible Disposition Obligation Deadline
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
September 29, 2026
Effective
October 29, 2026
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This final rule implements a recommendation from the Almond Board of California to extend the inedible disposition obligation deadline prescribed under the Federal marketing order for almonds grown in California from September 30 to November 30 indefinitely.
Full Text
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<title>Federal Register, Volume 91 Issue 187 (Tuesday, September 29, 2026)</title>
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[Federal Register Volume 91, Number 187 (Tuesday, September 29, 2026)]
[Rules and Regulations]
[Pages 61293-61295]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19887]
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Rules and Regulations
Federal Register
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having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 91, No. 187 / Tuesday, September 29, 2026 /
Rules and Regulations
[[Page 61293]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 981
[Doc. No. AMS-SC-25-0188]
Almonds Grown in California; Extension of Inedible Disposition
Obligation Deadline
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule implements a recommendation from the Almond
Board of California to extend the inedible disposition obligation
deadline prescribed under the Federal marketing order for almonds grown
in California from September 30 to November 30 indefinitely.
DATES: Effective October 29, 2026.
FOR FURTHER INFORMATION CONTACT: Jeremy Sasselli, Marketing Specialist,
or Abigail Maharaj, Chief, West Region Branch, Market Development
Division, Specialty Crops Program, AMS, USDA; telephone: (559) 487-
5901; or email: <a href="/cdn-cgi/l/email-protection#105a7562757d693e43716363757c7c7950656374713e777f66"><span class="__cf_email__" data-cfemail="367c5344535b4f1865574545535a5a5f764345525718515940">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#4504272c22242c296b08242d2437242f05303621246b222a33"><span class="__cf_email__" data-cfemail="bcfdded5dbddd5d092f1ddd4ddceddd6fcc9cfd8dd92dbd3ca">[email protected]</span></a>.
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 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 producers and handlers of almonds operating within the
production area.
This action is exempt from the Office of Management and Budget
(OMB) review process required by Executive Order 12866. This final 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 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 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.'' This final rule is not intended to have
retroactive effect.
The Act provides that administrative remedies must be exhausted
before parties may file suit in court. Under section 608(c)(15)(A) of
the Act, any handler subject to an order may file with 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 extends the inedible disposition deadline
prescribed under the Order from September 30 to November 30. Section
981.42 of the Order authorizes the Board, with the approval of the
Secretary, to establish rules and regulations necessary for the
administration of the inedible program for quality control. Under this
section, the Order currently mandates that inedible kernels for each
almond variety in excess of two percent shall constitute an inedible
obligation that must be delivered to the Board or Board-accepted users.
Section 981.442 of the Order establishes the disposition obligation
schedule for California almonds. These requirements are specified in
Sec. 981.442(a)(5) and require handlers to meet the disposition
obligation deadline no later than September 30 succeeding the crop year
in which the obligation was incurred.
Since the 2023-2024 crop year, meeting the disposition obligation
deadline of September 30 has become problematic because heavy winter
precipitation and insect damage have increased the percentage of
inedible kernels, a trend that industry believes will continue to
adversely impact future crops. For example, during the 2022-2023 crop
year, the inedible disposition percentage was 2.12 percent. For the
2023-2024 crop year, the percentage was measured at 4.23 percent (the
highest inedible percentage in 40 years), and during the 2024-2025 crop
year, the inedible disposition percentage was 3.07 percent. Prior to
the 2023-2024 crop year, the previous 15-year inedible percentage
average was 1.44 percent. Thus, the lower crop quality in 2023-2024 led
to the largest recorded inedible disposition at 55.8 million pounds
(the previous largest industry inedible disposition was 14.4 million
pounds in 2017-2018 at which time the inedible percentage was 2.42
percent). This nearly quadrupling of the inedible disposition
obligation meant that in addition to handling a record of 6.7 million
pounds of inshell credits, industry was also required to ship a record
49.1 million pounds of inedible kernels by September 30, 2024.
Because recent historical inedible percentages have been around 1.5
percent prior to the 2023-2024 crop year, the two percent inedible
tolerance had remained reasonable for industry and could be addressed
during the current 14-month timeframe. While the 2024-2025 crop year
inedible disposition of 3.09 percent decreased from the record high
percentage of 4.23 percent in 2023-2024, the current inedible
percentage remains nearly double the historical inedible percentage.
Such an increase in the inedible disposition percentage has
[[Page 61294]]
made it difficult for industry to meet the current September 30
deadline.
Given the notable increase in overall inedible product occurring
since 2023, the Board met on June 17, 2025, and unanimously
recommended, eight in favor and none opposed, to extend the inedible
disposition deadline from September 30 to November 30. This action was
previously developed during a Loss & Exempt Task Force meeting on
February 26, 2025, where it was supported unanimously, and was voted on
at the Almond Quality, Food Safety & Services (AQFSS) Committee meeting
on March 20, 2025, where it was also supported unanimously. The Board
believes adjusting the deadline by 60 days, from September 30 to
November 30, will allow sufficient time and more flexibility for
industry to meet the disposition obligation deadline.
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 acting on their
own behalf.
There are approximately 7,600 growers of California almonds subject
to regulation under the Order and approximately 100 handlers in the
production area. At the time this analysis was prepared, the Small
Business Administration (SBA) defined small agricultural growers of
almonds as those having annual receipts equal to or less than
$3,750,000 (North American Industry Classifications System (NAICS) code
111335, Tree Nut Farming). Small agricultural service firms, including
handlers, are defined as those whose annual receipts are equal to or
less than $34,000,000 (NAICS code 115114, Postharvest Crop Activities).
Data from USDA's National Agricultural Statistics Service (NASS)
2022 Agricultural Census reports that there were 7,596 almond farms
with bearing acres in the production area. Additionally, the Census
indicates that out of the 7,596 California farms with bearing acres of
almonds, 4,805 (63 percent) have fewer than 100 bearing acres.
In its annual Noncitrus Fruits and Nuts publication, NASS reported
a 2023 crop year average yield of 1,790 pounds per acre (shelled basis)
and a season average grower price of $1.64 per pound. Therefore, a 100-
acre farm with an average yield of 1,790 pounds per acre would produce
about 179,000 pounds of almonds (1,790 pounds times 100 acres equals
179,000 pounds). At $1.64 per pound, that farm's production would be
valued at $293,560 (179,000 pounds times $1.64 per pound equals
$293,560). Since the Census indicated that 63 percent of California's
almond farms have fewer than 100 bearing acres, it could be concluded
that the majority of California almond growers had annual receipts from
the sale of almonds of less than $293,560 for the 2022 crop year, which
is below the SBA threshold of $3,750,000 for small growers. Therefore,
the majority of growers may be classified as small businesses.
To estimate the proportion of almond handlers that would be
considered small or large businesses, it was assumed that the unit
value per pound of almonds exported in a particular year could serve as
a representative almond price at the handler level. A unit value for a
commodity is the value of exports divided by the quantity exported.
Data from the Global Agricultural Trade System (GATS) database of
USDA's Foreign Agricultural Service showed that the value of almond
exports from August 2022 to July 2023 (shelled equivalent, combining
shelled and inshell) was $4.115 billion. The quantity of almond exports
over that period was 1.783 billion pounds. Dividing the export value by
the quantity yields a unit value of $2.31 per shelled pound ($4.115
billion divided by 1.783 billion pounds equals $2.31).
NASS estimated that the California almond industry produced 2.511
billion pounds of almonds in 2022. Applying the $2.31 derived
representative handler price per pound to total industry production
results in an estimated total revenue at the handler level of $5.80
billion (2.511 billion pounds times $2.31 per pound equals $5.80
billion). With an estimated 100 handlers in the California almond
industry, average revenue per handler would be approximately $58
million ($5.80 billion divided by 100 equals $58 million). Assuming a
normal distribution of revenues, most almond handlers shipped almonds
valued at more than $34,000,000 during the 2022 crop year. Therefore,
the majority of handlers may be classified as large businesses.
This final rule extends the inedible disposition obligation
deadline in Sec. 981.442(a)(5) of the Order from September 30 to
November 30. This final rulemaking revises Sec. 981.442(a)(5).
Authority for this change is provided in Sec. 981.42. This change only
impacts the inedible disposition deadline prescribed under the Order.
The Board's meetings are widely publicized throughout the California
almond industry and all interested persons are invited to attend the
meetings and participate in Board deliberations on all issues. Like all
Board meetings, the June 17, 2025, 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. 0581-0178, Vegetable
and Specialty Crops, and 0581-0242, Almond Salmonella. This final rule
does not require changes to the current information collection. Should
any changes become necessary, they would be submitted to OMB for
approval.
This final rule will not impose any additional reporting or
recordkeeping requirements on either small or large California 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 final rule.
A proposed rule concerning this action was published in the Federal
Register on March 9, 2026 (91 FR 11187). Copies of the proposed rule
were provided to all almond handlers. In addition, the proposal was
made available through the internet by AMS and the Office of the
Federal Register via <a href="https://www.regulations.gov">https://www.regulations.gov</a>. A 30-day comment
period ending April 8, 2026, was provided for interested persons to
respond to the proposal. AMS received four comments during the comment
period. Two comments supported the proposal and one comment did not
pertain to the merits
[[Page 61295]]
of the rule. One comment opposed the proposal, expressing
dissatisfaction that almond handlers pay almond growers for the edible
portion of almonds received and do not pay growers for the inedible
portion of the almonds. The comment suggested that handlers should pay
growers for both the edible and inedible portion of almonds received;
however, the basis of this comment relates to business decisions and
interactions between almond growers and handlers outside of the scope
of this action. 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 Board and other
available information, AMS has determined that this final rule is
consistent with and effectuates the purposes of the Act.
List of Subjects in 7 CFR Part 981
Marketing agreements, Nuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service amends 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.
Sec. 981.442 [Amended]
0
2. Amend Sec. 981.442(a)(5) by removing the word ``September'' and
adding in its place the word ``November''.
Erin Morris,
Administrator, Agricultural Marketing Service.
[FR Doc. 2026-19887 Filed 9-28-26; 8:45 am]
BILLING CODE 3410-02-P
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