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Proposed Rule2026-20622

Almonds Grown in California; Amendment to the Marketing Order

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Published

October 8, 2026

Issuing agencies

Agriculture DepartmentAgricultural Marketing Service

Abstract

This rulemaking proposes an 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 194 (Thursday, October 8, 2026)</title>
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[Federal Register Volume 91, Number 194 (Thursday, October 8, 2026)]
[Proposed Rules]
[Pages 64306-64309]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20622]

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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. 194 / Thursday, October 8, 2026 /
Proposed Rules

[[Page 64306]]

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 and referendum order.

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SUMMARY: This rulemaking proposes an 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: The referendum will be conducted from November 2 through
November 20, 2026. The representative period for the referendum is
August 1, 2025, through July 31, 2026.

ADDRESSES: Interested persons are invited to submit written questions
and comments to the Docket Clerk, Market Development Division,
Specialty Crops Program, AMS, USDA, 1400 Independence Avenue SW, STOP
0237, Washington, DC 20250-0237; telephone: (202) 720-2491.

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#f1bc90839a9485989f96be83959483b29e9c9c949f85b184829590df969e87">[email&#160;protected]</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.
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 proposed
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 8c(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 formal through
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 and referendum order below.
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.
A proposed rulemaking soliciting public comments on the proposed
amendments was published in the Federal Register on March 20, 2026 (91
FR 13526). AMS received four comments during the comment period. Two
comments supported the proposal and two opposed the proposal. Of the
two supportive comments, one emphasized that while there is a clear
need to exercise borrowing authority, it should not be the primary or
sole solution to address the issue of timing gaps between the Board's
spending needs and assessment revenue collection. Instead, the comment
recommended the Board undertake additional review of alternative
solutions, such as adjustments to the timing of assessment and revenue
collection to better match the cash flow needs during the Board's
fiscal year. Of the two oppositional comments, one cited concerns about
the impacts of overall borrowing costs, such as interest accrual and
the need for greater oversight of Board spending. The other comment
cited concerns relating to the overall scope of the proposed authority,
including a lack of definitive terms, lack of regulation of loan
repayment, and lack of borrowing caps. The commenter also noted
concerns with the potential for late payments, loan changes, and debt
accrual over time.
As noted above, during its discussions, the Board undertook a
thorough review of the proposal and identified the suitable parameters
of short-term loan duration and maximum borrowing limits not to exceed
approved crop year budget ceilings. Such parameters and limitations
would promote fiscal responsibility and reduce the risk of debt
accumulation because borrowing would be structured around approved
expenditures, the timing of those expenses and assessment

[[Page 64307]]

collection, and anticipated assessment revenue sufficient to repay
funds within the 12-month period specified in the rule. The Board
further articulated its commitment to implement monitoring and
oversight policies by its finance department to track interest rates
and debt levels; parameters and control mechanisms overseeing loan
timing, limits, and terms would be discussed and communicated to
industry at annual Board meetings open to the public and through other
outreach efforts, providing transparency in financial planning and
decision-making. In addition, short-term borrowing against a seasonal
line of credit from commercial lending institutions is a common
practice used by businesses to manage cash flow and is authorized under
other marketing orders. Based on all the information available to AMS
at this time, including the comments received in response to the
proposed rule, no substantive changes will be made to the proposed
amendment. AMS made one minor grammatical change to add a hyphen
between ``short'' and ``term.''
AMS will conduct a producer referendum to determine support for the
proposed amendment. If appropriate, a final rule will then be issued to
effectuate the amendment if it is favored by producers in the
referendum.

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 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.
Subsequently, the Board reviewed and discussed borrowing authority
over several meetings in 2023 and 2024 to understand and 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 believes that having borrowing authority would allow it to better
manage approved expenditures and maintain cash flow. In addition, the
Board maintained that any funds borrowed would be carefully monitored
in accordance with internal polices modified to ensure fiscal
responsibility.
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 action 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 typically 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 $3.75 million (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
million (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

[[Page 64308]]

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, as 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 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
authority. 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.

Paperwork Reduction Act

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.
A proposed rule concerning this action published in the Federal
Register on March 20, 2026 (91 FR 13526). A copy of the rule was sent
via email to Board staff for distribution to all Board members and
California almond growers and handlers. The proposed rule was also 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 60-day comment period
ending May 19, 2026, was provided to allow interested persons to
respond to the proposal. AMS received four comments during the comment
period. Two comments supported the proposal and two opposed the
proposal. Of the two supportive comments, one emphasized that while
there is a clear need to exercise borrowing authority, it should not be
the primary or sole solution to address the issue of timing gaps
between the Board's spending needs and assessment revenue collection.
Instead, the comment recommended the Board undertake additional review
of alternative solutions, such as adjustments to the timing of
assessment and revenue collection to better match the fiscal year. Of
the two oppositional comments, one cited concerns about the impacts of
overall borrowing costs, such as interest accrual and the need for
greater oversight of Board spending. The other comment cited concerns
relating to the overall scope of the proposed authority, including a
lack of definitive terms, lack of regulation of loan repayment, and
lack of borrowing caps. The commenter also noted the potential for late
payments, loan changes, and debt accrual over time. As noted above,
during its discussions, the Board undertook a thorough review of the
proposal and identified the suitable parameters of short-term loan
duration and maximum borrowing limits not to exceed approved crop year
budget ceilings. Such parameters and limitations would promote fiscal
responsibility and reduce the risk of debt accumulation because
borrowing would be structured around approved expenditures, the timing
of those expenses and assessment collection, and anticipated assessment
revenue sufficient to repay funds within the 12-month period specified
in the rule. The Board further articulated its commitment to implement
monitoring and oversight policies by its finance department to track
interest rates and

[[Page 64309]]

debt levels. Such parameters and control mechanisms overseeing loan
timing, limits, and terms would be discussed and communicated to
industry at Board meetings open to the public and through other
outreach efforts, providing transparency in financial planning and
decision-making. In addition, and as previously stated, short-term
borrowing against a seasonal line of credit from commercial lending
institutions is a common practice used by businesses to manage cash
flow and is authorized under other Federal marketing orders. Based on
all the information available to AMS at this time, including the
comments received in response to the proposed rule, no substantive
changes will be made to the amendments as proposed. AMS made one minor
grammatical change to add a hyphen between ``short'' and ``term''.

Findings and Conclusions

AMS has determined that the findings and conclusions, and general
findings and determinations included in the proposed rulemaking set
forth in the March 20, 2026, issue of the Federal Register (91 FR
13526) are appropriate and necessary and are hereby approved and
adopted.

Marketing Order

Annexed hereto and made a part hereof is the document entitled
``Order Amending the Order Regulating the Handling Almonds Grown in
California.'' This document has been decided upon as the detailed and
appropriate means of effectuating the foregoing findings and
conclusions. It is hereby ordered that this entire proposed rule be
published in the Federal Register.

Referendum Order

It is hereby directed that a referendum be conducted in accordance
with the procedure for the conduct of referenda (7 CFR 900.400-407) to
determine whether the annexed Order amending the Order Regulating the
Handling of Almonds Grown in California is approved or favored by
growers, as defined under the terms of the Order, who during the
representative period were engaged in the production of almonds in the
production area. The representative period for the conduct of such
referendum is hereby determined to be August 1, 2025, through July 31,
2026.
The agents designated by the Secretary to conduct the referendum
are Jeremy Sasselli, Bianca Bertrand, and Abigail Maharaj, West Region
Branch, Market Development Division, Specialty Crops Program, AMS,
USDA; telephone: (559) 487-5901, or email: <a href="/cdn-cgi/l/email-protection#6f250a1d0a0216413c0e1c1c0a0303062f1a1c0b0e41080019">[email&#160;protected]</a>,
<a href="/cdn-cgi/l/email-protection#db99b2bab5b8ba96f599bea9afa9bab5bf9baea8bfbaf5bcb4ad">[email&#160;protected]</a>, and <a href="/cdn-cgi/l/email-protection#68290a010f09010446250900091a0902281d1b0c09460f071e">[email&#160;protected]</a>, respectively.

Order Amending the Order Regulating the Handling of Almonds Grown in
California 1
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\1\ This order shall not become effective unless and until the
requirements of Sec. 900.14 of the rules of practice and procedure
governing proceedings to formulate marketing agreements and
marketing orders have been met.
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Findings and Determinations

The findings and determinations 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.

Order Relative to Handling

It is therefore ordered, that on and after the effective date
hereof, all handling of almonds grown in California shall be in
conformity to, and in compliance with, the terms and conditions of the
said Order as hereby proposed to be amended as follows:
The provisions of the proposed marketing order amending the Order
contained in the proposed rule issued by the Administrator and
published in the Federal Register (91 FR 13526) on March 20, 2026, with
one minor grammatical change, will be and are the terms and provisions
of this order amending the Order and are set forth in full herein.

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. 2026-20622 Filed 10-7-26; 8:45 am]
BILLING CODE P

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