USDA Finalizes Sweeping Reforms to California Raisin Marketing Order 989
On October 9, 2026, the United States Department of Agriculture's (USDA) Agricultural Marketing Service (AMS) announced a final rule amending Marketing Order No. 989, which regulates the handling of raisins produced from grapes grown in California. This action, published in the Federal Register, signifies a substantial overhaul of the governance and operational framework for the California raisin industry, with an effective date of November 9, 2026. The amendments follow a multi-year process that included public hearings, a recommended decision, and a producer referendum, all culminating in a modernized regulatory structure designed to enhance the efficiency and responsiveness of the Raisin Administrative Committee (Committee).
Committee Governance Streamlined
Central to these amendments are significant changes to the structure and functioning of the Raisin Administrative Committee. The final rule reduces the Committee's total membership from 47 to 21. This reduction is coupled with the removal of specific producer district representation and the addition of a new unaffiliated producer member seat. Furthermore, the designated cooperative bargaining association member seat has been eliminated, a change that faced opposition during the exception period following the recommended decision. Quorum requirements for Committee meetings are also lowered from 25 to 14, a move intended to facilitate decision-making and reduce operational hurdles. These adjustments received strong support in the producer referendum, with over 76 percent of voting growers representing more than 82 percent of the volume favoring the changes.
Another key governance reform removes the requirement for separate member and alternate member position nominations for independent and small cooperative producers. Testimony during the public hearing indicated that the prior separate nomination procedures discouraged participation, suggesting the streamlined approach will foster broader engagement within the smaller Committee structure. Growers also overwhelmingly supported this change, with 67.50 percent of voters and 81.65 percent of volume voting in favor.
Adjustments to Marketing Policy and Quality Standards
The final rule also introduces changes to how the Committee establishes its marketing policy and clarifies product standards. Specifically, it removes factor 4 and part of factor 5 from the Committee's considerations for establishing marketing policy. While the precise impact of removing these factors requires deeper analysis of the original order, such changes typically aim to refine the criteria used for market stabilization and supply management, potentially shifting focus to other market dynamics. Additionally, the rule adds language clarifying that reconditioned raisins are to be considered standard raisins. This standardization aims to provide greater clarity and consistency in product categorization, which can impact market perception and pricing. These marketing and quality amendments garnered the highest level of producer support, with 81.25 percent of voters representing nearly 92 percent of the total volume in favor.
New Operational Authorities
Beyond governance and marketing policy, the amendments grant the Committee new operational flexibilities. The rule adds authority for the Committee to accept voluntary contributions. This provision could provide an additional funding mechanism for Committee activities and initiatives, allowing for projects or programs that might not be fully covered by mandatory assessments. The rule also incorporates language regarding the ownership of intellectual property. This new authority clarifies the Committee's rights over any intellectual property developed under its purview, which could include marketing materials, research findings, or process innovations. Producers approved these additions with 72.97 percent of the vote, representing 87.75 percent of the volume.
Industry Context and Economic Considerations
These regulatory changes arrive at a time when the California raisin industry has experienced significant shifts. Data presented at the hearing highlighted a notable decline in both bearing acreage and total production over the past two decades. Bearing acreage decreased by nearly 53 percent from the 2000-2001 crop year to 2021-2022, while total production fell by 65 percent during the same period. This backdrop suggests that the amendments are part of a broader effort to adapt the marketing order to a changing industry landscape, seeking to maintain relevance and effectiveness for the remaining producers.
From an economic perspective, AMS considered the impact of these changes on small entities, as mandated by the Regulatory Flexibility Act. The analysis concluded that a majority of California raisin producers are classified as small entities, with annual receipts below the $4 million threshold. Handlers represent a mix of small and large entities. Crucially, the evidence presented at the hearing indicated that none of the approved amendments would impose burdensome effects on these small agricultural producers or firms. It is noteworthy that while producers overwhelmingly approved the amendments, the companion handler agreement did not receive approval from handlers representing more than 50 percent of the volume, meaning no such agreement will be established.
Forward Trajectories for the Raisin Industry
This final rule represents a significant step in the ongoing evolution of federal marketing orders. The comprehensive nature of the amendments, touching on governance, marketing policy, and operational capabilities, indicates a concerted effort to optimize the framework for the California raisin industry. The overwhelming support from producers in the referendum underscores a collective desire for these modernizations. Future developments will likely center on how the newly constituted and streamlined Committee utilizes its enhanced flexibilities, particularly in light of declining production trends and the absence of a companion handler agreement. The industry will need to closely monitor the practical implications of a smaller, more focused Committee, and how the revised marketing policies affect market stability and grower returns in the years to come.
