USDA Proposes Structural Changes to American Pecan Council Membership and Handling Requirements

The Agricultural Marketing Service of the United States Department of Agriculture published a proposed rule in the Federal Register on November 9, 2026, addressing membership and handling requirements under Marketing Order 986. The action originates from unanimous recommendations made by the American Pecan Council during its August 14, 2025 meeting. The proposed regulations aim to address structural challenges arising from significant industry consolidation within the domestic pecan shelling sector over the past decade. Background and Regulatory Framework Marketing Order 986 regulates the handling of pecans grown in fifteen states, including Alabama, Arkansas, Arizona, California, Florida, Georgia, Kansas, Louisiana, Missouri, Mississippi, North Carolina, New Mexico, Oklahoma, South Carolina, and Texas. The order is locally administered by the Council, which comprises growers, handlers, one accumulator member, and one public member. Operating under the authority of the Agricultural Marketing Agreement Act of 1937, the Council relies on handler assessments to fund its operations and data collection efforts. When the order was originally promulgated in 2016, the pecan industry included approximately fifty active shellers. To ensure balanced representation, the regulatory framework established six regional sheller seats distributed across Eastern, Central, and Western regions, with specific allocations for large and small operations based on annual poundage thresholds. Consolidation and Sheller Representation Challenges In the years following the implementation of the 2016 order, the domestic pecan industry underwent substantial consolidation. By August 2025, the number of active shellers dropped to fewer than thirty. This reduction created operational hurdles for the Council, specifically regarding member nominations and filling vacant sheller seats. Remaining shellers frequently source pecans across multiple regions and operate facilities in various jurisdictions, rendering the original geographic boundaries less relevant. Furthermore, the distinction between large and small shellers restricted the pool of eligible candidates, as fewer large operations existed to fill designated seats. The Council determined that these regional and size restrictions hindered the nomination process and left seats vacant, thereby depriving the governing body of diverse industry perspectives. To resolve these vacancies, the proposed rule eliminates the regional and size designations for sheller seats. It combines the three existing sheller regions into a single production-wide region encompassing all fifteen states. All six sheller seats and their corresponding alternates will become open positions accessible to any qualified sheller regardless of physical location or annual processing volume. To ensure continuity, the Council recommended staggering the initial terms of the new sheller seats so that half serve two-year terms and the remaining half serve four-year terms. Grower representation and regional boundaries for growers remain unaffected by these changes, as the grower segment did not experience the same level of structural consolidation. Handling and Assessment Adjustments Beyond membership restructuring, the proposed rule modifies administrative and reporting procedures under the order. Handlers utilize inter-handler transfer provisions to shift the reporting and payment of assessments when transferring loads of pecans. The new rule revises the inter-handler transfer report from an annual submission to a monthly requirement. It also mandates the inclusion of specific data regarding the weight and type of inshell pecans transferred, which the agency asserts will improve data collection accuracy. To encourage timely compliance, the proposal establishes a one-time five percent late fee for unpaid handler assessments and a one percent monthly interest charge on outstanding balances. Finally, the rule enacts administrative corrections to remove an inadvertently duplicated paragraph and a redundant provision within the regulatory text. Public Participation and Review Process The proposed rule is exempt from review under Executive Order 12866 and Executive Order 14192. Federal agencies also reviewed the action under tribal consultation and civil justice reform mandates, determining that the rule lacks substantial direct tribal implications and has no retroactive effect. Interested parties and stakeholders have until December 9, 2026, to submit written comments to the Docket Clerk at the Agricultural Marketing Service or electronically via regulations.gov.