The U.S. Department of Agriculture's Agricultural Marketing Service (AMS) has announced a final rule implementing an increased assessment rate for Florida-grown citrus, a development set to impact the state's significant citrus industry. Effective May 29, 2026, handlers of oranges, grapefruit, tangerines, and pummelos in Florida will see the assessment rate rise from $0.02 to $0.025 per 4/5-bushel carton or equivalent. This adjustment is a direct response to recommendations from the Citrus Administrative Committee (CAC) and is intended to ensure the financial stability and continued operation of Marketing Order No. 905.
Supporting the Florida Citrus Marketing Order
Marketing Order No. 905, established under the Agricultural Marketing Agreement Act of 1937, provides a framework for regulating the handling of specific citrus varieties grown in Florida. The Citrus Administrative Committee, composed primarily of Florida citrus growers and a public member, locally administers this order. Its primary function is to manage and oversee the programs vital to the orderly marketing of Florida citrus, a role that requires ongoing financial support derived from assessments levied on handlers. These assessments cover administrative costs, allowing the Committee to carry out its responsibilities effectively for the benefit of the entire industry.
Rationale Behind the Assessment Rate Increase
The decision to raise the assessment rate was not made lightly. The Citrus Administrative Committee first recommended the increase on September 23, 2024, with a unanimous vote. The primary driver for this recommendation was the observed strain on the Committee's financial reserves over the preceding two seasons. This strain was largely attributed to unexpected decreases in shipment volumes, which directly impacted the revenue generated by the existing assessment rate.
Further emphasizing the urgency, the Committee met again on November 14, 2024, to reaffirm its recommendation following the significant damage inflicted by Hurricanes Helene and Milton. These severe weather events further jeopardized the industry's ability to maintain shipment levels and, consequently, the Committee's financial health. The increased rate is projected to reduce the reliance on reserves, ensuring that the Committee has sufficient funds to meet its budgeted expenditures. For the 2024-2025 fiscal period, estimated expenditures are $119,624. With an estimated 4,500,000 cartons to be shipped, the new $0.025 rate is expected to generate $112,500 in assessment income, requiring only $7,124 from reserves, a significant reduction compared to the $29,624 that would have been needed under the old rate.
Economic Impact on the Industry
The Regulatory Flexibility Act requires an analysis of the economic impact of such rules on small entities. The AMS analysis indicates that the majority of Florida citrus growers and handlers qualify as small entities. There are approximately 500 Florida citrus producers and 12 handlers operating under Marketing Order No. 905. Based on 2023-2024 data, the average annual receipts for fresh citrus handlers are well below the $34,000,000 threshold for small agricultural service firms, and average grower revenues are significantly less than the $4,000,000 to $4,250,000 thresholds for small agricultural producers.
While any increase in operational costs can be a concern for businesses, the modest $0.005 per carton increase is presented as a necessary measure to maintain the viability of the marketing order itself. The Committee's budget and assessment rate discussions are conducted in public meetings, allowing affected persons to provide input. The AMS will continue to oversee the Committee's budget and assessment recommendations, with further rulemaking to be undertaken if modifications are deemed necessary in the future.
Indefinite Application and Future Oversight
The newly increased assessment rate will remain in effect indefinitely, applying to the 2024-2025 fiscal period and all subsequent periods, until it is modified, suspended, or terminated by the AMS. This indefinite application provides a degree of financial predictability for the Committee, yet it does not preclude ongoing review. The Committee is mandated to meet annually to recommend a budget of expenses and to consider potential modifications to the assessment rate. These meetings remain open to the public, fostering transparency and allowing stakeholders to express their views. The AMS retains the ultimate authority to evaluate these recommendations and other available information to determine the necessity of any future adjustments. This continuous review process is crucial for adapting to the dynamic economic and environmental conditions that define Florida's citrus industry.
