The U.S. Department of Agriculture's Agricultural Marketing Service (AMS) has taken a decisive step regarding the Federal marketing order for South Texas onions, temporarily suspending the order's continuance referendum requirement. This interim final rule, effective May 26, 2026, stays the provision requiring a referendum every six years, specifically delaying the 2026 vote until January 1, 2032. The move is a direct response to a recommendation from the South Texas Onion Committee and aims to streamline regulatory processes while avoiding potential confusion among producers.
Background of the Marketing Order
Marketing Order No. 959, codified under 7 CFR part 959, regulates the handling of onions grown in South Texas under the authority of the Agricultural Marketing Agreement Act of 1937. This order is locally administered by the South Texas Onion Committee, a body composed of producers and handlers from within the regulated production area. The order includes a provision, Section 959.84(d), which mandates a continuance referendum every six years to ascertain whether producers favor its ongoing operation. The last such referendum occurred in 2020, setting the stage for the next one in 2026.
The Committee's Recommendation and AMS's Rationale
The decision to suspend the referendum did not arise in isolation. On October 30, 2024, the South Texas Onion Committee recommended that the marketing order undergo formal rulemaking for amendments. Subsequently, on November 18, 2025, the Committee unanimously voted to request the suspension of the 2026 continuance referendum. The primary concern articulated by the Committee was the potential for significant confusion among voting producers if two separate referenda - one for continuance and one for potential amendments stemming from the rulemaking process - were to occur within a few months of each other.
AMS concurred with the Committee's assessment. The agency noted that it commenced a formal rulemaking process to amend the marketing order via a notice of hearing published on January 23, 2026. This rulemaking process is anticipated to be extensive and may itself include a producer referendum. Conducting the mandated continuance referendum during the same period would not only risk voter confusion but would also deny the industry adequate time to evaluate the impact of any newly implemented amendments before being asked to vote on the order's continuation. Therefore, AMS determined that holding the continuance referendum as scheduled would not "tend to effectuate the declared policy of the Act" as per Section 959.84(b).
Details of the Temporary Suspension
By temporarily suspending the continuance referendum requirement under 7 CFR 959.84(d), AMS aims to provide a clear path forward for the regulatory framework governing South Texas onions. The suspension is set to last until January 1, 2032. This timeline is intentional, designed to align with the original six-year cycle of continuance referenda. The agency considered the alternative of holding the continuance referendum immediately after the formal rulemaking but concluded that this would still lead to multiple referenda in a short timeframe, perpetuating the risk of voter confusion and limiting the industry's ability to assess new rules.
The extended suspension offers several benefits. It ensures that producers are not overwhelmed by multiple votes on complex issues. It provides the South Texas Onion Committee and the broader industry with ample opportunity to operate under and evaluate any amendments that may result from the ongoing rulemaking process. Furthermore, it maintains the structural integrity of the order's original referendum timetable, with the next continuance referendum now firmly slated for 2032.
Economic Considerations and Stakeholder Impact
In its Regulatory Flexibility Analysis, AMS considered the economic impact of this rule, particularly on small entities. The agency identified approximately 65 producers and 25 handlers of South Texas onions operating within the regulated area. Based on 2024 data, the majority of these producers and handlers are classified as small businesses under the Small Business Administration's definitions, with average annual receipts well below the thresholds of $3.75 million for producers and $34 million for handlers.
The interim rule's temporary suspension of the referendum requirement is not expected to impose any additional burdens on these small entities. Instead, it is designed to alleviate potential confusion and allow for a more orderly regulatory environment. By preventing redundant and potentially confusing votes, the action supports the continued efficient operation of the marketing order, which is formed through the collective action of these predominantly small businesses. AMS is actively seeking comments on this interim rule until June 25, 2026, before issuing a final rule, ensuring stakeholders have an opportunity to provide input.
