USDA proposes one at-large sheller region and a 5% late fee under the federal pecan order; comments due Dec. 9

The roster the Agricultural Marketing Service (AMS) posts for the American Pecan Council shows one empty chair on the sheller side: the alternate for the Western Region’s Seat 1^[6]. A proposed rule publishing November 9 would stop sorting sheller seats by region and size, add a 5% late charge and 1% monthly interest on overdue handler assessments, and require monthly reports of pecans moved between handlers^[1]. Comments are due December 9 by this report’s count^[1].

What the proposal changes

Federal Marketing Order No. 986 has covered pecans grown in 15 states since August 2016, run locally by the council under USDA oversight and paid for by handler assessments^[3]. The council has 17 members: nine growers, six shellers, one accumulator and one public member^[2]. Under current rules, each of three regions holds two sheller seats^[2]:

• Eastern Region: Alabama, Florida, Georgia, North Carolina and South Carolina
• Central Region: Arkansas, Kansas, Louisiana, Mississippi, Missouri, Oklahoma and Texas
• Western Region: Arizona, California and New Mexico

Within each region, Seat 1 goes to a sheller that handled more than 12.5 million pounds of inshell pecans in the prior fiscal year, and Seat 2 to one that handled 12.5 million pounds or less^[2]. To count as a sheller at all, a business must shell more than 1 million pounds a year^[2].

The proposal, Doc. No. AMS-SC-25-0881, would add a new § 986.145 that makes all 15 states a single sheller region with “six at-large sheller members and alternates”^[1]. A new § 986.146 would let every sheller nominate and vote for every seat^[1]. For the first election under the new rules, Seats 1 through 3 would serve two-year terms and Seats 4 through 6 full four-year terms, so half the sheller seats turn over every two years after that^[1].

Two handler rules change as well. Section 986.162 now requires the APC Form 4 for an inter-handler transfer once per fiscal year, in the month after the first transfer between two handlers, and asks only for the parties’ names and which one takes on the reporting and assessment duty^[2]. The revised section would require the form by the 10th of the month after each month with a transfer, and would add the weight and type of inshell pecans transferred^[1]. A new § 986.163 would impose the late charge on assessments not received within 30 calendar days of the due date, with interest charged on “the outstanding balance, including any late payment and accrued interest” until the balance is paid^[1]. AMS would also strip two redundant paragraphs from § 986.178, left over from a 2020 reporting rule^[1].

The council voted 14-0 for the package on August 14, 2025^[1].

Why fewer shellers means fewer candidates

The 2016 order built its seat map around regional balance, which AMS says was “a principal issue” when the program was created^[1]. The industry has since shrunk at the shelling end. AMS reports fewer than 30 shellers in business as of August 2025, down from 50 in 2016, and says the council has had several sheller vacancies over recent nomination cycles^[1].

The council looked at lowering the 12.5 million-pound line for a large-sheller seat and concluded there still would not be enough eligible shellers^[1]. It had earlier backed a plan to drop regions but keep size classes, and found that would not end repeat vacancies because “few remaining shellers meet the large sheller definition”^[1]. It also told AMS that many remaining shellers buy from several regions and run plants in more than one, which makes a regional label less meaningful^[1].

The roster reflects that. It lists sheller members with addresses in Elgin, Ill., in the Central Region, and in Dothan, Ala., in the Western Region^[6]. The February 2026 nomination call for terms starting October 1 sought a small-sheller member and alternate in each of the three regions^[5].

In the field

Growers are not touched on the seat side. AMS says the grower segment has not seen the same changes, so grower regions, grower seats and grower nomination rules stay as written^[1]. That keeps three grower seats per region, two for growers with at least 176 pecan acres and one for growers with fewer^[2].

The costs fall on handlers. About 110 handlers and roughly 4,500 growers operate under the order, by AMS’s count^[1]. The current assessment is $0.01 a pound on improved varieties and nothing on native, seedling and substandard pecans, a rate set in 2022 when the council cut its budget after a separate pecan research and promotion program began^{[4, 2]}. By this report’s arithmetic, a handler owing $10,000 on 1 million pounds of improved pecans that pays more than 30 days late would add a $500 charge, then $105 in interest for the first month. AMS states that the charges reach only handlers who do not pay on time, and that until now the only recourse against chronic late payers has been a full compliance case seeking civil penalties^[1]. The council says the terms match those in the industry’s federal research and promotion program^[1].

Monthly transfer reporting lands during the busiest stretch. Transfers typically happen from November to February, so for many handlers the requirement would apply about four months a year^[1]. AMS says the transfer option has been especially useful to small handlers selling to larger ones, and the council weighed and rejected scrapping the report because small handlers might struggle to track assessments on their own^[1].

The rule arrives with inventories building. FreshPlaza, reporting the council’s August 2026 position report, put 2025/26 shipments at 343.7 million pounds, down 10.9% from the year before, with exports down 19.6% to 67.0 million pounds and ending inventory up 6.4% to 184.2 million pounds^[8]. Those monthly handler reports are the raw material for the council’s position reports and data dashboards, which the council promoted to growers this spring as part of its case for the program^[9].

Who is for it, and what AMS weighed

AMS’s own analysis is the main record of the tradeoffs. It concedes that late charges and interest “might be more burdensome on small handlers that are already experiencing cash flow problems,” and that monthly reports “could increase the reporting burden for some handlers”^[1]. The council answered both points: penalties scale with each handler’s pro rata share, and the transfer form uses information handlers already have^[1]. On seats, the council’s argument is that an open slate brings more shellers into the running, not fewer^[1]. AMS says the National Pecan Shellers Association also expressed support^[1]. The record this piece draws on includes no opposing comment.

The order itself is up for its five-year check. AMS ran a continuance referendum among eligible growers from July 6 to August 3, 2026; USDA would consider ending the order if less than two-thirds of growers voting, and less than two-thirds of the volume represented, favored continuing it^[7]. The record this piece draws on does not include the result.

On Capitol Hill, pecan interests have been working the farm bill rather than the order. The National Pecan Federation’s Washington report noted that the House-passed Farm, Food, and National Security Act of 2026 would widen eligibility for the Tree Assistance Program, and that AMS bought $9,955,723.56 of pecans under Section 32 in April^[10]. Where that bill stands in the lame duck is covered in earlier coverage.

What to watch

• November 9, 2026: Official publication of FR Doc. 2026-22826^[1].
• December 9, 2026 (this report’s count): Comments due at regulations.gov or MarketingOrderComment@usda.gov^[1].
• Final rule: No date set. The single sheller region and new nomination procedure start with the first nomination cycle after the rule takes effect^[1].
• Forms: Revised sheller nomination forms SC-308 and SC-310 and APC Form #4 have gone to the Office of Management and Budget for approval^[1].

Two drafting questions remain open in the text. The proposal leaves § 986.48 unchanged, and that section still requires each sheller member to be a sheller “in the region and in the classification for which nominated”^{[2, 1]}. And it does not say what happens to sheller members already serving terms that run past the first single-region election^[1].