(a) Minimum standards for packaged olives. No handler shall use processed olives in the production of packaged olives or ship such packaged olives unless they have first been inspected as required pursuant to § 932.53 and meet each of the following applicable requirements:

(1) Canned ripe olives, other than those of the “tree-ripened” type, shall grade at least U.S. Grade C as such grade is defined in the U.S. Standards for Grades of Canned Ripe Olives (7 CFR part 52) or subsequent amendments thereto, or as modified by the committee, with approval of the Secretary, for purposes of this part.

(2) Except as provided in § 932.51(a) (1) and (2), canned whole ripe olives, other than those of the “tree-ripened” type, shall conform to the single size designations set forth in the U.S. Standards for Grades of Canned Ripe Olives (7 CFR part 52) or subsequent amendments thereto, or as modified by the committee, with the approval of the Secretary, and shall be of a size not smaller than the following applicable size requirements, tolerances and percentages: Provided, That the Secretary, on the basis of a recommendation of the committee or other available information, may change such sizes, tolerances or percentages:

(i) With respect to variety group 1 olives, except the Ascolano, Barouni, and St. Agostino varieties, the individual fruits shall each weigh no less than 1/75 pound, except that (A) for olives of the extra large size designation, not more than 25 percent, by count, of such olives may weigh less than 1/75 pound each including not more than 10 percent, by count, of such olives that weigh less than 1/82 pound each; and (B) for olives of any designation except the extra large size, not more than 5 percent, by count, of such olives may weigh less than 1/75 pound each;

(ii) With respect to variety group 1 olives of the Ascolano, Barouni and St. Agostino varieties, the individual fruits shall each weigh not less than 1/88 pound except that (A) for olives of the extra large size designation, not more than 25 percent, by count, of such olives may weigh less than 1/88 pound each including not more than 10 percent, by count, of such olives that weigh less than 1/98 pound each, and (B) for olives of any size designation, except the extra large size, not more than 5 percent, by count, of such olives may weigh less than 1/88 pound each;

(iii) With respect to variety group 2 olives, except the Obliza variety, the individual fruits shall each weigh not less than 1/140 pound except that (A) for olives of the small size designation, not more than 35 percent, by count, of such olives may weigh less than 1/140 pound each including not more than 7 percent, by count, of such olives that weigh less than 1/160 pound each; and (B) for olives of any size designation, except the small size, not more than 5 percent, by count, of such olives may weigh less than 1/140 pound each; and

(iv) With respect to Variety Group 2 olives of the Obliza variety, the individual fruits shall each weigh not less than 1/121 pound except that (a) for olives of the medium size designation, not more than 35 percent, by count, of such olives may weigh less than 1/121 pound each including not more than 7 percent, by count, of such olives that weigh less than 1/135 pound each; and (b) for olives of any size designation, except the medium size, not more than 5 percent, by count, of such olives may weigh less than 1/121 pound each.

(3) Subject to the provisions set forth in paragraph (a)(4) of this section and § 932.51(a) (1) and (2), processed olives to be used in the production of canned pitted ripe olives, other than those of the “tree-ripened” type, shall meet the same requirements as prescribed pursuant to paragraph (a)(2) of this section: Provided, That olives smaller than those so prescribed, as recommended annually by the committee and approved by the Secretary, may be authorized for limited use but any such limited use size olives so used shall be not smaller than the following applicable minimum size: Provided further, That each such minimum size may also include a size tolerance (specified as a percent) as recommended by the committee and approved by the Secretary.

(i) Variety Group 1 olives, except the Ascolano, Barouni, and St. Agostino varieties, of a size which individually weigh 1/90 pound;

(ii) Variety Group 1 olives of the Ascolano, Barouni, or St. Agostino varieties, of a size which individually weigh 1/140 pound;

(iii) Variety Group 2 olives, except the Obliza variety, of a size which individually weigh 1/180 pound;

(iv) Variety Group 2 olives of the Obliza variety, of a size which individually weigh 1/140 pound.

(4) The Secretary may, upon recommendation of the committee, restrict the total quantity of limited use size olives for limited use during any crop year. Such restricted quantity shall be apportioned among the handlers by applying a percentage, established annually by the Secretary upon recommendation by the committee, to each handler's total receipts of limited use size olives during such crop year.

(5) Canned ripe olives of the “tree-ripened” type and green olives shall meet such grade, size, and pack requirements as may be established by the Secretary based upon the recommendation of the committee or other available information.

(6) The size designations used in this section mean the size designations described in (a)(1)(ii) of § 932.51.

(7) For the purposes of this part the committee may, with the approval of the Secretary, specify the styles of olives, including the requirements with respect thereto, for limited use.

(b) Disposition requirements for limited use size olives. (1) The requirements of this paragraph are in addition to and not in substitution of the requirements of § 932.51(a)(5).

(2) Each handler shall, under the supervision of the Specialty Crops Inspection Division, USDA, or the Federal or Federal-State Inspection Service, dispose of limited use size olives into limited use or into noncanning use: Provided, That whenever a handler's use of limited use size olives is restricted pursuant to § 932.52(a)(4), such handler shall dispose of into noncanning use that quantity of such limited use size olives which is in excess of the quantity permitted for limited use.

(3) Notwithstanding the provisions of paragraph (b)(2) of this section, a handler may meet any deficit in his obligation to dispose of limited use size olives into noncanning use pursuant to this paragraph by disposing of, under supervision of the inspection service, an equivalent quantity of olives of a size larger than the limited use size and of a quality better than culls.

(4) Each handler shall hold at all times a quantity of olives eligible to meet the disposition requirements of this paragraph less any quantity previously disposed of as specified in paragraphs (b) (2) and (3) of this section.