During the period beginning June 5 and ending July 31 each season, no person shall ship any lot of potatoes produced in the production area unless such potatoes meet the requirements of paragraphs (a) and (b) of this section or unless such potatoes are handled in accordance with paragraphs (c) and (d) or (e) of this section.

Minimum grade and size requirements. All round white varieties of potatoes shall be U.S. No. 2 or better grade, 11/2 inches (38.1 mm) minimum diameter.

Inspection. Except as provided in paragraphs (c) and (e), no handler shall ship any round white potatoes unless an appropriate inspection certificate covering them has been issued by the Federal-State Inspection Service and the certificate is valid at the time of shipment.

Special purpose shipments. The grade, size, and inspection requirements set forth in paragraphs (a) and (b) of this section shall not apply to potatoes shipped for canning, freezing, “other processing” as hereinafter defined, livestock feed, charity or to shipments of round red, long white or Russet variety potatoes. However, the handler of any potatoes shipped for such special purposes shall comply with the safeguard requirements of paragraph (d) of this section.

Safeguards. Each handler making shipments of potatoes for canning, freezing, “other processing,” livestock feed or charity, or making shipments of round red, long white or Russet variety potatoes in accordance with paragraph (c) of this section shall:

Notify the committee of the handler's intent to ship potatoes pursuant to paragraph (c) of this section by applying forms furnished by the committee for a Certificate of Privilege applicable to such special purpose shipments.

Obtain an approved Certificate of Privilege;

Prepare on forms furnished by the committee a special purpose shipment report for each such individual shipment; and

Forward copies of such special purpose shipment report to the committee office and to the receiver with instructions to sign and return a copy to the committee's office. Failure of the handler or receiver to report such shipments by promptly signing and returning the applicable special purpose shipment report to the committee office shall be cause for suspension of such handler's Certificate of Privilege applicable to such special purpose shipments.

Minimum quantity exemption. Each handler may ship up to, but not to exceed five hundredweight of potatoes any day without regard to the inspection and assessment requirements of this part, but this exception shall not apply to any portion of a shipment that exceeds five hundredweight of potatoes.

Definitions. The term U.S. No. 2 shall have the same meaning as when used in the U.S. Standards for Grades of Potatoes as amended (7 CFR 2851.1540-2851.1566), including the tolerances set forth in it. The term other processing has the same meaning as the term appearing in the act and includes, but is not restricted to, potatoes for dehydration, chips, shoestrings, starch, and flour. It includes only that preparation of potatoes for market which involves the application of heat or cold to such an extent that the natural form or stability of the commodity undergoes a substantial change. The act of peeling, cooling, slicing, dicing, or applying material to prevent oxidation does not constitute “other processing.” All other terms used in this section shall have the same meaning as when used in Marketing Agreement No. 104 and this part, both as amended.