Count food processors as yet anoth er big U.S. industry learning that there are worse things than federal regulation. State regulations that force corporations to comply with 50 sets of different and sometimes conflicting rules, for instance. Currently, there are no federal rules covering the environmental aspects of food packaging, which is a major source of solid waste. So states are stepping into the breach, with Massachusetts and Florida, among others, considering requirements on the amount of recycled material that must be used in packaging. This is prompting food companies to seek regulation by the Federal Trade Commission--which would preempt states from imposing their own rules. "The whole industry is based on the premise that we can market in all 50 states," says Jeffrey Nedelman of Grocery Manufacturers of America. But for the moment, at least, the industry's hopes are frustrated by the Bush Administration's moratorium on new regulations--a move designed to help business.