I don't know. It sure looks like you are exempt if you process fewer than 20,000 a year and don't sell out-of-state but whether you have to apply for that exemption, I don’t know. You could call the USDA and ask them.
But I’d be more concerned about California requirements, not the Federal ones. State requirements are usually a lot more stringent than Federal requirements. If you contact the California health department or whoever regulates that, they should be able to tell you California requirements but they may not be real forthcoming on Federal requirements. What I suggest is contact your county extension agent and talk to them about the Federal and State requirements. The agent probably won’t know the answers off the top of their heads but they should know who to contact to get accurate information. Some agents are better than others but this kind of stuff is why they have a job, to get answers to people like you.