[Federal Register: November 19, 2002 (Volume 67, Number 223)]
[Rules and Regulations]
[Page 69668-69670]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19no02-3]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1124
[Doc. No. AO-368-A29; DA-01-06]
Milk in the Pacific Northwest Marketing Area; Interim Order
Amending the Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule.
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SUMMARY: This order amends certain pooling provisions of the Pacific
Northwest Federal milk order on an interim basis. This interim order
implements amendments to the Pool plant provisions which establish a
cooperative manufacturing plant provision and a procedure for ``system
pooling'' by cooperative manufacturing plants. For the Producer milk
provisions, this interim order implements amendments that establish a
standard of at least 3 days' milk production for the number of days
during the month that the milk of a producer needs to be delivered to a
pool plant (a ``touch-base'' standard) in order for the rest of the
milk of that producer to be eligible to be diverted to nonpool plants,
provides authority to the Market Administrator to adjust the ``touch-
base'' standard, and establishes a year-round diversion limit of 80
percent of total receipts for pool plants. More than the required
number of producers in the Pacific Northwest marketing area have
approved the issuance of the interim order as amended.
EFFECTIVE DATE: January 1, 2003.
FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Marketing Specialist,
Order Formulation and Enforcement Branch, USDA/AMS/Dairy Programs, Stop
0231-Room 2971, 1400 Independence Avenue, SW., Washington, DC 20250-
0231, (202) 690-1366, e-mail address Gino.Tosi@usda.gov.
SUPPLEMENTARY INFORMATION: This administrative rule is governed by the
provisions of Sections 556 and 557 of Title 5 of the United States Code
and, therefore, is excluded from the requirements of Executive Order
12866.
This interim rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have retroactive
effect. This rule will not preempt any state or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with the rule.
The Agricultural Marketing Agreement Act of 1937, as amended (7
U.S.C. 601-674), provides that administrative proceedings must be
exhausted before parties may file suit in court. Under section
608c(15)(A) of the Act, any handler subject to an order may request
modification or exemption from such order by filing with the Department
a petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with the law. A handler is afforded the opportunity for a hearing on
the petition. After a hearing, the Department would rule on the
petition. The Act provides that the District Court of the United States
in any district in which the handler is an inhabitant, or has its
principal place of business, has jurisdiction in equity to review the
Department's ruling on the petition, provided a bill in equity is filed
not later than 20 days after the date of the entry of the ruling.
Small Business Consideration
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.), the Agricultural Marketing Service has considered the economic
impact of this action on small entities and has certified that this
interim rule will not have a significant economic impact on a
substantial number of small entities. For the purpose of the Regulatory
Flexibility Act, a dairy farm is considered a ``small business'' if it
has an annual gross revenue of less than $750,000, and a dairy products
manufacturer is a ``small business'' if it has fewer than 500
employees. For the purposes of determining which dairy farms are
``small businesses,'' the $750,000 per year criterion was used to
establish a production guideline of 500,000 pounds per month. Although
this guideline does not factor in additional monies that may be
received by dairy producers, it should be an inclusive standard for
most ``small'' dairy farmers. For purposes of determining a handler's
size, if the plant is part of a larger company operating multiple
plants that collectively exceed the 500-employee limit, the plant will
be considered a large business even if the local plant has fewer than
500 employees.
Prior documents in this proceeding:
Notice of Hearing: Issued November 14, 2001; published November 19,
2001 (66 FR 57889).
Tentative Final Decision: Issued August 30, 2002; published
September 6, 2002 (67 FR 56936).
Findings and Determinations
The findings and determinations hereinafter set forth supplement
those that were made when the Pacific Northwest order was first issued
and when it was amended. The previous findings and determinations are
hereby ratified and confirmed, except where they may conflict with
those set forth herein.
The following findings are hereby made with respect to the Pacific
Northwest order:
(a) Findings upon the basis of the hearing record. Pursuant to the
provisions of the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), and the applicable rules of practice and
procedure governing the formulation of marketing agreements and
marketing orders (7 CFR part 900), a public hearing was held upon
certain proposed amendments to the tentative marketing agreement and to
the order regulating the handling of milk in the Pacific Northwest
marketing area.
Upon the basis of the evidence introduced at such hearing and the
record thereof it is found that:
(1) The Pacific Northwest order, as hereby amended on an interim
basis, and all of the terms and conditions thereof, will tend to
effectuate the declared policy of the Act;
(2) The parity prices of milk, as determined pursuant to section 2
of the Act, are not reasonable in view of the price of feeds, available
supplies of feeds, and other economic conditions which affect market
supply and demand for milk in the marketing area, and the minimum
prices specified in the order, as hereby amended on an interim basis,
are such prices as will reflect the aforesaid factors, insure a
sufficient quantity of pure and wholesome milk, and be in the public
interest; and
(3) The Pacific Northwest order, as hereby amended on an interim
basis, regulates the handling of milk in the same manner as, and is
applicable only to persons in the respective classes of industrial and
commercial activity specified in, a marketing agreement upon which a
hearing has been held.
(b) Additional Findings. It is necessary and in the public interest
to make these interim amendments to the Pacific Northwest order
effective January 1, 2003. Any delay beyond that date would tend to
disrupt the orderly
[[Page 69669]]
marketing of milk in the aforesaid marketing area.
The interim amendments to these orders are known to handlers. The
final decision containing the proposed amendments to these orders was
issued on August 30, 2002.
The changes that result from these interim amendments will not
require extensive preparation or substantial alteration in the method
of operation for handlers. In view of the foregoing, it is hereby found
and determined that good cause exists for making these interim order
amendments effective on January 1, 2003. It would be contrary to the
public interest to delay the effective date of these amendments for 30
days after their publication in the Federal Register. (Sec. 553(d),
Administrative Procedure Act, 5 U.S.C. 551-559.)
(c) Determinations. It is hereby determined that:
(1) The refusal or failure of handlers (excluding cooperative
associations specified in sec. 8c(9) of the Act) of more than 50
percent of the milk, which is marketed within the specified marketing
area, to sign a proposed marketing agreement, tends to prevent the
effectuation of the declared policy of the Act;
(2) The issuance of this interim order amending the Pacific
Northwest order is the only practical means pursuant to the declared
policy of the Act of advancing the interests of producers as defined in
the order as hereby amended;
(3) The issuance of the interim order amending the Pacific
Northwest order is favored by at least two-thirds of the producers who
were engaged in the production of milk for sale in the marketing area.
List of Subjects in 7 CFR Part 1124
Milk marketing orders.
Order Relative to Handling
It is therefore ordered, that on and after the effective date
hereof, the handling of milk in the Pacific Northwest marketing area
shall be in conformity to and in compliance with the terms and
conditions of the order, as amended, and as hereby further amended on
an interim basis, as follows:
The authority citation for 7 CFR part 1124 reads as follows:
Authority: 7 U.S.C. 601-674.
PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA
1. Section 1124.7 is amended by:
a. Removing paragraphs (c)(2) and (c)(3);
b. Redesignating paragraph (c)(4) as (c)(2);
c. Adding new paragraphs (d) and (f); and
d. Revising paragraph (g).
The revisions and additions read as follows:
Sec. 1124.7 Pool plant.
* * * * *
(d) A manufacturing plant located within the marketing area and
operated by a cooperative association, or its wholly owned subsidiary,
if, during the month, or the immediately preceding 12-month period
ending with the current month, 20 percent or more of the producer milk
of members of the association (and any producer milk of nonmembers and
members of another cooperative association which may be marketed by the
cooperative association) is physically received in the form of bulk
fluid milk products (excluding concentrated milk transferred to a
distributing plant for an agreed-upon use other that Class I) at plants
specified in paragraph (a) or (b) of this section either directly from
farms or by transfer from supply plants operated by the cooperative
association, or its wholly owned subsidiary, and from plants of the
cooperative association, or its wholly owned subsidiary, for which pool
plant status has been requested under this paragraph subject to the
following conditions:
(1) The plant does not qualify as a pool plant under paragraph (a),
(b), or (c) of this section or under comparable provisions of another
Federal order; and
(2) The plant is approved by a duly constituted regulatory agency
for the handling of milk approved for fluid consumption in the
marketing area.
(3) A request is filed in writing with the market administrator
before the first day of the month for which it is to be effective. The
request will remain in effect until a cancellation request is filed in
writing with the market administrator before the first day of the month
for which the cancellation is to be effective.
* * * * *
(f) A system of two or more plants identified in Sec. 1124.7(d)
operated by one or more cooperative handlers may qualify for pooling by
meeting the above shipping requirements subject to the following
additional requirements:
(1) The cooperative handler(s) establishing the system submits a
written request to the market administrator on or before the first day
of the month for which the system is to be effective requesting that
such plants qualify as a system. Such request will contain a list of
the plants participating in the system in the order, beginning with the
last plant, in which the plants will be dropped from the system if the
system fails to qualify. Each plant that qualifies as a pool plant
within a system shall continue each month as a plant in the system
until the handler(s) establishing the system submits a written request
before the first day of the month to the market administrator that the
plant be deleted from the system or that the system be discontinued.
Any plant that has been so deleted from a system, or that has failed to
qualify in any month, will not be part of any system. In the event of
an ownership change or the business failure of a handler that is a
participant in the system, the system may be reorganized to reflect
such a change if a written request to file a new marketing agreement is
submitted to the market administrator; and
(2) If a system fails to qualify under the requirement of this
paragraph, the handler responsible for qualifying the system shall
notify the market administrator of which plant or plants will be
deleted from the system so that the remaining plants may be pooled as a
system. If the handler fails to do so, the market administrator shall
exclude one or more plants, beginning at the bottom of the list of
plants in the system and continue up the list as necessary until the
deliveries are sufficient to qualify the remaining plants in the
system.
(g) The applicable shipping percentage of paragraphs (c) and (d) of
this section may be increased or decreased by the market administrator
if the market administrator finds that such adjustment is necessary to
encourage needed shipments or to prevent uneconomic shipments. Before
making such a finding, the market administrator shall investigate the
need for adjustment either on the market administrator's own initiative
or at the request of interested parties if the request is made in
writing at least 15 days prior to the month for which the requested
revision is desired to be effective. If the investigation shows that an
adjustment of the shipping percentages might be appropriate, the market
administrator shall issue a notice stating that an adjustment is being
considered and invite data, views and arguments. Any decision to revise
an applicable shipping percentage must be issued in writing at least
one day before the effective date.
* * * * *
2. Section 1124.13 is amended by:
a. Redesignating paragraphs (e)(1) through (5) as paragraphs (e)(2)
through (6);
b. Adding a new paragraph (e)(1); and
[[Page 69670]]
c. Revising redesignated paragraphs (e)(2),(e)(5), and (e)(6).
The revisions and additions read as follows:
Sec. 1124.13 Producer Milk.
* * * * *
(e) * * *
(1) Milk of a dairy farmer shall not be eligible for diversion
unless at least 3 days' production of such dairy farmer's production is
physically received at a pool plant during the month.
(2) Of the quantity of producer milk received during the month
(including diversions, but excluding the quantity of producer milk
received from a handler described in Sec. 1000.9(c)) the handler
diverts to nonpool plants not more than 80 percent.
* * * * *
(5) Any milk diverted in excess of the limits prescribed in
paragraph (e)(2) of this section shall not be producer milk. If the
diverting handler or cooperative association fails to designate the
dairy farmers' deliveries that are not to be producer milk, no milk
diverted by the handler or cooperative association during the month to
a nonpool plant shall be producer milk. In the event some of the milk
of any producer is determined not to be producer milk pursuant to this
paragraph, other milk delivered by such producer as producer milk
during the month will not be subject to Sec. 1124.12(b)(5).
(6) The delivery day requirement in paragraph (e)(1) of this
section and the diversion percentage in paragraph (e)(2) of this
section may be increased or decreased by the market administrator if
the market administrator finds that such revision is necessary to
assure the orderly marketing and efficient handling of milk in the
marketing area. Before making such finding, the market administrator
shall investigate the need for the revision either on the market
administrator's own initiative or at the request of interested persons
if the request is made in writing at least 15 days prior to the month
for which the requested revision is desired to be effective. If the
investigation shows that a revision might be appropriate, the market
administrator shall issue a notice stating that the revision is being
considered and inviting written data, views, and arguments. Any
decision to revise the delivery day requirement or the diversion
percentage must be issued in writing at least one day before the
effective date.
Dated: November 8, 2002.
A. J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-29032 Filed 11-18-02; 8:45 am]
BILLING CODE 3410-02-P