[Federal Register: December 10, 2004 (Volume 69, Number 237)]
[Rules and Regulations]
[Page 71697-71701]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10de04-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1005, 1006, and 1007
[Docket No. AO-388-A16, AO-356-A38, and AO-366-A45; DA-04-07]
Milk in the Appalachian, Florida, and Southeast Marketing Areas;
Order Amending the Orders
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final Rule.
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SUMMARY: This final rule amends the Appalachian, Florida, and Southeast
Federal milk marketing orders (Orders 5, 6, and 7). Specifically, the
final rule implements a temporary supplemental charge on Class I milk
that will be disbursed to handlers who incurred extraordinary
transportation costs for bulk milk movements in and to Orders 5, 6, and
7 as a result of hurricanes Charley, Frances, Ivan and Jeanne. The
amendments are based on record evidence of a public hearing held on
October 7, 2004. More than the required number of dairy farmers
approved the issuance of the amended orders.
DATES: Effective Date: December 10, 2004.
FOR FURTHER INFORMATION CONTACT: Antoinette M. Carter, Marketing
Specialist, USDA/AMS/Dairy Programs, Order Formulation and Enforcement
Branch, STOP 0231--Room 2971, 1400 Independence Avenue, SW.,
Washington, DC 20250-0231, (202) 690-3465, e-mail address:
antoinette.carter@usda.gov.
SUPPLEMENTARY INFORMATION: This administrative action 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 final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. This rule is not intended to have a 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.
Regulatory Flexibility Act
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
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.
[[Page 71698]]
During August 2004, the most recent representative month, the milk
of 7,239 dairy farmers was pooled under the Appalachian (Order 5),
Florida (Order 6), and Southeast (Order 7) milk orders (3,400 Order 5
dairy farmers, 267 Order 6 dairy farmers, and 3,572 Order 7 dairy
farmers, respectively). Of the 7,239 dairy farmers, 80 percent met the
definition of small business. Specifically, the number of dairy farmers
considered small businesses for Order 5, Order 6, and Order 7 were
3,230 or 95 percent, 134 or 50 percent, and 3,407 or 95 percent,
respectively.
During August 2004, there were 65 fully regulated plants under
Orders 5, 6, and 7. Of the 65 plants, 7 were considered small
businesses. Specifically, there were 25 Order 5 plants (of which 2 were
small businesses), 12 Order 6 plants (of which 3 were small
businesses), and 28 Order 7 plants (of which 2 were small businesses).
The amendments in this final rule will provide temporary
reimbursement to handlers (cooperative associations and proprietary
handlers) who incurred extraordinary transportation expenses for bulk
milk movements resulting from the impact of hurricanes Charley,
Frances, Ivan, and Jeanne on the Southeastern United States,
particularly the State of Florida. The proposed amendments were
requested by Dairy Farmers of America, Inc., Lone Star Milk Producers,
Inc., Maryland & Virginia Milk Producers Cooperative Association, Inc.,
and Southeast Milk, Inc. The dairy farmer members of these four
cooperatives supply the majority of the milk pooled under the
Appalachian, Florida, and Southeast orders. The final rule will
implement, for a 3-month period beginning January 1, 2005, a
supplemental increase in the Class I milk price at a rate not to exceed
$.04 per hundredweight of milk in the Appalachian and Southeast orders,
and a rate not to exceed $.09 per hundredweight of milk in the Florida
order. The amount generated through the Class I milk increase will be
disbursed during February 2005 through April 2005 to qualifying
handlers who incurred extraordinary transportation costs as a result of
the hurricanes. The reimbursement for extraordinary transportation
costs will be disbursed to qualifying handlers on an actual
transportation costs basis or at a rate of $2.25 per loaded mile,
whichever is less.
The aforementioned hurricanes occurred during a 7-week period of
time and disrupted the orderly flow of milk movements in and to the
Appalachian, Florida, and Southeast marketing areas. The four
hurricanes caused handlers in the southeastern markets, particularly in
the Florida marketing area, to experience disruptions in moving bulk
milk to supply the Class I (fluid milk) needs of the individual
marketing areas.
One of the functions of the Federal milk order program is to
provide for the orderly exchange of milk between the dairy farmer and
the handler (first buyer) to ensure the Class I needs of the market are
met. The record evidence clearly reveals that the movements of bulk
milk for Orders 5 and 7, and particularly Order 6 were disrupted due to
the hurricanes. Accordingly, the amendments adopted in this final rule
will provide temporary transportation cost reimbursement to handlers
who incurred additional transportation expenses for bulk milk movements
that were disrupted as a result of extraordinary weather conditions in
Orders 5, 6, and 7.
The amendments will provide reimbursement to handlers for
transportation expenses totaling over $1.6 million for movements of
bulk milk due to the hurricanes. The supplemental increase in the
minimum price of Class I milk at a maximum rate of $.09 per
hundredweight for Order 6 is anticipated to increase the price of a
gallon of milk by not more than $0.0078 (i.e., less than 1-cent) during
each month of the 3-month period. Likewise, a supplemental increase at
a maximum rate of $.04 per hundredweight for Orders 5 and 7 is
anticipated to increase the price of a gallon of milk by not more than
$0.0034 (i.e., less than 1-cent) during each month of the 3-month
period. The estimated impact on the price per gallon of milk was
calculated by converting the hundredweight value to gallons using 8.62
pounds of milk per gallon.
Handlers in Orders 5, 6, and 7 should not be placed at a
competitive disadvantage because of the temporary and limited
supplemental increase in the minimum Class I milk price. The amendments
also are not expected to impact the blend price of dairy farmers.
Accordingly, the adopted amendments should not significantly impact
producers or handlers due to the limited implementation period and the
minimum increase in the Class I milk price.
Paperwork Reduction Act
A review of reporting requirements was completed under the
Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). As such, the
information collection requirements in this final rule do not require
clearance by the Office of Management and Budget (OMB) beyond the
currently approved information collections. This final rule will impose
only minimal reporting requirements on handlers applying for
reimbursement of additional transportation expenses incurred due to the
aforementioned hurricanes.
Prior documents in this proceeding:
Notice of Hearing: Issued September 28, 2004; published September
30, 2004 (69 FR 58368).
Final Decision: Issued November 15, 2004; published November 19,
2004 (69 FR 67670).
Findings and Determinations
The following findings and determinations hereinafter set forth
supplement those that were made when the Appalachian, Florida, and
Southeast orders were first issued and when they were 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 each of the
aforesaid orders:
(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 agreements and
to the orders regulating the handling of milk in the specified
marketing areas.
Upon the basis of the evidence introduced at such hearing and the
record thereof, it is found that:
(1) The said orders as hereby amended, 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 aforesaid marketing areas. The
minimum prices specified in the orders as hereby amended 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 said orders as hereby amended regulates the handling of
milk in the same manner as, and is applicable only to persons in the
respective classes of industrial or commercial activity specified in,
marketing agreements upon which a hearing has been held.
[[Page 71699]]
(b) Additional Findings. It is necessary and in the public interest
to make these amendments to the Appalachian, Florida, and Southeast
orders effective December 10, 2004. This effective date will ensure the
timely implementation of the amendments.
The amendments to these orders are known to handlers. The final
decision containing the proposed amendments to these orders was issued
on November 15, 2004.
The changes that result from these 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 theses amendments
effective December 10, 2004. 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 Section 8c(9) of the Act) of more than 50
percent of the milk that is marketed within the specified marketing
areas to sign a proposed marketing agreement tends to prevent the
effectuation of the declared policy of the Act;
(2) The issuance of this order amending the Appalachian, Florida,
and Southeast orders are the only practical means pursuant to the
declared policy of the Act of advancing the interests of producers as
defined in the orders as hereby amended;
(3) The issuance of the order amending the Appalachian, Florida,
and Southeast orders are favored by at least two-thirds of the
producers who were engaged in the production of milk for sale in each
of the marketing areas.
List of Subjects in 7 CFR Parts 1005, 1006, and 1007
Milk marketing orders.
Order Relative to Handling
0
It is therefore ordered, that on and after the effective date hereof,
the handling of milk in the Appalachian, Florida, and Southeast
marketing areas shall be in conformity to and in compliance with the
terms and conditions of the orders, as amended, and as hereby further
amended, as follows:
PARTS 1005, 1006, and 1007--[AMENDED]
0
1. The authority citation for 7 CFR parts 1005, 1006, and 1007
continues to read as follows:
Authority: 7 U.S.C. 601-674.
PART 1005--MILK IN THE APPALACHIAN MARKETING AREA
0
2. Section 1005.60 is amended by revising paragraph (a) and adding a
new paragraph (g) to read as follows:
Sec. 1005.60 Handler's value of milk.
* * * * *
(a) Multiply the pounds of skim milk and butterfat in producer milk
that were classified in each class pursuant to Sec. 1000.44(c) by the
applicable skim milk and butterfat prices, and add the resulting
amounts; except that for the months of January 2005 through March 2005,
the Class I skim milk price for this purpose shall be the Class I skim
milk price as determined in Sec. 1000.50(b) plus $0.04 per
hundredweight, and the Class I butterfat price for this purpose shall
be the Class I butterfat price as determined in Sec. 1000.50(c) plus
$0.0004 per pound. The adjustments to the Class I skim milk and
butterfat prices provided herein may be reduced by the market
administrator for any month if the market administrator determines that
the payments yet unpaid computed pursuant to paragraphs (g)(1) through
(5) and paragraph (g)(7) of this section will be less than the amount
computed pursuant to paragraph (g)(6) of this section. The adjustments
to the Class I skim milk and butterfat prices provided herein during
the months of January 2005 through March 2005 shall be announced along
with the prices announced in Sec. 1000.53(b);
* * * * *
(g) For the months of January 2005 through March 2005 for handlers
who have submitted proof satisfactory to the market administrator to
determine eligibility for reimbursement of transportation costs,
subtract an amount equal to:
(1) The cost of transportation on loads of producer milk delivered
or rerouted to a pool distributing plant which were delivered as a
result of hurricanes Charley, Frances, Ivan, and Jeanne;
(2) The cost of transportation on loads of producer milk delivered
or rerouted to a pool supply plant that was then transferred to a pool
distributing plant which were delivered as a result of hurricanes
Charley, Frances, Ivan, and Jeanne;
(3) The cost of transportation on loads of bulk milk delivered or
rerouted to a pool distributing plant from a pool supply plant which
were delivered as a result of hurricanes Charley, Frances, Ivan, and
Jeanne;
(4) The cost of transportation on loads of bulk milk delivered or
rerouted to a pool distributing plant from another order plant which
were delivered as a result of hurricanes Charley, Frances, Ivan, and
Jeanne; and
(5) The cost of transportation on loads of bulk milk transferred or
diverted to a plant regulated under another Federal order or to other
nonpool plants which were delivered as a result of hurricanes Charley,
Frances, Ivan, and Jeanne.
(6) The total amount of payment to all handlers under this section
shall be limited for each month to an amount determined by multiplying
the total Class I producer milk for all handlers pursuant to Sec.
1000.44(c) times $0.04 per hundredweight.
(7) If the cost of transportation computed pursuant to paragraphs
(g)(1) through (5) of this section exceeds the amount computed pursuant
to paragraph (g)(6) of this section, the market administrator shall
prorate such payments to each handler based on the handler's proportion
of transportation costs submitted pursuant to paragraphs (g)(1) through
(5) of this section. Transportation costs submitted pursuant to
paragraphs (g)(1) through (5) of this section which are not paid as a
result of such a proration shall be included in each subsequent month's
transportation costs submitted pursuant to paragraphs (g)(1) through
(5) of this section until paid, or until the time period for such
payments is concluded.
(8) The reimbursement of transportation costs pursuant to this
section shall be the actual demonstrated cost of such transportation of
bulk milk delivered or rerouted as described in paragraphs (g)(1)
through (5) of this section, or the miles of transportation on loads of
bulk milk delivered or rerouted as described in paragraphs (g)(1)
through (5) of this section multiplied by $2.25 per loaded mile,
whichever is less.
(9) For each handler, the reimbursement of transportation costs
pursuant to paragraph (g) of this section for bulk milk delivered or
rerouted as described in paragraphs (g)(1) through (5) of this section
shall be reduced by the amount of payments received for such milk
movements from the transportation credit balancing fund pursuant to
Sec. 1005.82.
[[Page 71700]]
PART 1006--MILK IN THE FLORIDA MARKETING AREA
0
3. Section 1006.60 is amended by revising paragraph (a) and adding a
new paragraph (g) to read as follows:
Sec. 1006.60 Handler's value of milk.
* * * * *
(a) Multiply the pounds of skim milk and butterfat in producer milk
that were classified in each class pursuant to Sec. 1000.44(c) by the
applicable skim milk and butterfat prices, and add the resulting
amounts; except that for the months of January 2005 through March 2005,
the Class I skim milk price for this purpose shall be the Class I skim
milk price as determined in Sec. 1000.50(b) plus $0.09 per
hundredweight, and the Class I butterfat price for this purpose shall
be the Class I butterfat price as determined in Sec. 1000.50(c) plus
$0.0009 per pound. The adjustments to the Class I skim milk and
butterfat prices provided herein may be reduced by the market
administrator for any month if the market administrator determines that
the payments yet unpaid computed pursuant to paragraphs (g)(1) through
(5) and paragraph (g)(7) of this section will be less than the amount
computed pursuant to paragraph (g)(6) of this section. The adjustments
to the Class I skim milk and butterfat prices provided herein during
the months of January 2005 through March 2005 shall be announced along
with the prices announced in Sec. 1000.53(b);
* * * * *
(g) For the months of January 2005 through March 2005 for handlers
who have submitted proof satisfactory to the market administrator to
determine eligibility for reimbursement of transportation costs
subtract an amount equal to:
(1) The cost of transportation on loads of producer milk delivered
or rerouted to a pool distributing plant which were delivered as a
result of hurricanes Charley, Frances, Ivan, and Jeanne;
(2) The cost of transportation on loads of producer milk delivered
or rerouted to a pool supply plant that was then transferred to a pool
distributing plant which were delivered as a result of hurricanes
Charley, Frances, Ivan, and Jeanne;
(3) The cost of transportation on loads of bulk milk delivered or
rerouted to a pool distributing plant from a pool supply plant which
were delivered as a result of hurricanes Charley, Frances, Ivan, and
Jeanne;
(4) The cost of transportation on loads of bulk milk delivered or
rerouted to a pool distributing plant from another order plant which
were delivered as a result of hurricanes Charley, Frances, Ivan, and
Jeanne; and
(5) The cost of transportation on loads of bulk milk transferred or
diverted to a plant regulated under another Federal order or to other
nonpool plants which were delivered as a result of hurricanes Charley,
Frances, Ivan, and Jeanne.
(6) The total amount of payment to all handlers under this section
shall be limited for each month to an amount determined by multiplying
the total Class I producer milk for all handlers pursuant to Sec.
1000.44(c) times $0.09 per hundredweight.
(7) If the cost of transportation computed pursuant to paragraphs
(g)(1) through (5) of this section exceeds the amount computed pursuant
to paragraph (g)(6) of this section, the market administrator shall
prorate such payments to each handler based on each handler's
proportion of transportation costs submitted pursuant to paragraphs
(g)(1) through (5) of this section. Transportation costs submitted
pursuant to paragraphs (g)(1) through (5) of this section which are not
paid as a result of such a proration shall be included in each
subsequent month's transportation costs submitted pursuant to
paragraphs (g)(1) through (5) of this section until paid, or until the
time period for such payments has concluded.
(8) The reimbursement of transportation costs pursuant to this
section shall be the actual demonstrated cost of such transportation of
bulk milk delivered or rerouted as described in paragraphs (g)(1)
through (5) of this section, or the miles of transportation on loads of
bulk milk delivered or rerouted as described in paragraphs (g)(1)
through (5) of this section multiplied by $2.25 per loaded mile,
whichever is less.
PART 1007--MILK IN THE SOUTHEAST MARKETING AREA
0
4. Section 1007.60 is amended by revising paragraph (a) and adding a
new paragraph (g) to read as follows:
Sec. 1007.60 Handler's value of milk
* * * * *
(a) Multiply the pounds of skim milk and butterfat in producer milk
that were classified in each class pursuant to Sec. 1000.44(c) by the
applicable skim milk and butterfat prices, and add the resulting
amounts; except that for the months of January 2005 through March 2005,
the Class I skim milk price for this purpose shall be the Class I skim
milk price as determined in Sec. 1000.50(b) plus $0.04 per
hundredweight, and the Class I butterfat price for this purpose shall
be the Class I butterfat price as determined in Sec. 1000.50(c) plus
$0.0004 per pound. The adjustments to the Class I skim milk and
butterfat prices provided herein may be reduced by the market
administrator for any month if the market administrator determines that
the payments yet unpaid computed pursuant to paragraphs (g)(1) through
(5) and paragraph (g)(7) of this section will be less than the amount
computed pursuant to paragraph (g)(6) of this section. The adjustments
to the Class I skim milk and butterfat prices provided herein during
the months of January 2005 through March 2005 shall be announced along
with the prices announced in Sec. 1000.53(b);
* * * * *
(g) For the months of January 2005 through March 2005 for handlers
who have submitted proof satisfactory to the market administrator to
determine eligibility for reimbursement of transportation costs,
subtract an amount equal to:
(1) The cost of transportation on loads of producer milk delivered
or rerouted to a pool distributing plant which were delivered as a
result of hurricanes Charley, Frances, Ivan, and Jeanne;
(2) The cost of transportation on loads of producer milk delivered
or rerouted to a pool supply plant that was then transferred to a pool
distributing plant which were delivered as a result of hurricanes
Charley, Frances, Ivan, and Jeanne;
(3) The cost of transportation on loads of bulk milk delivered or
rerouted to a pool distributing plant from a pool supply plant which
were delivered as a result of hurricanes Charley, Frances, Ivan, and
Jeanne;
(4) The cost of transportation on loads of bulk milk delivered or
rerouted to a pool distributing plant from another order plant which
were delivered as a result of hurricanes Charley, Frances, Ivan, and
Jeanne; and
(5) The cost of transportation on loads of bulk milk transferred or
diverted to a plant regulated under another Federal order or to other
nonpool plants which were delivered as a result of hurricanes Charley,
Frances, Ivan, and Jeanne.
(6) The total amount of payment to all handlers under this section
shall be limited for each month to an amount determined by multiplying
the total Class I producer milk for all handlers pursuant to Sec.
1000.44(c) times $0.04 per hundredweight.
(7) If the cost of transportation computed pursuant to paragraphs
(g)(1) through (5) of this section exceeds the amount computed pursuant
to paragraph (g)(6) of this section, the market administrator shall
prorate such
[[Page 71701]]
payments to each handler based on each handler's proportion of
transportation costs submitted pursuant to paragraphs (g)(1) through
(5) of this section. Transportation costs submitted pursuant to
paragraphs (g)(1) through (5) of this section which are not paid as a
result of such a proration shall be included in each subsequent month's
transportation costs submitted pursuant to paragraphs (g)(1) through
(5) of this section until paid, or until the time period for such
payments has concluded.
(8) The reimbursement of transportation costs pursuant to this
section shall be the actual demonstrated cost of such transportation of
bulk milk delivered or rerouted as described in paragraphs (g)(1)
through (5) of this section, or the miles of transportation on loads of
bulk milk delivered or rerouted as described in paragraphs (g)(1)
through (5) of this section multiplied by $2.25 per loaded mile,
whichever is less.
(9) For each handler, the reimbursement of transportation costs
pursuant to paragraph (g) of this section for bulk milk delivered or
rerouted as described in paragraphs (g)(1) through (5) of this section
shall be reduced by the amount of payments received for such milk
movements from the transportation credit balancing fund pursuant to
Sec. 1007.82.
Dated: December 7, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-27159 Filed 12-7-04; 2:54 pm]
BILLING CODE 3410-02-U