[Federal Register: October 30, 2006 (Volume 71, Number 209)]
[Rules and Regulations]
[Page 63215-63217]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30oc06-2]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1032
[Docket No. AO-313-A48; DA-04-06]
Milk in the Central Marketing Area; Order Amending the Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule amends regulations pertaining to the Central
Federal milk order. More than the required number of producers for the
Central marketing area approved the issuance of the final order
amendments.
DATES: Effective Date: December 1, 2006.
FOR FURTHER INFORMATION CONTACT: Jack Rower, Marketing Specialist,
Order Formulation and Enforcement Branch, USDA/AMS/Dairy Programs, STOP
0231-Room 2971, 1400 Independence Avenue, SW., Washington, DC 20250-
0231, (202) 720-2357, e-mail address: jack.rower@usda.gov.
SUPPLEMENTARY INFORMATION: This document amends the pooling provisions
of the Central Federal milk order. Specifically, this final rule adopts
provisions that: (1) Increase supply plant performance standards to 25
percent for the months of August through February and to 20 percent for
the months of March through July; (2) Require the non-pool side of a
split plant to maintain nonpool status for 12 months; (3) Amend the
``touch-base'' feature of the order to require that at least one day's
production of the milk of a dairy farmer be received at a pool plant in
each of the months of January, February, and August through November,
to be eligible for diversion to non-pool plants; (4) Lower the
diversion limit standards by five percentage points, from 80 percent to
75 percent, for the months of August through February, and by five
percentage points, from 85 percent to 80 percent for the months of
March through July; and (5) Establish provisions that limit the volume
of milk a handler may pool in a month to 125 percent of the volume of
milk pooled in the prior month.
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. The 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 this
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 Secretary
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 Secretary 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 and Paperwork Reduction 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
final 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.
During January 2005, the time of the hearing, there were 5,778
dairy producers pooled on, and 23 handlers regulated by, the Central
order. Approximately 5,365 producers, or 92.9 percent, were considered
``small businesses'' based on the above criteria. Of the 23 handlers
regulated by the Central order during January 2005, 11 handlers, or
47.8 percent, were considered ``small businesses.''
The adopted amendments regarding the pooling standards serve to
revise established criteria that determine those producers, producer
milk, and plants that have a reasonable association with and
consistently serve the fluid needs of the Central milk marketing area.
Criteria for pooling milk are established on the basis of performance
standards that are considered adequate to meet the Class I fluid needs
of the market and, by doing so, to determine those producers who are
eligible to share in the revenue that
[[Page 63216]]
arises from the classified pricing of milk.
Criteria for pooling are established without regard to the size of
any dairy industry organization or entity. Therefore, the amendments
will not have a significant economic impact on a substantial number of
small entities.
A review of reporting requirements was completed under the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). It was
determined that these amendments would have no impact on reporting,
recordkeeping, or other compliance requirements because they would
remain identical to the current requirements. No new forms are proposed
and no additional reporting requirements would be necessary.
This action does not require additional information collection that
requires clearance by the Office of Management and Budget (OMB) beyond
currently approved information collection. The primary sources of data
used to complete the approved forms are routinely used in most business
transactions. The forms require only a minimal amount of information
which can be supplied without data processing equipment or a trained
statistical staff. Thus, the information collection and reporting
burden is relatively small. Requiring the same reports for all handlers
does not significantly disadvantage any handler that is smaller than
the industry average.
No other burdens are expected to fall on the dairy industry as a
result of overlapping Federal rules. This rulemaking proceeding does
not duplicate, overlap, or conflict with any existing Federal rules.
Prior Documents in This Proceeding
Notice of Hearing: Issued September 17, 2004; published September
22, 2004 (69 FR 56725).
Notice of Hearing Delay: Issued October 18, 2004; published October
13, 2004 (69 FR 61323).
Recommended Decision: Issued February 15, 2006; published February
22, 2006 (71 FR 9015).
Final Decision: Issued September 1, 2006; published September 13,
2006 (71 FR 54152).
Findings and Determinations
The findings and determinations hereinafter set forth supplement
those that were made when the Central 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 Mideast
order:
(a) Findings upon the basis of the hearing record: A public hearing
was held upon certain proposed amendment to the tentative marketing
agreement and to the order regulating the handling of milk in the
Central marketing area. The hearing was held pursuant to the provisions
of the Agricultural Marketing Agreement act of 1937, as amended (7
U.S.C. 601-604), the applicable rules of practice and procedure (7 CFR
part 900).
Upon the basis of the evidence introduced at such hearing and the
record thereof, will tend to effectuate the declared policy of the Act;
(1) The Central order 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 marketing area, and the minimum
prices specified in the tentative marketing agreement and the order, as
hereby proposed to be 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 Central order 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, a
marketing agreement upon which a hearing has been held.
(b) Additional Findings: It is necessary and in the public interest
to make these amendments to the Central order effective December 1,
2006. Any delay beyond that date would tend to disrupt the orderly
marketing of milk in the aforesaid marketing area.
The amendments to the Central order are known to handlers. The
final decision containing the proposed amendments to the order was
issued on September 1, 2006.
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 these order amendments
effective December 1, 2006.
(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 that 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 order amending the Central order is the
only practical means pursuant to the declared policy of the Act of
advancing the interests of producers as defined by the order as hereby
amended;
(3) The issuance of the order amending the Central 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 1032
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 Central marketing area shall be in
conformity to and in compliance with the terms and conditions of the
order, as amended, and as hereby amended, as follows:
PART 1032--MILK IN THE CENTRAL MARKETING AREA
0
1. The authority citation for 7 CFR part 1032 is amended to read as
follows:
Authority: 7 U.S.C. 601-674, and 7253.
0
2. Section 1032.7 is amended by revising paragraph (c) introductory
text and paragraph (h)(7), to read as follows:
Sec. 1032.7 Pool plant.
* * * * *
(c) A supply plant from which the quantity of bulk fluid milk
products shipped to (and physically unloaded into) plants described in
paragraph (c)(1) of this section is not less than 25 percent during the
months of August through February and 20 percent in all other months of
the Grade A milk received from dairy farmers (except dairy farmers
described in Sec. 1032.12(b)) and from handlers described in Sec.
1000.9(c), including milk diverted pursuant to Sec. 1032.13, subject
to the following conditions:
* * * * *
(h) * * *
(7) That portion of a regulated plant designated as a nonpool plant
that is physically separate and operated separately from the pool
portion of such plant. The designation of a portion of a plant must be
requested in advance and in writing by the handler and must be approved
by the market administrator. Such nonpool status shall be effective on
the first day of the month following approval of the request by the
market administrator and thereafter for the longer of twelve (12)
consecutive months or until notification of the
[[Page 63217]]
desire to requalify as a pool plant, in writing, is received by the
market administrator. Requalification will require deliveries to a pool
distributing plant(s) as provided for in Sec. 1032.7(c). For
requalification, handlers may not use milk delivered directly from
producer's farms pursuant to Sec. 1000.9(c) or Sec. 1032.13(c) for
the first month.
0
3. Section 1032.13 is amended by:
0
a. Revising paragraph (d)(1);
0
b. Redesignating paragraphs (d)(2) through (d)(6) as paragraphs (d)(4)
through (d)(8);
0
c. Adding new paragraphs (d)(2) and (d)(3);
0
d. Revising newly redesignated paragraph (d)(4); and
0
e. Adding a new paragraph (f).
The revisions and additions read as follows:
Sec. 1032.13 Producer milk.
* * * * *
(d) * * *
(1) Milk of a dairy farmer shall not be eligible for diversion
until milk of such dairy farmer has been physically received as
producer milk at a pool plant and the dairy farmer has continuously
retained producer status since that time. If a dairy farmer loses
producer status under the order in this part (except as a result of a
temporary loss of Grade A approval), the dairy farmer's milk shall not
be eligible for diversion until milk of the dairy farmer has been
physically received as producer milk at a pool plant;
(2) The equivalent of at least one day's milk production is caused
by the handler to be physically received at a pool plant in each of the
months of January and February, and August through November;
(3) The equivalent of at least one day's milk production is caused
by the handler to be physically received at a pool plant in each of the
months of March through July and December if the requirement of
paragraph (d)(2) of this section (Sec. 1032.13) in each of the prior
months of August through November and January through February are not
met, except in the case of a dairy farmer who marketed no Grade A milk
during each of the prior months of August through November or January
through February.
(4) 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 75 percent during the months of
August through February, and not more than 80 percent during the months
of March through July, provided that not less than 25 percent of such
receipts in the months of August through February and 20 percent of the
remaining months' receipts are delivered to plants described in Sec.
1032.7(a), (b), or (i).;
* * * * *
(f) The quantity of milk reported by a handler pursuant to Sec.
1032.30(a)(1) and/or Sec. 1032.30(c)(1) for the current month may not
exceed 125 percent of the producer milk receipts pooled by the handler
during the prior month. Milk diverted to nonpool plants reported in
excess of this limit shall be removed from the pool. Milk received at
pool plants in excess of the 125 percent limit, other than pool
distributing plants, shall be classified pursuant to Sec.
1000.44(a)(3)(v). The handler must designate, by producer pick-up,
which milk is to be removed from the pool. If the handler fails to
provide this information the provisions of paragraph (d)(5) of this
section shall apply. The following provisions apply:
(1) Milk shipped to and physically received at pool distributing
plants shall not be subject to the 125 percent limitation;
(2) Producer milk qualified pursuant to Sec. ----.13 of any other
Federal Order in the previous month shall not be included in the
computation of the 125 percent limitation; provided that the producers
comprising the milk supply have been continuously pooled on any Federal
Order for the entirety of the most recent three consecutive months.
(3) The market administrator may waive the 125 percent limitation:
(i) For a new handler on the order, subject to the provisions of
paragraph (f)(3) of this section, or
(ii) For an existing handler with significantly changed milk supply
conditions due to unusual circumstances;
(4) A bloc of milk may be considered ineligible for pooling if the
market administrator determines that handlers altered the reporting of
such milk for the purpose of evading the provisions of this paragraph.
Dated: October 25, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-18176 Filed 10-27-06; 8:45 am]
BILLING CODE 3410-02-P