[Federal Register Volume 75, Number 78 (Friday, April 23, 2010)]
[Rules and Regulations]
[Pages 21157-21161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-9402]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 75, No. 78 / Friday, April 23, 2010 / Rules
and Regulations
[[Page 21157]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1001, 1005, 1006, 1007, 1030, 1032, 1033, 1124, 1126,
and 1131
[Doc. No. AMS-DA-09-0007; AO-14-A78, et al.; DA-09-02]
Milk in the Northeast and Other Marketing Areas; Order Amending
the Orders
AGENCY: Agricultural Marketing Service, USDA
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule amends the producer-handler definitions of all
Federal milk marketing orders to limit exemption from pooling and
pricing provisions to those with total route disposition and sales of
packaged fluid milk products to other plants of 3 million pounds or
less per month. The exempt plant definition will continue to limit
disposition of Class I milk products to 150,000 pounds or less per
month. A referendum was held and the required number of producers
approved the issuance of the orders as amended.
DATES: Effective Date: June 1, 2010.
FOR FURTHER INFORMATION CONTACT: Gino M. Tosi or Jack Rower, Senior
Marketing Specialists, 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 addresses:
[email protected] and [email protected].
SUPPLEMENTARY INFORMATION: This final rule amends the producer-handler
provisions of all Federal milk marketing orders to limit exemption from
pooling and pricing to those with total route disposition and packaged
sales of fluid milk products to other plants of 3 million pounds or
less per month. The exempt plant definition will continue to limit
disposition of Class I milk products to 150,000 pounds or less per
month.
Accordingly, this final rule adopts proposed amendments detailed in
the final decision (75 FR 10122).
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.
The Agricultural Marketing Agreement Act of 1937, as amended (7
U.S.C. 601-674) (AMAA), provides that administrative proceedings must
be exhausted before parties may file suit in court. Under section
608c(15)(A) of the AMAA, any handler subject to an order may request
modification or exemption from such order by filing with the Department
of Agriculture (USDA) 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, USDA would rule on the
petition. The AMAA 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
USDA'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-
612), the Agricultural Marketing Service has considered the economic
impact of this action on small entities and has certified that this
rule would not have a significant economic impact on a substantial
number of small entities. For the purposes 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 marketing
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 farms. 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.
Producer-handlers are dairy farms that process their own milk
production. These entities must operate one or more dairy farms as a
pre-condition to operating processing plants as producer-handlers. The
size of the dairy farm(s) determines the production level of the
operation and is a controlling factor in the capacity of the processing
plant and possible sales volume associated with the producer-handler
entity. Determining whether a producer-handler is considered a small or
large business is therefore dependent on the capacity of its dairy
farm(s), where a producer-handler with annual gross revenue in excess
of $750,000 is considered a large business.
The amendments to the producer-handler provisions will obligate
some large producer-handlers under the Federal milk marketing order
system to the same terms as other fully regulated handlers of their
respective orders provided they meet the criteria for qualification as
fully regulated plants. Entities currently defined as producer-handlers
under the terms of their order will be subject to the pooling and
pricing provisions of the order if their total route disposition of
fluid milk products and sales of packaged fluid milk products to other
plants exceeds 3 million pounds per month.
Producer-handlers with total route disposition and sales of
packaged fluid milk products to other plants of 3 million pounds or
less during the month will not be subject to the pooling and pricing
provisions of any order as a result of this rulemaking. To the extent
that current producer-handlers have route disposition of fluid milk
products and sales of packaged fluid milk products to other plants
outside of the order's marketing areas, such route disposition and
sales to other plants will be subject to the pooling and pricing
provisions of the orders if total
[[Page 21158]]
route disposition and sales to other plants cause them to become fully
regulated.
If current producer-handlers have total route disposition and
packaged sales of fluid milk products of more than 3 million pounds
during a month, such producer-handlers will be regulated under the
pooling and pricing provisions of the orders like other fully regulated
handlers. Such large producer-handlers will account to the pool for
their uses of milk at the applicable minimum class prices and pay the
difference between their use-value of milk and the blend price of the
order to that order's producer-settlement fund.
While this may cause an economic impact on those entities with more
than three million pounds of route sales and sales to other plants that
are currently considered producer-handlers under the Federal order
system, the impact is offset by the benefit to other small businesses.
With respect to dairy farms whose milk is pooled on Federal marketing
orders, such dairy farms who have not heretofore shared in the
additional revenue that accrues from the marketwide pooling of Class I
sales by producer-handlers will share in such revenue. All producer-
handlers who dispose of more than three million pounds of fluid milk
products per month will account to all market participants at the
announced Federal order Class I price for such use.
To the extent that some large producer-handlers become subject to
the pooling and pricing provisions of Federal milk marketing orders,
such will be determined by their capacity as handlers. Such entities
will no longer face the restrictions necessary to maintain producer-
handler status and the resulting exemption from the pooling and pricing
provisions of the orders. In general, this includes being able to buy
or acquire any quantity of milk from dairy farmers or other handlers
instead of being limited by the current constraints of the orders.
Additionally, the burden of balancing their milk production is
relieved. Milk production in excess of what is needed to satisfy their
Class I route disposition and sales to other plants may receive the
minimum price protection established under the terms of the Federal
milk marketing orders. The burden of balancing milk supplies will be
borne by all producers and handlers under the terms of the orders.
During May 2009, the month in which the public hearing was held,
the Northeast order had 57 pool distributing plants, 10 pool supply
plants, 16 partially regulated distributing plants, 13 producer-handler
plants and 40 exempt plants. Of the 83 regulated plants, 49 plants or
59 percent were considered large businesses. Of the 13,050 dairy
farmers whose milk was pooled on the order, 628 farms or 5 percent were
considered large businesses and 12,422 farms or 95 percent of dairy
farms in the Northeast order were considered small businesses. Most of
these dairy farms, large and small, could benefit by receiving a higher
blend price, if the monthly limit of 3 million pounds of total Class I
route disposition and sales of packaged fluid milk to other plants is
adopted for producer-handlers.
During May 2009, the Appalachian order had 21 pool distributing
plants, 1 pool supply plant, 2 partially regulated distributing plants,
1 producer-handler plant and 4 exempt plants. Of the 24 regulated
plants, 21 plants or 88 percent were considered large businesses. Of
the 2,516 dairy farmers whose milk was pooled on the order, 159 farms
or 6 percent were considered large businesses and 2,357 farms or 94
percent of dairy farms in the Appalachian order were considered small
businesses. Most of these dairy farms, large and small, could benefit
by receiving a higher blend price, if the monthly limit of 3 million
pounds of total Class I route disposition and sales of packaged fluid
milk to other plants is adopted for producer-handlers.
During May 2009, the Florida order had 11 pool distributing plants,
5 partially regulated distributing plants and 2 exempt plants. The
order had no pool supply plants or producer-handler plants as of May
2009. Of the 16 regulated plants, 12 plants or 75 percent were
considered large businesses. Of the 249 dairy farmers whose milk was
pooled on the order, 105 farms or 42 percent were considered large
businesses and 144 farms or 58 percent of dairy farms in the Florida
order were considered small businesses. Most of these dairy farms,
large and small, could benefit by receiving a higher blend price, if
the monthly limit of 3 million pounds of total Class I route
disposition and sales of packaged fluid milk to other plants is adopted
for producer-handlers.
During May 2009, the Southeast order had 22 pool distributing
plants, 3 pool supply plants, 6 partially regulated distributing plants
and 12 exempt plants. The order had no producer-handler plants as of
May 2009. Of the 31 regulated plants, 28 plants or 90 percent were
considered large businesses. Of the 2,992 dairy farmers whose milk was
pooled on the order, 187 farms or 6 percent were considered large
businesses and 2,805 farms or 94 percent of dairy farms in the
Southeast order were considered small businesses. Most of these dairy
farms, large and small, could benefit by receiving a higher blend
price, if the monthly limit of 3 million pounds of total Class I route
disposition and sales of packaged fluid milk to other plants is adopted
for producer-handlers.
During May 2009, the Upper Midwest order had 24 pool distributing
plants, 53 pool supply plants, 2 partially regulated distributing
plants, 5 producer-handler plants and 11 exempt plants. Of the 79
regulated plants, 37 plants or 47 percent were considered large
businesses. Of the 15,336 dairy farmers whose milk was pooled on the
order, 1,001 farms or 7 percent were considered large businesses and
14,335 farms or 93 percent of dairy farms in the Upper Midwest order
were considered small businesses. Most of these dairy farms, large and
small, could benefit by receiving a higher blend price, if the monthly
limit of 3 million pounds of total Class I route disposition and sales
of packaged fluid milk to other plants is adopted for producer-
handlers.
During May 2009, the Central order had 30 pool distributing plants,
12 pool supply plants, 1 partially regulated distributing plant, 7
producer-handler plants and 19 exempt plants. Of the 43 regulated
plants, 35 plants or 81 percent were considered large businesses. Of
the 3,600 dairy farmers whose milk was pooled on the order, 413 farms
or 11 percent were considered large businesses and 3,187 farms or 89
percent of dairy farms in the Central order were considered small
businesses. Most of these dairy farms, large and small, could benefit
by receiving a higher blend price, if the monthly limit of 3 million
pounds of total Class I route disposition and sales of packaged fluid
milk to other plants is adopted for producer-handlers.
During May 2009, the Mideast order had 22 pool distributing plants,
2 pool supply plants, 4 partially regulated distributing plants, 1
producer-handler plant and 17 exempt plants. Of the 28 regulated
plants, 8 plants or 29 percent were considered large businesses. Of the
7,238 dairy farmers whose milk was pooled on the order, 504 farms or 7
percent were considered large businesses and 6,734 farms or 93 percent
of dairy farms in the Mideast order were considered small businesses.
Most of these dairy farms, large and small, could benefit by receiving
a higher blend price, if the monthly limit of 3 million pounds of total
Class I route disposition and sales of packaged fluid milk to other
plants is adopted for producer-handlers.
[[Page 21159]]
During May 2009, the Pacific Northwest order had 15 pool
distributing plants, 8 pool supply plants, 13 partially regulated
distributing plants, 5 producer-handler plants and 2 exempt plants. Of
the 36 regulated plants, 20 plants or 56 percent were considered large
business. Of the 657 dairy farmers whose milk was pooled on the order,
326 farms or 50 percent were considered large businesses. Because the
Pacific Northwest order already fully regulates producer-handlers with
monthly route distribution in excess of three million pounds per month,
the action will have a minimal effect on small farmers whose milk is
pooled on the order.
During May 2009, the Southwest order had 19 pool distributing
plants, 2 pool supply plants, 1 partially regulated distributing plant,
5 producer-handler plants and 2 exempt plants. Of the 79 regulated
plants, 19 plants or 86 percent were considered large businesses. Of
the 588 dairy farmers whose milk was pooled on the order, 318 farms or
54 percent were considered large businesses and 270 farms or 46 percent
of dairy farms in the Southeast order were considered small businesses.
Most of these dairy farms, large and small, could benefit by receiving
a higher blend price, if the monthly limit of 3 million pounds of total
Class I route disposition and sales of packaged fluid milk to other
plants is adopted for producer-handlers.
During May 2009, the Arizona order had 5 pool distributing plants,
1 pool supply plant, 15 partially regulated distributing plants and 1
exempt plant. The order had no producer-handler plants as of May 2009.
Of the 21 regulated plants, 13 plants or 62 percent were considered
large businesses. Of the 100 dairy farmers whose milk was pooled on the
order, 95 farms or 95 percent were considered large businesses. Because
the Arizona order already fully regulates producer-handlers with
monthly route distribution in excess of 3 million pounds, the action
will have a minimal effect on small farmers whose milk is pooled on the
order.
As of May 2009, in their capacity as producers, 15 producer-
handlers would be considered large producers as their annual marketings
exceed 6 million pounds of milk (500,000 pounds per month). During the
same month, 22 producer-handlers would be considered small producers.
Record evidence indicates that as of March 2009, seven large producer-
handlers had total route sales of two million pounds or more per month.
Therefore, seven or fewer large producer-handlers could potentially
become subject to the pooling and pricing provisions of Federal milk
marketing orders because of route disposition of more than three
million pounds per month.
This final rule amends the producer-handler provisions of all
Federal milk marketing orders to limit exemption from pooling and
pricing to those with total route disposition and packaged sales of
fluid milk products to other plants of 3 million pounds or less per
month. The exempt plant definition continues to limit disposition of
Class I milk products to 150,000 pounds or less per month. Based on the
above analysis, USDA has concluded that the amendments will not have a
negative impact on small entities and may in fact benefit small and
large dairy producers.
The Agricultural Marketing Service (AMS) is committed to complying
with the E-Government Act, to promote the use of the Internet and other
information technologies to provide increased opportunities for citizen
access to Government information and services, and for other purposes.
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 minimal impact on
reporting, recordkeeping, or other compliance requirements for entities
currently considered producer-handlers under Federal milk marketing
orders because they would remain identical to the current requirements
applicable to all other regulated handlers who are subject to the
pooling and pricing provisions. No new forms are proposed and no
additional reporting requirements would be necessary.
This notice does not require additional information collection that
needs clearance by the Office of Management and Budget (OMB) beyond
currently approved information collection. The primary sources of data
used to complete the forms are routinely used in most business
transactions. Forms require only a minimal amount of information that
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.
Prior Documents in This Proceeding
Notice of Hearing: Issued April 3, 2009; published April 9, 2009
(74 FR 16296).
Recommended Decision: Issued October 15, 2009; published October
21, 2009 (74 FR 54383).
Final Decision: Issued February 18, 2010; published March 4, 2010
(75 FR 10122).
Findings and Determinations
The findings and determinations hereinafter set forth supplement
those that were made when the 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 the
Northeast and other marketing orders:
(a) Findings Upon the Basis of the Hearing Record
A public hearing was held with regard to certain proposed
amendments to the tentative marketing agreements and to the orders
regulating the handling of milk in the Northeast and other marketing
areas. The hearing was held pursuant to the provisions of the AMAA and
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, 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
AMAA;
(2) The parity prices of milk, as determined pursuant to section 2
of the AMAA, 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;
(3) The said orders, as hereby amended, regulate the handling of
milk in the same manner as, and are applicable only to persons in the
respective classes of industrial or commercial activity specified in,
the marketing agreements upon which a hearing has been held; and
(4) All milk and milk products handled by handlers, as defined in
the tentative marketing agreements and the orders as hereby amended,
are in the current of interstate commerce or directly burden, obstruct,
or affect interstate commerce in milk or its products.
[[Page 21160]]
(b) Additional Findings
The amendments to these orders are known to handlers. The final
decision containing the proposed amendments to this order was issued on
February 18, 2010 and published in the Federal Register on March 4,
2010 (75 FR 10122).
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 amendments
effective following June 1, 2010. (Section 553(d), Administrative
Procedures 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 AMAA) of more than 50
percent of the milk, which is marketed within the specified marketing
areas, to sign a proposed marketing agreement, tends to prevent the
effectuation of the declared policy of the AMAA;
(2) The issuance of this order amending the Northeast and other
orders is the only practical means pursuant to the declared policy of
the AMAA of advancing the interests of producers as defined in the
orders as hereby amended; and
(3) The issuance of this order amending the Northeast and other
orders is favored by at least two-thirds of the producers who were
engaged in the production of milk for sale in the respective marketing
areas.
List of Subjects in 7 CFR Parts 1001, 1005, 1006, 1007, 1030, 1032,
1033, 1124, 1126, and 1131
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 Northeast and other marketing areas shall
be in conformity to and in compliance with the terms and conditions of
the orders, as amended, and as hereby amended, as follows:
0
For reasons set forth in the preamble, 7 CFR parts 1001, 1005, 1006,
1007, 1030, 1032, 1033, 1124, 1126, and 1131 are amended as follows:
0
1. The authority citation for 7 CFR parts 1001, 1005, 1006, 1007, 1030,
1032, 1033, 1124, 1126, and 1131 continues to read as follows:
Authority: 7 U.S.C. 601-674, and 7253.
PART 1001--MILK IN THE NORTHEAST MARKETING AREA
0
2. Amend Sec. 1001.10 by revising paragraph (a) to read as follows:
Sec. 1001.10 Producer-handler.
* * * * *
(a) Operates a dairy farm and a distributing plant from which there
is route disposition in the marketing area, and from which total route
disposition and packaged sales of fluid milk products to other plants
during the month does not exceed 3 million pounds;
* * * * *
PART 1005--MILK IN THE APPALACHIAN MARKETING AREA
0
3. Amend Sec. 1005.10 by revising paragraph (a) to read as follows:
Sec. 1005.10 Producer-handler.
* * * * *
(a) Operates a dairy farm and a distributing plant from which there
is route disposition in the marketing area, and from which total route
disposition and packaged sales of fluid milk products to other plants
during the month does not exceed 3 million pounds;
* * * * *
PART 1006--MILK IN THE FLORIDA MARKETING AREA
0
4. Amend Sec. 1006.10 by revising paragraph (a) to read as follows:
Sec. 1006.10 Producer-handler.
* * * * *
(a) Operates a dairy farm and a distributing plant from which there
is route disposition in the marketing area, and from which total route
disposition and packaged sales of fluid milk products to other plants
during the month does not exceed 3 million pounds;
* * * * *
PART 1007--MILK IN THE SOUTHEAST MARKETING AREA
0
5. Amend Sec. 1007.10 by revising paragraph (a) to read as follows:
Sec. 1007.10 Producer-handler.
* * * * *
(a) Operates a dairy farm and a distributing plant from which there
is route disposition in the marketing area, and from which total route
disposition and packaged sales of fluid milk products to other plants
during the month does not exceed 3 million pounds;
* * * * *
PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA
0
6. Amend Sec. 1030.10 by revising paragraph (a) to read as follows:
Sec. 1030.10 Producer-handler.
* * * * *
(a) Operates a dairy farm and a distributing plant from which there
is route disposition in the marketing area, and from which total route
disposition and packaged sales of fluid milk products to other plants
during the month does not exceed 3 million pounds;
* * * * *
PART 1032--MILK IN THE CENTRAL MARKETING AREA
0
7. Amend Sec. 1032.10 by revising paragraph (a) to read as follows:
Sec. 1032.10 Producer-handler.
* * * * *
(a) Operates a dairy farm and a distributing plant from which there
is route disposition in the marketing area, and from which total route
disposition and packaged sales of fluid milk products to other plants
during the month does not exceed 3 million pounds;
* * * * *
PART 1033--MILK IN THE MIDEAST MARKETING AREA
0
8. Amend Sec. 1033.10 by revising paragraph (a) to read as follows:
Sec. 1033.10 Producer-handler.
* * * * *
(a) Operates a dairy farm and a distributing plant from which there
is route disposition in the marketing area, and from which total route
disposition and packaged sales of fluid milk products to other plants
during the month does not exceed 3 million pounds;
* * * * *
PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA
0
9. Revise Sec. 1124.10 introductory text to read as follows:
Sec. 1124.10 Producer-handler.
Producer-handler means a person who operates a dairy farm and a
distributing plant from which there is route disposition in the
marketing area, from which total route disposition and
[[Page 21161]]
packaged sales of fluid milk products to other plants during the month
does not exceed 3 million pounds, and who the market administrator has
designated a producer-handler after determining that all of the
requirements of this section have been met.
* * * * *
PART 1126--MILK IN THE SOUTHWEST MARKETING AREA
0
10. Amend Sec. 1126.10 by revising paragraph (a) to read as follows:
Sec. 1126.10 Producer-handler.
* * * * *
(a) Operates a dairy farm and a distributing plant from which there
is route disposition in the marketing area, and from which total route
disposition and packaged sales of fluid milk products to other plants
during the month does not exceed 3 million pounds;
* * * * *
PART 1131--MILK IN THE ARIZONA MARKETING AREA
0
11. Revise Sec. 1131.10 introductory text to read as follows:
Sec. 1131.10 Producer-handler.
Producer-handler means a person who operates a dairy farm and a
distributing plant from which there is route disposition in the
marketing area, from which total route disposition and packaged sales
of fluid milk products to other plants during the month does not exceed
3 million pounds, and who the market administrator has designated a
producer-handler after determining that all of the requirements of this
section have been met.
* * * * *
Dated: April 19, 2010.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2010-9402 Filed 4-22-10; 8:45 am]
BILLING CODE P