[Code of Federal Regulations]
[Title 7, Volume 9]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1000.43]

[Page 46-47]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER X--AGRICULTURAL MARKETING SERVICE (Marketing Agreements and 
                 Orders; Milk) DEPARTMENT OF AGRICULTURE
 
PART 1000_GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS--Table 
of Contents
 
                    Subpart F_Classification of Milk
 
Sec. 1000.43  General classification rules.

    In determining the classification of producer milk pursuant to Sec. 
1000.44, the following rules shall apply:
    (a) Each month the market administrator shall correct for 
mathematical and other obvious errors all reports filed pursuant to 
Sec. ----.30 of each Federal milk order and shall compute separately 
for each pool plant, for each handler described in Sec. 1000.9(c) and 
Sec. 1135.11 of this chapter, the pounds of skim milk and butterfat, 
respectively, in each class in accordance with Sec. Sec. 1000.40 and 
1000.42, and paragraph (b) of this section.
    (b) Shrinkage and Overage. For purposes of classifying all milk 
reported by a handler pursuant to Sec. ----.30 of each Federal milk 
order the market administrator shall determine the shrinkage or overage 
of skim milk and butterfat for each pool plant and each handler 
described in Sec. 1000.9(c) and Sec. 1135.11 of this chapter by 
subtracting total utilization from total receipts. Any positive 
difference shall be shrinkage, and any negative difference shall be 
overage.
    (1) Shrinkage incurred by pool plants qualified pursuant to Sec. --
--.7 of any Federal milk order shall be assigned to the lowest-priced 
class to the extent that such shrinkage does not exceed:
    (i) Two percent of the total quantity of milk physically received at 
the plant directly from producers' farms on the basis of farm weights 
and tests;
    (ii) Plus 1.5 percent of the quantity of bulk milk physically 
received on a basis other than farm weights and tests, excluding 
concentrated milk received by agreement for other than Class I use;
    (iii) Plus .5 percent of the quantity of milk diverted by the plant 
operator to another plant on a basis other than farm weights and tests; 
and
    (iv) Minus 1.5 percent of the quantity of bulk milk transferred to 
other plants, excluding concentrated milk transferred by agreement for 
other than Class I use.
    (2) A handler described in Sec. 1000.9(c) or Sec. 1135.11 of this 
chapter that delivers milk to plants on a basis other than farm weights 
and tests shall receive a lowest-priced-class shrinkage allowance of .5 
percent of the total quantity of such milk picked up at producers' 
farms.
    (3) Shrinkage in excess of the amounts provided in paragraphs (b)(1)

[[Page 47]]

and (2) of this section shall be assigned to existing utilization in 
series starting with Class I. The shrinkage assigned pursuant to this 
paragraph shall be added to the handler's reported utilization and the 
result shall be known as the gross utilization in each class.
    (c) If any of the water contained in the milk from which a product 
is made is removed before the product is utilized or disposed of by the 
handler, the pounds of skim milk in such product that are to be 
considered under this part as used or disposed of by the handler shall 
be an amount equivalent to the nonfat milk solids contained in such 
product plus all of the water originally associated with such solids.
    (d) Skim milk and butterfat contained in receipts of bulk 
concentrated fluid milk and nonfluid milk products that are 
reconstituted for fluid use shall be assigned to Class I use, up to the 
reconstituted portion of labeled reconstituted fluid milk products, on a 
pro rata basis (except for any Class I use of specific concentrated 
receipts that is established by the handler) prior to any assignments 
under Sec. 1000.44. Any remaining skim milk and butterfat in 
concentrated receipts shall be assigned to uses under Sec. 1000.44 on a 
pro rata basis, unless a specific use of such receipts is established by 
the handler.