[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: 7CFR1000.44]

[Page 47-49]
 
                          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. 1000.44  Classification of producer milk.

    For each month the market administrator shall determine for each 
handler described in Sec. 1000.9(a) for each pool plant of the handler 
separately and for each handler described in Sec. 1000.9(c) and Sec. 
1135.11 of this chapter the classification of producer milk by 
allocating the handler's receipts of skim milk and butterfat to the 
handler's gross utilization of such receipts pursuant to Sec. 
1000.43(b)(3) as follows:
    (a) Skim milk shall be allocated in the following manner:
    (1) Subtract from the pounds of skim milk in Class I the pounds of 
skim milk in:
    (i) Receipts of packaged fluid milk products from an unregulated 
supply plant to the extent that an equivalent amount of skim milk 
disposed of to such plant by handlers fully regulated under any Federal 
order is classified and priced as Class I milk and is not used as an 
offset for any other payment obligation under any order;
    (ii) Packaged fluid milk products in inventory at the beginning of 
the month. This paragraph shall apply only if the pool plant was subject 
to the provisions of this paragraph or comparable provisions of another 
Federal order in the immediately preceding month;
    (iii) Fluid milk products received in packaged form from plants 
regulated under other Federal orders; and
    (iv) To the extent that the receipts described in paragraphs 
(a)(1)(i) through (iii) of this section exceed the gross Class I 
utilization of skim milk, the excess receipts shall be subtracted 
pursuant to paragraph (a)(3)(vi) of this section.
    (2) Subtract from the pounds of skim milk in Class II the pounds of 
skim milk in the receipts of skim milk in bulk concentrated fluid milk 
products and in other source milk (except other source milk received in 
the form of an unconcentrated fluid milk product or a fluid cream 
product) that is used to produce, or added to, any product in Class II 
(excluding the quantity of such skim milk that was classified as Class 
IV milk pursuant to Sec. 1000.40(d)(3)). To the extent that the 
receipts described in this paragraph exceed the gross Class II 
utilization of skim milk, the excess receipts shall be subtracted 
pursuant to paragraph (a)(3)(vi) of this section.
    (3) Subtract from the pounds of skim milk remaining in each class, 
in series beginning with Class IV, the pounds of skim milk in:
    (i) Receipts of bulk concentrated fluid milk products and other 
source milk (except other source milk received in the form of an 
unconcentrated fluid milk product);
    (ii) Receipts of fluid milk products and bulk fluid cream products 
for which appropriate health approval is not established and from 
unidentified sources;
    (iii) Receipts of fluid milk products and bulk fluid cream products 
from an exempt plant;
    (iv) Fluid milk products and bulk fluid cream products received from 
a producer-handler as defined under the

[[Page 48]]

order in this part, or any other Federal order;
    (v) Receipts of fluid milk products from dairy farmers for other 
markets; and
    (vi) The excess receipts specified in paragraphs (a)(1)(iv) and 
(a)(2) of this section.
    (4) Subtract from the pounds of skim milk remaining in all classes 
other than Class I, in sequence beginning with Class IV, the receipts of 
fluid milk products from an unregulated supply plant that were not 
previously subtracted in this section for which the handler requests 
classification other than Class I, but not in excess of the pounds of 
skim milk remaining in these other classes combined.
    (5) Subtract from the pounds of skim milk remaining in all classes 
other than Class I, in sequence beginning with Class IV, receipts of 
fluid milk products from an unregulated supply plant that were not 
previously subtracted in this section, and which are in excess of the 
pounds of skim milk determined pursuant to paragraphs (a)(5)(i) and (ii) 
of this section;
    (i) Multiply by 1.25 the pounds of skim milk remaining in Class I at 
this allocation step; and
    (ii) Subtract from the result in paragraph (a)(5)(i) the pounds of 
skim milk in receipts of producer milk and fluid milk products from 
other pool plants.
    (6) Subtract from the pounds of skim milk remaining in all classes 
other than Class I, in sequence beginning with Class IV, the pounds of 
skim milk in receipts of bulk fluid milk products from a handler 
regulated under another Federal order that are in excess of bulk fluid 
milk products transferred or diverted to such handler, if other than 
Class I classification is requested, but not in excess of the pounds of 
skim milk remaining in these classes combined.
    (7) Subtract from the pounds of skim milk remaining in each class, 
in series beginning with Class IV, the pounds of skim milk in fluid milk 
products and bulk fluid cream products in inventory at the beginning of 
the month that were not previously subtracted in this section.
    (8) Subtract from the pounds of skim milk remaining in each class at 
the plant receipts of skim milk in fluid milk products from an 
unregulated supply plant that were not previously subtracted in this 
section and that were not offset by transfers or diversions of fluid 
milk products to the unregulated supply plant from which fluid milk 
products to be allocated at this step were received. Such subtraction 
shall be pro rata to the pounds of skim milk in Class I and in Classes 
II, III, and IV combined, with the quantity prorated to Classes II, III, 
and IV combined being subtracted in sequence beginning with Class IV.
    (9) Subtract from the pounds of skim milk remaining in each class 
the pounds of skim milk in receipts of bulk fluid milk products from a 
handler regulated under another Federal order that are in excess of bulk 
fluid milk products transferred or diverted to such handler that were 
not subtracted in paragraph (a)(6) of this section. Such subtraction 
shall be pro rata to the pounds of skim milk in Class I and in Classes 
II, III, and IV combined, with the quantity prorated to Classes II, III, 
and IV combined being subtracted in sequence beginning with Class IV, 
with respect to whichever of the following quantities represents the 
lower proportion of Class I milk:
    (i) The estimated utilization of skim milk of all handlers in each 
class as announced for the month pursuant to Sec. 1000.45(a); or
    (ii) The total pounds of skim milk remaining in each class at this 
allocation step.
    (10) Subtract from the pounds of skim milk remaining in each class 
the pounds of skim milk in receipts of fluid milk products and bulk 
fluid cream products from another pool plant and from a handler 
described in Sec. 1135.11 of this chapter according to the 
classification of such products pursuant to Sec. 1000.42(a).
    (11) If the total pounds of skim milk remaining in all classes 
exceed the pounds of skim milk in producer milk, subtract such excess 
from the pounds of skim milk remaining in each class in series beginning 
with Class IV.
    (b) Butterfat shall be allocated in accordance with the procedure 
outlined for skim milk in paragraph (a) of this section.

[[Page 49]]

    (c) The quantity of producer milk in each class shall be the 
combined pounds of skim milk and butterfat remaining in each class after 
the computations pursuant to paragraphs (a) and (b) of this section.