[Code of Federal Regulations]
[Title 7, Volume 9]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1032.13]

[Page 119-120]
 
                          TITLE 7--AGRICULTURE
 
  CHAPTER X--AGRICULTURAL MARKETING SERVICE (Marketing Agreements and 
                 Orders; Milk) DEPARTMENT OF AGRICULTURE
 
PART 1032_MILK IN THE CENTRAL MARKETING AREA--Table of Contents
 
                    Subpart_Order Regulating Handling
 
Sec.  1032.13  Producer milk.

    Producer milk means the skim milk (or the skim equivalent of 
components of skim milk), including nonfat components, and butterfat in 
milk of a producer that is:
    (a) Received by the operator of a pool plant directly from a 
producer or a handler described in Sec.  1000.9(c). All milk received 
pursuant to this paragraph shall be priced at the location of the plant 
where it is first physically received;
    (b) Received by a handler described in Sec.  1000.9(c) in excess of 
the quantity delivered to pool plants;
    (c) Diverted by a pool plant operator to another pool plant. Milk so 
diverted shall be priced at the location of the plant to which diverted; 
or
    (d) Diverted by the operator of a pool plant or a cooperative 
association described in Sec.  1000.9(c) to a nonpool plant, subject to 
the following conditions:
    (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).;
    (5) Receipts used in determining qualifying percentages shall be 
milk transferred to or diverted to or physically received by a plant 
described in Sec.  1032.7(a), (b) or (i) less any transfer or diversion 
of bulk fluid milk products from such plants;
    (6) Diverted milk shall be priced at the location of the plant to 
which diverted;
    (7) Any milk diverted in excess of the limits prescribed in 
paragraph (d)(2) of this section shall not be producer milk. If the 
diverting handler or cooperative association fails to designate the 
dairy farmers' deliveries that are not to be producer milk, no milk 
diverted by the handler or cooperative association during the month to a 
nonpool plant shall be producer milk; and

[[Page 120]]

    (8) The applicable diversion limits in paragraph (d)(2) of this 
section may be increased or decreased by the market administrator if the 
market administrator finds that such revision is necessary to assure 
orderly marketing and efficient handling of milk in the marketing area. 
Before making such a finding, the market administrator shall investigate 
the need for the revision either on the market administrator's own 
initiative or at the request of interested persons if the request is 
made in writing at least 15 days prior to the month for which the 
requested revision is desired effective. If the investigation shows that 
a revision might be appropriate, the market administrator shall issue a 
notice stating that the revision is being considered and inviting 
written data, views, and arguments. Any decision to revise an applicable 
percentage must be issued in writing at least one day before the 
effective date.
    (e) Producer milk shall not include milk of a producer that is 
subject to inclusion and participation in a marketwide equalization pool 
under a milk classification and pricing program imposed under the 
authority of a State government maintaining marketwide pooling of 
returns.
    (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.

[64 FR 47985, Sept. 1, 1999, as amended at 68 FR 7072, Feb. 12, 2003; 71 
FR 25500, May 1, 2006; 71 FR 63217, Oct. 30, 2006]