[Federal Register Volume 60, Number 106 (Friday, June 2, 1995)]
[Rules and Regulations]
[Pages 29436-29453]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 95-13160]
[[Page 29435]]
_______________________________________________________________________
Part III
Department of Agriculture
_______________________________________________________________________
Agricultural Marketing Service
_______________________________________________________________________
7 CFR Parts 1007, 1093, 1094, 1096, and 1108
Milk Marketing Orders: Georgia et al.; Final Rule
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules
and Regulations
[[Page 29436]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1007, 1093, 1094, 1096, and 1108
[Docket Nos. AO-366-A36, et al.; DA-93-21]
Milk in the Southeast Marketing Area; Order Amending and Merging
Orders
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7 CFR part Marketing area Docket No.
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1007......... Georgia................................ AO-366-A36
1093......... Alabama-West Florida................... AO-386-A14
1094......... New Orleans-Mississippi................ AO-103-A56
1096......... Greater Louisiana...................... AO-257-A43
1108......... Central Arkansas....................... AO-243-A46
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AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule combines five Federal milk order marketing
areas with unregulated counties in Arkansas, Georgia, Mississippi, and
Tennessee to form the Southeast marketing area. It is based on industry
proposals to merge the individual marketing areas so as to more
equitably divide the markets' proceeds in what essentially has become a
single, large market with significantly overlapping sales and
procurement areas. More than two-thirds of the affected dairy farmers
participating in a referendum voted in favor of the merged order.
EFFECTIVE DATE: July 1, 1995.
FOR FURTHER INFORMATION CONTACT: Nicholas Memoli, Marketing Specialist,
USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South
Building, PO Box 96456, Washington, DC 20090-6456, (202) 690-1932.
SUPPLEMENTARY INFORMATION: This administrative rule 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.
The Regulatory Flexibility Act (5 U.S.C. 601-612) requires the
Agency to examine the impact of a proposed rule on small entities.
Pursuant to 5 U.S.C. 605(b), the Administrator of the Agricultural
Marketing Service has certified that this rule will not have a
significant economic impact on a substantial number of small entities.
The amendments will promote orderly marketing of milk by producers and
regulated handlers.
This final rule was reviewed under Executive Order 12778, Civil
Justice Reform. This action is not intended to have a retroactive
effect and 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 file 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 and requesting a modification of an order or to
be exempted from the order. 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 Secretary's ruling on the petition, provided a bill in equity is
filed not later than 20 days after the entry of the ruling.
Prior documents in this proceeding:
Notice of Hearing: Issued September 3, 1993; published September
10, 1993 (58 FR 47653).
Supplemental Notice of Hearing: Issued October 13, 1993; published
October 15, 1993 (58 FR 53436).
Extension of Time for Filing Briefs: Issued January 24, 1994;
published February 3, 1994 (59 FR 5132).
Recommended Decision: Issued November 21, 1994; published November
29, 1994 (59 FR 61070).
Extension of Time for Filing Exceptions: Issued December 27, 1994;
published January 3, 1995 (60 FR 65).
Final Decision: Issued May 3, 1995; published May 10, 1995 (60 FR
25014).
Findings and Determinations
The following findings and determinations 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.
(a) Findings. A public hearing was held upon certain proposed
amendments to the tentative marketing agreements and to the orders
regulating the handling of milk in the aforesaid marketing areas. The
hearing was held pursuant to the provisions of the Agricultural
Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), 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 Southeast order, which amends and merges the aforesaid
orders, 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 aforesaid marketing areas. The
minimum prices specified in the order 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; and
(3) The Southeast order 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, marketing agreements
upon which a hearing has been held;
(4) All milk and milk products handled by handlers, as defined in
the Southeast order, are in the current of interstate commerce or
directly burden, obstruct, or affect interstate commerce in milk or its
products; and
(5) It is hereby found that the necessary expense of the market
administrator for the maintenance and functioning of such agency will
require each handler to pay, as its pro rata share of such expense, 5
cents per hundredweight or such lesser amount as the Secretary may
prescribe, with respect to milk specified in Sec. 1007.85.
(b) Determinations. It is hereby determined that:
(1) The refusal or failure of handlers (excluding cooperative
associations specified in section 8c(9) of the Act) of more than 50
percent of the milk marketed within the Southeast 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 is the only practical means pursuant
to the declared policy of the Act of advancing the interests of
producers as defined in the order; and
(3) The issuance of this order was approved by at least two-thirds
of the producers who during the representative period of March 1995
were engaged in the production of milk for sale in the marketing area.
[[Page 29437]]
List of Subjects in 7 CFR Part 1007
Milk marketing orders.
Order Relative to Handling
It is therefore ordered that on and after the effective date
hereof, the handling of milk in the Georgia, Alabama-West Florida, New
Orleans-Mississippi, Greater Louisiana, and Central Arkansas marketing
areas (parts 1007, 1093, 1094, 1096, and 1108, respectively) shall be
amended and merged into one order. Parts 1093, 1094, 1096, and 1108 are
vacated and reserved for future assignment. The handling of milk in the
Southeast marketing area shall be in conformity to and in compliance
with the following terms and conditions:
1. Part 1007 is revised to read as follows:
PART 1007--MILK IN THE SOUTHEAST MARKETING AREA
Subpart--Order Regulating Handling
General Provisions
Sec.
1007.1 General provisions.
Definitions
1007.2 Southeast marketing area.
1007.3 Route disposition.
1007.4 Plant.
1007.5 Distributing plant.
1007.6 Supply plant.
1007.7 Pool plant.
1007.8 Nonpool plant.
1007.9 Handler.
1007.10 Producer-handler.
1007.11 [Reserved]
1007.12 Producer.
1007.13 Producer milk.
1007.14 Other source milk.
1007.15 Fluid milk product.
1007.16 Fluid cream product.
1007.17 Filled milk.
1007.18 Cooperative association.
1007.19 Commercial food processing establishment.
Handler Reports
1007.30 Reports of receipts and utilization.
1007.31 Payroll reports.
1007.32 Other reports.
Classification of Milk
1007.40 Classes of utilization.
1007.41 Shrinkage.
1007.42 Classification of transfers and diversions.
1007.43 General classification rules.
1007.44 Classification of producer milk.
1007.45 Market administrator's reports and announcements concerning
classification.
Class Prices
1007.50 Class prices.
1007.51 Basic formula price.
1007.52 Plant location adjustments for handlers.
1007.53 Announcement of class prices.
1007.54 Equivalent price.
Uniform Prices
1007.60 Handler's value of milk for computing the uniform price.
1007.61 Computation of uniform price (including weighted average
price and uniform prices for base and excess milk).
1007.62 Announcement of uniform prices and butterfat differential.
Payments for Milk
1007.70 Producer-settlement fund.
1007.71 Payments to the producer-settlement fund.
1007.72 Payments from the producer-settlement fund.
1007.73 Payments to producers and to cooperative associations.
1007.74 Butterfat differential.
1007.75 Plant location adjustments for producers and on nonpool
milk.
1007.76 Payments by a handler operating a partially regulated
distributing plant.
1007.77 Adjustment of accounts.
1007.78 Charges on overdue accounts.
Administrative Assessment and Marketing Service Deduction
1007.85 Assessment for order administration.
1007.86 Deduction for marketing services.
Base-Excess Plan
1007.90 Base milk.
1007.91 Excess milk.
1007.92 Computation of base for each producer.
1007.93 Base rules.
1007.94 Announcement of established bases.
Authority: 7 U.S.C. 601-674.
Subpart--Order Regulating Handling
General Provisions
Sec. 1007.1 General provisions.
The terms, definitions, and provisions in part 1000 of this chapter
apply to and are hereby made a part of this order.
Definitions
Sec. 1007.2 Southeast marketing area.
The Southeast marketing area, hereinafter called the marketing
area, means all territory within the bounds of the following Alabama,
Florida, Georgia, Mississippi, Tennessee, and Arkansas counties and
Louisiana parishes, including all piers, docks, and wharves connected
therewith and all craft moored thereat, and all territory occupied by
government (municipal, State, or Federal) reservations, installations,
institutions, or other similar establishments if any part thereof is
within any of the listed counties or parishes:
Zone 1
Arkansas Counties
Baxter, Clay, Fulton, Greene, Izard, Lawrence, Randolph, and
Sharp.
Tennessee Counties
Cheatham, Clay, Davidson, Dickson, Fentress, Henry, Houston,
Jackson, Lake, Macon, Montgomery, Obion, Overton, Pickett,
Robertson, Smith, Stewart, Sumner, Trousdale, Weakley, and Wilson.
Zone 2
Arkansas Counties
Newton, Searcy, and Stone.
Tennessee Counties
Bedford, Benton, Bledsoe, Cannon, Carroll, Chester, Coffee,
Crockett, DeKalb, Decatur, Dyer, Gibson, Grundy, Henderson, Hickman,
Humphreys, Lewis, Madison, Marshall, Maury, Perry, Putnam,
Rutherford, Van Buren, Warren, White, and Williamson.
Zone 3
Arkansas Counties
Cleburne, Craighead, Independence, Jackson, Johnson,
Mississippi, Poinsett, Pope, and Van Buren.
Tennessee Counties
Lauderdale, Tipton, and Haywood.
Zone 4
Arkansas Counties
Conway, Crittenden, Cross, Faulkner, Garland, Lee, Lonoke,
Monroe, Montgomery, Perry, Polk, Prairie, Pulaski, Saline, St.
Francis, White, Woodruff, and Yell.
Tennessee Counties
Fayette, Franklin, Giles, Hardeman, Hardin, Lawrence, Lincoln,
McNairy, Moore, Shelby, and Wayne.
Zone 5
Alabama Counties
Colbert, De Kalb, Franklin, Jackson, Lauderdale, Lawrence,
Limestone, Madison, Marshall, and Morgan.
Arkansas Counties
Arkansas, Clark, Grant, Hot Spring, Howard, Jefferson, Phillips,
Pike, and Sevier.
Georgia Counties
Gilmer, Towns, and Union.
Mississippi Counties
Alcorn, Benton, Coahoma, DeSoto, Itawamba, Lafayette, Lee,
Marshall, Panola, Pontotoc, Prentiss, Quitman, Tate, Tippah,
Tishomingo, Tunica, and Union.
Zone 6
Alabama Counties
Blount, Cherokee, Cullman, Etowah, Fayette, Lamar, Marion,
Walker, and Winston.
Arkansas Counties
Bradley, Calhoun, Cleveland, Dallas, Desha, Drew, Hempstead,
Lincoln, Little River, Nevada, and Ouachita.
Georgia Counties
Bartow, Cherokee, Dawson, Floyd, Gordon, Habersham, Lumpkin,
Pickens, Rabun, and White. [[Page 29438]]
Mississippi Counties
Bolivar, Calhoun, Chickasaw, Grenada, Monroe, Sunflower,
Tallahatchie, and Yalobusha.
Zone 7
Alabama Counties
Bibb, Calhoun, Clay, Cleburne, Jefferson, Pickens, Randolph,
Shelby, St. Clair, Talladega, and Tuscaloosa.
Arkansas Counties
Ashley, Chicot, Columbia, Lafayette, Miller, and Union.
Georgia Counties
Banks, Barrow, Butts, Carroll, Clarke, Clayton, Cobb, Coweta, De
Kalb, Douglas, Elbert, Fayette, Forsyth, Franklin, Fulton, Greene,
Gwinnett, Hall, Haralson, Hart, Heard, Henry, Jackson, Jasper,
Lincoln, Madison, Morgan, Newton, Oconee, Oglethorpe, Paulding,
Polk, Putnam, Rockdale, Spalding, Stephens, Taliaferro, Walton, and
Wilkes.
Mississippi Counties
Attala, Carroll, Choctaw, Clay, Holmes, Humphreys, Leflore,
Lowndes, Montgomery, Noxubee, Oktibbeha, Washington, Webster, and
Winston.
Zone 8
Alabama Counties
Chambers, Chilton, Coosa, Greene, Hale, Lee, Perry, Sumter
(north of U.S. 80), and Tallapoosa.
Georgia Counties
Baldwin, Bibb, Burke, Columbia, Crawford, Glascock, Hancock,
Harris, Jefferson, Jones, Lamar, McDuffie, Meriwether, Monroe,
Muscogee, Pike, Richmond, Talbot, Taylor, Troup, Twiggs, Upson,
Warren, Washington, and Wilkinson.
Louisiana Parishes
Bienville, Bossier, Caddo, Claiborne, East Carroll, Jackson,
Lincoln, Morehouse, Ouachita, Richland, Union, Webster, and West
Carroll.
Mississippi Counties
Issaquena, Kemper, Leake, Madison, Neshoba, Sharkey, and Yazoo.
Zone 9
Alabama Counties
Autauga, Bullock, Dallas, Elmore, Lowndes, Macon, Marengo,
Montgomery, Russell, Sumter (south of U.S. 80), and Wilcox.
Georgia Counties
Bleckley, Bulloch, Candler, Chattahoochee, Crisp, Dodge, Dooly,
Effingham, Emanuel, Evans, Houston, Jenkins, Johnson, Laurens,
Macon, Marion, Montgomery, Peach, Pulaski, Schley, Screven, Stewart,
Sumter, Tattnall, Telfair, Toombs, Treutlen, Webster, Wheeler, and
Wilcox.
Louisiana Parishes
Caldwell, De Soto, Franklin, Madison, Natchitoches (north of
State Highway 6 and U.S. 84), Red River, Tensas, and Winn.
Mississippi Counties
Claiborne, Clarke, Copiah, Hinds, Jasper, Lauderdale, Newton,
Rankin, Scott, Simpson, Smith, and Warren.
Zone 10
Alabama Counties
Barbour, Butler, Choctaw, Clarke, Coffee, Conecuh, Covington,
Crenshaw, Dale, Escambia, Geneva, Henry, Houston, Monroe, Pike, and
Washington.
Georgia Counties
Appling, Atkinson, Bacon, Baker, Ben Hill, Berrien, Brantley,
Brooks, Bryan, Calhoun, Camden, Charlton, Chatham, Clay, Clinch,
Coffee, Colquitt, Cook, Decatur, Dougherty, Early, Echols, Glynn,
Grady, Irwin, Jeff Davis, Lanier, Lee, Liberty, Long, Lowndes,
McIntosh, Miller, Mitchell, Pierce, Quitman, Randolph, Seminole,
Terrell, Thomas, Tift, Turner, Ware, Wayne, and Worth.
Louisiana Parishes
Avoyelles, Catahoula, Concordia, Grant, La Salle, Natchitoches
(south of State Highway 6 and U.S. 84), Rapides, Sabine, and Vernon.
Mississippi Counties
Adams, Amite, Covington, Forrest, Franklin, Greene, Jefferson,
Jefferson Davis, Jones, Lamar, Lawrence, Lincoln, Marion, Perry,
Pike, Walthall, Wayne, and Wilkinson.
Zone 11
Alabama Counties
Baldwin and Mobile (more than 20 miles from the Mobile city
hall).
Florida Counties
Escambia, Okaloosa, Santa Rosa, and Walton.
Louisiana Parishes
Allen, Beauregard, East Feliciana, Evangeline, Pointe Coupee,
St. Helena, St. Landry, St. Tammany, Tangipahoa, Washington, and
West Feliciana.
Mississippi Counties
George, Hancock, Harrison, Jackson, Pearl River, and Stone.
Zone 12
Alabama Counties
Mobile (within 20 miles of the Mobile city hall).
Louisiana Parishes
Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton
Rouge, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette,
Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St.
Charles, St. James, St. John the Baptist, St. Martin, St. Mary,
Terrebonne, Vermilion, and West Baton Rouge.
Sec. 1007.3 Route disposition.
Route disposition means a delivery to a retail or wholesale outlet
(except a plant), either directly or through any distribution facility
(including disposition from a plant store, vendor or vending machine)
of a fluid milk product classified as Class I milk. Packaged fluid milk
products that are transferred to a distributing plant from a plant with
route disposition in the marketing area and which are classified as
Class I under Sec. 1007.40(a) shall be considered as route disposition
from the transferor plant, rather than the transferee plant, for the
single purpose of qualifying it as a pool plant under Sec. 1007.7(a).
Sec. 1007.4 Plant.
Plant means the land, buildings, facilities, and equipment
constituting a single operating unit or establishment at which milk or
milk products, including filled milk, are received, processed, or
packaged. Separate facilities without stationary storage tanks that are
used only as a reload point for transferring bulk milk from one tank
truck to another or separate facilities used only as a distribution
point for storing packaged fluid milk products in transit for route
disposition shall not be a plant under this definition.
Sec. 1007.5 Distributing plant.
Distributing plant means a plant that is approved by a duly
constituted regulatory agency for the handling of Grade A milk and at
which fluid milk products are processed or packaged and from which
there is route disposition in the marketing area during the month.
Sec. 1007.6 Supply plant.
Supply plant means a plant that is approved by a duly constituted
regulatory agency for the handling of Grade A milk and from which fluid
milk products are transferred during the month to a pool distributing
plant.
Sec. 1007.7 Pool plant.
Pool plant means a plant specified in paragraphs (a), (b), (c) or
(d) of this section, or a unit of plants as specified in paragraph (e)
of this section, but excluding a plant specified in paragraph (g) of
this section. The pooling standards described in paragraphs (a) through
(c) of this section are subject to modification pursuant to paragraph
(f) of this section:
(a) A distributing plant from which during the month:
(1) Total route disposition, except filled milk, is equal to 50
percent or more of the total quantity of Grade A fluid milk products,
except filled milk, physically received at such plant or diverted
therefrom pursuant to Sec. 1007.13; and [[Page 29439]]
(2) Route disposition, except filled milk, in the marketing area is
at least the lesser of a daily average of 1,500 pounds or 10 percent of
the total quantity of fluid milk products, except filled milk,
physically received or diverted therefrom pursuant to Sec. 1007.13.
(b) A supply plant from which during each of the months of July
through November 60 percent (40 percent during each of the months of
December through June) of the total quantity of Grade A milk that is
received during the month from dairy farmers (including producer milk
diverted from the plant pursuant to Sec. 1007.13 but excluding milk
diverted to such plant) and handlers described in Sec. 1007.9(c) is
transferred to pool distributing plants.
(c) A plant located within the Southeast marketing area that is
operated by a cooperative association if pool plant status under this
paragraph is requested for such plant by the cooperative association
and during the month producer milk of members of such cooperative
association is delivered directly from farms to pool distributing
plants or is transferred to such plants as a fluid milk product from
the cooperative's plant. Such deliveries, in excess of receipts by
transfer from pool distributing plants, must equal not less than 60
percent of the total producer milk of such cooperative association in
each of the months of July through November, and 40 percent of such
milk in each of the months of December through June. The plant's pool
plant status shall be subject to the following conditions:
(1) The plant does not qualify as a pool plant under paragraphs (a)
or (b) of this section or under the provisions of another Federal order
applicable to a distributing plant or a supply plant; and
(2) The plant is approved by a duly constituted regulatory agency
to handle Grade A milk.
(d) A plant located within the marketing area (other than a
producer-handler plant or a governmental agency plant) that meets the
qualifications described in paragraph (a) of this section regardless of
its quantity of route disposition in any other Federal order marketing
area.
(e) Two or more plants operated by the same handler and that are
located within the Southeast marketing area may qualify for pool status
as a unit by meeting the total and in-area route disposition
requirements specified in paragraph (a) of this section and the
following additional requirements:
(1) At least one of the plants in the unit must qualify as a pool
plant pursuant to paragraph (a) of this section;
(2) Other plants in the unit must process only Class I or Class II
products and must be located in a pricing zone providing the same or a
lower Class I price than the price applicable at the distributing plant
included in the unit pursuant to paragraph (e)(1) of this section; and
(3) A written request to form a unit, or to add or remove plants
from a unit, must be filed with the market administrator prior to the
first day of the month for which it is to be effective.
(f) The applicable percentages in paragraphs (a) through (c) of
this section may be increased or decreased up to 10 percentage points
by the market administrator if, following a written request for such a
revision, 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 by conducting
an investigation and conferring with the Director of the Dairy
Division. 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 seven days before the effective date.
(g) The term pool plant shall not apply to the following plants:
(1) A producer-handler plant;
(2) An exempt plant as defined in Sec. 1007.8(e);
(3) A plant qualified pursuant to paragraph (a) of this section
which is not located within the Southeast marketing area, meets the
pooling requirements of another Federal order, and has had greater
sales in such other Federal order marketing area for three consecutive
months, including the current month;
(4) A plant qualified pursuant to paragraph (a) of this section
which is located in another order's marketing area and which is
required to be regulated under such other order because of its location
within the other order's marketing area; and
(5) A plant qualified pursuant to paragraph (b) of this section
which also meets the pooling requirements of another Federal order and
from which greater qualifying shipments are made to plants regulated
under such other order than are made to plants regulated under this
part, or such plant has automatic pooling status under such other
order.
Sec. 1007.8 Nonpool plant.
Nonpool plant means any milk or filled milk receiving,
manufacturing, or processing plant other than a pool plant. The
following categories of nonpool plants are further defined as follows:
(a) Other order plant means a plant that is fully subject to the
pricing and pooling provisions of another order issued pursuant to the
Act.
(b) Producer-handler plant means a plant operated by a producer-
handler as defined in any order (including this part) issued pursuant
to the Act.
(c) Partially regulated distributing plant means a nonpool plant
that is not an other order plant, a producer-handler plant, or an
exempt plant, from which there is route disposition in consumer-type
packages or dispenser units in the marketing area during the month.
(d) Unregulated supply plant means a supply plant that does not
qualify as a pool supply plant and is not an other order plant, a
producer-handler plant, or an exempt plant.
(e) Exempt plant means a plant:
(1) Operated by a governmental agency from which fluid milk
products are distributed in the marketing area. Such plant shall be
exempt from all provisions of this part; or
(2) Which has monthly route disposition of 100,000 pounds or less
during the month. Such plant will be exempt from the pricing and
pooling provisions of this order, but the handler will be required to
file periodic reports as prescribed by the market administrator to
enable determination of the exempt status of such handler.
Sec. 1007.9 Handler.
Handler means:
(a) Any person who operates one or more pool plants;
(b) Any cooperative with respect to producer milk which it causes
to be diverted pursuant to Sec. 1007.13 for the account of such
cooperative association;
(c) Any cooperative association with respect to milk that it
receives for its account from the farm of a producer for delivery to a
pool plant of another handler in a tank truck owned and operated by, or
under the control of, such cooperative association, unless both the
cooperative association and the operator of the pool plant notify the
market administrator prior to the time that such milk is delivered to
the pool plant that the plant operator will be the handler of such milk
and will purchase such milk on the basis of weights determined from its
measurement at the farm and butterfat tests determined from farm bulk
tank samples. Milk for which the cooperative association is the handler
pursuant to this paragraph shall [[Page 29440]] be deemed to have been
received by the cooperative association at the location of the pool
plant to which such milk is delivered;
(d) Any person who operates a partially regulated distributing
plant;
(e) A producer-handler;
(f) Any person who operates an other order plant described in
Sec. 1007.8(a);
(g) Any person who operates an unregulated supply plant; and
(h) Any person who operates an exempt plant.
Sec. 1007.10 Producer-handler.
Producer-handler means a person who:
(a) Operates a dairy farm and a distributing plant from which there
is monthly route disposition in excess of 100,000 pounds per month;
(b) Receives no Class I milk from sources other than his/her own
farm production and pool plants;
(c) Disposes of no other source milk as Class I milk; and
(d) Provides proof satisfactory to the market administrator that
the care and management of the dairy animals and other resources
necessary to produce all Class I milk handled (excluding receipts from
pool plants) and the operation of the processing and packaging business
are his/her personal enterprise and personal risk.
Sec. 1007.11 [Reserved]
Sec. 1007.12 Producer.
(a) Except as provided in paragraph (b) of this section, producer
means any person who produces milk approved by a duly constituted
regulatory agency for fluid consumption as Grade A milk and whose milk
is:
(1) Received at a pool plant directly from such producer;
(2) Received by a handler described in Sec. 1007.9(c); or
(3) Diverted from a pool plant in accordance with Sec. 1007.13.
(b) Producer shall not include:
(1) A producer-handler as defined in any order (including this
part) issued pursuant to the Act;
(2) Any person with respect to milk produced by such person whose
milk is delivered to an exempt plant, excluding producer milk diverted
to such exempt plant pursuant to Sec. 1007.13;
(3) Any person with respect to milk produced by such person which
is diverted to a pool plant from an other order plant if the other
order plant designates such person as a producer under that order and
such milk is allocated to Class II or Class III utilization pursuant to
Sec. 1007.44(a)(8)(iii) and the corresponding step of Sec. 1007.44(b);
or
(4) Any person with respect to milk produced by such person which
is reported as diverted to an other order plant if any portion of such
person's milk so moved is assigned to Class I under the provisions of
such other order.
Sec. 1007.13 Producer milk.
Producer milk means the skim milk and butterfat contained in milk
of a producer that is:
(a) Received at a pool plant directly from such producer by the
operator of the plant;
(b) Received by a handler described in Sec. 1007.9(c);
(c) Diverted from a pool plant to the pool plant of another
handler. Milk so diverted shall be deemed to have been received at the
location of the plant to which diverted; or
(d) Diverted by the operator of a pool plant or cooperative
association to a nonpool plant that is not a producer-handler plant,
subject to the following conditions:
(1) In any month of December through June, not less than four days'
production of the producer whose milk is diverted is physically
received at a pool plant during the month;
(2) In any month of July through November, not less than ten days'
production of the producer whose milk is diverted is physically
received at a pool plant during the month;
(3) The total quantity of milk so diverted during the month by a
cooperative association shall not exceed 33 percent during the months
of July through November, or 50 percent during the months of December
through June, of the producer milk that the cooperative association
caused to be delivered to, and physically received at, pool plants
during the month;
(4) The operator of a pool plant that is not a cooperative
association may divert any milk that is not under the control of a
cooperative association that diverts milk during the month pursuant to
paragraph (d) of this section. The total quantity of milk so diverted
during the month shall not exceed 33 percent during the months of July
through November, or 50 percent during the months of December through
June, of the producer milk physically received at such plant (or such
unit of plants in the case of plants that pool as a unit pursuant to
Sec. 1007.7(d)) during the month;
(5) Any milk diverted in excess of the limits prescribed in
paragraphs (d)(3) and (4) of this section shall not be producer milk.
The diverting handler shall designate the dairy farmer deliveries that
will not be producer milk pursuant to paragraphs (d)(3) and (4) of this
section. If the handler fails to make such designation, no milk
diverted by such handler shall be producer milk;
(6) To the extent that it would result in nonpool status for the
plant from which diverted, milk diverted for the account of a
cooperative association from the pool plant of another handler shall
not be producer milk;
(7) The cooperative association shall designate the dairy farm
deliveries that are not producer milk pursuant to paragraph (d)(6) of
this section. If the cooperative association fails to make such
designation, no milk diverted by it to a nonpool plant shall be
producer milk;
(8) Diverted milk shall be priced at the location of the plant to
which diverted; and
(9) The market administrator may increase or decrease the
applicable percentages in paragraphs (d) (3) and (4) of this section by
up to 10 percentage points, and may increase or decrease the 10-day and
4-day delivery requirements in paragraphs (d) (1) and (2) of this
section by 50 percent if, following a written request for such a
revision, 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 by conducting
an investigation and conferring with the Director of the Dairy
Division. 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 seven days before the effective date.
Sec. 1007.14 Other source milk.
Other source milk means all skim milk and butterfat contained in or
represented by:
(a) Receipts of fluid milk products and bulk products specified in
Sec. 1007.40(b)(1) from any source other than producers, a handler
described in Sec. 1007.9(c), or pool plants;
(b) Receipts in packaged form from other plants of products
specified in Sec. 1007.40(b)(1);
(c) Products (other than fluid milk products, products specified in
Sec. 1007.40(b)(1), and products produced at the plant during the same
month) from any source which are reprocessed, converted into, or
combined with another product in the plant during the month; and
[[Page 29441]]
(d) Receipts of any milk product (other than a fluid milk product
or a product specified in Sec. 1007.40(b)(1)) for which the handler
fails to establish a disposition.
Sec. 1007.15 Fluid milk product.
(a) Except as provided in paragraph (b) of this section, fluid milk
product means any milk products in fluid or frozen form containing less
than 9 percent butterfat, that are in bulk or are packaged, distributed
and intended to be used as beverages. Such products include, but are
not limited to: Milk, skim milk, lowfat milk, milk drinks, buttermilk,
and filled milk, including any such beverage products that are
flavored, cultured, modified with added nonfat milk solids, sterilized,
concentrated (to not more than 50 percent total milk solids), or
reconstituted.
(b) The term fluid milk product shall not include:
(1) Plain or sweetened evaporated milk, plain or sweetened
evaporated skim milk, sweetened condensed milk or skim milk, formulas
especially prepared for infant feeding or dietary use that are packaged
in hermetically sealed containers, any product that contains by weight
less than 6.5 percent nonfat milk solids, and whey; and
(2) The quantity of skim milk in any modified product specified in
paragraph (a) of this section that is in excess of the quantity of skim
milk in an equal volume of an unmodified product of the same nature and
butterfat content.
Sec. 1007.16 Fluid cream product.
Fluid cream product means cream (other than plastic cream or frozen
cream), including sterilized cream, or a mixture of cream and milk or
skim milk containing 9 percent or more butterfat, with or without the
addition of other ingredients.
Sec. 1007.17 Filled milk.
Filled milk means any combination of nonmilk fat (or oil) with skim
milk (whether fresh, cultured, reconstituted, or modified by the
addition of nonfat milk solids), with or without milkfat, so that the
product (including stabilizers, emulsifiers, or flavoring) resembles
milk or any other fluid milk product, and contains less than 6 percent
nonmilk fat (or oil).
Sec. 1007.18 Cooperative association.
Cooperative association means any cooperative marketing association
of producers which the Secretary determines after application by the
association:
(a) To be qualified under the provisions of the Act of Congress of
February 18, 1922, as amended, known as the ``Capper-Volstead Act;''
and
(b) To have full authority in the sale of milk of its members and
be engaged in making collective sales of, or marketing, milk or milk
products for its members.
Sec. 1007.19 Commercial food processing establishment.
Commercial food processing establishment means any facility, other
than a milk or filled milk plant, to which bulk fluid milk products and
bulk fluid cream products are disposed of, or producer milk is
diverted, that uses such receipts as ingredients in food products, and
has no disposition of fluid milk products or fluid cream products other
than those that it received in consumer type packages. Producer milk
diverted to commercial food processing establishments shall be subject
to the same provisions relating to diversions to plants, including, but
not limited to, provisions in Secs. 1007.13, 1007.41, and 1007.52.
Handler Reports
Sec. 1007.30 Reports of receipts and utilization.
On or before the 5th day after the end of the month (if
postmarked), or not later than the 7th day if the report is delivered
in person to the office of the market administrator, each handler shall
report for such month to the market administrator, in the detail and on
forms prescribed by the market administrator, as follows:
(a) Each handler, with respect to each of its pool plants, shall
report the quantities of skim milk and butterfat contained in or
represented by:
(1) Receipts of producer milk, including producer milk diverted by
the handler from the pool plant to other plants;
(2) Receipts of milk from handlers described in Sec. 1007.9(c);
(3) Receipts of fluid milk products and bulk fluid cream products
from other pool plants;
(4) Receipts of other source milk;
(5) Inventories at the beginning and end of the month of fluid milk
products and products specified in Sec. 1007.40(b)(1); and
(6) The utilization or disposition of all milk, filled milk, and
milk products required to be reported pursuant to this paragraph.
(b) Each handler operating a partially regulated distributing plant
shall report with respect to such plant in the same manner as
prescribed for reports required by paragraph (a) of this section.
Receipts of milk that would have been producer milk if the plant had
been fully regulated shall be reported in lieu of producer milk. Such
report shall show also the quantity of any reconstituted skim milk in
route disposition in the marketing area.
(c) Each handler described in Sec. 1007.9(b) and (c) shall report:
(1) The quantities of skim milk and butterfat contained in receipts
from producers; and
(2) The utilization or disposition of all such receipts.
(d) Each handler not specified in paragraphs (a) through (c) of
this section shall report with respect to its receipts and utilization
of milk, filled milk, and milk products in such manner as the market
administrator may prescribe.
Sec. 1007.31 Payroll reports.
(a) On or before the 20th day after the end of each month, each
handler described in Sec. 1007.9(a), (b), and (c) shall report to the
market administrator its producer payroll for such month, in detail
prescribed by the market administrator, showing for each producer:
(1) Such producer's name and address;
(2) The total pounds of milk received from such producer, showing
separately the pounds of milk received from the producer on each
delivery day;
(3) The average butterfat content of such milk; and
(4) The price per hundredweight, the gross amount due, the amount
and nature of any deduction, and the net amount paid.
(b) Each handler operating a partially regulated distributing plant
who elects to make payment pursuant to Sec. 1007.76(b) shall report for
each dairy farmer who would have been a producer if the plant had been
fully regulated in the same manner as prescribed for reports required
by paragraph (a) of this section.
Sec. 1007.32 Other reports.
(a) Each handler described in Sec. 1007.9(a), (b), and (c) shall
report to the market administrator on or before the 7th day after the
end of each month of February through May the aggregate quantity of
base milk received from producers during the month, and on or before
the 20th day after the end of each month of February through May the
pounds of base milk received from each producer during the month. In
the case of milk diverted to another plant, the handler shall also
report the pounds of base milk of each producer assigned to the
divertee plant.
(b) In addition to the reports required pursuant to paragraph (a)
of this section and Secs. 1007.30 and 1007.31, each
[[Page 29442]] handler shall report such information as the market
administrator deems necessary to verify or establish each handler's
obligation under the order.
Classification of Milk
Sec. 1007.40 Classes of utilization.
Except as provided in Sec. 1007.42, all skim milk and butterfat
required to be reported pursuant to Sec. 1007.30 shall be classified as
follows:
(a) Class I milk shall be all skim milk and butterfat:
(1) Disposed of in the form of a fluid milk product, except as
otherwise provided in paragraphs (b) and (c) of this section;
(2) In packaged fluid milk products in inventory at the end of the
month; and
(3) Not specifically accounted for as Class II or Class III milk.
(b) Class II milk shall be all skim milk and butterfat:
(1) Disposed in the form of a fluid cream product or any product
containing artificial fat, fat substitutes, or 6 percent or more
nonmilk fat (or oil) that resembles a fluid cream product, except as
otherwise provided in paragraph (c) of this section;
(2) In packaged inventory at the end of the month of the products
specified in paragraph (b)(1) of this section and in bulk concentrated
fluid milk products in inventory at the end of the month;
(3) In bulk fluid milk products and bulk fluid cream products
disposed of or diverted to a commercial food processing establishment
if the market administrator is permitted to audit the records of the
commercial food processing establishment for the purpose of
verification. Otherwise, such uses shall be Class I;
(4) Used to produce:
(i) Cottage cheese, lowfat cottage cheese, dry curd cottage cheese,
ricotta cheese, pot cheese, Creole cheese, and any similar soft, high-
moisture cheese resembling cottage cheese in form or use;
(ii) Milkshake and ice milk mixes (or bases), frozen desserts, and
frozen dessert mixes distributed in one-quart containers or larger and
intended to be used in soft or semi-solid form;
(iii) Aerated cream, frozen cream, sour cream, sour half-and-half,
sour cream mixtures containing nonmilk items, yogurt, and any other
semi-solid product resembling a Class II product;
(iv) Eggnog, custards, puddings, pancake mixes, buttermilk biscuit
mixes, coatings, batter, and similar products;
(v) Formulas especially prepared for infant feeding or dietary use
(meal replacement) that are packaged in hermetically sealed containers;
(vi) Candy, soup, bakery products and other prepared foods which
are processed for general distribution to the public, and intermediate
products, including sweetened condensed milk, to be used in processing
such prepared food products; and
(vii) Any product not otherwise specified in this section.
(c) Class III milk shall be all skim milk and butterfat:
(1) Used to produce:
(i) Cream cheese and other spreadable cheeses, and hard cheese of
types that may be shredded, grated, or crumbled, and are not included
in paragraph (b)(4)(i) of this section;
(ii) Butter, plastic cream, anhydrous milkfat, and butteroil;
(iii) Any milk product in dry form except nonfat dry milk;
(iv) Evaporated or sweetened condensed milk in a consumer-type
package and evaporated or sweetened condensed skim milk in a consumer-
type package; and
(2) In inventory at the end of the month of unconcentrated fluid
milk products in bulk form and products specified in paragraph (b)(1)
of this section in bulk form;
(3) In fluid milk products, products specified in paragraph (b)(1)
of this section, and products processed by the disposing handler that
are specified in paragraphs (b)(4)(i) through (iv) of this section,
that are disposed of by a handler for animal feed;
(4) In fluid milk products, products specified in paragraph (b)(1)
of this section, and products processed by the disposing handler that
are specified in paragraphs (b)(4) (i) through (iv) of this section,
that are dumped by a handler. The market administrator may require
notification by the handler of such dumping in advance for the purpose
of having the opportunity to verify such disposition. In any case,
classification under this paragraph requires a handler to maintain
adequate records of such use. If advance notification of such dumping
is not possible, or if the market administrator so requires, the
handler must notify the market administrator on the next business day
following such use;
(5) In fluid milk products and products specified in paragraph
(b)(1) of this section that are destroyed or lost by a handler in a
vehicular accident, flood, fire, or in a similar occurrence beyond the
handler's control, to the extent that the quantities destroyed or lost
can be verified from records satisfactory to the market administrator;
(6) In skim milk in any modified fluid milk product or in any
product specified in paragraph (b)(1) of this section that is in excess
of the quantity of skim milk in such product that was included within
the fluid milk product definition pursuant to Sec. 1007.15 and the
fluid cream product definition pursuant to Sec. 1007.16; and
(7) In shrinkage assigned pursuant to Sec. 1007.41(a) to the
receipts specified in Sec. 1007.41(a)(2) and in shrinkage specified in
Sec. 1007.41 (b) and (c).
(d) Class III-A milk shall be all skim milk and butterfat used to
produce nonfat dry milk.
Sec. 1007.41 Shrinkage.
For the purposes of classifying all skim milk and butterfat to be
reported by a handler pursuant to Sec. 1007.30, the market
administrator shall determine the following:
(a) The pro rata assignment of shrinkage of skim milk and
butterfat, respectively, at each pool plant to the respective
quantities of skim milk and butterfat:
(1) In the receipts specified in paragraphs (b) (1) through (6) of
this section on which shrinkage is allowed pursuant to such paragraph;
and
(2) In other source milk not specified in paragraphs (b) (1)
through (6) of this section which was received in the form of a bulk
fluid milk product or a bulk fluid cream product;
(b) The shrinkage of skim milk and butterfat, respectively,
assigned pursuant to paragraph (a) of this section to the receipts
specified in paragraph (a)(1) of this section that is not in excess of:
(1) Two percent of the skim milk and butterfat, respectively, in
producer milk (excluding milk diverted by the plant operator to another
plant);
(2) Plus 1.5 percent of the skim milk and butterfat, respectively,
in milk received from a handler described in Sec. 1007.9(c), except
that if the operator of the plant to which the milk is delivered
purchased such milk on the basis of weights determined from its
measurement at the farm and butterfat tests determined from farm bulk
tank samples, the applicable percentage shall be 2 percent;
(3) Plus 0.5 percent of the skim milk and butterfat, respectively,
in producer milk diverted from such plant by the plant operator to
another plant, except that if the operator of the plant to which the
milk is delivered purchased such milk on the basis of weights
determined from its measurement at the farm and butterfat tests
determined from farm bulk tank samples, the applicable percentage shall
be zero;
(4) Plus 1.5 percent of the skim milk and butterfat, respectively,
in bulk fluid [[Page 29443]] milk products received by transfer from
other pool plants;
(5) Plus 1.5 percent of the skim milk and butterfat, respectively,
in bulk fluid milk products received by transfer from other order
plants, excluding the quantity for which Class II or Class III
classification is requested by the handler; and
(6) Plus 1.5 percent of the skim milk and butterfat, respectively,
in bulk fluid milk products received by transfer from unregulated
supply plants, excluding the quantity for which Class II or Class III
classification is requested by the handler; and
(7) Less 1.5 percent of the skim milk and butterfat, respectively,
in bulk fluid milk products transferred to other plants that is not in
excess of the respective amount of skim milk and butterfat to which
percentages are applied in paragraphs (b) (1), (2), (4), (5), and (6)
of this section; and
(c) The quantity of skim milk and butterfat, respectively, in
shrinkage of milk from producers for which a cooperative association is
the handler pursuant to Sec. 1007.9 (b) or (c), but not in excess of
0.5 percent of the skim milk and butterfat, respectively, in such milk.
If the operator of the plant to which the milk is delivered purchases
such milk on the basis of weights determined from its measurement at
the farm and butterfat tests determined from farm bulk tank samples,
the applicable percentage under this paragraph for the cooperative
association shall be zero.
Sec. 1007.42 Classification of transfers and diversions.
(a) Transfers and diversions to pool plants. Skim milk or butterfat
transferred or diverted in the form of a fluid milk product or
transferred in the form of a bulk fluid cream product from a pool plant
to another pool plant shall be classified as Class I milk unless the
operators of both plants request the same classification in another
class. In either case, the classification shall be subject to the
following conditions:
(1) The skim milk or butterfat classified in each class shall be
limited to the amount of skim milk and butterfat, respectively,
remaining in such class at the transferee-plant after the computations
pursuant to Sec. 1007.44(a)(12) and the corresponding step of
Sec. 1007.44(b). The amount of skim milk or butterfat classified in
each class shall include the assigned utilization of skim milk or
butterfat in transfers of concentrated fluid milk products.
(2) If the transferor-plant received during the month other source
milk to be allocated pursuant to Sec. 1007.44(a)(7) or the
corresponding step of Sec. 1007.44(b), the skim milk or butterfat so
transferred shall be classified so as to allocate the least possible
Class I utilization to such other source milk; and
(3) If the transferor-plant received during the month other source
milk to be allocated pursuant to Sec. 1007.44(a) (11) or (12) or the
corresponding steps of Sec. 1007.44(b), the skim milk or butterfat so
transferred, up to the total of the skim milk and butterfat,
respectively, in such receipts of other source milk, shall not be
classified as Class I milk to a greater extent than would be the case
if the other source milk had been received at the transferee-plant.
(b) Transfers and diversions to other order plants. Skim milk or
butterfat transferred or diverted in the form of a fluid milk product
or transferred in the form of a bulk fluid cream product from a pool
plant to an other order plant shall be classified in the following
manner. Such classification shall apply only to the skim milk or
butterfat that is in excess of any receipts at the pool plant from the
other plant of skim milk and butterfat, respectively, in fluid milk
products and bulk fluid cream products, respectively, that are in the
same category as described in paragraph (b) (1), (2), or (3) of this
section.
(1) If transferred as packaged fluid milk products, classification
shall be in the classes to which allocated as a fluid milk product
under the other order;
(2) If transferred in bulk form, classification shall be in the
classes to which allocated under the other order (including allocation
under the conditions set forth in paragraph (b)(3) of this section);
(3) If the operators of both plants so request in their reports of
receipts and utilization filed with their respective market
administrators, transfers or diversions in bulk form shall be
classified as Class II or Class III milk to the extent of such
utilization available for such classification pursuant to the
allocation provisions of the other order;
(4) If information concerning the classes to which such transfers
or diversions were allocated under the other order is not available to
the market administrator for the purpose of establishing classification
under this paragraph, classification shall be Class I subject to
adjustment when such information is available;
(5) For purposes of this paragraph, if the other order provides for
a different number of classes of utilization than is provided for under
this part, skim milk or butterfat allocated to the class consisting
primarily of fluid milk products shall be classified as Class I milk,
and skim milk or butterfat allocated to the other classes shall be
classified as Class III milk; and
(6) If the form in which any fluid milk product that is transferred
to an other order plant is not defined as a fluid milk product under
such other order, classification shall be in accordance with the
provisions of Sec. 1007.40.
(c) Transfers and diversions to producer-handlers and to exempt
plants. Skim milk or butterfat that is transferred or diverted from a
pool plant to a producer-handler under another Federal order or to an
exempt plant shall be classified:
(1) As Class I milk if transferred or diverted to a producer-
handler;
(2) As Class I milk if transferred to an exempt plant in the form
of a packaged fluid milk product;
(3) In accordance with the utilization assigned to it by the market
administrator if transferred or diverted in the form of a bulk fluid
milk product or a bulk fluid cream product to an exempt plant. For this
purpose, the transferee's utilization of skim milk and butterfat in
each class, in series beginning with Class III, shall be assigned to
the extent possible to its receipts of skim milk and butterfat,
respectively, in bulk fluid cream products, pro rata to each source.
(d) Transfers and diversions to other nonpool plants. Skim milk or
butterfat transferred or diverted in the following forms from a pool
plant to a nonpool plant that is not an other order plant, a producer-
handler plant, or an exempt plant shall be classified:
(1) As Class I milk, if transferred in the form of a packaged fluid
milk product; and
(2) As Class I milk, if transferred or diverted in the form of a
bulk fluid milk product or transferred in the form of a bulk fluid
cream product, unless the following conditions apply:
(i) If the conditions described in paragraphs (d)(2)(i) (A) and (B)
of this section are met, transfers or diversions in bulk form shall be
classified on the basis of the assignment of the nonpool plant's
utilization to its receipts as set forth in paragraphs (d)(2) (ii)
through (viii) of this section:
(A) The transferor-handler or divertor-handler claims such
classification in such handler's report of receipts and utilization
filed pursuant Sec. 1007.30 for the month within which such transaction
occurred; and
(B) The nonpool plant operator maintains books and records showing
the utilization of all skim milk and butterfat received at such plant
which are made available for verification [[Page 29444]] purposes if
requested by the market administrator;
(ii) Route disposition in the marketing area of each Federal order
from the nonpool plant and transfers of packaged fluid milk products
from such nonpool plant to plants fully regulated thereunder shall be
assigned to the extent possible in the following sequence:
(A) Pro rata to receipts of packaged fluid milk products at such
nonpool plants from pool plants;
(B) Pro rata to any remaining unassigned receipts of packaged fluid
milk products at such nonpool plants from other order plants;
(C) Pro rata to receipts of bulk fluid milk products at such
nonpool plant from pool plants; and
(D) Pro rata to any remaining unassigned receipts of bulk fluid
milk products at such nonpool plant from other order plants;
(iii) Any remaining Class I disposition of packaged fluid milk
products from the nonpool plant shall be assigned to the extent
possible pro rata to any remaining unassigned receipts of packaged
fluid milk products at such nonpool plant from pool plants and other
order plants;
(iv) Transfers of bulk fluid milk products from the nonpool plant
to a plant regulated under any Federal milk order, to the extent that
such transfers to the regulated plant exceed receipts of fluid milk
products from such plant and are allocated to Class I at the
transferee-plant, shall be classified to the extent possible in the
following sequence:
(A) Pro rata to receipts of fluid milk products at such nonpool
plant from pool plants; and
(B) Pro rata to any remaining unassigned receipts of fluid milk
products at such nonpool plant from other order plants;
(v) Any remaining unassigned Class I disposition from the nonpool
plant shall be assigned to the extent possible in the following
sequence:
(A) To such nonpool plant's receipts from dairy farmers who the
market administrator determines constitute regular sources of Grade A
milk for such nonpool plant; and
(B) To such nonpool plant's receipts of Grade A milk from plants
not fully regulated under any Federal milk order which the market
administrator determines constitute regular sources of Grade A milk for
such nonpool plant;
(vi) Any remaining unassigned receipts of bulk fluid milk products
at the nonpool plant from pool plants and other order plants shall be
assigned, pro rata among such plants, to the extent possible first to
any remaining Class I utilization, then to Class II utilization, and
then to Class III utilization at such nonpool plant;
(vii) Receipts of bulk fluid cream products at the nonpool plant
from pool plants and other order plants shall be assigned, pro rata
among such plants, to the extent possible first to any remaining Class
II utilization, then to any remaining Class III utilization, and then
to Class I utilization at such nonpool plant; and
(viii) In determining the nonpool plant's utilization for purposes
of this paragraph, any fluid milk products and bulk fluid cream
products transferred from such nonpool plant to a plant not fully
regulated under any Federal milk order shall be classified on the basis
of the second plant's utilization using the same assignment priorities
at the second plant that are set forth in this paragraph.
(e) Transfers by a handler described in Sec. 1007.9(c) to pool
plants. Skim milk and butterfat transferred in the form of bulk milk by
a handler described in Sec. 1007.9(c) to another handler's pool plant
shall be classified pursuant to Sec. 1007.44 pro rata with producer
milk received at the transferee-handler's plant.
Sec. 1007.43 General classification rules.
In determining the classification of producer milk pursuant to
Sec. 1007.44, 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. 1007.30 and shall compute separately for each pool plant, and for
each cooperative association with respect to milk for which it is the
handler pursuant to Sec. 1007.9 (b) or (c) that was not received at a
pool plant, the pounds of skim milk and butterfat, respectively, in
each class in accordance with Secs. 1007.40, 1007.41, and 1007.42. The
combined pounds of skim milk and butterfat so determined in each class
for a handler described in Sec. 1007.9 (b) or (c) shall be such
handler's classification of producer milk;
(b) 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;
(c) The classification of producer milk for which a cooperative
association is the handler pursuant to Sec. 1007.9 (b) or (c) shall be
determined separately from the operations of any pool plant operated by
such cooperative association;
(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 assignment
under Sec. 1007.44. Any remaining skim milk and butterfat in
concentrated receipts shall be assigned to uses under Sec. 1007.44 on a
pro rata basis, unless a specific use of such receipts is established
by the handler; and
(e) Class III-A milk shall be allocated in combination with Class
III milk and the quantity of producer milk eligible to be priced in
Class III-A shall be determined by prorating receipts from pool sources
to Class III-A use on the basis of the quantity of total receipts of
bulk fluid milk products allocated to Class III use at the plant.
Sec. 1007.44 Classification of producer milk.
For each month the market administrator shall determine for each
handler described in Sec. 1007.9(a) for each pool plant of the handler
separately the classification of producer milk and milk received from a
handler described in Sec. 1007.9(c), by allocating the handler's
receipts of skim milk and butterfat to the utilization of such receipts
by such handler as follows:
(a) Skim milk shall be allocated in the following manner:
(1) Subtract from the total pounds of skim milk in Class III the
pounds of skim milk in shrinkage specified in Sec. 1007.41(b);
(2) Subtract from the total 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
milk 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 milk order in the immediately preceding month;
(3) Subtract from the pounds of skim milk remaining in each class
the pounds of skim milk in fluid milk products [[Page 29445]] received
in packaged form from an other order plant, except that to be
subtracted pursuant to paragraph (a)(7)(vi) of this section, as
follows:
(i) From Class III milk, the lesser of the pounds remaining or 2
percent of such receipts; and
(ii) From Class I milk, the remainder of such receipts;
(4) Subtract from the pounds of skim milk in Class II the pounds of
skim milk in products specified in Sec. 1007.40(b)(1) that were
received in packaged form from other plants, but not in excess of the
pounds of skim milk remaining in Class II;
(5) Subtract from the remaining pounds of skim milk in Class II the
pounds of skim milk in products specified in Sec. 1007.40(b)(1) in
packaged form and in bulk concentrated fluid milk products that were in
inventory at the beginning of the month, but not in excess of the
pounds of skim milk remaining in Class II. This paragraph shall apply
only if the pool plant was subject to the provisions of this paragraph
or comparable provisions of another Federal milk order in the
immediately preceding month;
(6) Subtract from the remaining pounds of skim milk in Class II the
pounds 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 specified in Sec. 1007.40(b)
(excluding the quantity of such skim milk that was classified as Class
III milk pursuant to Sec. 1007.40(c)(6)), but not in excess of the
pounds of skim milk remaining in Class II;
(7) Subtract in the order specified below from the pounds of skim
milk remaining in each class, in series beginning with Class III, the
pounds of skim milk in each of the following:
(i) Bulk concentrated fluid milk products and other source milk
(except other source milk received in the form of an unconcentrated
fluid milk product) and, if paragraph (a)(5) of this section applies,
packaged inventory at the beginning of the month of products specified
in Sec. 1007.40(b)(1) that were not subtracted pursuant to paragraphs
(a)(4), (a)(5), and (a)(6) of this section;
(ii) Receipts of fluid milk products (except filled milk) for which
Grade A certification is not established;
(iii) Receipts of fluid milk products from unidentified sources;
(iv) Receipts of fluid milk products from a producer-handler as
defined under any Federal milk order and from an exempt distributing
plant;
(v) Receipts of reconstituted skim milk in filled milk from an
unregulated supply plant that were not subtracted pursuant to paragraph
(a)(2)(i) of this section; and
(vi) Receipts of reconstituted skim milk in filled milk from an
other order plant that is fully regulated under any Federal milk order
providing for individual-handler pooling, to the extent that
reconstituted skim milk is allocated to Class I at the transferor-
plant;
(8) Subtract in the order specified below from the pounds of skim
milk remaining in Class II and Class III, in sequence beginning with
Class III:
(i) The pounds of skim milk in receipts of fluid milk products from
an unregulated supply plant that were not subtracted pursuant to
paragraphs (a)(2)(i) and (7)(v) of this section for which the handler
requests a classification other than Class I, but not in excess of the
pounds of skim milk remaining in Class II and Class III combined;
(ii) The pounds of skim milk in receipts of fluid milk products
from an unregulated supply plant that were not subtracted pursuant to
paragraphs (a)(2)(i), (7)(v), and (8)(i) of this section which are in
excess of the pounds of skim milk determined pursuant to paragraphs
(a)(8)(ii) (A) through (C) of this section. Should the pounds of skim
milk to be subtracted from Class II and Class III combined exceed the
pounds of skim milk remaining in such classes, the pounds of skim milk
in Class II and Class III combined shall be increased (increasing as
necessary Class III and then Class II to the extent of available
utilization in such classes at the nearest other pool plant of the
handler, and then at each successively more distant pool plant of the
handler) by an amount equal to such excess quantity to be subtracted,
and the pounds of skim milk in Class I shall be decreased a like
amount. In such case, the pounds of skim milk remaining in each class
at this allocation step at the handler's other pool plants shall be
adjusted in the reverse direction by a like amount;
(A) Multiply by 1.25 the sum of the pounds of skim milk remaining
in Class I at this allocation step at all pool plants of the handler
(excluding any duplication of Class I utilization resulting from
reported Class I transfers between pool plants of the handler);
(B) Subtract from the above result the sum of the pounds of skim
milk in receipts at all pool plants of the handler of producer milk,
milk from a handler described in Sec. 1007.9(c), fluid milk products
from pool plants of other handlers, and bulk fluid milk products from
other order plants that were not subtracted pursuant to paragraph
(a)(7)(vi) of this section; and
(C) Multiply any plus quantity resulting above by the percentage
that the receipts of skim milk in fluid milk products from unregulated
supply plants that remain at this pool plant is of all such receipts
remaining at this allocation step at all pool plants of the handler;
and
(iii) The pounds of skim milk in receipts of bulk fluid milk
products from an other order plant that are in excess of bulk fluid
milk products transferred or diverted to such plant and that were not
subtracted pursuant to paragraph (a)(7)(vi) of this section, if Class
II or Class III classification is requested by the operator of the
other order plant and the handler, but not in excess of the pounds of
skim milk remaining in Class II and Class III combined;
(9) Subtract from the pounds of skim milk remaining in each class,
in series beginning with Class III, the pounds of skim milk in fluid
milk products and products specified in Sec. 1007.40(b)(1) in inventory
at the beginning of the month that were not subtracted pursuant to
paragraphs (a)(2)(ii), (a)(5), and (a)(7)(i) of this section;
(10) Add to the remaining pounds of skim milk in Class III the
pounds of skim milk subtracted pursuant to paragraph (a)(1) of this
section;
(11) Subject to the provisions of paragraphs (a)(11) (i) and (ii)
of this section, subtract from the pounds of skim milk remaining in
each class at the plant, pro rata to the total pounds of skim milk
remaining in Class I and in Class II and Class III combined at this
allocation step at all pool plants of the handler (excluding any
duplication of utilization in each class resulting from transfers
between pool plants of the handler), with the quantity prorated to
Class II and Class III combined being subtracted first from Class III
and then from Class II, the pounds of skim milk in receipts of fluid
milk products from an unregulated supply plant that were not subtracted
pursuant to paragraphs (a)(2)(i), (a)(7)(v), (a)(8)(i), and (a)(8)(ii)
of this section and that were not offset by transfers or diversions of
fluid milk products to the same unregulated supply plant from which
fluid milk products to be allocated at this step were received:
(i) Should the pounds of skim milk to be subtracted from Class II
and Class III combined pursuant to paragraph (a)(11) of this section
exceed the pounds of skim milk remaining in such classes, the pounds of
skim milk in Class II and Class III combined shall be increased
[[Page 29446]] (increasing as necessary Class III and then Class II to
the extent of available utilization in such classes at the nearest
other pool plant of the handler, and then at each successively more
distant pool plant of the handler) by an amount equal to such excess
quantity to be subtracted, and the pounds of skim milk in Class I shall
be decreased a like amount. In such case, the pounds of skim milk
remaining in each class at this allocation step at the handler's other
pool plants shall be adjusted in the reverse direction by a like
amount; and
(ii) Should the pounds of skim milk to be subtracted from Class I
pursuant to paragraph (a)(11) of this section exceed the pounds of skim
milk remaining in such class, the pounds of skim milk in Class I shall
be increased by an amount equal to such excess quantity to be
subtracted, and the pounds of skim milk in Class II and Class III
combined shall be decreased by a like amount (decreasing as necessary
Class III then Class II). In such case, the pounds of skim milk
remaining in each class at this allocation step at the handler's other
pool plants shall be adjusted in the reverse direction by a like
amount, beginning with the nearest plant at which Class I utilization
is available;
(12) Subtract in the manner specified below from the pounds of skim
milk remaining in each class the pounds of skim milk in receipts of
bulk fluid milk products from an other order plant that are in excess
of bulk fluid milk products transferred or diverted to such plant that
were not subtracted pursuant to paragraphs (a)(7)(vi) and (8)(iii) of
this section:
(i) Subject to the provisions of paragraphs (a)(12) (ii), (iii) and
(iv) of this section, such subtraction shall be pro rata to the pounds
of skim milk in Class I and in Class II and Class III combined, with
the quantity prorated to Class II and Class III combined being
subtracted first from Class III and then from Class II, with respect to
whichever of the following quantities represents the lower proportion
of Class I milk:
(A) The estimated utilization of skim milk of all handlers in each
class as announced for the month pursuant to Sec. 1007.45(a); or
(B) The total pounds of skim milk remaining in each class at this
allocation step at all pool plants of the handler (excluding any
duplication of utilization in each class resulting from transfers
between pool plants of the handler);
(ii) Should the proration pursuant to paragraph (a)(12)(i) of this
section result in the total pounds of skim milk at all pool plants of
the handler that are to be subtracted at this allocation step from
Class II and Class III combined exceeding the pounds of skim milk
remaining in Class II and Class III at all such plants, the pounds of
such excess shall be subtracted from the pounds remaining in Class I
after such proration at the pool plants at which such other source milk
was received;
(iii) Except as provided in paragraph (a)(12)(ii) of this section,
should the computations pursuant to paragraph (a)(12) (i) or (ii) of
this section result in a quantity of skim milk to be subtracted from
Class II and Class III combined that exceeds the pounds of skim milk
remaining in such classes, the pounds of skim milk in Class II and
Class III combined shall be increased (increasing as necessary Class
III and then Class II to the extent of available utilization in such
classes at the nearest other pool plant of the handler, and then at
each successively more distant pool plant of the handler) by an amount
equal to such excess quantity to be subtracted, and the pounds of skim
milk in Class I shall be decreased by a like amount. In such case, the
pounds of skim milk remaining in each class at this allocation step at
the handler's other pool plants shall be adjusted in the reverse
direction by a like amount; and
(iv) Except as provided in paragraph (a)(12)(ii) of this section,
should the computations pursuant to paragraph (a)(12) (i) or (ii) of
this section result in a quantity of skim milk to be subtracted from
Class I that exceeds the pounds of skim milk remaining in such class,
the pounds of skim milk in Class I shall be increased by an amount
equal to such excess quantity to be subtracted, and the pounds of skim
milk in Class II and Class III combined shall be decreased by a like
amount (decreasing as necessary Class III and then Class II). In such
case the pounds of skim milk remaining in each class at this allocation
step at the handler's other pool plants shall be adjusted in the
reverse direction by a like amount beginning with the nearest plant at
which Class I utilization is available;
(13) 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 according to the
classification of such products pursuant to Sec. 1007.42(a); and
(14) If the total pounds of skim milk remaining in all classes
exceed the pounds of skim milk in producer milk and milk received from
a handler described in Sec. 1007.9(c), subtract such excess from the
pounds of skim milk remaining in each class in series beginning with
Class III. Any amount so subtracted shall be known as ``overage'';
(b) Butterfat shall be allocated in accordance with the procedure
outlined for skim milk in paragraph (a) of this section; and
(c) The quantity of producer milk and milk received from a handler
described in Sec. 1007.9(c) in each class shall be the combined pounds
of skim milk and butterfat remaining in each class after the
computations pursuant to paragraph (a)(14) of this section and the
corresponding step of paragraph (b) of this section.
Sec. 1007.45 Market administrator's reports and announcements
concerning classification.
The market administrator shall make the following reports and
announcements concerning classification:
(a) Whenever required for the purpose of allocating receipts from
other order plants pursuant to Sec. 1007.44(a)(12) and the
corresponding step of Sec. 1007.44(b), estimate and publicly announce
the utilization (to the nearest whole percentage) in each class during
the month of skim milk and butterfat, respectively, in producer milk of
all handlers. Such estimate shall be based upon the most current
available data and shall be final for such purpose.
(b) Report to the market administrator of the other order, as soon
as possible after the report of receipts and utilization for the month
is received from a handler who has received fluid milk products or bulk
fluid cream products from an other order plant, the class to which such
receipts are allocated pursuant to Secs. 1007.43(d) and 1007.44 on the
basis of such report (including any reclassification of inventories of
bulk concentrated fluid milk products), and thereafter, any change in
such allocation required to correct errors disclosed in the
verification of such report.
(c) Furnish each handler operating a pool plant who has shipped
fluid milk products or bulk fluid cream products to an other order
plant the class to which such shipments were allocated by the market
administrator of the other order on the basis of the report by the
receiving handler, and, as necessary, any changes in such allocation
arising from the verification of such report.
(d) On or before the 12th day after the end of each month, report
to each cooperative association which so requests, the percentage of
producer milk delivered by members of such association that was used in
each class by each handler receiving such milk. For the purpose of this
report the milk [[Page 29447]] so received shall be prorated to each
class in accordance with the total utilization of producer milk by such
handler.
Class Prices
Sec. 1007.50 Class prices.
Subject to the provisions of Sec. 1007.52, the class prices for the
month per hundredweight of milk containing 3.5% butterfat shall be as
follows:
(a) The Class I price shall be the basic formula price for the
second preceding month plus $3.08.
(b) The Class II price shall be the basic formula price for the
second preceding month plus $.30.
(c) The Class III price shall be the basic formula price for the
month.
(d) The Class III-A price for the month shall be the average
Central States nonfat dry milk price for the month, as reported by the
Department, less 12.5 cents, times an amount computed by subtracting
from 9 an amount calculated by dividing 0.4 by such nonfat dry milk
price, plus the butterfat differential value per hundredweight of 3.5
percent milk and rounded to the nearest cent, and subject to the
adjustments set forth in paragraph (c) of this section for the
applicable month.
Sec. 1007.51 Basic formula price.
The basic formula price shall be the preceding month's average pay
price for manufacturing grade milk in Minnesota and Wisconsin using the
``base month'' series, as reported by the Department, adjusted to a 3.5
percent butterfat basis using the butterfat differential for the
preceding month computed pursuant to Sec. 1007.74 and rounded to the
nearest cent, plus or minus the change in gross value yielded by the
butter-nonfat dry milk and Cheddar cheese product price formula
computed pursuant to paragraphs (a) through (e) of this section.
(a) The gross values of per hundredweight of milk used to
manufacture butter-nonfat dry milk and Cheddar cheese shall be
computed, using price data determined pursuant to paragraph (b) of this
section and annual yield factors, for the preceding month and
separately for the current month as follows:
(1) The gross value of milk used to manufacture butter-nonfat dry
milk shall be the sum of the following computations:
(i) Multiply the Grade AA butter price by 4.27;
(ii) Multiply the nonfat dry milk price by 8.07; and
(iii) Multiply the dry buttermilk price by 0.42.
(2) The gross value of milk used to manufacture Cheddar cheese
shall be the sum of the following computations:
(i) Multiply the Cheddar cheese price by 9.87; and
(ii) Multiply the Grade A butter price by 0.238.
(b) The following product prices shall be used pursuant to
paragraph (a) of this section:
(1) Grade AA butter price. Grade AA butter price means the simple
average for the month of the Chicago Mercantile Exchange, Grade AA
butter price, as reported by the Department.
(2) Nonfat dry milk price. Nonfat dry milk price means the simple
average for the month of the Western Nonfat Dry Milk Low/Medium Heat
price, as reported by the Department.
(3) Dry buttermilk price. Dry buttermilk price means the simple
average for the month of the Western Dry Buttermilk price, as reported
by the Department.
(4) Cheddar cheese price. Cheddar cheese price means the simple
average for the month of the National Cheese Exchange 40-pound block
Cheddar cheese price, as reported by the Department.
(5) Grade A butter price. Grade A butter price means the simple
average for the month of the Chicago Mercantile Exchange Grade A butter
price, as reported by the Department.
(c) Determine the amounts by which the gross value per
hundredweight of milk used to manufacture butter-nonfat dry milk and
the gross value per hundredweight of milk used to manufacture Cheddar
cheese for the current month exceed or are less than the respective
gross values for the preceding month.
(d) Compute weighting factors to be applied to the changes in gross
values determined pursuant to paragraph (c) of this section by
determining the relative proportion that the data included in each of
the following paragraphs is of the total of the data represented in
paragraphs (d)(1) and (d)(2) of this section:
(1) Combine the total nonfat dry milk production for the States of
Minnesota and Wisconsin, as reported by the Department, for the most
recent preceding period, and divide by the annual yield factor for
nonfat dry milk, 8.07, to determine the quantity (in hundredweights) of
milk used in the production of butter-nonfat dry milk; and
(2) Combine the total American cheese production for the States of
Minnesota and Wisconsin, as reported by the Department, for the most
recent preceding period, and divide by the annual yield factor for
Cheddar cheese, 9.87, to determine the quantity (in hundredweights) of
milk used in the production of American cheese.
(e) Compute a weighted average of the changes in gross values per
hundredweight of milk determined pursuant to paragraph (c) of this
section in accordance with the relative proportions of milk determined
pursuant to paragraph (d) of this section.
Sec. 1007.52 Plant location adjustments for handlers.
(a) For milk received at a plant from producers or a handler
described in Sec. 1007.9(c) and which is classified as Class I milk
without movement in bulk form to a pool distributing plant at which a
higher Class I price applies, the price specified in Sec. 1007.50(a)
shall be adjusted by the amount stated in paragraphs (a) (1) through
(6) of this section for the location of such plant:
(1) For a plant located within one of the zones set forth in
Sec. 1007.2, the adjustment (cents per hundredweight) shall be as
follows:
Zone 1............................................ Minus 53.
Zone 2............................................ Minus 48.
Zone 3............................................ Minus 38.
Zone 4............................................ Minus 31.
Zone 5............................................ Minus 25.
Zone 6............................................ Minus 10.
Zone 7............................................ No adjustment.
Zone 8............................................ Plus 10.
Zone 9............................................ Plus 20.
Zone 10........................................... Plus 32.
Zone 11........................................... Plus 50.
Zone 12........................................... Plus 57.
(2) For a plant located in that portion of the Tennessee Valley
marketing area that is within the State of Georgia, the adjustment
shall be minus 25 cents.
(3) For a plant located in the Missouri counties of Dunklin or
Pemiscot, the adjustment shall be minus 53 cents.
(4) For a plant located in the Texas counties of Bowie or Cass, the
adjustment shall be zero.
(5) For a plant located within another Federal order marketing
area, other than in those counties specified in paragraphs (a) (2),
(3), and (4) of this section, the adjustment shall be determined by
subtracting the Class I differential price in Zone 7 of this order from
the Class I differential price, adjusted for the plant's location,
under such other Federal order.
(6) For a plant located outside the areas described in paragraphs
(a) (1) through (5) of this section, the adjustment shall be computed
by multiplying 2.5 cents per 10 miles, or fraction thereof (by the
shortest hard-surfaced highway distance as determined by the market
[[Page 29448]] administrator), from the nearer of Shreveport,
Louisiana; Little Rock, Arkansas; Memphis, Tennessee; Jackson,
Tennessee; Nashville, Tennessee; or Atlanta, Georgia, and subtracting
that figure from the location adjustment applicable at Shreveport,
Little Rock, Memphis, Jackson, Nashville, or Atlanta, as the case may
be.
(b) For fluid milk products transferred in bulk form from a pool
plant to a pool distributing plant at which a higher Class I price
applies and which are classified as Class I milk, the Class I price
shall be the Class I price at the transferee-plant subject to a
location adjustment credit for the transferor-plant which shall be
determined by the market administrator for skim milk and butterfat,
respectively, as follows:
(1) Subtract from the pounds of skim milk remaining in Class I at
the transferee-plant after the computations pursuant to
Sec. 1007.44(a)(12) plus the pounds of skim milk in receipts of
concentrated fluid milk products from other pool plants that are
assigned to Class I use, an amount equal to:
(i) The pounds of skim milk in receipts of milk at the transferee-
plant from producers and handlers described in Sec. 1007.9(c); and
(ii) The pounds of skim milk in receipts of packaged fluid milk
products from other pool plants;
(2) Assign any remaining pounds of skim milk in Class I at the
transferee-plant to the skim milk in receipts of fluid milk products
from other pool plants, first to the transferor-plants at which the
highest Class I price applies and then to other plants in sequence
beginning with the plant at which the next highest Class I price
applies;
(3) Compute the total amount of location adjustment credits to be
assigned to transferor-plants by multiplying the hundredweight of skim
milk assigned pursuant to paragraph (b)(2) of this section to each
transferor-plant at which the Class I price is lower than the Class I
price applicable at the transferor-plant and the transferee-plant, and
add the resulting amounts;
(4) Assign the total amount of location adjustment credits computed
pursuant to paragraph (b)(3) of this section to those transferor-plants
that transferred fluid milk products containing skim milk classified as
Class I milk pursuant to Sec. 1007.42(a) and at which the applicable
Class I price is less than the Class I price at the transferee-plant,
in sequence beginning with the plant at which the highest Class I price
applies. Subject to the availability of such credits, the credit
assigned to each plant shall be equal to the hundredweight of such
Class I skim milk multiplied by the adjustment rate determined pursuant
to paragraph (b)(3) of this section for such plant. If the aggregate of
this computation for all plants having the same adjustment as
determined pursuant to paragraph (b)(3) of this section exceeds the
credits that are available to those plants, such credits shall be
prorated to the volume of skim milk in Class I in transfers from such
plants; and
(5) Location adjustment credit for butterfat shall be determined in
accordance with the procedure outlined for skim milk in paragraphs (b)
(1) through (4) of this section.
(c) The market administrator shall determine and publicly announce
the zone location of each plant of each handler. The market
administrator shall notify the handler on or before the first day of
any month in which a change in a plant location zone will apply.
(d) The Class I price applicable to other source milk shall be
adjusted at the rates set forth in paragraph (a) of this section,
except that the adjusted Class I price shall not be less than the Class
III price.
Sec. 1007.53 Announcement of class prices.
The market administrator shall announce publicly on or before the
fifth day of each month the Class I price and Class II prices for the
following month, and the Class III and Class III-A prices for the
preceding month.
Sec. 1007.54 Equivalent price.
If for any reason a price or pricing constituent required by this
part for computing class prices or for other purposes is not available
as prescribed in this part, the market administrator shall use a price
or pricing constituent determined by the Secretary to be equivalent to
the price or pricing constituent that is required.
Uniform Prices
Sec. 1007.60 Handler's value of milk for computing the uniform price.
For the purpose of computing the uniform price, the market
administrator shall determine for each month the value of milk of each
handler with respect to each of the handler's pool plants and of each
handler described in Sec. 1007.9 (b) and (c) with respect to milk that
was not received at a pool plant as follows:
(a) Multiply the pounds of producer milk and milk received from a
handler described in Sec. 1007.9(c) that were classified in each class
pursuant to Secs. 1007.43(a) and 1007.44(c) by the applicable class
prices, and add the resulting amounts;
(b) Add the amounts obtained from multiplying the pounds of overage
subtracted from each class pursuant to Sec. 1007.44(a)(14) and the
corresponding step of Sec. 1007.44(b) by the respective class prices,
as adjusted by the butterfat differential specified in Sec. 1007.74,
that are applicable at the location of the pool plant;
(c) Add the amount obtained from multiplying the difference between
the Class III price for the preceding month and the Class I price
applicable at the location of the pool plant or the Class II price, as
the case may be, for the current month by the hundredweight of skim
milk and butterfat subtracted from Class I and Class II pursuant to
Sec. 1007.44(a)(9) and the corresponding step of Sec. 1007.44(b);
(d) Add the amount obtained from multiplying the difference between
the Class I price applicable at the location of the pool plant and the
Class III price by the hundredweight of skim milk and butterfat
assigned to Class I pursuant to Sec. 1007.43(d) and the hundredweight
of skim milk and butterfat subtracted from Class I pursuant to
Sec. 1007.44(a)(7) (i) through (iv) and the corresponding step of
Sec. 1007.44(b), excluding receipts of bulk fluid cream products from
an other order plant and bulk concentrated fluid milk products from
pool plants, other order plants, and unregulated supply plants;
(e) Add the amount obtained from multiplying the difference between
the Class I price applicable at the location of the transferor-plant
and the Class III price by the hundredweight of skim milk and butterfat
subtracted from Class I pursuant to Sec. 1007.44(a)(7) (v) and (vi) and
the corresponding step of Sec. 1007.44(b);
(f) Add the amount obtained from multiplying the Class I price
applicable at the location of the nearest unregulated supply plants
from which an equivalent volume was received by the pounds of skim milk
and butterfat in receipts of concentrated fluid milk products assigned
to Class I pursuant to Sec. 1007.43(d) and Sec. 1007.44(a)(7)(i) and
the pounds of skim milk and butterfat subtracted from Class I pursuant
to Sec. 1007.44(a)(11) and the corresponding step of Sec. 1007.44(b),
excluding such skim milk and butterfat in receipts of fluid milk
products from an unregulated supply plant to the extent that an
equivalent amount of skim milk or butterfat disposed of to such plant
by handlers fully regulated under any Federal milk order is classified
and priced as Class I milk and is not used as an offset for any other
payment obligation under any order; [[Page 29449]]
(g) Subtract, for reconstituted milk made from receipts of nonfluid
milk products, an amount computed by multiplying $1.00 (but not more
than the difference between the Class I price applicable at the
location of the pool plant and the Class III price) by the
hundredweight of skim milk and butterfat contained in receipts of
nonfluid milk products that are allocated to Class I use pursuant to
Sec. 1007.43(d);
(h) Exclude, for pricing purposes under this section, receipts of
nonfluid milk products that are distributed as labeled reconstituted
milk for which payments are made to the producer-settlement fund of
another order under Sec. 1007.76 (a)(5) or (c); and
(i) For pool plants that transfer bulk concentrated fluid milk
products to other pool plants and other order plants, add or subtract
the amount per hundredweight of any class price change from the
previous month that results from any inventory reclassification of bulk
concentrated fluid milk products that occurs at the transferee plant.
Any such applicable class price change shall be applied to the plant
that used the concentrated milk in the event that the concentrated
fluid milk products were made from bulk unconcentrated fluid milk
products received at the plant during the prior month.
Sec. 1007.61 Computation of uniform price (including weighted average
price and uniform prices for base and excess milk).
(a) The market administrator shall compute the weighted average
price for each month and the uniform price for each month of June
through January per hundredweight of milk of 3.5 percent butterfat
content as follows:
(1) Combine into one total the values computed pursuant to
Sec. 1007.60 for all handlers who filed the reports prescribed in
Sec. 1007.30 for the month and who made payments pursuant to
Sec. 1007.71 for the preceding month;
(2) Add not less than one-half the unobligated balance in the
producer-settlement fund;
(3) Add an amount equal to the total value of the minus adjustments
and subtract an amount equal to the total value of the plus adjustments
computed pursuant to Sec. 1007.75;
(4) Divide the resulting amount by the sum of the following for all
handlers included in these computations;
(i) The total hundredweight of producer milk; and
(ii) The total hundredweight for which a value is computed pursuant
to Sec. 1007.60(f); and
(5) Subtract not less than 4 cents nor more than 5 cents per
hundredweight. The resulting figure, rounded to the nearest cent, shall
be the weighted average price for each month and the uniform price for
the months of June through January.
(b) For each month of February through May, the market
administrator shall compute the uniform prices per hundredweight for
base milk and for excess milk, each of 3.5 percent butterfat content,
as follows:
(1) Compute the total value of excess milk for all handlers
included in the computations pursuant to paragraph (a)(1) of this
section as follows:
(i) Multiply the hundredweight quantity of excess milk that does
not exceed the total quantity of such handlers' producer milk assigned
to Class III-A by the Class III-A price:
(ii) Multiply the remaining hundredweight quantity of excess milk
that does not exceed the total quantity of such handlers' producer milk
assigned to Class III by the Class III price:
(iii) Multiply the remaining hundredweight quantity of excess milk
that does not exceed the total quantity of such handlers' producer milk
assigned to Class II by the Class II price:
(iv) Multiply the remaining hundredweight quantity of excess milk
by the Class I price; and
(v) Add together the resulting amounts;
(2) Divide the total value of excess milk obtained in paragraph
(b)(1) of this section by the total hundredweight of such milk and
adjust to the nearest cent. The resulting figure shall be the uniform
price for excess milk;
(3) From the amount resulting from the computations pursuant to
paragraphs (a)(1) through (a)(3) of this section subtract an amount
computed by multiplying the hundredweight of milk specified in
paragraph (a)(4)(ii) of this section by the weighted average price;
(4) Subtract the total value of excess milk determined by
multiplying the uniform price obtained in paragraph (b)(2) of this
section times the hundredweight of excess milk from the amount computed
pursuant to paragraph (b)(3) of this section;
(5) Divide the amount calculated pursuant to paragraph (b)(4) of
this section by the total hundredweight of base milk included in these
computations; and
(6) Subtract not less than 4 cents nor more than 5 cents from the
price computed pursuant to paragraph (b)(5) of this section. The
resulting figure, rounded to the nearest cent, shall be the uniform
price for base milk.
Sec. 1007.62 Announcement of uniform price and butterfat differential.
The market administrator shall announce publicly on or before:
(a) The fifth day after the end of each month the butterfat
differential for such month; and
(b) The 11th day after the end of the month the applicable uniform
price(s) pursuant to Sec. 1007.61 for such month.
Payments for Milk
Sec. 1007.70 Producer-settlement fund.
The market administrator shall establish and maintain a separate
fund known as the producer-settlement fund into which the market
administrator shall deposit all payments made by handlers pursuant to
Secs. 1007.71, 1007.76, and 1007.77, and out of which the market
administrator shall make all payments pursuant to Secs. 1007.72 and
1007.77. Payments due any handler shall be offset by any payments due
from such handler.
Sec. 1007.71 Payments to the producer-settlement fund.
(a) On or before the 12th day after the end of the month, each
handler shall pay to the market administrator the amount, if any, by
which the amount specified in paragraph (a)(1) of this section exceeds
the amount specified in paragraph (a)(2) of this section:
(1) The total value of milk of the handler for such month as
determined pursuant to Sec. 1007.60.
(2) The sum of:
(i) The value at the uniform price(s) as adjusted pursuant to
Sec. 1007.75, of such handler's receipts of producer milk and milk
received from handlers pursuant to Sec. 1007.9(c); and
(ii) The value at the weighted average price applicable at the
location of the plant from which received of other source milk for
which a value is computed pursuant to Sec. 1007.60(f).
(b) On or before the 25th day after the end of the month each
person who operated an other order plant that was regulated during such
month under an order providing for individual-handler pooling shall pay
to the market administrator an amount computed as follows:
(1) Determine the quantity of reconstituted skim milk in filled
milk in route disposition from such plant in the marketing area which
was allocated to Class I at such plant. If there is route disposition
from such plant in marketing areas regulated by two or more marketwide
pool orders, the reconstituted skim milk allocated to Class I shall be
prorated to each order according to such route disposition in each
marketing area; and [[Page 29450]]
(2) Compute the value of the reconstituted skim milk assigned in
paragraph (b)(1) of this section to route disposition in this marketing
area by the difference between the Class I price under this part
applicable at the location of the other order plant (but not to be less
than the Class III price) and the Class III price.
Sec. 1007.72 Payments from the producer-settlement fund.
On or before the 13th day after the end of each month, the market
administrator shall pay to each handler the amount, if any, by which
the amount computed pursuant to Sec. 1007.71(a)(2) exceeds the amount
computed pursuant to Sec. 1007.71(a)(1). If, at such time, the balance
in the producer-settlement fund is insufficient to make all payments
pursuant to this section, the market administrator shall reduce
uniformly such payments and shall complete such payments as soon as the
funds are available.
Sec. 1007.73 Payments to producers and to cooperative associations.
(a) Each handler shall pay each producer for producer milk for
which payment is not made to a cooperative association pursuant to
paragraph (b) of this section, as follows:
(1) On or before the 26th day of each month, for milk received
during the first 15 days of the month from such producer who has not
discontinued delivery of milk to such handler before the 23rd day of
the month at not less than the Class III price for the preceding month
or 90 percent of the weighted average price for the preceding month,
whichever is higher, less proper deductions authorized in writing by
the producer. If the producer had discontinued shipping milk to such
handler before the 25th day of any month, or if the producer had no
established base upon which to receive payments during the base paying
months of February through May, the applicable rate for making payments
to such producer shall be the Class III price for the preceding month;
and
(2) On or before the 15th day of the following month, an amount
equal to not less than the uniform price(s), as adjusted pursuant to
Secs. 1007.74 and 1007.75, multiplied by the hundredweight of milk or
base milk and excess milk received from such producer during the month,
subject to the following adjustments:
(i) Less payments made to such producer pursuant to paragraph
(a)(1) of this section;
(ii) Less deductions for marketing services made pursuant to
Sec. 1007.86;
(iii) Plus or minus adjustments for errors made in previous
payments made to such producers; and
(iv) Less proper deductions authorized in writing by such producer.
(3) If a handler has not received full payment from the market
administrator pursuant to Sec. 1007.72 by the 15th day of such month,
such handler may reduce payments pursuant to this paragraph to
producers on a pro rata basis but not by more than the amount of the
underpayment. Such payments shall be completed thereafter not later
than the date for making payments pursuant to this paragraph next
following after receipt of the balance due from the market
administrator.
(b) On or before the day prior to the dates specified in paragraph
(a) (1) and (2) of this section, each handler shall make payment to the
cooperative association for milk from producers who market their milk
through the cooperative association and who have authorized the
cooperative to collect such payments on their behalf an amount equal to
the sum of the individual payments otherwise payable for such producer
milk pursuant to paragraph (a) (1) and (2) of this section.
(c) If a handler has not received full payment from the market
administrator pursuant to Sec. 1007.72 by the 15th day of such month,
such handler may reduce payments pursuant to paragraph (b) of this
section to such cooperative association on a pro rata basis, prorating
such underpayment to the volume of milk received from such cooperative
association in proportion to the total milk received from producers by
the handler, but not by more than the amount of the underpayment. Such
payments shall be completed in the following manner:
(1) If the handler receives full payment from the market
administrator by the 15th day of the month, the handler shall make
payment to the cooperative association of the full value of the
underpayment on the 15th day of the month;
(2) If the handler has not received full payment from the market
administrator by the 15th day of the month, the handler shall make
payment to the cooperative association of the full value of the
underpayment on or before the date for making such payments pursuant to
this paragraph next following after receipt of the balance due from the
market administrator.
(d) Each handler pursuant to Sec. 1007.9(a) who receives milk from
a cooperative association as a handler pursuant to Sec. 1007.9(c),
including the milk of producers who are not members of such
association, and who the market administrator determines have
authorized such cooperative association to collect payment for their
milk, shall pay such cooperative for such milk as follows:
(1) On or before the 25th day of the month for milk received during
the first 15 days of the month, not less than the Class III price for
the preceding month or 90 percent of the weighted average price for the
preceding month, whichever is higher; and
(2) On or before the 14th day of the following month, not less than
the appropriate uniform price(s) as adjusted pursuant to Secs. 1007.74
and 1007.75, and less any payments made pursuant to paragraph (d)(1) of
this section.
(e) If a handler has not received full payment from the market
administrator pursuant to Sec. 1007.72 by the 14th day of such month,
such handler may reduce payments pursuant to paragraph (d) of this
section to such cooperative association and complete such payments for
milk received from such cooperative association in its capacity as a
handler pursuant to Sec. 1007.9(c), in the manner prescribed in
paragraph (c) (1) and (2) of this section.
(f) In making payments to producers pursuant to this section, each
handler shall furnish each producer, except a producer whose milk was
received from a handler described in Sec. 1007.9(c), a supporting
statement in such form that it may be retained by the recipient which
shall show:
(1) The month and identity of the producer;
(2) The daily and total pounds and the average butterfat content of
producer milk;
(3) For the months of February through May the total pounds of base
milk received from such producer;
(4) The minimum rate(s) at which payment to the producer is
required pursuant to this order;
(5) The rate(s) used in making the payment if such rate(s) is (are)
other than the applicable minimum rate(s);
(6) The amount, or rate per hundredweight, and nature of each
deduction claimed by the handler; and
(7) The net amount of payment to such producer or cooperative
association.
Sec. 1007.74 Butterfat differential.
For milk containing more or less than 3.5 percent butterfat, the
uniform prices for base and excess milk shall be increased or
decreased, respectively, for each one-tenth percent butterfat variation
from 3.5 percent by a butterfat differential, rounded to the nearest
one-tenth cent, which shall be 0.138 times the current month's butter
price less [[Page 29451]] 0.0028 times the preceding month's average
pay price per hundredweight, at test, for manufacturing grade milk, in
Minnesota and Wisconsin, using the ``base month'' series, adjusted
pursuant to Sec. 1007.51(a) through (e), as reported by the Department.
The butter price means the simple average for the month of the Chicago
Mercantile Exchange, Grade A butter price as reported by the
Department.
Sec. 1007.75 Plant location adjustments for producers and on nonpool
milk.
(a) The uniform price and the uniform price for base milk shall be
adjusted according to the location of the plant at which the milk was
physically received at the rates set forth in Sec. 1007.52(a); and
(b) The weighted average price applicable to other source milk
shall be adjusted at the rates set forth in section Sec. 1007.52(a)
applicable at the location of the nonpool plant from which the milk was
received, except that the adjusted weighted average price shall not be
less than the Class III price.
Sec. 1007.76 Payments by a handler operating a partially regulated
distributing plant.
Each handler who operates a partially regulated distributing plant
shall pay on or before the 25th day after the end of the month to the
market administrator for the producer-settlement fund the amount
computed pursuant to paragraph (a) of this section. If the handler
submits pursuant to Secs. 1007.30(b) and 1007.31(b) the information
necessary for making the computations, such handler may elect to pay in
lieu of such payment the amount computed pursuant to paragraph (b) of
this section:
(a) The payment under this paragraph shall be an amount resulting
from the following computations:
(1) Determine the pounds of route disposition in the marketing area
from the partially regulated distributing plant;
(2) Subtract the pounds of fluid milk products received at the
partially regulated distributing plant:
(i) As Class I milk from pool plants and other order plants, except
that subtracted under a similar provision of another Federal milk
order; and
(ii) From another nonpool plant that is not an other order plant to
the extent that an equivalent amount of fluid milk products disposed of
to such nonpool plant by handlers fully regulated under any Federal
milk order is classified and priced as Class I milk and is not used as
an offset for any payment obligation under any order;
(3) Subtract the pounds of reconstituted milk that are made from
nonfluid milk products and which are then disposed of as route
disposition in the marketing area from the partially regulated
distributing plant;
(4) Multiply the remaining pounds by the difference between the
Class I price and the weighted average price, both prices to be
applicable at the location of the partially regulated distributing
plant (except that the Class I price and weighted average price shall
not be less than the Class III price); and
(5) Add the amount obtained from multiplying the pounds of labeled
reconstituted milk included in paragraph (a)(3) of this section by the
difference between the Class I price applicable at the location of the
partially regulated distributing plant less $1.00 (but not to be less
than the Class III price) and the Class III price. For any
reconstituted milk that is not so labeled, the Class I price shall not
be reduced by $1.00. Alternatively, for such disposition, payments may
be made to the producer-settlement fund of the order regulating the
producer milk used to produce the nonfluid milk ingredients at the
difference between the Class I price applicable under the other order
at the location of the plant where the nonfluid milk ingredients were
processed (but not to be less than the Class III price) and the Class
III price. This payment option shall apply only if a majority of the
total milk received at the plant that processed the nonfluid milk
ingredients is regulated under one or more Federal orders and payment
may only be made to the producer-settlement fund of the order pricing a
plurality of the milk used to produce the nonfluid milk ingredients.
This payment option shall not apply if the source of the nonfluid
ingredients used in reconstituted fluid milk products cannot be
determined by the market administrator.
(b) The payment under this paragraph shall be the amount resulting
from the following computations:
(1) Determine the value that would have been computed pursuant to
Sec. 1007.60 for the partially regulated distributing plant if the
plant had been a pool plant, subject to the following modifications:
(i) Fluid milk products and bulk fluid cream products received at
the partially regulated distributing plant from a pool plant or an
other order plant shall be allocated at the partially regulated
distributing plant to the same class in which such products were
classified at the fully regulated plant;
(ii) Fluid milk products and bulk fluid cream products transferred
from the partially regulated distributing plant to a pool plant or an
other order plant shall be classified at the partially regulated
distributing plant in the class to which allocated at the fully
regulated plant. Such transfers shall be computed to the extent
possible to those receipts at the partially regulated distributing
plant from pool plants and other order plants that are classified in
the corresponding class pursuant to paragraph (b)(1)(i) of this
section. Any such transfers remaining after the above allocation which
are in Class I and for which a value is computed for the handler
operating the partially regulated distributing plant pursuant to
Sec. 1007.60 shall be priced at the uniform price (or at the weighted
average price if such is provided) of the respective order regulating
the handling of milk at the transferee plant, with such uniform price
adjusted to the location of the nonpool plant (but not to be less than
the lowest class price of the respective order), except that transfers
of reconstituted skim milk in filled milk shall be priced at the lowest
price class of the respective order; and
(iii) If the operator of the partially regulated distributing plant
so requests, the value of milk determined pursuant to Sec. 1007.60 for
such handler shall include, in lieu of the value of other source milk
specified in Sec. 1007.60(f) less the value of such other source milk
specified in Sec. 1007.71(a)(2)(ii), a value of milk determined
pursuant to Sec. 1007.60 for each nonpool plant that is not an other
order plant which serves as a supply plant for such partially regulated
distributing plant by making shipments to the partially regulated
distributed plant during the month equivalent to the requirements of
Sec. 1007.7(b), subject to the following conditions:
(A) The operator of the partially regulated distributing plant
submits with its reports filed pursuant to Secs. 1007.30(b) and
1007.31(b) similar reports for each such nonpool supply plant;
(B) The operator of such nonpool plant maintains books and records
showing the utilization of all skim milk and butterfat received at such
plant which are made available if requested by the market administrator
for verification purposes; and
(C) The value of milk determined pursuant to Sec. 1007.60 for such
nonpool supply plant shall be determined in the same manner prescribed
for computing the obligation of such partially regulated distributing
plant; and
(2) From the partially regulated distributing plant's value of milk
computed pursuant to paragraph (b)(1) of this section,
subtract: [[Page 29452]]
(i) The gross payments by the operator of the partially regulated
distributing plant, adjusted to a 3.5 percent butterfat basis by the
butterfat differential specified in Sec. 1007.74, for milk received at
the plant during the month that would have been producer milk had the
plant been fully regulated;
(ii) If paragraph (b)(1)(iii) of this section applies, the gross
payments by the operator of such nonpool supply plant, adjusted to a
3.5 percent butterfat basis by the butterfat differential specified in
Sec. 1007.74, for milk received at the plant during the month that
would have been producer milk if the plant had been fully regulated;
and
(iii) The payments by the operator of the partially regulated
distributing plant to the producer-settlement fund of another order
under which such plant is also a partially regulated distributing plant
and like payments by the operator of the nonpool supply plant if
paragraph (b)(1)(iii) of this section applies.
(c) Any handler may elect partially regulated distributing plant
status for any plant with respect to receipts of nonfluid milk
ingredients assigned to Class I use under Sec. 1007.43(d). Payments may
be made to the producer-settlement fund of the order regulating the
producer milk used to produce the nonfluid milk ingredients at the
difference between the Class I price applicable under the other order
at the location of the plant where the nonfluid milk ingredients were
processed (but not less than the Class III price) and the Class III
price. This payment option shall apply only if a majority of the total
milk received at the plant that processed the nonfluid milk ingredients
is regulated under one or more Federal orders and payment may only be
made to the producer-settlement fund of the order pricing a plurality
of the milk used to produce the nonfluid milk ingredients. This payment
option shall not apply if the source of the nonfluid ingredients used
in reconstituted fluid milk products cannot be determined by the market
administrator.
Sec. 1007.77 Adjustment of accounts.
Whenever audit by the market administrator of any handler's
reports, books, records, or accounts, or other verification discloses
errors resulting in money due the market administrator from a handler,
or due a handler from the market administrator, or due a producer or
cooperative association from a handler, the market administrator shall
promptly notify such handler of any amount so due and payment thereof
shall be made on or before the next date for making payments as set
forth in the provisions under which the error(s) occurred.
Sec. 1007.78 Charges on overdue accounts.
Any unpaid obligation due the market administrator from a handler
pursuant to Secs. 1007.71, 1007.76, 1007.77, 1007.78, 1007.85, and
1007.86 shall be increased 1.5 percent each month beginning with the
day following the date such obligation was due under the order. Any
remaining amount due shall be increased at the same rate on the
corresponding day of each month until paid. The amounts payable
pursuant to this section shall be computed monthly on each unpaid
obligation and shall include any unpaid charges previously made
pursuant to this section. The late charges shall be added to the
respective accounts to which due. For the purpose of this section, any
obligation that was determined at a date later than prescribed by the
order because of a handler's failure to submit a report to the market
administrator when due shall be considered to have been payable by the
date it would have been due if the report had been filed when due.
Administrative Assessment and Marketing Service Deduction
Sec. 1007.85 Assessment for order administration.
As each handler's pro rata share of the expense of administration
of the order, each handler shall pay to the market administrator on or
before the 15th day after the end of the month 5 cents per
hundredweight or such lesser amount as the Secretary may prescribe with
respect to:
(a) Receipts of producer milk (including such handler's own
production) other than such receipts by a handler described in
Sec. 1007.9(c) that were delivered to pool plants of other handlers;
(b) Receipts from a handler described in Sec. 1007.9(c);
(c) Receipts of concentrated fluid milk products from unregulated
supply plants and receipts of nonfluid milk products assigned to Class
I use pursuant to Sec. 1007.43(d) and other source milk allocated to
Class I pursuant to Sec. 1007.44(a) (7) and (11) and the corresponding
steps of Sec. 1007.44(b), except such other source milk that is
excluded from the computations pursuant to Sec. 1007.60 (d) and (f);
and
(d) Route disposition in the marketing area from a partially
regulated distributing plant that exceeds the skim milk and butterfat
subtracted pursuant to Sec. 1007.76(a)(2).
Sec. 1007.86 Deduction for marketing services.
(a) Except as provided in paragraph (b) of this section each
handler, in making payments to producers for milk (other than milk of
such handler's own production) pursuant to Sec. 1007.73, shall deduct 7
cents per hundredweight or such lesser amount as the Secretary may
prescribe and shall pay such deductions to the market administrator not
later than the 15th day after the month. Such money shall be used by
the market administrator to verify or establish weights, samples and
tests of producer milk and provide market information for producers who
are not receiving such services from a cooperative association. Such
services shall be performed in whole or in part by the market
administrator or an agent engaged by and responsible to the market
administrator;
(b) In the case of producers for whom a cooperative association
that the Secretary has determined is actually performing the services
set forth in paragraph (a) of this section, each handler shall make, in
lieu of the deduction specified in paragraph (a) of this section, such
deductions from the payments to be made to such producers as may be
authorized by the membership agreement or marketing contract between
such cooperative association and such producers, and on or before the
15th day after the end of the month, pay such deductions to the
cooperative association rendering such services accompanied by a
statement showing the amount of any such deductions and the amount of
milk for which such deduction was computed for each producer.
Base-Excess Plan
Sec. 1007.90 Base milk.
Base milk means the producer milk of a producer in each month of
February through May that is not in excess of the producer's base
multiplied by the number of days in the month.
Sec. 1007.91 Excess milk.
Excess milk means the producer milk of a producer in each month of
February through May in excess of the producer's base milk for the
month, and shall include all the producer milk in such months of a
producer who has no base.
Sec. 1007.92 Computation of base for each producer.
(a) Subject to paragraph (c) of this section, a base for each dairy
farmer who was a producer pursuant to Sec. 1007.12 during one or more
of the immediately preceding months of July through December shall be
determined [[Page 29453]] by dividing the total pounds of producer milk
delivered by such producer during each of those months by the number of
calendar days in the month, adding together the four highest monthly
averages so computed, and dividing by four. If a producer operated more
than one farm at the same time, a separate computation of base shall be
made for each such farm.
(b) Any producer who delivered milk to a nonpool plant that became
a pool plant after the beginning of the July-December base-forming
period shall be assigned a base calculated as if the plant were a pool
plant during such entire base-forming period. A base thus assigned
shall not be transferable.
(c) A person who was unable to qualify as a producer during four or
more of the immediately preceding months of July through December or
who did not have at least four complete months of production, in either
case for one or more of the reasons specified in this paragraph, may
request a base computation based upon a lesser number of months by
submitting to the market administrator in writing on or before February
1 a statement that establishes to the satisfaction of the market
administrator that during four or more of the months in the immediately
preceding July through December base-forming period the amount of milk
produced on such producer's farm was substantially reduced because of
conditions beyond the control of such person as a result of:
(1) The loss by fire, windstorm, or other natural disaster of a
farm building used in the production of milk on the producer's farm;
(2) Brucellosis, bovine tuberculosis or other infectious diseases
in the producer's milking herd as certified by a licensed veterinarian;
or
(3) A quarantine by a Federal or State authority that prevented the
dairy farmer from supplying milk from the farm of such producer to a
plant.
Sec. 1007.93 Base rules.
(a) Except as provided in Sec. 1007.92 (b) and (c) and paragraph
(b) of this section, a base may be transferred in its entirety or in
amounts of not less than 300 pounds effective on the first day of the
month following the date on which such application is received by the
market administrator. Base may be transferred only to a person who is
or will be a producer by the end of the month that the transfer is to
be effective. A base transfer to be effective on February 1 for the
month of February must be received on or before February 15. Such
application shall be on a form approved by the market administrator and
signed by the baseholder or the legal representative of the
baseholder's estate. If a base is held jointly, the application shall
be signed by all joint holders or the legal representative of the
estate of any deceased baseholder.
(b) A producer who transferred base on or after February 1 may not
receive by transfer additional base that would be applicable during
February through May of the same year. A producer who received base by
transfer on or after February 1 may not transfer a portion of the base
to be applicable during February through May of the same year, but may
transfer the entire base.
(c) The base established by a partnership may be divided between
the partners on any basis agreed to in writing by them if written
notification of the agreed upon division of base by each partner is
received by the market administrator prior to the first day of the
month in which such division is to be effective.
(d) Two or more producers in a partnership may combine their
separately established bases by giving notice to the market
administrator prior to the first day of the month in which such
combination of bases is to be effective.
Sec. 1007.94 Announcement of established bases.
On or before January 31 of each year, the market administrator
shall calculate a base for each person who was a producer during one or
more of the preceding months of July through December and shall notify
each producer and the handler receiving milk from such dairy farmer of
the base established by the producer. If requested by a cooperative
association, the market administrator shall notify the cooperative
association of each producer-member's base.
PARTS 1093, 1094, 1096, AND 1108 [REMOVED AND RESERVED]
2. Parts 1093, 1094, 1096, and 1108 are removed and reserved.
Dated: May 23, 1995.
Patricia Jensen,
Acting Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 95-13160 Filed 6-1-95; 8:45 am]
BILLING CODE 3410-02-P