[Federal Register Volume 59, Number 30 (Monday, February 14, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-3323] [[Page Unknown]] [Federal Register: February 14, 1994] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE 7 CFR Part 1007 [DA-94-04] Milk in the Georgia Marketing Area; Suspension of Certain Provisions of the Order AGENCY: Agricultural Marketing Service, USDA. ACTION: Suspension of rule. ----------------------------------------------------------------------- SUMMARY: This document suspends for the months of July and August 1994 provisions of the Georgia Federal milk marketing order that provide for payments to producers on the basis of a base and excess payment plan. EFFECTIVE DATE: July 1, 1994, through August 31, 1994. FOR FURTHER INFORMATION CONTACT: Nicholas Memoli, Marketing Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, room 2968, South Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1932. SUPPLEMENTARY INFORMATION: Prior document in this proceeding: Notice of Proposed Suspension: Issued December 7, 1993; published December 13, 1993 (58 FR 65135). 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 action will not have a significant economic impact on a substantial number of small entities. This action will encourage milk production during the months of July and August, which are months of declining milk production. The Department is issuing this rule in conformance with Executive Order 12866. This final rule also has been reviewed under Executive Order 12778, Civil Justice Reform. This rule is not intended to have a retroactive effect. This rule does 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 request 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 date of the entry of the ruling. This order of suspension is issued pursuant to the provisions of the Agricultural Marketing Agreement Act and the rules of practice and procedure governing the formulation of marketing agreements and marketing orders (7 CFR part 900). Notice of proposed rulemaking was published in the Federal Register on December 13, 1993 (58 FR 65135), concerning a proposed suspension of certain provisions of the order. Interested persons were afforded opportunity to file written data, views, and arguments thereon. Three comment letters were received in response to the proposed suspension. After consideration of all relevant material, including the proposal in the notice, the comments received, and other available information, it is hereby found and determined that for the months of July and August 1994 the following provisions of the order do not tend to effectuate the declared policy of the Act: 1. In Sec. 1007.32, paragraph (a). 2. In Sec. 1007.61(a), the words ``of September through January''. 3. In Sec. 1007.61, paragraph (b). Statement of Consideration This suspension removes the requirement that producers be paid on the basis of the base and excess plan for the months of July and August 1994. The proposal was submitted by Carolina/Virginia Milk Producers Association, Inc., Dairymen, Inc., and Southern Milk Sales, Inc. These cooperative associations have a substantial amount of milk pooled on the Georgia milk market. In support of their proposal, the cooperative associations state that the suspension is needed because in recent years milk in this area has been in short supply during July and August. Without the suspension, the cooperatives contend the market's base and excess plan would discourage production in those months. They further state that it is necessary to take this action well before the proposed suspension takes effect to address the desire of individual dairy farmers to have knowledge of the base payment period prior to any base purchases. Several producers in Georgia filed comments in opposition to the proposed suspension. The producers state that the proposed suspension would force them to be paid on the blend price which would reduce the price they receive for their milk. Under the order's base and excess plan, producers establish ``base'' on the basis of their production during the months of September through January and are paid on the basis of their ``base'' and ``excess'' milk during the following months of February through August. The plan was suspended during August 1993, the most recent base-paying month. With the suspension of the base and excess payment plan in July and August, producers would be paid a blend price for all of their milk during those months. In July 1993, the last month the base and excess payment plan was operative, there was a 24-cent difference between the blend price and the base price. The difference between the blend price and the excess price however, was $3.96. Thus, while it is true that, without the plan, producers would receive somewhat less for their base milk, this difference is far less than the $3.96 difference between the blend price and the excess price, which is a major impediment to keeping milk that is in excess of base milk on the market. It is also a major obstacle to fluid milk handlers in attracting supplemental milk supplies on a direct-shipped basis from producers in nearby markets. Under the plan, such producers would be only entitled to the excess price for all of their milk shipped to the market because they had not earned base in the Georgia market. During the past two years, the Class I utilization of producer milk tightened markedly during the months of July and August. For example, the Class I utilization in 1992 increased from 74.9 percent in June to 75.5 percent in July and to 79.7 percent in August. In 1993, the Class I utilization similarly increased from 77.6 percent in June to 89.7 percent in July and to 84.4 percent in August. These figures indicate that the market is extremely tight during the months of July and August and that there is merit to the request to remove any disincentive producers may have to increasing production or shipping supplemental milk to the market. The suspension will increase the amount of milk available for fluid use in the Georgia market. It will allow fluid milk handlers to attract supplemental milk supplies from producers in nearby markets. Additionally, producers with excess milk will not be encouraged to shift off the market in July and August and thereby detract from the basic function of the order in assuring an adequate supply of milk. The benefits of having an adequate supply of milk available to meet fluid needs outweigh the benefits which would accrue to producers who would receive higher prices. Accordingly, the proposal to suspend the base and excess payment plan during July and August 1994 is adopted. List of Subjects in 7 CFR Part 1007 Milk marketing orders. For the reasons set forth in the preamble, title 7, part 1007, is amended as follows effective July 1, 1994 through August 31, 1994: PART 1007--MILK IN THE GEORGIA MARKETING AREA 1. The authority citation for 7 CFR Part 1007 continues to read as follows: Authority: Secs. 1-19, 48 Stat. 31, as amended; 7 U.S.C. 601- 674. Sec. 1007.32 [Temporarily suspended in part] 2. In Sec. 1007.32, paragraph (a) is suspended. Sec. 1007.61 [Temporarily suspended in part] 3. In Sec. 1007.61(a), the words ``of September through January'' are suspended. 4. In Sec. 1007.61, paragraph (b) is suspended. Dated: February 2, 1994. Patricia Jensen, Acting Assistant Secretary, Marketing and Inspection Services. [FR Doc. 94-3323 Filed 2-11-94; 8:45 am] BILLING CODE 3410-02-P