[Federal Register Volume 60, Number 22 (Thursday, February 2, 1995)]
[Rules and Regulations]
[Pages 6395-6397]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2587]
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[[Page 6396]]
DEPARTMENT OF AGRICULTURE
7 CFR Part 1011
[DA-95-02]
Milk in the Tennessee Valley Marketing Area; Temporary Revision
of Certain Provisions of the Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Revision of rule.
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SUMMARY: This document reduces the supply plant shipping requirement of
the Tennessee Valley Federal milk order (Order 11) for the months of
March through July 1995. The proposed action was requested by Armour
Food Ingredients Company (Armour), which operates a proprietary supply
plant pooled under Order 11. Armour contends the action is necessary to
prevent the uneconomical movement of milk and to ensure that producer
milk associated with the market in the fall will continue to be pooled
in the spring and summer months.
EFFECTIVE DATE: March 1, 1995, through July 31, 1995.
FOR FURTHER INFORMATION CONTACT: Nicholas Memoli, Marketing Specialist,
USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South
Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1932.
SUPPLEMENTARY INFORMATION: 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. This rule lessens the regulatory impact of the order on
certain milk handlers and tends to ensure that dairy farmers will
continue to have their milk priced under the order and thereby receive
the benefits that accrue from such pricing.
The Department is issuing this final rule in conformance with
Executive Order 12866.
This final rule has been reviewed under Executive Order 12778,
Civil Justice Reform. This rule is not intended to have a retroactive
effect. This rule 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 provisions of the
order, or any obligation imposed in connection with the order is not in
accordance with law and request a modification of the 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 date of the entry of the ruling.
This temporary revision is issued pursuant to the provisions of the
Agricultural Marketing Agreement Act and the provisions of
Sec. 1011.7(b) of the Tennessee Valley order.
Notice of proposed rulemaking was issued on November 1, 1994, and
published in the Federal Register on November 7, 1994 (59 FR 55377),
concerning a proposed relaxation of the supply plant shipping
requirement. The public was afforded the opportunity to comment on the
proposed notice by submitting written data, views and arguments by
December 7, 1994. One comment letter was received.
Statement of Consideration
The temporary revision reduces the supply plant shipping
requirement from 40 to 30 percent for the period of March through July
1995. The Tennessee Valley order requires that a supply plant ship a
minimum of 60 percent of the total quantity of milk physically received
at the supply plant during the months of August through November,
January, and February, and 40 percent in each of the other months. The
order also provides authority for the Director of the Dairy Division to
increase or decrease this supply plant shipping requirement by up to 10
percentage points if such a revision is necessary to obtain needed
shipments of milk or to prevent uneconomic shipments.
Armour Food Ingredients states that it would have to make
uneconomical shipments of milk from its Springfield, Kentucky, supply
plant to meet the 40 percent shipping standard required for pool status
under Order 11 during the months of March through July. Additionally,
it states that the 40 percent requirement could jeopardize the
continued association of producers who have supplied the Order 11
market in the fall.
At a hearing held in Charlotte, North Carolina, on January 4, 1995,
Armour proposed an amendment to the Tennessee Valley order that would
provide automatic pooling status for a supply plant during the months
of March through July if the plant met the order's shipping
requirements during the preceding months of August through February.
There was no opposition to this proposal at the hearing.
Purity Dairies, Inc., a Nashville, Tennessee, handler that is
regulated under the Georgia order (Order 7), filed a comment opposing
the proposed revision. Purity states that it cannot procure milk from
its traditional supply area in central Kentucky in competition with
Armour and other Order 11 handlers because its blend price in Nashville
is no longer competitive with the Order 11 blend price. It states that
Armour is attracting more milk than is needed and that ``this practice
of hoarding milk supplies should not be tolerated.''
There was no testimony on the record of the recently-concluded
hearing to suggest that Armour is hoarding milk supplies. None of the
plants which receive milk from Armour indicated that Armour was not
shipping enough milk. In fact, the record showed that Armour
consistently exceeded the order's 60- percent shipping requirement and
that during certain short production months Armour shipped in excess of
90 percent of its milk to distributing plants.
While it is true that Purity's blend price under Order 7 and
former1 Order 98 (Nashville, Tennessee) was frequently close to or
below the Order 11 blend price during the period from December 1993
through April 1994, data introduced into the record of the Charlotte
hearing indicate that since July 1994 the Nashville-Springfield price
relationship has returned to a more normal pattern, as shown in Table
1.
Table 1.--Comparison of Blend Prices: January 1992-November 1994,
Nashville, TN (Order 98/7)--Springfield, KY (Order 11)
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Average blend
price at Average blend
Nashville, TN, price at Difference
under order 98/ Springfield, KY,
7\1\ under order 11
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1/92-1/93........ 13.85 13.58 .26
12/93-/94........ 14.22 14.33 -.11
5/94-1/94........ 14.01 13.72 .28
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\1\The Nashville, Tennessee, order was terminated effective July 31,
1993.
If Purity has difficulty in attracting a milk supply, it should
direct its concern
[[Page 6397]]
to the open record for the proposed Southeast marketing area, which
encompasses the Nashville area. Purity's opposition to Armour's request
for a modest reduction in shipping requirements is insufficient basis
for denying the request, particularly in light of the absence of any
opposition to Armour's proposal at the Charlotte hearing for NO
shipping requirements during the months of March through July.
After consideration of all relevant material, including the
proposal set forth in the aforesaid notice, and other available
information, it is hereby found and determined that the supply plant
shipping percentage set forth in Sec. 1011.7(b) should be reduced from
40 to 30 percent for the months of March through July 1995.
List of Subjects in 7 CFR Part 1011
Milk marketing orders.
For the reasons set forth in the preamble, the following provision
in Title 7, Part 1011, is amended as follows:
PART 1011--MILK IN THE TENNESSEE VALLEY MARKETING AREA
1. The authority citation for 7 CFR part 1011 continues to read as
follows:
Authority: Secs. 1-9, 48 Stat. 31, as amended; 7 U.S.C. 601-674.
Sec. 1011.7 [Amended]
2. In Sec. 1011.7(b), the phrase ``40 percent'' is revised to read
``30 percent'' for the period of March 1, 1995, through July 31, 1995.
Dated: January 27, 1995.
Richard M. McKee,
Director, Dairy Division.
[FR Doc. 95-2587 Filed 2-1-95; 8:45 am]
BILLING CODE 3410-02-P