[Federal Register Volume 78, Number 80 (Thursday, April 25, 2013)]
[Rules and Regulations]
[Pages 24334-24336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-09819]



Agricultural Marketing Service

7 CFR Part 1000

[Doc. no. AMS-DA-07-0026; AO-14-A77, et al.; DA-07-02]

Milk in the Northeast and Other Marketing Areas; Order Amending 
the Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.


SUMMARY: This final rule permanently adopts changes to the 
manufacturing cost allowances and the butterfat yield factor used in 
Class III and Class IV product-price formulas applicable to all Federal 
milk marketing orders. These amendments were adopted by an interim 
final rule issued on July 25, 2008, that became effective on October 1, 
2008. More than the required number of producers approved the issuance 
of the orders as amended.

DATES: Effective Date: July 1, 2013.

FOR FURTHER INFORMATION CONTACT: William Francis, Director, Order 
Formulation and Enforcement Division, USDA/AMS/Dairy Programs, Order 
Formulation and Enforcement, Stop 0231-Room 2971-S 1400 Independence 
Avenue SW., Washington, DC 20250-0231, (202) 720-7183, email address: 
[email protected].

SUPPLEMENTARY INFORMATION: This final rule finalizes manufacturing 
(make) allowances for cheese, butter, nonfat dry milk (NFDM) and dry 
whey contained in the Class III and Class IV product price formulas 
that were implemented October 1, 2008, on an interim basis. 
Specifically, this decision finalizes the following make allowances: 

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($0.2003 per pound); butter ($0.1715 per pound); NFDM ($0.1678 per 
pound); and dry whey ($0.1991 per pound). In addition, the butterfat 
yield factor in the butterfat price formula continues to be 1.211.
    Accordingly, this final rule adopts proposed amendments detailed in 
the final decision (78 FR 9248).
    This administrative action 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.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have a retroactive 
    The Agricultural Marketing Agreement Act of 1937, as amended (7 
U.S.C. 601-674) (Act), 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 request 
modification or exemption from such order by filing with the Department 
of Agriculture (USDA) 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. A handler is afforded the opportunity 
for a hearing on the petition. After a hearing, USDA 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 
USDA'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.

Regulatory Flexibility Act and Paperwork Reduction Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the Agricultural Marketing Service has considered the economic 
impact of this action on small entities and has certified that this 
rule would not have a significant economic impact on a substantial 
number of small entities. For the purposes of the Regulatory 
Flexibility Act, a dairy farm is considered a small business if it has 
an annual gross revenue of less than $750,000, and a dairy products 
manufacturer is a small business if it has fewer than 500 employees.
    For the purposes of determining which dairy farms are small 
businesses, the $750,000 per year criterion was used to establish a 
marketing guideline of 500,000 pounds per month. Although this 
guideline does not factor in additional monies that may be received by 
dairy producers, it should be an inclusive standard for most small 
dairy farms. For purposes of determining a handler's size, if the plant 
is part of a larger company operating multiple plants that collectively 
exceed the 500-employee limit, the plant will be considered a large 
business even if the local plant has fewer than 500 employees.
    For the month of February 2007, the month the initial public 
hearing was held, the milk of 49,712 dairy farms were pooled on the 
Federal order system. Of the total, 46,729 dairy farms, or 94 percent, 
were considered small businesses. During the same month, 352 plants 
were regulated by or reported their milk receipts to be pooled and 
priced on a Federal order. Of the total, 186 plants, or 53 percent, 
were considered small businesses.
    This decision finalizes the make allowances contained in the 
formulas used to compute component prices and the minimum class prices 
in all Federal milk orders. Specifically, the make allowance for butter 
continues to be $0.1715 per pound (initially increased from $0.1202 per 
pound), the make allowance for cheese continues to be $0.2003 per pound 
(initially increased from $0.1682 per pound), the make allowance for 
NFDM continues to be $0.1678 per pound (initially increased from 
$0.1570 per pound), and the make allowance for dry whey continues to be 
$0.1991 per pound (initially increased from $0.1956 per pound). 
Finally, the butterfat yield factor in the butterfat price formulas 
continues to be 1.211 (initially increased from 1.20).
    These make allowances serve to approximate the average cost of 
producing cheese, butter, NFDM and dry whey for manufacturing plants 
located in Federal milk marketing areas. The established criteria for 
the make allowance changes are applied in an identical fashion to both 
large and small businesses and will not have any different impact on 
those businesses producing manufactured milk products.
    An economic analysis has been performed that discusses impacts of 
the proposed amendments on industry participants including producers 
and manufacturers. It can be found on the AMS Web site at 
www.ams.usda.gov/dairy. Based on that economic analysis we have 
concluded that the proposed amendments will not have a significant 
economic impact on a substantial number of small entities.
    The Agricultural Marketing Service (AMS) is committed to complying 
with the E-Government Act, to promote the use of the Internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services, and for other purposes.
    This final rule does not require additional information collection 
that needs clearance by the Office of Management and Budget (OMB) 
beyond currently approved information collection. The primary sources 
of data used to complete the forms are routinely used in most business 
transactions. Forms require only a minimal amount of information that 
can be supplied without data processing equipment or a trained 
statistical staff. Thus, the information collection and reporting 
burden is relatively small. Requiring the same reports for all handlers 
does not significantly disadvantage any handler that is smaller than 
the industry average.

Prior Documents in This Proceeding

    Notice of Hearing: Issued February 5, 2007; published February 9, 
2007 (72 FR 6179).
    Supplemental Notice of Hearing: Issued February 14, 2007; published 
February 20, 2007 (72 FR 7753).
    Notice to Reconvene Hearing: Issued March 15, 2007; published March 
21, 2007 (72 FR 13219).
    Notice to Reconvene Hearing: Issued May 2, 2007; published May 8, 
2007 (72 FR 25986).
    Tentative Partial Final Decision: Issued June 16, 2008; published 
June 20, 2008 (73 FR 35306).
    Interim Final Rule: Issued July 25, 2008; published July 31, 2008 
(73 FR 44617).
    Delay of Effective Date: Issued August 28, 2008; published 
September 3, 2008 (73 FR 51352).
    Final Decision: Issued February 1, 2013; published February 7, 2013 
(78 FR 9248)

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Northeast and other 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.
    The following findings are hereby made with respect to the 
Northeast and other marketing orders:
    (a) Findings upon the basis of the hearing record.
    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 Northeast and other marketing areas. The 
hearing was held

[[Page 24336]]

pursuant to the provisions of the Agricultural Marketing Agreement Act 
of 1937, as amended (7 U.S.C. 601-674) (Act), 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 said orders as hereby amended, and all of the terms and 
conditions thereof, will tend to effectuate the declared policy of the 
    (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 orders 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 said orders, as hereby amended, regulate 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, a 
marketing agreement upon which a hearing has been held.
    (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, which is marketed within the specified marketing 
areas, to sign a proposed marketing agreement, tends to prevent the 
effectuation of the declared policy of the Act;
    (2) The issuance of this order amending the Northeast and other 
orders is the only practical means pursuant to the declared policy of 
the Act of advancing the interests of producers as defined in the 
orders as hereby amended;
    (3) The issuance of this order amending the Northeast and other 
orders is favored by at least two-thirds of the producers who were 
engaged in the production of milk for sale in the respective marketing 

List of Subjects in 7 CFR Part 1000

    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 Northeast and other marketing areas 
shall be in conformity to and in compliance with the terms and 
conditions of the orders, as amended, and as hereby amended, as 
    The provisions of the order amending the orders contained in the 
interim amendments of the orders issued by the Administrator, 
Agricultural Marketing Service, on July 25, 2008, and published in the 
Federal Register on July 31, 2008, (73 FR 44617), are adopted and shall 
be the terms and provisions of these orders.

    Dated: April 22, 2013.
David R. Shipman,
Administrator, Agricultural Marketing Service.
[FR Doc. 2013-09819 Filed 4-24-13; 8:45 am]