[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]


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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.

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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