[Federal Register Volume 59, Number 63 (Friday, April 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7830]


[[Page Unknown]]

[Federal Register: April 1, 1994]


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DEPARTMENT OF AGRICULTURE
7 CFR Parts 1124 and 1135

[Docket Nos. AO-368-A21, AO-380-A11; DA-92-07]

 

Milk in the Pacific Northwest and Southwestern Idaho-Eastern 
Oregon Marketing Areas; Order Amending Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule provides for pricing milk on the basis of 
nonfat solids and protein, in addition to butterfat, for the Pacific 
Northwest and Southwestern Idaho-Eastern Oregon marketing orders, 
respectively. In addition, it reduces the supply plant shipping 
percentage for the Pacific Northwest order and modifies the producer-
handler regulation to permit a State institution with outside 
distribution to purchase an average of 1,000 pounds of milk per day 
from pool plants.

EFFECTIVE DATE: May 1, 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: 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.
    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. 
The amendments would promote orderly marketing of milk by producers and 
regulated handlers.
    These proposed amendments have been reviewed under Executive Order 
12278, Civil Justice Reform. This action is not intended to have 
retroactive effect, nor will it preempt any state or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with the rule.
    The Agricultural Marketing Agreement Act of 1937, as amended (7 
U.S.C. 601-674) (the Act), provides that administrative proceedings 
must be exhausted before parties may file suit in court. Under section 
8c(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 July 31, 1992; published August 6, 1992 
(57 FR 34694).
    Recommended Decision: Issued October 7, 1993; published October 15, 
1993 (58 FR 53439).
    Final Decision: Issued February 9, 1994; published February 23, 
1994 (59 FR 8546).

Findings and Determinations

    The following findings and determinations supplement those that 
were made when the Pacific Northwest and Southwestern Idaho-Eastern 
Oregon 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 upon the basis of the hearing record. Pursuant to the 
provisions of the Act, and the applicable rules of practice and 
procedure governing the formulation of marketing agreements and 
marketing orders (7 CFR part 900), 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 Pacific Northwest 
and Southwestern Idaho-Eastern Oregon marketing areas.
    Based on 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 
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 said marketing areas, and 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 are 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 Sec. 8c(9) of the Act) of more than 50 
percent of the milk marketed within each of the aforesaid 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 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; and
    (3) The issuance of the order amending the orders is approved or 
favored by at least two-thirds of the producers who during the 
determined representative period were engaged in the production of milk 
for sale in each of the respective marketing areas.

List of Subjects in 7 CFR Parts 1124 and 1135

    Milk marketing orders.

Order Relative To Handling

    On and after the effective date hereof, the handling of milk in the 
Pacific Northwest and Southwestern Idaho-Eastern Oregon marketing areas 
shall be in conformity to, and in compliance with, the terms and 
conditions of each of the orders, as amended, and as hereby amended, as 
follows:

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

    1. The authority citation for part 1124 is revised to read as 
follows:

    Authority: 7 U.S.C. 601-674.


Sec. 1124.7  [Amended]

    2. In the introductory text of Sec. 1124.7(b), the number ``30'' is 
changed to ``20''.


Sec. 1124.9  [Amended]

    3. In Sec. 1124.9(c), the words ``and nonfat milk solids'' are 
added following the word ``butterfat''.
    4. In Sec. 1124.10, paragraph (c)(2) is revised to read as follows:


Sec. 1124.10  Producer-handler.

* * * * *
    (c) * * *
    (2) The producer-handler handles fluid milk products from sources 
other than the milk production facilities and resources specified in 
paragraph (b) of this section, except as specified as follows:
    (i) A producer-handler, other than a State institution, may receive 
fluid milk products from pool plants if such receipts do not exceed a 
daily average of 100 pounds during the month; and
    (ii) A State institution that otherwise qualifies as a producer-
handler, but which processes or receives milk for consumption outside 
of a State institution, may receive fluid milk products from pool 
plants if such receipts do not exceed a daily average of 1,000 pounds 
per day during the month.
* * * * *
    5. Section 1124.19 is revised to read as follows:


Sec. 1124.19  Product prices and butterfat differential.

    The prices specified in this section, which are computed by the 
Director of the Dairy Division, Agricultural Marketing Service, shall 
be used, where specified, in calculating the basic formula prices 
pursuant to Sec. 1124.51. The term ``workday'' as used in this section 
shall mean each Monday through Friday that is not a national holiday.
    (a) Butter price means the simple average, for the first 15 days of 
the month, of the daily prices per pound of Grade A (92-score) butter 
on the Chicago Mercantile Exchange, using the price reported each week 
as the price for the day of the report, and for each following workday 
until the next price is reported.
    (b) Cheddar cheese price means the simple average, for the first 15 
days of the month, of the daily prices per pound of cheddar cheese in 
40-pound blocks. The prices used shall be those of the National Cheese 
Exchange (Green Bay, WI), using the price reported each week as the 
price for the day of the report and for each following workday until 
the next price is reported.
    (c) Nonfat dry milk price means the simple average of the prices 
per pound of nonfat dry milk for the first 15 days of the month 
computed as follows:
    (1) The prices used shall be the prices (using the midpoint of any 
price range as one price) of high heat, low heat, and Grade A nonfat 
dry milk, respectively, for the Central States production area;
    (2) For each week, determine the simple average of the prices 
reported for the three types of nonfat dry milk. Such average shall be 
the daily price for the day that such prices are reported and for each 
preceding workday until the day such prices were previously reported; 
and
    (3) Add the prices determined in paragraph (c)(2) of this section 
for the first 15 days of the month and divide by the number of days for 
which there is a daily price.
    (d) Edible whey price means the simple average, for the first 15 
days of the month, of the daily prices per pound of edible whey powder 
(nonhygroscopic). The prices used shall be the prices (using the 
midpoint of any price range as one price) of edible whey powder for the 
Central States production area. The average shall be computed using the 
price reported each week as the daily price for that day and for each 
preceding workday until the day such price was previously reported.
    (e) The butterfat differential is the number that results from 
subtracting the computation in paragraph (e)(2) of this section from 
the computation in paragraph (e)(1) of this section and rounding to the 
nearest one-tenth cent:
    (1) Multiply 0.138 times the monthly average Chicago Mercantile 
Exchange Grade A (92-score) butter price as reported and published by 
the Dairy Division;
    (2) Multiply 0.0028 times the average price per hundredweight, at 
test, for manufacturing grade milk, f.o.b. plants in Minnesota and 
Wisconsin, as reported by the Department for the month.
    6. In Sec. 1124.30, paragraphs (a)(1) (i) and (ii), and (c) (1), 
(2), and (3) are revised to read as follows:


Sec. 1124.30  Reports of receipts and utilization.

* * * * *
    (a) * * *
    (1) * * *
    (i) Milk received directly from producers (including such handler's 
own production) and the pounds of nonfat milk solids contained therein;
    (ii) Milk received from a cooperative association pursuant to 
Sec. 1124.9(c) and the pounds of nonfat milk solids contained therein;
* * * * *
    (c) * * *
    (1) The pounds of skim milk, butterfat, and nonfat milk solids 
received from producers;
    (2) The utilization of skim milk, butterfat, and nonfat milk solids 
for which it is the handler pursuant to Sec. 1124.9(b); and
    (3) The quantities of skim milk, butterfat, and nonfat milk solids 
delivered to each pool plant pursuant to Sec. 1124.9(c).
* * * * *
    7. In Sec. 1124.31, paragraphs (a)(1), (b) introductory text, and 
(b)(1) are revised to read as follows:


Sec. 1124.31  Payroll reports.

* * * * *
    (a) * * *
    (1) The total pounds of milk received from each producer, the 
pounds of butterfat and nonfat milk solids contained in such milk, and 
the number of days on which milk was delivered by the producer during 
the month;
* * * * *
    (b) Each handler operating a partially regulated distributing plant 
who wishes computations pursuant to Sec. 1124.75(a) to be considered in 
the computation of its obligation pursuant to Sec. 1124.75 shall submit 
its payroll for deliveries of Grade A milk by dairy farmers which shall 
show:
    (1) The total pounds of milk received from each producer and the 
pounds of butterfat and nonfat milk solids contained in such milk;
* * * * *
    8. Section 1124.32 is revised to read as follows:


Sec. 1124.32  Other reports.

    In addition to the reports required pursuant to Sec. Sec. 1124.30 
and 1124.31, each handler shall report such other information as the 
market administrator deems necessary to verify or establish such 
handler's obligations under the order.
    9. Section 1124.41 is amended by revising the second sentence of 
paragraph (c) to read as follows:


Sec. 1124.41  Shrinkage.

* * * * *
    (c) * * * If the operator of a plant or a commercial food 
processing establishment pursuant to Sec. 1124.20 purchases such milk 
on the basis of weights determined from its measurement at the farm, 
and butterfat tests and nonfat milk solids determined from farm bulk 
tank samples, the applicable percentage under this paragraph for the 
cooperative association shall be zero.
    10. The center heading preceding Sec. 1124.50 is revised to read 
``CLASS AND COMPONENT PRICES''.
    11. Section 1124.50 is revised to read as follows:


Sec. 1124.50  Class and component prices.

    The class and component prices for the month, per hundredweight or 
per pound, shall be as follows:
    (a) The Class I price, subject to the provisions of Sec. 1124.52, 
shall be the basic formula price defined in Sec. 1124.51 for the second 
preceding month plus $1.90.
    (b) The Class II price shall be computed by the Director of the 
Dairy Division and transmitted to the market administrator on or before 
the 15th day of the preceding month. The Class II price shall be the 
basic Class II formula price computed pursuant to Sec. 1124.51(b) for 
the month plus the amount that the value computed pursuant to paragraph 
(b)(1) of this section exceeds the value computed pursuant to paragraph 
(b)(2) of this section, plus any amount by which the basic Class II 
formula price for the second preceding month, adjusted pursuant to 
paragraphs (b)(1) and (b)(2) of this section, was less than the Class 
III price for the second preceding month:
    (1) Determine for the most recent 12-month period the simple 
average (rounded to the nearest cent) of the basic formula prices 
computed pursuant to Sec. 1124.51(a) and add 25 cents; and
    (2) Determine for the same 12-month period as specified in 
paragraph (b)(1) of this section the simple average (rounded to the 
nearest cent) of the basic Class II formula prices computed pursuant to 
Sec. 1124.51(b).
    (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 
Western 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 .4 by such nonfat dry milk 
price, plus the butterfat differential times 35 and rounded to the 
nearest cent.
    (e) The skim milk price per hundredweight shall be the basic 
formula price for the month pursuant to Sec. 1124.51(a) less an amount 
computed by multiplying the butterfat differential computed pursuant to 
Sec. 1124.19(e) by 35.
    (f) The butterfat price per pound shall be the total of:
    (1) The skim price computed in paragraph (e) of this section 
divided by 100; and
    (2) The butterfat differential computed pursuant to Sec. 1124.19(e) 
multiplied by 10.
    (g) The nonfat milk solids price per pound shall be computed by 
subtracting the butterfat price, multiplied by 3.5, from the basic 
formula price and dividing the result by the average percentage of 
nonfat milk solids in the milk on which the basic formula price is 
based, as announced by the Dairy Division. The resulting price shall be 
rounded to the nearest whole cent.
    12. Section 1124.51 is revised to read as follows:


Sec. 1124.51  Basic formula prices.

    (a) The basic formula price shall be the average price per 
hundredweight for manufacturing grade milk, f.o.b. plants in Minnesota 
and Wisconsin, as reported by the Department for the month, adjusted to 
a 3.5 percent butterfat basis and rounded to the nearest cent using the 
butterfat differential computed pursuant to Sec. 1124.19(e).
    (b) The basic Class II formula price for the month shall be the 
basic formula price determined pursuant to Sec. 1124.51(a) for the 
second preceding month plus or minus the amount computed pursuant to 
paragraphs (b) (1) through (4) of this section:
    (1) The gross values per hundredweight of milk used to manufacture 
cheddar cheese and butter-nonfat dry milk shall be computed, using 
price data determined pursuant to Sec. 1124.19 and yield factors in 
effect under the Dairy Price Support Program authorized by the 
Agricultural Act of 1949, as amended, for the first 15 days of the 
preceding month and, separately, for the first 15 days of the second 
preceding month as follows:
    (i) The gross value of milk used to manufacture cheddar cheese 
shall be the sum of the following computations:
    (A) Multiply the cheddar cheese price by the yield factor used 
under the Price Support Program for cheddar cheese;
    (B) Multiply the butter price by the yield factor used under the 
Price Support Program for determining the butterfat component of the 
whey value in the cheese price computation; and
    (C) Subtract from the edible whey price the processing cost used 
under the Price Support Program for edible whey and multiply any 
positive difference by the yield factor used under the Price Support 
Program for edible whey.
    (ii) The gross value of milk used to manufacture butter-nonfat dry 
milk shall be the sum of the following computations:
    (A) Multiply the butter price by the yield factor used under the 
Price Support Program for butter; and
    (B) Multiply the nonfat dry milk price by the yield factor used 
under the Price Support Program for nonfat dry milk.
    (2) Determine the amounts by which the gross value per 
hundredweight of milk used to manufacture cheddar cheese and the gross 
value per hundredweight of milk used to manufacture butter-nonfat dry 
milk for the first 15 days of the preceding month exceed or are less 
than the respective gross values for the first 15 days of the second 
preceding month.
    (3) Compute weighting factors to be applied to the changes in gross 
values determined pursuant to paragraph (b)(2) 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 (b)(3) (i) and (ii) of this section:
    (i) Combine the total American cheese production for the States of 
Minnesota and Wisconsin, as reported by the Statistical Reporting 
Service of the Department for the most recent preceding period, and 
divide by the yield factor used under the Price Support Program for 
cheddar cheese to determine the quantity of milk used in the production 
of American cheddar cheese; and
    (ii) Combine the total nonfat dry milk production for the States of 
Minnesota and Wisconsin, as reported by the Statistical Reporting 
Service of the Department for the most recent preceding period, and 
divide by the yield factor used under the Price Support Program for 
nonfat dry milk to determine the quantity of milk used in the 
production of butter-nonfat dry milk.
    (4) Compute a weighted average of the changes in gross values per 
hundredweight of milk determined pursuant to paragraph (b)(2) of this 
section in accordance with the relative proportions of milk determined 
pursuant to paragraph (b)(3) of this section.


Sec. 1124.51a  [Removed]

    13. Section 1124.51a is removed.
    14. Section 1124.53 is revised to read as follows:


Sec. 1124.53  Announcement of class and component prices.

    The market administrator shall announce publicly:
    (a) On or before the 5th day of each month, the Class I price for 
the following month and the Class III and Class III-A prices for the 
preceding month;
    (b) On or before the 15th day of each month, the Class II price for 
the following month; and
    (c) On or before the 5th day after the end of each month, the basic 
formula price, the prices for skim milk and butterfat, and the nonfat 
milk solids price.

    15. The center heading preceding Sec. 1124.60 is revised to read 
``DIFFERENTIAL POOL AND HANDLER OBLIGATIONS''.
    16. Section 1124.60 is revised to read as follows:


Sec. 1124.60  Computation of handlers' obligations to pool.

    The market administrator shall compute each month for each handler 
defined in Sec. 1124.9(a) with respect to each of the handler's pool 
plants, and for each handler described in Sec. 1124.9 (b) and (c), an 
obligation to the pool by combining the amounts computed as follows:
    (a) Multiply the pounds of producer milk in Class I pursuant to 
Sec. 1124.44 by the difference between the Class I price, adjusted 
pursuant to Sec. 1124.52, and the Class III price;
    (b) Multiply the pounds of producer milk in Class II pursuant to 
Sec. 1124.44 by the difference between the Class II price and Class III 
price;
    (c) Add or subtract, as appropriate, the amount that results from 
multiplying the pounds of producer milk in Class III-A by the amount 
that the Class III-A price is more or less, respectively, than the 
Class III price;
    (d) Multiply the pounds of skim milk in Class I producer milk 
pursuant to Sec. 1124.44 by the skim milk price for the month;
    (e) Multiply the nonfat milk solids price for the month by the 
pounds of nonfat milk solids associated with the pounds of producer 
skim milk in Class II and Class III during the month. The pounds of 
nonfat milk solids shall be computed by multiplying the producer skim 
milk pounds so assigned by the percentage of nonfat milk solids in the 
handler's receipts of producer skim milk during the month for each 
report filed separately;
    (f) With respect to skim milk and butterfat overages assigned 
pursuant to Sec. 1124.44(a)(15), (b), and paragraph (f)(6) of this 
section:
    (1) Multiply the total pounds of butterfat by the butterfat price;
    (2) Multiply the skim milk pounds assigned to Class I by the skim 
milk price;
    (3) Multiply the pounds of nonfat milk solids associated with the 
skim milk pounds assigned to Class II and III by the nonfat milk solids 
price;
    (4) Multiply the combined skim milk and butterfat pounds assigned 
to Class I by the difference between the Class I price, adjusted for 
location, and the Class III price;
    (5) Multiply the combined skim milk and butterfat pounds assigned 
to Class II by the difference between the Class II price and the Class 
III price; and
    (6) Overage at a nonpool plant that is located on the same premises 
as a pool plant shall be prorated between the quantity of skim and 
butterfat received by transfer from the pool plant and other source 
milk received at the nonpool plant. The pool plant operator's 
obligation to the pool with respect to such overage will be computed by 
adding the prorated pounds of skim milk and butterfat to the amounts 
assigned pursuant to Sec. 1124.44(a)(15) and (b);
    (g) With respect to skim milk and butterfat assigned to shrinkage 
pursuant to Sec. 1124.44(a)(10) and (b):
    (1) Multiply the total pounds of butterfat by the butterfat price;
    (2) Multiply the skim milk pounds assigned to Class I by the skim 
milk price;
    (3) Multiply the pounds of nonfat milk solids associated with the 
skim milk pounds assigned to Class II and III by the nonfat milk solids 
price;
    (4) Multiply the combined skim milk and butterfat pounds assigned 
to Class I by the difference between the Class I price, adjusted for 
location, and the Class III price;
    (5) Multiply the combined skim milk and butterfat pounds assigned 
to Class II by the difference between the Class II price and the Class 
III price; and
    (6) Subtract the Class III value of the milk at the previous 
month's nonfat milk solids and butterfat prices;
    (h) Multiply the difference between the Class I price, adjusted for 
the location of the pool plant, and the Class III price by the combined 
pounds of skim milk and butterfat assigned to Class I pursuant to 
Sec. 1124.43(f) and subtracted from Class I pursuant to 
Sec. 1124.44(a)(8) (i) through (iv), (vii), and Sec. 1124.44(b), 
excluding:
    (1) Receipts of bulk fluid cream products from an other order 
plant;
    (2) Receipts of bulk concentrated fluid milk products from pool 
plants, other order plants, and unregulated supply plants; and
    (3) 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. 1124.75(b)(4) or (c);
    (i) Multiply the combined pounds of skim milk and butterfat 
subtracted from Class I pursuant to Sec. 1124.44(a)(8) (v) and (vi) and 
Sec. 1124.44(b) by the difference between the Class I price at the 
transferor plant and the Class III price;
    (j) Multiply the difference between the Class I and Class III 
prices, applicable at the location of the nearest nonpool plant(s) from 
which an equivalent volume was received, with respect to skim milk and 
butterfat in receipts of concentrated fluid milk products assigned to 
Class I pursuant to Sec. 1124.43(f) and Sec. 1124.44(a)(8)(v) and the 
combined pounds of skim milk and butterfat in receipts from an 
unregulated supply plant assigned pursuant to Sec. 1124.44(a)(12) and 
(b), excluding such skim milk or butterfat in receipts of bulk fluid 
milk products from an unregulated supply plant to the extent that an 
equivalent quantity disposed of to such plant by handlers fully 
regulated by any Federal order is classified and priced as Class I milk 
and is not used as an offset for any other payment obligation under any 
order;
    (k) 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 combined 
pounds of skim milk and butterfat contained in receipts of nonfluid 
milk products that are allocated to Class I use pursuant to 
Sec. 1124.43(f);
    (l) Add or subtract, as appropriate, the amount necessary to 
correct errors disclosed by the verification of the handler's receipts 
and utilization of skim milk and butterfat as reported for previous 
months; and
    (m) 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 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.
    17. Section 1124.61 is revised to read as follows:


Sec. 1124.61  Computation of weighted average differential price.

    A weighted average differential price for each month shall be 
computed by the market administrator as follows:
    (a) Combine into one total the value computed pursuant to 
Sec. 1124.60 (a) through (c) and (f) through (m) for all handlers who 
filed the reports prescribed by Sec. 1124.30 for the month and who made 
the payments pursuant to Sec. 1124.71 for the preceding month;
    (b) Add an amount equal to the total value of the location 
adjustments computed pursuant to Sec. 1124.74;
    (c) Add an amount equal to not less than one-half of the 
unobligated balance in the producer settlement fund;
    (d) Divide the resulting amount by the sum, for all handlers, of 
the total hundredweight of producer milk and the total hundredweight 
for which a value is computed pursuant to Sec. 1124.60(j); and
    (e) Subtract not less than 4 cents per hundredweight nor more than 
5 cents per hundredweight. The result shall be the weighted average 
differential price.
    18. Section 1124.62 is redesignated as Sec. 1124.63 and revised to 
read as follows:


Sec. 1124.63  Announcement of the weighted average differential price, 
the producer nonfat milk solids price, and an estimated uniform price.

    The market administrator shall announce on or before the 14th day 
after the end of each month, the following prices for such month:
    (a) The weighted average differential price;
    (b) The producer nonfat milk solids price; and
    (c) An estimated uniform price per hundredweight of milk which is 
computed by adding the weighted average differential price to the basic 
formula price.
    19. A new Sec. 1124.62 is added to read as follows:


Sec. 1124.62  Computation of producer nonfat milk solids price.

    The producer nonfat milk solids price shall be computed by the 
market administrator each month as follows:
    (a) Combine into one total the values computed pursuant to 
Sec. 1124.60 (d) and (e) for all handlers who filed reports pursuant to 
Sec. 1124.30 and who made payments pursuant to Sec. 1124.71 for the 
preceding month;
    (b) Divide the resulting amount by the total pounds of nonfat milk 
solids in producer milk; and
    (c) Round to the nearest whole cent.
    20. Section 1124.70 is revised to read as follows:


Sec. 1124.70  Producer-settlement fund.

    The market administrator shall establish and maintain a separate 
fund known as the ``producer-settlement'' fund into which shall be 
deposited all payments made by handlers pursuant to Secs. 1124.71 and 
1124.75 and out of which shall be made all payments to handlers 
pursuant to Sec. 1124.72. Payments due a handler from the fund shall be 
offset against payments due from such handler.
    21. Section 1124.71 is revised to read as follows:


Sec. 1124.71  Payments to the producer-settlement fund.

    On or before the 16th day after the end of the month, each handler 
shall pay to the market administrator the amount, if any, which results 
from subtracting the sum computed pursuant to paragraph (a) of this 
section from the sum computed pursuant to paragraph (b) of this 
section:
    (a) The sum of:
    (1) The total obligation of the handler for such month as 
determined pursuant to Sec. 1124.60; and
    (2) For a cooperative association handler, the amount due from 
other handlers pursuant to Sec. 1124.73(d).
    (b) The sum of:
    (1) The value of milk received by the handler from producers at the 
applicable prices pursuant to Sec. 1124.73(a)(2) (i), (ii), and (iii);
    (2) The amount to be paid by the handler to cooperative 
associations pursuant to Sec. 1124.73(d); and
    (3) The value at the weighted average differential price adjusted 
for the location of the plant(s) at which received (not to be less than 
zero) with respect to the total hundredweight of skim milk and 
butterfat in other source milk for which a value was computed for such 
handler pursuant to Sec. 1124.60(j); and
    (c) On or before the 25th day after the end of the month, each 
handler operating a plant specified in Sec. 1124.7(d) (2) and (3), if 
such plant is subject to the classification and pricing provisions of 
another order which provides for individual handler pooling, shall pay 
to the market administrator for the producer-settlement fund an amount 
computed as follows:
    (1) Determine the quantity of reconstituted skim milk in filled 
milk disposed of as route disposition in the marketing area which was 
allocated to Class I at such other order plant. If reconstituted skim 
milk in filled milk is disposed of from such plant as route disposition 
in the marketing areas regulated by two or more market pool orders, the 
reconstituted skim milk assigned to Class I shall be prorated according 
to such disposition in each area.
    (2) Compute the value of the quantity assigned in paragraph (c)(1) 
of this section to Class I disposition in this area, at 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 subtract its 
value at the Class III price.
    22. Section 1124.72 is revised to read as follows:


Sec. 1124.72  Payments from the producer-settlement fund.

    On or before the 18th day after the end of the month, the market 
administrator shall pay to each handler the amount, if any, by which 
the amount computed pursuant to Sec. 1124.71(b) exceeds the amount 
computed pursuant to Sec. 1124.71(a), less any unpaid obligations of 
such handler to the market administrator pursuant to Secs. 1124.71, 
1124.75, 1124.85, and 1124.86. However, if 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 necessary funds are 
available.
    23. Section 1124.73 is revised to read as follows:


Sec. 1124.73  Payments to producers and to cooperative associations.

    (a) Each handler shall make payment pursuant to this paragraph or 
paragraph (b) of this section to each producer from whom milk is 
received during the month:
    (1) On or before the last day of the month, to each producer who 
did not discontinue shipping milk to such handler before the 18th day 
of the month at not less than the Class III price for the preceding 
month per hundredweight of milk received from the producer during the 
first 15 days of the month, subject to adjustment for proper deductions 
authorized in writing by the producer;
    (2) On or before the 19th day after the end of each month, an 
amount computed as follows:
    (i) Multiply the butterfat price for the month by the total pounds 
of butterfat in milk received from the producer;
    (ii) Add the amount that results from multiplying the producer 
nonfat milk solids price for the month by the total pounds of nonfat 
milk solids in the milk received from the producer;
    (iii) Add the amount that results from multiplying the total 
hundredweight of milk received from the producer by the weighted 
average differential price for the month as adjusted pursuant to 
Sec. 1124.74(a);
    (iv) Subtract payments made to the producer pursuant to paragraph 
(a)(1) of this section;
    (v) Subtract proper deductions authorized in writing by the 
producer; and
    (vi) Subtract any deduction required pursuant to statute; and
    (3) If by the 19th day after the end of the month a handler has not 
received full payment from the market administrator pursuant to 
Sec. 1124.72, the payments to producers required pursuant to paragraph 
(a)(2) of this section may be reduced uniformly as a percentage of the 
amount due each producer by a total sum not in excess of the remainder 
due from the market administrator. The handler shall pay the balance 
due producers on or before the date for making payments pursuant to 
such paragraph next following receipt of the full payment from the 
market administrator.
    (b) The payments required in paragraph (a) of this section shall, 
upon the request of a cooperative association qualified under 
Sec. 1124.18, be made to the association or its duly authorized agent 
for milk received from each producer who has given such association 
authorization by contract or other written instrument to collect the 
proceeds from the sale of the producer's milk. All payments required 
pursuant to this paragraph shall be made on or before the second day 
prior to the dates specified for such payment in paragraph (a)(2) of 
this section.
    (c) Each handler shall pay to each cooperative association which 
operates a pool plant, or the cooperative's duly authorized agent, for 
butterfat and nonfat milk solids received from such plant in the form 
of fluid milk products as follows:
    (1) On or before the second day prior to the date specified in 
paragraph (a)(1) of this section, for butterfat and nonfat milk solids 
received during the first 15 days of the month at not less than the 
butterfat and nonfat milk solids prices, respectively, for the 
preceding month; and
    (2) On or before the 15th day after the end of the month, an amount 
of money determined in accordance with computations made on the same 
basis as those specified in paragraph (a)(2) (i) through (iii) of this 
section, minus any payment made pursuant to paragraph (c)(1) of this 
section.
    (d) Each handler pursuant to Sec. 1124.9(a) that received milk from 
a cooperative association that was a handler pursuant to Sec. 1124.9(c) 
shall pay the cooperative association for such milk as follows:
    (1) On or before the second day prior to the date specified in 
paragraph (a)(1) of this section, for milk received during the first 15 
days of the month at not less than the Class III price for the 
preceding month; and
    (2) On or before the 17th day after the end of each month, for milk 
received during the month an amount of money determined in accordance 
with the computations specified in paragraphs (a)(2) (i) through (iii) 
of this section, minus any payment made pursuant to paragraph (d)(1) of 
this section.
    (e) None of the provisions of this section shall be construed to 
restrict any cooperative association qualified under section 8c(5)(F) 
of the Act from making payment for milk to its producers in accordance 
with such provision of the Act.
    (f) In making payments to producers pursuant to this section, each 
handler shall provide each producer, on or before the 19th day of each 
month, with a supporting statement for milk received from the producer 
during the previous month in such form that it may be retained by the 
producer, which shall show:
    (1) The identity of the handler and the producer;
    (2) The total pounds of milk delivered by the producer, the pounds 
of butterfat and nonfat milk solids contained therein, and, unless 
previously provided, the pounds of milk in each delivery;
    (3) The minimum rates at which payment to the producer is required 
under the provisions of this section;
    (4) The rate and amount of any premiums or of payments made in 
excess of the minimums required under this order;
    (5) The amount or rate of each deduction claimed by the handler, 
together with an explanation of each such deduction; and
    (6) The net amount of payment to the producer.
    (g) In making payments to a cooperative association in aggregate 
pursuant to this section, each handler shall, upon request, provide the 
cooperative association, with respect to each producer for whom such 
payment is made, any or all of the information specified in paragraph 
(f) of this section.


Sec. 1124.74  [Removed]

    24. Section 1124.74 is removed.


Sec. 1124.75  [Redesignated as Sec. 1124.74 and Amended]

    25. Section 1124.75 is redesignated as Sec. 1124.74, and paragraph 
(c) is revised to read as follows:


Sec. 1124.74  Plant location adjustments for producers and on nonpool 
milk.

* * * * *
    (c) For purposes of the computations pursuant to Secs. 1124.71(a) 
and 1124.72, the weighted average differential price for all milk shall 
be adjusted at the rates set forth in Sec. 1124.52 for Class I milk 
applicable at the location of the nonpool plant from which the milk or 
filled milk was received, except that the adjusted weighted average 
differential price shall not be less than zero.


Sec. 1124.76  [Redesignated as Sec. 1124.75 and Amended]

    26. Section 1124.76 is redesignated as Sec. 1124.75. In the newly 
redesignated Sec. 1124.75(a)(1)(i) in the second sentence, the words 
``or estimated uniform price'' are added after the words ``uniform 
price''; and in the last sentence the reference ``Sec. 1124.60(f)'' is 
revised to read ``Sec. 1124.60(j)'' and the reference 
``Sec. 1124.71(a)(2)(iii)'' is revised to read ``Sec. 1124.71(b)(3)''. 
In Sec. 1124.75(a)(2)(i), the reference to ``Sec. 1124.74'' is revised 
to read ``Sec. 1124.19(e)''. In Sec. 1124.75(b)(4), the word 
``estimated'' is inserted before the words ``uniform price''.


Sec. 1124.77  [Redesignated as Sec. 1124.76]

    27. Section 1124.77 is redesignated as Sec. 1124.76.


Sec. 1124.78  [Redesignated as Sec. 1124.77 and Amended]

    28. Section 1124.78 is redesignated as Sec. 1124.77, and the 
reference in paragraph (a) introductory text to ``Sec. 1124.77'' is 
changed to read ``Sec. 1124.75''.


Sec. 1124.85  [Amended]

    29. In Sec. 1124.85(b), the reference ``Sec. 1124.60(f)'' is 
changed to read ``Sec. 1124.60 (h) and (j)'' and in Sec. 1124.85(c)(2), 
the reference ``Sec. 1124.76(b)(2)(ii)'' is changed to read 
``Sec. 1124.75(b)(2)(ii)''.

PART 1135--MILK IN THE SOUTHWESTERN IDAHO-EASTERN OREGON MARKETING 
AREA

    1. The authority citation for part 1135 is revised to read as 
follows:

    Authority: 7 U.S.C. 601-674.


Sec. 1135.9  [Amended]

    2. In Sec. 1135.9(c), the words ``and protein tests'' are added 
following the word ``butterfat''.
    3. Section 1135.19 is revised to read as follows:


Sec. 1135.19  Product prices and butterfat differential.

    The prices specified in this section, which are computed by the 
Director of the Dairy Division, Agricultural Marketing Service, shall 
be used, where specified, in calculating the basic formula prices 
pursuant to Sec. 1135.51. The term ``workday'' as used in this section 
shall mean each Monday through Friday that is not a national holiday.
    (a) Butter price means the simple average, for the first 15 days of 
the month, of the daily prices per pound of Grade A (92-score) butter 
on the Chicago Mercantile Exchange, using the price reported each week 
as the price for the day of the report, and for each following workday 
until the next price is reported.
    (b) Cheddar cheese price means the simple average, for the first 15 
days of the month, of the daily prices per pound of cheddar cheese in 
40-pound blocks. The prices used shall be those of the National Cheese 
Exchange (Green Bay, WI), using the price reported each week as the 
price for the day of the report and for each following workday until 
the next price is reported.
    (c) Nonfat dry milk price means the simple average of the prices 
per pound of nonfat dry milk for the first 15 days of the month 
computed as follows:
    (1) The prices used shall be the prices (using the midpoint of any 
price range as one price) of high heat, low heat, and Grade A nonfat 
dry milk, respectively, for the Central States production area;
    (2) For each week, determine the simple average of the prices 
reported for the three types of nonfat dry milk. Such average shall be 
the daily price for the day that such prices are reported and for each 
preceding workday until the day such prices were previously reported; 
and
    (3) Add the prices determined in paragraph (c)(2) of this section 
for the first 15 days of the month and divide by the number of days for 
which there is a daily price.
    (d) Edible whey price means the simple average, for the first 15 
days of the month, of the daily prices per pound of edible whey powder 
(nonhygroscopic). The prices used shall be the prices (using the 
midpoint of any price range as one price) of edible whey powder for the 
Central States production area. The average shall be computed using the 
price reported each week as the daily price for that day and for each 
preceding workday until the day such price was previously reported.
    (e) The butterfat differential is the number that results from 
subtracting the computation in paragraph (e)(2) of this section from 
the computation in paragraph (e)(1) of this section and rounding to the 
nearest one-tenth cent:
    (1) Multiply 0.138 times the monthly average Chicago Mercantile 
Exchange Grade A (92-score) butter price, as reported and published by 
the Dairy Division;
    (2) Multiply 0.0028 times the average price per hundredweight, at 
test, for manufacturing grade milk, f.o.b. plants in Minnesota and 
Wisconsin, as reported by the Department for the month.
    4. In Sec. 1135.30, paragraphs (b) and (d) are redesignated as 
paragraphs (d) and (e), respectively, and the introductory text of this 
section and paragraphs (a) and (c) are revised, and a new paragraph (b) 
is added to read as follows:


Sec. 1135.30  Reports of receipts and utilization.

    On or before the 9th day after the end of the month, each handler 
shall report to the market administrator, in the detail and on forms 
prescribed by the market administrator, the following information for 
such month:
    (a) Each handler qualified pursuant to Sec. 1135.9(a) shall report 
for each pool plant operated by the handler the quantities of skim milk 
and butterfat contained in or represented by:
    (1) Producer milk received at such plants or diverted by the 
handler to other plants, and the protein content of such milk;
    (2) Producer milk received at such plants from handlers qualified 
pursuant to Sec. 1135.9 (c) and (d), and the protein content of such 
milk; and
    (3) Fluid milk products and bulk fluid cream products from other 
pool plants and other source milk received at such plants.
    (b) Each handler qualified pursuant to Sec. 1135.9 (b), (c), or (d) 
shall report the quantities of producer milk received and the butterfat 
and protein contained therein.
    (c) Each handler submitting reports pursuant to paragraphs (a) and 
(b) of this section shall report the utilization or disposition of all 
milk, filled milk, and milk products required to be reported, and 
inventories on hand at the beginning and end of each month in the form 
of fluid milk products and products specified in Sec. 1135.40(b)(1).
* * * * *
    5. In Sec. 1135.31(a), the word ``20th'' is changed to ``22nd'', 
the semicolon at the end of paragraph (a) introductory text is changed 
to a colon, and paragraph (a)(4) is revised to read as follows:


Sec. 1135.31  Payroll reports.

    (a) * * *
    (4) The average butterfat and protein content of his/her milk;
* * * * *
    6. In Sec. 1135.41, the colon at the end of paragraph (b)(3) is 
changed to a semicolon and paragraph (c) is revised to read as follows:


Sec. 1135.41  Shrinkage.

* * * * *
    (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. 1135.9 (b) or (c) or a proprietary bulk 
tank handler is the handler pursuant to Sec. 1135.9(d), 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 protein and butterfat tests determined from 
farm bulk tank samples, the applicable percentage for the cooperative 
association or the proprietary bulk tank handler shall be zero.
    7. The center heading preceding Sec. 1135.50 is revised to read 
``CLASS AND COMPONENT PRICES''.
    8. In Sec. 1135.50, the reference in paragraph (b) introductory 
text ``Sec. 1135.51a'' is revised to read ``Sec. 1135.51(b)''; in 
paragraph (b)(1), the reference ``Sec. 1135.51'' is revised to read 
``Sec. 1135.51(a)''; in paragraph (b)(2), the reference 
``Sec. 1135.51a'' is changed to read ``Sec. 1135.51(b)''; the section 
heading and paragraph (a) is revised as read as follows; and new 
paragraphs (e), (f), and (g) are added as follows:


Sec. 1135.50  Class and component prices.

* * * * *
    (a) The Class I price shall be the basic formula price pursuant to 
Sec. 1135.51(a) for the second preceding month plus $1.50.
* * * * *
    (e) The skim milk price per hundredweight shall be the basic 
formula price for the month pursuant to Sec. 1135.51(a) less an amount 
computed by multiplying the butterfat differential computed pursuant to 
Sec. 1135.19(e) by 35.
    (f) The butterfat price per pound shall be the total of:
    (1) the skim price computed in paragraph (e) of this section 
divided by 100; and
    (2) the butterfat differential computed pursuant to Sec. 1135.19(e) 
multiplied by 10.
    (g) The milk protein price per pound shall be computed by 
subtracting the butterfat price, multiplied by 3.5, from the basic 
formula price and dividing the result by the percentage of protein in 
the milk on which the basic formula price is based, as announced by the 
Dairy Division. The resulting price shall be rounded to the nearest 
whole cent.
    9. Section 1135.51 is revised to read as follows:


Sec. 1135.51  Basic formula prices.

    (a) The basic formula price shall be the average price per 
hundredweight for manufacturing grade milk, f.o.b. plants in Minnesota 
and Wisconsin, as reported by the Department for the month, adjusted to 
a 3.5 percent butterfat basis and rounded to the nearest cent using the 
butterfat differential computed pursuant to Sec. 1135.19(e).
    (b) The basic Class II formula price for the month shall be the 
basic formula price determined pursuant to Sec. 1135.51(a) for the 
second preceding month plus or minus the amount computed pursuant to 
paragraphs (b)(1) through (4) of this section:
    (1) The gross values per hundredweight of milk used to manufacture 
cheddar cheese and butter-nonfat dry milk shall be computed, using 
price data determined pursuant to Sec. 1135.19 and yield factors in 
effect under the Dairy Price Support Program authorized by the 
Agricultural Act of 1949, as amended, for the first 15 days of the 
preceding month and, separately, for the first 15 days of the second 
preceding month as follows:
    (i) The gross value of milk used to manufacture cheddar cheese 
shall be the sum of the following computations:
    (A) Multiply the cheddar cheese price by the yield factor used 
under the Price Support Program for cheddar cheese;
    (B) Multiply the butter price by the yield factor used under the 
Price Support Program for determining the butterfat component of the 
whey value in the cheese price computation; and
    (C) Subtract from the edible whey price the processing cost used 
under the Price Support Program for edible whey and multiply any 
positive difference by the yield factor used under the Price Support 
Program for edible whey.
    (ii) The gross value of milk used to manufacture butter-nonfat dry 
milk shall be the sum of the following computations:
    (A) Multiply the butter price by the yield factor used under the 
Price Support Program for butter; and
    (B) Multiply the nonfat dry milk price by the yield factor used 
under the Price Support Program for nonfat dry milk.
    (2) Determine the amounts by which the gross value per 
hundredweight of milk used to manufacture cheddar cheese and the gross 
value per hundredweight of milk used to manufacture butter-nonfat dry 
milk for the first 15 days of the preceding month exceed or are less 
than the respective gross values for the first 15 days of the second 
preceding month.
    (3) Compute weighting factors to be applied to the changes in gross 
values determined pursuant to paragraph (b)(2) 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 (b)(3) (i) and (ii) of this section:
    (i) Combine the total American cheese production for the States of 
Minnesota and Wisconsin, as reported by the Statistical Reporting 
Service of the Department for the most recent preceding period, and 
divide by the yield factor used under the Price Support Program for 
cheddar cheese to determine the quantity of milk used in the production 
of American cheddar cheese; and
    (ii) Combine the total nonfat dry milk production for the States of 
Minnesota and Wisconsin, as reported by the Statistical Reporting 
Service of the Department for the most recent preceding period, and 
divide by the yield factor used under the Price Support Program for 
nonfat dry milk to determine the quantity of milk used in the 
production of butter-nonfat dry milk.
    (4) Compute a weighted average of the changes in gross values per 
hundredweight of milk determined pursuant to paragraph (b)(2) of this 
section in accordance with the relative proportions of milk determined 
pursuant to paragraph (b)(3) of this section.


Sec. 1135.51a  [Removed]

    10. Section 1135.51a is removed.
    11. Section 1135.53 is revised to read as follows:


Sec. 1135.53  Announcement of class and component prices.

    The market administrator shall announce publicly:
    (a) On or before the 5th day of each month, the Class I price for 
the following month and the Class III and Class III-A prices for the 
preceding month;
    (b) On or before the 15th day of each month, the Class II price for 
the following month; and
    (c) On or before the 5th day after the end of each month, the basic 
formula price, the prices for skim milk and butterfat, and the milk 
protein price.
    12. A center heading preceding Sec. 1135.60 is added to read 
``DIFFERENTIAL POOL AND HANDLER OBLIGATIONS''.
    13. Section 1135.60 is revised to read as follows:


Sec. 1135.60  Computation of handlers' obligations to pool.

    The market administrator shall compute each month for each handler 
described in Sec. 1135.9(a) with respect to each of the handler's pool 
plants and for each handler qualified pursuant to Sec. 1135.9(b), (c), 
or (d) an obligation to the pool by combining the amounts computed as 
follows:
    (a) Multiply the hundredweight of producer milk assigned to Class I 
milk pursuant to Sec. 1135.44(c) by the difference between the Class I 
price and the Class III price;
    (b) Multiply the hundredweight of producer milk assigned to Class 
II milk pursuant to Sec. 1135.44(c) by the difference between the Class 
II price and the Class III price;
    (c) Add or subtract, as appropriate, the amount that results from 
multiplying the pounds of producer milk in Class III-A by the amount 
that the Class III-A price is more or less, respectively, than the 
Class III price;
    (d) Multiply the skim milk price by the hundredweight of producer 
skim milk assigned to Class I milk pursuant to Sec. 1135.44(a);
    (e) Multiply the milk protein price by the pounds of protein in 
producer skim milk assigned to Class II and Class III pursuant to 
Sec. 1135.44(a). The pounds of protein shall be computed by multiplying 
the hundredweight of skim milk so assigned by the average percentage of 
protein in all producer skim milk received by the handler during the 
month;
    (f) With respect to skim milk and butterfat overages assigned 
pursuant to Sec. 1135.44(a)(14) and (b):
    (1) Multiply the total pounds of butterfat by the butterfat price;
    (2) Multiply the skim milk pounds assigned to Class I by the skim 
milk price;
    (3) Multiply the protein pounds associated with the skim milk 
pounds assigned to Class II and III by the milk protein price;
    (4) Multiply the combined skim milk and butterfat pounds assigned 
to Class I by the difference between the Class I price and the Class 
III price; and
    (5) Multiply the combined skim milk and butterfat pounds assigned 
to Class II by the difference between the Class II price and the Class 
III price;
    (g) With respect to skim milk and butterfat assigned to shrinkage 
pursuant to Sec. 1135.44(a)(9) and (b):
    (1) Multiply the total pounds of butterfat by the butterfat price;
    (2) Multiply the skim milk pounds assigned to Class I by the skim 
milk price;
    (3) Multiply the protein pounds associated with the skim milk 
pounds assigned to Class II and III by the milk protein price;
    (4) Multiply the combined skim milk and butterfat pounds assigned 
to Class I by the difference between the Class I price and the Class 
III price;
    (5) Multiply the combined skim milk and butterfat pounds assigned 
to Class II by the difference between the Class II price and the Class 
III price; and
    (6) Subtract the Class III value of the milk at the previous 
month's protein and butterfat prices;
    (h) Multiply the difference between the Class I price and the Class 
III price by the combined pounds of skim milk and butterfat assigned to 
Class I pursuant to Sec. 1135.43(d) and subtracted from Class I 
pursuant to Sec. 1135.44(a)(7)(i) through (iv) and (b), excluding:
    (1) Receipts of bulk fluid cream products from an other order 
plant;
    (2) Receipts of bulk concentrated fluid milk products from pool 
plants, other order plants, and unregulated supply plants; and
    (3) 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. 1135.76(a)(5) or (c);
    (i) Multiply the difference between the Class I price and the Class 
III price by the combined pounds of skim milk and butterfat subtracted 
from Class I pursuant to Sec. 1135.44(a)(7)(v) and (vi) and 
Sec. 1135.44(b);
    (j) Multiply the difference between the Class I price and the Class 
III price by the combined pounds of skim milk and butterfat in receipts 
of concentrated fluid milk products assigned to Class I pursuant to 
Sec. 1135.43(d) and Sec. 1135.44(a)(7)(i) and by the pounds of skim and 
butterfat subtracted from Class I pursuant to Sec. 1135.44(a)(11) and 
(b), excluding the skim milk and butterfat in receipts of bulk fluid 
milk products from unregulated supply plants to the extent an 
equivalent quantity of skim milk and butterfat disposed of to any 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;
    (k) 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 and the Class III price) 
by the combined pounds of skim milk and butterfat contained in receipts 
of nonfluid milk products that are allocated to Class I use pursuant to 
Sec. 1135.43(d); and
    (l) 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 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.
    14. Section 1135.61 is revised to read as follows:


Sec. 1135.61  Computation of weighted average differential price.

    A weighted average differential price for all milk received from 
producers shall be computed by the market administrator as follows:
    (a) Combine into one total the values computed pursuant to 
Sec. 1135.60 (a) through (c) and (f) through (l) for all handlers who 
filed reports pursuant to Sec. 1135.30 for the month and who made the 
payments pursuant to Sec. 1135.71 for the preceding month;
    (b) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (c) Divide the resulting amount by the sum, for all handlers, of 
the total hundredweight of producer milk and the total hundredweight 
for which values were computed pursuant to Sec. 1135.60(j); and
    (d) Subtract not less than 4 cents nor more than 5 cents per 
hundredweight of milk included under paragraph (c) of this section. The 
result shall be the weighted average differential price.


Sec. 1135.62  [Redesignated as Sec. 1135.63]

    15. Section 1135.62 is redesignated as Sec. 1135.63 and revised to 
read as follows:


Sec. 1135.63  Announcement of the weighted average differential price, 
the producer protein price, and an estimated uniform price.

    The market administrator shall announce on or before the 14th day 
after the end of each month the following prices for such month:
    (a) The weighted average differential price;
    (b) The producer protein price; and
    (c) An estimated uniform price per hundredweight of milk computed 
by adding the weighted average differential price to the basic formula 
price.
    16. A new Sec. 1135.62 is added to read as follows:


Sec. 1135.62  Computation of producer protein price.

    A producer protein price shall be computed by the market 
administrator each month as follows:
    (a) Combine into one total the values computed pursuant to 
Sec. 1135.60(d) and (e) for all handlers who filed reports pursuant to 
Sec. 1135.30 and who made payments pursuant to Sec. 1135.71 for the 
preceding month;
    (b) Divide the resulting amount by the total pounds or protein 
contained in producer milk; and
    (c) Round to the nearest whole cent. The result shall be the 
producer protein price.
    17. Section 1135.70 is revised to read as follows:


Sec. 1135.70  Producer-settlement fund.

    The market administrator shall establish and maintain a separate 
fund known as the ``producer-settlement fund'' into which he shall 
deposit the appropriate payments made by handlers pursuant to 
Secs. 1135.71, 1135.74, 1135.75, and 1135.76 and out of which he shall 
make all payments due handlers pursuant to Secs. 1135.72, and 1135.75.
    18. Section 1135.71 is revised to read as follows:


Sec. 1135.71  Payments to the producer-settlement fund.

    On or before the 16th day after the end of the month, each handler 
shall pay to the market administrator the amount, if any, by which the 
amount as specified in paragraph (a) of this section exceeds the amount 
specified in paragraph (b) of this section:
    (a) The total obligation of the handler for such month as 
determined pursuant to Sec. 1135.60.
    (b) The sum of:
    (1) The value computed by multiplying the weighted average 
differential price by the hundredweight of producer milk received from 
handlers qualified pursuant to Sec. 1135.9(c) and from producers during 
the month;
    (2) The value computed for the protein contained in the producer 
milk included under paragraph (b)(1) of this section at the producer 
protein price; and
    (3) The value at the weighted average differential price of the 
hundredweight of skim milk and butterfat for which a value is computed 
pursuant to Sec. 1135.60(j).
    19. Section 1135.72 is revised to read as follows:


Sec. 1135.72  Payments from the producer-settlement fund.

    On or before the 18th day after the end of the month, the market 
administrator shall pay to each handler the amount, if any, by which 
the amount computed for such handler pursuant to Sec. 1135.71(b) 
exceeds the amount computed pursuant to Sec. 1135.71(a). If at such 
time the balance in the producer-settlement fund is insufficient to 
make all of the payments pursuant to this section, the market 
administrator shall reduce uniformly such payment and shall complete 
such payment as soon as the necessary funds become available.
    20. In Sec. 1135.73, paragraphs (b), (d), and (e) (2) through (6) 
are revised to read as follows:


Sec. 1135.73  Payments to producers and to cooperative associations.

* * * * *
    (b) On or before the 19th day after the end of each month, each 
handler shall pay to each producer from whom milk was received during 
the month, a sum computed as follows:
    (1) Multiply the butterfat price for the month by the total pounds 
of butterfat in milk received from the producer;
    (2) Multiply the producer protein price for the month by the total 
pounds of protein in such milk;
    (3) Multiply the weighted average differential price for the month 
multiplied by the hundredweight of such milk;
    (4) Subtract payments made to the producer pursuant to paragraph 
(a) of this section;
    (5) Subtract deductions for marketing services pursuant to 
Sec. 1135.86; and
    (6) Subtract proper deductions authorized in writing by such 
producer.
* * * * *
    (d) In the event a handler has not received full payment from the 
market administrator pursuant to Sec. 1135.72 by the 19th day of the 
month, the handler may reduce pro rata the payments to producers 
pursuant to paragraphs (b) and (c) of this section by not more than the 
amount of such underpayment. Following receipt of the balance due from 
the market administrator, the handler shall complete payments to 
producers not later than the next payment date provided under this 
paragraph.
    (e) * * *
    (2) The total pounds of milk received from the producer and the 
pounds of butterfat and protein contained therein;
    (3) The minimum rates at which payment is required pursuant to this 
section;
    (4) The rates used in making payment, if such rates are other than 
the required applicable minimums;
    (5) The amount (or rate per hundredweight) of each deduction 
claimed by the handler, including any deduction claimed under 
Sec. 1135.86, together with an explanation of each deduction; and
    (6) The net amount of the payment to the producer.


Sec. 1135.74  [Removed]

    21. Section 1135.74 is removed.


Sec. 1135.76  [Redesignated as Sec. 1135.74 and Amended]

    22. Section 1135.76 is redesignated as Sec. 1135.74 and the 
following changes are made in that section:
    a. In newly designated Sec. 1135.74(a)(4), the word ``estimated'' 
is inserted before the words ``uniform price'';
    b. In Sec. 1135.74(b)(1)(ii), the words ``or estimated uniform 
price'' are added following the words ``uniform price'' everywhere it 
appears;
    c. In Sec. 1135.74 (b)(1)(iii) introductory text, the reference 
``Sec. 1135.60(f)'' is revised to read ``Sec. 1135.60(j)'', the 
reference ``Sec. 1135.71(a)(2)(ii)'' is revised to read 
``Sec. 1135.71(b)(2)''.
    d. In Sec. 1135.74, paragraphs (b)(1)(iii) (a) through (c) are 
redesignated as (b)(1)(iii)(A) through (C); and
    e. In Sec. 1135.74(b)(2)(i) and (ii), the reference 
``Sec. 1135.74'' is changed to read ``Sec. 1135.19(e)''.


Sec. 1135.77  [Redesignated as Sec. 1135.75]

    23. Section 1135.77 is redesignated as Sec. 1135.75.


Sec. 1135.78  [Redesignated as Sec. 1135.76 and Amended]

    24. Section 1135.78 is redesignated as Sec. 1135.76, and the 
references ``1135.76, 1135.77, 1135.78'' are changed to read ``1135.74, 
1135.75, 1135.76'', respectively.


Sec. 1135.85  [Amended]

    25. In Sec. 1135.85(b), the reference ``Sec. 1135.60(d) and (f)'' 
is changed to read ``Sec. 1135.60(h) and (j)''; and in Sec. 1135.85(c), 
the reference ``Sec. 1135.76(a)(2)'' is changed to read 
``Sec. 1135.74(a)(2)''.

    Dated: March 28, 1994.
Patricia Jensen,
Acting Assistant Secretary for Marketing and Inspection Services.
[FR Doc. 94-7830 Filed 3-31-94; 8:45 am]
BILLING CODE 3410-02-P