[Federal Register Volume 59, Number 183 (Thursday, September 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22919]


  Federal Register / Vol. 59, No. 183 / Thursday, September 22, 1994 /
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[[Page Unknown]]

[Federal Register: September 22, 1994]


                                                   VOL. 59, NO. 183

                                       Thursday, September 22, 1994

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1036

[DA-94-14]

 

Milk in the Eastern Ohio-Western Pennsylvania Marketing Area; 
Revision of Cooperative Association Reserve Processing Plant Shipping 
Requirement

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This document reinstates the cooperative pool reserve 
processing plant delivery requirement of 35 percent under the Eastern 
Ohio-Western Pennsylvania Federal milk order (Order 36), as of January 
1, 1996. A reduction from 35 to 25 percent was intended to be temporary 
for the period July 1, 1993, through August 31, 1994. The current issue 
of the Code of Federal Regulations shows the percentage requirement to 
be 25 percent. The percentage of a cooperative association's member 
milk that must be delivered to pool distributing plants to qualify the 
cooperative's reserve processing plant for pooling continues to be 25 
percent until December 31, 1995, rather than 35 percent. This action is 
necessary to prevent uneconomic movements of milk for the purpose of 
pooling much of the market's supply.

EFFECTIVE DATE: The amendment of Sec. 1036.7(d), published on July 30, 
1993, and effective July 1, 1993 (58 FR 40724), will continue through 
December 31, 1995, and will expire January 1, 1996. Amendments 2 and 3 
are effective January 1, 1996.

FOR FURTHER INFORMATION CONTACT: Constance M. Brenner, Marketing 
Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room 
2971, South Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 
720-2357.

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:
    Revision of Rule: Issued July 22, 1993; published July 30, 1993 (58 
FR 40724).
    Notice of Proposed Temporary Revision: Issued June 27, 1994; 
published July 1, 1994 (59 FR 33922).
    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 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 date of the entry of the ruling.
    This revision is issued pursuant to the provisions of the 
Agricultural Marketing Agreement Act and the provisions of 
Sec. 1036.7(f) of the Eastern Ohio-Western Pennsylvania order.
    Notice of proposed rulemaking was published in the Federal Register 
(59 FR 33922) concerning a proposed relaxation of the cooperative 
association reserve processing plant shipping requirement. The revision 
was proposed to be effective for the months of September 1994 through 
December 1995. The public was afforded the opportunity to comment on 
the proposed notice by submitting written data, views and arguments by 
August 1, 1994. Three comments supporting the proposed revision were 
received. No opposing comments were received.

Statement of Consideration

    This rule continues to ease the pooling requirements for 
cooperative reserve processing plants by 10 percentage points, to 25 
percent, for the period September 1, 1994, through December 31, 1995. 
Under the revision the total minimum quantity of a cooperative 
association's milk supply that is required to be delivered to 
distributing plants in order for the cooperative's reserve supply plant 
to maintain pool status is reduced from 35 percent to 25 percent.
    In order for a cooperative association plant that does not qualify 
as a pool distributing or pool supply plant to be a pool plant, the 
Eastern Ohio-Western Pennsylvania order requires that the cooperative 
must deliver to pool distributing plants a minimum of 35 percent of the 
total quantity of milk marketed by the cooperative, either during the 
month or during the 12-month period ending with the immediately 
preceding month.
    The Eastern Ohio-Western Pennsylvania milk order provides authority 
for the Director of the Dairy Division to increase or decrease the 
required shipping percentages for cooperative reserve supply plants by 
up to 10 percentage points if such a revision is necessary to obtain 
needed shipments or to prevent uneconomic shipments.
    The revision was requested originally for the period July 1993 
through August 1994 by Milk Marketing, Inc. (MMI), a cooperative 
association that represents many of the market's producers. As printed 
in the Federal Register, the revision became effective July 1, 1993, 
with no termination date. The 1994 Code of Federal Regulations (CFR) 
reflects the revised shipping standards, and without further amendatory 
action, the 1995 CFR will also reflect the reduced 25-percent shipping 
standard.
    MMI requested continued revision of the cooperative association 
shipping requirements for the period September 1, 1994, through 
December 31, 1995, and a proposed revision was issued. Comments 
supporting the revision were received from MMI and two other 
cooperative associations with members whose milk is pooled under Order 
36. MMI, Eastern Milk Producers Cooperative Association, Inc. 
(Eastern), and Dairylea Cooperative, Inc. (Dairylea), stated that the 
revision is needed to prevent unnecessary and uneconomic movements of 
milk because of the current severe milk supply-demand imbalance in the 
Eastern Ohio-Western Pennsylvania marketing area.
    MMI's comments included a description of milk marketing conditions 
for June 1994 that show milk production for the market increased over 4 
percent from the same month of the previous year, representing 12 
million additional pounds of milk in the Order 36 pool. For the same 
month, Class I sales decreased by nearly 2.5 percent from June 1993, 
representing a reduction of approximately 3.4 million pounds of Class I 
sales. As a result of the market's increasing production and declining 
Class I use, nearly 15.5 million pounds of milk had to be used in 
manufactured products than in the same month the previous year.
    The comments filed by Eastern stated that the trends observable for 
June are expected to continue for the foreseeable future, creating 
additional pooling difficulties for cooperative handlers pooling milk 
under Order 36. Dairylea stated that continuation of the revision would 
prevent unnecessary, uneconomic movements of milk.
    According to comments filed, milk supplies historically pooled 
under the order currently are continuing to lose their markets and 
having to find new outlets for their production. Apparently, Order 36 
and nearby pool distributing and pool supply plants are releasing some 
of their milk suppliers to find their own markets for milk. Such 
institutional changes in the sources of supply for various plants may 
result in market instability and disorder.
    Milk production in the Eastern Ohio-Western Pennsylvania marketing 
area appears to be increasing while Class I use is declining. As a 
result, greater volumes of milk must be diverted to manufacturing uses 
than in prior years. The last full year before the 1990 proceeding that 
resulted in the amendments that took effect October 1, 1993, was 1989. 
During the short production months (September through November) of 
1989, the percentage of Order 36 producer milk needed for Class I use 
was over 60 percent, with less than 30 percent of the market's milk 
used in Class III. For the same period of 1992, the percentage of 
producer milk used in Class I was just 55 percent, with the Class III 
percentage increasing to nearly 36 percent. The trend continued during 
the same months of 1993, with less than 55 percent of the producer milk 
pooled during September, October and November used in Class I.
    The increased production and decline in Class I sales, coupled with 
the market's changing handler-producer relationships, necessitates a 
continuation in the reduction of the percentage of milk that must be 
delivered by a cooperative association to pool distributing plants in 
order to assure the pool status of the cooperative's member milk.
    The revision effective July 1, 1993, should continue in effect for 
a period long enough to allow the institutional shifts currently in 
process to work themselves out, and for the cooperative associations to 
assure themselves of an adequate fluid market for their producer milk. 
Therefore, the revision should remain in place through December 1995.
    After consideration of all relevant material, including the 
proposal set forth, and other available information, it is hereby found 
and determined that the diversion limitation percentage set forth in 
Sec. 1036.7(d) should be maintained at the present 25-percent level 
through December 31, 1995.

List of Subjects in 7 CFR Part 1036

    Milk marketing orders.

    For the reasons set forth in the preamble, Title 7, Part 1036, is 
amended as follows:

PART 1036--MILK IN THE EASTERN OHIO-WESTERN PENNSYLVANIA MARKETING 
AREA

    1. The authority notice for 7 CFR part 1036 continues to read as 
follows:

    Authority: Secs. 1-19, 48 Stat 31, as amended; 7 U.S.C. 601-674.


Sec. 1036.7  [Amended]

    2. Section 1036.7(d) is amended by changing the words ``25 
percent'' to ``35 percent'', effective January 1, 1996.
    3. Section 1036.7(d)(2) is amended by changing the words ``25-
percent'' to ``35 percent'', effective January 1, 1996.

    Dated: September 8, 1994.
Richard M. McKee,
Director, Dairy Division.
[FR Doc. 94-22919 Filed 9-21-94; 8:45 am]
BILLING CODE 3410-02-P