[Federal Register Volume 60, Number 107 (Monday, June 5, 1995)]
[Rules and Regulations]
[Pages 29465-29467]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13688]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 107 / Monday, June 5, 1995 / Rules 
and Regulations  

[[Page 29465]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1099

[Docket No. AO-183-A47; DA-92-11]


Milk in the Paducah, Kentucky, Marketing Area; Order Amending the 
Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends the Paducah, Kentucky, Federal milk 
order based on final decisions issued by the Acting Assistant Secretary 
on December 2, 1994 (59 FR 64524) and on January 27, 1995 (60 FR 7290). 
The amendments to the order provide a new formula to price Class II 
milk and implement the base month Minnesota-Wisconsin (M-W) price 
updated with a butter/powder/cheese formula as the replacement for the 
M-W price series.

EFFECTIVE DATE: June 5, 1995.

FOR FURTHER INFORMATION CONTACT: John F. Borovies, Chief, Order 
Formulation Branch, USDA/AMS/Dairy Division, Room 2968, South Building, 
P.O. Box 96456, Washington, D.C. 20090-6456, (202) 720-6274.

SUPPLEMENTARY INFORMATION: This administrative rule 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 amended order will promote more orderly marketing of milk by 
producers and regulated handlers.
    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. This action is not intended to have 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) (the 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 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 
his or her 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.
    Prior documents in this proceeding:
    Notice of Hearing (M-W price): Issued May 12, 1992; published May 
15, 1992 (57 FR 20790).
    Notice of Hearing (Class II price): Issued December 14, 1993; 
published December 21, 1993 (58 FR 67380).
    Recommended Decision (M-W price): Issued August 3, 1994; published 
August 8, 1994 (59 FR 40418).
    Recommended Decision (Class II price): Issued August 22, 1994; 
published August 26, 1994 (59 FR 44074).
    Final Decision (Class II price): Issued December 2, 1994; published 
December 14, 1994 (59 FR 64524).
    Final Rule (Class II price): Issued January 27, 1995; published 
February 2, 1995 (60 FR 6606).
    Final Decision (M-W price): Issued January 27, 1995; published 
February 7, 1995 (60 FR 7290).
    Proposed Termination of Order: Issued March 3, 1995; published 
March 9, 1995 (60 FR 12907).
    Extension of Time for Filing Comments on Proposed Termination of 
Order: Issued March 27, 1995; published March 31, 1995 (60 FR 16589).
    Final Rule (M-W price): Issued April 6, 1995; published April 14, 
1995 (60 FR 18952).
    Referendum Order: Issued May 8, 1995; published May 12, 1995 (60 FR 
25628).

Findings and Determinations

    The proceeding on the proposed termination of the Paducah, 
Kentucky, milk marketing order, issued March 3, 1995 (60 FR 12907), is 
hereby terminated.
    When producer approval of the order, as proposed to be amended, was 
not indicated in a referendum conducted in the Class II proceeding, 
comments were sought concerning possible termination of the order. The 
number of comments received from producers indicated that there was 
support for the order and provided a sufficient basis for conducting 
another referendum. Thus, another referendum was conducted to determine 
if producers approved of the order as amended by the Class II 
proceeding and by the M-W proceeding. The order, as proposed to be 
amended, was subsequently approved. Therefore, it is appropriate at 
this time to terminate the proposed termination proceeding issued March 
3, 1995, and to proceed to amend the order as approved by producers.
    The following findings and determinations hereinafter set forth 
supplement those that were made when the Paducah, Kentucky, order was 
first issued and when it was 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 
aforesaid order:
    (a) Findings upon the basis of the hearing records. Pursuant to the 
provisions of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), and the applicable rules of practice and 
procedure governing the formulation of marketing agreements and 
marketing orders (7 CFR Part 900), public hearings were held upon 
certain proposed amendments to the tentative marketing agreements and 
to the orders regulating the handling of [[Page 29466]] milk in all 
Federal milk order marketing areas.
    Upon the basis of the evidence introduced at such hearings and the 
records thereof, it is found that:
    (1) The Paducah, Kentucky, order 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 marketing area, and the minimum 
prices specified in the order, 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 order, as hereby amended, regulates the handling of 
milk in the same manner as, and is applicable only to persons in the 
respective classes of industrial and commercial activity specified in, 
marketing agreements upon which a hearing has been held.
    (b) Additional findings. It is necessary in the public interest to 
make this order amending the Paducah, Kentucky, order effective June 5, 
1995. Any delay beyond that date would disrupt the orderly marketing of 
milk in the marketing area because there would be no pricing 
constituent available to use to establish minimum prices of milk.
    The provisions of this order are known to handlers. The final 
decisions of the Acting Assistant Secretary containing proposed 
amendments to the order were issued on December 2, 1994, and January 
27, 1995, and were published in the Federal Register on December 14, 
1994 (59 FR 64524), and February 7, 1995 (60 FR 7290), respectively.
    The changes effected by this order will not require extensive 
preparation or substantial alteration in method of operation for 
handlers. In view of the foregoing, it is hereby found and determined 
that good cause exists for making this order amending the Paducah, 
Kentucky, order effective June 5, 1995, and that it would be contrary 
to the public interest to delay the effective date of this order for 30 
days after its publication in the Federal Register. (Sec. 553(d), 
Administrative Procedure Act, 5 U.S.C. 551-559.)
    (c) 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 marketing area 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 order is the only 
practical means pursuant to the declared policy of the Act of advancing 
the interests of producers as defined in the order as hereby amended; 
and
    (3) The issuance of the order amending the order is approved or 
favored by producers of at least two-thirds of the milk produced for 
sale in the marketing area who participated in a referendum and who 
during the determined representative period were engaged in the 
production of milk for sale in the marketing area.

List of Subjects in 7 CFR Part 1099

    Milk marketing orders.

Order Relative to Handling
    It is therefore ordered, that on and after June 5, 1995, the 
handling of milk in the Paducah, Kentucky, marketing area shall be in 
conformity to and in compliance with the terms and conditions of the 
order, as amended, and as hereby further amended, as follows:

PART 1099--MILK IN THE PADUCAH, KENTUCKY, MARKETING AREA

    1. The authority citation for 7 CFR Part 1099 continues to read as 
follows:

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

    2. Section 1099.20 is removed.
    3. Section 1099.50 is amended by revising paragraph (b) to read as 
follows:


Sec. 1099.50  Class prices.

* * * * *
    (b) Class II price. The Class II price shall be the basic formula 
price for the second preceding month plus $0.30.
* * * * *
    4. Section 1099.51 is revised to read as follows:


Sec. 1099.51  Basic formula price.

    The basic formula price shall be the preceding month's average pay 
price for manufacturing grade milk in Minnesota and Wisconsin using the 
``base month'' series, as reported by the Department, adjusted to a 3.5 
percent butterfat basis using the butterfat differential for the 
preceding month computed pursuant to Sec. 1099.74 and rounded to the 
nearest cent, plus or minus the change in gross value yielded by the 
butter-nonfat dry milk and Cheddar cheese product price formula 
computed pursuant to paragraphs (a) through (e) of this section.
    (a) The gross values of per hundredweight of milk used to 
manufacture butter-nonfat dry milk and Cheddar cheese shall be 
computed, using price data determined pursuant to paragraph (b) of this 
section and annual yield factors, for the preceding month and 
separately for the current month as follows:
    (1) The gross value of milk used to manufacture butter-nonfat dry 
milk shall be the sum of the following computations:
    (i) Multiply the Grade AA butter price by 4.27;
    (ii) Multiply the nonfat dry milk price by 8.07; and
    (iii) Multiply the dry buttermilk price by 0.42.
    (2) The gross value of milk used to manufacture Cheddar cheese 
shall be the sum of the following computations:
    (i) Multiply the Cheddar cheese price by 9.87; and
    (ii) Multiply the Grade A butter price by 0.238.
    (b) The following product prices shall be used pursuant to 
paragraph (a) of this section:
    (1) Grade AA butter price. Grade AA butter price means the simple 
average for the month of the Chicago Mercantile Exchange, Grade AA 
butter price, as reported by the Department.
    (2) Nonfat dry milk price. Nonfat dry milk price means the simple 
average for the month of the Western Nonfat Dry Milk Low/Medium Heat 
price, as reported by the Department.
    (3) Dry buttermilk price. Dry buttermilk price means the simple 
average for the month of the Western Dry Buttermilk price, as reported 
by the Department.
    (4) Cheddar cheese price. Cheddar cheese price means the simple 
average for the month of the National Cheese Exchange 40-pound block 
Cheddar cheese price, as reported by the Department.
    (5) Grade A butter price. Grade A butter price means the simple 
average for the month of the Chicago Mercantile Exchange Grade A butter 
price, as reported by the Department.
    (c) Determine the amounts by which the gross value per 
hundredweight of milk used to manufacture butter-nonfat dry milk and 
the gross value per hundredweight of milk used to manufacture Cheddar 
cheese for the current month exceed or are less than the respective 
gross values for the preceding month.
    (d) Compute weighting factors to be applied to the changes in gross 
values determined pursuant to paragraph (c) 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 
[[Page 29467]] paragraphs (d)(1) and (d)(2) of this section:
    (1) Combine the total nonfat dry milk production for the States of 
Minnesota and Wisconsin, as reported by the Department, for the most 
recent preceding period, and divide by the annual yield factor for 
nonfat dry milk, 8.07, to determine the quantity (in hundredweights) of 
milk used in the production of butter-nonfat dry milk; and
    (2) Combine the total American cheese production for the States of 
Minnesota and Wisconsin, as reported by the Department, for the most 
recent preceding period, and divide by the annual yield factor for 
Cheddar cheese, 9.87, to determine the quantity (in hundredweights) of 
milk used in the production of American cheese.
    (e) Compute a weighted average of the changes in gross values per 
hundredweight of milk determined pursuant to paragraph (c) of this 
section in accordance with the relative proportions of milk determined 
pursuant to paragraph (d) of this section.
    5. Section 1099.51a is removed.
    6. Section 1099.53 is revised to read as follows:


Sec. 1099.53  Announcement of class prices.

    The market administrator shall announce publicly on or before the 
fifth day of each month the Class I price and the Class II price for 
the following month, and the Class III and Class III-A prices for the 
preceding month.
    7. Section 1099.74 is revised to read as follows:


Sec. 1099.74  Butterfat differential.

    For milk containing more or less than 3.5 percent butterfat, the 
uniform price shall be increased or decreased, respectively, for each 
one-tenth percent butterfat variation from 3.5 percent by a butterfat 
differential, rounded to the nearest one-tenth cent, which shall be 
0.138 times the current month's butter price less 0.0028 times the 
preceding month's average pay price per hundredweight, at test, for 
manufacturing grade milk in Minnesota and Wisconsin, using the ``base 
month'' series, adjusted pursuant to Sec. 1099.51 (a) through (e), as 
reported by the Department. The butter price means the simple average 
for the month of the Chicago Mercantile Exchange, Grade A butter price 
as reported by the Department.

    Dated: May 31, 1995.
Patricia Jensen,
Acting Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 95-13688 Filed 6-2-95; 8:45 am]
BILLING CODE 3410-02-P