[Federal Register Volume 61, Number 172 (Wednesday, September 4, 1996)]
[Proposed Rules]
[Pages 46571-46572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22452]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 61, No. 172 / Wednesday, September 4, 1996 / 
Proposed Rules  

[[Page 46571]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1079

[DA-96-11]


Milk in the Iowa Marketing Area; Notice of Proposed Revision of 
Pool Supply Plant Shipping Percentage

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This notice invites written comments on a proposal to increase 
the percentage of a supply plant's receipts that must be delivered to 
fluid milk plants to qualify a supply plant for pooling under the Iowa 
Federal milk order. The applicable percentage would be increased by 10 
percentage points, from 35 percent to 45 percent for the months of 
September through November 1996, and from 20 percent to 30 percent for 
the months of December 1996 through March 1997. The action is requested 
by Anderson-Erickson Dairy Company of Des Moines, Iowa, a proprietary 
distributing plant that is regulated under the order. Proponent 
contends that the action is needed to obtain an adequate supply of milk 
for fluid use.

DATES: Comments are due no later than September 11, 1996.

ADDRESSES: Comments (two copies) should be sent to USDA/AMS/Dairy 
Division, Order Formulation Branch, Room 2968, South Building, P.O. Box 
96456, Washington, DC 20090-6456.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing 
Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room 
2968, South Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 
720-9368.

SUPPLEMENTARY INFORMATION: 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 Agricultural 
Marketing Service has certified that this action would not have a 
significant economic impact on a substantial number of small entities. 
Such action would tend to ensure that an adequate supply of fluid milk 
is available to consumers in the marketing area.
    The Department is issuing this proposed rule in conformance with 
Executive Order 12866.
    This proposed revision of rules has been reviewed under Executive 
Order 12988, Civil Justice Reform. This action is not intended to have 
retroactive effect. If adopted, this proposed action 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 request a modification of an order or to be 
exempted from the order. A handler is afforded the opportunity for a 
hearing on the petition. After a hearing the Secretary would rule on 
the petition. The Act provides that the district court of the United 
States in any district in which the handler is an inhabitant, or has 
its principal place of business, has jurisdiction in equity to review 
the Secretary's ruling on the petition, provided a bill in equity is 
filed not later than 20 days after date of the entry of the ruling.
    Notice is hereby given that, pursuant to the provisions of the 
Agricultural Marketing Agreement Act of 1937 and the provisions of 
Sec. 1079.7(b)(1) of the order, the revision of certain provisions of 
the order regulating the handling of milk in the Iowa marketing area is 
being considered for the months of September 1, 1996 through March 31, 
1997.
    All persons who desire to submit written data, views or arguments 
about the proposed revision should send two copies of their views to 
USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South 
Building, P.O. Box 96456, Washington, DC 20090-6456 by the 7th day 
after publication of this notice in the Federal Register. The filing 
period is limited to seven days because a longer period would not 
provide the time needed to complete the required procedures and include 
September in the temporary revision period.
    All written submissions made pursuant to this notice will be made 
available for public inspection in the Dairy Division during regular 
business hours (7 CFR 1.27(b)).

Small Business Consideration

    Actions under the Federal milk order program are subject to the 
Regulatory Flexibility Act (Pub. L. 96-354). This Act seeks to ensure 
that, within the statutory authority of a program, the regulatory and 
informational requirements are tailored to the size and nature of small 
businesses. For the purpose of the Act, a dairy farm is a ``small 
business'' if it has an annual gross revenue of less than $500,000, and 
a dairy products manufacturer is a ``small business'' if it has fewer 
than 500 employees. For the purpose of determining which dairy farms 
are ``small businesses'', the $500,000 per year criterion was divided 
by 12, then by the uniform price, to arrive at a 300,000 pounds-per-
month limit for ``small'' dairy farmers.
    The supply plant shipping percentage provisions proposed to be 
revised are incorporated in the order to assure an adequate supply of 
milk for the fluid market. It is expected that producers and their 
handlers who share in the benefits of the higher-valued fluid uses of 
the market through their participation in a marketwide pool should be 
required to help supply milk to fluid milk distributing plants when 
additional supplies are needed. As a result of this expectation, order 
provisions based on testimony and data presented at a public hearing in 
which all interested parties were encouraged to participate were 
promulgated and approved by at least two-thirds of the dairy farmers 
whose milk was pooled under the Iowa order.
    The Iowa order provides that the pool supply plant shipping 
percentages in the order may be increased or reduced by the Director of 
the Dairy Division, Agricultural Marketing Service, to assure that an 
adequate supply of milk will be made available to distributing plants, 
or to avoid excessive costs of

[[Page 46572]]

hauling and handling milk that may be moved to distributing plants only 
to pool plentiful supplies of producer milk.
    For the month of June 1996, 2,896 dairy farmers were producers 
under the Iowa milk order. Of these, all but 24 would be considered 
small businesses, having under 300,000 pounds of production for the 
month. Of the dairy farmers in the small business category, 2,312 
produced under 100,000 pounds of milk, 515 produced between 100,000 and 
200,000 pounds, and 45 produced between 200,000 and 300,000 pounds of 
milk during June.
    The reports filed on behalf of the slightly more than 20 milk 
handlers pooled, or regulated, under the Iowa order in June 1996 were 
filed for individual establishments that, for the most part, would meet 
the SBA definition of a small business, having less than 500 employees. 
However, most of these establishments are part of larger businesses 
that operate multiple plants, and meet the definition of large entities 
on that basis.
    The proposed revision would increase the percentage of milk 
receipts that handlers are required to move to fluid milk distributing 
plants. If the shipping percentages are revised, some handlers may 
choose to move increased volumes of their milk supplies from 
manufacturing uses to fluid use in order to assure that all of their 
producer milk supplies will be able to share in the benefits of the 
marketwide pool. Some handlers may elect to not pool some of their 
producer milk supplies rather than ship more milk to distributing 
plants. Others may already be moving as much as they would be required 
to move under increased percentages, and would be unaffected by the 
proposed revision.
    If the shipping percentages are not increased the distributing 
plant operator requesting the revision, who would be described as a 
large entity on the basis of its multiple plant operations, may not be 
able to obtain an adequate supply of milk at a competitive price to 
meet its needs. The handlers from whom the distributing plant handler 
would be most likely to receive increased shipments are also, for the 
most part, large entities.
    Interested parties are invited to submit comments on the probable 
regulatory and informational impact of this proposed rule on small 
businesses. Also, parties may suggest modifications of this proposal 
for the purpose of tailoring their applicability to small businesses.

Statement of Consideration

    The provision proposed for revision is the percentage of a supply 
plant's receipts required to be shipped to pool distributing plants 
pursuant to Sec. 1079.7(b) of the Iowa Federal milk order (Order 79). 
As proposed, the percentage of a supply plant's receipts that must be 
shipped to pool distributing plants (fluid milk plants) if the supply 
plant is to be considered a pool plant would be increased by the 
maximum allowable 10 percentage points, from 35 percent to 45 percent 
for the period September 1, 1996, through November 30, 1996, and from 
20 percent to 30 percent for the period December 1, 1996, through March 
31, 1997.
    Section 1079.7(b)(1) allows the Director of the Dairy Division to 
reduce or increase a pool supply plant's minimum shipping requirement 
by up to 10 percentage points to prevent uneconomic milk shipments or 
to assure an adequate supply of milk for fluid use.
    Anderson-Erickson Dairy Company (A-E), a fluid milk processing 
plant that is a pool distributing plant under Order 79, requested that 
the shipping percentage be increased. The handler's request states that 
it is unable to obtain a supply of milk at the present market price, 
leaving A-E short of its needs for fluid milk. A-E cites difficulty in 
attracting milk for high-valued bottling use, which requires drawing 
milk away from lower-valued uses of milk such as nonfat dry milk and 
cheese that may be more remunerative to processors.
    In view of the foregoing, it may be appropriate to increase the 
shipping percentage requirements for pool supply plants as proposed to 
provide for the efficient and economic marketing of milk during the 
months of September 1, 1996, through March 31, 1997.

List of Subjects in 7 CFR Part 1079

    Milk marketing orders.

    The authority citation for 7 CFR Part 1079 continues to read as 
follows:

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

    Dated: August 26, 1996.
Richard M. McKee,
Director, Dairy Division.
[FR Doc. 96-22452 Filed 9-3-96; 8:45 am]
BILLING CODE 3410-02-P