[Federal Register Volume 61, Number 240 (Thursday, December 12, 1996)]
[Proposed Rules]
[Pages 65366-65367]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31563]


 ========================================================================
 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. 240 / Thursday, December 12, 1996 / 
Proposed Rules  

[[Page 65366]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1079

[DA-96-16]


Milk in the Iowa Marketing Area; Proposed Temporary Revision of 
Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed temporary revision of rule.

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SUMMARY: This document invites written comments on a proposal to 
decrease 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 
decreased by 10 percentage points from 30 percent of plant receipts to 
20 percent of such receipts for the months of December 1996 through 
March 1997. The action was requested by Beatrice Cheese, Inc., which 
contends that the action is necessary to prevent the uneconomic 
shipment of milk from its Fredericksburg, Iowa, supply plant.

DATES: Comments must be submitted on or before December 19, 1996.

ADDRESSES: Comments (two copies) should be sent to USDA/AMS/Dairy 
Division, Order Formulation Branch, Room 2971, South Building, P.O. Box 
96456, Washington, DC 20090-6456. Advance copies of such comments may 
be faxed to (202) 690-0552.

FOR FURTHER INFORMATION CONTACT: Nicholas Memoli, Marketing Specialist, 
USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South 
Building, P.O. Box 96456, Washington, DC 20090-6456 (202) 690-1932.

SUPPLEMENTARY INFORMATION: The Department is issuing this proposed rule 
in conformance with Executive Order 12866.
    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have a retroactive 
effect. If adopted, this proposed rule will not 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), 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 request 
modification or exemption from such order by filing 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. 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.

Small Business Consideration

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), as amended, the Agricultural Marketing Service has considered 
the economic impact of this action on small entities and has certified 
that this proposed rule will not have a significant economic impact on 
a substantial number of small entities. For the purpose of the 
Regulatory Flexibility Act, a dairy farm is considered 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 purposes of determining which dairy farms 
are ``small businesses,'' the $500,000 per year criterion was used to 
establish a production guideline of 326,000 pounds per month. Although 
this guideline does not factor in additional monies that may be 
received by dairy producers, it should be an inclusive standard for 
most ``small'' dairy farmers. For purposes of determining a handler's 
size, if the plant is part of a larger company operating multiple 
plants that collectively exceed the 500-employee limit, the plant will 
be considered a large business even if the local plant has fewer than 
500 employees.
    The supply plant shipping percentages proposed to be revised are 
incorporated into the order to prevent the uneconomic shipment of milk. 
This proposed action will decrease the percentage of milk receipts that 
handlers are required to move to fluid milk distributing plants. With a 
decrease in the shipping percentage, supply plant operators will not 
have to move milk uneconomically to pool distributing plants to keep 
the milk received at their plants priced under the order.
    The proposed reduction of the required supply plant shipping 
percentage for the months of December 1996 through March 1997 would 
allow the milk of producers traditionally associated with the Iowa 
market to continue to be pooled and priced under the order. The 
proposed revision would lessen the likelihood that more milk shipments 
to pool plants might be required under the order than are actually 
needed to supply the fluid milk needs of the market and would result in 
savings in hauling costs for handlers and producers.
    Interested parties are invited to submit comments on the probable 
regulatory and informational impact of this proposed rule on small 
entities. Also, parties may suggest modifications of this proposal for 
the purpose of tailoring their applicability to small businesses.

Notice of Proposed Revision and Opportunity to File Comments

    Notice is hereby given that, pursuant to the provisions of the 
Agricultural Marketing Agreement Act and the provisions of 
Sec. 1079.7(b)(1) of the order, the temporary revision of certain 
provisions of the order regulating the handling of milk in the Iowa 
marketing area is being considered for the months of December 1996 
through March 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 the publication of this notice in the Federal Register. The 
period for filing comments is limited to 7 days because a longer period 
would not provide the time

[[Page 65367]]

needed to complete the required procedures and include December 1996 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)).

Statement of Consideration

    Section 1079.7(b)(1) of the Iowa order 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 shipments of milk or to assure an adequate supply of milk 
for fluid use. Beatrice Cheese, Inc., which operates a pool supply 
plant regulated under the Iowa order, requested that the percentages be 
decreased by 10 percentage points for the months of November 1996 
through March 1997. The proponent's request states that the 
Department's October 23, 1996, shipping percentage revision increasing 
the shipping percentages from 30 percent of plant receipts to 35 
percent for the months of September through November beginning with 
October 1996, and from 20 percent to 30 percent for the months of 
December 1996 through March 1997, has caused unjust financial losses, 
and has encouraged uneconomic shipments of milk by Beatrice in attempts 
to meet Federal order requirements. Beatrice contends that it was not 
able to pool 10,500,000 lbs. of producer milk to comply with order 
requirements to the detriment of Iowa's dairy farmers.
    Additionally, Beatrice states that market conditions have changed 
drastically since the October 23, 1996, decision. Furthermore, 
according to Beatrice, the recent drop in the cheese and butter markets 
has resulted in more than an adequate supply of milk for fluid use, 
which should continue through the spring of 1997, thereby eliminating 
the need for increased shipping percentages.
    As proposed by Beatrice, the percentage of a supply plant's 
receipts that must be shipped to pool distributing plants if the supply 
plant is to be considered a pool plant would be decreased by 10 
percentage points, from 35 percent to 25 percent, for the month of 
November 1996, and from 30 percent to 20 percent for the months of 
December 1996 through March 1997. Although Beatrice's request seeks to 
revise the supply plant shipping percentage for November 1996, it is 
impractical and infeasible to include such month in this proposed 
action based on the amount of time necessary for the required 
procedures, including a comment period. Therefore, comments should be 
directed towards the proposal involving the December 1996 through March 
1997 period.
    In view of the current supply and demand relationship, it may be 
necessary to decrease the shipping percentage requirements for pool 
supply plants under Order 79 as proposed to provide for the efficient 
and economic marketing of milk during the months of December 1996 
through March 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: December 6, 1996.
Richard M. McKee,
Director, Dairy Division.
[FR Doc. 96-31563 Filed 12-11-96; 8:45 am]
BILLING CODE 3410-02-P