[Federal Register Volume 62, Number 67 (Tuesday, April 8, 1997)]
[Proposed Rules]
[Pages 16737-16738]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8904]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1137

[DA-97-02]


Milk in the Eastern Colorado Marketing Area; Proposed Suspension 
or Termination of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed suspension or termination of rule.

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SUMMARY: This document invites written comments on a proposal to 
suspend indefinitely or terminate part of a provision in the Eastern 
Colorado milk order which specifies that a distributing plant disposing 
of ten percent or more of its Grade A milk receipts, or 12,000 pounds 
per day, whichever is less, as route disposition in the marketing area 
be considered a fully regulated pool plant. This request was submitted 
by Brown Swiss-Gillette Dairy, a handler operating a distributing plant 
that is partially regulated under 3 Federal milk orders. The handler 
contends that the action is necessary to assure equity among producers 
and competitiveness among handlers.

DATES: Comments must be submitted on or before May 8, 1997.

ADDRESSES: Comments (two copies) should be filed with the USDA/AMS/
Dairy Division, Order Formulation Branch, Room 2971, South Building, 
P.O. Box 96456, Washington, DC 20090-6456. Advance, unofficial copies 
of such comments may be faxed to (202) 690-0552 or e-mailed to OFB--
FMMO--C[email protected]. Reference should be given to the title of 
action and docket number.

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, e-mail address: connie m [email protected].

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

[[Page 16738]]

imposed in connection with the order is not in accordance with 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.), 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.
    For the month of January 1997, the milk of 426 producers was pooled 
on the Eastern Colorado Federal milk order. Of these producers, 323 
produced below the 326,000-pound production guideline and are 
considered as small businesses. A majority of these producers produce 
less than 100,000 pounds per month. Of the total number of producers 
whose milk was pooled during that month, 6 were non-member producers 
and 420 were members of either Mid-America Dairymen or Western Dairymen 
Cooperative Inc. For January 1997, 322 cooperative members and one non-
member producer met the small business criterion.
    For the month of January 1997, there were 10 handlers operating 11 
plants pooled or regulated under the Eastern Colorado milk order. Of 
these handlers, half have 500 or fewer employees and qualify as small 
businesses.
    Brown Swiss-Gillette Dairy (Gillette) receives its milk from Black 
Hills Milk Producers Cooperative. During the month of January 1997, 55 
of the 58 producers supplying milk to Black Hills Milk Producers 
Cooperative would be considered small businesses.
    This rule proposes to suspend or terminate part of a provision of 
the Eastern Colorado marketing order which makes a distributing plant 
disposing of ten percent or more of its Grade A receipts, or 12,000 
pounds per day, whichever is less, as route disposition in a marketing 
area a fully regulated plant. The proposal would lessen the regulatory 
impact of the order on certain milk handlers and would not affect the 
price received by dairy farmers in Eastern Colorado. Handlers in the 
marketing area will continue to pay the minimum order prices to 
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 is hereby given that, pursuant to the provisions of the 
Agricultural Marketing Agreement Act, the suspension or termination of 
the following provisions of the order regulating the handling of milk 
in the Eastern Colorado marketing area is being considered for an 
indefinite period:
    In Sec. 1137.7(a)(2), the words ``, or 12,000 pounds per day, 
whichever is less,''.
    All persons who want to submit written data, views or arguments 
about the proposed suspension or termination should send two copies of 
their views to the USDA/AMS/Dairy Division, Order Formulation Branch, 
Room 2971, South Building, P.O. Box 96456, Washington, DC 20090-6456, 
by the 30th day after publication of this notice in the Federal 
Register.
    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

    The proposed rule would terminate or suspend indefinitely the 
portion of the Eastern Colorado Federal milk order's pool distributing 
plant definition that defines a plant with 12,000 pounds of route 
disposition per day in the marketing area as a fully regulated pool 
plant.
    Pooling qualifications included in the Eastern Colorado order 
define a pool distributing plant as any plant in which during the month 
fluid milk products are processed or packaged and from which 10 percent 
or more of such receipts, or 12,000 pounds per day, whichever is less, 
are disposed of as route disposition in the marketing area.
    Gillette requested the termination or suspension of the 12,000-
pound limitation, contending that the limitation is unreasonable when 
considering the plant size which must be maintained in order for 
Gillette to survive financially and also maintain its status as a 
partially regulated plant. Gillette also states that the 12,000-pound 
limitation is unreasonable when compared to the amount of packaged 
products delivered in one truckload, which greatly exceeds this 
limitation. Gillette states that termination or suspension will assure 
equity among producers and competitiveness among handlers.
    As part of the Federal Order Reform process, all aspects of Federal 
milk marketing orders are presently undergoing review, including the 
definition of a pool plant. The Department is accepting and will 
continue to accept comments from all interested parties throughout the 
reform process regarding any modifications to order provisions. 
Therefore, Gillette's proposal requesting an indefinite suspension or 
termination should prevent Gillette from becoming fully regulated at 
least until the conclusion of the reform period.
    Accordingly, it may be appropriate to terminate or suspend 
indefinitely the aforesaid provisions.

List of Subjects in 7 CFR Part 1137

    Milk marketing orders.

    The authority citation for 7 CFR Part 1137 continues to read as 
follows:

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

    Dated: April 2, 1997.
Aggie Thompson,
Acting Director, Dairy Division.
[FR Doc. 97-8904 Filed 4-7-97; 8:45 am]
BILLING CODE 3410-02-P