[Federal Register Volume 62, Number 92 (Tuesday, May 13, 1997)]
[Proposed Rules]
[Pages 26255-26257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12502]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1126

[DA-97-06]


Milk in the Texas Marketing Area; Notice of Proposed Suspension 
of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed suspension of rule.

-----------------------------------------------------------------------

SUMMARY: This document invites written comments on a proposal that 
would continue the suspension of segments of the pool plant and 
producer milk definitions of the Texas order for a two-year period. 
Associated Milk Producers, Inc., a cooperative association that 
represents producers who supply milk to the market, has requested the 
continuation of the suspension. The cooperative asserts that 
continuation of this suspension is necessary to ensure that dairy 
farmers who have historically supplied the Texas market will continue 
to have their milk priced under the Texas order without incurring 
costly and inefficient movements of milk.

DATES: Comments are due no later than June 12, 1997.

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, (202) 720-9368.

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, e-mail address: Clifford__M__C[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 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

[[Page 26256]]

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 March 1997, the milk of 1,805 producers was pooled 
on the Texas Federal milk order. Of these producers, 1,350 producers 
were below the 326,000-pound production guideline and are considered 
small businesses. During this same period, there were 24 handlers 
operating pool plants under the Texas order. Five of these handlers 
would be considered small businesses.
    This rule proposes to continue the suspension of segments of the 
pool plant and producer milk definitions under the Texas order. This 
rule would lessen the regulatory impact of the order on certain milk 
handlers and would tend to ensure that dairy farmers would continue to 
have their milk priced under the order and thereby receive the benefits 
that accrue from such pricing.
    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.

Proposed Rule

    Notice is hereby given that, pursuant to the provisions of the Act, 
the suspension of the following provisions of the order regulating the 
handling of milk in the Texas marketing area is being considered for 
the months of August 1, 1997, through July 31, 1999:
    1. In Sec. 1126.7(d) introductory text, the words ``during the 
months of February through July'' and the words ``under paragraph (b) 
or (c) of this section''.
    2. In Sec. 1126.7(e) introductory text, the words ``and 60 percent 
or more of the producer milk of members of the cooperative association 
(excluding such milk that is received at or diverted from pool plants 
described in paragraphs (b), (c), and (d) of this section) is 
physically received during the month in the form of a bulk fluid milk 
product at pool plants described in paragraph (a) of this section 
either directly from farms or by transfer from plants of the 
cooperative association for which pool plant status under this 
paragraph has been requested''.
    3. In Sec. 1126.13(e)(1), the words ``and further, during each of 
the months of September through January not less than 15 percent of the 
milk of such dairy farmer is physically received as producer milk at a 
pool plant''.
    4. In Sec. 1126.13, paragraph (e)(2).
    5. In Sec. 1126.13(e)(3), the sentence ``The total quantity of milk 
so diverted during the month shall not exceed one-third of the producer 
milk physically received at such pool plant during the month that is 
eligible to be diverted by the plant operator;''.
    All persons who desire to submit written data, views or arguments 
about the proposed suspension should send two copies to USDA/AMS/Dairy 
Division, Order Formulation Branch, Room 2968, 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

    This action would continue the suspension of segments of the pool 
plant and producer milk definitions under the Texas order. This 
proposed suspension would be in effect from August 1997 through July 
1999. The current suspension will expire July 31, 1997. The proposed 
action would continue the suspension of: (1) The 60 percent delivery 
standard for pool plants operated by cooperatives; (2) the diversion 
limitation applicable to cooperative associations; (3) the limits on 
the amount of milk that a pool plant operator may divert to nonpool 
plants; (4) the shipping standards that must be met by supply plants to 
be pooled under the order; and (5) the individual producer performance 
standards that must be met in order for a producer's milk to be 
eligible for diversion to a nonpool plant.
    The order permits a cooperative association plant located in the 
marketing area to be a pool plant if at least 60 percent of the 
producer milk of members of the cooperative association is physically 
received at pool distributing plants during the month. In addition, a 
cooperative association may divert to nonpool plants up to one-third of 
the amount of milk that the cooperative causes to be physically 
received during the month at handlers' pool plants. The order also 
provides that the operator of a pool plant may divert to nonpool plants 
not more than one-third of the milk that is physically received during 
the month at the handler's pool plant. The proposed action would 
continue to inactivate the 60 percent delivery standard for plants 
operated by a cooperative association and remove the diversion 
limitations applicable to a cooperative association and to the operator 
of a pool plant.
    The order also provides for regulating a supply plant each month in 
which it ships a sufficient percentage of its receipts to distributing 
plants. The order provides for pooling a supply plant that ships 15 
percent of its milk receipts during August and December and 50 percent 
of its receipts during September through November and January. A supply 
plant that is pooled during each of the immediately preceding months of 
September through January is pooled under the order during the 
following months of February through July without making qualifying 
shipments to distributing plants. The requested action would continue 
the current suspension of these performance standards for supply plants 
that were regulated under the Texas order during each of the 
immediately preceding months of September through January.
    The order also specifies that the milk of each producer must be 
physically received at a pool plant in order to be eligible for 
diversion to a nonpool plant. During the months of September through 
January, 15 percent of a producer's milk must be received at a pool 
plant for diversion eligibility. The proposed action would continue to 
suspend these requirements.
    The continuation of the current suspension was requested by 
Associated Milk Producers, Inc., a cooperative association that 
represents a substantial number of dairy farmers who supply the Texas 
market. The cooperative stated that marketing conditions have not 
changed since the provisions were initially suspended and therefore 
should be continued until restructuring of the Federal order program is 
achieved as mandated in the 1996 Farm Bill.
    The cooperative states that the continuation of the current 
suspension is necessary to ensure that dairy farmers who have 
historically supplied the Texas market will continue to have their milk 
priced under the Texas order. In

[[Page 26257]]

addition they maintain that the suspension would continue to provide 
handlers the flexibility needed to move milk supplies in the most 
efficient manner and to eliminate costly and inefficient movements of 
milk that would be made solely for the purpose of pooling the milk of 
dairy farmers who have historically supplied the market.
    Accordingly, it may be appropriate to suspend the aforesaid 
provisions from August 1, 1997, through July 31, 1999.

List of Subjects in 7 CFR Part 1126

    Milk marketing orders.

    The authority citation for 7 CFR Part 1126 continues to read as 
follows:

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

    Dated: May 7, 1997.
Richard M. McKee,
Director, Dairy Division.
[FR Doc. 97-12502 Filed 5-12-97; 8:45 am]
BILLING CODE 3410-02-P