[Federal Register Volume 62, Number 94 (Thursday, May 15, 1997)]
[Rules and Regulations]
[Pages 26735-26736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12709]



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 Rules and Regulations
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  Federal Register / Vol. 62, No. 94 / Thursday, May 15, 1997 / Rules 
and Regulations  

[[Page 26735]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1131

[DA-97-01]


Milk in the Central Arizona Marketing Area; Suspension of Certain 
Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; suspension.

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SUMMARY: This document continues to suspend certain provisions of the 
Central Arizona Federal milk marketing order. The continued suspension 
eliminates the requirement that a cooperative association ship at least 
50 percent of its receipts to other handler pool plants to maintain 
pool status of a manufacturing plant operated by the cooperative. 
United Dairymen of Arizona, a cooperative association that represents 
nearly all of the producers who supply milk to the market, requested 
the suspension. The suspension is necessary to prevent uneconomical and 
inefficient movements of milk.

EFFECTIVE DATE: April 1, 1997 through March 31, 1999.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing 
Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room 
2971, South Building, P.O. Box 96456, Washington, DC 20090-6456, 
(202)720-9368, e-mail address Clifford__M__C[email protected].

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:
    Notice of Proposed Suspension: Issued February 24, 1997; published 
March 3, 1997 (62 FR 9381).
    The Department is issuing this final rule in conformance with 
Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have a 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), 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.), the Agricultural Marketing Service has considered the economic 
impact of this action on small entities and has certified that this 
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. The $500,000 per year criterion for dairy farmers 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. With respect to 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 August 1996, the milk of 102 producers was pooled 
on the Central Arizona milk order. Of these producers, 6 produced below 
the 326,000-pound production guideline and are considered as small 
businesses. Of the total number of producers whose milk was pooled 
during that month, 99 were members of United Dairymen of Arizona and 3 
were independent producers.
    For August 1996, there were 5 handlers operating pool plants under 
the Central Arizona milk order. Of these handlers, 2 are considered as 
small businesses.
    This rule proposes to suspend the requirement that a cooperative 
association ship at least 50 percent of its receipts to other handler 
pool plants to maintain pool status of a manufacturing plant operated 
by the cooperative. This rule lessens the regulatory impact of the 
order on certain milk handlers and tends to ensure that dairy farmers 
will continue to have their milk priced under the order and thereby 
receive the benefits that accrue from such pricing. This rule will not 
result in any additional regulatory burden on handlers in the Central 
Arizona marketing area since this suspension has been continually in 
effect since April 1995.

Preliminary Statement

    Notice of proposed rulemaking was published in the Federal Register 
on March 3, 1997 (62 FR 9381) concerning a proposed suspension of 
certain provisions of the order. Interested persons were afforded 
opportunity to file written data, views and arguments thereon. One 
comment opposing the proposed suspension was received from a dairy 
farmer.
    After consideration of all relevant material, including the 
proposal in the notice, the comment received, and other available 
information, it is hereby found and determined for the months of April 
1, 1997, through March 31, 1999, the following provision of the order 
does not tend to effectuate the declared policy of the Act:
    In Sec. 1131.7, paragraph (c), the words ``50 percent or more of'', 
``(including the skim milk and butterfat in fluid milk products 
transferred from its own plant pursuant to this paragraph that is not 
in

[[Page 26736]]

excess of the skim milk and butterfat contained in member producer milk 
actually received at such plant)'', and ``or the previous 12-month 
period ending with the current month''.

Statement of Consideration

    This rule continues to suspend certain provisions of the Central 
Arizona order for the months of April 1, 1997, through March 31, 1999. 
The suspension removes the requirement that a cooperative association 
that operates a manufacturing plant in the marketing area must ship at 
least 50 percent of its milk supply during the current month or the 
previous 12-month period ending with the current month to other 
handlers' pool plants to maintain the pool status of its manufacturing 
plant.
    The order permits a cooperative association's manufacturing plant, 
located in the marketing area, to be a pool plant if at least 50 
percent of the producer milk of members of the cooperative association 
is physically received at pool plants of other handlers during the 
current month or the previous 12-month period ending with the current 
month.
    Continuation of the current suspension of this shipping requirement 
was requested by United Dairymen of Arizona (UDA), a cooperative 
association that represents nearly all of the dairy farmers who supply 
the Central Arizona market. UDA states that the continued pool status 
of their manufacturing plant is threatened if the suspension is not 
continued. UDA contends that the same marketing conditions that 
warranted the suspension the last two years still exist. UDA maintains 
that members who increased their milk production to meet the projected 
demands of fluid handlers for distribution into Mexico continue to 
suffer the adverse impact of the collapse of the Mexican peso.
    The commenter opposing the continuing suspension contends that the 
expanded milk production was not for projected demands of fluid 
handlers but rather for projected cheese demand. The comment points out 
that the suspension will lower the blend price as more milk will be 
pooled with the suspension than without it.
    During each of the past two years, there has been an increase in 
total producer milk in the Central Arizona market. Meanwhile the total 
handler requirements for bulk milk deliveries have decreased. However, 
it should be noted that Class I utilization has been highly erratic 
from month-to-month. For example during the first four months of 1996 
fluid utilization on a daily average basis was up 2.6 percent, but for 
all of 1996, Class I was down 0.7 percent. The decrease in total 
handler deliveries and their erratic movements are likely a result of 
changing Class I sales by Central Arizona handlers into Mexico because 
of the devaluation of the Mexican peso. The situation has not 
stabilized adequately to assure a reliable fluid milk market for 
Central Arizona handlers.
    Pool status of UDA's manufacturing plant would be jeopardized 
absent continuation of the suspension. Without the suspension, costly 
and inefficient movements of milk would have to be made to maintain 
pool status of producers who have historically supplied the market and 
to prevent disorderly marketing in the Central Arizona marketing area.
    UDA requested that the suspension be granted for an indefinite 
period beginning in April 1997. After reviewing the marketing 
conditions of the Central Arizona marketing area and their relationship 
with the uncertain value of the Mexican peso, this suspension will be 
for a two-year period.
    Accordingly, it is appropriate to suspend the aforesaid provision 
for the months of April 1, 1997, through March 31, 1999.
    It is hereby found and determined that thirty days' notice of the 
effective date hereof is impractical, unnecessary and contrary to the 
public interest in that:
    (a) The suspension is necessary to reflect current marketing 
conditions and to assure orderly marketing conditions in the marketing 
area, and to permit the continued pooling of the milk of dairy farmers 
who have historically supplied the market without the need for making 
costly and inefficient movements of milk;
    (b) This suspension does not require of persons affected 
substantial or extensive preparation prior to the effective date; and
    (c) Notice of proposed rulemaking was given interested parties and 
they were afforded opportunity to file written data, views or arguments 
concerning this suspension.
    Therefore, good cause exists for making this order effective less 
than 30 days from the date of publication in the Federal Register.

List of Subjects in 7 CFR Part 1131

    Milk marketing orders.

    For the reasons set forth in the preamble 7 CFR Part 1131, is 
amended as follows:

PART 1131--MILK IN THE CENTRAL ARIZONA MARKETING AREA

    1. The authority citation for 7 CFR Part 1131 continues to read as 
follows:

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


Sec. 1131.7  [Suspended in part]

    2. In Sec. 1131.7(c), the words ``50 percent or more of'', 
``(including the skim milk and butterfat in fluid milk products 
transferred from its own plant pursuant to this paragraph that is not 
in excess of the skim milk and butterfat contained in member producer 
milk actually received at such plant)'', and ``or the previous 12-month 
period ending with the current month'' are suspended for the months of 
April 1, 1997, through March 31, 1999.

    Dated: May 9, 1997.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 97-12709 Filed 5-14-97; 8:45 am]
BILLING CODE 3410-02-P