[Federal Register Volume 62, Number 187 (Friday, September 26, 1997)]
[Rules and Regulations]
[Pages 50484-50486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25620]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1138
[DA-97-07]
Milk in the New Mexico-West Texas 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 suspends certain provisions of the pool plant
and producer milk definitions of the New Mexico-West Texas Federal milk
marketing order for a two-year period. Associated Milk Producers, Inc.
(AMPI), a cooperative association that represents a majority of the
producers who supply milk to the market, requested continuation of the
current suspension which would limit the pooling of diverted milk.
Continuation of the suspension currently in effect is necessary to
ensure that dairy farmers who have historically supplied the market
will continue to have their milk priced under the New Mexico-West Texas
order without incurring costly and inefficient movements of milk.
EFFECTIVE DATE: October 1, 1997, through September 30, 1999.
FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing
Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room
2971, South Building, PO 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 May 7, 1997; published May
13, 1997 (62 FR 26257).
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. 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 174 producers was pooled
on the New Mexico-West Texas Federal milk order. Of these producers, 26
producers were below the 326,000-pound production guideline and are
considered small businesses. During this same period, there were 19
handlers operating pool plants under the New Mexico-West Texas order.
Twelve of these handlers would be considered small businesses.
The suspension continues the current suspension of segments of the
pool plant and producer milk definitions under the New Mexico-West
Texas order. The continued suspension will allow more pooling of
diverted milk. This rule lessens the regulatory impact of the order on
certain milk handlers and tends to ensure that dairy farmers continue
to have their milk priced under the order and thereby receive the
benefits that accrue from such pricing.
Preliminary Statement
This order of suspension is issued pursuant to the provisions of
the Agricultural Marketing Agreement Act and of the order regulating
the handling of milk in the New Mexico-West Texas marketing area.
Notice of proposed rulemaking was published in the Federal Register
on May 13, 1997 (62 FR 26257) concerning a proposed suspension of
certain
[[Page 50485]]
provisions of the order. Interested persons were afforded opportunity
to file written data, views and arguments thereon. One comment
supporting and one comment opposing the proposed suspension were
received.
After consideration of all relevant material, including the
proposal in the notice, the comments received, and other available
information, it is hereby found and determined that for the months of
October 1, 1997, through September 30, 1999, the following provisions
of the order do not tend to effectuate the declared policy of the Act:
1. In Sec. 1138.7, paragraph (a)(1), the words ``including producer
milk diverted from the plant,'';
2. In Sec. 1138.7, paragraph (c), the words ``35 percent or more of
the producer''; and
3. In Sec. 1138.13(d), paragraphs (1), (2), and (5).
Statement of Consideration
This rule continues the suspension of segments of the pool plant
and producer milk definitions under the New Mexico-West Texas order.
The provisions that are suspended limit the pooling of diverted milk.
This suspension will be effective from October 1997 through September
1999. The current suspension will expire September 30, 1997.
This rule continues the suspension of:
1. The requirement that milk diverted to a nonpool plant be
considered a receipt at the distributing plant from which it was
diverted;
2. The requirement that a cooperative association must deliver at
least 35 percent of its milk to pool distributing plants in order to
pool a plant that the cooperative operates which is located in the
marketing area and is neither a distributing plant nor a supply plant;
3. The requirement that a producer must deliver one day's
production to a pool plant during the months of September through
January to be eligible to be diverted to a nonpool plant;
4. The provision that limits a cooperative's diversions to nonpool
plants to an amount equal to the milk it caused to be delivered to, and
physically received at, pool plants during the month; and
5. The provision that excludes from the pool, milk diverted from a
pool plant to the extent that it would cause the plant to lose its
status as a pool plant.
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 New Mexico-West
Texas market. The cooperative stated that marketing conditions have not
changed since the provisions were suspended in 1995 and therefore
should be continued until restructuring of the Federal order program is
achieved as mandated in the 1996 Farm Bill.
A comment in support of the continuation of the suspension was
filed by Associated Milk Producers, Inc. and Mid-America Dairymen,
Inc., two cooperative associations representing producers whose milk is
pooled on Order 138. The cooperative associations state that the
continued suspension is necessary to balance markets in the Texas and
New Mexico milksheds and to allow producers in the area to participate
in the Federal order program.
Select Milk Producers, Inc. (Select), a dairy cooperative located
in New Mexico representing producers that account for approximately
one-third of the milk that has been historically associated with the
New Mexico-West Texas Marketing area, submitted a comment in opposition
to the continued suspension. The cooperative states that current
marketing conditions do not warrant the suspension of segments of
performance standard provisions in the marketing area. According to the
commentor, pooling standards that are loose or non-existent permit
abusive pool shifting to occur and may result in the inefficient and
uneconomical movement of milk supplies.
The cooperative association opposes the suspension of the portion
of the pool plant provision which would exclude producer milk
diversions for purposes of pool plant qualification. According to
Select, without such a standard there is an unlimited amount of milk
that can be attached to the order and diverted.
Select states that instead of suspending the pooling qualifications
altogether as proposed by AMPI, the Secretary should utilize his
authority to alter the shipping requirement by up to 10 percentage
points as specified in Order 138. A reduced shipping requirement,
according to Select, would permit qualification of milk in the order
without eliminating the provision entirely.
The cooperative also states that the ``touch-base'' provision
included in the New Mexico-West Texas order should not be suspended
entirely, but that a minimum touch-base requirement should be
maintained to ensure that loose shipping requirements are not abused.
Furthermore, Select states that the proponent fails to identify the
amount of milk that may be depooled if the standard limiting the total
quantity of milk diverted by a cooperative association is not
suspended.
During the past two years, milk production in this region has
increased while Class I utilization has decreased. Thus, a return to
the pooling standards of the order would likely result in milk
movements solely for pooling requirements and/or some milk being
depooled. The continuation of the suspension is found to be necessary
for the purpose of assuring that producers' milk will not have to be
moved in an uneconomic and inefficient manner to assure that producers
whose milk has long been associated with the New Mexico-West Texas
marketing area will continue to benefit from pooling and pricing under
the order.
Accordingly, it is appropriate to suspend the aforesaid provisions
beginning October 1, 1997, through September 30, 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, in that such rule is necessary 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. One comment supporting and one comment
opposing the continued suspension were received.
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 1138
Milk marketing orders.
For the reasons set forth in the preamble, 7 CFR part 1138 is
amended as follows:
PART 1138--MILK IN THE NEW MEXICO-WEST TEXAS MARKETING AREA
1. The authority citation for 7 CFR Part 1138 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
[[Page 50486]]
Sec. 1138.7 [Suspended in part]
2. In Sec. 1138.7, paragraph (a)(1), the words ``including producer
milk diverted from the plant,'' are suspended;
3. In Sec. 1138.7, paragraph (c), the words ``35 percent or more of
the producer'' are suspended; and
Sec. 1138.13 [Suspended in part]
4. In Sec. 1138.13, paragraphs (d) (1), (2), and (5) are suspended.
Dated: September 22, 1997.
Lon Hatamiya,
Administrator, Agricultural Marketing Service.
[FR Doc. 97-25620 Filed 9-25-97; 8:45 am]
BILLING CODE 3410-02-P