[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