[Federal Register Volume 63, Number 155 (Wednesday, August 12, 1998)]
[Proposed Rules]
[Pages 43125-43126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21579]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1106

[DA-98-08]


Milk in the Southwest Plains Marketing Area; Proposed Suspension 
of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed suspension of rule.

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SUMMARY: This document invites written comments on a proposal to 
suspend a portion of the supply plant shipping standard and the touch-
base requirement of the Southwest Plains Federal milk marketing order 
(Order 106) for the period of September 1998 through August 1999. The 
action was requested by Kraft Foods, Inc. (Kraft), which contends the 
suspension is necessary to prevent the uneconomical and inefficient 
movement of milk and to ensure that producers historically associated 
with the market will continue to have their milk pooled under Order 
106.

DATES: Comments must be submitted on or before August 19, 1998.

ADDRESSES: Comments (two copies) should be filed with the USDA/AMS/
Dairy Programs, Order Formulation Branch, Room 2971, South Building, 
P.O. Box 96456, Washington, DC 20090-6456. 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: Nicholas Memoli, Marketing Specialist, 
USDA/AMS/Dairy Programs, Order Formulation Branch, Room 2971, South 
Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1932, e-
mail address Nicholas__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 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 June 1998, 2,187 dairy farmers were producers 
under Order 106. Of these producers, 2,138 producers (i.e., 98%) were 
considered small businesses. For the same month, 16 handlers were 
pooled under Order 106, of which, two were considered small businesses.
    The supply plant shipping standard and the touch-base requirement 
are designed to attract an adequate supply of milk to the market to 
meet fluid needs. Kraft, the proponent of this proposal, anticipates 
that there will be an adequate supply of milk available within the 
general area to meet the needs to the Order 106 market and states 
supplemental milk supplies will not be needed.
    The proposal would allow a supply plant that has been associated 
with the Southwest Plains market during the months of September 1997 
through January 1998 to qualify as a pool plant without shipping any 
milk to a pool distributing plant during the following months of 
September 1998 through August 1999. The proposed action would also 
suspend the requirement that producers touch-base at a pool 
distributing plant with at least one day of production during the month 
before their milk is eligible to be diverted to nonpool plants. Thus, 
this rule would lessen the regulatory impact of the order on certain 
milk handlers and would

[[Page 43126]]

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.
    Notice is hereby given that, pursuant to the provisions of the 
Agricultural Marketing Agreement Act, the suspension of the following 
provisions of the order regulating the handling of milk in the 
Southwest Plains marketing area is being considered for the months of 
September 1, 1998, through August 31, 1999:
    In Sec. 1106.6, the words ``during the month''.
    In Sec. 1106.7(b)(1), beginning with the words ``of February 
through August'' and continuing to the end of the paragraph.
    In Sec. 1106.13, paragraph (d)(1) in its entirety.
    All persons who want to submit written data, views or arguments 
about the proposed suspension should send two copies of their views to 
the USDA/AMS/Dairy Programs, Order Formulation Branch, Room 2971, South 
Building, P.O. Box 96456, Washington, DC 20090-6456, by the 7th day 
after publication of this notice in the Federal Register. The period 
for filing comments is limited to 7 days because a longer period would 
not provide the time needed to complete the required procedures before 
the requested suspension is to be effective.
    All written submissions made pursuant to this notice will be made 
available for public inspection in the Dairy Programs during regular 
business hours (7 CFR 1.27(b)).

Statement of Consideration

    The proposed rule would suspend a portion of the supply plant 
shipping standard and the touch-base requirement of the Southwest 
Plains order for the period of September 1998 through August 1999. The 
proposed suspension would allow a supply plant that has been associated 
with the Southwest Plains order during the months of September 1997 
through January 1998 to qualify as a pool plant without shipping any 
milk to a pool distributing plant during the months of September 1998 
through August 1999. Without the suspension, a supply plant would be 
required to ship 50 percent of its producer receipts to pool 
distributing plants during the months of September through January and 
20 percent of its producer receipts to pool distributing plants during 
the months of February through August to qualify as a pool plant under 
the order.
    The proposed rule would also suspend the requirement that producers 
``touch-base'' at a pool plant with at least one day's production 
during the month before their milk is eligible for diversion to a 
nonpool plant. By suspending the touch-base provision, producer milk 
would not be required to be delivered to pool plants before going to 
unregulated manufacturing plants.
    According to Kraft's letter requesting the suspension, supplemental 
milk supplies will not be needed to meet the fluid needs of 
distributing plants. Kraft anticipates that there will be an adequate 
supply of direct-ship producer milk located in the general area of 
distributing plants available to meet the Class I needs of the market. 
The handler notes that the supply plant shipping provision and the 
touch-base requirement have been suspended since 1993 and 1992, 
respectively.
    Kraft states there is no need to require producers located some 
distance from pool distributing plants to touch-base when their milk 
can more economically be diverted directly to manufacturing plants in 
the production area. Thus, the handler contends the proposed suspension 
is necessary to prevent the uneconomical and inefficient movement of 
milk and to ensure producers historically associated with the Order 106 
will continue to have their milk pooled under the order.
    Accordingly, it may be appropriate to suspend the aforesaid 
provisions from September 1, 1998 through August 31, 1999.

List of Subjects in 7 CFR Part 1106

    Milk marketing orders.
    The authority citation for 7 CFR Part 1106 continues to read as 
follows:

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

    Dated: August 6, 1998.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 98-21579 Filed 8-11-98; 8:45 am]
BILLING CODE 3410-02-P