[Federal Register Volume 63, Number 171 (Thursday, September 3, 1998)]
[Rules and Regulations]
[Pages 46866-46868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23710]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1106

[DA-98-08]


Milk in the Southwest Plains 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 sections of the Southwest 
Plains Federal milk marketing order. The suspension removes portions of 
the supply plant shipping standard and the producer milk delivery 
requirement. The suspension, which was requested by Kraft Foods, Inc. 
(Kraft), is necessary to prevent uneconomic and inefficient movements 
of milk and to ensure that producers historically associated with the 
market will continue to have their milk pooled under the Southwest 
Plains order.


[[Page 46867]]


EFFECTIVE DATE: September 1, 1998, through August 31, 1999.

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: Prior document in this proceeding:
    Notice of Proposed Suspension: Issued August 6, 1998; published 
August 12, 1998 (63 FR 43125).
    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 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. Two of these handlers were considered small 
businesses.
    The supply plant shipping standard and the producer milk delivery 
requirement are designed to attract an adequate supply of milk to the 
market to meet fluid needs. This final rule will 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 rule will 
also suspend the requirement that producers deliver at least one day's 
production of milk to a pool distributing plant during the month before 
their milk is eligible to be diverted to nonpool plants.
    Marketing conditions in the Southwest Plains order indicate that 
there should be a sufficient amount of local milk available during the 
requested suspension period to supply the fluid needs of the market. 
Therefore, supplemental milk supplies should not be needed. Thus, 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 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 Southwest Plains marketing area.

Statement of Consideration

    This rule suspends portions of the supply plant shipping standard 
and producer milk diversion rules of the Southwest Plains order for the 
period of September 1998 through August 1999. The suspension will 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 rule also suspends the requirement that producers deliver at 
least one day's production during the month to a pool plant before 
their milk is eligible for diversion to a nonpool plant. By suspending 
this provision, producer milk will 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 producer milk available directly from producers' farms in the 
general area of distributing plants to meet the Class I needs of the 
market. The handler notes that the supply plant shipping provision and 
the producer milk delivery 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 deliver their milk to a pool 
distributing plant when their milk can more economically be diverted 
directly to manufacturing plants in the production area. Thus, the 
handler contends the suspension is necessary to prevent the uneconomic 
movements of milk and to ensure producers historically associated with 
the Order 106 market will continue to have their milk pooled under the 
order.
    A notice of proposed rulemaking was published in the Federal 
Register on August 12, 1998 (63 FR 43125), concerning the proposed 
suspension. Interested persons were afforded an opportunity to file 
written data, views and arguments thereon. One comment was received 
supporting the proposed suspension.
    Kraft filed a comment reiterating its support for the suspension. 
No comments were filed in opposition to the suspension.
    As noted by Kraft in its letter requesting the suspension, the 
supply plant shipping standard and the producer milk delivery 
requirement

[[Page 46868]]

have been suspended for a number of years. Market conditions in the 
Order 106 marketing area indicate that there should be sufficient 
amounts of milk available in the local area to meet the fluid needs of 
the order for the requested time period. Therefore, supplemental milk 
supplies should not be needed.
    Accordingly, the suspension is found to be necessary for the 
purposes of assuring that producers' milk will not have to be moved in 
an inefficient manner and to assure that producers whose milk has long 
been associated with the Southwest Plains marketing area will continue 
to benefit from pooling and pricing under the order.
    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 that for the months of 
September 1, 1998, through August 31, 1999, the following provisions of 
the order do not tend to effectuate the declared policy of the Act:
    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.
    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 the suspension was 
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 1106

    Milk marketing orders.

    For the reasons set forth in the preamble, 7 CFR part 1106 is 
amended as follows:

PART 1106--MILK IN THE SOUTHWEST PLAINS MARKETING AREA

    1. The authority citation for 7 CFR part 1106 continues to read as 
follows:

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


Sec. 1106.6  [Suspended in part]

    2. In Sec. 1106.6, the words ``during the month'' are suspended.


Sec. 1106.7  [Suspended in part]

    3. In Sec. 1106.7 paragraph (b)(1), the words beginning with ``of 
February through August'' and continuing to the end of the paragraph 
are suspended.


Sec. 1106.13  [Suspended in part]

    4. In Sec. 1106.13, paragraph (d)(1) is suspended in its entirety.

    Dated: August 27, 1998.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 98-23710 Filed 9-2-98; 8:45 am]
BILLING CODE 3410-02-P