[Federal Register Volume 63, Number 246 (Wednesday, December 23, 1998)]
[Rules and Regulations]
[Pages 70994-70996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33932]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1065

[Docket No. DA-98-11]


Milk in the Nebraska-Western Iowa Marketing Area; Termination of 
Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule terminates the advertising and promotion provisions 
of the Nebraska-Western Iowa Federal milk order (Order 65) with respect 
to milk marketed on or after December 1, 1998. Termination of the 
provisions was requested by Dairy Farmers of America and North Central 
Associated Milk Producers, Inc., two associations of dairy farmers who 
represent approximately 90 percent of the producers whose milk is 
pooled under the order. Since a majority of the producers on the market 
request the removal of the advertising and promotion provisions from 
the order, the program should be terminated.

EFFECTIVE DATES: The effective date for Secs. 1065.73(a)(2)(viii), 
1065.107 and 1065.121(a) is December 1, 1998. The effective date for 
Secs. 1065.105 through 1065.122 is March 31, 1999.

FOR FURTHER INFORMATION CONTACT: Constance M. Brenner, Marketing 
Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room 
2971, South Building, P.O. Box 96456, Washington, DC 20090-6456 (202) 
720-2357, e-mail address Connie__M__B[email protected].

SUPPLEMENTARY INFORMATION: The Department is issuing this rule in 
conformance with Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule terminates assessments for the 
Nebraska-Western Iowa milk order advertising and promotion program on 
milk marketed on and after December 1, 1998. 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.
    Six milk handlers operating 4 pool distributing and 3 pool supply 
plants are regulated under the Nebraska-

[[Page 70995]]

Western Iowa milk order, and the milk of 1,111 dairy farmers (559 of 
whom are located in Nebraska) is pooled under the order. This rule 
would terminate the advertising and promotion program provisions of the 
Nebraska-Western Iowa order (7 CFR Part 1065, Secs. 1065.105 through 
1065.122 and a reference to Sec. 1065.107 in Sec. 1065.73(a)(2)(viii)) 
and the 10-cent per hundredweight assessment for the purpose of 
operating the program on producer milk pooled under the order. However, 
the total amount of assessments deducted from dairy farmer returns for 
advertising and promotion should not be affected by this rule.
    The Dairy and Tobacco Adjustment Act of 1983 (7 U.S.C. 4501 et 
seq.) requires that a national assessment of 15 cents per hundredweight 
be deducted from payments to all dairy farmers for milk marketed, with 
up to 10 cents of that deduction able to be designated to go to 
research and promotion programs designated under that Act as 
``Qualified State or regional programs.'' The remaining 5-cent portion 
of the national assessment is directed to go to the National Dairy 
Promotion and Research Board (the Board). The 10-cent assessment under 
the qualified Order 65 program totaled $118,515.94 for September 1998, 
with $14,430.90 of that amount paid for Minnesota and South Dakota-
produced milk pooled under Order 65 to the Minnesota and South Dakota 
qualified State promotion and research programs.
    Upon termination of the Order 65 advertising and promotion program 
provisions, a new statutorily-required Nebraska State program (which 
also will be a qualified program) will begin to receive the 10-cent 
portion of the 15-cent assessment for producers located within the 
State of Nebraska. Producers located within the States of Iowa, 
Missouri, Kansas and Colorado whose milk is pooled under Order 65 will 
be able to designate these or other qualified programs to receive the 
10-cent portion of their national assessment, or that portion will be 
sent to the Board in addition to the required 5-cent assessment.
    The Order 65 Advertising and Promotion Program is set up as a 
voluntary program, with producers able to request refunds of 
assessments. However, the 1983 Dairy and Tobacco Adjustment Act 
requires that the entire assessment for promotion and research be 
directed either to the Board or to qualified programs, effectively 
eliminating the ability of any of the assessment to be refunded to 
dairy farmers. Therefore, this termination will not change the amount 
of assessments paid by dairy farmers for promotion and research 
activities, but will eliminate the Order 65 advertising and promotion 
agency.
    The regulatory impact of the Federal order on milk handlers would 
be reduced because the order would no longer require advertising and 
promotion assessments to be sent to the Nebraska-Western Iowa 
advertising and promotion agency. However, handlers still would be 
required to remit producer assessments to the qualified program 
established by Nebraska statute and the National Dairy Promotion and 
Research Board (for the 559 Order 65 dairy farmers located in 
Nebraska), or to other qualified programs and the National Dairy 
Promotion and Research Board (for the 552 dairy farmers located outside 
Nebraska whose milk is pooled under Order 65).
    This order of termination is issued pursuant to the provisions of 
the Agricultural Marketing Agreement Act (7 U.S.C. 601-674) and of the 
order regulating the handling of milk in the Nebraska-Western Iowa 
marketing area (7 CFR Part 1065).

Statement of Consideration

    The termination, requested by Dairy Farmers of America and North 
Central Associated Milk Producers, Inc., associations of dairy farmers 
whose milk is pooled on the Nebraska-Western Iowa Federal milk order, 
will eliminate the advertising and promotion provisions of that order. 
This action terminates funding for the program with respect to milk 
marketed on and after December 1, 1998. The other provisions of the 
program are terminated effective March 31, 1999. Such timing will 
facilitate the orderly termination of the program's activities funded 
with monies collected on milk marketed prior to December 1, 1998, and 
will give the market administrator the time needed to complete audit 
verification work and any other duties related to liquidation of the 
program.
    The Order 65 Advertising and Promotion Program requires a 10-cent 
per hundredweight assessment on producer milk pooled under the order 
for the purpose of operating the program.
    In addition, the Dairy and Tobacco Adjustment Act of 1983 (7 U.S.C. 
4501 et seq.) requires that a national assessment of 15 cents per 
hundredweight be deducted from payments to all dairy farmers for milk 
marketed, with up to 10 cents of that deduction able to be designated 
to go to a qualified State or regional dairy product promotion, 
research or nutrition education program, such as the voluntary 
``Qualified State or regional program'' administered through the 
Nebraska-Western Iowa order. The remaining 5-cent portion of the 
national assessment is directed to go to the National Dairy Promotion 
and Research Board (the Board). The 10-cent assessment under the 
qualified Order 65 program totaled $118,515.94 for September 1998, with 
$14,430.90 of that amount paid for Minnesota and South Dakota-produced 
milk pooled under Order 65 to the Minnesota and South Dakota qualified 
State promotion and research programs.
    The State of Nebraska has enacted a state law (Nebraska State 
Statute 2-3958) requiring the 10-cent portion of the 15-cent deduction 
for milk produced in Nebraska to be sent to the State of Nebraska for 
disbursement to qualified programs that request funds. The new Nebraska 
law is ready to take effect. However, a proviso included in the law 
states that the Nebraska fund cannot begin operation until the 
Nebraska-Western Iowa Federal order advertising and promotion program 
has been terminated.
    Section 608c(5)(I) of the Act provides that any Federal order 
advertising and promotion provisions may be terminated separately 
whenever the Secretary makes a determination that the provisions of 
Section 608c(16)(B) for terminating an order have been met. Section 
608c(16)(B) of the Agricultural Marketing Agreement Act requires that 
the Secretary terminate an order whenever he finds that a majority of 
the producers engaged in production of milk for the market during a 
representative period favor termination, or that such dairy farmers 
produced more than 50 percent of the milk produced for sale in the 
market during such period.
    Dairy Farmers of America and North Central Associated Milk 
Producers, Inc., represent approximately 90 percent of the producers 
and approximately 81% of the production of milk pooled under the 
Nebraska-Western Iowa Federal milk order. The termination order 
designates the month of September 1998 as the representative period for 
the purpose of determining that the above described statutory 
requirement is met.
    Therefore, the aforesaid provisions of the order are hereby 
terminated.
    It is hereby found and determined that there is good cause for 
dispensing with prior notice and comment and that thirty days' notice 
of the effective date hereof is impractical, unnecessary and contrary 
to the public interest in that:
    (a) The termination is necessary to fulfill the statutory 
requirements of

[[Page 70996]]

Sections 608c(5)(I) and 608c(16)(B) of the Act (7 U.S.C. 601-674);
    (b) This termination does not require of persons affected 
substantial or extensive preparation prior to the effective date; and
    (c) The annual operation of the Order 65 advertising and promotion 
program is based on milk marketed December 1 through November 30.
    Therefore, good cause exists for making this order effective 
without prior notice and comment, and less than 30 days from the date 
of publication in the Federal Register.

List of Subjects in 7 CFR Part 1065

    Milk marketing orders.
    For the reasons set forth in the preamble, the following provisions 
of 7 CFR Part 1065 are amended as follows:

PART 1065--MILK IN THE NEBRASKA-WESTERN IOWA MARKETING AREA

    1. The authority citation for 7 CFR Part 1065 continues to read as 
follows:

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


Sec. 1065.73  [Amended]

    2. In Sec. 1065.73, paragraph (a)(2)(viii) is amended by removing 
the language ``and for advertising and promotion pursuant to 
Sec. 1065.107'' effective December 1, 1998.


Sec. 1065.107  [Removed]

    3. Section 1065.107 is removed effective December 1, 1998.


Sec. 1065.121  [Amended]

    4. In Section 1065.121, paragraph (e) is removed and reserved 
effective December 1, 1998.


Secs. 1065.105 through 1065.122  [Removed]

    5. Sections 1065.105 through 1065.122 and the undesignated center 
heading preceding them are removed effective March 31, 1999.

    Dated: December 16, 1998.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 98-33932 Filed 12-22-98; 8:45 am]
BILLING CODE 3410-02-U