[Federal Register Volume 64, Number 108 (Monday, June 7, 1999)]
[Proposed Rules]
[Pages 30256-30257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14312]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1065

[DA-99-01]


Milk in the Nebraska-Western Iowa Marketing Area; Termination of 
Proceeding on Proposed Suspension

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Termination of Proceeding.

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SUMMARY: This document terminates the proceeding that was initiated to 
consider a proposal to suspend portions of the supply plant shipping 
requirements for the Nebraska-Western Iowa order for the months of 
March through September 1999.

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

SUPPLEMENTARY INFORMATION: Prior document in this proceeding: Notice of 
Proposed Suspension of Rule: Issued March 11, 1999; published March 17, 
1999 (64 FR 13125).

Small Business Consideration

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), the Agricultural Marketing Service considered the economic 
impact of this rulemaking action on small entities and has certified 
that this termination of proceeding 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.

[[Page 30257]]

    For the month of January 1999, 1,248 dairy farmers were producers 
under the Nebraska-Western Iowa order. Of these producers, 1,176 
producers (i.e., 94 percent) were considered small businesses having 
monthly milk production under 326,000 pounds. A further breakdown of 
the monthly milk production of the producers on the order during 
January 1999 is as follows: 753 produced less than 100,000 pounds of 
milk; 322 produced between 100,000 and 200,000; 101 produced between 
200,000 and 326,000; and 72 produced over 326,000 pounds. During the 
same month, 5 handlers were pooled under the order. None are considered 
small businesses.
    Because this termination of the proceedings concerning the proposed 
suspension results in no change in regulation it does not change 
reporting, record keeping or other compliance requirements. Based on 
comments received from an organization representing producers who 
supply the Order 65 market with over 40 percent of the monthly average 
volume of milk pooled under the order, and on our analysis of other 
relevant information connected with this rulemaking, we have determined 
that the suspension request should not be granted. While suspension of 
the supply plant shipping requirements may have served the economic 
interests of one sector of the producers supplying Order 65, it would 
have most likely resulted in a significant loss of blend price income 
to a substantial number of other producers under the Order.

Preliminary Statement

    This termination of proceedings is issued pursuant to the 
provisions of the Agricultural Marketing Agreement Act and of the order 
regulating the handling of milk in the Nebraska-Western Iowa marketing 
area.
    Notice was published in the Federal Register on March 17, 1999 (64 
FR 13125) concerning a proposed suspension of certain sections of the 
order. Interested persons were afforded opportunity to file written 
data, views and arguments thereon.
    One comment opposing the proposed termination was received.

Statement of Consideration

    This document terminates the proceeding initiated to suspend 
portions of the supply plant shipping requirements for the Nebraska-
Western Iowa order (Order 65) for the months of March through September 
1999. The proposed suspension was requested by North Central Associated 
Milk Producers, Inc. (AMPI), a cooperative association that supplies 
milk for the market's fluid needs. AMPI requested that language be 
suspended from the Order 65 pool supply plant definition for the 
purpose of allowing producers who had historically supplied the fluid 
needs of Order 65 distributing plants to maintain their pool status. 
AMPI contended that because a fluid milk plant operator reduced its 
purchase of fluid milk from AMPI by more than half, AMPI would not be 
able to pool milk historically associated with Order 65 for March 1999, 
and thus would not qualify its supply plant for the automatic pooling 
qualification months of April through August.
    AMPI maintained that through discussions with other handlers in the 
order, it was certain that no additional milk was needed at that time. 
Thus, AMPI contended that it was appropriate to suspend the supply 
plant shipping standards for the months of March through September 
1999.
    Dairy Farmers of America (DFA) filed a comment opposing the 
proposal to suspend portions of the supply plant shipping requirements 
for Order 65. DFA reported that its members produce and market over 40 
percent of the monthly average volume of milk pooled under the order.
    DFA contended that the suspension would enhance AMPI's ability to 
pool additional supplies on the market, and DFA members would be 
disadvantaged because the blend price would be lower. In addition, DFA 
asserted that Federal order language is routinely suspended to 
accommodate the pooling of milk as a result of general production 
increases relative to Class I milk sales, natural disasters, or plant 
closures. DFA stated that the reasons for these types of suspensions 
are generally beyond the control of any of the handlers regulated by 
the order and argued that changes in supplier relationships do not fall 
into the category of ``beyond control of the party.'' DFA therefore 
opposed the request.
    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 the proposed 
suspension action be terminated. AMPI's loss of 50 percent of its 
customary sales to a pool distributing plant will not preclude AMPI 
from pooling its supply plant and some of its members' milk on Order 
65. While AMPI may not be able to pool as much milk under Order 65 
during March 1999 as it has in prior periods, its supply plant and 
associated milk may be pooled under the order as long as some milk is 
sold by the supply plant to pool distributing plants.
    Furthermore, the sole requirement for gaining automatic supply 
plant pooling status (with no percentage shipping standards for pool 
supply plants) for the months of April through August is for the supply 
plant to qualify as a pool plant for the months of September through 
March. If AMPI is able to pool its supply plant, even with a lesser 
volume of milk than it desires, the supply plant still would qualify 
for automatic pooling status for the period April through August.
    Suspension of the order's pool supply plant shipping standard for 
the month of March 1999 would allow AMPI to pool a much greater volume 
of milk under the order than that associated with its sales to the 
fluid market and most likely would result in a significant loss of 
blend price income to all other producers whose milk is pooled under 
the order.

List of Subjects in 7 CFR Part 1065

    Milk marketing orders.
    The authority citation for 7 CFR part 1065 continues to read as 
follows:

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

    Dated: June 1, 1999.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 99-14312 Filed 6-4-99; 8:45 am]
BILLING CODE 3410-02-P