[Federal Register Volume 64, Number 145 (Thursday, July 29, 1999)]
[Proposed Rules]
[Pages 41047-41049]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19351]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1079

[DA-99-02]


Milk in the Iowa Marketing Area; Termination of Proceeding

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Termination of Proceeding.

-----------------------------------------------------------------------

SUMMARY: This document terminates the proceeding that was initiated to 
consider a proposal to reduce the percentage of a supply plant's 
receipts that must be delivered to fluid milk plants to qualify a 
supply plant for pooling under the Iowa Federal milk order for the 
months of July and August 1999, and to further reduce the percentage 
for June 1999.

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

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:
    Proposed Rule: Issued April 14, 1999; published April 19, 1999 (64 
FR 19071).
    Final Rule: Issued May 5, 1999; published May 11,1999 (64 FR 
25193).
    Notice of Reopening and Extension of Time for Filing Comments: 
Issued May 7, 1999; published May 13, 1999 (64 FR 25851).

Small Business Consideration

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), the

[[Page 41048]]

Agricultural Marketing Service considered the economic impact of the 
action on small entities and certified that it would 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 February 1999, 3,788 dairy farmers were producers 
under the Iowa order. Of these, 3,714 producers (i.e., 98 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 February 1999 was as follows: 2,804 
produced less than 100,000 pounds of milk; 776 produced between 100,000 
and 200,000 pounds; 134 produced between 200,000 and 326,000 pounds; 
and 74 produced over 326,000 pounds. During the same month, 11 handlers 
were pooled under the order. Five were considered small businesses.
    Because this termination of the proceeding concerning the proposed 
revision results in no change in regulation, the economic conditions of 
small entities will remain unchanged. Also, it does not change 
reporting, record keeping, or other compliance requirements.
    Based on the comment received in response to the initial proposed 
revision from Anderson-Erickson Dairy Company, the later comment from 
Swiss Valley Farms, Co., a cooperative organization in Davenport, Iowa, 
and on our analysis of relevant information connected with the proposed 
rulemaking, we have determined that the revision request should not be 
granted. While reduction of the pool supply plant shipping standards 
may have made qualification for pool status more easily obtainable for 
one supply plant operator, the order should assure that adequate 
supplies of milk are available to meet the fluid milk needs of the Iowa 
market. The current level of supply plant shipping percentages should 
meet those needs without preventing producers whose milk historically 
has been associated with the order from maintaining their pool status.

Preliminary Statement

    This termination of proceeding is issued pursuant to the provisions 
of the Agricultural Marketing Agreement Act and of the order regulating 
the handling of milk in the Iowa marketing area.
    Notice of reopening and extension of time for filing comments was 
published in the Federal Register on May 13, 1999 (64 FR 25851). The 
time for filing comments on the proposed reduction of the percentage of 
a supply plant's receipts that must be delivered to fluid milk plants 
to qualify a supply plant for pooling under the Iowa Federal milk order 
for the months of July and August 1999, and a further reduction for 
June 1999, was extended through June 14, 1999. Interested persons were 
afforded opportunity to file written data, views and arguments thereon.
    One comment opposing the reduction of supply plant shipping 
requirements was received.

Statement of Consideration

    This document terminates the proceeding that was initiated to 
consider a proposal to reduce the percentage of a supply plant's 
receipts that must be delivered to fluid milk plants to qualify a 
supply plant for pooling under the Iowa Federal milk order for the 
months of July and August 1999, and to further reduce the percentage 
for June 1999.
    The original request for a reduction in the percentage of a supply 
plant's shipping percentage requirements came from Beatrice Cheese, 
Inc., (Beatrice), a proprietary manufacturer of dairy products in 
Fredericksburg, Iowa. Beatrice requested a decrease in the applicable 
percentage of 10 percentage points from 20 percent to 10 percent for 
the months of April through August 1999. This request was based on 
Beatrice's contention that the action would allow the milk of dairymen 
who historically had supplied the market to continue to be pooled under 
the Federal order and also would prevent uneconomic milk movements. 
Beatrice stated that the 10 percent decrease for April through August 
1999 was warranted due to the fact that current raw milk supplies 
available for fluid use from outside of Iowa's traditional procurement 
area exceeded the needs of the fluid milk plants pooled under Federal 
Order 79 and that these available supplies had replaced milk formerly 
shipped by Beatrice producers. Beatrice contended that if the pool 
supply plant shipping percentages remained unchanged, the milk of 
dairymen who historically had supplied the Iowa market would not be 
able to continue to be pooled under the Federal Order or Beatrice would 
be forced to move milk uneconomically to qualify it for pooling.
    A comment filed by Anderson-Erickson Dairy Company, a pool 
distributing plant operator regulated under Order 79, did not oppose 
the proposed reduction for the months of April and May, but proposed a 
reduction of no more than 5 percentage points for June and opposed any 
reduction at that time for the months of July and August 1999. 
Anderson-Erickson stated that the summer could likely lead to a 
different marketing scenario than that projected by Beatrice due to a 
volatile milk supply situation in Iowa.
    As a result of Beatrice's request and Anderson-Erickson's comments, 
the Iowa order supply plant shipping percentages were reduced for April 
and May by 10 percentage points, and for June by 5 percentage points. 
In addition, a notice of reopening and extension of time for filing 
comments through June 14, 1999, was issued to consider a further 5-
percent reduction for June and a continuation of the 10-percentage 
point reduction for July and August.
    Comments from Swiss Valley Farms, Co., a cooperative organization 
in Davenport, Iowa, recommend termination of the proceeding due to 
indications that Iowa milk production during the traditionally short 
supply months may be lower than normal. Swiss Valley also states that 
shipping percentages, once properly set, should be changed based only 
on changes in the supply-demand factors in the market. The cooperative 
association contends that such factors would represent only emergency 
situations beyond the control of the producers or processors in a 
market. Swiss Valley argues that these emergency situations are not 
currently in existence.
    After consideration of all relevant material, including the 
proposal in the notice, the comment received from the cooperative 
organization, and other information connected with the rulemaking, it 
is hereby found and determined that the proposed revision action be 
terminated.

[[Page 41049]]

List of Subjects in 7 CFR Part 1079

    Milk marketing orders.

    The authority citation for 7 CFR part 1079 continues to read as 
follows:

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

    Dated: July 23, 1999.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 99-19351 Filed 7-28-99; 8:45 am]
BILLING CODE 3410-02-P