[Federal Register Volume 64, Number 151 (Friday, August 6, 1999)]
[Proposed Rules]
[Pages 42860-42861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20288]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1106

[DA-99-06]


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 a producer 
delivery requirement of the Southwest Plains Federal milk marketing 
order (Order 106) for the period of September 1999 through August 2000 
or until implementation of Federal order reform. 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 13, 1999.

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. Advance, unofficial copies 
of such 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 
the action and the 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 1999, 2,045 dairy farmers were producers 
under Order 106. Of these producers, 2,001 producers (i.e., 98%) were 
considered small businesses. For the same month, there were 12 
regulated handlers under Order 106. Five of these handlers were 
considered small businesses.
    The supply plant shipping standard and the producer delivery 
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

[[Page 42861]]

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 1998 
through January 1999 to qualify as a pool plant without shipping any 
milk to a pool distributing plant during the following months of 
September 1999 through August 2000 or until implementation of Federal 
order reform. The proposed action would also suspend the requirement 
that a producer's milk must first be received at a pool distributing 
plant during the month before the 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 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, 1999, through August 31, 2000, or until implementation or 
Federal order reform:
    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 seven 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 producer delivery requirement of the 
Southwest Plains order for the period of September 1999 through August 
2000 or until completion of Federal order reform. The proposed 
suspension would allow a supply plant that has been associated with the 
Southwest Plains order during the months of September 1998 through 
January 1999 to qualify as a pool plant without shipping any milk to a 
pool distributing plant during the following months of September 1999 
through August 2000 or until completion of Federal order reform. 
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 a 
producer's milk must be received at a pool plant during the month 
before it is eligible for diversion to a nonpool plant. By suspending 
this provision, producer milk would not be required to be delivered to 
pool plants before going to unregulated manufacturing plants.
    According to Kraft, the proponent of 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 
producer 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 such 
plants 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 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, 1999, through August 31, 2000, or until 
implementation of Federal order reform.

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 3, 1999.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 99-20288 Filed 8-5-99; 8:45 am]
BILLING CODE 3410-02-P