[Federal Register Volume 64, Number 170 (Thursday, September 2, 1999)]
[Rules and Regulations]
[Pages 48081-48083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22905]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1106
[DA-99-06]
Milk in the Southwest Plains Marketing Area; Suspension of
Certain Provisions of the Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final Rule; Suspension of rule.
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SUMMARY: This document suspends certain provisions of the Southwest
Plains Federal milk marketing order (Order 106) from September 1, 1999,
through August 31, 2000, or until implementation of Federal order
reform. The suspension removes a portion of the supply plant shipping
standard and the producer delivery requirement. The action was
requested by Kraft Foods, Inc. (Kraft), and 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.
EFFECTIVE DATE: September 1, 1999, through August 31, 2000.
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 3, 1999; published
August 6, 1999 (64 FR 42860).
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
[[Page 48082]]
``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. This final rule will 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 rule also will 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 an unregulated manufacturing plant.
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. The
existing order provisions would require milk to be shipped longer
distances than necessary for the sole purpose of fulfilling order
standards. Thus, this rule lessens the regulatory impact of the order
on certain milk handlers and tends 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.
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 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 Federal order
reform is completed. The suspension will 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 rule also suspends 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 unregulated manufacturing plant. By suspending this
provision, producer milk would not be required to be delivered to pool
plants before going to such 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 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.
A notice of proposed rulemaking was published in the Federal
Register on August 6, 1999 (64 FR 42860), concerning the proposed
suspension. Interested persons were afforded opportunity to file
written data, views and arguments thereon. One comment supporting the
proposed suspension was received. No comment was filed in opposition.
Dairy Farmers of America (DFA), a cooperative association
representing producers whose milk is the largest volume marketed under
the Southwest Plains order, filed a comment in favor of the proposed
suspension. DFA states that both the supply plant standard and producer
delivery requirement have been suspended for a number of years. The
cooperative contends that the market has had an adequate supply of milk
available to meet the fluid needs of the market and that the existing
order provisions would cause milk to be shipped longer distances than
necessary for the sole purpose of meeting order requirements. Moreover,
DFA notes, these provisions have been modified to reflect current
industry needs under the proposed language for Federal order reform.
As noted by Kraft and DFA, the supply plant shipping standard and
the producer milk delivery requirement 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.
The suspension is found to be necessary for the purpose of assuring
that producers' milk will not have to be moved in an uneconomic and
inefficient manner 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. In addition, the
provisions have been modified in the proposed language for Federal
order reform.
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, 1999, through August 31, 2000, or until implementation of
Federal order reform, 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
[[Page 48083]]
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 for the period of September 1, 1999, through August
31, 2000:
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 26, 1999.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 99-22905 Filed 9-1-99; 8:45 am]
BILLING CODE 3410-02-P