[Federal Register Volume 64, Number 181 (Monday, September 20, 1999)]
[Rules and Regulations]
[Pages 50748-50749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24436]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1131

[DA-99-05]


Milk in the Central Arizona Marketing Area; Suspension of Certain 
Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; suspension.

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SUMMARY: This document suspends certain provisions of the Central 
Arizona Federal milk marketing order (Order 131) from the day after 
publication in the Federal Register until the implementation of Federal 
order reform on October 1, 1999. The suspension eliminates the 
requirement that a cooperative association ship at least 50 percent of 
its receipts to other handler pool plants to maintain pool plant status 
of a manufacturing plant operated by the cooperative. United Dairymen 
of Arizona, a cooperative association that represents nearly all of the 
producers who supply milk to the market, requested the suspension. The 
suspension is necessary to prevent uneconomical and inefficient 
movements of milk and to ensure that producers historically associated 
with the market will continue to have their milk pooled under Order 
131.

EFFECTIVE DATE: September 21, 1999, through September 30, 1999.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing 
Specialist, USDA/AMS/Dairy Programs, Order Formulation Branch, Room 
2971, South Building, PO Box 96456, Washington, DC 20090-6456, 
(202)720-9368, e-mail address [email protected].

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:
    Notice of Proposed Suspension: Issued July 9, 1999; published July 
15, 1999 (64 FR 38144).
    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 
``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 March 1999, 100 dairy farmers were producers under 
Order 131. Of these producers, three were considered small businesses. 
For the same month, there were five regulated handlers under Order 131. 
Two of these handlers were considered small businesses.
    This final rule will suspend the requirement that a cooperative 
association ship at least 50 percent of its receipts to other handler 
pool plants to maintain pool status of a manufacturing plant operated 
by the cooperative. This rule lessens the regulatory impact of the 
order on certain milk handlers and tends to ensure that dairy farmers 
will continue to have their milk priced under the order and thereby 
receive the benefits that accrue from such pricing. This rule will not 
result in any additional regulatory burden on handlers in the Central 
Arizona marketing area since this suspension has been in effect since 
April 1995.

Preliminary Statement

    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 Central Arizona milk marketing area.
    Notice of proposed rulemaking was published in the Federal Register 
on July 15, 1999 (64 FR 38144), concerning a proposed suspension of 
certain provisions of the order. Interested persons were afforded 
opportunity to file written data, views and arguments thereon. One 
comment supporting the proposed suspension was received from United 
Dairymen of Arizona.
    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 from the day after 
publication of this rule in the Federal Register through September 30, 
1999, the following provisions of the order do not tend to effectuate 
the declared policy of the Act:
    In Sec. 1131.7, paragraph (c), the words ``50 percent or more of'', 
``(including the skim milk and butterfat in fluid milk products 
transferred from its own plant pursuant to this paragraph that is not 
in

[[Page 50749]]

excess of the skim milk and butterfat contained in member producer milk 
actually received at such plant)'', and ``or the previous 12-month 
period ending with the current month.''

Statement of Consideration

    The rule suspends certain provisions of the Central Arizona Federal 
milk order through September 30, 1999. Implementation of Federal order 
reform begins on October 1, 1999. The suspension removes the 
requirement that a cooperative association that operates a 
manufacturing plant in the marketing area must ship at least 50 percent 
of its milk supply during the current month or the previous 12-month 
period ending with the current month to other handlers' pool plants to 
maintain the pool status of its manufacturing plant.
    The order permits a cooperative association's manufacturing plant, 
located in the marketing area, to be a pool plant if at least 50 
percent of the producer milk of members of the cooperative association 
is physically received at pool plants of other handlers during the 
current month or the previous 12-month period ending with the current 
month.
    Reinstatement of the suspension which expired on March 31, 1999, 
was requested by United Dairymen of Arizona (UDA), a cooperative 
association that represents nearly all of the dairy farmers who supply 
the Central Arizona market. UDA states that the pool status of their 
manufacturing plant is threatened if the suspension is not reinstated. 
UDA states that the same marketing conditions that warranted the 
suspension for the past four years still exist. UDA maintains that 
members who increased their milk production to meet the projected 
demands of fluid handlers for distribution into Mexico continue to 
suffer the adverse impact of the collapse of the Mexican peso. Absent a 
suspension, UDA projects that costly and inefficient movements of milk 
would have to be made to maintain the pool status of producers who have 
historically supplied the market and to prevent disorderly marketing in 
the Central Arizona marketing area.
    A review of the current marketing conditions indicates that, absent 
the suspension, the pool plant status of UDA's manufacturing plant will 
not be maintained. Thus, costly and inefficient movements of milk would 
have to be made to maintain pool status of producers who have 
historically supplied the market and to prevent disorderly marketing in 
the Central Arizona marketing area. Therefore, 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 Central 
Arizona marketing area will continue to benefit from pooling and 
pricing under the order. In addition, suspension of these provisions 
through September 30, 1999, will ensure that disorderly marketing 
conditions that may result from these provisions do not negatively 
impact producers in the future as these provisions have been modified 
in the Federal order reform regulatory language.
    Accordingly, it is appropriate to suspend the aforesaid provisions 
from the day after publication of this rule in the Federal Register 
through September 30, 1999.
    It is hereby found and determined that thirty days' notice of the 
effective date hereof is impractical, unnecessary 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 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 1131

    Milk marketing orders.

    For the reasons set forth in the preamble, 7 CFR part 1131 is 
amended for the period of one day following publication of this rule in 
the Federal Register through September 30, 1999, as follows:

PART 1131--MILK IN THE CENTRAL ARIZONA MARKETING AREA

    1. The authority citation for 7 CFR Part 1131 continues to read as 
follows:

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


Sec. 1131.7  [Suspended in part]

    2. In Sec. 1131.7, paragraph (c), the words ``50 percent or more 
of'', ``(including the skim milk and butterfat in fluid milk products 
transferred from its own plant pursuant to this paragraph that is not 
in excess of the skim milk and butterfat contained in member producer 
milk actually received at such plant)'', and ``or the previous 12-month 
period ending with the current month'' during the month'' are 
suspended.

    Dated: September 13, 1999.
Richard M. McKee
Deputy Administrator, Dairy Programs.
[FR Doc. 99-24436 Filed 9-17-99; 8:45 am]
BILLING CODE 3410-02-P