[Federal Register Volume 64, Number 217 (Wednesday, November 10, 1999)]
[Rules and Regulations]
[Pages 61199-61201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29317]



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  Federal Register / Vol. 64, No. 217 / Wednesday, November 10, 1999 / 
Rules and Regulations  

[[Page 61199]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1126 and 1137

[DA-99-08 and DA-99-07]


Milk in the Texas and Eastern Colorado Marketing Areas; 
Suspension of Certain Provisions of the Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final Rule; Suspension of rule.

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SUMMARY: This document suspends certain provisions of the Texas and 
Eastern Colorado Federal milk marketing orders (Orders 126 and 137) 
from the day after publication in the Federal Register until 
implementation of Federal order reform.
    The suspensions have been in effect for both orders for some time, 
and were expected to become unnecessary under the provisions of the 
final rule establishing the consolidated Southwest and Central orders 
under Federal Milk Order Reform.

EFFECTIVE DATE: November 11, 1999.

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

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:

Notice of Proposed Suspension (Texas): Issued September 15, 1999; 
published September 21, 1999 (64 FR 51083).
Notice of Proposed Suspension (Eastern Colorado): Issued September 13, 
1999; published September 20, 1999 (64 FR 50777).

    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 May 1999, the milk of 1,314 producers was pooled 
on the Texas Federal milk order. Of these producers, 812 producers were 
below the 326,000-pound production guideline and are considered small 
businesses. During May, there were 12 handlers operating 21 pool plants 
under the Texas order. Four of these handlers would be considered small 
businesses.
    For the month of June 1999, the milk of 203 producers was pooled on 
the Eastern Colorado milk order. Of these producers, 105 were below the 
326,000-pound production guideline and are considered small businesses. 
For June 1999, there were eight handlers operating pool plants under 
the Eastern Colorado milk order. Of these handlers, five are considered 
small businesses.
    This rule suspends portions of the pool plant and producer milk 
definitions under the Texas order. The suspension lessens the 
regulatory impact of the order on certain milk handlers and tends to 
assure that dairy farmers will have their milk priced under the order 
and thereby receive the benefits that accrue from such pricing.
    In addition, this rule suspends portions of the producer definition 
under the Eastern Colorado order, making it easier for a cooperative 
association to qualify milk for pooling under the order. The suspension 
lessens the regulatory impact of the order on certain milk handlers and 
would tend to ensure that dairy farmers 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 orders regulating 
the handling of milk in the Texas and Eastern Colorado marketing area.
    Notice of proposed rulemaking was published in the Federal Register 
on September 20, 1999 (64 FR 50777) concerning a proposed suspension of 
certain provisions of the Eastern Colorado order, and on September 21, 
1999 (64 FR 51083) concerning a proposed suspension of certain 
provisions of the Texas order. Interested persons were afforded 
opportunity to file written data, views and arguments

[[Page 61200]]

thereon. No comments on either proposed suspension were received.
    After consideration of all relevant material, including the 
proposals in the notices and other available information, it is hereby 
found and determined that from the day after publication of this rule 
in the Federal Register until implementation of Federal order reform, 
the following provisions of the Texas and Eastern Colorado orders do 
not tend to effectuate the declared policy of the Act:
    1. In Sec. 1126.7(d) introductory text, the words ``during the 
months of February through July'' and the words ``under paragraph (b) 
or (c) of this section''.
    2. In Sec. 1126.7(e) introductory text, the words ``and 60 percent 
or more of the producer milk of members of the cooperative association 
(excluding such milk that is received at or diverted from pool plants 
described in paragraphs (b), (c), and (d) of this section) is 
physically received during the month in the form of a bulk fluid milk 
product at pool plants described in paragraph (a) of this section 
either directly from farms or by transfer from plants of the 
cooperative association for which pool plant status under this 
paragraph has been requested''.
    3. In Sec. 1126.13(e)(1), the words ``and further, during each of 
the months of September through January not less than 15 percent of the 
milk of such dairy farmer is physically received as producer milk at a 
pool plant''.
    4. In Sec. 1126.13, paragraph (e)(2).
    5. In Sec. 1126.13(e)(3), the sentence ``The total quantity of milk 
so diverted during the month shall not exceed one-third of the producer 
milk physically received at such pool plant during the month that is 
eligible to be diverted by the plant operator;''
    6. In Sec. 1137.12(a)(2), the words ``from whom at least three 
deliveries of milk are received during the month at a distributing pool 
plant''; and in the second sentence ``30 percent in the months of 
March, April, May, June, July, and December and 20 percent in other 
months of'', and the word ``distributing''.

Statement of Consideration

    Suspension of the provisions for an indefinite period (until 
implementation of Federal order reform) is necessary because 
implementation of the 11 consolidated orders under Federal order reform 
has been delayed by judicial action. The Final Rule containing the 11 
consolidated orders was issued August 23, 1999, and published September 
1, 1999 (64 FR 47898). A Delay of Effective Date rule was issued 
September 30, 1999, and published October 5, 1999 (64 FR 53885).
    For the Texas order, this rule reinstates a suspension that expired 
July 31, 1999, of portions of the pool plant and producer milk 
definitions under the Texas order. The rule will be in effect from the 
day after publication of the suspension in the Federal Register until 
the implementation of Federal order reform is completed. The action 
suspends: (1) The 60 percent delivery standard for pool plants operated 
by cooperatives; (2) the diversion limitation applicable to cooperative 
associations; (3) the limits on the amount of milk that a pool plant 
operator may divert to nonpool plants; (4) the shipping standards that 
must be met by supply plants to be pooled under the order; and (5) the 
individual producer performance standards that must be met in order for 
a producer's milk to be eligible for diversion to a nonpool plant.
    The order provides for regulating, as a supply plant, a plant that 
each month ships a sufficient percentage of its receipts to 
distributing plants. The order sets the shipping standard at 15 percent 
of the plant's milk receipts during August and December and 50 percent 
of the plant's receipts during September through November and January. 
In addition, the order provides that a plant that is pooled as a supply 
plant during each of the immediately preceding months of September 
through January may be pooled under the order during the following 
months of February through July without making qualifying shipments to 
distributing plants. The requested action would suspend these 
performance standards, but only for supply plants that were regulated 
under the Texas order during each of the immediately preceding months 
of September through January.
    The order also permits a cooperative association plant located in 
the marketing area to be a pool plant if at least 60 percent of the 
producer milk of members of the cooperative association is physically 
received at pool distributing plants during the month. In addition, a 
cooperative association may divert to nonpool plants up to one-third of 
the amount of milk that the cooperative causes to be physically 
received during the month at handlers' pool plants, and the operator of 
a pool plant may divert to nonpool plants not more than one-third of 
the milk that is physically received during the month at the handler's 
pool plant. This action suspends the 60 percent delivery standard for 
plants operated by a cooperative association and removes the diversion 
limitations applicable to a cooperative association and to the operator 
of a pool plant.
    The order also specifies that some milk of each producer must be 
physically received at a pool plant in order for any of the producer's 
milk to be eligible for diversion to a nonpool plant. During the months 
of September through January, 15 percent of a producer's milk must be 
received at a pool plant for the remainder to be eligible for 
diversion. This rule suspends these requirements.
    The reinstatement of the suspension was requested by DFA, a 
cooperative association that represents a substantial number of dairy 
farmers who supply the Texas market. The cooperative stated that 
marketing conditions have not changed materially since the provisions 
were initially suspended, prior to 1990, and therefore should be 
suspended until restructuring of the Federal order program is 
implemented as mandated in the 1996 Farm Bill.
    The cooperative stated that the reinstatement of the suspension is 
necessary to assure that dairy farmers who have historically supplied 
the Texas market will have their milk priced under the Texas order. In 
addition, DFA maintains that the suspension will provide handlers the 
flexibility needed to move milk supplies in the most efficient manner 
and to eliminate costly and inefficient movements of milk that would be 
made solely for the purpose of pooling the milk of dairy farmers who 
have historically supplied the market. No comments opposing the 
suspension were received.
    Implementation of the consolidated Southwest order, which contains 
provisions that would accommodate the market's current conditions, was 
to have taken place on October 1, 1999. Implementation of that final 
rule has been delayed by judicial action, and continued suspension of 
the Order 126 provision is necessary to prevent uneconomical and 
inefficient movements of milk and to ensure that producers historically 
associated with the markets will continue to have their milk pooled 
under the order.
    Accordingly, 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 Texas marketing area will 
continue to benefit from pooling and pricing under the order.
    For the Eastern Colorado order, this rule suspends a portion of the 
producer definition to enable a cooperative association to more easily 
qualify milk

[[Page 61201]]

for pooling under the order until implementation of Federal Order 
Reform. The language suspended requires the milk of cooperative 
association members to ``touch base'' at pool distributing plants at 
least 3 times per month to be eligible for diversion. In addition, 
language limiting the quantity of milk diverted to nonpool plants by 
cooperative associations to 30 percent in the months of March through 
July and December, and to 20 percent in other months of the quantity 
received at pool distributing plants is suspended so that the effective 
limit on diversions becomes 50 percent of the total milk pooled by 
cooperatives.
    Continuation of the Eastern Colorado suspension that expired on 
August 31, 1999, was requested by DFA, a cooperative association which 
represents nearly all of the dairy farmers who supply the Eastern 
Colorado market. DFA contended that milk from some producers is 
required every day of the month in order to meet market demands, while 
milk from some other producers is required most days of the month and 
milk from a few producers is required only a few days each month to 
meet market demands. DFA asserted that with the suspension in place the 
market can be served in the most efficient manner possible because milk 
required by the market only a few days each month can maintain 
association with the market without being required to be delivered to 
pool distributing plants each month. DFA projected that, without the 
suspension, inefficient and costly movements of milk would have to be 
made to maintain the pool status of producers who historically have 
supplied the market. No comments opposing the suspension were received.
    Implementation of the consolidated Central order, which contains 
provisions that would accommodate the market's current conditions, was 
to have taken place on October 1, 1999. Implementation of that final 
rule has been delayed by judicial action, and continued suspension of 
the Order 137 provision is necessary to prevent uneconomical and 
inefficient movements of milk and to ensure that producers historically 
associated with the markets will continue to have their milk pooled 
under the order.
    Accordingly, 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 Eastern Colorado marketing area 
will continue to benefit from pooling and pricing under the order.
    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 
areas, in that such rule is necessary to permit the continued pooling 
of the milk of dairy farmers who have historically supplied the markets 
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. No comments were 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 Parts 1126 and 1137

    Milk marketing orders.
    For the reasons set forth in the preamble, 7 CFR Parts 1126 and 
1137 are amended as follows for the period from the day after 
publication of this rule in the Federal Register until implementation 
of Federal order reform.
    1. The authority citation for 7 CFR Parts 1126 and 1137 continues 
to read as follows:

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

PART 1126--MILK IN THE TEXAS MARKETING AREA


Sec. 1126.7  [Suspended in part]

    2. In Sec. 1126.7(d) introductory text, the words ``during the 
months of February through July'' and the words ``under paragraph (b) 
or (c) of this section'' are suspended.
    3. In Sec. 1126.7(e) introductory text, the words ``and 60 percent 
or more of the producer milk of members of the cooperative association 
(excluding such milk that is received at or diverted from pool plants 
described in paragraphs (b), (c), and (d) of this section) is 
physically received during the month in the form of a bulk fluid milk 
product at pool plants described in paragraph (a) of this section 
either directly from farms or by transfer from plants of the 
cooperative association for which pool plant status under this 
paragraph has been requested'' are suspended.


Sec. 1126.13  [Suspended in part]

    4. In Sec. 1126.13(e)(1), the words ``and further, during each of 
the months of September through January not less than 15 percent of the 
milk of such dairy farmer is physically received as producer milk at a 
pool plant'' are suspended.
    5. In Sec. 1126.13, paragraph (e)(2) is suspended in its entirety.
    6. In Sec. 1126.13(e)(3), the sentence ``The total quantity of milk 
so diverted during the month shall not exceed one-third of the producer 
milk physically received at such pool plant during the month that is 
eligible to be diverted by the plant operator;'' is suspended.

PART 1137--MILK IN THE EASTERN COLORADO MARKETING AREA


Sec. 1137.12  [Suspended in part]

    7. In Sec. 1137.12(a)(1), the words ``from whom at least three 
deliveries of milk are received during the month at a distributing pool 
plant''; and in the second sentence ``30 percent in the months of 
March, April, May, June, July, and December and 20 percent in other 
months of'', and the word ``distributing'' are suspended.

    Dated: November 3, 1999.
F.Tracy Schonrock,
Acting Deputy Administrator, Dairy Programs.
[FR Doc. 99-29317 Filed 11-9-99; 8:45 am]
BILLING CODE 3410-02-P