[Federal Register Volume 67, Number 144 (Friday, July 26, 2002)]
[Rules and Regulations]
[Pages 48743-48745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18923]



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  Federal Register / Vol. 67, No. 144 / Friday, July 26, 2002 / Rules 
and Regulations  

[[Page 48743]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1033

[Docket No. AO-361-A35; DA-01-04]


Milk in the Mideast Marketing Area; Interim Order Amending the 
Order.

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule.

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

SUMMARY: This order amends certain pooling provisions of the Mideast 
Federal milk order on an interim basis. Disorderly marketing conditions 
from inadequate pooling provisions warrant these amendments. It 
implements amendments to the Pool plant provisions which eliminate 
automatic pool plant status for the 6-month period of March through 
August, eliminate the inclusion of milk shipments to a distributing 
plant regulated by another Federal milk order as pool-qualifying 
shipments, eliminate the ``split plant'' feature, eliminate the 
inclusion of diversions made by a pool supply plant located outside the 
marketing area to a pool distributing plant as the supply plant's 
qualifying shipments, and establish a ``net shipments'' provision for 
supply plants. For the Producer milk provisions, this interim order 
implements amendments that increase the number of days that the milk of 
a producer needs to be delivered to a pool plant before being eligible 
for diversion, establish year-round diversion limits for producer milk, 
adjusted seasonally, for distributing plants pooled on the order, and 
exclude from receipts the diversions made by a pool plant to a second 
pool plant from the calculation of the diversion limitation. More than 
the required number of producers in the Mideast marketing area have 
approved the issuance of the interim order as amended.

EFFECTIVE DATE: August 1, 2002.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Marketing Specialist, 
Stop 0231, Room 2968, USDA/AMS/Dairy Programs, Order Formulation 
Branch, 1400 Independence Avenue SW., Washington, DC 20250-0231, (202) 
690-1366, e-mail address [email protected].

SUPPLEMENTARY INFORMATION: This administrative rule is governed by the 
provisions of Sections 556 and 557 of Title 5 of the United States Code 
and, therefore, is excluded from the requirements of Executive Order 
12866.
    This interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have retroactive 
effect. This 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 Department 
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 Department 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 
Department'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 
interim 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 $750,000, 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 $750,000 per year criterion was used to 
establish a production guideline of 500,000 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 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. In October 2001, there were 11,120 producers pooled on and 
40 handlers regulated by the Mideast order. Based on these criteria, 
the vast majority of the producers and handlers would be considered 
small businesses. The adoption of the amended pooling standards serve 
to revise and establish criteria that ensure the pooling of producers, 
producer milk, and plants that have a reasonable association with, and 
are consistently serving, the fluid milk needs of the Mideast milk 
marketing area. Criteria for pooling milk are established on the basis 
of performance standards that are considered adequate to meet the Class 
I fluid needs of the market, and determine those that are eligible to 
share in the revenue that arises from the classified pricing of milk. 
Criteria for pooling are established without regard to the size of any 
dairy industry organization or entity. The criteria established are 
applied in an equal fashion to both large and small businesses.
    Prior documents in this proceeding:
    Notice of Hearing: Issued September 21, 2001; published September 
28, 2001 (66 FR 49571).
    Tentative Final Decision: Issued June 4, 2002; published June 11, 
2002 (67 FR 39871).

[[Page 48744]]

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Mideast order was first issued and when 
it was amended. The previous findings and determinations are hereby 
ratified and confirmed, except where they may conflict with those set 
forth herein.
    The following findings are hereby made with respect to the Mideast 
order:
    (a) Findings upon the basis of the hearing record. Pursuant to the 
provisions of the Agricultural Marketing Agreement Act of 1937, as 
amended (7 U.S.C. 601-674), and the applicable rules of practice and 
procedure governing the formulation of marketing agreements and 
marketing orders (7 CFR Part 900), a public hearing was held upon 
certain proposed amendments to the tentative marketing agreement and to 
the order regulating the handling of milk in the Mideast marketing 
area.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof it is found that:
    (1) The Mideast order, as hereby amended on an interim basis, and 
all of the terms and conditions thereof, will tend to effectuate the 
declared policy of the Act;
    (2) The parity prices of milk, as determined pursuant to Section 2 
of the Act, are not reasonable in view of the price of feeds, available 
supplies of feeds, and other economic conditions which affect market 
supply and demand for milk in the marketing area, and the minimum 
prices specified in the order, as hereby amended on an interim basis, 
are such prices as will reflect the aforesaid factors, insure a 
sufficient quantity of pure and wholesome milk, and be in the public 
interest; and
    (3) The Mideast order, as hereby amended on an interim basis, 
regulates the handling of milk in the same manner as, and is applicable 
only to persons in the respective classes of industrial and commercial 
activity specified in, a marketing agreement upon which a hearing has 
been held.
    (b) Additional Findings. It is necessary and in the public interest 
to make these interim amendments to the Mideast order effective August 
1, 2002. Any delay beyond that date would tend to disrupt the orderly 
marketing of milk in the aforesaid marketing area.
    The interim amendments to this order are known to handlers. The 
final decision containing the proposed amendments to this order was 
issued on June 4, 2002.
    The changes that result from these interim amendments will not 
require extensive preparation or substantial alteration in the method 
of operation for handlers. In view of the foregoing, it is hereby found 
and determined that good cause exists for making these interim order 
amendments effective on August 1, 2002. It would be contrary to the 
public interest to delay the effective date of these amendments for 30 
days after their publication in the Federal Register. (Sec. 553(d), 
Administrative Procedure Act, 5 U.S.C. 551-559.)
    (c) Determinations. It is hereby determined that:
    (1) The refusal or failure of handlers (excluding cooperative 
associations specified in Sec. 8c(9) of the Act) of more than 50 
percent of the milk, which is marketed within the specified marketing 
area, to sign a proposed marketing agreement, tends to prevent the 
effectuation of the declared policy of the Act;
    (2) The issuance of this interim order amending the Mideast order 
is the only practical means pursuant to the declared policy of the Act 
of advancing the interests of producers as defined in the order as 
hereby amended;
    (3) The issuance of the interim order amending the Mideast order is 
favored by at least two-thirds of the producers who were engaged in the 
production of milk for sale in the marketing area.

List of Subjects in 7 CFR Part 1033

    Milk marketing orders.

Order Relative to Handling

    It is therefore ordered, that on and after the effective date 
hereof, the handling of milk in the Mideast marketing area shall be in 
conformity to and in compliance with the terms and conditions of the 
order, as amended, and as hereby further amended on an interim basis, 
as follows:
    The authority citation for 7 CFR Part 1033 reads as follows:

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

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    1. Section 1033.7 is amended by:
    a. Removing ``; and'' at the end of paragraph (c)(1)(iii) and 
adding a period in its place;
    b. Removing paragraph (c)(1)(iv);
    c. Revising paragraphs (c)(2), (c)(4), and (d)(2);
    d. Removing the words ``or its predecessor orders'' in paragraph 
(e) introductory text;
    e. Removing ``and;'' at the end of paragraph (h)(6) and adding a 
period in its place; and
    f. Removing paragraph (h)(7).
    The revisions read as follows:


Sec. 1033.7  Pool plant.

* * * * *
    (c) * * *
    (2) The operator of a supply plant located within the marketing 
area may include deliveries to pool distributing plants directly from 
farms of producers pursuant to Sec. 1033.13(c) as up to 90 percent of 
the supply plant's qualifying shipments. Handlers may not use shipments 
pursuant to Sec. 1033.13(c) to qualify plants located outside the 
marketing area.
* * * * *
    (4) Shipments used in determining qualifying percentages shall be 
milk transferred or diverted and physically received by pool 
distributing plants, less any transfers or diversions of bulk fluid 
milk products from such pool distributing plants.
* * * * *
    (d) * * *
    (2) The 30 percent delivery requirement may be met for the current 
month or it may be met on the basis of deliveries during the preceding 
12-month period ending with the current month. Shipments used in 
determining qualifying shipments in meeting this 30 percent delivery 
requirement shall be milk transferred or diverted and physically 
received by pool distributing plants, less any transfers or diversions 
of bulk fluid milk products from such pool distributing plants;
* * * * *

    2. Section 1033.13 is amended by:
    a. Revising paragraph (d)(2);
    b. Redesignating paragraphs (d)(3) through (d)(6) as paragraphs 
(d)(4) through (d)(7);
    c. Adding a new paragraph (d)(3); and
    d. Revising newly designated paragraph (d)(4).
    The revisions and additions read as follows:


Sec. 1033.13  Producer milk.

* * * * *
    (d) * * *
    (2) The equivalent of at least two days' milk production is caused 
by the handler to be physically received at a pool plant in each of the 
months of August through November;
    (3) The equivalent of at least two days' milk production is caused 
by the handler to be physically received at a pool plant in each of the 
months of December through July if the requirement of paragraph (d)(2) 
of this section (Sec. 1033.13) in each of the prior months of August 
through November are not met, except in the case of a dairy farmer who 
marketed no Grade A milk during each of the prior months of August 
through November.

[[Page 48745]]

    (4) Of the total quantity of producer milk received during the 
month (including diversions but excluding the quantity of producer milk 
received from a handler described in Sec. 1000.9(c) of this chapter or 
which is diverted to another pool plant), the handler diverted to 
nonpool plants not more than 60 percent in each of the months of August 
through February and 70 percent in each of the months of March through 
July.
* * * * *

    Dated: July 22, 2002.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 02-18923 Filed 7-25-02; 8:45 am]
BILLING CODE 3410-02-P