[Federal Register Volume 68, Number 29 (Wednesday, February 12, 2003)]
[Rules and Regulations]
[Pages 7070-7072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3443]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1032

[Docket No. AO-313-A44; DA-01-07]


Milk in the Central Marketing Area; Interim Order Amending the 
Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule.

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SUMMARY: This order amends certain pooling provisions of the Central 
Federal milk order on an interim basis. This interim order amends the 
Pool plant provisions that: Establish lower but year-round supply plant 
performance standards; will not consider the volume of milk shipments 
to distributing plants regulated by another Federal milk order as a 
qualifying shipment for the Central order; exclude from receipts 
diverted milk made by a pool plant to another pool plant in determining 
pool plant diversion limits; and establish a ``net shipments'' 
provision for milk deliveries to distributing plants. For Producer 
milk, this interim order adopts amendments that: establish higher year-
round diversion limits; will base diversion limits for supply plants on 
deliveries to Central order distributing plants; and eliminate the 
ability to simultaneously pool milk on the Central milk order and a 
State-operated milk

[[Page 7071]]

order that has marketwide pooling. More than the required number of 
producers in the Central marketing area have approved the issuance of 
the interim order as amended.

EFFECTIVE DATE: March 1, 2003.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Marketing Specialist, 
Order Formulation and Enforcement, USDA/AMS/Dairy Programs, Stop 0231-
Room 2968, 1400 Independence Avenue, Washington, DC 20250-0231, (202) 
690-1366, e-mail: [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 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 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.
    Approximately 9,695 of the 10,108 dairy producers (farmers), or 
95.9 percent, whose milk was pooled under the Central Federal milk 
order at the time of the hearing, November 2001, would meet the 
definition of small businesses. On the processing side, approximately 
10 of the 56 milk plants associated with the Central milk order during 
November 2001 would qualify as ``small businesses,'' constituting about 
17.9 percent of the total.
    Based on these criteria, more than 95 percent of the producers 
would be considered as small businesses. The adoption of the proposed 
pooling standards serves to revise established criteria that determine 
those producers, producer milk, and plants that have a reasonable 
association with, and are consistently serving the fluid needs of, the 
Central milk marketing area and are not associated with other 
marketwide pools concerning the same milk. Criteria for pooling are 
established on the basis of performance levels that are considered 
adequate to meet the Class I fluid needs and, by doing so, 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 identical fashion to 
both large and small businesses and do not have any different economic 
impact on small entities as opposed to large entities. Therefore, the 
proposed amendments will not have a significant economic impact on a 
substantial number of small entities.
    Prior documents in this proceeding:
    Notice of Hearing: Issued October 17, 2001; published October 23, 
2001 (66 FR 53551).
    Tentative Final Decision: Issued November 8, 2002; published 
November 19, 2002 (67 FR 69910).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Central 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 Central 
marketing 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 Central marketing 
area.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof it is found that:
    (1) The Central 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 Central 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 Central order effective March 
1, 2003. Any delay beyond that date would tend to disrupt the orderly 
marketing of milk in the aforesaid marketing areas.
    The interim amendments to these orders are known to handlers. The 
final decision containing the proposed amendments to these orders was 
issued on November 8, 2002.
    The changes that result from these amendments will not require 
extensive

[[Page 7072]]

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 March 1, 2003. It would be contrary to the public interest to 
delay the effective date of these amendments for 30 days after 
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 section 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 Central 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 Central 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 1032

    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 Central 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 1032 reads as follows:

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

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    1. Section 1032.7 is amended by:
    (a) Revising the introductory text of paragraph (c),
    (b) Revising paragraph (c)(1),
    (c) Revising paragraph (c)(2),
    (d) Removing paragraph (c)(4) and redesignating paragraph (c)(5) as 
paragraph (c)(4); and
    (e) Adding a new paragraph (c)(5).
    The revisions read as follows:


Sec.  1032.7  Pool plant.

* * * * *
    (c) A supply plant from which the quantity of bulk fluid milk 
products shipped to (and physically unloaded into) plants described in 
paragraph (c)(1) of this section is not less than 20 percent during the 
months of August through February and 15 percent in all other months of 
the Grade A milk received from dairy farmers (except dairy farmers 
described in Sec.  1032.12(b)) and from handlers described in Sec.  
1000.9(c), including milk diverted pursuant to Sec.  1032.13, subject 
to the following conditions:
    (1) Qualifying shipments may be made to plants described in 
paragraphs (a) or (b) of this section;
    (2) The operator of a pool plant located in the marketing area may 
include as qualifying shipments milk delivered directly from producer's 
farms pursuant to Sec.  1000.9(c) or Sec.  1032.13(c). Handlers may not 
use shipments pursuant to Sec.  1000.9(c) or Sec.  1032.13(c) to 
qualify plants located outside the marketing area;
* * * * *
    (5) Shipments used in determining qualifying percentages shall be 
milk transferred or diverted to and physically received by pool 
distributing plants, less any transfers or diversions of bulk fluid 
milk products from such pool distributing plants.
* * * * *

    2. Section 1032.13 is amended by:
    (a) Revising paragraph (d)(2)
    (b) Redesignating paragraphs (d)(3), (d)(4), and (d)(5), as (d)(4), 
(d)(5), and(d)(6), respectively.
    (c) Adding a new paragraph (d)(3)
    (d) Adding a new paragraph (e).
    The revisions read as follows:


Sec.  1032.13  Producer milk.

* * * * *
    (d) * * *
    (2) Of the 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)) the handler 
diverts to nonpool plants not more than 80 percent during the months of 
August through February, and not more than 85 percent during the months 
of March through July, provided that not less than 20 percent of such 
receipts in the months of August through February and 15 percent of the 
remaining months' receipts are delivered to plants described in Sec.  
1032.7(a) and (b);
    (3) Receipts used in determining qualifying percentages shall be 
milk transferred to or diverted to or physically received by a plant 
described in Sec.  1032.7(a) or (b) less any transfer or diversion of 
bulk fluid milk products from such plants.
* * * * *
    (e) Producer milk shall not include milk of a producer that is 
subject to inclusion and participation in a marketwide equalization 
pool under a milk classification and pricing program imposed under the 
authority of a State government maintaining marketwide pooling of 
returns.
* * * * *

    Dated: February 6, 2003.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 03-3443 Filed 2-11-03; 8:45 am]
BILLING CODE 3410-02-P