[Federal Register Volume 69, Number 7 (Monday, January 12, 2004)]
[Rules and Regulations]
[Pages 1654-1655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-399]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1124

[Docket No. AO-368-A30; DA-01-08-PNW]


Milk in the Pacific Northwest Marketing Area; Interim Order 
Amending the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule.

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SUMMARY: This order amends the Producer milk provision of the Pacific 
Northwest milk marketing order to eliminate the ability to 
simultaneously pool the same milk on the order and on a State-operated 
order that provides for marketwide pooling. More than the required 
number of producers on the Pacific Northwest order have approved the 
issuance of the interim order as amended.

EFFECTIVE DATE: February 1, 2004.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Marketing Specialist, 
Stop 0231, Room 2971, USDA/AMS/Dairy Programs, Order Formulation and 
Enforcement 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.
    In the Pacific Northwest Federal milk order, 805 of the 1,164 dairy 
producers (farmers), or about 69 percent, whose milk was pooled under 
the Pacific Northwest Federal milk order at the time of the hearing, 
April 2002, would meet the definition of small businesses. On the 
processing side, 9 of the 20 milk plants associated with the Pacific 
Northwest milk order during April 2002 would qualify as ``small 
businesses,'' constituting about 45 percent of the total.
    Based on these criteria, at least 69 percent of the producers in 
the order would be considered as small businesses. The adoption of the 
proposed pooling standard serves to

[[Page 1655]]

revise established criteria that determine the producer milk that has a 
reasonable association with--and consistently serves the fluid needs 
of--the Pacific Northwest milk marketing area and is 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 established criteria 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 amendment will not have a significant 
economic impact on a substantial number of small entities.
    Prior documents in this proceeding:
    Notice of Hearing: Issued February 26, 2002; published March 4, 
2002 (67 FR 9622).
    Correction to Notice of Hearing: Issued March 14, 2002; published 
March 19, 2002 (67 FR 12488).
    Tentative Final Decision: Issued August 8, 2003; published August 
18, 2003 (68 FR 49375).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Pacific Northwest 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 Pacific Northwest 
marketing area.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof it is found that:
    (1) The Pacific Northwest 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 Pacific Northwest 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 Pacific Northwest order 
effective February 1, 2004. 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 August 8, 2003.
    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 February 1, 2004. 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 Pacific 
Northwest 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 Pacific 
Northwest 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 1124

    Milk marketing orders.

Order Relative to Handling

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It is therefore ordered, that on and after the effective date hereof, 
the handling of milk in the Pacific Northwest 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 1124 reads as follows:

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

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

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1. Section 1124.13 is amended by:
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a. Revising the introductory text; and
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b. Adding a new paragraph (f).
    The revision and addition read as follows:


Sec.  1124.13  Producer milk.

    Except as provided for in paragraph (f) of this section, Producer 
milk means the skim milk (or skim milk equivalent of components of skim 
milk), including nonfat components, and butterfat in milk of a producer 
that is:
* * * * *
    (f) 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: January 5, 2004.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 04-399 Filed 1-9-04; 8:45 am]
BILLING CODE 3410-02-P