[Federal Register Volume 69, Number 36 (Tuesday, February 24, 2004)]
[Rules and Regulations]
[Pages 8327-8328]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-3952]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1135

[Docket No. AO-380-A18; DA-01-08-W]


Milk in the Western Marketing Area; Termination of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule terminates the Western Federal milk marketing order, 
effective April 1, 2004. A referendum held to determine approval by 
producers did not obtain the necessary two-thirds percent for adopting 
the amended order. In these circumstances, the continuation of the 
existing Western order would not be in conformity with the declared 
policy of the Agricultural Marketing Agreement Act (AMAA), the statute 
providing for milk marketing orders.

EFFECTIVE DATE: April 1, 2004.

FOR FURTHER INFORMATION CONTACT:  Gino M. Tosi, Marketing Specialist, 
Order Formulation and Enforcement Branch, USDA/AMS/Dairy Programs, Stop 
0231--Room 2971, 1400 Independence Avenue, SW., Washington, DC 20250-
0231, (202) 690-1366, e-mail address: [email protected].

SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act (5 U.S.C. 
601-612) requires the Agency to examine the impact of a proposed rule 
on small entities. Pursuant to 5 U.S.C. 605(b), the Administrator of 
the Agricultural Marketing Service has certified that this rule will 
not have a significant economic impact on a substantial number of small 
entities. 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 proposed action will not have a significant economic impact on a 
substantial number of small entities. This rule would eliminate the 
regulatory impact of the order on dairy farmers and regulated handlers. 
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. In the Western Federal 
milk order 550 of the 860 dairy producers (farmers), or 64 percent, 
whose milk was pooled under the order in June 2003 would meet the 
definition of small businesses. On the processing side, 15 of the 42 
milk plants or 36 percent associated with the Western milk order during 
June 2003 would qualify as ``small businesses''.
    This rule terminates the Western Federal milk marketing order, 
effective April 1, 2004. It is likely that market conditions would tend 
to become less orderly or stable. However, it must be assumed that the 
consequences of the termination of the Western order have been 
considered by those producers who rejected the proposed amended order, 
and that possibly other methods have or will be made to replace the 
stabilizing influence of the marketing order. Less than two-thirds 
percent of the voting producers in the referendum approved the issuance 
of the proposed amended order.
    The Department is issuing this rule in conformance with Executive 
Order 12866.
    This final rule has been reviewed under Executive Order 12778, 
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 file with 
the Secretary a petition stating that the order, any provisions of the 
order, or any obligation imposed in connection with the order is not in 
accordance with the law and may request a modification of an order or 
to be exempted from the order. After a hearing, the Secretary would 
rule on the petition. The Act provides that the 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.
    This order of termination is issued pursuant to the provisions of 
the Agricultural Marketing Agreement Act and of the order regulating 
the handling of the milk in the Western marketing area.

Prior Documents in This Proceeding:

    Proposed Termination of Order: Issued January 7, 2004; published 
January 13, 2004 (69 FR 1957).
    Tentative Final Decision: Issued August 8, 2003; published August 
18, 2003 (68 FR 49375).

Statement of Consideration

    This rule terminates the Western Federal milk marketing order, 
effective April 1, 2004.
    In total, eight comments were received from interested parties. 
Five comments were from dairy interests regulated under the terms of 
the Western milk marketing order. Of these five comments, two supported 
termination and three expressed support for retaining the current 
Western order.
    Three interested parties who are not regulated or pool milk on the 
Western order also submitted comments. Of these three comments, one 
comment did not either support or oppose termination and two supported 
retaining the current Western order.
    Comments that supported retaining the current Western order 
expressed concern for the potential consequences to producers in other 
Federal milk

[[Page 8328]]

marketing orders if the Western order is terminated. In this regard, 
concerns were offered, most notably, that milk currently pooled on the 
Western order would seek to be pooled on other orders which may give 
rise to disorderly marketing conditions in other markets and lower 
prices received by producers who pool milk under the terms of another 
milk marketing order.
    One comment that supported the termination of the Western order was 
of the opinion that the current and the proposed amended Western order 
harmed specific dairy interests in Utah. A second comment supporting 
termination of the Western order stressed the dairy-farmer orientation 
of the Federal milk marketing order program and that the Agricultural 
Marketing Agreement Act (AMAA) (the enabling legislation for milk 
marketing orders) requires the proper endorsement of producers before 
milk order regulations can be implemented. This comment stressed that 
the Western order lacks this needed endorsement. In this regard, the 
comment stressed that the lack of the required two-thirds support of 
producers leaves the Department with no other recourse than to 
terminate the Western order so as to be in conformity with the 
requirements of the AMAA.
    Termination of the Western order will remove government enforcement 
of minimum prices to handlers and to producers that are established by 
the order. It will also remove other stabilizing features of the 
regulatory program such as: An impartial audit of handler records to 
insure payment to dairy farmers and to verify the reported uses of 
milk; the assurance to farmers of accurate weighing, testing, 
classification and accounting for milk; and the existence of marketing 
information to evaluate market performance. Thus, it is likely that 
market conditions would tend to become less orderly or stable. However, 
it must be assumed that the consequences of the termination of the 
Western order have been considered by those producers who rejected the 
proposed amended order, and that possibly other methods have or will be 
made to replace the stabilizing influence of the marketing order.
    Regardless of the possible economic effects of terminating the 
Western order, a termination is required by the AMAA. As stated in the 
proposed termination, less than two-thirds percent of the voting 
producers in the referendum approved the issuance of the proposed 
amended order. In these circumstances, where it has been determined 
that the order should be amended to effectuate the declared policy of 
the AMAA, and that the amended order was not approved by producers, it 
is concluded that the existing Western order should be terminated 
because it is not in conformity with the AMAA.

List of Subjects in 7 CFR Part 1135

    Milk marketing orders.

Order

    It is therefore ordered, that the terms and provisions of the 
order, as amended, regulating the handling of milk in the Western 
marketing area (7 CFR part 1135), except Sec.  1135.1 which 
incorporates the General Provisions in Part 1000, are hereby 
terminated, effective on April 1, 2004.

0
Accordingly, 7 CFR part 1135 is amended as follows:

PART 1135--MILK IN THE WESTERN MARKETING AREA

0
1. The authority citation for 7 CFR Part 1135 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674 and 7253.


Sec. Sec.  1135.2 through 1135.86  [Removed]

0
2. Sections 1135.2 through 1135.86 and the undesignated center headings 
in part 1135 are removed, effective on April 1, 2004.

    Dated: February 18, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-3952 Filed 2-19-04; 3:20 pm]
BILLING CODE 3410-02-P