[Federal Register Volume 69, Number 183 (Wednesday, September 22, 2004)]
[Proposed Rules]
[Pages 56725-56730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21281]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1032

[Docket No. AO-313-A48; DA-04-06]


Milk in the Central Marketing Area; Notice of Hearing on Proposed 
Amendments To Tentative Marketing Agreement and Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule; Notice of public hearing on proposed rulemaking.

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SUMMARY: A public hearing is being held to consider proposals that 
would amend certain pooling and related provisions of the Central 
Federal milk marketing order (Order 32). Proposals under consideration 
would: modify performance standards for supply plants, adjust diversion 
limits, modify the ``touch base'' provision, limit the pooling of milk 
that was not pooled in prior months and establish transportation and 
assembly credits for the order. Additional proposals under 
consideration would: Eliminate all supply plant provisions, establish a 
``dairy farmer for other markets'' provision, eliminate or modify 
``split plant'' provisions, eliminate or modify system pooling for 
supply plants and modify the payment date from the producer settlement 
fund to handlers.

DATES: The hearing will convene at 1 p.m. on Monday, October 18, 2004.

ADDRESSES: The hearing will be held at the Hilton Kansas City Airport, 
8801 NW. 112th Street, Kansas City, Missouri 64153; (816) 891-8900.

FOR FURTHER INFORMATION CONTACT: Jack Rower, Marketing Specialist, 
Order Formulation and Enforcement Branch, USDA/AMS/Dairy Programs, Stop 
0231--Room 2971, 1400 Independence Avenue, SW., Washington, DC 20250-
0231, (202) 720-2357, e-mail address: [email protected].
    Persons requiring a sign language interpreter or other special 
accommodations should contact Bob Vanderlinden at (913) 495-9313 or 
Dave Stukenberg at (913) 495-9326; e-mail 
[email protected] before the hearing begins.

SUPPLEMENTARY INFORMATION: This administrative action 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.
    Notice is hereby given of a public hearing to be held at the Hilton 
Kansas City Airport, 8801 NW. 112th Street, Kansas City, Missouri 
64153; (816) 891-8900, beginning at 1 p.m., on Monday, October 18, 
2004, with respect to proposed amendments to the tentative marketing 
agreement and to the order regulating the handling of milk in the 
Central milk marketing area.
    The hearing is called 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).
    The purpose of the hearing is to receive evidence with respect to 
the economic and marketing conditions that relate to the proposed 
amendments, hereinafter set forth, and any appropriate modifications 
thereof, to the tentative marketing agreement and to the order.

[[Page 56726]]

    Evidence also will be taken at the hearing to determine whether 
emergency marketing conditions exist that would warrant omission of a 
recommended decision under the rules of practice and procedure (7 CFR 
900.12(d)) with respect to any proposed amendments.
    Actions under the Federal milk order program are subject to the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). This Act seeks to 
ensure that, within the statutory authority of a program, the 
regulatory and informational requirements are tailored to the size and 
nature of small businesses. For the purpose of the Act, a dairy farm is 
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. Most parties subject to a milk order 
are considered as a small business. Accordingly, interested parties are 
invited to present evidence on the probable regulatory and 
informational impact of the hearing proposals on small businesses. 
Also, parties may suggest modifications of these proposals for the 
purpose of tailoring their applicability to small businesses.
    The amendments to the rules proposed herein have been reviewed 
under Executive Order 12988, Civil Justice Reform. They are not 
intended to have a retroactive effect. If adopted, the proposed 
amendments would not preempt any state or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Agricultural Marketing Agreement Act provides that 
administrative proceedings must be exhausted before parties may file 
suit in court. Under section 8c(15)(A) of the Act, any handler subject 
to an order may request modification or exemption from such order by 
filing with the Department of Agriculture (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.
    This public hearing is being conducted to collect evidence for the 
record concerning inequities among producers caused by provisions that 
allow reserve milk, which is used in cheese, butter, or nonfat dry milk 
production, to share in the benefits of pooling, but do not require 
such milk to pool when there is a cost (when the Class III price or 
Class IV price is above the blend price). At the hearing, evidence will 
also be collected to consider changes in pooling standards and other 
related provisions including shipping standards, diversion limits, 
``touch base'' requirements, establishment of transportation and 
assembly credits, and modification of the payment date from the 
producer settlement fund to handlers.
    Interested parties who wish to introduce exhibits should provide 
the Presiding Officer at the hearing with (4) copies of such exhibits 
for the Official Record. Also, it would be helpful if additional copies 
are available for the use of other participants at the hearing.

List of Subjects in 7 CFR Part 1032

    Milk marketing orders.

    The authority citation for 7 CFR Part 1032 continues to read as 
follows:

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

    The proposed amendments, as set forth below, have not received the 
approval of the Department.

Proposal No. 1

Proposed by Dairy Farmers of America, Inc., and Prairie Farms 
Cooperative

    This proposal would increase for all months the amount of milk a 
supply plant would need to ship to a pool distributing plant in order 
to be pooled. In addition, this proposal would limit the states from 
which milk could be diverted in order to maintain pool status, 
establish a minimum ``touch base'' requirement of at least one day a 
month during August through November and January through February in 
order to maintain association with the pool, and reduce for all months 
the diversion limits.
    1. Amend Sec.  1032.7 by revising paragraph (c) introductory text 
to 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 25 percent during the 
months of August through February and 20 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:
* * * * *
    2. Amend Sec.  1032.13 by revising paragraphs (d) introductory text 
and (d)(1), redesignating paragraphs (d)(2) through (6) as paragraphs 
(d)(4) through (8), adding new paragraphs (d)(2) and (d)(3), and 
revising redesignated paragraph (d)(4) to read as follows:


Sec.  1032.13  Producer milk.

* * * * *
    (d) Diverted by the operator of a pool plant or a cooperative 
association described in Sec.  1000.9(c) located in the States of 
Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, New 
Mexico, Oklahoma, South Dakota and Wisconsin to a nonpool plant subject 
to the following conditions:
    (1) Milk of a dairy farmer shall not be eligible for diversion 
until milk of such dairy farmer has been physically received as 
producer milk at a pool plant and the dairy farmer has continuously 
retained producer status since that time. If a dairy farmer loses 
producer status under the order in this part (except as a result of a 
temporary loss of Grade A approval), the dairy farmer's milk shall not 
be eligible for diversion until milk of the dairy farmer has been 
physically received as producer milk at a pool plant;
    (2) The equivalent of at least one day's milk production is caused 
by the handler to be physically received at a pool plant in each of the 
months of August through November and January through February;
    (3) The equivalent of at least one days' milk production is caused 
by the handler to be physically received at a pool plant in each of the 
months of March through July and December if the requirement of 
paragraph (d)(2) of this section (Sec.  1032.13) in each of the prior 
months of August through November and January through February 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 or January 
through February.
    (4) 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 75 percent during the months of 
August through February, and not more than 80 percent during the months 
of March through July, provided that not less than 25 percent of such 
receipts in the months of August through February and 20 percent of the 
remaining months'

[[Page 56727]]

receipts are delivered to plants described in Sec.  1032.7(a) and (b);
* * * * *

Proposal No. 2

Proposed by Dairy Farmers of America, Inc., and Prairie Farms 
Cooperative

    This proposal would limit the pooling of milk normally associated 
with the market that was not pooled in a prior month to 125 percent of 
the producer milk receipts pooled by a handler during the prior month.
    Amend Sec.  1032.13 by adding new paragraph (f) to read as follows:


Sec.  1032.13  Producer milk.

* * * * *
    (f) The quantity of milk reported by a handler pursuant to Sec.  
1032.30(a)(1) and/or Sec.  1032.30(c)(1) for the current month may not 
exceed 125 percent of the producer milk receipts pooled by the handler 
during the prior month. Milk diverted to nonpool plants reported in 
excess of this limit shall be removed from the pool. Milk received at 
pool plants in excess of the 125 percent limit, other than pool 
distributing plants, shall be classified pursuant to Sec.  
1000.44(a)(3)(v). The handler must designate, by producer pick-up, 
which milk is to be removed from the pool. If the handler fails to 
provide this information the provisions of Sec.  1032.13(d)(5) shall 
apply. The following provisions apply:
    (1) Milk shipped to and physically received at pool distributing 
plants shall not be subject to the 125 percent limitation;
    (2) Producer milk qualified pursuant to Sec.  ----.13 of any other 
Federal order in the previous month shall not be included in the 
computation of the 125 percent limitation, provided that the producers 
comprising the milk supply have been continuously pooled on any Federal 
order for the entirety of the most recent three consecutive months.
    (3) The market administrator may waive the 125 percent limitation:
    (i) For a new handler on the order, subject to the provisions of 
Sec.  1032.13(f)(3), or
    (ii) For an existing handler with significantly changed milk supply 
conditions due to unusual circumstances;
    (4) A bloc of milk may be considered ineligible for pooling if the 
market administrator determines that handlers altered the reporting of 
such milk for the purpose of evading the provisions of this paragraph.

Proposal No. 3

Proposed by Foremost Farms USA Cooperative, Associated Milk Producers 
Inc., First District Association, and Land O'Lakes, Inc. (Foremost, et 
al.)

    This proposal would add a transportation credit to recover part of 
the shipping costs and an assembly credit for recovery of a portion of 
the overhead and procurement costs involved in service to the market. 
The proposal would establish a ``milk reload station'' provision to 
implement the credits.
    1. Add Sec.  1032.20 to read as follows:


Sec.  1032.20  Milk reload station.

    Milk reload station means a location that is used as a reload point 
for transferring bulk milk directly from one tank truck to another.
    2. Add Sec.  1032.55 to read as follows:


Sec.  1032.55  Transportation credits and assembly credits.

    (a) Each handler operating a pool supply plant described in Sec.  
1032.7(c) or (f) that transfers bulk milk, or a milk reload station 
described in Sec.  1032.20 that delivers bulk milk to a pool 
distributing plant described in 1032.7(a), (b), or (e) shall receive a 
transportation credit for such milk computed as follows:
    (1) Determine the hundredweight of milk eligible for the credit by 
completing the steps in paragraph (c) of this section;
    (2) Multiply the hundredweight of milk eligible for the credit by 
0.30 cents ($0.003) times the number of miles between the transferor 
plant and the transferee plant (not to exceed 500 miles);
    (3) Subtract the effective Class I price at the transferor plant 
from the effective Class I price at the transferee plant;
    (4) Multiply any positive amount resulting from the subtraction in 
paragraph (a)(3) of this section by the hundredweight of milk eligible 
for the credit; and
    (5) Subtract the amount computed in (a)(4) of this section from the 
amount computed in paragraph (a)(2) of this section. If the amount 
computed in paragraph (a)(4) of this section exceeds the amount 
computed in paragraph (a)(2) of this section, the transportation credit 
shall be zero.
    (b) Each handler operating a pool distributing plant described in 
Sec.  1032.7(a), (b), or (e) that receives milk from dairy farmers, 
each handler that transfers or diverts bulk milk from a pool plant to a 
pool distributing plant, and each handler described in Sec.  1000.9(c) 
that delivers milk to a pool distributing plant shall receive an 
assembly credit on the portion of such milk eligible for the credit 
pursuant to paragraph (c) of this section. The credit shall be computed 
by multiplying the hundredweight of milk eligible for the credit by 10 
cents.
    (c) The following procedure shall be used to determine the amount 
of milk eligible for transportation and assembly credits pursuant to 
paragraphs (a) and (b) of this section:
    (1) At each pool distributing plant, determine the aggregate 
quantity of Class I milk, excluding beginning inventory of packaged 
fluid milk products;
    (2) Subtract the quantity of packaged fluid milk products received 
at the pool distributing plant from other pool plants and from nonpool 
plants if such receipts are assigned to Class I;
    (3) Subtract the quantity of bulk milk shipped from the pool 
distributing plant to other plants to the extent that such milk is 
classified as Class I milk;
    (4) Subtract the quantity of bulk milk received at the pool 
distributing plant from other order plants and unregulated supply 
plants that is assigned to Class I pursuant to Sec. Sec.  1000.43(d) 
and 1000.44; and
    (5) Assign the remaining quantity pro rata to physical receipts 
during the month from:
    (i) Producers;
    (ii) Handlers described in Sec.  1000.9(c); and
    (iv) Other pool plants.
    (d) For purposes of this section, the distances to be computed 
shall be determined by the market administrator using the shortest 
available state and/or Federal highway mileage. Mileage determinations 
are subject to redetermination at all times. In the event a handler 
requests a redetermination of the mileage pertaining to any plant, the 
market administrator shall notify the handler of such redetermination 
within 30 days after the receipt of such request. Any financial 
obligations resulting from a change in mileage shall not be retroactive 
for any periods prior to the redetermination by the market 
administrator.
    3. Amend Sec.  1032.60 by adding a new paragraph (k) to read as 
follows:


Sec.  1032.60  Handler's value of milk.

* * * * *
    (k) Compute the amount of credits applicable pursuant to Sec.  
1032.55.

Proposal No. 4

Proposed by Dean Foods Company

    This proposal would eliminate all supply plant provisions.

[[Page 56728]]

    Amend Sec.  1032.7 by removing paragraphs (c), (d), (f) and (g) and 
revise Sec.  1032.9 to read as follows:


Sec.  1032.9  Handler.

    Handler means:
    (a) Any person who operates a pool plant or a nonpool plant.
    (b) Any person who receives packaged fluid milk products from a 
plant for resale and distribution to retail or wholesale outlets, any 
person who as a broker negotiates a purchase or sale of fluid milk 
products or fluid cream products from or to any pool or nonpool plant, 
and any person who by purchase or direction causes milk of producers to 
be picked up at the farm and/or moved to a plant. Persons who qualify 
as handlers only under this paragraph under any Federal milk order are 
not subject to the payment provisions of Sec. Sec.  ----.70, ----.71, 
----.72, ----.73, ----.76, and ----.85 of that order.
    (c) Any organization with respect to milk that it receives for its 
account from the farm of a producer and delivers to pool plants or 
diverts to nonpool plants pursuant to Sec.  ----.13 of the order. The 
operator of a pool plant receiving milk from such organization may be 
the handler for such milk if both parties notify the market 
administrator of this agreement prior to the time that the milk is 
delivered to the pool plant and the plant operator purchases the milk 
on the basis of farm bulk tank weights and samples.

Proposal No. 5

Proposed by Dean Foods Company

    This proposal would increase supply plant shipping standards by 20 
percentage points, from 15 percent to 35 percent, for the month of 
July; 15 percentage points, from 20 percent to 35 percent, for the 
months of August through January; 5 percentage points, from 20 percent 
to 25 percent, for the month of February; and 10 percentage points, 
from 15 percent to 25 percent, for the months of March through June. 
This proposal would also require the milk of a dairy farmer to ``touch 
base'' for four days during the months of July through November in 
order for the milk to be diverted and would establish diversion limits 
of 65 percent for the months of July through January and 75 percent for 
the months of February through June.
    1. Amend Sec.  1032.7 by revising paragraph (c) introductory text 
to 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 35 percent during the 
months of July through January and 25 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:
* * * * *
    2. Amend Sec.  1032.13 by redesignating paragraphs (d)(3) through 
(6) as paragraphs (d)(5) through (8), revising paragraphs (d)(1) and 
(2), and adding paragraphs (d)(3) and (4) to read as follows:


Sec.  1032.13  Producer milk.

* * * * *
    (d) * * *
    (1) Milk of a dairy farmer shall not be eligible for diversion 
until milk of such dairy farmer has been physically received as 
producer milk at a pool plant and the dairy farmer has continuously 
retained producer status since that time. If a dairy farmer loses 
producer status under the order in this part (except as a result of 
loss of Grade A approval not to exceed 10 days), the dairy farmer's 
milk shall not be eligible for diversion until milk of the dairy farmer 
has been physically received as producer milk at a pool plant;
    (2) The equivalent of at least four days' milk production is caused 
by the handler to be physically received at a pool plant in each of the 
months of July through November;
    (3) The equivalent of at least four days' milk production is caused 
by the handler to be physically received at a pool plant in each of the 
months of December through June if the requirement of paragraph (d)(2) 
of this section (Sec.  1032.13) in each of the prior months of July 
through January are not met, except in the case of a dairy farmer who 
did not market any Grade A milk during each of the prior months of July 
through January.
    (4) 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 65 percent during the months of 
July through January, and not more than 75 percent during the months of 
February through June, provided that not less than 35 percent of such 
receipts in the months of July through January and 25 percent of the 
remaining months' receipts are delivered to plants described in Sec.  
1032.7(a) and (b);
* * * * *

Proposal No. 6

Proposed by Dean Foods Company

    This proposal would establish a dairy farmer for other markets 
provision that would require a year round commitment in order for milk 
to be pooled.
    Amend Sec.  1032.12 by adding a new paragraph (b)(5) to read as 
follows:


Sec.  1032.12  Producer.

* * * * *
    (b) * * *
    (5) For any month, any dairy farmer whose milk is received at a 
pool plant or by a cooperative association handler described in Sec.  
1000.9(c), if the pool plant operator or the cooperative association 
caused milk from the same farm to be delivered to any plant as other 
than producer milk, as defined under the order in this part or any 
other Federal milk order, during the month or any of the preceding 11 
months, unless the equivalent of at least ten days' milk production has 
been physically received otherwise as producer milk at a pool 
distributing plant during the month.

Proposal No. 7

Proposed by Dean Foods Company

    This proposal would establish a dairy farmer for other markets 
provision that would require a 2 to 4 month commitment in order for 
milk to be pooled.
    Amend Sec.  1032.12 by adding new paragraphs (b)(5) and (b)(6) to 
read as follows:


Sec.  1032.12  Producer.

* * * * *
    (b) * * *
    (5) For any month of February through June, any dairy farmer whose 
milk is received at a pool plant or by a cooperative association 
handler described in Sec.  1000.9(c) if the pool plant operator or the 
cooperative association caused milk from the same farm to be delivered 
to any plant as other than producer milk, as defined under the order in 
this part or any other Federal milk order, during the month, any of the 
3 preceding months, or during any of the preceding months of July 
through January, unless the equivalent of at least ten days' milk 
production has been physically received otherwise as producer milk at a 
pool distributing plant during the month; and
    (6) For any month of July through January, any dairy farmer whose 
milk is received at a pool plant or by a cooperative association 
handler

[[Page 56729]]

described in Sec.  1000.9(c) if the pool plant operator or the 
cooperative association caused milk from the same farm to be delivered 
to any plant as other than producer milk, as defined under the order in 
this part or any other Federal milk order, during the month or the 
preceding month, unless the equivalent of at least ten days' milk 
production has been physically received otherwise as producer milk at a 
pool distributing plant during the month.

Proposal No. 8

Proposed by Dean Foods Company

    This proposal would limit the pooling of milk normally associated 
with the market that was not pooled in a prior month to 115 percent of 
the producer milk receipts pooled by a handler during the prior month.
    Amend Sec.  1032.13 by adding a new paragraph (f) to read as 
follows:


Sec.  1032.13  Producer milk.

* * * * *
    (f) The quantity of milk reported by a handler pursuant to Sec.  
1032.32(a)(1) and/or Sec.  1032.30(c)(1) may not exceed 115 percent of 
the producer milk receipts pooled by the handler during the prior 
month. Milk diverted to nonpool plants reported in excess of this limit 
shall be removed from the pool by the market administrator. Milk 
received at pool plants, other than pool distributing plants, shall be 
classified pursuant to Sec.  1000.44(a)(3)(v) and Sec.  1000.44(b). The 
handler must designate, by producer pick-up, which milk is to be 
removed from the pool. If the handler fails to provide this 
information, the market administrator will make the determination. The 
following provisions apply:
    (1) Milk shipped to and physically received at pool distributing 
plants shall not be subject to the 115 percent limitation;
    (2) Producer milk qualified pursuant to Sec.  -- .13 of any other 
Federal order and continuously pooled in any Federal order for the 
previous six months shall not be included in the computation of the 115 
percent limitation;
    (3) The market administrator may waive the 115 percent limitation 
utilizing:
    (i) For a new handler on the order, subject to the provisions of 
Sec.  1032.13(f)(3), or
    (ii) For an existing handler with significantly changed milk supply 
conditions due to unusual circumstances;
    (4) The market administrator may increase or decrease the 
applicable limitation for a month consistent with the procedures in 
Sec.  1032.7(g); and
    (5) A bloc of milk may be considered ineligible for pooling if the 
market administrator determines that handlers altered the reporting of 
such milk for the purpose of evading the provisions of this paragraph.

Proposal No. 9

Proposed by Dean Foods Company

    This proposal would eliminate the split plant provision. Amend 
Sec.  1032.7 by removing paragraph (h)(7).

Proposal No. 10

Proposed by Dean Foods Company

    This proposal would require the nonpool side of a split plant to 
maintain nonpool status for at least 12 months as opposed to the 
current ability to return whenever desired.
    Amend Sec.  1032.7 by revising paragraph (h)(7) to read as follows:


Sec.  1032.7  Pool plant.

* * * * *
    (h) * * *
    (7) That portion of a regulated plant designated as a nonpool plant 
that is physically separate and operated separately from the pool 
portion of such plant. The designation of a portion of a plant must be 
requested in advance and in writing by the handler and must be received 
by the market administrator. Such nonpool status shall be effective on 
the first day of the month following receipt of the request by the 
market administrator and thereafter for the longer of twelve (12) 
consecutive months or until notification of the desire to requalify as 
a pool plant, in writing, is received by the market administrator. 
Requalification will require deliveries to a pool distributing plant(s) 
as provided for in Sec.  1032.7(c). For requalification, handlers may 
not use milk delivered directly from producer's farms pursuant to Sec.  
1000.9(c) or Sec.  1032.13(c) for the first month.

Proposal No. 11

Proposed by Dean Foods Company

    This proposal would eliminate system pooling for supply plants and 
the ability for supply plants to qualify for pooling by shipping milk 
directly from producer farms or by diversion.
    Amend Sec.  1032.7 by removing paragraph (f), redesignating 
paragraphs (g) and (h) as paragraphs (f) and (g), and revising 
paragraph (c)(2) to read as follows:


Sec.  1032.7  Pool plant.

* * * * *
    (c) * * *
    (2) The operator of a pool plant under paragraph (c) located in the 
marketing area may not 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;
* * * * *

Proposal No. 12

Proposed by Dean Foods Company

    This proposal would still allow supply plant systems, but would 
only allow a single handler as opposed to the current provision 
allowing multiple handlers to form a system.
    Amend Sec.  1032.7 by revising the introductory text of paragraph 
(f) to read as follows:


Sec.  1032.7  Producer milk.

* * * * *
    (f) A system of supply plants may qualify for pooling if 2 or more 
plants operated by one handler meet the applicable percentage 
requirements of paragraph (c) of this section in the same manner as a 
single plant, subject to the following additional requirements:
* * * * *

Proposal No. 13

    This proposal would require each supply plant pooled within a 
system to ship at least 40 percent of the total milk needed for 
pooling.
    Amend Sec.  1032.7 by revising paragraph (c)(2) and adding a new 
paragraph (f)(5) and to read as follows:


Sec.  1032.7  Pool plant.

* * * * *
    (c) * * *
    (2) The operator of a pool plant located in the marketing area may 
not 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;
* * * * *
    (f) * * *
    (5) Provided no single plant ships less than 40 percent of the 
applicable percentage requirement of paragraph (c) of this section.
* * * * *

Proposal No. 14

Proposed by the Central Order Market Administrator

    This proposal would require payments from the producer settlement 
fund to be made no later than the next business day after the due date 
for

[[Page 56730]]

payments into the producer settlement fund.
    Revise Sec.  1032.72 to read as follows:


Sec.  1032.72  Payments from the producer-settlement fund.

    No later than the next business day following the due date for 
payments to the producer-settlement fund (Sec.  1032.71), the market 
administrator shall pay to each handler the amount, if any, by which 
the amount computed pursuant to Sec.  1032.71(b) exceeds the amount 
computed pursuant to Sec.  1032.71(a). If, at such time, the balance in 
the producer-settlement fund is insufficient to make all payments 
pursuant to this section, the market administrator shall reduce 
uniformly such payments and shall complete the payments as soon as the 
funds are available.

Proposal No. 15

Proposed by Dairy Programs, Agricultural Marketing Service

    Make such changes as may be necessary to make the entire marketing 
agreement and the order conform with any amendments thereto that may 
result from this hearing.
    Copies of this notice of hearing and the orders may be procured 
from the Market Administrator of the aforesaid marketing area, or from 
the Hearing Clerk, United States Department of Agriculture, Room 1083-
STOP 9200, 1400 Independence Avenue, SW., Washington, DC 20250-9200, or 
may be inspected there.
    Copies of the transcript of testimony taken at the hearing will not 
be available for distribution through the Hearing Clerk's Office. If 
you wish to purchase a copy, arrangements may be made with the reporter 
at the hearing.
    From the time that a hearing notice is issued and until the 
issuance of a final decision in a proceeding, Department employees 
involved in the decision-making process are prohibited from discussing 
the merits of the hearing issues on an ex parte basis with any person 
having an interest in the proceeding. For this particular proceeding, 
the prohibition applies to employees in the following organizational 
units: Office of the Secretary of Agriculture; Office of the 
Administrator, Agricultural Marketing Service; Office of the General 
Counsel; Dairy Programs, Agricultural Marketing Service (Washington 
Office) and the Office of the Market Administrator of the Central Milk 
Marketing Area.
    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.

    Dated: September 17, 2004.
A.J. Yates,
Administrator, Agricultural Marketing Service.
[FR Doc. 04-21281 Filed 9-17-04; 3:29 pm]
BILLING CODE 3410-02-P