[Federal Register Volume 70, Number 69 (Tuesday, April 12, 2005)]
[Proposed Rules]
[Pages 19012-19015]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7271]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 70, No. 69 / Tuesday, April 12, 2005 / 
Proposed Rules  

[[Page 19012]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1000, 1001, 1005, 1006, 1007, 1030, 1032, 1033, 1124, 
1126, and 1131

[Docket No. AO-14-A73, et al.; DA-03-10]


Milk in the Northeast and Other Marketing Areas; Notice of 
Hearing on Proposed Amendments to Tentative Marketing Agreements and 
Orders

------------------------------------------------------------------------
     7 CFR part           Marketing area                AO Nos.
------------------------------------------------------------------------
1001...............  Northeast...............  AO-14-A73
1005...............  Appalachian.............  AO-388-A14
1006...............  Florida.................  AO-356-A37
1007...............  Southeast...............  AO-366-A43
1030...............  Upper Midwest...........  AO-361-A38
1032...............  Central.................  AO-313-A47
1033...............  Mideast.................  AO-166-A71
1124...............  Pacific Northwest.......  AO-368-A34
1126...............  Southwest...............  AO-231-A67
1131...............  Arizona Las-Vegas.......  AO-271-A39
------------------------------------------------------------------------

AGENCY: Agricultural Marketing Service, USDA.

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

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

SUMMARY: A national public hearing is being held to consider proposals 
seeking to amend the Class I fluid milk product definition of all 
Federal milk marketing orders.

DATES: The hearing will convene at 8 a.m. on Monday, June 20, 2005.

ADDRESSES: The hearing will be held at Sheraton Station Square Hotel, 
300 West Station Square Drive, Pittsburgh, PA 15219-1122. Telephone 
Number: (412) 261-2000.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Marketing Specialist, 
USDA/AMS/Dairy Programs, Order Formulation and Enforcement Branch, Stop 
0231-Room 2971, 1400 Independence Avenue, SW., Washington, DC 20250-
0231, (202) 690-1366, e-mail address: [email protected].
    Persons requiring a sign language interpreter or other special 
accommodations should contact David Z. Walker, Market Administrator, at 
(330) 225-4758; email address: [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 Sheraton 
Station Square Hotel, 300 West Station Square Drive, Pittsburgh, 
Pennsylvania beginning at 8 a.m., on Monday, June 20, 2005, with 
respect to proposed amendments to the tentative marketing agreements 
and to the orders regulating the handling of milk in the Northeast and 
other marketing areas.
    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 which relate to the proposed 
amendments, hereinafter set forth, and any appropriate modifications 
thereof, to the tentative marketing agreements and to the orders.
    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.
    Interested parties who wish to introduce exhibits should provide 
the Presiding Officer at the hearing with (6) 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 Parts 1000, 1001, 1005, 1006, 1007, 1030, 
1032, 1033, 1124, 1126, and 1131

    Milk marketing orders.

PARTS 1000, 1001, 1005, 1006, 1007, 1030, 1032, 1033, 1124, 1126, 
AND 1131--[AMENDED]

    The authority citation for 7 CFR Parts 1000, 1001, 1005, 1006, 
1007, 1030, 1032, 1033, 1124, 1126, and 1131 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.

[[Page 19013]]

Proposed by Dairy Farmers of America, Inc.

Proposal No. 1

    This proposal seeks to amend the fluid milk product definition to 
include products formulated using milk or milk solids for beverage 
consumption by removing the 6.5 percent nonfat milk solids standard.
    1. Amend Sec.  1000.15 by revising paragraphs (a) and (b)(1), to 
read as follows:


Sec.  1000.15  Fluid milk product.

    (a) Except as provided in paragraph (b) of this section, fluid milk 
product means any product containing milk or milk products in fluid or 
frozen form containing less than 9 percent butterfat that are intended 
to be used as beverages, including any beverage products that are 
flavored, cultured, modified with added nonfat solids, sterilized, 
concentrated, or reconstituted. As used in this part, the term 
concentrated milk means milk that contains not less than 25.5 percent, 
and not more than 50 percent, total milk solids.
    (b) * * *
    (1) Plain or sweetened evaporated milk/skim milk, sweetened 
condensed milk/skim milk, formulas especially prepared for infant 
feeding or dietary use (meal replacement) that are packaged in 
hermetically-sealed containers, and whey; and
* * * * *

Proposal No. 2

    This proposal seeks to amend the fluid milk product definition to 
include any dairy ingredient, including whey, when calculating the milk 
contained in a product on a protein-equivalent or nonfat solids 
equivalent basis.

Proposed by O-AT-KA Milk Products Cooperative, Inc.

Proposal No. 3

    This proposal seeks to amend the fluid milk product definition by 
adding a true-protein standard. In determining the protein content and 
milk equivalent of a product, the proposal seeks to include all dairy 
solids--such as caseinates, milk protein concentrates and whey 
protein--and non-dairy sources while pricing only the milk equivalent 
of the dairy solids. Furthermore, this proposal seeks to add exemptions 
for alcoholic beverages containing dairy ingredients and formulas 
prepared for dietary use (meal replacements or nutritional supplements) 
having a true-protein content from any source greater than 6.2 percent 
on a protein-equivalent basis.
    1. Amend Sec.  1000.15 by revising paragraph (b)(1), redesignating 
paragraph (b)(2) as paragraph (b)(4), and adding new paragraphs (b)(2) 
and (b)(3) to read as follows:


Sec.  1000.15  Fluid milk product.

* * * * *
    (b) * * *
    (1) Plain or sweetened evaporated milk/skim milk and sweetened 
condensed milk/skim milk,
    (2) The following products packaged in containers that are shelf 
stable at ambient temperatures:
    (i) Formulas especially prepared for infant feeding;
    (ii) Formulas especially prepared for meal replacement and contain 
at least 25 percent of the Daily Values per serving reference amounts 
defined by the Food and Drug Administration in 21 CFR 101.9 for 
calories and protein and at least 16 of the 25 listed vitamins and 
minerals.
    (iii) Formulas especially prepared for high protein drinks and have 
a true protein solids content greater than 8 percent.
    (iv) Beverages that contain alcohol and are licensed by the Federal 
Tax and Trade Bureau, U.S. Department of the Treasury, and
    (v) Packaged milk products that are specifically formulated and 
labeled for animal use.
    (3) Any product that contains by weight less than 6.5 percent 
nonfat milk solids and 2.24 percent true protein. Provided further that 
all protein sources (including non-dairy sources) will be included in 
establishing the true protein content of the beverage product.
* * * * *

Proposed by Select Milk Producers Inc. and Continental Dairy Products, 
Inc.

Proposal No. 4

    This proposal seeks to amend the fluid milk product definition by 
including only stand-alone beverages that are determined by a skim-
equivalent standard, removing the 6.5 percent nonfat milk solids 
standard, and excluding other dairy products in fluid form that are not 
intended to be used as stand-alone beverages.
    1. Amend Sec.  1000.15 by revising paragraphs (a) and (b)(1), 
redesignating paragraph (b)(2) as paragraph (b)(3), and adding new 
paragraphs (b)(2) and (c), to read as follows:


Sec.  1000.15  Fluid milk product.

    (a) Except as provided in paragraph (b) of this section, fluid milk 
product means any product containing milk or milk products in fluid or 
frozen form that is intended to be used as a stand-alone beverage. 
Fluid milk product includes any beverage products that are flavored, 
cultured, modified with added nonfat solids, sterilized, concentrated, 
or reconstituted. As used in this part, the term concentrated milk 
means milk that contains not less than 25.5 percent and not more than 
50 percent total milk solids.
    (b) * * *
    (1) Plain or sweetened evaporated milk/skim milk, sweetened 
condensed milk/skim milk, formulas especially prepared for infant 
feeding or dietary use (meal replacement) that are packaged in 
hermetically-sealed containers, and whey;
    (2) Products such as half-and-half, light cream, heavy cream, and 
whipping creams which, although fluid in form, are not intended for use 
as stand-alone beverages; and
    (3) * * *
    (c) The quantity of milk that is used in a product defined in 
paragraph (a) of this section shall be determined on a skim-equivalent 
basis.

Proposed by H.P. Hood LLC

Proposal No. 5

    This proposal seeks to amend the fluid milk product definition to 
include any product that, based upon substantial evidence as determined 
by the Department, directly competes with other fluid milk products and 
whose classification would enhance producer revenues.
    1. Amend Sec.  1000.15 by revising paragraph (b)(2), to read as 
follows:


Sec.  1000.15  Fluid milk product.

* * * * *
    (b) * * *
    (2) The quantity of skim milk equivalent in any modified product 
specified in paragraph (a) of this section that is greater than an 
equal volume of an unmodified product of the same nature and butterfat 
content, provided that any product that would otherwise be excluded 
from the fluid milk product definition because it contains by weight 
less than 6.5 percent nonfat milk solids will nonetheless be deemed a 
fluid milk product if the Department makes a written determination, 
based on substantial evidence, that:
    (i) The product directly competes with other fluid milk products; 
and
    (ii) Treating the product as a fluid milk product will enhance 
producer revenues under the orders, taking into account both the 
revenues generated by the minimum class price resulting from that 
classification and the impact of that class price on consumer demand 
for the

[[Page 19014]]

product and the substitution of non-dairy ingredients.

Proposal No. 6

    As an alternative to Proposal 5, this proposal seeks to amend the 
fluid milk product definition by authorizing, but not requiring, the 
Department to determine a product's nonfat milk solids content by 
applying only a skim milk equivalent standard with respect to any dried 
dairy ingredient.
    1. Amend Sec.  1000.15 by revising paragraph (b)(2), to read as 
follows:


Sec.  1000.15  Fluid milk product.

* * * * *
    (b) * * *
    (2) The quantity of skim milk equivalent in any modified product 
specified in paragraph (a) of this section that is greater than an 
equal volume of an unmodified product of the same nature and butterfat 
content, provided that, in determining whether a product contains by 
weight less than 6.5 percent nonfat milk solids, the Department shall 
be authorized, but not required to apply that test on a skim milk 
equivalent basis only with respect to any dairy ingredient utilized in 
dried form.

Proposed by National Milk Producers Federation

Proposal No. 7

    This proposal seeks to amend the fluid milk product definition by 
removing the reference to the 6.5 percent nonfat milk solids standard 
and whey, and adopting a milk protein standard.
    1. Amend Sec.  1000.15 by revising paragraph (b)(1), to read as 
follows:


Sec.  1000.15  Fluid milk product.

* * * * *
    (b) * * *
    (1) Plain or sweetened evaporated milk/skim milk, sweetened 
condensed milk/skim milk, formulas especially prepared for infant 
feeding or dietary use (meal replacement) that are packaged in 
hermetically-sealed containers, and any product that contains by weight 
less than 2.25 percent milk protein; and
* * * * *

Proposed by The Dannon Company Inc.

Proposal No. 8

    This proposal seeks to amend the fluid milk product definition by 
excluding yogurt-containing beverages.
    1. Amend Sec.  1000.15 by revising paragraph (b)(1), to read as 
follows:


Sec.  1000.15  Fluid milk product.

* * * * *
    (b) * * *
    (1) Plain or sweetened evaporated milk/skim milk, sweetened 
condensed milk/skim milk, formulas especially prepared for infant 
feeding or dietary use (meal replacement) that are packaged in 
hermetically-sealed containers, yogurt-containing beverages, any 
product that contains by weight less than 6.5 percent nonfat milk 
solids, and whey; and
* * * * *

Proposed by General Mills, Inc.

Proposal No. 9

    This proposal seeks to amend the fluid milk product definition to 
exclude drinkable food products with no more than 2.2 percent skim milk 
protein provided the product contains at least 20 percent yogurt 
(nonfat yogurt, lowfat yogurt or yogurt) by weight.

Proposed by Novartis Nutrition Corporation

Proposal No. 10

    This proposal seeks to amend the fluid milk product definition to 
exclude formulas prepared for dietary use by removing the words ``(meal 
replacement) that are packaged in hermitically-sealed containers.'' The 
proposal removes the 6.5 percent nonfat milk solids standard.
    1. Amend Sec.  1000.15 by revising paragraph (b)(1), to read as 
follows:


Sec.  1000.15  Fluid milk product.

* * * * *
    (b) * * *
    (1) Plain or sweetened evaporated milk/skim milk, sweetened 
condensed milk/skim milk, formulas especially prepared for infant 
feeding or dietary use, and whey; and
* * * * *

Proposed by Hormel Foods, LLC

Proposal No. 11

    This proposal seeks to amend the fluid milk product definition and 
the corresponding classification of milk utilization provision to 
exclude health-care beverages as fluid milk products.
    1. Amend Sec.  1000.15 by revising paragraph (b)(1) to read as 
follows:


Sec.  1000.15  Fluid milk product.

* * * * *
    (b) * * *
    (1) Plain or sweetened evaporated milk/skim milk, sweetened 
condensed milk/skim milk, formulas especially prepared for infant 
feeding, nutrient enhanced (fortified) formulas especially prepared for 
the health care industry or dietary use (meal replacement) that are 
packaged in hermetically-sealed containers, any product that contains 
by weight less than 6.5 percent nonfat milk solids, and whey; and
* * * * *
    2. Amend Sec.  1000.40 by revising paragraph (b)(2)(vi) to read as 
follows:


Sec.  1000.40  Classes of utilization.

* * * * *
    (b) * * *
    (2) * * *
    (vi) Formulas especially prepared for infant feeding; nutrient 
enhanced (fortified) formulas especially prepared for the health care 
industry, or dietary use (meal replacement) that are packaged in 
hermetically-sealed containers;
* * * * *

Proposed by Dairy Programs, Agricultural Marketing Service

Proposal No. 12

    For all Federal Milk Marketing Orders, make such changes as may be 
necessary to make the entire marketing agreements and the orders 
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 each of the aforesaid marketing areas, 
or from the Hearing Clerk, United States Department of Agriculture, 
STOP 9200--Room 1083, 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; and
    Dairy Programs, Agricultural Marketing Service (Washington office) 
and the Offices of all Market Administrators.
    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.


[[Page 19015]]


    Dated: April 6, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-7271 Filed 4-11-05; 8:45 am]
BILLING CODE 3410-02-P