[Federal Register Volume 70, Number 69 (Tuesday, April 12, 2005)]
[Rules and Regulations]
[Pages 18961-18963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7273]



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

[[Page 18961]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1001

[Docket No. AO-14-A70; DA-02-01]


Milk in the Northeast Marketing Area; Order Amending the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This final rule amends regulations pertaining to the Northeast 
Federal milk order. More than the required number of producers for the 
Northeast marketing area approved the issuance of the final order 
amendments.

DATES: Effective Date: June 1, 2005.

FOR FURTHER INFORMATION CONTACT: Gino 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: [email protected].

SUPPLEMENTARY INFORMATION: This document amends the pooling and related 
provisions of the Northeast Federal milk order. Specifically, this 
final rule permanently adopts provisions that will establish year-round 
supply plant performance standards, exclude milk received by supply 
plants from producers not eligible to be pooled on the Northeast order 
from supply plant performance standards, remove the ``split-plant'' 
provision, establish a one-day ``touch base'' standard, establish 
explicit diversion limits for pool plants, prohibit the ability to 
simultaneously pool the same milk on the order and a marketwide pool 
administered by another government entity, and grants authority to the 
Market Administrator to adjust the touch-base and diversion limit 
standards as market conditions warrant. Additional amendments that 
amend reporting and payment date provisions are also adopted.
    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.
    The final rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The 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 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 Secretary 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 
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.

Regulatory Flexibility Analysis and Paperwork Reduction Act

    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 
final 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 marketing 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 September 2002, the time of the hearing, there were 16,715 
producers pooled on and 143 handlers regulated by the Northeast order. 
Of these, 97 percent of the producers and 71 percent of the handlers 
would be considered small businesses. The adoption of the proposed 
standards serve to revise and establish criteria that ensure the 
pooling of producers, producer milk, and plants that have a reasonable 
association with, and are consistently serving, the fluid milk needs of 
the Northeast milk marketing area. Criteria for pooling milk are 
established on the basis of performance standards that are considered 
adequate to meet the Class I fluid needs of the market and to 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 amendments to the reporting and payment date provisions 
serve to streamline and simplify handler payments to the market 
administrator. The criteria established in the amended pooling 
standards and reporting and payment date provisions are applied in an 
equal fashion to both large and small businesses. Therefore, the 
amendments will not have a significant economic impact on a substantial 
number of small entities.
    A review of reporting requirements was completed under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). It was 
determined that these amendments will have no impact on reporting, 
recordkeeping, or other compliance requirements because they will 
remain identical to the current requirements. No new forms are proposed 
and no additional reporting requirements are necessary.

[[Page 18962]]

    This action does not require additional information collection that 
requires clearance by the Office of Management and Budget (OMB) beyond 
currently approved information collection. The primary sources of data 
used to complete the approved forms are routinely used in most business 
transactions. The forms require only a minimal amount of information 
which can be supplied without data processing equipment or a trained 
statistical staff. Thus, the information collection and reporting 
burden is relatively small. Requiring the same reports for all handlers 
does not significantly disadvantage any handler that is smaller than 
the industry average.
    Prior documents in this proceeding:
    Notice of Hearing: Issued July 26, 2002; published August 1, 2002 
(67 FR 49887).
    Supplemental Notice of Hearing: Issued August 14, 2002; published 
August 16, 2002 (67 FR 53522).
    Recommended Decision: Issued March 17, 2004; published March 25, 
2004 (69 FR 15562).
    Final Decision: Issued January 14, 2005; published January 31, 2005 
(70 FR 4932).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Northeast 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 
Northeast order:
    (a) Findings upon the basis of the hearing record. 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 
Northeast marketing area. The hearing was held 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 (7 CFR Part 900).
    Upon the basis of the evidence introduced at such hearing and the 
record thereof, it is found that:
    (1) The Northeast order as hereby amended, 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 aforesaid marketing area. The minimum 
prices specified in the order as hereby amended 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 Northeast order as hereby amended regulates the handling of 
milk in the same manner as, and is applicable only to persons in the 
respective classes of industrial or commercial activity specified in, a 
marketing agreement upon which a hearing has been held.
    (b) Additional Findings. It is necessary in the public interest to 
make these amendments to the Northeast order effective June 1, 2005. 
Any delay beyond that date would tend to disrupt the orderly marketing 
of milk in the aforesaid marketing area.
    The amendments to the Northeast order are known to handlers. The 
final decision containing the proposed amendments to the order was 
issued on January 14, 2005.
    The changes that result from these 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 order amendments 
effective June 1, 2005. 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) or the Act) of more than 50 
percent of the milk that 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 order amending the Northeast order is the 
only practical means pursuant to the declared policy of the Act of 
advancing the interests of producers as defined by the order as hereby 
amended;
    (3) The issuance of the order amending the Northeast 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 1001

    Milk marketing orders.

Order Relative to Handling

0
It is therefore ordered, that on and after the effective date hereof, 
the handling of milk in the Northeast 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, as follows:

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

0
1. The authority citation for 7 CFR Part 1001 continues to read as 
follows:

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


0
2. Section 1001.7 is amended by:
0
a. Revising paragraphs (c)(1) and (c)(2).
0
b. Removing paragraph (c)(3).
0
c. Redesignating paragraphs (c)(4) and (c)(5) as paragraphs (c)(3) and 
(c)(4).
0
d. Revising paragraphs (e)(1) and (e)(2).
0
e. Adding ``and'' at the end of paragraph (h)(5).
0
f. Removing ``; and'' from the end of paragraph (h)(6) and adding a 
period in its place.
0
g. Removing paragraph (h)(7).
    The revisions read as follows:


Sec.  1001.7  Pool plant.

* * * * *
    (c) * * *
    (1) In each of the months of January through August and December, 
such shipments and transfers to distributing plants must not equal less 
than 10 percent of the total quantity of milk (except the milk of a 
producer described in Sec.  1001.12(b)) that is received at the plant 
or diverted from it pursuant to Sec.  1001.13 during the month;
    (2) In each of the months of September through November, such 
shipments and transfers to distributing plants must equal not less than 
20 percent of the total quantity of milk (except the milk of a producer 
described in Sec.  1001.12(b)) that is received at the plant or 
diverted from it pursuant to Sec.  1001.13 during the month;
* * * * *
    (e) * * *
    (1) At least one of the plants in the unit qualifies as a pool 
distributing plant pursuant to paragraph (a) of this section;
    (2) Other plants in the unit must process at least 60 percent of 
monthly receipts of producer milk only as Class I or Class II products 
and must be located in the Northeast marketing area, as defined in 
Sec.  1001.2, in a pricing zone providing the same or a lower Class I 
price than the price applicable at the distributing plant(s) included 
in the unit; and
* * * * *

0
3. Section 1001.13 is amended by:
0
a. Revising paragraph (d)(1).
0
b. Redesignating paragraph (d)(2) as paragraph (d)(3).

[[Page 18963]]

0
c. Adding paragraphs (d)(2), (d)(4), (d)(5) and (e).
    The revision and additions read as follows:


Sec.  1001.13  Producer milk.

* * * * *
    (d) * * *
    (1) Milk of a dairy farmer shall not be eligible for diversion 
unless one day's milk production of such dairy farmer was physically 
received as producer milk 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 unless milk of the dairy farmer has been 
physically received as producer milk at a pool plant during the month;
    (2) Of the total quantity of producer milk received during the 
month (including diversion but excluding the quantity of producer milk 
received from a handler described in Sec.  1000.9(c) or which is 
diverted to another pool plant), the handler diverted to nonpool plants 
not more than 80 percent during each of the months of September through 
November and 90 percent during each of the months of January through 
August and December. In the event that a handler causes the milk of a 
producer to be over diverted, a dairy farmer will not lose producer 
status;
* * * * *
    (4) Any milk diverted in excess of the limits set forth in 
paragraph (d)(2) of this section shall not be producer milk. The 
diverting handler shall designate the dairy farmer deliveries that 
shall not be producer milk. If the handler fails to designate the dairy 
farmer deliveries which are ineligible, producer milk status shall be 
forfeited with respect to all milk diverted to nonpool plants by such 
handler; and
    (5) The delivery day requirement and the diversion percentages in 
paragraphs (d)(1) and (d)(2) of this section may be increased or 
decreased by the Market Administrator if the Market Administrator finds 
that such revision is necessary to assure orderly marketing and 
efficient handling of milk in the marketing area. Before making such a 
finding, the Market Administrator shall investigate the need for the 
revision either on the Market Administrator's own initiative or at the 
request of interested persons if the request is made in writing at 
least 15 days prior to the month for which the requested revision is 
desired to be effective. If the investigation shows that a revision 
might be appropriate, the Market Administrator shall issue a notice 
stating that the revision is being considered and inviting written 
data, views, and arguments. Any decision to revise an applicable 
percentage or delivery day requirement must be issued in writing at 
least one day before the effective date.
    (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 another government entity.

0
4. In Sec.  1001.30, the introductory text is revised to read as 
follows:


Sec.  1001.30  Reports of receipts and utilization.

    Each handler shall report monthly so that the Market 
Administrator's office receives the report on or before the 10th day 
after the end of the month, in the detail and on prescribed forms, as 
follows:
* * * * *

0
5. In Sec.  1001.62, the introductory text is revised and a new 
paragraph (h) is added to read as follows:
    The revision and addition reads as follows:


Sec.  1001.62  Announcement of producer prices.

    On or before the 14th day after the end of the month, the Market 
Administrator shall announce the following prices and information:
* * * * *
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the Market Administrator may have up to two additional business days to 
announce the producer price differential and the statistical uniform 
price.
* * * * *

0
6. In Sec.  1001.71, the introductory text is revised to read as 
follows:


Sec.  1001.71  Payments to the producer--settlement fund.

    Each handler shall make payment to the producer-settlement fund in 
a manner that provides receipt of the funds by the Market Administrator 
no later than two days after the announcement of the producer price 
differential and the statistical uniform price pursuant to Sec.  
1001.62 (except as provided for in Sec.  1000.90). Payment shall be the 
amount, if any, by which the amount specified in paragraph (a) of this 
section exceeds the amount specified in paragraph (b) of this section:
* * * * *

0
7. Section 1001.72 is revised to read as follows:


Sec.  1001.72  Payments from the producer--settlement fund.

    No later than the day after the due date required for payment to 
the Market Administrator pursuant to Sec.  1001.71 (except as provided 
in Sec.  1001.90), the Market Administrator shall pay to each handler 
the amount, if any, by which the amount computed pursuant to Sec.  
1001.71(b) exceeds the amount computed pursuant to Sec.  1001.71(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.

0
8. In Sec.  1001.73, paragraphs (a)(2) introductory text and (e) 
introductory text are revised to read as follows:


Sec.  1001.73  Payments to producers and to cooperative associations.

    (a) * * *
    (2) Final payment. For milk received during the month, payment 
shall be made during the following month so it is received by each 
producer no later than the day after the required date of payment by 
the Market Administrator, pursuant to Sec.  1001.72, in an amount 
computed as follows:
* * * * *
    (e) In making payments to producers pursuant to this section, each 
handler shall furnish each producer (except for a producer whose milk 
was received from a cooperative association handler described in Sec.  
1000.9(a) or 9(c)), a supporting statement in such form that it may be 
retained by the recipient which shall show:
* * * * *

    Dated: April 6, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-7273 Filed 4-11-05; 8:45 am]
BILLING CODE 3410-02-P