[Federal Register Volume 70, Number 104 (Wednesday, June 1, 2005)]
[Rules and Regulations]
[Pages 31321-31322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10835]



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  Federal Register / Vol. 70, No. 104 / Wednesday, June 1, 2005 / Rules 
and Regulations  

[[Page 31321]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1030

[Docket No. AO-361-A39; DA-04-03A]


Milk in the Upper Midwest Marketing Area; Interim Order Amending 
the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule.

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

SUMMARY: This order amends certain features of the pooling standards 
and transportation credit provisions of the Upper Midwest (UMW) milk 
marketing order on an interim basis. More than the required number of 
producers in the UMW marketing area have approved the issuance of the 
interim order as amended.

DATES: Effective July 1, 2005.

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: Specifically, this decision amends the UMW 
order by: (1) Revising the supply plant performance standards so that 
milk seeking to be pooled on the order demonstrates consistent service 
to the Class I market; (2) preventing handlers located within the 
States that comprise the UMW marketing area from qualifying milk 
located outside of the States that comprise the marketing area; (3) 
eliminating diversions to nonpool plants outside of the States that 
comprise the UMW marketing area; and (4) establishing a limit of the 
receipt by handlers of a transportation credit to milk movements of 400 
miles or less.
    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 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 (the Act), 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 
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.

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.
    During August 2004, the month during which the hearing occurred, 
there were 15,608 dairy producers pooled on, and 60 handlers regulated 
by, the UMW order. Approximately 15,082 producers, or 97 percent, were 
considered small businesses based on the above criteria. On the 
processing side, approximately 49 handlers, or 82 percent, were 
considered small businesses.
    The adoption of the proposed pooling standards serves to revise 
established criteria that determines those producers, producer milk, 
and plants that have a reasonable association with, and are 
consistently serving the fluid needs of, the UMW milk marketing area. 
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 producers who 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. The criteria established for transportation credits is 
also identically applied to both large and small businesses and do not 
have any different economic impact on small entities. Therefore, the 
proposed amendments will not have a significant economic impact on a 
substantial number of small entities.
    Prior documents in this proceeding:

Notice of Hearing: Issued June 16, 2004; published June 23, 2004 (69 FR 
34963).
Notice of Hearing Delay: Issued July 14, 2004; published July 21, 2004 
(69 FR 43538).

[[Page 31322]]

Tentative Partial Decision: Issued April 8, 2005; published April 14, 
2005 (70 FR 19709).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the UMW 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 UMW 
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 UMW marketing area.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof it is found that:
    (1) The UMW 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 UMW 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 UMW order effective July 1, 
2005. 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 April 8, 2005.
    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 July 1, 2005.
    (c) Determinations. It is hereby determined that:
    (1) The refusal or failure of handlers (excluding cooperative 
associations specified in Section 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 UMW 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 UMW 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 1030

    Milk marketing orders.

Order Relative to Handling

    It is therefore ordered, that on and after the effective date 
hereof, the handling of milk in the UMW 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:

0
The authority citation for 7 CFR part 1030 reads as follows:

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

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

0
1. In Sec.  1030.7, paragraph (c)(2) is revised to read as follows:


Sec.  1030.7  Pool plant.

* * * * *
    (c) * * *
    (2) The operator of a supply plant located within the States of 
Illinois, Iowa, Minnesota, North Dakota, South Dakota, and Wisconsin, 
and the Upper Peninsula of Michigan may include as qualifying shipments 
under this paragraph milk delivered directly from producers' farms 
pursuant to Sec. Sec.  1000.9(c) or 1030.13(c) to plants described in 
paragraphs (a), (b) and (e) of this section. Handlers may not use 
shipments pursuant to Sec.  1000.9(c) or Sec.  1030.13(c) to qualify 
plants located outside the area described above.
* * * * *

0
2. In Sec.  1030.13, paragraph (d) introductory text is revised to read 
as follows:


Sec.  1030.13  Producer milk.

* * * * *
    (d) Diverted by the operator of a pool plant or a cooperative 
association described in Sec.  1000.9(c) to a nonpool plant located in 
the States of Illinois, Iowa, Minnesota, North Dakota, South Dakota, 
and Wisconsin, and the Upper Peninsula of Michigan, subject to the 
following conditions:
* * * * *

0
3. In Sec.  1030.55, paragraph (a)(2) is revised to read as follows:


Sec.  1030.55  Transportation credits and assembly credits.

    (a) * * *
    (2) Multiply the hundredweight of milk eligible for the credit by 
.28 cents times the number of miles, not to exceed 400 miles, between 
the transferor plant and the transferee plant;
* * * * *

    Dated: May 26, 2005.
Kenneth C. Clayton,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 05-10835 Filed 5-31-05; 8:45 am]
BILLING CODE 3410-02-P