[Federal Register Volume 71, Number 209 (Monday, October 30, 2006)]
[Rules and Regulations]
[Pages 63213-63215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-18174]



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  Federal Register / Vol. 71, No. 209 / Monday, October 30, 2006 / 
Rules and Regulations  

[[Page 63213]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1030

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


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

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

DATES: Effective Date: December 1, 2006.

FOR FURTHER INFORMATION CONTACT: Gino Tosi, Associate Deputy 
Administrator, Order Formulation and Enforcement Branch, USDA/AMS/Dairy 
Programs, STOP 0231--Room 2968, 1400 Independence Avenue, SW., 
Washington, DC 20250-0231, (202) 690-1366, e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This document amends the pooling provisions 
of the Upper Midwest Federal milk order. Specifically, this final rule 
adopts provisions that: (1) Establish a limit on the volume of milk a 
handler may pool during the months of April through February to 125 
percent of the volume of milk pooled in the prior month; (2) Establish 
a limit on the volume of milk a handler may pool during the month of 
March to 135 percent of the volume of milk pooled in the prior month; 
and (3) Allow the market administrator to increase the maximum 
administrative assessment rate up to 8 cents per hundredweight on all 
pooled milk if necessary to maintain the required fund reserves. 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.
    This 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 
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.

Regulatory Flexibility Act 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 
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 the hearing occurred, there 
were 15,802 dairy producers pooled on and 60 handlers regulated by the 
UMW order. Approximately 15,608 producers, or 97 percent, were 
considered small businesses based on the above criteria. Of the 60 
handlers regulated by the UMW during August 2004, 49 handlers, or 82 
percent, were considered small businesses. The adopted amendments 
regarding the pooling standards serve to revise established criteria 
that determine those producers, producer milk, and plants that have a 
reasonable association with and consistently serve the fluid needs of 
the Upper Midwest 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, by doing 
so, to 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. Administrative assessments 
are similarly charged without regard to the size of any dairy industry 
organization or entity. Therefore, the amendments will not have a 
significant economic impact on a substantial number of small entities.
    The Agricultural Marketing Service is committed to complying with 
the E-Government Act, to promote the use of the Internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services, and for other purposes.
    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

[[Page 63214]]

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.
    No other burdens are expected to fall on the dairy industry as a 
result of overlapping Federal rules. This rulemaking proceeding does 
not duplicate, overlap, or conflict with any existing Federal rules.

Prior Documents in This Proceeding

    Notice of Hearing: Issued June 15, 2004; published June 23, 2004 
(69 FR 34963).
    Notice of Hearing Delay: Issued July 14, 2004; published July 21, 
2004 (69 FR 43538).
    Tentative Partial Decision: Issued April 8, 2005; published April 
14, 2005 (70 FR 19709).
    Interim Final Rule: Issued May 26, 2005; published June 1, 2005 (70 
FR 31321).
    Final Partial Decision: Issued September 29, 2005; published 
October 5, 2005 (70 FR 58086).
    Final Partial Rule: Issued December 5, 2005; published December 9, 
2005 (70 FR 73126).
    Recommended Decision: Issued February 15, 2006; published February 
22, 2006 (71 FR 9004).
    Final Decision: Issued September 1, 2006; published September 13, 
2006 (71 FR 54136).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Upper Midwest 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 Upper 
Midwest order:
    (a) Findings upon the basis of the hearing record: A public hearing 
was held upon certain proposed amendment to the tentative marketing 
agreement and to the order regulating the handling of milk in the Upper 
Midwest marketing area. The hearing was held pursuant to the provisions 
of the Agricultural Marketing Agreement act of 1937, as amended (7 
U.S.C. 601-604), 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, will tend to effectuate the declared policy of the Act;
    (1) The Upper Midwest 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 marketing area, and the minimum 
prices specified in the tentative marketing agreement and the order, as 
hereby proposed to be 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 Upper Midwest 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 and in the public interest 
to make these amendments to the Upper Midwest order effective December 
1, 2006. Any delay beyond that date would tend to disrupt the orderly 
marketing of milk in the aforesaid marketing area.
    The amendments to the Upper Midwest order are known to handlers. 
The final decision containing the proposed amendments to the order was 
issued on September 1, 2006.
    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 December 1, 2006.
    (c) Determinations: It is hereby determined that:
    (1) The refusal or failure of handlers (excluding cooperative 
associations specified in Sec. 8c(9) of 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 Upper Midwest 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 Upper Midwest 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

0
It is therefore ordered, that on and after the effective date hereof, 
the handling of milk in the Upper Midwest marketing area shall be in 
conformity to and in compliance with the terms and conditions of the 
order, as amended, and as hereby amended, as follows:

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

0
1. The authority citation for 7 CFR part 1030 is amended to read as 
follows:

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


0
2. Section 1030.13 is amended by adding a new paragraph (f), to read as 
follows:


Sec.  1030.13  Producer milk.

* * * * *
    (f) The quantity of milk reported by a handler pursuant to either 
Sec.  1030.30(a)(1) or Sec.  1030.30(c)(1) for April through February 
may not exceed 125 percent, and March may not exceed 135 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 in excess of this limit 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 in excess of the previous month's pooled volume shall not be 
subject to the 125 or 135 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 125 
or 135 percent limitation;
    (3) The market administrator may waive the 125 or 135 percent 
limitation:
    (i) For a new handler on the order, subject to the provisions of 
Sec.  1030.13(f)(4), or
    (ii) For an existing handler with significantly changed milk supply 
conditions due to unusual circumstances;

[[Page 63215]]

    (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.

0
3. Section 1030.85 is revised, to read as follows:


Sec.  1030.85  Assessment for order administration.

    On or before the payment receipt date specified under Sec.  
1030.71, each handler shall pay to the market administrator its pro 
rata share of the expense of administration of the order at a rate 
specified by the market administrator that is no more than 8 cents per 
hundredweight with respect to:
    (a) Receipts of producer milk (including the handler's own 
production) other than such receipts by a handler described in Sec.  
1000.9(c) that were delivered to pool plants of other handlers;
    (b) Receipts from a handler described in Sec.  1000.9(c);
    (c) Receipts of concentrated fluid milk products from unregulated 
supply plants and receipts of nonfluid milk products assigned to Class 
I use pursuant to Sec.  1000.43(d) and other source milk allocated to 
Class I pursuant to Sec.  1000.44(a)(3) and (8) and the corresponding 
steps of Sec.  1000.44(b), except other source milk that is excluded 
from the computations pursuant to Sec.  1030.60(h) and (i); and
    (d) Route disposition in the marketing area from a partially 
regulated distributing plant that exceeds the skim milk and butterfat 
subtracted pursuant to Sec.  1000.76(a)(1)(i) and (ii).

    Dated: October 25, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. E6-18174 Filed 10-27-06; 8:45 am]
BILLING CODE 3410-02-P