[Federal Register Volume 71, Number 250 (Friday, December 29, 2006)]
[Rules and Regulations]
[Pages 78333-78335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-9943]



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  Federal Register / Vol. 71, No. 250 / Friday, December 29, 2006 / 
Rules and Regulations  

[[Page 78333]]



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-A74, et al.; DA-06-01]


Milk in the Northeast and Other Marketing Areas; Interim Order 
Amending the Orders

------------------------------------------------------------------------
           7 CFR part              Marketing area          AO Nos.
------------------------------------------------------------------------
1001...........................  Northeast........  AO-14-A74.
1005...........................  Appalachian......  AO-388-A18.
1006...........................  Florida..........  AO-356-A39.
1007...........................  Southeast........  AO-366-A47.
1030...........................  Upper Midwest....  AO-361-A40.
1032...........................  Central..........  AO-313-A49.
1033...........................  Mideast..........   AO-166-A73.
1124...........................  Pacific Northwest  AO-368-A35.
1126...........................  Southwest........  AO-231-A68.
1131...........................  Arizona..........  AO-271-A40.
------------------------------------------------------------------------

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule.

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

SUMMARY: This order amends the manufacturing (make) allowances 
contained in the Class III and Class IV product price formulas 
applicable to all Federal milk marketing orders. Specifically, this 
decision adopts the following make allowances: cheese--$0.1682 per 
pound; butter--$0.1202 per pound; nonfat dry milk (NFDM)--$0.1570 per 
pound; and dry whey--$0.1956 per pound. More than the required number 
of producers have approved the issuance of the interim orders as 
amended.

DATES: Effective Date: February 1, 2007.

FOR FURTHER INFORMATION CONTACT: Jack Rower, Marketing Specialist, 
USDA/AMS/Dairy Programs, Order Formulation and Enforcement Branch, STOP 
0231--Room 2971, 1400 Independence Ave., SW., Washington, DC 20250-
0231, (202) 720-2357, e-mail address: [email protected].

SUPPLEMENTARY INFORMATION: 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.

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 
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 
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.
    For the month of January 2006, the month the initial public hearing 
was held, the milk of 52,570 dairy farmers was pooled on the Federal 
order system. Of the total, 49,153 dairy farmers, or 94 percent, were 
considered small businesses. During the same month, 536 plants were 
regulated by or reported their milk receipts to be pooled and priced on 
a Federal order. Of the total, 286 plants, or 53 percent, were 
considered small businesses.
    This decision provides that all orders be amended by changing the 
make allowances contained in the formulas used to compute component 
prices and the minimum class prices in all Federal milk orders. 
Specifically, the make allowance for butter would increase from $0.1150 
to $0.1202 per pound; the make allowance for cheese would increase from 
$0.1650 to $0.1682 per pound; the make allowance for NFDM would 
increase from $0.1400 to $0.1570 per pound; and the make allowance for 
dry whey would increase from $0.1590 to $0.1956 per pound.
    The adoption of these new make allowances serves to approximate the 
average cost of producing cheese, butter, NFDM and dry whey for 
manufacturing plants located in Federal milk marketing areas.
    The established criteria for the make allowance changes are applied 
in an identical fashion to both large and small businesses and will not 
have any different impact on those businesses producing manufactured 
milk products. The Department's economic analysis \1\ discusses impacts 
of the order amendments on order participants

[[Page 78334]]

including producers and manufacturers. Based on the economic analysis, 
we have concluded that the proposed amendments will not have a 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \1\ The Economic Analysis, Class III and Class IV Make 
Allowances, Tentative Final Decision is available on the Internet at 
http://www.ams.usda.gov/dairy/proposals/classIII_IV_make_all.htm.
---------------------------------------------------------------------------

    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 forms are routinely used in most business 
transactions. 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 December 30, 2005; published January 5, 
2006 (71 FR 545).
    Notice of Intent To Reconvene Hearing: Issued June 28, 2006; 
published June 23, 2006 (71 FR 36715).
    Notice To Reconvene Hearing: Issued August 31, 2006; published 
September 6, 2006 (71 FR 52502).
    Tentative Final Decision: Issued November 17, 2006; published 
November 22, 2006 (71 FR 67467).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Northeast and other marketing orders were 
first issued and when they were 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 and other aforesaid marketing orders:
    (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 agreements and 
to the orders regulating the handling of milk in the Northeast and 
other marketing areas.
    Upon the basis of the evidence introduced at such hearing and the 
record thereof, it is found that:
    (1) The said orders, 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 areas, and the minimum 
prices specified in the orders, as hereby amended on an interim basis, 
are such prices as will reflect the aforesaid factors, ensure a 
sufficient quantity of pure and wholesome milk, and be in the public 
interest; and
    (3) The said orders, as hereby amended on an interim basis, 
regulate the handling of milk in the same manner as, and are applicable 
only to persons in the respective classes of industrial and commercial 
activity specified in, the marketing agreements 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 Northeast and other marketing 
orders effective February 1, 2007. Any delay beyond that date would 
tend to disrupt the orderly marketing of milk in the aforesaid 
marketing areas.
    The interim amendments to this order are known to handlers. The 
tentative partial decision containing the proposed amendments to the 
orders was issued on November 17, 2006.
    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 February 1, 2007.
    (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 
areas, 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 Northeast and 
other marketing orders is the only practical means pursuant to the 
declared policy of the Act of advancing the interests of producers as 
defined in the orders as hereby amended;
    (3) The issuance of the interim order amending the Northeast and 
other marketing orders is favored by at least two-thirds of the 
producers who were engaged in the production of milk for sale in the 
respective marketing areas.

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

    Milk marketing orders.

Orders Relative to Handling

0
It is therefore ordered, that on and after the effective date hereof, 
the handling of milk in the Northeast and other marketing areas shall 
be in conformity and in compliance with the terms and conditions of the 
orders, as amended, and as hereby further amended on an interim basis, 
as follows:
0
1. The authority citation for 7 CFR parts 1000, 1001, 1005, 1006, 1007, 
1030, 1032, 1033, 1124, 1126, and 1131 is revised to read as follows:

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

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

0
2. Section 1000.50 is amended by:
0
a. Revising paragraph (l);
0
b. Revising paragraph (m);
0
c. Revising paragraph (n)(2);
0
d. Revising paragraph (n)(3)(i);
0
e. Revising paragraph (o); and
0
f. Revising paragraph (q)(3).
    The revisions read as follows:


Sec.  1000.50  Class prices, component prices, and advanced pricing 
factors.

* * * * *
    (l) Butterfat price. The butterfat price per pound, rounded to the 
nearest one-hundredth cent, shall be the U.S. average NASS AA Butter 
survey price reported by the Department for the month, less 12.02 
cents, with the result multiplied by 1.20.
    (m) Nonfat solids price. The nonfat solids price per pound, rounded 
to the nearest one-hundredth cent, shall be the U.S. average NASS 
nonfat dry milk survey price reported by the Department for the month, 
less 15.70 and multiplying the result by 0.99.
    (n) * * *
    (1) * * *
    (2) Subtract 16.82 cents from the price computed pursuant to 
paragraph (n)(1) of this section and multiply the result by 1.383;

[[Page 78335]]

    (3) * * *
    (i) Subtract 16.82 cents from the price computed pursuant to 
paragraph (n)(1) of this section and multiply the result by 1.572; and 
* * *
    (o) Other solids price. The other solids price per pound, rounded 
to the nearest one-hundredth cent, shall be the U.S. average NASS dry 
whey survey price reported by the Department for the month minus 19.56 
cents, with the result multiplied by 1.03. * * *
    (q) * * *
    (3) An advanced butterfat price per pound, rounded to the nearest 
one-hundredth cent, shall be calculated by computing a weighted average 
of the 2 most recent U.S. average NASS AA Butter survey prices 
announced before the 24th day of the month, subtracting 12.02 cents 
from this average, and multiplying the result by 1.20.

    Dated: December 26, 2006.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 06-9943 Filed 12-27-06; 9:53 am]
BILLING CODE 3410-02-P