[Federal Register Volume 73, Number 148 (Thursday, July 31, 2008)]
[Rules and Regulations]
[Pages 44617-44619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 08-1482]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1000

[Docket No. AMS-DA-07-0026; AO-14-A77, et al.; DA-07-02-A]


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

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule.

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SUMMARY: This order amends the manufacturing cost allowances and the 
butterfat yield factor used in the Class III and Class IV product-price 
formulas applicable to all Federal milk marketing orders. More than the 
required producers approved the issuance of the interim order as 
amended.

DATES: Effective Date: September 1, 2008.

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

SUPPLEMENTARY INFORMATION: This decision adopts provisions to amend the 
manufacturing (make) allowances for cheese, butter, nonfat dry milk 
(NFDM) and dry whey powder contained in the Class III and Class IV 
product-price formulas. Specifically, this decision adopts the 
following make allowances: cheese--$0.2003 per pound; butter--$0.1715 
per pound; NFDM--$0.1678 per pound; and dry whey--$0.1991 per pound. 
This decision also increases the butterfat yield factor in the 
butterfat price formula from 1.20 to 1.211.
    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, as amended (7 
U.S.C. 601-674) (AMAA), provides that administrative proceedings must 
be exhausted before parties may file suit in court. Under Section 
608c(15)(A) of the AMAA, any handler subject to an order may request 
modification or exemption from such order by filing with the Department 
of Agriculture (USDA) 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 AMAA 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-
612), 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.
    During February 2007, the month the initial public hearing was 
held, the milk of 49,712 dairy farmers was pooled on the Federal order 
system. Of the total, 46,729 dairy farmers, or 94 percent, were 
considered small businesses. During the same month, 352 plants were 
regulated by or reported their milk receipts to be pooled and priced on 
a Federal order. Of the total, 186 plants, or 53 percent, were 
considered small businesses.
    This interim final rule amends all orders by changing the make 
allowances

[[Page 44618]]

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 increases from $0.1202 to $0.1715 per pound; the 
make allowance for cheese increases from $0.1682 to $0.2003 per pound; 
the make allowance for NFDM increases from $0.1570 to $0.1678 per 
pound; and the make allowance for dry whey increases from $0.1956 to 
$0.1991 per pound. The butterfat yield factor in the butterfat price 
formulas is increased from 1.20 to 1.211.
    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. An economic analysis has been performed that discusses 
impacts of the amendments on industry participants including producers 
and manufacturers. It can be found on the AMS Dairy Web site at http://www.ams.usda.gov/dairy. Based on the economic analysis, we have 
concluded that the amendments will not have a significant economic 
impact on a substantial number of small entities.
    The Agricultural Marketing Service (AMS) 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 interim final rule does not require additional information 
collection that needs 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 that 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 February 5, 2007; published February 9, 
2007 (72 FR 6179).
    Supplemental Notice of Hearing: Issued February 14, 2007; published 
February 20, 2007 (72 FR 7753).
    Notice to Reconvene Hearing: Issued March 15, 2007; published March 
21, 2007 (72 FR 13219).
    Notice to Reconvene Hearing: Issued May 2, 2007; published May 8, 
2007 (72 FR 25986).
    Tentative Partial Final Decision: Issued June 16, 2008; published 
June 20, 2008 (73 FR 35306).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the Northeast and other 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 marketing orders:
    (a) Findings upon the basis of the hearing record.
    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. 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 said orders 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 areas. The 
minimum prices specified in the orders 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 said orders, as hereby amended on an interim basis, 
regulate 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 interim amendments to the Northeast and other orders 
effective [insert effective date]. 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 this 
order was issued on June 16, 2008.
    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 
amendments effective on [insert effective date].
    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 orders amending the Northeast and 
other 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.

Order Relative to Handling

    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 to and in compliance with the terms and 
conditions of the orders, as amended, and as hereby amended, as 
follows:

List of Subjects in 7 CFR Part 1000

    Milk marketing orders.

0
For the reasons set forth in the preamble, the Agricultural Marketing 
Service amends Chapter X of Title 7 of the Code of Federal Regulations 
as follows:

[[Page 44619]]

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

0
1. The authority citation for 7 CFR part 1000 continues to read as 
follows:

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


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 17.15 
cents, with the result multiplied by 1.211.
    (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 16.78 cents and multiplying the result by 0.99.
    (n) * * *
    (2) Subtract 20.03 cents from the price computed pursuant to 
paragraph (n)(1) of this section and multiply the result by 1.383;
    (3) * * *
    (i) Subtract 20.03 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 19.91 
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 17.15 cents 
from this average, and multiplying the result by 1.211.

    Dated: July 25, 2008.
Lloyd C. Day,
Administrator, Agricultural Marketing Service.
[FR Doc. 08-1482 Filed 7-28-08; 8:45 am]
BILLING CODE 3410-02-P