[Federal Register Volume 83, Number 92 (Friday, May 11, 2018)]
[Rules and Regulations]
[Pages 21843-21846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10085]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1006

[AMS-DA-17-0068; AO-18-0008]


Milk in the Florida Marketing Area; Order Amending the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends the Florida Federal milk marketing 
order (FMMO) to adopt a temporary assessment on Class I milk. 
Assessment revenue will be disbursed to handlers and producers who 
incurred extraordinary marketing losses and expenses due to Hurricane 
Irma in September 2017. More than the required number of producers for 
the Florida marketing area have approved the issuance of the final 
order as amended.

DATES: This rule is effective July 1, 2018.

FOR FURTHER INFORMATION CONTACT: Erin C. Taylor, Order Formulation and 
Enforcement Division, USDA/AMS/Dairy Program, STOP 0231-Room 2963, 1400 
Independence Ave SW, Washington, DC 20250-0231, (202) 720-7183, email 
address: [email protected].

SUPPLEMENTARY INFORMATION: This rule, in accordance with 7 CFR 
900.14(c), is the Secretary's final rule in this proceeding and issues 
a marketing order as defined in 7 CFR 900.2(j).
    Accordingly, this final rule adopts proposed amendments detailed in 
the proposed rule (83 FR 13691).
    This administrative action is governed by the provisions of 
Sections 556 and 557 of Title 5 of the United States Code and is 
therefore excluded from the requirements of Executive Order 12866.
    This final rule is not considered an Executive Order 13771 
regulatory action because it does not meet the definition of a 
``regulation'' or ``rule'' under Executive Order 12866.
    The proposed amendments adopted in this final rule have been 
reviewed

[[Page 21844]]

under Executive Order 12988, Civil Justice Reform. This rule is not 
intended to have retroactive effect and will not preempt any state or 
local law, regulations, or policies, unless they present an 
irreconcilable conflict with this rule.
    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.
    The Agricultural Marketing Agreement Act of 1937 (AMAA), as amended 
(7 U.S.C. 601-674 and 7253), 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 a marketing order may 
request modification or exemption from such order by filing with the 
U.S. 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 law. A handler is 
afforded the opportunity for a hearing on the petition. After a 
hearing, USDA 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 USDA'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 (RFA) (5 U.S.C. 
601-612), AMS has considered the economic impact of this action on 
small entities and has determined that this rule will not have a 
significant economic impact on a substantial number of small entities.
    For the purpose of the RFA, a dairy farm is considered a small 
business if it has an annual gross revenue of less than $750,000. Dairy 
product manufacturers are considered small businesses based on the 
number of people they employ. Small fluid milk and ice cream 
manufacturers are defined as having 1,000 or fewer employees. Small 
butter and dry or condensed dairy product manufacturers are defined as 
having 750 or fewer employees. Small cheese manufacturers are defined 
as having 1,250 or fewer employees. Manufacturing plants that are part 
of larger companies operating multiple plants with total numbers of 
employees that exceed the threshold for small businesses will be 
considered large businesses, even if the local plant has fewer 
employees than the threshold number.
    AMS estimates that 248 dairy farms produced milk pooled on the 
Florida FMMO in 2017. One hundred forty-one farms delivered milk to 
Florida pool plants fewer than 100 days during 2017, and of those, 66 
had less than 48,000 pounds of pooled milk on the order during the 
entire year. AMS estimates 107 farms (248 minus 141) were part of the 
``normal'' Florida milk supply last year. Nineteen of those farms had 
less than $750,000 in gross milk sales, based upon estimated 2017 
production and a weighted average uniform price of $20.98 per cwt.
    Considering all 248 farms that had producer milk on the Florida 
FMMO, AMS estimates that 101 farms had less than $750,000 in gross milk 
sales, regardless of where all of their production was pooled, and 
would be considered small businesses.
    AMS data indicates that six dairy farmer cooperatives, in their 
capacity as handlers, pooled producer milk on the Florida FMMO in 2017. 
AMS estimates that two of those cooperative handlers have fewer than 
500 employees and would be considered small businesses. Thirty-eight 
processing plants received producer milk in 2017, of which AMS 
estimates that 13 would be considered small businesses. Two of the 13 
small businesses are fully regulated distributing plants on the Florida 
FMMO. The remaining 11 small businesses are nonpool or exempt plants.
    The proposed amendments adopted in this final rule will provide 
temporary reimbursement to handlers (cooperative associations and 
proprietary handlers) who incurred extraordinary losses in connection 
with Hurricane Irma in September 2017. The amendments were requested by 
Southeast Milk, Inc.; Dairy Farmers of America, Inc.; Premier Milk, 
Inc.; Maryland and Virginia Milk Producers Cooperative Association, 
Inc.; and Lone Star Milk Producers, Inc. The dairy farmer members of 
these five cooperatives supply the majority of the milk pooled under 
the Florida FMMO. For a 7-month period beginning with July 2018, the 
amendments will implement a temporary assessment on Class I milk pooled 
on the Florida FMMO at a rate not to exceed $0.09 per hundredweight 
(cwt). The amount generated through the temporary assessment will be 
disbursed during the 7-month period starting in July 2018 to qualifying 
handlers who incurred extraordinary losses and expenses as a result of 
the hurricane.
    The amendments will reimburse handlers for marketing expenses and 
losses in four categories: Transportation costs to deliver loads to 
other than their normal receiving plants; lost location value due to 
selling milk in lower location value zones; milk dumped at farms or on 
tankers, and skim milk dumped at plants; and distressed milk sales. 
Reimbursement will be funded through an assessment on Class I milk at a 
maximum rate of $0.09 per cwt. Record evidence indicates that this 
would increase the consumer price of milk by less than $0.01 per gallon 
during the 7-month assessment period.
    The temporary assessment will not place handlers in the Florida 
marketing area at a competitive disadvantage because of the 
assessment's uniform application to Class I milk. Additionally, any 
handler who experienced a qualifying marketing expense or loss will be 
eligible to receive reimbursement, regardless of size. Dairy farmer 
blend prices will not be impacted by the amendments because the 
assessment will not be funded through the marketwide pool. Dairy farmer 
cooperatives who pooled milk on the Florida order, and therefore who 
qualified as the pooling handler, will also be eligible for 
reimbursement. In those instances, producers are receiving relief as 
the money is returned to their dairy farmer-owned cooperative. 
Accordingly, the adoption of the proposed amendments will not 
significantly impact producers or handlers of any size, due to the 
limited implementation period and the minimal impact to the Class I 
milk price.
    A review of reporting requirements was completed in accordance with 
the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). The 
information necessary to qualify for reimbursement, as outlined in this 
rule, has already been submitted through the monthly handler receipts 
and utilization form (FORM 1), or is part of the normal business 
records inspected during routine FMMO audits.
    The primary information sources that will be required for 
applications for reimbursement are documents currently generated in 
customary business transactions. These documents include, but are not 
limited to: Invoices; receiving records; bulk milk manifests; hauling 
bills; and contracts. As these documents are routinely inspected by the 
market administrator during handler audits, the amendments adopted in 
this rule would not result in any new information collection.

[[Page 21845]]

Prior Documents in This Proceeding

    Notification of Hearing: Issued December 6, 2017; published 
December 11, 2017 (82 FR 58135);
    Supplemental Notice of Hearing: Issued December 7, 2017; published 
December 11, 2017 (82 FR 58135);
    Final Decision: Issued March 23, 2018; published March 30, 2018 (83 
FR 13691).

Findings and Determinations

    The findings and determinations hereinafter set forth supplement 
those that were made when the 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.
    (1) Findings upon the basis of the hearing record.
    The amendments to the order are based on the record of a public 
hearing held in Tampa, Florida, December 12 through 14, 2017, pursuant 
to a notification of hearing issued December 6, 2017, and published 
December 11, 2017 (82 FR 58135). 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). The tentative marketing agreement and the 
order are authorized under 7 U.S.C. 608c.
    Upon the basis of the evidence introduced at the public hearing and 
its record, it is found that:
    (a) The order as hereby amended, and all of the terms and 
conditions thereof, will tend to effectuate the declared policy of the 
AMAA;
    (b) The parity prices of milk, as determined pursuant to section 2 
of the AMAA, are not reasonable in view of the price of feeds, 
available supplies of feeds, and other economic conditions that affect 
market supply and demand for milk in the Florida marketing area. The 
minimum prices specified in the tentative marketing agreement and 
order, as hereby amended, are prices that will reflect the aforesaid 
factors, ensure a sufficient quantity of pure and wholesome milk, and 
be in the public interest; and
    (c) The tentative marketing agreement and order, as hereby amended, 
will regulate the handling of milk in the same manner as, and applies 
only to, persons in the respective classes of industrial and commercial 
activity specified in, marketing agreements upon which a hearing has 
been held.
    (2) Additional Findings.
    The amendment to this order is known to handlers. The final 
decision containing the proposed amendment to this order was issued on 
March 23, 2018, and published in the Federal Register on March 30, 2018 
(83 FR 13691).
    The public hearing regarding amendments to this order was held on 
an emergency basis. The changes that result from these amendments will 
not require extensive preparation or substantial alteration in the 
handlers' method of operation. Therefore, it is determined that good 
cause exists for making this amendment effective July 1, 2018. (Section 
553(d), Administrative Procedure Act, 5 U.S.C. 551-559.)
    (3) Determinations.
    It is hereby determined that:
    (a) The refusal or failure of handlers (excluding cooperative 
associations specified in section 8c(9) of the AMAA) of more than 50 
percent of the milk marketed within the specified marketing areas to 
sign a proposed marketing agreement, tends to prevent the effectuation 
of the declared policy of the AMAA;
    (b) The issuance of this order amending the Florida order is the 
only practical means pursuant to the declared policy of the AMAA of 
advancing the interests of producers as defined in the order as hereby 
amended; and
    (c) The issuance of this order amending the Florida order 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 Part 1006

    Milk marketing orders.

Order Amending the Order Regulating the Handling of Milk in the Florida 
Marketing Area

    It is therefore ordered, that on and after the effective date 
hereof, the handling of milk in the Florida marketing area shall be in 
conformity to and in compliance with the terms and conditions of the 
order as amended, as follows:
    For the reasons set forth in the preamble, 7 CFR part 1006 is 
amended as follows:

PART 1006--MILK IN THE FLORIDA MILK MARKETING AREA

0
1. The authority citation for part 1006 continues to read as follows:

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

[Subpart Redesignated as Subpart A]

0
2. Redesignate ``Subpart--Order Regulating Handling'' as ``Subpart A--
Order Regulating Handling''.

0
3. Section 1006.60 is amended by revising paragraphs (a) and (g) and 
adding paragraphs (h) and (i) to read as follows:


Sec.  1006.60  Handler's value of milk.

* * * * *
    (a) Multiply the pounds of skim milk and butterfat in producer milk 
that were classified in each class pursuant to Sec.  1000.44(c) of this 
chapter by the applicable skim milk and butterfat prices, and add the 
resulting amounts; except that for the months of July 2018 through 
January 2019, the Class I skim milk price for this purpose shall be the 
Class I skim milk price as determined in Sec.  1000.50(b) of this 
chapter plus $0.09 per hundredweight, and the Class I butterfat price 
for this purpose shall be the Class I butterfat price as determined in 
Sec.  1000.50(c) of this chapter plus $0.0009 per pound. The 
adjustments to the Class I skim milk and butterfat prices provided 
herein may be reduced by the market administrator for any month if the 
market administrator determines that the payments yet unpaid computed 
pursuant to paragraphs (g)(1) through (g)(6) of this section will be 
less than the amount computed pursuant to paragraph (h) of this 
section. The adjustments to the Class I skim milk and butterfat prices 
provided herein during the months of July 2018 through January 2019 
shall be announced along with the prices announced in Sec.  1000.53(b) 
of this chapter.
* * * * *
    (g) For transactions occurring during the period of September 6, 
2017, through September 15, 2017, for handlers who have submitted proof 
satisfactory to the market administrator no later than August 1, 2018, 
to determine eligibility for reimbursement of hurricane-imposed costs, 
subtract an amount equal to:
    (1) The additional cost of transportation on loads of milk rerouted 
from pool distributing plants to plants outside the state of Florida as 
a result of Hurricane Irma, and the additional cost of transportation 
on loads of milk moved and then dumped. The reimbursement of 
transportation costs pursuant to this section shall be the actual 
demonstrated cost of such transportation of bulk milk or the miles of 
transportation on such loads of bulk milk multiplied by $3.75 per 
loaded mile, whichever is less;
    (2) The lost location value on loads of milk rerouted to plants 
outside the state of Florida as a result of Hurricane Irma. The lost 
location value shall be the difference per hundredweight between the 
value specified in Sec.  1000.52 of this

[[Page 21846]]

chapter, adjusted by Sec.  1006.51(b), at the location of the plant 
where the milk would have normally been received and the value 
specified in Sec.  1000.52, as adjusted by Sec.  1005.51(b) and Sec.  
1007.51(b) of this chapter, at the location of the plant to which the 
milk was rerouted;
    (3) The value per hundredweight at the lowest classified price for 
the month of September 2017 for milk dumped at the farm and classified 
as other use milk pursuant to Sec.  1000.40(e) of this chapter as a 
result of Hurricane Irma;
    (4) The value per hundredweight at the lowest classified price for 
the month of September 2017 for milk dumped from milk tankers after 
being moved off-farm and classified as other use milk pursuant to Sec.  
1000.40(e) of this chapter as a result of Hurricane Irma;
    (5) The value per hundredweight at the lowest classified price for 
the month of September 2017 for skim portion of milk dumped and 
classified as other use milk pursuant to Sec.  1000.40(e) of this 
chapter as a result of Hurricane Irma; and
    (6) The difference between the announced class price applicable to 
the milk as classified by the market administrator for the month of 
September 2017 and the actual price received for milk delivered to 
nonpool plants outside the state of Florida as a result of Hurricane 
Irma.
    (h) The total amount of payment to all handlers under paragraph (g) 
of this section shall be limited for each month to an amount determined 
by multiplying the total Class I producer milk for all handlers 
pursuant to Sec.  1000.44(c) of this chapter times $0.09 per 
hundredweight.
    (i) If the cost of payments computed pursuant to paragraphs (g)(1) 
through (g)(6) of this section exceeds the amount computed pursuant to 
paragraph (h) of this section, the market administrator shall prorate 
such payments to each handler based on each handler's proportion of 
transportation and other use milk costs submitted pursuant to 
paragraphs (g)(1) through (g)(6). Costs submitted pursuant to 
paragraphs (g)(1) through (g)(6) which are not paid as a result of such 
a proration shall be paid in subsequent months until all costs incurred 
and documented through (g)(1) through (g)(6) have been paid.

    Dated: May 8, 2018.
Bruce Summers,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2018-10085 Filed 5-10-18; 8:45 am]
 BILLING CODE 3410-02-P