[Federal Register Volume 84, Number 47 (Monday, March 11, 2019)]
[Rules and Regulations]
[Pages 8590-8591]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-04347]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1000
[Docket no. AMS-DA-18-0096]
Federal Milk Marketing Orders--Amending the Class I Skim Milk
Price Formula
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule amends the Class I skim milk price formula for
milk pooled under Federal milk marketing orders (FMMO) as required by
the Agriculture Improvement Act of 2018 (2018 Farm Bill). Under the
amended price formula, the Class I skim milk price will be the simple
average of the monthly advanced pricing factors for Class III and Class
IV skim milk, plus $0.74 per cwt, plus the applicable adjusted Class I
differential. Prior to this amendment, the Class I skim milk price was
the higher of the two advanced pricing factors, plus the applicable
adjusted Class I differential.
DATES: This rule becomes effective May 1, 2019.
FOR FURTHER INFORMATION CONTACT: Erin Taylor, Acting Director, Order
Formulation and Enforcement Division, USDA/AMS/Dairy Program, STOP
0231, Room 2963, 1400 Independence Ave. SW, Washington, DC 20250-0231;
telephone: (202) 720-7311; or email: [email protected].
SUPPLEMENTARY INFORMATION: On December 20, 2018, the Agriculture
Improvement Act of 2018 (Pub. L. 115-334)(2018 Farm Bill) amended the
Agricultural Marketing Agreement Act of 1937,\1\ as amended (AMAA), by
revising the provision related to determining the monthly Class I skim
milk price for Class I milk regulated under each of the FMMO. Amendment
to the AMAA requires conforming changes to the FMMO regulations that
specify the Class I skim milk price formula. Previously, the
regulations specified that the Class I skim milk price was the higher
of the monthly advanced pricing factors for Class III and Class IV skim
milk, plus the applicable adjusted Class I differential. This rule
revises the regulations to specify that the Class I skim milk price
will be the simple average of the two advanced pricing factors, plus
$0.74, plus the applicable adjusted Class I differential. In accordance
with the 2018 Farm Bill, the amendment is effective indefinitely, until
further modified, and may not be modified earlier than two years after
the effective date of this rule. The formula may be modified after the
two-year period through the standard FMMO amendment process.
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\1\ 7 U.S.C 601-674, 7253.
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Final Action
In accordance with the 2018 Farm Bill, this final rule amends the
Class I skim milk price formula for milk pooled under Federal milk
marketing orders. Under the amended price formula, the Class I skim
milk price will be the simple average of the monthly advanced pricing
factors for Class III and Class IV skim milk, plus $0.74 per cwt, plus
the applicable adjusted Class I differential.
Section 1403(b)(2)(B) of the 2018 Farm Bill provides that the
implementation of the regulations to amend the Class I skim milk price
formula shall not be subject to the notice and comment requirements of
the Administrative Procedure Act (5 U.S.C. 553), the notice and hearing
requirements of section 8c(3) of the Agricultural Adjustment Act (7
U.S.C. 608c(3)), the order amendment requirements of section 8c(17) of
that Act (7 U.S.C. 608c(17)), nor a referendum under section 8c(19) of
the same Act (7 U.S.C. 608c(19)). Additionally, this final rule must
become effective on May 1, 2019, as
[[Page 8591]]
required by section 1403(b)(1) of the 2018 Farm Bill. AMS, therefore,
is issuing this final rule without prior notice or public comment.
Executive Orders 12866 and 13771
This rule has been determined to be not significant for purposes of
Executive Order 12866, and therefore has not been reviewed by the
Office of Management and Budget (OMB). In addition, because this rule
does not meet the definition of a significant regulatory action, it
does not trigger the requirements contained in Executive Order 13771.
See OMB's Memorandum titled ``Interim Guidance Implementing Section 2
of the Executive Order of January 30, 2017, titled `Reducing Regulation
and Controlling Regulatory Costs''' (February 2, 2017).
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. It is not intended to have a retroactive effect. The
amendment does not preempt any state or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
Regulatory Flexibility Act and Paperwork Reduction Act
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing
Service (AMS) considered the economic impact of this action on small
entities. Accordingly, AMS prepared this final regulatory flexibility
analysis.
The purpose of the RFA is to fit regulatory actions to the scale of
businesses subject to such actions so that small businesses will not be
unduly or disproportionately burdened. Small dairy farm businesses have
been defined by the Small Business Administration (SBA) (13 CFR
121.601) as those businesses having annual gross receipts of less than
$750,000. The SBA's definition of small agricultural service firms,
which includes handlers that are regulated under Federal milk marketing
orders, varies depending on the product manufactured. 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.
Based on AMS data, the milk of 33,481 U.S. dairy farmers was pooled
on the FMMO system for the month of May 2017. Of that total, AMS
estimates that 32,958 dairy farmers, or 98 percent, would be considered
small businesses. During the same month, 301 handler plants were
regulated by or reported their milk receipts to be pooled and priced
under a FMMO. Of the total, AMS estimates approximately 163 handler
plants, or 54 percent, would be considered small businesses. AMS does
not expect the change in the Class I price formula to negatively impact
small entities or impair their ability to compete in the marketplace.
The change in the Class I price formula applies uniformly to both
large and small businesses. The dairy industry has calculated that
applying the ``higher of'' provisions to skim milk prices has returned
a price $0.74 per hundredweight above the average of the two factors
since the pricing formulas were implemented in 2000. Thus, the
inclusion of the $0.74 in the calculation should make the change
roughly revenue neutral. At the same time, it is anticipated that using
the average of the Class III and Class IV advanced pricing factors in
the Class I skim milk price formula will allow handlers to better
manage volatility in monthly Class I skim milk prices using Class III
milk and Class IV milk futures and options. Until now, uncertainty
about which Class price will end up being higher each month has made
effective hedging difficult. Amending the Class I skim milk price
provisions may help small businesses better utilize currently available
risk management tools.
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.
A review of reporting requirements was completed under the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). This final rule
will have no impact on reporting, recordkeeping, or compliance
requirements under the FMMOs because there are no changes to the
current requirements. No new forms are added, and no additional
reporting requirements are necessary. This final rule does not require
additional information collection beyond that currently approved by OMB
for FMMOs (OMB Number 0581-0032--Report Forms Under the Federal Milk
Marketing Order Program).
List of Subjects in 7 CFR Part 1000
Milk marketing orders.
For the reasons set forth in the preamble, 7 CFR part 1000 is
amended as follows:
PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS
0
1. The authority citation for 7 CFR part 1000 reads as follows:
Authority: 7 U.S.C. 601-674, and 7253
Subpart G--Class Prices
0
2. Section 1000.50 is amended by revising paragraph (b) to read as
follows:
Sec. 1000.50 Class prices, component prices, and advanced pricing
factors.
* * * * *
(b) Class I skim milk price. The Class I skim milk price per
hundredweight shall be the adjusted Class I differential specified in
Sec. 1000.52, plus the adjustment to Class I prices specified in
Sec. Sec. 1000.51(b), 1006.51(b) and 1007.51(b), plus the simple
average of the advanced pricing factors computed in paragraph (q)(1)
and (2) of this section, plus $0.74 per hundredweight.
* * * * *
Dated: March 6, 2019.
Bruce Summers,
Administrator.
[FR Doc. 2019-04347 Filed 3-8-19; 8:45 am]
BILLING CODE 3410-02-P