[Federal Register Volume 86, Number 167 (Wednesday, September 1, 2021)]
[Rules and Regulations]
[Pages 48887-48900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18606]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 /
Rules and Regulations
[[Page 48887]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1146 and 1147
[Doc. No. AMS-DA-21-0013]
RIN 0581-AE00
Establishment of a Dairy Donation Program
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule; request for comments.
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SUMMARY: This rule establishes the Dairy Donation Program as required
by the Consolidated Appropriations Act of 2021. Under the program,
eligible dairy organizations that account to a Federal milk marketing
order and incur a qualified expense related to certain dairy product
donations may apply for and receive reimbursements for those donations.
The program is intended to facilitate donation of eligible dairy
products and prevent and minimize food waste.
DATES:
Effective Date: This interim final rule is effective September 2,
2021 and expires September 1, 2023, unless extended by notification in
the Federal Register.
Public Comment Date: Public comments on this interim final rule
must be submitted on or before November 1, 2021.
Information Collection Comment Date: Pursuant to the Paperwork
Reduction Act, comments on the information collection burden must be
received by November 1, 2021.
ADDRESSES: Comments can be submitted online at www.regulations.gov.
Comments received will be posted without change, including any
personally identifying information provided. Comments will be made
available via the internet at www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Erin Taylor, Director, Order
Formulation and Enforcement, AMS Dairy Program, USDA; 1400 Independence
Avenue SW, Room 2973-S, Washington, DC 20250; telephone: (202) 720-
4392; email: [email protected]; web address: www.ams.usda.gov/ddp.
SUPPLEMENTARY INFORMATION: Section 762 of the Consolidated
Appropriations Act of 2021 (CAA) (Pub. L. 116-260) authorizes the
Secretary of Agriculture (Secretary) to establish a program to
reimburse dairy organizations for donated dairy products to non-profit
organizations for distribution to recipient individuals and families.
The Secretary delegated authority to establish and administer this
program to the Agricultural Marketing Service (AMS). This rule outlines
the provisions of the new Dairy Donation Program (DDP) codified at 7
CFR part 1147. Program provisions are intended to encourage the
donation of dairy products and to prevent and minimize food waste. The
DDP is an additional dairy donation program that overlays on existing
USDA dairy milk donation activities such as the Milk Donation
Reimbursement Program (MDRP). The MDRP was established as part of the
2018 Farm Bill to facilitate the donation of fluid milk products and
avoid food waste. The program was funded for $9 million in fiscal year
2019, and $5 million per fiscal year thereafter. DDP and MDRP are
separate from USDA purchase programs. The donation program provides for
reimbursement of certain costs for donations made between two private
entities. USDA's TEFAP and Section 32 are done through a bid process
where USDA purchases the product and arranges for delivery to the
distribution point.
This rule also amends provisions of the MDRP (codified at 7 CFR
part 1146), where appropriate, to gain administrative efficiencies and
lessen the burden for entities participating in the two programs. DDP
and MDRP are separate and distinct from the USDA safety net program
(Dairy Margin Coverage), indemnity and disaster assistance programs,
risk management tools through the public-private partnership of the
Federal Crop Insurance Program, or USDA purchases of commodities, which
may include dairy products depending on the market conditions and
demand from school lunch or nutrition programs.
Background
In 2020, the COVID-19 pandemic disrupted dairy supply chains and
displaced significant volumes of milk normally used in food service
channels. This led to milk being dumped or fed to animals across the
United States; AMS estimates that the volume of milk dumped due to
pandemic-related supply chain issues was almost triple what is
typically observed during normal market conditions.\1\ At the same
time, amidst surging unemployment and economic hardship nationwide, an
increasing number of individuals have been in need of nutrient-dense
foods such as dairy products. Throughout 2020 and 2021, milk and dairy
products have been in food donations authorized under the Coronavirus
Aid, Relief, and Economic Security Act (CARES) and through the
Commodity Credit Corporation (CCC). In December 2020, Congress also
authorized an additional $400 million until expended to establish the
DDP, designed to encourage the timely and efficient distribution of
dairy products to families and individuals while reducing food waste.
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\1\ USDA Federal Milk Marketing Order Statistics, Other Use
Volumes, March and April, 2015 through 2021.
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While the DDP is intended to assist in balancing the supply chain
during the pandemic recovery, it also will provide the benefit of
creating an incentive to donate dairy products during the normal spring
flush of milk production. During normal marketing years (pre-pandemic),
daily milk production in the spring averaged 6 to 7 percent more than
in the lower production months of the fall.\2\ Economic Research
Service (ERS) 2019 food security data estimates that 10.5 percent of
U.S. households were food insecure at some time during 2019.\3\ ERS
2020 data has not been released, but it is reasonable to assume food
insecurity was higher in 2020 because of high unemployment and
nationwide economic hardship. The United States remains in the midst of
the recovery, and even when
[[Page 48888]]
employment returns to more normal levels there will continue to be food
insecurity. The persistent need for nutrient-dense foods such as dairy
products can be met, in part, through donations encouraged by the DDP.
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\2\ USDA, National Agricultural Statistics Service, Monthly Milk
Production data, 2012 through 2020.
\3\ Trends in U.S. Food Security, 2019; Update for September 9,
2020. https://www.ers.usda.gov/topics/food-nutrition-assistance/food-security-in-the-us/interactive-charts-and-highlights/#childtrends, accessed August 23, 2021.
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As detailed later in this rule, the normal rulemaking process would
be impracticable, unnecessary, and contrary to the public interest in
light of the importance of distributing donated dairy products as
quickly as possible to individuals and families. Therefore, AMS finds
that there is good cause to forgo the notice and comment requirements
in the Administrative Procedure Act (APA) for this rulemaking.
The following paragraphs give a general overview of how the DDP
will operate. Detailed explanations of program provisions can be found
later in the Program Provisions section.
Who is eligible to participate?
Program eligibility is open to eligible dairy organizations (EDOs),
defined as dairy farmers (either individually or as part of a
cooperative) or dairy processors that meet the following conditions:
(1) Account to a Federal milk marketing order (FMMO) marketwide pool;
and (2) incur a qualified expense. Although the definition of EDO
includes individual dairy farmers, many such farmers might not meet the
other specified conditions to qualify as EDOs. For example, many such
farmers would not incur qualified expenses because they do not donate
eligible dairy products, since they do not have the infrastructure to
process raw milk into such products. Those individual farmers who do
meet the required conditions, however, would qualify as EDOs under
statutes and this rule for both the DDP and MDRP.
As explained below, the DDP and MDRP refer to the same statutory
EDO definition; therefore, this rule amends the MDRP to reflect the
statutory interpretation explained below.
(1) Account to a FMMO Marketwide Pool
The DDP authorizing statute \4\ adopts the EDO definition contained
in the statute establishing the MDRP.\5\ When AMS issued the final rule
for the MDRP, it interpreted the statutory language, ``account to a
FMMO marketwide pool'', to apply to entities that are regulated by, and
therefore file reports with, a FMMO. Participation in the MDRP has been
limited, partly due to the requirement to be regulated.
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\4\ Sec. 762(a)(1) of the Consolidated Appropriations Act of
2021.
\5\ Sec. 1431 of the Agricultural Act of 2014 (7 U.S.C.
9071(a)). Implementing regulations are codified at 7 CFR part 1147.
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The COVID-19 pandemic and its impacts affected the entire United
States. Supply chain disruptions described earlier were not limited to
only those participating in a FMMO. Consequently, Congress authorized
the DPP through a broad relief package. In reviewing Congress's intent
to encourage dairy product donation across the country, AMS has
determined the interpretation of ``account to'' requiring regulation by
a FMMO is too narrow; instead, an EDO could ``account to'' a FMMO
marketwide pool by filing a report with a FMMO office. Consequently,
this rule revises the definition of ``eligible dairy organization'' for
MDRP by removing the requirement that the EDO be regulated under a
FMMO. It also adopts the same definition for the DDP.
The report the EDO files to ``account to'' a FMMO marketwide pool
will list the fresh fluid products and/or bulk dairy commodity products
purchased and how they were utilized to produce donated eligible dairy
products. EDOs can contact their local FMMO office or access the DDP
website to determine the applicable FMMO office where the report should
be filed. Since EDOs may not know they will be donating product during
the production month, reports may be filed retroactively. Filing of
this report for the purpose of participating in the DDP will not cause
the EDO to become regulated by the FMMO.
(2) Incur a Qualified Expense
The statute further specifies that an EDO must incur a qualified
expense. Since only Class I fluid products are donated through the MDRP
and most Class I processors are regulated by a FMMO, incurring a
qualified expense in the MDRP is currently interpreted as paying
minimum classified values into a FMMO pool because that is the
requirement for processors regulated by a FMMO. As explained above, an
EDO no longer needs to be regulated under a FMMO. This rule adds a
definition of ``qualified expense'' to MDRP regulations to specify that
a qualified expense is not tied to the FMMO regulatory requirement of
paying minimum classified values. The same definition also applies to
the DDP.
EDOs incur a qualified expense by either purchasing fresh fluid
milk product (raw milk, skim milk, cream, or concentrated fluid milk
products) for processing into an eligible dairy product or purchasing
bulk dairy commodity product for further processing into an eligible
dairy product.
Dairy processors are often associated with buying fresh fluid milk
products for processing into dairy products. The structure of the dairy
industry is such that processors are also purchasing bulk dairy
commodity products for further processing into retail packaging. For
example, a processor buys 40-pound cheese blocks to further process and
package into 8-ounce blocks or bags of shredded cheese typically
preferred by consumers and eligible distributors alike. The DDP is
intended to facilitate these types of product donations. Therefore, in
addition to processors who buy fresh fluid milk for processing, the DDP
will allow processors who purchase and further process bulk commodities
for donation to qualify as an EDO. To be considered an EDO, a secondary
processor will also need to account to a FMMO marketwide pool as
described earlier.
Once these two above conditions--accounting to a FMMO and incurring
a qualified expense--are met, EDOs participate in the program by
forming partnerships with eligible distributors and then submitting a
Dairy Donation and Distribution Plan (Plan) to AMS for approval. If an
EDO or eligible distributor is looking for a partner, they may contact
DDP Office for assistance.
Because regulations now include a definition of ``qualified
expense'', the definition of ``eligible dairy organization'' is further
revised to cite that definition when referring to the requirement that
an EDO must incur a qualified expense.
What will be reimbursed?
Upon Plan approval, EDOs can submit a Reimbursement Claim Form
(Claim Form) to receive reimbursement for donations made. DDP will
reimburse EDOs for the all or part of the following: (1) Input costs--
fresh fluid milk or bulk dairy commodity product milk equivalent used
in the eligible dairy product; (2) manufacturing costs; and (3)
transportation costs.
(3) Input Costs--Fresh Fluid Milk or Bulk Dairy Commodity Product Milk
Equivalent
In the FMMO system, milk is priced based on its end use. FMMO
classifications are generally: Class I--traditionally the highest class
price--for beverage fluid milk products such as whole, skim, nonfat,
and flavored milks; Class II for soft products such as yogurt, ice
cream, and packaged fluid cream; Class III for spreadable and hard
cheeses; and Class IV for butter and milk products in dried form.
Announced monthly, FMMO-minimum classified prices reflect surveyed end-
[[Page 48889]]
product wholesale market prices. Under a FMMO, regulated processors are
required to pay at least minimum classified values for how they use
their milk.
For processors purchasing and processing fresh fluid milk products
(raw milk, skim milk, cream, or concentrated fluid products), the DDP
will reimburse for the FMMO-minimum classified value applicable on the
date of production for fresh fluid milk products used to make the
donated eligible dairy product. FMMO prices are a good approximation of
what the processor paid for the fresh fluid milk products because they
represent observed market values paid for product at the time of
purchase. The DDP will not reimburse for powders and other dry dairy
products used as an ingredient in eligible dairy products (for example,
powder used to fortify cheeses or ice cream).
Reimbursement is not extended to these ingredients because the DDP
is designed to encourage the use of excess fresh fluid milk for
donation, rather than being dumped. Dry milk powders in retail
packaging, such as 10-ounce containers of nonfat dry milk, which are
made directly from fresh fluid milk, are considered eligible dairy
products under this program as it is likely surplus fresh fluid milk
was manufactured into dry milk powder as opposed to being dumped.
Since FMMO-minimum classified prices are on a hundredweight basis,
the EDO will report its donation in the quantity and size of the
donated product, which will be converted to hundredweights with a yield
factor (how much product can be made from 100 pounds of milk).
Applicable announced minimum class skim and butterfat prices will be
used in determining the input cost of the donated dairy product. The
EDO will have the ability to provide its actual product yield factor or
the EDO can use a standard yield factor. Standard yield factors will be
posted on the Dairy Donation Program website.
Processors buying bulk dairy commodity products for further
processing and donation, as described earlier, will be reimbursed at
the classified use value applicable for the month the eligible dairy
product was processed in the consumer-type package. The reimbursed
value will represent the milk-equivalent market price of the bulk dairy
product at the time of conversion into an eligible dairy product.
(4) Manufacturing Costs
Processors incur expenses beyond input costs to make dairy
products. To encourage dairy product donations, the DDP will reimburse
for some of the costs to convert fresh fluid milk product into an
eligible dairy product.
Manufacturing costs will be reimbursed at the make (manufacturing)
allowance levels in the FMMO system, which are generally accepted by
the industry as representative costs of manufacturing dairy products
from raw milk. For Class I and II, the Class IV make allowance
contained in the Class IV price formula will be applied. AMS lacks data
on manufacturing costs for Class I and II products and therefore
selects the lower of the two FMMO make allowances to ensure processors
are not reimbursed for more than their actual manufacturing costs. As
Class I and II products require different processing, the actual
manufacturing costs could be higher than the Class IV manufacturing
allowance. This rule seeks public comment and supporting data related
to actual manufacturing costs for Class I and II products. For Class
III and IV products, the manufacturing allowances in the respective
class price formulas will be applied.
Currently, the Class III and Class IV FMMO makes allowances are
$3.17 and $2.16 per hundredweight, respectively, for milk containing
3.5 percent butterfat. If the FMMO make allowances are updated in the
future, the DDP will be automatically adjusted to reflect these
changes.
(5) Transportation Costs
Transportation costs from the processor to distribution outlet are
often cost prohibitive. Absent reimbursement, processors may not be
willing to incur additional transportation costs and feeding
organizations may lack the funding to cover these costs to facilitate
the donation. DDP aims to facilitate timely donations and reduce food
waste. Therefore, this program will cover part of the transportation
costs from the EDO to the eligible distributor. This may be especially
beneficial to rural communities whose donation sites are often far from
plants serving them and who may not receive assistance from other
government feeding programs with distribution points closer to urban
centers.
As the reimbursement value will be paid to the EDO, the DDP will
only reimburse for transportation if the EDO incurred the expense. If
donated eligible dairy products are picked up from the plant by the
eligible distributor, no transportation reimbursement will be paid. The
transportation cost reimbursement rate is defined later in this rule.
(6) Total Reimbursement Value
Section 762(d)(2)(A) of the CAA specifies the total reimbursement--
the sum of input, manufacturing, and transportation costs--must be set
neither too high (such that it would ``interfere with the commercial
marketing of milk or dairy products'') nor too low (such that it would
fail to ``be sufficient to avoid food waste''). The statute further
requires total reimbursement to be between the highest and lowest of
the classified milk values. To ensure costs can be sufficiently covered
for most donations, total reimbursement payment, on a per hundredweight
basis, will be capped at the Class I value for the highest FMMO
differential zone (Dade County, Florida). Capping at the higher FMMO
zone will allow for Class I handlers to obtain some reimbursement for
manufacturing and transportation costs.
Section 762(d)(2)(B)(iv) of the CAA further allows the Secretary to
maintain traditional price relationships--Class I being the highest,
followed in sequence by II, III and IV--in setting the reimbursement
rate. In 2020, dairy markets experienced pronounced class price
inversions, where the Class III price was significantly higher than the
Class I price in many areas of the country. However, the Class III
price has been above the Class I price in Dade County, Florida only
three times since the current pricing system was adopted on January 1,
2000.\6\ Such extreme inversions are not anticipated in the foreseeable
future, as both short-term COVID-19-related disruptions and long-term
production capacity issues are beginning to ease. While the DDP does
not directly determine classified prices and price relationships, the
program rules should not exacerbate price inversions if they occur.
Therefore, in times of price inversion, where the Class I price is not
the highest class price, total reimbursements will continue to be
capped at the Class I price for Dade County, Florida.
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\6\ USDA, Federal Milk Marketing Order Statistics, Final Class
and Component Prices by Order.
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When do plans and reimbursement claims need to be submitted?
Entities must submit Plan and Eligible Distributor Certification
Forms (Certification Forms) to AMS for approval before they can submit
Claim Forms for reimbursement. AMS will approve or disapprove
Certification
[[Page 48890]]
Forms within 15 business days of receipt. Reimbursements claims, along
with supporting documentation, can be filed any time after the Plan is
approved and the donation is made. AMS will use the supporting
documentation to verify program requirements were met. Plans only need
to be submitted once for approval. The DDP does not require annual Plan
renewal.
How will AMS handle both the DDP and MDRP?
Although program funds for the DDP and MDRP are statutorily
prohibited from being consolidated, the two programs will operate as
one from a stakeholder standpoint. EDOs making Class I fluid milk
product donations--which are covered by both programs--will be
reimbursed through MDRP funds at the difference between the Class I and
lowest classified price and receive a supplemental reimbursement of the
lowest classified price plus the manufacturing and transportation cost
reimbursement through DDP funds. Total combined reimbursement will be
capped at the Class I price in Dade County, Florida.
EDOs already enrolled in MDRP will automatically be enrolled in the
DDP and qualify to receive supplementary payments for fluid milk
products donated under their currently approved MDRP Plans. To lessen
the burden on applicants and gain administrative efficiencies, new Plan
and Claim Forms will be used for both the DDP and MDRP. AMS will ensure
program funds are paid according to the provisions of both programs.
Finally, this interim final rule simultaneously amends the MDRP
regulations, where applicable, reflecting the new Plan, Certification
Form, Report of Receipts and Utilization, and Claim Forms that will be
used to administer the program.
Will there be a retroactive period for reimbursement?
Section 762(h) of the CAA requires supplementary payments be made
to EDOs participating in the MDRP for donations made on or after
January 1, 2020. Since the statute allows for retroactive reimbursement
to those participating in DDP, a retroactive date of January 1, 2020,
also applies to the DDP to better streamline administration of the two
programs. To ensure adequate availability of funds for donations made
before enactment of the CAA, total program expenditures for eligible
dairy product donations made from January 1, 2020 to December 27, 2020,
will be limited to no more than $50 million.\7\ An EDO seeking
retroactive reimbursement must include in its Plan information on the
volume of these donations from January 1, 2020, through December 27,
2020. A deadline for requesting retroactive reimbursement will be
posted on the AMS web page for DDP. If total reimbursement requests
exceed $50 million, reimbursements will be prorated.
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\7\ As indicated in the Economic Analysis, USDA expects the DDP
to expend $68 million annually. In determining funds available for
this retroactive period, USDA is limiting expenditures to
approximately 80 percent ($50 million), consistent with other USDA
COVID-19 recovery programs (7 CFR part 9--Coronavirus Food
Assistance Program).
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Program Provisions
The following details the DDP provisions and amendments to the
MDRP, where applicable.
Definitions
The statute includes definitions for terms used. Section 1147.1
provides definitions of those terms as they are used in the new
program. Key terms are ``eligible dairy organization,'' ``eligible
dairy product,'' ``eligible distributor,'' ``eligible partnership,''
and ``qualified expense.''
Eligible dairy organization. As explained in the Background
section, section 762(a)(1) of the CAA adopts the same EDO definition
contained in the statute establishing the MDRP. See Sec. 1431(a) and
(b) of the Agricultural Act of 2014 (7 U.S.C. 9071(a)). The regulatory
definition matches the statutory definition, which specifies that a
dairy organization eligible to participate in the program is a dairy
farmer, either individually or as part of a cooperative, or a dairy
processor that: (1) Accounts to a FMMO marketwide pool; and (2) incurs
qualified expenses. See id.
Eligible dairy product. Section 762(a)(2) of the CAA specifies that
only dairy products primarily made from cow's milk, including fluid
milk, that are produced and processed in the United States are eligible
for donation and reimbursement under the DDP. Accordingly, Sec. 1147.1
defines ``eligible dairy product'' as a dairy product meeting the
commodity specifications referenced in Sec. 1147.3. Currently, other
than cow's milk, there is not a surplus of milk or any other form of
milk being dumped at the farm. Given that the program is designed to
prevent surplus milk from being dumped at the farm, it is the
Secretary's discretion to limit to cow's milk.
Eligible distributor. Section 762(a)(3) of the CAA defines
``eligible distributor'' as ``a public or private nonprofit
organization that distributes donated eligible dairy products to
recipient individuals and families.'' Section 1147.1 likewise defines
``eligible distributor'' as a public or private non-profit feeding
organization that distributes, or coordinates the distribution of,
donated eligible dairy products to recipient individuals and families.
Eligible distributors such as food banks, shelters, kitchens, and other
food distribution organizations would be eligible so long as they are a
nonprofit entity. Under this new program, participating eligible
distributors will fill out an Eligible Distributor Certification Form
to verify their non-profit status and affirm they have appropriate
facilities and processes for distributing donated dairy products to
recipient individuals and families.
Eligible partnership. Section 762(c) of the CAA requires that an
EDO and eligible distributor form a partnership to participate in the
DDP. Each partnership is required to submit a Plan and a Certification
Form, to AMS containing information about their respective roles.
Requiring the parties to apply as a partnership ensures that all
program provisions will be met and an agreed-upon structure will be in
place when eligible dairy products are available for donation and
distribution. Section 762(a)(4) of the CAA defines ``eligible
partnership'' as ``a partnership between an eligible dairy organization
and an eligible distributor'' and this rule adopts the same definition.
AMS recognizes some EDOs may have processing plants in multiple
locations that may report to different FMMOs. Similarly, eligible
distributors may have multiple distribution sites; for example, several
food pantries are operated by one umbrella organization. Thus, under
Sec. 1147.102(a), the eligible partnership can submit one Plan to
cover multiple plants and/or distribution points as long as only one
EDO and one eligible distributor are represented. Individual EDOs and
eligible distributors can also form other partnerships, but they are
required to submit separate Plans for each partnership.
Qualified expense. The statute does not define ``qualified
expense,'' but does specify that one needs to be incurred to be
eligible for program participation. Section 1147.1 defines ``qualified
expense'' as the cost incurred to purchase fresh fluid milk for
processing into eligible dairy products or the cost incurred to
purchase bulk dairy commodity products for further processing into
eligible dairy products. Qualified expense is different than the
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reimbursement rate, which is defined later in this rule.
Because defining ``qualified expense'' is fundamental to
determining program eligibility and the MDRP and DDP reference the same
``eligible dairy organization'' statutory definition, the ``qualified
expense'' definition is also added to the MDRP regulation.
Additional terms necessary for administration of the program are
defined in Sec. 1147.1. ``Program'' is defined as the Dairy Donation
Program and ``Secretary'' is defined as the Secretary of the United
States Department of Agriculture or a representative authorized to act
in the Secretary's stead.
Commodity Specifications
The DDP is intended to reimburse eligible dairy organizations for
timely donations of eligible dairy products and minimize food waste. It
is therefore reasonable for AMS to ensure that eligible dairy products
donated under the DDP meet minimum food safety and quality standards
and in package sizes desired by eligible distributors, consistent with
the intent of the program to minimize food waste that might otherwise
result. Section 1147.3 defines the commodity specifications that must
be met. Eligible dairy organizations must comply with all applicable
Federal, State, and local laws, executive orders, and rules and
regulations related to its performance under this program. In addition,
to qualify under the program eligible dairy products must:
1. Be made primarily from cow's (bovine) milk produced in the
United States;
2. Be packaged in consumer-sized packaging;
3. Meet the applicable provisions for dairy products in the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), as amended. Grade
`A' dairy products shall meet the applicable provisions of the current
edition of the Pasteurized Milk ordinance; and
4. Have a sell-by, best-by, or use-by date no sooner than 12 days
from the date the eligible dairy product is delivered to the eligible
distributor.
Program provisions specify donated dairy products mut be in
consumer-sized packaging. This provision should be interpreted by the
eligible partnership as to whatever consumer-sized package format is
agreeable to both entities. Examples of consumer-sized packaging
include, but are not limited to, gallons of milk, 8-ounce blocks of
cheese, single serve containers of yogurt, 1-pound packages of butter,
or large bags of milk if the eligible distributor has the ability to
dispense (i.e., a soup kitchen). When submitting Plans for approval,
the EDO is required to list what types of products it will be donating.
AMS will check that information against distributor process provided by
the eligible distributor to ensure it has the ability to distribute
that types of products to be donated.
Program Eligibility and Participation
Section 1147.100 provides that an eligible dairy organization must
be a member of a partnership whose Plan has been approved by AMS to be
eligible for reimbursements under the DDP.
Section 1147.102 outlines requirements for Plan submission in order
to be considered for the program. Plans submitted to AMS for program
approval must include a signed affirmation regarding the type of
product to be donated and the EDO's ability to process and transport
eligible dairy products consistent with the requirements in the
commodity specifications under Sec. 1147.3. Along with the Plan
submission, eligible distributors are required to submit a signed
Certification Form, which includes a description of the eligible
distributor's distribution process, contact information, and a tax
identification number to ensure compliance with program provisions. As
specified in Sec. 1147.208, AMS will only collect information deemed
necessary to determine whether an eligible partnership's Plan should be
approved. All proprietary business information submitted will be used
only for the purposes of the program and will be kept confidential by
AMS.
Section 1147.104 specifies the process AMS will use to review
program applications and determine whether to approve Plans submitted
by eligible partnerships. Within 15 business days of application
submission, AMS will review the Plan and Certification Form, determine
whether to approve or disapprove, and notify the eligible partnership
of the determination. Under Sec. 1147.104(a)(1), AMS will review the
information submitted by the partnership, including the signed
confirmation that the partnership can meet the requirements related to
proper processing, transport, storage, and distribution of eligible
dairy products until they are distributed. Under Sec. 1147.104(a)(2),
AMS will consider the extent to which the Plan would advance the
statutory purposes of the DDP, namely, whether the Plan would
facilitate the timely donation of eligible dairy products and prevent
and minimize food waste. See Sec. 762(b) of the CAA.
Finally, section 762(c)(2)(B)(i) of the CAA specifies that priority
review will be given to submitted Plans where an emergency or disaster
was a substantial factor, including a declared or renewed public health
emergency under section 319 of the Public Health Service Act (42 U.S.C.
247(d)) or a disaster designated by the Secretary. In reviewing a Plan,
AMS will determine if an emergency or disaster was a substantial factor
in the Plan's submission. In this case, ``substantial factor'' means
that a supply and/or demand disruption caused by the emergency or
disaster event is a main reason for the partnership submitting the
Plan. For example, the COVID-19 public health emergency--which caused a
significant decrease in school and restaurant dairy demand, leading to
large volumes of displaced milk and many people in need of food
assistance--could be considered a justification for priority review. If
an emergency or disaster is deemed a substantial factor, AMS will
prioritize review of that Plan to facilitate donations and meet an
immediate need. Section 1147.104(a)(3) incorporates those factors for
Plan prioritization.
Once approved, Plans do not need to be resubmitted in subsequent
fiscal years, unless changes are made. Eligible partnerships that
received reimbursement from the MDRP will be automatically enrolled in
the DDP to receive the supplemental reimbursement as defined in Sec.
1147.109.
Reimbursement and Reimbursement Price
Section 762(d) of the statute requires the Secretary to reimburse
EDOs with approved Plans. Section 1147.106(a) provides the process and
describes the necessary information and documentation AMS will require
to verify the EDO's donation and calculate its reimbursement. To
receive reimbursement, the EDO must complete and submit a Reimbursement
Claim Form (Claim Form) that includes: The type, volume, and
manufactured date of the eligible dairy products donated; the entity
type (processor or eligible distributor); the location(s) of the
plant(s) that processed the eligible dairy product(s) and where donated
dairy products were distributed; the universal product code(s) (UPCs)
for donated product(s); the sell-by, best-by, or use-by date(s) for
donated product(s) and the dates the donated dairy products were
processed and shipped to the eligible distributor.
There is no requirement dictating the frequency of Claim Form
submissions; therefore, any time after its Plan is approved, the EDO
can submit Claim
[[Page 48892]]
Forms for donations made. However, there is limited funding for this
program so prompt submission may be beneficial to EDOs. The EDO also
must provide adequate documentation, which should be available through
its normal business records, to verify the eligible distributor
received the donated eligible dairy products. Such documentation could
include, but is not limited to, processing and shipping records, bills
of lading, storage records, or receiving records from the eligible
distributor. As specified in Sec. 1147.208, AMS will only collect the
information and documentation needed to verify the EDO's reimbursement
claim.
Section 762(d)(4) of the CAA allows the Secretary to make
retroactive reimbursements to EDOs that donated eligible dairy products
before their Plans are approved. Eligible dairy products donated
through the MDRP are eligible for supplemental reimbursement through
DDP for donations made on or after January 1, 2020. The statute also
provides for retroactive reimbursement for donations made through DDP
prior to Plan approval, though a specific retroactive date is not
provided. To gain administrative efficiencies and streamline the two
programs, donations of eligible dairy products through DDP beginning on
the same date also will be eligible for reimbursement. Partnerships
will need to submit Plan and Certification Forms for approval prior to
submitting a Reimbursement Form for donations made prior to Plan
approval. Accordingly, Sec. 1147.106(a)(3) provides for donations of
eligible dairy products beginning on January 1, 2020, to be eligible
for reimbursement under this program. As described above, total
reimbursement for donations made from January 1, 2020 through December
27, 2020, is capped at $50 million.
As authorized by section 762(d)(3)(B) of the CAA, AMS may verify
the accuracy of supporting documentation with spot checks and audits
under Sec. 1147.206.
Under section 762(d)(2)(A) of the CAA, the Secretary shall set a
reimbursement price that reflects the cost of the milk required to make
the donated eligible dairy product, is between the FMMO Class I and
Class IV minimum prices for the month of production, is sufficient to
avoid food waste, and does not interfere with the commercial marketing
of milk or dairy products. Section 1147.108 provides for reimbursement
of three separate cost factors: (1) Input cost--fresh fluid milk or
bulk dairy commodity product milk-equivalent cost; (2) manufacturing
cost of converting fluid milk into a product; and (3) transportation
cost from the processing plant to the eligible distributor. Section
1147.108(a) provides that reimbursements will be the sum of the three
cost factors.
For the first of these factors, input cost, processors purchasing
and processing fresh fluid milk products (raw milk, skim milk, cream,
or concentrated fluid products), will be reimbursed at the applicable
FMMO minimum classified skim and butterfat values. Processors
purchasing bulk dairy commodity products for further processing into
eligible dairy products will be reimbursed at the applicable FMMO
minimum classified skim and butterfat values for the fluid milk
equivalent contained in the bulk product.
That value will be determined by the milk's end use (Class I for
fluid milk products, Class II for soft products such as yogurt, Class
III for cheese products, and Class IV for butter and powder products)
pursuant to 7 CFR 1000.40 and the applicable classified price in effect
for the month of production pursuant to 7 CFR 1000.50.
The manufacturing cost for processing fluid milk is represented by
the applicable FMMO make allowances contained in 7 CFR 1000.50. The DDP
will use the FMMO make allowances in the Class III and IV price
formulas to reflect manufacturing costs for Class III and IV products,
as they are based on surveyed cost data of wholesale Class III and IV
products and are generally accepted by industry stakeholders as
appropriate cost estimates. For Class I and II products, however, the
Department lacks data on manufacturing costs. As such, the lowest make
allowance, Class IV, will be the representative manufacturing cost for
Class I and II products. It is reasonable to expect that Class I and II
products have different manufacturing costs than Class IV products due
to different processing requirements. USDA is seeking comments on
manufacturing costs for these classes of products. If submitted data
demonstrates that actual Class I and II manufacturing costs differ
significantly from the Class IV make allowance, then the Class I and II
manufacturing costs could be amended in the final rule. If the public
comment period results in updated make allowances for Class I and Class
II products, the amended make allowances will not be retroactive to the
effective date of this rule.
As explained in the Background section, the program will not
reimburse additional processing costs for bulk products purchased and
further processed. Processors purchasing bulk dairy commodity products
for further processing will receive the same manufacturing cost
reimbursement as described above. When these processors buy bulk
product, it is on a per-pound basis. It is reasonable to assume the
price they paid for the bulk product represented both the fluid milk
value (which they are being reimbursed for as described earlier) and
the cost to convert the fluid milk into the bulk commodity. Therefore,
eligible dairy products made from bulk dairy commodity products also
will be eligible for manufacturing cost reimbursement.
The transportation cost reimbursement will be based on the U.S.
monthly average diesel fuel price \8\ for the month the donation was
made, a fuel economy factor of 6.1 miles per gallon,\9\ and the
shortest hard-surface distance from the plant that processed the
donated eligible dairy product to the eligible distributor's physical
distribution location. These factors are based on relevant government
transportation statistics which are similar to those used in FMMOs with
transportation credits, the Appalachian \10\ and Southeast \11\ Orders
Transportation reimbursement will only be paid if the EDO incurred the
transportation cost, which will be verified on audit.
---------------------------------------------------------------------------
\8\ U.S. Energy Information Administration (EIA), 2021; Gasoline
and Diesel Fuel Update for August 16, 2021. https://www.eia.gov/petroleum/gasdiesel/, accessed August 23, 2021.
\9\ United States Department of Transportation, 2021;
Combination Truck Fuel Consumption Data. https://www.bts.gov/browse-statistical-products-and-data/freight-facts-and-figures/combination-truck-fuel-consumption, accessed August 23, 2021.
\10\ 7 CFR 1005.82 and 1005.83.
\11\ 7 CFR 1007.82 and 1007.83.
---------------------------------------------------------------------------
Section 762(h) of the CAA requires the Secretary to make
supplemental reimbursements to EDOs receiving reimbursements under the
MDRP from January 1, 2020, to the date when DDP program funds are no
longer available. AMS recognizes an EDO under MDRP will also be
eligible under DDP. Further, eligible dairy products under MDRP also
qualify as eligible dairy products under DDP (notably, fluid milk
products). Since DDP reimburses at a higher rate than MDRP, a
supplemental reimbursement is needed to properly use funds for and
fulfill the purposes of both programs. Section 1147.109 provides the
process AMS will follow to make a supplemental reimbursement to EDOs
receiving reimbursement under MDRP. An EDO with an already approved
Plan under MDRP does not need to apply to DDP. AMS will automatically
reimburse the eligible
[[Page 48893]]
dairy organization the difference between the reimbursement it received
under MDRP and the reimbursement it is eligible to receive for the same
product under DDP, calculated in Sec. 1147.108. New applicants to the
DDP that donate fluid milk products will be automatically enrolled in
MDRP. Upon approval, AMS will make reimbursements under the MDRP
provisions and then supplemental reimbursements under the DDP
provisions.
Administrative Provisions
Section 762(g) of the CAA requires AMS to publish donation activity
for the program. Accordingly, Sec. 1147.200 provides that AMS will
periodically report on its publicly accessible website the aggregated
donation activity under this program. Such information will include
types and volume of product donated, as well as remaining available
funds. AMS also will post on its publicly accessible website the Plan
and Claim Form templates to be submitted for program participation.
Section 762(e) of the CAA prohibits the sale of eligible dairy
products donated under the DDP back into commercial markets and
specifies that eligible distributors who violate that prohibition will
not be eligible for future participation in the DDP. Section 1147.204
implements the statutory prohibition and penalty for violation. In
addition, the program prohibits reimbursement for donated eligible
dairy products made in conjunction with marketing or promotional
events.
Section 762(f) of the CAA directs the Secretary to conduct
appropriate reviews or audits to ensure the integrity of the DDP. Under
section 762(d)(3)(B) of the CAA, the Secretary is further authorized to
verify the accuracy of submitted documentation through spot checks and
audits. Section 1147.206 provides that AMS will verify the proper
delivery of and payment for donated eligible dairy products.
Specifically, AMS will ensure the donated eligible dairy products were
delivered to the eligible distributor and the accuracy of the
reimbursed value paid to the EDO. The section further provides for the
review, audit, and spot checks of information submitted.
As mentioned in the above discussions, Sec. 1147.208 requires AMS
to maintain confidentiality regarding information collected to
administer the program and to use the information only for program
purposes.
A books and records provision is included in Sec. 1147.209 to
ensure the EDO maintains necessary records to be made available to AMS
upon request in conjunction with an audit.
Section 1147.210 specifies that dairy products sold or donated
under any other USDA commodity purchase or donation program, other than
the MDRP, are not eligible for reimbursement under the DDP. From time
to time, USDA may purchase dairy products for use in nutrition
assistance programs or other uses, but vendors are compensated for
those purchases through funding under those program provisions. One of
the main purposes of the DDP is to reduce food waste by encouraging the
donation of additional dairy products through eligible distributors.
Thus, eligible dairy organizations who have received compensation for
dairy product purchases under other USDA programs may not receive
reimbursements for the same dairy products under the DDP.
Exemption From Notice and Comment
Rules ``relating to public property, loans, grants, benefits, or
contracts'' are not subject to the rulemaking requirement of the
Administrative Procedure Act at 5 U.S.C. 553. See 5 U.S.C. 553(a)(2).
Thus, AMS is publishing this interim final rule without previously
publishing a proposed rule because this rule relates to a benefit.
Additionally, AMS finds it has good cause to do so because providing
prior notice and an opportunity for comment are impracticable,
unnecessary, or contrary to the public interest under 5 U.S.C.
553(b)(B).
In determining whether a program is a ``benefits'' program, courts
consider whether ``benefits'' are clearly and directly involved in the
agency action. Humana of South Carolina, Inc. v. Califano, 590 F.2d
1070 at 1083-84 (D.C. Cir. 1978). The purpose of the DDP is to
facilitate timely donation of eligible dairy products and to prevent
and minimize food waste by enabling dairy organizations to partner with
public or private non-profit organizations. The overall purpose of the
DDP is similar to other federal programs that provide food and
nutrition assistance to individuals and families in need. Furthermore,
the DDP fulfills two needs: (1) The donated dairy products can provide
food and nutrition to eligible recipients, as determined by eligible
distributors (public or private non-profit organizations); and (2) the
eligible dairy organizations are able to participate in a program where
they can receive reimbursement for donating dairy products to those
determined to be in need. In addition, under the DDP, the public or
private non-profit organization determines whether the recipients
qualify for the donated dairy products based on their established
criteria. As such, individuals and families in need of dairy products
are able to receive these dairy products through donation. AMS is
issuing regulations to establish and administer the DDP, a program that
is clearly and directly involved in the disbursement of benefits, and
thus is exempt under section 553(a)(2) from the notice and comment
requirements of the APA.
Furthermore, the APA provides that an agency is not required to
conduct notice-and-comment rulemaking when the agency, for good cause,
finds that notice and comment is impracticable, unnecessary, or
contrary to the public interest. 5 U.S.C. 553(b)(B). As part of the
government's pandemic response, USDA began the Farmers to Families Food
Box Program as an emergency relief effort to respond to severe market
disruptions and increased food insecurity caused by the pandemic. The
program lasted from May 15, 2020, through May 31, 2021, during which
time it distributed dairy products equivalent to more than 2.5 billion
pounds of milk to those in need. The end of the Food Box program means
there is an unmet demand for dairy products in feeding organizations
previously met by government purchases through the Food Box Program.
The DDP is designed to encourage the donation of dairy products to meet
that demand through private partnerships between EDOs and Eligible
Distributors. Due to the recent end of the Food Box program, there is
an immediate need to implement the DDP so that donations can begin and
meet that demand.
In addition, Section 762 of the statute provides for emergencies or
disaster declarations to be considered as a substantial factor in
donation Plan submissions. As the 2021 hurricane and wildfire season
has already begun, the DDP could facilitate donations in the possible
event of upcoming emergencies or natural disasters that could create an
immediate need to provide food assistance to impacted individuals and
families.
Additionally, Congress mandated that the Secretary establish and
administer the DDP no later than 60 days after enactment of the CAA. In
light of this mandated time frame and the importance of distributing
donated dairy products as quickly as possible to individuals and
families, the normal rulemaking process would be impracticable
unnecessary, and contrary to the public interest. Therefore, AMS finds
there is good cause to forgo the
[[Page 48894]]
notice-and-comment requirements in the APA for this rulemaking.
As a rule relating to a benefit, the APA requirement that
regulations be published at least 30 days before the effective date
does not apply. Additionally, this requirement also does not apply when
an agency finds good cause not to delay the effective date. See 5
U.S.C. 553(d)(3). The same reasons why there is good cause to dispense
with notice and comment are applicable to AMS's decision to make this
rule effective one day after publication.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act (PRA) of 1995 (44
U.S.C. Chapter 35), AMS has requested approval of new information
collection and recordkeeping requirements for the DDP and comments are
invited on this new information collection. All comments received on
this information collection will be summarized and included in the
final request for Office of Management and Budget (OMB) approval.
Title: Establishment of a Dairy Donation Program.
OMB Number: 0581-NEW.
Expiration Date of Approval: This is a NEW collection.
Type of Request: Approval of New Information Collection.
Abstract: The Consolidated Appropriations Act of 2021 mandated
establishment of a Dairy Donation Program to reimburse EDOs for milk
used to make eligible dairy products donated to non-profit groups for
distribution to recipient individuals and families. Under the program,
EDOs account to a Federal milk marketing order (FMMO) by filling a
report reflecting the eligible dairy products manufactured. Entities
not already filing FMMO report will be required to submit a Report of
Receipts and Utilization. All partnerships must submit a Dairy Donation
and Distribution Plan and Eligible Distributor Certification Form
describing the process the partnership would use to process, transport,
store, and distribute eligible product to an eligible distributor. Once
approved, the EDO can file a Reimbursement Claim Form to receive
reimbursement for the donated eligible dairy products.
Dairy Donation and Distribution Plan
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 1 hour per response.
Respondents: Eligible dairy organizations.
Estimated Number of Respondents: 150.
Estimated Number of Responses: 300.
Estimated Number of Responses per Respondent: 2.
Estimated Total Annual Burden on Respondents: 300 hours.
Eligible Distributor Certification Form
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 15 minutes per response.
Respondents: Eligible distributors.
Estimated Number of Respondents: 300.
Estimated Number of Responses: 300.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 75 minutes.
Reimbursement Claim Form
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 2 hours per response.
Respondents: Eligible dairy organizations.
Estimated Number of Respondents: 150.
Estimated Number of Responses: 1,200.
Estimated Number of Responses per Respondent: 8.
Estimated Total Annual Burden on Respondents: 2,400 hours.
Report of Receipts and Utilization
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 1 hour per response.
Respondents: Eligible dairy organizations.
Estimated Number of Respondents: 15.
Estimated Number of Responses: 90.
Estimated Number of Responses per Respondent: 6.
Estimated Total Annual Burden on Respondents: 90 hours.
Comments: Comments are invited on: (1) Whether the proposed
collection of the information is necessary for the proper performance
of the functions of the agency, including whether the information will
have practical utility; (2) the accuracy of the agency's estimate of
the burden of the proposed collection of information; (3) ways to
enhance the quality, utility and clarity of the information to be
collected; and (4) ways to minimize the burden of the collection of
information on those who are to respond, including through the use of
appropriate automated, electronic, mechanical, or other technological
collection techniques or other forms of information technology.
AMS estimates 150 respondents will form a total of 300
partnerships. Each participating partnership will be required to submit
a Dairy Donation and Reimbursement Plan and Eligible Distributor
Certification Form once, there will not be an annual renewal
requirement. AMS estimates 1 hour to complete a Dairy Donation and
Distribution Plan. Accompanying the Plan, the eligible distributor will
be required to submit and sign an Eligible Distributor Certification
Form, which AMS anticipates will take 15 minutes.
AMS estimates ten percent of the 150 EDO participants do not
already account to a FMMO by filing a report. Therefore, approximately
15 respondents will need to account to a FMMO by filing a Report of
Receipts and Utilization Form. All other EDOs will have already
accounted to a Federal Order through their normal report filing through
its existing association with a Federal milk marketing order. AMS
estimates 1 hour to complete the form. Filing of this form will not
cause an EDO to become regulated by a Federal milk marketing order.
Reimbursement Claim Forms can be submitted any time after Plan
approval and will be processed on a quarterly basis. AMS estimated that
to capture efficiencies respondents will submit Reimbursement Claim
Forms no more than once per quarter and it will take 2 hours to
complete the form per quarter. Assuming the reporting burden will be
completed by an administrative assistant employee, at an hourly salary
rate of $21, AMS estimates the following annual reporting costs per
participating partnership: For the first year of participation, the
annualized cost is $196.10 (the Plan, Certification Form, and four
Claim Forms); for the subsequent years of participation, the annualized
cost is $169.60 (four Claim Forms). Entities needing to account to a
Federal Order by filing a Report of Receipts and Utilization Form will
experience an additional annual burden of $127.20 (6 responses per
year). EDOs also are required to maintain books and records, for a
period of 3 years, to be made available to AMS upon request in
conjunction with an audit to verify the donations for which the EDO
received reimbursement were in fact made. These records are part of
normal business records and do not require additional records to be
created. Such records include production records to verify yield
computations and product code dates for donated manufactured products,
or delivery documentation to verify EDO incurred a transportation
expense.
[[Page 48895]]
E-Government Act
USDA is committed to complying with the E-Government Act (44 U.S.C.
3601, et seq.) by promoting 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.
Forms can be found at http://www.ams.usda.gov/ddp and filed through
email at [email protected].
Statutory and Regulatory Authority
Section 762 of the Consolidated Appropriations Act of 2021 mandates
that AMS establish and administer a Dairy Donation Program (7 CFR part
1147). The program is intended to facilitate the timely donation of
eligible dairy products and prevent and minimize food waste.
Executive Orders 12866 and 13563
USDA is issuing this rule in conformance with Executive Orders
12866 and 13563, which direct agencies to assess all costs and benefits
of available regulatory alternatives and, if regulation is necessary,
to select regulatory approaches that maximizes net benefits (including
potential economic, environmental, public health, and safety effects;
distributive impacts; and equity). Executive Order 13563 emphasizes the
importance of quantifying both costs and benefits, reducing costs,
harmonizing rules, and promoting flexibility. AMS has determined this
action, mandated by Congress, meets the requirements set forth in the
Consolidated Appropriations Act of 2021 to facilitate donation of
eligible dairy products and prevent and minimize food waste.
AMS is seeking comments on the economic impacts of this action on
the industry, including availability of information or data that may
demonstrate if and how DDP reimbursements affect the market.
AMS considered alternative methods for allocating available funds
under the program, including whether to allocate reimbursements equally
across all the geographic areas of the United States or to target
specific regions in need of milk donations. Ultimately, AMS determined
that because the program's primary purpose is to reduce waste
associated with the disposition of surplus milk, the industry would be
best served by allowing those with the capacity to process surplus milk
and who are in a position to make donations to apply for the program
without consideration of geographic location.
This rule is not expected to have any quantified cost or benefits,
rather the rule is expected to result in transfers consistent with the
following table:
Table 1--Accounting Statement
----------------------------------------------------------------------------------------------------------------
Primary Discount rate
estimate Year dollar % Period covered
----------------------------------------------------------------------------------------------------------------
Benefits:
Annualized Monetized ($millions/ 0 2021 7 FY 2021-2026.
year).
0 2021 3
Costs:
Annualized Monetized ($millions/ 0 2021 7 FY 2021-2026.
year).
0 2021 3
Transfers--From the Federal
Government to an eligible
partnership:
Annualized Monetized ($millions/ $71.91 2021 7 FY 2021-2026.
year).
68.92 2021 3
----------------------------------------------------------------------------------------------------------------
As the program is voluntary, eligible partnerships are expected to
only participate if they deem it beneficial depending on their
individual circumstances. The transfers will be reimbursements in the
form of Federal payments to program participants to help offset costs
associated with eligible dairy product donations.
In the normal course of transporting, delivering, and processing
milk, a small volume of milk is ``lost'' each month. In the FMMO
system, ``normal losses'' are estimated to be 0.25 percent of the total
participating milk annually. Under certain conditions, an additional
volume of milk cannot make it to market due to extraordinary
circumstances, such as extreme weather, plant capacity issues, and
market disruptions. This volume above ``normal losses'' is identified
as ``excess losses'' in this analysis. According to FMMO statistics,
``excess losses'' averaged 0.12 percent of the annual volume of milk
participating in the FMMO program from 2016 through 2020. In 2020, the
COVID-19 pandemic resulted in higher levels of milk that could not make
it to market, amounting to 0.32 percent of the milk that participated
in the FMMO program. In conducting an economic analysis, AMS assumed
that milk classified as ``excess losses'' could be made into eligible
dairy products and donated under the DDP.
To estimate the volume of excess milk that may be donated under the
program, the 5-year average rate of 0.12 percent was applied to the
projected 2021 U.S. milk production volume. Thus, it is assumed that
approximately 273.2 million pounds of milk would be available for dairy
processors to make into eligible dairy products for donation to
eligible distributors. No data exits from which AMS could estimate how
much bulk commodity product could be available for secondary processors
to purchase and further process into eligible dairy products for
donation to eligible distributors, so that scenario was not considered
in the economic analysis. AMS is seeking public comment on data from
which to estimate how much bulk commodity product could be available
for secondary processors to purchase and further process for donation.
AMS estimated the amounts of butterfat and skim solids in the
forecasted product volumes available for donation. The product mix
included fluid milk, soft products, cheese, butter, and nonfat dry milk
powder volumes, based on the volume of available dairy farmer milk. The
set of products utilizes approximately all the butterfat and skim
solids present in the milk available for donation. In the case of
butter and nonfat dry milk powder, both products can be made from a
given amount of milk. Butter requires a large amount of butterfat,
while powder utilizes very little butterfat but a large amount of the
nonfat solids.
The DDP will reimburse EDOs for eligible dairy product donations
for the input cost paid for the fluid milk or bulk dairy commodity
product, manufacturing cost, and transportation cost. Total
reimbursement must be between the highest FMMO Class I value (Dade
county, Florida) and the
[[Page 48896]]
Class IV value (assumed the lowest classified value). This analysis
projected 2021 class prices based on USDA's March 2021 World Supply and
Demand Estimates (WASDE), using the FMMO price formulas. Under those
assumptions, AMS estimates the program could expend between $52.1
million and $68.7 million annually.
Furthermore, eligible dairy product donations made under the MDRP
are eligible to receive a supplemental reimbursement for donations made
starting on January 1, 2020, onward. Supplemental reimbursement is
calculated at the difference between the DDP and MDRP reimbursement
values. The net value of these retroactive reimbursements is estimated
at $0.5 million, assuming the highest FMMO minimum Class I value at the
time the milk for the donation was purchased.
Total 2021 U.S. milk production was estimated to be 227.3 billion
pounds (WASDE, March 2021). As described above, AMS estimates that
273.2 million pounds (0.12 percent) of excess milk (additional supply)
would be available to be processed and donated through the DDP.
Consequently, AMS does not anticipate this small additional processing
volume will impact milk prices. It is likely there will be instances
where dairy processors already donating dairy products to non-profit
feeding organizations become eligible for reimbursement through DDP.
However, those donations are not new production volume to be priced.
That is, they would represent dairy products already processed and
priced accordingly somewhere in the dairy supply chain. Furthermore,
the DDP does not intend to reimburse for the full cost of processing
and delivering donated dairy products but rather encourages excess milk
to be used and not wasted.
This program is expected to have a negligible impact on retail
dairy product sales. Typically, populations that receive dairy products
from non-profit feeding organizations do so when they cannot buy dairy
products at retail outlets. Additionally, the DDP reimbursement rate
does not cover all processing and transportation costs; therefore, it
would not be a financially prudent decision to divert milk from retail
outlets to donations. The following table provides examples of costs
included and excluded from reimbursement under the DDP. This is not an
all-inclusive listing but is intended to demonstrate how dairy product
donations through this program are not expected to be a substitute for
retail dairy product sales.
Table 2--Examples of Costs Included and Excluded
------------------------------------------------------------------------
Cost factor Includes Does NOT Include
------------------------------------------------------------------------
Input....................... Minimum Any
classified price of contractually
milk used in the obligated monies,
donated eligible over the minimum
dairy product. classified value,
due to producers.
Assessments
for promotion and
research programs,
if applicable.
Manufacturing............... Applicable Additional
FMMO manufacturing ingredient costs
make allowance, (i.e., fruit for
representative of fruit-flavored
the following yogurt).
costs:
[cir] Processing Storage and
Labor. inventory costs.
[cir] Utilities..... Costs of
[cir] Non-Labor..... participating in
the mandatory Dairy
Product Mandatory
Reporting Program.
[cir] General and
Administrative.
[cir] Packaging into
a commodity volume.
Transportation.............. Fuel: Vehicle
Shortest hard maintenance.
surface mileage * Vehicle
monthly diesel depreciation.
price * 6.1 miles Licensing
per gallon. and other
administrative
fees.
------------------------------------------------------------------------
In addition, DDP is a voluntary program and reimbursements occur
after donations are made. Donations made through this program will be
done privately without donation volumes being announced in advance.
Therefore, AMS has determined the impact on dairy markets will not be
as significant on the markets when compared to making advanced
announcements on expected donation volume.
Regulatory Flexibility Analysis
Pursuant to the requirements set forth in the Regulatory
Flexibility Act (5 U.S.C. 601-612), AMS has considered the economic
impact of the action on small entities. Accordingly, AMS has prepared
this 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 farms are 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
dairy processors, varies based on the type of dairy product
manufactured. Small dairy processors are defined as having between 750
and 1,250 or fewer employees, depending on the product made.
According to the 2017 USDA National Agricultural Statistics Service
(NASS) Census Report, there were 39,303 farms with milk sales. AMS
estimates that 36,158 farms, or 92 percent, would be considered small
businesses. Dairy farmers of all sizes may benefit from the program as
it will encourage donations of dairy products, which contain milk
purchased from them. DDP is designed to reduce food waste by providing
alternative outlets for milk to be utilized in donated products instead
of being dumped due to oversupply. Often, milk is dumped from smaller
dairy farms that are more costly to service because their pickups may
be less than a full tanker load and/or they may be located farther from
major trucking routes. By providing cost reimbursement for donated
products, the DDP incentivizes processors to pick up and process the
milk into products for donation rather than having it dumped.
AMS estimates that approximately 3,000 plants manufacture dairy
products in the United States, owned by approximately 1,500 entities.
According to AMS calculations, about 10 percent are operated by dairy
farmer cooperatives, while the remaining are independently owned. AMS
believes 1,500 to be the universe of EDOs that could participate in the
DDP. Of this universe of potential EDOs, 90 percent would be considered
small businesses, based on total employee numbers.
Participating in the DDP will not unduly or disproportionately
burden small dairy processing entities. All entities, regardless of
size, can apply for
[[Page 48897]]
the program if they file a report with a Federal milk marketing order
and incur a qualified expense as defined by program provisions. Program
provisions are administered without regard for business size. The
paperwork required to participate asks for information that is part of
normal business records.
The definition of an eligible distributor is a public or private
non-profit feeding organization that distributes or coordinates
distribution of donated eligible dairy products to recipient
individuals and families. Eligible distributors, regardless of size,
can voluntarily participate in the DDP if they form a partnership with
an eligible dairy organization. The information collection burden for
eligible distributors is minimal as they must only compete the Plan
form with the partnering EDO. The voluntary nature of the program
allows any eligible distributor to stop participating if they find the
program causes an undue or disproportionate burden.
AMS has determined establishment of this program will not have a
significant economic impact on small entities. Program provisions will
be applied uniformly to both large and small businesses and are not
expected to burden small entities unduly or disproportionately.
Executive Order 13175
This interim final rule has been reviewed under Executive Order
13175--Consultation and Coordination with Indian Tribal Governments.
Executive Order 13175 requires Federal agencies to consult and
coordinate with tribes on a government-to-government basis on: (1)
Policies that have tribal implication, including regulation,
legislative comments, or proposed legislation; and (2) other policy
statements or actions that have substantial direct effects on one or
more Indian tribes, on the relationship between the Federal Government
and Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
Tribal governments operating non-profit organizations feeding
recipient individuals and families could qualify as eligible
distributors and thus benefit from participation in the DDP. The
regulatory burden from participating would be minimal, estimated at 15
minutes for completing an Eligible Distributor Certification Form.
AMS has assessed the impact of this proposed rule on Indian tribes
and determined that this rule would not have tribal implications that
require consultation under Executive Order 13175. AMS hosts a quarterly
teleconference with tribal leaders where matters of mutual interest
regarding the marketing of agricultural products are discussed.
Information about the DDP will be shared during an upcoming quarterly
call, and tribal leaders will be informed about the interim final rule
and the opportunity to submit comments. AMS will work with the USDA
Office of Tribal Relations to ensure meaningful consultation is
provided as needed with regards to the DDP.
Executive Order 12988
This rule has been reviewed under Executive Order 12988--Civil
Justice Reform. This final rule may have retroactive effect. Dairy
donations made starting January 1, 2020, prior to the effective date of
the rule may be eligible for reimbursement if the eligible
partnership's Donation and Distribution Plan is approved and if the
partnership meets all other program requirements. Dairy donations made
prior to 2020 are not eligible for reimbursement under the program.
There are no administrative procedures that must be exhausted prior to
judicial challenges to the provisions of this rule. The DDP will not
preempt any state or local laws, regulations, or policies, unless they
present an irreconcilable conflict with this rule.
Civil Rights Review
AMS has considered the potential civil rights implications of this
rule on minorities, women, and persons with disabilities to ensure that
no person or group shall be discriminated against on the basis of race,
color, national origin, gender, religion, age, disability, sexual
orientation, marital or family status, political beliefs, parental
status, or protected genetic information. This review included persons
that are employees of the entities who are subject to these
regulations. This interim final rule does not require affected entities
to relocate or alter their operations in ways that could adversely
affect such persons or groups. Further, this rule does not deny any
persons or groups the benefits of the program or subject any persons or
groups to discrimination.
AMS found no evidence this voluntary program and the associated
interim final rule will cause adverse or disproportionate impacts on
minorities, women, and persons with disabilities. AMS's analysis found
no evidence that a potential impact will affect dairy farmers or
processors in any protected groups, or that these impacts will be
different than any participating general population of dairy farmers
and processors.
Executive Order 13132
AMS has examined the effects of provisions in this interim final
rule on the relationship between the Federal Government and the States,
as required by Executive Order 13132 on ``Federalism.'' The DDP will
reimburse EDOs for eligible dairy products donated to eligible
distributors. The DDP will not preempt any State or local laws,
regulations, or policies pertaining to the sale, manufacturing or
distribution of milk or dairy products within States.
List of Subjects
7 CFR Part 1146
Milk, Donations, Reporting and recordkeeping requirements.
7 CFR Part 1147
Dairy, Donations, Food waste, Emergency, Reporting and
recordkeeping requirements.
For reasons set forth in the preamble, AMS is amending 7 CFR
Chapter X as follows:
PART 1146--MILK DONATION REIMBURSEMENT PROGRAM
0
1. The authority for part 1146 continues to read as follows:
Authority: Sec. 1431, Pub. L. 113-79, 128 Stat. 695, as
amended.
0
2. In part 1146, revise all references to ``Milk Donation and
Distribution Plan'' to read ``Dairy Donation and Distribution Plan''.
0
3. Amend Sec. 1146.1 by revising the term ``eligible dairy
organization'' and adding the term ``qualified expense'' in
alphabetical order to read as follows:
Sec. 1146.1 Definitions.
* * * * *
Eligible dairy organization means a dairy farmer, either
individually or as part of a cooperative, or a dairy processor that:
(1) Accounts to a Federal Milk Marketing Order; and
(2) Incurs a qualified expense described in Sec. 1146.1.
* * * * *
Qualified expense means the cost incurred to purchase fresh fluid
milk product or bulk dairy commodity product for processing into
eligible dairy products.
* * * * *
0
4. Revise Sec. 1146.102 to read as follows:
Sec. 1146.102 Dairy donation and distribution plans.
Eligible partnerships must submit a completed Dairy Donation and
[[Page 48898]]
Distribution Plan to AMS in the form and manner established by AMS to
be eligible for program consideration. The completed Dairy Donation and
Distribution Plan must include: (a) The physical location(s) of the
eligible dairy organization's processing plant(s) and the eligible
distributor's distribution site(s);
(b) The entity type and contact information for the eligible dairy
organization;
(c) Banking information and tax identification number for the
eligible dairy organization;
(d) An affirmation signed by the eligible dairy organization
regarding the type(s) of products to be donated and its ability to
process and transport eligible dairy products consistent with the
commodity specifications under Sec. 1146.3; and
(e) An Eligible Distributor Certification Form signed by the
eligible distributor regarding its ability to store and distribute
donated eligible dairy products to recipient individuals and families.
0
5. Revise Sec. 1146.106 to read as follows:
Sec. 1146.106 Reimbursement Claims.
(a) In order for the eligible dairy organization to receive
reimbursement pursuant to Sec. 1146.108, the eligible partnership must
submit a Reimbursement Claim Form and appropriate supporting
documentation to AMS.
(1) Required information. Each Reimbursement Claim Form associated
with an approved Dairy Donation and Distribution Plan must include:
(i) The type and amount of eligible dairy products donated to the
eligible distributor;
(ii) The physical location(s) of the plant(s) that processed the
donated dairy products;
(iii) The date the eligible dairy products were processed;
(iv) The date the eligible dairy products were shipped to the
eligible distributor;
(v) The respective sell-by, best-by, or use-by date(s) for the
donated dairy products; and
(vi) Other information as needed on the Reimbursement Claim Form to
calculate reimbursement.
(2) Appropriate verifying documentation. Each Reimbursement Claim
Form must be accompanied by documents verifying that the donation(s)
reported in the form were made. Such documentation may include, but is
not limited to, copies of processing records, shipping records, bills
of lading, warehouse receipts, distribution records, or other documents
demonstrating the reported amount of eligible dairy products were
processed, donated, and distributed in accordance with the approved
Dairy Donation and Distribution Plan and Eligible Distributor
Certification Form and as reported on the Reimbursement Claim Form.
(3) Deadline for funding. To be considered for reimbursement,
eligible dairy products must be donated from January 1, 2020, until
program funds are expended.
(b) Incomplete reimbursement requests will be returned to the
submitter for revision or completion and resubmission as necessary.
0
6. Add part 1147 to read as follows:
PART 1147--DAIRY DONATION PROGRAM
Subpart A--General Provisions
Sec.
1147.1 Definitions
1147.3 Commodity specifications
Subpart B--Program Participation
Sec.
1147.100 Program eligibility
1147.102 Dairy donation and distribution plans
1147.104 Review and approval
1147.106 Reimbursement claims
1147.108 Reimbursement calculation
1147.109 Supplemental reimbursements
Subpart C--Administrative Provisions
Sec.
1147.200 Program announcement
1147.204 Prohibitions
1147.206 Enforcement
1147.208 Confidentiality
1147.209 Books and records
1147.210 Milk for other programs
1147.212 Expiration of this part
Authority: Sec. 762, Pub. L. 116-260, 134 Stat. 1182.
Subpart A--General Provisions
Sec. 1147.1 Definitions.
AMS means the Agricultural Marketing Service of the United States
Department of Agriculture.
Eligible dairy organization means a dairy farmer, either
individually or as part of a cooperative, or a dairy processor that:
(1) Accounts to a Federal Milk Marketing Order; and
(2) Incurs a qualified expense described in Sec. 1147.1.
Eligible dairy product means a dairy product primarily made from
milk, including fluid milk, produced and processed in the United States
and meeting the specifications referenced in Sec. 1147.3.
Eligible distributor means a public or private non-profit feeding
organization distributing or coordinating distribution of donated
eligible dairy products to recipient individuals and families.
Eligible partnership means a partnership between an eligible dairy
organization and an eligible distributor.
Program means the Dairy Donation Program established in this part.
Qualified expense means the cost incurred to purchase fresh fluid
milk product or bulk dairy commodity product for processing into
eligible dairy products.
Secretary means the Secretary of the United States Department of
Agriculture or a representative authorized to act in the Secretary's
stead.
Sec. 1147.3 Commodity specifications.
Eligible dairy organizations must comply with all applicable
Federal, State, and local laws, executive orders, and rules and
regulations related to its performance under this program. To qualify
under the program eligible dairy products must meet the following
requirements:
(a) Made primarily from cow's (bovine) milk produced in the United
States;
(b) Packaged in consumer-sized packaging;
(c) Meet the applicable provisions for dairy products in the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), as
amended. Grade `A' dairy products shall meet the applicable provisions
of the current edition of the Pasteurized Milk ordinance; and
(d) Have a sell-by, best-by, or use-by date no sooner than 12 days
from the date the eligible dairy product is delivered to the eligible
distributor.
Subpart B--Program Participation
Sec. 1147.100 Program eligibility.
An eligible dairy organization must be a member of an approved
eligible partnership pursuant to Sec. 1147.1 to be eligible to receive
reimbursement related to eligible dairy product donations, subject to
the requirements and limitations specified in Sec. Sec. 1147.102 and
1147.104.
Sec. 1147.102 Dairy donation and distribution plans.
Eligible partnerships must submit a completed Dairy Donation and
Distribution Plan to AMS in the form and manner established by AMS to
be eligible for program consideration. The completed Dairy Donation and
Distribution Plan must include: (a) The physical location(s) of the
eligible dairy organization's processing plant(s) and the eligible
distributor's distribution site(s);
[[Page 48899]]
(b) The entity type and contact information for the eligible dairy
organization;
(c) Banking information and tax identification number for the
eligible dairy organization;
(d) An affirmation signed by the eligible dairy organization
regarding the type(s) of product to be donated and its ability to
process and transport eligible dairy products consistent with the
commodity specifications under Sec. 1147.3; and
(e) An Eligible Distributor Certification Form signed by the
eligible distributor regarding its ability to store and distribute
donated eligible dairy products to recipient individuals and families.
Sec. 1147.104 Review and approval.
(a) Program application and review. Within 15 business days of the
submitted Dairy Donation and Distribution Plan and Eligible Distributor
Certification Form, AMS will review the submitted application and
notify the applicant regarding approval or disapproval for program
participation.
(1) The review will include the following considerations:
(i) The process the eligible partnership will use for donation,
processing, transportation, temporary storage, and distribution of
eligible dairy products;
(ii) The extent to which the Dairy Donation and Distribution Plan
promotes the donation of eligible dairy products and prevents and
minimizes food waste.
(2) AMS will prioritize approval or disapproval of a Plan for which
AMS determines a public health emergency or disaster to be a
substantial factor in its submission.
(b) Plan approval. Subject to the provisions in paragraph (a) of
this section, AMS will determine whether to approve or disapprove Dairy
Donation and Distribution Plans for eligible dairy products donated
from January 1, 2020, until program funds are expended.
Sec. 1147.106 Reimbursement claims.
(a) In order for the eligible dairy organization to receive
reimbursement pursuant to Sec. 1147.108, the eligible partnership must
submit a Reimbursement Claim Form and appropriate supporting
documentation to AMS.
(1) Required information. Each Reimbursement Claim Form associated
with an approved Dairy Donation and Distribution Plan must include:
(i) The type and amount of eligible dairy products donated to the
eligible distributor;
(ii) The physical location(s) of the plant(s) that processed the
donated dairy products;
(iii) The date the eligible dairy products were processed;
(iv) The date the eligible dairy products were shipped to the
eligible distributor;
(v) The respective sell-by, best-by, or use-by date(s) for the
donated dairy products; and
(vi) Other information as needed on the Reimbursement Claim Form to
calculate reimbursement.
(2) Appropriate verifying documentation. Each Reimbursement Claim
Form must be accompanied by documents verifying that the donation(s)
reported in the form were made. Such documentation may include, but is
not limited to, copies of processing records, shipping records, bills
of lading, warehouse receipts, distribution records, or other documents
demonstrating the reported amount of eligible dairy products were
processed, donated, and distributed in accordance with the approved
Dairy Donation and Distribution Plan and Eligible Distributor
Certification Form and as reported on the Reimbursement Claim Form.
(3) Eligibility period. To be considered for reimbursement,
eligible dairy products must have been donated on or after January 1,
2020, until program funds are expended.
(b) Incomplete reimbursement requests will be returned to the
submitter for revision or completion and resubmission as necessary.
Sec. 1147.108 Reimbursement calculation.
(a) For each eligible dairy product donated by an eligible dairy
organization with an approved Dairy Donation and Distribution Plan, the
amount of reimbursement under Sec. 1147.106 for the donated eligible
dairy product shall be the sum of the values of the input cost, the
manufacturing cost, and the transportation cost.
(1) The input cost shall be the monthly Federal Milk Marketing
Order minimum classified value pursuant to 7 CFR 1000.50 of the fresh
fluid milk product (raw milk, skim milk, cream, or concentrate fluid
product) or fluid milk equivalent of the bulk dairy commodity product
used to make the donated eligible dairy product pursuant to 7 CFR
1000.40 for the month of processing.
(2) The manufacturing cost shall be the manufacturing allowance, on
a hundredweight basis, pursuant to 7 CFR 1000.50 for the milk used to
produce the donated eligible dairy product pursuant to 7 CFR 1000.40 --
(i) If a Class I product, the Class IV manufacturing allowance
applies;
(ii) If a Class II product, the Class IV manufacturing allowance
applies;
(iii) If a Class III product, the Class III manufacturing
allowances applies; or
(iv) If a Class IV product, the Class IV manufacturing allowances
applies.
(3) The transportation cost shall be determined by the following:
(i) The published average U.S. Energy Information Administration
average U.S. diesel fuel price for the month the donation was made;
(ii) The shortest hard-surface distance, in miles, from the plant
processing the donated eligible dairy product to the eligible
distributor; and
(iii) The fuel economy rate of 5.5 miles per gallon.
(b) Reimbursement, on a per hundredweight basis, made pursuant to
paragraph (a) of this section may not exceed the Class I price pursuant
to 7 CFR 1000.50, 1000.52, and 1006.51 for Dade County, Florida.
Sec. 1147.109 Supplemental reimbursements.
(a) The Secretary shall make a supplemental reimbursement to an
eligible dairy organization reimbursed under the Milk Donation
Reimbursement Program (7 CFR 1146.108) during the period beginning on
January 1, 2020, and ending on the date on which funds under Sec.
1147.202 are no longer available.
(b) A supplemental reimbursement described in paragraph (a) shall
be the difference between:
(1) The reimbursement for eligible dairy products calculated under
Sec. 1147.108, and
(2) The reimbursement for eligible milk under the Milk Donation
Reimbursement Program (7 CFR 1146.108).
Subpart C--Administrative Provisions
Sec. 1147.200 Program announcement.
(a) AMS will announce the opportunity to participate in the Dairy
Donation Program on the AMS website. The announcement will specify the
manner and form in which program applications should be submitted. AMS
will periodically announce on its website a report describing the
donation activity under this program.
(b) There is no deadline for eligible parties to submit a Dairy
Donation and Distribution Plan. AMS will accept and consider Plans on a
continuing basis.
Sec. 1147.204 Prohibitions.
(a) Prohibition in general. An eligible distributor receiving
eligible dairy products donated under the Dairy
[[Page 48900]]
Donation Program may not sell the donated dairy products back into
commercial markets.
(b) Prohibition on marketing or promotional event. Dairy products
donated in conjunction with a marketing or promotional event are
prohibited from reimbursement.
(c) Prohibition on profit-making. An eligible dairy organization
cannot make a profit from reimbursements received from the Dairy
Donation Program.
(d) Prohibition on future participation. An eligible partnership
that AMS determines has violated the prohibition in paragraph (a), (b),
or (c) shall not be eligible for any future participation in the Dairy
Donation Program.
Sec. 1147.206 Enforcement.
Where applicable, AMS will verify an eligible dairy organization's
payment of the input cost. AMS will also conduct spot checks, reviews,
and audits of the reports and documentation submitted pursuant to Sec.
1147.106(a) to verify accuracy and to ensure the integrity of the Dairy
Donation Program.
Sec. 1147.208 Confidentiality.
AMS will only collect information deemed necessary to administer
the Dairy Donation Program and will use the information only for that
purpose. AMS will keep all proprietary business information collected
under the program confidential.
Sec. 1147.209 Books and records.
Each eligible dairy organization shall maintain and retain records
of its operations and make such records and its facilities available to
AMS as necessary to ensure the integrity of the Dairy Donation Program.
(a) Records to be maintained and made available. Each eligible
dairy organization must maintain and make available records of its
operations (including, but not limited to, records of donations,
processing, packaging, and disposition of donated eligible dairy
products) that are necessary to verify whether it met program
requirements.
(b) Retention of records. All records required under the paragraph
(a) shall be retained by the eligible dairy organization for a period
of 3 years to begin at the end of the month to which such records
pertain.
Sec. 1147.210 Milk for other programs.
Eligible dairy products sold or donated under other commodity or
food assistance programs administered by the United States Department
of Agriculture, except as pursuant to 7 CFR 1146, is not eligible for
reimbursement under the Dairy Donation Program in this part.
Sec. 1147.212 Expiration of this part.
This part expires September 1, 2023, unless extended by
notification in the Federal Register.
Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2021-18606 Filed 8-31-21; 8:45 am]
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