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[Federal Register Volume 76, Number 168 (Tuesday, August 30, 2011)]
[Proposed Rules]
[Pages 53844-53847]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22154]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1150

[Document No. AMS-DA-11-0007; DA-11-02]

National Dairy Promotion and Research Program; Invitation To 
Submit Comments on Proposed Amendments to the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This document invites comments on a proposed amendment to the 
Dairy Promotion and Research Order (Dairy Order). The proposal would 
modify the number of National Dairy Promotion and Research Board (Dairy 
Board) members in eight regions, merge Region 8 and Region 10, merge 
Region 12 and Region 13, and apportion Idaho as a separate region. The 
total number of domestic Dairy Board members would remain the same at 
36 and the total number of regions would be reduced from 13 to 12. This 
modification was requested by the Dairy Board, which administers the 
Dairy Order, to better reflect the geographic distribution of milk 
production in the United States.

DATES: Comments must be submitted on or before September 14, 2011.

ADDRESSES: Comments on this proposed rule should be identified with the 
docket number AMS-DA-11-0007; DA-11-02. Commenters should identify the 
date and page number of the issue of the Proposed Rule. Interested 
persons may comment on this proposed rule using either of the following 
procedures:
     Mail: Comments may be submitted by mail to Whitney A. 
Rick, Chief, Promotion and Research Branch, Dairy Programs, AMS, USDA, 
1400 Independence Ave., SW., Room 2958-S, Stop 0233, Washington, DC 
20250-0233.
     Fax: Comments may be faxed to (202) 720-0285.
     E-mail: Comments may be e-mailed to 
Whitney.Rick@ams.usda.gov.
     Internet: http://www.regulations.gov.
    All comments to this proposed rule, submitted by the above 
procedures will

[[Page 53845]]

be available for viewing at: http://www.regulations.gov, or at USDA, 
AMS, Dairy Programs, Promotion and Research Branch, Room 2958-S, 1400 
Independence Ave., SW., Washington, DC, from 9 a.m. to 4 p.m., Monday 
through Friday, (except on official Federal holidays). Persons wanting 
to view comments in Room 2958-S are requested to make an appointment in 
advance by calling (202) 720-6909.

FOR FURTHER INFORMATION CONTACT: Whitney A. Rick, Chief, Promotion and 
Research Branch, Dairy Programs, AMS, USDA, 1400 Independence Ave., 
SW., Room 2958-S, Stop 0233, Washington, DC 20250-0233. Phone: (202) 
720-6909. E-mail: Whitney.Rick@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This proposed rule is issued pursuant to the 
Dairy Production Stabilization Act (Dairy Act) of 1983 [7 U.S.C. 4501-
4514], as amended.

Executive Order 12866

    The Office of Management and Budget has waived the review process 
required by Executive Order 12866 for this action.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This proposed rule is not intended to have a 
retroactive effect. If adopted, nothing in this rule would preempt or 
supersede any other program relating to dairy product promotion 
organized and operated under the laws of the United States or any 
State.
    The Dairy Act provides that administrative proceedings must be 
exhausted before parties may file suit in court. Under section 4509 of 
the Dairy Act, any person subject to the Dairy Order may file with the 
Secretary a petition stating that the Dairy Order, any provision of the 
Dairy Order, or any obligation imposed in connection with the Dairy 
Order is not in accordance with the law and request a modification of 
the Dairy Order or to be exempted from the Dairy Order. Such person is 
afforded the opportunity for a hearing on the petition. After a 
hearing, the Secretary would rule on the petition. The Dairy Act 
provides that the district court of the United States in any district 
in which the person is an inhabitant or has his principal place of 
business, has jurisdiction to review the Secretary's ruling on the 
petition, provided a complaint is filed not later than 20 days after 
the date of the entry of the ruling.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the Agricultural Marketing Service has considered the economic 
impact of this action on small entities and has certified that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities. The purpose of the Regulatory 
Flexibility Act is to fit regulatory actions to the scale of businesses 
subject to such actions so that small businesses will not be 
disproportionately burdened.
    The Dairy Production Stabilization Act of 1983 authorizes a 
national program for dairy product promotion, research and nutrition 
education. Congress found that it is in the public interest to 
authorize the establishment of an orderly procedure for financing 
(through assessments on all milk produced in the United States for 
commercial use and on imported dairy products) and carrying out a 
coordinated program of promotion designed to strengthen the dairy 
industry's position in the marketplace and to maintain and expand 
domestic and foreign markets and uses for fluid milk and dairy 
products.
    The Small Business Administration [13 CFR 121.201] defines small 
dairy producers as those having annual receipts of not more than 
$750,000 annually. Most of the producers subject to the provisions of 
the Dairy Order are considered small entities.
    The proposed rule would amend the Dairy Order by modifying the 
number of National Dairy Promotion and Research Board (Dairy Board) 
members in eight regions, merge Region 8 and Region 10, merge Region 12 
and Region 13, and apportion Idaho as a separate region. The total 
number of domestic Dairy Board members would remain the same at 36 and 
the total number of regions would be reduced from 13 to 12. This 
modification was requested by the Dairy Board, which administers the 
Dairy Order, to better reflect the geographic distribution of milk 
production in the United States.
    The Dairy Order is administered by a 38-member Dairy Board, 36 
members representing 13 geographic regions within the United States and 
2 representing importers. The Dairy Order provides in section 1150.131 
that the Dairy Board shall review the geographic distribution of milk 
production throughout the United States and, if warranted, shall 
recommend to the Secretary a reapportionment of the regions and/or 
modification of the number of members from the regions in order to 
better reflect the geographic distribution of milk production volume in 
the United States. The Dairy Board is required to conduct the review at 
least every 5 years and not more than every 3 years. The Dairy Board 
was last modified in 2008 based on 2007 milk production.
    Based on a review of the 2010 geographic distribution of milk 
production, the Dairy Board has concluded that the number of Dairy 
Board members for eight regions should be changed. Additionally, the 
Dairy Board proposes to merge Region 8 and Region 10, merge Region 12 
and Region 13, and apportion Idaho as a separate region. The Dairy 
Board was last modified in 2008 based on 2007 milk production.
    The proposed amendment should not have a significant economic 
impact on persons subject to the Dairy Order. The proposed changes 
merely would allow representation of the Dairy Board to better reflect 
geographic milk production in the United States.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR part 1320] which implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. chapter 35], the information collection 
requirements and record keeping provisions imposed by the Dairy Order 
have been previously approved by OMB and assigned OMB Control No. 0581-
0093. No relevant Federal rules have been identified that duplicate, 
overlap, or conflict with this rule.

Statement of Consideration

    The Dairy Order is administered by a 38-member Dairy Board, 36 
members representing 13 geographic regions within the United States and 
2 representing importers. The Dairy Order provides in section 1150.131 
that the Dairy Board shall review the geographic distribution of milk 
production volume throughout the United States and, if warranted, shall 
recommend to the Secretary a reapportionment of regions and/or 
modification of the number of producer members from regions in order to 
best reflect the geographic distribution of milk production in the 
United States. The Dairy Board is required to conduct the review at 
least every 5 years and not more than every 3 years. The Dairy Board 
was last modified in 2008 based on 2007 milk production.
    Since the Dairy Board's last reapportionment, the Dairy Order was 
amended by a final rule [76 FR 14777, March 18, 2011] to implement an 
assessment on imported dairy products to fund promotion and research 
and to add importer representation, initially two members, to the Dairy 
Board. Additionally, the final rule amended the term ``United States'' 
in the Dairy Order

[[Page 53846]]

to mean all States, the District of Columbia, and the Commonwealth of 
Puerto Rico. Assessments on producers in these areas were effective 
April 1, 2011. These amendments to the Dairy Order were implemented 
pursuant to the Farm Security and Rural Investment Act of 2008 (2008 
Farm Bill) (Pub. L. 110-246).
    In order to complement the current geographical makeup of the 
existing regions of the Dairy Board, the final rule added these four 
new jurisdictions to the region of closest proximity. Alaska was added 
to Region 1, currently comprised of Oregon and Washington; Hawaii was 
added to Region 2, currently California; and the District of Columbia 
and the Commonwealth of Puerto Rico were added to Region 10, currently 
comprised of Florida, Georgia, North Carolina, South Carolina and 
Virginia. These regional modifications were effective March 18, 2011, 
and are reflected in this proposed rule.
    The final rule also modified the language in section 1150.131 of 
the Dairy Order to remove the specific formula for calculating the 
factor of pounds of milk per member, which divided total pounds of milk 
produced by 36, as the Dairy Board is now comprised of 38 members (36 
domestic producers and 2 importer representatives). While the Dairy 
Order no longer specifies the procedure for calculating the factor of 
pounds of milk per member, for the purposes of the current 
reapportionment analysis, the procedure will remain the same.
    The final rule also added new language that requires the Secretary 
to review the average volume of imports of dairy products into the 
United States and, if warranted, reapportion the importer 
representation on the Dairy Board to reflect the proportional shares of 
the United States market served by domestic production and imported 
dairy products. This review will take place at least once every 3 
years, after the initial appointment of importer representatives on the 
Dairy Board.
    The last reapportionment, conducted in 2008, was calculated by 
using 2007 milk production data and dividing by 36 to determine a 
factor of pounds of milk represented by each domestic Dairy Board 
member. The resulting factor was then divided into the pounds of milk 
produced in each region to determine the number of Dairy Board members 
for each region. Accordingly, the same process using 2010 milk 
production data was employed for the current reapportionment 
calculations. Table 1 summarizes by region the volume of milk 
production distribution for 2010, the percentage of total milk 
production and the current number of Dairy Board seats per region.

                               Table 1--Current Regions and Number of Board Seats
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                                                                                 Percentage of
                 Current regions and states                  Milk  production     total milk     Current  number
                                                                (mil. lbs.)       production     of  board seats
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1. Alaska, Oregon, Washington..............................           8,307.1               4.3                1
2. California, Hawaii......................................          40,410.3              21.0                8
3. Arizona, Colorado, Idaho, Montana, Nevada, Utah, Wyoming          22,592.4              11.6                4
4. Arkansas, Kansas, New Mexico, Oklahoma, Texas...........          20,321                10.4                4
5. Minnesota, North Dakota, South Dakota...................          11,370                 5.8                2
6. Wisconsin...............................................          26,035                13.5                5
7. Illinois, Iowa, Missouri, Nebraska......................           8,867                 4.6                2
8. Alabama, Kentucky, Louisiana, Mississippi, Tennessee....           2,624                 1.4                1
9. Indiana, Michigan, Ohio, West Virginia..................          17,188                 8.9                3
10. District of Columbia, Florida, Georgia, North Carolina,           7,039                 3.6                1
 Puerto Rico, South Carolina, Virginia.....................
11. Delaware, Maryland, New Jersey, Pennsylvania...........          11,965                 6.2                2
12. New York...............................................          12,713                 6.6                2
13. Connecticut, Maine, Massachusetts, New Hampshire, Rhode           4,036.5               2.1                1
 Island, Vermont...........................................
                                                            ----------------------------------------------------
    Total..................................................         193,468.3             100                 36
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* Milk Production, Disposition, and Income, 2010 Summary, NASS, 2011.
** Puerto Rico--Various Agricultural Statistics, 2010 Summary, NASS, 2011.

    In 2010, total milk production was 193,468 million pounds and each 
of the Dairy Board members would represent 5,374 million pounds of 
milk. For 2007, total milk production was 185,558 million pounds of 
milk and each of the Dairy Board members represented 5,154 million 
pounds of milk.
    Based on the 2010 milk production data, the Dairy Board proposes 
that member representation in Region 1 (Alaska, Oregon, and Washington) 
be increased by one member. Milk production in Region 1 increased to 
8,307 million pounds in 2010, up from 7,764 million pounds in 2007, 
indicating two Dairy Board members (8,307 divided by 5,374 = 1.545) 
compared to one Dairy Board member based on 2007 milk production data.
    Milk production in Region 2 (California and Hawaii) decreased from 
40,683 million pounds in 2007 to 40,410 million pounds in 2010. The 
Dairy Board proposes that seven Dairy Board members (40,410 divided by 
5,374 = 7.519) represent Region 2, compared to eight Dairy Board 
members based on 2007 milk production data.
    Milk production in Region 3 (Arizona, Colorado, Idaho, Montana, 
Nevada, Utah, and Wyoming) increased from 21,212 million pounds in 2007 
to 22,592 million pounds in 2010. Specifically, in Idaho, milk 
production increased from 10,905 million pounds in 2007 to 12,779 
pounds in 2010 and represents more than half of the production of 
Region 3. Due to the increase in Idaho production, the Dairy Board 
proposes apportioning Idaho as its own region with two Dairy Board 
members.
    Milk production in Region 8 (Alabama, Kentucky, Louisiana, 
Mississippi, and Tennessee) decreased from 3,119 million pounds in 2007 
to 2,624 million pounds in 2010. The Dairy Board concluded that Region 
8 no longer supports one Dairy Board member (2,624 divided by 5,374 = 
0.488) and proposes to merge Region 8 into Region 10 (District of 
Columbia, Florida, Georgia, North Carolina, Puerto Rico, South 
Carolina, and Virginia) to create a new region with two Dairy Board 
members.
    Similarly, milk production in Region 13 (Connecticut, Maine, 
Massachusetts,

[[Page 53847]]

New Hampshire, Rhode Island, and Vermont) decreased from 4,046 million 
pounds in 2007 to 4,036 million pounds in 2010. The Dairy Board 
concluded that Region 13 no longer supports one Dairy Board member 
(4,036 divided by 5,374 = 0.751) and proposes to merge Region 13 into 
Region 12 (New York), creating a new region with three Dairy Board 
members.
    Table 2 summarizes by region, the volume of milk production 
distribution for 2010, the percentage of total milk production and the 
proposed regions and States and proposed Dairy Board members.

                               Table 2--Proposed Regions and Number of Board Seats
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                                                                                 Percentage of       Proposed
                Proposed regions and states                  Milk  production     total milk        number of
                                                                (mil. lbs.)       production       board seats
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1. Alaska, Oregon, Washington..............................           8,307.1               4.3                2
2. California, Hawaii......................................          40,410.3              21.0                7
3. Arizona, Colorado, Montana, Nevada, Utah, Wyoming.......           9,813.4               5.0                2
4. Arkansas, Kansas, New Mexico, Oklahoma, Texas...........          20,321                10.4                4
5. Minnesota, North Dakota, South Dakota...................          11,370                 5.8                2
6. Wisconsin...............................................          26,035                13.5                5
7. Illinois, Iowa, Missouri, Nebraska......................           8,867                 4.6                2
8. Idaho...................................................          12,779                 6.6                2
9. Indiana, Michigan, Ohio, West Virginia..................          17,188                 8.9                3
10. Alabama, District of Columbia, Florida, Georgia,                  9,663                 5.0                2
 Kentucky, Louisiana, Mississippi, North Carolina, Puerto
 Rico, South Carolina, Tennessee, Virginia.................
11. Delaware, Maryland, New Jersey, Pennsylvania...........          11,965                 6.2                2
12. Connecticut, Maine, Massachusetts, New Hampshire, New            16,749.5               8.7                3
 York, Rhode Island, Vermont...............................
                                                            ----------------------------------------------------
    Total..................................................         193,468.3             100                 36
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* Milk Production, Disposition, and Income, 2010 Summary, NASS, 2011.
** Puerto Rico--Various Agricultural Statistics, 2010 Summary, NASS, 2011.

    A 15-day comment period is provided for interested persons to 
comment on this proposed rule. Twelve terms of existing Dairy Board 
members will expire on October 31, 2011. Thus a 15-day comment period 
is provided to provide for a timely appointment of new Dairy Board 
members based on the current geographic distribution of milk production 
in the United States.

List of Subjects in 7 CFR Part 1150

    Dairy products, Milk, Promotion, Research.

    For the reasons set forth in the preamble, it is proposed that 7 
CFR part 1150 be amended as follows:

PART 1150--DAIRY PROMOTION PROGRAM

    1. The authority citation for 7 CFR part 1150 continues to read as 
follows:

    Authority: 7 U.S.C. 4501-4514 and 7 U.S.C. 7401.

    2. In Sec.  1150.131, paragraph (b) is amended by revising 
paragraphs (b) introductory text, (b)(1), (b)(2), (b)(3), (b)(8), 
(b)(10), (b)(12), and removing paragraph (b)(13) to read as follows:

Sec.  1150.131  Establishment and membership.

    (a) * * *
    (b) Thirty-six members of the Board shall be United States 
producers. For purposes of nominating producers to the Board, the 
United States shall be divided into twelve geographic regions and the 
number of Board members from each region shall be as follows:
    (1) Two members from region number one comprised of the following 
States: Alaska, Oregon and Washington.
    (2) Seven members from region number two comprised of the following 
States: California and Hawaii.
    (3) Two members from region number three comprised of the following 
States: Arizona, Colorado, Montana, Nevada, Utah and Wyoming.
* * * * *
    (8) Two members from region number eight comprised of the following 
State: Idaho.
* * * * *
    (10) Two members from region number 10 comprised of the following 
States: Alabama, District of Columbia, Florida, Georgia, Kentucky, 
Louisiana, Mississippi, North Carolina, Commonwealth of Puerto Rico, 
South Carolina, Tennessee and Virginia.
* * * * *
    (12) Three members from region number 12 comprised of the following 
States: Connecticut, Maine, Massachusetts, New Hampshire, New York, 
Rhode Island and Vermont.

    Dated: August 22, 2011.
David Shipman,
Acting Administrator.
[FR Doc. 2011-22154 Filed 8-29-11; 8:45 am]
BILLING CODE 3410-02-P; 3410-20-P
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