Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Proposed Rules 67489 

5First and last section of order. 

6Name of order. 

7Appropriate Part number. 

8Next consecutive section number. 

9Appropriate representative period for the order. 

b. Revising paragraph (m); 

c. Revising paragraph (n)(2); 

d. Revising paragraph (n)(3)(i); and 

e. Revising paragraph (o). 

The revisions read as follows: 

Section 1000.50 Class Prices, 

Component Prices, and Advanced 

Pricing Factors. 

* * * * * 

(l) Butterfat price. The butterfat price 

per pound, rounded to the nearest onehundredth cent, shall be the U.S. 

average NASS AA Butter survey price 

reported by the Department for the 

month, less 12.02 cents, with the result 

multiplied by 1.20. 

(m) Nonfat solids price. The nonfat 

solids price per pound, rounded to the 

nearest one-hundredth cent, shall be the 

U.S. average NASS nonfat dry milk 

survey price reported by the Department 

for the month, less 15.70 and 

multiplying the result by 0.99. 

(n) * * * 

(1) * * * 

(2) Subtract 16.82 cents from the price 

computed pursuant to paragraph (n)(1) 

of this section and multiply the result 

by 1.383; 

(3) * * * 

(i) Subtract 16.82 cents from the price 

computed pursuant to paragraph (n)(1) 

of this section and multiply the result 

by 1.572; and 

* * * 

(o) Other solids price. The other solids 

price per pound, rounded to the nearest 

one-hundredth cent, shall be the U.S. 

average NASS dry whey survey price 

reported by the Department for the 

month minus 19.56 cents, with the 

result multiplied by 1.03. 

* * * 

(q) * * * 

(3) An advanced butterfat price per 

pound, rounded to the nearest onehundredth cent, shall be calculated by 

computing a weighted average of the 2 

most recent U.S. average NASS AA 

Butter survey prices announced before 

the 24th day of the month, subtracting 

12.02 cents from this average, and 

multiplying the result by 1.20. 

Marketing Agreement Regulating the 

Handling of Milk in Certain Marketing 

Areas 

The parties hereto, in order to 

effectuate the declared policy of the Act, 

and in accordance with the rules of 

practice and procedure effective 

thereunder (7 CFR part 900), desire to 

enter into this marketing agreement and 

do hereby agree that the provisions 

referred to in paragraph I hereof, as 

augmented by the provisions specified 

in paragraph II hereof, shall be and are 

the provisions of this marketing 

agreement as if set out in full herein. 

I. The findings and determinations, 

order relative to handling, and the 

provisions of § lll to lll5 all 

inclusive, of the order regulating the 

handling of milk in the llll6

marketing area (7 CFR Part lll7) 

which is annexed hereto; and 

II. The following provisions: 

§ llll8 Record of milk handled and 

authorization to correct typographical 

errors. 

(a) Record of milk handled. The 

undersigned certifies that he/she 

handled during the month of llll9, 

llll hundredweight of milk 

covered by this marketing agreement. 

(b) Authorization to correct 

typographical errors. The undersigned 

hereby authorizes the Deputy 

Administrator, or Acting Deputy 

Administrator, Dairy Programs, 

Agricultural Marketing Service, to 

correct any typographical errors which 

may have been made in this marketing 

agreement. 

Effective date. This marketing 

agreement shall become effective upon 

the execution of a counterpart hereof by 

the Department in accordance with Sec. 

900.14(a) of the aforesaid rules of 

practice and procedure. 

In Witness Whereof, The contracting 

handlers, acting under the provisions of 

the Act, for the purposes and subject to 

the limitations herein contained and not 

otherwise, have hereunto set their 

respective hands and seals. 

Signature 

By (Name) lllllllllllll

(Title) lllllllllllllll

(Address) lllllllllllll

(Seal) 

Attest lllllllllllllll

[FR Doc. 06–9340 Filed 11–20–06; 3:01 pm] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Parts 1000, 1001, 1005, 1006, 

1007, 1030, 1032, 1033, 1124, 1126, and 

1131 

[Docket No. AO–14–A76, et al.; DA–07–01] 

Milk in the Northeast and Other 

Marketing Areas; Notice of Hearing on 

Proposed Amendments to Tentative 

Marketing Agreements and Orders 

7 

CFR 

part 

Marketing area AO Nos. 

1001 Northeast ................... AO–14–A76 

1005 Appalachian ............... AO–388–A20 

1006 Florida ....................... AO–356–A41 

1007 Southeast .................. AO–366–A49 

1030 Upper Midwest .......... AO–361–A42 

1032 Central ....................... AO–313–A51 

1033 Mideast ...................... AO–166–A75 

1124 Pacific Northwest ...... AO–368–A37 

1126 Southwest .................. AO–231–A70 

1131 Arizona ...................... AO–271–A42 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule; Notice of public 

hearing on proposed rulemaking. 

SUMMARY: A national public hearing is 

being held to consider and take 

evidence on a proposal seeking to 

amend the Class I and Class II milk price 

formulas applicable to all Federal milk 

marketing orders. Evidence also will be 

taken at the hearing to determine 

whether emergency marketing 

conditions exist that would warrant 

omission of a recommended decision 

under the rules of practice and 

procedure (7 CFR 900.12(d)). 

DATES: The hearing will convene at 1 

p.m., Monday, December 11, 2006. 

ADDRESSES: The hearing will be held at 

the Sheraton Station Square Hotel, 300 

West Station Square Drive, Pittsburgh, 

Pa. 15219. Telephone number: (412) 

261–2000. 

FOR FURTHER INFORMATION CONTACT: 

Gino Tosi, Associate Deputy 

Administrator for Order Formulation 

and Enforcement, USDA/AMS/Dairy 

Programs, Stop 0231–Room 2971, 1400 

Independence Avenue, SW., 

Washington, DC 20250–0231, (202) 720–

2357, e-mail address: 

gino.tosi@usda.gov. 

Persons requiring a sign language 

interpreter or other special 

accommodations should contact David 

Walker, Market Administrator, at (330) 

225–4758; e-mail: 

dwalker@fmmaclev.com before the 

hearing begins. 


jlentini on PROD1PC65 with PROPOSAL
67490 Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Proposed Rules 

SUPPLEMENTARY INFORMATION: This 

administrative action is governed by the 

provisions of Sections 556 and 557 of 

Title 5 of the United States Code and, 

therefore, is excluded from the 

requirements of Executive Order 12866. 

Notice is hereby given of a public 

hearing to be held at the Sheraton 

Station Square Hotel, Pittsburgh, PA, 

beginning at 1 p.m. on Monday, 

December 11, 2006, with respect to 

proposed amendments to the tentative 

marketing agreements and to the orders 

regulating the handling of milk in the 

Northeast and other marketing areas. 

The hearing is called pursuant to the 

provisions of the Agricultural Marketing 

Agreement Act of 1937, as amended (7 

U.S.C. 601–674), and the applicable 

rules of practice and procedure 

governing the formulation of marketing 

agreements and marketing orders (7 CFR 

Part 900). 

The purpose of the hearing is to 

receive evidence with respect to the 

economic and marketing conditions 

which relate to the proposed 

amendments, hereinafter set forth, and 

any appropriate modifications thereof, 

to the tentative marketing agreements 

and to the orders. 

Evidence will be taken at the hearing 

to determine whether emergency 

marketing conditions exist that would 

warrant omission of a recommended 

decision under the rules of practice and 

procedure (7 CFR 900.12(d)) with 

respect to any proposed amendments. 

Also, since the proponent of the 

proposed amendment has requested that 

the hearing be held on an expedited 

basis, under the rules of practice and 

procedure (7 CFR 900.4(a)), it is 

determined that less than 15 days notice 

is reasonable under the circumstances. 

Initial Regulatory Flexibility Analysis 

Actions under the Federal milk order 

program are subject to the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.). 

This Act seeks to ensure that, within the 

statutory authority of a program, the 

regulatory and information collection 

requirements are tailored to the size and 

nature of small businesses. For the 

purpose of the Act, a dairy farm is a 

‘‘small business’’ if it has an annual 

gross revenue of less than $750,000, and 

a dairy products manufacturer is a 

‘‘small business’’ if it has fewer than 500 

employees (13 CFR 121.201). Most 

parties subject to a milk order are 

considered as a small business. 

For the purposes of determining 

which dairy farms are ‘‘small 

businesses,’’ the $750,000 per year 

criterion was used to establish a 

production guideline of 500,000 pounds 

per month. Although this guideline does 

not factor in additional monies that may 

be received by dairy producers, it 

should be an inclusive standard for 

most ‘‘small’’ dairy farmers. For 

purposes of determining a handler’s 

size, if the plant is part of a larger 

company operating multiple plants that 

collectively exceed the 500-employee 

limit, the plant will be considered a 

large business even if the local plant has 

fewer than 500 employees. 

USDA has identified that during 2005 

approximately 51,060 of the 54,652 

dairy producers whose milk is pooled 

on Federal orders are small businesses. 

Small businesses represent about 93 

percent of the dairy farmers who 

participate in the Federal milk order 

program. 

On the processing side, during June 

2005 there were approximately 350 fully 

regulated plants (of which 149 or 43 

percent were small businesses) and 110 

partially regulated plants (of which 50 

or 45 percent were small businesses). In 

addition, there were 48 producerhandlers, of which 29 were considered 

small businesses for the purposes of this 

initial regulatory flexibility analysis, 

who submitted reports under the 

Federal milk order program during this 

period. 

The fluid use of milk represented 

more than 45.0 percent of total Federal 

milk marketing order producer 

deliveries during January 2006. Almost 

237 million Americans, approximately 

80 percent of the total U.S. population 

reside within the geographical 

boundaries of the 10 Federal milk 

marketing areas. 

In order to accomplish the goal of 

imposing no additional regulatory 

burdens on the industry, a review of the 

current reporting requirements was 

completed pursuant to the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.) In light of that review, it was 

determined that these proposed 

amendments would have little or no 

impact on reporting, record keeping, or 

other compliance requirements because 

these requirements would remain 

identical to those currently in effect 

under the Federal order program. No 

new or additional reporting would be 

necessary. 

This notice does not require 

additional information collection that 

requires clearance by the OMB beyond 

the currently approved information 

collection. Information currently 

collected through the use of OMBapproved forms and the primary sources 

of data used to complete the forms are 

routinely used in business transactions. 

The forms require only a minimal 

amount of information that can be 

provided without data processing 

equipment or trained statistical staff. 

Thus, the information collection burden 

is relatively small. Requiring the same 

reports from all handlers does not 

disadvantage any handler that is smaller 

than the industry average. 

No other burdens are expected to fall 

upon the dairy industry as a result of 

overlapping Federal rules. This 

proposed rulemaking does not 

duplicate, overlap, or conflict with any 

existing Federal rules. 

To ensure that small businesses are 

not unduly or disproportionately 

burdened based on these proposed 

amendments, consideration was given 

to mitigating any negative impacts. 

Minimum pricing should not raise 

barriers regarding the ability of small 

handlers, including milk manufacturers 

and processors, to compete in the 

marketplace. It is similarly expected 

that small producers would not 

experience any particular disadvantage 

compared to larger producers as a result 

of the proposed amendments. 

The following economic analysis 

discusses impacts of the proposed 

amendments on market participants, 

including producers and milk 

manufacturers and processors. 

Interested parties are invited to present 

evidence on the probable regulatory and 

information collection impact of the 

hearing proposals on small businesses. 

Also, such parties may suggest 

modifications of the proposal for 

tailoring its applicability to small 

businesses. 

Preliminary Economic Analysis 

In order to assess the impact of 

National Milk Producers Federation 

(NMPF) proposed changes to Federal 

order Class I and II pricing formulas, the 

Department has conducted an economic 

analysis. While the proposed changes 

have effects on Class I and II prices, they 

also have effects on the milk supply, 

product demand, and milk allocation. 

These dynamic effects impact all 

Federal order class prices. 

Scope of Analysis 

Impacts of increasing Class I and II 

price movers were measured as changes 

from the USDA Agricultural Baseline 

Projections to 2015 (OCE–2006–1, 

http://www.usda.gov/oce/commodity/ 

ag_baseline.htm). The baseline 

projections are ‘‘a Departmental 

consensus on a long-run scenario for the 

agricultural sector.’’ Included is a 

national, annual projection of the 

supply-demand-price situation for milk. 

The USDA baseline and the model 

baseline assume: (1) The Milk Price 

Support Program (MPSP) will continue 

unchanged; (2) The Dairy Export 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Proposed Rules 67491 

1 Dairy producers are not eligible to choose 

September 2007 as a month for which MILC 

payments are to be applied. This provision was 

included so that it would not be necessary to 

include MILC payments in the Federal budget for 

fiscal year 2007–08. 

Incentive Program will be utilized to the 

maximum extent allowed beginning in 

the 2006/07 fiscal year; (3) The Milk 

Income Loss Contract (MILC) program 

will continue through September 2007; 1

and (4) The Federal Milk Marketing 

Order Program will continue 

unchanged. This analysis maintains the 

first three assumptions as unchanged. 

The only changes to the Federal Milk 

Marketing Order Program are those that 

are proposed by NMPF. Since the model 

is an annual model, a simplifying 

assumption is made that the proposed 

changes become effective January 1, 

2007. 

Demands for fluid milk and 

manufactured dairy products are 

functions of per capita consumption and 

population. Per capita consumption for 

the major milk and dairy products are 

estimated as functions of own prices, 

substitute prices, and income. Retail 

margins are assumed unchanged from 

the baseline. The demands for fluid 

milk and soft manufactured products 

are satisfied first by the eligible supply 

of milk. The milk supply for 

manufactured hard products is the 

volume of milk marketings remaining 

after satisfying the volumes demanded 

for fluid and soft manufactured 

products. Milk is manufactured into 

cheese, butter or nonfat dry milk 

(NFDM) according to returns to 

manufacturing in each class. Wholesale 

prices for cheese, butter, NFDM and dry 

whey reflect supply and demand for 

these products. These manufactured 

dairy product prices underlie the 

Federal order pricing system. 

Discussion of Effects of NMPF Proposal 

on Federal Order Formulas 

The NMPF proposal effectively would 

increase current Class I and II price 

movers by constant amounts in Federal 

order formulas. The Class I skim milk 

pricing factor would increase by $0.73 

per hundredweight (cwt.). The Class I 

butterfat pricing factor would increase 

by an equivalent $0.0073 per pound. 

While the Class I skim milk and 

butterfat pricing factors would be 

increased by the same amount, the Class 

II skim milk and butterfat pricing factors 

would increase by different amounts. 

The Class II skim pricing factor would 

increase by $0.0074 per cwt., much 

smaller than the proposed Class I skim 

milk pricing factor. The Class II butterfat 

pricing factor would increase by 

$0.0163 per pound, an amount larger 

than the proposed Class I butterfat 

pricing factor increase. 

The proposed increases to Class I and 

II movers have the same effect as 

increasing Class I and II differentials at 

all locations by the effective proposed 

changes. Although NMPF proposes 

butterfat and skim milk prices for Class 

I and II that differ from Class III and IV, 

the differences are by constant amounts. 

Class II prices at 3.5 percent butterfat 

would still change over time in lock 

step with Class IV advanced pricing 

factors as currently used in Federal 

order formulas. Class I prices at 3.5 

percent butterfat would still change over 

time in lock step with the higher of 

Class III or IV advanced pricing factors 

as currently used in Federal order 

formulas. 

Summary of Results for Proposed 

Changes to Class I and II Movers 

Combined 

The impacts of the changes to the 

Class I and Class II formulas that are set 

forth in NMPF’s proposal are 

summarized using annual and nineyear, 2007–2015, average changes from 

the model baseline (Table 1). This 

section discusses the model results of 

increasing both the Class I and Class II 

price movers together. The following 

section discusses the model results of 

proposed changes to Class I and II 

movers analyzed separately. The results 

presented for the Federal order system 

are in the context of the larger U.S. 

market. In particular, the Federal order 

price formulas use national 

manufactured dairy product prices. 

Producers. Over the nine-year period, 

the average Federal order minimum 

blend price for milk at test increases 

$0.11 from a baseline level of $14.71 per 

cwt. The average U.S. all-milk price 

increases by about $0.06 from a baseline 

level of $14.79 per cwt. Federal order 

marketings increase by an average 144 

million pounds annually due to the 

production increase in response to 

higher producer milk prices. Federal 

order milk cash receipts increase by an 

average $167 million annually from 

baseline receipts of $19,165 million. 

U.S. milk marketings increase by an 

average of 227 million pounds annually, 

yielding an average annual producer 

revenue increase of $146 million from 

an average baseline value of $28,396 

million. 

TABLE 1.—MODEL RESULTS FOR NATIONAL MILK PRODUCERS FEDERATION PROPOSED CLASS I AND CLASS II CHANGES

[Nine-year averages, 2007 through 2015] 

Units Baseline 

Class I 

movers 

increase 

Class II 

movers 

increase 

Class I and 

II movers 

increase 1

Changes to Pricing Factors: 

Class I skim .................................................................................. $/cwt .............. .................... 0.7300 — 0.7300 

Class I skim .................................................................................. $/cwt .............. .................... — 0.0074 0.0074 

Class I butterfat ............................................................................ $/pound .......... .................... 0.0073 — 0.0073 

Class II butterfat ........................................................................... $/pound .......... .................... — 0.0163 0.0163 

F.O. Minimum Prices, 3.5% BF: 

Class I .......................................................................................... $/cwt .............. 16.46 0.60 ¥0.02 0.58 

Class II ......................................................................................... $/cwt .............. 12.71 ¥0.13 0.04 ¥0.09 

Class III ........................................................................................ $/cwt .............. 13.75 ¥0.13 ¥0.02 ¥0.15 

Class IV ........................................................................................ $/cwt .............. 12.01 ¥0.13 ¥0.02 ¥0.15 

Blend ............................................................................................ $/cwt .............. 14.37 0.12 0.00 0.12 

Average Class Butterfat Test: 

Class I .......................................................................................... % of milk ........ 2.04 0.00 0.00 0.00 

Class II ......................................................................................... % of milk ........ 8.16 0.00 0.00 0.00 

Class III ........................................................................................ % of milk ........ 3.49 0.00 0.00 0.00 

Class IV ........................................................................................ % of milk ........ 4.37 ¥0.03 0.00 ¥0.03 

F.O. Minimum Prices at Test: 

Class I .......................................................................................... $/cwt .............. 14.10 0.65 ¥0.01 0.64 

Class II ......................................................................................... $/cwt .............. 20.34 ¥0.28 0.09 ¥0.19 


jlentini on PROD1PC65 with PROPOSAL
67492 Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Proposed Rules 

TABLE 1.—MODEL RESULTS FOR NATIONAL MILK PRODUCERS FEDERATION PROPOSED CLASS I AND CLASS II 

CHANGES—Continued 

[Nine-year averages, 2007 through 2015] 

Units Baseline 

Class I 

movers 

increase 

Class II 

movers 

increase 

Class I and 

II movers 

increase 1

Class III ........................................................................................ $/cwt .............. 13.73 ¥0.13 ¥0.02 ¥0.15 

Class IV ........................................................................................ $/cwt .............. 13.42 ¥0.21 ¥0.02 ¥0.23 

Blend ............................................................................................ $/cwt .............. 14.71 0.12 0.00 0.11 

Product Prices: 

Cheddar ........................................................................................ $/pound .......... 1.4594 ¥0.0112 ¥0.0019 ¥0.0131 

Butter ............................................................................................ $/pound .......... 1.5325 ¥0.0275 ¥0.0051 ¥0.0327 

Nonfat dry milk (NFDM) ............................................................... $/pound .......... 0.8444 ¥0.0018 0.0001 ¥0.0017 

Whey ............................................................................................ $/pound .......... 0.2750 ¥0.0015 ¥0.0002 ¥0.0017 

Mozzarella .................................................................................... $/pound .......... 1.7915 ¥0.0071 ¥0.0012 ¥0.0083 

Retail ice cream ........................................................................... $/half gal ........ 3.8555 ¥0.0230 0.0075 ¥0.0156 

CPI, other dairy products ............................................................. index value .... 121.4 ¥0.5 0.1 ¥0.3 

Retail fluid milk 2 ........................................................................... $/gal ............... .................... 0.0560 ¥0.0011 0.0549 

Federal Order Component Prices: 

Protein .......................................................................................... $/pound .......... 2.3797 ¥0.0013 0.0004 ¥0.0009 

Class III and IV butterfat .............................................................. $/pound .......... 1.7010 ¥0.0330 ¥0.0062 ¥0.0392 

Class I butterfat ............................................................................ $/pound .......... 1.7010 ¥0.0257 ¥0.0062 ¥0.0319 

Class II butterfat ........................................................................... $/pound .......... 1.7010 ¥0.0330 0.0101 ¥0.0229 

Other solids .................................................................................. $/pound .......... 0.1195 ¥0.0015 ¥0.0002 ¥0.0018 

Nonfat solids ................................................................................. $/pound .......... 0.6973 ¥0.0018 0.0001 ¥0.0017 

Class I skim price ......................................................................... $/cwt .............. 10.7921 0.7169 0.0000 0.7169 

Class II skim price ........................................................................ $/cwt .............. 6.9758 ¥0.0159 0.0083 ¥0.0076 

Class III skim price ....................................................................... $/cwt .............. 8.0821 ¥0.0131 0.0000 ¥0.0131 

Class IV skim price ...................................................................... $/cwt .............. 6.2758 ¥0.0159 0.0009 ¥0.0150 

Federal Order Class Uses: 

Class I .......................................................................................... mil. pounds .... 45,875 ¥70 1 ¥68 

Class II ......................................................................................... mil. pounds .... 17,489 63 ¥20 43 

Class III ........................................................................................ mil. pounds .... 51,152 30 4 34 

Class IV ........................................................................................ mil. pounds .... 15,694 144 ¥9 135 

Total F.O. Marketings ................................................................... mil. pounds .... 130,211 167 ¥24 144 

Federal Order Cash Receipts: 

Class I .......................................................................................... mil. $ .............. 6,470 288 ¥6 282 

Class II ......................................................................................... mil. $ .............. 3,561 ¥37 12 ¥25 

Class III ........................................................................................ mil. $ .............. 7,026 ¥61 ¥10 ¥71 

Class IV ........................................................................................ mil. $ .............. 2,108 ¥14 ¥4 ¥18 

Total .............................................................................................. mil. $ .............. 19,165 176 ¥8 167 

All Milk Price ........................................................................................ $/cwt .............. 14.79 0.07 ¥0.01 0.06 

U.S. class use: 3

Class I .......................................................................................... mil. pounds .... 55,674 ¥85 2 ¥83 

Class II ......................................................................................... mil. pounds .... 20,455 74 ¥24 50 

Class III ........................................................................................ mil. pounds .... 93,173 55 7 63 

Class IV ........................................................................................ mil. pounds .... 22,911 210 ¥13 197 

Milk Cows ............................................................................................ 1000s ............. 8,890 8 ¥1 7 

Yield per Cow ...................................................................................... pounds ........... 21,668 9 ¥1 8 

U.S. Marketings 4 ................................................................................. mil. pounds .... 191,855 254 ¥27 227 

Government removals of NFDM: 

Quantities ..................................................................................... mil. pounds .... 290 13 ¥1 12 

Outlays 5 ....................................................................................... mil. $ .............. .................... 10 ¥1 10 

U.S. Producer Revenue 6 .................................................................... mil. $ .............. 28,396 158 ¥21 146 

1Separate effects of increasing Class I and II movers do not necessarily add up to the combined effects due to differences in the dynamics 

over time. 2 Retail fluid milk porices are not projected in the model. Projected impacts are calculated by multiplying the Class I price per pound at test by 

8.62 pounds of milk per gallon. 3Total U.S. class use does not add to U.S. Marketings due to the presence of imported ingredients. 

4 U.S. Marketings differs from U.S. milk production due to farm use of milk. 

5 MPSP outlays are not projected in the model. For this table, outlays are computed by multiplying NDM net removal quantities by the NDM 

support price of $0.80. No attempt is made to estimate changes in storage, handling, transportation, processing, and 6 U.S. Producer Revenue includes MILC payments for 2007. 

Milk Manufacturers and Processors. 

Increasing Federal order Class I and II 

movers as proposed has the combined 

effect of increasing Class I prices and 

decreasing prices for the manufacturing 

milk classes. The retail price of fluid 

milk increases by $0.0549 per gallon. 

Since milk is less scarce due to 

increases in milk production, and 

reductions in Class I use, more milk 

moves into manufactured uses. As a 

result dairy product prices decrease to 

clear markets of production increases. 

Over the nine-year projection period, 

wholesale dairy product prices decrease 

as follows: $0.0131 per pound for 

cheddar cheese, $0.0327 for butter, 

$0.0017 for NFDM, $0.0017 for dry 

whey, and $0.0083 for mozzarella. The 

retail price for ice cream decreases by 

$0.0156 per half-gallon. The CPI for 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Proposed Rules 67493 

2Price elasticity of demand is the percentage 

change in consumption corresponding to a 1 

percent change in price. 

other dairy products decreases by a 

value of 0.3. Most Federal order 

component prices decrease on average 

over the nine-year projection period: 

$0.0009 per pound for protein, $0.0017 

for nonfat solids, and $0.0018 for other 

solids. 

The average Class III and IV butterfat 

price decreases by an average $0.0392 

per pound over the nine-year projection 

period. The average Class I butterfat 

price decreases by an average $0.0319. 

The difference between the Class III and 

IV and Class I butterfat prices is 

$0.0073, the effective proposed formula 

change. The Class I butterfat price 

decreases because the proposed increase 

in the Class I butterfat pricing factor is 

not enough to offset the butter price 

decrease. The average Class II butterfat 

price decreases by $0.0229 per pound 

over the nine-year projection period. 

The difference between the Class IV 

butterfat price and the Class II butterfat 

price is $0.0163, the effective proposed 

formula change. The Class II butterfat 

price decreases because the proposed 

increase in the Class II butterfat pricing 

factor is not enough to offset the butter 

price decrease. 

The average Class III and IV skim milk 

prices decrease by an average $0.0131 

and $0.0150 per cwt. respectively over 

the nine-year projection period. The 

average Class I skim milk price 

increases by an average $0.7169. The 

difference between the Class III and 

Class I average skim milk prices is 

$0.7300, the effective proposed formula 

change. The Class I skim milk price 

increases because the proposed formula 

change for the Class I skim milk pricing 

factor more than offsets the price 

decreases in the component prices used 

in pricing Class I and III. The average 

Class II skim milk price decreases by 

$0.0076 per cwt. over the nine-year 

projection period. The difference 

between the Class IV skim price and the 

Class II skim price is $0.0074, the 

effective proposed formula change. The 

Class II skim milk price decreases 

because the proposed formula change 

for the Class II skim milk pricing factor 

is not enough to offset the price 

decreases in the component prices used 

in pricing Class II and IV. 

There are notable differences between 

changes in Federal order class prices at 

3.5 percent butterfat and changes in 

Federal order class prices at class 

butterfat percentages. Butterfat tests for 

the four Federal order milk classes differ 

from one class to another due to the mix 

of products within each class. Butterfat 

proportions are higher for Class II and 

IV milk than for Class I and III milk. 

Differences between prices at test and 

prices at 3.5 percent butterfat are 

greatest for Class II. The lower butterfat 

price plays a greater role in the Class II 

price at test because of the higher 

average fat content of the products in 

the class. While the Class II price at 3.5 

percent butterfat decreases by an 

average $0.09 per cwt., the Class II price 

at test decreases by an average $0.19 per 

cwt. 

Consumers. The expected $0.64 per 

cwt increase in the minimum nine-year 

average Class I price at test results in an 

average $0.0549 per gallon increase in 

the price of fluid milk for consumers. 

Consumers decrease consumption of 

fluid milk products, resulting in a 

decrease of 68 million pounds in 

Federal order Class I marketings. 

Consumers increase consumption of 

manufactured dairy products in 

response to lower dairy product prices. 

The manufacturing Federal order class 

marketings increase as follows: 43 

million pounds for Class II, 34 million 

pounds for Class III, and 135 million 

pounds for Class IV. U.S. class 

marketing increase as follows: 50 

million pounds for Class II, 63 million 

pounds for Class III, and 193 million 

pounds for Class IV. 

Government Outlays. In 2007, with 

higher Class I prices, MILC payments 

decrease by $82 million below the 

baseline level of $190 million. This 

impact rounds to approximately $0.04 

per cwt. averaged over all of the milk 

production. 

With the proposed increases to 

Federal order Class I and II pricing 

factors, milk production increases, dairy 

product prices decrease, and 

government removals increase relative 

to baseline levels. Over the projection 

period, government removals of NFDM 

increase by an annual average of 12 

million pounds per year. Government 

outlays related to government removals 

increase by an average of $10 million 

over the projection period. 

Contrasting Effects of Increasing Class I 

and II Movers 

Effects of increasing Class I price 

movers differ significantly from effects 

of increasing Class II price movers. The 

differences are mainly due to the 

differences in price elasticity of 

demand 2 of fluid milk versus Class II 

products. Model parameters indicate 

that fluid milk has a very inelastic 

demand price elasticity of ¥0.05. Class 

II products are much more price elastic 

with respect to demand. Model 

parameters indicate that frozen Class II 

products and other Class II products 

have demand price elasticities of ¥0.50 

and ¥1.18 respectively. To examine 

these effects, model scenarios were run 

to examine the effects of proposed 

changes to Class I and Class II movers 

separately. 

Effects of Changes to Class I Movers: 

Increasing Class I movers as proposed 

by NMPF results in higher Federal order 

Class I pool receipts of $288 million. 

Federal order Class I producer revenue 

increases because the increase in the 

Class I price at test ($0.65 per cwt.) more 

than offsets the decrease in Class I use 

(70 million pounds) that results from 

the higher price. With the proposed 

increases in Class I movers, the average 

Federal order blend price at test 

increases by $0.12 per cwt., the average 

all-milk price increases by $0.07 per 

cwt., and producer revenues increase by 

$158 million. 

Effects of Changes to Class II Movers: 

With the proposed increases in Class II 

movers, Federal order Class II use 

decreases by 20 million pounds. As 

Class II use decreases, relatively more 

milk is allocated to other products, 

lowering their prices. Product prices 

decrease for cheddar cheese ($0.0019 

per pound), butter ($0.0051 per pound), 

and fluid milk (0.0011 per gallon). Since 

these demands have relatively low price 

elasticities, consumption does not 

increase very much for these products. 

Although Federal order Class II receipts 

increase by $12 million, the increase is 

not enough to offset decreases in cash 

receipts for the other classes, and total 

Federal order class receipts fall by $8 

million. The average reduction in the 

Federal order blend price at test rounds 

to zero. The all-milk price decreases by 

$0.01, and average U.S. producer 

revenue decreases by $21 million. 

Detailed Analysis Information 

A complete Preliminary Economic 

Analysis, NMPF Proposed Changes to 

Class I and II Mover, is available at 

http://www.ams.usda.gov/dairy/ 

hearings.htm. For further information 

contact Howard McDowell, Senior 

Economist, USDA/AMS/Dairy 

Programs, Office of the Chief Economist, 

Room 2753, South Building, U.S. 

Department of Agriculture, Washington, 

DC 20250, (202) 720–7091, e-mail 

address howard.mcdowell@usda.gov. 

Executive Order 12988, Civil Justice 

Reform 

The amendments to the rules 

proposed herein have been reviewed 

under Executive Order 12988, Civil 

Justice Reform. They are not intended to 

have a retroactive effect. If adopted, the 

proposed amendments would not 

preempt any state or local laws, 


jlentini on PROD1PC65 with PROPOSAL
67494 Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Proposed Rules 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

The Agricultural Marketing 

Agreement Act provides that 

administrative proceedings must be 

exhausted before parties may file suit in 

court. Under Section 8c(15)(A) of the 

Act (7 U.S.C. 608c (15)(A)), any handler 

subject to an order may request 

modification or exemption from such 

order by filing with the Department of 

Agriculture (Department) a petition 

stating that the order, any provision of 

the order, or any obligation imposed in 

connection with the order is not in 

accordance with the law. A handler is 

afforded the opportunity for a hearing 

on the petition. After a hearing, the 

Department would rule on the petition. 

The Act provides that the district court 

of the United States in any district in 

which the handler is an inhabitant, or 

has its principal place of business, has 

jurisdiction in equity to review the 

Department’s ruling on the petition, 

provided a bill in equity is filed not 

later than 20 days after the date of the 

entry of the ruling. 

Interested parties who wish to 

introduce exhibits should provide the 

Presiding Officer at the hearing with (6) 

copies of such exhibits for the Official 

Record. Also, it would be helpful if 

additional copies are available for the 

use of other participants at the hearing. 

The proposed amendments, as set 

forth below, have not received the 

approval of the Department. 

Proposed by National Milk Producers 

Federation (NMPF): 

Proposal 1 

Proposal 1 would change how the 

Class I skim milk price is determined for 

setting and moving Class I prices. 

Proposal 1 continues to essentially use 

the higher of the current advance Class 

III or advance Class IV skim milk price 

per hundredweight (cwt) in setting and 

moving Class I prices, but adds an 

adjustment factor of $0.73. The $0.73 

per cwt factor is intended to reflect the 

increases in costs associated with 

supplying the Class I market. The 

proposal seeks to accomplish this 

objective by replacing the current Class 

I price mover (where all prices are U.S. 

average prices as reported by the 

National Agricultural Statistical Service 

(NASS)) with the higher of: 

a. Nonfat dry milk price × 8.9 ¥ 

$0.52; or 

b. Cheese price × 10.0 + Dry whey 

price × 6.1 ¥ Butter Price × 3.9 ¥ 1.44. 

Proposal 1 would eliminate direct 

reference to the advanced Class III and 

Class IV skim milk prices in the formula 

for determining the Class I skim milk 

price. While the make allowance factors 

used in determining Class III and Class 

IV formulas are under consideration for 

change in a separate rulemaking 

proceeding, the formulas above would 

be changed to reflect any future 

amendments made to product make 

allowances or product yield factors for 

cheese, nonfat dry milk, butter and dry 

whey as the result of formal rulemaking. 

The proposed formulas are based on 

current make allowances used in 

determining Class III and Class IV 

prices. The $0.52 and $1.44 factors 

presented in the above formulas are not 

revised make allowance factors. They 

represent the mathematical 

simplification of adjusting current 

advanced Class III and Class IV prices 

by a factor of $0.73. 

Proposals 2 and 3 

In order to use the simplified 

formulas in Proposal 1, the proposed 

use of an advanced cheese skim milk 

price per cwt, an advanced butterpowder skim milk price per cwt and an 

advanced butterfat price per pound 

would be used to replace the current 

advance Class III and Class IV skim milk 

prices per cwt. Additionally, the 

proposed advanced butterfat price per 

pound would be determined differently 

than it is currently. 

Proposal 2 would change the current 

advanced Class III skim milk pricing 

factor per cwt to an advanced cheese 

skim milk price per cwt factor. The 

cheese skim price per cwt would be 

determined by: 

a. Multiplying the weighted average of 

the 2 most recent NASS average weekly 

prices for block and barrel cheese by 10; 

multiplying the weighted average of the 

2 most recent NASS average weekly 

survey prices for dry whey announced 

before the 24th day of the month times 

6.1; 

b. Multiplying the weighted average 

of the 2 most recent NASS weekly 

survey prices for butter announced 

before the 24th day of the month times 

3.9; 

c. Adding the amounts computed in a. 

above; and subtracting the butter price 

per pound in b. above; and 

d. Subtracting $1.44. 

e. The advanced butterfat price per 

pound would be determined by 

multiplying the weighted average of the 

2 most recent NASS survey prices for 

butter by 1.20; and from this product 

subtracting $0.1307. 

Proposal 3 would change referring to 

the current advanced Class IV skim milk 

pricing factor per cwt to a butter-powder 

skim milk price per cwt. The advanced 

butter powder skim milk price (nonfat 

dry milk) per cwt would be determined 

by: 

a. Multiplying the weighted average of 

the 2 most recent NASS weekly survey 

prices for nonfat dry milk announced 

before the 24th day of the month by 8.9; 

and 

b. From the product subtracting $0.52. 

Proposal 4 

This proposal would change the way 

the Class II milk price is computed 

without noticeably changing the level of 

pricing. While the skim portion of milk 

used in Class II would continue to be 

announced in advance, it is proposed to 

be computed by: 

a. Multiplying the weighted average of 

the 2 most recent NASS survey prices 

for nonfat dry milk per pound 

announced before the 24th day of the 

month by 8.9; and 

b. From the product subtracting $0.54. 

Proposal 5 

This proposal would change how the 

current Class II butterfat price is 

determined. As proposed the Class II 

butterfat price per pound would be the 

NASS AA Butter survey price reported 

by the Department for the month 

multiplied by 1.2; and from the product 

subtracting $0.1147. (Instead of adding 

$0.70 to the butterfat price (the current 

Class II differential), this proposal 

would add $1.53 per cwt). 

The five aforementioned proposals 

would modify the current provisions of 

all Federal milk marketing orders as 

follows: 

1. Amend § 1000.50 by: 

a. Revising paragraph (e) 

b. Revising paragraph (g); and 

c. Revising paragraph (q) (1) (2) (3) 

The revisions and additions would 

read as follows: 

Section 1000.50 Class Prices, Component 

Prices, and Advanced Pricing Factors. 

* * * * * 

(e) Class II skim milk price. The Class II 

skim milk price per hundredweight shall be 

the weighted average of the 2 most recent 

U.S. average weekly survey NASS nonfat dry 

milk prices announced before the 24th day of 

the month, times 8.9, then subtracting from 

this product $0.54. 

(g) Class II butterfat price. The Class II 

butterfat price per pound, rounded to the 

nearest one hundredth cent, shall be the U.S. 

average NASS AA butter survey price 

reported by the Department for the month, 

multiplied by 1.20, then subtracting from this 

product $0.1147. * * * 

(q) * * * 

(1) An advanced cheese skim milk price 

per hundredweight, rounded to the nearest 

cent, shall be computed as follows: 

(i) Following the procedure set forth in 

paragraph (n)(1) of this section, but using the 

weighted average of the 2 most recent NASS 


jlentini on PROD1PC65 with PROPOSAL
Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Proposed Rules 67495 

U.S. average weekly survey prices announced 

before the 24th day of the month, multiply 

the resulting cheese price by 10. 

(ii) Multiply the weighted average of the 2 

most recent NASS U.S. average weekly 

survey dry whey prices announced before the 

24th day of the month by 6.1. 

(iii) Multiply the weighted average of the 

2 most recent NASS U.S. average weekly 

survey butter prices announced before the 

24th day of the month by 3.9. 

(iv) Add the amounts computed in 

paragraphs (q)(1)(i) and (ii), subtract the 

amount in paragraph (q)(1)(iii), and subtract 

$1.44. 

(2) An advanced butter-powder skim milk 

price per hundredweight, rounded to the 

nearest cent, shall be computed as follows: 

(i) Multiply the weighted average of the 2 

most recent NASS U.S. average weekly 

survey prices for nonfat dry milk announced 

before the 24th day of the month by 8.9; and 

(ii) From the amount computed in 

paragraph (q)(2)(i) subtract $0.52. 

(3) An advanced butterfat price per pound, 

rounded to the nearest one-hundredth cent, 

shall be calculated by computing a weighted 

average of the 2 most recent U.S. average 

NASS AA butter survey prices announced 

before the 24th day of the month, multiplying 

the result by 1.20, then subtracting $0.1307. 

* * * * * 

Proposed by Dairy Programs, 

Agricultural Marketing Service: 

Proposal No. 6 

For all Federal Milk Marketing 

Orders, make such changes as may be 

necessary to make the entire marketing 

agreements and the orders conform with 

any amendments thereto that may result 

from this hearing. 

List of Subjects in 7 CFR Parts 1000, 

1001, 1005, 1006, 1007, 1030, 1032, 

1033, 1124, 1126, and 1131. 

Milk marketing orders. 

The authority citation for 7 CFR Parts 

1000, 1001, 1005, 1006, 1007, 1030, 

1032, 1033, 1124, 1126, and 1131 

continues to read as follows: 

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

Copies of this notice of hearing and 

the orders may be procured from the 

Market Administrator of each of the 

aforesaid marketing areas, or from the 

Hearing Clerk, United States 

Department of Agriculture, STOP 

9200—Room 1083, 1400 Independence 

Avenue, SW., Washington, DC 20250–

9200, or may be inspected there. 

Copies of the transcript of testimony 

taken at the hearing will not be available 

for distribution through the Hearing 

Clerk’s Office. If you wish to purchase 

a copy, arrangements may be made with 

the reporter at the hearing. 

From the time that a hearing notice is 

issued and until the issuance of a final 

decision in a proceeding, Department 

employees involved in the decisionmaking process are prohibited from 

discussing the merits of the hearing 

issues on an ex parte basis with any 

person having an interest in the 

proceeding. For this particular 

proceeding, the prohibition applies to 

employees in the following 

organizational units: 

Office of the Secretary of Agriculture. 

Office of the Administrator, Agricultural 

Marketing Service. 

Office of the General Counsel. 

Dairy Programs, Agricultural 

Marketing Service (Washington office) 

and the Offices of all Market 

Administrators. 

Procedural matters are not subject to 

the above prohibition and may be 

discussed at any time. 

Dated: November 17, 2006. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 06–9341 Filed 11–20–06; 3:01 pm] 

BILLING CODE 3410–02–P 

NUCLEAR WASTE TECHNICAL 

REVIEW BOARD 

10 CFR Part 1304 

Implementation of Privacy Act of 1974 

AGENCY: U.S. Nuclear Waste Technical 

Review Board. 

ACTION: Proposed rule 

SUMMARY: The U.S. Nuclear Waste 

Technical Review Board (Board) is 

proposing to implement a set of 

procedural regulations under the 

Privacy Act of 1974, Public Law 93–579, 

5 U.S.C. 552a. The proposed regulations 

have been written to conform to the 

statutory provisions of the Act. They are 

intended to expedite the processing of 

Privacy Act requests received by the 

Board and to ensure the proper 

dissemination of information to the 

public. 

DATES: Comments on the proposed rule 

should be submitted no later than 

January 15, 2007. 

ADDRESSES: Comments on the proposed 

rule may be submitted in the following 

ways: 

• By assessing the Federal 

eRulemaking Portal: 

www.regulations.gov; follow the 

instructions for submitting comments. 

• By internet: Using the ‘‘Contact 

NWTRB’’ icon at the bottom of the 

Board’s Home page on the Web site at 

http://www.nwtrb.gov. 

• By Fax: at 703–235–4495. 

• By Mail or Hand Delivery to: Joyce 

M. Dory, Director of Administration, 

U.S. Nuclear Waste Technical Review 

Board, 2300 Clarendon Blvd., Suite 

1300, Arlington, VA 22201. 

Comments submitted on the proposed 

Privacy Act regulation should be clearly 

identified. 

FOR FURTHER INFORMATION CONTACT: 

Victoria Reich, 703–235–4473. 

SUPPLEMENTARY INFORMATION: The 

proposed rule is intended to set forth 

the procedures to be used by members 

of the public when requesting records 

from the Board under the Privacy Act of 

1974. It also establishes time frames for 

responses, a fee schedule for copying 

records, and charges for obtaining 

information, when applicable. 

A copy of this document may be 

obtained from the Board by written 

request to the U.S. Nuclear Waste 

Technical Review Board; 2300 

Clarendon Blvd., Suite 1300; Arlington, 

VA 22201; or by calling 703–235–4473. 

A copy of this document also will be 

posted on the Board’s Web site at http:// 

www.nwrtrb.gov. 

All written comments received on this 

document by January 15, 2007, will be 

fully considered before publication of 

the final rule. Any information 

considered confidential must be so 

identified and submitted in writing. 

Comments submitted anonymously will 

not be considered. However, name and/ 

or address may be withheld on request. 

Executive Order 12866 

The proposed regulation does not 

meet the criteria for a significant 

regulatory action under Executive Order 

12866. Therefore, review by the Office 

of Management and Budget is not 

required. 

Regulatory Flexibility Act 

The proposed rule adds Privacy Act 

regulations to 10 CFR part 1304 and will 

not have a significant economic impact 

on a substantial number of small 

entities. 

Paperwork Reduction Act 

The rule imposes no additional 

recording and recordkeeping 

requirements and is therefore exempt 

from the requirements of the Paperwork 

Reduction Act. 

List of Subjects in 10 CFR Part 1304 

Administrative practice and 

procedure, Privacy, Reporting and 

recordkeeping requirements. 

The Board proposes to add part 1304 

to Title 10 of the Code of Federal 

Regulations to read as follows: 


jlentini on PROD1PC65 with PROPOSAL