[Federal Register Volume 62, Number 4 (Tuesday, January 7, 1997)]
[Rules and Regulations]
[Pages 918-920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-278]


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DEPARTMENT OF AGRICULTURE
7 CFR Part 1079

[DA-96-16]


Milk in the Iowa Marketing Area; Temporary Revision of Rule

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This document revises certain provisions of the Iowa Federal 
milk marketing order for the months of December 1996 through March 
1997. This action decreases the percentage of a supply plant's receipts 
that must be delivered to fluid milk plants to qualify a supply plant 
for pooling under the Iowa Federal milk order. The applicable 
percentage will be decreased 10 percentage points, from 30 percent to 
20 percent, for the months of December 1996 through March 1997. The 
revision is being made in response to a request by a pool supply plant 
that is regulated under the Iowa order. This action is necessary to 
prevent the uneconomic shipment of milk.

EFFECTIVE DATES: Amendment 1 is effective January 8, 1997. Amendment 2 
is effective December 1, 1996, through March 31, 1997.

FOR FURTHER INFORMATION CONTACT:
Nicholas Memoli, Marketing Specialist, USDA/AMS/Division, Order 
Formulation Branch, Room 2971, South Building, P.O. Box 96456, 
Washington, DC 20090-6456, (202) 690-1932, e-mail address 
Nicholas__X__M<a href="/cdn-cgi/l/email-protection#c7a2aaa8abae87b2b4a3a6e9a0a8b1"><span class="__cf_email__" data-cfemail="acc9c1c3c0c5ecd9dfc8cd82cbc3da">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:
    Notice of Proposed Temporary Revision: Issued December 6, 1996; 
published December 12, 1996 (61 FR 65366).
    The Department is issuing this final rule in conformance with 
Executive Order 12866.
    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This rule is not intended to have a retroactive 
effect. This rule will not preempt any state or local laws, 
regulations, or policies, unless they present an irreconcilable 
conflict with this rule.
    The Agricultural Marketing Agreement Act of 1937 (the ``Act''), as 
amended (7 U.S.C. 601-674), provides that administrative proceedings 
must be exhausted before parties may file suit in court. Under section 
608c(15)(A) of the Act, any handler subject to an order may request 
modification or exemption from such order by filing with the Secretary 
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 Secretary 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

[[Page 919]]

review the Secretary'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.

Small Business Consideration

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), as amended, the Agricultural Marketing Service has considered 
the economic impact of this action on small entities and has certified 
that this rule will not have a significant economic impact on a 
substantial number of small entities. For the purpose of the Regulatory 
Flexibility Act, a dairy farm is considered a ``small business'' if it 
has an annual gross revenue of less than $500,000, and a dairy products 
manufacturer is a ``small business'' if it has fewer than 500 
employees. For the purposes of determining which dairy farms are 
``small businesses,'' the $500,000 per year criterion was used to 
establish a production guideline of 326,000 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. This rule lessens the regulatory impact of the order on 
certain milk handlers and tends to ensure that dairy farmers will 
continue to have their milk priced under the order and thereby receive 
the benefits that accrue from such pricing.
    The revised supply plant shipping percentages are incorporated into 
the order to prevent the uneconomic shipment of milk. This action will 
decrease the percentage of milk receipts that handlers are required to 
move to fluid milk distributing plants. With a decrease in the shipping 
percentage, supply plant operators will not have to move milk 
uneconomically to pool distributing plants to keep the milk received at 
their plants priced under the order.
    The reduction of the required supply plant shipping percentage for 
the months of December 1996 through March 1997 would allow the milk of 
producers traditionally associated with the Iowa market to continue to 
be pooled and priced under the order. The revision would lessen the 
likelihood that more milk shipments to pool plants might be required 
under the order than are actually needed to supply the fluid milk needs 
of the market and would result in savings in hauling costs for handlers 
and producers.
    This temporary revision is issued pursuant to the provisions of the 
Agricultural Marketing Agreement Act and the provisions of 
Sec. 1079.7(b)(1) of the Iowa order.

Issuance of Notice of Proposed Revision

    Notice of proposed rulemaking was issued concerning a proposed 
reduction in the percentage of a supply plant's receipts which must be 
delivered to fluid milk plants to qualify a supply plant for pooling 
under the Iowa order. The revisions were proposed to be effective for 
the months of December 1, 1996, through March 31, 1997. The public was 
afforded the opportunity to comment on the proposed notice by 
submitting written data, views and arguments by December 19, 1996.
    Two comments were received. One comment supported the recommended 
reduction, while the other comment supported a reduction with 
modification.

Statement of Consideration

    After consideration of all relevant material, including the 
proposed set forth in the aforesaid notice, and other available 
information, it is hereby found and determined that the supply plant 
shipping percentage set forth in Sec. 1079.7(b) of the Iowa Federal 
milk order should be decreased 10 percentage points, from 30 percent to 
20 percent, for the months of December 1996 through March 1997.
    Beatrice Cheese, Inc., a supply plant regulated under the Iowa 
order, proposed decreasing the supply plant shipping percentage by 10 
percentage points, from 35 percent of plant receipts to 25 percent of 
such receipts, for the month of November 1996, and from 30 percent to 
20 percent for the months of December 1996 through March 1997. The 
proponent contends that the decrease is necessary to prevent the 
uneconomic shipment of milk.
    According to Beatrice, the Department's October 23, 1996, decision 
increasing the shipping percentage requirements to 35 percent for the 
months of September through November beginning with October 1996, and 
to 30 percent for the months of December through March has caused 
unjust financial losses and the uneconomic shipment of milk to occur. 
In order to comply with Federal order requirements, Beatrice states 
that a significant amount of milk was unable to be pooled to the 
detriment of Iowa's dairy farmers. Additionally, proponent claims that 
market conditions have changed drastically in Iowa since October 1996 
due to a drop in the cheese and butter markets which has made more than 
enough milk available for fluid use eliminating the need for increased 
shipping percentages.
    While Beatrice's proposal included a temporary revision of the 
supply plant shipping percentage requirements for November 1996, the 
proposed revision issued December 6, 1996, requesting comments limited 
the revision period to December 1996 through March 1997. The inclusion 
of November 1996 was impractical and infeasible given the amount of 
time necessary for required procedures, including a comment period.
    Wapsie Valley Creamery, a supply plant regulated under Order 79, 
submitted a comment in support of a reduction in the supply plant 
shipping requirement by 10 percentage points for the months of December 
1996 through March 1997. Wapsie states that milk marketing conditions 
have changed since October 1996, and that due to the increased shipping 
requirements recently put into effect, it has been forced to make 
uneconomic shipments of milk to meet order regulations.
    Anderson Erickson Dairy Co. (A-E), a proprietary distributing plant 
regulated under the Iowa order, submitted a comment supporting a 
reduction in the supply plant shipping percentage requirements for the 
Iowa order, but argues that the decrease should be limited to 5 
percentage points, from 30 percent to 25 percent, for the months of 
December 1996 through March 1997. A-E contends that, given past 
experiences which have caused A-E to request increased shipping 
percentages due to a lack of available milk supplies for the fluid 
market, the percentage should be reduced only 5 percentage points from 
the current level. A-E also states that under no circumstances should 
the shipping requirements for September through December of future 
years be reduced.
    At the time of A-E's previous request to have the shipping 
percentages increased, the Department had found that in the Iowa 
marketing area the percentage of pooled milk used in Class I had 
noticeably increased for the months of June through August 1996 as 
compared to earlier years. This situation indicated the need for 
shipping percentage increases in order to attract an adequate supply of 
milk for fluid use. However, Class I utilization for the month of 
October 1996 in the Iowa marketing area illustrates that there is no 
need to maintain the shipping percentages at the current level of 30 
percent. The Class I utilization for the months of October and November 
1996

[[Page 920]]

(33.8% and 32.7%, respectively) has decreased as compared to October 
and November 1995 (49.6% and 36.1%, respectively). A decrease in Class 
I utilization is also apparent for the January through March 1996 
period as compared to the same months of 1995. Class I utilization 
declined from 34.7 percent for January 1995 to 32.1 percent in January 
1996, 35.7 percent to 33.1 percent for the month of February, and from 
34.2 percent to 31.7 percent for March of such years. This suggests 
that sufficient supplies of milk for fluid use should be available 
during the months of December 1996 through March 1997 for Iowa order 
distributing plants. Therefore, a decrease in the shipping requirement 
is warranted. By reducing the shipping requirement percentage for the 
December 1996 through March 1997 period to 20 percent, a reasonable 
balance will be reached which will prevent uneconomic shipments from 
occurring, as well as assure a sufficient milk supply.
    It is hereby found and determined that 30 days' notice of the 
effective date hereof is impractical, unnecessary, and contrary to the 
public interest in that:
    (a) This temporary revision is necessary to reflect current 
marketing conditions and to maintain orderly marketing conditions in 
the marketing area for the months of December 1996 through March 1997;
    (b) This temporary revision does not require of persons affected 
substantial or extensive preparation prior to the effective date; and
    (c) Notice of the proposed temporary revision was given interested 
parties and they were afforded opportunity to file written data, views, 
or arguments concerning this temporary revision.
    Therefore, good cause exists for making this temporary revision 
effective less than 30 days from the days from the date of issuance.

List of Subject in 7 CFR Part 1079

    Milk marketing orders.

    For the reasons set forth in the preamble, 7 CFR Part 1079 is 
amended as follows:

PART 1079--MILK IN THE IOWA MARKETING AREA

    1. The authority for 7 CFR Part 1079 continues to read as follows:

    Authority: 7 U.S.C. 601-674.


Sec. 1079.7  [Amended]

    2. In Sec. 1079.7(b), the introductory text is amended by revising 
the words ``30 percent'' to read ``20 percent'' effective December 1, 
1996, through March 31, 1997.

    Dated: December 31, 1996.
Richard M. McKee,
Director, Dairy Division.
[FR Doc. 97-278 Filed 1-6-97; 8:45 am]
 BILLING CODE 3410-02-P


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