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.

Rules and Regulations Federal Register

26547 

Vol. 83, No. 111 

Friday, June 8, 2018 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 1051 

[Doc. No. AO–15–0071; AMS–DA–14–0095] 

Milk in California; Federal Milk 

Marketing Order Promulgation 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This final rule establishes a 

Federal Milk Marketing Order (FMMO) 

regulating the handling of milk in 

California. This final rule issues a 

marketing order incorporating the entire 

state of California and adopts the same 

dairy product classification and pricing 

provisions used throughout the current 

FMMO system. The California FMMO 

provides for the recognition of producer 

quota as administered by the California 

Department of Food and Agriculture. 

More than the required number of 

producers for the California marketing 

area have approved the issuance of the 

order. This final rule also announces 

AMS’s intention to merge the 

information collection forms used to 

conduct the producer referendum with 

the reporting forms used in the other 

dairy marketing orders. 

DATES: 

Effective Date: This rule is effective 

October 17, 2018. 

Applicability Date: All provisions of 

this rule apply to affected parties as of 

November 1, 2018. 

FOR FURTHER INFORMATION CONTACT: Erin 

C. Taylor, Order Formulation and 

Enforcement Division, USDA/AMS/ 

Dairy Program, STOP 0231–Room 2963, 

1400 Independence Ave. SW, 

Washington, DC 20250–0231, (202) 720– 

7183, email address: erin.taylor@

ams.usda.gov. 

SUPPLEMENTARY INFORMATION: This rule, 

in accordance with 7 CFR 900.14(c), is 

the Secretary’s final rule in this 

proceeding and issues a marketing order 

as defined in 7 CFR 900.2(j). 

Accordingly, this final rule adopts 

amendments detailed in the proposed 

rule (83 FR 14110), with one minor 

technical correction to paragraph 

numbering in § 1051.73(c)(2). The 

proposed rule designated two 

consecutive paragraphs in that section 

as paragraph (c)(2)(vii). This final rule 

corrects the proposed rule by 

redesignating the second paragraph as 

paragraph (c)(2)(viii). 

This rule is effective with publication 

of the Announcement of Advanced 

Prices and Pricing Factors on October 

17, 2018 (see § 1051.53). Affected 

parties must comply with all provisions 

of this rule beginning November 1, 

2018. 

This administrative action is governed 

by the provisions of Sections 556 and 

557 of Title 5 of the United States Code 

and is therefore excluded from the 

requirements of Executive Order 12866. 

This final rule is not considered an 

Executive Order 13771 regulatory action 

because it does not meet the definition 

of a ‘‘regulation’’ or ‘‘rule’’ under 

Executive Order 12866. 

The amendments adopted in this final 

rule have been reviewed under 

Executive Order 12988, Civil Justice 

Reform. This rule is not intended to 

have retroactive effect and will not 

preempt any state or local law, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

AMS is committed to complying with 

the E-Government Act to promote the 

use of the internet and other 

information technologies, to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

The Agricultural Marketing 

Agreement Act of 1937 (AMAA), as 

amended (7 U.S.C. 601–674 and 7253), 

provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

section 608c(15)(A) of the AMAA, any 

handler subject to a marketing order 

may request modification or exemption 

from such order by filing with the U.S. 

Department of Agriculture (USDA) 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 law. A handler 

is afforded the opportunity for a hearing 

on the petition. After a hearing, USDA 

would rule on the petition. The AMAA 

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 USDA’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. 

Regulatory Flexibility Act and 

Paperwork Reduction Act 

Pursuant to the requirements set forth 

in the Regulatory Flexibility Act (RFA) 

(5 U.S.C. 601–612), the Agricultural 

Marketing Service (AMS) considered the 

economic impact of this action on small 

entities. Accordingly, AMS prepared 

this final regulatory flexibility analysis. 

The purpose of the RFA is to fit 

regulatory actions to the scale of 

businesses subject to such actions so 

that small businesses will not be unduly 

or disproportionately burdened. Small 

dairy farm businesses have been defined 

by the Small Business Administration 

(SBA) (13 CFR 121.601) as those 

businesses having annual gross receipts 

of less than $750,000. The SBA’s 

definition of small agricultural service 

firms, which includes handlers that will 

be regulated under this marketing order, 

varies depending on the product 

manufactured. Small fluid milk and ice 

cream manufacturers are defined as 

having 1,000 or fewer employees. Small 

butter and dry or condensed dairy 

product manufacturers are defined as 

having 750 or fewer employees. Small 

cheese manufacturers are defined as 

having 1,250 or fewer employees. 

For the purpose of determining which 

California dairy farms are ‘‘small 

businesses,’’ the $750,000 per year 

criterion was used to establish a 

production guideline that equates to 

approximately 315,000 pounds of milk 

per month. Although this guideline does 

not factor in additional monies that may 

be received by dairy farmers, it is a 

standard encompassing most small 

dairy farms. For the purpose of 

determining a handler’s size, if the plant 

is part of a larger company operating 

multiple plants that collectively exceed 

the employee limit for that type of 

manufacturing, the plant is considered a 

large business even if the local plant has 

fewer than the defined number of 

employees. 

Interested persons were invited to 

present evidence at the hearing on the 


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26548 Federal Register / Vol. 83, No. 111 / Friday, June 8, 2018 / Rules and Regulations 

1Official Notice is taken of: CDFA, California 

Dairy Review, Volume 19, Issue 9, September 2015. 

https://www.cdfa.ca.gov/dairy/pdf/CDR/2015/CDR_

SEPT_15.pdf. 

probable regulatory and informational 

impact of the California FMMO on small 

businesses. Specific evidence on the 

number of large and small dairy farms 

in California (above and below the 

threshold of $750,000 in annual sales) 

was not presented at the hearing. 

However, data compiled by CDFA1

suggests that between 5 and 15 percent 

of California dairy farms would be 

considered small business entities. No 

comparable data for dairy product 

manufacturers was available. 

Record evidence indicates that 

implementing the California FMMO 

would not impose a disproportionate 

burden on small businesses. Currently, 

the California dairy industry is 

regulated by a California State Order 

(CSO) that is administered and enforced 

by CDFA. While the CSO and FMMOs 

have differences, they both maintain 

similar classified pricing and 

marketwide pooling functions. 

Therefore, it is not expected that the 

regulatory change will have a significant 

impact on California small businesses. 

The record evidence indicates that 

while the program is likely to impose 

some costs on the regulated parties, 

those costs would be outweighed by the 

benefits expected to accrue to the 

California dairy industry. In conjunction 

with the publication of the final 

decision (83 FR 14110), AMS released a 

Regulatory Economic Impact Analysis 

(REIA) to study the possible impacts of 

the California FMMO. The analysis 

reflects the provisions of this FMMO 

and may be viewed at 

www.ams.usda.gov/caorder. 

In accordance with the Paperwork 

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

Chapter 35), this final rule also 

announces AMS’s intention to merge 

the OMB Report Forms under a 

California Federal Milk Marketing Order 

(from Milk Handlers and Milk 

Marketing Cooperatives, 0581–0298), 

and the forms used to conduct the 

producer referendum (Referendum 

Ballots, 0581–0300) with the reporting 

forms used in the rest of the dairy 

marketing orders (Report Forms Under 

the Federal Milk Marketing Order 

Program, 0581–0032). Any additional 

information collection and 

recordkeeping requirements that may be 

imposed under the order would be 

submitted to OMB for public comment 

and approval. 

Prior Documents in This Proceeding 

Notice of Hearing: Issued July 27, 

2015; published August 6, 2015 (80 FR 

47210); 

Notice to Reconvene Hearing: Issued 

September 25, 2015; published 

September 30, 2015 (80 FR 58636); 

Recommended Decision and 

Opportunity To File Written Exceptions: 

Issued February 6, 2017; published 

February 14, 2017 (82 FR 10634); 

Documents for Official Notice: Issued 

August 8, 2017; published August 14, 

2017 (82 FR 37827); 

Information Collection—Producer 

Ballots: Issued September 27, 2017; 

published October 2, 2017 (82 FR 

45795); 

Delay of Rulemaking: Issued February 

1, 2018; published February 6, 2018 (83 

FR 5215); 

Ratification of Record: Issued March 

14, 2018; published March 19, 2018 (83 

FR 11903); and 

Final Decision: Issued March 23, 

2018; published April 2, 2018 (83 FR 

14110). 

Findings and Determinations 

The findings and determinations 

hereinafter set forth are hereby ratified 

and confirmed, except where they may 

conflict with those set forth herein. 

(1) Findings upon the basis of the 

hearing record. 

The promulgation of the marketing 

agreement and order is based on the 

record of a public hearing held 

September 22 through November 18, 

2015 in Clovis, California. The hearing 

was held to receive evidence on four 

proposals submitted by dairy farmers, 

handlers, and other interested parties. 

Notice of this hearing was published in 

the Federal Register on August 6, 2015 

(80 FR 47210), 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 (7 CFR 

part 900). 

Upon the basis of the evidence 

introduced at the public hearing and its 

record, it is found that: 

(a) The order as hereby promulgated, 

and all of the terms and conditions 

thereof, will tend to effectuate the 

declared policy of the AMAA; 

(b) The parity prices of milk, as 

determined pursuant to section 2 of the 

AMAA, are not reasonable in view of 

the price of feeds, available supplies of 

feeds, and other economic conditions 

that affect market supply and demand 

for milk in California. The minimum 

prices specified in the tentative 

marketing agreement and order, as 

hereby established, are prices that will 

reflect the aforesaid factors, ensure a 

sufficient quantity of pure and 

wholesome milk, and be in the public 

interest; and 

(c) The tentative marketing agreement 

and order, as hereby established, will 

regulate the handling of milk in the 

same manner as, and applies only to, 

persons in the respective classes of 

industrial and commercial activity 

specified in, marketing agreements upon 

which a hearing has been held. 

(2) Determinations. 

It is hereby determined that: 

(a) The refusal or failure of handlers 

(excluding cooperative associations 

specified in section 8c(9) of the AMAA) 

of more than 50 percent of the milk 

marketed within the specified marketing 

areas to sign a proposed marketing 

agreement, tends to prevent the 

effectuation of the declared policy of the 

AMAA; 

(b) The issuance of this order 

establishing the California order is the 

only practical means pursuant to the 

declared policy of the AMAA of 

advancing the interests of producers as 

defined in the order as hereby 

promulgated; and 

(c) The issuance of this order 

establishing the California order is 

favored by at least two-thirds of the 

producers who were engaged in the 

production of milk for sale in the 

respective marketing areas. 

List of Subjects in 7 CFR Part 1051 

Milk marketing orders. 

Order Establishing the Order 

Regulating the Handling of Milk in the 

California Marketing Area 

It is therefore ordered, that on and 

after the effective date hereof, the 

handling of milk in the California 

marketing area shall be in conformity to 

and in compliance with the terms and 

conditions of the order. 

■ For the reasons stated in the preamble, 

the Agricultural Marketing Service adds 

7 CFR part 1051 to read as follows: 

PART 1051—MILK IN THE CALIFORNIA 

MILK MARKETING AREA 

Subpart A—Order Regulating Handling 

General Provisions 

Sec. 

1051.1 General provisions. 

Definitions 

1051.2 California marketing area. 

1051.3 Route disposition. 

1051.4 Plant. 

1051.5 Distributing plant. 

1051.6 Supply plant. 

1051.7 Pool plant. 

1051.8 Nonpool plant. 

1051.9 Handler. 


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1051.10 Producer-handler. 

1051.11 California quota program. 

1051.12 Producer. 

1051.13 Producer milk. 

1051.14 Other source milk. 

1051.15 Fluid milk product. 

1051.16 Fluid cream product. 

1051.17 [Reserved]. 

1051.18 Cooperative association. 

1051.19 Commercial food processing 

establishment. 

Market Administrator, Continuing 

Obligations, and Handler Responsibilities 

1051.25 Market administrator. 

1051.26 Continuity and separability of 

provisions. 

1051.27 Handler responsibility for records 

and facilities. 

1051.28 Termination of obligations. 

Handler Reports 

1051.30 Reports of receipts and utilization. 

1051.31 Payroll reports. 

1051.32 Other reports. 

Subpart B—Milk Pricing 

Classification of Milk 

1051.40 Classes of utilization. 

1051.41 [Reserved]. 

1051.42 Classification of transfers and 

diversions. 

1051.43 General classification rules. 

1051.44 Classification of producer milk. 

1051.45 Market administrator’s reports 

and announcements concerning 

classification. 

Class Prices 

1051.50 Class prices, component prices, 

and advanced pricing factors. 

1051.51 Class I differential and price. 

1051.52 Adjusted Class I differentials. 

1051.53 Announcement of class prices, 

component prices, and advanced pricing 

factors. 

1051.54 Equivalent price. 

Producer Price Differential 

1051.60 Handler’s value of milk. 

1051.61 Computation of producer price 

differential. 

1051.62 Announcement of producer prices. 

Subpart C—Payments for Milk 

Producer Payments 

1051.70 Producer-settlement fund. 

1051.71 Payments to the producersettlement fund. 

1051.72 Payments from the producersettlement fund. 

1051.73 Payments to producers and to 

cooperative associations. 

1051.74 [Reserved]. 

1051.75 Plant location adjustments for 

producer milk and nonpool milk. 

1051.76 Payments by a handler operating a 

partially regulated distributing plant. 

1051.77 Adjustment of accounts. 

1051.78 Charges on overdue accounts. 

Administrative Assessment and Marketing 

Service Deduction 

1051.85 Assessment for order 

administration. 

1051.86 Deduction for marketing services. 

Subpart D—Miscellaneous Provisions 

1051.90 Dates. 

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

Subpart A—Order Regulating Handling 

General Provisions 

§ 1051.1 General provisions. 

The terms, definitions, and provisions 

in part 1000 of this chapter apply to this 

part unless otherwise specified. In this 

part, all references to sections in part 

1000 refer to part 1000 of this chapter. 

Definitions 

§ 1051.2 California marketing area. 

The marketing area means all territory 

within the bounds of the following 

states and political subdivisions, 

including all piers, docks, and wharves 

connected therewith and all craft 

moored thereat, and all territory 

occupied by government (municipal, 

State, or Federal) reservations, 

installations, institutions, or other 

similar establishments if any part 

thereof is within any of the listed states 

or political subdivisions: 

California 

All of the State of California. 

§ 1051.3 Route disposition. 

See § 1000.3. 

§ 1051.4 Plant. 

See § 1000.4. 

§ 1051.5 Distributing plant. 

See § 1000.5. 

§ 1051.6 Supply plant. 

See § 1000.6. 

§ 1051.7 Pool plant. 

Pool plant means a plant, unit of 

plants, or system of plants as specified 

in paragraphs (a) through (f) of this 

section, but excluding a plant specified 

in paragraph (h) of this section. The 

pooling standards described in 

paragraphs (c) and (f) of this section are 

subject to modification pursuant to 

paragraph (g) of this section: 

(a) A distributing plant, other than a 

plant qualified as a pool plant pursuant 

to paragraph (b) of this section or 

§ lllll.7(b) of any other Federal 

milk order, from which during the 

month 25 percent or more of the total 

quantity of fluid milk products 

physically received at the plant 

(excluding concentrated milk received 

from another plant by agreement for 

other than Class I use) are disposed of 

as route disposition or are transferred in 

the form of packaged fluid milk 

products to other distributing plants. At 

least 25 percent of such route 

disposition and transfers must be to 

outlets in the marketing area. 

(b) Any distributing plant located in 

the marketing area which during the 

month processed at least 25 percent of 

the total quantity of fluid milk products 

physically received at the plant 

(excluding concentrated milk received 

from another plant by agreement for 

other than Class I use) into ultrapasteurized or aseptically-processed 

fluid milk products. 

(c) A supply plant from which the 

quantity of bulk fluid milk products 

shipped to (and physically unloaded 

into) plants described in paragraph 

(c)(1) of this section is not less than 10 

percent of the Grade A milk received 

from dairy farmers (except dairy farmers 

described in § 1051.12(b)) and handlers 

described in § 1000.9(c), including milk 

diverted pursuant to § 1051.13, subject 

to the following conditions: 

(1) Qualifying shipments may be 

made to plants described in paragraphs 

(c)(1)(i) through (iv) of this section, 

except that whenever shipping 

requirements are increased pursuant to 

paragraph (g) of this section, only 

shipments to pool plants described in 

paragraphs (a), (b), and (d) of this 

section shall count as qualifying 

shipments for the purpose of meeting 

the increased shipments: 

(i) Pool plants described in 

paragraphs (a), (b), and (d) of this 

section; 

(ii) Plants of producer-handlers; 

(iii) Partially regulated distributing 

plants, except that credit for such 

shipments shall be limited to the 

amount of such milk classified as Class 

I at the transferee plant; and 

(iv) Distributing plants fully regulated 

under other Federal orders, except that 

credit for shipments to such plants shall 

be limited to the quantity shipped to 

(and physically unloaded into) pool 

distributing plants during the month 

and credits for shipments to other order 

plants shall not include any such 

shipments made on the basis of agreedupon Class II, Class III, or Class IV 

utilization. 

(2) Concentrated milk transferred 

from the supply plant to a distributing 

plant for an agreed-upon use other than 

Class I shall be excluded from the 

supply plant’s shipments in computing 

the supply plant’s shipping percentage. 

(d) Two or more plants operated by 

the same handler and located in the 

marketing area may qualify for pool 

status as a unit by meeting the total and 

in-area route disposition requirements 

of a pool distributing plant specified in 

paragraph (a) of this section and subject 

to the following additional 

requirements: 


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(1) At least one of the plants in the 

unit must qualify as a pool plant 

pursuant to paragraph (a) of this section; 

(2) Other plants in the unit must 

process Class I or Class II products, 

using 50 percent or more of the total 

Grade A fluid milk products received in 

bulk form at such plant or diverted 

therefrom by the plant operator in Class 

I or Class II products; and 

(3) The operator of the unit has filed 

a written request with the market 

administrator prior to the first day of the 

month for which such status is desired 

to be effective. The unit shall continue 

from month-to-month thereafter without 

further notification. The handler shall 

notify the market administrator in 

writing prior to the first day of any 

month for which termination or any 

change of the unit is desired. 

(e) A system of two or more supply 

plants operated by one or more handlers 

may qualify for pooling by meeting the 

shipping requirements of paragraph (c) 

of this section in the same manner as a 

single plant subject to the following 

additional requirements: 

(1) Each plant in the system is located 

within the marketing area. Cooperative 

associations or other handlers may not 

use shipments pursuant to § 1000.9(c) to 

qualify supply plants located outside 

the marketing area; 

(2) The handler(s) establishing the 

system submits a written request to the 

market administrator on or before July 

15 requesting that such plants qualify as 

a system for the period of August 

through July of the following year. Such 

request will contain a list of the plants 

participating in the system in the order, 

beginning with the last plant, in which 

the plants will be dropped from the 

system if the system fails to qualify. 

Each plant that qualifies as a pool plant 

within a system shall continue each 

month as a plant in the system through 

the following July unless the handler(s) 

establishing the system submits a 

written request to the market 

administrator that the plant be deleted 

from the system or that the system be 

discontinued. Any plant that has been 

so deleted from a system, or that has 

failed to qualify in any month, will not 

be part of any system for the remaining 

months through July. The handler(s) 

that have established a system may add 

a plant operated by such handler(s) to 

a system if such plant has been a pool 

plant each of the 6 prior months and 

would otherwise be eligible to be in a 

system, upon written request to the 

market administrator no later than the 

15th day of the prior month. In the 

event of an ownership change or the 

business failure of a handler who is a 

participant in a system, the system may 

be reorganized to reflect such changes if 

a written request to file a new marketing 

agreement is submitted to the market 

administrator; and 

(3) If a system fails to qualify under 

the requirements of this paragraph (e), 

the handler responsible for qualifying 

the system shall notify the market 

administrator which plant or plants will 

be deleted from the system so that the 

remaining plants may be pooled as a 

system. If the handler fails to do so, the 

market administrator shall exclude one 

or more plants, beginning at the bottom 

of the list of plants in the system and 

continuing up the list as necessary until 

the deliveries are sufficient to qualify 

the remaining plants in the system. 

(f) Any distributing plant, located 

within the marketing area as described 

in § 1051.2: 

(1) From which there is route 

disposition and/or transfers of packaged 

fluid milk products in any non-federally 

regulated marketing area(s) located 

within one or more States that require 

handlers to pay minimum prices for raw 

milk, provided that 25 percent or more 

of the total quantity of fluid milk 

products physically received at such 

plant (excluding concentrated milk 

received from another plant by 

agreement for other than Class I use) is 

disposed of as route disposition and/or 

is transferred in the form of packaged 

fluid milk products to other plants. At 

least 25 percent of such route 

disposition and/or transfers, in 

aggregate, are in any non-federally 

regulated marketing area(s) located 

within one or more States that require 

handlers to pay minimum prices for raw 

milk. Subject to the following 

exclusions: 

(i) The plant is described in paragraph 

(a), (b), or (e) of this section; 

(ii) The plant is subject to the pricing 

provisions of a State-operated milk 

pricing plan which provides for the 

payment of minimum class prices for 

raw milk; 

(iii) The plant is described in 

§ 1000.8(a) or (e); or 

(iv) A producer-handler described in 

§ 1051.10 with less than three million 

pounds during the month of route 

disposition and/or transfers of packaged 

fluid milk products to other plants. 

(2) [Reserved] 

(g) The applicable shipping 

percentages of paragraphs (c) and (e) of 

this section and § 1051.13(d)(2) and (3) 

may be increased or decreased, for all or 

part of the marketing area, by the market 

administrator if the market 

administrator finds that such 

adjustment is necessary to encourage 

needed shipments or to prevent 

uneconomic shipments. Before making 

such a finding, the market administrator 

shall investigate the need for adjustment 

either on the market administrator’s 

own initiative or at the request of 

interested parties if the request is made 

in writing at least 15 days prior to the 

month for which the requested revision 

is desired effective. If the investigation 

shows that an adjustment of the 

shipping percentages might be 

appropriate, the market administrator 

shall issue a notice stating that an 

adjustment is being considered and 

invite data, views, and arguments. Any 

decision to revise an applicable 

shipping or diversion percentage must 

be issued in writing at least one day 

before the effective date. 

(h) The term pool plant shall not 

apply to the following plants: 

(1) A producer-handler as defined 

under any Federal order; 

(2) An exempt plant as defined in 

§ 1000.8(e); 

(3) A plant located within the 

marketing area and qualified pursuant 

to paragraph (a) of this section which 

meets the pooling requirements of 

another Federal order, and from which 

more than 50 percent of its route 

disposition has been in the other 

Federal order marketing area for 3 

consecutive months; 

(4) A plant located outside any 

Federal order marketing area and 

qualified pursuant to paragraph (a) of 

this section that meets the pooling 

requirements of another Federal order 

and has had greater route disposition in 

such other Federal order’s marketing 

area for 3 consecutive months; 

(5) A plant located in another Federal 

order marketing area and qualified 

pursuant to paragraph (a) of this section 

that meets the pooling requirements of 

such other Federal order and does not 

have a majority of its route disposition 

in this marketing area for 3 consecutive 

months, or if the plant is required to be 

regulated under such other Federal 

order without regard to its route 

disposition in any other Federal order 

marketing area; 

(6) A plant qualified pursuant to 

paragraph (c) of this section which also 

meets the pooling requirements of 

another Federal order and from which 

greater qualifying shipments are made 

to plants regulated under the other 

Federal order than are made to plants 

regulated under the order in this part, or 

the plant has automatic pooling status 

under the other Federal order; and 

(7) That portion of a regulated plant 

designated as a nonpool plant that is 

physically separate and operated 

separately from the pool portion of such 

plant. The designation of a portion of a 

regulated plant as a nonpool plant must 


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Federal Register / Vol. 83, No. 111 / Friday, June 8, 2018 / Rules and Regulations 26551 

be requested in advance and in writing 

by the handler and must be approved by 

the market administrator. 

(i) Any plant that qualifies as a pool 

plant in each of the immediately 

preceding 3 months pursuant to 

paragraph (a) of this section or the 

shipping percentages in paragraph (c) of 

this section that is unable to meet such 

performance standards for the current 

month because of unavoidable 

circumstances determined by the market 

administrator to be beyond the control 

of the handler operating the plant, such 

as a natural disaster (ice storm, wind 

storm, flood, fire, earthquake, 

breakdown of equipment, or work 

stoppage, shall be considered to have 

met the minimum performance 

standards during the period of such 

unavoidable circumstances, but such 

relief shall not be granted for more than 

2 consecutive months. 

§ 1051.8 Nonpool plant. 

See § 1000.8. 

§ 1051.9 Handler. 

See § 1000.9. 

§ 1051.10 Producer-handler. 

Producer-handler means a person 

who operates a dairy farm and a 

distributing plant from which there is 

route disposition in the marketing area, 

from which total route disposition and 

packaged sales of fluid milk products to 

other plants during the month does not 

exceed 3 million pounds, and who the 

market administrator has designated a 

producer-handler after determining that 

all of the requirements of this section 

have been met. 

(a) Requirements for designation. 

Designation of any person as a 

producer-handler by the market 

administrator shall be contingent upon 

meeting the conditions set forth in 

paragraphs (a)(1) through (5) of this 

section. Following the cancellation of a 

previous producer-handler designation, 

a person seeking to have their producerhandler designation reinstated must 

demonstrate that these conditions have 

been met for the preceding month: 

(1) The care and management of the 

dairy animals and the other resources 

and facilities designated in paragraph 

(b)(1) of this section necessary to 

produce all Class I milk handled 

(excluding receipts from handlers fully 

regulated under any Federal order) are 

under the complete and exclusive 

control, ownership, and management of 

the producer-handler and are operated 

as the producer-handler’s own 

enterprise and at its sole risk. 

(2) The plant operation designated in 

paragraph (b)(2) of this section at which 

the producer-handler processes and 

packages, and from which it distributes, 

its own milk production is under the 

complete and exclusive control, 

ownership, and management of the 

producer-handler and is operated as the 

producer-handler’s own enterprise and 

at its sole risk. 

(3) The producer-handler neither 

receives at its designated milk 

production resources and facilities nor 

receives, handles, processes, or 

distributes at or through any of its 

designated milk handling, processing, or 

distributing resources and facilities 

other source milk products for 

reconstitution into fluid milk products 

or fluid milk products derived from any 

source other than: 

(i) Its designated milk production 

resources and facilities (own farm 

production); 

(ii) Pool handlers and plants regulated 

under any Federal order within the 

limitation specified in paragraph (c)(2) 

of this section; or 

(iii) Nonfat milk solids which are 

used to fortify fluid milk products. 

(4) The producer-handler is neither 

directly nor indirectly associated with 

the business control or management of, 

nor has a financial interest in, another 

handler’s operation; nor is any other 

handler so associated with the 

producer-handler’s operation. 

(5) No milk produced by the herd(s) 

or on the farm(s) that supplies milk to 

the producer-handler’s plant operation 

is: 

(i) Subject to inclusion and 

participation in a marketwide 

equalization pool under a milk 

classification and pricing program 

under the authority of a State 

government maintaining marketwide 

pooling of returns; or 

(ii) Marketed in any part as Class I 

milk to the non-pool distributing plant 

of any other handler. 

(b) Designation of resources and 

facilities. Designation of a person as a 

producer-handler shall include the 

determination of what shall constitute 

milk production, handling, processing, 

and distribution resources and facilities, 

all of which shall be considered an 

integrated operation, under the sole and 

exclusive ownership of the producerhandler. 

(1) Milk production resources and 

facilities shall include all resources and 

facilities (milking herd(s), buildings 

housing such herd(s), and the land on 

which such buildings are located) used 

for the production of milk which are 

solely owned, operated, and which the 

producer-handler has designated as a 

source of milk supply for the producerhandler’s plant operation. However, for 

purposes of this paragraph (b)(1), any 

such milk production resources and 

facilities which do not constitute an 

actual or potential source of milk supply 

for the producer-handler’s operation 

shall not be considered a part of the 

producer-handler’s milk production 

resources and facilities. 

(2) Milk handling, processing, and 

distribution resources and facilities 

shall include all resources and facilities 

(including store outlets) used for 

handling, processing, and distributing 

fluid milk products which are solely 

owned by, and directly operated or 

controlled by the producer-handler or in 

which the producer-handler in any way 

has an interest, including any 

contractual arrangement, or over which 

the producer-handler directly or 

indirectly exercises any degree of 

management control. 

(3) All designations shall remain in 

effect until canceled pursuant to 

paragraph (c) of this section. 

(c) Cancellation. The designation as a 

producer-handler shall be canceled 

upon determination by the market 

administrator that any of the 

requirements of paragraphs (a)(1) 

through (5) of this section are not 

continuing to be met, or under any of 

the conditions described in paragraph 

(c)(1), (2), or (3) of this section. 

Cancellation of a producer-handler’s 

status pursuant to this paragraph (c) 

shall be effective on the first day of the 

month following the month in which 

the requirements were not met or the 

conditions for cancellation occurred. 

(1) Milk from the milk production 

resources and facilities of the producerhandler, designated in paragraph (b)(1) 

of this section, is delivered in the name 

of another person as producer milk to 

another handler. 

(2) The producer-handler handles 

fluid milk products derived from 

sources other than the milk production 

facilities and resources designated in 

paragraph (b)(1) of this section, except 

that it may receive at its plant, or 

acquire for route disposition, fluid milk 

products from fully regulated plants and 

handlers under any Federal order if 

such receipts do not exceed 150,000 

pounds monthly. This limitation shall 

not apply if the producer-handler’s 

own-farm production is less than 

150,000 pounds during the month. 

(3) Milk from the milk production 

resources and facilities of the producerhandler is subject to inclusion and 

participation in a marketwide 

equalization pool under a milk 

classification and pricing plan operating 

under the authority of a State 

government. 


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(d) Public announcement. The market 

administrator shall publicly announce: 

(1) The name, plant location(s), and 

farm location(s) of persons designated as 

producer-handlers; 

(2) The names of those persons whose 

designations have been cancelled; and 

(3) The effective dates of producerhandler status or loss of producerhandler status for each. Such 

announcements shall be controlling 

with respect to the accounting at plants 

of other handlers for fluid milk products 

received from any producer-handler. 

(e) Burden of establishing and 

maintaining producer-handler status. 

The burden rests upon the handler who 

is designated as a producer-handler to 

establish through records required 

pursuant to § 1000.27 that the 

requirements set forth in paragraph (a) 

of this section have been and are 

continuing to be met, and that the 

conditions set forth in paragraph (c) of 

this section for cancellation of the 

designation do not exist. 

(f) Payments subject to Order 1131. 

Any producer-handler with Class I route 

dispositions and/or transfers of 

packaged fluid milk products in the 

marketing area described in § 1131.2 of 

this chapter shall be subject to payments 

into the Order 1131 producer settlement 

fund on such dispositions pursuant to 

§ 1000.76(a) and payments into the 

Order 1131 administrative fund, 

provided such dispositions are less than 

three million pounds in the current 

month and such producer-handler had 

total Class I route dispositions and/or 

transfers of packaged fluid milk 

products from own farm production of 

three million pounds or more the 

previous month. If the producer-handler 

has Class I route dispositions and/or 

transfers of packaged fluid milk 

products into the marketing area 

described in § 1131.2 of this chapter of 

three million pounds or more during the 

current month, such producer-handler 

shall be subject to the provisions 

described in § 1131.7 of this chapter or 

§ 1000.76(a). 

§ 1051.11 California quota program. 

California Quota Program means the 

applicable provisions of the California 

Food and Agriculture Code, and related 

provisions of the pooling plan 

administered by the California 

Department of Food and Agriculture 

(CDFA). 

§ 1051.12 Producer. 

(a) Except as provided in paragraph 

(b) of this section, producer means any 

person who produces milk approved by 

a duly constituted regulatory agency for 

fluid consumption as Grade A milk and 

whose milk is: 

(1) Received at a pool plant directly 

from the producer or diverted by the 

plant operator in accordance with 

§ 1051.13; or 

(2) Received by a handler described in 

§ 1000.9(c). 

(b) Producer shall not include: 

(1) A producer-handler as defined in 

any Federal order; 

(2) A dairy farmer whose milk is 

received at an exempt plant, excluding 

producer milk diverted to the exempt 

plant pursuant to § 1051.13(d); 

(3) A dairy farmer whose milk is 

received by diversion at a pool plant 

from a handler regulated under another 

Federal order if the other Federal order 

designates the dairy farmer as a 

producer under that order and that milk 

is allocated by request to a utilization 

other than Class I; and 

(4) A dairy farmer whose milk is 

reported as diverted to a plant fully 

regulated under another Federal order 

with respect to that portion of the milk 

so diverted that is assigned to Class I 

under the provisions of such other 

order. 

§ 1051.13 Producer milk. 

Except as provided for in paragraph 

(e) of this section, producer milk means 

the skim milk (or the skim equivalent of 

components of skim milk), including 

nonfat components, and butterfat in 

milk of a producer that is: 

(a) Received by the operator of a pool 

plant directly from a producer or a 

handler described in § 1000.9(c). All 

milk received pursuant to this 

paragraph (a) shall be priced at the 

location of the plant where it is first 

physically received; 

(b) Received by a handler described in 

§ 1000.9(c) in excess of the quantity 

delivered to pool plants; 

(c) Diverted by a pool plant operator 

to another pool plant. Milk so diverted 

shall be priced at the location of the 

plant to which diverted; or 

(d) Diverted by the operator of a pool 

plant or a cooperative association 

described in § 1000.9(c) to a nonpool 

plant located in the States of California, 

Arizona, Nevada, or Oregon, subject to 

the following conditions: 

(1) Milk of a dairy farmer shall not be 

eligible for diversion unless at least one 

day’s production of such dairy farmer is 

physically received as producer milk at 

a pool plant during the first month the 

dairy farmer is a producer. If a dairy 

farmer loses producer status under the 

order in this part (except as a result of 

a temporary loss of Grade A approval or 

as a result of the handler of the dairy 

farmer’s milk failing to pool the milk 

under any order), the dairy farmer’s 

milk shall not be eligible for diversion 

unless at least one day’s production of 

the dairy farmer has been physically 

received as producer milk at a pool 

plant during the first month the dairy 

farmer is re-associated with the market; 

(2) The quantity of milk diverted by 

a handler described in § 1000.9(c) may 

not exceed 90 percent of the producer 

milk receipts reported by the handler 

pursuant to § 1051.30(c) provided that 

not less than 10 percent of such receipts 

are delivered to plants described in 

§ 1051.7(c)(1)(i) through (iii). These 

percentages are subject to any 

adjustments that may be made pursuant 

to § 1051.7(g); and 

(3) The quantity of milk diverted to 

nonpool plants by the operator of a pool 

plant described in § 1051.7(a), (b) or (d) 

may not exceed 90 percent of the Grade 

A milk received from dairy farmers 

(except dairy farmers described in 

§ 1051.12(b)) including milk diverted 

pursuant to this section. These 

percentages are subject to any 

adjustments that may be made pursuant 

to § 1051.7(g). 

(4) Diverted milk shall be priced at 

the location of the plant to which 

diverted. 

(e) Producer milk shall not include 

milk of a producer that is subject to 

inclusion and participation in a 

marketwide equalization pool under a 

milk classification and pricing program 

imposed under the authority of a State 

government maintaining marketwide 

pooling of returns. 

(f) The quantity of milk reported by a 

handler pursuant to either 

§ 1051.30(a)(1) or (c)(1) for April 

through February may not exceed 125 

percent, and for March may not exceed 

135 percent, of the producer milk 

receipts pooled by the handler during 

the prior month. Milk diverted to 

nonpool plants reported in excess of 

this limit shall be removed from the 

pool. Milk in excess of this limit 

received at pool plants, other than pool 

distributing plants, shall be classified 

pursuant to § 1000.44(a)(3)(v) and (b). 

The handler must designate, by 

producer pick-up, which milk is to be 

removed from the pool. If the handler 

fails to provide this information, the 

market administrator will make the 

determination. The following provisions 

apply: 

(1) Milk shipped to and physically 

received at pool distributing plants in 

excess of the previous month’s pooled 

volume shall not be subject to the 125 

or 135 percent limitation; 

(2) Producer milk qualified pursuant 

to §lllll.13 of any other Federal 

Order and continuously pooled in any 


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Federal Order for the previous six 

months shall not be included in the 

computation of the 125 or 135 percent 

limitation; 

(3) The market administrator may 

waive the 125 or 135 percent limitation: 

(i) For a new handler on the order, 

subject to the provisions of paragraph 

(f)(4) of this section; or 

(ii) For an existing handler with 

significantly changed milk supply 

conditions due to unusual 

circumstances; and 

(4) A bloc of milk may be considered 

ineligible for pooling if the market 

administrator determines that handlers 

altered the reporting of such milk for the 

purpose of evading the provisions of 

this paragraph (f). 

§ 1051.14 Other source milk. 

See § 1000.14. 

§ 1051.15 Fluid milk product. 

See § 1000.15. 

§ 1051.16 Fluid cream product. 

See § 1000.16. 

§ 1051.17 [Reserved] 

§ 1051.18 Cooperative association. 

See § 1000.18. 

§ 1051.19 Commercial food processing 

establishment. 

See § 1000.19. 

Market Administrator, Continuing 

Obligations, and Handler 

Responsibilities 

§ 1051.25 Market administrator. 

See § 1000.25. 

§ 1051.26 Continuity and separability of 

provisions. 

See § 1000.26. 

§ 1051.27 Handler responsibility for 

records and facilities. 

See § 1000.27. 

§ 1051.28 Termination of obligations. 

See § 1000.28. 

Handler Reports 

§ 1051.30 Reports of receipts and 

utilization. 

Each handler shall report monthly so 

that the market administrator’s office 

receives the report on or before the 9th 

day after the end of the month, in the 

detail and on the prescribed forms, as 

follows: 

(a) Each handler that operates a pool 

plant shall report for each of its 

operations the following information: 

(1) Product pounds, pounds of 

butterfat, pounds of protein, and pounds 

of solids-not-fat other than protein 

(other solids) contained in or 

represented by: 

(i) Receipts of producer milk, 

including producer milk diverted by the 

reporting handler, from sources other 

than handlers described in § 1000.9(c); 

and 

(ii) Receipts of milk from handlers 

described in § 1000.9(c); 

(2) Product pounds and pounds of 

butterfat contained in: 

(i) Receipts of fluid milk products and 

bulk fluid cream products from other 

pool plants; 

(ii) Receipts of other source milk; and 

(iii) Inventories at the beginning and 

end of the month of fluid milk products 

and bulk fluid cream products; 

(3) The utilization or disposition of all 

milk and milk products required to be 

reported pursuant to this paragraph (a); 

and 

(4) Such other information with 

respect to the receipts and utilization of 

skim milk, butterfat, milk protein, and 

other nonfat solids as the market 

administrator may prescribe. 

(b) Each handler operating a partially 

regulated distributing plant shall report 

with respect to such plant in the same 

manner as prescribed for reports 

required by paragraph (a) of this section. 

Receipts of milk that would have been 

producer milk if the plant had been 

fully regulated shall be reported in lieu 

of producer milk. The report shall show 

also the quantity of any reconstituted 

skim milk in route disposition in the 

marketing area. 

(c) Each handler described in 

§ 1000.9(c) shall report: 

(1) The product pounds, pounds of 

butterfat, pounds of protein, pounds of 

solids-not-fat other than protein (other 

solids) contained in receipts of milk 

from producers; and 

(2) The utilization or disposition of 

such receipts. 

(d) Each handler not specified in 

paragraphs (a) through (c) of this section 

shall report with respect to its receipts 

and utilization of milk and milk 

products in such manner as the market 

administrator may prescribe. 

§ 1051.31 Payroll reports. 

(a) On or before the 20th day after the 

end of each month, each handler that 

operates a pool plant pursuant to 

§ 1051.7 and each handler described in 

§ 1000.9(c) shall report to the market 

administrator its producer payroll for 

the month, in the detail prescribed by 

the market administrator, showing for 

each producer the information 

described in § 1051.73(f). 

(b) Each handler operating a partially 

regulated distributing plant who elects 

to make payment pursuant to 

§ 1000.76(b) shall report for each dairy 

farmer who would have been a producer 

if the plant had been fully regulated in 

the same manner as prescribed for 

reports required by paragraph (a) of this 

section. 

§ 1051.32 Other reports. 

In addition to the reports required 

pursuant to §§ 1051.30 and 1051.31, 

each handler shall report any 

information the market administrator 

deems necessary to verify or establish 

each handler’s obligation under the 

order. 

Subpart B—Milk Pricing 

Classification of Milk 

§ 1051.40 Classes of utilization. 

See § 1000.40. 

§ 1051.41 [Reserved] 

§ 1051.42 Classification of transfers and 

diversions. 

See § 1000.42. 

§ 1051.43 General classification rules. 

See § 1000.43. 

§ 1051.44 Classification of producer milk. 

See § 1000.44. 

§ 1051.45 Market administrator’s reports 

and announcements concerning 

classification. 

See § 1000.45. 

Class Prices 

§ 1051.50 Class prices, component prices, 

and advanced pricing factors. 

See § 1000.50. 

§ 1051.51 Class I differential and price. 

The Class I differential shall be the 

differential established for Los Angeles 

County, California, which is reported in 

§ 1000.52. The Class I price shall be the 

price computed pursuant to § 1000.50(a) 

for Los Angeles County, California. 

§ 1051.52 Adjusted Class I differentials. 

See § 1000.52. 

§ 1051.53 Announcement of class prices, 

component prices, and advanced pricing 

factors. 

See § 1000.53. 

§ 1051.54 Equivalent price. 

See § 1000.54. 

Producer Price Differential 

§ 1051.60 Handler’s value of milk. 

For the purpose of computing a 

handler’s obligation for producer milk, 

the market administrator shall 

determine for each month the value of 

milk of each handler with respect to 

each of the handler’s pool plants and of 


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each handler described in § 1000.9(c) 

with respect to milk that was not 

received at a pool plant by adding the 

amounts computed in paragraphs (a) 

through (h) of this section and 

subtracting from that total amount the 

values computed in paragraphs (i) and 

(j) of this section. Unless otherwise 

specified, the skim milk, butterfat, and 

the combined pounds of skim milk and 

butterfat referred to in this section shall 

result from the steps set forth in 

§ 1000.44(a), (b), and (c), respectively, 

and the nonfat components of producer 

milk in each class shall be based upon 

the proportion of such components in 

producer skim milk. Receipts of 

nonfluid milk products that are 

distributed as labeled reconstituted milk 

for which payments are made to the 

producer-settlement fund of another 

Federal order under § 1000.76(a)(4) or 

(d) shall be excluded from pricing under 

this section. 

(a) Class I value. (1) Multiply the 

hundredweight of skim milk in Class I 

by the Class I skim milk price; and 

(2) Add an amount obtained by 

multiplying the pounds of butterfat in 

Class I by the Class I butterfat price; and 

(b) Class II value. (1) Multiply the 

pounds of nonfat solids in Class II skim 

milk by the Class II nonfat solids price; 

and 

(2) Add an amount obtained by 

multiplying the pounds of butterfat in 

Class II times the Class II butterfat price. 

(c) Class III value. (1) Multiply the 

pounds of protein in Class III skim milk 

by the protein price; 

(2) Add an amount obtained by 

multiplying the pounds of other solids 

in Class III skim milk by the other solids 

price; and 

(3) Add an amount obtained by 

multiplying the pounds of butterfat in 

Class III by the butterfat price. 

(d) Class IV value. (1) Multiply the 

pounds of nonfat solids in Class IV skim 

milk by the nonfat solids price; and 

(2) Add an amount obtained by 

multiplying the pounds of butterfat in 

Class IV by the butterfat price. 

(e) Classification of overage. Multiply 

the pounds of skim milk and butterfat 

overage assigned to each class pursuant 

to § 1000.44(a)(11) and the 

corresponding step of § 1000.44(b) by 

the skim milk prices and butterfat prices 

applicable to each class. 

(f) Reclassification of inventory. 

Multiply the difference between the 

current month’s Class I, II, or III price, 

as the case may be, and the Class IV 

price for the preceding month and by 

the hundredweight of skim milk and 

butterfat subtracted from Class I, II, or 

III, respectively, pursuant to 

§ 1000.44(a)(7) and the corresponding 

step of § 1000.44(b). 

(g) Class I calculation applicable to 

unregulated milk. Multiply the 

difference between the Class I price 

applicable at the location of the pool 

plant and the Class IV price by the 

hundredweight of skim milk and 

butterfat assigned to Class I pursuant to 

§ 1000.43(d) and the hundredweight of 

skim milk and butterfat subtracted from 

Class I pursuant to § 1000.44(a)(3)(i) 

through (vi) and the corresponding step 

of § 1000.44(b), excluding receipts of 

bulk fluid cream products from plants 

regulated under other Federal orders 

and bulk concentrated fluid milk 

products from pool plants, plants 

regulated under other Federal orders, 

and unregulated supply plants. 

(h) Class I calculation applicable to 

unregulated supply plant milk. Multiply 

the difference between the Class I price 

applicable at the location of the nearest 

unregulated supply plants from which 

an equivalent volume was received and 

the Class III price by the pounds of skim 

milk and butterfat in receipts of 

concentrated fluid milk products 

assigned to Class I pursuant to 

§§ 1000.43(d) and 1000.44(a)(3)(i) and 

the corresponding step of § 1000.44(b) 

and the pounds of skim milk and 

butterfat subtracted from Class I 

pursuant to § 1000.44(a)(8) and the 

corresponding step of § 1000.44(b), 

excluding such skim milk and butterfat 

in receipts of fluid milk products from 

an unregulated supply plant to the 

extent that an equivalent amount of 

skim milk or butterfat disposed of to 

such plant by handlers fully regulated 

under any Federal milk order is 

classified and priced as Class I milk and 

is not used as an offset for any other 

payment obligation under any order. 

(i) Calculation of nonfluid milk 

receipts for reconstitution. For 

reconstituted milk made from receipts 

of nonfluid milk products, multiply 

$1.00 (but not more than the difference 

between the Class I price applicable at 

the location of the pool plant and the 

Class IV price) by the hundredweight of 

skim milk and butterfat contained in 

receipts of nonfluid milk products that 

are allocated to Class I use pursuant to 

§ 1000.43(d). 

§ 1051.61 Computation of producer price 

differential. 

For each month the market 

administrator shall compute a producer 

price differential per hundredweight. 

The report of any handler who has not 

made payments required pursuant to 

§ 1051.71 for the preceding month shall 

not be included in the computation of 

the producer price differential, and such 

handler’s report shall not be included in 

the computation for succeeding months 

until the handler has made full payment 

of outstanding monthly obligations. 

Subject to the conditions of this 

introductory text, the market 

administrator shall compute the 

producer price differential in the 

following manner: 

(a) Combine into one total the values 

computed pursuant to § 1051.60 for all 

handlers required to file reports 

prescribed in § 1051.30; 

(b) Subtract the total values obtained 

by multiplying each handler’s total 

pounds of protein, other solids, and 

butterfat contained in the milk for 

which an obligation was computed 

pursuant to § 1051.60 by the protein 

price, other solids price, and the 

butterfat price, respectively; 

(c) Add an amount equal to the minus 

location adjustments and subtract an 

amount equal to the plus location 

adjustments computed pursuant to 

§ 1051.75; 

(d) Add an amount equal to not less 

than one-half of the unobligated balance 

in the producer-settlement fund; 

(e) Divide the resulting amount by the 

sum of the following for all handlers 

included in these computations: 

(1) The total hundredweight of 

producer milk; and 

(2) The total hundredweight for which 

a value is computed pursuant to 

§ 1051.60(i); and 

(f) Subtract not less than 4 cents nor 

more than 5 cents from the price 

computed pursuant to paragraph (e) of 

this section. The result shall be known 

as the producer price differential for the 

month. 

§ 1051.62 Announcement of producer 

prices. 

On or before the 14th day after the 

end of each month, the market 

administrator shall announce publicly 

the following prices and information: 

(a) The producer price differential; 

(b) The protein price; 

(c) The nonfat solids price; 

(d) The other solids price; 

(e) The butterfat price; 

(f) The average butterfat, nonfat 

solids, protein and other solids content 

of producer milk; and 

(g) The statistical uniform price for 

milk containing 3.5 percent butterfat, 

computed by combining the Class III 

price and the producer price 

differential. 

Subpart C—Payments for Milk 

Producer Payments 

§ 1051.70 Producer-settlement fund. 

See § 1000.70. 


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§ 1051.71 Payments to the producersettlement fund. 

Each handler shall make payment to 

the producer-settlement fund in a 

manner that provides receipt of the 

funds by the market administrator no 

later than the 16th day after the end of 

the month (except as provided in 

§ 1000.90). Payment shall be the 

amount, if any, by which the amount 

specified in paragraph (a) of this section 

exceeds the amount specified in 

paragraph (b) of this section: 

(a) The total value of milk to the 

handler for the month as determined 

pursuant to § 1051.60. 

(b) The sum of: 

(1) An amount obtained by 

multiplying the total hundredweight of 

producer milk as determined pursuant 

to § 1000.44(c) by the producer price 

differential as adjusted pursuant to 

§ 1051.75; 

(2) An amount obtained by 

multiplying the total pounds of protein, 

other solids, and butterfat contained in 

producer milk by the protein, other 

solids, and butterfat prices respectively; 

and 

(3) An amount obtained by 

multiplying the pounds of skim milk 

and butterfat for which a value was 

computed pursuant to § 1051.60(i) by 

the producer price differential as 

adjusted pursuant to § 1051.75 for the 

location of the plant from which 

received. 

§ 1051.72 Payments from the producersettlement fund. 

No later than the 18th day after the 

end of each month (except as provided 

in § 1000.90), the market administrator 

shall pay to each handler the amount, if 

any, by which the amount computed 

pursuant to § 1051.71(b) exceeds the 

amount computed pursuant to 

§ 1051.71(a). If, at such time, the balance 

in the producer-settlement fund is 

insufficient to make all payments 

pursuant to this section, the market 

administrator shall reduce uniformly 

such payments and shall complete the 

payments as soon as the funds are 

available. 

§ 1051.73 Payments to producers and to 

cooperative associations. 

(a) Handler payment responsibility. 

Each handler shall pay each producer 

for producer milk for which payment is 

not made to a cooperative association 

pursuant to paragraph (b) of this section, 

as follows: 

(1) Partial payment. For each 

producer who has not discontinued 

shipments as of the date of this partial 

payment, payment shall be made so that 

it is received by each producer on or 

before the last day of the month (except 

as provided in § 1000.90) for milk 

received during the first 15 days of the 

month from the producer at not less 

than the lowest announced class price 

for the preceding month, less proper 

deductions authorized in writing by the 

producer. 

(2) Final payment. For milk received 

during the month, payment shall be 

made so that it is received by each 

producer no later than the 19th day after 

the end of the month (except as 

provided in § 1000.90) in an amount not 

less than the sum of: 

(i) The hundredweight of producer 

milk received times the producer price 

differential for the month as adjusted 

pursuant to § 1051.75; 

(ii) The pounds of butterfat received 

times the butterfat price for the month; 

(iii) The pounds of protein received 

times the protein price for the month; 

(iv) The pounds of other solids 

received times the other solids price for 

the month; 

(v) Less any payment made pursuant 

to paragraph (a)(1) of this section; 

(vi) Less proper deductions 

authorized in writing by such producer, 

and plus or minus adjustments for 

errors in previous payments to such 

producer subject to approval by the 

market administrator; 

(vii) Less deductions for marketing 

services pursuant to § 1000.86; and 

(viii) Less deductions authorized by 

CDFA for the California Quota Program 

pursuant to § 1051.11. 

(b) Payments for milk received from 

cooperative association members. On or 

before the day prior to the dates 

specified in paragraphs (a)(1) and (2) of 

this section (except as provided in 

§ 1000.90), each handler shall pay to a 

cooperative association for milk from 

producers who market their milk 

through the cooperative association and 

who have authorized the cooperative to 

collect such payments on their behalf an 

amount equal to the sum of the 

individual payments otherwise payable 

for such producer milk pursuant to 

paragraphs (a)(1) and (2) of this section. 

(c) Payment for milk received from 

cooperative association pool plants or 

from cooperatives as handlers pursuant 

to § 1000.9(c). On or before the day prior 

to the dates specified in paragraphs 

(a)(1) and (2) of this section (except as 

provided in § 1000.90), each handler 

who receives fluid milk products at its 

plant from a cooperative association in 

its capacity as the operator of a pool 

plant or who receives milk from a 

cooperative association in its capacity as 

a handler pursuant to § 1000.9(c), 

including the milk of producers who are 

not members of such association and 

who the market administrator 

determines have authorized the 

cooperative association to collect 

payment for their milk, shall pay the 

cooperative for such milk as follows: 

(1) For bulk fluid milk products and 

bulk fluid cream products received from 

a cooperative association in its capacity 

as the operator of a pool plant and for 

milk received from a cooperative 

association in its capacity as a handler 

pursuant to § 1000.9(c) during the first 

15 days of the month, at not less than 

the lowest announced class prices per 

hundredweight for the preceding 

month; 

(2) For the total quantity of bulk fluid 

milk products and bulk fluid cream 

products received from a cooperative 

association in its capacity as the 

operator of a pool plant, at not less than 

the total value of such products received 

from the association’s pool plants, as 

determined by multiplying the 

respective quantities assigned to each 

class under § 1000.44, as follows: 

(i) The hundredweight of Class I skim 

milk times the Class I skim milk price 

for the month plus the pounds of Class 

I butterfat times the Class I butterfat 

price for the month. The Class I price to 

be used shall be that price effective at 

the location of the receiving plant; 

(ii) The pounds of nonfat solids in 

Class II skim milk by the Class II nonfat 

solids price; 

(iii) The pounds of butterfat in Class 

II times the Class II butterfat price; 

(iv) The pounds of nonfat solids in 

Class IV times the nonfat solids price; 

(v) The pounds of butterfat in Class III 

and Class IV milk times the butterfat 

price; 

(vi) The pounds of protein in Class III 

milk times the protein price; 

(vii) The pounds of other solids in 

Class III milk times the other solids 

price; and 

(viii) Add together the amounts 

computed in paragraphs (c)(2)(i) 

through (vii) of this section and from 

that sum deduct any payment made 

pursuant to paragraph (c)(1) of this 

section; and 

(3) For the total quantity of milk 

received during the month from a 

cooperative association in its capacity as 

a handler under § 1000.9(c) as follows: 

(i) The hundredweight of producer 

milk received times the producer price 

differential as adjusted pursuant to 

§ 1051.75; 

(ii) The pounds of butterfat received 

times the butterfat price for the month; 

(iii) The pounds of protein received 

times the protein price for the month; 

(iv) The pounds of other solids 

received times the other solids price for 

the month; and 


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26556 Federal Register / Vol. 83, No. 111 / Friday, June 8, 2018 / Rules and Regulations 

(v) Add together the amounts 

computed in paragraphs (c)(3)(i) 

through (v) of this section and from that 

sum deduct any payment made 

pursuant to paragraph (c)(1) of this 

section. 

(d) Handler underpayment proration. 

If a handler has not received full 

payment from the market administrator 

pursuant to § 1051.72 by the payment 

date specified in paragraph (a), (b), or (c) 

of this section, the handler may reduce 

pro rata its payments to producers or to 

the cooperative association (with 

respect to receipts described in 

paragraph (b) of this section, prorating 

the underpayment to the volume of milk 

received from the cooperative 

association in proportion to the total 

milk received from producers by the 

handler), but not by more than the 

amount of the underpayment. The 

payments shall be completed on the 

next scheduled payment date after 

receipt of the balance due from the 

market administrator. 

(e) Payments to missing or deceased 

producers. If a handler claims that a 

required payment to a producer cannot 

be made because the producer is 

deceased or cannot be located, or 

because the cooperative association or 

its lawful successor or assignee is no 

longer in existence, the payment shall 

be made to the producer-settlement 

fund, and in the event that the handler 

subsequently locates and pays the 

producer or a lawful claimant, or in the 

event that the handler no longer exists 

and a lawful claim is later established, 

the market administrator shall make the 

required payment from the producersettlement fund to the handler or to the 

lawful claimant, as the case may be. 

(f) Producer payment record. In 

making payments to producers pursuant 

to this section, each handler shall 

furnish each producer, except a 

producer whose milk was received from 

a cooperative association handler 

described in § 1000.9(a) or (c), a 

supporting statement in a form that may 

be retained by the recipient which shall 

show: 

(1) The name, address, Grade A 

identifier assigned by a duly constituted 

regulatory agency, and payroll number 

of the producer; 

(2) The daily and total pounds, and 

the month and dates such milk was 

received from that producer; 

(3) The total pounds of butterfat, 

protein, and other solids contained in 

the producer’s milk; 

(4) The minimum rate or rates at 

which payment to the producer is 

required pursuant to the order in this 

part; 

(5) The rate used in making payment 

if the rate is other than the applicable 

minimum rate; 

(6) The amount, or rate per 

hundredweight, or rate per pound of 

component, and the nature of each 

deduction claimed by the handler; and 

(7) The net amount of payment to the 

producer or cooperative association. 

§ 1051.74 [Reserved] 

§ 1051.75 Plant location adjustments for 

producer milk and nonpool milk. 

For purposes of making payments for 

producer milk and nonpool milk, a 

plant location adjustment shall be 

determined by subtracting the Class I 

price specified in § 1051.51 from the 

Class I price at the plant’s location. The 

difference, plus or minus as the case 

may be, shall be used to adjust the 

payments required pursuant to 

§§ 1051.73 and 1000.76. 

§ 1051.76 Payments by a handler 

operating a partially regulated distributing 

plant. 

See § 1000.76. 

§ 1051.77 Adjustment of accounts. 

See § 1000.77. 

§ 1051.78 Charges on overdue accounts. 

See § 1000.78. 

Administrative Assessment and 

Marketing Service Deduction 

§ 1051.85 Assessment for order 

administration. 

On or before the payment receipt date 

specified under § 1051.71, each handler 

shall pay to the market administrator its 

pro rata share of the expense of 

administration of the order at a rate 

specified by the market administrator 

that is no more than 8 cents per 

hundredweight with respect to: 

(a) Receipts of producer milk 

(including the handler’s own 

production) other than such receipts by 

a handler described in § 1000.9(c) that 

were delivered to pool plants of other 

handlers; 

(b) Receipts from a handler described 

in § 1000.9(c); 

(c) Receipts of concentrated fluid milk 

products from unregulated supply 

plants and receipts of nonfluid milk 

products assigned to Class I use 

pursuant to § 1000.43(d) and other 

source milk allocated to Class I pursuant 

to § 1000.44(a)(3) and (8) and the 

corresponding steps of § 1000.44(b), 

except other source milk that is 

excluded from the computations 

pursuant to § 1051.60(h) and (i); and 

(d) Route disposition in the marketing 

area from a partially regulated 

distributing plant that exceeds the skim 

milk and butterfat subtracted pursuant 

to § 1000.76(a)(1)(i) and (ii). 

§ 1051.86 Deduction for marketing 

services. 

See § 1000.86. 

Subpart D—Miscellaneous Provisions 

§ 1051.90 Dates. 

See § 1000.90. 

Dated: June 4, 2018. 

Bruce Summers, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2018–12245 Filed 6–7–18; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2018–0074; Product 

Identifier 2017–NM–148–AD; Amendment 

39–19309; AD 2018–12–05] 

RIN 2120–AA64 

Airworthiness Directives; the Boeing 

Company Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: We are adopting a new 

airworthiness directive (AD) for all The 

Boeing Company Model 737–100, –200, 

–200C, –300, –400, and –500 series 

airplanes. This AD was prompted by 

reports of cracks found in the rear spar 

web and lower chord on the left and 

right wings. This AD requires repetitive 

detailed inspections for cracking of the 

rear spar web and lower chord, and 

applicable on-condition actions. We are 

issuing this AD to address the unsafe 

condition on these products. 

DATES: This AD is effective July 13, 

2018. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of July 13, 2018. 

ADDRESSES: For service information 

identified in this final rule, contact 

Boeing Commercial Airplanes, 

Attention: Contractual & Data Services 

(C&DS), 2600 Westminster Blvd., MC 

110–SK57, Seal Beach, CA 90740–5600; 

telephone 562–797–1717; internet 

https://www.myboeingfleet.com. You 

may view this service information at the 

FAA, Transport Standards Branch, 2200 

South 216th St., Des Moines, WA. For 

information on the availability of this 

material at the FAA, call 206–231–3195. 


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