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PART 1001--MILK IN THE NORTHEAST MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

SEC.

1001.1 General provisions.

DEFINITIONS 

1001.2 Northeast marketing area.

1001.3 Route disposition. 

1001.4 Plant. 

1001.5 Distributing plant. 

1001.6 Supply plant. 

1001.7 Pool plant. 

1001.8 Nonpool plant. 

1001.9 Handler. 

1001.10 Producer-handler.

1001.11 [Reserved] 

1001.12 Producer. 

1001.13 Producer milk. 

1001.14 Other source milk. 

1001.15 Fluid milk product. 

1001.16 Fluid cream product.

1001.17 [Reserved] 

1001.18 Cooperative association. 

1001.19 Commercial food processing establishment.

HANDLER REPORTS

1001.30 Reports of receipts and utilization. 

1001.31 Payroll reports. 

1001.32 Other reports. 

CLASSIFICATION OF MILK

1001.40 Classes of utilization.

1001.41 [Reserved] 

1001.42 Classification of transfers and diversions. 

1001.43 General classification rules. 

1001.44 Classification of producer milk. 

1001.45 Market administrator's reports and announcements

 concerning classification. 

CLASS PRICES 

1001.50 Class prices, component prices, and advanced pricing

 factors. 

1001.51 Class I differential and price. 

1001.52 Adjusted Class I differentials.

1001.53 Announcement of class prices, component prices, and 

 advanced pricing factors. 

1001.54 Equivalent price. 
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PRODUCER PRICE DIFFERENTIAL 

1001.60 Handler's value of milk. 

1001.61 Computation of producer price differential.

1001.62 Announcement of producer prices. 
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PAYMENTS FOR MILK 

1001.70 Producer-settlement fund.

1001.71 Payments to the producer-settlement fund.

1001.72 Payments from the producer-settlement fund.

1001.73 Payments to producers and to cooperative associations.

1001.74 [Reserved]

1001.75 Plant location adjustments for producer milk and nonpool 

 milk.

1001.76 Payments by a handler operating a partially regulated

 distributing plant. 

1001.77 Adjustment of accounts.

1001.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1001.85 Assessment for order administration. 

1001.86 Deduction for marketing services. 

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS 

§ 1001.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1001, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1001.2 Northeast marketing area.

The marketing area means all the 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:

Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey,

Rhode Island, Vermont and District of Columbia

All of the States of Connecticut, Delaware, Massachusetts,

New Hampshire, New Jersey, Rhode Island, Vermont and the District

of Columbia.

Maryland Counties

All of the State of Maryland except the counties of Allegany

and Garrett.

New York Counties, Cities, and Townships

All counties within the State of New York except Allegany,

Cattaraugus, Chatauqua, Erie, Genessee, Livingston, Monroe,

Niagara, Ontario, Orleans, Seneca, Wayne, and Wyoming; the
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townships of Conquest, Montezuma, Sterling and Victory in Cayuga

County; the city of Hornell, and the townships of Avoca, Bath,

Bradford, Canisteo, Cohocton, Dansville, Fremont, Pulteney,

Hartsville, Hornellsville, Howard, Prattsburg, Urbana, Wayland,

Wayne and Wheeler in Steuben County; and the townships of Italy,

Middlesex, and Potter in Yates County.

Pennsylvania Counties

Adams, Bucks, Chester, Cumberland, Dauphin, Delaware,

Franklin, Fulton, Juniata, Lancaster, Lebanon, Montgomery, Perry,

Philadelphia, and York.

Virginia Counties and Cities

Arlington, Fairfax, Loudoun, and Prince William, and the

cities of Alexandria, Fairfax, Falls Church, Manassas, and

Manassas Park.

§ 1001.3 Route disposition.

See § 1000.3.

§ 1001.4 Plant.

(a) Except as provided in paragraph (b) of this section,

plant means the land, buildings, facilities, and equipment

constituting a single operating unit or establishment at which

milk or milk products are received, processed, or packaged,

including a facility described in paragraph (b)(2) of this section

if the facility receives the milk of more than one dairy farmer.

(b) Plant shall not include:

(1) A separate building without stationary storage tanks

that is used only as a reload point for transferring bulk milk

from one tank truck to another or a separate building used only as

a distribution point for storing packaged fluid milk products in

transit for route disposition;

(2) An on-farm facility operated as part of a single dairy

farm entity for the separation of cream and skim milk; or

(3) Bulk reload points where milk is transferred from one

tank truck to another while en route from dairy farmers’ farms to

a plant. If stationary storage tanks are used for transferring

milk at the premises, the operator of the facility shall make an

advance written request to the market administrator that the

facility shall be treated as a reload point. The cooling of milk,

collection of samples, and washing and sanitizing of tank trucks

at the premises shall not disqualify it as a bulk reload point.

§ 1001.5 Distributing plant.

See § 1000.5.

§ 1001.6 Supply plant.

See § 1000.6.

§ 1001.7 Pool plant.
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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 described 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 section

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 ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which fluid milk products are

transferred or diverted to plants described in paragraph (a) or

(b) of this section subject to the additional conditions described

in this paragraph. In the case of a supply plant operated by a

cooperative association handler described in § 1000.9(c), fluid

milk products that the cooperative delivers to pool plants

directly from producers’ farms shall be treated as if transferred

from the cooperative association’s plant for the purpose of

meeting the shipping requirements of this paragraph.

(1) During the months of August and December, such

shipments must equal not less than 10 percent of the total

quantity of milk that is received at the plant or diverted from it

pursuant to § 1001.13 during the month;

(2) During the months of September through November, such

shipments must equal not less than 20 percent of the total

quantity of milk that is received at the plant or diverted from it

pursuant to § 1001.13 during the month;

(3) A plant which meets the shipping requirements of this

paragraph during each of the months of August through December 

shall be a pool plant during the following months of January 

through July unless the milk received at the plant fails to meet

the requirements of a duly constituted regulatory agency, the

plant fails to meet a shipping requirement instituted pursuant to
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paragraph (f) of this section, or the plant operator requests

nonpool status for the plant. The shipping requirement for any

plant which has not met the requirements of paragraphs (c)(1) and

(c)(2) of this section must equal not less than 10 percent of the

total quantity of milk that is received at the plant or diverted

from it pursuant to § 1001.13 during each of the months of January

through July in order for the plant to be a pool plant in each of

those months; 

(4) If milk is delivered directly from producers’ farms

that are located outside of the states included in the marketing

area or outside Maine or West Virginia, such producers must be

grouped by state into reporting units and each reporting unit must

independently meet the shipping requirements of this paragraph;

and

(5) 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

percentages in paragraphs (c)(1) and (2) of this section. 

(d) [Reserved]

(e) Two or more plants that are located in the marketing

area and operated by the same handler may qualify as a unit by

meeting the total and in-area route distribution requirements

specified in paragraph (a) of this section subject to the

following additional requirements:

(1) At least one of the plants in the unit qualifies as a

pool plant pursuant to paragraph (a) of this section;

(2) Other plants in the unit must process only Class I or

Class II products and must be located in a pricing zone providing

the same or a lower Class I price than the price applicable at the

distributing plant included in the unit; and

(3) A written request to form a unit, or to add or remove

plants from a unit, or to cancel a unit, must be filed with the

market administrator prior to the first day of the month for which

unit formation is to be effective.

(f) Two or more supply plants operated by the same handler,

or by one or more cooperative associations, may qualify for

pooling as a system of plants by meeting the applicable percentage

requirements of paragraph (c) of this section in the same manner

as a single plant subject to the following additional

requirements:

(1) A supply plant system will be effective for the period

of August 1 through July 31 of the following year. Written

notification must be given to the market administrator listing the

plants to be included in the system prior to the first day of July

preceding the effective date of the system. The plants included
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in the system shall be listed in the sequence in which they shall

qualify for pool plant status based on the minimum deliveries

required. If the deliveries made are insufficient to qualify the

entire system for pooling, the last listed plant shall be excluded

from the system, followed by the plant next-to-last on the list,

and continuing in this sequence until remaining listed plants have

met the minimum shipping requirements; and

(2) 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 plant subsequently fails to qualify

for pooling, the handler submits a written notification to the

market administrator prior to the first day of the month that the

plant be deleted from the system, or that the system be

discontinued. Any plant that has been so deleted from the system,

or that has failed to qualify as a pool plant in any month, will

not be part of the system for the remaining months through July. 

For any system that qualifies in August, no plant may be added in

any subsequent month through the following July unless the plant

replaces another plant in the system that has ceased operations

and the market administrator is notified of such replacement prior

to the first day of the month for which it is to be effective.

(g) The applicable shipping percentages of paragraphs (c) 

and (f) of this section may be increased or decreased 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

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 plant;

(2) An exempt plant as defined in § 1000.8(e);

(3) A plant qualified pursuant to paragraph (a) of this

section that is located within the marketing area if the plant

also meets the pooling requirements of another Federal order and
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more than 50 percent of its route distribution has been in such

other Federal order marketing area for 3 consecutive months;

(4) A plant qualified pursuant to paragraph (a) of this

section which is not located within any Federal order marketing

area 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 qualified pursuant to paragraph (a) of this

section that is located in another Federal order marketing area if

the plant meets the pooling requirements of such other Federal

order and does not have a majority of its route distribution 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 this order, or the plant has automatic

pooling status under the other Federal order; and

(7) That portion of a pool 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 be requested in writing by

the handler and must be approved by the market administrator.

§ 1001.8 Nonpool plant.

See § 1000.8.

§ 1001.9 Handler.

See § 1000.9.

§ 1001.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is monthly route disposition in the marketing area

during the month;

(b) Receives milk solely from own farm production or

receives milk that is fully subject to the pricing and pooling

provisions of this or any other Federal order;

(c) Receives at its plant or acquires for route disposition

no more than 150,000 pounds of fluid milk products from handlers

fully regulated under any Federal order. This limitation shall

not apply if the producer-handler’s own farm production is less

than 150,000 pounds during the month;
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(d) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products; and

(e) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)

and the processing and packaging operations are the producerhandler’s own enterprise and at its own risk.

§ 1001.11 [Reserved]

§ 1001.12 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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1001.13; or

(2) Received by a handler described in § 1000.9(c).

(b) Producer shall not include a dairy farmer described in

paragraphs (b)(1) through (6) of this section. A dairy farmer

described in paragraphs (b)(5) or (6) of this section shall be

known as a dairy farmer for other markets.

(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 § 1001.13(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;

(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;

(5) For any month of December through June, any dairy

farmer whose milk is received at a pool plant or by a cooperative

association handler described in § 1000.9(c) if the pool plant

operator or the cooperative association caused milk from the same

farm to be delivered to any plant as other than producer milk, as

defined under this order or any other Federal milk order, during

the same month, either of the 2 preceding months, or during any of

the preceding months of July through November; and

(6) For any month of July through November, any dairy

farmer whose milk is received at a pool plant or by a cooperative
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association handler described in § 1000.9(c) if the pool plant

operator or the cooperative association caused milk from the same

farm to be delivered to any plant as other than producer milk, as

defined under this order or any other Federal milk order, during

the same month. 

§ 1001.13 Producer milk.

Producer milk means the skim milk (or the skim equivalent of

components of skim milk) and butterfat contained in milk of a

producer that is:

(a) Received by the operator of a pool plant directly from

a producer or from a handler described in § 1000.9(c). Any milk

which is picked up from the producer’s farm in a tank truck under

the control of the operator of a pool plant or a handler described

in § 1000.9(c) but which is not received at a plant until the

following month shall be considered as having been received by the

handler during the month in which it is picked up at the farm. 

All milk received pursuant to this paragraph shall be priced at

the location of the plant where it is first physically received;

(b) Received by the operator of a pool plant or a handler

described in § 1000.9(c) in excess of the quantity delivered to

pool plants subject to the following conditions:

(1) The producers whose farms are outside of the states

included in the marketing area and outside the states of Maine or

West Virginia shall be organized into state units and each such

unit shall be reported separately; and

(2) For pooling purposes, each reporting unit must satisfy

the shipping standards specified for a supply plant pursuant to

§ 1001.7(c); 

(c) Diverted by a proprietary 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 by a

handler described in § 1000.9(c) to a nonpool plant, subject to

the following conditions:

(1) Milk of a dairy farmer shall not be eligible for

diversion unless milk of such dairy farmer was physically received

as producer milk at a pool plant and the dairy farmer has

continuously retained producer status since that time. If a dairy

farmer loses producer status under this order (except as a result

of a temporary loss of Grade A approval), the dairy farmer’s milk

shall not be eligible for diversion until milk of the dairy farmer

has been physically received as producer milk at a pool plant; and

(2) Diverted milk shall be priced at the location of the

plant to which diverted.

§ 1001.14 Other source milk.
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See § 1000.14.

§ 1001.15 Fluid milk product.

See § 1000.15.

§ 1001.16 Fluid cream product.

See § 1000.16.

§ 1001.17 [Reserved] 

§ 1001.18 Cooperative association.

See § 1000.18.

§ 1001.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1001.30 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 prescribed forms,

as follows:

(a) Each pool plant operator shall report for each of its

operations the following information:

(1) Product pounds, pounds of butterfat, pounds of protein,

and pounds of nonfat solids 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; 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.
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(c) Each handler described in § 1000.9(c) shall report:

(1) The product pounds, pounds of butterfat, pounds of

protein, and the 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 paragraph (a) or (b) 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.

§ 1001.31 Payroll reports.

(a) On or before the 22nd day after the end of each month,

each handler that operates a pool plant pursuant to § 1001.7 and

each handler described in § 1000.9(c) shall report to the market

administrator its producer payroll for the month, in detail

prescribed by the market administrator, showing for each producer

the information specified in § 1001.73(e).

(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.

§ 1001.32 Other reports.

In addition to the reports required pursuant to §§ 1001.30

and 1001.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1001.40 Classes of utilization.

See § 1000.40.

§ 1001.41 [Reserved]

§ 1001.42 Classification of transfers and diversions.

See § 1000.42.

§ 1001.43 General classification rules.

See § 1000.43.

§ 1001.44 Classification of producer milk.

See § 1000.44.

§ 1001.45 Market administrator’s reports and announcements

concerning classification. 

See § 1000.45.

CLASS PRICES

§ 1001.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.
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§ 1001.51 Class I differential and price.

The Class I differential shall be the differential

established for Suffolk County, Massachusetts, which is reported

in § 1000.52. The Class I price shall be the price computed

pursuant to § 1000.50(a) for Suffolk County, Massachusetts.

§ 1001.52 Adjusted Class I differentials.

See § 1000.52.

§ 1001.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1001.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1001.60 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 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 value

computed in paragraph (i) 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 pounds 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.

(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;
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(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) 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) 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 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) 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

a plant 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) 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.
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(i) 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).

§ 1001.61 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 § 1001.71

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 aforementioned conditions, the market

administrator shall compute the producer price differential in the

following manner:

(a) Combine into one total the values computed pursuant to §

1001.60 for all handlers required to file reports prescribed in §

1001.30;

(b) Subtract the total of the 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 § 1001.60 by the protein price, other solids

price, and the butterfat price, respectively;

(c) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1001.75;

(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 § 1001.60(h); 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, rounded to the nearest cent, shall be known as the

producer price differential for the month.

§ 1001.62 Announcement of producer prices.

On or before the 13th day after the end of the month, the

market administrator shall announce the following prices and

information:

(a) The producer price differential;

(b) The protein price;

(c) The nonfat solids price;
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(d) The other solids price;

(e) The butterfat price;

(f) The average butterfat, protein, nonfat solids, 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.

PAYMENTS FOR MILK

§ 1001.70 Producer-settlement fund.

See § 1000.70.

§ 1001.71 Payments to the producer-settlement 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 15th 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 § 1001.60.

(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 § 1001.75;

(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

§ 1001.60(h) by the producer price differential as adjusted

pursuant to § 1001.75 for the location of the plant from which

received. 

§ 1001.72 Payments from the producer-settlement fund.

No later than the 16th 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 § 1001.71(b) exceeds the amount computed

pursuant to § 1001.71(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.

§ 1001.73 Payments to producers and to cooperative associations.
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(a) Each pool plant operator that is not paying a

cooperative association for producer milk shall pay each producer

as follows:

(1) Partial payment. For each producer who has not

discontinued shipments as of the 23rd day of the month, payment

shall be made so that it is received by the producer on or before

the 26th day of the month (except as provided in § 1000.90) for

milk received during the first 15 days of the month 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 day after the payment date required in § 1001.72 in

an amount computed as follows:

(i) Multiply the hundredweight of producer milk received by

the producer price differential for the month as adjusted pursuant

to § 1001.75;

(ii) Multiply the pounds of butterfat received by the

butterfat price for the month;

(iii) Multiply the pounds of protein received by the protein

price for the month;

(iv) Multiply the pounds of other solids received by the

other solids price for the month; and

(v) Add the amounts computed in paragraphs (a)(2)(i) through

(iv) of this section, and from that sum:

(A) Subtract the partial payment made pursuant to paragraph

(a)(1) of this section;

(B) Subtract the deduction for marketing services pursuant

to § 1000.86;

(C) Add or subtract for errors made in previous payments to

the producer; and

(D) Subtract proper deductions authorized in writing by the

producer. 

(b) One day before partial and final payments are due

pursuant to paragraph (a) of this section, each pool plant

operator shall pay a cooperative association for milk received as

follows:

(1) Partial payment to a cooperative association for bulk

milk received directly from producers’ farms. For bulk milk

(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) received during the first 15 days of the month from a

cooperative association in any capacity, except as the operator of

a pool plant, the payment shall be equal to the hundredweight of
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milk received multiplied by the lowest announced class price for

the preceding month.

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk milk/skimmed milk

products received during the first 15 days of the month from a

cooperative association in its capacity as the operator of a pool

plant, the partial payment shall be at the pool plant operator’s

estimated use value of the milk using the most recent class prices

available at the receiving plant’s location. 

(3) Final payment to a cooperative association for milk

transferred from its pool plant. Following the classification of

bulk fluid milk products and bulk fluid cream products received

during the month from a cooperative association in its capacity as

the operator of a pool plant, the final payment for such receipts

shall be determined as follows:

(i) Multiply the hundredweight of Class I skim milk by the

Class I skim milk price for the month at the receiving plant;

(ii) Multiply the pounds of Class I butterfat by the Class I

butterfat price for the month at the receiving plant;

(iii) Multiply the pounds of nonfat solids in Class II skim

milk by the Class II nonfat solids price;

(iv) Multiply the pounds of butterfat in Class II times the

Class II butterfat price;

(v) Multiply the pounds of nonfat solids in Class IV milk by

the nonfat solids price for the month;

(vi) Multiply the pounds of butterfat in Class III and IV

milk by the butterfat price for the month;

(vii) Multiply the pounds of protein in Class III milk by

the protein price for the month;

(viii) Multiply the pounds of other solids in Class III milk

by the other solids price for the month; and

(ix) Add together the amounts computed in paragraphs

(b)(3)(i) through (viii) of this section and from that sum deduct

any payment made pursuant to paragraph (b)(2) of this section. 

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, 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, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section. 

(c) If a handler has not received full payment from the

market administrator pursuant to § 1001.72 by the payment date
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specified in paragraph (a) or (b) of this section, the handler may

reduce payments pursuant to paragraphs (a) and (b) of this

section, but by not 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.

(d) 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 producer- settlement fund to

the handler or to the lawful claimant as the case may be.

(e) In making payments to producers pursuant to this

section, each pool plant operator 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 such form that it may be retained by the recipient

which shall show:

(1) The name, address, Grade A identifier assigned by a duly

constituted regulatory agency, and the payroll number of the

producer;

(2) The month and dates that milk was received from the

producer, including the daily and total pounds of milk received;

(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 this order;

(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.

§ 1001.74 [Reserved]

§ 1001.75 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 § 1001.51 from the

Class I price at the plant’s location. The difference, plus or
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minus as the case may be, shall be used to adjust the payments

required pursuant to §§ 1001.73 and 1000.76. 

§ 1001.76 Payments by a handler operating a partially regulated

 distributing plant.

See § 1000.76.

§ 1001.77 Adjustment of accounts.

See § 1000.77.

§ 1001.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1001.85 Assessment for order administration.

See § 1000.85.

§ 1001.86 Deduction for marketing services.

See § 1000.86. 
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PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

Sec.

1005.1 General provisions.

DEFINITIONS 

1005.2 Appalachian marketing area.

1005.3 Route disposition. 

1005.4 Plant. 

1005.5 Distributing plant. 

1005.6 Supply plant. 

1005.7 Pool plant. 

1005.8 Nonpool plant. 

1005.9 Handler. 

1005.10 Producer-handler.

1005.11 [Reserved] 

1005.12 Producer. 

1005.13 Producer milk. 

1005.14 Other source milk. 

1005.15 Fluid milk product. 

1005.16 Fluid cream product.

1005.17 [Reserved] 

1005.18 Cooperative association. 

1005.19 Commercial food processing establishment.

HANDLER REPORTS

1005.30 Reports of receipts and utilization. 

1005.31 Payroll reports. 

1005.32 Other reports. 

CLASSIFICATION OF MILK

1005.40 Classes of utilization.

1005.41 [Reserved] 

1005.42 Classification of transfers and diversions. 

1005.43 General classification rules. 

1005.44 Classification of producer milk. 

1005.45 Market administrator's reports and announcements 

 concerning classification. 

CLASS PRICES 

1005.50 Class prices, component prices, and advanced pricing

 factors.

1005.51 Class I differential and price. 

1005.52 Adjusted Class I differentials. 

1005.53 Announcement of class prices, component prices, and

 advanced pricing factors. 

1005.54 Equivalent price. 
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UNIFORM PRICES 

1005.60 Handler's value of milk. 

1005.61 Computation of uniform prices.

1005.62 Announcement of uniform prices. 
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PAYMENTS FOR MILK 

1005.70 Producer-settlement fund.

1005.71 Payments to the producer-settlement fund.

1005.72 Payments from the producer-settlement fund.

1005.73 Payments to producers and to cooperative associations.

1005.74 [Reserved]

1005.75 Plant location adjustments for producer milk and 

 nonpool milk.

1005.76 Payments by a handler operating a partially regulated 

 distributing plant. 

1005.77 Adjustment of accounts.

1005.78 Charges on overdue accounts.

MARKETWIDE SERVICE PAYMENTS

1005.80 Transportation credit balancing fund.

1005.81 Payments to the transportation credit balancing fund.

1005.82 Payments from the transportation credit balancing

 fund.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1005.85 Assessment for order administration. 

1005.86 Deduction for marketing services. 

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS 

§ 1005.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1005, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1005.2 Appalachian marketing area.

The marketing area means all the 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:

Georgia Counties

Catoosa, Chattooga, Dade, Fannin, Murray, Walker, and

Whitfield.

Indiana Counties

Clark, Crawford, Daviess, Dubois, Floyd, Gibson, Greene,

Harrison, Knox, Martin, Orange, Perry, Pike, Posey, Scott,

Spencer, Sullivan, Vanderburgh, Warrick, and Washington. 
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Kentucky Counties

Adair, Anderson, Bath, Bell, Bourbon, Boyle, Breathitt,

Breckinridge, Bullitt, Butler, Carroll, Carter, Casey, Clark,

Clay, Clinton, Cumberland, Daviess, Edmonson, Elliott, Estill,

Fayette, Fleming, Franklin, Gallatin, Garrard, Grayson, Green,

Hancock, Hardin, Harlan, Hart, Henderson, Henry, Hopkins, Jackson,

Jefferson, Jessamine, Knott, Knox, Larue, Laurel, Lee, Leslie,

Letcher, Lincoln, Madison, Marion, McCreary, McLean, Meade,

Menifee, Mercer, Montgomery, Morgan, Muhlenberg, Nelson, Nicholas,

Ohio, Oldham, Owen, Owsley, Perry, Powell, Pulaski, Rockcastle,

Rowan, Russell, Scott, Shelby, Spencer, Taylor, Trimble, Union,

Washington, Wayne, Webster, Whitley, Wolfe, and Woodford.

North Carolina and South Carolina

All of the States of North Carolina and South Carolina.

Tennessee Counties

Anderson, Blount, Bradley, Campbell, Carter, Claiborne,

Cocke, Cumberland, Grainger, Greene, Hamblen, Hamilton, Hancock,

Hawkins, Jefferson, Johnson, Knox, Loudon, Marion, McMinn, Meigs,

Monroe, Morgan, Polk, Rhea, Roane, Scott, Sequatchie, Sevier,

Sullivan, Unicoi, Union, and Washington. 

Virginia Counties and Cities

Buchanan, Dickenson, Lee, Russell, Scott, Tazewell,

Washington, and Wise; and the cities of Bristol and Norton. 

West Virginia Counties

McDowell and Mercer. 

§ 1005.3 Route disposition.

See § 1000.3.

§ 1005.4 Plant.

See § 1000.4.

§ 1005.5 Distributing plant.

See § 1000.5.

§ 1005.6 Supply plant.

See § 1000.6.

§ 1005.7 Pool plant.

Pool plant means a plant specified in paragraphs (a) through

(d) of this section, or a unit of plants as specified in paragraph

(e) of this section, but excluding a plant specified in paragraph

(g) of this section. The pooling standards described in

paragraphs (c) and (d) of this section are subject to modification

pursuant to paragraph (f) of this section:

(a) A distributing plant, other than a plant qualified as a

pool plant pursuant to paragraph (b) of this section or section

7(b) of any other Federal milk order, from which during the month

50 percent or more of the fluid milk products received at such

plant (excluding concentrated milk received from another plant by
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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 50 percent of the total

quantity of fluid milk products received at the plant (excluding

concentrated milk received from another plant by agreement for

other than Class I use) into ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which 50 percent or more of the

total quantity of milk that is received during the month from

dairy farmers and handlers described in § 1000.9(c), including

milk that is diverted from the plant, is transferred to pool

distributing plants. 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 plant’s shipping percentage.

(d) A plant located within the marketing area or in the

State of Virginia that is operated by a cooperative association if

pool plant status under this paragraph is requested for such plant

by the cooperative association and during the month at least 60

percent of the producer milk of members of such cooperative

association is delivered directly from farms to pool distributing

plants or is transferred to such plants as a fluid milk product

(excluding concentrated milk transferred to a distributing plant

for an agreed-upon use other than Class I) from the cooperative's

plant.

(e) Two or more plants operated by the same handler and

that are located within the marketing area may qualify for pool

status as a unit by meeting the total and in-area route

disposition requirements specified in paragraph (a) of this

section and the following additional requirements:

(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 only Class I or

Class II products and must be located in a pricing zone providing

the same or a lower Class I price than the price applicable at the

distributing plant included in the unit pursuant to paragraph

(e)(1) of this section; and

(3) A written request to form a unit, or to add or remove

plants from a unit, must be filed with the market administrator

prior to the first day of the month for which it is to be

effective.
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(f) The applicable shipping percentages of paragraphs (c) 

and (d) of this section may be increased or decreased 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 date 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

percentage must be issued in writing at least one day before the

effective date.

(g) The term pool plant shall not apply to the following

plants:

(1) A producer-handler plant;

(2) An exempt plant as defined in § 1000.8(e);

(3) A plant qualified pursuant to paragraph (a) of this

section which is not located within any Federal order marketing

area, meets the pooling requirements of another Federal order, and

has had greater route disposition in such other Federal order

marketing area for 3 consecutive months;

(4) A plant qualified pursuant to paragraph (a) of this

section which is located in another Federal order marketing area,

meets the pooling standards of the other Federal order, and has

not had a majority of its route disposition in this marketing area

for 3 consecutive months or is locked into pool status under such

other Federal order without regard to its route disposition in any

other Federal order marketing area;

(5) 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 such other order than are made to plants

regulated under this order, or such plant has automatic pooling

status under such other order; and

(6) That portion of a pool 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 be requested in writing by

the handler and must be approved by the market administrator.

§ 1005.8 Nonpool plant.

See § 1000.8.
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§ 1005.9 Handler.

See § 1000.9.

§ 1005.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is monthly route disposition in the marketing area; 

(b) Receives no fluid milk products, and acquires no fluid

milk products for route disposition, from sources other than own

farm production;

(c) Disposes of no other source milk as Class I milk 

except by increasing the nonfat milk solids content of the fluid

milk products received from own farm production;

and 

(d) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled, and the

processing and packaging operations are the producer-handler’s own

enterprise and are operated at the producer-handler’s own risk.

§ 1005.11 [Reserved]
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§ 1005.12 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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1005.13; 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 § 1005.13(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 order with respect to that

portion of the milk so diverted that is assigned to Class I under

the provisions of such other order.

§ 1005.13 Producer milk.

Producer milk means the skim milk (or the skim equivalent of

components of skim milk) and butterfat contained 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 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 handler

described in § 1000.9(c) to a nonpool plant, subject to the

following conditions:

(1) In any month of July through December, not less than 6

days' production of the producer whose milk is diverted is

physically received at a pool plant during the month;

(2) In any month of January through June, not less than 2

days' production of the producer whose milk is diverted is

physically received at a pool plant during the month;
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(3) The total quantity of milk so diverted during the month

by a cooperative association shall not exceed 25 percent during

the months of July through November, January, and February, and 40

percent during the months of December and March through June, of

the producer milk that the cooperative association caused to be

delivered to, and physically received at, pool plants during the

month;

(4) The operator of a pool plant that is not a cooperative

association may divert any milk that is not under the control of a

cooperative association that diverts milk during the month

pursuant to paragraph (d) of this section. The total quantity of

milk so diverted during the month shall not exceed 25 percent

during the months of July through November, January, and February,

and 40 percent during the months of December and March through

June, of the producer milk physically received at such plant (or

such unit of plants in the case of plants that pool as a unit

pursuant to § 1005.7(d)) during the month, excluding the quantity

of producer milk received from a handler described in § 1000.9(c);

(5) Any milk diverted in excess of the limits prescribed in

paragraphs (d)(3) and (4) of this section shall not be producer

milk. If the diverting handler or cooperative association fails

to designate the dairy farmers’ deliveries that will not be

producer milk, no milk diverted by the handler or cooperative

association shall be producer milk;

(6) Diverted milk shall be priced at the location of the

plant to which diverted; and

(7) The delivery day requirements and the diversion

percentages in paragraphs (d)(1) through (4) of this section may

be increased or decreased by the market administrator if the

market administrator finds that such revision is necessary to

assure orderly marketing and efficient handling of milk in the

marketing area. Before making such a finding, the market

administrator shall investigate the need for the revision either

on the market administrator’s own initiative or at the request of

interested persons. If the investigation shows that a revision

might be appropriate, the market administrator shall issue a

notice stating that the revision is being considered and inviting

written data, views, and arguments. Any decision to revise an

applicable percentage must be issued in writing at least one day

before the effective date. 

§ 1005.14 Other source milk.

See § 1000.14.

§ 1005.15 Fluid milk product

See § 1000.15.

§ 1005.16 Fluid cream product.
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See § 1000.16.

§ 1005.17 [Reserved]

§ 1005.18 Cooperative association.

See § 1000.18.

§ 1005.19 Commercial food processing establishment.

See § 1000.19.
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HANDLER REPORTS

§ 1005.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 7th day

after the end of the month, in the detail and on prescribed forms,

as follows:

(a) With respect to each of its pool plants, the quantities

of skim milk and butterfat contained in or represented by:

(1) Receipts of producer milk, including producer milk

diverted by the reporting handler, from sources other than

handlers described in § 1000.9(c);

(2) Receipts of milk from handlers described in

§ 1000.9(c);

(3) Receipts of fluid milk products and bulk fluid cream

products from other pool plants;

(4) Receipts of other source milk;

(5) Receipts of bulk milk from a plant regulated under

another Federal order, except Federal Order 1007, for which a

transportation credit is requested pursuant to § 1005.82;

(6) Receipts of producer milk described in § 1005.82(c)(2),

including the identity of the individual producers whose milk is

eligible for the transportation credit pursuant to that paragraph

and the date that such milk was received;

(7) For handlers submitting transportation credit requests,

transfers of bulk milk to nonpool plants, including the dates that

such milk was transferred;

(8) Inventories at the beginning and end of the month of

fluid milk products and bulk fluid cream products; and

(9) The utilization or disposition of all milk and milk

products required to be reported pursuant to this paragraph.

(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 quantities of all skim milk and butterfat contained

in receipts of milk from producers;

(2) The utilization or disposition of all such receipts;

and

(3) With respect to milk for which a cooperative

association is requesting a transportation credit pursuant to
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§ 1005.82, all of the information required in paragraphs (a)(5),

(a)(6), and (a)(7) of this section. 

(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.

§ 1005.31 Payroll reports.

(a) On or before the 20th day after the end of each month,

each handler that operates a pool plant pursuant to § 1005.7 and

each handler described in § 1000.9(c) shall report to the market

administrator its producer payroll for the month, in detail

prescribed by the market administrator, showing for each producer

the information specified in § 1005.73(e).

(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.

§ 1005.32 Other reports.

(a) On or before the 20th day after the end of each month,

each handler described in § 1000.9(a) and (c) shall report to the

market administrator any adjustments to transportation credit

requests as reported pursuant to § 1005.30(a)(5), (6), and (7).

(b) In addition to the reports required pursuant to

§§ 1005.30, 1005.31, and 1005.32(a), each handler shall report any

information the market administrator deems necessary to verify or

establish each handler’s obligation under the order. 

CLASSIFICATION OF MILK

§ 1005.40 Classes of utilization.

See § 1000.40.

§ 1005.41 [Reserved]

§ 1005.42 Classification of transfers and diversions.

See § 1000.42.

§ 1005.43 General classification rules.

See § 1000.43.

§ 1005.44 Classification of producer milk.

See § 1000.44.

§ 1005.45 Market administrator’s reports and announcements

concerning classification. 

See § 1000.45.

CLASS PRICES

§ 1005.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.
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§ 1005.51 Class I differential and price.

The Class I differential shall be the differential

established for Mecklenburg County, North Carolina, which is

reported in § 1000.52. The Class I price shall be the price

computed pursuant to § 1000.50(a) for Mecklenburg County, North

Carolina.

§ 1005.52 Adjusted Class I differentials.

See § 1000.52.

§ 1005.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1005.54 Equivalent price.

See § 1000.54.

UNIFORM PRICES

§ 1005.60 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 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 (e)

of this section and subtracting from that total amount the value

computed in paragraph (f) of this section. 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) Multiply the pounds of skim milk and butterfat in

producer milk that were classified in each class pursuant to 

§ 1000.44(c) by the applicable skim milk and butterfat prices, and

add the resulting amounts;

(b) Multiply the pounds of skim milk and butterfat overage

assigned to each class pursuant to § 1000.44(a)(11) by the

respective skim milk and butterfat prices applicable at the

location of the pool plant;

(c) Multiply the difference between the Class IV price for

the preceding month and the current month’s Class I, II, or III

price, as the case may be, 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);

(d) 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
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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

a plant regulated under other Federal orders and bulk concentrated

fluid milk products from pool plants, plants regulated under other

Federal orders, and unregulated supply plants;

(e) Multiply the Class I price applicable at the location of

the nearest unregulated supply plants from which an equivalent

volume was received 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 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; and

(f) 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).

§ 1005.61 Computation of uniform prices.

On or before the 11th day of each month, the market

administrator shall compute a uniform butterfat price, a uniform

skim milk price, and a uniform price for producer milk receipts

reported for the prior month. The report of any handler who has

not made payments required pursuant to § 1005.71 for the preceding

month shall not be included in the computation of these prices,

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. 

(a) Uniform butterfat price. The uniform butterfat price

per pound, rounded to the nearest one-hundredth cent, shall be

computed by multiplying the pounds of butterfat in producer milk

allocated to each class pursuant to § 1000.44(b) by the respective

class butterfat prices and dividing the sum of such values by the

total pounds of such butterfat.

(b) Uniform skim milk price. The uniform skim milk price

per hundredweight, rounded to the nearest cent, shall be computed

as follows:
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(1) Combine into one total the values computed pursuant to §

1005.60 for all handlers;

(2) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1005.75;

(3) Add an amount equal to not less than one-half of the

unobligated balance in the producer-settlement fund;

(4) Subtract the value of the total pounds of butterfat for

all handlers. The butterfat value shall be computed by

multiplying the pounds of butterfat by the butterfat price

computed in paragraph (a) of this section;

(5) Divide the resulting amount by the sum of the following

for all handlers included in these computations:

(i) The total skim pounds of producer milk; and

(ii) The total skim pounds for which a value is computed

pursuant to § 1005.60(e); and 

(6) Subtract not less than 4 cents and not more than 5

cents.

(c) Uniform price. The uniform price per hundredweight,

rounded to the nearest cent, shall be the sum of the following:

(1) Multiply the uniform butterfat price for the month

pursuant to paragraph (a) of this section times 3.5 pounds of

butterfat; and

(2) Multiply the uniform skim milk price for the month

pursuant to paragraph (b) of this section times 96.5 pounds of

skim milk.

§ 1005.62 Announcement of uniform prices.

On or before the 11th day after the end of the month, the

market administrator shall announce the uniform prices for the

month computed pursuant to § 1005.61.

§ 1005.62 Announcement of uniform price, uniform butterfat price

and uniform skim milk price.

On or before the 11th day after the end of the month, the

market administrator shall announce the following prices and

information:

(a) The uniform price pursuant to § 1005.61 for such month;

(b) The uniform butterfat price pursuant to § 1005.61(b) for

such month; and

(c) The uniform skim milk price pursuant to § 1005.61(c) for

such month.

PAYMENTS FOR MILK

§ 1005.70 Producer-settlement fund.

See § 1000.70.

§ 1005.71 Payments to the producer-settlement fund.

Each handler shall make a payment to the producer-settlement

fund in a manner that provides receipt of the funds by the market
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administrator no later than the 12th 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 of the handler for the month as

determined pursuant to § 1005.60; and

(b) The sum of the value at the uniform prices for skim milk

and butterfat, adjusted for plant location, of the handler’s

receipts of producer milk; and the value at the uniform price, as

adjusted pursuant to § 1005.75, applicable at the location of the

plant from which received of other source milk for which a value

is computed pursuant to § 1005.60(e).

§ 1005.72 Payments from the producer-settlement fund.

No later than one day after the date of payment receipt

required under § 1005.71, the market administrator shall pay to

each handler the amount, if any, by which the amount computed

pursuant to § 1005.71(b) exceeds the amount computed pursuant to

§ 1005.71(a). If, at such time, the balance in the producersettlement 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.
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§ 1005.73 Payments to producers and to cooperative associations.

(a) Each pool plant operator that is not paying a

cooperative association for producer milk shall pay each producer

as follows:

(1) Partial payment. For each producer who has not

discontinued shipments as of the 23rd day of the month, payment

shall be made so that it is received by the producer on or before

the 26th day of the month (except as provided in § 1000.90) for

milk received during the first 15 days of the month at not less

than 90 percent of the preceding month’s uniform price, adjusted

for plant location pursuant to § 1005.75 and proper deductions

authorized in writing by the producer. 

(2) Final payment. For milk received during the month, a

payment computed as follows shall be made so that it is received

by each producer one day after the payment date required in

§ 1005.72:

(i) Multiply the hundredweight of producer skim milk

received times the uniform skim milk price for the month;

(ii) Multiply the pounds of butterfat received times the

uniform butterfat price for the month;

(iii) Multiply the hundredweight of producer milk received

times the plant location adjustment pursuant to § 1005.75; and

(iv) Add the amounts computed in paragraph (a)(2)(i), (ii),

and (iii) of this section, and from that sum:

(A) Subtract the partial payment made pursuant to paragraph

(a)(1) of this section;

(B) Subtract the deduction for marketing services pursuant

to § 1000.86;

(C) Add or subtract for errors made in previous payments to

the producer; and

(D) Subtract proper deductions authorized in writing by the

producer. 

(b) One day before partial and final payments are due

pursuant to paragraph (a) of this section, each pool plant

operator shall pay a cooperative association for milk received as

follows:

(1) Partial payment to a cooperative association for bulk

milk received directly from producers’ farms. For bulk milk

(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) received during the first 15 days of the month from a

cooperative association in any capacity, except as the operator of

a pool plant, the payment shall be equal to the hundredweight of
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milk received multiplied by 90 percent of the preceding month’s

uniform price, adjusted for plant location pursuant to § 1005.75.

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the first 15 days of the

month from a cooperative association in its capacity as the

operator of a pool plant, the partial payment shall be at the pool

plant operator’s estimated use value of the milk using the most

recent class prices available for skim milk and butterfat at the

receiving plant’s location. 

(3) Final payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the month from a

cooperative association in its capacity as the operator of a pool

plant, the final payment shall be the classified value of such

milk as determined by multiplying the pounds of skim milk and

butterfat assigned to each class pursuant to § 1000.44 by the

class prices for the month at the receiving plant’s location, and

subtracting from this sum the partial payment made pursuant to

paragraph (b)(2) of this section.

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, 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, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section. 

(c) If a handler has not received full payment from the

market administrator pursuant to § 1005.72 by the payment date

specified in paragraph (a) or (b) of this section, the handler may

reduce payments pursuant to paragraphs (a) and (b) of this

section, but by not 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.

(d) 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
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make the required payment from the producer- settlement fund to

the handler or to the lawful claimant as the case may be.

(e) In making payments to producers pursuant to this

section, each pool plant operator shall furnish each producer,

except a producer whose milk was received from a cooperative

association described in § 1000.9(a) or (c), a supporting

statement in such form that it may be retained by the recipient

which shall show:

(1) The name, address, Grade A identifier assigned by a duly

constituted regulatory agency, and the payroll number of the

producer;

(2) The month and dates that milk was received from the

producer, including the daily and total pounds of milk received;

(3) The total pounds of butterfat in the producer’s milk;

(4) The minimum rate or rates at which payment to the

producer is required pursuant to this order;

(5) The rate used in making payment if the rate is other

than the applicable minimum rate;

(6) The amount, or rate per hundredweight, and nature of

each deduction claimed by the handler; and

(7) The net amount of payment to the producer or cooperative

association.

§ 1005.74 [Reserved]

§ 1005.75 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 § 1005.50 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 §§ 1005.73 and 1000.76. 

§ 1005.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1005.77 Adjustment of accounts.

See § 1000.77.

§ 1005.78 Charges on overdue accounts.

See § 1000.78.

MARKETWIDE SERVICE PAYMENTS

§ 1005.80 Transportation credit balancing fund.

The market administrator shall maintain a separate fund known

as the Transportation Credit Balancing Fund into which shall be

deposited the payments made by handlers pursuant to § 1005.81 and

out of which shall be made the payments due handlers pursuant to
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§ 1005.82. Payments due a handler shall be offset against

payments due from the handler.

§ 1005.81 Payments to the transportation credit balancing fund.

(a) On or before the 12th day after the end of the month

(except as provided in § 1000.90), each handler operating a pool

plant and each handler specified in § 1000.9(c) shall pay to the

market administrator a transportation credit balancing fund

assessment determined by multiplying the pounds of Class I

producer milk assigned pursuant to § 1005.44 by $0.065 per

hundredweight or such lesser amount as the market administrator

deems necessary to maintain a balance in the fund equal to the

total transportation credits disbursed during the prior JuneJanuary period. In the event that during any month of the JuneJanuary period the fund balance is insufficient to cover the

amount of credits that are due, the assessment should be based

upon the amount of credits that would have been disbursed had the

fund balance been sufficient.

(b) The market administrator shall announce publicly on or

before the 5th day of the month (except as provided in § 1000.90)

the assessment pursuant to paragraph (a) of this section for the

following month.

§ 1005.82 Payments from the transportation credit balancing fund.

(a) Payments from the transportation credit balancing fund

to handlers and cooperative associations requesting transportation

credits shall be made as follows:

(1) On or before the 13th day (except as provided in

§ 1000.90) after the end of each of the months of July through

December and any other month in which transportation credits are

in effect pursuant to paragraph (b) of this section, the market

administrator shall pay to each handler that received, and

reported pursuant to § 1005.30(a)(5), bulk milk transferred from a

plant fully regulated under another Federal order as described in

paragraph (c)(1) of this section or that received, and reported

pursuant to § 1005.30(a)(6), milk directly from producers’ farms

as specified in paragraph (c)(2) of this section, a preliminary

amount determined pursuant to paragraph (d) of this section to the

extent that funds are available in the transportation credit

balancing fund. If an insufficient balance exists to pay all of

the credits computed pursuant to this section, the market

administrator shall distribute the balance available in the

transportation credit balancing fund by reducing payments prorata

using the percentage derived by dividing the balance in the fund

by the total credits that are due for the month. The amount of

credits resulting from this initial proration shall be subject to

audit adjustment pursuant to paragraph (a)(2) of this section.
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(2) The market administrator shall accept adjusted requests

for transportation credits on or before the 20th day of the month 

following the month for which such credits were requested pursuant

to § 1005.32(a). After such date, a preliminary audit will be

conducted by the market administrator, who will recalculate any

necessary proration of transportation credit payments for the

preceding month pursuant to paragraph (a) of this section. 

Handlers will be promptly notified of an overpayment of credits

based upon this final computation and remedial payments to or from

the transportation credit balancing fund will be made on or before

the next payment date for the following month.

(3) Transportation credits paid pursuant to paragraphs

(a)(1) and (2) of this section shall be subject to final

verification by the market administrator pursuant to § 1000.77. 

Adjusted payments to or from the transportation credit balancing

fund will remain subject to the final proration established

pursuant to paragraph (a)(2) of this section.

(4) In the event that a qualified cooperative association is

the responsible party for whose account such milk is received and

written documentation of this fact is provided to the market

administrator pursuant to § 1005.30(c)(3) prior to the date

payment is due, the transportation credits for such milk computed

pursuant to this section shall be made to such cooperative

association rather than to the operator of the pool plant at which

the milk was received.

(b) The market administrator may extend the period during

which transportation credits are in effect (i.e., the

transportation credit period) to the months of January and June if

a written request to do so is received 15 days prior to the

beginning of the month for which the request is made and, after

conducting an independent investigation, finds that such extension

is necessary to assure the market of an adequate supply of milk

for fluid use. Before making such a finding, the market

administrator shall notify the Director of the Dairy Division and

all handlers in the market that an extension is being considered

and invite written data, views, and arguments. Any decision to

extend the transportation credit period must be issued in writing

prior to the first day of the month for which the extension is to

be effective. 

(c) Transportation credits shall apply to the following

milk:

(1) Bulk milk received from a plant regulated under another

Federal order, except Federal Order 1007, and allocated to Class I

milk pursuant to § 1000.44(a)(9); and
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(2) Bulk milk received directly from the farms of dairy

farmers at pool distributing plants subject to the following

conditions:

(i) The quantity of such milk that shall be eligible for the

transportation credit shall be determined by multiplying the total

pounds of milk received from producers meeting the conditions of

this paragraph by the lower of:

(A) The marketwide estimated Class I utilization of all

handlers for the month pursuant to § 1000.45(a); or 

(B) The Class I utilization of all producer milk of the pool

plant operator receiving the milk after the computations described

in § 1000.44;

 (ii) The dairy farmer was not a “producer” under this order

during more than 2 of the immediately preceding months of February

through May and not more than 50 percent of the production of the

dairy farmer during those 2 months, in aggregate, was received as

producer milk under this order during those 2 months; and

(iii) The farm on which the milk was produced is not located

within the specified marketing area of this order or the marketing

area of Federal Order 1007.

(d) Transportation credits shall be computed as follows:

(1) The market administrator shall subtract from the pounds

of milk described in paragraphs (c)(1) and (2) of this section the

pounds of bulk milk transferred from the pool plant receiving the

supplemental milk if milk was transferred to a nonpool plant on

the same calendar day that the supplemental milk was received. 

For this purpose, the transferred milk shall be subtracted from

the most distant load of supplemental milk received, and then in

sequence with the next most distant load until all of the

transfers have been offset.

(2) With respect to the pounds of milk described in

paragraph (c)(1) of this section that remain after the

computations described in paragraph (d)(1) of this section, the

market administrator shall:

(i) Determine the shortest hard-surface highway distance

between the shipping plant and the receiving plant;

(ii) Multiply the number of miles so determined by 0.35

cent;

(iii) Subtract the applicable Class I differential in

§ 1000.52 for the county in which the shipping plant is located

from the Class I differential applicable for the county in which

the receiving plant is located;

(iv) Subtract any positive difference computed in paragraph

(d)(2)(iii) of this section from the amount computed in paragraph

(d)(2)(ii) of this section; and
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(v) Multiply the remainder computed in paragraph (d)(2)(iv)

of this section by the hundredweight of milk described in

paragraph (d)(2) of this section. 

(3) For the remaining milk described in paragraph (c)(2) of

this section after computations described in paragraph (d)(1) of

this section, the market administrator shall:

(i) Determine an origination point for each load of milk by

locating the nearest city to the last producer’s farm from which

milk was picked up for delivery to the receiving pool plant;

(ii) Determine the shortest hard-surface highway distance

between the receiving pool plant and the origination point;

(iii) Subtract 85 miles from the mileage so determined;

(iv) Multiply the remaining miles so computed by 0.35 cent;

(v) Subtract the Class I differential specified in § 1000.52

applicable for the county in which the origination point is

located from the Class I differential applicable at the receiving

pool plant’s location; 

(vi) Subtract any positive difference computed in paragraph

(d)(3)(v) of this section from the amount computed in paragraph

(d)(3)(iv) of this section; and 

(vii) Multiply the remainder computed in paragraph

(d)(3)(vi) of this section by the hundredweight of milk described

in paragraph (d)(3) of this section.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1005.85 Assessment for order administration.

See § 1000.85.

§ 1005.86 Deduction for marketing services.

See § 1000.86.
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PART 1006--MILK IN THE FLORIDA MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

Sec.

1006.1 General provisions.

DEFINITIONS 

1006.2 Florida marketing area.

1006.3 Route disposition. 

1006.4 Plant. 

1006.5 Distributing plant. 

1006.6 Supply plant. 

1006.7 Pool plant. 

1006.8 Nonpool plant. 

1006.9 Handler. 

1006.10 Producer-handler.

1006.11 [Reserved] 

1006.12 Producer. 

1006.13 Producer milk. 

1006.14 Other source milk. 

1006.15 Fluid milk product. 

1006.16 Fluid cream product.

1006.17 [Reserved] 

1006.18 Cooperative association. 

1006.19 Commercial food processing establishment.

HANDLER REPORTS

1006.30 Reports of receipts and utilization. 

1006.31 Payroll reports. 

1006.32 Other reports. 

CLASSIFICATION OF MILK

1006.40 Classes of utilization.

1006.41 [Reserved] 

1006.42 Classification of transfers and diversions. 

1006.43 General classification rules. 

1006.44 Classification of producer milk. 

1006.45 Market administrator's reports and announcements

 concerning classification. 

CLASS PRICES

1006.50 Class prices, component prices, and advanced pricing

 factors. 

1006.51 Class I differential and price. 

1006.52 Adjusted Class I differentials. 

1006.53 Announcement of class prices, component prices, and

 advanced pricing factors. 

1006.54 Equivalent price. 
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UNIFORM PRICES 

1006.60 Handler's value of milk. 

1006.61 Computation of uniform prices.

1006.62 Announcement of uniform prices.
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 PAYMENTS FOR MILK 

1006.70 Producer-settlement fund.

1006.71 Payments to the producer-settlement fund.

1006.72 Payments from the producer-settlement fund.

1006.73 Payments to producers and to cooperative associations.

1006.74 [Reserved]

1006.75 Plant location adjustments for producer milk and

 nonpool milk.

1006.76 Payments by a handler operating a partially regulated

 distributing plant. 

1006.77 Adjustment of accounts. 

1006.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1006.85 Assessment for order administration. 

1006.86 Deduction for marketing services. 

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS 

§ 1006.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1006, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1006.2 Florida marketing area.

The marketing area means all the territory within the State

of Florida, except the counties of Escambia, Okaloosa, Santa Rosa,

and Walton, 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.

§ 1006.3 Route disposition.

See § 1000.3.

§ 1006.4 Plant.

See § 1000.4.

§ 1006.5 Distributing plant.

See § 1000.5.

§ 1006.6 Supply plant.

See § 1000.6.

§ 1006.7 Pool plant.

Pool plant means a plant specified in paragraphs (a) through

(d) of this section, or a unit of plants as specified in paragraph
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(e) of this section, but excluding a plant specified in paragraph

(g) of this section. The pooling standards described in

paragraphs (c) and (d) of this section are subject to modification

pursuant to paragraph (f) of this section:

(a) A distributing plant, other than a plant qualified as a

pool plant pursuant to paragraph (b) of this section or section

7(b) of any other Federal milk order, from which during the month

50 percent or more of the fluid milk products received at such

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 50 percent of the total

quantity of fluid milk products received at the plant (excluding

concentrated milk received from another plant by agreement for

other than Class I use) into ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which 60 percent or more of the

total quantity of milk that is received during the month from

dairy farmers and handlers described in § 1000.9(c), including

milk that is diverted from the plant, is transferred to pool

distributing plants. 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 plant’s shipping percentage.

(d) A plant located within the marketing area that is

operated by a cooperative association if pool plant status under

this paragraph is requested for such plant by the cooperative

association and during the month 60 percent of the producer milk

of members of such cooperative association is delivered directly

from farms to pool distributing plants or is transferred to such

plants as a fluid milk product (excluding concentrated milk

transferred to a distributing plant for an agreed-upon use other

than Class I) from the cooperative's plant.

(e) Two or more plants operated by the same handler and that

are located within the marketing area may qualify for pool status

as a unit by meeting the total and in-area route disposition

requirements specified in paragraph (a) of this section and the

following additional requirements:

(1) At least one of the plants in the unit must qualify as a

pool plant pursuant to paragraph (a) of this section;
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(2) Other plants in the unit must process only Class I or

Class II products and must be located in a pricing zone providing

the same or a lower Class I price than the price applicable at the

distributing plant included in the unit pursuant to paragraph

(e)(1) of this section; and

(3) A written request to form a unit, or to add or remove

plants from a unit, must be filed with the market administrator

prior to the first day of the month for which it is to be

effective.

(f) The applicable shipping percentages of paragraphs (c) 

and (d) of this section may be increased or decreased 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 date 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

percentage must be issued in writing at least one day before the

effective date.

(g) The term pool plant shall not apply to the following

plants:

(1) A producer-handler plant;

(2) An exempt plant as defined in § 1000.8(e);

(3) A plant qualified pursuant to paragraph (a) of this

section which is not located within any Federal order marketing

area, meets the pooling requirements of another Federal order, and

has had greater route disposition in such other Federal order

marketing area for 3 consecutive months;

(4) A plant qualified pursuant to paragraph (a) of this

section which is located in another Federal order marketing area,

meets the pooling standards of the other Federal order, and has

not had a majority of its route disposition in this marketing area

for 3 consecutive months or is locked into pool status under such

other Federal order without regard to its route disposition in any

other Federal order marketing area; and

(5) 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 such other order than are made to plants
-516-

regulated under this order, or such plant has automatic pooling

status under such other order.

§ 1006.8 Nonpool plant.

See § 1000.8.

§ 1006.9 Handler.

See § 1000.9.

§ 1006.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is monthly route disposition in the marketing area; 

(b) Receives no fluid milk products, and acquires no fluid

milk products for route disposition, from sources other than own

farm production;

(c) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products received from own farm production; and 

(d) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled, and the

processing and packaging operations, are the producer-handler’s

own enterprise and are operated at the producer-handler’s own

risk.

§ 1006.11 [Reserved]

§ 1006.12 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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1006.13; 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 § 1006.13(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.
-517-

§ 1006.13 Producer milk.

Producer milk means the skim milk (or the skim equivalent of

components of skim milk) and butterfat contained 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 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 handler

described in § 1000.9(c) to a nonpool plant, subject to the

following conditions:

(1) In any month, not less than 10 days’ production of the

producer whose milk is diverted is physically received at a pool

plant during the month;

(2) The total quantity of milk so diverted during the month

by a cooperative association shall not exceed 20 percent during

the months of July through November, 25 percent during the months

of December through February, and 40 percent during all other

months, of the producer milk that the cooperative association

caused to be delivered to, and physically received at, pool plants

during the month;

(3) The operator of a pool plant that is not a cooperative

association may divert any milk that is not under the control of a

cooperative association that diverts milk during the month

pursuant to paragraph (d) of this section. The total quantity of

milk so diverted during the month shall not exceed 20 percent

during the months of July through November, 25 percent during the

months of December through February, and 40 percent during all

other months, of the producer milk physically received at such

plant (or such unit of plants in the case of plants that pool as a

unit pursuant to § 1006.7(d)) during the month, excluding the

quantity of producer milk received from a handler described in §

1000.9(c);

(4) Any milk diverted in excess of the limits prescribed in

paragraphs (d)(3) and (4) of this section shall not be producer

milk. If the diverting handler or cooperative association fails

to designate the dairy farmers’ deliveries that will not be

producer milk, no milk diverted by the handler or cooperative

association shall be producer milk;
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(5) Diverted milk shall be priced at the location of the

plant to which diverted; and

(6) The delivery day requirements and the diversion

percentages in paragraphs (d)(1) through (3) of this section may

be increased or decreased by the market administrator if the

market administrator finds that such revision is necessary to

assure orderly marketing and efficient handling of milk in the

marketing area. Before making such a finding, the market

administrator shall investigate the need for the revision either

on the market administrator’s own initiative or at the request of

interested persons. If the investigation shows that a revision

might be appropriate, the market administrator shall issue a

notice stating that the revision is being considered and inviting

written data, views, and arguments. Any decision to revise an

applicable percentage must be issued in writing at least one day

before the effective date. 

§ 1006.14 Other source milk.

See § 1000.14.

§ 1006.15 Fluid milk product.

See § 1000.15.

§ 1006.16 Fluid cream product.

See § 1000.16.

§ 1006.17 [Reserved]

§ 1006.18 Cooperative association.

See § 1000.18.

§ 1006.19 Commercial food processing establishment.

See § 1000.19.
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HANDLER REPORTS

§ 1006.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 7th day

after the end of the month, in the detail and on prescribed forms,

as follows:

(a) With respect to each of its pool plants, the quantities

of skim milk and butterfat contained in or represented by:

(1) Receipts of producer milk, including producer milk

diverted by the reporting handler, from sources other than

handlers described in § 1000.9(c);

(2) Receipts of milk from handlers described in § 1000.9(c);

(3) Receipts of fluid milk products and bulk fluid cream

products from other pool plants;

(4) Receipts of other source milk;

(5) Inventories at the beginning and end of the month of

fluid milk products and bulk fluid cream products; and

(6) The utilization or disposition of all milk and milk

products required to be reported pursuant to this paragraph.

(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 quantities of all skim milk and butterfat contained

in receipts of milk from producers; and

(2) The utilization or disposition of all 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.

§ 1006.31 Payroll reports.

(a) On or before the 20th day after the end of each month,

each handler that operates a pool plant pursuant to § 1006.7 and

each handler described in § 1000.9(c) shall report to the market

administrator its producer payroll for the month, in detail

prescribed by the market administrator, showing for each producer

the information specified in § 1006.73(e).

(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
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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.
-521-

§ 1006.32 Other reports.

In addition to the reports required pursuant to §§ 1006.30

and 1006.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1006.40 Classes of utilization.

See § 1000.40.

§ 1006.41 [Reserved]

§ 1006.42 Classification of transfers and diversions.

See § 1000.42.

§ 1006.43 General classification rules.

See § 1000.43.

§ 1006.44 Classification of producer milk.

See § 1000.44.

§ 1006.45 Market administrator’s reports and announcements

concerning classification. 

See § 1000.45.

CLASS PRICES

§ 1006.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50. 

§ 1006.51 Class I differential and price.

The Class I differential shall be the differential

established for Hillsborough County, Florida, which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for Hillsborough County, Florida. 

§ 1006.52 Adjusted Class I differentials.

See § 1000.52.

§ 1006.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1006.54 Equivalent price.

See § 1000.54.

UNIFORM PRICES

§ 1006.60 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 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 (e)

of this section and subtracting from that total amount the value

computed in paragraph (f) of this section. Receipts of nonfluid

milk products that are distributed as labeled reconstituted milk
-522-

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) Multiply the pounds of skim milk and butterfat in

producer milk that were classified in each class pursuant to 

§ 1000.44(c) by the applicable skim milk and butterfat prices, and

add the resulting amounts;

(b) Multiply the pounds of skim milk and butterfat overage

assigned to each class pursuant to § 1000.44(a)(11) by the

respective skim milk and butterfat prices applicable at the

location of the pool plant;

(c) Multiply the difference between the Class IV price for

the preceding month and the current month’s Class I, II, or III

price, as the case may be, 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);

(d) 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

a plant regulated under other Federal orders and bulk concentrated

fluid milk products from pool plants, plants regulated under other

Federal orders, and unregulated supply plants;

(e) Multiply the Class I price applicable at the location of

the nearest unregulated supply plants from which an equivalent

volume was received 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 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; and

(f) 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
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and butterfat contained in receipts of nonfluid milk products that

are allocated to Class I use pursuant to § 1000.43(d).

§ 1006.61 Computation of uniform prices.

On or before the 11th day of each month, the market

administrator shall compute a uniform butterfat price, a uniform

skim milk price, and a uniform price for producer milk receipts

reported for the prior month. The report of any handler who has

not made payments required pursuant to § 1006.71 for the preceding

month shall not be included in the computation of these prices,

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. 

(a) Uniform butterfat price. The uniform butterfat price

per pound, rounded to the nearest one-hundredth cent, shall be

computed by multiplying the pounds of butterfat in producer milk

allocated to each class pursuant to § 1000.44(b) by the respective

class butterfat prices and dividing the sum of such values by the

total pounds of such butterfat.

(b) Uniform skim milk price. The uniform skim milk price

per hundredweight, rounded to the nearest cent, shall be computed

as follows:

(1) Combine into one total the values computed pursuant to §

1005.60 for all handlers;

(2) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1006.75;

(3) Add an amount equal to not less than one-half of the

unobligated balance in the producer-settlement fund;

(4) Subtract the value of the total pounds of butterfat for

all handlers. The butterfat value shall be computed by

multiplying the pounds of butterfat by the butterfat price

computed in paragraph (a) of this section;

(5) Divide the resulting amount by the sum of the following

for all handlers included in these computations:

(i) The total skim pounds of producer milk; and

(ii) The total skim pounds for which a value is computed

pursuant to § 1006.60(e); and 

(6) Subtract not less than 4 cents and not more than 5

cents.

(c) Uniform price. The uniform price per hundredweight,

rounded to the nearest cent, shall be the sum of the following:

(1) Multiply the uniform butterfat price for the month

pursuant to paragraph (a) of this section times 3.5 pounds of

butterfat; and
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(2) Multiply the uniform skim milk price for the month

pursuant to paragraph (b) of this section times 96.5 pounds of

skim milk.

§ 1006.62 Announcement of uniform prices.

On or before the 11th day after the end of the month, the

market administrator shall announce the uniform prices for the

month computed pursuant to § 1006.61.

PAYMENTS FOR MILK

§ 1006.70 Producer-settlement fund.

See § 1000.70.

§ 1006.71 Payments to the producer-settlement fund.

Each handler shall make a payment to the producersettlement fund in a manner that provides receipt of the funds by

the market administrator no later than the 12th 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 of the handler for the month as

determined pursuant to § 1006.60; and

(b) The sum of the value at the uniform prices for skim milk

and butterfat, adjusted for plant location, of the handler’s

receipts of producer milk; and the value at the uniform price, as

adjusted pursuant to § 1006.75, applicable at the location of the

plant from which received of other source milk for which a value

is computed pursuant to § 1006.60(e).

§ 1006.72 Payments from the producer-settlement fund.

No later than one day after the date of payment receipt

required under § 1006.71, the market administrator shall pay to

each handler the amount, if any, by which the amount computed

pursuant to § 1006.71(b) exceeds the amount computed pursuant to

§ 1006.71(a). If, at such time, the balance in the producersettlement 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.

§ 1006.73 Payments to producers and to cooperative associations.

(a) Each pool plant operator that is not paying a

cooperative association for producer milk shall pay each producer

as follows:

(1) Partial payments. 

(i) For each producer who has not discontinued shipments as

of the 15th day of the month, payment shall be made so that it is

received by the producer on or before the 20th day of the month

(except as provided in § 1000.90) for milk received during the
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first 15 days of the month at not less than 85 percent of the

preceding month’s uniform price, adjusted for plant location

pursuant to § 1006.75 and proper deductions authorized in writing

by the producer; and

(ii) For each producer who has not discontinued shipments as

of the last day of the month, payment shall be made so that it is

received by the producer on or before the 5th day of the following

month (except as provided in § 1000.90) for milk received from the

16th to the last day of the month at not less than 85 percent of

the preceding month’s uniform price, adjusted for plant location

pursuant to § 1006.75 and proper deductions authorized in writing

by the producer.

(2) Final payment. For milk received during the month, a

payment computed as follows shall be made so that it is received

by each producer one day after the payment date required in

§ 1006.72:

(i) Multiply the hundredweight of producer skim milk

received times the uniform skim milk price for the month;

(ii) Multiply the pounds of butterfat received times the

uniform butterfat price for the month;

(iii) Multiply the hundredweight of producer milk received

times the plant location adjustment pursuant to § 1006.75; and

(iv) Add the amounts computed in paragraphs (a)(2)(i), (ii),

and (iii) of this section, and from that sum:

(A) Subtract the partial payments made pursuant to paragraph

(a)(1) of this section;

(B) Subtract the deduction for marketing services pursuant

to § 1000.86;

(C) Add or subtract for errors made in previous payments to

the producer; and

(D) Subtract proper deductions authorized in writing by the

producer. 

(b) One day before partial and final payments are due

pursuant to paragraph (a) of this section, each pool plant

operator shall pay a cooperative association for milk received as

follows:

(1) Partial payment to a cooperative association for bulk

milk received directly from producers’ farms. For bulk milk

(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) received from a cooperative association in any

capacity, except as the operator of a pool plant, the payment

shall be equal to the hundredweight of milk received multiplied by
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90 percent of the preceding month’s uniform price, adjusted for

plant location pursuant to § 1006.75.

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the first 15 days of the

month from a cooperative association in its capacity as the

operator of a pool plant, the partial payment shall be at the pool

plant operator’s estimated use value of the milk using the most

recent class prices available for skim milk and butterfat at the

receiving plant’s location. 

(3) Final payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the month from a

cooperative association in its capacity as the operator of a pool

plant, the final payment shall be the classified value of such

milk as determined by multiplying the pounds of skim milk and

butterfat assigned to each class pursuant to § 1000.44 by the

class prices for the month at the receiving plant’s location, and

subtracting from this sum the partial payment made pursuant to

paragraph (b)(2) of this section.

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, 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, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section. 

(c) If a handler has not received full payment from the

market administrator pursuant to § 1006.72 by the payment date

specified in paragraph (a) or (b) of this section, the handler may

reduce payments pursuant to paragraphs (a) and (b) of this

section, but by not 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.

(d) 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
-527-

make the required payment from the producer- settlement fund to

the handler or to the lawful claimant as the case may be.

(e) In making payments to producers pursuant to this

section, each pool plant operator shall furnish each producer,

except a producer whose milk was received from a cooperative

association described in § 1000.9(a) or (c), a supporting

statement in such form that it may be retained by the recipient

which shall show:

(1) The name, address, Grade A identifier assigned by a duly

constituted regulatory agency, and the payroll number of the

producer;

(2) The month and dates that milk was received from the

producer, including the daily and total pounds of milk received;

(3) The total pounds of butterfat in the producer’s milk;

(4) The minimum rate or rates at which payment to the

producer is required pursuant to this order;

(5) The rate used in making payment if the rate is other

than the applicable minimum rate;

(6) The amount, or rate per hundredweight, and nature of

each deduction claimed by the handler; and

(7) The net amount of payment to the producer or cooperative

association.

§ 1006.74 [Reserved]

§ 1006.75 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 § 1006.50 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 §§ 1006.73 and 1000.76. 

§ 1006.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1006.77 Adjustment of accounts.

See § 1000.77.

§ 1006.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1006.85 Assessment for order administration.

See § 1000.85.

§ 1006.86 Deduction for marketing services.

See § 1000.86.
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PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

Sec.

1007.1 General provisions.

DEFINITIONS 

1007.2 Southeast marketing area.

1007.3 Route disposition. 

1007.4 Plant. 

1007.5 Distributing plant. 

1007.6 Supply plant. 

1007.7 Pool plant. 

1007.8 Nonpool plant. 

1007.9 Handler. 

1007.10 Producer-handler.

1007.11 [Reserved] 

1007.12 Producer. 

1007.13 Producer milk. 

1007.14 Other source milk. 

1007.15 Fluid milk product. 

1007.16 Fluid cream product.

1007.17 [Reserved]

1007.18 Cooperative association. 

1007.19 Commercial food processing establishment.

HANDLER REPORTS

1007.30 Reports of receipts and utilization. 

1007.31 Payroll reports. 

1007.32 Other reports. 

CLASSIFICATION OF MILK

1007.40 Classes of utilization.

1007.41 [Reserved] 

1007.42 Classification of transfers and diversions. 

1007.43 General classification rules. 

1007.44 Classification of producer milk. 

1007.45 Market administrator's reports and announcements

 concerning classification. 

CLASS PRICES 

1007.50 Class prices, component prices, and advanced pricing

 factors.

1007.51 Class I differential and price. 

1007.52 Adjusted Class I differentials. 

1007.53 Announcement of class prices, component prices, and

 advanced pricing factors. 

1007.54 Equivalent price. 
-529-

UNIFORM PRICES 

1007.60 Handler's value of milk. 

1007.61 Computation of uniform prices. 

1007.62 Announcement of uniform prices. 
-530-

PAYMENTS FOR MILK 

1007.70 Producer-settlement fund.

1007.71 Payments to the producer-settlement fund.

1007.72 Payments from the producer-settlement fund.

1007.73 Payments to producers and to cooperative associations.

1007.74 [Reserved]

1007.75 Plant location adjustments for producer milk and

 nonpool milk.

1007.76 Payments by a handler operating a partially regulated

 distributing plant. 

1007.77 Adjustment of accounts. 

1007.78 Charges on overdue accounts.

MARKETWIDE SERVICE PAYMENTS

1007.80 Transportation credit balancing fund.

1007.81 Payments to the transportation credit balancing fund.

1007.82 Payments from the transportation credit balancing fund.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1007.85 Assessment for order administration. 

1007.86 Deduction for marketing services. 

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS

§ 1007.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1007, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1007.2 Southeast 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:

Alabama, Arkansas, Louisiana, and Mississippi

All of the States of Alabama, Arkansas, Louisiana, and

Mississippi.

Florida Counties

Escambia, Okaloosa, Santa Rosa, and Walton.

Georgia Counties

All of the State of Georgia except for the counties of

Catoosa, Chattooga, Dade, Fannin, Murray, Walker, and Whitfield.
-531-

Kentucky Counties

Allen, Ballard, Barren, Caldwell, Calloway, Carlisle,

Christian, Crittenden, Fulton, Graves, Hickman, Livingston, Logan,

Lyon, Marshall, McCracken, Metcalfe, Monroe, Simpson, Todd, Trigg,

and Warren.
-532-

Missouri Counties

Barry, Barton, Bollinger, Butler, Cape Girardeau, Carter,

Cedar, Christian, Crawford, Dade, Dallas, Dent, Douglas, Dunklin,

Greene, Howell, Iron, Jasper, Laclede, Lawrence, Madison,

McDonald, Mississippi, New Madrid, Newton, Oregon, Ozark,

Pemiscot, Perry, Polk, Reynolds, Ripley, Scott, Shannon, St.

Francois, Stoddard, Stone, Taney, Texas, Vernon, Washington,

Wayne, Webster, and Wright.

Tennessee Counties

All of the State of Tennessee except for the counties of

Anderson, Blount, Bradley, Campbell, Carter, Claiborne, Cocke,

Cumberland, Grainger, Greene, Hamblen, Hamilton, Hancock, Hawkins,

Jefferson, Johnson, Knox, Loudon, Marion, McMinn, Meigs, Monroe,

Morgan, Polk, Rhea, Roane, Scott, Sequatchie, Sevier, Sullivan,

Unicoi, Union, and Washington.

§ 1007.3 Route disposition.

See § 1000.3.

§ 1007.4 Plant.

See § 1000.4.

§ 1007.5 Distributing plant.

See § 1000.5.

§ 1007.6 Supply plant.

See § 1000.6.

§ 1007.7 Pool plant.

Pool plant means a plant specified in paragraphs (a) through

(d) of this section, or a unit of plants as specified in paragraph

(e) of this section, but excluding a plant specified in paragraph

(g) of this section. The pooling standards described in

paragraphs (c) and (d) of this section are subject to modification

pursuant to paragraph (f) of this section:

(a) A distributing plant, other than a plant qualified as a

pool plant pursuant to paragraph (b) of this section or section

7(b) of any other Federal milk order, from which during the month

50 percent or more of the fluid milk products received at such

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 50 percent of the total

quantity of fluid milk products received at the plant (excluding

concentrated milk received from another plant by agreement for
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other than Class I use) into ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which 50 percent or more of the

total quantity of milk that is received during the month from

dairy farmers and handlers described in § 1000.9(c), including

milk that is diverted from the plant, is transferred to pool

distributing plants. 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 plant’s shipping percentage.

(d) A plant located within the marketing area that is

operated by a cooperative association if pool plant status under

this paragraph is requested for such plant by the cooperative

association and during the month at least 60 percent of the

producer milk of members of such cooperative association is

delivered directly from farms to pool distributing plants or is

transferred to such plants as a fluid milk product (excluding

concentrated milk transferred to a distributing plant for an

agreed-upon use other than Class I) from the cooperative's plant.

(e) Two or more plants operated by the same handler and

located within the marketing area may qualify for pool status as a

unit by meeting the total and in-area route disposition

requirements specified in paragraph (a) of this section and the

following additional requirements:

(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 only Class I or

Class II products and must be located in a pricing zone providing

the same or a lower Class I price than the price applicable at the

distributing plant included in the unit pursuant to paragraph

(e)(1) of this section; and

(3) A written request to form a unit, or to add or remove

plants from a unit, must be filed with the market administrator

prior to the first day of the month for which it is to be

effective.

(f) The applicable shipping percentages of paragraphs (c) 

and (d) of this section may be increased or decreased 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 date for which the requested revision

is desired effective. If the investigation shows that an
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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

percentage must be issued in writing at least one day before the

effective date.

(g) The term pool plant shall not apply to the following

plants:

(1) A producer-handler plant;

(2) An exempt plant as defined in § 1000.8(e);

(3) A plant qualified pursuant to paragraph (a) of this

section which is not located within any Federal order marketing

area, meets the pooling requirements of another Federal order, and

has had greater route disposition in such other Federal order

marketing area for 3 consecutive months;

(4) A plant qualified pursuant to paragraph (a) of this

section which is located in another Federal order marketing area,

meets the pooling standards of the other Federal order, and has

not had a majority of its route disposition in this marketing area

for 3 consecutive months or is locked into pool status under such

other Federal order without regard to its route disposition in any

other Federal order marketing area; and

(5) 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 such other order than are made to plants

regulated under this order, or such plant has automatic pooling

status under such other order.

§ 1007.8 Nonpool plant.

See § 1000.8.

§ 1007.9 Handler.

See § 1000.9.

§ 1007.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is monthly route disposition in the marketing area; 

(b) Receives no fluid milk products, and acquires no fluid

milk products for route disposition, from sources other than own

farm production;

(c) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products received from own farm production; and 

(d) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled, and the
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processing and packaging operations, are the producer-handler’s

own enterprise and are operated at the producer-handler’s own

risk.

§ 1007.11 [Reserved]

§ 1007.12 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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1007.13; 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 § 1007.13(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.

§ 1007.13 Producer milk.

Producer milk means the skim milk (or the skim equivalent of

components of skim milk) and butterfat contained 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 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 handler

described in § 1000.9(c) to a nonpool plant, subject to the

following conditions:

(1) In any month of January through June, not less than 4

days' production of the producer whose milk is diverted is

physically received at a pool plant during the month;
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(2) In any month of July through December, not less than 10

days' production of the producer whose milk is diverted is

physically received at a pool plant during the month;

(3) The total quantity of milk so diverted during the month

by a cooperative association shall not exceed 33 percent during

the months of July through December, and 50 percent during the

months of January through June, of the producer milk that the

cooperative association caused to be delivered to, and physically

received at, pool plants during the month;

(4) The operator of a pool plant that is not a cooperative

association may divert any milk that is not under the control of a

cooperative association that diverts milk during the month

pursuant to paragraph (d) of this section. The total quantity of

milk so diverted during the month shall not exceed 33 percent

during the months of July through December, or 50 percent during

the months of January through June, of the producer milk

physically received at such plant (or such unit of plants in the

case of plants that pool as a unit pursuant to § 1007.7(e)) during

the month, excluding the quantity of producer milk received from a

handler described in § 1000.9(c);

(5) Any milk diverted in excess of the limits prescribed in

paragraphs (d)(3) and (4) of this section shall not be producer

milk. If the diverting handler or cooperative association fails

to designate the dairy farmers’ deliveries that will not be

producer milk, no milk diverted by the handler or cooperative

association shall be producer milk;

(6) Diverted milk shall be priced at the location of the

plant to which diverted; and

(7) The delivery day requirements and the diversion

percentages in paragraphs (d)(1) through (4) of this section may

be increased or decreased by the market administrator if the

market administrator finds that such revision is necessary to

assure orderly marketing and efficient handling of milk in the

marketing area. Before making such a finding, the market

administrator shall investigate the need for the revision either

on the market administrator’s own initiative or at the request of

interested persons. If the investigation shows that a revision

might be appropriate, the market administrator shall issue a

notice stating that the revision is being considered and inviting

written data, views, and arguments. Any decision to revise an

applicable percentage must be issued in writing at least one day

before the effective date.

§ 1007.14 Other source milk.

See § 1000.14.

§ 1007.15 Fluid milk product.
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See § 1000.15.

§ 1007.16 Fluid cream product.

See § 1000.16.

§ 1007.17 [Reserved] 

§ 1007.18 Cooperative association.

See § 1000.18.

§ 1007.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1007.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 7th

day after the end of the month, in the detail and on prescribed

forms, as follows:

(a) With respect to each of its pool plants, the quantities

of skim milk and butterfat contained in or represented by:

(1) Receipts of producer milk, including producer milk

diverted by the reporting handler, from sources other than

handlers described in § 1000.9(c);

(2) Receipts of milk from handlers described in § 1000.9(c);

(3) Receipts of fluid milk products and bulk fluid cream

products from other pool plants;

(4) Receipts of other source milk;

(5) Receipts of bulk milk from a plant regulated under

another Federal order, except Federal Order 1005, for which a

transportation credit is requested pursuant to § 1007.82;

(6) Receipts of producer milk described in § 1007.82(c)(2),

including the identity of the individual producers whose milk is

eligible for the transportation credit pursuant to that paragraph

and the date that such milk was received;

(7) For handlers submitting transportation credit requests,

transfers of bulk milk to nonpool plants, including the dates that

such milk was transferred;

(8) Inventories at the beginning and end of the month of

fluid milk products and bulk fluid cream products; and

(9) The utilization or disposition of all milk and milk

products required to be reported pursuant to this paragraph.

(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 paragraphs

(a)(1), (a)(2), (a)(3), (a)(4), and (a)(8) 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
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reconstituted skim milk in route disposition in the marketing

area.

(c) Each handler described in § 1000.9(c) shall report:

(1) The quantities of all skim milk and butterfat contained

in receipts of milk from producers;

(2) The utilization or disposition of all such receipts; and

(3) With respect to milk for which a cooperative association

is requesting a transportation credit pursuant to § 1007.82, all

of the information required in paragraphs (a)(5), (a)(6), and

(a)(7) of this section. 

(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.

§ 1007.31 Payroll reports.

(a) On or before the 20th day after the end of each month,

each handler that operates a pool plant pursuant to § 1007.7 and

each handler described in § 1000.9(c) shall report to the market

administrator its producer payroll for the month, in detail

prescribed by the market administrator, showing for each producer

the information specified in § 1007.73(e).

(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.

§ 1007.32 Other reports.

(a) On or before the 20th day after the end of each month,

each handler described in § 1000.9(a) and (c) shall report to the

market administrator any adjustments to transportation credit

requests as reported pursuant to § 1007.30(a)(5), (6), and (7).

(b) In addition to the reports required pursuant to

§§ 1007.30, 31, and 32(a), each handler shall report any

information the market administrator deems necessary to verify or

establish each handler’s obligation under the order. 

CLASSIFICATION OF MILK

§ 1007.40 Classes of utilization.

See § 1000.40.

§ 1007.41 [Reserved]

§ 1007.42 Classification of transfers and diversions.

See § 1000.42.

§ 1007.43 General classification rules.

See § 1000.43.

§ 1007.44 Classification of producer milk.
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See § 1000.44.

§ 1007.45 Market administrator’s reports and announcements

concerning classification. 

See § 1000.45.

CLASS PRICES

§ 1007.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50. 

§ 1007.51 Class I differential and price.

The Class I differential shall be the differential

established for Fulton County, Georgia, which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for Fulton County, Georgia.

§ 1007.52 Adjusted Class I differentials.

See § 1000.52.

§ 1007.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1007.54 Equivalent price.

See § 1000.54.

UNIFORM PRICES

§ 1007.60 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 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 (e)

of this section and subtracting from that total amount the value

computed in paragraph (f) of this section. 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) Multiply the pounds of skim milk and butterfat in

producer milk that were classified in each class pursuant to 

§ 1000.44(c) by the applicable skim milk and butterfat prices, and

add the resulting amounts;

(b) Multiply the pounds of skim milk and butterfat overage

assigned to each class pursuant to § 1000.44(a)(11) by the

respective skim milk and butterfat prices applicable at the

location of the pool plant;

(c) Multiply the difference between the Class IV price for

the preceding month and the current month’s Class I, II, or III

price, as the case may be, by the hundredweight of skim milk and
-540-

butterfat subtracted from Class I, II, or III, respectively,

pursuant to § 1000.44(a)(7) and the corresponding step of

§ 1000.44(b);

(d) 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

a plant regulated under other Federal orders and bulk concentrated

fluid milk products from pool plants, plants regulated under other

Federal orders, and unregulated supply plants;

(e) Multiply the Class I price applicable at the location of

the nearest unregulated supply plants from which an equivalent

volume was received 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 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; and

(f) 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).

§ 1007.61 Computation of uniform prices.

On or before the 11th day of each month, the market

administrator shall compute a uniform butterfat price, a uniform

skim milk price, and a uniform price for producer milk receipts

reported for the prior month. The report of any handler who has

not made payments required pursuant to § 1007.71 for the preceding

month shall not be included in the computation of these prices,

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. 

(a) Uniform butterfat price. The uniform butterfat price

per pound, rounded to the nearest one-hundredth cent, shall be

computed by multiplying the pounds of butterfat in producer milk
-541-

allocated to each class pursuant to § 1000.44(b) by the respective

class butterfat prices and dividing the sum of such values by the

total pounds of such butterfat.

(b) Uniform skim milk price. The uniform skim milk price

per hundredweight, rounded to the nearest cent, shall be computed

as follows:

(1) Combine into one total the values computed pursuant to §

1005.60 for all handlers;

(2) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1007.75;

(3) Add an amount equal to not less than one-half of the

unobligated balance in the producer-settlement fund;

(4) Subtract the value of the total pounds of butterfat for

all handlers. The butterfat value shall be computed by

multiplying the pounds of butterfat by the butterfat price

computed in paragraph (a) of this section;

(5) Divide the resulting amount by the sum of the following

for all handlers included in these computations:

(i) The total skim pounds of producer milk; and

(ii) The total skim pounds for which a value is computed

pursuant to § 1007.60(e); and 

(6) Subtract not less than 4 cents and not more than 5

cents.

(c) Uniform price. The uniform price per hundredweight,

rounded to the nearest cent, shall be the sum of the following:

(1) Multiply the uniform butterfat price for the month

pursuant to paragraph (a) of this section times 3.5 pounds of

butterfat; and

(2) Multiply the uniform skim milk price for the month

pursuant to paragraph (b) of this section times 96.5 pounds of

skim milk.

§ 1007.62 Announcement of uniform prices.

On or before the 11th day after the end of the month, the

market administrator shall announce the uniform prices for the

month computed pursuant to § 1007.61.

PAYMENTS FOR MILK

§ 1007.70 Producer-settlement fund.

See § 1000.70.

§ 1007.71 Payments to the producer-settlement fund.

Each handler shall make a payment to the producer-settlement

fund in a manner that provides receipt of the funds by the market

administrator no later than the 12th 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
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section exceeds the amount specified in paragraph (b) of this

section:

(a) The total value of milk of the handler for the month as

determined pursuant to § 1007.60; and

(b) The sum of the value at the uniform prices for skim milk

and butterfat, adjusted for plant location, of the handler’s

receipts of producer milk; and the value at the uniform price, as

adjusted pursuant to § 1007.75, applicable at the location of the

plant from which received of other source milk for which a value

is computed pursuant to § 1007.60(e).

§ 1007.72 Payments from the producer-settlement fund.

No later than one day after the date of payment receipt

required under § 1007.71, the market administrator shall pay to

each handler the amount, if any, by which the amount computed

pursuant to § 1007.71(b) exceeds the amount computed pursuant to

§ 1007.71(a). If, at such time, the balance in the producersettlement 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.

§ 1007.73 Payments to producers and to cooperative associations.

(a) Each pool plant operator that is not paying a

cooperative association for producer milk shall pay each producer

as follows:

(1) Partial payment. For each producer who has not

discontinued shipments as of the 23rd day of the month, payment

shall be made so that it is received by the producer on or before

the 26th day of the month (except as provided in § 1000.90) for

milk received during the first 15 days of the month at not less

than 90 percent of the preceding month’s uniform price, adjusted

for plant location pursuant to § 1007.75 and proper deductions

authorized in writing by the producer. 

(2) Final payment. For milk received during the month, a

payment computed as follows shall be made so that it is received

by each producer one day after the payment date required in

§ 1007.72:

(i) Multiply the hundredweight of producer skim milk

received times the uniform skim milk price for the month;

(ii) Multiply the pounds of butterfat received times the

uniform butterfat price for the month;

(iii) Multiply the hundredweight of producer milk received

times the plant location adjustment pursuant to § 1007.75; and

(iv) Add the amounts computed in paragraph (a)(2)(i), (ii),

and (iii) of this section, and from that sum:
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(A) Subtract the partial payment made pursuant to paragraph

(a)(1) of this section;

(B) Subtract the deduction for marketing services pursuant

to § 1000.86;

(C) Add or subtract for errors made in previous payments to

the producer; and

(D) Subtract proper deductions authorized in writing by the

producer. 

(b) One day before partial and final payments are due

pursuant to paragraph (a) of this section, each pool plant

operator shall pay a cooperative association for milk received as

follows:

(1) Partial payment to a cooperative association for bulk

milk received directly from producers’ farms. For bulk milk

(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) received during the first 15 days of the month from a

cooperative association in any capacity, except as the operator of

a pool plant, the payment shall be equal to the hundredweight of

milk received multiplied by 90 percent of the preceding month’s

uniform price, adjusted for plant location pursuant to § 1007.75.

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the first 15 days of the

month from a cooperative association in its capacity as the

operator of a pool plant, the partial payment shall be at the pool

plant operator’s estimated use value of the milk using the most

recent class prices available for skim milk and butterfat at the

receiving plant’s location.

(3) Final payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the month from a

cooperative association in its capacity as the operator of a pool

plant, the final payment shall be the classified value of such

milk as determined by multiplying the pounds of skim milk and

butterfat assigned to each class pursuant to § 1000.44 by the

class prices for the month at the receiving plant’s location, and

subtracting from this sum the partial payment made pursuant to

paragraph (b)(2) of this section.

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, including the

milk of producers who are not members of such association and who

the market administrator determines have authorized the
-544-

cooperative association to collect payment for their milk, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section. 

(c) If a handler has not received full payment from the

market administrator pursuant to § 1007.72 by the payment date

specified in paragraph (a) or (b) of this section, the handler may

reduce payments pursuant to paragraphs (a) and (b) of this

section, but by not 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.

(d) 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 producer- settlement fund to

the handler or to the lawful claimant as the case may be.

(e) In making payments to producers pursuant to this

section, each pool plant operator shall furnish each producer,

except a producer whose milk was received from a cooperative

association described in § 1000.9(a) or (c), a supporting

statement in such form that it may be retained by the recipient

which shall show:

(1) The name, address, Grade A identifier assigned by a duly

constituted regulatory agency, and the payroll number of the

producer;

(2) The month and dates that milk was received from the

producer, including the daily and total pounds of milk received;

(3) The total pounds of butterfat in the producer’s milk;

(4) The minimum rate or rates at which payment to the

producer is required pursuant to this order;

(5) The rate used in making payment if the rate is other

than the applicable minimum rate;

(6) The amount, or rate per hundredweight, and nature of

each deduction claimed by the handler; and

(7) The net amount of payment to the producer or cooperative

association.

§ 1007.74 [Reserved]

§ 1007.75 Plant location adjustments for producer milk and

nonpool milk.
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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 § 1007.50 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 §§ 1007.73 and 1000.76. 

§ 1007.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1007.77 Adjustment of accounts.

See § 1000.77.

§ 1007.78 Charges on overdue accounts.

See § 1000.78.

MARKETWIDE SERVICE PAYMENTS

§ 1007.80 Transportation credit balancing fund.

The market administrator shall maintain a separate fund known

as the Transportation Credit Balancing Fund into which shall be

deposited the payments made by handlers pursuant to § 1007.81 and

out of which shall be made the payments due handlers pursuant to

§ 1007.82. Payments due a handler shall be offset against

payments due from the handler.

§ 1007.81 Payments to the transportation credit balancing fund.

(a) On or before the 12th day after the end of the month

(except as provided in § 1000.90), each handler operating a pool

plant and each handler specified in § 1000.9(c) shall pay to the

market administrator a transportation credit balancing fund

assessment determined by multiplying the pounds of Class I

producer milk assigned pursuant to § 1000.44 by $0.07 per

hundredweight or such lesser amount as the market administrator

deems necessary to maintain a balance in the fund equal to the

total transportation credits disbursed during the prior JuneJanuary period. In the event that during any month of the JuneJanuary period the fund balance is insufficient to cover the

amount of credits that are due, the assessment should be based

upon the amount of credits that would have been disbursed had the

fund balance been sufficient.

(b) The market administrator shall announce publicly on or

before the 5th day of the month (except as provided in § 1000.90)

the assessment pursuant to paragraph (a) of this section for the

following month.

§ 1007.82 Payments from the transportation credit balancing fund.

(a) Payments from the transportation credit balancing fund

to handlers and cooperative associations requesting transportation

credits shall be made as follows:
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(1) On or before the 13th day (except as provided in

§ 1000.90) after the end of each of the months of July through

December and any other month in which transportation credits are

in effect pursuant to paragraph (b) of this section, the market

administrator shall pay to each handler that received, and

reported pursuant to § 1007.30(a)(5), bulk milk transferred from a

plant fully regulated under another Federal order as described in

paragraph (c)(1) of this section or that received, and reported

pursuant to § 1007.30(a)(6), milk directly from producers’ farms

as specified in paragraph (c)(2) of this section, a preliminary

amount determined pursuant to paragraph (d) of this section to the

extent that funds are available in the transportation credit

balancing fund. If an insufficient balance exists to pay all of

the credits computed pursuant to this section, the market

administrator shall distribute the balance available in the

transportation credit balancing fund by reducing payments pro rata

using the percentage derived by dividing the balance in the fund

by the total credits that are due for the month. The amount of

credits resulting from this initial proration shall be subject to

audit adjustment pursuant to paragraph (a)(2) of this section;

(2) The market administrator shall accept adjusted requests

for transportation credits on or before the 20th day of the month 

following the month for which such credits were requested pursuant

to § 1007.32(a). After such date, a preliminary audit will be

conducted by the market administrator, who will recalculate any

necessary proration of transportation credit payments for the

preceding month pursuant to paragraph (a) of this section. 

Handlers will be promptly notified of an overpayment of credits

based upon this final computation and remedial payments to or from

the transportation credit balancing fund will be made on or before

the next payment date for the following month;

(3) Transportation credits paid pursuant to paragraphs

(a)(1) and (2) of this section shall be subject to final

verification by the market administrator pursuant to § 1000.77. 

Adjusted payments to or from the transportation credit balancing

fund will remain subject to the final proration established

pursuant to paragraph (a)(2) of this section; and

(4) In the event that a qualified cooperative association is

the responsible party for whose account such milk is received and

written documentation of this fact is provided to the market

administrator pursuant to § 1007.30(c)(3) prior to the date

payment is due, the transportation credits for such milk computed

pursuant to this section shall be made to such cooperative

association rather than to the operator of the pool plant at which

the milk was received.
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(b) The market administrator may extend the period during

which transportation credits are in effect (i.e., the

transportation credit period) to the months of January and June if

a written request to do so is received 15 days prior to the

beginning of the month for which the request is made and, after

conducting an independent investigation, finds that such extension

is necessary to assure the market of an adequate supply of milk

for fluid use. Before making such a finding, the market

administrator shall notify the Director of the Dairy Division and

all handlers in the market that an extension is being considered

and invite written data, views, and arguments. Any decision to

extend the transportation credit period must be issued in writing

prior to the first day of the month for which the extension is to

be effective. 

(c) Transportation credits shall apply to the following

milk:

(1) Bulk milk received from a plant regulated under another

Federal order, except Federal Order 1005, and allocated to Class I

milk pursuant to § 1000.44(a)(9); and

(2) Bulk milk received directly from the farms of dairy

farmers at pool distributing plants subject to the following

conditions:

(i) The quantity of such milk that shall be eligible for the

transportation credit shall be determined by multiplying the total

pounds of milk received from producers meeting the conditions of

this paragraph by the lower of:

(A) The marketwide estimated Class I utilization of all

handlers for the month pursuant to § 1000.45(a); or 

(B) The Class I utilization of all producer milk of the pool

plant operator receiving the milk after the computations described

in § 1000.44;

 (ii) The dairy farmer was not a “producer” under this order

during more than 2 of the immediately preceding months of February

through May and not more than 50 percent of the production of the

dairy farmer during those 2 months, in aggregate, was received as

producer milk under this order during those 2 months; and

(iii) The farm on which the milk was produced is not located

within the specified marketing area of this order or the marketing

area of Federal Order 1005.

(d) Transportation credits shall be computed as follows:

(1) The market administrator shall subtract from the pounds

of milk described in paragraphs (c)(1) and (2) of this section the

pounds of bulk milk transferred from the pool plant receiving the

supplemental milk if milk was transferred to a nonpool plant on

the same calendar day that the supplemental milk was received. 
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For this purpose, the transferred milk shall be subtracted from

the most distant load of supplemental milk received, and then in

sequence with the next most distant load until all of the

transfers have been offset;

(2) With respect to the pounds of milk described in

paragraph (c)(1) of this section that remain after the

computations described in paragraph (d)(1) of this section, the

market administrator shall:

(i) Determine the shortest hard-surface highway distance

between the shipping plant and the receiving plant;

(ii) Multiply the number of miles so determined by 0.35

cent;

(iii) Subtract the applicable Class I differential in

§ 1000.52 for the county in which the shipping plant is located

from the Class I differential applicable for the county in which

the receiving plant is located;

(iv) Subtract any positive difference computed in paragraph

(d)(2)(iii) of this section from the amount computed in paragraph

(d)(2)(ii) of this section; and

(v) Multiply the remainder computed in paragraph (d)(2)(iv)

of this section by the hundredweight of milk described in

paragraph (d)(2) of this section. 

(3) For the remaining milk described in paragraph (c)(2) of

this section after computations described in paragraph (d)(1) of

this section, the market administrator shall:

(i) Determine an origination point for each load of milk by

locating the nearest city to the last producer’s farm from which

milk was picked up for delivery to the receiving pool plant;

(ii) Determine the shortest hard-surface highway distance

between the receiving pool plant and the origination point;

(iii) Subtract 85 miles from the mileage so determined;

(iv) Multiply the remaining miles so computed by 0.35 cent;

(v) Subtract the Class I differential specified in § 1000.52

applicable for the county in which the origination point is

located from the Class I differential applicable at the receiving

pool plant’s location; 

(vi) Subtract any positive difference computed in paragraph

(d)(3)(v) of this section from the amount computed in paragraph

(d)(3)(iv) of this section; and 

(vii) Multiply the remainder computed in paragraph

(d)(3)(vi) of this section by the hundredweight of milk described

in paragraph (d)(3) of this section.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1007.85 Assessment for order administration.

See § 1000.85.
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§ 1007.86 Deduction for marketing services.

See § 1000.86. 
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PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

Sec.

1030.1 General provisions.

DEFINITIONS

1030.2 Upper Midwest marketing area.

1030.3 Route disposition.

1030.4 Plant.

1030.5 Distributing plant.

1030.6 Supply plant.

1030.7 Pool plant.

1030.8 Nonpool plant.

1030.9 Handler.

1030.10 Producer-handler.

1030.11 [Reserved]

1030.12 Producer.

1030.13 Producer milk.

1030.14 Other source milk.

1030.15 Fluid milk product.

1030.16 Fluid cream product.

1030.17 [Reserved]

1030.18 Cooperative association.

1030.19 Commercial food processing establishment. 

HANDLER REPORTS

1030.30 Reports of receipts and utilization.

1030.31 Payroll reports.

1030.32 Other reports. 

CLASSIFICATION OF MILK

1030.40 Classes of utilization.

1030.41 [Reserved]

1030.42 Classification of transfers and diversions.

1030.43 General classification rules.

1030.44 Classification of producer milk.

1030.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES 

1030.50 Class prices, component prices, and advanced pricing

 factors.

1030.51 Class I differential and price.

1030.52 Adjusted Class I differentials.

1030.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1030.54 Equivalent price.
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1030.55 Transportation credits and assembly credits.

PRODUCER PRICE DIFFERENTIAL

1030.60 Handler's value of milk.

1030.61 Computation of producer price differential.

1030.62 Announcement of producer prices.

PAYMENTS FOR MILK 

1030.70 Producer-settlement fund.

1030.71 Payments to the producer-settlement fund.

1030.72 Payments from the producer-settlement fund.

1030.73 Payments to producers and to cooperative associations.

1030.74 [Reserved]

1030.75 Plant location adjustments for producer milk and 

 nonpool milk.

1030.76 Payments by a handler operating a partially regulated

 distributing plant.

1030.77 Adjustment of accounts.

1030.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1030.85 Assessment for order administration.

1030.86 Deduction for marketing services. 

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS

§ 1030.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1030, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1030.2 Upper Midwest 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:

Illinois Counties

Boone, Carroll, Cook, De Kalb, Du Page, Jo Daviess, Kane,

Kendall, Lake, Lee, McHenry, Ogle, Stephenson, Will, and 

Winnebago.

Iowa Counties

Howard, Kossuth, Mitchell, Winnebago, Winneshiek, and Worth.
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Michigan Counties

Delta, Dickinson, Gogebic, Iron, Menominee, and Ontonagon.

Minnesota

All counties except Lincoln, Nobles, Pipestone, and Rock.

North Dakota Counties

Barnes, Cass, Cavalier, Dickey, Grand Forks, Griggs, La

Moure, Nelson, Pembina, Ramsey, Ransom, Richland, Sargent, Steele,

Traill, and Walsh.

South Dakota Counties

Brown, Day, Edmunds, Grant, Marshall, McPherson, Roberts, and

Walworth.
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Wisconsin Counties

All counties except Crawford and Grant. 

§ 1030.3 Route disposition.

See § 1000.3.

§ 1030.4 Plant.

See § 1000.4.

§ 1030.5 Distributing plant.

See § 1000.5.

§ 1030.6 Supply plant.

See § 1000.6.

§ 1030.7 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 section

7(b) of any other Federal milk order, from which during the month

15 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 15 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 ultra-pasteurized 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 § 1030.12(b)) and handlers described in

§ 1000.9(c), including milk diverted pursuant to § 1030.13,

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 (e) of this section shall count as
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qualifying shipments for the purpose of meeting the increased

shipments:

(i) Pool plants described in § 1030.7(a), (b) and (e); 

(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 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 agreed-upon

Class II, Class III, or Class IV utilization.

 (2) The operator of a supply plant may include as qualifying

shipments under this paragraph milk delivered directly from

producers’ farms pursuant to §§ 1000.9(c) or 1030.13(c) to plants

described in paragraphs (a), (b), and (e) of this section.

(3) 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) [Reserved] 

(e) 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:

(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.

(f) A system of 2 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
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as a single plant subject to the following additional

requirements:

(1) Each plant in the system is located within the marketing

area or was a pool supply plant pursuant to § 1030.7(c) for each

of the 3 months immediately preceding the effective date of this

paragraph so long as it continues to maintain pool status. 

Cooperative associations may not use shipments pursuant to

§ 1000.9(c) to qualify 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 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 that 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, 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.

(g) The applicable shipping percentages of paragraphs (c) 

and (f) of this section and the diversion limits described in

§ 1030.13(d)(2) may be increased or decreased, for all or part of

the marketing area, by the market administrator if the market
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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 distribution 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 this order, 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 be requested in
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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, 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.

§ 1030.8 Nonpool plant.

See § 1000.8.

§ 1030.9 Handler.

See § 1000.9.

§ 1030.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is route disposition in the marketing during the

month;

(b) Receives fluid milk from own farm production or milk

that is fully subject to the pricing and pooling provisions of

this or any other Federal order;

(c) Receives at its plant or acquires for route disposition

no more than 150,000 pounds of fluid milk products from handlers

fully regulated under any Federal order. This limitation shall

not apply if the producer-handler’s own farm production is less

than 150,000 pounds during the month;

(d) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products; and

(e) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)

and the processing and packaging operations are the producerhandler’s own enterprise and at its own risk.

§ 1030.11 [Reserved]

§ 1030.12 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:
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(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1030.13; 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 § 1030.13(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.

§ 1030.13 Producer milk.

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 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, 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 this order (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;
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(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 § 1030.30(c) provided

that not less than 10 percent of such receipts are delivered to

plants described in § 1030.7(c)(1)(i) through (iii). These

percentages are subject to any adjustments that may be made

pursuant to § 1030.7(g); and

(3) Diverted milk shall be priced at the location of the

plant to which diverted.

§ 1030.14 Other source milk.

See § 1000.14.

§ 1030.15 Fluid milk product.

See § 1000.15.

§ 1030.16 Fluid cream product.

See § 1000.16.

§ 1030.17 [Reserved]

§ 1030.18 Cooperative association.

See § 1000.18.

§ 1030.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1030.30 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,

pounds of solids-not-fat other than protein (other solids), and

the value of the somatic cell adjustment pursuant to § 1000.50(p),

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; and
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(4) Such other information with respect to the receipts and

utilization of skim milk, butterfat, milk protein, other nonfat

solids, and somatic cell information, 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), and the value of the somatic cell adjustment pursuant to

§ 1000.50(p), 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.

§ 1030.31 Payroll reports.

(a) On or before the 22nd day after the end of each month,

each handler that operates a pool plant pursuant to § 1030.7 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 § 1030.73(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.

§ 1030.32 Other reports.

In addition to the reports required pursuant to §§ 1030.30

and 1030.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1030.40 Classes of utilization.

See § 1000.40.

§ 1030.41 [Reserved]

§ 1030.42 Classification of transfers and diversions.
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See § 1000.42.

§ 1030.43 General classification rules.

See § 1000.43.

§ 1030.44 Classification of producer milk.

See § 1000.44.

§ 1030.45 Market administrator’s reports and announcements

concerning classification.

See § 1000.45.

CLASS PRICES

§ 1030.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.

§ 1030.51 Class I differential and price.

The Class I differential shall be the differential

established for Cook County, Illinois, which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for Cook County, Illinois.

§ 1030.52 Adjusted Class I differentials.

See § 1000.52.

§ 1030.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1030.54 Equivalent price.

See § 1000.54.

§ 1030.55 Transportation credits and assembly credits.

(a) Each handler operating a pool distributing plant

described in § 1030.7(a), (b), or (e) that receives bulk milk from

another pool plant shall receive a transportation credit for such

milk computed as follows:

(1) Determine the hundredweight of milk eligible for the

credit by completing the steps in paragraph (c) of this section;

(2) Multiply the hundredweight of milk eligible for the

credit by .28 cents times the number of miles between the

transferor plant and the transferee plant; 

(3) Subtract the effective Class I price at the transferor

plant from the effective Class I price at the transferee plant;

(4) Multiply any positive amount resulting from the

subtraction in paragraph (a)(3) of this section by the

hundredweight of milk eligible for the credit; and

(5) Subtract the amount computed in paragraph (a)(4) of this

section from the amount computed in paragraph (a)(2) of this

section. If the amount computed in paragraph (a)(4) of this

section exceeds the amount computed in paragraph (a)(2) of this

section, the transportation credit shall be zero. 
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(b) Each handler operating a pool distributing plant

described in § 1030.7(a), (b), or (e) that receives milk from

dairy farmers, each handler that transfers or diverts bulk milk

from a pool plant to a pool distributing plant, and each handler

described in § 1000.9(c) that delivers producer milk to a pool

distributing plant shall receive an assembly credit on the portion

of such milk eligible for the credit pursuant to paragraph (c) of

this section. The credit shall be computed by multiplying the

hundredweight of milk eligible for the credit by 8 cents.

(c) The following procedure shall be used to determine the

amount of milk eligible for transportation and assembly credits

pursuant to paragraphs (a) and (b) of this section:

(1) At each pool distributing plant, determine the aggregate

quantity of Class I milk, excluding beginning inventory of

packaged fluid milk products;

(2) Subtract the quantity of packaged fluid milk products

received at the pool distributing plant from other pool plants and

from nonpool plants if such receipts are assigned to Class I;

(3) Subtract the quantity of bulk milk shipped from the pool

distributing plant to other plants to the extent that such milk is

classified as Class I milk;

(4) Subtract the quantity of bulk milk received at the pool

distributing plant from other order plants and unregulated supply

plants that is assigned to Class I pursuant to §§ 1000.43(d) and

1000.44; and

(5) Assign the remaining quantity pro rata to physical

receipts during the month from:

(i) Producers;

(ii) Handlers described in § 1000.9(c); and

(iii) Other pool plants.

(d) For purposes of this section, the distances to be

computed shall be determined by the market administrator using the

shortest available state and/or Federal highway mileage. Mileage

determinations are subject to redetermination at all times. In

the event a handler requests a redetermination of the mileage

pertaining to any plant, the market administrator shall notify the

handler of such redetermination within 30 days after the receipt

of such request. Any financial obligations resulting from a

change in mileage shall not be retroactive for any periods prior

to the redetermination by the market administrator.

PRODUCER PRICE DIFFERENTIAL

§ 1030.60 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
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the handler's pool plants and of 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 (i)

of this section and subtracting from that total amount the values

computed in paragraphs (j) and (k) 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 pounds 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.

(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) Compute an adjustment for the somatic cell content of

producer milk by multiplying the values reported pursuant to

§ 1030.30(a)(1) and (c)(1) by the percentage of total producer

milk allocated to Class II, Class III, and Class IV pursuant to

§ 1000.44(c);

(f) Multiply the pounds of skim milk and butterfat overage

assigned to each class pursuant to § 1000.44(a)(11) and the
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corresponding step of § 1000.44(b) by the skim milk prices and

butterfat prices applicable to each class.

(g) 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);

(h) 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.

(i) 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.

(j) 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).

(k) Compute the amount of credits applicable pursuant to

§ 1030.55.

§ 1030.61 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 § 1030.71
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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 aforementioned conditions, the market

administrator shall compute the producer price differential in the

following manner:

(a) Combine into one total the values computed pursuant to

§ 1030.60 for all handlers required to file reports prescribed in

§ 1030.30;

(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 § 1030.60 by the protein price, the other solids

price, and the butterfat price, respectively, and the total value

of the somatic cell adjustment pursuant to § 1030.30(a)(1) and

(c)(1);

(c) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1030.75;

(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 § 1030.60(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.

§ 1030.62 Announcement of producer prices. 

On or before the 13th 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 somatic cell adjustment rate;

(g) The average butterfat, nonfat solids, protein and other

solids content of producer milk; and

(h) The statistical uniform price for milk containing 3.5

percent butterfat, computed by combining the Class III price and

the producer price differential.
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PAYMENTS FOR MILK

§ 1030.70 Producer-settlement fund.

See § 1000.70.

§ 1030.71 Payments to the producer-settlement 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 15th 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 § 1030.60.

(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 § 1030.75;

(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;

(3) The total value of the somatic cell adjustment to

producer milk; and

(4) An amount obtained by multiplying the pounds of skim

milk and butterfat for which a value was computed pursuant to

§ 1030.60(i) by the producer price differential as adjusted

pursuant to § 1030.75 for the location of the plant from which

received. 

§ 1030.72 Payments from the producer-settlement fund.

No later than the 16th 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 § 1030.71(b) exceeds the amount computed pursuant to

§ 1030.71(a). If, at such time, the balance in the producersettlement 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.

§ 1030.73 Payments to producers and to cooperative associations.

(a) 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
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or before the 26th 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 17th day after the end of the month (except as

provided in § 1000.90) in an amount equal to 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

§ 1030.75;

(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) The hundredweight of milk received times the somatic

cell adjustment for the month;

(vi) Less any payment made pursuant to paragraph (a)(1) of

this section;

(vii) 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; and

(viii) Less deductions for marketing services pursuant to

§ 1000.86.

(b) Payments for milk received from cooperative association

members. On or before the day prior to the dates specified in

paragraphs (a)(1) and (a)(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 (a)(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 (a)(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
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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;

(viii) The hundredweight of Class II, Class III, and

Class IV milk times the somatic cell adjustment; and

(ix) Add together the amounts computed in paragraphs

(c)(2)(i) through (viii) 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 § 1030.75;
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(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) The hundredweight of milk received times the somatic

cell adjustment for the month; and

(vi) 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) If a handler has not received full payment from the

market administrator pursuant to § 1030.72 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) 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 producer-settlement fund to the

handler or to the lawful claimant, as the case may be.

(f) 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 somatic cell count of the producer's milk;
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(5) The minimum rate or rates at which payment to the

producer is required pursuant to this order;

(6) The rate used in making payment if the rate is other

than the applicable minimum rate;

(7) The amount, or rate per hundredweight, or rate per pound

of component, and the nature of each deduction claimed by the

handler; and

(8) The net amount of payment to the producer or cooperative

association.

§ 1030.74 [Reserved]

§ 1030.75 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 § 1030.51 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 §§ 1030.73 and 1000.76. 

§ 1030.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1030.77 Adjustment of accounts.

See § 1000.77.

§ 1030.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1030.85 Assessment for order administration.

See § 1000.85.

§ 1030.86 Deduction for marketing services.

See § 1000.86.
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PART 1032 - MILK IN THE CENTRAL MARKETING AREA

Subpart - Order Regulating Handling

GENERAL PROVISIONS

Sec.

1032.1 General provisions. 

DEFINITIONS

1032.2 Central marketing area. 

1032.3 Route disposition.

1032.4 Plant.

1032.5 Distributing plant.

1032.6 Supply plant.

1032.7 Pool plant. 

1032.8 Nonpool plant.

1032.9 Handler.

1032.10 Producer-handler.

1032.11 [Reserved]

1032.12 Producer. 

1032.13 Producer milk. 

1032.14 Other source milk.

1032.15 Fluid milk product.

1032.16 Fluid cream product.

1032.17 [Reserved]

1032.18 Cooperative association.

1032.19 Commercial food processing establishment.

HANDLER REPORTS

1032.30 Reports of receipts and utilization. 

1032.31 Payroll reports. 

1032.32 Other reports. 

CLASSIFICATION OF MILK

1032.40 Classes of utilization.

1032.41 [Reserved]

1032.42 Classification of transfers and diversions.

1032.43 General classification rules.

1032.44 Classification of producer milk.

1032.45 Market administrator's reports and announcements

concerning classification.

CLASS PRICES

1032.50 Class prices, component prices, and advanced pricing

 factors.

1032.51 Class I differential and price.

1032.52 Adjusted Class I differentials.

1032.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1032.54 Equivalent price.
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PRODUCER PRICE DIFFERENTIAL

1032.60 Handler's value of milk.

1032.61 Computation of producer price differential.

1032.62 Announcement of producer prices.
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PAYMENTS FOR MILK

1032.70 Producer-settlement fund.

1032.71 Payments to the producer-settlement fund.

1032.72 Payments from the producer-settlement fund.

1032.73 Payments to producers and to cooperative associations.

1032.74 [Reserved]

1032.75 Plant location adjustments for producer milk and 

nonpool milk.

1032.76 Payments by a handler operating a partially regulated

distributing plant.

1032.77 Adjustment of accounts.

1032.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1032.85 Assessment for order administration.

1032.86 Deduction for marketing services.

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

Subpart - Order Regulating Handling

GENERAL PROVISIONS

§ 1032.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1032, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1032.2 Central 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:

Colorado Counties

Adams, Arapahoe, Baca, Bent, Boulder, Chaffee, Clear Creek,

Cheyenne, Crowley, Custer, Delta, Denver, Douglas, Eagle, El Paso,

Elbert, Freemont, Garfield, Gilpin, Gunnison, Huerfano, Jefferson,

Kiowa, Kit Carson, Lake, Larimer, Las Animas, Lincoln, Logan,

Mesa, Montrose, Morgan, Otero, Park, Phillips, Pitkin, Prowers,

Pueblo, Sedgwick, Summit, Teller, Washington, Weld, and Yuma.

Illinois Counties

Adams, Alexander, Bond, Brown, Bureau, Calhoun, Cass,

Champaign, Christian, Clark, Clay, Clinton, Coles, Crawford,

Cumberland, De Witt, Douglas, Edgar, Edwards, Effingham, Fayette,

Ford, Franklin, Fulton, Gallatin, Greene, Grundy, Hamilton,
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Hancock, Hardin, Henderson, Henry, Iroquois, Jackson, Jasper,

Jefferson, Jersey, Johnson, Kankakee, Knox, La Salle, Lawrence,

Livingston, Logan, McDonough, McLean, Macon, Macoupin, Madison,

Marion, Marshall, Mason, Massac, Menard, Mercer, Monroe,

Montgomery, Morgan, Moultrie, Peoria, Perry, Piatt, Pike, Pope,

Pulaski, Putnam, Randolph, Richland, Rock Island, Saline,

Sangamon, Schuyler, Scott, Shelby, St. Clair, Stark, Tazewell,

Union, Vermilion, Wabash, Warren, Washington, Wayne, White,

Whiteside, Williamson, and Woodford.

Iowa Counties

All Iowa counties except Howard, Kossuth, Mitchell,

Winnebago, Winneshiek, and Worth. 

Kansas

All of the State of Kansas.

Minnesota Counties

Lincoln, Nobles, Pipestone, and Rock.

Missouri Counties and Cities

The counties of Andrew, Atchison, Bates, Buchanan, Caldwell,

Carroll, Cass, Clay, Clinton, Daviess, De Kalb, Franklin, Gentry,

Grundy, Harrison, Henry, Hickory, Holt, Jackson, Jefferson,

Johnson, Lafayette, Lincoln, Livingston, Mercer, Nodaway, Pettis,

Platte, Putnam, Ray, Saline, Schuyler, St. Charles, St. Clair,

Ste. Genevieve, St. Louis, Sullivan, Warren, and Worth; and the

city of St. Louis.

Nebraska Counties

Adams, Antelope, Boone, Buffalo, Burt, Butler, Cass, Cedar,

Chase, Clay, Colfax, Cuming, Custer, Dakota, Dawson, Dixon, Dodge,

Douglas, Dundy, Fillmore, Franklin, Frontier, Furnas, Gage,

Gosper, Greeley, Hall, Hamilton, Harlan, Hayes, Hitchcock, Howard,

Jefferson, Johnson, Kearney, Keith, Knox, Lancaster, Lincoln,

Madison, Merrick, Nance, Nemaha, Nuckolls, Otoe, Pawnee, Perkins,

Phelps, Pierce, Platte, Polk, Red Willow, Richardson, Saline,

Sarpy, Saunders, Seward, Sherman, Stanton, Thayer, Thurston,

Valley, Washington, Wayne, Webster, and York. 

Oklahoma

All of the State of Oklahoma.

South Dakota Counties

Aurora, Beadle, Bon Homme, Brookings, Clark, Clay, Codington,

Davison, Deuel, Douglas, Hamlin, Hanson, Hutchinson, Jerauld,

Kingsbury, Lake, Lincoln, McCook, Miner, Minnehaha, Moody,

Sanborn, Spink, Turner, Union, and Yankton.

Wisconsin Counties

Crawford and Grant.

§ 1032.3 Route disposition.

See § 1000.3.
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§ 1032.4 Plant.

See § 1000.4.

§ 1032.5 Distributing plant.

See § 1000.5.

§ 1032.6 Supply plant.

See § 1000.6.

§ 1032.7 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), (d), 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 section

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 ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which the quantity of bulk fluid

milk products transferred or diverted to plants described in

paragraph (a) or (b) of this section during each of the months of

September through November and January is 35 percent or more of

the total Grade A milk received at the plant from dairy farmers

(except dairy farmers described in § 1032.12(b)) and handlers

described in § 1000.9(c), including milk diverted by the plant

operator, and 25 percent for all other months, subject to the

following conditions:

(1) A supply plant that has qualified as a pool plant during

each of the immediately preceding months of August through April

shall continue to so qualify in each of the following months of

May through July, unless the plant operator files a written

request with the market administrator that such plant not be a

pool plant, such nonpool status to be effective the first month
-576-

following such request and thereafter until the plant qualifies as

a pool plant on the basis of milk shipments;

(2) A pool plant operator may include as qualifying

shipments milk diverted to pool distributing plants pursuant to

§ 1032.13(c);

(3) 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;

(4) The operator of a supply plant may include as qualifying

shipments transfers of fluid milk products to distributing plants

regulated under any other Federal order, except that credit for

such transfers shall be limited to the amount of milk, including

milk shipped directly from producers’ farms, delivered to

distributing plants qualified as pool plants pursuant to paragraph

(a) or (b) of this section; and

(5) No plant may qualify as a pool plant due to a reduction

in the shipping percentage pursuant to paragraph (g) of this

section unless it has been a pool supply plant during each of the

immediately preceding 3 months.

(d) A plant located in the marketing area and operated by a

cooperative association if, during the month or the immediately

preceding 12-month period, 35 percent or more of the producer milk

of members of the association (and any producer milk of nonmembers

and members of another cooperative association which may be

marketed by the cooperative association) is physically received in

the form of bulk fluid milk products (excluding concentrated milk

transferred to a distributing plant for an agreed-upon use other

than Class I) at plants specified in paragraph (a) or (b) of this

section either directly from farms or by transfer from supply

plants operated by the cooperative association and from plants of

the cooperative association for which pool plant status has been

requested under this paragraph subject to the following

conditions:

(1) The plant does not qualify as a pool plant under

paragraph (a), (b) or (c) of this section or under comparable

provisions of another Federal order; and

(2) The plant is approved by a duly constituted regulatory

agency for the handling of milk approved for fluid consumption in

the marketing area.

(e) 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
-577-

(a) of this section subject to the following additional

requirements:

(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 must be located in a pricing zone providing the same

or a lower Class I price than the price applicable at the

distributing plant included in the unit pursuant to paragraph

(e)(1) of this section; 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.

(f) A system of supply plants may qualify for pooling if 2

or more plants operated by one or more handlers meet the

applicable percentage 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;

(2) The handler(s) establishing the system submits a written

request to the market administrator on or before September 1

requesting that such plants qualify as a system for the period of

September through August of the following year. Such request will

contain a list of the plants participating in the system;

(3) Each plant included within a pool supply plant system

shall continue each month as a plant in the system through the

following August 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 August. No plant may

be added in any subsequent month through the following August to a

system that qualifies in September; and

(4) If a system fails to qualify under the requirements of

this paragraph, 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
-578-

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.

(g) The applicable shipping percentages of paragraphs (c),

(d), and (f) of this section 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 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. On the basis of a

written application made by the plant operator at least 15 days

prior to the date for which a determination of the market

administrator is to be effective, the market administrator may

determine that the route disposition in the respective marketing

areas to be used for purposes of this paragraph shall exclude (for

a specified period of time) route disposition made under limited

term contracts to governmental bases and institutions;

(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
-579-

have a majority of its route distribution 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 this order, 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 be requested in

advance and in writing by the handler and must be approved by the

market administrator. 

§ 1032.8 Nonpool plant.

See § 1000.8.

§ 1032.9 Handler.

See § 1000.9.

§ 1032.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is route disposition in the marketing area during the

month;

(b) Receives fluid milk from own farm production or milk

that is fully subject to the pricing and pooling provisions of

this or any other Federal order;

(c) Receives at its plant or acquires for route disposition

no more than 150,000 pounds of fluid milk products from handlers

fully regulated under any Federal order. This limitation shall

not apply if the producer-handler’s own farm production is less

than 150,000 pounds during the month;

(d) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products; and

(e) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)

and the processing and packaging operations are the producerhandler’s own enterprise and at its own risk.

§ 1032.11 [Reserved]

§ 1032.12 Producer.
-580-

(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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1032.13; 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 § 1032.13(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.

§ 1032.13 Producer milk.

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 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, subject to the following conditions:

(1) Milk of a dairy farmer shall not be eligible for

diversion until at least one day’s production of such dairy farmer

has been physically received as producer milk at a pool plant and

the dairy farmer has continuously retained producer status since

that time. If a dairy farmer loses producer status under this

order (except as a result of a temporary loss of Grade A

approval), the dairy farmer’s milk shall not be eligible for
-581-

diversion until milk of the dairy farmer has been physically

received as producer milk at a pool plant;

(2) Of the quantity of producer milk received during the

month (including diversions, but excluding the quantity of

producer milk received from a handler described in § 1000.9(c))

the handler diverts to nonpool plants not more than 65 percent

during the months of September through November and January, and

not more than 75 percent during the months of February through

April and December;

(3) Diverted milk shall be priced at the location of the

plant to which diverted;

(4) Any milk diverted in excess of the limits prescribed in

paragraph (d)(2) of this section shall not be producer milk. If

the diverting handler or cooperative association fails to

designate the dairy farmers’ deliveries that are not to be

producer milk, no milk diverted by the handler or cooperative

association during the month to a nonpool plant shall be producer

milk; and

(5) The applicable diversion limits in paragraph (d)(2) of

this section may be increased or decreased by the market

administrator if the market administrator finds that such revision

is necessary to assure orderly marketing and efficient handling of

milk in the marketing area. Before making such a finding, the

market administrator shall investigate the need for the revision

either on the market administrator’s own initiative or at the

request of interested persons 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 a revision

might be appropriate, the market administrator shall issue a

notice stating that the revision is being considered and inviting

written data, views, and arguments. Any decision to revise an

applicable percentage must be issued in writing at least one day

before the effective date.

§ 1032.14 Other source milk.

See § 1000.14.

§ 1032.15 Fluid milk product.

See § 1000.15.

§ 1032.16 Fluid cream product.

See § 1000.16.

§ 1032.17 [Reserved]

§ 1032.18 Cooperative association.

See § 1000.18.

§ 1032.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS
-582-

§ 1032.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 7th 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 pursuant to

§ 1032.7 shall report for each of its operations the following

information:

(1) Product pounds, pounds of butterfat, pounds of protein,

pounds of solids-not-fat other than protein (other solids), and

the value of the somatic cell adjustment pursuant to § 1000.50(p),

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; and

(4) Such other information with respect to the receipts and

utilization of skim milk, butterfat, milk protein, other nonfat

solids, and somatic cell information, 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), and the value of the somatic cell adjustment pursuant to

§ 1000.50(p), 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
-583-

utilization of milk and milk products in such manner as the market

administrator may prescribe.

§ 1032.31 Payroll reports.

(a) On or before the 20th day after the end of each month,

each handler that operates a pool plant pursuant to § 1032.7 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 § 1032.73(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.

§ 1032.32 Other reports.

In addition to the reports required pursuant to §§ 1032.30

and 1032.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1032.40 Classes of utilization.

See § 1000.40.

§ 1032.41 [Reserved]

§ 1032.42 Classification of transfers and diversions.

See § 1000.42.

§ 1032.43 General classification rules.

See § 1000.43.

§ 1032.44 Classification of producer milk.

See § 1000.44.

§ 1032.45 Market administrator’s reports and announcements 

concerning classification.

See § 1000.45.

CLASS PRICES

§ 1032.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.

§ 1032.51 Class I differential and price.

The Class I differential shall be the differential

established for Jackson County, Missouri, which is reported in §

1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for Jackson County, Missouri.

§ 1032.52 Adjusted Class I differentials.

See § 1000.52.
-584-

§ 1032.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1032.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1032.60 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 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 (i)

of this section and subtracting from that total amount the value

computed in paragraph (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 pounds 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.

(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
-585-

(2) Add an amount obtained by multiplying the pounds of

butterfat in Class IV by the butterfat price.

(e) Compute an adjustment for the somatic cell content of

producer milk by multiplying the values reported pursuant to

§ 1032.30(a)(1) and (c)(1) by the percentage of total producer

milk allocated to Class II, Class III, and Class IV pursuant to

§ 1000.44(c);

(f) 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.

(g) 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 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);

(h) 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

a plant regulated under other Federal orders and bulk concentrated

fluid milk products from pool plants, plants regulated under other

Federal orders, and unregulated supply plants.

(i) 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.

(j) 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
-586-

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).

§ 1032.61 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 § 1032.71

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 aforementioned conditions, the market

administrator shall compute the producer price differential in the

following manner:

(a) Combine into one total the values computed pursuant to

§ 1032.60 for all handlers required to file reports prescribed in

§ 1032.30;

(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 § 1032.60 by the protein price, the other solids

price, and the butterfat price, respectively, and the total value

of the somatic cell adjustment pursuant to § 1032.30(a)(1) and

(c)(1);

(c) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1032.75;

(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 § 1032.60(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.

§ 1032.62 Announcement of producer prices. 

On or before the 11th 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;
-587-

(e) The butterfat price;

(f) The somatic cell adjustment rate;

(g) The average butterfat, protein, nonfat solids, and other

solids content of producer milk; and

(h) The statistical uniform price for milk containing 3.5

percent butterfat, computed by combining the Class III price and

the producer price differential.

PAYMENTS FOR MILK

§ 1032.70 Producer-settlement fund.

See § 1000.70.

§ 1032.71 Payments to the producer-settlement 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 14th 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 § 1032.60.

(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 § 1032.75;

(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;

(3) The total value of the somatic cell adjustment to

producer milk; and

(4) An amount obtained by multiplying the pounds of skim

milk and butterfat for which a value was computed pursuant to

§ 1032.60(i) by the producer price differential as adjusted

pursuant to § 1032.75 for the location of the plant from which

received. 

§ 1032.72 Payments from the producer-settlement fund.

No later than the 15th 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 § 1032.71(b) exceeds the amount computed pursuant to

§ 1032.71(a). If, at such time, the balance in the producersettlement 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.
-588-

§ 1032.73 Payments to producers and to cooperative associations.

(a) 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 26th 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 17th day after the end of the month (except as

provided in § 1000.90) in an amount equal to 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

§ 1032.75;

(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) The hundredweight of milk received times the somatic

cell adjustment for the month;

(vi) Less any payment made pursuant to paragraph (a)(1) of

this section;

(vii) Less proper deductions authorized in writing by such

producer and plus or minus adjustments for errors in previous

payments to such producer; and

(viii) Less deductions for marketing services pursuant to

§ 1000.86.

(b) Payments for milk received from cooperative association

members. On or before the day prior to the dates specified in

paragraphs (a)(1) and (a)(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 (a)(2) of this section.
-589-

(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 (a)(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

prices to be used shall be the prices 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;

(viii) The hundredweight of Class II, Class III, and

Class IV milk times the somatic cell adjustment; and
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(ix) Add together the amounts computed in paragraphs

(c)(2)(i) through (viii) 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 § 1032.75;

(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) The hundredweight of milk received times the somatic

cell adjustment for the month; and

(vi) 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) If a handler has not received full payment from the

market administrator pursuant to § 1032.72 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) 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 producer-settlement fund to the

handler or to the lawful claimant, as the case may be.

(f) 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:
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(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 somatic cell count of the producer's milk;

(5) The minimum rate or rates at which payment to the

producer is required pursuant to this order;

(6) The rate used in making payment if the rate is other

than the applicable minimum rate;

(7) The amount, or rate per hundredweight, or rate per pound

of component, and the nature of each deduction claimed by the

handler; and

(8) The net amount of payment to the producer or cooperative

association.

§ 1032.74 [Reserved]

§ 1032.75 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 § 1032.51 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 §§ 1032.73 and 1000.76. 

§ 1032.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1032.77 Adjustment of accounts.

See § 1000.77.

§ 1032.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1032.85 Assessment for order administration.

See § 1000.85.

§ 1032.86 Deduction for marketing services.

See § 1000.86. 
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PART 1033--MILK IN THE MIDEAST MARKETING AREA

Subpart - Order Regulating Handling

GENERAL PROVISIONS

Sec. 

1033.1 General provisions. 

DEFINITIONS 

1033.2 Mideast marketing area.

1033.3 Route disposition.

1033.4 Plant.

1033.5 Distributing plant.

1033.6 Supply plant. 

1033.7 Pool plant.

1033.8 Nonpool plant.

1033.9 Handler. 

1033.10 Producer-handler. 

1033.11 [Reserved]

1033.12 Producer. 

1033.13 Producer milk.

1033.14 Other source milk.

1033.15 Fluid milk product.

1033.16 Fluid cream product.

1033.17 [Reserved]

1033.18 Cooperative association.

1033.19 Commercial food processing establishment.

HANDLER REPORTS

1033.30 Reports of receipts and utilization. 

1033.31 Payroll reports. 

1033.32 Other reports. 

CLASSIFICATION OF MILK

1033.40 Classes of utilization.

1033.41 [Reserved]

1033.42 Classification of transfers and diversions.

1033.43 General classification rules.

1033.44 Classification of producer milk.

1033.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES 

1033.50 Class prices, component prices, and advanced pricing

 factors. 

1033.51 Class I differential and price. 

1033.52 Adjusted Class I differentials. 

1033.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1033.54 Equivalent price.
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PRODUCER PRICE DIFFERENTIAL

1033.60 Handler's value of milk.

1033.61 Computation of producer price differential.

1033.62 Announcement of producer prices.
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PAYMENTS FOR MILK 

1033.70 Producer-settlement fund. 

1033.71 Payments to the producer-settlement fund.

1033.72 Payments from the producer-settlement fund. 

1033.73 Payments to producers and to cooperative associations. 

1033.74 [Reserved]

1033.75 Plant location adjustments for producer milk and

 nonpool milk.

1033.76 Payments by a handler operating a partially regulated

 distributing plant.

1033.77 Adjustment of accounts.

1033.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION 

1033.85 Assessment for order administration. 

1033.86 Deduction for marketing services. 

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

Subpart - Order Regulating Handling

GENERAL PROVISIONS

§ 1033.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1033, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1033.2 Mideast 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:

Ohio

The townships of Woodville and Madison in Sandusky County and

all other counties in Ohio except Erie, Huron, and Ottawa.

Indiana Counties

Adams, Allen, Bartholomew, Benton, Blackford, Boone, Brown,

Carroll, Cass, Clay, Clinton, Dearborn, Decatur, De Kalb,

Delaware, Elkhart, Fayette, Fountain, Franklin, Fulton, Grant,

Hamilton, Hancock, Hendricks, Henry, Howard, Huntington, Jackson,

Jasper, Jay, Jefferson, Jennings, Johnson, Kosciusko, Lagrange,

Lake, La Porte, Lawrence, Madison, Marion, Marshall, Miami,

Monroe, Montgomery, Morgan, Newton, Noble, Ohio, Owen, Parke,

Porter, Pulaski, Putnam, Randolph, Ripley, Rush, Shelby, St.
-595-

Joseph, Starke, Steuben, Switzerland, Tippecanoe, Tipton, Union,

Vermillion, Vigo, Wabash, Warren, Wayne, Wells, White, and

Whitley.
-596-

Kentucky Counties

Boone, Boyd, Bracken, Campbell, Floyd, Grant, Greenup,

Harrison, Johnson, Kenton, Lawrence, Lewis, Magoffin, Martin,

Mason, Pendleton, Pike, and Robertson.

Michigan Counties

All counties except Delta, Dickinson, Gogebic, Iron,

Menominee, and Ontonagon.

Pennsylvania Counties

Allegheny, Armstrong, Beaver, Butler, Crawford, Erie,

Fayette, Greene, Lawrence, Mercer, Venango, and Washington.

In Clarion County only the townships of Ashland, Beaver,

Licking, Madison, Perry, Piney, Richland, Salem, and Toby.

All of Westmoreland County except the townships of Cook,

Donegal, Fairfield, Ligonier, and St. Clair, and the boroughs of

Bolivar, Donegal, Ligonier, New Florence, and Seward. 

West Virginia Counties

Barbour, Boone, Brooke, Cabell, Calhoun, Doddridge, Fayette,

Gilmer, Hancock, Harrison, Jackson, Kanawha, Lewis, Lincoln,

Logan, Marion, Marshall, Mason, Mingo, Monongalia, Ohio,

Pleasants, Preston, Putnam, Raleigh, Randolph, Ritchie, Roane,

Taylor, Tucker, Tyler, Upshur, Wayne, Wetzel, Wirt, Wood, and

Wyoming.

§ 1033.3 Route disposition.

See § 1000.3.

§ 1033.4 Plant.

See § 1000.4.

§ 1033.5 Distributing plant.

See § 1000.5.

§ 1033.6 Supply plant.

See § 1000.6.

§ 1033.7 Pool plant.

Pool plant means a plant, unit of plants, or a 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) through (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 section

7(b) of any other Federal milk order, from which during the month

30 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
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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 30 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 ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which the quantity of bulk fluid

milk products shipped to, received at, and physically unloaded

into plants described in paragraph (a) or (b) of this section as a

percent of the Grade A milk received at the plant from dairy

farmers (except dairy farmers described in § 1033.12(b)) and

handlers described in § 1033.9(c), as reported in § 1033.30(a), is

not less than 30 percent of the milk received from dairy farmers,

including milk diverted pursuant to § 1033.13, subject to the

following conditions:

(1) Qualifying shipments pursuant to this paragraph may be

made to the following plants, except whenever the authority

provided in paragraph (g) of this section is applied to increase

the shipping requirements specified in this section, only

shipments to pool plants described in § 1033.7(a) and (b), shall

count as qualifying shipments for the purpose of meeting the

increased shipments:

(i) Pool plants described in § 1033.7(a) and (b); 

(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 transfers to such plants shall be

limited to the quantity shipped to pool distributing plants during

the month. Qualifying transfers to other order plants shall not

include transfers made on the basis of agreed-upon Class II,

Class III, or Class IV utilization.

 (2) The operator of a supply plant may include deliveries to

pool distributing plants directly from farms of producers pursuant

to § 1033.13(c) as up to 90 percent of the supply plant’s

qualifying shipments.

(3) 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.

(4) A supply plant that meets the shipping requirements of

this paragraph during each of the immediately preceding months of
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September through February shall be a pool plant during the

following months of March through August unless the milk received

at the plant fails to meet the requirements of a duly constituted

regulatory agency, the plant fails to meet a shipping requirement

instituted pursuant to paragraph (g) of this section, or the plant

operator requests nonpool status for the plant. Such nonpool

status shall be effective on the first day of the month following

the receipt of such request and thereafter until the plant again

qualifies as a pool plant on the basis of its deliveries to a pool

distributing plant(s). The automatic pool qualification of a

plant can be waived if the handler or cooperative requests in

writing to the market administrator the nonpool status of such

plant. The request must be made prior to the beginning of any

month during the March through August period. The plant shall be

a nonpool plant for such month and thereafter until it requalifies

under paragraph (c) of this section on the basis of actual

shipments therefrom. To requalify as a pool plant under paragraph

(d), (e) or (f) of this section, such plant must first have met

the percentage shipping requirements of paragraph (c) of this

section for 6 consecutive months.

(5) A supply plant that does not meet the minimum delivery

requirements specified in this paragraph to qualify for pool

status in the current month because a distributing plant to which

the supply plant delivered its fluid milk products during such

month failed to qualify as a pool plant pursuant to paragraph (a)

or (b) of this section shall continue to be a pool plant for the

current month if such supply plant qualified as a pool plant in

the 3 immediately preceding months.

(d) A plant operated by a cooperative association if, during

the month, 30 percent or more of the producer milk of members of

the association is delivered to a distributing pool plant(s) or to

a nonpool plant(s), and classification other than Class I is not

requested. Deliveries for qualification purposes may be made

directly from the farm or by transfer from such association’s

plant, subject to the following conditions:

(1) The cooperative requests pool status for such plant;

(2) The 30-percent delivery requirement may be met for the

current month or it may be met on the basis of deliveries during

the preceding 12-month period ending with the current month;

(3) The plant is approved by a duly constituted regulatory

authority to handle milk for fluid consumption; and

(4) The plant does not qualify as a pool plant under

paragraph (a), (b), or (c) of this section or under the similar

provisions of another Federal order applicable to a distributing

plant or supply plant.
-599-

(e) A plant located inside the marketing area which has been

a pool plant under this order or its predecessor orders for twelve

consecutive months, but is not otherwise qualified under this

paragraph, if it has a marketing agreement with a cooperative

association and it fulfills the following conditions:

(1) The aggregate monthly quantity supplied by all parties

to such an agreement as a percentage of the producer milk receipts

included in the unit during the month is not less than 35 percent;

and

(2) Shipments for qualification purposes shall include both

transfers from supply plants to plants described in paragraph

(c)(1) of this section, and deliveries made direct from the farm

to plants qualified under paragraph (a) of this section.

(f) A system of supply plants may qualify for pooling if 2

or more plants operated by one or more handlers meet the

applicable percentage 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, or was a pool supply plant for each of the 3 months

immediately preceding the effective date of this paragraph so long

as it continues to maintain pool status. Cooperative associations

may not use shipments pursuant to § 1033.9(c) to qualify plants

located outside the marketing area; 

(2) A written notification to the market administrator

listing the plants to be included in the system and the handler

that is responsible for meeting the performance requirements of

this paragraph under a marketing agreement certified to the market

administrator by the designated handler and any others included in

the system, and the period during which such consideration shall

apply. Such notice, and notice of any change in designation,

shall be furnished on or before the 5th working day following the

month to which the notice applies. The listed plants included in

the system shall also be in the sequence in which they shall

qualify for pool plant status based on the minimum deliveries

required. If the deliveries made are insufficient to qualify the

entire system for pooling, the last listed plant shall be excluded

from the system, followed by the plant next-to-last on the list,

and continuing in this sequence until remaining listed plants have

met the minimum shipping requirements; and

(3) Each plant that qualifies as a pool plant within a

system shall continue each month as a plant in the system unless

the plant subsequently fails to qualify for pooling, or the

responsible handler submits a written notification to the market

administrator prior to the first day of the month that the plant
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is to be deleted from the system, or that the system is to be

discontinued. In any month of March through August, a system

shall not contain any plant which was not qualified under this

paragraph, either individually or as a member of a system, during

the previous September through February.

(g) The applicable shipping percentages of paragraphs (c) 

through (f) of this section may be increased or decreased 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

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 that 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 distribution 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 that also meets the pooling requirements of another

Federal order and from which greater qualifying shipments are made
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to plants regulated under the other Federal order than are made to

plants regulated under this order, 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 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, 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.

§ 1033.8 Nonpool plant.

See § 1000.8.

§ 1033.9 Handler.

See § 1000.9.

§ 1033.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is route disposition in the marketing area during the

month;

(b) Receives fluid milk from own farm production or that is

fully subject to the pricing and pooling provisions of this or any

other Federal order;

(c) Receives at its plant or acquires for route disposition

no more than 150,000 pounds of fluid milk products from handlers

fully regulated under any Federal order. This limitation shall

not apply if the producer-handler’s own farm production is less

than 150,000 pounds during the month;

(d) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products; and

(e) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)
-602-

and the processing and packaging operations are the producerhandler’s own enterprise and at its own risk.

§ 1033.11 [Reserved]

§ 1033.12 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 § 1033.13; or

(2) Received by a handler described in § 1033.9(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 § 1033.13(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.

§ 1033.13 Producer milk.

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 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 by a

cooperative association described in § 1033.9(c) to a nonpool

plant, subject to the following conditions:

(1) Milk of a dairy farmer shall not be eligible for

diversion until milk of such dairy farmer has been physically

received as producer milk at a pool plant and the dairy farmer has

continuously retained producer status since that time. If a dairy
-603-

farmer loses producer status under this order (except as a result

of a temporary loss of Grade A approval), the dairy farmer’s milk

shall not be eligible for diversion until milk of the dairy farmer

has been physically received as producer milk at a pool plant;

(2) The equivalent of at least one day’s production is

caused by the handler to be physically received at a pool plant in

each of the months of September through November;

(3) Of the total quantity of producer milk received during

the month (including diversions but excluding the quantity of

producer milk received from a handler described in § 1000.9(c)),

the handler diverted to nonpool plants not more than 60 percent

during the months of September through February;

(4) Diverted milk shall be priced at the location of the

plant to which diverted;

(5) Any milk diverted in excess of the limits set forth in

paragraph (d)(3) of this section shall not be producer milk. The

diverting handler shall designate the dairy farmer deliveries that

shall not be producer milk. If the handler fails to designate the

dairy farmer deliveries which are ineligible, producer milk status

shall be forfeited with respect to all milk diverted to nonpool

plants by such handler; and

(6) The delivery day requirements and the diversion

percentages in paragraphs (d)(2) and (d)(3) of this section may be

increased or decreased by the market administrator if the market

administrator finds that such revision is necessary to assure

orderly marketing and efficient handling of milk in the marketing

area. Before making such a finding, the market administrator

shall investigate the need for the revision either on the market

administrator’s own initiative or at the request of interested

persons 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 a revision might be

appropriate, the market administrator shall issue a notice stating

that the revision is being considered and inviting written data,

views, and arguments. Any decision to revise an applicable

percentage must be issued in writing at least one day before the

effective date.

§ 1033.14 Other source milk.

See § 1000.14.
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§ 1033.15 Fluid milk products.

See § 1000.15.

§ 1033.16 Fluid cream product.

See § 1000.16.

§ 1033.17 [Reserved]

§ 1033.18 Cooperative association.

See § 1000.18.

§ 1033.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1033.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 7th 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 pursuant to

§ 1033.7 shall report for each of its operations the following

information:

(1) Product pounds, pounds of butterfat, pounds of protein,

pounds of solids-not-fat other than protein (other solids), and

the value of the somatic cell adjustment pursuant to § 1000.50(p),

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; and

(4) Such other information with respect to the receipts and

utilization of skim milk, butterfat, milk protein, other nonfat

solids, and somatic cell information 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
-605-

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), and the value of the somatic cell adjustment pursuant to

§ 1000.50(p), 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.

§ 1033.31 Payroll reports.

(a) On or before the 22nd day after the end of each month,

each handler that operates a pool plant pursuant to § 1033.7 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 § 1033.73(e).

(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.

§ 1033.32 Other reports.

In addition to the reports required pursuant to §§ 1033.30

and 1033.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1033.40 Classes of utilization.

See § 1000.40.

§ 1033.41 [Reserved]

§ 1033.42 Classification of transfers and diversions.

See § 1000.42.

§ 1033.43 General classification rules.

See § 1000.43.

§ 1033.44 Classification of producer milk.

See § 1000.44.

§ 1033.45 Market administrator’s reports and announcements 

 concerning classification.

See § 1000.45.

CLASS PRICES
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§ 1033.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.

§ 1033.51 Class I differential and price.

The Class I differential shall be the differential

established for Cuyahoga County, Ohio which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for Cuyahoga County, Ohio.

§ 1033.52 Adjusted Class I differentials.

See § 1000.52.

§ 1033.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1033.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1033.60 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 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 (i)

of this section and subtracting from that total amount the value

computed in paragraph (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 pounds 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.

(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.
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(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) Compute an adjustment for the somatic cell content of

producer milk by multiplying the values reported pursuant to

§ 1033.30(a)(1) and (c)(1) by the percentage of total producer

milk allocated to Class II, Class III, and Class IV pursuant to

§ 1000.44(c);

(f) 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.

(g) 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 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);

(h) 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

a plant regulated under other Federal orders and bulk concentrated

fluid milk products from pool plants, plants regulated under other

Federal orders, and unregulated supply plants.

(i) 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
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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.

(j) 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).

§ 1033.61 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 § 1033.71

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 aforementioned conditions, the market

administrator shall compute the producer price differential in the

following manner:

(a) Combine into one total the values computed pursuant to

§ 1033.60 for all handlers required to file reports prescribed in

§ 1033.30;

(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 § 1033.60 by the protein price, the other solids

price, and the butterfat price, respectively, and the total value

of the somatic cell adjustment pursuant to § 1033.30(a)(1) and

(c)(1);

(c) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1033.75;

(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 § 1033.60(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. 
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The result shall be known as the producer price differential for

the month.

§ 1033.62 Announcement of producer prices. 

On or before the 13th 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 somatic cell adjustment rate;

(g) The average butterfat, protein, nonfat solids, and other

solids content of producer milk; and

(h) The statistical uniform price for milk containing 3.5

percent butterfat, computed by combining the Class III price and

the producer price differential.

PAYMENTS FOR MILK

§ 1033.70 Producer-settlement fund.

See § 1000.70.

§ 1033.71 Payments to the producer-settlement 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 15th 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 § 1033.60.

(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 § 1033.75;

(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;

(3) The total value of the somatic cell adjustment to

producer milk; and

(4) An amount obtained by multiplying the pounds of skim

milk and butterfat for which a value was computed pursuant to

§ 1033.60(i) by the producer price differential as adjusted

pursuant to § 1033.75 for the location of the plant from which

received. 
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§ 1033.72 Payments from the producer-settlement fund.

No later than the 16th 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 § 1033.71(b) exceeds the amount computed pursuant to

§ 1033.71(a). If, at such time, the balance in the producersettlement 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.

§ 1033.73 Payments to producers and to cooperative associations.

(a) 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 26th 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 17th day after the end of the month (except as

provided in § 1000.90) in an amount equal to 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

§ 1033.75;

(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) The hundredweight of milk received times the somatic

cell adjustment for the month;

(vi) Less any payment made pursuant to paragraph (a)(1) of

this section;

(vii) Less proper deductions authorized in writing by such

producer and plus or minus adjustments for errors in previous

payments to such producer; and

(viii) Less deductions for marketing services pursuant to

§ 1000.86.
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(b) Payments for milk received from cooperative

associations. On or before the day prior to the dates specified

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

provided in § 1000.90), each handler shall pay to a cooperative

association for milk received as follows:

(1) Partial payment to a cooperative association. For bulk

fluid milk/skimmed milk received during the first 15 days of the

month from a cooperative association in any capacity, except as

the operator of a pool plant, the partial payment shall be equal

to the hundredweight of milk received multiplied by the lowest

announced class price for the preceding month.

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk/skimmed milk

products received during the first 15 days of the month from a

cooperative association in its capacity as the operator of a pool

plant, the partial payment shall be at the pool plant operator’s

estimated use value of the milk using the most recent class prices

available at the receiving plant’s location.

(3) Final payment to a cooperative association for milk

transferred from its pool plant. Following the classification of

bulk fluid milk products and bulk fluid cream products received

during the month from a cooperative association in its capacity as

the operator of a pool plant, the final payment for such receipts

shall be determined 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

prices to be used shall be the prices 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;

(viii) The hundredweight of Class II, Class III, and

Class IV milk times the somatic cell adjustment; and
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(ix) Add together the amounts computed in paragraphs

(b)(3)(i) through (viii) of this section and from that sum deduct

any payment made pursuant to paragraph (b)(2) of this section; and

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, 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, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section.

(c) If a handler has not received full payment from the

market administrator pursuant to § 1033.72 by the payment date

specified in paragraph (a) or (b) of this section, the handler may

reduce payments pursuant to paragraphs (a) and (b) of this

section, 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.

(d) 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 producer-settlement fund to the

handler or to the lawful claimant, as the case may be.

(e) 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 somatic cell count of the producer's milk;

(5) The minimum rate or rates at which payment to the

producer is required pursuant to this order;

(6) The rate used in making payment if the rate is other

than the applicable minimum rate;
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(7) The amount, or rate per hundredweight, or rate per pound

of component, and the nature of each deduction claimed by the

handler; and

(8) The net amount of payment to the producer or cooperative

association.

§ 1033.74 [Reserved]

§ 1033.75 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 § 1033.51 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 §§ 1033.73 and 1000.76. 

§ 1033.76 Payments by a handler operating a partially regulated 

distributing plant.

See § 1000.76.

§ 1033.77 Adjustment of accounts.

See § 1000.77.

§ 1033.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1033.85 Assessment for order administration.

See § 1000.85.

§ 1033.86 Deduction for marketing services.

See § 1000.86.
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PART 1124 - MILK IN THE PACIFIC NORTHWEST MARKETING AREA

Subpart - Order Regulating Handling

GENERAL PROVISIONS

Sec. 

1124.1 General provisions. 

DEFINITIONS 

1124.2 Pacific Northwest marketing area.

1124.3 Route disposition.

1124.4 Plant.

1124.5 Distributing plant.

1124.6 Supply plant. 

1124.7 Pool plant.

1124.8 Nonpool plant.

1124.9 Handler.

1124.10 Producer-handler. 

1124.11 Cooperative reserve supply unit.

1124.12 Producer. 

1124.13 Producer milk.

1124.14 Other source milk.

1124.15 Fluid milk product.

1124.16 Fluid cream product.

1124.17 [Reserved]

1124.18 Cooperative association.

1124.19 Commercial food processing establishment.

HANDLER REPORTS

1124.30 Reports of receipts and utilization. 

1124.31 Payroll reports. 

1124.32 Other reports. 

CLASSIFICATION OF MILK

1124.40 Classes of utilization.

1124.41 [Reserved]

1124.42 Classification of transfers and diversions.

1124.43 General classification rules.

1124.44 Classification of producer milk.

1124.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES 

1124.50 Class prices, component prices, and advanced pricing

 factors. 

1124.51 Class I differential and price. 

1124.52 Adjusted Class I differentials.

1124.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1124.54 Equivalent price. 
-615-

PRODUCER PRICE DIFFERENTIAL

1124.60 Handler's value of milk.

1124.61 Computation of producer price differential.

1124.62 Announcement of producer prices.
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PAYMENTS FOR MILK 

1124.70 Producer-settlement fund. 

1124.71 Payments to the producer-settlement fund.

1124.72 Payments from the producer-settlement fund. 

1124.73 Payments to producers and to cooperative associations. 

1124.74 [Reserved]

1124.75 Plant location adjustments for producer milk and

 nonpool milk.

1124.76 Payments by a handler operating a partially regulated

 distributing plant.

1124.77 Adjustment of accounts.

1124.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION 

1124.85 Assessment for order administration. 

1124.86 Deduction for marketing services.

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

Subpart - Order Regulating Handling

GENERAL PROVISIONS

§ 1124.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1124, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1124.2 Pacific Northwest 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:

Washington

All of the State of Washington.

Idaho Counties

Benewah, Bonner, Boundary, Kootenai, Latah, and Shoshone.

Oregon Counties

Benton, Clackamas, Clatsop, Columbia, Coos, Crook, Curry,

Deschutes, Douglas, Gilliam, Hood River, Jackson, Jefferson,

Josephine, Klamath, Lake, Lane, Lincoln, Linn, Marion, Morrow,

Multnomah, Polk, Sherman, Tillamook, Umatilla, Wasco, Washington,

Wheeler, and Yamhill.

§ 1124.3 Route disposition.

See § 1000.3.
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§ 1124.4 Plant.

See § 1000.4.

§ 1124.5 Distributing plant.

See § 1000.5.
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§ 1124.6 Supply plant.

See § 1000.6.

§ 1124.7 Pool plant.

Pool plant means a plant, unit of plants, or a 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 paragraph (c) 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 section

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 ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which during any month not less than

20 percent of the total quantity of milk that is physically

received at such plant from dairy farmers eligible to be producers

pursuant to § 1124.12 (excluding milk received at such plant as

diverted milk from another plant, which milk is classified other

than Class I under this order and is subject to the pricing and

pooling provisions of this or another order issued pursuant to the

Act) or diverted as producer milk to another plant pursuant to §

1124.13, is shipped in the form of a fluid milk product (excluding

concentrated milk transferred by agreement for other than Class I

use) to a pool distributing plant or is a route disposition in the

marketing area of fluid milk products processed and packaged at

such plant;

(1) A supply plant that has qualified as a pool plant during

each of the immediately preceding months of September through

February shall continue to so qualify in each of the following

months of March through August, unless the plant operator files a

written request with the market administrator that such plant not

be a pool plant, such nonpool status to be effective the first
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month following such request and thereafter until the plant

qualifies as a pool plant on the basis of milk shipments;

(2) A cooperative association that operates a supply plant

may include as qualifying shipments its deliveries to pool

distributing plants directly from farms of producers pursuant to

§ 1000.9(c);

(3) A pool plant operator may include as qualifying

shipments milk diverted to pool distributing plants pursuant to

§ 1124.13(d);

(4) No plant may qualify as a pool plant due to a reduction

in the shipping percentage pursuant to paragraph (g) of this

section unless it has been a pool supply plant during each of the

immediately preceding 3 months.

(d) - (f) [Reserved]

(g) The applicable shipping percentage of paragraph (c) of

this section may be increased or decreased 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

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;
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(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 distribution 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; and

(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 this order, or the plant has automatic

pooling status under the other Federal order.

§ 1124.8 Nonpool plant.

See § 1000.8.

§ 1124.9 Handler.

See § 1000.9.

§ 1124.10 Producer-handler.

Producer-handler means a person who operates a dairy farm and

a distributing plant from which there is route disposition within

the marketing area during the month 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 (4) of this section. Following the cancellation of

a previous producer-handler designation, a person seeking to have

his/her producer-handler designation reinstated must demonstrate

that these conditions have been met for the preceding month.

(1) The care and management of the dairy animals and 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 and management of the

producer-handler and are operated as the producer-handler’s own

enterprise and at its own 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 and management of the producerhandler 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,
-621-

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.

(b) Designation of resources and facilities. Designation of

a person as a producer-handler shall include the determination of

what shall constitute the person’s milk production, handling,

processing, and distribution resources and facilities, all of

which shall be considered an integrated operation.

(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 directly or indirectly,

solely or partially, owned, operated, or controlled by the

producer-handler, in which the producer-handler in any way has an

interest, including any contractual arrangement, or which are

directly, indirectly, or partially owned, operated, or controlled

by any partner or stockholder of the producer-handler. However,

for purposes of this paragraph, 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 or partially owned by, and

directly or indirectly operated or controlled by, the producerhandler 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 or control.
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(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 (4) of

this section are not continuing to be met, or under any of the

conditions described in paragraphs (c)(1) and (2) of this section. 

Cancellation of a producer-handler’s status pursuant to this

paragraph 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 producer-handler, 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.

(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

canceled; and

(3) The effective dates of producer-handler status or loss of

producer-handler 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 producerhandler.

(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 designation do not exist.

§ 1124.11 Cooperative reserve supply unit.

Cooperative reserve supply unit means any cooperative

association or its agent that is a handler pursuant to § 1000.9(c)
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that does not own or operate a plant, if such cooperative has been

qualified to receive payments pursuant to § 1124.73 and has been a

handler of producer milk under this or its predecessor order

during each of the 12 previous months, and if a majority of the

cooperative’s member producers are located within 125 miles of a

plant described in § 1124.7(a). A cooperative reserve supply unit

shall be subject to the following conditions:

(a) The cooperative shall file a request with the market

administrator for cooperative reserve supply unit status at least

15 days prior to the first day of the month in which such status

is desired to be effective. Once qualified as a cooperative

reserve supply unit pursuant to this paragraph, such status shall

continue to be effective unless the cooperative requests

termination prior to the first day of the month that change of

status is requested, or the cooperative fails to meet all of the

conditions of this section.

(b) The cooperative reserve supply unit supplies fluid milk

products to pool distributing plants located within 125 miles of a

majority of the cooperative’s member producers in compliance with

any announcement by the market administrator requesting a minimum

level of shipments as further provided below:

(1) The market administrator may require such supplies of

bulk fluid milk from cooperative reserve supply units whenever the

market administrator finds that milk supplies for Class I use are

needed for plants defined in § 1124.7(a) or (b). Before making

such a finding, the market administrator shall investigate the

need for such shipments either on the market administrator’s own

initiative or at the request of interested persons 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 market

administrator’s investigation shows that such shipments might be

appropriate, the market administrator shall issue a notice stating

that a shipping announcement is being considered and inviting

data, views and arguments with respect to the proposed shipping

announcement. Any decision on the required shipment of bulk fluid

milk from cooperative reserve supply units must be made in writing

at least one day before the effective date.

(2) Failure of a cooperative reserve supply unit to comply

with any announced shipping requirements, including making any

significant change in the unit’s marketing operation that the

market administrator determines has the impact of evading or

forcing such an announcement, shall result in immediate loss of

cooperative reserve supply unit status until such time as the unit

has been a handler pursuant to § 1000.9(c) for at least 12

consecutive months.
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§ 1124.12 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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1124.13; 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 § 1124.13(e);

(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;

(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; and

(5) A dairy farmer whose milk was received at a nonpool

plant during the month from the same farm as other than producer

milk under this or any other Federal order. Such a dairy farmer

shall be known as a dairy farmer for other markets.

§ 1124.13 Producer milk.

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 shall be priced at the location of the

plant where it is first physically received;

(b) Received by a cooperative reserve supply unit described

in § 1124.11. All milk received pursuant to this paragraph shall

be priced at the location of the plant where it is first

physically received and shall not be subject to the conditions

specified in paragraph (e) of this section; 

(c) Received by a handler described in § 1000.9(c) in excess

of the quantity delivered to pool plants;

(d) 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
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(e) Diverted by the operator of a pool plant or a

cooperative association described in § 1000.9(c), excluding a 

cooperative reserve supply unit described in § 1124.11, to a

nonpool plant, subject to the following conditions:

(1) Of the quantity of producer milk received during the

month (including diversions, but excluding the quantity of

producer milk received from a handler described in § 1000.9(c))

the handler diverts to nonpool plants not more than 80 percent

during the months of September through February, and not more than

99 percent during the months of March through August;

(2) Two or more handlers described in § 1000.9(c) may have

their allowable diversions computed on the basis of their combined

deliveries of producer milk which they caused to be delivered to

pool plants or diverted during the month if each has filed a

request in writing with the market administrator before the first

day of the month the agreement is to be effective. The request

shall specify the basis for assigning overdiverted milk to the

producer deliveries of each according to a method approved by the

market administrator. 

(3) Diverted milk shall be priced at the location of the

plant to which diverted;

(4) Any milk diverted in excess of the limits prescribed in

paragraph (e)(1) of this section shall not be producer milk. If

the diverting handler or cooperative association fails to

designate the dairy farmers’ deliveries that are not to be

producer milk, no milk diverted by the handler or cooperative

association during the month to a nonpool plant shall be producer

milk. In the event some of the milk of any producer is determined

not to be producer milk pursuant to this paragraph, other milk

delivered by such producer as producer milk during the month will

not be subject to § 1124.12(b)(5); and

(5) The applicable diversion limits in paragraph (e)(1) of

this section may be increased or decreased by the market

administrator if the market administrator finds that such revision

is necessary to assure orderly marketing and efficient handling of

milk in the marketing area. Before making such a finding, the

market administrator shall investigate the need for the revision

either on the market administrator’s own initiative or at the

request of interested persons if the request is made at least 15

days prior to the month for which the requested revision is

desired effective. If the investigation shows that a revision

might be appropriate, the market administrator shall issue a

notice stating that the revision is being considered and inviting

written data, views, and arguments. Any decision to revise an
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applicable percentage must be issued in writing at least one day

before the effective date.

§ 1124.14 Other source milk.

See § 1000.14.

§ 1124.15 Fluid milk product.

See § 1000.15.

§ 1124.16 Fluid cream product.

See § 1000.16.

§ 1124.17 [Reserved]

§ 1124.18 Cooperative association.

See § 1000.18.

§ 1124.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1124.30 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 pursuant to

§ 1124.7 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; 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
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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, and the 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.

§ 1124.31 Payroll reports.

(a) On or before the 20th day after the end of each month,

each handler that operates a pool plant pursuant to § 1124.7 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 § 1124.73(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.

§ 1124.32 Other reports.

In addition to the reports required pursuant to §§ 1124.30

and 1124.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1124.40 Classes of utilization.

See § 1000.40.

§ 1124.41 [Reserved]

§ 1124.42 Classification of transfers and diversions.

See § 1000.42.

§ 1124.43 General classification rules.

See § 1000.43.

§ 1124.44 Classification of producer milk.

In addition to the provisions provided in § 1000.44, the

words “, or acquired for distribution,” are inserted following the

word “received” in § 1000.44(a)(3)(iv). 

§ 1124.45 Market administrator’s reports and announcements

concerning classification.
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See § 1000.45.

CLASS PRICES

§ 1124.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.
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§ 1124.51 Class I differential and price.

The Class I differential shall be the differential

established for King County, Washington, which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for King County, Washington.

§ 1124.52 Adjusted Class I differentials.

See § 1000.52.

§ 1124.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1124.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1124.60 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 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 value

computed in paragraph (i) 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.

(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;
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(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) Multiply the pounds of skim milk and butterfat overage

assigned to each class pursuant to § 1000.44(a)(11) and the

corresponding steps of § 1000.44(b) by the skim milk prices and

butterfat prices applicable to each class.

(f) 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 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) 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) 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.
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(i) 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).

§ 1124.61 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 § 1124.71

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 aforementioned conditions, the market

administrator shall compute the producer price differential in the

following manner:

(a) Combine into one total the values computed pursuant to

§ 1124.60 for all handlers required to file reports prescribed in

§ 1124.30;

(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 § 1124.60 by the protein price, the other solids

price, and the butterfat price, respectively;

(c) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1124.75;

(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 § 1124.60(h); 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.

§ 1124.62 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;
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(d) The other solids price;

(e) The butterfat price;

(f) The average butterfat, protein, nonfat solids, 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.

PAYMENTS FOR MILK

§ 1124.70 Producer-settlement fund.

See § 1000.70.

§ 1124.71 Payments to the producer-settlement 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 § 1124.60.

(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 § 1124.75;

(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

§ 1124.60(h) by the producer price differential as adjusted

pursuant to § 1124.75 for the location of the plant from which

received. 

§ 1124.72 Payments from the producer-settlement 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 § 1124.71(b) exceeds the amount computed pursuant to

§ 1124.71(a). If, at such time, the balance in the producersettlement 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.

§ 1124.73 Payments to producers and to cooperative associations.
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(a) 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 18th day of the month, partial

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 equal to 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

§ 1124.75;

(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; and

(vii) Less deductions for marketing services pursuant to

§ 1000.86.

(b) Payments for milk received from cooperative association

members. On or before the 2nd day prior to the dates specified in

paragraphs (a)(1) and (a)(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 (a)(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 2nd day prior to the dates specified
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in paragraphs (a)(1) and (a)(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 price 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

prices to be used shall be the prices 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:
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(i) The hundredweight of producer milk received times the

producer price differential as adjusted pursuant to § 1124.75;

(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

(v) Add together the amounts computed in paragraphs

(c)(3)(i) through (iv) of this section and from that sum deduct

any payment made pursuant to paragraph (c)(1) of this section.

(d) If a handler has not received full payment from the

market administrator pursuant to § 1124.72 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) 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 producer-settlement fund to the

handler or to the lawful claimant, as the case may be.

(f) 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 this order;
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(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.

§ 1124.74 [Reserved]

§ 1124.75 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 § 1124.51 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 §§ 1124.73 and 1000.76. 

§ 1124.76 Payments by a handler operating a partially regulated 

distributing plant.

See § 1000.76.

§ 1124.77 Adjustment of accounts.

See § 1000.77.

§ 1124.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1124.85 Assessment for order administration.

See § 1000.85.

§ 1124.86 Deduction for marketing services.

See § 1000.86.
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PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

Sec.

1126.1 General provisions.

DEFINITIONS

1126.2 Southwest marketing area.

1126.3 Route disposition.

1126.4 Plant.

1126.5 Distributing plant.

1126.6 Supply plant.

1126.7 Pool plant.

1126.8 Nonpool plant.

1126.9 Handler.

1126.10 Producer-handler.

1126.11 [Reserved]

1126.12 Producer.

1126.13 Producer milk.

1126.14 Other source milk.

1126.15 Fluid milk product.

1126.16 Fluid cream product.

1126.17 [Reserved]

1126.18 Cooperative association.

1126.19 Commercial food processing establishment.

HANDLER REPORTS

1126.30 Reports of receipts and utilization.

1126.31 Payroll reports.

1126.32 Other reports.

CLASSIFICATION OF MILK

1126.40 Classes of utilization.

1126.41 [Reserved]

1126.42 Classification of transfers and diversions.

1126.43 General classification rules. 

1126.44 Classification of producer milk.

1126.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES

1126.50 Class prices, component prices, and advanced pricing

 factors.

1126.51 Class I differential and price.

1126.52 Adjusted Class I differentials.

1126.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1126.54 Equivalent price.
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PRODUCER PRICE DIFFERENTIAL

1126.60 Handler's value of milk.

1126.61 Computation of producer price differential.

1126.62 Announcement of producer prices.
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PAYMENTS FOR MILK

1126.70 Producer-settlement fund.

1126.71 Payments to the producer-settlement fund.

1126.72 Payments from the producer-settlement fund.

1126.73 Payments to producers and to cooperative associations.

1126.74 [Reserved]

1126.75 Plant location adjustments for producer milk and 

 nonpool milk.

1126.76 Payments by a handler operating a partially regulated

 distributing plant.

1126.77 Adjustment of accounts.

1126.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1126.85 Assessment for order administration.

1126.86 Deduction for marketing services.

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS

§ 1126.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1126, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1126.2 Southwest 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:

New Mexico and Texas

All of the States of New Mexico and Texas.

Colorado Counties

Archuleta, LaPlata, and Montezuma.

§ 1126.3 Route disposition.

See § 1000.3.

§ 1126.4 Plant.

See § 1000.4.

§ 1126.5 Distributing plant.

See § 1000.5.

§ 1126.6 Supply plant.

See § 1000.6.
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§ 1126.7 Pool plant.

Pool plant means a plant specified in paragraphs (a) through

(d) of this section, or a unit of plants as specified in paragraph

(e) of this section, but excluding a plant specified in paragraph

(g) of this section. The pooling standards described in

paragraphs (c) and (d) of this section are subject to modification

pursuant to paragraph (f) of this section:

(a) A distributing plant, other than a plant qualified as a

pool plant pursuant to paragraph (b) of this section or section

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 ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which 50 percent or more of the

total quantity of milk that is physically received during the

month from dairy farmers and handlers described in § 1000.9(c),

including milk that is diverted as producer milk to other plants,

is transferred to pool distributing plants. 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 plant’s shipping

percentage. 

(d) A plant located within the marketing area that is

operated by a cooperative association if pool plant status under

this paragraph is requested for such plant by the cooperative

association and during the month at least 30 percent of the

producer milk of members of such cooperative association is

delivered directly from farms to pool distributing plants or is

transferred to such plants as a fluid milk product (excluding

concentrated milk transferred to a distributing plant for an

agreed-upon use other than Class I) from the cooperative's plant.

(e) Two or more plants operated by the same handler and

located within the marketing area may qualify for pool status as a

unit by meeting the total and in-area route disposition
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requirements specified in paragraph (a) of this section and the

following additional requirements:

(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 only Class I or

Class II products and must be located in a pricing zone providing

the same or a lower Class I price than the price applicable at the

distributing plant included in the unit pursuant to paragraph

(e)(1) of this section; and

(3) A written request to form a unit, or to add or remove

plants from a unit, must be filed with the market administrator

prior to the first day of the month for which it is to be

effective.

(f) The applicable shipping percentages of paragraphs (c) 

and (d) of this section may be increased or decreased 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

percentage must be issued in writing at least one day before the

effective date.

(g) The term pool plant shall not apply to the following

plants:

(1) A producer-handler plant;

(2) An exempt plant as defined in § 1000.8(e);

(3) A plant qualified pursuant to paragraph (a) of this

section that is located within the marketing area if the plant

also meets the pooling requirements of another Federal order, and

more than 50 percent of its route distribution has been in such

other Federal order marketing area for 3 consecutive months;

(4) A plant qualified pursuant to paragraph (a) of this

section which is not located within any Federal order marketing

area 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 qualified pursuant to paragraph (a) of this

section that is located in another Federal order marketing area if
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the plant meets the pooling requirements of such other Federal

order and does not have a majority of its route distribution 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) or (d) 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 this order, or the plant has automatic

pooling status under the other Federal order; and

(7) That portion of a pool 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 be requested in writing by

the handler and must be approved by the market administrator.

§ 1126.8 Nonpool plant.

See § 1000.8.

§ 1126.9 Handler.

See § 1000.9.

§ 1126.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is route disposition in the marketing area during the

month;

(b) Receives fluid milk products from own farm production or

milk that is fully subject to the pricing and pooling provisions

of this or another Federal order;

(c) Receives no more than 150,000 pounds of fluid milk

products from handlers fully regulated under any Federal order,

including such products received at a location other than the

producer-handler’s processing plant for distribution on routes.

This limitation shall not apply if the producer-handler’s own farm

production is less than 150,000 pounds during the month;

(d) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products; and

(e) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)

and the processing and packaging operations are the producerhandler’s own enterprise and at its own risk.

§ 1126.11 [Reserved]
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§ 1126.12 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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1126.13; 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 § 1126.13(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 the 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.

§ 1126.13 Producer milk.

Producer milk means the skim milk (or the skim equivalent of

components of skim milk), including nonfat components, and

butterfat contained 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 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 for the account of the

handler operating such plant 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 handler

described in § 1000.9(c) to a nonpool plant, subject to the

following conditions:

(1) Milk of a dairy farmer shall not be eligible for

diversion unless a delivery of at least 40,000 pounds or one day’s

milk production, whichever is less, of such dairy farmer has been

physically received as producer milk at a pool plant and the dairy

farmer has continuously retained producer status since that time;
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(2) The total quantity of milk diverted during the month by

a cooperative association shall not exceed 50 percent of the total

quantity of producer milk that the cooperative association caused

to be received at pool plants and diverted;

(3) The operator of a pool plant that is not a cooperative

association may divert any milk that is not under the control of a

cooperative association that diverts milk during the month

pursuant to this paragraph. The total quantity of milk so

diverted during the month shall not exceed 50 percent of the total

quantity of the producer milk physically received at such plant

(or such unit of plants in the case of plants that pool as a unit

pursuant to § 1126.7(e)) and diverted;

(4) Any milk diverted in excess of the limits prescribed in

paragraphs (d)(2) and (3) of this section shall not be producer

milk. If the diverting handler or cooperative association fails

to designate the dairy farmers’ deliveries that will not be

producer milk, no milk diverted by the handler or cooperative

association shall be producer milk;

(5) Diverted milk shall be priced at the location of the

plant to which diverted; and

(6) The delivery requirement in paragraph (d)(1) and the

diversion percentages in paragraphs (d)(2) and (3) of this section

may be increased or decreased by the market administrator if there

is a finding that such revision is necessary to assure orderly

marketing and efficient handling of milk in the marketing area. 

Before making such a finding, the market administrator shall

investigate the need for the revision either on the market

administrator’s own initiative or at the request of interested

persons 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 a revision might be

appropriate, the market administrator shall issue a notice stating

that the revision is being considered and inviting written data,

views, and arguments. Any decision to revise the delivery day

requirement or any diversion percentage must be issued in writing

at least one day before the effective date.

§ 1126.14 Other source milk.

See § 1000.14.

§ 1126.15 Fluid milk product.

See § 1000.15.

§ 1126.16 Fluid cream product.

See § 1000.16.

§ 1126.17 [Reserved]

§ 1126.18 Cooperative association.

See § 1000.18.
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§ 1126.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1126.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 8th

day after the end of the month, in the detail and on prescribed

forms, as follows:

(a) Each pool plant operator shall report for each of its

operations the following information:

(1) Product pounds, pounds of butterfat, pounds of protein,

pounds of nonfat solids other than protein (other solids), and the

value of the somatic cell adjustment pursuant to § 1000.50(p)

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; and

(4) Such other information with respect to the receipts and

utilization of skim milk, butterfat, milk protein, other nonfat

solids, and somatic cell information, 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), and the value of the somatic cell adjustment pursuant to

§ 1000.50(p), contained in receipts of milk from producers; and

(2) The utilization or disposition of such receipts.
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(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.

§ 1126.31 Payroll reports.

(a) On or before the 20th day after the end of each month,

each handler that operates a pool plant pursuant to § 1126.7 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 specified in § 1126.73(e).

(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.

§ 1126.32 Other reports.

In addition to the reports required pursuant to §§ 1126.30

and 1126.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1126.40 Classes of utilization.

See § 1000.40.

§ 1126.41 [Reserved]

§ 1126.42 Classification of transfers and diversions.

See § 1000.42.

§ 1126.43 General classification rules.

See § 1000.43.

§ 1126.44 Classification of producer milk.

See § 1000.44.

§ 1126.45 Market administrator’s reports and announcements

concerning classification.

See § 1000.45.
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CLASS PRICES

§ 1126.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.

§ 1126.51 Class I differential and price.

The Class I differential shall be the differential

established for Dallas County, Texas, which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for Dallas County, Texas.

§ 1126.52 Adjusted Class I differentials.

See § 1000.52.

§ 1126.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1126.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1126.60 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 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 (i)

of this section and subtracting from that total amount the value

computed in paragraph (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 pounds 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.

(b) Class II value.

(1) Multiply the pounds of nonfat solids in Class II skim

milk by the Class II nonfat solids price; and
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(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) Compute an adjustment for the somatic cell content of

producer milk by multiplying the values reported pursuant to

§ 1126.30(a)(1) and (c)(1) by the percentage of total producer

milk allocated to Class II, Class III, and Class IV pursuant to

§ 1000.44(c);

(f) 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.

(g) 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 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);

(h) 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.

(i) 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 §
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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.

(j) 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).

§ 1126.61 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 § 1126.71

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 aforementioned conditions, the market

administrator shall compute the producer price differential in the

following manner:

(a) Combine into one total the values computed pursuant to §

1126.60 for all handlers required to file reports prescribed in §

1126.30;

(b) Subtract the total of the 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 § 1126.60 by the protein price, other solids

price, and the butterfat price, respectively, and the total value

of the somatic cell adjustment pursuant to § 1126.30(a)(1) and

(c)(1);

(c) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1126.75;

(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 § 1126.60(i); and 
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(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.

§ 1126.62 Announcement of producer prices.

On or before the 13th day after the end of each month, the

market administrator shall announce 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 somatic cell adjustment rate;

(g) The average butterfat, protein, nonfat solids, and other

solids content of producer milk; and

(h) The statistical uniform price for milk containing 3.5

percent butterfat, computed by combining the Class III price and

the producer price differential.

PAYMENTS FOR MILK

§ 1126.70 Producer-settlement fund.

See § 1000.70.

§ 1126.71 Payments to the producer-settlement 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 § 1126.60.

(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 § 1126.75;

(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;

(3) The total value of the somatic cell adjustment to

producer milk; and

(4) An amount obtained by multiplying the pounds of skim

milk and butterfat for which a value was computed pursuant to

§ 1126.60(i) by the producer price differential as adjusted
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pursuant to § 1126.75 for the location of the plant from which

received. 

§ 1126.72 Payments from the producer-settlement fund.

No later than the 17th 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 § 1126.71(b) exceeds the amount computed pursuant to

§ 1126.71(a). If, at such time, the balance in the producersettlement 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.

§ 1126.73 Payments to producers and to cooperative associations.

(a) 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 23rd day of the month, payment

shall be made so that it is received by the producer on or before

the 26th day of the month (except as provided in § 1000.90) for

milk received during the first 15 days of the month 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 18th day after the end of the month (except as

provided in § 1000.90) in an amount computed as follows:

(i) Multiply the hundredweight of producer milk received

times the producer price differential for the month as adjusted

pursuant to § 1126.75;

(ii) Multiply the pounds of butterfat received times the

butterfat price for the month;

(iii) Multiply the pounds of protein received times the

protein price for the month;

(iv) Multiply the pounds of other solids received times the

other solids price for the month;

(v) Multiply the hundredweight of milk received times the

somatic cell adjustment for the month;

(vi) Add the amounts computed in paragraphs (a)(2)(i)

through (v) of this section, and from that sum:

(A) Subtract the partial payment made pursuant to paragraph

(a)(1) of this section;

(B) Subtract the deduction for marketing services pursuant

to § 1000.86;
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(C) Add or subtract for errors made in previous payments to

the producer subject to approval by the market administrator; and

(D) Subtract proper deductions authorized in writing by the

producer.

(b) On or before the day prior to the dates specified for

partial and final payments pursuant to paragraph (a) of this

section (except as provided in § 1000.90), each pool plant

operator shall pay a cooperative association for milk received as

follows:

(1) Partial payment to a cooperative association for bulk

milk received directly from producers’ farms. For bulk milk

(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) received during the first 15 days of the month from a

cooperative association in any capacity, except as the operator of

a pool plant, the payment shall be equal to the hundredweight of

milk received multiplied by the lowest announced class price for

the preceding month.

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk milk/skimmed milk

products received during the first 15 days of the month from a

cooperative association in its capacity as the operator of a pool

plant, the partial payment shall be at the pool plant operator’s

estimated use value of the milk using the most recent class prices

available at the receiving plant’s location. 

(3) Final payment to a cooperative association for milk

transferred from its pool plant. Following the classification of

bulk fluid milk products and bulk fluid cream products received

during the month from a cooperative association in its capacity as

the operator of a pool plant, the final payment for such receipts

shall be determined 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

prices to be used shall be the prices 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;
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(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;

(viii) The hundredweight of Class II, Class III, and

Class IV milk times the somatic cell adjustment; and

(ix) Add together the amounts computed in paragraphs

(b)(3)(i) through (viii) of this section and from that sum deduct

any payments made pursuant to paragraph (b)(2) of this section.

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, 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, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section. 

(c) If a handler has not received full payment from the

market administrator pursuant to § 1126.72 by the payment date

specified in paragraph (a) or (b) of this section, the handler may

reduce pro rata its payments to producers or to cooperative

associations pursuant to paragraphs (a) and (b) of this section,

but by not 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.

(d) 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 producer- settlement fund to

the handler or to the lawful claimant as the case may be.

(e) In making payments to producers pursuant to this

section, each pool plant operator 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 the payroll number of the

producer;
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(2) The month and dates that milk was received from the

producer, including the daily and total pounds of milk received;

(3) The total pounds of butterfat, protein, and other solids

contained in the producer’s milk;

(4) The somatic cell count of the producer’s milk;

(5) The minimum rate or rates at which payment to the

producer is required pursuant to this order;

(6) The rate used in making payment if the rate is other

than the applicable minimum rate;

(7) The amount, or rate per hundredweight, or rate per pound

of component, and the nature of each deduction claimed by the

handler; and

(8) The net amount of payment to the producer or cooperative

association.

§ 1126.74 [Reserved]

§ 1126.75 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 § 1126.51 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 §§ 1126.73 and 1000.76. 

§ 1126.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1126.77 Adjustment of accounts.

See § 1000.77.

§ 1126.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1126.85 Assessment for order administration.

See § 1000.85.

§ 1126.86 Deduction for marketing services.

See § 1000.86. 
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PART 1131 -- MILK IN ARIZONA-LAS VEGAS MARKETING AREA

Subpart -- Order Regulating Handling

GENERAL PROVISIONS

Sec. 

1131.1 General provisions. 

DEFINITIONS

1131.2 Arizona-Las Vegas marketing area. 

1131.3 Route disposition. 

1131.4 Plant.

1131.5 Distributing plant.

1131.6 Supply plant.

1131.7 Pool plant.

1131.8 Nonpool plant.

1131.9 Handler.

1131.10 Producer-handler.

1131.11 [Reserved]

1131.12 Producer.

1131.13 Producer milk.

1131.14 Other source milk.

1131.15 Fluid milk product.

1131.16 Fluid cream product.

1131.17 [Reserved]

1131.18 Cooperative association.

1131.19 Commercial food processing establishment.

HANDLER REPORTS

1131.30 Reports of receipts and utilization.

1131.31 Payroll reports.

1131.32 Other reports.

CLASSIFICATION OF MILK

1131.40 Classes of utilization.

1131.41 [Reserved]

1131.42 Classification of transfers and diversions.

1131.43 General classification rules.

1131.44 Classification of producer milk.

1131.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES

1131.50 Class prices, component prices, and advanced pricing

 factors.

1131.51 Class I differential and price.

1131.52 Adjusted Class I differentials.

1131.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1131.54 Equivalent price.
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UNIFORM PRICES

1131.60 Handler's value of milk.

1131.61 Computation of uniform prices.

1131.62 Announcement of uniform prices.
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PAYMENTS FOR MILK

1131.70 Producer-settlement fund.

1131.71 Payments to the producer-settlement fund.

1131.72 Payments from the producer-settlement fund.

1131.73 Payments to producers and to cooperative associations.

1131.74 [Reserved]

1131.75 Plant location adjustments for producers and nonpool 

 milk.

1131.76 Payments by a handler operating a partially regulated

 distributing plant.

1131.77 Adjustment of accounts.

1131.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1131.85 Assessment for order administration.

1131.86 Deduction for marketing services.

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

Subpart -- Order Regulating Handling

GENERAL PROVISIONS

§ 1131.1 General provisions. 

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1131, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1131.2 Arizona-Las Vegas 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:

Arizona

All of the State of Arizona.

Nevada Counties

Clark.

§ 1131.3 Route disposition.

See § 1000.3.

§ 1131.4 Plant.

See § 1000.4.

§ 1131.5 Distributing plant.

See § 1000.5.

§ 1131.6 Supply plant.

See § 1000.6.
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§ 1131.7 Pool plant.

Pool Plant means a plant or unit of plants specified in

paragraphs (a) through (e) of this section, but excluding a plant

specified in paragraph (g) of this section. The pooling standards

described in paragraphs (c) and (d) of this section are subject to

modification pursuant to paragraph (f) of this section.

(a) A distributing plant, other than a plant qualified as a

pool plant pursuant to paragraph (b) of this section or section

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 ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which 50 percent or more of the

total quantity of milk that is physically received at such plant

from dairy farmers and handlers described in § 1000.9(c),

including milk that is diverted as producer milk to other plants,

is transferred to pool distributing plants. 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 plant’s shipping

percentage.

(d) A plant located within the marketing area and operated

by a cooperative association if, during the month, or the

immediately preceding 12-month period ending with the current

month, 35 percent or more of the producer milk of members of the

association (and any producer milk of nonmembers and members of

another cooperative association which may be marketed by the

cooperative association) is physically received in the form of

bulk fluid milk products (excluding concentrated milk transferred

to a distributing plant for an agreed-upon use other than Class I)

at plants specified in paragraph (a) or (b) of this section either

directly from farms or by transfer from supply plants operated by

the cooperative association and from plants of the cooperative

association for which pool plant status has been requested under

this paragraph subject to the following conditions:
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(1) The plant does not qualify as a pool plant under

paragraph (a), (b) or (c) of this section or under comparable

provisions of another Federal order; and

(2) The plant is approved by a duly constituted regulatory

agency for the handling of milk approved for fluid consumption in

the marketing area.

(e) Two or more plants operated by the same handler and

located in the marketing area may qualify for pool plant status as

a unit by together meeting the requirements specified in paragraph

(a) of this section and subject to all of the following additional

requirements:

(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 must be located in a pricing zone providing the same

or lower Class I price than the price applicable at the

distributing plant included in the unit pursuant to paragraph

(e)(1) of this section; and

(3) A written request to form a unit must be filed by the

handler 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.

(f) The applicable shipping percentages of paragraphs (c) 

and (d) of this section may be increased or decreased 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

percentage must be issued in writing at least one day before the

effective date.
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(g) 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 distribution 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 this order, 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 be requested in

advance and in writing by the handler and must be approved by the

market administrator.

§ 1131.8 Nonpool plant. 

See § 1000.8.

§ 1131.9 Handler.

See § 1000.9.

§ 1131.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is route disposition in the marketing area during the

month;

(b) Receives fluid milk products from own farm production or

milk that is fully subject to the pricing and pooling provisions

of this or another Federal order;
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(c) Receives at its plant or acquires for route disposition

no more than 150,000 pounds of fluid milk products from handlers

fully regulated under any Federal order. This limitation shall

not apply if the producer-handler’s own farm production is less

than 150,000 pounds during the month;

(d) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products;

(e) Does not distribute fluid milk products to a wholesale

customer who also is serviced by a plant described in § 1131.7(a),

(b), or (e), or a handler described in § 1000.8(c) that supplied

the same product in the same-sized package with a similar label to

the wholesale customer during the month; and

(f) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)

and the operation of the distributing plant are the personal

enterprise of, and at the personal risk of, such person in his/her

capacity as a producer-handler.

§ 1131.11 [Reserved]
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§ 1131.12 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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1131.13; 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 § 1131.13(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;

(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; and

(5) A dairy farmer whose milk is received at a pool plant if

during the month milk from the same farm is received at a nonpool

plant (except a nonpool plant that has no utilization of milk

products in any class other than Class III or Class IV) other than

as producer milk under this or some other Federal order. Such a

dairy farmer shall be known as a dairy farmer for other markets.

§ 1131.13 Producer milk.

Producer milk means the skim milk (or the skim equivalent of

components of skim milk) 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 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, subject to the following conditions:
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(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 at a pool plant during the month;

(2) The total quantity of milk diverted by a handler in any

month shall not exceed 50 percent of the total producer milk

caused by the handler to be received at pool plants and diverted;

(3) Diverted milk shall be priced at the location of the

plant to which diverted;

(4) Any milk diverted in excess of the limits prescribed in

paragraph (d)(2) of this section shall not be producer milk. If

the diverting handler or cooperative association fails to

designate the dairy farmers’ deliveries that are not to be

producer milk, no milk diverted by the handler or cooperative

association during the month to a nonpool plant shall be producer

milk. In the event some of the milk of any producer is determined

not to be producer milk pursuant to this paragraph, other milk

delivered by such producer as producer milk during the month will

not be subject to § 1131.12(b)(5); and

(5) The delivery day requirement in paragraph (d)(1) of this

section and diversion percentage in paragraph (d)(2) of this

section may be increased or decreased by the market administrator

if the market administrator finds that such revision is necessary

to assure orderly marketing and efficient handling of milk in the

marketing area. Before making such a finding, the market

administrator shall investigate the need for the revision either

on the market administrator’s own initiative or at the request of

interested persons 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 a revision

might be appropriate, the market administrator shall issue a

notice stating that the revision is being considered and inviting

written data, views, and arguments. Any decision to revise the

delivery day requirement or the diversion percentage must be

issued in writing at least one day before the effective date.

§ 1131.14 Other source milk.

See § 1000.14.

§ 1131.15 Fluid milk product.

See § 1000.15.

§ 1131.16 Fluid cream product.

See § 1000.16.

§ 1131.17 [Reserved]

§ 1131.18 Cooperative association.

See § 1000.18.

§ 1131.19 Commercial food processing establishment.

See § 1000.19.
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HANDLER REPORTS

§ 1131.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 7th day

after the end of the month, in the detail and on the forms

prescribed by the market administrator, as follows: 

(a) With respect to each of its pool plants, the quantities

of skim milk and butterfat contained in or represented by: 

(1) Receipts of producer milk, including producer milk

diverted by the reporting handler, from sources other than

handlers described in § 1000.9(c);

(2) Receipts of milk from handlers described in § 1000.9(c); 

(3) Receipts of fluid milk products and bulk fluid cream

products from other pool plants;

(4) Receipts of other source milk;

(5) Inventories at the beginning and end of the month of

fluid milk products and bulk fluid cream products; and

(6) The utilization or disposition of all milk and milk

products required to be reported pursuant to this paragraph.

(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. Such 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 quantities of all skim milk and butterfat contained

in receipts of milk from producers; and

(2) The utilization or disposition of all such receipts.

(d) Each handler described in § 1131.10 shall report:

(1) The pounds of milk received from each of the handler’s

own-farm production units, showing separately the production of

each farm unit and the number of dairy cows in production at each

farm unit;

(2) Fluid milk products and bulk fluid cream products

received at its plant or acquired for route disposition from pool

plants, other order plants, and handlers described in § 1000.9(c);

(3) Receipts of other source milk not reported pursuant to

paragraph (d)(2) of this section;

(4) Inventories at the beginning and end of the month of

fluid milk products and fluid cream products; and

(5) The utilization or disposition of all milk and milk

products required to be reported pursuant to this paragraph.
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(e) Each handler not specified in paragraphs (a) through (d)

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.

§ 1131.31 Payroll reports.

(a) On or before the 20th day after the end of each month,

each handler that operates a pool plant pursuant to § 1131.7 and

each handler described in § 1000.9(c) shall report to the market

administrator its producer payroll for such month, in the detail

prescribed by the market administrator, showing for each producer:

(1) The month;

(2) The producer’s name and address;

(3) The daily and total pounds of milk received from the

producer;

(4) The total butterfat content of such milk; and

(5) The price per hundredweight, the gross amount due, the

amount and nature of any deductions, and the net amount paid.

(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.

§ 1131.32 Other reports.

In addition to the reports required pursuant to § 1131.30 and

§ 1131.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1131.40 Classes of utilization.

See § 1000.40.

§ 1131.41 [Reserved]

§ 1131.42 Classification of transfers and diversions.

See § 1000.42.

§ 1131.43 General classification rules.

See § 1000.43.

§ 1131.44 Classification of producer milk.

See § 1000.44.

§ 1131.45 Market administrator's reports and announcements

concerning classification.

See § 1000.45.

CLASS PRICES

§ 1131.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.
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§ 1131.51 Class I differential and price.

The Class I differential shall be the differential

established for Maricopa County, Arizona, which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for Maricopa County, Arizona.

§ 1131.52 Adjusted Class I differentials.

See § 1000.52.

§ 1131.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1131.54 Equivalent price.

See § 1000.54.

UNIFORM PRICES

§ 1131.60 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 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 (e)

of this section and subtracting from that total amount the value

computed in paragraph (f) of this section. 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) Multiply the pounds of skim milk and butterfat in

producer milk that were classified in each class pursuant to 

§ 1000.44(c) by the applicable skim milk and butterfat prices, and

add the resulting amounts;

(b) Multiply the pounds of skim milk and butterfat overage

assigned to each class pursuant to § 1000.44(a)(11) and the

corresponding steps of § 1000.44(b) by the respective skim milk

and butterfat prices applicable at the location of the pool plant;

(c) 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 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);

(d) 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
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§ 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;

(e) Multiply the Class I price applicable at the location of

the nearest unregulated supply plants from which an equivalent

volume was received 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 steps 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; and

(f) 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).

§ 1131.61 Computation of uniform prices.

On or before the 11th day of each month, the market

administrator shall compute a uniform butterfat price, a uniform

skim milk price, and a uniform price for producer milk receipts

reported for the prior month. The report of any handler who has

not made payments required pursuant to § 1131.71 for the preceding

month shall not be included in the computation of these prices,

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. 

(a) Uniform butterfat price. The uniform butterfat price

per pound, rounded to the nearest one-hundredth cent, shall be

computed by multiplying the pounds of butterfat in producer milk

allocated to each class pursuant to § 1000.44(b) by the respective

class butterfat prices and dividing the sum of such values by the

total pounds of such butterfat.

(b) Uniform skim milk price. The uniform skim milk price

per hundredweight, rounded to the nearest cent, shall be computed

as follows:
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(1) Combine into one total the values computed pursuant to §

1131.60 for all handlers;

(2) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1131.75;

(3) Add an amount equal to not less than one-half of the

unobligated balance in the producer-settlement fund;

(4) Subtract the value of the total pounds of butterfat for

all handlers. The butterfat value shall be computed by

multiplying the pounds of butterfat by the butterfat price

computed in paragraph (a) of this section;

(5) Divide the resulting amount by the sum of the following

for all handlers included in these computations:

(i) The total skim pounds of producer milk; and

(ii) The total skim pounds for which a value is computed

pursuant to § 1131.60(e); and 

(6) Subtract not less than 4 cents and not more than 5

cents.

(c) Uniform price. The uniform price per hundredweight,

rounded to the nearest cent, shall be the sum of the following:

(1) Multiply the uniform butterfat price for the month

pursuant to paragraph (a) of this section times 3.5 pounds of

butterfat; and

(2) Multiply the uniform skim milk price for the month

pursuant to paragraph (b) of this section times .965.

§ 1131.62 Announcement of uniform prices.

On or before the 11th day after the end of the month, the

market administrator shall announce the uniform prices for the

month computed pursuant to § 1131.61.
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PAYMENTS FOR MILK

§ 1131.70 Producer-settlement fund.

See § 1000.70.

§ 1131.71 Payments to the producer-settlement 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 13th day after the end of the month

(except as provided in § 1000.90). Payments due the market

administrator shall be deemed not to have been made until the

money owed has been received at the market administrator’s office,

or deposited into the market administrator’s bank account. 

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 § 1131.60.

(b) The sum of:

(1) The value at the uniform prices for skim milk and

butterfat, adjusted for plant location, of the handler’s receipts

of producer milk; and

(2) The value at the uniform price as adjusted pursuant to

§ 1131.75 applicable at the location of the plant from which

received of other source milk for which a value is computed

pursuant to § 1131.60(e).

§ 1131.72 Payments from the producer-settlement fund.

No later than the 14th 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 § 1131.71(b) exceeds the amount computed pursuant to

§ 1131.71(a). If, at such time, the balance in the producersettlement 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.

§ 1131.73 Payments to producers and to cooperative associations.

(a) Except as provided in paragraphs (b) and (c) of this

section, each handler shall make payment to each producer from

whom milk is received during the month as follows: 

(1) Partial Payment. For each producer who has not

discontinued shipments as of the 25th day of the month, payment

shall be made so that it is received by the producer on or before

the 27th day of each month (except as provided in § 1000.90) for

milk received from such producer during the first 15 days of the

month at not less than 1.3 times the lowest class price for the
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preceding month less proper deductions authorized in writing by

the producer.

(2) Final payment. For milk received during the month, a

payment computed as follows shall be made so that it is received

by each producer one day after the payment date required in

§ 1131.72:

(i) Multiply the hundredweight of producer skim milk

received times the uniform skim milk price for the month;

(ii) Multiply the pounds of producer butterfat received

times the uniform butterfat price for the month;

(iii) Multiply the hundredweight of producer milk received

times the plant location adjustment pursuant to § 1131.75; and

(iv) Add the amounts computed in paragraph (a)(2)(i), (ii),

and (iii) of this section, and from that sum:

(A) Subtract the partial payment made pursuant to paragraph

(a)(1) of this section;

(B) Subtract the deduction for marketing services pursuant

to § 1000.86;

(C) Add or subtract for errors made in previous payments to

the producer, subject to approval by the market administrator; and

(D) Subtract proper deductions authorized in writing by the

producer. 

(b) Two days prior to the dates on which partial and final

payments are due pursuant to paragraph (a) of this section, each

pool plant operator shall pay a cooperative association for milk

received as follows:

(1) Partial payment to a cooperative association for bulk

milk received directly from producers’ farms. For bulk milk

(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) received during the first 15 days of the month from a

cooperative association in any capacity except as the operator of

a pool plant, the payment shall be an amount not less than 1.3

times the lowest class price for the preceding month multiplied by

the hundredweight of milk. 

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the first 15 days of the

month from a cooperative association in its capacity as the

operator of a pool plant, the partial payment shall be at the pool

plant operator’s estimated use value of the milk using the most

recent class prices available for skim milk and butterfat at the

receiving plant’s location. 
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(3) Final payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the month from a

cooperative association in its capacity as the operator of a pool

plant, the final payment shall be the classified value of such

milk as determined by multiplying the pounds of skim milk and

butterfat assigned to each class pursuant to § 1000.44 by the

class prices for the month at the receiving plant’s location, and

subtracting from this sum the partial payment made pursuant to

paragraph (b)(2) of this section.

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, 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, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section. 

(c) If a handler has not received full payment from the

market administrator pursuant to § 1131.72 by the payment date

specified in paragraph (a) or (b) of this section, the handler may

reduce pro rata his payments pursuant to such paragraphs, but by

not more than the amount of such underpayment. Payments to

producers shall be completed on the next scheduled payment date

after receipt of the balance due from the market administrator.

(d) 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. In the event 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 producer- settlement fund to the

handler or the lawful claimant, as the case may be.

(e) In making payments to producers pursuant to this

section, each pool plant operator shall furnish each producer,

except a producer whose milk was received from a cooperative

association described in § 1000.9(a) or (c), a supporting

statement in such form that it may be retained by the recipient

which shall show:

(1) The month, and identity of the producer;

(2) The daily and total pounds and the total pounds of

butterfat content of producer milk;
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(3) The minimum rate at which payment to the producer is

required pursuant to this order;

(4) The rate used in making payments if the rate is other

than the applicable minimum rate;

(5) The amount, rate per hundredweight, and nature of each

deduction claimed by the handler; and

(6) The net amount of payment to the producer or cooperative

association.

§ 1131.74 [Reserved]

§ 1131.75 Plant location adjustments for producers and on 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 § 1131.51 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 §§ 1131.73 and 1000.76. 

§ 1131.76 Payments by handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1131.77 Adjustment of accounts.

See § 1000.77.

§ 1131.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1131.85 Assessment for order administration.

See § 1000.85.

§ 1131.86 Deduction for marketing services.

See § 1000.86.
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PART 1135 -- MILK IN THE WESTERN MARKETING AREA

Subpart -- Order Regulating Handling

GENERAL PROVISIONS

Sec.

1135.1 General provisions.

DEFINITIONS

1135.2 Western marketing area.

1135.3 Route disposition.

1135.4 Plant.

1135.5 Distributing plant.

1135.6 Supply plant.

1135.7 Pool plant.

1135.8 Nonpool plant.

1135.9 Handler.

1135.10 Producer-handler.

1135.11 Proprietary bulk tank handler.

1135.12 Producer.

1135.13 Producer milk.

1135.14 Other source milk.

1135.15 Fluid milk product.

1135.16 Fluid cream product.

1135.17 [Reserved]

1135.18 Cooperative association.

1135.19 Commercial food processing establishment.

HANDLER REPORTS

1135.30 Reports of receipts and utilization.

1135.31 Payroll reports.

1135.32 Other reports.

CLASSIFICATION OF MILK

1135.40 Classes of utilization.

1135.41 [Reserved]

1135.42 Classification of transfers and diversions.

1135.43 General classification rules.

1135.44 Classification of producer milk.

1135.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES

1135.50 Class prices, component prices, and advanced pricing

 factors.

1135.51 Class I differential and price.

1135.52 Adjusted Class I differentials.

1135.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1135.54 Equivalent price.
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PRODUCER PRICE DIFFERENTIAL

1135.60 Handler’s value of milk.

1135.61 Computation of producer price differential.

1135.62 Announcement of producer prices.
-675-

PAYMENTS FOR MILK

1135.70 Producer-settlement fund.

1135.71 Payments to the producer-settlement fund.

1135.72 Payments from the producer-settlement fund.

1135.73 Payments to producers and to cooperative associations.

1135.74 [Reserved]

1135.75 Plant location adjustments for producer milk and

 nonpool milk.

1135.76 Payments by a handler operating a partially regulated

 distributing plant.

1135.77 Adjustment of accounts.

1135.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1135.85 Assessment for order administration.

1135.86 Deduction for marketing services.

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

Subpart -- Order Regulating Handling

GENERAL PROVISIONS

§ 1135.1 General provisions.

The terms, definitions, and provisions in part 1000 of this

chapter apply to and are hereby made a part of this order. In

this part 1135, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1135.2 Western 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: 

Utah

All of the State of Utah.

Idaho Counties

Ada, Adams, Bannock, Bear Lake, Bingham, Blaine, Boise,

Bonneville, Camas, Canyon, Caribou, Cassia, Elmore, Franklin, Gem,

Gooding, Jefferson, Jerome, Lincoln, Madison, Minidoka, Oneida,

Owyhee, Payette, Power, Twin Falls, Valley, and Washington.

Nevada Counties

Elko, Lincoln, and White Pine.

Oregon Counties

Baker, Grant, Harney, Malheur, and Union.

Wyoming Counties
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Lincoln and Uinta.

§ 1135.3 Route disposition.

See § 1000.3.
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§ 1135.4 Plant.

See § 1000.4.

§ 1135.5 Distributing plant.

See § 1000.5.

§ 1135.6 Supply plant.

See § 1000.6.

§ 1135.7 Pool plant.

Pool Plant means a plant or unit of plants specified in

paragraphs (a) through (e) of this section, but excluding a plant

specified in paragraph (g) of this section. The pooling standards

described in paragraphs (c) and (d) of this section are subject to

modification pursuant to paragraph (f) of this section.

(a) A distributing plant, other than a plant qualified as a

pool plant pursuant to paragraph (b) of this section or section

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 ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which during the month the quantity

of bulk fluid milk products transferred or diverted to plants

described in paragraph (a) or (b) of this section is 35 percent or

more of the total Grade A milk received at the plant from dairy

farmers (except dairy farmers described in § 1135.12(b)) and

handlers described in § 1000.9(c) and § 1135.11, including milk

diverted by the plant operator, subject to the following

conditions:

(1) A supply plant that has qualified as a pool plant during

each of the immediately preceding months of September through

February shall continue to so qualify in each of the following

months of March through August unless the plant operator files a

written request with the market administrator that such plant not

be a pool plant, such nonpool status to be effective the first

month following such request. A plant withdrawn from pool supply

plant status may not be reinstated for any subsequent month of the
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March through July period unless it qualifies as a pool plant on

the basis of milk shipments;

(2) A pool plant operator may include as qualifying

shipments milk diverted to pool distributing plants pursuant to

§ 1135.13(c);

(3) 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

plant’s shipping percentage; and

(4) No plant may qualify as a pool plant due to a reduction

in the shipping percentage pursuant to paragraph (f) of this

section unless it has been a pool supply plant during each of the

immediately preceding 3 months.

(d) A milk manufacturing plant located within the marketing

area that is operated by a cooperative association if, during the

month or the immediately preceding 12-month period ending with the

current month, 35% or more of such cooperative’s member producer

milk (and any producer milk of nonmembers and members of another

cooperative association which may be marketed by the cooperative

association) is physically received in the form of bulk fluid milk

products (excluding concentrated milk transferred to a

distributing plant for an agreed-upon use other than Class I) at

plants specified in paragraph (a) or (b) of this section either

directly from farms or by transfer from supply plants operated by

the cooperative association and from plants of the cooperative

association for which pool plant status has been requested under

this paragraph subject to the following conditions:

(1) The plant does not qualify as a pool plant under

paragraph (a), (b) or (c) of this section or under comparable

provisions of another Federal order; and

(2) The plant is approved by a duly constituted regulatory

agency for the handling of milk approved for fluid consumption in

the marketing area.

(e) Two or more plants located in the marketing area and

operated by the same handler may qualify for pool plant status as

a unit by together meeting the requirements specified in paragraph

(a) of this section and subject to the following additional

requirements:

(1) At least one of the plants in the unit must individually

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 must be located in a pricing zone providing the same
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or a lower Class I price than the price applicable at the

distributing plant included in the unit pursuant to paragraph

(e)(1) of this section; and

(3) A written request to form a unit must be filed by the

handler with the market administrator prior to the first day of

the month for which such status is 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.

(f) The applicable shipping percentages of paragraphs (c) 

and (d) of this section may be increased or decreased 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

percentage must be issued in writing at least one day before the

effective date.

(g) 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 distribution in this marketing area

for 3 consecutive months or if the plant is required to be
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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 this order, 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 be requested in

advance and in writing by the handler and must be approved by the

market administrator.
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§ 1135.8 Nonpool plant.

See § 1000.8.

§ 1135.9 Handler.

In addition to the handlers defined in § 1000.9, handler

shall include a person meeting the standards set forth in § 

1135.11.

§ 1135.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is route disposition in the marketing area during the

month;

(b) Receives fluid milk products from own farm production or

milk that is fully subject to the pricing and pooling provisions

of this or another Federal order;

(c) Receives at its plant or acquires for route disposition

no more than 150,000 pounds of fluid milk products from handlers

fully regulated under any Federal order. This limitation shall

not apply if the producer-handler’s own farm production is less

than 150,000 pounds during the month;

(d) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products; and

(e) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)

and the processing and packaging operations are the producerhandler’s own enterprise and are operated at its own risk.

§ 1135.11 Proprietary bulk tank handler.

Any person, except a cooperative association, with respect to

milk that it receives for its account from the farm of a producer

in a tank truck owned and operated by, or under the control of,

such person and which is delivered during the month for the

account of such person to the pool plant of another handler or

diverted pursuant to § 1135.13, subject to the following

conditions:

(a) Such person must operate a plant located in the

marketing area at which milk is processed only into Class II,

Class III, or Class IV products; and

(b) Prior to operating as a handler pursuant to this

paragraph, such person must submit to the marker administrator a

statement signed by the applicant and the operator of the pool

plant to which the milk will be delivered specifying that the

applicant will be the responsible handler for the milk.

§ 1135.12 Producer.
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(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 (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1135.13; or

(2) Received by a handler described in § 1000.9(c) or §

1135.11.

(b) Producer shall not include:

(1) A producer-handler as defined in any Federal order;

(2) A dairy farmer whose milk is delivered to an exempt

plant, excluding producer milk diverted to the exempt plant

pursuant to § 1135.13(d);

(3) A dairy farmer whose milk is diverted to a pool plant by

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;

(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; and

(5) A dairy farmer whose milk was received at a nonpool

plant during the month from the same farm (except a nonpool plant

that has no utilization of milk products in any Class other than

Class III or Class IV) as other than producer milk under this or

any other Federal order. Such a dairy farmer shall be known as a

dairy farmer for other markets. 

§ 1135.13 Producer milk. 

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, a handler described in § 1000.9(c), or a handler

described in § 1135.11. All milk received pursuant to this

paragraph 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) or in §

1135.11 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, a cooperative

association described in § 1000.9(c), or a proprietary bulk tank
-683-

handler described in § 1135.11, to a nonpool plant, subject to the

following conditions:

(1) Milk of a dairy farmer shall not be eligible for

diversion unless at least one day’s milk production of such dairy

farmer has been physically received as producer milk at a pool

plant and the dairy farmer has continuously retained producer

status since that time. If a dairy farmer loses producer status

under this order (except as a result of a temporary loss of

Grade A approval), the dairy farmer’s milk shall not be eligible

for diversion until one day’s milk production has been physically

received as producer milk at a pool plant;

(2) Of the quantity of producer milk received during the

month (including diversions) the handler diverts to nonpool plants

not more than 90 percent;

(3) Two or more handlers described in § 1000.9(c) may have

their allowable diversions computed on the basis of their combined

deliveries of producer milk which they caused to be delivered to

pool plants or diverted during the month if each has filed a

request in writing with the market administrator before the first

day of the month the agreement is to be effective. The request

shall specify the basis for assigning overdiverted milk to the

producer deliveries of each according to a method approved by the

market administrator. 

(4) Diverted milk shall be priced at the location of the

plant to which diverted;

(5) Any milk diverted in excess of the limits prescribed in

paragraph (d)(2) of this section shall not be producer milk. If

the diverting handler, cooperative association, or proprietary

bulk tank handler fails to designate the dairy farmers’ deliveries

that are not to be producer milk, no milk diverted by the handler,

cooperative association, or proprietary bulk tank handler during

the month to a nonpool plant shall be producer milk. In the event

some of the milk of any producer is determined not to be producer

milk pursuant to this paragraph, other milk delivered by such

producer as producer milk during the month will not be subject to

§ 1135.12(b)(5); and

(6) The delivery day requirement in paragraph (d)(1) and the

diversion percentage in paragraph (d)(2) of this section may be

increased or decreased by the market administrator if the market

administrator finds that such revision is necessary to assure

orderly marketing and efficient handling of milk in the marketing

area. Before making such a finding, the market administrator

shall investigate the need for the revision either on the market

administrator’s own initiative or at the request of interested

persons if the request is made in writing at least 15 days prior
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to the month for which the requested revision is desired

effective. If the investigation shows that a revision might be

appropriate, the market administrator shall issue a notice stating

that the revision is being considered and inviting written data,

views, and arguments. Any decision to revise the delivery day

requirement or the diversion percentage must be issued in writing

at least one day before the effective date.

§ 1135.14 Other source milk.

See § 1000.14.

§ 1135.15 Fluid milk product.

See § 1000.15.

§ 1135.16 Fluid cream product.

See § 1000.16.

§ 1135.17 [Reserved]

§ 1135.18 Cooperative association.

See § 1000.18.

§ 1135.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1135.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator receives the report on or before the 7th day after

the end of each month, in the detail and on the forms prescribed

by the market administrator, as follows:

(a) Each handler that operates a pool plant pursuant to

§ 1135.7 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 § 1135.11; and

(ii) Receipts of milk from handlers described in § 1000.9(c)

and § 1135.11;

(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; and
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(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) or 1135.11 shall

report:

(1) The product pounds, pounds of butterfat, pounds of

protein, and the 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.

§ 1135.31 Payroll reports.

(a) On or before the 21st day after the end of each month,

each handler that operates a pool plant pursuant to § 1135.7 and

each handler described in § 1000.9(c) and in § 1135.11 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

§ 1135.73(e).

(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.

§ 1135.32 Other reports.

In addition to the reports required pursuant to §§ 1135.30

and 1135.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1135.40 Classes of utilization.

See § 1000.40.

§ 1135.41 [Reserved]

§ 1135.42 Classification of transfers and diversions. 
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See § 1000.42.

§ 1135.43 General classification rules.

See § 1000.43.

§ 1135.44 Classification of producer milk.

See § 1000.44.

§ 1135.45 Market administrator's reports and announcements

concerning classification.

See § 1000.45.

CLASS PRICES

§ 1135.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.

§ 1135.51 Class I differential and price.

The Class I differential shall be the differential

established at Salt Lake County, Utah, which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for Salt Lake County, Utah.

§ 1135.52 Adjusted Class I differentials.

See § 1000.52.

§ 1135.53 Announcement of class prices, component prices, and

advanced pricing factors. 

See § 1000.53.

§ 1135.54 Equivalent price.

See § 1000.54.
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PRODUCER PRICE DIFFERENTIAL

§ 1135.60 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 each handler described in

§ 1000.9(c) and each handler described in § 1135.11, 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 value computed in paragraph

(i) 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 nonfat components in producer skim milk. 

Receipts of nonfluid milk products that are distributed as labeled

reconstituted milk for which payments are made to the producersettlement 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.

(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) Multiply the pounds of skim milk and butterfat overage

assigned to each class pursuant to § 1000.44(a)(11) and the
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corresponding step of § 1000.44(b) by the skim milk prices and

butterfat prices applicable to each class.

(f) 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 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) 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) 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 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) 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).

§ 1135.61 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 § 1135.71

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
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until the handler has made full payment of outstanding monthly

obligations. Subject to the aforementioned conditions, the market

administrator shall compute the producer price differential in the

following manner:

(a) Combine into one total the values computed pursuant to

§ 1135.60 for all handlers required to file reports prescribed in

§ 1135.30;

(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 § 1135.60 by the protein price, the other solids

price, and the butterfat price, respectively;

(c) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1135.75;

(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 § 1135.60(h); 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.

§ 1135.62 Announcement of producer prices.

On or before the 12th 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) [Reserved]

(g) The average butterfat, protein, nonfat solids, and other

solids content of producer milk; and

(h) The statistical uniform price for milk containing 3.5

percent butterfat, computed by combining the Class III price and

the producer price differential.

PAYMENTS FOR MILK

§ 1135.70 Producer-settlement fund.

See § 1000.70.

§ 1135.71 Payments to the producer-settlement fund.
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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 14th 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 § 1135.60.

(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 § 1135.75;

(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;

(3) [Reserved]

(4) An amount obtained by multiplying the pounds of skim

milk and butterfat for which a value was computed pursuant to

§ 1135.60(h) by the producer price differential as adjusted

pursuant to § 1135.75 for the location of the plant from which

received.

§ 1135.72 Payments from the producer-settlement fund.

No later than the 15th 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 § 1135.71(b) exceeds the amount computed pursuant to

§ 1135.71(a). If, at such time, the balance in the producersettlement 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.

§ 1135.73 Payments to producers and to cooperative associations. 

(a) Except as provided in paragraph (b) of this section,

each handler shall make payment to each producer from whom milk is

received during the month as follows: 

(1) Partial Payment. On or before the 25th day of each month

(except as provided in § 1000.90) to each producer an amount not

less than 1.2 times the lowest class price for the preceding month

multiplied by the hundredweight of milk received from such

producer during the first 15 days of the month, less proper

deductions authorized in writing by such producer to be made from

payments due pursuant to this paragraph.
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(2) Final Payment. On or before the 17th day of the

following month (except as provided in § 1000.90), not less than

an amount computed by the sum of the following:

(i) The hundredweight of producer milk received times the

producer price differential for the month as adjusted pursuant to

§ 1135.75;

(ii) The pounds of butterfat in producer milk received times

the butterfat price for the month;

(iii) The pounds of protein in producer milk received times

the protein price for the month;

(iv) The pounds of other solids in producer milk received

times the other solids price for the month;

(v) [Reserved]

(vi) Less any payments made pursuant to paragraph (a)(1) of

this section;

(vii) 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; and

(viii) Less deductions made for marketing service pursuant

to § 1000.86.

(b) One day prior to the dates on which partial and final

payments are due pursuant to paragraph (a) of this section, each

pool plant operator shall pay a cooperative association for milk

received as follows:

(1) Partial payment to a cooperative association for bulk

milk received directly from producers’ farms. For bulk milk

(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) received during the first 15 days of the month from a

cooperative association in any capacity, except as the operator of

a pool plant, the payment shall be an amount not less than 1.2

times the lowest class price for the preceding month multiplied by

the hundredweight of milk. 

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the first 15 days of the

month from a cooperative association in its capacity as the

operator of a pool plant, the partial payment shall be at the pool

plant operator’s estimated use value of the milk using the most

recent class prices available at the receiving plant’s location. 

(3) Final payment to a cooperative association for milk

transferred from its pool plant. For the total quantity of bulk

fluid milk products and bulk fluid cream products received from a
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cooperative association in its capacity as the operator of a pool

plant, the final payment shall be 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

prices to be used shall be the prices 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

(b)(3)(i) through (vii) of this section and from that sum deduct

any payment made pursuant to paragraph (b)(1) of this section.

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, 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, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section. 

(c) If a handler has not received full payment from the

market administrator pursuant to § 1135.72 by the payment date

specified in paragraph (a) or (b) of this section, the handler may

reduce pro rata its payments to producers or to the cooperative

association by not more than the amount of such underpayment. The

payments shall be completed on the next scheduled payment date

after receipt of the balance due from the market administrator.

(d) 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
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be made to the producer settlement fund, and in the event 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 producer- settlement fund to

the handler or to the lawful claimant, as the case may be.

(e) 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) [Reserved]

(5) The minimum rate or rates at which payment to the

producer is required pursuant to this order;

(6) The rate used in making payment if the rate is other

than the applicable minimum rate;

(7) The amount, or rate per hundredweight, or rate per

pounds of component, and the nature of each deduction claimed by

the handler; and

(8) The net amount of payment to the producer or cooperative

association.

§ 1135.74 [Reserved]

§ 1135.75 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 § 1135.51 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 §§ 1135.73 and 1000.76. 

§ 1135.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1135.77 Adjustment of accounts.

See § 1000.77.

§ 1135.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1135.85 Assessment for order administration.
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See § 1000.85.

§ 1135.86 Deduction for marketing services.

See § 1000.86.