BEFORE THE UNITED STATES DEPARTMENT OF AGRICULTURE 

AGRICULTURAL MARKETING SERVICE 

REC'D - USDA/OALJ/HCO

202

3 APR 19

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MILK IN THE APPALACHIAN, DOCKET NO. 23-J-0019; AMS-DA-0003 

SOUTHEAST, AND FLORIDA 

MARKETING AREAS 

HEARING ON PROPOSED 

AMENDMENTS TO 

TRANSPORTATION CREDIT 

PROVISIONS 

Post-Hearing Brief of Select Milk Producers, Inc. 

I. Introduction 

Select Milk Producers Inc. (“Select”) submits this post-hearing regarding proposals to 

address the transportation credit regulations in the Appalachian Milk Marketing Area (“Order 5”), 

Florida Milk Marketing Area (“Order 6”) and Southeast Milk Marketing Area (“Order 7”). Select 

is a Capper-Volstead cooperative which markets milk in the Federal Order system. Select’s 

members are located principally in the Mideast Milk Marketing Area (“Order 33”) and Southwest 

Milk Marketing Area (“Order 126”). Select also has non-member shippers located in Order 5 and 

Order 7. Select’s member milk is, from time to time, delivered to plants regulated by Orders 5 and 

7, and Select receives transportation credits on most of those deliveries. The milk of Select’s 

nonmember farms located in Orders 5 and 7 is producer milk on those Orders. 

Select is a member of Dairy Cooperative Marketing Association, the proponent of 

Proposals 1, 2, 3, 4, and 5. 

II. The Role of The Federal Order System 

Select is a supporter of the Federal Milk Marketing Order (“FMMO”) system. Any 

amended Order should be that which the Department deems most effective in protecting the 

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interest of producers and consumers in an orderly supply of milk to the consumer market. See 7 

U.S.C. §608c(4). Select and its members believe that FMMO regulations, in addition to meeting 

their statutory mandate, should promote the efficiency of milk movements, efficiency of producer 

operations, and efficiency in milk procurement. Further, amendments to the FMMOs should avoid 

solutions that artificially create benefits for limited groups of market participants under the guise 

of a regulatory solution. 

While Select generally opposes the use of transportation credits (“TC”) to attract supplies 

of milk in favor of market economics, the Secretary has previously recognized the unique 

challenges in attracting sufficient milk to supply markets in the Southeast. As long as a TC program 

is in place for these marketing areas, they should be kept current and updated to achieve their 

intended purpose. As the hearing record reflects, the combination of (1) having to haul 

supplemental milk greater distances and (2) fuel costs which have at times been double the levels 

during the last revisions to the TC regulations, necessitates adjustments to maintain the viability 

of the overall TC program. See, e.g., Ex. 12, p.4-5, Ex. 79. 

III. Comments on Waiving a Recommended Decision 

DCMA has requested that the Secretary omit a recommended decision in this proceeding 

to expedite the implementation of the proposed changes. Recommended decisions play a critical 

role in allowing affected market participants to review and advise the Secretary about the intended 

and unintended effects of critical regulatory amendments. Recommended decisions provide 

affected parties the opportunity for comment and the Secretary the opportunity for potential 

refinement before changes take effect through a Final Decision. Select belives that this usual order 

is among the reasons why the federal order system has endured and continues to benefit dairy 

producers. 

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As DCMA’s witness noted, cost data used to establish transportation credits were last 

reviewed in 2006. But the passage of time alone should not provide the basis for eliminating a 

recommended decision. Rather, the totality of the record must be considered. 

The issues under consideration in this proceeding are of the type that could have been 

handled through notice and comment rulemaking under 5 U.S.C. Sec. 553. The rules of practice 

for the amendment of milk marketing orders provide, in relevant part: 

USDA may elect to use informal rulemaking procedures under 553 of Title 5, 

United States Code, to amend Federal milk marketing agreements and orders, other 

than provisions that directly affect milk prices. In making this determination, 

consideration shall be given to: 

(a) The nature and complexity of the proposal; 

(b) The potential regulatory and economic impacts on affected entities; and 

(c) Any other relevant matters. 

7 C.F.R. Sec. 900.32. 

The formal rulemaking process is a superior procedure for amending milk marketing 

orders, and Select strongly agrees with the Secretary’s decision to consider these proposals through 

formal rulemaking. Deviation from the regular order amendment process, and the use of notice 

and comment rulemaking, should be the rare exception. The factors set forth in Section 900.32, 

nevertheless, are useful guides for determining whether a recommended decision might be 

prudently omitted. 

Here, the transportation credit regulations do not directly affect milk prices, unlike 

proposals that would adjust make allowances, yield factors, class differentials, or other elements 

of the classified price formulas contained within the various orders. Additionally, while milk 

marketing orders are notoriously complex, within the universe of milk marketing regulations, the 

issues in this proceeding are comparatively straightforward. Proposals 1 and 2 are updates to 

existing procedures and terms. Proposals 3, 4, and 5, although new additions to their respective 

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orders, follow a methodology and operation quite analogous to the existing transportation credit 

provisions. 

The potential economic and regulatory impacts on affected entities are also comparatively 

minor. Adoption of Proposals 1-5 should not significantly increase the regulatory burden on 

handlers, nor impose federal order regulation on additional handlers. 

In addition, there appears to be a consensus that the transportation credit regulations are in 

need of being updated. No witness testified in substantial opposition to updating the transportation 

credit formulas. Unlike many hearings to amend milk marketing orders, there are few competing 

proposals, and the data upon which the proponents have relied are not subject to disagreement. 

By comparison, complex and contentious order amendment proposals would be subject to 

multiple competing alternatives or even vigorous opposition. In such instances, the interplay of 

different proposals and alternatives could have dramatic and substantial impacts on the prices paid 

by handlers, the prices received by producers, and wide-ranging long-term impacts on market order 

and disorder. In such situations, omitting a recommended decision would be irresponsible. That is 

not the case here. 

Respectfully submitted, 

MILTNER REED, LLC 

/s/ Ryan K. Miltner 

201 East Auglaize Street, Suite 1 

New Knoxville, OH 45895 

(866) 740-5219 

ryan@miltner-reed.com 

Counsel for Select Milk Producers, Inc. 

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CERTIFICATE OF SERVICE 

This Post Hearing Brief was filed was served upon the following interested parties by e-mail on 

April 19, 2023. 

Marvin Beshore, Esq. 

Counsel for Dairy Cooperative 

Marketing Association 

mbeshore@johnsonduffie.com 

Dennis Tonak 

Prairie Farms Dairy, Inc. 

dtonak@prairiefarms.com 

Chris Hoeger 

Prairie Farms Dairy, Inc. 

choeger@prairiefarms.com 

Michael Sumners 

Tri-Hope Dairy Farms 

mps@wk.net 

Elvin Hollon 

Consultant to DCMA 

hollone@att.net 

Sally Keefe 

Milk Innovation Group 

skfigures@gmail.com 

Hon. Channing Strother 

USDA, Chief Administrative Law Judge 

channing.strother@usda.gov 

Brian Hill, Esq. 

Senior Counsel, USDA 

brian.hill1@usda.gov 

Michelle McMurtray, Esq. 

Attorney Advisor, USDA 

michelle.mcmurtray@usda.gov 

Erin Taylor, Director 

USDA-AMS Dairy Programs 

Director, Order Formulation & Enforcement 

erin.taylor@usda.gov 

Lauren Becker 

USDA-AMS Dairy Programs 

Dairy Marketing Specialist 

lauren.becker@usda.gov 

Rebecca Dickerson 

USDA-AMS Dairy Programs 

Dairy Marketing Specialist 

rebecca.dickerson@usda.gov 

/s/ Ryan K. Miltner 

Counsel for Select Milk Producers, Inc. 

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