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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.