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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
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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
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(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
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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
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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.
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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 § 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
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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
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§ 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
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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.
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§ 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
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(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
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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;
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(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.
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§ 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.
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(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.