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. 

UNIFORM PRICES 

1005.60 Handler's value of milk. 

1005.61 Computation of uniform prices.

1005.62 Announcement of uniform prices. 

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, and 7253. 

Subpart--Order Regulating Handling

GENERAL PROVISIONS 

§ 1005.1 General provisions.

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

chapter apply to this part 1005. 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. 

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 

§ ----.7(b) of any other Federal milk order, from which during the

month 50 percent or more of the fluid milk products physically

received at such plant (excluding concentrated milk received from

another plant by agreement for other than Class I use) are disposed

of as route disposition or are transferred in the form of packaged

fluid milk products to other distributing plants. At least 25

percent of such route disposition and transfers must be to outlets in

the marketing area. 

(b) Any distributing plant located in the marketing area which

during the month processed at least 50 percent of the total quantity

of fluid milk products physically received at the plant (excluding

concentrated milk received from another plant by agreement for other

than Class I use) into ultra-pasteurized or aseptically-processed

fluid milk products.

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

quantity of milk that is physically received during the month from

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

that is diverted 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 agreedupon 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.

(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 the order in this part, 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.

§ 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]

§ 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;

(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.

See § 1000.16.

§ 1005.17 [Reserved]

§ 1005.18 Cooperative association.

See § 1000.18.

§ 1005.19 Commercial food processing establishment.

See § 1000.19.

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 § 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.

§ 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 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:

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

1005.60 for all handlers;

(2) Add an amount equal to the minus location adjustments and

subtract an amount equal to the plus 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.

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

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 producer-settlement fund is

insufficient to make all payments pursuant to this section, the

market administrator shall reduce uniformly such payments and shall
complete the payments as soon as the funds are available.

§ 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 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 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 the order in this part;

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

the applicable minimum rate;

(6) The amount, or rate per hundredweight, 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 § 1005.51 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 §§

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

§ 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 June-January period. In the event

that during any month of the June-January 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.

(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

(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 the order in this part or the

marketing area of Federal Order 1007 (7 CFR part 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

(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.