PART 1124 - MILK IN THE PACIFIC NORTHWEST MARKETING AREA

Subpart - Order Regulating Handling

GENERAL PROVISIONS

Sec. 

1124.1 General provisions. 

DEFINITIONS 

1124.2 Pacific Northwest marketing area.

1124.3 Route disposition.

1124.4 Plant.

1124.5 Distributing plant.

1124.6 Supply plant. 

1124.7 Pool plant.

1124.8 Nonpool plant.

1124.9 Handler.

1124.10 Producer-handler. 

1124.11 Cooperative reserve supply unit.

1124.12 Producer. 

1124.13 Producer milk.

1124.14 Other source milk.

1124.15 Fluid milk product.

1124.16 Fluid cream product.

1124.17 [Reserved]

1124.18 Cooperative association.

1124.19 Commercial food processing establishment.

HANDLER REPORTS

1124.30 Reports of receipts and utilization. 

1124.31 Payroll reports. 

1124.32 Other reports. 

CLASSIFICATION OF MILK

1124.40 Classes of utilization.

1124.41 [Reserved]

1124.42 Classification of transfers and diversions.

1124.43 General classification rules.

1124.44 Classification of producer milk.

1124.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES 

1124.50 Class prices, component prices, and advanced pricing

 factors. 

1124.51 Class I differential and price. 

1124.52 Adjusted Class I differentials.

1124.53 Announcement of class prices, component prices, and
 advanced pricing factors.

1124.54 Equivalent price. 

PRODUCER PRICE DIFFERENTIAL

1124.60 Handler's value of milk.

1124.61 Computation of producer price differential.

1124.62 Announcement of producer prices.

PAYMENTS FOR MILK 

1124.70 Producer-settlement fund. 

1124.71 Payments to the producer-settlement fund.

1124.72 Payments from the producer-settlement fund. 

1124.73 Payments to producers and to cooperative associations. 

1124.74 [Reserved]

1124.75 Plant location adjustments for producer milk and

 nonpool milk.

1124.76 Payments by a handler operating a partially regulated

 distributing plant.

1124.77 Adjustment of accounts.

1124.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION 

1124.85 Assessment for order administration. 

1124.86 Deduction for marketing services.

 Authority: 7 U.S.C. 601-674, and 7253. 

Subpart - Order Regulating Handling

GENERAL PROVISIONS

§ 1124.1 General provisions.

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

chapter apply to this part 1124. In this part 1124, all references

to sections in part 1000 refer to part 1000 of this chapter.

DEFINITIONS

§ 1124.2 Pacific Northwest marketing area.

The marketing area means all territory within the bounds of the

following states and political subdivisions, including all piers,

docks, and wharves connected therewith and all craft moored thereat,

and all territory occupied by government (municipal, State, or

Federal) reservations, installations, institutions, or other similar

establishments if any part thereof is within any of the listed states

or political subdivisions:

Idaho Counties

Benewah, Bonner, Boundary, Kootenai, Latah, and Shoshone.

Oregon Counties

Benton, Clackamas, Clatsop, Columbia, Coos, Crook, Curry,

Deschutes, Douglas, Gilliam, Hood River, Jackson, Jefferson,
Josephine, Klamath, Lake, Lane, Lincoln, Linn, Marion, Morrow,

Multnomah, Polk, Sherman, Tillamook, Umatilla, Wasco, Washington,

Wheeler, and Yamhill.

Washington

All of the State of Washington.

§ 1124.3 Route disposition.

See § 1000.3.

§ 1124.4 Plant.

See § 1000.4.

§ 1124.5 Distributing plant.

See § 1000.5.

§ 1124.6 Supply plant.

See § 1000.6.

§ 1124.7 Pool plant.

Pool plant means a plant, unit of plants, or a system of plants

as specified in paragraphs (a) through (f) of this section, but

excluding a plant specified in paragraph (h) of this section. The

pooling standards described in paragraph (c) of this section are

subject to modification pursuant to paragraph (g) of this section:

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

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

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

month 25 percent or more of the total quantity of fluid milk products

physically received at the plant (excluding concentrated milk

received from another plant by agreement for other than Class I use)

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

of packaged fluid milk products to other distributing plants. At

least 25 percent of such route disposition and transfers must be to

outlets in the marketing area. 

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

during the month processed at least 25 percent of the total quantity

of fluid milk products physically received at the plant (excluding

concentrated milk received from another plant by agreement for other

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

fluid milk products.

(c) A supply plant from which during any month not less than

20 percent of the total quantity of milk that is physically received

at such plant from dairy farmers eligible to be producers pursuant to

§ 1124.12 (excluding milk received at such plant as diverted milk

from another plant, which milk is classified other than Class I under

the order in this part and is subject to the pricing and pooling

provisions of this or another order issued pursuant to the Act) or
diverted as producer milk to another plant pursuant to § 1124.13, is

shipped in the form of a fluid milk product (excluding concentrated

milk transferred by agreement for other than Class I use) to a pool

distributing plant or is a route disposition in the marketing area of

fluid milk products processed and packaged at such plant;

(1) A supply plant that has qualified as a pool plant during

each of the immediately preceding months of September through

February shall continue to so qualify in each of the following months

of March through August, unless the plant operator files a written

request with the market administrator that such plant not be a pool

plant, such nonpool status to be effective the first month following

such request and thereafter until the plant qualifies as a pool plant

on the basis of milk shipments;

(2) A cooperative association that operates a supply plant may

include as qualifying shipments its deliveries to pool distributing

plants directly from farms of producers pursuant to § 1000.9(c);

(3) A pool plant operator may include as qualifying shipments

milk diverted to pool distributing plants pursuant to § 1124.13(d);

(4) No plant may qualify as a pool plant due to a reduction in

the shipping percentage pursuant to paragraph (g) of this section

unless it has been a pool supply plant during each of the immediately

preceding 3 months.

(d) - (f) [Reserved]

(g) The applicable shipping percentage of paragraph (c) of

this section may be increased or decreased by the market

administrator if the market administrator finds that such adjustment

is necessary to encourage needed shipments or to prevent uneconomic

shipments. Before making such a finding, the market administrator

shall investigate the need for adjustment either on the market

administrator’s own initiative or at the request of interested

parties if the request is made in writing at least 15 days prior to

the month for which the requested revision is desired effective. If

the investigation shows that an adjustment of the shipping

percentages might be appropriate, the market administrator shall

issue a notice stating that an adjustment is being considered and

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

applicable shipping percentage must be issued in writing at least one

day before the effective date.

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

plants:

(1) A producer-handler as defined under any Federal order;

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

(3) A plant located within the marketing area and qualified

pursuant to paragraph (a) of this section which meets the pooling

requirements of another Federal order, and from which more than 50

percent of its route disposition has been in the other Federal order

marketing area for 3 consecutive months;
(4) A plant located outside any Federal order marketing area

and qualified pursuant to paragraph (a) of this section that meets

the pooling requirements of another Federal order and has had greater

route disposition in such other Federal order’s marketing area for 3

consecutive months;

(5) A plant located in another Federal order marketing area

and qualified pursuant to paragraph (a) of this section that meets

the pooling requirements of such other Federal order and does not

have a majority of its route distribution in this marketing area for

3 consecutive months or if the plant is required to be regulated

under such other Federal order without regard to its route

disposition in any other Federal order marketing area; and

(6) A plant qualified pursuant to paragraph (c) of this

section which also meets the pooling requirements of another Federal

order and from which greater qualifying shipments are made to plants

regulated under the other Federal order than are made to plants

regulated under the order in this part, or the plant has automatic

pooling status under the other Federal order.

§ 1124.8 Nonpool plant.

See § 1000.8.

§ 1124.9 Handler.

See § 1000.9.

§ 1124.10 Producer-handler.

Producer-handler means a person who operates a dairy farm and a

distributing plant from which there is route disposition within the

marketing area during the month and who the market administrator has

designated a producer-handler after determining that all of the

requirements of this section have been met. 

(a) Requirements for designation. Designation of any person

as a producer-handler by the market administrator shall be contingent

upon meeting the conditions set forth in paragraphs (a)(1) through

(4) of this section. Following the cancellation of a previous

producer-handler designation, a person seeking to have his/her

producer-handler designation reinstated must demonstrate that these

conditions have been met for the preceding month.

(1) The care and management of the dairy animals and other

resources and facilities designated in paragraph (b)(1) of this

section necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order) are

under the complete and exclusive control and management of the

producer-handler and are operated as the producer-handler’s own

enterprise and at its own risk.

(2) The plant operation designated in paragraph (b)(2) of this

section at which the producer-handler processes and packages, and
from which it distributes, its own milk production is under the

complete and exclusive control and management of the producer-handler

and is operated as the producer-handler’s own enterprise and at its

sole risk.

(3) The producer-handler neither receives at its designated

milk production resources and facilities nor receives, handles,

processes, or distributes at or through any of its designated milk

handling, processing, or distributing resources and facilities other

source milk products for reconstitution into fluid milk products or

fluid milk products derived from any source other than:

(i) Its designated milk production resources and facilities

(own farm production);

(ii) Pool handlers and plants regulated under any Federal

order within the limitation specified in paragraph (c)(2) of this

section; or

(iii) Nonfat milk solids which are used to fortify fluid milk

products.

(4) The producer-handler is neither directly nor indirectly

associated with the business control or management of, nor has a

financial interest in, another handler's operation; nor is any other

handler so associated with the producer-handler's operation.

(b) Designation of resources and facilities. Designation of a

person as a producer-handler shall include the determination of what

shall constitute the person’s milk production, handling, processing,

and distribution resources and facilities, all of which shall be

considered an integrated operation.

(1) Milk production resources and facilities shall include all

resources and facilities (milking herd(s), buildings housing such

herd(s), and the land on which such buildings are located) used for

the production of milk which are directly or indirectly, solely or

partially, owned, operated, or controlled by the producer-handler, in

which the producer-handler in any way has an interest, including any

contractual arrangement, or which are directly, indirectly, or

partially owned, operated, or controlled by any partner or

stockholder of the producer-handler. However, for purposes of this

paragraph, any such milk production resources and facilities which do

not constitute an actual or potential source of milk supply for the

producer-handler's operation shall not be considered a part of the

producer-handler's milk production resources and facilities.

(2) Milk handling, processing, and distribution resources and

facilities shall include all resources and facilities (including

store outlets) used for handling, processing, and distributing fluid

milk products which are solely or partially owned by, and directly or

indirectly operated or controlled by, the producer-handler or in

which the producer-handler in any way has an interest, including any

contractual arrangement, or over which the producer-handler directly

or indirectly exercises any degree of management or control.
(3) All designations shall remain in effect until canceled

pursuant to paragraph (c) of this section.

(c) Cancellation. The designation as a producer-handler shall

be canceled upon determination by the market administrator that any

of the requirements of paragraphs (a)(1) through (4) of this section

are not continuing to be met, or under any of the conditions

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

of a producer-handler’s status pursuant to this paragraph shall be

effective on the first day of the month following the month in which

the requirements were not met or the conditions for cancellation

occurred. 

(1) Milk from the milk production resources and facilities of

the producer-handler, designated in paragraph (b)(1) of this section,

is delivered in the name of another person as producer milk to

another handler.

(2) The producer-handler handles fluid milk products derived

from sources other than the milk production facilities and resources

designated in paragraph (b)(1) of this section, except that it may

receive at its plant, or acquire for route disposition, fluid milk

products from fully regulated plants and handlers under any Federal

order if such receipts do not exceed 150,000 pounds monthly. This

limitation shall not apply if the producer-handler’s own farm

production is less than 150,000 pounds during the month.

(d) Public announcement. The market administrator shall

publicly announce:

(1) The name, plant location(s), and farm location(s) of

persons designated as producer-handlers;

(2) The names of those persons whose designations have been

canceled; and

(3) The effective dates of producer-handler status or loss of

producer-handler status for each. Such announcements shall be

controlling with respect to the accounting at plants of other

handlers for fluid milk products received from any producer-handler.

(e) Burden of establishing and maintaining producer-handler

status. The burden rests upon the handler who is designated as a

producer-handler to establish through records required pursuant to §

1000.27 that the requirements set forth in paragraph (a) of this

section have been and are continuing to be met, and that the

conditions set forth in paragraph (c) of this section for

cancellation of designation do not exist.

§ 1124.11 Cooperative reserve supply unit.

Cooperative reserve supply unit means any cooperative

association or its agent that is a handler pursuant to § 1000.9(c)

that does not own or operate a plant, if such cooperative has been

qualified to receive payments pursuant to § 1124.73 and has been a

handler of producer milk under the order in this part or its
predecessor order during each of the 12 previous months, and if a

majority of the cooperative’s member producers are located within 125

miles of a plant described in § 1124.7(a). A cooperative reserve

supply unit shall be subject to the following conditions:

(a) The cooperative shall file a request with the market

administrator for cooperative reserve supply unit status at least 15

days prior to the first day of the month in which such status is

desired to be effective. Once qualified as a cooperative reserve

supply unit pursuant to this paragraph, such status shall continue to

be effective unless the cooperative requests termination prior to the

first day of the month that change of status is requested, or the

cooperative fails to meet all of the conditions of this section.

(b) The cooperative reserve supply unit supplies fluid milk

products to pool distributing plants located within 125 miles of a

majority of the cooperative’s member producers in compliance with any

announcement by the market administrator requesting a minimum level

of shipments as follows:

(1) The market administrator may require such supplies of bulk

fluid milk from cooperative reserve supply units whenever the market

administrator finds that milk supplies for Class I use are needed for

plants defined in § 1124.7(a) or (b). Before making such a finding,

the market administrator shall investigate the need for such

shipments either on the market administrator’s own initiative or at

the request of interested persons if the request is made in writing

at least 15 days prior to the month for which the requested revision

is desired effective. If the market administrator’s investigation

shows that such shipments might be appropriate, the market

administrator shall issue a notice stating that a shipping

announcement is being considered and inviting data, views and

arguments with respect to the proposed shipping announcement. Any

decision on the required shipment of bulk fluid milk from cooperative

reserve supply units must be made in writing at least one day before

the effective date.

(2) Failure of a cooperative reserve supply unit to comply

with any announced shipping requirements, including making any

significant change in the unit’s marketing operation that the market

administrator determines has the impact of evading or forcing such an

announcement, shall result in immediate loss of cooperative reserve

supply unit status until such time as the unit has been a handler

pursuant to § 1000.9(c) for at least 12 consecutive months.

§ 1124.12 Producer.

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

producer means any person who produces milk approved by a duly

constituted regulatory agency for fluid consumption as Grade A milk

and whose milk (or components of milk) is:

(1) Received at a pool plant directly from the producer or
diverted by the plant operator in accordance with § 1124.13; or

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

(b) Producer shall not include:

(1) A producer-handler as defined in any Federal order;

(2) A dairy farmer whose milk is received at an exempt plant,

excluding producer milk diverted to the exempt plant pursuant to

§ 1124.13(e);

(3) A dairy farmer whose milk is received by diversion at a

pool plant from a handler regulated under another Federal order if

the other Federal order designates the dairy farmer as a producer

under that order and that milk is allocated by request to a

utilization other than Class I;

(4) A dairy farmer whose milk is reported as diverted to a

plant fully regulated under another Federal order with respect to

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

under the provisions of such other order; and

(5) A dairy farmer whose milk was received at a nonpool plant

during the month from the same farm as other than producer milk under

the order in this part or any other Federal order. Such a dairy

farmer shall be known as a dairy farmer for other markets.

§ 1124.13 Producer milk.

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

components of skim milk), including nonfat components, and butterfat

in milk of a producer that is:

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

producer or a handler described in § 1000.9(c). All milk received

pursuant to this paragraph shall be priced at the location of the

plant where it is first physically received;

(b) Received by a cooperative reserve supply unit described in

§ 1124.11. All milk received pursuant to this paragraph shall be

priced at the location of the plant where it is first physically

received and shall not be subject to the conditions specified in

paragraph (e) of this section; 

(c) Received by a handler described in § 1000.9(c) in excess

of the quantity delivered to pool plants;

(d) Diverted by a pool plant operator to another pool plant. 

Milk so diverted shall be priced at the location of the plant to

which diverted; or

(e) Diverted by the operator of a pool plant or a cooperative

association described in § 1000.9(c), excluding a cooperative

reserve supply unit described in § 1124.11, to a nonpool plant,

subject to the following conditions:

(1) Of the quantity of producer milk received during the month

(including diversions, but excluding the quantity of producer milk

received from a handler described in § 1000.9(c)) the handler diverts

to nonpool plants not more than 80 percent during the months of
September through February, and not more than 99 percent during the

months of March through August;

(2) Two or more handlers described in § 1000.9(c) may have

their allowable diversions computed on the basis of their combined

deliveries of producer milk which they caused to be delivered to pool

plants or diverted during the month if each has filed a request in

writing with the market administrator before the first day of the

month the agreement is to be effective. The request shall specify

the basis for assigning overdiverted milk to the producer deliveries

of each according to a method approved by the market administrator. 

(3) Diverted milk shall be priced at the location of the plant

to which diverted;

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

paragraph (e)(1) of this section shall not be producer milk. If the

diverting handler or cooperative association fails to designate the

dairy farmers’ deliveries that are not to be producer milk, no milk

diverted by the handler or cooperative association during the month

to a nonpool plant shall be producer milk. In the event some of the

milk of any producer is determined not to be producer milk pursuant

to this paragraph, other milk delivered by such producer as producer

milk during the month will not be subject to § 1124.12(b)(5); and

(5) The applicable diversion limits in paragraph (e)(1) of

this section may be increased or decreased by the market

administrator if the market administrator finds that such revision is

necessary to assure orderly marketing and efficient handling of milk

in the marketing area. Before making such a finding, the market

administrator shall investigate the need for the revision either on

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

interested persons if the request is made at least 15 days prior to

the month for which the requested revision is desired effective. If

the investigation shows that a revision might be appropriate, the

market administrator shall issue a notice stating that the revision

is being considered and inviting written data, views, and arguments. 

Any decision to revise an applicable percentage must be issued in

writing at least one day before the effective date.

§ 1124.14 Other source milk.

See § 1000.14.

§ 1124.15 Fluid milk product.

See § 1000.15.

§ 1124.16 Fluid cream product.

See § 1000.16.

§ 1124.17 [Reserved]
§ 1124.18 Cooperative association.

See § 1000.18.

§ 1124.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1124.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 9th day

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

forms, as follows:

(a) Each handler that operates a pool plant pursuant to

§ 1124.7 shall report for each of its operations the following

information:

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

and pounds of solids-not-fat other than protein (other solids)

contained in or represented by:

(i) Receipts of producer milk, including producer milk

diverted by the reporting handler, from sources other than handlers

described in § 1000.9(c); and

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

(2) Product pounds and pounds of butterfat contained in:

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

products from other pool plants;

(ii) Receipts of other source milk; and

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

fluid milk products and bulk fluid cream products;

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

products required to be reported pursuant to this paragraph; and

(4) Such other information with respect to the receipts and

utilization of skim milk, butterfat, milk protein, and other nonfat

solids, as the market administrator may prescribe.

(b) Each handler operating a partially regulated distributing

plant shall report with respect to such plant in the same manner as

prescribed for reports required by paragraph (a) of this section. 

Receipts of milk that would have been producer milk if the plant had

been fully regulated shall be reported in lieu of producer milk. The

report shall show also the quantity of any reconstituted skim milk in

route disposition in the marketing area.

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

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

protein, and the pounds of solids-not-fat other than protein (other

solids) contained in receipts of milk from producers; and

(2) The utilization or disposition of such receipts.

(d) Each handler not specified in paragraphs (a) through (c)

of this section shall report with respect to its receipts and
utilization of milk and milk products in such manner as the market

administrator may prescribe.

§ 1124.31 Payroll reports.

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

handler that operates a pool plant pursuant to § 1124.7 and each

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

administrator its producer payroll for the month, in the detail

prescribed by the market administrator, showing for each producer the

information described in § 1124.73(f).

(b) Each handler operating a partially regulated distributing

plant who elects to make payment pursuant to § 1000.76(b) shall

report for each dairy farmer who would have been a producer if the

plant had been fully regulated in the same manner as prescribed for

reports required by paragraph (a) of this section.

§ 1124.32 Other reports.

In addition to the reports required pursuant to §§ 1124.30 and

1124.31, each handler shall report any information the market

administrator deems necessary to verify or establish each handler’s

obligation under the order.

CLASSIFICATION OF MILK

§ 1124.40 Classes of utilization.

See § 1000.40.

§ 1124.41 [Reserved]

§ 1124.42 Classification of transfers and diversions.

See § 1000.42.

§ 1124.43 General classification rules.

See § 1000.43.

§ 1124.44 Classification of producer milk.

In addition to the provisions provided in § 1000.44, for

purposes of this part 1124, § 1000.44(a)(3)(iv) applies to “fluid

milk products and bulk fluid cream products received or acquired for

distribution from a producer-handler.”

§ 1124.45 Market administrator’s reports and announcements

concerning classification.

See § 1000.45.

CLASS PRICES

§ 1124.50 Class prices, component prices, and advanced pricing

factors.
See § 1000.50.

§ 1124.51 Class I differential and price.

The Class I differential shall be the differential established

for King County, Washington, which is reported in § 1000.52. The

Class I price shall be the price computed pursuant to § 1000.50(a)

for King County, Washington.

§ 1124.52 Adjusted Class I differentials.

See § 1000.52.

§ 1124.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1124.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1124.60 Handler's value of milk.

For the purpose of computing a handler’s obligation for

producer milk, the market administrator shall determine for each

month the value of milk of each handler with respect to each of the

handler's pool plants and of each handler described in § 1000.9(c)

with respect to milk that was not received at a pool plant by adding

the amounts computed in paragraphs (a) through (h) of this section

and subtracting from that total amount the value computed in

paragraph (i) of this section. Unless otherwise specified, the skim

milk, butterfat, and the combined pounds of skim milk and butterfat

referred to in this section shall result from the steps set forth in

§ 1000.44(a), (b), and (c), respectively, and the nonfat components

of producer milk in each class shall be based upon the proportion of

such components in producer skim milk. Receipts of nonfluid milk

products that are distributed as labeled reconstituted milk for which

payments are made to the producer-settlement fund of another Federal

order under § 1000.76(a)(4) or (d) shall be excluded from pricing

under this section. 

(a) Class I value.

(1) Multiply the hundredweight of skim milk in Class I by the

Class I skim milk price; and

(2) Add an amount obtained by multiplying the pounds of

butterfat in Class I by the Class I butterfat price.

(b) Class II value.

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

by the Class II nonfat solids price; and

(2) Add an amount obtained by multiplying the pounds of

butterfat in Class II times the Class II butterfat price.
(c) Class III value.

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

the protein price;

(2) Add an amount obtained by multiplying the pounds of other

solids in Class III skim milk by the other solids price; and

(3) Add an amount obtained by multiplying the pounds of

butterfat in Class III by the butterfat price.

(d) Class IV value.

(1) Multiply the pounds of nonfat solids in Class IV skim milk

by the nonfat solids price; and

(2) Add an amount obtained by multiplying the pounds of

butterfat in Class IV by the butterfat price.

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

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

corresponding steps of § 1000.44(b) by the skim milk prices and

butterfat prices applicable to each class.

(f) Multiply the difference between the current month’s Class

I, II, or III price, as the case may be, and the Class IV price for

the preceding month by the hundredweight of skim milk and butterfat

subtracted from Class I, II, or III, respectively, pursuant to §

1000.44(a)(7) and the corresponding step of § 1000.44(b);

(g) Multiply the difference between the Class I price

applicable at the location of the pool plant and the Class IV price

by the hundredweight of skim milk and butterfat assigned to Class I

pursuant to § 1000.43(d) and the hundredweight of skim milk and

butterfat subtracted from Class I pursuant to § 1000.44(a)(3)(i)

through (vi) and the corresponding step of § 1000.44(b), excluding

receipts of bulk fluid cream products from plants regulated under

other Federal orders and bulk concentrated fluid milk products from

pool plants, plants regulated under other Federal orders, and

unregulated supply plants.

(h) Multiply the difference between the Class I price

applicable at the location of the nearest unregulated supply plants

from which an equivalent volume was received and the Class III price

by the pounds of skim milk and butterfat in receipts of concentrated

fluid milk products assigned to Class I pursuant to § 1000.43(d) and

§ 1000.44(a)(3)(i) and the corresponding step of § 1000.44(b) and the

pounds of skim milk and butterfat subtracted from Class I pursuant to

§ 1000.44(a)(8) and the corresponding step of § 1000.44(b), excluding

such skim milk and butterfat in receipts of fluid milk products from

an unregulated supply plant to the extent that an equivalent amount

of skim milk or butterfat disposed of to such plant by handlers fully

regulated under any Federal milk order is classified and priced as

Class I milk and is not used as an offset for any other payment

obligation under any order.

(i) For reconstituted milk made from receipts of nonfluid milk

products, multiply $1.00 (but not more than the difference between
the Class I price applicable at the location of the pool plant and

the Class IV price) by the hundredweight of skim milk and butterfat

contained in receipts of nonfluid milk products that are allocated to

Class I use pursuant to § 1000.43(d).

§ 1124.61 Computation of producer price differential.

For each month the market administrator shall compute a

producer price differential per hundredweight. The report of any

handler who has not made payments required pursuant to § 1124.71 for

the preceding month shall not be included in the computation of the

producer price differential, and such handler’s report shall not be

included in the computation for succeeding months until the handler

has made full payment of outstanding monthly obligations. Subject to

the conditions of this paragraph, the market administrator shall

compute the producer price differential in the following manner:

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

§ 1124.60 for all handlers required to file reports prescribed in

§ 1124.30;

(b) Subtract the total values obtained by multiplying each

handler's total pounds of protein, other solids, and butterfat

contained in the milk for which an obligation was computed pursuant

to § 1124.60 by the protein price, the other solids price, and the

butterfat price, respectively;

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

subtract an amount equal to the plus location adjustments computed

pursuant to § 1124.75;

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

unobligated balance in the producer-settlement fund;

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

for all handlers included in these computations:

(1) The total hundredweight of producer milk; and

(2) The total hundredweight for which a value is computed

pursuant to § 1124.60(h); and

(f) Subtract not less than 4 cents nor more than 5 cents from

the price computed pursuant to paragraph (e) of this section. The

result shall be known as the producer price differential for the

month.

§ 1124.62 Announcement of producer prices. 

On or before the 14th day after the end of each month, the

market administrator shall announce publicly the following prices and

information:

(a) The producer price differential;

(b) The protein price;

(c) The nonfat solids price;

(d) The other solids price;

(e) The butterfat price;
(f) The average butterfat, protein, nonfat solids, and other

solids content of producer milk; and

(g) The statistical uniform price for milk containing 3.5

percent butterfat, computed by combining the Class III price and the

producer price differential.

PAYMENTS FOR MILK

§ 1124.70 Producer-settlement fund.

See § 1000.70.

§ 1124.71 Payments to the producer-settlement fund.

Each handler shall make payment to the producer-settlement fund

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

administrator no later than the 16th day after the end of the month

(except as provided in § 1000.90). Payment shall be the amount, if

any, by which the amount specified in paragraph (a) of this section

exceeds the amount specified in paragraph (b) of this section:

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

determined pursuant to § 1124.60.

(b) The sum of:

(1) An amount obtained by multiplying the total hundredweight

of producer milk as determined pursuant to § 1000.44(c) by the

producer price differential as adjusted pursuant to § 1124.75;

(2) An amount obtained by multiplying the total pounds of

protein, other solids, and butterfat contained in producer milk by

the protein, other solids, and butterfat prices, respectively;

and

(3) An amount obtained by multiplying the pounds of skim milk

and butterfat for which a value was computed pursuant to § 1124.60(h)

by the producer price differential as adjusted pursuant to § 1124.75

for the location of the plant from which received. 

§ 1124.72 Payments from the producer-settlement fund.

No later than the 18th day after the end of each month (except

as provided in § 1000.90), the market administrator shall pay to each

handler the amount, if any, by which the amount computed pursuant to

§ 1124.71(b) exceeds the amount computed pursuant to § 1124.71(a). 

If, at such time, the balance in the 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.

§ 1124.73 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 18th day of the month, partial

payment shall be made so that it is received by each producer on or

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

for milk received during the first 15 days of the month from the

producer at not less than the lowest announced class price for the

preceding month, less proper deductions authorized in writing by the

producer.

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

payment shall be made so that it is received by each producer no

later than the 19th day after the end of the month (except as

provided in § 1000.90) in an amount equal to not less than the sum

of:

(i) The hundredweight of producer milk received times the

producer price differential for the month as adjusted pursuant to

§ 1124.75;

(ii) The pounds of butterfat received times the butterfat

price for the month;

(iii) The pounds of protein received times the protein price

for the month;

(iv) The pounds of other solids received times the other

solids price for the month;

(v) Less any payment made pursuant to paragraph (a)(1) of this

section;

(vi) Less proper deductions authorized in writing by such

producer and plus or minus adjustments for errors in previous

payments to such producer subject to approval by the market

administrator; and

(vii) Less deductions for marketing services pursuant to

§ 1000.86.

(b) Payments for milk received from cooperative association

members. On or before the 2nd day prior to the dates specified in

paragraphs (a)(1) and (a)(2) of this section (except as provided in §

1000.90), each handler shall pay to a cooperative association for

milk from producers who market their milk through the cooperative

association and who have authorized the cooperative to collect such

payments on their behalf an amount equal to the sum of the individual

payments otherwise payable for such producer milk pursuant to

paragraphs (a)(1) and (a)(2) of this section.

(c) Payment for milk received from cooperative association

pool plants or from cooperatives as handlers pursuant to § 1000.9(c). 

On or before the 2nd day prior to the dates specified in paragraphs

(a)(1) and (a)(2) of this section (except as provided in § 1000.90),

each handler who receives fluid milk products at its plant from a

cooperative association in its capacity as the operator of a pool

plant or who receives milk from a cooperative association in its

capacity as a handler pursuant to § 1000.9(c), including the milk of

producers who are not members of such association and who the market
administrator determines have authorized the cooperative association

to collect payment for their milk, shall pay the cooperative for such

milk as follows:

(1) For bulk fluid milk products and bulk fluid cream products

received from a cooperative association in its capacity as the

operator of a pool plant and for milk received from a cooperative

association in its capacity as a handler pursuant to § 1000.9(c)

during the first 15 days of the month, at not less than the lowest

announced class price per hundredweight for the preceding month.

(2) For the total quantity of bulk fluid milk products and

bulk fluid cream products received from a cooperative association in

its capacity as the operator of a pool plant, at not less than the

total value of such products received from the association's pool

plants, as determined by multiplying the respective quantities

assigned to each class under § 1000.44, as follows: 

(i) The hundredweight of Class I skim milk times the Class I

skim milk price for the month plus the pounds of Class I butterfat

times the Class I butterfat price for the month. The Class I prices

to be used shall be the prices effective at the location of the

receiving plant;

(ii) The pounds of nonfat solids in Class II skim milk by the

Class II nonfat solids price;

(iii) The pounds of butterfat in Class II times the Class II

butterfat price;

(iv) The pounds of nonfat solids in Class IV times the nonfat

solids price;

(v) The pounds of butterfat in Class III and Class IV milk

times the butterfat price;

(vi) The pounds of protein in Class III milk times the protein

price;

(vii) The pounds of other solids in Class III milk times the

other solids price; and

(viii) Add together the amounts computed in paragraphs

(c)(2)(i) through (vii) of this section and from that sum deduct any

payment made pursuant to paragraph (c)(1) of this section; and

(3) For the total quantity of milk received during the month

from a cooperative association in its capacity as a handler under

§ 1000.9(c) as follows:

(i) The hundredweight of producer milk received times the

producer price differential as adjusted pursuant to § 1124.75;

(ii) The pounds of butterfat received times the butterfat

price for the month;

(iii) The pounds of protein received times the protein price

for the month;

(iv) The pounds of other solids received times the other

solids price for the month; and

(v) Add together the amounts computed in paragraphs (c)(3)(i)
through (iv) of this section and from that sum deduct any payment

made pursuant to paragraph (c)(1) of this section.

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

administrator pursuant to § 1124.72 by the payment date specified in

paragraph (a), (b) or (c) of this section, the handler may reduce pro

rata its payments to producers or to the cooperative association

(with respect to receipts described in paragraph (b) of this section,

prorating the underpayment to the volume of milk received from the

cooperative association in proportion to the total milk received from

producers by the handler), but not by more than the amount of the

underpayment. The payments shall be completed on the next scheduled

payment date after receipt of the balance due from the market

administrator.

(e) If a handler claims that a required payment to a producer

cannot be made because the producer is deceased or cannot be located,

or because the cooperative association or its lawful successor or

assignee is no longer in existence, the payment shall be made to the

producer-settlement fund, and in the event that the handler

subsequently locates and pays the producer or a lawful claimant, or

in the event that the handler no longer exists and a lawful claim is

later established, the market administrator shall make the required

payment from the producer-settlement fund to the handler or to the

lawful claimant, as the case may be.

(f) In making payments to producers pursuant to this section,

each handler shall furnish each producer, except a producer whose

milk was received from a cooperative association handler described in

§ 1000.9(a) or (c), a supporting statement in a form that may be

retained by the recipient which shall show:

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

constituted regulatory agency, and payroll number of the producer;

(2) The daily and total pounds, and the month and dates such

milk was received from that producer;

(3) The total pounds of butterfat, protein, and other solids

contained in the producer's milk;

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

is required pursuant to 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, or rate per pound

of component, and the nature of each deduction claimed by the

handler; and

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

association.

§ 1124.74 [Reserved]

§ 1124.75 Plant location adjustments for producer milk and nonpool
milk.

For purposes of making payments for producer milk and nonpool

milk, a plant location adjustment shall be determined by subtracting

the Class I price specified in § 1124.51 from the Class I price at

the plant’s location. The difference, plus or minus as the case may

be, shall be used to adjust the payments required pursuant to §§

1124.73 and 1000.76. 

§ 1124.76 Payments by a handler operating a partially regulated 

distributing plant.

See § 1000.76.

§ 1124.77 Adjustment of accounts.

See § 1000.77.

§ 1124.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1124.85 Assessment for order administration.

See § 1000.85.

§ 1124.86 Deduction for marketing services.

See § 1000.86.