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.

PRODUCER PRICE DIFFERENTIAL

1032.60 Handler's value of milk.

1032.61 Computation of producer price differential.

1032.62 Announcement of producer prices.

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, and 7253.

Subpart - Order Regulating Handling

GENERAL PROVISIONS

§ 1032.1 General provisions.

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

chapter apply to this part 1032. 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, Fremont, 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, 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.

§ 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

§ ----.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 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 (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 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

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 the order in this part, 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 the order

in this part 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 producer-handler’s own

enterprise and at its own risk.

§ 1032.11 [Reserved]

§ 1032.12 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 § 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 the order in this part

(except as a result of a temporary loss of Grade A approval), the

dairy farmer’s milk shall not be eligible for 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

§ 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

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.
§ 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

(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 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 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

§ 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 minus location adjustments and

subtract an amount equal to the plus 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;

(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 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.

§ 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.

(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

(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:

(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 the order in this part;

(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.