PART 1001--MILK IN THE NORTHEAST MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

SEC.

1001.1 General provisions.

DEFINITIONS 

1001.2 Northeast marketing area.

1001.3 Route disposition. 

1001.4 Plant. 

1001.5 Distributing plant. 

1001.6 Supply plant. 

1001.7 Pool plant. 

1001.8 Nonpool plant. 

1001.9 Handler. 

1001.10 Producer-handler.

1001.11 [Reserved] 

1001.12 Producer. 

1001.13 Producer milk. 

1001.14 Other source milk. 

1001.15 Fluid milk product. 

1001.16 Fluid cream product.

1001.17 [Reserved] 

1001.18 Cooperative association. 

1001.19 Commercial food processing establishment.

HANDLER REPORTS

1001.30 Reports of receipts and utilization. 

1001.31 Payroll reports. 

1001.32 Other reports. 

CLASSIFICATION OF MILK

1001.40 Classes of utilization.

1001.41 [Reserved] 

1001.42 Classification of transfers and diversions. 

1001.43 General classification rules. 

1001.44 Classification of producer milk. 

1001.45 Market administrator's reports and announcements

 concerning classification. 

CLASS PRICES 

1001.50 Class prices, component prices, and advanced pricing

 factors. 

1001.51 Class I differential and price. 

1001.52 Adjusted Class I differentials.

1001.53 Announcement of class prices, component prices, and 
 advanced pricing factors. 

1001.54 Equivalent price. 

PRODUCER PRICE DIFFERENTIAL 

1001.60 Handler's value of milk. 

1001.61 Computation of producer price differential.

1001.62 Announcement of producer prices. 

PAYMENTS FOR MILK 

1001.70 Producer-settlement fund.

1001.71 Payments to the producer-settlement fund.

1001.72 Payments from the producer-settlement fund.

1001.73 Payments to producers and to cooperative associations.

1001.74 [Reserved]

1001.75 Plant location adjustments for producer milk and nonpool 

 milk.

1001.76 Payments by a handler operating a partially regulated

 distributing plant. 

1001.77 Adjustment of accounts.

1001.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1001.85 Assessment for order administration. 

1001.86 Deduction for marketing services. 

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS 

§ 1001.1 General provisions.

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

chapter apply to this part 1001. In this part 1001, all references

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

DEFINITIONS

§ 1001.2 Northeast marketing area.

The marketing area means all the territory within the bounds of

the following states and political subdivisions, including all piers,

docks and wharves connected therewith and all craft moored thereat,

and all territory occupied by government (municipal, State or

Federal) reservations, installations, institutions, or other similar

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

or political subdivisions:

Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey,

Rhode Island, Vermont and District of Columbia

All of the States of Connecticut, Delaware, Massachusetts, New

Hampshire, New Jersey, Rhode Island, Vermont and the District of

Columbia.
Maryland Counties

All of the State of Maryland except the counties of Allegany

and Garrett.

New York Counties, Cities, and Townships

All counties within the State of New York except Allegany,

Cattaraugus, Chatauqua, Erie, Genessee, Livingston, Monroe, Niagara,

Ontario, Orleans, Seneca, Wayne, and Wyoming; the townships of

Conquest, Montezuma, Sterling and Victory in Cayuga County; the city

of Hornell, and the townships of Avoca, Bath, Bradford, Canisteo,

Cohocton, Dansville, Fremont, Pulteney, Hartsville, Hornellsville,

Howard, Prattsburg, Urbana, Wayland, Wayne and Wheeler in Steuben

County; and the townships of Italy, Middlesex, and Potter in Yates

County.

Pennsylvania Counties

Adams, Bucks, Chester, Cumberland, Dauphin, Delaware, Franklin,

Fulton, Juniata, Lancaster, Lebanon, Montgomery, Perry, Philadelphia,

and York.

Virginia Counties and Cities

Arlington, Fairfax, Loudoun, and Prince William, and the cities

of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park.

§ 1001.3 Route disposition.

See § 1000.3.

§ 1001.4 Plant.

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

means the land, buildings, facilities, and equipment constituting a

single operating unit or establishment at which milk or milk products

are received, processed, or packaged, including a facility described

in paragraph (b)(2) of this section if the facility receives the milk

of more than one dairy farmer.

(b) Plant shall not include:

(1) A separate building without stationary storage tanks that

is used only as a reload point for transferring bulk milk from one

tank truck to another or a separate building used only as a

distribution point for storing packaged fluid milk products in

transit for route disposition;

(2) An on-farm facility operated as part of a single dairy

farm entity for the separation of cream and skim milk or the removal

of water from milk; or

(3) Bulk reload points where milk is transferred from one tank

truck to another while en route from dairy farmers’ farms to a plant. 

If stationary storage tanks are used for transferring milk at the

premises, the operator of the facility shall make an advance written

request to the market administrator that the facility shall be

treated as a reload point. The cooling of milk, collection of

samples, and washing and sanitizing of tank trucks at the premises
shall not disqualify it as a bulk reload point.

§ 1001.5 Distributing plant.

See § 1000.5.

§ 1001.6 Supply plant.

See § 1000.6.

§ 1001.7 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 described in paragraph (h) of this section. The

pooling standards described in paragraphs (c) 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 fluid milk products are

transferred or diverted to plants described in paragraph (a) or (b)

of this section subject to the additional conditions described in

this paragraph. In the case of a supply plant operated by a

cooperative association handler described in § 1000.9(c), fluid milk

products that the cooperative delivers to pool plants directly from

producers’ farms shall be treated as if transferred from the

cooperative association’s plant for the purpose of meeting the

shipping requirements of this paragraph.

(1) During the months of August and December, such shipments

must equal not less than 10 percent of the total quantity of milk

that is received at the plant or diverted from it pursuant to

§ 1001.13 during the month;

(2) During the months of September through November, such

shipments must equal not less than 20 percent of the total quantity

of milk that is received at the plant or diverted from it pursuant to
§ 1001.13 during the month;

(3) A plant which meets the shipping requirements of this

paragraph during each of the months of August through December shall

be a pool plant during the following months of January through July

unless the milk received at the plant fails to meet the requirements

of a duly constituted regulatory agency, the plant fails to meet a

shipping requirement instituted pursuant to paragraph (f) of this

section, or the plant operator requests nonpool status for the plant. 

The shipping requirement for any plant which has not met the

requirements of paragraphs (c)(1) and (c)(2) of this section must

equal not less than 10 percent of the total quantity of milk that is

received at the plant or diverted from it pursuant to § 1001.13

during each of the months of January through July in order for the

plant to be a pool plant in each of those months; 

(4) If milk is delivered directly from producers’ farms that

are located outside of the states included in the marketing area or

outside Maine or West Virginia, such producers must be grouped by

state into reporting units and each reporting unit must independently

meet the shipping requirements of this paragraph; and

(5) 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

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

(d) [Reserved]

(e) Two or more plants that are located in the marketing area

and operated by the same handler may qualify as a unit by meeting the

total and in-area route distribution requirements specified in

paragraph (a) of this section subject to the following additional

requirements:

(1) At least one of the plants in the unit qualifies as a pool

plant pursuant to paragraph (a) of this section;

(2) Other plants in the unit must process only Class I or

Class II products and must be located in a pricing zone providing the

same or a lower Class I price than the price applicable at the

distributing plant included in the unit; and

(3) A written request to form a unit, or to add or remove

plants from a unit, or to cancel a unit, must be filed with the

market administrator prior to the first day of the month for which

unit formation is to be effective.

(f) Two or more supply plants operated by the same handler, or

by one or more cooperative associations, may qualify for pooling as a

system of plants by meeting 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) A supply plant system will be effective for the period of

August 1 through July 31 of the following year. Written notification

must be given to the market administrator listing the plants to be
included in the system prior to the first day of July preceding the

effective date of the system. The plants included in the system

shall be listed in the sequence in which they shall qualify for pool

plant status based on the minimum deliveries required. If the

deliveries made are insufficient to qualify the entire system for

pooling, the last listed plant shall be excluded from the system,

followed by the plant next-to-last on the list, and continuing in

this sequence until remaining listed plants have met the minimum

shipping requirements; and

(2) Each plant that qualifies as a pool plant within a system

shall continue each month as a plant in the system through the

following July unless the plant subsequently fails to qualify for

pooling, the handler submits a written notification to the market

administrator prior to the first day of the month that the plant be

deleted from the system, or that the system be discontinued. Any

plant that has been so deleted from the system, or that has failed to

qualify as a pool plant in any month, will not be part of the system

for the remaining months through July. For any system that qualifies

in August, no plant may be added in any subsequent month through the

following July unless the plant replaces another plant in the system

that has ceased operations and the market administrator is notified

of such replacement prior to the first day of the month for which it

is to be effective.

(g) The applicable shipping percentages of paragraphs (c) and

(f) 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 plant;

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

(3) A plant qualified pursuant to paragraph (a) of this

section that is located within the marketing area if the plant also

meets the pooling requirements of another Federal order and more than

50 percent of its route distribution has been in such other Federal

order marketing area for 3 consecutive months;
(4) A plant qualified pursuant to paragraph (a) of this

section which is not located within any Federal order marketing area

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 qualified pursuant to paragraph (a) of this

section that is located in another Federal order marketing area if

the plant 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 pool plant designated as a “nonpool

plant” that is physically separate and operated separately from the

pool portion of such plant. The designation of a portion of a

regulated plant as a nonpool plant must be requested in writing by

the handler and must be approved by the market administrator.

§ 1001.8 Nonpool plant.

See § 1000.8.

§ 1001.9 Handler.

See § 1000.9.

§ 1001.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from which

there is monthly route disposition in the marketing area during the

month;

(b) Receives milk solely from own farm production or receives

milk that is fully subject to the pricing and pooling provisions of

this or any other Federal order;

(c) Receives at its plant or acquires for route disposition no

more than 150,000 pounds of fluid milk products from handlers fully

regulated under any Federal order. This limitation shall not apply

if the producer-handler’s own farm production is less than 150,000

pounds during the month;

(d) Disposes of no other source milk as Class I milk except by

increasing the nonfat milk solids content of the fluid milk products;

and

(e) Provides proof satisfactory to the market administrator
that the care and management of the dairy animals and other resources

necessary to produce all Class I milk handled (excluding receipts

from handlers fully regulated under any Federal order) and the

processing and packaging operations are the producer-handler’s own

enterprise and at its own risk.

§ 1001.11 [Reserved]

§ 1001.12 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 § 1001.13; or

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

(b) Producer shall not include a dairy farmer described in

paragraphs (b)(1) through (6) of this section. A dairy farmer

described in paragraphs (b)(5) or (6) of this section shall be known

as a dairy farmer for other markets.

(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 §

1001.13(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;

(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;

(5) For any month of December through June, any dairy farmer

whose milk is received at a pool plant or by a cooperative

association handler described in § 1000.9(c) if the pool plant

operator or the cooperative association caused milk from the same

farm to be delivered to any plant as other than producer milk, as

defined under the order in this part or any other Federal milk order,

during the same month, either of the 2 preceding months, or during

any of the preceding months of July through November; and

(6) For any month of July through November, any dairy farmer

whose milk is received at a pool plant or by a cooperative

association handler described in § 1000.9(c) if the pool plant

operator or the cooperative association caused milk from the same

farm to be delivered to any plant as other than producer milk, as

defined under the order in this part or any other Federal milk order,
during the same month. 

§ 1001.13 Producer milk.

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

components of skim milk) and butterfat contained in milk of a

producer that is:

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

producer or from a handler described in § 1000.9(c). Any milk which

is picked up from the producer’s farm in a tank truck under the

control of the operator of a pool plant or a handler described in §

1000.9(c) but which is not received at a plant until the following

month shall be considered as having been received by the handler

during the month in which it is picked up at the farm. 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 the operator of a pool plant or a handler

described in § 1000.9(c) in excess of the quantity delivered to pool

plants subject to the following conditions:

(1) The producers whose farms are outside of the states

included in the marketing area and outside the states of Maine or

West Virginia shall be organized into state units and each such unit

shall be reported separately; and

(2) For pooling purposes, each reporting unit must satisfy the

shipping standards specified for a supply plant pursuant to

§ 1001.7(c); 

(c) Diverted by a proprietary 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 by a handler

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

unless milk of such dairy farmer was 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; and

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

to which diverted.

§ 1001.14 Other source milk.

See § 1000.14.

§ 1001.15 Fluid milk product.

See § 1000.15.
§ 1001.16 Fluid cream product.

See § 1000.16.

§ 1001.17 [Reserved] 

§ 1001.18 Cooperative association.

See § 1000.18.

§ 1001.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1001.30 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 prescribed forms, as

follows:

(a) Each pool plant operator shall report for each of its

operations the following information:

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

and pounds of nonfat solids 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 paragraph (a) or (b) 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.

§ 1001.31 Payroll reports.

(a) On or before the 22nd day after the end of each month,

each handler that operates a pool plant pursuant to § 1001.7 and each

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

administrator its producer payroll for the month, in detail

prescribed by the market administrator, showing for each producer the

information specified in § 1001.73(e).

(b) Each handler operating a partially regulated distributing

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

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

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

reports required by paragraph (a) of this section.

§ 1001.32 Other reports.

In addition to the reports required pursuant to §§ 1001.30 and

1001.31, 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

§ 1001.40 Classes of utilization.

See § 1000.40.

§ 1001.41 [Reserved]

§ 1001.42 Classification of transfers and diversions.

See § 1000.42.

§ 1001.43 General classification rules.

See § 1000.43.

§ 1001.44 Classification of producer milk.

See § 1000.44.

§ 1001.45 Market administrator’s reports and announcements

concerning classification. 

See § 1000.45.

CLASS PRICES

§ 1001.50 Class prices, component prices, and advanced pricing
factors.

See § 1000.50.

§ 1001.51 Class I differential and price.

The Class I differential shall be the differential established

for Suffolk County, Massachusetts, which is reported in § 1000.52. 

The Class I price shall be the price computed pursuant to §

1000.50(a) for Suffolk County, Massachusetts.

§ 1001.52 Adjusted Class I differentials.

See § 1000.52.

§ 1001.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1001.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1001.60 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 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) 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.

(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 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.

(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).

§ 1001.61 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 § 1001.71 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 in 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 §

1001.60 for all handlers required to file reports prescribed in §

1001.30;

(b) Subtract the total of the 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 § 1001.60 by the protein price, 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 § 1001.75;

(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 § 1001.60(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, rounded to the nearest cent, shall be known as the producer

price differential for the month.

§ 1001.62 Announcement of producer prices.

On or before the 13th day after the end of the month, the market

administrator shall announce 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

§ 1001.70 Producer-settlement fund.

See § 1000.70.

§ 1001.71 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 15th 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 § 1001.60.

(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 § 1001.75;

(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 § 1001.60(h)

by the producer price differential as adjusted pursuant to § 1001.75

for the location of the plant from which received. 

§ 1001.72 Payments from the producer-settlement fund.

No later than the 16th 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

§ 1001.71(b) exceeds the amount computed pursuant to § 1001.71(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.

§ 1001.73 Payments to producers and to cooperative associations.

(a) Each pool plant operator that is not paying a cooperative

association for producer milk shall pay each producer as follows:

(1) Partial payment. For each producer who has not

discontinued shipments as of the 23rd day of the month, payment shall
be made so that it is received by the producer on or before the 26th

day of the month (except as provided in § 1000.90) for milk received

during the first 15 days of the month at not less than 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 day after the payment date required in § 1001.72 in an

amount computed as follows:

(i) Multiply the hundredweight of producer milk received by

the producer price differential for the month as adjusted pursuant to

§ 1001.75;

(ii) Multiply the pounds of butterfat received by the

butterfat price for the month;

(iii) Multiply the pounds of protein received by the protein

price for the month;

(iv) Multiply the pounds of other solids received by the other

solids price for the month; and

(v) Add the amounts computed in paragraphs (a)(2)(i) through

(iv) of this section, and from that sum:

(A) Subtract the partial payment made pursuant to paragraph

(a)(1) of this section;

(B) Subtract the deduction for marketing services pursuant to

§ 1000.86;

(C) Add or subtract for errors made in previous payments to

the producer; and

(D) Subtract proper deductions authorized in writing by the

producer. 

(b) One day before partial and final payments are due pursuant

to paragraph (a) of this section, each pool plant operator shall pay

a cooperative association for milk received as follows:

(1) Partial payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk (including

the milk of producers who are not members of such association and who

the market administrator determines have authorized the cooperative

association to collect payment for their milk) received during the

first 15 days of the month from a cooperative association in any

capacity, except as the operator of a pool plant, the payment shall

be equal to the hundredweight of milk received multiplied by the

lowest announced class price for the preceding month.

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk milk/skimmed milk products

received during the first 15 days of the month from a cooperative

association in its capacity as the operator of a pool plant, the

partial payment shall be at the pool plant operator’s estimated use

value of the milk using the most recent class prices available at the

receiving plant’s location. 
(3) Final payment to a cooperative association for milk

transferred from its pool plant. Following the classification of

bulk fluid milk products and bulk fluid cream products received

during the month from a cooperative association in its capacity as

the operator of a pool plant, the final payment for such receipts

shall be determined as follows:

(i) Multiply the hundredweight of Class I skim milk by the

Class I skim milk price for the month at the receiving plant;

(ii) Multiply the pounds of Class I butterfat by the Class I

butterfat price for the month at the receiving plant;

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

milk by the Class II nonfat solids price;

(iv) Multiply the pounds of butterfat in Class II times the

Class II butterfat price;

(v) Multiply the pounds of nonfat solids in Class IV milk by

the nonfat solids price for the month;

(vi) Multiply the pounds of butterfat in Class III and IV milk

by the butterfat price for the month;

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

protein price for the month;

(viii) Multiply the pounds of other solids in Class III milk

by the other solids price for the month; and

(ix) Add together the amounts computed in paragraphs (b)(3)(i)

through (viii) of this section and from that sum deduct any payment

made pursuant to paragraph (b)(2) of this section. 

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received from

a cooperative association during the month, including the milk of

producers who are not members of such association and who the market

administrator determines have authorized the cooperative association

to collect payment for their milk, the final payment for such milk

shall be an amount equal to the sum of the individual payments

otherwise payable for such milk pursuant to paragraph (a)(2) of this

section. 

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

administrator pursuant to § 1001.72 by the payment date specified in

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

pursuant to paragraphs (a) and (b) of this section, but by not more

than the amount of the underpayment. The payments shall be completed

on the next scheduled payment date after receipt of the balance due

from the market administrator.

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

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

or because the cooperative association or its lawful successor or

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

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

subsequently locates and pays the producer or a lawful claimant, or
in the event that the handler no longer exists and a lawful claim is

later established, the market administrator shall make the required

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

lawful claimant as the case may be.

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

each pool plant operator shall furnish each producer, except a

producer whose milk was received from a cooperative association

handler described in § 1000.9(a) or (c), a supporting statement in

such form that it may be retained by the recipient which shall show:

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

constituted regulatory agency, and the payroll number of the

producer;

(2) The month and dates that milk was received from the

producer, including the daily and total pounds of milk received;

(3) The total pounds of butterfat, 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.

§ 1001.74 [Reserved]

§ 1001.75 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 § 1001.51 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 §§

1001.73 and 1000.76. 

§ 1001.76 Payments by a handler operating a partially regulated

 distributing plant.

See § 1000.76.

§ 1001.77 Adjustment of accounts.

See § 1000.77.

§ 1001.78 Charges on overdue accounts.

See § 1000.78.
ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1001.85 Assessment for order administration.

See § 1000.85.

§ 1001.86 Deduction for marketing services.

See § 1000.86.