PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

Sec.

1126.1 General provisions.

DEFINITIONS

1126.2 Southwest marketing area.

1126.3 Route disposition.

1126.4 Plant.

1126.5 Distributing plant.

1126.6 Supply plant.

1126.7 Pool plant.

1126.8 Nonpool plant.

1126.9 Handler.

1126.10 Producer-handler.

1126.11 [Reserved]

1126.12 Producer.

1126.13 Producer milk.

1126.14 Other source milk.

1126.15 Fluid milk product.

1126.16 Fluid cream product.

1126.17 [Reserved]

1126.18 Cooperative association.

1126.19 Commercial food processing establishment.

HANDLER REPORTS

1126.30 Reports of receipts and utilization.

1126.31 Payroll reports.

1126.32 Other reports.

CLASSIFICATION OF MILK

1126.40 Classes of utilization.

1126.41 [Reserved]

1126.42 Classification of transfers and diversions.

1126.43 General classification rules. 

1126.44 Classification of producer milk.

1126.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES

1126.50 Class prices, component prices, and advanced pricing

 factors.

1126.51 Class I differential and price.

1126.52 Adjusted Class I differentials.

1126.53 Announcement of class prices, component prices, and
 advanced pricing factors.

1126.54 Equivalent price.

PRODUCER PRICE DIFFERENTIAL

1126.60 Handler's value of milk.

1126.61 Computation of producer price differential.

1126.62 Announcement of producer prices.

PAYMENTS FOR MILK

1126.70 Producer-settlement fund.

1126.71 Payments to the producer-settlement fund.

1126.72 Payments from the producer-settlement fund.

1126.73 Payments to producers and to cooperative associations.

1126.74 [Reserved]

1126.75 Plant location adjustments for producer milk and 

 nonpool milk.

1126.76 Payments by a handler operating a partially regulated

 distributing plant.

1126.77 Adjustment of accounts.

1126.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1126.85 Assessment for order administration.

1126.86 Deduction for marketing services.

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS

§ 1126.1 General provisions.

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

chapter apply to this part 1126. In this part 1126, all references

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

DEFINITIONS

§ 1126.2 Southwest 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

Archuleta, LaPlata, and Montezuma.

New Mexico and Texas

All of the States of New Mexico and Texas.
§ 1126.3 Route disposition.

See § 1000.3.

§ 1126.4 Plant.

See § 1000.4.

§ 1126.5 Distributing plant.

See § 1000.5.

§ 1126.6 Supply plant.

See § 1000.6.

§ 1126.7 Pool plant.

Pool plant means a plant specified in paragraphs (a) through

(d) of this section, or a unit of plants as specified in paragraph

(e) of this section, but excluding a plant specified in paragraph (g)

of this section. The pooling standards described in paragraphs (c)

and (d) of this section are subject to modification pursuant to

paragraph (f) of this section:

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

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

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

month 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 50 percent or more of the total

quantity of milk that is physically received during the month from

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

that is diverted as producer milk to other plants, is transferred to

pool distributing plants. Concentrated milk transferred from the

supply plant to a distributing plant for an agreed-upon use other

than Class I shall be excluded from the supply plant’s shipments in

computing the plant’s shipping percentage. 

(d) A plant located within the marketing area that is operated

by a cooperative association if pool plant status under this

paragraph is requested for such plant by the cooperative association

and during the month at least 30 percent of the producer milk of
members of such cooperative association is delivered directly from

farms to pool distributing plants or is transferred to such plants as

a fluid milk product (excluding concentrated milk transferred to a

distributing plant for an agreed-upon use other than Class I) from

the cooperative's plant.

(e) Two or more plants operated by the same handler and

located within the marketing area may qualify for pool status as a

unit by meeting the total and in-area route disposition requirements

specified in paragraph (a) of this section and the following

additional requirements:

(1) At least one of the plants in the unit must qualify as a

pool plant pursuant to paragraph (a) of this section;

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

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

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

distributing plant included in the unit pursuant to paragraph (e)(1)

of this section; and

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

plants from a unit, must be filed with the market administrator prior

to the first day of the month for which it is to be effective.

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

(d) of this section may be increased or decreased by the market

administrator if the market administrator finds that such adjustment

is necessary to encourage needed shipments or to prevent uneconomic

shipments. Before making such a finding, the market administrator

shall investigate the need for adjustment either on the market

administrator’s own initiative or at the request of interested

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

the 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.

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

plants:

(1) A producer-handler plant;

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

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

section 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) or (d) 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.

§ 1126.8 Nonpool plant.

See § 1000.8.

§ 1126.9 Handler.

See § 1000.9.

§ 1126.10 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 products from own farm production or

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

this or another Federal order;

(c) Receives no more than 150,000 pounds of fluid milk

products from handlers fully regulated under any Federal order,

including such products received at a location other than the

producer-handler’s processing plant for distribution on routes. 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.

§ 1126.11 [Reserved]

§ 1126.12 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 § 1126.13; 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 §

1126.13(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 the 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.

§ 1126.13 Producer milk.

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

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

contained in milk of a producer that is:

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

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

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

plant where it is first physically received;

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

of the quantity delivered to pool plants;

(c) Diverted by a pool plant operator for the account of the

handler operating such plant to another pool plant. Milk so diverted

shall be priced at the location of the plant to which diverted; or

(d) Diverted by the operator of a pool plant or a handler

described in § 1000.9(c) to a nonpool plant, subject to the following

conditions:

(1) Milk of a dairy farmer shall not be eligible for diversion

unless a delivery of at least 40,000 pounds or one day’s milk

production, whichever is less, 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;

(2) The total quantity of milk diverted during the month by a

cooperative association shall not exceed 50 percent of the total

quantity of producer milk that the cooperative association caused to

be received at pool plants and diverted;

(3) The operator of a pool plant that is not a cooperative

association may divert any milk that is not under the control of a

cooperative association that diverts milk during the month pursuant

to this paragraph. The total quantity of milk so diverted during the

month shall not exceed 50 percent of the total quantity of the

producer milk physically received at such plant (or such unit of

plants in the case of plants that pool as a unit pursuant to

§ 1126.7(e)) and diverted;

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

paragraphs (d)(2) and (3) of this section shall not be producer milk. 

If the diverting handler or cooperative association fails to

designate the dairy farmers’ deliveries that will not be producer

milk, no milk diverted by the handler or cooperative association

shall be producer milk;

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

to which diverted; and

(6) The delivery requirement in paragraph (d)(1) and the

diversion percentages in paragraphs (d)(2) and (3) of this section

may be increased or decreased by the market administrator if there is

a finding 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 the 

delivery day requirement or any diversion percentage must be issued

in writing at least one day before the effective date.

§ 1126.14 Other source milk.

See § 1000.14.

§ 1126.15 Fluid milk product.

See § 1000.15.

§ 1126.16 Fluid cream product.

See § 1000.16.
§ 1126.17 [Reserved]

§ 1126.18 Cooperative association.

See § 1000.18.

§ 1126.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1126.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 8th 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,

pounds of nonfat solids 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.

§ 1126.31 Payroll reports.

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

handler that operates a pool plant pursuant to § 1126.7 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 specified in § 1126.73(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.

§ 1126.32 Other reports.

In addition to the reports required pursuant to §§ 1126.30 and

1126.31, 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

§ 1126.40 Classes of utilization.

See § 1000.40.

§ 1126.41 [Reserved]

§ 1126.42 Classification of transfers and diversions.

See § 1000.42.

§ 1126.43 General classification rules.

See § 1000.43.

§ 1126.44 Classification of producer milk.

See § 1000.44.

§ 1126.45 Market administrator’s reports and announcements

concerning classification.

See § 1000.45.

CLASS PRICES

§ 1126.50 Class prices, component prices, and advanced pricing
factors.

See § 1000.50.

§ 1126.51 Class I differential and price.

The Class I differential shall be the differential established

for Dallas County, Texas, which is reported in § 1000.52. The Class

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

Dallas County, Texas.

§ 1126.52 Adjusted Class I differentials.

See § 1000.52.

§ 1126.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1126.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1126.60 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

§ 1126.30(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 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.

(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).

§ 1126.61 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 § 1126.71 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 §

1126.60 for all handlers required to file reports prescribed in §

1126.30;

(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 § 1126.60 by the protein price, other solids price, and the

butterfat price, respectively, and the total value of the somatic

cell adjustment pursuant to § 1126.30(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 § 1126.75;

(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 § 1126.60(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.

§ 1126.62 Announcement of producer prices.

On or before the 13th day after the end of each 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 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

§ 1126.70 Producer-settlement fund.

See § 1000.70.

§ 1126.71 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 § 1126.60.

(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 § 1126.75;

(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 § 1126.60(i)

by the producer price differential as adjusted pursuant to § 1126.75

for the location of the plant from which received. 

§ 1126.72 Payments from the producer-settlement fund.

No later than the 17th 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

§ 1126.71(b) exceeds the amount computed pursuant to § 1126.71(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.

§ 1126.73 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 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 18th day after the end of the month (except as

provided in § 1000.90) in an amount computed as follows:

(i) Multiply the hundredweight of producer milk received times

the producer price differential for the month as adjusted pursuant to

§ 1126.75;

(ii) Multiply the pounds of butterfat received times the

butterfat price for the month;

(iii) Multiply the pounds of protein received times the

protein price for the month;

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

other solids price for the month;

(v) Multiply the hundredweight of milk received times the

somatic cell adjustment for the month;

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

(v) 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 subject to approval by the market administrator; and

(D) Subtract proper deductions authorized in writing by the

producer.

(b) On or before the day prior to the dates specified for

partial and final payments pursuant to paragraph (a) of this section

(except as provided in § 1000.90), 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) 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 (b)(3)(i)

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

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 § 1126.72 by the payment date specified in

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

its payments to producers or to cooperative associations 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 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 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 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.

§ 1126.74 [Reserved]

§ 1126.75 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 § 1126.51 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 §§

1126.73 and 1000.76. 

 § 1126.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1126.77 Adjustment of accounts.

See § 1000.77.

§ 1126.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1126.85 Assessment for order administration.

See § 1000.85.

§ 1126.86 Deduction for marketing services.

See § 1000.86.