DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1000, 1001, 1002, 1004, 1005, 1006, 1007, 1012, 1013,

1030, 1032, 1033, 1036, 1040, 1044, 1046, 1049, 1050, 1064, 1065,

1068, 1076, 1079, 1106, 1124, 1126, 1131, 1134, 1135, 1137, 1138 and

1139

DA-97-12

Milk in the New England and Other Marketing Areas; Order Amending the

Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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7 CFR Part Marketing Area

_________________________________________________________________ 

1000 General Provisions of Federal Milk 

Marketing Orders

1001 New England

1002 New York-New Jersey

1004 Middle Atlantic

1005 Carolina

1006 Upper Florida 

1007 Southeast

1012 Tampa Bay

1013 Southeastern Florida

1030 Chicago Regional

1032 Southern Illinois-Eastern Missouri

1033 Ohio Valley

1036 Eastern Ohio-Western Pennsylvania

1040 Southern Michigan

1044 Michigan Upper Peninsula

1046 Louisville-Lexington-Evansville

1049 Indiana

1050 Central Illinois

1064 Greater Kansas City

1065 Nebraska-Western Iowa

1068 Upper Midwest

1076 Eastern South Dakota

1079 Iowa

1106 Southwest Plains
1124 Pacific Northwest

1126 Texas

1131 Central Arizona

1134 Western Colorado

1135 Southwestern Idaho-Eastern Oregon

1137 Eastern Colorado

1138 New Mexico-West Texas 

1139 Great Basin

________________________________________________________________

SUMMARY: This final rule consolidates the current 31 Federal milk

marketing orders into 11 orders. This consolidation complies with

the 1996 Farm Bill which mandates that the current Federal milk

orders be consolidated into between 10 to 14 orders. This final rule

will be effective for milk marketed on or after October 1, 1999,

thereby conforming to the Omnibus Consolidated and Emergency

Supplemental Appropriations Bill, which required that the Federal

milk order reform amendments be implemented on October 1, 1999. This

rule sets forth a replacement for the Class I price structure and

replaces the basic formula price with a multiple component pricing

system. This rule also establishes a new Class IV which includes

milk used to produce nonfat dry milk, butter, and other dry milk

powders; reclassifies eggnog; and addresses other minor changes. 

Part 1000 is expanded to include sections that are identical in all

of the consolidated orders to assist in simplifying and streamlining

the orders. 

EFFECTIVE DATE: October 1, 1999.

FOR FURTHER INFORMATION CONTACT: John F. Borovies, Branch Chief,

USDA/AMS/Dairy Programs, Order Formulation Branch, Room 2971, South

Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 720-6274,

e-mail address John.Borovies@usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12988

The contents of this final rule were reviewed under Executive

Order 12988, Civil Justice Reform. This rule is not intended to have

a retroactive effect and will not preempt any state or local laws,

regulations, or policies, unless they present an irreconcilable

conflict with the rule.

The Agricultural Marketing Agreement Act of 1937 (AMAA), as

amended, provides that administrative proceedings must be exhausted

before parties may file suit in court. Under section 608c(15)(A) of

the Act, any handler subject to an order may request modification or

exemption from such order by filing with the Secretary a petition
stating that the order, any provision of the order, or any obligation

imposed in connection with the order is not in accordance with law. 

A handler is afforded the opportunity for a hearing on the petition. 

After a hearing, the Secretary would rule on the petition. The Act

provides that the district court of the United States in any district

in which the handler is an inhabitant, or has its principal place of

business, has jurisdiction in equity to review the Secretary's ruling

on the petition, provided a bill in equity is filed not later than 20

days after the date of the entry of the ruling.

Executive Order 12866

The Department is issuing this final rule in conformance with

Executive Order 12866. The final rule is determined to be

economically significant for the purposes of Executive Order 12866. 

To comply with the requirements of Executive Order 12866, the

Department prepared a final Regulatory Impact Analysis (RIA). 

Information contained in the RIA pertains to the costs and benefits

of the revised regulatory structure contained in this final rule and

is explained and summarized in detail in the final decision (64 FR

16030). Copies of the RIA can be obtained from Dairy Programs

at (202) 720-4392, any Market Administrator office, or via the

Internet at http://www.ams.usda.gov/dairy. 

Civil Rights Impact Analysis 

Pursuant to Departmental Regulation (DR) 4300-4, a Civil Rights

Impact Analysis (CRIA) was completed that reviewed the reforms to the

Federal milk marketing order program implemented by this final rule

to identify any provisions with actual or potential adverse effects

for minorities, women, and persons with disabilities. The analysis

disclosed no potential for affecting dairy farmers with specific

characteristics differently than the general population of dairy

farmers. All producers, regardless of race, national origin, or

disability choosing to deliver milk to a Federal order regulated

handler will receive the minimum blend price. 

Copies of the Civil Rights Impact Analysis can be obtained from

Dairy Programs at (202) 720-4392; any Market Administrator office; or

via the Internet at http://www.ams.usda.gov/dairy/.

Small Business Consideration

Pursuant to the requirements set forth in the Regulatory

Flexibility Act (5 U.S.C. 601 et seq.), the Agricultural Marketing

Service (AMS) considered the economic impact of the reforms to the

Federal milk marketing order program implemented by this final rule

on small entities and prepared a final regulatory flexibility

analysis that was included in the final decision (64 FR 16034). The

analysis indicates that the Department minimized the significant

economic impacts of the regulations on small entities to the fullest
extent reasonably possible while adhering to the stated objectives. 

The Department reviewed the regulatory and financial burdens

resulting from the regulations and determined, to the fullest extent

possible, the impact on small businesses’ abilities to compete in the

market place. The Department reviewed the regulations from both the

small producer and small processor perspectives attempting to

maintain a balance between these competing interests.

Copies of the final regulatory impact analysis can be obtained

from Dairy Programs at (202) 720-4392; any Market Administrator

office; or via the Internet at http://www.ams.usda.gov/dairy/.

Paperwork Reduction Act of 1995

The information collection requirements contained in this final

rule previously were approved by the Office of Management and Budget

(OMB) pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C.

chapter 35) under OMB control number 0581-0032, through September 30,

2001.

Prior documents in this proceeding:

Proposed Rule: Issued January 21, 1998; published January 30,

1998 (63 FR 4802).

Correction: Issued February 19, 1998; published February 25,

1998 (63 FR 9686).

Extension of Time: Issued March 10, 1998; published March

13,1998 (63 FR 12417).

Final Decision on Proposed Amendments: Issued March 12, 1999;

published April 2, 1999 (64 FR 16026).

Correction: Issued July 8, 1999; published July 14, 1999 (64

FR 37892).

Notice of Referenda: Issued July 14, 1999; published July 21,

1999 (64 FR 39092).

Findings and Determinations

The findings and determinations hereinafter set forth

supplement those that were made when the aforesaid orders were first

issued and when they were amended. The previous findings and

determinations are hereby ratified and confirmed, except where they

may conflict with those set forth herein.

The following findings are hereby made with respect to the 

each of the aforesaid orders:

Upon the basis of the record of this proceeding it is found

that:

(1) The said orders, as hereby amended, and all of the terms

and conditions thereof, will tend to effectuate the declared policy

of the Act;

(2) The parity prices of milk, as determined pursuant to

section 2 of the Act, are not reasonable in view of the price of
feeds, available supplies of feeds, and other economic conditions

which affect market supply and demand for milk in the marketing

areas, and the minimum prices specified in the orders, as hereby

amended, are such prices as will reflect the aforesaid factors,

insure a sufficient quantity of pure and wholesome milk, and be in

the public interest;

(3) The said orders, as hereby amended, regulate the handling

of milk in the same manner as, and are applicable only to persons in

the respective classes of industrial and commercial activity

specified in, marketing agreements;

(4) All milk and milk products handled by handlers, as defined

in the orders as hereby amended, are in the current of interstate

commerce or directly burden, obstruct, or affect interstate commerce

in milk or its products; and

(5) It is hereby found that the necessary expense of the

market administrators for the maintenance and functioning of such

agency will require the payment by each handler, as his pro rata

share of such expense, 5 cents per hundredweight or such lesser

amount as the Secretary may prescribe, with respect to milk specified

in § 1000.85 of the General Provisions.

(b) Additional Findings. It is necessary in the public

interest to make these amendments to each of the orders effective for

milk marketed on or after October 1, 1999. Any delay beyond that

date would tend to disrupt the orderly marketing of milk in the

specified marketing areas.

The amendments to these orders are known to handlers. The

final decision containing the proposed amendments to these orders was

issued on March 12, 1999.

(c) Determinations. It is hereby determined that:

(1) The refusal or failure of handlers (excluding cooperative

associations specified in Sec. 8c(9) of the Act) of more than 50

percent of the milk, which is marketed within the specified marketing

areas, to sign proposed marketing agreements, tends to prevent the

effectuation of the declared policy of the Act;

(2) The issuance of this order amending each of the specified

orders is the only practical means pursuant to the declared policy of

the Act of advancing the interests of producers as defined in the

respective orders as hereby amended; and

(3) The issuance of the order amending the specified orders is

favored by at least two-thirds of the producers who were engaged in

the production of milk for sale in the marketing areas.

List of Subjects in 7 CFR Parts 1000, 1001, 1002, 1004, 1005, 1006,

1007, 1012, 1013, 1030, 1032, 1033, 1036, 1040, 1044, 1046, 1049,

1050, 1064, 1065, 1068, 1076, 1079, 1106, 1124, 1126, 1131, 1134,

1135, 1137, 1138 and 1139
Milk marketing orders.

Order Relative to Handling

It is therefore ordered, that on and after the effective date

hereof, the handling of milk in each of the aforesaid marketing areas

shall be in conformity to and in compliance with the terms and

conditions of the orders, as amended, and as hereby further amended,

as follows:

For the reasons set forth in the preamble and under the

authority of Title 7, chapter X, Parts 1000, 1001, 1005, 1006, 1007,

1030, 1032, 1033, 1124, 1126, 1131, and 1135 are revised and Parts

1002, 1004, 1012, 1013, 1036, 1040, 1044, 1046, 1049, 1050, 1064,

1065, 1068, 1076, 1079, 1106, 1134, 1137, 1138 and 1139 are removed

and reserved as follows: