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______________________________________________________

BEFORE THE UNITED STATE DEPARTMENT

OF AGRICULTURE

AGRICULTURAL MARKETING SERVICE

IN RE: ) 7 CFR Parts 1005,

) 1006, and 1007

Milk in the Appalachian, )

Southeast, and Florida ) Docket No. 23-J-0019

Marketing Areas )

) AMS-DA-23-0003

RULEMAKING HEARING BEFORE

CHIEF PRESIDING ADMINISTRATIVE LAW JUDGE

CHANNING D. STROTHER, JUDGE

MARCH 2, 2023

Volume 6 of 6 Volumes

LISA FINCH, LCR #539

STONE & GEORGE COURT REPORTING

2020 Fieldstone Parkway

Ste. 900-PMB 234

Franklin, TN 37069

(615)268-1244
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APPEARANCES:

For the Dairy Corporation Marketing Association:

JOHNSON, DUFFIE, STEWART & WEIDNER

Marvin, Beshore, Esq.

Attorney at Law

301 Market Street

P.O. Box

Lemoyne, Pennsylvania 170453

For Select Milk Producers:

MILTNER REED, LLC

Ryan Miltner, Esq.

Attorney at Law

2-1 East Auglaize Street, Ste. 1

Wapakoneta, OH 54895

For the USDA - AMS - Dairy Program:

OFFICE OF THE GENERAL COUNSEL

MARKETING, REGULATORY & FOOD SAFETY

Brian Hill, Esq.

Senior Counsel, USDA

Michelle McMurtray, Esq.

Attorney Advisor, USDA

Lauren Becker, Esq.

Dairy Marketing Specialist

Erin Taylor, Director

Order Formulation & Enforcement Division

Rebecca Dickerson

Dairy Marketing Specialist

1400 Independence Avenue Southwest

Washington D.C. 20250

Also Present:

Dennis Tonak, Esq.

Prairie Farms

* *Reporter's Note: All names are spelled phonetically

unless otherwise provided to the Reporter by the

parties.
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576

(Whereupon, Volume 6 begins).

THE COURT: Okay, everybody. Let's go ahead

swear this witness first.

Whereupon,

MICHAEL SUMNERS,

having been first duly sworn, was

examined and testified as follows:

THE COURT: Your witness.

DIRECT EXAMINATION

BY MR. MILTNER:

Q. Thank you. For the record, my name is Ryan

Miltner, M-I-L-T-N-E-R. I represent the Select Milk

Producer, the cooperatives that's a member of DCMA.

Mr. Sumners is here on the stand, I'm not his Counsel,

but I'm going to kind of be his, I would say

Coordinator, I guess, we're going to try and steer the

questions here because he does not have a prepared

statement or anything else, but. So Mike, if you want

to give your name for the record, spell it, and let

folks know generally where you're located and such.

A. Michael Sumners, M-I-C-H-A-E-L, S-U-M-N-E-R-S,

Paris, Tennessee.

Q. How far is Paris from where we are here in

Nashville?
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577

A. Time-wise about two hours and 15 minutes, miles

125.

Q. And you have a dairy farm there?

A. Yes.

Q. It's Trihope Dairy, correct?

A. Correct.

Q. How long have you been a dairy producer?

A. I grew up on a dairy farm, went to college and

started dairying in 1981 in this county.

Q. You started here in Franklin?

A. Yea. I went to work for someone, later became

partners, worked with him for 20 years. And in 2001, I

moved to Paris and bought a farm and been there ever

since.

Q. And how many cows do you milk at your farm?

A. Right now I have a totals of about 860, we're

milking around 800 right now.

Q. Now we met the first time, longer ago than I want

to admit, but probably close to 20 years ago, and at

that time I think you were an independent producer,

correct?

A. Correct.

Q. Have you usually been an independent dairy

farmer?

A. When I started, I was with the Co-op for about 10
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578

years, and then in Franklin I started shipping milk to

farmers in Alabama for about four years, then I

switched, my milk went to Kroger as independent until

2001. In 2001, I started shipping milk to Old Dean's

that became New Dean's, then it became Morning Star,

then Saputo in 2016 I shipped milk to DFA until January

1 of 2023.

Q. For those years you were shipping to Dean's, New

Dean's, Morning Star and Saputo, which is all the same

plant, right, they've changed ownership?

A. Yes.

Q. For all those years up until you mentioned DFA,

you were not a member of a cooperative, correct?

A. Correct.

Q. In 2016, did you become a member of DFA at that

point?

A. Yes.

Q. Okay. And then today, are you still a member of

DFA?

A. No.

Q. Are you independent?

A. No.

Q. So what -- who markets your milk now?

A. It's a new Co-op, and it's mentored by Jacoby.

Q. So Jacoby is the managing entity of the Co-op,
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579

they do the payroll and services and the like?

A. Correct.

Q. Were you one of the folks that started this

Co-op?

A. Yes.

Q. And why, why did you and these other producers

choose to start a new cooperative?

A. Because Saputo is 27 miles from the farm and we

was able to make a deal with Saputo to get better milk

price, and Saputo Plant is not a pool distributing

plant, it's a partially regulated plant, so my milk is

not even pooled.

Q. So you and these local farmers thought you'd be

able to get a better price under your own Co-op than

whatever your previous marketing arrangements were?

A. Correct.

Q. Have you -- is this the first Federal Order

hearing you've attended?

A. No.

Q. How many hearings like this do you think you've

been to since you've been a producer?

A. Probably in my lifetime, I've probably been to 10

or more?

Q. Have you -- in those other hearings, have you

been a witness or offered a proposal at any of those
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hearings before?

A. Yes.

Q. You're a little bit familiar with the process,

you've been here this whole week, correct?

A. Yes.

Q. So, you submitted a proposal and I'll let you

decide how you want to do this; do you want to talk

about your proposal now or would you like to talk about

your reactions to the other proposals we've had

testimony about this week?

A. Well my proposal, most of it, I was told wasn't

authorized by I guess the law, government's, Federal

Orders that they couldn't do what I was asking to do,

but part of that was diversions and then they let that

in there. So diversions in my mind and the southeast

where you have a deficit market, it's another revenue

source to move milk, just like tea credits. It's

usually, of course there's some diversions used locally

during holiday, for some reason, the plant shut down.

You'll always have diversions, but in my view,

diversions ought to be with individual handlers, and if

those diversions couldn't be pooled with other handlers,

they would limit those diversions as much as possible.

Q. Most of the folks in this room have some

familiarity with what diversions are and those sorts of
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581

things and this is going to end up in a stack of paper

read by some folks that might not always be as familiar

as we are, so when you talk about a diversion in that

context, what are you referring to in your mind?

A. Well, diversions are milk that is associated with

the market, but not necessarily needed at a pool

distributing plant that day. But I'm not sure that my

personal milk has ever been diverted, it's always gone

to pool distributing plants, and when that milk gets

delivered, that handler that's marketing the milk, they

have diversions that other milk that they can move to a

plant, could be a non-pool plant, and they can collect

utilization at the Class I value at that plant.

Q. Your milk, you say as the regulations would say,

has physically received at that plant, correct?

A. Correct.

Q. And when you say a diversion, you're talking

about milk that might be associated with that plant, but

isn't necessarily received there?

A. Or associated with a handler. They actually, one

handler can transfer diversions to other handlers. Well

they have to do it correctly on paper, but basically

that's what happens.

Q. So put aside for a second what you might have

been told about your proposal and whether it was
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582

authorized by statute or authorized and permissible; I

want to ask you what are the changes that you think

should be made to Order 7 to help producers like you?

A. I think we need to be more transparent of what

the value of the milk plant is. We know what Federal

Orders are, we have no idea what the milk plant is

paying for milk.

Q. And so how would you propose that that

transparency be achieved?

A. Easiest way is when the plant gets audited, that

number gets publicized, and say that was done. You

could do it on, I guess, a market-wide number, you can't

do it on individual plant I don't think.

Q. So in addition to say the regulated price, the

Class I price, what do you -- what do you think would be

included in that overall milk plant cost that you, as a

producer, you would like to see?

A. Well, there's usually over-order premiums at

those plants, I'd like to know what the over-order

premium is. And farmers, if they're going to negotiate

for the value of their milk, I don't have to have the

best price, but I'd like to have the fair price, you

come to fair price in negotiations, but if you don't

know what the prices are, you don't know whether you'll

have an efficiently run Co-op or not. I know I've seen
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583

with DFA from 2016, I've seen a lot of inefficiencies.

Before I switched to this new plant, I had two drivers,

two trucks, two trailers getting my milk from market.

Now I've got a part-time driver, a truck to trailer,

delivering milk the same day. DFA, they wanted me to

fund a hauler, they wanted to haul milk at his

convenience, it's not as efficient is what I'd like to

see it hauled.

Q. Do those inefficiencies, do you hit your bottom

line on the front?

A. Well, if I'm paying for the freight, yes.

Q. Let me, that's a good point. You talk about the

freight, and specifically the haulers, we heard a lot

about the T-credit programs and different variations on

that, how to get additional milk in to supply these

markets, as a producer's who's been in Tennessee farming

milking cows for 40 years, what, what problem do you see

that you think the Department should hear about from a

producer in the area and then I would say, based on what

you've heard from the other testimony, do you have

thoughts on whether any of the other proposals would

help solve the problems that you know others said

particular --

A. T-credits were started in '96 and it was supposed

to be for supplemental milk, but now T-credits are used
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584

to supply the market. And you collect the money to haul

milk, if you haul milk, it's not full cost to haul the

milk, so where does the rest of the money come from? It

usually comes from the local producer who takes less,

you keep getting less local milk, you have to keep

hauling more milk and you need more money to haul more

milk. Other areas in the country where they get large

volumes of milk, they build them a milk plant. Here we

have milk plants and we keep losing our milk supply

around the milk plant. So I don't know why it doesn't

work both ways, milk plant needs local milk, and if you

got a lot of milk that's having to haul it somewhere,

they realize they can't afford to haul it so they build

a milk plant. So how do you keep a local supply of milk

by subsidizing milk hauled in? Of course they tell you

that they can't negotiate the value to cover the cost

but, they can't collect from Wal-Mart, they say. All

Wal-Mart needs is the true cost of milk, but nobody

wants to show what the true cost of milk is or if they

show it, they don't believe it. And I guess that's what

the Federal Order is for to show them true cost of milk.

Q. So, you think, I'm trying to summarize what

you're saying, I'm not trying to put words in your

mouth, but I think what you're tying together, the

previous point you made about having transparency tea
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585

about the actual price paid for milk at the plants, and

that would be a benefit not just to you as a producer,

but you think that type of transparency would also

incentivize local, more local farms, is that how those

two concepts are linked or am I missing part of that?

A. When I started in the dairy business, I didn't

have anything, I just, I had a job, and I became

partners. I hadn't inherited a farm or money and now

I'm looking at 800 cattle, all of it's come from milk

shed. And your profit margin is a very small number and

that's what you can grow your business with is a profit

margin, when they take that little bit of profit margin

and use to haul milk, it's hard to stay in the dairy

business in the Southeast, so I don't think you can set

the price on milk, but if you give the farmer the

ability to see what's going on, they can negotiate a

fair price in milk. And I've also seen where some

farmers are paid different than others within their own

organization. We have, within DFA, you had a $1.30

seasonality, volume, quality, that was divided among

dairy farmers. So you could easily put one farmer in a

profitable margin and the money would come from another

farmer and make him unprofitable, and a lot of stuff

within the Co-ops need to be dealt with in the Federal

Orders giving the handlers more money for them to buy it
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up differently than what they're testifying they're

going to do with it here, doesn't solve the problem,

that's why you need transparency.

Q. Okay. Would I be right if I suggested that that

lack of transparency also applied to a plant that had a

number of different independent shippers that they might

have different terms as well, it's not entirely a Co-op

issue?

A. Well, the -- well, I think what we call a volume

premium started here. The volume premium is an easy way

to procure milk. And the independent producer, which I

was most of the time, you're using deliveries to get

Co-op to do services below cost, but they call it a

volume premium. They knew they was going to pay more

money, so the easiest way to procure milk is to go out

and get the larger producers, which that leaves the

little producers with the Co-op. The Co-op's got

services they're performing at below costs and the

little guy gets hurt. Now this new Co-op that I

recently involved in, the rule is everybody gets the

same, no matter what size you are, you just have to have

milk quality that goes into the plant, and then they

have Assembly Cost of getting milk to the plant would be

higher than mine because I can ship loads of milk at a

time.
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Q. But help with the transparency you think we

should be encouraging those types of practices?

A. Yea, everything's going to be transparent.

Q. Is there anything else that you want to make sure

you have a chance to say on the record about your

proposal or the other proposals or any of the other

testimony that you've heard this week that you have

views on that you think would be helpful for AMS?

A. My proposal would be easy, if you're gonna

subside outside milk in or subsidize South Georgia milk

in Florida, then back away from Florida, it ought to be

transparent. And diversions are not to move milk away

from the plant, they're used to bring milk in anymore,

so I don't know why we have diversions in the Southeast,

that money that is used for that milk ought to just be

put in a transportation fund and everybody sees what's

going on.

And I'd like to say one other thing about a

pool, and that's what we do is we pool. And when you

pool, you're always going to be taking away from

somebody and giving it to somebody else, that's what a

pool is. If you do too much of it, it's not a good

thing, if you do the right amount, it's a good thing.

Q. Okay. Anything else you want to make sure I ask

you?
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588

A. Pardon?

Q. Is there anything else you want me to ask you?

A. No.

THE COURT: I suppose AMS gets to go

first, then Mr. Beshore gets a crack at it.

Cross-examination of this witness.

CROSS EXAMINATION

BY MS. TAYLOR:

Q. Good afternoon Mr. Sumners.

A. Good afternoon.

Q. Thanks for testifying today. I think your

coordinator did a good job making sure that you were

able to get, you know, your thoughts on the record. One

of the last statements you made, you said that you pool,

if you pool too much, it's not a good thing, if you pool

just the right amount, it's a goods thing?

A. Correct.

Q. Paraphrasing, just expand on what you mean by

that.

A. Well, the best pool I know of is life insurance,

because you pay in because you care and you hope you

never collect, where most pools are wanting somebody to

pay in, and you do all the collecting, but not any dairy

farmer can supply the total plant, so you need others to

serve that plant. And in hauling, for smaller farmers,
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589

it doesn't matter how far one farmer is from the plant,

what matters is loading that truck to get it to the

plant, so that's a little pool there that everybody

shares in the assembly of that milk to get into that

plant. Some think that their haul ought to be more or

less than the other guy, but that assembled load, all

the producers on that assembled load ought to be paying

the same value to get to the plant, I call that a good

pool, but if you're taking enough money away from your

local milk to bring other milk in and you keep losing

your local milk, I'd say that's a bad pool.

Q. And that's how you would, of I'm understanding

you correctly, that's your view on the current

Transportation Credit program that there's money being

used to bring in milk from outside the area to go to

Class I plants that should instead be being going to the

local producers?

A. I don't know that the Federal Orders can come up

with the exact pool. You also have the cooperative that

has their pool, and even independent buyers that they

can have different prices to different people too, but

over time, if you're losing your local supply and you're

having to go buy more expensive milk, you would think

that maybe you ought to keep a local supply, but I don't

think we come to that realization yet.
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590

Q. Well, along that same thought then, do you have,

I think you've been here all week and heard testimony on

the distributing plant delivery credit, which the

proponents of that proposal purport that it's to help

the local producers, do you have an opinion on that

proposal whether you think it's a good idea or not, it

would be helpful or not?

A. As long as that money goes back to those little

producers. I think I like Prairie Farms proposal more

than DCMA. Of course a lot of our growth, if we have

growth, is going to come from large dairies. I think

now they use the 5,000 cow number and they'll locate

where they have benefits. Some of these smaller farms,

they've been there forever, they may have a labor cost

issue with costs where the guy that's getting all the

funding to move his milk because he's located in a

preferred location, he's got the benefit of his location

and then he gets his milk off, whereas the little guy

who's close to the milk plant, who's got other expenses,

he won't draw as much money because he's, the miles to

the plant are less.

Q. So I take that then you prefer the Prairie Farms

proposal because it's on a per hundredweight basis and

not reflective or mileage?

A. Right, I think, which basically we're talking
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591

about increasing value with no diversions is what we're

talking about with these credits, in-area credits,

talking about the milk plant paying more, but it goes

directly back to the people that deliver to the plant.

And one, I'm in West Tennessee, my core price, I'm

usually paying 20, 30 cents over Chicago price. And

then I got friends in East Tennessee, they're paying

$1.50 and $2.00, and corn is a big expense in our

business. So the expenses on corn is quite a bit more.

So, under the proposal, my milk, it could go to East

Tennessee. I could get credits to go to East Tennessee

and compete with that milk over there with their higher

cost and I got low cost, I just don't think that's fair.

Q. So this kind of ties into my next question,

you're talking about costs, it's been requested that we

consider this procedure on an emergency basis, what that

means essentially is we do the process a little bit

differently and we would issue a decision and the

producers would vote on that right away, and it would

make it a little bit quicker, so can you speak a little

bit in your experience about the conditions right now

and whether you think the Department should consider

this on emergency basis and skip a few steps in order to

get a decision out if the Secretary so chooses?

A. My financial situation right now?
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Q. You don't have to divulge private information,

but, you know, just generally what's it like out there

for farmers like you, your neighbors, other farms in

Tennessee right now trying to, you know, make it work?

A. Well, I think my, there's a few small farms left

around me and I think they're -- I think they're, well,

no, the last two years have been good in the dairy

business. DFA has done better at paying people, the

milk price is a lot better. And then you had the

pandemic that put a lot of money into dairy. These

smaller guys, they got DMC, but I'd say the last two

years, with all the government money that we received,

it's probably the best two years I've had in a long time

and it got me back on my feet whereas if you go back to

'15, '16, '17 when I was getting paid dollars under

Federal Order minimum, it was a pretty tough situation,

but the pandemic and the good price this year has put me

back in good standing and I got a relationship with a

milk plant that's paying a good price now and I'm in

better shape than I've been in a long time. Now three

years ago I was thinking about getting out of the dairy

business, but now I see some hope for the next three

years anyway.

MS. TAYLOR: Thank you, I think that's

all my questions at the moment. Thanks for coming
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593

today.

MR. SUMNERS: Thank you.

THE COURT: May have questions from

others, Mr. Sumners. Anyone else have any questions for

this witness? Mr. Miltner, any?

MR. MILTNER: Mike, is there anything

else you want to say?

MR. SUMNERS: No, I think that's it.

THE COURT: Very well, you may stand

down then, thanks for being here, Mr. Sumners. Thanks

for sitting through all the rest of this hearing, for

talking to us today. Okay, who's next? Is it

pronounced Keefe?

MS. KEEFE: Yes, it is.

THE COURT: Welcome Ms. Keefe.

Whereupon,

SALLY KEEFE,

having been first duly sworn, was

examined and testified as follows:

DIRECT EXAMINATION

THE COURT: You're here by yourself, you

don't have a lawyer, moderator?

MS. KEEFE: I have no moderator.

THE COURT: You have a statement that
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you submitted, a piece of paper, single-page testimony

of Sally Keefe, Consultant for Milk Innovation Group?

MS. KEEFE: Yes.

THE COURT: Would you like that to be

marked as an exhibit?

MS. KEEFE: Yes, I would.

THE COURT: 101.

(Whereupon, Exhibit No. 101 was marked for

evidence.)

THE COURT: Anything you'd like to say

before you read your statement into the record?

MS. KEEFE: I think I'm good.

THE COURT: Very well, the floor is

yours.

MS. KEEFE: "My name is Sally Keefe, it

is spelled S--L-L-Y, K-E-E-F-E. I am from Boulder,

Colorado. I provided my private address to the USDA.

I'm a Consultant for the Milk Innovation Group. Milk

Innovation Group is a group of fluid processors and

producers. The seven members are Anderson Erickson

Dairy, Aurora Organic Dairy, Danone North America,

Fairlife, HP Hood, Organic Valley Cooperative and

Shamrock Foods. Some of our members are handlers

regulated by the three southeastern orders."

"The Milk Innovation Group is concerned
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about efforts to increase regulated minimum prices for

Class I milk to fund proposed assembly credits in an

environment where fluid milk sales continue to decline

precipitously. The group recognizes that market

conditions in the Appalachian, Florida and Southeast

orders are unique."

"Establishing an assembly performance

credit for the producers that actually supply and served

Class I is an interesting policy question. The Milk

Innovation Group supports allocating more Class I

dollars to the producers supplying Class I plants."

"Regarding any proposed assembly

performance credit, we suggest consideration of the

provisions in Order 30, the Upper Midwest. In the Upper

Midwest, the assembly credit is funded by the pool and

does not enhance Class I prices."

"We do not support effectively

increasing the Class I differential by 50 cents per

hundredweight with an assembly credit. However, we are

intrigued by using assembly credits to better align the

Class I supply

of Class I."

chain and ultimately improve the health

statement?

THE COURT: Is that the end of your

MS. KEEFE: It is.
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THE COURT: Any questions AMS?

MS. TAYLOR: Yes.

CROSS EXAMINATION

BY MS. TAYLOR:

Q. Good afternoon. Thanks for testifying today.

A. You're welcome.

Q. And hanging around all week so that you could

testify today. The Milk Innovation Group, you say some

of your members are handlers regulated in the Orders,

can you tell us who those are of this list?

A. Yea, both Shamrock Roods and Organic Cooperative

are handlers in these Orders.

Q. And how many plants do they have then that are

regulated, do you know?

A. Organic Valley/CROPP Cooperative is 9 C-handlers

and I believe Shamrock has one, one plant.

Q. Okay. So you also say some of your members are

producers, can you, represent producers, can you say who

those members are?

A. Aurora Organic Dairy and Organic Valley

Cooperative are farm production dairy producers.

Q. And then the other list are independent

processors?

A. Yes.

Q. Okay. In your first paragraph -- or second
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paragraph, you talk about the concern of increasing

regulated minimum prices given the decline in fluid milk

sales?

A. Uh-huh (affirmative).

Q. So can you, like other witnesses, elaborate on

the appropriateness or not of not appraising? I know

you're talking specifically about the assembly credit,

but there's also discussion this week on increasing

assessments for our transportation credits and the new

distributing plant delivery credit, so generally your

impression on the appropriateness of raising Class I

price to consumers?

A. Generally we're very concerned about any increase

in Class I prices where per capita consumption of Class

I milk is declining so rapidly. You know, it's, our

perspective on it is just the basic laws of supply and

demand, like we don't think that it makes sense to

increase the regulated minimum price when the demand for

our product is dropping off.

Q. Okay. So then leads me to my next question,

given that, if producers are experiencing increased

costs to service the Class I market, how do you, I mean,

what is the reaction for how they would otherwise recoup

those costs?

A. As other people have testified to, it's a
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598

balance. I mean, there has to be a balance between

entire supply chain, and the pushing it all of it onto

the processor is not probably realistic. On the other

hands, you know, clearly the situation down here is that

it's a deficit milk area, so there's balance that needs

to be achieved.

Q. And we've heard other testimony this week about

the success or not success of raising over-order

premiums or collecting on the over-order premiums

they're trying to get, can you speak or react to some of

that testimony on what some people say they've been

unable to have success in?

A. I can speak to it generally. In my experience,

once over-order premiums are negotiated between a

processor and a milk supplier, at that point they're

paid. I'm not aware of people refusing to pay once

they've agreed to pay.

Q. Okay. You mentioned the assembly credit in the

Upper Midwest, can you illuminated for the record how

that or how you understand that credit to operate?

A. My understanding of that credit, it's much

smaller than what's being discussed here. It's about 8

cents a hundredweight and it is funded out of the pool,

so it's not added on to the minimum Class I price. It

is, you know, it is a small amount of money relative to
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599

what's being discussed here today, so it's not entirely

the same sort of a concept, like I don't think that 8

cents a hundredweight is going to cause the sorts of,

create the kinds of incentives that people are wanting

to put into place here, but that idea of having,

directing a portion of Class I differential directly

towards the milk that is actually supplying the Class I

plants, that makes a lot of sense to us.

Q. Okay. And is that credit paid out on a per

hundredweight basis then or?

A. Yea, I believe it's paid out on a per

hundredweight basis. It's -- yea.

Q. In your last paragraph, you state that "we are

intrigued by using assembly credits to better align with

Class I supply chain and ultimately improve the health

of Class I," could you expound on what you mean by that

sentence?

A. Sure. You know, we do believe that one of the

things that Class I needs in order to help stem the

decline in demand is more innovation, and we think that

that includes developing milk supplies that are tailored

for the plants involved. And assembly credits could be

a really good way of providing value directly to the

producers involved doing that.

Q. And I'll speak to Shamrock since they are the one
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600

to have a plant down here, if you could speak to what

happens if they don't get the milk or if one of their

suppliers says they're having a hard time getting that

milk to them?

A. I'm not -- I can't speak for Shamrock on that,

so, sorry.

Q. There's been some discussion this week on the

impact of unequal raw product costs between handlers and

how that impacts their competitive situation, you know,

if they have different transportation costs and things,

then raw products are obviously not the same, can you --

would you like to speak to that point?

A. No, I don't want to speak to that point today,

thank you.

Q. Does Milk Innovation Group have a position on the

other, DCMA proposals that have been offered?

A. No, we don't have a position on the other DCMA

proposals or on the first two Prairie Farms

transportation credit proposals or Mr. Sumners'

proposals regarding the diversions.

Q. Okay. We've been requested to hear this,

consider this rulemaking on an emergency basis, that

conditions warrant that we should expedite the process,

does Milk Innovation Group have a position on that?

A. We don't have a view on that.
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601

Q. And I think my last question I should have asked

in the beginning, you said that Organic Valley is your,

I think it was Organic Valley and, I can't remember,

producer members, I'm just curious, how many producers

members kind of does your group represent?

A. Nationally Organic Valley has over a thousand

members, and then -- so well over a thousand. I do not

know how many are in the Southeast.

Q. Okay.

MS. TAYLOR: That's all the questions I

have. Thank you.

THE COURT: Any questions of this

witness from any other participant?

CROSS EXAMINATION

BY MR. TONAK:

Q. Dennis Tonak with Prairie Farms. In particular,

I wanted to call your attention to the second to last

paragraph, I believe you indicated you did not know a

lot about the Order 30 Assembly Credit, are you aware

that the Order 30 Assembly Credit only applies to milk

transferred from a supply plant to a pool distributing

plant and the credit is only on the pro rata share of

Class I milk?

A. It is my understanding that that is the Order 30

Transportation Credits and that the Assembly Credits are
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602

on the producer milk.

MR. TONAK: Okay. I will accept that.

Thank you.

THE COURT: Questions from any other

participants? Further cross by AMS? Your witness.

MS. TAYLOR: I have one more question

that just hit me.

Q. There's been a lot of talk about the importance

of keeping a local supply versus bringing in outside

milk, can you speak to that point on the importance from

a processor perspective and from the producer members

that you have on the importance of a local, keeping a

vital local supply?

A. The members of our group are very invested and

interested in keeping a local supply of milk for every

single one of their facilities whether located in this

order or any other order, because it is, by far, the

best milk supply for the plants. It is the most

cost-effective, it provides good service, like local

supplies are absolutely essential.

THE COURT: Nothing further AMS?

Anything further you'd like to say, Ms. Keefe?

MS. KEEFE: No, thank you.

THE COURT: Okay. Thank you for being

here. You're welcome to step down. Is that all the
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603

witnesses we have? I guess I would move -- we should

consider whether exhibit 101 should be admitted for the

record, is there any objection?

MR. HILL: No objection.

MR. BESHORE: (Nodded negative.)

THE COURT: Exhibit statement of

Ms. Keefe marked exhibit 101 is admitted into the

record.

THE COURT: Okay, before we get to --

schedules, come to any conclusions about that or do we

need a further break? Okay, we've completed all the

witnesses here, so with that, I don't think there's

anything else outstanding, so I close the hearing,

unless someone's got something else that they have left

out and wants to raise or should put into the record. I

will close the hearing which basically means that the

record is closed except for transcript corrections, my

ruling on transcript corrections will go into the record

and the significant of that is for briefing. I see

briefing on exceptions to under 7CFR 900 - I can't read

my own handwriting, but anyway the briefing section says

that no factual evidence shall be cited in the brief

other than what's in the hearing record. And so if

something comes up, someone asks to reopen the record

essentially, so there we have it.
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604

MR. HILL: So the expectation is that

the transcript will become available to AMS in about two

weeks, then we'll post it to the website, and we're

proposing that after it is posted to the website, there

is one week for transcript corrections after the time

that it's posted on the website, and further three weeks

after those corrections for a briefing?

THE COURT: Yes, Mr. Beshore.

MR. BESHORE: The only question I have

is, what effect, if any, in AMS's view does the briefing

schedule have with respect to the statutory deadlines

for actions on a mandatory hearing of the sort?

MR. HILL: Does the briefing schedule

affect that one way or the other?

THE COURT: Let's go off the record.

(Whereupon, discussion was held off record.)

THE COURT: The due date for recommended

decision is tied to the due date of the last brief as I

understand it under the regs. Okay, so we're talking

about to

you said

expect transcripts around March

a week for transcript correction

MR. HILL: That would be

16th, I guess,

s?

correct, Your

Honor.

THE COURT: That'll make 23rd for

correction, approximate, I'm saying approximately, we
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605

could use those dates, but we can base it on a week from

a particular date rather than a date certain?

MR. HILL: Correct.

THE COURT: Okay. So, that's around

23rd. How about objections to transcript corrections,

do you want a date for that?

MR. HILL: A week.

THE COURT: All right. And then I have

time to consider those, I guess, you want to give me a

deadline for -- someone has objected, I got to rule, I

guess, you want to give us a week, so that'd be the 6th

around the 6th of April. I mean, you guys get started

on briefs, obviously just because we say briefs are due

at a particular time doesn't mean you can't start

writing as soon as transcript gets in. Mr. Beshore?

MR. HILL: Yes, just to make clear

again, the expectation is for briefs three weeks after

the transcript corrections.

THE COURT: After my ruling on them or

after objections, after corrections?

MR. HILL: Transcript there, original

transcript, they'll be writing them as you said.

THE COURT: Three weeks after the 16th,

so.

MS. TAYLOR: That's the 6th when you
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606

rule on objections. Yea, that doesn't really work.

THE COURT: Are we on the record --

let's stay off -- let's go off.

(Whereupon, discussion was held off the

record.)

THE COURT: Mr. Hill, you can lay out

the brief, everyone in the room agreed upon this

procedural schedule.

MR. HILL: So in case I did not say this

correctly the first time, we expect the transcripts in

approximately two weeks. When the transcripts arrive,

they will be placed on the AMS website. One week after

they are placed on the website, we are expecting

transcript corrections. Three weeks after that date

will be the time scheduled for simultaneous briefing.

Also, let me say one last thing, Your Honor, once AMS

receives the briefing and posts them on the website, it

post the rest of the briefing dates, the transcript

corrections and the actual date for the simultaneous

briefing.

do you expect

THE

to have

MS.

COURT: That would

the exhibits up?

TAYLOR: Same time

be helpful.

as the

When

transcript.

MR. HILL: At the same time as the
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607

transcript.

THE COURT: Does the court reporter

handle that or how, just curious?

MS. TAYLOR: They'll scan them in and

send them to us and we'll post them on the website.

THE COURT: Very well. Mr. Beshore, you

stood up?

MR. BESHORE: I just want to confirm on

the record the briefs may be filed electronically with

the --

MS. TAYLOR: Court reporter, I mean,

hearing clerk's office.

THE COURT: Hearing clerk's office, yea,

let's put that in the record briefs, all filings can be

made via e-mail to the hearing clerk's office. The

hearing clerk's office closes at 5 o'clock or 4 o'clock?

MS. TAYLOR: 5 o'clock.

THE COURT: 5 o'clock so.

MS. TAYLOR: We can put a link to the

proper e-mail address that those should be filed at on

our website too.

THE COURT: Thank you. I like this

whole website process. It gets everything out there.

So to be, to be timely, need to get it in before

5 o'clock via e-mail, well, I won't say that -- in
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608

certain instances, they're very drastic effects of not

doing something in a timely manner, that may or may not

be true here, probably not.

MS. TAYLOR: I could ask a courtesy on

behalf of AMS, but also, and provide us a copy

electronically, it does, can take a couple of days to

get them from the hearing clerk.

THE COURT: Yes, please provide courtesy

copies to -- they can provide courtesy copies to my

office as well.

MR. HILL: I think, Your Honor, you

also mentioned exceptions to the transcript corrections?

THE COURT: I didn't say objections,

proposed corrections.

MR. HILL: I think you wanted that one

week after the transcript corrections?

THE COURT: Post-transcript corrections,

correct. Okay, is that it?

MR. HILL: (Nodded affirmative).

THE COURT: Okay, congratulations to

everybody. I've enjoyed this proceeding. I appreciate

the professional demeanor preparedness, general

cooperation of everybody that's worked on this case

these past few days and very gratifying to work with you

all. Safe travels back to your homes wherever that may
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609

be and I look forward to seeing further documents, at

least the ones that come to me in this case. Thank you

Everyone.

(Whereupon, these proceedings were adjourned.)
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_________________________

610

CERTIFICATE

STATE OF TENNESSEE

COUNTY OF WILLIAMSON

I hereby certify that the foregoing

transcript was taken down, as stated in the caption, and

the questions and answers thereto were reduced to

typewriting under my direction; that the foregoing pages

251 through 607 represent a true, complete, and correct

transcript of the evidence given upon said hearing, and

I further certify that I am not of kin or counsel to the

parties in the case; am not in the regular employ of

counsel for any of said parties; nor am I in any way

interested in the result of said case.

This, the 18th day of March 2023.

Lisa Finch,

Notary Public