7. MISCELLANEOUS AND ADMINISTRATIVE.

(a) Consolidation of the marketing service, administrative

expense, and producer-settlement funds. To complete the

consolidation of the present 31 Federal orders effectively and

equitably, the reserve balances in the marketing service,

administrative expense, and producer-settlement funds that have

resulted under the individual orders would be combined.

The balances in these three funds should be combined on the

same basis that the marketing areas are consolidated into regional

orders herein. For instance, the Texas and New Mexico-West Texas

marketing areas are merged into a new regional Southwest order. 

Accordingly, the reserve balances in the marketing service,

administrative expense and producer-settlement funds of the two

individual orders likewise should be combined into three separate

funds established under the consolidated Southwest order.

The marketing areas of the 11 consolidated orders essentially

represent the territory covered by the 31 individual orders plus

the territory included in the former Tennessee Valley marketing

area. Because of this, the handlers and producers servicing the

milk needs of the individual markets will continue to furnish the

milk needs of the applicable regional market for the most part.

In that regard, the reserve balances in the funds that have

resulted under the 31 individual orders should be combined on a

marketing area basis into the appropriate separate fund

established for each of the 11 regional orders. Any liabilities

of such funds under the individual orders would be paid from the

appropriate newly established fund of the applicable regional

order. Similarly, obligations that are due the separate funds

under the individual orders would be paid to the appropriate

combined fund of the applicable consolidated order.

In most cases, the entire marketing area of an order or

orders is included in the consolidated marketing area of one of

the 11 regional orders. Four present marketing areas would be

split between two consolidated orders. One county of the present

Louisville-Lexington-Evansville (Order 46) marketing area would be

included in the Southeast order, and the rest of the territory in

the Order 46 marketing area would be included under the

Appalachian order. Even though one Order 46 county is included in

the consolidated Southeast order, all of the present Order 46

producers and handlers are expected to be covered under the 

consolidated Appalachian order. Accordingly, the balances in the

Order 46 marketing service, administrative expense, and producer

settlement funds should be consolidated into the three separate

funds established for the consolidated Appalachian market.

Different regulatory situations, however, will occur in the

other three instances where a current marketing area is divided

between two consolidated orders. The southwest Missouri and
northwest Arkansas portions of the current Southwest Plains order

area are included in the consolidated Southeast marketing area,

while the remainder of the Southwest Plains area is combined with

the marketing areas of eight other orders in the consolidated

Central marketing area. Similarly, one county of the current

Great Basin (Order 139) marketing area is included in the

consolidated Arizona-Las Vegas order and the rest of the Order 139

marketing area is included in the consolidated marketing area for

the West. In the third instance, two zones of the Michigan Upper

Peninsula (Order 44) marketing area are included in the

consolidated Upper Midwest marketing area and the other zone of

the Order 44 marketing area is included in the marketing area for

the Mideast regional order. 

In each of these 3 cases, some of the producers and handlers

of each of the current order areas that are being divided will

become pooled under one consolidated order, while the other

producers and handlers of each of these areas will become pooled

under another regional order. Accordingly, any reserve balances

in the marketing service, administrative expense and producersettlement funds of these three individual orders should be

divided equitably among the applicable consolidated orders.

The money accumulated in the marketing service funds of the

individual orders is that which has been paid by producers for

whom the market administrators are performing such services. 

Since the marketing areas of the 11 regional orders encompass the

territory covered by the individual orders, for the most part, the

producers who have contributed to the marketing service funds of

the individual orders are expected to continue supplying milk for

the consolidated orders. Since marketing service programs will be

continued for these producers under the regional orders, it would

be appropriate to combine the reserve balances in the marketing

service funds of the order or orders that are represented in the

consolidation of each of the 11 regional orders.

When the consolidated marketing area includes the marketing

area of one or more individual orders, any remaining balance in

the marketing service fund of the individual order or orders

should be combined in the marketing service fund established for

the applicable consolidated order. If a current marketing area is

split between two consolidated markets and the regulatory status

of producers and handlers is divided between the two regional

orders, as is the case with the Michigan Upper Peninsula,

Southwest Plains, and Great Basin orders, any balance in the

marketing service fund of the individual order should be prorated

between the two consolidated orders on the basis of the amount of

milk subject to the marketing service deduction that will be

covered by each respective regional order (using producer

deliveries in the last month the individual orders are in effect
but assuming that the marketing areas had been consolidated).

The money paid to the administrative expense fund is each

handler’s proportionate share of the cost of administering the

order. For the most part, handlers currently regulated under the

individual orders will continue to be regulated under the

consolidated orders. In view of this, it would be an unnecessary

administrative and financial burden to allocate the reserve funds

of the individual orders back to handlers and then accumulate an

adequate reserve for each of the consolidated orders. It would be

as equitable and more efficient to combine the remaining

administrative monies accumulated under the individual orders in

the same manner as the marketing areas are combined.

For the orders where the consolidated marketing area includes

the regulated territory of one or more of the individual orders,

any remaining balance in the administrative expense fund of the

individual order or orders would be combined into the

administrative expense fund established for the applicable

consolidated order. In the situations where the current

individual marketing area is split and the regulatory status of

producers and handlers is divided (as in the case of the Michigan

Upper Peninsula, Southwest Plains, and Great Basin orders) between

two consolidated marketing areas, the remaining balance in the

administrative expense fund should be prorated between the two

regional orders on the basis of the amount of milk that would be

pooled and priced under each respective consolidated order (using

producer milk deliveries during the last month the individual

orders are in effect but assuming that the orders had been

consolidated). 

Likewise, the producer-settlement fund balances of the

individual orders should be combined. They should be combined on

the same basis as the marketing areas are consolidated herein. 

This will enable the producer-settlement funds of the consolidated

orders to continue without interruption.

The producers currently supplying the individual markets are

expected to supply milk for the consolidated markets. Thus,

monetary balances in the producer-settlement funds of the

individual orders now would be reflected in the pay prices of the

producers who will benefit from the applicable consolidated

orders. The combined fund for each consolidated order also would

serve as a contingency fund from which money would be available to

meet obligations (resulting from audit adjustments and otherwise)

occurring under the individual orders.

The same procedure used in combining the remaining balances

in the marketing service and administrative expense funds of the

individual orders should be followed in combining the producersettlement fund balances when the individual orders are

consolidated. For orders where the consolidated marketing area
includes the marketing area of one or more orders, any remaining

balance in the producer-settlement fund of the individual order or

orders would be combined into the producer-settlement fund

established for the applicable consolidated order. In the three

situations (Michigan Upper Peninsula, Southwest Plains, and Great

Basin) where the marketing area of a current order is split

between two consolidated orders and some of the individual

market’s producers and handlers would be regulated under one

consolidated order and others would be regulated under another

consolidated order, the balance in the producer-settlement fund

should be divided equitably between the two consolidated orders. 

Since the Michigan Upper Peninsula order is an individual-handler

pool market, no producer-settlement fund is provided. In the 2

remaining instances in which current marketing areas are divided

between 2 consolidated orders, the remaining balance in the

producer-settlement funds of the Southwest Plains and Great Basin

orders should be prorated between the consolidated orders on the

basis of the amount of milk that will be pooled and priced under

each respective consolidated order (using producer milk deliveries

during the last month the individual orders are in effect but

assuming that the orders had been consolidated).

(b) Consolidation of the transportation credit balancing

funds. To complete the consolidation process, the reserve

balances in the transportation credit balancing funds that are in

effect now under three Southeast orders (Carolina, Order 5;

Southeast, Order 7; and Louisville-Lexington-Evansville, Order 46)

also should be consolidated. These funds should be combined on a

marketing area basis. In that regard, the reserve balances in the

transportation credit balancing funds of the Carolina and

Louisville-Lexington-Evansville orders should be consolidated into

a newly established transportation credit balancing fund for the

consolidated Appalachian order, which also includes the current

marketing areas of these two orders with the exception of one

county. Similarly, the reserve balance in the transportation

credit balancing fund of the present Southeast order should be

transferred to the consolidated Southeast order, which includes

all of the marketing area of the present Southeast order. These

procedures will enable the transportation credits to continue

without interruption under these two consolidated orders.

(c) General findings.

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.
(1) The tentative marketing agreements and the orders, as

hereby proposed to be 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 each of the

aforesaid marketing areas, and the minimum prices specified in the

tentative marketing agreements and the orders, as hereby proposed

to be 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 tentative marketing agreements and the orders, as

hereby proposed to be amended, will regulate the handling of milk

in the same manner as, and will be applicable only to persons in

the respective classes of industrial and commercial activity

specified in the marketing agreements;

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

defined in the tentative marketing agreements and the orders as

hereby proposed to be 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 administrator 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.

Comments

In arriving at the findings and conclusions, and the

regulatory provisions of this decision, each of the comments 

received was carefully and fully considered in conjunction with

the rulemaking record.

Marketing Agreements and Order Amending the Orders

The marketing agreements regulating the handling of milk in

each of the consolidated orders are not included in this final

decision because the regulatory provisions thereof would be the

same as those contained in the orders, as hereby amended. The

following order amending the orders regulating the handling of

milk in the respective marketing areas of these orders is proposed

as the detailed and appropriate means by which the foregoing

conclusions may be carried out.

Referendum Order to Determine Producer Approval

This decision does not provide for conducting referendums of
producers to determine if they approve of the issuance of the

consolidated orders. A notice to conduct a referendum on each of

the consolidated orders will be issued at a future date.

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.

Date: March 12, 1999

Michael V. Dunn

Under Secretary

Marketing and Regulatory Programs

Order Amending the Orders Regulating the Handling of Milk in the

Northeast and Other Marketing Areas

This order shall not become effective unless and until the

requirements of § 900.14 of the rules of practice and procedure

governing proceedings to formulate marketing agreements and

marketing orders have been met.

Findings and Determinations

The findings and determinations hereinafter set forth

supplement those that were made when the 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.

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

and conditions thereof, will tend to effectuate the declared

policy of the Act;

(b) 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 aforesaid

marketing areas. 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; and

(c) 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 or commercial activity

specified in, the marketing agreements;

(d) 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

(e) 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.

Order Relative to Handling

 It is therefore ordered, that on and after the effective

date hereof, the handling of milk in the Northeast and other

marketing areas shall be in conformity to and in compliance with

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

amended, as follows:

The provisions of the proposed marketing agreements and order

amending the orders contained in the proposed rule issued by the

Administrator, Agricultural Marketing Service, on 

January 21, 1998, and published in the Federal Register on 

January 31, 1998 (63 FR 4802), as modified herein, shall be and

are the terms and provisions of this order, amending the orders,

and are set forth in full herein.

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: