5. PROVISIONS APPLICABLE TO ALL ORDERS

In addition to the terms and conditions of milk orders

previously described, there are a number of other provisions

common to all milk orders that describe and define those persons

and plants affected by the regulatory plan of the program. 

Different marketing conditions in the consolidated areas, together

with institutional factors, do not lend themselves to an entirely

uniform set of provisions for all orders. Consequently, in each

of the consolidated orders there are provisions that are unique to

each order.

This part of the final decision discusses the nature of these

common order provisions, their purpose, and whether or not a

provision can be uniformly applied to all orders. When a

provision does not lend itself to uniform application, it is

discussed in subsequent sections of this final rule together with

the provisions unique to each of the individual orders.

To the extent that provisions can be uniformly applicable for

all of the consolidated orders, they are included in Part 1000,

the General Provisions of Federal Milk Marketing Orders which are,

by reference, already a part of each milk order. Thus, as

provided here, the General Provisions include the definitions of

route disposition, plant, distributing plant, supply plant,

nonpool plant, handler, other source milk, fluid milk product,

fluid cream product, cooperative association, and commercial food

processing establishment. In addition, the General Provisions

include the milk classification section of the order, pricing

provisions, and some of the provisions relating to payments. 

These additions to the General Provisions should make milk order

provisions more understandable to the general public by removing

the differences that now exist and by consolidating uniform 

provisions in one place. Thus, an interested person would only

have to read one “nonpool plant” section, for instance, to

understand how that term is applied to all orders. By contrast,

at the present time, “nonpool plant” is defined in every order and

there are slight differences in the definition from one order to

the next.

No comments to the proposed rule were received with regard to

most of the provisions discussed in this section. To the extent

that there were comments, they are specifically discussed below. 

Most of the provisions in the proposed rule are adopted without

substantive change. Any substantive changes are specifically

discussed below. 

The Concept of Pooling Milk Proceeds

All Federal milk orders today, save one, provide for the

marketwide pooling of milk proceeds among all producers supplying

the market. The one exception to this form of pooling is found in

the Michigan Upper Peninsula market, where individual handler
pooling has been used. 

Marketwide sharing of the classified use value of milk among

all producers in a market is one of the most important features of

a Federal milk marketing order. It ensures that all producers

supplying handlers in a marketing area receive the same uniform

price for their milk, regardless of how their milk is used. This

method of pooling is widely supported by the dairy industry and

has been universally adopted for the 11 consolidated orders.

There were a number of proposals and public comments

considered in determining how Federal milk orders should pool milk

and which producers should be eligible to have their milk pooled

in the consolidated orders. Many of these comments advocated a

policy of liberal pooling, thereby allowing the greatest number of

dairy farmers to share in the economic benefits that arise from

the classified pricing of milk. 

A number of comments supported identical pooling provisions

in all orders, but others stated that pooling provisions should

reflect the unique and prevailing supply and demand conditions in

each marketing area. Fundamental to most pooling proposals and

comments was the notion that the pooling of producer milk should

be performance-oriented in meeting the needs of the fluid market. 

This, of course, is logical since a purpose of the Federal milk

order program is to ensure an adequate supply of milk for fluid

use. 

A suggestion for “open pooling,” where milk can be pooled

anywhere, has not been adopted, principally because open pooling

provides no reasonable assurance that milk will be made available

in satisfying the fluid needs of a market. Proposals to create

and fund “stand-by” pools are similarly rejected for the same

reason.

The pooling provisions for the consolidated orders provide a

reasonable balance between encouraging handlers to supply milk for

fluid use and ensuring orderly marketing by providing a reasonable

means for producers within a common marketing area to establish an

association with the fluid market. Obviously, matching these

goals to the very disparate marketing conditions found in

different parts of the country requires customized provisions to

meet the needs of each market. For example, in the Florida

marketing area, where close to 90 percent of the milk in the pool

will be used for fluid use, pooling standards will require a high

degree of association with the fluid market and will permit a

relatively small amount of milk to be sent to manufacturing plants

for use in lower-valued products. In the Upper Midwest market, on

the other hand, a relatively small percentage of milk will be

needed for fluid use. Accordingly, under the pooling standards

for that order smaller amounts of milk will be required to be

delivered to fluid milk plants and larger amounts of milk will be
permitted to be sent to manufacturing plants for use in storable

products such as butter, nonfat dry milk, and hard cheese. The

specific pooling provisions adopted for each order are discussed

in detail in the sections of this document pertaining to each of

the consolidated orders. 

Route Disposition 

Route disposition is a measure of fluid milk sales in

commercial channels. It is defined to mean the amount of milk

delivered by a distributing plant to a retail or wholesale outlet

(except a plant), either directly or through any distribution

facility (including disposition from a plant store, vendor or

vending machine), of a fluid milk product in consumer-type

packages or dispenser units that is classified as Class I milk. 

The route disposition definition adopted here differs from

the definition contained in some current orders. Presently, the

route disposition definition of several orders makes reference to

plant movements of packaged fluid milk products between

distributing plants with respect to determining if such transfers

should be considered “route disposition” of the transferring plant

or the receiving plant. As provided here, however, this issue is

addressed in Section 7(a) of the pool plant section, which

essentially treats such transfers as if they were route

disposition.

Plant 

A plant definition is included in all orders to specify what

constitutes an operating entity for pricing and regulatory

purposes. As provided in § 1000.4 of the General Provisions, a

plant is the land, buildings, facilities, and equipment

constituting a single operating unit or establishment at which

milk or milk products are received, processed, or packaged. This

is meant to encompass all departments, including those where milk

products are stored, such as a cooler. The plant definition does

not include a physically separate facility without stationary

storage tanks that is used only as a reload point for transferring

bulk milk from one tank to another, or a physically separate

facility that is used only as a distribution point for storing

packaged fluid milk products in transit for route disposition.

To account for regional differences and practices in

transporting milk, some of the consolidated orders provide for the

use of reload points for transporting bulk milk that do not have

stationary storage tanks.

Farm-separated Milk 

With the advent of new technology for on-farm separation of

milk into its components, some additional regulatory language has

been added to the plant definition to specify who is the

responsible handler for the milk or milk components leaving the

farm and how these components will be classified and priced. This
determination will be based, in part, on whether the farm

processing facility is a plant.

Ultrafiltration (UF) is a membrane process that transfers

water and low-molecular weight compounds through a membrane while

retaining suspended solids, colloids, and large organic molecules. 

It selectively fractionates some milk solids components and

selectively concentrates other solids components of milk.

When a UF membrane is used, water, lactose, uncomplexed

minerals and other low-molecular-weight organic compounds pass

through the membrane. For example, if unaltered milk containing

3.5 percent fat, 3.1 percent protein, and 4.9 percent lactose is

run through a UF membrane until half of the original volume is

eliminated, the remaining product not passing through the membrane

(i.e., retentate) will contain all of the fat and protein but only

half of the lactose. The permeate (i.e., that part of the

original milk that does pass through the membrane) will contain

water, lactose, non-protein nitrogen, and about one-sixth of the

minerals. 

Reverse osmosis (RO) is also a membrane process, but the

membranes have much smaller pores than UF membranes, allowing only

the water to pass through. The end product essentially is

concentrated milk.

At the present time, both reverse osmosis and ultrafiltration

systems are being utilized on some farms, principally large farms

in the southwestern United States. The product shipped from these

farms (i.e., the retentate) currently is sent to processing plants

for use in manufactured products but it could be used in a range

of milk products.

The retentate received from a farm with a UF or RO system

will be treated as producer milk at the pool plant at which the

milk is physically received or, if the retentate is shipped to a

nonpool plant, as producer milk diverted to a nonpool plant. In

either case, the milk or milk components will be priced at the

pool plant or nonpool plant where the milk is physically received.

To be considered a farm and a producer, as opposed to a plant

and a handler, an RO or UF unit must be under the same ownership

as the farm on which it is located and only milk from that farm or

other farms under the same ownership may be processed through the

unit. The producer operating the unit shall be responsible for

providing records of the daily weights of the milk going through

the unit. Also, the producer must provide samples for each load

of milk going through the unit and must furnish the receiving

plant with a manifest on each load of retentate showing the scale

weight along with samples of the retentate. Finally, the producer

operating the RO or UF unit must maintain records of all

transactions which must be available to the Market Administrator

upon request. If the producer does not meet these recordkeeping
and reporting requirements, the unit will be considered to be a

plant.

RO and UF retentate will be considered to be producer milk at

the plant which receives it. The pounds of RO and UF retentate

received will be priced according to the skim-equivalent pounds of

such milk. The skim-equivalent pounds for RO retentate will be

determined by dividing the solids-not-fat pounds in the retentate

by the average producer solids-not-fat in the skim portion of the

producer milk used in the product. The butterfat pounds would

then be added to this number to arrive at the product skimequivalent pounds.

In computing the fluid equivalent of UF retentate, the fluid

equivalent factor should be computed by dividing the true protein

test in the skim milk portion of the retentate by the true protein

test in the skim milk portion of the producer milk used in the

product. Adding the butterfat pounds to this computation will

yield the product equivalent pounds.

In addition to having UF and RO equipment, some farms today

may have a separator to separate skim milk from cream before they

leave the farm. Rules are also established for this type of

operation.

Skim milk and cream going through a farm separator also

should be treated as producer milk if received at a pool plant or

diverted to a nonpool plant. The producer will be required to

obtain scale weights and tests on each load of skim and cream

shipped along with samples of each. The same ownership,

recordkeeping, sampling and reporting requirements that apply to

RO and UF units will also be applicable.

In formulating a policy for the treatment of RO and UF

retentate, it is important to recognize that the milk produced on

a farm with RO or UF equipment is fully available to meet the

needs of the fluid market, either before or after passing through

such units. Therefore, there should be no question concerning the

propriety of pooling this milk along with other producers’ milk.

At this writing, the Food and Drug Administration (FDA) has

not yet decided whether UF retentate can be reconstituted and sold

as fluid milk. However, FDA has approved the use of UF retentate

in certain cheese products on a trial basis. Therefore, before

receiving UF retentate for use in any product, handlers should be

certain that such use has been approved by the FDA.

Distributing Plant

A distributing plant is defined as a plant that is approved

by a duly constituted regulatory agency to handle Grade A milk and

at which fluid milk products are processed or packaged and from

which there is route disposition or transfers of packaged fluid

milk products to other plants. This definition, and the following

supply plant definition, are essentially the same as those found
in present orders, except for minor changes made to conform with

the pool plant provisions adopted for the consolidated orders. 

Supply Plant

A supply plant is a regular or reserve supplier of bulk milk

for the fluid market that helps to coordinate the supply of milk

with the demand for milk in a market. As defined in this

decision, a supply plant is a plant approved by a duly constituted

regulatory agency for the handling of Grade A milk that receives

milk directly from dairy farmers and transfers or diverts fluid

milk products to other plants or manufactures dairy products on

its premises.

Pool Plant

The pool plant definition of each order describes those

plants which receive milk that shares in the marketwide pool. It

provides standards to identify those plants engaged in serving the

fluid needs of the marketing area. Pool plants serve the fluid

market to a degree that warrants their producers sharing in the

added value that derives from the classified pricing of milk. 

While the pool plant definition in every consolidated order

provides for a set of common principles, the standards applicable

to pool plants differ among the consolidated orders, reflecting

the fact that marketing conditions vary across the country. The

goal in drafting pooling standards is to ensure both an adequate

supply of milk for fluid use and orderly marketing by allowing all

milk in a marketing area the opportunity to serve the fluid market

and thereby share in the pool.

There are 2 performance standards applicable to pool

distributing plants in the consolidated orders. The first

standard, which varies among orders, requires a distributing plant

to have a minimum Class I utilization. Since route disposition

includes only Class I milk, the specific standard is a measure of

a distributing plant’s route disposition as a percent of its total

receipts of fluid milk products. This standard is generally

directly related to the market’s Class I utilization. 

Accordingly, in the higher Class I utilization markets in the

Southeast, the overall route disposition standard is 50 percent. 

In a market such as the Upper Midwest, on the other hand, where

Class I utilization will be much lower, the overall route

disposition standard is only 15 percent. The specific standards

for each consolidated order are discussed in Section 6 of this

decision.

One change common to all orders from the proposed rule to

this final decision is the substitution of “total receipts of

fluid milk products” for “receipts of bulk fluid milk products” in

computing the total and in-area disposition for a distributing

plant. This change was made to achieve consistency in accounting

for packaged receipts at a distributing plant that are
subsequently disposed of as route disposition or transferred to

another plant. Since all such disposition will count towards

meeting an order’s specified pooling standards, receipts of such

products from another plant also should be counted as part of the

plant’s receipts. 

Once it is determined that a distributing plant is

sufficiently associated with the fluid market to share in the

pool, a second standard determines if the plant is sufficiently

associated with a particular market to share in the pool

applicable to that market. The “in-area” standard adopted for the

consolidated orders requires that a distributing plant have 25

percent of its route disposition within a marketing area before it

can be fully regulated by the order covering that marketing area.

The 15 percent in-area standard in the proposed rule has been

changed to 25 percent for all orders to reflect the larger, merged

marketing areas that are adopted. This change should not affect

the regulatory status of any current distributing plant. 

At the present time, some orders describe the in-area route

disposition standard as a percent of plant receipts, while in

other orders it is described as a percent of route disposition. 

For the new orders, the in-area standard for all orders is

expressed as a percent of total route disposition. This

methodology will ensure that the in-area route disposition

standard never exceeds the total route disposition standard, a

situation that is now possible under the terms of the present

Upper Midwest order. For most orders, this change will make

little difference and should not result in regulating any plant

that is now unregulated.

Under the consolidated orders, a distributing plant that has

sales in more than one Federal order marketing area will be

regulated, for the most part, under the order in which it has the

most sales. There are certain exceptions to this rule, however,

particularly in the 3 Southeast orders, where the shifting of

plants among markets has created disorderly marketing conditions

in recent times. In the Florida, Southeast, and Appalachia

orders, a distributing plant that is located within the marketing

area and that meets the order’s pooling standards will be

regulated under that order even though it might have more route

disposition in some other marketing area. 

When the regulation of a plant does shift from one order to

another, the shift will only occur after the plant has had greater

sales in such other market for 3 consecutive months. This

provision will provide some stability to avoid the frequent

shifting of regulation between orders.

 To facilitate proper administration and accounting, all

orders currently provide that packaged fluid milk products

transferred from one handler to another be treated as
inter-handler transfers, with each transaction properly identified

and specifically reported to affected market administrators. This

should continue in the consolidated orders. However, for the

single purpose of qualifying a plant as a pool distributing plant,

the pool distributing plant definition has been modified to treat

transfers of packaged fluid milk products to other plants as if

they were route disposition of the transferring plant for the

purpose of identifying the plant’s association with the fluid

market. This is necessary to preclude a plant from becoming

partially regulated if the plant shipped significant quantities of

packaged fluid milk products to another distributing plant. A

conforming change has been made to the distributing plant

definition in § 1000.5 to reflect this change.

A special pool distributing plant provision (i.e., Section

7(b) of the consolidated orders) has been adopted for distributing

plants that distribute ultra-pasteurized or aseptically-processed

fluid milk products. Such plants must be located in the marketing

area and must process a certain percentage of their milk receipts

into ultra-pasteurized or aseptically-processed fluid milk

products during the month. The minimum percentage used for each

order in Section 7(b) is equal to the total route disposition

percentage required in Section 7(a) of the order for distributing

plants processing standard shelf-life fluid milk products. 

However, unlike the standards for a 7(a) plant, there is no route

disposition standard for a 7(b) plant to meet.

Plants specializing in ultra-pasteurized or

aseptically-processed fluid milk products tend to have erratic

processing and distribution patterns reflecting the long-life

nature of the product they process. In some months, they may

process fluid milk products but have little or no route

disposition because the products are stored in inventory. In

addition, these plants often have much wider distribution patterns

than do other distributing plants and, under current orders,

frequently shift regulation from one order to another. This

shifting regulation is disruptive to the producers and/or

cooperatives supplying these plants and is an additional

regulatory burden to the plant operator. 

To provide regulatory stability for these plants, they will

be treated as a fully regulated plant if they process a minimum

percent of their milk receipts into ultra-pasteurized or

aseptically-processed fluid milk products during the month. 

Having met this standard, which varies among orders, they will not

shift regulation to another order simply because they have more

route disposition in such other order’s marketing area. In fact,

they need not have any route disposition in the order in which

they are located to remain regulated. However, if they do not

meet the processing standard of the order in which they are
located but do meet the 7(a) standards for a distributing plant

under one or more other orders, they will become regulated under

the order in which they have the most route disposition. If they

continue to qualify for pool status on this basis, they may be

subject to regulatory shifts depending upon the pattern of their

route disposition.

Pool Supply Plant

Performance standards for pool supply plants are designed to

attract an adequate supply of milk to meet the demands for fluid

milk in a market. Pool supply plants move milk to pool

distributing plants that service the marketing area.

The pool supply plant definition, like the distributing plant

definition, does not lend itself to uniform application in all

consolidated orders. Consequently, pool supply plant performance

standards should be established according to regional needs. The

specific standards adopted in each order are described in Section

7(c) of each new order and are explained in more detail in the

regional discussions of this document. 

In most current orders, a pool supply plant does not include

any portion of a plant that is not approved for handling Grade A

milk and that is physically separated from a portion of the plant

that has such approval. Some inspection agencies render only one

type of approval for an operation. To accommodate those areas

where split operations are permitted, some of the consolidated

orders provide for a physically separated portion of the plant as

a “nonpool plant.” 

Pooling Options

Unit Pooling

Unit pooling allows 2 or more plants located in the marketing

area and operated by the same handler to qualify for pool status

as a unit by meeting the total and in-area route disposition

standard as if they were a single pool distributing plant. To

qualify as a unit, at least one of the plants in the unit -- i.e.,

the primary plant-- must qualify as a pool distributing plant on

its own standing and the other plants in the unit must process

only Class I or Class II milk products.

Unit pooling serves to accommodate and provide a flexible

regulatory approach in addressing the specialization of plant

operations. It also minimizes unintended regulatory effects that

may cause the uneconomical and inefficient movement of milk for

the sole purpose of retaining pool status. However, some

conditions need to be satisfied for unit pooling. The “other”

plant(s) of the pool unit--i.e., the plants that would not qualify

for pool status as a single plant--must be located in an

equivalent or a lower price zone than the primary pool

distributing plant. This condition is required to assure that the

transportation of milk for Class II uses will not be subsidized
through the marketwide pool and to assure pricing equity to all

handlers processing Class II products that do not use unit

pooling. Unit pooling status must be requested in writing and

approved by the market administrator for its proper implementation

and administration.

System Pooling

Supply plants and reserve supply plants provide a benefit to

the market because they are required to meet certain performance

standards in supplying the needs of the fluid market. They also

serve to balance the market. Because handlers often operate more

than one supply plant within the market, some of the merged orders

allow a single proprietary handler or one or more cooperative

associations to combine their plants into systems for the purpose

of meeting the order’s performance standards for pooling. Under

system pooling, 2 or more plants in a system can qualify for pool

status by meeting the applicable performance standards in the same

manner as a single plant. However, not all plants in a system of

supply plants must transfer or divert milk to a distributing

plant. In recognition of this fact, the supply plant definition

in § 1000.6 has been modified to conform with this provision.

Adjustment of Pooling Standards

The consolidated orders provide the market administrator with

authority to adjust shipping standards for supply plants, reserve

supply plants, balancing plants, and supply plant units if he/she

finds that such revision is necessary to encourage needed

shipments or to prevent uneconomic shipments of milk. A finding

by the market administrator that adjustments are warranted would

follow an investigation conducted on the market administrator's

own initiative or at the request of interested parties. Before

making a finding that revisions are warranted, the market

administrator would notify interested parties of this possibility

and invite data, views, and arguments. If the market

administrator determines that a revision is warranted, he/she

shall provide written notification to interested parties of such

revision at least one day before the revision goes into effect. 

This provision allows the market administrator to respond

promptly to changes in local marketing conditions and should

result in better service to the dairy industry and to the public. 

The authority given to the market administrator to make needed

adjustments in the manner specified is commensurate with the

authorities already delegated by the Secretary to the market

administrator.

As provided in the proposed rule, the market administrator

would have had the authority to adjust pooling standards for

distributing plants as well as supply plants. However, such

authority has not been provided in any of the current marketing

orders except for the Southeast, and in that market it has never
1As used in Parts 1000 through 1135, the term concentrated

milk means milk that contains not less than 25.5 percent, and not

more than 50 percent, total milk solids. It may include milk that

has been condensed or milk that has been filtered using such

methods as reverse osmosis and ultra-filtration. Concentrated

milk may be pasteurized and it may be homogenized. 

been needed. Consequently, it was concluded that any changes that

may need to be made to pool distributing plant standards can best

be handled through normal amendatory and suspension procedures.

Treatment of Concentrated Milk

An issue related to pooling that should be clarified with the

issuance of new orders is the treatment of concentrated milk that

is shipped between plants. 

Prior to the 1993 classification decision, condensed milk was

not defined as a fluid milk product. Accordingly, when condensed

milk was shipped from a supply plant to a distributing plant it

was not counted as a qualifying shipment for the purpose of

determining the pool status of the supply plant. By the same

token, when a distributing plant received a shipment of condensed

milk from another plant, the condensed milk was excluded from the

distributing plant’s receipts for the purpose of computing the

pool plant status of the distributing plant.

In the 1993 classification decision, condensed milk was

redefined as concentrated milk1 and was included in the fluid milk

product definition. An unintended consequence of this change was

that certain plants which had never been pool plants before

suddenly became pool plants because of their shipments of

condensed milk, and certain distributing plants that had been pool

plants suddenly found themselves unable to qualify as pool plants

because their receipts of “fluid milk products” were enlarged to

include their condensed milk receipts. When handlers complained

about these unforseen and unexplained changes, it was decided

administratively to continue the previous treatment for condensed

milk until the orders could be amended. 

The consolidated orders should continue this special

treatment for condensed milk. Although condensed milk

conceivably may be reconstituted for fluid use, as a practical

matter this is rarely, if ever, done. Sometimes, condensed milk

is used to fortify fluid milk, but for the most part condensed

milk is made to be used in ice cream mix or some other

manufactured dairy product.

When condensed milk is transferred from the plant of origin

to a distributing plant in the same or another order, it is

generally transferred, by agreement, for Class II or III use. 

Using this criteria as a distinguishing feature of this product,
the pool supply plant provision of each order should exclude from

qualifying shipments to distributing plants “concentrated milk

transferred, by agreement, for other than Class I use.” By the

same token, a distributing plant also should exclude from its

receipts, for pooling purposes, “concentrated milk received, by

agreement, for other than Class I use.”

Using this language will preserve the regulatory treatment

that has applied to condensed milk for many years. At the same

time, however, this language allows flexibility for different

treatment in the case of concentrated milk that is not destined

for Class II or III use.

 In recent years, there has been much greater use of

filtering equipment to remove water from milk at the farm. This

technology may be used to reduce hauling costs in shipping milk

long distances for use as fluid milk products. Although this

concentrated milk is not at present being used for fluid use, this

situation may change in the future. For this reason, it is

reasonable to provide some flexibility in handling this type of

product for both shrinkage and pooling purposes. At this point in

time, we believe that the best way to provide this flexibility is

to allow the handlers involved in making and using this product to

decide among themselves how it will be used and reported, knowing

ahead of time the shrinkage and pooling implications involved with

these decisions. Thus, if concentrated milk is purchased from

another plant by agreement for other than Class I use, the buying

handler understands that there will be no shrinkage allowance

allowed on the milk. The buying handler also knows that the

volume of concentrated milk received will not be counted as a

plant receipt for the purpose of determining its pool status.

A supply plant shipping concentrated milk for Class II use

may or may not wish to be pooled under a Federal order. If the

plant wished to be treated as a nonpool plant, concentrated milk

could be transferred for Class II or III use by agreement with the

receiving handler. In such case, the transfer of concentrated

milk would not be counted as a qualifying shipment in meeting the

pool supply plant shipping standards and the receipt of

concentrated milk at the distributing plant would not be counted

as part of the distributing plant’s receipts for purposes of

computing its total route disposition. Of course, the agreement

to transfer milk for a pre-arranged use is contingent upon the

receiving distributing plant having sufficient Class II or III

utilization to absorb these receipts. 

On the other hand, if a supply plant making concentrated milk

wished to qualify for pool status, it could simply transfer

concentrated milk to a pool distributing plant without specifying

its designated use. In such case, the shipment would count as a

qualifying shipment for the purpose of meeting the order’s pool
supply plant shipping requirements provided that the distributing

plant receiving the concentrated milk was a pool plant. Since the

receipt of concentrated milk would be counted as part of the

receiving distributing plant’s receipts in determining the

distributing plant’s pool status under the order, the plant would

have to have sufficient Class I sales to maintain its identity

with the fluid market. If the distributing plant did not have

sufficient Class I use to meet the order’s pooling standards, it

would not be qualified to have its receipts pooled under the order

and, by extension, neither would the supply plant that shipped the

concentrated milk to the distributing plant.

This regulatory flexibility for concentrated milk should

accommodate varied situations in the consolidated orders. It will

follow the historical treatment for condensed milk but, at the

same time, it will provide for new uses and treatment for other

types of concentrated milk.

Nonpool Plant

A definition is provided in all orders describing plants

which receive, process or package milk, but which do not satisfy

the standards for being a pool plant. While providing for such a

definition may appear redundant, this provision is useful to more

clearly define the extent of regulation applicable to plants. 

Nonpool plants should include a plant that is fully regulated

under another Federal order, a producer-handler plant, a partially

regulated distributing plant, an unregulated supply plant, and an

exempt plant. The definitions for these nonpool plants are not

materially different than those provided in the current orders

with the possible exception of an “exempt plant.”

Certain plants are exempt from regulation under Federal milk

orders. These plants fall into 4 categories: (1) plants that are

operated by a governmental agency which have no route disposition

in commercial channels; (2) plants operated by a college or

university that dispose of fluid milk products only through their

own facilities with no route disposition in commercial channels;

(3) plants from which the total route disposition is for

individuals or institutions for charitable purposes without

remuneration; and (4) plants that have route disposition of

150,000 pounds or less during the month. These types of plants

have little impact on the regulated market and need not be

regulated to ensure the integrity of the regulatory plan.

A number of Federal orders exempt from regulation small

distributing plants which, because of their size, do not

significantly impact competitive relationships among handlers in

the market. The level of route disposition required before an

exempt plant becomes regulated varies in the current orders. As

adopted for the merged orders, any plant with route disposition

during the month of 150,000 pounds or less would be exempt from
regulation. This limit reflects the maximum amount of fluid milk

products allowed by an exempt plant in any current Federal milk

order and ensures that plants currently exempt from regulation

will remain exempt.

Many current Federal orders also provide regulatory exemption

for a plant operated by a state or Federal governmental agency. 

For example, some states have dairy farm and plant operations that

provide milk for their prison populations. As provided herein,

regulatory exemption would be continued under the consolidated

orders unless pool plant status is requested. 

Regulatory exemption also should apply to colleges,

universities, and charitable institutions because these

institutions generally handle fluid milk products internally and

have no impact in the mainstream commercial market. However, in

the event that these entities distribute fluid milk through

commercial channels, route sales by such entities, including

government agencies, will be monitored to determine if Federal

regulation should apply.

The determination and verification of exempt plant status

will, from time to time, necessitate the need for the market

administrator to require reports and information deemed

appropriate for the sole purpose of making this determination. 

Such authority is currently provided in orders and should

continue.

Handler

Federal milk orders regulate those persons who buy milk from

dairy farmers. Such persons are called handlers under the order. 

These persons have a financial responsibility for payments to

dairy farmers for milk in accordance with its classified use. 

They must file reports with the market administrator detailing

their receipts and utilization of milk. 

The handler definition adopted for the consolidated orders

includes the operator of a pool plant, a cooperative association

that diverts milk to nonpool plants or delivers milk to pool

plants for its account, and the operator of a “nonpool plant,”

which would encompass a producer-handler, a partially regulated

distributing plant, a plant fully regulated under another Federal

order, an unregulated supply plant, and an exempt plant.

In addition, "third party" organizations that are not

otherwise regulated under provisions of an order are included in

the handler definition. This category includes any person who

engages in the business of receiving milk from any plant for

resale and distribution to wholesale and retail outlets, brokers

or others who negotiate the purchase or sale of fluid milk

products or fluid cream products from or to any plant, and persons

who, by purchase or direction, cause the milk of producers to be

picked up at the farm and/or moved to a plant. Such
intermediaries provide a service to the dairy industry. These

persons are not, however, recognized or regulated as entities

required to make minimum payments to producers. The expanded

marketing chain brought about by such intermediaries has made it

increasingly difficult for the market administrator to track the

movement of milk from farms to consumers. The revised handler

definition enables the market administrator to more readily

identify those entities.

Producer-handler

It has been a long-standing policy to exempt from full

regulation many of those entities that operate as both a producer

and a handler. Generally, a producer-handler is any person who

provides satisfactory proof to the market administrator that the

care and management of the dairy farm and other resources

necessary for own-farm production and the management and operation

of the processing plant are the personal enterprise and risk of

such person. A primary basis for exempting producer-handlers from

the pricing and pooling provisions of a milk order is that these

entities are customarily small businesses that operate essentially

in a self-sufficient manner. Also, during the history of

producer-handler exemption from full regulation there has been no

demonstration that such entities have an advantage as either

producers or handlers so long as they are responsible for

balancing their fluid milk needs and cannot transfer balancing

costs, including the cost of disposing of reserve milk supplies,

to other market participants.

The current orders have varying producer-handler definitions

that address specific marketing conditions and circumstances. For

example, they specify different limits on the amount of milk that

producer-handlers may purchase and retain their exempt status. 

Some modifications have been made to the producer-handler

provisions in the consolidated orders for standardization. 

However, no changes have been made that would intentionally

regulate a producer-handler that is currently exempt from

regulation under their current operating procedures. Because the

producer-handler provision is slightly different from one order to

the next, the specific details regarding each definition are

described in the regional discussions that follow. Any general

provision in the proposed rule, such as the phrase “or acquired

for distribution” in § 1000.44(a)(3)(iv), that would have changed

the status of a current producer-handler has been eliminated. 

Public comments were received regarding the extent of

regulation that should apply to producer-handlers. The majority

of public comments supported the status-quo regarding the

regulatory treatment of producer-handlers, emphasizing that they

should remain exempt from regulation in accordance with current

order provisions and that the provisions should be regional in
nature so as not to affect or change the current regulatory status

of producer-handlers. 

One of the public comments received proposed that the

exemption of producer-handlers from the regulatory plan of milk

orders be eliminated. This proposal is denied. In the

legislative actions taken by the Congress to amend the AMAA since

1965, the legislation has consistently and specifically exempted

producer-handlers from regulation. The 1996 Farm Bill, unlike

previous legislation, did not amend the AMAA and was silent on

continuing to preserve the exemption of producer-handlers from

regulation. However, past legislative history is replete with the

specific intent of Congress to exempt producer-handlers from

regulation. If it had been the intent of Congress to remove the

exemption, Congress would likely have spoken directly to the issue

rather than through omission of language that had, for over 30

years, specifically addressed the regulatory treatment of

producer-handlers.

Since producer-handlers are intended to be exempt from most

regulation, some means must be provided to determine and to verify

producer-handler status. Accordingly, the market administrator is

provided with the authority to require reports and other

information deemed appropriate to determine that an entity

satisfies the requirements for producer-handler status. Such

authority is currently provided in the orders and should continue.

Producer

Under all orders, producers are dairy farmers that supply the

market with milk for fluid use or who are at least capable of

doing so if necessary. Producers are eligible to share in the

revenue that accrues from marketwide pooling of milk. The

producer definitions of the individual orders are described under

the regional discussions later in this document. Responding to

regional needs, producer definitions will differ by order with

respect to the degree of association that a dairy farmer must

demonstrate with a market.

A dairy farmer may not be considered a producer under more

than one Federal milk order with respect to the same milk. If a

dairy farmer’s milk is diverted by a handler regulated under one

Federal order to a plant regulated under another Federal order,

and the milk is allocated at the receiving plant (by request of

the diverting handler) to Class II, III or IV, the dairy farmer

will maintain producer status in the original order from which

milk was diverted.

Since producer-handlers and exempt plants are specifically

exempt from Federal order pricing provisions, the term producer

should not include a producer-handler as defined in any Federal

order. Likewise, the term producer should not apply to any person

whose milk is delivered to an exempt plant, excluding producer
milk diverted to such exempt plant. Some of the new orders (See

Orders 1001, 1124, 1131, and 1134) also exclude from producer

status a dairy farmer whose milk is received at a nonpool plant as

other than producer milk. The reasons for including this

provision are explained in the regional discussions describing

those orders. 

Producer Milk

The producer milk definition identifies the milk of producers

which is eligible for inclusion in a particular marketwide pool. 

This definition is specific to each consolidated order, reflecting

the fact that marketing conditions differ among regions.

In general, the definition of producer milk for all

consolidated orders continues to include the milk of a producer

which is received at a pool plant or which is received by a

cooperative association in its capacity as a handler. Most

current orders consider milk to be “received” when it is

physically unloaded at the plant and the consolidated orders would

continue that treatment.

In order to promote the efficient handling of milk, all

orders currently allow a handler to move producer milk, within

certain specified limits, from a producer’s farm to a plant other

than the handler’s own plant. This is referred to as a

“diversion” of milk. Under the consolidated orders, the

definition of producer milk allows unlimited diversions to other

pool plants, thereby providing maximum flexibility in efficiently

supplying the fluid market.

Under some orders, unlimited diversions to nonpool plants

would also be allowed once a dairy farmer has become associated

with a particular order. Under other orders, however, a producer

would be required to “touch base” at a pool plant one or more

times each month and, in addition, aggregate diversion limits may

be applied to a handlers’ total diversions. The specific touch

base and diversion limits are described in the regional

discussions pertaining to each order.

Even for orders without any diversion limits, there is a

practical limit to how much milk may be diverted from a pool plant

because of the pooling standards that must be met. For a pool

supply plant, for example, there is a standard computed by

dividing the amount of milk shipped to distributing plants by a

plant’s total receipts. As provided in the orders, “receipts”

include milk that is physically received at the plant as well as

diverted to nonpool plants. This inclusion of diverted milk in a

plant’s receipts automatically limits the amount of milk that may

be diverted by those plants. Thus, the maximum quantity of milk

that such plants would be able to divert and still maintain their

pool plant status would be 100 percent less the pool plant

shipping standards for the month. 
This treatment of diverted milk will mitigate the need for

suspending order diversion limitations, an action that is quite

common in some of the current orders. Unlimited diversions for

many of the new orders will allow for maximum efficiency in

balancing the market’s milk supply. The market administrator’s

ability to adjust shipping percentages for pool supply plants,

pool reserve supply plants, and balancing plants will ensure that

an adequate supply of milk is available for the fluid market

without the imposition of diversion limits.

While a one-time producer “touch base” standard and virtually

unlimited diversions are appropriate for most of the consolidated

Federal orders, they are not appropriate for certain “deficit”

markets in the Southeast. For these orders, touch base

requirements and diversion limits provide another tool to ensure

that an adequate supply of fluid milk is available to meet the

markets’ needs. The specific standards for these orders are

discussed in the regional section of this document.

In order to provide regulatory flexibility and marketing

efficiencies, all of the new orders having diversion limits allow

the market administrator to increase or decrease these limits on

relatively short notice. This provision currently exists in some

Federal orders and has proven to be a responsive, efficient, and

effective way to deal with rapidly changing marketing conditions.

Cooperative Association

All current orders provide a definition for dairy farmer

cooperative associations that market milk on behalf of their dairy

farmer members. Providing for a uniform definition of a

cooperative association facilitates the administration of the

various order provisions as they apply to such producer

organizations and recognizes the unique standing granted to dairy

farmer cooperatives under the Capper-Volstead Act. Dairy farmer

cooperatives are responsible for marketing the majority of the

milk supplied to regulated handlers under the Federal order

system. 

As provided herein, a cooperative association means any

cooperative marketing association of producers which the Secretary

determines, after application for such recognition by the

cooperative, is qualified as such under the provisions of the Act

of Congress of February 18, 1922, as amended, known as the

"Capper-Volstead Act". Additionally, the new orders continue to

require that a cooperative association have full authority in the

sale of the milk of its members and that it be engaged in making

collective sales or marketings of milk or milk products for its

dairy farmer members.

Several current orders provide a definition for a federation

of 2 or more cooperative associations. As adopted here, all

consolidated orders recognize a federation of cooperatives as
satisfying the cooperative definition for the purposes of

determining milk payments and pooling. Individual cooperatives of

a federation of cooperatives must also meet the criteria as set

forth for individual cooperative associations and their

federations as incorporated under state laws.

Handler Reports

All current orders require handlers to submit monthly reports

detailing the sources and uses of milk and milk products so that

market average use values, or blend prices, can be determined and

administered. Payroll reports and other reports required by the

market administrator are also provided for in the orders. The

order language for the consolidated orders is similar to that

contained in current orders. The dates when reports are due in

the market administrator’s office differ slightly by order

according to custom and industry practice.

Announcements by the Market Administrator

In the course of administering the order, the market

administrator is required to make several announcements each month

with respect to classification, class prices and component prices,

an “equivalent price” when necessary, and various producer prices. 

As adopted here, these provisions are uniform and are nearly

identical to current order provisions, with the exception of

Section 62 (Announcement of producer prices), which differs to

some extent among orders depending on the degree of component

pricing used in the order.

Producer-settlement Fund 

In all of the current and consolidated orders, handlers are

required to pay minimum class prices for the milk received from

producers. These proceeds are blended through the marketwide pool

so that producers are returned a uniform, or blend, price for

their milk. The mechanism for the equalization of a handler’s use

value of milk is the producer-settlement fund. It is established

and administered by the market administrator for each order.

The producer-settlement fund ensures that all handlers are

able to return the market blend price to producers whose milk was

pooled under the order. Payments into the producer-settlement

fund are made each month by handlers whose total classified use

value of milk exceeds the value of such milk calculated at the

uniform price (or at component prices for those orders with

component pricing). Similarly, payments out of the producersettlement fund are made each month to any handler whose use value

is below the value of milk at the uniform price or component

prices, as the case may be. The transfer of funds enables

handlers with a use value below the average for the market to pay

their producers the same uniform price as handlers whose Class I

utilization exceeds the market average. This provision is uniform

for all consolidated orders.
The consolidated orders vary with respect to dates for

payments to the producer-settlement fund, due largely to industry

practices and regional preferences. Each consolidated order

provides for payment dates, and they are specific for each

consolidated order. 

In view of the need to make timely payment to handlers from

the producer-settlement fund, it is essential that money due the

fund be received by the due date. Accordingly, under all of the

new orders payment to the producer-settlement fund will be

considered made upon receipt by the market administrator. 

The new orders specify that payment cannot be received on a

nonbusiness day. Therefore, if the due date for a payment,

including a payment to or from the producer-settlement fund, falls

on a Saturday, Sunday, or national holiday, the payment would not

be due until the next business day. This is specified in

§ 1000.90 of the General Provisions.

Payments to Producers and Cooperative Associations

The AMAA provides that handlers must pay to all producers and

producer associations the uniform price. The existing orders

generally allow proper deductions authorized by the producer in

writing. Proper deductions are those that are unrelated to the

minimum value of milk in the transaction between the producer and

handler. Producer associations are allowed by the statue to

“reblend” their payments to their producer members. The Capper

Volstead Act and the AMAA make it clear that cooperative

associations have a unique role in this regard.

The payment provisions to producers and cooperatives for the

consolidated orders vary with respect to payment frequency,

timing, and amount. These differences are generally consistent

with current order provisions and with industry practices and

customs in each of the new marketing areas. 

Each of the new orders will require handlers to make at least

one partial payment to producers in advance of the announcement of

the applicable uniform prices. The Florida order will require 2

partial payments, mirroring the payment schedule now provided in

the 3 separate Florida orders. 

The amount of the partial payment varies among the new

orders, reflecting the anticipated uniform price. Thus, for

example, in the Upper Midwest order, the partial payment rate for

milk received during the first 15 days of the month will be not

less than the lowest announced class price for the preceding

month. By comparison, the partial payment for the Florida order

for milk received during the first 15 days of the month will be at

a rate that is not less than 85 percent of the preceding month’s

uniform price, adjusted for plant location.

The final payment for milk under the new orders will be

required to be made so that it is received by producers no later
than 2 days after the required pay-out date of monies from the

producer-settlement fund. 

Cooperatives will be paid by handlers for bulk milk and skim

milk on the terms described for individual producers except that

payment will be due one day earlier. Providing for an earlier

payment date for cooperative associations is warranted because it

will permit the cooperative association the time needed to

distribute payments to individual producer members. The

cooperative payment language in each of the consolidated orders

has been expanded to include bulk milk and skim sold by

cooperatives from their pool plants as well as by cooperatives

acting as handlers for milk delivered directly from producers’

farms.

When bulk milk is received by transfer from a cooperative’s

pool plant, a minimum payment should be required for such milk

just as if it were producer milk received directly from producers’

farms. Many, but not all, of the current orders have such a

provision.

For Class I bulk milk that is received from a cooperative’s

pool plant, the minimum Class I price level for such milk should

be the price applicable at the location of the receiving handler’s

plant. In the case of such transfers, it is presumed that milk

will move from lower-priced areas to higher-priced areas. Under

these circumstances, part of the transportation cost in moving the

milk is covered by the difference in the Class I prices at the

receiving plant and shipping plant.

Pricing Class I transfers at the receiving plant’s location

ensures that a handler would not have an incentive to receive more

distant plant milk instead of closer milk directly from producers’

farms. It also ensures that all similarly-located pool plants

will pay the same minimum prices for their receipts regardless of

whether the milk comes from another plant or directly from

producers. Finally, it ensures that the handler receiving

transferred milk pays at least a portion of the transportation

cost to move the milk to its plant. Since transportation cost is

likely to exceed the difference in prices between the transferor

and transferee plants, the difference in cost will have to be made

up through over-order premiums. 

All of the payment dates are receipt dates. Since payment

cannot be received on a non-business day, payment dates that fall

on a Saturday, Sunday, or national holiday will be delayed until

the next business day. While this has the effect of delaying

payment to cooperatives and producers, the delay is offset by the

shift from “date of payment” to “date of payment receipt.”

Minimum Payments to Producers

In a proceeding involving the current Carolina, Southeast,

Louisville-Lexington-Evansville, and the former Tennessee Valley
Federal milk orders (Orders 5, 7, 46, and 11, respectively), a

proposal was made to clarify what constitutes a minimum payment to

producers. The proposal was recommended by Hunter Farms (Hunter)

and Milkco Inc. (Milkco), 2 handlers regulated under the current

Carolina order. Under the proposal, a handler (except a

cooperative acting in its capacity as a handler pursuant to

paragraph 9(b) or 9(c)) may not reduce its obligations to

producers or cooperatives by permitting producers or cooperatives

to provide services which are the responsibility of the handler. 

According to the Hunter/Milkco proposal, such services include:

(1) preparation of producer payroll; (2) conduct of screening

tests of tanker loads of milk; and (3) any services for processing

or marketing of raw milk or marketing of packaged milk by the

handler.

At the May 1996 hearing, representatives of Hunter and Milkco

testified that both handlers receive milk from cooperative

associations and Piedmont Milk Sales, a marketing agent handling

the milk of non-member producers. The Hunter representative

explained that due to competitive marketing conditions in the

Southeast in late 1994 and early 1995 handlers were able to

purchase milk supplies at Federal order minimum prices without any

over-order premiums being charged. As a result of the absence of

over-order premiums, the representative stated, Hunter received

underpayment notices from the market administrator on milk that it

had received from Piedmont Milk Sales. 

Hunter argued that the problem of what constitutes a minimum

payment to producers should be clarified to preclude another

underpayment situation should premiums again disappear in the

future. If this issue is not resolved, according to Hunter, it

will suffer a loss of milk sales and its producers will receive

lower prices. Hunter stated that the current policy is

discriminatory and unfair and that everyone would benefit from a

clarification of the rules defining Federal order minimum prices. 

Based on the testimony presented at the public hearing and

comments received, the Department issued a final decision on

July 16, 1998 (63 FR 39039), denying the Hunter/Milkco proposal. 

However, the decision stated that this issue should be revisited

as part of Federal order reform. 

In the proposed rule for Federal order reform, interested

parties were invited to comment on this issue. Only one Federal

order reform comment, besides Hunter/Milkco’s, discussed this

issue. This comment letter, filed by the same law firm that

represents Hunter/Milkco, expressed sentiments nearly identical to

those that have been expressed by Hunter/Milkco.

Based on our review of these comments, we continue to believe

that incorporation of Hunter/Milkco’s proposed language in the

consolidated Federal orders will not necessarily solve the handler
equity problem but could create a host of additional problems. 

For the reasons stated in the aforementioned final decision, the

proposal is again denied for the consolidated orders.

Payment Obligation of a Partially Regulated Distributing Plant

All current and consolidated orders provide a method for

determining the payment obligations due to producers by handlers

that operate plants which are not fully regulated under any

Federal order. These unregulated handlers are not required under

the scope of Federal milk order regulation to account to dairy

farmers for their milk at classified prices or to return a minimum

uniform price to producers who have supplied the handler with

milk. However, such handlers may sell fluid milk on routes in a

regulated area in competition with handlers who are fully

regulated. Therefore, the regulatory plan of Federal milk orders

provides a minimum degree of regulation to all handlers who have

routes sales in a regulated marketing area. This is necessary so

that classified pricing and pooling provisions of an order can be

maintained. It is also necessary so that orderly marketing

conditions can be assured with respect to handlers being charged

the classified value under an order for the milk they purchase

from dairy farmers. Without this provision, milk prices in an

order would not be uniform among handlers competing for sales in

the marketing area, a milk pricing requirement of the AMAA. 

There are 3 regulatory options available to a partially

regulated handler. First, the handler can purchase Class I milk

that is priced under a Federal order in an amount equal to, or in

excess of, quantities sold in the marketing area. Second, a

payment may be made by the partially regulated handler into the

producer-settlement fund of the regulated market at a rate equal

to the difference between the Class I price and the uniform price

of the regulated market. Finally, the operator of a partially

regulated plant can demonstrate that the payment for its total

supply of milk received from dairy farmers was equal to the amount

which the partially regulated plant would have been required to

pay if the plant had been fully regulated. This amount may be

paid entirely to the dairy farmers that supplied the handler or in

part to those dairy farmers with the balance paid into the

producer-settlement fund of the regulated market. 

The regulatory options described above and the payment option

for reconstituted milk have worked well in the current orders and

are continued uniformly in § 1000.76 for the consolidated orders.

Adjustment of Accounts

All current orders provide for the market administrator to

adjust, based on verification of a handler's reports, books,

records, or accounts, any amount due to or from the market

administrator, or to a producer or a cooperative association. 

This provision is continued in the consolidated orders. The
provision requires the market administrator to provide prompt

notification to a handler of any amount so due and requires

payment adjustment to be made on or before the next date for

making payments as set forth in the provisions under which the

error(s) occurred.

Charges on Overdue Accounts

All current orders provide for an additional charge to

handlers who fail to make required payments to the

producer-settlement fund when due. Such payments include payments

to the producer-settlement fund, payments to producers and

cooperative associations, payments by a partially regulated

distributing plant, assessments for order administration and

marketing service, and certain other payment obligations in orders

with specialized provisions such as transportation credits. This

should continue to be provided for in the consolidated orders.

In order to discourage late payments, a 1.0 percent charge

per month is incorporated in the consolidated orders. This rate

represents the mid-point in the range of charges by all orders

presently. Overdue charges shall begin the day following the date

an obligation was due. Any remaining amount due will be increased

at the rate of 1.0 percent on the corresponding day of each month

until the obligation is paid in full.

All overdue charges would accrue to the administrative

assessment fund. The late-payment charge is to be a penalty that

is meant to induce compliance with the payment terms of the order. 

If late-payment charges for monies due on producer milk were to

accrue to the balance owed to either producers, cooperatives or

producers/cooperatives via the producer-settlement fund, it could

result in such producers and cooperatives being less concerned

whether they are paid on time. By placing late-payment charges in

the administrative fund, however, cooperatives and producers would

not be placed in a position where they would prefer to be paid

several days late so that they would receive the late-payment

charges (or increase the level of producer prices due to late

payment fee accrual to the producer-settlement fund). This is of

particular concern in markets with a single dominant cooperative. 

Additionally, by having late-payment fees accrue to the

administrative fund, monies are made available to enforce latepayment provisions that would otherwise have to be generated

through handlers’ administrative assessments. 

Assessment for Order Administration

The AMAA provides that the cost of order administration shall

be financed by an assessment on handlers. Under the consolidated

orders, a maximum rate of 5 cents per hundredweight is provided. 

This assessment would apply to all of a handler's receipts pooled

under the order. 

Deduction for Marketing Services
As in most current orders, the consolidated orders provide

for the furnishing of marketing services to producers for whom

cooperative associations do not perform services. Such services

include providing market information and establishing or verifying

weights, samples, and tests of milk received from such producers. 

In accordance with the Act, a marketing services provision must

benefit all nonmember producers under the order. 

The market administrator may contract with a qualified agent,

including a cooperative association, to provide such services. 

The cost of such services should be borne by the producers for

whom the services are provided. Accordingly, each handler will be

required to deduct a maximum of 7 cents per hundredweight from

amounts due each producer for whom a cooperative association is

not providing such services. All amounts deducted must be paid to

the market administrator not later than the due date for payments

to the producer-settlement fund.