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PART 1124 - MILK IN THE PACIFIC NORTHWEST MARKETING AREA

Subpart - Order Regulating Handling

GENERAL PROVISIONS

Sec. 

1124.1 General provisions. 

DEFINITIONS 

1124.2 Pacific Northwest marketing area.

1124.3 Route disposition.

1124.4 Plant.

1124.5 Distributing plant.

1124.6 Supply plant. 

1124.7 Pool plant.

1124.8 Nonpool plant.

1124.9 Handler.

1124.10 Producer-handler. 

1124.11 Cooperative reserve supply unit.

1124.12 Producer. 

1124.13 Producer milk.

1124.14 Other source milk.

1124.15 Fluid milk product.

1124.16 Fluid cream product.

1124.17 [Reserved]

1124.18 Cooperative association.

1124.19 Commercial food processing establishment.

HANDLER REPORTS

1124.30 Reports of receipts and utilization. 

1124.31 Payroll reports. 

1124.32 Other reports. 

CLASSIFICATION OF MILK

1124.40 Classes of utilization.

1124.41 [Reserved]

1124.42 Classification of transfers and diversions.

1124.43 General classification rules.

1124.44 Classification of producer milk.

1124.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES 

1124.50 Class prices, component prices, and advanced pricing

 factors. 

1124.51 Class I differential and price. 

1124.52 Adjusted Class I differentials.

1124.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1124.54 Equivalent price. 
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PRODUCER PRICE DIFFERENTIAL

1124.60 Handler's value of milk.

1124.61 Computation of producer price differential.

1124.62 Announcement of producer prices.
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PAYMENTS FOR MILK 

1124.70 Producer-settlement fund. 

1124.71 Payments to the producer-settlement fund.

1124.72 Payments from the producer-settlement fund. 

1124.73 Payments to producers and to cooperative associations. 

1124.74 [Reserved]

1124.75 Plant location adjustments for producer milk and

 nonpool milk.

1124.76 Payments by a handler operating a partially regulated

 distributing plant.

1124.77 Adjustment of accounts.

1124.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION 

1124.85 Assessment for order administration. 

1124.86 Deduction for marketing services.

 Authority: 7 U.S.C. 601 - 674. 

Subpart - Order Regulating Handling

GENERAL PROVISIONS

§ 1124.1 General provisions.

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

chapter apply to and are hereby made a part of this order. In

this part 1124, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1124.2 Pacific Northwest marketing area.

The marketing area means all territory within the bounds of

the following states and political subdivisions, including all

piers, docks, and wharves connected therewith and all craft moored

thereat, and all territory occupied by government (municipal,

State, or Federal) reservations, installations, institutions, or

other similar establishments if any part thereof is within any of

the listed states or political subdivisions:

Washington

All of the State of Washington.

Idaho Counties

Benewah, Bonner, Boundary, Kootenai, Latah, and Shoshone.

Oregon Counties

Benton, Clackamas, Clatsop, Columbia, Coos, Crook, Curry,

Deschutes, Douglas, Gilliam, Hood River, Jackson, Jefferson,

Josephine, Klamath, Lake, Lane, Lincoln, Linn, Marion, Morrow,

Multnomah, Polk, Sherman, Tillamook, Umatilla, Wasco, Washington,

Wheeler, and Yamhill.

§ 1124.3 Route disposition.

See § 1000.3.
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§ 1124.4 Plant.

See § 1000.4.

§ 1124.5 Distributing plant.

See § 1000.5.
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§ 1124.6 Supply plant.

See § 1000.6.

§ 1124.7 Pool plant.

Pool plant means a plant, unit of plants, or a system of

plants as specified in paragraphs (a) through (f) of this section,

but excluding a plant specified in paragraph (h) of this section. 

The pooling standards described in paragraph (c) of this section

are subject to modification pursuant to paragraph (g) of this

section:

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

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

7(b) of any other Federal milk order, from which during the month

25 percent or more of the total quantity of fluid milk products

physically received at the plant (excluding concentrated milk

received from another plant by agreement for other than Class I

use) are disposed of as route disposition or are transferred in

the form of packaged fluid milk products to other distributing

plants. At least 25 percent of such route disposition and

transfers must be to outlets in the marketing area. 

(b) Any distributing plant located in the marketing area

which during the month processed at least 25 percent of the total

quantity of fluid milk products physically received at the plant

(excluding concentrated milk received from another plant by

agreement for other than Class I use) into ultra-pasteurized or

aseptically-processed fluid milk products.

(c) A supply plant from which during any month not less than

20 percent of the total quantity of milk that is physically

received at such plant from dairy farmers eligible to be producers

pursuant to § 1124.12 (excluding milk received at such plant as

diverted milk from another plant, which milk is classified other

than Class I under this order and is subject to the pricing and

pooling provisions of this or another order issued pursuant to the

Act) or diverted as producer milk to another plant pursuant to §

1124.13, is shipped in the form of a fluid milk product (excluding

concentrated milk transferred by agreement for other than Class I

use) to a pool distributing plant or is a route disposition in the

marketing area of fluid milk products processed and packaged at

such plant;

(1) A supply plant that has qualified as a pool plant during

each of the immediately preceding months of September through

February shall continue to so qualify in each of the following

months of March through August, unless the plant operator files a

written request with the market administrator that such plant not

be a pool plant, such nonpool status to be effective the first
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month following such request and thereafter until the plant

qualifies as a pool plant on the basis of milk shipments;

(2) A cooperative association that operates a supply plant

may include as qualifying shipments its deliveries to pool

distributing plants directly from farms of producers pursuant to

§ 1000.9(c);

(3) A pool plant operator may include as qualifying

shipments milk diverted to pool distributing plants pursuant to

§ 1124.13(d);

(4) No plant may qualify as a pool plant due to a reduction

in the shipping percentage pursuant to paragraph (g) of this

section unless it has been a pool supply plant during each of the

immediately preceding 3 months.

(d) - (f) [Reserved]

(g) The applicable shipping percentage of paragraph (c) of

this section may be increased or decreased by the market

administrator if the market administrator finds that such

adjustment is necessary to encourage needed shipments or to

prevent uneconomic shipments. Before making such a finding, the

market administrator shall investigate the need for adjustment

either on the market administrator’s own initiative or at the

request of interested parties if the request is made in writing at

least 15 days prior to the month for which the requested revision

is desired effective. If the investigation shows that an

adjustment of the shipping percentages might be appropriate, the

market administrator shall issue a notice stating that an

adjustment is being considered and invite data, views and

arguments. Any decision to revise an applicable shipping

percentage must be issued in writing at least one day before the

effective date.

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

plants:

(1) A producer-handler as defined under any Federal order;

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

(3) A plant located within the marketing area and qualified

pursuant to paragraph (a) of this section which meets the pooling

requirements of another Federal order, and from which more than 50

percent of its route disposition has been in the other Federal

order marketing area for 3 consecutive months;

(4) A plant located outside any Federal order marketing area

and qualified pursuant to paragraph (a) of this section that meets

the pooling requirements of another Federal order and has had

greater route disposition in such other Federal order’s marketing

area for 3 consecutive months;
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(5) A plant located in another Federal order marketing area

and qualified pursuant to paragraph (a) of this section that meets

the pooling requirements of such other Federal order and does not

have a majority of its route distribution in this marketing area

for 3 consecutive months or if the plant is required to be

regulated under such other Federal order without regard to its

route disposition in any other Federal order marketing area; and

(6) A plant qualified pursuant to paragraph (c) of this

section which also meets the pooling requirements of another

Federal order and from which greater qualifying shipments are made

to plants regulated under the other Federal order than are made to

plants regulated under this order, or the plant has automatic

pooling status under the other Federal order.

§ 1124.8 Nonpool plant.

See § 1000.8.

§ 1124.9 Handler.

See § 1000.9.

§ 1124.10 Producer-handler.

Producer-handler means a person who operates a dairy farm and

a distributing plant from which there is route disposition within

the marketing area during the month and who the market

administrator has designated a producer-handler after determining

that all of the requirements of this section have been met. 

(a) Requirements for designation. Designation of any person

as a producer-handler by the market administrator shall be

contingent upon meeting the conditions set forth in paragraphs

(a)(1) through (4) of this section. Following the cancellation of

a previous producer-handler designation, a person seeking to have

his/her producer-handler designation reinstated must demonstrate

that these conditions have been met for the preceding month.

(1) The care and management of the dairy animals and other

resources and facilities designated in paragraph (b)(1) of this

section necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)

are under the complete and exclusive control and management of the

producer-handler and are operated as the producer-handler’s own

enterprise and at its own risk.

(2) The plant operation designated in paragraph (b)(2) of

this section at which the producer-handler processes and packages,

and from which it distributes, its own milk production is under

the complete and exclusive control and management of the producerhandler and is operated as the producer-handler’s own enterprise

and at its sole risk.

(3) The producer-handler neither receives at its designated

milk production resources and facilities nor receives, handles,
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processes, or distributes at or through any of its designated milk

handling, processing, or distributing resources and facilities

other source milk products for reconstitution into fluid milk

products or fluid milk products derived from any source other

than:

(i) Its designated milk production resources and facilities

(own farm production);

(ii) Pool handlers and plants regulated under any Federal

order within the limitation specified in paragraph (c)(2) of this

section; or

(iii) Nonfat milk solids which are used to fortify fluid milk

products.

(4) The producer-handler is neither directly nor indirectly

associated with the business control or management of, nor has a

financial interest in, another handler's operation; nor is any

other handler so associated with the producer-handler's operation.

(b) Designation of resources and facilities. Designation of

a person as a producer-handler shall include the determination of

what shall constitute the person’s milk production, handling,

processing, and distribution resources and facilities, all of

which shall be considered an integrated operation.

(1) Milk production resources and facilities shall include

all resources and facilities (milking herd(s), buildings housing

such herd(s), and the land on which such buildings are located)

used for the production of milk which are directly or indirectly,

solely or partially, owned, operated, or controlled by the

producer-handler, in which the producer-handler in any way has an

interest, including any contractual arrangement, or which are

directly, indirectly, or partially owned, operated, or controlled

by any partner or stockholder of the producer-handler. However,

for purposes of this paragraph, any such milk production resources

and facilities which do not constitute an actual or potential

source of milk supply for the producer-handler's operation shall

not be considered a part of the producer-handler's milk production

resources and facilities.

(2) Milk handling, processing, and distribution resources and

facilities shall include all resources and facilities (including

store outlets) used for handling, processing, and distributing

fluid milk products which are solely or partially owned by, and

directly or indirectly operated or controlled by, the producerhandler or in which the producer-handler in any way has an

interest, including any contractual arrangement, or over which the

producer-handler directly or indirectly exercises any degree of

management or control.
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(3) All designations shall remain in effect until canceled

pursuant to paragraph (c) of this section.

(c) Cancellation. The designation as a producer-handler

shall be canceled upon determination by the market administrator

that any of the requirements of paragraphs (a)(1) through (4) of

this section are not continuing to be met, or under any of the

conditions described in paragraphs (c)(1) and (2) of this section. 

Cancellation of a producer-handler’s status pursuant to this

paragraph shall be effective on the first day of the month

following the month in which the requirements were not met or the

conditions for cancellation occurred. 

(1) Milk from the milk production resources and facilities

of the producer-handler, designated in paragraph (b)(1) of this

section, is delivered in the name of another person as producer

milk to another handler.

(2) The producer-handler handles fluid milk products derived

from sources other than the milk production facilities and

resources designated in paragraph (b)(1) of this section, except

that it may receive at its plant, or acquire for route

disposition, fluid milk products from fully regulated plants and

handlers under any Federal order if such receipts do not exceed

150,000 pounds monthly. This limitation shall not apply if the

producer-handler’s own farm production is less than 150,000 pounds

during the month.

(d) Public announcement. The market administrator shall

publicly announce:

(1) The name, plant location(s), and farm location(s) of

persons designated as producer-handlers;

(2) The names of those persons whose designations have been

canceled; and

(3) The effective dates of producer-handler status or loss of

producer-handler status for each. Such announcements shall be

controlling with respect to the accounting at plants of other

handlers for fluid milk products received from any producerhandler.

(e) Burden of establishing and maintaining producer-handler

status. The burden rests upon the handler who is designated as a

producer-handler to establish through records required pursuant to

§ 1000.27 that the requirements set forth in paragraph (a) of this

section have been and are continuing to be met, and that the

conditions set forth in paragraph (c) of this section for

cancellation of designation do not exist.

§ 1124.11 Cooperative reserve supply unit.

Cooperative reserve supply unit means any cooperative

association or its agent that is a handler pursuant to § 1000.9(c)
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that does not own or operate a plant, if such cooperative has been

qualified to receive payments pursuant to § 1124.73 and has been a

handler of producer milk under this or its predecessor order

during each of the 12 previous months, and if a majority of the

cooperative’s member producers are located within 125 miles of a

plant described in § 1124.7(a). A cooperative reserve supply unit

shall be subject to the following conditions:

(a) The cooperative shall file a request with the market

administrator for cooperative reserve supply unit status at least

15 days prior to the first day of the month in which such status

is desired to be effective. Once qualified as a cooperative

reserve supply unit pursuant to this paragraph, such status shall

continue to be effective unless the cooperative requests

termination prior to the first day of the month that change of

status is requested, or the cooperative fails to meet all of the

conditions of this section.

(b) The cooperative reserve supply unit supplies fluid milk

products to pool distributing plants located within 125 miles of a

majority of the cooperative’s member producers in compliance with

any announcement by the market administrator requesting a minimum

level of shipments as further provided below:

(1) The market administrator may require such supplies of

bulk fluid milk from cooperative reserve supply units whenever the

market administrator finds that milk supplies for Class I use are

needed for plants defined in § 1124.7(a) or (b). Before making

such a finding, the market administrator shall investigate the

need for such shipments either on the market administrator’s own

initiative or at the request of interested persons if the request

is made in writing at least 15 days prior to the month for which

the requested revision is desired effective. If the market

administrator’s investigation shows that such shipments might be

appropriate, the market administrator shall issue a notice stating

that a shipping announcement is being considered and inviting

data, views and arguments with respect to the proposed shipping

announcement. Any decision on the required shipment of bulk fluid

milk from cooperative reserve supply units must be made in writing

at least one day before the effective date.

(2) Failure of a cooperative reserve supply unit to comply

with any announced shipping requirements, including making any

significant change in the unit’s marketing operation that the

market administrator determines has the impact of evading or

forcing such an announcement, shall result in immediate loss of

cooperative reserve supply unit status until such time as the unit

has been a handler pursuant to § 1000.9(c) for at least 12

consecutive months.
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§ 1124.12 Producer.

(a) Except as provided in paragraph (b) of this section,

producer means any person who produces milk approved by a duly

constituted regulatory agency for fluid consumption as Grade A

milk and whose milk (or components of milk) is:

(1) Received at a pool plant directly from the producer or

diverted by the plant operator in accordance with § 1124.13; or

(2) Received by a handler described in § 1000.9(c).

(b) Producer shall not include:

(1) A producer-handler as defined in any Federal order;

(2) A dairy farmer whose milk is received at an exempt

plant, excluding producer milk diverted to the exempt plant

pursuant to § 1124.13(e);

(3) A dairy farmer whose milk is received by diversion at a

pool plant from a handler regulated under another Federal order if

the other Federal order designates the dairy farmer as a producer

under that order and that milk is allocated by request to a

utilization other than Class I;

(4) A dairy farmer whose milk is reported as diverted to a

plant fully regulated under another Federal order with respect to

that portion of the milk so diverted that is assigned to Class I

under the provisions of such other order; and

(5) A dairy farmer whose milk was received at a nonpool

plant during the month from the same farm as other than producer

milk under this or any other Federal order. Such a dairy farmer

shall be known as a dairy farmer for other markets.

§ 1124.13 Producer milk.

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

components of skim milk), including nonfat components, and

butterfat in milk of a producer that is:

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

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

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

plant where it is first physically received;

(b) Received by a cooperative reserve supply unit described

in § 1124.11. All milk received pursuant to this paragraph shall

be priced at the location of the plant where it is first

physically received and shall not be subject to the conditions

specified in paragraph (e) of this section; 

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

of the quantity delivered to pool plants;

(d) Diverted by a pool plant operator to another pool plant. 

Milk so diverted shall be priced at the location of the plant to

which diverted; or
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(e) Diverted by the operator of a pool plant or a

cooperative association described in § 1000.9(c), excluding a 

cooperative reserve supply unit described in § 1124.11, to a

nonpool plant, subject to the following conditions:

(1) Of the quantity of producer milk received during the

month (including diversions, but excluding the quantity of

producer milk received from a handler described in § 1000.9(c))

the handler diverts to nonpool plants not more than 80 percent

during the months of September through February, and not more than

99 percent during the months of March through August;

(2) Two or more handlers described in § 1000.9(c) may have

their allowable diversions computed on the basis of their combined

deliveries of producer milk which they caused to be delivered to

pool plants or diverted during the month if each has filed a

request in writing with the market administrator before the first

day of the month the agreement is to be effective. The request

shall specify the basis for assigning overdiverted milk to the

producer deliveries of each according to a method approved by the

market administrator. 

(3) Diverted milk shall be priced at the location of the

plant to which diverted;

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

paragraph (e)(1) of this section shall not be producer milk. If

the diverting handler or cooperative association fails to

designate the dairy farmers’ deliveries that are not to be

producer milk, no milk diverted by the handler or cooperative

association during the month to a nonpool plant shall be producer

milk. In the event some of the milk of any producer is determined

not to be producer milk pursuant to this paragraph, other milk

delivered by such producer as producer milk during the month will

not be subject to § 1124.12(b)(5); and

(5) The applicable diversion limits in paragraph (e)(1) of

this section may be increased or decreased by the market

administrator if the market administrator finds that such revision

is necessary to assure orderly marketing and efficient handling of

milk in the marketing area. Before making such a finding, the

market administrator shall investigate the need for the revision

either on the market administrator’s own initiative or at the

request of interested persons if the request is made at least 15

days prior to the month for which the requested revision is

desired effective. If the investigation shows that a revision

might be appropriate, the market administrator shall issue a

notice stating that the revision is being considered and inviting

written data, views, and arguments. Any decision to revise an
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applicable percentage must be issued in writing at least one day

before the effective date.

§ 1124.14 Other source milk.

See § 1000.14.

§ 1124.15 Fluid milk product.

See § 1000.15.

§ 1124.16 Fluid cream product.

See § 1000.16.

§ 1124.17 [Reserved]

§ 1124.18 Cooperative association.

See § 1000.18.

§ 1124.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1124.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 9th day

after the end of the month, in the detail and on the prescribed

forms, as follows:

(a) Each handler that operates a pool plant pursuant to

§ 1124.7 shall report for each of its operations the following

information:

(1) Product pounds, pounds of butterfat, pounds of protein,

and pounds of solids-not-fat other than protein (other solids)

contained in or represented by:

(i) Receipts of producer milk, including producer milk

diverted by the reporting handler, from sources other than

handlers described in § 1000.9(c); and

(ii) Receipts of milk from handlers described in

§ 1000.9(c);

(2) Product pounds and pounds of butterfat contained in:

(i) Receipts of fluid milk products and bulk fluid cream

products from other pool plants;

(ii) Receipts of other source milk; and

(iii) Inventories at the beginning and end of the month of

fluid milk products and bulk fluid cream products;

(3) The utilization or disposition of all milk and milk

products required to be reported pursuant to this paragraph; and

(4) Such other information with respect to the receipts and

utilization of skim milk, butterfat, milk protein, and other

nonfat solids, as the market administrator may prescribe.

(b) Each handler operating a partially regulated

distributing plant shall report with respect to such plant in the

same manner as prescribed for reports required by paragraph (a) of

this section. Receipts of milk that would have been producer milk
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if the plant had been fully regulated shall be reported in lieu of

producer milk. The report shall show also the quantity of any

reconstituted skim milk in route disposition in the marketing

area.

(c) Each handler described in § 1000.9(c) shall report:

(1) The product pounds, pounds of butterfat, pounds of

protein, and the pounds of solids-not-fat other than protein

(other solids) contained in receipts of milk from producers; and

(2) The utilization or disposition of such receipts.

(d) Each handler not specified in paragraphs (a) through (c)

of this section shall report with respect to its receipts and

utilization of milk and milk products in such manner as the market

administrator may prescribe.

§ 1124.31 Payroll reports.

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

each handler that operates a pool plant pursuant to § 1124.7 and

each handler described in § 1000.9(c) shall report to the market

administrator its producer payroll for the month, in the detail

prescribed by the market administrator, showing for each producer

the information described in § 1124.73(f).

(b) Each handler operating a partially regulated

distributing plant who elects to make payment pursuant to

§ 1000.76(b) shall report for each dairy farmer who would have

been a producer if the plant had been fully regulated in the same

manner as prescribed for reports required by paragraph (a) of this

section.

§ 1124.32 Other reports.

In addition to the reports required pursuant to §§ 1124.30

and 1124.31, each handler shall report any information the market

administrator deems necessary to verify or establish each

handler’s obligation under the order.

CLASSIFICATION OF MILK

§ 1124.40 Classes of utilization.

See § 1000.40.

§ 1124.41 [Reserved]

§ 1124.42 Classification of transfers and diversions.

See § 1000.42.

§ 1124.43 General classification rules.

See § 1000.43.

§ 1124.44 Classification of producer milk.

In addition to the provisions provided in § 1000.44, the

words “, or acquired for distribution,” are inserted following the

word “received” in § 1000.44(a)(3)(iv). 

§ 1124.45 Market administrator’s reports and announcements

concerning classification.
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See § 1000.45.

CLASS PRICES

§ 1124.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.
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§ 1124.51 Class I differential and price.

The Class I differential shall be the differential

established for King County, Washington, which is reported in

§ 1000.52. The Class I price shall be the price computed pursuant

to § 1000.50(a) for King County, Washington.

§ 1124.52 Adjusted Class I differentials.

See § 1000.52.

§ 1124.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1124.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1124.60 Handler's value of milk.

For the purpose of computing a handler’s obligation for

producer milk, the market administrator shall determine for each

month the value of milk of each handler with respect to each of

the handler's pool plants and of each handler described in

§ 1000.9(c) with respect to milk that was not received at a pool

plant by adding the amounts computed in paragraphs (a) through (h)

of this section and subtracting from that total amount the value

computed in paragraph (i) of this section. Unless otherwise

specified, the skim milk, butterfat, and the combined pounds of

skim milk and butterfat referred to in this section shall result

from the steps set forth in § 1000.44(a), (b), and (c),

respectively, and the nonfat components of producer milk in each

class shall be based upon the proportion of such components in

producer skim milk. Receipts of nonfluid milk products that are

distributed as labeled reconstituted milk for which payments are

made to the producer-settlement fund of another Federal order

under § 1000.76(a)(4) or (d) shall be excluded from pricing under

this section. 

(a) Class I value.

(1) Multiply the hundredweight of skim milk in Class I by

the Class I skim milk price; and

(2) Add an amount obtained by multiplying the pounds of

butterfat in Class I by the Class I butterfat price.

(b) Class II value.

(1) Multiply the pounds of nonfat solids in Class II skim

milk by the Class II nonfat solids price; and

(2) Add an amount obtained by multiplying the pounds of

butterfat in Class II times the Class II butterfat price.

(c) Class III value.

(1) Multiply the pounds of protein in Class III skim milk by

the protein price;
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(2) Add an amount obtained by multiplying the pounds of

other solids in Class III skim milk by the other solids price; and

(3) Add an amount obtained by multiplying the pounds of

butterfat in Class III by the butterfat price.

(d) Class IV value.

(1) Multiply the pounds of nonfat solids in Class IV skim

milk by the nonfat solids price; and

(2) Add an amount obtained by multiplying the pounds of

butterfat in Class IV by the butterfat price.

(e) Multiply the pounds of skim milk and butterfat overage

assigned to each class pursuant to § 1000.44(a)(11) and the

corresponding steps of § 1000.44(b) by the skim milk prices and

butterfat prices applicable to each class.

(f) Multiply the difference between the current month’s Class

I, II, or III price, as the case may be, and the Class IV price

for the preceding month by the hundredweight of skim milk and

butterfat subtracted from Class I, II, or III, respectively,

pursuant to § 1000.44(a)(7) and the corresponding step of

§ 1000.44(b);

(g) Multiply the difference between the Class I price

applicable at the location of the pool plant and the Class IV

price by the hundredweight of skim milk and butterfat assigned to

Class I pursuant to § 1000.43(d) and the hundredweight of skim

milk and butterfat subtracted from Class I pursuant to

§ 1000.44(a)(3)(i) through (vi) and the corresponding step of

§ 1000.44(b), excluding receipts of bulk fluid cream products from

plants regulated under other Federal orders and bulk concentrated

fluid milk products from pool plants, plants regulated under other

Federal orders, and unregulated supply plants.

(h) Multiply the difference between the Class I price

applicable at the location of the nearest unregulated supply

plants from which an equivalent volume was received and the Class

III price by the pounds of skim milk and butterfat in receipts of

concentrated fluid milk products assigned to Class I pursuant to §

1000.43(d) and § 1000.44(a)(3)(i) and the corresponding step of §

1000.44(b) and the pounds of skim milk and butterfat subtracted

from Class I pursuant to § 1000.44(a)(8) and the corresponding

step of § 1000.44(b), excluding such skim milk and butterfat in

receipts of fluid milk products from an unregulated supply plant

to the extent that an equivalent amount of skim milk or butterfat

disposed of to such plant by handlers fully regulated under any

Federal milk order is classified and priced as Class I milk and is

not used as an offset for any other payment obligation under any

order.
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(i) For reconstituted milk made from receipts of nonfluid

milk products, multiply $1.00 (but not more than the difference

between the Class I price applicable at the location of the pool

plant and the Class IV price) by the hundredweight of skim milk

and butterfat contained in receipts of nonfluid milk products that

are allocated to Class I use pursuant to § 1000.43(d).

§ 1124.61 Computation of producer price differential.

For each month the market administrator shall compute a

producer price differential per hundredweight. The report of any

handler who has not made payments required pursuant to § 1124.71

for the preceding month shall not be included in the computation

of the producer price differential, and such handler’s report 

shall not be included in the computation for succeeding months

until the handler has made full payment of outstanding monthly

obligations. Subject to the aforementioned conditions, the market

administrator shall compute the producer price differential in the

following manner:

(a) Combine into one total the values computed pursuant to

§ 1124.60 for all handlers required to file reports prescribed in

§ 1124.30;

(b) Subtract the total values obtained by multiplying each

handler's total pounds of protein, other solids, and butterfat

contained in the milk for which an obligation was computed

pursuant to § 1124.60 by the protein price, the other solids

price, and the butterfat price, respectively;

(c) Add an amount equal to the sum of the location

adjustments computed pursuant to § 1124.75;

(d) Add an amount equal to not less than one-half of the

unobligated balance in the producer-settlement fund;

(e) Divide the resulting amount by the sum of the following

for all handlers included in these computations:

(1) The total hundredweight of producer milk; and

(2) The total hundredweight for which a value is computed

pursuant to § 1124.60(h); and

(f) Subtract not less than 4 cents nor more than 5 cents

from the price computed pursuant to paragraph (e) of this section. 

The result shall be known as the producer price differential for

the month.

§ 1124.62 Announcement of producer prices. 

On or before the 14th day after the end of each month, the

market administrator shall announce publicly the following prices

and information:

(a) The producer price differential;

(b) The protein price;

(c) The nonfat solids price;
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(d) The other solids price;

(e) The butterfat price;

(f) The average butterfat, protein, nonfat solids, and other

solids content of producer milk; and

(g) The statistical uniform price for milk containing 3.5

percent butterfat, computed by combining the Class III price and

the producer price differential.

PAYMENTS FOR MILK

§ 1124.70 Producer-settlement fund.

See § 1000.70.

§ 1124.71 Payments to the producer-settlement fund.

Each handler shall make payment to the producer-settlement

fund in a manner that provides receipt of the funds by the market

administrator no later than the 16th day after the end of the month

(except as provided in § 1000.90). Payment shall be the amount,

if any, by which the amount specified in paragraph (a) of this

section exceeds the amount specified in paragraph (b) of this

section:

(a) The total value of milk to the handler for the month as

determined pursuant to § 1124.60.

(b) The sum of:

(1) An amount obtained by multiplying the total

hundredweight of producer milk as determined pursuant to

§ 1000.44(c) by the producer price differential as adjusted

pursuant to § 1124.75;

(2) An amount obtained by multiplying the total pounds of

protein, other solids, and butterfat contained in producer milk by

the protein, other solids, and butterfat prices, respectively;

and

(3) An amount obtained by multiplying the pounds of skim

milk and butterfat for which a value was computed pursuant to

§ 1124.60(h) by the producer price differential as adjusted

pursuant to § 1124.75 for the location of the plant from which

received. 

§ 1124.72 Payments from the producer-settlement fund.

No later than the 18th day after the end of each month (except

as provided in § 1000.90), the market administrator shall pay to

each handler the amount, if any, by which the amount computed

pursuant to § 1124.71(b) exceeds the amount computed pursuant to

§ 1124.71(a). If, at such time, the balance in the producersettlement fund is insufficient to make all payments pursuant to

this section, the market administrator shall reduce uniformly such

payments and shall complete the payments as soon as the funds are

available.

§ 1124.73 Payments to producers and to cooperative associations.
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(a) Each handler shall pay each producer for producer milk

for which payment is not made to a cooperative association

pursuant to paragraph (b) of this section, as follows:

(1) Partial payment. For each producer who has not

discontinued shipments as of the 18th day of the month, partial

payment shall be made so that it is received by each producer on

or before the last day of the month (except as provided in

§ 1000.90) for milk received during the first 15 days of the month

from the producer at not less than the lowest announced class

price for the preceding month, less proper deductions authorized

in writing by the producer.

(2) Final payment. For milk received during the month,

payment shall be made so that it is received by each producer no

later than the 19th day after the end of the month (except as

provided in § 1000.90) in an amount equal to not less than the sum

of:

(i) The hundredweight of producer milk received times the

producer price differential for the month as adjusted pursuant to

§ 1124.75;

(ii) The pounds of butterfat received times the butterfat

price for the month;

(iii) The pounds of protein received times the protein price

for the month;

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

solids price for the month;

(v) Less any payment made pursuant to paragraph (a)(1) of

this section;

(vi) Less proper deductions authorized in writing by such

producer and plus or minus adjustments for errors in previous

payments to such producer subject to approval by the market

administrator; and

(vii) Less deductions for marketing services pursuant to

§ 1000.86.

(b) Payments for milk received from cooperative association

members. On or before the 2nd day prior to the dates specified in

paragraphs (a)(1) and (a)(2) of this section (except as provided

in § 1000.90), each handler shall pay to a cooperative association

for milk from producers who market their milk through the

cooperative association and who have authorized the cooperative to

collect such payments on their behalf an amount equal to the sum

of the individual payments otherwise payable for such producer

milk pursuant to paragraphs (a)(1) and (a)(2) of this section.

(c) Payment for milk received from cooperative association

pool plants or from cooperatives as handlers pursuant to

§ 1000.9(c). On or before the 2nd day prior to the dates specified
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in paragraphs (a)(1) and (a)(2) of this section (except as

provided in § 1000.90), each handler who receives fluid milk

products at its plant from a cooperative association in its

capacity as the operator of a pool plant or who receives milk from

a cooperative association in its capacity as a handler pursuant to

§ 1000.9(c), including the milk of producers who are not members

of such association and who the market administrator determines

have authorized the cooperative association to collect payment for

their milk, shall pay the cooperative for such milk as follows:

(1) For bulk fluid milk products and bulk fluid cream

products received from a cooperative association in its capacity

as the operator of a pool plant and for milk received from a

cooperative association in its capacity as a handler pursuant to

§ 1000.9(c) during the first 15 days of the month, at not less

than the lowest announced class price per hundredweight for the

preceding month.

(2) For the total quantity of bulk fluid milk products and

bulk fluid cream products received from a cooperative association

in its capacity as the operator of a pool plant, at not less than

the total value of such products received from the association's

pool plants, as determined by multiplying the respective

quantities assigned to each class under § 1000.44, as follows: 

(i) The hundredweight of Class I skim milk times the Class I

skim milk price for the month plus the pounds of Class I butterfat

times the Class I butterfat price for the month. The Class I

prices to be used shall be the prices effective at the location of

the receiving plant;

(ii) The pounds of nonfat solids in Class II skim milk by

the Class II nonfat solids price;

(iii) The pounds of butterfat in Class II times the Class II

butterfat price;

(iv) The pounds of nonfat solids in Class IV times the nonfat

solids price;

(v) The pounds of butterfat in Class III and Class IV milk

times the butterfat price;

(vi) The pounds of protein in Class III milk times the

protein price;

(vii) The pounds of other solids in Class III milk times the

other solids price; and

(viii) Add together the amounts computed in paragraphs

(c)(2)(i) through (vii) of this section and from that sum deduct

any payment made pursuant to paragraph (c)(1) of this section; and

(3) For the total quantity of milk received during the month

from a cooperative association in its capacity as a handler under

§ 1000.9(c) as follows:
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(i) The hundredweight of producer milk received times the

producer price differential as adjusted pursuant to § 1124.75;

(ii) The pounds of butterfat received times the butterfat

price for the month;

(iii) The pounds of protein received times the protein price

for the month;

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

solids price for the month; and

(v) Add together the amounts computed in paragraphs

(c)(3)(i) through (iv) of this section and from that sum deduct

any payment made pursuant to paragraph (c)(1) of this section.

(d) If a handler has not received full payment from the

market administrator pursuant to § 1124.72 by the payment date

specified in paragraph (a), (b) or (c) of this section, the

handler may reduce pro rata its payments to producers or to the

cooperative association (with respect to receipts described in

paragraph (b) of this section, prorating the underpayment to the

volume of milk received from the cooperative association in

proportion to the total milk received from producers by the

handler), but not by more than the amount of the underpayment. 

The payments shall be completed on the next scheduled payment date

after receipt of the balance due from the market administrator.

(e) If a handler claims that a required payment to a

producer cannot be made because the producer is deceased or cannot

be located, or because the cooperative association or its lawful

successor or assignee is no longer in existence, the payment shall

be made to the producer-settlement fund, and in the event that the

handler subsequently locates and pays the producer or a lawful

claimant, or in the event that the handler no longer exists and a

lawful claim is later established, the market administrator shall

make the required payment from the producer-settlement fund to the

handler or to the lawful claimant, as the case may be.

(f) In making payments to producers pursuant to this

section, each handler shall furnish each producer, except a

producer whose milk was received from a cooperative association

handler described in § 1000.9(a) or (c), a supporting statement in

a form that may be retained by the recipient which shall show:

(1) The name, address, Grade A identifier assigned by a duly

constituted regulatory agency, and payroll number of the producer;

(2) The daily and total pounds, and the month and dates such

milk was received from that producer;

(3) The total pounds of butterfat, protein, and other solids

contained in the producer's milk;

(4) The minimum rate or rates at which payment to the

producer is required pursuant to this order;
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(5) The rate used in making payment if the rate is other than

the applicable minimum rate;

(6) The amount, or rate per hundredweight, or rate per pound

of component, and the nature of each deduction claimed by the

handler; and

(7) The net amount of payment to the producer or cooperative

association.

§ 1124.74 [Reserved]

§ 1124.75 Plant location adjustments for producer milk and

nonpool milk.

For purposes of making payments for producer milk and nonpool

milk, a plant location adjustment shall be determined by

subtracting the Class I price specified in § 1124.51 from the

Class I price at the plant’s location. The difference, plus or

minus as the case may be, shall be used to adjust the payments

required pursuant to §§ 1124.73 and 1000.76. 

§ 1124.76 Payments by a handler operating a partially regulated 

distributing plant.

See § 1000.76.

§ 1124.77 Adjustment of accounts.

See § 1000.77.

§ 1124.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1124.85 Assessment for order administration.

See § 1000.85.

§ 1124.86 Deduction for marketing services.

See § 1000.86.