-673-

PART 1135 -- MILK IN THE WESTERN MARKETING AREA

Subpart -- Order Regulating Handling

GENERAL PROVISIONS

Sec.

1135.1 General provisions.

DEFINITIONS

1135.2 Western marketing area.

1135.3 Route disposition.

1135.4 Plant.

1135.5 Distributing plant.

1135.6 Supply plant.

1135.7 Pool plant.

1135.8 Nonpool plant.

1135.9 Handler.

1135.10 Producer-handler.

1135.11 Proprietary bulk tank handler.

1135.12 Producer.

1135.13 Producer milk.

1135.14 Other source milk.

1135.15 Fluid milk product.

1135.16 Fluid cream product.

1135.17 [Reserved]

1135.18 Cooperative association.

1135.19 Commercial food processing establishment.

HANDLER REPORTS

1135.30 Reports of receipts and utilization.

1135.31 Payroll reports.

1135.32 Other reports.

CLASSIFICATION OF MILK

1135.40 Classes of utilization.

1135.41 [Reserved]

1135.42 Classification of transfers and diversions.

1135.43 General classification rules.

1135.44 Classification of producer milk.

1135.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES

1135.50 Class prices, component prices, and advanced pricing

 factors.

1135.51 Class I differential and price.

1135.52 Adjusted Class I differentials.

1135.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1135.54 Equivalent price.
-674-

PRODUCER PRICE DIFFERENTIAL

1135.60 Handler’s value of milk.

1135.61 Computation of producer price differential.

1135.62 Announcement of producer prices.
-675-

PAYMENTS FOR MILK

1135.70 Producer-settlement fund.

1135.71 Payments to the producer-settlement fund.

1135.72 Payments from the producer-settlement fund.

1135.73 Payments to producers and to cooperative associations.

1135.74 [Reserved]

1135.75 Plant location adjustments for producer milk and

 nonpool milk.

1135.76 Payments by a handler operating a partially regulated

 distributing plant.

1135.77 Adjustment of accounts.

1135.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1135.85 Assessment for order administration.

1135.86 Deduction for marketing services.

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

Subpart -- Order Regulating Handling

GENERAL PROVISIONS

§ 1135.1 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 1135, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1135.2 Western 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: 

Utah

All of the State of Utah.

Idaho Counties

Ada, Adams, Bannock, Bear Lake, Bingham, Blaine, Boise,

Bonneville, Camas, Canyon, Caribou, Cassia, Elmore, Franklin, Gem,

Gooding, Jefferson, Jerome, Lincoln, Madison, Minidoka, Oneida,

Owyhee, Payette, Power, Twin Falls, Valley, and Washington.

Nevada Counties

Elko, Lincoln, and White Pine.

Oregon Counties

Baker, Grant, Harney, Malheur, and Union.

Wyoming Counties
-676-

Lincoln and Uinta.

§ 1135.3 Route disposition.

See § 1000.3.
-677-

§ 1135.4 Plant.

See § 1000.4.

§ 1135.5 Distributing plant.

See § 1000.5.

§ 1135.6 Supply plant.

See § 1000.6.

§ 1135.7 Pool plant.

Pool Plant means a plant or unit of plants specified in

paragraphs (a) through (e) of this section, but excluding a plant

specified in paragraph (g) of this section. The pooling standards

described in paragraphs (c) and (d) of this section are subject to

modification pursuant to paragraph (f) 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 the month the quantity

of bulk fluid milk products transferred or diverted to plants

described in paragraph (a) or (b) of this section is 35 percent or

more of the total Grade A milk received at the plant from dairy

farmers (except dairy farmers described in § 1135.12(b)) and

handlers described in § 1000.9(c) and § 1135.11, including milk

diverted by the plant operator, subject to the following

conditions:

(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

month following such request. A plant withdrawn from pool supply

plant status may not be reinstated for any subsequent month of the
-678-

March through July period unless it qualifies as a pool plant on

the basis of milk shipments;

(2) A pool plant operator may include as qualifying

shipments milk diverted to pool distributing plants pursuant to

§ 1135.13(c);

(3) Concentrated milk transferred from the supply plant to a

distributing plant for an agreed-upon use other than Class I shall

be excluded from the supply plant’s shipments in computing the

plant’s shipping percentage; and

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

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

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

immediately preceding 3 months.

(d) A milk manufacturing plant located within the marketing

area that is operated by a cooperative association if, during the

month or the immediately preceding 12-month period ending with the

current month, 35% or more of such cooperative’s member producer

milk (and any producer milk of nonmembers and members of another

cooperative association which may be marketed by the cooperative

association) is physically received in the form of bulk fluid milk

products (excluding concentrated milk transferred to a

distributing plant for an agreed-upon use other than Class I) at

plants specified in paragraph (a) or (b) of this section either

directly from farms or by transfer from supply plants operated by

the cooperative association and from plants of the cooperative

association for which pool plant status has been requested under

this paragraph subject to the following conditions:

(1) The plant does not qualify as a pool plant under

paragraph (a), (b) or (c) of this section or under comparable

provisions of another Federal order; and

(2) The plant is approved by a duly constituted regulatory

agency for the handling of milk approved for fluid consumption in

the marketing area.

(e) Two or more plants located in the marketing area and

operated by the same handler may qualify for pool plant status as

a unit by together meeting the requirements specified in paragraph

(a) of this section and subject to the following additional

requirements:

(1) At least one of the plants in the unit must individually

qualify as a pool plant pursuant to paragraph (a) of this section;

(2) Other plants in the unit must process Class I or

Class II products, using 50 percent or more of the total Grade A

fluid milk products received in bulk form at such plant or

diverted therefrom by the plant operator in Class I or Class II

products, and must be located in a pricing zone providing the same
-679-

or a lower Class I price than the price applicable at the

distributing plant included in the unit pursuant to paragraph

(e)(1) of this section; and

(3) A written request to form a unit must be filed by the

handler with the market administrator prior to the first day of

the month for which such status is to be effective. The unit

shall continue from month to month thereafter without further

notification. The handler shall notify the market administrator

in writing prior to the first day of any month for which

termination or any change of the unit is desired.

(f) The applicable shipping percentages of paragraphs (c) 

and (d) 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.

(g) 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;

(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
-680-

regulated under such other Federal order without regard to its

route disposition in any other Federal order marketing area;

(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; and

(7) That portion of a regulated plant designated as a

nonpool plant that is physically separate and operated separately

from the pool portion of such plant. The designation of a portion

of a regulated plant as a nonpool plant must be requested in

advance and in writing by the handler and must be approved by the

market administrator.
-681-

§ 1135.8 Nonpool plant.

See § 1000.8.

§ 1135.9 Handler.

In addition to the handlers defined in § 1000.9, handler

shall include a person meeting the standards set forth in § 

1135.11.

§ 1135.10 Producer-handler.

Producer-handler means a person who:

(a) Operates a dairy farm and a distributing plant from

which there is route disposition in the marketing area during the

month;

(b) Receives fluid milk products from own farm production or

milk that is fully subject to the pricing and pooling provisions

of this or another Federal order;

(c) Receives at its plant or acquires for route disposition

no more than 150,000 pounds of fluid milk products from handlers

fully regulated under any Federal order. This limitation shall

not apply if the producer-handler’s own farm production is less

than 150,000 pounds during the month;

(d) Disposes of no other source milk as Class I milk except

by increasing the nonfat milk solids content of the fluid milk

products; and

(e) Provides proof satisfactory to the market administrator

that the care and management of the dairy animals and other

resources necessary to produce all Class I milk handled (excluding

receipts from handlers fully regulated under any Federal order)

and the processing and packaging operations are the producerhandler’s own enterprise and are operated at its own risk.

§ 1135.11 Proprietary bulk tank handler.

Any person, except a cooperative association, with respect to

milk that it receives for its account from the farm of a producer

in a tank truck owned and operated by, or under the control of,

such person and which is delivered during the month for the

account of such person to the pool plant of another handler or

diverted pursuant to § 1135.13, subject to the following

conditions:

(a) Such person must operate a plant located in the

marketing area at which milk is processed only into Class II,

Class III, or Class IV products; and

(b) Prior to operating as a handler pursuant to this

paragraph, such person must submit to the marker administrator a

statement signed by the applicant and the operator of the pool

plant to which the milk will be delivered specifying that the

applicant will be the responsible handler for the milk.

§ 1135.12 Producer.
-682-

(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 § 1135.13; or

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

1135.11.

(b) Producer shall not include:

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

(2) A dairy farmer whose milk is delivered to an exempt

plant, excluding producer milk diverted to the exempt plant

pursuant to § 1135.13(d);

(3) A dairy farmer whose milk is diverted to a pool plant by

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 (except a nonpool plant

that has no utilization of milk products in any Class other than

Class III or Class IV) 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. 

§ 1135.13 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, a handler described in § 1000.9(c), or a handler

described in § 1135.11. 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 handler described in § 1000.9(c) or in §

1135.11 in excess of the quantity delivered to pool plants;

(c) 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

(d) Diverted by the operator of a pool plant, a cooperative

association described in § 1000.9(c), or a proprietary bulk tank
-683-

handler described in § 1135.11, to a nonpool plant, subject to the

following conditions:

(1) Milk of a dairy farmer shall not be eligible for

diversion unless at least one day’s milk production of such dairy

farmer has been physically received as producer milk at a pool

plant and the dairy farmer has continuously retained producer

status since that time. If a dairy farmer loses producer status

under this order (except as a result of a temporary loss of

Grade A approval), the dairy farmer’s milk shall not be eligible

for diversion until one day’s milk production has been physically

received as producer milk at a pool plant;

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

month (including diversions) the handler diverts to nonpool plants

not more than 90 percent;

(3) 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. 

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

plant to which diverted;

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

paragraph (d)(2) of this section shall not be producer milk. If

the diverting handler, cooperative association, or proprietary

bulk tank handler fails to designate the dairy farmers’ deliveries

that are not to be producer milk, no milk diverted by the handler,

cooperative association, or proprietary bulk tank handler 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

§ 1135.12(b)(5); and

(6) The delivery day requirement in paragraph (d)(1) and the

diversion percentage in paragraph (d)(2) 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 in writing at least 15 days prior
-684-

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 the delivery day

requirement or the diversion percentage must be issued in writing

at least one day before the effective date.

§ 1135.14 Other source milk.

See § 1000.14.

§ 1135.15 Fluid milk product.

See § 1000.15.

§ 1135.16 Fluid cream product.

See § 1000.16.

§ 1135.17 [Reserved]

§ 1135.18 Cooperative association.

See § 1000.18.

§ 1135.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1135.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator receives the report on or before the 7th day after

the end of each month, in the detail and on the forms prescribed

by the market administrator, as follows:

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

§ 1135.7 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 § 1135.11; and

(ii) Receipts of milk from handlers described in § 1000.9(c)

and § 1135.11;

(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
-685-

(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

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) or 1135.11 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.

§ 1135.31 Payroll reports.

(a) On or before the 21st day after the end of each month,

each handler that operates a pool plant pursuant to § 1135.7 and

each handler described in § 1000.9(c) and in § 1135.11 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

§ 1135.73(e).

(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.

§ 1135.32 Other reports.

In addition to the reports required pursuant to §§ 1135.30

and 1135.31, 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

§ 1135.40 Classes of utilization.

See § 1000.40.

§ 1135.41 [Reserved]

§ 1135.42 Classification of transfers and diversions. 
-686-

See § 1000.42.

§ 1135.43 General classification rules.

See § 1000.43.

§ 1135.44 Classification of producer milk.

See § 1000.44.

§ 1135.45 Market administrator's reports and announcements

concerning classification.

See § 1000.45.

CLASS PRICES

§ 1135.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.

§ 1135.51 Class I differential and price.

The Class I differential shall be the differential

established at Salt Lake County, Utah, which is reported in

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

to § 1000.50(a) for Salt Lake County, Utah.

§ 1135.52 Adjusted Class I differentials.

See § 1000.52.

§ 1135.53 Announcement of class prices, component prices, and

advanced pricing factors. 

See § 1000.53.

§ 1135.54 Equivalent price.

See § 1000.54.
-687-

PRODUCER PRICE DIFFERENTIAL

§ 1135.60 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) and each handler described in § 1135.11, 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 nonfat components in producer skim milk. 

Receipts of nonfluid milk products that are distributed as labeled

reconstituted milk for which payments are made to the producersettlement 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;

(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
-688-

corresponding step 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 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.

(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).

§ 1135.61 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 § 1135.71

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
-689-

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

§ 1135.60 for all handlers required to file reports prescribed in

§ 1135.30;

(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 § 1135.60 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 § 1135.75;

(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 § 1135.60(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.

§ 1135.62 Announcement of producer prices.

On or before the 12th 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;

(d) The other solids price;

(e) The butterfat price;

(f) [Reserved]

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

solids content of producer milk; and

(h) 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

§ 1135.70 Producer-settlement fund.

See § 1000.70.

§ 1135.71 Payments to the producer-settlement fund.
-690-

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 14th 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 § 1135.60.

(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 § 1135.75;

(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;

(3) [Reserved]

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

milk and butterfat for which a value was computed pursuant to

§ 1135.60(h) by the producer price differential as adjusted

pursuant to § 1135.75 for the location of the plant from which

received.

§ 1135.72 Payments from the producer-settlement fund.

No later than the 15th 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 § 1135.71(b) exceeds the amount computed pursuant to

§ 1135.71(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.

§ 1135.73 Payments to producers and to cooperative associations. 

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

each handler shall make payment to each producer from whom milk is

received during the month as follows: 

(1) Partial Payment. On or before the 25th day of each month

(except as provided in § 1000.90) to each producer an amount not

less than 1.2 times the lowest class price for the preceding month

multiplied by the hundredweight of milk received from such

producer during the first 15 days of the month, less proper

deductions authorized in writing by such producer to be made from

payments due pursuant to this paragraph.
-691-

(2) Final Payment. On or before the 17th day of the

following month (except as provided in § 1000.90), not less than

an amount computed by the sum of the following:

(i) The hundredweight of producer milk received times the

producer price differential for the month as adjusted pursuant to

§ 1135.75;

(ii) The pounds of butterfat in producer milk received times

the butterfat price for the month;

(iii) The pounds of protein in producer milk received times

the protein price for the month;

(iv) The pounds of other solids in producer milk received

times the other solids price for the month;

(v) [Reserved]

(vi) Less any payments made pursuant to paragraph (a)(1) of

this section;

(vii) 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

(viii) Less deductions made for marketing service pursuant

to § 1000.86.

(b) One day prior to the dates on which partial and final

payments are due pursuant to paragraph (a) of this section, each

pool plant operator shall pay a cooperative association for milk

received as follows:

(1) Partial payment to a cooperative association for bulk

milk received directly from producers’ farms. For bulk milk

(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) received during the first 15 days of the month from a

cooperative association in any capacity, except as the operator of

a pool plant, the payment shall be an amount not less than 1.2

times the lowest class price for the preceding month multiplied by

the hundredweight of milk. 

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk fluid milk products and

bulk fluid cream products received during the first 15 days of the

month from a cooperative association in its capacity as the

operator of a pool plant, the partial payment shall be at the pool

plant operator’s estimated use value of the milk using the most

recent class prices available at the receiving plant’s location. 

(3) Final payment to a cooperative association for milk

transferred from its pool plant. For the total quantity of bulk

fluid milk products and bulk fluid cream products received from a
-692-

cooperative association in its capacity as the operator of a pool

plant, the final payment shall be 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

(b)(3)(i) through (vii) of this section and from that sum deduct

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

(4) Final payment to a cooperative association for bulk milk

received directly from producers’ farms. For bulk milk received

from a cooperative association during the month, 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, the

final payment for such milk shall be an amount equal to the sum of

the individual payments otherwise payable for such milk pursuant

to paragraph (a)(2) of this section. 

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

market administrator pursuant to § 1135.72 by the payment date

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

reduce pro rata its payments to producers or to the cooperative

association by not more than the amount of such underpayment. The

payments shall be completed on the next scheduled payment date

after receipt of the balance due from the market administrator.

(d) 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
-693-

be made to the producer settlement fund, and in the event 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.

(e) 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) [Reserved]

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

producer is required pursuant to this order;

(6) The rate used in making payment if the rate is other

than the applicable minimum rate;

(7) The amount, or rate per hundredweight, or rate per

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

the handler; and

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

association.

§ 1135.74 [Reserved]

§ 1135.75 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 § 1135.51 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 §§ 1135.73 and 1000.76. 

§ 1135.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1135.77 Adjustment of accounts.

See § 1000.77.

§ 1135.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1135.85 Assessment for order administration.
-694-

See § 1000.85.

§ 1135.86 Deduction for marketing services.

See § 1000.86.