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PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

Subpart--Order Regulating Handling

GENERAL PROVISIONS

Sec.

1126.1 General provisions.

DEFINITIONS

1126.2 Southwest marketing area.

1126.3 Route disposition.

1126.4 Plant.

1126.5 Distributing plant.

1126.6 Supply plant.

1126.7 Pool plant.

1126.8 Nonpool plant.

1126.9 Handler.

1126.10 Producer-handler.

1126.11 [Reserved]

1126.12 Producer.

1126.13 Producer milk.

1126.14 Other source milk.

1126.15 Fluid milk product.

1126.16 Fluid cream product.

1126.17 [Reserved]

1126.18 Cooperative association.

1126.19 Commercial food processing establishment.

HANDLER REPORTS

1126.30 Reports of receipts and utilization.

1126.31 Payroll reports.

1126.32 Other reports.

CLASSIFICATION OF MILK

1126.40 Classes of utilization.

1126.41 [Reserved]

1126.42 Classification of transfers and diversions.

1126.43 General classification rules. 

1126.44 Classification of producer milk.

1126.45 Market administrator's reports and announcements

 concerning classification.

CLASS PRICES

1126.50 Class prices, component prices, and advanced pricing

 factors.

1126.51 Class I differential and price.

1126.52 Adjusted Class I differentials.

1126.53 Announcement of class prices, component prices, and

 advanced pricing factors.

1126.54 Equivalent price.
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PRODUCER PRICE DIFFERENTIAL

1126.60 Handler's value of milk.

1126.61 Computation of producer price differential.

1126.62 Announcement of producer prices.
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PAYMENTS FOR MILK

1126.70 Producer-settlement fund.

1126.71 Payments to the producer-settlement fund.

1126.72 Payments from the producer-settlement fund.

1126.73 Payments to producers and to cooperative associations.

1126.74 [Reserved]

1126.75 Plant location adjustments for producer milk and 

 nonpool milk.

1126.76 Payments by a handler operating a partially regulated

 distributing plant.

1126.77 Adjustment of accounts.

1126.78 Charges on overdue accounts.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

1126.85 Assessment for order administration.

1126.86 Deduction for marketing services.

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

Subpart--Order Regulating Handling

GENERAL PROVISIONS

§ 1126.1 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 1126, all references to sections in part 1000 refer to

part 1000 of this chapter.

DEFINITIONS

§ 1126.2 Southwest 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:

New Mexico and Texas

All of the States of New Mexico and Texas.

Colorado Counties

Archuleta, LaPlata, and Montezuma.

§ 1126.3 Route disposition.

See § 1000.3.

§ 1126.4 Plant.

See § 1000.4.

§ 1126.5 Distributing plant.

See § 1000.5.

§ 1126.6 Supply plant.

See § 1000.6.
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§ 1126.7 Pool plant.

Pool plant means a plant specified in paragraphs (a) through

(d) of this section, or a unit of plants as specified in paragraph

(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 50 percent or more of the

total quantity of milk that is physically received during the

month from dairy farmers and handlers described in § 1000.9(c),

including milk that is diverted as producer milk to other plants,

is transferred to pool distributing plants. 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. 

(d) A plant located within the marketing area that is

operated by a cooperative association if pool plant status under

this paragraph is requested for such plant by the cooperative

association and during the month at least 30 percent of the

producer milk of members of such cooperative association is

delivered directly from farms to pool distributing plants or is

transferred to such plants as a fluid milk product (excluding

concentrated milk transferred to a distributing plant for an

agreed-upon use other than Class I) from the cooperative's plant.

(e) Two or more plants operated by the same handler and

located within the marketing area may qualify for pool status as a

unit by meeting the total and in-area route disposition
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requirements specified in paragraph (a) of this section and the

following additional requirements:

(1) At least one of the plants in the unit must qualify as a

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

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

Class II products and must be located in a pricing zone providing

the same 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, or to add or remove

plants from a unit, must be filed with the market administrator

prior to the first day of the month for which it is to be

effective.

(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 plant;

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

(3) A plant qualified pursuant to paragraph (a) of this

section that is located within the marketing area if the plant

also meets the pooling requirements of another Federal order, and

more than 50 percent of its route distribution has been in such

other Federal order marketing area for 3 consecutive months;

(4) A plant qualified pursuant to paragraph (a) of this

section which is not located within any Federal order marketing

area 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 qualified pursuant to paragraph (a) of this

section that is located in another Federal order marketing area if
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the plant 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;

(6) A plant qualified pursuant to paragraph (c) or (d) 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 pool 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 writing by

the handler and must be approved by the market administrator.

§ 1126.8 Nonpool plant.

See § 1000.8.

§ 1126.9 Handler.

See § 1000.9.

§ 1126.10 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 no more than 150,000 pounds of fluid milk

products from handlers fully regulated under any Federal order,

including such products received at a location other than the

producer-handler’s processing plant for distribution on routes.

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 at its own risk.

§ 1126.11 [Reserved]
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§ 1126.12 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 § 1126.13; 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 § 1126.13(d);

(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 the milk is allocated by request to a

utilization other than Class I; and

(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.

§ 1126.13 Producer milk.

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

components of skim milk), including nonfat components, and

butterfat contained 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 handler described in § 1000.9(c) in excess

of the quantity delivered to pool plants;

(c) Diverted by a pool plant operator for the account of the

handler operating such plant 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 or a handler

described in § 1000.9(c) to a nonpool plant, subject to the

following conditions:

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

diversion unless a delivery of at least 40,000 pounds or one day’s

milk production, whichever is less, 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;
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(2) The total quantity of milk diverted during the month by

a cooperative association shall not exceed 50 percent of the total

quantity of producer milk that the cooperative association caused

to be received at pool plants and diverted;

(3) The operator of a pool plant that is not a cooperative

association may divert any milk that is not under the control of a

cooperative association that diverts milk during the month

pursuant to this paragraph. The total quantity of milk so

diverted during the month shall not exceed 50 percent of the total

quantity of the producer milk physically received at such plant

(or such unit of plants in the case of plants that pool as a unit

pursuant to § 1126.7(e)) and diverted;

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

paragraphs (d)(2) and (3) of this section shall not be producer

milk. If the diverting handler or cooperative association fails

to designate the dairy farmers’ deliveries that will not be

producer milk, no milk diverted by the handler or cooperative

association shall be producer milk;

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

plant to which diverted; and

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

diversion percentages in paragraphs (d)(2) and (3) of this section

may be increased or decreased by the market administrator if there

is a finding 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

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 any diversion percentage must be issued in writing

at least one day before the effective date.

§ 1126.14 Other source milk.

See § 1000.14.

§ 1126.15 Fluid milk product.

See § 1000.15.

§ 1126.16 Fluid cream product.

See § 1000.16.

§ 1126.17 [Reserved]

§ 1126.18 Cooperative association.

See § 1000.18.
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§ 1126.19 Commercial food processing establishment.

See § 1000.19.

HANDLER REPORTS

§ 1126.30 Reports of receipts and utilization.

Each handler shall report monthly so that the market

administrator’s office receives the report on or before the 8th

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

forms, as follows:

(a) Each pool plant operator shall report for each of its

operations the following information:

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

pounds of nonfat solids other than protein (other solids), and the

value of the somatic cell adjustment pursuant to § 1000.50(p)

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, other nonfat

solids, and somatic cell information, 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) shall report:

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

protein, pounds of solids-not-fat other than protein (other

solids), and the value of the somatic cell adjustment pursuant to

§ 1000.50(p), contained in receipts of milk from producers; and

(2) The utilization or disposition of such receipts.
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(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.

§ 1126.31 Payroll reports.

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

each handler that operates a pool plant pursuant to § 1126.7 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 specified in § 1126.73(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.

§ 1126.32 Other reports.

In addition to the reports required pursuant to §§ 1126.30

and 1126.31, 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

§ 1126.40 Classes of utilization.

See § 1000.40.

§ 1126.41 [Reserved]

§ 1126.42 Classification of transfers and diversions.

See § 1000.42.

§ 1126.43 General classification rules.

See § 1000.43.

§ 1126.44 Classification of producer milk.

See § 1000.44.

§ 1126.45 Market administrator’s reports and announcements

concerning classification.

See § 1000.45.
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CLASS PRICES

§ 1126.50 Class prices, component prices, and advanced pricing

factors.

See § 1000.50.

§ 1126.51 Class I differential and price.

The Class I differential shall be the differential

established for Dallas County, Texas, which is reported in

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

to § 1000.50(a) for Dallas County, Texas.

§ 1126.52 Adjusted Class I differentials.

See § 1000.52.

§ 1126.53 Announcement of class prices, component prices, and

advanced pricing factors.

See § 1000.53.

§ 1126.54 Equivalent price.

See § 1000.54.

PRODUCER PRICE DIFFERENTIAL

§ 1126.60 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 (i)

of this section and subtracting from that total amount the value

computed in paragraph (j) 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 pounds 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
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(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) Compute an adjustment for the somatic cell content of

producer milk by multiplying the values reported pursuant to

§ 1126.30(a)(1) and (c)(1) by the percentage of total producer

milk allocated to Class II, Class III, and Class IV pursuant to

§ 1000.44(c);

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

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

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

butterfat prices applicable to each class.

(g) 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);

(h) 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.

(i) 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 §
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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.

(j) 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).

§ 1126.61 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 § 1126.71

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 §

1126.60 for all handlers required to file reports prescribed in §

1126.30;

(b) Subtract the total of the 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 § 1126.60 by the protein price, other solids

price, and the butterfat price, respectively, and the total value

of the somatic cell adjustment pursuant to § 1126.30(a)(1) and

(c)(1);

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

adjustments computed pursuant to § 1126.75;

(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 § 1126.60(i); and 
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(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.

§ 1126.62 Announcement of producer prices.

On or before the 13th day after the end of each month, the

market administrator shall announce 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) The somatic cell adjustment rate;

(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

§ 1126.70 Producer-settlement fund.

See § 1000.70.

§ 1126.71 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 § 1126.60.

(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 § 1126.75;

(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) The total value of the somatic cell adjustment to

producer milk; and

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

milk and butterfat for which a value was computed pursuant to

§ 1126.60(i) by the producer price differential as adjusted
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pursuant to § 1126.75 for the location of the plant from which

received. 

§ 1126.72 Payments from the producer-settlement fund.

No later than the 17th 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 § 1126.71(b) exceeds the amount computed pursuant to

§ 1126.71(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.

§ 1126.73 Payments to producers and to cooperative associations.

(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 23rd day of the month, payment

shall be made so that it is received by the producer on or before

the 26th day of the month (except as provided in § 1000.90) for

milk received during the first 15 days of the month 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 18th day after the end of the month (except as

provided in § 1000.90) in an amount computed as follows:

(i) Multiply the hundredweight of producer milk received

times the producer price differential for the month as adjusted

pursuant to § 1126.75;

(ii) Multiply the pounds of butterfat received times the

butterfat price for the month;

(iii) Multiply the pounds of protein received times the

protein price for the month;

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

other solids price for the month;

(v) Multiply the hundredweight of milk received times the

somatic cell adjustment for the month;

(vi) Add the amounts computed in paragraphs (a)(2)(i)

through (v) of this section, and from that sum:

(A) Subtract the partial payment made pursuant to paragraph

(a)(1) of this section;

(B) Subtract the deduction for marketing services pursuant

to § 1000.86;
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(C) Add or subtract for errors made in previous payments to

the producer subject to approval by the market administrator; and

(D) Subtract proper deductions authorized in writing by the

producer.

(b) On or before the day prior to the dates specified for

partial and final payments pursuant to paragraph (a) of this

section (except as provided in § 1000.90), 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 equal to the hundredweight of

milk received multiplied by the lowest announced class price for

the preceding month.

(2) Partial payment to a cooperative association for milk

transferred from its pool plant. For bulk milk/skimmed milk

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. Following the classification of

bulk fluid milk products and bulk fluid cream products received

during the month from a cooperative association in its capacity as

the operator of a pool plant, the final payment for such receipts

shall be determined 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;
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(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;

(viii) The hundredweight of Class II, Class III, and

Class IV milk times the somatic cell adjustment; and

(ix) Add together the amounts computed in paragraphs

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

any payments made pursuant to paragraph (b)(2) 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 § 1126.72 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 cooperative

associations pursuant to paragraphs (a) and (b) of this section,

but by not 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.

(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

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.

(e) In making payments to producers pursuant to this

section, each pool plant operator 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 the payroll number of the

producer;
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(2) The month and dates that milk was received from the

producer, including the daily and total pounds of milk received;

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

contained in the producer’s milk;

(4) The somatic cell count of the producer’s milk;

(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 pound

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.

§ 1126.74 [Reserved]

§ 1126.75 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 § 1126.51 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 §§ 1126.73 and 1000.76. 

§ 1126.76 Payments by a handler operating a partially regulated

distributing plant.

See § 1000.76.

§ 1126.77 Adjustment of accounts.

See § 1000.77.

§ 1126.78 Charges on overdue accounts.

See § 1000.78.

ADMINISTRATIVE ASSESSMENT AND MARKETING SERVICE DEDUCTION

§ 1126.85 Assessment for order administration.

See § 1000.85.

§ 1126.86 Deduction for marketing services.

See § 1000.86.