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contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

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Rules and Regulations Federal Register

51453 

Vol. 79, No. 168 

Friday, August 29, 2014 

DEPARTMENT OF AGRICULTURE 

Commodity Credit Corporation 

7 CFR Part 1430 

RIN 0560–AI23 

Margin Protection Program for Dairy 

and Dairy Product Donation Program 

AGENCY: Commodity Credit Corporation 

and Farm Service Agency, USDA. 

ACTION: Final rule. 

SUMMARY: This rule implements 

regulations for the Margin Protection 

Program for Dairy (MPP-Dairy) and the 

Dairy Product Donation Program (DPDP) 

as authorized in subtitle D of the 

Agricultural Act of 2014 (the 2014 Farm 

Bill). MPP-Dairy provides dairy 

producers with risk management 

coverage that will pay producers when 

the difference between the price of milk 

and the cost of feed (the margin) falls 

below a certain level. MPP-Dairy 

provides basic catastrophic level 

coverage for an administrative fee, and 

greater coverage for a premium in 

addition to the administrative fee. 

Amounts of coverage and premiums 

vary based on producer selections. This 

rule specifies the eligibility 

requirements and payment formulas for 

MPP-Dairy. Under the related DPDP, 

which is a complimentary program 

designed to support producer margins 

by increasing the price of milk, the U.S. 

Department of Agriculture (USDA) will 

buy dairy products when the margin 

falls below a certain level, and will 

distribute those products to individuals 

in low-income groups through public 

and private non-profit organizations. 

The Farm Service Agency (FSA) will 

operate both programs using funds of 

the Commodity Credit Corporation 

(CCC). The USDA Food and Nutrition 

Service (FNS) will assist in the 

distribution of the dairy products under 

DPDP. 

DATES: Effective Date: This rule is 

effective August 29, 2014. 

Comment Date: We will consider 

comments we receive by October 28, 

2014. 

ADDRESSES: We invite you to submit 

comments specifically to address the 

questions related to intergenerational 

transfers in this document. In your 

comment, please specify RIN 0560–AI18 

and include the volume, date, and page 

number of this issue of the Federal 

Register. You may submit comments by 

any of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments; or 

• Mail, Hand Delivery, or Courier 

Danielle Cooke, Special Programs 

Manager, Price Support Division, FSA, 

USDA, STOP 0512, 1400 Independence 

Ave. SW., Washington, DC, 20250–0512. 

All written comments will be 

available for inspection online at 

www.regulations.gov and at the mail 

address above during business hours 

from 8 a.m. to 5 p.m., Monday through 

Friday, except holidays. A copy of this 

rule is available through the FSA home 

page at http://www.fsa.usda.gov/. 

FOR FURTHER INFORMATION CONTACT: For 

MPP-Dairy: Danielle Cooke; telephone: 

(202) 720–1919. For DPDP purchases: 

Christine Gouger, telephone: (816) 926– 

3379. For DPDP donations: Anne Fiala, 

telephone: (703) 305–2662. Persons with 

disabilities who require alternative 

means for communication should 

contact the USDA Target Center at (202) 

720–2600. 

SUPPLEMENTARY INFORMATION: 

MPP-Dairy—Overview 

This final rule establishes the 

regulations for the new MPP-Dairy as 

specified in sections 1401–1410 of the 

2014 Farm Bill (7 U.S.C. 9051–9060, 

Pub. L. 113–79). MPP-Dairy provides a 

risk management program for dairy 

operations and is authorized through 

December 31, 2018. 

MPP-Dairy is a voluntary risk 

management program that provides 

payments when the margin between the 

national average milk price and a 

national average feed cost falls below a 

specified ‘‘trigger’’ level. Eligible 

producers may purchase coverage for 

their dairy operations by paying an 

administrative fee, and a premium as 

applicable. The coverage is for a dairy 

operation; all producers in an operation 

must agree to register the operation for 

the program in order for that operation 

to be eligible for MPP-Dairy coverage. 

MPP-Dairy pays dairy operations when 

the national margin falls below the 

operation’s selected margin trigger for 

one of the specified 2-month periods in 

this rule. As part of the initial 

registration process, dairy operations 

must agree to carry MPP-Dairy coverage 

through calendar year 2018, but they 

can select a different level of coverage 

during each annual enrollment period. 

At the time of registration and annually 

thereafter, the dairy operation must 

make coverage level elections. For 

example, if margins are consistently 

above the trigger point or the dairy 

operations decide they want only 

limited coverage, the operation may 

switch during the annual enrollment 

from a coverage level with a higher 

premium to the catastrophic coverage 

level with a lower or no premium, but 

they cannot drop coverage altogether, 

except in cases where a producer is 

retiring, dies, or the operation goes out 

of business. 

Eligible Operations for MPP-Dairy 

Any dairy operation that produces 

and commercially markets milk in the 

United States may register for MPPDairy. As required by the 2014 Farm 

Bill, to be an eligible dairy operation for 

MPP-Dairy, each of the producers in an 

eligible dairy operation must share in 

the risk of production, and must make 

contributions (including capital, land, 

labor, equipment, or management) to the 

operation commensurate with such 

producer’s share of the proceeds. 

Participating dairy operations can be 

operated by more than one producer. A 

single producer may be member of more 

than one operation and each operation 

may separately participate in MPPDairy. 

Definition of a Dairy Operation 

This rule specifies that any dairy 

facility that was part of a single dairy 

operation that was eligible for and 

participated in the Milk Income Loss 

Contract (MILC) Program administered 

by FSA as of February 7, 2014 (date of 

enactment of the Agricultural Act of 

2014) is a ‘‘dairy operation’’ for the 

purposes of MPP-Dairy. All other 

operations must meet the requirements 

specified in this rule to be a dairy 


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operation for the purposes of MPP-Dairy 

these include the criteria and 

procedures established under the MILC 

Program. Operations that are 

determined to be ‘‘new operations’’ 

under this rule, will be subject to the 

‘‘affiliation’’ test if the operation elects 

to participate in MPP-Dairy separately. 

For the purposes of this rule, a ‘‘new’’ 

operation is one that did not produce 

and commercially market milk at least 

12 full months as of February 7, 2014. 

Under certain circumstances new 

operations may participate in MPPDairy and existing operations can 

restructure and still be eligible for MPPDairy. A dairy operation can be sold or 

transferred and keep MPP-Dairy 

eligibility. The main restriction on 

eligibility for a new operation is that an 

existing operation that restructures or 

reconstitutes cannot result in an 

increase in production history as a 

whole. 

Production History for MPP-Dairy 

MPP-Dairy payments for a given dairy 

operation are based on a coverage level 

and percentage of coverage annually 

elected by a participating dairy 

operation for the operation’s production 

history. Such production history for 

existing operations with at least a year 

of production history as of February 7, 

2014, will be the highest of the 

operation’s annual milk marketings in 

any one of 2011, 2012, or 2013 calendar 

years, subject to an annual upward 

adjustment in subsequent years to 

reflect any increase in the national 

average milk production as specified in 

this rule. 

Eligible production history for new 

operations will be determined by one of 

two methods, at the election of the dairy 

operation. The first option is to 

extrapolate from actual production data 

for the first calendar year with at least 

one full month of production history, 

adjusted using a national seasonality 

index to calculate a yearly amount of 

production. The national seasonality 

index was created by FSA using 

monthly milk production data for 2009 

through 2013. Since milk production 

naturally fluctuates in some regions 

during different seasons of the year, the 

index is needed to extrapolate a full 

year production amount from partial 

year production data. To develop the 

index, the total milk production for the 

5 years for each individual month was 

divided by the total annual milk 

production for those years to determine 

the share of annual milk production 

produced in each month. The resulting 

figure is the seasonality index that is set 

for the duration of MPP-Dairy. 

Alternatively, new operations may 

choose a second option to determine 

production history. Under this option, 

annual production would be estimated 

based on the herd size of the dairy 

operation relative to the national 

‘‘rolling herd average’’ production data 

published by the Secretary. 

As required by the 2014 Farm Bill, the 

production history amount established 

for an operation will never be reduced 

because of changes in national milk 

production, but may only be increased. 

Once a dairy operation has enrolled in 

MPP-Dairy and the production history is 

established for that operation, USDA in 

subsequent years will update the 

production amount to reflect annual 

changes in the national average milk 

production. That adjustment factor will 

be announced each year. 

The production history is established 

for a participating dairy operation, and 

it is assigned to that operation, not to an 

individual producer. If a participating 

dairy operation, with an established 

production history, sells or changes 

ownership of the operation, the 

established production history will stay 

with that operation, and be assigned to 

the new owner. For participating dairy 

operations, with an established 

production history, that relocate or 

otherwise move their operation to 

another location, the production history 

will move to the new location. If the 

new location has existing production 

history, the production history may be 

reconstituted that combines the 

production history of the relocated 

operation and the new location to the 

new location and become available for 

the next calendar year of coverage. 

Section 1410 of the 2014 Farm Bill 

specifies that USDA is required to 

establish regulations that ‘‘prohibit a 

dairy producer from reconstituting a 

dairy operation for the purpose of the 

dairy producer receiving margin 

protection payments.’’ This rule 

therefore prohibits an increase in 

production history as a result of most 

restructurings and reconstitutions. Only 

in cases where a dairy producer 

purchases a dairy operation with no 

established production history can a 

new history be established, subject to 

the affiliation rule. For example, if a 

father and son jointly operate a dairy 

and the son decides to leave and 

purchase a dairy operation that is 

already participating in MPP-Dairy with 

an established production history, the 

son would get the production history 

already established by the participating 

dairy operation and would not be 

considered a new dairy operation for the 

purposes of MPP-Dairy. (No new 

production history would be created; it 

would only be transferred.) However, if 

the son purchased a dairy operation that 

lacked any production history, then the 

son may be considered a new dairy 

operation for MPP-Dairy purposes and 

could establish a new production 

history for that operation, subject to the 

affiliation rule. 

Other Eligibility Requirements and 

Limits 

MPP-Dairy benefits are not subject to 

payment limitations or average adjusted 

gross income (AGI) limitations that 

apply to most FSA and CCC programs. 

However, these benefits are subject to 

the conversation compliance 

requirements provided for in 7 CFR part 

12. Further, there is no set program 

maximum number of pounds any dairy 

operation can cover under the program. 

MPP-Dairy’s coverage limitation for a 

specific dairy operation is 90 percent of 

the operation’s production history. 

In general, all U.S. dairy producers 

are eligible to participate in MPP-Dairy 

through their eligible dairy operation; 

however, producers cannot participate 

in both MPP-Dairy and the Livestock 

Gross Margin for Dairy (LGM-Dairy) 

insurance program administered by the 

USDA Risk Management Agency (RMA). 

For 2014 and 2015, producers already 

enrolled in LGM-Dairy may register for 

MPP-Dairy, but in no case will they 

receive benefits from both programs. If 

an operation with LGM-Dairy coverage 

registers for MPP-Dairy, coverage under 

MPP-Dairy will not become effective 

until after the target month of 

marketings under LGM-Dairy has ended 

or the dairy operation provides proof 

that the LGM-Dairy policy has been 

cancelled. 

MPP-Dairy Coverage Levels 

As part of the annual coverage 

election process for MPP-Dairy, the 

dairy operation is required to select the 

level of coverage and pay an 

administrative fee and, if applicable, a 

premium based on the level of coverage 

elected. In addition, once a participating 

dairy operation registers for MPP-Dairy, 

regardless if it fails to make a coverage 

election, it must annually pay the 

administrative fee through December 31, 

2018. The level of coverage chosen by 

a participating dairy operation requires 

two selections. One is the margin trigger 

(between $4 and $8 per hundredweight 

(cwt), in 50 cent increments); the other 

is the percentage of production history 

that will be covered (from 25 percent to 

90 percent, in 5 percent increments). 

The operation can only select one 

margin trigger level and one percentage 

of production history; the operation 

cannot ‘‘split’’ the operation’s coverage 

and, for example, purchase $4 margin 


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coverage on 25 percent of production 

history and $8 coverage on 50 percent 

of production history. (At the 

catastrophic level coverage of $4, the 

producer will be paid when the margin, 

the difference between the price of milk 

and the cost of feed, falls below $4.) 

As specified in the 2014 Farm Bill, 

operations may elect a $4 per cwt 

margin trigger for the administrative fee 

of $100 with no premium owed. This 

rule defines this to be catastrophic level 

coverage, in that it provides the lowest 

level of margin protection offered under 

MPP-Dairy. If $4 margin coverage is 

selected, 90 percent of production 

history will be covered, the maximum 

amount of production coverage allowed 

by the 2014 Farm Bill. Alternatively, 

participating dairy operations may elect 

a higher margin trigger, up to $8 per cwt 

of milk (in 50 cent increments), for 25 

percent to 90 percent of production (in 

5 percent increments). Margin triggers 

higher than $4 require payment of a 

premium. At each margin trigger level, 

corresponding rates are different with 

respect to the first 4 million pounds 

(40,000 cwt) of covered production 

history and covered production history 

above 4 million pounds. As specified in 

the 2014 Farm Bill, the premiums for 

the first 4 million pounds of eligible 

covered production history will be 

reduced by 25 percent for each of 

calendar years 2014 and 2015. 

The annual premium rates listed in 

this regulation are specified in the 2014 

Farm Bill. USDA has no discretion to set 

different premium rates other than those 

in the 2014 Farm Bill. The premium 

will be determined based on the 

producer’s election of each of the 

margin trigger and percentage of 

coverage. The schedule of premiums 

below refers to these levels as Tier 1 

(first 4 million pounds of production 

history covered by the program) and 

Tier 2 (covered production in excess of 

4 million pounds). 

For example, a dairy operation with a 

production history of 6 million pounds 

that elects a coverage level of $6 and a 

50 percent coverage percentage will pay 

a premium based on the premium rate 

for covered production history for up to 

4 million pounds because as a function 

of the dairy operation election to cover 

at the 50 percent rate, only 3 million 

pounds of production history is being 

covered by the program. (Note that 

production history is in pounds, while 

the premium schedule below is per cwt, 

so we divide covered production by 100 

to calculate the premium). Therefore, in 

this example, the dairy operation pays 

a premium for a calendar year of 

coverage during 2016, in the amount of 

$1,650 based on 6 million pounds 

covered at a 50 percent coverage level, 

yielding 3 million pounds of covered 

production history. The 3 million 

pounds of production history multiplied 

by $0.055, the premium at the $6 margin 

level for covered production up to 4 

million pounds (50 percent of 6 million 

is 3 million; 3 million divided by 100 

is 30,000 cwt; 30,000 cwt x $0.055 per 

cwt =$1,650). The premium schedule is 

as follows; the 2014 Farm Bill specifies 

the amounts: 

Coverage level 

(margin) 

Tier 1 

Premium per 

cwt in 

2014 and 2015 

(for the 

covered 1

production 

history that is 

4 million 

pounds or less) 2

Tier 2 

Premium per 

cwt, all years 

(for the part 

of covered 1

production 

history over 4 

million pounds) 

$4.00 ............................................................................................................................................................ None None 

$4.50 ............................................................................................................................................................ $0.008 $0.020 

$5.00 ............................................................................................................................................................ 0.019 0.040 

$5.50 ............................................................................................................................................................ 0.030 0.100 

$6.00 ............................................................................................................................................................ 0.041 0.155 

$6.50 ............................................................................................................................................................ 0.068 0.290 

$7.00 ............................................................................................................................................................ 0.163 0.830 

$7.50 ............................................................................................................................................................ 0.225 1.060 

$8.00 ............................................................................................................................................................ 0.475 1.360 

1The ‘‘covered production history’’ is the amount elected for MPP-Dairy coverage by the dairy operation; this will be 25 percent to 90 percent. 

The catastrophic coverage level provided at the $4 margin is 90 percent. 

Coverage level 

(margin) 

Tier 1 

Premium per 

cwt in 2016, 

2017 and 2018 

(for the 

covered 1

production 

history that is 

4 million 

pounds or less) 

Tier 2 

Premium per 

cwt, all years 

(for the part 

of covered 1

production 

history over 4 

million pounds) 

$4.00 ............................................................................................................................................................ None None 

$4.50 ............................................................................................................................................................ $0.010 $0.020 

$5.00 ............................................................................................................................................................ 0.025 0.040 

$5.50 ............................................................................................................................................................ 0.040 0.100 

$6.00 ............................................................................................................................................................ 0.055 0.155 

$6.50 ............................................................................................................................................................ 0.090 0.290 

$7.00 ............................................................................................................................................................ 0.217 0.830 

$7.50 ............................................................................................................................................................ 0.300 1.060 

$8.00 ............................................................................................................................................................ 0.475 1.360 

1The ‘‘covered production history’’ is the amount elected for MPP-Dairy coverage by the dairy operation; this will be 25 percent to 90 percent. 

The catastrophic coverage level provided at the $4 margin is 90 percent. 


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The following is an example with 

higher coverage levels and both tiers of 

premium: If a dairy operation with an 

established production history of 10 

million pounds elects a coverage level 

of $8 and a 75 percent coverage 

percentage, 7.5 million pounds would 

be considered covered production 

history (10,000,000 × 0.75), and of that 

7.5 million pounds, 4 million pounds 

would be assessed at $0.475 rate from 

the lower (Tier 1) premium schedule for 

production at 4 million pounds or less 

(4,000,000 × $0.475/100 = $19,000), and 

the remaining 3.5 million pounds of 

covered production history would be 

assessed at the $1.360 rate from the 

higher premium schedule for 

production in excess of 4 million 

pounds (3,500,000 × $1.360/100 = 

$47,600). The dairy operation would 

pay a total premium for a calendar year 

of coverage in the amount of $66,600 

($19,000 + $47,600) based on 7.5 

million pounds of covered production 

history that falls under each premium 

schedule at the $8 coverage level. 

For calendar years 2014 and 2015, the 

premium per cwt for covered 

production that falls under the first 4 

million pound premium schedule will 

be reduced by 25 percent, except at the 

$8 coverage level, from the table shown 

above. The premium reduction is 

required by the 2014 Farm Bill. FSA 

will provide premium calculators on the 

FSA Web site, so that producers can 

evaluate the costs of different coverage 

options easily. 

Registration Process 

Registration of a dairy operation 

under MPP-Dairy results in a multi-year 

contract between CCC and the dairy 

operation. As discussed above, dairy 

operations agree to pay an 

administrative fee to register and 

annually thereafter through December 

31, 2018. In addition, a participating 

dairy operation is obligated to pay the 

premium, if any, associated with its 

annual coverage elections, through 

calendar year 2018. 

The $4 per cwt margin level coverage 

is available for a $100 administrative 

fee, without premium; higher levels of 

coverage are available for a premium 

plus the administrative fee. Operations 

must pay at least half the premium for 

the year (if applicable), plus the $100 

administrative fee, at the time of the 

election of coverage. Once the election 

period has ended, a dairy operation’s 

election of coverage is final and it can 

be changed only for the next calendar 

year of coverage during the next election 

period. 

The 2014 Farm Bill requires that 

USDA offer more than one method by 

which a participating dairy operation 

may pay the required premium in any 

manner that maximizes participating 

dairy operation payment flexibility and 

program integrity. Unless otherwise 

determined by the Deputy 

Administrator, at the time of coverage 

election, operations must pay either: 

(1) The full premium plus the 

administrative fee; or 

(2) A minimum of 50 percent of the 

total premium (if applicable) plus the 

administrative fee, with the remaining 

balance due no later than June 1 of the 

applicable calendar year of coverage. 

However, a premium calculated for 

calendar year 2014 only (which 

provides coverage through December of 

2014) must be paid in full at the time 

of coverage election. The coverage 

election period for 2014 partial year 

coverage and 2015 full year coverage 

will both be during the fall of 2014. New 

operations registered during a calendar 

year starting in 2015 will be allowed to 

pay a prorated premium for the first 

year of participation. 

If an operation fails to pay either the 

required annual administrative fee or 

premium owed on time, it remains 

obligated for payment of such 

administrative fee and entire premium, 

but will lose coverage until the 

premium is paid. If an operation does 

not make an annual coverage level 

election, it will still be liable for the 

administrative fee for the following 

year. It will automatically receive 

coverage at the $4 coverage level at 90 

percent, but only if the administrative 

fee is paid. For dairy operations that 

want to continue coverage levels 

established in the prior calendar year, 

the Deputy Administrator will establish 

a procedure to allow such coverage 

levels to continue that will include the 

requirement of a timely payment of 

administrative fees and any premiums, 

if applicable. 

How Margins Are Calculated To 

Determine Payments 

The 2014 Farm Bill specifies what 

prices for milk and feed USDA is 

required to use to calculate the ‘‘actual 

dairy production margin.’’ The margin, 

based on published USDA national data 

for milk and feed prices, is used to 

trigger payments under MPP-Dairy and 

the authority to make purchases under 

DPDP. The 2014 Farm Bill requires the 

margin to be based on the average price 

received, per cwt of milk, by dairy 

operations for all milk sold to plants 

and dealers in the United States. It also 

requires calculation of a national 

average feed cost, based on specific 

sources for the monthly price of corn, 

soybean meal, and alfalfa hay. 

Therefore, MPP-Dairy uses USDAreported monthly national average price 

data for all classes of milk (the all-milk 

price) and the cost of the three specified 

feeds, which represent the bulk of 

purchased feeds in dairy rations (corn, 

soybean meal, and alfalfa hay) to 

calculate the ‘‘actual dairy production 

margin’’ by subtracting from the price 

for a cwt of milk produced the cost of 

an average feed ration used to produce 

a cwt of milk. The 2014 Farm Bill 

prescribes that USDA calculate the 

actual dairy production margin in 

consecutive 2-month periods. 

If the actual dairy production margin 

falls below the selected margin coverage 

level of an operation for any such 

consecutive 2-month period, that 

operation will be eligible for a payment 

under MPP-Dairy. For example, if, for a 

particular consecutive 2-month period, 

the actual dairy production margin is 

$6, and the operation has chosen $4 

coverage level, there will be no 

payment, but if the operation had 

chosen the $7.50 coverage level on 50 

percent of production, it would have 

been paid $1.50 times 50 percent of its 

covered production history. A 

recalculation would occur in each 

subsequent 2-month period. MPP-Dairy 

pays only on the basis of such 2-month 

periods; in no case does the program 

pay for a period of low margins shorter 

than such 2-month periods. 

USDA will calculate the actual dairy 

production margin using the national 

‘‘all-milk price’’ minus the national 

‘‘average feed cost,’’ as those terms are 

specified in the 2014 Farm Bill. If the 

actual dairy production margin 

calculation produces a negative number, 

then the margin will be considered zero. 

For example, if the cost of feed is higher 

than the price of milk by $1 per cwt, the 

margin will be considered to be zero. 

The term ‘‘all-milk price’’ is defined in 

the 2014 Farm Bill to mean the average 

price received, per cwt of milk, by dairy 

operations for all milk sold to plants 

and dealers in the United States, as 

determined by USDA. The term 

‘‘average feed cost’’ is defined to mean 

the average cost of feed used by a dairy 

operation to produce a cwt of milk using 

the sum of: 

• 1.0728 times the price of corn per 

bushel; 

• 0.00735 times the price of soybean 

meal per ton; and 

• 0.0137 times the price of alfalfa hay 

per ton. 

The 2014 Farm Bill specifies which 

USDA-published price series FSA is 

required to use for such prices; FSA has 

no discretion in what prices to use. 

The 2014 Farm Bill requires the 

margin to be calculated using specific 


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consecutive 2-month pairs—January and 

February, March and April, May and 

June, July and August, September and 

October, and November and December. 

If a dairy operation has a premium 

due at the time it becomes eligible for 

a payment under MPP-Dairy, the 

premium will be automatically 

deducted from the payment. If the 

premium is overdue (past June 1 of the 

coverage year) however, an operation 

will not be eligible for a payment, 

because it will have lost coverage. In the 

case of an operation with an overdue 

premium, the operation will regain 

coverage only after any overdue 

premium is paid, in which case it would 

be eligible for the next consecutive 2- 

month period after such payment of 

premium. 

DPDP—Overview 

In addition, this rule provides 

regulations for DPDP, authorized by 

section 1431 of the 2014 Farm Bill (7 

U.S.C. 9071). DPDP shares certain goals 

of MPP-Dairy, in that it is intended to 

support dairy producer margins by 

triggering the obligation to purchase 

dairy products when the dairy 

production margin fall below a certain 

level. Under DPDP, USDA will purchase 

dairy products to support dairy 

producer margins and to provide such 

products to individuals in low-income 

groups through public and private nonprofit organizations. The 2014 Farm Bill 

specifies that such purchases will be 

made whenever the ‘‘actual dairy 

production margin’’, calculated using a 

formula prescribed in the 2014 Farm 

Bill, is determined to be $4 or less per 

cwt for 2 consecutive months. 

The 2014 Farm Bill specifies that the 

same margin calculation is used for both 

MPP-Dairy and DPDP. The ‘‘actual dairy 

production margin’’ is, as it is under 

MPP-Dairy, the difference between the 

‘‘all-milk price’’ (the average U.S. price 

for producer milk sold to plants and 

dealers as specified in section 1401 of 

the 2014 Farm Bill (7 U.S.C. 9051)) and 

the average feed cost determined using 

the formula specified in sections 1401 

and 1402 (7 U.S.C. 9052) of the 2014 

Farm Bill. The feed cost formula is the 

same as specified for MPP-Dairy, and 

was discussed above in the MPP-Dairy 

section of this document. Once 

triggered, DPDP purchases end when— 

• DPDP purchases have occurred for 

3 consecutive months (regardless of the 

actual dairy production margin at the 

end of those 3 months), 

• The actual dairy production margin 

for the previous month goes above $4 

per cwt, or 

• The U.S. price for cheddar cheese 

or nonfat dry milk (NDM) exceeds the 

world price by certain levels (5 percent 

if the actual dairy production margin is 

at or below $4 but above $3 or 7 percent, 

if such margin is $3 or less). 

DPDP is intended to time its 

purchases to support dairy producers in 

times of low margins, reinforcing and 

supporting the dairy producer support 

provided by MPP-Dairy. Reflecting that 

relationship, the 2014 Farm Bill 

specifies that DPDP is required to be 

established no later than 120 days after 

the Secretary certifies that MPP-Dairy is 

operational. USDA has chosen to make 

the two programs effective at the same 

time. The Secretary determined that 

additional time was not required to 

implement DPDP as FSA and FNS will 

be able to use existing expertise with 

purchasing and distributing similar 

products to the same recipients. 

As specified in section 1431 of the 

2014 Farm Bill, DPDP purchases will be 

distributed for domestic consumption 

by individuals in low-income groups 

through public and private non-profit 

organizations. Further, the DPDP 

purchases cannot be stored by CCC. 

DPDP purchases will be made in 

package sizes suitable for immediate 

household use, to facilitate direct 

distribution to individuals through 

participating public and private 

nonprofit organizations. The 2014 Farm 

Bill specifically prohibits re-sales of 

DPDP-purchased products into the 

commercial market. 

The 2014 Farm Bill requires USDA 

consultation with public and private 

nonprofit organizations that feed lowincome groups, in order to determine 

the types and quantities of dairy 

products to be purchased and 

distributed under DPDP. This will be 

achieved through existing FNS food 

program consultations. 

Administration of DPDP 

This rule implements DPDP as 

specified in the 2014 Farm Bill. DPDP 

purchases will be made using CCC 

funds. The 2014 Farm Bill authorizes 

DPDP through December 31, 2018. As 

specified in this rule, FSA will operate 

DPDP for CCC with assistance from 

FNS. 

Distribution of DPDP purchases will 

be made to public and private non-profit 

organizations eligible to participate in 

FNS’ food distribution programs for 

low-income individuals. 

Purchase quantities may be limited to 

meet the 2014 Farm Bill’s immediate 

distribution requirement, taking into 

account impacts on present demand in 

order to limit potential short- and longterm market disruptions. 

When will FSA make DPDP purchases? 

The 2014 Farm Bill specifies that the 

DPDP purchases are required to start 

after any consecutive 2 month period 

when margins are below $4, with a 

maximum of 3 consecutive months of 

purchases. If prices rise above the $4 

margin level during a month of 

purchases, DPDP purchases will 

terminate at the end of that month, so 

in that case it might operate for only 1 

or 2 months. As specified in the 2014 

Farm Bill, after 3 consecutive months of 

purchases, the DPDP purchases are 

required to cease (terminate) until there 

have been at least 2 more consecutive 

months of margins of $4 or less. 

Because full data for a given month is 

not available until the following month 

(see example below) and the 2014 Farm 

Bill requires that program activity be on 

a monthly basis, this effectively means 

that no purchases may be made for 3 

months following the end of a purchase 

period, even if margins remain below 

the trigger level. This rolling ‘‘up to 3 

months on, 3 months off’’ procedure for 

DPDP purchases is consistent with the 

2014 Farm Bill goal of having a longterm intermittent tool for addressing 

low margins and providing nutrition 

assistance. DPDP is intended to time its 

purchases to support dairy producer 

margins by reducing the supply of dairy 

products. Given relatively inelastic 

(constant) demand, such purchases 

should drive the market price of dairy 

products up, hopefully also driving 

margins above the trigger level. In some 

cases, prices and margins will rise 

sufficiently to engender only a 1or 2- 

month purchase period. In that case, the 

3 month ‘‘off’’ requirement still applies, 

as required by the 2014 Farm Bill. 

Data for calculating the domestic 

versus world price differential will not 

be available immediately at the end of 

a month, so DPDP purchases will not 

commence or terminate until the full 

month after all data for a month 

becomes available. For example, and as 

shown in the chart below if actual dairy 

production margins in May and June fall 

below the ‘‘trigger’’ level, the data for 

June would be available in July, but not 

in time to start making DPDP purchases 

immediately on July 1. Therefore, the 

DPDP purchases would start in August 

based on May and June data. If July 

data, which would be available in 

August, showed that margins were still 

below the trigger, DPDP purchases 

would continue in September. If 

margins rise above the trigger level in 

July, the DPDP purchases would 

terminate at the end of August, and the 

next eligible month for calculations 

would be September. If margins in 


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September and October were below the 

trigger level, with October data available 

in November, the DPDP purchases 

would start up again in December. But 

if margins remained consistently below 

the trigger level for the entire period in 

this example, the DPDP purchases 

would continue in September and 

October, based on May, June, July, and 

August data, and could not start up 

again until February, based on 

November data and December data, 

which would become available in 

January. The following chart shows an 

example of the timing for the 

determination of DPDP purchases. 

DPDP PURCHASE DETERMINATION EXAMPLE

[Based on dairy production margins and 3-month maximum for purchases 1] 

2 Consecutive 

months 

Calculate margin 

for 2 consecutive 

months 2

If both margins below $4 per cwt in 

the 2 consecutive months 3-Month maximum consideration 

If either margin above 

$4 per cwt in the 2 

consecutive months 

January and February.March ................... Dairy product purchases 3 begin in 

April.

1st month of purchases ..................... No purchases. 

February and 

March.

April ..................... Dairy product purchases 3 begin in 

May.

2nd consecutive month of purchases No purchases. 

March and April ..... May ...................... Dairy product purchases 3 begin in 

June.

3rd consecutive month of purchases No purchases. 

April and May ........ June 4 ................... No purchases; terminated after 3 

consecutive months.

3-month maximum reached (1st 

month off).

No purchases. 

May and June ....... July ...................... No purchases; terminated after 3 

consecutive months.

3-month maximum reached (2nd 

month off).

No purchases. 

June and July ........ August ................. No purchases; terminated after 3 

consecutive months.

3-month maximum reached (3rd 

month off).

No purchases. 

July and August .... September ........... Dairy product purchases 3 begin in 

October.

1st month of purchases ..................... No purchases. 

August and September.October ................ Dairy product purchases 3 begin in 

November.

2nd consecutive month of purchases No purchases. 

September and October.November ............ Dairy product purchases 3 begin in 

December.

3rd consecutive month of purchases No purchases. 

October and November.December ............ No purchases; terminated after 3 

consecutive months.

3-month maximum reached (1st 

month off).

No purchases. 

November and December.January ................ No purchases; terminated after 3 

consecutive months.

3-month maximum reached (1st 

month off).

No purchases. 

1This example assumes that purchases begin in January. In reality, DPDP can—depending on prices and margin triggers—begin on September 1, 2014, which is the start of MPP-Dairy. 2The full month data for a given month is available at the end of the following month. For example, January data are not available until the 

end of February. 2Purchases cannot begin unless domestic cheddar cheese or nonfat dry milk prices are at certain differentials relative to world prices. 3 In the example, June is the 3rd month of consecutive purchases. June would not be calculated as a potential trigger month, but it is shown 

on the chart to clearly show the concept of 3 months on and 3 months off for purchases. If purchases are taking place during a month, that 

month cannot be used as a trigger month for a future purchase period. 

The trigger level is a $4 margin per 

cwt of milk, with an additional 

requirement from the 2014 Farm Bill 

that USDA’s authority for purchases 

will end if the U.S. price and world 

price differential for cheddar cheese or 

nonfat dry milk exceeds certain 

percentage levels, even when margins 

remain at $4 or less. In other words, 

FSA will stop making DPDP purchases, 

even if the margins are at $4 or less, if 

the U.S. price for certain dairy products 

is significantly above world prices. As 

required by the 2014 Farm Bill, FSA 

will stop making DPDP purchases if the 

margin is $4 or less but above $3 and 

the U.S. price is more than 5 percent 

above the world price or if the margin 

is at or below $3, DPDP will not make 

purchases if the price differential is 

more than 7 percent. 

If DPDP purchases were suspended 

due to domestic prices being sufficiently 

above world prices, margins would be 

tracked for the next 2 months, and 

purchases could begin after 3 months. 

For example, at the end of July, it would 

be known if May and June margins were 

at or below $4 per cwt. If margins for 

both May and June were at $4 or less per 

cwt, and the relation between domestic 

and world prices did not preclude it, the 

DPDP purchasing process would start 

August 1. At the end of August, the July 

margin could be calculated and if at $4 

or less per cwt, DPDP purchases would 

continue in September (the second 

consecutive month ‘‘on’’). If the July 

margin were above $4 per cwt, DPDP 

purchase activity would cease August 

31, and DPDP purchases could next be 

made in December (after the required 3 

months ‘‘off’’), if September and October 

margins were at $4 or less per cwt. If 

July and August margins were both at $4 

or less per cwt, DPDP purchases would 

continue in September and October and 

end due to the 3-month maximum of 

purchases. If November and December 

margins were at $4 or less per cwt, 

DPDP purchase activities could begin 

again in February (after the required 3 

months ‘‘off’’). 

DPDP will not stop or start making 

purchases in the middle of a month 

even if the margin or the world price 

data has hit one of the ‘‘trigger’’ 

numbers mid-month. 

U.S. Price Versus World Market Price 

Differential Trigger 

The calculations for the price 

differential determination (which 

require a comparison of U.S. prices and 

world prices) as specified in this rule 

allow FSA to consult with other 

agencies of USDA that collect foreign 

and domestic price data, such as the 

Agricultural Marketing Service (AMS). 

The 2014 Farm Bill specifies that USDA 

is required to calculate the differential 

between U.S. prices and world prices 

for cheddar cheese and nonfat dry milk; 

it does not specify what data FSA 

should use for U.S. prices or world 

prices. For world prices FSA expects 

(although not specified in the 


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regulations) to use the AMS Oceania 

price series because of the quantity of 

sales in that series. Alternatively, FSA 

could use a multi-region weighted 

average or some other method to make 

the determinations, if those other 

methods are more appropriate for 

calculating a relevant world price. FSA 

expects to base U.S. prices on the AMS 

monthly prices for cheddar cheese and 

nonfat dry milk, although FSA may use 

a different data set, as needed. 

FSA intends to post the price 

calculation method and results, and 

purchase determinations, on the FSA 

Web site. If another method proves to be 

more appropriate for providing 

information to the public, it will replace 

the planned on-line posting. 

Product Determinations 

The 2014 Farm Bill requires USDA 

consultation with public and private 

nonprofit organizations to determine the 

types and quantities of products to 

purchase through DPDP. This 

requirement will be met by FNS’s 

existing food program consultations 

with groups involved in the distribution 

of food to low-income people, including 

food banks, State and local agencies, 

and advocacy organizations. DPDP 

purchases are expected to be made in 

package sizes suitable for immediate 

household use, to best accommodate the 

immediate distribution requirement of 

the 2014 Farm Bill, in a manner that is 

cost effective to the U.S. taxpayer. 

Comments Requested on Cost Effective 

Purchases 

FSA is requesting comments on how 

to best administer the dairy product 

purchases for DPDP to ensure that dairy 

prices are increased in the most cost 

effective way. In your comments, please 

suggest options and provide data to 

show the cost effectiveness of the 

suggestion as it relates to the goals of 

DPDP. 

Distribution and Use of DPDP 

Purchases 

The 2014 Farm Bill requires that 

products purchased under DPDP will: 

• Be distributed in a manner that 

encourages their domestic consumption 

by individuals in low-income groups; 

• Be distributed using the services of 

public and private nonprofit 

organizations; and 

• Not be resold back into commercial 

markets by any organization that 

receives them. 

It is expected that all these 

requirements will be addressed as 

specified in the regulations for the 

existing FNS programs through which 

the products will be distributed. Public 

or private nonprofit organizations that 

receive DPDP products may transfer 

those products to other nonprofits only 

if the transferee will likewise distribute 

to domestic low-income recipients 

without cost or waste, consistent with 

existing FNS regulations. FNS 

regulations in 7 CFR 250.13(d)(1) 

provide that donated foods ‘‘be 

distributed only to recipient agencies 

and individual recipients eligible to 

receive them’’ under applicable program 

regulations. FNS regulations in 7 CFR 

250.13(a)(1)(ii) provide that donated 

foods ‘‘not be sold, exchanged or 

otherwise disposed of without the 

approval of the Department.’’ Any losses 

of donated foods resulting from 

improper distribution or use will be 

subject to the requirements of 7 CFR 

part 250 and the instruction and 

guidance provided in FNS Instruction 

410–1, Rev 2 ‘‘Claims for Losses of 

Donated Foods and Related 

Administrative Losses—Procedures for 

the State Distributing Agency,’’ and in 

FNS Instruction 420–1, ‘‘Managing 

Agency Debts.’’ 

Start of DPDP 

This rule specifies that DPDP is 

effective the day this rule is published, 

in the sense that it provides the 

regulations and purchase authority 

necessary to operate DPDP, but FSA will 

not make DPDP purchases unless other 

price and margin requirements are met. 

Because MPP-Dairy and DPDP use the 

same definition of actual dairy 

production margin, which is defined in 

the 2014 Farm Bill using existing USDA 

reported data, FSA will have data on 

actual dairy production margins the day 

this rule is effective. Therefore, if 

margins have been at $4 or less for the 

2 months before the effective date of this 

rule, and all other requirements are met 

for eligible purchase months, including 

the world price differential, DPDP can 

begin making purchases the first full 

month that DPDP is effective. 

In preparation of starting to make 

DPDP purchased, FSA will closely 

monitor the margins and related 

information to analyze the potential 

need for starting DPDP purchases. If the 

analysis shows that DPDP would be 

expected to trigger, FSA will consult 

with FNS, then FNS will determine the 

types and quantities of products that 

will be purchased, in consultation with 

public or private nonprofit 

organizations and State and local 

agencies eligible to receive such 

products. When the list of products and 

other details, such as size of the 

packaged products is identified, FSA 

will analyze various factors, including 

the expected result on the dairy market 

of the various purchasing options to 

determine the best combination and 

quantity of dairy products to purchase 

to meet the dual goals of the program: 

(1) To support dairy producer margins 

and (2) to provide dairy products to 

individuals in low-income groups 

through public and private non-profit 

organizations. The process of 

determining the exact combination of 

dairy products to be purchased and the 

quantity to purchase will continue 

through the bid solicitation process to 

ensure the dual goals of DPDP are 

achieved at the least cost to taxpayers. 

FSA will purchase the types and 

quantities of products determined 

through this process. 

Structure of This Rule 

This rule specifies the regulations for 

MPP-Dairy in 7 CFR part 1430, subpart 

A, replacing the regulations for the 

Dairy Product Price Support Program, 

which is no longer authorized. It 

specifies the regulations for DPDP in 

subpart C, replacing the regulations for 

the 2004 Dairy Disaster Assistance 

Payments Program, which is also no 

longer authorized. As part of FSA’s 

ongoing retrospective review efforts, 

this rule also removes the regulations in 

subpart D for the Market Loss 

Assistance Program and subpart E for 

the 2005 Dairy Disaster Assistance 

Payment Program, both of which are 

also no longer authorized. 

Notice and Comment 

In general, the Administrative 

Procedure Act (5 U.S.C. 553) requires 

that a notice of proposed rulemaking be 

published in the Federal Register and 

interested persons be given an 

opportunity to participate in the 

rulemaking through submission of 

written data, views, or arguments with 

or without opportunity for oral 

presentation, except when the rule 

involves a matter relating to public 

property, loans, grants, benefits, or 

contracts. Regulations to implement the 

provisions of Title I of the 2014 Farm 

Bill and the administration of Title I are 

exempt from the notice and comment 

provisions of 5 U.S.C. 553 and the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35), as specified in section 

1601(c)(2) of the 2014 Farm Bill. 

Comments Requested on 

Intergenerational Transfers and Family 

Members Joining an Operation 

The 2014 Farm Bill exempts CCC 

from notice and comment rulemaking 

under 5 U.S.C. 553 with respect to MPPDairy and DPDP; however, FSA would 

like to invite comments with respect to 


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the establishment of additional 

production history under MPP-Dairy. 

Section 1401(9) of the 2014 Farm Bill 

and this rule define the term 

‘‘production history’’ as the production 

history determined for a dairy operation 

when a participating dairy operation 

first registers to participate in MPPDairy. Section 1405(a) provides, except 

as provided in section 1405(b), the 

production history of the dairy 

operation is equal to the highest annual 

milk marketings of the dairy operation 

during any one of the 2011, 2012, or 

2013 calendar years, with an adjustment 

in subsequent years to reflect any 

increase in national average milk 

production. Section 1405(b) provides 

that in the case of a participating dairy 

operation that has been in operation for 

less than a year, the dairy operation 

elect one of two methods for the 

Department to determine the production 

history of the dairy operation: 

• The volume of the actual milk 

marketings extrapolated to a yearly 

amount, or 

• An estimate of actual milk 

marketings based on the herd size 

relative to the national rolling average 

data. 

The provisions in this regulation are 

consistent with the 2014 Farm Bill. 

The 2014 Farm Bill provisions 

regarding MPP-Dairy and the rule do not 

address the establishment of additional 

production history for a participating 

dairy operation in specific instances, 

such as an inter-generational transfer or 

when a family member joins a 

participating dairy operation. Other 

statutory provisions of MPP-Dairy do 

suggest that Congress intended to 

benefit smaller dairy operations, which 

tend to be family owned and operated. 

These provisions include the 

establishment of lower premium rates 

for insured annual production of less 

than 4,000,000 pounds. This rule does 

not take into account the size and 

structure of the dairy operation in 

determining whether the operation can 

adjust its production history to assist 

small, family dairy operations, 

especially with intergenerational 

transfers of the operation. FSA invites 

interested parties to address whether the 

regulation should be amended to 

authorize the establishment of 

additional production history, and if so, 

whether limitations should be imposed 

on any increases. Specifically, FSA 

requests comments on the following 

questions; please include any data that 

supports your comments: 

1. Does the provision in the rule 

regarding transfers of production history 

hinder intergenerational transfers of 

dairy operations? If so, how? 

2. How would you suggest the rule be 

amended to accommodate 

intergenerational transfers or adult 

children who want to join their parent’s 

dairy operation and obtain additional 

production history for the dairy 

operation? 

3. If additions to production history 

based on intergenerational transfers or 

adult children joining family dairies are 

allowed, should there be a cap on the 

overall amount of production history 

that cannot be exceeded or a percentage 

or quantity limitation on the amount by 

which the production history could be 

increased per participating dairy 

operation under this provision? If so, 

what amount? 

Effective Date 

The Administrative Procedure Act (5 

U.S.C. 553) provides generally that 

before rules are issued by Government 

agencies, the rule is required to be 

published in the Federal Register, and 

the required publication of a substantive 

rule is to be not less than 30 days before 

its effective date. One of the exceptions 

is when the agency finds good cause for 

not delaying the effective date. 

Subsection 1601(c)(2) of the 2014 Farm 

Bill makes this final rule exempt from 

notice and comment. Therefore, using 

the administrative procedure provisions 

in 5 U.S.C. 553, FSA finds that there is 

good cause for making this rule effective 

less than 30 days after publication in the 

Federal Register. This rule allows FSA 

to provide adequate notice to dairy 

operations about the new MPP-Dairy so 

they will be ready to begin enrollment 

no later than September 1, 2014, as 

required by section 1403 of the 2014 

Farm Bill. Therefore, to begin providing 

benefits to operations in a timely 

fashion, the MPP-Dairy regulations in 7 

CFR part 1430, subpart A are effective 

when published in the Federal Register. 

Section 1431 of the 2014 Farm Bill 

requires that DPDP be operational no 

later than 120 days after MPP-Dairy, but 

as discussed above, USDA decided to 

make DPDP effective at the same time as 

MPP-Dairy, so as not to delay needed 

assistance to dairy operations and low 

income groups. A 30 day delay in the 

effective date would unnecessarily 

delay needed assistance to dairy 

operations and individuals in low 

income groups. 

Executive Orders 12866 and 13563 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review,’’ direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). Executive Order 13563 

emphasized the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. 

The Office of Management and Budget 

(OMB) designated this rule as 

economically significant under 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and therefore, 

OMB has reviewed this rule. This 

regulatory action is being taken to 

implement two programs required by 

the 2014 Farm Bill. A summary of the 

cost-benefit analysis of this rule is 

provided below and the full cost benefit 

analysis is available on regulations.gov. 

Cost Benefit Analysis Summary 

The current actual dairy production 

margin is about $12, so neither DPDP 

nor MPP-Dairy would have any cost in 

the first month. If current milk prices 

and cattle feed prices continue through 

the end of 2018, the payments to dairy 

producers from the government via 

MPP-Dairy and DPDP will be zero. Any 

program payments would be more than 

offset by MPP-Dairy premiums and fees. 

However, in the event of prolonged low 

margins, programs outlays could exceed 

$100 million per year. 

If actual margins vary significantly 

from mean projections used for the 2015 

President’s Budget Midsession Review, 

DPDP is expected to trigger twice during 

the 2015 to 2018 period and total cost 

is expected to be about $400 million 

over the 4-year period, for an average 

cost of $100 million per year. That is a 

net cost to the government for both 

MPP-Dairy and DPDP, meaning the 

projected total payments to producers 

and the cost of the dairy products 

purchased minus the MPP-Dairy fees 

and premiums paid to CCC. Nearly all 

of the impacts estimated in this analysis 

are transfers between entities within 

society. For example, DPDP results in an 

average annual cost to the government 

of about $30 million for dairy product 

purchases (cost side of the transfer), 

which would be balanced by low 

income individuals receiving $30 

million worth of free dairy products 

(benefit side of the transfer). 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601–612), as amended by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to the notice and comment 


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Federal Register / Vol. 79, No. 168 / Friday, August 29, 2014 / Rules and Regulations 51461 

rulemaking requirements under the 

Administrative Procedure Act or any 

other law, unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. This rule is 

not subject to the Regulatory Flexibility 

Act because the 2014 Farm Bill exempts 

CCC from notice and comment 

rulemaking under 5 USC 553 with 

respect to these programs and therefore, 

CCC is not required by any law to 

publish a proposed rule for public 

comment for this rulemaking. 

Environmental Review 

The environmental impacts of this 

final rule have been considered in a 

manner consistent with the provisions 

of the National Environmental Policy 

Act (NEPA, 42 U.S.C. 4321–4347), the 

regulations of the Council on 

Environmental Quality (40 CFR parts 

1500–1508), and the FSA regulations for 

compliance with NEPA (7 CFR part 

799). FSA has determined that the 

provisions identified in this final rule 

are administrative in nature, intended to 

clarify the mandatory requirements of 

the programs, as defined in the 2014 

Farm Bill, and do not constitute a major 

Federal action that would significantly 

affect the quality of the human 

environment, individually or 

cumulatively. The few discretionary 

features of the rules include establishing 

deadlines, determinations of eligibility 

and prices, and purchase procedures, 

and have been selected largely based on 

pre-existing USDA programs. While 

these dairy programs are new, their 

creation is mandated by the 2014 Farm 

Bill, and are therefore not subject to 

review under NEPA. The few 

discretionary provisions left for FSA to 

determine were all purely 

administrative and would not alter any 

environmental impacts resulting from 

implementing the mandatory programs. 

Therefore, as this rule presents 

administrative clarifications only, FSA 

will not prepare an environmental 

assessment or environmental impact 

statement for this regulatory action. 

Executive Order 12372 

Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs,’’ requires consultation with 

State and local officials. The objectives 

of the Executive Order are to foster an 

intergovernmental partnership and a 

strengthened Federalism, by relying on 

State and local processes for State and 

local government coordination and 

review of proposed Federal Financial 

assistance and direct Federal 

development. For reasons specified in 

the final rule related notice regarding 7 

CFR part 3015, subpart V (48 FR 29115, 

June 24, 1983), the programs and 

activities within this rule are excluded 

from the scope of Executive Order 

12372, which requires 

intergovernmental consultation with 

State and local officials. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, ‘‘Civil Justice 

Reform.’’ This rule will not preempt 

State or local laws, regulations, or 

policies unless they represent an 

irreconcilable conflict with this rule. 

The rule will not have retroactive effect. 

Before any judicial action may be 

brought regarding the provisions of this 

rule, the administrative appeal 

provisions of 7 CFR parts 11 and 780 are 

to be exhausted. 

Executive Order 13132 

This rule has been reviewed under 

Executive Order 13132, ‘‘Federalism.’’ 

The policies contained in this rule do 

not have any substantial direct effect on 

States, on the relationship between the 

Federal government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government, except as required 

by law. Nor does this rule impose 

substantial direct compliance costs on 

State and local governments. Therefore, 

consultation with the States is not 

required. 

Executive Order 13175 

This rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, ‘‘Consultation 

and Coordination with Indian Tribal 

Governments.’’ Executive Order 13175 

requires Federal agencies to consult and 

coordinate with tribes on a governmentto-government basis on policies that 

have tribal implications, including 

regulations, legislative comments or 

proposed legislation, and other policy 

statements or actions that have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

FSA has assessed the impact of this 

rule on Indian tribes and determined 

that this rule does not, to our 

knowledge, have tribal implications that 

require tribal consultation under 

Executive Order 13175. If a Tribe 

requests consultation, FSA will work 

with the USDA Office of Tribal 

Relations to ensure meaningful 

consultation is provided where changes, 

additions, and modifications identified 

in this rule are not expressly mandated 

by the 2014 Farm Bill. 

The Unfunded Mandates Reform Act of 

1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA, Pub. L. 

104–4) requires Federal agencies to 

assess the effects of their regulatory 

actions on State, local, and Tribal 

governments, or the private sector. 

Agencies generally need to prepare a 

written statement, including a cost 

benefit analysis, for proposed and final 

rules with Federal mandates that may 

result in expenditures of $100 million or 

more in any year for State, local, or 

Tribal governments, in the aggregate, or 

to the private sector. UMRA generally 

requires agencies to consider 

alternatives and adopt the more cost 

effective or least burdensome alternative 

that achieves the objectives of the rule. 

This rule contains no Federal mandates, 

as defined in Title II of UMRA, for State, 

local, and Tribal governments or the 

private sector. Therefore, this rule is not 

subject to the requirements of sections 

202 and 205 of UMRA. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA) 

This rule is a major rule under the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, (Pub. L. 104–121, 

SBREFA). SBREFA normally requires 

that an agency delay the effective date 

of a major rule for 60 days from the date 

of publication to allow for 

Congressional review. Section 808 of 

SBREFA allows an agency to make a 

major regulation effective immediately 

if the agency finds there is good cause 

to do so. Section 1601(c)(3) of the 2014 

Farm Bill provides that the authority in 

section 808 of SBREFA be used in 

implementing the changes required by 

Title I of the 2014 Farm Bill, such as for 

the changes being made by this rule. 

Consistent with section 1601(c)(3) of the 

2014 Farm Bill, FSA therefore finds that 

it would be contrary to the public 

interest to delay the effective date of this 

rule, because it would delay 

implementation MPP-Dairy as required 

in the 2014 Farm Bill. The regulation 

needs to be effective to provide 

adequate time for producers to be ready 

to begin the sign-up process in a timely 

fashion to allow coverage to begin by 

September 1, 2014. Therefore, the rule 

is effective when published in the 

Federal Register. 

Federal Assistance Programs 

The title and number of the Federal 

Domestic Assistance Program found in 

the Catalog of Federal Domestic 


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51462 Federal Register / Vol. 79, No. 168 / Friday, August 29, 2014 / Rules and Regulations 

Assistance to which this rule applies 

are: 

10.116—Margin Protection ProgramDairy 

10.115—Dairy Product Donation 

Program 

Paperwork Reduction Act of 1995 

The regulations in this rule are 

exempt from the requirements of the 

Paperwork Reduction Act (44 U.S.C. 

Chapter 35), as specified in subsection 

1601(c)(2)(B) of the 2014 Farm Bill, 

which provides that these regulations be 

promulgated and administered without 

regard to the Paperwork Reduction Act. 

E-Government Act Compliance 

FSA and CCC are committed to 

complying with the E-Government Act, 

to promote the use of the Internet and 

other information technologies to 

provide increased opportunities for 

citizen access to Government 

information and services, and for other 

purposes. 

List of Subjects in 7 CFR Part 430 

Dairy products, Fraud, Penalties, 

Price support programs, Reporting and 

recordkeeping requirements. 

For the reasons discussed above, the 

regulations at 7 CFR part 1430 are 

amended as follows: 

PART 1430—DAIRY PRODUCTS 

■ 1. The authority for part 1430 is 

revised to read as follows: 

Authority: 7 U.S.C. 8773, 9051–9060, and 

9071 and 15 U.S.C. 714b and 714c. 

■ 2. Revise 7 CFR part 1430, subpart A 

to read as follows: 

Subpart A—Margin Protection Program for 

Dairy Producers 

Sec. 

1430.100 Purpose. 

1430.101 Administration. 

1430.102 Definitions. 

1430.103 Eligible dairy operations. 

1430.104 Time and method of registration 

and annual election. 

1430.105 Establishment and transfer of 

production history for a participating 

dairy operation. 

1430.106 Administrative fees. 

1430.107 Buy-up coverage. 

1430.108 Margin protection payments. 

1430.109 Effect of failure to pay 

administrative fees or premiums. 

1430.110 Calculation of average feed cost 

and actual dairy production margins. 

1430.111 Relation to RMA’s LGM-Dairy 

Program. 

1430.112 Multi-year contract. 

1430.113 Contract modifications. 

1430.114 Reconstitutions. 

1430.115 Offsets and withholdings. 

1430.116 Assignments. 

1430.117 Appeals. 

1430.118 Misrepresentation and scheme or 

device. 

1430.119 Estates, trusts, and minors. 

1430.120 Death, incompetency, or 

disappearance. 

1430.121 Maintenance and inspection of 

records. 

1430.122 Refunds; joint and several 

liability. 

1430.123 Violations of highly erodible and 

wetland conservation provisions. 

1430.124 Violations regarding controlled 

substances. 

Subpart A—Margin Protection Program 

for Dairy Producers 

§ 1430.100 Purpose. 

The regulations in this subpart apply 

for the Margin Protection Program for 

Dairy (MPP-Dairy), which is authorized 

by sections 1401 through 1410 of the 

Agricultural Act of 2014 (Pub. L. 113– 

79, 7 U.S.C. 9051–9060). MPP-Dairy is 

intended to provide eligible dairy 

producers risk protection against low 

margins resulting from a combination of 

low milk prices and high feed costs. 

§ 1430.101 Administration. 

(a) MPP-Dairy is administered under 

the general supervision of the Executive 

Vice President, CCC, or a designee, and 

will be carried out by Farm Service 

Agency (FSA) State and county 

committees and employees. 

(b) State and county committees and 

their employees may not waive or 

modify any requirement of this subpart. 

(c) The State committee will take any 

action required when not taken by the 

county committee, require correction of 

actions not in compliance, or require the 

withholding of any action that is not in 

compliance with this subpart. 

(d) The Executive Vice President, 

CCC, or a designee, may determine any 

question arising under MPP-Dairy or 

reverse or modify any decision of the 

State or county committee. 

(e) The Deputy Administrator, Farm 

Programs, FSA, may waive or modify 

MPP-Dairy requirements not statutorily 

required when failure to meet such 

requirements does not adversely affect 

the operation of MPP-Dairy. 

(f) A representative of CCC will 

execute a contract for registration in 

MPP-Dairy and related documents 

under the terms and conditions 

determined and announced by the 

Deputy Administrator on behalf of CCC. 

Any document not under such terms 

and conditions, including any execution 

before the date authorized by CCC, will 

be null and void. 

§ 1430.102 Definitions. 

The definitions in this section are 

applicable for the purposes of 

administering MPP-Dairy established by 

this subpart. 

Actual dairy production margin 

means the difference between the allmilk price and the average feed cost, as 

calculated under § 1430.110. If the 

calculation would produce a negative 

number the margin will be considered 

to be zero. 

Administrative county office means 

the county office designated to make 

determinations, handle official records, 

and issue payments for the producer as 

specified in 7 CFR part 718. 

All-milk price means the national 

average price received, per 

hundredweight of milk, by dairy 

operations for all milk sold to dairy 

plants and milk dealers in the United 

States, as determined by the Secretary. 

AMS means the Agricultural 

Marketing Service of the USDA. 

Annual election period for MPP-Dairy 

means the period, each calendar year, 

established by the Deputy 

Administrator, for a dairy operation to 

register initially to participate in MPPDairy, pay associated administrative 

fees, and applicable premiums, or, if 

already registered as a participating 

dairy operation, to make annual 

coverage elections for an applicable 

calendar year. 

Average feed cost means the national 

average cost of feed used by a dairy 

operation to produce a hundredweight 

of milk, as determined under 

§ 1430.110(b). 

Buy up coverage means margin 

protection coverage for a margin 

protection level above $4 per 

hundredweight of milk. 

Catastrophic level coverage means $4 

per cwt margin protection coverage and 

a coverage percentage of 90 percent, 

with no premium assessed. 

CCC means the Commodity Credit 

Corporation of the U.S. Department of 

Agriculture. 

Commercially marketed means selling 

whole milk to either the market to 

which the dairy operation normally 

delivers and receives monetary 

compensation or other similar markets. 

Consecutive 2-month period means a 

2-month period consisting, respectively, 

of the months of January and February; 

March and April; May and June; July 

and August; September and October; or 

November and December. 

Contract means the terms and 

conditions to register for the MPP-Dairy 

as executed on a form prescribed by 

CCC and required to be completed by 

the dairy operation and accepted by 

CCC, including any contract 

modifications made in an annual 

election period before coverage for the 

applicable calendar year commences. 


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County committee means the FSA 

county committee. 

County office means the FSA office 

responsible for administering FSA 

programs for farms located in a specific 

area in a State. 

Covered production history is equal to 

the production history of the operation 

multiplied by the coverage percentage 

selected by the participating dairy 

operation. 

Dairy operation means a dairy 

operation as defined pursuant to the 

criteria and procedures under the Milk 

Income Loss Contract (MILC) Program 

or any dairy facility that was part of a 

single dairy operation that participated 

in the MILC Program as of February 7, 

2014. Operations that are determined to 

be ‘‘new operations’’ under this subpart, 

will be subject to the ‘‘affiliation’’ test 

under § 1430.103(e) if the operation 

elects to participate in MPP-Dairy 

separately. A single dairy operation 

operated by more than one dairy 

producer will be treated as a single 

dairy operation for purposes of 

participating in MPP-Dairy and can only 

submit one application. All dairy 

operations under this part shall 

commercially market milk produced 

from cows as a single unit located in the 

United States in which each dairy 

producer: 

(1) Has risk in the production of milk 

in the dairy operation; and 

(2) Makes contributions, including 

land, labor, management, equipment, or 

capital, to the dairy operation at least 

commensurate to the producers’ share of 

the operation. 

Deputy Administrator means the 

Deputy Administrator for Farm 

Programs, or designee. 

Farm Service Agency or FSA means 

the Farm Service Agency of the USDA. 

Hundredweight or cwt means 100 

pounds. 

Milk Income Loss Contract Program or 

MILC means the program established 

under section 1506 of the Food, 

Conservation, and Energy Act of 2008 (7 

U.S.C. 8773) and the regulations found 

in subpart B of this part. 

Milk marketing means a sale of milk 

for which there is a verifiable 

production record for milk 

commercially marketed. 

NASS means the National 

Agricultural Statistics Service of the 

USDA. 

New operation means a dairy 

operation that did not commercially 

market milk at least 12 full months as 

of February 7, 2014. 

Participating dairy operation means a 

dairy operation that registers to 

participate in MPP-Dairy under this 

part. 

Producer means any individual, group 

of individuals, partnership, corporation, 

estate, trust association, cooperative, or 

other business enterprise or other legal 

entity who is, or whose members are, a 

citizen of, or legal resident alien in the 

United States, and who directly or 

indirectly, shares in the risk of 

producing milk, makes contributions 

including land, labor, management, 

equipment, or capital to the dairy 

operation at least commensurate to the 

producers’ share of the operation, to the 

dairy operation of the individual or 

entity, as determined by the Deputy 

Administrator. 

Production history means the 

production history determined for a 

participating dairy operation when the 

participating dairy operation registers in 

MPP-Dairy. 

RMA means the Risk Management 

Agency of the USDA. 

Secretary means the Secretary of 

Agriculture. 

United States means the 50 States of 

the United States of America, the 

District of Columbia, American Samoa, 

Guam, the Commonwealth of the 

Northern Mariana Islands, the 

Commonwealth of Puerto Rico, the 

Virgin Islands of the United States, and 

any other territory or possession of the 

United States. 

USDA means the United States 

Department of Agriculture. 

Verifiable production records mean 

evidence that is used to substantiate the 

amount of production commercially 

marketed and that can be verified by 

CCC through an independent source. 

§ 1430.103 Eligible dairy operations. 

(a) The eligibility requirements for a 

dairy operation to register in MPP-Dairy 

and receive payments under this 

subpart, are to: 

(1) Produce milk from cows in the 

United States that is marketed 

commercially at the time of each annual 

election in MPP-Dairy; 

(2) Submit accurate and complete 

information as required by the this 

subpart; 

(3) Provide proof of milk production 

marketed commercially by all persons 

in the dairy operation to establish 

production history; 

(4) Not participate in the Livestock 

Gross Margin for Dairy (LGM-Dairy) 

Program administered by the USDA 

Risk Management Agency (RMA) under 

the Federal Crop Insurance Act (7 U.S.C. 

1501–1536), except to the extent 

permitted by this subpart, provided that 

under no circumstance may the 

operation receive coverage for the same 

period in MPP-Dairy for which 

payments have been received or earned 

under LGM-Dairy; and 

(5) Pay required administrative fees 

for participation in MPP-Dairy as 

specified in this subpart and any 

premiums, if applicable, as specified in 

this subpart. 

(b) A person or entity covered by 

§ 1400.401 of this chapter (hereafter 

‘‘foreign person’’) must meet the 

eligibility requirements contained in 

that section to receive payments under 

this part. A dairy operation with 

ineligible foreign persons as members 

will have any payment reduced by the 

proportional share of such members. 

(c) Federal agencies and States, 

including all agencies and political 

subdivisions of a State, are not eligible 

for payments under this subpart. 

(d) As specified in § 1430.104, each 

dairy operation is required to submit a 

separate registration to be eligible for 

MPP-Dairy coverage and payment. A 

producer who owns more than one 

eligible dairy operation may participate 

separately for each dairy operation; each 

eligible dairy operation must be 

registered separately, subject to the 

affiliation test for new operations. 

(e) A new dairy operation will be 

treated as an affiliated dairy operation 

and not be treated as a separate dairy 

operation under MPP-Dairy if producers 

that collectively own more than 50 

percent of the new dairy operation also 

collectively own more than 50 percent 

interest in another dairy operation 

registered in MPP-Dairy. 

§ 1430.104 Time and method of 

registration and annual election. 

(a) A dairy operation may register to 

participate in MPP-Dairy by submitting 

a contract prescribed by CCC. Dairy 

operations may obtain a blank contract 

in person, by mail, or by facsimile from 

any county office. In addition, dairy 

operations may download a copy of the 

forms at http://www.sc.egov.usda.gov. 

(b) Dairy operation shall submit 

completed contracts and any other 

supporting documentation during the 

annual election period established by 

the Deputy Administrator, to the 

administrative county office serving the 

dairy operation. 

(1) A new dairy operation that has 

been established after the most recent 

election period is required to submit a 

contract within the first 90 calendar 

days from the date on of which the dairy 

operation first commercially markets 

milk and may elect coverage that begins 

the next consecutive 2-month period 

following the approval date of the 

registration and coverage election; or 

(2) A new dairy operation that does 

not meet the 90 day requirement of 


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paragraph (b)(1) of this section cannot 

enroll until the next annual election 

period for coverage for the following 

calendar year. 

(c) Registration requests and coverage 

elections are to be submitted in time to 

be received at FSA by the close of 

business on the last day of the annual 

election period established by the 

Deputy Administrator. 

(1) The applicable year of coverage for 

contracts arising from accepted 

registrations in the annual election 

period will be the following calendar 

year, except for 2014, where the election 

and coverage year will be the same. 

(2) Registration requests and coverage 

elections submitted after the applicable 

allowed time for submission will not be 

considered. 

(3) During an annual election period, 

participating dairy operations may 

change coverage elections for the 

following calendar year. 

(d) To receive margin protection 

coverage, separate registrations are 

required for each separately constituted 

dairy operation. If a dairy producer 

operates more than one separate and 

distinct operation, the producer 

registers each operation for each 

operation to be eligible for coverage. 

(e) A participating dairy operation 

must elect, during the applicable annual 

election period and by using the form 

prescribed by CCC, the coverage level 

threshold and coverage percentages for 

that participating dairy operation for the 

applicable calendar year. 

(1) Once the initial completed 

registration is submitted and approved 

by CCC, it cannot be cancelled by the 

participating dairy operation through 

December 31, 2018; however, each 

calendar year subsequent to the initial 

registration of the participating dairy 

operation, it may elect to change the 

coverage level threshold and coverage 

percentage, on a form prescribed by 

CCC, during the election period for the 

applicable subsequent calendar year. 

For dairy operations that want to 

continue coverage levels established in 

the prior calendar year, the Deputy 

Administrator will establish a procedure 

to allow such coverage levels to 

continue that will include the 

requirement of a timely payment of 

administrative fees and any premiums, 

if applicable. 

(2) If the operation fails to file an 

update of its election during the annual 

election period, the coverage level will 

be reduced to the catastrophic level 

coverage, but such coverage will only be 

provided if the participating dairy 

operation pays the annual 

administrative fee for the relevant 

calendar year. 

(3) All producers in the participating 

dairy operation must agree to the 

coverage level threshold and coverage 

percentage elected by the dairy 

operation. 

(f) By registering to participate or 

receive payment under MPP-Dairy, 

producers in the participating dairy 

operation certify to the accuracy and 

truthfulness of the information in their 

applications and supporting 

documentation. 

(1) All producers in a participating 

dairy operation must sign and certify all 

submissions made under MPP-Dairy 

that relate to the level of coverage. 

(2) All information provided is subject 

to verification. FSA may require a dairy 

operation to provide documentation to 

support all verifiable records. 

Furnishing the information is voluntary; 

however, without it MPP-Dairy benefits 

will not be approved. Providing a false 

certification to the Federal Government 

may be punishable by imprisonment, 

fines, other penalties, or sanctions. 

(g) At the time the completed contract 

is submitted to FSA for the first year in 

which the dairy operation is to 

participate in MPP-Dairy, the dairy 

operation must also submit a separate 

form, as specified by CCC, to establish 

the production history for the dairy 

operation. 

§ 1430.105 Establishment and transfer of 

production history for a participating dairy 

operation. 

(a) A participating dairy operation 

must provide all information required 

by FSA to establish the production 

history of the participating dairy 

operation for purposes of participating 

in MPP-Dairy. Except as provided in 

paragraph (b) of this section relating to 

new dairy operations, FSA will 

establish the production history for a 

dairy operation for margin protection as 

the highest annual milk marketings of 

the participating dairy operation during 

any one of the 2011, 2012, or 2013 

calendar years. 

(1) All producers in the participating 

dairy operation are required to provide 

adequate proof of the dairy operation’s 

quantity of milk commercially 

marketed, to establish the production 

history for the dairy operation. 

(2) All information provided is subject 

to verification, spot check and audit by 

FSA. If the dairy operation does not 

provide to the satisfaction of FSA 

documentation requested to substantiate 

the production history of the highest 

annual milk marketings for the 

participating dairy operation, then, the 

registration will not be approved. 

(b) A participating dairy operation 

that did not produce and commercially 

market milk at least 12 full months as 

of February 7, 2014, will be considered 

a new dairy operation. To establish the 

production history for such a new dairy 

operation the new dairy operation is 

required to elect one of the following 

methods: 

(1) The volume of the actual milk 

marketings for the months the dairy 

operation has been in operation, 

extrapolated to a yearly amount based 

on a national seasonally adjusted index, 

as determined by the Deputy 

Administrator, to account for 

differences in milk production during 

the year; or 

(2) An estimate of the actual milk 

marketings of the dairy operation based 

on the herd size of the dairy operation 

relative to the national rolling herd 

average data published by the Secretary. 

(c) If FSA determines that the new 

enterprise was formed for the purpose of 

circumventing MPP-Dairy provisions, 

including, but not limited to, 

reconstituting a dairy operation to 

receive additional benefits, or 

establishing new production history, 

that enterprise will not be considered a 

new dairy operation for the purpose of 

establishing production history. 

(d) Once the production history of a 

participating dairy operation is 

established under paragraphs (a) or (b) 

of this section, the production history 

will be adjusted upward by FSA only to 

reflect any increase in the national 

average milk production, as determined 

by the Deputy Administrator. 

(e) The production history may be 

transferred from one dairy facility to 

another: 

(1) Producers of a dairy operation may 

relocate the dairy operation to another 

location and the production history of 

the original operation may be 

transferred to the new location and may 

be added to production history at the 

new location that has not been 

transferred; 

(2) Producers of a dairy operation may 

transfer ownership of a dairy operation 

with its associated production history, 

but if the producers start a new 

operation such new operation may only 

be eligible for new production history if 

the new operation is otherwise not 

affiliated with participants in MPPDairy as described in § 1430.103(e); or 

(3) Producers of more than one dairy 

operation that separately participate in 

MPP-Dairy may transfer the production 

histories of these dairy operations into 

a previously unregistered dairy 

operation. 

(f) If CCC waives the obligation, under 

MPP-Dairy of a participating dairy 

operation due to death or retirement of 

the producer or of the permanent 


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dissolution of the dairy operation or 

under other circumstances as 

determined by the Deputy 

Administrator, FSA may reestablish the 

production history provided that the 

production history has not been 

transferred. 

§ 1430.106 Administrative fees. 

(a) Dairy operations must pay an 

initial administrative fee to FSA in the 

amount of $100 to participate in MPPDairy at the time of initial registration 

to participate. Each approved 

participating dairy operation must also 

pay a $100 administrative fee each year 

through December 31, 2018. Annual 

administrative fees are due and payable 

to FSA through the administrative 

county FSA office no later than the 

close of business on the last day of the 

annual election period established by 

the Deputy Administrator for each 

applicable calendar year of margin 

protection coverage under MPP-Dairy. 

The administrative fee paid is nonrefundable. 

(b) The required annual 

administrative fee is per dairy 

operation. Therefore, multiple dairy 

producers in a single unit participating 

dairy operation are required to pay only 

one annual administrative fee for the 

participating dairy operation. 

Conversely, in the case of a dairy 

producer that operates more than one 

dairy operation, each participating dairy 

operation is required to pay a separate 

administrative fee annually. 

(c) Failure to pay the administrative 

fee timely will result in loss of margin 

protection coverage for the applicable 

calendar year. The payment will still be 

due, as provided in § 1430.109. 

§ 1430.107 Buy-up coverage. 

(a) For purposes of receiving MPPDairy coverage, a participating dairy 

operation may annually elect during an 

annual election period the following for 

the succeeding calendar year: 

(1) A coverage level threshold for 

margins that, per cwt, is equal to one of 

the following: $4, $4.50, $5, $5.50, $6, 

$6.50, $7, $7.50, or $8; and 

(2) A percentage of coverage for the 

production history from 25 percent to 

90 percent, in 5-percent increments. 

(b) In the absence of any such 

election, the applicable coverage level 

provided, with no premium due, is 

catastrophic level coverage. 

(c) A participating dairy operation 

that elects margin protection coverage 

above $4 is required to pay an annual 

premium based on coverage level and 

covered production history in addition 

to the administrative fee. Tier 1 applies 

to covered production history up to and 

including 4 million pounds; Tier 2 

applies to covered production history 

above 4 million pounds. 

(d) The premium per cwt of milk, 

based on the elected percentage of 

coverage of production history is 

specified in the following tables. 

TABLE 1 TO § 1430.107(D) 

Coverage level 

(margin) 

Tier 1 

Premium per cwt 

in 2014 and 2015 

(for the covered 1

production history 

that is 4 million 

pounds or less) 2

Tier 2 

Premium per cwt, 

all years 

(for the part of 

covered 1 production history over 4 

million pounds) 

$4.00 ............................................................................................................................................................ None None 

$4.50 ............................................................................................................................................................ $0.008 $0.020 

$5.00 ............................................................................................................................................................ 0.019 0.040 

$5.50 ............................................................................................................................................................ 0.030 0.100 

$6.00 ............................................................................................................................................................ 0.041 0.155 

$6.50 ............................................................................................................................................................ 0.068 0.290 

$7.00 ............................................................................................................................................................ 0.163 0.830 

$7.50 ............................................................................................................................................................ 0.225 1.060 

$8.00 ............................................................................................................................................................ 0.475 1.360 

1The catastrophic coverage level provided at the $4 margin is 90 percent. 

TABLE 2 TO § 1430.107(D) 

Coverage level 

(margin) 

Tier 1 

Premium per cwt 

after 2015 

(for the covered 1

production history 

that is 4 million 

pounds or less) 

Tier 2 

Premium per cwt, 

all years 

(for the part of 

covered 1 production history over 4 

million pounds) 

$4.00 ............................................................................................................................................................ None None 

$4.50 ............................................................................................................................................................ $0.010 $0.020 

$5.00 ............................................................................................................................................................ 0.025 0.040 

$5.50 ............................................................................................................................................................ 0.040 0.100 

$6.00 ............................................................................................................................................................ 0.055 0.155 

$6.50 ............................................................................................................................................................ 0.090 0.290 

$7.00 ............................................................................................................................................................ 0.217 0.830 

$7.50 ............................................................................................................................................................ 0.300 1.060 

$8.00 ............................................................................................................................................................ 0.475 1.360 

1The catastrophic coverage level provided at the $4 margin is 90 percent. 

(e) The annual premium due for a 

participating dairy operation is 

calculated by multiplying: 

(1) The covered production history; 

and 

(2) The premium per cwt of milk 

specified in paragraph (d) of this section 


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51466 Federal Register / Vol. 79, No. 168 / Friday, August 29, 2014 / Rules and Regulations 

for the coverage level elected by the 

dairy operation. 

(f) In the case of a new dairy operation 

that first registers to participate in MPPDairy for a calendar year after the start 

of the calendar year, the participating 

dairy operation is required to pay a prorated premium for that calendar year 

based on the portion of the calendar 

year for which the participating dairy 

operation is eligible, and for which it 

purchases the coverage. 

(g) The total annual premium for a 

participating dairy operation calculated 

as provided in paragraphs (d) and (e) of 

this section for calendar year 2014, is 

due in full at the time the contract is 

submitted to FSA during the open 

election period applicable for calendar 

year 2014, as determined by the Deputy 

Administrator. For subsequent calendar 

years, a participating dairy operation is 

required to pay the annual premium 

calculated as specified in paragraphs (d) 

and (e) of this section for the applicable 

calendar year, unless otherwise 

determined by the Deputy 

Administrator, according to either of the 

following options: 

(1) In total at time of submission of 

coverage election to FSA; or 

(2) In installments, with a minimum 

of 50 percent at the time of submission 

of coverage election to FSA and the 

remaining balance due no later than 

June 1 of the applicable calendar year of 

coverage. 

(h) If a minimum of 50 percent of the 

premium is not paid by the end of an 

open election period for an applicable 

calendar year of coverage, the 

participating dairy operation will only 

be covered at catastrophic level 

coverage, except that the participating 

dairy operation will have no coverage 

whatsoever if the administrative fee for 

the applicable calendar year of coverage 

has not been timely paid. 

(i) Annual premium balances due to 

FSA from a participating dairy 

operation for a calendar year of coverage 

must be paid in full no later than June 

1 of the applicable calendar year. 

Premium balances due, but not in 

arrears, prior to June 1 will be deducted 

from any MPP-Dairy payment(s) made 

to the participating dairy operation 

during the applicable calendar year of 

coverage. 

(j) A participating dairy operation 

with an unpaid premium balance after 

June 1 for a calendar year of coverage 

will lose eligibility for coverage as 

provided in § 1430.109. 

(k) The Deputy Administrator may 

waive the obligation to pay the 

premium, or refund the premium paid, 

of a participating dairy operation for a 

calendar year, in cases that include, but 

are not limited to, as determined by the 

Deputy Administrator, death, 

retirement, permanent dissolution of a 

participating dairy operation, or other 

circumstances determined by the 

Deputy Administrator. 

(l) MPP-Dairy administrative fees and 

premiums are required to be paid by a 

negotiable instrument satisfactory in 

form to the Deputy Administrator and 

made payable to FSA and either mailed 

to or provided in person to the 

administrative county office or other 

location designated by FSA. 

§ 1430.108 Margin protection payments. 

(a) An MPP-Dairy payment will be 

made to a participating dairy operation 

for any consecutive 2-month period 

when the average actual dairy 

production margin for the consecutive 

2-month period falls below the coverage 

level threshold in effect for the 

participating dairy operation. 

(b) The MPP-Dairy payment to an 

eligible participating dairy operation 

relative to the qualifying 2-month 

period will equal the product obtained 

by multiplying: 

(1) The amount by which the coverage 

level in effect for the participating dairy 

operation exceeds the average actual 

dairy production margin for the 

applicable 2-month period; 

(2) The coverage percentage in effect 

for the participating dairy operation; 

and 

(3) The production history of the 

participating dairy operation, divided 

by 6. 

(c) For any coverage period, a 

participating dairy operation can for all 

of its production select only one 

coverage level threshold between $4 and 

$8 (in 50 cent increments) per 

hundredweight under § 1430.107(a)(1); 

and only one percentage for its 

production history between 25 percent 

and 90 percent (in 5 percent increments) 

under § 1430.107(a)(2). 

§ 1430.109 Effect of failure to pay 

administrative fees or premiums. 

(a) A participating dairy operation 

that fails to pay a required 

administrative fee or premium payment 

due upon application to MPP-Dairy or 

for a calendar year of coverage: 

(1) Remains legally obligated to pay 

such administrative fee or premium, as 

applicable; and 

(2) Upon such failure to pay when 

due, loses coverage under MPP-Dairy 

until such administrative fee or 

premium is paid in full, and once paid, 

coverage will begin with the next 

consecutive 2-month period. 

(b) CCC may take such actions as 

necessary to collect unpaid 

administrative fees and premium 

payments. 

§ 1430.110 Calculation of average feed 

cost and actual dairy production margins. 

(a) Payments are made to a 

participating dairy operation as 

specified in this subpart only when, for 

a consecutive 2-month period, the 

calculated average actual dairy 

production margin is below the 

coverage level in effect for the 

participating dairy operation. That 

margin will be calculated on a national 

basis and is the amount by which for the 

relevant consecutive 2-month period, 

the all milk price exceeds the average 

feed cost for dairy producers. All 

calculations will be made on a per cwt 

basis. The average actual dairy 

production margin calculation applies 

to all participating dairy operations. The 

calculations are not made on an 

operation by operation basis or on their 

marketings. 

(b) For calculating the national 

average feed cost that dairy operations 

use to produce a cwt of milk, the 

following three items will be added 

together: 

(1) The product determined by 

multiplying 1.0728 by the price of corn 

per bushel; 

(2) The product determined by 

multiplying 0.00735 by the price of 

soybean meal per ton; and 

(3) The product determined by 

multiplying 0.0137 by the price of 

alfalfa hay per ton. 

(c) To make those feed calculations, 

the Deputy Administrator on behalf of 

CCC will use the following full month 

data: 

(1) For corn, the full month price 

received by farmers during the month in 

the United States as reported in the 

monthly Agricultural Prices report by 

USDA NASS; 

(2) For soybean meal, the Central 

Illinois soybean meal price delivered by 

rail as reported in the USDA AMS 

Market News-Monthly; and 

(3) For alfalfa hay, the full month 

price received during the month by 

farmers in the United States for alfalfa 

hay as reported in the monthly 

Agricultural Prices report by USDA 

NASS. 

(d) The national average feed cost data 

for corn, soybean meal, and alfalfa hay 

used in the calculation of the national 

average feed cost to determine the actual 

dairy production margin for the relevant 

period, will be the data reported in the 

publication the following month. (For 

example, preliminary May prices for 

corn and soybean meal were reported in 

the May Agricultural Prices publication 

but full month May prices will be 


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available in the June publication, and 

those will be the prices used). 

(e) The actual dairy production 

margin for each consecutive 2-month 

period, will be calculated by 

subtracting: 

(1) The average feed cost for that 

consecutive 2-month period, 

determined under paragraph (b) of this 

section; from 

(2) The all-milk price for that 

consecutive 2-month period. 

§ 1430.111 Relation to RMA’s LGM-Dairy 

Program. 

(a) In general, a producer may 

participate in either MPP-Dairy through 

a dairy operation or the LGM-Dairy 

program operated by RMA, but not both. 

However, since MPP-Dairy is first being 

made available after potential applicants 

may have already applied for 2014 or 

2015 coverage under LGM-Dairy, for the 

annual election period for MPP-Dairy 

established for the 2014 and 2015 

calendar year coverage only, a producer 

with coverage under LGM-Dairy that 

wishes to participate through their dairy 

operation in MPP-Dairy, is required to: 

(1) Register the dairy operation to 

participate in MPP-Dairy during the 

annual election period established for 

calendar year 2014 and 2015, as 

established by the Deputy 

Administrator; 

(2) Agree not to extend or obtain new 

LGM-Dairy coverage; 

(3) Acknowledge in writing at the 

time of registration that no MPP-Dairy 

payment will be made to the dairy 

operation for any month included in 

any period for which any producer in 

the dairy operation has LGM-Dairy 

coverage; and 

(4) Pay applicable administrative fees 

in the same manner as other 

participating dairy operations by paying 

fees and premiums that may be prorated 

by the Deputy Administrator to reflect 

the limited period of coverage. 

(b) Margin protection coverage under 

MPP-Dairy will not become effective 

until after the target month of 

marketings under LGM-Dairy has ended 

by natural expiration of the LGM-Dairy 

agreement or by an RMA-allowed 

cancellation. Any applicable premium 

for the participating dairy operation will 

be prorated based on the remaining 

months of the applicable calendar year 

of coverage following the month the 

LGM-Dairy target month has ended. 

(c) MPP-Dairy payment may only 

trigger after the target month of 

marketings under LGM-Dairy has ended. 

(d) A participating dairy operation 

will be required to provide proof, to the 

satisfaction of FSA, of the cancellation 

or expiration of the LGM-Dairy policy 

based on the final month of target 

marketings under the LGM-Dairy policy. 

§ 1430.112 Multi-year contract. 

(a) Participating dairy operations 

enrolled in MPP-Dairy are enrolled until 

December 31, 2018. As such, a 

participating dairy operation is 

obligated to pay initial and annual 

administrative fees and applicable 

premiums each succeeding calendar 

year following the date the contract is 

first entered into through December 31, 

2018. 

(b) Failure to pay administrative fees 

and premiums will result in the loss of 

coverage, and the participating dairy 

operation remains obligated to pay such 

administrative fees and premiums as 

provided in § 1430.108. 

(c) If a participating dairy operation 

goes out of business as described in 

§ 1430.107(k) before December 31, 2018, 

the contract will be terminated 

immediately, except with respect to 

payments accrued to the benefit of the 

participating dairy operation under this 

subpart before such termination. 

§ 1430.113 Contract modifications. 

(a) Producers in a participating dairy 

operation must notify FSA immediately 

of any changes that may affect their 

participation in MPP-Dairy under this 

subpart. Changes include, but are not 

limited to death of a producer on the 

contract, producer joining the operation, 

producer exiting the operation, 

relocation of the dairy operation, 

transfer of shares by sale or other 

transfer action, or dairy operation 

reconstitutions as provided in 

§ 1430.114. 

(b) Payment of any outstanding 

premium or administrative fee for a 

participating dairy operation must be 

paid in full before a transfer of shares by 

sale or any other change in producers on 

the contract originally submitted to FSA 

may take effect. Otherwise, producer 

changes will not be recognized until the 

following annual election period, and 

only if at that time all associated 

premiums and administrative fees from 

any previous calendar year of coverage 

have been paid in full. 

§ 1430.114 Reconstitutions. 

(a) A participating dairy operation 

under this subpart may reorganize or 

restructure itself in such a way that the 

constitution or makeup of its operation 

is reconstituted in another organization 

framework. However, any participating 

dairy operation that reorganizes or 

restructures after enrolling is subject to 

a review by FSA to determine if the 

operation was reorganized or 

restructured for the sole purpose of 

establishing an alternative production 

history for a participating dairy 

operation or was reorganized or 

restructured to otherwise circumvent 

any MPP-Dairy provision under this 

subpart (including the tier system for 

premiums) or otherwise to prevent the 

accomplishment of the purpose of the 

program. 

(b) A participating dairy operation 

that FSA determines has reorganized 

solely to establish a new production 

history or to circumvent the 

determination of applicable fees or 

premiums based on an established 

production history determined under 

this subpart will be considered to have 

failed to meet MPP-Dairy requirements 

and, in addition to other sanctions or 

penalties that may apply, will not be 

eligible for MPP-Dairy payments. 

(c) Under no circumstance, except as 

approved by the Deputy Administrator 

or provided for in these regulations, will 

the reconstitution or restructure of a 

participating dairy operation change the 

determined production history for the 

operation. The Deputy Administrator 

may, however, adjust the production 

history of a participating dairy operation 

if there is a calculation error or if 

erroneous information has been 

supplied by or on behalf of the 

participating dairy operation. 

§ 1430.115 Offsets and withholdings. 

FSA may offset or withhold any 

amount due FSA under this subpart 

under the provisions of part 1403 of this 

chapter or any successor regulations, or 

any other authorities that may allow for 

collection action of that sort. 

§ 1430.116 Assignments. 

Any producer may assign a payment 

to be made under this subpart in 

accordance with part 1404 of this 

chapter or successor regulations as 

designated by the Secretary or as 

allowed by the Deputy Administrator in 

writing. 

§ 1430.117 Appeals. 

Any producer who is dissatisfied with 

a determination made pursuant to this 

subpart may request reconsideration or 

appeal of such determination under 

parts 11 or 780 of this title. 

§ 1430.118 Misrepresentation and scheme 

or device. 

(a) In addition to other penalties, 

sanctions or remedies as may apply, all 

or any part of a payment otherwise due 

a person or legal entity on all 

participating dairy operations in which 

the person or legal entity has an interest 

may be withheld or be required to be 

refunded if the person or legal entity 

fails to comply with the provisions of 


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51468 Federal Register / Vol. 79, No. 168 / Friday, August 29, 2014 / Rules and Regulations 

this subpart or adopts or participates in 

adopting a scheme or device designed to 

evade this subpart, or that has the effect 

of evading this part. Such acts may 

include, but are not limited to: 

(1) Concealing information that affects 

an registration or coverage election; 

(2) Submitting false or erroneous 

information; or 

(3) Creating a business arrangement 

using rental agreements or other 

arrangements to conceal the interest of 

a person or legal entity in a dairy 

operation for the purpose of obtaining 

MPP-Dairy payments the individual or 

legal entity would otherwise not be 

eligible to receive. Indicators of such 

business arrangement include, but are 

not limited to the following: 

(i) No milk is produced and 

commercially marketed by a 

participating dairy operation; 

(ii) The participating dairy operation 

has no appreciable assets; 

(iii) The only source of capital for the 

dairy operation is the MPP-Dairy 

payments; or 

(iv) The represented dairy operation 

exists mainly for the receipt of MPPDairy payments. 

(b) If the Deputy Administrator 

determines that a person or legal entity 

has adopted a scheme or device to 

evade, or that has the purpose of 

evading, the provisions of this subpart, 

such person or legal entity will be 

ineligible to receive MPP-Dairy 

payments in the year such scheme or 

device was adopted and the succeeding 

year. 

(c) A person or legal entity that 

perpetuates a fraud, commits fraud, or 

participates in equally serious actions 

for the benefit of the person or legal 

entity, or the benefit of any other person 

or legal entity, in violation of the 

requirements of this subpart will be 

subject to a 5-year denial of all program 

benefits. Such other equally serious 

actions may include, but are not limited 

to: 

(1) Knowingly engaging in, or aiding 

in the creation of a fraudulent document 

or statement; 

(2) Failing to disclose material 

information relevant to the 

administration of the provisions of this 

subpart, or 

(3) Engaging in any other actions of a 

person or legal entity determined by the 

Deputy Administrator to be designed, or 

intended to, circumvent the provisions 

of this subpart. 

(d) Program payments and benefits 

will be denied on pro-rata basis: 

(1) In accordance with the interest 

held by the person or legal entity in any 

other legal entity or joint operations; 

and 

(2) To any person or legal entity that 

is a cash rent tenant on land owned or 

under control of a person or legal entity 

for which a determination of this 

section has been made. 

§ 1430.119 Estates, trusts, and minors. 

(a) MPP-Dairy documents executed by 

producers legally authorized to 

represent estates or trusts will be 

accepted only if such producers furnish 

evidence of the authority to execute 

such documents. 

(b) A minor who is otherwise eligible 

for benefits under this subpart is also 

required to: 

(1) Establish that the right of majority 

has been conferred on the minor by 

court proceedings or by law; 

(2) Show that a guardian has been 

appointed to manage the minor’s 

property and the applicable MPP-Dairy 

documents are executed by the 

guardian; or 

(3) Furnish a bond under which the 

surety guarantees any loss incurred for 

which the minor would be liable had 

the minor been an adult. 

§ 1430.120 Death, incompetency, or 

disappearance. 

In the case of death, incompetency, 

disappearance or dissolution of a 

producer that is eligible to receive 

benefits under this subpart, such 

persons as are specified in part 707 of 

this title may receive such benefits, as 

determined appropriate by FSA. 

§ 1430.121 Maintenance and inspection of 

records. 

(a) Participating dairy operations are 

required to maintain accurate records 

and accounts that will document that 

they meet all eligibility requirements 

specified in this subpart, as may be 

requested by CCC or FSA. Such records 

and accounts are required to be retained 

for 3 years after the date of MPP-Dairy 

payments to the participating dairy 

operation. Destruction of the records 3 

years after the date of payment will be 

at the risk of the party undertaking the 

destruction. 

(b) A participating dairy operation is 

required to allow authorized 

representatives of CCC, the Secretary, or 

the Comptroller General of the United 

States to have access to the premises of 

the dairy operation in order to inspect 

the herd of cattle, examine, and make 

copies of the books, records, and 

accounts, and other written data as 

specified in paragraph (a) of this 

section. 

(c) Any producer or dairy operation 

that does not comply with the 

provisions of paragraphs (a) or (b) of this 

section, or that otherwise receives a 

payment for which it is not eligible, is 

liable for that payment and is required 

to repay it to FSA, with interest to run 

from the date of disbursement. 

§ 1430.122 Refunds; joint and several 

liability. 

(a) Any legal entity, including joint 

operations, joint ventures and 

partnerships, and any member of a legal 

entity determined to have knowingly 

participated in a scheme or device, or 

other such equally serious actions to 

evade, or that has the purpose of 

evading the provisions of this part, will 

be jointly and severally liable for any 

amounts determined to be payable as 

the result of the scheme or device, or 

other such equally serious actions, 

including amounts necessary to recover 

the payments. 

(b) Any person or legal entity that 

cooperates in the enforcement of the 

provisions of this part may be partially 

or fully released from liability, as 

determined by the Executive Vice 

President, CCC. 

(c) The provisions of this section will 

be applicable in addition to any liability 

that arises under a criminal or civil 

statute, regulation, or provision of law. 

§ 1430.123 Violations of highly erodible 

and wetland conservation provisions. 

The provisions of part 12 of this title 

apply to this part. 

§ 1430.124 Violations regarding controlled 

substances. 

The provisions of § 718.6 of this title 

apply to this part. 

■ 3. Revise 7 CFR part 1430, subpart C 

to read as follows: 

Subpart C—Dairy Product Donation 

Program 

Sec. 

1430.300 Administration, purpose, and 

funding. 

1430.301 Definitions. 

1430.302 Commencement and termination 

of DPDP purchases. 

1430.303 DPDP purchases. 

1430.304 Distribution of DPDP purchased 

products. 

Subpart C—Dairy Product Donation 

Program 

§ 1430.300 Administration, purpose, and 

funding. 

(a) The regulations in this subpart 

apply for the Dairy Product Donation 

Program (DPDP). DPDP is authorized by 

section 1431 of the Agricultural Act of 

2014 (Pub. L. 113–79, 7 U.S.C. 9071). 

(b) DPDP is designed to address low 

dairy producer margins, through 

periodic purchases of dairy products, as 

specified in this subpart. Dairy products 

purchased for DPDP will be used to 


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provide nutritional assistance to 

members of low-income groups. 

(c) The purchase aspect of DPDP will 

be operated for the Secretary of 

Agriculture and for the Commodity 

Credit Corporation by the Farm Service 

Agency (FSA) under the direction of the 

FSA’s Deputy Administrator for 

Commodity Operations. Purchases are 

subject to the terms and conditions in 

FSA’s purchase announcements. The 

distribution of products purchased 

through DPDP will be operated for the 

Secretary under the direction of the 

Food and Nutrition Service. 

§ 1430.301 Definitions. 

For purposes of this subpart, the 

following terms and acronyms apply: 

2014 Farm Bill means the Agricultural 

Act of 2014 (Pub. L. No. 113–79). 

Actual dairy production margin is as 

defined in subpart A of this part. 

AMS means the Agricultural 

Marketing Service of the USDA. 

CCC means the Commodity Credit 

Corporation. 

Deputy Administrator means the Farm 

Service Agency Deputy Administrator 

for Commodity Operations. 

Distribution means the provision of 

products purchased through DPDP to 

low-income groups through FNS food 

distribution programs in accordance 

with those program regulations and 7 

CFR part 250. 

DPDP means the Dairy Product 

Donation Program. 

FNS means the Food and Nutrition 

Service of the USDA. 

FSA means the Farm Service Agency 

of the USDA. 

FSA Administrator means 

Administrator of the Farm Service 

Agency, USDA. 

Hundredweight or cwt means 100 

pounds. 

MPP-Dairy means the Margin 

Protection Program for Dairy provided 

for in subpart A of this part. 

NDM means non-fat dry milk. 

Recipient agencies means agencies or 

organizations that are eligible to receive 

donated product for distribution under 

this subpart. 

USDA means the United States 

Department of Agriculture. 

§ 1430.302 Commencement and 

termination of DPDP purchases. 

(a) DPDP purchases commence only if 

approved by the FSA Administrator 

under the provisions of this subpart. 

The FSA Administrator will approve 

DPDP purchases only if the actual dairy 

production margin has been $4 or less 

per cwt for each of the preceding 2 

months. The actual dairy production 

margin will be calculated as specified in 

§ 1430.110. The following chart shows 

an example of the timing for the 

determination of DPDP purchases. 

DPDP PURCHASE DETERMINATION EXAMPLE BASED ON DAIRY PRODUCTION MARGINS AND 3-MONTH MAXIMUM FOR

PURCHASES 1

2 Consecutive 

months 

Calculate margin 

for 2 consecutive 

months 2

If both margins below $4 per cwt in 

the 2 consecutive months 3-Month maximum consideration 

If either margin above 

$4 per cwt in the 2 

consecutive months 

January and February.March ................... Dairy product purchases 3 begin in 

April.

1st month of purchases ..................... No purchases. 

February and 

March.

April ..................... Dairy product purchases 3 begin in 

May.

2nd consecutive month of purchases No purchases. 

March and April ..... May ...................... Dairy product purchases 3 begin in 

June.

3rd consecutive month of purchases No purchases. 

April and May ........ June 4 ................... No purchases; terminated after 3 

consecutive months.

3-month maximum reached (1st 

month off).

No purchases. 

May and June ....... July ...................... No purchases; terminated after 3 

consecutive months.

3-month maximum reached (2nd 

month off).

No purchases. 

June and July ........ August ................. No purchases; terminated after 3 

consecutive months.

3-month maximum reached (3rd 

month off).

No purchases. 

July and August .... September ........... Dairy product purchases 3 begin in 

October.

1st month of purchases ..................... No purchases. 

August and September.October ................ Dairy product purchases 3 begin in 

November.

2nd consecutive month of purchases No purchases. 

September and October.November ............ Dairy product purchases 3 begin in 

December.

3rd consecutive month of purchases No purchases. 

October and November.December ............ No purchases; terminated after 3 

consecutive months.

3-month maximum reached (1st 

month off).

No purchases. 

November and December.January ................ No purchases; terminated after 3 

consecutive months.

3-month maximum reached (1st 

month off).

No purchases 

1This example assumes that purchases begin in January. In reality, DPDP can—depending on prices and margin triggers—begin on September 1, 2014, which is the start of MPP-Dairy. 2The full month data for a given month is available at the end of the following month. For example, January data are not available until the 

end of February. 2Purchases cannot begin unless domestic cheddar cheese or nonfat dry milk prices are at certain differentials relative to world prices. 3 In the example, June is the 3rd month of consevutive purchases. June would not be calculated as a potential trigger month, but it is shown 

on the chart to clearly show the concept of 3 months on and 3 months off for purchases. If purchases are taking place during a month, that 

month cannot be used as a trigger month for a future purchase period. 

(b) DPDP purchases terminate and are 

not reinstated until the condition 

specified in paragraph (a) of this section 

is again met, whenever any one of the 

following occurs: 

(1) If purchases were made for the 

preceding 3 months, even if the actual 

dairy production margin remains $4 or 

less per cwt of milk. 

(2) If the actual dairy production 

margin has been greater than $4 per cwt 

of milk for the immediately preceding 

month. 

(3) If the actual dairy production 

margin has been $4 or less, but more 

than $3, per cwt for the immediately 

preceding month and during the same 

month — 

(i) The price in the United States for 

cheddar cheese was more than 5 percent 

above the world price, or 

(ii) The price in the United States for 

non-fat dry milk (NDM) was more than 


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51470 Federal Register / Vol. 79, No. 168 / Friday, August 29, 2014 / Rules and Regulations 

5 percent above the world price of skim 

milk powder. 

(4) If the actual dairy production 

margin has been $3 or less per cwt of 

milk for the immediately preceding 

month and during the same month — 

(i) The price in the United States for 

cheddar cheese was more than 7 percent 

above the world price; or 

(ii) The price in the United States for 

NDM was more than 7 percent above the 

world price of skim milk powder. 

(c) Purchases will terminate beginning 

with the first day of any month that 

does not qualify for DPDP purchases. 

(d) For calculations under paragraphs 

(b)(3) and (4) of this section, the FSA 

Administrator may use data from a 

single or multiple locales or markets, 

including weighted averages, in 

consultation with AMS or other USDA 

agencies. 

§ 1430.303 DPDP purchases. 

(a) DPDP purchases will be made only 

for those months that the FSA 

Administrator has determined meet all 

the requirements specified in 

§ 1430.302. The purchases are subject to 

DPDP requirements including price and 

quantity restrictions specified in this 

subpart. 

(b) The Secretary has the authority to 

determine purchase and distribution 

methods for dairy product purchases 

and distribution. Unless otherwise 

determined by the Secretary, this 

authority is delegated to the Deputy 

Administrator in consultation with FNS. 

(c) FSA and FNS will determine the 

types and quantities of products that 

will be purchased, in consultation with 

public or private nonprofit 

organizations and State and local 

agencies eligible to receive such 

products. 

(d) The FSA Administrator will 

determine the quantity of purchases to 

be made for a qualifying month and will 

consider the results of any consultations 

in determining the quantity to be 

purchased. In making the 

determination, the FSA Administrator 

will also take into account a number of 

factors, including, but not limited to, 

dairy product market conditions, 

logistical considerations involved in the 

efficient and immediate distribution of 

the dairy products, the potential effect 

on markets and margins, time 

constraints of DPDP, and the cost 

effectiveness of the purchases. 

Approved quantities for a month will 

not exceed the amount of product that 

may be effectively distributed without 

waste. 

(e) Purchases may be approved for a 

qualifying month to the extent that the 

purchase by FSA can reasonably be 

expected to be completed in that 

calendar month and the products 

delivered to recipient agencies within 

90 days. 

(f) DPDP purchases cannot be stored 

by or for CCC, and CCC cannot incur 

storage costs on behalf of recipient 

agencies for the dairy products. 

(g) The purchase price of products 

will be the prevailing market price for 

like dairy products for private buyers as 

determined by the Deputy 

Administrator. That price may be, if 

approved by the Deputy Administrator, 

the price determined by the normal 

procurement methods used to procure 

foods for FNS domestic food assistance 

programs, if the dairy products are 

obtained that way. 

§ 1430.304 Distribution of DPDP 

purchased products. 

(a) Purchased products will be 

distributed to private and public 

nonprofit organizations eligible to 

receive donated foods for distribution to 

low-income groups through FNS’ food 

distribution programs as specified in 

FNS program regulations and the 

requirements in 7 CFR part 250. 

(b) Public and private nonprofit 

organizations receiving donated dairy 

products under this section will be 

responsible for the proper handling and 

distribution of such products in 

accordance with FNS program 

regulations, 7 CFR part 250, and FNS 

guidance and instructions. 

(c) A private or nonprofit organization 

agency receiving donated products 

under this section which improperly 

distributes or uses such product or 

causes loss of or damage to such 

product, will be subject to recovery of 

losses or other corrective action in 

accordance with FNS program 

regulations, 7 CFR part 250. 

Subparts D and E—[Removed] 

■ 4. Remove subparts D and E. 

Signed on August 20, 2014. 

Juan M. Garcia, 

Administrator, Farm Service Agency, and 

Executive Vice President, Commodity Credit 

Corporation. 

[FR Doc. 2014–20567 Filed 8–28–14; 8:45 am] 

BILLING CODE 3410–05–P 

NUCLEAR REGULATORY 

COMMISSION 

10 CFR Parts 170 and 171 

[NRC–2013–0276] 

RIN 3150–AJ32 

Revision of Fee Schedules; Fee 

Recovery for Fiscal Year 2014; 

Correction 

AGENCY: Nuclear Regulatory 

Commission. 

ACTION: Final rule; correction. 

SUMMARY: The U.S. Nuclear Regulatory 

Commission (NRC) is correcting a final 

rule that was published in the Federal 

Register (FR) on June 30, 2014, and 

amended the licensing, inspection, and 

annual fees charged to the NRC’s 

applicants and licensees. This action is 

necessary to correct a typographical 

error in the fee category description in 

the Schedule of fees for materials 

licenses and other regulatory services, 

including inspections, and import and 

export licenses. NRC is also correcting 

a percentage shown for FY 2014 in 

Table VII, Effort Factors for Fuel 

Facilities. 

DATES: This correction is effective 

August 29, 2014. 

ADDRESSES: Please refer to Docket ID 

NRC–2013–0276 when contacting the 

NRC about the availability of 

information regarding this document. 

You may obtain publicly-available 

information related to this document 

using any of the following methods: 

• Federal Rulemaking Web site: Go to 

http://www.regulations.gov and search 

for Docket ID NRC–2013–0276. Address 

questions about NRC dockets to Carol 

Gallagher; telephone: 301–287–3422; 

email: Carol.Gallagher@nrc.gov. For 

technical questions, contact the 

individual listed in the FOR FURTHER

INFORMATION CONTACT section of this 

document. 

• NRC’s Agencywide Documents 

Access and Management System 

(ADAMS): You may obtain publicly 

available documents online in the 

ADAMS Public Documents collection at 

http://www.nrc.gov/reading-rm/

adams.html. To begin the search, select 

‘‘ADAMS Public Documents’’ and then 

select ‘‘Begin Web-based ADAMS 

Search.’’ For problems with ADAMS, 

please contact the NRC’s Public 

Document Room (PDR) reference staff at 

1–800–397–4209, 301–415–4737, or by 

email to pdr.resource@nrc.gov. The 

ADAMS accession number for each 

document referenced in this document 

(if that document is available in 


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