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[Federal Register Volume 76, Number 247 (Friday, December 23, 2011)]
[Rules and Regulations]
[Pages 80214-80217]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32931]

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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1150

[Document No. AMS-DA-11-0007; DA-11-02]

National Dairy Promotion and Research Program; Amendments to the 
Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This final rule amends the Dairy Promotion and Research Order 
(Dairy Order). The amendment modifies the number of National Dairy 
Promotion and Research Board (Dairy Board) members in eight regions, 
merges Region 8 and Region 10, merges Region 12 and Region 13, and 
apportions Idaho as a separate region. The total number of domestic 
Dairy Board members would remain the same at 36 and the total number of 
regions would be reduced from 13 to 12. This amendment was requested by 
the Dairy Board, which administers the Dairy Order, to better reflect 
the geographic distribution of milk production in the United States.

DATES: Effective Date: December 23, 2011.

FOR FURTHER INFORMATION CONTACT: Whitney A. Rick, Director, Promotion, 
Research and Planning Division, AMS, USDA, 1400 Independence Ave. SW., 
Room 2958-S, Stop 0233, Washington, DC 20250-0233. Phone: (202) 720-
6909. Email: Whitney.Rick@ams.usda.gov.

SUPPLEMENTARY INFORMATION: This final rule is issued pursuant to the 
Dairy Production Stabilization Act (Dairy Act) of 1983 [7 U.S.C. 4501-
4514], as amended.

Executive Order 12866

    The Office of Management and Budget has waived the review process 
required by Executive Order 12866 for this action.

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. This final rule is not intended to have a 
retroactive effect. In accordance with section 4512(a) of the Dairy 
Act, this rule will not preempt or supersede any other program relating 
to dairy product promotion organized and operated under the laws of the 
United States or any State.
    The Dairy Act provides that administrative proceedings must be 
exhausted before parties may file suit in court. Under section 4509 of 
the Dairy Act, any person subject to the Dairy Order may file with the 
Secretary of Agriculture (Secretary) a petition stating that the Dairy 
Order, any provision of the Dairy Order, or any obligation imposed in 
connection with the Dairy Order is not in accordance with the law and 
request a modification of the Dairy Order or to be exempted from the 
Dairy Order. Such person is afforded the opportunity for a hearing on 
the petition. After a hearing, the Secretary would rule on the 
petition. The Dairy Act provides that the district court of the United 
States in any district in which the person is an inhabitant or has his 
principal place of business, has jurisdiction to review the Secretary's 
ruling on the petition, provided a complaint is filed not later than 20 
days after the date of the entry of the ruling.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the Agricultural Marketing Service has considered the economic 
impact of this action on small entities and has certified that this 
final rule will not have a significant economic impact on a substantial 
number of small entities. The purpose of the Regulatory Flexibility Act 
is to fit regulatory actions to the scale of businesses subject to such 
actions so that small businesses will not be disproportionately 
burdened.
    The Dairy Act authorizes a national program for dairy product 
promotion, research and nutrition education. Congress found that it is 
in the public interest to authorize the establishment of an orderly 
procedure for financing (through assessments on all milk produced in 
the United States for commercial use and on imported dairy products) 
and carrying out a coordinated program of promotion designed to 
strengthen the dairy industry's position in the marketplace and to 
maintain and expand domestic and foreign markets and uses for fluid 
milk and dairy products.
    The Small Business Administration [13 CFR 121.201] defines small 
dairy producers as those having annual receipts of not more than 
$750,000 annually. Most of the producers subject to the provisions of 
the Dairy Order are considered small entities.
    The final rule amends the Dairy Order by modifying the number of 
National Dairy Promotion and Research Board (Dairy Board) members in 
eight regions, merges Region 8 and Region 10, merges Region 12 and 
Region 13, and apportions Idaho as a separate region. The total number 
of domestic Dairy Board members remains the same at 36

[[Page 80215]]

and the total number of regions is reduced from 13 to 12. This 
modification was requested by the Dairy Board, which administers the 
Dairy Order, to better reflect the geographic distribution of milk 
production in the United States.
    The Dairy Order is administered by a 38-member Dairy Board, 36 
members representing 13 geographic regions within the United States and 
2 representing importers. The Dairy Order provides in section 1150.131 
that the Dairy Board shall review the geographic distribution of milk 
production throughout the United States and, if warranted, shall 
recommend to the Secretary a reapportionment of the regions and/or 
modification of the number of members from the regions in order to 
better reflect the geographic distribution of milk production volume in 
the United States. The Dairy Board is required to conduct the review at 
least every 5 years and not more than every 3 years. The Dairy Board 
was last modified in 2008 based on 2007 milk production.
    Based on a review of the 2010 geographic distribution of milk 
production, the Dairy Board concluded that the number of Dairy Board 
members for eight regions should be changed. Additionally, the Dairy 
Board proposed to merge Region 8 and Region 10, merge Region 12 and 
Region 13, and apportion Idaho as a separate region.
    This amendment will not have a significant economic impact on 
persons subject to the Dairy Order. The changes merely allow 
representation of the Dairy Board to better reflect geographic milk 
production in the United States.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulation [5 CFR part 1320] which implements the Paperwork Reduction 
Act of 1995 [44 U.S.C. chapter 35], the information collection 
requirements and record keeping provisions imposed by the Dairy Order 
have been previously approved by OMB and assigned OMB Control No. 0581-
0093. No relevant Federal rules have been identified that duplicate, 
overlap, or conflict with this rule.

Statement of Consideration

    The Dairy Order currently is administered by a 38-member Dairy 
Board, 36 members representing 13 geographic regions within the United 
States and 2 representing importers. The Dairy Order provides in 
section 1150.131 that the Dairy Board shall review the geographic 
distribution of milk production volume throughout the United States 
and, if warranted, shall recommend to the Secretary a reapportionment 
of regions and/or modification of the number of producer members from 
regions in order to best reflect the geographic distribution of milk 
production in the United States. The Dairy Board is required to conduct 
the review at least every 5 years and not more than every 3 years. The 
Dairy Board was last modified in 2008 based on 2007 milk production.
    Since the Dairy Board's last reapportionment, the Dairy Order was 
amended by a final rule (importer final rule) [76 FR 14777, March 18, 
2011] to implement an assessment on imported dairy products to fund 
promotion and research and to add importer representation, initially 
two members, to the Dairy Board. Additionally, the final rule amended 
the term ``United States'' in the Dairy Order to mean all States, the 
District of Columbia, and the Commonwealth of Puerto Rico. Assessments 
on producers in these areas were effective April 1, 2011. These 
amendments to the Dairy Order were implemented pursuant to the Farm 
Security and Rural Investment Act of 2008 (2008 Farm Bill) (Pub. L. 
110-246).
    In order to complement the current geographical makeup of the 
existing regions of the Dairy Board, the importer final rule added 
these four new jurisdictions to the region of closest proximity. Alaska 
was added to Region 1, currently comprised of Oregon and Washington; 
Hawaii was added to Region 2, currently California; and the District of 
Columbia and the Commonwealth of Puerto Rico were added to Region 10, 
currently comprised of Florida, Georgia, North Carolina, South Carolina 
and Virginia. These regional modifications were effective March 18, 
2011, and were reflected in the importer final rule.
    The importer final rule also modified the language in section 
1150.131 of the Dairy Order to remove the specific formula for 
calculating the factor of pounds of milk per member, which divided 
total pounds of milk produced by 36, as the Dairy Board is now 
comprised of 38 members (36 domestic producers and 2 importer 
representatives). While the Dairy Order no longer specifies the 
procedure for calculating the factor of pounds of milk per member, for 
the purposes of the current reapportionment analysis, the procedure 
remains the same.
    The importer final rule also added new language that requires the 
Secretary to review the average volume of imports of dairy products 
into the United States and, if warranted, reapportion the importer 
representation on the Dairy Board to reflect the proportional shares of 
the United States market served by domestic production and imported 
dairy products. This review will take place at least once every 3 
years, after the initial appointment of importer representatives on the 
Dairy Board.
    In 2010, total milk production was 193,468 million pounds and each 
of the Dairy Board members would represent 5,374 million pounds of 
milk. For 2007, total milk production was 185,558 million pounds of 
milk and each of the Dairy Board members represented 5,154 million 
pounds of milk.
    Based on the 2010 milk production data, the Dairy Board proposed 
that member representation in Region 1 (Alaska, Oregon, and Washington) 
be increased by one member. Milk production in Region 1 increased to 
8,307 million pounds in 2010, up from 7,764 million pounds in 2007, 
indicating two Dairy Board members (8,307 divided by 5,374 = 1.545) 
compared to one Dairy Board member based on 2007 milk production data.
    Milk production in Region 2 (California and Hawaii) decreased from 
40,683 million pounds in 2007 to 40,410 million pounds in 2010. The 
Dairy Board proposed that seven Dairy Board members (40,410 divided by 
5,374 = 7.519) represent Region 2, compared to eight Dairy Board 
members based on 2007 milk production data.
    Milk production in Region 3 (Arizona, Colorado, Idaho, Montana, 
Nevada, Utah, and Wyoming) increased from 21,212 million pounds in 2007 
to 22,592 million pounds in 2010. Specifically, in Idaho, milk 
production increased from 10,905 million pounds in 2007 to 12,779 
pounds in 2010 and represents more than half of the production of 
Region 3. Due to the increase in Idaho production, the Dairy Board 
proposed apportioning Idaho as its own region with two Dairy Board 
members.
    Milk production in Region 8 (Alabama, Kentucky, Louisiana, 
Mississippi, and Tennessee) decreased from 3,119 million pounds in 2007 
to 2,624 million pounds in 2010. The Dairy Board concluded that Region 
8 no longer supports one Dairy Board member (2,624 divided by 5,374 = 
0.488) and proposed to merge Region 8 into Region 10 (District of 
Columbia, Florida, Georgia, North Carolina, Puerto Rico, South 
Carolina, and Virginia) to create a new region with two Dairy Board 
members.
    Similarly, milk production in Region 13 (Connecticut, Maine, 
Massachusetts, New Hampshire, Rhode Island, and Vermont) decreased from 
4,046 million pounds in 2007 to 4,036 million pounds in 2010. The Dairy 
Board concluded

[[Page 80216]]

that Region 13 no longer supports one Dairy Board member (4,036 divided 
by 5,374 = 0.751) and proposed to merge Region 13 into Region 12 (New 
York), creating a new region with three Dairy Board members.
    Accordingly, Table 1 summarizes by region, the volume of milk 
production distribution for 2010, the percentage of total milk 
production and the adopted regions and number of Dairy Board seats for 
each region.

                                   Table 1--Regions and Number of Board Seats
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                                                                      Milk        Percentage of       Adopted
                       Regions and states                          production       total milk       number of
                                                                   (mil. lbs.)      production      board seats
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1. Alaska, Oregon, Washington..................................         8,307.1              4.3               2
2. California, Hawaii..........................................        40,410.3             21.0               7
3. Arizona, Colorado, Montana, Nevada, Utah, Wyoming...........         9,813.4              5.0               2
4. Arkansas, Kansas, New Mexico, Oklahoma, Texas...............          20,321             10.4               4
5. Minnesota, North Dakota, South Dakota.......................          11,370              5.8               2
6. Wisconsin...................................................          26,035             13.5               5
7. Illinois, Iowa, Missouri, Nebraska..........................           8,867              4.6               2
8. Idaho.......................................................          12,779              6.6               2
9. Indiana, Michigan, Ohio, West Virginia......................          17,188              8.9               3
10. Alabama, District of Columbia, Florida, Georgia, Kentucky,            9,663              5.0               2
 Louisiana, Mississippi, North Carolina, Puerto Rico, South
 Carolina, Tennessee, Virginia.................................
11. Delaware, Maryland, New Jersey, Pennsylvania...............          11,965              6.2               2
12. Connecticut, Maine, Massachusetts, New Hampshire, New York,        16,749.5              8.7               3
 Rhode Island, Vermont.........................................
                                                                ------------------------------------------------
    Total......................................................       193,468.3              100              36
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* Milk Production, Disposition, and Income, 2010 Summary, NASS, 2011.
** Puerto Rico--Various Agricultural Statistics, 2010 Summary, NASS, 2011.

    On August 30, 2011, the Department of Agriculture (Department) 
published in the Federal Register (76 FR 53844) a proposed rule to 
amend the Dairy Board as indicated above. Interested parties were 
provided an opportunity to file comments on the proposed rule on or 
before September 14, 2011. Two comments were received by the 
Department. One commenter expressed support for the proposed rule and 
noted that the proposal's criteria and methodology used to allocate 
board seats and resulting calculations for regional representation was 
consistent with the Dairy Order as recommended to the Secretary by the 
Dairy Board.
    A second commenter suggested that milk production should not be the 
only criteria used in establishing regions. As noted in the proposed 
rule, the Dairy Act requires that Dairy Board members be nominated to 
represent specific geographical regions, and that each member represent 
an equal proportion of total U.S. milk production. No other criteria 
exist to be used in establishing regions, and therefore no other 
changes are made to the final rule based on this comment. Additionally, 
the commenter stated that when making appointments, the Secretary 
should consider geographical representation and select individuals 
based on their qualifications and experience in working within the 
dairy industry, dairy promotion, and commitment to serving the dairy 
farmers who contribute to the promotion and research program. AMS 
agrees with this assertion, as it is the Department's policy that board 
membership accurately reflects the diversity of the individuals served 
by the program.
    This final rule adopts the proposed rule without change, and 
therefore member representation in Region 1 is increased from one 
member to two members; Region 2 representation is decreased from eight 
members to seven members; Region 3 is decreased from four members to 
two members; Region 8 and Region 10 are combined to create a new Region 
10 with two members, and is comprised of Alabama, District of Columbia, 
Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, 
Puerto Rico, South Carolina, Tennessee, Virginia; Region 8 is now 
comprised of the State of Idaho with two members; Regions 12 and 13 are 
combined to create a new Region 12 and is comprised of Connecticut, 
Maine, Massachusetts, New Hampshire, New York, Rhode Island, and 
Vermont with three members.
    Pursuant to 5 U.S.C. 553, it is found and determined that good 
cause exists for not postponing the effective date of this rule until 
30 days after publication in the Federal Register because this rule 
should be in effect as soon as possible to appoint Board members for 
the 2011-2014 term.

List of Subjects in 7 CFR Part 1150

    Dairy products, Milk, Promotion, Research.

    For the reasons set forth in the preamble, 7 CFR part 1150 is 
amended as follows:

PART 1150--DAIRY PROMOTION PROGRAM

0
1. The authority citation for part 1150 continues to read as follows:

    Authority: 7 U.S.C. 4501-4514 and 7 U.S.C. 7401.

0
2. Section 1150.131 is amended by revising paragraphs (b) introductory 
text, (b)(1), (b)(2), (b)(3), (b)(8), (b)(10), (b)(12), and removing 
paragraph (b)(13) to read as follows:

Sec.  1150.131  Establishment and membership.

* * * * *
    (b) Thirty-six members of the Board shall be United States 
producers. For purposes of nominating producers to the Board, the 
United States shall be divided into twelve geographic regions and the 
number of Board members from each region shall be as follows:
    (1) Two members from region number one comprised of the following 
States: Alaska, Oregon and Washington.
    (2) Seven members from region number two comprised of the following 
States: California and Hawaii.
    (3) Two members from region number three comprised of the following 
States: Arizona, Colorado, Montana, Nevada, Utah and Wyoming.
* * * * *
    (8) Two members from region number eight comprised of the following 
State: Idaho.
* * * * *
    (10) Two members from region number ten comprised of the following

[[Page 80217]]

States: Alabama, District of Columbia, Florida, Georgia, Kentucky, 
Louisiana, Mississippi, North Carolina, Commonwealth of Puerto Rico, 
South Carolina, Tennessee, and Virginia.
* * * * *
    (12) Three members from region number twelve comprised of the 
following States: Connecticut, Maine, Massachusetts, New Hampshire, New 
York, Rhode Island, and Vermont.
* * * * *

    Dated: December 14, 2011.
David R. Shipman,
Acting Administrator.
[FR Doc. 2011-32931 Filed 12-22-11; 8:45 am]
BILLING CODE 3410-02-P
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