[Federal Register Volume 74, Number 67 (Thursday, April 9, 2009)]
[Proposed Rules]
[Pages 16296-16319]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7982]



[[Page 16295]]

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Part III





Department of Agriculture





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Agricultural Marketing Service



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7 CFR Parts 1000, 1001, 1005 et al.



 Milk in the Northeast and Other Marketing Areas; Notice of Hearing on 
Proposed Amendments to Tentative Marketing Agreements and Orders; 
Proposed Rule

Federal Register / Vol. 74 , No. 67 / Thursday, April 9, 2009 / 
Proposed Rules

[[Page 16296]]


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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1000, 1001, 1005, 1006, 1007, 1030, 1032, 1033, 1124, 
1126 and 1131

[Doc. No. AO-14-A78, et al.; DA-09-02; AMS-09-0007]


Milk in the Northeast and Other Marketing Areas; Notice of 
Hearing on Proposed Amendments to Tentative Marketing Agreements and 
Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Notice of public hearing on proposed rulemaking.

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SUMMARY: A national public hearing is being held to consider and take 
evidence on proposals seeking to amend or remove the producer-handler 
provisions and revise the exempt plant provisions applicable to all 
Federal milk marketing orders. Additionally, a proposal seeking to 
amend the orders to include provisions related to individual handler 
pools will be considered as an alternative to the producer-handler 
provisions.

DATES: The hearing will convene at 1 p.m., on Monday, May 4, 2009.

ADDRESSES: The hearing will be held at The Westin, Cincinnati, 21 East 
Fifth Street, Cincinnati, Ohio 45202, phone (513) 621-7700.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Senior Marketing 
Specialist, Order Formulation and Enforcement Branch, USDA/AMS/Dairy 
Programs, Stop 0231-Room 2971, 1400 Independence Avenue, SW., 
Washington, DC 20250-0231, (202) 690-1366, e-mail address: 
<a href="/cdn-cgi/l/email-protection#1077797e7f3e647f637950717d633e656374713e777f66"><span class="__cf_email__" data-cfemail="33545a5d5c1d475c405a73525e401d464057521d545c45">[email protected]</span></a>.
    Persons requiring a sign language interpreter or other special 
accommodations should contact Paul Huber, Assistant Market 
Administrator, at (330) 225-4758; e-mail: <a href="/cdn-cgi/l/email-protection#1868706d7a7d6a587e7575797b747d6e367b7775"><span class="__cf_email__" data-cfemail="d0a0b8a5b2b5a290b6bdbdb1b3bcb5a6feb3bfbd">[email protected]</span></a> before 
the hearing begins.

SUPPLEMENTARY INFORMATION: This administrative action is governed by 
the provisions of Sections 556 and 557 of Title 5 of the United States 
Code and, therefore, is excluded from the requirements of Executive 
Order 12866.
    Notice is hereby given of a public hearing to be held at The 
Westin, Cincinnati, Cincinnati, Ohio, beginning at 1 p.m. on Monday, 
May 4, 2009, with respect to proposed amendments to the marketing 
agreements and to the orders regulating the handling of milk in all 
Federal milk marketing orders.
    The hearing is called pursuant to the provisions of the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674), and the applicable rules of practice and procedure governing the 
formulation of marketing agreements and marketing orders (7 CFR part 
900).
    The purpose of the hearing is to receive evidence with respect to 
the economic and marketing conditions which relate to the proposed 
amendments, hereinafter set forth, and any appropriate modifications 
thereof, to the tentative marketing agreements and to the orders.
    Actions under the Federal milk order program are subject to the 
Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA). The RFA seeks to 
ensure that, within the statutory authority of a program, the 
regulatory and information collection requirements are tailored to the 
size and nature of small businesses. For the purpose of the RFA, a 
dairy farm is a ``small business'' if it has an annual gross revenue of 
less than $750,000, and a dairy products manufacturer is a ``small 
business'' if it has fewer than 500 employees (13 CFR 121.201). Most 
parties subject to a milk order are considered as a small business. 
Accordingly, interested parties are invited to present evidence on the 
probable regulatory and informational impact of the hearing proposals 
on small businesses. Also, parties may offer modifications of these 
proposals for the purpose of tailoring their applicability to small 
businesses.
    The amendments to the rules proposed herein have been reviewed 
under Executive Order 12988, Civil Justice Reform. They are not 
intended to have a retroactive effect. If adopted, the proposed 
amendments would not preempt any State or local laws, regulations, or 
policies, unless they present an irreconcilable conflict with this 
rule.
    The Agricultural Marketing Agreement Act (Act) provides that 
administrative proceedings must be exhausted before parties may file 
suit in court. Under Section 8c(15)(A) of the Act, any handler subject 
to an order may request modification or exemption from such order by 
filing with the United States Department of Agriculture (USDA) a 
petition stating that the order, any provision of the order, or any 
obligation imposed in connection with the order is not in accordance 
with the law. A handler is afforded the opportunity for a hearing on 
the petition. After a hearing, USDA would rule on the petition. The Act 
provides that the district court of the United States in any district 
in which the handler is an inhabitant, has its principle place of 
business, has jurisdiction in equity to review USDA's ruling on the 
petition, provided a bill in equity is filed not later than 20 days 
after the date of the entry of the ruling.
    Interested parties who wish to introduce exhibits should provide 
the Administrative Law Judge at the hearing with (4) copies of such 
exhibits for the official record. Additional copies should be made 
available for the use by other hearing participants. Any party that has 
submitted a proposal noticed herein, when participating as a witness, 
is required to make their testimony--if prepared as an exhibit--and any 
other exhibits, available to USDA officials prior to the start of the 
hearing on the day of their appearance. Individual dairy farmers are 
not subject to this requirement.
    The hearing will continue until such time as determined to have 
ended by the presiding Administrative Law Judge. The schedule for the 
next session will be announced at the time of adjournment. Such 
reconvening date and time will also be posted on the AMS-Dairy Programs 
Web site at http://www.ams.usda.gov/dairy.
    The proposed amendments, as set forth below, have not received the 
approval of USDA.

List of Subjects in 7 CFR Parts 1000, 1001, 1005, 1006, 1007, 1030, 
1032, 1033, 1124, 1126 and 1131

    Milk marketing orders.

    The authority citation for 7 CFR Parts 1000, 1001, 1005, 1006, 
1007, 1030, 1032, 1033, 1124, 1126 and 1131 read as follows:

    Authority: 7 U.S.C. 601-674, and 7253.

    Proposed by National Milk Producers Federation and International 
Dairy Foods Association. 

Proposal No. 1

    This proposal seeks to eliminate the producer-handler provisions 
from all orders.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS


Sec.  1000.8   [Amended]

    1. Amend Sec.  1000.8 by:
    (1) Removing paragraph (b); and
    (2) Redesignating paragraphs (c), (d) and (e) as (b), (c) and (d).

PART 1001--MILK IN THE NORTHEAST MARKETING AREA


Sec.  1001.10  [Removed]

    2. Remove and reserve Sec.  1001.10.

[[Page 16297]]

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA


Sec.  1005.10   [Removed]

    3. Remove and reserve Sec.  1005.10.

PART 1006--MILK IN THE FLORIDA MARKETING AREA


Sec.  1006.10   [Removed]

    4. Remove and reserve Sec.  1006.10.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA


Sec.  1007.10  [Removed]

    5. Remove and reserve Sec.  1007.10.

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA


Sec.  1030.10   [Removed]

    6. Remove and reserve Sec.  1030.10.

PART 1032--MILK IN THE CENTRAL MARKETING AREA


Sec.  1032.10   [Removed]

    7. Remove and reserve Sec.  1032.10.

PART 1033--MILK IN THE MIDEAST MARKETING AREA


Sec.  1033.10   [Removed]

    8. Remove and reserve Sec.  1033.10.

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA


Sec.  1124.10   [Removed]

    9. Remove and reserve Sec.  1124.10.

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA


Sec.  1126.10   [Removed]

    10. Remove and reserve Sec.  1126.10.

PART 1131--MILK IN THE ARIZONA MARKETING AREA


Sec.  1131.10   [Removed]

    11. Remove and reserve Sec.  1131.10.

Proposal No. 2

    This proposal seeks to modify the exempt plant provision by: (1) 
Increasing the current limit on monthly route disposition and packaged 
sales of fluid milk products to other plants from 150,000 pounds or 
less during the month to 450,000 pounds or less during the month; (2) 
applying the 450,000 pound per month threshold to a plant's total 
monthly disposition; and (3) limiting exemption status to plants that 
produce uniquely labeled products.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    12. Amend Sec.  1000.8 by revising paragraph (e)(4) to read as 
follows:


Sec.  1000.8   Nonpool plant.

* * * * *
    (e) * * *
    (4) A plant that in all markets has route disposition and packaged 
sales of fluid milk products to other plants of 450,000 pounds or less 
during the month, all of which are uniquely branded.
    Proposed by Hatchland Farm, LLC.

Proposal No. 3

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of the Northeast order 
if their Class I route disposition exceeds 3,000,000 pounds of milk per 
month.

PART 1001--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    13. Amend Sec.  1001.10 by revising paragraph (a) to read as 
follows:


Sec.  1001.10   Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month;
* * * * *
    Proposed by Lochmead Dairy.

Proposal No. 4

    This proposal seeks to revise the producer-handler provisions in 
all orders except the Pacific Northwest and Arizona orders. 
Specifically, this proposal seeks to end the regulatory exemption of 
producer-handlers from the pooling and pricing provisions of their 
respective orders if their Class I route disposition exceeds 3,000,000 
pounds of milk per month.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

    14. Amend Sec.  1001.10 by revising paragraph (a) to read as 
follows:


Sec.  1001.10   Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month;
* * * * *

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

    15. Amend Sec.  1005.10 by revising paragraph (a) to read as 
follows:


Sec.  1005.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month;
* * * * *

PART 1006--MILK IN THE FLORIDA MARKETING AREA

    16. Amend Sec.  1006.10 by revising paragraph (a) to read as 
follows:


Sec.  1006.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month;
* * * * *

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

    17. Amend Sec.  1007.10 paragraph (a) to read as follows:


Sec.  1007.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month;
* * * * *

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    18. Amend Sec.  1030.10 by revising paragraph (a) to read as 
follows:


Sec.  1030.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month;
* * * * *

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    19. Amend Sec.  1032.10 by revising paragraph (a) to read as 
follows:


Sec.  1032.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing

[[Page 16298]]

area during the month not to exceed 3,000,000 pounds per month;
* * * * *

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    20. Amend Sec.  1033.10 by revising paragraph (a) to read as 
follows:


Sec.  1033.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month;
* * * * *

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

    21. Amend Sec.  1126.10 by revising paragraph (a) to read as 
follows:


Sec.  1126.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month;
* * * * *
    Proposed by Homeland Creamery and Maple View Farm Milk Co., LLC.

Proposal No. 5

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of the Appalachian, 
Florida and Southeast milk marketing orders if their Class I route 
disposition and packaged sales of fluid milk products to other plants 
exceeds 750,000 pounds of milk per month.

PART 1005--MILK IN THE APPALACHIAN MILK MARKETING ORDER

    22. Amend Sec.  1005.10 by revising paragraph (a) to read as 
follows:


Sec.  1005.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition and packaged sales of fluid milk products within 
the marketing area during the month not to exceed 750,000 pounds per 
month, all of which are uniquely branded;
* * * * *

PART 1006--MILK IN THE FLORIDA MILK MARKETING ORDER

    23. Amend Sec.  1006.10 by revising paragraph (a) to read as 
follows:


Sec.  1006.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition and packaged sales of fluid milk products within 
the marketing area during the month not to exceed 750,000 pounds per 
month, all of which are uniquely branded;
* * * * *

PART 1007--MILK IN THE SOUTHEAST MILK MARKETING ORDER

    24. Amend Sec.  1007.10 by revising paragraph (a) to read as 
follows:


Sec.  1007.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition and packaged sales of fluid milk products within 
the marketing area during the month not to exceed 750,000 pounds per 
month, all of which are uniquely branded;
* * * * *

Proposal No. 6

    This proposal seeks to amend the exempt plant provision for the 
Appalachian, Florida and Southeast milk marketing orders by increasing 
the current limit on monthly route disposition and packaged sales of 
fluid milk products to other plants from 150,000 pounds or less during 
the month to 750,000 pounds or less during the month.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    25. Amend Sec.  1000.8 by revising paragraph (e)(4) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (e) * * *
    (4) A plant that has route disposition and packaged sales of fluid 
milk products to other plants of 150,000 pounds or less during the 
month, except in the Appalachian, Florida and Southeast milk marketing 
orders.

PART 1005--MILK IN THE APPALACHIAN MILK MARKETING ORDER

    26. Revise Sec.  1005.8 to read as follows:
    Nonpool plant means any milk receiving, manufacturing, or 
processing plant other than a pool plant. The following categories of 
nonpool plants are further defined as follows:
    (a) A fully regulated plant regulated under another Federal order 
means a plant that is fully subject to the pricing and pooling 
provisions of another Federal order.
    (b) Producer-handler plant means a plant operated by a producer-
handler as defined under any Federal order.
    (c) Partially regulated distributing plant means a nonpool plant 
that is not a plant fully regulated under another Federal order, a 
producer-handler plant, or an exempt plant, from which there is route 
disposition in the marketing area during the month.
    (d) Unregulated supply plant means a supply plant that does not 
qualify as a pool supply plant and is not a plant fully regulated under 
another Federal order, a producer-handler plant, or an exempt plant.
    (e) An exempt plant means a plant described in this paragraph that 
is exempt from the pricing and pooling provisions of any order provided 
that the operator of the plant files reports as prescribed by the 
market administrator of any marketing area in which the plant 
distributes packaged fluid milk products to enable determination of the 
handler's exempt status:
    (1) A plant that is operated by a governmental agency that has no 
route disposition incommercial channels;
    (2) A plant that is operated by a duly accredited college or 
university disposing of fluid milk products only through operation of 
its own facilities with no route disposition in commercial channels;
    (3) A plant from which the total route disposition is for 
individuals or institutions for charitable purposes without 
remuneration; or
    (4) A plant that route disposition and packaged sales of fluid milk 
products to other plants of 750,000 pound or less during the month.

PART 1006--MILK IN THE FLORIDA MILK MARKETING ORDER

    27. Revise Sec.  1006.8 to read as follows:
    Nonpool plant means any milk receiving, manufacturing, or 
processing plant other than a pool plant. The following categories of 
nonpool plants are further defined as follows:
    (a) A fully regulated plant regulated under another Federal order 
means a plant that is fully subject to the pricing and pooling 
provisions of another Federal order.
    (b) Producer-handler plant means a plant operated by a producer-
handler as defined under any Federal order.
    (c) Partially regulated distributing plant means a nonpool plant 
that is not a plant fully regulated under another Federal order, a 
producer-handler plant, or an exempt plant, from which there is route 
disposition in the marketing area during the month.

[[Page 16299]]

    (d) Unregulated supply plant means a supply plant that does not 
qualify as a pool supply plant and is not a plant fully regulated under 
another Federal order, a producer-handler plant, or an exempt plant.
    (e) An exempt plant means a plant described in this paragraph that 
is exempt from the pricing and pooling provisions of any order provided 
that the operator of the plant files reports as prescribed by the 
market administrator of any marketing area in which the plant 
distributes packaged fluid milk products to enable determination of the 
handler's exempt status:
    (1) A plant that is operated by a governmental agency that has no 
route disposition in commercial channels;
    (2) A plant that is operated by a duly accredited college or 
university disposing of fluid milk products only through operation of 
its own facilities with no route disposition in commercial channels;
    (3) A plant from which the total route disposition is for 
individuals or institutions for charitable purposes without 
remuneration; or
    (4) A plant that route disposition and packaged sales of fluid milk 
products to other plants of 750,000 pound or less during the month.

PART 1007--MILK IN THE SOUTHEAST MILK MARKETING ORDER

    28. Revise Sec.  1007.8 to read as follows:
    Nonpool plant means any milk receiving, manufacturing, or 
processing plant other than a pool plant. The following categories of 
nonpool plants are further defined as follows:
    (a) A fully regulated plant regulated under another Federal order 
means a plant that is fully subject to the pricing and pooling 
provisions of another Federal order.
    (b) Producer-handler plant means a plant operated by a producer-
handler as defined under any Federal order.
    (c) Partially regulated distributing plant means a nonpool plant 
that is not a plant fully regulated under another Federal order, a 
producer-handler plant, or an exempt plant, from which there is route 
disposition in the marketing area during the month.
    (d) Unregulated supply plant means a supply plant that does not 
qualify as a pool supply plant and is not a plant fully regulated under 
another Federal order, a producer-handler plant, or an exempt plant.
    (e) An exempt plant means a plant described in this paragraph that 
is exempt from the pricing and pooling provisions of any order provided 
that the operator of the plant files reports as prescribed by the 
market administrator of any marketing area in which the plant 
distributes packaged fluid milk products to enable determination of the 
handler's exempt status:
    (1) A plant that is operated by a governmental agency that has no 
route disposition in commercial channels;
    (2) A plant that is operated by a duly accredited college or 
university disposing of fluid milk products only through operation of 
its own facilities with no route disposition in commercial channels;
    (3) A plant from which the total route disposition is for 
individuals or institutions for charitable purposes without 
remuneration; or
    (4) A plant that route disposition and packaged sales of fluid milk 
products to other plants of 750,000 pound or less during the month.

    Proposed by Dunajski Dairy.

Proposal No. 7

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of the Northeast order 
if their Class I route disposition exceeds 3,000,000 pounds of milk per 
month.

PART 1001--MILK IN THE NORTHEAST MILK MARKETING ORDER

    29. Amend Sec.  1001.10 by revising paragraph (a) to read as 
follows:


Sec.  1001.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month.
* * * * *
    Proposed by Administrator, Division of Agricultural Development, 
Wisconsin Department of Agriculture, Trade and Consumer Protection.

Proposal No. 8

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of all orders if their 
Class I route disposition exceeds 2,000,000 pounds of milk per month.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    30. Amend Sec.  1000.8 by revising paragraph (b) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (b) Producer-handler plant means a plant operated by a producer-
handler as defined under any Federal order provided the producer-
handler in all markets has route disposition and packaged fluid sales 
of fluid milk products of 2,000,000 million pounds or less during the 
month.
* * * * *

Proposal No. 9

    This proposal seeks to amend the exempt plant provision for all 
milk orders by increasing the current limit on monthly route 
disposition and packaged sales of fluid milk products to other plants 
from 150,000 pounds or less during the month to 2,000,000 pounds or 
less during the month.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    31. Amend Sec.  1000.8 by revising paragraph (e)(4) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (e) * * *
    (4) A plant that in all markets has route disposition and packaged 
sales of fluid milk products to other plants of 2,000,000 pounds or 
less during the month.
    Proposed by Way-Har Farms.

Proposal No. 10

    This proposal seeks to amend the exempt plant provision for all 
milk orders by increasing the current limit on monthly route 
disposition and packaged sales of fluid milk products to other plants 
from 150,000 pounds or less during the month to 450,000 pounds or less 
during the month.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    32. Amend Sec.  1000.8 by revising paragraph (e)(4) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (e) * * *
    (4) A plant that has route disposition and packaged sales of fluid 
milk products to other plants of 450,000 pounds or less during the 
month.
    Proposed by Shatto Farms, Inc.

Proposal No. 11

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of all orders if their 
Class I route disposition exceeds 1,000,000 pounds of milk per month.

[[Page 16300]]

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    33. Amend Sec.  1000.8 by revising paragraph (b) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (b) Producer-handler plant means a plant operated by a producer-
handler as defined under any Federal order provided the producer-
handler has route disposition and packaged fluid sales of fluid milk 
products of 1,000,000 million pounds or less during the month.
* * * * *

Proposal No. 12

    This proposal seeks, assuming elimination of producer-handler's 
exemption from pricing and pooling provisions of the orders, to amend 
the exempt plant provision for all milk orders by increasing the 
current limit on monthly route disposition and packaged sales of fluid 
milk products to other plants from 150,000 pounds or less during the 
month to 1,000,000 pounds or less during the month.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    34. Amend Sec.  1000.8 by revising paragraph (e)(4) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (e) * * *
    (4) A plant that has route disposition and packaged sales of fluid 
milk products to other plants of 1,000,000 pounds or less during the 
month.

Proposal No. 13

    Proposed by New England Producer-Handlers Association, Inc. et al.
    This proposal seeks to expand the producer-handler exemption from 
pricing and pooling provisions, in all orders, to apply to the Class I 
route disposition and packaged sales of fluid milk products of handlers 
who operate, in common, a milk production facility and the processing 
and packaging facility used to process and package the raw milk from 
the aforementioned milk production facility, up to 3,000,000 pounds per 
month. Should this proposal not be adopted in all orders, then it shall 
apply exclusively to the Northeast and Appalachian milk marketing 
orders.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    35. Amend Sec.  1000.8 by revising paragraph (b) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (b) Producer-handler plant means a plant operated by a producer-
handler as defined under any Federal order provided that the producer-
handler:
    (1) Owns or operates, in common, the processing and packaging 
operations and the dairy animals and other necessary resources to 
produce all Class I milk handled, up to 3,000,000 pounds of route 
disposition and packaged fluid sales of fluid milk products during the 
month. All Class I route disposition and packaged sales of fluid milk 
products above 3,000,000 pounds per month will be subject to the 
pricing and pooling provisions of the order.
    (b) [Reserved]
* * * * *

Proposal No. 14

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    36. Amend Sec.  1000.8 by revising paragraph (e)(4) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (e) * * *
    (4) A plant that has route disposition and packaged sales of fluid 
milk products to other plants of up to 3,000,000 pounds or less during 
the month. All Class I route disposition and packaged sales of fluid 
milk products above 3,000,000 pounds per month will be subject to the 
pricing and pooling provisions of the order.

    Proposed by Coopers' Hilltop Farm.

Proposal No. 15

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of the Northeast order 
if their Class I route disposition exceeds 3,000,000 pounds of milk per 
month.

PART 1001--MILK IN THE NORTHEAST MILK MARKETING ORDER

    37. Amend Sec.  1001.10 by revising paragraph (a) to read as 
follows:


Sec.  1001.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition within the marketing area during the month not to 
exceed 3,000,000 pounds per month.
* * * * *

Proposal No. 16

    This proposal seeks to amend the exempt plant provision for all 
milk orders by increasing the current limit on monthly route 
disposition and packaged sales of fluid milk products to other plants 
from 150,000 pounds or less during the month to 450,000 pounds or less 
during the month.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    38. Amend Sec.  1000.8 by revising paragraph (e)(4) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (e) * * *
    (4) A plant that has route disposition and packaged sales of fluid 
milk products to other plants of 450,000 pounds or less during the 
month.

    Proposed by Mallorie's Dairy, Inc, Country Morning Farms and 
Nature's Dairy.

Proposal No. 17

    This proposal seeks to exempt, from pricing and pooling provisions, 
the own-farm milk of handlers--who are either producer-handlers, exempt 
plants, or non-pool plants--with own-farm production during at least 3 
consecutive months during the 24-month period immediately prior to the 
effective date of this proposal, should it be adopted. The exemption 
would apply to the lesser of: (1) A monthly volume based on the daily 
average milk production marketed from the handler's own-farm during any 
3 consecutive months of production from January 2007 through February 
2009; or (2) 3,000,000 pounds per month, with an additional allowance 
of up to 10 percent additional own-farm production for non-Class I 
balancing. Under this proposal any milk in excess of the defined 
exemption would be subject to the pricing and pooling provisions of the 
respective order.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    39. Add new Sec.  1000.10 to read as follows:


Sec.  1000.10   Pool-exempt own-farm production of distributing plants.

    Any handler operating a plant subject to regulation as a pool 
distributing plant, as defined in Sec. ----.7 of any milk

[[Page 16301]]

marketing order, or as a partially regulated distributing plant under 
any milk marketing order, may make a one-time election to exempt the 
handler's own-farm milk production from the volume of producer milk 
receipts eligible to participate in the marketwide pool as ``producer 
milk,'' and otherwise subject to producer-settlement fund payment 
obligations under Sec. Sec. ----.71 and ----.72 of the milk marketing 
order, or Sec.  1000.76(b) of the General Provisions. Such election and 
exemption shall be subject to the following conditions and limitations:
    (a) Volume limitation for pool-exempt own-farm milk production. The 
volume of own-farm milk production that a distributing plant handler 
may elect to exempt under this section shall, for any month, be the 
lesser of:
    (1) A monthly volume based on the daily average milk production 
marketed from the handler's own-farm(s) during any three consecutive 
months of production, as designated by the handler and subject to 
verification by the market administrator, from January 2007 through 
February 2009, or
    (2) A daily average production of 110,000 pounds times the number 
of days in the month to which the exemption may apply provided that the 
volume of packaged fluid milk products distributed on routes from such 
pool-exempt production shall in no event exceed a daily average of 
100,000 pounds. Own-farm production of the handler in excess of the 
exempt volume shall be subject to producer-settlement fund payment 
obligations in the same manner as milk produced by any dairy farmer.
    (b) Limitations based upon prior operations of handlers eligible 
elect exemption for own-farm milk production. Handlers with own-farm 
production are not eligible to elect pool exemption for such production 
under this section unless the handler operated a distributing plant 
supplied with milk from its own-farm(s) during at least three 
consecutive months during the 24-month period immediately preceding the 
effective date of this section, and the distributing plant was either: 
a producer-handler plant, an exempt plant, or a non-pool plant during 
those months.
    (c) Limitations based upon common ownership in the handler's plant 
and farm facilities. As used in this section, ``own-farm'' means any 
dairy farm(s) of the handler that is owned by the same person or 
persons who own and operate the handler plant facility, and their 
ownership in the farm(s) is at least 95 percent identical with their 
ownership in the handler. Additionally,
    (1) Owners of the handler and associated producer shall not exceed 
10 individual persons or owners of equitable interest in the handler or 
producer business entity,
    (2) For purposes of this section, ownership held by members of a 
family shall be considered single ownership by one person. Members of a 
family for purposes of such single ownership include only: A spouse, a 
former spouse, and persons of lineal consanguinity of the first or 
second degree or collateral consanguinity to the fourth degree, and 
their spouses (or former spouses), and includes an adopted child the 
same as a natural child and kindred of the half blood equally with 
those of the whole blood of the owner(s).
    (3) Property pledged or hypothecated in any manner to others shall 
nevertheless be considered ``owned'' if equitable ownership with 
management and control remain with the persons operating the plant and 
associated dairy farm(s).
    (d) Date upon which, and manner in which, the one-time election 
must be exercised. The market administrator shall provide timely notice 
in writing to handlers with own-farm production who are or may be 
eligible to elect a pool exemption for such production under this 
section. The election for pool-exempt own-farm production shall be 
exercised by an eligible handler by giving notice of election in 
writing to the market administrator, which notice shall contain facts 
upon which the handler claims to qualify under this section, on or 
before:
    (1) Thirty days after the effective date of this provision; or
    (2) For a handler with own-farm production on the effective date of 
this provision, but without route disposition in any Federal milk 
marketing area for twelve months preceding the effective date, thirty 
days following first route disposition in the marketing area, or 
fifteen days after notice by the market administrator, whichever is 
later.
    (e) Applicability of minimum classified prices to handlers with 
pool-exempt own-farm milk. Exemption from payment obligations in 
Sec. Sec.  ----.71 and ----.72 for own-farm milk under this section 
shall not constitute an exemption for own-farm milk from compliance 
with minimum classified price obligations. For payment purposes, the 
handler will be deemed to have paid to its own-farm a price for pool-
exempt own-farm milk equal to its butterfat and skim milk (or skim 
components) value, as provided by calculations for ``handler's value of 
milk'' in Sec. ----.60 of the marketing order.
    (f) Waiver or loss of eligibility for pool-exempt own-farm 
production. The own-farm production of any handler
    (1) Who has failed to make the election provided by this section;
    (2) Who, after making the election, fails to conform with any 
limitation or requirement for such exemption; or
    (3) Who has given notice in writing to the market administrator 
that it no longer wishes to exempt its own-farm production from the 
pool, shall be regulated, pooled, and priced in the same manner as milk 
produced by any dairy farm not eligible for pool exemption, and the 
handler shall not thereafter be eligible to exercise the exemption 
provided herein.
    40. Amend Sec.  1000.14 by adding new paragraph (d) to read as 
follows:
* * * * *
    (d) Receipts of fluid milk products and bulk fluid cream products 
from any dairy farm eligible to market pool-exempt own-farm milk 
pursuant to Sec.  ----.10, except with respect to such receipts by the 
distributing plant owned in common with the farm as described in Sec.  
----.10.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

    41. Amend Sec.  1001.60 by adding new paragraph (j) to read as 
follows:


Sec.  1001.60  Handler's value of milk.

* * * * *
    (j) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

    42. Amend Sec.  1005.60 by adding new paragraph (h) to read as 
follows:


Sec.  1005.60  Handler's value of milk.

* * * * *
    (h) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk

[[Page 16302]]

of the handler qualified for exemption pursuant to Sec. ----.10 shall 
not be included as part of the ``total value'' of milk, ``total 
hundredweight'' of producer milk, or ``total pounds'' of milk 
components wherever those terms (or equivalent terms) are used in or 
incorporated by Sec. Sec. ----.61 and ----.71 through ----.76.

PART 1006--MILK IN THE FLORIDA MARKETING AREA

    43. Amend Sec.  1006.60 by adding new paragraph (h) to read as 
follows:


Sec.  1006.60  Handler's value of milk.

* * * * *
    (h) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

    44. Amend Sec.  1007.60. by adding new paragraph (h) to read as 
follows:


Sec.  1007.60   Handler's value of milk.

* * * * *
    (h) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    45. Amend Sec.  1030.60 by adding new paragraph (l) to read as 
follows:


Sec.  1030.60  Handler's value of milk.

* * * * *
    (l) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    46. Amend Sec.  1032.60 by adding new paragraph (k) to read as 
follows:


Sec.  1032.60  Handler's value of milk.

* * * * *
    (k) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    47. Amend Sec.  1033.60 by adding new paragraph (k) to read as 
follows:


Sec.  1033.60  Handler's value of milk.

* * * * *
    (k) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

    48. Amend Sec.  1124.60 by adding new paragraph (j) to read as 
follows:


Sec.  1124.60  Handler's value of milk.

* * * * *
    (j) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

    49. Amend Sec.  1126.60 by adding new paragraph (k) to read as 
follows:


Sec.  1126.60  Handler's value of milk.

* * * * *
    (k) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

PART 1131--MILK IN THE ARIZONA MARKETING AREA

    50. Amend Sec.  1131.60 by adding new paragraph (g) to read as 
follows:


Sec.  1131.60  Handler's value of milk.

* * * * *
    (g) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec. ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec. ----.10 shall not be included as part of the 
``total value'' of milk, ``total hundredweight'' of producer milk, or 
``total pounds'' of milk components wherever those terms (or equivalent 
terms) are used in or incorporated by Sec. Sec. ----.61 and ----.71 
through ----.76.

    Proposed by Hornstra Farms.

Proposal No. 18

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of all orders if their 
production exceeds 1,500,000 pounds of milk per month.

[[Page 16303]]

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    51. Amend Sec.  1000.8 by revising paragraph (b) to read as 
follows:


Sec.  1000.8   Nonpool plant.

* * * * *
    (b) Producer-handler plant means a plant operated by a producer-
handler as defined under any Federal order provided the producer-
handler in all markets has milk production of 1,500,000 million pounds 
or less during the month.
* * * * *
    Proposed Pennsylvania Association of Milk Dealers.

Proposal No. 19

    This proposal seeks to amend the exempt plant provision for all 
milk orders by increasing the current limit on monthly route 
disposition and packaged sales of fluid milk products to other plants 
from 150,000 pounds or less during the month to 450,000 pounds or less 
during the month.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    52. Amend Sec.  1000.8 by revising paragraph (e)(4) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (e) * * *
    (4) A plant that in all markets has route disposition and packaged 
sales of fluid milk products to other plants of 450,000 pounds or less 
during the month.

    Proposed by Select Milk Producers, Inc. and Continental Dairy 
Products, Inc.

Proposal No. 20

    This proposal would establish a one-time exemption from pricing and 
pooling provisions for certain types of handlers.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    53. Add new section Sec.  1000.10 to read as follows:


1000.10  Pool-exempt own-farm production of distributing plants.

    Any handler operating a plant subject to regulation as a pool 
distributing plant, as defined in Sec.  ----.7 of any milk marketing 
order, or as a partially regulated distributing plant under any milk 
marketing order, may make a one-time election to exempt the handler's 
own-farm milk production from the volume of producer milk receipts 
otherwise subject to producer-settlement fund payment obligations under 
Sec. Sec.  ----.71 and ----.72 of the milk marketing order, or Sec.  
1000.76 of the General Provisions. Such election and exemption shall be 
subject to the following conditions and limitations:
    (a) Volume limitation for pool-exempt own-farm milk production. The 
volume of own-farm milk production that a distributing plant handler 
may elect to exempt under this section shall, for any month, be the 
lesser of:
    (1) A monthly volume based on the daily average milk production 
marketed from the handler's own-farm(s) during any three consecutive 
months of production, as designated by the handler and subject to 
verification by the market administrator, from January 2007 through 
February 2008, or,
    (2) A daily average production of 100,000 pounds times the number 
of days in the month to which the exemption may apply. Own-farm 
production of the handler in excess of the exempt volume shall be 
subject to producer-settlement fund payment obligations in the same 
manner as milk produced by any dairy farmer.
    (b) Limitations based upon prior operations of handlers eligible 
elect exemption for own-farm milk production. Handlers with own-farm 
production are not eligible to elect pool exemption for such production 
under this section unless:
    (1) The handler operated a distributing plant supplied with milk 
from its own-farm(s) during at least three consecutive months from 
January 2007 through February 2008, and
    (2) Milk produced by the own-farm(s) that supplied the handler's 
distributing plant was not received as producer milk at the pool plant 
of any other handler under any Federal milk marketing order at any time 
after February 2008.
    (c) Limitations based upon ownership in the handler's plant and 
farm facilities. Handlers with own-farm production are not eligible to 
elect own-farm pool exemption under this section unless all of the 
ownership of the handler as plant operator and all of the ownership of 
the dairy farm(s) is owned by the same person or persons, and their 
ownership in the producer is at least 95 percent identical with their 
ownership in the handler. Additionally,
    (1) Owners of the plant and associated producer shall not exceed 10 
individual persons or owners of equitable interest in the handler or 
producer business entity,
    (2) For purposes of this section, a ``person'' or ``persons'' 
includes the spouse, or other persons of lineal consanguinity of the 
first or second degree or collateral consanguinity to the fourth 
degree, and their spouses, and includes an adopted child the same as a 
natural child and kindred of the half blood equally with those of the 
whole blood of the owner and ownerships by persons so related shall be 
considered single ownership by one person.
    (3) For purposes of this section, property pledged or hypothecated 
in any manner to others shall nevertheless be considered ``owned'' if 
equitable ownership with management and control remain with the persons 
operating the plant and associated dairy farm(s).
    (d) Date upon which, and manner in which, the one-time election 
must be exercised. The market administrator shall provide timely notice 
in writing to handlers with own-farm production who are or may be 
eligible to elect a pool exemption for such production under this 
section. The election for pool-exempt own-farm production shall be 
exercised by an eligible handler by giving notice of election in 
writing to the market administrator, which notice shall contain facts 
upon which the handler claims to qualify under this section, on or 
before:
    (1) Thirty days after the effective date of this provision; or
    (2) For a handler with own-farm production on the effective date of 
this provision, but without route disposition in any Federal milk 
marketing area for 12 months preceding the effective date, 30 days 
following first route disposition in the marketing area, or 15 days 
after notice by the market administrator, whichever is later.
    (e) Applicability of minimum classified prices to handlers with 
pool-exempt own-farm milk. Exemption from payment obligations in 
Sec. Sec.  ----.71 and ----.72 for own-farm milk under this section 
shall not constitute an exemption for own-farm milk from compliance 
with minimum classified price obligations. For payment purposes, the 
handler will be deemed to have paid to its own-farm a price for pool-
exempt own-farm milk equal to its butterfat and skim milk (or skim 
components) value, as provided by calculations for a handler's value of 
milk in Sec.  ----.60 of the marketing order.
    (f) Waiver or loss of eligibility for pool-exempt own-farm 
production. The own-farm production of any handler
    (1) Who has failed to make the election provided by this section;
    (2) Who, after making the election, fails to conform with any 
limitation or requirement for such exemption for any

[[Page 16304]]

period in which it fails to so conform; or
    (3) Who has given notice in writing to the market administrator 
that it no longer wishes to exempt its own-farm production from the 
pool shall be regulated and priced in the same manner as milk produced 
by any dairy farm not eligible for pool exemption, and the handler 
shall not thereafter be eligible to exercise the exemption provided 
herein.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    54. Amend Sec.  1000.14 by adding paragraph (d) to read as follows:
* * * * *
    (d) Receipts of fluid milk products and bulk fluid cream products 
from any dairy farm eligible to market pool-exempt own-farm milk 
pursuant to Sec.  ----.10, except with respect to such receipts by the 
distributing plant owned in common with the farm as described in Sec.  
----.10.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

    55. Revise Sec.  1001.10 to read as follows:


Sec.  1001.10  Producer-handler.

    See Sec.  1000.10.

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

    56. Revise Sec.  1005.10 to read as follows:


Sec.  1005.10  Producer-handler.

    See Sec.  1000.10.

PART 1006--MILK IN THE FLORIDA MARKETING AREA

    57. Revise Sec.  1006.10 to read as follows:


Sec.  1006.10  Producer-handler.

    See Sec.  1000.10.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

    58. Revise Sec.  1007.10 to read as follows:


Sec.  1007.10  Producer-handler.

    See Sec.  1000.10.

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    59. Revise Sec.  1030.10 to read as follows:


Sec.  1030.10  Producer-handler.

    See Sec.  1000.10.

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    60. Revise Sec.  1032.10 to read as follows:


Sec.  1032.10  Producer-handler.

    See Sec.  1000.10.

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    61. Revise Sec.  1033.10 to read as follows:


Sec.  1033.10  Producer-handler.

    See Sec.  1000.10.

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

    62. Revise Sec.  1124.10 to read as follows:


Sec.  1124.10  Producer-handler.

    See Sec.  1000.10.

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

    63. Revise Sec.  1126.10 to read as follows:


Sec.  1126.10  Producer-handler.

    See Sec.  1000.10.

PART 1131--MILK IN THE ARIZONA MARKETING AREA

    64. Revise Sec.  1131.10 to read as follows:


Sec.  1131.10  Producer-handler.

    See Sec.  1000.10.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

    65. Amend Sec.  1001.60 by adding paragraph (j) to read as follows:


Sec.  1001.60  Handler's value of milk.

* * * * *
    (j) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

    66. Amend Sec.  1005.60 by adding paragraph (h) to read as follows:


Sec.  1005.60  Handler's value of milk.

* * * * *
    (h) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1006--MILK IN THE FLORIDA MARKETING AREA

    67. Amend Sec.  1006.60 by adding paragraph (h) to read as follows:


Sec.  1006.60  Handler's value of milk.

* * * * *
    (h) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

    68. Amend Sec.  1007.60 by adding paragraph (h) to read as follows:


Sec.  1007.60  Handler's value of milk.

* * * * *
    (h) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    69. Amend Sec.  1030.60 by adding paragraph (l) to read as follows:

[[Page 16305]]

Sec.  1030.60  Handler's value of milk.

* * * * *
    (l) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    70. Amend Sec.  1032.60 by adding paragraph (k) to read as follows:


Sec.  1032.60  Handler's value of milk.

* * * * *
    (k) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    71. Amend Sec.  1033.60 by adding paragraph (k) to read as follows:


Sec.  1033.60  Handler's value of milk.

* * * * *
    (k) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

    72. Amend Sec.  1124.60 by adding paragraph (j) to read as follows:


Sec.  1124.60  Handler's value of milk.

* * * * *
    (j) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

    73. Amend Sec.  1126.60 by adding paragraph (k) to read as follows:


Sec.  1126.60  Handler's value of milk.

* * * * *
    (k) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

PART 1131--MILK IN THE ARIZONA MARKETING AREA

    74. Amend Sec.  1131.60 by adding paragraph (g) to read as follows:


Sec.  1131.60  Handler's value of milk.

* * * * *
    (g) For purposes of calculating the producer price differential in 
Sec.  ----.61, or a handler's obligation to or from the producer-
settlement fund in Sec. Sec.  ----.71, ----.72, and ----.76, the value 
and volume of pool-exempt own-farm milk of the handler qualified for 
exemption pursuant to Sec.  ----.10 shall not be included as part of 
the ``total value'' of milk, ``total hundredweight'' of producer milk, 
or ``total pounds'' of milk components wherever those terms (or 
equivalent terms) are used in or incorporated by Sec. Sec.  ----.61 and 
----.71 through ----.76.

Proposal No. 21

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pricing and pooling provisions of all orders, except 
the Pacific Northwest and Arizona milk marketing orders, if their route 
disposition exceeds 3,000,000 pounds of milk per month.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

    75. Amend Sec.  1001.10 by revising paragraph (a) to read as 
follows:


Sec.  1001.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is monthly route disposition in the marketing area, not to exceed 3 
million pounds;
* * * * *

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

    76. Amend Sec.  1005.10 by revising paragraph (a) to read as 
follows:


Sec.  1005.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is monthly route disposition in the marketing area, not to exceed 3 
million pounds;
* * * * *

PART 1006--MILK IN THE FLORIDA MARKETING AREA

    77. Amend Sec.  1006.10 by revising paragraph (a) to read as 
follows:


Sec.  1006.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is monthly route disposition in the marketing area, not to exceed 3 
million pounds;
* * * * *

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

    78. Amend Sec.  1007.10 by revising paragraph (a) to read as 
follows:


Sec.  1007.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is monthly route disposition in the marketing area, not to exceed 3 
million pounds;
* * * * *

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    79. Amend Sec.  1030.10 by revising paragraph (a) to read as 
follows:

[[Page 16306]]

Sec.  1030.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is monthly route disposition in the marketing area, not to exceed 3 
million pounds;
* * * * *

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    80. Amend Sec.  1032.10 by revising paragraph (a) to read as 
follows:


Sec.  1032.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is monthly route disposition in the marketing area, not to exceed 3 
million pounds;
* * * * *

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    81. Amend Sec.  1033.10 by revising paragraph (a) to read as 
follows:


Sec.  1033.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is monthly route disposition in the marketing area, not to exceed 3 
million pounds;
* * * * *

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

    82. Amend Sec.  1126.10 by revising paragraph (a) to read as 
follows:


Sec.  1126.10  Producer-handler.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is monthly route disposition in the marketing area, not to exceed 3 
million pounds;
* * * * *
    Proposed by Northeast Dairy Foods Association, Inc.

Proposal No. 22

    This proposal seeks to eliminate the producer-handler provision of 
all orders.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS


Sec.  1000.8  [Amended]

    83. Amend Sec.  1000.8 by:
    (1) Removing paragraph (b); and
    2) Redesignating paragraphs (c), (d) and (e) as (b), (c) and (d).

PART 1001--MILK IN THE NORTHEAST MARKETING AREA


Sec.  1001.10  [Removed]

    84. Remove and reserve Sec.  1001.10.

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA


Sec.  1005.10  [Removed]

    85. Remove and reserve Sec.  1005.10.

PART 1006--MILK IN THE FLORIDA MARKETING AREA


Sec.  1006.10  [Removed]

    86. Remove and reserve Sec.  1006.10.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA


Sec.  1007.10  [Removed]

    87. Remove and reserve Sec.  1007.10.

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA


Sec.  1030.10  [Removed]

    88. Remove and reserve Sec.  1030.10.

PART 1032--MILK IN THE CENTRAL MARKETING AREA


Sec.  1032.10  [Removed]

    89. Remove and reserve Sec.  1032.10.

PART 1033--MILK IN THE MIDEAST MARKETING AREA


Sec.  1033.10  [Removed]

    90. Remove and reserve Sec.  1033.10.

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA


Sec.  1124.10  [Removed]

    91. Remove and reserve Sec.  1124.10.

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA


Sec.  1126.10  [Removed]

    92. Remove and reserve Sec.  1126.10.

PART 1131--MILK IN THE ARIZONA MARKETING AREA


Sec.  1131.10  [Removed]

    93. Remove and reserve Sec.  1131.10.

    Proposed by American Independent Dairy Alliance.

Proposal No. 23

    This proposal would remove the producer-handler provision from all 
milk orders and establish a provision to exempt, from regulation, milk 
procured from a farm owned by a handler. Additionally, this proposal 
seeks to treat handlers with own-farm production as partially regulated 
distributing plants.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS


Sec.  1000.8  [Amended]

    94. Amend Sec.  1000.8 by:
    (1) Removing paragraph (b); and
    (2) Redesignating paragraphs (c), (d) and (e) as (b), (c) and (d).
    95. Amend Sec.  1000.76 by adding paragraph (e) to read as follows:


Sec.  1000.76  Payments by a handler operating a partially regulated 
distributing plant.

* * * * *
    (e) Any handler may elect partially regulated distributing plant 
status for any pool plant with respect to receipts of milk from a dairy 
farm owned and operated by the handler (hereinafter ``own farm 
production''), subject to the following conditions:
    (1) The handler provides proof satisfactory to the market 
administrator that the care and management of the dairy animals and 
other resources necessary to produce own farm milk, and the processing 
and packaging operations, are the plant operator's own enterprise and 
at its own risk;
    (2) Packaged fluid milk products distributed from the plant are not 
sold or marketed below the handler's costs, provided:
    (i) Handler's costs shall be Class I prices plus costs of 
manufacturing, processing, handling, marketing and delivery,
    (ii) The Deputy Administrator, Dairy Programs, may issue rules and 
procedures for determining handler's costs, or to evaluate any 
complaint by any person that a handler subject to this paragraph (e) is 
marketing packaged fluid milk products below cost.
    (3) The volume of own farm production of milk (or of milk 
components in own farm production) shall be deemed to be received and 
paid for by the handler at a price equal to the distributing plant's 
value of milk computed pursuant to paragraph (b)(1) of this section, 
and shall not be included in the volume of milk or milk components that 
are subject to payments to or from the producer settlement fund 
pursuant to Sec. Sec.  ----.71 or ----.72 of any order.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

    96. Revise Sec.  1001.10 to read as follows:


Sec.  1001.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:

[[Page 16307]]

    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph (b) 
of this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec.  ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

    97. Revise Sec.  1005.10 to read as follows:


Sec.  1005.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph (b) 
of this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec.  ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1006--MILK IN THE FLORIDA MARKETING AREA

    98. Revise Sec.  1006.10 to read as follows:


Sec.  1006.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph (b) 
of this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec.  ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

    99. Revise Sec.  1007.10 to read as follows:


Sec.  1007.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph (b) 
of this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec.  ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    100. Revise Sec.  1030.10 to read as follows:


Sec.  1030.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph (b) 
of this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec. ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    101. Revise Sec.  1032.10 to read as follows:


Sec.  1032.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals

[[Page 16308]]

and other resources necessary to produce the volume of milk processed 
under paragraph (b) of this section and the processing and packaging 
operations are the operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec.  ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    102. Revise Sec.  1033.10 to read as follows:


Sec.  1033.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph (b) 
of this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec. ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

    103. Revise Sec.  1124.10 to read as follows:


Sec.  1124.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph (b) 
of this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec. ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

    104. Revise Sec.  1126.10 to read as follows:


Sec.  1126.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph (b) 
of this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec. ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

PART 1131--MILK IN THE ARIZONA MARKETING AREA

    105. Revise Sec.  1131.10 to read as follows:


Sec.  1131.10  Exemption for own-farm production of handlers.

    Any operator of a pool plant or partially regulated distributing 
plant:
    (a) From which there is route disposition in the marketing area 
during the month; and
    (b) That receives fluid milk from the own-farm production of a farm 
under the ownership and control of the operator; and
    (c) Who provides proof satisfactory to the market administrator 
that the care and management of the dairy animals and other resources 
necessary to produce the volume of milk processed under paragraph(b) of 
this section and the processing and packaging operations are the 
operator's own enterprise and at its own risk;
    (d) Shall have such the volumes of own-farm production treated as 
exempt volumes for the purposes of calculating any obligation of the 
handler under Sec. Sec. ----.71 and ----.72 of the order. For handlers 
also purchasing producer milk for use at its plant, the market 
administrator shall down-allocate the volumes of own-farm produced milk 
to the plant's lowest value use before calculating the plant's value of 
milk and any obligations to the producer-settlement fund.

Proposal No. 24

    This proposal would exempt from regulation milk sold by producer-
handlers through ``handler controlled retail channels'' including home-
delivery and handler controlled retail outlets, regardless of volume of 
sales.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

    106. Amend Sec.  1001.10 by adding a new paragraph (g) to read as 
follows:


Sec.  1001.10  Producer-handler.

* * * * *
    (g) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1001.71 and Sec.  1001.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct

[[Page 16309]]

to consumers, through home delivery, or to distribution outlets owned 
or controlled by the producer-handler.
* * * * *

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

    107. Amend Sec.  1005.10 by adding a new paragraph (f) to read as 
follows:


Sec.  1005.10  Producer-handler.

* * * * *
    (f) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1005.71 and Sec.  1005.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or to distribution outlets owned or controlled 
by the producer-handler.

PART 1006--MILK IN THE FLORIDA MARKETING AREA

    108. Amend Sec.  1006.10 by adding a new paragraph (f) to read as 
follows:


Sec.  1006.10  Producer-handler.

* * * * *
    (f) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1006.71 and Sec.  1006.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or to distribution outlets owned or controlled 
by the producer-handler.

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

    109. Amend Sec.  1007.10 by adding a new paragraph (f) to read as 
follows:


Sec.  1007.10  Producer-handler.

* * * * *
    (f) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1007.71 and Sec.  1007.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or to distribution outlets owned or controlled 
by the producer-handler.
* * * * *

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    110. Amend Sec.  1030.10 by adding a new paragraph (g) to read as 
follows:


Sec.  1030.10  Producer-handler.

* * * * *
    (g) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1030.71 and Sec.  1030.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or to distribution outlets owned or controlled 
by the producer-handler.

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    111. Amend Sec.  1032.10 by adding a new paragraph (g) to read as 
follows:


Sec.  1032.10  Producer-handler.

* * * * *
    (g) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1032.71 and Sec.  1032.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or to distribution outlets owned or controlled 
by the producer-handler.

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    112. Amend Sec.  1033.10 by adding a new paragraph (g) to read as 
follows:


Sec.  1033.10  Producer-handler.

* * * * *
    (g) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1033.71 and Sec.  1033.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or to distribution outlets owned or controlled 
by the producer-handler.

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

    113. Amend 1124.10 by adding a new paragraph (g) to read as 
follows:


Sec.  1124.10  Producer-handler.

* * * * *
    (g) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1124.71 and Sec.  1124.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or to distribution outlets owned or controlled 
by the producer-handler.

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

    114. Amend Sec.  1126.10 by adding a new paragraph (g) to read as 
follows:


Sec.  1126.10  Producer-handler.

* * * * *
    (g) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1126.71 and Sec.  1126.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or

[[Page 16310]]

to distribution outlets owned or controlled by the producer-handler.

PART 1131--MILK IN THE ARIZONA MARKETING AREA

    115. Amend Sec.  1131.10 by adding a new paragraph (g) to read as 
follows:


Sec.  1131.10  Producer-handler.

* * * * *
    (g) Any producer-handler with route disposition through retail 
channels, either by sales direct to consumers, through home delivery, 
or to distribution outlets owned or controlled by the producer-handler, 
shall have such retail sales volumes treated as exempt volumes for the 
purposes of calculating any obligation of the producer-handler under 
Sec.  1131.71 and Sec.  1131.72. The producer-handler shall provide 
proof satisfactory to the market administrator that the retail 
dispositions are made by the producer-handler direct to consumers, 
through home delivery, or to distribution outlets owned or controlled 
by the producer-handler.

Proposal No. 25

    This proposal would establish ``individual handler'' pools for all 
handlers across all orders.

PART 1001--MILK IN THE NORTHEAST MARKETING AREA

    116. Amend Sec.  1001.61 by revising the introductory text and 
paragraphs (a) and (b) to read as follows:


Sec.  1001.61  Computation of producer price differential.

    For each month, the market administrator shall compute a producer 
price differential per hundredweight for each handler required to file 
a report prescribed by Sec.  1001.30 and for the order in aggregate.
    (a) Subject to the conditions in this paragraph, the market 
administrator shall compute the producer price differential for the 
order in aggregate in the following manner:
    (1) Combine into one total the values computed pursuant to Sec.  
1001.60 for all handlers required to file reports prescribed in Sec.  
1001.30;
    (2) Subtract the total of the values obtained by multiplying each 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1001.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (3) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1001.75;
    (4) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total hundredweight of producer milk; and
    (ii) The total hundredweight for which a value is computed pursuant 
to Sec.  1001.60(h); and
    (6) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (e) of this section. The result, 
rounded to the nearest cent, shall be known as the orders' producer 
price differential for the month and shall be calculated for purposes 
of statistical comparison.
    (b) For each handler required to file a report prescribed by Sec.  
1001.30, the market administrator shall calculate the handler's 
producer price differential in the following manner:
    (1) Subtract the total of the values obtained by multiplying the 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1001.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (2) Add or subtract an amount equal to the location adjustments 
computed pursuant to Sec.  1001.75;
    (3) Divide the resulting amount by the handler's total 
hundredweight of producer milk; and
    (4) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (b)(3) of this section. The 
result, rounded to the nearest cent, shall be known as the handler's 
producer price differential for the month and shall be utilized for 
determining the pay prices for producers and cooperative associations 
shipping to that handler.
* * * * *
    117. Revise Sec.  1001.62 to read as follows:


Sec.  1001.62  Announcement of producer prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1001.70, 1001.71 and 1001.72  [Removed]

    118. Remove and reserve Sec. Sec.  1001.70, 1001.71 and 1001.72.
    119. Amend Sec.  1001.73 by:
    a. Revising paragraph (a)(2)(i);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph(c).
    The revisions read as follows:


Sec.  1001.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer milk received by the 
handler's producer price differential for the month as adjusted 
pursuant to Sec.  1001.75;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator to the producer-settlement fund, and in the 
event that the handler subsequently locates and pays the producer or a 
lawful claimant, or in the event that the handler no longer exists and 
a lawful claim is later established, the market administrator shall 
make the required payment from the producer-settlement fund to the 
handler or to the lawful claimant as the case may be.
* * * * *

PART 1005--MILK IN THE APPALACHIAN MARKETING AREA

    120. Revise Sec.  1005.61 to read as follows:


Sec.  1005.61  Computation of uniform prices.

    On or before the 11th day of each month, the market administrator 
shall compute a uniform butterfat price, a uniform skim milk price, and 
a uniform price for producer milk receipts reported for the prior month 
for each handler required to file a report prescribed by Sec.  1005.30 
and for the order in aggregate.

[[Page 16311]]

    (a) Uniform butterfat price. The uniform butterfat price per pound, 
rounded to the nearest one-hundredth cent, shall be computed by:
    (1) Multiplying the pounds of butterfat in producer milk allocated 
to each class pursuant to Sec.  1000.44(b) by the respective class 
butterfat prices;
    (2) Adding the butterfat value calculated in Sec.  1005.60(e) for 
other source milk allocated to Class I pursuant to Sec.  1000.43(d) and 
the steps of Sec.  1000.44(b) that correspond to Sec.  1000.44(a)(3)(i) 
and Sec.  1000.44(a)(8) by the Class I price; and
    (3) Dividing the sum of paragraphs (a)(1) and (a)(2) of this 
section by the sum of the pounds of butterfat in producer milk and 
other source milk used to calculate the values in paragraphs (a)(1) and 
(a)(2) of this section.
    (b) Uniform skim milk price. The uniform skim milk price per 
hundredweight, rounded to the nearest cent, shall be computed as 
follows:
    (1) Combine into one total the values computed pursuant to Sec.  
1005.60 for all handlers;
    (2) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1005.75;
    (3) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (4) Subtract the value of the total pounds of butterfat for all 
handlers. The butterfat value shall be computed by multiplying the sum 
of the pounds of butterfat in producer milk and other source milk used 
to calculate the values in paragraphs (a)(1) and (a)(2) of this section 
by the butterfat price computed in paragraph (a) of this section;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total skim pounds of producer milk; and
    (ii) The total skim pounds for which a value is computed pursuant 
to Sec.  1005.60(e); and
    (6) Subtract not less than 4 cents and not more than 5 cents.
    (c) Uniform price. The uniform price per hundredweight, rounded to 
the nearest cent, shall be the sum of the following:
    (1) Multiply the uniform butterfat price for the month pursuant to 
paragraph (a) of this section times 3.5 pounds of butterfat; and
    (2) Multiply the uniform skim milk price for the month pursuant to 
paragraph (b) of this section times 96.5 pounds of skim milk.
    (d) Handler's uniform butterfat price. The uniform butterfat price 
per pound, rounded to the nearest one-hundredth cent, shall be computed 
by:
    (1) Multiplying the pounds of butterfat in producer milk allocated 
to each class pursuant to Sec.  1000.44(b) by the respective class 
butterfat prices;
    (2) Adding the butterfat value calculated in Sec.  1005.60(e) for 
other source milk allocated to Class I pursuant to Sec.  1000.43(d) and 
the steps of Sec.  1000.44(b) that correspond to Sec.  1000.44(a)(3)(i) 
and Sec.  1000.44(a)(8) by the Class I price; and
    (3) Dividing the sum of paragraphs (a)(1) and (a)(2) of this 
section by the sum of the pounds of butterfat in producer milk and 
other source milk reported by the handler used to calculate the values 
in paragraphs (a)(1) and (a)(2) of this section.
    (e) Handler's uniform skim milk price. The uniform skim milk price 
per hundredweight, rounded to the nearest cent, shall be computed as 
follows:
    (1) Begin with the handler's values computed pursuant to Sec.  
1005.60;
    (2) Add or subtract an amount equal to location adjustments 
computed pursuant to Sec.  1005.75;
    (3) Subtract the value of the total pounds of butterfat for the 
handler. The butterfat value shall be computed by multiplying the sum 
of the pounds of butterfat in producer milk and other source milk used 
to calculate the values in paragraphs (d)(1) and (d)(2) of this section 
by the butterfat price computed in paragraph (a) of this section;
    (4) Divide the resulting amount by the sum of the following for the 
handler:
    (i) The total skim pounds of producer milk; and
    (ii) The total skim pounds for which a value is computed pursuant 
to Sec.  1005.60(e); and
    (5) Subtract not less than 4 cents and not more than 5 cents.
    (f) Handler's uniform price. The handler's uniform price per 
hundredweight, rounded to the nearest cent, shall be the sum of the 
following:
    (1) Multiply the handler's uniform butterfat price for the month 
pursuant to paragraph (a) of this section times 3.5 pounds of 
butterfat; and
    (2) Multiply the handler's uniform skim milk price for the month 
pursuant to paragraph (b) of this section times 96.5 pounds of skim 
milk.
    121. Section 1005.62 is revised to read as follows:


Sec.  1005.62  Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1005.70, 1005.71 and 1005.72  [Removed]

    122. Remove and reserve Sec.  1005.70, Sec.  1005.71 and Sec.  
1005.72.
    123. Amend Sec.  1005.73 by:
    a. Revising paragraphs (a)(2)(i) and (ii);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph (c).
    The revisions read as follows:


Sec.  1005.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer skim milk received times 
the handler's uniform skim milk price for the month;
    (ii) Multiply the pounds of butterfat received times the handler's 
uniform butterfat price for the month;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator, and in the event that the handler 
subsequently locates and pays the producer or a lawful claimant, or in 
the event that the handler no longer exists and a lawful claim is later 
established, the market administrator shall make the required payment 
to the handler or to the lawful claimant as the case may be.
* * * * *

PART 1006--MILK IN THE FLORIDA MARKETING AREA

    124. Section 1006.61 is revised to read as follows:

[[Page 16312]]

Sec.  1006.61  Computation of uniform prices.

    On or before the 11th day of each month, the market administrator 
shall compute a uniform butterfat price, a uniform skim milk price, and 
a uniform price for producer milk receipts reported for the prior month 
for each handler required to file a report prescribed by Sec.  1005.30 
and for the order in aggregate.
    (a) Uniform butterfat price. The uniform butterfat price per pound, 
rounded to the nearest one-hundredth cent, shall be computed by:
    (1) Multiplying the pounds of butterfat in producer milk allocated 
to each class pursuant to Sec.  1000.44(b) by the respective class 
butterfat prices;
    (2) Adding the butterfat value calculated in Sec.  1005.60(e) for 
other source milk allocated to Class I pursuant to Sec.  1000.43(d) and 
the steps of Sec.  1000.44(b) that correspond to Sec.  1000.44(a)(3)(i) 
and Sec.  1000.44(a)(8) by the Class I price; and
    (3) Dividing the sum of paragraphs (a)(1) and (a)(2) of this 
section by the sum of the pounds of butterfat in producer milk and 
other source milk used to calculate the values in paragraphs (a)(1) and 
(a)(2) of this section.
    (b) Uniform skim milk price. The uniform skim milk price per 
hundredweight, rounded to the nearest cent, shall be computed as 
follows:
    (1) Combine into one total the values computed pursuant to Sec.  
1005.60 for all handlers;
    (2) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1005.75;
    (3) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (4) Subtract the value of the total pounds of butterfat for all 
handlers. The butterfat value shall be computed by multiplying the sum 
of the pounds of butterfat in producer milk and other source milk used 
to calculate the values in paragraphs (a)(1) and (a)(2) of this section 
by the butterfat price computed in paragraph (a) of this section;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total skim pounds of producer milk; and
    (ii) The total skim pounds for which a value is computed pursuant 
to Sec.  1005.60(e); and
    (6) Subtract not less than 4 cents and not more than 5 cents.
    (c) Uniform price. The uniform price per hundredweight, rounded to 
the nearest cent, shall be the sum of the following:
    (1) Multiply the uniform butterfat price for the month pursuant to 
paragraph (a) of this section times 3.5 pounds of butterfat; and
    (2) Multiply the uniform skim milk price for the month pursuant to 
paragraph (b) of this section times 96.5 pounds of skim milk.
    (d) Handler's uniform butterfat price. The uniform butterfat price 
per pound, rounded to the nearest one-hundredth cent, shall be computed 
by:
    (1) Multiplying the pounds of butterfat in producer milk allocated 
to each class pursuant to Sec.  1000.44(b) by the respective class 
butterfat prices;
    (2) Adding the butterfat value calculated in Sec.  1005.60(e) for 
other source milk allocated to Class I pursuant to Sec.  1000.43(d) and 
the steps of Sec.  1000.44(b) that correspond to Sec.  1000.44(a)(3)(i) 
and Sec.  1000.44(a)(8) by the Class I price; and
    (3) Dividing the sum of paragraphs (a)(1) and (a)(2) of this 
section by the sum of the pounds of butterfat in producer milk and 
other source milk reported by the handler used to calculate the values 
in paragraphs (a)(1) and (a)(2) of this section.
    (e) Handler's uniform skim milk price. The uniform skim milk price 
per hundredweight, rounded to the nearest cent, shall be computed as 
follows:
    (1) Begin with the handler's values computed pursuant to Sec.  
1005.60;
    (2) Add or subtract an amount equal to location adjustments 
computed pursuant to Sec.  1005.75;
    (3) Subtract the value of the total pounds of butterfat for the 
handler. The butterfat value shall be computed by multiplying the sum 
of the pounds of butterfat in producer milk and other source milk used 
to calculate the values in paragraphs (d)(1) and (d)(2) of this section 
by the butterfat price computed in paragraph (a) of this section;
    (4) Divide the resulting amount by the sum of the following for the 
handler:
    (i) The total skim pounds of producer milk; and
    (ii) The total skim pounds for which a value is computed pursuant 
to Sec.  1005.60(e); and
    (5) Subtract not less than 4 cents and not more than 5 cents.
    (f) Handler's uniform price. The handler's uniform price per 
hundredweight, rounded to the nearest cent, shall be the sum of the 
following:
    (1) Multiply the handler's uniform butterfat price for the month 
pursuant to paragraph (a) of this section times 3.5 pounds of 
butterfat; and
    (2) Multiply the handler's uniform skim milk price for the month 
pursuant to paragraph
    (b) of this section times 96.5 pounds of skim milk.
    125. Section 1006.62 is revised to read as follows:


Sec.  1006.62   Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1006.70, 1006.71 and 1006.72  [Removed]

    126. Remove and reserve Sec. Sec.  1006.70, 1006.71 and 1006.72.
    127. Amend Sec.  1006.73 by:
    a. Revising paragraphs (a)(2)(i) and (ii);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph (c).
    The revisions read as follows:


Sec.  1006.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer skim milk received times 
the handler's uniform skim milk price for the month;
    (ii) Multiply the pounds of butterfat received times the handler's 
uniform butterfat price for the month;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator, and in the event that the handler 
subsequently locates and pays the producer or a

[[Page 16313]]

lawful claimant, or in the event that the handler no longer exists and 
a lawful claim is later established, the market administrator shall 
make the required payment to the handler or to the lawful claimant as 
the case may be.
* * * * *

PART 1007--MILK IN THE SOUTHEAST MARKETING AREA

    128. Revise Sec.  1007.61 to read as follows:


Sec.  1007.61  Computation of uniform prices.

    On or before the 11th day of each month, the market administrator 
shall compute a uniform butterfat price, a uniform skim milk price, and 
a uniform price for producer milk receipts reported for the prior month 
for each handler required to file a report prescribed by Sec.  1005.30 
and for the order in aggregate.
    (a) Uniform butterfat price. The uniform butterfat price per pound, 
rounded to the nearest one-hundredth cent, shall be computed by:
    (1) Multiplying the pounds of butterfat in producer milk allocated 
to each class pursuant to Sec.  1000.44(b) by the respective class 
butterfat prices;
    (2) Adding the butterfat value calculated in Sec.  1005.60(e) for 
other source milk allocated to Class I pursuant to Sec.  1000.43(d) and 
the steps of Sec.  1000.44(b) that correspond to Sec.  1000.44(a)(3)(i) 
and Sec.  1000.44(a)(8) by the Class I price; and
    (3) Dividing the sum of paragraphs (a)(1) and (a)(2) of this 
section by the sum of the pounds of butterfat in producer milk and 
other source milk used to calculate the values in paragraphs (a)(1) and 
(a)(2) of this section.
    (b) Uniform skim milk price. The uniform skim milk price per 
hundredweight, rounded to the nearest cent, shall be computed as 
follows:
    (1) Combine into one total the values computed pursuant to Sec.  
1005.60 for all handlers;
    (2) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1005.75;
    (3) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (4) Subtract the value of the total pounds of butterfat for all 
handlers. The butterfat value shall be computed by multiplying the sum 
of the pounds of butterfat in producer milk and other source milk used 
to calculate the values in paragraphs (a)(1) and (a)(2) of this section 
by the butterfat price computed in paragraph (a) of this section;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total skim pounds of producer milk; and
    (ii) The total skim pounds for which a value is computed pursuant 
to Sec.  1005.60(e); and
    (6) Subtract not less than 4 cents and not more than 5 cents.
    (c) Uniform price. The uniform price per hundredweight, rounded to 
the nearest cent, shall be the sum of the following:
    (1) Multiply the uniform butterfat price for the month pursuant to 
paragraph (a) of this section times 3.5 pounds of butterfat; and
    (2) Multiply the uniform skim milk price for the month pursuant to 
paragraph (b) of this section times 96.5 pounds of skim milk.
    (d) Handler's uniform butterfat price. The uniform butterfat price 
per pound, rounded to the nearest one-hundredth cent, shall be computed 
by:
    (1) Multiplying the pounds of butterfat in producer milk allocated 
to each class pursuant to Sec.  1000.44(b) by the respective class 
butterfat prices;
    (2) Adding the butterfat value calculated in Sec.  1005.60(e) for 
other source milk allocated to Class I pursuant to Sec.  1000.43(d) and 
the steps of Sec.  1000.44(b) that correspond to Sec.  1000.44(a)(3)(i) 
and Sec.  1000.44(a)(8) by the Class I price; and
    (3) Dividing the sum of paragraphs (a)(1) and (a)(2) of this 
section by the sum of the pounds of butterfat in producer milk and 
other source milk reported by the handler used to calculate the values 
in paragraphs (a)(1) and (a)(2) of this section.
    (e) Handler's uniform skim milk price. The uniform skim milk price 
per hundredweight, rounded to the nearest cent, shall be computed as 
follows:
    (1) Begin with the handler's values computed pursuant to Sec.  
1005.60;
    (2) Add or subtract an amount equal to location adjustments 
computed pursuant to Sec.  1005.75;
    (3) Subtract the value of the total pounds of butterfat for the 
handler. The butterfat value shall be computed by multiplying the sum 
of the pounds of butterfat in producer milk and other source milk used 
to calculate the values in paragraphs (d)(1) and (d)(2) of this section 
by the butterfat price computed in paragraph (a) of this section;
    (4) Divide the resulting amount by the sum of the following for the 
handler:
    (i) The total skim pounds of producer milk; and
    (ii) The total skim pounds for which a value is computed pursuant 
to Sec.  1005.60(e); and
    (5) Subtract not less than 4 cents and not more than 5 cents.
    (f) Handler's uniform price. The handler's uniform price per 
hundredweight, rounded to the nearest cent, shall be the sum of the 
following:
    (1) Multiply the handler's uniform butterfat price for the month 
pursuant to paragraph (a) of this section times 3.5 pounds of 
butterfat; and
    (2) Multiply the handler's uniform skim milk price for the month 
pursuant to paragraph (b) of this section times 96.5 pounds of skim 
milk.
    129. Revise Sec.  1007.62 to read as follows:


Sec.  1007.62   Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1007.70, 1007.71 and 1007.72   [Removed]

    130. Remove and reserve Sec.  1007.70, Sec.  1007.71 and Sec.  
1007.72.
    131. Amend Sec.  1007.73 by:
    a. Revising paragraphs (a)(2)(i) and (ii);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph (c).
    The revisions read as follows:


Sec.  1007.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer skim milk received times 
the handler's uniform skim milk price for the month;
    (ii) Multiply the pounds of butterfat received times the handler's 
uniform butterfat price for the month;
* * * * *

[[Page 16314]]

    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator, and in the event that the handler 
subsequently locates and pays the producer or a lawful claimant, or in 
the event that the handler no longer exists and a lawful claim is later 
established, the market administrator shall make the required payment 
to the handler or to the lawful claimant as the case may be.
* * * * *

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    132. Section 1030.61 is revised to read as follows:


Sec.  1030.61   Computation of producer price differential.

    For each month, the market administrator shall compute a producer 
price differential per hundredweight for each handler required to file 
a report prescribed by Sec.  1001.30 and for the order in aggregate.
    (a) Subject to the conditions in this paragraph, the market 
administrator shall compute the producer price differential for the 
order in aggregate in the following manner:
    (1) Combine into one total the values computed pursuant to Sec.  
1030.60 for all handlers required to file reports prescribed in Sec.  
1030.30;
    (2) Subtract the total of the values obtained by multiplying each 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1030.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (3) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1030.75;
    (4) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (a) The total hundredweight of producer milk; and
    (b) The total hundredweight for which a value is computed pursuant 
to Sec.  1030.60(h); and
    (6) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (e) of this section. The result, 
rounded to the nearest cent, shall be known as the orders' producer 
price differential for the month and shall be calculated for purposes 
of statistical comparison.
    (b) For each handler required to file a report prescribed by Sec.  
1030.30, the market administrator shall calculate the handler's 
producer price differential in the following manner:
    (1) Subtract the total of the values obtained by multiplying the 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1030.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (2) Add or subtract an amount equal to the location adjustments 
computed pursuant to Sec.  1030.75;
    (3) Divide the resulting amount by the handler's total 
hundredweight of producer milk; and
    (4) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (b)(3) of this section. The 
result, rounded to the nearest cent, shall be known as the handler's 
producer price differential for the month and shall be utilized for 
determining the pay prices for producers and cooperative associations 
shipping to that handler.
    133. Section 1030.62 is revised to read as follows:


Sec.  1030.62  Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1030.70, 1030.71 and 1030.72  [Removed]

    134. Remove and reserve Sec. Sec.  1030.70, 1030.71 and 1030.72.
    135. Amend Sec.  1030.73 by:
    a. Revising paragraph (a)(2)(i);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph (c).
    The revisions read as follows:


Sec.  1030.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer milk received by the 
handler's producer price differential for the month as adjusted 
pursuant to Sec.  1001.75;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator to the producer-settlement fund, and in the 
event that the handler subsequently locates and pays the producer or a 
lawful claimant, or in the event that the handler no longer exists and 
a lawful claim is later established, the market administrator shall 
make the required payment from the producer-settlement fund to the 
handler or to the lawful claimant as the case may be.
* * * * *

PART 1032--MILK IN THE CENTRAL MARKETING AREA

    136. Amend Sec.  1032.61 by revising the introductory text and 
paragraphs (a) and (b) to read as follows:


Sec.  1032.61  Computation of producer price differential.

    For each month, the market administrator shall compute a producer 
price differential per hundredweight for each handler required to file 
a report prescribed by Sec.  1032.30 and for the order in aggregate.
    (a) Subject to the conditions in this paragraph, the market 
administrator shall compute the producer price differential for the 
order in aggregate in the following manner:
    (1) Combine into one total the values computed pursuant to Sec.  
1032.60 for all handlers required to file reports prescribed in Sec.  
1032.30;
    (2) Subtract the total of the values obtained by multiplying each 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1032.60 by the protein price, other solids price, and the 
butterfat price, respectively;

[[Page 16315]]

    (3) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1032.75;
    (4) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total hundredweight of producer milk; and
    (ii) The total hundredweight for which a value is computed pursuant 
to Sec.  1032.60(h); and
    (6) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (e) of this section. The result, 
rounded to the nearest cent, shall be known as the orders' producer 
price differential for the month and shall be calculated for purposes 
of statistical comparison.
    (b) For each handler required to file a report prescribed by Sec.  
1032.30, the market administrator shall calculate the handler's 
producer price differential in the following manner:
    (1) Subtract the total of the values obtained by multiplying the 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1032.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (2) Add or subtract an amount equal to the location adjustments 
computed pursuant to Sec.  1032.75;
    (3) Divide the resulting amount by the handler's total 
hundredweight of producer milk; and
    (4) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (b)(3) of this section. The 
result, rounded to the nearest cent, shall be known as the handler's 
producer price differential for the month and shall be utilized for 
determining the pay prices for producers and cooperative associations 
shipping to that handler.
* * * * *
    137. Section 1032.62 is revised to read as follows:


Sec.  1032.62  Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1032.70, 1032.71 and 1032.72  [Removed]

    138. Remove and reserve Sec. Sec.  1032.70, 1032.71 and 1032.72.
    139. Revise Sec.  1032.73 by:
    a. Revising paragraph (a)(2)(i);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph(c).
    The revisions read as follows:


Sec.  1032.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer milk received by the 
handler's producer price differential for the month as adjusted 
pursuant to Sec.  1032.75;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator to the producer-settlement fund, and in the 
event that the handler subsequently locates and pays the producer or a 
lawful claimant, or in the event that the handler no longer exists and 
a lawful claim is later established, the market administrator shall 
make the required payment from the producer-settlement fund to the 
handler or to the lawful claimant as the case may be.
* * * * *

PART 1033--MILK IN THE MIDEAST MARKETING AREA

    140. Amend Sec.  1032.61 by revising the introductory text and 
paragraphs (a) and (b) to read as follows:


Sec.  1033.61  Computation of producer price differential.

    For each month, the market administrator shall compute a producer 
price differential per hundredweight for each handler required to file 
a report prescribed by Sec.  1033.30 and for the order in aggregate.
    (a) Subject to the conditions in this paragraph, the market 
administrator shall compute the producer price differential for the 
order in aggregate in the following manner:
    (1) Combine into one total the values computed pursuant to Sec.  
1033.60 for all handlers required to file reports prescribed in Sec.  
1033.30;
    (2) Subtract the total of the values obtained by multiplying each 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1033.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (3) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1033.75;
    (4) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total hundredweight of producer milk; and
    (ii) The total hundredweight for which a value is computed pursuant 
to Sec.  1033.60(h); and
    (6) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (e) of this section. The result, 
rounded to the nearest cent, shall be known as the orders' producer 
price differential for the month and shall be calculated for purposes 
of statistical comparison.
    (b) For each handler required to file a report prescribed by Sec.  
1033.30, the market administrator shall calculate the handler's 
producer price differential in the following manner:
    (1) Subtract the total of the values obtained by multiplying the 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1033.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (2) Add or subtract an amount equal to the location adjustments 
computed pursuant to Sec.  1033.75;
    (3) Divide the resulting amount by the handler's total 
hundredweight of producer milk; and
    (4) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (b)(3) of this section. The 
result, rounded to the nearest cent, shall be known as the

[[Page 16316]]

handler's producer price differential for the month and shall be 
utilized for determining the pay prices for producers and cooperative 
associations shipping to that handler.
* * * * *
    141. Sec.  1033.62 is revised to read as follows:


Sec.  1033.62  Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1033.70, 1033.71 and 1033.72  [Removed]

    142. Remove and reserve Sec. Sec.  1033.70, 1033.71 and 1033.72.
    143. Amend Sec.  1033.73 by:
    a. Revising paragraph (a)(2)(i);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph (c).
    The revisons read as follows:


Sec.  1033.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer milk received by the 
handler's producer price differential for the month as adjusted 
pursuant to Sec.  1001.75;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator to the producer-settlement fund, and in the 
event that the handler subsequently locates and pays the producer or a 
lawful claimant, or in the event that the handler no longer exists and 
a lawful claim is later established, the market administrator shall 
make the required payment from the producer-settlement fund to the 
handler or to the lawful claimant as the case may be.
* * * * *

PART 1124--MILK IN THE PACIFIC NORTHWEST MARKETING AREA

    144. Amend Sec.  1124.61 by revising introductory text and 
paragraphs (a) and (b) to read as follows:


Sec.  1124.61  Computation of producer price differential.

    For each month, the market administrator shall compute a producer 
price differential per hundredweight for each handler required to file 
a report prescribed by Sec.  1124.30 and for the order in aggregate.
    (a) Subject to the conditions in this paragraph, the market 
administrator shall compute the producer price differential for the 
order in aggregate in the following manner:
    (1) Combine into one total the values computed pursuant to Sec.  
1124.60 for all handlers required to file reports prescribed in Sec.  
1124.30;
    (2) Subtract the total of the values obtained by multiplying each 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1124.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (3) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1124.75;
    (4) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total hundredweight of producer milk; and
    (ii) The total hundredweight for which a value is computed pursuant 
to Sec.  1124.60(h); and
    (6) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (e) of this section. The result, 
rounded to the nearest cent, shall be known as the orders' producer 
price differential for the month and shall be calculated for purposes 
of statistical comparison.
    (b) For each handler required to file a report prescribed by Sec.  
1124.30, the market administrator shall calculate the handler's 
producer price differential in the following manner:
    (1) Subtract the total of the values obtained by multiplying the 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1124.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (2) Add or subtract an amount equal to the location adjustments 
computed pursuant to Sec.  1124.75;
    (3) Divide the resulting amount by the handler's total 
hundredweight of producer milk; and
    (4) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (b)(3) of this section. The 
result, rounded to the nearest cent, shall be known as the handler's 
producer price differential for the month and shall be utilized for 
determining the pay prices for producers and cooperative associations 
shipping to that handler.
* * * * *
    145. Section 1124.62 is revised to read as follows:


Sec.  1124.62  Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1124.70, 1124.71 and 1124.72  [Removed]

    146. Remove and reserve Sec. Sec.  1124.70, 1124.71 and 1124.72.
    147. Amend Sec.  1124.73 by:
    a. Revising paragraph (a)(2)(i);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph(c).

[[Page 16317]]

    The revisions read as follows:


Sec.  1124.73   Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer milk received by the 
handler's producer price differential for the month as adjusted 
pursuant to Sec.  1001.75;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator to the producer-settlement fund, and in the 
event that the handler subsequently locates and pays the producer or a 
lawful claimant, or in the event that the handler no longer exists and 
a lawful claim is later established, the market administrator shall 
make the required payment from the producer-settlement fund to the 
handler or to the lawful claimant as the case may be.
* * * * *

PART 1126--MILK IN THE SOUTHWEST MARKETING AREA

    148. Amend Sec.  1126.61 by revising the introductory text and 
paragraphs (a) and (b) to read as follows:


Sec.  1126.61  Computation of producer price differential.

    For each month, the market administrator shall compute a producer 
price differential per hundredweight for each handler required to file 
a report prescribed by Sec.  1126.30 and for the order in aggregate.
    (a) Subject to the conditions in this paragraph, the market 
administrator shall compute the producer price differential for the 
order in aggregate in the following manner:
    (1) Combine into one total the values computed pursuant to Sec.  
1126.60 for all handlers required to file reports prescribed in Sec.  
1126.30;
    (2) Subtract the total of the values obtained by multiplying each 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1126.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (3) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1126.75;
    (4) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total hundredweight of producer milk; and
    (ii) The total hundredweight for which a value is computed pursuant 
to Sec.  1126.60(h); and
    (6) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (e) of this section. The result, 
rounded to the nearest cent, shall be known as the orders' producer 
price differential for the month and shall be calculated for purposes 
of statistical comparison.
    (b) For each handler required to file a report prescribed by Sec.  
1126.30, the market administrator shall calculate the handler's 
producer price differential in the following manner:
    (1) Subtract the total of the values obtained by multiplying the 
handler's total pounds of protein, other solids, and butterfat 
contained in the milk for which an obligation was computed pursuant to 
Sec.  1126.60 by the protein price, other solids price, and the 
butterfat price, respectively;
    (2) Add or subtract an amount equal to the location adjustments 
computed pursuant to Sec.  1126.75;
    (3) Divide the resulting amount by the handler's total 
hundredweight of producer milk; and
    (4) Subtract not less than 4 cents nor more than 5 cents from the 
price computed pursuant to paragraph (b)(3) of this section. The 
result, rounded to the nearest cent, shall be known as the handler's 
producer price differential for the month and shall be utilized for 
determining the pay prices for producers and cooperative associations 
shipping to that handler.
* * * * *
    149. Section 1126.62 is revised to read as follows:


Sec.  1126.62  Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1126.70, 1126.71 and 1126.72  [Removed]

    150. Remove and reserve Sec. Sec.  1126.70, 1126.71 and 1126.72.
    151. Amend Sec.  1126.73 by:
    a. Revising paragraph (a)(2)(i);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph (c).
    The revisions read as follows:


Sec.  1126.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer milk received by the 
handler's producer price differential for the month as adjusted 
pursuant to Sec.  1001.75;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator to the producer-settlement fund, and in the 
event that the handler subsequently locates and pays the producer or a 
lawful claimant, or in the event that the handler no longer exists and 
a lawful claim is later established, the market administrator shall 
make the required payment from the producer-settlement fund to the 
handler or to the lawful claimant as the case may be.
* * * * *

PART 1131--MILK IN THE ARIZONA MARKETING AREA

    152. Section 1131.61 is revised to read as follows:


Sec.  1131.61  Computation of uniform prices.

    On or before the 11th day of each month, the market administrator 
shall compute a uniform butterfat price, a uniform skim milk price, and 
a uniform price for producer milk receipts reported for the prior month 
for each handler required to file a report prescribed by Sec.  1005.30 
and for the order in aggregate.

[[Page 16318]]

    (a) Uniform butterfat price. The uniform butterfat price per pound, 
rounded to the nearest one-hundredth cent, shall be computed by:
    (1) Multiplying the pounds of butterfat in producer milk allocated 
to each class pursuant to Sec.  1000.44(b) by the respective class 
butterfat prices;
    (2) Adding the butterfat value calculated in Sec.  1005.60(e) for 
other source milk allocated to Class I pursuant to Sec.  1000.43(d) and 
the steps of Sec.  1000.44(b) that correspond to Sec.  1000.44(a)(3)(i) 
and Sec.  1000.44(a)(8) by the Class I price; and
    (3) Dividing the sum of paragraphs (a)(1) and (a)(2) of this 
section by the sum of the pounds of butterfat in producer milk and 
other source milk used to calculate the values in paragraphs (a)(1) and 
(a)(2) of this section.
    (b) Uniform skim milk price. The uniform skim milk price per 
hundredweight, rounded to the nearest cent, shall be computed as 
follows:
    (1) Combine into one total the values computed pursuant to Sec.  
1005.60 for all handlers;
    (2) Add an amount equal to the minus location adjustments and 
subtract an amount equal to the plus location adjustments computed 
pursuant to Sec.  1005.75;
    (3) Add an amount equal to not less than one-half of the 
unobligated balance in the producer-settlement fund;
    (4) Subtract the value of the total pounds of butterfat for all 
handlers. The butterfat value shall be computed by multiplying the sum 
of the pounds of butterfat in producer milk and other source milk used 
to calculate the values in paragraphs (a)(1) and (a)(2) of this section 
by the butterfat price computed in paragraph (a) of this section;
    (5) Divide the resulting amount by the sum of the following for all 
handlers included in these computations:
    (i) The total skim pounds of producer milk; and
    (ii) The total skim pounds for which a value is computed pursuant 
to Sec.  1005.60(e); and
    (6) Subtract not less than 4 cents and not more than 5 cents.
    (c) Uniform price. The uniform price per hundredweight, rounded to 
the nearest cent, shall be the sum of the following:
    (1) Multiply the uniform butterfat price for the month pursuant to 
paragraph (a) of this section times 3.5 pounds of butterfat; and
    (2) Multiply the uniform skim milk price for the month pursuant to 
paragraph (b) of this section times 96.5 pounds of skim milk.
    (d) Handler's uniform butterfat price. The uniform butterfat price 
per pound, rounded to the nearest one-hundredth cent, shall be computed 
by:
    (1) Multiplying the pounds of butterfat in producer milk allocated 
to each class pursuant to Sec.  1000.44(b) by the respective class 
butterfat prices;
    (2) Adding the butterfat value calculated in Sec.  1005.60(e) for 
other source milk allocated to Class I pursuant to Sec.  1000.43(d) and 
the steps of Sec.  1000.44(b) that correspond to Sec.  1000.44(a)(3)(i) 
and Sec.  1000.44(a)(8) by the Class I price; and
    (3) Dividing the sum of paragraphs (a)(1) and (a)(2) of this 
section by the sum of the pounds of butterfat in producer milk and 
other source milk reported by the handler used to calculate the values 
in paragraphs (a)(1) and (a)(2) of this section.
    (e) Handler's uniform skim milk price. The uniform skim milk price 
per hundredweight, rounded to the nearest cent, shall be computed as 
follows:
    (1) Begin with the handler's values computed pursuant to Sec.  
1005.60;
    (2) Add or subtract an amount equal to location adjustments 
computed pursuant to Sec.  1005.75;
    (3) Subtract the value of the total pounds of butterfat for the 
handler. The butterfat value shall be computed by multiplying the sum 
of the pounds of butterfat in producer milk and other source milk used 
to calculate the values in paragraphs (d)(1) and (d)(2) of this section 
by the butterfat price computed in paragraph (a) of this section;
    (4) Divide the resulting amount by the sum of the following for the 
handler:
    (i) The total skim pounds of producer milk; and
    (ii) The total skim pounds for which a value is computed pursuant 
to Sec.  1005.60(e); and
    (5) Subtract not less than 4 cents and not more than 5 cents.
    (f) Handler's uniform price. The handler's uniform price per 
hundredweight, rounded to the nearest cent, shall be the sum of the 
following:
    (1) Multiply the handler's uniform butterfat price for the month 
pursuant to paragraph (a) of this section times 3.5 pounds of 
butterfat; and
    (2) Multiply the handler's uniform skim milk price for the month 
pursuant to paragraph
    (b) of this section times 96.5 pounds of skim milk.
    153. Section 1131.62 is revised to read as follows:


Sec.  1131.62  Announcement of uniform prices.

    On or before the 14th day after the end of the month, the market 
administrator shall announce the following prices and information:
    (a) The producer price differentials for the order in aggregate and 
for each handler;
    (b) The protein price;
    (c) The nonfat solids price;
    (d) The other solids price;
    (e) The butterfat price;
    (f) The average butterfat, protein, nonfat solids, and other solids 
content of producer milk; and
    (g) The statistical uniform price for milk containing 3.5 percent 
butterfat computed by combining the Class III price and the producer 
price differential.
    (h) If the 14th falls on a Saturday, Sunday, or national holiday, 
the market administrator may have up to two additional business days to 
announce the producer price differentials and the statistical uniform 
price.


Sec. Sec.  1131.70, 1131.71 and 1131.72  [Removed]

    154. Remove and reserve Sec. Sec.  1131.70, 1131.71 and 1131.72.
    155. Amend Sec.  1131.73 by:
    a. Revising paragraphs (a)(2)(i) and (ii);
    b. Removing paragraph (c);
    c. Redesignating paragraphs (d) and (e) as (c) and (d); and
    d. Revising newly redesignated paragraph (c).
    The revisions read as follows:


Sec.  1131.73  Payments to producers and cooperative associations.

    (a) * * *
    (2) * * *
    (i) Multiply the hundredweight of producer skim milk received times 
the handler's uniform skim milk price for the month;
    (ii) Multiply the pounds of butterfat received times the handler's 
uniform butterfat price for the month;
* * * * *
    (c) If a handler claims that a required payment to a producer 
cannot be made because the producer is deceased or cannot be located, 
or because the cooperative association or its lawful successor or 
assignee is no longer in existence, the payment shall be made in trust 
to the market administrator, and in the event that the handler 
subsequently locates and pays the producer or a lawful claimant, or in 
the event that the handler no longer exists and a lawful claim is later 
established, the market administrator shall make the required payment 
to the handler or to the lawful claimant as the case may be.
* * * * *
    Proposed by National Milk Producers Federation.

[[Page 16319]]

Proposal No. 26

    This proposal seeks to allow current qualified producer-handlers an 
exemption from the pricing and pooling provisions of their respective 
order. Specifically, producer-handlers would be exempt from pricing and 
pooling provisions on the first 3,000,000 pounds of total route 
disposition and packaged sales of fluid milk products provided that the 
products distributed are uniquely branded.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    156. Amend Sec.  1000.8 by adding new paragraph (e)(5) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (e) * * *
    (5) A distributing plant that was operated during 2008 by a 
producer-handler in a Federal order market within the meaning of the 
Federal milk marketing order at that time, provided that the plant:
    (i) Has route disposition in all markets and packaged sales of 
fluid milk products to other plants in all markets that are uniquely 
branded and total 3,000,000 pounds or less during the month.
    (ii) Receives no fluid milk products, and acquires no fluid milk 
products for route disposition, from sources other than own-farm 
production;
    (iii) The plant disposes of no other source milk as Class I milk 
except by increasing the nonfat milk solids content of the fluid milk 
products received from own-farm production; and
    (iv) Provides proof satisfactory to the market administrator that 
the care and management of the dairy animals and other resources 
necessary to produce all Class I milk handled, and the processing and 
packaging operations, are the plant owner's own enterprise and are 
operated at the plant owner's own risk, and that the plant owner has no 
interest in any other distributing plant (except through membership in 
a Capper-Volstead cooperative association) or in any farms from which 
the plant does not receive milk. The burden rests upon the handler who 
is designated as exempt under this paragraph (e)(5) to establish 
through records required pursuant to Sec.  1000.27 that the 
requirements of such exemption are met.
    Proposed by New Hampshire Department of Agriculture, Markets and 
Food and Vermont Agency of Agriculture, Food and Markets.

Proposal No. 27

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of their respective 
orders if their Class I route disposition and sales of packaged fluid 
milk products exceeds 3,000,000 pounds of milk per month within the 
marketing area.

PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS

    157. Revise Sec.  1000.8(b) to read as follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (b) Producer-handler plant means a plant with route disposition and 
packaged sales of fluid milk products of 3,000,000 pounds of milk per 
month or less in the marketing area that is operated by a producer-
handler as defined under any Federal order.
* * * * *
    Proposed by Weber's Farm Store, Inc.

Proposal No. 28

    This proposal seeks to end the regulatory exemption of producer-
handlers from the pooling and pricing provisions of the Upper Midwest 
order if their Class I route disposition and sales of packaged fluid 
milk products exceeds 2,000,000 pounds of milk per month within the 
marketing area.

PART 1030--MILK IN THE UPPER MIDWEST MARKETING AREA

    158. Amend Sec.  1030.10 by revising paragraph (a) to read as 
follows:


Sec.  1000.8  Nonpool plant.

* * * * *
    (a) Operates a dairy farm and a distributing plant from which there 
is route disposition of 2,000,000 pounds of milk per month or less in 
the marketing area.
* * * * *
    Proposed by Dairy Programs, Agricultural Marketing Service.

Proposal No. 29

    For all Federal Milk Marketing Orders, make necessary changes to 
make the entire marketing agreements and the orders conform with any 
amendments thereto that may result from this hearing.
    Copies of this notice of hearing and the orders may be procured 
from the Market Administrator of each of the aforesaid marketing areas, 
Online at http://www.ams.usda.gov/dairy, or from the Hearing Clerk, 
United States Department of Agriculture, STOP 9200--Room 1031, 1400 
Independence Avenue, SW., Washington, DC 20250-9200, or may be 
inspected there.
    Copies of the transcript of testimony taken at the hearing will not 
be available for distribution through the Hearing Clerk's Office. If 
you wish to purchase a copy, arrangements may be made with the reporter 
at the hearing. Copies of the transcript are also available Online at 
http://www.ams.usda.gov/dairy.
    From the time that a hearing notice is issued and until the 
issuance of a final decision, USDA employees are prohibited from 
discussing the merits of the hearing issues on an ex parte basis with 
any person. For this particular proceeding, the prohibition applies to 
employees in the following organizational units:

Office of the Secretary of Agriculture;
Office of the Administrator, Agricultural Marketing Service;
Office of the General Counsel; and
Dairy Programs, Agricultural Marketing Service (Washington office) and 
the Offices of all Market Administrators.

    Procedural matters are not subject to the above prohibition and may 
be discussed at any time.

    Dated: April 3, 2009.
David R. Shipman,
Acting Administrator.
 [FR Doc. E9-7982 Filed 4-6-09; 4:15 pm]
BILLING CODE 3410-02-P


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