29436 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1007, 1093, 1094, 1096,

and 1108

[Docket Nos. AO–366–A36, et al.; DA–93–

21]

Milk in the Southeast Marketing Area;

Order Amending and Merging Orders

7 CFR part Marketing area Docket No.

1007 ......... Georgia ............ AO–366–A36

1093 ......... Alabama-West

Florida.

AO–386–A14

1094 ......... New OrleansMississippi.AO–103–A56

1096 ......... Greater Louisiana.AO–257–A43

1108 ......... Central Arkansas.AO–243–A46

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Final rule.

SUMMARY: This final rule combines five

Federal milk order marketing areas with

unregulated counties in Arkansas,

Georgia, Mississippi, and Tennessee to

form the Southeast marketing area. It is

based on industry proposals to merge

the individual marketing areas so as to

more equitably divide the markets’

proceeds in what essentially has become

a single, large market with significantly

overlapping sales and procurement

areas. More than two-thirds of the

affected dairy farmers participating in a

referendum voted in favor of the merged

order.

EFFECTIVE DATE: July 1, 1995.

FOR FURTHER INFORMATION CONTACT:

Nicholas Memoli, Marketing Specialist,

USDA/AMS/Dairy Division, Order

Formulation Branch, Room 2971, South

Building, PO Box 96456, Washington,

DC 20090–6456, (202) 690–1932.

SUPPLEMENTARY INFORMATION: This

administrative rule 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.

The Regulatory Flexibility Act (5

U.S.C. 601–612) requires the Agency to

examine the impact of a proposed rule

on small entities. Pursuant to 5 U.S.C.

605(b), the Administrator of the

Agricultural Marketing Service has

certified that this rule will not have a

significant economic impact on a

substantial number of small entities.

The amendments will promote orderly

marketing of milk by producers and

regulated handlers.

This final rule was reviewed under

Executive Order 12778, Civil Justice

Reform. This action is not intended to

have a retroactive effect and will not

preempt any state or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule.

The Agricultural Marketing

Agreement Act of 1937, as amended (7

U.S.C. 601–674), provides that

administrative proceedings must be

exhausted before parties may file suit in

court. Under section 608c(15)(A) of the

Act, any handler subject to an order may

file with the Secretary 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 and requesting

a modification of an order or to be

exempted from the order. A handler is

afforded the opportunity for a hearing

on the petition. After a hearing, the

Secretary 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, or

has its principal place of business, has

jurisdiction in equity to review the

Secretary’s ruling on the petition,

provided a bill in equity is filed not

later than 20 days after the entry of the

ruling.

Prior documents in this proceeding:

Notice of Hearing: Issued September

3, 1993; published September 10, 1993

(58 FR 47653).

Supplemental Notice of Hearing:

Issued October 13, 1993; published

October 15, 1993 (58 FR 53436).

Extension of Time for Filing Briefs:

Issued January 24, 1994; published

February 3, 1994 (59 FR 5132).

Recommended Decision: Issued

November 21, 1994; published

November 29, 1994 (59 FR 61070).

Extension of Time for Filing

Exceptions: Issued December 27, 1994;

published January 3, 1995 (60 FR 65).

Final Decision: Issued May 3, 1995;

published May 10, 1995 (60 FR 25014).

Findings and Determinations

The following findings and

determinations supplement those that

were made when the orders were first

issued and when they were amended.

The previous findings and

determinations are hereby ratified and

confirmed, except where they may

conflict with those set forth herein.

(a) Findings. A public hearing was

held upon certain proposed

amendments to the tentative marketing

agreements and to the orders regulating

the handling of milk in the aforesaid

marketing areas. The hearing was held

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 (7 CFR part 900).

Upon the basis of the evidence

introduced at such hearing and the

record thereof, it is found that:

(1) The Southeast order, which

amends and merges the aforesaid orders,

and all of the terms and conditions

thereof, will tend to effectuate the

declared policy of the Act;

(2) The parity prices of milk, as

determined pursuant to section 2 of the

Act, are not reasonable in view of the

price of feeds, available supplies of

feeds, and other economic conditions

which affect market supply and demand

for milk in the aforesaid marketing

areas. The minimum prices specified in

the order as hereby amended are such

prices as will reflect the aforesaid

factors, insure a sufficient quantity of

pure and wholesome milk, and be in the

public interest; and

(3) The Southeast order regulates the

handling of milk in the same manner as,

and is applicable only to persons in the

respective classes of industrial or

commercial activity specified in,

marketing agreements upon which a

hearing has been held;

(4) All milk and milk products

handled by handlers, as defined in the

Southeast order, are in the current of

interstate commerce or directly burden,

obstruct, or affect interstate commerce

in milk or its products; and

(5) It is hereby found that the

necessary expense of the market

administrator for the maintenance and

functioning of such agency will require

each handler to pay, as its pro rata share

of such expense, 5 cents per

hundredweight or such lesser amount as

the Secretary may prescribe, with

respect to milk specified in § 1007.85.

(b) Determinations. It is hereby

determined that:

(1) The refusal or failure of handlers

(excluding cooperative associations

specified in section 8c(9) of the Act) of

more than 50 percent of the milk

marketed within the Southeast

marketing area to sign a proposed

marketing agreement tends to prevent

the effectuation of the declared policy of

the Act;

(2) The issuance of this order is the

only practical means pursuant to the

declared policy of the Act of advancing

the interests of producers as defined in

the order; and

(3) The issuance of this order was

approved by at least two-thirds of the

producers who during the

representative period of March 1995

were engaged in the production of milk

for sale in the marketing area.
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29437

List of Subjects in 7 CFR Part 1007

Milk marketing orders.

Order Relative to Handling

It is therefore ordered that on and

after the effective date hereof, the

handling of milk in the Georgia,

Alabama-West Florida, New OrleansMississippi, Greater Louisiana, and

Central Arkansas marketing areas (parts

1007, 1093, 1094, 1096, and 1108,

respectively) shall be amended and

merged into one order. Parts 1093, 1094,

1096, and 1108 are vacated and reserved

for future assignment. The handling of

milk in the Southeast marketing area

shall be in conformity to and in

compliance with the following terms

and conditions:

1. Part 1007 is revised to read as

follows:

PART 1007—MILK IN THE SOUTHEAST

MARKETING AREA

Subpart—Order Regulating Handling

General Provisions

Sec.

1007.1 General provisions.

Definitions

1007.2 Southeast marketing area.

1007.3 Route disposition.

1007.4 Plant.

1007.5 Distributing plant.

1007.6 Supply plant.

1007.7 Pool plant.

1007.8 Nonpool plant.

1007.9 Handler.

1007.10 Producer-handler.

1007.11 [Reserved]

1007.12 Producer.

1007.13 Producer milk.

1007.14 Other source milk.

1007.15 Fluid milk product.

1007.16 Fluid cream product.

1007.17 Filled milk.

1007.18 Cooperative association.

1007.19 Commercial food processing

establishment.

Handler Reports

1007.30 Reports of receipts and utilization.

1007.31 Payroll reports.

1007.32 Other reports.

Classification of Milk

1007.40 Classes of utilization.

1007.41 Shrinkage.

1007.42 Classification of transfers and

diversions.

1007.43 General classification rules.

1007.44 Classification of producer milk.

1007.45 Market administrator’s reports and

announcements concerning

classification.

Class Prices

1007.50 Class prices.

1007.51 Basic formula price.

1007.52 Plant location adjustments for

handlers.

1007.53 Announcement of class prices.

1007.54 Equivalent price.

Uniform Prices

1007.60 Handler’s value of milk for

computing the uniform price.

1007.61 Computation of uniform price

(including weighted average price and

uniform prices for base and excess milk).

1007.62 Announcement of uniform prices

and butterfat differential.

Payments for Milk

1007.70 Producer-settlement fund.

1007.71 Payments to the producersettlement fund.

1007.72 Payments from the producersettlement fund.

1007.73 Payments to producers and to

cooperative associations.

1007.74 Butterfat differential.

1007.75 Plant location adjustments for

producers and on nonpool milk.

1007.76 Payments by a handler operating a

partially regulated distributing plant.

1007.77 Adjustment of accounts.

1007.78 Charges on overdue accounts.

Administrative Assessment and Marketing

Service Deduction

1007.85 Assessment for order

administration.

1007.86 Deduction for marketing services.

Base-Excess Plan

1007.90 Base milk.

1007.91 Excess milk.

1007.92 Computation of base for each

producer.

1007.93 Base rules.

1007.94 Announcement of established

bases.

Authority: 7 U.S.C. 601–674.

Subpart—Order Regulating Handling

General Provisions

§ 1007.1 General provisions.

The terms, definitions, and provisions

in part 1000 of this chapter apply to and

are hereby made a part of this order.

Definitions

§ 1007.2 Southeast marketing area.

The Southeast marketing area,

hereinafter called the marketing area,

means all territory within the bounds of

the following Alabama, Florida, Georgia,

Mississippi, Tennessee, and Arkansas

counties and Louisiana parishes,

including all piers, docks, and wharves

connected therewith and all craft

moored thereat, and all territory

occupied by government (municipal,

State, or Federal) reservations,

installations, institutions, or other

similar establishments if any part

thereof is within any of the listed

counties or parishes:

Zone 1

Arkansas Counties

Baxter, Clay, Fulton, Greene, Izard,

Lawrence, Randolph, and Sharp.

Tennessee Counties

Cheatham, Clay, Davidson, Dickson,

Fentress, Henry, Houston, Jackson, Lake,

Macon, Montgomery, Obion, Overton,

Pickett, Robertson, Smith, Stewart, Sumner,

Trousdale, Weakley, and Wilson.

Zone 2

Arkansas Counties

Newton, Searcy, and Stone.

Tennessee Counties

Bedford, Benton, Bledsoe, Cannon, Carroll,

Chester, Coffee, Crockett, DeKalb, Decatur,

Dyer, Gibson, Grundy, Henderson, Hickman,

Humphreys, Lewis, Madison, Marshall,

Maury, Perry, Putnam, Rutherford, Van

Buren, Warren, White, and Williamson.

Zone 3

Arkansas Counties

Cleburne, Craighead, Independence,

Jackson, Johnson, Mississippi, Poinsett, Pope,

and Van Buren.

Tennessee Counties

Lauderdale, Tipton, and Haywood.

Zone 4

Arkansas Counties

Conway, Crittenden, Cross, Faulkner,

Garland, Lee, Lonoke, Monroe, Montgomery,

Perry, Polk, Prairie, Pulaski, Saline, St.

Francis, White, Woodruff, and Yell.

Tennessee Counties

Fayette, Franklin, Giles, Hardeman,

Hardin, Lawrence, Lincoln, McNairy, Moore,

Shelby, and Wayne.

Zone 5

Alabama Counties

Colbert, De Kalb, Franklin, Jackson,

Lauderdale, Lawrence, Limestone, Madison,

Marshall, and Morgan.

Arkansas Counties

Arkansas, Clark, Grant, Hot Spring,

Howard, Jefferson, Phillips, Pike, and Sevier.

Georgia Counties

Gilmer, Towns, and Union.

Mississippi Counties

Alcorn, Benton, Coahoma, DeSoto,

Itawamba, Lafayette, Lee, Marshall, Panola,

Pontotoc, Prentiss, Quitman, Tate, Tippah,

Tishomingo, Tunica, and Union.

Zone 6

Alabama Counties

Blount, Cherokee, Cullman, Etowah,

Fayette, Lamar, Marion, Walker, and

Winston.

Arkansas Counties

Bradley, Calhoun, Cleveland, Dallas,

Desha, Drew, Hempstead, Lincoln, Little

River, Nevada, and Ouachita.

Georgia Counties

Bartow, Cherokee, Dawson, Floyd, Gordon,

Habersham, Lumpkin, Pickens, Rabun, and

White.
29438 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

Mississippi Counties

Bolivar, Calhoun, Chickasaw, Grenada,

Monroe, Sunflower, Tallahatchie, and

Yalobusha.

Zone 7

Alabama Counties

Bibb, Calhoun, Clay, Cleburne, Jefferson,

Pickens, Randolph, Shelby, St. Clair,

Talladega, and Tuscaloosa.

Arkansas Counties

Ashley, Chicot, Columbia, Lafayette,

Miller, and Union.

Georgia Counties

Banks, Barrow, Butts, Carroll, Clarke,

Clayton, Cobb, Coweta, De Kalb, Douglas,

Elbert, Fayette, Forsyth, Franklin, Fulton,

Greene, Gwinnett, Hall, Haralson, Hart,

Heard, Henry, Jackson, Jasper, Lincoln,

Madison, Morgan, Newton, Oconee,

Oglethorpe, Paulding, Polk, Putnam,

Rockdale, Spalding, Stephens, Taliaferro,

Walton, and Wilkes.

Mississippi Counties

Attala, Carroll, Choctaw, Clay, Holmes,

Humphreys, Leflore, Lowndes, Montgomery,

Noxubee, Oktibbeha, Washington, Webster,

and Winston.

Zone 8

Alabama Counties

Chambers, Chilton, Coosa, Greene, Hale,

Lee, Perry, Sumter (north of U.S. 80), and

Tallapoosa.

Georgia Counties

Baldwin, Bibb, Burke, Columbia, Crawford,

Glascock, Hancock, Harris, Jefferson, Jones,

Lamar, McDuffie, Meriwether, Monroe,

Muscogee, Pike, Richmond, Talbot, Taylor,

Troup, Twiggs, Upson, Warren, Washington,

and Wilkinson.

Louisiana Parishes

Bienville, Bossier, Caddo, Claiborne, East

Carroll, Jackson, Lincoln, Morehouse,

Ouachita, Richland, Union, Webster, and

West Carroll.

Mississippi Counties

Issaquena, Kemper, Leake, Madison,

Neshoba, Sharkey, and Yazoo.

Zone 9

Alabama Counties

Autauga, Bullock, Dallas, Elmore,

Lowndes, Macon, Marengo, Montgomery,

Russell, Sumter (south of U.S. 80), and

Wilcox.

Georgia Counties

Bleckley, Bulloch, Candler, Chattahoochee,

Crisp, Dodge, Dooly, Effingham, Emanuel,

Evans, Houston, Jenkins, Johnson, Laurens,

Macon, Marion, Montgomery, Peach, Pulaski,

Schley, Screven, Stewart, Sumter, Tattnall,

Telfair, Toombs, Treutlen, Webster, Wheeler,

and Wilcox.

Louisiana Parishes

Caldwell, De Soto, Franklin, Madison,

Natchitoches (north of State Highway 6 and

U.S. 84), Red River, Tensas, and Winn.

Mississippi Counties

Claiborne, Clarke, Copiah, Hinds, Jasper,

Lauderdale, Newton, Rankin, Scott, Simpson,

Smith, and Warren.

Zone 10

Alabama Counties

Barbour, Butler, Choctaw, Clarke, Coffee,

Conecuh, Covington, Crenshaw, Dale,

Escambia, Geneva, Henry, Houston, Monroe,

Pike, and Washington.

Georgia Counties

Appling, Atkinson, Bacon, Baker, Ben Hill,

Berrien, Brantley, Brooks, Bryan, Calhoun,

Camden, Charlton, Chatham, Clay, Clinch,

Coffee, Colquitt, Cook, Decatur, Dougherty,

Early, Echols, Glynn, Grady, Irwin, Jeff Davis,

Lanier, Lee, Liberty, Long, Lowndes,

McIntosh, Miller, Mitchell, Pierce, Quitman,

Randolph, Seminole, Terrell, Thomas, Tift,

Turner, Ware, Wayne, and Worth.

Louisiana Parishes

Avoyelles, Catahoula, Concordia, Grant, La

Salle, Natchitoches (south of State Highway

6 and U.S. 84), Rapides, Sabine, and Vernon.

Mississippi Counties

Adams, Amite, Covington, Forrest,

Franklin, Greene, Jefferson, Jefferson Davis,

Jones, Lamar, Lawrence, Lincoln, Marion,

Perry, Pike, Walthall, Wayne, and Wilkinson.

Zone 11

Alabama Counties

Baldwin and Mobile (more than 20 miles

from the Mobile city hall).

Florida Counties

Escambia, Okaloosa, Santa Rosa, and

Walton.

Louisiana Parishes

Allen, Beauregard, East Feliciana,

Evangeline, Pointe Coupee, St. Helena, St.

Landry, St. Tammany, Tangipahoa,

Washington, and West Feliciana.

Mississippi Counties

George, Hancock, Harrison, Jackson, Pearl

River, and Stone.

Zone 12

Alabama Counties

Mobile (within 20 miles of the Mobile city

hall).

Louisiana Parishes

Acadia, Ascension, Assumption, Calcasieu,

Cameron, East Baton Rouge, Iberia, Iberville,

Jefferson, Jefferson Davis, Lafayette,

Lafourche, Livingston, Orleans, Plaquemines,

St. Bernard, St. Charles, St. James, St. John

the Baptist, St. Martin, St. Mary, Terrebonne,

Vermilion, and West Baton Rouge.

§ 1007.3 Route disposition.

Route disposition means a delivery to

a retail or wholesale outlet (except a

plant), either directly or through any

distribution facility (including

disposition from a plant store, vendor or

vending machine) of a fluid milk

product classified as Class I milk.

Packaged fluid milk products that are

transferred to a distributing plant from

a plant with route disposition in the

marketing area and which are classified

as Class I under § 1007.40(a) shall be

considered as route disposition from the

transferor plant, rather than the

transferee plant, for the single purpose

of qualifying it as a pool plant under

§ 1007.7(a).

§ 1007.4 Plant.

Plant means the land, buildings,

facilities, and equipment constituting a

single operating unit or establishment at

which milk or milk products, including

filled milk, are received, processed, or

packaged. Separate facilities without

stationary storage tanks that are used

only as a reload point for transferring

bulk milk from one tank truck to

another or separate facilities used only

as a distribution point for storing

packaged fluid milk products in transit

for route disposition shall not be a plant

under this definition.

§ 1007.5 Distributing plant.

Distributing plant means a plant that

is approved by a duly constituted

regulatory agency for the handling of

Grade A milk and at which fluid milk

products are processed or packaged and

from which there is route disposition in

the marketing area during the month.

§ 1007.6 Supply plant.

Supply plant means a plant that is

approved by a duly constituted

regulatory agency for the handling of

Grade A milk and from which fluid milk

products are transferred during the

month to a pool distributing plant.

§ 1007.7 Pool plant.

Pool plant means a plant specified in

paragraphs (a), (b), (c) or (d) of this

section, or a unit of plants as specified

in paragraph (e) of this section, but

excluding a plant specified in paragraph

(g) of this section. The pooling

standards described in paragraphs (a)

through (c) of this section are subject to

modification pursuant to paragraph (f)

of this section:

(a) A distributing plant from which

during the month:

(1) Total route disposition, except

filled milk, is equal to 50 percent or

more of the total quantity of Grade A

fluid milk products, except filled milk,

physically received at such plant or

diverted therefrom pursuant to

§ 1007.13; and
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29439

(2) Route disposition, except filled

milk, in the marketing area is at least the

lesser of a daily average of 1,500 pounds

or 10 percent of the total quantity of

fluid milk products, except filled milk,

physically received or diverted

therefrom pursuant to § 1007.13.

(b) A supply plant from which during

each of the months of July through

November 60 percent (40 percent during

each of the months of December through

June) of the total quantity of Grade A

milk that is received during the month

from dairy farmers (including producer

milk diverted from the plant pursuant to

§ 1007.13 but excluding milk diverted to

such plant) and handlers described in

§ 1007.9(c) is transferred to pool

distributing plants.

(c) A plant located within the

Southeast marketing area that is

operated by a cooperative association if

pool plant status under this paragraph is

requested for such plant by the

cooperative association and during the

month producer milk of members of

such cooperative association is

delivered directly from farms to pool

distributing plants or is transferred to

such plants as a fluid milk product from

the cooperative’s plant. Such deliveries,

in excess of receipts by transfer from

pool distributing plants, must equal not

less than 60 percent of the total

producer milk of such cooperative

association in each of the months of July

through November, and 40 percent of

such milk in each of the months of

December through June. The plant’s

pool plant status shall be subject to the

following conditions:

(1) The plant does not qualify as a

pool plant under paragraphs (a) or (b) of

this section or under the provisions of

another Federal order applicable to a

distributing plant or a supply plant; and

(2) The plant is approved by a duly

constituted regulatory agency to handle

Grade A milk.

(d) A plant located within the

marketing area (other than a producerhandler plant or a governmental agency

plant) that meets the qualifications

described in paragraph (a) of this

section regardless of its quantity of route

disposition in any other Federal order

marketing area.

(e) Two or more plants operated by

the same handler and that are located

within the Southeast marketing area

may qualify for pool status as a unit by

meeting the total and in-area route

disposition requirements specified in

paragraph (a) of this section and the

following additional requirements:

(1) At least one of the plants in the

unit must qualify as a pool plant

pursuant to paragraph (a) of this section;

(2) Other plants in the unit must

process only Class I or Class II products

and must be located in a pricing zone

providing the same or a lower Class I

price than the price applicable at the

distributing plant included in the unit

pursuant to paragraph (e)(1) of this

section; and

(3) A written request to form a unit,

or to add or remove plants from a unit,

must be filed with the market

administrator prior to the first day of the

month for which it is to be effective.

(f) The applicable percentages in

paragraphs (a) through (c) of this section

may be increased or decreased up to 10

percentage points by the market

administrator if, following a written

request for such a revision, the market

administrator finds that such revision is

necessary to assure orderly marketing

and efficient handling of milk in the

marketing area. Before making such a

finding, the market administrator shall

investigate the need for the revision by

conducting an investigation and

conferring with the Director of the Dairy

Division. If the investigation shows that

a revision might be appropriate, the

market administrator shall issue a notice

stating that the revision is being

considered and inviting written data,

views, and arguments. Any decision to

revise an applicable percentage must be

issued in writing seven days before the

effective date.

(g) The term pool plant shall not

apply to the following plants:

(1) A producer-handler plant;

(2) An exempt plant as defined in

§ 1007.8(e);

(3) A plant qualified pursuant to

paragraph (a) of this section which is

not located within the Southeast

marketing area, meets the pooling

requirements of another Federal order,

and has had greater sales in such other

Federal order marketing area for three

consecutive months, including the

current month;

(4) A plant qualified pursuant to

paragraph (a) of this section which is

located in another order’s marketing

area and which is required to be

regulated under such other order

because of its location within the other

order’s marketing area; and

(5) A plant qualified pursuant to

paragraph (b) of this section which also

meets the pooling requirements of

another Federal order and from which

greater qualifying shipments are made

to plants regulated under such other

order than are made to plants regulated

under this part, or such plant has

automatic pooling status under such

other order.

§ 1007.8 Nonpool plant.

Nonpool plant means any milk or

filled milk receiving, manufacturing, or

processing plant other than a pool plant.

The following categories of nonpool

plants are further defined as follows:

(a) Other order plant means a plant

that is fully subject to the pricing and

pooling provisions of another order

issued pursuant to the Act.

(b) Producer-handler plant means a

plant operated by a producer-handler as

defined in any order (including this

part) issued pursuant to the Act.

(c) Partially regulated distributing

plant means a nonpool plant that is not

an other order plant, a producer-handler

plant, or an exempt plant, from which

there is route disposition in consumertype packages or dispenser units 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 an other

order plant, a producer-handler plant, or

an exempt plant.

(e) Exempt plant means a plant:

(1) Operated by a governmental

agency from which fluid milk products

are distributed in the marketing area.

Such plant shall be exempt from all

provisions of this part; or

(2) Which has monthly route

disposition of 100,000 pounds or less

during the month. Such plant will be

exempt from the pricing and pooling

provisions of this order, but the handler

will be required to file periodic reports

as prescribed by the market

administrator to enable determination of

the exempt status of such handler.

§ 1007.9 Handler.

Handler means:

(a) Any person who operates one or

more pool plants;

(b) Any cooperative with respect to

producer milk which it causes to be

diverted pursuant to § 1007.13 for the

account of such cooperative association;

(c) Any cooperative association with

respect to milk that it receives for its

account from the farm of a producer for

delivery to a pool plant of another

handler in a tank truck owned and

operated by, or under the control of,

such cooperative association, unless

both the cooperative association and the

operator of the pool plant notify the

market administrator prior to the time

that such milk is delivered to the pool

plant that the plant operator will be the

handler of such milk and will purchase

such milk on the basis of weights

determined from its measurement at the

farm and butterfat tests determined from

farm bulk tank samples. Milk for which

the cooperative association is the

handler pursuant to this paragraph shall
29440 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

be deemed to have been received by the

cooperative association at the location

of the pool plant to which such milk is

delivered;

(d) Any person who operates a

partially regulated distributing plant;

(e) A producer-handler;

(f) Any person who operates an other

order plant described in § 1007.8(a);

(g) Any person who operates an

unregulated supply plant; and

(h) Any person who operates an

exempt plant.

§ 1007.10 Producer-handler.

Producer-handler means a person

who:

(a) Operates a dairy farm and a

distributing plant from which there is

monthly route disposition in excess of

100,000 pounds per month;

(b) Receives no Class I milk from

sources other than his/her own farm

production and pool plants;

(c) Disposes of no other source milk

as Class I milk; and

(d) Provides proof satisfactory to the

market administrator that the care and

management of the dairy animals and

other resources necessary to produce all

Class I milk handled (excluding receipts

from pool plants) and the operation of

the processing and packaging business

are his/her personal enterprise and

personal risk.

§ 1007.11 [Reserved]

§ 1007.12 Producer.

(a) Except as provided in paragraph

(b) of this section, producer means any

person who produces milk approved by

a duly constituted regulatory agency for

fluid consumption as Grade A milk and

whose milk is:

(1) Received at a pool plant directly

from such producer;

(2) Received by a handler described in

§ 1007.9(c); or

(3) Diverted from a pool plant in

accordance with § 1007.13.

(b) Producer shall not include:

(1) A producer-handler as defined in

any order (including this part) issued

pursuant to the Act;

(2) Any person with respect to milk

produced by such person whose milk is

delivered to an exempt plant, excluding

producer milk diverted to such exempt

plant pursuant to § 1007.13;

(3) Any person with respect to milk

produced by such person which is

diverted to a pool plant from an other

order plant if the other order plant

designates such person as a producer

under that order and such milk is

allocated to Class II or Class III

utilization pursuant to

§ 1007.44(a)(8)(iii) and the

corresponding step of § 1007.44(b); or

(4) Any person with respect to milk

produced by such person which is

reported as diverted to an other order

plant if any portion of such person’s

milk so moved is assigned to Class I

under the provisions of such other

order.

§ 1007.13 Producer milk.

Producer milk means the skim milk

and butterfat contained in milk of a

producer that is:

(a) Received at a pool plant directly

from such producer by the operator of

the plant;

(b) Received by a handler described in

§ 1007.9(c);

(c) Diverted from a pool plant to the

pool plant of another handler. Milk so

diverted shall be deemed to have been

received at the location of the plant to

which diverted; or

(d) Diverted by the operator of a pool

plant or cooperative association to a

nonpool plant that is not a producerhandler plant, subject to the following

conditions:

(1) In any month of December through

June, not less than four days’ production

of the producer whose milk is diverted

is physically received at a pool plant

during the month;

(2) In any month of July through

November, not less than ten days’

production of the producer whose milk

is diverted is physically received at a

pool plant during the month;

(3) The total quantity of milk so

diverted during the month by a

cooperative association shall not exceed

33 percent during the months of July

through November, or 50 percent during

the months of December through June,

of the producer milk that the

cooperative association caused to be

delivered to, and physically received at,

pool plants during the month;

(4) The operator of a pool plant that

is not a cooperative association may

divert any milk that is not under the

control of a cooperative association that

diverts milk during the month pursuant

to paragraph (d) of this section. The

total quantity of milk so diverted during

the month shall not exceed 33 percent

during the months of July through

November, or 50 percent during the

months of December through June, of

the producer milk physically received at

such plant (or such unit of plants in the

case of plants that pool as a unit

pursuant to § 1007.7(d)) during the

month;

(5) Any milk diverted in excess of the

limits prescribed in paragraphs (d)(3)

and (4) of this section shall not be

producer milk. The diverting handler

shall designate the dairy farmer

deliveries that will not be producer milk

pursuant to paragraphs (d)(3) and (4) of

this section. If the handler fails to make

such designation, no milk diverted by

such handler shall be producer milk;

(6) To the extent that it would result

in nonpool status for the plant from

which diverted, milk diverted for the

account of a cooperative association

from the pool plant of another handler

shall not be producer milk;

(7) The cooperative association shall

designate the dairy farm deliveries that

are not producer milk pursuant to

paragraph (d)(6) of this section. If the

cooperative association fails to make

such designation, no milk diverted by it

to a nonpool plant shall be producer

milk;

(8) Diverted milk shall be priced at

the location of the plant to which

diverted; and

(9) The market administrator may

increase or decrease the applicable

percentages in paragraphs (d) (3) and (4)

of this section by up to 10 percentage

points, and may increase or decrease the

10-day and 4-day delivery requirements

in paragraphs (d) (1) and (2) of this

section by 50 percent if, following a

written request for such a revision, the

market administrator finds that such

revision is necessary to assure orderly

marketing and efficient handling of milk

in the marketing area. Before making

such a finding, the market administrator

shall investigate the need for the

revision by conducting an investigation

and conferring with the Director of the

Dairy Division. If the investigation

shows that a revision might be

appropriate, the market administrator

shall issue a notice stating that the

revision is being considered and

inviting written data, views, and

arguments. Any decision to revise an

applicable percentage must be issued in

writing seven days before the effective

date.

§ 1007.14 Other source milk.

Other source milk means all skim

milk and butterfat contained in or

represented by:

(a) Receipts of fluid milk products

and bulk products specified in

§ 1007.40(b)(1) from any source other

than producers, a handler described in

§ 1007.9(c), or pool plants;

(b) Receipts in packaged form from

other plants of products specified in

§ 1007.40(b)(1);

(c) Products (other than fluid milk

products, products specified in

§ 1007.40(b)(1), and products produced

at the plant during the same month)

from any source which are reprocessed,

converted into, or combined with

another product in the plant during the

month; and
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29441

(d) Receipts of any milk product

(other than a fluid milk product or a

product specified in § 1007.40(b)(1)) for

which the handler fails to establish a

disposition.

§ 1007.15 Fluid milk product.

(a) Except as provided in paragraph

(b) of this section, fluid milk product

means any milk products in fluid or

frozen form containing less than 9

percent butterfat, that are in bulk or are

packaged, distributed and intended to

be used as beverages. Such products

include, but are not limited to: Milk,

skim milk, lowfat milk, milk drinks,

buttermilk, and filled milk, including

any such beverage products that are

flavored, cultured, modified with added

nonfat milk solids, sterilized,

concentrated (to not more than 50

percent total milk solids), or

reconstituted.

(b) The term fluid milk product shall

not include:

(1) Plain or sweetened evaporated

milk, plain or sweetened evaporated

skim milk, sweetened condensed milk

or skim milk, formulas especially

prepared for infant feeding or dietary

use that are packaged in hermetically

sealed containers, any product that

contains by weight less than 6.5 percent

nonfat milk solids, and whey; and

(2) The quantity of skim milk in any

modified product specified in paragraph

(a) of this section that is in excess of the

quantity of skim milk in an equal

volume of an unmodified product of the

same nature and butterfat content.

§ 1007.16 Fluid cream product.

Fluid cream product means cream

(other than plastic cream or frozen

cream), including sterilized cream, or a

mixture of cream and milk or skim milk

containing 9 percent or more butterfat,

with or without the addition of other

ingredients.

§ 1007.17 Filled milk.

Filled milk means any combination of

nonmilk fat (or oil) with skim milk

(whether fresh, cultured, reconstituted,

or modified by the addition of nonfat

milk solids), with or without milkfat, so

that the product (including stabilizers,

emulsifiers, or flavoring) resembles milk

or any other fluid milk product, and

contains less than 6 percent nonmilk fat

(or oil).

§ 1007.18 Cooperative association.

Cooperative association means any

cooperative marketing association of

producers which the Secretary

determines after application by the

association:

(a) To be qualified under the

provisions of the Act of Congress of

February 18, 1922, as amended, known

as the ‘‘Capper-Volstead Act;’’ and

(b) To have full authority in the sale

of milk of its members and be engaged

in making collective sales of, or

marketing, milk or milk products for its

members.

§ 1007.19 Commercial food processing

establishment.

Commercial food processing

establishment means any facility, other

than a milk or filled milk plant, to

which bulk fluid milk products and

bulk fluid cream products are disposed

of, or producer milk is diverted, that

uses such receipts as ingredients in food

products, and has no disposition of

fluid milk products or fluid cream

products other than those that it

received in consumer type packages.

Producer milk diverted to commercial

food processing establishments shall be

subject to the same provisions relating

to diversions to plants, including, but

not limited to, provisions in §§ 1007.13,

1007.41, and 1007.52.

Handler Reports

§ 1007.30 Reports of receipts and

utilization.

On or before the 5th day after the end

of the month (if postmarked), or not

later than the 7th day if the report is

delivered in person to the office of the

market administrator, each handler shall

report for such month to the market

administrator, in the detail and on forms

prescribed by the market administrator,

as follows:

(a) Each handler, with respect to each

of its pool plants, shall report the

quantities of skim milk and butterfat

contained in or represented by:

(1) Receipts of producer milk,

including producer milk diverted by the

handler from the pool plant to other

plants;

(2) Receipts of milk from handlers

described in § 1007.9(c);

(3) Receipts of fluid milk products

and bulk fluid cream products from

other pool plants;

(4) Receipts of other source milk;

(5) Inventories at the beginning and

end of the month of fluid milk products

and products specified in

§ 1007.40(b)(1); and

(6) The utilization or disposition of all

milk, filled milk, and milk products

required to be reported pursuant to this

paragraph.

(b) Each handler operating a partially

regulated distributing plant shall report

with respect to such plant in the same

manner as prescribed for reports

required by paragraph (a) of this section.

Receipts of milk that would have been

producer milk if the plant had been

fully regulated shall be reported in lieu

of producer milk. Such report shall

show also the quantity of any

reconstituted skim milk in route

disposition in the marketing area.

(c) Each handler described in

§ 1007.9(b) and (c) shall report:

(1) The quantities of skim milk and

butterfat contained in receipts from

producers; and

(2) The utilization or disposition of all

such receipts.

(d) Each handler not specified in

paragraphs (a) through (c) of this section

shall report with respect to its receipts

and utilization of milk, filled milk, and

milk products in such manner as the

market administrator may prescribe.

§ 1007.31 Payroll reports.

(a) On or before the 20th day after the

end of each month, each handler

described in § 1007.9(a), (b), and (c)

shall report to the market administrator

its producer payroll for such month, in

detail prescribed by the market

administrator, showing for each

producer:

(1) Such producer’s name and

address;

(2) The total pounds of milk received

from such producer, showing separately

the pounds of milk received from the

producer on each delivery day;

(3) The average butterfat content of

such milk; and

(4) The price per hundredweight, the

gross amount due, the amount and

nature of any deduction, and the net

amount paid.

(b) Each handler operating a partially

regulated distributing plant who elects

to make payment pursuant to

§ 1007.76(b) shall report for each dairy

farmer who would have been a producer

if the plant had been fully regulated in

the same manner as prescribed for

reports required by paragraph (a) of this

section.

§ 1007.32 Other reports.

(a) Each handler described in

§ 1007.9(a), (b), and (c) shall report to

the market administrator on or before

the 7th day after the end of each month

of February through May the aggregate

quantity of base milk received from

producers during the month, and on or

before the 20th day after the end of each

month of February through May the

pounds of base milk received from each

producer during the month. In the case

of milk diverted to another plant, the

handler shall also report the pounds of

base milk of each producer assigned to

the divertee plant.

(b) In addition to the reports required

pursuant to paragraph (a) of this section

and §§ 1007.30 and 1007.31, each
29442 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

handler shall report such information as

the market administrator deems

necessary to verify or establish each

handler’s obligation under the order.

Classification of Milk

§ 1007.40 Classes of utilization.

Except as provided in § 1007.42, all

skim milk and butterfat required to be

reported pursuant to § 1007.30 shall be

classified as follows:

(a) Class I milk shall be all skim milk

and butterfat:

(1) Disposed of in the form of a fluid

milk product, except as otherwise

provided in paragraphs (b) and (c) of

this section;

(2) In packaged fluid milk products in

inventory at the end of the month; and

(3) Not specifically accounted for as

Class II or Class III milk.

(b) Class II milk shall be all skim milk

and butterfat:

(1) Disposed in the form of a fluid

cream product or any product

containing artificial fat, fat substitutes,

or 6 percent or more nonmilk fat (or oil)

that resembles a fluid cream product,

except as otherwise provided in

paragraph (c) of this section;

(2) In packaged inventory at the end

of the month of the products specified

in paragraph (b)(1) of this section and in

bulk concentrated fluid milk products

in inventory at the end of the month;

(3) In bulk fluid milk products and

bulk fluid cream products disposed of

or diverted to a commercial food

processing establishment if the market

administrator is permitted to audit the

records of the commercial food

processing establishment for the

purpose of verification. Otherwise, such

uses shall be Class I;

(4) Used to produce:

(i) Cottage cheese, lowfat cottage

cheese, dry curd cottage cheese, ricotta

cheese, pot cheese, Creole cheese, and

any similar soft, high-moisture cheese

resembling cottage cheese in form or

use;

(ii) Milkshake and ice milk mixes (or

bases), frozen desserts, and frozen

dessert mixes distributed in one-quart

containers or larger and intended to be

used in soft or semi-solid form;

(iii) Aerated cream, frozen cream, sour

cream, sour half-and-half, sour cream

mixtures containing nonmilk items,

yogurt, and any other semi-solid

product resembling a Class II product;

(iv) Eggnog, custards, puddings,

pancake mixes, buttermilk biscuit

mixes, coatings, batter, and similar

products;

(v) Formulas especially prepared for

infant feeding or dietary use (meal

replacement) that are packaged in

hermetically sealed containers;

(vi) Candy, soup, bakery products and

other prepared foods which are

processed for general distribution to the

public, and intermediate products,

including sweetened condensed milk, to

be used in processing such prepared

food products; and

(vii) Any product not otherwise

specified in this section.

(c) Class III milk shall be all skim milk

and butterfat:

(1) Used to produce:

(i) Cream cheese and other spreadable

cheeses, and hard cheese of types that

may be shredded, grated, or crumbled,

and are not included in paragraph

(b)(4)(i) of this section;

(ii) Butter, plastic cream, anhydrous

milkfat, and butteroil;

(iii) Any milk product in dry form

except nonfat dry milk;

(iv) Evaporated or sweetened

condensed milk in a consumer-type

package and evaporated or sweetened

condensed skim milk in a consumertype package; and

(2) In inventory at the end of the

month of unconcentrated fluid milk

products in bulk form and products

specified in paragraph (b)(1) of this

section in bulk form;

(3) In fluid milk products, products

specified in paragraph (b)(1) of this

section, and products processed by the

disposing handler that are specified in

paragraphs (b)(4)(i) through (iv) of this

section, that are disposed of by a

handler for animal feed;

(4) In fluid milk products, products

specified in paragraph (b)(1) of this

section, and products processed by the

disposing handler that are specified in

paragraphs (b)(4) (i) through (iv) of this

section, that are dumped by a handler.

The market administrator may require

notification by the handler of such

dumping in advance for the purpose of

having the opportunity to verify such

disposition. In any case, classification

under this paragraph requires a handler

to maintain adequate records of such

use. If advance notification of such

dumping is not possible, or if the market

administrator so requires, the handler

must notify the market administrator on

the next business day following such

use;

(5) In fluid milk products and

products specified in paragraph (b)(1) of

this section that are destroyed or lost by

a handler in a vehicular accident, flood,

fire, or in a similar occurrence beyond

the handler’s control, to the extent that

the quantities destroyed or lost can be

verified from records satisfactory to the

market administrator;

(6) In skim milk in any modified fluid

milk product or in any product

specified in paragraph (b)(1) of this

section that is in excess of the quantity

of skim milk in such product that was

included within the fluid milk product

definition pursuant to § 1007.15 and the

fluid cream product definition pursuant

to § 1007.16; and

(7) In shrinkage assigned pursuant to

§ 1007.41(a) to the receipts specified in

§ 1007.41(a)(2) and in shrinkage

specified in § 1007.41 (b) and (c).

(d) Class III–A milk shall be all skim

milk and butterfat used to produce

nonfat dry milk.

§ 1007.41 Shrinkage.

For the purposes of classifying all

skim milk and butterfat to be reported

by a handler pursuant to § 1007.30, the

market administrator shall determine

the following:

(a) The pro rata assignment of

shrinkage of skim milk and butterfat,

respectively, at each pool plant to the

respective quantities of skim milk and

butterfat:

(1) In the receipts specified in

paragraphs (b) (1) through (6) of this

section on which shrinkage is allowed

pursuant to such paragraph; and

(2) In other source milk not specified

in paragraphs (b) (1) through (6) of this

section which was received in the form

of a bulk fluid milk product or a bulk

fluid cream product;

(b) The shrinkage of skim milk and

butterfat, respectively, assigned

pursuant to paragraph (a) of this section

to the receipts specified in paragraph

(a)(1) of this section that is not in excess

of:

(1) Two percent of the skim milk and

butterfat, respectively, in producer milk

(excluding milk diverted by the plant

operator to another plant);

(2) Plus 1.5 percent of the skim milk

and butterfat, respectively, in milk

received from a handler described in

§ 1007.9(c), except that if the operator of

the plant to which the milk is delivered

purchased such milk on the basis of

weights determined from its

measurement at the farm and butterfat

tests determined from farm bulk tank

samples, the applicable percentage shall

be 2 percent;

(3) Plus 0.5 percent of the skim milk

and butterfat, respectively, in producer

milk diverted from such plant by the

plant operator to another plant, except

that if the operator of the plant to which

the milk is delivered purchased such

milk on the basis of weights determined

from its measurement at the farm and

butterfat tests determined from farm

bulk tank samples, the applicable

percentage shall be zero;

(4) Plus 1.5 percent of the skim milk

and butterfat, respectively, in bulk fluid
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29443

milk products received by transfer from

other pool plants;

(5) Plus 1.5 percent of the skim milk

and butterfat, respectively, in bulk fluid

milk products received by transfer from

other order plants, excluding the

quantity for which Class II or Class III

classification is requested by the

handler; and

(6) Plus 1.5 percent of the skim milk

and butterfat, respectively, in bulk fluid

milk products received by transfer from

unregulated supply plants, excluding

the quantity for which Class II or Class

III classification is requested by the

handler; and

(7) Less 1.5 percent of the skim milk

and butterfat, respectively, in bulk fluid

milk products transferred to other plants

that is not in excess of the respective

amount of skim milk and butterfat to

which percentages are applied in

paragraphs (b) (1), (2), (4), (5), and (6)

of this section; and

(c) The quantity of skim milk and

butterfat, respectively, in shrinkage of

milk from producers for which a

cooperative association is the handler

pursuant to § 1007.9 (b) or (c), but not

in excess of 0.5 percent of the skim milk

and butterfat, respectively, in such milk.

If the operator of the plant to which the

milk is delivered purchases such milk

on the basis of weights determined from

its measurement at the farm and

butterfat tests determined from farm

bulk tank samples, the applicable

percentage under this paragraph for the

cooperative association shall be zero.

§ 1007.42 Classification of transfers and

diversions.

(a) Transfers and diversions to pool

plants. Skim milk or butterfat

transferred or diverted in the form of a

fluid milk product or transferred in the

form of a bulk fluid cream product from

a pool plant to another pool plant shall

be classified as Class I milk unless the

operators of both plants request the

same classification in another class. In

either case, the classification shall be

subject to the following conditions:

(1) The skim milk or butterfat

classified in each class shall be limited

to the amount of skim milk and

butterfat, respectively, remaining in

such class at the transferee-plant after

the computations pursuant to

§ 1007.44(a)(12) and the corresponding

step of § 1007.44(b). The amount of skim

milk or butterfat classified in each class

shall include the assigned utilization of

skim milk or butterfat in transfers of

concentrated fluid milk products.

(2) If the transferor-plant received

during the month other source milk to

be allocated pursuant to § 1007.44(a)(7)

or the corresponding step of

§ 1007.44(b), the skim milk or butterfat

so transferred shall be classified so as to

allocate the least possible Class I

utilization to such other source milk;

and

(3) If the transferor-plant received

during the month other source milk to

be allocated pursuant to § 1007.44(a)

(11) or (12) or the corresponding steps

of § 1007.44(b), the skim milk or

butterfat so transferred, up to the total

of the skim milk and butterfat,

respectively, in such receipts of other

source milk, shall not be classified as

Class I milk to a greater extent than

would be the case if the other source

milk had been received at the transfereeplant.

(b) Transfers and diversions to other

order plants. Skim milk or butterfat

transferred or diverted in the form of a

fluid milk product or transferred in the

form of a bulk fluid cream product from

a pool plant to an other order plant shall

be classified in the following manner.

Such classification shall apply only to

the skim milk or butterfat that is in

excess of any receipts at the pool plant

from the other plant of skim milk and

butterfat, respectively, in fluid milk

products and bulk fluid cream products,

respectively, that are in the same

category as described in paragraph (b)

(1), (2), or (3) of this section.

(1) If transferred as packaged fluid

milk products, classification shall be in

the classes to which allocated as a fluid

milk product under the other order;

(2) If transferred in bulk form,

classification shall be in the classes to

which allocated under the other order

(including allocation under the

conditions set forth in paragraph (b)(3)

of this section);

(3) If the operators of both plants so

request in their reports of receipts and

utilization filed with their respective

market administrators, transfers or

diversions in bulk form shall be

classified as Class II or Class III milk to

the extent of such utilization available

for such classification pursuant to the

allocation provisions of the other order;

(4) If information concerning the

classes to which such transfers or

diversions were allocated under the

other order is not available to the market

administrator for the purpose of

establishing classification under this

paragraph, classification shall be Class I

subject to adjustment when such

information is available;

(5) For purposes of this paragraph, if

the other order provides for a different

number of classes of utilization than is

provided for under this part, skim milk

or butterfat allocated to the class

consisting primarily of fluid milk

products shall be classified as Class I

milk, and skim milk or butterfat

allocated to the other classes shall be

classified as Class III milk; and

(6) If the form in which any fluid milk

product that is transferred to an other

order plant is not defined as a fluid milk

product under such other order,

classification shall be in accordance

with the provisions of § 1007.40.

(c) Transfers and diversions to

producer-handlers and to exempt

plants. Skim milk or butterfat that is

transferred or diverted from a pool plant

to a producer-handler under another

Federal order or to an exempt plant

shall be classified:

(1) As Class I milk if transferred or

diverted to a producer-handler;

(2) As Class I milk if transferred to an

exempt plant in the form of a packaged

fluid milk product;

(3) In accordance with the utilization

assigned to it by the market

administrator if transferred or diverted

in the form of a bulk fluid milk product

or a bulk fluid cream product to an

exempt plant. For this purpose, the

transferee’s utilization of skim milk and

butterfat in each class, in series

beginning with Class III, shall be

assigned to the extent possible to its

receipts of skim milk and butterfat,

respectively, in bulk fluid cream

products, pro rata to each source.

(d) Transfers and diversions to other

nonpool plants. Skim milk or butterfat

transferred or diverted in the following

forms from a pool plant to a nonpool

plant that is not an other order plant, a

producer-handler plant, or an exempt

plant shall be classified:

(1) As Class I milk, if transferred in

the form of a packaged fluid milk

product; and

(2) As Class I milk, if transferred or

diverted in the form of a bulk fluid milk

product or transferred in the form of a

bulk fluid cream product, unless the

following conditions apply:

(i) If the conditions described in

paragraphs (d)(2)(i) (A) and (B) of this

section are met, transfers or diversions

in bulk form shall be classified on the

basis of the assignment of the nonpool

plant’s utilization to its receipts as set

forth in paragraphs (d)(2) (ii) through

(viii) of this section:

(A) The transferor-handler or divertorhandler claims such classification in

such handler’s report of receipts and

utilization filed pursuant § 1007.30 for

the month within which such

transaction occurred; and

(B) The nonpool plant operator

maintains books and records showing

the utilization of all skim milk and

butterfat received at such plant which

are made available for verification
29444 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

purposes if requested by the market

administrator;

(ii) Route disposition in the marketing

area of each Federal order from the

nonpool plant and transfers of packaged

fluid milk products from such nonpool

plant to plants fully regulated

thereunder shall be assigned to the

extent possible in the following

sequence:

(A) Pro rata to receipts of packaged

fluid milk products at such nonpool

plants from pool plants;

(B) Pro rata to any remaining

unassigned receipts of packaged fluid

milk products at such nonpool plants

from other order plants;

(C) Pro rata to receipts of bulk fluid

milk products at such nonpool plant

from pool plants; and

(D) Pro rata to any remaining

unassigned receipts of bulk fluid milk

products at such nonpool plant from

other order plants;

(iii) Any remaining Class I disposition

of packaged fluid milk products from

the nonpool plant shall be assigned to

the extent possible pro rata to any

remaining unassigned receipts of

packaged fluid milk products at such

nonpool plant from pool plants and

other order plants;

(iv) Transfers of bulk fluid milk

products from the nonpool plant to a

plant regulated under any Federal milk

order, to the extent that such transfers

to the regulated plant exceed receipts of

fluid milk products from such plant and

are allocated to Class I at the transfereeplant, shall be classified to the extent

possible in the following sequence:

(A) Pro rata to receipts of fluid milk

products at such nonpool plant from

pool plants; and

(B) Pro rata to any remaining

unassigned receipts of fluid milk

products at such nonpool plant from

other order plants;

(v) Any remaining unassigned Class I

disposition from the nonpool plant shall

be assigned to the extent possible in the

following sequence:

(A) To such nonpool plant’s receipts

from dairy farmers who the market

administrator determines constitute

regular sources of Grade A milk for such

nonpool plant; and

(B) To such nonpool plant’s receipts

of Grade A milk from plants not fully

regulated under any Federal milk order

which the market administrator

determines constitute regular sources of

Grade A milk for such nonpool plant;

(vi) Any remaining unassigned

receipts of bulk fluid milk products at

the nonpool plant from pool plants and

other order plants shall be assigned, pro

rata among such plants, to the extent

possible first to any remaining Class I

utilization, then to Class II utilization,

and then to Class III utilization at such

nonpool plant;

(vii) Receipts of bulk fluid cream

products at the nonpool plant from pool

plants and other order plants shall be

assigned, pro rata among such plants, to

the extent possible first to any

remaining Class II utilization, then to

any remaining Class III utilization, and

then to Class I utilization at such

nonpool plant; and

(viii) In determining the nonpool

plant’s utilization for purposes of this

paragraph, any fluid milk products and

bulk fluid cream products transferred

from such nonpool plant to a plant not

fully regulated under any Federal milk

order shall be classified on the basis of

the second plant’s utilization using the

same assignment priorities at the second

plant that are set forth in this paragraph.

(e) Transfers by a handler described

in § 1007.9(c) to pool plants. Skim milk

and butterfat transferred in the form of

bulk milk by a handler described in

§ 1007.9(c) to another handler’s pool

plant shall be classified pursuant to

§ 1007.44 pro rata with producer milk

received at the transferee-handler’s

plant.

§ 1007.43 General classification rules.

In determining the classification of

producer milk pursuant to § 1007.44,

the following rules shall apply:

(a) Each month the market

administrator shall correct for

mathematical and other obvious errors

all reports filed pursuant to § 1007.30

and shall compute separately for each

pool plant, and for each cooperative

association with respect to milk for

which it is the handler pursuant to

§ 1007.9 (b) or (c) that was not received

at a pool plant, the pounds of skim milk

and butterfat, respectively, in each class

in accordance with §§ 1007.40, 1007.41,

and 1007.42. The combined pounds of

skim milk and butterfat so determined

in each class for a handler described in

§ 1007.9 (b) or (c) shall be such

handler’s classification of producer

milk;

(b) If any of the water contained in the

milk from which a product is made is

removed before the product is utilized

or disposed of by the handler, the

pounds of skim milk in such product

that are to be considered under this part

as used or disposed of by the handler

shall be an amount equivalent to the

nonfat milk solids contained in such

product plus all of the water originally

associated with such solids;

(c) The classification of producer milk

for which a cooperative association is

the handler pursuant to § 1007.9 (b) or

(c) shall be determined separately from

the operations of any pool plant

operated by such cooperative

association;

(d) Skim milk and butterfat contained

in receipts of bulk concentrated fluid

milk and nonfluid milk products that

are reconstituted for fluid use shall be

assigned to Class I use, up to the

reconstituted portion of labeled

reconstituted fluid milk products, on a

pro rata basis (except for any Class I use

of specific concentrated receipts that is

established by the handler) prior to any

assignment under § 1007.44. Any

remaining skim milk and butterfat in

concentrated receipts shall be assigned

to uses under § 1007.44 on a pro rata

basis, unless a specific use of such

receipts is established by the handler;

and

(e) Class III–A milk shall be allocated

in combination with Class III milk and

the quantity of producer milk eligible to

be priced in Class III–A shall be

determined by prorating receipts from

pool sources to Class III–A use on the

basis of the quantity of total receipts of

bulk fluid milk products allocated to

Class III use at the plant.

§ 1007.44 Classification of producer milk.

For each month the market

administrator shall determine for each

handler described in § 1007.9(a) for each

pool plant of the handler separately the

classification of producer milk and milk

received from a handler described in

§ 1007.9(c), by allocating the handler’s

receipts of skim milk and butterfat to

the utilization of such receipts by such

handler as follows:

(a) Skim milk shall be allocated in the

following manner:

(1) Subtract from the total pounds of

skim milk in Class III the pounds of

skim milk in shrinkage specified in

§ 1007.41(b);

(2) Subtract from the total pounds of

skim milk in Class I the pounds of skim

milk in:

(i) Receipts of packaged fluid milk

products from an unregulated supply

plant to the extent that an equivalent

amount of skim milk disposed of to

such plant by handlers fully regulated

under any Federal milk order is

classified and priced as Class I milk and

is not used as an offset for any other

payment obligation under any order;

(ii) Packaged fluid milk products in

inventory at the beginning of the month.

This paragraph shall apply only if the

pool plant was subject to the provisions

of this paragraph or comparable

provisions of another Federal milk order

in the immediately preceding month;

(3) Subtract from the pounds of skim

milk remaining in each class the pounds

of skim milk in fluid milk products
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29445

received in packaged form from an other

order plant, except that to be subtracted

pursuant to paragraph (a)(7)(vi) of this

section, as follows:

(i) From Class III milk, the lesser of

the pounds remaining or 2 percent of

such receipts; and

(ii) From Class I milk, the remainder

of such receipts;

(4) Subtract from the pounds of skim

milk in Class II the pounds of skim milk

in products specified in § 1007.40(b)(1)

that were received in packaged form

from other plants, but not in excess of

the pounds of skim milk remaining in

Class II;

(5) Subtract from the remaining

pounds of skim milk in Class II the

pounds of skim milk in products

specified in § 1007.40(b)(1) in packaged

form and in bulk concentrated fluid

milk products that were in inventory at

the beginning of the month, but not in

excess of the pounds of skim milk

remaining in Class II. This paragraph

shall apply only if the pool plant was

subject to the provisions of this

paragraph or comparable provisions of

another Federal milk order in the

immediately preceding month;

(6) Subtract from the remaining

pounds of skim milk in Class II the

pounds of skim milk in bulk

concentrated fluid milk products and in

other source milk (except other source

milk received in the form of an

unconcentrated fluid milk product or a

fluid cream product) that is used to

produce, or added to, any product

specified in § 1007.40(b) (excluding the

quantity of such skim milk that was

classified as Class III milk pursuant to

§ 1007.40(c)(6)), but not in excess of the

pounds of skim milk remaining in Class

II;

(7) Subtract in the order specified

below from the pounds of skim milk

remaining in each class, in series

beginning with Class III, the pounds of

skim milk in each of the following:

(i) Bulk concentrated fluid milk

products and other source milk (except

other source milk received in the form

of an unconcentrated fluid milk

product) and, if paragraph (a)(5) of this

section applies, packaged inventory at

the beginning of the month of products

specified in § 1007.40(b)(1) that were

not subtracted pursuant to paragraphs

(a)(4), (a)(5), and (a)(6) of this section;

(ii) Receipts of fluid milk products

(except filled milk) for which Grade A

certification is not established;

(iii) Receipts of fluid milk products

from unidentified sources;

(iv) Receipts of fluid milk products

from a producer-handler as defined

under any Federal milk order and from

an exempt distributing plant;

(v) Receipts of reconstituted skim

milk in filled milk from an unregulated

supply plant that were not subtracted

pursuant to paragraph (a)(2)(i) of this

section; and

(vi) Receipts of reconstituted skim

milk in filled milk from an other order

plant that is fully regulated under any

Federal milk order providing for

individual-handler pooling, to the

extent that reconstituted skim milk is

allocated to Class I at the transferorplant;

(8) Subtract in the order specified

below from the pounds of skim milk

remaining in Class II and Class III, in

sequence beginning with Class III:

(i) The pounds of skim milk in

receipts of fluid milk products from an

unregulated supply plant that were not

subtracted pursuant to paragraphs

(a)(2)(i) and (7)(v) of this section for

which the handler requests a

classification other than Class I, but not

in excess of the pounds of skim milk

remaining in Class II and Class III

combined;

(ii) The pounds of skim milk in

receipts of fluid milk products from an

unregulated supply plant that were not

subtracted pursuant to paragraphs

(a)(2)(i), (7)(v), and (8)(i) of this section

which are in excess of the pounds of

skim milk determined pursuant to

paragraphs (a)(8)(ii) (A) through (C) of

this section. Should the pounds of skim

milk to be subtracted from Class II and

Class III combined exceed the pounds of

skim milk remaining in such classes, the

pounds of skim milk in Class II and

Class III combined shall be increased

(increasing as necessary Class III and

then Class II to the extent of available

utilization in such classes at the nearest

other pool plant of the handler, and

then at each successively more distant

pool plant of the handler) by an amount

equal to such excess quantity to be

subtracted, and the pounds of skim milk

in Class I shall be decreased a like

amount. In such case, the pounds of

skim milk remaining in each class at

this allocation step at the handler’s

other pool plants shall be adjusted in

the reverse direction by a like amount;

(A) Multiply by 1.25 the sum of the

pounds of skim milk remaining in Class

I at this allocation step at all pool plants

of the handler (excluding any

duplication of Class I utilization

resulting from reported Class I transfers

between pool plants of the handler);

(B) Subtract from the above result the

sum of the pounds of skim milk in

receipts at all pool plants of the handler

of producer milk, milk from a handler

described in § 1007.9(c), fluid milk

products from pool plants of other

handlers, and bulk fluid milk products

from other order plants that were not

subtracted pursuant to paragraph

(a)(7)(vi) of this section; and

(C) Multiply any plus quantity

resulting above by the percentage that

the receipts of skim milk in fluid milk

products from unregulated supply

plants that remain at this pool plant is

of all such receipts remaining at this

allocation step at all pool plants of the

handler; and

(iii) The pounds of skim milk in

receipts of bulk fluid milk products

from an other order plant that are in

excess of bulk fluid milk products

transferred or diverted to such plant and

that were not subtracted pursuant to

paragraph (a)(7)(vi) of this section, if

Class II or Class III classification is

requested by the operator of the other

order plant and the handler, but not in

excess of the pounds of skim milk

remaining in Class II and Class III

combined;

(9) Subtract from the pounds of skim

milk remaining in each class, in series

beginning with Class III, the pounds of

skim milk in fluid milk products and

products specified in § 1007.40(b)(1) in

inventory at the beginning of the month

that were not subtracted pursuant to

paragraphs (a)(2)(ii), (a)(5), and (a)(7)(i)

of this section;

(10) Add to the remaining pounds of

skim milk in Class III the pounds of

skim milk subtracted pursuant to

paragraph (a)(1) of this section;

(11) Subject to the provisions of

paragraphs (a)(11) (i) and (ii) of this

section, subtract from the pounds of

skim milk remaining in each class at the

plant, pro rata to the total pounds of

skim milk remaining in Class I and in

Class II and Class III combined at this

allocation step at all pool plants of the

handler (excluding any duplication of

utilization in each class resulting from

transfers between pool plants of the

handler), with the quantity prorated to

Class II and Class III combined being

subtracted first from Class III and then

from Class II, the pounds of skim milk

in receipts of fluid milk products from

an unregulated supply plant that were

not subtracted pursuant to paragraphs

(a)(2)(i), (a)(7)(v), (a)(8)(i), and (a)(8)(ii)

of this section and that were not offset

by transfers or diversions of fluid milk

products to the same unregulated

supply plant from which fluid milk

products to be allocated at this step

were received:

(i) Should the pounds of skim milk to

be subtracted from Class II and Class III

combined pursuant to paragraph (a)(11)

of this section exceed the pounds of

skim milk remaining in such classes, the

pounds of skim milk in Class II and

Class III combined shall be increased
29446 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

(increasing as necessary Class III and

then Class II to the extent of available

utilization in such classes at the nearest

other pool plant of the handler, and

then at each successively more distant

pool plant of the handler) by an amount

equal to such excess quantity to be

subtracted, and the pounds of skim milk

in Class I shall be decreased a like

amount. In such case, the pounds of

skim milk remaining in each class at

this allocation step at the handler’s

other pool plants shall be adjusted in

the reverse direction by a like amount;

and

(ii) Should the pounds of skim milk

to be subtracted from Class I pursuant

to paragraph (a)(11) of this section

exceed the pounds of skim milk

remaining in such class, the pounds of

skim milk in Class I shall be increased

by an amount equal to such excess

quantity to be subtracted, and the

pounds of skim milk in Class II and

Class III combined shall be decreased by

a like amount (decreasing as necessary

Class III then Class II). In such case, the

pounds of skim milk remaining in each

class at this allocation step at the

handler’s other pool plants shall be

adjusted in the reverse direction by a

like amount, beginning with the nearest

plant at which Class I utilization is

available;

(12) Subtract in the manner specified

below from the pounds of skim milk

remaining in each class the pounds of

skim milk in receipts of bulk fluid milk

products from an other order plant that

are in excess of bulk fluid milk products

transferred or diverted to such plant that

were not subtracted pursuant to

paragraphs (a)(7)(vi) and (8)(iii) of this

section:

(i) Subject to the provisions of

paragraphs (a)(12) (ii), (iii) and (iv) of

this section, such subtraction shall be

pro rata to the pounds of skim milk in

Class I and in Class II and Class III

combined, with the quantity prorated to

Class II and Class III combined being

subtracted first from Class III and then

from Class II, with respect to whichever

of the following quantities represents

the lower proportion of Class I milk:

(A) The estimated utilization of skim

milk of all handlers in each class as

announced for the month pursuant to

§ 1007.45(a); or

(B) The total pounds of skim milk

remaining in each class at this

allocation step at all pool plants of the

handler (excluding any duplication of

utilization in each class resulting from

transfers between pool plants of the

handler);

(ii) Should the proration pursuant to

paragraph (a)(12)(i) of this section result

in the total pounds of skim milk at all

pool plants of the handler that are to be

subtracted at this allocation step from

Class II and Class III combined

exceeding the pounds of skim milk

remaining in Class II and Class III at all

such plants, the pounds of such excess

shall be subtracted from the pounds

remaining in Class I after such proration

at the pool plants at which such other

source milk was received;

(iii) Except as provided in paragraph

(a)(12)(ii) of this section, should the

computations pursuant to paragraph

(a)(12) (i) or (ii) of this section result in

a quantity of skim milk to be subtracted

from Class II and Class III combined that

exceeds the pounds of skim milk

remaining in such classes, the pounds of

skim milk in Class II and Class III

combined shall be increased (increasing

as necessary Class III and then Class II

to the extent of available utilization in

such classes at the nearest other pool

plant of the handler, and then at each

successively more distant pool plant of

the handler) by an amount equal to such

excess quantity to be subtracted, and the

pounds of skim milk in Class I shall be

decreased by a like amount. In such

case, the pounds of skim milk remaining

in each class at this allocation step at

the handler’s other pool plants shall be

adjusted in the reverse direction by a

like amount; and

(iv) Except as provided in paragraph

(a)(12)(ii) of this section, should the

computations pursuant to paragraph

(a)(12) (i) or (ii) of this section result in

a quantity of skim milk to be subtracted

from Class I that exceeds the pounds of

skim milk remaining in such class, the

pounds of skim milk in Class I shall be

increased by an amount equal to such

excess quantity to be subtracted, and the

pounds of skim milk in Class II and

Class III combined shall be decreased by

a like amount (decreasing as necessary

Class III and then Class II). In such case

the pounds of skim milk remaining in

each class at this allocation step at the

handler’s other pool plants shall be

adjusted in the reverse direction by a

like amount beginning with the nearest

plant at which Class I utilization is

available;

(13) Subtract from the pounds of skim

milk remaining in each class the pounds

of skim milk in receipts of fluid milk

products and bulk fluid cream products

from another pool plant according to the

classification of such products pursuant

to § 1007.42(a); and

(14) If the total pounds of skim milk

remaining in all classes exceed the

pounds of skim milk in producer milk

and milk received from a handler

described in § 1007.9(c), subtract such

excess from the pounds of skim milk

remaining in each class in series

beginning with Class III. Any amount so

subtracted shall be known as ‘‘overage’’;

(b) Butterfat shall be allocated in

accordance with the procedure outlined

for skim milk in paragraph (a) of this

section; and

(c) The quantity of producer milk and

milk received from a handler described

in § 1007.9(c) in each class shall be the

combined pounds of skim milk and

butterfat remaining in each class after

the computations pursuant to paragraph

(a)(14) of this section and the

corresponding step of paragraph (b) of

this section.

§ 1007.45 Market administrator’s reports

and announcements concerning

classification.

The market administrator shall make

the following reports and

announcements concerning

classification:

(a) Whenever required for the purpose

of allocating receipts from other order

plants pursuant to § 1007.44(a)(12) and

the corresponding step of § 1007.44(b),

estimate and publicly announce the

utilization (to the nearest whole

percentage) in each class during the

month of skim milk and butterfat,

respectively, in producer milk of all

handlers. Such estimate shall be based

upon the most current available data

and shall be final for such purpose.

(b) Report to the market administrator

of the other order, as soon as possible

after the report of receipts and

utilization for the month is received

from a handler who has received fluid

milk products or bulk fluid cream

products from an other order plant, the

class to which such receipts are

allocated pursuant to §§ 1007.43(d) and

1007.44 on the basis of such report

(including any reclassification of

inventories of bulk concentrated fluid

milk products), and thereafter, any

change in such allocation required to

correct errors disclosed in the

verification of such report.

(c) Furnish each handler operating a

pool plant who has shipped fluid milk

products or bulk fluid cream products to

an other order plant the class to which

such shipments were allocated by the

market administrator of the other order

on the basis of the report by the

receiving handler, and, as necessary,

any changes in such allocation arising

from the verification of such report.

(d) On or before the 12th day after the

end of each month, report to each

cooperative association which so

requests, the percentage of producer

milk delivered by members of such

association that was used in each class

by each handler receiving such milk.

For the purpose of this report the milk
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29447

so received shall be prorated to each

class in accordance with the total

utilization of producer milk by such

handler.

Class Prices

§ 1007.50 Class prices.

Subject to the provisions of § 1007.52,

the class prices for the month per

hundredweight of milk containing 3.5%

butterfat shall be as follows:

(a) The Class I price shall be the basic

formula price for the second preceding

month plus $3.08.

(b) The Class II price shall be the basic

formula price for the second preceding

month plus $.30.

(c) The Class III price shall be the

basic formula price for the month.

(d) The Class III–A price for the

month shall be the average Central

States nonfat dry milk price for the

month, as reported by the Department,

less 12.5 cents, times an amount

computed by subtracting from 9 an

amount calculated by dividing 0.4 by

such nonfat dry milk price, plus the

butterfat differential value per

hundredweight of 3.5 percent milk and

rounded to the nearest cent, and subject

to the adjustments set forth in paragraph

(c) of this section for the applicable

month.

§ 1007.51 Basic formula price.

The basic formula price shall be the

preceding month’s average pay price for

manufacturing grade milk in Minnesota

and Wisconsin using the ‘‘base month’’

series, as reported by the Department,

adjusted to a 3.5 percent butterfat basis

using the butterfat differential for the

preceding month computed pursuant to

§ 1007.74 and rounded to the nearest

cent, plus or minus the change in gross

value yielded by the butter-nonfat dry

milk and Cheddar cheese product price

formula computed pursuant to

paragraphs (a) through (e) of this

section.

(a) The gross values of per

hundredweight of milk used to

manufacture butter-nonfat dry milk and

Cheddar cheese shall be computed,

using price data determined pursuant to

paragraph (b) of this section and annual

yield factors, for the preceding month

and separately for the current month as

follows:

(1) The gross value of milk used to

manufacture butter-nonfat dry milk

shall be the sum of the following

computations:

(i) Multiply the Grade AA butter price

by 4.27;

(ii) Multiply the nonfat dry milk price

by 8.07; and

(iii) Multiply the dry buttermilk price

by 0.42.

(2) The gross value of milk used to

manufacture Cheddar cheese shall be

the sum of the following computations:

(i) Multiply the Cheddar cheese price

by 9.87; and

(ii) Multiply the Grade A butter price

by 0.238.

(b) The following product prices shall

be used pursuant to paragraph (a) of this

section:

(1) Grade AA butter price. Grade AA

butter price means the simple average

for the month of the Chicago Mercantile

Exchange, Grade AA butter price, as

reported by the Department.

(2) Nonfat dry milk price. Nonfat dry

milk price means the simple average for

the month of the Western Nonfat Dry

Milk Low/Medium Heat price, as

reported by the Department.

(3) Dry buttermilk price. Dry

buttermilk price means the simple

average for the month of the Western

Dry Buttermilk price, as reported by the

Department.

(4) Cheddar cheese price. Cheddar

cheese price means the simple average

for the month of the National Cheese

Exchange 40-pound block Cheddar

cheese price, as reported by the

Department.

(5) Grade A butter price. Grade A

butter price means the simple average

for the month of the Chicago Mercantile

Exchange Grade A butter price, as

reported by the Department.

(c) Determine the amounts by which

the gross value per hundredweight of

milk used to manufacture butter-nonfat

dry milk and the gross value per

hundredweight of milk used to

manufacture Cheddar cheese for the

current month exceed or are less than

the respective gross values for the

preceding month.

(d) Compute weighting factors to be

applied to the changes in gross values

determined pursuant to paragraph (c) of

this section by determining the relative

proportion that the data included in

each of the following paragraphs is of

the total of the data represented in

paragraphs (d)(1) and (d)(2) of this

section:

(1) Combine the total nonfat dry milk

production for the States of Minnesota

and Wisconsin, as reported by the

Department, for the most recent

preceding period, and divide by the

annual yield factor for nonfat dry milk,

8.07, to determine the quantity (in

hundredweights) of milk used in the

production of butter-nonfat dry milk;

and

(2) Combine the total American

cheese production for the States of

Minnesota and Wisconsin, as reported

by the Department, for the most recent

preceding period, and divide by the

annual yield factor for Cheddar cheese,

9.87, to determine the quantity (in

hundredweights) of milk used in the

production of American cheese.

(e) Compute a weighted average of the

changes in gross values per

hundredweight of milk determined

pursuant to paragraph (c) of this section

in accordance with the relative

proportions of milk determined

pursuant to paragraph (d) of this

section.

§ 1007.52 Plant location adjustments for

handlers.

(a) For milk received at a plant from

producers or a handler described in

§ 1007.9(c) and which is classified as

Class I milk without movement in bulk

form to a pool distributing plant at

which a higher Class I price applies, the

price specified in § 1007.50(a) shall be

adjusted by the amount stated in

paragraphs (a) (1) through (6) of this

section for the location of such plant:

(1) For a plant located within one of

the zones set forth in § 1007.2, the

adjustment (cents per hundredweight)

shall be as follows:

Zone 1 ............................... Minus 53.

Zone 2 ............................... Minus 48.

Zone 3 ............................... Minus 38.

Zone 4 ............................... Minus 31.

Zone 5 ............................... Minus 25.

Zone 6 ............................... Minus 10.

Zone 7 ............................... No adjustment.

Zone 8 ............................... Plus 10.

Zone 9 ............................... Plus 20.

Zone 10 ............................. Plus 32.

Zone 11 ............................. Plus 50.

Zone 12 ............................. Plus 57.

(2) For a plant located in that portion

of the Tennessee Valley marketing area

that is within the State of Georgia, the

adjustment shall be minus 25 cents.

(3) For a plant located in the Missouri

counties of Dunklin or Pemiscot, the

adjustment shall be minus 53 cents.

(4) For a plant located in the Texas

counties of Bowie or Cass, the

adjustment shall be zero.

(5) For a plant located within another

Federal order marketing area, other than

in those counties specified in

paragraphs (a) (2), (3), and (4) of this

section, the adjustment shall be

determined by subtracting the Class I

differential price in Zone 7 of this order

from the Class I differential price,

adjusted for the plant’s location, under

such other Federal order.

(6) For a plant located outside the

areas described in paragraphs (a) (1)

through (5) of this section, the

adjustment shall be computed by

multiplying 2.5 cents per 10 miles, or

fraction thereof (by the shortest hardsurfaced highway distance as

determined by the market
29448 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

administrator), from the nearer of

Shreveport, Louisiana; Little Rock,

Arkansas; Memphis, Tennessee;

Jackson, Tennessee; Nashville,

Tennessee; or Atlanta, Georgia, and

subtracting that figure from the location

adjustment applicable at Shreveport,

Little Rock, Memphis, Jackson,

Nashville, or Atlanta, as the case may

be.

(b) For fluid milk products transferred

in bulk form from a pool plant to a pool

distributing plant at which a higher

Class I price applies and which are

classified as Class I milk, the Class I

price shall be the Class I price at the

transferee-plant subject to a location

adjustment credit for the transferorplant which shall be determined by the

market administrator for skim milk and

butterfat, respectively, as follows:

(1) Subtract from the pounds of skim

milk remaining in Class I at the

transferee-plant after the computations

pursuant to § 1007.44(a)(12) plus the

pounds of skim milk in receipts of

concentrated fluid milk products from

other pool plants that are assigned to

Class I use, an amount equal to:

(i) The pounds of skim milk in

receipts of milk at the transferee-plant

from producers and handlers described

in § 1007.9(c); and

(ii) The pounds of skim milk in

receipts of packaged fluid milk products

from other pool plants;

(2) Assign any remaining pounds of

skim milk in Class I at the transfereeplant to the skim milk in receipts of

fluid milk products from other pool

plants, first to the transferor-plants at

which the highest Class I price applies

and then to other plants in sequence

beginning with the plant at which the

next highest Class I price applies;

(3) Compute the total amount of

location adjustment credits to be

assigned to transferor-plants by

multiplying the hundredweight of skim

milk assigned pursuant to paragraph

(b)(2) of this section to each transferorplant at which the Class I price is lower

than the Class I price applicable at the

transferor-plant and the transferee-plant,

and add the resulting amounts;

(4) Assign the total amount of location

adjustment credits computed pursuant

to paragraph (b)(3) of this section to

those transferor-plants that transferred

fluid milk products containing skim

milk classified as Class I milk pursuant

to § 1007.42(a) and at which the

applicable Class I price is less than the

Class I price at the transferee-plant, in

sequence beginning with the plant at

which the highest Class I price applies.

Subject to the availability of such

credits, the credit assigned to each plant

shall be equal to the hundredweight of

such Class I skim milk multiplied by the

adjustment rate determined pursuant to

paragraph (b)(3) of this section for such

plant. If the aggregate of this

computation for all plants having the

same adjustment as determined

pursuant to paragraph (b)(3) of this

section exceeds the credits that are

available to those plants, such credits

shall be prorated to the volume of skim

milk in Class I in transfers from such

plants; and

(5) Location adjustment credit for

butterfat shall be determined in

accordance with the procedure outlined

for skim milk in paragraphs (b) (1)

through (4) of this section.

(c) The market administrator shall

determine and publicly announce the

zone location of each plant of each

handler. The market administrator shall

notify the handler on or before the first

day of any month in which a change in

a plant location zone will apply.

(d) The Class I price applicable to

other source milk shall be adjusted at

the rates set forth in paragraph (a) of this

section, except that the adjusted Class I

price shall not be less than the Class III

price.

§ 1007.53 Announcement of class prices.

The market administrator shall

announce publicly on or before the fifth

day of each month the Class I price and

Class II prices for the following month,

and the Class III and Class III–A prices

for the preceding month.

§ 1007.54 Equivalent price.

If for any reason a price or pricing

constituent required by this part for

computing class prices or for other

purposes is not available as prescribed

in this part, the market administrator

shall use a price or pricing constituent

determined by the Secretary to be

equivalent to the price or pricing

constituent that is required.

Uniform Prices

§ 1007.60 Handler’s value of milk for

computing the uniform price.

For the purpose of computing the

uniform price, the market administrator

shall determine for each month the

value of milk of each handler with

respect to each of the handler’s pool

plants and of each handler described in

§ 1007.9 (b) and (c) with respect to milk

that was not received at a pool plant as

follows:

(a) Multiply the pounds of producer

milk and milk received from a handler

described in § 1007.9(c) that were

classified in each class pursuant to

§§ 1007.43(a) and 1007.44(c) by the

applicable class prices, and add the

resulting amounts;

(b) Add the amounts obtained from

multiplying the pounds of overage

subtracted from each class pursuant to

§ 1007.44(a)(14) and the corresponding

step of § 1007.44(b) by the respective

class prices, as adjusted by the butterfat

differential specified in § 1007.74, that

are applicable at the location of the pool

plant;

(c) Add the amount obtained from

multiplying the difference between the

Class III price for the preceding month

and the Class I price applicable at the

location of the pool plant or the Class

II price, as the case may be, for the

current month by the hundredweight of

skim milk and butterfat subtracted from

Class I and Class II pursuant to

§ 1007.44(a)(9) and the corresponding

step of § 1007.44(b);

(d) Add the amount obtained from

multiplying the difference between the

Class I price applicable at the location

of the pool plant and the Class III price

by the hundredweight of skim milk and

butterfat assigned to Class I pursuant to

§ 1007.43(d) and the hundredweight of

skim milk and butterfat subtracted from

Class I pursuant to § 1007.44(a)(7) (i)

through (iv) and the corresponding step

of § 1007.44(b), excluding receipts of

bulk fluid cream products from an other

order plant and bulk concentrated fluid

milk products from pool plants, other

order plants, and unregulated supply

plants;

(e) Add the amount obtained from

multiplying the difference between the

Class I price applicable at the location

of the transferor-plant and the Class III

price by the hundredweight of skim

milk and butterfat subtracted from Class

I pursuant to § 1007.44(a)(7) (v) and (vi)

and the corresponding step of

§ 1007.44(b);

(f) Add the amount obtained from

multiplying the Class I price applicable

at the location of the nearest

unregulated supply plants from which

an equivalent volume was received by

the pounds of skim milk and butterfat

in receipts of concentrated fluid milk

products assigned to Class I pursuant to

§ 1007.43(d) and § 1007.44(a)(7)(i) and

the pounds of skim milk and butterfat

subtracted from Class I pursuant to

§ 1007.44(a)(11) and the corresponding

step of § 1007.44(b), excluding such

skim milk and butterfat in receipts of

fluid milk products from an unregulated

supply plant to the extent that an

equivalent amount of skim milk or

butterfat disposed of to such plant by

handlers fully regulated under any

Federal milk order is classified and

priced as Class I milk and is not used

as an offset for any other payment

obligation under any order;
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29449

(g) Subtract, for reconstituted milk

made from receipts of nonfluid milk

products, an amount computed by

multiplying $1.00 (but not more than

the difference between the Class I price

applicable at the location of the pool

plant and the Class III price) by the

hundredweight of skim milk and

butterfat contained in receipts of

nonfluid milk products that are

allocated to Class I use pursuant to

§ 1007.43(d);

(h) Exclude, for pricing purposes

under this section, receipts of nonfluid

milk products that are distributed as

labeled reconstituted milk for which

payments are made to the producersettlement fund of another order under

§ 1007.76 (a)(5) or (c); and

(i) For pool plants that transfer bulk

concentrated fluid milk products to

other pool plants and other order plants,

add or subtract the amount per

hundredweight of any class price

change from the previous month that

results from any inventory

reclassification of bulk concentrated

fluid milk products that occurs at the

transferee plant. Any such applicable

class price change shall be applied to

the plant that used the concentrated

milk in the event that the concentrated

fluid milk products were made from

bulk unconcentrated fluid milk

products received at the plant during

the prior month.

§ 1007.61 Computation of uniform price

(including weighted average price and

uniform prices for base and excess milk).

(a) The market administrator shall

compute the weighted average price for

each month and the uniform price for

each month of June through January per

hundredweight of milk of 3.5 percent

butterfat content as follows:

(1) Combine into one total the values

computed pursuant to § 1007.60 for all

handlers who filed the reports

prescribed in § 1007.30 for the month

and who made payments pursuant to

§ 1007.71 for the preceding month;

(2) Add not less than one-half the

unobligated balance in the producersettlement fund;

(3) Add an amount equal to the total

value of the minus adjustments and

subtract an amount equal to the total

value of the plus adjustments computed

pursuant to § 1007.75;

(4) 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

§ 1007.60(f); and

(5) Subtract not less than 4 cents nor

more than 5 cents per hundredweight.

The resulting figure, rounded to the

nearest cent, shall be the weighted

average price for each month and the

uniform price for the months of June

through January.

(b) For each month of February

through May, the market administrator

shall compute the uniform prices per

hundredweight for base milk and for

excess milk, each of 3.5 percent

butterfat content, as follows:

(1) Compute the total value of excess

milk for all handlers included in the

computations pursuant to paragraph

(a)(1) of this section as follows:

(i) Multiply the hundredweight

quantity of excess milk that does not

exceed the total quantity of such

handlers’ producer milk assigned to

Class III–A by the Class III–A price:

(ii) Multiply the remaining

hundredweight quantity of excess milk

that does not exceed the total quantity

of such handlers’ producer milk

assigned to Class III by the Class III

price:

(iii) Multiply the remaining

hundredweight quantity of excess milk

that does not exceed the total quantity

of such handlers’ producer milk

assigned to Class II by the Class II price:

(iv) Multiply the remaining

hundredweight quantity of excess milk

by the Class I price; and

(v) Add together the resulting

amounts;

(2) Divide the total value of excess

milk obtained in paragraph (b)(1) of this

section by the total hundredweight of

such milk and adjust to the nearest cent.

The resulting figure shall be the uniform

price for excess milk;

(3) From the amount resulting from

the computations pursuant to

paragraphs (a)(1) through (a)(3) of this

section subtract an amount computed by

multiplying the hundredweight of milk

specified in paragraph (a)(4)(ii) of this

section by the weighted average price;

(4) Subtract the total value of excess

milk determined by multiplying the

uniform price obtained in paragraph

(b)(2) of this section times the

hundredweight of excess milk from the

amount computed pursuant to

paragraph (b)(3) of this section;

(5) Divide the amount calculated

pursuant to paragraph (b)(4) of this

section by the total hundredweight of

base milk included in these

computations; and

(6) Subtract not less than 4 cents nor

more than 5 cents from the price

computed pursuant to paragraph (b)(5)

of this section. The resulting figure,

rounded to the nearest cent, shall be the

uniform price for base milk.

§ 1007.62 Announcement of uniform price

and butterfat differential.

The market administrator shall

announce publicly on or before:

(a) The fifth day after the end of each

month the butterfat differential for such

month; and

(b) The 11th day after the end of the

month the applicable uniform price(s)

pursuant to § 1007.61 for such month.

Payments for Milk

§ 1007.70 Producer-settlement fund.

The market administrator shall

establish and maintain a separate fund

known as the producer-settlement fund

into which the market administrator

shall deposit all payments made by

handlers pursuant to §§ 1007.71,

1007.76, and 1007.77, and out of which

the market administrator shall make all

payments pursuant to §§ 1007.72 and

1007.77. Payments due any handler

shall be offset by any payments due

from such handler.

§ 1007.71 Payments to the producersettlement fund.

(a) On or before the 12th day after the

end of the month, each handler shall

pay to the market administrator the

amount, if any, by which the amount

specified in paragraph (a)(1) of this

section exceeds the amount specified in

paragraph (a)(2) of this section:

(1) The total value of milk of the

handler for such month as determined

pursuant to § 1007.60.

(2) The sum of:

(i) The value at the uniform price(s)

as adjusted pursuant to § 1007.75, of

such handler’s receipts of producer milk

and milk received from handlers

pursuant to § 1007.9(c); and

(ii) The value at the weighted average

price applicable at the location of the

plant from which received of other

source milk for which a value is

computed pursuant to § 1007.60(f).

(b) On or before the 25th day after the

end of the month each person who

operated an other order plant that was

regulated during such month under an

order providing for individual-handler

pooling shall pay to the market

administrator an amount computed as

follows:

(1) Determine the quantity of

reconstituted skim milk in filled milk in

route disposition from such plant in the

marketing area which was allocated to

Class I at such plant. If there is route

disposition from such plant in

marketing areas regulated by two or

more marketwide pool orders, the

reconstituted skim milk allocated to

Class I shall be prorated to each order

according to such route disposition in

each marketing area; and
29450 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

(2) Compute the value of the

reconstituted skim milk assigned in

paragraph (b)(1) of this section to route

disposition in this marketing area by the

difference between the Class I price

under this part applicable at the

location of the other order plant (but not

to be less than the Class III price) and

the Class III price.

§ 1007.72 Payments from the producersettlement fund.

On or before the 13th day after the

end of each month, the market

administrator shall pay to each handler

the amount, if any, by which the

amount computed pursuant to

§ 1007.71(a)(2) exceeds the amount

computed pursuant to § 1007.71(a)(1). If,

at such time, the balance in the

producer-settlement fund is insufficient

to make all payments pursuant to this

section, the market administrator shall

reduce uniformly such payments and

shall complete such payments as soon

as the funds are available.

§ 1007.73 Payments to producers and to

cooperative associations.

(a) Each handler shall pay each

producer for producer milk for which

payment is not made to a cooperative

association pursuant to paragraph (b) of

this section, as follows:

(1) On or before the 26th day of each

month, for milk received during the first

15 days of the month from such

producer who has not discontinued

delivery of milk to such handler before

the 23rd day of the month at not less

than the Class III price for the preceding

month or 90 percent of the weighted

average price for the preceding month,

whichever is higher, less proper

deductions authorized in writing by the

producer. If the producer had

discontinued shipping milk to such

handler before the 25th day of any

month, or if the producer had no

established base upon which to receive

payments during the base paying

months of February through May, the

applicable rate for making payments to

such producer shall be the Class III

price for the preceding month; and

(2) On or before the 15th day of the

following month, an amount equal to

not less than the uniform price(s), as

adjusted pursuant to §§ 1007.74 and

1007.75, multiplied by the

hundredweight of milk or base milk and

excess milk received from such

producer during the month, subject to

the following adjustments:

(i) Less payments made to such

producer pursuant to paragraph (a)(1) of

this section;

(ii) Less deductions for marketing

services made pursuant to § 1007.86;

(iii) Plus or minus adjustments for

errors made in previous payments made

to such producers; and

(iv) Less proper deductions

authorized in writing by such producer.

(3) If a handler has not received full

payment from the market administrator

pursuant to § 1007.72 by the 15th day of

such month, such handler may reduce

payments pursuant to this paragraph to

producers on a pro rata basis but not by

more than the amount of the

underpayment. Such payments shall be

completed thereafter not later than the

date for making payments pursuant to

this paragraph next following after

receipt of the balance due from the

market administrator.

(b) On or before the day prior to the

dates specified in paragraph (a) (1) and

(2) of this section, each handler shall

make payment to the cooperative

association for milk from producers who

market their milk through the

cooperative association and who have

authorized the cooperative to collect

such payments on their behalf an

amount equal to the sum of the

individual payments otherwise payable

for such producer milk pursuant to

paragraph (a) (1) and (2) of this section.

(c) If a handler has not received full

payment from the market administrator

pursuant to § 1007.72 by the 15th day of

such month, such handler may reduce

payments pursuant to paragraph (b) of

this section to such cooperative

association on a pro rata basis, prorating

such underpayment to the volume of

milk received from such cooperative

association in proportion to the total

milk received from producers by the

handler, but not by more than the

amount of the underpayment. Such

payments shall be completed in the

following manner:

(1) If the handler receives full

payment from the market administrator

by the 15th day of the month, the

handler shall make payment to the

cooperative association of the full value

of the underpayment on the 15th day of

the month;

(2) If the handler has not received full

payment from the market administrator

by the 15th day of the month, the

handler shall make payment to the

cooperative association of the full value

of the underpayment on or before the

date for making such payments

pursuant to this paragraph next

following after receipt of the balance

due from the market administrator.

(d) Each handler pursuant to

§ 1007.9(a) who receives milk from a

cooperative association as a handler

pursuant to § 1007.9(c), including the

milk of producers who are not members

of such association, and who the market

administrator determines have

authorized such cooperative association

to collect payment for their milk, shall

pay such cooperative for such milk as

follows:

(1) On or before the 25th day of the

month for milk received during the first

15 days of the month, not less than the

Class III price for the preceding month

or 90 percent of the weighted average

price for the preceding month,

whichever is higher; and

(2) On or before the 14th day of the

following month, not less than the

appropriate uniform price(s) as adjusted

pursuant to §§ 1007.74 and 1007.75, and

less any payments made pursuant to

paragraph (d)(1) of this section.

(e) If a handler has not received full

payment from the market administrator

pursuant to § 1007.72 by the 14th day of

such month, such handler may reduce

payments pursuant to paragraph (d) of

this section to such cooperative

association and complete such

payments for milk received from such

cooperative association in its capacity as

a handler pursuant to § 1007.9(c), in the

manner prescribed in paragraph (c) (1)

and (2) of this section.

(f) In making payments to producers

pursuant to this section, each handler

shall furnish each producer, except a

producer whose milk was received from

a handler described in § 1007.9(c), a

supporting statement in such form that

it may be retained by the recipient

which shall show:

(1) The month and identity of the

producer;

(2) The daily and total pounds and the

average butterfat content of producer

milk;

(3) For the months of February

through May the total pounds of base

milk received from such producer;

(4) The minimum rate(s) at which

payment to the producer is required

pursuant to this order;

(5) The rate(s) used in making the

payment if such rate(s) is (are) other

than the applicable minimum rate(s);

(6) The amount, or rate per

hundredweight, and nature of each

deduction claimed by the handler; and

(7) The net amount of payment to

such producer or cooperative

association.

§ 1007.74 Butterfat differential.

For milk containing more or less than

3.5 percent butterfat, the uniform prices

for base and excess milk shall be

increased or decreased, respectively, for

each one-tenth percent butterfat

variation from 3.5 percent by a butterfat

differential, rounded to the nearest onetenth cent, which shall be 0.138 times

the current month’s butter price less
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29451

0.0028 times the preceding month’s

average pay price per hundredweight, at

test, for manufacturing grade milk, in

Minnesota and Wisconsin, using the

‘‘base month’’ series, adjusted pursuant

to § 1007.51(a) through (e), as reported

by the Department. The butter price

means the simple average for the month

of the Chicago Mercantile Exchange,

Grade A butter price as reported by the

Department.

§ 1007.75 Plant location adjustments for

producers and on nonpool milk.

(a) The uniform price and the uniform

price for base milk shall be adjusted

according to the location of the plant at

which the milk was physically received

at the rates set forth in § 1007.52(a); and

(b) The weighted average price

applicable to other source milk shall be

adjusted at the rates set forth in section

§ 1007.52(a) applicable at the location of

the nonpool plant from which the milk

was received, except that the adjusted

weighted average price shall not be less

than the Class III price.

§ 1007.76 Payments by a handler

operating a partially regulated distributing

plant.

Each handler who operates a partially

regulated distributing plant shall pay on

or before the 25th day after the end of

the month to the market administrator

for the producer-settlement fund the

amount computed pursuant to

paragraph (a) of this section. If the

handler submits pursuant to

§§ 1007.30(b) and 1007.31(b) the

information necessary for making the

computations, such handler may elect to

pay in lieu of such payment the amount

computed pursuant to paragraph (b) of

this section:

(a) The payment under this paragraph

shall be an amount resulting from the

following computations:

(1) Determine the pounds of route

disposition in the marketing area from

the partially regulated distributing

plant;

(2) Subtract the pounds of fluid milk

products received at the partially

regulated distributing plant:

(i) As Class I milk from pool plants

and other order plants, except that

subtracted under a similar provision of

another Federal milk order; and

(ii) From another nonpool plant that

is not an other order plant to the extent

that an equivalent amount of fluid milk

products disposed of to such nonpool

plant by handlers fully regulated under

any Federal milk order is classified and

priced as Class I milk and is not used

as an offset for any payment obligation

under any order;

(3) Subtract the pounds of

reconstituted milk that are made from

nonfluid milk products and which are

then disposed of as route disposition in

the marketing area from the partially

regulated distributing plant;

(4) Multiply the remaining pounds by

the difference between the Class I price

and the weighted average price, both

prices to be applicable at the location of

the partially regulated distributing plant

(except that the Class I price and

weighted average price shall not be less

than the Class III price); and

(5) Add the amount obtained from

multiplying the pounds of labeled

reconstituted milk included in

paragraph (a)(3) of this section by the

difference between the Class I price

applicable at the location of the partially

regulated distributing plant less $1.00

(but not to be less than the Class III

price) and the Class III price. For any

reconstituted milk that is not so labeled,

the Class I price shall not be reduced by

$1.00. Alternatively, for such

disposition, payments may be made to

the producer-settlement fund of the

order regulating the producer milk used

to produce the nonfluid milk

ingredients at the difference between

the Class I price applicable under the

other order at the location of the plant

where the nonfluid milk ingredients

were processed (but not to be less than

the Class III price) and the Class III

price. This payment option shall apply

only if a majority of the total milk

received at the plant that processed the

nonfluid milk ingredients is regulated

under one or more Federal orders and

payment may only be made to the

producer-settlement fund of the order

pricing a plurality of the milk used to

produce the nonfluid milk ingredients.

This payment option shall not apply if

the source of the nonfluid ingredients

used in reconstituted fluid milk

products cannot be determined by the

market administrator.

(b) The payment under this paragraph

shall be the amount resulting from the

following computations:

(1) Determine the value that would

have been computed pursuant to

§ 1007.60 for the partially regulated

distributing plant if the plant had been

a pool plant, subject to the following

modifications:

(i) Fluid milk products and bulk fluid

cream products received at the partially

regulated distributing plant from a pool

plant or an other order plant shall be

allocated at the partially regulated

distributing plant to the same class in

which such products were classified at

the fully regulated plant;

(ii) Fluid milk products and bulk fluid

cream products transferred from the

partially regulated distributing plant to

a pool plant or an other order plant shall

be classified at the partially regulated

distributing plant in the class to which

allocated at the fully regulated plant.

Such transfers shall be computed to the

extent possible to those receipts at the

partially regulated distributing plant

from pool plants and other order plants

that are classified in the corresponding

class pursuant to paragraph (b)(1)(i) of

this section. Any such transfers

remaining after the above allocation

which are in Class I and for which a

value is computed for the handler

operating the partially regulated

distributing plant pursuant to § 1007.60

shall be priced at the uniform price (or

at the weighted average price if such is

provided) of the respective order

regulating the handling of milk at the

transferee plant, with such uniform

price adjusted to the location of the

nonpool plant (but not to be less than

the lowest class price of the respective

order), except that transfers of

reconstituted skim milk in filled milk

shall be priced at the lowest price class

of the respective order; and

(iii) If the operator of the partially

regulated distributing plant so requests,

the value of milk determined pursuant

to § 1007.60 for such handler shall

include, in lieu of the value of other

source milk specified in § 1007.60(f) less

the value of such other source milk

specified in § 1007.71(a)(2)(ii), a value

of milk determined pursuant to

§ 1007.60 for each nonpool plant that is

not an other order plant which serves as

a supply plant for such partially

regulated distributing plant by making

shipments to the partially regulated

distributed plant during the month

equivalent to the requirements of

§ 1007.7(b), subject to the following

conditions:

(A) The operator of the partially

regulated distributing plant submits

with its reports filed pursuant to

§§ 1007.30(b) and 1007.31(b) similar

reports for each such nonpool supply

plant;

(B) The operator of such nonpool

plant maintains books and records

showing the utilization of all skim milk

and butterfat received at such plant

which are made available if requested

by the market administrator for

verification purposes; and

(C) The value of milk determined

pursuant to § 1007.60 for such nonpool

supply plant shall be determined in the

same manner prescribed for computing

the obligation of such partially regulated

distributing plant; and

(2) From the partially regulated

distributing plant’s value of milk

computed pursuant to paragraph (b)(1)

of this section, subtract:
29452 Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations

(i) The gross payments by the operator

of the partially regulated distributing

plant, adjusted to a 3.5 percent butterfat

basis by the butterfat differential

specified in § 1007.74, for milk received

at the plant during the month that

would have been producer milk had the

plant been fully regulated;

(ii) If paragraph (b)(1)(iii) of this

section applies, the gross payments by

the operator of such nonpool supply

plant, adjusted to a 3.5 percent butterfat

basis by the butterfat differential

specified in § 1007.74, for milk received

at the plant during the month that

would have been producer milk if the

plant had been fully regulated; and

(iii) The payments by the operator of

the partially regulated distributing plant

to the producer-settlement fund of

another order under which such plant is

also a partially regulated distributing

plant and like payments by the operator

of the nonpool supply plant if paragraph

(b)(1)(iii) of this section applies.

(c) Any handler may elect partially

regulated distributing plant status for

any plant with respect to receipts of

nonfluid milk ingredients assigned to

Class I use under § 1007.43(d).

Payments may be made to the producersettlement fund of the order regulating

the producer milk used to produce the

nonfluid milk ingredients at the

difference between the Class I price

applicable under the other order at the

location of the plant where the nonfluid

milk ingredients were processed (but

not less than the Class III price) and the

Class III price. This payment option

shall apply only if a majority of the total

milk received at the plant that processed

the nonfluid milk ingredients is

regulated under one or more Federal

orders and payment may only be made

to the producer-settlement fund of the

order pricing a plurality of the milk

used to produce the nonfluid milk

ingredients. This payment option shall

not apply if the source of the nonfluid

ingredients used in reconstituted fluid

milk products cannot be determined by

the market administrator.

§ 1007.77 Adjustment of accounts.

Whenever audit by the market

administrator of any handler’s reports,

books, records, or accounts, or other

verification discloses errors resulting in

money due the market administrator

from a handler, or due a handler from

the market administrator, or due a

producer or cooperative association

from a handler, the market

administrator shall promptly notify

such handler of any amount so due and

payment thereof shall be made on or

before the next date for making

payments as set forth in the provisions

under which the error(s) occurred.

§ 1007.78 Charges on overdue accounts.

Any unpaid obligation due the market

administrator from a handler pursuant

to §§ 1007.71, 1007.76, 1007.77,

1007.78, 1007.85, and 1007.86 shall be

increased 1.5 percent each month

beginning with the day following the

date such obligation was due under the

order. Any remaining amount due shall

be increased at the same rate on the

corresponding day of each month until

paid. The amounts payable pursuant to

this section shall be computed monthly

on each unpaid obligation and shall

include any unpaid charges previously

made pursuant to this section. The late

charges shall be added to the respective

accounts to which due. For the purpose

of this section, any obligation that was

determined at a date later than

prescribed by the order because of a

handler’s failure to submit a report to

the market administrator when due

shall be considered to have been

payable by the date it would have been

due if the report had been filed when

due.

Administrative Assessment and

Marketing Service Deduction

§ 1007.85 Assessment for order

administration.

As each handler’s pro rata share of the

expense of administration of the order,

each handler shall pay to the market

administrator on or before the 15th day

after the end of the month 5 cents per

hundredweight or such lesser amount as

the Secretary may prescribe with respect

to:

(a) Receipts of producer milk

(including such handler’s own

production) other than such receipts by

a handler described in § 1007.9(c) that

were delivered to pool plants of other

handlers;

(b) Receipts from a handler described

in § 1007.9(c);

(c) Receipts of concentrated fluid milk

products from unregulated supply

plants and receipts of nonfluid milk

products assigned to Class I use

pursuant to § 1007.43(d) and other

source milk allocated to Class I pursuant

to § 1007.44(a) (7) and (11) and the

corresponding steps of § 1007.44(b),

except such other source milk that is

excluded from the computations

pursuant to § 1007.60 (d) and (f); and

(d) Route disposition in the marketing

area from a partially regulated

distributing plant that exceeds the skim

milk and butterfat subtracted pursuant

to § 1007.76(a)(2).

§ 1007.86 Deduction for marketing

services.

(a) Except as provided in paragraph

(b) of this section each handler, in

making payments to producers for milk

(other than milk of such handler’s own

production) pursuant to § 1007.73, shall

deduct 7 cents per hundredweight or

such lesser amount as the Secretary may

prescribe and shall pay such deductions

to the market administrator not later

than the 15th day after the month. Such

money shall be used by the market

administrator to verify or establish

weights, samples and tests of producer

milk and provide market information for

producers who are not receiving such

services from a cooperative association.

Such services shall be performed in

whole or in part by the market

administrator or an agent engaged by

and responsible to the market

administrator;

(b) In the case of producers for whom

a cooperative association that the

Secretary has determined is actually

performing the services set forth in

paragraph (a) of this section, each

handler shall make, in lieu of the

deduction specified in paragraph (a) of

this section, such deductions from the

payments to be made to such producers

as may be authorized by the

membership agreement or marketing

contract between such cooperative

association and such producers, and on

or before the 15th day after the end of

the month, pay such deductions to the

cooperative association rendering such

services accompanied by a statement

showing the amount of any such

deductions and the amount of milk for

which such deduction was computed

for each producer.

Base-Excess Plan

§ 1007.90 Base milk.

Base milk means the producer milk of

a producer in each month of February

through May that is not in excess of the

producer’s base multiplied by the

number of days in the month.

§ 1007.91 Excess milk.

Excess milk means the producer milk

of a producer in each month of February

through May in excess of the producer’s

base milk for the month, and shall

include all the producer milk in such

months of a producer who has no base.

§ 1007.92 Computation of base for each

producer.

(a) Subject to paragraph (c) of this

section, a base for each dairy farmer

who was a producer pursuant to

§ 1007.12 during one or more of the

immediately preceding months of July

through December shall be determined
Federal Register / Vol. 60, No. 106 / Friday, June 2, 1995 / Rules and Regulations 29453

by dividing the total pounds of producer

milk delivered by such producer during

each of those months by the number of

calendar days in the month, adding

together the four highest monthly

averages so computed, and dividing by

four. If a producer operated more than

one farm at the same time, a separate

computation of base shall be made for

each such farm.

(b) Any producer who delivered milk

to a nonpool plant that became a pool

plant after the beginning of the JulyDecember base-forming period shall be

assigned a base calculated as if the plant

were a pool plant during such entire

base-forming period. A base thus

assigned shall not be transferable.

(c) A person who was unable to

qualify as a producer during four or

more of the immediately preceding

months of July through December or

who did not have at least four complete

months of production, in either case for

one or more of the reasons specified in

this paragraph, may request a base

computation based upon a lesser

number of months by submitting to the

market administrator in writing on or

before February 1 a statement that

establishes to the satisfaction of the

market administrator that during four or

more of the months in the immediately

preceding July through December baseforming period the amount of milk

produced on such producer’s farm was

substantially reduced because of

conditions beyond the control of such

person as a result of:

(1) The loss by fire, windstorm, or

other natural disaster of a farm building

used in the production of milk on the

producer’s farm;

(2) Brucellosis, bovine tuberculosis or

other infectious diseases in the

producer’s milking herd as certified by

a licensed veterinarian; or

(3) A quarantine by a Federal or State

authority that prevented the dairy

farmer from supplying milk from the

farm of such producer to a plant.

§ 1007.93 Base rules.

(a) Except as provided in § 1007.92 (b)

and (c) and paragraph (b) of this section,

a base may be transferred in its entirety

or in amounts of not less than 300

pounds effective on the first day of the

month following the date on which such

application is received by the market

administrator. Base may be transferred

only to a person who is or will be a

producer by the end of the month that

the transfer is to be effective. A base

transfer to be effective on February 1 for

the month of February must be received

on or before February 15. Such

application shall be on a form approved

by the market administrator and signed

by the baseholder or the legal

representative of the baseholder’s estate.

If a base is held jointly, the application

shall be signed by all joint holders or

the legal representative of the estate of

any deceased baseholder.

(b) A producer who transferred base

on or after February 1 may not receive

by transfer additional base that would

be applicable during February through

May of the same year. A producer who

received base by transfer on or after

February 1 may not transfer a portion of

the base to be applicable during

February through May of the same year,

but may transfer the entire base.

(c) The base established by a

partnership may be divided between the

partners on any basis agreed to in

writing by them if written notification of

the agreed upon division of base by each

partner is received by the market

administrator prior to the first day of the

month in which such division is to be

effective.

(d) Two or more producers in a

partnership may combine their

separately established bases by giving

notice to the market administrator prior

to the first day of the month in which

such combination of bases is to be

effective.

§ 1007.94 Announcement of established

bases.

On or before January 31 of each year,

the market administrator shall calculate

a base for each person who was a

producer during one or more of the

preceding months of July through

December and shall notify each

producer and the handler receiving milk

from such dairy farmer of the base

established by the producer. If requested

by a cooperative association, the market

administrator shall notify the

cooperative association of each

producer-member’s base.

PARTS 1093, 1094, 1096, AND 1108

[REMOVED AND RESERVED]

2. Parts 1093, 1094, 1096, and 1108

are removed and reserved.

Dated: May 23, 1995.

Patricia Jensen,

Acting Assistant Secretary, Marketing and

Regulatory Programs.

[FR Doc. 95–13160 Filed 6–1–95; 8:45 am]

BILLING CODE 3410–02–P