11194 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Parts 1000, 1005, 1006 and 1007 

[AMS–DA–07–0059; AO–388–A22; AO–356– 

A43 and AO–366–A51; Docket No. DA–07– 

03–A] 

Milk in the Appalachian, Florida and 

Southeast Marketing Areas; Tentative 

Decision and Opportunity To File 

Written Exceptions on Proposed 

Amendments to Tentative Marketing 

Agreements and to Orders 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Proposed rule; tentative partial 

decision. 

SUMMARY: This decision proposes to 

adopt on an interim final and 

emergency basis proposals that adjust 

the Class I pricing surface of the 

Appalachian, Southeast and Florida 

Federal milk marketing orders. In 

addition, this decision proposes to 

amend certain features of the diversion 

limit, touch-base standards and 

transportation credit provisions for the 

Appalachian and Southeast Federal 

milk marketing orders. Other proposals 

seeking to increase the maximum 

administrative assessment for the 

Appalachian, Florida and Southeast 

marketing orders is addressed in a 

separate decision. This decision 

requires determining if producers 

approve the issuance of the amended 

orders on an interim basis. 

DATES: Comments must be submitted on 

or before April 29, 2008. 

ADDRESSES: Comments (six copies) 

should be filed with the Hearing Clerk, 

United States Department of 

Agriculture, STOP 9200-Room 1031, 

1400 Independence Avenue, SW., 

Washington, DC, 20250–1031. You may 

send your comments by the electronic 

process available at the Federal 

eRulemaking portal: http:// 

www.regulations.gov or by submitting 

comments to amsdairycomments@ 

usda.gov. Reference should be made to 

the title of the action and docket 

number. 

FOR FURTHER INFORMATION CONTACT: 

Gino M. Tosi, Associate Deputy 

Administrator, USDA/AMS/Dairy 

Programs, Order Formulation and 

Enforcement Branches, STOP 0231- 

Room 2971, 1400 Independence 

Avenue, SW., Washington, DC 20250– 

0231, (202) 690–1366, e-mail address: 

gino.tosi@usda.gov. 

SUPPLEMENTARY INFORMATION: This 

tentative decision proposes to 

immediately adopt amendments that: (1) 

Adjust the Class I pricing surface in 

each county within the geographical 

marketing areas of the Appalachian, 

Florida and Southeast marketing orders; 

(2) make diversion limit standards 

identical for the Appalachian and 

Southeast orders: 25 percent of 

deliveries to pool plants during the 

months of January, February, July, 

August, September, October and 

November, and 35 percent in the 

months of March, April, May, June and 

December; (3) reduce touch-base 

standards to one day each month for the 

Appalachian and Southeast orders; (4) 

add January and February as months 

when transportation credits are paid for 

the Appalachian and Southeast orders; 

(5) provide for the payment of 

transportation credits in the 

Appalachian and Southeast orders for 

full loads of supplemental milk; (6) 

provide more flexibility in the 

qualification requirements for 

supplemental milk producers to receive 

transportation credits for the 

Appalachian and Southeast orders; and 

(7) increase the monthly transportation 

credit assessment from $0.20 per cwt to 

$0.30 per cwt in the Southeast order. 

Other proposals seeking to increase the 

maximum administrative assessment for 

the Appalachian, Florida and Southeast 

orders are addressed in a separate 

decision. 

This administrative action is governed 

by the provisions of Sections 556 and 

557 of Title 5 of the United States Code 

and, therefore, is excluded from the 

requirements of Executive Order 12866. 

The amendments to the rules 

proposed herein have been reviewed 

under Executive Order 12988, Civil 

Justice Reform. They are not intended to 

have a retroactive effect. If adopted, the 

proposed amendments would not 

preempt any state or local laws, 

regulations, or policies, unless they 

present an irreconcilable conflict with 

this rule. 

The Agricultural Marketing 

Agreement Act of 1937, as amended (7 

U.S.C. 601–674) (AMAA), provides that 

administrative proceedings must be 

exhausted before parties may file suit in 

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

AMAA, any handler subject to an order 

may request modification or exemption 

from such order by filing with the 

Department of Agriculture (Department) 

a petition stating that the order, any 

provision of the order, or any obligation 

imposed in connection with the order is 

not in accordance with the law. A 

handler is afforded the opportunity for 

a hearing on the petition. After a 

hearing, the Department would rule on 

the petition. The AMAA 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 Department’s ruling on the 

petition, provided a bill in equity is 

filed not later than 20 days after the date 

of the entry of the ruling. 

Regulatory Flexibility Act and 

Paperwork Reduction Act 

In accordance with the Regulatory 

Flexibility Act (5 U.S.C. 601–612), the 

Agricultural Marketing Service has 

considered the economic impact of this 

action on small entities and has certified 

that this proposed rule would not have 

a significant economic impact on a 

substantial number of small entities. For 

the purpose of the Regulatory Flexibility 

Act, a dairy farm is considered a small 

business if it has an annual gross 

revenue of less than $750,000, and a 

dairy products manufacturer is a small 

business if it has fewer than 500 

employees. 

For the purposes of determining 

which dairy farms are small businesses, 

the $750,000 per year criterion was used 

to establish a marketing guideline of 

500,000 pounds per month. Although 

this guideline does not factor in 

additional monies that may be received 

by dairy producers, it should be an 

inclusive standard for most small dairy 

farmers. For purposes of determining a 

handler’s size, if the plant is part of a 

larger company operating multiple 

plants that collectively exceed the 500- 

employee limit, the plant will be 

considered a large business even if the 

local plant has fewer than 500 

employees. 

During May 2007, the time of the 

hearing, there were 2,744 dairy farmers 

pooled on the Appalachian order (Order 

5). For the Southeast order (Order 7), 

2,924 dairy farmers were pooled on the 

order. For the Florida order (Order 6), 

283 dairy farmers were pooled on the 

order. Of these, 2,612 dairy farmers in 

Order 5 (or 95.2 percent), 2,739 dairy 

farmers in Order 7 (or 94 percent) and 

153 dairy farmers in Order 6 (or 54 

percent) were considered small 

businesses. 

During May 2007, there were a total 

of 36 plants associated with the 

Appalachian order (22 fully regulated 

plants, 10 partially regulated plants, 2 

producer-handlers and 2 exempt 

plants). A total of 55 plants were 

associated with the Southeast order (33 

fully regulated plants, 9 partially 

regulated plants, 2 producer-handlers 

and 11 exempt plants). A total of 25 

plants were associated with the Florida 

order (13 fully regulated plants, 9 

partially regulated plants, 1 producerVerDate Aug<31>2005 18:00 Feb 28, 2008 Jkt 214001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\29FEP2.SGM 29FEP2

rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11195 

handler and 2 exempt plants). The 

number of plants meeting small 

business criteria under the Appalachian, 

Southeast and Florida orders were 8 (or 

22.2 percent), 18 (or 32.7 percent) and 

11 (or 44 percent), respectively. 

The amendments proposed to be 

adopted in this tentative decision 

provide for the temporary increase in 

Class I prices in the Appalachian, 

Southeast and Florida orders. The 

minimum Class I prices of the three 

southeastern orders, as with all other 

Federal milk marketing orders, are set 

by using the higher of an advance Class 

III or Class IV price as determined by 

the Department and adding a locationspecific differential, referred to as a 

Class I differential. Minimum Class I 

prices charged to regulated handlers are 

applied uniformly to both large and 

small entities. Class I price increases 

would generate higher marketwide pool 

values in all three southeastern orders 

by approximately $18–19 million for the 

Appalachian order, approximately $17.5 

million for the Southeast order and 

approximately $38 million for the 

Florida order. In estimating the impact 

on minimum prices paid to dairy 

farmers, blend prices will increase by 

approximately $0.26 per cwt for the 

Appalachian order, approximately $0.64 

per cwt for the Southeast order, and 

$1.19 per cwt to $1.22 per cwt for the 

Florida order. 

The amendments proposed to be 

adopted revise the Appalachian and 

Southeast orders by making the 

diversion limit standards for the orders 

identical—not to exceed 25 percent for 

the months of January, February, and 

July through November, and 35 percent 

for the months of March through June 

and for the month of December. 

Currently, the diversion limit standards 

of the Appalachian order for pool plants 

and cooperatives acting as handlers are 

not to exceed 25 percent for the months 

of July through November, and January 

and February; and 40 percent for the 

months of December and March through 

June. For the Southeast order, the 

current diversion limit standards for 

pool plants and cooperatives acting as 

handlers are not to exceed 33 percent 

during the months of July through 

December, and 50 percent in the months 

of January through June. 

In addition, the proposed 

amendments for adoption would make 

identical the daily touch-base standards 

of at least one day’s milk production 

each month of a dairy farmer in the 

Appalachian and Southeast orders. 

Currently, the Appalachian order has a 

touch-base standard of 6 days’

production in any month of July 

through December and not less than 2 

days’ production for the months of 

January through June. Currently, the 

Southeast order has a touch-base 

standard of not less than 10 days’

production for the months of July 

through December and not less than 4 

days’ production for the months of 

January through June. 

The changes proposed for adoption to 

the pooling standards serve to revise 

established criteria that determine those 

producers, producer milk and plants 

that have a reasonable association with 

and are consistently serving the fluid 

needs of the Appalachian and Southeast 

marketing areas. Criteria for pooling are 

established on the basis of performance 

levels that are considered adequate to 

meet the Class I needs and determine 

those producers who are eligible to 

share in the revenue that arises from the 

classified pricing of milk. The criteria 

for pooling are established without 

regard to the size of any dairy industry 

or entity. The criteria established are 

applied in an identical fashion to both 

large and small businesses and do not 

have any different economic impact on 

small entities as opposed to large 

entities. 

The proposed amendments for 

adoption add January and February to 

the months of July through December as 

months when transportation credits may 

be paid for the Appalachian and 

Southeast orders to those handlers who 

incur the costs of providing 

supplemental milk. The amendments 

also expand the payment of 

transportation credits for supplemental 

milk to include the full load of milk 

rather than the calculated Class I 

portion and provide more flexibility in 

the qualification requirements for 

supplemental milk producers to receive 

transportation credits for the 

Appalachian and Southeast orders. In 

addition, only the maximum monthly 

transportation credit assessment for the 

Southeast order is increased from the 

current $0.20 per cwt to $0.30 per cwt 

on all milk assigned to Class I use. The 

transportation credit provisions are 

applicable only to Appalachian and 

Southeast orders are applied in an 

identical fashion to both large and small 

businesses and will not have any 

different impact on those businesses 

producing manufactured milk products. 

The changes will not have a significant 

economic impact on a substantial 

number of small entities. 

The Agricultural Marketing Service is 

committed to complying with the EGovernment Act, to promote the use of 

the Internet and other information 

technologies to provide increased 

opportunities for citizen access to 

Government information and services, 

and for other purposes. 

This notice does not require 

additional information collection that 

needs clearance by the Office of 

Management and Budget (OMB) beyond 

currently approved information 

collection. The primary sources of data 

used to complete the forms are routinely 

used in most business transactions. 

Forms require only a minimal amount of 

information that can be supplied 

without data processing equipment or a 

trained statistical staff. Thus, the 

information collection and reporting 

burden is relatively small. Requiring the 

same reports for all handlers does not 

significantly disadvantage any handler 

that is smaller than the industry 

average. 

Interested parties were invited to 

submit comments on the probable 

regulatory and informational impact of 

this proposed rule on small entities. 

Prior Documents in This Proceeding 

Notice of Hearing: Issued May 3, 

2007; published May 8, 2007 (72 FR 

25986). 

Preliminary Statement 

Notice is hereby given of the filing 

with the Hearing Clerk of this tentative 

partial decision with respect to 

proposed amendments to the tentative 

marketing agreements and the orders 

regulating the handling of milk in the 

Appalachian and Southeast marketing 

areas. This notice is issued pursuant to 

the provisions of the Agricultural 

Marketing Agreement Act (AMAA) and 

the applicable rules of practice and 

procedure governing the formulation of 

marketing agreements and marketing 

orders (7 CFR part 900). 

Interested parties may file written 

exceptions to this decision with the 

Hearing Clerk, U.S. Department of 

Agriculture, STOP 9200—Room 1031, 

1400 Independence Avenue, SW., 

Washington DC 20250–9200, by April 

29, 2008. Six (6) copies of these 

exceptions should be filed. All written 

submissions made pursuant to this 

tentative partial decision will be made 

available for public inspection at the 

Office of the Hearing Clerk during 

regular business hours (7 CFR 1.27(b)). 

The hearing notice specifically 

invited interested persons to present 

evidence concerning the probable 

regulatory and informational impact of 

the proposals on small businesses. 

A public hearing was held upon 

proposed amendments to the marketing 

agreement and the orders regulating the 

handling of milk in the Appalachian, 

Southeast, and Florida marketing areas. 

The hearing was held, pursuant to the 


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11196 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

provisions of the Agricultural Marketing 

Agreement Act of 1937 (AMAA), as 

amended (7 U.S.C. 601–674), and the 

applicable rules of practice and 

procedure governing the formulation of 

marketing agreements and marketing 

orders (7 CFR Part 900). 

The proposed amendments set forth 

below are based on the record of a 

public hearing held in Tampa, Florida, 

on May 21–23, 2007, pursuant to a 

notice of hearing issued May 3, 2007, 

published May 8, 2007 (72 FR 25986). 

The material issues on the record of 

hearing relate to: 

1. Class I Prices—adjustments and 

pricing surface. 

2. Producer milk—diversion limit and 

touch-base standards. 

3. Transportation Credit Balancing 

Fund Provisions. 

4. Determination of whether 

emergency marketing conditions 

warrant the omission of a recommended 

decision and an opportunity to file 

written exceptions. 

Findings and Conclusions 

The proposals, published in the 

hearing notice as Proposals 1, 2 and 3, 

seeking to make various changes to the 

Appalachian, Southeast and Florida 

milk marketing orders (hereinafter these 

marketing areas and marketing orders 

will collectively be referred to as the 

southeastern marketing areas or orders 

as the case may be) are adopted 

immediately in this tentative decision. 

These adopted proposals form an 

integrated package of changes that 

simultaneously provide for: (1) The 

temporary increase in Class I prices and 

the Class I pricing surface in the three 

southeastern orders, and (2) for the 

Appalachian and Southeast orders—(a) 

more stringent diversion limit 

standards, (b) lower touch-base 

standards, and (c) other specific changes 

to both orders’ transportation credit 

balancing fund provisions. 

While the summary of testimony is 

presented as three separate material 

issues, the discussion and findings on 

all three material issues are provided 

after the summary of briefs. 

The minimum Class I prices of the 

three southeastern orders, as with all 

other Federal milk marketing orders, are 

set by using the higher of an advance 

Class III or Class IV price as determined 

by the Department and adding a 

location-specific differential, referred to 

as a Class I differential. The Class I 

differentials are location-specific by 

county and parish for all States of the 

48 contiguous United States. These 

Class I differentials are specified in 7 

CFR Section 1000.52. 

The diversion limit standards of the 

Appalachian and Southeast milk orders 

are described in the Producer milk 

definition of the orders (7 CFR 1005.13 

and 7 CFR 1007.13, respectively) and 

specify the maximum volume of milk 

that may be diverted to a nonpool plant 

and have the diverted milk pooled and 

priced under each respective order. 

Currently, the diversion limit standards 

of the Appalachian order for 

cooperatives acting as handlers (and 

pool plant operators that are not 

cooperatives) are not to exceed 25 

percent for the months of July through 

November, and January and February 

and 40 percent for the months of 

December and March through June. For 

the Southeast order, the current 

diversion limit standards for 

cooperatives acting as handlers (and 

pool plant operators who are not 

cooperatives) are not to exceed 33 

percent during the months of July 

through December and 50 percent in the 

months of January through June. As 

adopted herein, the diversion limit 

standards of both orders are made 

identical—not to exceed 25 percent for 

the months of January, February, and 

July through November and 35 percent 

for the months of March through June 

and for the month of December. This 

represents a modest tightening of the 

diversion limit standards for the 

Appalachian order and a significant 

tightening of the diversion limit 

standards for the Southeast order. 

This decision adopts identical daily 

touch-base standards of at least oneday’s milk production per month of a 

dairy farmer in order for the dairy 

farmer to be considered a producer 

under each respective order’s Producer 

milk definition and for making a 

producer’s milk eligible for diversion to 

nonpool plants. This represents a 

significant change from the current 

touch-base standards for the 

Appalachian order of 6 days’ production 

in any month of July through December 

and not less than 2 days’ production for 

the months of January through June, and 

for the Southeast order of not less than 

10 days’ production for the months of 

July through December and not less than 

4 days’ production for the months of 

January through June. 

Currently, only the Appalachian and 

Southeast orders of the three 

southeastern orders contain provisions 

for a transportation credit to partially 

offset handler costs of transporting 

supplemental milk for Class I use during 

certain times of the year from producers 

located outside of the two marketing 

areas. These producers are not part of 

the regular and consistent supply of 

Class I milk to the Appalachian and 

Southeast marketing areas. 

Transportation credit balancing funds 

were first established for the 

Appalachian and Southeast (or 

predecessor orders) in 1996 and operate 

independently of the producersettlement funds. A monthly per 

hundredweight (cwt) assessment is 

charged to Class I handlers on a yearround basis on the volume of milk 

assigned to Class I use at a rate of $0.15 

per cwt in the Appalachian order and 

$0.20 per cwt in the Southeast order. 

Payments from the transportation credit 

balancing fund are made during the 

months of July through December (when 

milk supplies are tightest) in both orders 

to those handlers who incur the costs of 

providing supplemental milk. The 

transportation credit balancing fund 

provisions of the two orders were 

amended on an interim basis in 

December 2006 (71 FR 62377). 

Changes adopted in this decision to 

the Appalachian and Southeast order 

transportation credit balancing fund 

provisions: (1) Extend the number of 

months in which transportation credit 

balancing funds may be paid from the 

current months of July through 

December to include the months of 

January and February, with the option 

of the month of June if requested, and 

approved by the Market Administrator; 

(2) expand the payment of 

transportation credits for supplemental 

milk to include the entire load of milk 

rather than the current calculated Class 

I utilization; (3) provide more flexibility 

in the qualification requirements for 

supplemental milk producers to receive 

transportation credits; and (4) increases 

the monthly transportation credit 

assessment rate from the current $0.20 

per cwt to $0.30 per cwt. for the 

Southeast order. 

1. Class I Prices—Adjustments and 

Pricing Surface 

A witness appearing on behalf of the 

proponents, Dairy Cooperative 

Marketing Association (DCMA), testified 

in support of temporarily increasing 

minimum Class I prices in the three 

southeastern milk marketing orders. The 

witness testified that all elements of 

their proposals for the three 

southeastern milk orders are offered as 

a ‘‘single package’’ to address the needs 

of all the southeastern region’s dairy 

industry stake holders and represents an 

integrated package of needed changes. It 

was the opinion of the witness that the 

supply of milk for fluid use in the 

southeastern marketing areas is 

threatened and that several 

simultaneous changes to the provisions 

of the three orders are needed to attract 


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a sufficient quantity of milk to meet the 

fluid needs of the markets. 

According to the witness, DCMA 

consists of nine Capper-Volstead 

cooperative members that include 

Arkansas Dairy Cooperative 

Association, Damascus, AR; Cooperative 

Milk Producers Association, Inc., 

Blackstone, VA; Dairy Farmers of 

America (DFA), Kansas City, MO; 

Dairymen’s Marketing Cooperative, Inc., 

Mt. Grove, MO; Lone Star Milk 

Producers, Inc., Windthorst, TX; 

Maryland & Virginia Milk Producers 

Cooperative Association, Inc. (MD–VA), 

Reston, VA; Select Milk Producers, Inc., 

Artesia, NM; Southeast Milk, Inc. (SMI), 

Belleview, FL; and Zia Milk Producers, 

Inc., Roswell, NM. The witness testified 

that each of the DCMA members 

marketed and pooled their milk in one 

or more of the three southeastern milk 

marketing order areas during 2006. 

According to the DCMA witness, 

during December 2006 members of 

DCMA pooled more than 87 percent of 

cooperative and non-member producer 

milk on the Appalachian order, more 

than 87 percent of the cooperative and 

non-member producer milk on the 

Southeast order, and more than 96 

percent of the cooperative and nonmember producer milk on the Florida 

order. 

The DCMA witness testified that their 

proposed changes to the Class I pricing 

surface better reflect the actual cost of 

transporting milk and the pattern in 

which milk produced outside of the 

marketing areas moves into the three 

marketing areas. According to the 

witness, the cost of procuring milk for 

fluid use for the southeast region has 

increased because local production is in 

serious decline and continues to decline 

at an increasing rate. The witness noted 

that the three southeastern orders 

collectively import more than one third 

of the region’s milk supply during the 

most deficit months of the year to cover 

the fluid milk needs. Fluid demand 

exceeds 300 million pounds of milk 

each month in the three southeastern 

marketing areas, the witness said. The 

witness characterized the economic 

situation of the dairy industry in the 

region as dire and marketing conditions 

as disorderly. The witness asserted that 

producers currently experience 

inequitable prices for their milk, that 

handlers have unequal costs, and that 

there are insufficient economic 

incentives for the procurement of milk 

supplies. 

The DCMA witness characterized the 

southeastern region as having rapid 

population growth that is expected to 

continue to increase. The witness 

indicated that the U.S. Census Bureau 

population growth estimates for the 

States of Alabama, Arkansas, Florida, 

Georgia, Mississippi, Louisiana, North 

Carolina, South Carolina, and Tennessee 

have collectively increased by 8.4 

percent from 2000 to 2006, while the 

population of the U.S. as a whole 

increased 6.2 percent. 

Using Market Administrator statistics 

on in-area milk production for the three 

southeastern marketing order areas, the 

DCMA witness contrasted population 

growth to the region’s milk production 

to demonstrate that the dairy industry is 

in serious decline. The witness said that 

during 2006 milk was delivered into the 

three southeastern orders from at least 

27 states. The witness explained that 

local in-area milk production (milk 

produced within the geographic 

marketing area boundaries) during 2006 

for both the Appalachian and Southeast 

areas supplied the entire Class I needs 

of these two areas only four months of 

the year and Florida’s in-state milk 

production was insufficient to supply 

the Class I needs in every month of 

2006. The witness estimated that the 

Appalachian and Southeast marketing 

areas are able to supply only about 76 

percent of the milk necessary to meet 

Class I, Class II and reserve demands, 

while in Florida, in-area producers are 

able to supply only about 66 percent of 

the milk necessary to meet Class I and 

reserve demands on an annual basis. 

The DCMA witness asserted that 

minimum Federal order Class I prices 

have increased only twice in the past 22 

years—as a part of the 1985 Farm Bill 

and as part of Federal milk order reform 

made effective in January 2000. 

Specifically, the witness related that the 

Class I differential for Atlanta increased 

from $2.30 to $3.08 per cwt in 1985 but 

was increased by only two cents to 

$3.10 in January 2000. According to the 

witness, under Federal order reform, 

some Class I differentials in distant milk 

surplus areas were increased more than 

in the milk-deficit regions of the 

southeast. 

The DCMA witness also was of the 

opinion that changes to the Class I 

pricing surface resulted in a flattened 

pricing surface and narrowed producer 

blend price differences between orders. 

The witness testified that such changes 

diminished the economic incentives to 

move milk within the southeastern 

marketing areas as well as to move milk 

into the deficit southeastern region of 

the U.S. According to the witness, 

minimum Class I price differences and 

returns to producers are simply not high 

enough to move milk into these deficit 

markets without substantial over-order 

prices. 

The DCMA witness explained that 

since 1986 diesel fuel prices have risen 

more rapidly than Class I differentials 

(and thus Class I prices) in the 

southeastern region. Relying on data of 

the Energy Information Administration 

(EIA) of the U.S. Department of Energy, 

the witness noted that the U.S. average 

diesel fuel price increased by 187 

percent from 1986 and 2006 (from $0.94 

per gallon to $2.07 per gallon). The 

witness compared this increase to the 

0.64 percent or $0.02 per cwt increase 

in the Class I differential for Atlanta 

since 1986. 

The DCMA witness testified that the 

slope of the Class I pricing surface 

should be changed to progressively 

increase Class I prices as milk moves to 

the east and south within the three 

marketing areas. The witness was of the 

opinion that changing the slope of the 

Class I price surface inside the three 

marketing areas in this way would 

better encourage milk to move within 

the two marketing areas. Additionally, 

the witness was of the opinion that 

pricing signals to producers would 

direct their supplies to the most milkdeficit portions of the regions. In this 

regard, the witness added that simply 

raising Class I prices uniformly 

throughout the three order marketing 

areas would not result in improved 

pricing signals to producers. 

The DCMA witness explained that in 

developing the proposed Class I price 

structure and adjustments to current 

Class I price levels, DCMA considered 

two alternatives. According to the 

witness, in one pricing alternative all 

the Class I price relationships between 

plants in the three southeastern orders 

could be retained. However, under this 

alternative, the witness explained, the 

Class I prices for the plants on the outer 

edges of the Appalachian and Southeast 

marketing area boundaries would 

increase considerably, resulting in 

significant changes in price 

relationships between those plants and 

plants regulated by adjoining Federal 

orders. 

The DCMA witness said that 

alternatively the slope of the Class I 

price surface within the three marketing 

areas could be altered to minimize 

plant-to-plant Class I price relationship 

changes. The witness testified that this 

approach would result in a pricing 

structure that better reflected actual 

milk movements from within and 

outside of the marketing areas. The 

witness pointed out that in either 

approach, plant-to-plant price 

relationships would change and that the 

method they chose provided the least 

change in plant-to-plant price 

relationships. 


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11198 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

The DCMA witness also stressed the 

need for the proposed Class I price 

adjustments to remain aligned with the 

Class I price structure in adjoining 

marketing areas. The witness said that 

the proposed Class I pricing surface 

outside of the three southeastern 

marketing areas would not be changed. 

The witness was of the opinion that the 

proposed Class I price adjustments are 

reasonably aligned with Class I prices in 

adjoining marketing areas. Through an 

analysis of plant-to-plant movements of 

packaged milk, the witness indicated 

that DCMA’s proposed Class I pricing 

structure provides pricing adjustments 

that are reasonable and improves the 

slope of the Class I pricing surface. 

The DCMA witness explained that 

both a most distant demand point and 

several supply locations were identified 

in developing the proposed Class I 

pricing surface. The witness indicated 

that Miami, Florida, was identified as 

the most distant demand point in the 

southeastern region from any alternative 

milk supply area. According to the 

witness, the five possible major supply 

locations and their distance to Miami 

were also identified. These locations 

included: Wayne County, Ohio; Jasper 

County, Indiana; Hopkins County, 

Texas; Lancaster County, Pennsylvania; 

and Franklin County, Pennsylvania. 

The witness indicated that of the five 

possible supply sources, Wayne County, 

Ohio, was determined as the least cost 

supply location with a calculated Class 

I price adjustment of $6.14 per cwt at 

Miami, Florida. The witness testified 

that Class I price adjustments were 

progressively adjusted to smaller and 

smaller Class I price adjustment values 

as plant location values in the 

southeastern region were adjusted by 

their distance from the supply locations. 

According to the DCMA witness, the 

plant-to-plant cost of moving packaged 

milk was analyzed. The witness testified 

that successive movements of packaged 

fluid milk from the outer edge of the 

Appalachian and Southeast marketing 

areas towards Miami, Florida, were 

analyzed. As with bulk milk 

movements, the witness explained, at 

each plant location the minimum cost of 

moving packaged milk was determined 

and compared to the minimum costs of 

moving bulk milk. The witness 

concluded that the bulk and plant-toplant packaged milk movements were 

very similar. 

The DCMA witness testified that the 

calculated Class I pricing adjustments 

were re-adjusted so that plants located 

near to each other would have a similar 

Class I price adjustment. The witness 

also acknowledged that the proposed 

pricing structure could not maintain 

current Class I price relationships 

because the current Class I price surface 

does not reflect actual hauling costs. 

According to the witness, the west-toeast proposed increase in Class I price 

adjustments reflects higher hauling 

costs. 

The DCMA witness characterized the 

proposed adjustments to the calculated 

Class I price surface as being the result 

of ‘‘smoothing.’’ The witness explained 

that deviation from the calculated Class 

I price adjustment represents factoring 

best professional judgment in assuring 

that plants located near each other have 

the same Class I price adjustment and 

the need to maintain alignment with 

Class I prices in adjoining marketing 

areas. 

According to the DCMA witness, the 

proposed adjustments for plant 

locations regulated by the Appalachian 

order would increase in the range of 

$0.10 per cwt to $1.00 per cwt; plants 

regulated by the Southeast order would 

increase in the range of $0.10 per cwt 

to $1.15 per cwt; and between $1.30 per 

cwt to $1.70 per cwt for plants regulated 

by the Florida order. 

Relying on Market Administrator 

data, the DCMA witness concluded that 

the proposed Class I price increases 

would generate higher marketwide pool 

values in all three southeastern orders. 

According to the witness, the estimated 

annual increase of the Appalachian 

order pool for 2004, 2005 and 2006 

resulting from the proposed Class I 

prices alone would have totaled $19.3 

million, $18.6 million and $18.3 

million, respectively. For the Southeast 

order, the witness said, the annual pool 

value increase would have totaled $16.8 

million, $17.1 million and $17.7 

million, respectively. For the Florida 

order, the witness said, the annual 

increase in pool value would have 

totaled $36.4 million, $38.3 million and 

$39.2 million, respectively. In 

estimating the impact on minimum 

prices paid to dairy farmers, the witness 

said that average annual minimum 

uniform prices (as announced at current 

locations) would have been increased by 

approximately $0.25 per cwt to $0.26 

per cwt for the Appalachian order, 

approximately $0.64 per cwt higher for 

the Southeast order, and $1.19 per cwt 

to $1.22 per cwt higher for the Florida 

order. 

The DCMA witness acknowledged 

and explained that changes in Class I 

price relationships between plant 

locations resulting from any changed 

Class I price surface would be 

inevitable. In this regard, the witness 

asserted that the price adjustment 

differences between plant locations 

under the DCMA proposal would not 

exceed the cost of moving Class I fluid 

milk products and therefore would not 

result in the uneconomic movement of 

milk. 

The DCMA witness concluded by 

testifying that orderly marketing would 

be improved with a Class I price 

structure that is more reflective of the 

true hauling costs to supply the milkdeficit southeastern region. The witness 

urged that the proposed Class I price 

adjustments and pricing surface be 

adopted immediately. The witness 

reiterated that the proposed Class I price 

adjustments be temporarily adopted 

pending any system-wide changes to the 

Class I differential level and pricing 

surface. 

A total of 11 dairy farmers whose milk 

is pooled on at least one of the three 

southeastern orders testified at the 

hearing in support of DCMA’s package 

of proposals but suggested 

modifications on how the package 

should be changed. 

Three of the dairy farmers who 

testified were cooperative members of 

MD-VA, DFA and SMI (cooperatives 

previously described as member 

organizations of DCMA). These 

witnesses testified that the dairy 

industry in the southeastern region is in 

need of changes to the three marketing 

orders to respond to the decline in 

regional milk production. Their 

testimonies joined that of the DCMA 

witness supporting the DCMA package 

of proposals. 

A dairy farmer whose milk is 

marketed on the Southeast and Florida 

marketing orders testified on behalf of 

Cobblestone Milk Producers, Inc. and 

Mountain View Farms of Virginia in 

limited support of the Class I price 

surface feature of DCMA’s package of 

proposals provided certain 

modifications were made. This witness 

agreed with proponents concerning the 

decline of milk production in the 

southeastern region and the need to 

import supplemental milk supplies. 

According to the witness, lower 

producer pay prices in the southeastern 

region have led to rapidly declining 

production that is not being replaced by 

new farms or the expansion of existing 

farms. It was the opinion of this witness 

that the projected increases in producer 

pay prices arising from the proposed 

increase in Class I prices would not be 

enough to affect production trends in 

the southeastern region. The witness 

expressed concern that Class I 

processors would demand their overorder premiums be lowered to 

compensate for increases in the three 

orders’ minimum Class I prices. The 

witness requested that the proposed 

Class I price adjustments for the 


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Appalachian and Southeast marketing 

areas be increased but did not offer 

specific amounts. 

Four dairy farmers from North 

Carolina testified in general support of 

the proposed Class I price adjustments. 

Three of the witnesses represented 

organizations that were part of the 

Southeast Producers Steering 

Committee (SPSC), whose members 

include North Carolina Dairy Producers 

Association, Georgia Milk Producers 

Association, Upper South Milk 

Producers Association, Kentucky Dairy 

Development Council (KDDC), North 

Carolina Department of Agriculture and 

Consumer Services, and the North 

Carolina Farm Bureau Federation. All 

four witnesses were of the opinion that 

the proposed Class I price adjustments 

would not be adequate to increase 

prices paid to dairy farmers in order to 

stem the decline of milk production in 

the southeastern region. The witnesses 

were of the opinion that additional 

efforts should be made to enhance local 

milk production. One dairy farmer 

witness testifying on behalf of the 

KDDC, said that other adjustments 

needed to be made to the proposed 

Class I price adjustments because 

Kentucky dairy farmers would benefit 

less from the proposed adjustments than 

dairy farmers located in the Southeast 

and Florida marketing areas. Another 

North Carolina dairy farmer witness 

offered the opinion that Appalachian 

producers would need to receive at least 

a $1.00 to $1.50 per cwt increase in their 

mailbox price to stimulate local milk 

production. A third North Carolina 

dairy farmer witness stressed that more 

emphasis should be made to seek 

solutions that would increase local milk 

production rather than seeking better 

ways to import milk into the region 

from locations located far from the 

region. Another dairy farmer, also from 

North Carolina, expressed concern that 

over-order premiums might fall because 

of the proposed Class I prices 

adjustments. In addition, a SPSC 

witness, as well as others, called for a 

comprehensive study to identify 

problems and alternatives to the 

proposals regarding the decline of milk 

production in the southeastern region. 

A witness appearing on behalf of 

National Dairy Holdings (NDH) testified 

in limited opposition of the Class I price 

adjustments of the DCMA package. 

According to the witness, NDH is a 

national dairy processor with facilities 

located throughout the country. The 

witness indicated no specific opposition 

to Class I price increases but 

conditioned such increases on the fair 

distribution of the revenue to producers 

in the southeastern region. While the 

witness testified that NDH has no 

difficulty procuring milk for its plants 

located in the southeastern region, the 

witness acknowledged other testimony 

that identified milk production 

problems of the southeastern region and 

that the region’s producers are in need 

of relief. The witness expressed concern 

on how the proposals would impact 

NDH’s wholesale packaged milk sales. 

The witness also suggested that issues 

discussed at the hearing could be 

addressed by utilizing a point-of-sale or 

plant-point pricing method. 

A witness appearing on behalf of the 

Kroger Company (Kroger) testified in 

opposition to the proposed Class I price 

adjustments for the Appalachian and 

Southeast marketing orders. According 

to the witness, Kroger operates four 

fluid distributing plants that are 

regulated by the Appalachian and 

Southeast orders (Winchester Farms, 

Westover Dairy, Heritage Farms Dairy 

and Centennial Farms Dairy). The 

opinion of the witness was that the 

proposed Class I price adjustments 

would disrupt traditional pricing 

relationships which were established by 

the 1985 Farm Bill and would generate 

competitive discrepancies with 

adjoining markets. 

The Kroger witness testified that the 

proposed Class I price adjustments 

would place their plants in an 

unacceptable competitive situation with 

each other in the Appalachian and 

Southeast marketing areas. Specifically, 

the witness requested that the Class I 

price adjustments for Louisville, 

Kentucky, Lynchburg, Virginia, 

Murfreesboro, Tennessee, and Atlanta, 

Georgia be unchanged. The witness also 

indicated that Winchester, Kentucky be 

increased by no more than $0.10 per cwt 

in order to maintain competitive milk 

procurement price relationships with 

other Kroger plants located in the 

Cincinnati area of the Mideast milk 

marketing areas. The witness opposed 

the proponent’s position that the 

proposal be considered on an 

emergency basis. 

A witness appearing on behalf of the 

Milk Industry Foundation (MIF) 

testified in opposition to the Class I 

price adjustments of DCMA’s package of 

proposals. According to the witness, 

MIF is a member organization of the 

International Dairy Foods Association 

(IDFA) which represents 115 member 

companies that market approximately 

85 percent of the nation’s milk and 

dairy products. The witness testified 

that the proposed changes are not 

necessary because an adequate of 

supply of milk already exists for the 

Appalachian, Southeast and Florida 

orders. The witness stated that because 

the Federal order system is a national 

market, milk is available from anywhere 

in the country. The witness noted overorder premiums compensate those 

entities who supply the deficit regions. 

The witness was of the opinion that 

declining milk production in the 

southeastern region has been occurring 

for many years and as such does not 

warrant increasing Class I prices and 

accordingly does not warrant the 

Department to take emergency action. 

The MIF witness was of the opinion 

that Class I prices cannot be changed in 

one region of the country without 

affecting milk marketing in other 

regions. The witness said that the 

proposed Class I price adjustments 

would change the competitive 

relationships between plants located 

within and outside of the three 

southeastern marketing areas. The 

witness argued that Class I sales would 

be discouraged because all Class I plants 

in the three marketing areas would be 

required to pay a higher price for milk. 

The witness requested a comprehensive 

analysis of the national market before 

adopting the proposed Class I price 

adjustments. 

A witness appearing on behalf of 

Dean Foods Company (Dean) testified in 

opposition to the proposed Class I price 

adjustments of DCMA’s package of 

proposals. The witness agreed with 

testimony of other witnesses indicating 

the deficit milk supply conditions in the 

three southeastern marketing areas and 

the need to increase prices paid to the 

region’s local dairy farmers. 

The Dean witness was of the opinion 

that a comprehensive analysis of the 

potential impacts of changing the Class 

I price surface in the three marketing 

areas had not been conducted. The 

witness characterized DCMA’s package 

of proposals as containing ‘‘too many 

moving parts’’ that makes it difficult to 

evaluate the impact of the proposed 

Class I price adjustment features. The 

witness was of the opinion that 

Appalachian and Southeast marketing 

area dairy farmers are in greater need of 

higher producer prices than dairy 

farmers in the Florida marketing area 

and noted that the proposed Class I 

price adjustments would benefit 

Appalachian and Southeast marketing 

area producers the least. In this regard, 

the witness worried that the prices 

received by dairy farmers across the 

southeastern region would be unfairly 

distributed if the proposed Class I price 

changes were adopted. 

The Dean witness was of the opinion 

that the proposed Class I pricing surface 

and Class I pricing adjustments would 

change how milk moves to and between 

plants located within and outside of the 


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three marketing areas. The Dean witness 

testified that the assumptions used by 

DCMA in laying the foundation for the 

proposed Class I price adjustments and 

Class I pricing structure are flawed. In 

this regard, the witness noted that the 

USDA 1999 Final Decision on Federal 

milk order reform indicated that the cost 

of hauling raw milk was linear, [cost 

increases as the distance milk is 

transported increases at a constant rate] 

but that the cost of hauling packaged 

milk was nonlinear. Accordingly, the 

Dean witness argued that the proposed 

Class I pricing changes could give 

distributing plants located outside the 

marketing area’s incentive to change 

their route dispositions in order to 

become regulated on one of the three 

marketing orders. 

According to the Dean witness, 

distributing plants located outside the 

area could become regulated at the 

expense of plants located in the area. As 

a result, the witness concluded, Class I 

revenue generated by out-of-area 

distributing plants would be returned to 

dairy farmers located far outside of the 

three southeastern marketing areas. The 

witness offered that perhaps the greatest 

beneficiaries of the proposed Class I 

pricing changes could be producers 

located as far away as Illinois and 

Indiana. 

The Dean witness also criticized 

reliance on Wooster, Ohio (located in 

Wayne County) as a supply area for the 

southeastern region and being a basis of 

DCMA’s proposed Class I price 

adjustments. The witness noted while 

DCMA identifies Wooster, Ohio, as a 

supply area for the southeastern region, 

a Pennsylvania State proceeding held in 

2006 indicated the testimony of a DFA 

witness saying that milk was not 

available in the Wooster, Ohio, area to 

supply Pennsylvania. 

The Dean witness offered nine 

modifications to DCMA’s package of 

proposals. The witness explained that 

their proposed modifications to the 

package of proposals would not seek to 

provide higher Class I prices or change 

the Class I pricing surface. According to 

the witness, the Appalachian and 

Southeast marketing orders pooling 

provisions should be identical to those 

of the Florida marketing order 

(discussed further below). 

2. Producer Milk—Diversion Limit and 

Touch-Base Standards 

The DCMA witness testified that the 

diversion limit standards of the 

Appalachian and Southeast orders 

should be identical. According to the 

witness, diversion to nonpool plants 

allows for the pooling of milk that is 

transferred from pool to nonpool plants 

without milk first needing to be 

delivered to pool plants. In setting a 

reasonable limit, the witness was of the 

opinion that diversion limit standards 

must take into account reserve supplies 

needed for Class I use, the balancing 

needs of the markets and the seasonality 

of production. 

The DCMA witness testified that 

milk-deficit Federal orders tend to have 

lower diversion limit standards relative 

to orders with substantial reserve milk 

supplies. The witness testified that 

while the Appalachian and Southeast 

order diversion limit standards 

generally reflect their milk-deficit 

marketing conditions, they are in need 

of tightening. Specifically, the DCMA 

witness proposed that the diversion 

limit standards be 25 percent during the 

months of January, February, and July 

through November, and 35 percent for 

the months of March through June and 

for the month of December. 

In explaining the analysis conducted 

in arriving at proposed new diversion 

limit standards for the Appalachian and 

Southeast orders, the DCMA witness 

testified that daily producer milk 

receipts by distributing plants regulated 

by the two orders from January 2004 

through December 2006 were compared 

to the day of the month when daily 

receipts at distributing plants were 

greatest. The witness explained that the 

differences between the day of greatest 

receipts and each day’s actual receipts 

for the month at distributing plants were 

then summed. According to the witness, 

the resulting value represents the 

amount of additional milk that would 

need to be pooled as reserve milk to be 

able to satisfy Class I demands at a 

distributing plant on the day of their 

greatest need. The witness stated that 

the analysis showed approximately 12 

to 13 percent of additional milk volume 

of distributing plant receipts would be 

the minimum reserve necessary to cover 

daily fluctuations in the demand for 

fluid milk at distributing plants. On an 

annual basis, the minimum average 

reserve needed as calculated is about 22 

percent, the witness said. 

The witness explained that the 

proposed diversion limit standards of 25 

percent for both orders for the months 

of January, February, and July through 

November, are based on the analysis 

described above and the need to provide 

for an additional reserve in the tightest 

supply months. The witness explained 

that the proposed diversion limit 

standards of 35 percent for the months 

of March through June and the month of 

December accommodate seasonal 

fluctuations in supply. The witness 

explained that this standard would 

allow regular producers who supply the 

Class I needs of the marketing areas in 

the tight supply months to pool all of 

their additional production in the flush 

months and accommodate the regular 

decline in Class I sales that occurs when 

schools close for the summer months. 

According to the witness, Class I plants 

also temporarily close or severely limit 

their receiving operations over the 

holiday period in December, resulting in 

substantial surplus milk. 

Relying on Market Administrator 

data, the DCMA witness estimated that 

the impact on the minimum uniform 

prices from lowering the diversion limit 

standards alone would raise blend 

prices approximately $0.02 per cwt and 

$0.07 per cwt annually for the 

Appalachian and Southeast orders, 

respectively. The witness indicated that 

a change in the blend price for any 

particular producer would vary based 

on the location the producer’s milk was 

delivered. 

The DCMA witness stressed that the 

proposed changes in the two orders’

diversion limit standards do not fully 

capture the true volume of milk likely 

to no longer be eligible to be pooled on 

the two orders. The witness explained 

that if the volume of producer milk 

delivered to pool plants were the same 

each month, then the volume of 

producer milk no longer pooled and 

priced by the orders would drop about 

6.67 percent and 29.72 percent on the 

Appalachian and Southeast orders, 

respectively. The witness further 

explained that lowering the diversion 

limit standards should also result in 

increasing minimum order blend prices 

paid to producers. According to the 

witness, proposed changes to the 

diversion limit standards of the order, 

together with expected increases in 

revenue arising from Class I price 

adjustments and Class I pricing surface, 

will likely encourage local milk 

production, the movement of milk into 

the region from distant sources, or some 

combination of both. 

The DCMA witness testified that the 

package of proposals also includes the 

lowering of the touch-base standards of 

the Appalachian and Southeast orders 

and makes them identical. According to 

the witness, this would discourage 

uneconomic movements of milk and 

offer operational savings for 

cooperatives supplying the Class I needs 

of the marketing area. 

The DCMA witness explained that 

because of the continuing decline in 

local milk production, an increasing 

amount of milk that is produced further 

from the marketing areas is becoming a 

regular part of the supply of Class I 

milk. The witness characterized this 

milk of distant dairy farmers as the 


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reserve supply needed for balancing the 

Class I needs of the two marketing areas. 

The DCMA witness was of the 

opinion that reducing the touch-base 

standard to one day each month in both 

orders is necessary for the efficient 

pooling of reserve supplies. In this 

regard, the witness testified that 

lowering the touch-base standard would 

no longer result in displacing local milk 

already supplying the markets’ Class I 

needs with the milk produced farther 

from the marketing areas that is shipped 

just to meet pooling standards. 

According to the witness, requiring 

producers to deliver more days to pool 

plants when the milk is not truly 

needed results in increasing the cost of 

supplying the Class I needs of the two 

markets. 

Eight dairy farmers testified in general 

support of DCMA’s proposed changes to 

the two orders’ diversion limit and 

touch-base standards. Some were of the 

general opinion that the regular reserve 

supply for the Appalachian and 

Southeast marketing areas should be 

pooled when not delivered to Class I 

plants. While all supported the pooling 

of milk that regularly supplies the Class 

I needs of the two marketing areas, 

several dairy farmers expressed caution 

that the diversion limits were not being 

lowered enough while touch-base 

standards were needlessly being 

lowered. According to these witnesses, 

this would encourage pooling milk not 

truly supplying the markets and result 

in lower blend prices paid to local dairy 

farmers. The dairy farmers testifying 

supported adopting needed changes on 

an emergency basis. 

A witness representing Dean testified 

that the proposed changes to the 

diversion limit and touch-base 

standards would not be sufficient to 

deter the uneconomic movement of milk 

or to enhance producer prices in the 

Appalachian and Southeast marketing 

areas. According to the witness, current 

diversion limit standards are in excess 

of the markets’ balancing needs and 

should be lowered immediately. 

The Dean witness characterized the 

Appalachian and Southeast orders as 

being very similar to the Florida order 

in terms of milk consumption and 

production. The witness was of the 

opinion that the pooling standards of 

the Florida order work well and pooling 

milk not consistently serving the 

market’s Class I needs rarely occurs. The 

witness specifically proposed that 

diversion limit standards be changed to 

15 percent for the months of December 

through February, 20 percent for the 

months of March through June, and 10 

percent for the months of July through 

November. 

According to the Dean witness, dairy 

farmers will receive higher blend prices 

if diversion limits are made even lower 

than proposed by DCMA. Relying on 

Market Administrator data, the witness 

stated that January 2004 had shown the 

highest ‘‘need’’ of reserve milk during 

2004–2006 for the Southeast order at 

approximately 22 percent of total milk 

pooled on the order. The witness 

contrasted this with October 2004 where 

the ‘‘needed’’ reserve was 

approximately 7 percent. In this regard, 

the witness suggested that diversion 

limits could be reduced below that 

proposed by DCMA. According to the 

witness, if made too low, the Market 

Administrator has the authority to 

change the diversion limit standards if 

warranted. 

The Dean witness opposed DCMA’s 

proposed one day per month touch-base 

standard if DCMA’s proposed diversion 

limit standards are adopted. The 

witness was of the opinion that 

inefficient movements of milk would 

result if the one day touch-base standard 

were adopted. However, the witness 

indicated support for a two-day touchbase standard provided the diversion 

limit standards of the Florida order are 

simultaneously adopted. 

The Dean witness explained that 

when touch-base requirements are low, 

locally produced milk can be displaced 

by milk located far from the marketing 

area because it needs to be transported 

to the marketing area fewer times to 

qualify for pooling and receiving a 

higher blend price. The witness was of 

the opinion that only milk that is 

necessary to serve the Class I needs of 

the market should be delivered to that 

market. According to the witness, 

reserve milk supplies located far from 

the market should not be pooled on the 

market if they are not delivered to the 

market. 

3. Transportation Credit Provisions 

The DCMA witness explained that on 

September 1, 2006, the Secretary issued 

a tentative partial decision (71 FR 

54118) which amended the 

transportation credit provisions of the 

Appalachian and Southeast orders. 

Specifically, the witness noted that the 

decision established a fuel cost adjuster 

to determine a variable mileage rate 

factor used to compute the payout of 

transportation credits and higher 

maximum transportation credit 

assessments on Class I milk for the 

Appalachian and Southeast orders. To 

accompany these adopted changes that 

were implemented on December 1, 2006 

(71 FR 62377), the witness proposed 

four other changes to the transportation 

credit provisions that are part of the 

package of changes proposed for the two 

southeastern orders. 

According to the DCMA witness, the 

four additional changes to the 

transportation credit provisions for both 

orders include: (1) Extending the 

months during which transportation 

credits may be paid to include the 

months of January and February with 

June being an optional transportation 

credit payment month; (2) expanding 

the payment of transportation credits to 

apply to the full load of milk, rather 

than the current calculated Class I 

portion of milk loads; (3) providing 

greater flexibility for supplemental milk 

producers to be eligible to receive 

transportation credit payments; and (4) 

raising the maximum monthly 

transportation credit assessment for the 

Southeast order from the current $0.20 

per cwt to $0.30 per cwt. 

According to the DCMA witness, the 

need for supplemental milk in the 

Appalachian and Southeast orders has 

increased during the months of January 

and February. The witness offered 

evidence showing that during January 

2004 through December 2006, January 

and February are months with 

increasing Class I use in the 

Appalachian and Southeast orders. The 

witness claimed that during January and 

February, local milk is not sufficient to 

supply the Class I milk needs. It is this 

combination of Class I need and 

available local producer supplies that 

show January and February as being 

more like the current transportation 

credit payment months of July through 

December than the flush months of 

March through May, the witness 

concluded. According to the witness, 

adding January and February as 

transportation credit payment months 

would give suppliers of supplemental 

milk an opportunity to recoup a portion 

of the hauling costs to supply the 

marketing areas with milk for fluid use. 

In explaining this proposed change, 

the DCMA witness said, in part, current 

transportation credit payment 

provisions result in reimbursements that 

are much lower than the real cost of 

hauling. The witness explained that the 

cost of hauling milk to Class I plants is 

the same regardless of the plant’s use or 

the Class I utilization of the market. The 

witness was of the opinion that 

expanding the transportation credit 

payments to full loads of milk delivered 

only to pool distributing plants would 

enhance orderly marketing and better 

ensure that sufficient supplemental milk 

is delivered to pool distributing plants. 

The witness supported continuing 

transportation credit payments on 

supplemental milk deliveries to pool 

distributing plants only. 


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The DCMA witness proposed 

simplifying the process for determining 

milk that is eligible for transportation 

credit payments. The witness noted that 

currently, a dairy farm must be located 

outside either the Appalachian or the 

Southeast marketing areas, the dairy 

farmer must not meet the Producer 

provision under the two orders during 

more than two of the immediately 

preceding months of February through 

May and not more than 50 percent of 

the milk production of the dairy farmer 

during those two months, in aggregate, 

can be received as producer milk under 

the order during those two months. 

The DCMA witness was of the 

opinion that the requirements for 

transportation credit payment eligibility 

should be changed to provide flexibility 

in meeting the criteria while limiting 

the receipt of transportation credits to 

only that milk which is truly 

supplemental and that is not part of the 

consistent and regular supply of milk 

serving the Class I needs of the two 

markets. Specifically, the witness 

proposed that: (1) A dairy farmer must 

not meet the Producer definition on the 

orders in more than 45 of the 92 days 

in the months March through May or (2) 

must have less than 50 percent of a 

producer’s milk pooled on the orders 

during those three months combined. 

The witness argued that limiting the 

producer association with the orders to 

no more than half the time or to no more 

than half their milk production is 

sufficient in identifying a dairy farmer 

who is a supplemental supplier of milk 

to the marketing areas. These changes, 

the witness asserted, offer substantial 

cost savings to cooperatives that bear 

the burden of sourcing and supplying 

the supplemental milk needs of the 

markets from distant locations. 

The DCMA witness testified that the 

maximum transportation credit 

assessment for the Southeast order 

needs to be increased from the current 

$0.20 per cwt to $0.30 per cwt given the 

proposed expansion of the 

transportation credit payments on full 

loads of milk to Class I distributing 

plants regulated by the two orders. The 

witness was of the opinion that 

otherwise the current assessment rate 

would be insufficient to cover 

anticipated shortfalls in the 

transportation credit fund. 

While the DCMA witness proposed a 

higher transportation credit assessment 

rate for the Southeast order only, the 

witness projected that the proposed 

changes to Class I prices and the Class 

I pricing surface in the Appalachian and 

Southeast orders would lessen 

payments from the transportation credit 

balancing funds. The witness explained 

this may occur because the greater 

positive differences (increases) from 

adopting the proposed Class I price 

adjustments and Class I pricing surface. 

The witness did acknowledge that the 

additions of the months of January and 

February as transportation credit 

payment months would tend to increase 

transportation credit payouts. 

Relying on Market Administrator 

data, the DCMA witness estimated that 

for the months of July through 

December 2006 the Southeast order 

transportation credit payments would 

total $15,704,872 as a result of their 

proposal, and January and February 

2006 payments would total 

approximately $2,900,000, resulting in 

an overall amount of approximately 

$18,604,872. At the current assessment 

rate of $0.20 per cwt, the witness 

concluded that transportation credit 

balancing funds would not have been 

sufficient to pay all transportation credit 

claims in 2006. At the proposed $0.30 

per cwt assessment rate, the witness was 

of the opinion that sufficient revenue 

would be generated to satisfy all 

transportation credit claims. 

Relying on Market Administrator data 

for the Appalachian order, the witness 

said that during July of 2006 through 

January of 2007, transportation credit 

payments would have totaled 

approximately $4,073,312. According to 

the witness the month February 2006 

would have included a payment of 

approximately $313,000, bringing the 

total estimated transportation credit 

total payments to $4,383,312. According 

to the witness, the current $0.15 per cwt 

assessment rate for the Appalachian 

order would have been sufficient and no 

increase in the assessment rate would be 

needed. 

The DCMA witness supported 

continuing to provide for Market 

Administrator discretion in setting the 

transportation credit assessment rates at 

less than the maximum allowed. The 

witness was of the opinion that doing so 

will prevent the needless collection of 

revenue when the transportations credit 

balancing funds are sufficient to meet 

claims. 

Four dairy farmers testified in support 

of DCMA’s proposal to provide 

additional flexibility in determining 

which producers are supplying 

supplemental milk to the two marketing 

areas. As with other features of DCMA’s 

proposals, these dairy farmers support 

adoption of these proposed changes on 

an emergency basis. 

The witness appearing on behalf of 

Dean expressed support for adding the 

months of January and February as 

transportation credit payment months 

for the Appalachian and Southeast 

orders on the condition that tighter 

diversion limits be adopted. The 

witness said these months should be 

considered as payment-eligible months 

because the tentative decision 

implemented in December 2006 

eliminated the ability to divert milk on 

loads of milk seeking the payment of a 

transportation credit. However, the 

Dean witness opposed expanding 

transportation credit payment eligibility 

to entire loads of milk. In this regard, 

the witness expressed concern that this 

would essentially result in Class I sales 

funding the supply of supplemental 

milk in lower-valued Class II uses. 

Post-Hearing Briefs 

Post-hearing briefs were filed by: 

Dairy Cooperative Marketing 

Association (DCMA), Southeast 

Producers Steering Committee (SPSC), 

Dean Foods Company and National 

Dairy Holdings (Dean/NDH), and the 

Milk Industry Foundation. 

The DCMA post-hearing brief 

reiterated support for adoption of their 

proposals on an emergency basis. The 

brief stated that their proposals were 

developed as an integrated package and 

that the package of proposals better 

assures the Appalachian, Southeast and 

Florida milk orders’ ability to attract a 

sufficient quantity of milk for fluid use. 

The brief said this is accomplished by 

increasing the Class I prices in the three 

milk marketing orders, lowering the 

diversion limit and touch-base day 

standards, and modifying the 

transportation credit provisions. The 

brief reiterated the deficit milk supply 

situation in the southeastern region. The 

brief emphasized that procuring milk for 

Class I use for the region is a major 

challenge that is borne 

disproportionately by cooperative 

associations and their dairy farmer 

members. 

The DCMA brief explained that the 

Class I price adjustments and changes to 

the Class I pricing surface in the 

Appalachian, Southeast and Florida 

orders would accomplish two needed 

results. According to the brief, the 

changes would likely encourage local 

producers to increase milk production 

and provide pricing incentives for 

producers located outside the marketing 

areas to deliver milk to the three 

marketing areas for fluid use. 

The DCMA brief stated that while 

plant price relationships would 

inevitably change as a result of their 

proposals, the Class I prices proposed 

are strikingly similar to plant price 

differences adopted in the 1999 Order 

Reform Final Rule. The brief indicated 

that this is proof that their method of 

developing the proposed Class I price 


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adjustments and Class I pricing surface 

is valid and meets the requirements of 

a regulated Class I price system. 

The DCMA brief commented on the 

method used in developing their Class 

I pricing proposals as deviating from a 

model developed by Cornell University 

that was relied upon in the adoption of 

current Class I pricing structure. 

According to the brief, arguments 

regarding the cost differences between 

assembly and plant-to-plant milk 

deliveries as a direct function of the 

distance transported and not being the 

same as packaged milk movements 

when greater than 900 miles does not 

invalidate their proposed pricing 

structure. The brief characterized the 

proposed Class I pricing portion of the 

package of their proposals as containing 

all the elements used by the Department 

in the current Class I pricing structure. 

The brief also argued that DCMA’s 

proposals generates Class I pricing 

relationships consistent with the 

objectives of marketing orders in 

assuring an adequate supply of milk for 

the three marketing areas, not 

encouraging the uneconomic movement 

of milk; and being reflective of the 

supply and demand conditions for milk 

within the marketing areas. 

The DCMA brief explained that 

lowering the diversion limit standards 

in the Appalachian and Southeast 

orders would serve to enhance producer 

blend prices while the decrease in the 

producer touch-base days would act to 

encourage more efficient milk 

movements and offer cost savings to 

milk suppliers. The brief maintained 

that while some witnesses testified in 

support of even lower (tighter) diversion 

limits, no evidence to support such 

changes was presented. The brief added 

that diversion limit standards in both 

orders will effectively be much lower 

than the proposed standards because no 

diversions may accompany 

supplemental milk pooled on the order 

which receives a transportation credit 

payment. The brief also noted that 

DCMA’s proposal for extending 

transportation credit pay-out months 

also effectively lowers pooling milk by 

diversion. 

The DCMA brief stated that extending 

the payment of transportation credits to 

include the months of January and 

February and to the entire loads of milk 

would offer the suppliers of 

supplemental milk greater assurance 

that more of the actual costs of hauling 

milk to the southeastern region would 

be covered. According to the brief, 

simplifying the criteria that determines 

if producers are supplemental suppliers 

of milk to the marketing areas offers 

both administrative and marketing 

efficiencies. Finally, the brief explained 

that the proposed increase in the 

transportation credit assessment for the 

Southeast milk order would ensure that 

transportation credit payment claims 

would be adequate to meet anticipated 

needs. 

The DCMA brief maintained that the 

record contains abundant evidence 

supporting the existence of emergency 

conditions in the three marketing areas 

affecting the ability to adequately 

supply fluid milk. The brief stressed 

that providing adjustments for higher 

Class I prices and modifying the Class 

I pricing surface, if even on a temporary 

basis, is necessary immediately. The 

brief indicated that milk production in 

the Southeastern states during the first 

quarter of 2007 declined at a faster rate 

than the annual decline during 2006 

and 2005, and that this increasing rate 

of milk production decline cannot be 

ignored. The brief reiterated the 

continuing increases in hauling costs 

and the longer distances milk must be 

shipped to provide sufficient supplies to 

meet fluid demands. 

A post-hearing brief was submitted on 

behalf of SPSC. The SPSC brief 

indicated support for the Class I 

portions of DCMA’s proposals but was 

not fully supportive of the proposed 

diversion limit and touch-base 

standards and transportation credit 

provisions. The brief agreed with the 

DCMA proposals to increase Class I 

prices in the Appalachian, Southeast 

and Florida orders on an emergency 

basis because it would promote milk 

production within the three marketing 

areas by enhancing local producer 

income—the primary suppliers of fluid 

milk for the three southeastern markets. 

The SPSC brief did express concern that 

even with expected higher blend prices 

to producers accruing from higher Class 

I prices, the current trend of lower local 

milk production may not be slowed. 

The SPSC brief indicated support to 

lower (tighten) diversion limit standards 

in the Appalachian and Southeast 

orders. However, the brief expressed the 

opinion that diversion limit standards 

for both orders could and should be 

reduced more than that proposed by the 

DCMA. The SPSC brief asserted that 

record evidence had not determined the 

appropriate base and reserve milk 

supply volumes or the proper diversion 

limit and touch-base standards for the 

Appalachian and Southeast orders or 

who should bear the costs of 

maintaining reserve milk supplies for 

the Southeastern region. 

The SPSC brief was of the opinion 

that record evidence also did not clearly 

indicate that the volume of milk pooled 

on the order for other than Class I use 

actually would be lowered by adopting 

DCMA’s proposed diversion limit and 

touch-base standards. According to their 

brief, the majority of the producer milk 

removed under the DCMA proposals 

would occur in only a few months of the 

flush production months for the 

Appalachian order and in the months of 

January and February for the Southeast 

order. The brief expressed concern that 

milk could actually be added in both 

orders in the other months due to the 

decrease in touch-base days. The brief 

maintained that in-area producers and 

those who provide the primary supply 

of milk for fluid use on a regular basis 

should receive the greatest share of 

revenue attributable to that service. 

According to the brief, pooling more 

milk than needed would only continue 

to depress the income of the 

Southeastern producers. 

The SPSC brief found agreement with 

Dean’s testimony that proposed a more 

aggressive lowering of diversion limit 

standards for the Appalachian and 

Southeast orders. The brief agreed with 

Dean’s position that tighter diversion 

limits would sharply reduce the 

volumes of pooled milk in the two 

orders and the relative impact on 

producer pay prices would be more 

substantial. The brief indicated support 

for continuing to provide discretionary 

authority for the Market Administrators 

to tighten diversion limits and raise 

touch-base standards if necessary and 

without the need to resort to the formal 

rulemaking process. 

The SPSC brief indicated conditioned 

support for DCMA’s proposed changes 

to the transportation credit provisions of 

the Appalachian and Southeast orders. 

However, the brief questioned the 

proper role of transportation credits in 

both marketing orders. The brief 

requested the Department consider the 

proper distinction between true pooled 

reserve milk and supplemental milk. 

A post-hearing brief submitted on 

behalf of Dean Foods Company and 

National Dairy Holdings, LLC 

(hereinafter referred to as Dean/NDH) 

agreed that the Southeastern region of 

the U.S. is a deficit milk production 

region and that the deficit is growing. 

The brief said that dairy farmers who 

regularly and consistently supply milk 

to fluid milk plants in the southeast 

region should be appropriately 

compensated for their raw milk and 

receive the blend price of the order they 

supply. However, the brief argued that 

adopting the proposed Class I price 

adjustments and the Class I price 

surface proposals is not supported by 

record evidence or by rule of law and 

should be denied. While the Dean/NDH 

brief expressed agreement that longVerDate Aug<31>2005 18:00 Feb 28, 2008 Jkt 214001 PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 E:\FR\FM\29FEP2.SGM 29FEP2

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term problems exist regarding the 

viability of the southeastern region dairy 

industry, it doubted that correcting 

problems that have prevailed for some 

25 years could be solved overnight 

through emergency rulemaking. 

According to the Dean/NDH brief, 

there is no evidence of an emergency 

that would warrant adopting the Class I 

price proposals by the omission of a 

Recommended Decision. To the extent 

that conditions warrant the need to rely 

on milk orders to return higher prices to 

dairy farmers, the brief asserted that an 

alternative method of returning higher 

prices can be achieved by simply 

lowering diversion limit standards of 

the orders. 

The Dean/NDH brief noted that Dean 

and NDH operate several fluid milk 

processing plants in the Southeastern 

region and noted that processors 

opposed the Class I price adjustments 

and Class I pricing surface changes. The 

brief argued that such changes may 

result in unintended consequences 

which may make the situation in the 

southeastern region worse. 

According to the Dean/NDH brief, 

adopting changes to Class I pricing may 

result in plants located outside the 

Appalachian and Southeast marketing 

areas gaining incentives to direct their 

fluid milk sales in the marketing areas 

and become pooled on those orders. The 

brief argued that while plants may gain 

in blend price changes by altering where 

they become pooled, the price surface 

may not change for their competitors. 

The brief also asserted that since 

January 2000, Class I prices were 

intentionally linked nationwide as part 

of Federal milk order reform and 

concluded that any change in Class I 

differentials or the Class I pricing 

surface, even at one price location, 

would change the economic incentive 

nationwide to serve that location. The 

brief contended, therefore that the entire 

national Class I price surface needs to be 

considered. 

According to the Dean/NDH brief, 

DCMA’s Class I price proposals fail to 

rely on accepted economic models and 

fail to follow the Department’s 

established policies for making 

adjustments to the Class I price surface. 

Specifically, the brief argued that the 

economic calculations failed to take into 

consideration ‘‘shadow pricing,’’ which 

the brief characterized as how a market 

could react to changes such that an 

additional price change would alter 

distribution. The brief also argued that 

the Class I price proposals fail to 

calculate unique prices for each location 

by considering relevant reserve supply 

areas and fail to account for differences 

in raw milk movements versus packaged 

milk movements. 

According to the Dean/NDH brief, the 

rationale for setting a target price for 

Miami, Florida, and then backing off 

that price and ‘‘smoothing’’ the result is 

arbitrary and capricious. The brief 

contended that by determining Class I 

prices in this way, such methodology 

was not applied uniformly and thus 

cannot meet the standards of the 

Administrative Procedure Act. In 

addition, the brief noted that no 

evidence or economic data backs up the 

‘‘smoothing’’ process as described by 

DCMA testimony. 

The Dean/NDH brief asserted that 

Wooster, Ohio, should not be identified 

as a supply area because it has never 

been relied upon as any kind of basing 

point for pricing milk and doing so now 

would be specifically contrary to 

testimony given at a Pennsylvania State 

hearing for a recent State of 

Pennsylvania’s rulemaking. 

Accordingly, the brief contended that 

DCMA’s entire Class I pricing proposals 

should be rejected. 

According to the Dean/NDH brief, 

although the Class I price changes 

sought are ‘‘temporary,’’ competitive 

impacts of such changes can be longterm and result in permanent harm to 

Class I handlers. The brief asserted that 

any decision should be considered 

permanent unless it has a specific 

sunset provision. According to the brief, 

no specific sunset provision had been 

proposed or discussed in the hearing 

record. 

The Dean/NDH brief pointed out that 

the dairy industry is also currently 

experiencing record high Class I prices 

for milk and high blend prices paid to 

dairy farmers obviate the need for 

emergency action. The brief noted that 

the May 2007 uniform price for Fulton 

County, Georgia, was $18.37 per cwt. 

According to the brief, this price is 

$1.37 per cwt higher than April 2007 

and is $5.83 per cwt, or 45.3 percent, 

higher than in May 2006. The brief also 

noted that the Class I price for June 2007 

at Fulton County was $1.92 per cwt 

higher than May 2007, and the July 2007 

price increased by $3.07 per cwt. The 

brief indicated that even a proponent 

witness acknowledged that such higher 

prices are likely to continue through the 

fall 2007. 

The Dean/NDH brief agreed that 

diversion limit standards for the 

Appalachian and Southeast orders 

should be lowered on an emergency 

basis and made identical to those of the 

Florida milk order. The brief indicated 

that the Florida milk order currently 

functions well by having lower 

diversion limit standards and this has 

supported the prevailing over-order 

premiums. The brief opined that 

because of the order’s tight pooling 

provisions, the need for transportation 

credits and the need for holding 

numerous formal rulemaking hearings 

has been avoided. According to the 

brief, the Florida order’s tight diversion 

limit standards have continually 

assisted that order in retaining strong 

blend prices paid to dairy farmers and 

attracting sufficient amounts of milk 

supplies. 

The Dean/NDH brief asserted that 

pool revenues should be shared among 

only those producers who truly and 

regularly serve the Class I market and 

that diversion limit standards of the 

Appalachian and Southeast orders are 

not adequately identifying those true 

and regular suppliers. The brief asserted 

that both orders can be made more 

effective by requiring a genuine 

association of a milk supply with the 

market as intended by the AMAA. 

The Dean/NDH brief indicated that if 

Dean’s proposal for adopting the 

diversion limit standards of the Florida 

order for the Appalachian and Southeast 

orders is adopted, Dean would support 

the DCMA’s one-day per month touchbase proposals. As they do not view 

DCMA’s diversion limit standards as 

being any change at all, they oppose any 

change to the touch-base standards of 

the Appalachian and Southeast orders. 

The Dean/NDH brief opposed the 

expansion of the payment of 

transportation credits to include the 

entire load of milk and stated that they 

should only be paid on Class I milk as 

currently provided under the 

Appalachian and Southeast orders. The 

brief expressed concern that adopting 

the proposed changes would create the 

wrong economic incentives. The brief 

noted that suppliers of milk to a Class 

I plant with a higher than market 

average of Class II use would be 

receiving a larger economic benefit than 

Class I plants with below market 

average Class II use. According to the 

brief, this would be contrary to assuring 

equal minimum milk prices among 

similar handlers. 

The Dean/NDH brief was of the 

opinion that transportation credits have 

been a key factor in contributing to the 

decline of the dairy industry in the 

southeastern region. In this regard, the 

brief noted the proponents 

acknowledgement that in some cases 

current touch-base provisions in 

conjunction with transportation credits 

cause inefficient movements of milk. 

The brief asserted that transportation 

credits, not touch-base standards, give 

rise to inefficient movements of milk. 


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A post-hearing brief by MIF reiterated 

their opposition to adopting DCMA’s 

proposals and asserted the absence of 

emergency marketing conditions that 

warrant emergency action. The brief 

noted awareness of declining milk 

production in the southeastern region 

but indicated this is not a sufficient 

basis for the adoption of the proposals 

on an emergency basis. The brief further 

argued that no emergency exists to 

warrant adoption of the proposals 

because the trends of declining milk 

production in the region and rising fuel 

costs have existed for many years. 

The MIF brief stressed that the key 

purpose of the Federal milk marketing 

order program is to ensure an adequate 

supply of milk for Class I needs. In this 

regard their brief noted that no 

witnesses testified on the inability to 

procure milk for Class I use. The brief 

reiterated that in a survey of their 

membership conducted before the 

hearing, no member indicated difficulty 

securing milk for Class I needs in the 

three southeastern marketing areas. The 

brief also mentioned that over-order 

premiums are paid by Class I handlers 

to secure milk for fluid use and the 

proponents testified that current overover premiums currently offset higher 

fuel costs. 

The MIF brief noted that some 

southeastern dairy producers who 

testified at the hearing also participated 

in a herd-removal program called 

Cooperatives Working Together (CWT). 

In this regard, the brief cited this as an 

example that the concern for declining 

milk production in the southeastern 

region is misplaced. 

The MIF brief asserted Class I sales 

would suffer if higher Class I prices are 

adopted because higher costs will 

increase wholesale costs and result in 

higher retail prices paid by consumers. 

The brief noted that the current, general 

structure of Class I location differentials 

has been in place for 22 years and that 

milk bottlers have made significant 

investments in plants and equipment 

during this time. 

According to the MIF brief, plants 

could be disadvantaged in the 

marketplace solely because of increases 

in the Class I price relative to the Class 

I price of its competitors. The brief 

argued that a half-penny difference per 

gallon could result in lost customers for 

a distributing plant and that a 2.5 cent 

increase is enough to lose a supermarket 

account. The brief asserted that 

increasing a Class I price by 10 cents 

($0.0086 per gallon) could yield dire 

results for a Class I plant. The brief 

indicated that an unexpected 

consequence could be that plants 

distant to the three orders could become 

associated with one of the three orders 

due to differences between 

transportation costs and increased Class 

I prices resulting in out-of-area plants 

taking away sales from in-area plants. 

The MIF brief said that a 

comprehensive study and analysis on a 

national scale of all potential 

consequences and on demand for 

packaged milk was needed before any 

changes to Class I pricing are adopted. 

The brief reasserted the opinion that 

Class I prices could not be changed in 

the southeastern region alone because it 

changes marketing conditions in all 

marketing areas. 

Discussion and Findings 

The record of this proceeding reveals 

that for many years milk production has 

been declining in the southeastern 

region and supplying the region with 

supplemental milk has demanded the 

sourcing of milk supplies from ever 

farther distances from the marketing 

areas. Not only has the decline in milk 

production been in absolute terms, but 

when balanced with population 

increases, milk production in the region 

has failed to satisfy fluid demands yearround. 

At issue in this proceeding is 

consideration of proposed changes to 

the Appalachian, Southeast, and Florida 

milk marketing orders aimed at assuring 

an adequate supply of milk for fluid use 

in the southeastern region of the U.S. As 

proposed by DCMA, the proposals are 

an integrated package of amendments to 

the three marketing orders that seek 

simultaneous changes with the aim of 

providing incentives for assuring a 

reliable supply of milk for fluid use. The 

package of proposals integrates: higher 

regulated minimum prices for Class I 

milk, changes to assure that the revenue 

accruing from higher minimum Class I 

prices will be shared with those 

producers who regularly and 

consistently serve the Class I needs of 

the region, cost savings for entities who 

have made the commitment to supply 

the region; and flexibility and incentives 

for supplying the Appalachian and 

Southeast marketing areas with 

supplemental milk by offsetting the cost 

of transportation. 

Class I Prices and Class I Price Surface 

Temporary adjustments to the Class I 

prices for the three southeastern orders 

are adopted and result in a change to the 

Class I pricing surface. The changes are 

specified in the order language. 

Assuming no other changes to the three 

southeastern orders, increasing Class I 

prices will increase the value of each 

order’s marketwide pool. The higher 

minimum prices will also attract milk to 

all locations and increase blend prices 

for dairy farmers whose milk is pooled 

on the three southeastern milk 

marketing orders. 

The basic foundation for deriving the 

temporary adjustments to Class I prices 

begins with DCMA’s identification of 

potential supply areas and reliance on 

that potential supply area to yield the 

lowest Class I price adjustment based on 

the farthest point of milk demand. The 

potential supply point meeting this 

criteria was Wooster, Ohio, and the 

farthest demand point was identified as 

Miami, Florida. After identification of 

the nearest supply point and the 

demand point, the distance between 

these two points was relied upon to 

determine calculated price adjustments 

at all other county and parish locations 

within the marketing area boundaries of 

the three southeastern orders. The 

selection of Miami as the farthest point 

of milk consumption is consistent with 

recognition in the current pricing 

structure that Miami is the point with 

the highest Class I differential resulting 

in a Class I price designed to attract an 

adequate supply of milk for Class I uses. 

As the proposal indicated, the 

selection of Wooster, Ohio, (Wayne 

County) as a supply point is one of 

several that were considered by the 

proponents. The selection of Wooster 

was made after consideration of other 

supply points because it would 

represent the least-cost point from 

which a milk supply could potentially 

be sourced from locations in the 

southeastern region. All other supply 

points considered would have resulted 

in much higher Class I price 

adjustments. 

The Class I price adjustment at every 

county and parish location relies upon 

a mileage rate factor implemented in 

December 2006. This factor, 

representing approximately 80 percent 

of the cost of hauling bulk milk, is 

further reduced by 80 percent. While 

this formed DCMA’s basic foundation 

for adjusting Class I prices, it is not the 

proposed Class I price adjustments at all 

locations in the southeastern region. 

The DCMA’s proposed Class I price 

adjustments differ from those 

calculated. What the proponent’s have 

described as ‘‘smoothing’’ of the Class I 

price adjustments is essentially price 

alignment. In this regard, it is clear that 

the proposed Class I price adjustments 

are different from strictly calculated 

values. The proposed Class I price 

adjustments provide reasonable 

alignment with the current Class I price 

surface beyond the geographical 

boundaries of the southeastern orders. 

Similarly, DCMA’s Class I price 

adjustments differ from calculated 


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adjustments by adjusting calculated 

values to correspond to Class I 

processing plant locations. This 

establishes pricing zones that are 

conceptually identical to current pricing 

zones and assures that similarly situated 

Class I handlers will have the same 

minimum regulated Class I prices. 

Providing similar regulated prices for 

similarly situated handlers is consistent 

with the requirements of the AMAA. 

While conceptually identical, 

maintaining price alignment with 

adjoining milk marketing orders 

together with pricing zones, the 

proposed Class I price adjustments 

result in price relationships that are 

different from those that exist under the 

current pricing structure. Despite 

criticism that DCMA’s adjustments 

change price relationships between 

plants of the same ownership, the key 

requirement that similarly located 

plants have similar regulated minimum 

prices is maintained. 

In an effort to examine both the level 

and the reasonableness of the Class I 

price adjustments that were zoned and 

aligned with adjoining orders, DCMA 

evaluated the cost of shipping packaged 

milk. According to the record, there are 

some differences between what the 

resulting Class I price adjustments 

would be under the cost analysis of 

shipping packaged milk. Nevertheless, 

the similarities between Class I price 

adjustments as proposed and the cost 

adjustment analysis of shipping 

packaged milk are similar. Because the 

Class I price adjustment at all locations 

does not exceed the value of milk at 

alternative locations, in either bulk or 

packaged form, the Class I price 

adjustments are reasonable. This 

method of evaluating the proposed Class 

I pricing changes by comparison to 

packaged milk movement forms a 

rational basis to conclude that the 

proposed changes to Class I pricing are 

reasonable. The adopted Class I price 

adjustments are presented in Figure 1. 

While the Class I differentials in the 

southeastern region are not changed in 

this decision, the Class I price 

adjustments have been added to the 

current Class I differentials for 

illustrative purposes. Figure 1 provides 

a graphic presentation of the combined 

value of Class I differentials plus the 

adjustment values adopted in this 

decision. 

On the basis of a pricing surface 

alone, the proposed Class I price 

adjustments will not likely result in the 

uneconomic movement of milk as 

asserted by opponents. The proposed 

pricing surface better reflects the 

economic conditions affecting the 

supply and demand for milk in the three 

southeastern marketing areas by 

providing greater pricing incentives 

indicative of actual milk movements 

and the cost of supply milk from 

alternative locations. The adopted Class 

I price adjustments results in a steeper 

Class I price surface that correlates with 

the higher location value fluid milk has 

in the southeastern region. The location 

value of milk is higher because of the 

cost involved in transporting milk to 

locations in the milk-deficit 

southeastern region from alternative 

milk-surplus locations. 


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Opponents to DCMA’s Class I price 

adjustments assert that there is no 

reason to increase Class I prices because 

all Class I demands are being met under 

current order provisions. This decision 

rejects the assertion of an absence of a 

rationale to make changes to the pricing 

provisions of the three orders. The 

record of this proceeding reveals that it 

is the cooperative member organizations 

of DCMA who supply the majority of 

the Class I needs of the three marketing 

areas. In making the commitment to 

supply the fluid needs of the markets, 

the supplying cooperatives have largely 

reduced the burden of Class I handlers 

to source their supply. Similarly, it is 

the cooperative organizations that 

provide the service of balancing the 

three southeastern markets. 

Opponents to DCMA’s Class I price 

adjustments noted that there is an 

adequate supply of milk to meet fluid 

demands. There is an adequate national 

supply of milk to meet the national 

demands for fluid milk. However, in the 

deficit areas of the southeastern 


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marketing areas, there must be sufficient 

incentives provided by the orders to 

encourage the movement of milk from 

reserve areas to these deficit markets. In 

this regard, the location value of milk 

needs to consider local milk supplies, 

local demand, and transportation costs. 

The adopted Class I price adjustments 

should provide the additional 

incentives needed to offset some of the 

costs associated with the decreases in 

local supply, increases in local demand, 

and increases in transportation costs. 

Opponents criticize DCMA’s Class I 

amendments by identifying that other 

means and methods are available which 

would return greater revenue to dairy 

farmers instead of increasing minimum 

prices. Other changes adopted in this 

decision will, all other things being 

equal, tend to increase minimum 

regulated prices paid to producers. 

However, these changes are founded on 

only the very limited improvement 

gained from changes by lowering the 

diversion limit standards of the 

Appalachian and Southeast. These 

changes provide no additional revenue 

that also is needed so that Class I 

demand can be met at all times. In light 

of the chronic milk deficit conditions of 

the southeastern region, only higher 

minimum regulated prices can 

reasonably generate the additional 

revenue needed to assure that the Class 

I needs of the region can be 

continuously met. According to Market 

Administrator analyses, the estimated 

annual increase of the Appalachian 

order pool for 2004, 2005, and 2006 

resulting from DCMA’s proposed Class 

I price adjustments would have been 

$19.3 million, $18.6 million and $18.3 

million respectively. For the Southeast 

order, the annual pool value increase 

would have been $16.8 million, $17.1 

million and $17.7 million respectively. 

For the Florida order, the annual 

increase in pool value would have been 

$36.4 million, $38.3 million, and $39.2 

million, respectively. While alternative 

methods such as a tightening of pooling 

standards will, among other things, tend 

to enhance producer revenue to those 

producers who regularly and 

consistently supply the Class I needs of 

the market, this alone will not establish 

minimum regulated prices high enough 

to attract an adequate supply for chronic 

milk-deficit marketing areas from 

alternative distant locations. 

Diversion Limit and Touch-Base 

Standards—Appalachian and 

Southeast Orders 

DCMA’s proposed diversion limit and 

touch-base standards of the 

Appalachian and Southeast order are 

immediately adopted. The adopted 

changes make the diversion limit and 

touch-base standards of the two orders 

identical. Specifically adopted are 

diversion limit standards of: 25 percent 

of deliveries to pool plants during the 

months of January, February, July, 

August, September, October and 

November, and 35 percent in the 

months of March, April, May, June and 

December. Both order’s touch-base 

standard are amended to require at least 

one-days’ milk production of a producer 

must be delivered to a pool plant during 

the month in order for a producer to be 

eligible to divert to nonpool plants. 

Based on record evidence, adoption of 

a one-day per month touch-base 

standard for both orders and making the 

diversion limit standards of both orders 

identical accomplishes three important 

pooling standard objectives. 

Specifically, the changes: (1) Provide a 

standard necessary to identify producers 

supplying the markets’ Class I needs; (2) 

provide the criteria to identify the milk 

of producers who may be eligible for 

receiving a transportation credit in 

supplying supplemental milk for Class I 

use; and (3) allows milk that is part of 

the milk supply that regularly and 

consistently services the markets’ Class 

I needs to be pooled on the orders. 

Providing for the diversion of milk is 

a desirable and needed feature of an 

order because it facilitates the orderly 

and efficient disposition of milk when 

not needed for fluid use. When 

producer milk is not needed by the 

market for Class I use, some provisions 

should be made for that milk to be 

diverted to nonpool plants but still be 

pooled and priced under the order. The 

proposed lower diversion adjustments 

will likely reduce the volume of milk 

eligible to be pooled by diversion to a 

significant degree on the Southeast 

order and less so on the Appalachian 

order. Assuming all other conditions 

being equal, the adopted changes in 

diversion limit standards will result in 

higher blend prices paid to producers. 

This is a desirable outcome, especially 

for the Southeast order where the need 

to better identify the milk of those 

producers who regularly and 

consistently service the Class I needs of 

the Southeast marketing area is needed 

most. An examination of the Southeast 

order’s utilization of milk belies the fact 

that the marketing area is chronically 

short of in-area milk production to meet 

the Class I demand of the marketing 

area. This can only be the result of 

pooling much more milk on the order 

than is necessary and that is part of the 

legitimate reserve supply of milk of the 

order that is available to service the 

Class I needs of the market. 

The record reveals that according to 

Market Administrator analyses, the 

estimated impact on minimum order 

uniform prices of the proposed 

diversion limit standards in both orders 

would have average annual increases in 

uniform prices of $0.02 per cwt for the 

Appalachian order and $0.07 per 

hundredweight for the Southeast. 

Increased blend prices will contribute in 

providing greater incentives to maintain 

milk production from current producers 

and provide greater economic incentives 

for producers located outside of the 

marketing area to be regular and 

consistent suppliers of Class I milk to 

these two marketing areas. 

Milk diverted to nonpool plants is 

milk not physically received at a pool 

plant. However, it is included as a part 

of the total producer milk receipts of the 

diverting plant or cooperative entity 

pooling milk for its own account. A 

diversion limit establishes the amount 

of producer milk that may be associated 

with the integral milk supply of a pool 

plant or cooperative acting in its 

capacity as a handler. With regard to the 

pooling issues of the Southeast order, 

the record reveals that current diversion 

limits contribute to the pooling of large 

volumes of milk on the order that does 

not regularly and consistently service 

Class I market needs. Therefore, 

lowering the diversion limit standards is 

appropriate to better assure that only 

milk which regularly and consistently 

services the market’s Class I needs is 

pooled. Associating more milk than is 

actually part of the legitimate reserve 

supply available for Class I use 

unnecessarily reduces the potential 

blend price paid to dairy farmers who 

regularly and consistently service the 

markets’ Class I needs. Without 

reasonable diversion limit standards, 

the orders’ ability to provide for orderly 

marketing is weakened. 

Diversion limit standards that are too 

high can open the door for pooling more 

milk on the markets. The record 

supports concluding that a 33 percent 

diversion limit for the Southeast order 

during the months of January through 

June and 50 percent for the months of 

July through December has not only 

resulted in lower blend prices harming 

local producers, it has resulted in Class 

I utilization rates that obscure that order 

as a deficit market. 

For the Appalachian and Southeast 

orders, the record reveals that since the 

average reserve requirements did not 

differ greatly over the 36 month period 

(January 2004 through December 2006), 

having the same diversion limit 

standards for both orders are justifiable. 

In addition, by having identical 

diversion limits, the blend prices paid 


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to producers increase as milk is 

supplied to locations generally in an 

easterly and southern direction. To the 

extent that this diversion limit standard 

may warrant future adjustments, the 

orders already provide the Market 

Administrator authority to adjust 

diversion standards as marketing 

conditions may warrant. Given the total 

milk demands of the marketing areas 

revealed by the record, a minimum of 

about 12 to 13 percent of monthly pool 

distributing plant receipts would be 

needed to meet the minimum daily, 

weekly, monthly, and seasonal needs, as 

well as a modest margin for 

unanticipated changes in the supply 

and demand relationship for Class I 

milk needs. Accordingly, the proposed 

diversion standards for the orders are 

reasonable. 

Touch-base delivery standards define 

the minimum number of days of milk 

production each month that a dairy 

farmer must supply to a pool plant of an 

order to be associated with that market, 

and thus qualifying to have their milk 

pooled by diversion. On the basis of the 

record evidence, this decision finds 

reason to support adopting a one-day 

touch-base standard for both orders. 

Concern has been voiced by conditional 

supporters of DCMA’s package of 

proposed amendments for lowering the 

touch-base standards of the 

Appalachian and Southeast order 

because it represents an easing of a 

feature of the orders’ pooling standards 

at a time when the opposite is needed 

if producer income in the two orders is 

to be improved. While this concern 

might be conceptually valid, the 

concern does not consider that the 

volume of milk pooled on the two 

orders will be appropriately restricted 

by the adopted diversion limit 

standards. In part, because the diversion 

limit standards of the orders are 

tightened, an easing of the touch-base 

standard can be made without fear of 

pooling the milk of producers who are 

not part of the regular and consistent 

supply of milk serving the Class I needs 

of the two marketing areas. 

While diversion limit standards are a 

key feature of the pooling standards of 

an order for defining the total volume of 

milk that can be pooled on an order, an 

argument could be made that perhaps a 

touch-base standard is not necessary at 

all if other pooling standard features are 

appropriately tailored. However, a 

touch-base standard for the Appalachian 

and Southeast orders remains a critical 

feature of both orders because some 

criteria are needed to identify producers 

who are suppliers of supplemental milk 

to the two marketing areas and who 

thereby may be eligible for receiving a 

transportation credit. 

Record evidence indicates that by 

reducing the touch-base days to one day 

per month, producers, especially 

cooperative member producers who 

bear the burden of supplying the vast 

majority of milk to the southeastern 

marketing areas, would avoid the cost of 

delivering their milk to pool plants 

when not necessarily needed. While a 

higher touch-base standard tends to 

support the integrity of the order’s 

performance standards, the current 

touch-base standards are resulting in the 

uneconomic movement of milk solely 

for the purpose of meeting a pooling 

standard. The current touch-base 

standards of the two orders too often 

result in the substitution of local milk 

with the milk of more distant producers 

thus displacing the milk of local 

producers supplying the market. The 

milk of local producers needlessly 

incurs the cost of being transported to 

more distant locations. As a result of the 

current touch-base standard, hauling 

and marketing costs are needlessly 

higher and the supply of milk from 

distant producers may still not be 

available to serve the Class I needs of 

the two marketing areas. 

For the reasons discussed above, this 

decision finds that the current diversion 

limit standards of the Appalachian and 

Southeast orders results in the pooling 

of more milk than can reasonably be 

considered as actually serving the 

market’s Class I needs and are lowered 

to those proposed by DCMA. 

Additionally, the lowering of touch-base 

days, in light of the tightening of the 

diversion limit standards, does not 

compromise the integrity of the orders’

pooling standards. Together with the 

adopted diversion limit standards, a 

lower touch-base standard for the two 

orders offers operational cost savings to 

producers supplying the market with 

Class I milk while simultaneously 

providing for better identification of the 

milk of those producers who regularly 

and consistently service the markets’

Class I needs. 

Until December 2006, the 

transportation credit balancing 

provisions of the Appalachian and 

Southeast orders allowed supplemental 

milk loads to be used as a platform from 

which to pool additional milk on the 

order through the diversion process. 

Official notice is taken of the tentative 

partial decision concerning milk in the 

Appalachian and Southeast marketing 

areas issued September 1, 2006, and 

published September 13, 2006 (71 FR 

54118) and the Interim Rule issued 

October 19, 2006 and published October 

25, 2006 (71 FR 62337). In discussing 

the need for revised diversion limit 

standards for the Appalachian and 

Southeast orders it is necessary to 

consider the findings of that decision. 

The September 2006 decision 

referenced above established a zero 

diversion limit standard on 

supplemental milk supplies seeking a 

transportation credit payment. An 

important finding in that decision 

regarding diversions associated with 

supplemental milk was that pooling 

such diverted milk would provide 

additional revenue to help offset 

hauling costs not covered by the 

transportation credit rates in place for 

the Appalachian and Southeast orders at 

that time. The adoption of a variable 

mileage rate factor that reimburses 

hauling costs on supplemental milk at a 

level more reflective of actual costs was 

found to diminish the need to seek and 

generate such revenue to offset hauling 

costs at the expense of the local 

producers who are regularly and 

consistently supplying milk for Class I 

needs. This decision adopts tighter 

diversion limit standards, especially for 

the Southeast order. Together with 

providing for higher Class I prices, 

tighter diversion limit standards should 

result in more orderly marketing 

conditions because the need to pool 

much more milk on the orders than 

regularly and consistently serves the 

Class I needs of the markets needlessly 

lowers the blend price of producers who 

regularly and consistently service such 

Class I needs. 

Transportation Credit Balancing Fund 

Provisions 

Changes to the Appalachian and 

Southeast order transportation credit 

balancing fund provisions proposed by 

DCMA are adopted immediately. 

Specifically, these changes include: (1) 

Extending the number of months that 

transportation credit balancing funds 

will be paid to include the months of 

January and February. The month of 

June will continue to be a month for the 

payment of transportation credits if 

requested and approved by the Market 

Administrator; (2) Expanding the 

payment of transportation credits for 

supplemental milk to include the full 

load of milk; (3) Providing more 

flexibility in determining the 

qualification requirements for 

supplemental milk producers to receive 

transportation credit payments; and (4) 

increasing the monthly transportation 

credit balancing fund assessment rate 

for the Southeast order from the current 

$0.20 per cwt to $0.30 per cwt. 

The transportation credit balancing 

fund provisions for both orders (and 

predecessor orders) were established in 


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1996 as a result of the consistent need 

to import supplemental milk for fluid 

use during certain times of the year 

when local production is not sufficient 

to meet the fluid needs of the markets. 

Specifically, the Market Administrator 

applies a monthly transportation credit 

balancing fund assessment on all 

dispositions of Class I milk. The 

assessment rate is currently $0.15 per 

cwt and $0.20 per cwt for the 

Appalachian and Southeast orders, 

respectively. Transportation credit 

payments are paid from each order’s 

transportation credit balancing fund 

during the months of July through 

December to help offset the cost of 

transporting such supplemental milk for 

Class I use. The transportation credit 

balancing funds operate independently 

from the producer-settlement funds of 

the two orders. Milk from producers 

who are located outside of the two 

marketing areas and who not part of the 

regular and consistent supply of Class I 

milk is commonly referred to as 

supplemental milk. 

The record reveals that the seasonal 

swings in milk production can and does 

lead to inadequate milk supplies for 

fluid use in certain months and surplus 

supplies in other months. In the 

Appalachian and Southeast orders, the 

summer and fall (and sometimes winter) 

months are generally considered those 

months with inadequate (tight) milk 

supplies for fluid use, while the spring 

months are generally characterized as 

having sufficient supplies of milk for 

fluid uses. Transportation credits are 

used as a method to compensate 

handlers that provide supplemental 

milk during the tight supply months by 

offsetting some of the costs of 

transporting milk to the two marketing 

areas. 

Currently, the payment of 

transportation credits under the 

Appalachian and Southeast orders is 

only made during the months of July 

through December. A feature of DCMA’s 

proposal seeks to extend such payments 

to also include the months of January 

and February. Record evidence 

demonstrates reliance on supplemental 

milk supplies for each order’s marketing 

area and the months of January and 

February showing similar demand for 

supplemental milk supplies. 

Declining local milk production in the 

southeastern region of the country is 

well-known and is a chronic problem. 

Record evidence indicates milk 

production from producers located in 

both the Appalachian and Southeast 

marketing areas (pooled on any order) 

has continued to decrease since 2004. 

Specifically, evidence shows that 

annual milk production pooled on the 

Appalachian order has decreased from 

approximately 3.94 billion pounds in 

2004 to about 3.77 billion pounds in 

2006. For the Southeast order, milk 

production has declined from 5.0 billion 

pounds in 2004 to 4.76 billion pounds 

in 2006. Furthermore, record evidence 

illustrates that total milk production in 

the southeastern states of the U.S. has 

declined on average almost 2 percent 

each year since 1986 and has decreased 

a total of 34.6 percent since 1986—from 

18.29 billion pounds in 1986 to 11.96 

billion pounds in 2006. 

In each of the years of 2004, 2005 and 

2006, the months of July through 

January were deficit in terms of monthly 

in-area milk production (milk produced 

within the geographical boundaries of 

the two marketing areas) being 

consistently less than the monthly Class 

I producer milk pooled on the 

Appalachian and Southeast orders. The 

in-area deficit in January for both orders 

for all three years combined totaled 8.4 

million pounds. While February in-area 

milk production for all three years 

exceeded Class I demands, that surplus 

decreased from over 44 million pounds 

in 2004 to just under 14 million pounds 

in 2006—a decrease of over 68 percent. 

Record evidence reveals that the 

months of January and February are 

likely to become months during which 

local in-area milk production will no 

longer satisfy Class I demands and the 

Appalachian and Southeast marketing 

areas will need to increasingly rely on 

supplemental milk supplies to satisfy 

Class I demands. Accordingly, 

expanding the transportation credit 

payment months to include the months 

of January and February for the payment 

of transportation credits is reasonable. 

June will continue to be an optional 

month for transportation credit 

payments, if requested, to be reviewed 

and authorized by the Market 

Administrator. 

Currently, transportation credits are 

paid on loads of milk at the lower of the 

receiving plant’s Class I use or the 

marketwide Class I utilization. DCMA’s 

proposals seek to change these criteria 

by having the entire load of 

supplemental milk eligible to receive a 

transportation credit. The major 

justification offered by DCMA is that the 

cost of transporting supplemental milk, 

regardless of the plant’s use of that milk, 

is the same. This decision finds that a 

supplier of supplemental milk sources 

and assembles milk demanded by 

distributing plants for fluid uses, but no 

distributing plant disposes 100 percent 

of its milk receipts as Class I sales. The 

supplemental milk supplier does not 

know how a receiving plant will use the 

supplemental milk it receives. However, 

it is reasonable to conclude that plants 

do not seek supplemental milk supplies 

without first having the demand for 

Class I use. In other words, the need for 

supplemental milk supplies is fueled by 

Class I demands that cannot be satisfied 

in the absence of transportation credits. 

It is unlikely that supplemental milk 

suppliers would supply full milk loads 

to Class I plants if the demand for milk 

was not at least equal to its Class I 

disposition, even if it has some actual 

lower-valued use of milk. 

The current calculation of 

transportation credit payments in the 

Appalachian and Southeast orders 

contain a number of features to prevent 

offsetting the full cost of transporting 

supplemental milk into the marketing 

areas. It contains features preventing 

pooling milk on the orders that does not 

regularly and consistently supply the 

fluid needs of the two marketing areas. 

Most important is the feature denying 

the ability to pool milk by diversion on 

the basis of supplemental milk 

deliveries to plants in the two orders. 

Current transportation credit provisions 

prohibit pooling diverted milk on the 

Appalachian and Southeast orders on 

loads of supplemental milk seeking a 

transportation credit and this 

prohibition is continued by its adoption 

in this decision. 

It is too early to know what effect 

establishing a zero diversion limit 

standard on supplemental milk loads 

will have on the total volume of milk 

pooled because this prohibition was 

only implemented in December 2006 in 

both orders. Nevertheless, because 

supplemental milk can no longer form 

a basis from which to pool milk through 

the diversion process, it is reasonable to 

conclude that the marketwide Class I 

utilization of the orders will likely 

increase. However, this improvement 

alone will not likely result in offsetting 

the costs incurred by supplemental milk 

suppliers who both assemble and 

transport milk to plants regulated by the 

two orders to satisfy Class I demands. 

Record evidence reveals that the 

Appalachian and Southeast marketing 

areas experience differing costs in 

supplying supplemental milk to meet 

Class I needs that are reflected in the 

two orders having different 

transportation credit assessment rates. 

In recent years the transportation credit 

reimbursement on claims for the 

Southeast order have been prorated at 

greater rates and more often than those 

of the Appalachian order. As discussed 

in the September 13, 2006 published 

tentative decision for the Appalachian 

and Southeast orders (71 FR 54118), the 

Appalachian marketing area receives the 

majority of its supplemental milk 


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supplies from the northern, MidAtlantic States. The Southeast 

marketing area receives the majority of 

its supply from the Midwest and 

southwestern states. The location of 

supplemental milk supplies for the 

Southeast marketing area therefore 

tends to be more distant from the 

marketing area than that for the 

Appalachian marketing area. 

The need to again raise the monthly 

transportation credit assessment rate for 

the Southeast order is in part explained 

by the continuing need of the Southeast 

marketing area to reach even farther to 

source milk supplies to satisfy fluid 

demands. Additionally, expanding the 

payment of transportation credits on the 

entire load of supplemental milk also 

will likely increase the payment of 

transportation credit claims. At the 

same time, payment of transportation 

credit claims will be offset by the 

adopted changes to the Class I pricing 

surface because the calculation for 

determining payment considers the 

change in Class I pricing values between 

the origin of supplemental milk and the 

point where it is delivered. As 

discussed above, the need for 

supplemental milk supplies is fueled by 

the marketing areas Class I demand. 

Precautionary measures are currently 

provided in the transportation credit 

provisions such that the rate of 

assessments beyond actual handler 

claims is unlikely. The transportation 

credit provisions provide the Market 

Administrators the authority to reduce 

or waive assessments as necessary to 

maintain sufficient fund balances to pay 

the transportation credits claims. 

Therefore, increasing the maximum 

transportation credit assessment rates 

will not result in an accumulation of 

funds beyond what is needed to pay 

transportation credit claims. 

The record supports concluding that 

local milk production is expected to 

continue declining within both 

marketing areas. This will result in an 

even greater reliance on supplemental 

milk to meet the fluid milk needs of the 

markets. Record evidence shows a 

constant increase in both the volume 

and distance of supplemental milk 

supplies, especially for the Southeast 

marketing area. As such, it is reasonable 

that future transportation credit claims 

will increase. In this regard, it is 

important to prevent exhausting the 

transportation credit balancing fund 

before the payment of claims on 

supplemental milk. Doing so is 

consistent with the fundamental 

purposes of the transportation credit 

provisions. 

The adopted increases in Class I 

prices will likely alter the payout of 

transportation credit claims because the 

differences in origin and delivery point 

Class I prices are increased. However, 

adoption of expanded transportation 

credit payment months to include 

January and February, as well as 

payments on the entire load of milk, 

will tend to offset the payout on 

transportation credit claims resulting 

from the adopted changes in Class I 

pricing. 

An increase in the transportation 

credit assessment for the Appalachian 

order was not requested because 100 

percent of the transportation credit 

requests were paid in 2006 and in 

January 2007. Data show that even with 

adoption of the proposed Class I prices, 

pooling requirements and transportation 

credit provisions, the transportation 

credit assessment of $0.15 per cwt in the 

Appalachian order should continue to 

be sufficient to pay future transportation 

credit requests. 

The record indicates that the actual 

transportation credits paid in 2006 for 

the Appalachian order totaled 

$3,313,590. Had the current mileage rate 

factor (MRF) been in effect for all of 

2006, transportation credit payments for 

the Appalachian order would have 

totaled $4,433,854, including the actual 

payment for January 2007 and an 

estimated payment for February. 

Analysis suggests that with the current 

MRF and proposed Class I prices in 

place, the total transportation credits 

paid during 2006 would have been 

about $456,000 less than the actual total 

transportation credit payments. Using 

Market Administrator data with the 

variable MRF based on 2006 calculated 

monthly averages ($0.044 per cwt per 

ten miles), paying of transportation 

credit claims on full loads of milk, and 

the proposed Class I price adjustments, 

the total transportation credits paid for 

2006 in the Appalachian order would 

have totaled $4,073,312. This is 

$360,000 less than what would have 

been paid with the MRF and the lower 

of a plant’s Class I use or marketwide 

Class I utilization. Accordingly, the 

current $0.15 assessment rate for the 

Appalachian order appears to be 

sufficient to meet all claims even when 

paying transportation credits on full 

loads of milk delivered to Class I plants 

regulated by the order. 

The record indicates that for the past 

three years, the transportation credit 

balancing fund for the Southeast order 

has been insufficient to pay 

transportation credit claims. Record 

evidence indicates that during 2006, 

Southeast order transportation credit 

payments were prorated to 81, 36, 39 

and 64 percent of the transportation 

credit claims for the months of 

September, October, November and 

December, respectively. Such 

transportation credit claims also have 

increased in number of pounds and in 

number of miles. Specifically, the total 

pounds claimed for the receipt of 

transportation credits has increased 

from 374 million pounds for July 

through December 2000 to 820 million 

pounds for July through December 

2006—an increase of 119 percent. 

Increasing the maximum 

transportation credit assessment for the 

Southeast order should not result in an 

unnecessary accumulation of funds. For 

the Southeast order, the record indicates 

that transportation credits paid in 2006 

would have totaled $15,704,872 for the 

month of July through December and 

would have totaled $18,604,872 by 

including the months of January and 

February. This analysis is based on 

using the same MRF of $0.044 as in the 

Appalachian order analysis, paying of 

transportation credit claims on full 

loads of milk, and with the proposed 

Class I price adjustments. However, the 

current assessment rate of $0.20 per cwt 

falls far short of the total revenue 

needed to pay all expected 

transportation credit claims. Even a 

$0.30 per cwt assessment may not 

generate sufficient revenue to meet all 

expected claims on full loads of 

supplemental milk. Nevertheless, it is a 

superior assessment rate than the 

current rate of $0.20 per cwt. 

Determining those producers eligible 

to receive a transportation credit on 

their supplemental milk deliveries 

requires that the dairy farm must be 

located outside either the Appalachian 

or the Southeast marketing areas, the 

producer must not meet the producer 

definition of the orders during more 

than 2 of the immediately preceding 

months of February through May and 

not more than 50 percent of the milk 

production of the dairy farmer during 

those two months, in aggregate, can be 

received as producer milk under the 

order during those 2 months. 

DCMA has proposed that these 

requirements for the Appalachian and 

Southeast orders be made more flexible 

without substantially changing the 

identification of milk that is not a 

regular part of the supply of milk to the 

two orders. Specifically proposed is that 

a dairy farmer must not be a producer 

on the orders of more than 45 of the 92 

days in the months March through May 

or must have less than 50 percent of the 

producer’s milk pooled on the orders 

during those three months combined. 

On the basis of record testimony, this 

is a reasonable change. Specifically, it 

represents a change that provides 

flexibility in identifying supplemental 


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milk producers and may result in lower 

operational costs to those producers 

incurring the costs of supplying 

supplemental milk to the Appalachian 

and Southeast marketing areas. 

Additionally, February is currently a 

month when a supplemental milk 

producer may not participate in either 

order’s marketwide pool. Since this 

decision adopts providing for the month 

of February as a month in which 

transportation credit payments can be 

made, it is necessary to redefine the 

months in which a producer may not be 

pooled on either order. Accordingly, 

changing these features of the orders’

transportation credit balancing fund 

provisions are reasonable. 

The adopted changes are detailed in 

the order language provided below. 

4. Determining Whether Emergency 

Marketing Conditions Exist That Would 

Warrant Omission of a Recommended 

Decision and Opportunity To File 

Written Exceptions 

Evidence presented at the hearing and 

in post-hearing briefs establishes that 

several provisions of the three 

southeastern milk marketing orders are 

inadequate to meet the objectives of 

such orders. The inadequacies are 

contributing to a rapid decline in local 

milk production relative to population 

such that the orders are not setting 

prices that generate sufficient revenue to 

attract an adequate supply of milk for 

fluid use from local milk production, 

from sources outside of the marketing 

areas or some combination of both. The 

adopted changes to the Appalachian, 

Southeast, and Florida orders form an 

integrated package of simultaneous 

changes necessary to improve the 

marketing conditions of the 

southeastern region that no single 

change can be reasonably expected to 

accomplish. By increasing revenue 

through adjustment of minimum Class I 

prices, better defining the milk of those 

producers who consistently and 

regularly supply the Class I needs of the 

Appalachian and Southeast marketing 

areas, and providing for more flexible 

eligibility criteria and expanded 

payment of transportation credits to 

those who supply the Appalachian and 

Southeast marketing areas with 

supplemental milk supplies, the 

southeastern region will be better 

assured an adequate supply of milk for 

fluid uses. The record also contains 

requests by numerous parties that the 

adopted amendments should be 

implemented on an emergency basis. 

Consequently, it is determined that 

emergency marketing conditions exist 

that warrant omitting the issuance of a 

recommended decision. The record 

clearly establishes a basis as noted 

above for amending the orders on an 

interim basis. The opportunity to file 

written exceptions to the proposed 

amended orders remains. 

Conforming Changes 

Conforming changes are hereby made 

to Part 1000.50 Class prices, component 

prices, and advanced pricing factors. 

Specifically, the Class I skim milk price 

and the Class I butterfat price provisions 

need to be changed in order to conform 

with the amendments adopted in this 

proceeding as provided for in Proposal 

7 of the hearing notice. The changes to 

7 CFR Part 1000.50 (b) and (c) include 

reference to the adjustments adopted to 

Class I prices specified in 7 CFR 

1005.51(b), 1006.51(b) and 1007.51(b). 

In view of these findings, an interim 

final rule amending the orders will be 

issued as soon as the procedures to 

determine the approval of producers are 

completed. 

Rulings on Proposed Findings and 

Conclusions 

Briefs, proposed findings and 

conclusions were filed on behalf of 

certain interested parties. These briefs, 

proposed findings and conclusions, and 

the evidence in the record were 

considered in making the findings and 

conclusions set forth above. To the 

extent that the suggested findings and 

conclusions filed by interested parties 

are inconsistent with the findings and 

conclusions set forth herein, the claims 

to make such findings or reach such 

conclusions are denied for the reasons 

previously stated in this decision. 

General Findings 

The findings and determinations 

hereinafter set forth supplement those 

that were made when the Appalachian, 

Florida and Southeast 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. 

The following findings are hereby 

made with respect to the aforesaid 

marketing agreements and orders: 

(a) The interim marketing agreements 

and the orders, as hereby proposed to be 

amended, and all of the terms and 

conditions thereof, will tend to 

effectuate the declared policy of the Act; 

(b) The parity prices of milk as 

determined pursuant to section 2 of the 

Act are not reasonable with respect to 

the price of feeds, available supplies of 

feeds, and other economic conditions 

that affect market supply and demand 

for milk in the marketing area, and the 

minimum prices specified in the interim 

marketing agreements and the orders, as 

hereby proposed to be amended, are 

such prices as will reflect the aforesaid 

factors, ensure a sufficient quantity of 

pure and wholesome milk, and be in the 

public interest; and 

(c) The interim marketing agreements 

and the orders, as hereby proposed to be 

amended, will regulate the handling of 

milk in the same manner as, and will be 

applicable only to persons in the 

respective classes of industrial and 

commercial activity specified in, the 

marketing agreements upon which a 

hearing have been held. 

Interim Marketing Agreement and 

Interim Order Amending the Order 

Annexed hereto and made a part 

hereof are two documents—an Interim 

Marketing Agreement regulating the 

handling of milk and an Interim Order 

amending the order regulating the 

handling of milk in the Appalachian, 

Florida and Southeast marketing areas, 

which have been decided upon as the 

detailed and appropriate means of 

effectuating the foregoing conclusions. 

It is hereby ordered, that this entire 

tentative partial decision and the 

interim orders and the interim 

marketing agreements annexed hereto 

be published in the Federal Register. 

Determination of Producer Approval 

and Representative Period 

The month of June 2007 is hereby 

determined to be the representative 

period for the purpose of ascertaining 

whether the issuance of the order, as 

amended and as hereby proposed to be 

amended, regulating the handling of 

milk in the Appalachian, Florida and 

Southeast marketing areas is approved 

or favored by producers, as defined 

under the terms of the order as hereby 

proposed to be amended, who during 

such representative period were 

engaged in the production of milk for 

sale within the aforesaid marketing area. 

List of Subjects in 7 CFR Parts 1005, 

1006 and 1007 

Milk marketing order. 

Dated: February 25, 2008. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

Interim Order Amending the Order 

Regulating the Handling of Milk in the 

Appalachian, Florida and Southeast 

Marketing Areas 

This interim order shall not become 

effective until the requirements of 

§ 900.14 of the rules of practice and 

procedure governing proceedings to 

formulate marketing agreements and 

marketing orders have been met. 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11213 

Findings and Determinations 

The findings and determinations 

hereinafter set forth 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 

Appalachian, Florida and Southeast 

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 said orders as hereby 

amended, 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 orders 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 said orders as hereby 

amended regulate the handling of milk 

in the same manner as, and are 

applicable only to persons in the 

respective classes of industrial or 

commercial activity specified in, a 

marketing agreement upon which a 

hearing has been held. 

Order Relative to Handling 

It is therefore ordered, that on and 

after the effective date hereof, the 

handling of milk in the Appalachian, 

Florida and Southeast marketing areas 

shall be in conformity to and in 

compliance with the terms and 

conditions of the orders, as amended, 

and as hereby amended, as follows: 

List of Subjects in 7 CFR Parts 1000, 

1005, 1006, and 1007 

Milk marketing orders. 

For the reasons set forth in the 

preamble, the Agricultural Marketing 

Service proposes to amend Chapter X of 

Title 7 of the Code of Federal 

Regulations as follows: 

1. The authority citation for 7 CFR 

parts 1000, 1005, 1006 and 1007 

continues to read as follows: 

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

PART 1000—[AMENDED] 

2. Amend § 1000.50 by revising 

paragraphs (b) and (c) to read as follows: 

§ 1000.50 Class prices, component prices, 

and advanced pricing factors. 

* * * * * 

(b) Class I skim milk price. The Class 

I skim milk price per hundredweight 

shall be the adjusted Class I differential 

specified in § 1000.52, plus the 

adjustment to Class I prices specified in 

§ 1005.51(b), § 1006.51(b) and 

§ 1007.51(b), plus the higher of the 

advanced pricing factors computed in 

paragraph (q)(1) or (2) of this section. 

(c) Class I butterfat price. The Class I 

butterfat price per pound shall be the 

adjusted Class I differential specified in 

§ 1000.52 divided by 100, plus the 

adjustments to Class I prices specified 

in § 1005.51(b), 1006.51(b) and 

1007.51(b) divided by 100, plus the 

advanced butterfat price computed in 

paragraph (q)(3) of this section. 

* * * * * 

PART 1005—[AMENDED] 

3. Revise § 1005.51 to read as follows: 

§ 1005.51 Class I differential, adjustments 

to Class I prices, and Class I price. 

(a) The Class I differential shall be the 

differential established for Mecklenburg 

County, North Carolina, which is 

reported in § 1000.52. The Class I price 

shall be the price computed pursuant to 

§ 1005.50(a) for Mecklenburg County, 

North Carolina. 

(b) Adjustment to Class I prices. Class 

I prices shall be established pursuant to 

§ 1000.50(a), (b) and (c) using the 

following adjustments: 

State County/Parish FIPS Class I 

price adjustment 

GA .......................... CATOOSA ............................................................................................................... 13047 0.60 

GA .......................... CHATTOOGA .......................................................................................................... 13055 0.60 

GA .......................... DADE ...................................................................................................................... 13083 0.60 

GA .......................... FANNIN ................................................................................................................... 13111 0.60 

GA .......................... MURRAY ................................................................................................................. 13213 0.60 

GA .......................... WALKER ................................................................................................................. 13295 0.60 

GA .......................... WHITFIELD ............................................................................................................. 13313 0.60 

IN ........................... CLARK .................................................................................................................... 18019 0.10 

IN ........................... CRAWFORD ........................................................................................................... 18025 0.10 

IN ........................... DAVIESS ................................................................................................................. 18027 0.10 

IN ........................... DUBOIS ................................................................................................................... 18037 0.10 

IN ........................... FLOYD .................................................................................................................... 18043 0.10 

IN ........................... GIBSON .................................................................................................................. 18051 0.10 

IN ........................... GREENE ................................................................................................................. 18055 0.10 

IN ........................... HARRISON ............................................................................................................. 18061 0.10 

IN ........................... KNOX ...................................................................................................................... 18083 0.10 

IN ........................... MARTIN ................................................................................................................... 18101 0.10 

IN ........................... ORANGE ................................................................................................................. 18117 0.10 

IN ........................... PERRY .................................................................................................................... 18123 0.10 

IN ........................... PIKE ........................................................................................................................ 18125 0.10 

IN ........................... POSEY .................................................................................................................... 18129 0.10 

IN ........................... SCOTT .................................................................................................................... 18143 0.10 

IN ........................... SPENCER ............................................................................................................... 18147 0.10 

IN ........................... SULLIVAN ............................................................................................................... 18153 0.10 

IN ........................... VANDERBURGH .................................................................................................... 18163 0.10 

IN ........................... WARRICK ............................................................................................................... 18173 0.10 

IN ........................... WASHINGTON ........................................................................................................ 18175 0.10 

KY .......................... ADAIR ..................................................................................................................... 21001 0.20 


rwilkins on PROD1PC63 with PROPOSALS2
11214 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

State County/Parish FIPS Class I 

price adjustment 

KY .......................... ANDERSON ............................................................................................................ 21005 0.40 

KY .......................... BATH ....................................................................................................................... 21011 0.40 

KY .......................... BELL ........................................................................................................................ 21013 0.50 

KY .......................... BOURBON .............................................................................................................. 21017 0.40 

KY .......................... BOYLE .................................................................................................................... 21021 0.40 

KY .......................... BREATHITT ............................................................................................................ 21025 0.70 

KY .......................... BRECKINRIDGE ..................................................................................................... 21027 0.10 

KY .......................... BULLITT .................................................................................................................. 21029 0.10 

KY .......................... BUTLER .................................................................................................................. 21031 0.20 

KY .......................... CARROLL ............................................................................................................... 21041 0.10 

KY .......................... CARTER .................................................................................................................. 21043 0.40 

KY .......................... CASEY .................................................................................................................... 21045 0.20 

KY .......................... CLARK .................................................................................................................... 21049 0.40 

KY .......................... CLAY ....................................................................................................................... 21051 0.50 

KY .......................... CLINTON ................................................................................................................. 21053 0.50 

KY .......................... CUMBERLAND ....................................................................................................... 21057 0.50 

KY .......................... DAVIESS ................................................................................................................. 21059 0.10 

KY .......................... EDMONSON ........................................................................................................... 21061 0.20 

KY .......................... ELLIOTT .................................................................................................................. 21063 0.40 

KY .......................... ESTILL .................................................................................................................... 21065 0.40 

KY .......................... FAYETTE ................................................................................................................ 21067 0.40 

KY .......................... FLEMING ................................................................................................................ 21069 0.40 

KY .......................... FRANKLIN ............................................................................................................... 21073 0.10 

KY .......................... GALLATIN ............................................................................................................... 21077 0.10 

KY .......................... GARRARD .............................................................................................................. 21079 0.40 

KY .......................... GRAYSON .............................................................................................................. 21085 0.20 

KY .......................... GREEN .................................................................................................................... 21087 0.20 

KY .......................... HANCOCK .............................................................................................................. 21091 0.10 

KY .......................... HARDIN ................................................................................................................... 21093 0.10 

KY .......................... HARLAN .................................................................................................................. 21095 0.50 

KY .......................... HART ....................................................................................................................... 21099 0.20 

KY .......................... HENDERSON ......................................................................................................... 21101 0.10 

KY .......................... HENRY .................................................................................................................... 21103 0.10 

KY .......................... HOPKINS ................................................................................................................ 21107 0.20 

KY .......................... JACKSON ............................................................................................................... 21109 0.70 

KY .......................... JEFFERSON ........................................................................................................... 21111 0.10 

KY .......................... JESSAMINE ............................................................................................................ 21113 0.40 

KY .......................... KNOTT .................................................................................................................... 21119 0.50 

KY .......................... KNOX ...................................................................................................................... 21121 0.50 

KY .......................... LARUE .................................................................................................................... 21123 0.40 

KY .......................... LAUREL .................................................................................................................. 21125 0.50 

KY .......................... LEE .......................................................................................................................... 21129 0.40 

KY .......................... LESLIE .................................................................................................................... 21131 0.50 

KY .......................... LETCHER ................................................................................................................ 21133 0.50 

KY .......................... LINCOLN ................................................................................................................. 21137 0.40 

KY .......................... MC CREARY ........................................................................................................... 21147 0.50 

KY .......................... MC LEAN ................................................................................................................ 21149 0.40 

KY .......................... MADISON ................................................................................................................ 21151 0.40 

KY .......................... MARION .................................................................................................................. 21155 0.40 

KY .......................... MEADE .................................................................................................................... 21163 0.10 

KY .......................... MENIFEE ................................................................................................................ 21165 0.40 

KY .......................... MERCER ................................................................................................................. 21167 0.40 

KY .......................... MONTGOMERY ...................................................................................................... 21173 0.40 

KY .......................... MORGAN ................................................................................................................ 21175 0.40 

KY .......................... MUHLENBURG ....................................................................................................... 21177 0.20 

KY .......................... NELSON .................................................................................................................. 21179 0.10 

KY .......................... NICHOLAS .............................................................................................................. 21181 0.40 

KY .......................... OHIO ....................................................................................................................... 21183 0.20 

KY .......................... OLDHAM ................................................................................................................. 21185 0.10 

KY .......................... OWEN ..................................................................................................................... 21187 0.10 

KY .......................... OWSLEY ................................................................................................................. 21189 0.70 

KY .......................... PERRY .................................................................................................................... 21193 0.50 

KY .......................... POWELL ................................................................................................................. 21197 0.40 

KY .......................... PULASKI ................................................................................................................. 21199 0.50 

KY .......................... ROCKCASTLE ........................................................................................................ 21203 0.70 

KY .......................... ROWAN ................................................................................................................... 21205 0.40 

KY .......................... RUSSELL ................................................................................................................ 21207 0.50 

KY .......................... SCOTT .................................................................................................................... 21209 0.10 

KY .......................... SHELBY .................................................................................................................. 21211 0.10 

KY .......................... SPENCER ............................................................................................................... 21215 0.10 

KY .......................... TAYLOR .................................................................................................................. 21217 0.20 

KY .......................... TRIMBLE ................................................................................................................. 21223 0.10 

KY .......................... UNION ..................................................................................................................... 21225 0.10 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11215 

State County/Parish FIPS Class I 

price adjustment 

KY .......................... WASHINGTON ........................................................................................................ 21229 0.40 

KY .......................... WAYNE ................................................................................................................... 21231 0.50 

KY .......................... WEBSTER ............................................................................................................... 21233 0.20 

KY .......................... WHITLEY ................................................................................................................ 21235 0.50 

KY .......................... WOLFE .................................................................................................................... 21237 0.40 

KY .......................... WOODFORD ........................................................................................................... 21239 0.40 

NC .......................... ALAMANCE ............................................................................................................. 37001 0.30 

NC .......................... ALEXANDER ........................................................................................................... 37003 0.45 

NC .......................... ALLEGHANY ........................................................................................................... 37005 0.45 

NC .......................... ANSON .................................................................................................................... 37007 0.50 

NC .......................... ASHE ....................................................................................................................... 37009 0.45 

NC .......................... AVERY .................................................................................................................... 37011 0.45 

NC .......................... BEAUFORT ............................................................................................................. 37013 0.40 

NC .......................... BERTIE ................................................................................................................... 37015 0.20 

NC .......................... BLADEN .................................................................................................................. 37017 0.70 

NC .......................... BRUNSWICK .......................................................................................................... 37019 0.70 

NC .......................... BUNCOMBE ............................................................................................................ 37021 0.45 

NC .......................... BURKE .................................................................................................................... 37023 0.45 

NC .......................... CABARRUS ............................................................................................................ 37025 0.30 

NC .......................... CALDWELL ............................................................................................................. 37027 0.45 

NC .......................... CAMDEN ................................................................................................................. 37029 0.20 

NC .......................... CARTERET ............................................................................................................. 37031 0.40 

NC .......................... CASWELL ............................................................................................................... 37033 0.30 

NC .......................... CATAWBA ............................................................................................................... 37035 0.30 

NC .......................... CHATHAM ............................................................................................................... 37037 0.30 

NC .......................... CHEROKEE ............................................................................................................ 37039 0.45 

NC .......................... CHOWAN ................................................................................................................ 37041 0.20 

NC .......................... CLAY ....................................................................................................................... 37043 0.45 

NC .......................... CLEVELAND ........................................................................................................... 37045 0.30 

NC .......................... COLUMBUS ............................................................................................................ 37047 0.70 

NC .......................... CRAVEN ................................................................................................................. 37049 0.40 

NC .......................... CUMBERLAND ....................................................................................................... 37051 0.30 

NC .......................... CURRITUCK ........................................................................................................... 37053 0.20 

NC .......................... DARE ...................................................................................................................... 37055 0.40 

NC .......................... DAVIDSON .............................................................................................................. 37057 0.30 

NC .......................... DAVIE ...................................................................................................................... 37059 0.30 

NC .......................... DUPLIN ................................................................................................................... 37061 0.30 

NC .......................... DURHAM ................................................................................................................. 37063 0.30 

NC .......................... EDGECOMBE ......................................................................................................... 37065 0.20 

NC .......................... FORSYTH ............................................................................................................... 37067 0.30 

NC .......................... FRANKLIN ............................................................................................................... 37069 0.30 

NC .......................... GASTON ................................................................................................................. 37071 0.30 

NC .......................... GATES .................................................................................................................... 37073 0.20 

NC .......................... GRAHAM ................................................................................................................. 37075 0.45 

NC .......................... GRANVILLE ............................................................................................................ 37077 0.30 

NC .......................... GREENE ................................................................................................................. 37079 0.40 

NC .......................... GUILFORD .............................................................................................................. 37081 0.30 

NC .......................... HALIFAX ................................................................................................................. 37083 0.30 

NC .......................... HARNETT ............................................................................................................... 37085 0.10 

NC .......................... HAYWOOD ............................................................................................................. 37087 0.45 

NC .......................... HENDERSON ......................................................................................................... 37089 0.45 

NC .......................... HERTFORD ............................................................................................................ 37091 0.20 

NC .......................... HOKE ...................................................................................................................... 37093 0.30 

NC .......................... HYDE ...................................................................................................................... 37095 0.40 

NC .......................... IREDELL ................................................................................................................. 37097 0.30 

NC .......................... JACKSON ............................................................................................................... 37099 0.45 

NC .......................... JOHNSTON ............................................................................................................. 37101 0.20 

NC .......................... JONES .................................................................................................................... 37103 0.40 

NC .......................... LEE .......................................................................................................................... 37105 0.30 

NC .......................... LENOIR ................................................................................................................... 37107 0.40 

NC .......................... LINCOLN ................................................................................................................. 37109 0.30 

NC .......................... MC DOWELL .......................................................................................................... 37111 0.45 

NC .......................... MACON ................................................................................................................... 37113 0.45 

NC .......................... MADISON ................................................................................................................ 37115 0.45 

NC .......................... MARTIN ................................................................................................................... 37117 0.40 

NC .......................... MECKLENBURG ..................................................................................................... 37119 0.30 

NC .......................... MITCHELL ............................................................................................................... 37121 0.45 

NC .......................... MONTGOMERY ...................................................................................................... 37123 0.30 

NC .......................... MOORE ................................................................................................................... 37125 0.30 

NC .......................... NASH ...................................................................................................................... 37127 0.30 

NC .......................... NEW HANOVER ..................................................................................................... 37129 0.70 

NC .......................... NORTHAMPTON .................................................................................................... 37131 0.30 

NC .......................... ONSLOW ................................................................................................................ 37133 0.30 


rwilkins on PROD1PC63 with PROPOSALS2
11216 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

State County/Parish FIPS Class I 

price adjustment 

NC .......................... ORANGE ................................................................................................................. 37135 0.30 

NC .......................... PAMLICO ................................................................................................................ 37137 0.40 

NC .......................... PASQUOTANK ....................................................................................................... 37139 0.20 

NC .......................... PENDER ................................................................................................................. 37141 0.70 

NC .......................... PERQUIMANS ........................................................................................................ 37143 0.20 

NC .......................... PERSON ................................................................................................................. 37145 0.30 

NC .......................... PITT ......................................................................................................................... 37147 0.40 

NC .......................... POLK ....................................................................................................................... 37149 0.30 

NC .......................... RANDOLPH ............................................................................................................ 37151 0.30 

NC .......................... RICHMOND ............................................................................................................. 37153 0.50 

NC .......................... ROBESON .............................................................................................................. 37155 0.70 

NC .......................... ROCKINGHAM ........................................................................................................ 37157 0.45 

NC .......................... ROWAN ................................................................................................................... 37159 0.30 

NC .......................... RUTHERFORD ....................................................................................................... 37161 0.30 

NC .......................... SAMPSON .............................................................................................................. 37163 0.30 

NC .......................... SCOTLAND ............................................................................................................. 37165 0.30 

NC .......................... STANLY .................................................................................................................. 37167 0.30 

NC .......................... STOKES .................................................................................................................. 37169 0.45 

NC .......................... SURRY .................................................................................................................... 37171 0.45 

NC .......................... SWAIN ..................................................................................................................... 37173 0.45 

NC .......................... TRANSYLVANIA ..................................................................................................... 37175 0.45 

NC .......................... TYRRELL ................................................................................................................ 37177 0.40 

NC .......................... UNION ..................................................................................................................... 37179 0.50 

NC .......................... VANCE .................................................................................................................... 37181 0.30 

NC .......................... WAKE ...................................................................................................................... 37183 0.30 

NC .......................... WARREN ................................................................................................................ 37185 0.30 

NC .......................... WASHINGTON ........................................................................................................ 37187 0.40 

NC .......................... WATAUGA .............................................................................................................. 37189 0.45 

NC .......................... WAYNE ................................................................................................................... 37191 0.40 

NC .......................... WILKES ................................................................................................................... 37193 0.45 

NC .......................... WILSON .................................................................................................................. 37195 0.20 

NC .......................... YADKIN ................................................................................................................... 37197 0.30 

NC .......................... YANCEY .................................................................................................................. 37199 0.45 

SC .......................... ABBEVILLE ............................................................................................................. 45001 0.50 

SC .......................... AIKEN ...................................................................................................................... 45003 0.70 

SC .......................... ALLENDALE ............................................................................................................ 45005 1.00 

SC .......................... ANDERSON ............................................................................................................ 45007 0.50 

SC .......................... BAMBERG .............................................................................................................. 45009 0.70 

SC .......................... BARNWELL ............................................................................................................. 45011 0.70 

SC .......................... BEAUFORT ............................................................................................................. 45013 1.00 

SC .......................... BERKELEY ............................................................................................................. 45015 1.00 

SC .......................... CALHOUN ............................................................................................................... 45017 0.70 

SC .......................... CHARLESTON ........................................................................................................ 45019 1.00 

SC .......................... CHEROKEE ............................................................................................................ 45021 0.50 

SC .......................... CHESTER ............................................................................................................... 45023 0.50 

SC .......................... CHESTERFIELD ..................................................................................................... 45025 0.30 

SC .......................... CLARENDON .......................................................................................................... 45027 0.70 

SC .......................... COLLETON ............................................................................................................. 45029 1.00 

SC .......................... DARLINGTON ......................................................................................................... 45031 0.70 

SC .......................... DILLON ................................................................................................................... 45033 0.70 

SC .......................... DORCHESTER ....................................................................................................... 45035 1.00 

SC .......................... EDGEFIELD ............................................................................................................ 45037 0.30 

SC .......................... FAIRFIELD .............................................................................................................. 45039 0.30 

SC .......................... FLORENCE ............................................................................................................. 45041 0.70 

SC .......................... GEORGETOWN ...................................................................................................... 45043 0.70 

SC .......................... GREENVILLE .......................................................................................................... 45045 0.50 

SC .......................... GREENWOOD ........................................................................................................ 45047 0.50 

SC .......................... HAMPTON .............................................................................................................. 45049 1.00 

SC .......................... HORRY ................................................................................................................... 45051 0.70 

SC .......................... JASPER .................................................................................................................. 45053 1.00 

SC .......................... KERSHAW .............................................................................................................. 45055 0.30 

SC .......................... LANCASTER ........................................................................................................... 45057 0.50 

SC .......................... LAURENS ............................................................................................................... 45059 0.50 

SC .......................... LEE .......................................................................................................................... 45061 0.70 

SC .......................... LEXINGTON ............................................................................................................ 45063 0.70 

SC .......................... MC CORMICK ......................................................................................................... 45065 0.50 

SC .......................... MARION .................................................................................................................. 45067 0.70 

SC .......................... MARLBORO ............................................................................................................ 45069 0.70 

SC .......................... NEWBERRY ............................................................................................................ 45071 0.30 

SC .......................... OCONEE ................................................................................................................. 45073 0.50 

SC .......................... ORANGEBURG ...................................................................................................... 45075 0.70 

SC .......................... PICKENS ................................................................................................................. 45077 0.50 

SC .......................... RICHLAND .............................................................................................................. 45079 0.70 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11217 

State County/Parish FIPS Class I 

price adjustment 

SC .......................... SALUDA .................................................................................................................. 45081 0.30 

SC .......................... SPARTANBURG ..................................................................................................... 45083 0.50 

SC .......................... SUMTER ................................................................................................................. 45085 0.70 

SC .......................... UNION ..................................................................................................................... 45087 0.50 

SC .......................... WILLIAMSBURG ..................................................................................................... 45089 0.70 

SC .......................... YORK ...................................................................................................................... 45091 0.50 

TN .......................... ANDERSON ............................................................................................................ 47001 0.40 

TN .......................... BLOUNT .................................................................................................................. 47009 0.40 

TN .......................... BRADLEY ................................................................................................................ 47011 0.60 

TN .......................... CAMPBELL ............................................................................................................. 47013 0.40 

TN .......................... CARTER .................................................................................................................. 47019 0.40 

TN .......................... CLAIBORNE ............................................................................................................ 47025 0.40 

TN .......................... COCKE .................................................................................................................... 47029 0.40 

TN .......................... CUMBERLAND ....................................................................................................... 47035 0.40 

TN .......................... GRAINGER ............................................................................................................. 47057 0.40 

TN .......................... GREENE ................................................................................................................. 47059 0.40 

TN .......................... HAMBLEN ............................................................................................................... 47063 0.40 

TN .......................... HAMILTON .............................................................................................................. 47065 0.60 

TN .......................... HANCOCK .............................................................................................................. 47067 0.40 

TN .......................... HAWKINS ................................................................................................................ 47073 0.40 

TN .......................... JEFFERSON ........................................................................................................... 47089 0.40 

TN .......................... JOHNSON ............................................................................................................... 47091 0.40 

TN .......................... KNOX ...................................................................................................................... 47093 0.40 

TN .......................... LOUDON ................................................................................................................. 47105 0.40 

TN .......................... MC MINN ................................................................................................................ 47107 0.60 

TN .......................... MARION .................................................................................................................. 47115 0.60 

TN .......................... MEIGS ..................................................................................................................... 47121 0.60 

TN .......................... MONROE ................................................................................................................ 47123 0.60 

TN .......................... MORGAN ................................................................................................................ 47129 0.40 

TN .......................... POLK ....................................................................................................................... 47139 0.60 

TN .......................... RHEA ...................................................................................................................... 47143 0.40 

TN .......................... ROANE .................................................................................................................... 47145 0.40 

TN .......................... SCOTT .................................................................................................................... 47151 0.10 

TN .......................... SEQUATCHIE ......................................................................................................... 47153 0.40 

TN .......................... SEVIER ................................................................................................................... 47155 0.40 

TN .......................... SULLIVAN ............................................................................................................... 47163 0.40 

TN .......................... UNICOI .................................................................................................................... 47171 0.40 

TN .......................... UNION ..................................................................................................................... 47173 0.40 

TN .......................... WASHINGTON ........................................................................................................ 47179 0.40 

VA .......................... ALLEGHANY ........................................................................................................... 51005 0.10 

VA .......................... AMHERST ............................................................................................................... 51009 0.40 

VA .......................... AUGUSTA ............................................................................................................... 51015 0.10 

VA .......................... BATH ....................................................................................................................... 51017 0.10 

VA .......................... BEDFORD ............................................................................................................... 51019 0.40 

VA .......................... BLAND .................................................................................................................... 51021 0.40 

VA .......................... BOTETOURT .......................................................................................................... 51023 0.10 

VA .......................... BUCHANAN ............................................................................................................ 51027 0.10 

VA .......................... CAMPBELL ............................................................................................................. 51031 0.40 

VA .......................... CARROLL ............................................................................................................... 51035 0.40 

VA .......................... CRAIG ..................................................................................................................... 51045 0.10 

VA .......................... DICKENSON ........................................................................................................... 51051 0.40 

VA .......................... FLOYD .................................................................................................................... 51063 0.40 

VA .......................... FRANKLIN ............................................................................................................... 51067 0.40 

VA .......................... GILES ...................................................................................................................... 51071 0.10 

VA .......................... GRAYSON .............................................................................................................. 51077 0.40 

VA .......................... HENRY .................................................................................................................... 51089 0.40 

VA .......................... HIGHLAND .............................................................................................................. 51091 0.10 

VA .......................... LEE .......................................................................................................................... 51105 0.40 

VA .......................... MONTGOMERY ...................................................................................................... 51121 0.40 

VA .......................... PATRICK ................................................................................................................. 51141 0.40 

VA .......................... PITTSYLVANIA ....................................................................................................... 51143 0.40 

VA .......................... PULASKI ................................................................................................................. 51155 0.40 

VA .......................... ROANOKE .............................................................................................................. 51161 0.40 

VA .......................... ROCKBRIDGE ........................................................................................................ 51163 0.10 

VA .......................... ROCKINGHAM ........................................................................................................ 51165 0.10 

VA .......................... RUSSELL ................................................................................................................ 51167 0.40 

VA .......................... SCOTT .................................................................................................................... 51169 0.40 

VA .......................... SMYTH .................................................................................................................... 51173 0.40 

VA .......................... TAZEWELL ............................................................................................................. 51185 0.40 

VA .......................... WASHINGTON ........................................................................................................ 51191 0.40 

VA .......................... WISE ....................................................................................................................... 51195 0.40 

VA .......................... WYTHE ................................................................................................................... 51197 0.40 

VA .......................... BEDFORD CITY ..................................................................................................... 51515 0.40 


rwilkins on PROD1PC63 with PROPOSALS2
11218 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

State County/Parish FIPS Class I 

price adjustment 

VA .......................... BRISTOL CITY ........................................................................................................ 51520 0.40 

VA .......................... BUENA VISTA CITY ............................................................................................... 51530 0.10 

VA .......................... CLIFTON FORGE CITY .......................................................................................... 51560 0.10 

VA .......................... COVINGTON CITY ................................................................................................. 51580 0.10 

VA .......................... DANVILLE CITY ...................................................................................................... 51590 0.40 

VA .......................... GALAX CITY ........................................................................................................... 51640 0.40 

VA .......................... HARRISONBURG CITY .......................................................................................... 51660 0.10 

VA .......................... LEXINGTON CITY .................................................................................................. 51678 0.10 

VA .......................... LYNCHBURG CITY ................................................................................................ 51680 0.40 

VA .......................... MARTINSVILLE CITY ............................................................................................. 51690 0.40 

VA .......................... NORTON CITY ....................................................................................................... 51720 0.40 

VA .......................... RADFORD CITY ..................................................................................................... 51750 0.40 

VA .......................... ROANOKE CITY ..................................................................................................... 51770 0.40 

VA .......................... SALEM CITY ........................................................................................................... 51775 0.40 

VA .......................... STAUNTON CITY ................................................................................................... 51790 0.10 

VA .......................... WAYNESBORO CITY ............................................................................................. 51820 0.10 

WV ......................... MC DOWELL .......................................................................................................... 54047 0.10 

WV ......................... MERCER ................................................................................................................. 54055 0.10 

4. Amend § 1005.13 by revising 

paragraph (d)(1) through (4) to read as 

follows: 

§ 1005.13 Producer Milk. 

* * * * * 

(d) * * * 

(1) In any month of July through 

December, not less than 1 day’s 

production of the producer whose milk 

is diverted is physically received at a 

pool plant during the month; 

(2) In any month of January through 

June, not less than 1 day’s 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 

25 percent during the months of July 

through November, January, and 

February, and 35 percent during the 

months of December and March 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 25 percent 

during the months of July through 

November, January, and February, and 

35 percent during the months of 

December and March 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 § 1005.7(d)) during the 

month, excluding the quantity of 

producer milk received from handler 

described in § 1000.9(c); 

* * * * * 

5. Amend § 1005.81 by revising (a) to 

read as follows: 

§ 1005.81 Payments to the transportation 

credit balancing fund. 

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

end of the month (except) as provided 

in § 1009.90), each handler operating a 

pool plant and each handler specified in 

§ 1000.9(c) shall pay to the Market 

Administrator a transportation credit 

balancing fund assessment determined 

by multiplying the pounds of Class I 

producer milk assigned pursuant to 

§ 1005.44 by $0.15 per hundredweight 

or such lesser amount as the Market 

Administrator deems necessary to 

maintain a balance in the fund equal to 

the total transportation credits 

disbursed during the prior June–

February period. In the event that 

during any month of the June–February 

period the fund balance is insufficient 

to cover the amount of credits that are 

due, the assessment should be based 

upon the amount of credits that would 

have been disbursed had the fund 

balance been sufficient. 

* * * * * 

6. Amend § 1005.82 by revising 

paragraphs (a)(1), (b), (c)(1), removing 

paragraph (c)(2)(i), revising paragraphs 

(d)(2) (iii), (d)(3)(v), and redesignating 

paragraphs (c)(2)(ii), (c)(2)(iii), (c)(2)(iv) 

as (c)(2)(i), (c)(2)(ii) and (c)(2)(iii), and 

revising newly redesignated paragraphs 

(c)(2)(i) and (c)(2)(iii) to read as follows: 

§ 1005.82 Payments from the 

transportation credit balancing fund. 

(a) * * * 

(1) On or before the 13th day (except 

as provided in § 1000.90) after the end 

of each of the months of January, 

February and July through December 

and any other month in which 

transportation credits are in effect 

pursuant to paragraph (b) of this section, 

the market administrator shall pay to 

each handler that received, and reported 

pursuant to § 1005.30(a)(5), bulk milk 

transferred from a plant fully regulated 

under another Federal order as 

described in paragraph (c)(1) of this 

section or that received, and reported 

pursuant to § 1005.30(a)(6), milk 

directly from producers’ farms as 

specified in paragraph (c)(2) of this 

section, a preliminary amount 

determined pursuant to paragraph (d) of 

this section to the extent that funds are 

available in the transportation credit 

balancing fund. If an insufficient 

balance exists to pay all of the credits 

computed pursuant to this section, the 

market administrator shall distribute the 

balance available in the transportation 

credit balancing fund by reducing 

payments prorata using the percentage 

derived by dividing the balance in the 

fund by the total credits that are due for 

the month. The amount of credits 

resulting from this initial proration shall 

be subject to audit adjustment pursuant 

to paragraph (a)(2) of this section. 

* * * * * 

(b) The Market Administrator may 

extend the period during which 

transportation credits are in effect (i.e., 

the transportation credit period) to the 

month of June if a written request to do 

so is received 15 days prior to the 

beginning of the month for which the 

request is made and, after conducting an 

independent investigation, finds that 

such extension is necessary to assure 

the market of an adequate supply of 

milk for fluid use. Before making such 

a finding, the Market Administrator 

shall notify the Deputy Administrator of 

the Dairy Programs and all handlers in 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11219 

the market that an extension is being 

considered and invite written data, 

views, and arguments. Any decision to 

extend the transportation credit period 

must be issued in writing prior to the 

first day of the month for which the 

extension is to be effective. 

(c) * * * 

(1) Bulk milk received at a pool 

distributing plant from a plant regulated 

under another Federal order, except 

Federal Order 1007; and 

* * * * * 

(2) * * * 

(i) The dairy farmer was not a 

‘‘producer’’ under this order for more 

than 45 days during the immediately 

preceding months of March through 

May, or not more than 50 percent of the 

production of the dairy farmer during 

those 3 months, in aggregate, was 

received as producer milk under this 

order during those 3 months; and 

* * * * * 

(iii) The market administrator may 

increase or decrease the milk 

production standard specified in 

paragraph (c)(2)(i) of this section if 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 either on the market 

administrator’s own initiative or at the 

request of interested persons. 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 at least one day before the 

effective date. 

(d) * * * 

(2) * * * 

(iii) Subtract the applicable Class I 

price specified in § 1000.50(a) for the 

county in which the shipping plant is 

located from the Class I price applicable 

for the county in which the receiving 

plant is located; 

* * * * * 

(3) * * * 

(v) Subtract the Class I price specified 

in § 1000.50(a) applicable for the county 

in which the origination point is located 

from the Class I price applicable at the 

receiving pool plant’s location; 

* * * * * 

PART 1006—[AMENDED] 

7. Revise § 1006.51 to read as follows: 

§ 1006.51 Class I differential, adjustments 

to Class I prices, and Class I price. 

(a) The Class I differential shall be the 

differential established for Hillsborough 

County, Florida, which is reported in 

§ 000.52. The Class I price shall be the 

price computed pursuant to § 006.50 (a) 

for Hillsborough County, Florida. 

(b) Adjustment to Class I prices. Class 

I prices shall be established pursuant to 

§ 000.50 (a), (b) and (c) using the 

following adjustments: 

State County/Parish FIPS Class I 

price adjustment 

FL ........................... ALACHUA ............................................................................................................... 12001 1.30 

FL ........................... BAKER .................................................................................................................... 12003 1.30 

FL ........................... BAY ......................................................................................................................... 12005 0.60 

FL ........................... BRADFORD ............................................................................................................ 12007 1.30 

FL ........................... BREVARD ............................................................................................................... 12009 1.40 

FL ........................... BROWARD .............................................................................................................. 12011 1.70 

FL ........................... CALHOUN ............................................................................................................... 12013 0.60 

FL ........................... CHARLOTTE ........................................................................................................... 12015 1.50 

FL ........................... CITRUS ................................................................................................................... 12017 1.40 

FL ........................... CLAY ....................................................................................................................... 12019 1.30 

FL ........................... COLLIER ................................................................................................................. 12021 1.70 

FL ........................... COLUMBIA .............................................................................................................. 12023 1.30 

FL ........................... DADE ...................................................................................................................... 12025 1.70 

FL ........................... DE SOTO ................................................................................................................ 12027 1.80 

FL ........................... DIXIE ....................................................................................................................... 12029 1.30 

FL ........................... DUVAL .................................................................................................................... 12031 1.30 

FL ........................... FLAGLER ................................................................................................................ 12035 1.00 

FL ........................... FRANKLIN ............................................................................................................... 12037 0.90 

FL ........................... GADSDEN ............................................................................................................... 12039 0.90 

FL ........................... GILCHRIST ............................................................................................................. 12041 1.30 

FL ........................... GLADES .................................................................................................................. 12043 1.50 

FL ........................... GULF ....................................................................................................................... 12045 0.90 

FL ........................... HAMILTON .............................................................................................................. 12047 1.30 

FL ........................... HARDEE ................................................................................................................. 12049 1.80 

FL ........................... HENDRY ................................................................................................................. 12051 1.70 

FL ........................... HERNANDO ............................................................................................................ 12053 1.40 

FL ........................... HIGHLANDS ........................................................................................................... 12055 1.80 

FL ........................... HILLSBOROUGH .................................................................................................... 12057 1.40 

FL ........................... HOLMES ................................................................................................................. 12059 0.60 

FL ........................... INDIAN RIVER ........................................................................................................ 12061 1.80 

FL ........................... JACKSON ............................................................................................................... 12063 0.60 

FL ........................... JEFFERSON ........................................................................................................... 12065 0.90 

FL ........................... LAFAYETTE ............................................................................................................ 12067 1.30 

FL ........................... LAKE ....................................................................................................................... 12069 1.40 

FL ........................... LEE .......................................................................................................................... 12071 1.70 

FL ........................... LEON ....................................................................................................................... 12073 0.90 

FL ........................... LEVY ....................................................................................................................... 12075 1.00 

FL ........................... LIBERTY ................................................................................................................. 12077 0.90 

FL ........................... MADISON ................................................................................................................ 12079 1.30 

FL ........................... MANATEE ............................................................................................................... 12081 1.80 

FL ........................... MARION .................................................................................................................. 12083 1.00 

FL ........................... MARTIN ................................................................................................................... 12085 1.50 

FL ........................... MONROE ................................................................................................................ 12087 1.70 


rwilkins on PROD1PC63 with PROPOSALS2
11220 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

State County/Parish FIPS Class I 

price adjustment 

FL ........................... NASSAU .................................................................................................................. 12089 1.30 

FL ........................... OKEECHOBEE ....................................................................................................... 12093 1.80 

FL ........................... ORANGE ................................................................................................................. 12095 1.40 

FL ........................... OSCEOLA ............................................................................................................... 12097 1.40 

FL ........................... PALM BEACH ......................................................................................................... 12099 1.70 

FL ........................... PASCO .................................................................................................................... 12101 1.40 

FL ........................... PINELLAS ............................................................................................................... 12103 1.40 

FL ........................... POLK ....................................................................................................................... 12105 1.40 

FL ........................... PUTNAM ................................................................................................................. 12107 1.30 

FL ........................... SAINT JOHNS ........................................................................................................ 12109 1.30 

FL ........................... SAINT LUCIE .......................................................................................................... 12111 1.80 

FL ........................... SARASOTA ............................................................................................................. 12115 1.80 

FL ........................... SEMINOLE .............................................................................................................. 12117 1.40 

FL ........................... SUMTER ................................................................................................................. 12119 1.40 

FL ........................... SUWANNEE ............................................................................................................ 12121 1.30 

FL ........................... TAYLOR .................................................................................................................. 12123 1.30 

FL ........................... UNION ..................................................................................................................... 12125 1.30 

FL ........................... VOLUSIA ................................................................................................................. 12127 1.40 

FL ........................... WAKULLA ............................................................................................................... 12129 0.90 

FL ........................... WASHINGTON ........................................................................................................ 12133 0.60 

PART 1007—[AMENDED] 

8. Revise § 1007.51 to read as follows: 

§ 1007.51 Class I differential, adjustments 

to Class I prices, and Class I price. 

(a) The Class I differential shall be the 

differential established for Fulton 

County, Georgia, which is reported in 

§ 1000.52. The Class I price shall be the 

price computed pursuant to § 1007.50(a) 

for Fulton County, Georgia. 

(b) Adjustment to Class I prices. Class 

I prices shall be established pursuant to 

§ 1000.50(a), (b) and (c) using the 

following adjustments: 

State County/Parish FIPS Class I 

price adjustment 

AL ........................... AUTAUGA ............................................................................................................... 01001 0.50 

AL ........................... BALDWIN ................................................................................................................ 01003 0.50 

AL ........................... BARBOUR ............................................................................................................... 01005 0.55 

AL ........................... BIBB ........................................................................................................................ 01007 0.30 

AL ........................... BLOUNT .................................................................................................................. 01009 0.20 

AL ........................... BULLOCK ................................................................................................................ 01011 0.70 

AL ........................... BUTLER .................................................................................................................. 01013 0.55 

AL ........................... CALHOUN ............................................................................................................... 01015 0.30 

AL ........................... CHAMBERS ............................................................................................................ 01017 0.70 

AL ........................... CHEROKEE ............................................................................................................ 01019 0.30 

AL ........................... CHILTON ................................................................................................................. 01021 0.70 

AL ........................... CHOCTAW .............................................................................................................. 01023 0.50 

AL ........................... CLARKE .................................................................................................................. 01025 0.35 

AL ........................... CLAY ....................................................................................................................... 01027 0.70 

AL ........................... CLEBURNE ............................................................................................................. 01029 0.70 

AL ........................... COFFEE .................................................................................................................. 01031 0.85 

AL ........................... COLBERT ............................................................................................................... 01033 0.30 

AL ........................... CONECUH .............................................................................................................. 01035 0.55 

AL ........................... COOSA ................................................................................................................... 01037 0.70 

AL ........................... COVINGTON ........................................................................................................... 01039 0.55 

AL ........................... CRENSHAW ........................................................................................................... 01041 0.55 

AL ........................... CULLMAN ............................................................................................................... 01043 0.20 

AL ........................... DALE ....................................................................................................................... 01045 0.85 

AL ........................... DALLAS ................................................................................................................... 01047 0.50 

AL ........................... DE KALB ................................................................................................................. 01049 0.40 

AL ........................... ELMORE ................................................................................................................. 01051 0.50 

AL ........................... ESCAMBIA .............................................................................................................. 01053 0.55 

AL ........................... ETOWAH ................................................................................................................. 01055 0.30 

AL ........................... FAYETTE ................................................................................................................ 01057 0.20 

AL ........................... FRANKLIN ............................................................................................................... 01059 0.30 

AL ........................... GENEVA ................................................................................................................. 01061 0.85 

AL ........................... GREENE ................................................................................................................. 01063 0.30 

AL ........................... HALE ....................................................................................................................... 01065 0.30 

AL ........................... HENRY .................................................................................................................... 01067 0.85 

AL ........................... HOUSTON .............................................................................................................. 01069 0.85 

AL ........................... JACKSON ............................................................................................................... 01071 0.40 

AL ........................... JEFFERSON ........................................................................................................... 01073 0.30 

AL ........................... LAMAR .................................................................................................................... 01075 0.20 

AL ........................... LAUDERDALE ........................................................................................................ 01077 0.30 

AL ........................... LAWRENCE ............................................................................................................ 01079 0.30 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11221 

State County/Parish FIPS Class I 

price adjustment 

AL ........................... LEE .......................................................................................................................... 01081 0.70 

AL ........................... LIMESTONE ............................................................................................................ 01083 0.30 

AL ........................... LOWNDES .............................................................................................................. 01085 0.70 

AL ........................... MACON ................................................................................................................... 01087 0.70 

AL ........................... MADISON ................................................................................................................ 01089 0.30 

AL ........................... MARENGO .............................................................................................................. 01091 0.50 

AL ........................... MARION .................................................................................................................. 01093 0.20 

AL ........................... MARSHALL ............................................................................................................. 01095 0.40 

AL ........................... MOBILE ................................................................................................................... 01097 0.50 

AL ........................... MONROE ................................................................................................................ 01099 0.35 

AL ........................... MONTGOMERY ...................................................................................................... 01101 0.70 

AL ........................... MORGAN ................................................................................................................ 01103 0.30 

AL ........................... PERRY .................................................................................................................... 01105 0.30 

AL ........................... PICKENS ................................................................................................................. 01107 0.30 

AL ........................... PIKE ........................................................................................................................ 01109 0.55 

AL ........................... RANDOLPH ............................................................................................................ 01111 0.70 

AL ........................... RUSSELL ................................................................................................................ 01113 0.70 

AL ........................... SAINT CLAIR .......................................................................................................... 01115 0.30 

AL ........................... SHELBY .................................................................................................................. 01117 0.30 

AL ........................... SUMTER ................................................................................................................. 01119 0.30 

AL ........................... TALLADEGA ........................................................................................................... 01121 0.30 

AL ........................... TALLAPOOSA ......................................................................................................... 01123 0.70 

AL ........................... TUSCALOOSA ........................................................................................................ 01125 0.30 

AL ........................... WALKER ................................................................................................................. 01127 0.20 

AL ........................... WASHINGTON ........................................................................................................ 01129 0.35 

AL ........................... WILCOX .................................................................................................................. 01131 0.50 

AL ........................... WINSTON ............................................................................................................... 01133 0.20 

AR .......................... ARKANSAS ............................................................................................................. 05001 0.00 

AR .......................... ASHLEY .................................................................................................................. 05003 0.10 

AR .......................... BAXTER .................................................................................................................. 05005 0.10 

AR .......................... BENTON ................................................................................................................. 05007 0.10 

AR .......................... BOONE ................................................................................................................... 05009 0.10 

AR .......................... BRADLEY ................................................................................................................ 05011 0.30 

AR .......................... CALHOUN ............................................................................................................... 05013 0.30 

AR .......................... CARROLL ............................................................................................................... 05015 0.10 

AR .......................... CHICOT ................................................................................................................... 05017 0.10 

AR .......................... CLARK .................................................................................................................... 05019 0.00 

AR .......................... CLAY ....................................................................................................................... 05021 0.10 

AR .......................... CLEBURNE ............................................................................................................. 05023 0.10 

AR .......................... CLEVELAND ........................................................................................................... 05025 0.30 

AR .......................... COLUMBIA .............................................................................................................. 05027 0.10 

AR .......................... CONWAY ................................................................................................................ 05029 0.10 

AR .......................... CRAIGHEAD ........................................................................................................... 05031 0.10 

AR .......................... CRAWFORD ........................................................................................................... 05033 0.10 

AR .......................... CRITTENDEN ......................................................................................................... 05035 0.10 

AR .......................... CROSS .................................................................................................................... 05037 0.10 

AR .......................... DALLAS ................................................................................................................... 05039 0.00 

AR .......................... DESHA .................................................................................................................... 05041 0.30 

AR .......................... DREW ..................................................................................................................... 05043 0.30 

AR .......................... FAULKNER ............................................................................................................. 05045 0.10 

AR .......................... FRANKLIN ............................................................................................................... 05047 0.10 

AR .......................... FULTON .................................................................................................................. 05049 0.10 

AR .......................... GARLAND ............................................................................................................... 05051 0.10 

AR .......................... GRANT .................................................................................................................... 05053 0.00 

AR .......................... GREENE ................................................................................................................. 05055 0.10 

AR .......................... HEMPSTEAD .......................................................................................................... 05057 0.30 

AR .......................... HOT SPRING .......................................................................................................... 05059 0.00 

AR .......................... HOWARD ................................................................................................................ 05061 0.00 

AR .......................... INDEPENDENCE .................................................................................................... 05063 0.10 

AR .......................... IZARD ...................................................................................................................... 05065 0.10 

AR .......................... JACKSON ............................................................................................................... 05067 0.10 

AR .......................... JEFFERSON ........................................................................................................... 05069 0.00 

AR .......................... JOHNSON ............................................................................................................... 05071 0.10 

AR .......................... LAFAYETTE ............................................................................................................ 05073 0.10 

AR .......................... LAWRENCE ............................................................................................................ 05075 0.10 

AR .......................... LEE .......................................................................................................................... 05077 0.10 

AR .......................... LINCOLN ................................................................................................................. 05079 0.30 

AR .......................... LITTLE RIVER ........................................................................................................ 05081 0.30 

AR .......................... LOGAN .................................................................................................................... 05083 0.10 

AR .......................... LONOKE ................................................................................................................. 05085 0.10 

AR .......................... MADISON ................................................................................................................ 05087 0.10 

AR .......................... MARION .................................................................................................................. 05089 0.10 

AR .......................... MILLER ................................................................................................................... 05091 0.10 


rwilkins on PROD1PC63 with PROPOSALS2
11222 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

State County/Parish FIPS Class I 

price adjustment 

AR .......................... MISSISSIPPI ........................................................................................................... 05093 0.30 

AR .......................... MONROE ................................................................................................................ 05095 0.10 

AR .......................... MONTGOMERY ...................................................................................................... 05097 0.10 

AR .......................... NEVADA .................................................................................................................. 05099 0.30 

AR .......................... NEWTON ................................................................................................................ 05101 0.10 

AR .......................... OUACHITA .............................................................................................................. 05103 0.30 

AR .......................... PERRY .................................................................................................................... 05105 0.10 

AR .......................... PHILLIPS ................................................................................................................. 05107 0.00 

AR .......................... PIKE ........................................................................................................................ 05109 0.00 

AR .......................... POINSETT .............................................................................................................. 05111 0.30 

AR .......................... POLK ....................................................................................................................... 05113 0.10 

AR .......................... POPE ...................................................................................................................... 05115 0.10 

AR .......................... PRAIRIE .................................................................................................................. 05117 0.10 

AR .......................... PULASKI ................................................................................................................. 05119 0.10 

AR .......................... RANDOLPH ............................................................................................................ 05121 0.10 

AR .......................... SAINT FRANCIS ..................................................................................................... 05123 0.10 

AR .......................... SALINE .................................................................................................................... 05125 0.10 

AR .......................... SCOTT .................................................................................................................... 05127 0.10 

AR .......................... SEARCY .................................................................................................................. 05129 0.10 

AR .......................... SEBASTIAN ............................................................................................................ 05131 0.10 

AR .......................... SEVIER ................................................................................................................... 05133 0.00 

AR .......................... SHARP .................................................................................................................... 05135 0.10 

AR .......................... STONE .................................................................................................................... 05137 0.10 

AR .......................... UNION ..................................................................................................................... 05139 0.10 

AR .......................... VAN BUREN ........................................................................................................... 05141 0.10 

AR .......................... WASHINGTON ........................................................................................................ 05143 0.10 

AR .......................... WHITE ..................................................................................................................... 05145 0.10 

AR .......................... WOODRUFF ........................................................................................................... 05147 0.10 

AR .......................... YELL ........................................................................................................................ 05149 0.10 

FL ........................... ESCAMBIA .............................................................................................................. 12033 0.55 

FL ........................... OKALOOSA ............................................................................................................ 12091 0.55 

FL ........................... SANTA ROSA ......................................................................................................... 12113 0.55 

FL ........................... WALTON ................................................................................................................. 12131 0.55 

GA .......................... APPLING ................................................................................................................. 13001 1.15 

GA .......................... ATKINSON .............................................................................................................. 13003 1.15 

GA .......................... BACON .................................................................................................................... 13005 1.15 

GA .......................... BAKER .................................................................................................................... 13007 0.85 

GA .......................... BALDWIN ................................................................................................................ 13009 0.70 

GA .......................... BANKS .................................................................................................................... 13011 0.70 

GA .......................... BARROW ................................................................................................................ 13013 0.70 

GA .......................... BARTOW ................................................................................................................. 13015 0.30 

GA .......................... BEN HILL ................................................................................................................ 13017 1.15 

GA .......................... BERRIEN ................................................................................................................ 13019 1.15 

GA .......................... BIBB ........................................................................................................................ 13021 0.70 

GA .......................... BLECKLEY .............................................................................................................. 13023 1.00 

GA .......................... BRANTLEY ............................................................................................................. 13025 1.15 

GA .......................... BROOKS ................................................................................................................. 13027 1.15 

GA .......................... BRYAN .................................................................................................................... 13029 1.15 

GA .......................... BULLOCH ............................................................................................................... 13031 1.00 

GA .......................... BURKE .................................................................................................................... 13033 0.70 

GA .......................... BUTTS ..................................................................................................................... 13035 0.70 

GA .......................... CALHOUN ............................................................................................................... 13037 0.85 

GA .......................... CAMDEN ................................................................................................................. 13039 1.15 

GA .......................... CANDLER ............................................................................................................... 13043 1.00 

GA .......................... CARROLL ............................................................................................................... 13045 0.70 

GA .......................... CHARLTON ............................................................................................................. 13049 1.15 

GA .......................... CHATHAM ............................................................................................................... 13051 1.15 

GA .......................... CHATTAHOOCHEE ................................................................................................ 13053 0.70 

GA .......................... CHEROKEE ............................................................................................................ 13057 0.30 

GA .......................... CLARKE .................................................................................................................. 13059 0.70 

GA .......................... CLAY ....................................................................................................................... 13061 0.85 

GA .......................... CLAYTON ............................................................................................................... 13063 0.70 

GA .......................... CLINCH ................................................................................................................... 13065 1.15 

GA .......................... COBB ...................................................................................................................... 13067 0.70 

GA .......................... COFFEE .................................................................................................................. 13069 1.15 

GA .......................... COLQUITT .............................................................................................................. 13071 1.15 

GA .......................... COLUMBIA .............................................................................................................. 13073 0.70 

GA .......................... COOK ...................................................................................................................... 13075 1.15 

GA .......................... COWETA ................................................................................................................. 13077 0.70 

GA .......................... CRAWFORD ........................................................................................................... 13079 0.70 

GA .......................... CRISP ..................................................................................................................... 13081 0.85 

GA .......................... DAWSON ................................................................................................................ 13085 0.30 

GA .......................... DECATUR ............................................................................................................... 13087 1.15 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11223 

State County/Parish FIPS Class I 

price adjustment 

GA .......................... DE KALB ................................................................................................................. 13089 0.70 

GA .......................... DODGE ................................................................................................................... 13091 0.85 

GA .......................... DOOLY .................................................................................................................... 13093 0.85 

GA .......................... DOUGHERTY ......................................................................................................... 13095 0.85 

GA .......................... DOUGLAS ............................................................................................................... 13097 0.70 

GA .......................... EARLY ..................................................................................................................... 13099 0.85 

GA .......................... ECHOLS .................................................................................................................. 13101 1.15 

GA .......................... EFFINGHAM ........................................................................................................... 13103 1.00 

GA .......................... ELBERT .................................................................................................................. 13105 0.70 

GA .......................... EMANUEL ............................................................................................................... 13107 1.00 

GA .......................... EVANS .................................................................................................................... 13109 1.15 

GA .......................... FAYETTE ................................................................................................................ 13113 0.70 

GA .......................... FLOYD .................................................................................................................... 13115 0.30 

GA .......................... FORSYTH ............................................................................................................... 13117 0.70 

GA .......................... FRANKLIN ............................................................................................................... 13119 0.70 

GA .......................... FULTON .................................................................................................................. 13121 0.70 

GA .......................... GILMER ................................................................................................................... 13123 0.30 

GA .......................... GLASCOCK ............................................................................................................ 13125 0.90 

GA .......................... GLYNN .................................................................................................................... 13127 1.15 

GA .......................... GORDON ................................................................................................................ 13129 0.30 

GA .......................... GRADY .................................................................................................................... 13131 1.15 

GA .......................... GREENE ................................................................................................................. 13133 0.70 

GA .......................... GWINNETT ............................................................................................................. 13135 0.70 

GA .......................... HABERSHAM .......................................................................................................... 13137 0.30 

GA .......................... HALL ....................................................................................................................... 13139 0.70 

GA .......................... HANCOCK .............................................................................................................. 13141 0.70 

GA .......................... HARALSON ............................................................................................................. 13143 0.70 

GA .......................... HARRIS ................................................................................................................... 13145 0.70 

GA .......................... HART ....................................................................................................................... 13147 0.70 

GA .......................... HEARD .................................................................................................................... 13149 0.70 

GA .......................... HENRY .................................................................................................................... 13151 0.70 

GA .......................... HOUSTON .............................................................................................................. 13153 0.70 

GA .......................... IRWIN ...................................................................................................................... 13155 1.15 

GA .......................... JACKSON ............................................................................................................... 13157 0.70 

GA .......................... JASPER .................................................................................................................. 13159 0.70 

GA .......................... JEFF DAVIS ............................................................................................................ 13161 1.15 

GA .......................... JEFFERSON ........................................................................................................... 13163 0.70 

GA .......................... JENKINS ................................................................................................................. 13165 1.00 

GA .......................... JOHNSON ............................................................................................................... 13167 1.00 

GA .......................... JONES .................................................................................................................... 13169 0.70 

GA .......................... LAMAR .................................................................................................................... 13171 0.70 

GA .......................... LANIER ................................................................................................................... 13173 1.15 

GA .......................... LAURENS ............................................................................................................... 13175 1.00 

GA .......................... LEE .......................................................................................................................... 13177 0.85 

GA .......................... LIBERTY ................................................................................................................. 13179 1.15 

GA .......................... LINCOLN ................................................................................................................. 13181 0.70 

GA .......................... LONG ...................................................................................................................... 13183 1.15 

GA .......................... LOWNDES .............................................................................................................. 13185 1.15 

GA .......................... LUMPKIN ................................................................................................................ 13187 0.30 

GA .......................... MC DUFFIE ............................................................................................................. 13189 0.70 

GA .......................... MC INTOSH ............................................................................................................ 13191 1.15 

GA .......................... MACON ................................................................................................................... 13193 0.70 

GA .......................... MADISON ................................................................................................................ 13195 0.70 

GA .......................... MARION .................................................................................................................. 13197 0.70 

GA .......................... MERIWETHER ........................................................................................................ 13199 0.70 

GA .......................... MILLER ................................................................................................................... 13201 0.85 

GA .......................... MITCHELL ............................................................................................................... 13205 1.15 

GA .......................... MONROE ................................................................................................................ 13207 0.70 

GA .......................... MONTGOMERY ...................................................................................................... 13209 1.15 

GA .......................... MORGAN ................................................................................................................ 13211 0.70 

GA .......................... MUSCOGEE ........................................................................................................... 13215 0.70 

GA .......................... NEWTON ................................................................................................................ 13217 0.70 

GA .......................... OCONEE ................................................................................................................. 13219 0.70 

GA .......................... OGLETHORPE ....................................................................................................... 13221 0.70 

GA .......................... PAULDING .............................................................................................................. 13223 0.70 

GA .......................... PEACH .................................................................................................................... 13225 0.70 

GA .......................... PICKENS ................................................................................................................. 13227 0.30 

GA .......................... PIERCE ................................................................................................................... 13229 1.15 

GA .......................... PIKE ........................................................................................................................ 13231 0.70 

GA .......................... POLK ....................................................................................................................... 13233 0.70 

GA .......................... PULASKI ................................................................................................................. 13235 0.85 

GA .......................... PUTNAM ................................................................................................................. 13237 0.70 

GA .......................... QUITMAN ................................................................................................................ 13239 0.85 


rwilkins on PROD1PC63 with PROPOSALS2
11224 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

State County/Parish FIPS Class I 

price adjustment 

GA .......................... RABUN .................................................................................................................... 13241 0.30 

GA .......................... RANDOLPH ............................................................................................................ 13243 0.85 

GA .......................... RICHMOND ............................................................................................................. 13245 0.70 

GA .......................... ROCKDALE ............................................................................................................. 13247 0.70 

GA .......................... SCHLEY .................................................................................................................. 13249 0.70 

GA .......................... SCREVEN ............................................................................................................... 13251 1.00 

GA .......................... SEMINOLE .............................................................................................................. 13253 1.15 

GA .......................... SPALDING .............................................................................................................. 13255 0.70 

GA .......................... STEPHENS ............................................................................................................. 13257 0.30 

GA .......................... STEWART ............................................................................................................... 13259 0.55 

GA .......................... SUMTER ................................................................................................................. 13261 0.85 

GA .......................... TALBOT .................................................................................................................. 13263 0.70 

GA .......................... TALIAFERRO .......................................................................................................... 13265 0.70 

GA .......................... TATTNALL .............................................................................................................. 13267 1.15 

GA .......................... TAYLOR .................................................................................................................. 13269 0.70 

GA .......................... TELFAIR .................................................................................................................. 13271 1.15 

GA .......................... TERRELL ................................................................................................................ 13273 0.85 

GA .......................... THOMAS ................................................................................................................. 13275 1.15 

GA .......................... TIFT ......................................................................................................................... 13277 1.15 

GA .......................... TOOMBS ................................................................................................................. 13279 1.15 

GA .......................... TOWNS ................................................................................................................... 13281 0.30 

GA .......................... TREUTLEN ............................................................................................................. 13283 1.00 

GA .......................... TROUP .................................................................................................................... 13285 0.70 

GA .......................... TURNER ................................................................................................................. 13287 0.85 

GA .......................... TWIGGS .................................................................................................................. 13289 0.70 

GA .......................... UNION ..................................................................................................................... 13291 0.30 

GA .......................... UPSON .................................................................................................................... 13293 0.70 

GA .......................... WALTON ................................................................................................................. 13297 0.70 

GA .......................... WARE ...................................................................................................................... 13299 1.15 

GA .......................... WARREN ................................................................................................................ 13301 0.70 

GA .......................... WASHINGTON ........................................................................................................ 13303 0.70 

GA .......................... WAYNE ................................................................................................................... 13305 1.15 

GA .......................... WEBSTER ............................................................................................................... 13307 0.55 

GA .......................... WHEELER ............................................................................................................... 13309 1.15 

GA .......................... WHITE ..................................................................................................................... 13311 0.30 

GA .......................... WILCOX .................................................................................................................. 13315 0.85 

GA .......................... WILKES ................................................................................................................... 13317 0.70 

GA .......................... WILKINSON ............................................................................................................ 13319 0.70 

GA .......................... WORTH ................................................................................................................... 13321 0.85 

KY .......................... ALLEN ..................................................................................................................... 21003 0.20 

KY .......................... BALLARD ................................................................................................................ 21007 0.30 

KY .......................... BARREN ................................................................................................................. 21009 0.20 

KY .......................... CALDWELL ............................................................................................................. 21033 0.20 

KY .......................... CALLOWAY ............................................................................................................ 21035 0.30 

KY .......................... CARLISLE ............................................................................................................... 21039 0.30 

KY .......................... CHRISTIAN ............................................................................................................. 21047 0.20 

KY .......................... CRITTENDEN ......................................................................................................... 21055 0.20 

KY .......................... FULTON .................................................................................................................. 21075 0.30 

KY .......................... GRAVES ................................................................................................................. 21083 0.30 

KY .......................... HICKMAN ................................................................................................................ 21105 0.30 

KY .......................... LIVINGSTON ........................................................................................................... 21139 0.30 

KY .......................... LOGAN .................................................................................................................... 21141 0.20 

KY .......................... LYON ....................................................................................................................... 21143 0.20 

KY .......................... MC CRACKEN ........................................................................................................ 21145 0.30 

KY .......................... MARSHALL ............................................................................................................. 21157 0.30 

KY .......................... METCALFE ............................................................................................................. 21169 0.20 

KY .......................... MONROE ................................................................................................................ 21171 0.50 

KY .......................... SIMPSON ................................................................................................................ 21213 0.20 

KY .......................... TODD ...................................................................................................................... 21219 0.20 

KY .......................... TRIGG ..................................................................................................................... 21221 0.20 

KY .......................... WARREN ................................................................................................................ 21227 0.20 

LA ........................... ACADIA ................................................................................................................... 22001 0.30 

LA ........................... ALLEN ..................................................................................................................... 22003 0.30 

LA ........................... ASCENSION ........................................................................................................... 22005 0.20 

LA ........................... ASSUMPTION ......................................................................................................... 22007 0.20 

LA ........................... AVOYELLES ........................................................................................................... 22009 0.00 

LA ........................... BEAUREGARD ....................................................................................................... 22011 0.30 

LA ........................... BIENVILLE .............................................................................................................. 22013 0.00 

LA ........................... BOSSIER ................................................................................................................ 22015 0.10 

LA ........................... CADDO ................................................................................................................... 22017 0.10 

LA ........................... CALCASIEU ............................................................................................................ 22019 0.30 

LA ........................... CALDWELL ............................................................................................................. 22021 0.00 

LA ........................... CAMERON .............................................................................................................. 22023 0.20 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11225 

State County/Parish FIPS Class I 

price adjustment 

LA ........................... CATAHOULA .......................................................................................................... 22025 0.00 

LA ........................... CLAIBORNE ............................................................................................................ 22027 0.10 

LA ........................... CONCORDIA .......................................................................................................... 22029 0.00 

LA ........................... DE SOTO ................................................................................................................ 22031 0.00 

LA ........................... EAST BATON ROUGE ........................................................................................... 22033 0.20 

LA ........................... EAST CARROLL ..................................................................................................... 22035 0.20 

LA ........................... EAST FELICIANA ................................................................................................... 22037 0.30 

LA ........................... EVANGELINE ......................................................................................................... 22039 0.30 

LA ........................... FRANKLIN ............................................................................................................... 22041 0.00 

LA ........................... GRANT .................................................................................................................... 22043 0.00 

LA ........................... IBERIA ..................................................................................................................... 22045 0.20 

LA ........................... IBERVILLE .............................................................................................................. 22047 0.20 

LA ........................... JACKSON ............................................................................................................... 22049 0.00 

LA ........................... JEFFERSON ........................................................................................................... 22051 0.20 

LA ........................... JEFFERSON DAVIS ............................................................................................... 22053 0.30 

LA ........................... LAFAYETTE ............................................................................................................ 22055 0.20 

LA ........................... LAFOURCHE .......................................................................................................... 22057 0.20 

LA ........................... LA SALLE ................................................................................................................ 22059 0.00 

LA ........................... LINCOLN ................................................................................................................. 22061 0.10 

LA ........................... LIVINGSTON ........................................................................................................... 22063 0.20 

LA ........................... MADISON ................................................................................................................ 22065 0.00 

LA ........................... MOREHOUSE ......................................................................................................... 22067 0.10 

LA ........................... NATCHITOCHES .................................................................................................... 22069 0.00 

LA ........................... ORLEANS ............................................................................................................... 22071 0.20 

LA ........................... OUACHITA .............................................................................................................. 22073 0.10 

LA ........................... PLAQUEMINES ...................................................................................................... 22075 0.20 

LA ........................... POINTE COUPEE ................................................................................................... 22077 0.30 

LA ........................... RAPIDES ................................................................................................................. 22079 0.00 

LA ........................... RED RIVER ............................................................................................................. 22081 0.00 

LA ........................... RICHLAND .............................................................................................................. 22083 0.20 

LA ........................... SABINE ................................................................................................................... 22085 0.00 

LA ........................... SAINT BERNARD ................................................................................................... 22087 0.20 

LA ........................... SAINT CHARLES .................................................................................................... 22089 0.20 

LA ........................... SAINT HELENA ...................................................................................................... 22091 0.30 

LA ........................... SAINT JAMES ......................................................................................................... 22093 0.20 

LA ........................... SAINT JOHN THE BAPTIST .................................................................................. 22095 0.20 

LA ........................... SAINT LANDRY ...................................................................................................... 22097 0.30 

LA ........................... SAINT MARTIN ....................................................................................................... 22099 0.20 

LA ........................... SAINT MARY .......................................................................................................... 22101 0.20 

LA ........................... SAINT TAMMANY ................................................................................................... 22103 0.30 

LA ........................... TANGIPAHOA ......................................................................................................... 22105 0.20 

LA ........................... TENSAS .................................................................................................................. 22107 0.00 

LA ........................... TERREBONNE ....................................................................................................... 22109 0.20 

LA ........................... UNION ..................................................................................................................... 22111 0.10 

LA ........................... VERMILION ............................................................................................................. 22113 0.20 

LA ........................... VERMILION ............................................................................................................. 22113 0.20 

LA ........................... VERNON ................................................................................................................. 22115 0.00 

LA ........................... WASHINGTON ........................................................................................................ 22117 0.30 

LA ........................... WEBSTER ............................................................................................................... 22119 0.10 

LA ........................... WEST BATON ROUGE .......................................................................................... 22121 0.20 

LA ........................... WEST CARROLL .................................................................................................... 22123 0.10 

LA ........................... WEST FELICIANA .................................................................................................. 22125 0.30 

LA ........................... WINN ....................................................................................................................... 22127 0.00 

MS .......................... ADAMS .................................................................................................................... 28001 0.00 

MS .......................... ALCORN ................................................................................................................. 28003 0.30 

MS .......................... AMITE ..................................................................................................................... 28005 0.40 

MS .......................... ATTALA ................................................................................................................... 28007 0.20 

MS .......................... BENTON ................................................................................................................. 28009 0.30 

MS .......................... BOLIVAR ................................................................................................................. 28011 0.10 

MS .......................... CALHOUN ............................................................................................................... 28013 0.10 

MS .......................... CARROLL ............................................................................................................... 28015 0.20 

MS .......................... CHICKASAW ........................................................................................................... 28017 0.10 

MS .......................... CHOCTAW .............................................................................................................. 28019 0.20 

MS .......................... CLAIBORNE ............................................................................................................ 28021 0.10 

MS .......................... CLARKE .................................................................................................................. 28023 0.50 

MS .......................... CLAY ....................................................................................................................... 28025 0.20 

MS .......................... COAHOMA .............................................................................................................. 28027 0.30 

MS .......................... COPIAH ................................................................................................................... 28029 0.10 

MS .......................... COVINGTON ........................................................................................................... 28031 0.00 

MS .......................... DE SOTO ................................................................................................................ 28033 0.00 

MS .......................... FORREST ............................................................................................................... 28035 0.40 

MS .......................... FRANKLIN ............................................................................................................... 28037 0.00 

MS .......................... GEORGE ................................................................................................................. 28039 0.40 


rwilkins on PROD1PC63 with PROPOSALS2
11226 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

State County/Parish FIPS Class I 

price adjustment 

MS .......................... GREENE ................................................................................................................. 28041 0.40 

MS .......................... GRENADA ............................................................................................................... 28043 0.10 

MS .......................... HANCOCK .............................................................................................................. 28045 0.30 

MS .......................... HARRISON ............................................................................................................. 28047 0.30 

MS .......................... HINDS ..................................................................................................................... 28049 0.00 

MS .......................... HOLMES ................................................................................................................. 28051 0.20 

MS .......................... HUMPHREYS ......................................................................................................... 28053 0.20 

MS .......................... ISSAQUENA ........................................................................................................... 28055 0.20 

MS .......................... ITAWAMBA ............................................................................................................. 28057 0.30 

MS .......................... JACKSON ............................................................................................................... 28059 0.30 

MS .......................... JASPER .................................................................................................................. 28061 0.10 

MS .......................... JEFFERSON ........................................................................................................... 28063 0.00 

MS .......................... JEFFERSON DAVIS ............................................................................................... 28065 0.00 

MS .......................... JONES .................................................................................................................... 28067 0.40 

MS .......................... KEMPER ................................................................................................................. 28069 0.30 

MS .......................... LAFAYETTE ............................................................................................................ 28071 0.30 

MS .......................... LAMAR .................................................................................................................... 28073 0.40 

MS .......................... LAUDERDALE ........................................................................................................ 28075 0.10 

MS .......................... LAWRENCE ............................................................................................................ 28077 0.00 

MS .......................... LEAKE ..................................................................................................................... 28079 0.20 

MS .......................... LEE .......................................................................................................................... 28081 0.30 

MS .......................... LEFLORE ................................................................................................................ 28083 0.10 

MS .......................... LINCOLN ................................................................................................................. 28085 0.00 

MS .......................... LOWNDES .............................................................................................................. 28087 0.20 

MS .......................... MADISON ................................................................................................................ 28089 0.20 

MS .......................... MARION .................................................................................................................. 28091 0.40 

MS .......................... MARSHALL ............................................................................................................. 28093 0.00 

MS .......................... MONROE ................................................................................................................ 28095 0.20 

MS .......................... MONTGOMERY ...................................................................................................... 28097 0.20 

MS .......................... NESHOBA ............................................................................................................... 28099 0.20 

MS .......................... NEWTON ................................................................................................................ 28101 0.10 

MS .......................... NOXUBEE ............................................................................................................... 28103 0.30 

MS .......................... OKTIBBEHA ............................................................................................................ 28105 0.20 

MS .......................... PANOLA .................................................................................................................. 28107 0.30 

MS .......................... PEARL RIVER ........................................................................................................ 28109 0.40 

MS .......................... PERRY .................................................................................................................... 28111 0.40 

MS .......................... PIKE ........................................................................................................................ 28113 0.40 

MS .......................... PONTOTOC ............................................................................................................ 28115 0.30 

MS .......................... PRENTISS .............................................................................................................. 28117 0.30 

MS .......................... QUITMAN ................................................................................................................ 28119 0.30 

MS .......................... RANKIN ................................................................................................................... 28121 0.10 

MS .......................... SCOTT .................................................................................................................... 28123 0.10 

MS .......................... SHARKEY ............................................................................................................... 28125 0.20 

MS .......................... SIMPSON ................................................................................................................ 28127 0.10 

MS .......................... SMITH ..................................................................................................................... 28129 0.10 

MS .......................... STONE .................................................................................................................... 28131 0.40 

MS .......................... SUNFLOWER ......................................................................................................... 28133 0.10 

MS .......................... TALLAHATCHIE ...................................................................................................... 28135 0.10 

MS .......................... TATE ....................................................................................................................... 28137 0.00 

MS .......................... TIPPAH ................................................................................................................... 28139 0.30 

MS .......................... TISHOMINGO ......................................................................................................... 28141 0.30 

MS .......................... TUNICA ................................................................................................................... 28143 0.00 

MS .......................... UNION ..................................................................................................................... 28145 0.30 

MS .......................... WALTHALL ............................................................................................................. 28147 0.40 

MS .......................... WARREN ................................................................................................................ 28149 0.00 

MS .......................... WASHINGTON ........................................................................................................ 28151 0.10 

MS .......................... WAYNE ................................................................................................................... 28153 0.40 

MS .......................... WEBSTER ............................................................................................................... 28155 0.20 

MS .......................... WILKINSON ............................................................................................................ 28157 0.40 

MS .......................... WINSTON ............................................................................................................... 28159 0.20 

MS .......................... YALOBUSHA .......................................................................................................... 28161 0.10 

MS .......................... YAZOO .................................................................................................................... 28163 0.20 

MO ......................... BARRY .................................................................................................................... 29009 0.20 

MO ......................... BARTON ................................................................................................................. 29011 0.20 

MO ......................... BOLLINGER ............................................................................................................ 29017 0.20 

MO ......................... BUTLER .................................................................................................................. 29023 0.20 

MO ......................... CAPE GIRARDEAU ................................................................................................ 29031 0.20 

MO ......................... CARTER .................................................................................................................. 29035 0.20 

MO ......................... CEDAR .................................................................................................................... 29039 0.20 

MO ......................... CHRISTIAN ............................................................................................................. 29043 0.20 

MO ......................... CRAWFORD ........................................................................................................... 29055 0.40 

MO ......................... DADE ...................................................................................................................... 29057 0.20 

MO ......................... DALLAS ................................................................................................................... 29059 0.20 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11227 

State County/Parish FIPS Class I 

price adjustment 

MO ......................... DENT ....................................................................................................................... 29065 0.40 

MO ......................... DOUGLAS ............................................................................................................... 29067 0.20 

MO ......................... DUNKLIN ................................................................................................................. 29069 0.50 

MO ......................... GREENE ................................................................................................................. 29077 0.20 

MO ......................... HOWELL ................................................................................................................. 29091 0.20 

MO ......................... IRON ....................................................................................................................... 29093 0.40 

MO ......................... JASPER .................................................................................................................. 29097 0.20 

MO ......................... LACLEDE ................................................................................................................ 29105 0.20 

MO ......................... LAWRENCE ............................................................................................................ 29109 0.20 

MO ......................... MC DONALD ........................................................................................................... 29119 0.20 

MO ......................... MADISON ................................................................................................................ 29123 0.20 

MO ......................... MISSISSIPPI ........................................................................................................... 29133 0.50 

MO ......................... NEW MADRID ......................................................................................................... 29143 0.50 

MO ......................... NEWTON ................................................................................................................ 29145 0.20 

MO ......................... OREGON ................................................................................................................ 29149 0.20 

MO ......................... OZARK .................................................................................................................... 29153 0.20 

MO ......................... PEMISCOT .............................................................................................................. 29155 0.50 

MO ......................... PERRY .................................................................................................................... 29157 0.20 

MO ......................... POLK ....................................................................................................................... 29167 0.20 

MO ......................... REYNOLDS ............................................................................................................. 29179 0.20 

MO ......................... RIPLEY .................................................................................................................... 29181 0.20 

MO ......................... SAINT FRANCOIS .................................................................................................. 29187 0.40 

MO ......................... SCOTT .................................................................................................................... 29201 0.20 

MO ......................... SHANNON .............................................................................................................. 29203 0.20 

MO ......................... STODDARD ............................................................................................................ 29207 0.20 

MO ......................... STONE .................................................................................................................... 29209 0.20 

MO ......................... TANEY .................................................................................................................... 29213 0.20 

MO ......................... TEXAS ..................................................................................................................... 29215 0.20 

MO ......................... VERNON ................................................................................................................. 29217 0.20 

MO ......................... WASHINGTON ........................................................................................................ 29221 0.40 

MO ......................... WAYNE ................................................................................................................... 29223 0.20 

MO ......................... WEBSTER ............................................................................................................... 29225 0.20 

MO ......................... WRIGHT .................................................................................................................. 29229 0.20 

TN .......................... BEDFORD ............................................................................................................... 47003 0.30 

TN .......................... BENTON ................................................................................................................. 47005 0.30 

TN .......................... BLEDSOE ............................................................................................................... 47007 0.60 

TN .......................... CANNON ................................................................................................................. 47015 0.30 

TN .......................... CARROLL ............................................................................................................... 47017 0.10 

TN .......................... CHEATHAM ............................................................................................................ 47021 0.30 

TN .......................... CHESTER ............................................................................................................... 47023 0.10 

TN .......................... CLAY ....................................................................................................................... 47027 0.30 

TN .......................... COFFEE .................................................................................................................. 47031 0.60 

TN .......................... CROCKETT ............................................................................................................. 47033 0.30 

TN .......................... DAVIDSON .............................................................................................................. 47037 0.30 

TN .......................... DECATUR ............................................................................................................... 47039 0.30 

TN .......................... DE KALB ................................................................................................................. 47041 0.30 

TN .......................... DICKSON ................................................................................................................ 47043 0.30 

TN .......................... DYER ...................................................................................................................... 47045 0.10 

TN .......................... FAYETTE ................................................................................................................ 47047 0.10 

TN .......................... FENTRESS ............................................................................................................. 47049 0.30 

TN .......................... FRANKLIN ............................................................................................................... 47051 0.40 

TN .......................... GIBSON .................................................................................................................. 47053 0.10 

TN .......................... GILES ...................................................................................................................... 47055 0.40 

TN .......................... GRUNDY ................................................................................................................. 47061 0.60 

TN .......................... HARDEMAN ............................................................................................................ 47069 0.10 

TN .......................... HARDIN ................................................................................................................... 47071 0.10 

TN .......................... HAYWOOD ............................................................................................................. 47075 0.30 

TN .......................... HENDERSON ......................................................................................................... 47077 0.30 

TN .......................... HENRY .................................................................................................................... 47079 0.10 

TN .......................... HICKMAN ................................................................................................................ 47081 0.30 

TN .......................... HOUSTON .............................................................................................................. 47083 0.30 

TN .......................... HUMPHREYS ......................................................................................................... 47085 0.30 

TN .......................... JACKSON ............................................................................................................... 47087 0.30 

TN .......................... LAKE ....................................................................................................................... 47095 0.10 

TN .......................... LAUDERDALE ........................................................................................................ 47097 0.30 

TN .......................... LAWRENCE ............................................................................................................ 47099 0.40 

TN .......................... LEWIS ..................................................................................................................... 47101 0.30 

TN .......................... LINCOLN ................................................................................................................. 47103 0.40 

TN .......................... MC NAIRY ............................................................................................................... 47109 0.10 

TN .......................... MACON ................................................................................................................... 47111 0.30 

TN .......................... MADISON ................................................................................................................ 47113 0.30 

TN .......................... MARSHALL ............................................................................................................. 47117 0.30 

TN .......................... MAURY ................................................................................................................... 47119 0.30 


rwilkins on PROD1PC63 with PROPOSALS2
11228 Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 

State County/Parish FIPS Class I 

price adjustment 

TN .......................... MONTGOMERY ...................................................................................................... 47125 0.30 

TN .......................... MOORE ................................................................................................................... 47127 0.40 

TN .......................... OBION ..................................................................................................................... 47131 0.10 

TN .......................... OVERTON ............................................................................................................... 47133 0.30 

TN .......................... PERRY .................................................................................................................... 47135 0.30 

TN .......................... PICKETT ................................................................................................................. 47137 0.30 

TN .......................... PUTNAM ................................................................................................................. 47141 0.30 

TN .......................... ROBERTSON .......................................................................................................... 47147 0.30 

TN .......................... RUTHERFORD ....................................................................................................... 47149 0.30 

TN .......................... SHELBY .................................................................................................................. 47157 0.10 

TN .......................... SMITH ..................................................................................................................... 47159 0.30 

TN .......................... STEWART ............................................................................................................... 47161 0.30 

TN .......................... SUMNER ................................................................................................................. 47165 0.30 

TN .......................... TIPTON ................................................................................................................... 47167 0.10 

TN .......................... TROUSDALE .......................................................................................................... 47169 0.30 

TN .......................... VAN BUREN ........................................................................................................... 47175 0.60 

TN .......................... WARREN ................................................................................................................ 47177 0.60 

TN .......................... WAYNE ................................................................................................................... 47181 0.40 

TN .......................... WEAKLEY ............................................................................................................... 47183 0.10 

TN .......................... WHITE ..................................................................................................................... 47185 0.30 

TN .......................... WILLIAMSON .......................................................................................................... 47187 0.30 

TN .......................... WILSON .................................................................................................................. 47189 0.30 

9. Amend § 1007.13 by revising 

paragraphs (d) (1) through (4) to read as 

follows: 

§ 1007.13 Producer Milk. 

* * * * * 

(d) * * * 

(1) In any month of January through 

June, not less than 1 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 

December, not less than 1 days’

production of the producer whose milk 

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 

25 percent during the months of July 

through November, January, and 

February, and 35 percent during the 

months of December and March 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 25 percent 

during the months of July through 

November, January, and February, and 

35 percent during the months of 

December and March 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(e)) during the 

month, excluding the quantity of 

producer milk received from a handler 

described in § 1000.9(c); 

* * * * * 

10. Amend § 1007.81 by revising 

paragraph (a) to read as follows: 

§ 1007.81 Payments to the transportation 

credit balancing fund. 

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

end of the month (except as provided in 

§ 1000.90), each handler operating a 

pool plant and each handler specified in 

§ 1000.9(c) shall pay to the market 

administrator a transportation credit 

balancing fund assessment determined 

by multiplying the pounds of Class I 

producer milk assigned pursuant to 

§ 1007.44 by $0.30 per hundredweight 

or such lesser amount as the market 

administrator deems necessary to 

maintain a balance in the fund equal to 

the total transportation credits 

disbursed during the prior June–

February period to reflect any changes 

in the current mileage rate versus the 

mileage rate(s) in effect during the prior 

June–February period. In the event that 

during any month of the June–February 

period the fund balance is insufficient 

to cover the amount of credits that are 

due, the assessment should be based 

upon the amount of credits that would 

have been disbursed had the fund 

balance been sufficient. 

* * * * * 

11. Amend § 1007.82 by revising 

paragraphs (a)(1), (b), (c)(1), removing 

paragraph (c)(2)(i), revising paragraphs 

(d)(2)(iii), (d)(3)(v), and redesignating 

paragraphs (c)(2)(ii), (c)(2)(iii), (c)(2)(iv) 

as (c)(2)(i), (c)(2)(ii) and (c)(2)(iii), and 

revising newly redesignated paragraphs 

(c)(2)(i) and (c)(2)(iii) to read as follows: 

§ 1007.82 Payments from the 

transportation credit balancing fund. 

(a) * * * 

(1) On or before the 13th day (except 

as provided in § 1000.90) after the end 

of each of the months of January, 

February and July through December 

and any other month in which 

transportation credits are in effect 

pursuant to paragraph (b) of this section, 

the market administrator shall pay to 

each handler that received, and reported 

pursuant to § 1007.30(a)(5), bulk milk 

transferred from a plant fully regulated 

under another Federal order as 

described in paragraph (c)(1) of this 

section or that received, and reported 

pursuant to § 1007.30(a)(6), milk 

directly from producers’ farms as 

specified in paragraph (c)(2) of this 

section, a preliminary amount 

determined pursuant to paragraph (d) of 

this section to the extent that funds are 

available in the transportation credit 

balancing fund. If an insufficient 

balance exists to pay all of the credits 

computed pursuant to this section, the 

market administrator shall distribute the 

balance available in the transportation 

credit balancing fund by reducing 

payments pro rata using the percentage 

derived by dividing the balance in the 

fund by the total credits that are due for 

the month. The amount of credits 

resulting from this initial proration shall 

be subject to audit adjustment pursuant 

to paragraph (a)(2) of this section. 

* * * * * 

(b) The market administrator may 

extend the period during which 

transportation credits are in effect (i.e., 


rwilkins on PROD1PC63 with PROPOSALS2
Federal Register / Vol. 73, No. 41 / Friday, February 29, 2008 / Proposed Rules 11229 

1First and last section of order. 

2Name of order. 

3Appropriate Part number. 

4Next consecutive section number. 

5Appropriate representative period for the order. 

the transportation credit period) to the 

month of June if a written request to do 

so is received 15 days prior to the 

beginning of the month for which the 

request is made and, after conducting an 

independent investigation, finds that 

such extension is necessary to assure 

the market of an adequate supply of 

milk for fluid use. Before making such 

a finding, the market administrator shall 

notify the Deputy Administrator of 

Dairy Programs and all handlers in the 

market that an extension is being 

considered and invite written data, 

views, and arguments. Any decision to 

extend the transportation credit period 

must be issued in writing prior to the 

first day of the month for which the 

extension is to be effective. 

(c) * * * 

(1) Bulk milk received at a pool 

distributing plant from a plant regulated 

under another Federal order, except 

Federal Order 1005; and 

* * * * * 

(2) * * * 

(i) The dairy farmer was not a 

‘‘producer’’ under this order for more 

than 45 days during the immediately 

preceding months of March through 

May, or not more than 50 percent of the 

production of the dairy farmer during 

those 3 months, in aggregate, was 

received as producer milk under this 

order during those 3 months; and 

* * * * * 

(iii) The market administrator may 

increase or decrease the milk 

production standard specified in 

paragraph (c)(2)(i) of this section if 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 either on the market 

administrator’s own initiative or at the 

request of interested persons. 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 at least one day before the 

effective date. 

(d) * * * 

(2) * * * 

(iii) Subtract the applicable Class I 

price specified in § 1000.50(a) for the 

county in which the shipping plant is 

located from the Class I price applicable 

for the county in which the receiving 

plant is located; 

(3) * * * 

(v) Subtract the Class I price specified 

in § 1000.50(a) applicable for the county 

in which the origination point is located 

from the Class I price applicable at the 

receiving pool plant’s location; 

* * * * * 

Note: The following appendix will not 

appear in the Code of Federal Regulations. 

Appendix—Marketing Agreement 

Regulating the Handling of Milk in 

Certain Marketing Areas 

The parties hereto, in order to effectuate 

the declared policy of the Act, and in 

accordance with the rules of practice and 

procedure effective thereunder (7 CFR part 

900), desire to enter into this marketing 

agreement and do hereby agree that the 

provisions referred to in paragraph I hereof, 

as augmented by the provisions specified in 

paragraph II hereof, shall be and are the 

provisions of this marketing agreement as if 

set out in full herein. 

I. The findings and determinations, order 

relative to handling, and the provisions of 

§llll tollll 1 all inclusive, of 

the order regulating the handling of milk in 

the llllll2 marketing area (7 CFR 

Partllll3) which is annexed hereto; and 

II. The following provisions: 

§llll 4 Record of milk handled and 

authorization to correct typographical errors. 

(a) Record of milk handled. The 

undersigned certifies that he/she handled 

during the month of llll5, llll 

hundredweight of milk covered by this 

marketing agreement. 

(b) Authorization to correct typographical 

errors. The undersigned hereby authorizes 

the Deputy Administrator, or Acting Deputy 

Administrator, Dairy Programs, Agricultural 

Marketing Service, to correct any 

typographical errors which may have been 

made in this marketing agreement. 

Effective date. This marketing agreement 

shall become effective upon the execution of 

a counterpart hereof by the Department in 

accordance with Sec. 900.14(a) of the 

aforesaid rules of practice and procedure. 

In Witness Whereof, The contracting 

handlers, acting under the provisions of the 

Act, for the purposes and subject to the 

limitations herein contained and not 

otherwise, have hereunto set their respective 

hands and seals. 

Signature 

By (Name) lllllllllllllll

(Title) lllllllllllllllll

(Address) llllllllllllllll

(Seal) 

Attest llllllllllllllllll

[FR Doc. 08–881 Filed 2–25–08; 1:04 pm] 

BILLING CODE 3410–02–P 


rwilkins on PROD1PC63 with PROPOSALS2