This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

65023

Vol. 60, No. 242

Monday, December 18, 1995

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 1005, 1011, and 1046

[Docket No. AO–388–A8 et al.; DA–94–12]

Milk in the Carolina, Tennessee Valley,

and Louisville-Lexington-Evansville

Marketing Areas; Decision on

Proposed Amendments to Marketing

Agreements and to Orders

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule.

7

CFR

part

Marketing area AO Nos.

1005 Carolina ................... AO–388–A8

1011 Tennessee Valley ... AO–251–A39

1046 Louisville-LexingtonEvansville.AO–123–A66

SUMMARY: This final decision proposes

to amend the pooling standards of the

Tennessee Valley and Carolina orders;

modifies the marketing areas of the

Tennessee Valley and LouisvilleLexington-Evansville orders; changes

the location adjustment under the

Carolina order for plants located in the

Middle Atlantic marketing area; and

changes the base-paying months under

the Carolina order. The decision is

based upon industry proposals

presented at a public hearing in

Charlotte, North Carolina, on January 4,

1995.

FOR FURTHER INFORMATION CONTACT:

Nicholas Memoli, Marketing Specialist,

USDA/AMS/Dairy Division, Order

Formulation Branch, Room 2971, South

Building, P.O. Box 96456, Washington,

DC 20090–6456, (202) 690–1932.

SUPPLEMENTARY INFORMATION: This

administrative action is governed by the

provisions of Sections 556 and 557 of

Title 5 of the United States Code and

therefore is excluded from the

requirements of Executive Order 12866.

The Regulatory Flexibility Act (5

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

examine the impact of a proposed rule

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

605(b), the Administrator of the

Agricultural Marketing Service has

certified that this rule will not have a

significant economic impact on a

substantial number of small entities.

The amended orders will promote more

orderly marketing of milk by producers

and regulated handlers.

These proposed amendments have

been reviewed under Executive Order

12778, Civil Justice Reform. This rule is

not intended to have a retroactive effect.

If adopted, this proposed rule will not

preempt any state or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule.

The Agricultural Marketing

Agreement Act of 1937, as amended (7

U.S.C. 601–674), provides that

administrative proceedings must be

exhausted before parties may file suit in

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

Act, any handler subject to an order may

file with the Secretary a petition stating

that the order, any provision of the

order, or any obligation imposed in

connection with the order is not in

accordance with the law and requesting

a modification of an order or to be

exempted from the order. A handler is

afforded the opportunity for a hearing

on the petition. After a hearing, the

Secretary would rule on the petition.

The Act provides that the district court

of the United States in any district in

which the handler is an inhabitant, or

has its principal place of business, has

jurisdiction in equity to review the

Secretary’s ruling on the petition,

provided a bill in equity is filed not

later than 20 days after the date of the

entry of the ruling.

Prior documents in this proceeding;

Notice of Hearing: Issued November

21, 1994; published November 25, 1994

(59 FR 60574).

Recommended Decision: Issued

August 17, 1995; published August 24,

1995 (60 FR 43986).

Preliminary Statement

A public hearing was held upon

proposed amendments to the marketing

agreements and the orders regulating the

handling of milk in the Carolina,

Tennessee Valley, and LouisvilleLexington-Evansville 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 (7 CFR Part 900), at

Charlotte, North Carolina, on January 4,

1995. Notice of such hearing was issued

on November 21, 1994, and published

November 25, 1994 (59 FR 60574).

Upon the basis of the evidence

introduced at the hearing and the record

thereof, the Administrator, on August

17, 1995, issued a recommended

decision containing notice of the

opportunity to file written exceptions

thereto. Two comments were received

in response to the notice, both of which

fully support the findings and

conclusions of the recommended

decision.

The material issues, findings and

conclusions, rulings, and general

findings of the recommended decision

are hereby approved and adopted and

are set forth in full herein, with no

material modifications.

The material issues on the record of

the hearing relate to:

1. Marketing area modifications to the

Tennessee Valley and LouisvilleLexington-Evansville orders;

2. Where to regulate a distributing

plant that meets the pooling standards

of more than one order;

3. Supply plant pooling standards

under the Tennessee Valley order;

4. Distributing plant pooling

standards under the Carolina order;

5. Location adjustments under the

Carolina order; and

6. Base-paying months under the

Carolina order.

Findings and Conclusions

The following findings and

conclusions on the material issues are

based on evidence presented at the

hearing and the record thereof:

1. Marketing Area Modifications to the

Tennessee Valley (Order 11) and

Louisville-Lexington-Evansville (Order

46) Orders

Six now-unregulated Kentucky

counties between the Order 11 and

Order 46 marketing areas should be

added to the Order 11 marketing area

and one county that is now part of the

Order 46 marketing area should be

removed and added to the Order 11

marketing area.

A spokesman for Southern Belle Dairy

Company, Inc., testified that the six

unregulated counties—Clay, Jackson,

Laurel, McCreary, Owsley, and

Rockcastle—and the one Order 46
65024 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

county—Pulaski—are in an area that is

closely associated with the Tennessee

Valley marketing area. He pointed out,

for example, that two Order 11 pool

plants—the Flav-O-Rich plant at

London and the Southern Belle plant at

Somerset—are in Laurel and Pulaski

Counties, respectively.

The witness indicated that Southern

Belle had sales in each of the counties

proposed to be added to the marketing

area. He also introduced data showing

that 79 percent of the fluid milk sales in

the seven-county area came from the

Southern Belle and Flav-O-Rich plants.

He said that a majority of the sales in

Pulaski County also came from Order 11

plants.

There was no opposition to this

proposal either at the hearing or in posthearing briefs.

The six now-unregulated Kentucky

counties should be added to the Order

11 marketing area and Pulaski County

should be removed from the Order 46

marketing area and added to the Order

11 marketing area. This seven-county

area is closely associated with the

Tennessee Valley market and its

addition to the Order 11 marketing area,

in conjunction with the pooling

standards adopted in this decision, will

add regulatory stability for the plants

with sales in this area. There are no

plants in this seven-county area other

than the Southern Belle and Flav-ORich plants and none outside of this

area that would become regulated as a

result of the addition of this territory to

the Tennessee Valley marketing area.

A conforming change should be made

in § 1011.52(a)(3) to include the

counties of Jackson, Owsley, and

Rockcastle with the other Kentucky

counties now included in the minus 32-

cent location adjustment zone. Although

there are no plants located in these three

counties, should a plant be built there

the appropriate location adjustment

should be minus 32 cents, the same

location adjustment that is applicable in

the neighboring counties of Laurel,

Pulaski, Clay, and Breathitt.

2. Where To Regulate a Distributing

Plant That Meets the Pooling Standards

of More Than One Order

The pooling standards of the

Tennessee Valley and Carolina orders

should be modified to fully regulate a

distributing plant that is located within

their respective marketing areas and that

meets the pooling standards of

§§ 1011.7(a) or 1005.7(a), respectively,

even if the plant meets the pooling

standards of another order and has more

route disposition in such other order’s

marketing area.

These amendments will allow a

distributing plant at Kingsport,

Tennessee, that is located within the

Tennessee Valley marketing area and

that meets all of the pooling standards

of the Tennessee Valley order to be

regulated under that order rather than

under the Carolina order, despite the

plant’s having greater sales in the

Carolina marketing area. Similarly, they

will allow a distributing plant located at

Somerset, Kentucky—which, as

recommended under Issue No. 1, would

be part of the Order 11 marketing area—

to be regulated under Order 11 even if

the plant should develop greater sales in

the marketing area of Order 46 or some

other order’s marketing area. Finally,

the amendments will permit a plant

located at Greenville, South Carolina (in

the Order 5 marketing area), to be

regulated under Order 5 even if the

plant has more sales in the Southeast

marketing area (Order 7).

These amendments and the proposals

which prompted them stem from

various pricing problems under these

orders that have come about for a

variety of reasons, including the fact

that the marketing areas may not have

grown as fast as handlers’ distribution

areas. The pricing problems identified

on the record of this proceeding relate

to Land-O-Sun Dairies, Inc., at

Kingsport, Tennessee; Southern Belle

Dairy Company at Somerset, Kentucky;

and Superbrand Dairy Products, Inc., at

Greenville, South Carolina.

Land-O-Sun Dairies, Inc., operates a

plant at Kingsport, Tennessee, which is

in the Tennessee Valley marketing area.

Because of this plant’s greater route

disposition in the Carolina marketing

area, it has been regulated under that

order. During the past three years

(January 1992–November 1994), the

blend price at Kingsport under Order 5

has averaged 14 cents below the blend

price at that location under Order 11. In

some months, the difference has been as

high as 32 cents. Although the Class I

price at Kingsport is identical under

both of these orders, the Tennessee

Valley order’s higher Class I

utilization—e.g., 82.03 percent for Order

11 compared to 77.96 percent for Order

5 during the first 10 months of 1994—

has led to a higher blend price under

that order at Kingsport during nearly

every month for the past three years.

A spokesman for Land-O-Sun testified

that the Kingsport plant handles

approximately 12 million pounds of

milk per month and that about one-third

of its Class I sales are distributed on

routes within the Tennessee Valley

marketing area and the remaining twothirds within the Carolina marketing

area.

The witness testified that Land-O-Sun

purchases its raw milk supply from 140

dairy farmers located in northeast

Tennessee and southwest Virginia

within 100 miles of the Kingsport plant.

He noted that this area is also the

supply area for other Order 11 pool

plants. As a result, he said, any blend

price difference to producers in this

common supply area leads to market

instability. Because the Order 11 blend

price is higher than the Order 5 blend

price, he stated, Land-O-Sun is forced to

pay over-order prices to retain its

producers. He indicated that Land-OSun could not consistently pay these

higher prices and remain a viable

business entity.

Southern Belle Dairy at Somerset,

Kentucky, has been regulated under

Order 11 since 1989. In recent years, the

plant has had nearly equal sales in the

Order 46 and Order 11 marketing areas.

If regulation of the plant had shifted to

Order 46, the applicable Class I

differential price would be 19 cents

lower than under Order 11 (i.e., $2.26

compared to $2.45), but the blend price

difference would be even more

substantial. For example, in the past 35

months (January 1992–November 1994),

the Order 46 blend price averaged 30

cents below the Order 11 blend price at

Somerset. In some months during this

period, the difference in blend prices

was as much as 67 cents.

At the hearing, a Southern Belle

spokesman testified that the handler

sought the marketing stability that

would be provided by regulating the

plant under Order 11 based upon its

location within the Order 11 marketing

area. The spokesman stated that

Southern Belle would experience

procurement problems if it could only

pay its producers the Order 46 blend

price in competition with Order 11

handlers—such as the Flav-O-Rich plant

at London, Kentucky, 37 miles east of

Somerset—which also procure milk

from the same supply area. He also cited

the marketing instability that would

result from the plant shifting back and

forth between the two orders,

particularly in view of the differing base

and excess payment plans to producers

in each of these orders.

Superbrand Dairy Products at

Greenville, South Carolina, has been

regulated under the Georgia order since

May 1992 despite the fact that it is

located within the marketing area of the

Carolina order and meets the pooling

standards of that order.

A spokesman for Mid-America

Dairymen, Inc. (Mid-Am), which has a

full supply contract with the

Superbrand plant, testified that the

Carolina order should be amended to
Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65025

1Official notice is taken of the final decision for

the Southeast order issued on May 3, 1995 (60 FR

25014).

provide the same type of pooling

standard that has been proposed for the

Tennessee Valley order and that was

incorporated in the Department’s

recommended [and final] decisions for

the new Southeast order.1 Inclusion of

this provision in each of these orders

will provide regulatory compatibility

throughout the Southeast, he said.

The witness stated that the Mid-Am

proposal would return the Superbrand

plant to its former status as a pool plant

under Order 5. In terms of its sales and

procurement pattern, the plant is more

closely associated with the Carolina

market, he added.

The Mid-Am spokesman testified that

the proposed change in pooling

standards is a departure from the

traditional method of determining

where a distributing plant should be

regulated when it meets the pooling

standards of more than one order. The

traditional method, he explained,

regulated a plant wherever it had the

most sales. He said that the principle

behind that practice was to insure that

all handlers having sales in an order

area were subject to the same regulatory

provisions as their competition.

However, he added, with the advent of

large processing plants with sales

distribution over wide geographic areas,

the traditional method of pooling

distributing plants has become obsolete.

There was no opposition to this

proposal either at the hearing or in posthearing briefs.

For the most part, Federal milk orders

have traditionally regulated plants

according to where they had the most

sales. The reasoning behind that policy

has been to ensure that all handlers

having sales in a Federal order

marketing area were subject to the same

minimum prices (adjusted for plant

location) and other regulatory

provisions as their competition. When

these provisions were first incorporated

in orders, markets were primarily local

in nature. At any given location, it was

common for Class I prices to differ

among orders, and it was common for

each order to have a unique set of

provisions.

Most of the provisions in Federal milk

orders today are standardized. For

example, all orders have uniform

classification and allocation provisions.

Similarly, most Federal order Class I

prices are properly aligned. As noted

above, for example, the Class I price at

Kingsport, Tennessee, is the same

whether Land-O-Sun’s plant is regulated

under Order 5 or Order 11; the Southern

Belle plant at Somerset, Kentucky,

would be subject to a higher Class I

price under Order 11 than would apply

at the plant under Order 46; and the

Superbrand plant at Greenville would

be subject to the same Class I price

whether it was regulated under Order 5

or Order 7.

Consequently, it must be concluded

that the competitive equity that was,

and continues to be, sought by having

competing handlers subject to the same

rules and Class I prices can be achieved

in these marketing areas by pooling

distributing plants under the orders

applicable to the marketing areas in

which the plants are located.

Specifically, the pooling standards of

the Tennessee Valley and Carolina

orders should be amended to fully

regulate all distributing plants that meet

the orders’ pooling standards and that

are located within their respective

marketing areas.

Under the provisions adopted here for

the Carolina and Tennessee Valley

orders, a plant that qualifies as a pool

distributing plant and which is located

within the marketing area will be

regulated under the order applicable to

that marketing area even if it meets the

pooling standards of another order and

has greater sales in such other order’s

marketing area. The nearby Southeast

order, Louisville-Lexington-Evansville

order, and Upper Florida order contain

provisions (§§ 1007.7(g)(4), 1046.7(e)(3),

and 1006.7(d)(3), respectively) that

conform to the proposed provisions by

yielding regulation of such plants to the

other order.

Orders 5 and 11 also should be

modified to recognize another order’s

primacy to regulate a plant that meets

such other order’s pooling standards

and that is within the other order’s

marketing area. This is accomplished in

§§ 1005.7(e)(3) and 1011.7(e)(3).

A clarifying change should also be

made to §§ 1005.7(e)(5) and 1011.7(e)(5).

At present, these paragraphs, which are

designated as §§ 1005.7(d)(4) and

1011.7(d)(4), state that ‘‘the term pool

plant shall not apply to a plant qualified

pursuant to paragraph (b) of this section

which also meets the pooling

requirements for the month under

another Federal order.’’ A problem

could arise with this language because

during certain months of the year a

supply plant may qualify as a pool plant

by shipping less than 50 percent of its

receipts to distributing plants. For

example, if a supply plant shipped 40

percent of its receipts to pool

distributing plants under Order 5 and 40

percent of its receipts to distributing

plants under Order 11, both orders,

pursuant to the language quoted above,

would yield regulation of the plant to

the other order, leaving the plant in a

state of regulatory limbo. To prevent

this unlikely event from occurring, the

paragraph should be modified to read:

‘‘The term pool plant shall not apply to

a plant qualified pursuant to paragraph

(b) of this section if the plant has

automatic pooling status under another

Federal order or if the plant meets the

pooling requirements of another Federal

order during the month and makes

greater qualifying shipments to plants

regulated under such other order than to

plants regulated under this order.’’

3. Supply Plant Pooling Standards

Under the Tennessee Valley Order

The supply plant pooling provisions

for the Tennessee Valley order should

be amended to provide automatic

pooling status for a supply plant which

met the order’s shipping standards

during the preceding months of July

through February.

Armour Food Ingredients Company

(Armour) proposed the change in

supply plant pooling standards. A

spokesman for Armour testified that the

company operates a supply plant at

Springfield, Kentucky, that has been a

pool plant under Order 11 since August

1992. He said that the facility is a ‘‘dual

Grade A/Grade B plant.’’ The Grade A

part of the plant is used to assemble

Grade A milk from producers’ farms for

transshipment to pool distributing

plants, while the Grade B facility is used

to process surplus milk into Class III

products, he explained.

The witness testified that Order 11

now requires Armour to ship milk to

distributing plants every month of the

year. However, much less milk is

needed from Armour during the spring

than during the other months of the

year, he said. Consequently, he

concluded, Armour and its distributing

plant customers are incurring receiving

and hauling costs for no other purpose

than to satisfy the order’s shipping

requirements.

The witness introduced an exhibit

which showed that from August 1992

through October 1994 Armour shipped

a monthly average of 71 percent of its

receipts to pool distributing plants. The

exhibit also showed that when

shipments of surplus milk from these

same pool distributing plants to Armour

were subtracted from the receipts from

Armour, the distributing plants, on

average, kept 34 percent of the milk that

was sent to them.

There was no opposition to this

proposal either at the hearing or in posthearing briefs.

The provision proposed by Armour is

included in many Federal milk orders
65026 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

because of the seasonal variation in milk

production. This variation is also

evident in the Tennessee Valley market.

In 1993, the average daily production

per producer in this market was 2,220

pounds. However, this daily average

reached a low of 1,941 pounds during

the month of July and peaked at 2,481

pounds during May. As a group, the

months of March through June had a

daily average of 2,375 pounds,

compared to 2,149 pounds during the

months of July through February.

There is no merit in requiring supply

plants to receive, reload, and ship milk

to distributing plants if the milk is not

needed or if closer milk is available

directly from producers’ farms. In

addition to the statistics suggesting that

supply plant shipments during the

months of March through June are

unnecessary, the lack of any

contradictory testimony from Order 11

distributing plant operators must be

interpreted as concurrence with the

view that supply plant shipments are

simply not needed during the months of

March through June. In view of this

evidence, the proposal should be

adopted.

Section 1011.7(b)(3) of the Tennessee

Valley order, as proposed to be

amended here, also should be modified

to clarify what would happen if a

shipping requirement were instituted

during the months of March through

June pursuant to § 1011.7(b)(4). First, it

should be understood that a new supply

plant or one that did not meet the

order’s shipping requirements during

the months of July through February

would be subject to the 40 percent

supply plant shipping requirement now

in the order.

If the market is short of milk during

the ‘‘free-ride’’ months of March

through June and the market

administrator determines that additional

milk is needed from pool supply plants

pursuant to § 1011.7(b)(4), any increase

in shipping percentage would be added

to the percentage that is then applicable

to the plant. For instance, if the market

administrator determines that a 10-

percentage point increase in shipments

is needed, a plant that would have had

to ship 40 percent of its receipts would

be required to ship 50 percent.

However, a plant in ‘‘free-ride’’ status,

which normally would not have had to

make any shipments, would have to

ship 10 percent. The market

administrator’s ability to require

additional milk from supply plants,

even during the free-ride period of

March through June, will help to ensure

that the market has adequate supplies of

milk for fluid use during all months of

the year.

At the present time, §§ 1005.7(b) and

1011.7(b) of the Carolina and Tennessee

Valley orders, respectively, authorize

the Director of the Dairy Division to

adjust supply plant shipping standards

to obtain needed shipments of milk or

to prevent uneconomic shipments. This

provision was not an issue at the

hearing. However, in conjunction with

the other changes in pooling provisions

that were adopted, the recommended

decision stated that authority to adjust

supply plant shipping standards should

be given to the market administrator of

Orders 5 and 11. Although interested

parties were invited to comment on this,

as on other recommendations, no

comments were received in opposition

to this suggestion.

With all of the marketing information

immediately available to him or her, the

market administrator is in an ideal

position to sense the changing needs of

the market and to obtain industry views

concerning the desirability of adjusting

supply plant shipping requirements. As

a result, the market administrator will

be able to attend to the need for such

temporary revisions in a timely fashion

and will be able to better serve the

changing needs of handlers and

producers under the Carolina and

Tennessee Valley orders.

A similar conforming change also

should be made in § 1011.13(e)(3) of the

Tennessee Valley order for the same

reasons. This change will allow the

market administrator to increase or

decrease, by 10 percentage points, the

diversion limitations applicable to a

proprietary bulk tank handler.

4. Distributing Plant Pooling Standards

Under the Carolina Order

Proposals to amend the Order 5 inarea route disposition requirement for

pool distributing plants should not be

adopted.

At the present time, a distributing

plant must dispose of at least 60 percent

of its fluid milk product receipts in

Class I during the months of August

through November, January, and

February and at least 40 percent in each

of the other months to qualify as a pool

plant under Order 5. In addition, at least

15 percent of the plant’s route

disposition must be in the marketing

area.

Milkco, Inc., testified in support of its

proposal to change the in-area route

disposition standard of Order 5 from 15

percent to 10 percent. At the hearing,

Milkco modified its proposal to the

lesser of 1500 pounds daily or 10

percent of a plant’s fluid milk receipts

sold as Class I.

A witness representing Milkco,

Carolina Dairies, Hunter Farms, Inc.,

Dairy Fresh, Inc., and Pine State

Creamery testified that the original

proposal had been modified to include

language similar to that contained in the

recommended decision of the proposed

Southeast Federal order.

The witness testified that the reason

for proposing a change in the in-area

route disposition requirement was that

partially regulated handlers were

constantly increasing their Class I

distribution into the Order 5 marketing

area. He estimated that the average

distribution for 1994 was between 25

million and 35 million pounds. He

claimed that this distribution is

attributed to sales from partially

regulated plants located in Virginia.

The witness explained that the

Virginia State Milk Commission prices

Class I sales made outside the State of

Virginia at the Federal order Class II

price. He said that this creates a

problem of accountability for those

Class I sales moving from Virginia to

another state. He claimed that the

possibility exists that, in some

instances, not all of those sales may be

accounted for and paid for at the

appropriate price.

The witness stated that the proposed

amendment would provide uniformity

between Order 5 and surrounding

orders. He also claimed that the

proposed change would not be

burdensome to handlers located in

Virginia if these handlers are already

paying prices equivalent to, or greater

than, the Order 5 Class I price.

The general manager for Carolina

Virginia Milk Producers Association

(CVMPA) also testified in support of the

revised proposal. He stated that the

proposal would provide uniformity

between Order 5 and neighboring orders

and that it would eliminate potential

inequities between Order 5 handlers

and handlers regulated by the Virginia

Milk Commission.

The CVMPA representative asserted

that the proposal would regulate some

partially regulated plants that may be

subject to a lower price for milk used in

fluid milk products than fully regulated

plants under Order 5. He explained that

handlers regulated under Order 5 must

pay at least the minimum Federal order

class prices for their milk. He claimed

that plants located in Virginia and

regulated by the Virginia Milk

Commission have a competitive

advantage on raw milk costs compared

to handlers fully regulated under Order

5. The witness indicated that the Class

I price established and regulated by the

Virginia Milk Commission has

historically been higher than the Order

5 price but that the Commission
Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65027

requires that only the Class II price be

paid for sales out of the State.

The CVMPA witness testified that

sales from partially regulated handlers

located in Virginia into the Carolina

marketing area have a significant impact

on the market. Since January 1992, he

pointed out, sales from these plants

have ranged from one to three million

pounds of Class I sales or between .84

and 2.26 percent of total route

disposition in Order 5. He said that

while these Class I sales from Virginia

partially regulated plants are confined

to a small portion of the marketing area,

they have had a disruptive effect on the

market in eastern North Carolina.

The CVMPA representative testified

that Federal orders contiguous to the

Carolina marketing area have more

restrictive pool plant requirements than

the Carolina order. He noted that the

Tennessee Valley order’s in-area route

disposition requirement was 10 percent

and that the recommended Southeast

order would fully regulate handlers if a

plant distributed either 10 percent of its

total fluid milk receipts or at least 1500

pounds of Class I sales per day in the

marketing area. Such requirements are

appropriate for orders with relatively

high Class I utilization, he said.

Maryland & Virginia Milk Producers

Cooperative Association, Inc.

(MVMPCA), proposed a change to the

Order 5 in-area route disposition

requirement that would have exactly the

opposite effect of Milkco’s proposal.

The MVMPCA proposal would base the

in-area requirement on 15 percent of

‘‘dairy farmer receipts’’ rather than 15

percent of ‘‘total route disposition.’’

Because dairy farmer receipts would be

larger than total route disposition, the

proposal would have the effect of

making it more difficult to qualify for

full regulation under Order 5.

A spokesman for MVMPCA testified

that the proposed change would amend

the Order 5 provision to conform more

closely with the provisions of the

Middle Atlantic order (Order 4). He said

that these definitions should be more

closely aligned to allow distributing

plants in the Commonwealth of

Virginia, which are partially regulated

under both Orders 4 and 5, to be subject

to the same in-area route distribution

standard under either Federal order.

Without alignment of these

provisions, he said, there could be

results which are neither intended nor

orderly. For instance, he stated, a plant

could have more route sales in Order 4

but become fully regulated under Order

5.

The witness stated that there are

currently three dairies partially

regulated in both Orders 4 and 5:

Richfood at Richmond, Virginia; LandO-Sun Dairies, Inc., at Portsmouth,

Virginia; and Marva Maid Dairy at

Newport News, Virginia. He said that

these Virginia plants are the only

partially regulated distributing plants

subject to Order 5 other than the several

plants which distribute long-shelf-life

fluid milk products in a broad

geographic area over most of the United

States. Consequently, he concluded, the

MVMPCA proposal would not have a

substantial impact upon any other

plants.

A witness representing Richfood

Dairy, Inc. (Richfood), Richmond,

Virginia, testified in opposition to

Milkco’s proposal to reduce the Order 5

in-area route disposition requirement

and in support of Richfood’s proposal to

increase the requirement from 15

percent to 20 percent.

The witness stated that Richfood has

about 83 percent of its fluid milk

product sales in that part of Virginia

that is outside the Middle Atlantic

(Order 4) marketing area. The plant has

approximately 12 percent of its sales in

the Carolina marketing area, 4 percent

in the Order 4 marketing area, and the

remaining 1 or 2 percent in the Ohio

Valley marketing area. Richfood’s sales

into the Carolina marketing area account

for about 1 percent of the market’s total

in-area sales, according to the witness.

The Richfood witness stated that

Richfood primarily has fluid milk sales

in the eastern Virginia market with

some in the western Virginia market.

During October 1994, the witness noted,

the eastern and western markets’ Class

I prices were $16.29 and $16.02,

respectively. He said that these Virginia

prices, based on the way in which

Federal order Class I prices are set,

would represent October Class I

differentials of $4.56 for the eastern

market and $4.29 for the western

market. Federal order Class I

differentials of this magnitude, he

emphasized, are not even found in

Miami, the highest priced location

under the Federal order system. These

facts, he claimed, show that purchasers

of raw milk in Virginia do not have an

unfair competitive advantage over

handlers regulated under a Federal

order. He concluded that a plant with 10

percent of its sales in the Carolina

marketing area and 80 percent in

Virginia should not be forced to be fully

regulated under Order 5.

The administrator of the Virginia

State Milk Commission (the

Commission) testified in opposition to

Milkco’s original proposal. The

administrator stated that pooling

Virginia plants that have less than 15

percent of their total sales in a Federal

order marketing area would be

disruptive to the Commission’s ability

to price and pool milk in the Virginia

marketing areas. He argued that there

are less intrusive ways to accomplish

class price integrity for pooling

producer milk.

The witness stated that the

Commission was willing to assist the

Department to ensure proper reporting

and pricing within Federal milk

marketing areas to alleviate the concerns

of those who have doubts that Virginia’s

out-of-area prices are being enforced.

The witness explained that the

Commission has the ability to report

sales by Virginia plants into Federal

orders in a timely and accurate manner,

and is willing to provide such

information to the appropriate Federal

order market administrator to help

enforce proper pricing.

Neither Milkco’s proposal, which

would make it easier to fully regulate an

out-of-area plant, nor MVMPCA’s or

Richfood’s proposal, which would make

it harder to fully regulate an out-of-area

plant, should be adopted.

Proponents of Milkco’s proposal

argued that the amount of sales into the

Carolina marketing area from partially

regulated plants located in Virginia is

constantly increasing due to the

presence of these plants. Record

evidence does not support this

argument. For instance, route

disposition in Order 5 by partially

regulated plants during the months of

July through October 1994 was lower

than for the same period of 1993. In

addition, statistics show that in-area

route disposition into Order 5 from

partially regulated plants located in

Virginia have been at a relatively

constant level over the past two years.

For example, in 1993 and 1994, the

average share of total Order 5 Class I

route disposition from these plants was

2.05 and 1.95 percent, respectively.

No evidence presented at the hearing

supported the arguments advanced by

Milkco and CVMPA concerning the

alleged competitive advantage that

partially regulated plants in Virginia

have in the Carolina marketing area. The

record is devoid of any data to support

this claim.

With respect to proponents’

arguments that changes in Order 5

would bring this order into conformance

with the Middle Atlantic order or the

Southeast order, marketing conditions

in the Carolina order do not warrant any

change to the in-area route disposition

requirement for this reason. Moreover, it

is not clear why differences in the inarea route disposition requirements of

these orders would matter in most

circumstances. The only area where this
65028 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

issue seems to be particularly acute is in

Virginia. Even in Virginia, however,

there is an insufficient basis to conclude

that any competitive advantage exists

that would warrant undermining of the

Virginia State Milk Commission

regulation.

The in-area route disposition

requirement is a locally tailored

standard that indicates when a plant is

sufficiently associated with a market to

warrant full regulation under the order

regulating that marketing area. Whether

the standard should be 10 percent or 15

percent depends upon particular

circumstances in that area and the

demonstrated need for one standard or

the other. Based on the testimony and

data in this hearing record, the present

15 percent in-area route disposition

requirement under Order 5 should

remain unchanged.

MVMPCA submitted comments in

support of the findings and conclusions

of the recommended decision regarding

the Order 5 in-area route disposition

requirement.

5. Location Adjustments Under the

Carolina Order

The location adjustment under the

Carolina order for a location within the

Middle Atlantic Federal order marketing

area should be determined by

subtracting the Order 4 Class I price at

that location from the base zone Class I

price specified in Order 5.

At the present time, the Order 5

location adjustment for a plant located

in the State of Maryland is based upon

the shortest hard-surfaced highway

distance, as determined by the market

administrator, that such plant is from

Greensboro, North Carolina. Once that

distance is determined, it is broken

down into 10-mile increments (except

for the last increment, which may be

smaller than 10 miles), which are then

multiplied by 2.5 cents to determine the

location adjustment. Thus, for example,

the location adjustment for a plant that

is located 295 miles from Greensboro

would be 75 cents (i.e., 30 × 2.5 = .75).

Maryland and Virginia Milk

Producers Cooperative Association

proposed a change in the location

adjustment applicable to its butter/

powder plant at Laurel, Maryland.

Initially, the cooperative proposed

treating the Laurel plant as if it were

within the State of Virginia; this would

result in a zero location adjustment at

Laurel. However, at the hearing a

spokesman for the cooperative stated

that it would support an alternative

proposal that would subtract the Order

4 Class I differential price at Laurel (i.e.,

$3.03) from the Order 5 Class I price at

Greensboro (i.e., $3.08), which results in

a location adjustment of minus 5 cents.

The witness stated that ‘‘our only caveat

to this pricing formula is that the Order

5 language should be amended so that

the price at Strasburg, Virginia, is

established on the same basis as the

price at Laurel, Maryland.’’

The cooperative’s spokesman testified

that MVMPCA supplies the Kroger

Westover Dairy Order 5 pool

distributing plant at Lynchburg,

Virginia, on a year-round basis. In

addition, he said that since 1992 the

cooperative has supplied supplemental

milk to nine other Order 5 distributing

plants on a seasonal basis.

The witness said that MVMPCA has

served as a seasonal balancing agent in

supplying Order 5 plants. He introduced

an exhibit showing that MVMPCA’s

monthly sales to Order 5 plants reach a

peak during the short production

months of July through October.

The witness stated that when

producers’ milk is not needed by Order

5 plants, it is diverted to MVMPCA’s

butter-powder plant at Laurel, which

serves as a major balancing plant for the

Middle Atlantic region. The witness

also noted that there is another

balancing facility for Order 5 surplus

milk—the Valley Milk butter/powder

plant located at Strasburg, Virginia—

which is approximately 80 miles west of

Laurel and outside of any Federal order

marketing area. He said that Order 5

now prices milk in an inequitable

manner by providing a base zone

uniform price for milk that is diverted

to Strasburg, but a minus 75-cent

location adjustment for milk that is

diverted to Laurel.

There was no opposition to this

proposal either at the hearing or in the

post-hearing briefs that were filed.

MVMPCA’s argument and alternative

proposal for pricing milk at Laurel is

persuasive and should be adopted. The

location adjustment at Laurel clearly

should not be minus 75 cents. It should

be minus 5 cents, the difference

between the Order 5 base zone Class I

price and the Order 4 Class I price at

Laurel.

The appropriate Federal order Class I

price at Laurel, Maryland, is the price

established for that location under the

Middle Atlantic Federal order, which

encompasses Laurel. Thus, if a

distributing plant located at Laurel were

to become regulated under Order 5, its

Class I price would be the same as the

price that would apply under Order 4.

This would ensure competitive pricing

among competing handlers.

Determining location adjustments for

plants in this manner helps to assure the

proper alignment of Class I prices

throughout the Federal order system

and to minimize procurement problems

for plants that are located in one Federal

order marketing area but regulated

under a different order.

The evidence introduced by

MVMPCA shows that its producers

supplying the Order 5 market are

located as far south as the Virginia/

North Carolina border and as far north

as Cumberland County, Maryland. The

exhibit, for example, shows that

MVMPCA has producers in Halifax

County, Virginia, just north of the Order

5 base zone. When producer milk from

Halifax is delivered to a distributing

plant at Lynchburg or to a North

Carolina handler in the base zone, the

milk is priced at the base zone price.

Yet, under present order provisions, if

the milk is not needed for fluid use by

an Order 5 distributing plant and must

be diverted to MVMPCA’s butterpowder plant at Laurel, 247 miles away,

it receives 75 cents less than the base

zone price. Consequently, not only does

MVMPCA receive a much lower price

for this milk, it also absorbs the hauling

cost to get the milk to Laurel.

A location adjustment of minus 5

cents at Laurel will narrow the

difference to 5 cents between the Laurel

and Strasburg plants. This adjustment

should alleviate the inequity that now

exists in pricing between the two plants.

To further reduce the difference in price

by imposing a minus 5-cent location

adjustment at Strasburg, as suggested by

MVMPCA, would entail changing

location adjustments throughout the

State of Virginia, which goes beyond the

scope of the hearing proposals.

MVMPCA filed comments supporting

the Order 5 proposed location

adjustment change.

6. Base-Paying Months Under the

Carolina Order

Maryland & Virginia Milk Producers

Cooperative Association, Inc., originally

submitted a proposal to delete the

month of June from the base-paying

period of the Order 5 base and excess

payment plan. At the hearing, however,

the cooperative modified its proposal to

add the month of February as well as

delete the month of June. As modified,

the base-paying months would be

February through May.

The MVMPCA witness stated that the

purpose of the base-excess plan is to

provide producers with an incentive to

level their production on a seasonal

basis. He indicated that the plan

encourages production during the

months when milk is needed for fluid

use and discourages production during

flush production months. Under current

marketing conditions, he contended,

June is not a surplus month but a month
Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65029

when supplemental supplies are

frequently needed by Order 5

distributing plants. Likewise, he

asserted that February is a month of

substantial surplus production and

should be added to the base-paying

period rather than remain a base neutral

month.

During 1992 and 1993, the MVMPCA

witness noted, daily average production

per Order 5 producer from May to June

declined about 8 percent, from 4,259

pounds per day to 3,978, and from 4,424

to 4,076, respectively. However, he

indicated that daily average production

in Order 5 in February 1993 of 4,684

pounds was the highest production

month of the year, and production in

February 1992 was the third highest

month.

The witness also testified that a

collateral consequence of including June

as a base-paying month is that when

supplemental supplies are needed

under Order 5, unnecessary and

inefficient movements of milk are

required to avoid the penalty of

absorbing the excess price for supplies

of milk that are required for the market’s

Class I needs. The witness explained

that when supplemental milk is needed

during the month of June, MVMPCA

avoids the penalty of receiving only the

excess price for milk delivered directly

from producers’ farms by instead

delivering plant milk from its Laurel

plant. To do this, however, the

cooperative must receive the milk at

Laurel, reload it onto a tank truck, and

ship it to an Order 5 distributing plant.

He said that the modified proposal

would eliminate unnecessary and

inefficient movements of milk for the

sole purpose of avoiding the order’s

excess price.

There was no opposition to this

proposal either at the hearing or in posthearing briefs.

The modified proposal to change the

base-paying period from March through

June to February through May should be

adopted. The removal of June and the

addition of February to the base-paying

period will bring the base-paying

months into closer conformity with the

Class I needs of the market.

For the past three years, the average

Class I utilization in January has been

77.8 percent while the June Class I

utilization has averaged 79.8 percent for

this same time period. By comparison,

the average Class I utilization for the

months of February through May has

been 75.6, 75.7, 73.9, and 75.1 percent,

respectively. The record also shows that

June is a month in which supplemental

supplies of milk are needed to meet the

Class I needs of the market.

On the basis of the statistical data and

the testimony presented at the hearing,

the month of February should be

included in the base-paying period and

June deleted to change the base-paying

period to February through May. These

changes should result in a base and

excess plan that better serves the needs

of the market and that will avoid the

unnecessary and inefficient movements

of needed supplemental milk described

by MVMPCA.

Several conforming changes in order

language have been made in response to

the addition of February and the

removal of June as a base-paying month.

In § 1005.32(a), dealing with ‘‘other

reports,’’ the words ‘‘March through

June’’ should be changed to ‘‘February

through May’’. In the introductory text

of § 1005.61(a) and in § 1005.61(a)(5),

the words ‘‘July through February’’ must

be changed to ‘‘June through January’’,

and in § 1005.61(b) the words ‘‘March

through June’’ must be changed to

‘‘February through May’’. In §§ 1005.90,

1005.91, and 1005.93(b) the words

‘‘March through June’’ must be changed

to ‘‘February through May’’, and the

words ‘‘February 1’’ in § 1005.93(b) and

§ 1005.94 should be changed to

‘‘January 1’’ to maintain the existing

relationship between the start of the

base-paying period and the time when

transfers must be completed without the

imposition of conditions concerning the

receipt or transfer of additional base.

Finally, ‘‘March 1’’ should be changed

to ‘‘February 1’’ in § 1005.93(e).

MVMPCA submitted comments in

support of the proposed modifications

to the Order 5 base-excess plan.

Motion for a New Hearing

Purity Dairy and Fleming Dairy, both

of Nashville, Tennessee, argued that the

remedies proposed at this hearing were

not sufficient to address some major

problems. They maintain that while the

proposed amendments would

temporarily correct some problems, in

the long run these remedies would only

make the problems worse. They urged

the Secretary to hold a new hearing to

consider a merger of Orders 5, 11, and

46 or the merger of Orders 5 and 11 with

the proposed Southeast marketing area.

A major study of Orders 5, 11, and 46

and other marketing areas is currently

underway at Cornell University. One of

the purposes of this study is to develop

recommendations for a merged order in

this area.

There have been several major

changes in cooperative representation,

supply arrangements, and plant

ownership in these markets. Milk has

been shifting among the markets. The

alleged problem in south central

Kentucky of misaligned uniform prices

causing Purity and Fleming to be at a

competitive disadvantage for milk

supplies has been corrected by the

association of additional milk with

Order 11, which has lowered that

order’s Class I utilization. There is no

point in considering a merger of orders

in this area until such time as producers

and handlers propose such a merger.

For all of these reasons, the motion to

hold a new hearing is denied.

Rulings on Proposed Findings and

Conclusions

Briefs and 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

requests 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 aforesaid

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) The tentative 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 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 marketing area, and the

minimum prices specified in the

tentative marketing agreements and the

orders, as hereby proposed to be

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;

(c) The tentative 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, marketing agreements upon

which a hearing has been held; and
65030 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

(d) All milk and milk products

handled by handlers, as defined in the

tentative marketing agreements and the

orders as hereby proposed to be

amended, are in the current of interstate

commerce or directly burden, obstruct,

or affect interstate commerce in milk or

its products.

Rulings on Exceptions

No exceptions were received in

opposition to the proposed amendments

set forth in the recommended decision.

Marketing Agreement and Order

Annexed hereto and made a part

hereof are two documents, a Marketing

Agreement regulating the handling of

milk, and an Order amending the orders

regulating the handling of milk in the

Carolina, Tennessee Valley, and

Louisville-Lexington-Evansville

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

decision and the two documents

annexed hereto be published in the

Federal Register.

Determination of Producer Approval

and Representative Period

August 1995 is hereby determined to

be the representative period for the

purpose of ascertaining whether the

issuance of the orders, as amended and

as hereby proposed to be amended,

regulating the handling of milk in the

aforesaid marketing areas is approved or

favored by producers, as defined under

the terms of the individual orders (as

amended and as hereby proposed to be

amended), who during such

representative period were engaged in

the production of milk for sale within

the aforesaid marketing areas.

List of Subjects in 7 CFR Parts 1005,

1011, and 1046

Milk marketing orders.

Dated: December 4, 1995.

Shirley R. Watkins,

Acting Assistant Secretary, Marketing and

Regulatory Programs.

Order Amending the Orders Regulating

the Handling of Milk in the Carolina,

Tennessee Valley, and LouisvilleLexington-Evansville Marketing Areas

This order shall not become effective

unless and 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.

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 aforesaid

marketing areas. The hearing was held

pursuant to the provisions of the

Agricultural Marketing Agreement Act

of 1937, as amended (7 U.S.C. 601–674),

and the applicable rules of practice and

procedure (7 CFR Part 900).

Upon the basis of the evidence

introduced at such hearing and the

record thereof, it is found that:

(1) The 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;

(3) The said orders as hereby

amended regulate the handling of milk

in the same manner as, and is applicable

only to persons in the respective classes

of industrial or commercial activity

specified in, marketing agreements upon

which a hearing has been held; and

(4) All milk and milk products

handled by handlers, as defined in the

order as hereby amended, are in the

current of interstate commerce or

directly burden, obstruct, or affect

interstate commerce in milk or its

products.

Order Relative to Handling

It is therefore ordered, that on and

after the effective date hereof, the

handling of milk in each of the specified

orders’ marketing areas shall be in

conformity to and in compliance with

the terms and conditions of each of the

orders, as amended, and as hereby

amended, as follows:

The provisions of the proposed

marketing agreements and orders

amending each of the specified orders

contained in the recommended decision

issued by the Administrator,

Agricultural Marketing Service, on

August 17, 1995, and published in the

Federal Register on August 24, 1995 (60

FR 43986), shall be and are the terms

and provisions of this order, amending

the orders, and are set forth in full

herein.

PART 1005—MILK IN THE CAROLINA

MARKETING AREA

1. The authority citation for 7 CFR

parts 1005, 1011, and 1046 continues to

read as follows:

Authority: 7 U.S.C. 601–674.

2. In § 1005.7, the reference ‘‘(d)’’ in

the introductory text is revised to read

‘‘(e)’’, in paragraph (b) the words

‘‘Director of the Dairy Division’’ and

‘‘Director’’ are revised to read ‘‘market

administrator’’ wherever they appear,

paragraph (d) is redesignated as

paragraph (e) and revised, and a new

paragraph (d) is added to read as

follows:

§ 1005.7 Pool plant.

* * * * *

(d) A plant located within the

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

plant) that meets the qualifications

described in paragraph (a) of this

section regardless of its quantity of route

disposition in any other Federal order

marketing area.

(e) The term ‘‘pool plant’’ shall not

apply to the following plants:

(1) A producer-handler plant;

(2) A governmental agency plant;

(3) A plant with route disposition in

this marketing area that is located

within the marketing area of another

Federal order and that is fully regulated

under such order;

(4) A plant qualified pursuant to

paragraph (a) of this section which is

not located within any Federal order

marketing area but which also meets the

pooling requirements of another Federal

order and from which there is a greater

quantity of route disposition, except

filled milk, during the month in such

other Federal order marketing area than

in this marketing area; and

(5) A plant qualified pursuant to

paragraph (b) of this section if the plant

has automatic pooling status under

another Federal order or if the plant

meets the pooling requirements of

another Federal order during the month

and makes greater qualifying shipments

to plants regulated under such other

order than to plants regulated under this

order.
Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules 65031

§ 1005.32 [Amended]

3. In § 1005.32(a), the words ‘‘March

through June’’ are revised to read

‘‘February through May’’ wherever they

appear.

4. In § 1005.53, paragraph (a)(6) is

redesignated as paragraph (a)(7) and

revised, and a new paragraph (a)(6) is

added to read as follows:

§ 1005.53 Plant location adjustments for

handlers.

(a) * * *

(6) For a plant located within the

Middle Atlantic Federal Order

Marketing Area (part 1004), the

adjustment shall be computed by

subtracting the base zone Class I price

specified in § 1005.50(a) from the Class

I price applicable at such plant under

the Middle Atlantic Federal Order; and

(7) For a plant located outside the

areas specified in paragraphs (a)(1)

through (a)(6) of this section, the

adjustment shall be a minus 2.5 cents

for each 10 miles or fraction thereof (by

the shortest hard-surfaced highway

distance as determined by the market

administrator) that such plant is from

the nearer of the city halls in Greenville,

South Carolina, or Charlotte or

Greensboro, North Carolina.

§ 1005.61 [Amended]

5. In § 1005.61 paragraphs (a)

introductory text and (a)(5), the words

‘‘July through February’’ are revised to

read ‘‘June through January’’ and in

paragraph (b) introductory text the

words ‘‘March through June’’ are revised

to read ‘‘February through May’’.

§§ 1005.90 and 1005.91 [Amended]

6. In §§ 1005.90 and 1005.91, the

words ‘‘March through June’’ are revised

to read ‘‘February through May’’

wherever they appear.

§ 1005.93 [Amended]

7. In § 1005.93 paragraph (b), the

words ‘‘March through June’’ are revised

to read ‘‘February through May’’

wherever they appear, the words

‘‘February 1’’ are revised to read

‘‘January 1’’, and in paragraph (e) the

words ‘‘March 1’’ are revised to read

‘‘February 1’’.

§ 1005.94 [Amended]

8. In § 1005.94, the words ‘‘February

1’’ are revised to read ‘‘January 1’’.

PART 1011—MILK IN THE TENNESSEE

VALLEY MARKETING AREA

9. Section 1011.2 is amended by

revising paragraph (b) to read as follows:

§ 1011.2 Tennessee Valley marketing area

* * * * *

(b) In Kentucky, the counties of Bell,

Breathitt, Clay, Harlan, Jackson, Knott,

Knox, Laurel, Leslie, Letcher, McCreary,

Owsley, Perry, Pulaski, Rockcastle, and

Whitley.

* * * * *

10. In § 1011.7, the reference ‘‘(d)’’ in

the introductory text is revised to read

‘‘(e)’’, paragraph (b) is revised,

paragraph (d) is redesignated as

paragraph (e) and revised, and a new

paragraph (d) is added to read as

follows:

§ 1011.7 Pool plant.

* * * * *

(b) A plant, other than a plant

described in paragraph (a) of this

section, from which fluid milk products,

except filled milk, are shipped to plants

described in paragraph (a) of this

section subject to the following

additional conditions:

(1) During the months of August

through November, January and

February, such shipments must equal

not less than 60 percent (40 percent

during the months of December and

March through July) of the total quantity

of milk approved by a duly constituted

regulatory agency for fluid consumption

that is received during the month at

such plant from handlers described in

§ 1011.9 (c) and (d) and from dairy

farmers, including milk that is diverted

from the plant pursuant to § 1011.13 but

excluding milk diverted to the plant;

(2) The operator of a plant described

in this paragraph may include milk

diverted from the plant to plants

described in paragraph (a) of this

section for up to one-half of the

shipments required pursuant to this

paragraph;

(3) A plant which meets the shipping

requirements specified in this paragraph

during the months of July through

February shall be a pool plant during

the following months of March through

June unless the milk received at the

plant does not continue to meet the

requirements of a duly constituted

regulatory agency, the plant fails to meet

a shipping requirement instituted

pursuant to paragraph (b)(4) of this

section, or a written application is filed

by the plant operator with the market

administrator on or before the first day

of any such month requesting that the

plant be designated a nonpool plant for

such month and for each subsequent

month through June during which it

would not otherwise qualify as a pool

plant; and

(4) The shipping requirements

described in paragraph (b)(1) and (b)(3)

of this section may be increased or

decreased up to 10 percentage points by

the market administrator if he or she

finds that revision is necessary to obtain

needed shipments or to prevent

uneconomic shipments. Before making

such a finding, the market administrator

shall investigate the need for revision

either at his or her own initiative or at

the request of interested persons. If the

investigation shows that a revision may

be appropriate, the market administrator

shall issue a notice stating that the

revision is being considered and invite

data, views, and arguments.

* * * * *

(d) A plant located within the

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

plant) that meets the qualifications

described in paragraph (a) of this

section regardless of its quantity of route

disposition in any other Federal order

marketing area.

(e) The term ‘‘pool plant’’ shall not

apply to the following plants:

(1) A producer-handler plant;

(2) A governmental agency plant;

(3) A plant with route disposition in

this marketing area that is located

within the marketing area of another

Federal order and that is fully regulated

under such order;

(4) A plant qualified pursuant to

paragraph (a) of this section which is

not located within any Federal order

marketing area but which also meets the

pooling requirements of another Federal

order and from which there is a greater

quantity of route disposition, except

filled milk, during the month in such

other Federal order marketing area than

in this marketing area; and

(5) A plant qualified pursuant to

paragraph (b) of this section if the plant

has automatic pooling status under

another Federal order or if the plant

meets the pooling requirements of

another Federal order during the month

and makes greater qualifying shipments

to plants regulated under such other

order than to plants regulated under this

order.

§ 1011.13 [Amended]

11. In § 1011.13 paragraph (e)(3), the

words ‘‘Director of the Dairy Division’’

and ‘‘Director’’ are revised to read

‘‘market administrator’’ wherever they

appear.

12. Section 1011.52(a)(3) is revised to

read as follows:

§ 1011.52 Plant location adjustments for

handlers.

(a) * * *

(3) For such milk which is physically

received at a plant located within the

Kentucky counties of Bell, Breathitt,

Clay, Harlan, Jackson, Knott, Knox,

Laurel, Leslie, Letcher, McCreary,

Owsley, Perry, Pulaski, Rockcastle, and
65032 Federal Register / Vol. 60, No. 242 / Monday, December 18, 1995 / Proposed Rules

1First and last sections of order.

2Appropriate Part number.

3Next consecutive section number.

4Appropriate representative period for the order.

Whitley, the Class I price shall be

decreased by 32 cents; and

* * * * *

PART 1046—MILK IN THE

LOUISVILLE-LEXINGTON-EVANSVILLE

MARKETING AREA

§ 1046.2 [Amended]

13. In § 1046.2, in the list of Kentucky

counties, the word ‘‘Pulaski’’ is

removed.

[Note: The following appendix will not be

published in the Code of Federal

Regulations.]

Appendix—Marketing Agreement

Regulating the Handling of Milk in Certain

Specified 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

§§llllll1 to llllll, all

inclusive, of the order regulating the

handling of milk in the said marketing areas

(7 CFR part llll2) which is annexed

hereto; and

II. The following provisions:

§llllll3 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 llllll4,

llllll hundredweight of milk covered

by this marketing agreement.

(b) Authorization to correct typographical

errors. The undersigned hereby authorizes

the Director, or Acting Director, Dairy

Division, Agricultural Marketing Service, to

correct any typographical errors which may

have been made in this marketing agreement.

§llllll3 Effective date. This

marketing agreement shall become effective

upon the execution of a counterpart hereof by

the Secretary in accordance with Section

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

[FR Doc. 95–30670 Filed 12–15–95; 8:45 am]

BILLING CODE 3410–02–P

NUCLEAR REGULATORY

COMMISSION

10 CFR Part 50

RuleNet Communication Program; Fire

Protection Regulations—Correction

AGENCY: Nuclear Regulatory

Commission.

ACTION: RuleNet announcement;

Correction.

SUMMARY: This document corrects a

notice of availability appearing in the

Federal Register on November 15, 1995

(60 FR 57370), that listed the electronic

address for accessing the RuleNet

program. This action is necessary to

correct a printing error in the RuleNet

address.

FOR FURTHER INFORMATION CONTACT:

Francis Cameron, U.S. Nuclear

Regulatory Commission, Washington,

DC 20555–0001, telephone (301) 415–

1642.

On page 57370, under the ADDRESSES

heading, in the fifth line, the electronic

address that reads ‘‘http:/nssc.llnl.gov/

RuleNet’’ should read ‘‘http://

nssc.llnl.gov/RuleNet.’’

Dated at Rockville, Maryland, this 13th day

of December, 1995.

For the Nuclear Regulatory Commission.

Michael T. Lesar,

Chief, Rules Review Section, Rules Review

and Directives Branch.

[FR Doc. 95–30666 Filed 12–15–95; 8:45 am]

BILLING CODE 7590–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 95–NM–88–AD]

Airworthiness Directives; Lockheed

Model L–1011–385 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes the

supersedure of an existing airworthiness

directive (AD), applicable to all

Lockheed Model L–1011–385 series

airplanes, that currently requires

inspections to detect cracking of certain

areas of the rear spar caps, web, skin,

and certain fastener holes; and repair or

modification, if necessary. That AD was

prompted by reports of fatigue cracks in

the caps of the wing rear spar inboard

of inner wing station 346. The actions

specified by that AD are intended to

prevent rupture of the rear spar, which

could result in extensive damage to the

wing and fuel spillage. This action

would add various improved

inspections and follow-on actions, and

would require that the initial

inspections be accomplished at reduced

thresholds.

DATES: Comments must be received by

February 13, 1996.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–103,

Attention: Rules Docket No. 95–NM–

88–AD, 1601 Lind Avenue, SW.,

Renton, Washington 98055–4056.

Comments may be inspected at this

location between 9:00 a.m. and 3:00

p.m., Monday through Friday, except

Federal holidays.

The service information referenced in

the proposed rule may be obtained from

Lockheed Aeronautical Systems

Support Company, Field Support

Department, Dept. 693, Zone 0755, 2251

Lake Park Drive, Smyrna, Georgia

30080. This information may be

examined at the FAA, Transport

Airplane Directorate, 1601 Lind

Avenue, SW., Renton, Washington; or at

the FAA, Small Airplane Directorate,

Atlanta Aircraft Certification Office,

Campus Building, 1701 Columbia

Avenue, Suite 2–160, College Park,

Georgia.

FOR FURTHER INFORMATION CONTACT:

Thomas Peters, Aerospace Engineer,

Flight Test Branch, ACE–116A, FAA,

Small Airplane Directorate, Atlanta

Aircraft Certification Office, Campus

Building, 1701 Columbia Avenue, Suite

2–160, College Park, Georgia 30337–

2748; telephone (404) 305–7367; fax

(404) 305–7348.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to

participate in the making of the

proposed rule by submitting such

written data, views, or arguments as

they may desire. Communications shall

identify the Rules Docket number and

be submitted in triplicate to the address

specified above. All communications

received on or before the closing date

for comments, specified above, will be

considered before taking action on the

proposed rule. The proposals contained

in this notice may be changed in light

of the comments received.