[Federal Register Volume 60, Number 26 (Wednesday, February 8, 1995)]
[Rules and Regulations]
[Pages 7432-7434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3143]



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DEPARTMENT OF AGRICULTURE
7 CFR Parts 1005, 1007, 1011, 1046

[DA-95-06]


Milk in the Carolina, Georgia, Tennessee Valley, and Louisville-
Lexington-Evansville Marketing Areas; Suspension of Certain Provisions 
of the Orders

AGENCY: Agricultural Marketing Service, USDA.

 [[Page 7433]] ACTION: Suspension of rules.

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SUMMARY: This document extends a suspension of certain provisions of 
the Carolina, Georgia, Tennessee Valley, and Louisville-Lexington-
Evansville Federal milk orders from March 1, 1995, through February 28, 
1996, or until the conclusion of an amendatory proceeding (DA-94-12) 
which addressed these matters.

EFFECTIVE DATE: March 1, 1995, through February 28, 1996.

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: Prior document in this proceeding:
    Notice of Proposed Suspension: Issued November 21, 1994; published 
November 25, 1994 (59 FR 60572).
    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. 
This rule lessens the regulatory burden on small entities by removing 
pricing disparities that are causing or could cause financial hardship 
for certain regulated plants.
    The Department is issuing this final rule in conformance with 
Executive Order 12866.
    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. This rule is not intended to have a retroactive 
effect. This 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 provisions 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.
    This order of suspension is issued pursuant to the provisions of 
the Agricultural Marketing Agreement Act and of the order regulating 
the handling of milk in the Carolina, Georgia, Tennessee Valley, and 
Louisville-Lexington-Evansville marketing areas.
    Notice of proposed rulemaking was published in the Federal Register 
on November 25, 1994 (59 FR 60572), concerning a proposed suspension of 
certain provisions of the orders. Interested persons were afforded 
opportunity to file written data, views and arguments thereon. One 
comment supporting and three comments opposing the proposed suspension 
were received.
    After consideration of all relevant material, including the 
proposal in the notice, the comments received, and other available 
information, it is hereby found and determined that for the period of 
March 1, 1995, through February 28, 1996, the following provisions of 
the order do not tend to effectuate the declared policy of the Act:
    1. In Sec. 1005.7(d)(3) of the Carolina order, the words ``from'', 
``there'', ``a greater quantity of route disposition, except filled 
milk, during the month'', and ``than in this marketing area'';
    2. In Sec. 1007.7(e)(3) of the Georgia order, the words ``, except 
as provided in paragraph (e)(4) of this section,'';
    3. In Sec. 1007.7 of the Georgia order, paragraph (e)(4);
    4. In Sec. 1011.7(d)(3) of the Tennessee Valley order, the words 
``from'', ``there'', ``a greater quantity of route disposition, except 
filled milk, during the month'', and ``than in this marketing area''; 
and
    5. In Sec. 1046.2 of the Louisville-Lexington-Evansville order, the 
word ``Pulaski''.

Statement of Consideration

    This document extends an existing suspension that has been in 
effect since March 1, 1994. This suspension allows a distributing plant 
operated by Land-O-Sun Dairies, Inc., 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 (Order 11) to be 
regulated under that order rather than the Carolina order (Order 5) 
despite the plant having greater sales in the Carolina marketing area. 
It also allows a distributing plant operated by Southern Belle Dairy 
Company, Inc., located at Somerset, Kentucky, that has been regulated 
under the Tennessee Valley order for the past five years to remain 
regulated there even if it develops greater sales in the Louisville-
Lexington-Evansville (Order 46) marketing area. In addition, the 
suspension allows a supply plant operated by Armour Food Ingredients at 
Springfield, Kentucky, that has been supplying the Southern Belle plant 
to remain pooled under the Tennessee Valley order without having to 
make uneconomic shipments of milk that it contends would be necessary 
to remain pooled if the Somerset plant were regulated under Order 46.
    The problems prompting the existing suspension of these provisions 
were thoroughly explained in a suspension order (DA-93-29) issued on 
March 28, 1994 (published April 1, 1994 (59 FR 15315)). In that 
document, it was noted that ``orderly marketing will be best preserved 
by adopting the proposed suspension, for a 12-month period only, to 
allow the industry time to develop proposals for a hearing to be held 
before the suspension period expires.'' [emphasis added]
    Due to significant changes that have occurred in these markets 
within the past year, the Department was delayed in holding the 
promised hearing until January 4, 1995. (The one-day hearing was held 
in Charlotte, North Carolina.) Advised that the Department would be 
unable to evaluate the hearing record and amend the orders by the time 
the current suspension expires on February 28, both Southern Belle 
Dairy Company and Land-O-Sun Dairies, Inc., who were proponents of the 
existing suspension, submitted requests to extend the current 
suspension until the amendatory proceeding was concluded.
    Mid-America Dairymen, Inc. (Mid-America) and Southern Milk Sales, 
on behalf of their member-producers who deliver producer milk to plants 
regulated under the Orders 5, 7, 11, and 46, filed a comment letter 
supporting the continued suspension. Coburg Dairy Inc. (Coburg), Edisto 
Milk Producers Association, and Purity Dairies, Inc. (Purity), filed 
comment letters in opposition to the continued suspension. Coburg and 
Edisto reiterated their opposition to the existing suspension and 
questioned the rationale for continuing it, but offered no opposition 
testimony to proposals at the hearing that would permanently regulate 
the Land-O-Sun and Southern Belle plants under Order 11. Purity 
Dairies, a Nashville, Tennessee, handler that is regulated under the 
Georgia order (Order 7), stated that it cannot procure milk from its 
traditional supply area in [[Page 7434]] central Kentucky in 
competition with Armour and Southern Belle because its blend price in 
Nashville is no longer competitive with the Order 11 blend price.
    While it is true that Purity's blend price under Order 7 and 
former<SUP>1 Order 98 (Nashville, Tennessee) was frequently close to or 
below the Order 11 blend price during the months of December 1993 
through April 1994, data introduced into the record of the Charlotte 
hearing indicate that since May 1994 the Nashville-Springfield price 
relationship has returned to a more normal pattern, as shown in the 
Table 1.

    \1\The Nashville, Tennessee, order was terminated effective July 
31, 1993.

    Table 1.--Comparison of Blend Prices: January 1992-November 1994    
         Nashville, TN (Order 98/7)--Springfield, KY (Order 11)         
------------------------------------------------------------------------
                     Average blend      Average blend                   
                       price at           price at                      
                    Nashville, TN,    Springfield, KY,      Difference  
                   under order 98/7    under order 11                   
------------------------------------------------------------------------
1/92-11/93.......         13.85              13.58                .26   
12/93-4/94.......         14.22              14.33               -.11   
5/94-11/94.......         14.01              13.72                .28   
------------------------------------------------------------------------

    If Purity has difficulty in attracting a milk supply, it should 
direct its concern to the open record for the proposed Southeast 
marketing area, which encompasses the Nashville area.
    There was no testimony at the January 4 hearing in opposition to 
either the continuation of the current suspension or to the Southern 
Belle proposals, which, as noted above, effectively would allow 
Southern Belle, and therefore Armour, to be permanently regulated under 
Order 11.
    Accordingly, it is necessary to suspend the aforesaid provisions 
from March 1, 1995, through February 28, 1996, or until such earlier 
time as an order amending the aforesaid orders is issued on the basis 
of the January 4, 1995, hearing record.

List of Subjects in 7 CFR Parts 1005, 1007, 1011, and 1046

    Milk marketing orders.

    For the reasons set forth in the preamble, the following provisions 
in Title 7, Parts 1005, 1007, 1011, and 1046, are amended as follows:
    1. The authority citation for 7 CFR Part 1005, 1007, 1011, and 1046 
continues to read as follows:

    Authority: Secs. 1-19, 48 Stat 31, as amended; 7 U.S.C. 601-674.

PART 1005--MILK IN THE CAROLINA MARKETING AREA


Sec. 1005.7  [Suspended in part]

    2. In Sec. 1005.7(d)(3), the words ``from'', ``there'', ``a greater 
quantity of route disposition, except filled milk, during the month'', 
and ``than in this marketing area'' are suspended from March 1, 1995, 
through February 28, 1996;

PART 1007--MILK IN THE GEORGIA MARKETING AREA


Sec. 1007.7  [Suspended in part]

    3. In Sec. 1007.7(e)(3), the words ``, except as provided in 
paragraph (e)(4) of this section,'' are suspended from March 1, 1995, 
through February 28, 1996;
    4. In Sec. 1007.7, paragraph (e)(4) is suspended from March 1, 
1995, through February 28, 1996;

PART 1011--MILK IN THE TENNESSEE VALLEY MARKETING AREA


Sec. 1011.7  [Amended]

    5. In Sec. 1011.7(d)(3), the words ``from'', ``there'', ``a greater 
quantity of route disposition, except filled milk, during the month'', 
and ``than in this marketing area'' are suspended from March 1, 1995, 
through February 28, 1996; and

PART 1046--MILK IN THE LOUISVILLE-LEXINGTON-EVANSVILLE MARKETING 
AREA


Sec. 1046.2  [Amended]

    6. In Sec. 1046.2 of the Louisville-Lexington-Evansville order, the 
word ``Pulaski'' is suspended from March 1, 1995, through February 28, 
1996.


    Dated: February 2, 1995.
Patricia Jensen,
Acting Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 95-3143 Filed 2-7-95; 8:45 am]
BILLING CODE 3410-02-P