[Federal Register Volume 60, Number 65 (Wednesday, April 5, 1995)]
[Rules and Regulations]
[Pages 17192-17193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8353]



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DEPARTMENT OF AGRICULTURE
7 CFR Part 1131

[DA-95-11]


Milk in the Central Arizona Marketing Area; Suspension of Certain 
Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Suspension of rule.

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SUMMARY: This document suspends certain provisions of the Central 
Arizona Federal milk marketing order beginning April 1, 1995, through 
March 31, 1996. The suspension eliminates the requirement that a 
cooperative association ship at least 50 percent of its receipts to 
other handler pool plants to maintain pool status of a manufacturing 
plant operated by the cooperative. United Dairymen of Arizona, a 
cooperative association that represents nearly all of the producers who 
supply milk to the market, requested the suspension. The suspension is 
necessary to prevent uneconomical and inefficient movements of milk.

EFFECTIVE DATE: April 1, 1995, through March 31, 1996.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing 
Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room 
2971, South Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 
720-9368.

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:
    Notice of Proposed Suspension: Issued February 2, 1995; published 
February 8, 1995 (60 FR 7466).
    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 impact of the order on certain milk 
handlers and tends to ensure that dairy farmers will continue to have 
their milk priced under the order and thereby receive the benefits that 
accrue from such pricing.
    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 Central Arizona marketing area.
    Notice of proposed rulemaking was published in the Federal Register 
on February 8, 1995 (60 FR 7466) concerning a proposed suspension of 
certain provisions of the order. Interested persons were afforded 
opportunity to file written data, views and arguments thereon. One 
comment supporting and one comment opposing the 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 months of 
April 1, 1995, through March 31, 1996, the following provisions of the 
order do not tend to effectuate the declared policy of the Act:
    In Sec. 1131.7(c), the words ``50 percent or more of'', 
``(including the skim milk and butterfat in fluid milk products 
transferred from its own plant pursuant to this paragraph that is not 
in excess of the skim milk and butterfat contained in member producer 
milk actually received at such plant)'' and ``or the previous 12-month 
period ending with the current month.''

Statement of Consideration

    This rule suspends certain provisions of the Central Arizona order 
for the months of April 1995 through March 1996. The suspension removes 
the requirement that a cooperative association that operates a 
manufacturing plant in the marketing area must ship at least 50 percent 
of its milk supply during the current month or the previous 12-month 
period ending with the current month to other handlers' pool plants to 
maintain the pool status of its manufacturing plant.
    Currently the order permits a cooperative association's 
manufacturing plant, located in the marketing area, to be a pool plant 
if at least 50 percent of the producer milk of members of the 
cooperative association is physically received at pool plants of other 
handlers during the current month or the [[Page 17193]] previous 12-
month period ending with the current month.
    The suspension of this shipping requirement was requested by United 
Dairymen of Arizona (UDA), a cooperative association that represents 
nearly all of the dairy farmers who supply the Central Arizona market. 
UDA contends that the continued pool status of their manufacturing 
plant is threatened by an increase in milk production combined with a 
drop in Class I sales. UDA states that in 1994 its member production 
increased 17 percent over the previous year. In 1994, monthly 
deliveries to distributing plants also increased sufficiently to ensure 
UDA a safe margin over the minimum 50 percent shipping requirement to 
maintain pool status of its manufacturing plant.
    One dairy farmer filed a comment opposing the suspension action. 
The dairy farmer opposed the action because it would allow for more 
milk to continue to be regulated under the order than would otherwise 
be the case. As a result, the dairy farmer asserted that he would 
receive a lower blend price than if the action were not taken because 
some milk would not qualify for regulation under the order.
    During the past year, there has been an increase in the production 
of milk and an increase in distributing plant demand. Primarily, the 
increased demand is a result of a significant increase in Class I sales 
in Mexico by Central Arizona handlers. The recent collapse in value of 
the Mexican peso has curtailed these sales and thus reduced handler 
requirements for bulk milk deliveries; however, production has not 
declined. This general increase in production and decline in sales 
affects all producers in the market equally. If the action were not 
taken, some milk would not receive the benefits of the blend price 
resulting from regulation under the order. By taking this action, all 
producers who have historically supplied the market would continue to 
share equally in the benefits of regulation without costly and 
inefficient movements of milk simply to maintain their pool status.
    The comment submitted by UDA in support of the proposed suspension 
clarified the specific order language that UDA requested be suspended. 
UDA did not intend for the words ``its member producer milk'' and 
``received at the pool plants of other handlers during the current 
month'' to be included in the proposed suspension. Upon review of UDA's 
request and supporting comment, the order language in Sec. 1131.7(c) to 
be suspended has been modified to exclude these specific words.
    UDA also requested that the suspension be granted for an indefinite 
period beginning in March 1995. After reviewing the marketing 
conditions of the Central Arizona marketing area and their relationship 
with the uncertain value of the Mexican peso, this suspension will be 
for a one-year period. The marketing conditions indicate that the 
suspension should not begin until April 1995.
    Accordingly, it is appropriate to suspend the aforesaid provisions 
beginning April 1, 1995, through March 31, 1996.
    It is hereby found and determined that thirty days' notice of the 
effective date hereof is impractical, unnecessary and contrary to the 
public interest in that:
    (a) The suspension is necessary to reflect current marketing 
conditions and to assure orderly marketing conditions in the marketing 
area, in that such rule is necessary to permit the continued pooling of 
the milk of dairy farmers who have historically supplied the market 
without the need for making costly and inefficient movements of milk;
    (b) This suspension does not require of persons affected 
substantial or extensive preparation prior to the effective date; and
    (c) Notice of proposed rulemaking was given interested parties and 
they were afforded opportunity to file written data, views or arguments 
concerning this suspension. Two comments were received.
    Therefore, good cause exists for making this order effective less 
than 30 days from the date of publication in the Federal Register.

List of Subjects in 7 CFR Part 1131

    Milk marketing orders.

    For the reasons set forth in the preamble, the following provisions 
in Title 7, Part 1131, are amended as follows:

PART 1131--MILK IN THE CENTRAL ARIZONA MARKETING AREA

    1. The authority citation for 7 CFR Part 1131 continues to read as 
follows:

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


Sec. 1131.7  [Suspended in part]

    2. In Sec. 1131.7(c), the words ``50 percent or more of'', 
``(including the skim milk and butterfat in fluid milk products 
transferred from its own plant pursuant to this paragraph that is not 
in excess of the skim milk and butterfat contained in member producer 
milk actually received at such plant)'' and ``or the previous 12-month 
period ending with the current month.'' are suspended for the months of 
April 1, 1995, through March 31, 1996.

    Dated: March 27, 1995.
Patricia Jensen,
Acting Assistant Secretary. Marketing and Regulatory Programs.
[FR Doc. 95-8353 Filed 4-4-95; 8:45 am]
BILLING CODE 3410-02-P