[Federal Register Volume 61, Number 90 (Wednesday, May 8, 1996)]
[Rules and Regulations]
[Pages 20719-20721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11463]



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DEPARTMENT OF AGRICULTURE
7 CFR Parts 1002 and 1004

[DA-96-02]


Milk in the New York-New Jersey and Middle Atlantic Marketing 
Areas; Suspension of Certain Provisions of the Orders

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Suspension of rules.

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SUMMARY: This document suspends a pooling provision of the New York-New 
Jersey order and a provision in the Middle Atlantic order's base-excess 
plan. The request for suspension was submitted on behalf of several 
handlers (cooperative and proprietary) who market the milk of dairy 
farmers who are located in a common supply area and who have milk 
pooled under both orders. This suspension will permit more efficient 
assembly and transportation of producer milk.

EFFECTIVE DATE: May 1, 1996, through September 30, 1996.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Marketing Specialist, 
USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South 
Building, PO Box 96456, Washington, DC 20090-6456, (202) 690-1366.

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:
    Notice of Proposed Suspension: Issued March 27, 1996; published 
April 2, 1996 (61 FR 14514).
    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 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 orders 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 law and request 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

[[Page 20720]]

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 orders regulating 
the handling of milk in the New York-New Jersey and Middle Atlantic 
marketing areas.
    Notice of proposed rulemaking was published in the Federal Register 
on April 2, 1996 (64 FR 14514) concerning the proposed suspension of 
certain provisions of the orders. Interested persons were afforded 
opportunity to file written data, views and arguments thereon.
    Two comments supporting and one comment opposing the proposed 
suspension were received.
    After consideration of all relevant material, including the 
proposals in the notice, the comments received, and other available 
information, it is hereby found and determined that for the months of 
May 1, 1996, through September 30, 1996, the following provisions of 
the orders do not tend to effectuate the declared policy of the Act:
    1. In Sec. 1002.14 of the New York-New Jersey order, paragraph (d); 
and
    2. In Sec. 1004.92(c) of the Middle Atlantic order, the words ``and 
who held such status in all or part of the 2 months of August and 
September and who otherwise was a producer only under this part for all 
of the remaining August through December period''.

Statement of Consideration

    This rule suspends a pooling provision of the New York-New Jersey 
order (Order 2) and suspends a provision in the Middle Atlantic order 
(Order 4) base-excess plan. The suspension will allow handlers 
regulated under Order 2 and Order 4 to assemble and transport the milk 
of dairy farmers more efficiently and thereby reduce costs. Suspension 
of these provisions in the two orders would permit handlers to freely 
shift the milk of individual dairy farmers located in a common supply 
area between the two markets. Proponents claim that this added 
flexibility would enable Order 2 and 4 handlers to furnish the fluid 
needs of bottling plants more effectively. Handlers will be obligated 
to change the pooling status of individual producers to achieve this 
efficiency.
    Under the terms of Order 2, an individual dairy farmer's milk may 
not be pool milk during the months of December through June if any of 
the dairy farmer's milk was producer milk pooled by the same handler 
under another Federal order in the preceding months of July through 
November. Under the Order 4 base-excess plan provisions, a dairy 
farmer's milk deliveries to handlers regulated under Orders 2 and 4 
during August and September would be used to compute the producer's 
Order 4 base only if the dairy farmer's milk was pooled on Order 4 
during the remaining months (October-December) of such base-forming 
period. Suspending these order provisions would allow milk to be 
shifted to Order 2 from Order 4 and would also allow Order 2 milk to be 
shifted to Order 4 without negative consequences to producers.
    Several handlers (cooperative and proprietary) who market the milk 
of dairy farmers under Orders 2 and 4 requested the suspension. 
Proponents asked that the provisions be suspended for the months of May 
through September 1996.
    In support of the action, proponents indicated that the State of 
Pennsylvania has become a common milkshed for Orders 2 and 4. In June 
1995 there were 3,836 Pennsylvania dairy farmers pooled on Order 2 and 
3,717 Pennsylvania producers pooled on Order 4. These dairy farmers 
represented 37 percent of the total producers on Order 2 and 73 percent 
of the total producers on Order 4. They produced 27 percent of the 
Order 2 pool milk and 67 percent of the Order 4 producer receipts. 
There is significant overlap of producers supplying the two markets in 
the Pennsylvania counties of Lancaster, Lebanon, Chester, and Berks, 
proponents stated.
    Proponents also indicated in their request that a large percentage 
of the milk that is picked up in the common supply area of Pennsylvania 
is delivered to Order 4 fluid milk plants located at Wawa, Spring City, 
Royersford, and Fort Washington, Pennsylvania, and Florence, New 
Jersey. Some of the milk produced in this same area is delivered to the 
Order 2 pool plants located at Lansdale and Reading.
    Proponents of the suspension have made plans to combine their milk 
routes in Pennsylvania to assemble and haul the milk from farms that 
are most advantageously located to plants where the milk is needed for 
processing. The commingling of the milk supply of these proponents is 
scheduled to begin on May 1, 1996, which is the first month the 
suspension is to be effective.
    In their comments the proponents indicated that the number of 
producers that will be shifted between orders will be small. During 
April and May of 1996, two of the proponents intend to change the farm 
pickup routes of approximately 865 dairy farmers serviced by 41 milk 
haulers. However, according to one comment, it is expected that 183 
producers currently pooled under Order 2 will be changed to Order 4 and 
that 48 producers currently pooled on Order 4 will be changed to Order 
2. Among the producers who will have their hauler changed on May 1 are 
those picked up on routes which primarily service proponents' pool 
distributing plants.
    Concerns arose regarding the timing of this suspension action and 
the advisability of loosening the pooling restrictions of the New York-
New Jersey order that could result in additional reserve supplies of 
milk pooled on the orders as a consequence of suspending these order 
provisions. In comments received from a proprietary handler who 
distributes Class I, Class II, and Class III products in the Order 2 
marketing area and who opposes the suspension, it was stated that there 
is a potential for a lowering of the blend price to producers 
historically pooled on the respective orders, although the specific 
concern was for the lowering of the blend price to Order 2 producers. 
Similar concerns were expressed by a major cooperative in the Order 2 
marketing area who nevertheless supports the suspension because it 
would help in lowering the costs of doing business to dairy farmers.
    In light of the small number of producers who will have their 
pooling status shifted, it is reasonable to conclude that the changes 
in producer blend prices will not be significantly affected given the 
increased efficiencies gained by cost savings in transportation. 
Additionally, the suspension action is supported by producers who 
market the majority of milk in the Middle Atlantic and the New York-New 
Jersey marketing areas.
    Accordingly, it is appropriate to suspend the aforesaid provisions 
from May 1, 1996, through September 30, 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 
areas, in that such rule is necessary to permit the continued pooling 
of the milk of dairy farmers who historically supplied the markets 
without the need for making costly and inefficient movements of milk;
    (b) This suspension does not require of persons affected 
substantial or

[[Page 20721]]

extensive preparation prior to the effective date; and
    (c) Notice of proposed rulemaking was given to interested parties 
and they were afforded the opportunity to file written data, views and 
arguments concerning these suspension actions. Two comments supporting 
and one comment opposing the action 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 Parts 1002 and 1004

    Milk marketing orders.

    For the reasons set forth in the preamble, the following provisions 
in Title 7, parts 1002 and 1004 are amended as follows:

PART 1002--MILK IN THE NEW YORK-NEW JERSEY MARKETING AREA

    1. The authority citation for 7 CFR part 1002 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.


Sec. 1002.14  [Suspended in part]

    2. In Sec. 1002.14, paragraph (d) is suspended.

PART 1004--MILK IN THE MIDDLE ATLANTIC MARKETING AREA

    3. The authority citation for 7 CFR part 1004 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.


Sec. 1004.92  [Suspended in part]

    4. In Sec. 1004.92(c), the words ``and who held such status in all 
or part of the 2 months of August and September and who otherwise was a 
producer only under this part for all of the remaining August through 
December period'' is suspended.

    Dated: May 2, 1996.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 96-11463 Filed 5-7-96; 8:45 am]
BILLING CODE 3410-02-P