2023 New York Laws › AGM - Agriculture and Markets › Article 21 - Milk Control › 258-M - Orders Fixing Prices for Milk and Marketing Agreements.

§ 258-m. Orders  fixing  prices for milk and marketing agreements.  1.
  Upon the petition of a producers' bargaining agency  of  the  production
  area  supplying  a  marketing  area,  such  agency representing at least
  thirty-five per centum of the producers of milk  therein,  alleging  the
  existence  of  conditions  so affecting the orderly marketing of milk in
  such area that public interest requires regulation of prices of milk  in
  such  area and equalization of the burden of surplus milk and expense of
  handling it, and sharing the benefits of the fluid market in order  that
  the  public policy declared in section two hundred fifty-eight-k of this
  chapter shall  be  effective,  and  upon  the  written  request  of  the
  petitioner,  the  commissioner  shall set, without a hearing, an interim
  price for class I fluid milk, and may set an interim price for class  II
  and/or  III  milk.  In  determining such interim price, the commissioner
  shall take into consideration, among other factors: (a) the prices being
  paid to producers; (b) the costs of production  to  producers;  (c)  any
  changes  in  the  ratio of index of prices received for milk to index of
  prices paid by dairy farmers; (d) the level of prices paid to  producers
  in  adjoining markets; and (e) the interests of the general public. Such
  interim price shall be set within five days of such written request  and
  to  the  extent  practicable apply to any milk purchased on or after the
  first day of the month following such determination. Such interim  price
  shall  be in effect until the final determination regarding the petition
  is made pursuant to the provisions of this article  and  is  enforceable
  and effectuated, provided however, such interim price shall be in effect
  for  no longer than one hundred eighty consecutive calendar days. During
  such time when the interim price is in effect,  the  commissioner  shall
  provide  for  and enforce a mechanism for compensatory payments and have
  the  authority  to  establish  and  administer  an   equalization   pool
  throughout  the  entire  state  or  any part thereof. Such interim price
  shall be reviewable by a person aggrieved in a  proceeding  pursuant  to
  article   seventy-eight  of  the  civil  practice  law  and  rules.  The
  effectiveness or enforcement of such interim price regulation shall  not
  be  restrained, stayed, or enjoined pendente lite. In addition, it shall
  be the duty of the  commissioner  to  call  a  public  hearing  for  the
  consideration of said petition and to give notice thereof by advertising
  such call in such newspaper or newspapers of general circulation in such
  marketing  area  as  the commissioner deems advisable. Such notice shall
  specify a time and a place  within  the  marketing  area  at  which  the
  hearing  will  be  held  and  at which the applicants and other persons,
  including  producers,  distributors  and  consumers   and   associations
  thereof,  may be heard. In not more than fifteen days upon receiving the
  petition the commissioner shall set the hearing date in accordance  with
  the  above  provisions.  Such  hearing  shall  commence in not less than
  fifteen days but not more than twenty days of the notice specifying  the
  date and time of the hearing. Such hearing shall conclude within fifteen
  days  of  commencement, provided however, if the commissioner determines
  in writing that the hearing has been conducted with due diligence but an
  extension is necessary to accord due process, he or she may  extend  the
  hearing  for  a period not to exceed ten days. If after such hearing the
  commissioner  shall  find,  upon  the  record  of  the  proceeding  that
  conditions  referred  to  in  section  two hundred fifty-eight-k of this
  chapter exist so affecting the orderly marketing of milk in  such  area,
  that public interest requires that the public policy declared in section
  two hundred fifty-eight-k of this chapter shall be effective and that it
  is  necessary  that  prices  for  milk  to producers and associations of
  producers be fixed by the commissioner,  as  expressed  by  section  two
  hundred  fifty-eight-k  of  this  chapter,  and that it is favored by at
  least sixty-six and two-thirds per  centum  of  the  producers  of  milk

  produced  in  the  production  area  for  said  marketing  area  voting,
  individually  or  through   cooperatives,   in   the   referendum,   the
  commissioner may by order fix and determine for such marketing area fair
  and  equitable minimum prices to be paid to producers. The determination
  of the commissioner as to whether or not by order to fix  and  determine
  minimum  prices  shall  be  made  within  forty days after such hearing,
  effective on the first day of the month following the determination.  If
  the  commissioner determines not to fix and determine minimum prices, he
  shall state his reasons in writing and transmit same to the  petitioner,
  the  governor,  the temporary president of the senate and the speaker of
  the assembly. Such price fixing  order  or  orders  shall  be  rescinded
  effective  at  the  end  of  the  current  month  after a public hearing
  whenever the commissioner shall find either that  such  conditions  have
  ceased  to  exist  or  that  such  termination  is  favored  by at least
  thirty-five per centum of the producers  of  milk  handled  within  such
  market.  For  purposes  of this subdivision, unless otherwise specified,
  days shall mean business days.
2. The commissioner may, from time to time upon like petition,  during
  the  existence  of  such  conditions  revise  the prices so fixed, after
  holding a hearing thereon. Whenever  as  herein  provided  a  producers'
  bargaining  agency of a production area supplying a marketing area shall
  file a petition and/or amended petition praying for any relief  provided
  in  this  article, it shall be lawful for a distributors' agency of such
  marketing area to file a petition and/or amended petition providing  for
  the  consideration  of  issues  therein  raised relative to the petition
  and/or amended petition of the producers' bargaining agency,  or  to  an
  existing  milk  marketing  order. Upon receipt of any such petition of a
  producers'  bargaining  agency  for  any  such   marketing   area,   the
  commissioner  shall  mail  a  copy  thereof  to  the  secretary  of  the
  distributors' bargaining agency for such marketing area, if  any,  which
  meets  the  qualifications  set  forth  in  the  last  sentence  of this
  paragraph. If  such  distributors'  bargaining  agency  files  either  a
  petition  or  an  amended petition with the commissioner or notifies the
  commissioner that no such petition will be filed, the  commissioner  may
  proceed to give notice of hearing as provided in subdivision one of this
  section;  otherwise  the  commissioner  shall  defer  the giving of such
  notice of hearing for a period of  ten  days  after  such  distributors'
  bargaining  agency  has  received  from  the  commissioner a copy of the
  petition and/or amended petition of the  producers'  bargaining  agency.
  The  commissioner  shall  mail  a  copy  of the distributors' bargaining
  agency petition to the secretary of the producers' bargaining agency and
  shall give such notice of such petition by publication or  otherwise  as
  the  commissioner deems advisable. Evidence upon the proposals set forth
  in both the producers' and  distributors'  bargaining  agency  petitions
  shall  be  received  at  the same hearing. The commissioner shall not be
  required to furnish a copy of any petition of  a  producers'  bargaining
  agency to a distributors' bargaining agency nor shall such distributors'
  bargaining  agency  be  entitled  to  file a petition and to be heard as
  herein provided unless within the calendar  year  preceding  the  filing
  with  the commissioner of the producers' bargaining agency petition such
  distributors' bargaining agency shall have filed with the commissioner a
  list of its distributor members and  the  names  and  addresses  of  its
  officers  and unless such distributors' bargaining agency represents not
  less than sixty per centum of the quantity of milk distributed  in  such
  marketing   area,   exclusive   of   that   distributed  by  cooperative
  corporations, as determined by the reports submitted to the commissioner
  during the preceding license year.
The  provisions  of  this  subdivision   relative   to   distributors'
  bargaining  agency  petitions shall not apply to any milk marketing area
  or order, jointly administered by the commissioner and  any  officer  or
  agency of the United States or of any other state.
3.  Before  fixing  any  prices  pursuant to the provisions of the two
  preceding  paragraphs,  the  commissioner  shall  investigate  what  are
  reasonable   costs   and   charges  for  producing,  hauling,  handling,
  processing and/or other services performed in respect of milk  and  what
  prices  for  milk  in  the market or markets affected by such prices and
  under varying conditions will  be  most  in  the  public  interest.  The
  commissioner   shall   take   into  consideration  the  balance  between
  production  and  consumption  of  milk,  the  cost  of  production   and
  distribution,  including  compliance  with  all  sanitary regulations in
  force in the market or markets affected, the cost of feeding stuffs used
  in the production of milk, the supply of milk in  such  market  and  the
  purchasing  power  and welfare of the public. The commissioner shall fix
  prices to producers on the basis of  the  use  thereof  in  the  various
  classes,  grades  and  forms.  Any  prices  fixed  or  approved  by  the
  commissioner shall be deemed to be prima facie reasonable.
4. In determining the approval or  request  for  an  order  as  herein
  provided  or  the  termination  thereof  on  the  part  of producers the
  commissioner shall consider the approval, request or  favor  in  respect
  thereto by any bona fide cooperative association of producers engaged in
  marketing  milk  within  such marketing area as the approval, request or
  favor either of making  an  order  or  of  termination  thereof  of  the
  producers  who  are  under contract with such cooperative association of
  producers.
The commissioner shall appoint  a  referendum  advisory  committee  to
  assist  and  advise him in the conduct of the referendum. Such committee
  shall review referendum procedures and the tabulation  of  results,  and
  shall  advise  the  commissioner  of  its  findings.  A  record  of  the
  committee's advice, recommendations and findings shall be kept and  made
  available  to  any  person  upon request. The final certification of the
  referendum results shall be made  by  the  commissioner.  The  committee
  shall  consist  of  three members. One member shall be appointed from at
  least  three  nominations  of  producers  submitted  by  the   producers
  bargaining  agency,  one shall be an independent producer, and one shall
  be appointed from at least three nominations of producers  submitted  by
  any  general  farm  organization. The members of the committee shall not
  receive a salary but shall be entitled to actual and reasonable expenses
  in the performance of their duties.
5.  Marketing  agreements.  It  shall  be  lawful  for  a   producers'
  bargaining  agency of the production area supplying a marketing area and
  a distributors' bargaining agency for such marketing area to enter  into
  marketing  agreements  as  to  the  prices to be paid by distributors to
  producers for milk sold or otherwise utilized in said marketing area, as
  to  rules  and  regulations  covering  the  method  of  determining  the
  proportion  of  the product of the entire dairy herd of a producer which
  shall be accepted and paid for pursuant to such price or prices,  as  to
  reasonable trade practices affecting the relations between producers and
  distributors  in such market. Such agreement may also contain provisions
  for  a  committee  to  administer  the  provisions  of  said   marketing
  agreement.  No  agreement,  however,  shall  be  effective  until a copy
  thereof signed by all persons parties thereto shall have been filed with
  the commissioner.
If the commissioner  shall  have  reason  to  believe  that  any  such
  marketing  agreement results in a monopoly or restraint of trade to such
  an extent that the price of milk is unduly enhanced by  reason  thereof,

  he  shall  serve  upon the parties to such agreement a complaint stating
  his charge in that respect, to which  complaint  shall  be  attached  or
  contained  therein  a notice of hearing specifying a date and place, not
  less  than  thirty days after the service thereof, requiring the parties
  to such marketing agreement to show cause why an  order  should  not  be
  made  directing  them  to  cease  and desist from such monopolization or
  restraint of trade. The parties so complained of may  at  the  time  and
  place  so  fixed  show  cause  why such order should not be entered. The
  evidence given at such a hearing shall be taken  under  such  rules  and
  regulations  as the commissioner shall prescribe, reduced to writing and
  made a part of the record therein. If upon such hearing the commissioner
  shall be of  the  opinion  that  such  marketing  agreement  results  in
  monopoly  or restraint of trade to such an extent that the price of milk
  in the marketing area affected by such agreement is unduly enhanced,  he
  shall issue and cause to be served upon the parties to said agreement an
  order  reciting  the  facts found by him and directing them to cease and
  desist from such undue enhancement of  prices.  If  such  order  is  not
  obeyed  by  the  parties  to such agreement, the commissioner shall file
  with the attorney-general a certified copy of  the  order,  evidence  of
  such  disobedience  and  all  of  the records in the proceeding, and the
  attorney-general may apply to the supreme court for an order  or  decree
  affirming,  modifying  or  setting  aside  such order or for making such
  other order or decree as the court may deem equitable in the premises.
Upon application of the parties to said marketing agreement and  after
  a  hearing,  as  provided  in  subdivision  one  of  this  section,  the
  commissioner  may  by  order  make  the  provisions  of  said  marketing
  agreement, relative to prices to producers and other provisions thereof,
  effective  as to all producers, distributors and handlers in said market
  notwithstanding that they may not have approved of said agreement if  he
  shall  find  that  the  terms and conditions of said agreement are fair,
  equitable and in public interest, that the  agreement  has  been  fairly
  entered  into  without fraud, that public interest so requires, in order
  to effectuate the declaration of policy contained in section two hundred
  fifty-eight-k of this chapter, that the proportion of the producers  and
  distributors  who  have  executed  such agreement or shall have approved
  same upon the hearing is equal to  that  required  for  an  order  under
  subdivision   one  of  this  section,  and  further  provided  that  the
  commissioner shall determine that the prices set forth in said marketing
  agreement are reasonable and proper prices, as required by this  section
  for  prices  fixed  by an order of the commissioner. Any order so issued
  shall terminate effective on the last day of the current month,  and  in
  the  same  manner and upon the same request after a hearing, as provided
  for the termination of an order in subdivision one of this section.
6. If approved by sixty-six and two-thirds per centum of the producers
  affected  voting  individually  or  through  their  cooperative  in  the
  referendum,  any  order  or  marketing  agreement  fixing  the  price to
  producers under either subdivision  one  or  subdivision  five  of  this
  section for market or markets, may provide for an equalization of prices
  to  all  producers of the production area of the market affected so that
  each producer or co-operative association shall receive  the  same  base
  price  for  all  milk  delivered subject to reasonable differentials for
  quality and location and  for  services.  Any  such  order  may  contain
  provisions  requiring  from  persons  who  bring  milk or cream into the
  marketing area regulated by such order payments  on  all  such  milk  or
  cream whenever such persons are not otherwise regulated by the order.
In  order  to  effect  such  equalization  of  prices to producers the
  commissioner shall require a monthly report from each  dealer  receiving
  milk  from producers for such market showing the disposition of all milk

  handled by the reporting dealer in  such  market  and  shall  thereafter
  require  payment  by  each  dealer,  to  a trust company designated as a
  fiscal agent by the  commissioner,  of  any  amount  by  which  the  sum
  otherwise  due  by  such  dealer to its producers in accordance with the
  prices  fixed  by  such  order  exceeds  the  equalized  base  price  as
  determined  by the commissioner from such reports, which amounts so paid
  to said fiscal agent, the commissioner shall direct it to pay  to  those
  dealers  whose  reports  show  that  the base prices they will pay their
  producers in accordance with such order are less than the equalized base
  price as so determined by the commissioner, for  repayment  in  turn  by
  such  dealers  to  their  producers  so  as  to bring all lower rates of
  payment up to the equalized base price. Such  payments  to  said  fiscal
  agents  shall  not  be deemed to be state funds. Such equalization shall
  include milk of all grades and produced by all breeds of cows,  and  may
  include   milk,   approved  by  a  board  or  boards  of  health  having
  jurisdiction in a marketing area  designated  in  an  order  under  this
  section, which was produced by a dealer.
The  provisions  of  this subdivision shall not become operative as to
  the New York state metropolitan market production area,  however,  until
  pursuant  to federal or state statutes, or by action of authorities duly
  constituted and  authorized  thereunder,  prices  to  producers  are  so
  equalized  and  made effective throughout all the production area of the
  New York state metropolitan market area.
7. After the commissioner shall have  fixed  prices  in  any  area  or
  approved  prices in a marketing agreement to be charged or paid for milk
  in any form included in the definition of milk as used in  this  article
  whether  by  class, grade or use, it shall be unlawful for a milk dealer
  to buy or offer to buy milk at any price less than such price or  prices
  as  shall  be applicable to the particular transaction, and no method or
  device shall be lawful whereby milk is bought or sold or offered  to  be
  bought  or  sold at a price less than such price, or prices, as shall be
  applicable to the particular  transaction,  whether  by  a  discount  or
  rebate,  or  free service, or advertising allowance, or a combined price
  for such milk together with another commodity or commodities, or service
  or services, which is less than the aggregate of the prices for the milk
  and the price or prices for such  other  commodity  or  commodities,  or
  service  or  services,  when  sold  or  offered  for  sale separately or
  otherwise.
8. It is the intent of the legislature that the instant, whenever that
  may be, that the handling within the state by  a  milk  dealer  of  milk
  produced  outside  of  the  state becomes a subject of regulation by the
  state, in the exercise of its police powers, the restrictions set  forth
  in  this  article  respecting  such milk so produced shall apply and the
  powers conferred by this article shall attach.
9. No  marketing  agreement  or  order  shall  prevent  a  cooperative
  association  from  blending  as heretofore the proceeds of all sales and
  distributing to its producers the resultant  blended  price  subject  to
  deductions  and  differentials  as  provided  by  its contracts with its
  producers, but no such cooperative association shall sell milk at prices
  lower than the prices fixed by the commissioner  in  an  order  for  the
  markets affected.
10.  Any  marketing agreement or order of the commissioner may provide
  for necessary deductions from payments to producers to cover the cost of
  administering such marketing agreement or order, including the  cost  of
  auditing  milk  dealers' classifications, and the cost of other services
  to producers. The  funds  so  derived  from  such  deductions  shall  be
  deposited  in  an  account within the miscellaneous special revenue fund
  and shall not be deemed to be state funds. The commissioner may, in  his

  or   her   discretion,  appoint  an  administrator  and  such  assistant
  administrators as in his or her opinion may be necessary  to  administer
  the  terms of any agreement or order, and the persons so appointed shall
  be  deemed  to occupy positions confidential to the commissioner and may
  be appointed without competitive examination. All other persons employed
  by the commissioner in the administration of such a marketing  agreement
  or  order shall be selected in accordance with the civil service law and
  rules.
11. Any marketing agreement or order of the commissioner  may  provide
  (a) for payments to cooperative associations of producers in cases where
  the  commissioner  finds  that  such associations are actually rendering
  marketing services to producers under contract with them, which services
  enure to the benefit of all producers in the market or to the benefit of
  the market as a whole and  may  include  the  conduct  and  maintenance,
  jointly  with  other cooperative associations, of plans or campaigns, by
  advertisement or otherwise, including participation in similar  regional
  or  national plans or campaigns, to promote the increased consumption of
  milk and  milk  products,  to  acquaint  the  public  with  the  dietary
  advantages  of  milk and milk products and with the economy in the diet,
  and  to  command,  for  milk  and  dairy  products,  consumer  attention
  consistent  with  their  importance and value, or that such associations
  are rendering services in the control and disposition of surplus for the
  benefit of the market; (b) for payment to milk dealers or to cooperative
  associations of producers  which  operate  milk  receiving  stations  or
  manufacturing  plants  for services rendered by them, in the stabilizing
  of the supply of fluid milk and cream within the market at times  either
  of  surplus  or of shortage of milk; and (c) for adjustments in payments
  to producers to effect a more favorable seasonal balance as between  the
  production  and consumption of milk. Such adjustments may be made in the
  form of deductions and additions to the fund to equalize prices of  milk
  to  producers, or by apportioning among producers the total value of all
  milk subject to equalization on the basis of their  marketings  of  milk
  during  a  representative  period  of time. Any such deductions from the
  fund to equalize prices shall not be deemed  to  be  state  funds.  Such
  moneys  shall  be  held  in reserve and used solely for additions to the
  fund to equalize prices, in such manner as the order  may  provide.  The
  commissioner  shall  make  no provision for adjustment in payments under
  this section with respect to a state milk marketing order, except on the
  petition  of  a  producers'  bargaining  agency  of  a  production  area
  supplying  a  marketing  area  and after a public hearing and subsequent
  producer approval as required by this section.
12. "Distributor" as used in this and the preceding  section  means  a
  milk  dealer  as  defined  in  this  article who delivers milk to stores
  and/or consumers within the marketing area, from a milk  depot  or  milk
  plant owned and/or operated by such dealer.