Hawaii Administrative Rules › Title 4 - DEPARTMENT OF AGRICULTURE › Subtitle 4 - DIVISION OF MARKETING AND CONSUMER SERVICES › Chapter 60 - MILK CONTROL RULES › Subchapter 3 - PRICE RULES › Section 4-60-11 - Determination of utilization for payment

Current through June, 2024
(a) In determining
				  utilization of fresh milk for payment purposes, the quotas of each producer or
				  producer-distributor shall be the basic guide in determining each producer's or
				  producer-distributor's share of the class I requirements in the market. Class I
				  requirements in any given month shall be prorated to quota holders to determine
				  their share of class I utilization. Fresh milk produced and delivered in excess
				  of total class I demand and declared to be class II or excess milk shall be
				  paid for in a descending order. The monthly prorations for payment purposes,
				  while serving to allocate class I requirements to all quota holders, shall not
				  change the allocated quotas. Subsections (b) to (i) shall be used in making the
				  prorations.
(b) If total class I
				  utilization equals the total of the quotas allocated in the Honolulu milk shed
				  or Hawaii milk shed, each producer or producer-distributor in its respective
				  milk shed, shall be paid a class I price for production delivered.
(c) If, in a given month, total class I
				  utilization is less than the total of the
(d) If, in a given month, total class I
				  utilization is more than the total of the quotas in the Honolulu milk shed or
				  Hawaii milk shed, each producer or producer-distributor, in its respective milk
				  shed, shall receive a class I price for all milk produced and delivered within
				  the producer or producer-distributor's quota and the remaining class I milk
				  shall be distributed on a pro rata basis to all producers and
				  producer-distributors with over quota production.
(e) If any producer or producer-distributor's
				  total monthly fresh milk production delivered is less than the producer or
				  producer-distributor's total monthly allocated quota, the pro rata share of the
				  total class I utilization for the month shall be based on the producer or
				  producer-distributor's total production delivered. Distribution of all milk
				  utilized in class I pro rata shall be for milk produced and delivered within
				  quota and the result of this formula of payments shall be a same blend price
				  for each licensed producer or producer-distributor for milk produced and
				  delivered within the producer or producer-distributor's total monthly
				  quota.
(f) Fresh milk received from
				  sources other than licensed producers or licensed producer-distributors within
				  the State of Hawaii shall be considered as excess milk if there is adequate
				  production from licensed producers or licensed producer-distributors to meet
				  class I and class II requirements. If adequate fresh milk is produced to meet
				  all class I but not class II requirements, then that fresh milk from other
				  sources shall be deemed class II. If there is inadequate production to meet
				  class I requirements, then that fresh milk from other sources shall be deemed
				  class I.
(g) In computing
				  utilization of milk, a distributor or producer-distributor may claim as plant
				  shrinkage and route returns actual losses up to, but not to exceed, one per
				  cent of the total amount of fresh milk received for processing, and payment
				  therefore to producers or producer-distributors shall be at the class II price.
				  Payment by distributors or producer-distributors for plant shrinkage and route
				  returns in excess of one per cent of the total amount of fresh milk received
				  for processing shall be made at class I price.
(h) To be considered as excess milk for
				  pricing purposes, excess milk shall be of acceptable grade for all class I or
				  class II use and shall have been made available for utilization. Excess milk
				  may be disposed of by the distributor or producer-distributor in a manner that
				  will realize the highest practical salvage value. Before disposing of excess
				  milk by dumping or otherwise, the distributor or producer-distributor shall
				  notify the branch and a representative of the branch shall certify such
				  disposal. To establish a price to be paid producers or producer-distributors
				  for excess milk within the excess pool, the following procedures shall prevail:
(A) Each distributor or producer-distributor,
				  in each month's monthly report to the branch, shall report the volume and the
				  salvage value of milk constituents, if any, of excess milk disposed of at the
				  plant.
(B) The branch shall combine
				  all the salvage values of milk constituents reported in subparagraph (a) as
				  received from the various distributors and producer-distributors. The total of
				  all salvage values shall then be divided by the total of the volume of excess
				  milk reported in subparagraph (a) to determine the price per hundredweight of
				  said excess milk and, on the basis of this price, the branch shall compute the
				  obligation of distributors and producer-distributors to producers of excess
				  milk.