Opinion ID: 296620
Heading Depth: 1
Heading Rank: 1

Heading: The General Regulatory Scheme

Text: 2 Although the mechanics of milk regulation have been described elsewhere, 1 a brief review of the regulatory scheme will provide a helpful background for consideration of the issues raised by this appeal. 3 The Agricultural Marketing Agreement Act of 1937 as amended 7 U.S.C. 601 et seq. (1964), places upon the Secretary of Agriculture primary responsibility for establishing and maintaining 'such orderly marketing conditions for agricultural commodities in interstate commerce as will establish, as the prices to farmers, parity prices   .' 2 The Secretary is thus authorized to issue orders regulating the handling of milk and other commodities. Under the Act, any handler of milk subject to an other may file a written petition with the Secretary of Agriculture for administrative review of the order. 3 The decision of the Secretary on such petition is subject to judicial review in the District Court. 4 4 Section 8c(5)(A) of the Act provides for the classification of milk according to the way in which it is used, and for the establishment of minimum prices to be paid for each class of milk by handlers. /5/ In a market-wide pooling order such as the Nebraska-Western Iowa Order involved here, the handlers do not pay these class prices directly to individual producers. Instead, each handler pays the producers with whom he deals a uniform or 'blend' price based upon the way milk is used by all handlers throughout the marketing area-- that is, how much in fluid form and how much in the various manufactured forms, such as cheese. To take account of the discrepancy between the uniform blend price and the different use value of milk to a particular handler a 'producer settlement fund' is established. 6 A handler whose use of milk in high-value Class I (fluid milk) form is more than average in the market must pay into the producer settlement fund; a handler whose Class I usage is lower than average receives payment from the fund so that he can pay his producers the blend price. 5 The price payable for each use classification in a particular milk order must, according to the Act, be 'uniform as to all handlers.' 7 The uniform price is subject to three (and only three) adjustments-- namely for 6 '(1) volume, market, and production differentials customarily applied by the handlers subject to such order, (2) the grade or quality of the milk purchased, and (3) the locations at which delivery of such milk, or any use classification thereof, is made to such handlers.' 8 7 It is the third adjustment, or 'location differential,' which is involved in this appeal. 8