Federal Register: September 3, 1998 (Volume 63, Number 171)Rules and RegulationsPage 46866-46868From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr03se98-2

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1106

DA-98-08Milk in the Southwest Plains Marketing Area; Suspension of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; suspension.

SUMMARY: This document suspends certain sections of the Southwest Plains Federal milk marketing order. The suspension removes portions of the supply plant shipping standard and the producer milk delivery requirement. The suspension, which was requested by Kraft Foods, Inc. (Kraft), is necessary to prevent uneconomic and inefficient movements of milk and to ensure that producers historically associated with the market will continue to have their milk pooled under the Southwest Plains order.

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EFFECTIVE DATE: September 1, 1998, through August 31, 1999.

FOR FURTHER INFORMATION CONTACT: Nicholas Memoli, Marketing Specialist, USDA/AMS/Dairy Programs, Order Formulation Branch, Room 2971, South Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1932, e- mail address Nicholas__Memoli@usda.gov.

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:

Notice of Proposed Suspension: Issued August 6, 1998; published August 12, 1998 (63 FR 43125).

The Department is issuing this final rule in conformance with Executive Order 12866.

This final rule has been reviewed under Executive Order 12988, 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 request modification or exemption from such order by filing with the Secretary a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with the law. 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.

Small Business Consideration

In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the Agricultural Marketing Service has considered the economic impact of this action on small entities and has certified that this rule will not have a significant economic impact on a substantial number of small entities. For the purpose of the Regulatory Flexibility Act, a dairy farm is considered a ``small business'' if it has an annual gross revenue of less than $500,000, and a dairy products manufacturer is a ``small business'' if it has fewer than 500 employees. For the purposes of determining which dairy farms are ``small businesses,'' the $500,000 per year criterion was used to establish a production guideline of 326,000 pounds per month. Although this guideline does not factor in additional monies that may be received by dairy producers, it should be an inclusive standard for most ``small'' dairy farmers. For purposes of determining a handler's size, if the plant is part of a larger company operating multiple plants that collectively exceed the 500-employee limit, the plant will be considered a large business even if the local plant has fewer than 500 employees.

For the month of June 1998, 2,187 dairy farmers were producers under Order 106. Of these producers, 2,138 producers (i.e., 98%) were considered small businesses. For the same month, 16 handlers were pooled under Order 106. Two of these handlers were considered small businesses.

The supply plant shipping standard and the producer milk delivery requirement are designed to attract an adequate supply of milk to the market to meet fluid needs. This final rule will allow a supply plant that has been associated with the Southwest Plains market during the months of September 1997 through January 1998 to qualify as a pool plant without shipping any milk to a pool distributing plant during the following months of September 1998 through August 1999. The rule will also suspend the requirement that producers deliver at least one day's production of milk to a pool distributing plant during the month before their milk is eligible to be diverted to nonpool plants.

Marketing conditions in the Southwest Plains order indicate that there should be a sufficient amount of local milk available during the requested suspension period to supply the fluid needs of the market. Therefore, supplemental milk supplies should not be needed. Thus, 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.

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 Southwest Plains marketing area.

Statement of Consideration

This rule suspends portions of the supply plant shipping standard and producer milk diversion rules of the Southwest Plains order for the period of September 1998 through August 1999. The suspension will allow a supply plant that has been associated with the Southwest Plains order during the months of September 1997 through January 1998 to qualify as a pool plant without shipping any milk to a pool distributing plant during the months of September 1998 through August 1999. Without the suspension, a supply plant would be required to ship 50 percent of its producer receipts to pool distributing plants during the months of September through January and 20 percent of its producer receipts to pool distributing plants during the months of February through August to qualify as a pool plant under the order.

The rule also suspends the requirement that producers deliver at least one day's production during the month to a pool plant before their milk is eligible for diversion to a nonpool plant. By suspending this provision, producer milk will not be required to be delivered to pool plants before going to unregulated manufacturing plants.

According to Kraft's letter requesting the suspension, supplemental milk supplies will not be needed to meet the fluid needs of distributing plants. Kraft anticipates that there will be an adequate supply of producer milk available directly from producers' farms in the general area of distributing plants to meet the Class I needs of the market. The handler notes that the supply plant shipping provision and the producer milk delivery requirement have been suspended since 1993 and 1992, respectively.

Kraft states there is no need to require producers located some distance from pool distributing plants to deliver their milk to a pool distributing plant when their milk can more economically be diverted directly to manufacturing plants in the production area. Thus, the handler contends the suspension is necessary to prevent the uneconomic movements of milk and to ensure producers historically associated with the Order 106 market will continue to have their milk pooled under the order.

A notice of proposed rulemaking was published in the Federal Register on August 12, 1998 (63 FR 43125), concerning the proposed suspension. Interested persons were afforded an opportunity to file written data, views and arguments thereon. One comment was received supporting the proposed suspension.

Kraft fileda comment reiterating its support for the suspension. No comments were filedin opposition to the suspension.

As noted by Kraft in its letter requesting the suspension, the supply plant shipping standard and the producer milk delivery requirement

[Page 46868]have been suspended for a number of years. Market conditions in the Order 106 marketing area indicate that there should be sufficient amounts of milk available in the local area to meet the fluid needs of the order for the requested time period. Therefore, supplemental milk supplies should not be needed.

Accordingly, the suspension is found to be necessary for the purposes of assuring that producers' milk will not have to be moved in an inefficient manner and to assure that producers whose milk has long been associated with the Southwest Plains marketing area will continue to benefit from pooling and pricing under the order.

After consideration of all relevant material, including the proposal in the notice, the comment received, and other available information, it is hereby found and determined that for the months of September 1, 1998, through August 31, 1999, the following provisions of the order do not tend to effectuate the declared policy of the Act:

In Sec. 1106.6, the words ``during the month''.

In Sec. 1106.7(b)(1), beginning with the words ``of February through August'' and continuing to the end of the paragraph.

In Sec. 1106.13, paragraph (d)(1) in its entirety.

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. One comment supporting the suspension was 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 1106

Milk marketing orders.

For the reasons set forth in the preamble, 7 CFR part 1106 is amended as follows:

PART 1106--MILK IN THE SOUTHWEST PLAINS MARKETING AREA

1. The authority citation for 7 CFR part 1106 continues to read as follows:

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

Sec. 1106.6 [Suspended in part]

2. In Sec. 1106.6, the words ``during the month'' are suspended.

Sec. 1106.7 [Suspended in part]

3. In Sec. 1106.7 paragraph (b)(1), the words beginning with ``of February through August'' and continuing to the end of the paragraph are suspended.

Sec. 1106.13 [Suspended in part]

4. In Sec. 1106.13, paragraph (d)(1) is suspended in its entirety.

Dated: August 27, 1998. Richard M. McKee, Deputy Administrator, Dairy Programs.

FR Doc. 98-23710Filed9-2-98; 8:45 amBILLING CODE 3410-02-P