Milk marketing orders: Western Iowa,

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Federal Register: June 7, 1999 (Volume 64, Number 108)Proposed RulesPage 30256-30257From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr07jn99-15

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1065

DA-99-01Milk in the Nebraska-Western Iowa Marketing Area; Termination of Proceeding on Proposed Suspension

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Termination of Proceeding.

SUMMARY: This document terminates the proceeding that was initiated to consider a proposal to suspend portions of the supply plant shipping requirements for the Nebraska-Western Iowa order for the months of March through September 1999.

FOR FURTHER INFORMATION CONTACT: Constance M. Brenner, Marketing Specialist, USDA/AMS/Dairy Programs, Order Formulation Branch, Room 2971, South Building, PO Box 96456, Washington, DC 20090-6456, (202) 720-2357, e-mail address: connie__m__brenner@usda.gov.

SUPPLEMENTARY INFORMATION: Prior document in this proceeding: Notice of Proposed Suspension of Rule: Issued March 11, 1999; published March 17, 1999 (64 FR 13125).

Small Business Consideration

In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the Agricultural Marketing Service considered the economic impact of this rulemaking action on small entities and has certified that this termination of proceeding 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.

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For the month of January 1999, 1,248 dairy farmers were producers under the Nebraska-Western Iowa order. Of these producers, 1,176 producers (i.e., 94 percent) were considered small businesses having monthly milk production under 326,000 pounds. A further breakdown of the monthly milk production of the producers on the order during January 1999 is as follows: 753 produced less than 100,000 pounds of milk; 322 produced between 100,000 and 200,000; 101 produced between 200,000 and 326,000; and 72 produced over 326,000 pounds. During the same month, 5 handlers were pooled under the order. None are considered small businesses.

Because this termination of the proceedings concerning the proposed suspension results in no change in regulation it does not change reporting, record keeping or other compliance requirements. Based on comments received from an organization representing producers who supply the Order 65 market with over 40 percent of the monthly average volume of milk pooled under the order, and on our analysis of other relevant information connected with this rulemaking, we have determined that the suspension request should not be granted. While suspension of the supply plant shipping requirements may have served the economic interests of one sector of the producers supplying Order 65, it would have most likely resulted in a significant loss of blend price income to a substantial number of other producers under the Order.

Preliminary Statement

This termination of proceedings is issued pursuant to the provisions of the Agricultural Marketing Agreement Act and of the order regulating the handling of milk in the Nebraska-Western Iowa marketing area.

Notice was published in the Federal Register on March 17, 1999 (64 FR 13125) concerning a proposed suspension of certain sections of the order. Interested persons were afforded opportunity to file written data, views and arguments thereon.

One comment opposing the proposed termination was received.

Statement of Consideration

This document terminates the proceeding initiated to suspend portions of the supply plant shipping requirements for the Nebraska- Western Iowa order (Order 65) for the months of March through September 1999. The proposed suspension was requested by North Central Associated Milk Producers, Inc. (AMPI), a cooperative association that supplies milk for the market's fluid needs. AMPI requested that language be suspended from the Order 65 pool supply plant definition for the purpose of allowing producers who had historically supplied the fluid needs of Order 65 distributing plants to maintain their pool status. AMPI contended that because a fluid milk plant operator reduced its purchase of fluid milk from AMPI by more than half, AMPI would not be able to pool milk historically associated with Order 65 for March 1999, and thus would not qualify its supply plant for the automatic pooling qualification months of April through August.

AMPI maintained that through discussions with other handlers in the order, it was certain that no additional milk was needed at that time. Thus, AMPI contended that it was appropriate to suspend the supply plant shipping standards for the months of March through September 1999.

Dairy Farmers of America (DFA) fileda comment opposing the proposal to suspend portions of the supply plant shipping requirements for Order 65. DFA reported that its members produce and market over 40 percent of the monthly average volume of milk pooled under the order.

DFA contended that the suspension would enhance AMPI's ability to pool additional supplies on the market, and DFA members would be disadvantaged because the blend price would be lower. In addition, DFA asserted that Federal order language is routinely suspended to accommodate the pooling of milk as a result of general production increases relative to Class I milk sales, natural disasters, or plant closures. DFA stated that the reasons for these types of suspensions are generally beyond the control of any of the handlers regulated by the order and argued that changes in supplier relationships do not fall into the category of ``beyond control of the party.'' DFA therefore opposed the request.

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 the proposed suspension action be terminated. AMPI's loss of 50 percent of its customary sales to a pool distributing plant will not preclude AMPI from pooling its supply plant and some of its members' milk on Order 65. While AMPI may not be able to pool as much milk under Order 65 during March 1999 as it has in prior periods, its supply plant and associated milk may be pooled under the order as long as some milk is sold by the supply plant to pool distributing plants.

Furthermore, the sole requirement for gaining automatic supply plant pooling status (with no percentage shipping standards for pool supply plants) for the months of April through August is for the supply plant to qualify as a pool plant for the months of September through March. If AMPI is able to pool its supply plant, even with a lesser volume of milk than it desires, the supply plant still would qualify for automatic pooling status for the period April through August.

Suspension of the order's pool supply plant shipping standard for the month of March 1999 would allow AMPI to pool a much greater volume of milk under the order than that associated with its sales to the fluid market and most likely would result in a significant loss of blend price income to all other producers whose milk is pooled under the order.

List of Subjects in 7 CFR Part 1065

Milk marketing orders.

The authority citation for 7 CFR part 1065 continues to read as follows:

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

Dated: June 1, 1999. Richard M. McKee, Deputy Administrator, Dairy Programs.

FR Doc. 99-14312Filed6-4-99; 8:45 amBILLING CODE 3410-02-P

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