Milk marketing orders: Iowa,

[Federal Register: July 29, 1999 (Volume 64, Number 145)]

[Proposed Rules]

[Page 41047-41049]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr29jy99-14]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1079

[DA-99-02]

Milk in the Iowa Marketing Area; Termination of Proceeding

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Termination of Proceeding.

SUMMARY: This document terminates the proceeding that was initiated to consider a proposal to reduce the percentage of a supply plant's receipts that must be delivered to fluid milk plants to qualify a supply plant for pooling under the Iowa Federal milk order for the months of July and August 1999, and to further reduce the percentage for June 1999.

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

SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:

Proposed Rule: Issued April 14, 1999; published April 19, 1999 (64 FR 19071).

Final Rule: Issued May 5, 1999; published May 11,1999 (64 FR 25193).

Notice of Reopening and Extension of Time for Filing Comments: Issued May 7, 1999; published May 13, 1999 (64 FR 25851).

Small Business Consideration

In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the

[[Page 41048]]

Agricultural Marketing Service considered the economic impact of the action on small entities and certified that it would 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 February 1999, 3,788 dairy farmers were producers under the Iowa order. Of these, 3,714 producers (i.e., 98 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 February 1999 was as follows: 2,804 produced less than 100,000 pounds of milk; 776 produced between 100,000 and 200,000 pounds; 134 produced between 200,000 and 326,000 pounds; and 74 produced over 326,000 pounds. During the same month, 11 handlers were pooled under the order. Five were considered small businesses.

Because this termination of the proceeding concerning the proposed revision results in no change in regulation, the economic conditions of small entities will remain unchanged. Also, it does not change reporting, record keeping, or other compliance requirements.

Based on the comment received in response to the initial proposed revision from Anderson-Erickson Dairy Company, the later comment from Swiss Valley Farms, Co., a cooperative organization in Davenport, Iowa, and on our analysis of relevant information connected with the proposed rulemaking, we have determined that the revision request should not be granted. While reduction of the pool supply plant shipping standards may have made qualification for pool status more easily obtainable for one supply plant operator, the order should assure that adequate supplies of milk are available to meet the fluid milk needs of the Iowa market. The current level of supply plant shipping percentages should meet those needs without preventing producers whose milk historically has been associated with the order from maintaining their pool status.

Preliminary Statement

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

Notice of reopening and extension of time for filing comments was published in the Federal Register on May 13, 1999 (64 FR 25851). The time for filing comments on the proposed reduction of the percentage of a supply plant's receipts that must be delivered to fluid milk plants to qualify a supply plant for pooling under the Iowa Federal milk order for the months of July and August 1999, and a further reduction for June 1999, was extended through June 14, 1999. Interested persons were afforded opportunity to file written data, views and arguments thereon.

One comment opposing the reduction of supply plant shipping requirements was received.

Statement of Consideration

This document terminates the proceeding that was initiated to consider a proposal to reduce the percentage of a supply plant's receipts that must be delivered to fluid milk plants to qualify a supply plant for pooling under the Iowa Federal milk order for the months of July and August 1999, and to further reduce the percentage for June 1999.

The original request for a reduction in the percentage of a supply plant's shipping percentage requirements came from Beatrice Cheese, Inc., (Beatrice), a proprietary manufacturer of dairy products in Fredericksburg, Iowa. Beatrice requested a decrease in the applicable percentage of 10 percentage points from 20 percent to 10 percent for the months of April through August 1999. This request was based on Beatrice's contention that the action would allow the milk of dairymen who historically had supplied the market to continue to be pooled under the Federal order and also would prevent uneconomic milk movements. Beatrice stated that the 10 percent decrease for April through August 1999 was warranted due to the fact that current raw milk supplies available for fluid use from outside of Iowa's traditional procurement area exceeded the needs of the fluid milk plants pooled under Federal Order 79 and that these available supplies had replaced milk formerly shipped by Beatrice producers. Beatrice contended that if the pool supply plant shipping percentages remained unchanged, the milk of dairymen who historically had supplied the Iowa market would not be able to continue to be pooled under the Federal Order or Beatrice would be forced to move milk uneconomically to qualify it for pooling.

A comment filedby Anderson-Erickson Dairy Company, a pool distributing plant operator regulated under Order 79, did not oppose the proposed reduction for the months of April and May, but proposed a reduction of no more than 5 percentage points for June and opposed any reduction at that time for the months of July and August 1999. Anderson-Erickson stated that the summer could likely lead to a different marketing scenario than that projected by Beatrice due to a volatile milk supply situation in Iowa.

As a result of Beatrice's request and Anderson-Erickson's comments, the Iowa order supply plant shipping percentages were reduced for April and May by 10 percentage points, and for June by 5 percentage points. In addition, a notice of reopening and extension of time for filing comments through June 14, 1999, was issued to consider a further 5- percent reduction for June and a continuation of the 10-percentage point reduction for July and August.

Comments from Swiss Valley Farms, Co., a cooperative organization in Davenport, Iowa, recommend termination of the proceeding due to indications that Iowa milk production during the traditionally short supply months may be lower than normal. Swiss Valley also states that shipping percentages, once properly set, should be changed based only on changes in the supply-demand factors in the market. The cooperative association contends that such factors would represent only emergency situations beyond the control of the producers or processors in a market. Swiss Valley argues that these emergency situations are not currently in existence.

After consideration of all relevant material, including the proposal in the notice, the comment received from the cooperative organization, and other information connected with the rulemaking, it is hereby found and determined that the proposed revision action be terminated.

[[Page 41049]]

List of Subjects in 7 CFR Part 1079

Milk marketing orders.

The authority citation for 7 CFR part 1079 continues to read as follows:

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

Dated: July 23, 1999. Richard M. McKee, Deputy Administrator, Dairy Programs.

[FR Doc. 99-19351Filed7-28-99; 8:45 am]

BILLING CODE 3410-02-P