Milk in the Chicago Regional Marketing Area; Proposed Temporary Revision of Certain Provisions of the Order

DEPARTMENT OF AGRICULTURE

7 CFR Part 1030

[DA-94-16]

Milk in the Chicago Regional Marketing Area; Proposed Temporary

Revision of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed revision of rule.

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SUMMARY: This document invites written comments on a proposal to revise

the supply plant shipping standards under the Chicago Regional order

for the months of August and September, 1994. The proposal would reduce

shipping percentages for individual supply plants and units of supply

plants to zero for these two months. The reductions were requested by

Central Milk Producers Cooperative, a federation of cooperatives that

represents producers who supply the market. The organization contends

that the action is necessary to prevent uneconomic and inefficient

movements of milk to qualify plants for pooling.

DATES: Comments are due no later than July 22, 1994.

ADDRESSES: Comments (two copies) should be sent to USDA/AMS/Dairy

Division, Order Formulation Branch, Room 2971, South Building, P.O. Box

96456, Washington, DC 20090-6456.

FOR FURTHER INFORMATION CONTACT: Constance M. Brenner, Marketing

Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room

2971, South Building, P.O. Box 96456, Washington, DC 20090-6456 (202)

720-2357.

SUPPLEMENTARY INFORMATION: The Regulatory Flexibility Act (5 U.S.C.

601-612) requires the Agency to examine the impact of a proposed rule

on small entities. Pursuant to 5 U.S.C. 605(b), the Administrator of

the Agricultural Marketing Service has certified that this proposed

rule would not have a significant economic impact on a substantial

number of small entities. This rule would lessen the regulatory impact

of the order on certain milk handlers and would tend to ensure that

dairy farmers would continue to have their milk priced under the order

and thereby receive the benefits that accrue from such pricing.

The Department of Agriculture (Department) is issuing this proposed

rule in conformance with Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12778,

Civil Justice Reform. This rule is not intended to have a retroactive

effect. If adopted, this proposed rule will not preempt any state or

local laws, regulations, or policies, unless they present an

irreconcilable conflict with the 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 file with

the Secretary a petition stating that the order, any provisions of the

order, or any obligation imposed in connection with the order is not in

accordance with law and request a modification of an order or to be

exempted from the order. 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.

Notice is hereby given that, pursuant to the provisions of the

Agricultural Marketing Agreement Act and the provisions of

Sec. 1030.7(b)(5) of the order, the temporary revision of certain

provisions of the order regulating the handling of milk in the Chicago

Regional marketing area is being considered for the months of August 1,

1994, through September 30, 1994.

All persons who desire to submit written data, views or arguments

about the proposed revision should send two copies of their views to

USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South

Building, P.O. Box 96456, Washington, DC 20090-6456 by the 7th day

after publication of this notice in the Federal Register. The period

for filing comments is limited to 7 days because a longer period would

not provide the time needed to complete the required procedures and

include August 1994 in the temporary revision period.

All written submissions made pursuant to this notice will be made

available for public inspection in the Dairy Division during regular

business hours (7 CFR 1.27(b)).

Statement of Consideration

The provisions proposed to be revised are the supply plant shipping

percentages for the months of August and September, 1994. For an

individual supply plant, the proposed action would reduce the shipping

percentage by 3 percentage points (from 3 to zero percent of receipts)

in August 1994 and by 5 percentage points (from 5 to zero percent of

receipts) in September 1994. For a unit of supply plants, the proposed

action would reduce the shipping percentage by 6 percentage points

(from 6 to zero percent of receipts) in August 1994 and by 10

percentage points (from 10 to zero percent of receipts) in September

1994.

Currently, the order provides that from January through August,

individual supply plants must ship at least 3 percent of milk receipts

to distributing plants to qualify as pool plants while a unit of supply

plants must ship at least 6 percent of total receipts for pooling

purposes. From September through December, individual supply plants

must ship at least 5 percent of milk receipts to distributing plants to

qualify as pool plants while a unit of supply plants must ship at least

10 percent of total receipts for pooling purposes.

The Chicago order provides that the Market Administrator may adjust

the shipping standards for individual plants and units of plants by up

to 2 percentage points for up to 3 months. The order also provides that

the Director of the Dairy Division may increase the shipping standards

by up to 5 percentage points or decrease the shipping standards by up

to 10 percentage points. The adjustments can be made to encourage

additional milk shipments or to prevent uneconomic shipments.

The revision was requested by Central Milk Producers Cooperative

(CMPC), a federation of cooperative associations that represents a

substantial number of the producers who supply the market. CMPC

contends that the most recent supply and demand estimates, and their

commitments to the market, substantiate that there will be more than

sufficient fluid milk supplies from close-in sources available for the

fluid market. Current projections indicate that supply will remain

constant while demand will decrease. Based on these projections, CMPC

asserts that it is impractical and unnecessary to require qualifying

shipments from distant unit plants, while forcing the milk from nearby

unit plants to be hauled to distant plants for manufacturing, merely

for pooling purposes. CMPC states that this double hauling of milk will

put a financial burden on handlers who operate pool units. Thus, CMPC

contends that a reduction of shipping percentages is necessary to

prevent uneconomic and inefficient shipments of milk from distant

supply plants solely for pooling purposes.

Based on supply and demand estimates, CMPC has requested that the

market administrator reduce the shipping percentages by 2 percentage

points for the months of August and September 1994. A reduction of the

shipping percentages for these two months is being considered by the

Market Administrator.

Based on the most recent supply and demand projections, CMPC

contends a further reduction of shipping percentages, beyond the

request to the Market Administrator, will be necessary.

CMPC contends that in order to make the most efficient use of

available milk supplies, as much as possible of nearby milk supplies

will have to be utilized with reliance on distant supplies only on days

when nearer milk supplies have been exhausted. For the months of August

and September, 1994, CMPC contends that such efficiencies can only be

realized if the shipping standards for individual plants and units of

supply plants are reduced to zero percent of receipts, respectively.

In view of the current supply and demand relationship, it may be

necessary to reduce the supply plant shipping percentages as proposed

to provide for the efficient and economic marketing of milk during the

months of August 1, 1994, through September 30, 1994.

List of Subjects in 7 CFR Part 1030

Milk marketing orders.

The authority citation for 7 CFR Part 1030 continues to read as

follows:

Authority: Secs. 1-19, 48 Stat 31, as amended; 7 U.S.C. 601-674.

Dated: July 11, 1994.

Silvio Capponi,

Acting Director, Dairy Division.

[FR Doc. 94-17243 Filed 7-14-94; 8:45 am]

BILLING CODE 3410-02-P