Milk in the Middle Atlantic Marketing Area; Proposed Suspension of Certain Provisions of the Order

SUMMARY: This document invites written comments on a proposal to

suspend certain provisions of the Middle Atlantic Federal milk

marketing order for the months of September 1994 through February 1995.

The proposed suspension would reduce the percent of receipts that must

be disposed of as Class I disposition by pool distributing plants,

provide automatic pool plant status for supply plants and reserve

processing plants that were pool plants during the months of September

through February, and suspend the limit on the amount of milk that may

be diverted to nonpool plants by cooperative associations and by pool

plant operators. The suspension was requested by several Middle

Atlantic cooperatives and handlers who contend that the suspension is

necessary to assure that producer milk which has been historically

associated with the market will continue to be pooled and priced under

the order without incurring unnecessary and uneconomic movements solely

for the purpose of maintaining pool status.

DATES: Comments are due no later than August 29, 1994.

ADDRESSES: Comments (two copies) should be filed with the USDA/AMS/

Dairy Division, Order Formulation Branch, Room 2971, South Building,

P.O. Box 96456, Washington, DC 20090-6456.

FOR FURTHER INFORMATION CONTACT: Gino M. Tosi, Marketing Specialist,

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

Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1366.

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 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, the suspension of the following

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

Atlantic marketing area is being considered for the months of September

1, 1994, through February 28, 1995:

1. In Sec. 1004.7(a), the words ``40 percent in the months of

September through February, and'' and ``in the months of March through

August,''.

2. In Sec. 1004.7(e), the word ``immediately'' and the words ``for

each of the following months of March through August,''.

3. In the introductory text of Sec. 1004.12(d), the words ``in

accordance with the conditions of paragraphs (d)(1) and (d)(2) of this

section.''

4. In Sec. 1004.12, paragraphs (d)(1) and (d)(2).

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

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

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

Building, P.O. Box 96456, Washington, DC 20090-6456, by the 15th day

after publication of this notice in the Federal Register.

The period for filing comments is limited to 15 days because a

longer period would not provide the time needed to complete the

required procedures before the requested suspension is to be effective.

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 proposed suspension would reduce the total Class I disposition

standard for pool distributing plants, provide automatic pool plant

status for supply plants and reserve processing plants that were pool

plants during each of the preceding months of September through

February, and suspend the limit on the amount of milk that may be

diverted to nonpool plants by cooperative associations and pool plant

operators.

The first provision proposed to be suspended would reduce the

percentage of a distributing plant's receipts that would have to be

disposed of as Class I milk to meet the order's pooling standards. As

proposed, a pool distributing plant would have to use at least 30

percent, rather than 40 percent, of its monthly milk receipts as Class

I milk during September 1994 through February 1995.

The second provision proposed to be suspended would permit supply

plants and reserve processing plants that have met the order's pooling

standards during the months of September 1993 through February 1994 to

retain pool status for the months of September 1994 through August

1995. The shipping requirements that normally would have applied to

such plants during the months of September 1994 through February 1995

would be eliminated under the proposed suspension.

The third provision included in the proposed suspension would

eliminate the limit on the percentage of milk that may be diverted to

nonpool plants by a cooperative association or a pool plant operator

for the period of September 1994 through February 1995.

The proposed suspension was requested by Pennmarva Dairymen's

Federation, Atlantic Dairy Processing, Inc., Dairylea, Eastern Milk

Producers Cooperative, and Lehigh Valley Dairies. Together these

organizations market over 90 percent of the market's producer milk.

The proponents state that between 1991 and 1993 producer receipts

on Order 4 increased while the percentage of the market's producer milk

used for Class I purposes decreased. Proponents cited the consistently

declining monthly Class I percentages for the months of September

through February of 1991, 1992, and 1993 to support their request. They

pointed out, for example, that the Class I use percentage for September

1991 was 56.2, while in September 1993 it was 51.4 percent. The

proponents claim that the reduction in Class I use results in an

increase in diversions to nonpool plants, which makes it increasingly

difficult for cooperatives and pool plant operators to maintain the

pool status of the milk of producers who have historically been

associated with the market.

In further support of their suspension request, the proponents

indicate that two large Order 4 distributing plants with which large

volumes of Order 4 diverted milk had been associated became regulated

under the New York-New Jersey order, another Order 4 distributing plant

closed, and two additional Order 4 distributing plants have changed

their product mix, causing a reduction of pool plant deliveries for the

cooperative supplying milk to these plants. The proponents claim that

they are experiencing difficulty associating all of their diverted

producer milk with the remaining distributing plants now regulated

under the Middle Atlantic order because the additional diverted milk is

reducing the Class I use percentage of the plants from which it is

diverted, thereby jeopardizing their status as pool plants.

Thus the proponents state that the proposed suspension would have

the effect of reducing uneconomic movements of milk solely for the

purpose of meeting pool qualifications, and would reflect current

marketing conditions without causing the milk of producers long

associated with the market to become depooled.

Accordingly, it may be appropriate to suspend the aforesaid

provisions from September 1, 1994, through February 28, 1995.

List of Subjects in 7 CFR Part 1004

Milk marketing orders.

The authority citation for 7 CFR Part 1004 continues to read as

follows:

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

Dated: August 8, 1994.

Lon Hatamiya,

Administrator.

[FR Doc. 94-19806 Filed 8-11-94; 8:45 am]

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