Milk in the Central Arizona Marketing Area; Proposed Suspension of Certain Provisions of the Order

DEPARTMENT OF AGRICULTURE

7 CFR Part 1131

[DA-95-11]

Milk in the Central Arizona Marketing Area; Proposed Suspension

of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed suspension of rule.

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SUMMARY: This document invites written comments on a proposal to

suspend certain provisions of the Central Arizona Federal milk

marketing order for an indefinite period beginning March 1, 1995. The

proposed suspension would eliminate the requirement that a cooperative

association ship at least 50 percent of its receipts to other handler

pool plants to maintain pool status of a manufacturing plant operated

by the cooperative. United Dairymen of Arizona, a cooperative

association that represents nearly all of the producers who supply milk

to the market, has requested the suspension. The cooperative asserts

that the suspension is necessary to prevent uneconomical and

inefficient movements of milk.

DATES: Comments are due no later than February 23, 1995.

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:Clifford M. Carman, Marketing

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

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

720-9368.

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 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, had 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

provision of the order regulating the handling of milk in the Central

Arizona marketing area is being considered for an indefinite period

beginning March 1, 1995:

In Sec. 1131.7(c), the words ``50 percent or more of its member

producer milk (including the skim milk and butterfat in fluid milk

products transferred from its own plant pursuant to this paragraph that

is not in excess of the skim milk and butterfat contained in member

producer milk actually received at such plant) received at the pool

plants of other handlers during the current month or the previous 12-

month period ending with the current month.''

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 rule would suspend certain provisions of the Central

Arizona order for an indefinite period beginning March 1, 1995. The

proposed suspension would remove the requirement that a cooperative

association that operates a manufacturing plant in the marketing area

must ship at least 50 percent of its milk supply during the current

month or the previous 12-month period ending with the current month to

other handlers' pool plants to maintain the pool status of its

manufacturing plant.

Currently the order permits a cooperative association's

manufacturing plant, located in the marketing area, to be a pool plant

if at least 50 percent of the producer milk of members of the

cooperative association is physically received at pool plants of other

handlers during the current month or the previous 12-month period

ending with the current month.

The proposed suspension of this shipping requirement was requested

by United Dairymen of Arizona (UDA), a cooperative association that

represents nearly all of the dairy farmers who supply the Central

Arizona market. UDA contends that the continued pool status of their

manufacturing plant is threatened by an increase in milk production

combined with a drop in Class I sales. UDA states that in 1994 its

member production increased 17 percent over the previous year. In 1994,

monthly deliveries to distributing plants also increased sufficiently

to ensure UDA a safe margin over the minimum 50 percent shipping

requirement to maintain pool status of its manufacturing plant.

According to UDA, the increase in distributing plant demand reflected a

significant increase in Class I sales in the Mexico market by Central

Arizona handlers. The recent collapse of the Mexican peso has curtailed

these sales and thus reduced handler requirements for bulk milk

deliveries from UDA. Absent a [[Page 7467]] suspension, UDA projects

that costly and inefficient movements of milk would have to be made to

maintain pool status of producers who have historically supplied the

market and to prevent disorderly marketing in the Central Arizona

marketing area.

Accordingly, it may be appropriate to suspend the aforesaid

provisions beginning March 1, 1995, for an indefinite period.

List of Subjects in 7 CFR Part 1131

Milk marketing orders.

The authority citation for 7 CFR Part 1131 continues to read as

follows:

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

Dated: February 2, 1995.

Lon Hatamiya,

Administrator.

[FR Doc. 95-3146 Filed 2-7-95; 8:45 am]

BILLING CODE 3410-02-M