Milk in the Eastern Colorado Marketing Area; Notice of Proposed Suspensions of Certain Provisions of the Order

SUMMARY: This document invites written comments on a proposal to

suspend certain performance standards of the Eastern Colorado Federal

milk order. The suspension was requested by Mid-America Dairymen Inc.,

a cooperative association that supplies milk forthe market's fluid

needs. The suspension was requested to prevent uneconomic milk

movements that otherwise would be required to maintain pool status for

milk of producers who have been historically associated with the order.

DATES: Comments are due no later than September 13, 1996.

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

Division, Order Formulation Branch, Room 2968, South Building, P.O. Box

96456, Washington, D.C. 20090-6456.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing

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

2968, South Building, P.O. Box 96456, Washington, D.C. 20090-6456,

(202) 720-9368.

SUPPLEMENTARY INFORMATION: The Department is issuing this proposed rule

in conformancewith Executive Order 12866.

This proposed revision of rules has been reviewed under Executive

Order 12988, Civil Justice Reform. This action is not intended to have

retroactive effect. If adopted, this proposedaction will not preempt

any state or local laws, regulations, or policies, unless they present

an irreconcilable conflict with this rule.

The Agricultural Marketing Agreement Act of 1937, as amended (7

U.S.C. 601-674), provides that administrative proceedings mustbe

exhausted before parties may file suit in court. Undersection

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 inconnection with the order is not in

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

exempted from theorder. 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 billin equity is

filed not later than 20 days after date of the entry of the ruling.

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

Agricultural Marketing Agreement Act of 1937, as amended, the following

sections of the order regulating the handling of milk in the Eastern

Colorado marketing area are being considered:

1. For the months of September 1, 1996, through February 28, 1997:

In Sec. 1137.7(b), the second sentence is amended by suspending the

words ``plant which has qualified as a'' and ``of March through

August''; and

2. For the months of September 1, 1996, through August 31, 1997: In

Sec. 1137.12(a)(1), the first sentence is amended by suspending the

words ``from whom at least three deliveries of milk are received during

the month at a distributing pool plant''; and in the second sentence

``30 percent in the months of March, April, May, June, July, and

December and 20 percent in other months of'', and the word

``distributing''.

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

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

USDA/AMS/Dairy Division, Order Formulation Branch, Room 2968, South

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

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

period is limited to seven 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)).

Small Business Consideration

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 Agricultural Marketing Service has

certified that this action would not have asignificant economic impact

on a substantial number of small entities. Such action would lessen the

regulatory impact of theorder 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 Regulatory Flexibility Act seeks to ensure that, within the

statutory authority of a program, the regulatory and informational

requirements are tailored to the size and nature of small businesses.

For the purpose of the Act, a dairy farm is 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 purpose of determining which dairy farms are small businesses,

the $500,000 per year criterion was divided by 12, then by the uniform

price, to arrive at a 300,000 pounds-per-month limit for ``small''

dairy farmers.

For the month of June 1996, 429 dairy farmers were producers under

the Eastern Colorado milk order. Of these, all but 115 would be

considered small businesses, having less than 300,000 pounds of

marketings for the month. Of the dairy farmers in the small business

category, 181 marketed less than 100,000 pounds of milk, 105 marketed

between 100,000 and 200,000 pounds, and 28 marketed between 200,000 and

300,000 pounds of milk during June.

There were 10 handlers operating 11 plants for the month of June

1996, pooled, or regulated, under the Eastern Colorado order. The

individual plants, for the most part, would meet the SBA definition of

a small business, having

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less than 500 employees. However, most of these plants are part of

larger businesses that operate multiple plants and meet the definition

of large entities on that basis.

The proposed rule would suspend certain portions of the pool plant

and producer definitions of the Eastern Colorado order. The proposed

suspension would make it easier for handlers to qualify milk for

pooling under the order and tend to ensure that dairy farmers would

continue to have their milk priced under theorder and thereby receive

the benefits that accrue from such pricing.

Proposed Suspension--Eastern Colorado--DA-96-13

Interested parties are invited to submit comments on the probable

regulatory and informational impact of this proposed rule on small

businesses. Also, parties may suggest modifications of this proposal

for the purpose of tailoring their applicability to small businesses.

Statement of Consideration

The proposed suspension was requested by Mid-America Dairymen, Inc.

(Mid-Am), a cooperative association that has pooled milk of dairy

farmers on the Eastern Colorado order for several years. Mid-Am has

requested the suspension to prevent the uneconomic and inefficient

movement of milk for the sole purpose of pooling the milk of producers

historically associated with the Eastern Colorado order.

Mid-Am requests for the months of September 1996 through February

1997 the removal of the restriction on the months when automatic pool

plant status applies for supply plants. Mid-Am also proposes that, for

the months of September 1996 through August 1997, the touch-base

requirement not apply and the diversion allowance for cooperatives be

raised.

These provisions have been suspended previously in order to

maintain the pool status of producers who have historically supplied

the fluid needs of Eastern Colorado distributing plants. Mid-Am states

that the marketing conditions that justified the prior suspensions

continue to exist. Mid-Am asserts that they have made a commitment to

meet the fluid requirements of fluid distributing plants if the

suspension request is granted. Without the suspension, Mid-Am contends

that it will be necessary to ship milk from distant farms to Denver-

area bottling plants to qualify milk for pooling. The distant milk will

displace locally-produced milk that would then have to be shipped from

the Denver area to manufacturing plants located in outlying areas.

In addition, Mid-Am maintains that ample supplies of locally

produced milk that can be delivered directly to distributing plants

will be available to meet the market's fluid needs without requiring

shipments from supply plants. Mid-Am also claims that neither the

elimination of the touch-base requirement for producers nor the

increase in the amount of milk that a cooperative can divert to nonpool

plants should jeopardize the needs of the market's fluid processors.

In view of the foregoing, it may be appropriate to suspend the

aforesaid portion of the pool plant and producer definitions of the

Eastern Colorado order for the time periods stated.

List of Subjects in 7 CFR Part 1137

Milk marketing orders.

The authority citation for 7 CFR part 1137 continues to read as

follows:

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

674.

Dated: August 30, 1996.

Kenneth C. Clayton,

Acting Administrator.

[FR Doc. 96-22787 Filed 9-5-96; 8:45 am]

BILLING CODE 3410-02-P