Milk in the New York-New Jersey and Middle Atlantic Marketing Areas; Proposed Suspension of Certain Provisions of the Orders

SUMMARY: This document invites written comments on a proposal to

suspend a pooling provision of the New York-New Jersey order and a

provision in the Middle Atlantic order's base-excess plan. The proposal

was submitted on behalf of several handlers (cooperative and

proprietary) who market the milk of dairy farmers who are located in a

common supply area and who have milk pooled under both orders.

Proponents contend that this suspension would enable them to assemble

and transport milk of producers more efficiently.

DATES: Comments are due no later than April 12, 1996.

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, D.C. 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 orders regulating the handling of milk in the New

York-New Jersey and Middle Atlantic marketing areas is being considered

through September 30, 1996, beginning on May 1, 1996:

1. In Sec. 1002.14 of the New York-New Jersey order, paragraph (d);

and

2. In Sec. 1004.92(c)of the Middle Atlantic order, the words ``and

who held such status in all or part of the 2 months of August and

September and who otherwise was a producer only under this part for all

of the remaining August through December period''.

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 10th day

after publication of this notice in the Federal Register.

The comment period is limited to 10 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

This proposed action would suspend a pooling provision of the New

York-New Jersey (order 2) and a provision in the Middle Atlantic (Order

4) order's base-excess plan. The suspension would allow handlers

regulated under Order 2 and Order 4 to assemble and transport the milk

of dairy farmers more efficiently and thereby reduce costs. Suspension

of these provisions in the two orders would permit handlers to freely

shift the milk of individual dairy farmers between the two markets.

Proponents claim that this added flexibility would enable Order 2 and 4

handlers to furnish the fluid needs of bottling plants more

effectively. Handlers will be obligated to change the pooling status of

individual producers to achieve this efficiency, say the proponents.

Under the terms of Order 2, an individual dairy farmer's milk may

not be pool milk during the months of December through June if any of

the dairy farmer's milk was producer milk under another Federal order

in the preceding months of July through November. Under the Order 4

base-excess plan provisions, a dairy farmer's milk deliveries to

handlers regulated under Orders 2 and 4 during August and September

would be used to compute the producer's Order 4 base only if the dairy

farmer's milk was pooled on Order 4 during the remaining months

(October-December) of such base-forming period. Proponents contend that

suspending these order provisions would allow milk to be shifted to

Order 2 from Order 4 and would also allow Order 2 milk to be shifted to

Order 4

[[Page 14515]]

without negative consequences to producers.

Suspension of the foregoing provisions on Order 2 and 4 producers

would facilitate more efficient milk assembly and transportation in a

geographic area characterized by a significant overlap of milksheds and

pool plants, proponents claim.

Several handlers (cooperative and proprietary) who market the milk

of dairy farmers under Orders 2 and 4 requested the suspension.

Proponents ask that the provisions be suspended for the months of May

through September 1996.

In support of the action, proponents stated that the State of

Pennsylvania has become a common milkshed for Orders 2 and 4. In June

1995 there were 3,836 Pennsylvania dairy farmers pooled on Order 2 and

3,717 Pennsylvania producers pooled on Order 4. These dairy farmers

represented 37 percent of the total producers on Order 2 and 73 percent

of the total producers on Order 4. They produced 27 percent of the

Order 2 pool milk and 67 percent of the Order 4 producer receipts.

There is significant overlap of producers supplying the two markets in

the Pennsylvania counties of Lancaster, Lebanon, Chester, and Berks,

proponents stated.

Proponents also indicated in their request that a large percentage

of the milk that is picked up in the common supply area of Pennsylvania

is delivered to Order 4 fluid milk plants located at Wawa, Sunbury and

Fort Washington, Pennsylvania and Florence, New Jersey. Some of the

milk produced in this same area is delivered to the Order 2 pool plants

located at Lansdale and Reading.

Two proponent cooperatives (Atlantic Dairy Cooperative and Milk

Marketing, Inc.) and a proprietary handler, (Dietrich's Milk Products)

also a proponent of the suspension, have made plans to combine their

milk routes in Pennsylvania to assemble and haul the milk from farms

that are most advantageously located to plants where the milk is needed

for processing. The commingling of the milk supply of these three

handlers is scheduled to begin on May 1, 1996, which is the first month

the suspension is to be effective.

Accordingly, it may be appropriate to suspend the aforesaid

provisions from May 1, 1996 through September 30, 1996.

List of Subjects in 7 CFR Parts 1002 and 1004

Milk marketing orders.

The authority citation for 7 CFR Parts 1002 and 1004 continues to

read as follows:

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

Dated: March 27, 1996.

Kenneth C. Clayton,

Acting Administrator.

[FR Doc. 96-7900 Filed 4-1-96; 8:45 am]

BILLING CODE 3410-02-P