Milk in the Texas Marketing Area; Notice of Revised Proposed Suspension of Certain Provisions of the Order

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1126

[DA-97-06]

Milk in the Texas Marketing Area; Notice of Revised Proposed

Suspension of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule; revised suspension.

-----------------------------------------------------------------------

SUMMARY: This notice invites written comments on a revised proposed

suspension that would increase the diversion limitation applicable to

cooperatives from one-third to an amount equal to the amount of

producer milk the cooperative association delivered to pool plants

under the Texas order for the months of August 1997 through July 1999.

As originally noticed in a proposed suspension the diversion limitation

would be suspended completely. Associated Milk Producers, Inc., a

cooperative association that represents producers who supply milk to

the market and the proponent of the proposed suspension, requested

modification to the suspension of diversion limitation to achieve

orderly marketing conditions within the Texas marketing area. Written

comments are invited regarding this modification, as well as on the

other segments of the pool plant and producer milk definitions

previously noticed.

DATES: Comments are due no later than July 11, 1997.

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

Division, Order Formulation Branch, Room 2968, South Building, PO Box

96456, Washington, DC 20090-6456.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing

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

2968, South Building, PO Box 96456, Washington, DC 20090-6456, (202)

720-9368, e-mail address: Clifford__M__C[email protected].

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:

Notice of Proposed Suspension: Issued May 7, 1997; published May

13, 1997 (62 FR 26255).

The Department is issuing this proposed rule in conformance with

Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12988,

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 request

modification or exemption from such order by filing with the Secretary

a petition stating that the order, any provision of the order, or any

obligation imposed in connection with the order is not in accordance

with law. 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.

Small Business Consideration

In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et

seq.), the Agricultural Marketing Service has considered the economic

impact of this action on small entities and has certified that this

proposed rule will not have a significant economic impact on a

substantial number of small entities. For the purpose of the Regulatory

Flexibility Act, a dairy farm is considered 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 purposes of determining which dairy farms are

``small businesses,'' the $500,000 per year criterion was used to

establish a production guideline of 326,000 pounds per month. Although

this guideline does not factor in additional monies that may be

received by dairy producers, it should be an inclusive standard for

most ``small'' dairy farmers. For purposes of determining a handler's

size, if the plant is part of a larger company operating multiple

plants that collectively exceed the 500-employee limit, the plant will

be considered a large business even if the local plant has fewer than

500 employees.

For the month of March 1997, the milk of 1,805 producers was pooled

on the Texas Federal milk order. Of these producers, 1,350 producers

were below the 326,000-pound production guideline and are considered

small businesses. During this same period, there were 24 handlers

operating pool plants under the Texas order. Five of these handlers

would be considered small businesses.

This rule would lessen the regulatory impact of the order on

certain milk handlers by increasing diversion limitations applicable to

cooperatives 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.

Interested parties are invited to submit comments on the probable

regulatory and informational impact of this proposed rule on small

entities. Also, parties may suggest modifications of this proposal for

the purpose of tailoring their applicability to small businesses.

Preliminary Statement

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

the suspension of the following provisions of the order regulating the

handling of milk in the Texas marketing area are being considered for

the months of August 1, 1997, through July 31, 1999:

1. In Sec. 1126.7(d) introductory text, the words ``during the

months of February through July'' and the words ``under paragraph (b)

or (c) of this section''.

2. In Sec. 1126.7(e) introductory text, the words ``and 60 percent

or more of the producer milk of members of the cooperative association

(excluding such milk that is received at or diverted from pool plants

described in paragraphs (b), (c), and (d) of this section) is

physically received during the month in the form

[[Page 34677]]

of a bulk fluid milk product at pool plants described in paragraph (a)

of this section either directly from farms or by transfer from plants

of the cooperative association for which pool plant status under this

paragraph has been requested''.

3. In Sec. 1126.13(e)(1), the words ``and further, during each of

the months of September through January not less than 15 percent of the

milk of such dairy farmer is physically received as producer milk at a

pool plant''.

4. In Sec. 1126.13(e)(2), the words ``one-third of'' and the words

``(a), (b), (c), and (d)''.

5. In Sec. 1126.13(e)(3), the sentence ``The total quantity of milk

so diverted during the month shall not exceed one-third of the producer

milk physically received at such pool plant during the month that is

eligible to be diverted by the plant operator;''.

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

about the revised proposed suspension should send two copies to USDA/

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

Building, P.O. Box 96456, Washington, DC 20090-6456, by the 14th day

after publication of this notice in the Federal Register. Comments

filed in response to the proposed suspension will be considered and do

not need to be resubmitted unless amended due to the revision addressed

in this docket.

The period for filing comments is limited to 14 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 action revises the proposed suspension of Sec. 1126.13(e)(2)

as noticed in the May 13, 1997, Federal Register (62 FR 26255). The

proposed suspension requested the suspension of paragraph

Sec. 1126.13(e)(2) which would remove the diversion limitation

applicable to cooperative associations. The revised proposed suspension

of portions of Sec. 1126.13(e)(2) would increase the diversion

limitation applicable to cooperatives from one-third to an amount equal

to the amount of producer milk the cooperative association delivered to

pool plants.

Associated Milk Producers, Inc. (AMPI), a cooperative association

that represents a substantial number of dairy farmers who supply the

Texas market and the proponent of the proposed suspension of paragraph

Sec. 1126.13(e)(2), requested the modification. AMPI stated that the

modification is necessary to achieve orderly marketing conditions in

the Texas market. AMPI asserts that changes have occurred in the

marketplace caused by a continued increase in production accompanied by

a decrease in the number of dairy farms since the suspension was first

granted. AMPI believes that the revised proposed suspension will

maintain a balance of milk within the production area while allowing

reserve supplies to move to the most efficient alternative market. AMPI

contends that this will assure a more distinct association with the

Class I market and limit sharing in the uniform price by cooperative

associations that do not make milk available for fluid use.

Accordingly, it may be appropriate to suspend the aforesaid

provision from August 1, 1997, through July 31, 1999.

List of Subjects in 7 CFR Part 1126

Milk marketing orders.

The authority citation for 7 CFR Part 1126 continues to read as

follows:

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

Dated: June 23, 1997.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing Service.

[FR Doc. 97-16790 Filed 6-26-97; 8:45 am]

BILLING CODE 3410-02-P