Milk in the Eastern Colorado Marketing Area; Suspension of Certain Provisions of the Order

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1137

[DA-97-05]

Milk in the Eastern Colorado Marketing Area; Suspension of

Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; suspension.

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SUMMARY: This document suspends certain performance standards of the

Eastern Colorado Federal milk order. Mid-America Dairymen, Inc., a

cooperative association that supplies milk for the market's fluid

needs, requested the suspension. The suspension will make it easier for

handlers to qualify milk for pool status and will prevent uneconomic

milk movements that otherwise would be required to maintain pool status

for milk of producers who have been historically associated with the

market. The suspension will be effective through 1999.

EFFECTIVE DATE: The suspension to Sec. 1137.7 is effective from

September 1, 1997, through February 28, 1999. The suspensions to

Sec. 1137.12 are effective from September 1, 1997, through August 31,

1999.

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, 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 April 30, 1997; published May

6, 1997 (62 FR 24610).

The Department is issuing this final rule in conformance with

Executive Order 12866.

This final rule has been reviewed under Executive Order 12988,

Civil Justice Reform. This rule is not intended to have a retroactive

effect. This rule 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 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 the 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

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 415 producers was pooled

on the Eastern Colorado Federal milk order. Of these producers, 308

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

considered small businesses. During this same period, there were 10

handlers operating 11 pool plants under the Eastern Colorado order.

Five of these handlers would be considered small businesses.

This rule lessens the regulatory impact of the order on certain

milk handlers and tends to ensure that dairy farmers who have been

historically associated with this market will continue to have their

milk priced under the order and thereby receive the benefits that

accrue from such pricing. This suspension will not result in any

additional regulatory burden on handlers in the Eastern Colorado

marketing area.

Preliminary Statement

This order of suspension is issued pursuant to the provisions of

the Agricultural Marketing Agreement Act and of the order regulating

the handling of milk in the Eastern Colorado marketing area.

Notice of proposed rulemaking was published in the Federal Register

on May 6, 1997 (62 FR 24610) concerning a proposed suspension of

certain provisions of the order. Interested persons were afforded

opportunity to file written data, views and arguments thereon. Two

comments supporting the proposed suspension were received.

After consideration of all relevant material, including the

proposal in the notice, the comments received and other available

information, it is hereby found and determined that the following

provisions of the order do not tend to effectuate the declared policy

of the Act:

1. For the months of September 1, 1997, through February 28, 1999:

In the second sentence of Sec. 1137.7(b), the words ``plant which has

qualified as a'' and ``of March through August''; and

2. For the months of September 1, 1997, through August 31, 1999: In

the first sentence of Sec. 1137.12(a)(1), the words ``from whom at

least three

[[Page 35948]]

deliveries of milk are received during the month at a distributing pool

plant''; and in the second sentence, the words ``30 percent in the

months of March, April, May, June, July, and December and 20 percent in

other months of'', and the word ``distributing''.

Statement of Consideration

This rule suspends certain portions of the pool plant and producer

definitions of the Eastern Colorado order. The suspension will make it

easier for handlers to qualify milk for pooling under the order.

The 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 requested the

suspension to prevent the uneconomic and inefficient movement of milk

for the sole purpose of pooling the milk of producers who have been

historically associated with the Eastern Colorado order.

Mid-Am and Western Dairymen Cooperative, Inc. (WDCI) filed comments

in support of the suspension. Mid-Am asserts that they have made a

commitment to supply the fluid milk requirements of distributing plants

if the suspension request is granted. Without the suspension action, to

qualify certain of its milk for pooling, it would be necessary for the

cooperative to ship milk from distant farms to Denver-area bottling

plants. The distant milk would displace milk produced on nearby farms

that would then have to be shipped from the Denver area to

manufacturing plants located in outlying areas. WDCI further reiterates

the need for the suspension to assure continued pooling of producers

associated with the market and to prevent such uneconomic milk

movements.

Both Mid-Am and WDCI requested continuation of the suspension

beyond the time period noticed in the proposed suspension. Both

cooperatives expressed a desire to have the suspension extend until the

Federal order reform process under the Federal Agriculture Improvement

and Reform Act of 1996 is implemented.

For the months of September 1997 through February 1999, the

restriction on the months when automatic pool plant status applies for

supply plants will be removed. For the months of September 1997 through

August 1999, the touch-base requirement will not apply and the

diversion allowance for cooperatives will be raised.

These provisions have been suspended for several years to maintain

the pool status of producers who have historically supplied the fluid

needs of Eastern Colorado distributing plants. The marketing conditions

which justified the prior suspensions continue to exist. There are

ample supplies of locally produced milk that can be delivered directly

from farms to distributing plants to meet the market's fluid needs

without requiring shipments from supply plants.

Since the suspension has been granted on a continual basis since

1985, and the marketing conditions that originally warranted the

suspension continue to exist, it is found appropriate to extend the

suspension period from 1998 to 1999.

This suspension is found to be necessary for the purpose of

assuring that producers' milk will not have to be moved in an

uneconomic and inefficient manner to ensure that producers whose milk

has long been associated with the Eastern Colorado marketing area will

continue to benefit from pooling and pricing under the order.

List of Subjects in 7 CFR Part 1137

Milk marketing orders.

For the reasons set forth in the preamble 7 CFR Part 1137, is

amended as follows:

PART 1137--MILK IN THE EASTERN COLORADO MARKETING AREA

1. The authority citation for 7 CFR Part 1137 continues to read as

follows:

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

Sec. 1137.7 [Suspended in Part]

2. 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'' from September 1, 1997, through February 28, 1999.

Sec. 1137.12 [Suspended in part]

3. 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'' from September

1, 1997, through August 31, 1999.

4. In Sec. 1137.12(a)(1), the second sentence is amended by

suspending the words ``30 percent in the months of March, April, May,

June, July, and December and 20 percent in other months of'', and the

word ``distributing'' from September 1, 1997, through August 31, 1999.

Dated: June 27, 1997.

Michael V. Dunn,

Assistant Secretary, Marketing and Regulatory Programs.

[FR Doc. 97-17508 Filed 7-2-97; 8:45 am]

BILLING CODE 3410-02-P