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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1137

[DA-97-02]

Milk in the Eastern Colorado Marketing Area; Proposed Suspension

or Termination of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed suspension or termination of rule.

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SUMMARY: This document invites written comments on a proposal to

suspend indefinitely or terminate part of a provision in the Eastern

Colorado milk order which specifies that a distributing plant disposing

of ten percent or more of its Grade A milk receipts, or 12,000 pounds

per day, whichever is less, as route disposition in the marketing area

be considered a fully regulated pool plant. This request was submitted

by Brown Swiss-Gillette Dairy, a handler operating a distributing plant

that is partially regulated under 3 Federal milk orders. The handler

contends that the action is necessary to assure equity among producers

and competitiveness among handlers.

DATES: Comments must be submitted on or before May 8, 1997.

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. Advance, unofficial copies

of such comments may be faxed to (202) 690-0552 or e-mailed to OFB--

FMMO--C[email protected]. Reference should be given to the title of

action and docket number.

FOR FURTHER INFORMATION CONTACT: Constance M. Brenner, Marketing

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

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

720-2357, e-mail address: connie m [email protected].

SUPPLEMENTARY INFORMATION: 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

[[Page 16738]]

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 January 1997, the milk of 426 producers was pooled

on the Eastern Colorado Federal milk order. Of these producers, 323

produced below the 326,000-pound production guideline and are

considered as small businesses. A majority of these producers produce

less than 100,000 pounds per month. Of the total number of producers

whose milk was pooled during that month, 6 were non-member producers

and 420 were members of either Mid-America Dairymen or Western Dairymen

Cooperative Inc. For January 1997, 322 cooperative members and one non-

member producer met the small business criterion.

For the month of January 1997, there were 10 handlers operating 11

plants pooled or regulated under the Eastern Colorado milk order. Of

these handlers, half have 500 or fewer employees and qualify as small

businesses.

Brown Swiss-Gillette Dairy (Gillette) receives its milk from Black

Hills Milk Producers Cooperative. During the month of January 1997, 55

of the 58 producers supplying milk to Black Hills Milk Producers

Cooperative would be considered small businesses.

This rule proposes to suspend or terminate part of a provision of

the Eastern Colorado marketing order which makes a distributing plant

disposing of ten percent or more of its Grade A receipts, or 12,000

pounds per day, whichever is less, as route disposition in a marketing

area a fully regulated plant. The proposal would lessen the regulatory

impact of the order on certain milk handlers and would not affect the

price received by dairy farmers in Eastern Colorado. Handlers in the

marketing area will continue to pay the minimum order prices to

producers.

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.

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

Agricultural Marketing Agreement Act, the suspension or termination of

the following provisions of the order regulating the handling of milk

in the Eastern Colorado marketing area is being considered for an

indefinite period:

In Sec. 1137.7(a)(2), the words ``, or 12,000 pounds per day,

whichever is less,''.

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

about the proposed suspension or termination 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 30th day after publication of this notice in the Federal

Register.

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 terminate or suspend indefinitely the

portion of the Eastern Colorado Federal milk order's pool distributing

plant definition that defines a plant with 12,000 pounds of route

disposition per day in the marketing area as a fully regulated pool

plant.

Pooling qualifications included in the Eastern Colorado order

define a pool distributing plant as any plant in which during the month

fluid milk products are processed or packaged and from which 10 percent

or more of such receipts, or 12,000 pounds per day, whichever is less,

are disposed of as route disposition in the marketing area.

Gillette requested the termination or suspension of the 12,000-

pound limitation, contending that the limitation is unreasonable when

considering the plant size which must be maintained in order for

Gillette to survive financially and also maintain its status as a

partially regulated plant. Gillette also states that the 12,000-pound

limitation is unreasonable when compared to the amount of packaged

products delivered in one truckload, which greatly exceeds this

limitation. Gillette states that termination or suspension will assure

equity among producers and competitiveness among handlers.

As part of the Federal Order Reform process, all aspects of Federal

milk marketing orders are presently undergoing review, including the

definition of a pool plant. The Department is accepting and will

continue to accept comments from all interested parties throughout the

reform process regarding any modifications to order provisions.

Therefore, Gillette's proposal requesting an indefinite suspension or

termination should prevent Gillette from becoming fully regulated at

least until the conclusion of the reform period.

Accordingly, it may be appropriate to terminate or suspend

indefinitely the aforesaid provisions.

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

Dated: April 2, 1997.

Aggie Thompson,

Acting Director, Dairy Division.

[FR Doc. 97-8904 Filed 4-7-97; 8:45 am]

BILLING CODE 3410-02-P