Milk in the Iowa Marketing Area; Proposed Temporary Revision of Pool Supply Plant Shipping Percentage

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1079

[DA-98-07]

Milk in the Iowa Marketing Area; Proposed Temporary Revision of

Pool Supply Plant Shipping Percentage

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed temporary revision of rule.

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SUMMARY: This document invites written comments on a proposal to reduce

the percentage of a supply plant's receipts that must be delivered to

fluid milk plants to qualify a supply plant for pooling under the Iowa

Federal milk order. The applicable percentage would be decreased by 10

percentage points, from 35 percent of plant receipts to 25 percent of

such receipts for the months of September through November 1998. The

action is requested by Beatrice Cheese, Inc., a proprietary

manufacturer of dairy products in Fredericksburg, Iowa. The proponent

contends that the action is needed to prevent uneconomic milk

movements.

DATES: Comments must be submitted on or before August 26, 1998.

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

Programs, 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 made to the title of action and

docket number.

FOR FURTHER INFORMATION CONTACT: Constance M. Brenner, Marketing

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

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

720-2357, e-mail address: [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 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

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 1998, 3,768 dairy farmers were producers

under the Iowa Order. Of these, all but 68 would be considered small

businesses, having under 326,000 pounds of production for the month. Of

the dairy farmers in the small business category, 2,682 produced under

100,000 pounds of milk, 876 produced between 100,000 and 200,000, and

142 produced between 200,000 and 326,000 pounds during March 1998.

Generally, the reports filed on behalf of the slightly more than 20

milk plants pooled, or regulated, under the Iowa Order in March 1998

were filed for establishments that would meet the SBA definition of a

small business on an individual basis, having less than 500 employees.

However, all but four of the milk handlers represented in the market

are part of larger businesses that operate multiple plants at which

their collective size exceeds the SBA definition of a small business

entity.

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.

The reduction of the required supply plant shipping percentage for

the months of September through November 1998 would allow the milk of

producers traditionally associated with the Iowa market to continue to

be pooled and priced under the order. The revision would lessen the

likelihood that more milk shipments to pool plants might be required

under the order than are actually needed to supply the fluid milk needs

of the market and would result in savings in hauling costs for handlers

and producers.

Notice of Proposed Revision and Opportunity to File Comments

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

Agricultural Marketing Agreement Act and the provisions of

Sec. 1079.7(b)(1) of the Iowa Federal milk order, the temporary

revision of certain provisions of the

[[Page 40069]]

order regulating the handling of milk in the Iowa marketing area is

being considered for September 1, 1998, through November 30, 1998.

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

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

USDA/AMS/Dairy Programs, 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. The filing

period is limited to 30 days because a longer period would not provide

the time needed to complete the required procedures and include

September in the temporary revision period.

All written submissions made pursuant to this notice will be made

available for public inspection in the Dairy Programs offices during

regular business hours (7 CFR 1.27(b)).

Statement of Consideration

The provision proposed to be revised is the percentage of a supply

plant's receipts required to be shipped to pool distributing plants

pursuant to Sec. 1079.7(b) of the Iowa Federal milk marketing order

(Order 79). As proposed, the percentage of a supply plant's receipts

that must be shipped to pool distributing plants (fluid milk plants) if

the supply plant is to be considered a pool plant would be decreased by

the maximum allowable 10 percentage points, from 35 percent to 25

percent for the period September 1, 1998, through November 30, 1998.

Section 1079.7(b)(1) of the Iowa milk marketing order allows the

Deputy Administrator, Dairy Programs, to reduce or increase a pool

supply plant's minimum shipping requirement by up to 10 percentage

points to prevent uneconomic milk shipments or to assure an adequate

supply of milk for fluid use.

Beatrice Cheese, Inc. (Beatrice), a proprietary manufacturer of

dairy products in Fredericksburg, Iowa, is regulated under Order 79 as

a pool supply plant. Beatrice requested that the shipping percentage be

reduced by 10 percentage points for the months of September through

November 1998. The handler's request states that this decrease is

warranted due to the fact that current raw milk supplies available for

fluid use exceed the needs of the fluid milk plants in Order 79.

Beatrice states that if the pool supply shipping percentages remain

unchanged, Beatrice will be forced to move milk uneconomically or

unfairly depool some milk produced by Iowa dairymen, denying them

participation in the Order 79 pool.

In view of the current supply and demand relationship, it may be

necessary to decrease the shipping percentage requirements for pool

supply plants to provide for the efficient and economic marketing of

milk during the period September 1, 1998, through November 30, 1998.

List of Subjects in 7 CFR Part 1079

Milk marketing orders.

The authority citation for 7 CFR part 1079 continues to read as

follows:

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

Dated: July 21, 1998.

Richard M. McKee,

Deputy Administrator, Dairy Programs.

[FR Doc. 98-19908 Filed 7-24-98; 8:45 am]

BILLING CODE 3410-02-P