Milk in the Southwest Plains Marketing Area; Proposed Suspension of Certain Provisions of the Order

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1106

[DA-98-08]

Milk in the Southwest Plains Marketing Area; Proposed Suspension

of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed suspension of rule.

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

SUMMARY: This document invites written comments on a proposal to

suspend a portion of the supply plant shipping standard and the touch-

base requirement of the Southwest Plains Federal milk marketing order

(Order 106) for the period of September 1998 through August 1999. The

action was requested by Kraft Foods, Inc. (Kraft), which contends the

suspension is necessary to prevent the uneconomical and inefficient

movement of milk and to ensure that producers historically associated

with the market will continue to have their milk pooled under Order

106.

DATES: Comments must be submitted on or before August 19, 1998.

ADDRESSES: Comments (two copies) should be filed with the USDA/AMS/

Dairy Programs, Order Formulation Branch, Room 2971, South Building,

P.O. Box 96456, Washington, DC 20090-6456. 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: Nicholas Memoli, Marketing Specialist,

USDA/AMS/Dairy Programs, Order Formulation Branch, Room 2971, South

Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1932, e-

mail address Nicholas__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 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 June 1998, 2,187 dairy farmers were producers

under Order 106. Of these producers, 2,138 producers (i.e., 98%) were

considered small businesses. For the same month, 16 handlers were

pooled under Order 106, of which, two were considered small businesses.

The supply plant shipping standard and the touch-base requirement

are designed to attract an adequate supply of milk to the market to

meet fluid needs. Kraft, the proponent of this proposal, anticipates

that there will be an adequate supply of milk available within the

general area to meet the needs to the Order 106 market and states

supplemental milk supplies will not be needed.

The proposal would allow a supply plant that has been associated

with the Southwest Plains market during the months of September 1997

through January 1998 to qualify as a pool plant without shipping any

milk to a pool distributing plant during the following months of

September 1998 through August 1999. The proposed action would also

suspend the requirement that producers touch-base at a pool

distributing plant with at least one day of production during the month

before their milk is eligible to be diverted to nonpool plants. Thus,

this rule would lessen the regulatory impact of the order on certain

milk handlers and would

[[Page 43126]]

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.

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

Agricultural Marketing Agreement Act, the suspension of the following

provisions of the order regulating the handling of milk in the

Southwest Plains marketing area is being considered for the months of

September 1, 1998, through August 31, 1999:

In Sec. 1106.6, the words ``during the month''.

In Sec. 1106.7(b)(1), beginning with the words ``of February

through August'' and continuing to the end of the paragraph.

In Sec. 1106.13, paragraph (d)(1) in its entirety.

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 Programs, Order Formulation Branch, Room 2971, South

Building, P.O. Box 96456, Washington, DC 20090-6456, by the 7th day

after publication of this notice in the Federal Register. The period

for filing comments is limited to 7 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 Programs during regular

business hours (7 CFR 1.27(b)).

Statement of Consideration

The proposed rule would suspend a portion of the supply plant

shipping standard and the touch-base requirement of the Southwest

Plains order for the period of September 1998 through August 1999. The

proposed suspension would allow a supply plant that has been associated

with the Southwest Plains order during the months of September 1997

through January 1998 to qualify as a pool plant without shipping any

milk to a pool distributing plant during the months of September 1998

through August 1999. Without the suspension, a supply plant would be

required to ship 50 percent of its producer receipts to pool

distributing plants during the months of September through January and

20 percent of its producer receipts to pool distributing plants during

the months of February through August to qualify as a pool plant under

the order.

The proposed rule would also suspend the requirement that producers

``touch-base'' at a pool plant with at least one day's production

during the month before their milk is eligible for diversion to a

nonpool plant. By suspending the touch-base provision, producer milk

would not be required to be delivered to pool plants before going to

unregulated manufacturing plants.

According to Kraft's letter requesting the suspension, supplemental

milk supplies will not be needed to meet the fluid needs of

distributing plants. Kraft anticipates that there will be an adequate

supply of direct-ship producer milk located in the general area of

distributing plants available to meet the Class I needs of the market.

The handler notes that the supply plant shipping provision and the

touch-base requirement have been suspended since 1993 and 1992,

respectively.

Kraft states there is no need to require producers located some

distance from pool distributing plants to touch-base when their milk

can more economically be diverted directly to manufacturing plants in

the production area. Thus, the handler contends the proposed suspension

is necessary to prevent the uneconomical and inefficient movement of

milk and to ensure producers historically associated with the Order 106

will continue to have their milk pooled under the order.

Accordingly, it may be appropriate to suspend the aforesaid

provisions from September 1, 1998 through August 31, 1999.

List of Subjects in 7 CFR Part 1106

Milk marketing orders.

The authority citation for 7 CFR Part 1106 continues to read as

follows:

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

Dated: August 6, 1998.

Richard M. McKee,

Deputy Administrator, Dairy Programs.

[FR Doc. 98-21579 Filed 8-11-98; 8:45 am]

BILLING CODE 3410-02-P