Milk in the Central Arizona Marketing Area; Proposed Suspension of Certain Provisions of the Order

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1131

[DA-99-05]

Milk in the Central Arizona Marketing Area; Proposed Suspension

of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule; suspension.

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SUMMARY: This document invites written comments on a proposal to

suspend until completion of Federal Order Reform certain sections of

the Central Arizona Federal milk marketing order at the beginning of

the next marketing period. The proposed rule would reinstate a

suspension that expired on March 31, 1999, which eliminates the

requirement that a cooperative association that operates a

manufacturing plant ship at least 50 percent of its receipts to other

handler pool plants to maintain pool status of its manufacturing plant.

United Dairymen of Arizona (UDA), a cooperative association that

represents nearly all of the producers who supply milk to the Central

Arizona market, has requested continuation of the suspension. UDA

asserts that the suspension is necessary to prevent the uneconomical

and inefficient movements of milk.

DATES: Comments must be submitted on or before July 22, 1999.

ADDRESSES: Comments (two copies) should be filed with 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. Reference should be given to

the title of action and docket number.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing

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

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

720-9368, 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 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 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 1999, the milk of 100 producers was pooled

on the Central Arizona milk order. Of these producers, 3 produced below

the 326,000-pound production guideline and are considered small

businesses. Of the total number of producers whose milk was pooled

during that month, 97 were members of UDA and 3 were independent

producers.

For March 1999, there were 5 handlers operating pool plants under

the Central Arizona milk order. Of these handlers, 2 are considered

small businesses.

This rule would lessen the regulatory impact of the order on

certain milk handlers 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.

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

Agricultural Marketing Agreement Act, the suspension of the following

provision of the order regulating the handling of milk in the Central

Arizona marketing area is being considered until completion of Federal

Order Reform:

In Sec. 1131.7, paragraph (c), the words ``50 percent or more of'',

``(including the skim milk and butterfat in fluid milk products

transferred from its own plant pursuant to this paragraph that is not

in excess of the skim milk and butterfat contained in member producer

milk actually received at such plant)'', and ``or the previous 12-month

period ending with the current month.''

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

about the proposed suspension should send

[[Page 38145]]

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 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 start of the next marketing period.

All written submissions made pursuant to this notice will be made

available for public inspection in Dairy Programs during regular

business hours (7 CFR 1.27(b)).

Statement of Consideration

The proposed rule would suspend certain provisions of the Central

Arizona order until completion of Federal Order Reform. The proposed

suspension would remove the requirement that a cooperative association

which operates a manufacturing plant in the marketing area must ship at

least 50 percent of its milk supply during the current month or the

previous 12-month period ending with the current month to other

handlers' pool plants to maintain the pool status of its manufacturing

plant.

The order permits a cooperative association's manufacturing plant,

located in the marketing area, to be a pool plant if at least 50

percent of the producer milk of members of the cooperative association

is physically received at pool plants of other handlers during the

current month or the previous 12-month period ending with the current

month.

Reinstatement of the suspension which expired on March 31, 1999,

was requested by United Dairymen of Arizona (UDA), a cooperative

association which represents nearly all of the dairy farmers who supply

the Central Arizona market. UDA contends that the pool status of their

manufacturing plant would be threatened if the suspension is not

reinstated. UDA states that the same marketing conditions that

warranted the suspension for the past four years still exist. UDA

maintains that members who increased their milk production to meet the

projected demands of fluid handlers for distribution into Mexico

continue to suffer the adverse impact of the collapse of the Mexican

peso. Absent a suspension, UDA projects that costly and inefficient

movements of milk would have to be made to maintain the pool status of

producers who have historically supplied the market and to prevent

disorderly marketing in the Central Arizona marketing area.

Accordingly, it may be appropriate to suspend the aforesaid

provisions at the beginning of the next marketing period until

completion of Federal Order Reform.

List of Subjects in 7 CFR Part 1131

Milk marketing orders.

The authority citation for 7 CFR Part 1131 continues to read as

follows:

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

Dated: July 9, 1999.

Richard M. McKee,

Deputy Administrator, Dairy Programs.

[FR Doc. 99-18051 Filed 7-14-99; 8:45 am]

BILLING CODE 3410-02-P