Milk in the Central Arizona Marketing Area; 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; Suspension of Certain

Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; suspension.

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

SUMMARY: This document suspends certain provisions of the Central

Arizona Federal milk marketing order (Order 131) from the day after

publication in the Federal Register until the implementation of Federal

order reform on October 1, 1999. The suspension eliminates the

requirement that a cooperative association ship at least 50 percent of

its receipts to other handler pool plants to maintain pool plant status

of a manufacturing plant operated by the cooperative. United Dairymen

of Arizona, a cooperative association that represents nearly all of the

producers who supply milk to the market, requested the suspension. The

suspension is necessary to prevent uneconomical and inefficient

movements of milk and to ensure that producers historically associated

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

131.

EFFECTIVE DATE: September 21, 1999, through September 30, 1999.

FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing

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

2971, South Building, PO Box 96456, Washington, DC 20090-6456,

(202)720-9368, e-mail address [email protected].

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:

Notice of Proposed Suspension: Issued July 9, 1999; published July

15, 1999 (64 FR 38144).

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 1999, 100 dairy farmers were producers under

Order 131. Of these producers, three were considered small businesses.

For the same month, there were five regulated handlers under Order 131.

Two of these handlers were considered small businesses.

This final rule will suspend the requirement that a cooperative

association ship at least 50 percent of its receipts to other handler

pool plants to maintain pool status of a manufacturing plant operated

by the cooperative. This rule lessens the regulatory impact of the

order on certain milk handlers and tends to ensure that dairy farmers

will continue to have their milk priced under the order and thereby

receive the benefits that accrue from such pricing. This rule will not

result in any additional regulatory burden on handlers in the Central

Arizona marketing area since this suspension has been in effect since

April 1995.

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 Central Arizona milk marketing area.

Notice of proposed rulemaking was published in the Federal Register

on July 15, 1999 (64 FR 38144), concerning a proposed suspension of

certain provisions of the order. Interested persons were afforded

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

comment supporting the proposed suspension was received from United

Dairymen of Arizona.

After consideration of all relevant material, including the

proposal in the notice, the comment received, and other available

information, it is hereby found and determined that from the day after

publication of this rule in the Federal Register through September 30,

1999, the following provisions of the order do not tend to effectuate

the declared policy of the Act:

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

[[Page 50749]]

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.''

Statement of Consideration

The rule suspends certain provisions of the Central Arizona Federal

milk order through September 30, 1999. Implementation of Federal order

reform begins on October 1, 1999. The suspension removes the

requirement that a cooperative association that 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 that represents nearly all of the dairy farmers who supply

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

manufacturing plant is 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.

A review of the current marketing conditions indicates that, absent

the suspension, the pool plant status of UDA's manufacturing plant will

not be maintained. Thus, costly and inefficient movements of milk would

have to be made to maintain pool status of producers who have

historically supplied the market and to prevent disorderly marketing in

the Central Arizona marketing area. Therefore, the 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 assure

that producers whose milk has long been associated with the Central

Arizona marketing area will continue to benefit from pooling and

pricing under the order. In addition, suspension of these provisions

through September 30, 1999, will ensure that disorderly marketing

conditions that may result from these provisions do not negatively

impact producers in the future as these provisions have been modified

in the Federal order reform regulatory language.

Accordingly, it is appropriate to suspend the aforesaid provisions

from the day after publication of this rule in the Federal Register

through September 30, 1999.

It is hereby found and determined that thirty days' notice of the

effective date hereof is impractical, unnecessary and contrary to the

public interest in that:

(a) The suspension is necessary to reflect current marketing

conditions and to assure orderly marketing conditions in the marketing

area, in that such rule is necessary to permit the continued pooling of

the milk of dairy farmers who have historically supplied the market

without the need for making costly and inefficient movements of milk;

(b) This suspension does not require of persons affected

substantial or extensive preparation prior to the effective date; and

(c) Notice of proposed rulemaking was given interested parties and

they were afforded opportunity to file written data, views or arguments

concerning this suspension. One comment was received.

Therefore, good cause exists for making this order effective less

than 30 days from the date of publication in the Federal Register.

List of Subjects in 7 CFR Part 1131

Milk marketing orders.

For the reasons set forth in the preamble, 7 CFR part 1131 is

amended for the period of one day following publication of this rule in

the Federal Register through September 30, 1999, as follows:

PART 1131--MILK IN THE CENTRAL ARIZONA MARKETING AREA

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

follows:

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

Sec. 1131.7 [Suspended in part]

2. 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'' during the month'' are

suspended.

Dated: September 13, 1999.

Richard M. McKee

Deputy Administrator, Dairy Programs.

[FR Doc. 99-24436 Filed 9-17-99; 8:45 am]

BILLING CODE 3410-02-P