Milk in the Southern Illinois-Eastern Missouri Marketing Area; Suspension of Certain Provisions of the Order

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1032

[DA-00-02]

Milk in the Southern Illinois-Eastern Missouri Marketing Area;

Suspension of Certain Provisions of the Order

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule; suspension.

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SUMMARY: This document suspends certain sections of the Southern

Illinois-Eastern Missouri Federal milk marketing order (Order 32). The

suspension removes a portion of the pool supply plant definition of

Order 32. The action was requested by Prairie Farms Dairy, Inc.

(Prairie Farms), and is necessary to prevent inefficient movements of

milk and to ensure that producers historically associated with Order 32

will continue to have their milk priced and pooled under the order.

EFFECTIVE DATE: December 1, 1999, through December 31, 1999.

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 [email protected].

SUPPLEMENTARY INFORMATION: Prior document in this proceeding:

Notice of Proposed Suspension: Issued November 23, 1999; published

December 1, 1999 (64 FR 67201).

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.

During August 1999, 1,312 dairy farmers were producers under Order

32. Of these producers, 1,277 producers (i.e., 97%) were considered

small businesses. For the same month, 10 handlers were pooled under

Order 32, of which three were considered small businesses.

The supply plant shipping standard is designed to ensure that the

market's fluid needs will be met. The suspension will allow a supply

plant operated by a cooperative association that delivered milk to

Order 32 pool distributing plants during each of the months of

September 1998 through August 1999 to meet the Order's pool supply

plant standard by shipping at least 25 percent of its milk to pool

distributing plants during the month of December 1999.

Marketing conditions in Order 32 indicate that there should be a

sufficient amount of local milk available during the requested

suspension period to supply the fluid needs of the market. The

suspension should reduce or eliminate the need to make uneconomical and

inefficient movements of milk simply to meet the Order's supply plant

shipping standard. Thus, 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 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 Southern Illinois-Eastern Missouri

marketing area.

Statement of Consideration

This rule suspends a portion of the pool supply plant definition of

the Southern Illinois-Eastern Missouri Federal milk marketing order for

the month of December 1999. The action allows a plant operated by a

cooperative association to qualify as a pool supply plant by shipping

at least 25 percent of its milk to pool distributing plants during

December 1999 if such plant delivered milk to Order 32 pool

distributing plants during each of the immediately preceding months of

September 1998 through August 1999. Without the suspension, such plants

would have to meet the minimum 25 percent pool supply plant standard

and at least 75 percent of the total producer milk marketed in that 12-

month period would have to have been delivered or

[[Page 70986]]

physically received at pool distributing plants to qualify as a pool

supply plant.

In Prairie Farms' letter requesting the suspension, the cooperative

indicates that they currently operate processing plants in Carlinville,

Olney, and Quincy, Illinois, and a multi-product plant in Granite City,

Illinois, which are all regulated under the Southern Illinois-Eastern

Missouri order. Prairie Farms notes that, from fiscal year 1998 to

fiscal year 1999, milk processed at their Order 32 plants was

approximately 6 percent higher and milk production of their member

producers also increased about 8 percent. Based on current market

trends and experiences in prior years, the cooperative expects an

increase in milk production from its member producers during December

1999. Accordingly, it anticipates having a problem pooling all of its

member producers' milk and the milk of its suppliers during the

proposed suspension period.

Prairie Farms states that the suspension would provide some relief

for December 1999 and prevent large amounts of milk from being

disassociated with the order. The cooperative contends that the action

is necessary to prevent inefficient movements of milk and to ensure

that producers historically associated with Order 32 will continue to

have their milk priced and pooled under the order. The cooperative

points out that a portion of the supply plant provision was suspended

in December 1994 and January 1995 for virtually the same reasons.

A notice of proposed rulemaking was published in the Federal

Register on December 1, 1999 (64 FR 67201), concerning the proposed

suspension. Interested persons were afforded an opportunity to file

written data, views and arguments thereon. One comment letter, from

Land O'Lakes, Inc., was received. Land O'Lakes, stated that it

supported the proposed suspension and that their ability to keep their

milk pooled under the Southern Illinois order would be jeopardized

without it. No comments were received in opposition to the suspension.

The letter from Prairie Farms requesting this suspension requested

a 2-month suspension period, from December 1999 through January 2000.

This 2-month suspension period was supported in the data, views, and

comments submitted by Prairie Farms and Land O'Lakes. However, on

December 8, 1999, the Department issued an order implementing 11 new

consolidated Federal orders on January 1, 2000. Accordingly, there is

no reason to suspend provisions from the Southern Illinois-Eastern

Missouri order for the month of January 2000 because that order will

cease to exist on January 1, 2000.

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 Order 32 marketing area will continue to benefit

from pooling and pricing under the order. With the suspension, Order 32

supply plants will still be required to serve the Class I needs of the

market. However, the suspension should reduce or eliminate the need to

make expensive and inefficient movements of milk simply to meet the

Order's supply plant shipping standard.

After consideration of all relevant material, including the

proposal in the notice, and other available information, it is hereby

found and determined that for the period of December 1, 1999, through

December 31, 1999, the following provision of the order does not tend

to effectuate the declared policy of the Act:

In Sec. 1032.7(b), the words ``and 75 percent of the total producer

milk marketed in that 12-month period by such cooperative association

was delivered'' and the words ``and physically received at''.

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 in support of the

action; none were received in opposition to it.

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 1032

Milk marketing orders.

For the reasons set forth in the preamble, 7 CFR part 1032 is

amended as follows:

PART 1032--MILK IN THE SOUTHERN ILLINOIS-EASTERN MISSOURI MARKETING

AREA

1. The authority citation for 7 CFR part 1032 continues to read as

follows:

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

Sec. 1032.7 [Suspended in part]

2. In Sec. 1032.7 paragraph (b), the words ``and at least 75

percent of the total producer milk marketed in that 12-month period by

such cooperative association was delivered'' and the words ``and

physically received at'' are suspended effective December 1, 1999,

through December 31, 1999.

Dated: December 14, 1999.

Richard M. McKee,

Deputy Administrator, Dairy Programs.

[FR Doc. 99-32905 Filed 12-17-99; 8:45 am]

BILLING CODE 3410-02-P