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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1079

[DA-99-02]

Milk in the Iowa Marketing Area; Proposed Revision of Supply

Plant Shipping Percentage

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed 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 20 percent to 10 percent for the months of April

through August 1999. The action was requested by Beatrice Cheese, Inc.,

a proprietary manufacturer of dairy products in Fredericksburg, Iowa.

The proponent contends that the action would allow the milk of dairymen

who historically have supplied the market to continue to be pooled

under the Federal order and is needed to prevent uneconomic milk

movements.

DATES: Comments must be submitted on or before April 26, 1999.

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 February 1999, 3,788 dairy farmers were producers

under the Iowa order. Of these, 3,714 producers (i.e., 98 percent) were

considered small businesses, having monthly milk production under

326,000 pounds. A further breakdown of the monthly milk production of

the producers on the order during February 1999 was as follows: 2,804

produced less than 100,000 pounds of milk; 776 produced between 100,000

and 200,000; 134 produced between 200,000 and 326,000; and 74 produced

over 326,000 pounds. During the same month, 11 handlers were pooled

under the order. Five were considered small businesses.

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 April through August 1999 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 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 order regulating the handling of

milk in the Iowa marketing area is being considered for the months of

April through August 1999.

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

about the proposed revision should send two

[[Page 19072]]

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 April 26, 1999. 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 and include April 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 20 percent to 10

percent, for the period April 1, 1999, through August 31, 1999.

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 April through August

1999. The handler's request states that this decrease is warranted due

to the fact that current raw milk supplies available for fluid use from

outside of Iowa's traditional procurement area exceed the needs of the

fluid milk plants in Federal Order 79 and that these available supplies

have replaced milk shipped to distributing plants by Beatrice. Beatrice

states that if the pool supply shipping percentages remain unchanged,

the milk of dairymen who historically have supplied the Iowa market

will not be able to continue to be pooled under the Federal Order, and

Beatrice will be forced to move milk uneconomically.

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

necessary to decrease the shipping percentage requirements for pool

supply plants as proposed to provide for the efficient and economic

marketing of milk during the months of April through August 1999.

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: April 14, 1999.

Richard M. McKee,

Deputy Administrator, Dairy Programs.

[FR Doc. 99-9850 Filed 4-16-99; 8:45 am]

BILLING CODE 3410-02-P