[Federal Register Volume 64, Number 217 (Wednesday, November 10, 1999)]
[Rules and Regulations]
[Pages 61201-61204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29318]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1131 and 1138
[DA-99-05 and DA-99-09]
Milk in the Central Arizona and New Mexico-West Texas Marketing
Areas; Suspension of Certain Provisions of the Orders
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments; suspension.
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SUMMARY: This document suspends certain provisions of the Central
Arizona (Order 131) and New Mexico-West Texas (Order 138) Federal milk
marketing orders from the day after publication in the Federal Register
until implementation of Federal order reform.
The suspensions have been in effect for both orders for periods
beginning in 1995 in Central Arizona and 1993 in New Mexico-West Texas
at the request of cooperatives representing nearly all of the producers
in Order 131 and most
[[Page 61202]]
of the producers in Order 138, and were expected to become unnecessary
under the provisions of the final rule establishing the Arizona-Las
Vegas and Southwest orders under Federal Milk Order Reform.
DATES: Effective date: November 11, 1999.
COMMENTS: Comments are due by January 10, 2000.
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--
Comments@usda.gov. Reference should be made to the title of the 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 clifford.carman@usda.gov.
SUPPLEMENTARY INFORMATION: Prior documents in this proceeding:
Notice of Proposed Suspension (Central Arizona): Issued July 9, 1999;
published July 15, 1999 (64 FR 38144).
Suspension of Certain Provisions (Central Arizona): Issued September
13, 1999; published September 20, 1999 (64 FR 50748).
The Department is issuing this interim final rule in conformance
with Executive Order 12866.
This interim 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 September 1999, 101 dairy farmers were producers
under Order 131. Of these producers seven were considered small
businesses. For the same month, five handlers were regulated under
Order 131. Three of these handlers were considered small businesses.
Eighty-nine dairy farmers were producers under Order 138 for the
month of May 1999. Twenty-six of these producers were considered small
businesses. Three handlers operating five pool plants were regulated
under Order 138 during the month of May 1999. One of these handlers was
considered a small business.
For the Central Arizona order, this interim final rule suspends the
requirement that a cooperative association ship at least 50 percent of
its receipts to other handler's pool plants to maintain the 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 Order 131 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 provision
has been suspended for much of the time since April 1995.
For Order 138, this rule suspends: (1) The requirement that milk
diverted to a nonpool plant be considered a receipt at the distributing
plant from which it was diverted; (2) the requirement that a
cooperative association deliver at least 35 percent of its milk to pool
distributing plants in order to pool a plant that the cooperative
operates which is located in the marketing area and is neither a
distributing plant nor a supply plant; (3) the requirement that a
producer deliver one day's production to a pool plant during the months
of September through January to be eligible to be diverted to a nonpool
plant; (4) the provision that limits a cooperative's diversions to
nonpool plants to an amount equal to the milk it caused to be delivered
to and physically received at pool plants during the month; and (5) the
provision that excludes from the pool, milk diverted from a pool plant
to the extent that the diverted milk would cause the plant to lose its
status as a pool plant. 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 Order 138 and thereby
receive the benefits that accrue from such pricing. This rule will not
result in any additional regulatory burden on handlers in the New
Mexico-West Texas marketing area since most of the provisions suspended
by this action have been suspended since 1993.
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 and New Mexico-West Texas
marketing areas.
After consideration of all relevant material, it is hereby found
and determined that from the day after publication of this rule in the
Federal Register until implementation of Federal order reform, the
following provisions of the Central Arizona and New Mexico-West Texas
orders do not tend to effectuate the declared policy of the Act:
1. In Sec. 1131.7(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
[[Page 61203]]
actually received at such plant)'', and ``or the previous 12-month
period ending with the current month''.
2. In Sec. 1138.7(a)(1), the words ``including producer milk
diverted from the plant''.
3. In Sec. 1138.7(c) introductory text, the words ``35 percent or
more of the producer''.
4. In Sec. 1138.13, paragraphs (d)(1), (2), and (5).
All persons who want to submit written data, views or arguments
about the proposed suspension should send two copies of their views to
USDA/AMS/Dairy Programs, Order Formulation Branch, Room 2971, South
Building, PO Box 96456, Washington, DC 20090-6456, by the 60th day
after publication of this notice in the Federal Register.
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
This rule continues suspension of certain provisions of the Central
Arizona and New Mexico-West Texas Federal milk orders until
implementation of Federal order reform. For Central Arizona, the
suspension removes the requirement that a cooperative association
operating a manufacturing plant in the marketing area must ship at
least 50 percent of its milk supply during the current month or for the
12-month period ending with the current month to other handlers' pool
plants to maintain the pool status of its manufacturing plant.
Suspension of the requirement for an indefinite period (until
implementation of Federal order reform) is necessary because
implementation of the 11 consolidated orders under Federal order reform
has been delayed by judicial action. The Final Rule containing the 11
consolidated orders was issued August 23, 1999, and published September
1, 1999 (64 FR 47898). A Delay of Effective Date rule was issued
September 30, 1999, and published October 5, 1999 (64 FR 53885).
Continued suspension of the Order 131 provision 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 stated that the pool status of its manufacturing
plant is threatened if the suspension is not reinstated, and that the
same marketing conditions that have warranted the suspension of the
provision during the past four years still exist. UDA maintained that
members who increased their milk production to meet projected demand of
fluid handlers for distribution into Mexico continue to suffer the
adverse impact of the collapse of the Mexican peso. Absent continuation
of the 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 current marketing conditions in the Central Arizona
marketing area indicates that, absent continuation of 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 until
implementation of Federal order reform 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.
For Order 138, the suspension removes the requirement that milk
diverted to a nonpool plant be considered a receipt at the distributing
plant from which it was diverted, that a cooperative must deliver at
least 35 percent of its milk to pool distributing plants in order to
pool a plant that the cooperative operates which is located in the
marketing area and is neither a distributing plant nor a supply plant,
that a producer must deliver one day's production to a pool plant
during the months of September through January to be eligible to be
diverted to a nonpool plant, that a cooperative association's
diversions to nonpool plants be limited to an amount equal to the milk
the cooperative causes to be delivered to and physically received at
pool plants during the month, and that milk diverted from a pool plant
be excluded from pool milk to the extent that it would cause the plant
to lose its status as a pool plant.
Continued suspension of the New Mexico-West Texas provisions was
requested by Dairy Farmers of America, Inc. (DFA), a cooperative
association that represents the largest volume of milk marketed under
Order 138. The cooperative stated that marketing conditions have not
changed since the provisions were suspended in 1993 and therefore the
suspension should be continued until implementation of the consolidated
Southwest order under Federal order reform since the provisions of the
consolidated order reflect current industry needs. Implementation of
that final rule has been delayed by judicial action, and continued
suspension of the Order 138 provisions is necessary to prevent
uneconomical and inefficient movements of milk and to ensure that
producers historically associated with the markets will continue to
have their milk pooled under the order.
A review of current marketing conditions in the New Mexico-West
Texas marketing area indicates that, absent continuation of the
suspension, 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 New
Mexico-West Texas 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 New Mexico-West
Texas marketing area will continue to benefit from pooling and pricing
under the order. In addition, suspension of these provisions until
implementation of Federal order reform 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.
This action imposes no additional reporting or recordkeeping
requirements on either small or large handlers. As with all Federal
marketing order programs, reports and forms are periodically reviewed
to reduce information and reporting requirements and duplication.
The Department has not identified any relevant Federal rules that
duplicate, overlap, or conflict with this rule.
Accordingly, it is appropriate to suspend the aforesaid provisions
from October 1, 1999, until implementation of the consolidated Arizona-
Las Vegas
[[Page 61204]]
and Southwest Federal milk orders under Federal order reform.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because:
(a) The suspension is necessary to reflect current marketing
conditions and to assure orderly marketing conditions in the marketing
areas, 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) This interim final rule provides a 60-day comment period, and
all comments will be considered prior to finalization of this rule.
List of Subjects in 7 CFR Parts 1131 and 1138
Milk marketing orders.
For the reasons set forth in the preamble, 7 CFR Parts 1131 and
1138 are amended as follows for the period of one day following
publication of this rule in the Federal Register until implementation
of Federal order reform:
1. The authority citation for 7 CFR Parts 1131 and 1138 continues
to read as follows:
Authority: 7 U.S.C. 601-674.
PART 1131--MILK IN THE CENTRAL ARIZONA MARKETING AREA
Sec. 1131.7 [Suspended in part]
2. In Sec. 1131.7(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'' are suspended.
PART 1138--MILK IN THE NEW MEXICO-WEST TEXAS MARKETING AREA
Sec. 1138.7 [Suspended in part]
3. In Sec. 1138.7(a)(1), the words ``including producer milk
diverted from the plant'' are suspended;
4. In Sec. 1138.7(c) introductory text, the words ``35 percent or
more of the producer'' are suspended.
Sec. 1138.13 [Suspended in part]
5. In Sec. 1138.13, paragraphs (d)(1), (2), and (5) are suspended.
Dated: November 3, 1999.
F. Tracy Schonrock,
Acting Deputy Administrator, Dairy Programs.
[FR Doc. 99-29318 Filed 11-9-99; 8:45 am]
BILLING CODE 3410-02-P
