[Federal Register Volume 62, Number 94 (Thursday, May 15, 1997)]
[Rules and Regulations]
[Pages 26735-26736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12709]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 62, No. 94 / Thursday, May 15, 1997 / Rules
and Regulations
[[Page 26735]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1131
[DA-97-01]
Milk in the Central Arizona 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 continues to suspend certain provisions of the
Central Arizona Federal milk marketing order. The continued suspension
eliminates 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.
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.
EFFECTIVE DATE: April 1, 1997 through March 31, 1999.
FOR FURTHER INFORMATION CONTACT: Clifford M. Carman, Marketing
Specialist, USDA/AMS/Dairy Division, Order Formulation Branch, Room
2971, South Building, P.O. Box 96456, Washington, DC 20090-6456,
(202)720-9368, e-mail address Clifford__M__Carman@usda.gov.
SUPPLEMENTARY INFORMATION: Prior document in this proceeding:
Notice of Proposed Suspension: Issued February 24, 1997; published
March 3, 1997 (62 FR 9381).
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. The $500,000 per year criterion for dairy farmers 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. With respect to 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 August 1996, the milk of 102 producers was pooled
on the Central Arizona milk order. Of these producers, 6 produced below
the 326,000-pound production guideline and are considered as small
businesses. Of the total number of producers whose milk was pooled
during that month, 99 were members of United Dairymen of Arizona and 3
were independent producers.
For August 1996, there were 5 handlers operating pool plants under
the Central Arizona milk order. Of these handlers, 2 are considered as
small businesses.
This rule proposes to 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 continually in
effect since April 1995.
Preliminary Statement
Notice of proposed rulemaking was published in the Federal Register
on March 3, 1997 (62 FR 9381) 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 opposing the proposed suspension was received from a dairy
farmer.
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 for the months of April
1, 1997, through March 31, 1999, the following provision of the order
does 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 26736]]
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
This rule continues to suspend certain provisions of the Central
Arizona order for the months of April 1, 1997, through March 31, 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.
Continuation of the current suspension of this shipping requirement
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 continued pool status
of their manufacturing plant is threatened if the suspension is not
continued. UDA contends that the same marketing conditions that
warranted the suspension the last two 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.
The commenter opposing the continuing suspension contends that the
expanded milk production was not for projected demands of fluid
handlers but rather for projected cheese demand. The comment points out
that the suspension will lower the blend price as more milk will be
pooled with the suspension than without it.
During each of the past two years, there has been an increase in
total producer milk in the Central Arizona market. Meanwhile the total
handler requirements for bulk milk deliveries have decreased. However,
it should be noted that Class I utilization has been highly erratic
from month-to-month. For example during the first four months of 1996
fluid utilization on a daily average basis was up 2.6 percent, but for
all of 1996, Class I was down 0.7 percent. The decrease in total
handler deliveries and their erratic movements are likely a result of
changing Class I sales by Central Arizona handlers into Mexico because
of the devaluation of the Mexican peso. The situation has not
stabilized adequately to assure a reliable fluid milk market for
Central Arizona handlers.
Pool status of UDA's manufacturing plant would be jeopardized
absent continuation of the suspension. Without 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 Central Arizona marketing area.
UDA requested that the suspension be granted for an indefinite
period beginning in April 1997. After reviewing the marketing
conditions of the Central Arizona marketing area and their relationship
with the uncertain value of the Mexican peso, this suspension will be
for a two-year period.
Accordingly, it is appropriate to suspend the aforesaid provision
for the months of April 1, 1997, through March 31, 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, and 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.
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 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(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 for the months of
April 1, 1997, through March 31, 1999.
Dated: May 9, 1997.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 97-12709 Filed 5-14-97; 8:45 am]
BILLING CODE 3410-02-P
