[Federal Register Volume 60, Number 164 (Thursday, August 24, 1995)]
[Proposed Rules]
[Pages 43994-43995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20969]
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DEPARTMENT OF AGRICULTURE
7 CFR Part 1046
[DA-95-18]
Milk in the Louisville-Lexington-Evansville Marketing Area;
Termination of Proceeding on Proposed Suspension/Termination of Base-
Excess Plan
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Termination of proceeding of proposed suspension/termination of
rule.
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SUMMARY: This document terminates the proceeding that was initiated to
consider a proposal to suspend or terminate the base-excess plan of the
Louisville-Lexington-Evansville Federal milk marketing order effective
September 1, 1995.
FOR FURTHER INFORMATION CONTACT: Nicholas Memoli, Marketing Specialist,
USDA/AMS/Dairy Division, Order Formulation Branch, Room 2971, South
Building, P.O. Box 96456, Washington, DC 20090-6456, (202) 690-1932.
SUPPLEMENTARY INFORMATION: Prior document in this proceeding: Proposed
Suspension/Termination: Issued June 9, 1995; published June 15, 1995
(60 FR 31418).
This termination of proceeding is issued pursuant to the provisions
of the Agricultural Marketing Agreement Act of 1937, as amended (7
U.S.C. 601-674). This proceeding was initiated by a notice of
rulemaking published in the Federal Register on June 15, 1995 (60 FR
31418), concerning a proposed suspension/termination of certain
provisions of the order regulating the handling of milk in the
Louisville-Lexington-Evansville marketing area. The proposal would have
suspended or terminated the base-excess plan provisions of Order 46.
Interested parties were invited to comment on the proposal in writing
by July 17, 1995. Four comments supporting and two comments opposing
the proposed suspension/termination were received.
Statement of Consideration
This document terminates the proceeding initiated to suspend/
terminate the base-excess plan under the Louisville-Lexington-
Evansville Federal milk marketing order (Order 46). Holland Dairies,
Inc. (Holland), a fully regulated distributing plant under Order 46,
proposed the suspension/termination of the plan effective September 1,
1995.
Holland stated that the Order's base-excess plan had created
significant milk procurement problems in the area in recent years and
claimed that the plan limited its ability to obtain milk from new
producers because these producers had no base. As a result, the handler
concluded that it was forced to purchase supplemental milk during the
summer months from producers located outside the region at an
additional cost.
According to Holland, the cooperatives in the southern Indiana area
which compete with it for producers do not pay their member-producers
base and excess prices. Additionally, Holland stated that the Indiana
and Ohio Valley Federal milk orders, which border Order 46 to the
north, do not contain a producer base-excess plan. Holland contends
that both of these factors place it at a competitive disadvantage in
procuring milk and are unreasonable and detrimental to its long-term
ability to retain nonmember producers.
Armour Food Ingredients Company (Armour) and three dairy farmers
filed comment letters in support of the proposed suspension/termination
of the Order 46 base-excess plan. Armour states that Order 46 no longer
exhibits the highly seasonal changes in supply and demand which a base-
excess plan is intended to curtail and, therefore, concludes that the
suspension or termination of the plan would not have a detrimental
impact on the market's seasonal supply-demand balance. Armour also
contends the plan discourages new producers from starting a dairy
operation. Three Indiana dairy farmers who filed comments stated that
they favor the suspension or termination of the base-excess plan
because the plan lowers the price they receive for their milk.
Milk Marketing Inc. (MMI), and Mid-America Dairymen, Inc. (Mid-Am),
filed comments in opposition to the proposed suspension/termination of
the Order 46 base-excess plan. MMI, a regional cooperative representing
approximately 400 dairy farmers and 23 million pounds of milk per month
pooled by handlers regulated under Order 46, states that a base-excess
plan is designed to balance monthly production with consumption. MMI
contends that producers have invested time and money and have adopted
management
[[Page 43995]]
techniques to meet the needs of the marketplace. It argues that the
suspension/termination would discourage producers from adopting
production patterns that are needed to improve marketing efficiencies.
Mid-Am, a cooperative representing 451 producers who deliver milk
to plants regulated under Order 46, contends Holland's claim that ``the
base-excess plan limits its ability to obtain milk from new producers
because these producers have no base,'' is no basis to suspend or
terminate the base-excess plan under Order 46. Mid-Am states that the
volume of milk that would become available during the base-paying
months would be an insignificant amount and that there is no need for
Holland to procure supplemental milk from producers located outside the
region during the base-paying months because there is more than an
adequate supply of local milk available.
Mid-Am also points out that many cooperative member-producers in
the southern Indiana area are being paid on the basis of a base-excess
plan. During March through June 1995, Mid-Am indicated, over one-third
of its member-producers with milk pooled on Order 46 were paid base and
excess prices. The cooperative states that all of its member-producers
will be paid on the basis of a base-excess plan during 1996. Finally,
it argues that the plan helps to limit a handler's ability to shift
milk between orders during the base-paying months of March through June
when additional milk is not needed by handlers regulated under Order
46.
The comments submitted in response to the proposed suspension/
termination reveal that there is overwhelming support for the
continuation of the Order 46 base-excess plan by producers whose milk
is pooled under the order. The comments indicate that there is an
adequate supply of local milk available to Holland which should prevent
Holland from having to purchase supplemental supplies of milk from
producers located outside the region. In this regard, market data
indicate that for the past two years Class I utilization under Order 46
has generally been between 65 and 75 percent during the base-paying
months of March through June. The comments also reveal that the base-
excess plan under Order 46 is currently used to pay many cooperative
association member-producers now and will be used to pay many more next
year. Therefore, the proceeding to suspend or terminate the plan is
terminated.
List of Subjects in 7 CFR Part 1046
Milk marketing orders.
The authority citation for 7 CFR part 1046 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
Dated: August 17, 1995.
Patricia Jensen,
Acting Assistant, Secretary Marketing and Regulatory Programs.
[FR Doc. 95-20969 Filed 8-23-95; 8:45 am]
BILLING CODE 3410-02-P
