2011-22154. National Dairy Promotion and Research Program; Invitation To Submit Comments on Proposed Amendments to the Order

AGENCY:

Agricultural Marketing Service, USDA.

ACTION:

Proposed rule.

SUMMARY:

This document invites comments on a proposed amendment to the Dairy Promotion and Research Order (Dairy Order). The proposal would modify the number of National Dairy Promotion and Research Board (Dairy Board) members in eight regions, merge Region 8 and Region 10, merge Region 12 and Region 13, and apportion Idaho as a separate region. The total number of domestic Dairy Board members would remain the same at 36 and the total number of regions would be reduced from 13 to 12. This modification was requested by the Dairy Board, which administers the Dairy Order, to better reflect the geographic distribution of milk production in the United States.

DATES:

Comments must be submitted on or before September 14, 2011.

ADDRESSES:

Comments on this proposed rule should be identified with the docket number AMS-DA-11-0007; DA-11-02. Commenters should identify the date and page number of the issue of the Proposed Rule. Interested persons may comment on this proposed rule using either of the following procedures:

• Mail: Comments may be submitted by mail to Whitney A. Rick, Chief, Promotion and Research Branch, Dairy Programs, AMS, USDA, 1400 Independence Ave., SW., Room 2958-S, Stop 0233, Washington, DC 20250-0233.
• Fax: Comments may be faxed to [phone].
• E-mail: Comments may be e-mailed to [e-mail].
• Internet: http://www.regulations.gov.

All comments to this proposed rule, submitted by the above procedures will be available for viewing at: http://www.regulations.gov,, or at USDA, AMS, Dairy Programs, Promotion and Research Branch, Room 2958-S, 1400 Independence Ave., SW., Washington, DC, from 9 a.m. to 4 p.m., Monday through Friday, (except on official Federal holidays). Persons wanting to view comments in Room 2958-S are requested to make an appointment in advance by calling [phone].

FOR FURTHER INFORMATION CONTACT:

Whitney A. Rick, Chief, Promotion and Research Branch, Dairy Programs, AMS, USDA, 1400 Independence Ave., SW., Room 2958-S, Stop 0233, Washington, DC 20250-0233. Phone: [phone]. E-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

This proposed rule is issued pursuant to the Dairy Production Stabilization Act (Dairy Act) of 1983 [7 U.S.C. 4501-4514], as amended.

Executive Order 12866

The Office of Management and Budget has waived the review process required by Executive Order 12866 for this action.

Executive Order 12988

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. This proposed rule is not intended to have a retroactive effect. If adopted, nothing in this rule would preempt or supersede any other program relating to dairy product promotion organized and operated under the laws of the United States or any State.

The Dairy Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 4509 of the Dairy Act, any person subject to the Dairy Order may file with the Secretary a petition stating that the Dairy Order, any provision of the Dairy Order, or any obligation imposed in connection with the Dairy Order is not in accordance with the law and request a modification of the Dairy Order or to be exempted from the Dairy Order. Such person is afforded the opportunity for a hearing on the petition. After a hearing, the Secretary would rule on the petition. The Dairy Act provides that the district court of the United States in any district in which the person is an inhabitant or has his principal place of business, has jurisdiction to review the Secretary's ruling on the petition, provided a complaint is filed not later than 20 days after the date of the entry of the ruling.

Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612), 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. The purpose of the Regulatory Flexibility Act is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened.

The Dairy Production Stabilization Act of 1983 authorizes a national program for dairy product promotion, research and nutrition education. Congress found that it is in the public interest to authorize the establishment of an orderly procedure for financing (through assessments on all milk produced in the United States for commercial use and on imported dairy products) and carrying out a coordinated program of promotion designed to strengthen the dairy industry's position in the marketplace and to maintain and expand domestic and foreign markets and uses for fluid milk and dairy products.

The Small Business Administration [13 CFR 121.201] defines small dairy producers as those having annual receipts of not more than $750,000 annually. Most of the producers subject to the provisions of the Dairy Order are considered small entities.

The proposed rule would amend the Dairy Order by modifying the number of National Dairy Promotion and Research Board (Dairy Board) members in eight regions, merge Region 8 and Region 10, merge Region 12 and Region 13, and apportion Idaho as a separate region. The total number of domestic Dairy Board members would remain the same at 36 and the total number of regions would be reduced from 13 to 12. This modification was requested by the Dairy Board, which administers the Dairy Order, to better reflect the geographic distribution of milk production in the United States.

The Dairy Order is administered by a 38-member Dairy Board, 36 members representing 13 geographic regions within the United States and 2 representing importers. The Dairy Order provides in section 1150.131 that the Dairy Board shall review the geographic distribution of milk production throughout the United States and, if warranted, shall recommend to the Secretary a reapportionment of the regions and/or modification of the number of members from the regions in order to better reflect the geographic distribution of milk production volume in the United States. The Dairy Board is required to conduct the review at least every 5 years and not more than every 3 years. The Dairy Board was last modified in 2008 based on 2007 milk production.

Based on a review of the 2010 geographic distribution of milk production, the Dairy Board has concluded that the number of Dairy Board members for eight regions should be changed. Additionally, the Dairy Board proposes to merge Region 8 and Region 10, merge Region 12 and Region 13, and apportion Idaho as a separate region. The Dairy Board was last modified in 2008 based on 2007 milk production.

The proposed amendment should not have a significant economic impact on persons subject to the Dairy Order. The proposed changes merely would allow representation of the Dairy Board to better reflect geographic milk production in the United States.

Paperwork Reduction Act

In accordance with the Office of Management and Budget (OMB) regulation [5 CFR part 1320] which implements the Paperwork Reduction Act of 1995 [44 U.S.C. chapter 35], the information collection requirements and record keeping provisions imposed by the Dairy Order have been previously approved by OMB and assigned OMB Control No. 0581-0093. No relevant Federal rules have been identified that duplicate, overlap, or conflict with this rule.

Statement of Consideration

The Dairy Order is administered by a 38-member Dairy Board, 36 members representing 13 geographic regions within the United States and 2 representing importers. The Dairy Order provides in section 1150.131 that the Dairy Board shall review the geographic distribution of milk production volume throughout the United States and, if warranted, shall recommend to the Secretary a reapportionment of regions and/or modification of the number of producer members from regions in order to best reflect the geographic distribution of milk production in the United States. The Dairy Board is required to conduct the review at least every 5 years and not more than every 3 years. The Dairy Board was last modified in 2008 based on 2007 milk production.

Since the Dairy Board's last reapportionment, the Dairy Order was amended by a final rule [76 FR 14777, March 18, 2011] to implement an assessment on imported dairy products to fund promotion and research and to add importer representation, initially two members, to the Dairy Board. Additionally, the final rule amended the term “United States” in the Dairy Order to mean all States, the District of Columbia, and the Commonwealth of Puerto Rico. Assessments on producers in these areas were effective April 1, 2011. These amendments to the Dairy Order were implemented pursuant to the Farm Security and Rural Investment Act of 2008 (2008 Farm Bill) (Pub. L. 110-246).

In order to complement the current geographical makeup of the existing regions of the Dairy Board, the final rule added these four new jurisdictions to the region of closest proximity. Alaska was added to Region 1, currently comprised of Oregon and Washington; Hawaii was added to Region 2, currently California; and the District of Columbia and the Commonwealth of Puerto Rico were added to Region 10, currently comprised of Florida, Georgia, North Carolina, South Carolina and Virginia. These regional modifications were effective March 18, 2011, and are reflected in this proposed rule.

The final rule also modified the language in section 1150.131 of the Dairy Order to remove the specific formula for calculating the factor of pounds of milk per member, which divided total pounds of milk produced by 36, as the Dairy Board is now comprised of 38 members (36 domestic producers and 2 importer representatives). While the Dairy Order no longer specifies the procedure for calculating the factor of pounds of milk per member, for the purposes of the current reapportionment analysis, the procedure will remain the same.

The final rule also added new language that requires the Secretary to review the average volume of imports of dairy products into the United States and, if warranted, reapportion the importer representation on the Dairy Board to reflect the proportional shares of the United States market served by domestic production and imported dairy products. This review will take place at least once every 3 years, after the initial appointment of importer representatives on the Dairy Board.

The last reapportionment, conducted in 2008, was calculated by using 2007 milk production data and dividing by 36 to determine a factor of pounds of milk represented by each domestic Dairy Board member. The resulting factor was then divided into the pounds of milk produced in each region to determine the number of Dairy Board members for each region. Accordingly, the same process using 2010 milk production data was employed for the current reapportionment calculations. Table 1 summarizes by region the volume of milk production distribution for 2010, the percentage of total milk production and the current number of Dairy Board seats per region.

Table 1—Current Regions and Number of Board Seats

Current regions and states	Milk production (mil. lbs.)	Percentage of total milk production	Current number of board seats
1. Alaska, Oregon, Washington	8,307.1	4.3	1
2. California, Hawaii	40,410.3	21.0	8
3. Arizona, Colorado, Idaho, Montana, Nevada, Utah, Wyoming	22,592.4	11.6	4
4. Arkansas, Kansas, New Mexico, Oklahoma, Texas	20,321	10.4	4
5. Minnesota, North Dakota, South Dakota	11,370	5.8	2
6. Wisconsin	26,035	13.5	5
7. Illinois, Iowa, Missouri, Nebraska	8,867	4.6	2
8. Alabama, Kentucky, Louisiana, Mississippi, Tennessee	2,624	1.4	1
9. Indiana, Michigan, Ohio, West Virginia	17,188	8.9	3
10. District of Columbia, Florida, Georgia, North Carolina, Puerto Rico, South Carolina, Virginia	7,039	3.6	1
11. Delaware, Maryland, New Jersey, Pennsylvania	11,965	6.2	2
12. New York	12,713	6.6	2
13. Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont	4,036.5	2.1	1
Total	193,468.3	100	36
* Milk Production, Disposition, and Income, 2010 Summary, NASS, 2011.
** Puerto Rico—Various Agricultural Statistics, 2010 Summary, NASS, 2011.

In 2010, total milk production was 193,468 million pounds and each of the Dairy Board members would represent 5,374 million pounds of milk. For 2007, total milk production was 185,558 million pounds of milk and each of the Dairy Board members represented 5,154 million pounds of milk.

Based on the 2010 milk production data, the Dairy Board proposes that member representation in Region 1 (Alaska, Oregon, and Washington) be increased by one member. Milk production in Region 1 increased to 8,307 million pounds in 2010, up from 7,764 million pounds in 2007, indicating two Dairy Board members (8,307 divided by 5,374 = 1.545) compared to one Dairy Board member based on 2007 milk production data.

Milk production in Region 2 (California and Hawaii) decreased from 40,683 million pounds in 2007 to 40,410 million pounds in 2010. The Dairy Board proposes that seven Dairy Board members (40,410 divided by 5,374 = 7.519) represent Region 2, compared to eight Dairy Board members based on 2007 milk production data.

Milk production in Region 3 (Arizona, Colorado, Idaho, Montana, Nevada, Utah, and Wyoming) increased from 21,212 million pounds in 2007 to 22,592 million pounds in 2010. Specifically, in Idaho, milk production increased from 10,905 million pounds in 2007 to 12,779 pounds in 2010 and represents more than half of the production of Region 3. Due to the increase in Idaho production, the Dairy Board proposes apportioning Idaho as its own region with two Dairy Board members.

Milk production in Region 8 (Alabama, Kentucky, Louisiana, Mississippi, and Tennessee) decreased from 3,119 million pounds in 2007 to 2,624 million pounds in 2010. The Dairy Board concluded that Region 8 no longer supports one Dairy Board member (2,624 divided by 5,374 = 0.488) and proposes to merge Region 8 into Region 10 (District of Columbia, Florida, Georgia, North Carolina, Puerto Rico, South Carolina, and Virginia) to create a new region with two Dairy Board members.

Similarly, milk production in Region 13 (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont) decreased from 4,046 million pounds in 2007 to 4,036 million pounds in 2010. The Dairy Board concluded that Region 13 no longer supports one Dairy Board member (4,036 divided by 5,374 = 0.751) and proposes to merge Region 13 into Region 12 (New York), creating a new region with three Dairy Board members.

Table 2 summarizes by region, the volume of milk production distribution for 2010, the percentage of total milk production and the proposed regions and States and proposed Dairy Board members.

Table 2—Proposed Regions and Number of Board Seats

Proposed regions and states	Milk production (mil. lbs.)	Percentage of total milk production	Proposed number of board seats
1. Alaska, Oregon, Washington	8,307.1	4.3	2
2. California, Hawaii	40,410.3	21.0	7
3. Arizona, Colorado, Montana, Nevada, Utah, Wyoming	9,813.4	5.0	2
4. Arkansas, Kansas, New Mexico, Oklahoma, Texas	20,321	10.4	4
5. Minnesota, North Dakota, South Dakota	11,370	5.8	2
6. Wisconsin	26,035	13.5	5
7. Illinois, Iowa, Missouri, Nebraska	8,867	4.6	2
8. Idaho	12,779	6.6	2
9. Indiana, Michigan, Ohio, West Virginia	17,188	8.9	3
10. Alabama, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee, Virginia	9,663	5.0	2
11. Delaware, Maryland, New Jersey, Pennsylvania	11,965	6.2	2
12. Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont	16,749.5	8.7	3
Total	193,468.3	100	36
* Milk Production, Disposition, and Income, 2010 Summary, NASS, 2011.
** Puerto Rico—Various Agricultural Statistics, 2010 Summary, NASS, 2011.

A 15-day comment period is provided for interested persons to comment on this proposed rule. Twelve terms of existing Dairy Board members will expire on October 31, 2011. Thus a 15-day comment period is provided to provide for a timely appointment of new Dairy Board members based on the current geographic distribution of milk production in the United States.

List of Subjects in 7 CFR Part 1150

• Dairy products
• Milk
• Promotion
• Research

For the reasons set forth in the preamble, it is proposed that 7 CFR part 1150 be amended as follows:

PART 1150—DAIRY PROMOTION PROGRAM

1. The authority citation for 7 CFR part 1150 continues to read as follows:

Authority: 7 U.S.C. 4501-4514 and 7 U.S.C. 7401.

2. In § 1150.131, paragraph (b) is amended by revising paragraphs (b) introductory text, (b)(1), (b)(2), (b)(3), (b)(8), (b)(10), (b)(12), and removing paragraph (b)(13) to read as follows:

§ 1150.131

Establishment and membership.

(a) * * *

(b) Thirty-six members of the Board shall be United States producers. For purposes of nominating producers to the Board, the United States shall be divided into twelve geographic regions and the number of Board members from each region shall be as follows:

(1) Two members from region number one comprised of the following States: Alaska, Oregon and Washington.

(2) Seven members from region number two comprised of the following States: California and Hawaii.

(3) Two members from region number three comprised of the following States: Arizona, Colorado, Montana, Nevada, Utah and Wyoming.

* * * * *

(8) Two members from region number eight comprised of the following State: Idaho.

* * * * *

(10) Two members from region number 10 comprised of the following States: Alabama, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Commonwealth of Puerto Rico, South Carolina, Tennessee and Virginia.

* * * * *

(12) Three members from region number 12 comprised of the following States: Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.

Dated: August 22, 2011.

David Shipman,

Acting Administrator.