[Federal Register Volume 63, Number 177 (Monday, September 14, 1998)]
[Proposed Rules]
[Pages 49042-49043]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24534]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 63, No. 177 / Monday, September 14, 1998 /
Proposed Rules
[[Page 49042]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1079
[DA-98-07]
Milk in the Iowa Marketing Area; Termination of Proceeding on
Proposed Temporary Revision of Pool Supply Plant Shipping Percentage
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Termination of proceeding on proposed temporary revision of
rule.
-----------------------------------------------------------------------
SUMMARY: This action terminates a proceeding that was initiated to
consider a proposal to reduce temporarily the pooling standards for
supply plants regulated by the Iowa Federal milk order. The proposal,
which would reduce the shipping requirement for the months of September
through November 1998 from 35 percent to 25 percent, was made by the
operator of a pool supply plant. A fluid milk handler and a cooperative
association representing a substantial number of the producers on the
market submitted views and arguments opposing the temporary revision.
In addition, the fluid milk handler suggested that the shipping
requirements be increased by 5 percentage points for the same period.
The Department has concluded that it will not temporarily reduce the
shipping requirement for supply plants as proposed.
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: connie____brenner@usda.gov.
SUPPLEMENTARY INFORMATION: Prior document in this proceeding:
Notice of Proposed Temporary Revision: Issued July 21, 1998;
published July 27, 1998 (63 FR 40068).
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 July 27, 1998 (63 FR
40068) concerning a proposed relaxation in the shipping requirement for
pool supply plants for the months of September through November 1998.
Interested parties were afforded 30 days in which to comment on the
proposal by submitting written data, views, or arguments. Comments were
received from three interested parties.
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. 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 March 1998, 3,768 dairy farmers were producers
under the Iowa Order. Of these, all but 68 would be considered small
businesses, having under 326,000 pounds of production for the month. Of
the dairy farmers in the small business category, 2,682 produced under
100,000 pounds of milk, 876 produced between 100,000 and 200,000, and
142 produced between 200,000 and 326,000 pounds during March 1998.
Generally, the reports filed on behalf of the slightly more than 20
milk plants pooled, or regulated, under the Iowa Order in March 1998
were filed for establishments that would meet the SBA definition of a
small business on an individual basis, having less than 500 employees.
However, all but four of the milk handlers represented in the market
are part of larger businesses that operate multiple plants at which
their collective size exceeds the SBA definition of a small business
entity.
Interested parties were invited to submit comments on the probable
regulatory and informational impact of the proposed temporary revision
on small entities, or to suggest modifications of the proposal for the
purpose of tailoring their applicability to small businesses. No
comments addressing the potential impact of the proposed action on
small entities were received.
The reduction of the required supply plant shipping percentage for
the months of September through November 1998 was proposed to allow the
milk of producers traditionally associated with the Iowa market to
continue to be pooled and priced under the order. A temporary revision
was intended to 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, resulting in savings in
hauling costs for handlers and producers.
However, based upon comments received, there are indications that
the temporary revision could make it more difficult for handlers to
obtain supplies of milk needed to supply the fluid needs of the market.
It is not clear that the current supply plant shipping percentage will
cause uneconomic shipments of milk. The Department has concluded that
it will not temporarily reduce the shipping requirement for supply
plants as proposed.
Statement of Consideration
This document terminates the proceeding initiated to temporarily
reduce the pool supply plant shipping standards of the Iowa Federal
milk order. Beatrice Cheese, Inc. (Beatrice), which operates a supply
plant regulated under the Iowa milk order, requested a temporary
reduction in the supply plant shipping requirement of 10 percentage
points. Beatrice stated that a decrease was warranted due to a surplus
of raw milk supplies available for fluid use over the needs of the
fluid milk plants regulated under the Iowa order. Beatrice stated that
if the pool supply shipping percentages remain unchanged, Beatrice
would be forced to move milk
[[Page 49043]]
uneconomically or unfairly depool some milk produced by Iowa dairymen,
denying them participation in the Order 79 pool.
Another proprietary cheese plant operator submitted comments
supporting the proposed temporary revision, citing conditions requiring
uneconomic shipments of milk or the need to depool milk to meet order
requirements in 1996 when the shipping percentage was also at 35
percent.
Comments filed on behalf of Anderson-Erickson Dairy Company of Des
Moines, Iowa (Anderson-Erickson), opposed the proposed temporary
revision on the basis that, although there appears to be a sufficient
supply of milk in the marketing area, that supply is not being made
available as needed by fluid processing plants. Anderson-Erickson
stated that it had requested additional fluid milk supplies from
Beatrice for the fall season of traditionally high Class I use and been
refused. Anderson-Erickson stated that the dairy has diligently pursued
a substitute milk supply by contacting other sources of milk in and
around Iowa. While its efforts succeeded to some extent in
supplementing Anderson-Erickson's milk supply, the fluid milk handler
stated that it would still fall short of its raw milk needs by nearly
2.5 million pounds per month beginning September 1998.
Anderson-Erickson requested that, since milk supplies appear to be
limited for fluid use, USDA consider increasing the Iowa pool supply
plant shipping percentage for the months of September through November
1998 by 5 percentage points instead of reducing them by 10 percentage
points.
Associated Milk Producers, Inc., North Central AMPI (AMPI), filed a
comment stating that current marketing conditions make it extremely
difficult to determine Class I needs relative to available milk supply
in the market. However, the cooperative association stated that its
customer, Anderson-Erickson, is requesting more milk than it was a year
earlier. The cooperative concluded that a reduction in shipping
requirements does not appear to be appropriate at present.
There are no indications that milk supplies in the Iowa marketing
area are any more plentiful for the fall months of 1998 than they were
for the same months of 1997. As noted in the AMPI comment, current
pricing relationships, the pooling of some milk supplies under other
orders, and the failure of handlers to pool their full milk supplies
make it very difficult to form any definitive conclusions about the
supply and demand of producer milk for fluid use. However, the
difficulty of a fluid milk handler in assuring an adequate supply of
milk for its bottling needs, even with the procurement of additional
sources, would indicate that the percentage shipping standards required
for pooling should not be reduced. It is not clear that the current
supply plant shipping percentage will cause uneconomic shipments of
milk.
In view of the above circumstances, it is concluded that the supply
plant shipping requirement should not be revised for the months of
September through November 1998. Accordingly, the proceeding begun on
this matter on July 21, 1998, is hereby terminated.
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: Secs. 1-19, 48 Stat. 31, as amended; 7 U.S.C. 601-
674.
Signed at Washington, DC, on September 8, 1998.
Richard M. McKee,
Deputy Administrator, Dairy Programs.
[FR Doc. 98-24534 Filed 9-11-98; 8:45 am]
BILLING CODE 3410-02-P
