80 FR 47210 - Milk in California; Notice of Hearing on a Proposal To Establish a Federal Milk Marketing Order
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service Federal Register Volume 80, Issue 151 (August 6, 2015)
Agricultural Marketing Service
Federal Register Volume 80, Issue 151 (August 6, 2015)
| Page Range | 47210-47235 | |
| FR Document | 2015-18704 |
[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)] [Proposed Rules] [Pages 47210-47235] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-18704] [[Page 47209]] Vol. 80 Thursday, No. 151 August 6, 2015 Part IV Department of Agriculture ----------------------------------------------------------------------- Agricultural Marketing Service ----------------------------------------------------------------------- 7 CFR Part 1051 Milk in California; Notice of Hearing on a Proposal To Establish a Federal Milk Marketing Order; Proposed Rule Federal Register / Vol. 80 , No. 151 / Thursday, August 6, 2015 / Proposed Rules [[Page 47210]] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 1051 [Doc. No. AO-15-0071; AMS-DA-14-0095] Milk in California; Notice of Hearing on a Proposal To Establish a Federal Milk Marketing Order AGENCY: Agricultural Marketing Service, USDA. ACTION: Notice of public hearing on proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: A public hearing is being held to consider and take evidence on a proposal that would establish a Federal milk marketing order to regulate the handling of milk in California. The proposed marketing area would incorporate the entire state of California. USDA received four proposals from interested parties, some that include certain milk pricing and pooling provisions not found in current Federal milk orders. The proposals incorporate the same dairy product classification system used throughout the Federal milk marketing order system. Additional features would recognize California quota premium and fluid milk fortification values. The proposals noticed herein would not modify any existing Federal milk marketing orders. DATES: The hearing will convene at 9:00 a.m. on Tuesday, September 22, 2015. ADDRESSES: The hearing will be held at the Clovis Veterans Memorial District Building, 808 Fourth Street, Clovis, California 93612; telephone (559) 299-0471. If still ongoing, the hearing will be held on October 22 and 23, 2015, at the Piccadilly Inn Airport Hotel, 5115 E. McKinley Avenue, Fresno, California 93727; telephone (559) 375-7760. FOR FURTHER INFORMATION CONTACT: William Francis, Director, Order Formulation and Enforcement Division, USDA/AMS/Dairy Program, Stop 0231--Room 2969-S, 1400 Independence Avenue SW., Washington, DC 20250- 0231; (202) 720-6274; email address: [email protected]. Persons requiring a sign language interpreter or other special accommodations should contact Diane Hirsch, AMS Dairy Program, at (425) 487-5601, email: [email protected], before the hearing begins. SUPPLEMENTARY INFORMATION: This administrative action is governed by the provisions of Sections 556 and 557 of Title 5 of the United States Code and, therefore, is excluded from the requirements of Executive Order 12866. Notice is hereby given of a public hearing to be held at the Clovis Veterans Memorial District, Clovis, California, beginning at 9:00 a.m. on Tuesday, September 22, 2015, with respect to the proposed establishment of a marketing agreement and order (order) regulating the handling of milk in the State of California. The hearing is called pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601- 674) (Act), and the applicable rules of practice and procedure governing the formulation of marketing agreements and marketing orders (7 CFR part 900). The purpose of the hearing is to: (a) Receive evidence with respect to the economic and marketing conditions which relate to the proposed marketing agreement and order, hereinafter set forth, and any appropriate modifications thereof; (b) Determine whether the handling of milk in the area proposed for regulation is in the current of interstate or foreign commerce or directly burdens, obstructs, or affects interstate or foreign commerce; (c) Determine whether there is need for a marketing agreement or order regulating the handling of milk in the area; (d) Determine the economic impact of the proposed order on the industry in the proposed marketing area and on the public affected by such program; and (e) Determine whether the proposed marketing agreement and order or appropriate modifications thereof would tend to effectuate the declared policy of the Act. Actions under the Federal milk order program are subject to the Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA). The RFA seeks to ensure that, within the statutory authority of a program, the regulatory and information collection requirements are tailored to the size and nature of small businesses. For the purpose of the RFA, a dairy farm is a ``small business'' if it has an annual gross revenue of less than $750,000, and a dairy products manufacturer is a ``small business'' if it has fewer than 500 employees (13 CFR 121.201). Most parties subject to a milk order are considered small businesses. Accordingly, interested parties are invited to present evidence on the probable regulatory and informational impact of the hearing proposals on small businesses. Also, parties may offer modifications of these proposals for the purpose of tailoring their applicability to small businesses. Executive Order 12988, Civil Justice Reform The marketing order proposed herein has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have a retroactive effect. If adopted, operation of state law is such that the state law may be suspended, in part or in whole, if a Federal order is implemented. Preliminary Economic Analysis and Detailed Analysis Information A preliminary economic analysis as well as additional detailed analysis, data and information used in developing the preliminary economic analysis are presented at the AMS Dairy Programs Web site, www.ams.usda.gov/dairy. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under Section 8c(15)(A) of the Act, any handler subject to an order may request modification or exemption from such order by filing with the United States Department of Agriculture (USDA) 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, USDA 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 principle place of business, has jurisdiction to review USDA's decision on the petition, provided a complaint is filed not later than 20 days after the date of the entry of the ruling. Interested parties who wish to introduce exhibits should provide the Administrative Law Judge at the hearing with four (4) copies of such exhibits for the official record. Additional copies should be made available for the use of other hearing participants. Any party that has submitted a proposal noticed herein, when participating as a witness, is required to make their testimony--if prepared as an exhibit--and any other exhibits, available to USDA officials prior to the start of the hearing on the day of their appearance. Individual dairy farmers are not subject to this requirement. The hearing will continue until such time as determined to have ended by the presiding Administrative Law Judge. The schedule for the next session will be announced at the time of adjournment. Such reconvening date and time will also be posted on the [[Page 47211]] AMS-Dairy Programs Web site at http://www.ams.usda.gov/dairy. The provisions of the proposed marketing order designated 7 CFR part 1051, as set forth below, have not received the approval of USDA. List of Subjects in 7 CFR Part 1051 Milk marketing orders. 0 1. The authority citation for 7 CFR part 1051 reads as follows: Authority: 7 U.S.C. 601-674, and 7253. 0 2. Testimony is invited on the following proposals or appropriate modifications to such proposals. Proposal Number 1 Submitted by California Dairies, Inc.; Dairy Farmers of America, Inc.; and Land O' Lakes, Inc. 0 3. This proposal seeks to add a new part 1051 to read as follows: PART 1051--MILK IN THE CALIFORNIA MARKETING AREA Sec. Subpart A--Order Regulating Handling General Provisions 1051.1 General Provisions. Definitions 1051.2 California marketing area. 1051.3 Route disposition. 1051.4 Plant. 1051.5 Distributing plant. 1051.6 Supply plant. 1051.7 Pool plant. 1051.8 Nonpool plant. 1051.9 Handler. 1051.10 Producer-handler. 1051.11 [Reserved] 1051.12 Producer. 1051.13 Producer milk. 1051.14 Other source milk. 1051.15 Fluid milk product. 1051.16 Fluid cream product. 1051.17 CDFA, quota premium, quota nonfat solids, and non-quota milk. 1051.18 Cooperative association. 1051.19 Commercial food processing establishment. Market Administrator 1051.25 Market administrator. Administrative Provisions 1051.26 Continuity and separability of provisions. Handlers 1051.27 Handler responsibility for records and facilities. 1051.28 Termination of obligations. Reports 1051.30 Reports of receipts and utilization. 1051.31 Producer delivery and payroll reports. 1051.32 Other reports. Subpart B--Milk Pricing Classification of Milk 1051.40 Classes of utilization. 1051.41 [Reserved] 1051.42 Classification of transfers and diversions. 1051.43 General classification rules. 1051.44 Classification of producer milk. 1051.45 Market administrator's reports and announcements concerning classification. Class Prices 1051.50 Class prices, component prices, and advanced pricing factors. 1051.51 Class I differential and price. 1051.52 Adjusted Class I differentials. 1051.53 Announcement of class prices, component prices, and advanced pricing factors. 1051.54 Equivalent price. Marketwide Service Payments 1051.55 Transportation credits. 1051.56 Mileage rate for transportation credits. Producer Prices 1051.60 Handler's value of milk. 1051.61 Computation of producer component prices and producer price differential. 1051.62 Announcement of producer prices. Subpart C--Payments for Milk Producer Payments 1051.70 Producer-settlement fund. 1051.71 Payments to the producer-settlement fund. 1051.72 Payments from the producer-settlement fund. 1051.73 Payments to producers and cooperative associations. 1051.74 [Reserved] 1051.75 Plant location adjustments for nonpool milk. 1051.76 Payments by a handler operating a partially regulated distributing plant. 1051.77 Adjustment of accounts. 1051.78 Charges on overdue accounts. Administrative Assessment and Marketing Service Deduction 1051.85 Assessment for order administration. 1051.86 Deduction for marketing services. Subpart D--Miscellaneous Provisions 1051.90 Dates. Authority: 7 U.S.C. 601--674 Subpart A--Order Regulating Handling General Provisions Sec. 1051.1 General provisions. The terms, definitions, and provisions in part 1000 of this chapter apply to this part 1051. In this part 1051, all references to sections in part 1000 refer to part 1000 of this chapter. Definitions Sec. 1051.2 California marketing area. The marketing area means all territory within the bounds of the following states and political subdivisions, including all piers, docks, and wharves connected therewith and all craft moored thereat, and all territory occupied by government (municipal, State, or Federal) reservations, installations, institutions, or other similar establishments if any part thereof is within any of the listed states or political subdivisions: All of the State of California. Sec. 1051.3 Route disposition. See Sec. 1000.3. Sec. 1051.4 Plant. See Sec. 1000.4. Sec. 1051.5 Distributing plant. See Sec. 1000.5. Sec. 1051.6 Supply plant. See Sec. 1000.6. Sec. 1051.7 Pool plant. Pool plant means a plant as specified in paragraphs (a) through (d) of this section, but excluding a plant specified in paragraph (f) of this section. The pooling standards described in paragraphs (d) of this section are subject to modification pursuant to paragraph (e) of this section: (a) A distributing plant, other than a plant qualified as a pool plant pursuant to paragraph (b) of this section or Sec. ___ .7(b) of any other Federal milk order, from which during the month 25 percent or more of the total quantity of fluid milk products physically received at the plant (excluding concentrated milk received from another plant by agreement for other than Class I use) are disposed of as route disposition or are transferred in the form of packaged fluid milk products to other distributing plants. At least 25 percent of such route disposition and transfers must be to outlets in the marketing area. (b) Any distributing plant located in the marketing area which during the month processed at least 15 percent of the total quantity of fluid milk products physically received at the plant (excluding concentrated milk received from another plant by agreement for other than Class I use) into ultra-pasteurized or aseptically-processed fluid milk products. (c) A plant that is located in the marketing area which during the month receives milk from a producer located in the marketing area or from a cooperative marketing the milk of a producer [[Page 47212]] located in the marketing area pursuant to Sec. 1051.9(c). (1) A plant located in Churchill county Nevada that receives milk from producers located in Churchill County or in the marketing area or from a cooperative marketing the milk of a producer located in the marketing area or in Churchill County pursuant to Sec. 1051.9(c). (d) A supply plant located outside the marketing area (except a plant described in Sec. 1051.7(c)(1)) from which the quantity of bulk fluid milk products shipped to (and physically unloaded into) plants described in paragraph (a) and (b) of this section is not less than 50 percent of the Grade A milk received from dairy farmers and handlers described in Sec. 1000.9(c), including milk diverted pursuant to Sec. 1051.13, subject to the following conditions: (1) If milk is delivered directly from producers' farms that are located outside of the marketing area such producers must be grouped by state into reporting units and each reporting unit must independently meet the shipping requirements of this paragraph; and (2) Concentrated milk transferred from the supply plant located outside the marketing area to a distributing plant shall be excluded from the supply plant's shipments in computing the percentages in paragraphs (d)(1). (e) The applicable shipping percentages of paragraphs (d) of this section and Sec. 1051.13(d)(2), and (d)(3) may be increased or decreased, for all or part of the marketing area, by the market administrator if the market administrator finds that such adjustment is necessary to encourage needed shipments or to prevent uneconomic shipments. Before making such a finding, the market administrator shall investigate the need for adjustment either on the market administrator's own initiative or at the request of interested parties if the request is made in writing at least 15 days prior to the month for which the requested revision is desired effective. If the investigation shows that an adjustment of the shipping percentages might be appropriate, the market administrator shall issue a notice stating that an adjustment is being considered and invite data, views and arguments. Any decision to revise an applicable shipping or diversion percentage must be issued in writing at least one day before the effective date. (f) The term pool plant shall not apply to the following plants: (1) A producer-handler as defined under any Federal order; (2) An exempt plant as defined in Sec. 1000.8(e); (3) A plant located within the marketing area and qualified pursuant to paragraph (a) of this section which meets the pooling requirements of another Federal order, and from which more than 50 percent of its route disposition has been in the other Federal order marketing area for 3 consecutive months; (4) A plant located outside any Federal order marketing area and qualified pursuant to paragraph (a) of this section that meets the pooling requirements of another Federal order and has had greater route disposition in such other Federal order's marketing area for 3 consecutive months; (5) A plant located in another Federal order marketing area and qualified pursuant to paragraph (a) of this section that meets the pooling requirements of such other Federal order and does not have a majority of its route distribution in this marketing area for 3 consecutive months or if the plant is required to be regulated under such other Federal order without regard to its route disposition in any other Federal order marketing area; (6) A plant qualified pursuant to paragraph (c) of this section which also meets the pooling requirements of another Federal order and from which greater qualifying shipments are made to plants regulated under the other Federal order than are made to plants regulated under the order in this part, or the plant has automatic pooling status under the other Federal order; and (g) Any plant that qualifies as a pool plant in each of the immediately preceding 3 months pursuant to paragraph (a) of this section or the shipping percentages in paragraph (c) of this section that is unable to meet such performance standards for the current month because of unavoidable circumstances determined by the market administrator to be beyond the control of the handler operating the plant, such as a natural disaster (ice storm, wind storm, flood), fire, breakdown of equipment, or work stoppage, shall be considered to have met the minimum performance standards during the period of such unavoidable circumstances, but such relief shall not be granted for more than 2 consecutive months. Sec. 1051.8 Nonpool plant. See Sec. 1000.8. Sec. 1051.9 Handler. See Sec. 1000.9. Sec. 1051.10 Producer-handler. Producer-handler means a person who: (a) Operates a dairy farm and a distributing plant from which there is route disposition in the marketing area, and from which total route disposition and packaged sales of fluid milk products to other plants during the month does not exceed 3 million pounds; (b) Receives fluid milk from own farm production or milk that is fully subject to the pricing and pooling provisions of the order in this part or any other Federal order; (c) Receives at its plant or acquires for route disposition no more than 150,000 pounds of fluid milk products from handlers fully regulated under any Federal order. This limitation shall not apply if the producer-handler's own farm production is less than 150,000 pounds during the month; (d) Disposes of no other source milk as Class I milk except by increasing the nonfat milk solids content of the fluid milk products; (e) Provides proof satisfactory to the market administrator that the care and management of the dairy animals and other resources necessary to produce all Class I milk handled (excluding receipts from handlers fully regulated under any Federal order) and the processing and packaging operations are the producer-handler's own enterprise and at its own risk; and (f) Any producer-handler with Class I route dispositions and/or transfers of packaged fluid milk products in the marketing area described in Sec. 1131.2 of this chapter shall be subject to payments into the Order 1131 producer settlement fund on such dispositions pursuant to Sec. 1000.76(a) and payments into the Order 1131 administrative fund provided such dispositions are less than three million pounds in the current month and such producer-handler had total Class I route dispositions and/or transfers of packaged fluid milk products from own farm production of three million pounds or more the previous month. If the producer-handler has Class I route dispositions and/or transfers of packaged fluid milk products into the marketing area described in Sec. 1131.2 of this chapter of three million pounds or more during the current month, such producer-handler shall be subject to the provisions described in Sec. 1131.7 of this chapter or Sec. 1000.76(a). Sec. 1051.11 [Reserved] Sec. 1051.12 Producer. (a) Except as provided in paragraph (b) of this section, producer means any person who produces milk approved by a duly constituted regulatory agency for [[Page 47213]] fluid consumption as Grade A milk and whose milk is: (1) Received at a pool plant directly from the producer or diverted by the plant operator in accordance with Sec. 1051.13; or (2) Received by a handler described in Sec. 1000.9(c). (b) Producer shall not include a dairy farmer described in paragraphs (b)(1) through (5) of this section. A dairy farmer described in paragraph (b)(5) of this section shall be known as a dairy farmer for other markets. (1) A producer-handler as defined in any Federal order; (2) A dairy farmer whose milk is received at an exempt plant, excluding producer milk diverted to the exempt plant pursuant to Sec. 1051.13(d); (3) A dairy farmer whose milk is received by diversion at a pool plant from a handler regulated under another Federal order if the other Federal order designates the dairy farmer as a producer under that order and that milk is allocated by request to a utilization other than Class I; (4) A dairy farmer whose milk is reported as diverted to a plant fully regulated under another Federal order with respect to that portion of the milk so diverted that is assigned to Class I under the provisions of such other order; and (5) A dairy farmer who having had a Grade A permit has marketed milk as other than Grade A milk for more than 30 consecutive days shall not be a producer until 12 consecutive months have passed from the time non-Grade A status started. Sec. 1051.13 Producer milk. Except as provided for in paragraph (e) of this section, Producer milk means the skim milk (or the skim equivalent of components of skim milk), including nonfat components, and butterfat in milk of a producer that is: (a) Received by the operator of a pool plant directly from a producer or a handler described in Sec. 1000.9(c). All milk received pursuant to this paragraph shall be priced at the location of the plant where it is first physically received; (b) Received by a handler described in Sec. 1000.9(c) in excess of the quantity delivered to pool plants; (c) Diverted by a pool plant operator to another pool plant. Milk so diverted shall be priced at the location of the plant to which diverted; or (d) Diverted by the operator of a pool plant or a cooperative association described in Sec. 1000.9(c) to a nonpool plant subject to the following conditions: (1) Milk of a dairy farmer shall not be eligible for diversion until at least five days' production of such dairy farmer is physically received as producer milk at a pool plant during the first month the dairy farmer is a producer. If a dairy farmer loses producer status under the order in this part (except as a result of a temporary loss of Grade A approval or as a result of the handler of the dairy farmer's milk failing to pool the milk under any order), the dairy farmer's milk shall not be eligible for diversion until at least five days' production of the dairy farmer has been physically received as producer milk at a pool plant during the first month the dairy farmer is re- associated with the market; (2) The quantity of milk diverted by a handler described in Sec. 1000.9(c) may not exceed 50 percent of the producer milk receipts reported by the handler pursuant to Sec. 1051.30(c), provided that not less than 50 percent of such receipts are delivered to plants described in Sec. 1051.7(a) or (b). These percentages are subject to any adjustments that may be made pursuant to Sec. 1051.7(e); and (3) The quantity of milk diverted to nonpool plants by the operator of a pool plant described in Sec. 1051.7(a) or (b) may not exceed 50 percent of the Grade A milk received from dairy farmers (except dairy farmers described in Sec. 1051.12(b)), including milk diverted pursuant to Sec. 1051.13; and further, such milk is subject to the pooling requirements of Sec. 1051.7(d)(1); and (4) Diverted milk shall be priced at the location of the plant to which diverted. (e) Producer milk shall not include milk of a producer that is subject to inclusion and participation in a marketwide equalization pool under a milk classification and pricing program imposed under the authority of a State government maintaining marketwide pooling of returns. (f) The quantity of milk reported by a handler pursuant to either Sec. 1051.30(a)(1) or Sec. 1051.30(c)(1) may not exceed 115 percent of the producer milk receipts pooled by the handler during the prior month. Milk diverted to nonpool plants reported in excess of this limit shall be removed from the pool. Milk in excess of this limit received at pool plants, other than pool distributing plants, shall be classified pursuant to Sec. 1000.44(a)(3)(v) and Sec. 1000.44(b). The handler must designate, by producer pick-up, which milk is to be removed from the pool. If the handler fails to provide this information, the market administrator will make the determination. The following provisions apply: (1) Milk shipped to and physically received at pool distributing plants in excess of the previous month's pooled volume shall not be subject to the 115 percent limitation; (2) The market administrator may waive the 115 percent limitation: (i) For a new handler on the order, subject to the provisions of Sec. 1051.13(f)(3), or (ii) For an existing handler with significantly changed milk supply conditions due to unusual circumstances; (3) A bloc of milk may be considered ineligible for pooling if the market administrator determines that handlers altered the reporting of such milk for the purpose of evading the provisions of this paragraph. Sec. 1051.14 Other source milk. See Sec. 1000.14. Sec. 1051.15 Fluid milk product. See Sec. 1000.15. Sec. 1051.16 Fluid cream product. See Sec. 1000.16. Sec. 1051.17 CDFA, quota premium, quota nonfat solids, and non-quota milk. (a) CDFA refers to the California Department of Food and Agriculture, which is the agency of the State of California responsible for administration of the California dairy producer milk quota program as established in the California Food and Agriculture Code. (b) Quota premium means the value established pursuant to the California Food and Agriculture Code. Quota premium and quota premium value mean the value per pound of nonfat solids, as adjusted by the regional quota adjusters, where and as applicable. (c) Quota nonfat solids means the pounds of nonfat solids of a producer, as determined and reported by CDFA, which qualify for the quota premium. (d) Non-quota milk means pool milk not eligible for the quota premium. Sec. 1051.18 Cooperative association. See Sec. 1000.18. Sec. 1051.19 Commercial food processing establishment. See Sec. 1000.19. Market Administrator Sec. 1051.25 Market administrator. See Sec. 1000.25. Administrative Provisions Sec. 1051.26 Continuity and separability of provisions. See Sec. 1000.26. [[Page 47214]] Handlers Sec. 1051.27 Handler responsibility for records and facilities. See Sec. 1000.27. Sec. 1051.28 Termination of obligations. See Sec. 1000.28. Reports Sec. 1051.30 Reports of receipts and utilization. Each handler shall report monthly so that the market administrator's office receives the report on or before the 6th day after the end of the month, in the detail and on the prescribed forms, as follows: (a) Each handler that operates a pool plant shall report for each of its operations the following information: (1) Product pounds, pounds of butterfat, pounds of protein, and pounds of solids-not-fat other than protein (other solids) contained in or represented by: (i) Receipts of producer milk, including producer milk diverted by the reporting handler, from sources other than handlers described in Sec. 1000.9(c) [qualified cooperative associations]; and (ii) Receipts of milk from handlers described in Sec. 1000.9(c); (2) Product pounds and pounds of butterfat contained in: (i) Receipts of fluid milk products and bulk fluid cream products from other pool plants; (ii) Receipts of other source milk; (iii) Receipts of all condensed skim and dry powder; and (iv) Inventories at the beginning and end of the month of fluid milk products, bulk fluid cream products, condensed milk, and dry powder; (3) The utilization or disposition of all milk and milk products required to be reported pursuant to this paragraph; (4) Such other information with respect to the receipts and utilization of skim milk, butterfat, milk protein, other nonfat solids, as the market administrator may prescribe, including the use of condensed skim or dry powder in fortification or reconstitution of Class I products. (b) Each handler operating a partially regulated distributing plant shall report with respect to such plant in the same manner as prescribed for reports required by paragraph (a) of this section. Receipts of milk that would have been producer milk if the plant had been fully regulated shall be reported in lieu of producer milk. The report shall show also the quantity of any reconstituted skim milk in route disposition in the marketing area. (c) Each handler described in Sec. 1000.9(c) shall report: (1) The product pounds, pounds of butterfat, pounds of protein, and pounds of solids-not-fat other than protein (other solids) contained in receipts of milk from producers; and (2) The utilization or disposition of such receipts. (d) Each handler not specified in paragraphs (a) through (c) of this section shall report with respect to its receipts and utilization of milk and milk products in such manner as the market administrator may prescribe. (e) Each handler shall report such additional information as deemed necessary by the market administrator. Sec. 1051.31 Producer delivery and payroll reports. (a) On or before the 6th day after the end of each month, each handler that operates a pool plant pursuant to Sec. 1051.7 and each handler described in Sec. 1000.9(c) shall report to the market administrator its producer deliveries for the month, in the detail prescribed by the market administrator, showing for each producer the information described in Sec. 1051.73(f); and any other information deemed necessary by the Market Administrator. (b) On or before the 20th day after the end of each month, each handler that operates a pool plant pursuant to Sec. 1051.7 and each handler described in Sec. 1000.9(c) shall report to the market administrator its producer payroll for the month, in the detail prescribed by the market administrator, showing for each producer the information described in Sec. 1051.73(f) and any other information deemed necessary by the Market Administrator. (c) Each handler operating a partially regulated distributing plant who elects to make payment pursuant to Sec. 1000.76(b) shall report for each dairy farmer who would have been a producer if the plant had been fully regulated in the same manner as prescribed for reports required by paragraph (a) of this section. Sec. 1051.32 Other reports. In addition to the reports required pursuant to Sec. Sec. 1051.30 and 1051.31, each handler shall report any information the market administrator deems necessary to verify or establish each handler's obligation under the order. Subpart B--Milk Pricing Classification of Milk Sec. 1051.40 Classes of utilization. See Sec. 1000.40. Sec. 1051.41 [Reserved] Sec. 1051.42 Classification of transfers and diversions. See Sec. 1000.42. Sec. 1051.43 General classification rules. See Sec. 1000.43. Sec. 1051.44 Classification of producer milk. See Sec. 1000.44. Sec. 1051.45 Market administrator's reports and announcements concerning classification. See Sec. 1000.45. Class Prices Sec. 1051.50 Class prices, component prices, and advanced pricing factors. See Sec. 1000.50. Sec. 1051.51 Class I differential and price. The Class I differential shall be the differential established for Los Angeles County, California, which is reported in Sec. 1000.52. The Class I price shall be the price computed pursuant to Sec. 1000.50(a) for Los Angeles County, California. Sec. 1051.52 Adjusted Class I differentials. See Sec. 1000.52. Sec. 1051.53 Announcement of class prices, component prices, and advanced pricing factors. See Sec. 1000.53. Sec. 1051.54 Equivalent price. See Sec. 1000.54. Marketwide Service Payments Sec. 1051.55 Transportation credits. (a) Payments for transportation credits to handlers and cooperative associations shall be made as follows: (1) On or before the 13th day (except as provided in Sec. 1000.90) after the end of each month the market administrator shall pay to each handler, including cooperative associations acting as handlers that delivered and reported pursuant to Sec. 1051.30 (c), milk directly from producers' farms as specified in paragraph (b)(1) to plants as specified in (b)(1) and (2) of this section, an amount determined pursuant to paragraph (c) of this section. (2) Transportation credits paid pursuant to this section shall be subject to final verification by the market administrator pursuant to Sec. 1000.77; and (b) Transportation credits shall apply to the following: (1) Bulk milk delivered directly from dairy farms to pool plants described in (b)(2) in the following Transportation Zones: (i) Transportation Zone 1--deliveries to plants located in the counties of Los [[Page 47215]] Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura originating from dairy farms located in the counties of Riverside, San Diego, or San Bernardino; (ii) Transportation Zone 2--deliveries to plants located in the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura originating from dairy farms located in all counties within the marketing area except Riverside, San Diego, and San Bernardino; (iii) Transportation Zone 3--deliveries to plants located in the counties of Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, Santa Cruz, San Mateo, Sacramento, Solano and Sonoma Counties originating from dairy farms located in all counties within the marketing area; (2) Pool plant(s) which for the month have utilization of greater than 50 percent in Classes I and/or II. The utilization requirement may be met for the current month or it may be met on the basis of utilization during the preceding 12-month period ending with the current month. (c) Transportation credits shall be calculated at the following rates: (1) With respect to each delivery described in paragraph (b)(1) of this section, the market administrator shall: (i) Determine the shortest hard-surface highway mileage between the shipping farm and the receiving plant. The mileage determined by this calculation shall not be greater than 225; (ii) Multiply the pounds determined in Sec. 1051.55(b)(1) by the rate for the month computed pursuant to Sec. 1051.56(a)(6) for each Transportation Zone. Sec. 1051.56 Mileage rate for transportation credits. (a) The market administrator shall compute the fuel adjustor rate and the hundredweight rate each moth as follows: (1) For the fuel adjustor rate compute the simple average rounded to three decimal places for the most recent 8 weeks of the Diesel (on Highway)--All Types Price per gallon as reported by the Energy Information Administration of the United States Department of Energy for the series California Number 2 Diesel Retail Prices; (2) From the result in paragraph (a)(1) in this section subtract $4.099 per gallon; (3) Divide the result in paragraph (a)(2) of this section by 5.8, and round to three decimal places to compute the fuel cost adjustment factor; (4) Divide the result in paragraph (a)(3) of this section by 520; (5) Round the result in paragraph (a)(4) of this section to five decimal places to compute the fuel adjustor rate. (6) Compute the per hundredweight rate as follows: (i) For Transportation Zone 1 the sum of $0.04497 plus the product of the miles determined in Sec. 1051.55(c)(1)(i) times the sum of $0.00318 plus the amount determined in Sec. 1051.56(a)(5); (ii) For Transportation Zone 2 the sum of $0.00485 plus the product of the miles determined in Sec. 1051.55(c)(1)(i) times the sum of $0.00546 plus the amount determined in Sec. 1051.56(a)(5); (iii) For Transportation Zone 3 the sum of $0.05441 plus the product of the miles determined in Sec. 1051.55(c)(1)(i) times the sum of $0.00571 plus the amount determined in Sec. 1051.56(a)(5); (b) The market administrator shall announce publicly on or before the 23rd day of the month (except as provided in Sec. 1000.90 of this chapter) the fuel adjustor rate pursuant to paragraph (a) of this section for the following month. Producer Prices Sec. 1051.60 Handler's value of milk. For the purpose of computing a handler's obligation for producer milk, the market administrator shall determine for each month the value of milk of each handler with respect to each of the handler's pool plants and of each handler described in Sec. 1000.9(c) with respect to milk that was not received at a pool plant by adding the amounts computed in paragraphs (a) through (i) of this section and subtracting from that total amount the values computed in paragraphs (i) and (j) of this section. Unless otherwise specified, the skim milk, butterfat, and the combined pounds of skim milk and butterfat referred to in this section shall result from the steps set forth in Sec. 1000.44(a), (b), and (c), respectively, and the nonfat components of producer milk in each class shall be based upon the proportion of such components in producer skim milk. Receipts of nonfluid milk products that are distributed as labeled reconstituted milk for which payments are made to the producer-settlement fund of another Federal order under Sec. 1000.76(a)(4) or (d) shall be excluded from pricing under this section. (a) Class I value. (1) Multiply the pounds of skim milk in Class I by the Class I skim milk price; and (2) Add an amount obtained by multiplying the pounds of butterfat in Class I by the Class I butterfat price; (3) Deduct for each pound of milk solids-not-fat in nonfat dry milk used for fortifying Class I products during the current month a maximum charge equal to the current Class I solids not fat price [the Class I skim milk price in the $2.10 zone divided by 9], less the current Class IV solids not fat price established in Sec. 1051.53. In no case shall the deduction be less than zero cents ($0.00) nor more than nineteen and eighty-five hundredths cents ($0.1985); and (4) Deduct for each pound of milk solids-not-fat in condensed skim milk used for fortifying Class I products during the current month a maximum charge equal to the current Class I solids not fat price [the Class I skim milk price in the $2.10 zone divided by 9], less the current Class II solids not fat price established in Sec. 1051.53. In no case shall the deduction be less than zero cents ($0.00) nor more than nine and eighty-seven hundredths cents ($0.0987). (b) Class II value. (1) Multiply the pounds of nonfat solids in Class II skim milk by the Class II nonfat solids price; and (2) Add an amount obtained by multiplying the pounds of butterfat in Class II times the Class II butterfat price. (c) Class III value. (1) Multiply the pounds of protein in Class III skim milk by the protein price; (2) Add an amount obtained by multiplying the pounds of other solids in Class III skim milk by the other solids price; and (3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price. (d) Class IV value. (1) Multiply the pounds of nonfat solids in Class IV skim milk by the nonfat solids price; and (2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price. (e) Multiply the pounds of skim milk and butterfat overage assigned to each class pursuant to Sec. 1000.44(a)(11) and the corresponding step of Sec. 1000.44(b) by the skim milk prices and butterfat prices applicable to each class. (f) Multiply the difference between the current month's Class I, II, or III price, as the case may be, and the Class IV price for the preceding month and by the hundredweight of skim milk and butterfat subtracted from Class I, II, or III, respectively, pursuant to Sec. 1000.44(a)(7) and the corresponding step of Sec. 1000.44(b). (g) Multiply the difference between the Class I price applicable at the location of the pool plant and the Class IV price by the hundredweight of skim milk and butterfat assigned to Class I pursuant to Sec. 1000.43(d) and the hundredweight of skim milk and butterfat subtracted from Class I [[Page 47216]] pursuant to Sec. 1000.44(a)(3)(i) through (vi) and the corresponding step of Sec. 1000.44(b), excluding receipts of bulk fluid cream products from plants regulated under other Federal orders and bulk concentrated fluid milk products from pool plants, plants regulated under other Federal orders, and unregulated supply plants. (h) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to Sec. 1000.43(d) and Sec. 1000.44(a)(3)(i) and the corresponding step of Sec. 1000.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to Sec. 1000.44(a)(8) and the corresponding step of Sec. 1000.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order. (i) For reconstituted milk made from receipts of nonfluid milk products, multiply $1.00 (but not more than the difference between the Class I price applicable at the location of the pool plant and the Class IV price) by the hundredweight of skim milk and butterfat contained in receipts of nonfluid milk products that are allocated to Class I use pursuant to Sec. 1000.43(d). (j) Compute the amount of credits applicable pursuant to Sec. 1051.55. Sec. 1051.61 Computation of producer component prices and producer price differential. For each month the market administrator shall compute producer component prices per pound for butterfat, protein, and other solids. The report of any handler who has not made payments required pursuant to Sec. 1051.71 for the preceding month shall not be included in the computation of the producer component prices, and such handler's report shall not be included in the computation for succeeding months until the handler has made full payment of outstanding monthly obligations. Subject to the conditions of this paragraph, the market administrator shall compute the producer component prices in the following manner: (a) Combine into one total the values computed pursuant to Sec. 1051.60 for all handlers required to file reports prescribed Sec. 1051.50; (1) Subtract the value of quota premium for the month as reported to the Market Administrator by CDFA; (b) Subtract the total values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to Sec. 1051.60 by the protein price, other solids price, and the butterfat price, respectively; (c) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund; (d) Divide the resulting amount by the sum of the following for all handlers included in these computations: (1) The total hundredweight of producer milk; and (2) The total hundredweight for which a value is computed pursuant to Sec. 1051.60(g); and, (e) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result shall be known as the producer price differential for the month (applicable in Sec. 1000.76(a)(2)). (f) The producer butterfat protein, and other solids, prices shall be the result of the following computations. (1) The percentage contribution that the value of butterfat, protein, and other solids make to the Class III price shall be computed and announced by the Market Administrator on or before January 1 of the year for which the percentages will be applicable. The percentages will be computed as an average based on the prior fiscal year of December 1st through November 30th. (2) The producer butterfat price shall be the result of adding the price computed in Sec. 1000.50(l) to the result of multiplying the percentage butterfat contribution announced in paragraph (f)(1) by the producer price differential value and dividing the result by the handler's total pounds of butterfat contained in the milk for which an obligation was computed pursuant to Sec. 1051.60, and rounded to the fourth decimal place. (3) The producer protein price shall be the result of adding the price computed in Sec. 1000.50(n) to the result of multiplying the percentage protein contribution announced in paragraph (f)(1) by the producer price differential value and dividing the result by the handler's total pounds of protein contained in the milk for which an obligation was computed pursuant to Sec. 1051.60, and rounded to the fourth decimal place. (4) The producer other solids price shall be the result of adding the price computed in Sec. 1000.50(o) to the result of multiplying the percentage other solids contribution announced in paragraph (f)(1) by the producer price differential value and dividing the result by the handler's total pounds of other solids contained in the milk for which an obligation was computed pursuant to Sec. 1051.60, and rounded to the fourth decimal place. Sec. 1051.62 Announcement of producer prices. On or before the 11th day after the end of each month, the market administrator shall announce publicly the following prices and information: (a) The producer protein price; (1) The quota premium for nonfat solids; (b) The producer other solids price; (c) The producer butterfat price; and (d) The statistical uniform price for non-quota milk containing 3.5 percent butterfat, shall be the sum of the producer protein price multiplied by 2.9915, the producer other solids price multiplied by 5.6935, and the producer butterfat price multiplied by 3.5. Subpart C--Payments for Milk Producer Payments Sec. 1051.70 Producer-settlement fund. See Sec. 1000.70. Sec. 1051.71 Payments to the producer-settlement fund. Each handler shall make payment to the producer-settlement fund in a manner that provides receipt of the funds by the market administrator no later than the 13th day after the end of the month (except as provided in Sec. 1000.90). Payment shall be the amount, if any, by which the amount specified in paragraph (a) of this section exceeds the amount specified in paragraph (b) of this section: (a) The total value of milk to the handler for the month as determined pursuant to Sec. 1051.60. (b) The sum of: (1) An amount equal to the quota premium value of producer milk of the handler as reported by CDFA; (2) An amount obtained by multiplying the total pounds of protein, other solids, and butterfat contained in producer milk by the producer protein, producer other solids, and producer butterfat prices respectively; and (3) An amount obtained by multiplying the pounds of skim milk and butterfat for which a value was computed pursuant to Sec. 1051.60(i) by the producer price differential as [[Page 47217]] adjusted pursuant to Sec. 1051.75 for the location of the plant from which received. Sec. 1051.72 Payments from the producer-settlement fund. No later than the 14th day after the end of each month (except as provided in Sec. 1000.90), the market administrator shall pay to each handler the amount, if any, by which the amount computed pursuant to Sec. 1051.71(b) exceeds the amount computed pursuant to Sec. 1051.71(a); and to each cooperative 9(c) handler the quota premium value of its producer milk as reported by CDFA. If, at such time, the balance in the producer-settlement fund is insufficient to make all payments pursuant to this section, the market administrator shall reduce uniformly such payments and shall complete the payments as soon as the funds are available. Sec. 1051.73 Payments to producers and to cooperative associations. (a) Each handler shall pay each producer for producer milk for which payment is not made to a cooperative association pursuant to paragraph (b) of this section, as follows: (1) Partial payment. For each producer who has not discontinued shipments as of the date of this partial payment, payment shall be made so that it is received by each producer on or before the 30th day of the month (except as provided in Sec. 1000.90) for milk received during the first 15 days of the month from the producer at not less than the lowest announced class price for the preceding month, less proper deductions authorized in writing by the producer. (2) Final payment. For milk received during the month, payment shall be made so that it is received by each producer no later than the 15th day after the end of the month (except as provided in Sec. 1000.90) in an amount equal to not less than the sum of: (i) The pounds of butterfat received times the producer butterfat price for the month; (ii) The value of quota premium for nonfat solids of producer milk of the producer as reported to the Market Administrator by CDFA [net of any deductions if applicable for degraded volumes of nonfat solids otherwise entitled to a quota premium]; (iii) The pounds of protein received times the producer protein price for the month; (iv) The pounds of other solids received times the producer other solids price for the month; (v) Less any payment made pursuant to paragraph (a)(1) of this section; (vi) Less proper deductions authorized in writing by such producer, and plus or minus adjustments for errors in previous payments to such producer subject to approval by the market administrator; and (vii) Less deductions for marketing services pursuant to Sec. 1000.86. (b) Payments for milk received from cooperative association members. On or before the day prior to the dates specified in paragraphs (a)(1) and (a)(2) of this section (except as provided in Sec. 1000.90), each handler shall pay to a cooperative association for milk from producers who market their milk through the cooperative association and who have authorized the cooperative to collect such payments on their behalf an amount equal to the sum of the individual payments otherwise payable for such producer milk pursuant to paragraphs (a)(1) and (a)(2) of this section. (c) Payment for milk received from cooperative association pool plants or from cooperatives as handlers pursuant to Sec. 1000.9(c). On or before the day prior to the dates specified in paragraphs (a)(1) and (a)(2) of this section (except as provided in Sec. 1000.90), each handler who receives fluid milk products at its plant from a cooperative association in its capacity as the operator of a pool plant or who receives milk from a cooperative association in its capacity as a handler pursuant to Sec. 1000.9(c), including the milk of producers who are not members of such association and who the market administrator determines have authorized the cooperative association to collect payment for their milk, shall pay the cooperative for such milk as follows: (1) For bulk fluid milk products and bulk fluid cream products received from a cooperative association in its capacity as the operator of a pool plant and for milk received from a cooperative association in its capacity as a handler pursuant to Sec. 1000.9(c) during the first 15 days of the month, at not less than the lowest announced class prices per hundredweight for the preceding month; (2) For the total quantity of bulk fluid milk products and bulk fluid cream products received from a cooperative association in its capacity as the operator of a pool plant, at not less than the total value of such products received from the association's pool plants, as determined by multiplying the respective quantities assigned to each class under Sec. 1000.44, as follows: (i) The hundredweight of Class I skim milk times the Class I skim milk price for the month plus the pounds of Class I butterfat times the Class I butterfat price for the month. The Class I price to be used shall be that price effective at the location of the receiving plant; (ii) The pounds of nonfat solids in Class II skim milk by the Class II nonfat solids price; (iii) The pounds of butterfat in Class II times the Class II butterfat price; (iv) The pounds of nonfat solids in Class IV times the nonfat solids price; (v) The pounds of butterfat in Class III and Class IV milk times the butterfat price; (vi) The pounds of protein in Class III milk time the protein price; (vii) The pounds of other solids in Class III milk times the other solids price; and (viii) Add together the amounts computed in paragraphs (c)(2)(i) through (vii) of this section and from that sum deduct any payment made pursuant to paragraph (c)(1) of this section; (3) For the total quantity of milk received during the month from a cooperative association in its capacity as a handler under Sec. 1000.9(c) as follows: (i) The pounds of butterfat received times the producer butterfat price for the month; (ii) The pounds of protein received times the producer protein price for the month; (iii) The pounds of other solids received times the producer other solids price for the month; and (iv) Add together the amounts computed in paragraphs (c)(3)(i) through (iii) of this section and from that sum deduct any payment made pursuant to paragraph (c)(1) of this section. (d) If a handler has not received full payment from the market administrator pursuant to Sec. 1051.72 by the payment date specified in paragraph (a), (b) or (c) of this section, the handler may reduce pro rata its payments to producers or to the cooperative association (with respect to receipts described in paragraph (b) of this section, prorating the underpayment to the volume of milk received from the cooperative association in proportion to the total milk received from producers by the handler), but not by more than the amount of the underpayment. The payments shall be completed on the next scheduled payment date after receipt of the balance due from the market administrator. (e) If a handler claims that a required payment to a producer cannot be made because the producer is deceased or cannot be located, or because the cooperative association or its lawful successor or assignee is no longer in existence, the payment shall be made to [[Page 47218]] the producer-settlement fund, and in the event that the handler subsequently locates and pays the producer or a lawful claimant, or in the event that the handler no longer exists and a lawful claim is later established, the market administrator shall make the required payment from the producer- settlement fund to the handler or to the lawful claimant, as the case may be. (f) In making payments to producers pursuant to this section, each handler shall furnish each producer, except a producer whose milk was received from a cooperative association handler described in Sec. 1000.9(a) or (c), a supporting statement in a form that may be retained by the recipient which shall show: (1) The name, address, Grade A identifier assigned by a duly constituted regulatory agency, and payroll number of the producer; (2) The daily and total pounds, and the month and dates such milk was received from that producer; (3) The total pounds of butterfat, protein, and other solids contained in the producer's milk; (4) The pounds of quota nonfat solids in the producer's milk; (5) The minimum rate or rates at which payment to the producer is required pursuant to the order in this part; (6) The rate used in making payment if the rate is other than the applicable minimum rate; (7) The amount, or rate per hundredweight, or rate per pound of component, and the nature of each deduction claimed by the handler; and (8) The net amount of payment to the producer or cooperative association. Sec. 1051.74 [Reserved] Sec. 1051.75 Plant location adjustments for nonpool milk. For purposes of making payments for nonpool milk, a plant location adjustment shall be determined by subtracting the Class I price specified in Sec. 1051.51 from the Class I price at the plant's location. The difference, plus or minus as the case may be, shall be used to adjust the payments required pursuant to Sec. 1000.76. Sec. 1051.76 Payments by a handler operating a partially regulated distributing plant. See Sec. 1000.76. Sec. 1051.77 Adjustment of accounts. See Sec. 1000.77. Sec. 1051.78 Charges on overdue accounts. See Sec. 1000.78. Administrative Assessment and Marketing Service Deduction Sec. 1051.85 Assessment for order administration. On or before the payment receipt date specified under Sec. 1051.71, each handler shall pay to the market administrator its pro rata share of the expense of administration of the order at a rate specified by the market administrator that is no more than 8 cents per hundredweight with respect to: (a) Receipts of producer milk (including the handler's own production) other than such receipts by a handler described in Sec. 1000.9(c) that were delivered to pool plants of other handlers; (b) Receipts from a handler described in Sec. 1000.9(c); (c) Receipts of concentrated fluid milk products from unregulated supply plants and receipts of nonfluid milk products assigned to Class I use pursuant to Sec. 1000.43(d) and other source milk allocated to Class I pursuant to Sec. 1000.44(a)(3) and (8) and the corresponding steps of Sec. 1000.44(b), except other source milk that is excluded from the computations pursuant to Sec. 1051.60(h) and (i); and (d) Route disposition in the marketing area from a partially regulated distributing plant that exceeds the skim milk and butterfat subtracted pursuant to Sec. 1000.76(a)(1)(i) and (ii). Sec. 1051.86 Deduction for marketing services. See Sec. 1000.86. Subpart D--Miscellaneous Provisions Sec. 1051.90 Dates See Sec. 1000.90. Proposal Number 2 Submitted by the Dairy Institute of California. 0 4. This proposal seeks to add a new part 1051 to read as follows: PART 1051--MILK IN THE CALIFORNIA MARKETING AREA Subpart A--Order Regulating Handling Sec. General Provisions 1051.1 General Provisions. Definitions 1051.2 California marketing area. 1051.3 Route disposition. 1051.4 Plant. 1051.5 Distributing plant. 1051.6 Supply plant. 1051.7 Pool plant. 1051.8 Nonpool plant. 1051.9 Handler. 1051.10 Producer-handler. 1051.11 California quota program and producer quota. 1051.12 Producer. 1051.13 Producer milk. 1051.14 Other source milk. 1051.15 Fluid milk product. 1051.16 Fluid cream product. 1051.17 [Reserved] 1051.18 Cooperative association. 1051.19 Commercial food processing establishment. Market Administrator, Continuing Obligations, and Handler Responsibilities 1051.25 Market administrator. 1051.26 Continuity and separability of provisions. 1051.27 Handler responsibility for records and facilities. 1051.28 Termination of obligations. Handler Reports 1051.30 Reports of receipts and utilization. 1051.31 Producer and payroll reports. 1051.32 Other reports. Subpart B--Milk Pricing Classification of Milk 1051.40 Classes of utilization. 1051.41 [Reserved] 1051.42 Classification of transfers and diversions. 1051.43 General classification rules. 1051.44 Classification of producer milk. 1051.45 Market administrator's reports and announcements concerning classification. Class Prices 1051.50 Class prices, component prices, and advanced pricing factors. 1051.51 Class I differential and price. 1051.52 Adjusted Class I differentials. 1051.53 Announcement of class prices, component prices, and advanced pricing factors. 1051.54 Equivalent price. 1051.55 Transportation credits and transportation allowances. Producer Price Differential 1051.60 Handler's value of milk. 1051.61 Computation of producer price differential. 1051.62 Announcement of producer prices. 1051.68 Payments to producers under the California Quota Program. Subpart C--Payments for Milk Producer Payments 1051.70 Producer-settlement fund. 1051.71 Payments to the producer-settlement fund. 1051.72 Payments from the producer-settlement fund. 1051.73 Partial payments to producers and to cooperative associations. 1051.74 [Reserved] 1051.75 Plant location adjustments for producer milk and nonpool milk. 1051.76 Payments by a handler operating a partially regulated distributing plant. 1051.77 Adjustment of accounts. 1051.78 Charges on overdue accounts. [[Page 47219]] Administrative Assessment and Marketing Service Deduction 1051.85 Assessment for order administration. 1051.86 Deduction for marketing services. Subpart D--Miscellaneous Provisions 1051.90 Dates. Authority: 7 U.S.C. 601--608 Subpart A--Order Regulating Handling General Provisions Sec. 1051.1 General provisions. The terms, definitions, and provisions in part 1000 of this chapter apply to this part 1051 unless otherwise specified. In this part 1051, all references to sections in part 1000 refer to part 1000 of this chapter. Definitions Sec. 1051.2 California marketing area. The marketing area means all territory within the bounds of the following states and political subdivisions, including all piers, docks, and wharves connected therewith and all craft moored thereat, and all territory occupied by government (municipal, State, or Federal) reservations, installations, institutions, or other similar establishments if any part thereof is within any of the listed states or political subdivisions: All of the State of California. Sec. 1051.3 Route Distribution See Sec. 1000.3. Sec. 1051.4 Plant See Sec. 1000.4. Sec. 1051.5 Distributing plant. See Sec. 1000.5. Sec. 1051.6 Supply plant. See Sec. 1000.6. Sec. 1051.7 Pool plant. Pool plant means a plant, unit of plants, or system of plants as specified in paragraphs (a) through (f) of this section, but excluding a plant specified in paragraph (h) of this section. The pooing standards described in paragraphs (c) and (f) of this section are subject to modification pursuant to paragraph (g) of this section: (a) A distributing plant, other than a plant qualified as a pool plant pursuant to paragraph (b) of this section or Sec. ___.7(b) of any other Federal milk order, from which during the month 15 percent or more of the total quantity of fluid milk products physically received at the plant (excluding concentrated milk received from another plant by agreement for other than Class I use) are disposed of as route disposition or are transferred in the form of packaged fluid milk products to other distributing plants. At least 25 percent of such route disposition and transfers must be to outlets in the marketing area. (b) Any distributing plant located in the marketing area which during the month processed at least 15 percent of the total quantity of fluid milk products physically received at the plant (excluding concentrated milk received from another plant by agreement for other than Class I use) into ultra-pasteurized or aseptically-processed fluid milk products. (c) A supply plant from which the quantity of bulk fluid milk products shipped to (and physically unloaded into) plants described in paragraph (c)(1) of this section is not less than 10 percent of the Grade A milk received from dairy farmers (except dairy farmers described in Sec. 1051.12(b)) and handlers described in Sec. 1051.9(c) or (d), including milk diverted pursuant to Sec. 1051.13, subject to the following conditions: (1) Qualifying shipments may be made to plants described in paragraphs (c)(1)(i) through (iv) of this section, except that whenever shipping requirements are increased pursuant to paragraph (f) of this section, only shipments to pool plants described in paragraphs (a), (b), and (d) of this section shall count as qualifying shipments for the purpose of meeting the increased shipments: (i) Pool plants described in Sec. 1051.7(a), (b), and (d); (ii) Plants of producer-handlers; (iii) Partially regulated distributing plants, except that credit for such shipments shall be limited to the amount of such milk classified as Class I at the transferee plant; and (iv) Distributing plants fully regulated under other Federal orders, except that credit for shipments to such plants shall be limited to the quantity shipped to (and physically unloaded into) pool distributing plants during the month and credits for shipments to other order plants shall not include any such shipments made on the basis of agreed-upon Class II, Class III, or Class IV utilization. (2) The percentage of Grade A milk received from dairy farmers by a supply plant described in paragraph (c) of this section that must be shipped to (and physically unloaded into) plants described in paragraph (c)(1)(i) through (iv) of this section shall be adjusted upward or downward based on the average Class I utilization percentage of all producer milk under the order for the three prior months for which such information is available, as described in paragraphs (c)(2)((i) through (viii) of this section. The market administrator shall announce any adjustment to the supply plant shipping percentages pursuant to this paragraph at least 15 days prior to the month that such adjustments shall be effective as follows: (i) If the average Class I utilization percentage as described in paragraph (c)(2) of this section is between 15 percent and 19.9 percent, the required shipping percentage for a supply plant described in paragraph (c) of this section shall be 15 percent. (ii) If the average Class I utilization percentage as described in paragraph (c)(2) of this section is between 20 percent and 24.9 percent, the required shipping percentage for a supply plant described in paragraph (c) of this section shall be 20 percent. (iii) If the average Class I utilization percentage as described in paragraph (c)(2) of this section is between 25 percent and 29.9 percent, the required shipping percentage for a supply plant described in paragraph (c) of this section shall be 25 percent. (iv) If the average Class I utilization percentage as described in paragraph (c)(2) of this section is between 30 percent and 34.9 percent, the required shipping percentage for a supply plant described in paragraph (c) of this section shall be 30 percent. (v) If the average Class I utilization percentage as described in paragraph (c)(2) of this section is between 35 percent and 39.9 percent, the required shipping percentage for a supply plant described in paragraph (c) of this section shall be 35 percent. (vi) If the average Class I utilization percentage as described in paragraph (c)(2) of this section is between 40 percent and 44.9 percent, the required shipping percentage for a supply plant described in paragraph (c) of this section shall be 40 percent. (vii) If the average Class I utilization percentage as described in paragraph (c)(2) of this section is between 45 percent and 49.9 percent, the required shipping percentage for a supply plant described in paragraph (c) of this section shall be 45 percent. (viii) If the average Class I utilization percentage as described in paragraph (c)(2) of this section is 50 percent or greater, the required shipping percentage for a supply plant described in paragraph (c) of this section shall be 50 percent. (3) A supply plant under this paragraph and handlers described in Sec. Sec. 1051.9 (c) or 1051.9 (d) that receives quota milk from producers must make qualifying shipments of no less than 60 percent of such milk, or an equivalent [[Page 47220]] volume (including milk diverted pursuant to Sec. 1051.13), to plants described in Sec. 1051.7(a), (b), or (d). (4) During the months of July through February, the operator of a supply plant under this paragraph shall make qualifying shipments of up to 85 percent of the quota milk, or an equivalent volume of non-quota milk it physically receives from producers in its own plants (including milk diverted pursuant to Sec. 1051.13) to pool distributing plants for Class I uses if requested by the operator of such pool distributing plant or as directed by the market administrator, subject to the following conditions: (i) The operator of such a supply plant is not obligated to ship milk in excess of Class I usage to the pool distributing plant. (ii) The maximum percentage of quota milk that must be shipped to (and physically unloaded into) pool distributing plants and the month during which such milk must be shipped may be adjusted by the market administrator subject to market conditions. (5) Concentrated milk transferred from the supply plant to a distributing plant for an agreed-upon use other than Class I shall be excluded from the supply plant's shipments in computing the supply plant's shipping percentage. (d) Two or more plants operated by the same handler and located in the marketing area may qualify for pool status as a unit by meeting the total and in-area route disposition requirements of a pool distributing plant specified in paragraph (a) of the is section and subject to the following additional requirements: (1) At least one of the plants in the unit must qualify as a pool plant pursuant to paragraph (a) of this section; (2) Other plants in the unit must process Class I or Class II products, using 50 percent or more of the total Grade A fluid milk products received in bulk from at such plant or diverted therefrom by the plant operator in Class I or Class II products; and (3) The operator of the unit has filed a written request with the market administrator prior to the first day of the month for which such status is desired to be effective. The unit shall continue from month- to-month thereafter without further notification. The handler shall notify the market administrator in writing prior to the first day of any month for which termination or any change of the unit is desired. (e) A system of 2 or more supply plants operated by one or more handlers may qualify for pooling by meeting the shipping requirements of paragraph (c) of this section in the same manner as a single plant subject to the following additional requirements: (1) Each plant in the system is located within the marketing area. Cooperative associations or other handlers may not use shipments pursuant to Sec. 1051.9(c) or Sec. 1051.9(d) to qualify supply plants located outside the marketing area; (2) The handler(s) establishing the system submits a written request to the market administrator on or before July 15 requesting that such plants qualify as a system for the period of August through July of the following year. Such request will contain a list of the plants participating in the system in the order, beginning with the last plant, in which the plants will be dropped from the system if the stem fails to qualify. Each plant that qualifies as a pool plant within a system shall continue each month as a plant in the system through the following July unless the handler(s) establishing the system submits a written request to the market administrator that the plant be deleted from the system or that the system be discontinued. Any plant that has been so deleted from a system, or that has failed to qualify in any month, will not be part of any system for the remaining months through July. The handler(s) that established a system may add a plant operated by such handler(s) to a system if such plant has been a pool plant each of the 6 prior months and would otherwise be eligible to be in a system, upon written request to the market administrator no later than the 15th day of the prior month. In the event of an ownership change or the business failure of a hander that is a participant in a system, the system may be reorganized to reflect such changes if a written request to file a new marketing agreement is submitted to the market administrator; and (3) If a system fails to qualify under the requirements of this paragraph, the handler responsible for qualifying the system shall notify the market administrator which plant or plants will be deleted from the system so that the remaining plants may be pooled as a system. If the handler fails to do so, the market administrator shall exclude one or more plants, beginning at the bottom of the list of plants in the system and continuing up the list as necessary until the deliveries are sufficient to qualify the remaining plants in the system. (f) The applicable shipping percentages of paragraphs (c) and (e) of this section and Sec. 1051.13.(d)(2) and (d)(3) may be increased or decreased, for all of part of the marketing area, by the market administrator if the market administrator finds that such adjustment is necessary to encourage needed shipments or to prevent uneconomic shipments. Before making such a finding, the market administrator shall investigate the need for adjustment either on the market administrator's own initiative or at the request of interested parties if the request is made in writing at least 15 days prior to the month for which the requested revision is desired effective. If the investigation shows that an adjustment of the shipping percentages might be appropriate, the market administrator shall issue a notice stating that an adjustment is being considered and invited data, views, and arguments. Any decision to revise an applicable shipping or diversion percentage must be issued in writing at least one day before the effective date. (g) The term pool plant shall not apply to the following plants: (1) A producer-handler as defined under any Federal order; (2) An exempt plant as defined in Sec. 1000.8(e); (3) A plant located within the marketing area and qualified pursuant to paragraph (a) of this section which meets the pooling requirements of another Federal order, and from which more than 50 percent of its route disposition has been in the other Federal order marketing area for 3 consecutive months; (4) A plant located outside any Federal order marketing area and qualified pursuant to paragraph (a) of this section that meets the pooling requirements of another Federal order and has had greater route disposition in such other Federal order's marketing area for 3 consecutive months; (5) A plant located in another Federal order marketing area and qualified pursuant to paragraph (a) of this section that meets the pooling requirements of such other Federal order and does not have a majority of its route distribution in this marketing area for 3 consecutive months, or if the plant is required to be regulated under such other Federal order without regard to its route disposition in any other Federal order marketing area; (6) A plant qualified pursuant to paragraph (c) of this section which also meets the pooling requirements of another Federal order and from which greater qualifying shipments are made to plants regulated under the other Federal order than are made to plants regulated under the order in this part, or the plant has automatic pooling status under the other Federal order; (7) That portion of a regulated plant designated as a nonpool plant that is physically separate and operated [[Page 47221]] separately from the pool portion of a regulated plant as a nonpool plant must be requested in advance and in writing by the handler and must be approved by the market administrator. (h) Any plant that qualifies as a pool plant in each of the immediately preceding 3 months pursuant to paragraph (a) of this section or the shipping percentages in paragraph (c) of this section that is unable to meet such performance standards for the current month because of unavoidable circumstances determined by the market administrator to be beyond the control of the handler operating the plant, such as a natural disaster (ice storm, wind storm, flood, fire, breakdown of equipment, or work stoppage, shall be considered to have met the minimum performance standards during the period of such unavoidable circumstances, but such relief shall not be granted for more than 2 consecutive months. Sec. 1051.8 Nonpool plant. See Sec. 1000.8. Sec. 1051.9 Handler. Handler means: (a) Any person who operates a pool plant or a nonpool plant. (b) Any person who receives packaged fluid milk products from a plant for resale and distribution to retail or wholesale outlets, any person who as a broker negotiates a purchase or sale of fluid milk products or fluid cream products from or to any pool or nonpool plant, and any person who by purchase or direction causes milk of producers to be picked up at the farm and/or moved to a plant. Persons who qualify as handlers only under this paragraph are not subject to the payment provisions of Sec. Sec. 1051.70, 1051.71, 1051.72, 1051.73, 1051.76, and 1051.85. (c) Any cooperative association with respect to milk that it receives for its account from the farm of a producer and delivers to pool plants or diverts to nonpool plants pursuant to Sec. 1051.13. The operator of a pool plant receiving milk from a cooperative association may be the handler for such milk if both parties notify the market administrator of this agreement prior to the time that the milk is delivered to the pool plant and the plant operator purchases the milk on the basis of farm bulk tank weights and samples. (d) Any person, except a cooperative association, who operates a pool plant or nonpool plant with respect to milk that it receives for its account from the farm of a producer in a tank truck owned and operated by, or under the control of, such person and which is delivered during the month for the account of such person to the pool plant of another handler or diverted pursuant to Sec. 1051.13, subject to the following conditions: (1) Such person (who, if qualified pursuant to this paragraph, shall be known as a ``proprietary bulk tank handler'') must operate a plant located in the marketing area at which milk is processed only into Class II, Class III, or Class IV products; (2) Prior to operating as a handler pursuant to this paragraph, such person must submit to the market administrator a statement signed by the applicant and the operator of the pool plant to which the milk will be delivered specifying that the applicant will be the responsible handler for the milk. Sec. 1051.10 Producer-handler. Producer handler means a person who operates a dairy farm and a distributing plant from which there is route disposition in the marketing area, from which total route disposition and packaged sales of fluid milk products to other plants during the month does not exceed 3 million pounds, and who the market administrator has designated a producer-handler after determining that all of the requirements of this section have been met. (a) Requirements for designation. Designation of any person as a producer-handler by the market administrator shall be contingent upon meeting the conditions set forth in paragraphs (a)(1) through (5) of this section. Following the cancellation of a previous producer-handler designation, a person seeking to have their producer-handler designation reinstated must demonstrate that these conditions have been met for the preceding month: (1) The care and management of the dairy animals and the other resources and facilities designated in paragraph (b)(1) of this section necessary to produce all Class I milk handled (excluding receipts from handlers fully regulated under any Federal order) are under the complete and exclusive control, ownership, and management of the producer-handler and are operated as the producer-handler's own enterprise and at its sole risk. (2) The plant operation designated in paragraph (b)(2) of this section at which the producer-handler processes and packages, and from which it distributes, its own milk production is under the complete and exclusive control, ownership, and management of the producer-handler and is operated as the producer-handler's own enterprise and at its sole risk. (3) The producer-handler neither receives at its designated milk production resources and facilities nor receives, handles, processes, or distributes at or through any of its designated milk handling, processing, or distributing resources and facilities other source milk products for reconstitution into fluid milk products or fluid milk products derived from any source other than: (i) Its designated milk production resources and facilities (own farm production); (ii) Pool handlers and plants regulated under any Federal order within the limitation specified in paragraph (c)(2) of this section; or (iii) Nonfat milk solids which are used to fortify fluid milk products. (4) The producer-handler is neither directly nor indirectly associated with the business control or management of, nor has a financial interest in, another handler's operation; nor is any other handler so associated with the producer-handler's operation. (5) No milk produced by the herd(s) or on the farm(s) that supply milk to the producer-handler's plant operation is: (i) Subject to inclusion and participation in a marketwide equalization pool under a milk classification and pricing program under the authority of a State government maintaining marketwide pooling of returns, or (ii) Marketed in any part as Class I milk to the non-pool distributing plant of any other handler. (b) Designation of resources and facilities. Designation of a person as a producer-handler shall include the determination of what shall constitute milk production, handling, processing, and distribution resources and facilities, all of which shall be considered an integrated operation, under the sole and exclusive ownership of the producer-handler. (1) Milk production resources and facilities shall include all resources and facilities (milking herd(s), buildings housing such herd(s), and the land on which such buildings are located) used for the production of milk which are solely owned, operated, and which the producer-handler has designated as a source of milk supply for the producer-handler's plant operation. However, for purposes of this paragraph, any such milk production resources and facilities which do not constitute an actual or potential source of milk supply for the producer-handler's operation shall not be considered a part of the producer-handler's milk production resources and facilities. [[Page 47222]] (2) Milk handling, processing, and distribution resources and facilities shall include all resources and facilities (including store outlets) used for handling, processing, and distributing fluid milk products which are solely owned by, and directly operated or controlled by the producer-handler or in which the producer-handler in any way has an interest, including any contractual arrangement, or over which the producer-handler directly or indirectly exercises any degree of management control. (3) All designations shall remain in effect until canceled pursuant to paragraph (c) of this section. (c) Cancellation. The designation as a producer-handler shall be canceled upon determination by the market administrator that any of the requirements of paragraph (a)(1) through (5) of this section are not continuing to be met, or under any of the conditions described in paragraphs (c)(1), (2), or (3) of this section. Cancellation of a producer-handler's status pursuant to this paragraph shall be effective on the first day of the month following the month in which the requirements were not met or the conditions for cancellation occurred. (1) Milk from the milk production resources and facilities of the producer-handler, designated in paragraph (b)(1) of this section, is delivered in the name of another person as producer milk to another handler. (2) The producer-handler handles fluid milk products derived from sources other than the milk production facilities and resources designated in paragraph (b)(1) of this section, except that it may receive at its plant, or acquire for route disposition, fluid milk products from fully regulated plants and handlers under any Federal order if such receipts do not exceed 150,000 pounds monthly. This limitation shall not apply if the producer-handler's own-farm production is less than 150,000 pounds during the month. (3) Milk from the milk production resources and facilities of the producer-handler is subject to inclusion and participation in a marketwide equalization pool under a milk classification and pricing plan operating under the authority of a State government. (d) Public announcement. The market administrator shall publicly announce: (1) The name, plant location(s), and farm location(s) of persons designated as producer-handlers; (2) The names of those persons whose designations have been cancelled; and (3) The effective dates of producer-handler status or loss of producer-handler status for each. Such announcements shall be controlling with respect to the accounting at plants of other handlers for fluid milk products received from any producer-handler. (e) Burden of establishing and maintaining producer-handler status. The burden rests upon the handler who is designated as a producer- handler to establish through records required pursuant to Sec. 1000.27 that the requirements set forth in paragraph (a) of this section have been and are continuing to be met, and that the conditions set forth in paragraph (c) of this section for cancellation of the designation do not exist. (f) Any producer-handler with Class I route dispositions and/or transfers of packaged fluid milk products in the marketing area described in Sec. 1131.2 of this chapter shall be subject to payments into the Order 1131 producer settlement fund on such dispositions pursuant to Sec. 1051.76(a) and payments into the Order 1131 administrative fund, provided such dispositions are less than three million pounds in the current month and such producer-handler had total Class I route dispositions and/or transfers of packaged fluid milk products from own farm production of three million pounds or more the previous month. If the producer-handler has Class I route dispositions and/or transfers of packaged fluid milk products into the marketing area described in Sec. 1131.2 of this chapter of three million pounds or more during the current month, such producer-handler shall be subject to the provisions described in Sec. 1131.7 of this chapter or Sec. 1051.76(a). (g) No handler operating a pool distributing plant shall be considered a producer-handler, unless it meets all of the conditions specified in Sec. 1051.10(a) through (e), regardless of whether or not the handler owns producer quota pursuant to Sec. 1051.11. Sec. 1051.11 California quota program and producer quota. (a) California Quota Program means the applicable provisions of the California Food and Agriculture Code, and related provisions of the pooling plan administered by the California Department of Food and Agriculture (CDFA). (b) Producer Quota is an individual producer's quota holdings of butterfat and nonfat milk solids components as defined by CDFA. (1) Quota milk means the producer's quota holdings of butterfat and the skim equivalent of the producer's holdings of nonfat milk solids components that qualify as producer milk under Sec. 1051.13. The skim equivalent of a producer's nonfat solids components and butterfat that qualify as producer milk under the order, and which are in excess of the producer's quota holdings of these components are designated as overquota butterfat and overquota nonfat milk solids, respectively. (2) The market administrator shall keep a record of each producer's quota holdings and shall obtain monthly updates from CDFA concerning any changes to each producer's quota holdings. (3) The market administrator shall report monthly the amount of each California producer's milk fat and nonfat solids components that were qualified as producer milk under the order to CDFA. (4) Each handler shall report monthly by 9 days after the end of the month the disposition of quota and overquota butterfat and nonfat milk solids components for that month. Sec. 1051.12 Producer. (a) Except as provided in paragraph (b) of this section, producer means any person who produces milk approved by a duly constituted regulatory agency for fluid consumption as Grade A milk and whose milk is: (1) Received at a pool plant directly from the producer or diverted by the plant operator in accordance with Sec. 1051.13; or (2) Received by a handler described in Sec. 1051.9(c) or (d). (b) Producer shall not include: (1) A producer-handler as defined in any Federal order; (2) A dairy farmer whose milk is received at an exempt plant, excluding producer milk diverted to the exempt plant pursuant to Sec. 1051.13(d); (3) A dairy farmer whose milk is received by diversion at a pool plant from a handler regulated under another Federal order if the other Federal order designates the dairy farmer as a producer under that order and that milk is allocated by request to a utilization other than Class I; and (4) A dairy farmer whose milk is reported as diverted to a plant fully regulated under another Federal order with respect to that portion of the milk so diverted that is assigned to Class I under the provisions of such other order. Sec. 1051.13 Producer milk. Except as provided for in paragraph (e) of this section, Producer milk means the skim milk (or the skim equivalent of components of skim milk), including nonfat components, and butterfat in milk of a producer that is: [[Page 47223]] (a) Received by the operator of a pool plant directly from a producer or a handler described in Sec. 1051.9(c) or (d). All milk received pursuant to this paragraph shall be priced at the location of the plant where it is first physically received; (b) Received by a handler described in Sec. 1051.9(c) or (d) in excess of the quantity delivered to pool plants; (c) Diverted by a pool plant operator to another pool plant. Milk so diverted shall be priced at the location of the plant to which diverted; or (d) Diverted by the operator of a pool plant or a cooperative association described in Sec. 1051.9(c) or (d) to a nonpool plant located in the marketing area, subject to the following conditions: (1) Milk of a dairy farmer shall not be eligible for diversion unless at least the lessor of one day's production or 48,000 pounds of milk of such dairy farmer is physically received as producer milk at a pool plant during the first month the dairy farmer is a producer. If a dairy farmer loses producer status under the order in this part (except as a result of a temporary loss of Grade A approval or as a result of the handler of the dairy farmer's milk failing to pool the milk under any order), the dairy farmer's milk shall not be eligible for diversion unless at least the lessor of one day's production, or 48,000 pounds of milk of the dairy farmer has been physically received as producer milk at a pool plant during the first month the dairy farmer is re- associated with the market; (2) The quantity of milk diverted by a handler described in Sec. 1051.9(c) and (d) may not exceed a percentage equal to 100 percent minus the supply plant shipping percentage specified in Sec. 1051.7(c) (or as adjusted pursuant to Sec. 1051.7(c)(2)) of the producer milk receipts reported by the handler pursuant to Sec. 1051.30(c), provided that not less than 10 percent of such receipts are delivered to plants described in Sec. 1051.7(c)(1)(i) through (iii). These percentages are subject to any adjustments that may be made pursuant to Sec. 1051.7(c)(2)(i) through (viii) or any additional adjustments made pursuant to Sec. 1051.7 (f); and (3) The quantity of milk diverted to nonpool plants by the operator of a pool plant described in Sec. 1051.7(a) or (b) may not exceed a percentage equal to 100 percent minus the supply plant shipping percentage specified in Sec. 1051.7(c) (or as adjusted pursuant to Sec. 1051.7 (c)(2)) of the Grade A milk received from dairy farmers (except dairy farmers described in Sec. 1051.12(b)) including milk diverted pursuant to Sec. 1051.13; and (4) Diverted milk shall be priced at the location of the plant to which diverted. (e) Producer milk shall not include milk of a producer that is subject to inclusion and participation in a marketwide equalization pool under a milk classification and pricing program imposed under the authority of a State government maintaining marketwide pooling of returns. (f) The quantity of milk reported by a handler pursuant to either Sec. 1051.30(a)(1) or Sec. 1051.30(c)(1) for April through February may not exceed 125 percent, and for March may not exceed 135 percent, of the producer milk receipts pooled by the handler during the prior month. Milk diverted to nonpool plants reported in excess of this limit shall be removed from the pool. Milk in excess of this limit received at pool plants, other than pool distributing plants, shall be classified pursuant to Sec. 1051.44(a)(3)(v) and Sec. 1051.44(b). The handler must designate, by producer pick-up, which milk is to be removed from the pool. If the handler fails to provide this information, the market administrator will make the determination. The following provisions apply: (1) Milk shipped to and physically received at pool distributing plants in excess of the previous month's pooled volume shall not be subject to the 125 or 135 percent limitation; (2) Producer milk qualified pursuant to Sec. 13 of any other Federal Order and continuously pooled in any Federal Order for the previous six months shall not be included in the computation of the 125 or 135 percent limitation; (3) The market administrator may waive the 125 or 135 percent limitation: (i) For a new handler on the order, subject to the provisions of Sec. 1051.13(f)(4), or (ii) For an existing handler with significantly changed milk supply conditions due to unusual circumstances; (4) A bloc of milk may be considered ineligible for pooling if the market administrator determines that handlers altered the reporting of such milk for the purpose of evading the provisions of this paragraph. Sec. 1051.14 Other source milk. Other source milk means all skim milk and butterfat contained in or represented by: (a) Receipts of fluid milk products and bulk fluid cream products from any source other than producers, handlers described in Sec. 1051.9(c) and (d), or pool plants; (b) Products (other than fluid milk products, fluid cream products, and products produced at the plant during the same month) from any source which are reprocessed, converted into, or combined with another product in the plant during the month; and (c) Receipts of any milk product (other than a fluid milk product or a fluid cream product) for which the handler fails to establish a disposition. Sec. 1051.15 Fluid milk products. See Sec. 1000.15. Sec. 1051.16 Fluid cream product. See Sec. 1000.16. Sec. 1051.17 [Reserved] Sec. 1051.18 Cooperative association. See Sec. 1000.18. Sec. 1051.19 Commercial food processing establishment. See Sec. 1000.19. Market Administrator, Continuing Obligations, and Handler Responsibilities Sec. 1051.25 Market administrator. See Sec. 1000.25. Sec. 1051.26 Continuity and separability of provisions. See Sec. 1000.26. Sec. 1051.27 Handler responsibility for records and facilities. See Sec. 1000.27. Sec. 1051.28 Termination of obligations. See Sec. 1000.28. Handler Reports Sec. 1051.30 Reports of receipts and utilization. Each handler shall report monthly so that the market administrator's office receives the report on or before the 9th day after the end of the month, in the detail and on the prescribed forms, as follows: (a) Each handler that operates a pool plant shall report for each of its operations the following information: (1) Product pounds, pounds of butterfat, pounds of protein, pounds of solids-not-fat other than protein (other solids), and the value of the somatic cell adjustment pursuant to Sec. 1051.50(r), contained in or represented by: (i) Receipts of producer milk, including producer milk diverted by the reporting handler, from sources other than handlers described in Sec. 1051.9(c) or (d); and (ii) Receipts of milk from handlers described in Sec. 1051.9(c) or (d); (2) Product pounds and pounds of butterfat contained in: [[Page 47224]] (i) Receipts of fluid milk products and bulk fluid cream products from other pool plants; (ii) Receipts of other source milk; and (iii) Inventories at the beginning and end of the month of fluid milk products and bulk fluid cream products; (3) The utilization or disposition of all milk and milk products required to be reported pursuant to this paragraph; and (4) Such other information with respect to the receipts and utilization of skim milk, butterfat, milk protein, other nonfat solids, and somatic cell information, as the market administrator may prescribe. (b) Each handler operating a partially regulated distributing plant shall report with respect to such plant in the same manner as prescribed for reports required by paragraph (a) of this section. Receipts of milk that would have been producer milk if the plant had been fully regulated shall be reported in lieu of producer milk. The report shall show also the quantity of any reconstituted skim milk in route disposition in the marketing area. (c) Each handler described in Sec. 1000.9(c) or (d) shall report: (1) The product pounds, pounds of butterfat, pounds of protein, pounds of solids-not-fat other than protein (other solids), and the value of the somatic cell adjustment pursuant to Sec. 1051.50(r), contained in receipts of milk from producers; and (2) The utilization or disposition of such receipts. (d) Each handler not specified in paragraphs (a) through (c) of this section shall report with respect to its receipts and utilization of milk and milk products in such manner as the market administrator may prescribe. Sec. 1051.31 Producer and payroll reports. (a) On or before the 6th day after the end of each month, each handler that operates a pool plant pursuant to Sec. 1051.7 and each handler described in Sec. 1051.9 (c) or (d) shall report to the market administrator its producer deliveries for the month, in the detail prescribed by the market administrator, showing for each producer the information described in Sec. 1051.73(e)(1) through (4). (b) On or before the 20th day after the end of each month, each handler that operates a pool plant pursuant to Sec. 1051.7 and each handler described in Sec. 1051.9 (c) and (d) shall report to the market administrator its producer payroll for the month, in the detail prescribed by the market administrator, showing for each producer the information described in Sec. 1051.73(e). (c) Each handler operating a partially regulated distributing plant who elects to make payment pursuant to Sec. 1051.76(b) shall report for each dairy farmer who would have been a producer if the plant had been fully regulated in the same manner as prescribed for reports required by paragraph (a) of this section. Sec. 1051.32 Other reports. In addition to the reports required pursuant to Sec. Sec. 1051.30 and 1051.31, each handler shall report any information the market administrator deems necessary to verify or establish each handler's obligation under the order. Subpart B--Milk Pricing Classification of Milk Sec. 1051.40 Classes of utilization. Except as provided in Sec. 1051.42, all skim milk and butterfat required to be reported pursuant to Sec. 1051.30 shall be classified as follows: (a) Class I milk shall be all skim milk and butterfat: (1) Disposed of in the form of fluid milk products, except as otherwise provided in this section; (2) In packaged fluid milk products in inventory at the end of the month; and (3) In shrinkage assigned pursuant to Sec. 1051.43(b). (b) Class II milk shall be all skim milk and butterfat: (1) In fluid milk products in containers larger than 1 gallon and fluid cream products disposed of or diverted to a commercial food processing establishment if the market administrator is permitted to audit the records of the commercial food processing establishment for the purpose of verification. Otherwise, such uses shall be Class I; (2) Used to produce: (i) Cottage cheese, lowfat cottage cheese, dry curd cottage cheese, ricotta cheese, pot cheese, Creole cheese, and any similar soft, high- moisture cheese resembling cottage cheese in form or use; (ii) Milkshake and ice milk mixes (or bases), frozen desserts, and frozen dessert mixes distributed in half-gallon containers or larger and intended to be used in soft or semi-solid form; (iii) Aerated cream, frozen cream, sour cream, sour half-and-half, sour cream mixtures containing non-milk items; yogurt, including yogurt containing beverages with 20 percent or more yogurt by weight and kefir, and any other semi-solid product resembling a Class II product; (iv) Custards, puddings, pancake mixes, coatings, batter, and similar products; (v) Buttermilk biscuit mixes and other buttermilk for baking that contain food starch in excess of 2 percent of the total solids, provided that the product is labeled to indicate the food starch content; (vi) Products especially prepared for infant feeding or dietary use (meal replacements) that are packaged in hermetically sealed containers and products that meet the compositional standards of Sec. 1000.15(a) but contain no fluid milk products included in Sec. 1000.15(a). (vii) Candy, soup, bakery products and other prepared foods which are processed for general distribution to the public, and intermediate products, including sweetened condensed milk, to be used in processing such prepared food products; (viii) A fluid cream product or any product containing artificial fat or fat substitutes that resembles a fluid cream product, except as otherwise provided in paragraph (c) of this section; and (ix) Any product not otherwise specified in this section; and (3) In shrinkage assigned pursuant to Sec. 1051.43(b). (c) Class III milk shall be all skim milk and butterfat: (1) Used to produce: (i) Cream cheese and other spreadable cheeses, and hard cheese of types that may be shredded, grated, or crumbled; (ii) Plastic cream, anhydrous milkfat, and butteroil; and (2) In shrinkage assigned pursuant to Sec. 1051.43(b). (d) Class IV milk shall be all skim milk and butterfat: (1) Used to produce: (i) Butter; and (ii) Evaporated or sweetened condensed milk in a consumer-type package; and (iii) Any milk product in dried form; (2) In inventory at the end of the month of fluid milk products and fluid cream products in bulk form; (3) In the skim milk equivalent of nonfat milk solids used to modify a fluid milk product that has not been accounted for in Class I and in the skim milk equivalent of nonfat milk solids used to modify a fluid milk product to meet the State of California's fluid milk standards as described in the California Food and Agricultural Code; and (4) In shrinkage assigned pursuant to Sec. 1051.43(b). (e) Other uses. Other uses include skim milk and butterfat used in any product described in this section that is dumped, used for animal feed, [[Page 47225]] destroyed, or lost by a handler in a vehicular accident, flood, fire, or similar occurrence beyond the handler's control. Such uses of skim milk and butterfat shall be assigned to the lowest priced class for the month to the extent that the quantities destroyed or lost can be verified from records satisfactory to the market administrator. Sec. 1051.41 [Reserved] Sec. 1051.42 Classification of transfers and diversions. (a) Transfers and diversions to pool plants. Skim milk or butterfat transferred or diverted in the form of a fluid milk product or transferred in the form of a bulk fluid cream product from a pool plant to another pool plant shall be classified as Class I milk unless the handlers both request the same classification in another class. In either case, the classification shall be subject to the following conditions: (1) The skim milk and butterfat classified in each class shall be limited to the amount of skim milk and butterfat, respectively, remaining in such class at the receiving plant after the computations pursuant to Sec. 1051.44(a)(9) and the corresponding step of Sec. 1051.44(b); (2) If the transferring plant received during the month other source milk to be allocated pursuant to Sec. 1051.44(a)(3) or the corresponding step of Sec. 1051.44(b), the skim milk or butterfat so transferred shall be classified so as to allocate the least possible Class I utilization to such other source milk; and (3) If the transferring handler received during the month other source milk to be allocated pursuant to Sec. 1051.44(a)(8) or (9) or the corresponding steps of Sec. 1051.44(b), the skim milk or butterfat so transferred, up to the total of the skim milk and butterfat, respectively, in such receipts of other source milk, shall not be classified as Class I milk to a greater extent than would be the case if the other source milk had been received at the receiving plant. (b) Transfers and diversions to a plant regulated under another Federal order. Skim milk or butterfat transferred or diverted in the form of a fluid milk product or transferred in the form of a bulk fluid cream product from a pool plant to a plant regulated under another Federal order shall be classified in the following manner. Such classification shall apply only to the skim milk or butterfat that is in excess of any receipts at the pool plant from a plant regulated under another Federal order of skim milk and butterfat, respectively, in fluid milk products and bulk fluid cream products, respectively, that are in the same category as described in paragraph (b)(1) or (2) of this section: (1) As Class I milk, if transferred as packaged fluid milk products; (2) If transferred or diverted in bulk form, classification shall be in the classes to which allocated under the other order: (i) If the operators of both plants so request in their reports of receipts and utilization filed with their respective market administrators, transfers in bulk form shall be classified as other than Class I to the extent that such utilization is available for such classification pursuant to the allocation provisions of the other order; (ii) If diverted, the diverting handler must request a classification other than Class I. If the plant receiving the diverted milk does not have sufficient utilization available for the requested classification and some of the diverted milk is consequently assigned to Class I use, the diverting handler shall be given the option of designating the entire load of diverted milk as producer milk at the plant physically receiving the milk. Alternatively, if the diverting handler so chooses, it may designate which dairy farmers whose milk was diverted during the month will be designated as producers under the order physically receiving the milk. If the diverting handler declines to accept either of these options, the market administrator will prorate the portion of diverted milk in excess of Class II, III, and IV use among all the dairy farmers whose milk was received from the diverting handler on the last day of the month, then the second-to-last day, and continuing in that fashion until the excess diverted milk has been assigned as producer milk under the receiving order; and (iii) If information concerning the classes to which such transfers or diversions were allocated under the other order is not available to the market administrator for the purpose of establishing classification under this paragraph, classification shall be Class I, subject to adjustment when such information is available. (c) Transfers and diversions to producer-handlers and to exempt plants. Skim milk or butterfat that is transferred or diverted from a pool plant to a producer-handler under any Federal order or to an exempt plant shall be classified: (1) As Class I milk if transferred or diverted to a producer- handler; (2) As Class I milk if transferred to an exempt plant in the form of a packaged fluid milk product; and (3) In accordance with the utilization assigned to it by the market administrator if transferred or diverted in the form of a bulk fluid milk product or transferred in the form of a bulk fluid cream product to an exempt plant. For this purpose, the receiving handler's utilization of skim milk and butterfat in each class, in series beginning with Class IV, shall be assigned to the extent possible to its receipts of skim milk and butterfat, in bulk fluid cream products, and bulk fluid milk products, respectively, pro rata to each source. (d) Transfers and diversions to other nonpool plants. Skim milk or butterfat transferred or diverted in the following forms from a pool plant to a nonpool plant that is not a plant regulated under another order, an exempt plant, or a producer-handler plant shall be classified: (1) As Class I milk, if transferred in the form of a packaged fluid milk product; and (2) As Class I milk, if transferred or diverted in the form of a bulk fluid milk product or transferred in the form of a bulk fluid cream product, unless the following conditions apply: (i) If the conditions described in paragraphs (d)(2)(i)(A) and (B) of this section are met, transfers or diversions in bulk form shall be classified on the basis of the assignment of the nonpool plant's utilization, excluding the milk equivalent of both nonfat milk solids and concentrated milk used in the plant during the month, to its receipts as set forth in paragraphs (d)(2)(ii) through (viii) of this section: (A) The transferring handler or diverting handler claims such classification in such handler's report of receipts and utilization filed pursuant to Sec. 1051.30 for the month within which such transaction occurred; and (B) The nonpool plant operator maintains books and records showing the utilization of all skim milk and butterfat received at such plant which are made available for verification purposes if requested by the market administrator; (ii) Route disposition in the marketing area of each Federal milk order from the nonpool plant and transfers of packaged fluid milk products from such nonpool plant to plants fully regulated thereunder shall be assigned to the extent possible in the following sequence: (A) Pro rata to receipts of packaged fluid milk products at such nonpool plant from pool plants; (B) Pro rata to any remaining unassigned receipts of packaged fluid milk products at such nonpool plant [[Page 47226]] from plants regulated under other Federal orders; (C) Pro rata to receipts of bulk fluid milk products at such nonpool plant from pool plants; and (D) Pro rata to any remaining unassigned receipts of bulk fluid milk products at such nonpool plant from plants regulated under other Federal orders; (iii) Any remaining Class I disposition of packaged fluid milk products from the nonpool plant shall be assigned to the extent possible pro rata to any remaining unassigned receipts of packaged fluid milk products at such nonpool plant from pool plants and plants regulated under other Federal orders; (iv) Transfers of bulk fluid milk products from the nonpool plant to a plant regulated under any Federal order, to the extent that such transfers to the regulated plant exceed receipts of fluid milk products from such plant and are allocated to Class I at the receiving plant, shall be assigned to the extent possible in the following sequence: (A) Pro rata to receipts of fluid milk products at such nonpool plant from pool plants; and (B) Pro rata to any remaining unassigned receipts of fluid milk products at such nonpool plant from plants regulated under other Federal orders; (v) Any remaining unassigned Class I disposition from the nonpool plant shall be assigned to the extent possible in the following sequence: (A) To such nonpool plant's receipts from dairy farmers who the market administrator determines constitute regular sources of Grade A milk for such nonpool plant; and (B) To such nonpool plant's receipts of Grade A milk from plants not fully regulated under any Federal order which the market administrator determines constitute regular sources of Grade A milk for such nonpool plant; (vi) Any remaining unassigned receipts of bulk fluid milk products at the nonpool plant from pool plants and plants regulated under other Federal orders shall be assigned, pro rata among such plants, to the extent possible first to any remaining Class I utilization and then to all other utilization, in sequence beginning with Class IV at such nonpool plant; (vii) Receipts of bulk fluid cream products at the nonpool plant from pool plants and plants regulated under other Federal orders shall be assigned, pro rata among such plants, to the extent possible to any remaining utilization, in sequence beginning with Class IV at such nonpool plant; and (viii) In determining the nonpool plant's utilization for purposes of this paragraph, any fluid milk products and bulk fluid cream products transferred from such nonpool plant to a plant not fully regulated under any Federal order shall be classified on the basis of the second plant's utilization using the same assignment priorities at the second plant that are set forth in this paragraph. Sec. 1051.43 General classification rules. In determining the classification of producer milk pursuant to Sec. 1051.44, the following rules shall apply: (a) Each month the market administrator shall correct for mathematical and other obvious errors all reports filed pursuant to Sec. 1051.30 and shall compute separately for each pool plant, for each handler described in Sec. 1051.9(c) or (d), the pounds of skim milk and butter fat, respectively, in each class in accordance with Sec. Sec. 1051.40 and 1051.42 and paragraph (b) of this section. (b) Shrinkage and Overage. For purposes of classifying all milk reported by a handler pursuant to Sec. 1051.30, the market administrator shall determine the shrinkage or overage of skim milk and butterfat for each pool plant and each handler described in Sec. 1051.9(c) or (d) by subtracting total utilization from total receipts. Any positive difference shall be shrinkage, and any negative difference shall be overage. (1) Shrinkage incurred by pool plants qualified pursuant to Sec. 1051.7 shall be assigned to the lowest-priced class to the extent that such shrinkage does not exceed: (i) Two percent, except for a pool plant qualified pursuant to Sec. 1051.7(b)--two percent plus any additional percentage calculated pursuant to Sec. 1051.43(b)(1)(v), of the total quantity of milk physically received at the plant directly from producers' farms on the basis of farm weights and tests; (ii) Plus 1.5 percent, except for a pool plant qualified pursuant to Sec. 1051.7(b)--1.5 percent plus any additional percentage calculated pursuant to Sec. 1051.43(b)(1)(v), of the quantity of bulk milk physically received on a basis other than farm weights and tests, excluding concentrated milk received by agreement for other than Class I use; (iii) Plus 0.5 percent, except for a pool plant qualified pursuant to Sec. 1051.7(b)--0.5 percent plus any additional percentage calculated pursuant to Sec. 1051.43(b)(1)(v), of the quantity of milk diverted by the plant operator to another plant on a basis other than farm weights and tests; and (iv) Minus 1.5 percent of the quantity of bulk milk transferred to other plants, excluding concentrated milk transferred by agreement for other than Class I use. (v) The additional percentage to be added pursuant to subparagraphs (i), (ii), and (iii) for a pool plant qualified pursuant to Sec. 1051.7(b) is the percentage of ultra-pasteurized or aseptically processed fluid milk and cream products of the total fluid milk and cream products produced by the plant during the month times 0.03, rounded to the nearest tenth of a percent. (2) A handler described in Sec. 1051.9(c) or (d) that delivers milk to plants on a basis other than farm weights and tests shall receive a lowest-priced-class shrinkage allowance of 0.5 percent of the total quantity of such milk picked up at producers' farms. (3) Shrinkage in excess of the amounts provided in paragraphs (b)(1) and (2) of this section shall be assigned to existing utilization in series starting with Class I. The shrinkage assigned pursuant to this paragraph shall be added to the handler's reported utilization and the result shall be known as the gross utilization in each class. (c) If any of the water but none of the nonfat solids contained in the milk from which a product is made is removed before the product is utilized or disposed of by the handler, the pounds of skim milk in such product that are to be considered under this part as used or disposed of by the handler shall be an amount equivalent to the nonfat milk solids contained in such product plus all of the water originally associated with such solids. If any of the nonfat solids contained in the milk from which a product is made are removed before the product is utilized or disposed of by the handler, the pounds of skim milk in such product that are to be considered under this part as used or disposed of by the handler shall be an amount equivalent to the nonfat milk solids contained in such product plus all of the water and nonfat solids originally associated with such solids, determined on a protein equivalent basis. (d) Skim milk and butterfat contained in receipts of bulk concentrated fluid milk and nonfluid milk products that are reconstituted for fluid use shall be assigned to Class I use, up to the reconstituted portion of labeled reconstituted fluid milk products, on a pro rata basis (except for any Class I use of specific concentrated receipts that is established by the handler) prior to any assignments underSec. 1051.44. Any remaining skim milk and butterfat in concentrated receipts shall be assigned to uses under Sec. 1051.44 on a pro rata basis, unless a specific use of such receipts is established by the handler. [[Page 47227]] Sec. 1051.44 Classification of producer milk. For each month the market administrator shall determine for each handler described in Sec. 1051.9(a) for each pool plant of the handler separately and for each handler described in Sec. 1051.9(c) and (d) of this section the classification of producer milk by allocating the handler's receipts of skim milk and butterfat to the handler's gross utilization of such receipts pursuant to Sec. 1051.43(b)(3) as follows: (a) Skim milk shall be allocated in the following manner: (1) Subtract from the pounds of skim milk in Class I the pounds of skim milk in: (i) Receipts of packaged fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk disposed of to such plant by handlers fully regulated under any Federal order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order; (ii) Packaged fluid milk products in inventory at the beginning of the month. This paragraph shall apply only if the pool plant was subject to the provisions of this paragraph or comparable provisions of another Federal order in the immediately preceding month; (iii) Fluid milk products received in packaged form from plants regulated under other Federal orders; and (iv) To the extent that the receipts described in paragraphs (a)(1)(i) through (iii) of this section exceed the gross Class I utilization of skim milk, the excess receipts shall be subtracted pursuant to paragraph (a)(3)(vi) of this section. (2) Subtract from the pounds of skim milk in Class II the pounds of skim milk in the receipts of skim milk in bulk concentrated fluid milk products and in other source milk (except other source milk received in the form of an unconcentrated fluid milk product or a fluid cream product) that is used to produce, or added to, any product in Class II (excluding the quantity of such skim milk that was classified as Class IV milk pursuant to Sec. 1051.40(d)(3)). To the extent that the receipts described in this paragraph exceed the gross Class II utilization of skim milk, the excess receipts shall be subtracted pursuant to paragraph (a)(3)(vi) of this section. (3) Subtract from the pounds of skim milk remaining in each class, in series beginning with Class IV, the pounds of skim milk in: (i) Receipts of bulk concentrated fluid milk products and other source milk (except other source milk received in the form of an unconcentrated fluid milk product); (ii) Receipts of fluid milk products and bulk fluid cream products for which appropriate health approval is not established and from unidentified sources; (iii) Receipts of fluid milk products and bulk fluid cream products from an exempt plant; (iv) Fluid milk products and bulk fluid cream products received from a producer-handler as defined under the order in this part, or any other Federal order; (v) Receipts of fluid milk products from dairy farmers for other markets; and (vi) The excess receipts specified in paragraphs (a)(1)(iv) and (a)(2) of this section. (4) Subtract from the pounds of skim milk remaining in all classes other than Class I, in sequence beginning with Class IV, the receipts of fluid milk products from an unregulated supply plant that were not previously subtracted in this section for which the handler requests classification other than Class I, but not in excess of the pounds of skim milk remaining in these other classes combined. (5) Subtract from the pounds of skim milk remaining in all classes other than Class I, in sequence beginning with Class IV, receipts of fluid milk products from an unregulated supply plant that were not previously subtracted in this section, and which are in excess of the pounds of skim milk determined pursuant to paragraphs (a)(5)(i) and (ii) of this section; (i) Multiply by 1.25 the pounds of skim milk remaining in Class I at this allocation step; and (ii) Subtract from the result in paragraph (a)(5)(i) the pounds of skim milk in receipts of producer milk and fluid milk products from other pool plants. (6) Subtract from the pounds of skim milk remaining in all classes other than Class I, in sequence beginning with Class IV, the pounds of skim milk in receipts of bulk fluid milk products from a handler regulated under another Federal order that are in excess of bulk fluid milk products transferred or diverted to such handler, if other than Class I classification is requested, but not in excess of the pounds of skim milk remaining in these classes combined. (7) Subtract from the pounds of skim milk remaining in each class, in series beginning with Class IV, the pounds of skim milk in fluid milk products and bulk fluid cream products in inventory at the beginning of the month that were not previously subtracted in this section. (8) Subtract from the pounds of skim milk remaining in each class at the plant receipts of skim milk in fluid milk products from an unregulated supply plant that were not previously subtracted in this section and that were not offset by transfers or diversions of fluid milk products to the unregulated supply plant from which fluid milk products to be allocated at this step were received. Such subtraction shall be pro rata to the pounds of skim milk in Class I and in Classes II, III, and IV combined, with the quantity prorated to Classes II, III, and IV combined being subtracted in sequence beginning with Class IV. (9) Subtract from the pounds of skim milk remaining in each class the pounds of skim milk in receipts of bulk fluid milk products from a handler regulated under another Federal order that are in excess of bulk fluid milk products transferred or diverted to such handler that were not subtracted in paragraph (a)(6) of this section. Such subtraction shall be pro rata to the pounds of skim milk in Class I and in Classes II, III, and IV combined, with the quantity prorated to Classes II, III, and IV combined being subtracted in sequence beginning with Class IV, with respect to whichever of the following quantities represents the lower proportion of Class I milk: (i) The estimated utilization of skim milk of all handlers in each class as announced for the month pursuant to Sec. 1051.45(a); or (ii) The total pounds of skim milk remaining in each class at this allocation step. (10) Subtract from the pounds of skim milk remaining in each class the pounds of skim milk in receipts of fluid milk products and bulk fluid cream products from another pool plant according to the classification of such products pursuant to Sec. 1051.42(a). (11) If the total pounds of skim milk remaining in all classes exceed the pounds of skim milk in producer milk, subtract such excess from the pounds of skim milk remaining in each class in series beginning with Class IV. (b) Butterfat shall be allocated in accordance with the procedure outlined for skim milk in paragraph (a) of this section. (c) The quantity of producer milk in each class shall be the combined pounds of skim milk and butterfat remaining in each class after the computations pursuant to paragraphs (a) and (b) of this section. [[Page 47228]] Sec. 1051.45 Market administrator's reports and announcements concerning classification. (a) Whenever required for the purpose of allocating receipts from plants regulated under other Federal orders pursuant to Sec. 1051.44(a)(9) and the corresponding step of Sec. 1051.44(b), the market administrator shall estimate and publicly announce the utilization (to the nearest whole percentage) in Class I during the month of skim milk and butterfat, respectively, in producer milk of all handlers. The estimate shall be based upon the most current available data and shall be final for such purpose. (b) The market administrator shall report to the market administrators of other Federal orders as soon as possible after the handlers' reports of receipts and utilization are received, the class to which receipts from plants regulated under other Federal orders are allocated pursuant to Sec. Sec. 1051.43(d) and 1051.44 (including any reclassification of inventories of bulk concentrated fluid milk products), and thereafter any change in allocation required to correct errors disclosed on the verification of such report. (c) The market administrator shall furnish each handler operating a pool plant who has shipped fluid milk products or bulk fluid cream products to a plant fully regulated under another Federal order the class to which the shipments were allocated by the market administrator of the other Federal order on the basis of the report by the receiving handler and, as necessary, any changes in the allocation arising from the verification of such report. (d) The market administrator shall report to each cooperative association which so requests, the percentage of producer milk delivered by members of the association that was used in each class by each handler receiving the milk. For the purpose of this report, the milk so received shall be prorated to each class in accordance with the total utilization of producer milk by the handler. Class Prices Sec. 1051.50 Class prices, component prices, and advanced pricing factors. Class prices per hundredweight of milk containing 3.5 percent butterfat, component prices, and advanced pricing factors shall be as follows. The prices and pricing factors described in paragraphs (a), (b), (e), (g), (h), and (s) of this section shall be based on a weighted average of the most recent 2 weekly prices announced by the United States Department of Agriculture's Agricultural Marketing Service (AMS) in the National Dairy Product Sales Report (NDPSR) before the 24th day of the month. These prices shall be announced on or before the 23rd day of the month and shall apply to milk received during the following month. The prices described in paragraphs (i) through (r) of this section shall be based on a weighted average for the preceding month of Western Dairy Product weekly prices described in paragraphs (n) through (q) of this section as determined and announced by AMS in the NDPSR on or before the 5th day of the month and shall apply to milk received during the preceding month. The price described in paragraph (f) of this section shall be derived from the Class II skim milk price announced on or before the 23rd day of the month preceding the month to which it applies and the butterfat price announced on or before the 5th day of the month following the month to which it applies. (a) Class I price. The Class I price per hundredweight, rounded to the nearest cent, shall be 0.965 times the Class I skim milk price plus 3.5 times the Class I butterfat price. (b) Class I skim milk price. The Class I skim milk price per hundredweight shall be the adjusted Class I differential specified in Sec. 1051.52, plus the adjustments to Class I prices specified in Sec. Sec. 1005.51(b), 1006.51(b) and 1007.51(b) plus the higher of the advanced pricing factors computed in paragraph (s)(1) or (2) of this section. (c) Class I nonfat solids price. The Class I nonfat solids price per pound shall be the Class I skim milk price per hundredweight multiplied by 0.76, with the resulting number divided by 9. (d) Class I fluid carrier price. The Class I fluid carrier is that portion of Class I skim milk that is not nonfat milk solids. The Class I fluid carrier price per pound shall be the Class I skim milk price per hundredweight multiplied by 0.24, with the resulting number divided by 91. (e) Class I butterfat price. The Class I butterfat price per pound shall be the adjusted Class I differential specified in Sec. 1051.52 divided by 100, plus the adjustments to Class I prices specified in Sec. Sec. 1005.51(b), 1006.51(b) and 1007.51(b) divided by 100 plus the advanced butterfat price computed in paragraph (s)(3) of this section. (f) The Class II price per hundredweight, rounded to the nearest cent, shall be 0.965 times the Class II skim milk price plus 3.5 times the Class II butterfat price. (g) Class II skim milk price. The Class II skim milk price per hundredweight shall be the advanced Class IV skim milk price computed in paragraph (s)(2) of this section plus 70 cents. (h) Class II nonfat solids price. The Class II nonfat solids price per pound, rounded to the nearest one-hundredth cent, shall be the Class II skim milk price divided by 9. (i) Class II butterfat price. The Class II butterfat price per pound shall be the butterfat price plus $0.007. (j) Class III price. The Class III price per hundredweight, rounded to the nearest cent, shall be 0.965 times the Class III skim milk price plus 3.5 times the butterfat price. (k) Class III skim milk price. The Class III skim milk price per hundredweight, rounded to the nearest cent, shall be the protein price per pound times 3.1 plus the other solids price per pound times 5.9. (l) Class IV price. The Class IV price per hundredweight, rounded to the nearest cent, shall be 0.965 times the Class IV skim milk price plus 3.5 times the butterfat price. (m) Class IV skim milk price. The Class IV skim milk price per hundredweight, rounded to the nearest cent, shall be the nonfat solids price per pound times 9. (n) Butterfat price. The butterfat price per pound, rounded to the nearest one-hundredth cent, shall be the Western Dairy Product Price for butter survey price reported by the Department for the month, less the Western Butter Manufacturing Cost, with the result multiplied by 1.211. (1) The Western Dairy Product Price for butter shall be computed at the weighted average of the Grade AA butter prices reported to AMS under the mandatory price reporting program by plants manufacturing butter that are located in the states of Arizona, California, Idaho, Nevada, Oregon, Utah, and Washington. The weekly price described in this paragraph shall be reported in the National Dairy Product Sales Report (NDPSR). In the event that a Western Dairy Product Price for butter cannot be reported, then the price used in the calculations set forth in Sec. 1051.50(n) shall be the national weighted average of the preceding month's weekly prices for Grade AA butter as determined and announced by AMS in the NDPSR on or before the 5th day of the month and shall apply to all milk received during the preceding month, less 2.08 cents per pound. (2) The Western Butter Manufacturing Cost shall be the cost obtained from a survey of butter manufacturing plants in the western region described in Sec. 1051.50(n)(1), which shall be conducted by AMS consistent with the methodology used by the California Department of Food and Agriculture in developing its manufacturing cost for [[Page 47229]] California butter plants, with the cost for California butter plants, with the further addition of butter marketing costs. In the event that a Western Butter Manufacturing Cost is not available, the butter manufacturing cost used in the calculation set forth in Sec. 1051.50(n) shall be 17.24 cents. (o) Nonfat solids price. The nonfat solids price per pound, rounded to the nearest one-hundredth cent, shall be the Western Dairy Product Price nonfat dry milk survey price reported by AMS under the mandatory reporting program, less the Western Nonfat Dry Milk Manufacturing Cost and multiplying the result by 0.99. (1) The Western Dairy Product Price for nonfat dry milk shall be computed at the weighted average of the Grade A and Extra Grade nonfat dry milk prices reported to AMS under the mandatory price reporting program by plants manufacturing nonfat dry milk that are located in the states of Arizona, California, Idaho, Nevada, Oregon, Utah, and Washington. The weekly price described in this paragraph shall be reported in the National Dairy Product Sales Report (NDPSR). In the event that a Western Dairy Product Price for nonfat dry milk cannot be reported, then the price used in the calculations set forth in Sec. 1051.50(o) shall be the national weighted average of the preceding month's weekly prices for Grade A and Extra Grade nonfat dry milk as determined and announced by AMS in the NDPSR on or before the 5th day of the month and shall apply to all milk received during the preceding month, less 2.57 cents per pound. (2) The Western Nonfat Dry Milk Manufacturing Cost shall be the cost obtained from a survey of nonfat dry milk manufacturing plants in the western region described in Sec. 1051.50(o)(1), which shall be conducted by the Department consistent with the methodology used by the California Department of Food and Agriculture in developing its manufacturing cost for California nonfat dry milk plants, with the further addition of nonfat dry milk marketing costs. In the event that a Western Nonfat Dry Milk Manufacturing Cost is not available, the nonfat dry milk manufacturing cost used in the calculation set forth in Sec. 1051.50(o) shall be 19.97 cents. (p) Protein price. The protein price per pound, rounded to the nearest one-hundredth cent, shall be computed as follows: (1) Compute the Western Dairy Product Price for Cheddar Cheese as the weighted average of the weekly 40-pound block cheddar cheese prices reported to AMS under the mandatory price reporting program by plants manufacturing cheddar cheese that are located in the states of Arizona, California, Idaho, Nevada, Oregon, Utah, and Washington. The weekly price described in this paragraph shall be reported in the National Dairy Product Sales Report (NDPSR). In the event that a Western Dairy Product Price for 40-pound cheddar cheese blocks cannot be reported, then the price used in the calculations set forth in Sec. 1051.50(p)(2) shall be the national weighted average of the preceding month's weekly prices for 40-pound cheddar cheese blocks as determined and announced by AMS in the NDPSR on or before the 5th day of the month and shall apply to all milk received during the preceding month, less 3.40 cents per pound. (2) Subtract the Western States Cheese Manufacturing Cost from the price computed pursuant to paragraph (p)(1) of this section and multiply the result by 1.383; (3) The Western Cheddar Cheese Manufacturing Cost shall be the per pound cost obtained from a survey of cheddar cheese manufacturing plants in the western region described in Sec. 1051.50(p)(1), which shall be conducted by the Department consistent with the methodology used by the California Department of Food and Agriculture in developing its manufacturing cost for California cheddar cheese plants, with the further addition of 40-pound block cheddar cheese marketing costs. In the event that a Western Cheddar Cheese Manufacturing Cost is not available, the cheddar cheese manufacturing cost used in the calculations set forth in Sec. 1051.50(p)(2) and Sec. 1051.50(p)(4)(i) shall be 22.91 cents. (4) Add to the amount computed pursuant to paragraph (p)(2) of this section an amount computed as follows: (i) Subtract the Western States Cheese Manufacturing Cost from the price computed pursuant to paragraph (p)(1) of this section and multiply the result by 1.572; and (ii) Subtract 0.9 times the butterfat price computed pursuant to paragraph (n) of this section from the amount computed pursuant to paragraph (p)(4)(i) of this section; and (iii) Multiply the amount computed pursuant to paragraph (p)(4)(ii) of this section by 1.17. (q) Other solids price. The other solids price per pound, rounded to the nearest one-hundredth cent, shall be computed as follows: (1) Subtract the Western Dry Whey Manufacturing Cost per pound from the per pound Western Dairy Product Price for dry whey and multiply the result by 1.03 (2) The Western Dairy Product Price for dry whey shall be computed at the weighted average of the weekly dry whey prices reported to AMS under the mandatory price reporting program by plants manufacturing dry whey that are located in the states of Arizona, California, Idaho, Nevada, Oregon, Utah, and Washington. The weekly price described in this paragraph shall be reported in the National Dairy Product Sales Report (NDPSR). In the event that a Western Dairy Product Price for dry whey cannot be reported, then the price used in the calculations set forth in Sec. 1051.50(q)(1) shall be the national weighted average of the preceding month's weekly prices for dry whey as determined and announced by AMS in the NDPSR on or before the 5th day of the month and shall apply to all milk received during the preceding month, less 0.84 cents per pound. (3) The Western Dry Whey Manufacturing Cost shall be the per pound cost obtained from a survey of dry whey manufacturing plants in the western region described in Sec. 1051.50(q)(2), which shall be conducted by the Department consistent with the methodology used by the California Department of Food and Agriculture in developing its manufacturing cost for California dairy products, with the further addition of dry whey marketing costs. In the event that a Western Dry Whey Manufacturing Cost is not available, the dry whey manufacturing cost used in the calculation set forth in Sec. 1051.50(q)(1) shall be 23.10 cents. (r) Somatic cell adjustment. The somatic cell adjustment per hundredweight of milk shall be determined as follows: (1) Multiply 0.0005 by the weighted average price computed pursuant to paragraph (p)(1) of this section and round to the 5th decimal place; (2) Subtract the somatic cell count of the milk (reported in thousands) from 350; and (3) Multiply the amount computed in paragraph (r)(1) of this section by the amount computed in paragraph (r)(2) of this section and round to the nearest full cent. (s) Advanced pricing factors. For the purpose of computing the Class I skim milk price, the Class II skim milk price, the Class II nonfat solids price, and the Class I butterfat price for the following month, the following pricing factors shall be computed using the weighted average of the 2 most recent NDPSR U.S. average weekly survey prices [[Page 47230]] announced before the 24th day of the month: (1) An advanced Class III skim milk price per hundredweight, rounded to the nearest cent, shall be computed as follows: (i) Following the procedure set forth in paragraphs (p) and (q) of this section, but using the weighted average of the 2 most recent NDPSR U.S. average weekly survey prices announced before the 24th day of the month, compute a protein price and another solids price; (ii) Multiply the protein price computed in paragraph (s)(1)(i) of this section by 3.1; (iii) Multiply the other solids price per pound computed in paragraph (s)(1)(i) of this section by 5.9; and (iv) Add the amounts computed in paragraphs (s)(1)(ii) and (iii) of this section. (2) An advanced Class IV skim milk price per hundredweight, rounded to the nearest cent, shall be computed as follows: (i) Following the procedure set forth in paragraph (o) of this section, but using the weighted average of the 2 most recent NDPSR U.S. average weekly survey prices announced before the 24th day of the month, compute a nonfat solids price; and (ii) Multiply the nonfat solids price computed in paragraph (s)(2)(i) of this section by 9. (3) An advanced butterfat price per pound, rounded to the nearest one-hundredth cent, shall be calculated by computing a weighted average of the 2 most recent U.S. average NDPSR AA Butter survey prices announced before the 24th day of the month, subtracting 17.15 cents from this average, and multiplying the result by 1.211. Sec. 1051.51 Class I differential and price. The Class I differential shall be the differential established for Los Angeles County, California, which is reported in Sec. 1051.52. The Class I price shall be the price computed pursuant to Sec. 1051.51(a) for Los Angeles County, California. Sec. 1051.52 Adjusted Class I differentials. See Sec. 1000.52. Sec. 1051.53 Announcement of class prices, component prices, and advanced pricing factors. (a) On or before the 5th day of the month, the market administrator for each Federal milk marketing order shall announce the following prices (as applicable to that order) for the preceding month: (1) The Class II price; (2) The Class II butterfat price; (3) The Class III price; (4) The Class III skim milk price; (5) The Class IV price; (6) The Class IV skim milk price; (7) The butterfat price; (8) The nonfat solids price; (9) The protein price; (10) The other solids price; and (11) The somatic cell adjustment rate. (b) On or before the 23rd day of the month, the market administrator for each Federal milk marketing order shall announce the following prices and pricing factors for the following month: (1) The Class I price; (2) The Class I skim milk price; (3) The Class I nonfat solids price; (4) The Class I fluid carrier price; (5) The Class I butterfat price; (6) The Class II skim milk price; (7) The Class II nonfat solids price; and (8) The advanced pricing factors described in Sec. 1051.50(s). Sec. 1051.54 Equivalent price. If for any reason a price or pricing constituent required for computing the prices described in Sec. 1051.50 is not available, the market administrator shall use a price or pricing constituent determined by the Deputy Administrator, Dairy Programs, Agricultural Marketing Service, to be equivalent to the price or pricing constituent that is required. Sec. 1051.55 Transportation credits and transportation allowances. (a) Each handler operating a pool distributing plant described in Sec. 1051.7(a) or (b) or a pool distributing plant that is part of a unit described in Sec. 1051.7(d) that physically receives bulk milk, skim milk, or condensed skim milk from another pool plant shall receive a transportation credit for such milk computed as follows: (1) Determine the hundredweight of milk eligible for the credit as follows; (i) The number of hundredweights of milk received from sources described in Sec. 1051.55 (a)(2) or the number of hundredweights of milk utilized in the plant for the processing and packaging of fluid milk products, whichever is less. (2) Determine the transportation credit rate for milk received at the pool distributing plants specified in Sec. 1051.55 (a) as follows; (i) For plants located in the counties of Orange, Riverside, San Bernardino, San Diego, or Ventura Counties receiving milk from plants located in Los Angeles County, $0.54 hundredweight, (ii) For plants located in the counties of Los Angeles, Orange or Ventura receiving milk from plants located in Fresno, Kings, or Tulare Counties, $0.89 per hundredweight, (iii) For plants located in the counties of Riverside, San Bernardino or San Diego receiving milk from plants located in Fresno, Kings or Tulare Counties, $0.97 per hundredweight, (iv) For plants located in the counties of Alameda, San Francisco, Santa Clara, Solano, or Sonoma Counties from plants located in Merced or Stanislaus Counties, $0.75 per hundredweight, (v) For plants located in the county of Sacramento from plants located in Merced or Stanislaus Counties, $0.68 per hundredweight. (3) Multiply the applicable rate as specified in Sec. 1051.55 (a)(2) by the number of hundredweights of eligible milk as specified in Sec. 1051.55 (a)(1). The resulting transportation credit calculated under this section shall be deducted from the reporting handler's value of milk as specified in Sec. 1051.60 (a)(4). (b) Each handler operating an eligible pool plant, and handler that transfers or diverts bulk milk from a pool plant to an eligible pool plant, and each handler described in Sec. 1051.9(c) or Sec. 1051.9(d) that delivers producer milk to an eligible pool plant as described in Sec. 1051.55 (b)(1) shall receive a transportation allowance on milk eligible for the allowance pursuant to paragraph (b)(2) of this section. The allowance shall be computed by multiplying the hundredweight of milk eligible for the allowance by the rates described below: (1) Pool plants that are eligible to receive transportation allowances are those that are located in the deficit receiving areas specified in Sec. 1051.55 (b)(2) and that have a combined Class I and Class II utilization percentage for the month that is 50 percent or greater. (i) For a handler that transfers or diverts bulk milk from a pool plant to an eligible pool plant, only that milk which is shipped to (and physically unloaded into) an eligible pool plant shall qualify as eligible for transportation allowances. (ii) For a handler described in Sec. 1051.9(c) or Sec. 1051.9(d) that delivers producer milk to an eligible pool plant, only that milk which is shipped to (and physically unloaded into) an eligible pool plant shall qualify as eligible for transportation allowances. (2) The transportation allowance rates for milk shipped to (and physically unloaded into) eligible plants shall be as follows: (i) For plants located in the Southern California Receiving Area, consisting of the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, [[Page 47231]] and Ventura, receiving milk delivered from San Bernardino County; for shipments of more than 93 miles, $0.16 hundredweight. (ii) For plants located in the Southern California Receiving Area, consisting of the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura, receiving milk delivered from Riverside County; for shipments of more than 93 miles, $0.36 hundredweight. (iii) For plants located in the located in the Southern California Receiving Area, consisting of the counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura Counties receiving milk delivered from counties other than Riverside or San Bernardino: For shipments of more than 79 miles but not greater than 99 miles, $0.16 hundredweight; for shipments of more than 99 but not greater than 119 miles, $0.37 per hundredweight; for shipments of more than 119 miles, $0.54 per hundredweight. (iv) For plants located in the located in the Bay Area Receiving Area, consisting of the counties of Alameda, Contra Costa, Santa Clara, Santa Cruz, San Francisco and San Mateo, receiving milk delivered from any county: for shipments of 79 miles or less, $0.31 per hundredweight; for shipments of more than 79 miles but not greater than 199 miles, $0.37 hundredweight; for shipments of more than 199 miles, $0.45 per hundredweight. (v) For plants located in the located in the North Bay Area Receiving Area, consisting of the counties of Marin, Napa, Solano and Sonoma, receiving milk delivered from any county: for shipments of 45 miles or less, $0.23 per hundredweight; for shipments of more than 45 miles but not greater than 96 miles, $0.27 hundredweight; for shipments of more than 96 miles, $0.36 per hundredweight. (vi) For plants located in the located in the Sacramento Receiving Area, consisting of Sacramento County, receiving milk delivered from any county: for shipments of 59 miles or less, $0.17 per hundredweight; for shipments of more than 59, $0.23 hundredweight. (c) The transportation allowances and credits rates shall be increased or decreased by the market administrator to reflect per hundredweight changes in the actual transportation costs as published by the California Department of Food and Agriculture in its Hauling Rate Survey. (d) For purposes of this section, the distances to be computed shall be determined by the market administrator using the shortest available state and/or Federal highway mileage. Mileage determinations are subject to redetermination at all times. In the event a handler requests a redetermination of the mileage pertaining to any plant, the market administrator shall notify the handler of such redetermination within 30 days after the receipt of such request. Any financial obligations resulting from a change in mileage shall not be retroactive for any periods prior to the redetermination by the market administrator. Producer Price Differential Sec. 1051.60 Handler's value of milk. For the purpose of computing a handler's obligation for producer milk, the market administrator shall determine for each month the value of milk of each handler with respect to each of the handler's pool plants and of each handler described in Sec. 1051.9(c) and Sec. 1051.9(d) with respect to milk that was not received at a pool plant by adding the amounts computed in paragraphs (a) through (i) of this section and subtracting from that total amount the values computed in paragraphs (j) and (k) of this section. Unless otherwise specified, the skim milk, butterfat, and the combined pounds of skim milk and butterfat referred to in this section shall result from the steps set forth in Sec. 1051.44(a), (b), and (c), respectively, and the nonfat components of producer milk in each class shall be based upon the proportion of such components in producer skim milk. Receipts of nonfluid milk products that are distributed as labeled reconstituted milk for which payments are made to the producer-settlement fund of another Federal order under Sec. 1051.76(a)(4) or (d) shall be excluded from pricing under this section. (a) Class I value. (1) Multiply the pounds of nonfat solids in Class I by the Class I nonfat solids price; and (2) Add an amount obtained by multiplying the pounds of fluid carrier in Class I by the Class I fluid carrier price; and (3) Add an amount obtained by multiplying the pounds of butterfat in Class I by the Class I butterfat price; and (4) Subtract the value of the handler's transportation credits as calculated in Sec. 1051.55(a)(1) through (a)(3); and (5) Deduct for each pound of milk nonfat solids in nonfat dry milk used for fortifying Class I products to meet the State of California's fluid milk standards as described in Sec. 1051.40(d)(3) a fortification allowance to be computed as follows: (i) Subtract the current Class IV nonfat solids price from the current Class I nonfat solids price (ii) Subtract the value calculated in Sec. 1051.60 (a)(5)(i) from zero cents ($0.00). (iii) The fortification allowance for each pound of nonfat milk solids in the nonfat dry milk used in fortification as described in this section shall be zero cents ($0.00) or the value calculated in in Sec. 1051.60 (a)(5)(ii), whichever is greater. (6) Deduct for each pound of milk nonfat solids in condensed skim milk used for fortifying Class I products to meet the State of California's fluid milk standards as described in Sec. 1051.40(d)(3) a fortification allowance to be computed as follows: (i) Subtract the current Class IV nonfat solids price from the current Class I nonfat solids price (ii) Subtract the value calculated in Sec. 1051.60 (a)(6)(i) from 9.87 cents ($0.0987). (iii) The fortification allowance for each pound of nonfat milk solids in condensed skim milk used in fortification as described in this section shall be zero cents ($0.00) or the value calculated in in Sec. 1051.60 (a)(6)(ii), whichever is greater. (b) Class II value. (1) Multiply the pounds of nonfat solids in Class II skim milk by the Class II nonfat solids price; and (2) Add an amount obtained by multiplying the pounds of butterfat in Class II times the Class II butterfat price. (c) Class III value. (1) Multiply the pounds of protein in Class III skim milk by the protein price; (2) Add an amount obtained by multiplying the pounds of other solids in Class III skim milk by the other solids price; and (3) Add an amount obtained by multiplying the pounds of butterfat in Class III by the butterfat price. (d) Class IV value. (1) Multiply the pounds of nonfat solids in Class IV skim milk by the nonfat solids price; and (2) Add an amount obtained by multiplying the pounds of butterfat in Class IV by the butterfat price. (e) Compute an adjustment for the somatic cell content of producer milk by multiplying the values reported pursuant to Sec. 1051.30(a)(1) and (c)(1) by the percentage of total producer milk allocated to Class II, Class III, and Class IV pursuant to Sec. 1051.44(c); (f) Multiply the pounds of skim milk and butterfat overage assigned to each class pursuant to Sec. 1051.44(a)(11) and the corresponding step of Sec. 1051.44(b) by the skim milk prices and butterfat prices applicable to each class. [[Page 47232]] (g) Multiply the difference between the current month's Class I, II, or III price, as the case may be, and the Class IV price for the preceding month and by the hundredweight of skim milk and butterfat subtracted from Class I, II, or III, respectively, pursuant to Sec. 1051.44(a)(7) and the corresponding step of Sec. 1051.44(b); (h) Multiply the difference between the Class I price applicable at the location of the pool plant and the Class IV price by the hundredweight of skim milk and butterfat assigned to Class I pursuant to Sec. 1051.43(d) and the hundredweight of skim milk and butterfat subtracted from Class I pursuant to Sec. 1051.44(a)(3)(i) through (vi) and the corresponding step of Sec. 1051.44(b), excluding receipts of bulk fluid cream products from plants regulated under other Federal orders and bulk concentrated fluid milk products from pool plants, plants regulated under other Federal orders, and unregulated supply plants. (i) Multiply the difference between the Class I price applicable at the location of the nearest unregulated supply plants from which an equivalent volume was received and the Class III price by the pounds of skim milk and butterfat in receipts of concentrated fluid milk products assigned to Class I pursuant to Sec. 1051.43(d) and Sec. 1051.44(a)(3)(i) and the corresponding step of Sec. 1051.44(b) and the pounds of skim milk and butterfat subtracted from Class I pursuant to Sec. 1051.44(a)(8) and the corresponding step of Sec. 1051.44(b), excluding such skim milk and butterfat in receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under any Federal milk order is classified and priced as Class I milk and is not used as an offset for any other payment obligation under any order. (j) For reconstituted milk made from receipts of nonfluid milk products, multiply $1.00 (but not more than the difference between the Class I price applicable at the location of the pool plant and the Class IV price) by the hundredweight of skim milk and butterfat contained in receipts of nonfluid milk products that are allocated to Class I use pursuant to Sec. 1051.43(d). (k) Subtract the value of the handler's transportation allowances calculated pursuant to Sec. 1051.55(a)(i) and (a)(ii). Sec. 1051.61 Computation of producer price differential. For each month the market administrator shall compute a producer price differential per hundredweight. The report of any handler who has not made payments required pursuant to Sec. 1051.71 for the preceding month shall not be included in the computation of the producer price differential, and such handler's report shall not be included in the computation for succeeding months until the handler has made full payment of outstanding monthly obligations. Subject to the conditions of this paragraph, the market administrator shall compute the producer price differential in the following manner: (a) Combine into one total the values computed pursuant to Sec. 1051.60 for all handlers required to file reports prescribed in Sec. 1051.30; (b) Subtract the total values obtained by multiplying each handler's total pounds of protein, other solids, and butterfat contained in the milk for which an obligation was computed pursuant to Sec. 1051.60 by the protein price, other solids price, and the butterfat price, respectively, and the total value of the somatic cell adjustment pursuant to Sec. 1051.30(a)(1) and (c)(1); (c) Add an amount equal to the minus location adjustments and subtract an amount equal to the plus location adjustments computed pursuant to Sec. 1051.75; (d) Add an amount equal to not less than one-half of the unobligated balance in the producer-settlement fund; (e) Divide the resulting amount by the sum of the following for all handlers included in these computations: (1) The total hundredweight of producer milk; and (2) The total hundredweight for which a value is computed pursuant to Sec. 1051.60(i); and (f) Subtract not less than 4 cents nor more than 5 cents from the price computed pursuant to paragraph (e) of this section. The result shall be known as the producer price differential for the month. Sec. 1051.62 Announcement of producer prices. On or before the 13th day after the end of each month, the market administrator shall announce publicly the following prices and information: (a) The producer price differential; (b) The protein price; (c) The nonfat solids price; (d) The other solids price; (e) The butterfat price; (f) The somatic cell adjustment rate; (g) The average butterfat, nonfat solids, protein and other solids content of producer milk; and (h) The statistical uniform price for milk containing 3.5 percent butterfat, computed by combining the Class III price and the producer price differential. Sec. 1051.68 Payments to producers under the California Quota Program. Notification shall be given by the market administrator to producers of intent to make payment of producer returns attributable to producers who participate in the California Quota Program in accordance with Sec. 1051.72. Producers who participate in the California Quota Program shall be identified as follows: Any producer whose farm is located in California and whose milk is received at a plant located in California unless such producer irrevocably notifies the market administrator in writing before the first day of any month for which he first elects to receive payment at the applicable prices announced under Sec. 1051.62(h). Subpart C--Payments for Milk Producer Payments Sec. 1051.70 Producer-settlement fund. See Sec. 1000.70. Sec. 1051.71 Payments to the producer-settlement fund. Each handler shall make payment to the producer-settlement fund in a manner that provides receipt of the funds by the market administrator no later than the 15th day after the end of the month (except as provided in Sec. 1000.90). Payment shall be the amount, if any, by which the amount specified in paragraph (a) of this section exceeds the amount specified in paragraph (b) of this section: (a) The total value of milk to the handler for the month as determined pursuant to Sec. 1051.60. (b) The aggregate amount paid to producers and cooperative associations pursuant to Sec. 1051.73. Sec. 1051.72 Payments from the producer-settlement fund. (a) The market administrator shall compute the amount due each producer for milk received during the month from such producer by a handler(s) who made payments for such month pursuant to Sec. 1051.71 in an amount equal to not less than the sum of: (1) The hundredweight of producer milk received times the producer price differential for the month as adjusted pursuant to Sec. 1051.75; (2) The pounds of butterfat received times the butterfat price for the month; (3) The pounds of protein received times the protein price for the month; [[Page 47233]] (4) The pounds of other solids received times the other solids price for the month; (5) The hundredweight of milk received times the somatic cell adjustment for the month; (6) Less any payment made pursuant to Sec. 1051.73; (7) Less proper deductions authorized in writing by such producer, and plus or minus adjustments for errors in previous payments to such producer subject to approval by the market administrator; and (8) Less deductions for marketing services pursuant to Sec. 1000.86. (b) On or before the 18th day after the end of each month, the market administrator shall pay direct to each producer who has not authorized a cooperative association to receive payment for such producer or for milk not subject to the California Quota Program pursuant to Sec. 1051.68, the amount calculated for such producer pursuant to paragraph (a) of this section subject to the provisions of Sec. 1051.86. (c) On or before the 16th day after the end of each month, the market administrator, subject to the provisions of Sec. 1051.86, shall pay: (1) To each cooperative association authorized to receive payments due producers who market their milk through such cooperative association, and which is not subject to the California Quota Program pursuant to Sec. 1051.68, an amount equal to the aggregate of the payments calculated pursuant to paragraph (a) of this section for all producers certified to the market administrator by such cooperative association to receive such payments; and (2) To the California Department of Food & Agriculture's Milk Pooling Branch, for each producer and cooperative association for milk subject to the California Quota Program pursuant to Sec. 1051.68, the aggregate of the payments otherwise due such individual producers and cooperative associations pursuant to paragraph (b) and subparagraph (c)(1) of this section. (d) If, at such time, the balance in the producer-settlement fund is insufficient to make all payments pursuant to this section, the market administrator shall reduce uniformly such payments under this section and shall complete the payments as soon as the funds are available. Sec. 1051.73 Partial payments to producers and to cooperative associations. (a) Each handler shall pay each producer for producer milk for which payment is not made to a cooperative association pursuant to paragraph (b) of this section and who has not discontinued shipments as of the date of this partial payment, for milk received during the first 15 days of the month from the producer at not less than the lowest announced class price for the preceding month, less proper deductions authorized in writing by the producer; payment shall be made so that it is received by each producer on or before the 26th day of the month (except as provided in Sec. 1000.90). (b) Payments for milk received from cooperative association members. On or before the day prior to the date specified in paragraph (a) of this section (except as provided in Sec. 1000.90), each handler shall pay to a cooperative association for milk from producers who market their milk through the cooperative association and who have authorized the cooperative to collect such payments on their behalf an amount equal to the sum of the individual payments otherwise payable for such producer milk pursuant to paragraph (a) of this section. (c) Payment for milk received from cooperative association pool plants, from cooperatives as handlers pursuant to Sec. 1051.9(c), or from handlers pursuant to Sec. 1051.9(d). On or before the day prior to the date specified in paragraph (a) of this section (except as provided in Sec. 1000.90), each handler who receives fluid milk products at its plant from a cooperative association in its capacity as the operator of a pool plant or who receives milk from a cooperative association in its capacity as a handler pursuant to Sec. 1051.9(c), including the milk of producers who are not members of such association and who the market administrator determines have authorized the cooperative association to collect payment for their milk, or from a handler pursuant to Sec. 1051.9(d) shall pay the cooperative or such handler for bulk fluid milk products and bulk fluid cream products received from a cooperative association in its capacity as the operator of a pool plant and for milk received from a handler pursuant to Sec. 1051.9(c) or (d) during the first 15 days of the month, at not less than the lowest announced class prices per hundredweight for the preceding month.; (d) If a handler claims that a required payment to a producer cannot be made because the producer is deceased or cannot be located, or because the cooperative association or its lawful successor or assignee is no longer in existence, the payment shall be made to the producer-settlement fund, and in the event that the handler subsequently locates and pays the producer or a lawful claimant, or in the event that the handler no longer exists and a lawful claim is later established, the market administrator shall make the required payment from the producer-settlement fund to the handler or to the lawful claimant, as the case may be. (e) In making payments to producers pursuant to this section, each handler shall furnish each producer, except a producer whose milk was received from a cooperative association handler described in Sec. 1051.9(a) or (c), a supporting statement in a form that may be retained by the recipient which shall show: (1) The name, address, Grade A identifier assigned by a duly constituted regulatory agency, and payroll number of the producer; (2) The daily and total pounds, and the month and dates such milk was received from that producer; (3) The total pounds of butterfat, protein, and other solids contained in the producer's milk; (4) The somatic cell count of the producer's milk; (5) The minimum rate or rates at which payment to the producer is required pursuant to the order in this part; (6) The rate used in making payment if the rate is other than the applicable minimum rate; (7) The amount, or rate per hundredweight, or rate per pound of component, and the nature of each deduction claimed by the handler; and (8) The net amount of payment to the producer, cooperative association, and producer settlement fund with respect to such producer. Sec. 1051.74 [Reserved] Sec. 1051.75 Plant location adjustments for producer milk and nonpool milk. For purposes of making payments for producer milk and nonpool milk, a plant location adjustment shall be determined by subtracting the Class I price specified in Sec. 1051.51 from the Class I price at the plant's location. The difference, plus or minus as the case may be, shall be used to adjust the payments required pursuant to Sec. Sec. 1051.73 and 1051.76. Sec. 1051.76 Payments by a handler operating a partially regulated distributing plant. On or before the 25th day after the end of the month (except as provided in Sec. 1000.90), the operator of a partially regulated distributing plant, other than a plant that is subject to marketwide pooling of producer returns under a State government's milk classification and pricing program, shall pay to the [[Page 47234]] market administrator for the producer-settlement fund the amount computed pursuant to paragraph (a) of this section or, if the handler submits the information specified in Sec. Sec. 1051.30(b) and 1051.31(b), the handler may elect to pay the amount computed pursuant to paragraph (b) of this section. A partially regulated distributing plant that is subject to marketwide pooling of producer returns under a State government's milk classification and pricing program shall pay the amount computed pursuant to paragraph (c) of this section. (a) The payment under this paragraph shall be an amount resulting from the following computations: (1) From the plant's route disposition in the marketing area: (i) Subtract receipts of fluid milk products classified as Class I milk from pool plants, plants fully regulated under other Federal orders, and handlers described in Sec. 1051.9(c) or (d)of this chapter, except those receipts subtracted under a similar provision of another Federal milk order; (ii) Subtract receipts of fluid milk products from another nonpool plant that is not a plant fully regulated under another Federal order to the extent that an equivalent amount of fluid milk products disposed of to the nonpool plant by handlers fully regulated under any Federal order is classified and priced as Class I milk and is not used as an offset for any payment obligation under any order; and (iii) Subtract the pounds of reconstituted milk made from nonfluid milk products which are disposed of as route disposition in the marketing area; (2) For orders with multiple component pricing, compute a Class I differential price by subtracting Class III price from the current month's Class I price. Multiply the pounds remaining after the computation in paragraph (a)(1)(iii) of this section by the amount by which the Class I differential price exceeds the producer price differential, both prices to be applicable at the location of the partially regulated distributing plant except that neither the adjusted Class I differential price nor the adjusted producer price differential shall be less than zero; (3) For orders with skim milk and butterfat pricing, multiply the remaining pounds by the amount by which the Class I price exceeds the uniform price, both prices to be applicable at the location of the partially regulated distributing plant except that neither the adjusted Class I price nor the adjusted uniform price differential shall be less than the lowest announced class price; and (4) Unless the payment option described in paragraph (d) is selected, add the amount obtained from multiplying the pounds of labeled reconstituted milk included in paragraph (a)(1)(iii) of this section by any positive difference between the Class I price applicable at the location of the partially regulated distributing plant (less $1.00 if the reconstituted milk is labeled as such) and the Class IV price. (b) The payment under this paragraph shall be the amount resulting from the following computations: (1) Determine the value that would have been computed pursuant to Sec. 1051.60 for the partially regulated distributing plant if the plant had been a pool plant, subject to the following modifications: (i) Fluid milk products and bulk fluid cream products received at the plant from a pool plant, a plant fully regulated under another Federal order, and handlers described in Sec. 1051.9(c) or Sec. 1051.9(d) of this chapter shall be allocated at the partially regulated distributing plant to the same class in which such products were classified at the fully regulated plant; (ii) Fluid milk products and bulk fluid cream products transferred from the partially regulated distributing plant to a pool plant or a plant fully regulated under another Federal order shall be classified at the partially regulated distributing plant in the class to which allocated at the fully regulated plant. Such transfers shall be allocated to the extent possible to those receipts at the partially regulated distributing plant from the pool plant and plants fully regulated under other Federal orders that are classified in the corresponding class pursuant to paragraph (b)(1)(i) of this section. Any such transfers remaining after the above allocation which are in Class I and for which a value is computed pursuant to Sec. 1051.60 for the partially regulated distributing plant shall be priced at the statistical uniform price or uniform price, whichever is applicable, of the respective order regulating the handling of milk at the receiving plant, with such statistical uniform price or uniform price adjusted to the location of the nonpool plant (but not to be less than the lowest announced class price of the respective order); and (iii) If the operator of the partially regulated distributing plant so requests, the handler's value of milk determined pursuant to Sec. 1051.60 shall include a value of milk determined for each nonpool plant that is not a plant fully regulated under another Federal order which serves as a supply plant for the partially regulated distributing plant by making shipments to the partially regulated distributing plant during the month equivalent to the requirements of Sec. 1051.7(c) subject to the following conditions: (A) The operator of the partially regulated distributing plant submits with its reports filed pursuant to Sec. Sec. 1051.30(b) and 1051.31(b) similar reports for each such nonpool supply plant; (B) The operator of the nonpool plant maintains books and records showing the utilization of all skim milk and butterfat received at the plant which are made available if requested by the market administrator for verification purposes; and (C) The value of milk determined pursuant to Sec. 1051.60 for the unregulated supply plant shall be determined in the same manner prescribed for computing the obligation of the partially regulated distributing plant; and (2) From the partially regulated distributing plant's value of milk computed pursuant to paragraph (b)(1) of this section, subtract: (i) The gross payments that were made for milk that would have been producer milk had the plant been fully regulated; (ii) If paragraph (b)(1)(iii) of this section applies, the gross payments by the operator of the nonpool supply plant for milk received at the plant during the month that would have been producer milk if the plant had been fully regulated; and (iii) The payments by the operator of the partially regulated distributing plant to the producer-settlement fund of another Federal order under which the plant is also a partially regulated distributing plant and, if paragraph (b)(1)(iii) of this section applies, payments made by the operator of the nonpool supply plant to the producer- settlement fund of any order. (c) The operator of a partially regulated distributing plant that is subject to marketwide pooling of returns under a milk classification and pricing program that is imposed under the authority of a State government shall pay on or before the 25th day after the end of the month (except as provided in Sec. 1000.90) to the market administrator for the producer-settlement fund an amount computed as follows: After completing the computations described in paragraphs (a)(1)(i) and (ii) of this section, determine the value of the remaining pounds of fluid milk products disposed of as route disposition in the marketing area by multiplying the hundredweight of such [[Page 47235]] pounds by the amount, if greater than zero, that remains after subtracting the State program's class prices applicable to such products at the plant's location from the Federal order Class I price applicable at the location of the plant. (d) Any handler may elect partially regulated distributing plant status for any plant with respect to receipts of nonfluid milk ingredients that are reconstituted for fluid use. Payments may be made to the producer-settlement fund of the order regulating the producer milk used to produce the nonfluid milk ingredients at the positive difference between the Class I price applicable under the other order at the location of the plant where the nonfluid milk ingredients were processed and the Class IV price. This payment option shall apply only if a majority of the total milk received at the plant that processed the nonfluid milk ingredients is regulated under one or more Federal orders and payment may only be made to the producer-settlement fund of the order pricing a plurality of the milk used to produce the nonfluid milk ingredients. This payment option shall not apply if the source of the nonfluid ingredients used in reconstituted fluid milk products cannot be determined by the market administrator. Sec. 1051.77 Adjustment of accounts. See Sec. 1000.77. Sec. 1051.78 Charges on overdue accounts. See Sec. 1000.78. Administrative Assessment and Marketing Service Deduction Sec. 1051.85 Assessment for order administration. On or before the payment receipt date specified under Sec. 1051.71, each handler shall pay to the market administrator its pro rata share of the expense of administration of the order at a rate specified by the market administrator that is no more than 8 cents per hundredweight with respect to: (a) Receipts of producer milk (including the handler's own production) other than such receipts by a handler described in Sec. 1051.9(c) or (d) that were delivered to pool plants of other handlers; (b) Receipts from a handler described in Sec. 1051.9(c) or (d); (c) Receipts of concentrated fluid milk products from unregulated supply plants and receipts of nonfluid milk products assigned to Class I use pursuant to Sec. 1051.43(d) and other source milk allocated to Class I pursuant to Sec. 1051.44(a)(3) and (8) and the corresponding steps of Sec. 1051.44(b), except other source milk that is excluded from the computations pursuant to Sec. 1051.60 (h) and (i); and (d) Route disposition in the marketing area from a partially regulated distributing plant that exceeds the skim milk and butterfat subtracted pursuant to Sec. 1051.76(a)(1)(i) and (ii). Sec. 1051.86 Deduction for marketing services. See Sec. 1000.86. Subpart D--Miscellaneous Provisions Sec. 1051.90 Dates. See Sec. 1000.90. Proposal Number 3 Submitted by the California Producer Handlers Association 0 5. This proposal would preserve the entire ``Quota'' system that is currently in place under the terms of the California Pooling Act, California state marketing order and milk pooling plan administered by the California Department of Food and Agriculture (CDFA). Specifically, should USDA recommend a California Federal milk marketing order, this proposal argues that any provisions incorporated to ``recognize quota'' as outlined in the 2014 Farm Bill, would include provisions that recognize, in the same manner that is done currently by CDFA, the exempt quota held by current producer-distributors operating in the State. Should USDA recommend administering all aspects of the California quota program, CPHA also proposes to remove the degrees of family consanguinity as it pertains to the ownership of exempt quota to allow for the continuation of exempt quota transfers within a family. Proposal Number 4 Submitted by Ponderosa Dairy 0 6. This proposal would add a new paragraph (e) to Sec. 1051.76 as described under either Proposal 1 or Proposal 2 above, to read as follows: Sec. 1051.76 Payments by a handler operating a partially regulated distributing plant. * * * * * (e) Any handler may elect partially regulated distributing plant status for any plant located within the California marketing area with respect to receipts of milk from farms located outside of the California marketing area. Such plant shall with respect to such receipts make an election as provided for in Sec. 1051.76 and shall meet the reporting and payment requirements in paragraph (a) or paragraph (b) of this section with respect to such receipts. Proposal No. 5 Proposed by Dairy Program, Agricultural Marketing Service Make such changes as may be necessary to ensure that all provisions of any potential marketing agreement or order that may result from this hearing conform with each other. Copies of this notice of hearing may be obtained online at http://www.ams.usda.gov/dairy, or from the Hearing Clerk, United States Department of Agriculture, STOP 9200--Room 1031, 1400 Independence Avenue SW., Washington, DC 20250-9200. Copies of the transcript of testimony and exhibits taken at the hearing will be made available for viewing at http://www.ams.usda.gov/dairy after the hearing adjourns. If you wish to purchase a copy, arrangements may be made with the reporter at the hearing. When a Notice of Hearing is issued, USDA employees gain knowledge that a hearing will be held. From this time and until the issuance of a Final Decision in this proceeding, USDA employees involved in the decisional process are prohibited from discussing the merits of the hearing issues on an ex parte basis with any person having an interest in the proceeding. The prohibition applies to employees in the following organizational units: Office of the Secretary of Agriculture; Office of the Administrator, AMS; Office of the General Counsel; and the AMS Dairy Program (Washington, DC office), and the offices of all Market Administrators. Procedural matters are not subject to the above prohibition and may be discussed at any time. Dated: July 27, 2015. Rex A. Barnes, Associate Administrator. [FR Doc. 2015-18704 Filed 8-5-15; 8:45 am] BILLING CODE 3410-02-P
![47210 Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules
DEPARTMENT OF AGRICULTURE therefore, is excluded from the Executive Order 12988, Civil Justice
requirements of Executive Order 12866. Reform
Agricultural Marketing Service Notice is hereby given of a public
hearing to be held at the Clovis Veterans The marketing order proposed herein
7 CFR Part 1051 Memorial District, Clovis, California, has been reviewed under Executive
beginning at 9:00 a.m. on Tuesday, Order 12988, Civil Justice Reform. It is
[Doc. No. AO–15–0071; AMS–DA–14–0095] September 22, 2015, with respect to the not intended to have a retroactive effect.
proposed establishment of a marketing If adopted, operation of state law is such
Milk in California; Notice of Hearing on agreement and order (order) regulating that the state law may be suspended, in
a Proposal To Establish a Federal Milk the handling of milk in the State of part or in whole, if a Federal order is
Marketing Order California. implemented.
The hearing is called pursuant to the Preliminary Economic Analysis and
AGENCY: Agricultural Marketing Service,
provisions of the Agricultural Marketing Detailed Analysis Information
USDA.
Agreement Act of 1937, as amended (7
ACTION: Notice of public hearing on U.S.C. 601–674) (Act), and the A preliminary economic analysis as
proposed rulemaking. applicable rules of practice and well as additional detailed analysis,
procedure governing the formulation of data and information used in
SUMMARY: A public hearing is being held
marketing agreements and marketing developing the preliminary economic
to consider and take evidence on a
orders (7 CFR part 900). analysis are presented at the AMS Dairy
proposal that would establish a Federal
The purpose of the hearing is to: Programs Web site, www.ams.usda.gov/
milk marketing order to regulate the (a) Receive evidence with respect to dairy.
handling of milk in California. The the economic and marketing conditions
proposed marketing area would The Act provides that administrative
which relate to the proposed marketing proceedings must be exhausted before
incorporate the entire state of California. agreement and order, hereinafter set
USDA received four proposals from parties may file suit in court. Under
forth, and any appropriate modifications Section 8c(15)(A) of the Act, any
interested parties, some that include thereof;
certain milk pricing and pooling handler subject to an order may request
(b) Determine whether the handling of modification or exemption from such
provisions not found in current Federal milk in the area proposed for regulation
milk orders. The proposals incorporate order by filing with the United States
is in the current of interstate or foreign Department of Agriculture (USDA) a
the same dairy product classification commerce or directly burdens,
system used throughout the Federal petition stating that the order, any
obstructs, or affects interstate or foreign provision of the order, or any obligation
milk marketing order system. commerce;
Additional features would recognize imposed in connection with the order is
(c) Determine whether there is need not in accordance with the law. A
California quota premium and fluid for a marketing agreement or order
milk fortification values. The proposals handler is afforded the opportunity for
regulating the handling of milk in the a hearing on the petition. After a
noticed herein would not modify any area;
existing Federal milk marketing orders. hearing, USDA would rule on the
(d) Determine the economic impact of
petition. The Act provides that the
DATES: The hearing will convene at 9:00 the proposed order on the industry in
district court of the United States in any
a.m. on Tuesday, September 22, 2015. the proposed marketing area and on the
district in which the handler is an
ADDRESSES: The hearing will be held at public affected by such program; and
(e) Determine whether the proposed inhabitant, or has its principle place of
the Clovis Veterans Memorial District business, has jurisdiction to review
Building, 808 Fourth Street, Clovis, marketing agreement and order or
appropriate modifications thereof would USDA’s decision on the petition,
California 93612; telephone (559) 299– provided a complaint is filed not later
0471. If still ongoing, the hearing will be tend to effectuate the declared policy of
the Act. than 20 days after the date of the entry
held on October 22 and 23, 2015, at the of the ruling.
Piccadilly Inn Airport Hotel, 5115 E. Actions under the Federal milk order
program are subject to the Regulatory Interested parties who wish to
McKinley Avenue, Fresno, California introduce exhibits should provide the
93727; telephone (559) 375–7760. Flexibility Act (5 U.S.C. 601–612)
(RFA). The RFA seeks to ensure that, Administrative Law Judge at the hearing
FOR FURTHER INFORMATION CONTACT: with four (4) copies of such exhibits for
within the statutory authority of a
William Francis, Director, Order program, the regulatory and information the official record. Additional copies
Formulation and Enforcement Division, collection requirements are tailored to should be made available for the use of
USDA/AMS/Dairy Program, Stop the size and nature of small businesses. other hearing participants. Any party
0231—Room 2969–S, 1400 For the purpose of the RFA, a dairy farm that has submitted a proposal noticed
Independence Avenue SW., is a ‘‘small business’’ if it has an annual herein, when participating as a witness,
Washington, DC 20250–0231; (202) 720– gross revenue of less than $750,000, and is required to make their testimony—if
6274; email address: william.francis@ a dairy products manufacturer is a prepared as an exhibit—and any other
ams.usda.gov. ‘‘small business’’ if it has fewer than 500 exhibits, available to USDA officials
Persons requiring a sign language employees (13 CFR 121.201). Most prior to the start of the hearing on the
interpreter or other special parties subject to a milk order are day of their appearance. Individual
accommodations should contact Diane
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considered small businesses. dairy farmers are not subject to this
Hirsch, AMS Dairy Program, at (425) Accordingly, interested parties are requirement.
487–5601, email: dhirsch@ invited to present evidence on the The hearing will continue until such
fmmaseattle.com, before the hearing probable regulatory and informational time as determined to have ended by the
begins. impact of the hearing proposals on presiding Administrative Law Judge.
SUPPLEMENTARY INFORMATION: This small businesses. Also, parties may offer The schedule for the next session will
administrative action is governed by the modifications of these proposals for the be announced at the time of
provisions of Sections 556 and 557 of purpose of tailoring their applicability adjournment. Such reconvening date
Title 5 of the United States Code and, to small businesses. and time will also be posted on the
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AMS-Dairy Programs Web site at http:// Subpart B—Milk Pricing Definitions
www.ams.usda.gov/dairy. Classification of Milk § 1051.2 California marketing area.
The provisions of the proposed 1051.40 Classes of utilization.
marketing order designated 7 CFR part The marketing area means all territory
1051.41 [Reserved] within the bounds of the following
1051, as set forth below, have not 1051.42 Classification of transfers and
received the approval of USDA. states and political subdivisions,
diversions.
including all piers, docks, and wharves
List of Subjects in 7 CFR Part 1051 1051.43 General classification rules.
connected therewith and all craft
1051.44 Classification of producer milk.
Milk marketing orders. 1051.45 Market administrator’s reports and
moored thereat, and all territory
announcements concerning occupied by government (municipal,
■ 1. The authority citation for 7 CFR classification. State, or Federal) reservations,
part 1051 reads as follows: installations, institutions, or other
Class Prices similar establishments if any part
Authority: 7 U.S.C. 601–674, and 7253.
1051.50 Class prices, component prices, thereof is within any of the listed states
■ 2. Testimony is invited on the and advanced pricing factors. or political subdivisions: All of the State
following proposals or appropriate 1051.51 Class I differential and price. of California.
modifications to such proposals. 1051.52 Adjusted Class I differentials.
1051.53 Announcement of class prices, § 1051.3 Route disposition.
Proposal Number 1 component prices, and advanced pricing See § 1000.3.
Submitted by California Dairies, Inc.; factors.
1051.54 Equivalent price. § 1051.4 Plant.
Dairy Farmers of America, Inc.; and
Land O’ Lakes, Inc. Marketwide Service Payments
See § 1000.4.
■ 3. This proposal seeks to add a new 1051.55 Transportation credits. § 1051.5 Distributing plant.
part 1051 to read as follows: 1051.56 Mileage rate for transportation See § 1000.5.
credits.
PART 1051—MILK IN THE CALIFORNIA § 1051.6 Supply plant.
Producer Prices
MARKETING AREA See § 1000.6.
1051.60 Handler’s value of milk.
Sec. 1051.61 Computation of producer § 1051.7 Pool plant.
Subpart A—Order Regulating Handling component prices and producer price Pool plant means a plant as specified
differential. in paragraphs (a) through (d) of this
General Provisions 1051.62 Announcement of producer prices.
section, but excluding a plant specified
1051.1 General Provisions. Subpart C—Payments for Milk in paragraph (f) of this section. The
Definitions pooling standards described in
Producer Payments
1051.2 California marketing area. paragraphs (d) of this section are subject
1051.70 Producer-settlement fund. to modification pursuant to paragraph
1051.3 Route disposition.
1051.4 Plant. 1051.71 Payments to the producer- (e) of this section:
1051.5 Distributing plant. settlement fund.
(a) A distributing plant, other than a
1051.6 Supply plant. 1051.72 Payments from the producer-
plant qualified as a pool plant pursuant
1051.7 Pool plant. settlement fund.
1051.73 Payments to producers and
to paragraph (b) of this section or
1051.8 Nonpool plant.
cooperative associations. § lll .7(b) of any other Federal milk
1051.9 Handler.
1051.10 Producer-handler. 1051.74 [Reserved] order, from which during the month 25
1051.11 [Reserved] 1051.75 Plant location adjustments for percent or more of the total quantity of
1051.12 Producer. nonpool milk. fluid milk products physically received
1051.13 Producer milk. 1051.76 Payments by a handler operating a at the plant (excluding concentrated
1051.14 Other source milk. partially regulated distributing plant. milk received from another plant by
1051.15 Fluid milk product. 1051.77 Adjustment of accounts. agreement for other than Class I use) are
1051.16 Fluid cream product. 1051.78 Charges on overdue accounts. disposed of as route disposition or are
1051.17 CDFA, quota premium, quota transferred in the form of packaged fluid
nonfat solids, and non-quota milk. Administrative Assessment and Marketing
Service Deduction milk products to other distributing
1051.18 Cooperative association.
1051.19 Commercial food processing plants. At least 25 percent of such route
1051.85 Assessment for order
establishment. disposition and transfers must be to
administration.
1051.86 Deduction for marketing services.
outlets in the marketing area.
Market Administrator (b) Any distributing plant located in
1051.25 Market administrator. Subpart D—Miscellaneous Provisions the marketing area which during the
Administrative Provisions 1051.90 Dates. month processed at least 15 percent of
1051.26 Continuity and separability of Authority: 7 U.S.C. 601—674 the total quantity of fluid milk products
provisions. physically received at the plant
Subpart A—Order Regulating Handling (excluding concentrated milk received
Handlers
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from another plant by agreement for
1051.27 Handler responsibility for records General Provisions other than Class I use) into ultra-
and facilities. pasteurized or aseptically-processed
1051.28 Termination of obligations. § 1051.1 General provisions.
fluid milk products.
Reports The terms, definitions, and provisions (c) A plant that is located in the
1051.30 Reports of receipts and utilization. in part 1000 of this chapter apply to this marketing area which during the month
1051.31 Producer delivery and payroll part 1051. In this part 1051, all receives milk from a producer located in
reports. references to sections in part 1000 refer the marketing area or from a cooperative
1051.32 Other reports. to part 1000 of this chapter. marketing the milk of a producer
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located in the marketing area pursuant (3) A plant located within the (a) Operates a dairy farm and a
to § 1051.9(c). marketing area and qualified pursuant distributing plant from which there is
(1) A plant located in Churchill to paragraph (a) of this section which route disposition in the marketing area,
county Nevada that receives milk from meets the pooling requirements of and from which total route disposition
producers located in Churchill County another Federal order, and from which and packaged sales of fluid milk
or in the marketing area or from a more than 50 percent of its route products to other plants during the
cooperative marketing the milk of a disposition has been in the other month does not exceed 3 million
producer located in the marketing area Federal order marketing area for 3 pounds;
or in Churchill County pursuant to consecutive months; (b) Receives fluid milk from own farm
§ 1051.9(c). (4) A plant located outside any production or milk that is fully subject
(d) A supply plant located outside the Federal order marketing area and to the pricing and pooling provisions of
marketing area (except a plant described qualified pursuant to paragraph (a) of the order in this part or any other
in § 1051.7(c)(1)) from which the this section that meets the pooling Federal order;
quantity of bulk fluid milk products requirements of another Federal order (c) Receives at its plant or acquires for
shipped to (and physically unloaded and has had greater route disposition in route disposition no more than 150,000
into) plants described in paragraph (a) such other Federal order’s marketing pounds of fluid milk products from
and (b) of this section is not less than area for 3 consecutive months; handlers fully regulated under any
50 percent of the Grade A milk received (5) A plant located in another Federal Federal order. This limitation shall not
from dairy farmers and handlers order marketing area and qualified apply if the producer-handler’s own
described in § 1000.9(c), including milk pursuant to paragraph (a) of this section farm production is less than 150,000
diverted pursuant to § 1051.13, subject that meets the pooling requirements of pounds during the month;
to the following conditions: such other Federal order and does not (d) Disposes of no other source milk
(1) If milk is delivered directly from have a majority of its route distribution as Class I milk except by increasing the
producers’ farms that are located in this marketing area for 3 consecutive nonfat milk solids content of the fluid
outside of the marketing area such months or if the plant is required to be milk products;
producers must be grouped by state into regulated under such other Federal (e) Provides proof satisfactory to the
reporting units and each reporting unit order without regard to its route market administrator that the care and
must independently meet the shipping disposition in any other Federal order management of the dairy animals and
requirements of this paragraph; and marketing area; other resources necessary to produce all
(2) Concentrated milk transferred (6) A plant qualified pursuant to Class I milk handled (excluding receipts
from the supply plant located outside paragraph (c) of this section which also from handlers fully regulated under any
the marketing area to a distributing meets the pooling requirements of Federal order) and the processing and
plant shall be excluded from the supply another Federal order and from which packaging operations are the producer-
plant’s shipments in computing the greater qualifying shipments are made handler’s own enterprise and at its own
percentages in paragraphs (d)(1). to plants regulated under the other risk; and
(e) The applicable shipping (f) Any producer-handler with Class I
Federal order than are made to plants
percentages of paragraphs (d) of this route dispositions and/or transfers of
regulated under the order in this part, or
section and § 1051.13(d)(2), and (d)(3) packaged fluid milk products in the
the plant has automatic pooling status
may be increased or decreased, for all or marketing area described in § 1131.2 of
under the other Federal order; and
part of the marketing area, by the market (g) Any plant that qualifies as a pool this chapter shall be subject to payments
administrator if the market plant in each of the immediately into the Order 1131 producer settlement
administrator finds that such preceding 3 months pursuant to fund on such dispositions pursuant to
adjustment is necessary to encourage paragraph (a) of this section or the § 1000.76(a) and payments into the
needed shipments or to prevent shipping percentages in paragraph (c) of Order 1131 administrative fund
uneconomic shipments. Before making this section that is unable to meet such provided such dispositions are less than
such a finding, the market administrator performance standards for the current three million pounds in the current
shall investigate the need for adjustment month because of unavoidable month and such producer-handler had
either on the market administrator’s circumstances determined by the market total Class I route dispositions and/or
own initiative or at the request of administrator to be beyond the control transfers of packaged fluid milk
interested parties if the request is made of the handler operating the plant, such products from own farm production of
in writing at least 15 days prior to the as a natural disaster (ice storm, wind three million pounds or more the
month for which the requested revision storm, flood), fire, breakdown of previous month. If the producer-handler
is desired effective. If the investigation equipment, or work stoppage, shall be has Class I route dispositions and/or
shows that an adjustment of the considered to have met the minimum transfers of packaged fluid milk
shipping percentages might be performance standards during the products into the marketing area
appropriate, the market administrator period of such unavoidable described in § 1131.2 of this chapter of
shall issue a notice stating that an circumstances, but such relief shall not three million pounds or more during the
adjustment is being considered and be granted for more than 2 consecutive current month, such producer-handler
invite data, views and arguments. Any months. shall be subject to the provisions
decision to revise an applicable described in § 1131.7 of this chapter or
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shipping or diversion percentage must § 1051.8 Nonpool plant. § 1000.76(a).
be issued in writing at least one day See § 1000.8.
before the effective date. § 1051.11 [Reserved]
(f) The term pool plant shall not apply § 1051.9 Handler.
to the following plants: See § 1000.9. § 1051.12 Producer.
(1) A producer-handler as defined (a) Except as provided in paragraph
under any Federal order; § 1051.10 Producer-handler. (b) of this section, producer means any
(2) An exempt plant as defined in Producer-handler means a person person who produces milk approved by
§ 1000.8(e); who: a duly constituted regulatory agency for
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Handlers (1) The product pounds, pounds of § 1051.41 [Reserved]
butterfat, pounds of protein, and pounds
§ 1051.27 Handler responsibility for § 1051.42 Classification of transfers and
of solids-not-fat other than protein diversions.
records and facilities.
(other solids) contained in receipts of
See § 1000.27. milk from producers; and See § 1000.42.
§ 1051.28 Termination of obligations. (2) The utilization or disposition of § 1051.43 General classification rules.
See § 1000.28. such receipts. See § 1000.43.
Reports (d) Each handler not specified in
paragraphs (a) through (c) of this section § 1051.44 Classification of producer milk.
§ 1051.30 Reports of receipts and shall report with respect to its receipts See § 1000.44.
utilization. and utilization of milk and milk § 1051.45 Market administrator’s reports
Each handler shall report monthly so products in such manner as the market and announcements concerning
that the market administrator’s office administrator may prescribe. classification.
receives the report on or before the 6th (e) Each handler shall report such See § 1000.45.
day after the end of the month, in the additional information as deemed
detail and on the prescribed forms, as necessary by the market administrator. Class Prices
follows:
(a) Each handler that operates a pool § 1051.31 Producer delivery and payroll § 1051.50 Class prices, component prices,
reports. and advanced pricing factors.
plant shall report for each of its
operations the following information: See § 1000.50.
(a) On or before the 6th day after the
(1) Product pounds, pounds of end of each month, each handler that § 1051.51 Class I differential and price.
butterfat, pounds of protein, and pounds operates a pool plant pursuant to
of solids-not-fat other than protein The Class I differential shall be the
§ 1051.7 and each handler described in differential established for Los Angeles
(other solids) contained in or § 1000.9(c) shall report to the market
represented by: County, California, which is reported in
administrator its producer deliveries for § 1000.52. The Class I price shall be the
(i) Receipts of producer milk, the month, in the detail prescribed by
including producer milk diverted by the price computed pursuant to § 1000.50(a)
the market administrator, showing for for Los Angeles County, California.
reporting handler, from sources other
each producer the information
than handlers described in § 1000.9(c) § 1051.52 Adjusted Class I differentials.
described in § 1051.73(f); and any other
[qualified cooperative associations]; and
information deemed necessary by the See § 1000.52.
(ii) Receipts of milk from handlers
Market Administrator.
described in § 1000.9(c); § 1051.53 Announcement of class prices,
(2) Product pounds and pounds of (b) On or before the 20th day after the component prices, and advanced pricing
butterfat contained in: end of each month, each handler that factors.
(i) Receipts of fluid milk products and operates a pool plant pursuant to
See § 1000.53.
bulk fluid cream products from other § 1051.7 and each handler described in
pool plants; § 1000.9(c) shall report to the market § 1051.54 Equivalent price.
(ii) Receipts of other source milk; administrator its producer payroll for See § 1000.54.
(iii) Receipts of all condensed skim the month, in the detail prescribed by
and dry powder; and the market administrator, showing for Marketwide Service Payments
(iv) Inventories at the beginning and each producer the information § 1051.55 Transportation credits.
end of the month of fluid milk products, described in § 1051.73(f) and any other
bulk fluid cream products, condensed information deemed necessary by the (a) Payments for transportation credits
milk, and dry powder; Market Administrator. to handlers and cooperative associations
(3) The utilization or disposition of all shall be made as follows:
(c) Each handler operating a partially (1) On or before the 13th day (except
milk and milk products required to be regulated distributing plant who elects
reported pursuant to this paragraph; as provided in § 1000.90) after the end
to make payment pursuant to of each month the market administrator
(4) Such other information with
§ 1000.76(b) shall report for each dairy shall pay to each handler, including
respect to the receipts and utilization of
farmer who would have been a producer cooperative associations acting as
skim milk, butterfat, milk protein, other
if the plant had been fully regulated in handlers that delivered and reported
nonfat solids, as the market
the same manner as prescribed for pursuant to § 1051.30 (c), milk directly
administrator may prescribe, including
reports required by paragraph (a) of this from producers’ farms as specified in
the use of condensed skim or dry
section. paragraph (b)(1) to plants as specified in
powder in fortification or reconstitution
of Class I products. § 1051.32 Other reports. (b)(1) and (2) of this section, an amount
(b) Each handler operating a partially determined pursuant to paragraph (c) of
In addition to the reports required this section.
regulated distributing plant shall report
pursuant to §§ 1051.30 and 1051.31, (2) Transportation credits paid
with respect to such plant in the same
each handler shall report any pursuant to this section shall be subject
manner as prescribed for reports
information the market administrator to final verification by the market
required by paragraph (a) of this section.
deems necessary to verify or establish
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Receipts of milk that would have been administrator pursuant to § 1000.77; and
each handler’s obligation under the (b) Transportation credits shall apply
producer milk if the plant had been
order. to the following:
fully regulated shall be reported in lieu
of producer milk. The report shall show Subpart B—Milk Pricing (1) Bulk milk delivered directly from
also the quantity of any reconstituted dairy farms to pool plants described in
skim milk in route disposition in the Classification of Milk (b)(2) in the following Transportation
marketing area. Zones:
(c) Each handler described in § 1051.40 Classes of utilization. (i) Transportation Zone 1—deliveries
§ 1000.9(c) shall report: See § 1000.40. to plants located in the counties of Los
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Angeles, Orange, Riverside, San (5) Round the result in paragraph for fortifying Class I products during the
Bernardino, San Diego and Ventura (a)(4) of this section to five decimal current month a maximum charge equal
originating from dairy farms located in places to compute the fuel adjustor rate. to the current Class I solids not fat price
the counties of Riverside, San Diego, or (6) Compute the per hundredweight [the Class I skim milk price in the $2.10
San Bernardino; rate as follows: zone divided by 9], less the current
(ii) Transportation Zone 2—deliveries (i) For Transportation Zone 1 the sum Class IV solids not fat price established
to plants located in the counties of Los of $0.04497 plus the product of the in § 1051.53. In no case shall the
Angeles, Orange, Riverside, San miles determined in § 1051.55(c)(1)(i) deduction be less than zero cents ($0.00)
Bernardino, San Diego and Ventura times the sum of $0.00318 plus the nor more than nineteen and eighty-five
originating from dairy farms located in amount determined in § 1051.56(a)(5); hundredths cents ($0.1985); and
all counties within the marketing area (ii) For Transportation Zone 2 the sum (4) Deduct for each pound of milk
except Riverside, San Diego, and San of $0.00485 plus the product of the solids-not-fat in condensed skim milk
Bernardino; miles determined in § 1051.55(c)(1)(i) used for fortifying Class I products
(iii) Transportation Zone 3— times the sum of $0.00546 plus the during the current month a maximum
deliveries to plants located in the amount determined in § 1051.56(a)(5); charge equal to the current Class I solids
counties of Alameda, Contra Costa, (iii) For Transportation Zone 3 the not fat price [the Class I skim milk price
Marin, Napa, Santa Clara, San sum of $0.05441 plus the product of the in the $2.10 zone divided by 9], less the
Francisco, Santa Cruz, San Mateo, miles determined in § 1051.55(c)(1)(i) current Class II solids not fat price
Sacramento, Solano and Sonoma times the sum of $0.00571 plus the established in § 1051.53. In no case shall
Counties originating from dairy farms amount determined in § 1051.56(a)(5); the deduction be less than zero cents
located in all counties within the (b) The market administrator shall ($0.00) nor more than nine and eighty-
marketing area; announce publicly on or before the 23rd seven hundredths cents ($0.0987).
(2) Pool plant(s) which for the month day of the month (except as provided in (b) Class II value.
have utilization of greater than 50 § 1000.90 of this chapter) the fuel (1) Multiply the pounds of nonfat
percent in Classes I and/or II. The adjustor rate pursuant to paragraph (a) solids in Class II skim milk by the Class
utilization requirement may be met for of this section for the following month. II nonfat solids price; and
the current month or it may be met on (2) Add an amount obtained by
the basis of utilization during the Producer Prices multiplying the pounds of butterfat in
preceding 12-month period ending with Class II times the Class II butterfat price.
§ 1051.60 Handler’s value of milk.
the current month. (c) Class III value.
(c) Transportation credits shall be For the purpose of computing a (1) Multiply the pounds of protein in
calculated at the following rates: handler’s obligation for producer milk, Class III skim milk by the protein price;
(1) With respect to each delivery the market administrator shall (2) Add an amount obtained by
described in paragraph (b)(1) of this determine for each month the value of multiplying the pounds of other solids
section, the market administrator shall: milk of each handler with respect to in Class III skim milk by the other solids
(i) Determine the shortest hard-surface each of the handler’s pool plants and of price; and
highway mileage between the shipping each handler described in § 1000.9(c) (3) Add an amount obtained by
farm and the receiving plant. The with respect to milk that was not multiplying the pounds of butterfat in
mileage determined by this calculation received at a pool plant by adding the Class III by the butterfat price.
shall not be greater than 225; amounts computed in paragraphs (a) (d) Class IV value.
(ii) Multiply the pounds determined through (i) of this section and (1) Multiply the pounds of nonfat
in § 1051.55(b)(1) by the rate for the subtracting from that total amount the solids in Class IV skim milk by the
month computed pursuant to values computed in paragraphs (i) and nonfat solids price; and
§ 1051.56(a)(6) for each Transportation (j) of this section. Unless otherwise (2) Add an amount obtained by
Zone. specified, the skim milk, butterfat, and multiplying the pounds of butterfat in
§ 1051.56 Mileage rate for transportation
the combined pounds of skim milk and Class IV by the butterfat price.
credits. butterfat referred to in this section shall (e) Multiply the pounds of skim milk
(a) The market administrator shall result from the steps set forth in and butterfat overage assigned to each
compute the fuel adjustor rate and the § 1000.44(a), (b), and (c), respectively, class pursuant to § 1000.44(a)(11) and
hundredweight rate each moth as and the nonfat components of producer the corresponding step of § 1000.44(b)
follows: milk in each class shall be based upon by the skim milk prices and butterfat
(1) For the fuel adjustor rate compute the proportion of such components in prices applicable to each class.
the simple average rounded to three producer skim milk. Receipts of (f) Multiply the difference between
decimal places for the most recent 8 nonfluid milk products that are the current month’s Class I, II, or III
weeks of the Diesel (on Highway)—All distributed as labeled reconstituted milk price, as the case may be, and the Class
Types Price per gallon as reported by for which payments are made to the IV price for the preceding month and by
the Energy Information Administration producer-settlement fund of another the hundredweight of skim milk and
of the United States Department of Federal order under § 1000.76(a)(4) or butterfat subtracted from Class I, II, or
Energy for the series California Number (d) shall be excluded from pricing under III, respectively, pursuant to
2 Diesel Retail Prices; this section. § 1000.44(a)(7) and the corresponding
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(2) From the result in paragraph (a)(1) (a) Class I value. step of § 1000.44(b).
in this section subtract $4.099 per (1) Multiply the pounds of skim milk (g) Multiply the difference between
gallon; in Class I by the Class I skim milk price; the Class I price applicable at the
(3) Divide the result in paragraph and location of the pool plant and the Class
(a)(2) of this section by 5.8, and round (2) Add an amount obtained by IV price by the hundredweight of skim
to three decimal places to compute the multiplying the pounds of butterfat in milk and butterfat assigned to Class I
fuel cost adjustment factor; Class I by the Class I butterfat price; pursuant to § 1000.43(d) and the
(4) Divide the result in paragraph (3) Deduct for each pound of milk hundredweight of skim milk and
(a)(3) of this section by 520; solids-not-fat in nonfat dry milk used butterfat subtracted from Class I
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adjusted pursuant to § 1051.75 for the (vi) Less proper deductions price for the month. The Class I price to
location of the plant from which authorized in writing by such producer, be used shall be that price effective at
received. and plus or minus adjustments for the location of the receiving plant;
errors in previous payments to such (ii) The pounds of nonfat solids in
§ 1051.72 Payments from the producer- producer subject to approval by the Class II skim milk by the Class II nonfat
settlement fund.
market administrator; and solids price;
No later than the 14th day after the (vii) Less deductions for marketing (iii) The pounds of butterfat in Class
end of each month (except as provided services pursuant to § 1000.86. II times the Class II butterfat price;
in § 1000.90), the market administrator (b) Payments for milk received from (iv) The pounds of nonfat solids in
shall pay to each handler the amount, if cooperative association members. On or Class IV times the nonfat solids price;
any, by which the amount computed before the day prior to the dates (v) The pounds of butterfat in Class III
pursuant to § 1051.71(b) exceeds the specified in paragraphs (a)(1) and (a)(2) and Class IV milk times the butterfat
amount computed pursuant to of this section (except as provided in price;
§ 1051.71(a); and to each cooperative § 1000.90), each handler shall pay to a (vi) The pounds of protein in Class III
9(c) handler the quota premium value of cooperative association for milk from milk time the protein price;
its producer milk as reported by CDFA. producers who market their milk (vii) The pounds of other solids in
If, at such time, the balance in the through the cooperative association and Class III milk times the other solids
producer-settlement fund is insufficient who have authorized the cooperative to price; and
to make all payments pursuant to this collect such payments on their behalf an (viii) Add together the amounts
section, the market administrator shall amount equal to the sum of the computed in paragraphs (c)(2)(i)
reduce uniformly such payments and individual payments otherwise payable through (vii) of this section and from
shall complete the payments as soon as for such producer milk pursuant to that sum deduct any payment made
the funds are available. paragraphs (a)(1) and (a)(2) of this pursuant to paragraph (c)(1) of this
section. section;
§ 1051.73 Payments to producers and to (c) Payment for milk received from (3) For the total quantity of milk
cooperative associations. cooperative association pool plants or received during the month from a
(a) Each handler shall pay each from cooperatives as handlers pursuant cooperative association in its capacity as
producer for producer milk for which to § 1000.9(c). On or before the day prior a handler under § 1000.9(c) as follows:
payment is not made to a cooperative to the dates specified in paragraphs (i) The pounds of butterfat received
association pursuant to paragraph (b) of (a)(1) and (a)(2) of this section (except times the producer butterfat price for
this section, as follows: as provided in § 1000.90), each handler the month;
(1) Partial payment. For each who receives fluid milk products at its (ii) The pounds of protein received
producer who has not discontinued plant from a cooperative association in times the producer protein price for the
shipments as of the date of this partial its capacity as the operator of a pool month;
payment, payment shall be made so that plant or who receives milk from a (iii) The pounds of other solids
it is received by each producer on or cooperative association in its capacity as received times the producer other solids
before the 30th day of the month (except a handler pursuant to § 1000.9(c), price for the month; and
as provided in § 1000.90) for milk including the milk of producers who are (iv) Add together the amounts
received during the first 15 days of the not members of such association and computed in paragraphs (c)(3)(i)
month from the producer at not less who the market administrator through (iii) of this section and from
than the lowest announced class price determines have authorized the that sum deduct any payment made
for the preceding month, less proper cooperative association to collect pursuant to paragraph (c)(1) of this
deductions authorized in writing by the payment for their milk, shall pay the section.
producer. cooperative for such milk as follows: (d) If a handler has not received full
(2) Final payment. For milk received (1) For bulk fluid milk products and payment from the market administrator
during the month, payment shall be bulk fluid cream products received from pursuant to § 1051.72 by the payment
made so that it is received by each a cooperative association in its capacity date specified in paragraph (a), (b) or (c)
producer no later than the 15th day after as the operator of a pool plant and for of this section, the handler may reduce
the end of the month (except as milk received from a cooperative pro rata its payments to producers or to
provided in § 1000.90) in an amount association in its capacity as a handler the cooperative association (with
equal to not less than the sum of: pursuant to § 1000.9(c) during the first respect to receipts described in
(i) The pounds of butterfat received 15 days of the month, at not less than paragraph (b) of this section, prorating
times the producer butterfat price for the lowest announced class prices per the underpayment to the volume of milk
the month; hundredweight for the preceding received from the cooperative
(ii) The value of quota premium for month; association in proportion to the total
nonfat solids of producer milk of the (2) For the total quantity of bulk fluid milk received from producers by the
producer as reported to the Market milk products and bulk fluid cream handler), but not by more than the
Administrator by CDFA [net of any products received from a cooperative amount of the underpayment. The
deductions if applicable for degraded association in its capacity as the payments shall be completed on the
volumes of nonfat solids otherwise operator of a pool plant, at not less than next scheduled payment date after
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
entitled to a quota premium]; the total value of such products received receipt of the balance due from the
(iii) The pounds of protein received from the association’s pool plants, as market administrator.
times the producer protein price for the determined by multiplying the (e) If a handler claims that a required
month; respective quantities assigned to each payment to a producer cannot be made
(iv) The pounds of other solids class under § 1000.44, as follows: because the producer is deceased or
received times the producer other solids (i) The hundredweight of Class I skim cannot be located, or because the
price for the month; milk times the Class I skim milk price cooperative association or its lawful
(v) Less any payment made pursuant for the month plus the pounds of Class successor or assignee is no longer in
to paragraph (a)(1) of this section; I butterfat times the Class I butterfat existence, the payment shall be made to
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the producer-settlement fund, and in the Administrative Assessment and 1051.9 Handler.
event that the handler subsequently Marketing Service Deduction 1051.10 Producer-handler.
locates and pays the producer or a 1051.11 California quota program and
§ 1051.85 Assessment for order producer quota.
lawful claimant, or in the event that the
administration. 1051.12 Producer.
handler no longer exists and a lawful 1051.13 Producer milk.
claim is later established, the market On or before the payment receipt date
1051.14 Other source milk.
administrator shall make the required specified under § 1051.71, each handler 1051.15 Fluid milk product.
payment from the producer- settlement shall pay to the market administrator its 1051.16 Fluid cream product.
fund to the handler or to the lawful pro rata share of the expense of 1051.17 [Reserved]
claimant, as the case may be. administration of the order at a rate 1051.18 Cooperative association.
(f) In making payments to producers specified by the market administrator 1051.19 Commercial food processing
that is no more than 8 cents per establishment.
pursuant to this section, each handler
shall furnish each producer, except a hundredweight with respect to: Market Administrator, Continuing
producer whose milk was received from (a) Receipts of producer milk Obligations, and Handler Responsibilities
a cooperative association handler (including the handler’s own 1051.25 Market administrator.
described in § 1000.9(a) or (c), a production) other than such receipts by 1051.26 Continuity and separability of
supporting statement in a form that may a handler described in § 1000.9(c) that provisions.
be retained by the recipient which shall were delivered to pool plants of other 1051.27 Handler responsibility for records
handlers; and facilities.
show: 1051.28 Termination of obligations.
(1) The name, address, Grade A (b) Receipts from a handler described
identifier assigned by a duly constituted in § 1000.9(c); Handler Reports
regulatory agency, and payroll number (c) Receipts of concentrated fluid milk 1051.30 Reports of receipts and utilization.
of the producer; products from unregulated supply 1051.31 Producer and payroll reports.
plants and receipts of nonfluid milk 1051.32 Other reports.
(2) The daily and total pounds, and
products assigned to Class I use
the month and dates such milk was Subpart B—Milk Pricing
pursuant to § 1000.43(d) and other
received from that producer;
source milk allocated to Class I pursuant Classification of Milk
(3) The total pounds of butterfat,
to § 1000.44(a)(3) and (8) and the 1051.40 Classes of utilization.
protein, and other solids contained in
corresponding steps of § 1000.44(b), 1051.41 [Reserved]
the producer’s milk; 1051.42 Classification of transfers and
except other source milk that is
(4) The pounds of quota nonfat solids excluded from the computations diversions.
in the producer’s milk; pursuant to § 1051.60(h) and (i); and 1051.43 General classification rules.
(5) The minimum rate or rates at (d) Route disposition in the marketing 1051.44 Classification of producer milk.
which payment to the producer is 1051.45 Market administrator’s reports and
area from a partially regulated announcements concerning
required pursuant to the order in this distributing plant that exceeds the skim classification.
part; milk and butterfat subtracted pursuant
(6) The rate used in making payment to § 1000.76(a)(1)(i) and (ii). Class Prices
if the rate is other than the applicable 1051.50 Class prices, component prices,
minimum rate; § 1051.86 Deduction for marketing and advanced pricing factors.
(7) The amount, or rate per services. 1051.51 Class I differential and price.
hundredweight, or rate per pound of See § 1000.86. 1051.52 Adjusted Class I differentials.
component, and the nature of each 1051.53 Announcement of class prices,
Subpart D—Miscellaneous Provisions component prices, and advanced pricing
deduction claimed by the handler; and factors.
(8) The net amount of payment to the § 1051.90 Dates 1051.54 Equivalent price.
producer or cooperative association. 1051.55 Transportation credits and
See § 1000.90.
transportation allowances.
§ 1051.74 [Reserved]
Proposal Number 2 Producer Price Differential
§ 1051.75 Plant location adjustments for Submitted by the Dairy Institute of 1051.60 Handler’s value of milk.
nonpool milk.
California. 1051.61 Computation of producer price
For purposes of making payments for differential.
nonpool milk, a plant location ■ 4. This proposal seeks to add a new 1051.62 Announcement of producer prices.
adjustment shall be determined by part 1051 to read as follows: 1051.68 Payments to producers under the
subtracting the Class I price specified in California Quota Program.
PART 1051—MILK IN THE CALIFORNIA
§ 1051.51 from the Class I price at the MARKETING AREA Subpart C—Payments for Milk
plant’s location. The difference, plus or
Producer Payments
minus as the case may be, shall be used Subpart A—Order Regulating Handling
to adjust the payments required 1051.70 Producer-settlement fund.
Sec. 1051.71 Payments to the producer-
pursuant to § 1000.76.
settlement fund.
General Provisions 1051.72 Payments from the producer-
§ 1051.76 Payments by a handler
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operating a partially regulated distributing 1051.1 General Provisions. settlement fund.
plant. 1051.73 Partial payments to producers and
Definitions to cooperative associations.
See § 1000.76. 1051.2 California marketing area. 1051.74 [Reserved]
1051.3 Route disposition. 1051.75 Plant location adjustments for
§ 1051.77 Adjustment of accounts.
1051.4 Plant. producer milk and nonpool milk.
See § 1000.77. 1051.5 Distributing plant. 1051.76 Payments by a handler operating a
1051.6 Supply plant. partially regulated distributing plant.
§ 1051.78 Charges on overdue accounts. 1051.7 Pool plant. 1051.77 Adjustment of accounts.
See § 1000.78. 1051.8 Nonpool plant. 1051.78 Charges on overdue accounts.
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(a) Received by the operator of a pool (4) Diverted milk shall be priced at (b) Products (other than fluid milk
plant directly from a producer or a the location of the plant to which products, fluid cream products, and
handler described in § 1051.9(c) or (d). diverted. products produced at the plant during
All milk received pursuant to this (e) Producer milk shall not include the same month) from any source which
paragraph shall be priced at the location milk of a producer that is subject to are reprocessed, converted into, or
of the plant where it is first physically inclusion and participation in a combined with another product in the
received; marketwide equalization pool under a plant during the month; and
(b) Received by a handler described in milk classification and pricing program (c) Receipts of any milk product
§ 1051.9(c) or (d) in excess of the imposed under the authority of a State (other than a fluid milk product or a
quantity delivered to pool plants; government maintaining marketwide fluid cream product) for which the
(c) Diverted by a pool plant operator pooling of returns. handler fails to establish a disposition.
to another pool plant. Milk so diverted (f) The quantity of milk reported by a § 1051.15 Fluid milk products.
shall be priced at the location of the handler pursuant to either
plant to which diverted; or § 1051.30(a)(1) or § 1051.30(c)(1) for See § 1000.15.
(d) Diverted by the operator of a pool April through February may not exceed § 1051.16 Fluid cream product.
plant or a cooperative association 125 percent, and for March may not See § 1000.16.
described in § 1051.9(c) or (d) to a exceed 135 percent, of the producer
nonpool plant located in the marketing milk receipts pooled by the handler § 1051.17 [Reserved]
area, subject to the following conditions: during the prior month. Milk diverted to
§ 1051.18 Cooperative association.
(1) Milk of a dairy farmer shall not be nonpool plants reported in excess of
this limit shall be removed from the See § 1000.18.
eligible for diversion unless at least the
lessor of one day’s production or 48,000 pool. Milk in excess of this limit § 1051.19 Commercial food processing
pounds of milk of such dairy farmer is received at pool plants, other than pool establishment.
physically received as producer milk at distributing plants, shall be classified See § 1000.19.
a pool plant during the first month the pursuant to § 1051.44(a)(3)(v) and
dairy farmer is a producer. If a dairy § 1051.44(b). The handler must Market Administrator, Continuing
farmer loses producer status under the designate, by producer pick-up, which Obligations, and Handler
order in this part (except as a result of milk is to be removed from the pool. If Responsibilities
a temporary loss of Grade A approval or the handler fails to provide this § 1051.25 Market administrator.
as a result of the handler of the dairy information, the market administrator
See § 1000.25.
farmer’s milk failing to pool the milk will make the determination. The
under any order), the dairy farmer’s following provisions apply: § 1051.26 Continuity and separability of
milk shall not be eligible for diversion (1) Milk shipped to and physically provisions.
unless at least the lessor of one day’s received at pool distributing plants in See § 1000.26.
production, or 48,000 pounds of milk of excess of the previous month’s pooled
the dairy farmer has been physically volume shall not be subject to the 125 § 1051.27 Handler responsibility for
records and facilities.
received as producer milk at a pool or 135 percent limitation;
plant during the first month the dairy (2) Producer milk qualified pursuant See § 1000.27.
farmer is re-associated with the market; to §13 of any other Federal Order and § 1051.28 Termination of obligations.
(2) The quantity of milk diverted by continuously pooled in any Federal See § 1000.28.
a handler described in § 1051.9(c) and Order for the previous six months shall
(d) may not exceed a percentage equal not be included in the computation of Handler Reports
to 100 percent minus the supply plant the 125 or 135 percent limitation; § 1051.30 Reports of receipts and
shipping percentage specified in (3) The market administrator may utilization.
§ 1051.7(c) (or as adjusted pursuant to waive the 125 or 135 percent limitation: Each handler shall report monthly so
§ 1051.7(c)(2)) of the producer milk (i) For a new handler on the order, that the market administrator’s office
receipts reported by the handler subject to the provisions of receives the report on or before the 9th
pursuant to § 1051.30(c), provided that § 1051.13(f)(4), or day after the end of the month, in the
not less than 10 percent of such receipts (ii) For an existing handler with detail and on the prescribed forms, as
are delivered to plants described in significantly changed milk supply follows:
§ 1051.7(c)(1)(i) through (iii). These conditions due to unusual (a) Each handler that operates a pool
percentages are subject to any circumstances; plant shall report for each of its
adjustments that may be made pursuant (4) A bloc of milk may be considered operations the following information:
to § 1051.7(c)(2)(i) through (viii) or any ineligible for pooling if the market (1) Product pounds, pounds of
additional adjustments made pursuant administrator determines that handlers butterfat, pounds of protein, pounds of
to § 1051.7 (f); and altered the reporting of such milk for the solids-not-fat other than protein (other
(3) The quantity of milk diverted to purpose of evading the provisions of solids), and the value of the somatic cell
nonpool plants by the operator of a pool this paragraph. adjustment pursuant to § 1051.50(r),
plant described in § 1051.7(a) or (b) may contained in or represented by:
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
not exceed a percentage equal to 100 § 1051.14 Other source milk.
(i) Receipts of producer milk,
percent minus the supply plant Other source milk means all skim including producer milk diverted by the
shipping percentage specified in milk and butterfat contained in or reporting handler, from sources other
§ 1051.7(c) (or as adjusted pursuant to represented by: than handlers described in § 1051.9(c)
§ 1051.7 (c)(2)) of the Grade A milk (a) Receipts of fluid milk products or (d); and
received from dairy farmers (except and bulk fluid cream products from any (ii) Receipts of milk from handlers
dairy farmers described in § 1051.12(b)) source other than producers, handlers described in § 1051.9(c) or (d);
including milk diverted pursuant to described in § 1051.9(c) and (d), or pool (2) Product pounds and pounds of
§ 1051.13; and plants; butterfat contained in:
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destroyed, or lost by a handler in a products, respectively, that are in the (3) In accordance with the utilization
vehicular accident, flood, fire, or similar same category as described in paragraph assigned to it by the market
occurrence beyond the handler’s (b)(1) or (2) of this section: administrator if transferred or diverted
control. Such uses of skim milk and (1) As Class I milk, if transferred as in the form of a bulk fluid milk product
butterfat shall be assigned to the lowest packaged fluid milk products; or transferred in the form of a bulk fluid
priced class for the month to the extent (2) If transferred or diverted in bulk cream product to an exempt plant. For
that the quantities destroyed or lost can form, classification shall be in the this purpose, the receiving handler’s
be verified from records satisfactory to classes to which allocated under the utilization of skim milk and butterfat in
the market administrator. other order: each class, in series beginning with
(i) If the operators of both plants so Class IV, shall be assigned to the extent
§ 1051.41 [Reserved] possible to its receipts of skim milk and
request in their reports of receipts and
§ 1051.42 Classification of transfers and utilization filed with their respective butterfat, in bulk fluid cream products,
diversions. market administrators, transfers in bulk and bulk fluid milk products,
(a) Transfers and diversions to pool form shall be classified as other than respectively, pro rata to each source.
plants. Skim milk or butterfat Class I to the extent that such utilization (d) Transfers and diversions to other
transferred or diverted in the form of a is available for such classification nonpool plants. Skim milk or butterfat
fluid milk product or transferred in the pursuant to the allocation provisions of transferred or diverted in the following
form of a bulk fluid cream product from the other order; forms from a pool plant to a nonpool
a pool plant to another pool plant shall (ii) If diverted, the diverting handler plant that is not a plant regulated under
be classified as Class I milk unless the must request a classification other than another order, an exempt plant, or a
handlers both request the same Class I. If the plant receiving the producer-handler plant shall be
classification in another class. In either diverted milk does not have sufficient classified:
case, the classification shall be subject utilization available for the requested (1) As Class I milk, if transferred in
to the following conditions: classification and some of the diverted the form of a packaged fluid milk
(1) The skim milk and butterfat milk is consequently assigned to Class product; and
classified in each class shall be limited I use, the diverting handler shall be (2) As Class I milk, if transferred or
to the amount of skim milk and given the option of designating the diverted in the form of a bulk fluid milk
butterfat, respectively, remaining in entire load of diverted milk as producer product or transferred in the form of a
such class at the receiving plant after milk at the plant physically receiving bulk fluid cream product, unless the
the computations pursuant to the milk. Alternatively, if the diverting following conditions apply:
§ 1051.44(a)(9) and the corresponding handler so chooses, it may designate (i) If the conditions described in
step of § 1051.44(b); which dairy farmers whose milk was paragraphs (d)(2)(i)(A) and (B) of this
(2) If the transferring plant received diverted during the month will be section are met, transfers or diversions
during the month other source milk to designated as producers under the order in bulk form shall be classified on the
be allocated pursuant to § 1051.44(a)(3) physically receiving the milk. If the basis of the assignment of the nonpool
or the corresponding step of diverting handler declines to accept plant’s utilization, excluding the milk
§ 1051.44(b), the skim milk or butterfat either of these options, the market equivalent of both nonfat milk solids
so transferred shall be classified so as to administrator will prorate the portion of and concentrated milk used in the plant
allocate the least possible Class I diverted milk in excess of Class II, III, during the month, to its receipts as set
utilization to such other source milk; and IV use among all the dairy farmers forth in paragraphs (d)(2)(ii) through
and whose milk was received from the (viii) of this section:
(3) If the transferring handler received diverting handler on the last day of the (A) The transferring handler or
during the month other source milk to month, then the second-to-last day, and diverting handler claims such
be allocated pursuant to § 1051.44(a)(8) continuing in that fashion until the classification in such handler’s report of
or (9) or the corresponding steps of excess diverted milk has been assigned receipts and utilization filed pursuant to
§ 1051.44(b), the skim milk or butterfat as producer milk under the receiving § 1051.30 for the month within which
so transferred, up to the total of the skim order; and such transaction occurred; and
milk and butterfat, respectively, in such (iii) If information concerning the (B) The nonpool plant operator
receipts of other source milk, shall not classes to which such transfers or maintains books and records showing
be classified as Class I milk to a greater diversions were allocated under the the utilization of all skim milk and
extent than would be the case if the other order is not available to the market butterfat received at such plant which
other source milk had been received at administrator for the purpose of are made available for verification
the receiving plant. establishing classification under this purposes if requested by the market
(b) Transfers and diversions to a plant paragraph, classification shall be Class I, administrator;
regulated under another Federal order. subject to adjustment when such (ii) Route disposition in the marketing
Skim milk or butterfat transferred or information is available. area of each Federal milk order from the
diverted in the form of a fluid milk (c) Transfers and diversions to nonpool plant and transfers of packaged
product or transferred in the form of a producer-handlers and to exempt fluid milk products from such nonpool
bulk fluid cream product from a pool plants. Skim milk or butterfat that is plant to plants fully regulated
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plant to a plant regulated under another transferred or diverted from a pool plant thereunder shall be assigned to the
Federal order shall be classified in the to a producer-handler under any Federal extent possible in the following
following manner. Such classification order or to an exempt plant shall be sequence:
shall apply only to the skim milk or classified: (A) Pro rata to receipts of packaged
butterfat that is in excess of any receipts (1) As Class I milk if transferred or fluid milk products at such nonpool
at the pool plant from a plant regulated diverted to a producer-handler; plant from pool plants;
under another Federal order of skim (2) As Class I milk if transferred to an (B) Pro rata to any remaining
milk and butterfat, respectively, in fluid exempt plant in the form of a packaged unassigned receipts of packaged fluid
milk products and bulk fluid cream fluid milk product; and milk products at such nonpool plant
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(4) The pounds of other solids this section and who has not lawful claimant, or in the event that the
received times the other solids price for discontinued shipments as of the date of handler no longer exists and a lawful
the month; this partial payment, for milk received claim is later established, the market
(5) The hundredweight of milk during the first 15 days of the month administrator shall make the required
received times the somatic cell from the producer at not less than the payment from the producer-settlement
adjustment for the month; lowest announced class price for the fund to the handler or to the lawful
(6) Less any payment made pursuant preceding month, less proper claimant, as the case may be.
to § 1051.73; deductions authorized in writing by the (e) In making payments to producers
(7) Less proper deductions authorized producer; payment shall be made so that pursuant to this section, each handler
in writing by such producer, and plus it is received by each producer on or shall furnish each producer, except a
or minus adjustments for errors in before the 26th day of the month (except producer whose milk was received from
previous payments to such producer as provided in § 1000.90). a cooperative association handler
subject to approval by the market (b) Payments for milk received from described in § 1051.9(a) or (c), a
administrator; and cooperative association members. On or supporting statement in a form that may
(8) Less deductions for marketing before the day prior to the date specified be retained by the recipient which shall
services pursuant to § 1000.86. in paragraph (a) of this section (except show:
(b) On or before the 18th day after the as provided in § 1000.90), each handler (1) The name, address, Grade A
end of each month, the market shall pay to a cooperative association for identifier assigned by a duly constituted
administrator shall pay direct to each milk from producers who market their regulatory agency, and payroll number
producer who has not authorized a milk through the cooperative of the producer;
cooperative association to receive association and who have authorized (2) The daily and total pounds, and
payment for such producer or for milk the cooperative to collect such the month and dates such milk was
not subject to the California Quota payments on their behalf an amount received from that producer;
Program pursuant to § 1051.68, the equal to the sum of the individual (3) The total pounds of butterfat,
amount calculated for such producer payments otherwise payable for such protein, and other solids contained in
pursuant to paragraph (a) of this section producer milk pursuant to paragraph (a) the producer’s milk;
subject to the provisions of § 1051.86. of this section. (4) The somatic cell count of the
(c) On or before the 16th day after the (c) Payment for milk received from producer’s milk;
end of each month, the market cooperative association pool plants, (5) The minimum rate or rates at
administrator, subject to the provisions from cooperatives as handlers pursuant which payment to the producer is
of § 1051.86, shall pay: to § 1051.9(c), or from handlers required pursuant to the order in this
(1) To each cooperative association pursuant to § 1051.9(d). On or before the part;
authorized to receive payments due day prior to the date specified in (6) The rate used in making payment
producers who market their milk paragraph (a) of this section (except as if the rate is other than the applicable
through such cooperative association, provided in § 1000.90), each handler minimum rate;
and which is not subject to the who receives fluid milk products at its (7) The amount, or rate per
California Quota Program pursuant to plant from a cooperative association in hundredweight, or rate per pound of
§ 1051.68, an amount equal to the its capacity as the operator of a pool component, and the nature of each
aggregate of the payments calculated plant or who receives milk from a deduction claimed by the handler; and
pursuant to paragraph (a) of this section cooperative association in its capacity as (8) The net amount of payment to the
for all producers certified to the market a handler pursuant to § 1051.9(c), producer, cooperative association, and
administrator by such cooperative including the milk of producers who are producer settlement fund with respect
association to receive such payments; not members of such association and to such producer.
and who the market administrator
determines have authorized the § 1051.74 [Reserved]
(2) To the California Department of
Food & Agriculture’s Milk Pooling cooperative association to collect § 1051.75 Plant location adjustments for
Branch, for each producer and payment for their milk, or from a producer milk and nonpool milk.
cooperative association for milk subject handler pursuant to § 1051.9(d) shall For purposes of making payments for
to the California Quota Program pay the cooperative or such handler for producer milk and nonpool milk, a
pursuant to § 1051.68, the aggregate of bulk fluid milk products and bulk fluid plant location adjustment shall be
the payments otherwise due such cream products received from a determined by subtracting the Class I
individual producers and cooperative cooperative association in its capacity as price specified in § 1051.51 from the
associations pursuant to paragraph (b) the operator of a pool plant and for milk Class I price at the plant’s location. The
and subparagraph (c)(1) of this section. received from a handler pursuant to difference, plus or minus as the case
(d) If, at such time, the balance in the § 1051.9(c) or (d) during the first 15 days may be, shall be used to adjust the
producer-settlement fund is insufficient of the month, at not less than the lowest payments required pursuant to
to make all payments pursuant to this announced class prices per §§ 1051.73 and 1051.76.
section, the market administrator shall hundredweight for the preceding
reduce uniformly such payments under month.; § 1051.76 Payments by a handler
this section and shall complete the (d) If a handler claims that a required operating a partially regulated distributing
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payment to a producer cannot be made plant.
payments as soon as the funds are
available. because the producer is deceased or On or before the 25th day after the
cannot be located, or because the end of the month (except as provided in
§ 1051.73 Partial payments to producers cooperative association or its lawful § 1000.90), the operator of a partially
and to cooperative associations. successor or assignee is no longer in regulated distributing plant, other than
(a) Each handler shall pay each existence, the payment shall be made to a plant that is subject to marketwide
producer for producer milk for which the producer-settlement fund, and in the pooling of producer returns under a
payment is not made to a cooperative event that the handler subsequently State government’s milk classification
association pursuant to paragraph (b) of locates and pays the producer or a and pricing program, shall pay to the
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pounds by the amount, if greater than products assigned to Class I use (e) Any handler may elect partially
zero, that remains after subtracting the pursuant to § 1051.43(d) and other regulated distributing plant status for
State program’s class prices applicable source milk allocated to Class I pursuant any plant located within the California
to such products at the plant’s location to § 1051.44(a)(3) and (8) and the marketing area with respect to receipts
from the Federal order Class I price corresponding steps of § 1051.44(b), of milk from farms located outside of
applicable at the location of the plant. except other source milk that is the California marketing area. Such
(d) Any handler may elect partially excluded from the computations plant shall with respect to such receipts
regulated distributing plant status for pursuant to § 1051.60 (h) and (i); and make an election as provided for in
any plant with respect to receipts of (d) Route disposition in the marketing § 1051.76 and shall meet the reporting
nonfluid milk ingredients that are area from a partially regulated and payment requirements in paragraph
reconstituted for fluid use. Payments distributing plant that exceeds the skim (a) or paragraph (b) of this section with
may be made to the producer-settlement milk and butterfat subtracted pursuant respect to such receipts.
fund of the order regulating the to § 1051.76(a)(1)(i) and (ii).
producer milk used to produce the Proposal No. 5
nonfluid milk ingredients at the positive § 1051.86 Deduction for marketing
services.
Proposed by Dairy Program,
difference between the Class I price Agricultural Marketing Service
applicable under the other order at the See § 1000.86.
Make such changes as may be
location of the plant where the nonfluid Subpart D—Miscellaneous Provisions necessary to ensure that all provisions
milk ingredients were processed and the
of any potential marketing agreement or
Class IV price. This payment option § 1051.90 Dates.
order that may result from this hearing
shall apply only if a majority of the total See § 1000.90. conform with each other.
milk received at the plant that processed
the nonfluid milk ingredients is Proposal Number 3 Copies of this notice of hearing may
regulated under one or more Federal be obtained online at http://
Submitted by the California Producer www.ams.usda.gov/dairy, or from the
orders and payment may only be made Handlers Association
to the producer-settlement fund of the Hearing Clerk, United States
■ 5. This proposal would preserve the Department of Agriculture, STOP
order pricing a plurality of the milk
entire ‘‘Quota’’ system that is currently 9200—Room 1031, 1400 Independence
used to produce the nonfluid milk
in place under the terms of the Avenue SW., Washington, DC 20250–
ingredients. This payment option shall
California Pooling Act, California state 9200.
not apply if the source of the nonfluid
marketing order and milk pooling plan Copies of the transcript of testimony
ingredients used in reconstituted fluid
administered by the California and exhibits taken at the hearing will be
milk products cannot be determined by
Department of Food and Agriculture made available for viewing at http://
the market administrator.
(CDFA). Specifically, should USDA www.ams.usda.gov/dairy after the
§ 1051.77 Adjustment of accounts. recommend a California Federal milk hearing adjourns. If you wish to
See § 1000.77. marketing order, this proposal argues purchase a copy, arrangements may be
that any provisions incorporated to made with the reporter at the hearing.
§ 1051.78 Charges on overdue accounts. ‘‘recognize quota’’ as outlined in the When a Notice of Hearing is issued,
See § 1000.78. 2014 Farm Bill, would include USDA employees gain knowledge that a
provisions that recognize, in the same hearing will be held. From this time and
Administrative Assessment and
manner that is done currently by CDFA, until the issuance of a Final Decision in
Marketing Service Deduction
the exempt quota held by current this proceeding, USDA employees
§ 1051.85 Assessment for order producer-distributors operating in the involved in the decisional process are
administration. State. Should USDA recommend prohibited from discussing the merits of
On or before the payment receipt date administering all aspects of the the hearing issues on an ex parte basis
specified under § 1051.71, each handler California quota program, CPHA also with any person having an interest in
shall pay to the market administrator its proposes to remove the degrees of the proceeding. The prohibition applies
pro rata share of the expense of family consanguinity as it pertains to to employees in the following
administration of the order at a rate the ownership of exempt quota to allow organizational units: Office of the
specified by the market administrator for the continuation of exempt quota Secretary of Agriculture; Office of the
that is no more than 8 cents per transfers within a family. Administrator, AMS; Office of the
hundredweight with respect to: Proposal Number 4 General Counsel; and the AMS Dairy
(a) Receipts of producer milk Program (Washington, DC office), and
(including the handler’s own Submitted by Ponderosa Dairy the offices of all Market Administrators.
production) other than such receipts by ■ 6. This proposal would add a new Procedural matters are not subject to the
a handler described in § 1051.9(c) or (d) paragraph (e) to § 1051.76 as described above prohibition and may be discussed
that were delivered to pool plants of under either Proposal 1 or Proposal 2 at any time.
other handlers; above, to read as follows: Dated: July 27, 2015.
(b) Receipts from a handler described
in § 1051.9(c) or (d); § 1051.76 Payments by a handler Rex A. Barnes,
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(c) Receipts of concentrated fluid milk operating a partially regulated distributing Associate Administrator.
products from unregulated supply plant. [FR Doc. 2015–18704 Filed 8–5–15; 8:45 am]
plants and receipts of nonfluid milk * * * * * BILLING CODE 3410–02–P
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Document Created: 2018-02-23 10:55:24
Document Modified: 2018-02-23 10:55:24
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of public hearing on proposed rulemaking. | |
| Dates | The hearing will convene at 9:00 a.m. on Tuesday, September 22, 2015. | |
| Contact | William Francis, Director, Order Formulation and Enforcement Division, USDA/AMS/Dairy Program, Stop 0231--Room 2969-S, 1400 Independence Avenue SW., Washington, DC 20250- | |
| FR Citation | 80 FR 47210 |
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