Milk in California; Notice of Hearing on a Proposal To Establish a Federal Milk Marketing Order, 47209-47235 [2015-18704]
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Vol. 80
Thursday,
No. 151
August 6, 2015
Part IV
Department of Agriculture
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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
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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
Agricultural Marketing Service,
USDA.
ACTION: Notice of public hearing on
proposed rulemaking.
AGENCY:
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: william.francis@
ams.usda.gov.
Persons requiring a sign language
interpreter or other special
accommodations should contact Diane
Hirsch, AMS Dairy Program, at (425)
487–5601, email: dhirsch@
fmmaseattle.com, before the hearing
begins.
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SUMMARY:
This
administrative action is governed by the
provisions of Sections 556 and 557 of
Title 5 of the United States Code and,
SUPPLEMENTARY INFORMATION:
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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.
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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
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AMS-Dairy Programs Web site at https://
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.
1. The authority citation for 7 CFR
part 1051 reads as follows:
■
Subpart B—Milk Pricing
Definitions
Classification of Milk
§ 1051.2
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.
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.
Class Prices
Authority: 7 U.S.C. 601–674, and 7253.
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.
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.
3. This proposal seeks to add a new
part 1051 to read as follows:
1051.55 Transportation credits.
1051.56 Mileage rate for transportation
credits.
PART 1051—MILK IN THE CALIFORNIA
MARKETING AREA
Producer Prices
Sec.
Subpart A—Order Regulating Handling
General Provisions
1051.1 General Provisions.
1051.70 Producer-settlement fund.
1051.71 Payments to the producersettlement fund.
1051.72 Payments from the producersettlement 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
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Administrative Provisions
1051.26 Continuity and separability of
provisions.
Reports
1051.30 Reports of receipts and utilization.
1051.31 Producer delivery and payroll
reports.
1051.32 Other reports.
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Dates.
Authority: 7 U.S.C. 601—674
Handlers
1051.27 Handler responsibility for records
and facilities.
1051.28 Termination of obligations.
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1051.60 Handler’s value of milk.
1051.61 Computation of producer
component prices and producer price
differential.
1051.62 Announcement of producer prices.
Producer Payments
Market Administrator
1051.25 Market administrator.
Subpart A—Order Regulating Handling
General Provisions
§ 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.
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Route disposition.
See § 1000.3.
§ 1051.4
§ 1051.5
Plant.
Distributing plant.
See § 1000.5.
§ 1051.6
Subpart C—Payments for Milk
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.
§ 1051.3
California marketing area.
See § 1000.4.
Marketwide Service Payments
■
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Supply plant.
See § 1000.6.
§ 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
§ lll .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 ultrapasteurized 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
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located in the marketing area pursuant
to § 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
§ 1051.9(c).
(d) A supply plant located outside the
marketing area (except a plant described
in § 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 § 1000.9(c), including milk
diverted pursuant to § 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 § 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
§ 1000.8(e);
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(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.
§ 1051.8
Nonpool plant.
See § 1000.8.
§ 1051.9
§ 1051.11
§ 1051.12
Producer-handler.
Producer-handler means a person
who:
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[Reserved]
Producer.
Handler.
See § 1000.9.
§ 1051.10
(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 producerhandler’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 § 1131.2 of
this chapter shall be subject to payments
into the Order 1131 producer settlement
fund on such dispositions pursuant to
§ 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 § 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 § 1131.7 of this chapter or
§ 1000.76(a).
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(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
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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
§ 1051.13; or
(2) Received by a handler described in
§ 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 § 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.
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§ 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 § 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
§ 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 § 1000.9(c) to a nonpool
plant subject to the following
conditions:
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(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 § 1000.9(c) may
not exceed 50 percent of the producer
milk receipts reported by the handler
pursuant to § 1051.30(c), provided that
not less than 50 percent of such receipts
are delivered to plants described in
§ 1051.7(a) or (b). These percentages are
subject to any adjustments that may be
made pursuant to § 1051.7(e); and
(3) The quantity of milk diverted to
nonpool plants by the operator of a pool
plant described in § 1051.7(a) or (b) may
not exceed 50 percent of the Grade A
milk received from dairy farmers
(except dairy farmers described in
§ 1051.12(b)), including milk diverted
pursuant to § 1051.13; and further, such
milk is subject to the pooling
requirements of § 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
§ 1051.30(a)(1) or § 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 § 1000.44(a)(3)(v) and
§ 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:
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(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
§ 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.
§ 1051.14
Other source milk.
See § 1000.14.
§ 1051.15
Fluid milk product.
See § 1000.15.
§ 1051.16
Fluid cream product.
See § 1000.16.
§ 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.
§ 1051.18
Cooperative association.
See § 1000.18.
§ 1051.19 Commercial food processing
establishment.
See § 1000.19.
Market Administrator
§ 1051.25
Market administrator.
See § 1000.25.
Administrative Provisions
§ 1051.26 Continuity and separability of
provisions.
See § 1000.26.
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Handlers
§ 1051.27 Handler responsibility for
records and facilities.
See § 1000.27.
§ 1051.28
Termination of obligations.
See § 1000.28.
Reports
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§ 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 § 1000.9(c)
[qualified cooperative associations]; and
(ii) Receipts of milk from handlers
described in § 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
§ 1000.9(c) shall report:
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(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.
§ 1051.41
§ 1051.31
reports.
§ 1051.50 Class prices, component prices,
and advanced pricing factors.
Producer delivery and payroll
(a) On or before the 6th day after the
end of each month, each handler that
operates a pool plant pursuant to
§ 1051.7 and each handler described in
§ 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 § 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
§ 1051.7 and each handler described in
§ 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 § 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
§ 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.
§ 1051.32
Other reports.
In addition to the reports required
pursuant to §§ 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
§ 1051.40
Classes of utilization.
See § 1000.40.
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[Reserved]
§ 1051.42 Classification of transfers and
diversions.
See § 1000.42.
§ 1051.43
General classification rules.
See § 1000.43.
§ 1051.44
Classification of producer milk.
See § 1000.44.
§ 1051.45 Market administrator’s reports
and announcements concerning
classification.
See § 1000.45.
Class Prices
See § 1000.50.
§ 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
§ 1000.52. The Class I price shall be the
price computed pursuant to § 1000.50(a)
for Los Angeles County, California.
§ 1051.52
Adjusted Class I differentials.
See § 1000.52.
§ 1051.53 Announcement of class prices,
component prices, and advanced pricing
factors.
See § 1000.53.
§ 1051.54
Equivalent price.
See § 1000.54.
Marketwide Service Payments
§ 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 § 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 § 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 § 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
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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 § 1051.55(b)(1) by the rate for the
month computed pursuant to
§ 1051.56(a)(6) for each Transportation
Zone.
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§ 1051.56
credits.
Mileage rate for transportation
(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;
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(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 § 1051.55(c)(1)(i)
times the sum of $0.00318 plus the
amount determined in § 1051.56(a)(5);
(ii) For Transportation Zone 2 the sum
of $0.00485 plus the product of the
miles determined in § 1051.55(c)(1)(i)
times the sum of $0.00546 plus the
amount determined in § 1051.56(a)(5);
(iii) For Transportation Zone 3 the
sum of $0.05441 plus the product of the
miles determined in § 1051.55(c)(1)(i)
times the sum of $0.00571 plus the
amount determined in § 1051.56(a)(5);
(b) The market administrator shall
announce publicly on or before the 23rd
day of the month (except as provided in
§ 1000.90 of this chapter) the fuel
adjustor rate pursuant to paragraph (a)
of this section for the following month.
Producer Prices
§ 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 § 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
§ 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 § 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
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47215
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 § 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 § 1051.53. In no case shall
the deduction be less than zero cents
($0.00) nor more than nine and eightyseven 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 § 1000.44(a)(11) and
the corresponding step of § 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
§ 1000.44(a)(7) and the corresponding
step of § 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 § 1000.43(d) and the
hundredweight of skim milk and
butterfat subtracted from Class I
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pursuant to § 1000.44(a)(3)(i) through
(vi) and the corresponding step of
§ 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 § 1000.43(d) and
§ 1000.44(a)(3)(i) and the corresponding
step of § 1000.44(b) and the pounds of
skim milk and butterfat subtracted from
Class I pursuant to § 1000.44(a)(8) and
the corresponding step of § 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
§ 1000.43(d).
(j) Compute the amount of credits
applicable pursuant to § 1051.55.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
§ 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
§ 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:
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(a) Combine into one total the values
computed pursuant to § 1051.60 for all
handlers required to file reports
prescribed § 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 § 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
§ 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 § 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 § 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
§ 1051.60, and rounded to the fourth
decimal place.
(3) The producer protein price shall
be the result of adding the price
computed in § 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
§ 1051.60, and rounded to the fourth
decimal place.
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(4) The producer other solids price
shall be the result of adding the price
computed in § 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
§ 1051.60, and rounded to the fourth
decimal place.
§ 1051.62
prices.
Announcement of producer
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
§ 1051.70
Producer-settlement fund.
See § 1000.70.
§ 1051.71 Payments to the producersettlement 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
§ 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 § 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 § 1051.60(i) by
the producer price differential as
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adjusted pursuant to § 1051.75 for the
location of the plant from which
received.
§ 1051.72 Payments from the producersettlement fund.
No later than the 14th day after the
end of each month (except as provided
in § 1000.90), the market administrator
shall pay to each handler the amount, if
any, by which the amount computed
pursuant to § 1051.71(b) exceeds the
amount computed pursuant to
§ 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.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
§ 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 § 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 § 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;
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(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 § 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
§ 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 § 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 § 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 § 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 § 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 § 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
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47217
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 § 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 § 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
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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 § 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.
§ 1051.74
[Reserved]
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For purposes of making payments for
nonpool milk, a plant location
adjustment shall be determined by
subtracting the Class I price specified in
§ 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 § 1000.76.
§ 1051.76 Payments by a handler
operating a partially regulated distributing
plant.
See § 1000.76.
Adjustment of accounts.
See § 1000.77.
§ 1051.78
Charges on overdue accounts.
See § 1000.78.
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§ 1051.85 Assessment for order
administration.
On or before the payment receipt date
specified under § 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 § 1000.9(c) that
were delivered to pool plants of other
handlers;
(b) Receipts from a handler described
in § 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 § 1000.43(d) and other
source milk allocated to Class I pursuant
to § 1000.44(a)(3) and (8) and the
corresponding steps of § 1000.44(b),
except other source milk that is
excluded from the computations
pursuant to § 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 § 1000.76(a)(1)(i) and (ii).
§ 1051.86
services.
Deduction for marketing
See § 1000.86.
Subpart D—Miscellaneous Provisions
§ 1051.90
Dates
See § 1000.90.
Proposal Number 2
§ 1051.75 Plant location adjustments for
nonpool milk.
§ 1051.77
Administrative Assessment and
Marketing Service Deduction
Jkt 235001
Submitted by the Dairy Institute of
California.
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.
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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 producersettlement fund.
1051.72 Payments from the producersettlement 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.
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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
§ 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
§ 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.
§ 1051.3
Route Distribution
See § 1000.3.
§ 1051.4
Plant
See § 1000.4.
§ 1051.5
Distributing plant.
See § 1000.5.
§ 1051.6
Supply plant.
See § 1000.6.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
§ 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 § __
_.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
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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 ultrapasteurized 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 § 1051.12(b)) and handlers
described in § 1051.9(c) or (d), including
milk diverted pursuant to § 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
§ 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 agreedupon 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
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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
§§ 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
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volume (including milk diverted
pursuant to § 1051.13), to plants
described in § 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 § 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)
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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 § 1051.9(c) or
§ 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 § 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
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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
§ 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
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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.
§ 1051.8
Nonpool plant.
See § 1000.8.
mstockstill on DSK4VPTVN1PROD with PROPOSALS2
§ 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
§§ 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 § 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
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delivered during the month for the
account of such person to the pool plant
of another handler or diverted pursuant
to § 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.
§ 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 producerhandler 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.
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(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 producerhandler.
(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 producerhandler’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 producerhandler’s milk production resources and
facilities.
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(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 producerhandler, 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 producerhandler 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 producerhandler status or loss of producer-
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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 § 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 § 1131.2 of
this chapter shall be subject to payments
into the Order 1131 producer settlement
fund on such dispositions pursuant to
§ 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 § 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 § 1131.7 of this chapter or
§ 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 § 1051.10(a)
through (e), regardless of whether or not
the handler owns producer quota
pursuant to § 1051.11.
§ 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
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§ 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.
§ 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
§ 1051.13; or
(2) Received by a handler described in
§ 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 § 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.
§ 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:
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(a) Received by the operator of a pool
plant directly from a producer or a
handler described in § 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
§ 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 § 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 § 1051.9(c) and
(d) may not exceed a percentage equal
to 100 percent minus the supply plant
shipping percentage specified in
§ 1051.7(c) (or as adjusted pursuant to
§ 1051.7(c)(2)) of the producer milk
receipts reported by the handler
pursuant to § 1051.30(c), provided that
not less than 10 percent of such receipts
are delivered to plants described in
§ 1051.7(c)(1)(i) through (iii). These
percentages are subject to any
adjustments that may be made pursuant
to § 1051.7(c)(2)(i) through (viii) or any
additional adjustments made pursuant
to § 1051.7 (f); and
(3) The quantity of milk diverted to
nonpool plants by the operator of a pool
plant described in § 1051.7(a) or (b) may
not exceed a percentage equal to 100
percent minus the supply plant
shipping percentage specified in
§ 1051.7(c) (or as adjusted pursuant to
§ 1051.7 (c)(2)) of the Grade A milk
received from dairy farmers (except
dairy farmers described in § 1051.12(b))
including milk diverted pursuant to
§ 1051.13; and
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(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
§ 1051.30(a)(1) or § 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 § 1051.44(a)(3)(v) and
§ 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 §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
§ 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.
§ 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 § 1051.9(c) and (d), or pool
plants;
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(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.
§ 1051.15
Fluid milk products.
See § 1000.15.
§ 1051.16
Fluid cream product.
See § 1000.16.
§ 1051.17
[Reserved]
§ 1051.18
Cooperative association.
See § 1000.18.
§ 1051.19 Commercial food processing
establishment.
See § 1000.19.
Market Administrator, Continuing
Obligations, and Handler
Responsibilities
§ 1051.25
Market administrator.
See § 1000.25.
§ 1051.26 Continuity and separability of
provisions.
See § 1000.26.
§ 1051.27 Handler responsibility for
records and facilities.
See § 1000.27.
§ 1051.28
Termination of obligations.
See § 1000.28.
Handler Reports
§ 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 § 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 § 1051.9(c)
or (d); and
(ii) Receipts of milk from handlers
described in § 1051.9(c) or (d);
(2) Product pounds and pounds of
butterfat contained in:
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(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
§ 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 § 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.
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§ 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
§ 1051.7 and each handler described in
§ 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 § 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
§ 1051.7 and each handler described in
§ 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 § 1051.73(e).
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(c) Each handler operating a partially
regulated distributing plant who elects
to make payment pursuant to
§ 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.
§ 1051.32
Other reports.
In addition to the reports required
pursuant to §§ 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
§ 1051.40
Classes of utilization.
Except as provided in § 1051.42, all
skim milk and butterfat required to be
reported pursuant to § 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
§ 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;
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(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 § 1000.15(a) but contain no
fluid milk products included in
§ 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
§ 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
§ 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
§ 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,
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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.
§ 1051.41
[Reserved]
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§ 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
§ 1051.44(a)(9) and the corresponding
step of § 1051.44(b);
(2) If the transferring plant received
during the month other source milk to
be allocated pursuant to § 1051.44(a)(3)
or the corresponding step of
§ 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 § 1051.44(a)(8)
or (9) or the corresponding steps of
§ 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
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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
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(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
§ 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
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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
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(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.
§ 1051.43
General classification rules.
In determining the classification of
producer milk pursuant to § 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 § 1051.30
and shall compute separately for each
pool plant, for each handler described
in § 1051.9(c) or (d), the pounds of skim
milk and butter fat, respectively, in each
class in accordance with §§ 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 § 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 § 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 § 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 § 1051.7(b)—
two percent plus any additional
percentage calculated pursuant to
§ 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 § 1051.7(b)—
1.5 percent plus any additional
percentage calculated pursuant to
§ 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 § 1051.7(b)—
0.5 percent plus any additional
percentage calculated pursuant to
§ 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,
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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 § 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 § 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 under§ 1051.44. Any
remaining skim milk and butterfat in
concentrated receipts shall be assigned
to uses under § 1051.44 on a pro rata
basis, unless a specific use of such
receipts is established by the handler.
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§ 1051.44
Classification of producer milk.
For each month the market
administrator shall determine for each
handler described in § 1051.9(a) for each
pool plant of the handler separately and
for each handler described in § 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
§ 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 § 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);
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(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.
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(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
§ 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 § 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.
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§ 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 § 1051.44(a)(9) and the
corresponding step of § 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 §§ 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
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§ 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
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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 § 1051.52, plus the
adjustments to Class I prices specified
in §§ 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
§ 1051.52 divided by 100, plus the
adjustments to Class I prices specified
in §§ 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.
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(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 onehundredth 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
§ 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
§ 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
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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 § 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 § 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
§ 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 § 1051.50(o)
shall be 19.97 cents.
(p) Protein price. The protein price
per pound, rounded to the nearest onehundredth cent, shall be computed as
follows:
(1) Compute the Western Dairy
Product Price for Cheddar Cheese as the
weighted average of the weekly 40pound block cheddar cheese prices
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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 40pound cheddar cheese blocks cannot be
reported, then the price used in the
calculations set forth in § 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
§ 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
§ 1051.50(p)(2) and § 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
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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
§ 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
§ 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 § 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
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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 onehundredth 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.
§ 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
§ 1051.52. The Class I price shall be the
price computed pursuant to § 1051.51(a)
for Los Angeles County, California.
§ 1051.52
Adjusted Class I differentials.
See § 1000.52.
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§ 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;
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(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 § 1051.50(s).
§ 1051.54
Equivalent price.
If for any reason a price or pricing
constituent required for computing the
prices described in § 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.
§ 1051.55 Transportation credits and
transportation allowances.
(a) Each handler operating a pool
distributing plant described in
§ 1051.7(a) or (b) or a pool distributing
plant that is part of a unit described in
§ 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
§ 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
§ 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
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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 § 1051.55 (a)(2) by the
number of hundredweights of eligible
milk as specified in § 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 § 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 § 1051.9(c) or § 1051.9(d)
that delivers producer milk to an
eligible pool plant as described in
§ 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 § 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
§ 1051.9(c) or § 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,
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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
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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
§ 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 § 1051.9(c)
and § 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
§ 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 § 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
§ 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 § 1051.40(d)(3) a
fortification allowance to be computed
as follows:
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(i) Subtract the current Class IV nonfat
solids price from the current Class I
nonfat solids price
(ii) Subtract the value calculated in
§ 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 § 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
§ 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
§ 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 § 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 § 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 § 1051.44(c);
(f) Multiply the pounds of skim milk
and butterfat overage assigned to each
class pursuant to § 1051.44(a)(11) and
the corresponding step of § 1051.44(b)
by the skim milk prices and butterfat
prices applicable to each class.
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(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
§ 1051.44(a)(7) and the corresponding
step of § 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 § 1051.43(d) and the
hundredweight of skim milk and
butterfat subtracted from Class I
pursuant to § 1051.44(a)(3)(i) through
(vi) and the corresponding step of
§ 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 § 1051.43(d) and
§ 1051.44(a)(3)(i) and the corresponding
step of § 1051.44(b) and the pounds of
skim milk and butterfat subtracted from
Class I pursuant to § 1051.44(a)(8) and
the corresponding step of § 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
§ 1051.43(d).
(k) Subtract the value of the handler’s
transportation allowances calculated
pursuant to § 1051.55(a)(i) and (a)(ii).
§ 1051.61 Computation of producer price
differential.
For each month the market
administrator shall compute a producer
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price differential per hundredweight.
The report of any handler who has not
made payments required pursuant to
§ 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 § 1051.60 for all
handlers required to file reports
prescribed in § 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 § 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 § 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
§ 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
§ 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.
§ 1051.62
prices.
Announcement of producer
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,
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computed by combining the Class III
price and the producer price
differential.
§ 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 § 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
§ 1051.62(h).
Subpart C—Payments for Milk
Producer Payments
§ 1051.70
Producer-settlement fund.
See § 1000.70.
§ 1051.71 Payments to the producersettlement 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
§ 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 § 1051.60.
(b) The aggregate amount paid to
producers and cooperative associations
pursuant to § 1051.73.
§ 1051.72 Payments from the producersettlement 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 § 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 § 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;
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(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 § 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 § 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 § 1051.68, the
amount calculated for such producer
pursuant to paragraph (a) of this section
subject to the provisions of § 1051.86.
(c) On or before the 16th day after the
end of each month, the market
administrator, subject to the provisions
of § 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
§ 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 § 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.
§ 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
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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 § 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 § 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 § 1051.9(c), or from handlers
pursuant to § 1051.9(d). On or before the
day prior to the date specified in
paragraph (a) of this section (except as
provided in § 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 § 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 § 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
§ 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
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47233
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 § 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.
§ 1051.74
[Reserved]
§ 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 § 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
§§ 1051.73 and 1051.76.
§ 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
§ 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
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market administrator for the producersettlement fund the amount computed
pursuant to paragraph (a) of this section
or, if the handler submits the
information specified in §§ 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 § 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
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(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
§ 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 § 1051.9(c) or
§ 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 § 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 § 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
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partially regulated distributing plant by
making shipments to the partially
regulated distributing plant during the
month equivalent to the requirements of
§ 1051.7(c) subject to the following
conditions:
(A) The operator of the partially
regulated distributing plant submits
with its reports filed pursuant to
§§ 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 § 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 producersettlement 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
§ 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
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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.
§ 1051.77
Adjustment of accounts.
See § 1000.77.
§ 1051.78
Charges on overdue accounts.
See § 1000.78.
Administrative Assessment and
Marketing Service Deduction
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§ 1051.85 Assessment for order
administration.
On or before the payment receipt date
specified under § 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 § 1051.9(c) or (d)
that were delivered to pool plants of
other handlers;
(b) Receipts from a handler described
in § 1051.9(c) or (d);
(c) Receipts of concentrated fluid milk
products from unregulated supply
plants and receipts of nonfluid milk
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47235
products assigned to Class I use
pursuant to § 1051.43(d) and other
source milk allocated to Class I pursuant
to § 1051.44(a)(3) and (8) and the
corresponding steps of § 1051.44(b),
except other source milk that is
excluded from the computations
pursuant to § 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 § 1051.76(a)(1)(i) and (ii).
(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
§ 1051.76 and shall meet the reporting
and payment requirements in paragraph
(a) or paragraph (b) of this section with
respect to such receipts.
§ 1051.86
services.
Proposed by Dairy Program,
Agricultural Marketing Service
Deduction for marketing
See § 1000.86.
Subpart D—Miscellaneous Provisions
§ 1051.90
Dates.
See § 1000.90.
Proposal Number 3
Submitted by the California Producer
Handlers Association
■ 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
■ 6. This proposal would add a new
paragraph (e) to § 1051.76 as described
under either Proposal 1 or Proposal 2
above, to read as follows:
§ 1051.76 Payments by a handler
operating a partially regulated distributing
plant.
*
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*
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*
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*
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Proposal No. 5
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 https://
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 https://
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
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Agencies
[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)]
[Proposed Rules]
[Pages 47209-47235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18704]
[[Page 47209]]
Vol. 80
Thursday,
No. 151
August 6, 2015
Part IV
Department of Agriculture
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Agricultural Marketing Service
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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]]
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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.
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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: william.francis@ams.usda.gov.
Persons requiring a sign language interpreter or other special
accommodations should contact Diane Hirsch, AMS Dairy Program, at (425)
487-5601, email: dhirsch@fmmaseattle.com, 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 https://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 https://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 https://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