New York Codes, Rules and Regulations
Title 1 - DEPARTMENT OF AGRICULTURE AND MARKETS
Chapter I - Milk Control
Subchapter B - Milk Control Orders
Part 43 - Implementation Of Milk Producers Security Law
Section 43.5 - Application of producer security provisions

(a) A cooperative corporation or association of producers shall, with respect to milk purchased or received from nonmember producers for sale, processing or manufacture (except producer members of another cooperative under contract to such cooperative or other sales or transfers of milk from another cooperative) make required payments to the producers security fund and/or file a bond or other security in the amount required pursuant to section 258-b of the law. For the purpose of this subdivision, a cooperative shall be considered a milk dealer.

(b) A milk dealer who purchases milk of New York producers from a cooperative corporation or association of producers which is commingled with milk produced out-of-state shall make payments to the producers security fund and/or file a bond or other security covering the proportionate amount of New York-produced milk received by the dealer. A cooperative shall maintain a record of the quantity of New York-produced milk included in each delivery to a milk dealer, and shall provide the dealer with a monthly accounting of such quantity.

(c) A milk dealer who purchases milk in packaged form from a cooperative corporation or association of producers shall make payments to the producers security fund and/or file a bond or other security in the amount required pursuant to section 258-b of the law.

(d) A milk dealer shall be exempt from making payments to the producers security fund or filing a bond or other security with respect to milk received from a cooperative corporation or association of producers for processing and packaging on account for such cooperative pursuant to a written contract or agreement whereby the cooperative holds title to the milk at all times, pays the milk dealer for services rendered and takes physical possession of the milk when processed and packaged. In such case the cooperative shall be responsible for accounting for such milk under the producer security provisions of section 258-b of the law if received from nonmember producers, in accordance with subdivision (a) of this section.