Home/Federal/Federal Register/2023-15496

Proposed Rule2023-15496

Milk in the Northeast and Other Marketing Areas; Notice of Hearing on Proposed Amendments to Marketing Agreements and Orders

Primary source

Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.

Published

July 24, 2023

Issuing agencies

Agriculture DepartmentAgricultural Marketing Service

Abstract

A national public hearing is being held to consider and take evidence on proposals to amend the pricing formulas in the 11 Federal Milk Marketing Orders (FMMOs).

Full Text

<html>
<head>
<title>Federal Register, Volume 88 Issue 140 (Monday, July 24, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 140 (Monday, July 24, 2023)]
[Proposed Rules]
[Pages 47396-47399]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-15496]

========================================================================
Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

========================================================================

Federal Register / Vol. 88, No. 140 / Monday, July 24, 2023 /
Proposed Rules

[[Page 47396]]

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1000

[Doc. No. 23-J-0067; AMS-DA-23-0031]

Milk in the Northeast and Other Marketing Areas; Notice of
Hearing on Proposed Amendments to Marketing Agreements and Orders

AGENCY: Agricultural Marketing Service, Department of Agriculture
(USDA).

ACTION: Notice of public hearing on proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: A national public hearing is being held to consider and take
evidence on proposals to amend the pricing formulas in the 11 Federal
Milk Marketing Orders (FMMOs).

DATES: The hearing will convene at 9:00 a.m. ET on Wednesday, August
23, 2023.

ADDRESSES: The hearing will be held at the 502 East Event Centre, 502
East Carmel Drive, Carmel, Indiana 46032. Telephone (317) 843-1234.
Copies of this notice of hearing may be procured from the Market
Administrator of any of the 11 marketing areas, 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 notice of hearing and the corresponding hearing
record will be made available online on the Hearing website: <a href="https://www.ams.usda.gov/rules-regulations/moa/dairy/hearings/national-fmmo-pricing-hearing">https://www.ams.usda.gov/rules-regulations/moa/dairy/hearings/national-fmmo-pricing-hearing</a>.

FOR FURTHER INFORMATION CONTACT: Erin Taylor, Director, Order
Formulation and Enforcement Division, USDA/AMS/Dairy Programs, Stop
0225--Room 2530, 1400 Independence Avenue SW, Washington, DC 20250-
0225, (202) 720-7311, email: <a href="/cdn-cgi/l/email-protection#397c4b5057176d584055564b794c4a5d58175e564f">[email&#160;protected]</a>.
Persons requiring a sign language interpreter or other special
accommodations should contact <a href="/cdn-cgi/l/email-protection#541219191b1c3135263d3a3314212730357a333b22">[email&#160;protected]</a> a minimum of five
days before the start of the hearing.

SUPPLEMENTARY INFORMATION: This administrative action is governed by
the provisions of 5 U.S.C. 556 and 557 and, therefore, is excluded from
the requirements of Executive Order 12866.
Notice is hereby given of a public hearing to be held at the 502
East Event Centre, 502 East Carmel Drive, Carmel, Indiana, beginning
Wednesday, August 23, 2023, at 9:00 a.m. ET, with respect to proposed
amendments to the orders regulating the handling of milk in the
Northeast and other marketing areas.
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 amendments to marketing agreements and marketing orders (7
CFR part 900).
The purpose of the hearing is to receive evidence with respect to
the economic and marketing conditions related to the proposed
amendments, hereinafter set forth, and any appropriate modifications
thereof to the marketing orders.
Actions under the FMMO 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 $3.75 million
or less, and a dairy products manufacturer is a ``small business'' if
it has no more than the number of employees listed in the chart below
(13 CFR 121.201):

----------------------------------------------------------------------------------------------------------------
Size standards
NAICS code NAICS U.S. industry title in number of
employees
----------------------------------------------------------------------------------------------------------------
311511....................................... Fluid Milk Manufacturing....................... 1,000
311512....................................... Creamery Butter Manufacturing.................. 750
311513....................................... Cheese Manufacturing........................... 1,250
311514....................................... Dry, Condensed, and Evaporated Dairy Product 750
Manufacturing.
----------------------------------------------------------------------------------------------------------------

Most parties subject to a FMMO are considered a small business.
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 suggest modifications of these
proposals for the purpose of tailoring their applicability to small
businesses.
The amendments to the rules proposed herein have been reviewed
under Executive Order 12988, Civil Justice Reform. They are not
intended to have a retroactive effect.
The Agricultural Marketing Service (AMS) is committed to complying
with the E-Government Act to promote the use of the internet and other
information technologies, to provide increased opportunities for
citizen access to Government information and services, and for other
purposes.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under sec. 8c(15)(A) of the Act,
any handler subject to an order may request modification or exemption
from such order by filing with the U.S. 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, the USDA would rule on the
petition. The Act provides that the United States District Court in any
district in which the handler is an inhabitant or has its principal
place of business, has jurisdiction to review USDA's ruling on the
petition, provided an appeal is filed not later than 20 days after the
ruling is issued.

[[Page 47397]]

Testimony Guidelines

Each witness will have 60 minutes to present their testimony and
have direct examination. If a witness's prepared testimony and direct
examination would be expected to exceed 60 minutes, the witness should
submit in advance a written prepared statement as an exhibit and
present a summary of that statement during their allotted time. This
summary does not need to be submitted in advance, but paper copies
should be provided the day of submission in accordance with the exhibit
guidelines outlined below, if the summary is in written form. The full
written prepared statement should be submitted as an exhibit in advance
of testifying according to the Exhibit Submission Schedule found on the
Hearing website. There will be no time limit on cross-examination or
re-direct.
Dairy farmers may testify in person at any time during the hearing,
or virtually via Zoom on Fridays. Starting Friday, September 1, 2023,
and each Friday thereafter during the hearing, beginning at 12:00 p.m.
ET, ten (10) time slots will be available for dairy farmers to testify
virtually. Dairy farmers must pre-register to testify virtually, as
outlined in the instructions provided on the Hearing website. Each
registered dairy farmer will be allocated up to 15 minutes to present
testimony. Additional time may be requested. There will be no time
limit on cross-examination. Dairy farmers testifying, either in person
or virtually, are not required to pre-submit testimony or exhibits.

Exhibit Guidelines

Any party with a proposal noticed herein, when participating as a
witness, must enter exhibits related to testimony in advance, according
to an Exhibit Submission Schedule posted on the Hearing website.
Prepared exhibits must be submitted electronically to
<a href="/cdn-cgi/l/email-protection#f1b7bcbcbeb9949083989f96b184829590df969e87">[email&#160;protected]</a>. Submitted exhibits will be posted online within 2
business days following the submission deadline. Fifteen (15) paper
copies of each exhibit submitted in advance should also be submitted at
the hearing to the designated USDA official. Four of the 15 copies will
be submitted to the Administrative Law Judge for the Official Record,
and the remaining copies will be distributed to USDA staff.
Interested parties entering exhibits during the hearing, not in
advance, must provide 15 paper copies to the designated USDA official,
plus additional paper copies for distribution to other hearing
participants and interested parties. In order to submit exhibits into
the record, exhibits should be sent to <a href="/cdn-cgi/l/email-protection#06404b4b494e6367746f6861467375626728616970">[email&#160;protected]</a> by 8:00
a.m. ET on the day of scheduled testimony.
All exhibits should be prenumbered in the following format:
``[Submitter Name or Acronym]--Number'' on the top righthand corner of
each page. For example, ``USDA-1.'' Each exhibit must include a page
number ``X of Y'' on the bottom righthand corner. For example, ``1 of
100.'' Each exhibit will be given an Official Exhibit Number upon
presentation.
Individual dairy farmers are not subject to the Exhibit Guidelines.

Data Requests

Interested parties requesting USDA data to be used at the hearing
must submit requests via <a href="/cdn-cgi/l/email-protection#145259595b5c7175667d7a7354616770753a737b62">[email&#160;protected]</a> by August 11, 2023.

Hearing Schedule

The hearing will continue until such time as determined to have
ended by the presiding Administrative Law Judge. The hearing will be in
recess and will not convene on September 4, 2023, for the Labor Day
holiday or on September 21-22, 2023. If necessary, in addition to the
dates listed, 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 Hearing website.
Testimony is invited on the following proposals or appropriate
modifications to such proposals. Proposed regulatory text may be found
in a supplemental document on the Hearing website.
Testimony will be heard by subject area, in the following order:

1. Milk Composition
Proposal 1: Submitted by the National Milk Producers Federation
Proposal 2: Submitted by National All-Jersey Inc.
2. Surveyed Commodity Products
Proposal 3: Submitted by the National Milk Producers Federation
Proposal 4: Submitted by the American Farm Bureau Federation
Proposal 5: Submitted by the American Farm Bureau Federation
Proposal 6: Submitted by the California Dairy Campaign
3. Class III and Class IV Formula Factors
Proposal 7: Submitted by the National Milk Producers Federation
Proposal 8: Submitted by the Wisconsin Cheese Makers Association
Proposal 9: Submitted by the International Dairy Foods Association
Proposal 10: Submitted by Select Milk Producers, Inc.
Proposal 11: Submitted by Select Milk Producers, Inc.
Proposal 12: Submitted by Select Milk Producers, Inc.
4. Base Class I Skim Milk Price
Proposal 13: Submitted by the National Milk Producers Federation
Proposal 14: Submitted by the International Dairy Foods Association
Proposal 15: Submitted by the Milk Innovation Group
Proposal 16: Submitted by Edge Dairy Farmer Cooperative
Proposal 17: Submitted by Edge Dairy Farmer Cooperative
Proposal 18: Submitted by the American Farm Bureau Federation
5. Class I and Class II Differentials
Proposal 19: Submitted by the National Milk Producers Federation
Proposal 20: Submitted by the Milk Innovation Group
Proposal 21: Submitted by the American Farm Bureau
6. AMS Proposal
Proposal 22: Submitted by Dairy Programs, Agricultural Marketing
Service

Summary of Proposals

Milk Composition

Proposal 1: Submitted by the National Milk Producers Federation
This proposal seeks to amend the milk component factors in the
Class III and Class IV skim milk price formulas. Specifically, the
proposal seeks to increase the skim component factors to equal the
weighted average nonfat solids, true protein, and other solids factors
for milk pooled on Federal orders using data for the three years prior
to implementation, with a 12-month implementation lag. The factors are
proposed to be updated as follows:
<bullet> Nonfat solids: from 9.0 to 9.41 per hundredweight of Class
IV skim milk;
<bullet> Protein: from 3.1 to 3.39 per hundredweight of Class III
skim milk; and
<bullet> Other solids: from 5.9 to 6.02 per hundredweight of Class
III skim milk.
The proponent also proposes the skim component factors be updated
no less than every three years, but only once the weighted average
nonfat solids component for the prior three years changes by at least
0.07 percentage points. The updated component values would be
calculated, and, if a change is warranted, formally announced in
February of such year, with the implementation of such changes
occurring March 1 of the following year.
Proposal 2: Submitted by National All-Jersey Inc.
This proposal seeks to amend the milk component factors in the
Class III

[[Page 47398]]

and Class IV skim milk price formulas. The proposal seeks to update the
factors annually using the previous year's weighted average
calculations, with a 12-month implementation lag.

Surveyed Commodity Products

Proposal 3: Submitted by the National Milk Producers Federation
This proposal seeks to eliminate the Cheddar cheese 500-pound
barrel price series from protein price formula.
Proposal 4: Submitted by the American Farm Bureau Federation
This proposal seeks to add 640-pound Cheddar cheese blocks to the
protein price formula.
Proposal 5: Submitted by the American Farm Bureau Federation
This proposal seeks to add unsalted butter to the butterfat and
protein price formulas.
Proposal 6: Submitted by the California Dairy Campaign
This proposal seeks to add mozzarella to the protein price formula.

Class III and Class IV Formula Factors

Proposal 7: Submitted by the National Milk Producers Federation
This proposal seeks to amend the manufacturing cost (make)
allowances found in the four component price formulas. The proposal
includes the following increases:
Butterfat: from $0.1715 to $0.2100 per pound of butter,
Nonfat solids: from $0.1678 to $0.2100 per pound of nonfat dry milk
(NFDM),
Protein: from $0.2003 to $0.2400 per pound of Cheddar cheese,
Other solids: from $0.1991 to $0.2300 per pound of dry whey.
The requested changes are equivalent to an increase of $0.0385 per
pound in the butter make allowance, an increase of $0.0422 per pound in
the nonfat dry milk make allowance, an increase of $0.0397 per pound in
the Cheddar cheese make allowance, and an increase of $0.0309 per pound
in the dry whey make allowance.
Proposal 8: Submitted by the Wisconsin Cheese Makers Association
This proposal seeks to update the current make allowances with a 4-
year phase-in implementation schedule.

Proposed Make Allowance Levels
----------------------------------------------------------------------------------------------------------------
Product Current Year 1 Year 2 Year 3 Year 4
----------------------------------------------------------------------------------------------------------------
Cheese.......................... $0.2003 $0.2422 $0.2561 $0.2701 $0.2840
Whey............................ 0.1991 0.2582 0.2778 0.2976 0.3172
NFDM............................ 0.1678 0.2198 0.2370 0.2544 0.2716
Butter.......................... 0.1715 0.2251 0.2428 0.2607 0.2785
----------------------------------------------------------------------------------------------------------------

This proposal also proposes not to adopt any of the increases
described above if, prior to January 1 of that year, USDA has been
provided authority and funding to conduct audited dairy product cost
studies of all manufacturers of products used to set Class III and
Class IV prices, has promulgated regulations implementing that
authority, and has adopted make allowances pursuant thereto.
Proposal 10: Submitted by Select Milk Producers, Inc.
This proposal seeks to increase the butterfat recovery factor in
the Class III price formula to 93 percent, which would necessitate a
corresponding increase in the butterfat yield in cheese to 1.624.
Proposal 11: Submitted by Select Milk Producers, Inc.
This proposal seeks to update the specified yield factors to
reflect actual farm-to-plant shrink. The yield factors for nonfat
solids and other solids would remain unchanged. The proposed yield
factors are:
Butterfat: 1.22;
Protein value in cheese: 1.386; and
Butterfat value in cheese: 1.582.
Proposal 12: Submitted by Select Milk Producers, Inc.
This proposal seeks to update the nonfat solids factor from 0.99 to
1.03.

Base Class I Skim Milk Price

Proposal 13: Submitted by the National Milk Producers Federation
This proposal seeks to amend the base Class I skim milk price in
all Federal orders. Specifically, the proposal seeks to replace the
simple average of the Class III and Class IV Advanced Skim Milk pricing
factors with the ``higher of'' the two factors and remove the
additional $0.74 per hundredweight.
Proposal 14: Submitted by the International Dairy Foods Association
This proposal seeks to amend the base Class I skim milk price to
equal the simple average of the Advanced Class III and Class IV prices,
plus the ``higher of''

[[Page 47399]]

either $0.74 or an adjustor equal to the 24-month (August-July) rolling
simple average difference between the Advanced Class III and Class IV
skim milk prices.
Proposal 15: Submitted by the Milk Innovation Group
This proposal seeks to retain the current ``average of'' formula
for the base Class I skim milk price and proposes to update the
adjuster monthly using a 24-month look back period with a 12-month lag,
i.e., the preceding the 13-to-36-month period. The ``rolling'' adjuster
calculation would be the difference between the ``higher of'' the
advanced Class III or IV skim milk price for each month and the
``average of'' the advanced Class III or IV skim milk price, averaged
over the preceding 13-to-36-month period, plus the ``average of'' the
Class III and IV advanced skim milk prices for that month.
Proposal 16: Submitted by Edge Dairy Farmer Cooperative
This proposal seeks to change the base Class I skim milk price to
the announced Class III skim milk price, plus an adjuster. The proposal
seeks to amend calculation of Class I prices to use announced rather
than advanced prices. The proposed adjuster would be a 36-month average
(August-July) of the monthly differences between the ``higher of'' the
advanced Class III skim milk price or advanced Class IV skim milk
price, and the Class III skim milk price.
Proposal 17: Submitted by Edge Dairy Farmer Cooperative
This proposal seeks to use the ``higher of'' the Class III skim
milk price or the Class IV skim milk price to calculate the base Class
I skim milk price. The proposal also seeks to amend calculation of
Class I prices to use announced rather than advanced prices.
Proposal 18: Submitted by the American Farm Bureau Federation
This proposal seeks to eliminate the advanced pricing of Class I
milk and components, and Class II skim milk and components. As
proposed, the Class II skim milk price would be equal to the Announced
Class IV skim milk price plus the Class II differential; the Class II
nonfat solids price would be equal to the Announced Class IV nonfat
solids price plus one-hundredth of the Class II differential. The
proponent proposes the Class I skim milk price would be the ``higher
of'' the Announced Class III or Class IV skim milk prices plus the
Class I differential; and the Class I butterfat price would be equal to
the butterfat price plus one-hundredth of the Class I differential.

Class I and Class II Differentials

Proposal 19: Submitted by the National Milk Producers Federation
This proposal seeks to update the Adjusted Class I differentials as
referenced in all Federal orders for the 3,108 named counties,
parishes, and independent cities in the contiguous 48 United States.
The proposed update would increase Class I differentials at all
locations, in varying amounts.
Proposal 20: Submitted by the Milk Innovation Group
This proposal seeks to lower the current base Class I differential
from $1.60 to $0.00.
Proposal 21: Submitted by the American Farm Bureau Federation
This proposal seeks to update the Class II differential to $1.56.
Specifically, the proposal seeks to calculate the Class II differential
using the current nonfat dry milk make allowance multiplied by the
current nonfat solids yield factor and updated butterfat and nonfat
solids tests for milk in the FMMOs.
Proposal 22: Submitted by Dairy Program, Agricultural Marketing
Service:
Make such changes as may be necessary to make the respective
marketing orders conform with any amendments thereto that may result
from this hearing.
From the time that a hearing notice is issued and until the
issuance of a final decision in a proceeding, USDA employees involved
in the decision-making 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. For this proceeding, the
prohibition applies to employees in the following organizational units:

Office of the Secretary of Agriculture
Office of the Administrator, Agricultural Marketing Service
Office of the General Counsel
Dairy Program, Agricultural Marketing Service (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.

List of Subjects in 7 CFR Part 1000

Milk marketing orders.

Erin Morris,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2023-15496 Filed 7-21-23; 8:45 am]
BILLING CODE 3410-02-P

</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>

View on FederalRegister.gov →Plain-text source

Indexed from Federal Register on July 24, 2023.

This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.