Rule2025-06939
Reauthorization of Dairy Forward Pricing Program
Primary source
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Published
April 23, 2025
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This final rule reauthorizes the Dairy Forward Pricing Program (DFPP) in accordance with the American Relief Act, 2025 (Relief Act). Establishing new contracts under the DFPP was prohibited between the expiration of the program on September 30, 2024, and publication of this final rule. The Relief Act reauthorizes the DFPP program to allow handlers to enter into new contracts until September 30, 2025. Any forward contract entered prior to the September 30, 2025, deadline is subject to a September 30, 2028, expiration date.
Full Text
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<title>Federal Register, Volume 90 Issue 77 (Wednesday, April 23, 2025)</title>
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[Federal Register Volume 90, Number 77 (Wednesday, April 23, 2025)]
[Rules and Regulations]
[Pages 16997-16999]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-06939]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 90, No. 77 / Wednesday, April 23, 2025 /
Rules and Regulations
[[Page 16997]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1145
[Doc. No. AMS-DA-25-0001]
RIN 0581-AE37
Reauthorization of Dairy Forward Pricing Program
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule reauthorizes the Dairy Forward Pricing Program
(DFPP) in accordance with the American Relief Act, 2025 (Relief Act).
Establishing new contracts under the DFPP was prohibited between the
expiration of the program on September 30, 2024, and publication of
this final rule. The Relief Act reauthorizes the DFPP program to allow
handlers to enter into new contracts until September 30, 2025. Any
forward contract entered prior to the September 30, 2025, deadline is
subject to a September 30, 2028, expiration date.
DATES: April 24, 2025
FOR FURTHER INFORMATION CONTACT: Erin Taylor, USDA/AMS/Dairy Programs,
Order Formulation and Enforcement Division, STOP 0231-Room 2530, 1400
Independence Avenue SW, Washington, DC 20250-0231, (202) 720-4392;
Telephone: (202) 720-7183; Email: <a href="/cdn-cgi/l/email-protection#e9ac9b8087c7bd889085869ba99c9a8d88c78e869f"><span class="__cf_email__" data-cfemail="ce8bbca7a0e09aafb7a2a1bc8ebbbdaaafe0a9a1b8">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: The Food, Conservation, and Energy Act of
2008 (2008 Farm Bill) \1\ initially established the DFPP.\2\ The DFPP
allows milk handlers, under the Agricultural Marketing Agreement Act of
1937, (AMAA) \3\ to pay producers or cooperative associations of
producers a negotiated price for producer milk, rather than the Federal
order minimum blend price for non-fluid classes of milk (Classes II,
III, and IV under the FMMO system). The DFPP does not allow for forward
contracting Class I, or fluid, milk.
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\1\ Public Law 110-234.
\2\ 73 FR 64868.
\3\ 7 U.S.C. 601-614.
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Following the initial expiration of the DFPP which prevented the
establishment of new contracts after September 30, 2012, the ``American
Taxpayer Relief Act of 2012,'' (ATRA) \4\ revised the program to allow
handlers to enter into new contracts until September 30, 2013. The
``Agricultural Act of 2014'' (2014 Farm Bill) \5\ then extended the
program to allow new contracts until September 30, 2018. The
Agriculture Improvement Act of 2018 (2018 Farm Bill) \6\ reauthorized
the program to allow handlers to enter into new contracts until
September 30, 2023. The Further Continuing Appropriations and Other
Extensions Act of 2024 reauthorized the program to allow handlers to
enter into new contracts until September 30, 2024.\7\ The Relief Act
\8\ extends the program to allow handlers to enter into new contracts
until September 30, 2025, subject to a September 30, 2028, expiration
date.
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\4\ Public Law 112-240.
\5\ Public Law 113-79.
\6\ Public Law 115-334.
\7\ Public Law 118-22.
\8\ Public Law 118-158.
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Participation in the DFPP is voluntary for dairy farmers, dairy
farmer cooperatives, and handlers. Handlers may not require producer
participation in a forward pricing program as a condition for accepting
milk. USDA, including Market Administrator personnel, does not
determine the terms of forward contracts or enforce negotiated prices.
This regulation also does not affect contractual arrangements between a
cooperative association and its members.
Under the DFPP, regulated handlers must still account to the FMMO
pool for the classified use value of their milk. Regulated handlers
claiming exemption from the Federal order minimum pricing provisions
must submit to the Market Administrator a copy of each forward
contract. The contract must contain a disclosure statement--either as
part of the contract itself or as a supplement--to ensure producers
understand the nature of the program as well as the basis on which they
will be paid for their milk. Contracts that do not contain a disclosure
statement are deemed invalid and returned to the handler. Signed
contracts must be received by the Market Administrator before the first
of a month in order to be effective for the month. For example,
contracts must be received by the Market Administrator by December 31,
2024, to be effective for the month of January 2025.
Handlers with forward contracts remain subject to all other milk
marketing order provisions. Payments specified under a forward contract
must be made on or before the same date as the federal order payments
they replace. Required payment dates are specified in 7 CFR 1145.2(e).
This final rule reauthorizes producers and cooperative associations
of producers to enter into forward price contracts under the DFPP
through September 30, 2025. All terms of the new forward contracts must
expire prior to September 30, 2028. All other provisions and
requirements of the program as provided for in the final rule \9\
published October 31, 2008, are still in effect.
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\9\ 73 FR 64868.
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Executive Orders 12866 and 13563
USDA is issuing this rule in conformance with Executive Order
(E.O.) 12866, Regulatory Planning and Review, as amended by E.O. 12415
of February 18, 2025, Ensuring Accountability for All Agencies, and
E.O. 13563, Improving Regulation and Regulatory Review. Executive Order
12866, as amended by E.O. 12415, and E.O. 13563 direct agencies to
assess all costs and benefits of available regulatory alternatives and,
if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health, and safety effects; distributive impacts; and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, reducing costs, harmonizing rules, and promoting
flexibility. This rule has been determined to be not significant for
purposes of Executive Order 12866, as amended by E.O. 12415, and,
therefore, has not been reviewed by the Office of Management and Budget
(OMB).
[[Page 16998]]
Executive Order 12988
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. This does not have retroactive effect. This rule will
not preempt any State or local laws, regulations, or policies unless
they present an irreconcilable conflict with this rule.
Executive Order 13175
This proposed rule has been reviewed under Executive Order 13175--
Consultation and Coordination with Indian Tribal Governments, which
requires agencies to consider whether their rulemaking actions would
have Tribal implications. AMS has determined that this proposed rule is
unlikely to have substantial direct effects on one or more Indian
Tribes, on the relationship between the Federal Government and Indian
Tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian Tribes.
Regulatory Flexibility Act and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C.
601 et seq.), the Agricultural Marketing Service has considered the
economic impact of this action on small entities and has certified this
proposed rule will not have a significant economic impact on a
substantial number of small entities. The purpose of the RFA is to fit
regulatory actions to the scale of businesses subject to such actions
so that small businesses will not be unduly or disproportionately
burdened. Marketing orders and amendments thereto are unique in that
they are normally brought about through group action of essentially
small entities for their own benefit. A small dairy farm as defined by
the Small Business Administration (SBA) (13 CFR 121.201) (NAICS Code
112120) is one that has an annual gross revenue of $3.75 million or
less, and a small dairy products manufacturer is one that has no more
than the number of employees listed in the chart below:
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Size standards in
NAICS code NAICS U.S. industry number of
title employees
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311511........................ Fluid Milk 1,150
Manufacturing.
311512........................ Creamery Butter 750
Manufacturing.
311513........................ Cheese Manufacturing. 1,250
311514........................ Dry, Condensed, and 1,000
Evaporated Dairy
Product
Manufacturing.
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To determine which dairy farms are ``small businesses,'' the $3.75
million per year income limit was used to establish an annual milk
marketing threshold of 18.3 million pounds. Although this threshold
does not factor in additional monies that may be received by dairy
producers, it should be an accurate standard for most ``small'' dairy
farmers. Based on the U.S. 2023 average yield per cow and 2023 NASS
average All-Milk price, a dairy farm with approximately 780 cows or
fewer would meet the definition of small business. In 2022, the most
recent year with statistics available, there were 24,470 dairy farms
with milk sales, of which approximately 19,576 had milk regulated on an
FMMO for at least one month of the year. Based on the 2022 Census of
Agriculture, Milk Cow Herd Size by Inventory and Sales, an estimated 89
percent of operations with milk sales are likely to be small
businesses.
To determine a handler's size, if the plant is part of a larger
company operating multiple plants that collectively exceed the 750-
employee limit for creamery butter manufacturing; the 1,000-employee
limit for dry, condensed, and evaporated dairy product manufacturing;
the 1,150-employee limit for fluid milk manufacturing; or the 1,250-
employee limit for cheese manufacturing; the plant was considered a
large business even if the local plant does not exceed the 750, 1,000,
1,150, or 1,250-employee limit, respectively.
In 2022, 322 dairy plants were regulated for at least one month of
the year in a FMMO. According to the 2022 Census of Agriculture,
approximately 86 percent of fluid milk manufacturing plants,
approximately 96 percent of cheese plants, approximately 82 percent of
dry products plants, and approximately 78 percent of butter plants met
the SBA definition of small businesses.
Producers and handlers use the DFPP as a risk management tool.
Under the DFPP, producers and handlers can ``lock-in'' prices, thereby
minimizing risks associated with price volatility that are particularly
difficult for small businesses to mitigate.
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.
Section 1601(c)(2)(B) of the 2014 Farm Bill provides that the
administration of the DFPP shall be made without regard to the
Paperwork Reduction Act (PRA), 44 U.S.C. Chapter 35. Section 1701 of
the 2018 Farm Bill extended that Congressional direction through
September 30, 2023. Congress again extended the direction through
September 30, 2024, by the Further Continuing Appropriations and Other
Extensions Act, 2024, and that direction is further extended to
September 30, 2025, by the current reauthorization of the DFPP through
the Relief Act.\10\ Thus, any information collection conducted for the
DFPP is not subject to the PRA.
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\10\ Public Law 118-158.
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Final Action
In accordance with the Relief Act, this final rule extends the DFPP
to all Federal milk marketing orders. New contracts under the program
may be entered into until September 30, 2025. Any forward contract
entered into up to and until the September 30, 2025, deadline is
subject to a September 30, 2028, expiration date.
Section 1601(c)(2)(A) of the 2014 Farm Bill provides that the
promulgation of the regulations to implement the reauthorization of the
DFPP shall be made without regard to the notice and comment
requirements of the Administrative Procedure Act, 5 U.S.C. 553. Section
1701 of the 2018 Farm Bill extended the Congressional direction, and
Section 4101 of the Relief Act extends that direction to the current
reauthorization of the DFPP. It is unnecessary and contrary to the
public interest to delay the effective date of the final rule. Dairy
stakeholders have been unable to enter in contracts since the DFPP
expired on September 30, 2024. Producers and handlers have thus been
unable to rely on these forward contracts as a risk management tool.
Stakeholders have inquired about when the program will be reimplemented
and have signaled they intend to
[[Page 16999]]
immediately enter into new contracts. Further, all contracts are
voluntary. AMS, therefore, is issuing this final rule one day after
publication, without prior notice or public comment.
List of Subjects in 7 CFR Part 1145
Forward pricing contracts, Milk marketing orders, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service amends 7 CFR part 1145 as follows:
PART 1145--DAIRY FORWARD PRICING PROGRAM
0
1. The authority citation for 7 CFR part 1145 continues to read as
follows:
Authority: 7 U.S.C. 8772.
0
2. Amend Sec. 1145.2 by revising paragraph (b) to read as follows:
Sec. 1145.2 Program.
* * * * *
(b) No forward price contract may be entered into under the program
after September 30, 2025, and no forward contract entered into under
the program may extend beyond September 30, 2028.
* * * * *
Erin Morris,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2025-06939 Filed 4-22-25; 8:45 am]
BILLING CODE P
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