[Federal Register: January 14, 2009 (Volume 74, Number 9)]
[Proposed Rules]
[Page 1976-1992]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ja09-20]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1000 and 1033
[AMS-DA-08-0049; AO-166-A77; Docket No. DA-08-06]
Milk in the Mideast Marketing Area; Recommended Decision and
Opportunity To File Written Exceptions on Proposed Amendments to
Tentative Marketing Agreement and Order
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule; recommended decision.
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SUMMARY: This decision recommends adoption of a proposal to adjust
Class I prices in certain counties of the Mideast Federal milk
marketing order. Class I prices are recommended to be unchanged in 193
counties within the marketing area and to be increased by up to $0.20
per hundredweight in 110 counties in the southern portion of the
marketing area. The original hearing proposal to adjust Class I prices
is recommended for adoption, except it is modified to recommend a $0.20
increase in the Class I price at Charleston, West Virginia.
[[Page 1977]]
DATES: Comments must be submitted on or before March 16, 2009.
ADDRESSES: All comments received will be posted without change,
including any personal information provided. Comments (six copies)
should be filed with the Hearing Clerk, United States Department of
Agriculture, STOP 9200-Room 1031, 1400 Independence Avenue, SW.,
Washington, DC, 20250-1031. You may send your comments by the
electronic process available at the Federal eRulemaking portal: http://
www.regulations.gov. Reference should be made to the title of the
action and docket number.
FOR FURTHER INFORMATION CONTACT: Erin C. Taylor, Order Formulation and
Enforcement Branch, USDA/AMS/Dairy Programs, STOP 0231-Room 2963, 1400
Independence Ave., SW., Washington, DC 20250-0231, (202) 720-7183, e-
mail address: erin.taylor@usda.gov.
SUPPLEMENTARY INFORMATION: This decision recommends adoption of
amendments that would adjust the Class I pricing surface in certain
counties within the geographical marketing area of the Mideast milk
marketing order.
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.
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. If adopted, the proposed
amendments would not preempt any state or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
The Agricultural Marketing Agreement Act of 1937, as amended (7
U.S.C. 601-674) (the Act), provides that administrative proceedings
must be exhausted before parties may file suit in court. Under Section
608c(15)(A) of the Act, any handler subject to an order may request
modification or exemption from such order by filing with 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 principal place of
business, has jurisdiction in equity to review USDA's ruling on the
petition, provided a bill in equity is filed not later than 20 days
after the date of the entry of the ruling.
Regulatory Flexibility Act and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the Agricultural Marketing Service (AMS) has considered the
economic impact of this action on small entities and has certified that
this proposed rule will not have a significant economic impact on a
substantial number of small entities.
For the purpose of the Regulatory Flexibility Act, a dairy farm is
considered 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. For the purposes of
determining which dairy farms are ``small businesses,'' the $750,000
per year criterion was used to establish a production guideline of
500,000 pounds per month. Although this guideline does not factor in
additional monies that may be received by dairy producers, it should be
an inclusive standard for most ``small'' dairy farms. For purposes of
determining a handler's size, if the plant is part of a larger company
operating multiple plants that collectively exceed the 500-employee
limit, the plant will be considered a large business even if the local
plant has fewer than 500 employees.
During August 2008, the time of the hearing, there were 7,376 dairy
farms pooled on the Mideast order. Of these, approximately 6,927 dairy
farms (or 93.9 percent) were considered small businesses.
During August 2008, there were 53 handler operations associated
with the Mideast order (27 fully regulated handlers, 9 partially
regulated handlers, 2 producer-handlers and 15 exempt handlers). Of
these, approximately 43 handlers (or 81 percent) were considered small
businesses.
Minimum Class I prices are determined in all Federal milk marketing
orders by adding a location specific differential, referred to as a
``Class I differential,'' to the higher of an advance Class III and
Class IV price announced by USDA. The amendments recommended for
adoption in this decision provide for adjusting Class I prices for
certain counties within the geographic boundaries of the Mideast
marketing area. Minimum Class I prices charged to regulated handlers
are applied uniformly to both large and small entities. Class I price
increases would generate a higher marketwide pool value in the Mideast
order by approximately $280,000 to $300,000 per month. Therefore, the
proposed Class I price adjustments will not have a significant economic
impact on a substantial number of small entities.
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.
A review of reporting requirements was completed under the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). It was
determined that these proposed amendments would have no impact on
reporting, recordkeeping, or other compliance requirements because they
would remain identical to the current requirements. No new forms are
proposed and no additional reporting requirements would be necessary.
This recommended decision does not require additional information
collection that requires clearance by the Office of Management and
Budget (OMB) beyond currently approved information collection. The
primary sources of data used to complete the approved forms are
routinely used in most business transactions. The forms require only a
minimal amount of information which can be supplied without data
processing equipment or a trained statistical staff. Thus, the
information collection and reporting burden is relatively small.
Requiring the same reports for all handlers does not significantly
disadvantage any handler that is smaller than the industry average.
Interested parties were invited to submit comments on the probable
regulatory and informational impact of this proposed rule on small
entities.
Prior Documents in This Proceeding
Notice of Hearing: Issued July 21, 2008; published July 24, 3008
(73 FR 43160).
Preliminary Statement
Notice is hereby given of the filing with the Hearing Clerk of this
recommended decision with respect to proposed amendments to the
tentative marketing agreement and the order regulating the handling of
milk in the Mideast marketing area. This notice is issued pursuant to
the provisions of the Agricultural Marketing Agreement Act and the
applicable rules of practice and procedure governing the formulation of
marketing agreements and marketing orders (7 CFR Part 900).
Interested parties may file written exceptions to this decision
with the
[[Page 1978]]
Hearing Clerk, U.S. Department of Agriculture, STOP 9200-Room 1031,
1400 Independence Ave., SW., Washington DC 20250-9200, by March 16,
2009. Six copies of the exceptions should be filed. All written
submissions made pursuant to this notice will be made available for
public inspection at the Office of the Hearing Clerk during regular
business hours (7 CFR 1.27(b)). The hearing notice specifically invited
interested persons to present evidence concerning the probable
regulatory and informational impact of the proposals on small
businesses. Some evidence was received that specifically addressed
these issues and some of the evidence encompassed entities of various
sizes.
A public hearing was held upon proposed amendments to the marketing
agreement and the order regulating the handling of milk in the Mideast
marketing area. The hearing was held pursuant to the provisions of the
Agricultural Marketing Agreement Act of 1937 (AMAA), as amended (7
U.S.C. 601-674), and the applicable rules of practice and procedure
governing the formulation of marketing agreements and marketing orders
(7 CFR part 900).
The proposed amendments set forth below are based on the record of
a public hearing held in Cincinnati, Ohio, pursuant to a notice of
hearing issued July 21, 2008.
The material issues on the record of hearing relate to:
1. Class I Prices--Adjustments and Pricing Surface
Findings and Conclusions
This decision recommends adoption of a proposal, published in the
hearing notice as Proposal 1, with one modification. The proposal would
increase Class I prices in 110 of 303 counties within the Mideast
marketing area. The minimum Class I prices of the Mideast order are
determined by adding a location-specific differential, referred to as a
Class I differential, to the higher of an advance Class III or Class IV
price announced by USDA. Class I differentials are location-specific by
county and parish for all States of the 48 contiguous United States.
Class I differentials for the Mideast order are specified in 7 CFR
1000.52.
A witness appeared on behalf of the proponents of Proposal 1, Dairy
Farmers of America, Michigan Milk Producers, Inc., Foremost Farms USA
Cooperative, Inc., Dairylea Cooperative, Inc., and National Farmers
Organization, Inc., hereinafter referred to as ``DFA, et al.,'' in
support of increasing Class I prices in the southern tier of the
Mideast milk marketing area. All of these organizations are Capper-
Volstead cooperatives. According to the witness, DFA, et al., markets
the majority of the milk that is pooled and priced under the terms of
the Mideast marketing order. The witness testified that DFA, et al.,
members market milk in the Mideast marketing area through MEMMA. The
witness described MEMMA as a common marketing agency that shares
customer orders, milk availability, balancing capacity and other
information to provide for the efficient assembly and transportation of
milk. The witness stated that DFA, et al., are supporters of Federal
milk marketing orders and emphasized that the economic livelihood of
dairy farmers would be diminished in their absence.
The DFA, et al., witness testified that recent changes to the Class
I price surface and transportation credit provisions in the
Appalachian, Southeast and Florida marketing orders \1\ (southeastern
orders) have caused difficulties in supplying fluid milk processing
plants in the southern tier of the Mideast marketing area. The witness
testified that those changes increase the blend prices received by
farmers whose milk is pooled on the southeastern orders and also
provide more money to offset transportation costs of supplemental milk
delivered to southeastern plants. The witness testified that these
combined changes to the southeastern orders attract milk away from
Mideast order fluid milk plants and justify the need for a temporary
increase in the Class I price surface in the southern tier of the
marketing area.
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\1\ See Tentative Partial Decision, Published February 29, 2008
(73 FR 11194).
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The DFA, et al., witness testified regarding the need for making
regional, temporary changes to the Class I price surface. The witness
testified that adequate data do not currently exist to revise the Class
I price surface on a national basis, and that the problem in the
Mideast order should be addressed now. The witness noted that Proposal
1 should be considered a temporary adjustment that may be changed in
the future if a national hearing should occur.
The DFA, et al., witness asserted that the purpose of Class I
differentials are to generate adequate revenue to assure that the fluid
milk market is adequately supplied. The witness testified that
increases in transportation costs combined with recent changes
affecting Class I prices to the southeastern orders have made it more
difficult to service Mideast fluid milk plants. Therefore, the witness
concluded, a temporary increase in the Class I prices in the southern
tier of the Mideast marketing area is warranted.
The DFA, et al., witness relied on data prepared by the Market
Administrator to compare the volume of milk produced within the
marketing area boundaries with the volume of milk actually pooled on
the Mideast order. The data revealed total milk production by state and
county that is either: Pooled on the Mideast order; usually associated
with but not pooled on the order during the specified month; or pooled
on another Federal order. The witness was of the opinion that milk
produced within the boundaries of the Mideast marketing area but not
pooled on the Mideast order can be assumed to have been marketed
elsewhere for a higher return. The witness concluded from these data
that the milk supply for the Mideast marketing area is concentrated in
the central to northern regions of the marketing area.
The DFA, et al., witness described the analysis used to examine the
milk supply and demand situation in the Mideast marketing area. The
witness explained how they divided the Mideast marketing area into
northeast, northwest and southern regions. DFA, et al., then requested
that the Market Administrator calculate summary statistics for each
region for January, April, August and November of 2007, and January and
April of 2008.
The DFA, et al., witness reviewed market administrator data that
they had requested prior to the hearing that showed: (1) The volume of
milk produced on farms located in the defined supply regions either
pooled on the Mideast order or pooled on another Federal order and
delivered to a pool distributing plant in the defined supply region;
(2) The pounds of bulk milk physically received at distributing plants
located in the defined supply regions; (3) The net of the two figures
to demonstrate a milk deficit or surplus situation in each of the three
regions; and (4) The hauling distances of producer milk to distributing
plants within each of the three regions.
The DFA, et al., witness described the northwest region of the
marketing area as Michigan, northern Indiana and northwest Ohio.
According to the witness, the northwest area has the largest volume of
milk production and the largest volume of Class I demand when compared
to the other two areas, while also being subject to the two lowest
valued Class I differential zones in the Mideast marketing area. The
witness characterized the northwest region as the reserve supply region
for the Mideast marketing area since milk
[[Page 1979]]
production is greater than fluid milk demand and milk is frequently
transported from this region into the other two regions. The witness
said that the data indicated that the average hauling distance for milk
delivered to distributing plants in the northwest region is 72 miles.
The DFA, et al., witness described the northeast region of the
Mideast marketing area as the northeastern half of Ohio and the western
portion of Pennsylvania. The witness testified that the northeast
region is also an area where milk production exceeds fluid milk demand
and that the average hauling distance for milk delivered to
distributing plants in the region is 70 miles.
The DFA, et al., witness described the southern region of the
marketing area as the southern portion of Indiana, southern portion of
Ohio, northeast portion of Kentucky and the western half of West
Virginia. The witness testified that, on average, the local milk supply
for this region meets only 60 percent of fluid milk demand, making it
the only deficit region of the marketing area. The southern region of
the marketing area absorbs all of the local milk supply that is not
attracted to the Appalachian or Southeast orders and relies on milk
supplies from the northern tier of the marketing area to balance fluid
milk needs, the witness said. The witness noted that the average
hauling distance of milk delivered to distributing plants in the region
is 133 miles, which in the witness' opinion represents milk produced
outside the region being delivered to plants within the region. The
witness added that the average hauling distance in this region is over
60 miles further than in the other two regions.
The DFA, et al., witness, relying on Market Administrator data,
detailed the competition for milk supplies from non-pool plants within
the marketing area. The witness concluded from the data that there are
a significant number of non-pool manufacturing plants located near the
reserve supply regions of the marketing area. The witness was of the
opinion that the Class I prices in the southern tier of the marketing
area should be increased to attract milk away from these manufacturing
operations for higher-valued fluid use by compensating farmers for the
higher transportation costs they incur to service these fluid plants.
The DFA, et al., witness testified that Class I differentials have
only been modified twice in the past 23 years, once as a result of the
1985 Farm Bill, and another as a result of Federal order reform in
2000. The witness noted that the changes made to the Class I price
surface during Federal order reform in 2000 were based on data from the
mid-1990's. The witness said that there have been significant changes
in marketing conditions since then, notably the number of dairy farms,
the increase in size of existing dairy farms, population increases in
the southern region of the Mideast marketing area and a shift in milk
production to the northern region of the marketing area. The witness
was of the opinion that the Class I price surface currently in place in
the Mideast marketing area is too ``flat,'' and does not encourage the
movement of milk from the supply region in the north to deficit regions
in the south. The witness noted that the difference in Class I
differentials between southern Michigan and Cincinnati, Ohio, for
example, is $0.40, which according to the DFA, et al., calculation
represents only 26 percent of the actual transportation cost that a
milk hauler would incur.
The DFA, et al., witness relied on two methodologies to illustrate
the inadequacies of the Class I price surface in the southern tier of
the Mideast marketing area. The witness said that the first method
examined milk transportation data provided by MEMMA, and the second
method paralleled the methodology relied on to implement the
adjustments to Class I prices in the southeastern orders. The witness
used Market Administrator data to select eleven high milk production
counties that, according to the witness, represent ``reserve'' supply
areas for the Mideast market.
The DFA, et al., witness described the MEMMA methodology used to
determine the differences between actual transportation costs and Class
I differential levels. The witness first presented diesel fuel cost
data from the Energy Information Agency (EIA) that showed recent
increases in fuel costs, with an average fuel cost of $4.52 a gallon
from the beginning of 2008 until the time of the hearing (August 2008).
The witness described how fuel costs are used to determine milk hauling
costs and testified that MEMMA utilizes a $2.20 base hauling rate plus
a monthly fuel surcharge to calculate total hauling rates. The witness
relied on a 47 percent fuel surcharge for this calculation which is,
according to the witness, MEMMA's average surcharge from the beginning
of the year to the time of the hearing. The witness said that this
results in a hauling rate of $3.23 per loaded mile, or $1.59 per cwt
for the 235 mile haul from Clinton County, Michigan, (reserve area) to
Eastside Dairy in Anderson, Indiana (deficit area).
The DFA, et al., witness then calculated the net dollars provided
by the differences in the Class I differentials to offset
transportation costs between the eleven reserve counties they had
previously selected and the ten fluid plants located in the deficit
southern region. For example, the differences in the Class I
differential levels would provide $0.20 per cwt to offset the
transportation cost of the haul from Clinton County, Michigan, to
Eastside Dairy in Anderson, Indiana. The witness used these data to
determine the portion of transportation costs that are not covered by
the differences in the Class I differential levels. For all of the
supply counties and plant locations, the average shortfall was $1.76
per cwt, noted the witness. Accordingly, the witness concluded from the
MEMMA methodology that the current Class I differential levels in the
southern region of the Mideast marketing area are inadequate.
The DFA, et al., witness then examined the methodology used to
determine temporary increases in the Class I prices in the southeastern
marketing orders to formulate the proposed Class I price adjustments in
the southern tier of the Mideast marketing area. The witness noted that
the basic foundation for deriving the temporary adjustments to the
Class I price surface in the southeastern orders was the identification
of potential supply areas. Once identified, the areas were relied upon
to calculate the least-cost Class I price adjustment based on the
farthest point of milk demand.
The DFA, et al., witness testified that this methodology utilized
the same diesel fuel rate from the EIA as was used in the previously
discussed MEMMA example. Using the same methodology as in the
proceeding for the southeastern orders, the witness determined a base
period for fuel costs (May-June 2003), determined the increase in costs
from the base period to the present and determined the fuel cost
adjustor ($0.44) to be added to the $2.20 MEMMA base haul rate. This
rate was divided by the 480 cwt of milk in a typical tanker load to
determine that rate per cwt per mile of $0.00521. This rate was then
used to compare the costs of alternative reserve supplies for the three
regions of the Mideast marketing area.
The DFA, et al., witness further explained that they relied on the
methodology previously used to formulate the Class I price adjustments
in their proposal. The witness offered the methodology used in the
southeastern Class I pricing. The witness noted that the record of the
southeastern proceeding identified five
[[Page 1980]]
potential alternative supply points surrounding the southeastern region
of the country that could potentially supply the Miami market. The
witness testified that the distances between the supply points and the
demand point were multiplied by the mileage rate (described in the
prior paragraph), and was further reduced by 20 percent to avoid having
minimum prices set at actual transportation costs. The adjusted haul
rate was then added to the current Class I differential for the supply
point, yielding an ``acquisition cost'' as described by the witness.
The witness explained that the difference between the acquisition cost
and the actual Class I differential were used to suggest a reasonable
temporary adjustment to Class I prices.
The DFA, et al., witness testified that this methodology was
repeated for six plants in the southern tier of the Mideast marketing
area. The six plant locations were Indianapolis, IN, Marietta, OH,
Newark, OH, Cincinnati, OH, Springfield, OH, and Charleston, WV. The
witness stated that these plant locations represent the geographic
spread of plants within the southern tier of the marketing area. DFA,
et al., then chose six potential supply points from the eleven
previously determined counties which serve as the reserve supply of the
order. The witness testified that for Indianapolis, IN, Elkhart County,
IN, the least-cost alternative, was $2.55 per cwt. As compared to the
current differential of $2.00, the $2.55 per cwt figure suggested an
adjustment of $0.55 per cwt. The witness conducted the same least-cost
alternative comparison for each of the five other plant locations.
The DFA, et al., witness summarized the above conclusions in the
context of the existing Class I differential levels and Class I price
adjustments. The witness testified that under Proposal 1 the plants in
the current $2.00 differential zone would be in a newly proposed zone
that has a 15-cwt Class I price adjustment which should not
substantially change existing competitive relationships. Similarly,
noted the witness, plants in the current $2.20 differential zone,
except the United Dairy plant in Charleston, WV, would be in a newly
proposed zone that has a 40-cent Class I price adjustment. The witness
explained how the location of the United Dairy plant in Charleston, WV,
justified a greater adjustment to the Class I price than any other
plant in the southern tier of the marketing area because of its
distance from reserve supplies. Accordingly, DFA et al., proposed that
a $0.40 adjustment (increase) in the Class I price at Charleston, WV,
will better align with the Class I prices applicable to their nearest
three competitors, Dean Foods, Louisville, KY; Winchester Farms Dairy,
Winchester, KY; and Flav-O-Rich Inc., London, KY. The witness noted
that these competitor's Class I price levels include the $0.15
transportation credit balancing fund assessment for supplemental milk
needed for Class I use that is administered in the Appalachian order.
The DFA, et al., witness explained how they analyzed the cost of
moving packaged milk between reserve supply locations and distributing
plants (demand points) in the southern tier of the marketing area to
gauge the expected impacts on the competitive relationships between
handlers in the southern tier of the Mideast marketing area. The
witness testified that although they do expect the competitive
relationships between handlers to be affected by the proposed
adjustment in Class I prices, they did not find any instance wherein
the proposed changes exceeded the cost of moving packaged milk between
handlers. The witness explained that by calculating the total
acquisition and distribution costs for each supply and demand
combination as the Class I differential at the supply location plus the
cost of moving the packaged milk to the demand location, they found no
instances where the cost of acquiring and moving packaged milk exceeded
the proposed Class I price levels. Therefore, the witness concluded,
the proposed Class I price adjustments are reasonable because they do
not provide an incentive for uneconomic movements of milk.
The DFA, et al., witness withdrew the proponents' original
contention that emergency conditions exist to warrant the omission of a
recommended decision, contingent, the witness said, on this proceeding
adhering to the deadlines established by the 2008 Farm Bill. The
witness was of the opinion that a recommended decision issued within 90
days of the close of the hearing would be reasonable.
A post-hearing brief filed by DFA, et al., reiterated their
testimony describing the market conditions for fluid milk in the
Mideast marketing area. The brief reasserted proponent's claims that:
the southern region of the marketing area is a deficit market; that the
Class I differentials are too low to cover the costs of transporting an
adequate supply of milk from the surplus northern regions to
distributing plants in the southern region; and that, recent changes to
the Class I prices in the southeastern orders has made it difficult for
local distributing plants in the southern region of the Mideast
marketing area to attract and maintain an adequate supply of fluid
milk.
The DFA, et al., brief addressed opposition that existing price
relationships between plants should not be disturbed by adjusting Class
I prices. DFA, et al., wrote that the record shows that costs of
supplying fluid plants have increased and the Class I price adjustments
for plants in the southeastern orders has changed such that the
competitive relationships between plants has already been altered. DFA,
et al., also asserted that the opponents to their proposal claiming
that the Class I price surface should be changed via a national hearing
is, in actuality, an attempt aimed at stalling any increase in their
regulated minimum prices. In this regard, DFA, et al., wrote that the
proposed Class I price adjustments are justified by local supply and
demand conditions.
The DFA, et al., brief also expressed opposition to Dean's proposal
of decreasing Class I differentials in the northern regions of the
marketing area (to be discussed later in this decision). DFA, et al.,
found fault with Deans' premise that the appropriate remedy to the
increased cost of supplying plants in the southern region of the
marketing area is to lower prices paid to dairy farmers in the northern
regions.
A witness testifying on behalf of United Dairy, Inc. (United Dairy)
opposed the adoption of Proposal 1. United Dairy operates three fluid
milk processing plants in the Mideast marketing area. The witness was
of the opinion that Proposal 1 singles out the United Dairy plant in
Charleston, WV, for an unnecessarily large increase in its Class I
price of $0.40 per cwt. The witness said that such a large increase
would put the Charleston plant at a competitive disadvantage to its
primary competitor, the Dean Foods' Broughton Foods plant in Marietta,
OH, located 85 miles to the north.
The United Dairy witness explained that the Charleston, WV, plant
is located in the $2.20 differential zone (the same as Cincinnati, OH),
while the Marietta, OH, plant is located in the $2.00 differential
zone. Proposal 1 seeks to increase the Class I price at the Marietta,
OH, plant by $0.15, while it proposes a $0.40 Class I price increase
for the Charleston, WV, plant, stated the witness. The witness
highlighted that the Charleston plant would be the only regulated
distributing plant in essentially a new price zone. The witness said
that despite already paying a higher regulated milk price because of
the difference in Class I differentials ($2.20 versus $2.00), the
Charleston,
[[Page 1981]]
WV, plant has been able to compete for sales with the Marietta, OH,
plant. However, if Proposal 1 is adopted, the witness explained, the
Charleston, WV, plant will be subject to a $0.45 cost disadvantage
relative to their Marietta, OH, plant competitor.
The United Dairy witness testified that despite proponent claims
that the Charleston, WV, plant is the hardest plant in the marketing
area to service, United Dairy has had no difficulty in attracting an
adequate milk supply to meet its demand. The witness also countered
proponent claims that it is difficult to attract milk supplies to the
southern region of the marketing area. The witness said that MEMMA
supplies most of the plants in the region, and is therefore able to
shift its farm routes between customers to meet demand.
The United Dairy witness estimated that a 40-cent increase in its
Class I price equates to a 3.5 cent increase per gallon of milk they
produce. The witness asserted that competition for sales between plants
can be won, or lost, over pennies. An increase of 3.5-cents per gallon
would place the Charleston plant at a severe disadvantage and most
likely result in lost sales, concluded the witness. While seeing no
need to increase in the Class I price, the witness said that any
increase found needed by USDA should assure that the competitive
relationship between the Charleston, WV, and Marietta, OH, plants be
maintained.
A post-hearing brief filed on behalf of United Dairy faulted DFA,
et al's., reasoning for increasing the Class I prices in the Mideast
marketing area as being tied to recent changes to the Class I prices in
the three southeastern orders. United Dairy stated that the changes in
the southeastern orders were made because the chronic milk deficit
situation in those orders necessitated higher Class I prices aimed at
attracting milk from states such as Ohio and Michigan to supply those
fluid plants. United Dairy asserted that increasing Class I prices in
the southern tier of the Mideast marketing area would undermine the
steps taken in the southeastern orders to alleviate the milk supply
problem.
United Dairy also argued in brief that proponents did not
demonstrate that plants in the southern tier of the Mideast market are
having difficulties attracting an adequate supply of fluid milk. United
Dairy claimed that at the time of the hearing there was no data
available to support the proponents claim because the changes in the
southeastern orders did not become effective until May 1, 2008, and
data from that month had not yet been released. Regardless, United
Dairy asserted that the states comprising the Mideast order have
experienced an increase in milk production while Class I demand has
decreased 8.8 percent January 1, 2000.
United Dairy's brief reiterated testimony that its Charleston, WV,
plant has not had difficulty acquiring an adequate milk supply. The
brief stated that the Charleston, WV, plant provides a market outlet
for independent producers in the Mideast order, and serves a vital role
in supplying milk to school and rural customers in West Virginia.
United Dairy wrote that increasing the Class I price of that plant by
$0.40 would put it at a competitive disadvantage to plants located in
areas where Class I prices are not also increased by $0.40. Lastly,
United Dairy argued that emergency conditions that would warrant the
omission of a recommend decision do not exist.
An Ohio dairy farmer supplier of United Dairy testified in
opposition to Proposal 1. The witness agreed with proponent testimony
that transportation costs have increased, but said that adjusting Class
I prices could financially harm certain plants. The witness stated that
it is important for plants to remain viable so that farmers have
numerous market outlets for their milk.
The witness testified that their farm supplies the United Dairy
plant in Martins Ferry, OH. The witness said that out of a total $0.92
per cwt that the milk hauler charges, they pay $0.82 and United Dairy
pays $0.10. The witness disagreed with the methodology used by
proponents in determining the proposed Class I price adjustments
because, in the witness' opinion, the proposed adjustments are not
equitable across distributing plants.
A witness testifying on behalf of The Kroger Company Manufacturing
Group (Kroger) opposed the adoption of Proposal 1. According to the
witness, Kroger operates three fluid distributing plants regulated by
the Mideast order. The witness testified that two Kroger plants,
Crossroad Farms Dairy located in Indianapolis, Indiana, and Tamarack
Farms Dairy located in Newark, Ohio, are located in the pricing zones
that would be increased if Proposal 1 was adopted. The witness
testified that Kroger pays its suppliers over-order premiums and fuel
surcharges which have increased recently due to higher fuel costs. The
witness indicated that none of their suppliers have indicated problems
in supplying any Kroger plants. The witness said that if Proposal 1 is
adopted the Class I prices at both Kroger plants would increase by
$0.15 per cwt.
The Kroger witness asserted that the proposed Class I price
adjustments would alter plant price relationships that date back to the
1985 Farm Bill. These proposed differentials would place the Kroger
plants in a difficult competitive situation, the witness said.
According to the witness, the Kroger plants compete for sales with
plants located to the north that, under Proposal 1, would not see a
price adjustment.
The Kroger witness argued that much of the milk produced in the
Mideast marketing area is actually committed to supplying plants
located in the deficit southeastern orders. The witness concluded that
if the southern region of the Mideast marketing area was really a
deficit market, as the proponents purport, then much of the milk that
currently goes south would instead stay in the Mideast marketing area.
The witness was of the opinion that current milk supplies in the
Mideast are more than adequate to meet demand rendering an increase in
Class I prices unnecessary.
The Kroger witness indicated that, in the future, if the southern
region of the marketing area has problems acquiring a milk supply, then
a hearing to consider the promulgation of a new order in the southern
region should be held. The witness stated that if such a new order was
created then the monies generated within the new order would only be
shared amongst producers serving that market, instead of being shared
with all the producers in the Mideast market through the blend price.
The witness also noted that emergency conditions do not exist to
warrant exclusion of a recommended decision.
A witness testifying on behalf of Dean Foods (Dean) opposed the
adoption of Proposal 1. According to the witness, Dean owns and
operates eleven distributing plants regulated by the Mideast milk
marketing order. The witness' testimony regarding the opposition to
Proposal 1 was supported by Prairie Farms. The witness said that if
Proposal 1 is adopted, three of the eleven Dean plants would see an
increase in their Class I price.
The Dean witness was of the opinion that this rulemaking proceeding
is the result of regulatory changes made to the Class I prices in the
southeastern orders effective May 1, 2008. The witness stated that the
Class I pricing changes in those orders and the proposed changes in the
Mideast order essentially run counter to USDA's policy of a nationally
coordinated Class I price surface. The witness reviewed the nine key
criteria used by USDA in establishing the nationally coordinated Class
I price surface (effective January 1, 2000), in
[[Page 1982]]
the context of the changes proposed in this rulemaking proceeding. The
witness was of the opinion that the proposed increases would send
inappropriate market signals to farmers to produce more milk despite
the overall milk surplus observed in the Mideast order. The witness
said that adjusting Class I prices not only changes the value of milk
at that location, but it also changes the relative value of that milk
at other locations, as was the case in the southeastern orders. The
witness insisted that this underscores the importance of a nationally
coordinated Class I price surface. In keeping with this rationale, the
witness claimed that adjustments to Class I prices on an order-by-order
basis would lead to disorderly marketing conditions.
The Dean witness noted that the proposed Class I price increases
could lead to increased payouts from the Southeast and Appalachian
transportation credit funds which use the differential in the county
where milk is produced to compute the payout. The witness said that
this would lead the transportation credit funds to be drawn down faster
than otherwise would occur. On cross examination the witness admitted
that the Southeast and Appalachian order transportation credit funds
would only be drawn down faster if milk produced in the southern region
of the Mideast order was pooled in the Southeast or Appalachian orders
on a seasonal basis.
The Dean witness was of the opinion that it is too soon to tell if
Class I price adjustments in the southeastern markets has provided
handler equity in regards to raw product costs. Until the effect on
handler equity can be determined in the Southeast, there should be no
changes in the Class I prices in the Mideast, the witness said. The
witness also stated that higher Class I prices will alter the
competitive structure in the region and negatively affect handlers in
the Mideast.
The Dean witness argued that the proposed Class I price increases
would provide more incentive than is necessary to encourage milk to
move into the southern region of the marketing area. The witness also
objected to the proponent's attempt to divide the Mideast market into
three regions. The witness said that the data are insufficient to
determine whether the regions as proposed by proponents are accurate
depictions of three separate regions within the marketing area.
The Dean witness was of the opinion that the marketing conditions
in the Mideast order are different than the marketing conditions in the
southeastern orders. Therefore, the witness said, USDA should consider
a different approach to solving the problem in the Mideast marketing
area. The witness stated that the easiest way to solve the milk supply
issues of the Mideast would be for the USDA to reverse the decision to
increase Class I prices in the southeastern orders and then deny the
adoption of Proposal 1. Alternatively, the witness said that USDA could
suspend the current hearing until such time as more data capable of
documenting the impact southeastern order changes have had on Mideast
milk movements becomes available. Alternative proposals, including
those seeking to divide the marketing area into three separate orders,
could then be made, the witness said. The witness then offered data
that purported to reveal the marketwide pools that would result, if the
Mideast order were divided into three separate marketing orders.
The Dean witness offered an alternative proposal at the hearing to
lower the Class I differentials (and thus Class I prices) in the
northern regions of the Mideast marketing area. The witness said that
proponents have relied on Class I differential relationships between
the northern surplus area and the southern deficit area to justify the
proposed Class I price adjustments (increases). The witness insisted
that decreasing the differentials in the north would also provide
market signals to encourage milk to move from north to south. The
witness proposed that the Class I prices in the northern surplus
regions of the Mideast marketing area be decreased by anywhere between
$0.05 to $0.15 per cwt.
The Dean witness stated that emergency conditions warranting the
omission of a recommended decision do not exist.
Another Dean witness testified in opposition to the adoption of
Proposal 1. The witness said that data provided by the proponents
demonstrate that the milk supply in the Mideast marketing area is, on
the whole, sufficient to meet in-area demand. The problem, the witness
said, is the lack of incentives to move milk into the southern deficit
region. From these data, the witness concluded that the defined
marketing area is too large for marketwide pooling to properly function
because Class I revenues from the south are being shared with all
producers in the marketing area and diluting the incentives to supply
plants in the deficit region.
The Dean witness was of the opinion that blend price differences
between marketing orders encourages milk movements to deficit areas.
The witness insisted that the proponent's data supports the theory that
there should be three separate orders within the Mideast marketing
area. The witness argued that if a separate order were in place for the
southern region of the Mideast marketing area, the Class I utilization
would be higher than that of the existing marketing area. The witness
concluded that separate orders would generate blend price differences
large enough to encourage milk to move south without the need for
higher Class I prices.
A witness testifying on behalf of National Dairy Holdings (NDH)
also opposed the adoption of Proposal 1. According to the witness, NDH
is a fluid processor that owns and operates two distributing plants
regulated by the Mideast order. The witness said that Meyer Dairy is
the only fluid distributing plant owned and operated by National Dairy
Holdings (NDH) that would be affected by the proposed Class I price
increases. The witness stated that Meyer Dairy has not experienced any
difficulty in acquiring a milk supply. If USDA determines that
additional incentives are necessary to move milk to the southern region
of the Mideast marketing area, then the witness is supportive of Dean's
alternative proposal to lower Class I differentials in the northern
region of the marketing area. The witness was of the opinion that the
same desired results could be obtained by lowering differentials in the
northern region of the marketing area thus making the price
relationships more attractive so as to move milk south.
The NDH witness estimated that adoption of Proposal 1 would
increase their milk costs anywhere from 2 cents to 3.5 cents per gallon
relative to their competitors. However, the witness said that some of
their competitors would also see an increase in their Class I
differentials, albeit at a lesser amount than Meyer Dairy. The witness
speculated that the proposed cost increases could result in lost
contracts.
The NDH witness concurred with proponents that fuel and
transportation costs have increased since the current Class I price
surface became effective on January 1, 2000, and that one way of
combating the resulting milk supply problem is to increase Class I
prices in the deficit markets. However, the witness argued that the
best solution would be to lower differentials in the north so that the
new price relationship would encourage milk to service the deficit
south. According to the witness, this change would provide the same
result as Proposal 1, but without raising costs to consumers. The
witness purported that checkout scanner data
[[Page 1983]]
from retail stores show a correlation between the Class I price
increases in the southeastern orders and a reduction in fluid milk
sales. During the months of June and July 2008, fluid milk sales in
Atlanta and Miami were down 8.5 percent and 7.9 percent, respectively,
relative to the same period in 2007.
A post-hearing brief submitted on behalf of Dean, National Dairy
Holdings and Prairie Farms, hereinafter referred to as ``opponents
brief,'' expressed continued opposition to the adoption of Proposal 1.
The brief explained that proponents provided little evidence to prove
that recent changes to Class I prices in the southeastern orders have
made obtaining an adequate milk supply difficult for fluid plants
located in the southern tier of the Mideast order. The brief noted that
since the changes in the southeastern orders did not become effective
until May 1, 2008, complete data capable of accounting for the impacts
of the changes has yet to be compiled and published by the Market
Administrator offices. To counter proponents claim that more milk is
moving into the southeastern orders, the opponents brief cited Dairy
Market News Statistics showing that, for the week ending on October 10,
2008, fewer loads of milk were shipped into Florida and other
southeastern States than in the same week in 2007.
The opponents brief also argued that proponents attempt to divide
the Mideast marketing area into three sub-regions resulted in arbitrary
data. Opponents claimed that in defining the available milk supply for
any of the three sub-regions, proponents did not take into account what
milk was actually available and whether other near-by milk supplies
were available.
The opponent's brief stated that the Mideast marketing area as a
whole is a reserve supply of milk for the southeastern orders. It
contended that the purpose of nationally coordinated Class I price
surface is to bring forth an adequate supply of milk, therefore there
is no justification for increasing Class I prices in reserve supply
areas such as the Mideast. The brief further argued that increasing the
Class I prices in the southern tier of the Mideast marketing area would
cause disorderly marketing conditions because milk that is ineligible
for transportation credits in the southeastern orders would seek to
move to the higher priced zones in the Mideast marketing area. However,
the opponents brief disagreed with the DFA, et al.'s, use of
transportation credits in the Appalachian and Southeast orders as a
factor in determining appropriate Class I price adjustments. Opponents
stated that transportation credits serve a different economic purpose
and should not be a factor in considering if Class I prices should be
increased in the Mideast.
The opponents brief also argued that Class I prices should be
addressed on a national, not order-by-order basis, as was done in the
southeastern orders and as is proposed in the Mideast. According to
Dean, the proponents provided no justification to abandon past USDA
precedent for maintaining a nationally coordinated Class I price
structure.
The opponents brief summarized the alternative proposal they
offered at the hearing to decrease Class I differentials in the
northern surplus areas of the Mideast marketing area. (Prairie Farms
did not offer support of Dean's alternative proposal.) In brief, Dean
wrote that in areas of milk surplus, the correct market signal to
farmers is a lower price to encourage them to produce less. Dean
concluded that the subsequent decrease in production would, in turn,
lead to an increase in milk prices.
In brief, opponents continued to argue that proponents provided no
evidence demonstrating an emergency situation that would warrant
omission of a recommended decision. The brief stated that the
significant period of time between when the proponents first requested
data for a Mideast Class I price surface hearing (September 2007) and
their actual hearing request (June 2008) demonstrates that no emergency
exists. Therefore, Dean wrote, the public should be provided an
opportunity to comment on USDA's decision before implementation of any
proposed changes.
A witness appearing on behalf of Nestle USA (Nestle) testified in
opposition to Proposal 1. According to the witness, Nestle is a milk
manufacturer who operates one fluid distributing plant regulated by the
Mideast order which is located in Anderson, IN, where the proponents
have proposed a $0.15 adjustment in the Class I price. The witness said
that Nestle's milk supplier has not indicated any difficulty supplying
milk to the Nestle plant. The witness stated that the Nestle plant only
recently opened, but when Nestle was originally considering a location
for the plant they were approached by multiple suppliers in the Mideast
marketing area, all of whom indicated that providing a reliable milk
supply to the plant in Anderson, IN, would not be difficult.
The Nestle witness referred to proponent data indicating that the
average cost to supply a plant in Anderson, IN, was $1.60 per cwt more
than the Class I differential at the location. According to the
witness, Nestle already pays its supplier, on average, over-order
premiums in excess of this amount as well as a fuel surcharge for milk
delivered to the plant.
The Nestle witness testified that the Anderson plant primarily
produces flavored milk products that exhibit a great deal of
sensitivity to price changes. The witness also asserted that the Nestle
flavored milk products compete more directly with soft drinks, bottled
water and orange juice, than with milk. Therefore, the witness said,
any price increase in their products would result in lost sales to
competing non-dairy products. The witness also testified that products
produced at the Anderson plant are marketed nationwide and must compete
with products produced at plants located in counties that are not
subject to a proposed increase to their Class I price. The witness
concluded that there is no milk shortage problem in the southern region
of the Mideast marketing area and as such, Proposal 1 should be denied.
A post-hearing brief was submitted on behalf of Associated Milk
Producers Inc., Bongards Creamery, Family Dairies USA, First District
Association, Manitowoc Milk Producers Association, Mid-West Dairymen's
Company, Milwaukee Cooperative Milk Producers and the Wisconsin
Department of Agriculture, Trade and Consumer Protection. The brief
stated that collectively these organizations are members of the Midwest
Dairy Coalition (MDC). MDC argued that proponents have not demonstrated
that there is a milk deficit in the Mideast marketing area and as such,
they are opposed to the adoption of Proposal 1. MDC stated that if
there is a milk supply problem in the Mideast as a result of
effectively changing Class I differential levels in the southeastern
orders then the proponents have the ability to negotiate higher over-
order premiums to cover any higher supply costs.
MDC also addressed the broader issue of effectively changing Class
I differentials on an order-by-order, rather than national basis. They
argued that such changes not only have local, but also national
implications and should therefore be addressed in a larger national
framework.
Discussion and Findings
At issue in this proceeding is the consideration of proposed
adjustments to Class I prices in the southern region of the Mideast
milk marketing area as a means of ensuring an adequate supply of milk
for fluid use. Adjustments to
[[Page 1984]]
Class I prices in the southern tier of counties in the marketing area
are recommended for adoption herein and result in a change to the Class
I pricing surface. The adjustments to Class I prices are specified in
the order language. Providing for higher Class I prices under the order
in the counties that make up the southern tier of the marketing area
will help attract an adequate supply of fluid milk to distributing
plants and will increase the blend prices to dairy farmers who deliver
milk to those plant locations.
The minimum Class I prices of the Mideast order are set by adding a
location-specific differential, referred to as a Class I differential,
to the higher of an advance Class III or Class IV price announced by
USDA. The Class I differentials are location-specific by county, parish
or city for all States of the 48 contiguous United States. These Class
I differentials were adopted on January 1, 2000, and are specified in
CFR section 1000.52.
The proponents, DFA, et al., who collectively market more than 50
percent of the producer milk pooled on the Mideast order maintain that
it has become increasingly costly to supply fluid distributing plants
located in the southern tier of the Mideast marketing area. Their claim
is based on two factors: (1) Recent adjustments to Class I prices of
the southeastern orders have drawn milk, that previously would have
been utilized by fluid milk plants in the southern region, away from
the Mideast order; and (2) Transportation costs have increased such
that the current Class I differentials do not offer sufficient pricing
incentives to cover the cost of transporting milk from reserve northern
surplus regions to the deficit southern region of the marketing area.
Proponents divided the marketing area into three separate regions
and presented data to examine marketing conditions within the marketing
area and to explain how the southern region of the marketing area is
consistently milk deficit. Record evidence demonstrates a significant
difference in the volume of milk delivered to pool distributing plants
in the southern region relative to the volume of milk produced in the
region and either pooled on the Mideast order, or pooled on another
order and delivered to a pool distributing plant located in the
southern region of the Mideast marketing area. For example, during
April 2008, 189.8 million pounds of producer milk was received at
distributing plants located in the southern region. However, during
that month only 74.6 million pounds were produced in and delivered to
pool distributing plants in the same region, indicating a net deficit
of 115.2 million pounds. The data does not reflect the amount of milk
produced in the southern region that is then pooled and delivered to
plants in another order. However, it is reasonable to conclude that if
additional milk supplies are produced in, but not delivered to southern
region plants, then such milk has found a higher priced alternative
outlet.
Record evidence indicates that milk delivered to distributing
plants in the southern tier of the marketing area must travel further
distances than milk delivered to other plants in the marketing area.
The record contains hauling data for the months of January, April,
August and November 2007, and January and April 2008. The data reveal
that during these six months, milk delivered to plants in the southern
region traveled an average of 133 miles from farm to plant. In
comparison, the average distance for milk delivered to the Northwest
and Northeast regions during that same time period was 72 miles and 70
miles, respectively. Proponents contend that this data demonstrates
that the local milk supply in the southern region of the marketing area
is not adequate to meet the demand of the local plants.
DFA, et al., utilized two different methodologies to derive their
proposed adjustments to Class I prices to compensate for greater
transportation costs. These methods demonstrate that that the cost of
transporting milk from surplus to deficit regions in the marketing area
far exceed the differences in Class I differential levels.
The first methodology uses a transportation model derived from
transportation cost data supplied by MEMMA. The data indicate that
MEMMA's cost of moving milk within the Mideast marketing area (at the
time of the hearing) was $3.23 per loaded mile. Using this cost basis,
a per cwt cost of moving milk from 11 predetermined alternative supply
points to each of the fluid distributing plants in the marketing area's
southern region was established. Record evidence compares how much of
the estimated hauling cost is covered by the differences in Class I
differential levels between supply points and each of the southern
fluid distributing plants (demand points). The average difference for
the supply/demand point combinations was $1.76 per cwt, with a range of
$0.45 to $3.25 per cwt. This transportation cost model demonstrates
that the current differential levels in the southern region of the
marketing area fall significantly short of the cost of transporting
needed milk to those distributing plants.
The second transportation cost model proponents relied upon was
utilized in a recent three market southeastern order hearing that
adjusted the Class I prices in those orders (73 FR 11194). Utilizing
the same methodology, the model established a fuel adjusted
transportation rate of $2.64 per mile, or $0.0055 per cwt per mile.
This model compared the acquisition cost (Class I differential of
alternative supply area plus transportation cost) of delivering milk
from 6 of the 11 potential alternative supply locations to 6 fluid
distributing plants in the southern region of the Mideast marketing
area. The model then compared the least-cost supply alternative for
each distributing plant with the current Class I differential of that
plant. For example, the least cost alternative for the Charleston, WV,
plant was Wayne County, OH, with an acquisition cost of $2.89 per cwt.
The Class I differential at Charleston, WV, is $2.20, suggesting that a
Class I price adjustment of $0.69 would be appropriate.
Opponents to the proposed changes claimed that DFA, et al.,
provided inadequate data to support their claim that changes in the
Class I prices for the southeastern orders has made it more costly to
supply plants in the southern region of the Mideast marketing area.
This criticism is misplaced. As cooperative producer-member
organizations that supply the majority of the marketing areas Class I
needs, they clearly demonstrated the higher costs associated with
supplying plants in the southern region of the marketing area. Almost
all opposition witnesses for providing Class I price increases at the
hearing agreed that differences in blend prices between orders moves
milk. Thus it can be concluded that higher blend prices, through higher
Class I prices, attract milk to plants in those orders by providing the
economic incentive to supply milk to plants located in the southeastern
order marketing areas.
Monthly data recently released by the Appalachian Market
Administrator reveals that there has been a significant increase in the
amount of producer milk being received from Ohio at plants regulated by
the Appalachian order since May 1, 2008, when the Class I prices were
increased.\2\ The data reveal that producer milk deliveries from Ohio
from May through August 2006 averaged 17.7 million pounds per
[[Page 1985]]
month and 16.5 million pounds per month for the same time period in
2007. From May through August 2008, monthly Ohio producer milk
deliveries averaged 44.6 million pounds--an increase of 161 percent
from the average of the previous two years. Average monthly deliveries
from Ohio from January through August were 21.3 million pounds, 18.2
million pounds and 35.1 million pounds in 2006, 2007 and 2008,
respectively. This represents an increase in deliveries from Ohio of 61
percent from 2006 to 2008, and a 92 percent increase from 2007 to 2008.
---------------------------------------------------------------------------
\2\ Official notice is taken of Appalachian Marketing Order
Statistics: Producer Milk Pounds by States 2006-2008, found at
http://www.malouisville.com.
---------------------------------------------------------------------------
Recently released data from the Appalachian order supports the
proponents' claim that higher Class I prices brought about by providing
Class I price adjustments in the southeastern orders have resulted in
more milk servicing those orders from farms located in the Mideast
marketing area. It is reasonable to conclude from this record evidence,
that when coupled with evidence of increased transportation costs, the
Class I prices in the southern region of the marketing area provide
inadequate incentives to farmers to supply the fluid milk needs of
those plants. The recommended adjustments to the Class I prices will
provide, under the order, the economic incentives to supply fluid
distributing plants located in the southern tier of counties of the
Mideast marketing area.
DFA, et al's., proposed Class I price adjustments differ from those
calculated in the transportation models. The proposed Class I
adjustments as presented align with the differentials in the northern
regions of the marketing area, as well as with neighboring marketing
areas. These adjustments also ensure that similarly situated Class I
handlers in the southern region of the marketing area have similar
minimum regulated Class I prices. Providing similar regulated prices
for similarly situated handlers is consistent with the requirements of
the AMAA.
The proposed Class I price adjustments provide a steeper price
surface and reasonable alignment with the current Class I price surface
of the marketing areas beyond the geographical boundaries of the
Mideast order. The proposed Class I price adjustments result in price
relationships that are different from those that exist under the
current pricing structure. Despite criticism that the proposed Class I
price adjustments change price relationships between plants, the key
requirement that similarly located plants have similar regulated
minimum prices is maintained.
DFA, et al., analyzed acquisition and distribution costs (Class I
differential plus the cost of transportation) of packaged milk in an
effort to assure the reasonableness of the level of the proposed Class
I price adjustments and determine the effect the proposed adjustments
would have on the competitive relationship among handlers in the
southern region. The record reflects that the proposed Class I
differentials at all locations do not exceed the cost of moving
packaged milk to those same locations. From this analysis it is
concluded that the proposed Class I adjustments will not encourage
uneconomic movements of milk. This method of evaluating the proposed
Class I pricing changes in comparison to packaged milk movement forms a
rational basis to conclude that the proposed changes to Class I pricing
are reasonable.
Record evidence cites specific opposition testimony regarding the
proposed $0.40 per cwt Class I price adjustment at Charleston, WV. This
increase would create a price zone where only one fluid distributing
plant operates, the United Dairy plant in Charleston, WV. DFA, et al.,
claimed that this Class I price adjustment reflects the higher cost of
servicing that plant due to its further distance from potential reserve
supplies. In its post-hearing brief, DFA, et al., clarifies that the
proposed adjustment will align Charleston more properly with the Class
I prices of its competitors located and regulated by the Appalachian
order. DFA derived the proposed $0.40 Class I price adjustment by
taking into account the $0.15 per cwt transportation credit balancing
fund assessment that is charged year-round in the Appalachian order on
Class I milk.
This decision does not find it appropriate to consider the
Appalachian transportation credit balancing fund assessment in
determining needed Class I price adjustments in the Mideast marketing
area. The transportation credits applicable in the Appalachian order,
as asserted by opponents, serve as an economic incentive for needed
supplemental milk supplies and should have no bearing on the
appropriate adjusted Class I price at Charleston, WV.
The United Dairy witness testified at great length regarding the
competitive disadvantage that would be placed on the Charleston, WV,
plant when compared to its nearest competitor--the Dean Foods plant in
Marietta, OH. The United Dairy plant is currently located in the $2.20
zone, while the Dean Foods plant is located in the $2.00 zone. This
means that when competing for sales, the United Dairy plant faces a raw
milk cost that is $0.20 per cwt higher. The proposed Class I price
adjustment would put the United Dairy plant in a $2.60 price zone
(Class I differential plus the Class I price adjustment) and the Dean
Foods plant in a $2.15 zone price, increasing the raw milk cost spread
to $0.45 per cwt.
This decision finds that a $0.40 increase in the Class I price at
Charleston, WV, would unnecessarily change the competitive relationship
between the United Dairy plant and its nearest competitors. While the
record reflects that the cost of transporting milk to Charleston, WV,
is greater than the cost of transportation to other parts of the
marketing area, the record does not justify an increase of $0.40
because of the competitive sales relationship with other plants in the
southern tier of the marketing area. This decision recommends that the
Class I price at Charleston, WV, be increased by $0.20.
The recommended Class I price adjustments are presented in Figure
1. While the Class I differentials in the Mideast marketing area are
not changed in this decision, the Class I price adjustments have been
added to the current Class I differentials for illustrative purposes.
Figure 1 provides a graphic presentation of the combined value of Class
I differentials plus the adjustment values adopted in this decision.
[[Page 1986]]
[GRAPHIC] [TIFF OMITTED] TP14JA09.004
The proposed Class I price adjustments will not result in the
uneconomic movement of milk as asserted by opponents. The proposed
Class I pricing surface provides greater pricing incentives under the
order to transport needed milk from alternative surplus northern
regions to the deficit southern region of the marketing area. The
location value of milk is higher in the southern region because of the
cost involved in transporting milk to locations in that milk-deficit
region. The recommended Class I price adjustments result in a steeper
Class I price surface that correlates with the higher location value
fluid milk has in the southern region of the marketing area.
Opponents argued that the proposed Class I price adjustments will
cause uneconomic movements of milk because milk in the southeastern
orders that is not eligible to receive transportation credits will seek
to serve plants north and west. As discussed above, it is inappropriate
to consider transportation credits in any aspect of adjusting Class I
prices.
Opponents to DFA, et al's., Class I price adjustments asserted that
there is an adequate supply of milk in the order to meet fluid demands.
Record evidence shows that there is an adequate supply of milk in the
order as a whole to meet fluid demand. However, in the deficit southern
region of the Mideast marketing area, there must be sufficient price
incentives provided under the order to encourage the movement of milk
from surplus areas to the deficit area. In this regard, the location
value of milk needs to account for prevailing marketing conditions
which in this proceeding is largely the cost of transportation. The
recommended Class I price adjustments should provide the additional
incentive needed under the order by offsetting a greater portion of the
costs associated with transporting milk longer distances for Class I
use.
Opponents also argued that any increase in the Class I prices will
be distributed to all producers whose milk is pooled on the Mideast
order, and thus there will be no actual incentive to service plants in
the deficit southern region. This argument is misplaced. Blend prices
paid to producers are adjusted to the location to which milk is
delivered. In the Mideast order, the blend price announced each month
is for Cuyahoga County, Ohio, which has a current Class I differential
of $2.00. Producers whose milk is pooled by plants within the $2.00
zone receive the announced blend price. Producers whose milk is
received by plants located outside the $2.00 zone receive the announced
blend price adjusted for the location to which delivered. For example,
a producer whose milk is received at a plant located in the $2.15 zone
will receive the announced blend price plus $0.15. Therefore, producers
delivering milk to plants located in the areas where the Class I prices
are proposed to be increased will receive more for that milk. Producers
supplying plants located outside of the proposed increased zones will
see no change to the prices they receive.
At the hearing, Dean Foods proposed that instead of increasing
Class I prices in the southern region, Class I differentials should be
decreased in the northern regions of the marketing area. Dean argued
that this would accomplish the same goal as the proponents--moving milk
to deficit plants--without increasing costs to consumers through higher
Class I prices.
This decision finds no justification for such an action. The
proposed Class I price adjustments represent the location value of
Class I milk which is largely reflective of the costs of servicing
fluid distributing plants at a particular location. The record of this
proceeding did not examine the location value of milk in the northern
regions of the marketing area and the record contains no evidence to
indicate that the cost of
[[Page 1987]]
servicing plants in the northern regions of the marketing area has
decreased.
Rulings on Proposed Findings and Conclusions
Briefs and proposed findings and conclusions were filed on behalf
of certain interested parties. These briefs, proposed findings and
conclusions and the evidence in the record were considered in making
the findings and conclusions set forth above. To the extent that the
suggested findings and conclusions filed by interested parties are
inconsistent with the findings and conclusions set forth herein, the
requests to make such findings or reach such conclusions are denied for
the reasons previously stated in this decision.
General Findings
The findings and determinations hereinafter set forth supplement
those that were made when the Mideast order was first issued and when
it was amended. The previous findings and determinations are hereby
ratified and confirmed, except where they may conflict with those set
forth herein.
(a) The tentative marketing agreement and the order, as hereby
proposed to be amended, and all of the terms and conditions thereof,
will tend to effectuate the declared policy of the Act;
(b) The parity prices of milk as determined pursuant to Section 2
of the Act are not reasonable in view of the price of feeds, available
supplies of feeds, and other economic conditions which affect market
supply and demand for the milk in the marketing area, and the minimum
prices specified in the tentative marketing agreement and the order, as
hereby proposed to be amended, are such prices as will reflect the
aforesaid factors, insure a sufficient quantity of pure and wholesome
milk, and be in the public interest; and
(c) The tentative marketing agreement and the order, as hereby
proposed to be amended, will regulate the handling of milk in the same
manner as, and will be applicable only to persons in the respective
classes of industrial and commercial activity specified in, the
marketing agreement upon which a hearing has been held.
Recommended Marketing Agreement and Order Amending the Order
The recommended marketing agreement is not included in this
decision because the regulatory provisions thereof would be the same as
those contained in the order, as hereby proposed to be amended. The
following order amending the order, as amended, regulating the handling
of milk in the Mideast marketing area is recommended as the detailed
and appropriate means by which the foregoing conclusions may be carried
out.
List of Subjects in 7 CFR Parts 1000 and 1033
Milk marketing orders.
For the reasons set forth in the preamble, 7 CFR Parts 1000 and
1033, are proposed to be amended as follows:
1. The authority citation for 7 CFR parts 1000 and 1033 continues
to read as follows:
Authority: 7 U.S.C. 601-674, and 7253.
PART 1000--GENERAL PROVISIONS OF FEDERAL MILK MARKETING ORDERS
2. In Sec. 1000.50 paragraphs (b) and (c) are revised to read as
follows:
Sec. 1000.50 Class prices, component prices and advanced pricing
factors.
* * * * *
(b) Class I skim milk price. The Class I skim milk price per
hundredweight shall be the adjusted Class I differential specified in
Sec. 1000.52 plus the adjustment to Class I prices specified in Sec.
1005.51(b), Sec. 1006.51(b), Sec. 1007.51(b) and Sec. 1033.51 (b)
plus the higher of the advanced pricing factors computed in paragraphs
(q)(1) or (2) of this section.
(c) Class I butterfat price. The Class I butterfat price per pound
shall be the adjusted Class I differential specified in Sec. 1000.52
divided by 100, plus the adjustments to Class I prices specified in
Sec. 1005.51(b), Sec. 1006.51(b), Sec. 1007.51(b) and Sec. 1033.51
(b) divided by 100, plus the advanced butterfat price computed in
paragraph (q) (3) of this section.
* * * * *
PARTS 1033--MILK IN THE MIDEAST MARKETING AREA
3. Revise Sec. 1033.51 to read as follows:
Sec. 1033.51 Class I differential, adjustments to Class I prices, and
Class I price.
(a) The Class I differential shall be the differential established
for Cuyahoga County, Ohio, which is reported in Sec. 1000.52. The
Class I price shall be the price computed pursuant to Sec. 1033.50 (a)
for Cuyahoga County Ohio.
(b) Adjustments to Class I prices. Class I prices shall be
established pursuant to Sec. 1000.50(a), (b), and (c) using the
following adjustments:
------------------------------------------------------------------------
Class I
State County/parish FIPS price
adjustment
------------------------------------------------------------------------
IN........................... ADAMS.......... 18001 0.00
IN........................... ALLEN.......... 18003 0.00
IN........................... BARTHOLOMEW.... 18005 0.20
IN........................... BENTON......... 18007 0.00
IN........................... BLACKFORD...... 18009 0.00
IN........................... BOONE.......... 18011 0.15
IN........................... BROWN.......... 18013 0.20
IN........................... CARROLL........ 18015 0.00
IN........................... CASS........... 18017 0.00
IN........................... CLAY........... 18021 0.15
IN........................... CLINTON........ 18023 0.00
IN........................... DE KALB........ 18033 0.00
IN........................... DEARBORN....... 18029 0.20
IN........................... DECATUR........ 18031 0.20
IN........................... DELAWARE....... 18035 0.15
IN........................... ELKHART........ 18039 0.00
IN........................... FAYETTE........ 18041 0.15
IN........................... FOUNTAIN....... 18045 0.00
IN........................... FRANKLIN....... 18047 0.15
IN........................... FULTON......... 18049 0.00
IN........................... GRANT.......... 18053 0.00
IN........................... HAMILTON....... 18057 0.15
[[Page 1988]]
IN........................... HANCOCK........ 18059 0.15
IN........................... HENDRICKS...... 18063 0.15
IN........................... HENRY.......... 18065 0.15
IN........................... HOWARD......... 18067 0.00
IN........................... HUNTINGTON..... 18069 0.00
IN........................... JACKSON........ 18071 0.20
IN........................... JASPER......... 18073 0.00
IN........................... JAY............ 18075 0.00
IN........................... JEFFERSON...... 18077 0.20
IN........................... JENNINGS....... 18079 0.20
IN........................... JOHNSON........ 18081 0.15
IN........................... KOSCIUSKO...... 18085 0.00
IN........................... LA PORTE....... 18091 0.00
IN........................... LAGRANGE....... 18087 0.00
IN........................... LAKE........... 18089 0.00
IN........................... LAWRENCE....... 18093 0.20
IN........................... MADISON........ 18095 0.15
IN........................... MARION......... 18097 0.15
IN........................... MARSHALL....... 18099 0.00
IN........................... MIAMI.......... 18103 0.00
IN........................... MONROE......... 18105 0.20
IN........................... MONTGOMERY..... 18107 0.15
IN........................... MORGAN......... 18109 0.15
IN........................... NEWTON......... 18111 0.00
IN........................... NOBLE.......... 18113 0.00
IN........................... OHIO........... 18115 0.20
IN........................... OWEN........... 18119 0.15
IN........................... PARKE.......... 18121 0.15
IN........................... PORTER......... 18127 0.00
IN........................... PULASKI........ 18131 0.00
IN........................... PUTNAM......... 18133 0.15
IN........................... RANDOLPH....... 18135 0.15
IN........................... RIPLEY......... 18137 0.20
IN........................... RUSH........... 18139 0.15
IN........................... SHELBY......... 18145 0.15
IN........................... ST. JOSEPH..... 18141 0.00
IN........................... STARKE......... 18149 0.00
IN........................... STEUBEN........ 18151 0.00
IN........................... SWITZERLAND.... 18155 0.20
IN........................... TIPPECANOE..... 18157 0.00
IN........................... TIPTON......... 18159 0.00
IN........................... UNION.......... 18161 0.15
IN........................... VERMILLION..... 18165 0.15
IN........................... VIGO........... 18167 0.15
IN........................... WABASH......... 18169 0.00
IN........................... WARREN......... 18171 0.00
IN........................... WAYNE.......... 18177 0.15
IN........................... WELLS.......... 18179 0.00
IN........................... WHITE.......... 18181 0.00
IN........................... WHITLEY........ 18183 0.00
KY........................... BOONE.......... 21015 0.20
KY........................... BOYD........... 21019 0.20
KY........................... BRACKEN........ 21023 0.20
KY........................... CAMPBELL....... 21037 0.20
KY........................... FLOYD.......... 21071 0.20
KY........................... GRANT.......... 21081 0.20
KY........................... GREENUP........ 21089 0.20
KY........................... HARRISON....... 21097 0.20
KY........................... JOHNSON........ 21115 0.20
KY........................... KENTON......... 21117 0.20
KY........................... LAWRENCE....... 21127 0.20
KY........................... LEWIS.......... 21135 0.20
KY........................... MAGOFFIN....... 21153 0.20
KY........................... MARTIN......... 21159 0.20
KY........................... MASON.......... 21161 0.20
KY........................... PENDLETON...... 21191 0.20
KY........................... PIKE........... 21195 0.00
KY........................... ROBERTSON...... 21201 0.20
MI........................... ALCONA......... 26001 0.00
MI........................... ALGER.......... 26003 0.00
MI........................... ALLEGAN........ 26005 0.00
MI........................... ALPENA......... 26007 0.00
MI........................... ANTRIM......... 26009 0.00
[[Page 1989]]
MI........................... ARENAC......... 26011 0.00
MI........................... BARAGA......... 26013 0.00
MI........................... BARRY.......... 26015 0.00
MI........................... BAY............ 26017 0.00
MI........................... BENZIE......... 26019 0.00
MI........................... BERRIEN........ 26021 0.00
MI........................... BRANCH......... 26023 0.00
MI........................... CALHOUN........ 26025 0.00
MI........................... CASS........... 26027 0.00
MI........................... CHARLEVOIX..... 26029 0.00
MI........................... CHEBOYGAN...... 26031 0.00
MI........................... CHIPPEWA....... 26033 0.00
MI........................... CLARE.......... 26035 0.00
MI........................... CLINTON........ 26037 0.00
MI........................... CRAWFORD....... 26039 0.00
MI........................... EATON.......... 26045 0.00
MI........................... EMMET.......... 26047 0.00
MI........................... GENESEE........ 26049 0.00
MI........................... GLADWIN........ 26051 0.00
MI........................... GRAND TRAVERSE. 26055 0.00
MI........................... GRATIOT........ 26057 0.00
MI........................... HILLSDALE...... 26059 0.00
MI........................... HOUGHTON....... 26061 0.00
MI........................... HURON.......... 26063 0.00
MI........................... INGHAM......... 26065 0.00
MI........................... IONIA.......... 26067 0.00
MI........................... IOSCO.......... 26069 0.00
MI........................... ISABELLA....... 26073 0.00
MI........................... JACKSON........ 26075 0.00
MI........................... KALAMAZOO...... 26077 0.00
MI........................... KALKASKA....... 26079 0.00
MI........................... KENT........... 26081 0.00
MI........................... KEWEENAW....... 26083 0.00
MI........................... LAKE........... 26085 0.00
MI........................... LAPEER......... 26087 0.00
MI........................... LEELANAU....... 26089 0.00
MI........................... LENAWEE........ 26091 0.00
MI........................... LIVINGSTON..... 26093 0.00
MI........................... LUCE........... 26095 0.00
MI........................... MACKINAC....... 26097 0.00
MI........................... MACOMB......... 26099 0.00
MI........................... MANISTEE....... 26101 0.00
MI........................... MARQUETTE...... 26103 0.00
MI........................... MASON.......... 26105 0.00
MI........................... MECOSTA........ 26107 0.00
MI........................... MIDLAND........ 26111 0.00
MI........................... MISSAUKEE...... 26113 0.00
MI........................... MONROE......... 26115 0.00
MI........................... MONTCALM....... 26117 0.00
MI........................... MONTMORENCY.... 26119 0.00
MI........................... MUSKEGON....... 26121 0.00
MI........................... NEWAYGO........ 26123 0.00
MI........................... OAKLAND........ 26125 0.00
MI........................... OCEANA......... 26127 0.00
MI........................... OGEMAW......... 26129 0.00
MI........................... OSCEOLA........ 26133 0.00
MI........................... OSCODA......... 26135 0.00
MI........................... OTSEGO......... 26137 0.00
MI........................... OTTAWA......... 26139 0.00
MI........................... PRESQUE ISLE... 26141 0.00
MI........................... ROSCOMMON...... 26143 0.00
MI........................... SAGINAW........ 26145 0.00
MI........................... SANILAC........ 26151 0.00
MI........................... SCHOOLCRAFT.... 26153 0.00
MI........................... SHIAWASSEE..... 26155 0.00
MI........................... ST. CLAIR...... 26147 0.00
MI........................... ST. JOSEPH..... 26149 0.00
MI........................... TUSCOLA........ 26157 0.00
MI........................... VAN BUREN...... 26159 0.00
MI........................... WASHTENAW...... 26161 0.00
MI........................... WAYNE.......... 26163 0.00
MI........................... WEXFORD........ 26165 0.00
OH........................... ADAMS.......... 39001 0.20
[[Page 1990]]
OH........................... ALLEN.......... 39003 0.00
OH........................... ASHLAND........ 39005 0.00
OH........................... ASHTABULA...... 39007 0.00
OH........................... ATHENS......... 39009 0.15
OH........................... AUGLAIZE....... 39011 0.00
OH........................... BELMONT........ 39013 0.00
OH........................... BROWN.......... 39015 0.20
OH........................... BUTLER......... 39017 0.15
OH........................... CARROLL........ 39019 0.00
OH........................... CHAMPAIGN...... 39021 0.00
OH........................... CLARK.......... 39023 0.15
OH........................... CLERMONT....... 39025 0.20
OH........................... CLINTON........ 39027 0.15
OH........................... COLUMBIANA..... 39029 0.00
OH........................... COSHOCTON...... 39031 0.00
OH........................... CRAWFORD....... 39033 0.00
OH........................... CUYAHOGA....... 39035 0.00
OH........................... DARKE.......... 39037 0.15
OH........................... DEFIANCE....... 39039 0.00
OH........................... DELAWARE....... 39041 0.00
OH........................... FAIRFIELD...... 39045 0.15
OH........................... FAYETTE........ 39047 0.15
OH........................... FRANKLIN....... 39049 0.15
OH........................... FULTON......... 39051 0.00
OH........................... GALLIA......... 39053 0.20
OH........................... GEAUGA......... 39055 0.00
OH........................... GREENE......... 39057 0.15
OH........................... GUERNSEY....... 39059 0.15
OH........................... HAMILTON....... 39061 0.20
OH........................... HANCOCK........ 39063 0.00
OH........................... HARDIN......... 39065 0.00
OH........................... HARRISON....... 39067 0.00
OH........................... HENRY.......... 39069 0.00
OH........................... HIGHLAND....... 39071 0.20
OH........................... HOCKING........ 39073 0.15
OH........................... HOLMES......... 39075 0.00
OH........................... JACKSON........ 39079 0.20
OH........................... JEFFERSON...... 39081 0.00
OH........................... KNOX........... 39083 0.00
OH........................... LAKE........... 39085 0.00
OH........................... LAWRENCE....... 39087 0.20
OH........................... LICKING........ 39089 0.15
OH........................... LOGAN.......... 39091 0.00
OH........................... LORAIN......... 39093 0.00
OH........................... LUCAS.......... 39095 0.00
OH........................... MADISON........ 39097 0.15
OH........................... MAHONING....... 39099 0.00
OH........................... MARION......... 39101 0.00
OH........................... MEDINA......... 39103 0.00
OH........................... MEIGS.......... 39105 0.15
OH........................... MERCER......... 39107 0.00
OH........................... MIAMI.......... 39109 0.15
OH........................... MONROE......... 39111 0.15
OH........................... MONTGOMERY..... 39113 0.15
OH........................... MORGAN......... 39115 0.15
OH........................... MORROW......... 39117 0.00
OH........................... MUSKINGUM...... 39119 0.15
OH........................... NOBLE.......... 39121 0.15
OH........................... PAULDING....... 39125 0.00
OH........................... PERRY.......... 39127 0.15
OH........................... PICKAWAY....... 39129 0.15
OH........................... PIKE........... 39131 0.20
OH........................... PORTAGE........ 39133 0.00
OH........................... PREBLE......... 39135 0.15
OH........................... PUTNAM......... 39137 0.00
OH........................... RICHLAND....... 39139 0.00
OH........................... ROSS........... 39141 0.15
OH........................... SANDUSKY....... 39143 0.00
OH........................... SCIOTO......... 39145 0.20
OH........................... SENECA......... 39147 0.00
OH........................... SHELBY......... 39149 0.00
OH........................... STARK.......... 39151 0.00
OH........................... SUMMIT......... 39153 0.00
[[Page 1991]]
OH........................... TRUMBULL....... 39155 0.00
OH........................... TUSCARAWAS..... 39157 0.00
OH........................... UNION.......... 39159 0.00
OH........................... VAN WERT....... 39161 0.00
OH........................... VINTON......... 39163 0.15
OH........................... WARREN......... 39165 0.15
OH........................... WASHINGTON..... 39167 0.15
OH........................... WAYNE.......... 39169 0.00
OH........................... WILLIAMS....... 39171 0.00
OH........................... WOOD........... 39173 0.00
OH........................... WYANDOT........ 39175 0.00
PA........................... ALLEGHENY...... 42003 0.00
PA........................... ARMSTRONG...... 42005 0.00
PA........................... BEAVER......... 42007 0.00
PA........................... BUTLER......... 42019 0.00
PA........................... CLARION........ 42031 0.00
PA........................... CRAWFORD....... 42039 0.00
PA........................... ERIE........... 42049 0.00
PA........................... FAYETTE........ 42051 0.00
PA........................... GREENE......... 42059 0.00
PA........................... LAWRENCE....... 42073 0.00
PA........................... MERCER......... 42085 0.00
PA........................... VENANGO........ 42121 0.00
PA........................... WASHINGTON..... 42125 0.00
PA........................... WESTMORELAND... 42129 0.00
WV........................... BARBOUR........ 54001 0.00
WV........................... BOONE.......... 54005 0.20
WV........................... BROOKE......... 54009 0.00
WV........................... CABELL......... 54011 0.20
WV........................... CALHOUN........ 54013 0.20
WV........................... DODDRIDGE...... 54017 0.00
WV........................... FAYETTE........ 54019 0.20
WV........................... GILMER......... 54021 0.20
WV........................... HANCOCK........ 54029 0.00
WV........................... HARRISON....... 54033 0.00
WV........................... JACKSON........ 54035 0.20
WV........................... KANAWHA........ 54039 0.20
WV........................... LEWIS.......... 54041 0.00
WV........................... LINCOLN........ 54043 0.20
WV........................... LOGAN.......... 54045 0.20
WV........................... MARION......... 54049 0.00
WV........................... MARSHALL....... 54051 0.00
WV........................... MASON.......... 54053 0.20
WV........................... MINGO.......... 54059 0.20
WV........................... MONONGALIA..... 54061 0.00
WV........................... OHIO........... 54069 0.00
WV........................... PLEASANTS...... 54073 0.20
WV........................... PRESTON........ 54077 0.00
WV........................... PUTNAM......... 54079 0.20
WV........................... RALEIGH........ 54081 0.20
WV........................... RANDOLPH....... 54083 0.00
WV........................... RITCHIE........ 54085 0.20
WV........................... ROANE.......... 54087 0.20
WV........................... TAYLOR......... 54091 0.00
WV........................... TUCKER......... 54093 0.00
WV........................... TYLER.......... 54095 0.00
WV........................... UPSHUR......... 54097 0.00
WV........................... WAYNE.......... 54099 0.20
WV........................... WETZEL......... 54103 0.00
WV........................... WIRT........... 54105 0.20
WV........................... WOOD........... 54107 0.20
WV........................... WYOMING........ 54109 0.20
------------------------------------------------------------------------
[[Page 1992]]
Dated: January 8, 2009.
James E. Link,
Administrator, Agricultural Marketing Service.
[FR Doc. E9-607 Filed 1-13-09; 8:45 am]
BILLING CODE 3410-02-P