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ers delivering Grade A milk) for receipts (b) If any water contained in the milk during the preceding month which shall from which a product is made is removed show:

before the product is utilized or disposed (a) The total pounds of milk, the of by the handler, the pounds of skim average butterfat test thereof, and the milk utilized or disposed of in such prodpounds of butterfat received from each uct shall be considered to be a quantity producer and cooperative association and equivalent to the nonfat milk solids conthe number of days on which milk was tained in such product plus all the water received from such producer;

originally associated with such solids. (b) The amount of payment to each

§ 1060.41 Classes of utilization.
producer and cooperative association;
and

Subject to the conditions set forth in
(c) The nature and amount of any $ $ 1060.42 through 1060.46, the classes of
deductions or charges involved in such utilization shall be as follows:
payments.

(a) Class I milk. Class I milk shall be

all skim milk (including that used to pro§ 1060.37 Other reports.

duce reconstituted skim milk) and (a) Each producer-handler and each butterfat: handler making payments pursuant to (1) Disposed of in the form of a fluid § 1060.62(b) shall make reports to the milk product except: market administrator at such time and in (i) Fluid milk products classified as such manner as the market adminis- Class II pursuant to paragraph (b) (2) trator may prescribe:

and (3) of this section; (b) Each handler pursuant to § 1060.10 (ii) Fluid milk products which are (c) shall report to the market adminis- fortified with nonfat milk solids shall trator in detail and on forms prescribed be Class I in an amount equal only to by the market administrator on or before the weight of an equal volume of an unthe 7th day after the end of each month fortified product of the same butterfat the quantities of skim milk and butter- content; fat in producer milk delivered to each (2) Contained in inventory of packpool plant in such month and all other aged fluid milk products on hand at the producer milk for which it is a handler; end of the month; and

(c) Each handler who receives milk (3) Not accounted for as Class II milk: from producers, payment for which is to (b) Class II milk. Class II milk shall be made to a cooperative association pur- be: suant to 1060.80(b), shall report to such (1) Skim milk and butterfat used to cooperative association with respect to produce any product other than a fluid each such producer, on forms approved milk product: by the market administrator, as follows: (2) Skim milk and butterfat disposed

(1) On or before the 20th day of the of: month, the total pounds of milk received (i) For livestock feed; or during the first 15 days of the month; (ii) Dumped after prior notification

(2) On or before the seventh day after to and opportunity for verification by the the end of the month:

market administrator; (1) The pounds per shipment, the total (3) The weight of skim milk in any pounds of milk and the average butterfat fortified fluid milk product in excess of test of milk received from such producer the pounds classified as Class I milk during the month;

pursuant to paragraph (a) (1) (ii) of (ii) The amount or rate and nature of this section; any deductions, and

(4) In inventory of bulk fluid milk (iii) The amount of any payments to products on hand at the end of the such producer pursuant to § 1060.86. month;

(5) Skim milk and butterfat, respecCLASSIFICATION OF MILK

tively, in actual shrinkage at each pool § 1060.40 Skim milk and butterfat to plant allocated pursuant to § 1060.42(b) be classified.

(1) but not in excess of: (a) The skim milk and butterfat (i) Two percent of producer milk exwhich are required to be reported pur

cept that received from a handler pursuant to § 1060.35 and § 1060.37(b) shall

suant to § 1060.10(c) or diverted pursube classified each month by the market

ant to § 1060.16 to a nonpool plant; administrator pursuant to the provisions (ii) Plus 1.5 percent of milk received of $$ 1060.41 through 1060.46; and

in bulk tank lots from other pool plants;

66–018-72

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(iii) Plus 1.5 percent of producer milk the amount thereof remaining in such received from a handler pursuant to class in the transferee plant after com§ 1060.10(c), except that if the handler putations pursuant to § 1060.46(a) (9) operating the pool plant files notice with and the corresponding step of § 1060.46 the market administrator that the pur

(b); chase of such milk is on the basis of (2) If the transferor handler received farm tests and weights determined by during the month other source milk to farm bulk tank calibrations, the appli- be allocated pursuant to § 1060.46(a) (4) cable percentage shall be two percent; and the corresponding step of $ 1060.46

(iv) Plus 1.5 percent of milk received (b), the skim milk and butterfat so in bulk tank lots from other order plants transferred shall be classified so as to exclusive of the quantity for which Class allocate the least possible Class I utilizaII utilization was requested by the opera

tion to such other source milk; and tors of both plants;

(3) If the transferor handler received (V) Plus 1.5 percent of milk in bulk during the month other source milk to tank lots from unregulated supply plants, be allocated pursuant to $ 1060.46 (a) exclusive of the quantity for which Class (8) or (9) and the corresponding steps II utilization was requested by the han- of § 1060.46(b), the skim milk and butdler;

terfat so transferred up to the total of (vi) Less 1.5 percent of milk in bulk

such receipts shall not be classified as tank lots transferred from pool plants to

Class I milk to a greater extent than other plants; and

would be applicable to a like quantity of (vii) Plus 0.5 percent of milk received

such other source milk received at the by a cooperative handler pursuant to transferee plant, if such classification § 1060.10 (b) and (c) from producers

would change the classification of proas determined by farm tests and weights

ducer milk on the market or the classifimeasured by farm bulk tank calibrations,

cation of such other source milk received unless the exception in subparagraph (5)

by the transferor handler during the

month; (iii) of this paragraph applies; and (6) Skim milk and butterfat in

(b) As Class I milk, if transferred shrinkage allocated pursuant to § 1060.

from a pool plant to a producer-handier 42(b) (2).

or to an exempt government institution

as defined in § 1060.60; § 1060.42 Shrinkage.

(c) As Class I if transferred from a The market administrator shall allo- pool plant in packaged form to a noncate shrinkage over a handler's receipts pool plant that is neither an other order at each pool plant as follows:

plant nor a producer-handler plant; (a) Compute the total shrinkage of (d) As Class I milk, if transferred or skim milk and butterfat, respectively, diverted to a nonpool plant that is for each handler at each plant; and neither an other order plant nor a

(b) Prorate the resulting amounts producer-handler plant and is located among the receipts of skim milk and more than 300 miles by shortest highbutterfat contained in:

way distance as determined by the mar(1) The net quantity of producer milk ket administrator, from the nearer of the and other milk specified in § 1060,41 city halls of Fargo or Grand Forks, (b) (5) (except milk diverted to a non- N. Dak., except that cream so transferred pool plant pursuant to § 1060.15); and may be classified as Class II if the han

(2) Other source milk exclusive of dler claims classification of such cream that specified in § 1060.41(b) (5).

in Class II in his report pursuant to

§ 1060.35, the handler tags the container § 1060.44 Transfers.

of such cream as for manufacturing purSkim milk or butterfat in the form of

poses only (and so noticed on invoice), a fluid milk product shall be classified: and the handler gives the market ad

(a) At the utilization indicated by the ministrator sufficient notice to allow him transferee and transferor handlers in to verify the shipment; their reports pursuant to $ 1060.35, (e) As Class I milk if transferred or otherwise as Class I milk, if transferred diverted in bulk to a nonpool plant that from a pool plant to another pool plant is neither an other order plant nor a prosubject in either event to the following ducer-handler plant and is not more than conditions:

300 miles by shortest highway distance as (1) The skim milk or butterfat so as- determined by the market administrator signed to either class shall be limited to from the nearer of the city halls of

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Fargo or Grand Forks, N. Dak., unless pro rata to unassigned receipts at such the requirements of subparagraphs (1) nonpool plant from all pool and other and (2) of this paragraph are met, in order plants; which case the skim milk and butterfat (iv) To the extent that Class I utiliso transferred or diverted shall be classi- zation is not so assigned to it the skim fied in accordance with the assignment milk and butterfat so transferred or diresulting from subparagraph (3) of this verted shall be classified as Class II milk; paragraph:

(V) If any skim milk or butterfat is (1) The transferring or diverting han- transferred to a second nonpool plant dler claims classification pursuant to the under this paragraph, the same condiassignment set forth in subparagraph tions of audit, classification and alloca(3) of this paragraph in his report sub- tion shall apply; mitted to the market administrator pur- (f) As follows, if transferred to an suant to $ 1060.35 for the month within other order plant in excess of receipts which such transaction occurred;

from such plant in the same category as (2) The operator of such nonpool described in subparagraph (1), (2), or plant maintains books and records show- (3) of this paragraph: ing the utilization of all skim milk and (1) If transferred in packaged form, butterfat received at such plant which classification shall be in the classes to are made available if requested by the which allocated as a fluid milk product market administrator for the purpose under the other order; of verification; and

(2) If transferred in bulk form, classi(3) The skim milk and butterfat so fication shall be in the classes to which transferred or diverted shall be classi- allocated as a fluid milk product under fied on the basis of the following assign- the other order (including allocation ment of utilization at such nonpool plant under the conditions set forth in subin excess of receipts of packaged fluid paragraph (3) of this paragraph); milk products from all pool plants and (3) If the operators of both the transother order plants;

feror and transferee plants so request (i) Any Class I utilization disposed of in the reports of receipts and utilization on routes in the marketing area shall be filed with their respective market adminfirst assigned to the skim milk and but- istrators, transfers in bulk form shall be terfat in the fluid milk products so trans- classified as Class II to the extent of the ferred or diverted from pool plants, next Class II utilization (or comparable utilpro rata to receipts from other order zation under such other order) available plants and thereafter to receipts from for such assignment pursuant to the allodairy farmers who the market admin- cation provisions of the transferee order; istrator determines constitute regular (4) If information concerning the sources of supply of Grade A milk for classification to which allocated under such nonpool plant;

the other order is not available to the (ii) Any Class I utilization disposed of

market administrator for purposes of on routes in the marketing area of

establishing classification pursuant to another order issued pursuant to the Act this paragraph, classification shall be as shall be first assigned to receipts from Class I subject to adjustment when such plants fully regulated by such order,

information is available; next pro rata to receipts from pool (5) For purposes of this paragraph, if plants and other order plants not regu

the transferee order provides for more lated by such order, and thereafter to than two classes of utilization, skim receipts from dairy farmers who the milk and butterfat allocated to a class market administrator determines con

consisting primarily of fluid milk prodstitute regular sources of supply for such

ucts shall be classified as Class I and nonpool plant;

skim milk and butterfat allocated to (iii) Class I utilization in excess of

other classes shall be classified as Class that assigned pursuant to subdivisions

II; and

(6) If the form in which any fluid (i) and (ii) of this subparagraph shall be assigned first to remaining receipts

milk product is transferred to another from dairy farmers who the market ad

order plant is not defined as a fluid milk

product under such other order, classiministrator determines constitute the fication shall be in accordance with the regular source of supply for such nonpool plant and Class I utilization in ex

provisions of $ 1060.41.

(32 F.R. 13703, Sept. 30, 1967, as amended at cess of such receipts shall be assigned 34 F.R. 18659, Nov. 22, 1969)

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§ 1060.45 Computation of skim milk and (iv) Receipts of reconstituted skim butterfat in each class.

milk in filled milk from unregulated supFor each month the market adminis

ply plants; and trator shall correct for mathematical and

(V) Receipts of reconstituted skim for other obvious errors the reports of

milk in filled milk from other order receipts and utilization submitted pur

plants which are regulated under an orsuant to § 1060.35 by each handler and

der providing for individual handler shall compute the pounds of skim milk

pooling, to the extent that reconstituted and butterfat in each class at all pool

skim milk is allocated to Class I at the plants of such handler. Allocation pur

transferor plant; suant to § 1060.46 and computation of

(5) Subtract, in the order specified obligations pursuant to § 1060.70 shall be

below, from the pounds of skim milk rebased upon the combined utilization so

maining in Class II, but not in excess of computed.

such quantity:

(i) The pounds of skim milk in re§ 1060.46 Allocation of skim milk and

ceipts of fluid milk products from an unbutterfat classified.

regulated supply plant that were not subAfter making the computations pur- tracted pursuant to subparagraph (4) suant to § 1060.45, the market admin- (iv) of this paragraph; istrator shall determine the classification (a) For which the handler requests of producer milk for each handler as

Class II utilization; or follows:

(b) The pounds of skim milk in re(a) Skim milk shall be allocated in the ceipts which are in excess of the pounds following manner:

of skim milk determined by subtracting (1) Subtract from the total pounds of from 125 percent of the pounds of skim skim milk in Class II the pounds of skim milk remaining in Class I milk (exclusive milk classified as Class II pursuant to of transfers between pool plants of the § 1060.41(b) (5);

same handler) the sum of the pounds of (2) Subtract from the pounds of skim skim milk in producer milk, receipts of milk in each class the pounds of skim fluid milk products from pool plants of milk in fluid milk products received in other handlers, and receipts of fluid milk packaged form from other order plants, products in bulk from other order plants except that to be subtracted pursuant that were not subtracted pursuant to to subparagraph (4) (v) of this para- subparagraph (4) (v) of this paragraph; graph, as follows:

and (i) From Class II milk, the lesser of (ii) The pounds of skim milk in rethe pounds remaining or 2 percent of ceipts of fluid milk products in bulk from such receipts; and

an other order plant that were not sub(ii) From Class I milk, the remainder

tracted pursuant to subparagraph (4) of such receipts;

(v) of this paragraph, in excess of similar (3) Subtract from the remaining

transfers to such plant, if Class II utilipounds of skim milk in Class I, the

zation was requested by the operator of pounds of skim milk in inventory of

such plant and the transferee handler packaged fluid milk products on hand at the beginning of the month;

but not in excess of the pounds of skim (4) Subtract in the order specified

milk remaining in Class II milk; below from the pounds of skim milk re- (6) Subtract from the pounds of skim maining in each class, in series begin- milk remaining in each class, in series ning with Class II, the pounds of skim beginning with Class II, the pounds of milk in each of the following:

skim milk in inventory of fluid milk (i) Other source milk in a form other

products in bulk on hand at the beginthan that of a fluid milk product;

ning of the month; (ii) Receipts of fluid milk products

(7) Add to the remaining pounds of (except filled milk) for which Grade A

skim milk in Class II milk the pounds certification is not established, and

subtracted pursuant to subparagraph (1) receipts of fluid milk products from un

of this paragraph; identified sources;

(8) Subtract from the pounds of skim (iii) Receipts of fluid milk products

milk remaining in each class, pro rata from a producer-handler, as defined under this or any other Federal order, and to such quantities, the pounds of skim from exempt institutions as defined in milk in receipts of fluid milk products § 1060.60(b);

from unregulated supply plants which

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were not subtracted pursuant to sub- times the Chicago butter price for the paragraphs (4) (iv) or (5) (i) of this month. The resulting price shall be paragraph;

rounded to the nearest full cent. For the
(9) Subtract from the pounds of skim purpose of computing Class I prices from
milk remaining in each class, in the fol- the effective date hereof through April
lowing order, the pounds of skim milk in 1969, the basic formula price shall not be
receipts of fluid milk products in bulk less than $4.33.
from other order plant(s), in excess in (32 F.R. 13703, Sept. 30, 1967, as amended at
each case of similar transfers to the same 33 F.R. 6522, Apr. 30, 1968]
plant, which were not subtracted pur-

§ 1060.51 Class prices.
suant to subparagraphs (4) (v) or (5)
(ii) of this paragraph;

Subject to the provisions of $$ 1060.52
(i) In series beginning with Class II, and 1060.53, the minimum class prices
the pounds determined by multiplying per hundredweight of milk for the month
the pounds of such receipts by the larger shall be as follows:
of the percentage of estimated Class II (a) Class I price. The price for Class
utilization of skim milk announced for

I milk shall be the basic formula price the month by the market administrator

for the preceding month plus $1.10, and pursuant to § 1060.32(1) or the percent- plus 20 cents. age that Class II utilization remaining

(b) Class II price. The price for Class is of the total remaining utilization of

II milk shall be the basic formula price. skim milk of the handler; and

[32 F.R. 13703, Sept. 30, 1967, as amended at (ii) From Class I milk, the remaining

34 F.R. 14823, Sept. 26, 19691 pounds of such receipts;

$ 1060.52 Butterfat differentials to han(10) Subtract from the pounds of skim dlers. milk remaining in each class the pounds

For milk containing more or less than of skim milk received in fluid milk prod

3.5 percent butterfat, the class prices for ucts from pool plants of other handlers

the month pursuant to § 1060.51 shall be according to the classification assigned increased or decreased, respectively, for pursuant to § 1060.44(a); and

each one-tenth percent butterfat at a (11) If the pounds of skim milk re- rate rounded to the nearest one-tenth maining in both classes exceed the cent determined as follows: pounds of skim milk in producer milk,

(a) Class I price. Multiply the Chicago subtract such excess from the pounds of

butter price for the preceding month by skim milk remaining in each class in

0.120; series beginning with Class II. Any

(b) Class II price. Multiply the Chicago amount so subtracted shall be known as

butter price for the month by 0.115. "overage”;

§ 1060.53 Location differentials to han(b) Butterfat shall be allocated in ac

dlers.
cordance with the procedure outlined for
skim milk in paragraph (a) of this sec-

(a) For producer milk received at a

pool plant or diverted to a nonpool plant tion, and

located outside the base zone and classi(c) Combine the amounts of skim milk fied as Class I milk or assigned Class I and butterfat determined pursuant to location adjustment credit pursuant to paragraphs (a) and (b) of this section paragraph (b) of this section and for into one total for each class and deter- other source milk for which a location mine the weighted average butterfat adjustment is applicable, the price comcontent of producer milk in each class.

puted pursuant to $ 1060.51(a) shall be (34 F.R. 18659, Nov. 22, 1969)

adjusted 1.2 cents for each 10 road miles

or fraction thereof that such plant is MINIMUM PRICES

located beyond the perimeter of the base § 1060.50 Basic formula price.

zone.

(b) For the purposes of calculating The basic formula price shall be the such adjustments: average price per hundredweight for (1) All distances shall be by shortest manufacturing grade milk, f.o.b. plants hard-surfaced highways and/or allin Wisconsin and Minnesota, as reported

weather-roads, as determined by the by the U.S. Department of Agriculture market administrator; for the month. Such price shall be ad- (2) The adjustment pursuant to this justed to a 3.5 percent butterfat basis by section shall be added to the Class I a butterfat differential rounded to the price if the plant is located in North nearest one-tenth cent computed at 0.12 or South Dakota and shall be subtracted

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