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handler who has received fluid milk products from an other order plant, the classification to which such receipts are allocated pursuant to § 1061.46 pursuant to such report and thereafter any change in such allocation required to correct errors disclosed in verification of such report;

(1) Furnish to each handler operating a pool plant who has shipped fluid milk products to an other order plant, the classification to which the skim milk and butterfat in such fluid milk products were allocated by the market administrator of the other order on the basis of the report of the receiving handler and as necessary, any changes in such classification arising in the verification of such report;

(m) on or before the 20th day of each month, report to each cooperative association which so requests the amount and class utilization of milk received by each handler during the immediately preceding month from such cooperative association in its capacity as a handler pursuant to § 1061.13 (c) and directly from members of such cooperative association. For the purpose of this report, the milk so received shall be prorated to each class in proportion to the utilization by such handler in each class remaining after allocation pursuant to § 1061.46 (a) (1) through (10) and the corresponding steps of § 1061.46 (b). [34 F.R. 5909, Mar. 29, 1969, as amended at 36 F.R. 4777, Mar. 12, 1971; 36 F.R. 9851, May 29, 1971]

§ 1061.30

REPORTS

Monthly reports of receipts and utilization.

On or before the eighth day after the end of each month each handler who operates a pool plant shall report to the market administrator in the detail and on forms prescribed by the market administrator for each of his pool plants as follows:

(a) The quantities of skim milk and butterfat contained in or represented by:

(1) Milk received from producers including milk received from farms and diverted pursuant to § 1061.17 for such handler's account;

(2) Producer milk received from handlers pursuant to § 1061.13(c);

(3) Fluid milk products received from other pool plants;

(4) Other source milk; and

(5) Inventories of fluid milk products at the beginning and end of the month, showing separately the quantities in bulk and in packages;

(b) The utilization of all skim milk and butterfat required to be reported pursuant to this section, including a separate statement showing the respective amounts of skim milk and butterfat disposed of as route disposition inside and outside the marketing area that are classified as Class I; and

(c) Such other information with respect to the receipts and utilization of skim milk and butterfat as the market administrator may prescribe.

[34 F.R. 5909, Mar. 29, 1969, as amended at 36 F.R. 4778, Mar. 12, 1971]

§ 1061.31 Other reports.

(a) Each producer-handler and each handler who operates an other order plant shall report the receipts and disposition of skim milk and butterfat at such plant at such time and in such manner as the market administrator may require.

(b) Each handler pursuant to § 1061. 13 (b) and (c) shall report to the market administrator on or before the eighth day after the end of the month in detail and on forms prescribed by the market administrator, the total quantity of skim milk and butterfat in milk received by such handler from all producer member farms for which it is the handler pursuant to § 1061.13 (b) and (c); and

(1) For milk for which it is the handler pursuant to § 1061.13(b), report the quantities of skim milk and butterfat in milk diverted for its account during the month from each pool plant and the utilization of such skim milk and butterfat; and

(2) For milk for which it is the handler pursuant to § 1061.13 (c), report the quantities of skim milk and butterfat in milk delivered to each pool plant during the month.

(c) Each handler operating a partially regulated distributing plant shall report for each such plant the information required of pool plant operators pursuant to § 1061.30 substituting receipts from dairy farmers for producer milk.

(d) Each handler receiving milk from producers' farms shall report to the market administrator in detail and on forms prescribed by the market administrator on or before the 25th day after the end

of the month his producer payroll for such month which shall show for each producer:

(1) His identity;

(2) The quantity of milk received from such producer and the number of days on which milk was received from such producer;

(3) The average butterfat content of such milk; and

(4) The net amount of such handler's payment together with the price paid and the amount and nature of any deductions.

CLASSIFICATION OF MILK

§ 1061.40 Skim milk and butterfat to be classified.

(a) The skim milk and butterfat which are required to be reported pursuant to §§ 1061.30 and 1061.31 shall be classified each month by the market administrator pursuant to the provisions of §§ 1061.41 through 1061.46; and

(b) If any water contained in the milk from which a product is made is removed before the product is utilized or disposed of by the handler, the pounds of skim milk utilized or disposed of in such product shall be considered to be a quantity equivalent to the nonfat milk solids contained in such product plus all the water originally associated with such solids.

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Subject to the conditions set forth in §§ 1061.42 through 1061.46, inclusive, the classes of utilization shall be as follows:

(a) Class I milk. Class I milk shall be all skim milk and butterfat:

(1) Disposed of as a fluid milk product except as provided in subparagraphs (2), (3), and (4) of paragraph (b);

(2) In inventory of fluid milk products in packaged form on hand at the end of the month; and

(3) Not accounted for as Class II milk; (b) Class II milk. Class II milk shall be all skim milk and butterfat:

(1) Used to produce butter, butteroil, anhydrous milkfat, plain or sweetened condensed milk or skim milk, and condensed buttermilk; nonfat dry milk, dry whole milk, dried buttermilk, dried whey, and blends of dried milk products including dry ice cream mix; cheese and cheese foods; ice cream, ice milk and frozen desserts including mixes for freezing; sterile products in hermetically sealed metal or glass containers;

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(2) Represented by the nonfat milk solids added to a fluid milk product which is in excess of the weight of an equivalent volume of the fluid milk product prior to such addition;

(3) Disposed of in bulk in the form of a fluid milk product to any commercial food processing establishment where food products are prepared only for consumption off the premises;

(4) Dumped or disposed of for animal

feed;

(5) In inventory of bulk fluid milk products on hand at the end of the month;

(6) In shrinkage of the skim milk and butterfat, respectively, assigned pursuant to § 1061.42(a) but not in excess of:

(1) Two percent of producer milk described in § 1061.16 (a) and producer milk diverted pursuant to § 1061.17(b) by a pool plant operator;

(ii) Plus 1.5 percent of milk received in bulk tank lots from other pool plants;

(iii) Plus 1.5 percent of producer milk described in § 1061.16(b) except that if the handler operating the pool plant files notice with the market administrator that he is purchasing such milk on the basis of farm weights, the applicable percentage shall be 2 percent;

(iv) Plus 1.5 percent of milk received in bulk tank lots from other order plants exclusive of the quantity for which Class II use was requested by the operators of both plants;

(v) Plus 1.5 percent of milk in bulk tank lots from unregulated supply plants exclusive of the quantity for which Class II utilization was requested by the handler;

(vi) Less 1.5 percent of milk in bulk tank lots transferred from pool plants to other plants; and

(vii) Less 1.5 percent of producer milk diverted pursuant to § 1061.17(b) except that if the operator of the plant to which the milk is diverted accounts for such milk on the basis of farm weights, the applicable percentage shall be 2 percent;

(7) In shrinkage of skim milk and butterfat allocated pursuant to § 1061.42 (b); and

(8) In shrinkage of skim milk and butterfat, respectively, resulting from milk for which the cooperative association is the handler pursuant to § 1061.13 (b) and (c) not being delivered to nonpool plants and pool plants, but not in excess of one-half percent of the quantity received by the cooperative association from producers as determined by

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Skim milk or butterfat transferred in the form of a fluid milk product from a pool plant to another plant or diverted in such form to a nonpool plant shall be classified:

(a) At the utilization indicated by the operators of both plants, otherwise as Class I milk, if transferred from a pool plant to the pool plant of another handler, subject in either event to the following conditions:

(1) The skim milk or butterfat so assigned to either class shall be limited to the amount thereof remaining in such class in the transferee plant after computations pursuant to § 1061.46 (a) (9) and the corresponding step of (b);

(2) If the transferor plant received during the month other source milk to be allocated pursuant to § 1061.46 (a) (4) and the corresponding step of (b), the skim milk and butterfat so transferred shall be classified so as to allocate the least possible Class I utilization to such other source milk; and

(3) If the transferor handler received during the month other source milk to be allocated pursuant to § 1061.46 (a) (8) or (9) and the corresponding steps of § 1061.46 (b), the skim milk and butterfat so transferred up to the total of such receipts shall not be classified as Class I milk to a greater extent than would be applicable to a like quantity of such other source milk received at the transferee plant;

(b) As Class I milk, if transferred from a pool plant to a producer-handler;

(c) As Class I milk if transferred from a pool plant in packaged form to a nonpool plant that is not an other order plant;

(d) As Class I milk if transferred or diverted in bulk to a nonpool plant that

is not an other order plant, a producerhandler plant or an exempt governmental plant unless the requirements of subparagraphs (1) and (2) of this paragraph are met, in which case the skim milk and butterfat so transferred or diverted shall be classified in accordance with the assignment resulting from subparagraph (3) of this paragraph:

(1) The transferring or diverting handler claims classification in Class II in his report submitted pursuant to § 1061.30 or § 1061.31;

(2) The operator of such nonpool plant maintains books and records showing the utilization of all skim milk and butterfat received at such plant which are made available if requested by the market administrator for the purpose of verification:

(3) The skim milk and butterfat so transferred or diverted shall be classified on the basis of the following assignment of utilization at such nonpool plant in excess of receipts of packaged fluid milk products from all pool plants and other order plants:

(i) Any route disposition in the marketing area, then any transfers from such nonpool plant to pool plants which are assigned to Class I pursuant to § 1061.46 (a) (8) and the corresponding step of § 1061.46(b), shall be assigned first to the skim milk and butterfat in fluid milk products so transferred or diverted from pool plants, and thereafter pro rata to such receipts from other order plants;

(ii) Any route disposition in the marketing area of another order issued pursuant to the Act, then any transfers from such nonpool plant to an other order plant which are assigned to Class I pursuant to the provisions of such other order, shall be assigned first to receipts of fluid milk products from plants fully regulated by such order, and thereafter pro rata to such receipts from pool plants and other order plants not regulated by such order.

(iii) Class I utilization in excess of that assigned pursuant to subdivisions (i) and (ii) of this subparagraph (exclusive of transfers of fluid milk products to pool plants and other order plants) shall be assigned first to remaining receipts from dairy farmers who the market administrator determines constitute the regular source of supply for such nonpool plant and all remaining Class I utilization (including transfers of fluid milk products to pool plants and

other order plants) shall be assigned pro rata to unassigned receipts at such nonpool plant from all pool and other order plants; and

(e) As follows, if transferred or diverted to an other order plant in excess of receipts from such plant in the same category as described in subparagraph (1), (2), or (3) of this paragraph:

(1) If transferred in packaged form, classification shall be in the classes to which allocated under the other order;

(2) If transferred or diverted in bulk form, classification shall be in the classes to which allocated under the other order (including allocation under the conditions set forth in subparagraph (3) of this paragraph);

(3) If both the transferor and transferee handlers so request in the reports of receipts and utilization filed with their respective market administrators, transfers or diversions in bulk form shall be classified as Class II to the extent of the Class II utilization (or comparable utilization under such other order) available for such assignment pursuant to the allocation provisions of the transferee order;

(4) If information concerning the classification to which allocated under the other order is not available to the market administrator for purposes of establishing classification pursuant to this paragraph, classification shall be as Class I, subject to adjustment when such information is available:

(5) For purposes of this paragraph, if the transferee order provides for more than two classes of utilization, milk allocated to a class consisting primarily of fluid products shall be classified as Class I, and milk allocated to other classes shall be classified as Class II; and

(6) If the form in which any fluid milk product is transferred to an other order plant is not defined as a fluid milk product under such other order, classification shall be in accordance with the provisions of § 1061.41; and

(f) As Class I milk, if transferred or diverted to an exempt governmental plant.

[34 F.R. 5909, Mar. 29, 1969, as amended at 36 F.R. 4778, Mar. 12, 1971]

§ 1061.45 Computation of skim milk and butterfat in each class.

For each month the market administrator shall correct mathematical and other obvious errors in the reports submitted pursuant to §§ 1061.30 and 1061.31

by each handler and compute the total pounds of skim milk and butterfat in each class for each handler as follows:

(a) The market administrator shall combine the receipts and utilization in each of the respective classes at all pool plants of a handler including diversions from such pool plants by the handler and shall allocate such combined utilization pursuant to § 1061.46 and shall compute the obligation of such handler pursuant to § 1061.70 based on the combined utilization; and

(b) The market administrator shall allocate pursuant to § 1061.46 and compute the cbligation pursuant to § 1061.70 of a cooperative association on producer milk pursuant to § 1061.16 (c) and (d) for which it is the handler pursuant to § 1061.13 (b) and (c) separately from the operations of any pool plant operated by such cooperative association. § 1061.46

Allocation of skim milk and butterfat classified.

After making the computations pursuant to § 1061.45, the market administrator shall determine the classification of producer milk for each handler as follows:

(a) Skim milk shall be allocated in the following manner:

(1) Substract from the total pounds of skim milk classified:

(i) From Class I the pounds of skim milk in receipts of packaged fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk disposed of to such plant by handlers under this or any other order issued pursuant to the Act is classified and priced as Class I milk and is not used as an offset on any other payment obligation under this or any other order;

(ii) From Class II the pounds of skim milk classified as Class II pursuant to § 1061.41 (b) (6);

(2) Subtract from the pounds of skim milk in each class the pounds of skim milk in fluid milk products received in packaged form from other order plants as follows:

(1) From Class II milk, the lesser of the pounds remaining or 2 percent of such receipts; and

(ii) From Class I milk, the remainder of such receipts;

(3) Subtract from the remaining pounds of skim milk in Class I, the pounds of skim milk in inventory of packaged fluid milk products on hand at the beginning of the month;

(4) Subtract in the order specified below from the pounds of skim milk remaining in each class, in series beginning with Class II, the pounds of skim milk in each of the following:

(1) Other source milk in a form other than that of a fluid milk product;

(ii) Receipts of fluid milk products for which Grade A certification is not established, or which are from unidentified sources;

(iii) Receipts of fluid milk products from a producer-handler, as defined under this or any other Federal order; and

(iv) Receipts of fluid milk products from an exempt governmental plant;

(5) Subtract, in the order specified below, from the pounds of skim milk remaining in Class II, but not in excess of such quantity:

(i) The pounds of skim milk in receipts of fluid milk products from an unregulated supply plant that were not subtracted pursuant to subparagraph (1) (i) of this paragraph:

(a) For which the handler requests Class II utilization; or

(b) The pounds of skim milk in receipts which are in excess of the pounds of skim milk determined by subtracting from 125 percent of the pounds of skim milk remaining in Class I milk the sum of the pounds of skim milk in producer milk, receipts of fluid milk products from pool plants of other handlers, and receipts of fluid milk products in bulk from other order plants; and

(ii) The pounds of skim milk, in receipts of fluid milk products in bulk from an other order plant in excess of similar transfers to such plant, if Class II utilization was requested by the operator of such plant and the transferee handler;

(6) Subtract from the pounds of skim milk remaining in each class, in series beginning with Class II, the pounds of skim milk in inventory of bulk fluid milk products on hand at the beginning of the month;

(7) Add to the remaining pounds of skim milk in Class II milk the pounds subtracted pursuant to subparagraph (1) (ii) of this paragraph;

(8) Subtract from the pounds of skim milk remaining in each class, pro rata to such quantities, the pounds of skim milk in receipts of fluid milk products from unregulated supply plants which

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(9) Subtract from the pounds of skim milk remaining in each class, in the following order, the pounds of skim milk in receipts of fluid milk products in bulk from other order plant(s), in excess in each case of similar transfers to the same plant, which were not subtracted pursuant to subparagraph (5) (ii) of this paragraph;

(i) In series beginning with Class II, the pounds determined by multiplying the pounds of such receipts by the larger of the percentage of estimated Class II utilization of skim milk announced for the month by the market administrator pursuant to § 1061.22 (j) or the percentage that Class II utilization remaining is of the total remaining utilization of skim milk of the handler; and

(ii) From Class I milk, the remaining pounds of such receipts;

(10) Subtract from the pounds of skim milk remaining in each class the pounds of skim milk received in fluid milk products from pool plants of other handlers according to the classification assigned pursuant to § 1061.44(a); and

(11) If the pounds of skim milk remaining in both classes exceed the pounds of skim milk in producer milk, subtract such excess from the pounds of skim milk remaining in each class in series beginning with Class II. Any amount so subtracted shall be known as "overage";

(b) Butterfat shall be allocated in accordance with the procedure outlined for skim milk in paragraph (a) of this section;

(c) Combine the amounts of skim milk and butterfat determined pursuant to paragraphs (a) and (b) of this section into one total for each class and determine the weighted average butterfat content of producer milk in each class. [34 F.R. 5909, Mar. 29, 1969, as amended at 36 F.R. 4778, Mar. 12, 1971]

MINIMUM PRICES

§ 1061.50 Basic formula price.

The basic formula price shall be the average price per hundredweight for manufacturing grade milk, f.o.b. plants in Wisconsin and Minnesota, as reported by the U.S. Department of Agriculture for the month. Such price shall be adjusted to a 3.5 percent butterfat basis by a butterfat differential (rounded to the nearest one-tenth cent) computed at 0.12

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