(ii) Fluid milk products received from other pool plants; and

(iii) Other source milk, with the identity of each source;

(2) Opening inventories of fluid milk products;

(3) The utilization or disposition of all quantities required to be reported, including separate statements of quantities:

(i) Of fluid milk products on hand at the end of the month;

(ii) of route disposition of fluid milk products in the marketing area, and route disposition of filled milk in and outside the marketing area; and

with

(4) Such other information respect to receipts and utilization as the market administrator may request;

(b) Each handler described in § 1062.8 (b) shall report as required in paragraph (a) of this section, except that receipts of Grade A milk from dairy farmers shall be reported in lieu of producer milk and such report shall include a separate statement showing the quantity of reconstituted skim milk in fluid milk products disposed of on routes in the marketing area; and

(c) Each cooperative association shall report with respect to milk for which it is a handler pursuant to § 1062.8 (c) and (d), as follows:

(1) Receipts of skim milk and butterfat in producer milk;

(2) Utilization of milk for which it is the handler pursuant to § 1062.8(c);

(3) The quantities of skim milk and butterfat delivered to each pool plant of another handler pursuant to § 1062.8 (d); and

(4) Such other information as the market administrator may require. [33 F.R. 14625, Oct. 1, 1968, as amended at 34 F.R. 18661, Nov. 22, 1969]

§ 1062.31 Payroll reports.

On or before the 20th day after the end of the month each handler described in § 1062.8 (a), for each of his pool plants, and each cooperative association with respect to milk for which it is the handler pursuant to § 1062.8 (c) and (d) shall submit to the market administrator the producer payroll and each handler making payments pursuant to § 1062.62(a) his payroll for dairy farmers delivering Grade A milk, which shall show for each producer or dairy farmer:

(a) The name and address;

(b) The total pounds of milk received

and the average butterfat content thereof;

(c) The total pounds of milk diverted and the location of the plant to which diverted; and

(d) The price, amount and date of payment with the nature and amount of any deductions.

§ 1062.32 Other reports.

(a) Each producer-handler and each handler exempt from regulation pursuant to § 1062.61 shall make reports to the market administrator at such time and in such manner as the market administrator may request; and

(b) Each handler who receives milk from producers, payment for which is to be made to a cooperative association pursuant to § 1062.80 (c) shall report to such cooperative association with respect to each such producer, on forms approved by the market administrator, as follows:

(1) On or before the 25th of the month, the total pounds of milk received during the first 15 days of the month;

(2) On or before the seventh day after the end of the month:

(i) The total pounds of milk and the average butterfat test of milk received from such producer during the month;

(ii) The amount or rate and nature of any deductions; and

(iii) The amount of any payments due such producer pursuant to § 1062.86 (c) and (d).

All skim milk and butterfat required to be reported pursuant to § 1062.30 shall be classified by the market administrator pursuant to the provisions of §§ 1062.41 through 1062.46. If any of the water contained in the milk from which a product is made is removed before the product is utilized or disposed of by a handler, the pounds of skim milk used or disposed of in such product shall be considered to be an amount equivalent to the nonfat milk solids contained in such product, plus all of the water originally associated with such solids.

§ 1062.41 Classes of utilization.

Subject to the conditions set forth in §§ 1062.43 through 1062.46 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 in the form of a fluid milk product including those reconstituted) except:

(1) Any fluid milk product fortified with added solids shall be Class I milk in an amount equal only to the weight of an equal volume of a like unmodified product of the same butterfat content; and

(ii) Any fluid milk product classified pursuant to subparagraphs (2), (3), and (4) of paragraph (b) of this section; and

(2) Not specifically accounted for as Class II milk; and

(b) Class II milk. Class II milk shall be all skim milk and butterfat:

(1) Used to produce any product other than a fluid milk product;

(2) In fluid milk products disposed of for livestock feed;

(3) In fluid milk products dumped after notification to and opportunity for verification as may be requested by the market administrator;

(4) Disposed of in fluid milk products in bulk form to any commercial food processing establishment for use in food products prepared for consumption off the premises;

(5) Used to produce frozen cream;

(6) In inventory of fluid milk products on hand at the end of the month; (7) In that portion of "fortified" fluid milk products not classified as Class I milk pursuant to paragraph (a) (1) (i) of this section;

(8) In shrinkage of skim milk and butterfat, respectively, assigned at each pool plant pursuant to § 1062.42 (b) (1), but not to exceed the following:

(i) Two percent of producer milk excluding milk received from a cooperative as a handler pursuant to § 1062.8 (d); plus

(ii) One and a half percent of receipts of milk in bulk tank lots from other pool plants; plus

(iii) One and a half percent of milk received from a cooperative association which is a handler for such milk pursuant to § 1062.8(d); plus

(iv) One and a half percent of receipts of fluid milk products in bulk tank lots from an other order plant, exclusive of the quantity for which Class II milk utilization was requested by the operator of such plant and the handler; plus

(v) One and a half percent of receipts of fluid milk products in bulk tank lots from unregulated supply plants, exclu

sive of the quantity for which Class II milk utilization was requested by the handler; less

(vi) One and a half percent of milk disposed of in bulk tank lots to other milk plants, except, in the case of milk diverted by the pool plant operator to a nonpool plant, if the operator of the plant to which the milk is diverted purchases such milk on the basis of farm weights and butterfat tests from samples taken at the farm, the applicable percentages shall be 2 percent;

(9) In shrinkage of skim milk and butterfat, respectively, assigned pursuant to § 1062.42(b) (2); and

(10) In shrinkage of skim milk and butterfat, respectively, of milk for which a cooperative association is the handler pursuant to § 1062.8 (c) or (d), but not in excess of one-half percent of such receipts, exclusive of receipts for which farm weights and butterfat samples are used as the basis of receipt at the plant to which delivered.

§ 1062.42 Assignment of shrinkage.

The market administrator shall allocate shrinkage over a handler's receipts at each pool plant as follows:

(a) Compute the total shrinkage of skim milk and butterfat, respectively, for each handler at each plant; and

(b) If the pool plant has receipts of other source milk, shrinkage shall be prorated between:

(1) Skim milk and butterfat, respectively, in the receipts included in § 1062.41(b) (8); and

(2) Skim milk and butterfat in other source milk in the form of fluid milk products exclusive of that specified in § 1062.41 (b) (8).

§ 1062.44 Transfers.

Skim milk or butterfat in the form of a fluid milk product shall be classified: (a) At the utilization indicated by the operators of both plants in their reports pursuant to § 1062.30, otherwise as Class I milk, if transferred or diverted from a pool plant to another pool plant, 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 § 1062.46 (a) (8) and the corresponding step of § 1062.46 (b);

(2) If the transferor plant received during the month other source milk to be allocated pursuant to § 1062.46 (a) (3) and the corresponding step of § 1062.46 (b), the skim milk and butterfat so transferred or diverted shall be classified so as to allocate the least possible Class I utilization to such other source milk; and

(3) If the handler transferring to the pool plant of another handler received during the month other source milk to be allocated pursuant to § 1062.46(a) (7) and (8) and the corresponding steps of § 1062.46(b), the skim milk and butterfat so transferred or diverted 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 under this or any other order or transferred or diverted to a plant exempt pursuant to § 1062.60 (b);

(c) As Class I milk, if transferred in bulk or diverted to a nonpool plant that is neither an other order plant nor a producer-handler plant, located more than 350 miles, by the shortest highway distance as determined by the market administrator, from the City Hall, St. Louis, Mo., except that cream so transferred may be classified as Class II milk if prior written notice is given to the market administrator and each container is labeled by the transferor as "nonGrade A" cream for manufacturing only;

(d) As Class I milk, if transferred or diverted in bulk to a nonpool plant that is neither an other order plant nor a producer-handler plant, located not more than 350 miles, by the shortest highway distance as determined by the market administrator, from the City Hall, St. Louis, Mo., 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 pursuant to the assignment set forth in subparagraph (3) of this paragraph in his report submitted to the market administrator pursuant to § 1062.30 for the month within which such transaction occurred;

66-018-72- -6

(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; and

(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 Class I milk utilization disposed of on routes in the marketing area shall be first assigned to the skim milk and butterfat in the fluid milk products so transferred or diverted from pool plants, next pro rata to receipts from other order plants and thereafter to receipts from dairy farmers who the market administrator determines constitute regular sources of supply of Grade A milk for such nonpool plant;

(ii) Any Class I milk utilization disposed of on routes in the marketing area of another order issued pursuant to the Act shall be first assigned to receipts from plants fully regulated by such order, next pro rata to receipts from pool plants and other order plants not regulated by such order, and thereafter to receipts from dairy farmers who the market administrator determines constitute regular sources of supply for such nonpool plant;

(iii) Class I milk utilization in excess of that assigned pursuant to subdivisions (i) and (ii) of this subparagraph 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 Class I milk utilization in excess of such receipts shall be assigned pro rata to unassigned receipts at such nonpool plant from all pool and other order plants; and

(iv) To the extent that Class I milk utilization is not so assigned to it, the skim milk and butterfat so transferred or diverted shall be classified as Class II milk; and

(v) If any skim milk or butterfat is transferred to a second nonpool plant under this paragraph the same conditions of audit, classification, and allocation shall apply; 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 as a fluid milk product under the other order;

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

(3) If the operators of both the transferor and transferee plants 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 milk to the extent of the Class 11 milk 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 milk subject to adjustment when such information is available;

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

(6) If the form in which any fluid milk products 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 § 1062.41.

[33 F.R. 14625, Oct. 1, 1968, as amended at 34 F.R. 18662, Nov. 22, 1969]

§ 1062.45 Computation of skim milk and butterfat in each class.

(a) For each month the market administrator shall correct for mathematical and other obvious errors the reports of receipts and utilization submitted pursuant to § 1062.30 for each pool plant of each handler;

(b) Compute the pounds of skim milk and butterfat in each class:

(1) At each pool plant of each handler; (2) In milk diverted from another

handler's plant to a nonpool plant by a cooperative association pursuant to § 1062.8 (c); and

(3) In milk accounted for by a cooperative association as shrinkage of milk handled by the association pursuant to § 1062.8(d); and

(c) In the case of the operator of more than one plant, allocation of producer milk to Class I and Class II milk pursuant to §1062.46 (a) and (b) shall be on an individual plant basis unless pursuant to such allocation fluid milk products are assigned pursuant to § 1062.46 (a) (7) or (8), and the corresponding steps of § 1062.46 (b), in which case allocation pursuant to § 1062.46 shall be based upon the combined receipts and utilization (less transfers between pool plants of the same handler) at all plants of the handler (i.e., on a system basis); and

(d) Compute for each cooperative association reporting pursuant to § 1062.30 (c) the total pounds of skim milk and butterfat, respectively, in producer milk pursuant to § 1062.14(b) (1) and (2) (ii) in each class. The amount so determined shall be those used for computation pursuant to § 1062.46 (c).

§ 1062.46

Allocation of skim milk and butterfat classified.

After making the computations pursuant to § 1062.45, the market administrator shall determine the classification of producer milk for each handler (or pool plant, if applicable) as follows:

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

(1) Subtract from the total pounds of skim milk in Class II milk the pounds of skim milk classified as Class II milk pursuant to § 1062.41 (b) (8);

(2) Subtract from the remaining pounds of skim milk in each class the pounds of skim milk in fluid milk products received in packaged form from other order plants, except that to be subtracted pursuant to subparagraph (3) (v) of this paragraph, as follows:

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

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

§ 1062.60 (b);

(iv) Receipts of reconstituted skimi milk in filled milk from unregulated supply plants; and

(v) Receipts of reconstituted skim milk in filled milk from other order plants which are regulated under an order providing for individual handler pooling to the extent that reconstituted skim milk is allocated to Class I at the transferor plant;

(4) Subtract, in the order specified below, from the pounds of skim milk remaining in Class II milk 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 (3) (iv) of this paragraph;

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

(b) Which are in excess of the pounds of skim milk determined by multiplying the pounds of skim milk remaining in Class I milk by 1.25 and subtracting the sum of the pounds of skim milk in producer milk, receipts from other pool plants and receipts in bulk from other order plants, that were not subtracted pursuant to subparagraph (3) (v) of this paragraph; and

(ii) Receipts of fluid milk products in bulk from an other order plant, that were not subtracted pursuant to subparagraph (3) (v) of this paragraph, in excess of similar transfers to such plant, if Class II milk utilization was requested by the operator of such plant and the handler;

(iii) The pounds of skim milk in receipts of milk by diversion from an other order plant for which Class II utilization was requested by the receiving handler and by the diverting handler under the other order, but not in excess of the pounds of skim milk remaining in Class II milk:

(5) Subtract from the pounds of skim milk remaining in each class, in series beginning with Class II milk, the pounds

of skim milk in inventory of fluid milk products on hand at the beginning of the month;

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

(7) 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 were not subtracted pursuant to subparagraphs (3) (iv) or (4) (i) of this paragraph;

(8) 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 an other order plant(s), in excess in each case of similar transfers to the same plant, which were not subtracted pursuant to subparagraphs (3) (v) or (4) (ii) of this paragraph:

(i) In series beginning with Class II milk, the pounds determined by multiplying the pounds of such receipts by the larger of the percentage of estimated Class II milk utilization of skim milk announced for the month by the market administrator pursuant to § 1062.22 (1) or the percentage that Class II milk utilization remaining is of the total remaining utilization of skim milk of the handler;

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

(iii) The quantity of skim milk, if any, subtracted pursuant to subdivision (ii) of this subparagraph shall be assigned pro rata to the receipts from other order plants under market pool orders and under handler pool orders which were assigned pursuant to subdivisions (i) and (ii) of this subparagraph (the skim milk subtracted pursuant to subdivision (i) of this subparagraph shall be subject to the same proration);

(9) Subtract from the pounds of skim milk remaining in each class the pounds of skim milk received in fluid milk products transferred or diverted from pool plants of other handlers (or other pool plants, if applicable) according to the classification assigned pursuant to § 1062.44(a); and

(10) 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