For Immediate Release Contact: Tina Wisell

June 11, 1998 (802) 229-1941

Compact Commission Takes Action on Supply Issues: Will Begin Rulemaking with a Public Hearing on July 1 and Escrow 4 Cents from the May Pool Paid in June

The Northeast Dairy Compact Commission has decided to take two actions to address supply issues. At its monthly meeting, the Commission voted to begin a rulemaking process concerning milk being diverted out of the Compact region. The Commission also decided to withhold four cents per hundredweight from the May pool which is paid in June to be placed in escrow for possible Compact Commission obligations to the Commodities Credit Corporation (CCC).

The Commission, to date, has escrowed approximately $1,078,000 of farmer payment funds in order to cover possible CCC purchases which would result from increased milk production in the Compact region during the 1998 fiscal year. The Compact's enabling legislation requires the Commission to reimburse the CCC for the cost of purchases of any surplus production during the 1998 fiscal year that might occur should the production increases in the Compact region exceed the national average.

The Commission had previously escrowed 80 percent of its February pool payment and 20 percent of its March and April pool payments. The Chair of the Compact Commission's Committee on Regulations, Bobby Starr, stated that withholding 4 cents from the upcoming May pool to be paid in June should establish a large enough reserve to meet any possible obligation the Compact Commission may have to the CCC. "The Regulations Committee felt that the Commission needed to escrow a total of $1,250,000 in order to cover possible CCC contingencies. Escrowing 4 cents per hundredweight from the upcoming pool should allow us to reach that figure and eliminate the need for any further escrowing of payments. This will also allow farmers to be able to receive a full payment in July," he said.

The Commission also decided to initiate a rulemaking process in order to address the issue of supplies of milk being diverted or transferred out of the Compact region. Additionally, the Commission noted that while a recent rulemaking process allowed the Commission to exempt school food service programs from the Compact price regulation, no language was included in the regulation that would actually allow the Commission to escrow the funds needed in order to reimburse those programs. Therefore, the Commission will also address the need to escrow for the school food service program reimbursement during the upcoming proposed rulemaking. The Commission will hold a public hearing on July 1, 1998 as part of its proposed rulemaking. Information on the hearing and the proposed rulemaking follows. 

  1. Background

    Pursuant to its authority under Article V, Section 11 of the Compact, the Commission conducted an informal rulemaking proceeding to adopt a Compact Over-order Price Regulation. See, 62 FR 29626 (May 30, 1997). The Commission amended and extended the Compact Over-order Price Regulation on October 23, 1997. See 62 FR 62810 (November 25, 1997). The Commission further amended the Over-order Price Regulation relative to certain milk sold by school food authorities in New England. See 63 FR 10104 (February 27, 1998).

    Pursuant to its authority under Article V, Section 11 of the Compact, the Commission is proposing to amend the current Compact Over-order Price Regulation to exclude milk from the pool which is either diverted or transferred in bulk out of the Compact regulated area, and thereby disqualify that milk from the compact over-order producer payment and to establish a reserve fund to implement the Commissionís regulation relative to certain milk sold by school food authorities. The current Compact Over-order Price Regulation is codified at 7 CFR 1300 through 1308

  3. Date, Time and Location of the Public Hearing

The Northeast Dairy Compact Commission will hold a public hearing on this Proposed Rule on:

Wednesday, July 1, 1998 9:00 am

Capitol Center for the Arts, Governorís Hall

44 South Main Street

Concord, NH


3. Request for Written Comments

Pursuant to VI(D) of the Commissionís Bylaws, any person may participate in the

rulemaking proceeding independent of the hearing process by submitting written

comments and exhibits to the Commission. Comments and exhibits may be submitted at any time prior to 5:00 pm, July 15, 1998. Comments and exhibits will be made part of the record of the rulemaking proceeding if they identify the authorís name, address and occupation, and if they include a sworn notarized statement indicating the comment and/or exhibit is presented based upon the authorís personal knowledge and belief. Facsimile copies will only be accepted if received by the 5:00 pm, July 15, 1998 deadline. The original copies must then be sent by ordinary mail. Comments and exhibits should be sent to:

Northeast Dairy Compact Commission

43 State Street PO Box 1058

Montpelier, VT 05601-1058

Fax: (802) 229-2028

Tel: (802) 229-1941


For further information, contact Kenneth Becker, Executive Director, Northeast Dairy Compact Commission.

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