Proposed Rule (adopted 4/16/97)

-or-

Background
Statement of Required Findings of Fact
Summary of Comment
I. FINDING What level of prices will assure that producers receive a price sufficient to cover their costs of production and will elicit an adequate supply of milk for the inhabitants of the regulated area and for manufacturing purposes.
A. Issue: Farmer Cost of Production and the pay price needed to yield a reasonable rate of return to producers
Price Insufficiency
1. Price Instability
2. Failure of Milk Prices to Account for Inflation
3. Structure and Health of the New England Dairy Industry
4. Comments and Testimony from Farmers
B. Issue: Prevailing pay prices received by dairy farmers in the New England Region
C. Issue: The balance between production and consumption of fluid milk products.
D. Summary analysis of Costs of Production and Sufficient Price.
1. Price Volatility, Cost of Production and Chronic Insufficiency of Price, and the Failure of Price to Adjust for Inflation.
2. Cost of Production and Chronic Insufficiency of Price.
3. Adjustment for Inflation- Determination of Specific Price Amount and Formula.
II. FINDING whether the public interest will be served by the establishment of minimum milk prices to dairy farmers under Article IV.
A. Issue: The balance between production and consumption in the region - the pay price needed to yield a reasonable rate of return to producers and to ensure an adequate supply of milk for the region.
B. Issue: The prevailing farm prices for Class 1 fluid milk, inside and outside the New England region.
C. Issue: The costs of transporting bulk fluid milk products to plants located within New England Region.
D. Issue: The prevailing processing and wholesale costs for Class 1 Fluid milk, inside and outside the New England region.
E. Issue: The costs of delivering fluid milk products processed outside the New England region to outlets within the region.
F. Issue: The price needed to yield a reasonable rate of return to processors of fluid milk products.
G. Issue: The purchasing power of the general public.
H. Issue: The elasticity of demand for fluid milk products.
I. Issue: The cost of retailing fluid milk products.
J. Issue: The prevailing retail prices for Class 1 fluid milk, inside and outside New England region.
K. Issue: The potential impact of a flat, combined, regulated, Federal Order and Compact Over-Order price on the wholesale market for fluid milk products.
L. Issue: The potential impact of flat, combined, regulated, Federal Order and Compact Over-Order price on the retail market for fluid milk products.
1. Change in the Epicenter of Milk Production and the Impact on Retail Prices.
2. Risk Avoidance in Commodity Purchasing - The Benefits of Price Stabilization.
3. The Experience of the Southeast Region of the United States
4. Summary Analysis
M. Issue: The potential impact of flat, combined, regulated, Federal Order and Compact Over-Order price on School lunch programs.
N. Issue: The potential impact of a flat, combined, regulated, Federal Order and Compact Over-Order price on the Women, Infants and Children Special Supplemental Nutrition Program of the United States Child Nutrition Act of 1966.
Public Interest Finding - Summary Analysis
III. FINDING Whether the major provisions of the order, other than those fixing minimum milk prices, are in the public interest and are reasonably designed to achieve the purposes of the order.
1. Surplus Production
Compact Requirement
Requirement of Enabling Legislation
2. Technical Regulation
IV. Administrative Assessment
V. Required Findings of Fact
VI. List of Subjects in 7 CFR parts 1300, 1301, 1303-1307
VII. Codification in Code of Federal Regulation: Part 1300 - Over-Order Price Regulations