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Dairy Facts 2016

USDA Streamlines Change Process for Federal Orders; May Assess Handlers

Aug 25, 2008

The U.S. Department of Agriculture last week announced a final rule that changes its procedures for amending the Federal Milk Marketing Orders and opens the door for possible assessments on handlers that pool milk and are regulated by the federal milk pricing system. According to the rule, USDA must act more quickly on proposals requesting amendments to the federal orders and follow a tighter timeframe for issuing decisions following a hearing.

During the Farm Bill debate, several dairy groups urged Congress to adopt a provision that would improve USDA's response time to federal order proposals. Legislators complied and included Section 1504, requiring USDA to streamline its procedures for considering proposals, conducting hearings and making decisions. The new supplemental rules of practice included in the final rule fulfill this requirement.

The rule includes two significant changes. First, USDA now has the option to use informal rulemaking, also known as notice and comment rulemaking, for any proposed amendment, as long as that amendment does not directly affect milk prices. According to the rule, USDA may consider the nature and complexity of the proposal and its potential regulatory and economic impact when deciding whether to use informal rulemaking.

Second, the rule allows USDA to assess handlers for certain costs associated with expediting the rulemaking process.

"If the Secretary determines it is necessary to improve or expedite an amendatory formal rulemaking proceeding to amend a Federal milk marketing agreement or order, USDA may impose an assessment on pooled milk to supplement appropriated funds for the procurement of such services, including but not limited to, court reporters, hearing examiners, legal counsel, hearing venue and associated travel for USDA officials," the final rule states.

These administrative assessments are not to exceed $0.005 per hundredweight of milk for any given month.

In addition, the new rules of practice set the following changes:

  • Establish guidelines for submitting a proposal
  • Establish procedures following the receipt of a proposal, including whether to hold a pre-hearing information session
  • Require exhibits and/or written testimony, if prepared as an exhibit, to be available to USDA officials before the start of a hearing on the day of appearance
  • Establish timeframes for requesting USDA data prior to a hearing
  • Establish electronic submission standards for post-hearing briefs and transcript corrections
  • Define a timeframe for filing post-hearing briefs, corrections to the hearing transcripts and exceptions to recommended decisions
  • Establish publication deadlines for recommended, tentative final and final decisions

To view the final rule click here.

For more information, contact Bob Yonkers, IDFA vice president and chief economist, at or 202- 220-3511.


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