RS 3:4104 Production stabilization plans - Louisiana Statutes

§4104.  Production stabilization plans

A.  The commissioner shall issue for each production marketing area a production stabilization plan that shall provide comprehensive regulation of the marketing of bulk milk by dairy farmers and the acquisition of bulk milk by processors.  Each production stabilization plan issued by the Commissioner shall provide the means for determining which such plan is applicable to the bulk milk purchases of a processor engaged in selling dairy products in two or more production marketing areas.  The applicability of any such plan to bulk milk purchased by a processor from a particular dairy farmer shall in no way be dependent upon the location of the seller's dairy farm nor upon the location at which title passes.

Any production stabilization plan issued by the commissioner may provide for a classified pricing system predicated upon utilization, and may provide for a market-wide pooling arrangement or a handler pooling arrangement.

Any production stabilization plan may also contain provisions establishing the prices payable by a processor for bulk milk purchased from sources other than dairy farmers and may contain such other provisions as are necessary and appropriate in order to insure that prices paid for butterfat and milk solids not fat (whether in the form of bulk milk or otherwise) shall be uniform for all processors whose bulk milk purchases are regulated by same production stabilization plan.

If the commissioner issues a production stabilization plan containing a market-wide pooling arrangement, the plan may require that milk produced by dairy farmer-processors be included in such pooling arrangement.

Any production stabilization plan may provide for price adjustments based upon the butterfat content of the bulk milk, the location where received, the location of the plant to which a portion of the bulk milk is transferred or diverted by the processor from the plant where such bulk milk is normally utilized, and other such factors for which price adjustments are now provided in 7 U.S.C. §608(c).

B.  Minimum prices to milk producers

(1)  Within sixty days following the effective date of this act,* the commissioner shall call a public hearing to consider the establishment of an economic pricing formula for determining the minimum prices payable to milk producers for milk used as Class I milk.  The objective of the formula shall be to insure that the minimum prices in each milk marketing area within the state shall be beneficial to the public interest, protect the dairy industry of the state, and insure a sufficient quantity of pure and wholesome milk for inhabitants of this state.

(2)  In establishing the formula, the commissioner shall give consideration to those economic indices that will reflect changes in each of the following categories and such others as the commissioner may deem relevant:  the quantity of fluid milk produced and disposed of; ability and willingness of consumers to buy; cost factors in producing milk; alternative opportunities for milk producers; and indexes of manufacturing milk.  The formula shall be designed to bring about such automatic changes in minimum milk producer Class I prices as are justified by changing conditions, without the requirement of public hearings before each such change.

(3)  Within thirty days after completion of the public hearing, the commissioner shall recommend an economic pricing formula for pricing of Class I milk designed to accomplish the objectives stated in this section.  This proposed formula shall be presented to the milk producers who regularly supply milk in each marketing area, to be voted upon in separate referenda to be held not more than thirty days following the announcement by the commissioner of his recommended formula.  If two-thirds or more of the producers voting in a marketing area approve the formula, it shall become the effective method of pricing milk to producers for Class I sales in that marketing area, and the prices as determined by the formula shall be the minimum prices to be paid to milk producers by processors or handlers, distributors or bulk milk handlers for milk used as Class I milk.

(4)  If the economic pricing formula for Class I milk is adopted in any marketing area and the percentage change in the average of the three indices reflecting cost of production, (namely, index of prices paid by farmers in the United States; index of prices paid for 16% dairy ration in Louisiana; and index of farm wage rates in Louisiana) deviates from the percentage change in the Class I price in that marketing area, as determined by the formula, by 6.0 or more percentage points, the commissioner shall call a hearing, within thirty days, to review the operation of the formula.  Within thirty days after completion of the public hearing, the commissioner shall recommend appropriate amendments to the economic pricing formula.  These amendments shall be submitted to the milk producers in the marketing area to be voted upon in a referendum to be held within thirty days following the announcement by the commissioner of his proposed amendments.  If two-thirds or more of the producers voting in the marketing area approve amendments they shall be adopted and utilized in that area.

(5)  If the economic pricing formula for Class I milk is adopted, and fifty percent or more of the milk producers who regularly supply milk to a milk marketing area petition, in writing, for a hearing, the commissioner shall call a public hearing within thirty days, to review the operation of the formula and to consider amendments thereto.  Within thirty days following completion of the public hearing, the commissioner shall recommend appropriate amendments to the economic pricing formula.  These amendments shall be submitted to the milk producers in said marketing area to be voted upon in a referendum to be held within thirty days following announcement by the commissioner of his proposed amendments.  If two-thirds or more of the producers voting in the marketing area approve the amendments they shall be adopted and utilized in that area.

(6)  Whenever the commissioner finds that the milk producer Class I prices resulting from the utilization of the formula do not tend to effectuate the purposes of this section, he may suspend the operation of the formula for a period of not more than ninety days and may establish during such period those minimum prices which will tend to effectuate the purposes of this section.  When the period of suspension terminates, the minimum milk producer prices for Class I milk shall again be those resulting from the utilization of the formula.  Once the operation of the formula has been suspended, the commissioner may not suspend the operation of the formula again until at least twelve months have elapsed since the end of the period of suspension.  Nothing contained in this subparagraph shall prevent the revision of the formula during the period when its operation is suspended.

(7)  If fifty percent or more of the milk producers who regularly supply milk to a milk marketing area petition in writing to rescind the economic pricing formula for Class I milk the commissioner shall, within thirty days, call a referendum and submit this proposal to the milk producers who regularly supply milk in said marketing area.  If a majority of those voting in such referendum vote to rescind the economic pricing formula, its use as a method of establishing minimum prices shall be terminated.

(8)  If the economic pricing formula for Class I milk provided for in this section is not adopted or is rescinded by vote of the producers in any marketing area, the commissioner shall, within thirty days following the referendum, call a public hearing to consider the establishment of minimum prices to be paid to milk producers for milk to be used as Class I milk.  Within thirty days following the completion of the public hearing, the commissioner shall recommend minimum prices to be paid to milk producers for milk used as Class I milk in said marketing area.  These prices shall be voted upon by milk producers regularly supplying milk in said marketing area in a referendum to be held within thirty days following the announcement by the commissioner of his recommendations.  If two-thirds or more of the producers voting in a marketing area approve the prices, the commissioner shall require payment of such appropriate minimum prices for milk in said marketing area.

(9)  Upon written request of fifty percent or more of the milk producers who regularly supply milk to a milk marketing area, the commissioner shall, within thirty days, call a public hearing to review minimum prices established under the provisions of Subparagraph (8) of this section.  Within thirty days following completion of the public hearing, the commissioner shall recommend appropriate adjustments to the minimum price in that area.  These proposed prices shall be submitted to the milk producers in that marketing area to be voted upon in a referendum to be held within thirty days following the announcement by the commissioner of his recommendations.  If two-thirds or more of the producers voting in said marketing area approve the prices, the commissioner shall require payment of such appropriate minimum prices in said marketing area.

(10)  Classifications for milk other than Class I, and minimum prices to be paid to milk producers for milk to be used in such classifications shall be established by the commissioner, subject to the approval of the producers in accordance with the following procedures:

(a)  Upon written request of fifty percent or more of the milk producers who regularly supply milk to a milk marketing area, the commissioner shall call a public hearing within thirty days to consider the establishment of appropriate classifications and minimum prices for milk other than Class I.

(b)  Within thirty days following the completion of the public hearing, the commissioner shall recommend appropriate classifications and minimum prices to be paid to milk producers for sale of milk other than Class I in said marketing area.  In establishing the minimum prices, the commissioner shall take into consideration the competitive prices paid to producers in other states or regions for milk other than Class I milk, the cost of alternative supplies from other states or regions of milk for similar use and classification; and other appropriate factors affecting the production and sale of milk in the area.

(c)  These proposed classifications and minimum prices shall be voted upon by milk producers regularly supplying milk in said marketing area in a referendum to be held within thirty days following the announcement by the commissioner of his recommendations.  If two-thirds of the producers voting in a marketing area approve the classifications and the minimum prices, the commissioner shall adopt the classifications and shall require payment of minimum prices in said marketing area.

(11)  In any public hearing held pursuant to this section, all interested persons shall be given reasonable opportunity to be heard.

If fifty percent or more of the milk producers who regularly supply milk to a marketing area petition in writing to terminate the marketing order in its entirety, the commissioner, shall, within thirty days, call a referendum and submit this proposal to the milk producers who regularly supply milk in the marketing area.  If two-thirds of those voting in such referendum vote to terminate the order in its entirety, its use shall be terminated effective the last day of the month in which the referendum is conducted.

C.  Each production stabilization plan shall contain such additional provisions as are required in order to achieve the objectives of this subpart, including, but not limited to provisions relating to the following:

(1)  Records to be kept by processors;

(2)  Reports to be submitted by processors;

(3)  The provision of marketing services to dairy farmers who are not members of a cooperative and the financing of such activities;

(4)  The establishment and transfer of individual bases in accordance with any reasonable plan including, but not limited to, a Class I base plan;

(5)  A provision for increasing in all production marketing areas of the prices established pursuant to this section to the level of the prices established pursuant to a federal milk marketing order having in its marketing area one or more parishes of the State of Louisiana.

D.  The commissioner is hereby authorized to cooperate with the Secretary of Agriculture of the United States in the manner provided in 7 U.S.C. 610(i) and in other appropriate ways.

E.  Whenever the commissioner finds that any production stabilization plan or any provision thereof obstructs or does not tend to effectuate the purposes of this subpart, he shall suspend the operation of such plan or such provision thereof, provided, however, that the commissioner's powers of suspension are limited by the terms of Subsection B(6) of this section.  However, the commissioner is prohibited from taking any suspensive action involving one or more provisions of the production stabilization plan if the effect thereof will be to render such plan so ineffective as not to be a production stabilization plan within the meaning of this subpart.  If the commissioner suspends a production stabilization plan in its entirety, such suspension shall not become effective unless approved by a majority of the affected dairy farmers who vote in a referendum arranged by the commissioner.

F.  The commissioner shall take such measures as are reasonably necessary to assure that changes in bulk milk prices and changes in the prices established by the board occur simultaneously.

G.  Each production stabilization plan adopted pursuant to this section shall be considered a "rule" as that term is defined in R.S. 49:951(6); and the adoption, amendment, and judicial review of such plans shall be in accordance with the provisions of the Administrative Procedure Act (R.S. 49:951 et seq.) relating to rules and rule-making.  The revision of any provision of a production stabilization plan shall be accomplished only by the amendment of such plan.  Any suspensive action taken by the commissioner pursuant to Subsection F of this section and any action taken by the commissioner pursuant to the third paragraph of Subsection B of this section shall be deemed an "emergency rule" as that term is used in R.S. 49:953(B), but the commissioner shall not be required to find that any such action is required by an imminent peril to the public health, safety, or welfare.

H.  Nothing contained in this subpart shall be construed to prevent a cooperative association engaged in making collective sales or marketing of milk or milk products for its dairy farmer members from blending the net proceeds of all of its sales and making distribution thereof to its producers in accordance with the membership-marketing contract between the association and its dairy farmer members, provided that no sale of milk by a cooperative association to a processor, distributor, retailer or consumer shall be made at less than the applicable minimum prices established pursuant to this subpart.

Whenever pursuant to the provisions of this subpart the commissioner is required to determine the approval or disapproval of dairy farmers with respect to the issuance of marketing orders, amendments thereto or suspension thereof, the commissioner shall consider the approval or disapproval or the vote by a cooperative association of dairy farmers as the approval or disapproval or vote of the dairy farmers who are members of such cooperative association and eligible to vote in the referendum.  The commissioner shall establish reasonable and appropriate rules for determining the eligibility of a producer or producers to vote in any referendum.

Added by Acts 1974, No. 31, §1; Acts 1985, No. 75, §1.