32.24.523    MARKETING OF SURPLUS MILK

(1) Surplus milk must be marketed and sold in a manner that is economically advantageous to pool producers, with all gain or loss shared by all pool producers.

(2) All surplus milk sold in bulk will be marketed and sold directly by pool handlers unless directed otherwise by the producer committee or unless a pool handler declines to perform the service.

(a) A pool handler must provide 90 days written notice to the producer committee prior to declining to market surplus milk in bulk.

(b) The producer committee retains the right to supervise, approve, control, or direct the marketing of the surplus milk sold in bulk.

(i) After receiving approval from the board, the producer committee must provide the affected pool handler 90 days written notice before controlling and directing marketing of surplus milk sold in bulk.

(ii) In the event the producer committee directs the marketing of surplus milk sold in bulk, it may hire agents and incur other expenses as necessary to fulfill that function.

(3) All proceeds received by a pool handler from the surplus milk sold in bulk:

(a) must be added to the utilization value that the pool handler owes the pool settlement fund, less the following deductions:

(i) the amount for which the pool handler owes or has paid the pool settlement fund based on the class of utilization for the sale;

(ii) an optional administrative fee not exceeding $0.02/cwt; and

(iii) reasonable transportation expenses incurred by the pool handler, which may not include farm pickup charges; and

(b) includes all valuable consideration paid in any form and must be documented by reporting forms, invoices, contracts, and other evidence as may be requested by the bureau.

(4) A pool handler may request negative adjustments to the utilization value that the pool handler owes the pool settlement fund for sales of Class I packaged products that are surplus milk. Negative adjustments offset the costs associated with processing and marketing surplus milk that otherwise would have been marketed and sold in a manner that is less economically advantageous to the pool producers.

(a) Negative adjustments may be allocated to sales in individual states or groups of states in any manner as long as the aggregate of the adjustments does not exceed the sum of maximum adjustments allowed. Negative adjustments may be allocated in any manner between pool handlers affiliated by common ownership.

(b) Adjustments are calculated on the net export weight of Class I packaged products that are surplus milk, as determined by the bureau.

(c) The maximum negative adjustment for the net export weight of Class I packaged products that are surplus milk sold to markets in states contiguous to Montana is $2.55/cwt.

(d) The maximum negative adjustment for the net export weight of Class I packaged products that are surplus milk sold to markets in states not contiguous to Montana is $3.05/cwt.

(5) When the producer committee directs the marketing of surplus milk sold in bulk, the following will occur:

(a) All proceeds received by the producer committee from the sale of surplus milk sold in bulk must be deposited in the pool settlement fund.

(b) All proceeds received include all valuable consideration paid in any form and must be documented by reporting forms, invoices, contracts, and other evidence as may be requested by the bureau.

(c) All expenses incurred by the producer committee to market the surplus milk sold in bulk must be paid from the pool settlement fund. All expenses must be documented by reporting forms, invoices, contracts, and other evidence as may be requested by the bureau.

(d) Before the 8th day of the month after related sales, the producer committee must communicate the following information to the pool handler that would have otherwise marketed the surplus milk:

(i) If unknown to the pool handler, the identity of pool dairies whose milk was utilized for the surplus milk bulk sales and the quantities and butterfat and skim milk content of milk utilized from each pool dairy.

(ii) The total quantities and butterfat and skim milk content of surplus milk sold in bulk and the classes of utilization.

(e) The pool handler that would have otherwise marketed the surplus milk must include the information reported in (d) in the reports it is required to file with the bureau.

(f) For purposes of calculating the quota price and excess price in ARM 32.24.513, all proceeds received by the producer committee must be added to the utilization value, less the following deductions:

(i) the amount for which the pool handler has paid the pool settlement fund based on the class of utilization for the sale or the amount owed by the pool handler if proceeds are received by the producer committee in the same month as the sale;

(ii) reasonable transportation expenses incurred by the pool handler. Farm pickup charges may not be included as deductions. Farm pickup charges are the usual charges to the producer for transporting milk to the pool plant; and

(iii) expenses incurred by the producer committee to market the surplus milk sold in bulk.

(g) Following the deposit of proceeds received by the producer committee, the amount that the pool handler owes to the pool settlement fund for utilization of pool milk will be reduced by the following:

(i) reasonable transportation expenses incurred by the pool handler, which may not include farm pickup charges; and

(ii) the amount the pool handler:

(A) paid the pool settlement fund based on the class of utilization for the sale; or

(B) would have owed to the pool settlement fund based on the class of utilization for the sale, if proceeds are received by the producer committee in the same month as the sale.

History: 81-23-104, MCA; IMP, 81-23-103, 81-23-302 MCA; NEW, 1996 MAR p. 2428, Eff. 10/1/96; AMD, 2000 MAR p. 1753, Eff. 9/1/00; AMD, 2000 MAR p. 3413, Eff. 12/8/00; AMD, 2009 MAR p. 2258, Eff. 11/26/09; AMD, 2017 MAR p. 1151, Eff. 8/1/17.