(1) Readjustment of quota into the statewide quota system will occur if the Montana market needs exceed the current established total quota.

(2) Market needs are not met when the following conditions exist:

(a) when greater than 83.5% of quota milk received is utilized in non-surplus Class I and II usage; and

(b) when utilization of quota milk for non-surplus Class I and Class II usage has increased from two years prior to the preceding year. When a negative figure results, there will be no readjustment.

(3) When the statewide quota system needs additional quota added to meet market needs, the bureau must calculate on or before the first day of April each year the additional quota to be assigned to each eligible producer and new eligible producer in accordance with the following computations:

(a) For application of (2)(a), using the preceding calendar year (January 1 through December 31), the total non-surplus Class I and Class II usage is divided by the total quota pounds to determine the percentage of quota milk utilized in non-surplus Class I and II usage.

(b) For application of (2)(b), using the preceding calendar year (January 1 through December 31), compute the total pounds of non-surplus Class I and Class II usage from all pool plants and subtract the total pounds of non-surplus Class I and II usage in the calendar year prior to the preceding calendar year.

(c) If the percentage in (3)(a) exceeds 83.5%, take the positive figure resulting from the computation in (3)(b) and divide it by the total days in the year to determine how many pounds of quota will be issued into the statewide quota system.

(d) The resulting pounds in (3)(c) must be prorated to all eligible producers and new eligible producers on the basis of their average daily marketing of milk to all pool plants during the preceding months of September through December and assigned to them as quota effective on May 1.