(i) Subject to the provisions of subdivisions (ii) and (iii) of this subparagraph, such subtraction shall be pro rata to whichever of the following represents the higher proportion of Class II milk:

(a) The estimated utilization of skim milk in each class, by all handlers, as announced for the month pursuant to § 1120.27(m); or

(b) The pounds of skim milk in each class remaining at all pool plants of the handler;

(ii) Should proration pursuant to subdivision (i) of this subparagraph result in the total pounds of skim milk to be subtracted from Class II at all pool plants of the handler exceeding the pounds of skim milk remaining in Class II at such plants, the pounds of such excess shall be subtracted from the pounds of skim milk remaining in Class I after such proration at the pool plants at which received;

(iii) Except as provided in subdivision (li) of this subparagraph, should proration pursuant to either subdivision (1) or (ii) of this subparagraph result in the amount to be subtracted from either class exceeding the pounds of skim milk remaining in such class in the pool plant at which such skim milk was received, the pounds of skim milk in such class shall be increased to the amount to be subtracted and the pounds of skim milk in the other class shall be decreased a like amount. In such case the utilization of milk at other pool plant(s) of such handler shall be adjusted in the reverse direction by an identical amount in sequence beginning with the nearest other pool plant of such handler at which such adjustment can be made.

(9) Subtract from the pounds of skim milk remaining in each class the pounds of skim milk received in fluid milk products from other pool plants and from a cooperative association(s) in its capacity as a handler pursuant to § 1120.17 (c) (2) according to the classification assigned pursuant to § 1120.44 (a);

(10) If the pounds of skim milk remaining in both classes exceed the pounds of skim milk in producer milk, subtract such excess from the pounds of skim milk remaining in each class in series beginning with Class II. Any amount so subtracted shall be known as "overage";

(b) Butterfat shall be allocated in accordance with the procedure outlined for skim milk in paragraph (a) of this section; and

Subject to the provisions of §§ 1120.51 and 1120.52, class prices per hundredweight for the month shall be as follows:

(a) Class 1 price. The Class I price shall be the basic formula price for the second preceding month plus $2.42.

(b) Class II price. The Class II milk price shall be computed by adding together the plus values of subparagraphs (1) and (2) of this paragraph, subtracting five times the butterfat differential computed to § 1120.51(b), rounding to the nearest full cent and, during the months of March through June, deducting 13 cents.

(1) Subtract 3 cents from the Chicago butter price and multiply by 4.8; and

(2) From the weighted average of carlot prices per pound of nonfat dry milk, spray process, for human consumption, f.o.b. manufacturing plants in the Chicago area, as published for the period from the 26th day of the preceding month through the 25th day of the current month by the Department, deduct 5.5 cents and multiply by 8.16.

(c) Basic formula price. The "basic formula price" shall be the average price per hundredweight for manufacturing grade milk, f.o.b. plants in Minnesota and Wisconsin, as reported by the Department for the month, adjusted to a 3.5 percent butterfat differential (rounded to the nearest one-tenth cent) per one-tenth percent butterfat shall be 0.12 times the simple average of the wholesale selling prices (using the midpoint of any price range as one price) of Grade A (92score) bulk butter per pound at Chicago, as reported by the Department for the month. For the purpose of computing the Class I price, the resulting price shall be not less than $4.33.

[27 F.R. 5050, May 30, 1962, as amended at 27 F.R. 7555, Aug. 1, 1962, 29 F.R. 2928, Mar. 4, 1964; 37 F.R. 2940, Feb. 10, 1972]

For milk containing more or less than 3.5 percent butterfat the class prices for the month calculated pursuant to § 1120.50 shall be increased or decreased, respectively, for each one-tenth percent variation in butterfat content at the appropriate rate, rounded to the nearest one-tenth cent, determined as follows: (a) Class I price. Multiply the Chicago butter price for the preceding month by 0.125.

(b) Class II price. Multiply the Chicago butter price for the current month by 0.115.

[27 F.R. 5050, May 30, 1962, as amended at 27 F.R. 7555, Aug. 1, 1962] § 1120.52

dlers.

Location adjustments to han

(a) For producer milk which is received at a pool plant located either outside of the State of Texas, or within the State but north of the counties of Parmer, Castro, Swisher, Briscoe, Hall, and Childress and 100 miles or more from the City Hall, Lubbock, Texas, by the shortest hard-surfaced highway distance as determined by the market administrator, and which is assigned to Class I pursuant to paragraph (b) of this section or otherwise classified as Class I milk, and for other source milk for which a location adjustment is applicable, the price specified in § 1120.50(a) shall be reduced at the rate set forth in the following table according to the location of the plant where such milk is received:

with the plant at which the least location adjustment would apply. [29 F.R. 11026, July 30, 1964]

§ 1120.53 Use of equivalent prices.

If for any reason a price quotation required by this part for computing class prices or for any other purposes is not available in the manner described, the market administrator shall use a price determined by the Secretary to be equivalent to the price which is required. [27 F.R. 5050, May 30, 1962. 29 F.R. 11026, July 30, 1964]

Renumbered

Sections 1120.40 through 1120.46, 1120.50 through 1120.53, 1120.70 through 1120.75, 1120.80 through 1120.87, and 1120.110 through 1120.122 shall not apply to a producer-handler.

[37 F.R. 23696, Nov. 8, 1972]

§ 1120.61 Plants subject to other Federal orders.

The provisions of this part shall not apply with respect to the operation of any plant specified in paragraph (a) or (b) of this section except as specified in paragraphs (c) and (d):

(a) A plant meeting the requirements of § 1120.12(a) which also meets the pooling requirements of another Federal order and from which, the Secretary determines, a greater quantity of Class I milk, except filled milk, is disposed of during the month on routes in such other Federal order marketing area than was disposed of on routes in this marketing area, except that if such plant was subject to all the provisions of this order in the immediately preceding month, it shall continue to be subject to all the provisions of this order until the third consecutive month in which a greater proportion of its Class I route disposition, except filled milk, is made in such other marketing area, unless notwithstanding the provisions of this paragraph it is regulated under such other order;

(b) A plant meeting the requirements of § 1120.12(a) which also meets the pooling requirements of another Federal order on the basis of route distribution in such other marketing area and from which, the Secretary determines, a greater quantity of Class I milk, except filled milk, is disposed of during the

month on routes in this marketing area than is disposed of in such other marketing area but which plant is fully regulated under such other Federal order.

(c) Each handler operating a plant described in paragraph (a) or (b) of this section shall, with respect to total receipts and utilization or disposition of skim milk and butterfat at such plant, report to the market administrator at such time and in such manner as the market administrator may require and allow verification of such reports by the market administrator.

(d) Each handler operating a plant specified in paragraph (a), if such plant is subject to the classification and pricing provisions of another order which provides for individual-handler pooling, shall pay to the market administrator for the producer-settlement fund on or before the 25th day after the end of the month an amount computed as follows:

(1) Determine the quantity of the receipts of reconstituted skim milk in filled milk disposed of on routes in the marketing area which was allocated to Class I at such other order plant. If reconstituted skim milk in filled milk is disposed of from such plant on routes in marketing areas regulated by two or more market pool orders, the reconstituted skim milk assigned to Class I shall be prorated according to such disposition in each area; and

(2) Compute the value of the quantity assigned in subparagraph (1) of this paragraph to Class I disposition in this marketing area, at the Class I price under this part applicable at the location of the other order plant (not to be less than the Class II price) and subtract its value at the Class II price.

[34 F.R. 18715, Nov. 22, 1969, as amended at 36 F.R. 8125, Apr. 30, 1971]

§ 1120.62 Obligations of handler oper. ating a partially regulated distributing plant.

Each handler who operates a partially regulated distributing plant shall pay to the market administrator for the producer-settlement fund on or before the 25th day after the end of the month either of the amounts (at the handler's election) calculated pursuant to paragraph (a) or (b) of this section. If the handler fails to report pursuant to §§ 1120.30 (b) and 1120.31 the information necessary to compute the amount

specified in paragraph (a) of this section, he shall pay the amount computed pursuant to paragraph (b) of this section:

(a) The amount resulting from the following computations:

(1) Determine the obligation that would have been computed pursuant to § 1120.70 for the partially regulated distributing plant if the plant had been a pool plant, subject to the following modifications:

(i) Receipts at the partially regulated distributing plant from a pool plant or an other order plant shall be allocated at the partially regulated distributing plant to the same class in which such products were classified at the fully regulated plants:

(ii) Transfers from the partially regulated distributing plant to a pool plant or an other order plant shall be classified at the partially regulated distributing plant in the class to which allocated at the fully regulated plant. Such transfers shall be allocated (to the extent possible) to receipts of the partially regulated distributing plant from pool plants and other order plants classified in the corresponding class pursuant to subdivision (i) of this subparagraph. Any such transfers remaining after the above allocation which are classified in Class I and on which an obligation is computed for the handler operating the partially regulated distributing plant pursuant to § 1120.70 shall be priced at the uniform price (or at the weighted average price) of the respective order regulating the handling of milk at the transferee plant, with such uniform price adjusted to the location of the nonpool plant but not to be less than the lowest class price of the respective order, except that transfers of reconstituted skim milk in filled milk shall be priced at the lowest class price of the respective order.

(iii) If the operator of the partially regulated distributing plant so requests, in lieu of the obligation pursuant to § 1120.70(e) and the credit specified in § 1120.82 (b) (2), the obligation for such handler shall include a similar obligation for each nonpool plant (not an other order plant) which serves as a supply plant for such partially regulated distributing plant by making shipments to such plant during the month equivalent to the requirements of § 1120.12(b) subject to the following conditions:

(a) The operator of the partially regulated distributing plant submits with his reports filed pursuant to §§ 1120.30 (b) and 1120.31 similar reports for such nonpool supply plant;

(b) The operator of such nonpool supply plant maintains books and records showing the utilization of all skim milk and butterfat received at such plant which are made available if requested by the market administrator for verification purposes; and

(c) The obligation for such nonpool supply plant shall be determined in the same manner prescribed for computing the obligation of such partially regulated distributing plant; and

(2) From the obligation computed pursuant to subparagraph (1) of this paragraph, subtract:

(i) The gross payments by the operator of such partially regulated distributing plant for Grade A milk received at the plant during the month from dairy farmers;

(ii) If subparagraph (1)(iii) of this paragraph applies, the gross payments by the operator of such nonpool supply plant for Grade A milk received at the plant during the month from dairy farmers; and

(iii) The payments by the operator of the partially regulated distributing plant to the producer-settlement fund of another order under which such plant is also a partially regulated distributing plant and like payments by the operator of an unregulated supply plant if subparagraph (1)(iii) of this paragraph applies to such plant.

(b) An amount computed as follows: (1) Determine the respective amounts of skim milk and butterfat disposed of as Class I milk on routes in the marketing area;

(2) Deduct the respective amounts of skim milk and butterfat received at the plant:

(i) As Class I milk from pool plants and other order plants, except that deducted under a similar provision of another order issued pursuant to the Act; and

(ii) From a nonpool plant that is not an other order plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such nonpool plant by handlers fully regulated under this or any other order issued pursuant to the Act is classified and priced as Class I milk and is not used as an offset on any

other payment obligation under this or any other order;

(3) Deduct the quantity of reconstituted skim milk in fluid milk products disposed of on routes in the marketing area;

(4) Combine the amounts of skim milk and butterfat remaining into one total and determine the weighted average butterfat content; and

(5) From the value of such milk at the Class I price applicable at the location of the nonpool plant (not to be less than the Class II price), subtract its value at the uniform price applicable at such location plus 5 cents (not to be less than the Class II price) and add for the quantity of reconstituted skim milk specified in subparagraph (3) of this paragraph its value computed at the Class I price applicable at the location of the nonpool plant (not to be less than the Class II price) less the value of such skim milk at the Class II price.

[29 F.R. 11026, July 30, 1964, as amended at 34 F.R. 18716, Nov. 22, 1969; 36 F.R. 8125, Apr. 30, 1971; 37 F.R. 23696, Nov. 8, 1972] § 1120.63 State institutions.

A State owned and operated institution or establishment which processes or packages fluid milk products distributed solely on its premises or those of other State institutions or establishments shall be exempt from all provisions of this part. Fluid milk products received at a pool plant from such institutions shall be treated on the same basis as though received from a producer-handler. Fluid milk products disposed of by a handler to such institutions shall be classified on the same basis as though disposed of to a producer-handler.

[34 F.R. 18716, Nov. 22, 1969]

DETERMINATION OF PRICES TO PRODUCERS § 1120.70 Computation of the net pool obligation of each pool handler.

For each month the market administrator shall compute the obligation of each pool handler by making the computations provided in paragraphs (a) through (e) of this section for each of his pool plants, and adding together the resulting totals:

(a) Multiply the quantity of producer milk in each class, as computed pursuant to § 1120.46(c), by the applicable class prices (adjusted pursuant to §§ 1120.51 and 1120.52);

(b) Add the amount obtained from multiplying the pounds of overage deducted from each class pursuant to § 1120.46 (a) (10) and the corresponding step of § 1120.46 (b) by the applicable class prices;

(c) Add the amount obtained from multiplying the difference between the Class II price for the preceding month and the Class I price for the current month by the hundredweight of skim milk and butterfat subtracted from Class I pursuant to § 1120.46 (a)(5) and the corresponding step of § 1120.46 (b);

(d) Add an amount equal to the difference between the value at the Class I price applicable at the pool plant and the value at the Class II price, with respect to skim milk and butterfat in other source milk subtracted from Class I pursuant to § 1120.46 (a) (3) and the corresponding step of § 1071.46 (b), except that for receipts of fluid milk products assigned to Class I pursuant to § 1120.46 (a) (3) (iv) and (v) and the corresponding step of § 1120.46 (b) the Class I price shall be adjusted to the location of the transferor plant; and

(e) With respect to skim milk and butterfat subtracted from Class I pursuant to § 1120.46 (a) (7) and the corresponding step of § 1120.46 (b) (excluding skim milk or butterfat in bulk receipts of fluid milk products from an unregulated supply plant to the extent that an equivalent amount of skim milk or butterfat disposed of to such plant by handlers fully regulated under this or any other order issued pursuant to the Act is classified and priced as Class I milk and is not used as an offset on any other payment obligation under this or any other order), add an amount equal to the value at the Class I price, adjusted for location of the nearest nonpool plant(s) from which an equivalent weight was received, but in no event shall such adjustment result in a Class I price lower than the Class II price.

[29 F.R. 11027, July 30, 1964, as amended at 34 F.R. 18716, Nov. 22, 1969; 36 FR. 8126, Apr. 30, 1971]

(a) Combine into one total the values computed pursuant to § 1120.70 for all pool handlers who made the reports prescribed in § 1120.30 (a) for the month and who have made the payments required pursuant to § 1120.82 for the preceding month;

(b) Subtract, if the weighted average butterfat content of the milk specified in § 1120.72 (a) is greater than 3.5 percent, or add, if such average butterfat is less than 3.5 percent, an amount computed by multiplying the amount by which the average butterfat content of such milk varies from 3.5 percent by the producer butterfat differential computed pursuant to § 1120.74 and multiplying the resulting figures by the total hundredweight of such milk;

(c) Add an amount equal to the sum of the deductions to be made for location differentials pursuant to § 1120.75;

(d) Add an amount equal to not less than one-half the unobligated balance on hand in the producer-settlement fund; and

(e) Subtract an amount computed by multiplying the total hundredweight of producer milk included pursuant to paragraph (a) of this section by 5 cents.

[29 F.R. 11027, July 30, 1964, as amended at 34 F.R. 2303, Feb. 18, 1969; 36 F.R. 8126, Apr. 30, 1971; 37 F.R. 23696, Nov. 8, 1972] § 1120.72 Computation of weighted average price and uniform price.

For each month the market administrator shall compute the weighted average price for all milk of 3.5 percent butterfat content, as follows:

(a) Divide the aggregate value computed pursuant to § 1120.71 by the sum of the following for all handlers included in such computations:

(1) The total hundredweight of producer milk; and

(2) The total hundredweight for which a value is computed pursuant to § 1120.70(e); and

(b) Subtract not less than four cents nor more than five cents. The result shall be the "weighted average price", and shall be the "uniform price" for producer milk.

[29 F.R. 11027, July 30, 1964, as amended at 34 F.R. 2303, Feb. 18, 1969]

§ 1120.74 Butterfat differential to producers.

The applicable uniform price or prices to be paid each producer pursuant to § 1120.80 shall be increased or decreased