Failure to Justify Discrimination
Under this emergency rule, if the Department finds that a dairy plant operator has not adequately justified the operator's discriminatory milk prices, the Department may give the dairy plant operator written notice of that finding. A notice is not a prerequisite to an enforcement action against the violator; however, the notice is open to public inspection under subch. II of ch. 19, Stats.
Injury to Producer
This emergency rule provides that, in an administrative or court enforcement action, evidence that a complaining producer was paid less than another producer shipping milk to the same dairy plant during the same pay period is presumptive evidence that the complaining producer has been injured.
Calculating Milk Procurement Costs
Under this emergency rule, if a dairy plant operator wishes to justify price discrimination between producers based on a difference in procurement costs between those producers, the operator must calculate procurement costs per hundredweight as follows:
STEP 1: Calculate the operator's average total cost, per producer per pay period, for all of the following:
* Dairy farm field service costs.
* Costs to test dairy farm milk shipments.
* Producer payroll expenses.
* Dairy farm license fees and other routine expenses incurred in connection with the licensing and regulation of dairy farms.
* Other costs which the Department allows in writing before the discrimination occurs.
STEP 2: Calculate the operator's average total cost, per producer per pay period, for milk collection and hauling services. An operator may calculate a separate average cost for producers with every-other-day pickup versus producers with every day pickup. An operator may not include:
* Collection or hauling costs which are charged to a producer.
* Costs which the hauler incurs before the first farm and after the last farm on the hauling route.
STEP 3: Add the above costs. To obtain the procurement cost per hundredweight for each producer, divide the sum by the producer's average milk production in hundredweights per pay period. When comparing procurement costs between volume pay classes, each class member's production is considered to be the same as the class average.
Dairy Plant Operator May Charge Procurement Costs to Producers
Nothing in this rule prohibits a dairy plant operator from charging each producer for the full cost of procuring that producers' milk. For example, a dairy plant operator may charge each producer the actual cost, per hundredweight, of hauling that producer's milk; however, a dairy plant operator may not shift hauling charges or other procurement costs between producers in a manner that discriminates between producers.
Fiscal Estimate
This emergency rule interprets s. 100.22, Stats., relating to price discrimination in milk procurement. This emergency rule will not increase DATCP's costs of administering this program, but will facilitate compliance and enforcement of s. 100.22, Stats. There will be nominal one-time costs associated with the rule-making, including costs to print, mail and hold a hearing on the emergency rule.
Initial Regulatory Flexibility Analysis
This emergency rule interprets s. 100.22, Stats., which prohibits price discrimination in milk procurement. This emergency rule applies to approximately 180 dairy plants that purchase milk from Wisconsin's approximately 27,000 dairy farmers. Some of the dairy plants and virtually all of the dairy farmers are small businesses as defined under s. 227.114 (1) (a), Stats.
This emergency rule prohibits a dairy plant operator from discriminating between milk producers in the amount paid for milk unless the discrimination is based on a difference in milk quality, is justified by a difference in procurement costs, or is justified in order to meet a competitor's price. This emergency rule establishes standards which a dairy plant operator must meet in order to establish a defense based on milk quality, cost-justification or meeting competition.
This emergency rule also spells out enforcement standards and procedures. The Department may require a dairy plant operator to file documentation justifying discriminatory prices, and may take enforcement action against an operator who fails to provide adequate justification. The Department may ask the Attorney General or a district attorney to prosecute a violator in court, and may take action against a violator's dairy plant license.
This rule requires dairy plant operators, many of whom are “small businesses,” as defined by s. 227.114 (1) (a), Stats., to justify discriminatory milk prices; however, that justification is already required by s. 100.22, Stats. This rule does not add to current statutory requirements, but merely clarifies those requirements.
Effective enforcement of s. 100.22, Stats, and this emergency rule may result in a reduction of milk volume premiums to large dairy farmers, most of whom fall within the statutory definition of “small businesses”; however, effective enforcement may also result in increased payments to small dairy farmers, most of whom are also “small businesses”.
Agriculture, Trade &
Consumer Protection
The State of Wisconsin Department of Agriculture, Trade and Consumer Protection will hold public hearings on a proposed Department rule related to the Soil and Water Resource Management program (chapter ATCP 50, Wis. Adm. Code).
Written Comments
The hearings will be held at the times and places shown below. The public is invited to attend the hearings and make comments on the proposed rule. Following the public hearings, the hearing record will remain open until March 15, 1996, for additional written comments. An interpreter for the hearing-impaired will be available upon request for this hearing. Please make reservations for a hearing interpreter by February 9, 1996, by writing or calling Don Houtman at the phone number or address given below or by calling the Department's TTY number (608) 224-5058.
Copies of Rule & Contact Person
Copies of the proposed rule are available free of charge from:
Don Houtman, (608) 224-4625
2811 Agriculture Drive
P.O. Box 8911
Madison, WI 53708-8911
Hearing Information
All locations are handicapped accessible.
Five hearings are scheduled:
February 26, 1996 Informational meeting
Monday commencing at 2:30 p.m.,
County Board Room followed by the first
Jackson Co. Courthouse hearing of the day.
307 Main Street A second hearing of
BLACK RIVER FALLS the day will commence
WISCONSIN at 6:30 p.m.
February 27, 1996 Informational meeting
Tuesday commencing at 10:00 a.m.,
County Board Mtg. Room followed by the hearing.
Law Enforcement Center
Rusk Co. Courthouse
311 East Miner Ave.
LADYSMITH, WI
February 29, 1996 Informational meeting
Thursday commencing at
Meeting Room 1:00 p.m., followed by
Co. Hwy. Dept. Bldg. the hearing.
1313 Holland Ave.
APPLETON, WI
(Use East Entrance, Please)
March 4, 1996 Informational meeting
Monday commencing at 2:30 p.m.,
Room 208 followed by the first
Jefferson Co. Courthouse hearing of the day.
320 South Main St. A second hearing of
JEFFERSON, WI the day will commence
at 6:30 p.m.
March 5, 1996 Informational meeting
Tuesday commencing at 2:30 p.m.,
Meeting Room followed by the hearing.
Iowa Co. Sheriff's Office
1205 N. Bequette St.
(Hwy 18 & 23 intersection)
DODGEVILLE, WI
Written comments will be accepted until March 15, 1996.
Analysis Prepared by the Dept. of Agriculture, Trade & Consumer Protection
Statutory authority: ss. 92.05 (3) (c) and 93.07 (1)
Statute interpreted: ch. 92
This rule repeals and recreates ch. ATCP 50, Wis. Adm. Code, related to the Wisconsin Soil and Water Resource Management Program under ch. 92, Stats. This rule incorporates major changes made in the program by 1991 Wis. Act 309. This rule also reorganizes and clarifies current rules.
