§ 1809. Equitable farm prices
(a) The powers granted in this section and section 1810 shall apply only to the establishment
of a compact over-order price, so long as federal milk marketing orders remain in
effect in the region. In the event that any or all such orders are terminated, this
article shall authorize the Commission to establish one or more Commission marketing
orders, as herein provided, in the region or parts thereof as defined in the order.
(b) A compact over-order price established pursuant to this section shall apply only to
Class I milk. Such over-order price shall not exceed $1.50 per gallon. Beginning in
1990, and using that year as a base, the foregoing $1.50 per gallon maximum shall
be adjusted annually by the rate of change in the Consumer Price Index as reported
by the Bureau of Labor Statistics of the U.S. Department of Labor. For purposes of
the pooling and equalization of an over-order price, the value of milk used in other
use classifications shall be calculated at the appropriate class price established
pursuant to the applicable federal order or state dairy regulation and the value of
unregulated milk shall be calculated in relation to the nearest prevailing class price
in accordance with and subject to such adjustments as the Commission may prescribe
in regulations.
(c) A Commission marketing order shall apply to all classes and uses of milk.
(d) The Commission is hereby empowered to establish the minimum price for milk to be paid
by pool plants, partially regulated plants and all other handlers receiving milk from
producers located in a regulated area. This price shall be established either as a
compact over-order price or by one or more Commission marketing orders. Whenever such
a price has been established by either type of regulation, the legal obligation to
pay such price shall be determined solely by the terms and purpose of the regulation
without regard to the situs of the transfer of title, possession, or any other factors
not related to the purposes of the regulation and this compact. Producer-handlers,
as defined in an applicable federal market order, shall not be subject to a compact
over-order price. The Commission shall provide for similar treatment of producer-handlers
under Commission marketing orders.
(e) In determining the price, the Commission shall consider the balance between production
and consumption of milk and milk products in the regulated area, the costs of production
including the price of feed, the cost of labor including the reasonable value of the
producer’s own labor and management, machinery expense, and interest expense, the
prevailing price for milk outside the regulated area, the purchasing power of the
public, and the price necessary to yield a reasonable return to the producer and distributor.
(f) When establishing a compact over-order price, the Commission shall take such action
as necessary and feasible to ensure that the over-order price does not create an incentive
for producers to generate additional supplies of milk.
(g) The Commission shall, whenever possible, enter into agreements with state or federal
agencies for exchange of information or services for the purpose of reducing regulatory
burden and cost of administering the compact. The Commission may reimburse other agencies
for the reasonable cost of providing these services. (Added 1993, No. 57, § 1, eff. June 3, 1993.)