HAR §4-60-10. Minimum prices in the Hawaii milk shed

(a) Minimum prices to be paid by distributors or producer-distributors to producers or producer- distributors for fresh milk produced for sale in the Hawaii milk shed are established on the basis of the utilization for class I milk, class I skim milk, and class II milk as provided in this section. (See end of chapter) (b) The minimum price of class I milk is established at $35.53 per hundredweight of milk, based on milk with a butterfat content of 3.3 per cent. The minimum price for class I milk shall be increased by seven cents per hundredweight for each .1 per cent of butterfat above 3.3 per cent up to and including 3.5 per cent or shall be decreased by seven cents per hundredweight for each .1 per cent of butterfat below 3.3 per cent. Minimum price for class I skim milk utilized in filled milk is established at the class I price less seven cent per hundredweight for each .1 per cent of butterfat up to 3.3 per cent to allow for the required usage of any fat or oil other than butterfat. A minimum class I fresh skim milk price shall be paid for all milk produced over and above the class I milk utilized in all other class I products and will be allocated pro rata to all quota holders up to their monthly quotas. A distributor or producer-distributor may utilize class I skim milk produced in excess of the total monthly quotas provided that it is paid for at the above established price. (c) The minimum price for class II milk is established on a formula basis to reflect the cost to the distributor or producer-distributor of replacing constituents contained in class II milk. The formula shall be predicated upon the monthly average price of imported milk constituents delivered to the processing plant, less reasonable costs incurred by the distributor or producer-distributor in making the constituents available and usable in class II uses. On or before the eighth day of each calendar month, each distributor or producer-distributor shall report its computed replacement cost for milk constituents for the previous month based on the factors in this subsection. The replacement costs and computations therefore shall be subject to audit by the branch. In its monthly report, the distributor or producer-distributor shall report the total pounds of fresh milk utilized in class II uses. The branch shall then compute the total value of all fresh milk utilized in class II uses by each distributor or producer-distributor based on their prior month’s replacement costs and shall then pool the costs of all distributors and producer-distributors to determine an average price for all class II milk utilized. Payments to producers shall be based upon the class II price. (d) Actual plant shrinkage and route returns up to, but not to exceed one per cent of the total fresh milk received for processing shall be paid for at the fresh milk replacement cost, class II price or on a negotiated formula basis. [Eff 7/16/80; am 2/1/81; am and comp 12/1/85; am and comp 5/1/87; am 7/1/91; am 1/1/92; am 10/1/92; am 12/9/04; am 6/18/07] (Auth: HRS §157-13) (Imp: HRS §157-33)