HAR §4-60-11. Determination of utilization for payment

(a) In determining utilization of fresh milk for payment purposes, the quotas of each producer or producer-distributor shall be the basic guide in determining each producer’s or producer-distributor’s share of the class I requirements in the market. Class I requirements in any given month shall be prorated to quota holders to determine their share of class I utilization. Fresh milk produced and delivered in excess of total class I demand and declared to be class II or excess milk shall be paid for in a descending order. The monthly prorations for payment purposes, while serving to allocate class I requirements to all quota holders, shall not change the allocated quotas. Subsections (b) and (i) shall be used in making the prorations. (b) If total class I utilization equals the total of the quotas allocated in the Honolulu milk shed or Hawaii milk shed, each producer or producer- distributor in its respective milk shed, shall be paid a class I price for production delivered. (c) If, in a given month, total class I utilization is less than the total of the quotas in the Honolulu milk shed or Hawaii milk shed, each producer or producer-distributor, in its respective milk shed, shall receive a share of the total class I utilization based on total monthly production delivered within the producer or producer-distributor’s quota. (d) If, in a given month, total class I utilization is more than the total of the quotas in the Honolulu milk shed or Hawaii milk shed, each producer or producer-distributor, in its respective milk shed, shall receive a class I price for all milk produced and delivered within the producer or producer-distributor’s quota and the remaining class I milk shall be distributed on a pro rata basis to all producers and producer-distributors with over quota production. (e) If any producer or producer-distributor’s total monthly fresh milk production delivered is less than the producer or producer-distributor’s total monthly allocated quota, the pro rata share of the total class I utilization for the month shall be based on the producer or producer-distributor’s total production delivered. Distribution of all milk utilized in class I pro rata shall be for milk produced and delivered within quota and the result of this formula of payments shall be a same blend price for each licensed producer or producer-distributor for milk produced and delivered within the producer or producer-distributor’s total monthly quota. (f) Fresh milk received from sources other than licensed producers or licensed producer-distributors within the State of Hawaii shall be considered as excess milk if there is adequate production from licensed producers or licensed producer-distributors to meet class I and class II requirements. If adequate fresh milk is produced to meet all class I but not class II requirements, then that fresh milk from other sources shall be deemed class II. If there is inadequate production to meet class I requirements, then that fresh milk from other sources shall be deemed class I. (g) In computing utilization of milk, a distributor or producer- distributor may claim as plant shrinkage and route returns actual losses up to, but not to exceed one per cent of the total amount of fresh milk received for processing, and payment therefore to producers or producer-distributors shall be at the class II price. Payment by distributors or producer-distributors for plant shrinkage and route returns in excess on one per cent of the total amount of fresh milk received for processing shall be made at class I price. (h) To be considered as excess milk for pricing purposes, excess milk shall be of acceptable grade for all class I or class II use and shall have been made available for utilization. Excess milk may be disposed of by the distributor or producer-distributor in a manner that will realize the highest practical salvage value. Before disposing of excess milk by dumping or otherwise, the distributor or producer-distributor shall notify the branch and a representative of the branch shall certify such disposal. To establish a price to be paid producers or producer- distributors for excess milk within the excess pool, the following procedures shall prevail: (A) Each distributor or producer-distributor, in each month’s monthly report to the branch, shall report the volume and the salvage value of milk constituents, if any, of excess milk disposed of at the plant. (B) The branch shall combine all the salvage values of milk constituents reported in subparagraph (a) as received from the various distributors and producer-distributors. The total of all salvage values shall then be divided by the total of the volume of excess milk reported in subparagraph (a) to determine the price per hundredweight of said excess milk and, on the basis of this price, the branch shall compute the obligation of distributors and producer-distributors to producers of excess milk. (i) Whenever a distributor or producer-distributor rejects whole milk for any reason, a detailed accounting shall be submitted on a form prepared by the branch. Before disposing of rejected milk by dumping or otherwise, the distributor or producer-distributor shall notify the appropriate producer and the branch of the planned rejection and a representative of the branch shall certify to the disposition made of such rejected milk. [Eff 7/16/80; am and comp 12/1/85; am and comp 5/1/87] (Auth: HRS §157-13) (Imp: HRS §157-33)