HAR §4-60-9. Minimum prices in the Honolulu 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 Honolulu milk shed are established on the basis of the utilization for class milk, class I skim milk, and class II milk as provided in this section. (See end of chapter) (b) In the Honolulu milk shed, the minimum price per hundredweight for class I milk, based on milk with a butterfat content of 3.3 per cent, shall be established by order of the board based on the formula in subsection (e), provided that the minimum price per hundredweight for class I milk in the Honolulu milk shed shall remain at $27.20 until the board establishes a new minimum price, by order, based on the formula in subsection (e). Any minimum price established by order of the board shall be subject to the approval of the governor and the notification requirements of section 157-33, Hawaii Revised Statutes. If the statutory authority to establish the minimum price, by order based on a formula, is repealed on June 30, 1998, the minimum price of class I milk in the Honolulu milk shed, based on milk with a butterfat content of 3.3 per cent, shall be established at $23.20 per hundredweight of milk, effective July 1, 1998. If the authority to establish the minimum price of class I milk in the Honolulu milk shed, by order based on a formula, is not repealed on June 30, 1998, the board or the manager shall continue to establish the minimum price by order based on the formula in subsection (e). The minimum price for class I milk shall be increased by fourteen cents per hundredweight for each .1 per cent of butterfat above 3.3 per cent or shall be decreased by fourteen cents per hundredweight for each .1 per cent of butterfat below 3.3 per cent. The minimum price for class I skim milk utilized in filled milk is established at the class I price less fourteen cents 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. The cost of butterfat shall be on a formula basis determined by the branch and distributor or producer-distributor. The formula shall be predicated upon the monthly average price of imported butterfat delivered to the processing plant, less reasonable costs incurred by the distributor or the producer-distributor, and shall be purchased by the processor at the established butterfat cost. A minimum class I fresh skim milk shall be paid for all milk produced over and above the class I milk utilized in all other class I products and shall 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 the 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. (e) The formula for determining the minimum price per hundredweight of class I milk in the Honolulu milk shed shall be: The minimum price per hundredweight of class I milk in the Honolulu milk shed equals the California price plus $12.20, provided that the minimum price shall not be less than $27.50 or more than $31.50. (f) The board delegates all of its powers and authority under subsection (b) to the manager. By order and based on the formula in subsection (e), the manager may establish the minimum price for class I milk in the Honolulu milk shed subject to the approval of the governor and the notification requirements of section 157-33,. Hawaii Revised Statutes. [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 4/14/97; am 12/26/97; am 8/7/06] (Auth: HRS §§, 157-13, 157-31) (Imp: HRS §§157-31, 157-33)