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2 CAR § 123-101. Purpose
2 CAR § 123-101. Purpose.
(a) The purpose of these part is to:
(1) Implement Acts 2021, No. 521, codified at Arkansas Code § 2-10-104; and
(2) Ensure that Arkansas milk producers receive Class 1 prices for milk utilized or sold as fluid milk in this state.
(b) It is the understanding of the Arkansas Board of Animal Health that:
(1) Prices for milk produced and sold in Arkansas are currently only regulated at the federal level, pursuant to the state of Arkansas’s inclusion in Federal Milk Marketing Order Number 7;
(2) The federal regulations set the minimum prices of milk paid to producers based on the average utilization of milk within the entire marketing order region, which includes several southeastern states;
(3) Traditionally, the utilization of milk produced and sold in the State of Arkansas as fluid milk is much higher than the average utilization of milk as fluid milk in the Federal Milk Marketing Order Number 7;
(4) As a result, Arkansas milk producers are often underpaid for the milk they produce, making it necessary for the state to require a premium to fairly compensate milk producers;
(5) The overwhelming majority of milk producers in Arkansas are members of cooperative associations;
(6) Due to various economic reasons, the cooperative associations often negotiate with milk dealers to reach agreements for price premiums that exceed the Federal Marketing Order’s established monthly minimum milk price;
(7) However, milk producers remain underpaid for the milk they produce as the premiums paid to cooperatives are not sufficiently passed on to producers; and
(8) It is therefore necessary to establish clear circumstances that cause Arkansas milk producers to be underpaid for milk, and to require that premium payments are fairly passed through to producers in those circumstances.