(a) Minimum prices
to be paid by distributors or producer-distributors to producers or
producerdistributors for fresh milk produced for sale in the Honolulu 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. Upon petition by a
producer or producerdistributor, the board may grant a waiver allowing the
producer or producerdistributor to sell its milk at less than the minimum price
if it is demonstrated that the lower price takes into consideration the
standards for determining the minimum prices for milk set forth in section
157-32,
Hawaii Revised Statutes.
(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by order based on a formula, is repealed on June 30, 1998, the minimum price of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repealed on June 30, 1998, the board or the manager shall continue to establish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 price 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 producerdistributor 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.
(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.
