New York Laws
Article 21 - Milk Control
258-M - Orders Fixing Prices for Milk and Marketing Agreements.

§ 258-m. Orders fixing prices for milk and marketing agreements. 1.
Upon the petition of a producers' bargaining agency of the production
area supplying a marketing area, such agency representing at least
thirty-five per centum of the producers of milk therein, alleging the
existence of conditions so affecting the orderly marketing of milk in
such area that public interest requires regulation of prices of milk in
such area and equalization of the burden of surplus milk and expense of
handling it, and sharing the benefits of the fluid market in order that
the public policy declared in section two hundred fifty-eight-k of this
chapter shall be effective, and upon the written request of the
petitioner, the commissioner shall set, without a hearing, an interim
price for class I fluid milk, and may set an interim price for class II
and/or III milk. In determining such interim price, the commissioner
shall take into consideration, among other factors: (a) the prices being
paid to producers; (b) the costs of production to producers; (c) any
changes in the ratio of index of prices received for milk to index of
prices paid by dairy farmers; (d) the level of prices paid to producers
in adjoining markets; and (e) the interests of the general public. Such
interim price shall be set within five days of such written request and
to the extent practicable apply to any milk purchased on or after the
first day of the month following such determination. Such interim price
shall be in effect until the final determination regarding the petition
is made pursuant to the provisions of this article and is enforceable
and effectuated, provided however, such interim price shall be in effect
for no longer than one hundred eighty consecutive calendar days. During
such time when the interim price is in effect, the commissioner shall
provide for and enforce a mechanism for compensatory payments and have
the authority to establish and administer an equalization pool
throughout the entire state or any part thereof. Such interim price
shall be reviewable by a person aggrieved in a proceeding pursuant to
article seventy-eight of the civil practice law and rules. The
effectiveness or enforcement of such interim price regulation shall not
be restrained, stayed, or enjoined pendente lite. In addition, it shall
be the duty of the commissioner to call a public hearing for the
consideration of said petition and to give notice thereof by advertising
such call in such newspaper or newspapers of general circulation in such
marketing area as the commissioner deems advisable. Such notice shall
specify a time and a place within the marketing area at which the
hearing will be held and at which the applicants and other persons,
including producers, distributors and consumers and associations
thereof, may be heard. In not more than fifteen days upon receiving the
petition the commissioner shall set the hearing date in accordance with
the above provisions. Such hearing shall commence in not less than
fifteen days but not more than twenty days of the notice specifying the
date and time of the hearing. Such hearing shall conclude within fifteen
days of commencement, provided however, if the commissioner determines
in writing that the hearing has been conducted with due diligence but an
extension is necessary to accord due process, he or she may extend the
hearing for a period not to exceed ten days. If after such hearing the
commissioner shall find, upon the record of the proceeding that
conditions referred to in section two hundred fifty-eight-k of this
chapter exist so affecting the orderly marketing of milk in such area,
that public interest requires that the public policy declared in section
two hundred fifty-eight-k of this chapter shall be effective and that it
is necessary that prices for milk to producers and associations of
producers be fixed by the commissioner, as expressed by section two
hundred fifty-eight-k of this chapter, and that it is favored by at
least sixty-six and two-thirds per centum of the producers of milk

produced in the production area for said marketing area voting,
individually or through cooperatives, in the referendum, the
commissioner may by order fix and determine for such marketing area fair
and equitable minimum prices to be paid to producers. The determination
of the commissioner as to whether or not by order to fix and determine
minimum prices shall be made within forty days after such hearing,
effective on the first day of the month following the determination. If
the commissioner determines not to fix and determine minimum prices, he
shall state his reasons in writing and transmit same to the petitioner,
the governor, the temporary president of the senate and the speaker of
the assembly. Such price fixing order or orders shall be rescinded
effective at the end of the current month after a public hearing
whenever the commissioner shall find either that such conditions have
ceased to exist or that such termination is favored by at least
thirty-five per centum of the producers of milk handled within such
market. For purposes of this subdivision, unless otherwise specified,
days shall mean business days.

2. The commissioner may, from time to time upon like petition, during
the existence of such conditions revise the prices so fixed, after
holding a hearing thereon. Whenever as herein provided a producers'
bargaining agency of a production area supplying a marketing area shall
file a petition and/or amended petition praying for any relief provided
in this article, it shall be lawful for a distributors' agency of such
marketing area to file a petition and/or amended petition providing for
the consideration of issues therein raised relative to the petition
and/or amended petition of the producers' bargaining agency, or to an
existing milk marketing order. Upon receipt of any such petition of a
producers' bargaining agency for any such marketing area, the
commissioner shall mail a copy thereof to the secretary of the
distributors' bargaining agency for such marketing area, if any, which
meets the qualifications set forth in the last sentence of this
paragraph. If such distributors' bargaining agency files either a
petition or an amended petition with the commissioner or notifies the
commissioner that no such petition will be filed, the commissioner may
proceed to give notice of hearing as provided in subdivision one of this
section; otherwise the commissioner shall defer the giving of such
notice of hearing for a period of ten days after such distributors'
bargaining agency has received from the commissioner a copy of the
petition and/or amended petition of the producers' bargaining agency.
The commissioner shall mail a copy of the distributors' bargaining
agency petition to the secretary of the producers' bargaining agency and
shall give such notice of such petition by publication or otherwise as
the commissioner deems advisable. Evidence upon the proposals set forth
in both the producers' and distributors' bargaining agency petitions
shall be received at the same hearing. The commissioner shall not be
required to furnish a copy of any petition of a producers' bargaining
agency to a distributors' bargaining agency nor shall such distributors'
bargaining agency be entitled to file a petition and to be heard as
herein provided unless within the calendar year preceding the filing
with the commissioner of the producers' bargaining agency petition such
distributors' bargaining agency shall have filed with the commissioner a
list of its distributor members and the names and addresses of its
officers and unless such distributors' bargaining agency represents not
less than sixty per centum of the quantity of milk distributed in such
marketing area, exclusive of that distributed by cooperative
corporations, as determined by the reports submitted to the commissioner
during the preceding license year.

The provisions of this subdivision relative to distributors'
bargaining agency petitions shall not apply to any milk marketing area
or order, jointly administered by the commissioner and any officer or
agency of the United States or of any other state.

3. Before fixing any prices pursuant to the provisions of the two
preceding paragraphs, the commissioner shall investigate what are
reasonable costs and charges for producing, hauling, handling,
processing and/or other services performed in respect of milk and what
prices for milk in the market or markets affected by such prices and
under varying conditions will be most in the public interest. The
commissioner shall take into consideration the balance between
production and consumption of milk, the cost of production and
distribution, including compliance with all sanitary regulations in
force in the market or markets affected, the cost of feeding stuffs used
in the production of milk, the supply of milk in such market and the
purchasing power and welfare of the public. The commissioner shall fix
prices to producers on the basis of the use thereof in the various
classes, grades and forms. Any prices fixed or approved by the
commissioner shall be deemed to be prima facie reasonable.

4. In determining the approval or request for an order as herein
provided or the termination thereof on the part of producers the
commissioner shall consider the approval, request or favor in respect
thereto by any bona fide cooperative association of producers engaged in
marketing milk within such marketing area as the approval, request or
favor either of making an order or of termination thereof of the
producers who are under contract with such cooperative association of
producers.

The commissioner shall appoint a referendum advisory committee to
assist and advise him in the conduct of the referendum. Such committee
shall review referendum procedures and the tabulation of results, and
shall advise the commissioner of its findings. A record of the
committee's advice, recommendations and findings shall be kept and made
available to any person upon request. The final certification of the
referendum results shall be made by the commissioner. The committee
shall consist of three members. One member shall be appointed from at
least three nominations of producers submitted by the producers
bargaining agency, one shall be an independent producer, and one shall
be appointed from at least three nominations of producers submitted by
any general farm organization. The members of the committee shall not
receive a salary but shall be entitled to actual and reasonable expenses
in the performance of their duties.

5. Marketing agreements. It shall be lawful for a producers'
bargaining agency of the production area supplying a marketing area and
a distributors' bargaining agency for such marketing area to enter into
marketing agreements as to the prices to be paid by distributors to
producers for milk sold or otherwise utilized in said marketing area, as
to rules and regulations covering the method of determining the
proportion of the product of the entire dairy herd of a producer which
shall be accepted and paid for pursuant to such price or prices, as to
reasonable trade practices affecting the relations between producers and
distributors in such market. Such agreement may also contain provisions
for a committee to administer the provisions of said marketing
agreement. No agreement, however, shall be effective until a copy
thereof signed by all persons parties thereto shall have been filed with
the commissioner.

If the commissioner shall have reason to believe that any such
marketing agreement results in a monopoly or restraint of trade to such
an extent that the price of milk is unduly enhanced by reason thereof,

he shall serve upon the parties to such agreement a complaint stating
his charge in that respect, to which complaint shall be attached or
contained therein a notice of hearing specifying a date and place, not
less than thirty days after the service thereof, requiring the parties
to such marketing agreement to show cause why an order should not be
made directing them to cease and desist from such monopolization or
restraint of trade. The parties so complained of may at the time and
place so fixed show cause why such order should not be entered. The
evidence given at such a hearing shall be taken under such rules and
regulations as the commissioner shall prescribe, reduced to writing and
made a part of the record therein. If upon such hearing the commissioner
shall be of the opinion that such marketing agreement results in
monopoly or restraint of trade to such an extent that the price of milk
in the marketing area affected by such agreement is unduly enhanced, he
shall issue and cause to be served upon the parties to said agreement an
order reciting the facts found by him and directing them to cease and
desist from such undue enhancement of prices. If such order is not
obeyed by the parties to such agreement, the commissioner shall file
with the attorney-general a certified copy of the order, evidence of
such disobedience and all of the records in the proceeding, and the
attorney-general may apply to the supreme court for an order or decree
affirming, modifying or setting aside such order or for making such
other order or decree as the court may deem equitable in the premises.

Upon application of the parties to said marketing agreement and after
a hearing, as provided in subdivision one of this section, the
commissioner may by order make the provisions of said marketing
agreement, relative to prices to producers and other provisions thereof,
effective as to all producers, distributors and handlers in said market
notwithstanding that they may not have approved of said agreement if he
shall find that the terms and conditions of said agreement are fair,
equitable and in public interest, that the agreement has been fairly
entered into without fraud, that public interest so requires, in order
to effectuate the declaration of policy contained in section two hundred
fifty-eight-k of this chapter, that the proportion of the producers and
distributors who have executed such agreement or shall have approved
same upon the hearing is equal to that required for an order under
subdivision one of this section, and further provided that the
commissioner shall determine that the prices set forth in said marketing
agreement are reasonable and proper prices, as required by this section
for prices fixed by an order of the commissioner. Any order so issued
shall terminate effective on the last day of the current month, and in
the same manner and upon the same request after a hearing, as provided
for the termination of an order in subdivision one of this section.

6. If approved by sixty-six and two-thirds per centum of the producers
affected voting individually or through their cooperative in the
referendum, any order or marketing agreement fixing the price to
producers under either subdivision one or subdivision five of this
section for market or markets, may provide for an equalization of prices
to all producers of the production area of the market affected so that
each producer or co-operative association shall receive the same base
price for all milk delivered subject to reasonable differentials for
quality and location and for services. Any such order may contain
provisions requiring from persons who bring milk or cream into the
marketing area regulated by such order payments on all such milk or
cream whenever such persons are not otherwise regulated by the order.

In order to effect such equalization of prices to producers the
commissioner shall require a monthly report from each dealer receiving
milk from producers for such market showing the disposition of all milk

handled by the reporting dealer in such market and shall thereafter
require payment by each dealer, to a trust company designated as a
fiscal agent by the commissioner, of any amount by which the sum
otherwise due by such dealer to its producers in accordance with the
prices fixed by such order exceeds the equalized base price as
determined by the commissioner from such reports, which amounts so paid
to said fiscal agent, the commissioner shall direct it to pay to those
dealers whose reports show that the base prices they will pay their
producers in accordance with such order are less than the equalized base
price as so determined by the commissioner, for repayment in turn by
such dealers to their producers so as to bring all lower rates of
payment up to the equalized base price. Such payments to said fiscal
agents shall not be deemed to be state funds. Such equalization shall
include milk of all grades and produced by all breeds of cows, and may
include milk, approved by a board or boards of health having
jurisdiction in a marketing area designated in an order under this
section, which was produced by a dealer.

The provisions of this subdivision shall not become operative as to
the New York state metropolitan market production area, however, until
pursuant to federal or state statutes, or by action of authorities duly
constituted and authorized thereunder, prices to producers are so
equalized and made effective throughout all the production area of the
New York state metropolitan market area.

7. After the commissioner shall have fixed prices in any area or
approved prices in a marketing agreement to be charged or paid for milk
in any form included in the definition of milk as used in this article
whether by class, grade or use, it shall be unlawful for a milk dealer
to buy or offer to buy milk at any price less than such price or prices
as shall be applicable to the particular transaction, and no method or
device shall be lawful whereby milk is bought or sold or offered to be
bought or sold at a price less than such price, or prices, as shall be
applicable to the particular transaction, whether by a discount or
rebate, or free service, or advertising allowance, or a combined price
for such milk together with another commodity or commodities, or service
or services, which is less than the aggregate of the prices for the milk
and the price or prices for such other commodity or commodities, or
service or services, when sold or offered for sale separately or
otherwise.

8. It is the intent of the legislature that the instant, whenever that
may be, that the handling within the state by a milk dealer of milk
produced outside of the state becomes a subject of regulation by the
state, in the exercise of its police powers, the restrictions set forth
in this article respecting such milk so produced shall apply and the
powers conferred by this article shall attach.

9. No marketing agreement or order shall prevent a cooperative
association from blending as heretofore the proceeds of all sales and
distributing to its producers the resultant blended price subject to
deductions and differentials as provided by its contracts with its
producers, but no such cooperative association shall sell milk at prices
lower than the prices fixed by the commissioner in an order for the
markets affected.

10. Any marketing agreement or order of the commissioner may provide
for necessary deductions from payments to producers to cover the cost of
administering such marketing agreement or order, including the cost of
auditing milk dealers' classifications, and the cost of other services
to producers. The funds so derived from such deductions shall be
deposited in an account within the miscellaneous special revenue fund
and shall not be deemed to be state funds. The commissioner may, in his

or her discretion, appoint an administrator and such assistant
administrators as in his or her opinion may be necessary to administer
the terms of any agreement or order, and the persons so appointed shall
be deemed to occupy positions confidential to the commissioner and may
be appointed without competitive examination. All other persons employed
by the commissioner in the administration of such a marketing agreement
or order shall be selected in accordance with the civil service law and
rules.

11. Any marketing agreement or order of the commissioner may provide
(a) for payments to cooperative associations of producers in cases where
the commissioner finds that such associations are actually rendering
marketing services to producers under contract with them, which services
enure to the benefit of all producers in the market or to the benefit of
the market as a whole and may include the conduct and maintenance,
jointly with other cooperative associations, of plans or campaigns, by
advertisement or otherwise, including participation in similar regional
or national plans or campaigns, to promote the increased consumption of
milk and milk products, to acquaint the public with the dietary
advantages of milk and milk products and with the economy in the diet,
and to command, for milk and dairy products, consumer attention
consistent with their importance and value, or that such associations
are rendering services in the control and disposition of surplus for the
benefit of the market; (b) for payment to milk dealers or to cooperative
associations of producers which operate milk receiving stations or
manufacturing plants for services rendered by them, in the stabilizing
of the supply of fluid milk and cream within the market at times either
of surplus or of shortage of milk; and (c) for adjustments in payments
to producers to effect a more favorable seasonal balance as between the
production and consumption of milk. Such adjustments may be made in the
form of deductions and additions to the fund to equalize prices of milk
to producers, or by apportioning among producers the total value of all
milk subject to equalization on the basis of their marketings of milk
during a representative period of time. Any such deductions from the
fund to equalize prices shall not be deemed to be state funds. Such
moneys shall be held in reserve and used solely for additions to the
fund to equalize prices, in such manner as the order may provide. The
commissioner shall make no provision for adjustment in payments under
this section with respect to a state milk marketing order, except on the
petition of a producers' bargaining agency of a production area
supplying a marketing area and after a public hearing and subsequent
producer approval as required by this section.

12. "Distributor" as used in this and the preceding section means a
milk dealer as defined in this article who delivers milk to stores
and/or consumers within the marketing area, from a milk depot or milk
plant owned and/or operated by such dealer.