Class II milk computed pursuant to (3) (ii) and (4) (ii) of this paragraph and the total pounds of butterfat computed pursuant to (ii) of this subparagraph from the total pounds of butterfat computed pursuant to (2) of this paragraph, which resulting quantity shall be allowed as plant shrinkage for the purposes of this paragraph (but in no event shall such plant shrinkage allowance exceed 2 percent of the total receipts of butterfat from producers by the handler) and shall be added to the result obtained in (ii) of this subparagraph; and (iv) divide the result obtained in (ii) of this subparagraph by 4 percent.

(6) Determine the classification of milk received from producers as follows:

(i) Subtract from the total pounds of milk in each class the total pounds of milk which were received from other handlers and used in such class.

(ii) Subtract from the total pounds of milk in each class the total pounds of milk, except emergency milk, which were received from sources other than producers and handlers and used in such class.

(iii) Subtract pro rata out of the remaining milk in each class the quantity of milk of the handler's own production.

(iv) Subtract from the total pounds of milk in each class an amount which shall be computed as follows: divide the total pounds of milk in each class by the total pounds of milk in all classes and multiply the percentage for each class by the total pounds of emergency milk received. Skimmed milk or (the milk equivalent of) cream received from sources other than producers under an emergency supply permit issued by the proper health authorities shall be treated as emergency milk for the purposes of this section, if such skimmed milk or (the milk equivalent of) cream is reported to the market administrator in the manner provided for emergency milk in (2) and (3) of § 946.5 (a).

(e) Reconciliation of utilization of milk by classes with receipts of milk from producers. (1) If the total utilization of milk in the various classes for any handler, as computed pursuant to (d) of this section, is less than the receipts of milk from producers, the market administrator shall increase the total pounds of milk in Class III for such handler by an amount equal to the differ

ence between the receipts of milk from producers and the total utilization of milk by classes for such handler.

(2) If the total utilization of milk in the various classes for any handler, as computed pursuant to (d) of this section, is greater than the receipts of milk from producers, the market administrator shall decrease the total pounds of milk in Class III for such handler by an amount equal to the difference between the receipts of milk from producers and the total utilization of milk by classes for such handler.

§946.4 Minimum prices-(a) Class prices. Subject to the provisions of (b), (c), and (d) of this section, each handler shall pay producers, at the time and in the manner set forth in § 946.8, not less than the following prices per hundredweight for the respective quantities of milk in each class computed pursuant to § 946.3 (d) and (e);

(1) Class I milk: The price for Class I milk shall be the price for Class III milk, plus the following amount:

Provided, That if the price so determined is less than the price computed by the market administrator in accordance with the following formula, such formula price shall be used: to the average wholesale price per pound of 92-score butter in the Chicago market as reported by the United States Department of Agriculture (or by such other Federal agency as may hereafter be authorized to perform this price reporting function) for the delivery period during which such milk was received, add 30 percent thereof, and multiply the resulting amount by 4.

(4) The prices used in determining the average manufacturing plant price pursuant to (3) of this paragraph shall be those quoted for milk received at the respective plants, without deductions for hauling or other charges to be paid by the farm shipper.

(b) Price of Class I milk for relief distribution. For Class I milk delivered by a handler to the residence of a relief client certified by a recognized relief agency, charged to such an agency, or disposed of by a handler under a progran. approved by the War Food Administrator for the sale or disposition of milk to low-income consumers, including persons on relief, such handler shall pay not less than the price for Class III milk, plus 12 cents.

(c) Butterfat differential to handlers. If any handler has received from producers milk containing more or less than 4 percent of butterfat, each handler shall add or deduct, per hundredweight of milk, for each one-tenth of 1 percent of butterfat above or below 4 percent, an amount computed by the market administrator as follows: to the average wholesale price per pound of 92-score butter in the Chicago market, as reported by the United States Department of Agriculture (or by such other Federal agency as may hereafter be authorized to perform this price reporting function) for the delivery period during which the milk was received, add 20 percent, and divide the result by 10.

(d) Class volume reconciliation adjustment. For the amount of milk involved in any reconciliation of class volumes of milk, pursuant to § 946.3 (e), the handler shall be debited or credited, as the case may be, at the Class III price; Provided, That if such handler received from producers milk with an average

test of butterfat of 4 percent or less and disposed of no milk as a Class III milk product, such debit or credit, as the case may be, shall be made at the Class II price.

§946.5 Reports of handlers -(a) Periodic reports. Each handler shall report to the market administrator, in the detail and on forms prescribed by the market administrator, as follows:

(1) On or before the 5th day after the end of each delivery period, the receipts during the delivery period of milk from producers (including milk produced by him), from handlers, and from any other source; and the utilization of all receipts of milk and cream for the delivery period.

(2) On or before the day emergency milk is received, his intention to receive such milk.

(3) On or before the 5th day after the end of each delivery period, the receipts during the delivery period of emergency milk-the quantity of such milk, the date or dates upon which such milk was received, the plant from which such milk was shipped, the price per hundredweight paid, or to be paid, for such milk, the utilization of such milk, and such other information with respect thereto as the market administrator may request.

(b) Reports as to producers. Each handler shall report to the market administrator, as soon as possible after first receiving milk from any producer, the name and address of such producer, the date upon which such milk was first received, and the plant at which such milk was received.

(c) Reports of payments to producers. Each handler shall submit to the market administrator on or before the 20th day after the end of each delivery period his producer pay roll for such delivery period which shall show for each producer the net amount of such producer's payment with the prices, deductions, and charges involved, and the total delivery of milk with the average butterfat test thereof.

(d) Verification of reports. (1) Each handler shall permit the market administrator or his agent, during the usual hours of business, to verify the information contained in reports submitted in accordance with this section, to checkweigh milk received from each producer, and to sample and test milk for butterfat.

(2) If, in the verification of the reports of any handler made pursuant to (a) of this section, it is necessary for the market administrator to examine the records of milk and cream handled in a plant of the handler from which no milk is disposed of in the marketing area, such handler shall make such records available to the market administrator. If, in the verification of the reports of any handler made pursuant to (a) of this section, the market administrator finds that, subsequent to the delivery period for which the verification is being made, any milk received during such delivery period was used in a class other than that in which it was first disposed of, such milk shall be reclassified accordingly and the adjustments necessary to reflect the reclassified value of such milk shall be made in the value of milk computed for such handler for the delivery period following such reclassification of milk.

§946.6 Handlers who are also producers-(a) Application of provisions. (1) No provision hereof shall apply to a handler who is also a producer and who purchases or receives no milk from producers or an association of producers other than that of his own production, except that such handler shall make reports to the market administrator at such time and in such manner as the market administrator may request and shall permit the market administrator to verify such reports.

(2) The market administrator, in computing the value of milk received by a handler operating a plant from which milk is disposed of in the marketing area, shall consider as Class III milk any milk or cream received in bulk from a handler who receives no milk from producers other than that of his own production. If such receiving handler disposes of such milk other than as Class III milk, the market administrator shall add to the total value of milk, computed pursuant to § 946.7 (a), the difference between the value of such milk at the Class III price and the value according to its actual usage.

§946.7. Determination of uniform prices to producers-(a) Computation of value of milk for each handler. For each delivery period the market administrator shall compute, subject to the provisions

of § 946.6, the value of milk of producers disposed of by each handler, by multiplying the quantity of such milk in each class by the price applicable to such class and by adding together the resulting class values: Provided, That if such handler has received milk (or cream), except emergency milk, from sources other than producers or handlers, as referred to in § 946.3 (d) (6) (ii), there shall be added to the value of milk determined for such handler pursuant to this paragraph an amount computed as follows: multiply the hundredweight of such milk (or milk equivalent of cream) by the difference between the Class III price and the price applicable to the class in which it was disposed.

(b) Computation and announcement of uniform prices. The market administrator shall compute and announce the uniform price per hundredweight of milk for each delivery period, as follows:

(1) Combine into one total the respective values of milk, computed pursuant to (a) of this section, for each handler who made the report prescribed by § 946.5 (a) for such delivery period and who has made the payments prescribed by § 946.8 (c);

(2) Subtract, if the average butterfat content of all milk received from producers is in excess of 4 percent, or add, if such average butterfat content is less than 4 percent, the total value of the butterfat differential applicable pursuant to § 946.8 (f);

(3) Subtract for each of the delivery periods of April, May, and June an amount representing 15 cents per hundredweight of milk received from producers by the handlers whose milk values are included under (1) of this paragraph;

(4) Add for each of the delivery periods of September, October, November, and December one-fourth of the aggregate amount subtracted under (3) of this paragraph for the preceding delivery periods of April, May, and June;

(5) Add an amount representing the cash balance in the producer-settlement fund, less the amount due handlers pursuant to § 946.8 (e) and less the aggregate of the amounts held pursuant to (3) of this paragraph for addition pursuant to (4) of this paragraph;

(6) Divide the amount computed pursuant to (5) of this paragraph by the total hundredweight of milk of producers;

(7) Subtract from the figure computed pursuant to (6) of this paragraph not less than 4 cents nor more than 5 cents per hundredweight for the purpose of retaining in the producer-settlement fund a cash balance to provide against errors in reports and payments or delinquencies in payments by handlers. This result shall be known as the uniform price for such delivery period for milk of producers containing 4 percent of butterfat; and

(8) On or before the 10th day after the end of each delivery period, notify each handler and publicly announce the uniform price per hundredweight computed pursuant to (7) of this paragraph, the Class III price, and the butterfat differentials provided by § 946.4 (c) and § 946.8 (f).

§ 946.8 Payment for milk-(a) Time and method of payment. On or before the 15th day after the end of each delivery period, each handler shall pay to each producer, for milk received during the delivery period, an amount of money representing not less than the total value of such producer's milk at the uniform price per hundredweight, subject to the butterfat differential set forth in (f) of this section. Any handler may make payments to producers in addition to the minimum payments required by this paragraph: Provided, That such additional payments are made to all producers supplying such handler with milk of the same quality and grade.

(b) Producer-settlement fund. The market administrator shall establish and maintain a separate fund known as the "producer-settlement fund" into which he shall deposit all payments made by handlers pursuant to (c) and (e) of this section, and out of which he shall make all payments to handlers pursuant to (d) and (e) of this section.

(c) Payments to the producer-settlement fund. On or before the 15th day after the end of each delivery period, each handler shall pay to the market administrator the amount by which the total value of the milk received by him from producers during the delivery period is greater than the amount of the minimum payments required to be made by such handler pursuant to (a) of this section.

(d) Payments out of the producersettlement fund. On or before the 20th day after the end of each delivery period, the market administrator shall pay to each handler for payment to producers the amount, if any, by which the total value of the milk received from producers by such handler is less than the amount of the minimum payments required to be made by such handler pursuant to (a) of this section. If at such time the balance in the producersettlement fund is insufficient to make all payments pursuant to this paragraph, the market administrator shall reduce uniformly such payments and shall complete such payments as soon as the necessary funds are available. No handler who, on the 20th day after the end of each delivery period, has not received the balance of payment due him from the market administrator shall be deemed to be in violation of (a) of this section if he reduces his payments to producers by not more than the amount of the reduction in payment from the producer-settlement fund.

(e) Adjustments of errors in payments. Whenever verification by the market administrator of payments by any handler discloses errors made in payments to the producer-settlement fund pursuant to (c) of this section, the market administrator shall promptly bill such handler for any unpaid amount and such handler shall, within 15 days, make payment to the market administrator of the amount so billed. Whenever verification discloses that payment is due from the market administrator to any handler, pursuant to (d) of this section, the market administrator shall, within 15 days, make such payment to such handler. Whenever verification by the market administrator of the payment by a handler to any producer for milk received by such handler discloses payment of less than is required by this section, the handler shall make up such payment not later than the time of making payment to producers next following such disclosure.

(f) Butterfat differential. In making payments to each producer, pursuant to (a) of this section, each handler shall add to the uniform price not less than, or subtract from the uniform price not more than, as the case may be, for each one-tenth of 1 percent of butterfat content above or below 4 percent in milk received from such producer, the amount

§946.9 Marketing services-(a) Deductions for marketing services. Except as set forth in (b) of this section, each handler shall deduct 4 cents per hundred-weight from the payments made directly to producers pursuant to § 946.8, with respect to all milk received by such handler from producers during each delivery period, and shall pay such deductions to the market administrator on or before the 15th day after the end of such delivery period. Such moneys shall be used by the market administrator to verify weights, samples, and tests of milk received by handlers from producers during the delivery period and to provide such producers with market information, such services to be performed in whole or in part by the market administrator or by an agent engaged by and responsible to him.

(b) Producers' cooperative association. In the case of producers for whom a cooperative association, which the War Food Administrator determines to be qualified under the provisions of the Act of Congress of February 18, 1922, as amended, known as the "Capper-Volstead Act," is actually performing, as determined by the War Food Administrator, the services set forth in (a) of this section, each handler shall make, in lieu of the deductions specified in (a) of this section, such deductions from the payments to be made directly to such producers pursuant to § 946.8, as are authorized by such producers, and, on or before the 15th day after the end of each

delivery period, pay over such deductions to the association rendering such services.

§ 946.10 Expense of administration. As his prorata share of the expense of the administration hereof, each handler, on or before the 15th day after the end of each delivery period, shall pay to the market administrator, with respect to all milk received by him from producers or produced by him, during such delivery period, an amount not exceeding 2 cents per hundredweight, the exact amount to be determined by the market administrator, subject to review by the War Food Administrator. Each cooperative association which is a handler shall pay such prorata share of expense on only that milk of producers caused to be delivered by it to plants from which no milk is disposed of in the marketing area.

§ 946.11 Effective time, suspension, and termination-(a) Effective time. The provisions hereof, or any amendment hereto, shall become effective at such time as the War Food Administrator may declare and shall continue in force until suspended or terminated, pursuant to (b) of this section.

(b) Suspension and termination. Any or all provisions hereof, or any amendment hereto, shall be suspended or terminated as to any or all handlers after such reasonable notice as the War Food Administrator may give, and shall, in any event, terminate whenever the provisions of the act authorizing it cease to be in effect.

(c) Continuing power and duty. (1) If, upon the suspension or termination of any or all provisions hereof, there are any obligations arising hereunder the final accrual or ascertainment of which requires further acts by any handlers, by the market administrator, or by any other person, the power and duty to perform such further acts shall continue notwithstanding such suspension or termination: Provided, That any such acts required to be performed by the market administrator shall, if the War Food Administrator so directs, be performed by such other person, persons, or agency as the War Food Administrator may designate.

(2) The market administrator, or such other person as the War Food Administrator may designate shall (i) continue in such capacity until discharged, (ii)