Section 100.983. Cost-justification defense.

 

(1)   General. In any proceeding against a dairy plant operator, in which the operator is alleged to have discriminated between pay classes or individual producers in violation of s. ATCP 100.981 , it is a defense for the operator to prove, based on documentary evidence which the operator possessed and relied upon at the time of the alleged discrimination, that the amount of the price discrimination per hundredweight between those pay classes or individual producers did not exceed, in any relevant pay period, the difference in the operator's relevant procurement cost per hundredweight between those pay classes or producers.

(2)   Volume premiums based on total milk volume. A dairy plant operator shall use the following relevant procurement costs per hundredweight to justify, under sub. (1) , discrimination resulting from the payment of volume premiums based on total milk volume:

(a) Pay class. The operator's relevant procurement cost per hundredweight for each pay class is the operator's "producer service cost per hundredweight" for that pay class, calculated according to sub. (4) (a) .

(b) Individual producer. The operator's relevant procurement cost per hundredweight for each individual producer is the operator's "producer service cost per hundredweight" for that individual producer, calculated according to sub. (4) (b) .

(3)   Volume premiums based on volume per pickup. A dairy plant operator shall use the following relevant procurement costs per hundredweight to justify, under sub. (1) , discrimination resulting from the payment of volume premiums based on volume per pickup:

(a) Pay class. The operator's relevant procurement cost per hundredweight for a pay class is the sum of the operator's "producer service cost per hundredweight" under sub. (4) (a) and "pickup cost per hundredweight" under sub. (5) (a) , except that the operator may not include "producer service cost per hundredweight" if the operator also pays volume premiums based on total volume.

(b) Individual producer. The operator's relevant procurement cost per hundredweight for an individual producer is the sum of the operator's "producer service cost per hundredweight" under sub. (4) (b) and "pickup cost per hundredweight" under sub. (5) (b) , except that the operator may not include "producer service cost per hundredweight" if the operator also pays volume premiums based on milk volume.

(4)   Producer service cost per hundredweight.

(a) For a pay class. To calculate a dairy plant operator's "producer service cost per hundredweight" for a pay class in any pay period:

1. Determine the operator's base period producer service cost, as defined in s. ATCP 100.98 (2) . Divide that cost by the average number of producers who shipped milk to the operator during the base period.

2. Multiply the result under subd. 1. by the number of producers in the pay class during the relevant pay period.

3. Divide the result under subd. 2. by the hundredweights of milk which the pay class produced during the relevant pay period. This yields the operator's "producer service cost per hundredweight" for that pay class in that pay period.

(b) For an individual producer. To calculate a dairy plant operator's "producer service cost per hundredweight" for an individual producer in any pay period:

1. Determine the operator's base period producer service cost, as defined in s. ATCP 100.98 (2) . Divide that cost by the average number of producers who shipped milk to the operator during the base period.

2. Divide the result under subd. 1. by the number of hundredweights of milk which the individual producer shipped to the operator during the relevant pay period. This yields the operator's "producer service cost per hundredweight" for that individual producer in that pay period.

(5)   Pickup cost per hundredweight.

(a) For a pay class. To calculate a dairy plant operator's "pickup cost per hundredweight" for a pay class in any pay period:

1. Determine the operator's base period pickup cost, as defined in s. ATCP 100.98 (3) . Divide that cost by the total number of farm stops made during the base period.

2. Multiply the result under subd. 1. by the number of stops made, during the relevant pay period, at dairy farms operated by producers in the pay class.

3. Divide the result under subd. 2. by the hundredweights of milk collected, during the relevant pay period, from producers in the pay class. This yields the operator's "pickup cost per hundredweight" for that pay class in that pay period.

(b) For an individual producer. To calculate a dairy plant operator's "pickup cost per hundredweight" for an individual producer in any pay period:

1. Determine the operator's base period pickup cost, as defined in s. ATCP 100.98 (3) . Divide that cost by the total number of farm stops made during the base period.

2. Multiply the result under subd. 1. by the number of stops made at the producer's dairy farm during the relevant pay period.

3. Divide the result under subd. 2. by the hundredweights of milk collected from the producer's dairy farm during the relevant pay period. This yields the operator's "pickup cost per hundredweight" for that individual producer in that pay period.

(6)   Cost accounting.

(a) At the request of a dairy plant operator, the department may approve alternative methods for calculating relevant procurement costs per hundredweight under this section. The department shall give its approval, if any, in writing.

(b) Costs under this section shall be determined on the basis of generally accepted accounting principles using the accrual method of accounting.

(7)   Value of non-price consideration per hundredweight. If a dairy plant operator seeks to cost-justify a discrimination in non-price consideration under s. ATCP 100.981 (2) , the operator shall calculate the value of that non-price consideration per hundredweight by dividing the value of the non-price consideration provided in each pay period by the hundredweights of milk which the recipient of that non-price consideration produced during that pay period.

Cr. Register, September, 1996, No. 489 , eff. 10-1-96 .

Note

If a dairy plant operator pays separate volume premiums based on total milk volume and volume per pickup, the operator must separately justify the total volume premiums under sub. (2) and the per-pickup volume premiums under sub. (3). Microsoft Windows NT 6.1.7601 Service Pack 1