628 F.2d 11 | D.C. Cir. | 1980
Lead Opinion
Schepps Dairy, Inc. (Schepps), a regulated “handler”
First, and of foremost importance to the administration of federal milk-pricing orders, is whether Section 8c(5)(A) of the Agricultural Marketing Agreement Act of 1937
I. HISTORICAL AND ADMINISTRATIVE BACKGROUND
A. Federal Milk-Marketing Orders
For nearly a half-century, the Secretary of Agriculture has pursued a broad and vital role in the establishment of the prices that many handlers pay many producers of milk. The methodology of federal milk price-fixing has roots extending even deeper in our national economic history. As may readily be expected, a brief sketch of the genesis and evolution of federal milk-marketing orders will serve this appeal by
As everybody knows, raw milk is a highly perishable commodity. Without refrigeration, it is storable for only very brief periods and transportable for only very short distances. In the early 1900’s, dairy farmers — “producers”
[i]n order to meet fluid demand which is relatively constant, sufficiently large herds must be maintained to supply winter needs. The result is oversupply in the more fruitful months. The historical tendency prior to regulation was for milk distributors, ‘handlers,’ to take advantage of this surplus to obtain bargains during glut periods.10
To correct this discrepancy in bargaining power, Congress enacted legislation enabling dairy farmers to form cooperatives to pool their milk and eliminate overproduction.
The profitability of this system encouraged dairy farmers to increase their output. It also invited farmers selling a higher percentage of their milk for fluid purposes than the cooperative generally to abandon the pooling arrangement and deal individually, and in this manner to realize more than the blend price. This in turn germinated disputes among cooperatives and handlers who dealt with free-lance farmers, and as a consequence, milk markets became highly unstable during the late 1920’s.
Congress reacted by passing the Agricultural Adjustment Act of 1933, which established a licensing system designed to “reestablish prices to farmers at a level that will give agricultural commodities a purchasing
The present statutory provisions can be seen as a shoring, with the power of the Federal Government, of the classified pricing scheme initiated by the cooperatives. Not all of the milk industry is federally regulated, however.
Producers are largely indifferent to whether their milk is used for class I or II purposes, for they receive a blend price. On the other hand, processors must pay at least the minimum class I and II prices. The variance among handlers in the percentages of milk assigned to fluid and manufacturing purposes means that a handler may pay more or less than the producer from whom he is purchasing receives. Any handler who uses more than the average percentage of class I milk must pay the difference over the blend price into a “producers-settlement fund,” from which a handler who uses less than the average percentage of class I milk is compensated.
Minimum class I prices, however, are not necessarily uniform across the entire area covered by a milk-marketing order. The requirement of uniform prices is statutorily subject to adjustments “which compensate or reward the producer for providing an economic service or benefit to the handler.”
B. The Texas Marketing Order
In 1973, an association of milk producers proposed that the six then-existing Texas orders be merged. The Secretary solicited comments and additional recommendations from interested parties. Schepps, a handler with a processing plant in Dallas, advocated that the intra-market location adjustment be increased from 1.5 cents per hundredweight (cwt.) of milk per ten miles of transportation to 2.2 cents per cwt. for every ten miles thereof.
In 1975, the Secretary determined that the separate Texas orders should indeed be consolidated.
In the area to which the Texas order pertains, milk production is most efficient around Dallas. In 1975, the Secretary set the class I price in Dallas at the M-W price plus $2.32 per cwt., the preexisting estimate of transportation costs from Minnesota and Wisconsin.
Within the Texas market, location adjustments were based on similar principles. The Secretary adopted a zone system under which the minimum price paid by a handler increases proportionately to the handler’s distance from the Dallas producing area. Under the present order, handlers located in the Houston zone must pay 36 cents over the Dallas minimum price.
The Secretary adhered to a transportation rate of 1.5 cents per cwt. per ten miles in establishing the zone rates, over Schepps’ objections that transportation costs are 2.2 cents per cwt. per ten miles. The Secretary, acknowledging that the adjustment may not fully compensate for rising trans
The Class I price structure under the Texas order is not intended to assure each handler in the market that he will have cost compatibility at any location at which he may choose to distribute milk. Its purpose is to assure handlers, and ultimately consumers, of an adequate milk supply. There has been a reasonable demonstration that the present pattern of milk prices throughout the Texas area has attracted sufficient, but not excessive, raw milk supplies to handlers operating in the various parts of the State. Local considerations do suggest certain price changes at specific locations, and these have been dealt with in this decision. Nevertheless, the supply-demand balance in the market does not warrant a major restructuring of prices that necessarily would result if prices were to reflect a higher transportation rate.38
Schepps’ second proposition received equally unfavorable treatment. On the vote of a majority of milk producers, Section 8c(16)(B) of the Act requires the Secretary to terminate a milk order “at the end of the then current marketing period for [the] commodity.”
II. LOCATION ADJUSTMENTS
With the multifaceted regulatory process as the backdrop, we turn to an assessment of Schepps’ challenges to the Secretary’s order. Section 8c(5)(A) of the Act provides that milk-marketing orders shall
contain one or more of the following terms and conditions, and ... no others:
(A) Classifying milk in accordance with the form in which or the purpose for which it is used, and fixing, or providing a method for fixing, minimum prices for each such use classification which all handlers shall pay, and the time when payments shall be made, for milk purchased from producers or associations of producers. Such prices shall be uniform as to all handlers, subject only to adjustments for (1) volume, market, and production differentials customarily applied by the handlers subject to such order, (2) the grade or quality of the milk purchased, and (3) the locations at which delivery of such milk, or any use classification thereof, is made to such handlers.44
Analogously, Section 8c(5)(B) of the Act mandates price uniformity among producers, subject again to specified adjustments.
Decisions of the Supreme Court,
Adoption of Schepps reading of Section 8c(5)(A) would have extremely far-reaching consequences. It would require constant monitoring and modification of all inter-market and intra-market class I minimum prices in order to keep abreast of current transportation costs. For instance, the base class I price in Dallas, which is the sum of the M-W price and a transportation factor calculated at 1.5 cents per cwt. per ten miles, would have had to be increased immediately to account for then-present transportation costs — if Schepps’ estimate was accurate — of 2.2 cents per cwt. per ten miles.
The language of Section 8e(5)(A) itself runs somewhat counter to Schepps’ contentions. It is that uniform minimum prices are “subject . . . to” certain adjustments,
Schepps mounts no attack on the sufficiency of the factual predicate for the Secretary’s ultimate finding that the proposed increase in the location adjustment would not serve the policies of the Act.
III. TRADE BARRIERS
Schepps further contends that a location adjustment that fails to take full account of transportation costs constitutes a trade barrier violative of Section 8c(5)(G)’s injunction that
[n]o marketing agreement or order applicable to milk and its products in any marketing area shall prohibit or in any*20 manner limit, in the case of the products of milk, the marketing in that area of any milk or product thereof produced in any production area in the United States.66
This provision has been authoritatively construed by the Supreme Court.
That decision, treating as it did a situation completely foreign to that confronting us here, affords no haven to Schepps in its present position. As the Supreme Court has made clear, Section 8e(5)(G) is addressed primarily to obstacles to the marketing in one area of milk or milk products produced in another area, and we think the section is simply irrelevant in the circumstances of the case before us. Schepps is primarily contesting the Secretary’s selection of an intra-market location adjustment, not any economic barrier to entry of outside milk or its products.
Under Section 8c(16)(B) of the Act,
Prior to the litigation now under review, the Secretary never included a definition of “current marketing period,” for purposes of Section 8c(16)(B) termination, in his milk-marketing orders.
On the other hand, a producer-cooperative interested in assuring producer flexibility sought definition of the marketing period as “a calendar month or portion thereof.”
Sehepps challenges the Secretary’s designation of the one-month current marketing period on the ground of inadequate record support. As we have seen, Section 8c(4) ordains that each provision in a milk-marketing order must effectuate the policies of the Act.
In our view, Sehepps’ position is without merit. Sehepps has no real quarrel with the Secretary’s assessment of standard regulatory practices, nor with the basic fact that milk production and marketing occur on a continuous year-round basis. To require, as Sehepps advocates, that an agency’s long-standing and well known regulatory and accounting procedures be placed in evidence before the agency may take cognizance of them would be to mandate a most sterile formality.
In truth, the Secretary’s choice of a current marketing period of one month rested on policy considerations. To be sure, he gave predominant weight to protection of the producer-majority’s statutory freedom of choice, but he did not entirely sacrifice the interests of others in an orderly transition to deregulation. Sehepps has vigorously attacked the balance struck by the Secretary, but his action undeniably was the product of reasoned decisionmaking,
Affirmed.
. See 7 U.S.C. § 608c(l) (1976); 7 C.F.R. § 1126.9 (1979); Dairymen’s League Coop. Ass’n v. Brannan, 173 F.2d 57, 63-65 (2d Cir.), cert. denied, 338 U.S. 825, 70 S.Ct. 73, 94 L.Ed. 501 (1949); United States v. Adler’s Creamery, Inc., 107 F.2d 987, 989 (2d Cir. 1939), cert. denied, 311 U.S. 657, 61 S.Ct. 12, 85 L.Ed. 421 (1940); Panno v. United States, 203 F.2d 504, 509 (9th Cir. 1953).
. 40 Fed.Reg. 23438 (1975); 7 C.F.R. pt. 1126 (1979). Schepps sought administrative review of the Secretary’s order pursuant to 7 U.S.C. § 608c(15)(A) (1976). An administrative law judge rejected Schepps’ arguments, and the judicial officer to whom final administrative decisional authority had been delegated, see 37 Fed.Reg. 28475 (1972); 38 Fed.Reg. 10795 (1973), adopted the judge’s decision. Schepps Dairy, Inc., AMA No. M126-3 (Oct. 19, 1976), Joint Appendix (J. App.) 496. Schepps then sought review in the District Court, as provided for in 7 U.S.C. § 608c(15)(B) (1976).
. Schepps Dairy, Inc. v. Bergland, C.A. No. 76-1984 (D.D.C. Aug. 15, 1977) (memorandum), J. App. 30.
. 7 U.S.C. § 608c(5)(A) (1976).
. 7 U.S.C. § 608c(5)(G) (1976).
. 7 U.S.C. § 608c(16)(B) (1976).
. See generally, Leo Sheep Co. v. United States, 440 U.S. 668, 669-677, 99 S.Ct. 1403, 1405-1409, 59 L.Ed.2d 677, 680-685 (1979).
. See 7 C.F.R. § 1126.12 (1979); H. P. Hood & Sons, Inc. v. United States, 307 U.S. 588, 597-598, 59 S.Ct. 1019, 1024-1025, 83 L.Ed. 1478, 1485-1486 (1939); United States v. Mills, 315 F.2d 828, 834 (4th Cir.), cert. denied, 374 U.S. 832, 83 S.Ct. 1874, 10 L.Ed.2d 1054 (1963).
. See Ippolito & Masson, The Social Cost of Government Regulation of Milk, 21 J. Law & Econ. 33, 34 (1978).
. Zuber v. Allen, 396 U.S. 168, 173, 90 S.Ct. 314, 317, 24 L.Ed.2d 345, 349 (1969).
. Clayton Act, ch. 323, 38 Stat. 730 (1914); Capper-Volstead Act, ch. 57, 42 Stat. 388 (1922).
. Zuber v. Alien, supra note 10, 396 U.S. at 172, 90 S.Ct. at 317, 24 L.Ed.2d at 348-349; Ippolito & Masson, supra note 9, at 34-35.
. See, e. g., United States v. Rock Royal Coop., Inc., 307 U.S. 533, 554-555, 59 S.Ct. 993, 1004, 83 L.Ed. 1446, 1460 (1939); Fairmont Foods Co. v. Hardin, 143 U.S.App.D.C. 40, 42, 442 F.2d 762, 764 (1971).
. Zuber v. Allen, supra note 10, 396 U.S. at 174, 90 S.Ct. at 318, 24 L.Ed.2d at 349-350; Ippolito & Masson, supra note 9, at 35-36.
. Zuber v. Allen, supra note 10, 396 U.S. at 174, 90 S.Ct. at 318, 24 L.Ed.2d at 349-350.
. 48 Stat. 31, 32 (1933).
. A. L. A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935); Panama Ref. Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1935). See generally, Brannan v. Stark, 342 U.S. 451, 72 S.Ct. 433, 96 L.Ed. 497 (1952).
. 49 Stat. 753 (1935).
. 50 Stat. 246 (1937), as amended, 7 U.S.C. § 608c (1976).
. See note 30 infra and accompanying text. See also Dairylea Coop., Inc. v. Butz, 504 F.2d 80, 87 (2d Cir. 1974) (“the Act does not reach the retail sale of milk”).
. 7 U.S.C. §§ 608c(8)-608c(9) (1976); see Kessel, Economic Effects of Federal Regulation of Milk Markets, 10 J. Law & Econ. 51 (1967) (“[i]n effect, milk producers can impose control over the handlers”).
. Stark v. Wickard, 321 U.S. 288, 291, 64 S.Ct. 559, 562, 88 L.Ed. 733, 738-740 (1944). The Secretary does, however, scrutinize above-order prices to assure that they are not the product of monopolistic practices of cooperatives. See 7 U.S.C. § 292 (1976).
. See, e. g., United States v. Rock Royal Coop., Inc., supra note 13, 307 U.S. at 555, 59 S.Ct. at 1004, 83 L.Ed. at 1460; Grandview Dairy, Inc. v. Jones, 157 F.2d 5, 7 (2d Cir.), cert. denied, 329 U.S. 787, 67 S.Ct. 355, 91 L.Ed. 675 (1946).
. Fairmont Foods Co. v. Hardin, supra note 13, 143 U.S.App.D.C. at 45, 442 F.2d at 767, quoting Zuber v. Allen, supra note 10, 396 U.S. at 184, 90 S.Ct. at 323, 24 L.Ed.2d at 355.
. 7 U.S.C. § 608c(5)(A) (1976); see 7 U.S.C. § 608c(5)(B) (1976).
. See generally, H.R.Rep.No.1241, 74th Cong., 1st Sess. 9-10; Blair v. Freeman, 125 U.S.App. D.C. 207, 212-214, 370 F.2d 229, 234-236 (1966). See also Kessel, supra note 21, at 65-66.
. 40 Fed.Reg. 20023 (1975) (proposed order); 40 Fed.Reg. 23438 (1975) (final order).
. 40 Fed.Reg. 20023-20025 (1975).
. See generally, Ippolito & Masson, supra note 9, at 41—44; Babb, Banker & Nelson, Price Relations Among Federal Milk Orders, J. App. 595; Report to the Secretary of Agriculture by the Federal Milk Order Study Committee 23-24 (1962), J. App. 598-599.
. See, e. g., Friendship Dairies, Inc. v. Butz, 432 F.Supp. 508, 510 (E.D.N.Y.), aff’d, 573 F.2d 1290 (2d Cir. 1977); Ippolito & Masson, supra note 9, at 41.
. See 40 Fed.Reg. 20024 (1975); authorities cited supra note 29.
. 40 Fed.Reg. 20024 (1975).
. Id.
. 40 Fed.Reg. 20023 (1975) (proposed order); 7 C.F.R. § 1126.52(a)(1) (1979).
. Schepps Dairy, Inc., supra note 2, at 10, J. App. 506.
. Id. at 5, J. App. 501.
. 40 Fed.Reg. 20024-20025 (1975).
. Id. at 20024.
. 7 U.S.C. § 608c(16)(B) (1976).
. See 40 Fed.Reg. 20036 (1975); Marketing Assistance Program, Inc. v. Butz, C.A. No. 76-419 (D.D.C. June 29, 1976) (memorandum), aff'd sub nom. Marketing Assistance Program, Inc. v. Bergland, 183 U.S.App.D.C. 357, 562 F.2d 1305 (1977).
. 40 Fed.Reg. 20036 (1975).
. Id.
. Id. See note 85 infra.
. 7 U.S.C. § 608c(5)(A) (1976).
. 7 U.S.C. § 608c(5)(B) (1976).
. E. g., Zuber v. Allen, supra note 10; Brannan v. Stark, supra note 17.
. E. g., Fairmont Foods Co. v. Hardin, supra note 24; Blair v. Freeman, supra note 26. See also Borden, Inc. v. Butz, 544 F.2d 312 (7th Cir. 1976).
. Fairmont Foods Co. v. Hardin, supra note 24, 143 U.S.App.D.C. at 45, 442 F.2d at 767.
. See text supra at note 35.
. See 40 Fed.Reg. 20029 (1975).
. This the Secretary took pains to explain:
Contrary to the exceptor’s contentions, price uniformity for all handlers in a market does not contemplate a “precise” alignment of prices (or, in effect, raw milk costs) at different locations based on actual hauling costs. In fact, this is something that simply cannot be achieved. The cost of transporting milk differs from hauler to hauler (as well as between bulk milk and packaged milk if recognition were to be given, as desired by the exceptor, to packaged milk movements). Any reflection of hauling rates in an order could be no more than a reflection of the average hauling rate being experienced by all handlers in the market. This in itself precludes any precise price alignment for individual handlers. Also, it is not possible to establish a price structure under which each plant’s Class I price is lower, and at the same transportation rate, than the price at every other plant in the market. Such an arrangement is administratively unworkable in that it would require multiple Class I prices at each plant location.
A handler may distribute milk in any area he chooses. Should he decide to sell milk in an area where handlers have a lower cost, he must assume any competitive risks involved. It would be uneconomic to have the order provide a handler with cost comparability at any location at which he may choose to distribute milk.
Id. at 20025.
. See text supra at note 44.
. Cf. Burgess Constr. Co. v. M. Morrin & Son Co., 526 F.2d 108, 113 (10th Cir. 1975), cert. denied, 429 U.S. 866, 97 S.Ct. 176, 50 L.Ed.2d 146 (1976).
. S.Rep.No.1011, 74th Cong., 1st Sess. 10 (1935); H.R.Rep.No.1241, 74th Cong., 1st Sess. 9-10 (1935).
. 7 U.S.C. § 608c(4) (1976).
. 7 U.S.C. § 602(1) (1976); H.R.Rep.No.952, 74th Cong., 1st Sess. 1 (1935) (“[t]he primary objective set forth in the declaration of policy in the Agricultural Adjustment Act is to secure parity prices for farm products through balancing production with consumption”).
. 7 U.S.C. §§ 602(2), 608c(18) (1976).
. 7 U.S.C. § 602(4) (1976); H.R.Rep.No.2664, 83d Cong., 2d Sess. 19 (1954); United States v. Rock Royal Coop., Inc., supra note 13, 307 U.S. at 572, 59 S.Ct. at 1012, 83 L.Ed. at 1469 (the regulations were “designed ... to foster, protect and encourage interstate commerce by smoothing out the difficulties of the surplus and cut-throat competition which burdened this marketing” of milk); Dairylea Coop., Inc. v. Butz, supra note 20, 504 F.2d at 84.
. 7 U.S.C. § 608c(18) (1976).
. 40 Fed.Reg. 20024 (1975).
. This assuredly would be the case if the increased costs of Houston handlers were passed on to consumers of their milk.
. 40 Fed.Reg. 20034 (1975).
. In its principal brief in this court, Schepps frames the location-adjustment issue as a matter purely of law. Brief for Appellant at 4, 18-19. In its reply brief, however, Schepps questions the sufficiency of the record evidence supporting the Secretary’s decision on the location adjustment. Reply Brief for Appellant at 8- 11. Assuming arguendo that despite Schepps’ tardiness this issue should be considered, Schepps’ position is wholly unacceptable. See Schepps Dairy, Inc., supra note 2, at 9- 26, J. App. 505-522.
. 7 U.S.C. § 608c(4) (1976), quoted in part text supra at note 55.
. Sunny Hill Farms Dairy Co. v. Hardin, 446 F.2d 1124, 1130 (8th Cir. 1971), cert. denied, 405 U.S. 917, 92 S.Ct. 940, 30 L.Ed.2d 786 (1972). We do not think that footnote 12 in Zuber v. Allen, supra note 10, 396 U.S. at 179-180 n.12, 90 S.Ct. at 321 n.12, 24 L.Ed.2d at 352-353 n.12, supports Schepps’ reading of the statute. There the Court in passing referred to a zone system that undercompensated distant handlers, and suggested that this bolstered its suspicion that the nearby location differentials involved in that case were really designed to compensate nearby suppliers for their greater share of fluid milk sales. The case at bar is devoid of any challenge to the justification for a location differential, and features instead a claim that the location differential formulated should have been larger in amount.
. 7 U.S.C. § 608c(5)(G) (1976).
. Lehigh Valley Coop. Farmers, Inc. v. United States, 370 U.S. 76, 82 S.Ct. 1168, 8 L.Ed.2d 345 (1962).
. Id. at 77, 82 S.Ct. at 1169, 8 L.Ed.2d at 347.
. Id. at 84, 82 S.Ct. at 1172-1173, 8 L.Ed.2d at 351. See Lewes Dairy, Inc. v. Freeman, 401 F.2d 308, 313 (3d Cir. 1968), cert. denied, 394 U.S. 929, 89 S.Ct. 1187, 22 L.Ed.2d 455 (1969).
. Id. at 91-97, 82 S.Ct. at 1177-1180, 8 L.Ed.2d at 355-358.
. Id. at 97, 82 S.Ct. at 1180, 8 L.Ed.2d at 358.
. Id. See also Polar Ice Cream & Creamery Co. v. Andrews, 375 U.S. 361, 379, 84 S.Ct. 378, 388, 11 L.Ed.2d 389, 400 (1964) (§ 8c(5)(G) “was intended to prevent the Secretary of Agriculture from setting up trade barriers to the importation of milk from other production areas in the United States”); Lewes Dairy, Inc. v. Freeman, supra note 69, 401 F.2d at 315 (§ 8c(5) “was designed to insure that no regulation would be promulgated placing a greater burden on outside milk and milk products entering the market than was placed on milk and its products within the market[;] [t]hus the Secretary in his efforts to protect a particular market may require no more than equal treatment of pool and non-pool milk”).
. Lehigh Valley Coop. Farmers, Inc. v. United States, supra note 67, 370 U.S. at 98, 82 S.Ct. at 1180, 8 L.Ed.2d at 359.
. See notes 34-38 supra and accompanying text. To the extent that Schepps’ argument extends further to one of the inter-market barriers, it is sufficient to note that the current 1.5 cent-location adjustment imposes on Schepps — a regulated handler within the Texas marketing area — no limitation on outside milk or milk products brought into that area which is not already applicable to milk and milk products produced within the area.
. See Part II supra.
. See Dairylea Coop., Inc. v. Butz, supra note 20, 504 F.2d at 88; Sunny Hill Farms Dairy Co. v. Hardin, supra note 65, 446 F.2d at 1131 (the location differential “is specifically authorized by the Act and reasonable under the circumstances of the case[;] [i]t thus cannot be construed as establishing an illegal trade barrier”).
. 7 U.S.C. § 608c(16)(B) (1976).
. Id.
. Id.
. 7 U.S.C. § 608c(16)(A) (1976).
. See 40 Fed.Reg. 20036 (1975); Marketing Assistance Program, Inc. v. Butz, supra note 40, aff’d sub nom. Marketing Assistance Program, Inc. v. Bergland, supra note 40.
. 40 Fed.Reg. 20036 (1975).
. Id.
. Id.
. See note 43 supra and accompanying text. See also note 86 infra.
. The Secretary said:
Milk is produced and marketed by dairy farmers on a continuous basis. Although the normal lactation period of a cow is about 300 days, the “dry” periods within a herd are customarily staggered. Thus, each dairy farmer has a continuing daily production of milk. Because of its highly perishable nature, such milk must be delivered within a day or two to plants for processing, the particular delivery schedule usually being dependent upon the storage capacity at the farm.
ln view of this daily and continuous character of milk production and marketing, there is no well-defined marketing period for milk. Since the inception of Federal milk orders in the 1930’s, however, milk has been accounted and paid for under the regulatory program on a monthly basis. At the end of each month, handlers are required to report all receipts of producer milk and make final payment therefor in accordance with the utilization of the milk during the month. Each successive month constitutes, in effect, a new marketing period for the producer and the handler. The consistent administration of milk orders on this basis over many years suggests that a defined marketing period of any duration other than a month would be totally inconsistent with long-standing regulatory practice in the fluid milk industry.
40 Fed.Reg. 20036 (1975).
Schepps attempts to counter this reasoning by adverting to the federal milk price-support program, which traditionally has been reviewed and revised on an annual basis. See J. App. 407-437 (materials on price-support program). As the Secretary has noted, however, the price-support program involves a different statute, 7 U.S.C. § 1446 (1976), as amended by Pub.L. No. 95-113, 91 Stat. 920 (Sept. 29, 1977), with different regulatory objectives. Brief for Appellee at 54-55.
. 40 Fed.Reg. 20036 (1975).
. See notes 55-65 supra and accompanying text.
. 7 U.S.C. § 608c(4) (1976).
. See, e. g., Fairmont Foods Co. v. Hardin, supra note 24, 143 U.S.App.D.C. at 45, 442 F.2d at 767; Lewes Dairy, Inc. v. Freeman, supra note 69, 401 F.2d at 315; Borden, Inc. v. Butz, supra note 47, 544 F.2d at 316; Jones v. Bergland, 456 F.Supp. 635, 646 (E.D.Pa.1978). See generally, 5 U.S.C. § 706(2)(E) (1976). In light of our holding today that the Secretary’s action passes muster under the substantial evidence rule, we need not consider whether these cases have been undermined by our recent decision in Marketing Assistance Program, Inc. v. Bergland, supra note 40, 183 U.S.App.D.C. at 359-361, 562 F.2d at 1307-1309 (milk marketing orders are “really instances of notice and comment rulemaking”).
. See, e. g., Memphis Light, Gas & Water Div. v. FPC, 163 U.S.App.D.C. 130, 135, 500 F.2d 798, 803 (1974); Alabama-Tennessee Natural Gas Co. v. FPC, 359 F.2d 318, 336-339 (5th Cir.), cert. denied, 385 U.S. 847, 87 S.Ct. 69, 17 L.Ed.2d 78 (1966); cf. Public Sys. v. FERC, 196 U.S.App.D.C. 66, 74, 606 F.2d 973, 981 (1979).
. See cases cited supra note 91. See also McDaniel v. Celebrezze, 331 F.2d 426 (4th Cir. 1964).
. “The paramount objective is to see whether the agency, given an essentially legislative task to perform, has carried it out in a manner calculated to negate the dangers of arbitrariness and irrationality in the formulation of rules for general application in the future.” Automotive Parts & Accessories Ass’n v. Boyd, 132 U.S.App.D.C. 200, 208, 407 F.2d 330, 338 (1968). See also Marketing Assistance Program, Inc. v. Bergland, supra note 40, 183 U.S. App.D.C. at 359-361, 562 F.2d at 1307-1309 (milk marketing orders are “really instances of notice and comment rulemaking”).
. See notes 55-59 supra and accompanying text. The purpose of what is now § 8c(16)(B) was elucidated by C. C. Davis, Agricultural Adjustment Administrator, at a congressional hearing on the 1935 amendments to the Agricultural Adjustment Act:
The termination of any marketing agreement or license would be required if termination is favored by a majority of the producers concerned; that is, while you put into effect a certain marketing plan and in that case require the support of two-thirds of the producers, the pending amendment provides that the marketing agreement and license must be terminated if one-half or more of the producers affected favor its termination. This is a limitation on the Secretary’s authority. It completes the assurance that the farmers will keep control over their own affairs, in any allotment or quota plans.
*23 Hearings on H.R. 5585 before the House Committee on Agriculture, 74th Cong., 1st Sess. 16 (Feb. 26, 1935). And in summing up, the witness reiterated “that the amendments are so drawn as to make sure that the farmers’ wishes will govern in marketing plans . . .” Id at 17.
.7 U.S.C. § 608c(15)(B) (1976).
Dissenting Opinion
dissenting.
I regret that I am unable to concur in my colleagues’ views herein. In brief, my view is that although the Secretary has considerable discretion in setting the minimum price for the zone, the three adjustments which the statute calls for him to make as to the minimum price are each based on ascertainable factors. Thus the transportation cost adjustment is to be based on the ascertainable transportation cost, and demonstrable deviations from a measure of real cost are impossible.