1. (a) When an over-market premium is owed to a producer, the premium shall be paid to the producer, or to the producer’s cooperative, by the dealer pursuant to the rules for payments to producers set forth below.
2. (b) If the dealer pays the premium to the cooperative, the cooperative shall make the calculations.

3. (c) The premium shall be calculated as follows:

   1. (1) Calculate the dealer’s Class I utilization price by multiplying the percentage of its milk produced in and sold in Arkansas as fluid milk by the Class I price as determined under the FMMO 7 (Dealer’s Class I Utilization % x Class I Price);
   2. (2) Calculate the FMMO Class I utilization price by multiplying the percentage of milk utilized as Class I milk within the FMMO 7 by the Class I price as determined under the FMMO 7 (FMMO 7 utilization % x Class I price); and
   3. (3) Subtract the FMMO 7 Class I utilization price from the dealer’s Class I utilization price (dealer’s Class I utilization price – FMMO Class I utilization price).
4. (d) The figure that results from the calculation above is the over-market premium that is owed to producers for every hundredweight of milk produced in and sold as fluid milk within Arkansas.

Codification Notes: “FMMO” means federal milk marketing order.