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Federal Register / Vol. 86, No. 167 / Wednesday, September 1, 2021 / Rules and Regulations
employment returns to more normal levels there will continue to be food insecurity. The persistent need for nutrient-dense foods such as dairy products can be met, in part, through donations encouraged by the DDP.
As detailed later in this rule, the normal rulemaking process would be impracticable, unnecessary, and contrary to the public interest in light of the importance of distributing donated dairy products as quickly as possible to individuals and families. Therefore, AMS finds that there is good cause to forgo the notice and comment requirements in the Administrative Procedure Act APA for this rulemaking.
The following paragraphs give a general overview of how the DDP will operate. Detailed explanations of program provisions can be found later in the Program Provisions section.

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Who is eligible to participate?
Program eligibility is open to eligible dairy organizations EDOs, defined as dairy farmers either individually or as part of a cooperative or dairy processors that meet the following conditions: 1 Account to a Federal milk marketing order FMMO
marketwide pool; and 2 incur a qualified expense. Although the definition of EDO includes individual dairy farmers, many such farmers might not meet the other specified conditions to qualify as EDOs. For example, many such farmers would not incur qualified expenses because they do not donate eligible dairy products, since they do not have the infrastructure to process raw milk into such products. Those individual farmers who do meet the required conditions, however, would qualify as EDOs under statutes and this rule for both the DDP and MDRP.
As explained below, the DDP and MDRP refer to the same statutory EDO
definition; therefore, this rule amends the MDRP to reflect the statutory interpretation explained below.
1 Account to a FMMO Marketwide Pool The DDP authorizing statute 4 adopts the EDO definition contained in the statute establishing the MDRP.5 When AMS issued the final rule for the MDRP, it interpreted the statutory language, account to a FMMO marketwide pool, to apply to entities that are regulated by, and therefore file reports with, a FMMO.
Participation in the MDRP has been 4 Sec. 762a1 of the Consolidated Appropriations Act of 2021.
5 Sec. 1431 of the Agricultural Act of 2014 7
U.S.C. 9071a. Implementing regulations are codified at 7 CFR part 1147.

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limited, partly due to the requirement to be regulated.
The COVID19 pandemic and its impacts affected the entire United States. Supply chain disruptions described earlier were not limited to only those participating in a FMMO.
Consequently, Congress authorized the DPP through a broad relief package. In reviewing Congresss intent to encourage dairy product donation across the country, AMS has determined the interpretation of account to requiring regulation by a FMMO is too narrow; instead, an EDO could account to a FMMO marketwide pool by filing a report with a FMMO office.
Consequently, this rule revises the definition of eligible dairy organization for MDRP by removing the requirement that the EDO be regulated under a FMMO. It also adopts the same definition for the DDP.
The report the EDO files to account to a FMMO marketwide pool will list the fresh fluid products and/or bulk dairy commodity products purchased and how they were utilized to produce donated eligible dairy products. EDOs can contact their local FMMO office or access the DDP website to determine the applicable FMMO office where the report should be filed. Since EDOs may not know they will be donating product during the production month, reports may be filed retroactively. Filing of this report for the purpose of participating in the DDP will not cause the EDO to become regulated by the FMMO.

Dairy processors are often associated with buying fresh fluid milk products for processing into dairy products. The structure of the dairy industry is such that processors are also purchasing bulk dairy commodity products for further processing into retail packaging. For example, a processor buys 40-pound cheese blocks to further process and package into 8-ounce blocks or bags of shredded cheese typically preferred by consumers and eligible distributors alike. The DDP is intended to facilitate these types of product donations.
Therefore, in addition to processors who buy fresh fluid milk for processing, the DDP will allow processors who purchase and further process bulk commodities for donation to qualify as an EDO. To be considered an EDO, a secondary processor will also need to account to a FMMO marketwide pool as described earlier.
Once these two above conditions accounting to a FMMO and incurring a qualified expenseare met, EDOs participate in the program by forming partnerships with eligible distributors and then submitting a Dairy Donation and Distribution Plan Plan to AMS for approval. If an EDO or eligible distributor is looking for a partner, they may contact DDP Office for assistance.
Because regulations now include a definition of qualified expense, the definition of eligible dairy organization is further revised to cite that definition when referring to the requirement that an EDO must incur a qualified expense.

2 Incur a Qualified Expense
What will be reimbursed?
Upon Plan approval, EDOs can submit a Reimbursement Claim Form Claim Form to receive reimbursement for donations made. DDP will reimburse EDOs for the all or part of the following:
1 Input costsfresh fluid milk or bulk dairy commodity product milk equivalent used in the eligible dairy product; 2 manufacturing costs; and 3 transportation costs.

The statute further specifies that an EDO must incur a qualified expense.
Since only Class I fluid products are donated through the MDRP and most Class I processors are regulated by a FMMO, incurring a qualified expense in the MDRP is currently interpreted as paying minimum classified values into a FMMO pool because that is the requirement for processors regulated by a FMMO. As explained above, an EDO
no longer needs to be regulated under a FMMO. This rule adds a definition of qualified expense to MDRP
regulations to specify that a qualified expense is not tied to the FMMO
regulatory requirement of paying minimum classified values. The same definition also applies to the DDP.
EDOs incur a qualified expense by either purchasing fresh fluid milk product raw milk, skim milk, cream, or concentrated fluid milk products for processing into an eligible dairy product or purchasing bulk dairy commodity product for further processing into an eligible dairy product.

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3 Input CostsFresh Fluid Milk or Bulk Dairy Commodity Product Milk Equivalent In the FMMO system, milk is priced based on its end use. FMMO
classifications are generally: Class I
traditionally the highest class pricefor beverage fluid milk products such as whole, skim, nonfat, and flavored milks;
Class II for soft products such as yogurt, ice cream, and packaged fluid cream;
Class III for spreadable and hard cheeses; and Class IV for butter and milk products in dried form.
Announced monthly, FMMO-minimum classified prices reflect surveyed end-

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