# Title 51 — Milk Marketing Board

## Article 51-03 — Market Areas and Stabilization Plans

## Chapter 51-03-02 — Stabilization Plans for Market Area 1

Component Pricing
### § 51-03-02-01. Authority, savings, and scope.

1. The provisions and prices contained in this stabilization plan are promulgated pursuant to
authority delegated to the North Dakota milk marketing board as set forth in North Dakota
Century Code sections 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16.
2. If any provision of this stabilization plan is hereafter ruled to be illegal or invalid by any tribunal
of superior jurisdiction, such ruling shall not affect the balance of this plan as a whole or any
part thereof which can be given effect without the provision so ruled to be invalid or illegal.
3. Any persons subject to this stabilization plan must be considered in violation hereof if he or it
engages in such violation, directly or indirectly, or through an agent, employee, trust,
subsidiary, or affiliated company or corporation.
History: Amended effective August 1, 1995; September 1, 1996.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-02. Terminology.

Names of products and finished product test specifications set forth herein are classifications for
price purposes under the Milk Stabilization Act only and are not intended to interfere with or supersede
applicable labeling, packaging, weights and measures, and sanitation laws and regulations.
History: Amended effective August 1, 1995; September 1, 1996.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16

### § 51-03-02-03. Contract termination.

Any existing institutional contracts must be renegotiated in compliance with the prices ordered
herein within ninety days after the effective date of this stabilization plan or on the new bid date,
whichever is sooner.
History: Amended effective August 1, 1995; September 1, 1996.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-04. Prices to public institutions.

Bid prices for milk products and shake and soft serve sold to state institutions in market area 1
must not be below the minimum or above the maximum wholesale prices as stated herein by this
stabilization plan.
History: Amended effective April 14, 1980; November 1, 1980; November 1, 1983; August 1, 1995;
September 1, 1996.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-05. Classification of milk usage.

1. Class I usage will include the following:
a. Raw milk, regular or creamlike milk, standard milk, whole pasteurized milk, special milk,
homogenized milk, fortified milk, plain or creamed buttermilk, flavored milk, flavored skim
milk, skim milk, low fat milk, concentrated milk, milkshake and ice cream mixes
containing less than twenty percent total solids and plant shrinkage attributable to dairy
farmer and other source milk in excess of two percent of current dairy farmer receipts,
plant overages, and closing packaged inventories.
b. Any product which contains milk solids not fat, butterfat, or a milk derivative, and which is
manufactured in the semblance of one of the products listed in subdivision a.
2. Class II usage will include the following: milk used in the manufacture of half and half, coffee
cream, cottage cheese, creamed cottage cheese, whipped cream, sour cream, low fat cottage
cheese, dry curd cottage cheese, yogurt, eggnog, and all frozen dairy products as defined in
North Dakota Century Code section 4.1-26-01.
3. Class III usage will include the following: milk used in the manufacture of butter, cheese (other
than cottage cheese or creamed cottage cheese), nonfat milk, skim condensed milk, whole
dry milk, dried cream, evaporated milk, sweetened condensed milk, skim milk separated and
dumped and plant shrinkage of two percent or less of current dairy farmer receipts and closing
milk inventories.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-06. Prices to be paid dairy farmers and others - Midpoint, differential, and multiple

component pricing.
1. Class I (market area 1). Commencing July 1, 2000, the minimum price to be paid by milk
processors to dairy farmers and others coming within the scope of this plan f.o.b. the

processor's plant for milk which is ultimately utilized in class I (milk products) shall be the
hundredweight price as established by the formula below. However, the minimum price to be
paid by milk processors to dairy farmers and others coming within the scope of this plan f.o.b.
the processor's plant for milk which is ultimately utilized in class I (milk products) shall not be
less than $13.76 per hundredweight.
The following formula shall be used when the federal market order no. 30 class I dairy farmer
hundredweight price increases or decreases to the next higher or lower federal market order
no. 30 class I dairy farmer hundredweight trip point. Minimum North Dakota class I dairy
farmer and wholesale and retail prices to be adjusted by using the current federal market
order no. 30 class I dairy farmer price on the formula below. Move to the next higher
increment and utilize the North Dakota minimum class I dairy farmer price as listed on the
formula below. Adjustments, if required, will be monthly.
Market Area 1
Federal Market Order No. 30 North Dakota Minimum Minimum Wholesale Price Per
Class I Dairy Farmer Price Class I Dairy Farmer Price On-Half Gallon 2 Percent Milk
18.59 19.22 1.541
18.38 19.01 1.531
18.17 18.80 1.521
17.96 18.59 1.511
17.75 18.38 1.501
17.54 18.17 1.491
17.33 17.96 1.481
17.12 17.75 1.471
16.91 17.54 1.461
16.70 17.33 1.451
16.49 17.12 1.441
16.28 16.91 1.431
16.07 16.70 1.421
15.86 16.49 1.411
15.65 16.28 1.401
15.44 16.07 1.391
15.23 15.86 1.381
15.02 15.65 1.371
14.81 15.44 1.361
14.60 15.23 1.351
14.39 15.02 1.341
14.18 14.81 1.331
13.97 14.60 1.321
13.76 14.39 1.311
13.55 14.18 1.301

13.34 13.97 1.291
13.13 13.76 Base 1.281
Based on $.21 per hundredweight increments and butterfat differential of $.053.
Differentials above or below the midpoint of 3.5 percent will be those used in federal market
order no. 30.
Adjustments in wholesale and retail prices for other sized containers should also increase or
decrease, or both, proportionally to the one-half gallon use.
2. Class II. Commencing July 1, 2000, the minimum price to be paid by milk processors to dairy
farmers and others, coming within the scope of this stabilization plan f.o.b. the processor's
plant after the effective date of this plan for milk which is ultimately utilized in class II, shall be
the class II price per hundredweight for federal market order no. 30, adjusted to a 3.5 percent
butterfat basis. Butterfat differentials above or below the midpoint of 3.5 percent will be those
used in federal market order no. 30.
3. Class III. Commencing July 1, 2000, the minimum price to be paid by milk processors to dairy
farmers and others coming within the scope of this stabilization plan f.o.b. the processor's
plant for milk, which is ultimately utilized in class III, except that used in the manufacture of
butter, shall be priced under a "multiple component pricing" system to include protein, other
solids, and somatic cell count. The respective prices for these components, in a given month,
and computations thereon will be those used by federal market order no. 30. Two additional
components, butterfat and producer price differential, will use as a basis the class III price per
hundredweight for federal market order no. 30 less a four percent administrative and
transportation allowance to the nearest full cent adjusted to a 3.5 percent butterfat basis.
Butterfat differentials above or below the midpoint of 3.5 percent will be those used in federal
market order no. 30. Commencing July 1, 2000, the minimum price to be paid by milk
processors to dairy farmers and others coming within the scope of this stabilization plan, f.o.b.
the processor's plant for milk and cream which is ultimately used in class III for the
manufacture of butter, shall be the monthly national agricultural statistical service (NASS)
survey butter price less a $.05 per pound administrative and transportation allowance rounded
to the nearest cent.
If a processing plant pays to its dairy farmers and others a premium above the class III
minimum raw milk price as established herein, such price including the premium, shall
become the minimum class III raw milk price for audit purposes for said plant, and said plant
shall not be entitled to dilute the class I and class II raw milk prices for payment of said
premiums on said class III raw milk.
4. The foregoing class I, II, and III dairy farmer prices shall be automatically adjusted each
month, without further amendment to this stabilization plan based upon the prices ordered for
federal market order no. 30.
History: Amended effective July 1, 2000.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16

### § 51-03-02-07. Prices and hauling allowances for bulk milk in interarea and interstate

commerce.
No allowance for freight may be charged to dairy farmers on bulk milk shipped interarea or
interstate between plants.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-08. Hauling rates from farm to plant.

Any substantial or significant increase or raising of rates charged to dairy farmers for hauling their
milk from farm to plant after the effective date of this stabilization plan and without good cause shown
may be considered to be dilution of the prices paid said dairy farmers for their raw milk and subject to
investigation by the board to determine if there is a violation of this stabilization plan.
History: Amended effective August 1, 1995; September 1, 1996.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-09. Products not specified.

Any unassigned quantity of new products hereafter marketed but not specifically priced under this
plan shall be assigned a price which will be the logical multiple or fraction of the nearest quantity of
product to which a specific price has been fixed by this stabilization plan, until a specific price is
ordered by this board as a result of the regular hearing procedure and based upon actual cost
experience of the industry. This board must be given thirty days' written notice prior to the introduction
of a new product in the market area.
History: Amended effective August 1, 1995; September 1, 1996.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-10. Minimum wholesale and retail prices for class I milk products - Market area 1.

Publication of this section would be inexpedient because it changes frequently on an emergency
basis.
Copies of this section may be obtained by forwarding a request to:
Director
North Dakota Milk Marketing Board
410 East Thayer Avenue, No. 2
Bismarck, ND 58501-4049
### § 51-03-02-11. Minimum wholesale and retail prices for class II milk products - Market area 1.

Publication of this section would be inexpedient because it changes frequently on an emergency
basis.
Copies of this section may be obtained by forwarding a request to:
Director
North Dakota Milk Marketing Board
410 East Thayer Avenue, No. 2

Bismarck, ND 58501-4049
### § 51-03-02-12. Minimum wholesale prices for shake and soft serve mix.

Publication of this section would be inexpedient because it changes frequently on an emergency
basis.
Copies of this section may be obtained by forwarding a request to:
Director
North Dakota Milk Marketing Board
410 East Thayer Avenue, No. 2
Bismarck, ND 58501-4049
### § 51-03-02-12.1. Authorized discounts on milk products - Market area 1.

The following authorized maximum volume discounts are authorized on sales of milk products. Said
discounts must be based upon the average total monthly purchases of milk products from all suppliers
for the preceding year.
Discount Rate
Monthly Volume Full Service Limited Service
0 gal. to 799 gal. 0% 3%
800 gal. to 1600 gal. 2% 5%
1601 gal. to 2400 gal. 3% 6%
2401 gal. to 3200 gal. 4% 7%
3201 gal. to 8000 gal. 5% 9%
8001 gal. and over 7% 11%
A limited service program should be authorized in market area 1 for grocery store retailers. This limited
service program should consist of the following:
1. Maximum delivery of three times per week to store cooler.
2. All orders preordered prior to delivery.
3. No in-store service, i.e., cleaning cases, stamping products, etc.
4. Personnel for store resets will be limited to dairy case setting only.
5. No returns on merchandise, except when product is found to be damaged or defective at time
of delivery check-in.
6. No callback on delivery days.
7. No volume discounts from processors or distributors will be allowed on charged sales not paid
by a retailer within four weeks (twenty-eight days) of the statement date. All statements must
be on a weekly basis, the weekly cutoff date must remain the same.
A full service program should be authorized in market area 1 for retailers whose total monthly
purchases of milk products from all suppliers for the preceding year exceed eight hundred gallons
[3028.33 liters] per month. This full service program should consist of the following:
1. Supplier will be responsible for maintaining adequate supply of product.
2. Product will be stocked and displayed on delivery days.

3. Product will be sold on a guaranteed sales basis.
4. Personnel for store resets will be limited to dairy case resets only.
5. No volume discounts from processors or distributors will be allowed on charged sales not paid
by a retailer within four weeks (twenty-eight days) of the statement date. All statements must
be on a weekly basis, the weekly cutoff date must remain the same.
History: Effective June 1, 1990; amended effective February 1, 1992; August 1, 1993.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-12.2. Minimum dock pickup provisions - Market area 1.

Market area 1 will have a minimum dock pickup price list as determined by subsection 11 of twelve
percent or twenty-three percent off the respective market areas minimum established wholesale price
list (except cultured products) less an additional two percent prompt payment. Prices will change as per
section 51-03-02-06. The following stipulations apply to receive this dock price:
1. "Dock" means dock at the plant of a processor where milk products are actually processed
and packaged.
2. Hauling of milk products must be done with refrigerated truck equipment that is contracted
with a third party or is owned and operated or a lease purchase option that is operated by the
same corporation or owner that owns the retail outlet. Refrigerated truck equipment, whether
owned or contracted, must comply with regulations defined by federal and North Dakota state
agencies.
3. This program will be available to any single retail place of business and no combination orders
by multiple retail places of business shall be permitted.
4. On all charge sales by retailer not paid for within fourteen days from statement date,
processor will charge retailer the difference between dock pickup price and wholesale price.
5. All orders must be preordered by retailers prior to dock pickup.
6. No in-store service, i.e., cleaning cases, stamping products, etc., shall be provided by
processors.
7. Processor personnel for store resets will be limited to dairy case setting only.
8. No returns on merchandise shall be made by processors, except when product isfound to be
damaged or defective at time of dock pickup.
9. Delivery of product by processor due to incorrect ordering by customer or special orders shall
be charged at wholesale price less appropriate volume discount.
10. All contracts between processors and retailers under this program shall:
a. Require delivery at destination being the retailer's place of business;
b. Provide that title to said milk products shall pass from the seller (processor) to the buyer
(retailer) upon delivery at the buyer's place of business; and
c. Provide that the place where the sale of said milk products occurs shall be at the
retailer's place of business.

11. Each retail place of business must make a minimum order of twenty-seven to forty-four full
cases to each processor to qualify for the twelve percent discount dock pickup program or a
minimum of forty-five full cases to each processor to qualify for the twenty-three percent
discount dock pickup program. Deliveries of less than twenty-seven full cases to a retailer's
place of business may only be made by a licensed distributor.
12. Retailer must pay contract or third-party hauler direct.
13. Direct billing of product will be completed by the processor and all qualified discounts will be
paid by the processors.
History: Effective September 1, 1996; amended August 31, 1998; July 1, 2000.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-13. Price filings on frozen dairy products.

Repealed effective July 1, 2000.
### § 51-03-02-14. Authorized discounts for prompt payment.

Processors and distributors may grant a two percent discount to retailers who make timely payment
for milk products, shake, soft serve mix, and frozen dairy products within fourteen days of the statement
date. All statements shall be on a weekly basis, and the weekly cutoff date shall remain the same. Said
discount may not be allowed if a retailer is participating in a central billing service plan as permitted by
section 51-02-02-12.
History: Amended effective August 1, 1993.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-15. Formula to determine changes in the class I wholesale and retail prices.

Based upon the class I formula as ordered in section 51-03-02-06, for each hundredweight price
change to dairy farmers for raw milk or an increase or decrease of $.001 in the federal market order
number 30 butterfat differential based on $.053, the following factors will be used in determining
adjustments in the class I wholesale and retail prices. If the first of the month falls on a Monday,
Tuesday, or Wednesday, minimum wholesale and retail prices go in effect that Monday. If the first of the
month falls on a Thursday, Friday, Saturday, or Sunday, minimum wholesale and retail prices go in
effect the following Monday.
Item Hundredweight Factor B.F. Factor
Whole milk ½ gallon $.0098900 $(.0001075)
2% milk .0099130 (.0006465)
1% milk .0099130 (.0010775)
Skim Milk .0099245 (.0012945)
Buttermilk .0099245 (.0012945)
Whole chocolate .0094645 (.0001029)
2% chocolate .0094875 (.0006188)
1% chocolate .0094875 (.0010313)
Skim chocolate .0094990 (.0012390)

All price adjustments at the retail level should be made to the nearest one cent per unit: wholesale to
the nearest $.001 per unit. Wholesale and retail price increases or decreases shall be adjusted for
volume discounts. The foregoing class I formula price changes shall be automatically adjusted without
further amendment to this stabilization plan.
History: Amended effective August 1, 1983; June 26, 1989; June 1,1990; February 1, 1992; August 1,
1993; August 1, 1994; August 1, 1995; September 1, 1996; July 1, 2000.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-16. Formula to determine changes in the class II wholesale and retail prices.

For each federal market order no. 30 class II price increase or decrease of fifteen cents per
hundredweight above, or price increase or decrease of twenty-three cents per hundredweight below the
twelve dollars and seventeen cents base class II hundredweight price, or an increase or decrease of
$.001 in the federal market order no. 30 butterfat differential based on $.162, the following factors will
be used in determining adjustments in the class II wholesale and retail prices:
Item Hundredweight Factor B.F. Factor
Half half - pint $.0016 $.0008
Whipping cream - ½ pint .0016 .0015
Sour cream - 8 ounce .0008 .0008
Cottage cheese - 1 pound .0140 (.0012)
Yogurt - 8 once .0008 .0008
All price adjustments at the wholesale and retail levels should be made to the nearest one cent per
unit.
Item Hundredweight Factor B.F. Factor
1 gallon shake mix $.0110 $.0004
1 gallon soft serve mix .0110 .0021
All price adjustments at the wholesale level should be made at four cents per gallon increments.
History: Amended effective June 1, 1979; November 1, 1983; April 1, 1984; July 1, 2000.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-17. Emergency.

This stabilization plan is declared to be an emergency pursuant to North Dakota Century Code
section 28-32-02. The reason for said emergency is to permit the orderly marketing of milk and milk
products.
History: Effective August 1, 1995; amended effective September 1, 1996.
General Authority: NDCC 4.1-26-01, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15,
4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
### § 51-03-02-18. Effective date.

These rules are effective at 12:01 a.m., July 1, 2000, and all prior stabilization plans for market
area number 1 are hereby repealed.

History: Effective August 1, 1995; amended effective September 1, 1996; August 31, 1998; July 1,
2000.
General Authority: NDCC 4.1-26-01, 4.1-26-09, 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14,
4.1-26-15, 4.1-26-16, 4.1-26-35, 28-32-03.1(3)
Law Implemented: NDCC 4.1-26-10, 4.1-26-11, 4.1-26-12, 4.1-26-13, 4.1-26-14, 4.1-26-15, 4.1-26-16
