(1) The provisions of this pricing rule and prices announced pursuant thereto are ordered in the exercise of authority delegated to the board of milk control by the provisions of 81-23-302, MCA.

(2) Any person, subject to this pricing rule or any price announcement issued hereunder shall be considered in violation thereof if he or it engages in such violation in any manner, directly or indirectly, or through an agent, employee, trust subsidiary, or affiliated company or corporation.

(3) It is the intent of the Montana board of milk control that if a part of this rule, announcement of any price issued hereunder is invalid, all valid parts that are severable from the invalid part remain in effect.   If a part of this rule or any price announcement issued hereunder is invalid in one or more of its applications, that part remains in effect in all valid applications that are severable from the invalid applications.

(4) Nothing contained herein shall be construed as prohibiting the payment of higher prices to producers.

(5) The minimum class I price per hundredweight at 3.5% butterfat which shall be paid to producers by distributors in the state of Montana, shall be the monthly federal order price according to 7 CFR 1000.50(a) through (c) plus a Montana class I location differential of $2.55.

(a) When milk does not test 3.5% butterfat, the price per CWT will be adjusted for each .1% the butterfat test moves up or down.

(b) The milk control bureau will use the federal order fat and skim prices to calculate the producer prices.   Federal order fat and skim prices shall be announced on the Friday previous to the 23rd of each month unless the 23rd falls on a Friday.   Montana's producer prices will be announced on or about the 5th of the subsequent month (depending upon weekends and holidays) and will be effective for the next following month.

(6) Prices paid producers for class II milk will be the last spray process nonfat dry milk solids price per pound quote for the month, Central States area, as most recently reported by the United States department of agriculture, plus a factor of $.0125 per pound for freight, multiplied by 8.2 (which is the amount of solids not fat in skim milk) , plus the last Chicago area grade AA butter price quote for the month as most recently reported by the United States department of agriculture, less an adjustment factor of $.0895, multiplied by 4.2 (which is the amount of butter in pounds, which can be produced from 100 pounds of 3.5% milk) , less a make allowance of 8.5%. In the case of milk containing more or less than 3.5% butterfat, the differential to be employed in computing prices will be determined by multiplying the above-mentioned Chicago area butter price by .111 and the resulting answer from this calculation shall be rounded to nearest half cent ($0.005) .

(7) Prices paid to producers for class III milk will be the last Chicago area grade AA butter price quote for the month as most recently reported by the United States department of agriculture, less an adjustment factor of $.0895, less 10% and, in addition, when skim milk is utilized in this classification by any distributor, the last spray process nonfat milk solids price per pound quote for the month, the Central States area, as most recently reported by the United States department of agriculture, plus a factor of $.0125 per pound for freight, multiplied by 8.2, less 17%.

(8) Producers who ship in excess of any beneficial use, and that milk is shipped to a different market and classified by statute and rule as class III, shall receive a price for that milk based on calculations in ARM 32.24.522.

(9) The total cost to a plant for surplus milk that is shipped to a cheese or powder plant is determined by ARM 32.24.523.

(10) No price established by any formula set forth in this rule shall be charged if the same be contrary to any supervening federal or state law, rule or regulation.   Should any minimum prices published by this board under this rule exceed the limitations imposed by such laws, rules or regulations, such prices shall be reduced to the extent of such excess, even though such reduction may impair a uniform or complete application of the price fixing formula, or any of the same, set out in this rule.   The prices, as so modified, shall be respected and enforced as the minimum prices established under this rule.

(11) Monthly price announcements for class I, II and III producer milk pricing will be computed by the milk control bureau in accordance with this pricing rule and published by the 10th of each month.   The minimum producer price will be uniform and identical throughout the state of Montana.