of this paragraph, the skim milk so transferred shall not be classified as Class IA or IB to a greater extent than would be applicable to a like quantity of such other source milk received at the transferee plant;

(16) Add to the remaining pounds of skim milk in class IA the pounds of skim milk received directly from dairy farmers which was deducted pursuant to the proviso in the preamble of this section;

(17) If the pounds of skim milk remaining in all classes exceeds the pounds of skim milk in receipts from producers subtract such excess from the pounds of skim milk remaining in each class in series beginning with Class II. Any amount so subtracted shall be known as "overage";

(b) Butterfat shall be allocated in accordance with the procedure outlined for skim milk in paragraph (a) of this section; and

(c) Combine the amounts of skim milk and butterfat determined pursuant to paragraphs (a) and (b) of this section into one total for each class.

CLASSIFICATION OF SKIM MILK AND BUTTERFAT TRANSFERRED IN THE FORM OF A FLUID MILK PRODUCT TO A PLANT WHICH IS NOT A POOL PLANT, AN OTHER ORDER PLANT NOR A PRODUCER-HANDLER PLANT UNDER ANY OTHER ORDER

§ 1002.180 Assignment at a plant which is not a pool plant, an other order plant nor a producer-handler plant under any other order.

Skim milk and butterfat transferred in the form of a fluid milk product from a pool unit or a pool plant to a plant which is not a pool plant, an other order plant nor a producer-handler plant under any order shall be classified as Class IA, unless the requirements of paragraphs (a) and (b) of this section are met, in which case the skim milk and butterfat so transferred shall be classified in accordance with the assignment resulting from paragraph (c) of this section: Provided, That if the classification of any skim milk and butterfat so transferred is dependent on the classification of bulk fluid milk products moved from the transferee plant to a second nonpool plant, the same assignment procedure shall be followed with respect to receipts and utilization at

such second nonpool plant. If fluid milk products are moved in bulk form from the transferee plant to a second nonpool plant and the requirements of § 1002.180 (b) are met by the operator of such second nonpool plant, the classification of the fluid milk products so moved shall be determined by the procedure required by § 1002.180 (c) except that the assignment of such fluid milk products to Class IA and Class IB shall not be less than the quantities which would be assigned to those classes if the fluid milk products were received at the second nonpool plant as a transfer directly from the pool plant or pool unit.

(a) The transferring handler claims classification pursuant to the assignment set forth in paragraph (c) of this section in his report submitted to the market administrator pursuant to § 1002.30 for the month within which such transaction occurred;

(b) The operator of such transferee plant maintains books and records showing the utilization of all skim milk and butterfat received at such plant which are made available if requested by the market administrator for the purpose of verification.

(c) The skim milk and butterfat so transferred shall be classified on the basis of the following assignment of utilization at such transferee plant:

(1) Packaged receipts of fluid milk products from Federal order sources shall first be assigned to route disposition in Federal order marketing areas (assigning receipts to sales in the same market to the extent possible) and any residual shall be assigned to IB route sales.

(2) Such bulk transfers and other bulk receipts at such transferee plant from other order plants shall next be assigned to any remaining route disposition in any Federal order marketing area. For this purpose receipts from each Federal order market shall first be assigned to remaining route sales in such marketing area and any remainder of such receipts shall be prorated with all Federal order receipts to remaining route disposition in all Federal order marketing areas.

(3) Receipts from dairy farmers shall then be assigned to any remaining route sales in the marketing area.

(4) Remaining receipts from dairy farmers and other unregulated other source receipts (excluding opening inventory) in the form of fluid milk products shall be assigned pro rata to Class IB and Class II utilization at such plant to the extent of such utilization available at such plant and any remainder of such receipts shall be assigned pro rata to Class IA bulk sales to plants regulated under this order and Class I bulk sales to plants regulated under other orders.

(5) Any remaining receipts being assigned pursuant to this subparagraph shall be assigned pro rata with remaining receipts from other order plants, first to remaining Class IA utilization, then Class IB utilization and finally to Class II utilization at such plant: Provided, That if on inspection of the books and records of such plant the market administrator finds that there is insufficient utilization to cover such receipts, the remainder shall be classified as Class IA.

INVENTORIES

§ 1002.220 Method of accounting for closing inventories.

Skim milk and butterfat in the form of fluid milk products shall be accounted for and classified by the handler at the time of filing reports in accordance with § 1002.30 as follows:

(1) As Class IA in the form of packaged fluid milk products at a pool plant.

(2) As Class II in the form of bulk fluid milk products at a pool plant or in bulk or packaged fluid milk products at a plant not defined in § 1002.8 (b) or (d).

§ 1002.221 Method of accounting for fluid milk products in transit at the end of a month from a pool plant to a pool plant.

All fluid milk products transferred from a pool plant but not received until the following month at the transferee pool plant shall be considered in transit and shall be accounted for in the following manner:

(a) At the transferor plant, transfers which are in transit shall be included in the disposition in the month in which shipped.

(b) At the transferee plant, transfers which are in transit shall be considered to have been received in the same month

as shipped and shall be included in the closing inventory thereat.

(c) At the transferee plant, transfers which were in transit and were included in the closing inventory pursuant to paragraph (b) of this section shall be included in the following month's opening inventory.

§ 1002.222 Method of accounting for fluid milk products in transit at the end of a month from a pool plant to a plant other than a pool plant. All fluid milk products transferred from a pool plant but not received until the following month at a transferee plant which is not a pool plant shall be considered in transit and shall be accounted for in the following manner: (a) At the transferor plant, such transfers shall be accounted for as a closing inventory in the month in which shipped and as a disposition in the following month.

(b) At the transferee plant, transfers pursuant to paragraph (a) of this section shall be accounted for as receipts in the month in which received.

CONVERSION FACTORS FOR ACCOUNTING
PURPOSES

plant or unit or from dairy farmers reported by a cooperative, the test of such milk shall be the average test of milk received from farmers at such other plant or unit or reported by such cooperative.

(b) Butterfat in milk received from a unit or transferred from or disposed of by a unit shall be at the average test of all milk received at farms by the unit and in the same quantities.

(c) Skim milk in milk the butterfat content of which is determined pursuant to paragraphs (a) and (b) of this section shall be the weight of the milk less the butterfat determined to be contained therein.

(a) The butterfat content of low test milk shall be the same as the butterfat in the milk, cream, and skim milk used to make the product.

(b) Skim milk in low test milk shall be the weight of the product less the butterfat content determined pursuant to paragraph (a) of this section.

§ 1002.243 Skim milk and butterfat contained in cream, storage cream, half and half, skim milk and cultured milk drinks.

(a) Determine the weight of the product. In the absence of information establishing weights, convert volume to weight by the use of the conversion factor in § 1002.232.

(b) Determine the total amount of butterfat in the product on the basis of butterfat tests. In the absence of information establishing the butterfat content, determine the butterfat content by the application of § 1002.230, except that

the butterfat content of cultured milk drinks shall be assumed to be the same as the butterfat content of all dairy products used in the manufacture of such cultured milk drinks.

(c) The skim milk content shall be the total weight of the product determined pursuant to paragraph (a) less the butterfat content determined pursuant to paragraph (b).

§ 1002.244 Skim milk and butterfat contained in plastic cream, sour cream, sour half and half and butter when received as other source milk.

(a) Determine the weight of the product. In the absence of information establishing weights, convert volume to weight by the use of the conversion factor in § 1002.232.

(b) Determine the total amount of butterfat in the product on the basis of butterfat tests. In the absence of information establishing the butterfat content, determine the butterfat content by the application of § 1002.230.

(c) The skim milk content shall be the total weight of the product determined pursuant to paragraph (a) less the butterfat content determined pursuant to paragraph (b).

§ 1002.245

Skim milk and butterfat contained in flavored milk drinks. (a) If the weight and the fat test of the product have been established on the basis of available information:

(1) Determine the total amount of fat in the product on the basis of fat tests and weight of the product.

(2) Determine the total weight of the nondairy ingredients other than water contained in the product and the fat content of such nondairy ingredients.

(3) Determine the butterfat content of the product by subtracting from the total fat content of the product, the fat content of the nondairy products used.

(4) Determine the skim milk content of the product by subtracting from the total weight of the product, the butterfat content of the product and total weight of the nondairy ingredients other than water used in the manufacture of the product.

(b) In the absence of information establishing weights or tests, the weight of the product shall be determined in accordance with § 1002.232(b):