The department shall notify producers delivering dairy products to a licensed dairy plant that produces manufactured dairy products of the type of security device used for the benefit of producers and shall notify producers any time a license is issued, renewed, or modified. The notice sent by the department shall substantially conform to the following:
   “Michigan law requires dairy plant licensees to demonstrate a reasonable degree of financial responsibility to the Michigan department of agriculture. This act is designed to provide reasonable assurance that producers will be paid for their milk; however, it does not guarantee that producers will be paid. Each producer has some responsibility for determining the credit-worthiness of the dairy plant to which the producer is selling milk. A dairy plant licensee may qualify for a license by doing 1 of the following:

Terms Used In Michigan Laws 288.683

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Audited financial statement: means a fiscal year end financial statement prepared by a certified public accountant according to generally accepted accounting principles. See Michigan Laws 288.570
  • Department: means the Michigan department of agriculture. See Michigan Laws 288.572
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Milk: means the lacteal secretion, practically free from colostrum, obtained by the complete milking of 1 or more healthy cows, goats, sheep, or other dairy animals. See Michigan Laws 288.574
  • Producer: means a person who owns or operates a dairy farm and sells or distributes milk produced on that farm including a person who markets milk on behalf of a producer pursuant to a marketing agreement. See Michigan Laws 288.576
  (a) Filing financial statements audited by a certified public accountant with the department demonstrating that the dairy plant meets the minimum liquidity requirement.
  (b) Filing security with the department in an amount determined by the department to be the greater of the following:
  (1) The value of the greatest milk receipts that the dairy plant received within a consecutive 30-day period during that dairy plant’s most recent fiscal year.
  (2) The greatest milk receipts that the dairy plant is anticipated to receive during a 30-day period within the licensing period.
  (c) ____________________, (name of dairy plant licensee) is currently licensed on the basis of its audited financial statement meeting the minimum liquidity requirement of a current ratio of at least 1.20 to 1 current assets to current liabilities. The licensee’s most recent year-end financial statement audited by the firm of ______________________________ (auditor’s name) meets the following minimum liquidity requirement,
   (or)
   ____________________ (name of dairy plant licensee) has filed security with the department to secure payment to producers. The maximum amount of security is the amount determined to be the greater of the following:
  (1) The value of the greatest milk receipts that the dairy plant received within a consecutive 30-day period during that dairy plant’s most recent fiscal year.
  (2) The greatest milk receipts that the dairy plant is anticipated to receive within a 30-day period within the licensing period, whichever is greater.
   The security filed is in the following form or forms and in the amount of: _______________________________________________________”.
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