(1) Subtract from the pounds of skim milk in each class the pounds of skim milk in exempt milk in accordance with the class in which it was used or sold.

(2) Subtract from the remaining pounds of skim milk in Class I milk the pounds of skim milk in packaged fluid milk products received from a plant regulated by a Federal Milk Marketing Order and which are classified and priced as Class I milk.

(3) Subtract from the remaining pounds of skim milk in each class according to its Federal order classification, the pounds of skim milk in fluid milk products in bulk transferred or diverted from plants regulated by a Federal Milk Marketing Order.

(4) Subtract from the remaining pounds of skim milk in Class I milk the pounds of skim milk in inventory of fluid milk products on hand at the beginning of the month which were classified and priced as Class I milk the preceding month.

(5) Subtract from the remaining pounds of skim milk in Class II the pounds of skim milk in products specified in section 21.31(b)(3)(viii) of this Part that were in inventory at the beginning of the month in packaged form or bulk form if used to produce a Class II product, but not in excess of the pounds of skim milk remaining in Class II. (This paragraph only applies if the plant were subject to this provision in the preceding month.)

(6) Subtract from the remaining pounds of skim milk in Class II the pounds of skim milk in other source milk (except that received in the form of a fluid milk product or a fluid cream product) that is used to produce, or added to, any product specified in section 21.31(b) of this Part but not in excess of the pounds of skim milk remaining in Class II.

(7) Subtract from the remaining pounds of skim milk in Class I, the pounds of skim milk in route disposition of fluid milk products outside the marketing area that are not distributed in the marketing area of a Federal milk marketing order, other than that subtracted pursuant to paragraphs (2) and (3) of this subdivision.

(8) Subtract from the remaining pounds of skim milk in series beginning with Class IV the pounds of skim milk in the cream associated with the pounds of fluid milk products subtracted in section 21.34(a)(7) and (b)(7) of this Part. Such associated cream shall be determined by using the Pearson's square method of standardization using the average butterfat test of milk received from producers, a 40 percent butterfat test for cream and the average butterfat test of the fluid milk products in route disposition outside of the marketing area.

(9) Subtract from the pounds of skim milk remaining in each class in series beginning with Class IV milk the pounds of skim milk in other source milk as follows:

(10) Subtract from the pounds of skim milk remaining in Class II, III or IV milk, the remaining pounds of skim milk in receipts of other source milk in the form of fluid milk products which are not classified or priced by a Federal Milk Marketing Order and for which both the transferor and transferee marketers request Class II, III or IV utilization.

(11) Subtract from the pounds of skim milk remaining in each class in series beginning with Class IV milk, the pounds of skim milk in inventory of fluid milk and fluid cream products in bulk on hand at the beginning of the month which were classified and priced as Class IV milk the preceding month.

(12) Subtract pro rata from the pounds of skim milk remaining in each class, the remaining pounds of skim milk in receipts of other source milk in the form of fluid milk products which are not classified or priced by a Federal Milk Marketing Order.

(13) Subtract from the remaining pounds of skim milk in each class, the pounds of skim milk in the form of fluid milk products received from other pool plants and in pool milk received from a nonpool plant in accordance with the classification assigned by the transferee marketer. The skim milk so allocated to each class shall be limited to the amount remaining in such class.

(14) Subtract from the remaining pounds of skim milk in each class, the pounds of skim milk in pool milk received from a collecting cooperative which has arranged to make the reports and payments with respect to the milk of producers in accordance with the classification assigned and agreed upon by the transferor and transferee marketer. The skim milk so allocated to each class is limited to the amount remaining in such class.

(15) If the pounds of skim milk remaining in all classes exceed the pounds of skim milk in pool milk received from producers, subtract such excess from the pounds of skim milk remaining in each class in series beginning with Class IV. Any amount so subtracted shall be known as “overage.”