All milk required to be reported by each dealer pursuant to section 22.20 of this Part shall be classified each month pursuant to the provisions of sections 22.31 through 22.33 of this Part. If any of the water contained in the milk from which a product is made is removed before the product is utilized or disposed of by a dealer, the pounds of skim milk used or disposed of in such product shall be considered to be an amount equivalent to the nonfat milk solids contained in such products plus all the water originally associated with such solids.