Dairy farmers’ cost to haul milk within the Upper Midwest jumped 21% when comparing May 2021 to May 2022. Using a simple average, the cost to move milk from farm to plant shifted from 51 cents per hundredweight (cwt.) in May 2021 to 62 cents per cwt. in May 2022.
While those costs may raise eyeballs, it could have been even worse for farmers as diesel fuel shot to the moon during that time span, jumping by $2.16 per gallon ($3.16 versus $5.32 per gallon). That represented a 68% price escalation for fuel.
Those are among the many findings in Corey Freije’s paper, “Milk Hauling Charges in the Upper Midwest Marketing Area.” Those pricing realities only consider the simple average to haul milk. The weighted average was a lower reported figure as 80% of the milk delivered to plants in the Upper Midwest Federal Milk Marketing Order comes from just two states — Wisconsin and Minnesota. With that in mind, the weighted average to haul milk moved from 32 cents in May 2021 to 42 cents in May 2022.
Corey Geiger
May 15, 2023
hoards.com
