Midwest Milk Hauling Charges Climb 6.5%
January 6, 2020
A study of milk hauling charges in the Upper Midwest Federal Milk Marketing Order shows rates increased, on average, 6.5% in 2019.
The comparison was made for hauling charges in May 2018 and 2019. In 2019, the weighted average hauling charge in the Upper Midwest was 26.9₵/cwt, up 1.8₵ from 2018. (Note: In 2018, hauling charges shot up 7.73₵/cwt, a 38% increase.)
Wisconsin had the lowest hauling charge of the seven states included in the study, at 23.9₵/cwt. The Upper Peninsula of Michigan reported the highest, at $1.20/cwt. North Dakota dairy farmers paid the second most for hauling, at 66₵/cwt.
“The study found that the Michigan and North Dakota hauling charges were influenced by the low number of farms, the long distance from high demand areas, and less handler competition,” reports Corey Freije, an agricultural economist with the Upper Midwest Federal Order staff.
The study also suggests that as a producer’s milk volume increases, the average hauling charge per hundredweight of milk decreases, he says. “The most obvious factor responsible for this is that many Upper Midwest handlers charge a fixed hauling dollar value to dairy producers, regardless of volume of milk delivered,” says Freije. “Therefore, as the producer’s production increases, the hauling charge per hundredweight automatically decreases.”
Hauling Rates By State:
Michigan UP $1.119
No. Dakota 65.9₵
So. Dakota 38.1₵
Upper Midwest Average 29.6₵