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Milk producers see 40% jump in hauling fees

The cost of hauling milk from the farm to the processor has gone up.
Dr. Corey Freije with the USDA’s Federal Milk Market Administrator’s office in Minneapolis says, “We’ve seen about a 40% increase for 2018 from 2017.” Freije examines hauling costs using May data every year.

Freije says North Dakota has the highest weighted average hauling charge of 64 cents a hundredweight and Wisconsin has the lowest, at just under 24 cents a hundredweight.

Freije tells Brownfield there is almost no correlation between fuel prices and milk hauling fees, but the volume of milk puts producers at a disadvantage. “We’ve got the plants at capacity. We’ve got a lot of milk out there, and that has eroded the negotiating power of the dairy farmer.”

And, Freije says he doesn’t expect this trend to change. “It looks like we’re kind of locked in this pattern until we can get capacity up to where we’re going to have handlers actively competing for the milk.”

Freije’s study found 553 farms have no hauling charges, and a majority of milk handlers charge producers a flat hauling value regardless of the farm’s size or milk volume.

For others, Freije says larger producers and producers that are farther from processors consistently pay more per hundredweight to transport milk off the farm. He also says they couldn’t calculate the cost for producers that truck their own milk.

The study of more than 11-thousand farms also showed that 65% of the milk came from 12% of the farms in the Upper Midwest marketing order, which includes Wisconsin, Minnesota, Iowa, northern Illinois, Michigan’s Upper Peninsula, and parts of eastern North and South Dakota.

​Listen to Brownfield’s interview with Dr. Freije here: