News

Milk Hauling Rates Jump in Upper Midwest


Milk hauling rates jumped by more than a third in 2018 compared to 2017, shows a study just released by the Upper Midwest Federal Milk Marketing Order. The study looked at hauling charges for May 2018, and compared them to year-earlier rates.

Still, milk hauling charges in the Upper Midwest are still well below those of other regions. The weighted average hauling charge in the Upper Midwest was about 28¢/cwt, up from 20¢/cwt in 2017. That meant total hauling charges jumped nearly $3.3 million last year for the 11,417 dairy farmers included in the study. (Note: Part of this 40% increase was also due to larger milk volume in May, up 15% in milk pooled on the Upper Midwest Order.)

“North Dakota has the highest average hauling charge (64¢ weighted average),” says Corey Freije, a dairy economist with Upper Midwest Order. “This result is from a low number of farms, the longest distance from high demand areas, and less handler competition.

‘Wisconsin, in contrast, has a low average hauling charge (24¢ weighted average) with a high number of farms and close proximity to high-demand areas,” he says.

Freije says the majority of milk handlers in the Upper Midwest charge a flat hauling fee, regardless of the amount of milk being shipped each month. “In each of these cases, where the handler charges a flat rate, the hauling charge per hundredweight declines as the producer’s milk volume increases,” he says.

This makes a huge difference in hauling charges. The smallest producers, those shipping less than 50,000 lb of milk/month, are paying 75¢/cwt. Those farmers shipping 5 million lb are paying just 16¢/cwt.

Read the complete study here.

Source: Jim Dickrell, Milk Business

ProAg Quick Links

Agent Toolbox Grower Toolbox Careers

ProAg News

Farmland Values and Debt: Illinois, Iowa and Nebraska

Today’s update looks briefly at how relatively steady farmland values are impacting farm financial variables, and then discusses recent developments relating to farmland values in Illinois, Iowa and Nebraska....
Get ProAg updates via email
Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now

×