An analysis of milk hauling charges in Federal Order #30, which encompasses the Upper Midwest, suggests handlers have not passed on surging fuel prices.
In fact, on a simple average basis, hauling charges have declined by a nickel, from 56¢/cwt in 2010 to 51¢/cwt in 2011. On a weighted average based on volume shipped, however, the hauling charges have not changed, averaging about 30¢/cwt.
Handlers in the Upper Midwest tend to charge a flat hauling value, regardless of volume of milk shipped. That means smaller producers end up paying more per hundredweight because they ship less milk. The analysis shows producers shipping less than 50,000 lb. of milk per month pay 52¢/cwt for hauling. Producers shipping more than 2.5 million lb. of milk per month pay about 12¢/cwt.
These larger farms—158 in number—represent just 6% of the total number of farms in the Upper Midwest Order. But they produce 48% of the milk, and pay 32% of the hauling charges.
North Dakota producers, with their far greater distance to market, pay the most for hauling--$1.14/cwt. Wisconsin producers, with their close proximity to plants, pay 24¢/cwt. on a simple average basis.
