Blessed with the large number of dairy processing plants, dairy producers throughout the Upper Midwest Federal Milk Marketing Order (FMMO) also enjoy the lowest hauling costs in the country. In its annual report on costs of shipping milk, Corey Freije, an economist with the Upper Midwest FMMO, notes that most processing plants charge a flat stop charge which causes hauling costs to drop as a farm ships more milk. The average charge per hundredweight (cwt.) for the entire order was 17.43 cents in May 2013, which is up less than one-tenth of a penny over 2012's 17.34 cents per cwt.
It stands to reason, Wisconsin, with the largest number of processing plants, creating the most competition, also has the lowest per cwt. hauling charges on a weighted average. Each state's hauling charges are as follows:
• Wisconsin, 12.26 cents per cwt.
• Illinois, 15.48 cents
• Michigan, Upper Peninsula, 17.54 cents
• Minnesota, 22.35 cents
• South Dakota, 32.19 cents
• Iowa, 34.82 cents
• North Dakota, 51.53 cents
Of course, those averages are influenced by total pounds shipped per farm in those states. To that end, South Dakota's 32.19 cents per cwt. was low due to the fact that its average dairy farm shipped slightly over 840,000 pounds of milk each month which was double the next closest state, its twin neighbor North Dakota.
On a per hundredweight basis, those farms shipping less than 49,999 pounds a month paid 47.25 cents per cwt. on a weighted basis. Those charges fell to 29.47 cents among those producing 50,000 to 99,999 pounds of milk. In the next eight categories, changes ranged from 11.65 to 21.88 cents per cwt., with the 1.5 million to 2.5 million pound group paying the lowest freight, reported Freije. Of course, when looking at averages for each category, Wisconsin dominates the report as it accounted for 64 percent of milk production.
To read the entire report, go to www.fmma30.com, click on "Milk Hauling Charges in the Upper Midwest Marketing Area -- May 2013" and download a copy.
