State releases study on milk hauling charges, finds small farms pay a higher percentage

NORWICH – Increased costs associated with picking up milk from small dairy farms resulted in operations with 80 or fewer cows paying a higher percentage of hauling charges, reports a state study released last week.

Some farmers argue if they should have to pay to have their product shipped away at all.

According to the study, conducted by New York State Agriculture and Markets, hauling costs ate into 3.1 to 4.4 percent of farm milk’s total value between 1991 and 2006.

When broken down, large farms were charged 2.7 to 3.6 percent of the price of the milk they sent off, while small farms paid anywhere from 4.2 to 6.8 percent, the data states. Most business aren’t charged at all to have their product shipped to a processor after it’s been purchased.

“This might suggest that small herds are burdened with a greater percentage share of hauling costs,” the study states. “However, there are increased costs involved in servicing smaller farms compared to larger farms. A milk hauler has relatively fixed times and costs involved in each farm pick-up stop, where the bulk milk tank must be agitated, samples taken, and milk transfer hoses sanitized.”

In dollars, hauling charges from 2001-2006 averaged $0.73 per hundred pounds of milk for the small producers (80 or fewer cows) and $0.46 per hundred pounds for large producers (300 or more cows), based on data from Cornell University’s Dairy Farm Business Summary Series cited in the study. That’s compared to the base payments made to farmers, between 2003-2006, which averaged $12.72 per hundred pounds. During that same time, it cost farmers $14.12 per hundred pounds to produce the milk, according to figures in the study.

Ultimately, hauling charges are determined by the number of stops a hauler has to make and the number of miles it travels in a day on route to a milk plant. A call to a local hauler was not returned.

Essentially, its cheaper for larger farms because they can provide more volume – meaning it requires less work on the part of haulers to get more milk in one stop, compared to multiple stops at small farms where they get less product, says Guilford farmer Terry Ives, who distributed the study at a county Farm Land Protection Board meeting Friday.

“You knew there would be a difference because of volume,” said Ives. “That much you already know.”

However Ives and others, Like Afton Supervisor Robert Briggs, say there shouldn’t be a disparity between small and large operations; they think hauling costs should be born by processors and milk dealers, not farms – of any size.