Oversupply Of Milk Continues To Erode Farmers' Bottom Line

Feb 19, 2019

By Hope Kirwan

Increased trucking costs for Wisconsin dairy farmers is the latest symptom of an oversupply of milk.

The Upper Midwest Federal Milk Marketing Order recently released a report on milk hauling charges paid by farmers in 2018.

The report found the average charge per hundredweight, or 100 pounds of milk, in Wisconsin was $0.24, a 40 percent increase from 2017.

Corey Freije is an agricultural economist who compiles the report for the Upper Midwest Order. He said hauling charges typically increase by 1 or 2 cents every year, so last year’s 7 cent jump is unusual.

"That is partially a result of an increase in the diesel fuel costs," Freije said. "But it also seems to be an indication that the dairy farmers, with the supply that’s out there, have kind of lost their market power."

With plenty of milk to go around, Freije said dairy processors don't have to subsidize the cost of hauling milk as a way to attract farmers.

"The handler, particularly a co-op, would subsidize that hauling (charge)," Freije said. "I've heard over time that the handlers and some of the co-ops want to reflect more fully the cost of the hauling to those deductions for dairy farmers."

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Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.