New York State Ag Commissioner Patrick Hooker announced this week that the Milk Marketing Advisory Council is being reactivated to monitor milk hauling charges and other concerns. "Hauling is a critical component of the milk marketing system. A recently completed study focused on the costs associated with it," says Hooker. "We'll continue to analyze those costs in order to be sure farmers are treated fairly."
The council, MMAC for short, was created to advise the commissioner on dairy policy matters. It's composed of appointments from dairy manufacturing, processing and production sectors, plus representatives of milk consumers and milk retailers. In June, the Commissioner plans to hold a milk marketing listening session open to the public.
Producers bear most of the cost.
A recently completed study found that average hauling charges, including a 15-cent per hundredweight transportation credits, ranged from 3.1% to 4.4% of the gross value of the farm milk marketed for the 1991 through June 2007 study.
Senator Darrel Aubertine said, "As a farmer, it was no surprise to me," comments N.Y. Senator Darrel Aubertine, who initiated legislation calling for the hauler study. "This study shows that the cost of hauling and stops are pushed back to the farmers. It's evident that we need to take action now to mitigate the impact that these charges have on our farm families' bottom lines."
Hauling charges shown on milk checks only represent a portion of total hauling charges. A recent study of Vermont's hauling charges shows 66% of the actual cost of hauling is paid by producers. Only 33% is absorbed by cooperatives or is passed up the marketing chain.
Efficiencies in the milk hauling industry are credited with reducing costs of milk assembly and transportation. These efficiencies have benefited farmers to some degree since cost increases have not been fully charged back to producers.
Higher fuel costs, higher equipment replacement costs, weight limit issues on roads and bridges, hauling loads longer distances due to plant closures and issues of segregating the milk supply as organic, "rBST free" and conventional are putting pressure on the milk hauling industry. And it has resulted in increased hauling rates charged to farmers.
"No state laws or regulations govern milk hauling charges," notes Hooker. "But, we need to approach this topic carefully to be sure any attempt to help our producers doesn't have unintended negative consequences."