Revenue per CWT

What is Revenue per CWT?

Revenue per CWT (hundredweight) is the total amount a dairy farmer receives for every 100 lbs of milk sold to the processor or cooperative. It is not simply the base milk price — it includes component premiums (butterfat, protein, other solids), quality bonuses (low SCC, low bacteria), volume premiums, and minus any penalties (high SCC, off-flavors, antibiotic residues).

A typical milk check includes: base Class III or IV price, butterfat premium (butterfat is worth ~$0.09/lb above base), protein premium (protein worth ~$0.10–$0.30/lb above base depending on cheese vs butter pricing), other solids, quality premiums for SCC below 200,000, and volume premiums for consistent shipments.

Revenue per CWT varies significantly by region, processor, and milk pricing system. Class III (cheese) pricing typically yields higher component premiums than Class II (soft products) or Class I (fluid). Cooperatives often have complex pricing formulas that reward quality and consistency.

Tracking revenue per CWT alongside feed cost per CWT gives a direct measure of IOFC on a per-hundredweight basis. The goal is to maximize the spread between revenue per CWT and cost per CWT — this is the core of dairy profitability.