Dairy expansion with tight access to cash requires a careful plan

The key to milk producers and cow owners negotiating a “fair” rent on dairy cows is having both parties understand the aim of a rent — it is an economic return that compensates an owner for investing capital in dairy cows.

New entrants to dairying, and dairy farmers who wish to expand their enterprises, are likely to have a limited amount of money for investment to achieve target numbers of cows quickly.

One way for farm operators to acquire more cows, with limited capital, is leasing.