6 Land Strategies to Support Your Growing Dairy Farm in 2025

The term "neighbor" can mean many things on a modern dairy farm—from the landowner next door to a trusted partner several states away. As operations expand and herd sizes grow, these relationships become increasingly important. 

While much of the focus around expansion tends to center on buildings, equipment and financing, one of the most pressing challenges is securing enough land for feed production and manure application. In many cases, the ability to grow hinges on how effectively producers can collaborate with others. That’s why building strong, strategic partnerships is not just helpful, it’s essential.

Let's explore six proven strategies to help plan ahead and foster partnerships that support long-term growth.

1. Rent Additional Land for Flexibility

The most straightforward method to obtain more land is to rent additional acreage for feed production and manure application.

What to Consider:

• Proximity is often a limiting factor—finding suitable land near the dairy can be difficult
• Buying large tracts of land may not be financially feasible for many operations
  
  

2. Enter Custom Growing Agreements

Dairies can contract with neighbors to grow corn and alfalfa, purchasing the crops directly from the field at harvest.

How It Works:

• The dairy typically harvests the crops
• Feed is purchased by weight, often based on a predetermined market price
• Manure is applied to the partner’s fields
• The dairy is often compensated for hauling costs

Why It Works:

• Dairies access feed without purchasing more land
• Crop farmers benefit from guaranteed prices and reduced harvest costs
• Earlier fall crop removal may enable a wheat rotation

Challenges:

• Convincing neighbors to grow alfalfa occasionally
• Ensuring landowners allow manure application, especially in spring
  
  

3. Secure Long-Term Leases with a Right of First Refusal

When renting land, long-term leases offer security. Including a right of first refusal gives the dairy an option to purchase the land before it’s sold to someone else.

Advantages:

• Offers future control without immediate purchase
• Strengthens long-term planning

Drawbacks:

• May require the dairy to match a high third-party offer
• Some landowners are reluctant to grant this right without upfront compensation

5. Partner with Investors for Purchase and Leaseback

Aligning with a neighbor or investor to buy land and lease it back to your dairy can be mutually beneficial.

Why This Strategy Works:

• Investors see farmland as a long-term asset
• Dairies retain operating control without owning the land
• Lease agreements provide a stable return to the investor

The Biggest Hurdle:
 Finding a willing partner or investor in your area.

6. Source Dry Hay from Distant Providers

If local land or feed is unavailable, sourcing dry hay from suppliers in other states can supplement your needs.

When This Makes Sense:

• Dry hay is part of the ration
• Western states often offer more consistent production

Keep In Mind:

• Transportation costs are rising
• Weigh the benefits against delivery and logistical costs

Plan for the Long-Term Starting Now

Ultimately, there is no simple solution to the growing need for feed as dairy operations expand. Employing creative strategies like those mentioned above can help ease the pressure.

Regardless of the chosen approach, establishing a mutually beneficial relationship between the dairy producer and the landowner is crucial for success. Planning a dairy expansion can be a one-to-three-year process, and strategizing for increased feed acquisition should be an integral part of that planning.

Let’s Support Your Operation

Connect with Compeer Financial’s team of dairy industry experts and subscribe to our monthly newsletter for more dairy industry updates.