This report aims to identify a pathway for dairy farmers to move from land farmers to land owners. In this report, I single out a pathway known as lease farming and analyse the feasibility and financial pathway to farm ownership over a ten-year time frame.
To begin I set the scene on trends formed over the last decade in our dairy sector. I analyse milk price, land price, debt levels and track the statistics behind the decline in Herd Owning Share Milkers or HOSM.
Within this report is the numerical and financial data of an example lease contract I have created. This example has been designed for this report and is not currently in use. I have analysed varying examples of ‘in use’ lease contracts and have create d a contract that suits the objectives I have set out.
The key fundamental to this report is for land ownership transfer from lessor to lessee. This can be measured by the lessee’s equity level being greater than 25% of the total dairy business at year ten. I have factored in the ability to maintain relationships with farm owners as well as rural professionals, being an under lying benefit to the lessee to take ownership at year ten.
I conclude by addressing the need to look towards the future when determining our next pathway through the dairy industry and how we can make the current environment work for ourselves.
We produce food in an ever-changing world but one thing remains the same, we need to retain our land in our hands because we are the only ones who do kiwi.