If you are looking to buy land, and it is potentially high-priced, ask yourself some questions before you make the investment, says Dianne Shoemaker, extension field specialist with The Ohio State University. Consider these questions:
• Do you really have the dollars to invest in that land resource? Is that the best use of dollars for the dairy?
• If you invest in the land purchase, will you have to debt finance the purchase, and if so, will the cows have to pay for it?
“If the dairy has to debt finance that purchase, and the cows have to pay for it, keep total debt for the dairy operation under 40 percent and debt per cow at $3,500 or less,” Shoemaker says. “Total scheduled debt repayment per cow needs to be less than $500.”