Understanding the unique economics of grazing dairy operations was the focus of a recent Food Finance Institute webinar series, Financing Dairy Grazing for Ag Lenders and Bankers. The two-part program brought together dairy producers, agricultural economists, finance professionals, and lending experts to examine how grazing-based dairy systems differ from conventional operations and what those differences mean for agricultural lenders.
Facilitated by Andy Larson, Regional Coordinator and Director of Professional Development Programs for NCR-SARE, the discussions featured Jonathan Winsten, Ph.D., Agricultural and Environmental Economist with Winrock International; Paul Dietmann of Compeer Financial; Jason Karzes of Cornell University’s PRO-DAIRY Program; dairy farmers Tom Cook and Eric Grim; and Tera Johnson, Founder and Innovative Finance Expert at the Food Finance Institute.
Throughout the series, presenters highlighted the financial characteristics that often distinguish grazing dairies from conventional dairy operations, including lower capital requirements, reduced feed costs, and alternative approaches to managing profitability and risk. Speakers emphasized that while grazing operations may present different financial profiles, they can offer lenders valuable opportunities to support resilient and sustainable dairy businesses.
Participants explored the economic drivers behind grass-based dairy production, including market demand for grass-fed and organic products, evolving consumer preferences, and the importance of matching production systems with business goals and available resources.
Producer panelists shared firsthand perspectives on operating grazing dairies, discussing the management decisions, financial tradeoffs, and risk management strategies that shape their businesses. Their experiences provided lenders with a practical look at how grazing operations manage profitability while navigating changing markets, weather conditions, and production challenges.
The webinar series also focused on underwriting considerations for agricultural lenders. Presenters discussed key metrics, business characteristics, and operational factors that can influence credit decisions, encouraging participants to look beyond traditional benchmarks when evaluating grazing-based enterprises.
Johnson highlighted the importance of understanding the specific business model behind each agricultural operation rather than relying solely on assumptions or comparisons to conventional production systems.
The conversation concluded with a broader discussion of innovative financing approaches that can help support business growth, resilience, and long-term success for dairy producers. Speakers encouraged lenders to deepen their understanding of diverse production models as the agricultural landscape continues to evolve.
By combining perspectives from farmers, economists, and financial professionals, the series provided agricultural lenders with practical tools and insights for evaluating grazing dairy operations and strengthening relationships with dairy producers across the region.
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