A herd of dairy cows is a significant asset: one of the biggest and most important that most farmers will hold.

In the current market, on the back of a rising forecast payout, dairy herds are in high demand. Anyone considering selling a herd this season can therefore expect to do well financially, so long as they follow a logical process, and engage expert advice.

PGG Wrightson Livestock National Dairy Specialist Jamie Cunninghame says any one of numerous different reasons will motivate the sale of a herd.

“Whether you are exiting the industry, downsizing, or aiming to raise enough capital to buy a farm, selling a herd is a big decision.

“Some herds are handed down through the generations. They might have provided the family’s livelihood for many decades. Selling such a herd can be an emotional experience. For others a herd sale is purely a business transaction,” he says.

Whatever the reason, once you’ve made the decision to sell, several factors need to be considered.

Typically, the sales process will progress as follows:
•    Select a livestock representative or agency to do an appraisal on your herd.
•    Decide what method of sale will best suit your needs.
•    Offer the herd to the market.
•    Negotiate with the most appropriate purchaser, or purchasers.
•    Sign a contract.
•    Deliver the herd to the successful buyer.

While these steps might seem straightforward, timing also comes into it, adding potential complications, and increasing the need for expert assistance.
 

Selecting a livestock representative or agency to guide you through the process is not to be undertaken lightly.

A conversation between a livestock representative and a farmer interested in selling a herd isn’t necessarily going to focus solely on the price or the commission. Ensuring the best level of service should be what wins the deal.

Here’s some questions to bear in mind when inviting a livestock agent to pitch for your business:
•    What networks can you access to find a suitable buyer or buyers?
•    How much broader expertise can you bring to provide service right through the whole selling process?
•    What experience do you have negotiating similar deals?

Jamie and his team have overseen numerous sales of dairy herds. He emphasises the care and attention to animal welfare required to successfully guide all parties through the process.

“We’re not just here to list the herd then sell it. Between the agent and the client, then also bringing in the buyer once we have found them, you need to manage the herd. That begins with the initial decision to sell, and proceeds all the way through to the point of delivery. That takes good co-operation and communication, and can take several months. Whatever the duration, you have to work with the purchaser and the vendor to ensure all conditions are met, and that the best outcome is achieved for all parties, especially including the herd itself.
 

“Typically a dairy farmer will work with his or her livestock agent over several years, shifting a few cows here or there, assisting when it comes time to secure a bull team, then moving on cull cows and replacing them if required. Selling a herd is a completely different exercise, on a much more substantial scale. While some buy and sell herds more often, particularly some of the industry’s bigger players, for most dairy farmers selling a herd is not an everyday task. Therefore, does it make sense to give the responsibility to your regular livestock representative, or are you better off engaging someone with specific, relevant expertise?” he says.

Most farmers selling a herd will negotiate a forward contract and arrange the transaction by private treaty. However, depending on the herd itself, and the aspirations of the vendor, other options may be more appropriate, as Jamie explains.  

“We treat each herd and each owner on a case-by-case basis. We go out to meet the farmer, look at their herd records and the productivity they have achieved, and inspect the cows. While generally the preference is for a paddock-to-paddock private treaty sale, we also discuss the other marketing options.

“Some clients have always looked forward to having a clearing sale, which can be a satisfying way to cap off and celebrate a farming career. Others may have high end cows in their herd, in which case we might look to separate them out from the rest and offer them either at auction, via bidr, or maybe in a hybrid sale that will attract potential purchasers both in person and online.
 

“In most instances, the financial outcome is the main objective, in which case we will assess what is the best way to extract optimum value for that herd. If the client does have an appetite for a clearing sale, we need to assess how well organised they are, whether their on-farm facilities are suited to that style of presentation, and their location relative to potential buyers. On that basis, we will make a recommendation on how best to sell,” says Jamie.

Sometimes factors push that recommendation towards a less obvious marketing option.

“A few years ago, having inherited a high-end pedigree herd from their parents a number of years previously, then continuing to do well from them in the meantime, a client decided to retire and therefore wanted to sell their herd. These were desirable genetics, in the family for more than 50 years, and ranked as one of New Zealand’s top dairy herds.

“While the obvious course was ‘let’s just take your herd to auction,’ that left the vendor well outside their comfort zone. As they wanted to sell the herd as a single entity, rather than breaking it up, we recommended something different, suggesting a sale by tender. We needed to find a purchaser whose values most fitted with the vendor’s expectations, and could recognise the special value that came with this herd.

“As well as using our network, we advertised through social media, with great success, narrowing it down to a shortlist for the client, who then put their cows on a forward contract with their selected tenderer. Although that took some research, careful negotiation, and attention to detail when we eventually transacted the herd, it was an excellent outcome all round,” he says.
 

PGG Wrightson’s comprehensive forward contracts for herd sales have frequently been subject to legal examination and review, particularly when industry practices change.

“These have stood the test of time. Terms and conditions are designed to protect both vendor and purchaser, even in extreme cases, of which the M Bovis outbreak is the most notable example.

“Once we have a willing buyer to match the willing seller, we sometimes look at the contract to determine whether anything needs to be changed so as to pull the deal across the line.

“Invariably, that comes down to what the market is doing, and while some clauses in the contract may be subject to negotiation, with the market in its current state, any variation is most likely to fall in favour of the seller, who is likely to have several alternative options in the event that the selected purchaser is unable to follow through,” says Jamie.

Finally, with the sale complete, the only remaining operation is to transfer the herd to the successful buyer, as Jamie explains.

“We can organise transport, as well as providing guidance and tips on best practice preparation ahead of trucking. The MPI ‘fit for transport’ app is a useful resource, based on the transport requirements in the codes of welfare and regulations for dairy cattle, along with other classes of livestock. We encourage farmers to use the app to ensure this final part of the transaction goes as smoothly as possible, which is what everyone involved wants,” he says.

In the current market excellent payout forecasts and falling interest rates have helped sector confidence, in turn providing positive impetus for the dairy livestock market, which sets most factors in favour of the seller, as Jamie explains.

“Anticipating the 2025/26 season, dairy farmers are working on the need to find replacements. Even though there was a reasonable supply of stock in the early part of last summer, as the number of last season’s empties became apparent, the quantity of cows available for purchase decreased significantly, making it impossible to fulfil the growing demand. In advance of next season, in order to guarantee that herd numbers are sufficient, farmers are taking a more proactive approach this year.

“Empty rates are keenly monitored, and as the bigger picture becomes more apparent, farmers are adjusting their purchasing decisions accordingly, resulting in plenty of market activity, including heavy demand for in-calf heifers and forward contract herds,” he says.