Scottish dairy farms: navigating market trends and opportunities

For example, buyers tell us they appreciate Scotland’s current tuberculosis-free status as well as the Scottish Government’s emerging agricultural support scheme and its focus on rewarding production and innovation.

A two-tier market

A two-tier market for Scottish dairy farms is emerging. There is currently robust demand for first-class, ready-to-go dairy units from well-financed purchasers across the UK and beyond. These buyers are seeking high-quality land, good slurry storage, and practical dairy facilities, including cubicles for milking cows and accommodation for young stock.

Conversely dairy farms that have seen little investment in infrastructure, often due to producers nearing retirement, tend to take longer to sell. High costs of labour, raw materials, and borrowing mean that such units must be very competitively priced to attract interest in today’s market. However, with inflation becoming more controlled and the base rate stabilising, we may see more mortgage-dependent buyers entering the market as the year progresses. Some buyers are already taking a strategic, long-term approach to purchasing, viewing the cost of finance as just another necessary input for their business operations. Successful buyers are more likely to have consulted specialist lenders who understand the agricultural sector and are less reliant on automated lending to help them secure the best possible financing options.

Meanwhile some sellers are opting to take a longer-term, pragmatic view: by selling or developing non-essential assets such as barns, yards, or cottages in the first instance they have been able to use the proceeds to improve farm infrastructure, often with an eye toward maximising the value of a potential sale.

Although still significantly higher than the ten-year average, the costs of inputs such as fertiliser and energy have become more stable; as such the prospect of running a dairy farm is more attractive than it has been in recent years. Sellers and buyers alike are beginning to see the potential for more manageable operating costs, enhancing the appeal of investing in Scottish dairy farms.

Strategic reviews can help maximise value

A strategic review can be incredibly useful in creating plans to maximise the value of a property being sold. Additionally, a specialist valuation provides potential buyers with the best opportunity to assess a property’s potential and secure it at the most advantageous price.

The Scottish dairy farm market remains robust despite challenges and fluctuations. As the market continues to evolve, strategic planning, sound advice, and understanding the nuances of the sector will be key to success for both buyers and sellers.

Scotland’s dairy sector is diverse, ranging from extensively grazed, low-yielding cows to highly intensive, high-input, high-output herds. Home to approximately 880 dairy herds, the greatest concentration of such farms is in the south west of Scotland, supported by the region’s long grass-growing season by virtue of its relatively mild climate – a result of the Gulf Stream’s effect on the Solway. There are also some advantages of scale in being located near some of the largest milked herds in Scotland (between 1500 and 2000 cows) with the associated benefits of an active local network of agricultural suppliers.

Take a look at three we have on the market there: