You are Mariana Ospina Restrepo, manager of Hato La Palma, a 150-cow dairy farm in San Pedro de los Milagros, in northern Antioquia (Colombia). It is 1 July 2026 and a cattle trader is offering you 30 cows in milk for delivery next week. Your father wants to buy them. On Friday you present the semester plan to the family board, and the first question will be what you do with the herd.
The situation
The farm milks Holsteins and Holstein-Jersey crosses on 110 hectares of kikuyo grass at about 2,500 metres, and sells all its milk to Lácteos Peñalta, which pays by quality. This morning Peñalta announced the semester's base price: $1,950 a litre, the highest in four years (all figures in Colombian pesos). The trader is asking $6.0 million a cow. Your father, Gilberto, who founded the farm and chairs the board, has already done the sum: with milk at that price, each cow bought pays a good part of its price in a single semester.
The vet, Camilo Arango, keeps saying the pasture carries about 160 cows comfortably: above that you buy silage, and overgrazed paddocks produce less for the whole herd. He also reminds you that bought cows tend to bring their own infections, and the tank already sits at 420,000 somatic cells per millilitre. Each cow delivers about 16.9 litres a day, about 462,000 litres a semester in all. The farm carries $380 million of fixed costs and $60 million of debt payments a semester, plus about $0.9 million of variable cost per cow. It has $200 million in cash and a $150 million overdraft line.
The dairy industry association has published its outlook: with the national herd expansion already under way, the base would fall to $1,750 in the first half of 2027 and to $1,450 in the second, before recovering towards $1,700 by mid-2028. Concentrate would move the other way, from $1,550 to $2,050 a kilo, and a cow in milk would be worth about $3.5 million at the bottom of the cycle. The accountant, Luz Dary Henao, has worked out what happens if nothing changes: the trough semester would close with an operating loss of about $136 million and cash would end the cycle at about $83 million.
There are four paths for the herd on the table: buy the 30 cows, keep the 150, sell the 15 least productive for beef at about $2.4 million each, or rear 25 of your own heifers at $1.0 million per heifer per semester, which would come into milk a year from now.