DEPRESSED dairy cow prices represent the cheapest investment in terms of return on capital for the past four years.
Finance organisation CowBank said paying up to $1500 for a quality Holstein at the moment could be recouped via milk production in 12 months.
This time last year cows were $2000 and the pay-back was up to 18 months.
CowBank business analyst Luke Fitzpatrick said these calculations, which are done to assess its lending risk, have been compiled since 1999 and were based on Holstein cows producing 8000 litres/lactation with the assumed feed price being 40 per cent of milk price
"(Cow prices) are down a reasonable amount, possibly down a quarter or a third from where they had been, the (milk) margin is slimmer, but not slimmer by the same degree," he said.
Mr Fitzpatrick said viewing cows as a capital investment was taking a pro-active rather than reactive approach to market conditions.
He suggested holding carryover cows that were otherwise "sound" on out-blocks or agistment as long as there was enough home-grown feed.
These cows would be replaced in the herd by fresh milkers and those put aside could be used as replacements or sold later.
He said although the chopper price has been down, the difference in replacement price was $300-$500 and extra milk in the second half of the year would help lift returns for the entire season.
Mr Fitzpatrick said the feed barley to milk price ratio was also similar to 2009 when cows were last at their cheapest.
CowBank finances the purchase of about 6000 dairy cows a year throughout Victoria, Tasmania, South Australia's South East and southern NSW.
Elders dairy specialist Bernie Teasdale from Echuca said those buying or looking to buy wanted milk in the vat immediately.
