By Sarah Flack, Sara Ziegler, Avery Anderson, and Heather Darby
The Northeast Grass-Fed Dairy Project has been doing research, outreach and education to help support success for the growing number of grass-fed dairy farms. Current research includes high-energy forages, soil fertility and nutrient cycling on grass-fed farms, sensory and nutritional quality of grass-fed milk, youngstock rearing and development, farm economics and cost of production and we have conducted several national surveys on production practices and farmer perceptions. Information on how to find results and details from this project is included at the end of this article.
As part of the grass-fed dairy project, our team has been collecting and analyzing financial data from 100% grass-fed dairy farms in the Northeast with the goal of better understanding the cost of production. Since 2018, dairy farms located in NY, NH, and VT that ship 100% grass-fed milk have been eligible to participate. Each year participants receive a report on their own farm’s cost of production along with the benchmark we have created with several years of data.
In 2023 and 2024, based on input from grass-fed farmers, we began collecting additional farm management information in conjunction with the farm financial information so we could explore how management systems correlate with cost of production. The remainder of this article will explore some of the trends emerging from this grass-fed dairy cost of production work.
In 2023 and 2024, 32 farms from NY, VT and NH participated annually in the cost of production study. The farms had been organic for an average 11.7 years and grass-fed for 6.6 years. Farms managed 62.5 cows on 330 acres, or 5.17 acres per cow on average. However, within the group this ranged from just 1.9 to 12.9 acres per cow as some farms were purchasing a significant portion of their stored forages, while others produced all their own feed or even sold hay. On average, they grazed for 185.5 days, during which they averaged 82% dry matter in-take (DMI) from pasture. Herds were mainly composed of crossbreeds, although there were farms milking pure-bred Holstein, Jersey, and other breeds which differ in milk and fat production. While most farms milked year-round (84%), there were some fully seasonal herds (16%) and there were also some herds milking at frequencies other than twice a day (19%).
Farms sold an average of 8,457 lbs. of milk per cow, but this also had a very wide range from 2,338 to 12,984 lbs. Note that this is milk SOLD per cow, not total milk produced, so it does not include the amount of milk fed to calves or diverted for family use. To get a better idea of actual milk production, we collected information on how much milk was fed to calves. For farms raising some or all calves on dams or with nurse cows, we were unable to accurately quantify milk fed to calves so we could not estimate milk produced. Farms not using nurse cows or dams to raise calves (76%), on average fed 1.81 gallons of milk per day to each calf for 5.25 months. This totaled an average of 2,464 lbs. of milk per calf. Therefore, when this milk is added to milk sold, milk production was 9,228 lbs. per cow compared to the 8,457 lbs. sold per cow
On average, farms were raising 4.5 more calves per year than what would be needed to meet their reported replacement rate. This represents an average of $4,578 in lost milk income per year per farm. If extra animals are going to be raised to sell, the value/cost of milk and high-quality forage fed prior to sale of that animal should be considered. In recent years, pay prices for replacements have been high, and may actually cover both the direct costs and the opportunity cost (in lost milk income) of raising extra calves. However, when the price paid for replacement heifers goes down, raising extra calves on a grass-fed dairy may no longer be a financially viable decision.
In every year of this study, farms selling more milk per cow had lower costs of production. Simply stated this means there is more milk to spread the costs over. So, employing strategies to increase milk sold per cow will support higher net income as long as they do not require significantly higher input or labor costs. Some potential strategies to increase milk sold per cow are listed here. 
On average, farms had 2.3 FTEs (full-time equivalents). One FTE equals 3000 hours of work per year (and yes, most farmers work more than 3000 hours per year). The number of cows managed per FTE was 29 on average but ranged from 11 to 52. Farms that managed more cows per FTE had lower costs of production with each additional cow managed representing a $0.56 per cwt eq. reduction in cost.
With limited labor resources, farmers often look to installing milking parlors that require fewer employees and less time to milk, freeing up labor for other tasks and reducing costs. Interestingly, the number of cows milked per labor hour did not differ significantly between farms with parlors and farms milking in tie stalls. Farms with tie stalls did, however, manage about 6 fewer cows per FTE compared to farms with other systems and they sold 652 fewer cwts. milk per FTE. These farms also had production costs averaging $8.32 per cwt eq. higher than farms with other milking and housing systems. Overall, farms selling more milk per cow and selling more milk per FTE had a lower cost of production and higher net income.
Without grain supplementation, forage quality becomes one of the top priorities for a grass-fed dairy farm. A grass-fed cow requires a large quantity of forage with high nutrient content and fiber digestibility to allow her to consume enough dry matter and nutrients to support her bodily maintenance and milk production needs.
Farmers who ranked their forages as “excellent” quality produced 1,432 lbs more milk per cow than those who ranked their forages of lower quality. This included farms making all their own forages as well as farms buying in some or all of the forage needs
Grass-fed dairy farms are required to provide an average of 60% of the herd’s DMI from pasture during the grazing season which must be at least 150 days in length. Participating farms exceeded the requirement and grazed for an average of 185.5 days, during which they averaged 82% DMI from pasture.
Farms with longer grazing seasons had lower costs of production with each additional grazing day representing an $0.18 per cwt eq. reduction in total cost of production. Some strategies which can be used to extend the length of the grazing season include maintaining fertile healthy soils, thoughtfully managing a diverse mix of well adapted pasture species, carefully adjusting the overall farm stocking rate and good grazing planning.
Figure 1. Grass species with and without clover and impact on dry matter yield.
Data also showed that farms spending more per acre on seed and fertilizer produced more milk per cow. This may be related to farms continuing to improve perennial forage stands by introducing improved grass species/varieties, adding legumes, and adding soil fertility amendments to support higher yields and quality. One of the least expensive methods to improve forages is through frost seeding legumes. The addition of fertility inputs such as lime or wood ash to keep soil pH in an ideal range (6.2 to 6.8) can also support improved plant diversity and density to enhance forage quantity, quality, and soil health.
Interestingly, data from both the cost of production study and the 2024 national survey showed that farms including a higher proportion of pasture in the diet produced less milk per cow. However, higher pasture intake may lead to higher net income. Depending on the cost of managing the grazing system and the value of milk produced, pasture could be a lower cost feed source compared to stored forages. Different farms will have different “break-even” points for pasture intake and each farm will have to determine what works best.
There are many potential reasons milk production may be lower with higher pasture intake levels. Pasture productivity and quality change over the course of the grazing season as plants mature. Generally, forage quality decreases as plants progress in maturity and fiber becomes less digestible. This limits the amount of forage the cows can eat, and the amount of energy they are able to get from digestible fiber or plant sugars. In addition, the relative amounts of protein and energy also changes seasonally with changes in plant maturity and pasture composition. Excess protein relative to energy can lead to high milk urea nitrogen (MUN), loose manure and poor productivity in the herd. Growing conditions, including temperature, moisture, soil fertility, and pest/disease pressure can also impact pasture productivity and quality. Relying more heavily on pasture also often requires more land to be utilized in the grazing system. Long walking distances between the barn, water, and pasture can expend energy that could have otherwise been used to support milk production. Similarly, other conditions like heat and flies can negatively impact cow grazing behavior. All these could lead to a lower dry matter intake despite a higher proportion of it coming from pasture. Finally, when cows are managed off pasture during the non-grazing season, there may be more opportunities to observe and manage the herd more effectively. For example, in the winter, farmers may be able to push feed up to the animals more frequently supporting increased forage intake. Similarly, it may be easier to spend time observing cows in the barn to catch heats and illnesses which can impact the breeding and health programs which ultimately impact milk production. These are some of the factors that may explain why herds that receive more of their nutrition from pasture may be less productive.
Overall, grass-fed dairies that spent more on seed and fertility and had “excellent” quality forages produced more milk per cow. Farms with better labor efficiency, higher milk sales per cow, and longer grazing seasons had lower costs of production.
You can read all the grass-fed dairy farmer resources on the University of Vermont Northwest Crops and Soils website: https://www.uvm.edu/extension/nwcrops/grass-fed-dairy. If you don’t have computer access, contact Sara Ziegler at 802-309-3472 to receive a copy of the grass-fed production manual or other resources of interest by mail. If you are a grass-fed farmer shipping milk in VT, NY or NH and would like to participate in the cost of production project this winter, contact Sarah Flack at 802-309-3714.
We would like to thank all the farmers who graciously participated in this project. The information gathered through this project is helping us identify aspects of grass-fed dairy management critical to helping farmers be successful in this system. This project is part of a larger research project led by the University of Vermont, supported by funding from the USDA’s Organic Research and Extension Initiative (OREI), titled Enhancing the Viability of Grass-Fed Dairy Production in the U.S. Through Comprehensive Research and Extension (Project no. 2023-51300). For more information about the grass-fed project, contact Heather Darby at heather.darby@uvm.edu or 802-524-6501.
The authors’ contact information: Heather Darby, Extension Professor and Agronomy Specialist, University of Vermont Extension, heather.darby@uvm.edu or 802-524-6501; Sarah Flack, Agronomy and Farm Business Planning consultant, Sarah Flack Consulting, at 802-309-3714; Sara Ziegler, Agronomy Research Specialist, University of Vermont Extension, at 802-309-3472; and Avery Anderson, Economic Data Analyst and Research Assistant, University of Vermont, Avery.Anderson@uvm.edu
Posted: to Organic Production on Sat, Nov 15, 2025
Updated: Sat, Nov 15, 2025
