The present study was carried out to study the cost and returns of milk production among different types of dairy farms in Kerala. A stratified multistage random sampling procedure was used to select the area of study and respondents. The farmers/farm households were categorized into small or subsistence farms (1-2 cows), medium (3-10 cows), and large farms (more than ten cows). The gross cost per milk animal per day was ` 229.81, ` 203.04, ` 249.51 and ` 226.38 in small, medium and large farms respectively. The net return from milk animal/day was ` 44.46, ` 45.31, ` 62.02 and ` 48.46 in small, medium, large and overall farms respectively. The net return after deduction of imputed cost was ` 110.36, ` 81.9, ` 70.12, and ` 93.61 respectively. The net return per day per milch animal was ` 23.34, ` 10.39, ` 27.74 and ` 20.58 respectively in small, medium, large and overall farms respectively. The net return after deduction of imputed family labour cost was ` 92.59, ` 52.42, ` 43.12 and ` 70.51 in small, medium, large and overall farms respectively. The cost after deduction of imputed labour was much better and was lower in small farms signalling the major contribution of family labour in small farms. Since the cost of concentrate feed constituted the major share of the production cost of milk, strategies for better scientific feeding of dairy cattle and support from government is to be included in the planning of projects.

Highlights

• The cost after deduction of imputed labour was much better and was lower in small farms signalling the major contribution of family labour in small farms
• The net return from milk animal/day was ` 44.46, ` 45.31 and ` 62.02 in small, medium, large farms respectively.