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It is beneficial to all those in milk production enterprise and an essential information for consumers as well. Milk producer can compare the total expenditure with other milk producers and may take judicious measures to curtail the expenditure in production of milk.2. Milk producer will try to implement such principles of management that would help in reducing cost of milk production.3.
It helps in fixing a reasonable optimum price of milk suitable to both milk producers and consumers.4.
Creates a competitive spirit among producers which encourage them to produce milk at low cost.5. Survey Method:In this method investigator goes to individual dairy farmer or dairy farm and collects the information pertaining to cost of milk production from the records maintained at the dairy farm. The data regarding expenses on feeding, labour, care, milk production, income from sale of milk, calf and manure up to 1 year or 2 calvings are collected.The cost of milk production is determined dividing the total expenses by milk yield.
Investigator has an advantage of collecting data from large number of dairy farms from the available records in shorter period of time.2.

Direct Observation Method: An investigator, in this method, observes all the day-to-day expenses incurred on the different items of milk production and keep on recording. Labour cost was reported to be second important component costing on an average 19 per cent of total expenditure. Fodder cost:Say fodder requirement of buffalo per day is 40 kg and calving interval average is 400 days. The milk animals will be purchased during their 2nd lactation and in first month of lactation period.4.
Average lactation period has been taken as 300 days in case of buffaloes and crossbred cow, followed by a dry period of 100 days in buffaloes and 80 days in crossbred cow.5. The average milk production per lactation has been taken as 3,000 litres in case of buffalo and 3,600 litres in case of crossbred cow.6. Generally the mortality of calf has been taken at 15-20 per cent during the first year, and an adult mortality 2-3 per cent.12. Depreciation on milk animals (Livestock), buildings and equipments are calculated at the rate of 10 per cent.13.

Dispose off milk buffalo after 6-7 lactation and crossbred cow after 7-8 lactations and replacing them with younger sock of known pedigree or from the heifers reared at the farm.16. 6,000 per labour per month along with other facilities such as residential accommodation etc.17. To overcome gynecological problems, vaccinations and to improve overall management at the farm help will be taken from veterinary services. Dairy farming can be more profitable if good feed and fodder and also pastures are made available.4.

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