Dairy farming emerged as an important source of livelihood, particularly on small holder households. An attempt was made to analyze the cost and returns from milk production in Ballia district of Uttar Pradesh. The study covered 150 households which were then post stratified into small, medium and large categories of households based on the herd size. The study revealed that per day maintenance cost, as well as net return, was highest in case of buffaloes as compare to cross bred and local cow. The returns from local cow were positive for all categories of households but insignificant in small category households.