Dairy manure sludge (DMS) application to grazed forage pastures is a widespread agronomic practice. Unfortunately, the quantitative benefits of DMS application to improved pastures still has not been shown in the Caribbean. On-going application of DMS based on estimated nitrogen (N) content is unsustainable, and in many areas presents a threat to water quality, because the excess phosphorus (P) in dairy sludge is usually not extracted by plants and remains in soil until removed in runoff. Application of DMS based on Ρ content of the material may be a better alternative, but pastures may need to be supplemented with N. The nutrient concentration of DMS sludge in various farms of Puerto Rico was assessed. The mean (standard deviation in parenthesis) nutrient concentration of DMS (n=17) was 233 (120), 122 (77), 232 (123) mg/L for total N, total P, and total K, respectively. The economic benefit of DMS application, in terms of substitution for the price of nutrients in mineral fertilizer, could be from $79 to $158 per ha-cm (acre-in) of application, but the excess volume of DMS application from the improper application could offset potential agronomic and economic gains. Farmers applying DMS to fields should take every precaution to ensure that the infiltration rate of the soil is not exceeded and that during the application the volumes are kept to levels in which the nutrients applied do not exceed crop nutrient requirements. Further precautions include reducing the number of applications during the year and spreading the material to other areas of the farms. A case study demonstrated that there is an excess of nutrients generated on-farm which originate primarily from grazing animals, and is exacerbated by high animal densities, improper distribution of Ν and Ρ from DMS and fertilizer. Excess nutrients generated result in unsustainable nutrient rates to fields which could result in a waste of resources and environmental degradation.