The allocation of some of the more important inputs in the production of fresh milk in three regions of Natal is assessed with the use of production functions. The marginal rate of substitution criteria is used to establish least cost combinations of concentrates and pastures in East Griqualand and in the Natal Midlands, and concentrates and forages in the Ixopo area. Estimates of profit-maximizing combinations of inputs are also presented for the three regions. The results indicate that fresh-milk farmers need to reassess their combinations of inputs to improve profits.