Intensive dairy farm operations have adversely affected water quality in the Conestoga Headwaters Rural Clean Waters Program (RCWP) project area of Lancaster County, Pennsylvania. In this study, alternative dairy manurestorage/ application systems were evaluated, including their effects on net farm returns and losses of nitrogen and phosphorus. Net farm returns were nominally reduced when nitrogen losses were constrained to 90 percent of initial dailyspreading losses as a means of improving environmental quality. When nitrogen losses were further constrained to 70 and 50 percent of initial daily-spreading losses, net returns were reduced significantly. Alfalfa acreage increased and herd size decreased to meet these more severe constraints. Hauling manure 40 miles away from the farm for use elsewhere to meet the nitrogen constraint increased net returns. It is less costly to haul a dairy cow's manure 40 miles than to give up the additional revenue generated by that cow.