The total economic cost of producing milk in the United States was $14.74 per hundredweight (cwt) of milk in 1989 and $14.98 in 1990. On a per cow basis, the U.S. cost of producing milk was $2,171.70 in 1989 and $2,274.83 in 1990. The average return (residual returns to management and risk) for U.S. dairy producers was higher in 1990, at $0.14 per cwt compared with $0.11 in 1989. Although the average economic cost of producing milk increased in 1990, producers received an increase of $0.20 per cwt in U.S. milk prices, higher receipts for dairy cattle sold, and an increase of almost 500 pounds in milk output per cow, yielding average cash receipts of $15.12 per cwt of milk sold.