Dairy farming in a mixed farming system is a necessary supplementary activity to ensure a constant cash flow. Wheat and dairy1 farming were practised mostly independently, hut over the past 5 years economic conditions in agriculture have changed drastically (tovemment policies focussed on international trade and le ft the agricultural sector in a market where farmers were not competitive and ill prepared for the task. Economic pressure increased and several producers in the Western ('ape region left the industry Wheat farms in some areas in the Swart land without the support of a dairy providing a constant cash flow farmed at a loss. Nevertheless milk and wheat production have increased while many farmers are struggling financially for survival, and its was necessary to take corrective action or leave the industry’. A possible explanation for the increase in production per unit could he attributed to the introduction of advanced technology and improved professional management It is. however, an agricultural characteristic to recover profit by increasing production when profit margin above cost declines In this paper more effective planning in feed cost is investigated as a measure to increase the profit margin above specified costs. Ixibour. veterinary and maintenance, costs are the smaller categories o f the total costs involved although not less important. Research was done on the economy of six typical non-grazing or feedlot dairies in the Swart land by doing income-cost analyses. Viabilities were analysed to reduce production cost by producing all or some of the ingredients in the least-cost feedstuff mixes versus total purchasing of the feedstuffs ('oncentrated feedstuffs are presently purchased from elsewhere and transported over long distances thereby increasing the total cost. According to Wilie (1995) the main concern of farmers is financial survival and not being able to afford practices which might improve sustainability Their general perception is that sustainability costs money. Too often sustainable farming is discussed with farmers without any reference to profitability