A 2-year study compared milk production and profitability for confinement feeding versus rotational grazing. Guernsey and Guernsey x Holstein cows grazed perennial grass pastures from mid-May to October or were fed in confinement. Averaged over both years, confined cows produced 7% more milk; their milk was similar in fat concentration to that of grazing cows. Body weight changes and health of the two groups were similar. Net return per cow averaged $64 higher for rotational grazing than for confinement because of lower costs for feeding, facilities, equipment, and labor. Intensive rotational grazing of pastures is a competitive alternative for dairy cow feeding. However, farmers in the northern U.S. will still require stored feeds from late fall through early spring.