Lactoferrin (Lf) and lactoperoxidase (LP) are milk proteins with antimicrobial and im‐munomodulatory activities. This study examined the effect of pasture allowance on the production of Lf and activity of LP, as well as the variation in the concentration of Lf and activity of LP in the milk of lactating dairy cows during late lactation. Following a 2‐week period where a herd of 20 cows was grazed solely on pasture, two different nutritional regimes were imposed upon the cows. For 4 weeks, 10 cows grazed ad libitum while the other 10 grazed a restricted amount of pasture. Milk samples were collected twice weekly throughout the experiment and were analysed for Lf concentration and LP activity, as well as for pH and concentrations of total solids, fat, protein, casein, lactose and somatic cells. Cows that had ad libitum access to pasture had higher milk yields, and higher concentrations of crude protein, true protein and casein and higher yields of fat, protein and lactose than those that had a restricted pasture allowance. While there was no difference in the concentration of Lf in the milk between the two herds, cows that had ad libitum access to pasture produced significantly greater yields of Lf than those that were restricted (1.45 versus 1.23 g day–1; P < 0.05). LP activity was greater in the milk of cows that had ad libitum access to pasture (6.9 versus 6.1 U ml–1; P < 0.01). Results for all milk components measured indicated that the variation between cows was much greater than the variation within cows. The quantification of these sources of variation will enhance the design of future experiments that examine the concentrations of Lf and the activity of LP in milk. They also provide information about the extent to which on‐farm management could be used to manipulate Lf concentration and LP activity in milk.