DURING the early 1950's, a series of articles appeared in this Journal concerning the nature of feed-milk relationships and their economic importance.' The articles focused on the following questions: (1) Are the marginal rates of substitution between hay and grain constant or changing? (2) Does the principle of diminishing returns apply to milk production? (3) What is the economic significance of the feed-milk relationships? Some previous estimates of feed-milk relationships are used in this study to compare net returns for optimum rations (rations giving maximum returns above feed costs) with most profitable stomach-capacity rations, after adjusting for body weight changes and the additional costs of limiting roughage intake. Four hay/grain price combinations40/80, 30/70, 25/75 and 45/55-were selected to approximate alternative price situations which could exist in North Carolina.2 Two milk prices, $5.75 and $5.00, were selected to represent, respectively, the North Carolina average blend price and a lower milk price. The hypothetical milk production function in Figure 1 provides the theoretical framework of the problem. If the marginal rates of substitution are changing (nonlinear isoquants), the expansion path (DE) may be as shown. However, if the marginal rates of substitution are constant (linear isoquants), the expansion path will coincide with either the