This 4-yr study examined total lactation performance of dairy cows in two feeding systems: pasture-based and confinement. Spring and fall calving herds were used and each seasonal herd had 36 cows on pasture and 36 cows in confinement with 282 Holstein and 222 Jersey cows included over seven seasonal replicates. Pasture-fed cows received variable amounts of grain and baled haylage depending upon pasture availability. Confinement cows received a total mixed ration with corn silage as the primary forage. Data were collected on milk production, feed costs, and other costs. Pasture-fed cows produced 11.1% less milk than confinement cows. Across treatments, Jerseys produced 23.3% less milk than Holsteins, but calving season and various interactions were not significant. Feed costs averaged $0.95/cow per day lower for pastured cows than confinement cows. Feed costs were lower for Jerseys than Holsteins and for cows calving in spring. Income over feed costs averaged $7.05 +/- 0.34 for confinement Holsteins, $6.89 +/- 0.34 for pastured Holsteins, $5.68 +/- 0.34 for confinement Jerseys, and $5.36 +/- 0.34 for pastured Jerseys; effects of breed were significant but treatment, season, and interactions were not. Economic factors such as labor for animal care, manure handling, forage management, and cow culling rates favored pastured cows. Higher fertility and lower mastitis among Jerseys partially offsets lower income over feed cost compared with Holsteins. Milk production was lower in this study for pasture-based systems but lower feed costs, lower culling costs, and other economic factors indicate that pasture-based systems can be competitive with confinement systems.