Objective: The objective of this study was to evaluate the production performance, nutrient digestibility, and income over feed cost (IOFC) of high-producing dairy cows consuming diets containing alfalfa or grass hays with either corn or wheat grain. Materials and Methods: Twenty-four Holstein cows were randomly assigned to 1 of 4 diets in a replicated 4 x 4 Latin square design with a 2 x 2 factorial arrangement of treatments (hay and grain types) and 21-d periods. Diets were formulated using a least-cost approach. To determine revenues from milk produced, the amount of ECM (kg-d(-1)) was multiplied by 0.303−kg(−1)(i.e.,classIIImilkprice;USFederalMilkMarketingOrder5).Thecostoftherationprovidedbytheformulationsoftware(-cow(-1).d(-1)) was divided by the predicted DMI (kg-cow(-1)-d(-1)) to obtain the cost of feed (−kg(−1)),whichwasthenmultipliedbyDMI(kg−cow(−1).d(−1))toprovidetheactualdailyfeedcost(.cow(-1).d(-1)). Results and Discussion: Cows consuming diets containing alfalfa hay consumed more DM than cows consuming diets with grass hay (27.1 vs. 24.4 kg-d(-1)). Cows consuming diets containing alfalfa hay produced more milk than cows consuming diets containing grass hay (47.5 vs. 44.7 kg-d(-1)). Milk from cows consuming diets containing grass hay had greater fat concentrations than milk from cows consuming diets containing alfalfa hay (4.22 vs. 3.89%). Using hay prices of $418 and $154-t(-1) respectively, for alfalfa and grass hays, diets containing grass hay resulted in greater IOFC than diets containing alfalfa hay ($8.39-d(-1) vs. $7.68-d(-1), respectively). Implications and Applications: Results of this study showed that IOFC can be supported when feeding grass hay using a least-cost ration formulation approach.