Production of milk is a complicated and multi-factorial process. Production of milk depend on various factors like feeding, breeding and management of animal. In addition, other parameters, including age at first calving, season of calving, stage of lactation, parity, quantity of human labour applied, animal's age, animal value and so on, have an effect on milk yield. Milk production is a function of a number of resource inputs and the understanding of which resource inputs have how much significance in milk production is crucial for a dairy farmer if he is to bring about desired changes in his farming at the micro level.The primary objective of this paper is to examine the economics of buffalo milk production in terms of output, productivity and factors influencing buffalo milk production in guntur district of andhra pradesh. A multi-stage random sampling methodology is adopted for the investigation. 300 respondents samples are drawn by using multi stage random technique. It was the analysis to conclude that the the estimates for both the full sample as well as the subsamples suggest that fodder used per animal per day, green fodder followed by concentrate used per animal per day and the age of the animal could explain 60 to 80 percent of the variations in the value of Milk Yield Per Day Per animal. Among the independent variables, dry fodder used per animal and green fodder used per animal per day are statistically significant with positive impact and in case of magnitude of impact on dependent variable concentrate used per animal per day is highest. But the predictor variable, Number of Labour hours required per day, did not have any significant effect on the dependent variable. The models for all samples are valid as can be seen from their respective p-values of the F statistic. The explanatory power of the model can be enhanced by introducing new explanatory variables but at the risk of introducing multicollinearity.