Study was held on the smallholder dairy farming at Batu City, East Java. This research addressed to examine dairy farming value added and profit margin. Multistage sampling method was a technique to select 33 farmers who grouped into 3 scales involving scale -1 (having 5.-5.5 Animal Unit (AU), n= 9), scale-2 (owning 6-7 AU, n= 7), and scale-3 (controlling 7.5-8.5 AU, n= 17).  Primary and secondary data collection was about two months (April – June 2019). Descriptive analysis using economic formulation method was employed to analyse the data. Results reported that respondents were male farmers aged 50-59 years old with secondary school education and length experience (20-30 years) in raising dairy cattle and they came from medium family member (4-5 persons). Farmers who raised 5-7 AU (scale-2) achieved the highest value added about 57.36%, followed by 43.30% for scale-3 and 37.46% for scale-1. Similarly, profit margin was best-performing in scale-2 (30.63%) compared to scale-3 (24.75%) and scale-1 (22.27%)