Population growth and the needs for protein and dairy products has urged policy makers to pay attention to efficiency policies in the livestock sector. The objective of this study is to survey the factors affecting the income of milk production, to calculate cattlemen’s technical efficiency and to determine the factors affecting the technical efficiency in the Northern Khorasan province. The required data for this study is a balanced panel data and has been obtained by using cluster sampling method and questionnaire completion from 160 dairy farms of this province between the years 2009 and 2012. The Cobb - Douglas function was used to analyze the factors affecting the income of milk production. The Stochastic production frontiers (SPF) and stochastic distance frontiers (SDF) ,with and without inclusion of inefficiency effects, were used to measure the technical efficiency and to determine the factors affecting technical efficiency. The stochastic production frontiers (SPF) ,with and without the inclusion of inefficiency effects, estimated the average technical efficiency 0/96 and 0/93. In addition, the experience, targeting subsidies and main job of cattleman have a significant positive impact on the technical efficiency. The results showed that the numbers of cattle, land, and investment in equipments, labor and feed costs have significant positive impact on the income of milk production. The stochastic distance frontiers (SDF) ,with and without the inclusion of inefficiency effects, estimated the average technical efficiency 0/91 and 0/94, respectively. The experience, targeting subsidies and main job of cattleman have a significant positive impact on the technical efficiency. The numbers of cattle, land, and investment in equipment, labor, feed and veterinary costs have significant positive impact on the income of the milk production. According to the results, high educations and extension classes, farm industrialization, increasing number of cattle, farm specialization and providing a better feed and hygienic conditions are recommended for more efficiency and increasing production in the dairy farms of the Northern Khorasan province.