In order to analyze the environmental performance of Smallholder Dairy Farms (SHDFs) located in the State of Mexico, a Life Cycle Analysis (LCA) was carried out using two methodological approaches (A1 and A2) to estimate and interpret environmental impacts. A1 consisted in obtaining the average inputs and outputs of 15 SHDFs to generate a representative farm life cycle inventory, while A2 included an individual environmental impact analysis per SHDF to obtain average values of the contributions per analyzed midpoint impact category. The feed production subsystem generated the highest contributions to environmental impacts per liter of raw milk produced. Estimated emissions based on A2 approach, resulted in higher environmental impacts compared to results obtained with A1. The estimated values for the midpoint impact categories obtained with A2: Climate change, Fossil depletion, Terrestrial acidification, and Agricultural land occupation, were 8.73%, 30.77%, 100%, and 20.49% higher compared to A1 approach, respectively. While A2 provides more accurate results, it requires more time and resources compared to the integration of a panel of representative dairy farms.