Shade, provided by trees within pastures, can affect cattle productivity through mitigating heat stress and by altering understorey pasture growth and cattle behaviour. Models for daily milk yield and body condition were used to evaluate the effect of pasture shade on dual purpose cow productivity within a silvopastoral system in a dry tropical province of Nicaragua. Daily milk yield and body condition were both negatively affected by pasture shade. Stocking density and age also had negative effects on daily milk yield, whilst night grazing had a positive effect. In addition, body condition was negatively affected by average daily milk yield and was positively affected by feed supplementation. There was a correlation between pasture shade and stocking density in both production models suggesting farmers compensated for decreased cow productivity, associated with increased pasture shade, by reducing stocking density. It is proposed that the positive effect of shade mitigating heat stress was likely present but its effect did not compensate for the decreased nutrient intake by the cows caused by either negative behavioural effects or reduced pasture productivity, or both.