Recommendations for solving the problems of sustainable development of milk and dairy products market in the region are based on the study of its current state and promising directions. The dynamics of production of milk and its processing products, export and import, livestock and productivity of cows is analyzed. The contribution of various categories of farms to the receipt of raw milk has been studied, while the lag in milk yield in farms and households from agricultural enterprises has been revealed. The analysis of expenses in agricultural enterprises is presented, as well as the structure of material costs. The main problems of effective development of the industry of dairy cattle breeding include tendency to reduce the area under fodder crops; a weak feed base and increase in feed prices, which leads to the increase in the cost of milk; reduction in the number of dairy cows; small commodity farms, that is, the concentration of main volumes of milk production in households where the introduction of intensive innovative technologies is difficult; seasonality of the process; non-observance of veterinary and sanitary standards. The regional features of location of dairy processing enterprises have been investigated, confirming the close relationship between the development of the dairy industry and the raw material base. Those of them have been identified, which account for the largest share in production of the range of dairy products. The organizational structure of the milk processing enterprise "Gormolzavod" LLP was studied, the calculation of butter was made using its own raw materials. The competitive advantages of the processing enterprises of the region are revealed.