The article considers the current state, trends and problems of development of the dairy industry of Ukraine in modern conditions. The subject of the research in the article is the competitiveness of Ukrainian dairy products in global markets. The goal is an identification of comparative advantages of the dairy industry of Ukraine and identified prospects for its further development. The purpose of the article is to find out the current state and dynamics of production, world prices, demand, exports of dairy products in Ukraine and the world, to determine the comparative advantages of Ukraine in the dairy industry based on the calculation of the Balass index, to review the environmental aspect of the industry. General scientific used research methods: system analysis – to determine the competitiveness of the dairy industry of Ukraine; historical method – to track trends in the global and Ukrainian dairy market; correlation analysis – to determine the interaction of price relations in the domestic market, statistical method – to reflect quantitative indicators, etc. The following results were obtained: based on the study revealed trends in reducing production and exports of dairy products, identified comparative advantages of the dairy industry of Ukraine in a larger regional territory of European markets and proposed ways of further development in accordance with current challenges in the world. Conclusions: the Ukrainian dairy industry is able to compete in world commodity markets, promising areas for export expansion may be Kazakhstan, Moldova, Kyrgyzstan, the Middle East. Given the overall reduction in the capacity of the dairy industry in Ukraine, producers propose to focus on intensifying production and implementing new technologies, taking into account the environmental component.