Several factors at present influence the dairy trade. The Milk Marketing Scheme within the UK conflicts with normal EEC arrangements and is a source of friction; the change in the price support system, and particularly the differences between the systems for butter and powder, and for cheese, has caused difficulties; the original balance between buyers and sellers in price negotiation has been disturbed; and the market is changing rapidly with increases in shop cartoned‐milk sales and in the demand for reduced fat milks. Surplus of milk production within the EEC is likely to continue, and the effect of this on market prices will be transferred to the UK via imports. Ultimately producer milk prices will have to be contemplated in relation to the development of new products to extend the market. Health considerations must be taken into account, but it is important that the quality and purity connotations of dairy products are not erode