The state of production and processing of milk in Cherkassy region, the structure of the milk sold by quality of varietal composition of milk taken to the dairy plants are considered in the article, EU requirements for milk quality, quality indices of preserved milk of processing enterprises of Cherkassy region are presented.

It was determined that sustainable development and efficient functioning of the domestic market of milk and derived products, adequately reflected interests of participants of manufacturing chain of enterprises of dairy product subcomplex and ensuring their competitive ability can be ensured by integration of all scopes of activities of relevant product subcomplex, creating associations (cooperatives, agro-industrial organizations, etc.) for the production of milk and milk products, which will include the enterprises of the agricultural sector and representatives of processing industry and the region.

It was established that an important role in improving the efficiency of milk production in agricultural enterprises of Cherkassy region plays milk quality. The difference between the purchase prices for milk of ‘Extra’ class and milk of first grade depends on the season and milk processing enterprises. Taking into consideration the technological state of livestock farms of most agricultural enterprises, milk realization is possible only of first grade.

Analysis of the processing sphere activity revealed that currently the largest milk processing enterprises in Cherkassy region is JSC ‘Irakliivskyi Maslosurzavod’ and JSC ‘Zvenygorodskyi Syrkombinat’. Despite the trends to decrease of raw staff production, plants annually increase its provision by purchase in other regions.

Reasons of low quality products on the raw milk market are caused by a substantial portion of production in the private sector. In 2012 on the studied milk processing enterprises, farms of population provide half of prepared milk.

In addition to issues of quality and safety, the problem is to create a certified developed chain for milk collection. While some milk processing enterprises create chains for collecting milk with reception centers equipped with modern refrigeration and laboratory equipment, etc.. Almost all milk processing enterprises for raw materials coming from households of population, apply additional pasteurization which met all necessary safety standards. However, while this approach is not widespread, the problem of quality of raw material, which hit the enterprises, remains unsolved.

For the development of milk product subcomplex, it’s necessary to develop and implement effective economic measures that would allow the enterprises of milk product subcomplex to function effectively on the market for production and sales of high quality dairy products.

Effective functioning of milk product subcomplex of Cherkassy region depends on the general state of the economy as a whole system, the development of which is provided by state measures and internal factors of their competitive ability formation. Functioning of milk processing enterprises in market conditions objectively requires strategic orientation and perspectives of adaptation to constant changes in both the internal and the external competitive environment, gaining advantages in producing high-quality, affordable products.

Key words: competitive ability, production volume, milk processing enterprises, the quality of milk sold, milk product subcomplex.