The small farmers participate significantly in the total cow milk production in Serbia. Milk production stabilized at around 1.6 billion liters per year and one half of the total quality is purchased and processed in dairies, and the other half is spent and/or processed in rural farms in cheese and cream and sold in markets. The production(arranged by the farmers themselves), and marketing of finished products on markets, by rule, is organized by small farmers who have less than 10 cows. The farmers who have more than 10 milked cows have no technical conditions to reproduce milk themselves and they are forced to give the total amount of milk to dairies. The dominant position of small farmers in milk production is a result of declining farms. On small farms it is not possible to organize a massive and profitable production. A milked cow gives about 2.6 thousand liters, per year in Serbia and in the US, Canada and some EU countries more than 6 thousand liters of raw milk. The reduced number of farms and a small number of cattles have resulted in insufficient use, otherwise good natural resources for livestock development in Serbia.