The aim of the research was to establish whether the production of dairy cooperatives, measured by sales value, is connected with the product innovations and environmental protection costs. he data related to years 2004 to 2014. It was found that these factors are usually significant. It was further established that those cost are disproportionately high in relation to the dynamics of production and prices of dairy products. It turned out that environmental protection requirements are so restrictive and cost-effective that they can cause skipping dairy cooperative to the increasing financial, technological and law difficulties. Apart from that the increase of product innovations drops significantly suggesting that the supply is near to saturation in terms of assortments on the market.