Improvement of food production is one of the most important aims of any state, in order to reach higher level in satisfying the needs in population feeding. Related to all that, a very important resource for food production is the production of milk, therefore an appropriate law and institutional attention has been paid to that production. Cattle breeding, especially cattle raising and sheep raising, have been having long tradition in our country, and production of milk and dairy products have been having large experience. Potential for cattle breeding development depends significantly on certain natural conditions, the area and structure of agricultural land that has been exploited, the way of organizing agricultural production, economical and social population structure and the reached level in economical development. Far below the average number of all kinds of cattle in our country compared with the available land categories, testify that in general there are unused resources in cattle breeding. Research work presented in this study is oriented toward supervision of milk production and dairy products in the Republic of Serbia for the period 1998-2007. The production of milk and dairy products in regions, in Central Serbia and Vojvodina was analyzed, afterwards changes in production in the period of research, as well as the participation of milk production in Central Serbia and Vojvodina, in total production of milk in th Republic of Serbia and base indexes. Reception of milk in diaries was supervised also, as well as the predicted annual capacity for milk manufacturing, the level of manufacturing capacity exploitation, as well as the export and import of milk and dairy products.