Production quantity, quality, and prices of cow milk in Czech Republic, as well as in Poland, are permanently influenced by economic factors and, after EU participation, also by the milk quota regime. Alongside similarities production characteristics, in Poland and the Czech Republic there exist substantial differences. The aim of this study was to overview changes taking place in the meat and milk sectors of the Czech Republic. Despite the decreasing cattle population (including dairy cows), production in the Czech Republic is rather stable because of rising milk yield. During the last few years there has been a milk surplus on the market, even thought dairy exports dominate over import. A precondition of the realization of milk on the market is its high quality and this has become a basic prerequisite for profit and for the maintenance of the customer in the competitive market. An analysis has therefore been carried out of the economic indicators of the dynamics of milk yield, overall production and the quality indicators of milk, the bulk purchase and buying price of milk, during the years 1998 to 2004, including a survey of the costs, profits and the marketability of milk in the given years. In 2004, the milk purchase price, including compensation payment, ranged around 8 crowns (CZK) per litre. However, the production costs of milk sold increased to 8.42 crowns resulting in a lack of profitability. This was a result of an increasing growth rate in expenditure over milk yield. The level of expenditure and profits of the milk production of agricultural enterprises is going to be comparable with average results attained in EU-15. The static level of milk production is characteristic for all countries operating with a milk quota regime (EU-15, Norway, Switzerland and Canada). Individual reference quantities become a limiting factor for many producers. Based on EU data milk output is forecast to exceed national quota for 2005/6 in Czech and Poland, exposing both countries to hefty fines.
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