Economic aspects of milk production and traditional dairy products on agricultural farms in the Republic of Serbia

Serbia has favorable natural conditions for the development of livestock production, especially the cow’s milk production. Average milk production is 1.5 billion liters per year and the dominant share is produced on small farms. Only 35.1% of the total amount of milk produced in Serbia is processed. The subject of this research are economic aspects of milk production and processing into skimmed cream and white cheese on family farms. For that purpose, the model for the production of traditional milk products on family farms was developed and analysed, by using the method of analytical calculation based on variable costs. The results have shown that the difference between the production price per liter of raw vs. processed milk was € 0.24, while between the selling price of raw and processed milk per liter was € 1. Farms with up to 15 dairy heads should consider milk processing, i.e. finalization of products.