Introduction. The problem of providing the population with milk and dairy products remains relevant today. The purpose of the article is to analyze the market for milk and dairy products in the Penza region, the main problems of its development and to propose the main directions of functioning. Research methods are monographic, economic-statistical, abstract-logical, balance, method of analysis. The authors analyzed the de-gree of self-sufficiency of the region in milk and dairy products, and also considered a number of reasons that have a negative impact on the development of the market for milk and dairy products. Among them, one can single out: a reduction in the number of cows in agricultural organizations and personal subsidiary plots of the population, the absence of mutually beneficial relations between agricultural commodity producers of raw milk and processing organizations, a decrease in the purchasing power of the population, etc. In the course of the study, an analysis was made of the provision of milk processing enterprises with raw materials. The idea is argued that in order to satisfy the population with a sufficient volume of dairy products, it is necessary to achieve a correspondence between the production volumes of raw milk and the production capacities of processing enterprises. According to the authors, in order to increase the efficiency of dairy cattle breeding, economically significant federal and regional programs for the development of this industry should be implemented. In the Penza region, dairy cattle breeding should be investment-attractive, and for this, modern large closed-cycle dairy complexes are being built in the region thanks to “Rusmolco”. Such dairy complexes not only increase gross milk production, but also create conditions for the primary processing of milk, which improves the quality of raw materials. Processing enterprises of the region, in conditions of high competition, are expanding the range of final products produced to maintain their positions in the market of milk and dairy products. In the Penza region, a large processing enterprise is OJSC “Penzensky Dairy Plant”. Conclusion. The authors made a conclusion about the improvement of pricing for raw materials sold. Processing enterprises should purchase raw milk at prices conducive to increasing the profitability of the commodity producer and ensure the level of profitability of milk production at the level of 55−60 %.