In 1985 the U.S. dairy industry generated cash receipts of $18.1 billion. When the receipts associated with the dairy cattle marketed through the beef system are included, the dairy industry generated almost $26 billion, or about 17 percent of the 1985 total cash receipts of U.S. agriculture. Thus, the dairy industry is a major component of the U.S. farm economy which generates demands for many products and services. The purpose of this paper is to provide the reader with some indication about the current condition of the U.S. dairy and milk markets and to relate those changes to veterinarians practicing in large animal and dairy businesses. This paper briefly explores four propositions about the nature of the U.S. dairy sector. These include:• Fundamental market and technological change will continue.• Government involvement in the dairy industry is assured.• The direction of government policy will be known shortly.• The role of the bovine practitioner will change.