Hokkaido, as center of Japanese dairying, 3.48 million tons of raw milk which was about 40% of total production in Japan were produced from 11,400 farms in 1996. The average herd size and the annual volume of milking per head in Hokkaido were 78 head, 7,200kg, and the quality of raw milk also is much better than that of other area in Japan. Raw milk having less than 100,000/ml in viable count and less than 300,000/ml of somatic cell count were 99.6%, 93% respectively. In spite of producing large amount of high quality milk, only 26% of total amount was processed as market milk and 76% was used for making dairy products like butter, cheese and milk powder. Therefore, because of big difference in price between the raw milk for market milk and for dairy products. the income of dairy farms are much less comparing to other parts of Japan, where most of the raw milk are consumed as market milk.