In order to describe the ways of handling, processing and marketing milk from urban and peri-urban production systems of the North shoa zones of Central Highlands of Ethiopia, 175 dairy farms were selected for survey data collection. Due to poor market access and high transaction costs and the perishable nature of raw milk, the amount of sold milk and prices were significantly lower for peri-urban producers. Traditional ways of milk processing at household level include practices which may contain risks for product quality affecting consumers’ health. Providing basic handling and health education for producers, therefore, is likely to result in improved milk quality in the markets. Direct delivery to the privet collectors was the largest primary milk outlet for urban producers, while milk cooperatives were the most common outlets for the peri-urban system, respectively. Therefore, to enhance dairy production and marketing, milk co-operatives that could be able to market larger volumes and sufficiently reduce transaction costs should be supported by governmental and non-governmental organizations by providing technical and infrastructural support.

Keywords: dairy, Ethiopia, marketing, milk, peri-urban, production systems, urban