In this paper we discuss the likely future milk production scenarios and breeding and management strategies in the EU in general, and in Britain and Ireland in particular. EU markets for most dairy products are stagnant in volume terms. There is, however, scope for value growth which would emphasise quality and added value, not price. The background scenario is therefore one of sharp commercial focus heavily influenced by consumer demands for quality, not only in physical terms but also in ethical, welfare and aesthetic ones. Future systems of production will need to be in tune with future markets. Perhaps three main sectors can be identified: intensive high output, pasture based systems and niche systems (e.g. organic systems). In each of these options the same questions arise: (i) What kind of cow/breeding strategy is suitable for the sector?, and (ii) What are the management guidelines which will secure efficient, sustainable productivity? In the past, the majority of dairy cattle improvement programmes have focused primarily on improving returns by increasing milk or milk solids yields. Future breeding programmes are likely to pay much greater attention to reducing costs than they have in the past. In pasture-based systems, or niche markets, this may lead to renewed interest in cross breeding to reduce health, re-breeding and replacement costs. In all systems there is likely to be much greater emphasis on traits other than production in selection indexes. Customised indexes will help producers to tailor their selection decisions to their particular markets and production systems. If the differences between future production systems are extreme, it may be cost effective to produce bull evaluations for each of the main systems. New molecular techniques are beginning to assist conventional selection programmes. In the longer term the transfer of genes between strains, breeds or species may be used for agricultural applications. However, it is questionable whether or not this would be acceptable to consumers in the EU. Management issues which will be important in future are exactly the same as they have ever been, dealing with feeding, fertility, health, housing, milking practice, hygiene and pasture management. Nearly all of these interrelate with each other and with breeding strategy. Particular issues in future may include management of robotic milking, loose housing, deliberately extended lactations, organic production systems and extended grazing. Future ‘feeding’ challenges will include optimizing concentrate use for cows of different genetic merit, and finding alternatives to conserved grass. Direct genetic modification of grass and other forages to improve their qualities both as grazed and as conserved material would also be useful. There is also likely to be increased emphasis on feeding cows to improve control of nutrient partition, and on improved feeding of animals in the transition between lactations. Tailoring feeding and management policies to the genetic merit of cows will be a continuing challenge.