Bulgaria’s dairy industry was challenged in 2016 by the outbreak of lumpy skin disease in April 2016, followed by subsequent reductions in its dairy herd, milk production and import restrictions implemented by trading partners. Favorable milk prices encouraged the dairy industry’s modernization efforts and milk deliveries improved, although on-farm milk output declined. Data for the first eight months of 2017 indicate milk deliveries grew by 12 percent. Small and unprofitable dairy farmers continued to switch to raising beef and/or sheep, while larger dairies expanded, increased their inventories and invested in improved genetics. Post expects that herd sizes and milk stocks will expand in 2017 due to the more stable epizootic situation, higher milk yields and favorable milk prices. Concentration and commercialization will likely further decrease the number of subsistence farms. Changes in domestic support programs through 2020 seek to boost the competitiveness of the local dairy industry.