The study was conducted to study marketing system in urban and peri urban area of Debre Berhan town. Formal survey was used to collect data from six kebeles, which were selected from urban and peri urban area of Debre Berhan. A total of 180 households (60 from urban and 120 from peri urban) were selected based on ownership of dairy cow and willingness to participate in the study. The major milk customers reportedly reported by the respondents were cooperative (36.5%), collection centre (32%) and consumers (27%). Local collectors (64%) and urban consumers (29%) were the major customers of butter both in urban and Peri urban area of Debre Berhan town. With regard the transaction of milk and butter, marketing of milk was mainly has been take place at farm gate, while butter was at market place; village market and nearby town. As reported by the respondents, the average price of milk was 8.75 birr/liter where as butter was sold on average price of 146 birr/kg, however, the price of milk and butter much higher than in urban area due to alternative markets. Majority of the respondents (96.65%) were Orthodox followers, as market is typical problem during fasting season, therefore government or other development partners should be designed other strategies to ensure sustainability of milk and butter market particularly during fasting.

Keywords: dairy, marketing