Abstract:Fluctuation of raw milk price is the major problem in the development of Chinese dairy industry.This paper uses Census X12 seasonally adjustment and H-P filter to analyze the characteristics of fluctuation of raw milk price and its causes.The result shows that the fluctuation of raw milk price is manly affected by long term trend and cyclical factors,and the influence of seasonal and irregular fluctuationis extremely weak.The longterm trend of fresh milk price is rising,but it has showed downward trend since 2014.The cyclical trend can be divided into three cycles as “large fluctuation-relatively gentle-much larger fluctuation”.Changes of demand and production costs,shocks of importing dairy products,policy adjustments and safety incidents are the most important factors affecting the fluctuation of fresh milk price,while the difference of productive efficiency in open market,distorted profit distribution mechanism and rapid adjustments of dairy industry are the roots of price fluctuation and dumping milk.Therefore,China’s regulatory policies should focus on adapting to market demand,improving the productive efficiency and building a reasonable profit distribution mechanismand price warning mechanism.