This paper studies the effects of the EU milk quota abolition decided in 2008. The analysis is carried out using econometric techniques combined with simulations with the agricultural sector model CAPRI. The results show that without quotas, milk production in the EU may increase by more than 4%, combined with a price drop of 10% and with agricultural income losses as a consequence. The results are regionally differentiated, where competitive regions increase production by up to 30% and increase profits, whereas production and profits decline in regions with higher costs. In some areas where production is intensified an increasing nitrate surplus is anticipated with possible negative environmental consequences.