The objective of this study was to assess the performance of the milk agrifood chain in the state of Hidalgo and to identify its critical factors. A statistical sample (maximum variance proportions) was applied, and interviews were conducted with input from suppliers, milk producers, milk collection centers and processing industry managers and both rural and urban consumers. The milk agrifood chain model for Hidalgo was established and critical factors for every link and also those having transversal impact (technical assistance, livestock technology, financial aspects, organization, integration, quality, processing technology knowledge and high competition with leading brands) were identified. From chain components interrelation analysis materials (forage and concentrate) and capital flow inside the chain was assessed. Annual concentrate flow was estimated at 59,260 t, that of forage at 770,035 t, and milk production of 411'105,000 L, of which 41 % was pasteurized, 56.3 % used by the cheese industry and 2.7 % sold as raw milk. With reference to the flow of capital, $MX 1,360.6 million was estimated as the raw material value and consumers paid $MX 2,642.9 million for the finished products (pasteurized and raw milk and fresh cheese). The method applied was useful to identify critical factors and a comprehensive capital and materials flow within the milk agrifood chain.