Dairy farmers may withhold milk from a number of creameries in a row over recent price cuts announced by Kerry plc and proposed cuts by other creameries.
The Irish Farmers' Association has invited milk producers to a rally in Tullamore, Co Offaly, on Monday to oppose Kerry plc's cut of 12 cent per gallon.
Dairy farming sources indicated yesterday that farmers were considering withholding milk in order to show processors that they were serious in their opposition.
IFA president Mr John Dillon said Kerry and Glanbia were "hell-bent on imposing unjustified price cuts".
He said all other dairies were waiting in the wings to follow suit.
"A ridiculous situation has arisen when a two-litre bottle of Kerry Spring water costs more in the shop than a two-litre bottle of milk," said Mr Dillon, as he announced the rally yesterday.
"Producers receive just under 40 per cent of the average retail price of milk to calve cows in autumn and spring, and milk them twice a day, 365 days of the year," he said.
"This leaves 60 per cent available for processors and retailers to bottle the product and put it on the shelves.
"This is a generous payment for relatively little work. I see no reason why producer prices need to be reduced when the margins down the chain should be ample to offer reasonable incomes to processors and retailers, and good value to consumers," he added.
"What is happening is that dairies are panicking in the face of competition fuelled by cheaper imported milk, by raiding farmers' pockets instead of addressing their own inefficiencies."
He said Kerry was imposing price cuts of around 12 cent per gallon of liquid milk, which added up to losses of several thousands of euro for each of their suppliers, equivalent to income losses of 15 to 20 per cent.
He said the dairies had devalued the high-quality milk produced by farmers by being weak sellers and giving high margins to the retail trade, which completely distorted the trade.
He also accused the dairies of failing to take costs out of production and of refusing to co-operate to improve efficiency, especially in the bottling area where there were more than 20 bottling plants in the State.