The Irish Creamery Milk Suppliers' Association (ICMSA) has asked co-ops to freeze their wage bills by making staff redundant.
Its president, Jackie Cahill, said two years ago the ICMSA had called for a freeze in wage bills at co-ops so that any wage-rate increase would have to be financed by a cut in staff.
Saying he regretted this had not happened, Mr Cahill said co-op managements must address this issue before taking any decision to reduce the income of farmers by cutting milk prices.
"And the first thing ICMSA would ask them to bear in mind is that the average farm income is way below the average income of those employed by co-ops.
"We would also point out that other bodies have a role and a responsibility to hold the net milk price."
Mr Cahill said his organisation was looking for a two-year suspension of the disease and inspection levies, which together amounted to approximate one cent per gallon on milk prices.
He said while no one doubted that most co-ops have made cost savings recently, further savings could and must be achieved.
He also announced that he had written to the Irish Dairy Board asking it for an €18 million payout to dairy farmers because of the financial pressure they were facing.
"Over the years farmers have invested wisely in the Irish Dairy Board. The Irish Dairy Board is now a robust and a financially-sound entity.
"Given the enormous financial pressure on dairy farmers at present, the board of the Irish Dairy Board should consider making a once-off payout to dairy farmers to support milk prices.
"I have written to the chairman suggesting that the board actively consider matter.
"An €18 million fund could boost milk price by the equivalent of three cent per gallon."