A survey of 33,000 members of the Association of German Dairy Farmers found that 88 percent of respondents were ready to halt deliveries if prices continue to sink.
German dairy farmers need to sell their milk for at least 43 cents a kilogramme to make a profit, according to the association.
"If prices continue to sink, as expected, than we will have no other choice but to halt deliveries," association Chief Executive Officer Thorsten Sehm told the daily newspaper Berliner Zeitung in its Wednesday edition. "Our backs are against the wall."
If farmers stop deliveries, fresh milk could run out at typical regional storage facilities within a day and a half, Sehm said. He blamed the price drop on agreements between creameries and individual customers.
"This is the worst kind of early capitalism," association President Gerd Sonnleitner told the daily newspaper Süddeutsche Zeitung.
About 1,500 farmers in the southern German state of Baden-Württemberg rallied at midday Wednesday in Stuttgart to protest the price cuts. The president of the farm association in that state, Joachim Rukwied, said farmers there refuse to be shaken down by large grocers who have made deals for lower milk prices.
"What Aldi and Co. are doing in their milk price negotiations is like a declaration of war," Rukwied was quoted as saying in the German press agency DPA. "We are ready to fight."