Talks will begin today between officials of the Irish Co-operative Organisation and the boards of the dairy co-operatives to restructure the dairy sector.
The Director General of ICOS, Mr John Tyrell, will outline recommendations including amalgamations, mergers and other cost-saving moves in creameries and on farms.
The most dramatic recommendation to be put to the 34 dairy co-operatives will be the establishment of a single, large-scale plant to process the State's main dairy products.
Mr Tyrell yesterday confirmed that he will be meeting all the boards over the next few weeks to negotiate a streamlining of the industry.
Speaking at an ICOS meeting, he said Ireland's disadvantages in scale of production, seasonality, low margins and dependence on commodities needed to be addressed.
Mr Tyrell said ICOS would establish a steering committee of co-operative and industry representatives to further the implementation of the plan.
Mr Dessie Boylan, the president of ICOS, told delegates at the Green Isle Hotel, that last year had been difficult for dairy co-operatives.
He said he expected turnover for the co-ops to be similar or slightly lower than 1998.
Mr Boylan called on the members to co-operate in the forthcoming review of the dairy sector and said Ireland's competitors were consolidating rapidly to improve their position in the market.
He also called for consensus on the future direction of the co-operative marts and referred to the closure of a number of marts in the private sector.
In the last year private marts in Ashbourne, Drogheda, Dundalk and Edgeworthstown have closed and two more in Carrickmacross and Mohill are under threat.
ICOS has proposed cutting the number of marts from 100 to 50 and upgrading the remaining ones for exhibition or conference space or agribusiness.
ICOS has 122 co-operatives in its membership, which employ more than 37,000 people and had a turnover of £8.68 billion last year.