Germany agriculture minister Christian Schmidt was quoted by The Financial Times as saying at a crisis summit in Berlin: "We all agreed that on the one hand we need structural improvements, but on the other that we need to provide short-term assistance to farmers.
"The federal government will provide the farmers with a package of €100m plus X. I am in talks with the finance minister, and will talk to [Germany's] states and Europe to determine how large the X is."
Germany is considered to be EU's biggest milk producer with 73,300 dairy farms producing around 32 million tons of milk in 2014, which was around one-fifth of all the milk produced in the region.
With a sharp decline in milk prices from more than 41 cents per kilo in 2013 to about 24 cents now, the country has suffered badly, according to the agriculture minister.
The European Milk Board's study found that in January the farm-gate price for German milk was 28.66 cents per kilo of milk compared to production cost of 44.94 cents per kilo, the publication cited.
The European Milk Board chairman Romuald Schaber was quoted by the publication as saying: "In the last three years, Europe has produced 13m tonnes more milk than it can consume, and this excess has to be completely sent abroad, because the demand in Europe is stagnating. That is the problem."
Schmidt said that representatives of the industry such as farmers and dairies had agreed to begin discussions on measures to revive the dairy industry including short-term cuts in ouput, the publication stated.
Schmidt said: "Farmers and dairies have to match supply and demand better than they have until now. We have to achieve an up-to-date and flexible way of controlling of supply."