About 120 dairy farmers have rallied in Warrnambool's botanic gardens, calling for better prices and more government assistance.
The rally was organised by a group called, Farmer Power, which says the industry is in crisis because the price paid to milk producers is below the cost of production.
The federal politician, Bob Katter, addressed the rally.
Mr Katter's Australia Party plans to contest electorates in Victoria.
He says the biggest challenge facing dairy farmers is the market power of the two largest supermarket chains.
"If you are selling into a market place, a duopoly market place, Woolworths and Coles with around 90 per cent of the market, it's just a joke," he said.
"They can pay you what they feel like paying you and they feel like paying you less than nothing, so that's what you've got to take."
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