The body would gather intelligence on overseas markets, develop UK dairy industry strategy and urge the government to introduce a voluntary milk price regulator, the Royal Association of British Dairy Farmers (RABDF) said at this week's Dairy Event conference.
Earnings remain low across the UK dairy industry, which has led to more farmgate milk price cuts this year and warnings from farmers' unions that the sector faces 'meltdown'.
"The sector is in a bad state. Producer lack of confidence is hanging over the industry like the Sword of Damocles," said RABDF chairman Tim Brigstocke.
British milk producers are paid the lowest farmgate prices, around 18p per litre, in Western Europe. "On average almost three farmers per day left dairying in the last 12 months, and among those quitting are the more progressive and business oriented producers," Brigstocke told conference guests.
It has never been more important to create a National Dairy Body, he said, adding that the UK was the only major milk-producing country not to have one.
One of its first tasks would be to help establish a voluntary milk regulator, potentially called Ofmilk, which could work to a new concept of Fair Trade milk prices in the UK and identify areas for margin savings in the supply chain.
Brigstocke's words were a thinly veiled criticism of existing dairy industry association Dairy UK, which was formed in 2004 to represent both milk processors and producers.
Dairy UK immediately slammed proposals from RABDF as unrealistic and impractical, warning that Britain could not return to a managed milk market and that retailers and dairy firms were unlikely to sign up to any voluntary regulation.
"If anybody can point to something Dairy UK is not doing and should be, which is legally within our remit, we will be delighted to hear from them," said chairman David Curry MP.
"Dairy UK understands the sense of frustration amongst the farming community about milk prices. But there is no 'with-one-jump-jack-is-free' remedy in a fast moving and competitive market."
It is not the first time calls for a more united industry approach have been voiced in Britain.
RABDF campaigned for a 'national plan' three years ago, and, last year, a report by the Dairy Supply Chain Forum suggested a new central body to guide dairy industry strategy and pinpoint key areas for innovation.
It said a lack of cohesion and co-operation on these issues could blunt the sector's competitive edge.