BBC News: Monday, 10 March, 2003, 14:32 GMT
Jersey Milk has announced losses of close to £1.5m in the six months to the middle of December.
Some products made by the dairy may have to be cut order to stop the losses.
About half of the losses are from what are described as one-offs, which include pay-offs for farmers leaving the industry.
Managing director Kevin Keen said every area of Jersey Milk's business will be looked at in an attempt to try and curb the losses of £1.43m.
He said production of products such as butter and ice-cream may have to be cut.
But Mr Keen added he is confident that Jersey Milk's fortunes can be improved in the medium to long term.