Milk price wars cost farmers $200m

A Senate committee looking at voluntary food and grocery codes of conduct has been told there is no fair and reasonable market for milk.

Dairy farmers have told a Senate inquiry a supermarket price war has cost them $200 million and created a shortage of milk in Queensland.

Coles and Woolworths have been selling their own brand of milk at a heavily-discounted price for almost four years.

"There needs to be a way to create a fair and reasonable market and that's not what's happening," Adrian Peake, from the Queensland Dairyfarmers Organisation, told a Senate committee looking at voluntary food and grocery codes of conduct.