A new milk brand will launch this week in Victorian supermarkets to raise funds for struggling dairy farmers in south eastern Australia, as pressure mounts on retailers and processors to pay more for milk.
Farmers' Fund milk will be produced by Murray Goulburn Co-operative and Coles under license from the Victorian Farmers Federation and will see 40 cents from every two-litre bottle go to a fund that supplies grants of up to $20,000 to dairy farmers hit by falling milk prices.
Coles first flagged the idea in June but the Victorian Farmers Federation's announcement is the first detailed information on how the milk will help farmers directly.
Consumer-led boycotts have hit Coles and Woolworths private-label milk, as the retail giants continue to sell the milk at $1 per litre, the same price since 2011.
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Earlier this year Murray Goulburn, a dairy co-operative which supplies milk across Australia, retrospectively slashed how much it paid farmers for their milk, leaving many to pay back the difference to the company.
The company cut the price after its predictions the milk market would recover from a global glut failed to materialise.
Its predicted price paid to farmers of $6.05 kilogram in July 2015 fell to between $4.75-$5.00 a kilogram in April 2016.
The first round of grants will be delivered in mid-October.
