Victorian farmers have launched a new brand of milk in a bid to lure customers away from supermarkets' $1 litre labels and raise funds to support struggling farmers in southeast Australia.  Farmers' Fund milk will launch this week in Victorian supermarkets as the peak body for dairy farmers says $1 per litre private-label milk, such as those sold in Coles and Woolworths, has "eroded" the amount of money in the dairy supply chain.  "The $1 litre milk policy has seen a shift in total sales consumption ... in essence that means less money going through from processors ... through to the farm sector," Dairy Australia trade and industry strategy group manager Charlie McElhone told AAP.  The Farmers' Fund milk will be produced by Murray Goulburn Co-operative and Coles under licence from the Victorian Farmers Federation (VFF).  Forty cents from every two-litre bottle, to be priced at about $2.50, will go to a fund that supplies grants of up to $20,000 to dairy farmers hurt by falling milk prices.  The first round of grants will be delivered in mid-October.  The private-label milk still holds a fair chunk of the market and hopefully the new milk could claw some of that back to farmers, VFF president David Jochinke said.  "If you are buying the home brand milk this is your opportunity to invest in the industry," Mr Jochinke said.  "This is a product you should value. This isn't a product that just grows on trees or just falls out of cows, there is a lot of work that goes behind it," he said.  Coles first flagged a similar 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, as the grocery giants continue to sell the milk at $1 per litre, with its market share dropping from 65 per cent to around 50 per cent, Mr McElhone said.  "Consumers are not comfortable about the fact that milk is so cheap, and in many cases cheaper than bottled water," he said.  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.  Although the milk will only be available in Victorian Coles supermarkets to begin with, if it was successful the VFF would consider moving into other markets, Mr Jochinke said.
A new milk brand will be sold in Victorian supermarkets to raise funds for farmers in south eastern Australia, amid pressure on retailers to pay more for milk.