Coles announces deal with Norco to supply milk to southeast Queensland THE milk war that crippled the dairy industry may be about to end, with Coles announcing a deal with co-operative Norco to supply milk into southeast Queensland. The deal will cut out the Italian-owned milk processor Parmalat and will mean Norco will spend "several million" dollars upgrading its Labrador facilities on the Gold Coast to handle a significant boost in volumes. It will also mean farmers in the Lismore based co-operative will be paid a premium for milk. Norco said Queensland farmers will get the opportunity to supply milk into the deal, which provides a better price for farmers, but does not control the price Coles will set the product for. Queensland Dairyfarmers Organisation chief executive Adrian Peake said the new supply contracts with Coles will pay a premium and deliver a better farm gate result. "We hope that as Coles is to be paying Norco a premium, this is the first real sign that the supermarket 'milk price war' and retailing fresh milk way below its true value at the ridiculous price of $1 per litre may come to an end," Mr Peake said. If Coles is now prepared to pay more to dairy farmers and offer longer term contracts, that is a major step forward. The QDO has been calling for this for a long time now. QDO naturally will monitor the new arrangements and transition of milk volumes closely. In Queensland we are short of milk and farm gate prices are below the cost of production for the majority of farmers. As such we are seeing farmers leaving the industry that we can't afford to lose. Over the last two years we have lost over 60 Queensland dairy farmers from our industry which equates to a loss of over $240 million dollars of investment in fresh milk production. Simply our current domestic market for fresh milk is failing. The end of the milk price war would be the best outcome, as at the end of the day all dairy farmers Australia wide need to receive a sustainable price for their milk.