Reports yesterday suggested 1000 dairy cows had been sold this month and 50 farms had reported they’d stopped production since January 2011.

Senator John Williams yesterday said the two supermarket giants – Coles and Woolworths – were to blame for the demise of the dairy industry. 

He said most of the blame should be shouldered by Coles, which instigated the cut-price milk.

“In a Senate economics inquiry into the impact of the $1-a-litre milk price war, Woolworths, which matched the price, warned it may impact on the sustainability of the Australian dairy industry, and at least expressed concerns for the viability of processors and farmers,” Senator Williams said.

He said Coles was in denial and would not accept its actions would lead to problems for producers, instead suggesting the industry’s fate lay in the hands of processors.

“Cheaper milk is fine for consumers, but harsh for those producing it,” Senator Williams said.

“Queensland dairy farmers are losing money and exiting the industry, and there is a risk milk may have to be brought in from Victoria.”

Coles managing director Ian McLeod said his company was not out to damage any part of Australian farming.

“If he is true to his word, he will end the price war on milk today and restore decent margins, so the dairy industry has certainty and optimism,” Senator Williams said.