A LITRE of branded milk costs consumers up to 38 cents a litre more in Victoria than Queensland.
And the same litre costs a couple more cents in NSW than Victoria.
Queensland is also the cheapest state to buy a litre of private-label milk, also known as supermarket-brand milk.
According to Dairy Australia figures to March this year, a litre of supermarket label milk in Queensland cost about $1.13 a litre, 5c less than in Victoria and about 4c less than in NSW.
Dairy Australia's Situation and Outlook Report indicated Queensland farmgate milk prices as among the highest last season at 54-60c a litre.
Farmgate prices have dropped across many parts of Queensland this season and a group of National Foods suppliers are attempting to negotiate a better deal.
Dairy Australia strategy and knowledge manager Joanne Bills said Queensland had a larger percentage of "independent" stores, which used branded products for sales and promotions more than the major supermarkets, compared to Victoria.
"Staple products such as bread and milk are the real battle ground for independents, they don't have the emphasis on private brand products," she said.
Independent stores account for 69 per cent of outlets in Queensland, compared to 47 per cent in Victoria.
This larger percentage of independents, and the intensity of retail competition, is said to be behind Queensland's lower branded milk price.
Ms Bills said the combination of high farmgate prices and lower retail milk prices puts pressure on both ends of the supply chain.
She said dairy farmers have to endure higher costs to produce flat-supply milk, often when conditions are "not ideal" for pasture-based production, while there is retail margin pressure for processors.
Meanwhile, the latest Dairy Australia milk production figures for May indicate that year-to-date Victorian production remains down 6.5 per cent year to date.
However, production during May itself was down 7.3 per cent on last year.
Year-to-date production in northern Victoria was down the most (12.7 per cent) followed by Gippsland (4.7 per cent) and western Victoria (2.6 per cent).
National year-to-date milk production was down 4.5 per cent in May to 8.4 billion litres.
