DAIRY leaders hope to work with Coles to improve returns for suppliers of $1-a-litre home-brand milk.
Australian Dairy Farmers president Noel Campbell said he had a "pretty amicable" meeting with the supermarket giant last week.
He said that while Coles did not indicate it would increase the price of house-brand milk, he was confident both groups could work together to solve issues of farmer profitability when they met again in two months.
The supermarket giant last week released a three-minute video and cartoon "sharing" its version of events and the flow-on effect to milk processors and farmers from the $1-a-litre milk.
The social media campaign attracted comments condemning the story.
The video included dairy industry background, such as only 25 per cent of milk produced in Australia becomes drinking milk for the nation, and that milk production increased for the first time in 10 years after house-brand milk was slashed to $1 a litre two years ago.
The cartoon also states Coles's profit from two litres of its branded milk was slashed from about 55c to 10c, while processors still get about $1 and the farmgate price for two litres went up about 4c to 90c.
Mr Campbell said ADF viewed it as Coles "only telling part of the story" and said the end of the decade-long drought was the biggest contributor to the milk production rise.
Coles's head of communications, Jon Church, said $1-a-litre milk helped customers meet rising household costs and the video explained how Coles sourced milk and what it had done to support those who produced it.
"These are important messages which are often overlooked in the reporting of milk pricing," he said.
"Given that much of the feedback we get on milk comes through social media, we decided to launch the video on YouTube and tell customers about it using Facebook.
"We have also used the graphic to tell our team members what we are doing on milk. We have no plans to use the video elsewhere."
Mr Church said the information was based on Coles and ABARE data, however, he acknowledged that the markets were different in each state with factors such as logistics, climate and soil conditions affecting the cost of production.
"We've used national average figures to highlight the fact that Coles funded the retail price cut for customers by reducing our own margin," he said.