Farmers might have slammed a milk deal between Victoria's peak farm lobby group and supermarket giant Coles, but it did not stop more than 600 from applying for the grants that came out of it.

In response the industry crisis, the Victorian Farmers Federation (VFF) created a milk brand that would see 40 cents from every two-litre carton sold injected into a kitty for dairy farmers.

The lobby group partnered with Coles supermarket, which agreed to stock the milk alongside its $1 per litre brand and provide an initial $1 million for the 'Farmers Fund'.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 12 seconds 4 m 12 s Victorian Farmers Federation president David Jochinke says more than 600 farmers applied for money that came out of a controversial milk deal between the lobby group and Coles supermarket. ( Danielle Grindlay ) Download 7.7 MB

Sectors of the industry were angry about the deal, with a VFF insider telling ABC Rural it went against everything the organisation stood for.

The VFF has now allocated 60 grants, of between $5,000 and $20,000, after reviewing applications from more than 600 farmers.

"We had applications that covered a range of things, from effluent ponds to succession planning to feeding and dairy equipment," VFF president David Jochinke said.

"If they could demonstrate it would improve their businesses, that's what we really honed in on."

This first round had nothing to do with milk sales, but Mr Jochinke said analysis showed that consumers were supporting the brand.

"We hopefully will gain around about $1.5 million to $2 million [over the next 12 months]," he said.

"That's our ideal and that's what we're sort of trending towards at the moment."

What Mr Jochinke could not confirm is whether VFF milk is impacting sales of other brands stocked in Coles that are also designed to compete with $1/litre milk and boost farmer returns.

"We're just placing the product so that if you're currently buying that home brand milk, [you might] consider buying Farmers Fund milk," he said.

"As far as other brands, if you're currently buying them and are wanting to support them we fully encourage that as well.

"What we're trying to do is bring that home brand up."

Mr Jochinke said many unsuccessful applications would be considered in the next round, which closes at the end of December 2016.

Woolworths partnership on cards

Mr Jochinke stressed that the VFF had not made any exclusive agreement with Coles supermarket to supply its milk brand.

"The Farmers Fund milk is 100 per cent owned by the VFF and we can put it into any shop that we please," he said.

"We've had some preliminary discussions with other distribution chains about trying to get the Farmers Fund into Woolworths.

"Coles helped set it up. They're the initial team that we went with and they're the ones we've been focussed on to get the product up and out there to start with."