Coles has agreed to meet with dairy industry stakeholders.
Woolworths officials have also been called to the meeting later this month, although have yet to confirm their attendance.
It comes as new industry group NSW Dairy Connect steps up efforts to find alternative buyers for the State's milk, potentially sending it overseas and draining supermarkets of local supplies for their cheap generic labels.
Good news options for the flooded fresh milk sector in NSW and Queensland can't come fast enough for farmers whose confidence levels in their industry's future have plunged to less than half the national average in just six months.
NSW Small Business Commissioner Yasmin King was appointed last year to provide low cost dispute resolution services and advise the State government how best to provide assistance to small businesses, including farmers.
The Commissioner's office and the State trade department have been quick to support producer efforts break the deadlock in the 20-month battle with supermarkets and major dairy processors over the impact of discounted $1 a litre retail milk sales.
"The State government's trade officials have been stunningly supportive and proactive," said Dairy Connect chief executive officer, Mike Logan.
He said farmgate milk prices were hopelessly unsustainable for most NSW producers and supermarkets must get involved in planning a long term solution.
The government is keen to help broker fresh milk supply deals to major population centres in Asia, with a milk vendor group already involved in trial air shipments of fresh milk to China in July.
Assuming minimum temperature and quality standards can be established in China, Mr Logan said there was no reason why milk could not be packed under a Dairy Connect label and sent to retailers in Shanghai, Guangzhou, Beijing or Hong Kong within 14 hours of being processed in Sydney.
Singapore and other big markets thirsty for fresh product were also being investigated, with Dairy Connect inquiries showing potential markets for much more than the 100,000 litres of surplus production currently dumped in local markets at heavily discounted prices.
Mr Logan said the trials showed export milk shipments could be achieved for affordable prices, in turn increasing price tension for milk in the domestic market.
Sliding farmgate prices have undermined farmer confidence levels this year according to peak industry body Dairy Australia, with only about 24 per cent of NSW and Queensland milk producers feeling positive about the future of the national industry.
In fact, 70pc in NSW felt negative about the future.
The poor levels of positive sentiment were well below the national average of 53pc according to Dairy Australia's latest research.
NSW's confidence slump had also triggered a cut in milking herd joining rates, with short-term production intentions down 5.5pc for the current season, while sub-tropical production will be 7pc down.
The number of Queensland and northern NSW (sub-tropical) dairy farmers planning an exit in the next three years in response to dismal fresh milk market signals and rising input costs also jumped from zero to 12pc since February.
However while 13pc of NSW farmers plan to shrink their herd production by 2015, 21pc were still planning to grow.
Dairy Connect president Adrian Drury said the squeeze on prices caused by supermarket discounting was unacceptable and farmers must pursue other market options rather than "waiting until the cows come home for a lift in supermarket payments".
He said the surplus milk buffer processors once used to guarantee their weekly fresh milk supplies, or alternatively put into manufactured product, had now vanished because local factories had been closed leaving farmers to carry the cost of surplus milk in the system.
"NSW and Queensland dairy farmers shouldn't be suffering this any longer at the hands of the supermarkets and processors like Lion," he said.
"We need a profitable long term strategy for all milk produced in NSW - when we talk with the supermarkets we'll be talking about them potentially losing their market power.
"They've taken their easy access to fresh milk for granted."