The Government says it will support a Parliamentary inquiry into milk pricing following pressure from opposition parties and the public for an investigation.
The chair of Parliament's Commerce Select Committee says with the Government now on board, it will start an inquiry as soon as possible.
Liane Dalziel says public hearings will be held before the general election on 26 November and hopes the committee can report back by 6 October when the House rises.
The Labour MP says she would like the milk price inquiry to cover the cost of milk from the farm gate through to retail sales.
She says it is important to give people confidence that they are paying a fair price for milk.
Opposition parties have been pushing for a parliamentary investigation since the Commerce Commission last week ruled out a full inquiry of its own.
Green Party MP Sue Kedgley says it is essential the inquiry has a wide terms of reference so it can examine whether an independent agent, such as a commissioner, should be appointed to determine a fair price for domestic milk.
However, Federated Farmers believes a select committee inquiry is premature.
Dairy chair Willy Leferink says government departments are still reviewing raw milk regulations covering the supply to independent processors and the way dairy cooperative Fonterra sets its prices.
Mr Leferink says the milk regulations and the farm gate price paid to farmers are interlinked and it would be wiser for these findings to be released first.